Discuss, with reference to current authors, what is meant by a marketing orientation and/or a marketing oriented company. Illustrate your answer with examples of products or brands of your choice.
Discuss, with reference to current authors, what is meant by a “marketing orientation” and/or a “marketing oriented company.” Illustrate your answer with examples of products or brands of your choice.
PRINCIPLES OF MARKETING
The marketing orientation is perhaps the most common orientation used in marketing. It involves a firm essentially basing its marketing plans around the marketing concept and thus supplying products to suit new customer’s needs and changing customer trends. Business who recognise this “see the customer as the central driving force behind its activities, recognising that business only survive if they meet customers needs” Page 2 Liz Hill & Terry O’Sullivan Foundation Marketing 3rd edition
Marketing is a management process which identifies, anticipates and satisfies customer requirements profitably and efficiently. There are many different aspects that combined, create the marketing orientation:
The marketing mix is one of these and is made up of four vital aspects, Place, Price, Product and Promotion. “The key marketing activity is the management of the company’s marketing mix” (D.Jobber And John Fahay, Foundation of marketing 658.8 JOB, Page 9) and so when marketing a product or service any business must try and link between the four to reach their desired target market. Depending on the product or service in question a company’s marketing strategy will be different and they will consequently strive to achieve.
The Four P’s
Product – This is the final product or service that a business sells to its customers. The product will vary depending on the target market i.e. the quality of a product will depend on who the target market is. Take Tesco for example, they offer their customers the choice of buying ‘Tesco Value’ foods which are a cheaper inferior good which act as alternative to branded normal goods. They are aimed at customers with a lower income and smaller budget. When designing a product or service a company must look to attract customers and try to offer something different, something that would make customers want to buy their goods as apposed to a similar company offering similar goods, they must try and find a unique selling point.
Price – Pricing your product or service is vital and one of the most important decisions to make; too high and customers may not be willing to pay that price, resulting in fewer sales and ultimately a lower profit. And too low could also prevent a company from making a profit. To ensure that you are breaking even then the price you sell your product at must be more then the total cost you have incurred manufacturing the product or delivering a service. To calculate total costs, businesses use the formula TC=FC+VC (Total Cost = Fixed cost + variable costs). A business must find a balance between the two to ensure the customer is satisfied with the price, and to still generate substantial revenue. There are many approaches to pricing that a business could choose to use depending on the product or service. A few examples of this are: Penetration Pricing – Initially, the price charged for a product or service is set relatively low, and lower than many competitors to gain market share and establish a wide customer base. Once this is achieved the price is then increased. An example of this is Sky. When they first began to enter into the market they used a penetration pricing method to attract customers which worked. Now Sky own a massive 31.5% of their market share (). Price skimming is also another common method of pricing. Companies such as Apple have done this with their Ipod as they can charge a high price because they already have the market share and people will want to purchase their products as they are popular and of a good quality. Apple can be said to have high inelasticity of demand, whereby they could and do charge expensive amounts for their products, however people still choose to buy them regardless. Price skimming involves charging a high price because you have substantial competitive advantage. Physiological pricing is a further pricing method. It is used to encourage purchases by making is seem as if the product is a lot cheaper when in reality it is not. It is designed to encourage purchases on an emotional level rather than a conscious, rational level as in a way it almost tricks the buyer into believing that a product is a lot cheaper when in actual fact its not. For example a product may cost £19.99 which would make us think that even though in reality it is £20, we would want to buy it as it seems less.. A further method which relates to pricing are loyalty schemes that some companies offer, such as Tesco, in the form of points cards which can be used to purchase petrol or to save money on future purchases. “Direct marketers can tie a price-based loyalty scheme to individual spend. Rewards can be in the form of a straight price discount or can be ‘points-based systems’. These are now widely known as ‘loyalty schemes’. Loyalty schemes are established, important weapon in the direct markets amoury … Loyalty schemes have for some time been criticised by a number of commentators (Dowling 2002;peppers and rogers,1993;O’Brien and jones;1995 Uncles, 1994). Peppers and rogets suggested that, when used as part of an overall strategy of creating value for existing customers, they make sense, but otherwise they are essentially just another costly marketing promotion. Page 191- Principles of direct and database marketing – alan tapp, third edition
