Mutually Profitable Exchange and Anticipation
Realise a profit by successfully anticipating and satisfying the needs and wants of the customers, better than the competition, over the long term. The whole marketing process should produce a mutually profitable exchange between the company and its customers. The company should make a reasonable profit and the customers should get a good quality product that they expect at an affordable price.
Organisation Integration
The organisations should be structured in a particular way so the main focus will be on those needs and wants of their customers. Each department will have a responsibility to look at the best way of delivering its service to the customers or as support to the other departments towards satisfying the ultimate needs of the customers.
Question 1 C)
Assess the benefits and costs of a marketing approach
According to Floyd (2002) some of the benefits of the Marketing Approach to a company are:
- achieve better co-ordination of activities
- finance the matching of available resources to selected opportunities
- improve communications
- minimise non- rational responses to the unexpected
- reduce conflicts about where the organisation should be going
- customer loyalty and trust
- profits to grow the business
- reduced failure rate of new, not properly researched, products
- out performing the competition by being there first
- referrals, from satisfied customers, and increase customer base
- increase in reputation
- achieving long term goals
- up-to-date and comprehensive knowledge of the target markets
Costs
The main costs involved in the Marketing Approach, which can be considered as the direct and indirect costs of the Marketing Department, could be summarised below:
- Cost of regular market research
- Cost of setting up the marketing oriented organisation structure
- Cost of customer retention
- Cost of the initial product development
- Cost of building up excellent services to meet customers’ needs and wants
- Staff’s cost including wages and salaries in each department
- Office and fixed assets expenses in the whole process
- Advertising and Promotions costs
- Cost of building long-term relationships with customers, suppliers, distributors for loyalty
- There will also be the marketing mix cost
Sometimes costs outweigh benefits but with the right leadership style it can be reversed.
Question 2 A)
Macro and micro environment influencing Paper Chase Ltd.
Macro-environment
There are many factors in the macro-environment that will effect the decisions of the managers of any organisation. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. The “PESTEL” framework is not independent of each other and many are linked (Johnson, G et al. (2006). Factors relevant to Paper Chase Ltd from the “PESTEL” analysis are as follows;
Political factors deals with areas such as;
- Environmental regulations
All of the above has a part to play in the function of Paper Chase Ltd, however I will briefly discuss about the tax policy value added tax, VAT will apply to some of the products that Paper Chase Ltd sells to their customers as well as the VAT that they also have to pay on some o their branded products from their suppliers which is 17.5% at the moment.
Economic Factors: These factors deal with the following;
- Fluctuations on exchange rate.
The factors that will affect Paper Chase Ltd the most are as follows;
Consumer Expenditure – the UK economy is in the last stages of recession, but this is not a problem for Information technology (IT) industry as people are spending more on computer hardware and software. However this is not the case where Paper Chase Ltd is concerned as they have to compete with bigger organisation that could be selling the similar products at a cheaper price.
Socio- Cultural Factors: They include the following;
- Shifts in values and cultures.
- Attitude to work and leisure.
The socio cultural factors affect people’s attitudes, interest and opinions. Culture is the set of values and patterns of learned behaviour developed as a result of living within a particular society. It includes religion, education, language, ethics, prejudices and patterns of social interactions. Population changes will have a direct impact on Paper Chase Ltd. Changes in the structure of the population will affect demand and supply of our products within the economy.
Technological Factors: They are as follows;
- Government investment in infrastructure.
- Identifying new research initiatives.
- Speed of change and adoption of new technology.
- New patents and products.
- Obsolescence.
Paper Chase Ltd will use technology in many ways, in its manufacturing processes, in its technology infrastructure such as internet and other information exchange systems, appropriate software which will help manage the organisation’s operations. Implementation of relevant and appropriate technologies will enable Paper Chase Ltd to react quickly to changes and respond to market demands. Technology will continue to evolve, as a Marketing Manager I should not ignore this fact or else the company will fail and may go out of business.
Legal factors – include the following;
- Employment and Health & Safety Law.
This refers to the laws that govern the way business is conducted both in the domestic and international markets. Every aspect of Paper Chase Ltd is controlled through legislation, from treatment of employees through to health and safety. Legal factors are important for Paper Chase Ltd as the organisation will have to work within legislative frameworks on issues mention above.
Environmental – include the following;
- Energy laws
- Rubbish Waste and its disposal.
The growing desire to protect the environment is having an impact on many industries such as the travel and transportation industries (for example, more taxes being placed on air travel and the success of hybrid cars) and the general move towards more environmentally friendly products and processes is affecting demand patterns and creating business opportunities. Paper Chase Ltd will have to work within the Environmental Protection Laws, the Waste Disposal from production of some of their products and also the Energy laws.
Micro environment
The Analysis for the Micro environment is the SWOT Analysis, which stands for Strength, Weakness, Opportunities and Threats.
Source [http://www.quickmba.com]
Question 2 B)
Propose segmentation criteria for any 2 products from the brain storming sessions
Segmentation
The purpose for segmenting a market is to allow the marketing/sales program to focus on the subset of prospects that are "most likely" to purchase their offering, If done properly this will help Paper Chase Ltd to insure the highest return for their marketing/sales expenditures. Segmentation identifies portions of a market, that are different in their needs and wants from one another, into segments of manageable sizes.
Targeting
According to Philip Kotler (2006) targeting as “the act of developing measures of segment attractiveness and selecting one or more of the market segments to enter.”
Positioning
Positioning is a perceptual location. It's where your product or service fits into the marketplace. Effective positioning puts you first in line in the minds of potential customers.
Positioning is a powerful tool that allows you to create an image. And image is the outward representation of being who you want to be, doing what you want to do, and having what you want to have. Positioning yourself can lead to personal fulfilment. Being positioned by someone else restricts your choices and limits your opportunities. Source [http://www.tenonline.org/art/mm1/9305.html]
The two products, from the brain storming sessions, selected for segmentation criteria for Paper Chase Ltd are:
- Mini first-aid kits
- Tea cups - personalised
Mini first-aid kits
This can be segmented according to the work place or the house holds population.
First aid kits have been around for as long as any of us can remember. That is a ‘must have’ standby in the home as much as in the workplace where employers have a statutory obligation to provide adequate first aid cover for employees who are injured or become ill at work. It could easily be misconstrued that this well-known product occupies a well-worn niche in a fairly mature and stable market with not much scope for future development. After all, there are only so many ways a sticking plaster can be packaged.
Tea cups - personalised
This product can be segmented by lower class, middle class and high class. All tea/coffee drinkers need a tea cup especially one that is made to suit you.
Question 2 C)
Which markets Paper Chase should target and factors influencing their choice?
The marketing mix variables consist of;
Mass marketing: Paper Chase Ltd will have to ignore market segment differences and offer one specific product to the entire market.
Differentiated marketing: Paper Chase Ltd will target different segments and develop several products to cater for the basic needs of a generalised segment and then for individuals needs within that same segment.
Niche marketing: Paper Chase Ltd should divert all the resources on a specific segment only. They will develop a particular product that satisfies one segment only.
Paper Chase Ltd should target the Mini first-aid kits using differentiated marketing. This will enable them to provide customer’s needs and fulfil customer satisfaction.
The factors that will affect the choice of Paper Chase targeting a market are as follows;
- Demographic factors
- Socio-economic factors
- Personality traits, life-styles
- Type of buyer
Innovative new products are brought to market in a steady flow. meeting all first aid needs in a variety of business and leisure locations, call centres, factories and sports centres. First aid kit, which can be removed and is taken to the patient, along with and a selection of other first aid kits to suit the specific needs of different industry sectors.
Question 2 D)
How buyer affects the marketing of Paper Chase’s products?
Buyer behaviour for first-aid kits:
Market research should be carried out continuously so that information is gained from each type of customer. This can be quite costly but the service should be a benefit for the customers. Knowing what the customers want will make both Paper Chase and their customers happy and satisfied.
This will affect the marketing of Paper Chase products if the company does not know what customers bought and secondly why this product is bought. This will assist in the products line so we can measure which products are growing, static or declining, thus indicating where there are opportunities and where we might be faced with problems. It is therefore quite crucial for Paper Chase to know and understand their buyer’s behaviour.
Buyer behaviour for tea cups - personalised:
The buyer behaviour in this case will depend according to the customer personality or the organisational culture of the business purchasing personalised tea cups. For example most recruitment agencies has personalised office stationary, as a form of advertising the company name. Paper Chase Ltd should understand their customers then their marketing will not be affected. If we understand our customers, then we will be in a better position to sell to them.
Question 3)
Identify and analyse the individual elements of Paper Chase’s marketing, to include product, price, promotion, place, people, process and physical evidence.
Paper Chase Ltd will require resources which can be analysed using the marketing mix. According to Lynch, R. (2006) they are as follows;
Product:
Paper Chase Ltd needs to have products that customers will want to buy. That is why Paper Chase is aiming at launching new products so as to maintain sales and introduce new customers. The products should be designed and developed with consumer needs in mind. Paper Chase Ltd can achieve this by carrying out research and development which can lead to competitive advantage for the company. The products produced by Paper Chase Ltd should be different from that of their competitors.
Price:
There are many determinants of the pricing decision for Paper Chase Ltd. Some of them are as follows:
- Cost of production
- Competitive conditions in the market
- Competitors` prices
All of the above cost will be determined by Paper Chase budget. For Paper Chase new products, I will fix skimming or penetration pricing and for the other one a good decision should be made before putting up the price so that customers are attracted with price.
Promotion:
Promotion will be done by Paper Chase Ltd in order to increase consumer awareness of our service and product, to encourage more purchases by existing consumers and also to demonstrate the superior specification or qualities of our product compared to competitors.
Place:
The place where the goods are delivered for example, the means of distribution should be a suitable one. If Paper Chase Ltd wants to keep control over the marketing strategy then direct routes are more likely to be used.
People:
People add value to an experience, as a part of the selling process, and as an important part of the marketing mix, Paper Chase staff would undergo training in personal and customer service. In the end Paper Chase workers should contribute to make the marketing process a success.
Process:
How services are delivered will create an impression in the customers mind. Paper Chase Ltd will need to deliver its services with utmost professionalism and ethics, so that customers may return.
Physical evidence:
Physical evidence is an essential ingredient of the service mix, consumers will make perceptions based on their sight of the service provision which will have an impact on the organisations perceptual plan of the service.
In conclusion, with the use of the above mentioned points it is likely that there will be an improvement in the implementation of the new product line for Paper Chase Ltd.
Question 4 A)
Select any 2 products from the brain storming session and elaborate on the application of different marketing mix to different markets segments and context.
Marketing Mix to different markets segments for Mini first-aid kits and Tea cups:
.
Briefly discuss the areas that need consideration, should Paper Chase consider foreign expansion in the future.
According to Onkvisit, S. and Shaw, J. J. (2004), International marketing (marketing across national boundaries) is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational objectives.
Paper Chase Ltd must conduct a “PESTEL” analysis of the country that they chose for expansion. By doing this they will achieve a greater economies of scale.
Domestic marketing is often explain in terms of a company manipulating a series of controllable variables such as price, advertising, distribution and the product, in a largely uncontrollable external environment, made up of competitors, culture values, a legal infrastructure and so on. Source [Gilligan, C. and Hird, M. (1996) International marketing]
Reference
Books:
Floyd, D. (2004) As Success Business Studies, 1st Edition, Italy: Amilcare Pizzi
Gilligan, C. and Hird, M., (1996) International marketing: strategy and management, Mackays of Chatham Ltd
Johnson, G. et al. (2006), Exploring Corporate Strategy, Text and Cases, 7th Edition, Ft Prentice Hall, Pearson Education Limited.
Lampel, J. and Mintzberg, H. (1996): Customizing Customization. In: Sloan Management Review. Vol.38, No.1
Lynch, R. (2006), Corporate Strategy, 4th edition, FT Prentice Hall; Pearson Education Limited
McNamara. C., (2000),Organisational Culture, Authenticity Consulting, LLC.
Onkvisit, S. and Shaw, J. J., (2004), International marketing: analysis and strategy, 3rd Edition, Prentice Hall
Palmer. D., (2002), Essential of Marketing, 2nd Edition
Internet Sources:
http://tutor2u.net/business/marketing/what_is_marketing.asp] As accessed on 3rd/01/2010, 18:43
http://www.businessdictionary.com/definition/organizational-structure.html As accessed on 3rd/01/2010, 20:15
http://www.businessplans.org/Segment.html As accessed on 5th/01/2010, 21:07
http://www.quickmba.com As accessed on 4th01/2010, 15:27
http://www.tenonline.org/art/mm1/9305.html As accessed on 5th/01/2010, 21:15
BIBLIOGRAPHY:
Books:
Floyd, D. (2004) As Success Business Studies, 1st Edition, Italy: Amilcare Pizzi
Gilligan, C. and Hird, M., (1996) International marketing: strategy and management, Mackays of Chatham Ltd
Johnson, G. et al. (2006), Exploring Corporate Strategy, Text and Cases, 7th Edition, Ft Prentice Hall, Pearson Education Limited.
Lampel, J. and Mintzberg, H. (1996): Customizing Customization. In: Sloan Management Review. Vol.38, No.1
Lynch, R. (2006), Corporate Strategy, 4th edition, FT Prentice Hall; Pearson Education Limited
McNamara. C., (2000),Organisational Culture, Authenticity Consulting, LLC.
Onkvisit, S. and Shaw, J. J., (2004), International marketing: analysis and strategy 3rd Edition, Prentice Hall
Palmer. D., (2002), Essential of Marketing, 2nd Edition
Rue, L.W. and Holland G.P. (1986) Strategic Management- Concepts and Experiences, Management series, McGraw-Hill International editions.
Internet Sources:
http://tutor2u.net/business/marketing/what_is_marketing.asp] As accessed on 3rd/01/2010, 18:43
http://www.businessdictionary.com/definition/organizational-structure.html As accessed on 3rd/01/2010, 20:15
http://www.businessplans.org/Segment.html As accessed on 5th/01/2010, 21:07
http://www.quickmba.com As accessed on 4th01/2010, 15:27
http://www.tenonline.org/art/mm1/9305.html As accessed on 5th/01/2010, 21:15
Journal:
Gavetti G. and Rivkin W.J. (2005) How Strategists Really Think- Tapping the Power of Analogy, in Harvard Business Review; April issue.
