Keeping track of the above is the job of the marketing department in an organisation. Marketing is essential for the success of any organisation. Their main aim is to facilitate the organisation by providing them with the right market research so they are able to meet the needs of their actual and potential customers.
Marketing contains of many processes such as:
- Selling products
- Advertising
- Market research
- Creating desire
- Consumer/organisation objectives
‘Marketing principles’
Marketing is essential for the success of all businesses. Its underlying goals are:
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Understanding consumer needs: markets change rapidly and it is important for any organisation to be up to date with these constant changes of the consumers’ wants and needs. The organisations that have failed to do so have been in declining markets. L’Oreal keeps updated about the changing cosmetic trends around the world. As the cosmetic industry keeps changing rapidly
L’Oreal needs to be aware of what their consumers needs. Fashion is an ever-changing trend and with this ever-changing trend it brings in new cosmetic products. Glam Shine Crystals lip-gloss meets the needs of consumers that need a product that makes their lips shine.
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Keeping ahead of competition: businesses should consider their competitive markets and evaluate the competitive prices in order to provide a much better service and quality products. Businesses need to stay ahead of their competitors. They could also provide customers with a faster service.
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Communicating effectively with customers: businesses need to think of innovations that could help with the communication between suppliers, contractors and customers. It may also need to pay more attention to their promotion of products. Even the best product may experience poor sales, which is why promotional support is necessary for succession.
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Using new technology: the use of technology is now considered as the key to the marketing principles. It provides a new channel of worldwide distribution, for products that can be bought and delivered over the Internet.
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Co-ordinate marketing activities effectively: in order to achieve the marketing aims and objectives the departments in an organisation may need to operate more effectively. This could include the diversification of the work force and the diversification with the allocation of the resources available to the company.
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Beware of constraints on marketing activities: be aware of the problems which are associated with the marketing activities of a business. Make changes in order to achieve high profit margins.
The 4 principles of marketing are a good starting point for developing an organisation’s marketing plan. These are called the marketing mix. ‘Product, price, place and promotion.’
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Product: The characteristics of the business’s product or services that meet the customers’ needs. For L’Oreal their range of cosmetics such as lip gloss, mascara, eye-liner etc are their marketing mix product.
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Price: Pricing strategy. The money consumers need to pay to acquire the product. L’Oreal needs to keep their price of products competitive and reasonable depending on their target audience.
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Place: Where and how the customer can obtain the product. A business needs to ensure that its consumers can find their product in an appropriate place whenever they decide to purchase. L’Oreal is a huge business known around all over the world for its amazing branded products. Its products can be brought in most cosmetic shops. Glam Shine Crystals can be brought in all the cosmetic outlets too.
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Promotion: making awareness of the product to the consumers. The activities that a business undertakes to ensure that the consumer know about the product or service and its capabilities. L’Oreal needs to evaluate how it needs to
promote Glam Shine Crystals to consumers in order for it to be successful. Making awareness of the product through the promotion.
The 4 P’s of the marketing mix can be extended to Packaging.
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Packaging: this is linked with the protection, promotion and containment of the product. Effective packaging needs to be distinctive and recognisable and should reinforce the brand image. Packaging provides a more distinguished feature of the product to the market. This brings out the image of the business to the market. The packaging of the product needs to be persuasive and eye-catching. Glam Shine Crystals comes in different shades. It has heart shaped wand and comes in a sparkly container.
Above is the packaging of L’Oreal’s Glam Shine Crystals.
Common law and statutory law protect the consumer and ensure that marketing is carried out in a responsible manner. The maker and supplier of the product are responsible for the care of the consumer. If the consumer feels that the product is harmful in some way he or she can bring claim against the producer. A number of Acts made by the Parliament strengthen the consumer protection. Acts such as:
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Data Protection 1984: This Act protects the information that consumers provide to the organisations. Organisations that hold data of consumers need to register with the Data Protection Registrar. They should also agree to guidelines and security.
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The Sales of Goods Act 1979: all goods that are sold should meet three main conditions. Firstly be of satisfactory quality and should be flawless, secondly they should be fit for the purpose they are purchased and thirdly they should be as described on the packaging. For example L’Oreal cosmetic products should not be scratched or dented.
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The Trade Descriptions Act 1968: this act prohibits manufacturers from misleading or giving false statements about its products. For example L’Oreal’s waterproof mascara should not be running down the consumer’s face in the rain.
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The Consumer Credit Act 1974: the act protects the consumers who purchase product or service on credit. The consumer must be given a copy of any credit arrangement they enter into.
1.3. Findings
Task 2
Describe how the use of marketing research by your business has helped it gain knowledge of its customers, competitors, and its market environment. (P2)
Market research is used as a guideline to focus and monitor the company’s effort. Market research manipulates all of the firms of the organisation including the marketing firm itself. Before a product is planned or launched research is required by all the departments of the organisation. For e.g. the product planning department of L’Oreal needs research for making and modifying their line of products to meet customer wants and needs more efficiently/scrupulously and more cost effectively.
Market research can be done through various methods. The spider diagram below illustrates some of the methods used for market research.
Source of information: Market Research for Managers Second Edition book by Sunny Crouch and Matthew Housden
Primary Research:
Primary research can also be known as field research. It can also be described as information gathered through interaction with people. Primary research is usually time consuming and costly. Primary research can be gathered by:
- Questionnaires
- Surveys
- Focus Groups
- One-on-one interviews
- Test markets
- Feedback
Example of primary research methods for L’Oreal:
This is a snap shot of L’Oreal’s quick survey taken from their website
Secondary Research:
Secondary research is also known as desk research. It is gathered through literature, publications and other non-human sources. It uses data that has already been published by someone which is why it is much easier to gather than primary research. Secondary research can be gathered through:
- Internal sources
- External sources
Internal Sources:
- Company accounts
- Internal reports and analysis
- Stock analysis
- Retail data – loyalty cards, till data etc.
External sources:
- Trade associations
- Household expenditure survey
- Magazine surveys
- Other firms’ research
- Government statistics
- Chambers of commerce
Sampling methods:
- Random samples
- Quota sampling
- Cluster sampling
- Multi-stage sampling
Before market research can be carried out an organisation needs to define what sort of data is required. They need to clarify their objectives and deciding the type of data required. Research is often divided in two categories:
Qualitative:
Qualitative research is rich in insight, understanding and that which cannot be justified statistically. It is more detailed.
Quantitative:
Quantitative research is based on numbers. This information is analysed statistically. For example how often people buy a product? How much they are prepared to pay for the product?
Source of information:
Use of market research
Marketing Research has its own advantages and disadvantages. Where market research can help focus attention on the objectives of the business, it can also be inaccurate and full of errors. The right use of market research helps in influencing marketing.
Before a business invests their time and money into a product they need to sit down and look at their potential market and be sure that they would be targeting the right customers and the product meets the customer needs. For a business to be able to do so market research comes into place. A business needs to perform market analysis.
As L’Oreal produces skin and hair products which needs to do a lot of research. L’Oreal uses cosmetological and dermatological research for the development of their strategies.
Source of information:
How does this research support its marketing activity? (P2)
Examine the strengths and weaknesses of different types of market research used by your chosen company. (M1)
Task 3: Apply market analysis techniques to your selected product (use a number of techniques). (P1)
Compare these techniques and indicate which is the most effective and why. (M2)
Task 4: Identify and describe the marketing strategy used by the company in order to increase demand for this product. (P4)
Using the evidence that you have available do you think it has been a success? (M3)
