4.1. The Role of Marketing

  • Marketing
    • Addresses people’s needs and wants and influences target consumers to buy a specific product instead of other competing products
    • A management process involved in identifying, anticipating, and satisfying consumer requirements profitably
    • It is about satisfying consumer needs and wants through exchange
    • It is a research based process of getting customers interested in a product through the management of the 4 (or 7) P’s
  • Marketing goods/products versus services
    • Goods/Products: 4Ps
      • Product
      • Place
      • Price
      • Promotion
    • Services: 7Ps
      • 4Ps
      • People (frontline staff appearance, skill, charm, helpfulness)
      • Processes (time, ease, accessibility, payment, aftersales)
      • Physical evidence (facilities, cleanliness, design, atmosphere, peripheral products)
      • Has a product oriented approach
  • Product oriented vs. market oriented marketing
    • Product Oriented Marketing
      • Business develops products based on what it is good at making
      • Mainly for products that are high tech, high quality, and high differentiation
    • Market Oriented Marketing
      • Business develops products based on the market
      • Geared to mass consumer markets using expensive market research, but is more flexible and less risky
      • Flexible: Adapts more easily as this approach is sensitive to market trends, such as habits, needs, lifestyle, and taste
      • Less Risky: More assurance of success since the product meets customer requirements
  • Social vs. commercial marketing
    • Social marketing
      • Seeks to influence behavior to benefit society as a whole by selling a desired behavior, thus satisfying societal needs
      • Using social marketing (i.e. commercials, etc.) to bring about social change
        • Celebrity endorser
        • Media coverage
        • Giving out cards
        • Workshops/modules
        • Movies
        • Signature campaign – Pledge board
        • Slogans
        • Dropboxes
        • Email/hotline/customer service
    • Commercial marketing
      • Seeks to satisfy customers by selling a particular needed product or service, thus satisfying individual needs
      • Delivering what people already want instead of changing what people want
  • Market
    • A place or process which allows suppliers and customers to exchange physical goods, services, information, etc..
    • Exists to help facilitate trade where there is demand for a particular product, and businesses willing to satisfy such demands
    • Kinds of Markets
      • Consumer – General public
      • Industrial/Commercial – Businesses and governments
    • Markets size
      • Can be measured through the number of potential customers, the total volume of sales achieved by the numerous businesses active in the market, or the value of said sales
      • Helps businesses assess whether a particular market is worth participating in due its number of potential customers and the barriers to entry
    • Market growth
      • Rate the size of a market increases/decreases over a period of time
      • Measured by an increase in the total value or volume of sales in a market
      • Helps businesses assess whether a particular market is worth entering due to its rate of growth or contraction
  • Market share
    • The percentage of all the sales in a particular market that are held by a business, and can be measured by the volume or value of the sales
    • Importance
      • Helps measure a firm’s performance and market position against other competitors
      • Might indicate that a business is a market leader
        • Can influence its competitors to follow the leader’s model
        • Can influence the leader to continually enact strategies in order to maintain its position
        • Can indicate the degree of success or failure of a business’ current strategies
        • Can lower prices or maintain higher profit margins as compared to competitors due to better economies of scale
    • Ways to increase market share
      • Brand promotion
      • Improved customer service
      • Copyright and patent filing
      • Product development
    • Limitations
      • May be difficult to identify the most important market share value for products that cross into several markets
      • Cannot be used as an absolute measure of a firm’s success or performance
        • Firms can be intentionally lowering their market share as a result of its more stringent client selection
        • A decline in a firm’s market share can be a result of a new entrant and not necessarily as a result of lowered sales
        • Should mainly be compared against the most similar and closest of competitors, and not necessarily the market as a whole
  • Marketing objectives
    • Common targets that marketing activities will achieve
      • Market share/leadership
        • Acquiring a greater/bigger market share and volume by improving sales/revenues (e.g. expansion, globalization, franchising, aggressive advertising, further market penetration, etc.)
      • Customer service
        • Providing loyalty programs, after sales services/policies through quality staff training
      • Brand building
        • Improving the image of the company through CSR, sponsorships, publicity, packaging, etc.
      • Growth strategies
      • Innovation
        • Launching a totally original or new product into the market (attain the first-mover advantage)
      •  Positioning
        • Involves expanding or modifying product line/mix to enhance or change image.
    • Successful marketing objectives are
      • Aligned with business’ overall main vision-mission-goals (or VMGs)
      • Appropriate to organization’s size, financial capacity and production efficiency
      • Mindful of competition, external (PEST) factors and social issues
  • Ethics of marketing
    • Ethics are the moral principles that guide business behavior
    • Ethical marketing issues are increasingly significant in a period of rapid globalization
    • What may be acceptable marketing practice in one place may not be in another
      • Is it ethical?
        • Pricing
          • Sell a computer printer cheaply and then tie in customers to buy expensive refill cartridges?
          • Offer low airfares on the internet and then add taxes on after a purchase has been made?
        • Promotion
          • Advertise toys on TV to young children who may not be able to distinguish between program and advertising?
          • Use sexual images to sell products in countries with deeply held religious views?
        • Place
          • Sell products that are sexually suggestive or offensive to the culture of the country/place these are sold in?
        • Product
          • Buy cheap and potentially dangerous supplies in order to cut prices?
          • Design clothes for young children that are sexually provocative?
    • Ethical Issues:
      • Bait and Switch
      • Misrepresentation
      • Over-promise or Fraud
      • Unsubstantiated Claims
      • Fear Tactics
      • Pester Power
      • Socio-Cultural

 

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