Analyzing Marketing free essay sample

Different definition of marketing and critically analyze them Marketing comes in a wide variety of flavors based on audience, media platform and business in today’s evolving and dynamic marketplace. Therefore, it is no surprise that marketers define what they do differently. Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives. This definition clearly places marketing as a process. Within most organizations this process is managed by the marketing function. Baker (1), Bernard and Brown (2) among others, however, have argued that in addition to being a function, marketing is clearly an organizational philosophy- an approach to doing business. This approach is exemplified by the quote of Professor Stephen Burnett, appearing in the preface to the 6th edition of the influential marketing text by Philip Kotler (3): In a truly great marketing organization you can’t tell who’s in the marketing department. Everyone in the organization you can’t tell who’s in the marketing department. Everyone in the organization has to make decisions based on the impact on the customer. In addition King 4 has criticized too narrow perspective on marketing- confining it to what a â€Å"bolt on† marketing department does- and recommends a broader interpretation of terms. Despite the current levels of interest in defining the domain of marketing, and in particular the function- philosophy debate, few studies have focused on what marketing means. The generally accepted European definition of marketing is given by the Chartered Institute of Marketing (CIM). It might be wise to commit this particular definition to memory: Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitability. Some writers use the terms ‘need’ and ‘wants’ rather than customer ‘requirement’. Kotler(1991) one of the world’s leading academics in marketing, defines a ‘need’ as a basic requirement such as food, shelter, self-esteem, etc. He defines a ‘want’ as a particular way of satisfy a ‘need’. For e. g, a person may need food, but he or she may not necessarily want beans on toast! A more technical definition is given for marketing by the American Marketing Association: Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives. Although this definition is not as concise as that provided by the CIM, it is more correct, as the CIM definition highlights the ‘profitability’ criterion. To look at marketing as a business philosophy is to take a hostilic view of the discipline. This approach is explained by Peter Drucker (1954): Many people think of marketing only as selling and advertising. And no wonder-everyday we are bombarded with television commercials, Newspaper ads, direct-mail campaigns, and sales calls. However, selling and advertising are only the tip of the marketing iceberg. Although they are important, they are only two of many marketing functions and are often not the most important ones. Today marketing must be understood not in the old-sense of marketing- â€Å"telling and selling†- but in the new sense of satisfying customer needs. If the marketer does a very good job of understanding consumer needs; develops product that provide superior value; and prices, distributes, and promotes them effectively, these products will sell very easily. Thus selling and advertising are only a part of a larger â€Å"marketing mix† – a set of marketing tools that work together to affect the market-place. References (1) Baker, M. J. , marketing an introductory text, 4th edition, Macmillan, london, 1985 (2) Bernard, K. N, â€Å"functional practice and conceptual function-the inherent dichotomy of marketing,† journal of marketing management, vol. 3 no. 1, 1987, pp 73-82. 3) brown, r. j, â€Å"marketing- a functional and a philosophy,† the quarterly review of marketing. vol. 12 nos 3 and 4, 1987, pp 25-30 (4) Kotler. P. C. , Marketing Management, 6th edition, prentice-hall international, 1988 (5) king, s. , â€Å"has marketing FAILED OR was it never really tried,† Journal of marketing management, v ol. 1 no. 1, 1985, pp 1-19 mostaque, a. z, a synthesis model of market orientation for a developing country- the case of Bangladesh, 2003 p17 (6) mcKitterick, JB. 1957, â€Å"what is marketing management concept? † in The frontiers of marketing thought and science frank m. bass, ed. American marketing association, Chicago. pp71-92 (9) Kotler, P. 1998, Marketing Management, Prentice hall, New Jersey (10) Walker et al. (1992) Walker O. C. , Boyd, H. W. and Larreche, J. C. 1992, Marketing Strategy: planning and implementation, Irwin, Homewood, Illinois b) The marketing process- Once the strategic plan has defined the company’s overall mission and objectives, marketing plays a role in carrying out these objectives namely: SWOT and PEST SWOT: SWOT analysis is a straightforward model that analyzes an organization’s strengths, weaknesses, opportunities and threats to create the foundation of marketing strategy. Strengths: Reviews the business’ current strengths such as a good brand or strong sales performance. Possible strengths in marketing might be: Specialist marketing expertise, location of business if convenient for customers and the reputation of the brand. Weaknesses: Reviews the business current weaknesses such as poor response times to requests for information or late deliveries. Possible weaknesses might include: lack of a clear product differentiation compared with competing products, inadequate online presence. Opportunities: Reviews the business’ future opportunities like new technology. These factors included the specific opportunities existing within the market that provide a benefit, including market growth, lifestyle changes, resolution of competitors to promote an increase in demand for the products or services. Threats: Threats are similar to weaknesses. A threat in marketing SWOT shows how a company is vulnerable to developments in the marketplace. The primary and ever-present threat is competition. However, other threats can include unsustainable price increases by suppliers, increased government regulation, economic downturns. Swot analysis may help in the creation of a contingency plan that will enable quickly and effectively issues that arise. PEST: A PEST analysis is used to identify the external forces affecting an organization. This is a simple analysis of an organization’s Political, Economical, Social and Technological environment. A PEST analysis incorporating legal and environmental factors is called a PESTLE analysis. Political: The first element of a PEST analysis is a study of political factors. Political factors influence organizations in many ways. Political factors can create advantaged and opportunities for organizations. Economical: The second element of a PEST analysis involves a study of economic factors. All businesses are affected by national and global economic factors. The climate of the economy dictates how consumers, suppliers and other organizational stakeholders such as suppliers and creditors behave within society. Social: The third aspect of PEST focuses its attention on forces within society such as family, friends, colleagues, neighbours and media. Social forces affect our attitudes, interests and opinions. Technological: The fourth element of PEST is technology. Technology advances have greatly changed the manner in which businesses operate. Technology has created a society which expects instant results. This technological revolution has increased the rate at which information is exchanged between stakeholders. A faster exchange of information can benefit businesses as they are able to react quickly to changes within their operating environment. Marketing Strategy An organization’s strategy that combines all of its marketing goals into one comprehensive plan. A good marketing strategy should be drawn from market research and focus on the right product mix in order to achieve the maximum profit potential and sustain the business. It is the foundation of a marketing plan. Segmentation: An organization cannot satisfy the needs and wants of all consumers. Segmentation is simply the process of dividing a particular market into sections, which display similar characteristics or behavior. The company identifies different ways to segment the market and develops profiles of the resulting market segments. There are a number of segmentation variables that allow an organisation to divide their market into homogenous groups. These variables are: Geographic Segmentation: Geographical segmentation divides markets into different geographical areas. It calls for dividing the market into different geographical units, such as nations, states, religions, countries or cities. Climatic differences can lead to different lifestyles and eating habits. In countries with warm climates, social life takes place outdoors and furniture is less important. Demographic Segmentation: Demographics originate from the word ‘demography’ which means a ‘study of population’. It consists of dividing the market into groups based on variables such as age, gender, sexual orientation, family size and so on. Demographic factors are the most popular bases for segmenting customer groups. Customer needs, wants and usage rates often vary very closely with demographic variables. As people’s age change, their needs and wants change. Gender segmentation is commonly used within clothing, hairdressing, cosmetic and magazines. Psychographic Segmentation: Although demographic segmentation is useful, marketers can use alternative segmentation variables which aim to develop more accurate profiles of their target segments. Psychographics segmentation can be broken down into social class, lifestyle and personality. Marketing Mix: The 4ps The marketing mix deals with the way in which a business uses price, product, distribution and promotion to market and sell its product. The marketing is often referred to as the â€Å"Four P’s†- since the most important elements of marketing are concerned with Price, Product, Place and Promotion. Price: Price includes the pricing strategy of the company for its products. How much a customer should pay for a product? Pricing strategy not only relates to the profit margins but also helps in finding target customers. Pricing decision should take into account profit margins and the probable pricing response of competitors. A company’s pricing decisions are affected both by internal and external factors. Product: Product is the actual offering by the company to its targeted customers which also includes value added stuff. Product may be tangible or intangible. It is also defined as anything that is offered to a marketer for attention, acquisition, use or consumption and that might satisfy a want or a need. Product planners need to be thinking about products on 3 levels; the core, the actual and the augmented product. The core product answers the question: what is the buyer really buying? The actual product may have 5 characteristics: quality level, features, styling, a brand name and packaging. The augmented product is the additional services and benefits. Place: Marketing channel decisions are among the most important decisions that management faces. A company’s channel decisions are linked with every other marketing decision. The company’s pricing depends on whether it uses mass merchandisers or high-quality speciality stores. Promotion: Marketing calls for more than just developing a good product, pricing it attractively and making it available to customers. Companies must also communicate with current and prospective customers and what they communicate should not be left to chance. A company’s total marketing communications mix- also called its promotion mix consists of a blend of advertising, personal selling, sales promotion, public relations and direct marketing tools. Forms of promotion involves- advertising, personal selling, public relations. The Marketing book, edited by Michael John Baker, Susan J. Hart 6th Ed. Elsevier/ Butterworth- Heinemann 2008 Entrepreneurship Marketing: Principles and Practice of SME Marketing; Sonny Nwankwo 2010 Principles of Marketing, Pearson Custom Business Resources Series; Philip Kotler, Gary Armstrong, 13th edition, Prentice Hall 2010, Pennsylvania State University http://www. businessdictionary. com/definition/marketing-strategy. html#ixzz2SOetHLCP C) There are different concepts that guide sellers to conduct their marketing activities. For e. g. sellers can only focus on production and try to reduce their cost of production, or focus on improving the quality of product. Similarly they can pay more attention to selling and promotion. In this way different concepts have evolved to help the organization in managing their marketing activities. These concepts are: production, product, selling, marketing and societal marketing. The production concept holds that consumers will favor products that are available and highly affordable. It also refers to the philosophy that supply creates its own demand. It means that the sale will increase automatically with the increase in production and production facilities. This concept is one of the oldest philosophies that guide sellers. The production is still a useful philosophy in two types of concepts. For e. g. if the management is trying to reduce the cost of production then it can do so by increasing the production. With increase in production, economies of scale takes place and the cost of production reduces, which helps to reduce the prices. And the second way it is useful is when demand for a product exceeds the supply. Here management should look for ways to increase production. Another major concept guiding sellers, the product concept states that consumer will favor products that offer the most in quality, performance, and innovative features. Thus, an organization should devote energy to making continuous product improvements. So basically, this concept is about to attract the customers by improving the quality and performance on one hand and on one hand and offer attractive price in other. Some manufacturers mistakenly believe that if they can â€Å"build a better mousetrap†, consumers will beat a path to their door just for their product. The product concept can also lead to â€Å"marketing myopia† the failure to see the challenges being presented by other products. Many organizations follow the selling concept, which holds that consumers will not buy enough of the organization’s products unless it undertakes a large-scale selling and promotion effort. This concept is typically practiced with unsought goods (those that buyers do not normally think of buying) for e. g. burial plots. There is high risk in such marketing because the organizations try to sell the product whether the buyers like it or not. Most studies show that dissatisfied customers do not buy again and this can really spoil the reputation of the organization. There are not only high risks with this approach but low satisfaction by customers. According to marketing concept, organizations should focus to analyze the needs and wants of target market, and provide the desired satisfaction more effectively than competitors do. The marketing concept has been stated in colorful way, such as â€Å"We make it happen for you† (Marnott); â€Å"To fly, to serve† (British Airways). JCPenney’s motto also summarizes the marketing concept: â€Å"To do all in our power to pack the customer’s dollar full of value, quality and satisfaction. † The marketing and selling concepts are often confused. The selling concept takes an â€Å"inside-out† perspective. It starts with the factory, focuses on the company’s existing products, and calls for heavy selling and promotion to obtain profitable sales. It focuses heavily on customer conquest- getting short-term sales with little concern about who buys or why. In contrast, the marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses on customer needs, and coordinates all the marketing activities affecting customer relationship based on customer value and satisfaction. Under this concept, companies produce what consumers want, thereby satisfying consumers and making profits. Many successful and well-known companies have adopted the marketing concept. Proctor amp; Gamble, Disney, Wal-Mart, Marriot, Nordstrom and MacDonald’s follow it faithfully. L. L Bean, the highly successful catalog retailer of clothing and outdoor sporting equipment, was founded on the marketing concept. In 1912, in his first circulars L. L Bean included the following notice: â€Å"I do not consider a sale complete until goods are worn out and the customer still is satisfied. We will thank anyone to return goods that are not perfectly satisfactory†¦ Above all thing, we wish to avoid a dissatisfied customer. † Today L. L. Bean dedicates itself to giving â€Å"perfect satisfaction in every way. † The last concept is the societal marketing concept. It focuses to improve the well-being of customers and society as a whole. It also holds that organizations should determine the needs, wants and interest of target markets. It should then deliver superior value to customers in a way that maintains or improves the customer’s and the society’s well-being. The societal marketing concept is the newest of the five marketing management philosophies. It questions whether the pure marketing concept is adequate in an age of environmental problems, resource shortages, rapid population growth, worldwide economic problems, and neglected social services. According to societal marketing concept, the pure marketing concept overlooks possible conflicts between short-run consumer wants and long-rum consumer welfare. The societal concept calls upon marketers to balance three considerations in setting their marketing policies: company profits, customer wants and society’s interest. Originally, most companies based their marketing decisions largely on short-run company profit. Eventually, they began to recognize the long-run importance of satisfying customer wants, and the marketing concept emerged. Now many companies are beginning to think of society’s interests when making their marketing decisions. marketing in a changing world: creating customer value amp;