Unit 2 Element of Marketing Principles Assignment
Diploma in Business
Unit Number and Title
Unit 2 Element of Marketing Principles
An organization, perforce, needs to determine the competency of the product or service along with its suitability for the consumers in its target market. This brings in light, the concept of marketing mix, an imminent tool for any organization to implement various actions, strategies and marketing tactics for promoting its own brand, product or service. This introduces other concepts such as product life cycle, new product development, pricing strategies, distribution options, promotion mix and other extended elements of marketing mix.
- Element of Marketing: Marketing, the term can be explained as the act of promoting or selling the product or service after performing the market research and analysis to have an idea about the future growth of that product or service. The keystones in the concept of a successful marketing plan are product, price, place and promotion which are also referred as the four Ps of marketing. (smallbusiness.chron.com, 2016)
- Product: The concept of product deals with the wise identification of the right product for the target market. The product must be according to the desire of the intended customers. The intended customer or the target market is a group of people having a common trait for example people of same age group, people who are indulged in same profession etc. For instance if group of children below 10 years of age is taken as the target market (customer) then the product can be a video game.
- Price: The price plays a very significant role in the marketing strategy. The price of the product must be in the payable range of the intended customer. It must have a balanced value that is not too high or low. If the price is very low then the profit will be insubstantial. On the other hand if the price is higher than other suppliers for that product then this situation will lead to decreased sales resulting in the company loss.
- Plsce: Selling of the product in correct place is another keystone in the marketing strategy. If the choice of place is not appropriate then even a 100% quality product with affordable price will create no value. Thus a market research must be done and the place where the people are looking for the similar type of the product should be chosen. The learned decision will make an unimaginable change in the sales of the product.
- Permotion: The promotion plays the supreme role once the price of the product and the place to sell it is decided. Adopting suitable promotion technique varies the product sales to a great extent so it a very important step in the success of the product in the market. The means of promoting the product can be decided on the basis of the budget available for the promotion. The promotion can be through radio and television ads, newspapers and other printing publications, promotional events, internet advertising etc.
Benefits and costs of a marketing orientation for electric cars:
Electric car is an automobile that is motivated by the use of electric motors, where the electrical energy is stored in the rechargeable batteries or any other device. The invention of electric car has made life much convincing as it has a number of advantages over the conventional fuel based cars. Though an electric car has many merits but they are still uncommon among the people. A proper marketing strategy is required for increasing the sales of electric car. The product (car) needs to be promoted on a very large scale platform like social networking sites such as Facebook, Twitter etc. (Dennis, Halborg, Ross, 2001)
Benefits of promoting the elctric car through social media:
- Promotion through social media builds credibility as with the increase in number of followers and the amount of customer engagement, more potential buyers are influenced.
- Electric car’s image and popularity will be enhanced when more and more people will connect with the advertisement of the product through their friends on the social media. It will increase the recognition in the market.
- Online information is more accessible to people rather than any physical piece of information.
- Making use of social media is very cost efficient because the only requirement is internet access.
- Social media provides a long term audience which results in assured success of the product in the market.
Cost of promoting an electric car through social media:
Cost of promoting the product (car) varies on the basis of which networking site is used. For instance if Facebook or Twitter is used then the only requirement is internet that will be of negligible cost. But in case of Google advertisements the cost will be very high.
The budget for promotion must be decided very carefully because if the profit made by the electric car in the market and the promotion budget is almost near then this will be of no utility. Thus the amount that is to be spent on promoting the car must be less than an estimated profit that will be made by the car in the market. (ukessays.com, 2016)
Macro environmental factors which influence marketing decisions
Macro environmental factors:The smart phone industry has successfully expanded its market worldwide. According to the PEST model that is P-Political, E-Economic, S-Social and T-Technological the working analysis of smart phone industry is explained below:
Smart phone industry has full political assistance as this industry has no interference in the politics.
Full economic assistance is provided to this industry as the progress of this industry contributes to the overall economic development of the nation.
Social support is very significant here because the product is highly beneficial for the human race.
Smart phone industry plays the foremost role in the technological advancement that is why it has 100% assistance here also.
Micro environmental factors: The micro environmental factors are analyzed on the basis of the Porter’s Five Forces analysis model. It is a framework comprising of five forces that analyzes the business strategy for the development and the level of competition within an industry.
Threat of new entrants- This is very low as the smart phone industry requires higher investment which is not an easy job for the new comers.
Bargaining power of buyers- This is relatively high because the buyers can switch to another brand or model if they are not contented with bargained value.
Bargaining power of suppliers-Unlike the buyers, this is low because the customer always has a larger number of suppliers and if the bargaining power of the supplier tends to become higher, the customer is more likely to move to the other supplier with low bargaining power.
Threat of substitute products or services-The rate is low here because providing a substitute product or service is not a child’s play for any supplier.
Rivalry among the existing competitors-The rivalry rate is relatively low because of the limited number of suppliers and each supplier provides its own specifications. (Grundy, 2006)
Segmentation criteria for products: Segmentation is another strategy of marketing a product where the broader market is divided into subsets of the consumers that share a common feature or trait. The subset that is expected to yield the highest profit becomes the target market. The market segment (target market) should be-
- Measurable- Segments are measured in terms of the number of customers within the segment. The size of the segment should be accurately identified so that the strategists can decide how and to what extent they should emphasize on marketing.
- Substantial-The market segment must be viable that is it should be of limited size so as the budget of marketing does not create a hitch.
- Accessible-The segment (target market) must be accessible by the company for the purpose of marketing.
- Differentiable- A ideal segment must be homogeneous that is the people within the group must have common characteristics so that marketing would be convenient.
- Actionable-The segment must provide quantifiable outcome in relation to the existing efforts taken for marketing of the product. (Wedel & Kamakura, 2012)
Targeting strategy for a new smart phone ‘pink’:
A new smart phone ‘PINK’ is launched in the market by a leading smart phone company. The segmentation is the first step in the targeting strategy of any product in the market where the customers are divided in a group on the basis of any common trait or feature. These groups are also referred as the segments. The segment for PINK is the group comprising of females. Thus the specifications of the model will be as per the requirements of the segment. For instance PINK may have features like:
- Availability of beauty specific applications.
- Stylish and sleek model.
- Good quality camera.
- Security specific features for a woman’s safety etc. (businessdictionary.com, 2016)
The next step is the promotion of the product in the market. The means of promotion must be efficient in terms of reaching out to the majority of the women in the society. For example the model can be promoted in any women empowerment event, televisions and social networking technologies sites etc where women are available in huge number. Thus the selection of the target market and promotion of that product plays a vital role in the targeting strategy of any product.
Marketing activities are affected by buyer behavior:
The buyer is very specific about what type of the product is to be purchased but the mindset of the buyer can be altered by adopting excellent marketing strategies. The marketing of any product must be strategized in order to attract buyer’s attention towards the product. According to the regular behavior of the buyer, the attractive presentation of the product results into more curiosity from buyer’s side. For example if any customer goes to a super market where the products are delightfully presented the purchase is more as compared to the purchase made in any general store. (Walker, Mullins, Boyd, & Larreche, 2005). Along with the presentation, if the product is available at lower price than the expected one, the buyer gets fascinated. Thus providing heavy discounts for a specific duration of time is also a good marketing strategy. Hence the marketing strategies are greatly affected as per the buyer’s behavior.
New positioning for a product:
A smart phone is launched in the market where the target market is the group of senior citizens. The smart phone will have specifications according to the necessities of the target market or the segment. The features can be: buttons are of bigger size than usual ones, an easy to read screen with bigger font size, having special features regarding directions, good quality speakers etc. The design of the smart phone must be according to the target market otherwise it would be of lesser use. The product is expected to experience a booming sale in the market as per the market research and analysis because it is the first product in the market having such characteristics. The next and the most crucial stage is the promotion of the product. An efficient promotional strategy plays the most influential role in deciding the level of accomplishment of the company. (Kotler, Kelvin, 2012)
- Sustainable competitive advantage: An organization must be competent to sustain any kind of competition that comes its way. It should be able to transform any disadvantage to its favor in such a highly competitive market. For ex- Walmart has great marketing strategies that diminish its competition. Some of the various means that can be adopted to sustain such competitive advantage are described below:
- Distinguishable from other competitions: It is evident from the present state of the market that a company with distinguished features and benefits provided for its products and services is more likely to earn profits and charge premium prices above the conventional margins. Therefore, promotion on the basis of unique features of the product must be conducted to sustain in the competition. Apple, BMW, Nike are the some companies successful because of their differentiated properties.
- Easy to access: Any product or service can only be beneficial if they are easily accessible to the majority of the customers. This will definitely attract a major group of customers.
- Meeting customers’ demands:It must be very well anticipated before the development of the product about what, how and when the customers want the services and products. The product must then be developed accordingly to meet those demands. For ex- Dell surpassed Compaq, IBM entered consultancy services based on the strategy of customer intimacy. (Davis, 2013)
- Distribution according to customers’ convenience: Distribution of the product concerns about delivery of the product to the ultimate user. It can be directly distributed to the consumer or can involve intermediaries such as retailers, wholesalers, etc. Some of the ways of how products can be distributed as per the convenience of the customers are:
- Location: If the product is out for sale in a store, then it must be located at a place that catches the eye of the consumer. Remote locations must be avoided. For ex- Walmart, Subway, McDonalds, etc. are known for their locations.
- Selecting appropriate distribution network: On the basis of nature of product, an appropriate distribution network can be selected. It can be of three types:
- Intensive Network: Low-priced products should be made available at as many stores as possible so that it is not substituted by some other product that is more conveniently available. For ex- packed products are available at all general stores.
- Selective Network: Products such as washing machines, laptops, vehicles, etc. are preferred to be purchased by the customer from some selected dealers.
- Exclusive Network: Products with very high range such as MercedezBenz, Tanishq Jewelers, etc. should be made available at exclusive stores to attract the attention of the customers.
- Home Delivery: Websites like Amazon, Flipkart, Myntra, Jabong, Pepperfry, etc. provide products of all kinds in every type of range with an exclusive facility of cash on delivery, payment gateway, exciting offers, etc. So, home delivery is also one of the ways of distributing products. (Sujai, 2010)
- Prices set to reflect organization's objectives: A few types of pricing strategies can be implemented in order to achieve objectives of the organization which are as follows:
- Varied pricing: Companies can provide different pricing of the product in developed countries for greater market share and in developing countries to gain customer support. For ex- Samsung, Philips etc
- Reduced pricing: This strategy aims at producing a product and using it at the time of launching a new product to make returns before it becomes infeasible, For ex- Sony, Versace, Jaguar cars, etc.
- Diminished Pricing: Prices of the products must be kept low to expand the market in any particular field. Examples of this include companies such as Primark, etc (Hunt, 2016).
- Promotional activities to achieve market's objectives: Promotional activities are undertaken by any organization to develop recognition among the consumers about their products and services. Some of these activities are listed below:
- Promotion through advertisements:All kinds of advertisements such as TV advertisements, Google ads, newspapers, magazines and participation in sponsorship events can help in promotion to a much larger extent.
- Recommendation and public relations: Recommending the products of a company by developing its reputation in extending customer care services can help in building strong public relations.
- Promotion through attractive offers:Providing coupons, discounts and other kinds of offers can also be helpful in promoting products. For ex- Flipkart, Myntra, Amazon promote mostly in this way. (Mack, 2013)
- Analysis of elements in extending marketing mix: Three extended services of marketing mix have been added which are recommended to be considered while reviewing competitive strategies:
- People:Different individuals must be appointed for different purposes such as recruitment, marketing activities, customer contact, training, etc.
- Process: Process services of marketing mix involve research and development, IT-supported design features, customer focus, etc.
- Physical evidence:This involves taking feedback from customers such as their online experience, experience of the staff about a particular brand or product, packaging of the product, etc. (Yoo, 2000)
Thus, it can be concluded that marketing mix is an extremely powerful marketing strategy tool that can enhance the production of any company to a great extent if its elements are implemented appropriately.
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