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Unit 4 Marketing Principles Assignment Copy 2
BTEC Higher National Diploma in Business
Unit Number and Title
Unit 4 Marketing Principles Assignment Copy 2
1.1 Elements of marketing process
Some of the various definitions of the marketing process has been emulated below. As per the chartered institute of marketing, it is a management subject that allows a company to have knowledge about the demands and needs of the customer groups and then to design and sell a product or a service to suit those needs and requirements. It is the entire process of planning identifying and anticipating the demands and requirements of a customer and to supply them with a product or service that fulfils the gap and making a decent profit in the process. As per the American association of marketing, it is a process of delivering and creating an object of value to the consumer so that he can fulfil his needs and aspirations and this transforms the whole process of exchange between the company and the customer by offering goods and services (Bearden, 2006). According to Kotler the process by which something of value is sold by the firm to the customer and all the activities that are concerned with some form of value creation is called marketing.
The process of marketing are the series of steps taken by the organisation to holistically identify the basic needs and requirements of a group of customers or an individual customer and then to supply a service or a product to fulfil that need. The process of marketing begins with a situational analysis of the micro and macro factors, the external and the internal environment dealing with the firms selling and production strategies , developing marketing strategy, using the marketing tactics available to implement the plan in the form of promotion and advertising (Hutt & Speh, 2005). The first step in the marketing process is the situational analysis consisting of a thorough study of the present , past and future aspects of the marketing environment with the aid of analysis tools like PESTEL, porters five forces and Swot analysis. The first thing to do before formulating the business strategy is to conduct a market research study and make a decision on the target market and then matching the needs and demands of the market with the pertinent products. The main decision at this juncture is to segment the market and apply a positioning strategy in which the sections of the consumer market which would be the buyers of the products or services would be identified and the product would be placed before them in a suitable manner to cross check if it meets the aims and objectives of consuming that product or service (Kotler , 2008). Next in line is to design the marketing tactic identifying those aspects of the marketing mix like price, product, promotion and place which can be controlled by the marketer in distributing them in the market.
1.2 Cost benefit and marketing orientation for a company
In marketing jargon marketing orientation is the gamut of paradigms and concepts that serve as a guide to the organisations in their business activities and daily operational aspects of the business. The marketing orientation of a company like General Motors can be divided into broad based ideas like the selling concept, production methodology, the product ideology and societal aspects of the marketing concepts. As per the concept of production only those products would be preferred by the customer that are available easily and affordable to be bought. Thus for General Motors the company has to adopt a streamlined production system in such a way that the cost benefit accrued could be passed onto the end customers in the form of cost benefit resulting out of large scale operations and economies of scale. By carefully planning the production process costs could be reduced and this can translate into lower prices of cars with the result more and more customers would be able to purchase them (Petkus, 2004). The customers are looking for cars that are affordable and easily available in retail outlets throughout the country. Thus the company should consider paying attention to the process of production that helps to cut down on wastage and helps to keep the cost to reasonable limits. The main aims and objectives of the company is to implement better production efficiency so as to control the costs in a direct manner. As per the product concept of marketing consumers are looking forward to products that are of good quality with new and novel features and are easy on the pockets simultaneously (Dalgic,2006). Thus companies like General Motors must work hard in a planned and methodical manner to make improvements in the product line and to build cars that are suited to the changing needs of the driving conditions of the customers. According to the selling concept the company should actively pursue the customers to make purchase of their products since if they are left alone they would not buy too many product or service and the huge capital investment undertaken by the company in manufacturing the product or service would not be fully justified. Thus it is imperative to offer the customers with some form of incentives to purchase the products by giving discounts during the festive season or some other such promotional additions to the product like gifts etc. The companies should persuade and convince the customers to make more and more purchases of its products and services by means of extensive advertising and promotional campaigns.
Significant costs in terms of time and money are associated with a strong marketing orientation program since to study the buying patterns and purchase behaviours of customers with reference to the product being sold is time consuming as widespread market research and intelligence reports from various groups of customers are required. Quite often companies like General motors have to make adjustments to their operational aspects of the business to serve a clientele whose needs and demands are constantly evolving and changing. Huge investments are required to build the technical infrastructure to develop modern products that will catch the fancy of the consumer and to beat the competitors by offering new and novel product features (Kotler , 2008). The company should take into account the product or service offerings of their close competitors while designing their own product and services so as to prevent any overlap and to offer what is best as considered by the consumer. All these planning and activities require a lot of money to be spent by the company and if they do not sell in large volumes with large margins it would not be possible to recover the investment.
2.1 Marketing decisions influenced by micro and macro factors
As regards the micro factors the companies have to analyse their own weaknesses and strengths in their own area of activities and also see how they stand in relation to their competitors. The dominant factor in its strengths could be in the area of its technological expertise in the designing of its products or service or may in the area of its advanced marketing strategy. There could also be some opportunities in the market like a unsaturated market which is growing rapidly by leaps and bounds and offers the patronage of a large consumer group for its services and products (Hutt & Speh, 2005). The threats could be in the form of political instability or change in the rules and legislations of the government of the host country in which it is operating. The political and the legal factors can be the macro factors that affect the operational aspects of the business. As for example in India there was a 10 year long coalition government that was opposed to reforms in FDI in the key sectors of retail, energy and railways that was making it difficult for foreign countries to enter this lucrative Indian market. This created a lot of uncertainty for the foreign business companies to make investment in India. Also in UK after the occurrence of Brexit business prospects of many companies have fallen into uncertainties as trade and commercial rules have to be re-written to suit the changing needs and demands of the economy. Also in the same manner the state of economy of the host country plays a critical role in affecting the business decisions of the company (Petkus, 2004). For example when the market is rapidly growing or booming then there is a lot of possibility for business expansion and diversification of the market by entering new territories which would not be possible if the country is witnessing a slowdown or slump in the economy (Kotler , 2008). Social factors also influence the marketing decisions of the company. As for example if a country consists of large sections of young population then the product offerings would be different from that of a country with ageing demographic factors at play. Thus all the micro and macro factors affect the marketing strategies of a company and the interesting point about them is that these factors are very volatile and subjected to frequent changes.
2.2 Segmentation criteria
It is essential for a company like General Motors to develop a marketing strategythat would segment the market as per the choices and preferences and buying pattern of the public. As for example the fast sports cars should be segmented to cater to the rich and young population who generally buy such kinds of products. The cars designed to cater to the younger generation of population should have good pickup and trendy look as different from cars meant for older family persons with whom having large space is an issue along with all the necessary health & safety features for the prevention of accidents. Thus cars should be designed and built as per the specifications, needs and preferences of that segment of consumers who would comprise the largest group of buyers and consumers of such type of cars (Dalgic,2006). The cars built by General motors for the young should have all the facilities and amenities that accompany the young generation of the population like trendy exteriors and high speed. The segmenting criteria for cars meant for older people with families would be large interiors with a lot of leg space and safe speeds that are usually the unique selling points among that segment of consumers. Thus in short the segmentation criteria should be kept in mind by the company before it invests millions of dollars to design the apt car for the apt group of customers.
2.3 Targeting strategy
After considering the segments in the market the General Motors company must decide on a targeting strategy to match the products with the needs and demands of that target audience within that category of market segment and the category of customers and buyers (Petkus, 2004). The various types of targeting strategies at the disposal of the general motors company are focused marketing strategies and differentiated and undifferentiated marketing strategies. In differentiated marketing concept there is one marketing mix that is common to different market segments as per the needs and requirements of that segment of the market. This type of marketing strategy is suited for general motors for emerging markets of India and China where the competition in the automobile industry is intense due to the presence of many sellers and there is a huge risk of having a large marketing budget of an undifferentiated marketing strategy which uses a separate marketing mix for various segments of buyers in the consumer market in terms of the choices and preferences of the target group (Hutt & Speh, 2005). The main groups and categories of consumers in the emerging markets, the middle class and rich have marked differences in spending capacities and disposable money for buying cars. Thus cars which are meant to be sold to the lower classes could be more generalised in its features with fewer demarcations in the design types while the cars meant for the rich should have customised features to suit their own tastes and preferences.
2.4 Buying behaviour
The buying and consumption patterns of different groups of customers have a bearing on the marketing plans to be developed by the company. The rich people of UK like swanky cars with a lot of enhanced features like automatic transmission, heaters and air conditioners, in addition to good safety measures (Kotler , 2008). The common people on the other hand want a decent vehicle with reasonable features that they can use to go from one place to another like going to their place of work. Thus their needs and demands are distinct from the upper classes and so the company has to take these factors into consideration before matching the advertising campaigns of various products with the unique features of the product themselves. In addition to this the pricing strategy followed by the companies has a direct effect on the purchasing patterns of the general public. Hence marketing activities should be done in such a manner so as to fill the gaps in the needs and requirements of the public by offering an appropriate product or service.
Positioning strategies are used to develop a distinct image of a product in the mental perception of the target audience or groups of customers. For example when we discuss micro blogging the name and image that quickly comes to our mind is that of twitter. In a same manner when we think of fast cars the image of a Chevrolet corvette comes first to the minds of the consumers (Petkus, 2004). Hence to create such images and perceptions in the minds of the consumers the companies have to pay special attention to specific design features and attributes that lingers on the memory of the customers when they first see it or think of it. A good positioning strategy includes identification of unique selling points of the product like the classic looks of a Chevrolet corvette or sturdy exteriors of a Chevrolet Impala.
3.1 Product development for competitive advantage
In the banking industry which is marked by intense competition products like savings deposits, loans and fixed deposits have to be designed taking into consideration the demands and needs of the target audience of consumer (Corrigan, 2011). Since a large number of banks compete with each other it is marketing essential that products are designed attractively to overcome the competitors and enable the bank to capture a greater share of the market. The loan products like housing and car loans are designed with the payback ability of each customer in mind. The banks should design customised products to suit the needs of individual groups of customers in the retail as well as the corporate banking segment. During the festive season many people buy cars or take home loans to build new homes and hence the banks can come up with easy to avail loan products with less repayment hassles. In this way the banks can have competitive advantage.
3.2 Distribution for customer needs
The loan products of the banks like housing and car loans among other retail loans are made available in all the bank branches so that services could be easily availed of by the customer. The customers only need to call on a helpline number and the bank executives would go to their house to sign the pertinent documents to open a fixed deposit or a savings bank account. Also banks have tied up with many companies through which it services loans and other banking products to their employees (Dalgic, 2006). This has been done for the sake of convenience of the consumers. They can also enjoy ATM and net banking facilities so that they do not have to take the trouble to go their respective branches to carry out the transactions. Similarly for corporate loans bank executives visit various companies to enlighten their customers about the terms and conditions of the loans.
3.3 Prices to reflect organisational objectives
The price of the banking services and products are dependent on the rates fixed by the central bank of England. For example banks have to make adjustments to their fixed deposit and lending rates according to the changes in the interest rates of the central bank of England. Also the rates and prices of various services and products are reflected by those of the competitors who operate in the same industry (Hutt & Speh, 2005). The macro economic factors like inflation, growth, demand and supply forces also dictate the prices of the banking products. During periods of boom, the level of household spending increases thereby raising the liquidity level of the market.
3.4 Integration of promotional activities
Promotional activities reminds the customers of the unique selling proposition of the products and convincing them to make a purchase after giving some form of incentives like gifts and discounts (Dalgic, 2006). Without this the products would not be known to the customer and will not sell in enough volumes so as to justify the costs and earning some profits. The promotional mix consists of personal selling by the customer representatives of the banks and also cross selling of credit cards and debit cards etc through the motivation of the existing customers. These initiatives are aimed at communicating the right message about the products and services of the bank to the public so that they can checkout themselves.
3.5 Extended marketing mix
The people, process and physical evidence comprise the elements of the extended marketing mix for companies. The first point of contact of the bank with the customers is the employees and so the behaviour and attitude of the employees determine to a large extent the success or failure of the services of the bank (Kotler, 2008). The first impression of a bank is often gathered through the polite behaviour of its customer service executives. Thus it pays to have trained staff on the rolls of the bank to gain advantage over the competitors. Similarly efficient work processes like quick passbook entry service, entry service and money deposit or withdrawal services ensures smooth functioning of the bank.
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