1: Understanding the Concepts and process of Marketing
2: Concepts of Segmentation and target positioning
3: Elements of extended marketing mix
4: Marketing Mix
The report would evaluate the principles of marketing in relation to the various phenomenon of market as elements of marketing. The way business creates differentiation, adds more market share and thus revenue is a strategic marketing tool for business to flourish. Thus it can be said that marketing is the process of identifying, anticipating and delivering the consumers with satisfaction profitably. Thus segmentation, target audience, competitiveness of a business is critically analyzed here to formulate the future needs of business in accordance.
The elements of marketing are many of which increasing profits and market share while reducing the cost is the target of the process giving the marketing the needed spin to deliver. Chang (2009) suggests that at the center of the marketing is the product and based on the product attributes, value, demand, use etc the price and market for sales is chosen. The process is thus the orderly steps formulated for each market keeping in view the market needs. Thus the processes in market is a full cycle of demand interpretation, delivery to the consumers at the right price and time which is perceived in value and price as a superior product to its alternatives for a consumer, is the process objective in marketing. Nevertheless, the process needs to be such that it build the value for the target market.
The cost or investments that is invested and on the investments made the benefits that the businesses gains are the cost benefit for it. Kahn (2005) argues that the cost benefits for a business have two purpose, one to determine the investments feasibility and the second is to give a basis or benchmark to analyze the projects. Thus for a business prior to a project development the analysis forms the key for all revenue and costs that can be generated out of the project, showing its feasibility to let the management take a decision to peruse it. Further, Rouwendal (2012) adds that the cost benefit analysis is the tool for management to decide upon the feasibility of a project and whether the project needs changes. Therefore, (Roy and Berger, 2005) argues that the analysis for the social benefit that the project is incurring is the social benefits like ease of transport or savings due to the investment is also considered in the analysis. The marketing exposure received out of the changed marketing impetus and thrust which concerns the segment, target, position and value proposition. The Diesel Logo Source is the chosen organization which has invested nearly 1.3 Billion Euro in 2009 with 2200 employees with 5500 outlets as on 2012 (O’Connor, 2013). The customer focus for the business has made them to understand the consumer’s demands and thus develop products likewise. The sales and distribution is been built upon this unique criteria of preference of consumers but the consumer’s taste is something that keeps changing in the fast fashion. The processes are thus modified to match the strategic approach of the business. Nevertheless, this change also showed itself on the IT media as the prime source of advertisements. These changes have suitably changed the sales of the brand and its communication efforts. Thus the orientation is more based on the consumer’s choice over the previous objectives of money earning. Hence the process flow is now more consumers oriented and with changing fashion it is changing fast to accommodate the ‘fresh fashion’ trends to be available in the market.
Micro and macro environment are the market decision making actors that have influence on business performance. The micro environment is the internal factors close to business those have direct impact on strategy. The employees, stakeholders, inter business communication and involvement in business decision making is the key to the micro environment of the business. The stakeholders would include employees, suppliers, investors and the people near the business or the society as a whole. The micro environmental factors, especially in the stakeholders case, the vision of the stakeholders are taken into consideration to evolve the processes that includes their point of view and see that the voice of all associated gets a place in policy and strategic formulations. The consumers are key as the marketing that the business performs would be directed towards the development and growth of consumers. Their need of fresh fashion is one while the investor’s would need sustained business with long term profits and from the employees view a healthy work place environment is the key to effective organizational processes formulation.
The macro analysis is the analysis of the overall business environment that is operation in the midst of economic, political, social, cultural, legal, environmental etc issues also can be observed in the PESTLE analysis. These factors have direct impact upon the consumer demands and market dynamics. The macro analysis provides the strategic route for future developments (Szyliowicz et al. 2004).
Political: The political environment in which the business is performing may have effects like instability, paramount fear of businesses being taken over by the state (Eg. China). The formulations of strategies are derived to plan the market entry, existence and exit plan depending upon the political situation of the business. The investments are to be done in a market that is politically stable and economically sustainable.
Economic: The economic factors implies the exchange rates, the payments for employment in those economies all contributes to the external environment development for pricing, costing and even the entry and exit for a business to stay relevant in various economies. The cost of production and sales are dependent on the economy thus the business needs to suitably arrange its Supply chain, positioning, and product offerings in accordance to the economy that the business is operating in.
Social: The taste of people or the way they perceives the business is the social perspective. The trait social factors have on business is paramount considering the changing perception towards the environment friendly processes and ethics in practice. Further social media have made the social aspect of business an important factor for business strategy. The socially acceptable message selection, positioning, advertising etc studies a lot of the social clots before implementation to make them acceptable by the society.
Technological: The technology is the most important factor for difference creation between two similar businesses where the cost affectivity of production process decides the price that consumers needs to pay as well as gives an assured quality. This bulk assurance of quality and quantity is what had been achieved with a good mix of people and technology. Further the social media’s effect on employee’s voice and idea circulation is huge. These also have given the technology based personalized services giving a macro over haul of the business operations. Diesel have used its technology factor to build and create a largest market while also enables a more faster production, finish and thus with the use of efficient technology the price of options can be further reduced and further improved with the efficient use of technologies.
Environmental: The environmental effects of the business process are key to a good identity building where the participative business processes gives an impression on the users about what all benefits or harm the business is doing to the environment it is working on.
Legal: The laws those manage and control the business is the legal aspect of the PESTLE. The legal framework varies from one nation to another. Based on the laws of operations those are existent the legal factor effects the tax, regulation binds the mandatory to work for a business in a market. Thus with change of these factors the business needs to reframe its strategic operational and business objectives likewise in the market that it is operation, for its survival.
Segmentation of the market is based upon various demographic factors in the market as economy, taste, culture, age, gender, location etc. Based upon consumer demography the market segmentation is decided by a business for itself (Harris and Bray, 2007). The business thus creates their market communication as well as product in accordance to the market specification. (Bernhardt and Mackenzie, 1968) argues that for a proper segmentation the business needs to incorporate measurable, substantial, accessible, differentiable and actionable principles of market segmentation. Measuring in terms of sales volume and size of the market gives the business an idea of where to focus and how much to focus on a specific market based on these measurable quantities. The substantial segmentation have to be a homogeneous group of people with equal buying power and taste to be a valid market for the business else the size won’t be able to explain the expenditure. The group of people in the market needs to be differentiated in accordance to buying behavior, spending capacity etc so that viable differentiation strategy can be formed to campaign in that market can be implemented without an overlap. The access to the market and people in terms of viability needs to be there (Azadi and Rahimzadeh, 2012). Nevertheless, the practical value of the market or its characteristics needs to be acted upon with product information that suites their needs.
The target strategy would suggest the way the business wish to build its competence among the target audience. This has two different ways of targeting an audience as differentiated and undifferentiated (Burgess and Zerbe, 2011). The product dose a mass marketing with no differentiation where the entire market is the target audience. Ginter et al. (1992) suggests that broadcasting as well as persuasion are the two significant sales strategy used in this marketing strategy. The target market is differentiated upon their purchasing power, taste, need, etc. This target audience is thus communicated via those media which is common for the group. The group is the target and the business may offer the price or packaging or offer based upon this target market (Hahn, 2010). Further the business may also differentiate via price which again is niche marketing strategy where the business is differentiated on price to its substitutes in the same market.
Marketing aims to create consumer satisfaction by fulfilling their needs and wants to maintain the loyalty of the consumer towards the product. However, Sanchez (1999) argues that the behavior of a consumer during the purchase decision making process is dependent on six stages that build’s the decision. The need for the product or problem recognition is the first part followed by information search which can be going back to memory seeking advice about the products or from commercials. Evaluation of alternatives is the next step where the consumer relates alternatives in the market with the product to assume the viability or benchmark each of them in accordance to their own taste and preference. Therefore, the consumer purchases where the actual business to consumer transaction happens while the post purchase experience gives the idea of the product value while using the product. This suggests that the information and post purchase experience are the two key elements of consumer’s purchase decision making. However, the push sales may be such that the consumer would try a product without its need or information but based on persuasion (Noori, 2015).
The example of Nokia is taken which previously had a bulk of 46% of the global market share. But the advent of android apps in Smartphone made the accelerated market positioning reducing the Nokia’s market share. However, Nokia came with alternate viability strategies by associating itself with Microsoft to develop the new MSOffice platform for future smart phones. These additions of the technology have made Nokia a viable competitor in the mobile phone market which it had previously lost. This new positioning is in the smart phone segment have made the consumer’s look for Nokia phones again which was previously wiped out of the competitive smart phone market.
The market sustainability is developed by creating the marketing mix which suites the business over its competitors and helps the cause of long term viability in the same. Thus the competitive as well as cost advantage is the two distinct features as proposed by Michel Porter. This enables not only to create superior value but also sustained market viability for itself (Sheth and Sharma, 2001). In the marketing mix the price, product, packaging and place are considered where the each individual element creates the desired consumer convenience. The pricing has to e such that the perceived value is higher than the alternatives while the packaging has to assist the product handling and needed product information for the consumers. The promotion enables to enhance the product knowledge among the people with needed or desired information to create the purchase decision. The distribution needs to play a vital role as the product which is not available in the market looses the chance to be picked up. For an example if Pepsi beverage is not available for the people to consume the promotion cost is not well utilized as the chance of sales is significantly challenged by the unavailability, creating loss of sales.
Distribution represents the market penetration that the business could achieve for its product. This applies to all products which are available in the market with an accurate distribution strategy. The promotion, packaging and price elements won’t be of any effect if the required goods are not available for a consumer at a certain market (Sonderegges, 2011). Again, the distribution needs to be even and easily accessible for people enhancing sales while the product evenly balances the demands with supply. However, over supply may reduce price or let the product occupy shelf space for long creating negative impacts.
Pricing generally considers the product manufacturing and distribution cost while pricing. However, the long term sales objective has to consider the market conditions while pricing or develop a value based pricing. The long term viability for the business is in pricing the product in accordance to the market conditions and competitive structures so that the price enhance the value for itself in consumer’s perception. The worth and the price are thus equated for long term viability in the market which is reflected in the pricing strategy.
Promotion is a key element in marketing as discussed above. The purchase decision making process needs the product information to achieve marketing objectives. The promotion aims to convey product mix like price, availability along with product information about how it can meet the consumer’s needs. Raychaudhuri (2014) explains that the promotion is the communication between the producer and consumer of the product. The promotion thus integrates advertisements, promotional campaigns like discount, offers to promote the product among the target market to enhance consumer demands, reach out more among people.
The two different segments of consumers can be bunched as rural and urban consumer segment based upon their location and accessibility, for the case. Considering the rural population is the one with lesser media options and sparkly populated compared to the heavy density distribution aspect of business sees changes too.
Product: The rural market is considered to have lesser technical knowledge compared to the urban counterparts. Thus the technically superior products like Smartphone technology or five start hotel is concentrated in the urban segment and is designed for the urban crowd. Nevertheless, the switching of people from one product to another as the scope is their so the product is designed to gain consumer loyalty in urban areas.
Price: The pricing determines the segment that the product ventures to appeal. The higher cost of product is considered to be less competitive in rural segment due to the power of spending the two segments possesses. Thus the pricing for the urban products would consider the pricing such that it is competitive in the urban areas. However, for consumer products the pricing is kept equal for all the market as its do not concentrate on segmentation but on mass sales.
Product distribution: From the distribution side the distribution is supported by the logistics and warehouses concentrated all across the market. The more the concentration the better the logistics supply. The rural areas would mean a robust business set up to distribute the product while the urban in the modern day are reaching for e-retails. Through this distribution the business to consumer sales is generated in the urban areas which have lesser significance in the rural lands.
Promotion: The use of internet media for promotion has changes the way urban and rural segments sees the product promotion. The social media had added the advantage of the product information in the media at a cost effective manner which is rather a bigger ploy to generate revenue in the rural areas. The campaigns need massive cost for the rural population than in Urban space as the density makes the advertisements more frequent for urban areas to rural areas.
The business sales made to a business is called the B2B sales which stand for business to business sales while made to consumer would mean B2C or business to consumer sales. The sales made to business houses would mean that the business sales the product or service for another business process or unit which further utilize the service or product for its own use. The B2B sales of Cement to major infrastructure company are one aspect while selling cement to consumers for their own construction work is another. The volume, quality, price and distribution differs in B2B to its B2C counterpart. The relationship between the businesses matters in this case of marketing where the business goes for a long term deal with another business.
The business can vary in the international markets to its domestic counterparts due to various reasons. The political, legal, environmental, social and cultural difference along with economic disparity in the international markets makes a business develop certain traits those the domestic market may not demand (Islam, 2014). The viability of the business in the international front needs the business to adopt the local norms like religion, taste of people, local media for promotion, price that suites that market which would be varying in content and scope depending on the market they are targeted for. Logistics and distribution along with technology to suite the international venture is another aspect that needs the careful development of the business infrastructure in the foreign lands.
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