Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. Marketers usually face the challenge of creating a balance between shareholders’ interest and customers’ interest. To counter this predicament, they perform a particular role. The most basic function of marketers is to understand the needs of customers that are the states of felt deprivation as well as the wants I. E. He fulfillment of needs based on heir culture and personality to develop marketing offerings (I. E. Physical products, services, information and experiences) for their actual and potential buyers (or market). However, in addition to identifying wants, it is important for marketers to identify demands of the customers based on their buying power and willingness to buy. Customers choose marketing offerings based on value I. E. Benefits (product, service, personnel, image) and costs (monetary, time, energy, psychic) and develop their evaluations based on their experience with the offering that ideally results in satisfaction.
Marketers understand that new customers are expensive to procure; therefore they strive to deliver value and maintain a win-win and long term relationship, which results in an exchange in which the marketer obtains loyalty and positive word of mouth in addition to cash. The marketing environment facing both new and old marketing organizations consists of the actors and forces that affect marketing management’s ability to develop and maintain successful transactions with its target customers.
Don’t waste your time!
Order your assignment!
They are the micromanagement and the micromanagement respectively. The success of marketing management depends on actors in the circumvention such as the marketing organization, marketing intermediaries, customers, competitors, publics. In the marketing organization, the senior management sets its mission, objectives, broad strategies and policies. The managers must make decisions consistent with the plans made by senior management, and marketing plans must be approved by senior management before they can be implemented.
The marketing intermediaries, which comprise physical distribution firms, marketing services agencies and financial intermediaries, help the organization to promote, sell and distribute its goods to the final buyers. The organization then must study closely these 5 types of customer markets such as consumer markets, business markets, reseller markets, government markets and international markets to attract and build relationships with customers.
As for competitors, marketers must provide relatively greater customer value and satisfaction than its competitors to gain a strategic advantage by positioning their offerings in the minds of consumers. To get a specific response from a particular public, the organization will design an offer to this public, be it financial publics, media publics, government publics, citizen-action publics, local publics, general publics and internal publics, attractive enough to produce the desired response.
However, the organization and other micromanagement actors all operate in a larger micromanagement of forces that shape opportunities and pose threats to the organization. It consists of demographic environment, economic environment, natural environment, technological environment, political environment and cultural environment. The demographic environment is of major interest to marketers because it involves people and people make up markets. Some of the major influences are the changing structure of the population (ageing population, birth rate, death rate… , the changing family (Generation X and Generation Y) and shifts in population. In the economic environment, marketers need to be cognizant of the major trends in income and of changing consumer spending patterns as markets require buying power as well as people. In the natural environment (shortage of raw materials, increased cost of energy, increased pollution and government intervention), marketers should be aware of the following 4 trends as their products can be boycotted if they do not comply with government and/or community standards.
When it comes to technology Fast pace of technological change, high R budgets and increased regulation), marketers should watch closely its following trends since every new technology replaces an older technology. In the political environment, marketers need to know the state and local laws that affect their local marketing activity. Persistence of cultural values, subcultures and shifts in secondary values hinder marketing decisions as people grow in a particular society that shapes their basic beliefs and values.
To link the consumer, customer and public to the marketer, marketing research is done which includes 4 main steps such as defining the problem and search objectives, developing the research plan, implementing the research plan and interpreting and reporting the findings. The marketing manager and the researcher must work closely to define the problem carefully and agree on the research objectives. This is the hardest step in the research process where the manager may know that something is incorrect without knowing the specific causes.
Having defined the problem, research objectives such as exploratory, descriptive and causal research must be set. The second step involves developing the research plan which outlines sources of secondary data( relevant, accurate, current and impartial) ND spells out the specific research approaches, contact methods, sampling plans and instruments(mails and questionnaires) that researchers will use to gather primary data. Research approaches encompass observational research, survey research and experimental research.
The survey research is the most widely used approach best suited to gathering descriptive information about people’s attitudes, preferences or buying behavior. Observational research can be used to obtain information that people are unwilling or unable to provide. Experimental research is best suited to gathering causal information. Contact methods include the collection of information by mail, telephone, personal interview or online (internet surveys, experiments and online focus groups).
Sampling is a way for marketers to draw conclusions about large groups of consumers by studying a small sample of the total consumer population. Then, the researcher puts the marketing research plan into action through collecting, processing, and analyzing the information. Lastly, the researcher will interpret the findings, draw conclusions and report them to the management. Marketers can study actual consumer purchases to find out what they buy, where and how much.
Psychological factors (motivation, perception, learning, beliefs and attitudes, personality and self-concept) and personal factors (Buyer’s age and life-cycle stage, occupation and economic situation), social factors (Household and groups: Reference groups, membership groups, Aspiration’s groups and opinion leaders) which strongly influence consumer purchases. Also, the marketer needs to know which people are involved in the buying decision and what role, such as initiator, influencer, decider, buyer and user, each person plays.
Complex-buying behavior, dissonance-reducing behavior, habitual buying behavior and variety- seeking behavior represent the degree of involvement of consumers in the purchase of a market offering. Consumers make buying decisions through five stages namely problem recognition, information search, evaluation of alternatives, purchase decision and post-purchase behavior. In relation to the problem recognition, the marketer needs to understand what consumer problems exist and devise how the consumer can be convinced that marketer’s product is a solution for the consumer’s problem.
Information search is helpful because as more information is obtained, the consumer’s awareness of the available brands increase. Marketers should study buyers to find out how they actually evaluate brand alternatives and if they know its processes, they can highly influence the buyer’s decision. A consumer’s purchase decision will be to buy the most preferred brand but factors like the attitudes of others and unexpected situational factors can influence the decision.
Post purchase behavior involves assessing the product’s performance and the marketer can reduce post-purchase dissonance by good product performance and after-sales service. Business buyers are more trained than consumer buyers and the main types f buying situations are straight rebury, modified rebury and systems buying. Their buying process differs from consumer markets and contains the problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification and post-purchase review.
Since organizations recognize that they cannot appeal to all buyers, it will opt for target marketing. The first step will be market segmentation where the company will find different ways to divide the market into different classes of buyers based on some variables. Geographic segmentation, demographic segmentation, cryptographic segmentation, behavioral segmentation). The second step occurs when the seller has to target the best market segments by evaluating each segment’s size and growth characteristics, structural attractiveness and compatibility with company resources and objectives.
Lastly, the company will decide on its positioning strategy where the marketers will position their products on specific product attributes, against a competitor and for different product classes. Through a perceptual mapping, the position of the brand in the mind of customers will be identified. After developing a marketing strategy, the 7 As (Product, Price, Place, Promotion, People, Processes, and Physical Evidence) of marketing should be used to continually evaluate and re- evaluate the business activities.
An effective marketing program blends all the marketing mix into a coordinated program designed to achieve the company’s objectives by delivering value to customers. Marketers should optimism their mix to deliver value. A product (consumer product or industrial product) is more than a simple set of tangible features which when developing them, marketers must first identify the core consumer needs they will satisfy.
They must then design the actual product and find ways to augment it (product quality, product features, and product design) to create the bundle of benefits that will provide the greatest value and help to differentiate their product in the marketplace. Pricing is regarded as a key problem for marketers and a company’s pricing decisions are affected by many internal company factors and external environment factors. The internal factors include marketing objectives, marketing mix strategy, costs, economics of information-based products, organizational considerations.
The external factors comprise the market and demand, competitor’s prices and offers and others. Companies set prices by selecting a general pricing approach such as the cost-based approach (cost-plus pricing, break-even analysis and target profit pricing), buyer-based approach (perceived-value pricing), the competition-based approach (economic-value pricing, going-rate and sealed bid pricing), performance-based approach (pricing tied to delivery performance) and the relationship approach (involving alliances).
In relation to place, marketing logistics network management involves coordinating the activities f the entire chain to achieve cost savings and deliver added value to customers. The major marketing logistics network functions include effective and efficient conversion operations, order processing, warehousing, inventory management and transportation. Distribution channel networks are among the most complex and challenge decisions facing the firm where each channel network creates a different level of sales and costs.
The marketing channels can be thought as a customer value delivery network in which each channel member adds value for the customer. Sales promotion are often used by marketers in conjunction with advertising as an incentive to create immediacy or to change a value-for-money perception but the real strengths of sales promotions come to the fore when they are used as a direct marketing tactical weapon, even in business to business dealings. Selling involves a 7-step process: prospecting and qualifying, pre approach, approach, presentation and demonstration, handling objections, closing and follow-up.
The integrated marketing mix also comprises people where the appearance and the behavior of the service deliverers are vital in delivering customer value and satisfaction. The racketeer’s activity is hindered and its service delivery can entail high variability if people are poorly trained. Processes refer to how the service is actually delivered and physical evidence concerns the layout, furniture, brochures. The additional ups allow customers to Judge the quality of the service offering.
The first 3 steps in the marketing lead to the 4th vital step of building profitable customer relationships. Beyond strategies to attract new customers and create exchanges with them which are expensive, they are now retaining current customers and building lasting customer relationships which will generate high customer value and satisfaction resulting in strong consumer loyalty and well-developed business relationships. This is done through Customer Relationship Management.
Capturing value from customers in return, in the form of loyal customers who buy and continue to buy the company’s brands will imply greater long-run profits for the firm. Mid-size customers who pay close to full price and receive good service are the most profitable for marketers. Hence, the marketer must decide about which customers to serve and which specific benefits to deliver or deny. Understanding the customer lifetime value also helps the marketer to decide which customers are worth keeping nurture long term profits.
Customer equity (Value equity, Brand equity and Relationship Equity) being the result of Customer relationship management, will increase if the customer is more loyal. In a nutshell, the marketer is involved in building profitable customer relationships by creating value for customers and capturing value in return. The first 4 steps of the marketing process focus on creating value for customers. He first gains a full understanding of the marketplace by researching customer needs and managing marketing information. It then designs a marketing strategy through the STEP process.
Good marketing companies know that they cannot serve all customers in every way but they need to focus their resources on the customers they can serve best and most profitably. With its marketing strategy decided, the marketer will construct an integrated marketing program blended with the ups that transmutes the marketing strategy into real value for customers. The vital step involves building value-based, profitable relationships with target customers. Consequently, the company reaps the rewards of its strong customer relationships by capturing value from customers.