Definition of Marketing
Marketing is essential ingredient for a successful business. It is aimed to meet the needs of the current and potential customers. Marketing is defined as ‘The management process responsible for identifying, anticipating, and satisfying customer requirements profitability.’ Many of the key words above can be defined as:
* Management process- The level of importance of marketing decisions. In order for marketing to be successful it needs managerial input as requires constant information gathering and data analysis, in order for a decision to be made.
* Identifying- involves answering questions such as ‘how do we find out what the consumers requirements are?’ and ‘how do we keep in touch with their thoughts and perceptions about our goods or services?’
* Anticipating- how consumer requirements change over time, due to them becoming richer etc.
* Satisfying- meeting customer requirements, such as the right goods, right price, right time and the right place.
* Profitability- is the profit that motivates organisations to supply.
If a business’s marketing is to be successful, it must adhere to the five principles of marketing, which are:
Principles of Marketing
Understanding customer needs
For a business to anticipate change it needs to know what is happening to the age population, tastes and preferences and level of incomes. Market research acts as an antenna of an organisation. The first task for an organisation is to find a set of customers and identifying their needs so that their type of goods and services can be produced. The first ingredient in marketing is the product, and then comes the pricing, which should meet the needs of the consumer, then you must work out how you are going to distribute the product and how to promote them, this is known as ‘The Marketing Mix’. In recent years there has been an increasing effort to meet individual wants of customers, which is known as customisation.
In order for my company to meet this part of the criteria I would need to conduct market research into what the customers need and require. After I have completed the research I would know the customers needs and meet them, therefore satisfying the customers in ways they opted for.
Understanding and keeping ahead of competition
Organisations will gear their activities to be better than their competition. It can do this by coming up with new products, advertising promotions, price and special offers. It is argued that competitors respond to competitors’ responses, so competition orientation sits alongside marketing orientation. Finding about competitors involves a lot of research, which will be on finding out competitors’ products and the other elements of the marketing mix. It’s important to identify the points of difference between an organisation and its competitors’, this process is known as the competitive audit. The business should then evaluate and plan its activities on it.
This part of the criteria involves me and my company to try and keep ahead of the competition, understanding the effects of change within the market. I will have to be aware of my competitors and what changes they make, and where they decide to locate their products. Therefore I will have to make sure that when using this strategy towards my company I do stay ahead of the competition and also, do not make moves so that my company attracts competition, for example if selling my product in an area where there is very little competition and my competition market research shows that the demand of my product is high then other companies would start to sell their products in the same location and therefore end in a loss for my product. If my competitors were to introduce a new type of flavour, then I would have to consider doing a similar method.
Communicate effectively with its customers to satisfy customer expectations
An effective network of communication is essential for any form of promotional activity. It enables a business to communicate with customers and help project itself to the world. Communication of products and services contributes to the persuasion process. The tools used to communicate with customers fall in the promotional mix, which comprises all marketing and promotional communications methods. These methods are broken into controllable and non-controllable.
Non-controllable communications consists of marketing messages from word of mouth, personal recommendation or a consumer’s perception of a product or service.
Controllable communication consists of marketing messages that are directed to achieve organisations promotional objectives. These could include the following:
* Advertising- using the media to send messages to influences people receiving it.
* Direct Mail- messages sent via the post
* Public Relations- non-personal communication using the media. It’s used to develop favourable relationships between an organisation and its public.
* Sales Promotions- designed to improve sales, e.g. money of coupons, free samples etc.
* Sponsorship- funding an event, this will gain consumer awareness.
* Product Presentation- improving a brands visibility through packaging.
* Direct Selling- making sales on the importance of salesmanship.
D- Customer that’s persuaded is deprived by not having the product, stimulates desire.
A- Action involves purchasing the product.
This principle of marketing will influence the way my company adversities, the way the promotions are dealt with and public relation methods. The usage of these methods my company decide to use will have to be influential on a consumer purchasing my product over other competitors’ brands of drinks. I will also be choosing the type of methods that will get my company and product positive public recognition. For my product to do well in the customers eye, I would need to make sure they know what the product is, for example the packaging, labelling and flavour of the product, which would have to be better or as good as my competitors brands, and where my product can be bought from, for example, if my drink would be available for purchasing in super markets, petrol stations etc. Information on the price would have to be told to the customers, for example according to size the price would vary on each can/ bottle of Choco Fizz. This is so that every customer that is to purchase one of my products knows the actual price, and if the super markets change the price then the customers would know about it. If my communication methods were not successful and did not receive any recognition then it would result in a loss of revenue.
Co-ordinate its functions to achieve marketing aims
Market strategies help, an organisation plan its future and is concerned with the big decisions a business makes. As modern organisations focus so much attention on customers, marketing is seen as a strategic discipline. Market strategies, help find out what a customer wants and then two influence them in a way which would benefit the organisation. Marketing strategies require detailed research to find out about, customer requirements, the right products to develop to meet customer needs, how to position the product or service in relation to other products and services and the right marketing mix.
Marketing strategy means the aims and objectives, and marketing tactics are the tools used to achieve these objectives. Planning enables decision makers to plan for the future and present and to learn from the past. The three main reasons for planning are:
1. Asses how well the organisation is doing in the various markets.
2. Identify the strengths and weaknesses
3. Establish goals and objectives.
A marketing plan is defined as a document developed by market managers to identify market opportunities, define the target market that represents the opportunity, develop a mix of strategies directed at this target and guides the evaluation of the marketing effort.
Marketing objectives help evaluate the marketing strategy. Marketing objectives should be:
In order to achieve this principle I must use marketing orientation, as my business will be entering a highly competitive market. With this method my business will be able to interact with the customers and find out their needs and requirements. This would be a major benefit for my company, as I would know what the customers want. My company will be able to find out how much customers are willing to spend on drinks, where they buy it from, what they expect of the product and whether they are manipulated by the promotional method. If my business is to exceed in this highly completive market then the correct method must be chosen, my company should also cover every aspect of the marketing mix.
Be aware of constraints on marketing activities
Every organisation involved in marketing activities is faced with constraints, which needs to be worked round.
Internal constraints relate to resource capability of an organisation. In addition to financial resources, business organisations need the skills and know-how for a range of marketing activities. Increasingly, companies rely on buying in expertise from outside the organisation.
External constraints involve factors within the business, which will limit the businesses activities, which can include the following:
* Consumers. If organisations are not market focused or a consumer is not interested in a product.
* Competitors. Its difficult to advertise a product when a competitor has an advantage
* Economy. In a period of economic recession when consumers have falling incomes, makes it difficult to market a luxury product.
* The law. There may be a number of laws constraining activities of a business, which will make it difficult for a business to do well.
My business will be constrained to a tight budget to begin with, as excessive spending could lead to my business going bankrupt. Advertising my product can be difficult as big companies such as Coca Cola have the money to advertise on a larger scale than me, which means I could loose potential customers. If the population which I distribute my product have a low income and can only afford necessity items, then they would not buy my product.
For me to plan a strategy I would first need to know what my target audience require. Market research will help me link with the customer, identify my competitors who can cause a drop in profit, use trends to predict my activities, help me monitor my market position and can allow me to have an edge on my competitors.
Market research can be defined as:
* Systematic- using an organised method
* Gathering- collecting appropriate information
* Recording- keeping records of what I find
* Analysing- drawing out relative trends and conclusions from results
* Problems relating to marketing- answering questions about customers and the market place.
The activities that will take place within my organisation has a certain element of risk, as I may sell large number of products in a single year, but there is a chance that I will not sell as many the following year. This could be due to new competitors entering the market, or a fall in the economy. This is where market research kicks in as it will reduce these risks and help me develop a correct strategy. It does this by helping identifying competitors, knowing the change in trends which can help forecast activities, monitor my market position and give me a competitive advantage.