Marketing Goods & Services - Essay Example

Marketing Goods & Services A. Marketing as an activity is carried out in a variety of contexts. The most obvious context is of the sale of goods and services to end-users. The main assumption is that new forms of organization are required as a strategic response to the combined effects of market stagnation, technological change, increased uncertainty, and reductions in the working week. The ideal strategic response to these forces involves some form of high dynamics (Johnson, Scholes, 1998). The strategy proposed by Strong will alter the positioning strategy for Aldus as it is aimed to divide its target market into two segments: business market and creative graphics professional market. According to the positioning theory, Aldus Corporation will be able to reach wider and more diverse target audience creating new offerings for a particular target group (segment). This strategy will help to maintain customers credibility, confidence and loyalty. On the other hand, Aldus Corporation will be able to identify its image in the customers' minds. " It would allow Aldus to develop two separate focused product and market strategies" (Aldus Corporation, 2002). B. Two types of goods commonly result from a production system: services and products. Generally, products are physical goods, such as a personal computer, and services are abstract or nonphysical. For example, Albus Corporation produces a product and a service, a software tool. Clearly the actual process of software development for consumption and the use of more automated equipment is the same chain. Consumer and organizational markets has some differences, which is essential for successful marketing activity. Organizational marketing is a more useful term since it can accurately embrace any marketing exchange between two or more organizations (McDonald, Christopher, 2003). Organizations like Aldus engages in marketing when they sell finished goods to a variety of different sources. The amount of products sold is greater in comparison with the consumer market. Organizational market proposes Aldus to accept long-term decisions, because it is easy to predict and calculate precise sales volume and market demand. In contrast, consumer market is more subjected to environmental economic changes, which makes it difficult for Aldus, and other companies, to determine precisely market demand precisely. Whereas Aldus consumers buy goods and services for a variety of reasons, which may include less tangible considerations of status, industrial buyers tend to be more concerned with the utility of the product in their own process, as well as its contribution to their costs. In this case, organizational buying is institutionalized and is often carried out by professionals using formalized procedures involving quotations and contracts and often as part of a close on-going relationship between buyer and seller. C. These issues are closely connected with the positioning of Aldus. Trying to penetrate in to two markets Aldus locates a brand in customers' minds over and against competitors in terms of attributes and benefits that the brand does and does not offer. For Aldus, positioning is used in conjunction with the segmentation variables and targeting strategies. Aldus, as a consumer goods company, engages in differentiated target marketing, offering a full range of brands within a given product category. Each product line is positioned slightly differently. Consumer and organizational markets need positioning by attribute or benefit, quality and price, use and user, and competitor. The case study shows that "Aldus became a multi-product and "multi-segment" company with the acquisition and distribution rights" (Aldus, Corporation, 2002). D. Behavior segmentation focuses on whether or not people buy and use a product, as well as how often, and how much they use or consume. Consumers can be categorized in terms of usage rates-for example, heavy, medium, light, and non-user. Consumers can also be segmented according to user status: potential users, non-users, ex-users, regulars, first-timers, and users of competitors' products (Hodgetts, 1986). For Aldus market segments include business and creative graphics professionals. Most of them are potential and regular users of the products. In terms of usage rates, the Aldus market can be characterized as light. For example, conventional wisdom might assume that consumers in Europe and America are interested in high quality and easy-to-use printing, so called "desktop publishing". According to specific market characteristics, unconventional wisdom would note that the global segment exists in many countries. Global benefit segmentation focuses on the numerator of the value equation. This approach is based on Aldus' superior understanding of the problem a product solves, the benefit it offers, or the issue it addresses, regardless of geography E. Aldus uses behavior and benefit segmentation. The concept of segment simultaneity can be applied to Aldus Corporation as well. It provides an opportunity for the company to pursue one or more segments on a global scale, business and graphic professionals. When marketing budgets are tight, advertisers look for a more effective buy, and Aldus can deliver a niche audience with global reach. Another market segmentation, based an usability and compatibility, is divided into four major groups "based on the computer operating systems" (Aldus Corporation, 2002) such as Apple Macintosh or IBM PCAT, which is also divided into business organizations or creative graphics professionals. F. Targeting is the act of evaluating and comparing the identified groups and then selecting one or more of them as the prospect with the highest potential. As defined by Kotler, marketing management is: "The analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges and relationships with target markets for the purpose of achieving organizational objectives. Marketers do not create needs, needs pre-exist marketers. Marketers, along with other influential in the society, influence wants" (Kotler, 1991). In the case, Strong identifies two the Aldus Executive Serious for business market and the Aldus Professional Serious. In spite the "relatively small size of MS-DOS graphic art professionals" (Aldus Corporation, 2002), Strong believes that in future this target market will need more sophisticated tools for their work. Business market attracts new "less sophisticated" (Aldus Corporation) consumers with greater demand for automation. G. The life cycle of the product includes the following stages: development, bringing to market, and catching on. The main factors which influence this process are: how quickly it grows in popularity; how different versions are developed for different market segments; how the output reaches market. how price competition emerges. As a result, a project form of transformation system may be used for the development of a new product, may evolve into a job shop or cellular layout as a market develops, and finally may evolve into a flow shop as full standardization and high volumes develop. In the development stage, many variations are investigated during the development of a product. As the product is being developed, prototypes are made in small volumes in a relatively inefficient, uncoordinated manner typically in a job shop. As demand grows and competitors enter the market, price competition begins and a cellular or flow system, with its high volume and low variable costs, becomes preferred. At the peak of the cycle, demand may increase to the point where such a system is justified (Ford, 1990). H. The professional version of PageMaker is on the development stage. At the stage of project development and initial production, the cost of fixed equipment is nil, and labor is the predominant contributor to high variable costs. The case study underlines that: " professional product line be anchored around a version of PageMaker priced around $2,000" (Aldus Corporation, 2002). For Aldus, professional version of PageMaker raises uncomfortable dilemmas. While new product may be vital to the future of Aldus, the process of creating a broad product line is expensive, risky and potentially unprofitable. It is known fact that most new product ideas never reach the market, and of those that do, there are relatively few which succeed. In order to reach the market, Aldus Corporation should develop the appropriate marketing mix to for target audience of the professional version of PageMaker. I. A marketing mix is aimed to provide Aldus with the best return on sales while simultaneously creating the maximum amount of value to consumers. It will include Press, Internet and direct sales. The Choice of Press issues should be based on readership. It refers to the total number of people who probably will read the publication. For example trade and technical publications are often read by people other than the purchaser at the purchaser's place of work (McDonald, Christopher, 2003). Therefore, readership figures may be several times larger than circulation figures and help to tell Aldus how many people may read the publication. The readership profiles usually indicate the demographic characteristics of the readership, such as age, sex, income and, in particular, socio-economic grading of readers, quintessential to the effective targeting of a company's advertising. For example, Internet advertising may be linked with advertising in the Internet that provides the program schedules for viewers. Aldus can reach a widely dispersed target market, using direct mail. It can help Aldus present its message in a very personalized way; it offers the opportunity of informing consumers in details about the complete range offered. The disadvantages are: too much direct mail is currently is used. The advantages of Internet Web Banner ads for Aldus are low costs; can be used free banner ad exchange schemes; get more than a response. For maximum penetration it may help to select primary and secondary media (such as radio, transport ads, so on) that support each other. J. K. For any organization operating anywhere in the world, the essence of marketing is to surpass the competition at the task of creating perceived value for customers. The marketing mix is integral to the equation because benefits are a combination of the product, promotion, and distribution (McDonald, Christopher, 2003). As a general rule, value as perceived by the customer can be increased in two basic ways. Aldus can offer customers an improved bundle of benefits and lower prices. It may strive to improve the product itself, to design new channels of distribution, to create better communications strategies, or a combination of all three. Aldus may also seek to increase perceived value of goods by finding ways to cut costs and prices. Companies that use price as a competitive weapon may enjoy an ample supply of low-wage labor or access to cheap raw materials. Companies can also reduce prices if costs are low because of process efficiencies in manufacturing. If Aldus is able to offer a combination of superior product, distribution, or promotion benefits and lower prices than the competition, it enjoys an extremely advantageous position. Aldus is going to offer new product line with higher quality and lower prices than those made by competitors. So, a product must measure up to a threshold of acceptable quality. The perceived value of goods is often related to the extent to which managements wish to optimize profit. The desire of a group of managers for a larger market share for their products may result in a low price strategy to build up demand. In some firms perceived value of goods may be deliberately used as a promotion strategy to create an image of product quality in the eyes of the consumer. The size of an organization may give it market power and the ability to manipulate market prices. L. The problems connected with organizational buyer include comparatively low price of goods, long contracting, which, in some cases, does not meet the needs of changing economic environment and market conditions. Organizational buyers can reduce price competition involves businesses trying to undercut each other's prices; this will, in turn, be dependent upon their ability to reduce their costs of production. Pricing policy is therefore a vital strand of strategy, which because of the complexities involved is often difficult for management to judge. This strategy is valued by Aldus who believe that a concentration on a unit that focuses their efforts is better able to serve their needs of a narrow strategic target more effectively than their competition. References 1. "Aldus Corporation". (2002). Richard Ivey School of Business. McGrew Hill Companies. 2. Ford, David, ed. (1990). Understanding Business Markets. San Diego, California: Academic Press. 3. Hodgetts, R.M., (1986). Management: Theory, Process and Practice, 4th Edition, Academic Press, College Division, Orlando. 4. Johnson, G., Scholes, K. (1998). Exploring Corporate Strategy. Hemel Hempstead: Prentice Hall. 5. Kotler, P., (1991). Marketing management, 7th edn, Prentice-Hall, Englewood Cliffs, NJ. 6. McDonald M., Christopher M. (2003). Marketing: A complete Guide. Palgrave Macmillan. Read More