Concept of Marketing - Assignment Example

Marketing Table of Contents Introduction 4 Section 2 4 1. Macro Environmental Factors 4 1 Political Factors 5 1.2. Economic Factors 5 1.3.Social Factors 6 1.1.4. Technological Factors 6 1.1.5. Environmental Factors 6 1.1.6. Legal Factors 6 1.2. Micro Environmental Factors 7 1.2.1. Customers 8 1.2.2. Suppliers 8 1.2.3. Employees 9 1.2.4. Shareholders 9 1.2.5. Competitors 9 2.1. Segmentation Criteria 9 2.1.1. Demographic Segmentation 10 2.1.2. Geographic Segmentation 10 2.1.3. Income Segmentation 10 2.1.4. Behavioural Segmentation 11 3.1. Choice of Targeting Strategy 11 3.1.1. Volume of Sales 12 3.1.2. Competitor’s Strength 12 3.1.3. Market Maturity 12 3.1.4. Buyers’ Needs and Preferences 13 3.1.4.1. Undifferentiated Target Marketing 13 3.1.4.2. Differentiated Target Marketing 13 3.1.4.3. Concentrated Marketing 13 4.1. Affect of Buyer Behaviour on Marketing Activities 14 4.1.1. Need Recognition 14 4.1.2. Information Search 14 4.1.3. Choice Evaluation 15 4.1.4. Purchase Decision 15 4.1.5. Post Purchase Behaviour 15 5.1. Market Positioning 15 Section 3 16 1.1. Product Development 16 1.1.1. Idea Generation 16 1.1.2. Idea Screening 16 1.1.3. Product design 17 1.1.4. Product Features 17 1.1.5. Product Quality 17 1.1.6. Product Branding 17 1.1.7. Product Target Marketing 17 1.1.8. Product Positioning 18 2.1. Distribution of Products 18 2.1.1. Direct Distribution Channel 19 2.1.2. Indirect Distribution Channel 19 3.1. Price Determination 20 3.1.1. Penetration Pricing 20 3.1.2. Price Skimming 21 3.1.3. Premium Pricing 21 3.1.4. Economy Pricing 21 4.1. Promotion Activity 22 4.1.1. Advertisement 23 4.1.2. Sales Promotion 23 4.1.3. Publicity 24 4.1.4. Personal Selling 24 5.1. Additional Elements of Marketing Mix 24 5.1.1. People 25 5.1.2. Process 25 5.1.3. Physical Evidence 26 References 27 Introduction Marketing has become as one of the most prominent concepts across the world, which purposes corporate organizations to foster organizational growth and maximization of customer satisfaction that ultimately contributes to increased profitability of the organization. In this regard, smartphones have bought a revolution in the field of technology, which has offered wide opportunities of growth and success (Silk, 2006). It is worth mentioning that the organizations need to concentrate on the development of various marketing strategies through prioritizing the development of products and services that the company offers to its customers (Silk, 2006). With due consideration to smartphone, the study is aimed towards gaining an understanding of the Segmentation, Targeting and Positioning (STP) strategies of the industry, and would further discuss the individual elements of the extended marketing mix in details. Section 2 1.1. Macro Environmental Factors Macro environmental factors have a significant impact on the development of a particular product or service, since these are responsible for influencing the organizational framework in a direct manner. Macro-Environmental factors comprise of alterations in the taxation policies, demographic changes and governmental guidelines (1FK Publications, n.d.). This can be better understood with the diagram below: 1.1.1. Political Factors Political factors such as government policies, taxation and decision-making of the existing governance structure also have a significant impact on the level of decision-making pertaining to the development of smartphone industry (1FK Publications, n.d.). 1.1.2. Economic Factors Factors such as taxation changes, prevailing rate of interest and exchange rates within a country or region have a substantial level of impact on the decision-making process, while designing and launching a smartphone in a market (1FK Publications, n.d.). 1.1.3. Social Factors Social factors existing within a country or market have significant influence on the development of a smartphone. Factors such as age, population, culture demand and supply play an important role in influencing the decision undertaken by the smartphone makers while launching a smartphone in the market (1FK Publications, n.d.). 1.1.4. Technological Factors Technological factors such as innovations, use of technologically advanced products, cost-reduction techniques and online shopping methods also have an impact on the decisions associated with research, designing, development and manufacturing of smartphones (1FK Publications, n.d.). 1.1.5. Environmental Factors A number of Environmental factors such as changes in climatic conditions, tourism development, and environmental conservation, global warming, amongst others further play an important role in the decision related to smart phones industry (1FK Publications, n.d.). 1.1.6. Legal Factors A variety of legal factors has a significant impact on the level of decision-making pertaining to smart phone organisations. Existence of legal restrictions, norms, policies, waging systems, amongst others have a significant influence on a firm’s costs associated with development, manufacturing and marketing of smart phones (1FK Publications, n.d.). 1.2. Micro Environmental Factors Apart from the macro-environmental factors, a number of micro-environmental factors comprising of customers, employees, shareholders, suppliers and competitors, who are internal to an organization have an impact on the decision-making process of a smart phone organisation. This can be better understood with the diagram shown below: 1.2.1. Customers Customers play an important role in organizational decision, which is apparent from smart phone industry. The reason behind this is that the development and production of smartphones is based on the needs and requirements of customers (2FK Publications, n.d.). 1.2.2. Suppliers Suppliers associated with providing raw materials to the smart phone company have an important role to play in the decision-making process, since they are directly interlinked with the prices of final products and services (2FK Publications, n.d.). 1.2.3. Employees As part of the microenvironment, employees might play an important role in decision-making process of smart phone organizations. The reason behind this is that they are the ones who are associated with manufacturing and development of products and services (2FK Publications, n.d.). 1.2.4. Shareholders Shareholders are considered as another important microenvironment factor associated with the company manufacturing smartphone, since the decisions pertaining to the smartphone have an association with the investments provided to the shareholders (2FK Publications, n.d.). 1.2.5. Competitors The level of competition existing in the market and the decision taken by the competitors in order to gain a sustainable competitive advantage can influence decisions pertaining to the development of smartphone and determination of its price in the market (2FK Publications, n.d.). 2.1. Segmentation Criteria An organization, in order to position itself successfully in the foreign market needs to ensure that the markets are properly segmented based on a number of criteria. In this regard, it is worth mentioning that the market must be segmented based on demographic, income, geographic and behavioural factors (Wedel & Kamakura, 2012). This can be better understood with the diagram shown below: 2.1.1. Demographic Segmentation Smartphone manufacturing organizations must attempt to segregate a market based on the demographic factors underlying a market scenario. In this regard, the market can be segmented based on age, lifecycle, gender and income of the people belonging to a particular location. This can be further subcategorized into homogeneous and heterogeneous markets, wherein products are developed based on the market conditions (Wedel & Kamakura, 2012). 2.1.2. Geographic Segmentation The smart phone marketers conduct geographical segmentation in order to target the market of geographically different locations. The reason behind such is to meet the needs and requirements of a particular market (Wedel & Kamakura, 2012). 2.1.3. Income Segmentation Income segmentation is another important criterion that defines market segmentation. Smartphone manufacturing companies might segment its market based on the income of its customers, i.e., it may design and launch a high-end smartphone for people belonging to high-class income groups (Wedel & Kamakura, 2012). 2.1.4. Behavioural Segmentation Behavioural segmentation strategy is also used by marketers with the aim of providing maximum satisfaction to customers, which is based on the intentions and perceptions of customers regarding a particular product. In this regard, behavioural segmentation criterion is based on the benefits derived by customers. From the perspective of smart phone marketers, it is important the reason behind the purchase of a particular product by the customer. It also depends on the usage rate of the customers (Wedel & Kamakura, 2012). 3.1. Choice of Targeting Strategy Market targeting aims at selection of a target market based on which the smartphone will be designed to cater the needs and requirements of customers. In this context, a variety of factors has an affect over the determination of marketing strategy, which is influenced by the factors such as volume of sales, competitor’s strength, market maturity and buyer’s needs and preferences (Lamb & et. al., 2011). This can be understood with the diagram below: 3.1.1. Volume of Sales The volume of sales of smart phones has a significant impact on the determination of targeting strategy. The volume of sales play an important role in determining whether the company is able to develop a sustainable competitive advantage and is able to gain a substantial market share (Lamb & et. al., 2011). 3.1.2. Competitor’s Strength The strengths of the competitors in smart phone industry also play a decisive role in deciding the target marketing strategy. The strengths and competencies occupied by an existing market competitor have a significant impact on the selection of targeting strategy (Lamb & et. al., 2011). 3.1.3. Market Maturity The degree of market maturity of smartphone market in a particular location also accounts an important role in determining the targeting strategy. The reason behind this is that the marketers would have to incur high level of investments in an already existing smartphone market, which have gained considerable maturity (Lamb & et. al., 2011). 3.1.4. Buyers’ Needs and Preferences The needs and preferences of buyers regarding smartphone have a substantial level of control on the level of decision making pertaining to selection of a targeting strategy. Moreover, a marketer might target a particular market based on the level of needs and preferences of customers (Lamb & et. al., 2011). In relation to the aforementioned factors, smartphone manufacturers might adopt target marketing based on undifferentiated, differentiated and concentrated marketing. 3.1.4.1. Undifferentiated Target Marketing A particular smartphone manufacturer might use undifferentiated marketing in case they want to target the whole market at once. In such instances, there is no segmentation of the product (Lamb & et. al., 2011). 3.1.4.2. Differentiated Target Marketing A smartphone manufacturing company uses differentiated target marketing in case it wants to differentiate the target market based on various segments (Lamb & et. al., 2011). 3.1.4.3. Concentrated Marketing Concentrated marketing is generally used in case a smartphone company is targeting only a particular segment, such as high-class market, irrespective of the availability of the remaining segments, such as middle and low-income segments within the market (Lamb & et. al., 2011). 4.1. Affect of Buyer Behaviour on Marketing Activities The behaviour deployed by the smart phone customers towards a particular product has a significant impact on the organization’s marketing activities and its operations in different buying locations (Cant & et. al., 2009). In this regard, it is worth mentioning that buyer behaviour might be segregated into five steps, an overview of which has been diagrammatized below: 4.1.1. Need Recognition The first steps in the decision making process with respect to purchase of a smartphone is the need of recognition on part of the customers. Customers tend to purchase when they are able to determine their needs and requirements (Cant & et. al., 2009). 4.1.2. Information Search Information Search is the next step in the process of decision-making wherein, buyers involve themselves in searching for information pertaining to a particular smartphone (Cant & et. al., 2009). 4.1.3. Choice Evaluation After gathering relevant data about various smart phones, customers aim towards evaluation of the choice prior to the selection of a specific smart phone. Moreover, choice evaluation holds a prominent position in decision-making, since it have a considerable impact on the marketing activities of the product (Cant & et. al., 2009). 4.1.4. Purchase Decision Purchase decisions associated with a particular smart phone have a substantial effect on the marketing activities in relation to alternate buying conditions. After selection of the best available alternatives, customers involve themselves in making purchase decisions (Cant & et. al., 2009). 4.1.5. Post Purchase Behaviour Post purchase behaviour displayed by the buyers has a vital influence on the choice of decision-making and with respect of marketing activities (Cant & et. al., 2009). In the context of aforementioned factors, the buying behaviours can be categorized into four types, namely, complex buying behaviour, variety-seeking behaviour, dissonance buying behaviour and habitual buying behaviour. 5.1. Market Positioning Market positioning refers to the determination of an opportunity or threat existing within the market, wherein, a smart phone organization might locate itself to a particular position to meet the needs and requirements of specific segments of customers. Market positioning of a smartphone are promoted through focusing on the development of messages, leaflets and use of promotional tools such as advertisements and online media for communication of information. Moreover, the market positioning would require defining the target markets, collection of data, and determination of market opportunities and placing the product at the best suitable position (Berger, 2008). Section 3 1.1. Product Development Products are usually developed based on a number of factors, which provide an in-depth understanding related to the development of products in order to sustain competitive advantages (Magrab & et. al., 2009). The steps have been outlined below for a logical understanding: 1.1.1. Idea Generation Idea generation involves generating ideas and information pertaining to development of smartphones. While determining a particular product or service, an organization needs to generate several ideas that can act as a base to perform operations associated with the development of a particular product or service (Magrab & et. al., 2009). 1.1.2. Idea Screening Screening of the generated idea involves evaluating of the generated ideas in the context of launching a particular product and making it available to the users (Magrab & et. al., 2009). 1.1.3. Product design Product designing aims at development of the smartphone based on the needs and requirements of customers (Magrab & et. al., 2009). 1.1.4. Product Features While developing a smartphone, marketers need to consider the features pertaining to the development of a smartphone, which supports enhancing the benefits associated with products, and thereby enhancing the level of competitive advantages (Magrab & et. al., 2009). 1.1.5. Product Quality While developing a smartphone, the quality of the same is an important factor determining the price to be charged from the customers in order to gain a competitive sustainable advantage (Magrab & et. al., 2009). 1.1.6. Product Branding While designing a product or service, branding play an important role influencing the customers’ decision and gain a sustainable competitive advantage. Moreover, emphasis must be laid on the fact that superior brand image is able to attract the attention of customers (Magrab & et. al., 2009). 1.1.7. Product Target Marketing After branding a smartphone, the corresponding step involves the determination of the target market, which provides a platform for launching the smartphone in the market. Moreover, selection of a target market would enable the marketers to concentrate on devising strategies associated with launching the smartphone within the market (Magrab & et. al., 2009). 1.1.8. Product Positioning The last step in designing of the product is product positioning, wherein, a marketer needs to successfully position the smartphone in the market and distinguish it from the competitors to gain a sustainable competitive advantage (Magrab & et. al., 2009). 2.1. Distribution of Products Distribution of products plays an important role in highlighting the significance of ensuring customer satisfaction and fostering the level of customers’ convenience. Distribution of the products and service is entirely dependent on a number of factors, which is important in determining the role of the organization facilitating deliverance of convenience to the end customers. The distribution channels apart from providing convenience to customers play an important role in reducing costs associated with deliverance of smartphone to the end customers (Dent, 2011). In this regard, two types of distribution channel conduct an important role in transfer of products and services to the end user. This has been depicted below for a coherent understanding: 2.1.1. Direct Distribution Channel One of the distribution channels that enable deliverance of final products and service to the end customers, without the involvement of third parties is the direct distribution channel. Direct distribution aims to transfer product and services from the manufacturer directly to the customers. This helps in reducing the costs associated with distribution and enhance convenience from customers’ perspective (Dent, 2011). 2.1.2. Indirect Distribution Channel Indirect distribution channel refers to the form of distribution channel, wherein, there exists a number of intermediaries in the process of transferring products and services to the end customers. Moreover, there is a need to concentrate on the fact that the intermediaries enable effective distribution of the products and services and are able to establish pertinent relationship with customers, which enables enhancing customer convenience. Indirect distribution channels include parties such as wholesalers, retailers and agents, who splay an important role in transferring information to the customers (Dent, 2011). 3.1. Price Determination A number of factors are associated with determination of prices with respect to the products and services designed by the marketers with an aim to enhance the level of customer satisfaction (Schindler, 2011). Moreover, there is a need to concentrate on the fact that price determination plays an important role in highlighting the pricing strategies, which have been discussed below for a comprehensive understanding: 3.1.1. Penetration Pricing Penetration pricing is one of the pricing strategies adopted by smart phone organizations across the world towards gaining a competitive advantage and ensuring that the organization is able to sustain market competition. Moreover, smartphone manufacturers can gain a pertinent market share through prioritizing market penetration by reducing the prices associated with the product (Schindler, 2011). 3.1.2. Price Skimming Price skimming is another important pricing strategy that enables the development of organisation’s market share, wherein, smart phone organizations intend to attract high-class customers through setting a higher price for the products (Schindler, 2011). 3.1.3. Premium Pricing Similar to the price skimming, premium pricing is associated with setting of high prices for the smartphone through offering high quality products and services to the customers, which supports attaining higher revenues (Schindler, 2011). 3.1.4. Economy Pricing Contrary to the premium pricing, an economy pricing refers to a pricing strategy, wherein the marketers might develop products and services having low quality and might further change minimal prices for the same (Schindler, 2011). In relation to the abovementioned factors, a marketer needs to determine prices based on a number of factors. These factors have been diagrammatized below: 4.1. Promotion Activity Promotion of products and services amongst the customers is one of the most vital factors associated with providing customers with the required products and services (Morgan & et. al., 2005). In addition, there is a need to consider the fact that a promotion mix, which has been diagrammatized below for a coherent understanding might have an influence on promotion: 4.1.1. Advertisement Advertisement is one of the influential components associated with promotion of products and services and sharing information with the end customers. Advertisements support the marketers to promote smartphone sales, since it enables them to share pertinent information with mass users at a time (Morgan & et. al., 2005). 4.1.2. Sales Promotion Sales promotion is another widely used technique to promote sales of products and services and making them available to the customers. A sales promotion involves use of several sales promotion elements comprising of gift cards, coupons, offers, discounts, amongst others, which enable the marketer to ensure successful promotion of the smartphone amongst people (Morgan & et. al., 2005). 4.1.3. Publicity An organization might foster promotion of its products and services through prioritizing the development of publicity stunts and might make use of celebrity endorsements with the aim of enhancing the popularity of the smartphone in the market (Morgan & et. al., 2005). 4.1.4. Personal Selling Personal selling is another important promotional activity, which aims to encourage sales and enhances customer satisfaction through prioritizing sales via personal communication with customers. Personal selling involves personal interaction with customers, which correspondingly enhances the level of customer satisfaction (Morgan & et. al., 2005). 5.1. Additional Elements of Marketing Mix A marketing mix comprises of several marketing strategies that aims towards marketing of the products and services and making it available to the end customers. However, considering the modern scenario, marketing mix has been redesigned and comprise of additional 3 P’s, apart from the existing 4P’s (Masterson & Pickton, 2014). This can be better understood with the diagram provided below: 5.1.1. People In marketing mix, people occupy a dominant position, since they are associated with staff recruitment, selection and are further responsible for carrying out the various activities associated with the organization (Masterson & Pickton, 2014). 5.1.2. Process Marketing activities associated with smartphone are dependent on a number of processes that facilitate information sharing and service delivery to the end users (Masterson & Pickton, 2014). 5.1.3. Physical Evidence Physical evidence refers to the infrastructure and similar facilities that enables service delivery to the end customers. Physical evidences further comprise of the physical appearances of the smartphone stores and the tangible services such as service representative associated with facilitating service delivery to customers (Masterson & Pickton, 2014). References Berger, C., 2008. The four Types of Market Competitive Positioning and Its Key Strategies. GRIN Verlag. Cant, M. C. & et. al., 2009. Marketing Management. Juta and Company Ltd. Dent, J., 2011. Distribution Channels: Understanding and Managing Channels to Market. Kogan Page Publishers. 1FK Publications, No Date. Business Environment. FK Publications. 2FK Publications, No Date. Principles of Marketing. FK Publications. Lamb, C. & et. al., 2011. Essentials of Marketing. Cengage Learning. Magrab, E. B. & et. al., 2009. Integrated Product and Process Design and Development: The Product Realization Process, Second Edition. CRC Press. Masterson, R. & Pickton, D., 2014. Marketing: An Introduction. SAGE. Morgan, M. J. J. & et. al., 2005. Sports Marketing. Cengage Learning Australia. Schindler, R. M., 2011. Pricing Strategies: A Marketing Approach. SAGE Publications. Silk, A. J., 2006. What is Marketing? Harvard Business Press. Wedel, M. & Kamakura, W. A., 2012. Market Segmentation: Conceptual and Methodological Foundations. Springer Science & Business Media. Read More