A Discussion of the Marketing Concept and the Implementation of those Concepts - Essay Example

? Marketing and the Macro-Environment: A Discussion of the Marketing Concept and the Implementation of those Concepts. Table of Contents Introduction 3 2. Key Developments and Marketing Responses 4 2.1 Marketing 4 2.2 Key Concepts in Marketing 4 2.3 Key Developments 6 2.4 Social Marketing 7 3. Music in the Macro-Environment 8 3.1 Evolving forms of Listening 8 4. Final Thoughts 11 4.1 Bagozzi’s Ideas on Transactional Exchange 11 4.2 Conclusion 13 References 14 Marketing and the macro-environment: A discussion of the marketing concept and the implementation of those concepts. 1. Introduction The development of a macro-environment has meant that the field of marketing has had to expand its methods and beliefs as the meanings of consumerism have shifted to a global field of engagement. While a global state of business means that there are more opportunities, it also means that the competition is increased through innovation and local brands that may have an advantage over an international company originating out of foreign lands. Through using concepts and ideas that directly engage the issues that arise when entering into a new market, marketing becomes defined by those issues and the ways they lend towards engaging the consumer in a variety of environments. Marketing involves a series of elements that introduce the consumer to needs in relationship to social expectations. In addition, marketing is involved in the selling of not only tangible ideas, but intangible concepts such as political ideologies, universities, communities, and performers. Exchange becomes defined by the various environments that are involved in marketing. The actors within an exchange are involved in a wider variety of interests within the environments where the macro-environment is concerned. In addition the relationships between the actors is far more complex as barriers between people, in relationship to law, and in relationship to differences in traditions must be navigated in order to appropriately navigate the stream from sales to customer. As the macro-environment influences changes in marketing, it is essential to discuss Bragozzi’s interpretation of exchange. Exchange is defined by Bragozzi using generalities that have relevance, but require some expansion as popular culture has increased; the consumerist attitude has enveloped society, and as the macro-environment has required a more extensive explanation of exchange. 2. Key Developments and Marketing Responses 2.1 Marketing Marketing is the creation of activities that facilitate the exchange in a consumer context. The idea of exchange is developed through the equality that is created through assigning value and giving one thing of a specific value in exchange for something that represents the same value. The most common example is the exchange of money for goods and services, the goods and services being assigned a specific value that is reflected in a monetary figure. Actual value and social value are often two different ideas. As discussed by Bragozzi, often one part of the exchange or both parts will have negative impact, thus creating an inequality in the exchange. Marketing is the creation of what might be termed as an environment around a product. The environment around a product has its own identity, a culture and belief system through which the product is presented to the consumer. Marketing invites the consumer, through exchange, to become a part of that culture through ownership. 2.2 Key Concepts in Marketing One of the key ideas that are central to marketing is that designing for a product or of a product is central to creating the need that promotes purchase. Creativity is the cornerstone of design, where visuals and text must be in concern with one another in order to have impact. In addition, the culture that is created around the product is a core of how the design must convey the message. Design is developed through a series of elements that come together to convey the most powerful message possible. Within that message is an attempt to convince the buyer. Without that message, the culture and belief system around the product has no power. Branding is one of the more powerful elements in creating this message to convince the consumer of their need for the product. Need has become a term that has become interchanged for a want. Marketing has changed the idea of need from those things needed for survival, to those things that fulfill a social structure attached to identity. Through constructed cultures and belief systems, branding applies status to the product which then converts to a desired object to the consumer. Through a belief that without that object, the consumer will be in a social deficit, it becomes a need (Andrusia and Haskins 2000). A brand can be as simple as text or as complex as text with an image and a slogan. Branding becomes a type of recognition that conveys a series of ideas upon a product. As an example, a pair of sneakers are just sneakers, but put a Nike logo on them and they become an idea about sports. When Nike created the slogan “Just do it” that conveyed little about athletic footwear, and everything about the consumer. Wearing a Nike shoe made the wearer a part of the participation that Nike was inspiring. The Nike name is associated with quality athletic shoes and the culture is associated with athletic ideals (Reece 2010). The placement of products, through both store development and merchandising also has an effect on the consumer. In the new environments that have emerged in the macro-environment, virtual placement, ‘stores’ designed around the visual packaging of products become a central sales center where sales people are not needed, but the sales of products is solely done through the marketing packaging of the product. The visual elements must be powerful enough to convince the consumer of the necessity of the item without an interpersonal experience with a sales associate. 2.3 Key Developments The marketing environment encompasses a variety of different aspects including the political environment, the economic environment, the socio-cultural environment, and the technological environment. The technological environment is of great importance to marketers as they develop their product. One of the dangers associated with innovation is that it can make some products obsolete. If the marketer is not prepared for this eventuality, they will lose within the market. Innovation can be a competing force as products are improved upon and then find that they no longer have relevance. Within the macro-environment, that danger increases as the development of a global economy in which interaction between nations becomes the norm, there is a higher incidence of competitive forces creating bigger and better products. The socio-cultural environment is relative to the increased exposure that corporations have to other societies as they expand into the global business environment. According to Dawson (2007) “International retailers transfer the total culture of the firm, the capability to adapt to the market, techniques of retailing, and consumer values and expectations to the new market”. In a globalized economy where corporations are crossing not only boundaries, but into new and different cultures, adaptation to those cultures takes on a reciprocal value as the new environment is entered with ideas that conform to local traditions, while asserting the culture of the corporation into the new culture. As an example, when McDonald’s entered into the Japanese market they brought with them a new idea for a hamburger which was the teriyaki burger. This food item took into consideration the Japanese popular culture where food was concerned, but associated that item with the original culture of McDonald’s food, thus creating a bonding element between the brand culture and the local culture. In approaching the macro-environment, marketers utilize tools on a larger scale that are similar to domestic use. Market history is used in order to evaluate expectations on performance. This does not always work as different cultures will respond differently to different forms of marketing. In the macro-environment it is highly likely that localized understanding of how the public responds to different concepts will have an impact on the acceptance of a product into the culture. An example of this came when Nike and Reebok began to infiltrate the Indian market with their athletic wear. Both athletic wear giants banked on using celebrity endorsements to create an identity in the country, but while Nike chose international celebrities, Reebok used Indian national sports celebrities, which gave them the advantage within that culture (Gopinath and Siciliano 2010, p. 82-83). Where Nike banked on the idea that larger stars would reap higher returns, the truth was that local celebrities meant more to the people of India and Reebok won this particular round of marketing competition. 2.4 Social Marketing Social marketing is based upon the concept that marketing is dependent upon the idea that a product will change in relationship to the product, providing benefits to the community through beliefs attitudes and values. When change is mandated, social marketing tool provide a more seriously considered set of structures through which to assess the overall success of a product in a positive relationship within the exchange which allows for what is necessary. Social marketing is three key concepts: behaviour and behavioural goals, audience segmentation, and intervention and marketing mix (Kotler and Lee 2012). There are a great many theories that can be related to social marketing, but the concept is still in its infancy and has yet to have been fully defined by any one theory. One of the biggest problems with social marketing is that it is sometimes difficult to determine whether the change that is being promoted will be beneficial. 3. Music in the Macro-Environment 3.1 Evolving forms of Listening The music industry has had an evolution on how listeners have been able to listen to recordings. The industry started with records, moved into cassettes (with a brief stop at the rather unsuccessful 8-track), transitioned through CDs which were rather quickly replaced by downloads. There is a relationship between the various products of music: albums, singles, and live performances. The core is the attraction that the consumer has for the music performer or performers. Through the creation of a persona, the development of a public identity becomes related to how the brand is created. One of the problems in the industry of celebrity is that there is often confusion between the public branded image and the individual person. As identity becomes a part of the brand, the brand then depends on the behaviours of the branded individual or group. As an example, an individual may depend on a tough image, therefore might not want to attend a more domestic public event. Identity for a performer is the created perception that is defined through the concept of celebrity. Co-branding for the music industry becomes a relevant and powerful tool to sell music as musicians collaborate and produce sellable music that will cross fan groups so that the music sells to a wider audience. This can even be done through a performer taking on a piece of music popularized through someone in a different genre. Fans of both genres will then want to hear the work. A good example of this is when Johnny Cash, a country western singer from America and from an earlier generation, took on the task of singing a song written by Trent Rezner of Nine Inch Nails, a dark, gothic writer and singer. The song “Hurt” appealed to cross generations and cross genres, creating an interest that extended beyond a single branded performer. The new environment has changed the focus of remuneration for performers. Where the sales of music through tangible items such as records and CDs were once the primary earner for musicians, the availability of downloads has lessened the power of the sale of a track of music. Digital downloads have made the event of sharing music without an individual item sale a possibility, but has also opened up the door for illegal and free downloads that have diminished returns. This is not the end of the story, however. Through the advantages of worldwide open distribution of music, popularity of nationally based artists can be spread throughout the land. Through websites like YouTube an unknown performer can reach out to a larger demographic. The innovation of digital download has resurged as a method of sales as sites such as iTunes run by Apple charges a small fee for each piece of music where legitimate buyers can access their music. Innovation has had to come into play in order to find new ways to make money for musicians. Approximately 90% of all musicians on a label are not profitable. Through placing music into film, commercials, and television programs, music makes money through royalties. Music store are having a difficult time because an individual can sit at their computer, discover music, and download the song in a matter of minutes without ever leaving their home. Despite the downfalls, digital downloads provide an elimination of distribution and packaging which is good for the environment and for the consumer as the costs are lowered. Profit is higher because instant duplication means that no production is needed. The rapid changes that have taken place in the music industry is one example of how the macro-environment is inspiring change in industry as well as encouraging changes in consumer behaviours. In response to the changes in the way in which consumers are being herded towards change, marketers must find new ways in which to support products and their distribution being as flexible as possible so that as new innovations emerge, they are ready to move with those changes. The concept of the exchange has evolved through these innovations, the music industry being a prime example of how the meaning of owning music has been transformed through the changes in the form of transaction. Having a collection of music, which was at one time a status symbol, has been transformed towards having an appropriate device. The book industry is moving in that direction as well where shelves of books can be contained in a product such as a Kindle. Owning the device has the impact that owning the tangible method of communication once had for the consumer. 4. Final Thoughts 4.1 Bagozzi’s Ideas on Transactional Exchange The essence of the concept of exchange is that one gives something and then receives something in return. The extension of exchange as it is involved in commerce becomes far more complex as a transaction becomes complicated with the social implications of the exchange. Alderson’s Law of Exchange was defined through the following: Given that x is an element of the assortment A1 and y is an element of the assortment A2, x is exchangeable for y if, these three conditions hold: (a) x is different from y (b) the potency of the assortment A1 is increased by dropping x and adding y (c) the potency of the assortment A2 is increased by adding x and dropping y (Bagozzi Bagozzi goes on to explain, however, that this does not fully explain the element of marketing as it relates to the exchange. It does not take into consideration a negative value for either x or y, which means that, as an example, a defective product that is sold defective is a negative which cannot be considered an increase. The second criticism that Bagozzi holds for this formula is that it does not account for opposing combinations of value. Bagozzi defines the essence of exchange as being defined by the inclusion of a multitude of social actors. The relationships between these social actors become the way in which exchange becomes patterned or connected. This is a good place from which to begin to understand the nature of exchange. Bagozzi expands his ideas about exchange by including all the intangibles that are included in the concept. Intangibles include the endogenous variables that he lists such as prestige, knowledge, status, interpersonal attraction and/or attitudinal similarity, message characteristics, and source expertise. In the customer/salesman dyad, the exchange is simply the product in exchange for money, but it becomes extended through the various values that the product may have or represent. Where Bagozzi seems to lack depth is through the understanding that the product may have far less value than the cost for buying the product, but value may increase through the implied values that have occurred through marketing. In his conclusion, he breaks down exchange for having two requirements, the first being that the exchange have a structure and the second being that the exchange be defined by having the potential of both negative and positive actions on the part of any of the actors. What this does not fully take into consideration is the effect of marketing on exchange. While that consideration can be implied, the effect of marketing on the idea of exchange is not fully explored. An example can be the idea of fad as something that has no value suddenly becomes highly valued. This can be seen through the fad of the pet rock where simple rocks were packaged and sold with the idea that they were valuable enough to be given in exchange for monetary value. The only way in which value was attained was through marketing, rather than through any value that was real of defined. In this relationship, marketing concept was more important than actual value, placing the negativity of the exchange as the entirety of the transaction. 4.2 Conclusion The macro-environment is influencing many aspects of business, but marketing quite possibly be experiencing the highest impact. Marketing has evolved in the late 20th century to require certain central concepts such as branding and social impact. Design is now crucial in order to create a social aspect to a product, an identity that can be associated with the consumer through ownership. Through the development of products that are based upon social pressures, marketers are mandated to define value through engaging need as a foundation for the consumer experience. Marketers now must create need for items based upon the message that without an item, the life of the consumer is lessened. The example of the music industry provides a framework for understanding the way in which the macro-environment and the development of technology is changing the position of marketing. Through the example of the expansion of the exchange concept, it is clear that consumer behaviour, innovation, and the development of marketing intended now to meet consumer expectations requires that the marketing of a product be developed with current social structures at the core. It is through flexibility that the marketing of a product becomes relevant in a modern context, holding a position in the macro-environment. References Andrusia, David, and Rick Haskins. 2000. Brand yourself: how to create an identity for a brilliant career. New York: Ballantine Books. Dawson, J. (2007), Scoping and conceptualising retailer internationalisation, Journal of Economic Geography, 7 (2007), pp. 373-397. Gopinath, C., & J. Siciliano, (2010). Strategize!: Experiential exercises for strategic management. Australia: South-Western, Cengage Learning. Kapferer, J.-N. (2012). The new strategic brand management: Advanced insights and strategic thinking. London: Kogan Page. Kotler, Philip, and Nancy Lee. (2012). Social marketing: influencing behaviors for good. Los Angeles [u.a.]: Sage Publ. Reece, Monique. 2010. Real-time marketing for business growth: how to use social media, measure marketing, and create a culture of execution. Upper Saddle River, N.J.: FT Press. Read More