Questions about Marketing Concepts - Assignment Example

In your own words, what does the term "marketing" mean Marketing simply is regarded as a function which deals with advertising. Advertising is a part of marketing, but it is not the whole picture. Modern marketing calls for more than making the product available to target customers. It involves developing a good product, pricing it attractively and other functions. It is a creation and maintenance of mutually satisfying exchange relationships. It is critical in achieving competitive success as it is concerned with meeting the needs of the consumer in a way which is profitable to the company. It ensures a good fir between the opportunities offered by the marketplace and the abilities and resources of the organization. Marketing basically links all the functional departments of an organization to the customer's needs and wants. The idea behind marketing is that the customer is of prime importance and that the most significant task in any organization is first to identify the needs of the customer and then to ensure that all operations are geared toward meeting them efficiently and effectively. Marketing function concerns itself not only with customers but with competitors and suppliers as well. Thus marketing is not just a function but a management process responsible for identifying, anticipating and satisfying customer requirements profitably and responsibly with due regard for the environment and social foundation. To attract new visitors and to encourage revisits, marketers should pay attention to the 7Cs of effective Web Site design. Describe the 7Cs and why they are important. A website is a crucial component of the company's to attract current and potential customers. It represents the company globally. A web site is a virtual front-line and direct link to suppliers, distributors and potential and present customers. It is essential that a website conveys the company's objectives and goals immediately when a browser enters the site. The seven key design elements to achieve an effective web interface are Context, Content, Community, Customisation, Communication, Connection and Commerce. (Rayporter & Jaworski, 2001) The context refers to layout or design of the website, created by a combination of colour, graphics, animation and design features. It is what makes the website easy to find and access and the website simple to use. Content is the text, pictures, sound, video, graphics, downloads, chat rooms, bulletin boards, service, products and information etc that the website contains. Community is described as the ways how the site enables user-to-user communication. E.g. blog, chat rooms etc. It allows users to know opinions of other users interact with each other and encourages them to make purchases or visit the site again. Customization refers to the ability of the site to allow different users to personalize their own profiles by means of content and context selection and other personalization tools. Communication is the element of the website which enables user to site and vice verse communication. For communication, the site contains contact information, email contact forms, and phone numbers under the investor, media, and careers buttons. Connection links the website to other sites outside of the main website and commerce enables website to complete commercial transactions. For a website to be successful, the 7 C's of the website have to work well independently as well as collectively. 14. Describe the major types of buying situations. There are three major types of buying situations - straight rebuy, modified rebuy and new task, each requiring a different buying approach. (Lancaster and Reynolds, 2001) Straight rebuy refers to routine purchases of standard products from an existing vendor without modifying specifications or without renegotiating new terms. As they are routine within the current purchasing structure, these require little effort and short performance review. Modified rebuy occurs when the product is not purchased on a regular basis. It is a situation where some research is required. In this purchase decision there is a change in the specification of the product or change in the supplier due to dissatisfaction with the current vendor or better terms offered by a new vendor. Modified rebuy may involve a little element of risk with new product specifications, additional evaluation of vendors, or renegotiation of contracts. The third buying situation is a new task. This situation normally involves purchases made by a business for the first time. The buying process is started from scratch. It is the most challenging and requires the maximum time and effort in comparison to other buying situations. It involves decisions revolving around buying the product, leasing it or producing it in-house. It involves extensive research as the buyer is not familiar with the product and supplier of the product. 15. Explain the four major segmenting variables for consumer markets. Market segmentation is the process of dividing a total market into groups called segments. Each group consists of people with relatively similar product needs and behavior. Variables for segmenting Consumer Markets include: Demographic, Geographic, Psychographic and Behaviorist (Boone and Kurtz,2005) Demographic variables segment the market on the basis of age, sex, fertility rates, income, education, occupation, family life cycle, family size, religion, social class, migration patterns, mortality rates, ethnicity etc. These variables are of great importance of marketing management as they target customers based on them. For example marketing plans may target customers segments based on their income depending on the price of the product. Luxury products targeting advertisements to the upper class of the society base their segmentation on demographic variables. Travel agents developing a marketing plan based on age, in order to attract young travelers and not senior citizens. Geographic variables are based on population, climate, terrain, natural resources, population growths in different areas, city size etc. For examples this divides customers based on market density i.e. potential customers within a unit of area. Variables like geographic breakdown based on of the well being are used by health care companies to target potential customers. Psychographic variables include lifestyles and personality. Marketers must be aware of the changing lifestyles and market products accordingly. Behavioristic Variables segment customers based on regularity of use i.e. Regular users or non users or frequency or amount of use i.e. heavy, moderate, frequent or light users. It segments customers based on what they are looking for in a product i.e. whether they focus on benefits rather than on features. 17. Explain the concept of the product life-cycle. Briefly explain each stage. The stages through which individual products develop over time are known as the "Product Life Cycle". Product life cycle enables businesses to ensure that they deliver products that continue to meet customer wants by managing their products carefully over time. The classic product life cycle has four stages: introduction; growth; maturity and decline Introduction stage refers to the time when after product is developed and when it is introduced into the market. At the Introduction stage market size and growth is small. Marketing costs at this stage may be higher as the market has to be tested and the product is promoted to create awareness. A huge amount of research and development costs have been incurred in getting the product to this stage, however at this stage it is highly unlikely to make profits. Products at this stage have to be promoted and monitored as it grows and moves the next stage. Example of products that are currently at introduction stage are E-conferencing and iris-based personal identity cards. The next stage is Growth which is characterized by rapid growth in sales and profits. It is at this stage when the product gains more and more customers. Eventually the sales grow at a decreasing rate, market stabilizes and the product becomes mature. At the maturity stage competition is most intense as companies fight to maintain their market share. The company has to market the product carefully, keeping in consideration the financial aspect. At this stage any move by the company is most likely to be copied by the competitors. There could be expenditure on product improvement or modification to differentiate products and brands. After this period, when the product growth is stagnant and there is superior competition, the product goes into decline stage. In this stage the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At this stage steps have to be taken to cover the production costs by reducing production costs or intense price cutting. Eventually, if the product id no more profitable, it is withdrawn. Examples of products that are currently at decline stage are Typewriters and Handwritten letters In reality, the length of each stage varies enormously and very few products follow such a prescriptive cycle. Internet marketing practices have raised a number of ethical and legal questions. Why is online privacy perhaps the top online issue that marketers must address Security is a component and must be given particularly more attention by e-businesses than by brick and mortar business as it is an ongoing concern for consumers. (Rayporter & Jaworski, 2001) The unique nature of the threats to e-commerce companies requires new technologies and systems to provide a secure transaction environment. E-businesses must instill trust in its users by ensuring the security of all transactions and this can be achieved through many methods such as encryption, authentication or services by companies like paypal. E-commerce websites collects sensitive information form their customers. They should ensure use of security systems like SSL (Secure Socket Layer). This guarantees that the data provided by customer will not fall into the hand of a malicious hacker while transferring from his computer to the web server. This also will reassure customers that the website is concerned about the security of their personal and sensitive information. Another equally important issue for security is protection from attacks on your web server. People trying to find credit card numbers in accounting logs or just trying to steal products, to buy at ridiculously low or free prices. Prevention of this type of security breach is another area of concern. The unique and ever changing nature of the security threats to e-commerce companies requires new technologies and systems to provide a secure transaction environment. Thus security is an important challenge to e-commerce 7. What is a company's marketing environment Describe the factors that affect the marketing environment. The marketing environment surrounds and impacts upon the organization. It consists of all the direct or indirect forces that influence an organizations capability to conduct business. There are three key perspectives on the marketing environment - macro-environment, micro-environment and the internal environment. (Lancaster and Reynolds, 2001) The micro-environment is the forces acting on the firm. They influence the organization directly as it includes suppliers, consumers and customers, and other local stakeholders. The factors can also be influenced by a firm The macro-environment includes all factors that can influence and organization, but that are out of their direct control. These factors are continuously changing and the company has to adapt to them. They are broad and general environment. E.g. Laws - A company does not generally influence any laws, Globalization - threat of substitute products and new entrants and changes in culture, politics, economics and technology. The external environment can be audited in more detail using other approaches such as SWOT Analysis, Michael Porter's Five Forces Analysis or PEST Analysis. The internal environment is forces within the firm or factors that are internal to the organization. They are composed of internal stakeholders and the other functional areas within an organization. They include human resource, operations, finance and research and development departments. The internal environment is as important for as the external micro or macro environment. An understanding of the marketing environments is essential for planning, identification of opportunity or threats and competing more effectively. The major marketing trends today can be summed up in a single theme: connecting. List and discuss three important connections made possible by technology. Give specific examples of companies taking advantage of such connections. The three approaches that companies might follow to communicate with their users include online advertising, e-mail marketing and telemarketing. Online marketing includes banners, pop ups, or rich media marketing. It also includes search engine marketing or paid search engine inclusion and placement, and sponsorships or affiliate marketing. An example of this is sponsored links on the Google website. Another form of connectivity includes direct connectivity via e-mail, online chat, blogs, public forums etc. An example of this is hotmail which was a free e-mail service provider. To grow their traffic, to the footer of each outgoing email they attached a signature file that read: "To get your FREE email account go to www.hotmail.com". As more and more people received emails from existing Hotmail account holders so the word spread about their free email service. A number of companies like Reebok, Levis, offer an e-mail list of opt ins, which sends e-mail to consumers containing the information they have opted in for. Another form of connectivity is mobile communication, which companies use for telemarketing. Mobile Marketing via SMS is used by a number of retail brands all around the world to inform customers about new stock, sales etc. Media companies such as Reuters offer their business information through mobile phones. Entertainment companies like Disney sell carton characters and advertise via mobile connectivity. Marketing intelligence has become increasingly important to marketing managers as an aid to formulating strategy. What other benefits are derived from the marketing intelligence function Marketing intelligence function has become increasingly important to marketing managers as an aid to formulating strategy. However there are other functions of marketing intelligence. There is always a gap that exists between the knowledge that the company has regarding its consumers and the actual consumer behaviors which are ever changing. Marketing intelligence improves customer behavior understanding via evaluation of the market dynamics that influence competitiveness i.e. exogenous factors, customer needs, attitudes and behaviors, marketing effectiveness etc. Marketing intelligence is important to the designers of the product. Designers require more feedback from the market about those benefits that better enable the company to compete while they also require more freedom to identify more sustainable solutions. Collaborative approaches between the marketers and designers are essential for sustainable product design and production, packaging and labeling. Marketing intelligence functions helps in optimally pricing the goods so as to be competitive while at the same time getting a good return on investment. Physical distribution and distribution channels including alternative business models are to be evaluated on the basis of marketing intelligence. Marketing intelligence functions to identify and monitor competitors' marketing strategies and activities. This is about monitoring key competitors' marketing activities and evaluating their potential implications for an organization's products/services. It includes assessing the corresponding opportunities and threats, and recommending appropriate actions across the marketing mix to develop and/or protect an organization's products/services. It also includes obtaining feedback from existing customers. This is about establishing and implementing processes for obtaining ideas, information and insights from existing customers, suppliers and customer facing teams regarding an organization's marketing proposition, products. It includes evaluating the feedback, assessing the benefits and any risks associated with possible options, and making recommendations towards enhancing the organization's marketing proposition Thus a number of benefits are derived from marketing intelligence. Explain some of the reasons that so many new products fail. Products fail for several reasons. Reasons are associated with product, price, place and promotion. A product will fail if it t is an inferior product, there is no differentiation from existing products i.e. there are no new or added benefits for consumers. Thus if it's a 'me too' product it is likely that it will not be accepted by consumers. Any sort of differentiation in a new product like easier packaging can convince a consumer to try them. If it does not properly satisfy consumer needs and wants and is not well developed. If it is an overpriced product in comparison to its competitors it will fail to grow. Sometimes products fail when they have lower price than competition and perceived inferior by consumers. If company has not communicated the value of the product to the consumer or it has failed to communicate and or create a need for the product. The company has not invested enough money to communicate to the consumer; therefore, the consumer has not embraced the company or the product. Improper positioning and packaging of the product can also lead to its failure. Poor distribution in various channels of distribution, improper communication or wrong communication channels are other reasons for product failures. Products can also fail because of poor planning of the product i.e. improper research and development for the new product, poor concept of the product or product that does not match the original conceptualized product, improper production processes, inefficient market research and substandard products. (Geisler, Hiebing and Cooper , 2003) References : Boone, L.E. and Kurtz, D.L. (2005) Contemporary Marketing, Thomson South-Western Geisler, P., Hiebing, R. G. and Cooper S. W. (2003) The Successful Marketing Plan: A Disciplined and Comprehensive Approach, McGraw-Hill Professional Lancaster, G. and Reynolds, P. (2001) Marketing: The One Semester Introduction, Butterworth-Heinemann, Rayport, J.F. and Jaworski, B. (2001) Introduction to E-Commerce, McGraw-Hill Higher Education. Read More