TERMINOLOGY AND MARKETING CONCEPTS
The process of preparing the marketing planning assignment allowed for a substantial use of terminology and understanding of marketing concepts. While compiling research and preparing of the Muddy Buddy analysis many concepts were utilized such as geographics, demographics, and psychographics. Marketing focus also covered concepts such as needs, trends, and growth. Further concepts were detailed and covered SWOT analysis, marketing strategies and financial components of marketing. With the understanding developed in the marketing planning assignment, opportunity was given to learn and implement marketing concepts.
The development of marketing concepts was enhanced through the process of creating a PowerPoint presentation discussing out teams Muddy Buddy proposal. It was necessary to determine and present the key elements of detailed marketing plan. With a thorough understanding of the important factors, our team was able to pluck out the necessary parts to create a solid presentation. The outcome of our paper and our presentation demonstrated a clear understanding of terminology and marketing concepts as learned in this course.
MARKETING AFFECTS AND INFLUENCES
Marketing plays a significant role in society in general. It impacts trends in fashion, retail, and business and has an impact on what people value. In addition, our influences and interests compel the market to respond to personal needs and wants. An example of these two concepts can be found in the fashion industry where trends and styles go in and out very quickly. Identity and image are associated with what we wear. Some marketers may try to create new trends and some try to chase existing trends. A marketer can shape society by promoting new trends which are often influenced by celebrities. Sometimes these trends stay, such as with flat boots for women, and sometimes they move on quickly, such as jeans with holes in them or neon clothing. At the same time, marketers will target people in a particular segment based on their lifestyle choices. An example would be to produce gear marketed to the kayaker or backpacker, or suits marketed to the business man or woman.
Our team approached its marketing focus on consumer image in its promotion of the auto detailing service in Practicum Two. We appealed to the consumer by associating success with the positive image of having a clean car. By reminding people that image is tied into how well they look is an effort to influence them to keep their car clean and ultimately use our service.
ENVIRONMENTAL CHANGES AFFECTING MARKETING
Environmental changes include the changing preferences of the consumer, competition, legal, political, and regulatory conditions, a marketer’s resource and budget, current trends and the overall economy. Retail selling is an ever changing marketing environment. Consumer preferences and the internet are changing the way in which people buy. E-commerce has already had a large impact on the marketing environment on-line retails sales at an all time high.
However, a new trend in marketing is m-commerce. This is mobile retailing. It is growing more rapidly than any other kind of retail activity. Mobile apps are being used to make retail purchases. In the U.S. m-commerce amounted to 9.8% of all on-line sales in a single day (Persson, 2012). eBay’s global mobile sales reached $2 billion in 2010 and in 2011 it reached more than $5 billion (Persson, 2012). With environmental changes such as e-commerce and m-commerce, the industry and regulators are in a state of massive change all being driven by consumer demand.
COSTS AND BENEFITS ON SOCIETY
The costs and benefits of marketing on society allow for the ability to identify opportunity, minimize risk, and evaluate success. Marketing research must be done in order to estimate the likelihood of success of a potential new company. A benefit of marketing research is to identify opportunity within a market. For example during the research for Muddy Buddy bars it was important to prepare enough research to determine if there was a need or room for a new food bar in the marketplace. With thorough marketing research and evaluation of the data, a decision can be made regarding the degree of risk involved in making food bars.
The bottom line is that society makes choices about what should be produced and how. Price provides incentives to both the consumer and the producer to use or make the product. Marketing research is a tool used by marketers to determine what society wants.
MARKETING INTERACTIONS AND INTERDEPENDENCE
Marketing is part of the value chain along with other department in an organization. Each department is responsible for bringing value to the firm’s success. Each department works together yet separately to bring added value. A marketer’s focus is to determine what customers want and to make sure to provide it at affordable costs. They must prepare advertising and merchandising programs to bring added value. In order to do this a marketer must rely on other departments for needed information. For example, the IT department would provide timely and needed information about which products are being sold and the operations team would provide effective merchandise handling. These are two examples where other departments support the marketing department. Other departments, such as finance, put controls on the marketing department. As stated, a marketer’s job is to consider its consumers. This can become very costly when traditional advertising programs are used. It is important that marketing and finance work together to make sure that budget are not being exceeded and that marketing provides an effective return. The financial aspect of a business as it relates to marketing became a key focus while developing the plan for Muddy Buddy bars. The results of the breakeven analysis was carefully evaluated and the budget appropriately adjusted based on the fixed and variable costs associated with production and marketing.
ROLE OF MARKETING IN ORGANIZATIONS AND SOCIETY
The role of marketing in the organization is to create customer value and relationships. The strategic plan involves a customer focused approach. Defining the marketer’s role requires an understanding of the company wide strategic plan. The strategic plan will set out to develop and maintain a fit between the goals of a company and changing marketing environments. The company must have a mission statement. This statement defines the company’s purpose. Next, the objectives and the goals will be determined. Once this is in place, a business portfolio is developed to meet the strengths and weaknesses of the opportunity.
Marketing plays a key role in a company by providing a guiding philosophy that says the company strategy should revolve around target consumer groups. Marketers identify attractive marketing opportunities and assess the firm’s ability to target them. Marketers design strategies for development of the firm’s goals and assists in developing them in profitable ways. A marketer’s role in the company often sets the image of the company and how the public views the company.
In a broader sense, the marketer offers significant benefits to society: product development, competitive environment, large distribution channels, increase labor force and convey messages that effect behavior. A marketer develops products that satisfy consumer needs and wants. They create a more competitive environment for products helping to keep costs down and competition up. They develop distributions systems that help products reach massive targets across many regions. They build demand for products that motivate industry and organizations to increase labor and hiring. Lastly, the messages they send shape the way society looks at the world and themselves. As an example, one of the teams proposed to develop a solar panel designed generate enough energy to operate a car. The advertising strategy they focused on was creating a green and planet friendly mode of transportation. The message it sends to the consumer is that the planet is valuable and resources must be conserved. These types of messages when reinforced shape the awareness we have about the planet and our consumption.
MARKETING STRATEGIES AND TECHNIQUES AND THE MARKETING MIX ELEMENTS
There are many strategies to be used by the marketer. All of them are related to creating value for the customer. In creating value a company must determine the customers it wishes to serve, the value proposition being offered the customer and the objective and goal of the company. An integrated marketing mix must be utilized and includes the 4P’s. They are product, price, place and promotion. Product is the goods and services being offered. Price refers to how much a customer is willing to pay to obtain the product. The place refers to the location of the product to its target customers. Promotion refers to the activities needed to convey to the consumers the value of the product.
In addition to the marketing mix, marketing research must be done to define an existing problem and research the need for a new product. Market segmentation, targeting, differentiation and positioning must all be addressed in order to build a strong marketing plan. Marketers use a new product development strategy to generate, develop and test new ideas. A product has strategies associated with it and flows through various stages. They are the introduction stage, growth stage, maturity stage and decline stage. A marketer must track a products success to know what stage it is in and if an overhaul is necessary. Another area where strategy is used by the marketer has to do with pricing. Pricing strategies include: cost based pricing, value based pricing, and competition based pricing. There are many other strategies and techniques a marketer uses to develop, promote, and bring value to the consumer.
HOW MARKETING DECISIONS ARE MADE
Marketing decisions are made through detailed analysis such as our group prepared for the Muddy Buddy bar proposal. Pricing review and analysis examines pricing policy and the competitive marketplace. A procedure to determine demand for a product is done by examining customer preferences; sales channel behavior, and predict sales. A careful competitive analysis will help identify competitive threats and determine a products pricing policy.
In pricing Muddy Buddy bars we used competitor analysis to determine the price point for the bars. We priced the bar slightly higher than the major competitors of non-organic, non gluten-free bars yet lower than the competition for organic and gluten-free bars.
A channel and contributor analysis is also done to help identify the practices of suppliers, the sales force, and wholesalers and retailers to find out why they do things the way they do. The contributor analysis gains helpful insight into what is already working by the competition and also identifies potential strategic partners and government policies that may have an impact on the product or its development.
Two additional considerations may be included: strategy assessment and product design analysis. A strategy assessment reviews the target market selection and focuses on positioning. The product design analysis focuses on key features that the product must maintain in order to establish optimal pricing.
NEW MARKETING OPPORTUNITIES AND SELECTING TARGET MARKETS
New product development includes a strategy that involves idea generation, idea screening, concept development and testing, marketing strategy development, business analysis, product development and test marketing. Idea generation involves a systematic search for new product ideas. Sources include internal and external sources such as customers, competitors, distributors and suppliers. The screening process is designed to keep good ideas and drop bad ones as soon as possible. Testing is done to determine if a product has potential consumer appeal. Product development involves creating a prototype to determine if the product can be made into a workable product offering. Test marketing is the opportunity in which the product and its proposed marketing program are tested in realistic settings.
Target marketing involves evaluation marketing segments and selecting target market segments. The target market shares common characteristics and needs that a company decides to supply. Target marketing can be done either by undifferentiated or differentiated strategies or with concentrated or micromarketing. The undifferentiated target would be mass marketing and would tend to approach an entire market with one common offer. For example, household needs such as toilet tissue, or personal needs, such as Band-Aids. The differentiated strategy would focus on a segment of the population, such as socks for women. The concentrated strategy would focus on a particular niche, such as athletic socks for women. Micromarketing is more refined in category and approaches more local or individual marketing, such as socks with the “CSUMB otter” logo on the side.
ETHICAL AND GLOBAL ISSUES IN THE MARKETING FUNCTION
Some of the ethical issues relating to marketing have to do with the costs of marketing towards the consumer. Because a company must absorb its cost, the cost of market is buried in the cost of a product. If advertising was not so costly, product costs would be lower. Another factor leading to high prices is the number of intermediaries in the marketing channel. Each level of distribution adds a markup to its cost. Some companies charge excessive markups on its products. Another ethical concern relates to deceptive practices. Marketers have been charged with false advertising by promising more than what a product can offer. Other issues such as high-pressure selling, harmful or unsafe products, or planned obsolescence are also concerns for consumers.
There are many issues related to going global. Operating domestically is considered easier and safer. Global companies need to concern themselves with foreign language and regulations. Unstable monetary currency becomes a factor as well as political and legal uncertainties. Furthermore, customs and needs differ in different global societies. What may be popular in one region may not be in another.