Structural characteristics of a marketing orientated business

Structural characteristics of a marketing orientated business There are many definitions of marketing. The better definitions are focused upon customer orientation and satisfaction of customer needs. Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably The Chartered Institute of Marketing (CIM). The CIM definition (in common with Barwells definition of the marketing concept) looks not only at identifying customer needs, but also satisfying them (short-term) and anticipating them in the future (long-term retention). The right product, in the right place, at the right time, at the right price Adcock. This is a snappy and realistic definition that uses McCarthys Four Ps. Marketing is essentially about marshalling the resources of an organization so that they meet the changing needs of the customer on whom the organization depends Palmer. This is a more recent and very realistic definition that looks at matching capabilities with needs. Marketing is the process whereby society, to supply its consumption needs, evolves distributive systems composed of participants, who, interacting under constraints technical (economic) and ethical (social) create the transactions or flows which resolve market separations and result in exchange and consumption. Bartles. Question 1. Enlighten the company on the marketing concept and process, to include a) characteristics of marketing oriented company including structure and culture, b) explain the various elements of the marketing concept, c) access the benefits and costs of a marketing approach. Answer: Structural characteristics of a marketing-orientated business A business that has a marketing orientation sees the needs of customers and consumers as vital. As it develops and markets products to meet those demands, certain structural characteristics become apparent in the business. Structure: Every organization made up of more than one person will need some form of organizational structure. An organizational chart shows the way in which the chain of command works within the organization. The way in which a company is organised can be illustrated for a packaging company. The company will be owned by shareholders that choose directors to look after their interests. The directors then appoint managers to run the business on a day-to-day basis There are different kinds of organizational structure. The most common organizational structure are: -tall -flat Culture: The culture within the organization is known as corporate culture. A market oriented company like Paper Chase Ltd, will have to develop an attitude and way of doing things such that the whole organization embraces the concept that the customers are the key to the companys success and their wants and needs should be satisfied at all times. A corporate culture towards customer orientation and satisfaction should involve providing prompt valuable service. The Marketing Concept The marketing concept is the philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs, better than the competition. Today most firms have adopted the marketing concept, but this has not always been the case. The marketing concept has 3 key elements. A customer orientation The customer is always right when they believe they are right.   They may be dead wrong.     But if by their understanding of the situation they believe they are right, then you need to acknowledge their belief.   Only after you have honored that belief and acknowledged that it can you begin to present a different way of looking at the situation.   That takes time and effort.   Seldom is it worth skipping that process An integrated company effort The all structure of the organization must work together to fulfil customers needs and wants. If any section of the organization fails to meet the requirements of the customer, it will result in lost opportunities or dissatisfied customers. A profit-goal rather than just a sales-goal Every company want more profit. This is the one another concept. On the othe hand customers want good product in best price. That means both wants to be satisfied. This satisfaction may well be the result of negotiation where the customer has accepted on alternative product or organization has had to accept lower profit. But they (Both) must be satisfied with the exchange. Otherwise, it will not be marketing. Benefits of Strategic Interactive Marketing * More affluent customers: Those customers that acquire the various interactive technologies are more affluent and value their time more highly. They will pay for responsive service and for having their particular needs met. * Accurately targeting promotions: Personalized and animated illustrations could be electronically delivered regularly or on special occasions (e.g. birthdays, anniversaries, car renewal). * Higher sales conversions through raising customer confidence, and inducing buy-in: Complex offering, whereby a number of different product benefits are inter-linked, could more easily be comprehended through graphics and animation. Using interactive software, including simulation techniques, the customer is able to involve themselves in the development and exploration of various options and see real life illustrations. * Product Awareness: Customer (or sales representative) can have access comprehensive product information to address a wide range of needs (one-stop shopping). Lower Costs * Distribution and sales costs are much lower (see the Booz-Allen Hamilton example banking transaction costs). There are no sales persons to employ, no expensive premises, and customers even perform the data entry! * Servicing costs: Besides the obvious e-mail type links to customer services, customers could directly view or enquire on their product portfolio. * Promotional costs: Electronic delivery is substantially lower, especially when media rich formats are involved. When products or services change, there are no wasted brochures etc * Product retention: Customer (or sales representative) can have access comprehensive product information. In the case of investment products it is imperative that correct advice is given in order to comply with the Financial Services Act. Market Exploitation * Market responsiveness: In response to competitor actions or legislation, etc., changes can be quickly made to products and services and then distributed to customers and suppliers. * Cross-selling: By linking into other companys delivery medium, one companys products can be cross-sold to another, and the linking reciprocated. * Differentiation: A go-ahead insurer has the ability to present a lively and innovative image and to break away from the traditionally stuffy image of the insurance industry. Promotion * Promotion needs to direct customers to different access points according to their capability and inclination to design their own product or service. See Design. Design * Products and services need to be design and made available at a component level under construction together with business rules under construction that define the possible combinations and limits. * Quite often there will be a base (or core) component to which further components are added. * Starter products and services of pre-built components will be available to help customers into the design process. * Product information needs to be available at the component level as well as for any base product. Pricing * Products and services need pricing at a component level and to take into account the distribution method (customer self service, agent or sales person, face to face, via the telephone or the Internet, etc.). Production * Production systems need to assemble the components according to the unique customer design. * A detailed record of the product or service will need to be kept so that it can later be serviced or amend (see Servicing). Servicing * Profiles of individual customer products as well as profiles of the individual customers need to be available to support staff and the customer throughout the life of the product or service. Question 2. Explore the concepts of segmentation, targeting and positioning with reference to Paper Chase Ltd a) Identify and explain the macro and micro environment influencing Paper Chase, b) propose segmentation criteria for any 2 products from the brain storming sessions c) which markets Paper Chase should target and factors influencing their choice d) How buyer behaviour affects the marketing of Paper Chase products. Answer: Marketing environment The term marketing environment relates to all of the factors (whether internal, external, direct or indirect) that affects a firms marketing decision-making or planning and is subject of the marketing research. A firms marketing environment consists of two main areas, which are: Macro environment On the macro environment a firm holds only little control. It consists of a variety of external factors that manifest on a large (or macro) scale. These are typically economic, social, political or technological phenomena. A common method of assessing a firms macro-environment is via a PESTLE (Political, Economic, Social, Technological, Legal, and Ecological) analysis. Within a PESTLE analysis, a firm would analyze national political issues, culture and climate, key macroeconomic conditions, health and indicators (such as economic growth, inflation, unemployment, etc.), social trends/attitudes, and the nature of technologys impact on its society and the business processes within the society. Micro environment A firm holds a greater amount (though not necessarily total) control of the micro environment. It comprises factors pertinent to the firm itself, or stakeholders closely connected with the firm or company. A firms micro environment typically spans: * Customers/consumers * Employees * Suppliers * The Media By contrast to the macro environment, an organization holds a greater degree of control over these factors. Market segmentation Market segmentation pertains to the division of a market of consumers into persons with similar needs and wants. As an example, if using Kelloggs cereals in this instance, Frosties are marketed to children. Crunchy Nut Cornflakes are marketed to adults. Both goods aforementioned denote two products which are marketed to two distinct groups of persons, both with like needs, traits, and wants. The purpose for market segmentation is conducted for two main issues. First, a segmentation allows a better allocation of a firms finite resources. A firm only possesses a certain amount of resources. Accordingly, it must make choices (and appreciate the related costs) in servicing specific groups of consumers. Furthermore the diversified tastes of the contemporary Western consumers can be served better. Market segmentation can be defined in terms of the STP acronym, meaning Segment, Target and Position. Segment Segmentation involves the initial splitting up of consumers into persons of like needs/wants/tastes. Four commonly used criteria are used for segmentation, which include: * Geographical (e.g. country, region, city, town, etc.) * Psychographic (i.e. personality traits or character traits which influence consumer behavior) * Demographic (e.g. age, gender, socio-economic class, etc.) * Behavioural (e.g. brand loyalty, usage rate, etc.) The two products, from the brain storming session, selected for criteria Paper Chase Ltd are: Tea Tea Cup Tea and Tea Cup has three different Segment Tea Cup Large Medium Small Tea Milk Tea Green Tea Red Tea Target Once a segment has been identified, a firm must ascertain whether the segment is beneficial for them to service. The DAMP acronym, meaning Discernible, Accessible, Measurable and Profitable, are used as criteria to gauge the viability of a target market. DAMP is explained in further detail below: * Discernable How a segment can be differentiated from other segments. * Accessible How a segment can be accessed via Marketing Communications produced by a firm. * Measurable Can the segment be quantified and its size determined? * Profitable Can a sufficient return on investment be attained from a segments servicing? The next step in the targeting process is the level of differentiation involved in a segment serving. Three modes of differentiation exist, which are commonly applied by firms. These are: * Undifferentiated Where a company produces a like product for all of a market segment. * Differentiated In which a firm produced slight modifications of a product within a segment. * Niche In which an organization forges a product to satisfy a specialized target market. Position Positioning concern how to positions a product in the mind of consumers. A firm often performs this by producing a perceptual map, which denotes products produced in its industry according to how consumers perceive their price and quality. From a products placing on the map, a firm would tailor its marketing communications to suit meld with the products perception among consumers. Buying behaviour A marketing firm, in the course of its operations, must ascertain the nature of buying behaviour, if it is to market properly its product. In order to entice and persuade a consumer to buy a product, the psychological/behavioural process of how a given product is purchased. Buying behaviour consists of two prime strands, namely being consumer (B2C) behaviour and organizational/industrial behavior (B2B). B2C buying behaviour This mode of behaviour concerns consumers, in the purchase of a given product. The B2C buying process is as thus: * Need/want recognition * Information search * Search for alternatives (to satisfy need/want) * Purchase decision * Post-purchase evaluation As an example, if one pictures a pair of sneakers, the desire for a pair of sneakers would be followed by an information search on available types/brands. This may include perusing media outlets, but most commonly consists of information gathered from family and friends. If the information search is insufficient, the consumer may search for alternative means to satisfy the need/want. In this case, this may be buying leather shoes, sandals, etc. The purchase decision is then made, in which the consumer actually buys the product. Question 3. Identify and analyse the individual elements of Paper Chase marketing, to include product, price, promotion, place, people, process and physical evidence. Answer: Marketing mix In the early 1960s, Professor Neil Borden at Harvard Business School identified a number of company performance actions that can influence the consumer decision to purchase goods or services. Borden suggested that all those actions of the company represented a Marketing Mix. Professor E. Jerome McCarthy, at the Michigan State University in the early 1960s, suggested that the Marketing Mix contained 4 elements product, price, place and promotion. Product The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-users needs and wants. The scope of a product generally includes supporting elements such as warranties, guarantees, and support. Pricing This refers to the process of setting a price for a product, including discounts. The price need not be monetary; it can simply be what is exchanged for the product or services, e.g. time, energy, or attention. Methods of setting prices optimally are in the domain of pricing science. A number of modes of pricing techniques exist, which span: * Elasticities (whether Price Elasticity of Demand, Cross Elasticity of Demand, or Income Elasticity of Demand) * Market skimming pricing * Market penetration pricing Elasticitys are a microeconomic concept, which gauges how elastic demand is for a given good/service. In a marketing context, its usefulness relates to the suitable level at which a product can be priced, in accordance with price, a products complements and substitutes, and the level of income a consumer possesses. Market skimming pertains to firm releasing a good in a first to market scenario. As an example, picture a company which releases a new type of personal media playing system. It may set the good at an initially high level, but reduce it over time, once the level of demand gradually rises. Market skimming is best operable within a first to market scenario, since there would be few competitors within the companys industry. Market penetration concerns pricing policies for late entrants to a market. Placement (or distribution) This refers to how the product gets to the customer; for example, point-of-sale placement or retailing. This third P has also sometimes been called Place, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. also referring to how the environment in which the product is sold in can affect sales. Promotion This includes advertising, sales promotion, including promotional education, publicity, and personal selling. Branding refers to the various methods of promoting the product, brand, or company. These four elements are often referred to as the marketing mix, [5] which a marketer can use to craft a marketing plan. The four Ps model is most useful when marketing low value consumer products. Industrial products, services, high value consumer products require adjustments to this model. Services marketing must account for the unique nature of services. In order to recognize the different aspects of selling services, as opposed to Products, a further three Ps were added to make a range of Seven Ps for service industries: * Process the way, in which orders are handled, customers are satisfied and the service is delivered. * Physical Evidence is tangible evidence of the service customers will receive (for example a holiday brochure). * People the people meeting and dealing with the customers. As markets have become more satisfied, the 7 Ps have become relevant to those companies selling products, as well as those solely involved with services: customers now differentiate between sellers of goods by the service they receive in the process from the people involved Question 4. Select any 2 products from the brain storming session and elaborate on the application of different marketing mix (to include extended marketing mix elements) to different markets segments and context. Briefly discuss the areas that need consideration, should Paper Chase consider foreign expansion in the future. Answer: Marketing mix for Coffee: Product: Paper Chase Ltd have different kind of Coffee for customers Price: Price are very reasonable for Coffee. So that people can purchase easily Promotion: This company give different kind of advertisement. Place: Paper Chase always find new and comfortable places for the customer. Marketing mix for Clock Product: This company has different type of clock for the customers. Price: Price of the clock always are in customer budget. So that customer can purchase easily. Place: Paper Chase should seek a comfortable place. The atmosphere should be nice. Promotion:Paper Chase provides different kind of promotion. Like advertising, discount, coupon etc. Mr. Smith will think what types of product need for customer. Then those products are supply for the customer. They need widely marketing and more communicate with the customer. Then customer will be attractive for product line or company. Paper chase provide special supply some product. As for example Pens with company logos because whose company ordered the product their company logo will be printed pens body.