The purpose of this case study is to present a brief overview of the
marketing study outcomes and personal interpretation of the key points of marketing
theory covered in this course. The interpretation will be aimed at emphasizing
the practical importance of marketing today.
MARKETING: EVOLUTION AND PURPOSE
The idea of marketing must have existed for many centuries. Yet, at
the beginning it probably was not so sophisticated theory as it is today.
Because of the globalization and rapid development of information technologies
people, or market participants, have been urged to systematize their market
experience into a well-organized theory. In our course of study the marketing
has been defined by the term that sounds more specific: «an approach to
business focusing on satisfying customer needs and wants». To serve its key
purpose, the marketing strives to find an answer to such questions as why
customers do not or, conversely, do readily buy products offered by the
sellers, who the ideal buyers are, and what should be done to have the buyers
buy what the sellers offer. In fact, the terms «buyers» and «sellers» are not
absolutely accurate as applied to marketing. To be more accurate, the marketing
approach implies that the business activities are centered on customer, because
the concept of business here means both profit and non-profit organizations. So,
the words «buy» and «products», or «services», can be identified as the key
terms reflecting the idea of marketing. It should also be noted that the words
«buy» and «services» represent a wide range of services, non-profit activities,
and behavior.
STRATEGIC IMPORTANCE OF
MARKETING CONCEPT
The key points of marketing concept are customer satisfaction,
profit, and properly organized efforts to make profit through customer
satisfaction. At the same time, strategically, it is important to understand
that a business can be profitable, or successful, only if it finds a way to
satisfy customers better than its competitors. This means, that today's
business can attract customers only through successful competition. Because of
the highly competitive environment, today it is not enough just to satisfy. The
important thing is to be better. In other words, if a business is unable to
compete, it fails to implement the key marketing ideas simply because such
business will fail to satisfy customers. Moreover, under the competitive
environment it becomes important not only to meet, but also to exceed the
customers' needs. In an organization, the role of marketing concept is more
profound: here the marketing concept implies that everyone's job is to serve
the customers directly, or to serve those who serve the customers. For example,
to contribute to profit through saving costs or, in other words, to serve the
internal customers. This idea is especially important to emphasize in terms of
the roles we may play in an organization in our day-to-day life: we do not
necessarily have to deal with customers directly to contribute to the common
goal of customer satisfaction. But our roles in it can be significant without
doing so.
COMPONENTS OF MARKETING
STRATEGY AND THEIR IMPORTANCE
The key components here are target
market (a group of customers to satisfy) and product mix (product, price,
place, and promotion). In real life, these components boil down to the
following objective all businesses need to fulfill: to increase the number of
customers so as to increase sales. To achieve this goal, the marketing strategy
should give us tips on how to do that. In every particular situation we face in
day-to-day life we have to find answers to specific questions. For example, to sell
an accounting service like filing a personal income tax return we would need to
determine what has to be done to attract customers (Product), what kind of
office would be needed to deliver the service (Place), how much it would cost
and what price would be right (Price), and what should be done to attract more
customers (Promotion). It is easy to see that this pattern would have to be
followed in every real-life situation. Even looking for a job we would have to
be concerned with where we can work (Place), what we can do (Product), at what
remuneration (Price), and how to attract employer's attention to be employed
(Promotion). And in every case we would look for specific customers who need to
have their income tax return filed and a specific employer who employees
specifically like we are (Target market). So, one way or the other, the
marketing strategy will work for our purpose. The question is just how to
identify its components in specific terms as applied to every specific
objective.
UNCONTROLLABLE ENVIRONMENTS AFFECTING MARKETING DECISIONS BOTH DOMESTICALLY
AND INTERNATIONALLY
Unlike the 4P’s of marketing that
can be controlled by us, some environments are uncontrollable by nature,
because we just have no chance to influence them. They may include, for
example, cultural, economic, legal, political, technological, and social
environments. This should not mean, however, that we should let them control us
without any response. To succeed, businesses have to re-adjust themselves and
find the best ways to work in them. The important point is that we need not
only identify them, but also try to see if there are new opportunities. For
example, the changing demographics inside our country should make us look
around to see how to readjust our products and services to different tastes and
preferences. Internationally, we should always be aware of tariffs and quotas
and estimate our competitive potential. Watching the changes we develop
possible scenarios, make relevant decisions, and get ready to implement them. What
can be the consequences of the war in Iraq
IMPACT OF SUPPLY, DEMAND,
AND ELASTICITY
The supply, demand, and elasticity
have a direct impact on marketing decisions. The low demand may point to the
necessity for better promotion of products and services simply because the consumers
may turn out to know too little about the product, or be unaware of it at all. There
would be little wonder if our specific product is not in demand, even though our
competitors sell the same one very successfully. What if we fail to sell fresh
water in hot summer time? Such paradox is quite possible if we do not follow
simple marketing principle of 4 Ps. In terms of marketing, demand should not be
viewed as something static. Even as applied to fundamentally new products, it
can be created through marketing decisions. To say nothing of basic needs like
fresh water in hot summer. We just have to remember of 4 Ps. The idea of supply
in marketing is especially important in terms of competition: if we fail to
provide supply that meets demand, our competitors will do it for us fast enough
to their own advantage. The idea of demand elasticity is also important in
terms of marketing decisions. For example, inelastic demand for a product
usually results from a lack of substitutes. For this reason, marketing
decisions might be aimed at identifying or creating a new product or service to
substitute for the one with inelastic demand.
MARKET SEGMENTATION AND CONCEPT OF POSITIONING
In simple terms, the idea of
market segmentation (naming and segmenting) is how not to lose the focus. For
this purpose, identifying most promising consumers is really a critical part of
marketing activities. Would it be a reasonable decision for us to try selling
air conditioners in Northern Territories South California ?
Hopefully not. The idea of positioning is also important in terms of consumers'
psychology. With the diversity of products today, it becomes important to be
able to have a proper understanding of consumer’s needs and attitude, to see what
and why they need and how their needs are satisfied by the existing market.
CONSUMER PRODUCT CLASSIFICATIONS, PRODUCT LIFE CYCLE, PACKAGING, AND
BRANDING
The idea of consumer product
classifications is important in terms of understanding how they think of them
and what can be the motivation to buy them. This understanding is really
critical, because to project our own perceptions on what we want to sell should
be the last thing to do. Since the human nature is really a complicated thing,
therefore the accumulated knowledge and observations made by the marketing
scientists can be really helpful in making decisions. This may apply to certain
particular classes of consumers' products like convenience, shopping,
specialty, and unsought products. The useful thing to realize is that in
selling a specific product or service we need to take into account specific qualities
they offer, in terms of both material and psychological implications. Branding
is also an important factor in marketing decisions. The idea of branding is to
win wider and steadier recognition, though in real life a brand would not
necessarily ensure a desired quality. Yet it works and, therefore, should be
taken into account for competitive considerations. One of the important real
life implications here is that to sell a branded product we would have to think
well of what kind of advantages might contrast our product or service against
the competitor’s one. The product life cycle is especially important to in
terms of planning of our marketing activities. For example, when dealing with a
new product on the market it is important to be aware of the main stages of
product’s life. The low sales at the introduction and market growth stages
would affect our marketing decisions in many ways, specifically in terms of
promotion approaches, pricing policies, scale of production, financing, risk
taking, etc.
CHANNEL INTERMEDIARIES
Intermediaries, as an indirect
channel of distribution, play a very important role in selling, which is one of
most critical marketing functions. In real life it could hardly be possible to
properly identify and effectively use all channels of distribution as they may
represent quite complex ramifications of different channels. For example, for a
small or medium-size production company it just might not be affordable to keep
a large enough marketing department to deal with all problems of products
distribution. Therefore, the services of intermediaries could be indispensable,
even though they may take extra costs. Intermediaries help us cover larger
market sectors. On the other hand, the value of intermediaries consists in
their practical experience in trading. If our business is focused on
production, we may need to concentrate more on production problems rather than
trading, otherwise we lose the focus and there is always price to be paid for
it. So the use of intermediaries might pay back.
INTEGRATED MARKETING COMMUNICATIONS
Integrated marketing
communications may be defined as what we manage to achieve through all our
efforts to promote a product or service. In simple terms, it might look like
our ability to work out the right way to influence consumers using our
communications skills. The practical approach (defined in theory as AIDA =
Attention + Interest + Desire + Action) could be basically described as a
complex process of informing and persuading. In other words, we need to design
our messages to influence the consumers’ perception about our products. The
importance of this ability in real life can hardly be overestimated. In today’s
world of tough competition the communication process should be viewed as one of
key elements of success. Life is full of practical examples of how the
effective communication just works wonders. In a literal sense, the power of
word can just be materialized. A dentist would not attract many clients without
sending a specific message saying that he or she can do a good job, and
accountant would not attract many customers and would not be employed by a
company without convincing them he is a good specialist.
PRICING OBJECTIVES AND POLICIES
The important thing the marketing
theory makes us understand about pricing is that it should not be viewed just
as adding up the values of costs and markups guided by supply and demand. Such
an approach would be incomplete to reflect the reality. The process, in real
life, is much more complex. The real economic life makes us set various objectives
and choose different policies. Reasons and objectives may be numerous. To win
more customers we may need first to give them a chance to use our products at affordable
prices to see, for example, that our product is in no way inferior to a similar
branded one, or simply to increase sales. A lawyer or an accountant beginning a
new business might choose to work harder at comparatively low prices for their
services with an objective to gain more popularity and recognition. Or, besides
competitive reasons there can be different motivations, such as survival. A
monopoly may set prices without caring much about how it affects consumers’
interests because of inelastic demand for its products: in such a case a
monopoly is just not interested in working harder, because the inelastic demand
would reduce its efforts to zero. In other words, the economic reality requires
us to be especially aware of the problem of pricing. Too many factors have to
be taken into consideration, and, therefore, a very good understanding is
needed to choose the right policies.
CONCLUSION
The most important conclusion
regarding my learning outcomes in this course of study might be summarized as
follows: the complex reality of today's economic life requires a comprehensive
knowledge and profound understanding of the marketing theory. The great variety
of specific marketing decisions the businesses have to make in day-to-day life always
relies not only on our specific accumulated experience and skills, but also on
our learning process and ability to filter and make use of specific marketing
information in every particular case, be it a small family business or a large
corporation.
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