Elements Of The Marketing Process
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| Student Name | Shalif Stone Touret |
| Student ID | P1004822 |
| Assessor Name | Rabin |
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| Assignment Title | MP Assignment |
| Date of Submission | 09/10/2013 |
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Task 1
Introduction
This assignment will discuss and summarise key issues and elements of the Marketing process. It generates the strategy that underlies sales techniques, business communications, and developments. It is an incorporated process that can be modelled in a sequence of steps: the situation is analysed to identify opportunities, the strategy is formulated for a value proposition, tactical decisions are made, the plan is achieved and the results are monitored.
TASK ONE
- Explain the various elements of the marketing process
Marketing
Marketing is the social process by which individuals and organisation obtain what they need and want through creating and exchanging value with others. (Kotler & Armstrong, 2010). The marketing process of accompany typically involves identifying the viable and potential marketing opportunities in the environment, developing strategies to effective utilise the opportunities, evolving suitable marketing strategies, and supervising the implementation of these marketing efforts. (M. Patidar, 2012).
- Discuss and summarise key issues and element of the process
Sainsbury’s which is one of the most prosperous companies in the world has been chosen for case study. There are four key elements of marketing process, environment analysis, and strategy development, the choice of the marketing mix and implementation and control.
The Marketing Process
Marketing process has several steps and these steps are summarising below:
1 - By analysing marketing opportunities, Sainsbury’s has the opportunities to find out about the current and future market trends, current resources and capabilities, and internal and external environment. Research into the environment defines the strengths and weaknesses of the Organisation, the competitive forces at work and the macro forces that affect business and what the market actually wants.
2 – The next step element is choosing of target customers for its products and services. Sainsbury’s will segment the whole market in different parts based on different aspects and select the best one for its products and services.
3 - Sainsbury’s has to develop marketing strategy after selecting the target market and marketing strategy that consists of value proposal, targeting, segmenting and positioning of services and goods. Marketing strategy is composed of segmentation, targeting and positioning. It also gives Sainsbury’s the general vision of achieving goals or where it wants to be.
4 - The Marketing mix decisions is tactical tools used to attract customers, beat competitors, increase sales, and provide a better value for its customers. The 4Ps- Product, Price, Place and Promotion are the key issues and elements, of the marketing process and this include: what a company is going to produce; how it is much it is going to charge; how it is going to deliver its products or services to the customer; and how it is going to tell its customers about its products and services. As marketing become more highly developed and complex, a fifth “P” was incorporated which was (People), and recently, two further “P” were added, mostly for service industries and they are Process and Physical evidence. There are now considered as the 7Ps of marketing.
5 - Implementation and control is the fourth elements of the marketing process. It allows organisations like Sainsbury’s to assess whether they had planned and performed diligently throughout production in order to satisfy customer needs and had brought to market the right marketing approach and mix. (Hitesh Bhasin, 17 may 2012)
- b) Evaluate the benefits and costs of a marketing orientation for a selected organisation
Production orientation is when a business makes products that are affordable and available. It is useful for management in order to make sure that the organisation is as efficient as possible in production and distribution techniques.
Product orientation believes that the consumers are mainly interested in the product itself, and they will buy base on the product quality; as the consumers want the highest level of quality for their money.
Selling orientation is when an organisation structures its business by focusing on needs that are required for selling to the market. This means the organisation is more interesting on selling rather than customer needs. It is the opposite of customer orientation.
Societal orientation is a business perspective by which a company operates in interest of the society as a whole. For example, a company operates sells food items with ingredients that are sustainably farmed.
Marketing orientation is a business model that focuses on delivering products designed according to customer desires, needs, and requirements. Sainsbury’s can develop products based on either product oriented approach or a marketing oriented approach. The marketing oriented approach means Sainsbury’s reacts to what customers want. Marketing orientation is the best orientation Sainsbury’s can adopt because Market orientation has the benefits of focusing and meeting the stated or hidden needs or wants of customers; or it express a marketing perception which put the customer’s needs in the core of all firm’s activities, according to Dalgic (1998). Therefore, Sainsbury’s benefits from decisions based on customers’ needs and wants rather than what Sainsbury’s thinks is right for the customers. In general, organisations follow market approach because market oriented approach brings some benefits and costs to Sainsbury’s. Further benefits of market oriented approaches are: this process is customer centric and Sainsbury’s gives importance on the customers’ demands and needs; Sainsbury’s reacts with customer demand, this process helps Sainsbury’s to create buyer value that increase customer loyalty and frequent shopping; as Sainsbury develops products and services that gives competitiveness over its competitors.
A marketing orientated approach means that McDonalds must spend to develop what customers want, and the decisions are taken accordingly to the information based on customers ‘needs and wants, rather than what the business thinks is convenient for the customer. McDonald’s market – orientated approach needs investment in the right products or service as customers require more variety and better quality. For that reason, the businesses need to invest constantly in marketing and be more sensitive to their customers and market needs otherwise they will lose sales to their competitors.
Task 2
2.1 Show macro and micro environmental factors which influence marketing decisions of Sainsbury’s
There are two kinds of external marketing environments; micro and macro. These environments’ factors are beyond the control of marketers but they still influence the decisions made when creating a strategic marketing strategy. Sainsbury’s runs its operation in its business environment that is classified as macro and micro environment which have significant influence on marketing decisions.(Linkedln Corporation, 2015)
Micro Environment Factors
The suppliers can control the success of the business when the suppliers hold the power. The supplier holds the power when the suppliers are the only or the largest supplier of their goods; the buyer in not vital to the supplier’s business; the supplier’s product is a core part of the buyer’s finished product or business.
The customers – who the customers are (B2B or B2C, local or international) and their reasons for buying the product will play a significant role in how the someone approaches the marketing of its products and services to them.
The resellers if the product the organisation produces is taken to market by third party resellers or market intermediates such as retailers, wholesalers, then the marketing success is impacted by those third party resellers. For example, if a retail seller is a reputable name then this reputation can be leveraged in the marketing of the product.
The competition – those who sell same or similar products and services as individual’s organisation are its market competition. Price and product differentiation play an important role in order to competition advantage.
The general public – an organisation has a duty to satisfy the public. Any actions of the company must be considered from the angle of the general public and how they are affected. The public have the power to help the organisation to reach its goals; just as they can also prevent the organisation from achieving the goals as well.
Macro Environment Factors
There are many factors in the macro-environment that will affect the decisions of the Marketing managers of any organisation. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro – change.
Political factors – These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? What extent does it believe in subsidising firms? What is its priorities support? Political factors can impact on many vital areas for business and products to the market.
Economic factors – these include interest rates, taxation changes, economic growth, inflation and exchange rates. For example, higher interest rates may deter investment; a strong currency may make exporting more difficult because it may raise the price in terms of foreign currency; inflation may provoke higher wage demands from employees and raise costs; higher national income growth may boost demand for a firm’s products and these need to be taken into account in pricing decisions.
Social factors – changes in social trends can impact on the demand for a firm’s products and the availability and willingness of individuals to work. In the UK, for example, the population has been ageing and these impact on product and distribution methods.
Technological factors – new technologies are new products and new processes. MP3 players, computer games, online gambling and high definition TVs are all new markets created by technological advances. Online shopping, bar coding and computer aided design are all improvements to the way people respond to the marketing offer as a result of better technology.
Environmental factors – environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider and these impact on packaging choices and fairtrade..
Legal factors – these are related to the legal environment in which firms operate. In recent years in the UK there have been many significant legal changes that have affected firms’ behaviour. The introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firm to recycle are examples of relatively recent laws that affect an organisation’s actions. Legal factors can affect a firm’s cost if new systems and procedures have to be developed and demand if law affects the business relationships..(O. Rokr, 2015)
2.2 Propose segmentation criteria to be used for products in different markets
Segmenting a market refers to the process of dividing a market into smaller sub-groups based on some key defining characteristics of consumers. There are two types of markets: consumer market and organisation market. Consumer market is to sell products or services to individual buyer for its own or family use. However, an organisation/industrial market involves the sale of goods or services between businesses. There are five criteria in consumer market segmentation: behavioural, psychographic, geographic, demographic and geo-demographic; and there four criteria in industrial market segmentation (3macro + 1 micro), they are: Usage, size, location and industry.
Therefore, McDonald should decide to segment a market in a number of ways, such as by geographical region, age, and income. McDonald’s CEO suggested market segmentation based on broad two step classifications of macro-segmentation and micro-segmentation. This model is one the most common methods applied in retail markets today.
Segmentation divides buyers into groups with similar needs and wants and it allows for a better allocation of a firm’s finite resources. Segmenting a market is demanded by the organisation that manufactures goods or provides services in order to help it deal with the group rather than each individual. There are five criteria for Customer market segmentation, namely psychographic, behavioural, geographic, demographic and geo-demographic.
Behavioural segmentation divides the market into groups based on their knowledge, attitudes, uses and responses to the product. Behavioural segments can group consumers in terms of occasions, usage loyalty, benefits sought.
Psychographic segmentation is about marketing strategy in which customers are divided into different group based on lifestyle. The approach defines various demographics that helps marketers understand what influences purchase decisions such as different attitudes and expectations.
Profile segmentation generates accurate and precise customer information that can increase your organisation’s effectiveness. Information may be useful in a large variety of circumstances. For example, someone can use segmentation to define certain customer issues such as characteristics of your target customers, customer lifestyle characteristics, where more of these customers live, and strategies for marketing your products and services.
Examples of common characteristics are: interests, lifestyle, age gender, and the common types of market segmentation include: geographic, demographic psychographic and behavioural. Price can be used in two different segments such as demographic and psychographic. For example, bus and train tickets cost less for young people from 7 to 17 years old (demographic), and they cost more for social class or lifestyle (psychographic). (J.Riley, 2012).
There are four criteria for Industrial market segmentation, namely location, size, usage and industry. Location is about the areas where businesses are, while size determines orders. Industry is a clear indication of specificity while knowing usage helps to merge orders.
Geographic location is equally as feasible for McDonald. It tells McDonald a lot about culture and communication requirements.. Geographic location also relate to culture, language and business attitudes. Benefit segmentation is the product’s economic value to the customer (Hutt & Speh, 2001) is one of the most helpful criteria in Sainsbury’s. It recognises that customers buy the same products for different reasons, and place different values on particular product features.
Segmenting Consumer Market Diagram below
2.3 Choose a targeting strategy for a selected product/service
Targeting strategy means how a business selects potential customers to whom it wishes to sell its products or services. The targeting strategy requires segmenting the market, choosing which segments of the market are appropriate, and determining the products that will be offered in each segment.
In general organisations produce different products and services for certain group of people or customers. Sainsbury’s may follow different targeting strategies like differentiated or selected marketing, niche, concentration marketing and mass, undifferentiated marketing. In niche marketing Sainsbury’s chooses certain group of people as its customers from all people. Economic recession has negative impact on niche marketing
Sainsbury’s conducts its marketing only for its target groups. Generally Sainsbury’s follows mass marketing where it produces goods and services in huge volume and sells goods in reasonable prices and does little profit per product because a huge will turn out huge profit. Sainsbury’s conducts marketing for all segments of the market. In differentiated marketing strategy, Sainsbury’s concerned with targeting each segment with a product with its own marketing mix designed to match the needs of the customers within the segment. In this process Sainsbury’s can increase customer satisfaction and customer loyalty and allow Sainsbury’s to spread risks.
Differentiated marketing creates a special product that is different from other products in order to help a business to gain competitive advantages over its competitors. A company can choose two different strategies: differentiation and differentiation focus.
Focused marketing it is a form of marketing that requires the marketing managers to carefully study their organisation so as mirror its position in the market because without a plan for focused marketing, it would be impossible for any business to grow and profit.
Customised marketing is tailoring a particular product to the specific needs of an individual customer, and it is generally practiced by companies whose products are unique and the product can be designed to suit the special needs of each customer. Since the company is considered to be the final form of target marketing.
For example, McDonald’s uses an undifferentiated targeting strategy since as a Marketer; it does not pay attention to the apparent segment differences that exist within the market and attempts to appeal to the whole market with a single basic product line and marketing strategy. Certain types of items such as chicken and soft drinks can be taken as an example, targets drivers or owners car with the same products. McDonald’s targets people who do not have enough time to spend at eating, such as workers, travellers, students, and tourists and does not make any difference to whoever it sells its standard products to.
2.4: How buyer behaviour influences and affects marketing activities in different buying situations
Organisational marketing activities hugely depend on the buying behaviour of the customers. Customers may become extremely involved or lowly involved with organisational products and services and it depends on tangible and intangible value of the products. Usually there are four types of buying behaviours:
Dissonance buying behaviour – customer are extremely involved here but there are only few products options in the market like floor tiles at affordable prices.
Complex buying behaviour – here customers are greatly involved and they spend a lot of time before buying the products and services. Usually these products are precious and customers ask others or expertise before buying products. These products have major impact on customers; for example buying gold thus influencing the product offer..
Habitual buying behaviour – these customers have low involvement and there are too much of same quality products available in the market but those products are very essential for our everyday life products and prices like chicken, fish, tomato, breads or drinks.
Variety seeking behaviour – these customers have low involvements and there are too much of options for same type of product. Customer may check those products at different channels thus affecting place. For example, there are lots of fragrances in the market and people may buy different fragrances in different times only for variety. Manufacturers have to offer different offers to customers to sell their product and to attain competitiveness.
(Johny, 2011). Consumer buying situation – consumers are who buy the product for personnel needs. McDonald delivered daily used different products to attract the customers with suitable price. The decision-making process by which formal organisations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers (Kotler & Armstrong, 1989). Buying behaviour thus, is made up of the internal and external factors that show why consumers buy and use certain products or services and Organisations then respond to it with their products and services. This type of behaviour can affect the marketing strategy that business employs to promote its products and its mix, and when this behaviour is analysed, it might not have originally used. Organisations then create a marketing mix suited to the different types of buying behaviour and to customers with different needs and wants and related to cultural, social, psychological and personal factor. For example McDonalds in Islamic countries, they do not use pig meat in their recipes. (Crystal Vogt, 2015)
2.5: Explain Positioning and discuss what changes when Marketers propose a new positioning for a given product/service.
Positioning is the strategy of an organisation for conveying what makes its company or products excellent, different or better than those offered by competitors. So differentiation is essentially the way the organisation carries out its positioning by promotion distinct attributes or benefits that the organisation offers. Positioning can be by image repositioning, this means no change to product but promo used to change image. Product repositioning, there will be modification to product and brand. Intangible repositioning can be when marketers target a different segment with same product. Tangible repositioning means that the marketer changes both product and market. (Lynn Lauren, 2015)
Positioning strategies involves the various ways and means that marketers utilise to develop an image on the firm, its products or services in the mind of their customers or consumers. Product positioning is a marketing technique intended to present products in the best possible light to different target audiences. Market segmentation and product position is correlated and Sainsbury’s establishes product positioning according to the product segmentation. In positioning, Sainsbury’s creates message concerning its products and deliver the message to target customer through different mediums such as leaflet, magazines, television, and radio. The message includes manipulation and symbol and the success of product positioning largely depends on the technical experts, expert advice, fast service, creative ideas, high quality, caring attitudes, immediate results, low price and emotional supports. (Lynn Lauren, 2015)
The marketers can propose and change positioning strategies for a market segment. The first step in changing their positioning strategies is market research and the use of management tool called SWOT will help them to identify their strengths, weaknesses, opportunities, and threats.
Repositioning is the changing of brand image to hold a new position in the eyes of customers. This means to change your previous position (low quality) to the high quality where the company is now in the customer mind. For example KCF was called Fried Chicken and has repositioning its position by giving a new name. Also, another reason to repositioning a company could be related to the price. For example, a premium brand of shampoo sold at relatively high price with advertising that emphasises its superior performance may need to be repositioned as customers become more sensitive about prices. Sometimes the original positioning of a product does not stimulate the interest of consumers. Other times, the original positioning was successful, but the target market of that position has become saturated and companies need to find new ways to feed growth. In those instances, repositioning may be the solution. Repositioning does not need to be a dramatic overhaul of a product. It certainly can be, like when Dr. Pepper gave Diet Dr. Pepper a new label and new name – Dr Pepper Ten – and advertised it s “mean’s drink,” If someone saw the advertisements for Dr Pepper Ten, there was no doubt in its mind that it was positioned as a low calorie soda that men can be comfortable drinking. When re-positioning, marketers should make sure that they de-programme customer perception of old positioning and re-programme the new position. For example, in the 1980s, Hyundai started selling its vehicles in the United States. Its first model, the Excel was positioned as a low cost solution for budget – conscious buyers. To help ease concerns that low price meant cheap quality, Hyundai offered the longest warranties in the auto industry at all time. Its original position was successful, and sales in the United States grew quickly, but the marketing leaders at Hyundai did not want to be known as the cheap car company forever. (Douglas Hawks, 2015).
Task 3
3.1 Explain how products are developed to sustain competitive advantage
Currently companies are using different techniques to achieve competitive advantage. For example Superdrug is competing with Boots, ASDA, Tesco Body Shop, Sainsbury’s, Morrison, Debenhams and Marks & Spencer. Products development is one of the key strategies to get sustainable competitive advantage. Organisation can develop its existing products or it can introduce new products to customers. Product development has physical and insubstantial benefits. Product development conducted in two parallel paths: one path is related to market research and analysis and another path is related to idea generation, product design and detail engineering. It is very important to conduct product development frequently otherwise it is really tough to get competitiveness. Product development has some steps: Idea screening, concept development and testing, business analysis, beta testing and market testing, technical implementation, commercialisation, generating ideas which is often called as fuzzy front end of the product development process, and new product pricing. Sainsbury’s follows the above mentioned process in its product development. Sometimes Sainsbury’s conducts several steps at a time to produce its own products and services.(Johny, 2011)
3.2 Explain how distribution is arranged to provide customer convenience
Distribution plays a crucial role in enhancing the convenience of the customers. The distribution system of a company can appear as a major competency for the company. There are four elements of marketing mix including product, price, promotion and place. The distribution comes under the place category and the companies develop proper distribution system because accessibility of the customers enhances the potential sales for a company. For example, is Coca Cola Company does not outsource its distribution services and Coca Cola bottles would have been available only from the factories then customers might not have been willing to get them. It is more convenient for the customers to get Coca Cola drinks from a nearby retailer as compared to getting it from a wholesaler. Therefore, distribution can become a massive strength or a weakness for a company. (A. Jhon. 2010)
Three types of distribution channels can be used to improve customer convenience. Boots uses two types of distribution channels. First of all it produces its own products and service which it sells to customers directly. It has its own brand products which it sells to customers directly. It uses second distribution channel as well where they act as a retailer. It buys products from different manufactures and sells products to customers. In general Boots sells quality products of different brands like Calvin Klein, Chanel, Dior, Diesel, Boss, Gucci, Jean Paul Gaultier, Marc Jacobs, Jimmy Choo, Thierry Mugler and Tom Ford.
3.3 Explain how prices are set to reflect an organisation’s objectives and market conditions
Prices are always established with an organisation’s objectives or goals and market conditions in mind. Price is not just a number on a tag hanging on a product, but pricing is an important marketing strategy in all manners. In order to properly price the product, the entire business and marketing strategies are required. The customer can afford the products, suitable sales channels, product cost, competitors and expected profit.
The price of a product will need to be worth the value of the product. Management decides the marketing strategy, sets the organisational goals and objectives, and decides on what product lines and services are worth pursuing. For this reason, prices are always subject to the character and beliefs of those who lead the organisation. Companies examine the market and look at the way certain products are performing. This is how the companies determine if a product is going to be included in their own product lines or services that they offer.
Businesses that are well established with easily recognisable names are often the ones to set the standard prices within the market whatever the competition leels. Businesses that are not as recognisable and cannot as easily gain new customers have to set lower prices in order to attract people to purchase their products. If businesses wish to increase sales and win customers from competitors, they have to produce good products and price their items lower than the competitors. This is just one of the many ways in which prices are set by an organisation’s objectives and market conditions. (C. Sephton, 2015)
Prices are established with an organisation’s objectives or goals and market conditions in mind. Pricing strategies are of different types like penetration pricing, focused based pricing, price skimming, product life cycle and discount pricing. Price skimming – these organisations tend to keep price high. The prices fall following the normal laws of demand and supply. Premium pricing – the organisation provides quality products with higher price. Prices are charged as extra for the quality supplied by the organisation. This is good when organisation enter a new market. Penetration pricing – organisation keeps the price low than competitors to penetrate the market. Here organisation arises awareness concerning products among customers and persuades people to try the products. Economy pricing – the quality of the products and services are low; prices are kept low too. This pricing is also called minimum pricing. Boots follows two pricing strategies like premium and penetration pricing strategy. When they introduce new products to customers generally they follow premium pricing strategy. The product and service quality of Boots is high and the costs of its products are relatively lower than other competitors. To be able to do that, Boots controls the cost of raw materials, components, labour and some other inputs. Selling quality goods and providing quality services to customers with reasonable price are goals and objective of Boots, Its pricing strategy change with market condition.(Johny, 2011)
3.4 How promotional activity is integrated to achieve marketing objectives
Promotional activities are integrated to make the connections that turn into leads and sales, so the way it promotes its brand is important. Marketing objectives can only be met through reaching out to its target audience and conveying its brand message. Sainsbury’s must be clear about exactly what it is trying to achieve through the promotion. The main aim of any promotion is to obtain and retain customers. However, there is a number of other objectives, some or all of which any successful campaign must fulfil.
Promotion is one of the elements of marketing mix and there are different kinds of promotional activities like advertising, public relations, personal selling and sales promotions. If marketing department wants to achieve its marketing objectives it should integrate its promotional activities. Other promotional strategies are coordination, repetition, consistency and reach. Marketing spends money in advertising to reach its messages to customers. Most common advertising mediums are television, radio, websites, city transports, magazines, newspapers, and social media. Personal selling is another effective promotional activity and some common forms of personal selling are individual gathering, correspondence, telemarketing and message. Sainsbury’s sometimes provide different sales promotions to customers and Sainsbury’s offers some promotions like the Sainsbury’s advantage card, the Boots bonus machine, double and triple point’s weekends and other deals.(Johny, 2011)
3.5 Analyse the additional elements of the extended marketing mix
The extended marketing mix is a combination of elements that make up a campaign to sell a product. It is an expansion on the original marketing mix of product, placement, price, and promotion, adding additional factors that can influence the success of a campaign. Companies preparing to launch new campaigns need to think about how to organise them, given the product, the company’s reputation, and the market. The first four elements of marketing mix are product, price, place, and promotion. Later another three elements are added: people, process and physical evidence.
People – power of people is very powerful in all markets, do not overlook it. People can affect and influence company products in any situations and channels. If a business applies all other Ps without considering about people, then its sales could not be really maximised.
Physical Evidence – this is another great P which extended from the traditional 4Ps in the past. If the company can effectively roar as many as satisfactions to all potential customers and clients in the market, the more long-term sales revenue it can make in the same market.
Process – If every other Ps is applied to a business’s product but its process was weak, the failures are waiting ahead. Process is a key to fully succeed in promoting its products in all markets. The company must have a good or at least suitable process carefully planned.
(N. Kokemuller, 2015).
4.1 Plan marketing mixes for two different segments in consumer markets
Considering two consumer segments for Sainsbury i.e. segment A and B where segment A represent the retail consumers who are in age range from 19 years to 60 years, having average to high income range, discount seeking and shopping for their daily needs from the Sainsbury. Segment B for Sainsbury is wholesale consumers such as small shopkeepers, offices and other wholesale consumers who are buying in bulk from the Sainsbury. The marketing mix for the two consumer segments can be given as under:
| Segment A (Retail consumers) | Segment B (Wholesale consumers) |
| Product: Retail consumers would be looking for the wide range of products which are used in the daily needs. Consumers would seek variety, would look for discount, goods with cheaper price and would be attracted towards the new experiments in the products (or may try new products as well). | Product: Segment B consumers would look for the standardized products at pre-decided prices and Sainsbury may offer products to these consumers at lower price as compared to the retail consumers as Sainsbury may have corporate tie-up with consumers. |
| Price: Pricing strategy adopted would be skimming so as to capture the market segment. The proposed price is £35. Special discounts would be offered to attract the consumers (Kent, 2013). Bundle pricing strategy would be adopted to enhance the sales volume. | Price: Pricing strategy used would be corporate discount wherein high volume discount would be applicable in order to sell high volume of products to the wholesale consumers by Sainsbury. The proposed price is £65. |
| Place: Sainsbury would sell through the retail stores only while opening up online portal may also help depending upon consumer adoption in the retail market; however adoption for online portal would be low in this industry. | Place: Along with the physical selling place online portal can be one of the efficient ways in this segment of consumers. Adoption for online channel would be much higher in wholesale consumer segment as compared to the retail consumers. |
| Promotion: Promotion can be done through mass media channels such as TV, magazines, newspapers and outdoor media channels. | Promotion: Promotion for the wholesale consumers can be done through the business magazines, personal selling and through mass media channels as well. |
Table above shows marketing mix for the two consumer segments of Sainsbury
Shoes (Sales)
| A | B | |
| Areas | Europe (Urban) UK | Africa (Rural) Gambia |
| Product | Shoes high quality | Shoes low quality |
| Price | High quality (£500) | Lower quality (£200) |
| Place | Special magazine, sponsorship, and Online | Shops, and Village markets |
| Promotion | High streets, boutiques, and Online | Local newspaper |
4.2 Illustrate differences in marketing products and services to businesses rather than consumers
There are lot of similarities and differences in marketing products and services to the consumers and businesses which can be given as under:
Level of need recognition: There is high degree of need recognition process followed for the individual as well as business organizations. Need recognition process adopted by the individuals would include the steps such as extensive search, limited search and routine search. Limited search would be done when consumer is buying a product with the known brand name such as Sainsbury and in such situations there would be moderate amount of time spent in seeking information. In extensive search, consumer would buy product from unfamiliar product category and substantial information and time is taking in decision making. In routine buying consumer would buy a brand which he is buying regularly and this process would take very less time in decision making process.
Similar to this, need recognition among organizations would be done through three steps which are new task, modified rebuy and straight rebuy. Similar, to the routine search straight rebuy would work wherein organizations are purchasing the same brand and would not look for much information in this case (Gregson, 2008). Similar to the limited search there would be modified rebuy wherein organizations would like to purchase the same brand with some changes in it and would take average time in decision making. While similar to the extensive research, business organizations would go for wide range of information while going for the new task.
Level of influences: There is similarity in the level of influences for the individuals as well as organizations. In case of individual buyers initiator would be customer himself, influencer can be someone from friend or family, decider would be customer himself and the role of buyer and user would also be made through the consumer (Philip & Gary, 2011). In case of the organizational buying the gatekeeper, influencer, decider, buyer and user can be all different persons and marketers need to take care that the decision making unit is impacted in order to sell the products. Hence for marketers it is difficult to consider organizational decision making unit as these are complex units as compared to the individual consumers wherein decision maker and users are the same person.
Level of decision making: The main difference in the marketing for individual and organizations would be in terms of level of decision making wherein for individuals decision making would involve five steps which are need recognition, information search, evaluation, purchase and post purchase behaviour. Level of decision making would be quite difficult for organizations wherein there are added steps in the decision making process such as problem recognition, general need description, defining specifications, search for qualified sources, proposal solicitation, closing and evaluation of offers, supplier selection, ordering routine, performance evaluation and review.
There is a major difference between the consumer and business organizations buying behaviour and some of the major differences can be outlined as under:
- The buying behaviour of the consumers would be more oriented towards personal needs while for businesses the buying behaviour would be rationale
- Business organizations would purchase in bulk as compared to the consumers who are looking for small quantity of the goods for personal usage
- Organizations would adopt structured method for the purchase while consumers may adopt unstructured method as well
- Organizations make lengthy negotiation for the purchase unlike consumers
- Requirements are given in detail for the organizations and these are pre-decided while for consumers requirement may change at the time of purchase also
- Organizational purchase would be restricted under organizational policies as compared to the consumer purchase
4.3 Show how and why international marketing differs from domestic marketing
Domestic marketing and International marketing are same when it comes to the fundamental principle of marketing. Marketing is an integral part of any business that refers to plans and policies adopted by any individual or organisation to reach out to its potential customers. A web definition defines marketing as a process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational goals. Marketing is a ploy that is used to attract, satisfy and retain customers. Whether done at local level or at the global level, the fundamental concepts of marketing remain the same. However, there is significant difference between domestic marketing and international and these are:
Scope – the scope of domestic is limited and will eventually dry up. On the other hand, international marketing has endless opportunities and scope.
Benefits – as is obvious, the benefits in domestic marketing are less than in international marketing. In addition, there is an added incentive of foreign currency that is important from the point of view of the home country as well.
Sharing of technology – domestic marketing is limited in the use of technology whereas international marketing allows use and sharing of latest technologies.
Political relations – domestic marketing has nothing to do with political relations whereas international marketing leads to improvement in political relations between countries and also increased level of cooperation as a result.
Barriers – In domestic marketing there are no barriers but in international marketing there are many barriers such as cross cultural differences, language, currency, traditions and customs. (Andrew, 2011).
A business firstly should gain full understanding of markets by researching consumer needs wants and demand:
Needs – are basic human requirement such as food, air, clothing, shelter and education.
Wants – needs become wants when they are directed to specific objects that might satisfy the need but shaped by society culture.
Demands – are wants for specific product backed by ability to pay.
There are some differences between international marketing and domestic marketing and these are:
Scope – international marketing has more scope than domestic marketing.
Obstructions – international marketing has to face more obstructions than local marketing. They have to compete with other manufacturers in overseas and to follow the rules and regulations of operating countries.
Profits – generally profit margin of international marketing is higher than domestic marketing.
Offering of engineering – both international marketing and domestic marketing marketing use modern innovation but international marketing use most recent innovations.
Political relations – domestic marketing has nothing to do with political relations but international marketing organisation should have good political relation.
Conclusion
Marketing principles are necessarily based on marketing generalisations but also definable through synthetic means based on marketing logic. Marketing managers must devise an effective mix of product, price, place, and position to create the formula that is best suitable for the company’s goods and services.
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