Nuances of Marketing Process - Assignment Example

MARKETING PROCESS Marketing Process is a process of communicating and providing products and services to the consumers in a way that it guarantees satisfaction to both the provider and the consumer. In this essay, we will briefly look into some key aspects of marketing process such as marketing mix, PEST factors, segmentation etc. with reference to British Airways. British Airways is the UK's largest international scheduled airline, and flying to over 550 destinations. The British Airways group consists of British Airways Plc and a number of subsidiary companies including British Airways Holidays Limited and BA Connect Ltd. British Airways have many a first to its credit - the first airline to offer jet passenger services and the first to operate weather-beating auto landings. It is also the first to offer supersonic passenger services and the first to offer fully-flat beds. (British Airways, n.d.) Long recognised for its quality of service, BA is the second largest airline in Europe. In 2006. it was provided the Airline of the Year prize at the Skytrax World Airline Awards, which took into account factors such as product services, staff assistance and safety. The main principle behind BA’s marketing success has been the innovations in comfort and customer satisfaction. British Airways have focused on building relationships with their clients and providing more than 100% satisfaction to them. For example in 2000, British Airways introduced 'Club World' which offered a horizontal bed in business class. Market research had identified that customers wanted the opportunity to sleep when they were travelling in business class. Following product development the new flat bed seat was introduced on the London to New York Route in April 2000. Following the introduction of the 'Club World' bed in April 2000, British Airways Share of the market steadily increased. Marketing : Marketing can be defined as a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in such a way that it benefits both the organization and its stakeholders. (AMA, 2004)    Another way of defining it is as a social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others (Kotler, 1999) Adcock used the four Ps to define marketing as “The right product, in the right place, at the right time, at the right price”. (2001) Another definition which matches capabilities with the needs is that marketing is all about using the resources of an organization in such a way that they meet the changing needs of the customer in the best possible manner. And based on social and economic aspects of the marketing , we can define Marketing as a process in which the society encourages formation of distributive systems composed of participants who, create the flows which resolve market separations and result in exchange and consumption to supply its consumption needs. (Bartles, 1976). Marketing Objectives: They are the objectives which when met leads to sales. They should be clear and measurable and should have a stated time frame for achievement. They basically set out what the business is trying to achieve and can be set at two levels --- Corporate or Functional level. Both corporate and functional objectives need to conform to the commonly used SMART criteria. The SMART criteria states that the objective should be: Specific, Measurable, Achievable, Relevant and Time Bound thus based on this criteria some of the objectives of BA can be to increase customer base by 20 percent in one year, Be one of the largest passenger carrying airline in business class or be the first airline to be considered by customers when thinking of transatlantic flights. This can be done by increasing consumer awareness through advertisements or direct mailings or emails regarding the facilities available to business class passengers during transatlantic flights or by providing user friendly options such as e ticketing to customers for booking their tickets at their own convenience. British Airways has appointed e-Dialog as its e-mail marketing service provider for customer communications in the UK. This will help them in supporting its e-mail communications to Executive Club members and registered customers on its Web site, www.ba.com. This reflects the growing importance of direct electronic customer communication as part of the airline’s marketing communications strategy. Moreover, they have introduced e ticketing as a means of providing hassle free tickets to customers. British Airways is the first IATA carrier to offer e-ticketing in the United States through Worldspan - a reservation, ticketing and office automation system. Besides e-ticketing, they are also revalidating BA flights electronically and are also able to carry out exchange or refund transactions. (britishairways, n.d.) Sales and Marketing: Using a sound Marketing strategy to reach out and persuade prospects in using the product is the core theme of marketing. The sales process is what is actually done to get a customer. Both are necessities to the success of a business. By strategically combining both efforts a successful amount of business growth can be assured. However, by the same token if the efforts are unbalanced it can diminish the growth prospects. The marketing prepares the prospect for the sales. It consists of advertising, public relations, brand marketing, viral marketing, and direct mail. British Airways uses all kinds of marketing options to showcase itself as the pioneer in providing fully flat beds in business class. Its club world advertisement does just that. The sales process consists of interpersonal interaction. It is often done by a one-on-one meeting, cold calls, and networking. The e dialog system of BA helps in keeping contact with its registered consumers. PEST Factors: An organization should consider its environment before beginning the marketing process. The environmental analysis should be continuous and feed all aspects of planning. The organization's marketing environment is made up of the internal environment e.g. staff , office technology, wages etc., the micro-environment e.g. external customers, agents and distributors, suppliers, competitors, etc. and the macro-environment e.g. Political (and legal) forces, Economic forces, Socio-cultural forces, and Technological forces. These are known as PEST factors. Political Factors such as the stability of political environment, the government policies and laws on the economy etc have a huge influence upon the regulation of businesses. Economic Factors include Interest rates, the level of inflation, employment level per capita, Gross Domestic Product (GDP) per capita and these should be considered while making marketing plans. The Socio-cultural Factors include the dominant religion, the attitudes to foreign products and services, language impact on the diffusion of products onto markets. These are especially useful when moving to international markets. Technological Factors are important since technology helps innovation which is vital for competitive advantage. For example : British Airways has effectively used technological innovations to improve its profit margins.Thus for BA, technological factors such as new flat beds and e tickets , social factors such as the educational levels of the consumers who are thus able to understand and use new features such as e tickets are important for its success. The Micro Environmental Factors: These include Customers, Employees, Suppliers, Media, and competitors. By employing the correct staff and keeping these staff motivated is one of the most important part of the strategic planning process. Not only employing but providing the right training and development plays an essential role particularly in service sector marketing to gain a competitive edge. British Airways prides itself in being an airline with the most culturally diverse employee base to cater to the particular needs of their diverse customer base. Equally important is to keep a tab on competitors. Competitor anlaysis and monitoring is crucial if an organisation is to maintain its position within the market. Based on the above factors, the stakeholders objectives for the BA can be the maximization of profits for the BA, Easy, comfortable and less expensive journeys for the consumers, a good remuneration and growth policies for the employees so as to attract and retain best talent and keep employee motivation at high levels. Market Segmentation: This is the identification and segregation of buyers within a market who share similar needs and who demonstrate similar buyer behavior. The segmentation is done based on : geography - such as where in the world was the product bought, psychographics - such as lifestyle or beliefs, socio-cultural factors - such as class, demography - such as age, sex, and so on. It is necessary to evaluate each segment based upon potential business success. Thus by segmenting the market the business is acknowledging that different 'types' of buyers may require different products or marketing approaches / marketing mixes. Targeting: After the market has been separated into its segments, the segments or the segment is targeted for marketing. Resources and effort will be targeted at the identified segment to get maximum profits. This can be done by either targeting a single product offering at a single segment in a market or by using a single product at all segments i.e. the whole market. This is a typical case of 'mass marketing'. An example of this is the approach taken by budget airlines. The third approach is a multi-segment approach. Here a marketer will target a variety of different segments with a series of differentiated products. This is typical in the motor industry. BA has been focussing on – good service at a higher price – There is the market segment that particularly values this offer. BA thus plays to its strengths – comfort, luxury and high brand values to an audience in a context that needs to be sure that it will fly to city center airports on a recognized schedule – and is willing to pay for these benefits. Marketing Mix: The term was coined by Neil H. Borden in his article The Concept of the Marketing Mix. (Borden, 1965) The basic elements of marketing mix are price, place, product, and promotion. These are also known as the Four Ps of marketing. Now these have been increased to Seven P's, to include physical evidence(such as uniforms, facilities, or livery) and process (i.e. the whole customer experience). Price: Pricing of a product is one of the most important and tricky element of the marketing mix. Skim pricing or premium pricing is used to maximize its profits. This helps to recover expensive development costs quickly. For fast moving consumable goods (fmcg's) like colas, penetration pricing is usually used. To look for the large share of the market, it goes for a small profit on each item hoping to make big profits in the long run. The simplest method of all is cost-plus pricing , where a firm adds a profit mark-up to the unit cost. Yet another type is the Psychological Pricing. This approach is used to tap the emotional IQ of the consumer. For example 'price point perspective' 99 cents not one dollar. The idea is that the item that they bought on sale is actually the real price of the product. Companies usually set an artificially higher price, then lower it down for substantial savings. Place : This is also known as channel, distribution, or intermediary. This is the actual process through which goods or services are moved from the manufacturer or service provider to the user or consumer. A firm has to find the most cost-effective way to get the product to the consumer. Direct marketing through the Internet has become popular, because the consumer can shop from home. This helps the firm to cut costs on the middleman and make more profit. BA has started using e tickets to cut its cost of middlemen. It is important to use the right distribution channels such as direct or indirect channels, Single or multiple channels. The Intermediaries such as Wholesalers break down 'bulk' into smaller packages for resale by a retailer and they take ownership or 'title' to goods whereas agents do not. They provide storage facilities. On the other hand, intermediaries such as Agents are used in international markets. They secure an order for a producer and take a commission. They do not store or take ownership. This approach is used where goods need to get into a market soon after the order is placed e.g. foodstuffs). Intermediaries such as Retailers have a much stronger personal relationship with the consumer and will hold several other brands and products. A consumer will expect to be exposed to many products. Product: It is a good or a service. It is the tangible, physical entity that is bought or sold. In service terms, it is the service provided by the service provider to the consumer. Promotion: This includes the tools used by the marketer for marketing communication. Advertising is the most widely used form of promotion, and can be through the media of TV, radio, journals, cinema or outdoors (billboards, posters). The specific market segments that are being targeted will affect the types of media chosen. Similarly, the cost plays an important role in deciding which media outlet is to be used. Services differ from products in some important ways: They are intangible, are consumed at the same time as they are produced, are transient and vary from one use to the next. Thus Booms and Bitner (1981) introduced 3 more 'P's: People, Processes and Physical evidence to include services industry more effectively. For services sector, The 4 Ps can be replaced by the 4'C's (Lauterborn, 1990) : Product becomes Customer solutions - the way that a product meets consumer needs, Promotion becomes Communication - reflecting the potential for two-way interactions between an organisation and its customers, Price becomes Cost - the overall balance of costs and benefits to the consumer And Place becomes Convenience - a focus on how and where the consumer would like to buy. Physical Evidence: Physical Evidence is the material part of a service. It is the evidence that the service has been provided by the user. People: People providing the services and people consuming the services are the important part of any marketing experience. Services are produced and consumed at the same moment. The services are also customized to meet the 'individual needs' of the person consuming it. Process : Process is another element of the extended marketing mix, or 7P's.The process is nothing but a means to achieve an outcome. Thus British airways uses brand values and its image as a very good service provider. It has used internet as an e ticketing channel effectively. It is technology driven and constantly tries to innovate to provide better staff services and experience to its customers. BIBLIOGRAPHY: 1. Adcock, D., Halborg , Ross, C. , 2001, Marketing Principles & Practice, 4th edition Financial Times / Pearson Education 2. American Marketing Association Board of Directors. August, 2004. 3. Bartels, R., 1976, The History of Marketing Thought, 2 ed 4. Booms, B.H. and Bitner, M.J. ,1981, Marketing strategies and organization structures for service firms, in Marketing of Services, J. Donnelly and W.R. George (eds), American Marketing Association 5. Kotler P., Armstrong G., Saunders J., Wong V.,1999, Principles of Marketing, Prentice Hall Europe. 6. Lauterborn, R.,1990, New marketing litany:4Ps passe; 4Cs take over, Advertising Age, Oct. 1:26 7. McCarthy, J., 1975, Basic Marketing: a managerial approach, Homewood, IL . Read More