The Fundamental Marketing Issues - Essay Example

The Fundamental Marketing Issues Student’s Name Institution Introduction In the contemporary business world, marketing has developed into a complicated business activity. Marketing has become a crucial element in many organizations across the globe. The ever changing consumer needs have forced organizations to place a greater emphasis on efficient marketing teams. The marketing concept is thought to have germinated in the US during the nineteenth century. Prominent scholars, among them Adam Smith, were the founding fathers of the marketing concept. The concept of marketing involves determining consumer needs, stimulating sales and distributing products or service at a profit. According to Kotler et.al. (2012), marketing is a set of activities aimed at enhancing exchanges. Over time, marketing concept has undergone significant changes. Companies throughout the globe have come face to face with the new market realities namely; the realization that consumers will not change. Thus, what is varying over time is the manner in which organizations transact with the clients. For instance, the traditional marketing concept involved mass production, mass distribution and mass consumption. With the advent of information technology and the internet in particular, attention has shifted to delivering superior goods to delight customers. To shed more light on the fundamental issues in marketing, this report seeks to study customer needs, demand, product and market identified for the organization. The report will also explore the major competitive issues facing organizations. Further, it will study the segmenting, targeting and positioning issues relating to an organization. Customers’ needs, wants and demand The determination of clients needs is the critical aspect of any marketing activity. A need occurs each time a client believes that a number of his fundamental requirements are not fulfilled. Normally, customers have several options of fulfilling their needs. A chosen option is termed as a want. Thus, wants are desired aspects that satisfy ones needs. A demand usually arises when a customer desire to purchase a given quantity of goods at a certain period of time. In today’s highly competitive world, companies are trying to build and maintain profitable ties with their customers by delivering superior goods. Clients are the lifeblood of an organization, and therefore, organizations should deliver quality products that meet clients needs better than that of the rivals. Thus, quantity has been replaced by quality. Marketers can gather feedback, search out needs, and implement changes that can enhance an organization’s effectiveness through daily interaction. Today, many organizations have opted for customer retention, as opposed to acquiring new customers. Listening to the needs of customers enable an organization to become customer centric (Kotler et. al, 2012). Research shows that successful organizations care about the needs of their clients. Blazey (2009), in his studies, suggested that successful organizations pay attention to what is convenient and expedient to customers. These organizations show respect to their customers by understanding their unique needs. In the face of global competition, organizations need to manage relationships with their clients. The key for building profitable ties is delivering value for goods. Customer relationship management (CRM) plays crucial roles of enabling corporations earn advanced revenue, enhance customer perceived value, and attract new clients. Organizational leaders throughout the world have embraced information technology in order to create effective CRM strategies. In the digital era, marketers are using information technology to deliver services via the internet. With this regard, the use of the internet has transformed customer relationship management from face- to- face to over the internet. The e-service concept has played a crucial role of acquiring and retaining customers. The major competitive issues facing the firm The intensity of competition among businesses or organizations has increased tremendously over the last few decades following the rise in numbers of businesses that offer the same goods or services to consumers. Faced with stiff competition, firms are looking for ways to outshine their competitors through what is referred to as a competitive advantage. The high competition in the global marketplace is compelling businesses to seek out competitive advantages over their competitors through maximizing relationships with business stakeholders; customers, employees, shareholders, and partners, optimizing internal operations and eliminating inefficiencies. Competitive advantage traditionally emanated from quality of products or services, level of customer support, innovation, distribution network, and convenience. Consequently, through reduced prices or products that justified the higher prices charged, competitive advantage gave the customers greater value for their money. Organizations can attain sustainable competitive advantage over their competitors by offering the same products or services but at a lower price (cost leadership approach), or focus approach that is concentrating on the market niche or differentiation approach that involves offering of superior products to consumers but at the same cost offered by competitors (Blazey, 2009). In the recent years, there has been a gradual change from the previously held view that only tangible organization assets could promote sustainability and profitability to a more acceptable view that sustainability and profitability can also result from intangible resources. In fact, sustainability and profitability of an organization are dependent on the degree of an organization’s competitive advantage over its competitors. Intangible resources such as knowledge allow organizations to gain competitive advantages over their competitors because such organizations are able to add value to its products while at the same time, expand their markets. Organizations that intend to achieve competitive advantage over the others must create new knowledge and disseminate the same to all the stakeholders across all levels. In the ever changing and complex business environments where innovations keep rising, knowledge management has become a central strategic task facing managers. In the era of communication society, every organization is striving to respond to the challenges, as well as, opportunities presented by the information revolution. The ways organizations do their business have changed as a result of the dramatic decline in the cost of gathering, processing, and conveying information. This has presented managers and employees with opportunities to change the way they operate their business and achieve sustainable competitive advantage in the process. In their argument Roos, Bainbridge and Jacobsen (2001), note that the potential resources for attaining a sustainable advantage in the face of global economic crises are physical, human, relational, financial, organizational and informational. Firms that are considered to have achieved a sustainable competitive advantage are those that are in the phase of implementing a value adding strategy not currently being implemented elsewhere by competitors or potential competitors coupled with the inability of these competitors to get the benefits of the strategy. In creating competitive advantage, Snyman and Kruger (2004) argue that the organization must have superior resources and superior skills than their competitors. Thus, for resources to be able to create sustainable competitive advantage, it must have these characteristics: scarce, value adding, inability to be replaced, and inability to be copied. Again, for a firm to attain and sustain competitive advantage, the efforts of its competitors to copy or replicate that advantage must have failed. One such strategy that firms use to ensure that they attain a competitive edge is through organizational learning, which enables firms to develop intellectual capital; social capital, human capital, and organizational capabilities that are difficult to copy. Segmenting, targeting and positioning issues relating to organizations A single product does not always appeal to the customers’ requirements. Therefore, marketers categorize customers depending on their characteristics, as well as, individual needs. Marketers should know the needs and wants of their clients in order to offer goods and services that meet their requirements. The task of identifying customer’s needs and wants is quite challenging because different customers have various needs and wants. With this regard, marketers must segregate the buyer’s market into different groups with related needs and wants. The process of dividing the consumer market into different groups with similar requirements is referred to as market segmentation. The potential segmentation variables include such aspects as level of income, marital status, educational level, age, sex among others. For instance, a hotelier can segment his market into the following subsegments; sports fans, overseas travelers, local travelers, conference delegates among others with each sub-segment having different characteristics and needs (Blazey, 2009). The next step requires the organization to decide which market segment’s requirements it can adequately meet. This process of determining the segments to satisfy is known as target marketing (Kotler et. al. 2012). An organization must select the best marketing mix to adapt. A marketing mix comprises all aspects that the organization can do to influence the demand for its goods and services. The variables of the marketing mix include price, place, promotion and product. A marketing mix is considered to be effective if it enables an organization to meet its objectives. A product refers to anything that is offered to the market in order to satisfy a need or want (Kotler et.al, 2012). Products are divided into two broad categories depending on clients’ needs and wants, that is, consumer products and industrial products. Consumer products relate to those goods and services purchased by customers for consumption. Industrial products, on the other hand, are those commodities purchased for further processing. Marketers should make crucial product decisions, which include: product attributes, product line and product mix. Product attributes include such aspects as product design, quality and features. Product quality refers to the ability of a good or service to meet the clients’ expectations. Product features are the external aspects of a product that differentiate it from other related products. Organizations should carry out consumer research, in order to understand the designs that meet clients’ expectations. Product style and design usually describe the customer’s perception based on a product’s appearance. An excellent design enhances a product’s value (Kotler et.al. 2012). Product line refers to the process of combining closely related products, and marketing them using the same outlets. Marketers should increase profits by dropping some items if a product line is lengthy. Also, they can stretch a product line in order to penetrate a new market held by rivals. Marketers should also make product branding, packaging and labeling decisions. These decisions enable them to promote and describe the products (Snyman & Kruger, 2004). Pricing decisions refer to considerations made when setting prices for goods and services. Marketers need to set prices that will retain old clients, and also, attract new ones. An organization’s marketing objectives could be profit maximization, survival, product quality leadership or market share dominance. Firms normally set survival as their marketing goal if they are bothered by intense competition in the market. To keep the plan going in this case, companies charge lower prices for goods and services with an aim of increasing demand. An organization with profit maximization as its marketing objective normally set higher prices, in order to maximize on the current revenue. An organization that intends to attain market share leadership usually sets prices as low as possible. An example of such a company is Coca-cola. Companies that intend to achieve product quality leadership normally set high prices to cover the promotion and research and development expenses (Kotler et.al, 2012). Product promotion is aimed at informing the potential and prospective clients about the product. Marketers can use the following promotional tools to inform the customers about the product; advertising, public relations, personal selling and sales promotion. In the contemporary business world, advertising is the most commonly used promotional tools. Marketers normally identify a medium where the message is used for public relations, publicity, product placement and sales promotion. The main aim of advertising is to persuade potential clients to buy more of a particular good or service. Some of the advertisement media used in today’s world include radio, television, newspapers, the internet, billboards among others. With the advent of information technology, marketers are using the internet to attract and retain clients. The place aspect requires a company to set up its outlets in areas with a large number of potential customers. In addition, the location should be easily accessible (Kotler et.al, 2012). Conclusion This report has shown that companies throughout the world should strive to meet customers’ expectations. Developments in the global markets and intense competition in the market place have forced companies to take a serious look at the market imperative. Organizations should, therefore, anticipate rival’s actions, in order to achieve a sustainable competitive advantage. Organizations should also carry out a SWOT analysis, before commencing its operations. Strength, weaknesses, opportunities and threats analysis is crucial in determining the manner in which the business survives in the face of ever dynamic business environment. References Blazey, M. (2009). Insights to Performance Excellence 2009-2010: An Inside Look at the 2009-2010 Baldrige Award Criteria. Wisconsin: Quality Press. Kotler, P. et.al. (2012). Marketing. Australia: Pearson Australia. Roos, G, Bainbridge, A, and Jacobsen, K. (2001) “Intellectual Capital Analysis as a Strategic Too,” Strategy and Leadership Journal, 29, 4: 21-26. Snyman, R. and Kruger, C.J. (2004) “The Interdependency between Strategic Management and Strategic Knowledge Management,” Journal of Knowledge Management, 8, 1, 5-19. Read More