Marketing_Mix

14. 10. 2008 Assignment 1- Introduction to marketing (time for lunch) Task 1 Provide two definitions of marketing Marketing plays an important part in nowadays business environment because it can either distinguish the company from the competition in a positive, successful way or vice versa. We can describe the term marketing as a management process responsible for identifying, anticipating, and satisfying customers’ requirements. It is a management activity because it requires continuous gathering, analysing and evaluating of the information. The collected information should help organisations and companies to identify customer requirements. Philip Kotler defines marketing as “satisfying needs and wants through an exchange process.” Identify the broad aims of organisations in private, public and voluntary sectors. Public sector – is a non profit making sector, where organisations are funded by the tax payers. It is also the part of the economic and administrative life that deals with the delivery of goods and services by the government to the public. The public sector consists of government agencies and departments providing services for citizens without a focus to make a profit, e.g. (police, fire brigade, NHS). Public sector also uses advertising, not for selling products, but for recruiting people (soldiers, police officers, medics). Private sector -is the part of the economy which is run for a private profit and is not controlled by the government. The owners of the businesses are people to whom the business belongs, or its shareholders. The main aim of the companies in this sector is to make as much profit as possible. Voluntary sector – is the sphere of the social activity undertaken by the organisations which are non-profit and non-governmental. This sector can be known as the 3rd sector. Generally the emphasis is put on providing goods and services which are not available or insufficiently met by the public or private sector. The organisations which fall into this category among many others are Oxfam, Red Cross, Fair trade. These organisations are mainly staffed by unpaid volunteers. Describe how marketing supports these aims. The most common way how marketing can support these aims is trough the branding and advertising. Marketing is an ongoing process of planning and executing the marketing mix, composed of the so called 4 P’s (place, price, product, promotion). Each of the sectors has a different marketing strategies and aims. Price- is extremely important in the marketing mix. Inappropriate pricing strategy could waste all efforts made to establish a well-developed marketing mix. It is important to calculate the volume of sales, required at a given price to cover the costs and to make a profit. We can use strategies as a skimming, penetration, psychological, cost plus, loss leader etc. Another important thing is to keep a close eye on the competition. Companies can use pricing strategies like skimming, penetration, psychological, cost-plus, and etc. Place –plays a very important part of the marketing mix in marketing-orientated organisations. We need to choose a suitable location for our business if we want to succeed. The more places (e.g. branches, outlets etc.) displaying the product the more likely is the consumer purchasing the product. Lot of big companies nowadays prefer the quality rather than quantity and are constantly trying to modernise and improve their existing places rather than opening new ones. Product- is the physical product or service offered by a company to the end user-consumer. Products decisions include aspects such as function, appearance, packaging and warranty. It is really important to know customer´s needs. Promotion- includes advertising, sales promotion, publicity, personal selling, branding and refers to the various methods of promoting the product, brand, or company. It is one of the key aspects of the company´s marketing strategies. Usage of marketing in local organizations: Mc Donald’s – local branches are placed in the busiest locations in Brighton, such as a Western Road and London Road. Mc Donald’s tries to attract children with Happy Meal toys which are introduced together with Disney movies such as Toy Story, Incredibles, KungFu- Panda etc., as well as offering discount vouchers or giving the opportunity to hire the designated area in the restaurant for a private birthday party. McDonald´s also makes use of the other methods e.g. offering short term price reductions or promotional coupons. Royal Mail - there is a plenty of post boxes all over the Britain and Royal Mail has recently launched a campaign called Royal Mail email marketing. RM offers 1st and 2nd class delivery service with additional insurance for the package. Royal Mail always tries to improve it´s services with various innovations e.g. possibility of tracking the delivery package etc. UNICEF is the one of the world’s biggest charity, which helps people in poor countries especially in third world countries and in countries suffered from war. This organisation is selling postcards, toys and different souvenirs usually made by children who are in destitution. Task 2 Describe how marketing mix is applied a product or service by Mc Donald’s and Prêt a manger. Marketing Mix The marketing mix is nowadays accepted as the use and specification of 'the four Ps'. These describe the strategic position of a product in the marketplace. The origins of this idea dates back to 1948 when James Culliton, who is seen as the originator, talks about marketing decisions being something like a recipe. This idea was further developed in 1953 by Neil Borden who took Culliton’s idea one step further and started to use the term 'Marketing-Mix'. This was later in the 1960s divided into four main categories: place, product, price and promotion. However, some companies added other elements into their Marketing Mix. These include e.g. people or packaging. [pic] People Since 1974, when McDonald’s opened its first restaurant in the UK, it has become a well-established brand with more than 1200 restaurants all over the country. To run and manage all of them, and this not only in the UK but all over the world, McDonald’s needs well-trained management and restaurant crews that are committed to their work. If someone wants to work for the company, in many cases McDonald’s is able to adapt to each individual e.g. where, what time, and how many hours a week the potential employee wants or is able to work. Moreover, they can attend special courses before working for the McDonald’s Corporation. The most famous McDonald’s training facility is the Hamburger University in Oak Brook, Illinois, USA. The courses are taught in 22 different languages and are designed for managers, assistant managers and prospective franchisees of the corporation. Product McDonalds serves around 1% of the world’s population every day. In each country there are different variations of the menu based on culture, religion and taste of its population. Customer can choose from variety of meals (cheeseburger, hamburger, chicken Mc Nuggets), drinks (coke, Sprite, Fanta, different kinds of fruit juices, coffee, milkshake), and ice cream. The product policy of McDonald’s branches varies from country to country. Place In a marketing orientated organization, place is seen as an important part of the marketing mix. Therefore, it also plays an important role in McDonald’s marketing strategy. Most of McDonald’s branches are situated on high streets. Therefore, they pay lots of attention on their logistics to not to let their customers down. To stay competitive in the market, they have recently adopted a new strategy to “grow by being better, not just bigger”. It has resulted in reimaging and modernising their restaurants, creating more drive-through outlets, staying open later, assuring customers with more non-cash alternatives and even increasing the availability of wireless technology. Price In order for McDonald’s Corporation to strengthen their brand globally, it must use different strategies in different countries and choose precise prices for the right markets. It means that prices are different in each country. The importance of the price is also highlighted by its role, which is to generate revenue and increase a company’s market share. (Brassington, Pettitt, op.cit, p. 391). McDonald’s price objective is to improve sales figures through the use of “brand enhancing sales initiatives”, therefore their pricing strategy is related to sales targets. Finally, when setting up the pricing strategy, prices and costs of competition must also be considered. Promotion Promotion strategy contains of a several elements like branding, advertising, personal selling, public relations, sponsorship, direct marketing and sales promotion. Further on, it has become more and more popular to advertise with celebrities, such as pop stars or famous sportsmen. The strategy is being used to improve and boost the image of the corporation. Another aspect which falls under this category is the development of Happy Meal toys which are launched according to Disney films (Toy Story, Incredibles, Finding Nemo). Aim of this strategy is attract the children to buy a happy meal with a toy inside. However, not children but their parents must pay for that. McDonald’s spend a lot of money for sponsorship like football World Cup or even Olympic Games. McDonalds also makes use of the other methods, by launching short term price reductions and promotional coupons, vouchers, usually based on the “buy one get one free” offer to attract further customers. [pic] People Prêt a manger invests a lot of money to the employee’s training because they want to offer best service to their customers. If someone visits one of the branches, it will be obvious that staff and managers are highly professional and customer oriented. I managed to visit branch on the North Street and I was surprised how effectively and also fast this restaurant works. Staff in Prêt (new established name of brand) is composed of people from different countries, race, and cultures. Prêt also offers a career progress for their employee’s. Currently, 75% of Prêt’s managers began their Prêt careers as Team Members. Product How Prêt proclaims on their website, they do not sell ‘factory’ stuff. This is clear explaining of their product policy. Prêt offers only a healthy and fresh food with natural ingredients that are clearly stated. The daily menu depends on season and locality where the branch is situated. Prêt tries to use local ingredients for their sandwiches to ensure that vegetables and meat are fresh, and healthy. Every single staff member has to attend a health and safety training, which should guarantee quality. Sandwiches are packed in plastic containers (for take away) or can be served on plates in restaurant. Place The difference between McDonald’s and Prêt is that Prêt does not make an effort to place their branches on the High Streets. Because Prêt is a private company it does not face the same pressure to grow compared to a public company. They develop slowly, one shop at a time. There are about 150 Prêt shops at the moment; most of them are in the UK. They offer a quiet environment for breakfast or lunch in a modern furbished restaurant. Prêt’s restaurants are usually smaller, because this is the way how customers can be fully satisfied with service and environment. Other way how we can get food from Prêt is through their webpage. Promotion They don’t spend a lot of money on promotion. We can find some leaflets or vouchers on the desk at restaurant but it is not usual to see or hear advertisement about Prêt a manger. They try to promote themselves in a different way such as providing support to homeless people in UK. The Prêt Charity Run operates a fleet of electric vans that deliver over 12,000 fresh meals to numerous shelters for the homeless. Describe how marketing practices in each organisation are constrained by legal and ethical issues. As mentioned, Mc Donald’s launched a campaign with Happy Meal. The main aim is to attract children to buy it, whatever the cost. However, it is against the law to offer directly to children. The big companies then hire a team of specialists who have to make a decision if the advertisement is suitable and is not in breach of any laws for the market. Companies have to follow laws such as common or statutory law, but they are also monitored by organisations such as the Advertising standards authority or encouraged by pressure groups such as Greenpeace, Fair trade organization and consumers association. Prêt a manger cannot say in their advertisement, that Prêt has got the best and healthiest food in the UK, or just better food than McDonald’s. Companies are not allowed to compare or asperse the products of different company. Both the McDonald’s and Prêt do not sell alcohol and tobacco products in their restaurants. Organisations such as Greenpeace make efforts that force McDonald’s to start using healthier and fresher ingredients and not to trade with farmers, who do not care about life conditions of animals on their farms. McDonald’s also shows its commitment to reducing animal cruelty from suppliers by increasing supplier accountability and conducting nearly 500 audits at beef, pork and chicken processing facilities around the world. This causes that restaurants in Europe usually offer a better meat and vegetables than restaurant in the US. McDonald’s and Prêt only offer free range eggs and organic milk. McDonald’s offers completely different menu in Europe than in Islamic countries. They need to adapt their menu in each foreign country depending on culture or religion. Take away restaurants were criticised, that every day made hundreds kilos of waste, mainly from the boxes for food, and this is the reason why Prêt offers their product in recyclable brown or white paper. All of the restaurants have to be accessible for disabled people according to the Disability Discrimination Act (1995). In 2003, a ruling by the UK Advertising Standards Authority determined that the corporation had acted in breach of the codes of practice in describing how its French fries were prepared. A McDonald's print ad stated that "after selecting certain potatoes" "we peel them, slice them, fry them and that's it." It showed a picture of a potato in a McDonald's fries box. In fact the product was sliced, pre-fried, sometimes had dextrose added, was then frozen, shipped, and re-fried and then had salt added. [pic][pic] References McDonald’s student information package, www.mcdonald.com, www.pret.com www.bized.co.uk www.wikipedia.org www.times100.co.uk, www.equalityhumanrights.com Principles of Marketing 3rd edition (2003), Brassington, F. And Pettitt, S., Rotolito Lombardia Italy