Understanding_the_Concept_and_Process_of_Marketing

For the first section of the unit Marketing Principles, I need to understand the concept and process of marketing by explaining the various elements of the marketing process and, evaluating the benefits and costs of a marketing orientation for a selected organisation. Explain the various elements of the marketing process An organisation’s primary objective is to satisfy customers’ needs by bringing into the market products or services that meet those needs. This is where the marketing process comes in, which is, to analyse the situation, to formulate market strategies, to make decisions and, to implement and control plans (http://www.netmba.com/). When launching a new or existing product or service, organisations need to carry out a marketing audit to assess the company’s environment, objectives and strategies. The audit has to be planned, cover all the marketing activities of the organisation, has to be independently carried out and done periodically to monitor the progress and resort to take actions if the need is required (Adapted from Kotler et al). In today’s dynamic environment, market strategies need to be brought together under a single vision. It is crucial that every department within the organisation work together towards a common goal and, by focusing all resources on the same objectives and pursuing the same direction, gives the organisation a competitive edge. This is integrated marketing, where strategies are shared, awareness among the target audience is maximised and policies are consistent within all the marketing-related departments (Adapted from Dransfield et al). According to Charles Handy, “in today’s marketplace the only constant is change” (Handy, 1994). This means that business organisations need to bear in mind that the market environment is made up of various factors, always changing and that these will have an impact on the customer needs. Managers can categorise these factors by carrying out a PESTEL analysis of the macro-environment and, thus being able to identify the likely changes and their implications on the organisation. Government policies, interest rates and inflation, social trends, technology, climate change and legislations are amongst these factors that need to be scanned and understood. Additionally, organisations need to evaluate these factors, not just on a national level, but also globally, as now the world has been sized down to a village with the continuous development of technology (http://ukcatalogue.oup.com/). Another strategy that helps to examine the relationship between an organisation and its marketing environment is the use of the SWOT analysis. The use of SWOT analysis is to focus on the strengths and weaknesses (from an internal perspective) and on the opportunities and threats (as external elements) that businesses or products face, in order to be able to anticipate and take action to maintain or expand their market position. Therefore, SWOT analysis will not just create an understanding of where the business stands, where it can grow or develop but, also it gives an understanding of the market structure the organisation is competing in and, which areas the business can use for its competitive edge (http://www.bizhelp 24.com/). To succeed and accomplish the marketing activities, management has to set clear marketing objectives. These objectives include market share, market penetration and growth rate. So, to have effective marketing objectives, management has to precisely state what the company hopes to achieve, quantify them, based upon a practical analysis of the organisation’s capabilities, what resources are available and when these objectives are hoped to be achieved. Furthermore, objectives should be consistent with the company’s mission statement as clear objectives can serve as a direction and motivation to employees (http://toolkit.smallbiz.nsw.gov.au/). Nonetheless, every organisation faces limitations in its activities. These constraints can be a result of an internal nature like limitation in financial resources or lack of skills or of external factors like, for example, the economic environment, legislation or already established competitors (Adapted from Dransfield et al). Once the company has decided which part of the market it wants to pursue and, have chosen the marketing strategy, the organisation will than to plan the details of the marketing mix. The marketing mix is a tool used by marketers to influence the demand of their product or service in the target market. Successful companies are those that offer the product or service that satisfy a want or need, at the price that consumers judge beneficial, which is conveniently available and by effectively communicate the merits of the product or service offered (Adapted from Kotler et al). Marketing is a systematic approach that affects everybody in one way or another. An analysis of the market has to be made to look for opportunities; a concise plan has to be prepared and implemented; marketing mix used to raise interest and demand for the product or service offered and; satisfaction for both the organisation and the buyers, where the buyers are benefiting from the product/service purchased and acceptable results for the company and stakeholders are achieved (http://marketingforbeginner. blogspot.com/). Evaluate the benefits and costs of a marketing orientation for a selected organisation In contrast to the production concept, the product concept or the selling concept, the marketing orientation focuses on the customer needs and wants, by matching the level of satisfaction customers are expecting, more effectively and efficiently than competitors do. Therefore, the business strategies revolve around the customer. Target markets are researched to identify the needs and wants of the customers; products are created based on the findings and finally, introduction and promotion is made by highlighting the value and benefits of the product. Furthermore, this means that, by keeping in mind the customer needs and wants, organisations learn about the culture environment they operate in, which in turn, this could contribute to build a competitive advantage due to the change of the company’s business culture (http://www. exforsys.com/). McDonald’s is the largest food chain, serving nearly 68 million customers every day. The mission and values statement of McDonald’s clearly state that they put their customers at the core of their business and in everything they do. To keep up with the promises made to their customers, both strategically and tactically, McDonald’s have to continuously monitor the overall business, from the managerial level down to the employees in their restaurants, food quality, customer care and service, and profitability (http://www.aboutmcdonalds.com/mcd.html) In today’s global environment, where the market is continuously shrinking, and there is no product/service differentiation at all, companies are continuously striving to keep the level of their customers satisfaction high. The way customers perceive the products/services offered by a company is vital, and it includes also how customers are treated and, how complaints and queries are handled. Customer satisfaction is essential for every business, and when customer’s expectations are met or surpassed, this leads to customer retention and as such, building that advantage over competitors (http://en.wikipedia.org /wiki/Main_Page). Through customer surveys and questionnaires, companies can have feedback of how their products/services are perceived and, McDonald’s does the same. Through surveys they ask customers about their experience at their restaurants, what they think about their products, or what they would like to add or change (http://www.aboutmcdonalds.com /mcd.html). However, to keep a high level of customer satisfaction can be costly, as continuously monitoring and analysing the research and the data gathered can be expensive. Although McDonald’s take seriously their customers feedback, they still ranked last in customer satisfaction index carried out by the ACSI. Following the publishing of this survey, McDonald’s issued a statement in response, to inform their customers what McDonald’s will be doing to add greater value and satisfaction when patrons visit their restaurants (http://shine. yahoo.com/). Another aspect to take into consideration is that marketing is moving away from just individual transactions. It is increasingly focusing on building a stronger relationship with customers and all the involved stakeholders. Relationship marketing goal is to deliver long term value to customers through long term satisfaction whilst building a strong relationship between the company’s departments to deliver and serve customers as a team (Adapted from Kotler et al). McDonald’s continuous menu improvements by introducing salads and fruits target the healthier and weight conscious customers, which in the past few years have increased substantially. McDonald’s wants to deliver the message that they have at heart these customers needs. Furthermore, McDonald’s does also keep in mind the children wants, by putting toys in their meals. Although these strategies can be easily imitated by other competitors, McDonald’s amalgamates its marketing process with the selling process. By investing in and providing all employees with training and development, customers know that in every McDonald’s outlet they go, the level of service and the quality of food is the same everywhere (http://www.about mcdonalds.com /mcd.html). On the other hand, organisations have to be careful not to focus too narrow on marketing. As with other activities, marketing comes with a cost. Resources like finance and human resources are limited. If an organisation focuses too much on marketing, it will not be able to have sufficient resources for other key operations of the company. Designer-based products which are not flexible to meet at best customers’ requirements, monopoly and too much choice are all factors that frustrate customers and therefore encourage too narrow a focus (Adapted from Dransfield et al). Conclusions Planning is necessary in any process, whether if to know the course of action to be taken, or to be used as a point of referral to check if the organisational goals are being achieved, this can be achieved through a marketing audit. Furthermore, a thorough analysis and identification of key factors that will either be of a benefit or of detriment to the organisation, both internally and externally, has to be made, so to enable management to make appropriate decisions. The marketing approach has been shown that it provides long-term advantages, but as with any other activity it has its limitations, like customers being alienated or confused by the strongest messages or too many resources used and therefore, have been wasted instead of using them for other beneficial purposes. References Theorists: Charles Handy (1994) - Business for Foundation Degrees and Higher Awards (2004), Dransfield et al From a Book: Business for Foundation Degrees and Higher Awards (2004), Dransfield et al Principles of Marketing (2001), Kotler et al From the internet: http://en.wikipedia.org/wiki/Customer_satisfaction - Accessed 24 June 2012 http://marketingforbeginner.blogspot.com/2011/01/marketing-scope-definition-and.html - Accessed on 22 June 2012 http://shine.yahoo.com/shine-food/mcdonalds-ranks-last-customer-satisfaction-index-165900737.html - Accessed on 24 June 2012 http://toolkit.smallbiz.nsw.gov.au/part/1/1/3 - Accessed on 22 June 2012 http://www.aboutmcdonalds.com/mcd/corporate_careers/training_and_development.html - Accessed on 24 June 2012 http://www.aboutmcdonalds.com/mcd/our_company/mission_and_values.html - accessed on 24 June 2012 http://www.bizhelp24.com/marketing/market-research/swot-analysis-in-a-marketing-plan.html - Accessed on 22 June 2012 http://www.exforsys.com/career-center/marketing-management/marketing-orientation.html - Accessed 23 June 2012 http://www.mcdonalds.com/us/en/contact_us/restaurant_feedback.html - Accessed on 24 June 2012 http://www.netmba.com/marketing/process/ - Accessed on 22 June 2012 http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12.htm - Accessed on 22 June 2012