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Marketing

1.0 INTRODUCTION

Marketing is a management process that ensures businesses can interpret consumer needs and match or exceed them while making profit. Marketing is an exchange process through which companies satisfy existing and potential consumer needs by creating and offering goods or services with some added value. One of the most important functions of marketing is to create awareness about products and services to potential customers and increase consumer loyalty. Through marketing, customers become aware of what a firm is offering and businesses use the opportunity to convince consumers to buy their products and services. Therefore, effective marketing provides the opportunity to be discovered by prospective customers.

Marketing helps to increase and/or protect market share, retains loyal customers and attracts new ones by developing long-term strategic relationships with consumers. Ultimately, satisfied customers become a part of the marketing effort as they inform others about their views and experiences. There is therefore a focus on building brand recognition to maintain a strong corporate presence in the markets concerned.

Marketing also fosters healthy competition as small or new businesses can compete with larger, more well-established companies through aggressive product awareness and pricing strategies. Effective marketing therefore also needs to focus on the activities and business strategies of competitors, whilst providing accurate data around issues such as consumer demand and product/service impact.


2.0 MARKETING THEORIES

2.1 ANSOFF’S MATRIX

Ansoff’s matrix visualises the current strategic position of an organisation and suggests possible alternatives (Diagram 1) (Ansoff, 1988). However, this model does not consider external factors such as changes in the market or resource constraints and it should not be used in isolation.

(Ansoff, 1988)

Diagram 1: Ansoff’s Matrix

PESTLE and SWOT analyses can be used alongside Ansoff’s Matrix to support marketing strategy development. PESTLE considers the external operating issues facing a business (political, economic, social, technological, legal and environmental), whilst SWOT focuses on the more internal factors (strengths, weaknesses, opportunities and threats) shaping the competitive position of the company concerned.

A range of other models can be employed to support these approaches such as using the BCG (Boston Consulting Group) framework to examine the existing product/service portfolio of the business. Identifying ‘cash cows’ (products/services requiring little additional investment but generating significant revenues), ‘stars’ (gaining significant market share with accelerated sales growth), ‘dogs’ (products/services with a small share in a mature market) and ‘question marks’ (products/services with unknown future potential) can guide the development of marketing strategy (Arvidsson, 2006). The General Electric-McKinsey (GEM) Matrix can also be applied to consider the relative position of strategic business units within a conglomerate’s portfolio of businesses (balancing relative strengths against long-term market attractiveness) (Dyson, 1990).

In general, the 7P marketing mix is used (people, process, physical evidence, place, price, promotion and product) to determine the type of product or brand a business can offer to its customers. This is an effective way to identify market opportunities and can help businesses adapt to a dynamic business environment.

3.0 ADVERTISING CAMPAIGNS

An advertising campaign places strategic messages in multiple media channels at fixed times. The messages have a single campaign theme, which is the central message communicated through such promotions. Advertising campaigns aim at achieving goals such as brand establishment, raising brand awareness and increasing sales.

3.1 BUILDING A CAMPAIGN STRATEGY

A business should first set realistic and achievable advertising campaign goals. Once set, these goals need to be appropriately resourced with a particular focus on sustaining the campaign over time and the effort needed to reach target audiences. This necessitates a critical review of the channels to be used to reach consumers such as traditional (e.g. radio and television) and more modern methods (such as social media). The aim should be to deliver multi-sensory messages that have both visual and audio appeal (Hultén, 2011).  The ‘interference’ generated by advertising clutter (where media outlets include many advertisements within a limited space and time) must also be considered, as this could force businesses to increase the frequency of their advertisements in order to generate the required impact.

An advertising campaign is composed of many promotional activities tailored to fit the message an organisation is sending to its target population. Businesses must therefore consider factors such as the characteristics of the target audience and the media outlet being used. Generally, a business establishes a suitable slogan (word or phrase), value proposition (reason for customers to be interested in a product) and appeal (emotional, use of fear, humorous or sexual) that they feel will resonate with their intended market(s).

The evaluation of promotional activities is crucial to ensuring the success of an advertising campaign. Continuous assessment enables businesses to identify opportunities and threats facing the success of marketing campaigns, allowing them to quickly adjust their approach if required. This reinforces the requirement to set clear and achievable campaign objectives from the outset.

3.2 MARKETING STRATEGIES

Marketing strategy considers how activities are planned and relates this to the resources required. The aim is to ensure that marketing goals and business objectives are achieved and the marketing mix (see 2.1 above) provides a useful framework to evaluate the impact of any marketing strategy.

Mass marketing and guerrilla marketing strategies are cheaper and appeal to larger audiences than direct marketing strategy (Nufer, 2013). Modern viral marketing approaches involving the use of social networking services and word of mouth have also proven effective in increasing brand awareness.

More direct marketing strategies, where sellers communicate directly with consumers using mechanisms such as emails, text messages, online adverts and promotional letters, can be more affordable and generate a higher response rate. When linked to ‘call to action’ approaches (including web links and free to call telephone numbers) they can be particularly effective in converting prospects to confirmed customers. The results of direct marketing are also easier to measure, although the intrusive nature of the approaches used (such as ‘spam’ emails) and the environmental impact (‘junk’ mail) does generate significant resentment amongst many consumers.

Close-range marketing strategies (involving the use of wireless communication alongside online-based marketing strategies) is now being seen as a valuable way to reach modern, technology aware/enabled consumers. Being able to target these consumers at the point of their sale review/decision (e.g. an in-store promotional text) helps businesses to both increase sales and collate consumer behaviour data.

Relationship marketing strategy (seeking to create a lasting emotional connection to a brand) supports businesses selling high-end products as it helps to maintain customer loyalty. Niche marketing strategy concentrates effort on given market segments and also support the evolution of relationships built upon low sales/high price transactions. (Shani & Chalasani, 2013). Conversely, transactional marketing approaches focus on more short-term goals such increasing individual sales.

Cause marketing strategies (where a business aligns its brand with a perceived socially responsible cause) are now widely employed. Customers are made to feel that their purchasing decisions make a real difference to causes and campaigns that are important to them.


4.0 MARKETIN METHODS AND CONCEPTS

4.1 MARKETING CONCEPTS

Marketing concepts seek to determine the tools to be used to achieve marketing goals by accurately identifying and satisfying customer needs. The production concept, focusses on business operations and assumes that consumers prefer readily available and inexpensive goods. There is therefore a focus on high production levels to increase efficiency, lower production costs and support mass distribution. However, such approaches often sacrifice output quality which can adversely shape consumer loyalty and brand strength. It is therefore suitable for organisations delivering standardised goods that require minimal or no variation.

The selling concept states that businesses have to aggressively market their products to increase consumer demand. The distribution and availability of promotional information is considered critical and the focus is on the flow of resources in and out of a firm. However, there is only a limited focus on building consumer relationships and customer loyalty. The concept is particularly applicable when supply exceeds market demand.

In the product concept, customers are assumed to desire products of higher quality, better performance and superior features. Customers are likely to purchase innovative and feature-rich products that have numerous applications and as they are more proactive in seeking out alternatives and stating their requirements there is usually no major need to develop market understanding. In contrast, the marketing concept argues that firms have to study the market in depth if they are to satisfy consumers and remain competitive.

In the societal marketing concept, firms determine the needs and wants of customers and supply products that satisfy these needs and perceived social expectations. The argument is that consumers will be more willing to purchase goods and services from entities that are socially responsible and which are able to meet the broader, more ethical value expectations of modern customers.

4.2 MARKETING METHODS

Advertising is a form of audio and visual marketing communication which presents strategic messages to an audience promoting a product or service. Advertisements are transmitted through mass media channels such as newspapers, magazines, television, radio and websites. Advertisements provide market information such as price, functionality, quantity and product specifications to support consumer purchasing decisions. However, advertising can involve significant costs and are often accused of being misleading or inappropriate. That said, they can support a business entering a new market wishing to create awareness of their products and services, particularly as large audiences can be reached. 

Promotion is one of the four elements of the marketing mix and raises awareness of a product, service or brand. It achieves these objectives by presenting product information to customers, increasing demand and differentiating a given product from other in the market. The aim is to position products as being superior in the minds of consumers and to improve brand awareness. Promotions have to be carefully implemented as customers can quickly develop negative perceptions of products/services with exaggerated performance claims or if the resultant demand cannot be adequately satisfied. Promotions are therefore useful for slow-moving products because the method helps to trigger demand and create a continuous inventory flow.

Packaging is the process of designing and producing materials that are used to cover or enclose products for distribution, storage and sale. Packaging plays several marketing roles including branding and the provision of customer information (e.g. ingredients and performance data). Creative packaging by a company helps to increase the brand loyalty of consumers and create a point of critical competitive differentiation.

Branding involves the conception of a name, symbol, slogan, design or a mixture of these components to identify and separate products/services from others. A good branding strategy provides a firm with an advantage in competitive markets and businesses need to continuously conduct research to define and build their brands to protect the value they add. A good brand will emotionally connect customers with the products and services concerned, but a negative event can damage a company’s whole image and brand within a short period. In markets with close substitutes branding is useful in positioning and differentiating products and services.

Public relations involves the effective management of information transmitted by a business to shape how the general public views the company concerned. Good public relations activities are conducted continually over a protracted period, helping to sustain corporate brand and image. However, businesses have no control over the type of publicity they receive from media outlets which can be positive or negative depending on the nature of the coverage.

5.0 SUMMARY

This Chapter has looked at various marketing strategies, methods and concepts, comparing and contrasting theories that can help a business develop a successful and sustainable marketing strategy. In doing so, the requirement to set clear and achievable objectives remains vital if such approaches are to succeed.

The Chapter also reviews the importance of marketing to the success of modern organisations, critically analysing how various marketing strategies, concepts and methods are appropriate to the particular business situations that firms might encounter. Businesses need to develop unique marketing combinations and approaches to build strategies that will help achieve corporate goals. As technology develops, new methods will emerge and concepts such as close-range marketing are likely to become increasingly important.

6.0 REFERENCES

Ansoff, H.I. (1988). The New Corporate Strategy, London: Wiley.

Arvidsson, A. (2006). Brands: Meaning and value in media culture, Abingdon: Routledge.

Dyson, R.G. (1990). Strategic Planning: Models and Analytical Techniques, Chichester, John Wiley & Sons Ltd.

Hultén, B. (2011). Sensory marketing: the multi-sensory brand-experience concept. European Business Review, 23(3), pp. 256-273.

Nufer, G. (2013). Guerrilla Marketing-Innovative or Parasitic Marketing? Modern Economy, 4(9A), p. 1.

Shani, D., Chalasani, S. (1992). Exploiting niches using relationship marketing. Journal of Consumer Marketing, 9(3), pp. 33-42.


7.0 BIBLIOGRAPHY

Ferrell, O.C., Hartline, M. (2012). Marketing Strategy: Text and Cases, Toronto: Nelson Education.

Hise, R.T., Strawser, R.H. (2013). Application of Capital Budgeting Techniques to Marketing Operations. Readings in Managerial Economics: Pergamon International Library of Science, Technology, Engineering and Social Studies, p.419.

Jobber, D., Ellis-Chadwick, F. (2012). Principles and Practice of Marketing, 7th Edition, New York: McGraw-Hill Higher Education.


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