Nomin-5 Company Analysis

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Company profile

Founded in 1992 as "Nomin-5" and then changed the name into "Nomin Trade" in 1996, "Nomin Holding" in 2002 each, the Company has improved its trading network through its history to fulfill its purpose to get customers for local and international brand products.

This chain network consists of 13 branch companies and 13 store chains in the UB, and also other main cities in Mongolia as well. There are some international representative offices in Russian Federation, South Korea, Singapore and China with about 2400 staffs (staffs in Mongolia included). The company runs its activities collaborating with above 10000 partners, 400 domestic distributors and 4 representative organizations. There are also some international valuable partners co-operating with "Nomin Holding".

"Nomin Holding" LLC has 4 main directions on its activities as follow:

Trade and service sector: State Department Store, Nomin Department Store, Nomin Supermarket chain and Nomin Ware house Trade, and classified other network stores "Nomin Electronics", "Nomin Foods", "Nomin Home Style", "Nomin Fashion", "Nomin Standard" Construction Materials, "Nomin Motors".

Manufacture Service: "Erdenet Carpet", "Nomin Construction"

Financing Service: "Nomin Insurance" "Nomin Union"

Other Businesses: Realtor and real estate service etc.

I hereby selected one of the main branches, "Nomin Supermarket" and made customer research to ascertain the implementation of the company's marketing policy in generally.

As human life goes and being improved with new developments and fresh technological implementations, NOMIN keeps improvement on its principles and styles, implements changes and innovations to the current sales network, the online business based on wireless technology. They prefer to be connected with partners and pay great importance for collaborations and multi-side understandings.

Task-1

1.1 Definition of Marketing

If I ask anyone what the marketing is, most of the respondents could answer me that marketing is the 'advertisement' and 'selling'. It is the really common answer on the street. But actually someone who holds business understands deeply what the marketing is. Only businessman who knows the importance of market-ing, who pays huge attention on that, could earn long-term profit. It will be helpful to bring the long term profit on every business with amount what they want. Marketing is the most important conception in the business. That is why we have to study marketing.

The key word in the marketing definition is 'process', marketing involves researching, selling, promotion and distributing the products and services. In my opinion the marketing is the exchange between the customer and the producer or the process of improving standard of the life in society. The important point of the marketing is fulfilling customer needs and wants with the expected products or services.

There are some definitions of the marketing as follow:

The management process responsible for identifying, anticipating and satisfying customer requirements profitably. /Chartered institute of marketing/

Satisfying customer needs and wants through an exchange process. /Philip Kotler/

Marketing is not about providing products and services. It is essentially about providing changing benefits to the changing needs and demands of the customers. /www.learnmarketing.net/

Having defined that we can precisely say marketing is meeting needs and providing benefits.

1.2 Explain the marketing concepts and marketing orientation

Marketing concept is the most recent stage of business development, which has been implemented after the WWII, the philosophy that business needs to analyze the needs and interests of their customers and then take actions to satisfy those needs, better than the competition-oriented concept. Today most companies have adopted the marketing concept; even it has not always been in the case.

Adam Smith wrote that the producers should be considered only with regard to meeting the needs of consumers in "The Wealth of Nations", in 1776. However this philosophy has created about 200 years ago, it has become only reality after the marketing concept has widely implemented through the business companies after the WWII.

To distinguish marketing concept, it is worthwhile to put it in perspective by looking other philosophies that once were predominant. Some of those are still being implemented by some companies in current days, somehow. Here I noted some of the main previous concepts.

The Production-oriented Concept

After the industrial revolution has started, many of firms carried out this concept. They put the production first, produce most of the products efficiently, the creation of low-cost products would in and of itself create the demand for the products. The key questions that a firm could think before producing products were:

Can we produce the product?

Can we produce enough of it?

Before the manufacture fulfills the demand of the customers, the Production-oriented Concept worked well and fairly, because the goods produced were largely those of basics demands and there still was a relatively high level of unfulfilled demands. Everything that could be produced was sold easily by a sales person whose job it was simply to execute transactions at a price determined by the cost of production. This concept existed into the late 1920s.

The Selling-oriented Concept

By the early 1930's, the American great crisis era, mass production had become commonplace, competition within same producers had increased. Then there was little unfulfilled demand left. Before producing a product, the key questions were:

Can we sell the product?

Can we charge enough for it?

This concept gave little attention to whether the product actually was needed; the goal simply was to beat the competition to the sale with little regard to customer satisfaction. Marketing was a function that was performed after the product was developed and produced, and many people came to associate marketing with hard to sell the product successfully. Even today, many people use the word "marketing" when they really mean sales.

Competition-oriented Concept

While the competition on the market, the importance of selling-oriented marketing had been lost. With this, the competition-oriented marketing had developed through almost all of the companies, to take the advantage on the market. Companies paid main of their attention to take any advantage on competition and less attention to production and sales issues of their products. Key questions of the companies on that concept were:

How can we compete with the others?

How can we win over them?

But, after some time has passed through, the companies observed that the competing can't be the core principle of company marketing, while they getting knowledge that those customers can be there instead of the competition. This was the start of new business concept, which is called that marketing-oriented concept.

Marketing-oriented Concept

In order to define the concept we need to determine what the marketing orientation is.

Marketing Orientation

Goal-oriented, integrated philosophy practiced by producers of goods and services that focuses on satisfying the needs of consumers over the needs of the producing company. The marketing concept holds that the desires and needs of the target market must be determined and satisfied in order to successfully achieve the goals of the producer.

There are three main alternatives to adopting a marketing orientation. These are:

Sales-oriented marketing concept

Some businesses see their main problem as selling more of the product or services which they already have available. They may therefore be expected to make full use of selling, pricing, promotion and distribution skills (just like a marketing-orientated business).

The difference is that a sale-orientated business pays little attention to customer needs and wants, and does not try particularly hard to create suitable products or services.

Production-oriented marketing concept

A production-orientated business is said to be mainly concerned with making as many units as possible. By concentrating on producing maximum volumes, such a business aims to maximise profitability by exploiting economies of scale.

In a production orientated business, the needs of customers are secondary compared with the need to increase output. Such an approach is probably most effective when a business operates in very high growth markets or where the potential for economies of scale is needed significantly.

Product orientation

This is subtly different from a production orientation. Consider a business that is "obsessed" with its own products - perhaps even arrogant about how good they are. Their products may start out as fully up-to-date and technical leaders.

So we can easily define that the marketing-oriented concept as defining the key questions (as we did on previous concepts before):

What do the customers want?

How can we fulfill their demand?

Have we got enough resources to produce the products (to fulfill the customers' demands)

It also can be used to describe product-life cycles, which of each requires different marketing strategies.

1.3 Cost and advantage of marketing orientation

Cost of the marketing orientation

With the marketing based approach, a company could start or change any of its business activities with the real-time marketing research related to the change topic. Marketing research, which can be divided into two main categories; primary and secondary, costs some money and time both. It can make some hindrance to take necessary action urgently, but it can reduce the risks of any further unknown actions.

Therefore, the cost that company pay can be referred in scale of both money and time.

In just brief, the advantage of marketing orientation can be referred that the company could not only avoid from any further risk, but they also can spend their resources the most efficiently.

Advantage of the marketing orientation

1.4 The concept of marketing explained and compared with examples from more than one organization

Task-2

2.1 Macro and Micro environment

The Environment, which consists of number of factors, surrounded around an organizational marketing can be divided into 2 sub environments; macro and micro. The only difference distinguished those from each other is the capable that the organization can make influence on them or not. Marketing environment that is out of the organizational control is called as the Macro; otherwise it can be defined as the Micro.

Macro Environmental Factors

The macro environmental factors consist of those mentioned below are classified in one frame due to their status out of a company control.

Political and legal factors:

Business laws and rules have direct influence on every company activities, which could be framed out by them accordingly. In market based economics, those laws and rules only create the frame for company activities, where the company can play under the law regulations. If any part of the frame has changed due to the "customer interests", policy makers often use these words, the business environment will be changed accordingly.

In international business case, the foreign relations between those countries, where the company run activities through, have certain influence to the business.

Economic factors

Macro economics' factors include; inflation, money supplement, economic growth etc, could make direct or indirect impacts on business activities

Social and Public factors

Mostly consists of the indirect influences, social factors also have a huge impact on business in long term. Consumers' behaviour to approach on especially for a topic, for example, can be changed into a new topic.

Natural Environment

Any scale of businesses feels the influence of natural factors somehow. In recent years, the importance of business, which cares natural friendly approach, gets more value from their customers respectively.

Technological

Technological improvement can bring some significant improvements on productivity, in both intangible and tangible.

Any organization has to run their activities under these factors serves, and adapt to their changes immediately and directly.

Micro Environmental Factors

These are internal factors close to the company that have a direct impact on the organisations strategy. These factors include:

Customers:

Organizations survive on the basis of meeting the needs, wants and providing benefits for their customers. Failure to do so will result in a failed business strategy.

Employees:

Employing the correct staff and keeping these staff motivated is an essential part of the strategic planning process of an organization. Training and development plays an essential role particular in service sector marketing in-order to gain a competitive edge.  This is clearly apparent in the airline industry.

Suppliers:

Increase in raw material prices will have a knock on effect on the marketing mix strategy of an organisation. Prices may be forced up as a result. Closer supplier relationships are one way of ensuring competitive and quality products for an organisation. 

Shareholders:

As organisation requires greater inward investment for growth they face increasing pressure to move from private ownership to public.  However this movement unleashes the forces of shareholder pressure on the strategies of organizations. Satisfying shareholder needs may result in a change in tactics employed by an organisation. Many internet companies who share prices rocketed in 1999 and early 2000 have seen the share price tumble as they face pressures from shareholders to turn in a profit. In a market which has very quickly become overcrowded many have failed.

Media:

Positive or adverse media attention on an organisations product or service can in some cases make or break an organisation.. Consumer programmes with a wider and more direct audience can also have a very powerful and positive impact, forcing organisations to change their tactics.

Competitors:

The name of the game in marketing is differentiation. What benefit can the organisation offer which is better than their competitors. Can they sustain this differentiation over a period of time from their competitors? Competitor analysis and monitoring is crucial if an organisation is to maintain its position within the market. 

2.2 Segmentation process and criteria explored

Companies should do segmentation on their market, just to define their target market. While defining the target market, the following factors are commonly used include:

Demographic factors: Which consists of a number of sub factors, demographic factor on segmentation process can be explained as a complex of factors which customers' choice on the company products. The sub factors are including age, education, ethnic etc

Geographic factor: Including distance, location, climate, etc. Geographic factor has a great influence on decision making process of customers for the company products and services offered.

Economic factor: This is a complex of economic impacts on the decision making of customers. It can be easily described as a measurable option how much difference exists between 2 economic different customers, who are relatively rich and poor each.

Psychographic factor:

Behavioural

Criterias::::

Identify the segmentation criteria that will impact your target market selection. Identify your target market. the product is a radio receiver for motorcycle helmets.

Criteria for Segmentation

- things you have to think about in order to decide if a potential group is worthwhile being considered a "segment"

1. Homogenous 

- are the people in the proposed segment all similar without too many differences

- you could say right handed people is a segment, but.... if half the right handed people were women, and half were men, then this might not work if the gender also was an issue. 

.

Criteria

for

Segmentation

 

2. Heterogenous

- the people between the segments should be very different

- right handed and left handed might not be worthwhile if you are talking about a market segment for a product like pull-on boots

.

Criteria

for

Segmentation

 

 

3. Substantial

- the people in the segment should be large enough in number to be worthwhile

- right handed men might be a large enough segment

- right handed men, who wear glasses, and speak Spanish and right motorcycles might be too small

- the group has to be large enough to "generate sufficient sales volume at a low enough cost to result in a profit " says Sommers 10th Ed. 

.

Criteria

for

Segmentation

 

 

4. Competition

Sommers 10th Ed. suggests that a company should target segments "where the number of competitors and their size are such that the firm is able to compete effectively"

 example

- some people buy trucks, some SUVs and some cars and some mini-vans

- some companies have a product segment devoted to truck buyers, like Ford

- car companies, like Nissan and Toyota might be advised to avoid selling trucks in North America because the competition is intense and they might not make a profit 

.

Criteria

for

Segmentation

 

 

5. Resources

Sommers 10th Ed. suggests that a company should make sure the segment relates to the resources of the company. If the company can mfg. variations to fit its key demographics, great, but it should not take on additional demographics if it does not have the capability

example

- a lingerie company taking on plus sizes - which would mean reconfiguring the fabric pattern cut-out which would effect fabric cost, waste amounts, etc.

2.3 Appropriate targeting based on the buyer behaviour analysed

We used the results of a big customer research for "Nomin Supermarket", one of the biggest food and grocery supplier chain in UB, the capital of Mongolia, in June, 2010. The research was made with the purpose of ascertaining the real value of the current customers and potential target market. The first purpose of the research was to recognize the customers' behaviour, (includes product choice, brand choice, purchasing time, amount and frequency), and know how much of change has been made since the last research of the year 2009.

The result shows and delivers some measurable amounts on …

2.4 Factors that influence the targeting examined

To define the exact (most appropriate) target for the company, the questionnaire (annex No. 1) was made with the purpose of including all possible questions to define (to distinguish different targets from) the company's purposed market. The social segmentations have been hugely used (age, sex, income, etc) to create the segments' frame.

2.5 Differences between org and consumer buyer behaviour examined

There's a similarity among the organizational and buyer behaviours, which that both prefer to earn some benefits from the purchase. The organization wants to create economic profit, to create value to their reputation, and to get some advantage on the market etc., from the purchase. On the other hand, the customer wants to get satisfaction that can be higher than the amount they paid for themselves, from the purchase.

Task-3

3.1 Traditional marketing mix analysed independently

Product, place, price, and promotion

The 4P indicates the main 4 aspects of marketing mix, which requires basic attentions from the marketers. Every single product needs special mix from those 4.

As a service organization, "Nomin Supermarket" has created its own mix on marketing policy, to create value on its name. While looking at back to its 15 years of history, there's a huge achievement on its marketing. Every people know "Nomin" in every field of its activities, in the result of the company's complex marketing policy. There are just a few competitors in such a small market in Mongolia, therefore it can be somehow easy to stick its name to the customers through the public advertisement, but in a long term, it's not easy to get any of advantage on both marketing and in real without a successful marketing mix policy. Promotion, one of the 4P, can addict people to the company very much, thereby, "Nomin" commonly uses promotions include after-sale promotion in its daily activities. Customers can take such promotions include 3-day after-sales warranty, the lowest price warranty, multiple-buy warranty etc.

3.2 Extended marketing mix variable examined

Product, place, price and promotion, additionally package, people, planning and physical evidence

The new generation of marketing mix, as of today, consists of basic 4P, and additionally 4P more, include package, people, planning and physical evidence. As an essential part of the company activities, no matter how big is the company or its purpose, marketing and its mix could be defined to each of the products of the company. Therefore, the variety of marketing mix that could be managed/mixed, is getting more and more as time goes by.

3.3 The extended marketing mix of the organization analysed for the organization

"Nomin", the group company, has developed mix policy through all of its branch company. It can promote all of its branches, through getting additional promotions to the customers. It means the "package" of mix components is being used. The rest of marketing mix options are also being considered, to be in harmony with specialty of Mongolia.

Task-4

4.1 Different marketing mix considered and analysed for target 2 groups

Based on result of the research, there are some main targets have been observed. The most appropriate targets of some household products, such as toiletry, kitchen accessories, ……. Are female customers. And we have categorised the income of customers into 4 main groups. The biggest income group of customers for such products is between MNT 700.000-1000.000 per month in family. We could make a conclusion on that the company would target to the combination of those 2 segments.

There was a question asked the variety of offered products in the store, and 80% of customers answered for this question "good enough" or "good". So the conclusion was that supplement of the products in the store is good, but not sufficient enough. There is still a way to increase the customer satisfaction through paying more attention to the rest of 20% customers.

If we need to catch a customer segment for luxury products, there is a small, but with a huge financial solvency in the market. If we could make an exact marketing mix on a luxury product such as luxury furniture offered by "Nomin furniture" with offering special discount on products of "Nomin supermarket", the company would earn more profit from both of the branches.

4.2 Marketing mix for products and service compared

The products or service can be mixed together and mostly been done so. But, they can also be mixed separately. Marketing mix for products only can be made to increase the sales amount of some certain products through connecting with a best seller product. Marketing mix for service can be also done like that. …

4.3 Need for changing marketing mix for international market examined

Nomin supermarket sells a large amount of imported products. Therefore, any change of a relevant international market could make an influence to marketing mix of the products imported. …

4.4 Appropriate marketing mix for the chosen organisation recommended

The most product cost almost 50% is concern the cost of marketing process. The investment of the marketing is defined by product's additional income. Marketing is spending big money during the process but it helps all employees are working collectivity.

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