Importance of Marketing Essay
Importance of Marketing
Marketing helps guide businesses in making strategic decisions by identifying growth opportunities and developing creative ways to approach those opportunities. Through successful marketing, a business will conduct extensive research, strategize and plan, brand the product, conduct product development, train the sales force, establish points of purchase, use public relations, and follow-up with good customer service. Marketing is the activity of a business organization that identifies customers, markets, as well as market segments and develops products or services to meet the needs of the customers by offering value of a product or service in exchange for profits and revenues for the business. In brief, marketing informs, educates, and persuades and it is paramount to the achievement of business success2.
2.1. BackgroundMarketing can be described as advertising a product. Marketing occurs when a company is trying to persuade costumers to buy the product that they produce over another company’s product. Marketing includes intensive research so that the company can get an outlook at what is the current trend in the marketplace. The problem is that marketing in theory contains these following activities also known as the 4-Ps which are developing the product, pricing the product, promoting the product and deciding what people to sell the product. 2.2. Purpose of the reportThis report aims to give basics of marketing comcept that is the most vital fact in business life for success. This report will tell why marketing has become so important in business life. 2.3. Statement of the problemAn organization cannot be successful unless the organization is satisfying its customers’ needs. This is because a product cannot simply be produced and expected to be sold. Although the idea for most is to create a product or service that “sells itself,” the product or service must create some consumer satisfaction to be able to sell itself. In order for there to be consumer satisfaction, economic utility must be derived from the product or service3.
Information has been gathered through research of websites, journals and books as well as own interpretation and ideas on how marketing is seen important in contributing to the profitability of any company. 4. FINDINGS4.1. What is marketing?Marketing is a very general term that has no specific definition to it. However, it is best described as “A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others” (Kotler, Brown, Adam and Armstrong, 2004). It is an understanding of how the company works with its consumers and how it generates in the society. Marketing is seen to be the process of ‘bringing in the businesses’. It is not seen to be an alternative, but a necessity (Forsyth, 2004). Many people consider marketing as a tactic.
However it is more than just a tactic. Marketing is analysis. According to Allen Weiss (2002), marketing is the analysis of customers, competitors, and a company by incorporating the understanding of competitive analysis and company capabilities into a general understanding of what the existing segments are. 4.2. Impact of MarketingMarketing deals with identifying and meeting human and social needs. Marketing can be defined as the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals. (Kotler, 2004)
According to the American Marketing Association defines marketing as an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders. (Kotler, 2004)According to the Marketing Principals book marketing can be defined as an organizational philosophy has been based on the marketing concept. This concept consists of three interrelated principles such as:•An organization’s basic purpose is to satisfy customer needs. •Satisfying customer needs requires integrated and coordinated efforts throughout the organization.
•Organizations should focus on long-term success.
Based on these definitions, explain the importance of marketing in organizational success. Marketing is important in an organization success. Marketing is a broad topic that covers a range of aspects, including advertising, public relations, sales, and promotions. Marketing is important because it creates the core for the company. Marketing helps provide a service for the customer. Making the customer happy is the goal of the company. If a company does not know what the client wants the company will not survive. The strategy in which the company uses is important to the company success. Marketing is the key for an organization to succeed. First, marketers create a need in the mind of consumers. If they do not have a need for the product, they won’t buy it. Then they have to come up with a product which will delight the consumers, and keep them coming back again and again. This is needed to build a long-term relationship with consumers.
If marketing gets them to purchase the product once, this would be a good outcome, but marketing should work to make them into lifelong loyal customers. A company is coming out with a new produce which will revolutionize the building industry. It makes building homes effortless. Sales of the product are lower than predicted. Research has found that many people are unaware of the product. One has made an idea to have a campaign marketing the benefits of the new product. Customers began to realize that there was a great need for the product which was being advertised. So, the customers began to purchase the product. No awareness is equated to any sales. (Personal communication, November 04, 2007)An established brand of toothpaste is seeing its sale’s drop. No one can understand why. The product has been used for years; however, the company has done little advertising in the past few years because the product was so well established.
Once a new ad campaign hit the waves, sales increased once more. Why? Well customers forget about products if they are not reminded. To maintain long-term customers, they need to be continues reminded of the product and they need to remember how much the product delights them, and how well the product performs. But re-establishing advertising, one must reinforce the communication link with customers. (Personal communication, November 04, 2007)A person is looking to buy a luxury car. They have the money, and one has the knowledge about the many competitors. What decision should the guy make? The guy ends up buying a car with the company that has the best customer relations. They buy it at the place where they are treated with respect and class, where they feel involved in every step of the journey, where they know they made the right decision. After they buy the car, their relationship with the company does not end there; the customer can join clubs, attend financial seminars, attend wine and cheese events. All things build customer relationships which are strong and make the consumer happy.
And the next time the consumer is in the market for a new car, they won’t shop around – they will return to the same dealership. (Personal communication, November 04, 2007)Marketing is more than just a company trying to sell the product. Marketing involves a great deal of research. Marketing also includes developing the product, pricing the product, promoting the product and deciding what people to sell the product. One has to be able to understand marketing so that it can be used in real life situations. 4.3. Why Marketing is Important“Marketing management is accomplished by carrying out marketing research, planning, implementation, and control” (Kotler, 2004). Marketing plays a major role in every business. It is very important as it contributes to the profitability of the company itself. “Relationship marketing involves creating, maintaining and enhancing strong, value-laden relationship with customers and other stakeholders.
“They must build strong economic and social ties by promising and consistently delivering high quality products, good service and fair prices,” (Kotler, Brown, Adam and Armstrong, 2004). Furthermore, when both customers and producers are mutually beneficial from this relationship, profitable transactions will follow. Knowledge of marketing strategy and market research is crucial in order to excel in marketing. 4.3.1 Five key factors to an effective marketingForsyth (2004) stated five factors which summarizes the effectiveness of marketing. a)Customer oriented. Company needs to focus on the wants and demands of the consumers. Profits come only after the consumers are satisfied. b)Continuously deployed. Marketing must be ready all the time as the company operates. c)Effective coordination. Marketing must logically co-ordinate its activities with the involvement of other departments and senior management team. d)Creativeness.
Creativeness is needed during competitive times. By adding creativeness, marketing will be stronger. e)Underpinning culture. What makes marketing possible is not only depended on the people in marketing, but also the contributions from professional staffs in other departments are indeed needed (Forsyth, 2004). 4.3.2 Market Research“Marketing Research is the function that links the consumer, customer, and public to the marketer through information–information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process” (Kotler, Brown, Adam and Armstrong, 2004). “By 1957 … as markets moved from seller to buyer, new ideas of ‘marketing were taking hold. Companies began to grasp the importance of understanding what the consumers really wanted; it could no longer be assumed to be the same as it always had,” (Valentine & Gordon, 2000)Marketing research is basically the function that connects the consumer, customer and public to the marketer through information.
There are four steps of market research. The first step is defining the problem; this is the hardest step of market research. If an inexperience manager define the problem wrongly, the whole market research will be affected hence the information will be inappropriate. Once, the problem has defined, the manager should determine, the research objectives which may fall in the three categories such as exploratory, descriptive or casual research. The second step is designing the research which will consist of determining what information should be gathered and how data will be collected. In this case, the data can be primary data collection or secondary data collection. The third step is implementing the plan which usually can be done by the internal staff or external firm. After the plan has implemented, the raw data will be prepared in order to get the information.
The last step is interpreting the data; the researches will need to present the overall information to the marketing manager to be carried out to the next marketing process. 4.3.3 Marketing EnvironmentIt is important to determine the environment that the company is working in. The marketing environment refers to the actors and forces outside the marketing management’s skills to cultivate as well as maintain successful transactions with targeted customers (Kotler, Brown, Adam and Armstrong, 2004). Certain environmental complications and issues can severely affect the profitability of the company. Environmental complications and issues include the breakdown of economy (local economy and international economy), inflation, boom, trend, customer’s dissatisfaction and others. The company should be able to adapt to such changes of the environment, or else the company’s profit will significantly decrease. This would affect the company’s growth as well as driving off loyal customers.
18.104.22.168 The micro-environmentIt could simply be defined as the forces nearest to the company, which affect the company’s capability of serving its customers. Certain types of micro-environments that the company needs to take notice of are, for example, other departments, major suppliers, marketing representatives, customers and competitors (Kotler, Brown, Adam and Armstrong, 2004). Most of these environments can be ‘controlled’ by the company itself. 22.214.171.124 The Macro-environment“The macro-environment consists of the larger societal forces that affect the whole micro-environment – demographic, economic, natural, technological, political and cultural forces,” (Kotler, Brown, Adam and Armstrong, 2004). Most of these cannot be ‘controlled’ by the company. 4.3.4 Marketing Segmenting, Targeting, Positioning“Market segmentation is the act of grouping customers in markets with some heterogeneity into smaller, more similar or homogeneous segments” (Dibb and Simkin, 2001).
There are four variables that the business can choose to segment their markets; geographic, demographic, psychographic and behavioral variables. The business can choose to segment in one variable or a combination between two or three variables. However, in order to achieve an effective segmentation, the business should have the characteristic of measurability, accessibility, and substantiality and action ability. The next step, the business has to decide on which market segment they should target on, which classified of undifferentiated marketing, differentiated marketing or concentrated marketing. Once a business has decided which segments of the market it will enter, they must decide which ‘positions’ they want to occupy in those segments. Product position means “the way the product is defined by consumers on important attributes; the place product occupies in consumers’ minds relative to competing product” (Kotler, Brown, Adam and Armstrong, 2004).
They can position their products according to specific product attributes, benefits, users’ occasions, certain classes of users, against a competitor, away from competitor and product classes. In brief, by dividing market into a group of consumers who have a similar needs and wants, the business can achieve consumers’ satisfaction easier rather than if they concentrate on broadly market. Hence, when the business can satisfy the consumers, the consumers will develop a brand loyalty. “Customers can’t fully give loyalty until they believe a company genuinely cares about them and cares about their needs” (Hein, 2004). Moreover, as brand loyalty has formed, the business will be able to receive a profit, which should be supported with accurate product positioning. 4.3.5 Marketing MixMarketing mix is a set of “controllable marketing variables that the company combines to produce the feedback it wants in the targeted market” (Kotler, Brown, Adam and Armstrong, 2004).
Marketing mix consists of 4Ps – Product, Price, Place and Promotion. Product is defined as “anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need” (Kotler, Brown, Adam and Armstrong, 2004).In order to produce a product, a business has to concern about the level of product; core, actual and augmented product. The core product is “the problem solving services or core benefits that the consumers are really buying when they obtained the product” (Kotler, Brown, Adam and Armstrong, 2004). Actual product is “product’s part, styling, features, brand name, packaging a d other attributes that combine to deliver core product benefits” (Kotler, Brown, Adam and Armstrong, 2004). Whereas the augmented product is “additional consumer services and benefits build around the core and actual products” (Kotler, Brown, Adam and Armstrong, 2004). The second element of marketing mix is price.
Price is “the amount of money charged for a product or the sum of value consumers exchange for the benefits of having or using a product” (Kotler, Brown, Adam and Armstrong, 2004). There two factors that the business should apply before set up the price; internal and external factors. Then, they can choose which type of pricing that suit the product; cost-plus, value-based, competitive or relationship-based pricing. The third element is Place, which is defined as “making products available in the right quantities and locations when customers want them” (Kotler, Brown, Adam and Armstrong, 2004). It includes physical distributions, inventory, location, transport, and channels. Intermediaries (marketing channel) are the one which distribute the product from the producer to consumer.
The last element is Promotion. It simply means the transmitting merits of the products and persuading target consumers to buy them. At the start of the products lifecycle, promotion is necessary so that potential customers know of the existence of the product. Once the product grows, promotion must become more persuasive and encourage consumers to make a purchase. 4.3.6 ImplementationMarketing implementing is to translate the plans into actions. For the successful marketing implementation, “company has to blend these elements: action programs, organization structure, decision and reward system, human resources and company culture – into a cohesive program that supports its strategies” (Kotler, Brown, Adam and Armstrong, 2004). 4.3.7 ControllingMarketing control referred as “the process of measuring and evaluating the results of marketing strategies and plans, and taking corrective action to ensure that marketing objectives are attained” (Kotler, Brown, Adam and Armstrong, 2004).
The manager should control the marketing implementation by setting a goal , measure and evaluate the performance and also correcting the error of implementation. 4.4. Marketing and BrandingProduct is the core of marketing, which including tangible goods like food or drinks or intangible services, as it is the major way to embody customers requirements; and, branding is directly associated with it. In fact, branding is all about decisio ns of products, like brand names or trademarks. Stork (2007) asserted that a brand is a unique business identity which represents the personality, quality or origin of products.
And, such a product which added value by branding would appear in every activity of marketing, namely, branding is actually react on the whole marketing system directly and indirectly. In addition, Stork (2007) also argued that branding is the process of creating distinctive and durable perceptions in the minds of consumers. This is significant, as it accords with the objective of marketing, and it is the first step to attract customers. By contrast with those basic branding factors, brand loyalty is more complicated but significant. Attracting customers is not enough, organizations demand loyalty of customers to brands to make them competitive among others.
Therefore, based on the analysis of theories above, branding and brand loyalty is vital to successful marketing, but there are still many other factors could affect their importance within the dynamic environment, like the different industry will have different types of marketing and branding. Subsequently, the further and deeper investigation will be conducted with examples of Virgin Atlantic Airway, which is a super brand in airline industry. Virtually, Design Council of UK (2007) defined that the airline industry is difficult to operate. Fixed costs are high, demand can fluctuate quite dramatically and shortages of key airport infrastructure all make it difficult for airlines to operate profitably. Relatively, the marketing for airline industry is not easy as well; the promotion or pricing would be totally different to other industries like food or drink, because its products are distinctive. However, Virgin Atlantic is doing quite well in general, it is famous on its branding and its services and it did won many rewards on that, like it came out on top in a consumer survey of travel brands in 2006. (Business Source Premier, 2006)
As discussed before, a brand is a unique business identity, and a well managed one would be the asset of an organization, and the marketing and financial value associated with its strength in a market is so-called brand equity. (Dibb et al, 2001) According to Dibb et al (2001), there are four main elements underlie the brand equity, which are brand name awareness, brand loyalty, perceived brand quality and brand associations. It is good for customers to know the brand names of products which they do or do not like, thereby, they can recognize and purchase products that satisfy their needs simply. Otherwise, the product selection would be complicated or even wrongly selection. At the same time, it is clear that brand name awareness is the very first step for sellers, which would cause familiarity; and a unique brand name or logo may reinforce the familiarity to be memorable, which will strongly remain custom ers to come again.
Due to that, organizations should promote their brand names or logos as much as possible within this stage, to gain awareness of their brands from customers. For example, one of marketing techniques of Virgin Atlantic is to advertising activity in the UK includes TV, press, magazines, outdoor posters and taxi sides, all featuring their distinctive logo. Advertising is used to encourage people to try the airline, to raise awareness of new product developments and new routes. (Virgin Atlantic, 2007)The perceived brand quality means certain perception of customers over the brand quality. This sort of perception mainly depends on consumers’ using experiences or the way organizations branded. Well marketed brands would become the indicators of quality or choice making for consumers as they have less or no ideas about the quality of certain goods in some case. As branded of its services, Virgin Atlantic is giving their customers what they want, by offering limousine services, full meal catering, multi-class services, and entertainment consoles on every seat-back. (Stealing Share, 2006)
Thus, the perceived brand quality of Virgin aircrafts is quite high; customers probably would consider it firstly or secondly while they are choosing an airline that is good at customer services. Thirdly, the brand would be more attractive and memorable if it associated with certain lifestyle or other characteristics. Virgin is one of the best choices for illustrating this point. As one of extended brands of Virgin Group, Virgin Atlantic is absolutely under the organizational culture as well, which characterized by Richard Branson, the founder of the company. Virgin’s brand values are really Branson style, which are innovative, competitive challenging, fun and so on and this also embodies in Virgin Atlantic. For instance, Virgin’s design teams always working on challenging new technologies or services, like the design of its upper class suite. (Design Council, 2007) Or, the entertainment consoles on every seat-back shows their focus on providing fun to customers.
Like other three elements discussed above, brand loyalty is also valued to brand equity thanks to its function. Dibb et al (2001) defined that brand loyalty is a strongly motivated and long standing decision to purchase a particular product or service. Once customers loyal to one specific product, the market share of that product for the company would be relatively stable, allowing the company to use its resources more effectively or obtain premium prices. In line with what discussed before, organizations could be competitive with a relative stable market share among their competitors through brand loyalty, and meanwhile companies can diminish certain costs like the cost of attracting new customers. Moreover, brand loyalty has three degrees that are recognition, preference and insistence.
The recognition is just alike as awareness of brand name; customers realize that brand is an alternative to purchase. Brand preference is stronger than recognition, as customers is showing certainly prefers on one brand over others, but they would accept substitutes wh ile the brand is not available. The last degree is the strongest one as consumers would insistent on the particular brand and will accept no substitutes. (Dibb et al, 2001) Though, it is less to happen due to various reasons, like in the airline industry, it is difficult for customers to insistent on one brand thanks to limitation of airline routes and destinations.
Marketing is a unique and vast area of business. All the success of a business depends on a successful marketing campaign. There is also much more to marketing than what is discussed here. One fundamental of any marketing program is that it work toward meeting the wants and needs of customers in the target area. Trying to force feed a product or service to an unwanting public is seldom successful and is very expensive. Which is why it is very important to research and develop all new marketing ideas so that they fit the product being offered. Do you sell ice cold lemonade on a freezing winter day? A better suggestion would be hot chocolate. However, innovation and new marketing techniques can be offered where you can do both at their respective seasons. Its all about marketing.
The challenges and obstacles involved with corporate longevity are faced and championed through marketing and its strategies. Important aspects of marketing are the acquisition of new clients, branding, and influencing behaviors that encourage sales. Each of these categories promotes business expansion and prosperity. Each organization has their own recipe for marketing and succes.
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University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 30 November 2016
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