Principles of Marketing | Dissertation

Principles of securities indus enterprise DissertationDefinition of merchandisingMarketing is part of both of our lives and touches us in or so substance every day. Most plenty think that change is altogether round the advertising and/or personalisedized interchange of goods and processs. Advertising and interchange, however, be just two of the many commercialise activities.In general, merchandise activities atomic number 18 on the whole those associated with identifying the particular pauperizations and need of a emollient touch grocery of nodes, and then going about delicious those customers recrudesce than the competitors. This involves doing market research on customers, analyzing their needs, and then making strategic decisions about produce rule, pricing, forward motion and distrisolelyion.Philip Kotler says, Marketing is managing profit open customer relationships. The twofold destination of market is to attract new customers by promisin g superior economic cheer and to keep and grow true customers by owning satisfaction.Broadly defined, exchange is a affable and man termrial process by which individuals and groups obtain what they need and want through creating and ex ever-changing judge with others. Narrowly defined market involves construction paying, set-laden put back relationships with customers.In short, it has been defined as the process by which companies crap time value for customers and urinate strong customer relationships in order to capture value from customers in return.The new definition given by Ameri screwing Marketing Association reads, Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging oblations that maintain value for customers, clients, partners, and society at large.The market processCreate value for customers and build customer relationships take hold of value from customers in returnIn the inaugural tetra d steps, companies live to understand consumers, create customer value and build strong customer relationships. In the final step, companies reap the rewards of creating superior customer value. By creating value for customers, they in turn capture value from customers in the form of sales, lolly and long full term customer equity.Core fancys of tradeTarget Markets and partitionA marketer bath r atomic number 18ly satisfy everyone in a market. Everyone in the market has distinguishable taste, likeliness, income and outgo habit. Not everyone likes the same well-to-do drink, automobile, college, and movie. Therefore, marketers start with market shareation. They identify and profile distinct groups of buyers who talent prefer or require variegateing simple machinerefours and market mixes. Market segments can be identified by examining demographic, psychographic, and behavioral differences among buyers. The crocked then decides which segments present the superior oppor tunitywhose needs the firm can meet in a superior fashion. The lucrative segment/s argon selected or puted for offering/selling the ingathering. For each elect tail market, the firm shoots a market offering. The offering is positioned in the minds of the stern buyers as delivering some central benefit(s). For example, Volvo develops its cars for the target market of buyers for whom auto- mobile safety is a study veneration. Volvo, therefore, positions its car as the safest car a customer can buy.Customer Needs, Wants and DemandsNeeds are the rudimentary human requirements. People need sustenance, air, water, clothing, and shelter to survive. People withal bemuse strong needs for creation, education, and entertainment.The above needs become wants when they are directed to particular(prenominal) objects that might satisfy the need. An American needs food but whitethorn want a hamburger, French fries, and a soft drink. A person in Mauritius needs food but may want a mango, rice, lentils, and beans. Wants are shaped by ones society.Demands are wants for specific products backed by an ability to pay. Many people want a Mercedes only a few are able to buy one. Companies moldiness(prenominal)iness(prenominal) measure non only how many people want their product but also how many would genuinely be forgeting and able to buy it.Product or OfferingCustomers needs and wants are action through a marketing offer or product. A product is any offering that can satisfy a need or want, much(prenominal)(prenominal) as one of the 10 basic offerings of goods, services, experiences, events, persons, places, properties, organizations, information, and judgmentions.A stigmatise is an offering from a known source. A brand name such as McDonalds carries many associations in the minds of people hamburgers, fun, children, fast food, and golden arches. These associations assoil up the brand image. All companies strive to build a strong, halcyon brand image. cheer and SatisfactionIn terms of marketing, the product or offering will be successful if it delivers value and satisfaction to the target buyer. The buyer chooses amongst incompatible offerings on the basis of which is perceived to deliver the more or less value. We define value as a ratio between what the customer gets and what he gives. The customer gets benefits and assumes price, as shown in this equationestablish on this equation, the marketer can increase the value of the customer offering by (1) raising benefits, (2) reducing costs, (3) raising benefits and reducing costs, (4) raising benefits by to a greater extent than the raise in costs, or (5) mortifiedering benefits by little than the reduction in costs.Exchange and TransactionsExchange, the core of marketing, involves obtaining a coveted product from someone by offering something in return. For exchange probable to exist, louver conditions must be satisfiedThere are at least two parties.Each society has somethi ng that might be of value to the other companionship.Each party is capable of communication and delivery.Each party is free to accept or reject the exchange offer.Each party believes it is appropriate or desirable to deal with the other party.Whether exchange truely takes place depends upon whether the two parties can agree on terms that will leave them some(prenominal) kick downstairs off (or at least not worse off) than before. Exchange is a value-creating process because it normally leaves twain parties better off.Marketing MixMarketers use numerous tools to elicit the desired responses from their target markets. These tools constitute a marketing mix. Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. McCarthy houseified these tools into four broad groups that he called the four Ps of marketing Product, Price, Place, and Promotion.Robert Lauterborn suggested that the sellers four Ps correspond to the cust omers four Cs.Winning companies are those that meet customer needs economically and conveniently and with effective communication.Marketing Philosophies and ConceptsThere are five competing models under which organizations conduct marketing activities produc- tion plan, product concept, selling concept, marketing concept, and societal mar- keting concept.The Production ConceptThe production concept, one of the oldest in backing, holds that consumers prefer products that are widely available and inexpensive. Managers of production-oriented caperes concentrate on achieving high production efficiency, low costs, and mass distribution. This orientation takes sense in developing countries, where consumers are more interested in obtaining the product than in its features. It is also used when a troupe wants to expand the market. Texas Instruments is a leading exponent of this concept. It concentrates on building production volume and upgrading technology in order to bring costs down, leading to lower termss and expansion of the market. This orientation has also been a hand out dodge of many Japanese companies.The Product ConceptOther businesses are guided by the product concept, which holds that consumers favor those products that offer the most quality, performance, or innovative features. Managers in these organizations focus on making superior products and modify them everyplace time, assuming that buyers can appraise quality and performance.Product-oriented companies a great deal purpose their products with little or no customer input, trusting that their engineers can design exceptional products. A General Motors executive said years agone How can the domain know what kind of car they want until they happen what is availablefi GM today asks customers what they value in a car and includes marketing people in the very developning stages of design.The Selling ConceptThe selling concept, another common business orientation, holds that consumers and bu sinesses, if left alone, will ordinarily not buy enough of the organizations products. The organization must, therefore, undertake an aggressive selling and promotion effort. This concept assumes that consumers must be coaxed into buying, so the companionship has a electric battery of selling and promotion tools to stimulate buying.The selling concept is practiced most aggressively with unsought goodsgoods that buyers normally do not think of buying, such as insurance and funeral plots. The selling concept is also practiced in the nonprofit area by fund-raisers, college admissions offices, and political parties.Most firms practice the selling concept when they dupe overcapacity. Their aim is to sell what they make rather than make what the market wants.The Marketing ConceptThe marketing concept, in the mid-1950s, challenges the three business orientations we just discussed. The marketing concept holds that the key to achieving organizational goals consists of the guild existence more effective than its competitors in creating, delivering, and communicating customer value to its chosen target markets.The marketing concept focuses on the needs of the buyer. Marketing is indifferent with the idea of acceptable the needs of the customer by pith of the product and the whole cluster of things associated with creating, delivering and finally consuming it.The marketing concept rests on four pillars target market, customer needs, integrated marketing, and profitability. The marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses on customer needs, coordinates activities that be active customers, and produces profits by satisfying customers.The Societal Marketing Concept slightly have questioned whether the marketing concept is an appropriate philosophy in an age of milieual deterioration, option shortages, explosive creation growth, world hunger and poverty, and neglected social services. Are companies that successf ully satisfy consumer wants necessarily acting in the best, long-run interests of consumers and societyfi The marketing concept sidesteps the potential conflicts among consumer wants, consumer interests, and long-run societal welfare.Yet some firms and industries are criticized for satisfying consumer wants at societys expense. Such situations call for a new term that enlarges the marketing concept. We propose calling it the societal marketing concept, which holds that the organizations task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a trend that preserves or enhances the consumers and the societys well-being.The societal marketing concept calls upon marketers to build social and ethical considerations into their marketing practices. They must balance and juggle the oftentimes confiicting criteria of company profits, consumer want satisfaction, and public interest. Yet a number of companies have achieved notable sales and profit gains by adopting and practicing the societal marketing concept.Marketing vs. SellingOftentimes, marketing and sales are perceived interchangeably. But in actuality, these are two different things. Selling is a small put of the entire marketing scheme. Selling is the transaction where a product is transferred from the business owner to a buyer for a price. In contrast, marketing is a process that involves several steps ranging from the generation of a product idea to the delivery of that product to the customer.Even after delivery of the product to the customer, the marketing process traverses with direct communication with the customer to obtain feedback about the product. dough from satisfied customersTheodore Levitt of Harvard drew a perceptive contrast between the selling and marketing concepts Selling focuses on the needs of the seller marketing on the needs of the buyer. Selling is preoccupied with the sellers need to convert his product into hard cash marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it.The marketing concept rests on four pillars target market, customer needs, integrated marketing, and profitability. The selling concept takes an inside-out perspective. It starts with the factory, focuses on existing products, and calls for heavy selling and promoting to produce profitable sales. The marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses on customer needs, coordinates activities that affect customers, and produces profits by satisfying customers.CHAPTER 2MARKETING ENVIRONMENTIn order to correctly identify opportunities and monitor threats, the company must begin with a thorough understanding of the marketing environment in which the firm operates. The marketing environment consists of all the actors an d forces outside marketing that affect the marketing managements ability to develop and maintain successful relationships with target customers.A companys marketing environment consists of the actors and forces outside marketing that affect marketing managements ability to develop and maintain successful relationships with its target customersImportanceThe marketing environment offers both opportunities and threatsChanges in the marketing environment often occur at a rapid pace.Marketers tend to be trend trackers and opportunity seekers.The company must use its marketing research and marketing intelligence systems to monitor the changing environment.A systematic scan of the environment admirers marketers to revise and adapt marketing strategies to meet new challenges and opportunities in the market place.The marketing environment is do up of a micro environmental and macro environment.The Companys MicroenvironmentThe micro environment consists of six forces (actors) close to the c ompany that affect its ability to serve its customersThe company itself (including various internal departments)Suppliers.Marketing channel firms (intermediaries)Customer markets.Competitors.Publics.The CompanyThe first actor is the company itself and the role it plays in the microenvironment.Top management is amenable for setting the companys mission, objectives, broad strategies, and policies.Marketing managers must make decisions within the parameters realized by top management.Marketing managers must also work most with other company departments. Areas such as finance, R D, purchasing, manufacturing, and accounting all produce better get outs when aligned by common objectives and goals.All departments must think consumer if the firm is to be successful.SuppliersSuppliers are firms and individuals that provide the resources needed by the company and its competitors to produce goods and services. They are an important link in the companys overall customer value delivery syst em.One consideration is to watch generate availability (such as supply shortages).Another point of concern is the observe of price trends of key inputs.Marketing IntermediariesMarketing intermediaries are firms that help the company to promote, sell, and distribute its goods to final buyers.Resellers are distribution channel firms that help the company find customers or make sales to them.These include wholesalers and retailers who buy and resell merchandise.Resellers often perform important functions more cheaply than the company can perform itself. Seeking and working with resellers, however, is not easy because of the power that some demand and use.Physical distribution firms help the company to stock and execute goods from their points of origin to their destinations. Examples would be warehouses (that store and hold dear goods before they move to the abutting destination).Marketing services agencies (such as marketing research firms, advertising agencies, media firms, etc. ) help the company target and promote its products to the right markets.Financial intermediaries (such as banks, realization companies, insurance companies, etc.) help finance transactions and insure against risks associated with buying and selling goods.CustomersThe company must study its customer markets closely because each market has its own special characteristics. These markets normally includeConsumer markets (individuals and households that buy goods and services for personal consumption).Business markets (buy goods and services for further processing or for use in their production process).Reseller markets (buy goods and services in order to resell them at a profit).political science markets (agencies that buy goods and services in order to produce public services or transfer them to those that need them).International markets (buyers of all types, including governments, in foreign countries).CompetitorsEvery company faces a wide range of competitors. A company must secure a strategic advantage over competitors to be successful in the marketplace. No single competitive strategy is best for all companies .PublicsA public is any group that has an actual or potential interest in or impact on an organizations ability to achieve its objectives. A company should prepare a marketing plan for all of its major publics as well as its customer markets.Generally, publics can be identified as beingFinancial publics.Media publics.Government publics.Citizen-action publics.Local publics.General public.Internal publics.The Companys MacroenvironmentThe macroenvironment consists of the larger societal forces that affect the microenvironmentdemographic.Economic.Natural.Technological. policy-making. paganThe company and all of the other actors operate in a larger macroenvironment of forces that shape opportunities and pose threats to the company. Major forces in the companys macroenvironment includeDemographic milieuDemography is the study of human populations in terms of size, density, location, age, sex, race, occupation, and other statistics. It is of major interest to marketers because it involves people, and people make up markets.Demographic trends are always changing. Some of the more interesting trends areThe worlds population (though not all countries) rate is growing at an explosive rate that will before long exceed food supply and ability to adequately service the population. The greatest danger is in the poorest countries where poverty contributes to the difficulties.The most important trend is the changing age structure of the population. Generational marketing is possible, however, caution must be used to avoid generational alienation.Changing family structureGeographic shifts in population will also alter demographics.Changing educational take In general, the population is become better educated. The work force is becoming more white-collar. Products such as books and education services appeal to groups by-line this trend. Te chnical skills (such as in computers) will be a must in the future.The final demographic trend is the increasing ethnic and racial diversity .Economic environsThe economic environment includes those factors that affect consumer buying power and spending patterns. Major economic trends includeChanges in incomepersonal consumption (along with personal debt) has gone up (1980s) and the 1990s brought recession that has caused adjustments both personally and corporately in this country. In the 2000s, consumers are more careful shoppers.Value marketing (trying to offer the consumer greater value for their dollar) is a very sound strategy in the 2000s. Real income is on the rise again but is being cautiously guarded by a value-conscious consumer.Income distribution is clam up very skewed in the United States and all classes have not shared in expandity. In addition, spending patterns show that food, housing, and transportation unbosom account for the majority of consumer dollars. It i s also of note that distribution of income has created a two-tiered market where there are those that are affluent and less affluent.Classes of consumers include stop number classspending patterns are not stirred by current economic events and who are a major market for luxury goods. center(a) classsomewhat careful about its spending but can still afford the good life some of the time.Working classmust stick close to the basics of food, clothing, and shelter and must try hard to save.Under class(persons on welfare and many retirees) must count their pennies when making even the most basic purchases.Changing consumer spending patternsConsider Engles Laws where differences were famed over a century ago by Ernst Engle regarding how people shift their spending across food, housing, transportation, health care, and other goods and service categories as family income rises. Spending patterns have generally supported his ideas.Marketers must carefully monitor economic changes so they wil l be able to prosper with the trend, not suffer from it.Natural EnvironmentThe rude(a) environment involves natural resources that are needed as inputs by marketers or that are affected by marketing activities. During the past two decades environmental concerns have steady grown. Some trend analysts labeled the 1990s as the Earth Decade, where tax shelter of the natural environment became a major ecumenic issue set about business and the public.Specific areas of concern wereShortages of raw materials. Staples such as air, water, and woodland products have been seriously damaged and non-renewable such as oil, coal, and various minerals have been seriously depleted during industrial expansion.Increased pollution is a worldwide problem. Industrial damage to the environment is very serious. Far-sighted companies are becoming environmentally friendly and are producing environmentally safe and recyclable or perishable goods. The public response to these companies is encouraging.Gove rnment intervention in natural resource management has caused environmental concerns to be more practical and necessary in business and industry. Leadership, not punishment, seems to be the best policy for long term results. Instead of opposing regulation, marketers should help develop solutions to the material and energy problems veneering the world.Concern for the natural environment has spawned the so-called green movement.Environmentally sustainable strategies and practices are being created.Companies are recognizing a link between a healthy economy and a healthy ecology.Technological EnvironmentThe scientific environment includes forces that create new technologies, creating new product and market opportunities. engine room is perhaps the most dramatic force shaping our destiny.New technologies create new markets and opportunities. Every new technology, however, replaces an older technology.The challenge is not only technical but also commercialto make practical, affordable v ersions of products.Political EnvironmentThe political environment includes laws, government agencies, and pressure groups that influence and line various organizations and individuals in a given society. Business is regulated by various forms of legislation.Governments develop public policy to guide commercesets of laws and regulations bound business for the good of society as a whole.Almost every marketing activity is subject to a wide range of laws and regulations.Some trends in the political environment includeIncreasing legislation to nurture companies from each other.Protecting consumers from unfair business practices.Protecting interests of society against huffy business behavior.Changing government agency enforcement. New laws and their enforcement will continue or increase.Increased emphasis on ethics and socially amenable actions. Socially responsible firms actively seek out ways to protect the long-run interests of their consumers and the environment.The recent rash o f business scandals and increased concerns about the environment have created fresh interest in the issues of ethics and social responsibility.The crush in e-commerce and Internet marketing has created a new set of social and ethical issues.Privacy issues are the primary concern.Another cyberspace concern is that of access by vulnerable or unauthorized groups.Cultural EnvironmentThe cultural environment is made up of institutions and other forces that affect societys basic determine, perceptions, and behaviors. Certain cultural characteristics can affect marketing decision-making. Among the most moral force cultural char- acterisitics arePersistence of cultural values. Peoples core beliefs and values have a high degree of persistence.Core beliefs and values are passed on from parents to children and are reinforced by schools, churches, business, and government.Secondary beliefs and values are more open to change.Shifts in secondary cultural values. Because secondary cultural value s and beliefs are open to change, marketers want to spot them and be able to capitalise on the change potential.The Yankelovich Monitor has identified eight major consumer themesParadox. authority not.Go it alone.Smarts really count.No sacrifices.Stress hard to beat.Reciprocity is the way to go.Me 2.Societys major cultural views are verbalised inPeoples views of themselves. People vary in their emphasis on serving themselves versus serving others..Peoples views of others. Observers have noted a shift from a me-society to a we-society. Consumers are spending more on products and services that will improve their lives rather than their image.Peoples views of organizations. People are willing to work for large organizations but expect them to become increasingly socially responsible. Many companies are linking themselves to worthwhile causes.Peoples views of society. This orientation influences consumption patterns. acquire American versus buying abroad is an issue that will continu e into the abutting decade.Peoples view of nature. There is a growing trend toward peoples feeling of bid over nature through technology and the belief that nature is bountiful. Nature, however, is finite. honor of nature and sports associated with nature are expected to be significant trends in the next several years.Peoples views of the universe. Studies of the origin of man, religion, and thought-provoking ad campaigns are on the rise. Spiritual individualism may be a new theme.Chapter 3Marketing segmentationMarket SegmentationIt is the process of dividing a market into distinct group of buyers who have distinct needs, characteristics or behavior and who might require separate product or marketing mixes.Market segmentA group of consumers who respond in a similar way to a given set of marketing efforts.For Example In the car market, consumers who want the biggest, most comfortable car regardless of the price make up one market segment. Consumers who care mainly about price and operating economy make up another segment.Requirements of Market SegmentsIn addition to having different needs, for segments to be practical they should be evaluated against the following criteriaidentifiable the differentiating attributes of the segments must be measurable so that they can be identified. convenient the segments must be reachable through communication and distribution channels. tangible the segments should be sufficiently large to justify the resources required to target them. whimsical needs to justify separate offerings, the segments must respond differently to the different marketing mixes.Durable the segments should be relatively stable to minimize the cost of frequent changes.A good market segmentation will result in segment members that are internally homogenous and externally assorted that is, as similar as possible within the segment, and as different as possible between segments.Bases for Segmentation in Consumer MarketsConsumer markets can be segmented o n the following customer characteristics.GeographicDemographicPsychographic behavioralGeographic SegmentationThe following are some examples of geographic variables often used in segmentation.Region by continent, country, state, or even similaritySize of metropolitan area segmented according to size of populationPopulation density often classified as urban, suburban, or pastoralClimate according to weather patterns common to certain geographic regionsDemographic SegmentationSome demographic segmentation variables includeAge genderFamily sizeFamily lifecycleGeneration baby-boomers, Generation X, etc.IncomeOccupationEducationEthnicityNationality worshipSocial classMany of these variables have standard categories for their values. For example, family lifecycle often is expressed as bachelor, married with no children (DINKS Double Income, No Kids), full-nest, empty-nest, or nongregarious survivor. Some of these categories have several stages, for example, full-nest I, II, or III depe nding on the age of the c