Introduction to Marketing
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After you have completed this module, you will:
|Read excerpt||Introduction to Marketing|
Why Open School of Management believes that competences in marketing are crucial
Marketing management is a discipline used in business which focuses on practical applications of marketing techniques and management of a company's marketing resources and activities. The objective being to effective use a company's resources to increase customer base, improve customer opinions of the products and services, and increase the perceived value of the company.
The purpose of marketing management is to help a company identify and source potentially successful products for the marketplace. If the potential is present, then promoting them by differentiating them from similar products is the next step. With larger businesses, getting products or services to the marketplace may include market research, producing marketing plans, and product development. Shared management for both small and large companies includes strategically overseeing advertising, promotion, distribution for sale, and customer service and public relations.
Marketing management is being responsible for the marketing resources of a product or business. Without any kind of marketing management, businesses would have trouble promoting their products or services. Marketing management allows for a broad array of products and services to be marketed without consumer confusion. With the many elements of getting consumers what they want, marketing management assesses the demand and helps companies to put out only the most desired products and services.
When marketing first became a needed asset to businesses, marketing firms focused on a production orientations specializing in producing as must as possible of a product or service. Firms exploited economies of scale until the minimum efficient scale was reached. Production orientations was, and still is, deployed when a high demand for a product or service exists; but it is coupled with the idea that consumer tastes and desires will not rapidly change.
In today's more logical marketing place, marketing concept looks at complex activity and acknowledges that everything matters; because a broad and integrated perspective is a necessity in developing, designing and implementing marketing programs and activities. Most commonly referred to as the holistic marketing concept, its four components are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing. Whereas market segmentation and positioning have increased divergences of society, further segregating and preventing a holistic population; Holistic Marketing helps unite the segments in an attempt to improve the entire market through social responsibility and unity. The purpose of Holistic marketing is to do away with the political marketing activities of market segmentation, or "divide and conquer".
Every good marketing strategy has several elements to it, which is where a marketing mix comes into play. A well planned mix has four controllable elements of a product's marketing plan commonly referred to as the 4Ps. Those elements being: product, price, place, and promotion. The first P (product) can sometimes be substituted by presentation. The four elements are adjusted until they are in the right combination that best serves the needs of the product's customers; all while generating optimum income.
The one necessity to any marketing strategy is demand for the product or service. If there is no demand, than any marketing would be not only a waste of time and resources, but a waste of money. That is why market research is in the early stages of marketing; to determine the demand and estimate market potential, if any. There can be no demand without market potential. Estimating market potential is determining whether there is a market for the product at all. Assuming there is, establishing the level of demand dictates what kind and how much marketing needs to be applied. Different products and services have different market based estimates and demands.
There are many market structures that can be found in the marketplace. Monopolistic competition is an imperfect competition where many producers sell products that differentiate from one another by branding or quality, and are not perfect substitutes. In this type of structure, a company takes the prices charged by others as given and ignores the impact of its own prices on the prices of other companies. The Oligopoly structure is when a market is run by a small number of companies that, as one, control the majority of the market share. A Duopoly is a special case of an oligopoly with two firms. A Monopsony is when there is only a single buyer in a market. An Oligopsony is a market where many sellers can be present but meet only a few buyers. A Monopoly is where there is only one provider of a product or service. A Natural monopoly is a monopoly where the economies of scale cause efficiency to increase continuously with the size of the firm. It is a natural monopoly if the firm is able to serve the entire market demand at a lower cost than any combination of two or more smaller, more specialized firms. And a Perfect competition is a theoretical market structure that has no barriers to entry, an unlimited number of producers and consumers, and a perfectly elastic demand curve.
Aside from the many structures and techniques or marketing, knowing how consumers make purchasing decisions is an invaluable bit of knowledge. There are three ways of analyzing consumer decision. Economic models which are largely quantitative and based on assumptions of rationality and near perfect knowledge. Psychological models which are models concentrated on psychological and cognitive processes such as motivation and need recognition. And Consumer behavior models which are practical models used by marketers.
All types of models are designed to further understand the consumer decision making process. There are five stages that a consumer goes through when trying to decide to purchase a product or service. The first stage is Problem/Need Recognition, in which the consumer recognizes what is essentially the problem or need, and consequently they can identify the product or kind of product that is needed. Next is the Information Search where the consumer searches for the product that would best satisfy their needs. After coming up with a list of possibilities while researching, the Evaluation of Alternatives begins. Now with a few products found in the search, the consumer has to evaluate and understand which one would be best suited for them. The fourth stage is usual the main focus of the consumer decision process, for consumers; the Purchase. After the consumer has found the product that best suits their needs, they should have every intention of buying the product; but there two things that can change the decision of buying, that is what other peers of the consumer think of the product and any unforeseen circumstances. The final stage is Post Purchase Behavior, in which after purchasing a product the consumer feels that buying the other product might have been better. For a company, this is an important part of the consumer decision process. Taking care of post purchase dissonance not only spreads good words for the product, but also increases the chance of frequent repurchase.
Marketing in the market industry requires a certain type of manager. A marketing manager's primary task is to manage the marketing resources of a product or business. They can be in charge of a single product or brand, or can be the general manager who is responsible for a broad array of products and services. A business, depending on size and marketing needs, can employ several marketing managers; but small businesses are less likely to require the services of such a professional.
In order to get a marketing firm's name out in the world, they must market. Hence, marketing in the market industry is like presenting a resume for the entire firm by demonstrating the resources of the firm in order to make the firm known. It is essentially grabbing the attention of companies much like grabbing the attention of customers; performing market research, producing a marketing plan, product development, and advertising. Learning and the needs of both potential clients and customers, is needed to be successful at marketing.
One tool that especially helps when marketing is the Net Promoter Score (NPS). That score is based on the idea that every customer can be placed in three groups: Promoters, Passives, and Detractors. Promoters are enthusiastic customers who will repeatedly buy as well as refer others, furthering growth. Passives are satisfied to a certain extent, but are not as enthusiastic, and therefore, are vulnerable to competitive offers. And Detractors are discontented customers who can damage the brand and impede growth with negative word-of-mouth.
Determining which customers are which types, there is one question that needs to be asked. "Would you recommend, said product or company, to a friend or colleague?" The answer to that question can track these groups and give a clear measure of the company's performance through the consumer's eyes. Every customer's response is graded on a scale of 0-to-10 and categorized. Promoters are considered customers who score 9 or 10, Passives always score between 7 or 8, and any score between 0 and 6 are considered Detractors. To calculate the NPS, take the percentage of Promoters and subtract the percentage of Detractors.
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