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Marketing

Marketing

Marketing, as suggested by the American Marketing Association, is 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 stakeholders".Another definition, perhaps simpler and more universal, is the process of moving people closer to making a decision to purchase or repurchase a company's products. Simply, if it does not facilitate a "sale" then it is not marketing.Perhaps the simplest Western definition of all was that summarized by Philip Kotler in his earlier books as: "Marketing is human activity directed at satisfying needs and wants through exchange processes". On the other hand, Christian Grönroos, in the context of a move to relationship marketing, summarized a rather different European view in his definition: "Marketing is to establish, maintain and enhance long-term customer relationships at a profit, so that the objectives of the parties involved are met. This is done by mutual exchange and fulfilment of promises"

However, the most widely accepted definition of marketing on a global scale comes from the Chartered Institute of Marketing (CIM) in the UK which is the largest marketing body in the world in terms of membership. The definition claims marketing to be the "management process of anticipating, identifying and satisfying customer requirements profitably". Thus, operative marketing involves the processes of market research, new product development, product life cycle management, pricing, channel management as well as promotion. However, marketing is more of a process-oriented cross function, not a direct decision maker in these processes. It is one of the company's management tools to ensure that products and services are developed according to market requirements, and that they are profitable

Prior to the advent of market research, most companies were product-focused, employing teams of salespeople to push their products into or onto the market, regardless of market desire. A market-focused, or customer-focused, organization instead first determines what its potential customers desire, and then builds the product or service. Marketing theory and practice is justified on the belief that customers use a product/service because they have a need, or because a product/service has a perceived benefit

Two major aspects of marketing are the recruitment of new customers (acquisition) and the retention and expansion of relationships with existing customers (base management)

An emerging area of study and practice concerns internal marketing, or how employees are trained and managed to deliver the brand in a way that positively impacts the acquisition and retention of customers

Once a marketer has converted the prospective buyer, base management marketing takes over. The process for base management shifts the marketer to building a relationship, nurturing the links, enhancing the benefits that sold the buyer in the first place, and improving the product/service continuously to protect her business from competitive encroachments

Marketing methods are informed by many of the social sciences, particularly psychology, sociology, and economics. Anthropology is also a small, but growing, influence. Market research underpins these activities. Through advertising, it is also related to many of the creative arts

Contents

Types Of Markets

The word market originally meant the place where the exchange between seller and buyer took place. Today we speak of a market as either a region where goods are sold and bought or particular types of buyers (summarized from Wells, Burnett, Moriarty, pg. 65–66). When strategizing specialists in marketing comment about markets they are usually referring to the different groups of people and/or organizations. The four major market groups are:

  • 1.consumer,
  • 2.business to business,
  • 3.institutional, and
  • 4.reseller
  • Branding refers to the sum total of your company's value-proposition: products, services, people, advertising, positioning, culture, end-user and partner relationships

    Four Ps (marketing mix)

    In popular usage, "marketing" is the promotion of products, especially advertising and branding. However, in professional usage the term has a wider meaning that recognizes that marketing is customer centered. Products are often developed to meet the desires of groups of customers or even, in some cases, for specific customers. McCarthy divided marketing into four general sets of activities. His typology has become so universally recognized that his four activity sets, the Four Ps, have passed into the language

    The Four Ps are:

  • Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual good or service, and how it relates to the end-user's needs and wants

  • Pricing: This refers to the process of setting a price for a product, including discounts
  • Promotion: This includes advertising, sales promotion, publicity, and personal selling, and refers to the various methods of promoting the product, brand, or company
  • Placement or distribution refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to “where” a product or service is sold, e.g. in which geographic region or industry, to which segment (young adults, families, business people, women, men, etc.)
  • These four elements are often referred to as the marketing mix. A marketer can use these variables to craft a marketing plan. The four Ps model is most useful when marketing low value consumer products. Industrial products, services, high value consumer products require adjustments to this model. Services marketing must account for the unique nature of services. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions

    As a counter to this, Morgan, in Riding the Waves of Change (Jossey-Bass, 1988), adds "Perhaps the most significant criticism of the 4 Ps approach, which you should be aware of, is that it unconsciously emphasizes the inside–out view (looking from the company outwards), whereas the essence of marketing should be the outside in approach". Even so, having made this important caveat, the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity, as well as a framework within which these can be used

    Seven Ps

    As well as the standard four Ps (Product, Pricing, Promotion and Placement), there are also sometimes considered an extra three, totalling seven and known together as the extended marketing mix. These are:

  • People: Any person coming into contact with customers can have an impact on overall satisfaction. Whether as part of a supporting service to a product or involved in a total service, people are particularly important because, in the customers' eyes, they are generally inseparable from the total service. As a result of this, they must be appropriately trained, well motivated and the right type of person

  • Process: This is the processes involved in providing a service and the behaviour of people, which can be crucial to customer satisfaction
  • Physical evidence: Unlike a product, a service cannot be experienced before it is delivered, which makes it intangible. This therefore means that potential customers perceive greater risk when deciding whether or not to use a service. To reduce the feeling of risk, thus improving success, it is often vital to offer potential customers the chance to see what a service would be like. This is done by providing physical evidence, such as case studies, or testimonials
  • Technique

    For a marketing plan to be successful, the mix of the four "Ps" must reflect the wants and desires of the consumers in the target market. Trying to convince a market segment to buy something they don't want is extremely expensive and seldom successful. Marketers depend on marketing research, both formal and informal, to determine what consumers want and what they are willing to pay for. Marketers hope that this process will give them a sustainable competitive advantage. Marketing management is the practical application of this process. The offer is also an important addition to the 4P's theory

    Most companies today have a customer orientation (also called customer focus). This implies that the company focuses its activities and products on customer needs. Generally there are two ways of doing this: the customer-driven approach and the product innovation approach

    In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no point spending R&D funds developing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs

    The next big thing is a concept in marketing that refers to a product or idea that will allow for a high amount of sales for that product and related products. Marketers believe that by finding or creating the next big thing they will spark a cultural revolution that results in this sales increase

    In a product innovation approach, the company pursues product innovation, then tries to develop a market for the product. Product innovation drives the process and marketing research is conducted primarily to ensure that a profitable market segment(s) exists for the innovation. The rationale is that customers may not know what options will be available to them in the future so we should not expect them to tell us what they will buy in the future. It is claimed that if Thomas Edison depended on marketing research he would have produced larger candles rather than inventing light bulbs. Many firms, such as research and development focused companies, successfully focus on product innovation. Many purists doubt whether this is really a form of marketing orientation at all, because of the ex post status of consumer research. Some even question whether it is marketing

    Diffusion of innovations research explores how and why people adopt new products, services and ideas

    A relatively new form of marketing uses the Internet and is called internet marketing or more generally e-marketing, affiliate marketing or online marketing. It typically tries to perfect the segmentation strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing or one-to-one marketing

    Advertising and promotions

    Businesses need to advertise for the following four main reasons:

  • To raise customer awareness
  • To remind customers about existing facilities
  • To persuade customers to switch from our rival businesses
  • To improve and maintain the image of the business
  • The ultimate aim of these points is to attract more customers. The places our business will advertise from depends on three things:

  • Its audience
  • The size of their market.
  • The size of their advertising budget
  • Forms of Advertising and their advantages and disadvantages

    Criticisms

    1.High Prices

    Caused by:

  • High Costs of Distribution:A heavily promoted brand of aspirin sells for much more than a virtually identical non-branded or store-branded product. Critics charge that promotion adds only psychological value to the product rather than functional value
  • High Advertising and Promotion Costs
  • Excessive Markups
  • 2.Deceptive Practices

    Deceptive Pricing:Falsely advertising factory or wholesale prices or large reductions from phony high retail list prices

    Deceptive Promotion:Overstating a product’s features or performance, running rigged contests

    Deceptive Packaging: Exaggerating package contents through subtle design, using misleading labeling, etc.

    3.High-Pressure Selling

  • Salespeople are trained to deliver smooth, canned talks to entice purchase
  • Hard sales can occur because of prizes going to top sellers
  • High-pressure selling not good for long- term relationships
  • 4.Shoddy or Unsafe Products

  • Products not made well or service not performed well
  • Products deliver little benefit or can be harmful
  • Unsafe products due to manufacturer indifference, increased production complexity, poorly trained labor, and poor quality control
  • 5.Planned Obsolescence

  • Products needing replacement before they should be obsolete
  • Producers change consumer concepts of acceptable styles
  • Intentionally holding back attractive functional features, then introducing them later to make old model obsolete
  • 6.Poor Service to Disadvantaged Consumers

  • Poor may pay more for inferior goods
  • Redlining may occur in disadvantaged neighborhoods
  • Higher insurance premiums to people with poor credit ratings
  • Weblining can occur



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