Introduction to Marketing Concepts and Strategies

Posted on Sep 21, 2024 in Economy

Relationship Marketing

Relationship marketing seeks to forge long-term, mutually agreeable relationships between key parties to gain and retain their preference and long-term purchases.

Network Marketing

Network marketing involves the company and stakeholders who support it, along with those who have established mutually beneficial business relationships.

Marketing Channels

To reach a target market, marketers use three marketing channel types:

Communication channels: To deliver messages to target buyers and receive messages from them.
Distribution channels: To display or deliver the physical product or service to the buyer or user.
Transaction channels: For transactions with potential buyers. These include banks and insurance companies that facilitate transactions.

Supply Chain

Supply chain describes a longer channel that extends from raw materials and components through to finished products.

Levels of Competition

Brand competition: A company sees as competitors those who offer similar products and services to the same customers at similar prices.
Industry competition: A company sees as competitors all companies that produce the same product or product classes.
Form competition: A company sees as competitors all companies that produce products and provide the same service.
Generic competition: A company sees as competitors all companies competing for the same consumer spending.

Marketing Environment

The marketing environment consists of the task environment and the macro environment. The task environment includes the immediate actors involved in the production, distribution, and promotion of the offer. These actors are the company, suppliers, distributors, dealers, and target customers.

The macro environment consists of six components: demographic, economic, natural, technological, political-legal, and cultural. These contain forces that can affect the actors’ work environment.

Marketing Mix

Marketing mix refers to the marketing toolset that a company uses to achieve its marketing objectives in the target market.

Concepts According to Which Firms Carry Out Their Activities

Production concept: Argues that consumers prefer products that are widely available and inexpensive. Production-oriented managers focus on achieving high production efficiency, low costs, and mass distribution.
Product concept: Argues that consumers prefer products that offer better quality, performance, and innovative features. Managers will focus on generating superior products and improving them over time.
Sales concept: Argues that consumers and businesses, if left alone, usually do not acquire a sufficient quantity of the organization’s products, so the organization should undertake aggressive sales efforts and promotion.
Marketing concept: Maintains that the key to an organization achieving its goals is to be more effective than its competitors in creating, delivering, and communicating value to their target markets.

Marketing Pillars

Target market: Companies get optimal results when they carefully choose their target markets and develop tailored marketing programs.
Customer needs: A company can define its target market but not properly understand the needs of customers. Types of needs include expressed, real, unspoken, delight, and secret.
Integrated marketing: When all departments of a company work together to serve the interests of the client, the result is integrated marketing. However, not all employees have the ability and motivation to work for the customer. Integrated marketing takes place at two levels: First, different marketing functions should work in a coordinated manner from the customer’s standpoint. Second, other departments should be devoted to marketing, as they should also think of the customer.
Profitability: The purpose of the marketing concept is to help companies achieve their business objectives. A company makes money by satisfying the needs of its customers better than its competitors.

Circumstances to Take the Marketing Concept Seriously

Sales decline: When sales go down, companies are scared and look for answers.
Slow growth: Slow growth causes some companies to seek new markets. They realize they need marketing skills to identify and select new opportunities.
Changing shopping patterns: Many companies operate in markets characterized by rapid changes in customer desires. They need more marketing knowledge to keep abreast of changing values and competitors.
Growing competition: Companies could be under attack from powerful competitors. All companies in deregulated industries need marketing knowledge.
Increasing marketing costs: Companies could realize that their spending on advertising, sales promotion, etc., is not performing well. Management should improve its marketing efforts.

Social Marketing

Social marketing maintains that an organization’s task is to identify the needs, desires, and interests of target markets and provide satisfactions more effectively and efficiently than competitors to improve consumer and social welfare.

Company Restructuring

Re-engineering: To focus on key processes rather than functional departments, each led by multidisciplinary teams.
External sources: To buy more goods and services from outside to achieve better perceived quality.
E-commerce: To attract customers, stores offer nearly everything online.
Benchmarking: To rely on self-improvement by considering companies with world-class performance and adopting best business practices.
Alliances: To become part of networks of partner companies.
Partner-suppliers: Many suppliers use a few reliable relationships, working in close partnership with the company.
Focus on the market: To organize products by market segment.
Be global and local: To have both a local and global presence.
Decentralization: To encourage more local initiative instead of top-down management.

Marketer Adjustments

Marketing to relationships: To focus on forging lasting relationships with customers rather than just transactions.
Customer lifetime value: To make a profit by managing the lifetime value of customers rather than just selling a chain.
Customer share: To try to increase customer share rather than just market share.
Targeted marketing: To be the best company for well-defined target markets rather than trying to sell around the world.
Individualization: To individualize and personalize messages and offers rather than selling the same offer to all market members.
Customer data base: To build a rich data warehouse with information about customer shopping and preferences, rather than just compiling sales data.
Integrated marketing communication: To present a consistent brand image across all customer contacts, rather than relying on a single communication tool.
Partner channels: To treat intermediaries as partners in delivering value to customers.
Every employee is a marketer: To recognize that all employees should focus on customers, rather than thinking that marketing only applies to the marketing staff.
Model-based decision making: To base decisions on facts that tell us how the market works, rather than on intuition and models.