Significance of Marketing Mix And Concepts
- Free Turnitin report
- 4,00000 + Total Satisfied Students
- 150+ Executives for Support Service
13889 Downloads 14 Pages 3529 Words
All business concerns aim at satisfying the wants and expectations of their customers. Marketing is, thus, an essential function of all organizations. Instrumental change has been witnessed in perceptions of businessmen regarding marketing. It has evolved from being product centric to being customer oriented. Contemporary business enterprises are not merely focused on selling goods but have increased their horizons and concentrate on selling satisfaction. The range of marketing activities and their impact is very broad and is difficult to be evaluated entirely (Aaker, 2007).
In this aggressively competitive business environment wherein companies are selling homogenous products, it becomes even more important to direct more efforts towards its marketing initiatives.
The marketing concept states that the key to accomplishing company goals lies in the determination of expectations and needs of the target segments and providing them desired satisfaction efficiently and efficiently than rivals. The American Marketing Association defines marketing as the set of activities, processes and institutions for the creation, communication, delivery and exchange of offerings which create value for consumers, partners, clients and the community at large (Brodie, Coviello and Winklhofer, 2008). On the other hand, Kotler defines marketing as the science and art of selecting the target audience and acquiring, retaining and developing customers by creating, communicating and delivering high value (Kotler and Armstrong, 2005).
The main elements of marketing process comprise four stages i.e. situational analysis, marketing strategy, marketing mix decisions and execution and control. Situation analysis entails an assessment of situation in which the organization is currently operating to identify the unfulfilled wants of customers (Allen and Fjermestad, 2001). It includes an analysis of both the internal and the external environment. SWOT, PEST and 5C analyses are some types of situational analysis. Once the opportunities for satiating the needs of customers which are unfulfilled are determined, a marketing strategy for chasing the opportunities is formulated. A sound marketing strategy includes segmenting, targeting, positioning and value proposition (Amalesh, 2011). Once the STP process is completed then comprehensive strategic decisions relating to elements of the marketing mix are taken. This includes product development, decisions regarding pricing, distribution channels and development of promotional campaigns. The concluding step of the process requires close monitoring of the marketing initiatives. Due to changes in the marketplace, marketing mix needs to be adjusted for accommodating changes (Brown, 1993).
A company which undertakes and administers its marketing efforts quite intensively and religiously, taking into consideration all the components of the marketing mix is referred to as a marketing oriented business. However, in the present case, Mephisto which is a producer of technically refined electromechanical control devices has been following a regressive approach towards marketing. The target customers of the company involve chemical processing companies. The organization has instructed its sales force to install the products in the processing plants of customers to provide cut out mechanism and safety in the production unit. Mephisto is presently suffering from huge loss as the profits have curtailed down by 15%.
The company is still following the steps of its founder James Watkinson who stressed on manufacturing right and high quality products which would automatically open the market for their products. However, this approach is not effective for sustained competitive advantage as the buyers are unaware of the requirement of safety and such types of products do need marketing (Coviello and Brodie, 2001). In addition to this, new entrants were emerging, who are presenting technically innovative products.
The company is still adamant on its policy of high quality products and minimal marketing as it believes that the products of new ventures are just a passing fad and the consumers will come back to their premium products (Cui and Choudhury, 2002). This strategy of the company cannot prove to be fruitful in the current volatile business environment wherein marketing is essential to differential the homogenous goods of different companies. In addition to this, the manufacturer is also averse to providing bulk discounts and other sales promotion schemes. This results in shifting of customers to more lucrative offers provided by competitors (Culliton, 2008). A market oriented approach will help Mephisto in identifying the untapped needs of its target market, meet their wants and provide them required information. This strategy will have some costs mainly in the areas of sales promotion i.e. advertisements, discounts. But this cost will be subsided by the benefits that the company will reap. The most important advantages are that the firm will be able to establish brand recognition and preserve its loyal customer base (David, 2011).
Political factors – The government of United Kingdom has become very attentive to its environment. Its policies relating to chemical industry and proper control of toxic chemicals present good opportunities for the products of the company. The political elements of UK such as pricing regulation, ruling government, taxation rates and others are in favor of Mephisto (Denzin, 2006).
Economic factors – A number of economic aspects like exchange rate, growth rate, unemployment rate and inflation rate needs to be taken into account by Mephisto as it deals with the production of safety devices for chemical companies. The current economic state of UK is quite stable and the entire country is bouncing back from the negative effects of recession. Chemical companies for whom these safety devices would have been an additional cost can now again install them in their plants (Grete, Noreen and Susan, 2003).
Social factors – Market environment, ethical considerations and the buying pattern of the industries highly influence the marketing decisions of the company. Increased focus on workers’ safety in chemical plants is compelling companies to take proper care of the safety. This presents good opportunities to Mephisto for enhancing its market position and share (Helen, 2011).
Technological – The Company is required to adopt latest technology for its products which can be easily accessed by it now subsequent to the free trade policies of European Union (Johnson, Scholes and Whittington, 2005).
Competition – Rivalry from other companies is high and Mephisto needs to formulate effective marketing strategy to stay in the market (Birtwistle, Nobbs and Fiorito, 2003).
Threat of substitutes – This is not very strong as there are no substitutes available for these safety devices.
Threat of new entrants –This is relatively quite high due to policies of EU. Already many new companies have entered the industry with their technologically innovative safety products. Mephisto is required to formulate a marketing strategy which will reinstate its firm position in the market (Kotler and Armstrong, 2005).
Suppliers bargaining power –Bargain power rested with suppliers is quite moderate. This places the company in an overpowering position.
Bargaining power of customers – This is also quite moderate as safety management is mandatory in all industries. Mephisto sells its devices in form of long term contracts and therefore, the switching cost for buyers is very high (Lee and Miller, 2012).
The electro mechanical control devices produced by Mephisto are currently being supplied only to the chemical industries. The company can segment its audience on the basis of safety requirements. There are other industries as well in which safety maintenance and management holds great importance. These industries can be pharmaceutical and fertilizer industries. Mephisto will not require additional license for entering into these sectors (Mandy, Christopher and Karinna, 2006).
Mephisto must use a multi-segment target marketing strategy instead of a narrow focused strategy which it is currently espousing. Though chemical companies are seen as the major contributors to a substantial percentage of total revenues of the company, but it should also design its marketing strategy to target other business class customers. For instance, for the purpose of entering pharmaceutical industry it can focus on effective advertisement policies for its devices and can also make use of sales promotion techniques (Pires, Stanton and Rita, 2006).
Consumer behavior is of utmost importance in any industry and any transaction processing whether B2B or B2C. The current customers of Mephisto’s electro mechanical safety devices are chemical industries (Salaimeh, 2008). As the product costs very much, the customers first want to try and test the quality and dependability. Prior to making the purchase decision, the purchasers are going to analyze the availability of substitutes and will also compare prices of other company’s products. Buyers largely impact the marketing activities of a company by their purchasing patterns and behavior (Walter, 2011).
For the purpose of marketing its product to pharmaceutical and fertilizers industry, the firm will require a new positioning strategy. This new positioning strategy should be aimed at presenting the electro mechanical safety devise as very important for the two industries. Proper advertising and promotional campaigns will be required to effectively position the product in minds of its potential customers. The message should be tactfully designed in a manner that its attributes are clearly communicated to the target market (Yin, 2003).
Competitive advantage is the strategic advantage which an organization enjoys over other companies in the same industry. Mephisto currently follows focus differentiation strategy. It offers its superior quality products to a niche market i.e. only chemical industries. For the intention of gaining an edge over its competitors, the company can use product development strategy (Importance of Marketing, 2013). Another strategy that can be implemented by Mephisto is cost leadership strategy. This will help particularly as new entrants are coming up with their technologically advanced products and they will be priced higher. Producing devices at a low cost coupled with maintaining the quality benchmarks will make the goods of the company distinct from that of its rivals (Lorette, 2012). Developing products i.e. the safety devices in such a way not only reduces its cost but also makes it effective to be used. This is a strong competitive advantage that the company can enjoy like no other brand.
Mephisto currently uses its technically qualified sales force to sell and install the safety devices in chemical industries. If the company wants to increase convenience to consumers then a parallel distribution channel must be designed to access its industry customers in simpler manner and the devices can be directed from the producer to the customers on demand and at competitive prices (Richards, 2012). Apart from its manufacturing unit and corporate office, the company can also open up its factory outlet in different centers from where its customers can directly purchase the required and desired quantity of safety devices. The delivery time must be sped up as it is really slow as compared to the industry average (Suttle, 2013).
Pricing strategy involves evaluation of price which is being quoted for the goods or services and the way in which it is incorporated in the marketing strategy of the company. The current pricing strategy of the company is done on a cost plus basis i.e. total costs being computed and a fixed percentage of profits is added (The Relationship Between Business Strategy and Marketing, 2012). The pricing of Mephisto currently is very non-competitive. In order to make the pricing strategy more effective it should use a competitive based pricing mechanism. Under this, the product price will initially be a bit low so that a large number of industries in chemical as well as in pharmaceutical and fertilizers can be accessed. In addition to this, the company should give bulk discounts. It can also attempt to temporarily reduce its prices so that purchase volume can be increased (The Marketing Environment, 2012).
The promotional strategies adopted by Mephisto are very regressive. Little advertising and sales promotion was undertaken by the organization. When there was some extra money the company purchased some advertising space in The Chemical Processors’ Quarterly. However, the company needs to perk up its promotional activity to persuade its customers into buying its safety devices (Brodie, Coviello and Winklhofer, 2008). As the company is dealing in B2B business transactions, social media and other such modern forms of promotion will not reap desired results. Therefore, Mephisto should stick to conventional form of advertising and must also work on its word of mouth publicity. When the customers are other business concerns, then strong word of mouth publicity along with powerful customer relationship management works as the best promotional combination to achieve organizational goals (Cui and Choudhury, 2002). When a company maintains good relations with its clients and offers them bulk discount as a result of their long association then it helps in retaining the customers. In order to reach out to the pharmaceutical and fertilizers companies, Mephisto must resort to aggressive advertising.
The extended marketing mix comprises of three more elements in addition to product, place, price and promotion. These three elements are people, physical layout and process. In the case of McDonalds, the fast food chain has chosen Asian market as its new target segment as the enterprise has received favorable responses from several Asian nations and substantial profits have been derived from these regions (Walter, 2011). McDonalds has made use of all the 7Ps of the marketing mix. The physical layout of its stores is very attractive and consumer friendly. In addition to this, the employees of the outlets are also effectively trained to deliver value to the customers. The processes of the company are all automated using the latest technology and hence saves up a lot of time (Culliton, 2008).
McDonald’s works on franchisee model across the world. Due to its franchisee model it is able to have global presence and have high level of local ownership. It has given it an opportunity to act as multi-local company. The main feature of its marketing mix is that at most of the places it offers products and services which relates to the local environment. Because of this its customers feel themselves connected with the local culture. This feature helped it to penetrate effectively in the Asian markets. Here it focused on catering the needs of local people by launching free home delivery facility. It helped it to serve even those customers, who due to their busy schedule were not able to visit the store (Importance of Marketing, 2013). To operate effectively in the Asian markets, company segmented the existing market in two categories and then designed its marketing mix. Firstly, for the working professional it introduced free delivery scheme so as to expand the reach of its products. Secondly, to penetrate deeper in the market, they tried to create the ambience of its local stores in such a manner that it resembles to some local restaurant. It helped it to connect to the local customers in better manner. Further, its customized products and services further added advantage as McDonald was able to meet the taste of the local crowd (Coviello and Brodie, 2001).
McDonald has its presence around the global and is operating in around 119 countries. Reports show that its entry in Asian markets enabled it to boost its sales in 2011. It benefitted from the emerging markets of India and China a lot and is currently having approximately 1100 store in China. The company is facing lot of competition in the Chinese markets from the local players (The Marketing Environment, 2012). To succeed in the Asian market, McDonald focused to develop its services and products that they meet the expectation of the community. In order to achieve this, it redesigned its original menu according to local taste and also worked on its pricing policies. It added lot of spicy food stuff in its menu specially to provide homely taste to the customers in the Asian market (Lee and Miller, 2012). After entering in the Asian market, it realized very soon that this region has lot of potential and is working continuously to expand its network in Asian markets. But for this the company will have to precisely redefine its policies as this market is totally different for the European market (Lorette, 2012).
There are many players in the international market who are operating in the food and beverages industry and have international presence. But, McDonald, due to its concept of “think global act local” can be adjudged as a truly global organization. It started to grow in late 80’s and soon realized that to grow in the competitive market it is very essential for it to expand its product line. In addition, it needs to explore newer market also. McDonald did not find it difficult to enter in international market, the main challenge it faced was to remain at the top by continuously capturing local market form the local restaurants. It was very difficult for the company as it has to offer better products and services at competitive prices (Yin, 2003). Although it was doing well in the European and American markets, and had an exponential growth rate in these markets, but as soon as it entered in the Asian markets, the company started to feel heat. Asian countries are much diversified in terms of culture and attitude moreover, taste of people is entire different from that of its European and American customers, so it was hard for the company to adjust to the local needs and requirements (Pires, Stanton and Rita, 2006). It overcame from this issue by revamping its menu according to the taste of local customers. For example, it launched Tertiyaki Mac in Japan, Filet-O-Fish in China. In addition, to attract Indian Customers, it started using beef in burger instead of lamb meat. It produced dual benefits for McDonald, firstly is matched the taste of its products according to the needs of customers and secondly, it generated employment opportunity for the local community. All the above mentioned activities adopted by McDonald prove that it thinks global and acts local (Allen and Fjermestad, 2001).
Hence, subsequent to the evaluation of both the cases i.e. Mephisto and McDonalds it can be inferred that marketing holds great importance in the achievement of organizational goals. In this competitive business environment it is the combination of the marketing mix elements which acts as the savior for companies. Marketing strategies should be accommodated as per the changing marketplace (Importance of Marketing, 2013).
Number of pages: 16
Writer's Qualifications: Masters
123794 DownloadsView or Download
Number of pages: 11
Writer's Qualifications: Graduation
87627 DownloadsView or Download
Number of pages: 14
Writer's Qualifications: Graduation
67817 DownloadsView or Download
Number of pages: 7
Writer's Qualifications: Graduation
67128 DownloadsView or Download
Get all these features for £54.12 FREEProceed to Order
It’s time to turn to our experts for assignment writing service.