Marketing principles for organizations

1. Marketing Philosophy

The adoption of marketing is nearly as old as humanity itself.  Whenever there is a consumer demanding a product or service and a supplier willing to supply such good, marketing is adopted.  The marketing philosophy essentially entails the strategic organizational aim of determining needs and wants of selected markets and providing goods and services that satisfy such wants in a more efficient and effective way than competitors.  In the last decade several organizations started following such principle in order to endure in the market.

For instance, McDonald’s Corporation applies a strong marketing orientation.  They are constantly keen on what the customer wants and change their products and services accordingly.  For example, McDonald’s adopted the philosophy of ‘QSC & V’ to attract and retain clients.  It stands for quality, service, cleanliness and value.  They guarantee that clients enter a spotless clean restaurant and are served by friendly personnel.  Indeed employees are carefully thought the art of servicing clients in all regions across the world.

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This is a challenging principle as one can note.  However, some meticulous organizations are already following it.  For example, when the tampered cyanide-laced capsules of Tylenol were marketed by Johnson & Johnson and ended up killing a number of persons, the company immediately collected back all the defective goods, even though the corporation supposed that the pills had been altered only in a few retail shops.  Although the collection expenses amounted to $240 million, the company managed to keep customers’ confidence and loyalty on the products offered, leading such good to remain a leading pain reliever in its market.

1.1  Need for market research

As one can note, to successfully adopt an effective marketing orientation, it is important that managers are fully aware of the customers needs and wants.  To further compound the issue, today’s markets are extremely dynamic and susceptible to change.  For example, car manufacturers are extremely keen on customer tastes in order to produce vehicles in line with such wants.  Therefore management is required to be constantly on the alert of what the client is demanding.  The effectiveness of marketing intelligence systems to obtain such information is weak. The need thus arose of obtaining information directly from the market through marketing research.

The marketing research process consists of the following four steps:

· Defining the problem and research objectives – market management and researchers define thoroughly the problem at hand and the research objectives that can aid in solving such issue.

· Developing the research plan – the information needed is determined at this stage.  Researchers will then seek the secondary data already available and how the primary data can be obtained.   Primary market data can be achieved through a variety of marketing research mediums available, such as experimental research, observational research and more.

· Implementing the research plan – once the methods of collecting information are set, the collection of such information commences in this stage together with the processing and analyzing of such information gathered.

· Interpreting and Reporting the findings – the last but not least step is the interpretation of the date collected and presented jointly with valid conclusions.

Marketing research is a very expensive business operation, which sometimes may amount to millions of dollars.  However, the information derived is very valuable to the organization and can aid management in good decisions to be a market leader.  A typical example that comes to mind is the Kentucky Fried Chicken (KFC) venture in the Japanese market.

Such market seems impenetrable by many American and European organizations.  The non-tariff barriers, the iron grip of the keiretsu kigyi (banking groups), and the committed Japanese workforce make it very complex for an outside firm to infiltrate their market.  KFC, yet, was capable to enter this market and is actually performing better than the United States Market.  As a matter of fact, in the 90s the 1,470 Asian outlets sales averaged 60% more than the United States average.

Through vigilant marketing research the KFC management, comprehended that in large Asian cities there is an increasing absorption of young middle-class workforce with growing income who are eager to pay further for American-style restaurants.  This exposed the viability of the project to KFC managers.  Market research also brought to KFC attention that the number of Asian women in the labour force is increasing considerably, who has a smaller amount of time for food preparation at home and consequently the need for fast-food restaurants in Asia is increasing.  With this information KFC management instantaneously recognised the strategic window of opportunity that is available and took appropriate action to operate fruitfully in that market.

1.2  Marketing Mix Elements

The marketing mix concept originated from Neil. H. Borden who suggests the utilization of the four main controllable variables of management to reach the marketing orientation approach.  The marketing mix elements are the following:

· Product – there are three levels of products, which the organization should classify their products in, because customer attitude and response would be different under each category.  These are augmented, actual and core products.  In marketing, the product quality and features are not the only elements that form a good product.  Today’s fierce competition demands that managers also focus on the product design apart from the ones previously mentioned.  Nike, for example, employs 60 designers and issue 500 different footwear designs each year.  Attention should also be directed towards branding, product packaging and labeling.   These are important features to attain market leadership.

Every product or service marketed passes through a life, commonly known as product life cycle.  These are product development stage, introduction, growth, maturity and decline.  The other marketing mix elements described below should be in line with the stage the product is in to ensure a proper market orientation.

·  Price – the price decision is also an important one.  Management can choose from three main categories, being cost based pricing methods, market pricing methods and competition based pricing methods.  The selection of the optimal price depends on internal and external variables.  Internal factors affecting pricing decisions are:  marketing objectives, marketing-mix strategies, costs and organizational considerations.  The external factors are:  market features and demand, competitors’ costs, prices and offers and other external factors like economic conditions.

· Distribution – the distribution channels utilized should be effective in order to ensure that the product is delivered more effectively than competitors.  There are different number of distribution channels used, like direct-marketing channel in which no intermediary levels are adopted, vertical marketing system and horizontal marketing system.  Under the latter two intermediaries are used.

· Promotion – the promotion mix is a very expensive but effective marketing mix element.  It can for instance sustain a product brand.  Promotion is also important to inform clients about the product or services offered especially at the introductory stage of a product/service.  The mass-promotion tools available are advertising, sales promotion and public relations.  These should be designed and implemented carefully to maximize their effectiveness.  Likewise it is important that personal selling maintain the messages adopted in the promotion mix through the sales force behavior with clients.

1.3  Final Thought – Benefits of Marketing

Even though marketing seems elaborate it is very fruitful for a firm.  By understanding the customer we can reach the clients and sell our goods.  Client retention and market leadership can also be attained with the aid of marketing.  Failure to apply marketing to understand the client can be detrimental.  .  For instance, Disney made the fatal mistake of not separating European customers with American ones in the Euro Disney project.

They originally designed a park similar to the American one, incorrectly neglecting the cultural differences that exist.  For example, they adopted a policy of serving no alcohol in the park.  This was extremely unpleasant to such culture because in France wine is habitual for lunch and dinner.  Thus the organization suffered $921 million losses in the first financial year, and had to rapidly change some aspects of the park in order to survive in the European market.

References:

Hartley R. (2000).  Management Mistakes & Successes.  Sixth Edition.  New York:  John Wiley & Sons Inc.

Hume S (1990).  Advertising Age.  McDonald’s Fred Turner:  making all the right moves.

Kotler P.; Armstrong G.; Saunders J.; Wong V. (1999).  Principles of Marketing.  Second Edition.  London:  Prentice Hall.

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