The Role of Marketing

 

INTRODUCTION   

 

If gaining and retaining customers are the main reason why businesses engage in production, then how businesses meet the needs and wants of potential customers is the role of marketing.

 

Marketing involves the advertising and selling of products. It involves identifying, anticipating, and satisfying consumers’ requirements profitably.

 

Business not only market tangibles in the form of products (cars, clothes, food) but also intangibles in the form of services (tourism, banking, insurance), places (countries, cities or tourist destinations), events (sports competitions, automobile and fashion shows), people (pop and film stars), experiences (Disney world, diving in the oceans), ideas (social messages about the dangers of drugs or alcohol), properties (residential or real estate), organizations (Oxfam, Museums) and information (university or school statistics for decision-making).

 

Management functions related to marketing:

 

• market research

• product design

• pricing

• advertising

• distribution

• customer service

• packaging

 

MARKET SIZE, GROWTH AND SHARE

 

When the overall demand increases in a market, growth is said to be taking place. An increase in market sales is the best indicator that consumers are now demanding more from the producers. Market growth, however, does not mean that all companies are experiencing increased sales as this is spread across the entire market or concentrated in select companies.

 

The sales that a company reports at the end of the year do not reveal how well the company is doing relative to the competition. When a company wants to determine its position in the market place and against its competition, the overall share of the market that it commands is the best measure. This can be expressed as the company’s sales relative to the total sales made but all the companies in the market.

 

Market size can be measured in two ways:

 

1. volume of sales (units sold)

2. value of goods sold (revenue)

 

Market growth

The pace of growth depends on several factors:

 

• economic growth

• changes in consumer incomes

• development of new markets

• changes in consumer taste

• technological change (innovative products can boost market sales)

• whether the market is saturated

 

Market Share is the percentage of sales in the total market sold by one business.

 

Market share % is calculated by dividing a firm’s sales in time period by the total market sales in time period and then multiplying by 100.

 

Market share is often the most effective way to measure the relative success of one business’ marketing strategy against that of its competitors. The product with the highest market share is called the “brand leader.”

 

Benefits of brand leadership:

 

• Sales are higher which can lead to higher profits

• Retailers want to stock and promote best-selling brands. May be given most prominent position in shops

• Often a discount rate offered to shops. Higher sales lead to higher profitability

• Brand leadership can be used can be used in advertising which is often attractive to consumers who want to buy most popular brands.  

 

Measuring market growth is often ambiguous because it can be measured in two ways, by volume and by value.

 

Market share is subject to certain qualifications:

 

• A company’s market share is best judged against its closest rivals and not the entire market

• A decline in market share may also mean that a new company has entered the market and therefore the company is not worse off than other companies

• A drop in market share can be deliberate, if for example the business ceases to provide some clients with its business

• Sales and seasonal changes can affect market share and cause fluctuations

 

CONSUMER MARKETS AND INDUSTRIAL MARKETS

 

Consumer markets represent goods and services bought by the final user of the product, whereas industrial markets are markets for goods and services bought by businesses to be used in the production process of other products. 

 

Marketing Business to Business

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When selling to other businesses, firms will direct resources to industrial exhibitions and selling direct to companies, often customizing their goods and services, and producing technical promotions.

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Marketing Consumer Goods and Services

 

Managers responsible for selling consumer services have to consider factors such as: the immediate consumption of services, services cannot be taken back or replaced, the importance of a trained and  friendly staff. 
 

MARKETING APPROACHES

 

A business will seek to market its products on the basis of its strength. Therefore, the question that one must ask is whether a business will use its core competencies and thereby produce something that the market will potentially want, or alternatively conduct market based research and determine what it is that the consumer in the market desires.

 

Market Orientation and Product Orientation

The market orientated business focuses on the needs of buyers, which can be both reactive and proactive.

 

The product orientated approach is the more traditional approach of providing consumers with products of services of higher quality and affordability.

 

Asset Led Marketing

Companies such as Apple have technical engineers that brought us the Ipod and Ipad. Through what is referred to as the core competencies of the business, namely their labor expertise, capital-intensive investments and entrepreneurial sense of creativity they have been able to Produce products that we the consumers find appealing. Apple is therefore referred to as product or asset-led orientated business. Its assets that lead its productivity are primarily in the labor (human) and vision of Steve Jobs.

 

Social Marketing

Marketing by the government or non-for-profit organizations that seeks to defray the negative externalities in society or promote the positive externalities is referred to as social marketing. Social marketing considers not only the demands of the consumer, but of the larger society.

MARKETING IN NON-PROFIT ORGANIZATIONS

 

At first, it might seem unusual for non-profits to be involved in marketing, but most have ver clear fund raising objectives. These organizations need money to support their cause and they need to do it in a cost effective way. There are many similarities between marketing consumer goods and charities. For example:

 

• using market research

• finding best ways to communicate with donors

• assessing the effectiveness of different promotions and campaigns

 

MARKETING PLANS

 

A marketing plan is an essential component of any successful marketing plan. A successful marketing plan has to be planned. They key components include:

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• SMART marketing objectives

• strategic plans

• specific marketing actions

• a marketing budget

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