Marketing Fundamentals:
Introduction:
Before jumping into the different nuances of marketing, it is important for one to understand what marketing is NOT.
• Marketing is not just advertising.
• Marketing is not just public relations.
• Marketing is not just packaging, product placement, or even promotions.
So what is marketing? Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals (Kotler, 2001). Marketing is more than just the 4P’s; it is a blend of art, science, business, and patience.
Week in Relation to the Course
Week One is the foundation for this course. It will provide you with an understanding of the function of marketing and the role it plays within an organization, which is necessary in order to create marketing objectives and strategies for an organization.
Marketing and Organizational Success
Marketing must be strategically integrated across an entire organization. As Wind, Mahajan, and Gunther (2002) state, “marketing offers a perspective and guiding principles for all business and corporate decisions,” and it plays a key role in identifying growth opportunities and developing creative approaches to capture these opportunities.
One way to look at marketing is to look at it as a cycle that includes different activities. These activities include the following:
• Research: all good marketing should begin with research. Research includes things such as determining information about the organization’s target markets--including customer demographics, psychographics, and competitive intelligence. From this research a SWOTT analysis can be developed.
• Strategy & Planning: equipped with data, marketers can then determine the appropriate strategy and the tactical plans to implement this strategy.
• Branding: building a “brand” involves marketers examining the positioning of the product (or firm) in the market place and establishing how they would like for the product (or firm) to be perceived by consumers.
• Product Development: some product development actually comes after research has been conducted; for example, research may reveal that there there’s an untapped opportunity in the market. Marketing can also drive this process through research of customer and/or market needs
• Sales and Sales Training: once the product or service has been established and before it “goes to market” the marketing team should always train their sales force--this training ensures that the sales team is more capable to answer questions, close sales, and implement sales orders.
• Point of Purchase (POP): these materials are those items that a sales force might need to help sell a product. Examples of POP materials include coupon holders on grocery store shelves, brochures next to cooking appliances, and sale signs on top of rounders in retail clothing stores.
• Public Relations (PR), media relations, and public affairs: the softer, more forgotten side of Marketing that involves communication to various target publics. Too many marketers forget about PR and miss opportunities to make the public aware of their products. Media relations specifically deal with the press. Public affairs, also known as governmental affairs, deal with the various government entities that impact the organization.
• Customer Service: marketers do care about the customer experience or at least, good marketers do. Good marketers want to know about the customer experience including complaints, and questions concerning the sales and post purchase process. All of these things are important, because if we can identify issues, then the cycle starts all over again. We do research on the issues that have arisen from the customers, find solutions, and then tweak our marketing efforts throughout the cycle.
The Marketing Mix
No introductory discussion of marketing is complete without discussing the marketing mix. The marketing mix is what most marketing people call “the 4 P’s”: Product, Price, Place, and Promotion. So what do these things mean?
• Product: A product is the need-satisfying offering of a firm including physical goods or services (e.g. a new car, a new soft drink, a sports team). The product also includes the features and benefits, quality level, accessories, installation, instructions, warranty, product line extensions, packaging, and branding of the product.
•Price: The price is the amount of money that is charged for “something” of value. In determining price a firm must consider things such as cost to produce the product, objectives, flexibility, competitive pressures, return on investment, market pressures level over product life, geographic terms, discounts, and allowances.
• Place: The place is the making of goods and services available in the right quantities at the right locations. It determining the place a firm must consider things such as objectives, channel type, middlemen, kinds/locations of stores, transportation, storage, and managing/coordinating channels.
• Promotion: Promotion is the communicating of information between seller and potential buyer or others. It involves considerations such as objectives, promotion blend, sales people, advertising, sales promotion, and publicity.
It is important to note that a change in one “P” may cause a change in another. For example, a can of soda might be $0.65 in a vending machine at a local business, but it may be $1.00 if that vending machine is at a college campus. As place changes, the price of the can of soda also changes.
The Marketing Plan:
One of the most common things a marketing manager does is to create a marketing plan. A marketing plan is a road map… one that can be adjusted along the way as the economy changes, as new strengths are discovered, and as untapped markets uncovered. During the creation and implementation of a marketing plan unforeseeable opportunities can emerge and if a marketing manager has created a sound marketing plan he or she can logically deduce if the new opportunity is really more profitable/effective/time efficient than what has already been planned.
What’s in a Marketing Plan?
Many marketers and organizations have their own ways of creating marketing plans. However, here are some of the areas that a marketer should address when creating their marketing plans:
• Organizational overview
• Product or service description
• Stage of the product life cycle
• SWOTT (Strengths, Weaknesses Opportunities, Threats and Trends) analysis
• Marketing research
• Segmentation
• Differentiation and positioning
• Marketing mix
• Budget
• Control
Practical Application:
In the early 1700’s a Dutch inventor trying to simulate ice skating during the summer months created the first pair of roller skates by attaching spools to his shoes. His “in-line” arrangement was the standard design until 1863 when the first skates with rollers set as two pairs appeared. The two-pair design became the new standard and in-line skates virtually disappeared from the market. However, in 1980, two hockey-playing brothers found an old pair of in-line skates while browsing through a sporting goods store. Working in their garage, they modified the design of the skate by adding hard plastic wheels, a boot, and toe brake. They sold their product as the “Rollerblade Skate.”
During the 1980’s Rollerblade focused on marketing their skates to hockey players and skiers as a training skate. However, conversations with in-line skaters convinced Rollerblade that there was a bigger market for their product. In-line skating was not only fun, but that it was an incredible workout, and was quite different from traditional roller skating. By 1997, after repositioning its product, there were more than 27 million users of in-line skaters in the United States alone (Kerin, Hartley, Berkowitz, & Rudelius, 2006).
Questions for Thought
1. What were the key factors in re-positioning Rollerblade and changing its image?
2. How did Rollerblade use the 4 Ps to increase sales of their skate?
How the Tools Help Solidify Concepts
This week’s reading will provide you with a foundational overview of the role of marketing in an organization. Current articles have also been selected to demonstrate the modern-day application of the marketing function within organizations.
Summary to Encourage Learning
It is important for a marketing manager to constantly examine the market environment in order to create effective marketing strategies for a product or service. In creating a marketing strategy the manager must consider each one of the 4 Ps: Product, Place, Promotion, and Price.
References:
Kerin, R., Hartley, S., Berkowitz, E., & Rudelius, W. (2006) Marketing. New York, NY: McGraw-Hill/Irwin.
Kotler, P. (2001). Marketing Management, Millennium ed. Upper Saddle River, NJ: Pearson.
Wind, J., Mahajan, V., & Gunther, Rt. (2002). Convergence Marketing. Upper Saddle River, N.J.: Prentice Hall, p. 200.
Discussion Questions
Question 1: Based upon your current perception of marketing, how would you define a) from a personal view and b) based on the function of marketing within your organization? What are the top three marketing challenges faced by the organization? What impact does marketing have/ could have on organizational success?
Question 2: How are the goods or services produced by your firm differentiated? Taking into account the marketing mix, which is comprised of the 4 P's - product, price, place and promotion.
Question 3: What were the key factors in re-positioning Rollerblade and changing its image? How did Rollerblade use the 4 Ps to increase sales of their skate?