Marketing Fundamentals to Magnolia Web Studio

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Abstract

This paper is a demonstration of the applicability of the marketing concepts to promote the website Magnolia Web Studio. The paper contains an overview of the general marketing concept, as well as the practical implementation in the specified case. The findings of this paper will provide the possibility to compose a marketing plan for Magnolia Web Studio.

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Introduction

Having a website became an essential aspect of most of the companies in the world. In Small Business Attitudes & Outlook Survey conducted by Constant Contact, 68% of small business owners indicated their intention to use a website as their outbound communication. In that regard, for the service section as web development and design, a marketing strategy is of great importance, delivering a quality product and fulfilling the customers’ demand. Currently, developing a website for a company is not only transferring the company’s information into the web and listing its inventory but also creating a distinguishable brand for the company, complementing its mission and objectives. Accordingly, such serv9ce as web development and design should have a definite marketing strategy that will ensure that the product will reach its target market.

Definition of Marketing

Marketing can be defined as the process by which organizations create awareness of goods and services with the ultimate goal of increasing the volume of sales. In realizing the ultimate goals of marketing, a relationship with the customer is established, and which plays a key role in capturing the value of the customers. In the process of establishing a relationship with the customer, first of all, the customer should be identified, maintained and satisfied; therefore, ensuring the organization moves to a higher level of sales. Marketing also takes into account analyzing and fully understanding the needs of the targeted population and implementing measures directed towards achieving these needs.

Introduction of Product/Service

The selected business is Magnolia Web Studio, a company specializing in web development and design for small businesses and non-profit organizations (Magnolia Web Studio, 2008). In order to analyze the marketing capabilities of Magnolia Web Studio, this paper will assess the company’s acknowledgment of the marketing environment. The latter will be achieved through considering the three forces: micro-environment, macro-environment and internal environment. The initial analysis of the company’s website revealed good management of the relationship with the customers, where the feedbacks of the customers clearly indicate such aspect. The 4Ps, product, price, place and promotion are addressed as well. However, further observations indicate that an emphasis is put solely on micro-environment forces while ignoring the other two forces. Most of the information is pertaining to the consumer. Additionally, the website site has not used visual communication very well, considering the number of images used on the website

Situation Analysis — Marketing Environment Forces Impacting Product/Service

Understanding marketing is not only very crucial when designing websites, but also in other forms of communicating to the targeted population. Accordingly, in order to provide an assessment of the situation, an overview of the marketing forces impacting the product is required. The three key marketing environment forces include the micro-environment, macro-environment and internal environment.

The micro-environment

This environment includes suppliers who deal with the organization directly or indirectly, customers, consumers and other stakeholders. This force impacts the organization directly; therefore, it is very important to fully address the micro-environment when designing a website. A website that does not seem to fully address the issue of customers, for instance, may not go far in promoting the product or services in question. Questions to do with the quality and availability of goods and services should be adequately addressed to ensure new customers are recruited as well as maintaining customer loyalty. In a nutshell, this marketing force will work towards ensuring a good relationship is established between the firm and the driving forces that control the relationship. Therefore, addressing the above-mentioned factors adequately in a website indicates the relationship between the components of the micro-environment and the firm is strengthened and places the products of the organization way above that of its competitors (Armstrong, 2006, p. 67).

The macro-environment

This force includes cultural, political and technological factors. A good web design should ensure all the images and writings on the web are sensitive to people of diverse cultural backgrounds and a scenario where a particular culture is portrayed as being insignificant or superior to others may work against the product or service in question. Therefore, images and statements that appear to be biased should be avoided at all costs. Political issues should not be made a subject in web designing as this again can work against the product or service.

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Lastly, the web design should take into consideration technological advancement such that the whole process brings about relevance in terms of creating a market for the product and service. Failure to take into account changes in technology may result in a substandard website that is unable to cater to the diverse needs of all the stakeholders in the market (Armstrong, 2006, p. 69).

The internal environment

This includes all those factors that are internal to the organization. In other words, refers to those factors that are within the control of an organization. The latter might include markets, machinery, money, materials, men and money. Failure to address the internal environment forces when designing a website may hinder the firm from reaching appropriate measures to ensure improvements are within its reach and should be addressed in the website. This may be summarized into the regions that the organization is able to reach. This way, targeted customers are able to get answers on where and whether products or services are in their location. (Armstrong, 2006, p. 78).

Marketing Strategy: Target Market(s) & Positioning

Every company acknowledges that its products will not be demanded by all consumers. There are simply too many consumers, who are widely scattered, differing in their needs and requirements (Armstrong & Kotler, 2009, p. 167). In that regard, in order to develop a successful marketing strategy, market segments should be identified, based on which the seller of the product can adapt the product, analyze competitors, and choose the pricing and the distribution strategy suitable for a particular segment. In order to develop the marketing strategy for Magnolia Web Studio, the following section will present an analysis of market segmentation for the visual communications market, based on which a value proposition of the services provided by Magnolia Web Studio will be developed.

Segmentation Bases

The rationale for using target marketing, i.e. the identification and selection of one or more market segments, is maintaining a compromise between treating all consumers the same and dedicating marketing efforts to each consumer individually. Thus, segmentation is dividing the market into identifiable groups of consumers, each with different characteristics and needs, in which the group itself shares similar needs and has mutual characteristics. The main focus in such a process is establishing the criteria, based on which the segmentation will be implemented. The segmentation bases can be defined as the set of variables that can be used to differentiate different market segments. Generally, two distinct groups of variables can be distinguished, based on needs and based on profiles. Considering that Magnolia Web Studio specializes in website development and design for small businesses and non-profits, it can assume that the measurable profiling characteristics will be two diverse to find mutual elements. Accordingly, such profiling variables as age, location, nationality, and gender might be two diverse for an internet product and service. Nevertheless, there are several other characteristics that can be used, in which the method of their identification might provide an insight into their nature.

Choosing the method for segmentation the build-up method can be considered as the most suitable as well as being the most established and recognized. The build-up implies assuming the differences of the customers and moving up to find the similarities (Baines, Fill, & Page, 2008, p. 221). Thus, taking that each of the potential customers of Magnolia Web Studio is different, the following bases can be identified elements:

  • Profile: industry, the size of the organization, lifecycle
  • Psychological: benefits sought
  • Behavioral: product usage, web users
  • Economics: budget, profit

Description of Target Markets

Identifying the target market is the second most important aftermarket segmentation, in which the identified segments will be targeted, based on an evaluation of the segment’s attractiveness. In that regard, the target market identified contains several characteristics that include, Small businesses and non-profit organizations, in their startup stages and 1-3 years of development. Suppliers, service providers, and charity organizations. The motives are introducing the products and increasing the customers’ awareness of the product. English-speaking countries, notably the US, where the analysis of the existent customers’ indicated local preferences. Functionality and price guidance in products.

The attractiveness of the aforementioned market can be seen in the number of small businesses in the US, where more than 96% of the US chamber of Commerce are small businesses with 100 employees or fewer (US Chamber of Commerce, 2010). Accordingly to a survey of small business owners, 75% anticipate their business to grow in 2009 (Dhakir Warren, 2009). In that regard, considering the market specifics, it can be stated that a concentrated market-coverage strategy might be seen as suitable, were considering the limited resources of the company, Magnolia Web Studio should go after a small share of a large market.

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Competitors Analysis and Positioning

One of the competitors in the market of visual communications and web design services for small businesses is the company eFocus. The company is specialized in web design solutions, with an emphasis on affordability, where the website explicitly states its direction toward small businesses as customers (Small Business Web Design, 2010). One of the aspects that provide a detailed analysis of the competitors is the acknowledgment of their positioning. Positioning, in that matter, is the way the provided services and products are defined by customers, and the place it occupies relative to other products (Armstrong & Kotler, 2009, p. 443). Accordingly, the positioning of eFocus can be seen based on low cost, as implied from the number of times the financial aspect was mentioned on the company’s web page. In that regard, the slogan of the company that can be derived from its positioning is “increase your sales at low cost”.

Another competitor is the website GetUWired, which specializes in internet marketing for small businesses (Lee Goff, 2010). The website development is a single package within internet marketing packages, which also includes writing content, web marketing, designing logos, and others. In that regard, it can be stated that the website promotes developing complete marketing strategies from scratch, which also includes web developments as one of the primary aspects. The direction toward, small businesses is explicitly stated on the website, while the company is positioning itself as the all-in-one package provider, with an emphasis on support and customers’ consideration. Being customer-oriented can be seen as an additional aspect of the company’s positioning, where the “money back” guarantee, in case the customer did not like the design, is one of the features, based on which the company can be differentiated.

Analysis of Competitive Advantage

Having a competitive advantage for a company means that the company has a marketing mix, which the target market perceives as better than that of the competitors. In that regard, this marketing mix should be based on several differences, which will form the competitiveness of the company. Deciding on the right differences and their number is essential for the company. According to the analysis of competitors, the competitive advantages that Magnolia Web Studio might include the following:

  • A period of support and free updates.
  • Exclusivity of distinctive artistic designs.
  • A discount for second-time customers.
  • Exclusive free bonuses, such as search engine ranking optimization.
  • Competitive prices.

It is suggested that marketers should aggressively promote only one benefit to the customer (Kotler & Armstrong, 2008, p. 455). In that regard, it can be stated that several of these competitive advantages, such as price competitiveness and discounts can be present within the company’s offer, but nevertheless, they are not used as the main focus of the company’s campaign. Looking at competitors, it can be seen that in the first case, i.e. eFocus, the company provides a balance between price and the minimum required functionality. In the case of GetUWired, the emphasis on marketing packages, and thus, artistry and visual delivery of the design is not their main advantage. Thus, the one competitive advantage that can be selected is a provision of identifiable artistic designs, unique, exclusive, and distinguishable in their delivery.

Development of Values Proposition and Positioning Statement

The selected competitive advantage is only one of the benefits, upon which the company will be positioned, while the full positioning of a company, i.e. the full set of benefits upon which the product will be differentiated among competitors, is called the value statement. Basically, the value statement serves as the answer to the question “Why should the customer buy our product?” While other companies offer functionality equivalent to the price paid by small businesses, Magnolia Web Studio will offer recognizable designs, with an emphasis on the visual components of the web development, characteristic to customers of a higher segment. Thus, the main value proposition will be more for the same, offering quality comparable to higher segments with the same prices at lower prices (Kotler & Armstrong, 2008, p. 442).

The positioning statement of the company will read in the following form:

To small business owners who need to develop a distinguishable and unique web design, reflecting their products and services, Magnolia Web Studio is a web development and design company that provides high quality, unique and exclusive designs, which not only will reflect the company’s identity but will also provide an identifiable and recognizable brand for your product or service. Now your small business can have a big presence on the web, for a price that you can afford.

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It can be concluded that the identified segments and target markets allowed making the development of the marketing strategy that will differentiate the company from competitors. Accordingly, the identification of the value proposition of the product will allow satisfying the needs of the specific group chosen as a target market.

Pricing Strategy

Although pricing has been overlooked in the marketing mix, compared to product, place and promotion, price is nevertheless important, as it represents the generation of revenue for the company (Drummond & Ensor, 2005, p. 134). In that regard, it should be stated that the pricing of the product is directly related to the marketing mix, as it is part of the product’s positioning. In the case of Magnolia Web Studio, the latter is specifically true, where the pricing is one of the components of the value proposition. Broadly, the price can be defined as the sum of all values that the customer will exchange for the benefits provided by the product or the services (Kotler & Armstrong, 2008, p. 639).

In setting the price for a product, there are several factors that should be considered, which can be outlined as follows:

Customer perception of value – the value that the customers place on the product, the pricing approaches can be divided into:

  • Good-value pricing – the right combination of quality and good service (Kotler & Armstrong, 2008, p. 990)
  • Value-added pricing –adding value-added features for differentiation (Kotler & Armstrong, 2008, p. 676)

Company and product costs – the costs for producing the product or the service

Target profit Pricing – an established price, which is targeted by the company, and at which it will make a profit

Internal and external factors – different factors that might affect the pricing decisions, such as:

  • The objectives of the company and the marketing strategy taken
  • The overall goals of the company
  • The demand in the market
  • Competitors prices

In the case of Magnolia Web Studio, it can be stated that the main combination of all these factors is influencing the pricing model, but nevertheless, the marketing mix and the prices of competitors are the most influential. These prices represent mainly the value-based model.

The value-based model can be seen as the basis of the value proposition of Magnolia Web Studio services. The general pricing strategy is market-penetration pricing, which is initially setting low prices in order to get established in the market. Accordingly, rather than setting a price lower than that of competitors (Armstrong & Kotler, 2009, p. 271), lowering the price will be based on the consideration that such product is of higher quality than the nearest competitors. The prices of the nearest will be used as the nearest target profit pricing indicator.

Distribution Channels

The distribution of Magnolia Web Studio services involves the marketing strategy of informing consumers of the availability and other details on how to enjoy the services of the company. It is important to note that the geographical positioning of the clients, specifically in such intangible aspects as web design, might not play a key role in settling on the best distribution channel. The latter nevertheless, does not imply that the needs of the customers will not vary, depending on their geographical location.

Considering the specific nature of web development and design, it can be considered that the distribution consists merely of the direct marketing channel, i.e. the manufacturer selling directly to the consumer. In that regard, direct distribution can be seen as a conventional method for the distribution of such products. Accordingly, the usage of the retailer and intermediary distributors might influence the pricing strategy of the company, where the simplicity of the distribution chains will help the company to reduce the total costs incurred, and thus, increasing profit (Armstrong, 2009). Nevertheless, in the case of web services, there are distribution channels that can be used at little or no cost. The channels might include web banners, blogs, social media, and search engines’ rankings (Web Development Blog, 2010).

Selective distribution can be seen as suitable for Magnolia Web Studio in cases where specialized sites directed for website development will contain links for the service. Accordingly, other free distribution channels will be sued on the basis of the enforcement of direct sales, where these channels will not provide or resale the service, rather than link to the original website. It can be stated that the target need for the customer can be seen in the direct connection between the customer and the producer of the service, which accordingly correspond to the need of the company as well. Thus it can be stated that a multichannel distribution will consist of mixing several channels, while the main channel will remain direct marketing to the target consumer, which can be explained by the nature of the provided service.

Integrated Marketing Communications

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Promotion Mix Strategy

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Message Strategy

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References

Armstrong, G., & Kotler, P. (2009). Marketing: an introduction (9th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

Baines, P., Fill, C., & Page, K. (2008). Marketing. Oxford; New York: Oxford University Press.

Dhakir Warren. SEVENTY PERCENT OF SMALL BUSINESSES ANTICIPATE GROWTH IN 2009 ACCORDING TO A SURVEY. Constant Contact. Web.

Drummond, G., & Ensor, J. (2005). Introduction to marketing concepts. Oxford ; Boston, MA: Elsevier/Butterworth Heinemann.

Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.). Upper Saddle River, N.J.: Pearson/Prentice Hall.

Lee Goff. (2010). Get U Wired Home Page. Get U Wired. Web. 

Magnolia Web Studio. (2008). Magnolia Web Studio. Magnolia Web Studio.Web.

Small Business Web Design. (2010). eFocus Home Page. Small Business Web Design. Web.

US Chamber of Commerce. (2010). The State of American Business. US Chamber of Commerce. Web. 

Web Development Blog. (2010). Online Distribution Channels. Web Development Blog. Web. 

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