Define marketing and marketing management and discuss the scope of marketing
The formal definition of marketing according to the American Marketing Association is that “marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and stake holders.” Kotler and Keller define marketing management as “the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior value.” In short, they define it as “meeting needs profitably.”
Most people usually assume that marketing means selling a product but according to Peter Drucker that is only one aspect. He looks at marketing in a more holistic manner. Marketing is art of understand the consumer needs and cater to them in the form of products and services. A marketer’s goal should be to look for what a consumers needs in his life. For example who ever came up with the idea of making ice trays capitalized on the need that people already had. People like cold water; who ever caught onto that first and was able to develop a product that fulfilled that need appropriately was basically creating something that would sell as a guarantee.
In consumer driven economies today the scope of marketing is endless. Goods, services, events, experiences, persons, places, properties, organizations, information, and ideas are all marketed. Everywhere you look there is some sort of marketing present. Some examples of goods being marketed are tv’s, food items, clothes, and cars. Along with goods, services are the also marketed. For example, hotels provide a service to the customers who stay in their rooms. Car renting is a service. The car renting service and the car both need to be marketed. Events such as concerts and award shoes are also marketed to sell tickets, get publicity and generate revenue. One of the most important and essential kinds of marketing is experiential marketing. For example, Walt Disney World does not sell a ticket to an amusement park; it sells an experience of a fantasy world that every child dreams to be a part of. People, places, properties, organizations are all also a part of the marketing scope. Nike endorses Michael Jordan whose popularity publicizes the NBA.
Marketing and marketing management are essential parts of our lives today and affect each part of our lives whether knowingly or unknowingly. The scope of marketing is never ending because our world today is hugely based on consumerist ideologies and these go hand in hand with marketing.
Explain the four major segmenting variables for consumer markets
The first major variable for segmenting a consumer market is demographic where markets are divided based on age, sex, income, occupation, family life cycle or size, religion and social class. The age and life-cycle stage divides markets in two ways. First, age is the segmentation variable that decides which product will cater to which age group. For example, a tooth paste can be targeted towards both kids and adults by differentiating the kids toothpaste by adding fun flavors such as bubble gum. The segment based on life-cycle means to cater to people in the stage of life they are in. For example, honeymoon packages are targeted towards newlyweds. Gender also plays a huge rule in segmentation because some products are targeted specifically either towards men or women.
Geographic segmentation is based on the geographic region, city or metro size, density, climate, and population growth in different areas. Thick winter coats will be usually targeted towards places with colder climates compared to places with hot and humid climates. Hotels also market geographically by spreading out their larger and more expensive chains in the city areas and small inns in smaller cities.
Behavioristic segmentation targets people based on the use and benefits of the product rather than the features. One way to divide and target people would be their percentage of use of the product and if they were heavy users, moderate users, light users or frequent or incentive users. One way to use this segmentation would be to remind people the brushing teeth twice a day is doctor recommended and use that to increase the usage of the product.
Psychographic segmentation focuses psychological facts to divide the market. This type of segmentation would be based upon personality traits, lifestyle or values. For example someone with a flamboyant personality would not visit a vintage store that focused on collecting understated pieces of clothing. He or she would want to visit a store that would make him/her look good and have that extra jazz or pizzazz that would match his/her personality. Also certain people’s lifestyles dictate the choices they make and the products they buy. For example, certain people are very brand conscious and follow trends religiously.
Discuss what the major modes of entering a global market
The first way of entering into a global market is through indirect and direct export. Occasional exporting occurs when a company delivers orders to a foreign country because the customer placed and order from there. Active exporting occurs when it is part of the company’s goals to cater to foreign markets and they do so intentionally. Companies can have a domestic based export department or division, an overseas sales branch or subsidiary, have traveling export sales representatives, or foreign based distributors or agents.
Using a global web strategy is also a way of entering into a global market. Overseas trade shows can be conducted via internet and eradicate the need of traveling from one place to another to make any sort of transaction. Many companies create internationally friendly websites that take into account the language of origin in the country and display prices in the respective currencies. The best example of this strategy would be a giant like google that has infiltrated the global market.
The third way to enter a global market is through licensing. Kotler and Keller say “licensing is a simple way to become involved in international marketing. The licensor issues a license to a foreign company to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty.”
Joint ventures occur when local investors get together with a foreign company and share the rights to the organization or the venture they are carrying out. For example one recent example is the joining together of Nike and Apple to create a chip that is inserted into the Nike tennis shoes which measures the amount of energy being exerted through the Ipod.
Direct investment is also a form of entering into a global market. Many benefits are involved in this type of investment such as cheap labor and less strict laws against certain types of production or manufacturing activities. An image boost is also created for the company because it creates more jobs in the country that it is investing in. The most beneficial advantage is the company has full control over the project or production activity because the investment was direct.
Define what electronic commerce is and discuss advantages and disadvantages of on-line marketing
Electronic commerce in simple words means the shift of everyday business in the everyday world into the electronic world. A majority of all businesses today are E-businesses because in today’s day and age it is impossible to not have a cyberspace counterpart to your company. Kotler and Keller say that “e-commerce means that the company or site offers to transact or facilitate the selling of products and services online.” The type of commerce has paved the way from many types of other “e’s” such a online marketing.
To bring a customer to the cash register a marketer has to focus on the entire concept of marketing management and identify the need of the consumer so that he isn’t just buying a product, he’s fulfilling a need. Keeping the same idea in mind when the cash register is replaced with an online payment method e marketing comes to life. The marketing that was previously done in the real world now needs to be done in cyberspace. Although the name of the game is the same except the place of transaction online marketing has several advantages and disadvantages.
One of the major advantages of online marketing is that it’s way cheaper than marketing in the real world. To create a colorful banner in real life would cost hundreds of dollars whereas to reproduce the same image over and over again in the internet only costs a few dimes. Companies who are in their early stages and have less revenues can make use of online marketing and gain advantage over companies who aren’t making use of such a valuable resource. There are a few disadvantages with online marketing such as the fact that there are still people who do not interact much on the internet and still prefer to pay at the cash register.