Market Assessment with OR Applications

Adarsh Anand, Deepti Aggrawal, Mohini Agarwal

• Publisher: CRC Press
• Year: 2019
• ISBN:
  9781000759877
• Edition: 1
• Topic: Business
• Subtopic: Ricerche di marketing
• Index: Business

This book provides an understanding of the concept of marketing and its role in business and public organization including the need for scientific marketing analysis.

It includes a variety of mathematical models applied for better decision making, promotional decisions in the presence of competition, and sales forecasting using an Operational Research (OR) approach. The book also provides a platform to academicians, practitioners, and researchers to gain understanding of marketing management concepts from an OR perspective.

This book offers relevant, international perspectives on techniques for market assessment under one canopy. It will be helpful for those who want to gain insight into understanding the managerial aspects from an OR analyst point of view and is a collaboration that contains plenty of related and valuable techniques used in real-life problems faced by industries.

1 Introduction to Marketing Management

Marketing Management is an art and science of selecting the targets and constructing profitable base.

Marketing is defined as the analyzing, planning, organizing and controlling of the firm’s potential customers, resources and policies and activities with a view to satisfy the needs and wants of the customer groups at a profit. Marketing is a process of planning and executing the conception, pricing and production and distinction of ideas, goals and services to create an exchange that satisfies the individual and organizational objectives. Basically, marketing is a social and managerial process by which individual groups obtain what they want by creating and exchanging products of value with others. There will always be some need for selling but marketing aims to make selling superfluous. It aims at knowing and understanding the customer’s needs so well that a product or service fits him and sells itself [1]. Ideally, marketing strategies should result in a potential customer who is ready to buy and create the circumstances that make the product or service readily available.

1.1 Concept of Marketing

In earlier times, the concept of marketing evolved from distribution and selling of goods into available market relating the firms to its market dynamically [2]. Firms concentrated on promotions that would enhance their sales and result in maximal profit. Less focus was put on attaining a particular quality level, i.e. no inclination towards customer satisfaction [3]. Also, the field of marketing dealt with economic exchange of goods for money. Today the scope of marketing has been broadened to include the exchange of tangibles even with the transfer of intangible products (i.e. services). The importance of marketing has gradually been recognized in business. Adoption of a better marketing concept has shifted management’s attention from the product to the consumer. The marketing concept directs the manager to focus on [4]:

• Considering consumer wants as top objectives.
• Mobilizing the entire firm to meet the challenges.
• Long-term profit rather than short-term goals.

In recent times, customer satisfaction has become of the utmost importance. Pricing policy, quality, distinction and sales services are the focal point, which helps the long-term profit of the company. This can be considered a marketing concept. To meet all this, the marketing department of a firm conducts market surveys, consumer sampling and so forth and sees the demand for the various products and which product needs to be modified according to people’s requirements. The marketing department then advises the company’s various department to modify the product so that the customers’ needs are satisfied. Today’s marketing concept is based upon customer orientation planned by integrating marketing efforts and aims at generating customer satisfaction as the key to success. Thus, customers are at the top of the orientation chart and instead of trying for the easiest mode of selling, firms should focus more on the customer’s willingness. Moreover, creativity and intelligence should be applied in achieving sales by satisfying customers wants and needs.

1.2 Role of the Marketing Manager

The marketing manager is a person who is in-charge of managing marketing resources for either a product or a service within an organization. Managers should be highly focused, goal-oriented and very reliable people in terms of meeting the timelines. Some important roles a marketing manager performs are:

• Managers strive to discover, entice, maintain and develop a loyal customer base by providing high-value products or services.
• Managers play a crucial role in determining the potential market and the people who will be served, their nature and the level of need the products can satisfy.
• Managers assist the top management in developing sound plans and policies.
• Managers coordinate various activities related to production, procurement, packaging and even promotional campaigns.
• Mangers generate ideas for new products or services to satisfy the growing needs of the consumer.
• Managers develop a strategy that can differentiate their offering from that of their competitors.

1.3 Marketing Orientation

Market orientation is a technique in which businesses identify the needs and desires of consumers and create products that satisfy them [4]. The conventional approach focused on selling and designing products which increased profit, but modern-day marketing advocates the creation of products/services according to the needs and wants of the customer. At present, the orientation is customer-focused. Firms invest heavily in understanding the customers’ preferences, personal needs and concerns which can assist in analyzing the desires which were not expressed [5]. This understanding can help in meeting anticipated demands and in improving existing products. This helps to ensure that buyer satisfaction remains high and promotes brand loyalty and positive word-of-mouth communication. Two among many well-known firms that focus on market orientation are Amazon and Coca-Cola. Both of these companies use vast resources to understand the consumer which is the reason behind their great success. As they have grown and evolved, they have been constantly adding process and features based on the perceptions and desires of potential consumers. Key to the success of any organization is to understand the consumer and to produce accordingly. If the customers are not satisfied, they will buy from a competitor offering to fulfill their requirements.

1.4 Product and Selling Concept

The product concept and the selling concept are two diverse perceptions that originate from the demand in the market. The product concept states that buyers choose the product that is of the highest value and has better performance and function. The product concept is an obligatory concept which delivers the highest possible quality product to the client as per the requirements at a low price. The product’s survival in the market calls for different elements of commercial enterprise like advertising and marketing, distribution and many others to achieve success [6]. Using the product concept, an organization can provide identity to the product as well as value so that the buyers seek and subsequently the consumers purchase the product.

Once experts recognized the failure of the product concept the selling concept was introduced. Under this theory, it is believed that the consumers will not adopt the product until they are persuaded to do so with the help of promotional channels, i.e. the customers do not purchase products in their own initiative, they need to be influenced. Sales can be increased by developing consumer interest and creating a need for the products in the consumers’ minds by educating them through various modes of advertising. The selling concept of advertising focuses the attention on the wishes of the vendor but no longer on potential purchasers. Its ambition is to boost sales and bring in earnings via advertisements. This period of 1930 –1950 has always been known as the “Ideal Sales Era” as supply was more than the demand that occurred during that period. Some corporations are determined to agree with the promoting idea even today. This technique believes that efforts ought to be made so that the customers realize the necessity of the product so that they can adopt it. The selling concept puts emphasis on the purchase but does not take care of the after-sale services.

1.5 Types of Marketing

In the past, marketing was only viewed as something related to the selling of goods. Lately, several new types of marketing have evolved:

• Co-marketing: a partnership between two or more companies that jointly market each other’s products, e.g. a company that manufactures video cards may partner with a game software company and both will market each other’s related product.
• Viral marketing: in internet and online advertising, viral marketing is a type of marketing technique that relies on and encourages people to pass along a message by word of mouth marketing. In viral marketing, online user blogs and social networks are used to produce positive word of mouth brand awareness.
• Online marketing: it refers to a set of powerful tools and methodologies used for promoting products and services through the internet. It includes a wider range of marketing elements than traditional business marketing because of extra channels and marketing mechanisms available on the internet. It connects organizations with qualified potential customers and takes business development to a much higher level than traditional advertising. Further, it combines the internet’s creative and technical tools, including design, development, sales and advertising, while focusing on e-commerce, lead-based websites, affiliated marketing and so on.
• Green marketing: this kind of marketing tactic is being adopted and practiced by all of the firms that are committed to sustainable development or corporate social responsibility (CSR). It can also be defined as the selling of products or services based on environmental factors and also made from renewable materials which can be recycled and which are not using excessive packaging materials.
• Rural marketing: as the name itself implies that marketing which is concentrated in catering to rural markets. This terminology is similar to marketing, the difference being the target population. Here the market specifically consists of rural regions. Thus, it is the application of basic of marketing to the rural sector of the economy.
• Service marketing: this is a special branch of marketing aiming to build relationships and value. This kind of marketing pedagogy can be adopted for both products and services. As the larger part of the economy is dependent on the service industry this type of marketing is the need of the hour.

1.6 Problems for Self-Assessment

1. Explain the concept of marketing.
2. Distinguish between the product and the selling concepts.
3. Discuss the market orientation view from a consumer perspective.
4. Explain the role of the marketing manager.
5. Differentiate between rural and service marketing.

References

1. Moorman, C., & Rust, R. T. (1999). The role of marketing. Journal of Marketing, 63(4_suppl 1), 180–197.

2. Arli, D., Bauer, C., & Palmatier, R. W. (2018). Relational selling: Past, present and future. Industrial Marketing Management, 69, 169–184.

3. Day, G. S. (1994). The capabilities of market-driven organizations. Journal of Marketing, 58(4), 37–52.

4. Kotler, P. (1972). A generic concept of marketing. Journal of Marketing, 36(2), 46–54.

5. Borden, N. H. (1964). The concept of the marketing mix. Journal of Advertising Research, 4(2), 2–7.

6. Szymanski, D. M. (1988). Determinants of selling effectiveness: The importance of declarative knowledge to the personal selling concept. Journal of Marketing, 52(1), 64–77.

2 Need for Scientific Marketing Analysis

Marketing has now become the technology driven discipline.

Decision-making is a process involving information, choice of alternative actions, implementation and evaluation that is directed at the achievement of certain stated goals. Successful implementation of a decision significantly depends on the extent of understanding of the decision and its implications and the motivation of the subordinates who have to carry it out. Also, decision-making significantly impacts several aspects of marketing. Marketing is schematically described as “setting the proper product inside the right vicinity, at the right cost, on the right time”. Though this feels like running a simple errand, a variety of difficult tasks and research are performed to put these simple words into action. And if even one single offering does not meet the mark, a promising service or product can fail completely and end up costing the firm substantially. Hence the use of scientific planning. It’s not just that advertising and marketing have grown to be technologically sound. Marketers have found themselves in an area where responsibility is supreme, making them dependent on data and analytics to extract insights and deliver more results rapidly [1]. Saying that marketing process has changed would be misleading, the fact of the matter is that marketing as a process is experiencing an evolutionary momentum. Accordingly, organizations have found it important to develop an understanding of this marketing mix which is considered to be the foundation of many businesses.

2.1 Decision-Making: A Quantitative Approach

Decision-making is an indispensable component of the management process. It permeates all aspects of management and involves every part of an enterprise. In fact, whatever a manager does, he or she does through decision-making only; the end products of a manager’s work are decisions and actions. For example, a manager has to decide:

1. What are the long-term objectives of the organization, how t...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Dedication
• Contents
• Preface
• Acknowledgments
• Author Biographies
• 1 Introduction to Marketing Management
• 2 Need for Scientific Marketing Analysis
• Chapter 3 Understanding the Consumer’s Perspective
• Chapter 4 Product and Brand Management
• Chapter 5 Pricing Decision: A General Perspective
• Chapter 6 Some Purchasing Policies Under Fluctuating Pricing
• Chapter 7 Distribution Management
• Chapter 8 Promotional Management Using OR Concepts
• Index