The Essentials of Contemporary Marketing

Mo Willan

• Publisher: Bloomsbury Business
• Year: 2021
• ISBN:
  9781472963727
• Edition: 1
• Topic: Business
• Subtopic: Marketing
• Index: Business

An essential guide to contemporary marketing that demonstrates, via case studies, the move towards marketing techniques that better reflect consumer needs. As the effectiveness of traditional marketing techniques continues to diminish, contemporary marketing increasingly becomes the most reliable method of expanding outreach and reflecting the needs of the modern consumer. When implemented, these contemporary strategies offer the greatest support for their client base, with a product range that adapts to the desires of the target market. The channels used to underpin these strategies are also radically different from traditional methods – placing emphasis upon platforms such as social media. Designed for both undergraduate and postgraduate students, as well as those in executive education and general business, The Essentials of Contemporary Marketing covers a wide range of themes, including: - Consumer behaviour
- The latest marketing research
- Services marketing
- Brand management
- Global marketing, and
- Ethics in marketing. Each chapter includes case studies to illustrate and contextualise the topics covered, featuring companies as diverse as Amazon, McLaren, Unilever, UBS and Virgin Money. In alignment with its subject matter, The Essentials of Contemporary Marketing prioritises practicality over theory-based content - providing a comprehensive and contextualised insight into how marketing is developing in the 21st century.

CHAPTER ONE

Introduction to Marketing

To study any subject, first start by gaining a fundamental understanding of it. Marketing is one of the most misunderstood of subjects. For most people who have not studied it before, their understanding of marketing revolves around words such as ‘advertising’, ‘selling’, ‘promotion’ and so on. In as much as selling and advertising constitute part of marketing, however, the study of marketing transcends selling and advertising. The two most widely used definitions of marketing are the ones put forward by The Chartered Institute of Marketing and The American Marketing Association.

The Chartered Institute of Marketing (CIM), the largest professional marketing organization, defines marketing as:

The management process concerned with identifying, anticipating and satisfying customer requirements efficiently and profitably (CIM, 2015)

This definition entails four key components, namely:

1) Identifying customers’ wants
The management of the organization should consistently seek to understand what customers want and then develop the right products and services to meet and satisfy those wants. This involves engaging in continuous market research in order first to find out and determine as much as possible what exactly the wants of customers are and then to put in place the right strategies and tactics to address and satisfy such customer wants. Amazon has been very successful in this regard by developing products and services that are affordable, easy accessible online and delivered to customers quickly at their doorsteps.

2) Anticipating customers’ wants
The needs and wants of customers are never the same all the time. In fact, customer wants change all the time. Therefore, the ability of the firm’s management to project the future wants of customers is paramount to marketing success. Failing to foresee, capture and address consumers’ ever-changing wants will make the firm’s products redundant. Blockbuster Video is a classic example of failing to project that consumers were migrating towards digital platforms for watching films as opposed to borrowing video tapes!
   This can also involve creating needs for customers. Indeed, many firms today tend to develop products and then convince consumers to buy even though their customers had never thought before that they needed such products.

3) Satisfying customers’ wants
This aspect of the marketing definition builds on and is the culmination of the first two components. Customer satisfaction implies that the firms produce the right products, at the right price, in the right place with the right promotional messages. It also entails that the service involved in delivering the product is fast, easy to understand and convenient for customers, and that the environment in which the product is delivered or served is comfortable, conducive and welcoming. Customer satisfaction is the bedrock of effective marketing and can yield two possible outcomes:

• Satisfied customers will come back, repurchase the product and recommend it to at least three other people. This ultimately translates into customer loyalty and higher rates of profitability for the firm. Existing customers’ recommendations are considered the best advertising for the firm because it is free and more trustworthy than the firm’s own communications.

• Dissatisfied customers will not repeat purchase from the firm and will relate their dissatisfaction to at least seven other people. The implication of this is that the firm will lose much needed sales income as well as sustain damage to the brand.

It is important to distinguish between customers and consumers. Whereas consumers are the actual users of the products, customers can be people who actually buy the products. For example, a mother buying diapers or toys for her baby is the customer but the baby is the consumer of the product. In many cases, a customer can also be the consumer as in the case of women buying make up, but consumers are deemed the most influential on purchase decisions.

The American Marketing Association defines marketing as:

‘. . . the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society.’ (AMA, 2013)

The AMA definition explains that marketing should serve a much broader purpose than simply serving the actual needs of individual customers but rather should also incorporate meeting the needs of the different stakeholders, including partners and the wider society in which the firm operates. This is in line with the societal marketing concept, which implies that firms should endeavour to produce products that meet and satisfy the needs and wants of both customers and the society.

This definition also places heavy emphasis on creating and delivering value to stakeholders. Value in this context means benefits for all the pertinent stakeholders, such as employees, shareholders, suppliers, customers, government and society. Each of these different stakeholders should benefit from the activities of the firm in different ways – jobs for employees, dividends for shareholders, products for customers, tax revenue for governments and investment in the societies in which the firm operates.

Evolution in the Practice of Marketing

Over the years, marketing has evolved from a transactional exchange focusing on single sales and interactions with customers to becoming more relationship-focused. Relationship marketing places heavy emphasis on building and maintaining long-term mutually beneficial relationships with customers. There are a number of trends that will continue to impact on the practice of marketing as it further evolves and moves into the future. These trends include the following:

• The Internet and connectivity
In recent years, the Internet has transformed the way organizations provide their products and services and how consumers interact with brands. Advances in technological developments, globalization, consumer confidence in the security of financial payment systems, and changing consumer lifestyles with an increasing emphasis on convenience have all contributed towards the growth of online interactions between organizations and their consumers. Consumers of Generation Z are digital natives, who are most comfortable interacting with organizations using digital technologies and expect firms to provide such platforms, enabling them to interact at all times and wherever they are.

• Ethical Consumption
Growing consumer concerns for environmental issues and sustainability will continue to influence consumer behaviours, and firms must factor this into their decision-making and strategies. The related issue of Corporate Social Responsibility (CSR) implies that firms must be good, active and responsible citizens, showing genuine concern for the well-being of both the societies in which they operate and the wider world. This issue of environmental friendliness and consideration is especially important if firms are to succeed in attracting the millennial generation, who attach a heavy emphasis to issues of environmental protection.

• Growing Importance of Capturing Consumer Data
Marketing success very much depends on understanding consumers. This calls for firms to invest, develop and harness consumer data with the objective of better identifying and addressing consumer needs. The use of marketing metrics is important and should be based on first capturing critical consumer data and then implementing mechanisms designed to measure marketing efficiency and effectiveness.

Functions of Marketing

Marketing is one of the most important functions in any organization. This is because it serves the critical purpose of ascertaining customers’ wants and producing the right products and services that the firm offers to consumers, which in turn generates sales and ultimately profits. The functions of marketing include the following:

• Determining the most efficient and effective marketing strategies that will contribute towards the achievement of the firm’s objectives. This includes determining the types of customers that the firm should target and serve and facilitating exchange relationships with such customers.

• Creating strategies for the positioning of the firm and its products. This implies crafting effective communications that will be effective in creating positive brand perceptions in the minds of its stakeholders

• Scanning the business environment continuously to identify possible opportunities and likely threats and how to exploit such opportunities and mitigate the threats.

• Conducting market research to ascertain customer wants and communicating these internally so that the firm is in a better position to address these ever-changing customer needs and wants. Market research recommends the right products and services for the firm to offer its customers to make it relevant and competitive. This will include a consideration for such critical issues as product, price, place, promotion, people, process and physical evidence (together, these are often referred to as the 7Ps).

• Determining the firm’s basis for competitive differentiation and advantage. This implies that the marketers should contribute towards making the firm and its products unique relative to its competitors, and is arguably the most challenging function of marketing, especially in highly competitive markets.

• Measuring and evaluating the effectiveness or otherwise of the firm’s marketing activities. This involves measuring whether the firm’s set marketing objectives have been attained or not. If not, why not? What can be done moving into the future to correct any anomalies? Such objectives may include increasing market share and profitability.

Criticisms of Marketing

Despite the important function played by marketing in the success of organizations, it is a practice that has also been criticized. These criticisms include the following:

• Marketing encourages people to buy things that they do not need. This is often achieved by means of intense advertising and promotions.

• Marketing creates waste through the overproduction of goods that are often thrown away when not sold. This leads to environmental waste, which has gained a lot of traction and importance in modern-day business practice.

• Marketing encroaches on customer’s privacy with the sending of unsolicited messages, the sharing of customer data and in recent times the actual losing of customer data to hackers.

• Marketers embellish product claims in order to make customers buy the firm’s products. Arguably, this is one of the most significant negative aspects of the marketing function, especially in the cosmetics and vitamins products industries

• Marketing discriminates in customer selection. Some firms are very specific in terms of the types of customers they wish to attract and serve. Though this is legal and also smart from a business point of view, it is considered by others as unethical, creating and dividing people into ‘classes’.

CHAPTER TWO

Marketing Orientations

Marketing as a discipline is quite broad and different firms adopt different approaches in terms of how they practice it. Market orientation in its simplest form refers to the approaches or philosophies that underpin how firms will go about meeting and satisfying the needs of their customers.

There are typically five different orientations, namely:

1) Product orientation

2) Production orientation

3) Sales orientation

4) Marketing orientation and

5) Societal orientation

Product orientation

The firm’s approach is based on producing products that are superior to the competition. Firms that adopt this approach invest heavily in research and development and are consequently able to develop products with unique features and better qualities that will ultimately attract customers to the product. Dyson, which manufactures vacuum cleaners, hairdryers and hand dryers, is a classic example of a modern-day firm that practises product orientation.

Production ...