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Marketing Principles

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Marketing principles

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CONTENTS

INTRODUCTION ........................................................................................................................................5

1 Concept and process of marketing.............................................................................................................5

1.1 Various elements of the marketing process ............................................................................................5

1.2 Evaluate the benefits and costs of a marketing orientation for a selected organization..........................6

2.0 Concepts of segmentation, targeting and positioning .............................................................................6

2.1 Macro and micro environmental factors which influence marketing decisions......................................6

2.3 Targeting strategy for a selected product/service....................................................................................8

2.4 How buyer behavior affects marketing activities in different buying situations ....................................8

3.2 Explaining how distribution is arranged to provide customer convenience .....................................11

3.3 Explaining how prices are set to reflect an organizations objectives and market conditions..........11

3.4 Illustrating how promotional activity is integrated to achieve marketing objectives........................12

3.5 Analyzing the additional elements of the extended marketing mix..................................................14

4. BE ABLE TO USE THE MARKETING MIX IN DIFFERENT CONTEXTS .....................................14

4.1 P lan marketing mixes for two different segments in consumer markets ..........................................14

4.2 Illustrating differences in marketing products and services to businesses rather than consumers....15

4.3 Showing how and why international marketing differs from domestic marketing...........................15

REFERENCES ...........................................................................................................................................17




LIST OF FIGURE

Figure 1 Micro and macro environmental factors.........................................................................................6

Figure 2 Black box model of buyer behavior ...............................................................................................8

Figure 3 Buying behavior process ................................................................................... .............................9

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INTRODUCTION

British Telecom is UKs Multinational Telecommunications service provider,

headquartered in London. The company has its operations in 170 nation of the world. The main

activities of the company relates with the provision of fixed line services, mobile and TV

products and services (British Telecom, n.d). British Telecom sells their products and services to

small and medium enterprise, consumers and many other public sector organizations. The main

aim of the company is to help the customers in this ever changing world. The marketing mix and

tactics is adopted by the organization as per their objectives as well as the needs and wants of the

customers (Kotler, 2008).

1 Concept and process of marketing

1.1 Various elements of the marketing process

The key elements in marketing process helps in accomplishing the goals and also create

value for target customers. Marketing mix includes 4 Ps of marketing. These elements are vital

and forms backbone for effective marketing strategies (Mazzucato, 2002). The essentials are

very important in the present airline firm like Thomson Airways and are as follows;

Product The product and services provided by Thompson Airline includes types of seat,

departure and arrival of scheduled and charter flights, vegetarian and non vegetarian food

options, entertainment in form of phones, films and radio etc.

Price This element decides the price which should be charged for various services

offered by company to customers. Pricing of service directly affects the decision of the

consumers and psychology towards service offering. The airlines prices may vary in

accordance to seasonal demand (Lamb, Hair and Daniel, 2011).

Promotion It includes all types of communication employed by firm to market and

promotes product & Services. These mainly concerned with retailers, distributors,

consumers etc. The promotion of Thomson airlines can be through various modes like

TV channels, website, magazines and newspaper, radio etc (Clemente, 2002).

Place This factor includes the all the channels of distribution that forms the part of

process. Effective distribution is the key to success of Thomson Airway. In this era,

booking process must be made convenient to consumers as it is way to switch airlines if




passengers find it difficult to book airlines. This heightens the importance of effective

distribution.

1.2 Evaluate the benefits and costs of a marketing orientation for a selected organization

Marketing orientation can be defined as business philosophy whereby main focus of a

company is to discover needs of consumer market and ways to meet them. It is very significant

for Thomson Airways as it is growing company and hence there is a need to evaluate cost-

benefits for the same (Rogers, 2011).

The market orientation for Thomson airlines can provide numerous benefits as the

airlines firm can develop products that help to meet needs of passengers in a timely manner. It

will also help in providing accuracy with understanding of airline industry. It drives the process

of constant improvement and gives room for experimentation (Kolb, n.d). Cost factors of market

orientation are in form of investment in market research, technological infrastructure to collect,

analyzed and use data. Constant modification is also required in services and strategies (Cento,

2008). Service modifications also involve investment in form of new equipments for better

service delivery.

2.0 Concepts of segmentation, targeting and positioning

2.1 Macro and micro environmental factors which influence marketing decisions

Figure 1 Micro and macro environmental factors

(Source: Janey, 2009).

Micro and macro environmental factors have an influence on marketing decisions

according to above figure. The micro elements include suppliers, consumers, intermediaries and





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superior service experience (Rogers, 2011). Then are the travel seekers who love travelling and

seek out new experiences. They expect the journey to be comfortable. Reluctant travellers are

also a category where individuals show no interest in travel and prefer privilege programmes.

Optimizers wish to reach destination on time and select flights accordingly. Air mile users take

flights to build their air mile points (Bharadwaj, Varadarajan and Fahy, 1993).

2.3 Targeting strategy for a selected product/service

Targeting strategies are good means for advertising and very useful to maximize sales as

well as profits by directing marketing activities to the consumer base. The basic goal is to

identify target market and consumers who are interested in service and reaching them for

inducing purchase (Mazzucato, 2002). For the charter flight service offered by Thomson

airways, the firm can target leisure consumers as a part of its holiday package. In such a scenario,

differentiated targeting strategy can be adopted. Here airlines can develop separate marketing

mix strategy for the holiday packages. In this way it can attract customers for each holiday type.

In present case, a value added differentiation can fulfil wants of leisure tourists and also provide

a basis for premium pricing (Kolb, n.d).

2.4 How buyer behavior affects marketing activities in different buying situations

Figure 2 Black box model of buyer behavior

(Model of consumer behaviour, n.d).

The behavior of buyers is made up of internal and external factors that provide a detailed

explanation about why consumers prefer some services and reject others. This has a significant

impact on marketing strategy undertaken by firms to promote the service. The Black box model

of buyer behavior helps to identify the process undertaken by consumers when they decide on

purchasing a service. Consumer buying is affected by marketing stimuli like product, place, price

and promotion. The other stimuli include the PEST factors (Ferell and Hartline, 2010).




In case of Thomson airlines, the purchasing behaviour of consumers has a significant

impact on marketing activities. Researchers show that 70% of consumer care about corporate

social responsibilities in their buying decisions and are ready to pay a premium price.

Figure 3 Buying behavior process

(Source: Colgate, 2011).

Buying starts with recognition of a need or problem and hence marketing decision of

airline should be based on how firm can persuade consumers by catchy websites, pricing and

packages offered to clients. Next is the search for good airlines which begins from personal or

commercial sources. Hence challenge for marketing team is to identify which information source

influences the target markets. In the customer evaluation search the marketing decision are the

kind of information that team need to provide clients in every buying situation. In the final stage

of post evaluation purchase the marketers must be able to persuade the airline passengers that the

airline service will satisfy the needs (Rogers, 2011).





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Generating the idea

Screening of idea

Development of concept and testing (Brocke, 2012).

Marketing strategy and development

Business analysis

Developing the product

Test marketing

Commercialization (Competitive Advantage, 2012).

3.2 Explaining how distribution is arranged to provide customer convenience

The distribution channel plays a very significant role in order to provide convenience to

the customers. Articulating from this fact, distribution channel of British Telecom can appear as

one of the major source of competency for the firm (Brocke, 2012). The distribution channel

possesses such importance because it is a part of creating visibility and accessibility to the

customer. In addition to this, it also helps in enhancing the potential sale for the company. British

Telecom can possibly look at the 5 rights of distribution. These five rights are:

Right place

Right products

Rights time

Right quantity (Tinson, 2004).

Right price

The distribution channel comes under the category of place mix of marketing.

Distribution is considered as the major cost of airline industry. Due to intervention of online

sales, the face of distribution is changing. British Telecom can arrange their distribution channel

by making use of global distribution system, through travel agents, corporate sales and via

airlines websites.

3.3 Explaining how prices are set to reflect an organizations objectives and market conditions

The pricing policy of the company generally reflects the market in which it is aiming to

sale their products and services (Tinson, 2004). Prices are set not only to maximize the sales or

profit margin of the firms, but there are many other factors, which are also considered by

organizations. For instance, an airline can charge high prices from their customers because they




are aiming to sale products and services as exclusive, not because the production cost is high

(Oxenfeldt, 1982). Thus, from the fact it can be attributed that prices should be set by keeping in

consideration various factors, some of them are as follows:

Level of competition in the market

Fixed and variable cost of the company

Target group

Willingness and ability of potential customers to pay for the products and services

As per the objectives of organization

Proposed positioning strategies

British Telecom can adopt different pricing strategies. These strategies should be selected

as per the objectives and goals of the company. The important pricing strategies are explained

underneath:

Skimming pricing Under this strategy, company initially charge higher prices for the

products and services and afterwards lowers the prices with a view to make the product

available in wider market (Oxenfeldt, 1982).

Penetration pricing Here in this pricing strategy, company sets lower prices for the

products and services in order to increase the sales and profits. In addition to this, by

adopting this strategy, company can also increase their market share.

Competition pricing Under this strategy, prices of the goods and services are fixed by

the company as per the competition prevailing in the market.

3.4 Illustrating how promotional activity is integrated to achieve marketing objectives

Promotion refers to the process of communicating the benefits and products in the

potential market. The main objectives of promotion are twofold i.e. providing information in

regards with product to existing customers as well as persuading them to make a purchase of the

product. It is also being considered as an important element from all other parts of marketing mix

(Bowman and Gatignon, 2010). Without this element, customers will not be aware in relation

with the products and services and its potential to fulfill their needs and desires. Generally, there

are four major tools of promotion mix i.e. public relation, advertising, sales promotion and

personal selling. Thus, it can be said that promotion mix is regarded as the total communication

program of the company which consist of various blends of its components (Brocke, 2012). It is

also further used to accomplish the objectives of the organization.





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3.5 Analyzing the additional elements of the extended marketing mix

Marketing mix is being defined as process of integrating and designing various elements

of marketing in such a way so that the objectives of the organization are accomplished. The

marketing mix of a company includes mainly four elements i.e. price, place, promotion and

product. The additional elements of marketing mix include people, process and physical

evidence.

People: It is considered as one of the most important ingredients to any service provision.

The effective and appropriate use of employees and people is vital in any business. The

company should hires and trains those employees, which reflects their organization in the

market (Tinson, 2004).

Process: Process element relates with the system, which is being used to assist the

company in delivering the service.

Physical evidence: It is being defined as that element of the service mix that persuades

the buying behavior of customers and also allows them to visit again and again in order to

make decision in regards with the company.

4. BE ABLE TO USE THE MARKETING MIX IN DIFFERENT

CONTEXTS

4.1 Plan marketing mixes for two different segments in consumer markets

Consumer market encompasses fast moving products and services for the customers,

which are high in quality as well as have high durability. Consumer market is being represented

by households and individuals that purchase goods and services for their own use and purpose.

This market is increasing at a steady pace each and every year (The truth behind a niche market,

2011). A market segment on the other hand, includes group of consumers, who share alike wants

and needs. It is also known as segment market. Marketing mix for two different segments i.e.

niche and local marketing in consumer market are as follows:

Niche marketing Niche market is nothing, but the target portion of the market. It is

narrowly defined fraction of a customer group seeking a unique mix of benefits. Through

niche marketing, companies aspire to boost up their sales while attracting more and more

customers (Jackson, 2008). Generally, marketer determines the niche by dividing one

segment in to other sub- segment. Thus, in this particular segment, marketing mix will




be: product should be as per the needs and wants of the customers. Pricing of the product

and services need to be attractive so as to make sure higher sales and profits. The place as

well as the position of the market is very significant in niche marketing. And finally,

promotion should be such that fits with the objectives of the firm and aware consumers in

regards with the products and services as well as its features (Jackson, 2008).

Local marketing The growing trend of gross-root marketing is being reflected by Local

marketing. In this market segment, all marketing related activities concentrate on grass-

roots level. In local marketing, the products and services are promoted by connecting

them with the unique and interesting experience and not only by communicating its

benefits and characteristics. Thus, marketing mix will be according to its objectives (The

truth behind a niche market, 2011).

4.2 Illustrating differences in marketing products and services to businesses rather than

consumers

The aim and objectives of companies is quite different while marketing products and

services to businesses or organizations rather consumers. This is because of the fact that the

decision making process being involved in purchasing products and services is different from

that of the consumers (Manktelow and Carlson, n.d). In addition to this, the market segment is

also diverse as the firm target market is employees or the departments. While selling goods and

services to the organization, there will be no direct contact between the buyer and seller as in the

case of consumer market (Zachariah, 1996). The demands and services will be different in the

organization and probably they will require more intense knowledge and understanding in

regards with the products, its quality and production. Further, in case of business to business

marketing, the volume of transaction is also higher as compared to the consumer market. This

can be attributed from the fact that it involves more sub-components and raw-materials. On

contrary, consumer market specifically includes sale of finished goods to the ultimate users

directly (Kotler, 2008).

4.3 Showing how and why international marketing differs from domestic marketing

International marketing is being adopted by those companies who wish to globalize their

products and services and implement international marketing strategies in order to promote their

goods (Zachariah, 1996). Each and every nation has different culture, political background,





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REFERENCES

Books and Journals

Bowman, D., and Gatignon, H., 2010. Market Response and Marketing Mix Models. Now Publishers Inc.

Kleindl, B., 2006. International Marketing. Cengage Learning.

Kotler, P., 2008. Principles of marketing. 12

Oxenfeldt, A. R., 1982. Pricing Strategies. Amacom.

Tinson, J., 2004. Marketing Strategies- A 21 century approach. FT/prentice hall.

th

ed. Pearson education India.

st

Zachariah, P., 1996. Marketing Management. 1 ed. Mittal publication. st

Online references

British Telecom. . [Accessed on 26 2012].

n.d. [Online]. Available through: th

December

Brocke, K. V., 2012. The importance of public relations. [Online]. Available through: . [Accessed on 24 December 2012].

Competitive Advantage. through: 2012. [Online]. Available

. [Accessed on th

26 December 2012].

Jackson, J. B., 2008. Niche Marketing matters. [Online]. Available through: th

. [Accessed on 26 December 2012].

Manktelow, J., and Carlson, A., n.d. The Marketing Mix and 4 Ps tools. [Online]. Available through: . [Accessed on

th

24 December 2012].

Porter's sustainable competitive advantage model. n.d. [Online]. Available through: .

th

[Accessed on 26 December 2012].

The truth behind a niche market. 2011. [Online]. Available through: .

th

[Accessed on 24 December 2012].

