Research Paper Help on Marketing Principles

MARKETING PRINCIPLES

Introduction

Marketing principles refers to a set of ideas, procedures, and techniques applied by different business organizations as a way of optimizing their market performance of their existing products and to introduce new products in a new market. The types of marketing strategies adopted may vary from one organization to another. Marketing strategy incorporates different elements that include promotion, pricing, distribution, and advertising. These elements .collectively ensure that the business operations of a particular company become successful. This report illustrates different issues and areas related to marketing principles. Morrison supermarket will be used as an example to illustrate these principles.  Morrison is one of the biggest grocery chains in the United Kingdom. The grocery chain was founded in 1899. In 2014, the company suffered a 2.8% decline in its annual sales revenues. To offset this decline, the Morrison’s management decided to open new stores in different parts of the UK where it had no presence. This report will demonstrate various marketing principles that relate to the company.

Task 1

1.1. List and explain the various elements of the marketing process

The marketing process responds to customers` needs and preferences. The marketing process elements include various collaborative tools that the company employs to define its target customers in the market. The four primary elements of marketing process are production, pricing, promotion and placement. They are popularly referred to as the 4Ps. Based on these elements, the marketing department in an organization is able to get a clear picture about the company`s sales targets and marketing position.  According to Kotler and Armstrong (2004, p. 34), by assessing the 4Ps, a company is able to determine its marketing targets and objectives. Morrison determines its marketing goals and targets based on the 4Ps of marketing process as indicated in the diagram below.

Production-production determines the manufacturing target of a business. Morrison is ranked as the fourth biggest grocery retailer in the United Kingdom, with approximately 403 outlets in different parts of the country. Morrison produces numerous fresh food items of different quality and sells the same to its customers. Recent data about the company indicates that the company receives more than a million customers each day in its different locations across the UK. Among the company`s products include kids and baby products, recipes, nutmeg grocery products, toiletries and various lifestyle products.

Pricing-this is the second element of the marketing process, which ensures that the set prices for products and services are competitive in the market. Morrison determines the prices for its numerous products based on customers` expectations and the quality of these products. Price is one of the key variables that influence customers` purchase decisions. Customers choose theproducts they purchase based on the availability and affordability of these products. Morrison offers different types of products at different prices. This allows customers to purchase their desire products based on their budget.

Placement– placement determines the availability of products to customers. In a marketing mix, place includes all the organizational activities that make the product or service available to end users(Kotler and Armstrong, 2004, p. 65).  Morrison presently operates 403 retail outlets and employs 124,000 people to ensure that the products reach potential customers.

Promotion-promotion indicates how much a company is successful in operating its business. Promotion determines the level of progress a business makes. Morrison began as a small business back in1899. At present, the company has grown to become one of the largest retailers in the UK. This is an indication that the company has continuously promoted its business, thereby creating a wider customer base across the UK.

1.2. List and evaluate the benefits and costs of a marketing orientation for a selected organization

            Marketing orientation can be defined as a business approach that focuses on identifying and fulfilling the unexpressed demands and needs of potential customers. It is also referred to as product orientation/ sales orientation. Broadly speaking, marketing orientation is simply a coordinated marketing campaign that involves customers and marketers. Marketing orientation entails costs and benefits (Akber, 2008, p. 44). It has significant effects on a company`s marketing efforts and profitability. Through market orientation, a company can get an opportunity to introduce a new product/service in the market. For instance, Morrison can make use of market orientation to update the services and products to suit customers` desires and demands. By using marketing orientation, Morrison can make new product launches, achieve customer satisfaction and become more profitable. In addition, marketing orientation can help management in creating long-term loyalty among its customers by continuously updating its product offerings. One of the major disadvantages of marketing orientation is that it can result in a constant change of business direction, which can be costly in terms of time and money wasted in the production process.

Task 2

2.1 Show macro and micro environmental factors which influence marketing decisions

            A company`s board of directors has to take into account the macro and micro environmental factors when making any marketing decisions. Micro-environmental factors directly affect marketing decisions. The major micro-environmental factors include marketing intermediaries, customers, suppliers, marketing competitors and the public. These factors affect the relationship between a company and its various target markets (Kotler and Kotler 2001, p. 66). Morrison’s management make all important marketing decisions by taking into account the views of its suppliers, customers and intermediaries. On the other hand, the macro-environmental factors affect a company`s marketing decisions indirectly. Macro-environmental factors are outside the control of management. These factors include economic, political, social, legal, technological and cultural factors. As already noted, Morrison operates in different parts of the UK. The company has to deal with customers from different age groups and cultures, and therefore have different tastes and preferences. As a result, the company`s management must take into account the macro-environment factors to optimize their existing products and introduce new ones in the UK market. The macro and micro environment factors can affect Morrison`s marketing decision making in several ways that include: creating long-term relationships between the company and its various target stakeholders (the public, consumers and suppliers); tackling social, cultural and economic issues; dealing with social and political aspects of the business; and determining the threats and opportunities posed by legal and technological factors in making marketing decisions.

2.2 Propose segmentation criteria to be used for products in different markets

            Segmentation is often used by marketing managers to identify the target customers for a particular product/service.  The majority of businesses use market segmentation to identify their target customers from the larger market. Through segmentation, businesses are able to determine the potential areas to focus their marketing efforts. Segmentation offers several benefits. It saves on costs, time and resources by allowing the organization to determine its potential audiences and target customers. Customer markets can be segmented using four main strategies: geographic segmentation; behavioral segmentation; demographic segmentation; and psychological segmentation.

            Morrison`s uses all these segmentation strategies to look for potential customers. The company should closely monitor its segmentation strategies to fully utilize the market for its current products and create new markets for its new and existing products. Using geographic segmentation, the company can determine which specific locations offer more customer traffic. Similarly, behavioral segmentation can help the company to analyze consumer choices and preference for particular products and services. Similarly, psychological and demographic segmentation can help the company reach many potential customers across the UK.

2.3 Choose a targeting strategy for a selected product/service

            Companies use targeting strategy as a strategy for choosing potential customers to whom the business seeks to sell it products/services. A targeting strategy segments products/services based on customers` behavioral, demographic, psychological characteristics. The targeting strategy selected can be influenced by factors such as the maturity level of the market, consumers` tastes and preferences, level of competition in the market, and the company`s profit margin. After the market segments have been identified within the broader market, a company should use these segments to deliver their products to satisfy the customers` needs (Kurtz, 2010, p. 132). The figure below clarifies how targeting strategy is conducted:

Source: Weinstein and Weinstein (2004, p. 28).

A company`s targeting strategy incorporates the marketing objectives defined by the marketing department.  Setting the marketing objectives is important in fixing revenue and sales targets. Tactics and adaptation strategies are equally an important component of targeting strategies. A business should apply the necessary tools to determine its targeting strategies. Morrison`s has to deal with different types of consumers because of the many products it offers. There are numerous targeting strategies that include: concentration marketing; mass-marketing; and differentiated marketing/selected marketing.

Under concentration marketing, a business targets a specific and well defined group of customers within the larger market. This strategy can be profitable for small companies operating in small scale. Mass marketing deals with marketing one product in the larger marketplace, while selected marketing is a strategy used to target a wider group of customers who are geographically dispersed. This strategy is the most suitable for large scale companies. As one of the largest retailers in the world, Morrison can benefit from applying differentiated/selected marketing strategy in its marketing efforts. This strategy is the most appropriate considering the scale and scope of Morrison’s operations across the UK.

2.4 Demonstrate how buyer behavior affects marketing activities in different buying situations

            Consumer behavior has a significant influence on marketing activities. As a result, marketing initiatives should be realigned with customers’ psychological and behavioral patterns. Proper knowledge customers` behavior is important in designing an effective marketing strategy. Customer behaviors include aspects such as what consumers purchase, how they purchase them, their preferred price range, and their preferred time of making purchases. Business managers should carry out market research to identify all these aspects prior to undertaking their marketing activities (Wilson and Gilligan, 2005, p. 22). Three important factors tend to influence consumers` purchase behavior: personal factors; psychological factors and social factors.

            Morrison`s management must take into account the behavioral factors that influence consumer purchase decisions in order to operate profitably in the UK market. By applying the stimulus response model, Morrison`s marketing manager can be able to identify how customers` respond to the company`s products and services. Morrison`s should use the model below:

Source: Buckley (1991, p. 492).

            Behavioral, psychological, and physical factors are likely to influence purchase patterns of Morrison`s customers. As a result, each of these variables has far reaching implications on Morrison’s marketing activities.

2.5 Propose new positioning for a selected product/service

Determination of a new position is very important for a service business. The majority of businesses areinterested in creating a new position for their businesses. For Morrison, extending its smaller stores to different parts of the United Kingdom is a new positioning strategy for the company. This expansion can enable the business to attract more customers to its stores and increase its sales revenues. The perceptual map below, demonstrates Morrison`s present positioning.

Source: Hawkniset al., (2011, p. 349).

In 2009/10 fiscal year, the company`s market share in the UK stood at approximately £90.00 billion. Morrison`s market share in the UK over the period 2007-2009 increased significantly from 11.9% in 2007 to 12.3% in 2009. However, in the recent past, the company has witnessed a decline in sales. Its market share in 2014 was 10.9% compared to 11.7% in 2010 (Brooks, 2014, p. 1). Considering the position of the company, the marketing manager should consider introducing a marketing strategy for new products and services to meet customer demand and prevent a further drop in market share. Morrison`s should promote its brand as a company that delivers the best quality products across the UK. The company`s existing marketing strategies also need to be updated to improve sales performance.

Conclusion

Marketing strategies are important components for all business organizations. A business has to choose and implement particular strategies to succeed. Whether a company chooses to optimize its current product/service offering or to introduce new products, it has to employ marketing strategies. Morrison’s is one of the largest grocery and food retailers in the UK. The management of the firm has decided to develop new products to be sold to different customers across the UK. This report offers Morrison`s management the most appropriate targeting strategy the company can use to reach its potential target market for the newly introduced products.

List of References

Aaker, D. 2008, Strategic market management. New York: J. Wiley & Sons.

Brooks, B. 2014, Tesco and Morrisons lose share again in latest Kantar figures.

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TheGrocer.co.uk. Available at: http://www.thegrocer.co.uk/channels/supermarkets/tesco-and-morrisons-lose-share-again-in-latest-kantar-figures/359084.article [Accessed 5 Mar. 2015].

Buckley, PG 1991, ‘An S-O-R Model of The Purchase of an Item in a Store’, Advances In Consumer Research, 18, 1, pp. 491-500, Business Source Complete, EBSCOhost, viewed 4 March 2015

Hawknis, D., Mothersbaugh, D. and Mookerjee, A 2011. Consumer behavior. New Delhi: Tata McGraw Hill.

Kotler, P. and Armstrong, G. 2004, Principles of marketing. Tenth Edition, New Jersey Pearson Education Inc.

Kotler, P. and Kotler, P. 2001. A framework for marketing management. Upper Saddle River, N.J.: Prentice Hall.

Kurtz, D. 2010, Contemporary Marketing.Mason, OH: South-Western Cengage Learning.

Weinstein, A. and Weinstein, A. 2004, Handbook of market segmentation. New York: Haworth Press.

Wilson, R. and Gilligan, C. 2005, Strategic marketing management. Amsterdam: Elsevier/Butterworth-Heinemann.