Marketing; Its role

There’s no doubt that marketing plays an important part; either as an innovative advertising campaign in itself or emphasising a company’s innovative products and/or services. As defined by Jobber, the marketing concept is “the achievement of corporate goals through meeting and exceeding customer needs better than the competition” (2007:1001). “Management must think of itself not as producing products, but as providing customer-creating value satisfactions” (Levitt, T. cited in Jobber, D. 2007:3).

Marketing campaigns aim to interest and engage potential and existing customers to cause them to want to watch the advert again; maintaining a company’s stakes and messages that it wants to portray. The important element of marketing is that a business can always improve its stakes and image; making innovative marketing a critical aspect.

As explained by Virgin Atlantic’s Sales and Marketing Director at a University talk, the company’s £10 million global marketing campaign in the UK was designed to build the airline’s brand presence on a global scale and was used to significantly increase demand for its services. The strapline "Your airline’s either got it or it hasn't" was created following their 25th birthday campaign last year “Still Red Hot” which was one of the top ten marketing moments of 2009 by Campaign Magazine. Many people describe travelling with Virgin as being special and different; as illustrated by their marketing campaign that gives them a competitive edge. In January/February 2011, Virgin Atlantic spent £1,869,222 on advertising their brand on TV and their return was £23.46 per £1 spent! A media plan needs to be efficient, productive and incorporate an awareness of budgeting which has clearly been, and is, successfully implemented by this company in particular.

Product Life Cycle & Innovative Marketing

The product life cycle is “a four-stage cycle in the life of a product illustrated as sales and profit curves” (Jobber, D. 2007:1002). These stages include: introduction, growth, maturity and decline. As well as products, adverts also have a lifespan making it vital to create innovative marketing campaigns that are more powerful each time; therefore a continual process. This could be achieved by extending campaigns outdoors by incorporating a snapshot from an advert; using photography to amplify a company’s assets and products. Due to the shortening of the product life cycle, marketing is crucial to implement extension strategies or to remind consumers that certain products still exist.

Innovative marketing requires companies to “continuously seek real product and marketing improvements” (Kotler, P. and Armstrong, G. 2006:639) and doesn’t overlook ways to improve its processes as this can consequently lead to customers using another company who has found a much better way.

In 1996, Samsung attempted to overtake Sony by releasing a wide variety of new, stylish and innovative products which were designed by a newly recruited group of designers. Their new product range was supported by a $400 million marketing campaign. The company is now well established in today’s market focusing on high-end and cutting edge technologies.

Another example of an innovative marketer is Colgate-Palmolive. According to Kotler, P. and Armstrong, G. (2003:615), “new products contribute 35% of Colgate’s revenues”.  It launched an extensive range of toothpastes that were highly successful amongst consumers. This was achieved through extensive market research allowing them to gain information regarding shifts in demographics and concerns. Today’s society has become more health-conscious due to the mass media reflecting on health issues throughout the UK and worldwide. Therefore, Colgate Total was released amongst many other products to provide customers with a variety of benefits. It reinforced its products through numerous innovative marketing programmes including health magazines which effectively targeted those members of the public who are well educated and are focussed on maintaining their health to avoid becoming another statistic. As a result, Colgate Palmolive became market leader “for the first time since 1962, with a 32% share versus Procter and Gamble’s 25%” (Kotler, P. and Armstrong, G. 2003:615).

Despite the shortening of the product life cycle as mentioned above, it is important for an organisation to not rush its product development to the extent whereby its quality can be severely affected (Kotler, P. and Armstrong, G. 2006:289). This is the risk some companies have to take to gain their competitive edge but through superfast product development, care must be taken to ensure products are developed at speed but whilst maintaining quality and improving previous/existing products. Kotler and Armstrong (2006:275) suggest that “more than 90% of all new products fail within 2 years”. This can be explained by a variety of factors; overestimated market size, actual product needed improving, incorrect positioning, too highly priced or advertised poorly.

Target marketing is significant in order to attract the right people at the right time; requiring careful consideration and thorough implementation. Masterston and Pickton (2004:110) define target marketing as “making decisions about which part of the market an organisation wishes to focus on”. From deciding this, strategies can be drawn up to communicate to the market segment(s) in the most effective and efficient way. Once a segment has been identified by a business, a product positioning strategy is developed. Through the design of the product, marketing mix and campaigns used this provides the basis of consumers’ perceptions to position the company into a given place Lancaster, G. and Massingham, L. 1999:191). Strategies such as micro-targetting can be used whereby the routes that certain people take can be researched and advertised accordingly. For example, posters can be displayed at particular Underground station exists to convert a potential customer into an actual customer.

Porter’s Five Forces

Porter’s well known Five Forces model (1980) allows organisations to assess and analyse the competitive strength and position of rival businesses. This model has been a valuable asset to managers since it was devised providing knowledge of the driving forces facing any corporation (McDonald et al 2000:132). Porter’s analysis becomes particularly useful for those organisations considering entry into a new market and therefore require an overview of current businesses.

Porter’s five forces are described by Masterton and Pickton (2004:77-79):

• Threat of new entrants i.e potential competitors
• Threat of substitutes; many alternative products and services can challenge competitive advantage
• Bargaining power of customers; very powerful if more important to suppliers than suppliers are to them
• Bargaining power of suppliers; if, for example, resources are scarce, suppliers can dictate the terms
• Inter-rivalry of competitors; highly competitive industries can encounter price wars etc.

This model can be used for analytical purposes as well as a SWOT and PEST analysis. A PEST analysis most commonly measures a market whereas a SWOT analysis measures a business unit, proposition or idea.

SWOT analysis aids the decision-making process for a variety of business situations. It is an acronym for Strengths, Weaknesses, Opportunities and Threats. It can help review an organisation’s strategy, position and direction allowing a business to achieve a ‘strategic fit’ between itself and the environment (Lancaster, G. and Massingham, L. 1999:82). SWOT relates external opportunities and threats with the internal strengths and weaknesses held by the organisation.

PEST is also another useful model allowing consideration of market growth/decline, position, potential and direction. It is an acronym for Political, Economic, Social and Technological factors. It also considers the Legal and Environmental forces a business may face in the marketing environment (Masterton and Pickton 2004:61).

References:

Jobber, D.  (2007) Principles and Practice of Marketing, 5^th Edition, Berkshire: McGraw-Hill Education

Kotler, P. and Armstrong, G. (2003) Marketing; An Introduction, 6^th Edition, New Jersey: Pearson Education Ltd.

Kotler, P. and Armstrong, G. (2006) Principles of Marketing, 11^th Edition, New Jersey: Pearson Education Ltd.

Lancaster, G. and Massingham, L. (1999), Essentials of Marketing; Text and Cases, 3^rd Edition, Berkshire: McGraw-Hill Education

Masterson, R. and Pickton, D. (2004) Marketing; An Introduction, Berkshire: McGraw-Hill Education

McDonald, M, Rogers, B. and Woodburn, D. (2000) Key Customers; How To Manage Them Profitably, Oxford: Butterworth-Heinemann