Principles Fundamentals Of Marketing Essay

Evolution of the concept of modern marketing The concept of marketing has been present for centuries. However, the concept of modern marketing was established in the late nineteenth and early twentieth centuries. The first concept of modern marketing was based on the idea to sell whatever was being produced with no direct relation to what customer required. There were three assumption on which the concept was based: presence of a ready market to absorb whatever was produced, lower production cost to increase profits and just having very few basic product varieties. This was known as marketing done through product orientation and lasted from 1869 to1930 (Stone, 2001, p. 11). The above concept of marketing meant mass-product of products at low costs, which meant surplus of unsold goods, which led to the failure of the theory. Supply had outstripped demand and there was competition among competitors. Hence, at this stage, the demand needed to be tailored to the supply and also the customers needed to be persuaded that their product was better than the competitors. This was the phase when marketing was done via sales orientation and lasted from 1930-1960 (Stone, 2001, p. 11). Many of the sales tactics employed by sales people were dubious and in some cases totally dishonest. This led to customers getting put off by the tactics and led to huge losses for companies. At this stage the companies started recognizing customers as kings and the products started being tailor made for the customers, with much variety. Market segmentation too began at this stage to differentiate between product varieties. A lot of emphasis was put on innovative selling, social responsibility among companies. This is the marketing oriented concept and started from 1960 till the late 1990 (Applbaum, 2004, p. 203). While the concept still works, rapid globalization starting in the 1990s has ensured that the market size cannot be increased beyond a certain stage, and hence many of the companies have started looking at creating demand and satisfying them. This is the latest trend along with the marketing concept and the future belongs to controlling markets by creation of demand among potential customers (Applbaum, 2004, p. 203). Identification of markets The process of marketing commences with the identification of possible markets for the product, and culminates when the customers are satisfied with the products and services provided by the company. The whole idea behind identification of target markets is to find groups of people who consider that purchasing goods or services from the company would bring them benefit or value. Identification of market involves market segmentation, which is to find groups of people with similar wants and needs, so that products can be designed tailoring to the needs of these segments. The segments can be distributed based on gender, age, family size, geographical distribution etc. Target markets should be clearly identifiable and should consist of people who are able to buy the products if they are happy with the idea of possessing it (Weitz, Wensley, 2002, p. 3). Design of products to meet wants & needs Any marketing oriented company views customers as rational human beings having needs that apply universally to all human beings, and wants that consists of values that are rationally optional i.e. their tastes and preferences are logical and necessary for them, but not necessary to all the other human beings. A marketing oriented company then identifies the requirements of customers and designs its products suiting to the needs and wants of the people. In many cases the customers themselves are not aware of these requirements, the company designs a products and then markets them highlighting the requirements their product would fulfill thus creating a demand. Companies require the identification of needs and wants, to identify target markets, perform correct market segmentation, customize the products and sell it to people (Peter, Donnelley, 2002, p. 110). Pricing strategies Pricing is perhaps one of the most important decisions taken by marketing mix elements. This part of the marketing strategy decides organization’s profits, revenues and also to a very large extent competitiveness. Pricing strategies must be consistent with the organization’s marketing objectives and can result in prices that are high, low or neutral as compared to the competitors’ prices. Many companies use a range of pricing strategies which reflects the differences in the product portfolio, and are aimed to generate profits as well as satisfy the customers. Usually pricing of a new product in the market is complex, because everything is based on perceived values for the customers, and the estimates are mostly speculative (Cooper, Argyris, 1998, p. 506) Distribution structures & systems, promotional activities Distribution system ensures that the products reach the end customers with unnecessary delay. Efficient distribution system is directly related to the performance of a company in the market. Distribution channel consists of a combination of institutions through which a seller markets its product to the ultimate customer. Not all companies however have distribution channels, a classic example of which is Dell. However, majority of the large company consider distribution channels as efficient means to transfer the goods to the customers. Following are the elements of major marketing intermediaries or the components of a distribution channel: Middlemen and merchant middlemen, agents, wholesales, retailers, brokers, manufacturers agents and distributors (Peter, Donnelley, 2002, p. 157). While distribution channels facilitate the product reach to the customers, the promotional activities are done to make sure that the customer is aware of the product’s existence in the market. In the present times, this activity is very important due to the multiple sellers available for each product. Many of the company put up promotional offers to make the customers try out their products. Advertising is one of the most important type of promotional activity. In addition to this, many companies also tie up with existing facilities and sponsorship events to promote their products and services (Peter, Donnelley, 2002, p. 132). The evaluation of the marketing effort The evaluation aspect of marketing management involves making carefully judged objectives and media selection and measuring results against pre-determined goals. This activity is important because advertising, promotion and distribution channels are the costs which the company incurs at the time of marketing a product, and the efficiency of the methods would help in determining the effectiveness of these links of marketing management. This process is done through marketing research where the performance of the overall marketing systems is evaluated. It can be done by a third party or by organizing polls by the company or even by calling customers to ask their opinions (Varey, 2002, p. 316) Marketing problem identification Marketing problem identification is the first and foremost step of the marketing research process. The necessity of identification of a problem is very important. Unnecessary broadening or narrowing the scope of marketing problem leads to a waste of efforts and money spent. There must be consensus between the marketing managers and researchers about the specific nature of the problem (Majumdar, 1991, p. 11) Sources of secondary data Secondary data is defined as the data collected earlier for a purpose other than the one currently being pursued. In fact by definition any data, which is available prior to the commencement of marketing research, is secondary data. The key advantage of such data is the low cost and less time required for obtaining the data. It can also give insights to a situation, which may be exploited at a later stage. Care should however be taken to ensure that the data is not obsolete with reference to the problem being studied, and is also relevant (Majumdar, 1991, p. 42) One of the most important sources of secondary data are the government reports. In addition there are many research companies like A.C. Neilson and Co., Arbitron Co. IMS International, and Information Resources International who provide such data. Finally trade groups such as American Medical Association, National Association of Retail Dealers of America, or business publication like Million-dollar Directory and the Encyclopedia of Associations also provide useful secondary data that can be used by companies (Peter, Donnelley, 2002, p. 132). Sampling The sampling process consists of determining the target population on which the research is to be done related to the marketing problem. This target population would determine which elements should be present or not present in the research. Sampling unit is used as a basic unit to select elements from a target population. The next step is to select the sampling frame, which represents the samples from the target population. The perfect sampling frame is one in which every element of the target population is represented only once, and no elements are excluded or repeated. After this comes the sampling techniques which can be of many types like probability and non-probability sampling techniques, single unit and cluster sampling, un-stratified and stratified sampling, equal unit probability and unequal probability sampling, and single stage and multi stage sampling methods. Next step after this is selecting the sample size, which is an important criterion defining the accuracy of the research, but is always constrained by availability of target population and budget for research. This should be balanced to get the most accurate results within a target population. Finally the sampling process is executed by starting out to collect data from the target population (Cant, p.94) Experimentation In experimental research, the researcher manipulates an independent variable and measures its effect. This is done so as to understand the importance of a particular parameter on the target population, which serves to better understand the needs of the population. Experimentation is also used when the relation between variables is required to be measured. Many issues need to be researched while conducting an experimental research like setting up the environment, selection and measurement of dependent variable, the selection and assignment of test units, and control over extraneous and other variables (Cant, 2002, p.94) Data collection, analysis & report presentation After the data is taken from primary or secondary resources, it needs to be collected. The collection process is qualitative or quantitative in nature based on the type of information required. The data collected is analyzed using various techniques, which differ, from the type of source of data being used: primary or secondary. At the end a research report is prepared.   The report should contain the detailed information research process, which was used while conducting the study. The research report should also consist of the reason for the research to take place, give a brief problem statement and define primary and secondary objectives of research. In addition, the report should have the sources of information clearly mentioned. The next part of the report is where the researchers mention their finding, clearly defining the limitations and assumptions taken while conducting the data. The researchers many times include comprehensive tables and graphs to illustrate their findings. Finally based on the data and analysis the research the report gives conclusions and recommendations about the finding and many times also give the possible solutions of the problem. At the time of presentation an oral explanation is always preferred where the concerned parties can discuss and debate about the various finding and conclusions (Cant, 2002, p. 52).                                                                                                                                                 References Applbaum K, (2004), â€Å"The Marketing Era: From Professional Practice to Global   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Provisioning†, Roultedge, Published: New York Cant MN (2002), â€Å"Marketing Research†, New Africa Books, Published: South Africa Cooper CL, Argyris C, (1998), â€Å"The Concise Blackwell Encyclopedia of Management†, Blackwell Publishing. Majumdar R, (1991), â€Å"Marketing Management: Text Applications and Case Studies†, New Age Publishers, Published: New Delhi Peter JP, Donnelley JH, (2002), â€Å"A Preface to Marketing Management†, McGraw-Hill Professional, Published: New York Stone P, (2001), â€Å"Make Marketing Work for You: Boost Your Profits With Proven Marketing Techniques†, How to Books Ltd, Published: Oxford Varey RJ, (2002), â€Å"Marketing Communication: Principles and Practice†, Roultedge, Published: New York Weitz BA, Wensley R, (2002), â€Å"Handbook of Marketing†, SAGE, Published: California