General Concepts
There are 5 different
concepts of marketing, each of which vary in the function that they deal with.
For example – production concept deals with production and selling concept
deals with selling. Each of the concept was developed as per the need of the
market. As the market changed, so did the concepts of marketing. And today, we
have an opportunity to look at all 5 concepts of marketing and what they
represent.
- Production concept
- Product concept
- Selling concept
- Marketing concept
- Societal marketing concept
The article lists out
the concepts of marketing in a very brief manner. You can click on each link to
know more about each individual concept of marketing.
Production
Concept – Consumers prefer products that are widely available and inexpensive.
The production concept is more operations oriented than any other concept.
Click here to read more about the Production Concept
Product
Concept – Consumers favor products that offer the most quality, performance, or
innovative features. The product concept believes in the consumer and it says
the consumers are more likely to be loyal if they have more options of products
or they get more benefits from the product of the company.
Marketing
Concept – Focuses on needs/wants of target markets & delivering value
better than competitors. The marketing concept believes in the pull strategy
and says that you need to make your brand so strong that customers themselves
prefer your brand over every other competitor. This can be achieved through
marketing. Click here to read more about the Marketing Concept
Societal
Marketing concept – Focuses on needs / wants of target markets &
delivering value better than competitors that preserves the consumer’s and
society’s well-being. Click here to read about the Societal Marketing concept
Marketing Mix, a term coined by Neil Borden, are the
ingredients that combine to capture and promote a brand or product’s unique
selling points, those that differentiate it from it’s competitors. The ideas
behind Borden’s model were refined over the years until E. Jerome McCarthy
reduced them to 4 elements called “The Four Ps.” This proposed classification
has been used by marketing companies, branding agencies and web design
companies throughout the world.
The Four Ps Model
• Product –The first of the Four Ps of
marketing is product. A product can be either a tangible good or an intangible
service that fulfills a need or want of consumers. Whether you sell custom
pallets and wood products or provide luxury accommodations, it’s imperative
that you have a clear grasp of exactly what your product is and what makes it
unique before you can successfully market it.
• Price –Once a concrete understanding of the
product offering is established we can start making some pricing decisions.
Price determinations will impact profit margins, supply, demand and marketing
strategy. Similar (in concept) products and brands may need to be positioned
differently based on varying price points, while price elasticity considerations
may influence our next two Ps.
• Promotion –We’ve got a product and a price
now it’s time to promote it. Promotion looks at the many ways marketing
agencies disseminate relevant product information to consumers and
differentiate a particular product or service. Promotion includes elements
like: advertising, public relations, social media marketing, email marketing,
search engine marketing, video marketing and more. Each touch point must be
supported by a well positioned brand to truly maximize return on investment.
• Place –Often you will hear marketers saying
that marketing is about putting the right product, at the right price, at the
right place, at the right time. It’s critical then, to evaluate what the ideal
locations are to convert potential clients into actual clients. Today, even in
situations where the actual transaction doesn’t happen on the web, the initial
place potential clients are engaged and converted is online.
Consumer Behavior
Is the study of
individuals, groups, or organizations and the processes they use to select,
secure, use, and dispose of products, services, experiences, or ideas to
satisfy their needs and wants. It is also concerned with the social and
economic impacts that purchasing and consumption behavior has on both the
individual consumer and on broader society. Consumer behavior blends elements
from-psychology,sociology,social anthropology, marketing and economics,
especially behavioral economics. It examines how emotions, attitudes and
preferences affect buying behavior. Characteristics of individual consumers
such as demographics,personality lifestyles and behavioral variables such as
usage rates, usage occasion, loyalty, brand advocacy, willingness to provide
referrals, in an attempt to understand people's wants and consumption are all
investigated in formal studies of consumer behavior. The study of consumer
behavior also investigates the influences, on the consumer, from groups such as
family, friends, sports, reference groups, and society in general.
The study of consumer
behavior is concerned with all aspects of purchasing behavior - from
pre-purchase activities through to post-purchase consumption and evaluation
activities. It is also concerned with all persons involved, either directly or
indirectly, in purchasing decisions and consumption activities including
brand-influencers and opinion leaders. Research has shown that consumer
behavior is difficult to predict, even for experts in the field.However, new
research methods such as ethnography and consumer neuroscience are shedding new
light on how consumers make decisions.
Customer relationship
management(CRM) databases have become an asset for the analysis of customer
behavior. The voluminous data produced by these databases enables detailed
examination of behavioral factors that contribute to customer re-purchase
intentions, consumer retention, loyalty and other behavioral intentions such as
the willingness to provide positive referrals, become brand advocates or engage
in customer citizenship activities. Databases also assist in market
segmentation, especially behavioral segmentation such as developing loyalty
segments, which can be used to develop tightly targeted, customized marketing
strategies on a one-to-one basis.
Understanding
purchasing and consumption behaviour is a key challenge for marketers. Consumer
behaviour, in its broadest sense, is concerned with understanding both how
purchase decisions are made and how products or services are consumed or
experienced.
Some purchase
decisions involve long, detailed processes that include extensive information
search to select between competing alternatives. Other purchase decisions, such
as impulse buys, are made almost instantaneously with little or no investment
of time or effort in information search.
Some purchase
decisions are made by groups (such as families, households or businesses) while
others are made by individuals. When a purchase decision is made by a small
group, such as a household, different members of the group may become involved
at different stages of the decision process and may perform different roles.
For example, one person may suggest the purchase category, another may search
for product-related information while yet another may physically go to the
store, buy the product and transport it home. It is customary to think about
the types of decision roles; such as:
The Initiator: the person who
proposes a brand (or product) for consideration (something in return);
The Influencer: someone who
recommends a given brand;
The Decider: the person who makes
the ultimate purchase decision;
The Purchaser: the one who orders
or physically buys it;
The User: the person who uses
or consumes the product.
Product Life Cycle Stages
As consumers, we buy millions
of products every year. Moreover, just like us, these products have a life
cycle. Older, long-established products eventually become less popular, while
in contrast, the demand for new, more modern goods usually increases quite
rapidly after they are launched.
Because most companies
understand the different product life cycle stages, and that the products they
sell all have a limited lifespan, the majority of them will invest heavily in
new product development in order to make sure that their businesses continue to
grow.
Product Life Cycle
Stages Explained
The product life cycle
has 4 very clearly defined stages, each with its own characteristics that mean
different things for business that are trying to manage the life cycle of their
particular products.
Introduction Stage –
This stage of the cycle could be the most expensive for a company launching a
new product. The size of the market for the product is small, which means sales
are low, although they will be increasing. On the other hand, the cost of
things like research and development, consumer testing, and the marketing
needed to launch the product can be very high, especially if it’s a competitive
sector.
Growth Stage – The
growth stage is typically characterized by a strong growth in sales and
profits, and because the company can start to benefit from economies of scale
in production, the profit margins, as well as the overall amount of profit,
will increase. This makes it possible for businesses to invest more money in
the promotional activity to maximize the potential of this growth stage.
Maturity Stage –
During the maturity stage, the product is established and the aim for the
manufacturer is now to maintain the market share they have built up. This is
probably the most competitive time for most products and businesses need to
invest wisely in any marketing they undertake. They also need to consider any
product modifications or improvements to the production process which might
give them a competitive advantage.
Decline Stage –
Eventually, the market for a product will start to shrink, and this is what’s
known as the decline stage. This shrinkage could be due to the market becoming
saturated (i.e. all the customers who will buy the product have already
purchased it), or because the consumers are switching to a different type of
product. While this decline may be inevitable, it may still be possible for
companies to make some profit by switching to less-expensive production methods
and cheaper markets.
Marketing Segmentation
Market segmentation is
the basis for a differentiated market analysis. Differentiation is important.
One main reason is the saturation of consumption, which exists due to the
increasing competition in offered products. Consumers ask for more individual
products and services and are better informed about the range of products than
before. As a consequence, market segmentation is necessary. Segmentation
includes a lot of market research, since a lot of market knowledge is required
to segment the market. Market research about market structures and processes
must be done to define the “relevant market”. The relevant market is an
integral part of the whole market, on which the company focuses its activities.
To identify and classify the relevant market, a market classification or
segmentation has to be done.
Market segmentation is
an important way to find competitive advantage with its differentiation in market
analysis. Market segmentation concentrates on market energy and power to gain
competitive advantage. In other words, market segmentation is the concept tool
to get the force (Thomas, 2007). In market analysis, market knowledge is
required to analyze market structure and process. Since segmentation requires a
lot of market research, various information can be extracted from it. Market
segmentation can identify customer needs and wants and develop products to
their satisfaction. Market segmentation can identify different products for
different groups, better match customer wants and product benefits, maximize
the use of available resources and focus marketing expenditures and competitive
advantages.
Competitor Analysis
Competitor analysis in
marketing and strategic management is an assessment of the strengths and
weaknesses of current and potential competitors. This analysis provides both an
offensive and defensive strategic context to identify opportunities and threats.
Profiling combines all of the relevant sources of competitor analysis into one
framework in the support of efficient and effective strategy formulation,
implementation, monitoring and adjustment.
Competitor analysis is
an essential component of corporate strategy. It is argued that most firms do
not conduct this type of analysis systematically enough. Instead, many
enterprises operate on what is called "informal impressions, conjectures,
and intuition gained through the tidbits of information about competitors every
manager continually receives." As a result, traditional environmental
scanning places many firms at risk of dangerous competitive blind spots due to
a lack of robust competitor analysis.
Marketing Planning Process
A marketing plan may
be part of an overall business plan. Solid marketing strategy is the foundation
of a well-written marketing plan. While a marketing plan contains a list of
actions, a marketing plan without a sound strategic foundation is of little use
to a business.
Trademarketing
Trade marketing is a
discipline of marketing that relates to increasing the demand at wholesaler,
retailer, or distributor level rather than at the consumer level. However,
there is a need to continue with Brand Management strategies to sustain the
need at the consumer end. A shopper, who may be the consumer him/herself, is
the one who identifies and purchases a product from a retailer. To ensure that
a retailer promotes a company's product against competitors', that company must
market its product to the retailers as well. Trade marketing might also include
offering various tangible/intangible benefits to retailers. The alignment of
sales and marketing discipline to profitability can be another explanation for
trade marketing.
Trade marketing is the
basic idea of marketing your products through the value chain and at the point
of sale i.e. the store. Consider it the idea of creating a demand for your
products across the channel and before it reaches the consumer. This
traditionally exists in a brick and mortar environment and can be argued to be
one of the oldest forms of marketing.
KPI TRADE MARKETING
• active customer base - distribution,
sales outlets which buy products of company
• middle order from a sales outlet
• share Trade shelf
• fullness on Trade shelf
• regular presence of must stock
• right representation planograms
• accommodation POS
• additional space for products of
company
• lack of OOS
• low level of commodity rests
• knowledge about product in sales
outlets
Neuromarketing
Neuromarketing is a
field that applies the principles of neuroscience to marketing research,
studying consumers' sensorimotor, cognitive, and affective response to
marketing stimuli. Researchers use technologies such as functional magnetic
resonance imaging (fMRI) to measure changes in activity in parts of the brain,
electroencephalography (EEG) and Steady state topography (SST) to measure activity
in specific regional spectra of the brain response; sensors to measure changes
in one's physiological state, also known as bio metrics, including heart rate,
respiratory rate, and galvanic skin response; facial coding to categorize the
physical expression of emotion; or eye tracking to identify focal attention -
all in order to learn why consumers make the decisions they do, and which brain
areas are responsible. Certain companies, particularly those with large-scale
ambitions to predict consumer behavior, have invested in their own
laboratories, science personnel or partnerships with academia. Serving nearly
1,700 members in more than 90 countries, the Neuromarketing Science &
Business Association, today centralizes academic publications and certifications
and serves as a networking platform for professionals in the field.
Learn more about Selling Concept.
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