Marketing concepts and applications

Marketing

The competing concepts under which organizations have conducted marketing activities include: the production concept, product concept, selling concept, marketing concept, and holistic marketing concept. Evaluate the advantages and disadvantages of each concept as defined and presented in your textbook. Which concept do you believe is the most effective? Why?

The production concept refers to the idea that consumers will prefer widely available, inexpensive products. Advantages of this concept are that it achieves high production efficiency, low costs, and mass distribution, as well as an expansion in the market. This method is not useful for companies whose products are high cost, or in areas of a low labor force. Additionally, if the product begins to lose quality, this method is not useful (Kotler, 2006).

The product concept refers to the idea that customers will prefer products that have the best quality, performance, or innovative features. Advantages include a streamlined production process and high demand for specialized, high quality goods. Disadvantages include a lack of sales methodology, such as packaging attractiveness (Kotler, 2006).

The selling concept refers to the idea that customers will not purchase enough of a product if not aggressively pursued for sales. Advantages of this concept are that it works well with uncommon goods, or new products on the market. Disadvantages include a difficulty in selling these products to consumers, and problems with high sales tactics (Kotler, 2006).

The marketing concept refers to the idea that achieving the goals of any organization depends on recognizing the needs and wants of target markets, and the ability to deliver satisfaction better than competitors. Advantages of this concept include a focus on the consumer, rather than on the sale, equaling a highly customizable concept (Kotler, 2006). Disadvantages include a loss of focus on mass production.

The holistic concept refers to customer relationship management, or the building and maintenance of profitable customer relationships through high value and satisfaction. This concept's advantages are an overall focus on customer satisfaction in both service and value, equaling a higher standard of company organization. Disadvantages include a higher overhead (Kotler, 2006).

While the holistic concept is a higher cost concept, the basis on which the idea is formulated makes this the best possible choice for marketing. By ensuring high quality, high value, highly satisfying products, nearly all markets can be target markets, equaling a larger customer base, and higher profitability. While portions of other methods make this concept functional, those concepts alone are not enough to target a wide audience, making the holistic approach more viable (Kotler, 2006).

Indicate the differences and similarities between the following terms: marketing plan, strategic marketing plan, and tactical marketing plan.

A marketing plan is the outline of specific actions a company intends to carry out to lure potential customers to a product or service, and the actions a company will take to persuade customers to purchase that product or service. There are two different processes involved in a marketing plan, those of the strategic and the tactical plans. Each process is vital to the successful marketing of a given product (Bell, 2006).

A strategic marketing plan is the content of a company's marketing message, while a tactical marketing plan is the execution of the marketing plan, or the generation of leads, implementation of advertisements, marketing materials, and the implementation of a follow up system. In other words, it is the medium in which the message is delivered. Both are vital to the marketing of a product, since both processes are developed to target a specific audience, or consumer group, and are designed to provide the highest possible exposure in the most appealing design (Bell, 2006).

Through strategic marketing, a company develops understanding of what is important to the consumer in relation to a product, and develops tactical marketing strategies that focus on these needs of the consumer. In doing so, the development of the proper strategic marketing plan assists companies in developing the proper advertisements, market research tactics, and follow up systems, or tactical plans to deliver the message (Bell, 2006).

Describe the differences between a core belief and a secondary belief. Are core beliefs for Americans similar to the rest of the world's population?

Core beliefs, from a company standpoint, are those fundamental beliefs that operate across all policy subsystems, and are broad in scope. These include such ideologies as left and right wing political views, attitudes pertaining to social equity, and procedure beliefs, such as a preference for top down or collaborative approaches to decision making. Conversely, secondary beliefs are narrower in scope, and generally deal with the seriousness and causes of specific issues, and perceived impacts for policy. Secondary beliefs are far more susceptible to change, since the narrow scope of these beliefs is more conducive to changes in belief (Lubell, 2004).

The core beliefs of American's are, in many areas, dissimilar to those of the rest of the world. The limitation of government, the sales marketing approach, top down economics, and a neoconservative approach to business separate American policy from many other nations, as does the focus on profitability (Lubell, 2004).

What is the chief advantage of using each of the following contact methods: mail questionnaire, telephone interview, and personal interview? Which of the three will produce the best results?

The chief advantage of using the mail questionnaire, or direct mailing method, is the low cost of the technique, as well as the ability to reach a vast market in a short time span. However, mail questionnaires typically produce very low response rates and can introduce bias, since one does not know the specifics of the person filling out the survey. Telephone interviews are more costly, but can reach large numbers of individuals at a fast rate. However, these interviews again introduce possible bias. The personal interview allows for a targeting of specific audiences, and avoids biases associated with not knowing who the respondent is, such as with other methods (Entrepreneur.com, 2006).

While results may vary by survey design, the best results are consistently obtained through the personal interview, but at a much higher cost. Since mail questionnaires generally produce low response rates of only five percent, and phone interviews produce only ten percent response rates, personal interviews are the better choice. Additionally, since the personal interview specifically targets individuals, one is able to control the survey population more effectively for studies requiring a specific population (Entrepreneur.com, 2006).

Describe four situations or cases when building a customer database would not be worthwhile for a company. Explain why.

Situation 1: If a company is very small, with a limited customer base. For these companies, the benefits of a customer database would not exceed the cost of creating and maintaining the database.

Situation 2: When a company is unable to provide adequate protection on the customer database server. If a company cannot guarantee the safety of consumer's private information, the company should not store such information, out of risk for identity fraud and other criminal activities associated with customer database hacking.

Situation 3: If a company does not have a high enough budget to cover the costs of a customer database. Customer database software and hardware is not inexpensive. Thus, for small, home-based businesses without a high budget, the costs of creating such a database may be unnecessary.

Situation 4: If a company has a limited staff. Creating and maintaining a customer database requires significant time. If a company's staff is already spread thin, and does not have the skills for such data entry, the creation of a customer database would be inefficient, since the likelihood of upkeep is small.

What is a reference group? Describe three different types of reference groups that can have an impact on a consumer's purchasing behavior and explain why.

A reference group can be thought of as a primary source of external information regarding purchasing for consumers. When one is unable to choose between purchasing options using internal information such as memory or pervious purchases, one requires outside information (Kerin, 2003). These groups include three references, those of personal sources, public sources, and marketer sources.

A personal source can include anyone known to the consumer, such as family or friend. Such a source can have a prime impact on purchasing behaviors, since personal sources are trusted by consumers. These sources are primary in a consumer's search for information, and are vital to a consumer's decisions. Public sources include product-reviewing sources, such as Consumer Reports and other organizations. These groups can be vital in decision making for consumers, particularly if the consumer is unable to gather information from personal sources. If these public sources denounce a particular product repeatedly, a consumer is less likely to purchase, since information from these sources is trusted, due to consumer knowledge of regulations over such groups. Finally, marketer sources of information include sales persons, websites, and advertisements. These pieces of information are generally less trusted, but can influence decisions if that information is highly appealing and presented in a way that promotes faith in a product or brand (Kerin, 2003).

Illustrate the differences between a straight rebuy, modified rebuy, and a new task purchase. Why is it important to understand the differences?

A straight rebuy is the purchase of standard parts, maintenance, or repair, and operating supplies, or any recurring need purchased on a routine basis (Kotler, 2006). For example, the routine purchase of printing paper is a straight rebuy. A modified rebuy is a situation in which purchasers have experience to draw on, and consider alternatives to previous purchasing (Kotler, 2006). For example, if a company recently purchased a new printer from vendor A, but was not satisfied, they may decide to purchase from vendor B. In the same situation next time. A new task purchase is a situation in which purchasing does not have previous experience with a requirement, and thus, has no relevant knowledge of product solutions (Kotler, 2006). For example, if a company requires the purchase of cellular phones, and has not purchased a wireless plan in the past, the company will have no previous knowledge to use in decision making.

Understanding these differences is vital, in that a company should always rely on previous experience, when possible, to purchase products and services. If a company is pleased with existing purchases, and uses a process of straight rebuy, there is less cost and time associated with researching alternatives or new solutions.

A new trend in marketing is toward customerization. Describe what customerization is and how marketers are using it. Why is it important?

Customerization is marketing from a customer's perspective. The concept revolves around an effort by company's to customize products specifically for consumers, such as jeans, coffee, newspapers, vitamins, cars, greeting cards, and other products (Wind, 2000). While some companies offer goods, and allow the customer to price negotiate, such as priceline.com, other companies establish custom websites for consumers, such as Dell's premier pages. These companies alter their perspective to be buyer-centered, allowing the consumer to dictate the market, and marketing strategies. Customers, through customerization, are active participants in product development, purchasing, and consumption (Wind, 2000).