Introduction to Marketing: Understanding Marketing Strategies
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This assignment explores the role of marketing in organizations, focusing on marketing techniques, limitations, marketing research, customer targeting, and developing a coherent marketing mix using examples of Marks and Spencer and Oxfam.
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Introduction to Marketing Page |1
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Introduction Marketing is considered as the key function of the business organization that covers severalactivities.Themarketingprocesshelpsthebusinessorganizationin transferring, exchanging and moving the products and services. This assignment will provide knowledge about the different aspects of marketing research, marketing planning and marketing mix. The assignment will provide an opportunity to analyse, evaluateanddevelopkeymarketingmethodsinordertogatherabetter understanding. Page |3
Task 1 LO1 Know the role of marketing in organisations P1 Describe how marketing techniques are used in the marketing of products in two organisations Marketing strategy is an action plan that is developed in order to promote the products and services of an organization. The strategies are different for private sector and public sector organization as the marketing strategies are also based on the business objectives (Baker, 2014). In order to explain the difference, Marks and Spencer has been selected as the private sector and Oxfam is selected as the public sector organization. Marketing TechniqueMarks and SpencerOxfam GrowthStrategies-When organizationfocuson expandingitsbusinessit developsdifferent strategieswhichhelps themtowinthemarket share. The strategies might includeproduct development,market development,market penetrationand diversification. M&Sisaleadingretail organizationofUKwhich operates at a global level. In order to expand its business and achieve its growth and developmentobjective,the organizationadoptsmarket developmentandproduct developmentstrategy.M&S promotes its existing product andservicestonew customersforgainingtheir attentionanddeveloping theirmarket.Forproduct development,M&S marketingisdoneamongst the existingcustomers who are informed about the new productsandservices. Thesetwostrategieshave helpedtheorganizationto expandataninternational Oxfamisacharitable organizationthatwas established in the year 1942 which aims at developing the societyandlivesofthe people.Asthemissionof Oxfamistoworkwith maximum number of people and meet the societal needs of different countries, it uses themarketpenetration strategyforitsgrowth (Oxfam, 2018). This strategy helpsthemto increasethe number of people involved in the organization and promote the work for a cause across the globe. Currently, Oxfam’s strategicplanfocuseson dealing with poverty issues, womenempowerment, globalconfederationand Page |4
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level.bringing change in the less developed region. In future, the organization might focus on the issue of child labour, domesticviolence, discrimination,etc.,to achieve its mission. Branding-Thebrand strategiesarelong-term plans which are developed for developing building the brandequityandachieve specific business goals. M&Sisgloballyrecognized brand which has high brand value. In order to market its brandedproductsand services, it uses the product techniquesofproduct extensionandproduct development,pricing techniqueofeconomy pricing,usesdifferent channelsofdistributionfor distributiontechniquesand variouspromotional techniques. Oxfamisavoluntary organization that focuses on reaching people and spread awarenessaboutthe ongoingproblemsofthe society of different countries. It uses the product technique of product innovation, pricing technique of economy pricing andpromotionaltechnique thatinvolvesadvertising, directmarketingand personal selling. Table 1: Comparison of Private and Public Sector Organization’s Marketing Techniques (Source: Created by the author) P2 Describe the limitations and constraints of marketing Marks and Spencer is a leading retail business organization that currently operates across the globe and currently has around 1025 stores in the UK and 454 stores in other countries (Marksandspencer.com, 2018). In case of any business activities, the business organizations face certain limitation and constraints for which the flow of their operational procedures and business activities slow down. The limitations and constraints are related to those factors that can restrict the business organization to achieve its full potential. Given below are the different types of limitations and constraints that are faced by the Marks and Spencer- Page |5
Legal Constraints Sales of Good Act, 1979-The Parliament of the UK passed this act to regulate the commercial law and contract law in relation to the goods being bought and sold. This act protects the right of consumers as well by ensuring that the goods being offered is as per the description and has satisfactory quality (Bridge, 2012). This legal framework has several rights which offer the consumers different remedies like replacement, refund and repair. In case of Marks and Spencer, the organization faces limitation as it exceeds its statutory obligation because of its return policy and creates high customer expectations. Trade Description Act, 1968-This act has been passed by the UK government in order to prevent the retailers, manufacturers or the service providers of different industry from misleading the consumers. This act allows the judiciary to punish the responsible party who try to claim about the goods and services they sell in a wrong manner. For example, M&S was fined for£10,000 as they misled the customers about their Italian clothing range. The company admitted that most of their ‘Italian’ products of menswear were manufactured in India, Lithuania and Egypt instead of Italy. Voluntary Constraints Code of Advertising Practice The Advertising Standard Authority (ASA) is the advertising regulatory body of United Kingdom. ASA maintains and promotes the code of practices related to direct marketing, sales marketing and advertising activities of the business organizations. It is essential for global business organizations such as M&S to carry out its marketing activateswithinthislegalframework,protectthecustomersfromwrongand misleading claims and create fair operating environment for the advertisers (Council, 2010). For example, M&S faced the issue regarding the poster advertisement of its lingerie collection of buses. Marks and Spencer faced issues, as there were nine complainants who found these posters to be objectified women and overtly sexual. Eight complainants stated that these posters were inappropriate for children and one stated that it is unsuitable for displaying on the buses. Such issues created chaos, but the organization was able to justify to the ASA about their advertising campaign Page |6
and ASA did not upheld the complaints (Practice, 2018). However, such issues can create major issues for the organization's brand equity and operational activities. Pressure Groups and Consumerism These groups are those organizations, which influence business activity, policies and legislationsforsecuringtheinterestofthesupportersandmembersofthe organization. These kind of groups generally campaign for bringing changes in certain policies and influencing the public opinion. Similarly, the business operations of M&S can also face issues from such groups if they choose to run campaigns, march against the company or issues legal notices against the company. In the year 2001, M&S decided to ban Indian leather goods as it faced campaigns from PETA (People for the Ethical Treatment of Animals), which is a pressure group for animal rights. Many organizations and celebrities joined the campaign in order to raise their voice against animal slaughtering case (Businessrespect.net., 2018). In order to deal with this issue, M&S decided to boycott and ban Indian leather. Hence, these kinds of cases can cause major issues to the reputation and corporate strategy of the organization. Acceptable Language Language has a strong effect on people and their overall behaviour. In case of advertising and marketing, the choice of language, content, tone and media used for communicating the information to the public or target audience is essential. In order to avoid any issues about language matters, the business organization like M&S shouldfocusonhowtheycanusesimplelanguage.Theyshouldavoid discriminatory statements or offending words so that the sentiment of the audiences is not hurt. LO2 Be able to use marketing research and marketing planning P3Describehowaselectedorganisationusesmarketingresearchto contribute to the development of its marketing plans The business organizations use different market research tool in order to develop theirmarketingstrategiesandimplementtheminaneffectivemanner. Understanding the different tools and methods of market research and using it Page |7
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effectively can provide the business organizations an idea about how they can use different market research information in order to reach their targets and improve their performance. Marks and Spencer uses different market research tools in order to enhance its business operations and make improvements. The organization has been able to increase its customer base with the help of proper product promotion and market research. There are mainly two types of market research methods, which contribute towards development of the marketing activities. Given below are the two different types of market research- Primary and Secondary Market Research Primary Market Research-In order to conduct the primary market research, M&S gather information through questionnaires, personal interviews and surveys. With the help of the primary research, the organization is able to gather information from its key stakeholders about how it should improve its current products and services (Sarstedt and Mooi, 2014). Secondary Market Research-An organization like M&S has several competitors as it operates in the retail sector. In order to develop strategies and sustain in the competitive market, M&S refers to the old surveys, business reports, questionnaires that have been published before by other companies (McQuarrie, 2015). It also evaluates it previous performance in order to understand the difference in the customer trends. Such information has helped M&S to apply the strategy of product expansion and development. Qualitative and Quantitative Market Research Both the research method is utilised by Marks and Spencer in order to understand about the current market situation and about the customer information. The surveys, questionnaires and interviews with technical and statistical question and answer sessions provide the organization the opportunity to conduct quantitative market research. On the other hand, the qualitative market research is conducted through focus groups, observations, interviews with open-ended questions and the observing experience of the stakeholders (Creswell and Poth, 2017). These information help M&S to improve the qualitative aspect of the products and services and quantify its product portfolio and sales. Page |8
Both the methods are used by Marks and Spencer in order to gain an insight about the market and the industry. Apart from gathering information related to customers, products and competitors, M&S is also able to find out about the public spending and changes in the tax rates that can affect the customers. This prudent approach helps the business organization to emerge successfully by developing effective strategies and bringing necessary changes in the operational functions of the organization. However,theorganizationfacescertainissueswhileconductingitsmarketing activities.GivenbelowarethelimitationsfacedbyM&Sfacedduringmarket research and developing the marketing plan- Data Protection Act, 1998-This act has been introduced by the government in order to protect the personal information of the consumers from being misused. M&S is obliged to abide by the rules and regulations of this act and the eight principles that have been stated in the act. M&S is a registered information user under this act and it promises to protect the data of its customers from third parties or any other companies for marketing or other business purposes. However, there have been cases where the organization has failed to comply with this act. In the year 2008, M&S broke the rules of this act as it failed to protect the personal details of around 26,000employees(Telegraph.co.uk.,2018).Thedatawasunencryptedand unsecure because of which the details about the pension arrangements of M&S employees was stolen in a burglary. Such an incident created a wrong impression on the customers and they believed that the organization is unable to protect the data effectively. Hence, it is necessary to ensure that M&S is able to follow this act. Cost Effectiveness-The primary market research methods are generally expensive methods and time consuming. Scheduling appointments with the customers, market researchers, industry leaders and other such potential audience who are willing to respond and get interviewed. Sometimes, the online surveys and interviews can be costly for the organization. On the other hand, for the secondary market research, the organization has to rely on the already established data and access it through payinglump sum amount. Thecost effectiveness canonly be achievedif the organization is able to achieve its target. Validation of the data-In case of surveys, the type of feedback received from the respondents can be arbitrary and inaccurate. This creates difficulty for M&S to Page |9
evaluate the response and analyse the required parameters. Further, the evaluation made by the executives of M&S can be biased at times (Bankes, 2010). Hence, such issues can create trouble for the organization to carry out the marketing activities and plan. In order to develop the market research method usage and developing the marketing plan of the M&S, the organization can consider the following recommendations- ï‚·M&S should focus on how it can gather data from authentic sources and abide by the Data Protection Act. ï‚·Be unbiased during the data collection and analysis in order to draw proper conclusion ï‚·Select the appropriate research method as per the requirements in order save time and cost P4 Use marketing research for marketing planning In order to carry out the marketing plan successfully, it is essential for M&S to use theappropriatemethodsandmarketingresearchtechniques.Themarketing planning requires several steps and techniques that can be used by M&S. In order to develop the marketing plan and gather relevant information, SWOT analysis tool can be used. This tool would help M&S to analyse the strengths and weaknesses and find out the opportunities and threats and develop the marketing plan accordingly. STRENGTHSWEAKNESSES ï‚·HighBrandValueandCustomer Base ï‚·Diversifiedproductrangeofhigh quality ï‚·Global Presence and easy access to the products ï‚·Lackintheinnovationlevelofthe product design ï‚·Highproductioncostduetothe traditionalbusinessoperation techniques ï‚·Products are no longer appealing to the young age group and does not match with the current market trend OPPORTUNITIESTHREATS ï‚·Opportunitytoventureintoother marketsandexpandthefood ï‚·High level of competition from H&M, Page |10
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productsrangetoattractmore customers ï‚·Markettheproductsinabetter mannertoattractcustomersfrom other demographics ï‚·Expand in terms of target market New Look, Topshop, Mango, etc ï‚·Continuouschangesinthefashion trend and consumer behaviour ï‚·Rapidchangesinthegovernment policies for the retail industry Table 2: SWOT analysis of M&S (Source: Created by the author) In order to gain information about the strengths, the primary market research was used where the customers and employees were surveyed. The information about the weaknesses was gathered with the help of a mixed approach, where the both primary and secondary market research methods were used. In order to gain insight about the threats and opportunities, secondary market research technique was used. Hence, the above information can help Marks and Spencer to develop its marketing plan accordingly. LO3 Understand how and why customer groups are targeted P5Explainhowandwhygroupsofcustomersaretargetedforselected products Customer segmentation is related dividing the customers on the basis of common characteristics. There are different basis on which the customers are divided into different groups. The segmentation helps in serving the needs and wants of the customers in a better manner. It is important for the global business organizations like M&S to segment their customers in order to offer the right products and services to them at the right time, place and in the right manner (Tsiptsis and Chorianopoulos, 2011). M&S deals with mainly clothing, food and homeware products. The clothing products are designed for men, women and children. The food segment of M&S offers luxury food products and the homeware products have a unique collection. The following table reflects the segmentation of the customers forB2C(Business-to- Customer)- Product TypeType of CustomersMarketReasonfor Page |11
SegmentationSegmentation Method Chosen Clothing ProductsMaleandfemale customersof differentagegroup and children Demographic Segmentation Theclothing productsare consumedby customersfrom differentagegroup andgendergroup. M&S has to focus on designingtheir clothingproducts accordingtothis segmentationin ordertofulfilthe needsofdifferent customers. Homeware Products Customers with high standard of living and lifestyle Behavioural Segmentation Thehomeware products of M&S are pricedatahigher levelbecauseof which it is better for thecompanyto targetonlythose companieswhoare willingtopurchase high-pricedproducts fromthehomeware collection of M&S. Food ProductsBasedonthetaste and preference of the customersfrom differentregion, population,food culture and habits Geographic Segmentation Thefoodcultureof everycountryand regiondiffers.As M&Sdealsmostly withluxuryfood products,itcan segmentits customers as per the Page |12
mentionedgroup. This would help M&S totargetthe customersinan effective manner. Table 3: Customer Segmentation for B2C (Source: Created by the author) The following table reflects the segmentation of the customers forB2B(Business-to- Business)- Products/ ServicesType of CustomersMarket Segmentation Reasonfor Segmentation Method Chosen Lightingand Furniture OfficesBehavioural Segmentation M&Shasfurniture productsforoffices. Theshelves, bookcases,desks, chairsandstorage equipment for offices canbeofferedto differentoffices across the operating regionofthe organization. M&SBanking Servicesfor Business Loan and Insurance SmallBusiness Organizations Thenatureof businessandtheir incomegenerating capacity Thesmallbusiness organizationscan also be offered with businessloanifthe companyisableto introducesuch productsand services, they will be able to excel in the banking industry. M&SBankingPeoplewithhighTypeofCustomersAstheBanking Page |13
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Servicesof Travellers travelling frequencyandtheirliving standard services of M&S are emerging,the organizationcan targetcustomers who travel frequently toofferthem servicesoftravel moneyand insurance. Table 4: Customer Segmentation for B2B (Source: Created by the author) LO4 Be able to develop a coherent marketing mix. P6 Develop a coherent marketing mix for a new product or service M&S offers wide range of homeware products and services and it has been able to create good demand for this line of products. The marketing mix will be created for the furniture product range of Marks and Spencer. The four elements of marketing mix willbeconsidered in order tohave aclear understanding about how the company can promote this product. Product-The main reason behind selecting this line of product is that the number of small businesses in United Kingdom is increasing rapidly, which is also giving rise to the number of offices. This ultimately creates a demand for office furniture and accessories. The M&S office furniture collection would range from desks, chairs, storage, shelves and bureaus. The office accessories would also be marketed in order to fulfil the requirements of decoration for the business owners. Price-The pricing strategy used for the office furniture products of M&S would be economy pricing. The pricing strategy for this product line would be set at low-mid range so that it can be purchased by maximum number of business owners and corporate (Lovelock, 2011). Economy pricing is an effective strategy when a product or service of a particular brand or organization has been newly developed and will be marketed soon. Page |14
Promotion-The promotion of these products and services would be done through advertisements.Themainmediumswouldbetelevisionadvertisementsand billboards. This will attract the regular office goers and business owners. The existing customers who run their businesses would also be sent newsletters and offers for their furniture products and services. Place-M&SisaBritishMultinationalCorporationandhasbeenrunningits operations successfully since 1884. As it has entered a new product line, in order to achieve long-term goal, it is essential for the business organization to focus on targeting the UK based customers. The brand value can help M&S to build a good customer base and attract more customers in future (Kelleret al., 2011). The promotions would be first done in United Kingdom in order to understand the taste and preferences and the demand for M&S furniture products and services. In this particular coherent marketing mix, the most important element is the place. There are many furniture companies in the UK which offer affordable office product range. In case M&S fails to attract customers in the UK for its office furniture and accessories range, it would face difficulty to continue this particular product line. However, in such a case, M&S can focus other regions in order to develop the scope of sales element of this product line. On the other hand, if M&S successfully reaches the desired number of customers in the UK, it can continue to promote this product line and expand it in future. Page |15
Conclusion Inthis assignment,thefocus has beenlaiddownonthedifferentaspectsof marketing. The assignment provides an understanding about the different marketing function’s roles by emphasizing on the marketing research. The example of Marks and Spencer as a private organization and Oxfam as the voluntary organization has been considered to explain about the difference in marketing strategies of both the organization. The contribution of these aspects towards the development of business organization’smarketingmixandmarketingplanningdevelopedfortargeting different group of customers has been highlighted. This assignment would help the learner to develop better understanding about the concept of marketing. Page |16
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Sarstedt, M. and Mooi, E., 2014. A concise guide to market research.The Process, Data, and. Telegraph.co.uk.(2018).M&S'dataprotectionbreach'.[online]Availableat: http://www.telegraph.co.uk/news/uknews/1576604/MandS-data-protection- breach.html [Accessed 25 Jan. 2018]. Tsiptsis, K.K. and Chorianopoulos, A., 2011.Data mining techniques in CRM: inside Page |18