The marketing process is the analysis of marketing opportunities, selecting target markets, developing the marketing mix, and managing the marketing effort. The marketing process will be planned and executed against the strategic guidelines set at a corporate level.
Planning at the corporate, business, or function level is an integral part of the marketing process and to fully understand the marketing process it is important to understand how the organization defines its business. The organization can apply a traditional physical or it can create value through its delivery process.
In order to create value, the marketing department needs to analyze markets, customers, and competitors in the micro and macro environments before any product even exists. The marketing staff must segment the market, select the appropriate target market, and develop the offer’s value positioning.
After selecting the target market, it is now ready to plan and develop the details of the marketing mix-whether a physical product or a service, the marketing mix would consist of 4ps respectively.
All steps of the marketing process
- Analyzing Marketing Opportunities
- Marketing segmentation and target marketing
- Developing a Marketing Mix
- Market Positioning
- Marketing strategies for Competitive Advantage
- Managing the Marketing Effort
- Marketing Control
1. Analyzing Marketing Opportunities (Marketing Process)
Every organization must think and find the opportunity available in the external environment that matches their strength at the very beginning of the marketing process. In fact, that is better identified with SWOT analysis, where organizations are doing a postmortem of their environment (both internal and external).
Opportunities are the positive factors in the external environment on which the organization doesn’t have any control but they are positively affecting the activities of the organization. For example, the Government has reduced the import duty on the raw materials that your organization is currently using in the production purpose as an example of an opportunity.
Your Supplier is supplying raw materials at a lower cost may act as an opportunity as that will reduce the production cost of the organization and can be used as a competitive weapon. People are shifting their choice and taste preferences towards a specific product/service in which you have expertise must add some value in your total sales volume should be considered as an opportunity.
Every organization must be an opportunity seeker and must try to find opportunities best suits with their strengths and capabilities. For example, continuous devaluation of the local Bangladeshi currency is an opportunity for those who are exporting their goods to the overseas market as that will help them fight against multinational companies?
In Bangladesh government’s education programs can be considered as an opportunity for private universities as they will get more students for the under graduation or graduation purpose. The expansion of mobile telecommunication companies is offering an opportunity for the universities of Bangladesh to introduce the “Electronics and Telecommunication” program in their product/service line.
The marketing planning process can be shown with the help of the following sequential diagram that relates the concepts of the process:
2. Marketing segmentation and target marketing
Market segmentation and target market selection is a very crucial task for the organizations in the sense that it will dictate the kind of product an organization must produce based on the demand of the customers of that segment or target market.
Segmentation means dividing the total market into a distinct group of buyers who have distinct need s and wants. A market segment is a group of consumers who respond in a similar way to a given set of marketing offers.
In segmentation, one thumb rule must be noted that customers within a specific segment have the same need or taste preferences but between the segments, their need and taste preferences are completely different. The organization has to choose segmentation variables like, geographic, demographic, psychographic, or behavioral.
The choice of a variable in fact depends on the characteristics of the products or services the organization is going to offer. For Example, an organization that is making dress materials must concentrate on demographic variables rather than geographic ones. Segments are actually the potential market the organization may serve.
After segmentation, the organization must evaluate the attractiveness of each segment based on many characteristics like profitability, future growth, presence of competitors, number of customers, government regulation, organizational own expertise, etc.
This process of evaluating each market segment’s attractiveness and selecting one or more segments to enter is called target marketing. For example, think apartment business. Assume apartment builders segmenting based on geographic locations like Dhaka, Chittagong, Khulna, Rajshahi, etc.
From the number of customers and profitability, Dhaka may be the advantageous one having Chittagong in the second place, but are you think about the number of competitors Chittagong maybe even better.
Many factors should be considered at the time of evaluating the market segments. The market segment which the organization is actually going to serve is called the target market.
It may not be possible for the organization to serve each segment due to the shortage of resources (capital, expertise, human capital, etc).
For that reason, the organization first start with profitable segments and then gradually expand their business to other segments.
Target market selection is important because that is the basis of preparing an offering for the customers belong to the specific segment the organization is going to serve.
Let’s have a complete example of how companies are selecting their target market from the segmentation procedure (These concepts will be elaborately explained later on).
Assume that an Air Conditioner Produce is going to select its target market. As this is a capital-intensive project, they must consider the total world as their initial market.
Or you can think that this organization may be a multinational as serving a specific country will not provide them a substantial revenue or profit to continue the business.
This company may select its target market in the following way: initially, I have mentioned that its total market is the world itself.
This company is using a geographic variable like area or world regions as their segmentation variable. So the total world can be divided into many segments like South-Asia, Africa, and America.
The Middle East and Scandinavian countries. Now it may not be possible for the company to serve all the markets mentioned here.
If you make an attractiveness analysis you will easily find that South-Asia is a densely populated high humidity country, but having less purchasing power of the people. In the case of Africa, very hot weather but a large number of people are living under the poverty line.
America may be a good market to start the business with high density and high purchasing power of the people.
Scandinavian courtiers necessarily do not need air conditioners so they can be easily excluded from the list. In the case of the middle-east necessary product.
Even the propensity to the consumption of these people is relatively very higher compared to other areas. From the above attractiveness analysis, it is visible that initially, this company can choose America and the Middle East to serve, are its target market.
That is how actually the companies are selecting their target market. Still, many other factors have to be considered, whether the markets are accessible or not, whether they can provide a substantial profit or not, whether they are measurable or not, whether they are actionable or not, etc. This target market selection is important in the sense that it will guide the organization in the next step in developing its marketing mix or offerings.
For example, the purchasing power or taste preferences of American people and Middle-East people are different. So even though this organization has selected America and Middle-East s its target market, it (the company) has to offer different categories, featured air conditioners in different areas.
Finally, it can be said that the offerings of the organization will be dictated by the target market selection process. Probably that is the significance of selecting the target market.
In many cases, the target market may be the whole initial market itself. That means the organization is serving all the segments in the economy.
For example, Tabani Beverage is offering and distributing Coca-Cola in each corner of Bangladesh.
3. Developing a Marketing Mix (Marketing Process)
After selecting the target market, the organization now should determine its offerings: the marketing mix. The marketing mix concept is regarded as a set of controllable variables at the disposal of marketing management that can be used to influence customers. In the case of a tangible offering, we have 4 Ps like the product, price, place, and promotion.
In combined these 4 P’s are called marketing mix too. 4p’s represent the seller’s view of the marketing mix variables available to influence buyers. From a buyer’s perspective, each marketing tool is designed to deliver customer benefits.
Like product corresponds with customer solution, the price may be the cost of the customer benefits. Like product corresponds with customer solution, the price may be the cost of the customer, place responds with convenience and promotion corresponds to communication.
Product is something offered by marketers to customers for exchange and that can satisfy the needs and wants of the targeted people. This is a physical product offered to the customer. Like, Unilever is offering “LUX” soap to the target customer which is tangible in nature thus one can see, touch, smell it.
Product as a marketing mix variable consists of the following variable-physical variety, quality, design, features, brand, name, packaging, service warranty and return, etc. But there may be an intangible offering by the organization is called service.
For instance, North-South University is providing educational services to the students. Products and services are different in many ways.
Unlike products, services are intangible and cannot be stored, transported, or resold, service must be produced with the joint effort of producer and consumer, but a product can be produced separately without the interaction of a consumer.
In goods manufacturing, on the other hand, repeatability and systematically controlled production are the key variables of success.
Price is the amount of money; goods or services that must be sacrificed to acquire ownership or use of a product. Price as a marketing mix variable consists of the following variables-list price, discounts, allowances, and payment period and credit terms.
Credit terms are important mainly in the case of business buying. A commonly used term is 2/10 N 30, which means if a business buyer can repay the whole money (cos of the products/services) within 10 days, they will be given a 2% discount.
Otherwise, the whole money should be paid within 30 days. In fact, this type of deal may encourage buyers to choose a specific supplier.
For example, if one organization is giving this facility whereas other companies do not, the buyer may go with to the company providing that credit facility. Pricing decisions should take into account profit margins and the probable pricing response of competitors.
Unilever is charging taka 14 for a 100 GM Lux soap is the price of Lux. One has to dear a cost of approximately taka 3 lacs to get an MBA degree from North-South University is the process of specific service.
Place (or placement) is the channel of distribution used to get products and services to the market. Place decisions are those associated with channels of distribution that serve as the means for getting the product to the target customer.
The distribution system performs transactional, logistical, and facilitating functions. Place as marketing mix variable consists of a channel, assortment, locations, inventory, and transport. For example, Unilever using different levels of channels like a wholesaler. Distributor and retailer send their products to the hand of ultimate consumers.
Promotion is the personal and impersonal means used to inform persuade and remind customers about products and services. In fact, giving awareness to the customer is the main objective of promotion.
Promotion decisions are those related to communication and selling to potential customers. Since these costs can be large in proportion to the product price, a break-even analysis should be performed when making promotion decisions.
It is useful to know the value of a customer in order to determine whether additional customers are worth the cost of acquiring them. Sales promotion, advertising, sales force, public relations, and direct marketing are the variables related to promotional decisions.
For example, Unilever is using TV advertising, billboard, newspaper ads, etc to promote its products with celebrities.
For example, “I am a start with the magical touch of LUX” is the advertisement message for LUX.
A summary table of the marketing mix for a product is shown below:
The services marketing function in an organization is much broader than the activities and outputs of the traditional marketing department, requiring close cooperation between marketers and those managers responsible for operations and human resources.
Therefore the traditional marketing mix has been expanded by the addition of three new marketing mix variables-people, processes, and physical evidence.
This expanded marketing mix consists of the following instruments-product, price, place, promotion, people, processes, and physical evidence.
Product as a marketing mix variable for services consists of the following variables-quality, brand name, service line, warranty, capabilities, facilitating goods, tangible clues, and the process of service delivery. The service product can be viewed as the technical outcomes of service and comprises the “what” of a service.
Since services differ in the degree of tangibility and are highly influenced by the process and people involved when delivering the service, it is difficult to standardize services. DHL Bangladesh providing different services that are not standardized according to the need of the customer.
Service pricing price is one of the inputs used to form an expectation of service before a customer makes a purchase decision. Price serves as a tangible cue that indicates what can be expected from a service provider.
North-South University is charging the maximum among all private universities in Bangladesh which necessarily signals that they are the best educational service providers in that industry.
When determining a price, the service organization should also view it from the viewpoint of the buyer. Pricing decisions made without concern for the customer will usually result in a decline in customer satisfaction, sales, and profits.
For example, the National Heart Foundation is charging lower than any other cardiac hospital in Bangladesh by considering the economic condition of the buyers. Place the distribution strategy for services that need to be efficient. Depending on the nature of the service and customer value, several distribution channels can be employed.
The nature of the distribution channel employed depends on the types of service organizations. For example, Sundarbans Courier Service has established more than 150 branches throughout Bangladesh to make the service available to the customer.
Many doctors are traveling from Dhaka to Chittagong to provide their service-changing the place of distribution at the convenience of buyers. The government has established a tax collection department in all the districts of Bangladesh to provide series to the citizens.
But think about the Bangladesh secretariat, even though necessary still it is not possible to establish many branches of secretariat throughout the country.
Place as a marketing mix variable for services consists of the following-location, accessibility, distribution, channels, and distribution coverage. BRAC Bank has introduced its ATM services to facilitate cash withdrawal services to its customers.
Promotion-the service organization communicates with its target groups with the aim to influence knowledge, attitude, and behavior. Thus the face-to-face interaction of especially from-line staff with customers plays a very important role in promoting the serving.
Marketers should actively support and enhance a good service by communicating the benefits of that service to its target audience with the help of various types of communication channels and media.
People-the organization’s contact personnel form an integral part of the process of service delivery. In the services industry, all the staff act as marketers of the organization’s offering because their actions have a direct effect on the outpour received by customers.
If the customers feel comfortable with the particular service provider and have trust and rapport with the service provider, it is a relationship that a competitor would find hard to break into.
People as a marketing mix variable consists of the following variable-training, discretion, commitment, incentives, appearance, interpersonal behavior, and attitudes.
HSBC in Bangladesh is providing its service with people that motivate its customer and even smoothing the delivery process.
The service process-the heart of the service is the experience by the customer of organization policies, systems, and procedures that takes place in real-time.
The marketer, therefore, has to plan the process of service delivery carefully, and plan what quality controls can be built in to ensure that customers are confident that about to expect each time they use the service product.
Instead of waiting in a long queue, no one can withdraw their money from the bank in a few seconds with ATM facilities.
Processes involve queuing mechanism, preventing customers from getting so impatient while waiting that they leave without buying, high professional quality, etc. Agora and other super shops are using bar code readers to make the bill counting process faster. DHL is giving goods tracking facilities to its customers showing operational excellence.
Example of the marketing mix: (Potato Chips)
This is a tangible good
- Made of potato, chili, shrimp, salt, etc
- The name is ‘X’ potato chips
- Four flavors: chili, shrimp, salty, vegetable
- Available in three sizes (100, 250, 500 gms)
- Available at four different colored tetra pack
- Round and ring-shaped crispy taste
- Price and ingredients are labeled in the pack
- Manufacturing and expiry date is labeled
The distribution policy for chips
- Own distribution/logistic support for divisional
- 4 level distribution channel
- Extensive distribution is followed
- Available in all retail outlets of Bangladesh
- For a trader, each offering includes 12 packs
- Can be sold singly to the end-user/buyer
- Supplied from a single warehouse (WH)
- Own transpiration to ship from the factory to WH
Value transaction process
- Cost-based and competition-based pricing
- Different prices for different size of packets
- Same price for the same size but different flavor
- 2/10 N 30 credit system for traders
- 5 taka discount for traders in buying a dozen
- Allowances are given per month for promoting the product to super shops
The awareness side-
- TV, radio, newspaper advisements
- Billboard in prime locations like in schools
- Quiz and art contest in schools
- Seminar on primary education as public relations
- Discount, sweepstakes, scratch card in each purchase
- Cartoon, gifts, toys for children
- The kid must be used as a model of advertisement.
Physical evidence-this marketing mix instrument is of particular relevance to dealers or those who maintain premises from which a service is sold or delivered. Physical evidence for dealers included some of the place-related elements.
Physical evidence is furthermore linked to the reputation of an organization, the physical state and appearance of office buildings, uniforms or personnel, furniture used in the office, the organization’s letterheads, and modern technology.
Think about the Sonargaon Hotel, its huge infrastructure shows its reputation and guarantee of better service. United International University has established a good campus at Dhanmondi which will attract more students. English Medium schools like Scholastic and Oxford have fascinating buildings for the kids to enroll in those schools.
4. Market Positioning
After preparing the marketing mix, the organization should offer and deliver the goods and services in such a way that the target people will become loyal to their products/services.
Whenever they will have a need that must be fulfilled by your products/services. Arranging the marketing mix in a way that occupies a clear, distinctive, and desirable place in the mind of consumers relative to the competitor’s offering is called market positioning.
For example, if you say an individual to name a soft drink, probably in Bangladesh he/she will say Coca-Cola. Name a lipstick? One may say, Jordana.
That behavior is actually called market positioning; Thinking of a luxurious car may be known with the name of Mercedes Benz.
5. Marketing Strategies for Competitive Advantage
Competitive advantage is something that gives an organization an edge over its competitors. It is an organization’s ability to perform in one or more ways that competitors will not or cannot match and is realized by the organization’s marketing strategy, the implementations of this strategy, and the context in which competition unfolds.
Grameen Phone has maximum coverage in Bangladesh is considered as their most important competitive advantage as it attracts more geographically scattered customers. FedEx has the package tracking technology that facilitates the people to track the present position and the status of their package is their competitive advantage.
The development and the sustainability of competitive advantage is an important objective on corporate, business, and functional levels in an organization. The target customers will be the core and center of the organization’s marketing strategy.
The organization should identify the total market and divide it into smaller segments and it should select segment(s) and focus on serving it/them.
The organization then engages in marketing analysis, planning, implementation, and control to find the best marketing mix and take action.
Competitive advantage can be achieved in many ways through core competencies, resources, strengths as identified by the SWOT analysis, positioning, and differentiating based on the marketing mix variables.
Marketing strategy deals with the relationship with the major public, offerings with the type of product or service sold timing when the product or service is sold, and resource allocations and management.
The competitive strategy that a company adopts depends on its industry position. A company having a maximum market share in the industry is called a market leader. Like in the soft drink industry, of course still Coca Cola is the market leader in Bangladesh.
They should go with aggressive strategies that will protect their current market share. The runner up firm in the industry occupying the second-largest share is called market challenger.
Like PEPSI is the market challenger in the soft drink industry of Bangladesh. Even RC Cola is on the list too. They must always undertake attacking strategies of beat leaders.
Even in some cases, they try to hit leaders by competing for new brands. The next category of the firms is doing business without rocking the boat of the industry share as they are happy with their current market position and share is called a market follower.
URO Cola may be the example of a market follower in Bangladesh. They seek a stable market share and profit.
Small firms that are not capable to compete with the leader, challenger, or follower follow market niche strategy. They always try to do business n a market where the leaders or challengers are not currently operating.
Those who are selling sugarcane juice are following a niche strategy. Niches avoid direct confrontations with the majors by specializing in the marketing mix for the specific target market.
Grameen Phone is the market leader in the mobile telecommunication industry of Bangladesh with having a good challenger name AKTEL and followers like CITY Cell and Bangla Link.
But Ranks Telecom is an example of a market niche as they are concentrating on a specific side of Bangladesh in the Sylhet division. In the world market if TOYOTA is the market leader, HONDA may be the challenger, NISSAN/HYUNDAI are the followers with having REFFARI as the market niche.
6. Managing the Marketing Effort (Marketing Process)
In this stage, the managers have to develop a plan that will be carried out in the target market. This stage includes analysis, planning, implementation, and control. This is one of the most important steps of the marketing process.
Here internal and external analysis includes a SWOT analysis to postmortem the organization and external analysis includes a macro-environmental analysis of where the organization is going to operate.
In the planning part, the managers have to develop a marketing plan. A marketing plan is actually about the activates of the organization that is going to develop a marketing plan. Side by side organizations must try to find their problems and alternative solutions also.
In a marketing plan, the organization must outline the strategies they are going to undertake to perform its activities also.
In a marketing plan, the organization must outline the strategies they are going to undertake to perform their activities. The budget for marketing activities must be included there. Another important part is the contingency plan that answers what if.
For some reason, if the actual plan fails, what else the organization can do is the main highlight of the contingency plan. A model of the marketing plan attached in the appendix of the chapter. In the next capsule, students can find the components of a marketing plan.
Format of Marketing Plan
1. Executive summary: It should be prepared after the completion of the whole report. In this section, the planner has to summarize the whole report.
2. Table of contents: Listing the topics and sub-topics of the report along with page number.
3. Introduction: A generalized introduction to the report.
4. Company/product profile: Here the planner has to incorporate the history of the company that is producing the product under consideration in brief. It may be explained by company name, locations, founders, product lines, capital investment, logo or slogan, company’s mission, vision, and objectives, etc.
5. Current marketing situation: Market description along with target market selection process, industry analysis, a review of the competitors, etc.
6. Production profile: In this part, you have talked about the product in detail. The following sub-topics may be discussed:
- Product’s mission,
- and goals
Products characteristics along with different levels
- brand name
- extra services, etc
- Product’s position in the market compared to other product of the company with BCG growth matrix analysis
- Target market selection process for the product.
- Product life cycle stage determination. Based on that fin the characteristics
- Development steps of the products. (Product planning and development)
- Consumer’s behavior or attitude towards the product with market share identification.
- SWOT analysis of the product.
7. Pricing strategy: a) The way the initial price was set by the company. b) Which pricing strategy they are following currently. c) Discuss price adjustment strategy.
8. Distribution of location strategy: What level of distribution channel is followed by the company? Do they export the product in the overseas market? Discuss the mark-up of the distributors etc.
9. Promotional tools: Briefly discuss the objective of their advertisement, media selection procedure, the message of the advertisement, media vehicle, and ads’ effect on sales.
10. Sales promotional tools: What types of sales promotion is executed by the company for the product under consideration? Talk about the sales pattern of the product. Do they have any public relations tools for the product?
11. Action programs: How the above-mentioned strategies will be implemented in the target market should be analyzed. Answering the basic questions like who, where, when, and how.
12. Problem identification: Based on the above analysis find out the problems of the product/company from all fronts.
13. Recommendation and suggestion: This is the most important part of the report. Students have to provide strategies for the previously identified problems.
14. Budget, timing, and control: details marketing supporting budget should be outlined with an analysis of profit and loss statement. The time of implementation should be clarified by pointing out the responsibilities of each manager.
15. Contingency plan: Additional plan that will answer what if. Managers need to plan what they will do in a certain situation if the actual plan fails.
Despite the various approaches, marketing managers support the organizational strategic plan by developing marketing plans, which includes detail about the marketing managers support the organization’s strategic plan by developing marketing plans, which includes detail about the marketing variables of segmentation, targeting, positioning, and budgeting.
The process by which the marketing plans and strategies turn into marketing action in order to accomplish objectives is called marketing implementation. It includes who, where, when, and how. The marketing plan is important in the strategic plan.
The following figure provides examples of how objectives in the marketing plan can support the organizational strategic plan.
7. Marketing Control (Marketing Process)
In the last step, the organization must think about correcting problems that exist with their current marketing plan. The process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure those objectives are achieved is called marketing control. Based on the magnitude of the problem, the control may be of two types:
Operating control involves checking ongoing performance against the annual plan and taking corrective action when necessary. It involves daily activities, the profitability of different products, territories, markets, and channels.
Strategic control on the other hand involves whether a company’s basic strategies are well-matched with its opportunities or strengths. Whether a company should go for strategic alliances to recover a certain situation or to get an opportunity is an example of strategic control.
You May Like Also:
- Core Concepts of Marketing
- What is the Definition of Marketing?
- Importance of Marketing
- What is Marketing Management?
- Marketing Challenges in the New “Connected” Century
- What is Marketing Environment?
- Company and Marketing Strategy
- Social Marketing: A Bangladesh Success Story according to Mary Ann Peters, Former US Ambassador to Bangladesh