Marketing Management Concepts Essays

EXECTUTIVE SUMMARY

In this assignment there is a discussion of strategic marketing management that how it plays an important role. Strategic marketing tools are essential to play game; there are different strategies and techniques of marketing. There is a best fit relation between corporate strategy and marketing strategy. There is a discussion of different analysis model for the positioning and growth. Nestle has been used an example of strategic marketing management because of its standard and leadership in food industry.

1. INTRODUCTION:

Marketing is a game and there are strategic tools which are needed for playing the game between buyers and sellers where they exchange values for the satisfaction which results in profitability.

2.1 STRATEGIC MARKETING IN AN ORGANIZATION:

There are four traditional strategic P’s (product, price, place and promotion) and three extensions strategic P’s (people, process and physical evidence). In strategic marketing the traditional P’s are used for Goods and extensions are Service P’s. To manage these P’s marketers use four strategic C’s (customer solution, customer cost, convenience and communication). Strategic marketing is a holistic marketing concept where four P’s and four C’s are integrated. It focuses on customer, core competencies and collaborative network. Strategic marketing is a long term and pre-nurtured plan for contingency process (Kotler & Keller, 2006).

For example, NESTLE believes in long term marketing planning and it heavily emphasize on four P’s. In Product, they are offering it as a safe and healthy product which is known for its quality. In Price, it has a single price and it follows non price competition strategy. In Place, timely supply is important and it delivers its products on time. In promotion, it uses various sources like magazines, billboards, newspapers, radio and TV to ensure that every consumer has an image of Nestle in his mind (Etzel, Walker & Stanton, 2000).

2.2 STRATEGIC MARKETING PROCESS:

For the development of marketing strategies and plan, an organization goes through the following process;

a. VMV: First, an organization defines its V-values, M-mission and V-vision (Kotler & Keller, 2009). Nestle values are to create long term values for its customers and shareholders means creating a shared value. Nestle mission is to become a leader in food industry by continuous innovative discoveries which promotes better health. Nestle vision is to serve its customers with nutritious and tasty food which fulfill their needs and are according to their preferences (Nestle, 2010)
b. GOALS AND OBJECTIVES: Secondly, an organization defines its goals and objectives clearly. Nestle goals are to rule the market as a food leader, to make people more demanding for its products which will create a competitive advantage and profitability and also it want to make its remark in financial performance (Nestle, 2010)
c. EXTERNAL ANALYSIS: Now organization carries out PEST (political, economical, social and technological) and EL (ecological and legal), it is an industrial analysis. These are known as externalities. These are for defining the organization (Kotler & Keller, 20069)
d. INTERNAL ANALYSIS: Internal analysis is carried out by SWOT (strength, weakness, opportunity and threat) analysis. Its basic rule is to convert T into O and then into S and in same way convert W into O and then into S (Peter, & Donnelly, 2007).

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Nestle strengths are its diversified portfolio, strong brand equity, great market share and high quality. Its weaknesses are fragile distribution channels and communication. Its opportunities are to more diversify its product line, converting weaknesses into strengths and more enhanced promotional strategies. Its threats are its competitors and uncertainty (Robbins & Coulter, 2001).

e. TOOLS: Organization makes strategies for seven P’s
f. STRATEGIC ANALYSIS: Nestle uses different strategies for improving the quality of its products. It uses BCG matrix, SMART analysis, porter model etc for strategic analysis of its position in market (Webster,2009)
g. MEDIA PLAN: Now an organization promotes its products through media. Segmentation Targeting and Positioning plays an important role. Media plan must be according to AIDA (Kotler & Keller, 2009).
(Source: Kotler & Keller, 2009)
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h. DISTRIBUTION CHANNELS: Nestle channel of distribution is as follows;
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(Source: Kotler & Keller, 2009)
i. FINANCIAL PLAN: This is the last step here organizations make financial statements to measure its growth (Kotler & Keller, 2009).

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Marketing, according to Kotler, is “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit”. Marketing concepts (or marketing management philosophies) are the philosophies used by the businesses to guide their marketing efforts.

Basically, marketing concepts relate to the philosophy a business use to identify and fulfill the needs of its customers, benefiting both the customer and the company. Same philosophy cannot result in a gain to every business, hence different businesses use different marketing concepts (also called marketing management philosophies).

Marketing concepts are driven by clear objectives like cost efficiency, product quality, customer’s need fulfillment etc.



Marketing Management Philosophies

There are five marketing concepts. A company should choose the right one according to their and their customers’ needs.

  1. Production Concept
  2. Product Concept
  3. Selling Concept
  4. Marketing Concept
  5. Social Marketing Concept

Production Concept

This concept works on an assumption that consumers prefer a product which is inexpensive and widely available. This view point was encapsulated in Says Law which states ‘Supply creates its own demand’. Hence companies focus on producing more of the product and making sure that it is available to the customer everywhere easily.

Increase in the production of the product makes the companies get advantage of economies of scale. This decreased production cost makes the product inexpensive and more attractive to the customer.


Low price may attract new customers, but focus is just on production and not on the product quality. This may result in decrease in sales if the product is not up to the standards.

This philosophy only works when the demand is more than the supply. Moreover, a customer not always prefers an inexpensive product over others. There are many other factors which influence his purchase decision.

Examples of Production Concept of Marketing Management Philosophies

  • Companies whose product market is spread all over the world may use this approach.
  • Companies having an advantage of monopoly.
  • Any other company whose product’s demand is more than its supply.

 Product Concept

This concept works on an assumption that customers prefer products of ‘greater quality’ and ‘price and availability’ doesn’t influence their purchase decision. Hence company devotes most of its time in developing a product of greater quality which usually turns out to be expensive.

Since the main focus of the marketers is the product quality, they often lose or fail to appeal to customers whose demands are driven by other factors like price, availability, usability, etc.

Examples of Product Concept of Marketing Management Philosophies

  • Companies in the technology industry.
  • Companies having an advantage of monopoly.

 Selling Concept

Production and product concept both focus on production but selling concept focuses on making an actual sale of the product. Selling Concept focuses on making every possible sale of the product, regardless of the quality of the product or the need of the customer. The main focus is to make money. This philosophy doesn’t include building relations with the customers. Hence repeated sales are very less. Companies following this concept may even try to deceive the customers to make them buy their product.



Companies which follow this philosophy have a short sighted approach as they ‘try to sell what they make rather than what market wants’.

Examples of Selling Concept of Marketing Management Philosophies

  • Companies with short sighted profit goals. This often leads to marketing myopia.
  • Fraudulent companies.

 Marketing Concept

Selling Concept cannot let a company last long in the market. It’s a consumers market after all. To succeed in the 21st century, one has to produce a product to fulfill the needs of their customers. Hence, emerged the marketing concept. This concept works on an assumption that consumers buy products which fulfill their needs. Businesses following the marketing concept conduct researches to know about customers’ needs and wants and come out with products to fulfill the same better than the competitors. By doing so, the business makes a relation with the customer and generate profits in the long run.

However this isn’t the only philosophy which should be followed. Many business still follow other concepts and make profits. It totally depends on the demand and supply and the needs of the parties involved.

Examples of Marketing Concept of Marketing Management Philosophies

  • Companies in perfect competition.
  • Companies who want to stay in the market for long time.

 Societal Marketing Concept

Adding to the marketing concept, this philosophy focuses on society’s well-being as well. Business focus on how to fulfill the needs of the customer without effecting the environment, natural resources and focusing on society’s wellbeing. This philosophy believes that the business is a part of the society and hence should take part in social services like elimination of poverty, illiteracy, and controlling explosive population growth etc.

Many of the big companies have included corporate social responsibility as a part of their marketing activities.

Holistic Marketing Concept

Holistic marketing is new addition to the business marketing management philosophies which considers business and all its parts as one single entity and gives a shared purpose to every activity and person related to that business. A business, like a human body, has different parts, but it’s only able to function properly when all those parts work together towards a same objective. Holistic marketing concept enforces this interrelatedness and believes that a broad and integrated perspective is essential to attain best results.


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