What is Marketing Process? We know that Forecast is an essential activity of any organization. It allows a business to scrutinize its existing position within the market, consider the prospect to make stronger that position and determine the most valuable manner of implementing the required changes.
Steps in Marketing Process
The essentials six steps in marketing process are:
- Situational awareness
- Market Research
- Establishing market objectives
- Identifying target markets
- Developing market strategies
- Implementation, monitoring, controlling.
1. SITUATIONAL AWARENESS
Determines whether a business has an understanding of its current business position. It Involves the use of a SWOT analysis & a products life cycle.
An analysis of a business internal strengths and weaknesses and external opportunities and threats.
Internal = What a business controls
External = What a business does not control
Introduction = Product/service is introduced, the consumer market is established, promotion directed at specific audiences
Growth = Market share and use of promotion increases and targets more markets, quality is maintained.
Maturity = Sales plateau, products try to differentiate from others, price may decline.
Decline = sales decrease, promotion discontinued, price lowered to sell remaining stock.
2. MARKET RESEARCH
Collecting, recording and analyzing info concerning a specific marketing problem.
It Can minimize the risk of failure for a product/services introduction
- Determining info needs: Establish what kind of information is required.
- Data collection (Primary + secondary): Can be done through a survey (asking members of a group), observation (recording behaviour of customers) or experiment methods (Altering factors under tightly controlled conditions to evaluate cause and effect)
- Data analysis and interpretation: Draw conclusions from the data, then interpret the data.
3. ESTABLISHING MARKET OBJECTIVES
Realistic and measurable goals to be achieved through the marketing plan.
Most common goals include
- Increasing market share
- Profit maximization
- Expanding product range
- Increasing customer service
- Increasing market share: Market share refers to the business share of the total industry sales for a product.
- Expanding product range: The total range of products a business offers. Expanding this means to introduce more products over a time period. To expand businesses must understand customer needs and wants.
- Increasing customer service: This means responding to the needs and wants of customers. High levels of customers satisfaction increase customer loyalty and the possibility of repeat purchases. EXAMPLE: hotels regularly follow up your stay with a questionnaire regarding your stay
4. IDENTIFYING TARGET MARKETS
Determining who a business is aiming to sell their product/service too. A business picks a target market to direct its marketing strategies at.
- product related.
Potential Market: Set of consumers who have interest in the product.
Penetrated market: Consumers who have already bought the product.
Primary Target Market: Major market segment that most marketing resources are directed. They will purchase most of the production
Secondary Target Market: Usually a smaller and less important segment. They will purchase the product in small quantities
There are 3 approaches to identifying a business’s target market.
- Mass Marketing
Mass Marketing seeks a large range of customers. Usually only selling one product with little variation (EXAMPLE: Coca-cola)
- Market Segment Approach
This is when the total market is subdivided into segments. Each segment is targeted individually.
- Niche Market
A narrowly selected target market (EXAMPLE: local bakery)
5. DEVELOPING MARKETING STRATEGIES
These are actions undertaken to achieve the business marketing objectives through the marketing mix.
The marketing mix is the 4 P’s,
- Place (also called Distribution)
The extended Marketing mix (the 7 P’s) includes People, Processes and Physical Evidence
- The quality of interaction between the business and customers
- Employees determine the quality of service customers with receive.
- Customers judge or develop perceptions based on the service they receive from employees.
- A good quality interaction with customers can give a business a competitive advantage
- Refers to the flow of activities that a business will follow in its delivery of a service.
- Well, design and organised processes assist employees in delivering an efficient service. Poorly implemented and designed processes will lose customers for the business.
- EXAMPLE: A restaurant that keeps customers waiting has inefficient processes and will lose customers.
- Refers to the environment in which the service is delivered. The type of image your business portrays through its physical appearance such as premises, appearance of staff, vehicles, signage and website.
- EXAMPLE: A workplace with poorly dressed staff and is messy is going to lose customers compared to one that has well-groomed staff and is clean.
6. IMPLEMENTATION, MONITORING AND CONTROLLING
How to implement, monitor and control the marketing plan.
Implementation: The process of putting the marketing strategies into operation.
For effective implementation, a business must be.
- Clearly, communicate all plans with employees
- Ensure staff are motivated to implement marketing plans
- Outline how the change will be monitored
- Resources for the marketing plan are allocated
- Cost-benefit analysis is correct
Monitoring: Checking/observing the actual progress of the marketing plan. Looks at real-time info at each stage of the marketing process
Controlling: Involves the comparison of actual performance against planned performance & taking corrective action to ensure that the marketing objectives are being achieved.
A KPI (Key performance indicator) is to be used to establish a forecast level of performance which actual performance can be measured against.
The KPI’s that can be used include:
- Sales analysis
- Market share analysis
- Market profitability analysis
The comparison of actual sales to forecasted sales
Determines how effective a marketing strategy is
Easy to collect and process, does not reveal the profit level however
Market Share analysis
Comparing a businesses marketing strategy to its competitors (EXAMPLE: IGA to Coles)
A business can evaluate whether an increase/decrease in sales is a result of the marketing strategy or an uncontrollable external factor (EXAMPLE: the economy)
Market Profitability analysis
Using this a business breaks down the total marketing costs into specific marketing activities, such as advertising, transport, admin, ordering process and so on.
By comparing the cost of each activity, a business can determine the effectiveness of each activity.
Once the results for the KPI’s have been calculated, a business is in a position to determine which objectives are being met and which are not. Based on this info the marketing plan can be modified or revised.
Can be changed by…
- Changes in the marketing mix (4 P’s)
- New product development
- Product deletion