H/601/0556 Marketing Principles
Holborn Associates Ltd, established in 2013 by two entrepreneurs, has grown steadily. Initially concentrating on providing advertising services, the business recognised an opportunity to develop its range of marketing services in response to requests from clients to cover more aspects of marketing communications, including brand management, public relations, sales promotion, exhibitions, merchandising, sponsorship and direct mail. The owners of the business Dr John Davies have recruited you as the new assistant marketing manager to support the team in developing marketing plans for clients. They were impressed with you at the interview and were interested in what you had to say on the topic of marketing orientation. A new client, Mrs Teresa May, has just started a fruit and preserve manufacturing business that buys surplus produce from traders at local market to avoid it having to be sent to landfill. She sells her products under the brand Quality Preserve Ltd at farmers’ markets. She has just won a contract to supply a major city department store. Currently she employs previously unemployed people who have just completed a government sponsored Work to Work programme. Teresa is keen to provide employment opportunities in the poor district where she operates. Her business is based in an industrial unit for new enterprises where she makes her preserves. Teresa is keen to expand her business but retain its ethical approach to its operations.
You have been given the job of client manager for Quality Preserve Ltd and are to meet Teresa to discuss some of the marketing issues about which she is interested. Prepare a briefing report to take to the meeting with Teresa in which you:
(a) Explain the various elements of the marketing process required and proposed segmentation criteria to be used for the jams and preserves produced by Quality Preserve Ltd. Indicate how these might be different for the consumer markets and the caterer/hotelier market, indicting a targeting strategy that Quality Preserve Ltd can use in one of the markets. (LO 1.1, 2.2, 2.3)
(b) Evaluate the benefits and costs of a marketing orientation for Quality Preserve Ltd that will enable it to exploit its commitment to ethical and sustainable practices in marketing its products and to exploit retailer and consumer interest in and commitment to responsible business behaviour. (LO 1.2)
c. Demonstrate how buyer behaviour differs in the consumer markets and the caterer/hotelier market and how it might affect Quality Preserve Ltd marketing activities, particularly the way it positions itself in the new corporate market.
c. Show macro and micro environmental factors which influence marketing decisions for a small business (LO 2.1) d. Quality Preserve Ltd products can be developed to sustain the company’s competitive advantage (LO 3.1) e. How distribution is arranged for food products to provide convenience for all types of customer ( LO 3.2) f. How prices can be set to reflect the objectives of Quality Preserve Ltd and the prevailing market conditions for conserved products such as jams, chutneys, pickles and relishes (LO 3.3) g. (c) Explain how to use new and existing promotional activity to achieve an integrated approach to these new and developing marketing objectives. (LO 3.4 h. Analyse the additional elements of an extended marketing mix for Quality Preserve Ltd and its products. (LO 3.5) (LO 2.1, 3.1, 3.2, 3.3, 3.5)
You have been given the job of client manager for Quality Preserve Ltd and are to meet Teresa again to discuss some other marketing issues about which she is interested.
a. Outline two type of marketing mixes that Lauren’s business will need if it is to expand the business to break into the lucrative department store market, and illustrate the general differences between marketing B2B and B2C. (LO 4.1, 4.2) (600 words =/- 10) b. Explain why international marketing differs from domestic marketing.
In this present era, the success of any organization highly dependent upon the carefully selected marketing principles of any company. Therefore, for the achievement of high level of profit it is important to develop effective marketing principles. Marketing principles are mainly based on the idea of the product promotional strategy. This assignment is intended to demonstrate the marketing principles of the Quality preserve ltd., which is one of the fruit, and preserve manufacturing business. In this assignment, the learner is working as a client manager whose tasks are to develop a marketing principle for the Quality Preserve Ltd.
Marketing can be defined as the process of the management by which any products or services can be moved to the customers from the concepts. Products, price, promotion and place are the four different elements by which marketing of any company mainly generated. As stated by (), marketing process refers to the technique by which different feasible opportunities are recognized by any organization and different strategies are developed to utilize those feasible opportunities (Pickton and Broderick, 2011). Different elements of any marketing process are shown below:
Figure 1: Marketing process of Quality Preserve Ltd
(Source: Pickton and Broderick, 2011)
For grabbing the marketing opportunities, detailed situational analysis is important. As Quality Preserve Ltd. is one of the small sized organizations, so that different governmental scheme creates a huge impact on the operation of the company (Tatikonda and Montoya-Weiss, 2012). As Quality preserve ltd. is one of the new organizations so that less amount of monthly disposal income can create a problem for them. Moreover, the culture of people to buy all of the groceries from one place can create problem for them. However, CSR of the company is very good and they try to maintain ethics while conducting their business. Therefore, for these ethical practices there are huge possibilities that they can grab the attention of huge number of people (Duncan and Moriarty, 2013).
Development of the marketing strategy:
As stated by Gronroos (2014), marketing strategy of any company allow companies to focus on their different limited resources and helps them to grab different business opportunity so that they can attain the sustainable business growth. As Quality preserve Ltd. is one of the SME so that they are operating in a very small region and their target group are different business that sales their product to different customers. For segmenting the target customers, Quality Preserve Ltd. utilizes demographic as well s psychographic segmentation.
Gender: they segment their customers based on male and female
Income: they segment their customers based on individual and business.
Social status of customers: Quality Preserve Ltd. segmented their customers based on the high class, middle class and low class.
Benefits from the product: product differentiation and the cost advantage
There are different types of targeting strategy, among them Quality Preserve Ltd. follows the differentiated targeting strategy (Tatikonda and Montoya-Weiss, 2012). Through this targeting strategy, they must target different business organization that sales their product to customers and their ultimate target group must be lower middle and low class people. As they are new organization, so their promotional strategy must be very much strong. Therefore, designing different promotional messages for different target group is essential and through this targeting strategy, they must communicate the benefits sought by the products.
Designing the tactics regarding markets:
After defining the target group, it is important for the Quality Preserve Ltd. to make different decisions regarding the marketing by considering the development as well as promotional decision regarding their products or services.
|Product||As quality Preserve Ltd. is one of the fruit as well as preserve manufacturing businesses, therefore, their main products are the jams, pickles, relishes, chutneys etcetera.|
|Price||As Quality Preserve Ltd. is one of the new start up business so that their pricing strategy must be affordable to their target group. Penetration pricing strategy will be best strategy for them.|
|Promotion||They must promote their product through newspaper and television. Along with that, they can utilize the online promotional media.|
|Place||Branches of the Quality Preserve Ltd. must be created in the area by which they can easily serve their target customers.|
Table 1: marketing mix of Quality Preserve Ltd
(Source: Created by author)
Implementation and control:
After the development of the marketing process of the Quality Preserve Ltd., they must implement this process to achieve huge profit.
For facilitating the sustainable business practices, it is important for any organization to have an effective and transparent business orientation. As stated by Sin et al. (2015), there are mainly five different business orientation such as customer orientation, inter-functional co-ordination and the competitor orientation. Customer orientation can be defined as the clear understanding regarding the necessity of the target customers that helps any company to achieve the superior selling. Competitor’s orientation of any company refers to the understanding of the long-term capabilities and short-term weaknesses and strength of any company. Therefore, after assessment of the competitor’s orientation, Quality Preserve Ltd. must set their promotional and pricing strategy to achieve competitive advantage. Inter-functional coordination is the manner that can help any company to utilize the current resources of the company to achieve superior value. Therefore, Quality Preserve Ltd. must set an effective inter-functional coordination to achieve competitive advantage.
Figure 2: Different types of marketing orientation
(Source: Avlonitis and Gounaris, 2011)
For the implementation of any strong marketing orientation, it will be effective for the Quality Preserve Ltd. to invest medium amount of money. As they are new start up so they may face problem to generate cash for investing in the market. Therefore, they must follow that promotional media which is cost effective in nature. However, along with the cost effectiveness promotional strategy, it is important to aware new customers so that the organization can easily increase their customer base and retrieve their initial investments more easily (Gray et al. 2012). During the customer awareness process, it is important for the Quality Preserve Ltd. to highlight their low pricing strategy so that they can attract the price sensitive business organization and supply their products to them. The main reason behind investing the medium amounts is it can be easily retrieved from the market. For creating awareness among customers regarding their products, it will be effective for them to use different online media because most of the people in this world are internet savvy and online media is very much cost effective in nature.
|Factors||Consumer market||Hotelier market|
|Culture||In the UK, the individual customers mainly demand the huge quantity of products in lowest possible value||In the UK, it has been observed that the hotelier market mainly demand smaller packing size so that it can be easily deposit and disposed.|
|Price||Price is one of the important factors that affect the buying behavior of the customers. In the UK, individual customers do not demand high level of reduction in the price. Individual customers in the UK requires more quality before buying so that it is important to provide them the assurance that they are buying the right quality.||Hotelier market demand more higher level of reduction in the costs and to influence their buying behavior, it is important to have an effective promotional strategy|
|reference||Individual customers compares their thoughts and feelings with other reference group||This is not important in the hotelier market|
Table 2: Differences in the buying behavior of the consumer markets and hotelier market
(Source: Van Nierop et al. 2011)
There is different positioning strategy, among them Quality Preserve Ltd. follow the price positioning strategy. As they are a new organization, it is very much effective for them to use the positioning strategy that can attract huge number of target customers (Brooksbank, 2014). Therefore, by utilizing the price positioning strategy Quality Preserve Ltd. ca n achieve huge number of price sensitive customers.
There are two different types of environmental factors that creates huge impact on the decision making process that are macro environmental factors and micro environmental factors. Macro environmental factors are those either uncontrollable factors that affect any business positively or negatively (Wagner et al. 2013). Macro environmental factors of any small-scale industry can be evaluated by the PESTLE analyses that are as follows:
Different legislation of the government of the UK related to the tax rates and employment affect the business of any small-scale organization. Moreover, the stability of the government also affects the operation of any small-scale organization (Simard and Marchand, 2013). Due to the employment related act of the UK government, Quality preserve Ltd. are liable to provide a standard working hours and maintaining equality in their company. During the instability of the government any small scale organization must develop effective pricing strategy to attract the customers and maintain their source of profit.
Inflation, flow of the customers, foreign direct investments affect the operation of any small-scale company in the UK. Due to recent Brexit issue, UK charged huge corporate tax to different organization that create huge problem for the small-scale organization because their operating revenue is very less.
Living standards, population of the country and products quality affect the business of any small-scale organization. In the present day, customers are more aware of the quality of any product and they like to shop products from those brands that provide high quality product at lowest possible costs (Wagner et al. 2013). Therefore, it is important for any small-scale organization to target very few customers and provide them good quality products.
E-commerce and digital marketing changes the path of marketing. Therefore, for maintaining sustainability in this digital world, it is important for any small-scale company to develop their e-commerce websites.
Due to the strict safety regulation of the UK, Quality Preserve Ltd. must provide some safety and security to the employees that are directly associated with the product manufacturing process.
Different environment related issues such as green house gas; carbon footprint creates huge impact on the operation of any small-scale organization because they do not have enough money to invest in the reduction process of the environment related issues.
As opined by Peixoto (2011), micro environmental factors are the factors that creates huge impact on the success and operation of any business. Micro environmental factors can be analyzed through the Porter’s five forces analysis. Porter’s five forces analysis for the small-scale organization in the UK is as follows:
Bargaining power of supplier:
As Quality Preserve Ltd. buys surplus products from the manufacturer, therefore the bargaining power of the supplier is less.
Bargaining power of buyer:
Due to the involvement of the fewer switching costs and high level of the market competition for the presence of huge market players, the bargaining power of the buyer is very high.
Threat of substitute:
Quality Preserve Ltd. produce chutney, jam, pickles etcetera so that there are several substitute such as butter is available. Therefore, threat related to substitute is high.
Several organizations are present in the market who manufactures same kind of products (Simard and Marchand, 2013). Moreover, there is huge number of big organization in the market that increases the level of competition in the market.
Threat of new entrants:
As the investments of the small scale, organization requires very small amount of initial investments, therefore, threat of new entrants is very high.
As stated by Lado et al. (2012), for the achievement of the sustainable competitive advantage it is important for any organization to facilitate the product innovation. Product innovation can be defined as the process to create products or services that are either updated version of product or newer version of the product. Therefore, for the development of the sustainable competitive advantage Quality Preserve Ltd. must perform the following:
Figure 3: Development of product for achieving competitive advantage
(Source: Reed and DeFillippi, 2011)
Implementation of the new pricing strategy:
Most of the customers always wanted to get high quality products in the affordable costs so that Quality Preserve Ltd. must adapt the new as well as innovative pricing strategy by which they can offer the lowest possible costs to the customers and achieve sufficient amount of profit.
Introduction of new products:
Quality Preserve Ltd. is one of the fruit preservation company so that they can achieve the sustainable competitive advantage by increasing their product range (Reed and DeFillippi, 2011). They can increase their product differentiation strategy to increase their profitability. The organization can conduct more research and development to increase the range of the products.
Implementation of the innovating strategy regarding marketing:
For implementing the effective and innovative marketing strategy, Quality Preserve Ltd. can implement the blog marketing strategy. The company can develop some effective content to attract and motivate more number of customers (Lado et al. 2012). Along with this marketing strategy, the organization can facilitate the social marketing strategy.
Implementation of the effective operational cost cutting system:
For achieving the sustainable competitive advantage, Quality Preserve Ltd. should cut their operational costs by reducing the number of workforce. Along with that, it is also important for them to motivate the employees in most effective ways so that they can provide their best possible effort to their organization.
Provide different offers:
For the achievement of the competitive advantage, the organization can provide different promotional offers to their customers (Reed and DeFillippi, 2011). For example, Quality Preserve Ltd. can provide free product or they can provide some discounts regarding their price.
Distribution is the action by which any company can share their produced products or services among different recipients. Therefore, in order to make their product available to the market so that large number of buyer can buy them, Quality Preserve Ltd. must spread their product through effective distribution channel. For making their product available, Quality Preserve Ltd. can open their store in the place where the number of potential customer of the company is high. Therefore, it would be effective for them if they can open their store in the high street from where they can attract different shopping mall or other retail store for distributing their product. Along with that, they can open their store in different high street where the density of the population is high (King and Phumpiu, 2013). It would be helpful for them, if they can open their store in the area from where they can easily access their target customers. Moreover, Quality Preserve Ltd. must involve stockiest and wholesaler to distribute their product among their target customers.
According to Stank et al. (2014), there are mainly three different types of the distribution coverage such as selective, intensive and the exclusive coverage. For attracting their target customers, Quality Preserve Ltd. can utilize the direct marketing strategy so that they can help their customers to access their distribution channel and buy products from them. Exclusive converges are effective to provide services to the narrow market. Therefore, they can also utilize the exclusive as well as intensive coverage for providing effective services to the customers. Through the exclusive converges they can attract and supply their products to different shopping mall and departmental stores. On the other hand, through the intensive converges they can distribute their products among the huge population of the UK. They must develop their distribution channel in the way by which they can save their food products from wastes so that distribution of products must be faster (King and Phumpiu, 2013).
Figure 4: Different types of distribution coverage
(Source: King and Phumpiu, 2013)
Presently, most of the customers are price sensitive and their actual requirement is gaining high quality products in the lowest possible price. However, in different economy the capacity of the customers are different and their requirements are different (Bakos and Brynjolfsson, 2011). Therefore, for the achievement of huge number of customer bases and achievement of huge profit, it is mandatory to set pricing strategy according to the ability and requirements of the customers. For setting the actual pricing strategy, Quality Preserve Ltd. must consider 4C framework.
For the development of the right price, Quality Preserve Ltd. must set price according to the expectation and need of the customers. The ultimate target customers of the company are the lower middle and lower class people so that they must set the price accordingly so that retail store can offer product to them (Bakos and Brynjolfsson, 2011).
The main customers of the Quality Preserve Ltd. are different departmental store, shopping mall and some retail store. Their ultimate target customers are the lower class people so that they need to set price according to the disposal income of their customers.
Company objective and policy:
Every organization has some pricing related policy according to which they set their pricing strategy. Quality Preserve Ltd. must develop an effective pricing strategy according to the objective and policy of the company. After that, they should set their pricing strategy according to that.
Other market players in the industry manufacture and sell same kind product. Therefore, in order to achieve the sustainable competitive advantage it is important for the Quality Preserve Ltd. to set the effective pricing strategy according to the competition level and pricing strategy of rival companies of the industry (Singh and Vives, 2014).
Figure 5: 4C framework
(Source: Singh and Vives, 2014)
As stated by Fader and Lodish (2012), promotion can be defined as the set of activities that can assist any company to promote or communicate their services, products or brand to the customers. For creation of the sufficient awareness among the customers, it sin important for any company to develop the most effective promotional strategy. According to Horsky and Simon (2013), different promotional strategy attracts the target customers of any organizations and assists them to secure huge amount of profit by achieving their corporate objectives. Effective promotional strategy helps any company to build their reputation so that it is important for any company to secure an effective brand image.
The new objective of the Quality Preserve Ltd. is achieving huge profit by supplying products to different departmental stores and shopping mall. They first followed the direct marketing strategy, which is not much effective to achieve huge number of customers. Therefore, they need to adapt more promotional strategy (Fader and Lodish, 2012). Different promotional services such as advertising, direct mailing and sales promotion helps Quality Preserve Ltd. to develop their sales. This promotional mix can help the customers of the Quality Preserve Ltd. to know the product range of the company. Different elements of the promotional mix mainly influence the buying behavior of any customers and convince them to buy products from the organization. For attracting the customers with different promotional strategy, it is important for the Quality Preserve Ltd. to reflect the pricing strategy of the product. This strategy effectively attracts the price sensitive customers of the company (Horsky and Simon, 2013). Promotional strategy of any company must be selected in that way so that any organization can reduce the promotional costs. Therefore, it is very much important for Quality Preserve Ltd. to utilize the online media such as digital marketing strategy and social media marketing strategy to reduce the costs of marketing. This is because, cost associated with the online marketing strategy is very low.
Quality Preserve Ltd. must consider different elements of the extended marketing mix also, that are as follows:
At the initial level, Quality Preserve Ltd. must hire only experienced people to secure huge amount of profit. For this purposes, Quality Preserve Ltd. only hires those people that have received the work-to-work program arranged by the government. It will be effective for the company to hire people based upon their skills and the expertise in the field (Afridi, 2015). They should not hire any fresher because it incurs some costs regarding the training. The initial investments of the company are not so high so that it will be effective for them not to hire fresher employees. For retaining and managing staff, it is important for the Quality Preserve Ltd. to provide effective remuneration as per the industry.
For the maintenance of the effective operations, Quality Preserve Ltd. to manufacture good quality jam, chutney, relishes and pickles with the assistance of their experienced employees. For maintaining their operation in an effective manner, it is mandatory for the Quality Preserve Ltd. to avoid any kind of internal conflict among employees. Along with that, for maintaining the operational excellence, it is important to cut some excessive costs so that the company can achieve effective level of profit (Afridi, 2015). For maintaining an effective organizational process, it is important for Quality Preserve Ltd. to eliminate any kind of confusion from the process so that effectiveness of the operation can be increased. For the achievement of the effective operation, it is important for the Quality Preserve Ltd. to clearly demonstrate their organizational objective to the entire employee.
Physical elements of any company distinguish any company from other company so that it is important for any company to carefully select this element. As stated by Goi (2014), customers mainly judge any company based on this elements. Therefore, Quality Preserve Ltd. must effectively select this element to create a positive experience in the mind of customers. For providing satisfaction to the customers, it is important to provide an extra facility such as discounts, car-parking facilities to the customers. Along with these facilities, it is also important for the company to develop an effective exterior for their store.
Figure 6: Extended marketing mix
(Source: Goi, 2014)
If Lauren wanted to break their business into two different categories such as lucrative department store and general store, then the marketing mix will also be different from each other. The marketing mix two different types of store will be as follows
|Products||For selling products from their lucrative departmental store, Quality Preserve Ltd. must consider the quality of their product. Moreover, effective look and feel of the product is also mandatory so that it can grab the attention of the customers.|
|Price||For selling products from their lucrative departmental store they must utilize the premium pricing strategy because this store is developed for the high-middle class people.|
|Place||The place for the lucrative departmental store for the Lauren’s business will be different busy street of cities of the UK.|
|Promotion||For promoting products for the lucrative departmental store, Quality Preserve Ltd. can utilize the television advertising strategy. Along with that, Quality Preserve Ltd. can utilize the online promotional strategy also.|
Table 3: Marketing mix for the lucrative department store
(Source: Created by author)
|Products||For selling products from their general or economy store, the product can be the jam, chutney, pickles as well as relishes that they have produced for their customers.|
|Price||Quality Preserve Ltd. must follow the penetration pricing strategy for this kind of store|
|Place||Place can be both online and offline media. For facilitating the offline selling, Quality Preserve Ltd. can utilize any place from where they can access their target customers|
|promotion||For promoting products for their general store, Quality Preserve Ltd. can utilize the advertising in the newspaper and they can utilize the online media also.|
Table 4: Marketing mix for the economy or general store
(Source: Created by author)
|Purchasing process||Business buys products for their organization for using it so that it involves a very complex buying process.||Customers buy products for their personal use so that the buying process for the customers is comparatively easier.|
|Pricing strategy||Pricing strategy for selling products to the businesses is comparatively low to retain them as permanent customers. Moreover, businesses buys product in large quantity so that it is important to offer them low pricing strategy.||For selling products to customers, the pricing strategy is high because customers buys product in small quantity.|
|Promotional strategy||The promotional strategy in the B2B process must be more effective to attract customers||Less complex promotional strategy is required here to attract number of customers|
|Payment process||In B2B process prices of the products may varies and the transaction process is also different||In case of the B2C process, every customers pay the same price like other manufacturer of the same industry|
|Product||Product must be in high quality for selling it to the businesses||Very high quality product is not necessary here|
|Places||Places must be fewer in numbers||More places are required for selling it among the customers|
Table 5: Differences between the marketing among B2B and B2C
(Source: Swani et al. 2014)
|Factors||International marketing||Domestic marketing|
|Rate of tax||In the international market, price of the product is high because of the involvement of high tax||Due to less tax, price of the product is less in the domestic market.|
|Generation of the revenue||Due to the involvement of the foreign currency, higher revenue is generated in the international market||Domestic market creates less amount of revenue|
|Promotional costs||International marketing require huge costs for promoting and marketing because it requires attracting huge number of customers.||Promotional costs for the domestic marketing are lesser than international marketing because it is generated for the customers of a small area.|
|Market size||Market size for the international marketing is huge because here operational area is huge||Market size for the domestic marketing is very low so that the scope of work is very low.|
Table 6: differences between international and domestic marketing
(Source: Bartels, 2011)
The above discussion concludes the fact that for the development of effective marketing principles, it is important to select effective marketing and promotional mix based on the product development strategy. Therefore, for selecting an effective marketing mix it is important to develop an effective pricing strategy and distribution strategy according to the demand of the customers. For the development of the effective marketing mix, it is important to understand the actual need of the clients of the company. Therefore, for the development of effective marketing principles, it is important conduct a market audit for the actual assessment of customer’s need.