Introduction
Globalization is universal and inescapable. It affects economic, political, social, cultural, technological, and environmental conditions. Increased integration of the world’s economies offers widespread opportunities for development of nations across the world. This enforces on countries, institutions, business organizations and individuals to conform to universal standards, rules, norms, expectations, and requirements.
Countries have embraced outward-oriented economic policies and have lowered barriers such as import tariffs and open themselves up to investment and trade with the rest of the world. This increases the integration of economies around the world, particularly through trade and financial flows. The formation of a universal market open to all countries around the world, on all continents, facilitates increased international trade in goods, services and foreign investment.
Some countries are becoming integrated into the global economy more rapidly than others. Most countries that have been able to globalize their economies are experiencing reduced poverty and faster economic growth. As living standards increase, it became possible to make progress on other issues such as social equality, environmental and labor standards and other economic issues.
The same goes true for businesses. International business is increasingly developing multi-national networks composed of alliances, affiliates, licensees, and other partnerships. The most rapidly changing route for large multi-national companies entering overseas market / international business is through a growing variety of joint ventures and strategic alliances (James, 1993).
An attribute of desirable markets include adequate and reliable market information which is provided to market participants, both producers and consumers (Beckman & Davison, 1999). However, researchers report that consumers are confused by an abundance of less-than useful information about virtually every product’s specific benefits, correct dosages, uses, contents, and many more. This though has not stopped consumers from sampling and even buying products.
The collection and dissemination of marketing information involves not merely the passive receipt or acceptance of information offered by sellers but active efforts to collect data from other sources, such as governmental institutions and trade associations. Moreover, the collection of information would be of little value unless it is interpreted and disseminated with skill and intelligence. No small part of business success is attributed to the skill with which specialized marketing research departments and companies collect, analyze, and distribute factual information that serves as the basis for marketing decisions. Also, some marketing institutions such as brokers and resident buyers owe their existence, in large part, to their skill in obtaining, analyzing, and distributing information concerning sources of supply, prices and price trends, and other market conditions (Beckman & Davison, 1999).
This paper aims to summarize and review an article written by Peter Doyle on shareholder value in marketing.
Summary
According to Doyle, marketing is not yet a solid discipline like management. It does not posses guidelines and other theories to help it. But still, it has a sense of ownership when it comes to the concept of brand. Branding is a sort of heuristic manipulation of imprinting in people a positive and popular image of a product, image or organization. Many firms take credit on superior services or superior capacity of their products. But brands don’t always spell the best ability of the firm.
For many brands, it is appropriate to focus on heavy users rather than on the broader category of all users, because heavy users of a brand often account for a disproportionate share of a brand’s volume and thus are worthy of special focus.
When a product category has slow growth, targeting competitors’ users may be a viable strategy. The success of this strategy depends on the firm’s ability to convince consumers of the superiority of its brand in relation to the incumbent. For example, Pantene was able to expand its market share rapidly by providing visual demonstrations of the brand’s superiority in leaving hair shiny. Consumers found “shiny” to be a compelling way to say “clean and manageable”.
The exercise of segmentation, targeting, and positioning is followed by the practical fleshing out of the marketing mix, known as the 4Ps: product, price, place, and promotion. This is the tangible embodiment of the marketing strategy. When we say that the marketing mix needs coherence, we mean that not only must the mix elements be consistent with each other but also they must be derived from and consistent with the segmentation and positioning strategies.
Brands can be built over the internet. In fact, many brands are solely built on the internet. EBay and PayPal could be considered as brands or companies that have established a reputation only through the internet. Many people value their reputation. Fewer understand the nature of their reputation. Reputation is considered by a growing number of management practitioners and scholars to be an intangible asset that enables the enactment of relationships among the corporation and their publics (Varey, 2001). It will not be hard for PayPal to enter the Philippine market since most of the people in the country are already aware of such a company and have already heard of its good reputation.
Reputation is only one of several factors in the general ecology in which a corporation operates – the others are social, political, technological, and economic in nature. In some circumstances reputation has only marginal effect on an enterprise’s success; in other circumstances reputation has a critical effect (Varey, 2001).
Marketing assumes the task of guaranteeing the conditions of communication and information that allow demand for need fulfillment to be met through production of goods and services. Managers have long realized that it is as important to organize the demand as it is to organize the supply. Thus, straight away we can see the significance of managed communication – exchange relationships are needed and ideas must be generated and deployed. Ultimately, it is customers (buyers and users) who determine the nature of the businesses that can operate (Varey, 2001).
Business executives have become increasingly aware of the importance of adequate channels of communications within organization – especially internally. The term “communication,” as used in this sense, means that there should be facilities for an uninterrupted flow of orders, instructions, questions, responses, explanations, ideas, and suggestions between top management and the rest of the organization. This flow should be a two-way facility, from management to employees and from employees to management.
Aside from the customary orders and instructions concerning the normal routine of operations concerning the normal routine of operations, management frequently wishes to explain some of its policy decisions, or to give information about the company’s products, finances, plans for expansion, and personnel changes. By so doing, management hopes to bring about a better understanding among its workers of the salient facts concerning the company.
Employees, on the other hand, often have ideas for saving time, labor, and materials. They may have grievances of one kind or another that should reach the ears of the management. In planning the details of an organization, therefore, provision should be made for the creation and maintenance of a good two-way communication system.
The communication from the lower to the higher echelons of an organization, especially with respect to information concerning the results of orders previously issued by top management, is known as a feedback.
Communication is also a three-way process – downward, upward, and horizontally. Workers should know more about managerial thinking, management should be aware of what is going on in the workers’ minds, and there should be communication between those who occupy identical strata in the company’s organization.
There are several methods whereby this desirable communication can be achieved. Among these are: oral, face-to-face; employee newspapers and magazines; bulletin boards; handbooks; booklets; financial reports; letters from executives; and meetings.
A common practice in industry is the employee suggestion box, whereby workers are given the opportunity to present suggestions for improving efficiency or criticisms of company policies and practices. Many companies offer cash rewards to those workers whose contributions are of value to their employers. The establishing of open communication lines between employees and management has paid some handsome dividends.
So far, what has been discussed is the internal marketing communication plan for the company. There is also a need to plan for the external marketing and communications between the company and its customers.
In marketing, marketers also need to recognize the value for the shareholders. Many theories may address the topic which revolves around effective governance and its possible effects on a company. One theory, as proposed by R. Edward Freeman in 1984, and as revised by Wikipedia, states that stakeholder theory,
“identifies and models the groups which are stakeholders of a corporation, and both describes and recommends methods by which management can give due regard to the interests of those groups. In short, it attempts to address the “Principle of Who or What Really Counts.”
This theory puts the interest of the stakeholders first. Though of course, the theory also knows that there are other existing bodies that are part of the system. This view is very much an integral part and is of great help to the corporate industry, suggesting that “integrating both the resource-based view as well as the market-based view, and adding a socio-political level.” (Wikipedia, 2007).
The Stakeholder Theory is also based on acquiesce firmly, since it also deals with the people who hold office and their obligations to all the benefit of the stakeholders. Also, it argues that all stakeholders have a claim to the decision that should be made in the company.
Reflection
In today’s business world, the value and importance of customers is not something that should be set aside by companies. Marketing plans that includes forecasting and budgeting and strategic planning would be incomplete without paying much consideration to the customers. Customers will always be a part of the agenda in any marketing plan of any company. Because of the implications for profitability and growth, customer retention is potentially one of the most powerful weapons that companies can employ in their fight to gain a strategic advantage and survive in today’s ever increasing competitive environment .
Learning is vital in the success of a company’s strategy. To encourage and to make learning an integral part of management technology, companies must lift their sights from the short term. To design strategy, we must learn to search for and to identify patterns of change over time. To practice strategy design and to act proactively, we should replace our transaction-driven calculus with scenario analysis. Learning is not a luxury; it is how firms create their own future. Creating the organizational capability of and ambiance for learning will lead to a truly sustainable advantage.
Since marketing has two key concepts, customer/clients acquisitions and maintenance of customers/clients. In the context of marketing, learning is a result of information received through advertising or other publicity or through some reference group or other. In order to have an effect on motives or attitudes, Trap-ease America must implement marketing effort and associate the product with positive drives and reinforcing messages.
Identifying what people buy and why they make the purchase choices they do is complex. Product features such as status, economy, price, style, color, comfort, and service appeal to different market segments with specific sensitivities. Purchasing motives are not permanent and change throughout time. Motivation is influenced by other buyers.
The company must implement the buyer/decision model was not specifically designed for new products and its substance was concerned with search and problem solving. It begins with awareness. Marketers must first create awareness and then assist customers through subsequent stages of the process. Consumers cannot begin to consider a new product or service as a solution to need-related problems without this awareness. Successful innovative products should attempt to be problem-solving as successful innovative products should attempt to be problem-solving as far as the customer is concerned. Awareness can come about as a result of the marketing effort of the company or simply by ‘word of mouth’ communication.
If the product has potential interest and appeal, then potential purchasers will seek further information. Consumers then evaluate the new product against existing products, and then make an initial adoption by obtaining a trial sample, which might be a free sample or a ‘trial’ purchase. The adoption stage is when a decision is made whether to use the product (in the case of a fast moving consumer good on a repeat purchase basis). Post adoption confirmation is when the product has been adopted and the consumer is seeking reassurance about the wisdom of the purchase. After a major purchase, dissonance (termed cognitive dissonance) is present in the sign of unease that what was thought to be value for money at the time of purchase may not, after all, turn out to be true value.
Consumer behavior can also be characterized through the use of psychological factors which include motivation, perception, learning and attitudes and beliefs. Motivation or drive refers to an urgent need which causes a person to seek satisfaction of the need. The next psychological factor is perception which is the process of selecting, organizing and interpreting information in order to form a meaningful picture of the world. Another psychological factor which influences consumer behavior is learning. It modifies consumer behavior from the consumer’s experience. If the experience of availing the service or product is rewarding, it is most likely that the purchase will be repeated until the consumer becomes loyal to the company.
The company also needs to attract their consumers, and market attractiveness is measures through the following elements: market forces, competitive intensity and market access. The company should develop a product with long term profitability in mind in order to monopolize the toy industry. The element of market forces examines the market size, growth rate and buying power of the target market.
Thus, the marketing plan needs to re-evaluate if the target market still suits company objectives of providing long-term stability. The other important element of competitive intensity which includes number of competitors, price rivalry and ease of entry indicates that the plan will seek to develop strategies that will ensure competitive advantage without having to resort to a price war. The last element of market access covers customer familiarity, channel access and sales requirements.
The last dimension is competitive advantage which seeks elements of cost advantage, differentiation advantage and marketing advantage. Moreover, the company must also give importance to their pricing strategy. This can be done without having to resort to lowering the price seeing that only a fraction of that goes to the company .
Credit:ivythesis.typepad.com
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