The Marketing Analysis of Starbucks
Marketing: The term marketing has evolved with time and today marketing revolves around providing continuous benefits to customers. Through these benefits the exchange of transactions takes place and the companies fulfil their goals and objectives. (Philip kotler)2. There is no one definition of marketing and as a function it adapts itself to the needs of organization. (Janny C. Hoekstra, 1992)1.
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The Chartered Institute of Marketing define marketing as ‘The management process responsible for identifying, anticipating and satisfying customer requirements profitably’ If we look at this definition it says that marketing is a management responsibility which requires coordination, planning, implementation of campaigns and a competent manager(s) with the appropriate skills to ensure success. According to Philip Kotler marketing is defined as “satisfying needs and wants through an exchange process” This exchange process will only be beneficial if the consumers pay high value for it that is money.
In order to get a higher value on the transactions marketers need to provide consumers with the best of what the demand and desire. The marketing concepts aid marketers in identifying the needs and wants of the consumers. The fundamental idea behind the marketing concept is to focus on consumers. There are four basic parts of the marketing concept: (Principles of marketing, 2006)3 Firstly to understand and satisfy the customer needs in the targeted segment. Secondly, having proper organizational goals and focus their strategies in achieving those goals along with customer satisfaction.
Third and the most critical part is when organizations have to execute their marketing strategies. This is critical because if the strategies are not executed in an effective or efficient way, the entire concept will fail. For example, if a product is marketed as being on sale (50% off) but is not available in most of the stores, the distribution failure will result in the marketing concept failing. Lastly, customer satisfaction should be to an extent that it outperforms the competition in that market.
The marketing process has seven steps that need to be addressed when developing a marketing plan or strategy. (Principles of marketing, 2008)4 First of all is the understanding of the market or consumers. The product or service should specifically be according to their needs and demands. Second is segmenting the market and identifying the target customers. Once the market is segmented, than the customers’ needs in that market should be properly looked into and identified. After that a specific product according to their needs, should be designed.
Communicating the concept of the product and service to the target customers is the next step. Once the communication is done then the product or service is to be delivered to the target customers and lastly, a feedback for the improvement of the product is to be taken from the targeted consumers. This process is applicable to most situations encountered by those wanting to market a product or service. Marketing orientation: Marketing orientation is when companies or businesses put customers first.
Slater and Narver (1995)5 suggested that ‘‘market orientation is the culture that (1) places the highest priority on the profitable creation and maintenance of superior customer value, while considering the interest of other key stakeholders; (2) provides norms for behaviour regarding the organizational development and responsiveness to market information”. A market- oriented company is always focuses on customers’ needs. So, the relationship between market oriented company and customers’ will become closer and it is easier for the company to get the information from the customers (Jobber David 2007)6.
Basically, the goal for a market-oriented company is to earn profit from the consumers’ satisfaction. They will achieve their goal by coordinated marketing and inter functional activities (Lamb, Hair & McDaniel 2009)7. There are many benefits and costs attached to market oriented companies. The company I will examine is Coca Cola. Market orientation is reflected on the Coca-Cola Company’s mission statement: “Consumer demand drives everything we do. ” Another brief from their mission statement includes “We will serve consumers a broad selection of the non-alcoholic ready-to-drink beverages they want to drink throughout the day”. Coca-cola. uk) 8 The benefit of this orientation to the company is that by knowing its customers well, it exactly produces what they want and that result in profits for them. The Company becomes more flexible to changes in demand patterns. The drawback on the other hand is that consumer research involves a lot of expenditure for the company. A large proportion of its income is spent on consumer research. The product life cycle and new product development: The product’s life cycle – period usually consists of five major steps or phases: Product development, Product introduction, Product growth, Product maturity and finally Product decline. Ioannis komninos, 2002)9 The Diagram below shows the Product Life Cycle of any organization that needs (managing-innovation) • To help identify opportunities for new product development or product improvement. • In early diagnostic and project definition work Standing of its product or service in the market. New product development New product development has eight stages and the process is crucial to the organization. New product development is improving and updating product lines is crucial for the success for any organisation.
Failure for an organisation to change could result in a decline in sales and with competitors racing ahead. (Lean marketing) 10 Stage 1 is idea generation; the idea generation can be look into following categories: (lean marketing) 10 • Within the company i. e. employees • Competitors. • Customers • Distributors, Supplies and others. Stage 2 after the new product development is idea screening. In this process organization involve shifting through the ideas generated above and selecting ones which are feasible and workable to develop. Pursing non feasible ideas can clearly be costly for the company.
Stage 3 is the Concept Development and testing. The organisation may have come across what they believe to be a feasible idea; however, the idea needs to be taken to the target audience. They need to take customer feedback on this before going ahead on the next step. Stage 4 is the marketing strategy and development. In this stage organizations see the product/service idea to be launched within the market. After that a proposed marketing strategy will be written laying out the marketing mix strategy of the product, the segmentation, targeting and positioning strategy sales and profits that are expected.
Stage 5 will be the Business Analysis, the company has a great idea, the marketing strategy seems feasible, but in this stage, organizations see will the product be financially worthwhile in the long run. The business analysis stage looks more deeply into the cash flow of the product. Stage 6 will be Product development. This is the final stage it is at this stage a prototype is finally produced. The prototype will clearly run through all the desired tests, and be presented to the target audience to see if changes need to be made. Stage 7 is Test Marketing, in this stage product is launched within a specific region and the reaction is seen.
Stage 8 is the commercialization; if the test marketing stage has been successful then the product will go for national launch. Scenario: This part of the paper will be a report by me, the managing consultant, to the managing director of Nescafe advising him on the marketing plan of launching a new product. Nestle is launching a novel product, the first and sole one of its kind in United Kingdom. Nescafe Frappe or the “Cold Coffee”, just snip and sip, a refreshing and tasty drink that will be highly appealing to the young masses in the country.
Frappe is developed to keep the target market on track of cold coffee irrespective of the limitations posed by season. This product is an extension to the already available product line of Nescafe Frappe. The Nescafe Frappe available in market is the one which comes in a 180ml pack and requires milk and ice to be added. This product has not been very popular and the reason for that is that consumers are reluctant to buy a product that requires milk and especially ice. Looking at this, Nescafe has come up with Nescafe Frappe-Just snip and sip, so people can enjoy a refreshing drink anywhere, anytime without any hassle.
This iced, creamy ready to drink coffee in 300 ml slim pack will be positioned to appeal to the youth and gain its share from the other summer beverages. The product will enjoy a special appeal among urban consumers – both young and old. Soluble coffee, instant coffee and frothe are the pillars of Nescafe’. (Nescafe. com/uk) 11 And with their success NESCAFE Frappe-Just snip and sip, will also be able to make a major inroad in the beverage market. The target market of Nescafe Frappe-Just snip and sip will be the young generation i. e. ages 18-35.
This is the ‘wanna be’ age where youth want to be in keeping with the changing times. Nescafe also wishes to place itself where the younger crowds are going. It wants to position itself in the area which is not the domain of its competitor. Before the company moves on with this launch, I as a marketing consultant would like to advise the marketing director on certain issues that would help him design a better marketing strategy for the brand. 1) Where there is a company in operation it has to work in two kinds of environment i. e. •The Macro environment and •The Micro environment of the company.
For a company to avail maximum and avoid maximum, it has to know what it has to avail and what it has to avoid. The marketing environment within which a company operates is dynamic. It consists of a microenvironment, and a macro environment. The microenvironment is “the forces close to the company that affect its ability to serve its customers. ” The macro environment is “the larger societal forces that affect the whole microenvironment,” (Kotler et al 1998, pp885-886)12 The macro environment of Nescafe Frappe consists of six types of forces: demographic, economic, natural, technological, political and cultural forces .
Its marketing strategy must take into account changes and trends in these environments that can present opportunities or pose threats. I will be discussing the impact of two factors amongst all the six mentioned above. A successful firm is one that regularly modifies it marketing mix and strategies to adapt to these changes (Czinkota et al 2000, p17)13. Economic Factors: The economic environment consists of the “factors that affect consumer buying power and spending patterns” (Kotler et al 1998, p113)14.
Factor include income and employment levels, inflation levels, and savings and credit conditions, the value of the UK sterling pound and so on. Consumers in UK must have the purchasing power to fulfil their desires, like that of Nescafe Frappe. However, as in the case of Nescafe Frappe, the brand name is already established, people trust it for quality so price may not be an issue for the product. Non-price factors, such as branding, are a significant basis for competition for coffee products (IBIS World 2000, p8)15.
Moreover, UK market is still under a recession due to which it is facing decreasing disposable income, job insecurity and credit financing hurdles (Office for National Statistics, 2008)16. Such factors can pose a threat for the company’s product as people are not very much willing to spend on their desires they are more concerned about the basic necessities to be fulfilled. Demographic factors: Demographics are the “study of human populations in terms of size, density, location, age, sex, race, occupations and other statistics” (Kotler et al 1998, p105)17.
The demographic environment consists of all the aforementioned demographic variables, and their ability to affect the UK coffee market. The importance of the demographic environment lies in the fact that all demand for a product derives ultimately from people (Cannon 1998, p41)18. Recent demographic trends in UK are a better-educated and more white-collar population, increasing ethnic diversity, and changing age structures. The implications of such changes are that Nescafe must now design products and marketing programs for the specific micro-markets they wish to target.
In this scenario, the company wishes to target the youth of the nation, may it be of any race, the drink has an image which is refreshing and fun so the demographics should be sorted accordingly. Coming to the micro environmental factors, the factors that might influence Nescafe Frappe’s marketing decisions are listed below; I will be discussing two out of all, in detail:(Da. group. uk)19 a. The company itself (including departments). b. Suppliers. c. Marketing channel firms (intermediaries). d. Customer markets. e. Competitors. f. Publics. Competitors: Competitors study is very essential before entering in any market.
Some of them like Macdonald’s, Sainsbury’s, Starbucks and costa can be the company’s major rivals. . The company will have to see what competitors it has and how it can have a unique selling proposition. It will have to do a competitive study. For the competitive study company can ask questions relating to the coffee culture in their target market. Below are some of the important one’s: 1) What drink do u prefers as a healthy and energy drink? 2) Do you think that there is enough variety in the market? 3) Would you prefer a drink launched by a established brand name over others? 4) What attributes does u seek in a healthy drink? ) Would you prefer drink in a can or a tetra-pak? Such questions will help Nescafe to conclude that do consumers want more variety and do they give a lot of preference to an established brand. Moreover, do they want a drink which is light and at the same time, is healthy and energetic? Lastly, do they prefer drinking in cans or tetra-pack? By this study, they can conclude that NESTLE FRAPPE has all these qualities or not and how it can capture the target market. Customers: The company must study its customer markets closely since each market has its own special characteristics.
These markets normally include: Nescafe Frappe will mainly operate in consumer markets where individuals and households that buy goods and services for personal consumption. The company will have to see that it produces products specifically designed for its target market. (Da Group. uk)19 Its marketing strategies should revolve around the customers its targeting. 2) The Segment in the UK: The targeting strategy of Nescafe frappe will be differentiated marketing. By tailoring its product to meet consumer needs more closely, Nescafe is likely to increase consumer satisfaction and generate a greater degree of consumer loyalty. tutor2u. com) 20. The target market of Nescafe frappe would be people belonging to the age group of 15-35. This includes both males and females. The target market comprises of trend setters, the youth living in the major cities of UK and who follow a modern life style. The consumer buys the product himself and can switch the product easily if provided a better alternative so brand loyalty has to be created. The target market and its features can be understood from the following table: Basis| Meaning| 1. Age| 15-35 yrs| 2. Gender| Males and Females| 4. Lifestyle| Trendsetters| 5. Geography| All major cities of UK| 6.
Purchase occasion| Mostly Self-buy| 7. Usage| Moderate to high usage| 8. Purchase behavior| Brand switching| 3) Targeting strategy: The targeting strategy of Nescafe frappe will be differentiated marketing. By tailoring its product to meet consumer needs more closely, Nescafe is likely to increase consumer satisfaction and generate a greater degree of consumer loyalty. (tutor2u. com) 21 4) The positioning Strategy: Nescafe Frappe will be positioned through: * Product attributes or benefits: This would be reflected in the advertising campaign and the creative strategy which will be as follows: The Advertising strategy:
The process of setting the advertising objectives will be very challenging for Nestle Frappe’. After extensive market research the objectives that are formed are realistic and are directed towards attaining the goals of the company. The advertising objectives of Nestle Frappe` basically comprised of sales and communication. The sales objectives that we have are to solicit an immediate response from the target market. The main reason for this is to gain maximum market share and to drive customers away from their competitors. Rex Stewart, 1986)22 Nescafe had to have an ad that increases the sales of our product and elicits immediate response. For proper distribution and to avoid the carryover effect we need this objective. For the communication objective Nescafe will have to use the integrated marketing communication model which simply starts from the customer and works back to the advertiser. Nescafe will first try to measure the purchase decision and at times when they won’t be able to do that they will take a step back to the partial transactions, which represents’ some action that the potential buyer has taken that signals it intent to buy.
If not successful in this stage then Nescafe will take a step back to the relationship of customers with its brand. And still if it does not reach the customers Nescafe will take a step even further, and measures the attitudes towards the brands and networks at the beginning of the process. At whatever level it is it can isolate advertising effects in the Integrated Marketing Communication model. That is where we start to establish meaningful objectives. The creative strategy:
The creative strategy is the plan that defines three advertising efforts: the art direction, the artistic design of the ad; the production values, the various audio and visual components and stylistic touches that make up the ad and the copy platform. (Laura Lake) 23 The basic problem that the advertising will help us to solve is the informing the consumers of the launch of the product, with some value added to it. The advertising objectives as already stated are to make the people aware of the product that is prompt a direct action, to relate the product to the needs and lastly to modify the attitude.
Talking about the description of the product, it is a golden colour can with very beautifully engraved title “Frappe`” attached to it . The drink is very light energy drink and what’s great about it is that it is very healthy as it has milk. The target market that we are focusing on has been discussed previously so we will just mention it very briefly over here. It covers people from 15 to 35 years of age, both males and females and we will initially launch it in the major cities of UK and once we gain a major chunk of market share in these cities we can consider expansion.
The product’s major competitors are Starbucks, costa, Mac Donald’s but as far as its advertising is concerned Frappe does not have any intense competition to face. Its competitors don’t do much advertising however, if frappe` takes the initiative they might also indulge into it in order to survive in the market. The product has many strengths but one of the unique attributes of this energy drink is that it is healthy and light at the same time. Milk never so delectable before! Secondly, the brand name attached to it makes the product’s attributes more authentic. It is a eliable brand that possesses Brand equity so all these are enough for motivating the consumers to buy frappe`. Coming to the selling style of Adopted by Nestle Frappe’, company has been advised to adopt a soft-sell advertising style which is more subtle approach. This will simply create a demand by trying to create a situation in the audience’s mind that will definitely lead to the product’s purchase. The ad will specifically show how the target market is consuming the product in their everyday life and will also show that how people can apply it to different situations.
Next is the appeal that is connected to the product frappe’. Nescafe knows that to be a successful advertiser it must have an appeal that corresponds to the target customer’s buying process. The appeal that can be used by them is the testimonials whereby they can show the real users of frappe’. The company can show their experiences with frappe’. Being a manager I think a testimonial which is executed efficiently is powerful advertising because the core message comes out from the satisfied customers. As far as the headlines are concerned the company can use offbeat and curiosity headlines.
Nescafe can play with words and humour so that the ad becomes more appealing for the consumer. Along with the headlines it can also use a slogan for frappe` which basically tells a lot about the product users. It is “Snip and Sip”. This slogan clearly tells the target market frappe` is targeted towards. * Positioning of Frappe using perceptual map (Jency Mariam) 24, shows Nescafe Frappe is a light drink with a good taste. Good taste Good taste Moderate taste Moderate taste FRAPPE Heavy drink Light drink FRAPPE Heavy drink Light drink * Positioning by product users:
The target market will be highlighted in the advertising campaign * Positioning against an entire product category: Cold coffee is made out of milk therefore, promoting it as a healthy energy drink makes it stand in front of other energy drinks in the market made out of milk. 5) Buying behaviour affecting their marketing activities: First and foremost, Nescafe Frappe must design its drink to meet their customers’ wants and needs, but understanding certain aspects of consumer behaviour can help as well. For instance, it is important to understand people’s motives (i. e. what drives them to buy), it’s very important for the marketers to change their marketing strategy with their target customers requirements (udel. edu)25. Marketers will have to see their target customers attitudes (i. e. , how they feel about a product or service), and their perceptions (i. e. , how information about that product or service fits into their world view). Knowledge about these psychological characteristics helps firms discovers different groups within the market place and to design and provide products/services that this group wants and needs. (Ries and Trout, 1972)26 6) Distribution strategy of Nestle Frappe:
Distribution of Nestle is already in place and so the company will continue with its existing distribution activities and will not face any major problems in adapting this structure for FRAPPE as well. Nescafe Frappe will initially be distributed in major cities of UK like London, Birmingham, Cardiff, Sheffield, Cambridge, Leeds and more and as it gains popularity the distribution will be extended UK wide. The product will be available in all the major retail stores like Tesco, Sainsbury’s, Morrison’s, Ice land, Asda, Cooperative and all the service stores. 7) Pricing Strategy: Nescafe is an established brand known for quality production.
For the pricing strategy the brand should initially be sold at discount policy where by fixing the price below of its competitors like Starbucks, Costa and Marks and Spencer Italian coffee. The price will be ? 2. 50. Later on after capturing enough, market share, it can also consider competitive pricing which is Setting the price of a product or service based on what the competition is charging. (investopedia)27 8) Promotional Mix: After identifying the target market and defining the positioning strategy we now need to design the marketing or the promotional mix for Nescafe frappe.
It represents the particular combination of communication mediums to be used. The Marketing mix designed for the launch of Nescafe frappe includes both above the line method of advertisement and below the line methods. They are as follow: * Television Advertisement * Radio * Bill boards * Newspaper and Magazines * Distribution The Push and Pull Strategy: As Nescafe frappe is a fast moving consumer good therefore it will be sold through the traditional distribution channel i. e. from the manufacturer to the whole seller and from the whole seller to the retailer and then to the final customer.
Therefore the push and pull strategies will also be taken into account when deciding on the campaign planning. Pull Strategy: The strategy includes all communication directed towards the final consumer. The aim of this strategy will be to create brand awareness; short internal information search; generate trial/experimentation of the brand; change the attitude/future intention of the consumers and have a long term impact on their behavior. The advantages and possible media options for the pull strategy the following table can prove to be useful: Mix Element| Advantages| Media| Advertising| * Reaches a large number of people. Builds Awareness * Establishes the main brand andThe product’s positioning in the consumer’s mind. | * Television(Terrestrial and Digital) * Newspapers(National Daily Newspapers, Sunday Newspapers) * Magazines (Specialist) * Internet (E-mail, Search Engines, Specialist sites) * Outdoor(Billboards) * Transport (Buses)| Public Relations| * Tends to be seen as a credible source as it does not come directly from the brand, but it is from a third party. * It is a comparatively cheaper way of promoting the brand. | * Events(Launch ceremony for example a fashion show, concert etc. * Speeches(Speeches by the company’s executives at different events can build the brand’s image. ) * Sponsorships (Celebrity endorsements) * Identity Media (Website, logo etc. ) | Sales Promotion| * Can stimulate quick increases in sales by giving incentives. * It is a good short term tactical tool to be used whenever sales need a boost. * It is also effective in changing consumer behavior towards the brand. | * Samples / Free Trials(Offer free samples or trials at the time of launch. ) * Price Packs(Reduced price packs. ) * Prizes (Contests)| Push Strategy:
The push strategy is aimed getting the confidence of the retailers and distributors and encouraging them to stock the brand in large numbers. This includes giving them incentives of different kinds or providing them with support in point of sale branding or in carrying out their own promotional campaigns to attract customers. This is all about acquiring more shelf space than the competitors. The options and their advantages are given below: Mix Element| Advantages| Media| Advertising| * Makes the retailer’s shelf space looks nice. * Builds awareness about the product benefits amongst the retailers. * Trade Press(Retail magazines etc. ) * Internet (E-mail, Search Engines, Specialist sites) * Outdoor(Billboards)| | | * Transport (Buses)| Public Relations| * Builds strong relationships with the retailers and the distributors. | * Press Conference(To introduce the product to the distributors and the retailers. )| Sales Promotion| * Gives incentive to the retailers and distributors to stock the brand. * It is also effective in changing consumer behavior towards the brand. | * Sales Contests(Prizes given to retailers on the basis of their sales. ) * Trade Promotions(Price Off, Allowance, Free goods.
Allows the retailers to run their own promotions. )| Evaluation of the strategies: For the pull strategy, the first element of the promotional mix that is advertising through TV, radio, newspapers and outdoors will be used. Before the product launch a seminar can be conducted to create the initial awareness amongst the potential consumers as well the retailers and distributors. This will serve both the Pull strategy and the push strategy while staying within the budget. 9) Extended marketing mix: This part of the marketing mix focuses on the service marketing products which have become more important than the product itself. Learnmarketing) 28 People An essential ingredient to Nescafe Frappe will be the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organisation wants to obtain a form of competitive advantage. (lean marketing)28 Consumers make judgments and deliver perceptions of the service based on the employees they interact with so in order to cater to that the Staff at the retail outlets should have the appropriate interpersonal skills, aptitude, and service nowledge to provide the service that consumers are paying for. Process Refers to the systems used to assist the organisation in delivering the service. (Learnmarketing)28this will not be a problem for Nescafe, the brand comes under Nestle and the process of the company are very efficient. Goods are delivered on time all over the UK. Physical Evidence: Physical Evidence is the element of the service mix which allows the consumer again to make judgments on the organisation. (learnmarketing) 28.
Nescafe would have to see that the product when distributed to the retailors is placed well so that the consumers do not miss out on it and are motivated to buy it. Part B Kellogg’s Marketing Mix For more than a century, Kellogg Company has been dedicated to producing great-tasting, high-quality, nutritious foods that consumers around the world know and love. Kellogg’s Company is the world’s leading producer of cereal, as well as a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, frozen waffles and vegetarian foods.
The company markets more than 1,500 products in over 180 countries and some of the famous products Keebler, Pop-Tarts, Eggo, Cheez-It, Nutri-Grain, Rice Krispies, Morningstar Farms, Famous Amos, Special K, All-Bran, Frosted Mini-Wheats, (Kellogg’s, 2008)31. Kellogg’s has a different marketing mix for almost all its brands and the target market for some also varies. For example the marketing mix of Special K cereal is different from the marketing mix of its snack Cheez-it. The target market for the both products is also different.
Special K is marketed towards the people, especially women who want to be in shape and Cheez-it is a light healthy snack targeted towards all age groups especially children. Below I will show how the marketing mix of both the firms differs. The marketing mix of Special K cereal bar: Product: A ready to eat cereal bar that meets the needs of all those women who have been keen to lose their weight. The growth in healthier lifestyles gave the company an opportunity to make this product. (time100. uk) 32 Price:
Kellogg’s charges a premium price for this brand because of its uniqueness and already established brand name. (times100. uk) 32 Place: The product is stocked in all the super markets of UK, so that sales are not lost. (times100. uk) 32 Promotion: This product has been heavily promoted by advertising below the line and above the line, moreover on-pack promotions and samplings are also done. The company also marketed the product by making special k diet plans for people through a website. (times100. uk) 32 The marketing mix of Cheez-it differs.
Product: it’s a healthy cheese snack that can be eaten anytime especially during afternoons, segmented towards all age groups especially children. Price: the product is not very highly priced because of high competition. (Kellogg’s, 2008)33 Place: the product is distributed to major supermarkets. There is a similarity in the distribution. (times100. uk) 34 Promotion: Not promoted through advertisements only offers through on-pack samplings and promotions. Difference in B2B and B2C marketing In the business world a well-executed marketing communications is a shortcut to better relationships between a company and its customers.
Although in both business to business and business to consumer marketing a product is being sold but the way it is marketed is completely different. When selling a B2B product customer’s emotion do not count, customers entire focus is on the product features on the other hand in b2c marketing marketers try to influence their customers through emotional means as well. The B2B market has a thirst for knowledge and they are information seekers while a customer in b2c market is interested in what benefit the product will have for him.
He will want to hear more about how their product or service helps him and what benefits it brings to him personally. (laura lake)29 For example: We can assume that a marketer is selling a moisturising lotion which cures acne. For b2b marketing he will have to tell the customer which ingredients he has used for the cure of acne as for the b2c marketer, he will tell customers the benefit that it removes acne. Below is a chart that explains the difference between both the markets in more detail. Table a Major difference between business and consumer markets Characteristic| Business arket| Consumer market| Demand| Organizational| Individual| Purchase volume| Larger| Smaller| Number of customers| Fewer| Many| Location of buyers| Geographically concentrated| Dispersed| Distribution structure| More direct| More indirect| Nature of buying| More professional| More personal| Nature of buying influence| Multiple| Single| Type of negotiations| More complex| Simpler| Use of reciprocity| Yes| No| Use of leasing| Greater| Lesser| Primary promotional method| Personal selling| Advertising| Source: Summers et al. (2003, p. 75) International and domestic marketing:
International marketing differs in a lot of respect from the domestic marketing and I will prove that through various examples. Firstly, when organizations are operating domestically, they only need to take account of the factors that exist in the domestic market whereas global companies need to adjust themselves differently in different countries. Difference with respect to the country’s culture, ethics, environment, beliefs, religion and regulations. Domestic marketing means that companies sell products within a local financial market. They deal with only one set of competition and economic issues which make it more convenient to do.
There are no language barriers in domestic marketing and obtaining and interpreting data on local marketing trends and consumer demands is easier and faster to do. International marketing refers to business activities that direct the flow of goods and services of a company to consumers in more than one country for profit purposes only. (Arons, Marc De Swaan) 30. International marketing requires more effort and research and the companies with insufficient research do suffer. For example, Starbucks entry in the Chinese market was not very pleasant as coffee culture was not a part of the Chinese market.
Chinese people preferred drinking tea rather than coffee. For this reason, Starbucks had to introduce tea in the Chinese market however, one or two types of tea are just not sufficient for the market as big as China. Currently although Starbucks is operating in China but it needs to add in more to its menu (tailored made) if it wants to remain in the business and does not want to die away like a fad. If the company plans to enter markets like India and Pakistan, it will have to adapt to the environment of that country to avoid such closures in future.
For example, Pizza Hut has a different marketing strategy for each country it operates in. The Pizza flavours like Tikka kebab it offers in Pakistan are not offered anywhere else in the world. Starbucks does not adapt its products when considering entry into international markets to the extent that it should. Moreover, the marketing strategy for Mac Donald’s is different in UK and very different in UAE. In UK, sandwiches are made according to the customers here, patties are less spicy and its menu is different from what it is in U. A. E. In U. A.
E, the food that they sell is Halal, so the religious factor is taken into account, moreover, Patties are a bit spicier and the menu is according to the Arabians taste. Mac Donald’s menu is very different form UK in U. A. E. Part C Impact of (new developments) in I. C. T on marketing ICT is an acronym that stands for Information Communications Technology. Today Information and communication technologies (ICTs) are considered important for creating competitive advantage (Paulina, George and Nikolaos, 2007)35. “ICT covers any product that will store, retrieve, manipulate, transmit or receive information electronically in a digital form.
For example, personal computers, digital television, email, robots. ”(tutor2u) 36 So ICT is concerned with the storage, retrieval, manipulation, transmission or receipt of digital data. Importantly, it is also concerned with the way these different uses can work with each other. ICT in marketing has come of age and organizations of various sizes employ various ICT techniques. There has been an increase in internet users world over especially Europe and USA, so if companies no matter if they are small enterprises or multinationals, use ICT in marketing, will boost their sales. webstatistics. com) Basic use of the Internet includes online presentation of the firm, its products or services, and simple information exchange via email. Advanced use of the Internet assumes more sophisticated two-way interaction and data processing, and includes online ordering and payment, collecting feedback from customers and integrating the homepage with the firm’s internal functions (Bengtsson et al. , – 2007)37 There are various ICT tools that firms use in marketing and are successful.
Some of them are mobile marketing; Companies like Lyca talk, Dial a Phone, debt management and a lot more use this tool for marketing their services. Another tool is email marketing wherein companies email about their upcoming products and offers. Mobile banking is another tool and all UK banks use this facility now. ICT has had a remarkable impact on the marketing of firms and has become a core part of their marketing strategy however, ICT is just a tool in marketing and emphasis should be more on a market orientation not just the tools.
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