Business Environment Hnd
Marketing is a process used to satisfy and consider what products or services are needed by the consumers. There are many alternative definitions of marketing such as the charted institution of marketing “Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably”. The American Marketing Association believe that “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organization goals”.
Philip Kotlerinterprets that marketing is 'satisfying needs and wants through an exchange process the common interest in all three definitions is fulfilling customer needs and providing benefits The small business enterprise that I have chosen to discuss is called ‘Hair Today ‘this is a professional hair salon that is situated in the heart of Kentish town for over 30 years. Hair today has a total of 20 employees, including hairstylists, hair washers and administration staff, including a cashier.
The salon offers many services such as styling hair, men haircuts, colouring, perming. The marketing process consists of four elements Situation Analysis, Marketing Strategy, Marketing Mix Decisions and Implementation ; Control. Situation analysis is when through an analysis the company finds the customer needs but in order to do this the company must recognise its own potential and the environment in which it is managing.
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Situation analysis should look at all the factors of the company such as the past where the company is now and where it should be in future. This analysis provides problems there are frameworks which help the situation analysis such as SWOT and PEST analysis. SWOT analysis refers to the strengths, weaknesses, opportunities and threats facing a business The marketing strategy is to ensure the target market is being pursued. The strategy consists of segmentation, targeting and positioning the product within the target market.
Marketing Mix Decisions at this stage detailed decisions are being made such as the development of the specific product, designing and producing the first pieces of the product and also pricing decisions Implementation and Control is the final stage of the marketing process the results of the marketing progress should be monitored when the market changes the market mix can also change to adapt to the consumer needs as time goes on a new product can even be produced although this is the last tage of the marketing process changes will always occur to satisfy different consumer needs Companies continue to exist by achieving their long-term goals. Market orientation helps to achieve the business goals and objectives a business which adopts market orientation thinks that it’s most important resource are its customers. The benefits of adopting market orientation for ‘Hair Today’ is that through market research the hair salon will have a strong understanding of the needs of the customer.
Customer feedback is vital to the company companies tend to be too involved with the product that they forget about the general customer satisfaction for example hair salons have a wide variety of market reach and also a great deal of competition. The costs of adopting marketing orientation for ‘Hair Today’ would be the high costs for the market research this the constant internal change as needs of the customers are met. Macro environment are the outside uncontrollable factors that may affect a managers decisions this can have an effect on the company the PESTEL model framework is used.
Political factors such as government policies and the economy also new laws on small businesses Political factors can have a huge effect on many areas for business like education and the quality of health care. The hairdressing industry is having difficulties recruiting although some government funding policy has helped it has a vacancy rate of 20% also the government increased the taxes for businesses this has had a huge effect. Economic factors influences marketing research such as interest rates also the changes in the economic growth and exchange rates.
All businesses go through an economical ups and downs in an economic boom all businesses will benefit although if can go down and businesses can lose out. Currently hair treatment products are not considered a necessity more of a luxury so this market is dependent on how strong the economy is. Cheap credit and interest rates benefited the hair industry in the past. Social factor refers to behaviour patterns and lifestyles. Changes in consumer behaviour can also have an effect on changes in fashion . Currently we have an ageing population. Social change gives companies a understanding for the future market situation. Hair Today’ will have to keep up with the latest fashion and styles which may vary between ages. . Technological changes are the amount of new technology that is increasing electronic communications has made it easier to distribute information. Hair salons must keep up with the new trends and technology as this helps develop the company and make them more successful Employees will research the newest technologies in the market do some experiments use models try new haircuts if the experiments turn out to be a success it will apply to salon.
Micro environment are factors which are internal this affects the business performance such as customers, competition, suppliers, public, employees and stakeholders. If a company decided to move to a public ownership they list their business in the stock market so the public can invest in the company although share holder relationships must be professionally managed to succeed long term goals. Identifying the stake holders Potential stakeholders at ‘Hair Today’ Your boss | Shareholders | Government |
Senior executives | Alliance partners | Trades associations | Your co-workers | Suppliers | The press | Your team | Lenders | Interest groups | Customers | Analysts | The public | Prospective customers | Future recruits | The community | Your family | | | Some stake holders are more interested and involved than others to narrow down the people a power/interest grid is used. The grid shows that the people that have the high power and are more interested in my company these are the people who I will engage with and make great efforts to satisfy.
Corporate culture determines how the employees and higher management interact these transactions occur over time. ‘ Hair Today’ has an employee friendly corporate culture it is shown by the company’s dress code, flexible working shifts , employee benefits such as employee discounts the treatment of the clients and overall client satisfaction. Porters five forces was first introduced by Michael E. Porter of Harvard Business School in 1979 the five forces are a framework to help businesses determine the rivalry intensity and industry profitability of a market.
The five forces consists of threat of mew entrants to a market, the power of buyer, the power of the suppliers, the threat of substitute products and the competitive rivalry between already existing companies as shown in the diagram below. Segmentation is the process where larger markets are broken down to smaller segments this will make it easier to understands the wants and needs of the customers the overall outcome would be creating a marketing mix that is suited or the customers in the target segment. The four main factors of segmentation are behavioural, demographic, psychographic and geographical.
Geographical segmentation is segmented by country, city or neighbourhood. Age, family size, income, occupation, education, ethnicity and religion can all be segmented demographically. Lifestyle, interests refers psychographic segmentation. Behaviour segmentation refers to customers buying behaviour, product mix also frequency of purchase the best form of segmentation is using all four factors as they all are very helpful. Hair salons have a wide variety of customers to attract therefore segmentation is very vital for this business to succeed in the future.
The two products or services that Hair today will provide a bridal service to attract female customers where they will be pampered and receive a makeover the target market for this service is female aged 20-35 with a balanced income also the other product I will be proposing hair is extensions this will attract the teenage customers and women. The marketing strategy I have chosen for Hair Today is concentrated strategy focussing mainly on only one segment this can be positive for the salon because the business will have more knowledge on the particular segment.
Females aged 13-19 there are many teenagers in this area which the salon is situated this is due to the schools in the area. Hair Today believe that the target segment will benefit from the service of hair extensions as this is a growing fashion although there can be a lot of competition which leads to Threat of intense segment rivalry. New salons may decide to open up this refers to the threat of new entrance also there are many products already provided in the market that teenagers can use themselves so the salon is not needed this is known as threat of substitute product.
The threat of growing bargaining power of buyers is very important because the higher the charges the more likely the customers are to move to a cheaper salon. Buyer behaviour is attitudes of the customers and how often they purchase. Buying behaviour involves the process in which a customer finds a product studies the product and makes an overall decision on whether the product meets the customer’s needs and wants.
The main types of buyer behaviour are consumer and industry two types of buying behaviours are impulses purchases refers to when a purchase is made with no plan this purchase is associated with items of lower prices. Extensive decision making these are products which are higher priced such as TV and cars when customers research as much as they can they may also ask family and friends for advice or read reviews this decision making takes up a lot of time because the customer is purchasing a product that is high priced Buyer behaviour stimulus response model
Buyer behaviour is essential because it makes you understand what your customer. Market research and producing surveys will help you find the customers’ needs and requirements. Social media sites are the most popular process in business marketing this allows customers to interact online and new products can get instant feedback. Many businesses introduce discounts to maintain loyal and consistent customers. Companies determine how much customers spend the products which are being sold and judging on how often customers are spending helps introduce a pricing policy for 'Hair Today'.
Hair extensions portray varied opinions some customers keep up with new trends and may want a different look however other members of the community might find it doesn’t fit their customer needs. Hair today will start this positioning process by advertising on the internet and offering hair treatment for all types of hair also free samples of exclusive hair products. The hair industry are forever striving to keep up their image and keep their product current a change in positioning can attract new target market. References Assael, H. , Reed, P. nd Patton, M. (1995) Marketing: Principles and Strategy Harcourt-Brace, Sydney Business study guide edexcel marketing principles pp. 479-659 Habia (standard information solutions) Skills Foresight for the Hair and Beauty Sector 2007 http://www. habia. org/uploads/Skills_Foresight_2007_v. 4_-_2. 07. 07_Final. pd Lamb, W. , Hair, J. , McDaniel, C. (1998), Marketing, (4th), South-Western College Publishing, Cincinatti. Kotler, P. , Armstrong, G. , Brown, L. , Chandler, S. A. (1998), Marketing, (4th), Prentice Hall, Sydney www. businessdictionary. com
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