Last Updated 11 Feb 2020

Operational Functions and the 4 P’s of Marketing

Category Customer, Monopoly
Words 1188 (4 pages)

Lecture 1: Introduction to Marketing

Marketing is the management process responsible for identifying, anticipating and satisfying customers" requirements profitability.

Peter Drucker 'there is only one valid definition of business purpose: to create a customer". At its simplest, if you do not have any customers for the product or service your organization offers, then there is no reason for continuing existence.

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Consumption is the sole end and purpose of all production and the interests of the product ought to be attended to only so far as it may be necessary for promoting those of the customer.

The operational functions of marketing: sales promotion, advertising, public relations, selling, financing, buying, forecasting, pricing, standardization, publicity, merchandising, market research, transporting, risk-taking, servicing and stockholding.

Elements over which organizations have control and which are used to try to influence customers to choose one particular organization in preference to another are generally termed the marketing mix. External factors in the original marketing mix: customer-buying behavior, trade behavior, competitors" position and behavior, government regulations.

Originally there are 12 P"s of marketing but this list is not easy to remember and it should be obvious why Jerome McCarthy condensed the 12 items in Borden"s original marketing mix, into 4 major categories popularized the '4 Ps". The internal variables are therefore loosely grouped together under the headings of: product, price, place (the offer mix), and promotion (the promotional mix).

While the '4 Ps" is a useful framework, a vigorous debate has taken place over the last decade about the dangers of seeing marketing solely as the control of the '4 Ps". In fact it is a trap that tends to make suppliers forget the needs of customers as well as the importance of a mutually beneficial exchange. There is a suggestion of the addition of three other Ps: Probe (research), Partition (segmentation) and Position.

Lecture 2. The Marketing Macro Environment.

Both of the parties making an exchange are more likely to consider that the exchange has been beneficial when the exchange has been made within the context of what is known as an Open Market. This is a market which has all of the following characteristics: 1 Single homogeneous product, 2 Many buyers, 3 Many sellers, 4 Buyers and sellers have equal access to all available information relevant to the market.

All developed societies have similar regulations to regulate legal trade. It is therefore usual for manufacturing and trading organizations to have to comply with such regulations, which effectively constitute one aspect of the environment in which an exchange takes place. These factors are for this reason referred to as the environmental variables of marketing. These are usually labeled the Economic, Social, Technological and Political variables (STEP).

Companies should seek to demonstrate good corporate citizenship by upholding the letter and the spirit of the law, and generally behaving in a responsible and responsive manner. Some markets and trades have developed general voluntary codes of conduct and control, supported and monitored by a central membership body. Medicine for example has long been controlled by strict codes of professional behavior.

Governments have developed a body of legislation and enforcement frameworks in respect of industry and trade. In particular, the following areas of control are of direct concern to business. 1. Legislation in respect of monopoly and competition standards. In the UK it"s done through the Office of Fair Trading and the Monopolies and Mergers Commission. As a full EC member, the UK is also subject to Community provisions in respect of issues: in particular Article 85 of the Treaty of Rome concerns practices hindering competition. 2. Measures to protect consumers, whether as groups, individuals, as users of certain products and services, or particularly as targets for business activities.

Relevant legislation has included the Trade Descriptions Act 1973, the Consumer Credit Act 1974, etc. Number of these statutes introduced measures directly relating to marketing practices such as pricing claims, warranties, product quality, etc.

The economic environment is a complex network of international, domestic and regional influences and dependencies that shape the market potential facing companies. Company performance itself will depend critically on the quality of preparation and decision making is brought to bear on this potential. The significance of the economic data is that over time they will indicate major economic developments of direct interest to marketers. Such 'economy-watching" may enable the vigilant company to respond in time to scenarios such as following:

1.Recession. A downturn in economic activity of variable intensity. Usual indicators will be a fall or leveling in GNP, GDP, household income, etc. Rises will be recorded in measures such as stock, unemployment and company bankruptcies.

2.Recovery. The opposite of the above. Marketers in some sectors will benefit from an early upturn in sales. Major upturns in economic activity may result in 'overheating" with higher costs and prices.

3.Inflation. Rising prices may be associated with buoyant conditions, demand growth and shortages. Economic policies are likely in future to be more directly influenced by multilateral agencies and agreements (UN) and the expansion of common market blocs such as the EC.

Culture within any society id the complex of elements that reflect the society"s beliefs and values, preferences and behavioral norms. For marketer it is necessary to understand that culture will vary within and between societies, so those cultural norms may vary between countries, regions and culture groups. Factors, which distinguish a society, change very slowly, as they are the products of family upbringing, the education system, national history and political development, religion, etc. Environmental awareness is an interesting reflection of how society-wide concerns have delivered a powerful message to governments and business leaders.

Technology is the touchstone of economic progress, a leading source of competitive advantage commercially and an indispensable part of everyday lifestyle for the modern consumer. To illustrate the competitive force wielded by technology, it is worth observing that many manufactures have been affected by technology developments remote from their own field. Major sectors of the metalworking industry were obsolete by the developments of digital electronics. Eg typewriters. Technological developments decrease the price of production. Technologies have also enabled an increase in the variety of products available to customers.

The marketing environment comprises the playing field upon which competitive marketing takes place. Companies need to monitor and decide rational responses to changes in the environment in order to win their colors. There are three types of companies: those who make things happen; those who watch things happen; and those who wonder what happened.

Lecture 3: Markets and Market Segmentation.

1.A market is an aggregate of people who as individuals or organizations have needs for products in a particular product class and who have the ability, willingness and the authority to pay.

- Consumer – where purchasing is done by private or group of individuals.

- Industrial – products and services are bought for one of 3 specific uses: 1- resale, 2- producing other products, 3- products used in general eg administration, computers.

3.Differentiated markets. – Consumer needs are not the same: - homogenous, differentiated. Undifferentiated market – all needs are the same

4.Criteria for effective segmentation - measurable, - economically variable.

Geographic – geographic position on the globe.

Demographic – basis for the collection of many government statistics and the standard system used by the media industry. Includes age, sex, family cycle, and socioeconomic segmentation.

Operational Functions and the 4 P’s of Marketing essay

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