Steve went on to define marketing as:
“A process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational objectives.”
This definition encompasses many different core business functions and suggests that marketing is in fact one of the most important functions of any modern business. This concurs with the views of McCarthy (1964) who defined a framework, the 'Marketing Mix' or 4Ps which is still widely used today as a tool for decision making in marketing. I will refer back to this in a later post, but there is various 'groundwork' to do first...
Steve went onto show a diagram explaining the marketing process overview shown below:
Analysis – Market Research
The first stage of designing any marketing campaign is gathering market research which can later be used to analyse:
1 The marketing environment
2 Buying behaviour
3 Competitors
There are two types of market research data, primary and secondary. Primary data is that gathered by directly asking questions using focus groups, questionnaires, or interviews. Secondary data comes from third party sources such as government reports, internet research, commercial data or websites such as Mintel or Emerald.
Making the right decisions about what market research to gather and from where can be complex, however using the table provided by Steve, I have identified the following for my business:
External Environmental Analysis - PEST
Market research should highlight key areas of the Macro factors affecting an organisation, as these factors have significant influence over the success and growth of new and established companies. A traditional method of analysing the Macro environment for a company is a PEST analysis, this covers the following factors:
Political – legislation, enforcement, trends
Economic - spending patterns, industry growth, demand for goods/services
Social – demographic, trends, culture
Technological – new technologies and the pace of change
Market research completed for my business The Ethnic Diet Association shows the following:
Business Buyer Behaviour
Steve suggested that business to consumer, and business to business (b2b) sales differ in terms of the selling process. As my business is b2b this market is defined by:
1 Few purchasers
2 Larger buyers
3 Close relationships with suppliers
4 Inelastic demand
5 Professional purchasing
6 Several buying influences
Competitive Sweep
Understanding the competition is essential for any business, and market research can offer some excellent insights into the strategies others employ, ultimately allowing for an appropriate market entry strategy to be formulated in the case of new entrants.
Key issues Steve suggested need consideration are:
1 The number of sellers – how many competitors
2 Degree of differentiation – how different are the products
3 Entry and mobility barriers – is this a difficult market to get into due to cost or qualifications?
4 Cost structures- comparing the costs of you and your competitors.
5 Vertical integration – are you able to penetrate a market.
Using the research techniques explained previously the following findings have been found for competing companies for my business, The Ethnic Diet Association:
Market Segmentation
Irrelevant of industry or size, companies should always segment the market in order to ultimately ascertain their target audience, i.e. those who are most likely to purchase their product or service. Basic methods of market segmentation include:
1 Geographic location
2 Area of operation
3 Purchasing potential
How best to segment, enter a market and gain competitive advantage leading to profit is often determined by assessing competitors within a market, and how influence/power from different areas affect levels of competition. This theory was devised by Porter (1985) as his 5 forces theory, see below:
Having established that for my product there are no directly competing products, although the threat of substitutes is high due to copyright infringement, I concluded that there would few barriers to entry, relatively low level of competition within the ethnic niche, although competing with larger established brands will be difficult at first, due to a lack of credibility and reputation.
Recommend Links:
• Market research – www.britishchambers.org.uk (Chamber of Commerce) and www.marketresearch.org.uk
• Data Sources – www.statistics.gov.uk and www.mintel.co.uk and www.yell.com
• Marketing – www.cim.co.uk (Chartered Institute of Marketing)
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