Element of marketing process
The success of business organisations is determined by their competence in implementing the marketing process, which is comprised of four main elements, viz. conducting a situation analysis, formulating the marketing strategy, determining the marketing mix decisions, and implementation and control (Withey 67). Kia Motors Corporation, which is based in South Korea, has attained significant market success by adopting the elements of marketing process as illustrated below.
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- Situation analysis: This process entails evaluating the micro and macro environment with the objective of determining the various factors that might affect the firm’s operations. Furthermore, situation analysis also entails determining the available market opportunities by identifying market gaps. Kia Motors has identified potential market opportunity in the motor vehicle industry due to the growing demand for vehicles and it has become the fourth largest automobile company in the world.
- Marketing strategy: This element entails formulating a strategic plan to be used in exploiting the identified market opportunity. In a bid to succeed in marketing strategy formulation, a firm must conduct effective market segmentation, targeting, product positioning, and value proposition. Kia Motors has targeted the global market in order to maximise profitability. The firm has succeeded in positioning and value proposition by creating positive product image and through high profile sponsorship.
- Marketing mix: This element involves formulating tactical decisions on product development, distribution, pricing, and promotion. The firm has invested in an effective product development by focusing on quality and design. The firm achieves this aspect through its 12 manufacturing and assembly plants. Furthermore, the firm has established an extensive distribution network by establishing subsidiaries in 165 countries. The firm has also integrated dealers into its distribution network. For example, Kia Motors UK has established over 166 dealers. On the other hand, the firm has adopted above-the-line promotion by using mass media [online mediums, print media, cinema, and television] in creating market awareness. Kia Motors focuses on achieving competitive market position through effective pricing.
- Implementation and control: This stage involves adjusting the various marketing mix components in order to cope with the prevailing market conditions. For example, Kia Motors intends to improve its distribution network in an effort to satisfy the growing market demand. Furthermore, the firm is focused at developing optimal competitiveness in some of its new markets such as the UK.
Benefits and costs of marketing orientation
Kia Motors is committed to building adequate competitive advantage by positioning itself as a market-oriented firm. The firm intends to achieve this goal by developing sufficient understanding of its target customers’ needs. Subsequently, the firm will improve the level of satisfaction amongst its customers. Marketing orientation will enable the firm to succeed in undertaking continuous product improvement by understanding the customers’ product needs (Kumar et al. 16). Therefore, the firm will succeed in offering superior customer value. Moreover, marketing orientation will enable Kia Motors to develop sufficient knowledge of its competitors, hence formulating optimal long-term capabilities.
In order to achieve optimal competitive advantage through market orientation, Kia Motors will incur significant costs in conducting market research. The objective of market research will be to enhance the firm’s marketing intelligence, which is a fundamental aspect in responding to market changes. The firm will be required to invest in an effective technological infrastructure that will enhance its capability to collect and analyse data from customers. Kia Motors will incur significant costs in ongoing investment in new products, adjustment of its operational processes, and continuous employee training. Despite the efforts made to become market oriented, Kia Motors may not achieve the desired outcome due to external influences such as intense competition in the motor vehicle industry.
Macro and micro environmental factors that influence marketing decisions
Etihad Airline’s marketing decisions will be affected by diverse micro-environmental and macro-environmental factors as illustrated below.
- Firm size: as one of the leading airlines in the world, Etihad Airways will be required to improve its distribution network in order to meet the growing demand for air travel in the global market by venturing into new markets and increasing its fleet size.
- Customers: Etihad Airlines has ventured into the global market. Thus, the firm serves customers from different cultural background. In order to develop customer loyalty, the firm will be required to integrate culture as one of its customer service training elements.
- Intermediaries: In a bid to succeed in tapping the market potential in the air travel industry, Etihad will be required to develop an effective working relationship with its agents located in different regions of the world. Furthermore, the firm will also be required to collaborate with some of the firms in which it has staked in such as Air Seychelles and Air Berlin, whereby it holds 40% and 30% stake respectively.
Macro environmental factors
- Political and legal factors; the firm will be required to adhere to the formulated rules and regulations within its respective markets such as Europe, Africa, Middle East, Asia, North America, and Australia. One of these rules relates to ensuring customer safety.
- Economic factors – the firm’s profit maximisation objective will be subject to the prevailing global economic situation. Subsequently, the firm will be forced to adjust its pricing in accordance with the prevailing economic cycles such as recession, boom, and recovery.
- Social factors – Etihad Airways will be required to adhere to diverse social-cultural components such as the customers’ norms, beliefs, and values in its marketing process. Furthermore, the airline will be required to consider the target customers’ demographic factors in formulating its marketing strategy.
- Technological factors – the ability of Etihad Airlines to offer customers premium products will be influenced by its commitment in integrating emerging technologies, for example, effective in-board information communication technologies such as the Internet and Wi-Fi services.
In a bid to succeed in marketing their products, RTA and Sharaf DG Dubai should adopt diverse market segmentation dimensions in their market targeting. Some of these dimensions include demographic, psychographic, and behavioural variables.
- Demographic variables – Sharaf DG Dubai firm should target high-income customers such as young professionals in marketing its new smartphone in order to maximise profitability. On the other hand, RTA should focus on diverse demographic variables such as gender, age, and social class in order to be successful in offering taxi services.
- Psychographic and behavioural segmentation – Sharaf DG should segment its market by focusing on the customers’ interests and values. Subsequently, the firm should target customers who value mobile devices’ speed, memory, and processing capabilities. On the other hand, psychographic market segmentation will enable RTA to succeed in marketing to families and female office goers that value comfort and safety.
Niche targeting strategy – this strategy involves concentrating on a particular group of customers. In the course of its operation, Etihad Airways is focused at attaining market leadership by becoming the leading premium company in the global airline industry. In order to achieve this goal, Etihad Airlines should evaluate the demographic factors of its target customer groups such as their level of income, occupation, lifestyle, and social status. These factors will enable the firm to identify customers who value consuming premium products and services. In order to succeed in implementing the niche targeting strategy, Etihad should invest in product innovation and continuous product improvement in order to satisfy the customers’ needs.
Effect of buyer behaviour on marketing activities
Buyer behaviour is one of the critical aspects that firms should consider in formulating their marketing strategies. The buyer behaviour is determined by the level of involvement required in the purchasing process. When purchasing new technological products such as the new Huawei Ascend P2 smartphone from Sharaf DG, consumers undertake extensive information search in order to avoid psychological risk. Subsequently, the consumers’ level of involvement is high. Thus, Sharaf DG should provide sufficient market information regarding its products. Similarly, RTA should create adequate market information regarding its new ‘In Safe Hands’ cab service in order to influence female office goers, families, and students. Thus, the two buying situations are characterised by a high degree of customer involvement in the purchasing process.
RTA positioning strategy
In an effort to make sure that its new cab service dabbed ‘In Safe Hands’ successfully penetrates the market, RTA should consider positioning itself by offering customised services. Therefore, in addition to comfort and security of its clients, the firm should ensure that the three targeted customer groups, viz. the female office goers, families, and studies are given customised services. This positioning strategy will enable the firm to succeed in offering unique customer services.
Businesses operate in a competitive environment that is undergoing remarkable change. In a bid to survive in such an environment, firms must develop adequate competitive advantage. Flydubai has managed to penetrate the airline industry since its inception in 2008 in the UAE. The firm has derived its success from investing in effective product development. This goal has been attained by investing in a number of strategies as illustrated below.
Product differentiation- Flydubai has differentiated its operations by adopting a low-cost strategy. Subsequently, the firm is in a position to provide customers with air travel services at relatively lower prices as compared to mainstream airlines. This strategy has significantly improved the airline’s product appeal and affordability to a large number of low-income consumers.
New and continuous product development – Flydubai is committed to fostering its customer base. In a bid to achieve this goal, the firm has adopted new product development as one of its strategic practices. The firm achieves this goal by incorporating new destinations and routes within its product portfolio. For example, in 2010, Flydubai integrated an additional seven routes. Moreover, the firm invests in continuous product development by unremittingly increasing its fleet size in order to meet the market needs. This strategy has played a fundamental role in improving the airline’s ability to develop and sustain optimal competitive advantage.
Distribution and consumer convenience
Distribution is one of the fundamental elements in organisations’ marketing processes. The objective of distribution is to ensure that customers conveniently access products from the market. Subsequently, organisational marketers have a duty to design and implement an effective distribution strategy. In an effort to provide customers with convenience, Flydubai has continuously increased its routes and frequency of flights. Currently, the airline serves the Middle East, the GCC region, North Africa, Central and Eastern Europe, Asia, and the Indian Subcontinent. Currently, the firm makes over 800 flights per week, which is made possible through its large fleet of aircrafts. Therefore, its extensive market coverage enables a large number of customers in the global market to access its low-cost airline services.
How prices are set to illustrate a firm’s marketing objectives and conditions
Flydubai was motivated to enter the airline industry by two main objectives, which include maximising profitability coupled with making air travel affordable and simpler. In order to achieve this objective, Flydubai has adopted a low-cost pricing strategy. Withey (43) emphasises that low-cost strategy enhances a firm’s ability to attain market leadership by providing customers with an alternative product. Subsequently, the strategy has played a fundamental role in enhancing Flydubai’s ability to attain its profit maximisation objective by attracting consumers within the low-income category.
Over the past few years, Flydubai has managed to increase its customer base substantially. For example, within a period of 3 months after its inception, Flydubai had increased its customer base to over 100,000 passengers. By July 2010, Flydubai had grown its customer base to 1 million passengers. This aspect shows that the pricing strategy adopted has played a fundamental role in attracting consumers who are experiencing significant pressure in their purchasing power due to the economic uncertainty, which is largely associated with the recent global economic recession.
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Promotional campaign adopted by Flydubai
Product awareness constitutes a critical component in the consumers’ purchasing process. Thus, it is essential for marketers to create adequate market awareness of their products and services. In a bid to achieve this goal, Flydubai has adopted public relations as one of its promotional strategies. For example, during its inauguration, the Airline participated in the Farnborough Air Show, which is an international annual event aimed as displaying airline products and services to customers. The event is planned under the leadership of the Farnborough International Limited in the UK and over 300,000 customers and investors attend it. By participating in the event, Flydubai was in a position to create awareness of its products and services to a substantial number of customers, hence increasing the likelihood of maximising sales revenue.
Elements of extended marketing mix
Marketing services is a challenging undertaking due to the unique characteristics of services such as intangibility. Despite this aspect, firms in the services industry have an obligation to maximise their profitability. Therefore, they should adopt an extended marketing mix strategy by integrating the elements of people, process, and physical evidence (Withey 49). In its quest to atttain sustainable competitive advantage within the low-cost airline industry, Flydubai has adopted an extended marketing mix as examined below.
People – the firm is focused at providing customer with unique and relaxing customers. In a bid to achieve this goal, Flydubai has developed a well experienced and trained human capital base, which ensures that customers are served efficiently. For example, the firm’s has employed over 500 in-flight service attendants and over 300 pilots. These personnel play a fundamental role in ensuring that customers flying to different destinations are served effectivley. One of the elements that the firm focuses on is customer safety. Subsequently, the firm continuously trains its employees in order to impart them with necessary knowledge and skills. By focusing on the element of people in its marketing mix, Flydubai has been in a position to increase and retain its customers.
Physical evidence – this element is used in describing the image that an organisation intends to communicate to its customers through its physical presence, appearance, and equipments (Withey 52). Flydubai intends to provide customers with relaxing services in addition to making air travel simpler. In a bid to achieve this goal, the airline ensures that its aircrafts are modern and technologically equiped. For example, the airline’s fleet is comprised of over 50 Boeing 737-800 NG aircrafts. Furthermore, the airlines physical evidence is illustrated by its over 800 flights per week to different destinations.
Process – this element explains the processes that an organisation undertakes in order to develop positive perception amongst its customers. Flydubai ensures that its flights are coordinated effectively, as evidenced by its ability to conduct over 800 flights per week to different destinations.
Marketing mix for Flydubai market segments [Asia segment and Gulf segment]
In a bid to succeed in marketing its airline services in these two market segments, Flydubai will adopt the following marketing mix.
Product – the airline intends to establish a return new route to China and Doha.
Pricing strategy – the air ticket for a flight to and from Dubai and Beijing will be set at $ 543. On the other hand, the ticket for a flight to and from Dubai to Doha will be set at $185.
Promotion – Integrated marketing communication will be used by creating market awareness. Subsequently, the firm will adopt different marketing communication methods, which include advertising, public relations, and personal selling. Advertising will be conducted using print mediums, television, online mediums, and radio.
Distribution – the airline will be making 10 flights between Dubai and Qatar and 5 flights between Dubai and Beijing.
Physical evidence – the flights will be conducted using six Boeing 737-800 NG aircrafts.
Process- effective flight scheduling will be adopted in order to maintain the frequency of the flights.
People- the airline will provide customised in-flight services by observing the passengers’ cultural background. This aspect will enable the airline to develop customer loyalty.
Differences between marketing to organisational and individual customers
Decision-making – marketing to individuals involves influencing the opinion a single consumer while marketing to institutional customers is complex, as the marketer has to influence the decision-making unit.
Buyer behaviour – marketing in business to consumer is aimed at influencing the consumers’ emotion. On the other hand, business-to-business marketing is task-oriented as opposed to emotional-oriented. Business consumers may assess different elements such as product cost, usage, and productivity.
Buyer-customer relationships – when marketing to organisations, a firm seeks to establish strong relationships using personal selling through sales representatives. On the contrary, mass media is mainly adopted in marketing to individual customers.
Differences in international marketing
In a bid to succeed in international marketing, it is imperative for an organisation such as Flydubai to develop a comprehensive understanding of the cross-border differences between the local and its target foreign market. Some of the aspects that the firm should consider entail understanding the target customers’ values, opinions, norms, and beliefs. Taking into account these elements will enable Flydubai to be effective in developing a product that aligns with the customers’ cultural dimensions.
Kumar, Vrushmar, Eli Jones, Venkatesan Rajkumar, and Robert Leone. “Is market Orientation a source of sustainable competitive advantage or simply the cost of competing.” American Marketing Association Journal of Marketing 75.4 (2011): 16-30. Print.
Withey, Frank. CIM coursebook 03/04 marketing fundamentals, New York: Routledge, 2013. Print.