Market Essay Example

  • Category:
    Marketing
  • Document type:
    Case Study
  • Level:
    Undergraduate
  • Page:
    3
  • Words:
    1958

COURSE TITLE: MARKETING

  1. Intangibility, inseparability, variability and perishability are four factors which distinguish the marketing of services from product marketing since these characteristics affect the buying behaviour of customers during the buying process and any organization offering these services must be aware of them. Service marketing professionals should be fully aware of these characteristics of how they affect the customer buying process to ensure success of their businesses and use them to influence the development of suitable marketing strategy mix from pricing, distribution and bundling of the services so as to ensure proper delivery to the consumer.

Intangibility

Services can’t be seen, touched, stored or possessed and it is difficult to access their value. The value of the service can take long for the client to actually feel the promised benefits of the service with some taking up to years to unlock these benefits. For example the South west airlines have a service whereby customer lost items can be reported and a guided search performed so as to help to reunite the item with the customer. Customers can’t enjoy this service unless they have lost an item during one of their trips and it can take long since always customers take good care of their belongings. Marketers must clearly demonstrate and communicate the variables of the services so as to increase customer confidence with clear quality of the service, pricing model, and the pricing model and promotion with the view of improving customer relationship.

Inseparability

This means that the production and consumption of services cannot be separated. For example in the case of South west airlines, the production of the air travel cannot be separated from the consumption of that service by the consumer. This nature of services poses a challenges service providers since during the production the client is present and they often require the service to be offered in a certain way or by a certain individual. Marketers usually overcome these challenges by constantly engaging the client in the production process, constant communication and identification of certain levels of personalization of the service the organization can offer to the client.

Heterogeneity/ Variability

Service quality is often subjected to great variability during their delivery to the client because these services are offered by people and it is difficult to control people’s behaviour. This risk can be reduced by having the person who established the relationship with the client offer the service for consistency. Marketers can overcome this challenge by developing special service packages which act as a point of differentiation and increase service flexibility and customization.

Perishability

One cannot store services for future utilization. For example, in South west airlines, when a customer misses a flight then that time cannot be recovered and the customer is force to catch the next available flight. This affects performance during service delivery since it is very difficult to balance demand and supply of the service. Marketers usually come up with demand based pricing strategies for airline tickets so as to deal with the challenge.

  1. Promotion in marketing refers to increasing of customer information of a service with the aim of making a sale.

The elements of promotion mix include;

Advertising

This involves communication of brand information to the general public by an identified sponsor. The typical media which marketers use to advertise include social media, television, newspapers and mobile devices. The disadvantage of advertising is when selecting the vehicle to use for advertising and produce the bang which is desired. Advertising sometimes is less effective since there is no direct connection between the marketer and the consumer.

Sales Promotion

This strategy is very effective because it create immediate effect on sales; it induces the customer together with the distribution channels and helps to win over the competition. The disadvantage of sales promotion is that it can affect the image of the product or service because the consumer may perceive that the product is of low quality that is why the incentive is being offered.

Personal selling

This approach is appropriate as it improves on communication, it offers better convincing from the part of the seller, it improves the buyer seller relationship and it provides an opportunity to get feedback from the client. This type of strategy is time consuming and requires a lot of resources to execute it effectively.

Public Relations

This strategy is usually aimed at maintaining constant contact with the customer. This helps to collect complaints and feedback from the public, to maintain goodwill and clear understanding between the public and the organization and communicates the programs and policies of the organization to the public.

  1. Advertising

This involves communication of brand information to the general public by an identified sponsor. The typical media which marketers use to advertise include social media, television, newspapers and mobile devices. The disadvantage of advertising is when selecting the vehicle to use for advertising and produce the bang which is desired. Advertising sometimes is less effective since there is no direct connection between the marketer and the consumer.

  1. Sales promotion

This strategy is very effective because it create immediate effect on sales; it induces the customer together with the distribution channels and helps to win over the competition. The disadvantage of sales promotion is that it can affect the image of the product or service because the consumer may perceive that the product is of low quality that is why the incentive is being offered.

  1. Personal Selling

This approach is appropriate as it improves on communication, it offers better convincing from the part of the seller, it improves the buyer seller relationship and it provides an opportunity to get feedback from the client. This type of strategy is time consuming and requires a lot of resources to execute it effectively.

  1. Public Relation

This is usually aimed at maintaining constant contact with the customer. This helps to collect complaints and feedback from the public, to maintain goodwill and clear understanding between the public and the organization and communicates the programmes and policies of the organization to the public.

This is a form of mass communication regarding an organization, a product or service and where it is not paid by the organization. This involves giving interviews, donations, speeches and conducting seminars to attract mass media publish the information.

A marketer should not use all the tools to market the products and services. This is because usually marketing has a specific budget and marketers are supposed to adhere to the budget allocation to achieve the desired results, therefore using all the tools will be very expensive and most likely fail to achieve the marketing objectives.

4. There are three ways of setting prices which as discussed below

Customer based pricing

In this strategy, the important point is to determine the value the customer attaches to the product. The customer has a perception of value and for every purchase they make there is accrued benefits they attach to that product in exchange of the price they pay for the product therefore it is important for marketers set a price which captures the value.

Cost based pricing

In this approach the price of product is based on the cost of production, distribution, marketing and selling plus a profit margin. Some companies like Walmart go for low cost strategy. That is accepting small profit margins and focusing on sales volumes. Others like BMW offer great customer value and therefore don’t compete on low costs.

Competition based pricing

In highly competitive markets prices can be set based on the costs, profits, of the competitor since the consumers will base their judgement on the process of similar goods offered by competitors. For example in the oil and gas industry competition based price strategy is used.

Different products and services call for different approaches when it comes to price setting. For example mass produced goods, a marketer can apply a cost based pricing strategy or the customer value based pricing strategy to come up with the best price which offers adequate value to customers. Also different markets call for different pricing strategies based on their level of competition and the type of product/service offered. For example the gasoline industry calls companies to use the competition based pricing strategy while Walmart applies the cost based pricing approach.

5. Promotional mix can be defined as all communication channels an organization uses to communicate the value of their products and services and influence the consumer behaviour in the existing market and potential customers. This helps the organization to communicate the value of its offerings and use it to gain competitive advantage. When coming up with a promotional mix of a company, one needs to consider the target audience, the budget available to conduct the exercise and the goals the approach should achieve.

Integrated marketing communication refers to the application of different promotional communication channels which are supposed to reinforce each other during the promotional campaign and achieve the desired results. This evaluates and combines all the strategic aspects of promotional mix elements to provide a clear and consistent picture of the company offering. Integrated marketing communication is a cost effective approach which focuses on the customer by leveraging on all marketing communication elements and focuses on the advantages of each element so as to create a unique powerful piece of information about the brand to the customer.

These two approaches are different in that promotional mix focuses on the elements of promotion while the integrated marketing communication essentially focuses on the ability of each element contributing to a unified communication which powerful and relevant. In integrated marketing communication, all the communication pieces and elements are put in to consideration with an aim of developing one clear and powerful message while in promotional mix the organization can use on communication channel to effectively communicate their brand information.

6. There are three unique characteristics of services which make them different from goods,

Services are intangible

Services are activities performed, unlike goods which can be seen touched, tasted and felt before consumption. For example, the value hairdressing service can only be performed but it can’t be seen or touched. Since the customer cannot rely on the physical feature of services as opposed to goods, usually they rely on the information communicated by the seller about the service to make a purchase.

Inseparability

Production and consumption of services can’t be separated. There is no way services can be stored for future use. It is important to note that the consumer is always available when the service is being produced. For example, a hairdresser performs the service directly to the consumer and the aspect of quality of the service is important the service is performed under a close watch of the consumer. This characteristic nature of services calls for development of unique set of skills concerning the delivery of the service so as to improve on service delivery and involvement of the consumer in the production process.

Variability

Services are highly variable as the usually depend on the service provider and the unique qualities, skill and capabilities of the service provider makes services take different forms. Standardization of services is a challenge but most service provider uses it as a differentiating factor for their services from those offered by competitors hence create a unique competitive advantage. For example, it is impossible to have two hairdressers offering exactly the same service to their customers.

Thee three additional Ps that relate to services are people, process and physical evidence. People are human actors, who influence the buying behaviour of consumer, process involves the flow of activities and procedure followed in delivering the service and physical evidence consists of all the physical representation of the service. Examples the hairdresser, cleaning of the hair and brochures provided respectively.

References

https://www.coursehero.com/file/pr6cu/Define-the-5-promotion-mix-tools-for communicating-customer-value-Promotion-mix/

Top 5 Elements of Promotion Mix (With Diagram)

3 Major Pricing Strategies – Customer Value-Based Pricing, Cost-Based Pricing, Competition-Based Pricing

https://www.thebalance.com/what-is-promotional-mix-2295546