The Role of Marketing

 Every cloud has a silver lining and the current economic down turn- which started in the West but is having an inevitable worldwide impact- is no exception. Despite feeling anxious about the overall state of the global economy. The marketing bodies have found that marketers remain relatively optimistic about the fortunes of their own companies, and crucially, the prospects for marketers themselves.

How is this possible? Simple. Marketing is now at the very heart of business and is accepted as the competitive differentiator in these challenging times. In short, there is recognition that it will be those organizations that attract and retain professional marketers who will be best placed to ride out and even profit from the economic turbulence.

Why marketing? Surely when budgets are tight, the last thing you need is marketers overspending on ever so-creative but ever-so-ineffective campaigns? In fact, more and more organizations have woken up to the fact that qualified marketers can have a fundamental role not just in the here-and-now, but in the long term success if their business.

After all, marketing is about so much more than advertising or promotion. When times are tough, forward-thinking organizations need professionals adept in anticipating, identifying and then meeting customer and market needs. Never is this more relevant than at times like this, when competition for consumers' spending becomes fierce. The survivors- the winners -0 will be those organizations able to respond quickly and appropriately to changes in their customers and markets.

In fact, in bracing themselves for challenging times, many marketers are already significantly altering their plans to cope with the rapidly different climate of the recession. They are adapting to the changing needs of their markets and customers; they are using their resources ever more wisely; and they are monitoring their achievements with growing precision.

What all this means is that there has never been a better time to be a professional marketer, for you have a key role to play in guiding companies through the tough times ahead. Being at the very forefront of business means this profession has more and more to offer both those embarking on a new career or those already working their way up the marketing career ladder.

Indeed, marketing is one of the most dynamic, constantly evolving profession. It encompasses a wide range of activities and skills- from number crunching and analysis right through to innovation and creativity. Marketing executives are involved in planning, advertising, promotion, public and media relations, PD, distribution, sponsorship and research- just name a few. And although marketers are found chiefly within the private sector, there are more and more marketing jobs in the public and not-for-profit sectors as the long-term benefits that responsible marketing brings become more evident. Social marketing too is how firmly on the agenda as a cultural force for beneficial global change.

Whilst the responsibilities of the role will course vary, depending on the size of the organization and sector, and whether the focus is on selling a product, service or raising awareness of an issue, what all marketing roles share is being in an exciting, varied and challenging role at the very centre of business.

Not only is marketing an exhilarating profession, it is also an increasingly popular one. Not only are unprecedented numbers of people choosing marketing as their profession of choice, but many millions of others are making marketing decisions as part of their everyday job role. This does not, however, mean that the profession is saturated. Indeed, it is the qualified marketer the situation, decide the best options and implement appropriate strategies to meet the rapid changes that lay ahead of us all.

For anyone in any doubt about the extent of the transformation within the sector, you need look no further how the techniques of marketing have changes hugely in the last 40 years with the spread of radio and then television, faster and more pictorial printing of newspapers and magazines and the growth of digital media.

The introduction of digital media alone has brought an explosion in the number of channels marketers can use. This year is just the 10th anniversary of the launch of Google. Moreover, we have, as marketers in recent years, had to take on board other business issues such as social responsibility, reputation management and increasingly demanding stakeholder communication.

I think, it's our time for marketers. I would go so far as to say that as marketers, we are now requiring more than any other professional to understand the business and our role in delivering strategic business objective. Do you all agree?

ESTIMATING ACTUAL SALES AND MARKET SHARES

 Besides estimating total and area demand, a company will want to know the actual industry sales in its market. Thus, it must identify its competitors and estimate their sales.

Industry’s trade associations often collect and publish total industry sales, although not individual company sales. In this way, each company can evaluate its performance against the industry as a whole. Suppose the company’s sales are increasing at a rate of five percent a year and industry sales are increasing at 10 percent. This company actually is losing its relative standing in the industry.

Another way to estimate sales is to buy reports from marketing research firms that audit total sales and brand sales. For example, A.C. Nielsen, IRI, and other marketing research firms use scanner data to audit the retail sales of various product categories in supermarkets and drugstores, and they sell this information to interested companies. A company can obtain data on total product category sales as well as brand sales. It can compare its performance with that of the total industry or any particular competitor to see whether it is gaining or losing in its relative standing 

ESTIMATING AREA MARKET DEMAND

Companies face the problem of selecting the best sales territories and allocating

their marketing budget optimally among these territories. Therefore, they need to

estimate the market potential of different cities, provinces, and countries. Two

major methods are available: the market-buildup method, which is used primar-

ily by business goods firms, and the market-factor index method,

which is used primarily by consumer goods firms.

 

Market-Buildup Method

The market-buildup method calls for identifying all the potential buyers in each

market and estimating their potential purchases. Suppose a manufacturer of min-

ing instruments developed an instrument that can be used in the field to test the

actual proportion of gold content in gold-bearing ores. By using it, miners would

not waste their time digging deposits of ore containing too little gold to be com-

mercially profitable. The manufacturer wants to price the instrument at $1000. It

sees each mine as buying one or more instruments, depending on the mine’s size.

The company wants to determine the market potential for this instrument in each

mining province or territory. It would hire a salesperson to cover each area that

has a market potential of over $300 000. The company wants to start by finding

the market potential in the Northwest Territories.

To estimate the market potential in the N.W.T., the manufacturer can con-

sult the Standard Industrial Classification (SIC) developed by Statistics Canada.

The SIC is the government’s coding system that classifies industries, for purposes

of data collection and reporting, according to the product produced or operation

performed. Each major industrial group is assigned a two-digit code—metal min-

ing bears the code number 06. Within metal mining are further breakdowns into

four-digit SIC numbers (the gold category has the code number 0611).

Next, the manufacturer can turn to the Financial Post Survey of Mines

to determine the number of gold-mining operations in each territory and province,

their locations within the territory and province, and the number of employees,

annual sales, and net worth. Using the data on the N.W.T., the company can pre-

pare a market potential estimate.

An examination of the SIC data reveals that the N.W.T. has 220 gold mines.

It is projected that large mines have the potential to purchase four instruments

each, while small mines will purchase only one instrument. Fifty percent of the

mining operations are large mines. Therefore, the total market for potential instru-

ment sales in the N.W.T. equals (220 × .50 × 4) + (220 × .50  × 1) 550 instru-

ments. Since each instrument sells for $1000, the market equals $550 0

Market-Factor Index Method

 Consumer goods companies also have to estimate area market potentials. Consider the following example: A manufacturer of men’s dress shirts wishes to evaluate its sales performance relative to market potential in several major market areas, starting with Vancouver. It estimates total national potential for dress shirts at about $200 million per year. The company’s current nationwide sales are $14 million, about a seven percent share of the total potential market. Its sales in the Vancouver metropolitan area are $1 200 000. It wants to know whether its share of the Vancouver market is higher or lower than its national seven percent market share. To determine this, the company first needs to calculate market potential in the Vancouver area.

A common method for calculating area market potential is the market-factor index method, which identifies market factors that correlate with market potential and combines them into a weighted index. An excellent example of this method is called the market rating index, which is published each year by The Financial Post in its Canadian Markets  publication. This survey estimates the market rating for each province and metropolitan area of Canada. The market rating index is based on two factors: the area’s share of Canada’s population, and retail sales. The market rating index

(MRI) for a specific area is given by MRI = percentage of national retail sales in the area percentage of national population in the area.

Using this index, the shirt manufacturer looks up the Vancouver metropolitan area and finds that this market has 5.77 percent of the nation’s population, and 7.03 percent of the nation’s retail sales. Thus, the market rating index for Vancouver is

MRI = 7.03/5.77 = 122

 

Vancouver has a market rating index that is 22 percent higher than the national average. Because the total national potential is $200 million nationally each year, total potential in Vancouver equals $200 million × 1.22 × .0577 = $14 078 000. Thus, the company’s sales in Vancouver of $1 200 000 amount to a

$1 200 000 $14 078 800 = 8.5 percent share of area market potential. Comparing this with its seven percent national share, the company appears to be doing better in Vancouver than in other areas of Canada.

The weights used in the buying power index are somewhat arbitrary. They apply mainly to consumer goods that are neither low-priced staples nor high-priced luxury goods. Other weights can be used. Also, the manufacturer would want to adjust the market potential for additional factors, such as level of competition in the market, local promotion costs, seasonal changes in demand, and unique local market characteristics.

Many companies compute additional area demand measures. Marketers now can refine province-by-province and city-by-city measures down to census tracts or postal codes. Census tracts are small areas about the size of a neighbourhood, and postal code areas (designated by Canada Post) can be used to identify particular streets, neighbourhoods, or communities within larger cities.

Wholesaler v/S Retailer

 Retailer buys from wholesaler and sells to customer.

Retailer has costs, (like rent, employees, taxes, loss/breakage, advertising, etc.) and needs to make a profit (which is the reason they are in business). Those added items must be placed on the price charged the customers, above what the retailer paid for the product.

Many costs a wholesaler incurs don't change much, if selling one or a thousand of something (say the phone bill, or clerks payroll for taking an order are the same if for 1 or 100 of something). So, as long as they sell a lot of something, they can sell it for less than if they sold one of it. Hence, the wholesale price is for wholes (or large) quantities.

Wholesale is a bulk sale by a manufacturer or distributor to for resale to a retailer. Retail is any sale to an individual or company for end use. In almost all states it is illegal to sell wholesale to an individual, or claim to sell wholesale when it is for end use and not for resale. Also in most states wholesalers may not sell to the public. Wholesale sales do not carry sales tax, as sales tax is charged to the end user. Thus is a "wholesaler" were to sell an individual something and charge the sales tax it would be by definition a retail sale and it would be deceptive to claim that it was a wholesale sale or that the merchant was a wholesaler. It is unethical for some one to break the law. One should strongly consider whether or not one should do business with any unethical party as it is likely if that party bend or break the rules he or she is more likely not to be honest with you or honor warranties etc. End result, you get what you pay for.

Retail is marked up from the price the wholesaler sold it for to the retailer. The wholesaler usually gets their goods and pricing from the manufacturer which is marked up as well.

Discuss about major channels of Director Marketing.

 Major Channels for direct Marketing:

Direct marketers can use a number of channels for reaching individual prospects and customer. Those channels are describe below-

Face to face selling: -

The original and oldest form of direct marketing is the field sales call. Today most industrial companies rely heavily on a professional sales force to locate prospects, develop them into customers, and grow the business, or they hire manufacturers’ representatives and agents to carry out the direct selling task.

Direct Mail:

Direct mail marketing involves sending an offer, announcement, reminder or other item to a person. Using highly selective mailing list, direct marketers send out millions of mail prices each year –letters, folders and other “sales people with wings “ Some direct marketers mail audiotapes, videotapes, CD’s, and computer diskettes to prospect and customers.

Catalog Marketing:

In catalog marketing companies may send full line merchandise catalogs, specially consumer catalogs and business catalogs, usually in print form but also sometimes as CD’s , Videos, or online.

E- Marketing:

The newest channels for direct marketing are electronic. E- Business describes a wide variety of electronic platforms, such as the sending of purchase orders to. Those are the activities company undertakes for marketing and promotion of the product.

Discuss about Electronic Commerce

 Define: Transacting or facilitating business on the Internet is called ecommerce. Ecommerce is short for "electronic commerce."

Popular examples of ecommerce revolve around buying and selling online. But the ecommerce universe contains other types of activities as well. Any form of business transaction conducted electronically is ecommerce.

Examples of Ecommerce

Online Shopping

Buying and selling goods on the Internet is one of the most popular examples of ecommerce. Sellers create storefronts that are the online equivalents of retail outlets. Buyers browse and purchase products with mouse clicks. Though Amazon.com is not the pioneer of online shopping, it is arguably the most famous online shopping destination.

• Electronic Payments
  When you are buying goods online, there needs to be a mechanism to pay online too. That is where payment processors and payment gateways come into the picture. Electronic payments reduce the inefficiency associated with writing and mailing checks. It also does away with many of the safety issues that arise due to payment made in currency notes.
• Online Auctions
  When you think online auction, you think eBay. Physical auctions predate online auctions, but the Internet made auctions accessible to a large number of buyers and sellers. Online auctions are an efficient mechanism for price discovery. Many buyers find the auction shopping mechanism much interesting than regular storefront shopping.
• Internet Banking
  Today it is possible for you to perform the entire gamut of banking operations without visiting a physical bank branch. Interfacing of websites with bank accounts, and by extension credit cards, was the biggest driver of ecommerce.
• Online Ticketing
  Air tickets, movie tickets, train tickets, play tickets, tickets to sporting events, and just about any kind of tickets can be booked online. Online ticketing does away with the need to queue up at ticket counters.

Types of Ecommerce

Ecommerce can be classified based on the type of participants in the transaction:

·         Business to Business (B2B)

B2B ecommerce transactions are those where both the transacting parties are businesses, e.g., manufacturers, traders, retailers and the like.

·         Business to Consumer (B2C)

When businesses sell electronically to end-consumers, it is called B2C ecommerce.

·         Consumer to Consumer (C2C)

Some of the earliest transactions in the global economic system involved barter -- a type of C2C transaction. But C2C transactions were virtually non-existent in recent times until the advent of ecommerce. Auction sites are a good example of C2C ecommerce.

Benefits of Ecommerce

The primary benefits of ecommerce revolve around the fact that it eliminates limitations of time and geographical distance. In the process, ecommerce usually streamlines operations and lowers costs.

Specialized Forms of Ecommerce

On some platforms, ecommerce has shown the promise of explosive growth. Two such examples are:

·         Mcommerce

Mcommerce is short for "mobile commerce." The rapid penetration of mobile devices with Internet access has opened new avenues of ecommerce for retailers.

·         Fcommerce

Fcommerce is short for "Facebook commerce." The immense popularity of Facebook provides a captive audience to transact business.

What are the promises and challenges on Online Marketing

 The Promise and Challenges of Online Marketing

•          Online marketing will remain an important approach in the marketing mix to:

–         Build customer relationships

–         Improve sales

–         Communicate company and product information

–         Deliver products and services more effectively and efficiently

How on On-line Marketing is conducted

 Marketing and the Internet

Internet is a vast public web of computer networks that connects users of all types around the world to each other and to a large information repository

 

Online Marketing Domains

•      Business to consumer (B2C)

•      Business to business (B2B)

•      Consumer to consumer (C2C)

•      Consumer to business (C2B)

 

Business to consumer (B2C) involves selling goods and services online to final consumers

Business to business (B2B) involves selling goods and services, providing information online to businesses, and building customer relationships

Consumer to consumer (C2C) occurs on the Web between interested parties over a wide range of products and subjects

•      Blogs

•      Offer a fresh, original, and inexpensive way to reach fragmented audiences

•      Difficult to control

Consumer to business (C2B) involves consumers communicating with companies to send suggestions and questions via company Web sites

 

Types of Online Marketers

•      Click-only marketers

•      Click-and-mortar marketers

Click-only marketers operate only online without any brick and mortar presence

•      E-tailors

•      Search engines and portals

•      Shopping or price comparison sites

•      Internet service providers (ISP)

•      Transaction sites

•      Content sites

E-tailers are dot coms that sell products and services directly to final buyers via the Internet

•      Amazon

•      Expedia

Search engines and portals are ports of entry to the Internet

•      Yahoo!

•      Google

Internet service providers (ISP) provide Internet connections for a fee

•      AOL

•      Earthlink

Shopping or price comparison sites provide product and price comparison information

•      Yahoo! shopping

Transaction sites take commissions for transactions on their sites

•      eBay

Content sites provide financial, news, research, and other information

•      New York Times.com

•      ESPN.com

Click-and-mortar companies are brick-and-mortar companies with an online presence

Advantages of click and mortar companies include:

•      Known and trusted brand names

•      Strong financial resources

•      Large customer bases

•      Industry knowledge

•      Reputation

•      Strong supplier relationships

•      More options for customers

 

Setting Up an Online Presence

Creating a Web site requires designing an attractive site and developing ways to get consumers to visit the site, remain on the site, and return to the site

 

Types of sites

•      Corporate Web site

•      Marketing Web site

 

Corporate Web site is designed to build customer goodwill and to supplement other channels, rather than to sell the company’s products directly to:

•      Provide information

•      Create excitement

•      Build relationships

 

Marketing Web site is designed to engage consumers in interaction that will move them closer to a direct purchase or other marketing outcome

 

Designing Effective Web Sites

To attract visitors, companies must:

•      Promote in offline promotion and online links

•      Create value and excitement

•      Constantly update the site

•      Make the site useful

 

The seven Cs of effective Web site design

1.       Context

2.       Content

3.       Community

4.       Customization

5.       Communication

6.       Connection

7.       Commerce

 

Context is the site’s layout

Content is the site’s pictures, sound, and video

Community is the site’s means to enable user-to-user communication

Customization is the site’s ability to tailor itself to different users or to allow users to personalize the site

Communication is the way the site enables user-to-user, user-to-site, or two-way communication

Connection is the degree that the site is lined to other sites

Commerce is the site’s capabilities to enable commercial transactions

The eighth C

To keep customers coming back, the site needs to constantly change

 

Placing Ads and Promotions Online

Forms of online advertising

•      Display ads

•      Search-related ads

•      Online classifieds

 

Display ads

•      Banners are banner-shaped ads found on a Web site

•      Interstitials are ads that appear between screen changes

•      Pop-ups are ads that suddenly appear in a new window in front of the window being viewed

•      Rich media ads incorporate animation, video, sound, and interactivity

 

Search-related ads are ads in which text-based ads and links appear alongside search engine results on sites such as Google and Yahoo! and are effective in linking consumers to other forms of online promotion

 

Other forms of online promotion include:

•      Content sponsorships

•      Alliances

•      Affiliate programs

•      Viral advertising

 

Content sponsorships provide companies with name exposure through the sponsorship of special content such as news or financial information

Alliances and affiliate programs are relationships where online companies promote each other

Viral marketing is the Internet version of word-of-mouth marketing and involves the creation of a Web site, an e-mail message, or another marketing event that customers pass along to friends

 

The Future of Online Advertising

Online advertising provides a useful purpose as a supplement to other marketing efforts and is playing an increasingly important role in the marketing mix

 

Creating or Participating in Web Communities

Web communities allow members to congregate online and exchange views on issues of common interest

•      iVillage.com

•      MyFamily.com

 

Using E-mail

Marketers are developing enriched messages that include animation, interactivity, and personal messages with streaming audio and video to compete with the cluttered e-mail environment