An Overview of Important Marketing Ideas & Terms
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Utility is the usefulness or benefit that consumers derive from a product. Marketing creates different forms of utility by ensuring that people can obtain products they need and want. Through the marketing mix and the four P’s of marketing utility is created by making sure that product are brought to the market from different standpoints of price, place, etc… There are different forms of utility that include:
· Form utility- the creation of products.
· Place utility- providing a place for products and services to be obtained.
· Time utility- providing products when needed.
· Possession utility- ownership of the product.
Competitive advantage means that a firm has a distinctive competency that is superior to the competition. The ability to do something or make something that is better than the competition is a competitive advantage. For example, if a computer company makes a computer that is impervious to viruses then this would be a distinct competency superior to competitors since no computer company has a computer that is impervious to viruses.
The Elements of the Marketing Mix
The marketing mix consists of what is known as the 4Ps. These include product, price, place, promotion. These elements represent the different components used to bring a product or service to market.
· Product- The specialized services or product. This area of the mix looks to answer questions such as what is the customer looking for in the product? How will they use the product? What is the branding strategy?
· Price- What is the product worth to the consumer? What are the competitions prices? Can discounts be given?
· Place- Where will the product be sold? What distribution channels should be used?
· Promotion- How will you present the product to the market? What kind of advertising needs to be used?
Strategic, functional, and operational planning: Differences in planning at the corporate and the SBU levels.
Organizations use different types of plans for different situations. The use of plans is contingent on the goals and mission of the organization. The goals and missions are used to formulate objectives which are used to formulate plans. The point of all plans is to focus resources to the accomplishment of goals. Each type of plan serves to accomplish this task but from different points.
· Operational plan- Used by managers this plan provides the means for leading and controlling human resources in daily work functions.
· Functional plan- This plan is used to set objectives such as new marketing strategies.
· Strategic plan- The strategic plan is the plan which guides the organization to the goal of accomplishing its mission. This is the plan for the entire organization.
The strategic plan would differ at the corporate level because planning would be made for the organization as a whole. SBU’s would possibly have their own missions and objectives based on the focus of the SBU.
Mission Statement, SWOT Analysis, and their role in the planning process.
A mission statement is a short phrase that encompasses the primary purpose of the company or organization. A SWOT is an analysis of a firm’s internal and external environments. Managers use a SWOT analysis to test an idea or product based on its strengths, weaknesses, opportunities, and threats. This mission is also used in this planning to focus the manner in which the product or idea is planned. A strong mission statement will direct the company to staying on target in its objectives.
Strategic Business Unit (SBU) & The Boston Consulting Group model for portfolio analysis in planning for SBUs.
Strategic business units (SBU) are specialized divisions designed to operate with their own missions and objectives. These units are often run just like separate companies due to their competency being unique enough to warrant a division in this way.
The BCG model is used to determine the potential of a firm’s existing successful SBUs to generate cash. This determination of profit is used to assess investment into other businesses. This is used to determine whether an SBU would be a good venture given the market.
Market penetration, product development, market development, and diversification.
Market penetration is the strategy of determining the amount or sales of a product in relation to the total market. This lets marketers know how much untapped market exists and the direction of the marketing strategy to obtain this market. Product development is the strategy of bringing a product to market. This process consists of many stages of screening development and testing. Product development allows marketers to fully prepare and understand how to develop the market. Market development is targeting of new customers for products this involves studying and researching why potential customers are not purchasing the product. Finally, diversification is the expansion of a market that already exists or into a new market and new competency.
The Elements of a Formal Marketing Plan
The marketing plan consists of several essential components. These components include:
1. Purpose and Mission
2. Situational Analysis
3. Marketing Strategy and Objectives
4. Tactical Programs
5. Budgets, Performance Analysis and Implementation
6. Additional Consideration (Armstrong & Kotler, 2009)
(There are many other components to marketing plan but I believe these headings cover the majority of components.)
Action Plan Importance with Marketing Plan
An action plan is a plan that outlines what objectives or actions need to be carried out in order to implement the marketing plan. This is an important part of marketing planning because it actually puts the marketing strategies into action. It is important for marketers to break down implementation of a marketing plan into individual elements in the action plans because this provides a chronology and rational approach to the implementation.
The following are examples of marketing metrics that can be used to track progress of a marketing plan. Typically, these metrics are tied to a specific objective to make them accurate in their measurements.
· Return on marketing investment ( ROMI) is essentially a bottom line view of the profit that is made on a marketing plan. This is the least accurate metric because it does not provide any direction or area of improvement.
· Customer mind set/customer orientation is the metric in which customers are surveyed in order to determine how they feel about the product or marketing features. This can show whether there are deficiencies in the marketing plan.
· Customer satisfaction is another quality metric because it displays whether the customer is happy with the product and what about the product dissatisfies them.
· Company/product reputation is another important metric because it shows how people think and feel about the product and company, i.e., cheap, junk, quality, etc…
Armstrong, G. & Kotler, P. (2009). Marketing: An introduction (9th ed.). Upper Saddle River, NJ: Pearson Education.
Solomon, M.; Marshall, G.; Stuart, E. Marketing: Real People,Real Choices. Textbook. 7th edition. Pearson Prentice Hall. 2011. ISBN 978–0–13–217684–2
Vincent Triola. Sat, Jan 09, 2021. Defining Important Marketing Concepts Retrieved from https://vincenttriola.com/blogs/ten-years-of-academic-writing/important-marketing-concepts