Specialised & Cause Related Marketing (SCM812S) UNIT 1 INTRODUCTION TO SPECIALISED AREAS OF MARKETING (SOCIAL, CAUSE, SPORT/EVENTS, TOURISM AND GREEN MARKETING) SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 1 Unit Objectives At the end of this unit you should be able to: detail the evolution of the marketing concept describe and give examples of the different variants of marketing discuss the key principles of marketing shared by all forms of marketing SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 2 1.1 Origins of marketing Every day we engage ourselves in activities that are part of marketing. Whether you are informing someone about your product or persuading them to buy it, constitute activities of marketing. What about undertaking research to find out the needs of your customers? What about giving your product a unique name to distinguish it from other similar products, or dividing a total market into groups of consumers with relatively similar needs? What is Marketing? Do you know where and how the concept of Marketing developed? According to Peattie, Marketing did not become a formally recognised and explicit management activity until the 1950s, and its theory and practice have been evolving ever since. However, the activities that are central to marketing have existed in some form since the dawn of human commerce, and therefore since people began to commercially exploit their environment (Peattie, 1992, p. 3). SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 3 1.2 What is marketing? The Chartered Institute of Marketing defines it as: “The management process responsible for identifying, anticipating and satisfying customer requirements profitably”. The American Marketing Association (AMA) defines marketing as: "The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 4 Cont’d A refined definition by AMA is that Marketing “is the 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”. There are many definitions of marketing, other than the one provided above, kindly provide any three different definitions of marketing by different authors and analyse their similarities and differences. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 5 The 3 C’s diagram of the marketing Concept Customer focus Competitor focus PROFITABILITY inter-functional Coordination SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 6 Discussing the 3C’s CUSTOMER FOCUS Market research is conducted regularly Opening hours are geared to customer needs Prime parking spaces reserved for customers not for senior managers Advertising based on what the customer need to hear, not on what managers want to say. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 7 Cont’d Competitor focus Competitors and their products are monitored Future competition is assessed Channels of distribution in place bypasses competitor’s The company is aware of how it is perceived in relation to its competitors SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 8 Cont’d Coordination Employees have the power to correct customers complaints as they occur Goods are distributed through convenient distribution channels for customers Staffs are trained to put the customer first Profitability Profitability as a result of continuously happy customers and not just due to mass production SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 9 1.3 The evolution of marketing and marketing concepts The development of marketing went through different stages and concepts as follows (Peattie, 1992, p. 5): The product concepts: a belief that customers are mainly interested in the quality, performance and features of products. It requires marketing activities to focus on the product development and improvement, and on maintaining product quality. The production concept: a belief that customers are basically price sensitive. The aim of marketing will be to make products efficiently and distribute them widely enough to raise volumes and drive down unit costs. The selling concept: a belief that customers will not buy enough of the company’s product without some persuasions. It needs marketing activities which informs and persuades customers through advertising and promotion. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 10 Cont’d The marketing concept: a belief that it is important to understand customer needs and fulfil them more effectively than the competition. Marketing activity has to begin by understanding customer needs and competitor offerings through marketing research. It also typically requires a balance of ingredients from other concepts – developing good products, making them efficiently and distributing them widely, and informing and persuading customers. The societal marketing concept: a belief that satisfying consumers and generating profits is not enough to guide businesses. It requires marketing activity to encompass the interests of society as well as the particular group of customers that are being served. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 11 A retrospect of the Marketing field/Eras or concepts Market & Competition Eras Societal Marketing Era Marketing Era (1980s) Selling Era (1950s) Product Era (1930s) Production Era (Mid-1920s Industrial Revolution) SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 12 The Societal Marketing Concept SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 13 2.Marketing Variants The basic principles of marketing are relevant to all businesses and to many non-business organisations or not-for-profit organisations. However, experience shows that the practicalities of marketing in a small company as compared to a large one, a business compared to a charity, or a manufacturer compared to a service business – are very different. One standard, generalised “recipe” for marketing cannot match everyone’s needs (Peattie, 1992, p. 6). The concept of marketing has therefore continued to evolve into a variety of distinctly different forms of marketing. Peattie lists the following Marketing Variants: 1. mass marketing 2. niche marketing 3. industrial marketing 4. not-for-profit marketing 5. societal marketing SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 14 Cont’d 6. services marketing 7. leverage marketing 8. international marketing, 9. global marketing 10. relationship marketing 11. lifestyle marketing 12. micro-marketing, and 13. green marketing. This course however only deals with Cause, Sports/Events, Tourism and Green Marketing. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 15 2.1 Mass marketing Formal marketing began as a means of satisfying large mass markets of customers with similar needs (Peattie, 1992, p. 6). The mass production era relied upon producing specific products to cover all segments of a market. These products were differentiated from competitors’ offerings in order to capture the largest market share possible. Differentiation was achieved through pricing, product features, advertising and branding, and the management of quality levels. Typical examples of products that are mass marketed in Namibia are Coca Cola and KFC. These are products that have universal appeal. Toilet paper is also mass marketed. http://www.youtube.com/watch?v=5k4d_fBfGWE SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 16 2.2 Niche marketing Mass marketing complemented mass production as a way to meet high volume demands with high volume production. However, it soon became clear that small market niches with very distinctive needs also existed. Marketing was still important to secure these niches, but the techniques of mass marketing needed amendment to serve them. Niche marketing focuses on generating very distinctive product offerings, and building barriers to protect the niche. Examples in Namibia could be the Body shop, which is in the wellness business and provide SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 17 2.3 Industrial marketing Consumers or “end-users” are not the only form of customer which a company can market to. For many businesses, their customers are other businesses, who often differ sharply from consumers in their needs and behaviour. The products that a company supplies to a business may have to satisfy the needs of several different people including: § Those who use the product, § Those who select them, § Those who approve their purchase, § Those who negotiate their purchase. Satisfying all these different parties within a company makes business-to-business or industrial marketing a very different challenge from consumer marketing. Examples in Namibia is Plastic Packaging which supplies a wide range of plastic products to different companies and Office Economix who supplies a range of office furniture. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 18 2.4 Not-for-profit marketing Although it was stated earlier that marketing involved satisfying consumers’ needs at a profit, many types of organisation which do not aim to generate profits have adopted many of these concepts and practices of marketing. Many hospitals, universities, charities, government departments and even churches have adopted the principles of the importance of customer satisfaction. Many also now have people responsible for marketing. Notfor-profit marketing can fit into the definition of marketing if we substitute the profit objective with some other form of performance target. The Cancer Association and its promotional campaign of “an apple per day” is an example of Not-for-profit marketing. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 19 2.5 Societal marketing The late 1970s saw a profound shift in many societal values. Among them was a developing concern for the environment, a specific consumerist movement and widespread concern for the disadvantaged within society. It became clear that marketing theory could not resolve the potential conflicts that might arise between the needs of one group of consumers and another, or between the needs of certain consumers and the needs of society. The societal marketing concept evolved to try and resolve these conflicts by adding a long-term concern for society into the marketing concept. It did this in two key ways: By stressing the priority of customer satisfaction over profit. Customer satisfaction became the means of achieving profit, not just a different type of objective. By viewing the organisation as a total system and considering its overall impact on society. Example of societal marketing is the campaigns against rhino poaching and baby dumping. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 20 2.6 Service marketing During the 1980s there was a considerable focus on the difference between marketing products and marketing services (Peattie, 1992, p. 6). Services are different from products in several ways which require a different approach to their marketing: § Services are less tangible than products § They can rarely be sampled before purchase § Production and consumption of a service are simultaneous – a service cannot be stored They involve a greater degree of personal contact between the customer and the seller. The attributes of the service provider will tend to strongly influence the customer’s perception of service quality. The tourism industry and financial services industry are some of the examples where service marketing takes place. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 21 2.7 Green marketing Green marketing is a style of marketing which has arisen in response to the increasing concern about the state of the global environment and the life it contains (including human life). This variant of marketing is discussed in details in Unit 5. Nedbank Namibia with its Go Green campaigns is an example in Namibia. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 22 2.8 Sports marketing According to Fuse marketing (2013) sports marketing is a form of marketing in which brands use mainstream or alternative sports to connect with both a broad and/or targeted group of consumers. Countless companies and/or brands have used sports marketing to build positive brand awareness, support retail and sales promotions and gain an overall advantage in their market. Common examples of sports marketing include athlete endorsements, event marketing and in-stadium advertising. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 23 2.9 Event marketing Business Dictionary.com defines event marketing (also called event creation) as the activity of designing or developing a themed activity, occasion, display, or exhibit (such as a sporting event, music festival, fair, or concert) to promote a product, cause, or organisation. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 24 2.10 Customised/Personalised/Individual marketing This is a type of marketing variant whereby a marketer tries to customise the message or offering to the unique needs of a specific customer or specific subset of customers. It is tailoring a particular product to the needs of an individual customer. Customised marketing is generally practiced by companies whose products are very expensive or unique, such as custom home builders or airplane manufacturers, because these products can be designed to suit the special needs of each customer. Since the company adapts its products and marketing activities with such high degree of specificity, customised marketing is considered to be the ultimate form of target marketing. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 25 Activity Collect newspaper articles related to at least two Marketing variants related to a specific organisation & bring the article along to your next class. In-class Activity: Identify the variant; identify how the organisation handles the variant and suggest alternative variants for organisational improvement. SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 26 END OF UNIT 1 SCM812S - Unit 1 - Efigenia Semente PON, Source (Adkins & Peattie) 2015 27