Proposal of a marketing strategy


CONTEMPORARY BUSINESS ENVIRONMENT



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2 CONTEMPORARY BUSINESS ENVIRONMENT


Along with other disciplines and research or practice fields, marketing also changes throughout time. It is important for a company to know how the whole economic environment is understood by its customers and competitors. This chapter aims to show which marketing concept has proved to be the best for this economic period and to help by deciding how to coordinate the company´s strategy so that it can be as successful as conditions allow.

2.1 Marketing Concept


Coming out of what Philip Kotler said about marketing in his „bible book“ the fourth edition of Principles of marketing, “Today, marketing must be understood not in the old sense of making a sale – „telling and selling“ – but in the new sense of satisfying customer needs.“6, we must approach marketing as a highly innovative, innovations needed and on innovations based field of company processes.
In today´s highly competitive market environment it is often difficult to meet all the requirements posed by the ever-changing situation. Not only are prices of recources fluctuating, but so are customers needs and wishes, not to mention competitors. As expressed by Harrell, „In the decades that have passed since the begining of the marketing era, competition has intensified. Technological advances have enabled organizations to serve much larger geographical areas..., the explosion of information sources has made today's buyers more sophisticated and more demanding.“7 We also agree with Kotler when he says, „nowadays value creating marketing is being applied“8, and will set as a basis for further research into his view on strategic marketing as constituting the first, most important part of this process (see FIG. 2).

FIG. 2 Process of Value Transmission





Resource: Kotler, P. Marketing Management, p. 99
Historical development of marketing principles has brought up five different orientations as TAB. 1 below suggests. Nowadays mainly two lately named concepts are being promoted, even though production orientation or sales orientation can despite the best strategies and advice of marketing specialists towards companies9 sometimes appear.

TAB. 1 Basic Marketing Concepts



Concept of orientation

..says that ….



Production

...customers will buy easily accessible products which are sold for a low price.

Product

...customers will prefer products with highest quality, effectivity or with completely new features.

Selling

…an aggresive selling and promotional approach is required, otherwise customers would buy a lot less.

Marketing

...customer needs are to be reveiled by the company and satisfied in a better way than by the competitor.

Societal

...customers will require products which impact the whole society positively.

Resource: addapted from Kotler, P. Marketing Management, p. 34-44
A company can always have choose how to direct its activities and how to reach its goals. In this chapter we tried to show the ongoing history and process of the development of marketing approaches which are important in different conditions in different ages. Although production concept might bring good results we believe that today´s situation offers a company two safest ways to ensure customer satisfaction – marketing and societal orientation.

2.2 B2B Environment – Organisational Behaviour


In this sub-chapter we are going to mention shortly features which can be found in both B2B and B2C sector, we will though concentrate only on B2B environment. The reason is that even if there are two main addressees at the end of a marketing process: customers and organisations (be it private, stately held or non-profit companies) and we would need to know all factors determining buyer´s decisions we do not have enough space to discuss it deeply. Since we aim to create theoretical support for further practical use where our target concentrates mainly on business customers we will not devote ourselves to B2C sector thoroughly.

FIG. 3 Decision Process and Strategy to Be Applied





Resource: addapted from Solomon, M.R., Marshall, G.W. and Stuart, E.W. Marketing očima světových marketing manažerů, p. 138

In all stages of a typical buying process there are a lot of factors which impact the final decision, so that in every step of a buying process a certain strategy can be applied. (see FIG. 3). „The business market consists of all the organisations that buy goods and services to use in he production of other products and services that are sold, rented or supplied to others. It also includes retailing and wholesaling firms that acquire goods for the purpose of reselling  or renting them to others at a profit.“10 Being aware of this Kotler´s definition of B2B environment, we would like to find the characteristics which make segments in this environment different from those in B2C.


The needs of a company seem to constitute the main difference from B2C environment. Companies´ needs can usually be found in their strategic vision and can comprise targets such as: profit, growth, innovation, customer satisfaction or just survival. Working with organisational customers though requires not only knowing this, but also being aware of the needs of people working in these companies, since there is a certain overlap in the needs observed.
These individuals are usually indicated as buying centres. They are assigned with specific tasks usually closely interconnected with their competencies and position. Typical buying centers in the B2B sector are initiators who recognize the need for a new acquisition, coordinators who take care of the whole buying process, influencers who provide coordinators with necessary technical or other specialised information, gatekeepers who in contrary prohibit unnecessarily high flow of information from disturbing coordinators11, deciders who represent the last step in the business hierarchy, and end user to whom the bought product or service comes over. The involvement of all interested persons can highly influence the outcome of marketing activities.

TAB. 2 Differences in B2C and B2B End User Sector



Characteristics

Organisational market

Customers market

Purpose

-other than personal consumption

-personal consumption

User-to-buyer relation

-very often two different persons

-the same person

Decision making

-usually more people

-individuals

Deciding factors

-technical specifications according to specialised knowledge

-brand fame, personal recommendations

Evaluation of possibilities

-careful, longlasting process

-little or even impulsive purchase

Criteria

-rational

-without criteria, emotional reactions

Supplier´s relation

-longlasting with reciprocal tendencies

-shortterm, or repeated

Channels

-directly from producer

-through wholesalers and retailers

Conditions flexibility

-very high depending on difficult, long and complex dealing

-strictly given, without dealing

Risk and cost

-both often very high

-rather small

Number of buyers

-limited

-many individuals and households

Demand

-derived, generally in a short term non-elastic and not stable

-based on customer needs, primary, price-elastic

Promotion

-mainly personal selling

-mainly commercials, advertising

Spent financial means

-large amounts

-rather small amounts

Form of financing

-often leasing, no direct payments

-cash, credit card

Resource: addapted from Kotler, P. Marketing Management, p. 195 and Solomon, M.R., Marshall, G.W. and Stuart, E.W. Marketing očima světových marketing manažerů, p. 166
As TAB. 2 above suggests organisational purchasing process is more formalised than the consumer one. Higher attention must be paid and more resources utilised if the seller is to seduce its customer. Commonly, large amounts of goods are sold for large revenues in total, notwithstanding multiple buying influence which plays an important role as well. A positive outcome shouldn´t be wasted and the necessity of trying to keep a customer for the longest possible period and encourage loyalty is mora apparent there than in the B2C sector.
We were able to show different demands of contemporary business environment in this chapter, be it marketing concept demanded or division of customers into B2B and B2C market. In our work we are going to address both markets, to create a strategy covering as well organisational as customers segments. While to study or not to study and thereinafter to use or not to use a marketing concept depends mainly upon the company, knowledge of B2B or/and B2C environment is for a company a must. The company is more or less forced to research both (if operating both) and to organize its processes according to gained information. This will namely impact the strategy the company chooses and therefore its profit. Omitting this important knowledge would in our opinion inhibit the company from recognizing critical points of customers relationship and from creating a successful strategy.


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