1. Market Segmentation in Marketing
Lately, market segmentation has become one of the essential tools in marketing. Market segmentation has been found to be vital in separating markets in a manner that enhances profitability without necessarily spending on sales resource as well as systems that are required for one-to-one marketing, (Tapp, 2009). According to the market segmentation theory, it could be beneficial to market a product to potential customers only. Moreover, a target market to which the product will be marketed should be identified. Consequently, this context, the term “market segmentation” is used to refer to grouping of markets or rather, consumers having common characteristics which make them to demand goods as well as services on the basis of traits those goods; for instance, function or price. For market segmentation to be undertaken first the segments should be measurable, so as to determine the cost marketing that will be incurred as well as the amount of goods to be supplied to each segment. Second, each segment should be accessible. Third, the segments should be substantial and lastly, there should be unique needs for each and every segment. This will enable the marketer to determine how these needs will be met depending on their nature.
As a matter of fact, for segmentation to be undertaken, certain variables are employed. Segmentation variables are very crucial for both the researchers as well as marketers in segmentation of the market and filtering or rather refining the market according to the preset objectives concerning the market segment. In general terms, segmentation variable can be classified into two broad categories: needs and profilers. The former is concerned with the needs of customers while the latter are the characteristics of customers which must be measurable, (Hammond, et al, 2006). However, these variables can be further categorized into four narrow groups. First are geographic variables, which encompass region, population density, climate and size of metropolitan. Second are demographic variables, which include; age, size of the family, gender, generation as well as family cycle. Third are behavioralistic variables, which are based on how the customers behave towards goods. They include; the rate of usage, occasions, benefits sought, and brand loyalty. Lastly, are psychographic variables. Under this category, consumers are grouped as per their lifestyle. They include; values, attitudes, activities, opinions, and interests. The four segmentation variables can only be used effectively only if suitable statistical methods as well as techniques of collecting data are used. As such, segmentation variables should take into consideration the budget, goals, product, revenue, brand equity, as well as other facets of operations of a business.
Arguably, market segmentation can be; either, simple or complex. In simple market segmentation, one segmentation variable is used in establishing the different segments of the market. For instance, a market can be divided into different segments of the basis of geographical variables, (Baines, Fill & Page, 2008). On the other hand, complex market segmentation results from a combination of two or more segmentation variables in dividing a market into different segments. For instance, the market can be divided into different segments based on geographical as well as demographic variables. As an illustration, Toyota Motors has segmented its markets based on geographical variables as well as demographic variables. Thus, the kinds of cars that are sent to markets in developed countries are quite different with those that are sent to markets in third-world countries. Moreover, within these markets, different classes of cars are sold to different classes of clients depending on their capability to buy, (Tapp, 2009).
It has been noted that, political and Not for Profit Marketing (NPM) plays a significant role in segmentation. In this context, NPM can be defined as the marketing of goods and services without the motif of making monetary profits. To be more specific, these are the strategies as well as the activities that are usually used by not-for profit organizations in promoting or rather spreading information about the organization, in addition to soliciting contributions besides calling for volunteers. However, it is very challenging to base market segmentation on Not for Profit Marketing. This is because it is not easy to measure market segments that are established by NPM. Additionally, there are high chances that these segments may not be accessible, making it difficult to address the demands of the clients in various segments, (Baines, Fill & Page, 2008). Lastly, the probability of customers within a segment that has been established by NPM having unique needs is very minimal. This can be explained by the fact that, the objective NPM is quite different from that of the other marketers.
On the other hand, a good number of marketers use political outcomes in establishing market segments. To illustrate the role of politics in segmentation, in most cases, a country is usually politically divided into different regions; such as, provinces, and counties. Moreover, politics may also determine products that are available in a given region by deciding where their production takes place. This can be done; for instance through government regulation on where factories should be situated. In addition, the government may be regulating marketing activities of various firms depending on the importance of the products that they are dealing in to the society. Consequently, many a times, marketers take these divisions as their basis of dividing the markets. This forms the first step of the application of segmentation variables. Hence, markets are categorized in terms of these political divisions, (Baines, Fill & Page, 2008).
2. Internal Marketing and Responsible Marketing
The concept of internal marketing was initially taken as a way of attaining quality services, which could in turn enhance satisfaction of clients within the service sector. By definition, internal marketing is management viewpoint of supporting an organization as well as the policies of the particular organization to the workforce as if they were the clients of the organization, (Mohammed & Pervaiz, 2000). To be more precise, it is a way of engaging the workforce at all stages in efficient marketing programmers by assisting them to appreciate their responsibility in the marketing practice. As such, internal marketing is mainly concerned with the relationship of the workforce and their employer. Generally, internal marketing involves the employees who are taken to be internal customers and the management of the organization in question.
The fundamental elements of internal marketing comprises of: motivation and satisfaction of employees, integration and intervention co-ordination, execution of definite functional and corporate strategies, and market and customer orientation. It is important to note that, execution of internal marketing program guarantee prioritization of motivation of employees. Moreover, adoption internal marketing enhances realization of the importance of motivated employees, (Richard & Barbara, 2000).
It was mentioned early that, communication is a crucial part of internal marketing. Therefore, it can also be asserted that internal marketing plays a very crucial role in communicating as well as encouraging responsible marketing for any organization. Responsible marketing involves taking into consideration the interest of the consumers and the society at large in the current times as well as the future. Responsible marketing can be explained in different ways. To begin with, one of the attributes of responsible marketing is employee responsibility and accountability, (Richard & Barbara, 2000). Secondly, the marketing staff must first understand the business of the organization in question. Lastly, customers should be appreciated in all ways. Through internal marketing, it is possible to achieve responsible marketing; based on the claim that: internal marketing enhances retention of customers and development of individual employees, it facilitates cooperation and coordination among the various business departments, and also, it facilitates accountability among the workforce. Thus, internal marketing is the basis of responsible marketing.
A good example of how internal marketing enhances responsible marketing can be explained using the Coca Cola Company. This is one of the well established companies in the food and beverages industry throughout the globe. The company recognizes the roles that parents perform in caring for their children as far as their diet is concerned. Therefore, the company provides nutritional information on the labels of the product that they produce and market as well as online. Moreover, the company has taken the initiative of responsibly marketing the products by offering trustworthy information to their customers. As per their Responsible Marketing Policy, there is no direct marketing of their products to children under the age of 12, (Coca Cola Company, 2010). This explains the reason why the company cannot undertake any advertisement whose target audience comprises of 35% of children under the age of 12. Responsible marketing within this company has been enhanced by its effective internal marketing. For example, the entire marketing workforce is trained to act responsibly with a higher degree of accountability in all their undertakings. Besides, the staff of the company as well as all the departments of the company works towards a common goal; which is a great contribution towards responsible marketing.
3. Relationship Marketing
Since its introduction more than four decades ago, the marketing mix management model has been dominating the marketing thought as well as practice. However, this state has been changing in the recent times, as other approaches in marketing are rising. This change has been facilitated by business globalization and the realization of the significance retention of customers and market economies as well as the relationship of customers, besides other factors. Lately, one of the leading marketing models is relationship marketing, (Christian, 1994). Relationship marketing can be defined as, the employment of tactics and other methods to establish long term relationship with clients with an objective of maintaining or rather retaining them. For this relationship to be established, the organization’s clients must be satisfied with its products and services. Most researchers assert that, marketers are in the current times shifting from the old marketing models to this growing model. For instance, this model is being widely used in the service industry, more especially in Australia, Europe and to some degree, in America, (Gummesson, 2008).
Relationship marketing has been developing with time. The term was first talked about in the early 1980s by Berry; but it originated in services industries and business to business due to the extraordinary attributes of these sectors as well as the requirement of closer seller-buyer relationships, (Berry,1995) Various schools of thought have emerged to explain the development of relationship marketing. Some of these school of thought include; the Nordic School, The Industrial Marketing and Purchasing Group and The Anglo-Australian Approach. The Nordic School emerged in the early 1980s and it is well known by a change in focus from traditional marketing concepts’ ideas. It emphasized the importance of industrial marketing and services marketing as compared to customers goods marketing; which a change away from emphasizing on goods and services to the value of the customer, (Gupta, et al., 2006). Proponents of this model asserted that, the heart of building relationships and its maintenance is managing services. This model outlines three central processes of relationship marketing: interaction, dialogue as well as value processes.
On the other hand, The Anglo-Australian Approach has its basis on the work of Ballantyne, Payne and Christopher. It stresses the importance of integrating quality management, customer relationship economics and concepts of services marketing. Based on these three factors, relationship marketing entails the following fundamentals; understanding the essentials of retaining customers, the role played by internal marketing in attaining success in external marketing, extension of relationship marketing to diversified market spheres, and lastly, ensuring that marketing is taken as a cross-functional process, (Christopher, Payne & Ballantyne, 2002).
Finally, it is important to note that relationship marketing is concerned with attracting and retaining of customers. An organization starts by putting into place methods and tactics that makes it easy to attract customers. This is then followed by retaining these clients. Retention of clients can be undertaken through; loyalty cards, establishment of customer services department, as well as offering a variety of products and qualities, (Christian, 1994).
Baines, P., Fill, C. & Page, K., 2008. Marketing. Oxford: Oxford University Press
Berry, L.L.,1995. Relationship marketing of services: Growing Interest, Emerging Perspectives.
Journal of The Academy of Marketing Science, Vol. 23, No. 4, 236
Chaffey, D., Ellis-Chadwick F., Mayer, R. & Johnston, K., 2009. Internet Marketing: Strategy,
Implementation and Practice, 4th Edition. FT Prentice Hall, Essex
Christian, G., 1994. From Marketing Mix to Relationship Marketing: Towards a Paradigm Shift
in marketing. Management Decision, Vol. 32, No. 2, 4-20
Christopher, M., Payne, A & Ballantyne, D. 2002. Relationship Marketing. Creating
Stakeholder Value. London: Butterworth-Heinemann
Coca Cola Company. 2010. Responsible Marketing. Retrieved on 5th July 2011 from
Gupta, S., et al., 2006. Modeling Customer Lifetime Value. Journal of Service Research, Vol. 9,
No. 2, 139-155
Hammond, et al, 2006. Market Orientation, Top Management Emphasis, and Performance within
University Schools of Business: Implications For Universities. Journal of Marketing Theory & Practice, Vol. 14 Issue 1, 69-85, AN 21580261
Mohammed R. & Pervaiz K. 2000. Advances in the Internal Marketing Concept: Definition,
Synthesis and Extension. Journal of Services Marketing, Vol. 14 Iss: 6, 449 – 462
Gummesson, E., 2008. Total Relationship Marketing, 3rd ed. Oxford: Butterworth-Heinemann
Richard, J & Barbara, R.L. 2000. Internal Marketing: Directions for Management. New York:
Tapp, A., 2009. Principles of Direct & Database Marketing, 3rd ed. FT Prentice hall, Essex.