Marketing: Strategic Innovation in Globally Diverse Markets
The aim of this paper is to analyze the individual marketing mix variables and how likely are these variables going to change in the future. This paper will also provide the recommendation for companies regarding the adaptation of marketing approaches in order to gain competitive edge over other companies in the market and the industry.
According to Palmer (2004), marketing mix is conceptual framework that allows managers to identify the needs of the customers so that the manager could provide these customers with products as per their requirement. Furthermore, such tool also helps in devising short term strategies along with long term strategies that can provide the company with an opportunity to enhance its performance.
In order to further explain the concept of marketing mix variables, these variables can be considered similar to the baking cake. As a cake can vary from time to time based on the needs of customers, so can marketing mix. By altering the variables in marketing mix, an organization can differentiate its core product from others in the market just like a baker does to constantly meet the requirements of its variety of customers (Goi, 2009).
Role of Personalized Marketing (one-to-one marketing)
According to Roman and Hernstein (2004), companies are looking for different methods in order to engage with the customers on one on one basis so that the companies could establish trust with its most valuable customers. In order to do so in the most efficient manner, the companies try to do whatever it could to meet the customer’s expectation and avoid spam reactions.
It has been observed that personalization or one-to-one marketing is quite difficult to explain as it requires well established framework. In order to develop a well-established framework, customer’s information is required in order to provide the target audience with their desired solutions at the most feasible time that could enhance the customer’s relationship with the company (Nunes and Merrihue, 2007). As indicated by Peppers and Rogers (1997), personalization is a process which aims to acquire information regarding the customers and further aim to provide the customers with relevant solutions that could enhance the chances of loyalty towards the company by customers.
In earlier days a huge group of customers were provided with standardized products that could satisfy their needs and wants but as the time passed so did the marketing approaches. Recently it was observed that retail giants such as Wal-Mart and others of its kind have shifted from mass marketing approach to personalized marketing. These retail stores have acknowledged the importance and benefits that the organization could achieve by providing its customers with products that they require. To do so, the customers are provided with discounts on the most frequently purchased products. This discount facility is available to only those customers that hold the loyalty card of the company. This indicates that these retail giants keep track of its customers most frequently purchased items and then provide the customers with discount that would further attract the customer to remain loyal to the company regardless of going to other retail stores to purchase the required products and services (Chinta, 2006).
For companies to strive to create a unique product offering for each customer, the company keeps tracks of the purchases and cash flows of customers. This particular information allows the companies to track its customers and the products that its customers are interested in. In order to gain personal data from customers, different companies have introduced services that allow them to gain personal information from the customers. By doing so, the companies can provide the customers with enhanced experience at the retail stores. In addition, being provided with personal information regarding its customers the companies can provide the customers with recommendations specifically tailored for particular individual.
Changing Landscape of Traditional Advertising Methods
Organizations are in between a period of flux which has led the industry to witness some great changes including the way it operates and advertise to attract the customers. It has been observed that many organizations and companies have shifted their focus from traditional advertisement methods to internet as it is the most efficient and effective to attract customers.
Internet as advertisement method has constantly allowed the retailers to provide the customers with eye-catching and attractive products along with their information. With more than millions of active users, companies have shifted their focus from traditional advertisement sources, which once attracted mass audience, to online advertisement as at this moment tweets and likes are on its peak. With such rising interest in customers, companies have focused on online advertisement methods as indicated by Senecal and Nantel (2004).
It has also been observed that with such modern advertisement methods, companies are provided with an additional facility to charge each customer based on his/her level of willingness. On the other hand, this concept of dynamic pricing had already been implemented by Amazon.com once which eventually led to increase in the dissatisfaction level of customers as each of the customer was being offered the same product at different prices (Garbarino and Lee, 2003).
Internet being the fastest and most reliable advertisement method has been adapted by several retailers out of which Tesco, ASDA and Wal-Mart are some of the most prominent retailers. Being provided with social networking sites such as Facebook, Twitter etc. the retailer has access to its customers which eventually helps the retail organization to understand their needs and wants (Chinta, 2006). To provide the customers with their desired products and services, the retailers have used channel of intermediaries. These intermediaries have allowed the retail organizations to provide the customers with the products at the right time and place as retailers are now moving toward pure-play internet retailers rather than brick and mortar retailer (Griffiths and Howard, 2008).
Marketing Changes and Adaptations
In recent years, globalization has played a critical role in enhancing competition in the market. With globalization playing such role, it had been observed that organizations are changing their practices in order to remain ahead of others in the market. According to Engardio, Bernstein, and Kripalani (2003), due to globalization companies have started outsourcing experts and specialists around the world so that the company could change the face of game in the marketplace. Such companies that have relied on outsourcing are IBM, Intel, Microsoft and others in the market. By doing so, organizations are aiming to provide its customers with the best and innovative products that could help the organization to gain superiority in the market.
With the enhanced competition due to globalization, the organizations are provided with another opportunity i.e. advanced technology. For a retailer to have complete control over the market it is essential to introduce and implement technology into the business operations. This has been observed in the cases of Tesco and ASDA; the two retail giants in UK. These two retailers have introduced technology into its core operations which has enabled the retailer to enhance the satisfaction level of customers along with their experience. The introduction of self-checkout counters and self-service has somehow supported the retailers to gain the loyalty and customer satisfaction over time (Chinta, 2006).
Consumers on the Internet
Social networking sites are nowadays commonly used by customers and to attract the potential customers to become permanent one, retailers should develop their portals and pages that could provide the customers with all the necessary information regarding the product along with the prices so that the customers could compare the price of the products offered by others in the market(Riegner, 2007). With the passage of time, the customers have gained substantial control over the media due to which the customers have the ability to influence the brands and other products available in the market. With such communication available at the doorstep of customers, the company has greater chances to establish trust with the customers along with building stronger brand as compared to others in the market. By doing so, retailers and other organizations have gained competitive edge over other in the market.
Business and Product Development Process
Interpersonal communication has always played an integral part in establishing good relation between the organization and customers. As retailers and other organizations are now moving towards online advertisement methods and pure-play internet, online communication among the customers is quite essential. According to Riegner (2007), online communication provides the customers with emotional and practical benefits after engaging in such discussions followed by commercial implications as well.
Being provided with such an opportunity to engage with the customers directly as through the use of such facility, customers from all over the world can exchange information regarding their needs and wants along with their experience regarding the products offered by the company. The use of internet could be regarded as a tool that allows the customers to interact directly with the organizations and has eventually affected the overall organizational strategies in the real world.
With the passage of time, the customers have gained substantial control over the media due to which the customers have the ability to influence the brands and other products available in the market. With such communication available at the doorstep of customers, the company has greater chances to establish trust with the customers along with building stronger brand as compared to others in the market. By doing so, retailers and other organizations have gained competitive edge over other in the market.
According to a report conducted regarding the interpersonal communication, it was observed that email was the dominant form of online communication. In addition, it was also observed that the most frequently used communication method is discussion forums, blogs and text messaging (Riegner, 2007).
This communication medium has helped the retailers all over the world as through blogs and other forums, the retailers can retrieve information that can help the retail business to flourish. With such information and blogs, the retailers can identify the needs and wants of the customers which eventually helps the retailers to mold their products so that the needs and wants of the customers could be satisfied.
Integration of Direct and Interactive Marketing
In order to gain competitive edge over other competitors in the industry, the company must adapt modern marketing approaches that aim to provide the customers with innovative and creative products in the market.
The first and the foremost marketing approach that must be adapted by the organization is personalized marketing. This marketing approach is not yet applied by many of the organization as properly developed framework is missing but on the other hand, this marketing approach has great potential and can benefit the retailers greatly in order to gain competitive advantage in the market (Vesanen, 2007).
Tesco and Wal-Mart are included in few retail organizations that aim to collect information regarding the products purchased by the customers. By collecting such data, the retailers keep themselves aware of the products that are required by the customers and on their frequent purchases they are provided with special discounts. Introduction of loyalty card is yet another marketing approach implemented by the retailers. By doing so, the customers are encourages to purchase from the particular retailer and for each product purchased, the customer gains loyalty points which can be redeemed anytime of the year (Vesanen, 2007).
Personalization for an organization is not a thing that should be neglected as by the use of such process, an organization can differentiate itself from others in the market. In addition, this allows the organization to differentiate its products as compared to others as this factor highly employs changes as required by the customer. Furthermore this personalization has also increased innovation not only in the products and services offered but also in the overall operations of the organizations (Anderson and Billou, 2007).
Internet being the most accessible and reliable source to communicate with the customers, should be frequently used by organizations to interact with its customers. This would allow the organizations to build relationship with the customers along with established trust which would eventually lead to the loyalty and commitment towards the products offered (Riegner, 2007).
Not only this, this advertisement source would bring in customers from all around the world. Such modern advertisement method could also help the organizations to understand the needs and wants of the customers and can provide the customers with products that could satisfy the customers.
Communication is the heart of business. Without proper and appropriate communication with the customers, the organizations would not be able to gain information regarding their needs and desires. With proper communication on blogs and forums, the organizations can look for keywords and the needs of the customers and by keeping the focus on customer’s need, the retailer can provide the customer with the product that could satisfy their needs and wants (Riegner, 2007).
In order to communicate and interact with the customers, the retailers should use social networking sites such as twitter and facebook as both these social networking sites have millions of active users in a month (Riegner, 2007).
For a retailer it is a biggest achievement to expand its business into other region but to do so, several strategies should be taken into consideration. The organizations are provided with several opportunities with globalization and can help the retailer to gain competitive advantage over others in the market (Engardio, Bernstein, and Kripalani, 2003).
Expansion in current market is one of the approaches followed by expansion of business in other parts of the world. With the help of globalization, the organizations are able to attract many customers at a single time which would lead the business to success.
Managing the 5 P’s
In recent years, it has been observed that along with Product, Price, Place and Promotion, People is the fifth element that have been provided with great importance. Since customers are the one that needs to be satisfied with the products and services being offered by the retailer, they have been considered the key ingredient for the success of organizations in the market, more specifically service organizations (Pizam, 2011).
Recently it has been observed that organizations have shifted their focus from being product oriented to people oriented and this has helped the organizations to transform the potential customers into their loyal customers. Due to such changes, it has become critical for the organizations to bring changes in the management as such changes would allow the business to understand the needs of the customers and how to provide the customers with products they require (Pizam, 2011).
The first P is Product. For a product to stand out in a market, it must have some uniqueness that separates the products in the market i.e. USP. For a successful product it is important that it meets the demands of the customers (Pizam, 2011).
The second P is related to the Price that the customers are paying to acquire the product. It must be kept in mind that in such competitive environment, none of the organizations can charge its customers with higher pricing than others. This is because of the increase in competition in the marketplace as other companies are providing the customers with an alternative product. For successful product, the price must be competitive and reasonable so that it could attract the most of the customers in the shortest time (Pizam, 2011).
The third P is regarding the Place. Due to the increase in competition it has become quite important for the retailers to select such location that attracts the most of the customers. In other words, the location must have traffic that could provide the retail store with customers (Pizam, 2011).
Promotion is the fourth and could be regarded as the most important P in such competitive environment. For a product to be successfully attracting customers, it must be highly promoted in the market (Pizam, 2011).
In order to conclude, it could be said that with the passage of time marketing variables have continuously changes and provided the retailers with several opportunities. But with these opportunities, there are several challenges that the organizations must face. These threats or challenges must be handled by the organizations and to do so, changing the marketing strategies is the best possible way. Since these variables have constantly changed in the past and will continue to change in the near future, the organizations must prepare themselves and should accept change in the marketing strategies rather than resisting it as resistance to change can put the survival of business into trouble.
Anderson, J., and Billou, N. (2007). Serving the world’s poor: innovation at the base of the economic pyramid. Journal of Business Strategy, 28(2), 14-21
Chinta, R. (2006). Retail marketing trends in USA and their effects on consumers and the global workforce.Business Renaissance Quarterly, 1(2), 65-79
Engardio, P., Bernstein, A., and Kripalani, M. (2003).The New Global Job Shift.Business Week Online.
Garbarino, E., and Lee, O. (2003). Dynamic pricing in internet retail: effects on consumer trust. Psychology and Marketing, 20(6), 495-513
Goi, C. (2009). A review of marketing mix: 4ps or More? International Journal of Marketing Mix, 1(1), 2-15
Griffiths, G., and Howard, A. (2008).Balancing clicks and bricks – strategies for multichannel retailers.Journal of Global Business Issues, 2(1), 69-75
Nunes, P., and Merrihue, J. (2007).The continuing power of mass advertising.MIT Sloan Management Review, 48(2), 63-71
Palmer, A. (2004). Introduction to Marketing - Theory and Practice, UK: Oxford University Press
Peppers, D. and Rogers, M. (1997).Enterprise One-to-one: Tools for Competing in the Interactive Age. New York: Doubleday.
Pizam, A. (2011). The return of the fifth marketing mix P. International Journal of Hospitality Management, 30(4), 763-764.
Riegner, C. (2007). Word of Mouth on the web: The impact of web 2.0 on consumer purchase decisions. Journal of Advertising Research, 47(4), 436-447
Roman, E. and Hernstein, S. (2004). Opt-in Marketing. New York: McGraw-Hill.
Senecal, S., and Nantel, J. (2004).The influence of online product recommendation on consumers’ online choices.Journal of Retailing, 80(2), 159-170
Vesanen, J. (2007). What is personalization? A conceptual framework.European Journal of Marketing, 41(5/6), 409-418
Wind, J. and Rangaswamy, A. (2001). “Customerization: the next revolution in mass customization”. Journal of Interactive Marketing, 15(1), pp. 13-33.