ACCA - F1 ACCOUNTANT IN BUSINESS
UK's Chartered Institute of
Marketing is 'the management process responsible for identifying, anticipating
and satisfying customer needs profitably.'
Customer of buyer bargaining power is studied earlier
Porter's five forces. Here we see who the customers are and how are they
segmented. Firstly, the world's population is the biggest set of customer any
organisation can acquire and retain.
Start with a simple question. Are all those individuals and
families from Asia and Africa living under poverty and earning couple of
dollars a day are customers for a company producing smart-phones worth hundreds
of dollars. Or ask why Apple (iPhone) launched 5c. Alternatively, is privileged
upper class individual / family, a customer for street fast food owner? See not
only individuals are customers. One organisation in supply chain can be the
customer and other the producer. Government can also be the customer and it is
always a supplier of infrastructure required by the organisation. Understanding
these variables help simplify the concept of market, customer and their needs.
Considering points discussed above organisations define
their position and area in the market. This activity is called market
segmentation. Traditionally market is segmented using geography (country,
region), demography (age, sex), psychograph (lifestyle, attitude) and behaviour
(loyalty, comparison in price and features).
Marketing mix is the set of controllable variables that the
firm can use to influence the buyer responses (Kotler). These variables are
commonly grouped into four classes.
McCarthy 4 P's of market mix: Product, Price, Promotion and
Place / Distribution. The table below lists some variables within each class.
Product
|
Price
|
Promotion
|
Place/Distribution
|
Features
Quality
Service
Look
Packaging
Brand
|
Level
Discount
Allowances
Payment terms
|
Advertisement
Publicity (selection of product location in store- e.g. in
front of entry gate)
Personal selling
Sales promotion (Buy 2 get 1 free)
|
Distribution channel
Outlet location
Inventory location
Distribution coverage
|
Product: Goods or services which address consumer needs.
Price: Company's acceptable exchangeable monetary value to product
offered in market.
Place: The way producer reaches the buyers.
Promotion: Activities which create awareness about existence
of product in market.
ACCA Article: The role of marketing
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