Ignoring online marketing is like opening a business but not telling anyone.KB Marketing Agency
Work schedules are a great way to ensure that your work tasks remain organised and that you are able to achieve the deadlines that have been set out and agreed upon. Many work teams and organisations employ schedules to coordinate, structure, and manage the flow of activities, people, and resources.
By the end of this topic, you will understand:
- The internal capabilities of a business to harness marketing opportunities
- Ways to best get to know your target market
- The five primary marketing concepts and which one relates to your business
- How to identify direct competitors
There are many factors that influence the successful execution of marketing activities. Three critical factors to ensuring success include understanding your internal capabilities, understanding the market and understanding your competitors. Your internal capabilities and how you use them, play a critical role in your business’s success. McKinsey & Company share in its book, Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds, that companies that use their endowment well and that respond to competitor trends make the best moves for their business.1
…it is your moves—what you do with your endowment and how you respond to trends—that make the biggest difference.McKinsey & Company, ‘Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds’, Wiley, February 2018.
Internal capability includes all skills and resources you currently have in-house, such as:
- Financial situation, including revenue and any debts
- Skills, qualifications and aspirations of existing employees
- Investment in research and development (R&D)
- Experience and learnings from any historical business performance
- Intimate knowledge of products to be offered (in some instances, this alone can set you apart from your competitors)
- Access to influential people
- Relevant laws, regulations, policies and procedures
Understanding your internal capabilities, and analysing them against your budget, will influence the types of marketing activities that are available to you. While internal capabilities are the tools and investments that businesses already possess, or their current state, when a business has a sound grasp of their internal capability, they will also know when it is smartest to outsource activities. Outsourcing may be required or preferred for operational or financial reasons.
Understanding the market you are operating in is essential. Most of the time, when undertaking a marketing activity, you will be working in an existing market. This means there will be other businesses competing in the same market and you will need to find out what they offer so you can determine your unique point of difference or competitive advantage in order to win market share.
Once you determine what your target market is, you will want to research everything about it. Understanding your market’s needs, preferences, behaviours and spending habits will allow you to market your products and services in a way that is most likely to grab attention. Another important aspect to understand about your market is marketing concepts. Marketing concepts are the strategies that businesses use to sell their products or services. These concepts depend on the product they are selling and the business’s target market.
It is important to understand the different types of marketing concepts, as particular markets will be attracted to different types of marketing concepts. Therefore, by identifying the marketing concept that relates to your business, you will be able to narrow down your strategy, target market, and competitors. There are five main marketing concepts. These concepts relate to:
- Production
- Product
- Selling
- Societal marketing
- Marketing
The production concept
The production concept applies when a business’s main priority is the ability to produce products on a large scale. This may be at the cost of quality. A key component to the success of this concept is that products are accessible and affordable. The business relies on economies of scale, where the cost of producing higher volumes of products is economically more efficient than producing lower volumes.
The product concept
The product concept applies when the product itself is the star. The product is made with high quality in mind, and therefore, the price is usually higher than some lesser-quality alternatives.
Some good examples of the product concept are products within the technology industry. The quality of items such as smartphones, computers and even artificial intelligence technologies is ever-increasing. Technology companies regularly offer upgrades to their products and are always striving to design the next big feature. While this seemingly exponential increase in quality is appealing to consumers (think of the images of people camping outside of Apple stores to be the first to get their hands on a new iPhone), it also comes at a major disadvantage: the cost.
At some point, no matter how appealing the quality, businesses need to be mindful of pricing themselves out of the market – unless, of course, this is part of their strategy, where they are marketing to a niche, wealthy market.
The selling concept
The selling concept applies when a business focuses on selling products as its sole priority. Businesses that use the selling concept may apply aggressive marketing or hard-sell techniques to sell their products. These techniques are used to target consumers, whether or not the consumer actually needs or wants the product. This is often at the cost of poor relationship building with buyers, which can mean that repeat sales are low. Accordingly, the selling concept may not be a suitable strategy for longevity in a market.
The societal marketing concept
The societal marketing concept applies when a business takes into account its social responsibility in the products it markets. This may include whether the product is healthy for the consumer, good for the community, or good for the environment.
The societal marketing concept can be an interesting concept in terms of profit and market longevity.
When a business uses the societal marketing concept, it may risk making a smaller profit to ensure ethical considerations are maintained in its products and services. For example, a particular ingredient may be cheaper and produce a similar product; however, if that ingredient is considered to be ethically questionable, the business will opt for a more expensive product that satisfies its ethical concerns. While there may be some margin for increasing cost for products that use ethical ingredients (consider the cost of organic vegetables vs regular vegetables), businesses that use this model need to find a balance with pricing, so as not to deter consumers. This can sometimes mean that the business itself makes a lower profit by choosing the societal marketing concept.
On the flip side, however, businesses that use the societal marketing concept will often have a following of loyal consumers who are prepared to pay a higher price point for ethical products and services. This can also provide the business with longevity in the market.
The marketing concept
The marketing concept applies when a business thoroughly researches its market and develops products according to consumers’ specific wants and needs, which are superior to, or more sought after than, those of their competitors.
Businesses that use the marketing concept focus on keeping their customers happy even as their needs and wants change. A business using this concept may invest heavily in market and consumer research to ensure it can keep up with changing demands while also delivering on satisfaction.
Pros and Cons of Marketing Concepts
Reviewing the market activities of other businesses will help in narrowing down your strategy, target market, and competitors. This review is a work task that requires weighing up the pros and cons of each marketing concept. Then, identify businesses or brands that uses each type of marketing concept as its primary marketing strategy.
Before reviewing marketing activities, whether it be those of your own workplace or another organisation, it is highly recommended to discuss the review process and seek approval from management before starting on any action plans. Approval may be sought in the form of a written email or verbally.
It is important to have the ability to use industry terms and speak professionally when seeking approval from management or when communicating with other staff members in relation to the marketing plan. Verbal communications may consist of a combination of auditory exchanges that may include a variety of:
- tones
- volumes
- questioning techniques
The following list depicts some examples of non-verbal communication skills that can be used with management and other people in the business during a verbal conversation:
- Smiling
- Nodding
- Eye contact
- Body language such as heaving open arms, facing forward in the direction of the speaker
When you have listed the pros and cons of businesses and brands that are using the marketing concepts as their main strategy, discuss with a manager to see if they agree with your findings. Don’t be surprised to find that management and other peers might disagree and challenge your perceptions of the marketing strategies of others. These discussions should be welcomed as it opens up conversations that can help determine accurate findings for the review. Be open to their ideas but also be prepared to explain your reasons of what you have listed as pros and cons under each concept. Take the opportunity to problem-solve together to achieve a suitable outcome for both parties. See the below sample of a completed table that has weighed up some pros and cons for each marketing concept.
| Marketing Concept | Pros | Cons | Business Brand |
|---|---|---|---|
| Production |
Example: Appeals to masses |
Example: Quality is compromised |
Example: Kmart, TPG |
| Product |
Example: High margins |
Example: Niche markets |
Example: Bose, Hugo Boss, SpaceX |
| Selling |
Example: Sales formula can be replicated |
Example: High sales and marketing cost |
Example: As seen on TV, World Vision Australia |
| Societal marketing |
Example: Added value proposition |
Example: High consumer satisfaction |
Example: Tesla, Nudie |
| Marketing |
Example: Not easy to copy by competitors |
Example: Takes time to develop products or services |
Example: Viagra, Apple Watch |
Once you understand your market and who you are selling to, you will want to understand your competitors. This will allow you to build your own competitive advantage to entice customers to buy from you over another provider.
Understanding your competitors includes identifying who they are, what they offer, how successful they are, and (where possible) any future plans they may have. You can use a variety of information sources that provide insight into your competitors. It is important that you are able to interpret the information obtained from these sources and determine how its content can be applied to the business requirements. The following are some of the examples of sources that can be reviewed when understanding your competitors.
Website
The easiest way to find information on competitors is to visit their website. However, the extent to which useful information is readily available will depend on the nature of the competitor. For example, some businesses release their strategic plans and annual reports on their websites, while others prefer to keep this information in-house only.
Social media pages
You will gain a lot from visiting the social media pages of your competitors. Not only will you be able to see the types of people that follow the business, but you will see the questions they ask, the posts they interact with, and much more.
Internet reviews
Internet reviews may be written or fabricated by anyone, including the business itself or its competitors. Therefore, while the information should be taken lightly, you can still get a feel for any specific and recurring compliments or concerns and even how the business deals with its feedback and complaints.
Competitor analysis reports
There are some businesses and institutions that offer competitor analysis reports, usually for a fee. These businesses use cutting-edge analytical algorithms and systems to scan information and prepare reports based on certain criteria.
To assist with your market research, you may like to invest in some reputable market research reports. A good market research report allows you to discover a myriad of insights, from what suburbs have the highest number of young families, to what time your target market is most active on social media. Market reports offer invaluable insights into your target market’s behaviours, which will help in steering strategic planning and future marketing activities.
It is important to remember that just because a business offers a similar service to you, this does not necessarily make it a competitor. Remember to keep in mind the different marketing concepts. Those that are targeting the same market as you are your direct competitors. Factors that can influence whether a business is a direct competitor or not include:
- Location: is this a service that a client needs to travel to? For example, a hairdresser.
- Marketing concept: does the business operate under the same strategy as you? For example, mass-produced vs luxury goods; and does the business cater to the general public or does it market to a particular niche?
- Cost: the cost will help you determine the market the business is trying to reach. For example, some nail salons may charge $40 for a nail treatment, whereas others may charge in excess of $100. There are likely many differences in the way the service is provided, but the end result of painted nails is expected to be similar.
Trend Analysis
A simple tool that can be used in trend analysis is Google Trends. Google Trends culls data from Google searches and allows users to compare the frequency of search terms compared to other similar keywords, different geographic regions, or across language barriers. Data from Google Trends can be sorted for real-time emphasis (the last seven days) or by a specific range (from 2004 up to 36 hours ago). The following table demonstrates a sample of how information gained from this tool can be documented when reviewing and analysing trends.2
| Product | Highest point of interest | Reason for heightened trend | Lowest point of interest | Reason for decline | Current trend | Reason for Current trend |
|---|---|---|---|---|---|---|
|
Example:Tesla electric cars |
Example: March 2019 | Example: Affordable model Y announced | Example: July 2019 | Example: No new information released since June | Example: Increasing | Example: Interest growing as new model reaches release |
| 1. | ||||||
| 2. | ||||||
| 3. |
When having discussions with people in a workplace, you must ensure that you use active listening techniques and appropriate language skills. This may include both professional language with industry terms (where relevant), as well as non-verbal communications like smiling, nodding, and eye contact. Discussions should always be collaborative and serve a purpose where all persons involved are aiming to meet the same end goal.
