1. Market Research and its use in a marketing plan - Market Research (Pages: 77-106)
A good example for demonstrating market research is Airbnb. Hotels are pretty expensive. There are single travellers who want to reduce expenses by living in cheaper single rooms or shared accommodations. There are people who travel with family and want to stay in a house which would be less expensive than a hotel suite. Hotels are expensive and give people with lesser options. Let's talk of it from a different angle now. Suppose I live in a single bedroom apartment. I am planning to travel to Europe for 2 months. But I would still have to pay rent for my apartment for those 2 months without even staying, which means I am having to spend more money. Now that we have talked of the problems, what is the solution? Airbnb. Airbnb opens up shared, single room, full house accommodation options for people who are looking for more compatible and cheaper options. It allows people who are looking to utilise unused rooms in their house, people who are away from home for vacation to use their house space and make extra cash. Moreover, it has a very comprehensive insurance policy which prevents issues and damages. Not to mention, it has an exceptional customer service facility which helps to track down issues and problems.
Founded in 2008, Airbnb now has a revenue of almost 900 million USD and is expecting the revenue to grow up to 10 billion USD by 2020. The company is now spending money to grow all across the world. This innovative business is a result of excellent market research and using that research to make a brilliant market plan. They understood the market demand, created a solution for the market, communicated it to its potential market and delivered it to its customers.
2. Who are the competition for your favourite product? – Micro Environment (Pages: 51-54)
Let's suppose iPhone to be my favourite product. I am a big fan of iPhone and am always eager to have the latest version of it as soon as it is released. The mobile phone market is one of pure competition. There are numerus competitors who offer undifferentiated products and no one has market power. However, the top competitors in this industry at the moment are Apple and Samsung. It is a brand competition between the competitors as products are very similar and over similar benefits, features and prices.
When I was buying my iPhone 7 plus, the biggest competitor for it was probably Samsung S7 Edge. The major competing areas between the two were camera features and complexity of design. The iPhone 7 plus was mainly gaining more focus due to its new dual lens camera feature which gave a DSLR camera effect when used in portrait mode. This outclassed the camera of Samsung S7 Edge as the other features such as front camera were pretty similar. However, the design of S7 Edge was very sleek as it was a completely new design and looked very stylish whereas the iPhone 7 plus had a similar design like the iPhone 6. Samsung powered by Android provides with a more flexible operating system which is compatible with more devices and apps. On the other hand, iPhone powered by iOS provides with a more user friendly, speedy, smooth and stable operating system.
When it comes to the pricing, this is where other phones like Huawei, One Plus etc. come into the scene. They provide similar features with a much cheaper price tag. The Samsung S7 Edge and iPhone 7 Plus have a similar price tag so this is where the other lower priced products sneak in.
3. PESTEL and how this affects the introduction of a new product or service – The Macro Environment (Pages: 55-60)
Uber can be used as a great example for PESTEL analysis. This is a relatively new service which has taken the world by surprise. The entry of this new service has impacted the business of taxis and other transportation businesses. Founded in 2009, the company had a revenue of 6.5 billion USD in 2016. Following is a detailed PESTEL analysis of Uber:
Uber has a very controversial tax policy. They save a big amount of money by transferring the liability of payroll taxes to the drivers who happen to be independent contractors. Due to its global distribution of income channels, they have many pathways of reducing their taxes.
Uber has had the biggest impact on reducing unemployment rates. This can be taken as a mean of making extra cash or a full time independent job where you are your own boss. Uber has given jobless people an avenue for making money and has severely boosted economic growth. A 50% rise in the number of self-employed drivers in cities have been seen due to Uber.
From a social perspective, Uber has made a massive change. It has opened up an earning method for people of all ages and backgrounds. Due to its flexible and unique mechanism, anyone and everyone can use it for making money.
Needless to say, Uber is the biggest example of how technology is changing the world. Uber is literally nothing but an app. Not any product, not any big shot office, it's just an app which has generated a revenue of 6.5 billion USD. This demonstrates how proper use of technology can change lives.
Uber is creating an alternative for taxi and personal cars. This is reducing the purchase of taxis and cars which is playing a role in the reduction of carbon emission. The lesser the number of cars, the lesser the pollution. Due to this, people are now utilising the space in their car more extensively which is solving transportation problems which links back to environment again.
Being a very complex service, Uber has a very sound legal mechanism. It has a very strong insurance policy to protect its drivers and also to ensure safety of customers.
4. SWOT analysis and its use in the marketing plan - Situation Analysis and Marketing Planning (Pages: 61-69)
Optus is a good example for SWOT analysis. Following is the SWOT analysis of Optus:
Optus has a very well-developed network all across Australia which gives it a fantastic network coverage. One of its other key strengths is it's My Plan Plus data sharing which allows to use one internet connection to use multiple devices without slowing of speed. Optus is the favourite brand for people using multiple devices for internet. They only charge for one connection and there is no additional ongoing fee. There is no limitation of number of products used so it doesn't limit the number of devices used.
Although Optus covers a vast range of areas, it's signal strength is often challenged to be weak. Lack of internet strength is one of its major weaknesses. Often times the 4G is not available and it drops back to 3G which is a big problem for a business in this 4G dominant competitive business industry.
Optus can work on its internet and network strength. As they are the first movers in the industry, they can gain more control over the market if they reduce their errors. They can also work on doing some targeted campaigns such as special deals for students etc. to capture markets where opponents have a stronger hold.
Telecom industry is the most competitive industry as there is higher chances of cost fluctuation. Telecom companies such as Vodafone has much cheaper deals in comparison to Optus. A few days back, my friend was using Optus. She was paying 30 AUD for 3 GB internet per month. I was using Vodafone and I was paying 32 AUD for 10 GB internet per month. When I told my friend about this, she immediately switched to Vodafone. This demonstrates how companies such as Vodafone is gaining more market share by offering cheaper deals.
5. Segmentation, targeting and positioning in marketing (STP): Current trends in the industry of your choice – Markets: segmentation, targeting and positioning (Pages: 183-212)
In this broad field of business, segmentation, targeting and positioning - STP is a very efficient way of doing business. It gives a clear understanding of the market and helps to plan business accordingly. If there is a mismatch between any of these 3 factors, more often than not that business will fail. We can use the example of luxury car industry. Let's use BMW, a luxury car brand, to understand this mechanism. If BMW targets general people as its target audience, they will fail as general people cannot afford BMW. Following is the STP analysis of BMW:
Segment: Luxury cars for affluent customers
Target Group: Rich professional and affluent families
Positioning: Eco-friendly and technologically advanced brand which boasts innovation in its products to give a unique driving experience
Using this analysis, BMW prepares its business plan. They are not competing for quantity, they are competing for providing better quality. This sort of purchase is a one off. People don't buy cars every day. The amount of purchase per customer is limited so it is very important to maintain good customer relations as customer reviews have a big impact in the decision making of purchase of such products. People take a long time to investigate before opting to buy this type of products and are less likely to experiment as it is highly costly. Therefore, the margin for error is very little. With so many competing companies, having a well refined STP is very important for a business such as BMW.
6. Marketing Ethics – Ethics, corporate social responsibility and sustainable marketing (Pages: 15-22)
In this competitive era of business, often times businesses tend to use unethical means to gain business. Marketing being the most impactful way of gaining business, it can be misused very easily to gain profit. This is why, it becomes very important to regulate marketing ethics.
Let's take into account the example of world famous burger chain McDonald's. The happy meal marketing of McDonald's has always been a very controversial topic. It can be regarded as unethical as it lures kids by using the incentive of giving away popular toys for free to consumers. Kids being kids tend to purchase the happy meal for the sake of that toy and this increases the consumption of junk food which is not a healthy practice.
The world has seen a global rise of children getting affected by obesity which is mainly caused by junk food. If this sort of highly sensitive age group targeting continues, the number of children suffering from unhealthy food practices will increase. Children are the most vulnerable group. They have a very low understanding of healthy food values and can be easily manipulated by businesses. It is easier to distract children in comparison to adults. At such a tender age, we care more about purchasing a burger from that fancy Ronald McDonald statue shop than from a healthy food shop. It is cooler to have a happy meal toy and posing with the Ronald McDonald statue than having a healthy meal.
Marketing is a very good tool of establishing business. It gives newcomers the avenue to take on established brands and grow in the industry. Unethical use of marketing should be prevented as it creates unfair practices. Brand value is the biggest asset a company can have and thus, it is essential to have strong marketing ethics.
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