Marketing Week 2 – Understand the Marketplace and Consumers

There has certainly been no letup with the reading and videos this week either. Another week of very intense knowledge absorption. Building on the first week’s learnings, this week continues to expand the marketing concept. The first issue to be covered was to look at how a business creates value for customers and builds relationships with them. Customer relationships and maintaining them is critical for the survival of a business or organisation. Some organisations that have shifted their focus from customers to shareholders could well reflect on the basics of marketing and the importance of customers.

Analysing the Environment

The value of conducting a market situation analysis is highlighted so organisations can be proactive in their approach to marketing. Such an analysis involves looking at both the micro-environment and the macro-environment of the organisation.

The micro-environment is comprised of all the stakeholders involved in the organisation’s value delivery network. A value delivery network is defined as being involving the organisation and its suppliers, distributors and customers. It is all effectively a partnership between all participants to ultimately deliver value to the customer. Competitors and government can also impact on service delivery and are also included in micro-economic players in the marketplace.

The macro-environment on the other hand is composed of those bodies that can both provide opportunities and also threaten an organisation. These can be issues outside of an organisation’s control such as economic factors, laws, bureaucracies, and natural phenomena.

Tools and Frameworks

This area provides the basis for reviewing environments. Two of the popular frameworks are discussed which are the 5Cs model and Porter’s Five Forces. Personally, I preferred the 5Cs and found it more relevant in the context of the types of work I would do. The next step on completion of the selected framework is to complete the traditional Strengths, Weaknesses, Opportunities and Threats (SWOT) matrix.

Marketplace Information and Research

The significant process here is the collection of as much information about customers as possible. This will assist in determining marketing strategies. Information is collected by way of a Marketing Information System. Such a system would hold information from as many sources as possible including internal information, competitive marketing information and also any research that has been done.

All this data provides the base for your marketing research which initially requires a definition of the problem you will research. Once completed, a research plan can be drawn up and implemented. The research plan will identify the sources of all data to be used in the market research. There are two types of data here; Primary Data and Secondary Data. Primary Data is raw data collected for the first time for research purposes. Secondary Data on the other hand has already been stored, possibly for other issues, but not the one at hand. It can be used for assistance in resolving the current issue, but with caution depending on the source. Secondary Data is also usually quite affordable as much of it is collected by government agencies for example and made public. The Australian Bureau of Statistics (ABS) census data is a good example.

Consumer Buying Behaviour

Now we start getting into a bit of psychology. In the prescribed text, Kotler et al. ^[1] (2020) the author talks about the five stages in the adoption process. They are worth mentioning here for clarity.

1. Awareness – Consumers hear about the product but do not have any information.
2. Interest – Consumers start looking for information about the product
3. Evaluation – Consumers weigh up if it is worth trying the new product
4. Trial – The consumer tests the product, but on a small scale to further assess value
5. Adoption – The consumer is happy with the product and becomes a regular user

In addition to the above model, there is also consideration of where consumers sit in the marketplace regarding the adoption of products. There are Bell Curves that exist to model adoption times but the stages are:-

1. Innovators – the pioneers. They take risks with new ideas but there is an old saying that the pioneers are the ones with the arrows in their backs. I should know because I am one!
2. Early Adopters – also adventurous and will take a risk. They trust their instincts about the value of a product and will often go against the herd to be different.
3. Early Majority/Mainstream – Products have gained a degree of acceptance and this group is now happy to buy and use.
4. Late Majority/Mainstream – Conservative and sceptics. Wait for the proof to be in before committing to the product.
5. Laggards – The very last to market. Often resistant to change and adopt when there is no choice but to do so.

Business Buying Behaviour

Purchases by businesses still involve people. Relationships are then very important. Business Buying Behaviour is a topic all by itself and too lengthy to enter into here. If you are interested in exploring this in more detail, you will find a reasonably brief article at this link.

Assignment 1

Following on from last weeks work, this week requires the identification of the analysis tool I will use for my market situation analysis. For me, this will be the 5Cs. I will also need to write the Market Situation Analysis and start drafting the rest of the Assignment.

Conclusion

As mentioned earlier, this has been another intense module and I could have written far more in this post. The module has covered an understanding of the marketplace and the needs, wants and behaviour of customers both in the consumer and business areas.

References

1. Kotler, P, Armstrong, G, Harris, LC & He, H 2020, Principles of marketing, 8th edn, Pearson, Hoboken.[↩]
2. slide team, CC BY-SA 4.0, via Wikimedia Commons[↩]