Definition of marketing and consumption
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 5177 words||✅ Published: 1st Jan 2015|
Marketing’s role is to encourage consumption (Lazer, 19691). This statement is as true now as it was in 1969
This report explains how the definition of marketing and consumption has changed over the years and but still marketing targets consumer behaviour patterns to encourage consumption.
Past definitions: – “Traditional authorities on marketing concentrated on products and on the sale and purchase of goods and services. They paid little attention to areas like after-sales service, and devoted even less attention to social responsibility or to social accountability”. “Consumption is the utilization of economic goods to satisfy needs”.
Present definitions: – “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others [Kotler and Armstrong – Principle of Marketing]”.
“Consumption is the value of goods and services bought by people”.
Since the first production surplus, marketing has been based on the principle of exchange – interested parties exchanging something of value.
Consumer’s Buying Behaviour
A consumer’s buyer behaviour is influenced by four major factors; cultural, personal, social and psychological factors. These factors cause consumers to develop brand and product preferences. Although many of these factors cannot be directly controlled by marketers, understanding of their impact is essential as marketing mix strategies can be developed to appeal to the preferences of the target market.
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When purchasing any product, a consumer goes through a decision process. This process consists of up to five stages; problem recognition, information search, evaluation of alternatives, purchase decision and post purchase behaviour. The length of this decision process will vary, ranging from shorter routine response behaviour, to limited problem solving and a more comprehensive extensive problem solving. A consumer may not act in isolation in the purchase, but rather may be influenced by any of several people in various roles like friends, upbringing, culture, the media, a role model or influences from certain groups.The number of people involved in the buying decision increases with the level of involvement and complexity of the buying decision behaviour.
There are different types of buying behaviour. Complex buying behaviour is where the individual purchases a high value brand and seeks a lot of information before the purchase is made. Habitual buying behaviour is where the individual buys a product out of habit e.g. newspaper, sugar or salt. Variety seeking buying behaviour is where the individual likes to shop around and experiment with different products. Another buying behaviour is Dissonance reducing, where buyer is highly involved with the purchase of the product as the purchase is occasional or high-priced.
Each of us is motivated by needs. Our most basic needs are inborn, having evolved over tens of thousands of years. Needs or we can say requirements, demands of a person change as the era changes, as the time goes by. Now we will see what motivated individuals in life to achieve. There are different levels of needs.
First, people aim to meet basic psychological needs which are hunger and thirst. After these needs are met then they reach next level to achieve safety needs, which include h job security and concern that the income will be available regularly. Social needs come in the next level, which is the need to belong or be loved is a natural human desire and people do strive for this belonging. Status sometimes drives individual. Hence, the next level which is Esteem need is the need for status and respect within society, the need to have a good job title and be recognised or the need to wear branded clothes. Self-actualisation is the realisation that a person has reached its potential in life.
A successful organisation will not only understand existing factors but also forecast change, so that it can take advantage of change within the environments in which it operates. So PEST analysis is significant step for any organization. Political factors can create advantages and opportunities for organisations. Conversely they can place obligations and duties on organisations. Non conformance with legislative obligations can lead to sanctions such as fines, adverse publicity and imprisonment. All businesses are affected by national and global economic factors. E.g.:- a global credit crunch originating in the USA contributed towards the credit crunch in the UK in 2007/08. As a social factor, organisations must be able to offer products and services that aim to complement and benefit people’s lifestyle and behaviour. If organisations do not respond to changes in society they will lose market share and demand for their product or service. Technology has created a society which expects instant results. This technological revolution has increased the rate at which information is exchanged between stakeholders. A faster exchange of information can benefit businesses as they are able to react quickly to changes within their operating environment. However an ability to react quickly also creates extra pressure as businesses are expected to deliver on their promises within ever decreasing timescales. E.g. Internet is having a profound impact on the marketing. Consumers can now shop 24 hours a day from their homes, work, via 3G phones and 3G cards.
Meeting needs and providing benefits
Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer (P.Tailor 7/00)
Companies come up with the core product. Customer who purchases a camera is buying more than just a camera he is also purchasing memories. In order to ensure that a company’s potential customer purchases its camera, as an actual product many strategies are used like organisationsbranding,adding featuresand benefits to make sure that their product has an edge as a differential advantage over their competitors. On top of this some intangible benefit are given to the augment products, which are after sales service, delivery warranties etc.
It costs to produce and design a product; it costs to distribute and promote a product. Price must support these elements of the mix. Pricing is difficult and must reflectsupply and demandrelationship. Pricing a product too high or too low could mean a loss of sales.
In India, a supermarket named ‘Big Bazaar’ holds record sales on Wednesday as they have special reduced price offers on every Wednesdays. Some organisation sets an initial high price and then slowly lowers the price to make the product available to a wider market. Some seller will consider the psychology of price and the positioning of price within the market place. For e.g. BATA – shoe brand in India charges 199 Rs instead of 200 Rs. Few organisations set premium price in order to attract the people those who believe in status. Recently, many organisations are focusing on the how they could distribute their products in order to increase consumption effectively. In India, there are Nokia Priority centres, where people are ready to pay more and buy mobiles as it gives an assurance that in case of any faulty piece, they can directly approach it. Similarly, Nokia can directly explain the features of the mobiles and the benefits to the customers.
It is said that a successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organisations promotional strategy can consist of Advertising, which is any non personal paid form of communication using any form of mass media. Firms have started to spend a lot on advertising. Another strategy is public relations which involve developing positive relationships with the organisation and media. The art of good public relations is not only to obtain favourable publicity within the media, but it is also involves being able to handle successfully negative attention. Sales promotion and personal selling is the commonly used to obtain an increase in sales short term. Direct Mail is also used which is the sending of publicity material to a named person within an organisation. There has been a massive growth in direct mail campaigns over the last 5 years. Spending on direct mail now amounts to £18 bn a year representing 11.8% of advertising expenditure(Source: Royal Mail 2000).
Sound marketing is an important type of marketing, whether it is in the form of music, songs, the spoken word or noises. Sound marketing enables organisations, to target a sense in addition to visual or sigh. The jingle used in the advert helps increasing the sales. AIRTEL (Indian Mobile service provider) is the perfect example of it.
The theory that the Bottom of the pyramid i.e. consumers with incomes less than $2 per day can be a viable and a profitable segment to market and the onus of these activities is placed on MNCs who have ignored this market till now. So serving the bottom of the pyramid can become a win-win situation for consumers as well as the companies and also serve as a source of innovation. But an organisation cannot satisfy the needs and wants of all consumers. To do so may result in a massive drain in company resources. Segmentation is simply the process of dividing a particular market into sections, which display similar characteristics or behaviour. There are a number of segmentation variables that allow an organisation to divide their market into homogenous groups.
After the process of segmentation the next step is for the organisation to decide how it is going to target these particular groups. Coca Colas original marketing strategy was based on undifferentiated marketing form, where it decided to aim its resources at the entire market with one particular product. Some organizations go for differentiated marketing like airline companies offering first, business (segment 1) or economy class tickets (segment 2). Some organizations believe in concentrated marketing where they focus on a particular group only for e.g. Rolls Royce cars aim its vehicles at the premium segment.
Below is a very basic perceptual map. This is perpetual map of UK chocolate market we can identify brands based on price and quality needed. Belgium chocolates are plotted as high quality and high price, and twix is plotted one low quality low price brand. Once completed the perceptual map could help identify where an organisation could launch a new brand perhaps at the medium price and quality range.
Apart from the above mentioned factors one of the most important decisions a firm can make is about branding. In today’s environment the value of brand is exceptional. Brands have the command of immediate sales; they convey a message of superiority, assurance, and trustworthiness to their target market.
In Principles of Marketing, by Philip Kotler and Gary Armstrong a brand is defined as ‘a name, term, sign symbol or a combination of these, that identifies the maker or seller of the product’.
Brands have to be managed well, as some brands can be cash cows for a company. It is said that in today’s world no product can go without a brand. People often build up a relationship with a brand that they trust and will often go back to time and time again.
Internet branding has now become a crucial element of the branding strategy game. Nike, Adidas have high brand equity. These brand command high awareness and consumer loyalty.
Off lately, many organisations are using green marketing, which includes not only altering the advertising of a product but also activities such as altering production processes, changing packaging and modifying products that possess environmental characteristics. People associate terms such as recyclable with green marketing. There is evidence to suggest that consumers are increasingly choosing and avoiding products based on their environmental impact. Many organisations have responded to these changing consumer preferences through the introduction of green products. For example: Nottingham City Transport (NCT), in order to increase the passenger’s number started Eco-Friendly buses. Since then there is a big increase in passenger number and people have switched from their cars to NCT buses.
Societal marketing is also new concept which has an emphasis on corporate social responsibility and suggests that it is not sufficient for a company to only focus on exchange relationship with customers might not be in order to sustain long term success. Marketing strategy rather should deliver value to customers in a way that maintains or improves both the consumer’s and the society’s well-being.
Ethical and socially responsible practices are simply good business, resulting not only in favourable image, but ultimately in increased sales. Research executed in many countries has consistently shown that consumers express a more positive attitude toward a company that practices societal marketing, and additionally prefer to purchase the products of these companies.
Marketing as both a process and a philosophy has developed as society has developed. When man first realised the benefits of trade, markets were both local and relatively independent. The relationship between producer and consumer was direct and personal. The Industrial Revolution leads to changes in production and consumption. Mechanisation, mass production, and labour specialisation lead to dramatic increases in production, and with it, a need for distribution. Socially-responsible companies hold a competitive edge over their competitors. The demands of society are growing due to globalization, increase in population, government policies, growth in economy, change in social structure, improved standard of living etc. through which we can conclude that the marketing and consumption go hand in hand as seen from the figure. Market contributes to the society directly or indirectly which in itself grows also. The main objective of Marketing to encourage consumption still remains true and will remain true in the coming year.
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The term Green Marketing came into prominence in the late 1980s and early 1990s.The American Marketing Association (AMA) held the first workshop on “Ecological Marketing” in 1975. The first wave of Green Marketing occurred in the 1980s.
Due to factors such as increased media coverage, increased awareness of environmental issues, raising pressure from environmental groups, stringent legislation and major industrial disasters (McIntosh, 1991; Butler, 1990; Tapon and Leighton, 1991; Charter, 1992; Wagner, 1997) the environment has become a mainstream issue and consequentially consumers are more concerned about their habits and the effect that these have on the environment. (Krause, 1993). All of mankind has limited resources on the earth, with which she/he must attempt to provide for the worlds’ unlimited wants. In market societies where there is “freedom of choice”, it has generally been accepted that individuals and organizations have the right to attempt to have their wants satisfied. As firms face limited natural resources, they must develop new or alternative ways of satisfying these unlimited wants. Ultimately green marketing looks at how marketing activities utilize these limited resources, while satisfying consumers wants, both of individuals and industry.
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According to market researcherMintel, about 12% of the U.S. population can be identified as True Greens, consumers who seek out and regularly buy so-called green products. Another 68%can be classified as Light Greens, consumers who buy green sometimes. “What chiefmarketing officersare always looking for is touch points with consumers, and this is just a big, big, big touch point that’s not being served,” saysMintelResearch Director David Lockwood. “All the corporate executives that we talk to are extremely convinced that being able to make some sort of strong case about the environment is going to work down to their bottom line.”
There is a common perception among the general population that the term green marketing refers only to advertising or promoting products that possess environmental characteristics. People associate terms such as recyclable with green marketing. Green marketing, while incorporating these claims, is a broader concept. It includes not only altering the advertising of a product but also a variety of activities such as altering production processes, changing packaging and modifying products.
There is evidence to suggest that consumers are increasingly choosing and avoiding products based on their environmental impact. Many organisations have responded to these changing consumer preferences through the introduction of green products. (Carson and Fyfe, 1992).
For example: Nottingham City Transport(NCT),in order to increase the passengers number and customer satisfaction, they started Eco-Friendly buses and did a strong marketing of it. Since then there is a big increase in passenger number and people have switched from their cars to NCT buses.
The societal marketing concept is an enlightened marketing that holds that a company should make good marketing decisions by considering consumers’ wants, the company’s requirements and society’s long run interests. It is closely linked with the principles of Corporate Social Responsibility and of Sustainable Development.
The concept has an emphasis on social responsibility and suggests that it is not sufficient for a company to only focus on exchange relationship with customers might not be in order to sustain long term success. Marketing strategy rather should deliver value to customers in a way that maintains or improves both the consumer’s and the society’s well-being.
Most companies recognize that socially responsible activities improve their image among customers, stockholders, the financial community, and other relevant publics. Ethical and socially responsible practices are simply good business, resulting not only in favourable image, but ultimately in increased sales. Research executed in many countries has consistently shown that consumers express a more positive attitude toward a company that practices societal marketing, and additionally prefer to purchase the products of these companies.
In today’s increasingly competitive and changing marketplace CSR has become a competitive advantage. Specifically, consumers’ perceptions of a firm’s corporate social responsibility have been
shown to influence their attitudes toward a company, particularly when committing to a purchase.
CSR is reflected in practice by businesses adopting a societal marketing focus.
Societal marketing has been shown to have a positive impact on consumer attitudes and
behaviour in various countries. Indeed many companies attribute societal marketing as a major success factor .Societal marketing as a business philosophy can be implemented in many ways including concern for the environment, employee schemes and involvement in specific social causes or cause related marketing. Despite the increasing support for CSR and societal marketing, a scarcity of research still exists in this field, particularly in relation to corporate image.
Examples:- Various automobile manufacturers are focusing more on producing CNG cars that is not only environmental friendly but it is also very economical. So this trend is getting popular very quickly. One can verify it by observing the increasing number of CNG stations.
- ^William Lazer, “Marketing’s Changing Social Relationships,” Journal of Marketing, Vol. 33 (January 1969), pp. 3-9
- ^Philip Kotler and Sidney J. Levy, “Broadening the Concept of Marketing,” Journal of Marketing, Vol. 33 (January 1969), pp. 10-15
- Andrew Takas, “Societal Marketing: A Businessman’s Perspective”, Journal of Marketing, Vol. 38, No. 4 (Oct., 1974), pp. 2-7
- Russell Abratt and Diane Sacks, “Perceptions of the Societal Marketing Concept”, European Journal of Marketing, Vol. 23, Issue: 6, Page: 25 – 33 (1989)
- Andrew Crane and John Desmond, “Societal marketing and morality”, European Journal of Marketing, Vol. 36, Issue: 5/6, Page: 548 – 569 (Jun 2002)
- Friedman, 1962 “The social responsibility of business is to make a profit”
The basis of all Marketing is always about consumption
Competition between the companies indirectly encourages consumption as they will market more on their products
Marketing also works towards creating demand
Marketing today works more towards encouraging consumption, through technological advances and faster reach through advances in media
Hence the statement: “Marketing’s role is to encourage consumption” is more valid today than in 1969
Hanas, Jim (June 8 2007), “Environmental Awareness Has Not Only Tipped in the Media — It’s Hit Corporate Boardrooms as Well” (PDF),Advertising Age
http://en.allexperts.com/q/Marketing-1090/Societal-Marketing-3.htm — Imp
need to go to the hairdresser’s anymore to have your hair coloured: L’Oréal launches Récital on the mass consumer market: hair colouring kits designed for women to use in the comfort and privacy of their own bathrooms, so they can colour their hair at home in complete safety. François Dalle’s vow “to make beauty accessible to as many women as possible” starts to take shape.
© L’Oréal / DR
In response to the wishes of women who prefer not to perm their hair, L’Oréal launches Mini Vague, a completely new technology that gives the hair softness, body and bounce. The secret is a gentler mix that results in a more natural wave. It is so successful that “mini vague” actually enters the French language as the term to describe a lighter kind of perm, the equivalent of the demi-wave in English.
These are the formative years of “Le Grand L’Oréal”.
At the instigation of Chairman François Dalle, the Group starts to expand internationally.
Acquisitions of strategic brands mark the beginning of a period of spectacular growth for the company. Emblematic products come into being.
The company motto is “Savoir saisir ce qui commence” (seize new opportunities)
There is no single type of beauty; it is a multiple-faceted quality framed by different ethnic origins, aspirations, and expectations that reflect the world’s intrinsic diversity.
With a portfolio of powerful, international brands, L’Oréal enters the 21st century by embracing diversity in its global growth agenda.
Headed since 2006 by Chairman Lindsay Owen-Jones, and Chief Executive Officer Jean-Paul Agon, the Group continues to make new acquisitions to cover the world’s varied cosmetic needs, and to undertake new socially responsible initiatives in the interests of sustainable development for all.
For the first time in the mass market, L’Oréal Paris’ Men Expert offers men a range of advanced skincare adapted to each type of problem. A new approach that contributes to the boom in male cosmetics. 2004
L’Oréal Plénitude. The mass-market skincare range
For the first time in the mass market, L’Oréal Paris’ Men Expert offers men a range of advanced skincare adapted to each type of problem. A new approach that contributes to the boom in male cosmetics. sophisticated and highly developed segment, i.e. anti-wrinkle creams. The Plénitude slogan: “Delays the signs of aging”.
- Intrinsic qualities
- Emotional aspect
- Specific information
- Postpone product
- Buying cheaper products
- Facilitate the capacity to produce and make mass consumption feasible
- Stimulate consumption which lead to the development of domestic industry(manufacture or service)
Creating value for customers.
Identifying, anticipating and satisfying consumer requirements.
Sustainable Development- Providing Customers with choices to meet these needs.
- Socio-ecological Role : Meeting Needs without disrupting environmental balance (not affecting the environment in any bad way)
- Arise public awareness about social responsibility.
Conclusion: indirectly increase consumption
Kotler suggested that a product should be viewed in three levels.
In 1776, when Adam Smith said, “Consumption is the sole end and purpose of production” he was describing what in recent times has become known as the marketing concept (McDonald & Keegan, 1997, pg. 1).
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