50-200 word discussion on marketing discussion

 

Answer these questions on the following case study:

 

How does the marketing process help you to avoid the mistakes Hydrotech made? Which of the four fundamental truths of marketing did Hydrotech ignore?

   

You must post at least once to each required discussion with at least 50 words, and your post must fulfill the following requirements:

What your post should NOT be

There is no need to post a lengthy, essay style response. Please keep your post under 200 words.

 

Make it Your Own Work

Your contribution to a discussion post must represent your thoughts, ideas, and/or opinions, and must be composed in your own words.

You are welcome to include citations from the Web or other sources that you feel may be related to the topic. However, such citations should be used only as a frame of reference for adding your own thoughts in your own words.

Verbatim citations from other sources, including the Web, without additional commentary in your own words, do not meet the criteria for meaningful contribution to the required discussion and will not be considered acceptable. In all cases where you reference the writings of others or copy and paste content from other sources, including the Web, you must cite the source appropriately. In the case of Web content, that includes providing the URL. In other cases, you should include, at a minimum, the author and title of the work you are copying.

    

four fundamental truths of marketing and the consequences of ignoring them:

 

1. A superior product or facility is no guarantee of success. What one customer views as superior, another may view as average or unimportant.
2. How you define the customer often defines the marketing strategy, and quite often the firm’s success.
3. Customer requirements change all the time for a variety of reasons. Therefore, research, not experience, tells us what the customer wants.
4. Increasing competition leads to increasing customer choice. This leads to the increasing importance of and emphasis on delivering customer value to achieve success.

    

Transcript: Hydrotech Vacuum Cleaner Case Study

 

Product specifications for the Hydrotech Vacuum, the most technologically advanced vacuum on the market today:

 

• The Hydrotech is the most powerful and complete vacuum available today. It traps 99.9% of dirt, pollen, dust and other irritants using its patented Ionic-Scrub technology—and doesn’t spew pollen and dust back into the air like other Vacuums. The Hydrotech is a much more advanced piece of equipment than other vacuums on the market.
• The Hydrotech is one of the most popular vacuums in the Health Club industry, because it stands up to any challenge.
• It’s favored by many smart consumers in the upscale private sector.
• If consumers really care about cleaning, then they need a Hydrotech. Studies have shown that no other vacuum comes within 20% of the cleaning power of the Hydrotech.
• It starts at $1,200.
• With regular maintenance, and emptying of the water reservoir that traps what the Hydrotech picks up, this vacuum will provide years of service. It does take some training to understand how to carefully clean the Hydrotech after each use.

 

Corporate Strategic Goals Summary

 

To continue to grow we need to expand our customer base. After successfully gaining product recognition and steady sales results in the consumer market and health industry, the next obvious market for our company is the hospitality industry. For the Hydrotech Company, the advantages of making sales to the hospitality industry are many, the big one being that a sale to a consumer is one vacuum, but a hotel would buy multiple units. Further, in the hospitality industry vacuum cleaners are replaced approximately every three years. Once staff are trained to utilize the dramatic cleaning power of a Hydrotech, the results will create return customers. We did some market research of potential customers to see what Hydrotech’s selling points would be.

 

Hydrotech Market Research

 

In our market research, we uncovered the following data points:

 

Consumer Feedback

 

• A standard vacuum returns a high percentage of the dust and airborne allergens that it encounters back into the air.
• A Hydrotech vacuum removes 99.95% of them; 89% of hotel visitors rated this attribute as “very important”.
• 80% of hotel visitors rated room cleanliness as “very important” to the quality of their experience.
• 55% of hotel visitors said allergies were an issue for them; 40% of visitors use medication to treat allergic symptoms.
• 60% of hotel visitors said they have had experience staying in a hotel where the room cleaning was sub-par, and it influenced their decision to not return for a follow up stay.

 

Manager Feedback

 

• Managers prefer to have one vacuum cleaner brand for all areas so maintenance is simple and replacement parts do not have to be stocked for different brands.
• Commercial vacuum cleaners also have to be much sturdier than the vacuums used by consumers for their homes.
• The list price of a commercial vacuum cleaner is around $500-$600, but discounts are routinely given by vendors to make a large sale. Housekeeping Directors can usually negotiate prices of $350-$450 for each unit purchased.
• Housekeeping Directors also prefer upright vacuum cleaners with only one attachment that cannot be removed—as one Director noted, “fancy, removable attachments get lost and are seldom used.”
• Ease of operation for the vacuum cleaner is essential.
• Commercial vacuum cleaners for guest rooms typically weigh about 18 lbs and are 12-15 inches wide so they can go under and behind furniture.
• Vacuum cleaners for hotel public areas are generally much bigger, wider and more powerful then room-use models; they often are self-propelled.

 

Corporate Sales Report Results

 

Despite the best efforts of our talented sales team, including the introduction of an installment payment plan, we are very disappointed with our sales volume to date. Further analysis is needed to examine why we have not achieved the same success in the hospitality industry that we have enjoyed in other market segments.

    

Transcript: Marketing Concepts

Definition of Marketing

The American Marketing Association defines marketing as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

This new definition positions marketing as an activity instead of a function. It identifies marketing as a broader activity in a company or organization, and not just a department. The new definition also recognizes that marketing provides long-term value as well as the short-term benefit of exchange of money for the shareholder and the organization.

Concept of Exchange

The essence of marketing is an exchange between two parties, meaning one party is willing to give up something (often money) in exchange for something he or she would rather have. Exchange occurs when one social unit (person or organization) exchanges something of value with another social unit.

Conditions for Exchange

Six conditions must exist for an exchange to be able to occur:

· First, two or more social units must be involved.

· Second, the parties must be involved voluntarily—that is, each party must be free to accept or reject the other’s offer.

· Third, each must have needs that must be satisfied.

· Fourth, each party must have something of value to exchange.

· Fifth, the parties must believe that they will benefit from the exchange.

· And finally, the parties must be able to communicate with each other, and deliver the goods or services to be exchanged.

The Marketing Concept

The Marketing Concept is a philosophy that guides the firm in how it conducts its business.

The Marketing Concept suggests that an organization should aim all its efforts at identifying and satisfying consumer needs.

The Marketing Concept is based on three fundamental beliefs:

· First, all planning and operations should be customer-oriented.

· Second, all marketing activities in an organization should be coordinated.

· And third, customer orientation and coordination of activities are essential to achieve the organization’s performance objectives.

Strategic Marketing Concept

However, some observers have said that the focus of the Marketing Concept was too narrow, because it failed to account for the larger business and social environment. Consequently, there have been efforts to extend the Marketing Concept to create a philosophy more attuned to the realities of today’s business environment.

One such extension is the Strategic Marketing Concept.

Noting that the Marketing Concept does not adequately consider a firm’s competition, the Strategic Marketing Concept suggests that a firm must satisfy customer needs while sustaining a competitive advantage to ensure long-term profitability. That is, a firm must have dual goals: satisfying customers and outperforming the competition on one or more key factors.

For example, Tune Hotels is a rapidly growing lodging chain designed to provide real value to the large population at the base of the population pyramid. Tune Hotels’ business model embraces many of the efficient operating characteristics pioneered by low-cost carrier airlines such as Southwest Airlines, RyanAir, and Air Asia.

For Tune Hotels, this includes:

1. Internet distribution direct to customers,

2. Aggressive use of price to stimulate demand and maintain high occupancies,

3. “Opt-in/opt-out” amenities,

4. High operating efficiencies, and

5. A simple and consistent operating model that gives the customer a significant value proposition.

Using ten tiers of room rates, Tune can offer incredible value for guests willing to book months in advance; this represents a creative marketing opportunity for developing markets that have rapidly growing, large populations with limited disposable incomes. Guests can access a quality, compact, clean guest room for less than US$5.00 per night, including all fees, and pay only for the amenities they require. Prices are kept low because incremental revenue is generated in every way possible, including the selling of advertising space throughout the hotel’s physical structure.

Societal Marketing Concept

Another extension of the Marketing Concept is the Societal Marketing Concept, which addresses the criticism that although the Marketing Concept may lead to business success, it may encourage actions that conflict with a firm’s responsibility to society. Thus, the Societal Marketing Concept evolved to resolve what is known as “the micro-macro dilemma.” That is, what is good for some producers and consumers may not be good for society as a whole.

The Societal Marketing Concept recognizes that the market includes not only buyers of the firm’s products, but also other people affected by the firm’s operations. It also means the firm takes a long-term view of customer satisfaction.

For example, in one region of Cambodia, every tour bus company stops at a particular wat (a Cambodian temple) starting at 4:00 in the evening for the express purpose of letting tourists view the sunset from the top of the hill where the wat is located. Although including this scenic view increases the satisfaction of the tour bus companies’ customers, the vast number of tourists clambering around the hill are destroying the ancient wat, so future generations will be unable to enjoy it. If the tour companies were practicing the Societal Marketing Concept, they would identify another venue that would provide equal customer satisfaction and would also protect the wat from destruction, especially since the customers are there to view the sunset, not the wat.

Firms that practice corporate social responsibility are utilizing the philosophy of the Societal Marketing Concept.

Applying Marketing Concepts

So which of these marketing concepts is the most appropriate for your organization?

In their 2008 article on the relative merits of the different marketing concepts, Ward and Lewandowska indicate that in volatile, uncertain business environments, following the simpler Marketing Concept strategy of customer orientation seems to be most effective. In stable business environments, it is better to use the Societal Marketing Concept and competitive-based Strategic Marketing Concept.
All strategies come with caveats and marketing is no different. In very rare conditions, utilizing any form of marketing may waste resources. These limited conditions include:

· When the customers are satiated to the point they will not make any further purchases

· When a product that customers want will not be made available

· When the cost of gathering the information about customer needs exceeds the revenue it will generate

· When the firm is restricted in what it can exchange

Marketing Myopia

The Marketing Concept suggests that an organization should aim all its efforts at identifying and satisfying consumer needs.

Businesses that define themselves in terms of goods and services rather than consumer needs often find themselves engaging in narrow, short-term thinking, which is sometimes called “marketing myopia.”
The term “marketing myopia” was coined by Ted Levitt in a 1975 essay published in the Harvard Business Review. When an organization suffers from marketing myopia, it defines its business strategy too narrowly, to the point where it cannot adapt to evolving consumer needs.

Service-Profit Chain

Another critical concept in the hospitality industry is the service-profit chain.

The concept of the service-profit chain was originally introduced by Heskett and others in an essay published in theHarvard Business Review in March-April 1994. It has been widely embraced by the hospitality industry because the model contends that if the organization treats employees well, employees will be more satisfied and have greater loyalty and productivity. In turn, increased employee productivity will increase focus on providing an excellent customer experience, and increase customer value and satisfaction. Because satisfied customers are more loyal to the brand and more willing to shop with the firm, the internal service focus leads to improved firm financial performance.

Extended Service-Profit Chain Model

Most recently, in the March 2009 issue of Journal of Marketing, Christian Homburg, Jan Wieseke, and Wayne D. Hoyer published research that demonstrated that customer satisfaction resulted more from employee-company identification than from employee satisfaction. In this complementary model, employee-company identification leads through improved customer focus to customer-company identification. This directly influences customer loyalty and customer willingness to pay. As in the traditional service-profit chain, these factors lead to improved financial performance.

These two complementary models make up the extended service-profit chain.

Transcript: Marketing Mix: The Four Ps of Marketing

Product

Product means identifying and developing the goods and services that consumers want or need. Often this involves in-depth market research.

Place

Place is offering products in a location so that they are convenient to the guest. For example, the number one hotel attribute for which a customer selects a particular hotel over that of a competitor is the convenience of the hotel’s location.

Price

Setting the price is an essential step of the process. A price must serve many functions. It must yield a profit, it must provide value to the guest, and it has to take into account the price of competing goods and services.

Promotion

Promotion involves letting guests know about the product through advertising, personal selling, and other forms of marketing communications.

Transcript: The Marketing Process Continuum

Mission statement

The mission statement should answer the following questions about the business:

· Who am I?

· Type of hotel—product focus and need

· Quality level—luxury, first-class, budget

· Business mix

· What are the key market segments I serve?

· What makes me unique?

· Salience, determinance, and importance

· Who are the key competitors whose success directly affects my business?

· Who are my constituents—formal and informal groups (employees, unions, suppliers, regulators/inspectors, and so on)—whose efforts on my behalf may contribute to success?

· How will I improve over the next 3-5 years?

The answers to these questions help organizations define their target markets and their business mix.

Strategy

Strategy involves matching opportunities with corporate capability. The strategic window of opportunity is a limited period during which the combination of an opportunity and the firm’s ability to exploit it exists.

Breakthrough Opportunities are opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. There must be a match or “fit” between the target market opportunity and the company’s resources.

Competitive Advantage means that a firm has a marketing mix which the target market sees as better than a competitor’s mix. The goal of strategic planning is to gain a sustainable competitive advantage.

An organization with a production orientation would focus on achieving a competitive advantage by increasing production efficiencies to develop a production cost advantage. A company with a sales orientation would develop a competitive advantage by having a more persuasive sales message. A firm with a marketing orientation would achieve a competitive advantage by satisfying consumers’ needs.

Unless the company has some overriding competitive advantage, the target market selected should be served by only a few, small competitors.

Analysis

There are two schools of thoughts regarding what happens after an opportunity is identified. The traditional belief is that marketers must conduct an environmental analysis to analyze the sociocultural, demographic, economic, technological, political and legal, competitive, and ecological environments. Marketers use the data they’ve gathered in an environmental analysis to conduct a SWOT analysis, identifying the strengths, weaknesses, opportunities, and threats associated with their enterprise. In concert with the identification of organizational resources, this enables organizations to define marketing objectives and a unique competitive advantage.

The opposing, and more nascent view, known as the Effectual Approach, is that analogical reasoning based on experience should be used to make marketing decisions, whereas predictive information should be ignored or given little weight. The goal is to control outcomes, co-create value through partnerships, and transform situations to achieve desired results.

Read, Stuart, Nicholas Dew, Saras D. Sarasvathy, Michael Song, and Robert Wiltbank (2009), “Marketing Under Uncertainty: The Logic of an Effectual Approach,” Journal of Marketing, 73 (3), 1-18.
Tactics

Under the traditional approach, organizations develop product, place, price, and product strategies for each target market based on resource and capability constraints; develop actionable tactics to implement strategy; and identify all resources needed for implementation.

As part of this stage, they also create a set of tools such as budget and pro-forma income statements for the next five years. These are used to perform a business analysis to ensure the direction the firm is taking will be a profitable one, to determine the actual cost of the business tactics, and to identify how much income the firm expects to generate. In addition, accountability controls and methods of evaluation are developed to assist with the review process that will follow at a later time.

Contingency plans are also created so that organizations are prepared to respond rapidly to minor changes in their situations.

Following the effectual approach, the belief is that markets and products can be broadly transformed when moving along the path from concept to acceptance. Thus, alternative markets are more likely to be considered, pricing is likely to follow a skimming strategy, and channel strategies are more likely to focus on partnerships serving a narrow customer segment. Succinctly, the effectual approach is focused on relationships, networking, equity, co-creation, humans, and operant resources.

Review

During this phase, marketers re-examine strategies to ensure their continued fit with the organization’s defined objectives as well as the prevailing environmental constraints. Further, they review and evaluate the effectiveness of their tactics based on the accountability controls, methods of evaluation, and contingency plans they established earlier.

Strategy

On the basis of their review, it may be necessary to revise strategies and even, in the most extreme circumstances, the mission statement. Such revisions lead to consequent revisions in tactical implementations, which are followed by another review cycle, another round of revisions, another review cycle, another round of revisions, and so on.