Grechikho M.

Bukovyna State Financy Academy

The elements of marketing and their relationships

 

There are many different definitions of marketing. Let’s consider some of the following alternative definitions:

“The all-embracing function that links the business with customer needs and wants in order to get the right product to the right place at the right time”.

“The achievement of corporate goals through meeting and exceeding customer needs better than the competition”.

“The management process that identifies anticipates and supplies customer requirements efficiently and profitably”.

“Marketing may be defined as a set of human activities directed at facilitating and consummating exchanges”.

All these definitions are right and they try to embody the essence of marketing:

-                    Marketing is about meeting the needs and wants of customers;

-                    Marketing is a business-wide function – it is not something that operates alone from other business activities;

-                    Marketing is about understanding customers and finding ways to provide products or services which customers demand.

The following diagram summarizes the key elements of marketing and their relationships [2].

Marketing research, as a sub-set aspect of marketing activities, can be divided into the following parts:

-                     Primary research (also known as field research), which involves the conduction and compilation of research for a specific purpose.

-                     Secondary research (also referred to as desk research), initially conducted for one purpose, but often used to support another purpose or end goal.

There also exist additional modes of marketing research, which are:

-                     Exploratory research, pertaining to research that investigates an assumption.

-                     Descriptive research, which, as the term suggests, describes "what is".

-                     Predictive research, meaning research conducted to predict a future occurrence.

-                     Conclusive research, for the purpose of deriving a conclusion via a research process [3].

A marketing audit is a comprehensive, systematic, independent and periodic evaluation of a company's marketing assets. It is an effective tool in reviewing the competence of a marketing strategy, analyzing the objectives, policies and strategies of the company's marketing department as well as the manner and the means employed in attaining these goals.

Because of the constantly varying business environment, marketing audit is frequently required, not only at the beginning of the planning process, but along with the implementation stage, providing also ground for evaluating possible future courses of action.

Marketing audit on a regular basis is a strong reference point, reflecting evolution in external business environment, internal experience and strategy development.

The marketing audit focuses on three key headings:

§                    The external marketing environment

§                    The internal marketing environment

§                    Evaluation on the current marketing plan

External environment consists of economic, political and legal factors and concentrates on clients and competition.

Marketing audit of the external surroundings analyses the customers, their needs and how to meet them, their behavior and decisions, perception of products and brands, segmentation, targeting and positioning on the market. The nature of competition is also studied, concerning its concentration, profitability, strengths and weaknesses, plans and strategies. New entrants on the market are also studied as well as the substitute products, the influence of supplier [3].

The cultural nature of the external environment consists of education levels and standards, religion and beliefs, as well as lifestyle and customs. Demography plays a key role in marketing audit of the consumers, reflecting on growth distribution, age, evolution of technology and information systems as well as marketing communication and media. The external economic conditions consist of indicators as unemployment rates, inflation levels, interest rates, economic growth, taxation and average disposable income. Political and legal landscaping concern laws, regulations, minimum levels of taxes or wages and maximum levels of prices or quotas.

Internal environment focuses on the resources the company has at hand as labor, finance, equipment, time and other factors of production. It also analyses the marketing team concerning structure, efficiency, effectiveness, correlation with internal functions and other organizations. The internal marketing planning process, its accuracy and actuality, the product portfolio, new products, pricing and distribution are areas the marketing internal audit is concerned in. It also focuses on market share, sales, profit margins, costs and effectiveness of marketing mix.

The marketing audit studies also the current marketing plan, focused on objectives, strategies and the marketing mix used to achieve these goals. It also evaluates budgeting, staffing, training, developing, experience and learning. The current marketing plan concerns also the market share, financial targets as profit and margins, cash flow, debt and other indicators that need to be balanced.

There are several approaches that can be used, for example SWOT analysis for the internal environment, as well as the external environment. Other examples include PEST (political-economic-social-technological) and Five Forces Analyses, which focus solely on the external environment. Using SWOT a company lists its advantages and disadvantages, strengths and weaknesses compared to its competitors or similar products providers. It also includes an analysis of the external factors that could help or hinder company's chance of success, as well as an evaluation of internal practices and operations [4].

The marketing mix – the strategic combination of product decisions with decisions regarding packaging, pricing, distribution, credit, branding, service, complaint handling, and other marketing activities.

Its elements are the basic, tactical components of a marketing plan. Also known as the Four P's, the marketing mix elements are price, place, product, and promotion [1].

As a conclusion, marketing is a complex area of business, selling, market research, transportation, storage, and advertising. Marketing means the movement of good and services from manufacturer to customer. The main elements of marketing are marketing research, marketing audit and marketing mix.

 

References:

 

1.                             Bebykh V.V. Basis of Economics and Finance: A manual for students of economic specialties of higher educational establishments / Bebykh V.V. – Chernivtsi: BSFA, 2008. – 264 p.

2.                             Cherenkov V.I./ Evolution of marketing theory and the transformation of the dominant paradigm of marketing, Messenger St. Petersburg University (2004).

3.                             Hall, Robert E., Taylor, John B. Macroeconomics: theory, performance, and policy. – 4th ed. W.W. Norton and Company, 2006. – 637 p.

4.                             Hyman, David N. Modern microeconomics: analysis and applications. – 2th ed. Irwin, 2009. – 689 p.