Marketing is a set of activities which are involved in the transfer of goods and services from manufacturer to the final consumer. It is an important managerial process that pertains to communicate the worth of services and products to customers with the aid of promotional techniques. This aspect further helps in encouraging the sales and increasing productivity and profitability of the company (Lyons, 2012). Therefore, marketing can be regarded as the backbone of business success. The main objective of marketing principles is to ascertain the needs of customers and finding suitable methods to fulfill those needs.
In the present business report, different aspects of marketing principles within an organization are explained. The report also states the implication of marketing orientation within a business enterprise. In order to intensify the study, the big brand in the retail industry of the UK, J Sainsbury has been selected. It provides a wide range of products and services with the help of its retail stores, supermarkets, etc.
1.1 Marketing and its concepts
Marketing is a method by which organizations interact with its target customers to develop a business relationship which is fruitful to both the parties. In other words, marketing is a managerial process of communicating the value of offerings to customers in order to boost the sales of their products and services. Therefore, marketing is a business tool that is used by Sainsbury to increase its sales and profitability. Further, it involves various concepts of marketing which are explained as follows:
Production Concept: According to this concept, the customers prefer those products which are easily available at low cost (Wicker and et. al., 2012). Therefore, Sainsbury takes effective measures to cut down the excess cost of production and provides goods and services at the minimum possible cost. The economies of scale help company at providing quality products at reasonable prices.
Product Concept: This concept states that customers prefer products that are unique and of the best quality. Therefore, the quality of products of the company is a key factor that helps the company in attracting a large number of customers and retaining the loyal one. Sainsbury uses its marketing competence to intensify the quality of their products and services.
Selling Concept: As per this concept, the customers buy those products and services which are highly promoted. Therefore, Sainsbury adopts innovative promotional methods to attract the target customers and to retain them in the future.
Marketing Concept: It is the most effective and innovative method which states that in order to earn lifetime loyalty of customers, it is important for the company to concentrate on the needs and demand of customers (Henley and et. al, 2011). This further leads to satisfaction among customers. Therefore, Sainsbury conducts market surveys and ask feedback from customers to provide goods and services as per the wants of them.
Societal Marketing Concept: With this concept, Sainsbury takes suitable measures to ensure the sustainability of the environment while providing goods and services as per the needs of customers. The main concern of the company under this concept is regarding the overall welfare of society.
Analyze the Marketing Opportunities: For this aspect, Sainsbury conducts market surveys to collect information about customers, their needs and preferences. This further helps the company in identifying marketing opportunities to attain competitive benefits.
Selecting the Target Market: With this process, Sainsbury selects a suitable market to satisfy the needs of customers of that segment with the help of attractive marketing strategies. For this aspect, Sainsbury uses segmenting, targeting and positioning methods (French and Bennett, 2015).
Preparing the Marketing Mix: In this respect, the company prepares a mix of marketing elements, that is, product, price, place, and promotion to prepare a marketing strategy which further helps Sainsbury in accomplishing its overall marketing objective.
Managing Marketing Efforts: In this step, Sainsbury analyzes the marketing environment, designs a suitable plan as well as implements and controls the plan. Therefore, the company manages the marketing efforts to get the best results.
1.2 Benefits and costs of marketing orientation
The marketing orientation is an organizational approach which is used to design products as per the customer’s wants and preferences. This further involves adopting effective measures to identify the customer’s requirements and desires. Sainsbury incurs heavy expenditure on finding the needs of consumers and the way in which they perceive the products of the brand. Thereafter, the company does intensive research to identify prevailing fashion trends and to develop strategies and products accordingly.
The advantage of marketing orientation is that it helps the company in designing products and services that match the needs of customers. This further helps in retaining the consumers to have repetitive purchase from them (Riggs, 2011). Thereafter, successful marketing orientation leads to long term benefits in the form of a constant increase in the profitability of Sainsbury. Further, there is an important cost that is associated with market research and analysis. It involves the cost of hiring sales personnel who conduct marketing, the technical infrastructure used to gather customer data, cost of appointing marketing executives, etc. Further, it is important for a company before conducting a marketing orientation to evaluate the benefits and costs of it. Therefore, the cost does not exceed the profit that is realized from the marketing orientation.
2.1 Macro and micro factors that affect the marketing decisions
There are various intrinsic and extrinsic factors that affect the ability of Sainsbury to perform various business operations. The macro economy refers to the study of the entire economy of the nation. Further, it can be said a study of the aggregate economy. Therefore, in regards to those external factors that impact the entire economy. However, the macroeconomy refers to a study of a particular industry, company or market. It refers to decisions regarding the distribution and allocation of those. It refers to those internal factors that impact a particular firm or industry. They are explained as follows:
Illustration 1: Micro and macro factors
(Source: Salkin, 2009)
Micro Environment Factors
- Suppliers: The suppliers can affect the operations of Sainsbury if they enjoy a monopoly and their goods are an important input for the firm.
- Distributors or Dealers: They are responsible for the movement of products from the company to final customers. They further help in identifying the target customers and in encouraging sales as well (Borges and et. al, 2005).
- Customers: The customers play a crucial role for Sainsbury as they consume the goods and services of the company and generate profits.
- Competitors: They represent the rival firms that sell identical products of Sainsbury and cause a negative impact on the sales of the company.
- Public: They represent the group of people that can be impacted and affect the performance of Sainsbury. Therefore, it is significant for the organization to ensure maximum satisfaction to the public.
Macro Environment Factors
- Demographic Factors: It involves factors like age, income, education, etc. that are used by the manager of Sainsbury to split the market and to devise marketing strategies accordingly.
- Political and Legal Factors: It represents the rules and regulations laid down by the UK government and EU policies that affect the functioning of Sainsbury.
- Economic Factors: It refers to the economic policies and environment that affect the demand and supply of the company.
- Social and Cultural Factors: society can affect and can be affected by the operations of Sainsbury. Therefore, interest and welfare of society must be considered by the company (Ettouzani and et. al, 2012). In this respect, a firm should take effective steps to minimize the negative impact of its operations on society and culture of the UK.
- Technological Factors: It refers to the techniques that help Sainsbury in getting a competitive advantage from its rivals. Therefore, effective techniques are used in the production process to develop innovative products and services.
Concluding the aforementioned aspects, it can be said that macro and micro analysis is very important to ensure smooth functioning of Sainsbury. After studying the impact of macro and micro factors, business enterprise can take important marketing decisions. Further, while taking business decisions it can consider macro and micro factors and reduce their impact. Since, macro and micro factors may impact the ability of Sainsbury to serve the customers by studying them, there impact can be reduced. However, organization can also ensure flexibility in its operations by adapting to the micro and macro changes. With this aspect, company can get competitive benefit as compared to other rivals and ensure growth and success in dynamic environment.
2.2 Segmentation criteria used by Sainsbury
Market segmentation is a process used by Sainsbury which involves division of total market in different segments in order to reach at the potential customers and to fulfill their needs. For instance, fashion apparels can be selected for further study, segmentation criteria of which are explained as follows:
Behavioral segmentation: Sainsbury is providing range of fashion apparels in its brand name. In order to attract and target the customers, marketing manager of Sainsbury can divide the customers of the basis of their behavior, brand loyalty etc. With this aspect, firm can identify the customers who are willing to buy products of company even at high price and those consumers who buy the product only if it is cheap (Dennis and et. al, 2006). This segmentation helps Sainsbury in offering different types of products to different customers.
Psychographic factors: It refers to factors like psychology, personality and lifestyle of customers that impact the purchase decision of customer (Martin, 2009). The marketing manager of Sainsbury divides the market on the basis of psychographic factors to get maximum benefits from the available market and products.
2.3 Targeting strategy for fashion products of Sainsbury
Targeting strategy refers to the selection of target customers to whom Sainsbury wants to offer its products and services. It is the next step after the segmentation process which implies the use of strong targeting strategy to reach at the potential customers (Carlson and Manktelow, 2013). It further facilitates strong communication of value of product to the target customers. This helps in spreading the awareness of product in market and in boosting the sales of fashion products. Therefore, successful targeting helps Sainsbury in increasing its customer base and providing value to customers. However, there are different strategies that can be used by Sainsbury to cover the wide market. Therefore, company can adopt differentiated marketing strategies for promoting its branded and non branded products.
Furthermore, to market the branded fashion products Sainsbury can do marketing through famous celebrities and models. This will build a unique image of its fashion apparels and distinguish its branded fashion products while for non branded products normal promotional techniques like advertisement on social networking sites, television, fashion magazines. Therefore, with the help of differentiated marketing techniques, Sainsbury can target high income customers who will prefer branded clothes and middle class customers who favor non branded and discounted clothes (Dent, 2011). This strategy help in influencing the customers to buy both the types of products. With this strategy a standard can be provided to various types of fashion products available of the brand.
2.4 The affect of buyer behavior on marketing activities of Sainsbury
Buyer behavior refers to conditions that stimulate a individual to purchase and use the products of Sainsbury. Thereafter, buyer behavior have direct impact on the marketing strategies of company. Therefore, it is required for organization to make significant changes in the marketing activities of Sainsbury to get maximum attention of potential customers and increase the productivity of business (Dennis and et. al, 2006). However, company can use behavioral and pyschographic segmentation to study the buying behavior of individuals.
For an example of customer behavior, it can be said that people with high income are concerned about prices as they prefer high priced and branded clothes. Therefore, company can link the brand of Sainsbury with the status symbol of people in its marketing activities. This will motivate customers to buy the high end products of brand. Furthermore, the buying behavior of middle class customers is based on the price of products. They preferred to have quality products at low price. (Beller, Weiss and Patler, 2007). Therefore, Sainsbury can initiate promotions that meet with the needs of customers and stimulate them to buy non branded products and branded clothes available at affordable prices. For this aspect, company can use marketing on social networking sites, e- shopping sites, point of picture display that results in repetitive purchase.
To target the customers under psychographic segments, company can use current fashion trends. For an example: In respect with the psychographic segments, the customers under this segment prefer stylish and unique products as per the prevailing market trends. The company has to study the market and should come up with product as per current trends. Salisbury can promote its products on fashion magazine and conduct fashion shows to promote its clothes. It will motivate people under psychographic segment to make repetitive purchase.
2.5 Positioning of fashion products of Sainsbury
With the help of positioning strategy, Sainsbury can inhabit a impressive position in the mind of customers. This strategy further help brand in getting a distinct position in market as compared to its rival. Therefore Sainsbury can use Ansoff matrix to develop as suitable position of its brand in market. It further includes four growth strategies; market penetration, development, product development and diversification. Therefore, for its non branded products company can use market penetration which involves selling current products in current market. Sainsbury can cut down the prices of products for market penetration. Thereafter, market development strategy enables company to sell current product in new market (Brassington, and Pettit, 2010). Therefore, company can one new outlets in countries where its not functioning. With the help of product development strategy, Sainsbury can design new customized product accordance with the needs of consumer. Thereafter, diversification strategies enable company to provide new product in new market. Hence, company can use market penetration and product development strategies to gain a striking position of its brand in market. They further differentiate fashion products in two segments and increase the sales of product.
3.1 Development of product to attain competitive advantage
Competitive advantage refers to benefits that are available to Sainsbury over its rivals which help company in getting competitive edge over the present rivals. In order to gain distinct position in market, Sainsbury can develop new products with innovative features (Chaffey and et. al, 2006). Thereafter, company can also develop customized fashion apparels according to the demand of customers. The customized fashion products means, Sainsbury can make tailor made products as per the desires of customers. In this respect, customers can suggest the stitching style, fabric that can be used, buttons, color combination, design, length and other features they want in their fashion apparel. The customized product is not provided by any of the rivals of Sainsbury therefore with this aspect, company can get competitive advantage. This will further help in boosting the sales of brand and increasing the productivity of company. The main objective of customized clothing is that product is designed according to needs of customer which increases the satisfaction of consumer (Martin, 2009). This also enhance the brand loyalty and trust among customers which results in repetitive purchase of products of Sainsbury. In order to gain competitive advantage in the market place the company has to focus on the prices and value that is rendered to the customers. The business entity can attract the customers by offering the best quality products at the lower price. The products can be of good quality as compared to the competitors and the prices must of low. To a contrary note, the product with higher prices must be having USP and unique features (Dennis and et. al, 2006).
Figure 1: Change in Demand and Supply due to fluctuation in price
(Source: Demand and Supply, 2015)
For example: in case Sainsbury provides quality customize product it can set the prices low to the competitors. The prices can vary according to the demand of product. As earlier stated that the economic situations affects the business hence low demand of product generally lead to low prices however higher demand lead to higher prices.
Further, the company can use different offers to attain competitive advantages like, attracting accessories with fashion apparels at minimum price etc. Hence, customized products will give more flexibility to customers that will result in competitive advantages to Sainsbury over its rivals in an effective and innovative manner.
3.2 Distribution Arrangement of Customized Clothes of Sainsbury
A well-structured distribution system provides a great support in the success of business. Therefore, a integrated distribution system ensure satisfaction to consumers as well as give standard reputation to brand in market. The customized clothes should be distributed in a mode from which it can be purchased by the prospective customers with minimum efforts. Even customers prefer those products which is available in a convenient manner (Ettouzani and et. al, 2012). Therefore, Sainsbury distributes its product in such a manner that its wide range of offerings are accessible to customers within their comfort zone. At present the company is providing valuable services through supermarket, superstores that facilitate easy availability of products to large number of customers (Borges and et. al., 2005). Individuals belonging to behavioral segment mostly are mostly girls and ladies who like to visit malls and prefer excessive shopping. For attaching customers from such segments Sainsbury can sell customized clothes through their own dedicate outlets in shopping malls. For attracting psycho graphic Segment, apart from the dedicated stores, online stores are the best place to offer custom made fashion apparels. Thereafter, Sainsbury can distribute its fashion products with the help of online shopping sites where products are available 24*7 (Dent, 2011). In addition to this, it is widely used and most innovative method that help company in getting large range of response and increasing the sales and profitability of Sainsbury. Further, online distribution is also regarded as best method as it solve the problem of out of stock and enhance the sales of company. The company can also distribute its customized clothes with the help of own dedicated stores available in different parts of UK.
3.3 Setting price for Customized Clothes
Setting right price for the right goods is very crucial as price is a key factor responsible for the sales of product. Since, the sales of company are declining from past 5 years it is required for Sainsbury to set appropriate price for its products. This will further help in improving the sales of company and sustaining the cut throat competition from brands like, Burberry, Marks and Spencer etc. that provides luxurious clothing apparels. Therefore, it is required for Sainsbury to give proper consideration on the price factor of its product (Borges and et. al, 2005). The company can use two different pricing strategies to cater the demands of two segment. Therefore, for behavioral segment company can use competitive pricing and charge prices resembling with the competitors. Thereafter, for pyschographic segment, Sainsbury can adopt price skimming strategies which means high prices are charged in the beginning of launch of product and lowering it down with the time. The customized clothes are not provided by any of the rivals of Sainsbury therefore, company can easily do price skimming and charge high price for providing custom made designed clothes. Thereafter, for non branded products Sainsbury can adopt value based pricing which refers that customers have to pay for the value received. Therefore, with the help of different pricing strategies company can target wide range of customers and increase the sales of company.
3.4 Promotional Practice for Customized Clothes of Sainsbury
The promotional activities will assist Sainsbury in communicating the value of product to target customers. This further help in encouraging the sales and profitability of company. Therefore, it is required for the marketing manager of company to select appropriate promotional technique for the customized fashion apparels of company. However, the manager may adopt two different promotional techniques. In order to attract the customers of behavioral segment, company can use advertisement in television, social networking sites, point of sales and hoardings (Ellis, 2005). This will generate awareness among public about the benefits of customized clothing and boost the sales of company.
Thereafter, to attract the customers of pyschographic segment, Sainsbury can market its products with the help of celebrity endorsements. This will further lead to the brand building and increase the sales of high end fashion products of company. Company can also advertise its customized fashion apparels in e- shopping sites, fashion magazines. In addition to this, company can conduct fashion shows where fashion apparels of Sainsbury will be promoted by fashion models (Ettouzani and et. al, 2012). Further, personal selling is another best option for promoting the sales of customized clothing products of Sainsbury because customer can easily explain its needs and desires associated with thee product.
3.5 Additional Elements of the Existing Marketing Mix
Apart from the 4 Ps of marketing; product, price, place and promotion Sainsbury can take help of additional marketing mix for framing suitable marketing strategy. These elements further assist Sainsbury in reaching the customer in best possible manner. Therefore, given below are the additional elements of marketing mix that must be incorporated into the marketing plan of Sainsbury.
- Physical Evidence: In order to ensure repetitive buying from the customer it is important for a company to pay special consideration on the looks and layout of the store. With this aspect, Sainsbury should modify the design of store in order to attract the customer to visit and buy the custom made fashion products (Grinstein, 2008).
- Processes: It is important for company to improve the manufacturing and selling processes to ensure the superior quality of product. This will further help in encouraging the sales of Sainsbury. Thereafter, the company will assure the quality of raw material used in production so that good quality of customized product can be guaranteed.
- People: It is required for company to appoint fashion designers who will assist in designing the fashion clothes as per the customized needs of customers (French and Bennett, 2015). Thereafter, company requires staff who will deal with customers in warm manner and understand there needs and preferences.
4.1 Marketing mix for two different segments
Sainsbury can prepare contrasting marketing mix for identified segment. With this aspect, company can target different market segments with different marketing techniques.
Marketing Mix for Behavioral Segment
The marketing manager of Sainsbury can divide the customers on the basis of their behavior, brand loyalty and buying pattern.
- Product: The company is offering customized fashion clothes as per the demands and desires of customer. The product is of standard quality to keep the reputation of company
- Place: Individuals belonging to this segment mostly are mostly girls and ladies who like to visit malls and prefer excessive shopping (Henley and et. al, 2011). In order to target them, Sainsbury can sell customized clothes through their own dedicate outlets in shopping malls
- Price: The prices of product can be kept little high as company is providing products as per the needs and preferences of customers.
- Promotion: The company can use personal selling where sales man will explain the attributes of customized product and customer can also detail out its requirement.
Marketing Mix for Psychographic Segment
- Product: The customized fashion apparels should be according to the current fashion trends.
- Place: Apart from the dedicated stores, online stores are the best place to offer custom made fashion apparels.
- Price: Though the price is not a major issue for the customers within a psychographic segment, in order to sustain the competition and earn the profit, the company can adopt price skimming strategy (Dooley and et. al, 2012).
- Promotion: Sainsbury can use promotion through celebrity endorsements. Addition to this, online marketing can also be used.
4.2 Difference between marketing to business rather than customers
Marketing the customized fashion products to business is totally different than marketing it to customers (Wicker and et. al., 2012). Marketing to business is a tough process and require strong efforts to be put in by the marketing manager of Sainsbury. The difference is explained as follows:
|Marketing to Business||Marketing to Customers|
|It involves minimum intermediaries.||It involves too many intermediaries|
|The company uses direct channels to communicate to the prospective customer.||The company uses indirect direct channels to reach the target customer.|
|The objective of target business customers behind buying the product is to increase their own profit (Berthon and et. al., 2008).||The customer purchases the product for their personal use.|
|Engine optimization and websites designing are some marketing techniques used for promoting a product to business.||Social media marketing, celebrities endorsements, advertisement are some marketing tools used for advertising product to customers.|
In a nutshell, it can be concluded that marketing principles play a significant role in the success of business enterprise. The customized fashion products can assist company in boosting its sales and increasing the profitability of company. They will further ensure the maximum satisfaction to customer. Company can use identified strategies for their segmentation, targeting and positioning of their custom made fashion products to build customer value and increase the customer base of Sainsbury.
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