Are Consumers Central to Marketing Activities?

In view of the dynamic nature of the marketing environment, to what extent do you consider consumers to be, in practice, central to marketing activities?

Words count: 1621 words

 

“Marketing is the analyzing, organizing, planning, and controlling of the firm’s customer-impinging resources, policies, and activities with a view to satisfying the needs and wants of chosen customer groups at a profit.” (Kotler and Keller, 1967) [1]

The main purpose of any business is to make profit. To do so, their customers are necessary. The role of marketing is to anticipate and identify consumers’ needs and wants, in order to satisfy them efficiently and profitably.2

In view of the dynamic nature of the marketing environment, to what extent are consumers, in practice, central to marketing activities?              
           First of all, it is necessary to define what characterizes the marketing environment, and in what way this environment is dynamic. Secondly, we will see how the consumer is central to marketing activities. Finally, we will discuss about the relative importance of the consumers in these activities and the other factors that can also influence them.

The marketing environment consists of external factors that affect the companies and their ability to satisfy customers.[2]  There are two aspects to this marketing environment: the macro-environment, and the micro-environment.

The PESTEL factors are the factors found in the macro-environment: political, environmental, social/cultural, technological, economical and legal.[3] They are societal factors, thus not controllable; and the companies need to adapt to these factors.              
In the macro-environment is included the demographical factor. The study of the demographic environment can help predict the size of the market of a certain product.             
For example if the number of elderly people is going to rise, the potential market for retirement homes will grow. The same goes for a change in the number of children, which could impact the number of schools and teachers needed.[4]

Companies need to adapt to changes in the micro-environment as well. The factors in the micro-environment are the ones close to the company, making them easier to control:  customers, competitors, distributors, suppliers, and other departments within the company.
For example, if a company has competitors satisfying the same needs with a similar product but at a lower price, it won’t be able to sell its product and make profit out of it.

Companies make use of marketing research and marketing intelligence to collect information about the marketing environment in order to adapt their marketing strategies. Marketing takes place in a dynamic environment: these external factors change constantly, and companies need to be aware of these changes taking place in the marketing environment in order to adapt themselves efficiently and effectively, and be able to keep on answering consumers’ needs and wants.[5]

To satisfy their target consumers, marketers need to understand them. They need to study the existing and potential markets. Resources need to be efficiently managed in order to meet the identified needs in these markets.2

Marketing orientation is important because different customers have different needs. In order to meet the specific needs of each customer, firms have to adapt. Answering everyone’s needs is not a realistic thing, which is why segmentation is used. Segmentation is the method used to separate the population into specific segments, which contains customers with similar needs. Understanding the needs of these segments of population will allow the determination of the marketing strategy that will be used in a specific business plan.[6]

The marketing strategy determines the actions that will be taken over time to achieve the objectives of the company. Marketing decisions are based on the 4Ps, also called marketing mix: Product, Price, Place and Promotion. The four components of this marketing mix are determined by the target consumers.[7]

As said before, the purpose of any business is to make profit, and it needs to satisfy the consumers for that to happen. The product needs to fulfil the customer’s need of course, but not only. The product also has to be at an acceptable price in the eyes of the consumers for them to buy it. The price is what makes money for the company, it is determined by the production costs and the competition, as well as by how much the customers are willing to pay for the product. On the one hand, if the price is too high, consumers won’t buy, which means the company won’t achieve its sales’ target. On the other hand, if it is too low, the target will be achieved but there will be no profit made out of it. 4

Price has to be chosen accordingly as well as place. Different types of consumers will need the product to be available at specific places. A very expensive product, such as a luxury item, will not necessarily be available at the local supermarket for example, but most certainly in a specific shop or place. Consumers also prefer to buy products when they are located close to their homes and workplaces.[8]

In order to answer consumers’ needs profitably, marketers have to use segmentation to target their market, and match their marketing strategy to their target consumers’ needs.4 Thus making the consumers central to the company’s marketing activities.

Let’s take Microsoft as an evolutionary example of changes in the marketing environment with the technological factor (macro-environment) and the company’s competition (micro-environment).9

Recently, Microsoft has struggled to find its place in a fast changing digital and technological environment. Microsoft was – and still is – in consumers’ mind the leader in Personal Computers. They are now lagging behind competitors like Apple or Samsung, and are trying to develop other devices like tablets, smartphones, consoles, etc. They even acquired Nokia’s smartphone business in order to do so. They developed a new version of their operating system that works on every platform, including their console Xbox; which provides a cloud based connectivity that consumers are looking for. Their change in strategy to provide consumers what they need in this era of technological improvements has paid off: Microsoft’s sales are trending upward since the past few years.[9]

In order to keep his place in the market, Microsoft had to change its strategy to improve its solutions to satisfy today’s consumers after being left behind by competitors and technological advances.

To this point, we can affirm that consumers are indeed essential and central to marketing activities. Marketing is all about satisfying consumers profitably, and marketing research and marketing strategies are calculated around them. Despite their importance, consumers are only one of the forces in the marketing environment.

Changes in the marketing landscape are so fast that it is now more and more difficult for companies to adapt.

One of the most influential factors of marketing activities is technology: 40% of the world’s population now has access to the Internet, compared to 1% in 1995.[10] The vast majority owns a smartphone that also has access to the Internet.             
The Internet and social media are thus also used for marketing purposes as well[11]: websites, adverts, e-mails, videos, etc. Influencers on the Internet are also important for marketing research; they can be people who have blogs and websites for example, and are useful to marketers for them to better understand current trends and interests.[12] Companies can also sponsor people such as bloggers and video makers (YouTube in particular) by making them review products and/or services online.[13]

Globalization is another factor that influences marketing activities. Lots of companies now face global competition. Also, when a company decides to sell its products abroad, it has to take into account the tastes and habits of the selected country. For example, for the French market, Nutella is manufactured to be more spreadable, due to the fact that French people mostly eat it on baguettes, making it more difficult to spread.[14]

Nowadays, companies also need to take into account the environmental aspect for their marketing activities. They have to be environmentally responsible, to be more sustainable in their practices than in the past.

These are a few other examples of factors, apart from the consumers, that can have an influence on the marketing activities of businesses.

To conclude, consumers are indeed central to marketing activities, but are only one of the many factors that have an influence on them: notably changes in the marketing environment’s factors; the technological factor in particular, which is probably the fastest changing factor as of now.

References

1. Berthon, P., Pitt, L., Plangger, K. and Shapiro, D. (2012). Marketing meets Web 2.0, social media, and creative consumers: Implications for international marketing strategy. Business Horizons, 55(3).
2. Ça m’intéresse – La curiosité en continu. (2017). Pourquoi le Nutella n’est pas le même en France qu’en Allemagne ? – Ça m’intéresse. [online] Available at: http://www.caminteresse.fr/economie-societe/pourquoi-ne-mange-t-on-pas-le-meme-nutella-en-france-quen-allemagne-1129354/ [Accessed 26 Mar. 2017].
3. Corcoran, C. (2017). Marketing’s New Rage: Brands Sponsoring Influential Bloggers. [online] WWD. Available at: http://wwd.com/business-news/marketing-promotion/marketings-new-rage-brands-sponsor-influential-bloggers-3230386/ [Accessed 26 Mar. 2017].
4. Goi, C. (2009). A Review of Marketing Mix: 4Ps or More?. International Journal of Marketing Studies, 1(1).
5. Internetlivestats.com. (2017). Number of Internet Users (2016) – Internet Live Stats. [online] Available at: http://www.internetlivestats.com/internet-users/ [Accessed 26 Mar. 2017].
6. Kotler, P. and Armstrong, G. (2016). Principles of marketing. 16th ed. Harlow: Pearson.
7. Kotler, P. and Keller, K. (1967). Marketing management. 1st ed. Upper Saddle River, NJ: Pearson Prentice Hall.
8. Li, Y., Lai, C. and Chen, C. (2011). Discovering influencers for marketing in the blogosphere. Information Sciences, 181(23).
9. Palmer, A. and Worthington, I. (1992). The business and marketing environment. 1st ed. New York [etc.]: McGraw-Hill Book Co..
10. Richardson, M. and Evans, C. (2007). Assessing the Environment. British Journal of Administrative Management.
11. Smallbusiness.chron.com. (2017). What Are the Four Types of Utility Marketing?. [online] Available at: http://smallbusiness.chron.com/four-types-utility-marketing-24420.html [Accessed 26 Mar. 2017].

[1]  Kotler, P. and Keller, K. (1967). Marketing management. Upper Saddle River, NJ: Pearson Prentice Hall, p.12.

[2]  Palmer, A. and Worthington, I. (1992). The business and marketing environment. New York [etc.]: McGraw-Hill Book Co., pp.1-6.

[3]  Richardson, M. and Evans, C. (2007). Assessing the Environment. British Journal of Administrative Management.

[4]  Palmer, A. and Worthington, I. (1992). The business and marketing environment. New York [etc.]: McGraw-Hill Book Co., p.167.

[5]  Kotler, P. and Armstrong, G. (2016). Principles of marketing. 16th ed. Harlow: Pearson, pp.94-95.

[6]  Palmer, A. and Worthington, I. (1992). The business and marketing environment. New York [etc.]: McGraw-Hill Book Co., pp.10-17.

[7]  Goi, C. (2009). A Review of Marketing Mix: 4Ps or More?. International Journal of Marketing Studies, 1(1).

[8]  Smallbusiness.chron.com. (2017). What Are the Four Types of Utility Marketing?. [online] Available at: http://smallbusiness.chron.com/four-types-utility-marketing-24420.html [Accessed 26 Mar. 2017].

[9]  Kotler, P. and Armstrong, G. (2016). Principles of marketing. 16th ed. Harlow: Pearson, pp.92-94.

[10]  Internetlivestats.com. (2017). Number of Internet Users (2016) – Internet Live Stats. [online] Available at: http://www.internetlivestats.com/internet-users/ [Accessed 26 Mar. 2017].

[11]  Berthon, P., Pitt, L., Plangger, K. and Shapiro, D. (2012). Marketing meets Web 2.0, social media, and creative consumers: Implications for international marketing strategy. Business Horizons, 55(3), pp.261-271.

[12]  Li, Y., Lai, C. and Chen, C. (2011). Discovering influencers for marketing in the blogosphere. Information Sciences, 181(23), pp.5143-5157.

[13]  Corcoran, C. (2017). Marketing’s New Rage: Brands Sponsoring Influential Bloggers. [online] WWD. Available at: http://wwd.com/business-news/marketing-promotion/marketings-new-rage-brands-sponsor-influential-bloggers-3230386/ [Accessed 26 Mar. 2017].

[14]  Ça m’intéresse – La curiosité en continu. (2017). Pourquoi le Nutella n’est pas le même en France qu’en Allemagne ? – Ça m’intéresse. [online] Available at: http://www.caminteresse.fr/economie-societe/pourquoi-ne-mange-t-on-pas-le-meme-nutella-en-france-quen-allemagne-1129354/ [Accessed 26 Mar. 2017].