Critcally discuss the view marketing involves consumers to make uneccesary purchases, Marketing, College Term Papers.com


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Critcally discuss the view marketing involves consumers to make uneccesary purchases

Critcally discuss the view marketing involves consumers to make uneccesary purchases Critically discuss the view that “Marketing is getting people to buy things they don’t need, with money they don’t have, to impress people they don’t know”. 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 lead 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. The relationship between producer and consumer had become relatively indirect. Since the first production surplus, marketing has been based on the principle of exchange – interested parties exchanging something of value. 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). In marketing terms, the consumer can be defined as any individual, group of individuals or organization. The role of the consumer is expanded to include the categories of payer, user and buyer, be it an individual, a household or an organization. Products are also generalised to include all goods, services, places, people and ideas. In recent times, the broad nature of marketing has lead to acceptance of the following definition. “Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational goals” (Czinkota et. al, 2000, pg. 8). Simply, modern marketing includes everything from conception to consumption of an idea. Marketing stimuli consists of the four P’s – product, price, place and promotion (Kotler & Armstrong, 1996, pg. 143). In relation to this mix, marketers must first understand how buyers’ characteristics influence perception of products, and secondly, how buyers make decisions. Consumer behaviour includes the studies of any behaviour, internal or external, mental and physical, that influence purchase. Consumer motivation is simply a drive to achieve goals, to satisfy needs and wants. A need being, “Any unsatisfactory condition of the consumer that leads him or her to action that will make the condition better”, while wants are, “desires to obtain more satisfaction than is absolutely necessary” (Czinkota et. al, 2000, pg. 138). Maslow's Theory of Motivation sought to explain why consumers are driven by needs. Maslow suggested consumer needs are arranged in a hierarchy. A person will try to satisfy the most important need before attempting to satisfy the next. From this model, all consumers will attempt, in a world of scarcity, to best fill needs from basic physiological up to self-actualising needs (Kotler & Armstrong, 1996). In third world countries, a basic need would be fire to cook meals. In developed countries, it could be argued that time is a scarce resource and microwave ovens are needed. A Hyundai may be all that is ‘needed’ for transport to work, but an executive may ‘want’ a BMW, given the different consumer needs and wants. Due to this human factor, demand for products will never be uniform locally, much less on a global scale. Potential consumers will react differently depending on a host of issues including culture, genetics, climate and economics. These and many more physical and mental aspects of consumers and their environment fall within the realm of marketing. In all but the strictest command economies, there exists the fundamental human right of freedom. Consumers are free to make decisions - needs and wants are not pre-determined by government. If, as consumers, a need or want is perceived, human beings posses the ability to make decisions, whether based on perception or attitude, and albeit, affected by moods or peers – no one by law can force a consumer to purchase. Marketing is based on the principle of exchange where interested parties exchange something of value. When Adam Smith stated, “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). Marketing is not simply involved with advertising, selling and promotion; it is a complex process involved with conception through to final consumption of the product. The marketing concept has been adapted to suit a range of organisations, be they involved primarily in retail, wholesale, service, profit or non-profit, large or small. There are five alternative concepts under which organizations conduct their marketing activities: the production, product, selling, marketing and social marketing concepts (Kotler & Armstrong, 1996, pg. 14). Of these, selling and marketing concepts are relatively similar and often confused. While both these concepts have contrasting beginnings, profit is the ultimate aim, albeit volume versus customer satisfaction. As opposed to sales, the marketing concept is based on three fundamentals, firstly, the organization exists to identify and satisfy the needs of its customer, secondly, satisfying the needs involves co-ordinated efforts of all departments within the organization (not just marketing department), and thirdly, an organizational focus on long term success as opposed to short term. This does support the fundamental ideals of relationship marketing, in which firms recognise earning potential of long-term customer retention. “Markets consist of market segments – homogenous groups of customers who have similar needs and wants” (Czinkota et. al, 2000, pg. 11). Due to the relative problem of scarcity, many firms lack the ability to effectively and efficiently target all of these segments. Segments in which the organisation decides best to focus its attention are referred to as target markets. Effective marketing strategy involves developing a marketing mix which best suits these target markets, in relation to firms’ resources and objectives. This marketing mix is a “set of controllable tactical marketing tools – product, price, place and promotion that the firm blends to produce the response it wants in the target market” (Kotler & Armstrong, 1996, pg. 48). Figure 1 shows the many possibilities a firm can use to influence product demand through developing marketing mix, based on the four P’s. The product is simply the good and/or service on offer. Price represents the amount consumers must exchange to obtain the product. Place represents all the situations which make the product available to the consumer, and promotion is all the activity associated with persuading target markets to purchase, and positioning an organization/product relative to competition. Figure 1 – The Four P’s of The Marketing Mix (Kotler et al, 1994) The marketing process involves analysing marketing opportunities, selecting target markets, developing the marketing mix and managing the marketing effort (Kotler & Armstrong, 1996, pg. 44). Many companies claim to practise the marketing concept. They may well have a dedicated marketing department, conduct market research and marketing plans, but are not customer driven. Recent history is littered with examples such as IBM, previously successful companies, which failed to adjust marketing strategies in the face of a dynamic market. The majority of modern marketing is concerned with building long-term relationships. Amazingly, some advertising does not even attempt to sell, but merely exists to change perception, position and/or invoke awareness of products or topics. The best marketing mix aimed at its specific target market, still cannot force consumers to purchase. Marketing exists in most part to set position relative to competitors, and aiming to at least gel as part of an awareness set of both new and existing customers. Any purchase decision will be based upon the products perceived ability to satisfy the consumer’s problem. Of the four P`s that constitute the marketing mix, the product element is fundamental. Without the product, the organization possesses no solution to the consumer’s problem. Without the product there exists no price, place or promotion. In marketing terms, product can be defined as “Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need” (Kotler et. al, 1994, pg. 260). All products can be defined as either consumer or industrial goods based on use. Industrial or business-to- business goods are those purchased for either further processing or direct business use. Thus certain products could be either, dependant on end user, for example a mobile phone. Consumer goods are those used for personal consumption and are further classified based on consumer buying habits: - 1. Convenience Goods – are usually low priced and freely available, including bread and milk. 2. Shopping Goods – Are purchased based on decisions such as price and quality, and could include furniture or appliances. 3. Specialty Goods – Usually involves significant effort on the consumer’s part, and could include a car purchase. 4. Unsought Goods – Are those usually not considered, unknown or new products, such as the Abdoer or Fat Free Express. From Marketing, Kotler et. al, (1994, pg. 261) “Buyers don’t buy quarter inch drills, they buy quarter inch holes”. In this case, the product benefit or service is the hole. With respect to marketing, product planners need to think about the product on three levels: - 1. Core Product – Involves the matching of consumer problems to a product’s ability to solve it. 2. Actual Product – This level is built around the core product and may include some or all the elements of packaging, styling features, quality and brand name. These combine to deliver core product benefits. 3. Augmented Product – This outer level surrounds both the actual and core product levels by complimenting and further enhancing the product by offering additional consumer services and benefits. Theses benefits can include installation, credit, warranty and after sales service. The collection of all goods marketed by Uncle Toby’s is the firm’s product mix. All of the breakfast cereals in this mix constitute a product line. Product mix width and depth refer to the number of product lines marketed and number of products within each line respectively. Successful companies will endeavour to expand width and depth based on market research in an attempt to solve dynamic consumer problems. “Any company limits growth potential if it chooses to concentrate on a single product line” (Czinkota, et. al, 2000, pg. 252). Branding, packaging and labelling also form important product functions: - 1. Brands – Brand experience forms part of consumer perception of a product. 2. Packaging – Packaging can often be more useful financially than advertising, offering product identification and protection, amongst other benefits. 3. Labelling – The medium by which producers convey important information regarding the product to the consumer. From Marketing Best Practices, Czinkota et. al. (2000, pg. 256), “A quality label signals a quality product”. If products exist to solve consumer problems, then new products exist to solve new problems or to better satisfy existing dilemmas. New product development usually involves high costs in terms of both time and money. Marketing Best Practises recommends new product development success be measured on four items spanning three dimensions. The first item measures financial success, while second is concerned with technical performance success or competitive advantage. The third dimension involves measuring market share and customer satisfaction. “While profits are not necessarily the primary goal of any particular project, the firm does need to generate profit across the portfolio of product which compromises the firms product mix”(Czinkota et al, 2000, pg. 259) While products are the lifeblood of any organization, profit or non-profit, they are simply potential solutions to consumer problems. Marketing success depends upon product benefits satisfying consumer needs and wants. Markets can be volatile, here today and gone tomorrow, suggesting market power remains the domain of the consumer. It could be viewed as an over-generalisation that marketing as an entire process is responsible for unnecessary consumer spending. All consumers are faced with choices daily – what to buy, why, where and how much. The questions of what to buy, where and how much are relatively easy to answer and predict. The question of why consumers favour one product over another is not so easy. Marketers can develop marketing mixes to appeal to target markets, but there are other forces at work in consumer behaviour that are beyond the control of marketers. These other features of the consumers’ environment include cultural, economic and political. Responses to these and other environmental factors would seem to be as individual as the consumers themselves. While these other factors are beyond the control of marketers, they need to understand possible trends in order to cope with future demand. As stated in Czinkota et. al, (2000, pg. 138), by definition, “consumer behaviour is the mental and physical activities undertaken by households and business customers that result in desires and actions to pay for, purchase, and use products”. This broad approach to behaviour includes the three roles of the consumer – buyers, users and payers. The features of the product must suit the needs of the user, price is critical to the payer, and the buyer’s task involves finding and acquiring the product. In this approach, whether the consumer is an individual, a household or an organization, all these roles must be considered relative to the purchase. All these are inter-related and necessary to understand if marketers are to predict consumer needs and wants. Needs and wants also vary with individuals. Needs are determined by a complex combination of consumers’ physical characteristics and the environment. These physical components of needs are genetics, biogenics and psychogenics, while the environmental factors are climate, topography and ecology. Wants are desires of more satisfaction than necessary, and tend to be less tangible. Wants include the elements of personal worth (income/assets); institutional context (any group to which consumer belongs and could be influenced by); and the actual consumers surroundings. Wants also have an environmental context that consist of economy (business cycle), public policies (laws and regulations) and any technological benefits/effects on lifestyle. Consumer motivation also plays its part in understanding behaviour. Maslow’s Hierarchy of Human Needs sought to explain these. Maslow suggested that a person would try to satisfy the most important need first. As Kotler & Armstrong (1996, pg. 56) state, “In order of importance, they are physiological needs, safety needs, social needs, esteem needs, and self-actualisation needs”. For example, starving Africans would not be interested in esteem, safety or self-actualisation needs until the basic physiological need for food is met. Only when this food need is satisfied, does it stop being a motivation, and the consumer can move on to net next level. Most humans possess all of the elements of sensory perception – sight, smell, touch, hearing and taste. The ways in which consumers, interprets and organise this information is markedly different. Perception is the process by which an individual selects, organises and interprets information to form a meaningful picture of the world. Kotler et.al (1994, pg. 170) state, “People can form different perceptions of the same stimuli because of these perceptual processes: selective exposure, selective distortion and selective retention”. Again it is clear, although markets can be segmented and marketing mixes formulated, consumers are individual. All possess different characteristics, varying needs and wants and contrasting environments. Perception alone allows two relatively identical consumers to possess different attitudes to a product, based upon the above selective processes. Clearly marketing as a process is simply able to best match consumers needs and wants with products, relative to organisational goals and resources. Consumer posses the ability to satisfy needs and wants individually, and ultimately posses market power. The Principles of Marketing (1996) outlines that a product can be defined as “anything offered to a market for attention, acquisition, use or consumption that might satisfy a want or need”. Given this broad definition of a product, services such as haircuts, cleaning and teaching all fit the description. A service can be defined as “any activity or benefit that one party can offer another that is essentially intangible and does not result in ownership of anything” (Kotler et. al, 1994, pg. 592). Visiting a doctor, having a haircut, seeing a moving, or getting advice from a solicitor all involve buying a service. Marketing of a service is not unlike marketing of a physical good. It involves problem identification, definition and solution, and the four P’s to form a significant role in any significant marketing program. Whether, for-profit or non-profit, public or private, all services are characterised by five elements that affect its marketing program. Services, unlike most products, are intangible – they are cannot be touched or evaluated prior to purchase. To reduce possible buyer uncertainty, successful service providers will try to portray an environment reflecting quality and reassurance. This environment or servicescape consists of the physical evidence and other variables that create the service experience for the consumer. Servicescape items include mood, lighting and temperature. For example, a client may base perceptions of a hair salon on interior design, product and awards displays. Some, but not all, services require consumer availability. A visit to the doctor obviously requires consumer’s presence, while roof cleaning does not. Physical goods are usually produced, stored, sold then consumed in this order. Services are generally sold, and consumed during production. “Thus services are inseparate from their providers, whether the providers are people or machines” (Kotler et. al, 1994, pg. 593). Because services are consumed on production, they can be described as perishable – unable to be stored for later sales or use. Services exist at a point in time and cannot be replaced. Like empty seats on a bus, potential to generate sales from the service disappears on departure. Another element of a service is heterogeneity, often referred to as variability. This concept refers to the many variables that exist in service provision and can greatly affect a consumer’s service experience. Much of McDonald’s success can be attributed to the organisation’s vigilant pursuit of a generic servicescape, with the aim to reduce service variability. Cleanliness, menu, theme and customer service are some of the elements that display the restaurant’s quest for global homogeneity in service provision. All things being equal, a Big Mac experienced in Los Angeles should be, and is, a similar experience to consumption in San Hose. Since the concept of a service involves intangibles, perishables, inseparability and heterogeneity, consumers own the experience. The experience of a service cannot be guaranteed and is non-transferrable. The two extremes of the product spectrum are pure goods and pure services. Most products, by nature, lie between these extremes and are more or less a mixture of the two. “Where product marketers (physical goods) try to add intangibles such as warranties and discounts, service marketers try to add tangibles such as toys and collectables to their intangible offerings” (Kotler et. al, 1994, pg. 593). The long-term success of any product, tangible or intangible, will depend on its ability to solve the consumer’s problem. Marketing involves listening to needs and wants, and developing a suitable marketing mix. Long-term success will depend on the organizations ability manage the marketing mix in the face of a dynamic market. The marketing process aims to gel a product/service into the consumer’s awareness set and maintain and/or improve perceptual positioning. The better the comparative position, the greater the chance of e consideration prior to purchase. In the case of non-profit organizations, the aim of the marketing process may simply be to create and/or increase awareness of a product or topic. Considering the number of broad issues that fall within the realm of marketing, it would be naive to suggest that marketing, as entire process is responsible for `unnecessary consumer spending`. Marketing is a process of exchange, an exchange between interested parties to satisfy consumer needs and wants. Bibliography: Reference List Burns, A. & Bush, R. 1998, Marketing Research (2nd Ed.), Prentice Hall Inc., New Jersey Czinkota, M.R., Dickson, P.R., Dunne, P., Griffin, A., Hoffman, K.D., Hutt, M.D., Lindgren Jnr, J.H., Lusch, R.F., Ronkainen, I.A., Rosenbloom, B., Sheth, J.N., Shimp, T.A., Siguaw, J.A., Simpson, P.M., Speh, T.W. & Urbany, J.E. 2000, Marketing: Best Practices, Dryden Press, Orlando. Kotler, P. & Armstrong, G. 1996, Principles of Marketing (7th Ed.), Prentice Hall Inc., New Jersey. Kotler, P., Chandler, P., Brown, L. & Adam, S. 1994, Marketing: Australia & New Zealand Ed. 3, Prentice Hall Australia: New South Wales. McDonald, M. & Keegan, W. 1997, Marketing Plans That Work, Butterworth-Heinemann, Newton.

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