Marketing Principles for Business

In this report I am going to use the Apple Company as an example of an organisation which I will be explaining its marketing principles. I will be also describing and explaining the similarities and differences between marketing and advertising. I will be identifying and explaining the stages of new product development and I will be also explaining the relationship of its functional areas.

Task 1: AC1

“Marketing is the human activity directed at satisfying needs and wants through an exchange process” Kotler 1980.

There are three main marketing principles these are:

·         Understand customer needs.

·         Understand and keep of competition

·         Communicate effectively with its customers to satisfy customer expectations.

Understand customer needs

It is very important to understand what customers expect, demand and wants. In this case, I chose Apple Company as an example. Before Apple produce new products to public they should think which products that will suits for everyone and which prices they can afford for their personal devices. They should do some research and understand what customers need, want and which products are they willing to spend their money for.  To meet customers demand and expectations Apple should always think the ages because this is one of the major factors in business. This could be young teenagers, teenagers and middle ages. The company should also consider customers’ income as the main key factor in business, especially people who have low income earners such as students, part-timers, etc and high income earners such as business people, workers with professions and full-timers. However, it is important to know customers’ tastes & preferences in terms of mobile phones (iPhone 5S and iPhone 5C).  iPhone 5S has got space grey (black), white and gold; these colours are unisex. However, iPhone 5c has got specific colours such as blue for boys (12 years old and above), pink for girls (12 years old and above) and white, yellow & green are for everybody (boys & girls) from age 12 and above. iPhones have also got different memory; 16, 32 and 64GB depending on how and where customers use them.

Understand and keep ahead of the competition

The purpose of this strategy is to make Apple to be more aware of what is going on in business industry and also to know who their competitors are. Apple is more focus about the competitive pricing where customers are more interested because customers are willing to pay/spend their money on products which are worth it and unique.

One of the advantages of Apple is that they give £70 gift card whenever you buy any of their iMac and Macbooks. Apple introduces new products yearly and they set a public conference so, people will be aware that they are launching new products. On the other hand, they also offer a fast delivery method (2-3 days) which helps Apple to create a wide range of distribution worldwide.

Communicate effectively with its customers to satisfy customer expectations

§  ”Effective network of communications is essential for any form of Promotional activity”.

§  It enables an organization to communicate with its customers and satisfy their expectations”.

It is important that Apple should know that the Promotional Mix is an important way to communicate effectively with customers: This could be through:

-Advertising: "any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor" (Kotler & Armstrong, 2004) - “Advertising communicates benefit messages to target audiences”.

For an example: Apple should always use this strategy because it is very effective and easy way to communicate customers. Apple can use posters, TV Adverts and online (social media) to inform people that Apple introduces its new products such as iPhone 5s and 5.

-Sales promotion: Is a business activity which helps the business to encourage/persuade customers to buy the products/service.

For an example: In case of Apple. Apple does not give away any trial products to people. However, everyone is welcome to visit the Apple store to see, try and use their products that they sell. When people enjoy using them, they will think about the product and there will be a chance that they will come back to the store and buy them.

-Public Relations: “Building good relations with the company’s various publics by obtaining favourable publicity, building up a good “corporate image”, and handling or heading off unfavourable rumours, stories and events”. (Kotler & Armstrong, 2004).

For an example: Apple should always tell the truth about the products and never make any promises or never give unsure details to customers; especially when it comes to delivery methods (how many days does it take?). This will help Apple to create and maintain a positive reputation to public and it also persuades people to do more business between Apple and customers.

-Personal Selling: “Personal selling is the process of informing customers and persuading them to purchase products through personal communication in an exchange situation” (Dibb, Smkin, Pride and Ferrel).

For an example: Apple set a conference meeting whenever they launch new products. They demonstrate to the public about the new things that their products have got and this will help them to encourage people to purchase their new products.

Task 2: AC2

What is marketing? It is "A social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others". (Kotler & Armstrong, 2004)

What is advertising?

Advertising means "any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor" (Kotler & Armstrong, 2004)

Similarities:

-In this case, both of them are designed to promote, distribute and sell Apple’s products such as iPhones (5S or 5C), iPods, iPads (Air or Mini), iMac and Macbooks (Air or Pro).

-Both of them have the same aim which is to increase the company sales and make more money by encouraging/persuading people to buy the products that Apple Company offers.

-Advertising and Marketing use the same procedures of developing and implementing strategies to meet customers’ demands. In terms of identifying, anticipating and making costumers satisfied.

-Both of them want to be ahead in terms of competitive position by producing new products with high quality and uniqueness and telling to costumers the advantages of the products of apple (iPhone 5S and 5C) and explaining the reason why they should buy the products of apple instead of other company (e.g: Samsung, htc, nokia, etc).

-Both of them require a type of plan as to how to go about advertising and marketing a product or service. In case of apple, they advertise their products by having a partnership with mobile networks such as Vodafone, O2, T-Mobile, etc.

Differences:

-Advertising is designed to encourage customers to buy Apple’s products so this is done through the media (TV adverts). However, in terms of marketing, it is about knowing the customers and predicting what they want and expect from Apple.

-Advertising is focused on their specific target costumers to create awareness of the product by communication. Therefore marketing uses the function of the 4ps and use the strategies of the market research and product development to be able to produce new products.

-Marketing focuses on the customers and tries to predict what customers wants and expects from Apple while advertising focuses mostly on selling Apple’s product by persuading people through posters, TV Adverts, e-mails, etc.

-Marketing uses the promotional mix tools to promote the new products, meet customer needs and wants through an exchange process (buy and sell; Apple sells the products and customers buy their products). However, advertising creates particular public awareness of launching new products which means encouraging/persuading people to buy the products.

Task 3:

I have chosen Apple as my business organisation and in terms of new-product development if Apple decides to make a new product there are seven (7) stages/processes they have to follow to be able to produce an iPhone. These are:

Departments	Roles
Marketing Research	This is the department who is responsible to gain information such what customers want and expect from Apple.
Sales	This is the department who is in charge to identify changing needs in Apple Store.
Finance	This is the department who control and monitor the business budget. Set prices for the products and prepare a yearly breakeven analysis and profitable products.
Production	This is the department who manufactures a large number of the products. Change processes if it is necessary to be able to produce more customised product.
Distribution	This is the department who will distribute the products worldwide.

7 Stages/Processes	Departments
Idea Generation	The purpose of idea generation is to find new ideas from internal and external source, which helps Apple to produce new products (iPhones). The department who are involve in this process are the Marketing research and Finance because Marketing research needs a budget and so they ask money to the finance department to be able to do their research. This could be via online survey, questioners, etc.
Idea Screening	The purpose of idea screening is to pick up the necessary ideas from idea generation and turn into profitable products which help the product development of Apple to increase the company profit. However, Apple should consider if their products are easy to advertise and distribute to the public.   The department who are involved in this process are the Marketing research, and Production. These two departments are both related together because marketing does the research of what may people expects from apple and production will be the one who is in charge to produce the sample product.
Concept Testing	The purpose of concept testing is to present a picture of description of the new product (iPhones) to customers, employees and distributors and receive feedbacks from them such as “what improvements in the iPhone’s feature would they suggest?” In this stage of the product process Finance and Production will be in charge because the production department produce an example of an iPhone. Therefore, they need money to be able to buy the materials that they may need.
Business Analysis	Once that apple decided on which product concept are they going to use, the next step is to study the sales history of the previous similar products and conduct public opinion and this will help Apple to estimate the minimum and maximum price of their new products to be able to assess the range of risk. After that Apple will analyse the sales and cost of the new products. Marketing and Sales are the ones who is responsible for this because marketing did the research about the product and sales help marketing to find what could they improve before they present the proposal to the management.
Product Development	Once the products passed from the business test and the management approved the concept then it will automatically move into the product development. However, developing new Apple product is not easy, it could takes months and years to finish. Therefore, when the product is done it will go to another test to assure that the products are designed in a high quality and safe. Before the product goes under procedure, Marketing should make sure about its concept about the new design which is unique that will make people satisfied and excited before Production department goes to Finance to ask money to buy the materials to develop the new iPhone.
Test Marketing	Once the products are done it will go under the test marketing which is the product will be introduced more realistic. Test marketing lets apple to have a company test of its product and its entire marketing activity: advertising, pricing, branding, etc. and in this case, Apple Company will need big amount of money to be able to launch the new products. The production department will expose the new iPhone to public to be able to get an initial feedback and also to find out what changes could they make to make the iPhone look better.
Finished Product	The test marketing will help the management to decide whether they launch the new products (iPhones) or do some changes to make it better. When the management decided to launch the product they will spend millions for advertising their new products to public. Once the product is done and ready to use, Sales department will communicate to the Finance department to be able to decide what price would be suitable for the new product. Whenever they compromised about the price. The distribution department will distribute the new products worldwide once the products are ready to sell.