Running Head: MARKETING PRINCIPLES

Marketing Principles
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Marketing Principles

Marketing Principles
LO1
1.1
Definition of Marketing
According to Chartered Institute of Marketing (CIM), Marketing is the process of
management accountable for classifying, foreseeing, and fulfilling customer demands valuably
(The Chartered Institute of Marketing, 2009).
This definition specifies that the customer is central constituent of marketing process and
several companies disregard this at their risk. The function of marketing is the study of market
factors and forces and the progress of a firms arrangement to optimize its profit from them.
Marketing is all about acquiring the appropriate good or service to the consumer with right
placement, right price, and at the suitable time. Current practice and business history demonstrate
that devoid of appropriate marketing, businesses and firms cant reach closer to their potential
consumers and fulfill their requirements.
Elements of Marketing
The process of marketing comprise of four elements. These four elements are all
executed with the objective of devising worth for the target consumers. Two elements of
marketing process, which include situation analysis and controlling the marketing environment,
are conducted continually. Other elements that include marketing strategy and marketing mix
decisions are performed half-yearly or annually, depending upon the business structure and
requirements.
1.2
Tesco is described as the leading retailer of the UK, providing service of millions of
consumers daily. The company also provides great opportunities for employment and currently in
the UK Tesco; it has hired more than 300,000 workforces. The company accomplished total
revenue of 33,557 million in the year of 2004. This revenue showed and increase of 18.7%
alongside the revenue of former year, which were 28,280 million. Tesco also provides financial

Marketing Principles
goods and services, for instance banking service and insurance and also telecommunication
products and electrical appliances. With respect to Tescos current business analysis, its SWOT
analysis is illustrated in the next heading.
Some of Tescos main services, goods, and store types are listed below:
Types of Stores
Tesco.com (online)
Express
Metro
Superstore
Extra

Offerings in Store
Home living range
Petrol stations
Non-food retail
Food retail

Financial services
Online mortgage finder
Secure investment bonds
Personal loans
Savings accounts
Motor insurance
Travel insurance
Home insurance
Pet insurance
Life insurance

SWOT Analysis
Strengths
Increasing market share
Insurance
Tesco Online
Brand Value
UK market leadership reinforced

Weaknesses
Reliance upon the UK market
Debt reduction
Signs point to serial acquisitions

Opportunities
Non-food retail
Health and beauty
Further international growth

Threats
UK structural change could spark a price war
Overseas returns could fall
Wal-Mart/Asda Challenge
International expansion

Marketing Strategies
Tesco employs several different marketing strategies to boost its profits and provide best
customer services. One of its salient and profitable marketing strategies is launch of online
grocery. Tesco has devised its target to direct the path in multichannel comprehensible with
sturdy progress in online shopping of grocery and emerged out of coerce by click-and-collect.

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The greatest benefit that Tesco has devised during past 2-3 years is its capability to strive
innovative things devoid of terror of breakdown.
Costs and Benefits of Marketing Orientation
Marketing orientation specifies how Tesco designs and launches innovative products.
This notion considers two elements, first is possible costs and the second is possible benefits.
Possible costs for Tesco include the cost of business analysis to find out the need and demand for
certain goods and services. Possible benefit for Tesco includes the capability to develop a good
or service and delivering it in a best possible way.
LO2
2.1
Micro Environment
The term micro-environment includes all those elements on which the firm of marketing
would not have control over. This the marketers use to obtain as much information as possible
which will help them within the marketing operations. These are those elements which can easily
be controlled, or applied to collect information, for providing much better satisfaction to the
customers of the company. The main objective of marketing is to churn out maximum profits by
satisfying the customers whom you are targeting. This is accomplished through the management
of variables n which the company has all control over in such a way as to get most out of their
own objective. These variables form the marketing mix which includes the product, price, place
and promotional strategy. The marketing mix is an amalgamation is of all the ingredients within
a recipe that is considered to be what will bring most customers to get involved in the process.
Macro Environment
The term macro-environment includes all elements and forces which are external to the
marketing firm. Most of these elements will influence the operations of the firm like a firms
suppliers, agents, distributors and other intermediaries and firms with which it has direct

Marketing Principles

competition. These external forces or elements collectively are termed to be the firms adjacent
macro-environment to as they need to be differentiated from the wider external forces like the
legal, intellectual, monetary and technological sub-environments.
2.2
Segmentation
A segmentation criterion is the process through which a local business club targets
particular consumers, who provide more worth to the business. A local business club sets up
three market segmentation criteria. It includes geographic, demographic, and psychographic. A
simple market segmentation is describe as targeting potential and corporate customers, for whom
the company believes that they will definitely use services and goods delivered.
Market is the place where buyers meet sellers. Market segmentations are the process of
mass production, mass distribution and mass utilisation of buyers products (Kotler & Keller,
2008). Market segments should design in a way that it provides maximum profits and
competitive advantages against competitors. Consumer perception in the segmentation of
markets is of importance as customers perceive of the Czech Republic distinguish the services of
Tesco in a different manner as compared to the customer of the United Kingdom. The factors
responsible for this are gender, age and income of individuals. The relationship between age and
the identity of the image of brand is also responsible for market segments.
2.3
Targeting Strategy
A suitable targeting strategy for local business clubs products may affect the following
factors:
Count of sales needed for revenues,
Competition,
Choices and needs of buyers,
Market maturity
2.4

Buyer Behavior
Consumers buying decision is affected through the following factors:
Personal factors,

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Psychological factors,
Social factors
Social factors are aspects through which consumers are affected by their associates,

friends, and relatives. In contrast, psychological factors rely upon a persons psyche, which
include perceptions, attitude, personality, learning, and motives. Thirdly, personal factors entail
demographic aspects, living standard, and situation of an individual.
LO3
Marketing mix are those controllable variables which are used according to needs of
customers. Company has full control over these variables and exploits them in the best possible
way. For Sainsburys marketing plan, four variables e.g. Product, Price, Place and Promotion are
used.

Product
The important work at this level is to position the product by effectively using available
resources. In addition, marketer analyzes the market and customers demands and product more
effective. In this regard, Sainsburys had presented its product in many different types.
Price
Pricing strategy is the most important technique which becomes the cause of survival or
death for a company. Lockheed martin should apply price skimming technique. In this technique,
companies set a higher price at the initial level and then reduce with the passage of time
(Bowman, 2010). It is opposite to penetration pricing where at the initial level companies set
relatively lower price.
The purpose of price skimming is at that, Sainsbury has good demand in the market. It
helps in capturing consumer surplus and eventually in making more products. In this way,
company has more money to expand its business. In addition, company calculates the credit and
recovery policy. Sainsbury has the back of world powers, and its product is too much costly. The

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company should give the opportunity of giving Sainsbury at long-term credit with the settlement
of any international financial institution. It means, buyer take a long-term loan from these
institutions.
Place
In place, company decides from where and how it will distribute the product. Most of the
production process is controlled by the United States. Strategically, other countries should be
included in the supply chain management process. It will help in the profit maximization,
effective delivery and loyalty of other countries. Recently, Canada has shown interest to be part
of supply chain process because of its relevant expertise and oldest partnership. Geographically,
Canada, Turkey and Italy are important countries for the supply chain process.
Promotion
The marketers are using different tools in order to spread information to the potential
customers. In our times, internet, print media and electronic media are most effective tools for
advertising. Sainsbury is defense product, which cannot be used by the common men. It can only
be used and purchased by the governments of different countries. Through brand manager, the
company will introduce the specifications of jet in internet, print and electronic media.
Furthermore, there would be special teams comprises of the heads of each department, will visit
the targeted countries (Ng, 2011). They will meet with the heads of defense departments and tell
them policies of buying Sainsbury.
Relationship Marketing
The delegates of the company will put emphasis on making, maintaining and improving long
lasting relationships with the potential customers. Currently, circumstances are favorable and we
will try to maintain a relationship with the competitors. Definitely, it will help us in enhancing
technology and marketing.

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Strategic Alliances
These are special contracts, which are signed between two or more companies and countries
for mutual benefits. The Sainsbury will form alliances with Canadian, Italy and Turkey
companies for supply chain, marketing and technology transfer.
Marketing mix decisions of Sainsbury comprise of 7Ps of marketing. The first and
foremost P is product. Sainsbury believes in the concept that a good or service should not be
developed and launched that is not required or demanded in the market. The company seeks what
consumers want or need and then develop and launch the suitable product with an appropriate
extent of standard to fulfill those wants and needs. The second P refers to the price, which is
merely constituent of the marketing mix that produces profits. All other elements generate costs.
A good or service is merely valued what consumers are ready to recompense for it. Sainsburys
pricing decisions are made in accordance with its competitors price. However, it doesnt
essentially specify the cheapest; the small companies might be capable to battle with large
competitors by offering additional details or services, which will provide consumers, superior
worth for money paid. The company believes that pricing should also offer a benefit.
The third P is promotion. It is the method through which a firm corresponds what it
endeavors and what it can provide to its potential consumers. It involves activities, like
exhibitions, special offers, sales management, corporate identity, PR, advertising, and branding.
The fourth P is place. It indicates to the place where consumers can easily purchase a good or
service. Place is also the source of product distribution to the final customer. It should be
convenient and appropriate for the consumer. The fifth P is people. Any person who
communicates with Sainsburys customers will make an intuition, which could have a reflective
outcome i.e. negative or positive, depending upon the Sainsburys customers experience and
satisfaction. The sixth P is process. It is the procedure of offering a service and the attitude of

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those who offer services is critical to customer contentment. The last and seventh P is physical
evidence. A service or good cannot be experienced or consumed prior it is delivered or brought,
respectively. Selecting a service can be professed as a perilous business as customers are availing
something insubstantial.
Implementation and control of the marketing process elements involve styles and the role
of strategic control systems, performance management, and risk management. An important
system known as enterprise risk management (ERM) is widely implemented in Sainsbury to
enhance strategic control system.
LO4
4.1
The procedure of market segmentation is used to subdivide the heterogeneous mass
market into a number of smaller, more homogenous groups of consumers. The members of a
certain group have one or more relevant characteristics in common and form an individual
segment. Segmentation of the consumer or participant market makes it easier for businesses to
understand and target specific groups that have similar characteristics and behaviors. The
marketers select segments that represent groups that are likely to purchase their products and
services (Weinstein, 2004, pp.56-78).
There are different bases that are used to divide a total market into segments. The most
common bases are demographics, Geographics, psychographics, and product-related variables.
Segments that are based on demographics can be structured according to gender,
race/ethnicity/migration background, age, income, or education. Demographics have long been
the basic criteria for segmentation. Geographic segmentation can be based on one's country of
residence or the nature of the community such as urban, suburban, or rural. A further distinction
can be made between local, regional, national, and international markets or market segments.
Demographic and geographic segmentation can be summarized as state-of-being segmentation;
their variables are generally easier to measure than product-related or psychographic variables.

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10

Segmentation aid the marketer to avail such marketing activities that will work for their
benefit. It will help to target the right customer with the right ways. This way the product will get
good sales and will be highlighted well too. Understanding the set of consumers having same
characteristics and attitudes will help the marketer to make the right strategy that will work
perfectly (McDonald & Dunbar, 2004, pp.23-45).
4.2
The understanding of consumer behavior is a key component that enables companies to
better identify the customers to whom they are addressed and it is a real substantial benefit for
them in that it allows them to better refine their actions policy while minimizing the risks. Five
persons were asked about the skincare product they purchase. The most common themes
identified by those respondents which influence their decision making process have been
illustrated in the below graph. Furthermore, the image, lifestyle and status often have the greatest
impact on consumers. The objective of consumer behavior research is to elucidate the factors
influencing the decision-making process at the most. The faster evolving theory and practice of
marketing, the more increases the value of consumer behavior research for the organization, as
well as knowledge of the behavior of its customers provide a solid foundation for the successful
marketing of their products (Arena , 2009).

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11

The above chart shows the importance of those factors which customer considers being
very important for the brand they tend to buy or they prefer. It illustrates that why customer
prefer such brands. Therefore from the results it has been revealed that quality of the product is
very important for the customers when they look for a particular brand to buy. The most
important is price and the value they receive from the purchase of the product. 16% of the
respondents go for the functions of the products and 11% go for the brand image. However 13%
of the total respondents look for appearance of the products.
However, from the analysis it can be concluded that consumer behavior a broad concept
and includes not only the process of purchasing the product (services, works), but also the
behavior of consumers to purchase and after its implementation. Considering the behavior of
consumers to purchase, staff organization, the investigated product and the market to marketing
(marketing), considering factors that may influence the decision to buy this item, or to abandon.
4.3
International and Domestic Marketing
The most significant difference between International Marketing and Domestic
Marketing is exactly the greater complexity and unpredictability of the international environment
and the prevailing uncontrollable factors such as political, economic, legal and cultural forces

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mainly among others. However, International marketing has a polycentric orientation,

emphasizing whenever necessary adaptation of product and promotion in foreign markets
(Muhlbacher et al., 2006, pp. 29-86). This guidance refers to the willingness of a company to
recognize that there are significant cultural differences in the markets. In relation to international
marketing a company should have better understanding of:
Objectives and challenges: The dynamic environment of international trade in the context

of international marketing.
Global market and local cultures: The culture of the people and its role in the choices of
international marketing, culture, management styles and business systems, political and

legislative.
The evaluation of international opportunities: Marketing research in foreign markets,

regional markets and economic integration areas - emergent markets.

The choices of marketing for the global market: The planning and organization of
marketing activities, Products and services for consumers, Products and services for
business, channels of international marketing, integrated marketing communications, the

management of sales in world markets, pricing in international markets.

Implement the strategies in the global market: The intercultural negotiation.

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References
Arena, B.L.M., (2009), 10 key pointers of consumer behavior in a recession revealed, Journal of
Consumers, pp. 12-15
Bowman, D., (2010), Market Mix and Marketing Response Models: Trends and Research
Opportunities, Foundations and Trends in Marketing, 4 (3), pp. 129-207, data retrieved
from
http://www.nowpublishers.com/articles/foundations-and-trends-in-marketing/MKT015;jsessionid=4D5B893B54F83E00284A397928AC2312
Kotler, P., Brown, L., Adam, S., Burton, S., Armstrong, G., (2004), Marketing, Pearsons
Education Australia
McDonald, M., Dunbar, I., (2004), Market Segmentation: How to Do It, How to Profit From It,
Butterworth-Heinemann, Oxford, UK pp.23-45, data retrieved from
http://www.amazon.com
Muhlbacher, H., Leihs, H., Dahringer, L., (2006), International marketing: A global perspective.
New York, NY: Cengage Learning EMEA, pp.29-86
Ng, J., (2011), Commercial Marketing & Exhibition Package, data retrieved from
http://digitalcommons.unl.edu/birdstrike2011/9/
The Chartered Institute of Marketing (CIM), (2009), Marketing and the 7Ps: A brief summary of
the marketing and how it works, The Chartered Institute of Marketing, data retrieved
from
http://www.cim.co.uk/files/7ps.pdf
Weinstein, A., (2004), Handbook of Market Segmentation, Haworth Press, London pp.56-78