Understanding and application of

marketing principles
Table of Contents
Understanding and application of marketing principles.................................................................................................1
Introduction.....................................................................................................................................................................2
Task 1..............................................................................................................................................................................3
1.1 Marketing concept and the elements of marketing process..................................................................................3
1.2 The benefits and cost of marketing orientation for Kaffel....................................................................................5
Task 2..............................................................................................................................................................................6
2.1 Macro and micro environmental factors which could influence the marketing decision in the company...........6
2.2 Segmentation criteria to be used by Kaffel for B2B and B2C..............................................................................8
2.3 Targeting strategy for products.............................................................................................................................9
2.4 How consumer buying behavior concept affects the marketing activities in different situation........................10
2.5 New positioning for the company and its products............................................................................................12
Task 3............................................................................................................................................................................12
3.1 Individual elements of marketing mix and how products can be developed to sustain competitive advantage.13
3.2 How a good distribution arrangement can provide customer convenience for both market (B2B and B2C)....14
3.3 How prices are set to reflect positioning strategy, organizational objectives and market conditions................15
3.4 How promotional activity can be integrated to achieve marketing objectives...................................................16
3.5 The additional elements of marketing mix.........................................................................................................16
Task 4............................................................................................................................................................................17
4.1 Marketing mixes for two different segments in consumer market.....................................................................18
4.2 The differences in marketing Kaffel’s furniture to business rather than consumers..........................................18
4.3 Why international marketing differs from domestic marketing.........................................................................19
Conclusion....................................................................................................................................................................20
References.....................................................................................................................................................................22

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Introduction

An organization can never reach the culmination of success even having the excellent efficiency
in production unless the marketing knowledge is introduced within the organization. Marketing
is the procedure of knowing the needs and requirements of customers and responds according to
the needs and requirements of customers. In this assignment marketing concept, marketing
process and the benefits and cost of marketing orientation for Kaffel will be showcased. External
and internal factors that may influence the marketing strategy of the organization and
segmentation will also be highlighted. Then, elements of marketing mix, distribution patterns,
pricing and promotional strategy of the organization will be discussed. Finally, marketing mixes
for the new product and the difference of international and domestic marketing will be
demonstrated.

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Task 1

1.1 Marketing concept and the elements of marketing process

Marketing is the process of where the marketer develops money-making relationships with the
customers by generating value for the customers and capturing value from them (Armstrong and
Kotler, 2012). Marketing concept is the thought or tactic for marketing a product or service or it
can be defined as philosophy of marketing a product or service that is not product oriented rather
it is benefit oriented for the customers. It is a goal oriented and integrated philosophy which is
practiced by producers for producing goods and services for the satisfaction of customers. This
concept deciphers that the requirements and needs of the target market should be determined and
satisfied by the marketer for the achievements of the goals of the organization (all business,
2015).

Elements of marketing process: Planning, implementation and control are the some steps of
marketing process of Kaffel. The elements of marketing process:

Analyze the marketing opportunities: It is important for the marketer to assess the opportunities
of the market for particular product and services. The environment of marketing is analyzed by
PESTLE, SWOT, Porter five forces and other (Brassinton and Pettit, 2007).

Segmentation targeting and positioning: The marketer segments the market based on some
criteria like demographic such as age income, occupation, education, social status and religion.
These factors influence the marketing strategy of an organization. Then the marketer selects a
particular segment which the marketer thinks most convenience for the organization. The market
is also segmented on the basis of geographical location. The positioning strategy is done for
occupying a distinct position relative to competitive brand in the mind of customers (Brassinton
and Pettit, 2007).

Marketing strategy: Marketing strategy is way of satisfying the needs of customer and making
profits in returns from them. Effective marketing decisions are important for any kind of
organization to accomplish the marketing goal of the organization.

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Marketing mix decisions: The marketing mix of an organization includes four Ps such as
product, price, place and promotion. The environmental factors influence the marketing mix
decisions an organization.

Reflection, control and revision: The marketing strategy or marketing mix decisions of an
organization may require some revisions and corrections. The marketer make correction of
marketing mix decisions if there is anything unusual.

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 1.2 The benefits and cost of marketing orientation for Kaffel

Product orientation: The quality and performance of the products are highlighted in this
orientation. Benefits:

 Innovative futures, performance and quality are provided.

Cost:

 It is difficult to define quality from customer perspective as different customers want

different quality.
 High quality is not needed for all products.

Production orientation: The products that are widely available and low in cost will be favored
by the consumers is the main theme of this orientation. So the organization produces the product
in large scale to gain economic scale of production (Armstrong and Kotler, 2012). Economic
scale of production remains till the capacity of the organization not for all the times.

Sales orientation: This orientation indicates that customer will not buy the products and services
unless aggressive selling and promotional techniques are taken by the organization. Only a few
products are appropriate for this orientation (Armstrong and Kotler, 2012).

Marketing orientation: The organization will respond to the customers’ demands according to
the requirements of customers. Therefore, the organization takes many scanning programs to
identify the needs of the customers. After knowing those needs, the marketer supply goods and
services to customers (Armstrong and Kotler, 2012). The benefits of this approach:

 It considers the needs of customers.

 It addresses the needs of customers.
 This approach increases the loyalty of customers.
 Helps to gain competitive advantage in the market.

The cost of this approach:

 Costly and comprehensive research is needed for knowing the demands of customers.
 Diverse needs of customers will face the marker in confusion.

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Task 2

2.1 Macro and micro environmental factors which could influence the marketing decision
in the company

The decisions of Kaffel are highly influenced by the micro and macro environmental factors of
the organization. Macro environment is composed of political, social, economic, technological,
legal and environmental factors. The macro environment is composed of customers, suppliers,
customers, employees and competitors of the organization.

Demographic: The demographic environment of Kaffel consists of age, income, occupation,

education, household patterns, ethnic market, and religion. The marker has to take in these
elements to make marketing decisions for the organization (Cateora et al. 2008).

Political: The political party may enact new laws for controlling the practices of marketing
activities of the country. The philosophy of government party and opposition party are important
for the marketer to know.

Social: The values, beliefs, attitudes and lifestyle influence the purchase decisions of customers.
The social factors that are influencing customer’s decisions should be analyzed by the marketer
to make effective marketing decisions for the organization (Cateora et al. 2008).

Technological: The technological innovation play an important role on marketing activities as

the organization is highly dependent on technological devices for production and
communication. The adoption of appropriate devices is needed for the marker (Cateora et al.
2008).

Economic: Consumer income, inflation and recession are some major elements of economic
environment. The organization goes under a critical situation at the time of recession and
inflation (Cateora et al. 2008). The per capita income of customers influences the purchase
decisions of customers.

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Micro environmental factors:

Stakeholders: The stakeholder of Kallef includes employees, suppliers, customers, government,

creditors, and shareholders. The organization has specific responsibility to each of the
stakeholders and marketer needs to execute these responsibilities as a part of marketing activities
(Adcock and Halborg, 2001).

Competitors:

The competitive orientation of Kaffels is:

 The bargaining power of suppliers: If the organization maintains its raw materials
purchase from the specific suppliers, the suppliers will executer some power.
 The bargaining power of customers: As there is much furniture selling agency in UK, the
customers will get the option of bargaining in reducing prices.
 Threats of new entrants: Threats of new entrants are low as the business idea is not a new
and huge investment will require for the new entrants.
 Threats of subsequent product: Threats of subsequent products are high as there are much
new alternative furniture is available for the customers to choose.

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 2.2 Segmentation criteria to be used by Kaffel for B2B and B2C.

Market segmentation means dividing the market into different groups with distinct
characteristics so that ht marketer can responds to those needs and requirements appropriately.

Segmentation for B2C used by Kaffel:

Geographical segmentation: In this segmentation, the organization divides the market in

different region, state, city, metro size, density, neighborhood and climate. The organization then
targets the particular segment to respond to the segment by meeting customers’ needs and
demands (Kotler and Keller, 2012).

Demographical segmentation: The customers are divided according the demographical factors
like age, gender, family life cycle, income, occupation, education, generation, nationality,
religion, family size. This type of segmentation is popularly used by different types of
organization (Kotler and Keller, 2012).

Psychographic segmentation: The customers are divided according to the psychographic

factors like lifestyle, social class and personality.

Behavioural segmentation: The customers are divided according to the behavioral factors of
consumers like occasions, attitude toward the products, user rates, readiness stage, loyalty status
and benefits of the products. Segmentation for B2B

Demographic segmentation: In demographic segmentation used for B2B, the main variables
are industry, company size and location (Kotler and Keller, 2012).

Operating variables: The operating variables of Kappel are technology, customer’s capabilities
and usage status. The market is divided according to these operating factors.

Purchasing approaches: Purchasing approaches used by the business organization are also
taken into account for segmenting the business market.

Situational factors: Urgency, size of the order and specific application are the situational factors
for segmenting the market for B2B.

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Personal characteristics: The personal characteristics of business buyer are loyalty, buyer seller
similarity and attitudes toward the risk (Kotler and Keller, 2012).

The above methods are used by the kappel for segmenting the customers market and business
market.

2.3 Targeting strategy for products.

Market segmentation reveals those segments that are profitable and compatible for organization
to serve. So the organization selects a targeting strategy:

There are different types of targeting strategies for the organization to choose:

Undifferentiated (mass) marketing: The organization ignores the market segment differences
and wants to serve the need of whole segment with one offer (Armstrong and Kotler, 2012).

Differentiated (segmented) marketing: The organization attempts to serve several market

segments and designs several products to meet the demand of each segment.

Concentrated (niche) marketing: In this segmentation, the organization goes after a large share
of few smaller segments instead of going after smaller shares of a large market (Armstrong and
Kotler, 2012).

Micromarketing (local or individuals): The organization tailors the brands and promotion to
respond to the needs of local customer’s groups-cities, neighborhood and specific stores
(Armstrong and Kotler, 2012).

As kaffel is an office furniture provider and has some stores to serve the customers, it can adopt
differentiated or concentrated targeting strategy. However, some factors such as company
resources, product life cycle stage, market variability and competitors marketing strategy should
be taken into account for targeting the market segment. The resources of the organization are not
high and the product life cycle is short as the interest of customers towards the furniture is
changed rapidly. So, micro micromarketing strategy will be suitable for Kappel.

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 2.4 How consumer buying behavior concept affects the marketing activities in different
situation.

Figure: consumer buying process (source: Tutor2u, 2015).

Consumer buying behavior goes through the above stages such as customers are derived by inert
needs and then search information from different sources like newspaper, magazines, online and
others. The consumers evaluate the alternative products and make purchase decision. When the
customers become satisfied with the benefits of the product, the customers will advocate the
product again (Berman& Evans, 2013).

The purchase decision of consumers is not same for all the products. In some product customers
are more involved where in some products customers are not very involved in the purchase of the
product. In complex buying behavior customers highly involved in the purchase of product and
significant perceived differences among the products (Armstrong and Kotler, 2012).

When the product is risky, expensive, the customer is more involved in the product. In
dissonance reducing behavior the customer is more involved in purchasing as the cost of the
product is high (Armstrong and Kotler, 2012). There are little differences among the products.
For example, customer is involved more involved in purchasing premium furniture brand as the
price of the furniture is relatively high.

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In habitual buying behavior consumer is less involved in the purchase of the products and there
is few perceived differences among the brand. For example, in purchasing salt customer is less
involved in the purchasing decision.

Variety seeking behavior is a situation where consumer is less involved in the purchasing
decision although there is a significant perceived difference among the brand. For example,
customer purchases a particular brand of biscuits and next time he may not purchase the same
brand (Armstrong and Kotler, 2012).

2.5 New positioning for the company and its products.

The organization tries to occupy a distinct place in the mind of customers through positioning so
that the consumers always advocate the same brands. To occupy a distinct place in the mind of
customers the organization needs to gain competitive advantages. Positioning is accomplished
through the competitive advantages. The competitive advantage should be important, distinctive,
superior, preemptive, affordable and communicable.

There are some positioning strategies that are commonly practiced by the organization:

 More for the more: More features are provided at more cost.
 More for the same: More attributes of product are provided to customers at the same
prices.
 Same for less: The prices of the products are decreased instead of changing the products
features.
 Less for much less: The features and prices are decreased for the customers.

As furniture industry Kaffel can charge increases the prices for the increase of features of
furniture. The customers will pay extra prices to the organization if they receive extra features
from the organization. The products will be placed at the normal space and current promotional
strategy can be used.

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Task 3

3.1 Individual elements of marketing mix and how products can be developed to sustain
competitive advantage.

Marketing mix of Kaffel consists of product, price, place and promotion. The organization needs
to make a right combination of the mix to satisfy the needs of customers.

Product: Product is the ultimate solution of the customer’s problem and the organization tries to
respond to the problem of customer through product. Variety, quality, design, features,
packaging and services are the main components of product. Kaffel offers different types of
furniture containing different design and features, services for the solution of customers’ needs
(Armstrong and Kotler, 2012).

Price: Price is the cost of customers that customers give the organization for the exchange of
furniture. The price of product may include list price, discount, allowances, and credit terms.

Placement: The product is placed in a position so that the customer can easily collect the
product. In this case the organization has to think about channels, coverage, locations, inventory,
transportation and assortments (Armstrong and Kotler, 2012).

Promotion: Many types of communication programs are taken by Kaffel to send the marketing
messages to the customers.

The product development begins from idea generation in which the research and development of
the organization generates new ideas of product or third party can be hired for generating ideas.
The suitable ideas are kept and product concept is developed and tested. Marketing strategy is

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developed for the concept and analyzed by business. Finally the product is developed and tested
in a small market segment to know the actual scenario. Finally the product is developed in large
quantities and marketed in large market segment (Armstrong and Kotler, 2012).

3.2 How a good distribution arrangement can provide customer convenience for both
market (B2B and B2C).

Figure: consumer and business marketing channels (source: study blue, 2015).

B2C

In customer marketing channels the organization sells directly to its customers by using its stores
or the organization can sell to the retailer for the ultimate sales to the customers. Finally, the
organization may follow the full channels of distribution where the product is sold in large
quantities to the wholesalers and the wholesalers sell them to the retailer. Finally, the retailer
reaches them to the hand of customers (Armstrong and Kotler, 2012).

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B2B

The organization can sell the product to the business customers directly or it can use business
distributors for selling furniture to the customers. The organization may also adopt the full form
of distribution such as it can sell furniture to the manufacturer representative. The representative
will sell them to ht business distributors and furniture is reached to the business customers
through the distributors.

As the organization has a few stores, it can sell directly to the customers which will help to
maintain strong relationship with the customers.

3.3 How prices are set to reflect positioning strategy, organizational objectives and
market conditions.

Price the cost of customers which customer gives to the organization in exchange of goods from
the organization. Pricing strategy is important for any kinds of organization as the objectives and
positioning strategy are related to it (Armstrong and Kotler, 2012).

Penetration pricing: For entering a new market where competition is high Kappel can use this
pricing strategy to attract the interest of customers. This pricing strategy will help the
organization to capture more market share of the market (Armstrong and Kotler, 2012).

Psychological pricing: The price of the furniture in such a way so that it considers the
psychology of customers. For example, the price of particular furniture can be set £990 instead
of £1000.

Product bundle pricing: A set of furniture can be sold at a single price rather than segmented
prices. This will help the organization to push some product to customers.

Discount and allowances pricing: Discount and allowances can be provided to customers to
intensify the sales of product to the customers. This strategy is followed in off period of demand.

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Value base pricing: The price of furniture can be set according to the value or features of the
product to customers. Customer who will purchase product with extra features will pay extra
prices (Armstrong and Kotler, 2012).

3.4 How promotional activity can be integrated to achieve marketing objectives.

Different types of promotional activities are taken by organization to achieve the objectives of
marketing.

Advertising: TV, radio, newspaper and magazine are used.

Sales promotion: Store decoration, social media and viral videos are used.

Personal selling: Empathetic employees perform this.

Direct marketing: personal selling, online and telephone are used.

This type of promotional activities provides some advantage:

 Consistency: To achieve the marketing objectives the message should be consistent with
the product and the media should also be consistent.
 Coordination: The timing, selection and longevity of promotions should be coordinated
and planned out strategies to reach the target customers.
 Reach: To send the message to the targeted customers is also important for the
organization. The media for promotional activity should be selected by considering reach
ability of the Medias.
 Repetition: The customer need be exposed to the same message again and again to
introduce the message with the customers.

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 3.5 The additional elements of marketing mix.

Process: The organization maintains some procedures in organizing the stores, selling furniture
to the customers and providing services to the customers. Procedures are also used for
communication with the customers and maintaining quality of furniture (Chaffey, 2012).

People: There are several human resources of Kappel who are working in marketing department,
financial department, accounting department, management department and sales department. All
the personals are working for the achievement of the organizational goals (Chaffey, 2012).

Physical evidence: The internal and external decorations of the organization are also important to
create positive impression about the organization in the mind of customers. Shop floor layout,
lighting, decorations and layout are included in this element (Chaffey, 2012).

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Task 4

4.1 Marketing mixes for two different segments in consumer market.

Premium range of furniture (marketing mix)

Product: Product will compose of high quality with special features. The product will also have
some benefits beyond the expectation of customers. Innovative and luxurious product will be
provided to customers.

Price: Normally the price will be high as the features and quality of the product is high. The
prices of the product will increase if the more features are added to the product.

Place: The product will be displayed in the city area so that the customer can notice the product
and make an attempt to purchase them. Special spaces should be provided in the stores for the
product.

Promotion: Selective magazine, personal selling and billboard can be used for attracting the high
income people.

Economy range of furniture (marketing mix)

Product: Medium quality with low features product will be provided to the customers. Essential
features should be provided to the customers.

Price: Price of the product should be tried to keep low by decreasing operating and marketing
cost.

Place: Product will be available in the convenience stores and density areas so that customer can
easily purchase them.

Promotion: Advertising in local newspaper and billboard can be used for the promotional
purposes.

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 4.2 The differences in marketing Kaffel’s furniture to business rather than consumers.

There are some remarkable differences in marketing furniture to business rather than consumers.
The differences are:

 Emotional factors play a significant role in consumer purchase decision whereas these
factors are not acute in business purchasing decision.
 More sellers and buyers relationship and loyalty in B2B marketing whereas it is less in
B2C marketing.
 Shorter and more direct distribution channels are used for B2B but more complex
distribution patterns are used in B2C marketing.
 Fewer purchaser purchase high volume of product in B2B but more purchasers with low
quantities of product in B2C.
 The purchaser has high knowledge in B2B marketing whereas the purchaser has low
level of knowledge about product.

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 4.3 Why international marketing differs from domestic marketing.

The international marketing and domestic marketing are not same as the political, social,
cultural, economic and environmental factors of this marketing environment are not the same.

 Different legal system: The legal system of the two markets is not same. The difference
of legal system put pressure on the marketer for doing international marketing.
 Cultural differences: The cultures of a foreign market are totally different from the
domestic market. The marketer needs to have depth knowledge for design marketing
strategy for that market (Miller, 2010).
 Difference monetary and marketing infrastructure: As the monetary system of the two
countries is not same, the marker face problem in setting prices for furniture.
 Transportation cost and degree of risks: The transportation cost and degree of risk
increase in international marketing (Cateora et al, 2010).
 More financial resources are required for international marketing.
 The marker needs to change the marketing strategy to adapt to the foreign culture.

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Conclusion

The marketer of an organization develops marketing strategy considering many factors that may
influence the marketing decision of an organization. Segmentation, targeting and positioning are
some basic components of marketing. Pricing, distribution and promotion are some major tasks
of the marketer of Kaffel. Marketing decisions are taken focusing on the marketing mixes and
the behavior of consumers. Marketing in domestic areas are not same as international areas as
there are many environmental factors which are not same in the two countries.

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References

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