1. Fundamentación del tema
This topic is part of the Business Communication Learning Unit (UDA, for its acronym in Spanish), which belongs to the sixth semester of the Licenciatura en Contador Público (public accountant). Knowing the present topic is important for the student to establish a frame of reference on marketing. In this way, the success of a product or service offered by a supplier does not depend solely on its quality, since it can not sell itself. There are many steps before satisfying a customer need or desire, from determining customer needs to offering them viable solutions and building customer relationships. It is important for an accountant to know about these topics because as advisors or professional service providers, we will better understand for whom we work and their market, especially in personal situations, when we have to offer the professional services, whether in a national or international context. For that reason, we must practice our knowledge in a foreign language, such as English.
2. Objetivo didáctico
Evaluate the importance of marketing in the business context elements, while analyzing the elements that make a company competitive, to encourage the student to use self-learning tools.
3. Contenido didáctico
Hello, dear student! Welcome to this topic about marketing. We know that you have already studied these topics in other courses in Spanish. Here, your knowledge and English skills will be useful to learn all the new information and talk about business not only in your country, since we want you to become a successful businessperson and start your professional career with tools and lots of functional information. In this lesson we will show the basics of marketing, through the following subtopics:
- The role of marketing
- Identifying and satisfying customer needs
- Maintaining customer loyalty and building customer relationships
- Market changes
- Factors that change consumer spending patterns
- Why some markets become more competitive
- How businesses respond to changing spending patterns and increased competition.
- Niche marketing and mass marketing
- Market segmentation
We know you want to keep learning more about this topic with us. We are happy to have you here!
Desarrollo del tema
To begin with, we would like to discuss what marketing is through some definitions in order to introduce this topic from the business point of view. Why is marketing important in business? Does every company need a marketing department? Today, we know that marketing plays a very important role in every company, regardless of its department size.
Big companies spend a considerable amount of money in their marketing department to make their product attractive to the general public. They organize special marketing campaigns to introduce their new products to the world. We have many examples of big companies doing these for years. With the use of social media and social networks (such as Facebook, Instagram, WhatsApp, Google Ads) companies have reached almost everyone that level of access to the internet.
Anyway, let’s start from the beginning: what is marketing? We will see how some authors define it:
“Activity that provides value to customers, partners, customers, and society in general”.
(Wilkie & Moore in Lozada & Zapata, 2016: 53).
“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”.
(Lamb, Hair, McDaniel, Boshoff & Terblanché, 2007: 6).
These definitions are representative but not ultimate, because they can change depending on the approach to marketing.
The role of marketing
1.1 Identifying and satisfying customer needs
Business activities involve more than just coming up with a good idea for a product or service, making it happen and selling it. Before anything else, it is necessary to understand what customers want. This may even include predicting what they require. Consequently, businesses have to produce exactly what customers want and make sure they have satisfied customer requirements. This lesson is focused on the first part, i.e. understanding customer needs and wants or desires.
We have already seen that a need means something that is essential for the customer to live, while a want or desire is something that people would like to have. One of the objectives of marketing is to convert customer wants into needs.
Businesses often use promotional activities, especially advertising, to persuade customers to turn their wants or desires into needs. By doing so, business sales, revenue, and profits will rise. Companies identify these needs through the use of market research methods such as focus groups, observation, market testing or consumer surveys. Once the need or want has been identified, the company business must decide whether it is capable of satisfying that need or want by producing a good or offering a service that can be sold to the consumer at a profit. This is the main objective of the business activity.
(Fisher, Houghton & Jain, 2018).
1.2 Maintaining customer loyalty and building customer
Without customers, there is no business. Therefore, one of the most important functions of marketing is to create groups of customers to whom companies can sell their products or services. This is known as a customer base. After that, companies must build customer relationships to maintain customer loyalty. But how are these customers’ relationships built?
After a customer base is established, the aim of marketing is to keep it, which is known as customer loyalty. To do this, it is necessary to research as much information about the customers as possible, such as their income, lifestyle, hobbies, age, gender, etc. The purpose of collecting this information is to identify and satisfy customer needs and to carefully target each customer.
We invite you to watch the next video in which you will learn about building customer relationships and their purpose:
2. Market Changes
2.1 Factors that change consumer spending patterns
Before we go further, we have to understand the definition of market:
“Market is a place where buyers and sellers come together to buy and sell goods and services”
(Fisher, Houghton & Jain, 2018).
However, market can be also used to describe all consumers who are interested in buying a product and have the financial resources to do so. These consumers can be described as the “potential market” for a product. When companies decide to manufacture products for a specific group of consumers, these consumers are known as the “target market”.
(Fisher, Houghton & Jain, 2018).
The business environment is constantly changing. The amount of money spent and the number of products sold can be affected by a number of factors, some of which may include:
- The price of the product: For many products, the higher the price, the less quantity is sold, and the lower the price, the more quantity is sold. This relationship between price and quantity is expressed in the demand curve:
- The price of competing products: Most companies and products are in very competitive markets, so when the product is fairly similar, consumers tend to spend money on the product at a lower price.
- Changes in consumer income: Consumers can only buy products when they have the money to do so. When the consumer’s income decreases, as when an employee loses his job, this consumer will spend on primary necessities, such as food or housing, and the vice-versa effect when the consumer’s income increases.
- Changes in population size and structure: These changes may manifest themselves as the population of a country grows, the size of the «market» becomes larger, or the structure may change, e.g. when the majority of a country’s population is elderly, products aimed at the elderly increase their sales, while sales of products aimed at children decrease.
- Changes in preferences and fashion: The best way to explain this is the fashion of clothing that is constantly changing, by the season of the year, the designer of the moment, on the advice of an influencer, etc.
- Spending on advertising and other promotional activities: We have mentioned that large and small companies try to persuade the consumer to buy their product instead of their competitors. Companies also spend on branding, which is a technique to add value to their product, that means it gives them the ability to increase the price of such a product and the consumer may agree to this increase for the sole reason of feeling belonging to this brand.
The above are some factors that can change the pattern of consumer spending, but there are many more. We invite you to watch the following video showing some factors that change the pattern of consumer spending in the UK:
2.2 Why some markets become more competitive
Some markets become more competitive than others due to different factors, some of which include:
- Government intervention in markets. In many countries the government has a significant influence on business activity and can affect competition in markets through:
- Legal controls that prevent monopolies.
- Tax incentives for some markets or sectors.
- Sale of public sector organizations or resources to the private sector. This is known as privatization.
- Deregulation. The removal of government controls from an industry.
- Changes in policies, such as monetary policy.
- Providing financial and other assistance to companies.
- Growth of free trade between countries. These help to remove or reduce barriers to trade between countries, e.g. the USMCA or United States-Mexico-Canada Agreement (T-MEC in Spanish).
- Development of e-commerce and social media networks. The development of e-commerce has increased the size of a company’s market beyond its region, and even country of origin. This also supports communication between buyers and suppliers in real-time. Social media management today is essential, more so in these times with an ongoing pandemic
(Fisher, Houghton & Jain, 2018).
In this web video you will learn more about government intervention in markets:
2.3 How businesses respond to changing spending patterns and increased competition.
There are different strategies that businesses use to respond to these changes, some of which include:
- Product development. Market research will identify how the consumers’ needs and wants are changing. This information will help to make an analysis of companies developing another product to satisfy the consumer, restructuring an existing product, or even if it is necessary to discontinue a product and remain competitive.
- Improve efficiency. Efficient use of resources will help a company to reduce the average costs of making a product, which means that the company can give a better price to consumers and improve sales, as we looked in the demand curve.
- Increased promotion. Increasing advertising offers such as 2-for-1, promotion on social media, and other ways to persuade the consumer to buy the products instead of those of the competition.
- Seek new markets. Sometimes consumer patterns change too much, and the best strategy is to look for new markets, where there is less competition or where the consumer is more likely to buy the product (Self Learn en, 2019)
We invite you to watch the following video on the fundamentals of market research and its methods in order to complement what we have discussed in this lesson:
We also encourage you to read the following presentation that has been prepared for you to talk about niche marketing, mass marketing and segmentation.
Tema 7: Mercadotecnia-Marketing- Niche and mass marketing, market segmentation
As we have seen, marketing is not only about knowing strategies of how to sell a product, it is also how to keep your market loyal to a product or service, to identify the way to treat clients, and to determine how good a product is (the balance between price and quality). Certainly, the marketing department must be one of the most important in a company, since it is part of doing business and improves in many ways the status and faith of your market. We recommend you to take courses and read more about marketing, as well as to include marketing plans in your business to be more involved and track your results. Remember that every tool you have increases the probability of success. We look forward to seeing you in the next lesson!
Resumen e ideas relevantes
It is important that you keep in mind:
- Business activities involve more than just coming up with a good idea for a product or service, making it happen and selling it. Before anything else, it is necessary to understand what customers want. This may even include predicting what they require. Consequently, businesses have to produce exactly what customers want and make sure they have satisfied customer requirements.
- Companies use market research methods to understand customer needs, as well as promotions, advertisement, and other ways to persuade the consumer to buy their product or service.
- Building customer relationships is important to keep the loyalty of consumers.
- There are factors that can change the patterns of consumer spending, e.g. the price of the product, the price of the competing product, changes in consumer income, changes in population size and structure, changes in preferences and fashion, etc.
- There are factors that make a market more competitive, such as the government interactions on markets, the growth in free trades, e-commerce, etc.
- Among the strategies used by companies to respond to changes in consumer behavior are product development, improved efficiency, increased promotion, the search for new markets, etc.
Fuentes de consulta
- Fisher, M., Houghton, M. y Jain, V. (2018). Cambridge IGCSE® and O Level Business Studies Coursebook. Cambridge: Cambridge University Press [recurso privado].
- Lamb, C.W., Hair, J.F., McDaniel, C., Boshoff, C. y Terblanché, N.S. (2011). Marketing. Mason, Ohio: Cengage Learning. Recuperado de: https://fir.bsu.by/images/departments/ee/ee-materials/ee-materials/drozd/drazd_Lamb.Marketing%2011%20edition.pdf
- Lozada Contreras, F. y Zapata Ramos, M. (2016). What is Marketing? A Study on Marketing Managers’ Perception of the Definition of Marketing. Fórum Empresarial, 21(1), 49-69. Recuperado de: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiTq7qn_LXyAhVcTDABHT8ZAjgQFnoECBQQAQ&url=https%3A%2F%2Fdialnet.unirioja.es%2Fdescarga%2Farticulo%2F6230225.pdf&usg=AOvVaw0B4NQyrtwD6HLBrPUTtP0v (Lleva a descarga directa)
- selfLearn-en [selfLearn-en]. (24 de agosto de 2018). marketing research for beginners, understanding marketing research fundamentals . YouTube. Recuperado de: https://www.youtube.com/watch?v=apm0wH9HU0Y&ab_channel=selfLearn-en
- Video en internet: Crash Course. [Crash Course]. (2019, Octubre 16). How to Build Customer Relationships: Crash Course Entrepreneurship #10. Recuperado de URL: How to Build Customer Relationships: Crash Course Entrepreneurship #10
- Video en internet: tutor2u. [tutor2u]. (2019, Octubre 1). Factors affecting Consumer Spending. Recuperado de URL: Factors affecting Consumer Spending
- Video en internet: Clifford, J. [Jacob Clifford]. (2020, Agosto 31). Government Intervention- Micro Topic 2.8. Recuperado de URL: Government Intervention- Micro Topic 2.8
- Documento en línea: Stephen, A. (2017) “Don’t Forget The Fundamental Purpose Of Marketing Revolves Around Creating Value For Customers” Recovered from: https://www.forbes.com/sites/andrewstephen/2017/11/29/dont-forget-the-fundamental-purpose-of-marketing-revolves-around-creating-value-for-customers/?sh=40b0a65676c5