Question

3.        

(i) Explain the four types of utility (value) added by marketing to move goods from producers to consumers.

(ii)Discuss the logical progression from the first to the last step of the marketing process.

(iii) Explain the concept of target or bull's eye marketing especially for small business.

Answer 1

1) The four types of utility (value) added by marketing to move goods from producers to consumers.

When the goods move from the producers to the consumers at various stages value is added so that ultimately the consumer needs, wants and desires are satisfied. Customers buy different products that basically satisfy different criteria for him. Some products are bought that have a time utility, some have place, possession and form utility.

Time Utility: Marketers ensure that their product is made available to the consumer at the right time when he needs them and in doing so they add time utility to the product. For e.g supermarkets and pharmacies that are open 24/7 have a time utility value over them that are not open 24/7. Similarly during winter season the woollen clothes have a time utility over the other clothes. Thus retailers add time utility by making the products available when they are needed.

Place Utility: When the product is placed at a convenient place for the customers there are higher chances that the consumer will buy it. Thus a place uility value is added. The online food delivery services like Zomato, Swiggy and the taxi services like Uber, Lyft have a place utility similarly Amazon has a place utility as it is very convenient for the customers to buy the products online without physically visting the store.

Possession Utility: Some intermediaries add possession value to the product. Many customers would contemplate renting a car then owning one thus car rental services like Enterprise add possession value to the customer. Possession utility value is also added when a new use of the existing product is thought of like adding accessories to old shoes to refashion them.

Form Utility: When raw materials are changed in a way that they become useful to the consumers form utility value is added to the product. Here the finished product is more useful to the consumer than the raw materials or parts for e.g a printed circuit board may be of little use to the consumer but when it is assembled in a lap top with other parts it becomes useful to the consumer.

2) The Marketing Process: The Marketing process is one in which opportunities are identified, customers are selected, products are decided for this customers, the marketing mix for the customer is finalised and finally the performance is evaluated to see if the marketing process has been successful or not. This makes sense as when the prodcuts that consumers find useful are made they are more likely to experience higher sales. When a company discovers needs and wants of the customer that are not fulfilled it can think of products and services to fill that gap. For e.g wearable technology. Once this gap is identified next the company has to understand who would be buying its products. To simplify this complex process it can divide the whole market to small groups or sections having similar consumer wants, needs, and prefrences. This is also known as Market segmentation, for our example it can be the young generation which adopts technology very easily. The Market segmentation can also be done on demographic variables. It has to decide whether it wants to market to all consumers or a particular niche. After deciding the target consumers next it has to decide the Marketing Mix what will be the product, price,place and promotions. The product desicions would be what type of wearable technology the company aims to provide whether it is clothes, shoes, eye wear, accessories or watch. Once the product/service is decided the next important step is to decide at what price the product would be offered. If the company is looking for volume it can think of low cost and if it is looking for a price leadership it can offer the product at a premium for our e.g since wearable technology is still not much popular it can offer the products at a premium. The place where the product will be available is an important marketing desicion as consumers want to buy the products many times at places that they find convenient for our example the company can go for its own stores to sell the wearable technology products. The final desicion in this step is how the product will be marketed to the consumers. Making the consumers aware of the product is the first step of creating an impression of the product. How the consumers perceive the product and how they feel about it goes a long way in Positioning the product in the consumer's mind. For our example T.V advertisements educating people about the uses and features of wearable technology will be more appropriate as it will create awareness about how this technolgy can be used in day-to-day life. The final step in the marketing process would be then to collect information of how satisfied consumers are and what changes they would like in the product to see whether the marketing efforts have been successful or not.

Bull's eye marketing for small business: The concept of bull's eye marketing is to target consumers and then develop products and services for them. When a company makes products or services for consumers who are most likely to buy them it is adopting the bull's eye approach. For e.g Tesco the largest retailer in U.K has embraced this approach where it offers discount coupons on products that the consumer is most likely to buy. Tesco gathers information about life style of the consumers and then offers the discount coupons for the products that the consumer is more likely to buy. Other approaches to identify the target customer can also be adopted like age, education, and other demographic variables. The bull's eye approach is also useful for the small business like a ice cream parlour. A small company may not have the financial muscle to take on and compete with the larger one but it can adopt the bull's eye concept to grow its business. If youngsters are frequenting the ice cream parlour it can think of adopting bold flavours and use innovative ways of advertising its products like volunteering work at the ice cream parlour for the youngsters, allowing them to make their own cones and so on. Consumer feed back can be obtained by asking about the prefrences, taste, flavours that the youngsters would like for their ice-cream. It can also consider the price factor and offer premium products or season's flavours at an higher price. Thus a small business can aim to compete with large business adopting the bull's eye approach.