Marketing research

Marketing research is a form of business research and is generally divided into two categories: consumer market research and business-to-business (B2B) market research, which was previously known as industrial marketing research. Consumer marketing research studies the buying habits of individual people while business-to-business marketing research investigates the markets for products sold by one business to another.

Consumer market research is a form of applied sociology that concentrates on understanding the behaviours, whims and preferences, of consumers in a market-based economy, and aims to understand the effects and comparative success of marketing campaigns. The field of consumer marketing research as a statistical science was pioneered by Arthur Nielsen with the founding of the ACNielsen Company in 1923.

Thus marketing research is the systematic and objective identification, collection, analysis, and dissemination of information for the purpose of assisting management in decision making related to the identification and solution of problems and opportunities in marketing. The goal of marketing research is to identify and assess how changing elements of the marketing mix impacts customer behavior.

Role of marketing research

The task of marketing research is to provide management with relevant, accurate, reliable, valid, and current information. Competitive marketing environment and the ever-increasing costs attributed to poor decision making require that marketing research provide sound information. Sound decisions are not based on gut feeling, intuition, or even pure judgment.

Marketing managers make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs. They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control. These decisions are complicated by interactions between the controllable marketing variables of product, pricing, promotion, and distribution. Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition, and social and cultural changes. Another factor in this mix is the complexity of consumers. Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. It helps remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, consumers' response to marketing programs cannot be predicted reliably or accurately. Ongoing marketing research programs provide information on controllable and non-controllable factors and consumers; this information enhances the effectiveness of decisions made by marketing managers.

Traditionally, marketing researchers were responsible for providing the relevant information and marketing decisions were made by the managers. However, the roles are changing and marketing researchers are becoming more involved in decision making, whereas marketing managers are becoming more involved with research. The role of marketing research in managerial decision making is explained further using the framework of the DECIDE model:

D —- Define the marketing problem

E —- Enumerate the controllable and uncontrollable decision factors

C —- Collect relevant information

I —- Identify the best alternative

D —- Develop and implement a marketing plan

E —- Evaluate the decision and the decision process

The DECIDE model conceptualizes managerial decision making as a series of six steps. The decision process begins by precisely defining the problem or opportunity, along with the objectives and constraints. Next, the possible decision factors that make up the alternative courses of action (controllable factors) and uncertainties (uncontrollable factors) are enumerated. Then, relevant information on the alternatives and possible outcomes is collected. The next step is to select the best alternative based on chosen criteria or measures of success. Then a detailed plan to implement the alternative selected is developed and put into effect. Last, the outcome of the decision and the decision process itself are evaluated.

Marketing research characteristics

First, marketing research is systematic. Thus systematic planning is required at all the stages of the marketing research process. The procedures followed at each stage are methodologically sound, well documented, and, as much as possible, planned in advance. Marketing research uses the scientific method in that data are collected and analyzed to test prior notions or hypotheses.

Marketing research is objective. It attempts to provide accurate information that reflects a true state of affairs. It should be conducted impartially. While research is always influenced by the researcher's research philosophy, it should be free from the personal or political biases of the researcher or the management. Research which is motivated by personal or political gain involves a breach of professional standards. Such research is deliberately biased so as to result in predetermined findings. The motto of every researcher should be, "Find it and tell it like it is." The objective nature of marketing research underscores the importance of ethical considerations, which are discussed later in the chapter.

Marketing research involves the identification, collection, analysis, and dissemination of information. Each phase of this process is important. We identify or define the marketing research problem or opportunity and then determine what information is needed to investigate it., and inferences are drawn. Finally, the findings, implications and recommendations are provided in a format that allows the information to be used for management decision making and to be acted upon directly. It should be emphasized that marketing research is conducted to assist management in decision making and is not: a means or an end in itself. The next section elaborates on this definition by classifying different types of marketing research.

Comparison with other forms of business research

Other forms of business research include:

• Market research is broader in scope and examines all aspects of a business environment. It asks questions about competitors, market structure, government regulations, economic trends, technological advances, and numerous other factors that make up the business environment (see environmental scanning). Sometimes the term refers more particularly to the financial analysis of companies, industries, or sectors. In this case, financial analysts usually carry out the research and provide the results to investment advisors and potential investors.

• Product research - This looks at what products can be produced with available technology, and what new product innovations near-future technology can develop (see new product development).

• Advertising research - is a specialized form of marketing research conducted to improve the efficacy of advertising. Copy testing, also known as "pre-testing," is a form of customized research that predicts in-market performance of an ad before it airs, by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion. Pre-testing is also used on ads still in rough (ripomatic or animatic) form. (Young, pg. 213)

Classification of marketing research

Organizations engage in marketing research for two reasons: (1) to identify and (2) solve marketing problems. This distinction serves as a basis for classifying marketing research into problem identification research and problem solving research.

Problem identification research is undertaken to help identify problems which are, perhaps, not apparent on the surface and yet exist or are likely to arise in the future. Examples of problem identification research include market potential, market share, brand or company image, market characteristics, sales analysis, short-range forecasting, long range forecasting, and business trends research. A survey of companies conducting marketing research indicated that 97 percent of those who responded were conducting market potential, market share, and market characteristics research. About 90 percent also reported that they were using other types of problem identification research. Research of this type provides information about the marketing environment and helps diagnose a problem. For example, a declining market potential indicates that the firm is likely to have a problem achieving its growth targets. Similarly, a problem exists if the market potential is increasing but the firm is losing market share. The recognition of economic, social, or cultural trends, such as changes in consumer behavior, may point to underlying problems or opportunities. The importance of undertaking problem identification research for the survival and long term growth of a company is exemplified by the case of PIP printing company

Once a problem or opportunity has been identified, as in the case of PIP, problem solving research is undertaken to arrive at a solution. The findings of problem solving research are used in making decisions which will solve specific marketing problems. More than two-thirds of companies conduct problem solving research.

The Stanford Research Institute, on the other hand, conducts an annual survey of consumers that is used to classify persons into homogeneous groups for segmentation purposes. The National Purchase Diary panel (NPD) maintains the largest diary panel in the United States.

Standardized services are research studies conducted for different client firms but in a standard way. For example, procedures for measuring advertising effectiveness have been standardized so that the results can be compared across studies and evaluative norms can be established. The Starch Readership Survey is the most widely used service for evaluating print advertisements; another well-known service is the Gallup and Robinson Magazine Impact Studies. These services are also sold on a syndicated basis.

Customized services offer a wide variety of marketing research services customized to suit a client's specific needs. Each marketing research project is treated uniquely.

Limited-service suppliers specialize in one or a few phases of the marketing research project. Services offered by such suppliers are classified as field services, coding and data entry, data analysis, analytical services, and branded products. Field services collect data through mail, personal, or telephone interviewing, and firms that specialize in interviewing are called field service organizations. These organizations may range from small proprietary organizations which operate locally to large multinational organizations with WATS line interviewing facilities. Some organizations maintain extensive interviewing facilities across the country for interviewing shoppers in malls.

Coding and data entry services include editing completed questionnaires, developing a coding scheme, and transcribing the data on to diskettes or magnetic tapes for input into the computer. NRC Data Systems provides such services.

Analytical services include designing and pretesting questionnaires, determining the best means of collecting data, designing sampling plans, and other aspects of the research design. Some complex marketing research projects require knowledge of sophisticated procedures, including specialized experimental designs, and analytical techniques such as conjoint analysis and multidimensional scaling. This kind of expertise can be obtained from firms and consultants specializing in analytical services.

Data analysis services are offered by firms, also known as tab houses, that specialize in computer analysis of quantitative data such as those obtained in large surveys. Initially most data analysis firms supplied only tabulations (frequency counts) and cross tabulations (frequency counts that describe two or more variables simultaneously). With the proliferation of software, many firms now have the capability to analyze their own data, but, data analysis firms are still in demand.

Branded marketing research products and services are specialized data collection and analysis procedures developed to address specific types of marketing research problems. These procedures are patented, given brand names, and marketed like any other branded product.

Types of marketing research

Marketing research techniques come in many forms, including:

• Ad Tracking – periodic or continuous in-market research to monitor a brand’s performance using measures such as brand awareness, brand preference, and product usage. (Young, 2005)

• Advertising Research – used to predict copy testing or track the efficacy of advertisements for any medium, measured by the ad’s ability to get attention, communicate the message, build the brand’s image, and motivate the consumer to purchase the product or service. (Young, 2005)

• Brand equity research - how favorably do consumers view the brand?

• Brand association research - what do consumers associate with the brand?

• Brand attribute research - what are the key traits that describe the brand promise?

• Brand name testing - what do consumers feel about the names of the products?

• Commercial eye tracking research - examine advertisements, package designs, websites, etc by analyzing visual behavior of the consumer

• Concept testing - to test the acceptance of a concept by target consumers

• Coolhunting - to make observations and predictions in changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle

• Buyer decision processes research - to determine what motivates people to buy and what decision-making process they use

• Copy testing – predicts in-market performance of an ad before it airs by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion. (Young, p 213)

• Customer satisfaction research - quantitative or qualitative studies that yields an understanding of a customer's of satisfaction with a transaction

• Demand estimation - to determine the approximate level of demand for the product

• Distribution channel audits - to assess distributors’ and retailers’ attitudes toward a product, brand, or company

• Internet strategic intelligence - searching for customer opinions in the Internet: chats, forums, web pages, blogs... where people express freely about their experiences with products, becoming strong "opinion formers"

• Marketing effectiveness and analytics - Building models and measuring results to determine the effectiveness of individual marketing activities.

• Mystery Consumer or Mystery shopping - An employee or representative of the market research firm anonymously contacts a salesperson and indicates he or she is shopping for a product. The shopper then records the entire experience. This method is often used for quality control or for researching competitors' products.

• Positioning research - how does the target market see the brand relative to competitors? - what does the brand stand for?

• Price elasticity testing - to determine how sensitive customers are to price changes

• Sales forecasting - to determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc.

• Segmentation research - to determine the demographic, psychographic, and behavioural characteristics of potential buyers

• Online panel - a group of individual who accepted to respond to marketing research online

• Store audit - to measure the sales of a product or product line at a statistically selected store sample in order to determine market share, or to determine whether a retail store provides adequate service

• Test marketing - a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider market

• Viral Marketing Research - refers to marketing research designed to estimate the probability that specific communications will be transmitted throughout an individuals Social Network. Estimates of Social Networking Potential (SNP) are combined with estimates of selling effectiveness to estimate ROI on specific combinations of messages and media.

All of these forms of marketing research can be classified as either problem-identification research or as problem-solving research.

A company collects primary research by gathering original data. Secondary research is conducted on data published previously and usually by someone else. Secondary research costs far less than primary research, but seldom comes in a form that exactly meets the needs of the researcher.

A similar distinction exists between exploratory research and conclusive research. Exploratory research provides insights into and comprehension of an issue or situation. It should draw definitive conclusions only with extreme caution. Conclusive research draws conclusions: the results of the study can be generalized to the whole population.

Exploratory research is conducted to explore a problem to get some basic idea about the solution at the preliminary stages of research. It may serve as the input to conclusive research. Exploratory research information is collected by focus group interviews, reviewing literature or books, discussing with experts, etc. This is unstructured and qualitative in nature. If a secondary source of data is unable to serve the purpose, a convenience sample of small size can be collected. Conclusive research is conducted to draw some conclusion about the problem. It is essentially, structured and quantitative research, and the output of this research is the input to management information systems (MIS).

Exploratory research is also conducted to simplify the findings of the conclusive or descriptive research, if the findings are very hard to interpret for the marketing managers.

Marketing research methods

Methodologically, marketing research uses the following types of research designs:

Based on questioning:

• Qualitative marketing research - generally used for exploratory purposes - small number of respondents - not generalizable to the whole population - statistical significance and confidence not calculated - examples include focus groups, in-depth interviews, and projective techniques
• Quantitative marketing research - generally used to draw conclusions - tests a specific hypothesis - uses random sampling techniques so as to infer from the sample to the population - involves a large number of respondents - examples include surveys and questionnaires. Techniques include choice modelling, maximum difference preference scaling, and covariance analysis.

Based on observations:

• Ethnographic studies -, by nature qualitative, the researcher observes social phenomena in their natural setting - observations can occur cross-sectionally (observations made at one time) or longitudinally (observations occur over several time-periods) - examples include product-use analysis and computer cookie traces. See also Ethnography and Observational techniques.
• Experimental techniques -, by nature quantitative, the researcher creates a quasi-artificial environment to try to control spurious factors, then manipulates at least one of the variables - examples include purchase laboratories and test markets

Researchers often use more than one research design. They may start with secondary research to get background information, then conduct a focus group (qualitative research design) to explore the issues. Finally they might do a full nation-wide survey (quantitative research design) in order to devise specific recommendations for the client.

Business to business market research

Business to business (B2B) research is inevitably more complicated than consumer research. The researchers need to know what type of multi-faceted approach will answer the objectives, since seldom is it possible to find the answers using just one method. Finding the right respondents is crucial in B2B research since they are often busy, and may not want to participate. Encouraging them to “open up” is yet another skill required of the B2B researcher. Last, but not least, most business research leads to strategic decisions and this means that the business researcher must have expertise in developing strategies that are strongly rooted in the research findings and acceptable to the client.

There are four key factors that make B2B market research special and different to consumer markets:

• The decision making unit is far more complex in B2B markets than in consumer markets
• B2B products and their applications are more complex than consumer products
• B2B marketers address a much smaller number of customers who are very much larger in their consumption of products than is the case in consumer markets
• Personal relationships are of critical importance in B2B markets.

Marketing Research in Small Business and Nonprofit Organizations

Marketing research does not only occur in huge corporations with many employees and a large budget. Marketing information can be derived by observing the environment of their location and the competitions location. Small scale surveys and focus groups are low cost ways to gather information from potential and existing customers. Most secondary data (statistics, demographics, etc.) is available to the public in libraries or on the internet and can be easily accessed by a small business owner.

Below some steps that could do by SME (Small Medium Entreprise) to analyze the market

Step 1.Provide secondary and or primary data (if necessary);

Step 2.Analyze Macro & Micro Economic data (e.g. Supply & Demand, GDP,Price change, Economic growth, Sales by sector/industries,interest rate, number of investment/ divestment, I/O, CPI, Social anlysis,etc);

Step 3.Implement the marketing mix concept, which is consist of: Place, Price, Product,Promotion, People, Process, Physical Evidence and also Political & social situation to analyze global market situation);

Step 4.Analyze market trends, growth, market size, market share, market competition (e.q.SWOT analysis, B/C Analysis,channel mapping identities of key channels, drivers of customers loyalty and satisfaction, brand perception, satisfaction levels, current competitor-channel relationship analysis, etc),etc.;

Step 5.Determine market segment, market target, market forecast and market position;

Step 6.Formulating market strategy & also investigating the possibility of partnership/ collaboration (e.q.Profiling & SWOT analysis of potential partners, evaluating business partnership.)

Step 7.Combine those analysis with the SME's business plan/ business model analysis (e.q.Business Description, Business process, Business Strategy ,Revenue model, Business expansion, Return of Investment, Financial analysis (Company History, Financial assumption, Cost/Benefit Analysis, Projected profit & Loss, Cashflow, Balance sheet & business Ratio,etc).
Note as important : Overall analysis is should be based on 6W+1H (What, When, Where, Which, Who, Why and How)question.

International Marketing Research

International Marketing Research follows the same path as domestic research, but there are a few more problems that may arise. Customers in international markets may have very different customs, cultures, and expectations from the same company. In this case, secondary information must be collected from each separate country and then combined, or compared. This is time consuming and can be confusing. International Marketing Research relies more on primary data rather than secondary information. Gathering the primary data can be hindered by language, literacy and access to technology.

Commonly used marketing research terms

Market research techniques resemble those used in political polling and social science research. Meta-analysis (also called the Schmidt-Hunter technique) refers to a statistical method of combining data from multiple studies or from several types of studies. Conceptualization means the process of converting vague mental images into definable concepts. Operationalization is the process of converting concepts into specific observable behaviors that a researcher can measure. Precision refers to the exactness of any given measure. Reliability refers to the likelihood that a given operationalized construct will yield the same results if re-measured. Validity refers to the extent to which a measure provides data that captures the meaning of the operationalized construct as defined in the study. It asks, “Are we measuring what we intended to measure?”

Applied research sets out to prove a specific hypothesis of value to the clients paying for the research. For example, a cigarette company might commission research that attempts to show that cigarettes are good for one's health. Many researchers have ethical misgivings about doing applied research.

Sugging (or selling under the guise of l.market research) forms a sales technique in which sales people pretend to conduct marketing research, but with the real purpose of obtaining buyer motivation and buyer decision-making information to be used in a subsequent sales call.

Frugging comprises the practice of soliciting funds under the pretense of being a research organization.

Selecting a research supplier

A firm that cannot conduct an entire marketing research project in-house must select an external supplier for one or more phases of the project. The firm should compile a list of prospective suppliers from such sources as trade publications, professional directories, and word of mouth. When deciding on criteria for selecting an outside supplier, a firm should ask itself why it is seeking outside marketing research support. For example, a small firm that needs one project investigated may find it economically efficient to employ an outside source. Or a firm may not have the technical expertise undertake certain phases of a project or political conflict-of-interest issues may determine that a project be conducted by an outside supplier.

When developing criteria for selecting an outside supplier, a firm should keep some basics in mind. What is the reputation of the supplier? Do they complete projects on schedule? Are they known for maintaining ethical standards? Are they flexible? Are their research projects of high quality?

What kind and how much experience does the supplier have? Has the firm had experience with projects similar to this one? Do the supplier's personnel have both technical and nontechnical expertise? In other words, in addition to technical skills, are the personnel assigned to the task sensitive to the client's needs and do they share the client's research ideology? Can they communicate well with the client?

The cheapest bid is not always the best one. Competitive bids should be obtained and compared on the basis of quality as well as price. A good practice is to get a written bid or contract before beginning the project. Decisions about marketing research suppliers, just like other management decisions, should be based on sound information.

Careers in marketing research

Some of the positions available in marketing research include vice president of marketing research, research director, assistant director of research, project manager, field work director, statistician/data processing specialist, senior analyst, analyst, junior analyst and operational supervisor.

The most common entry-level position in marketing research for people with bachelor's degrees (e.g., BBA) is as operational supervisor. These people are responsible for supervising a well-defined set of operations, including field work, data editing, and coding, and may be involved in programming and data analysis. Another entry-level position for BBAs is assistant project manager. An assistant project manager will learn and assist in questionnaire design, review field instructions, and monitor timing and costs of studies. In the marketing research industry, however, there is a growing preference for people with master's degrees. Those with MBA or equivalent degrees are likely to be employed as project managers.

A small number of business schools also offer a more specialized Master of Marketing Research (MMR) degree. An MMR typically prepares students for a wide range of research methodologies and focuses on learning both in the classroom and the field.

The typical entry-level position in a business firm would be junior research analyst (for BBAs) or research analyst (for MBAs or MMRs). The junior analyst and the research analyst learn about the particular industry and receive training from a senior staff member, usually the marketing research manager. The junior analyst position includes a training program to prepare individuals for the responsibilities of a research analyst, including coordinating with the marketing department and sales force to develop goals for product exposure. The research analyst responsibilities include checking all data for accuracy, comparing and contrasting new research with established norms, and analyzing primary and secondary data for the purpose of market forecasting.

As these job titles indicate, people with a variety of backgrounds and skills are needed in marketing research. Technical specialists such as statisticians obviously need strong backgrounds in statistics and data analysis. Other positions, such as research director, call for managing the work of others and require more general skills. To prepare for a career in marketing research, students usually :

• take all the marketing courses.
• take courses in statistics and quantitative methods.
• acquire computer skills.
• take courses in psychology and consumer behavior.
• acquire effective written and verbal communication skills.
• think creatively.

Career ladder in marketing research:

1. Vice-President of Marketing Research: This is the senior position in marketing research. The VP is responsible for the entire marketing research operation of the company and serves on the top management team. Sets the objectives and goals of the marketing, research department.
2. Research Director: Also a senior position, the director has the overall responsibility for the development and execution of all the marketing research projects.
3. Assistant Director of Research: Serves as an administrative assistant to the director and supervises some of the other marketing research staff members.
4. (Senior) Project Manager: Has overall responsibility for design, implementation, and management of research projects.
5. Statistician/Data Processing Specialist: Serves as an expert on theory and application of statistical techniques. Responsibilities include experimental design, data processing, and analysis.
6. Senior Analyst: Participates in the development of projects and directs the operational execution of the assigned projects. Works closely with the analyst, junior analyst, and other personnel in developing the research design and data collection. Prepares the final report. The primary responsibility for meeting time and cost constraints rests with the senior analyst.
7. Analyst: Handles the details involved in executing the project. Designs and pretests the questionnaires and conducts a preliminary analysis of the data.
8. Junior Analyst: Handles routine assignments such as secondary data analysis, editing and coding of questionnaires, and simple statistical analysis.
9. Field Work Director: Responsible for the selection, training, supervision, and evaluation of interviewers and other field workers.

Social marketing

Not to be confused with societal marketing or social media marketing.

Social marketing is the systematic application of marketing, along with other concepts and techniques, to achieve specific behavioral goals for a social good. Social marketing can be applied to promote merit goods, or to make a society avoid demerit goods and thus to promote society's well being as a whole. For example, this may include asking people not to smoke in public areas, asking them to use seat belts, or prompting to make them follow speed limits.

Although 'social marketing' is sometimes seen only as using standard commercial marketing practices to achieve non-commercial goals, this is an over-simplification.

The primary aim of 'social marketing' is 'social good', while in 'commercial marketing' the aim is primarily 'financial'. This does not mean that commercial marketers can not contribute to achievement of social good.

Increasingly, social marketing is being described as having 'two parents' - a 'social parent' = social sciences and social policy, and a 'marketing parent' = commercial and public sector marketing approaches.

Beginning in the 1970s, it has in the last decade matured into a much more integrative and inclusive discipline that draws on the full range of social sciences and social policy approaches as well as marketing.

Social marketing must not be confused with Social media marketing.

Applications of social marketing

Health promotion campaigns in the late 1980s began applying social marketing in practice. Notable early developments took place in Australia. These included the Victoria Cancer Council developing its anti-tobacco campaign "Quit" (1988), and "SunSmart" (1988), its campaign against skin cancer which had the slogan Slip! Slop! Slap!.

WorkSafe Victoria, a state-run Occupational Health and Safety organization in Australia has used social marketing as a driver in its attempts to reduce the social and human impact of workplace safety failings. In 2006, it ran 'Homecomings', a popular campaign that was later adopted in New South Wales, Queensland and Western Australia, and named the 2007 Australian Marketing Institute Marketing Program of the Year

DanceSafe followed the ideas of social marketing in its communication practices.

On a wider front, by 2007, Government in the United Kingdom announced the development of its first social marketing strategy for all aspects of health.

Two other public health applications include the CDC's CDCynergy training and software application, and SMART (Social Marketing and Assessment Response Tool).

Social marketing theory and practice has been progressed in several countries such as the U.S, Canada, Australia, New Zealand and the UK, and in the latter a number of key Government policy papers have adopted a strategic social marketing approach. Publications such as 'Choosing Health' in 2004, 'It's our health!' in 2006; and 'Health Challenge England' in 2006, all represent steps to achieve both a strategic and operational use of social marketing. In India, especially in Kerala, AIDS controlling programmes are largely using social marketing and social workers are largely working for it. Most of the social workers are professionally trained for this particular task.

Types of social marketing

Using the benefits and of doing 'social good' to secure and maintain customer engagement. In 'social marketing' the distinguishing feature is therefore its 'primary' focus on 'social good', and it is not a secondary outcome. Not all public sector and not-for-profit marketing is social marketing.

Public sector bodies can use standard marketing approaches to improve the promotion of their relevant services and organizational aims, this can be very important, but should not be confused with 'social marketing' where the focus in on achieving specific behavioural goals with specific audiences in relation to different topics relevant to social good (eg: health, sustainability, recycling, etc).

As the dividing lines are rarely clear it is important not to confuse social marketing with commercial marketing.

A commercial marketer selling a product may only seek to influence a buyer to make a product purchase.

Social marketers, dealing with goals such as reducing cigarette smoking or encouraging condom use, have more difficult goals: to make potentially difficult and long-term behavioral change in target populations.

It is sometimes felt that social marketing is restricted to a particular spectrum of client -- the non-profit organization, the health services group, the government agency.

These often are the clients of social marketing agencies, but the goal of inducing social change is not restricted to governmental or non-profit charitable organizations; it may be argued that corporate public relations efforts such as funding for the arts are an example of social marketing.

Social marketing should not be confused with the Societal Marketing Concept which was a forerunner of sustainable marketing in integrating issues of social responsibility into commercial marketing strategies. In contrast to that, social marketing uses commercial marketing theories, tools and techniques to social issues.

Social marketing applies a “customer oriented” approach and uses the concepts and tools used by commercial marketers in pursuit of social goals like Anti-Smoking-Campaigns or fund raising for NGOs.

Social marketing confusion

In 2006, Jupitermedia announced its "Social Marketing" service, with which it aims to enable website owners to profit from social media. Despite protests from the social marketing communities over the hijacking of the term, Jupiter decided to stick with the name. However, Jupiter's approach is more correctly (and commonly) referred to as social media optimization.

History of social marketing

Social marketing began as a formal discipline in 1971, with the publication of "Social Marketing: An Approach to Planned Social Change" in the Journal of Marketing by marketing experts Philip Kotler and Gerald Zaltman.

Craig Lefebvre and June Flora introduced social marketing to the public health community in 1988 where it has been most widely used and explored. They noted that there was a need for 'large scale, broad-based, behavior change focused programs' to improve public health (the community wide prevention of cardiovascular diseases in their respective projects), and outlined eight essential components of social marketing that still hold today. They are:

1. A consumer orientation to realize organizational (social) goals
2. An emphasis on the voluntary exchanges of goods and services between providers and consumers
3. Research in audience analysis and segmentation strategies
4. The use of formative research in product and message design and the pretesting of these materials
5. An analysis of distribution (or communication) channels
6. Use of the marketing mix - utilizing and blending product, price, place and promotion characteristics in intervention planning and implementation
7. A process tracking system with both integrative and control functions
8. A management process that involves problem analysis, planning, implementation and feedback functions

Speaking of what they termed "social change campaigns," Kotler and Ned Roberto introduced the subject by writing, “A social change campaign is an organized effort conducted by one group (the change agent) which attempts to persuade others (the target adopters) to accept, modify, or abandon certain ideas, attitudes, practices or behavior." Their 1989 text was updated in 2002 by Philip Kotler, Ned Roberto and Nancy Lee.

In recent years there has has been an important development to distinguish between 'strategic social marketing' and 'operational social marketing'.

Much of the literature and case examples focus on 'operational social marketing', using it to achieve specific behavioural goals in relation to different audiences and topics. However there has been increasing efforts to ensure social marketing goes 'upstream' and is used much more strategically to inform both 'policy formulation' and 'strategy development'.

Here the focus is less on specific audience and topic work but uses strong customer understanding and insight to inform and guide effective policy and strategy development.

Strategic planning

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ) and PEST analysis (Political, Economic, Social, and Technological analysis) or STEER analysis (Socio-cultural, Technological, Economic, Ecological, and Regulatory factors) and EPISTEL (Environment, Political, Informatic, Social, Technological, Economic and Legal)

Strategic planning is the formal consideration of an organization's future course. All strategic planning deals with at least one of three key questions:

1. "What do we do?"
2. "For whom do we do it?"
3. "How do we excel?"

In business strategic planning, the third question is better phrased "How can we beat or avoid competition?". (Bradford and Duncan, page 1).

In many organizations, this is viewed as a process for determining where an organization is going over the next year or more -typically 3 to 5 years, although some extend their vision to 20 years

In order to determine where it is going, the organization needs to know exactly where it stands, then determine where it wants to go and how it will get there. The resulting document is called the "strategic plan".

It is also true that strategic planning may be a tool for effectively plotting the direction of a company; however, strategic planning itself cannot foretell exactly how the market will evolve and what issues will surface in the coming days in order to plan your organizational strategy. Therefore, strategic innovation and tinkering with the 'strategic plan' have to be a cornerstone strategy for an organization to survive the turbulent business climate.

Vision, mission and values

Vision: Defines the desired or intended future state of a specific organization or enterprise in terms of its fundamental objective and/or strategic direction. Vision is a long term objective.

Mission: Defines the fundamental purpose of an organization or an enterprise, basically describing why it exists. Mission is a short term objective.

Values: Beliefs that are shared among the stakeholders of an organization. Values drive an organization's culture and priorities.

Methodologies

There are many approaches to strategic planning but typically a three-step process may be used:

• Situation - evaluate the current situation and how it came about.
• Target - define goals and/or objectives (sometimes called ideal state)
• Path - map a possible route to the goals/objectives

One alternative approach is called Draw-See-Think

• Draw - what is the ideal image or the desired end state?
• See - what is today's situation? What is the gap from ideal and why?
• Think - what specific actions must be taken to close the gap between today's situation and the ideal state?
• Plan - what resources are required to execute the activities?

An alternative to the Draw-See-Think approach is called See-Think-Draw

• See - what is today's situation?
• Think - define goals/objectives
• Draw - map a route to achieving the goals/objectives

In other terms strategic planning can be as follows:

• Vision - Define the vision and set a mission statement with hierarchy of goals and objectives
• SWOT - Analysis conducted according to the desired goals
• Formulate - Formulate actions and processes to be taken to attain these goals
• Implement - Implementation of the agreed upon processes
• Control - Monitor and get feedback from implemented processes to fully control the operation

Situational analysis

When developing strategies, analysis of the organization and its environment as it is at the moment and how it may develop in the future, is important. The analysis has to be executed at an internal level as well as an external level to identify all opportunities and threats of the external environment as well as the strengths and weaknesses of the organizations.

There are several factors to assess in the external situation analysis:

1. Markets (customers)
2. Competition
3. Technology
4. Supplier markets
5. Labor markets
6. The economy
7. The regulatory environment

It is rare to find all seven of these factors having critical importance. It is also uncommon to find that the first two - markets and competition - are not of critical importance. (Bradford "External Situation - What to Consider")

Analysis of the external environment normally focuses on the customer. Management should be visionary in formulating customer strategy, and should do so by thinking about market environment shifts, how these could impact customer sets, and whether those customer sets are the ones the company wishes to serve.

Analysis of the competitive environment is also performed, many times based on the framework suggested by Michael Porter.

Goals, objectives and targets

Strategic planning is a very important business activity. It is also important in the public sector areas such as education. It is practiced widely informally and formally. Strategic planning and decision processes should end with objectives and a roadmap of ways to achieve those objectives.

The following terms have been used in strategic planning: desired end states, plans, policies, goals, objectives, strategies, tactics and actions. Definitions vary, overlap and fail to achieve clarity. The most common of these concepts are specific, time bound statements of intended future results and general and continuing statements of intended future results, which most models refer to as either goals or objectives (sometimes interchangeably).

One model of organizing objectives uses hierarchies. The items listed above may be organized in a hierarchy of means and ends and numbered as follows: Top Rank Objective (TRO), Second Rank Objective, Third Rank Objective, etc. From any rank, the objective in a lower rank answers to the question "How?" and the objective in a higher rank answers to the question "Why?" The exception is the Top Rank Objective (TRO): there is no answer to the "Why?" question. That is how the TRO is defined.

People typically have several goals at the same time. "Goal congruency" refers to how well the goals combine with each other. Does goal A appear compatible with goal B? Do they fit together to form a unified strategy? "Goal hierarchy" consists of the nesting of one or more goals within other goal(s).

One approach recommends having short-term goals, medium-term goals, and long-term goals. In this model, one can expect to attain short-term goals fairly easily: they stand just slightly above one's reach. At the other extreme, long-term goals appear very difficult, almost impossible to attain. Strategic management jargon sometimes refers to "Big Hairy Audacious Goals" (BHAGs) in this context. Using one goal as a stepping-stone to the next involves goal sequencing. A person or group starts by attaining the easy short-term goals, then steps up to the medium-term, then to the long-term goals. Goal sequencing can create a "goal stairway". In an organizational setting, the organization may co-ordinate goals so that they do not conflict with each other. The goals of one part of the organization should mesh compatibly with those of other parts of the organization.

Mission statements and vision statements

Organizations sometimes summarize goals and objectives into a mission statement and/or a vision statement:

While the existence of a shared mission is extremely useful, many strategy specialists question the requirement for a written mission statement. However, there are many models of strategic planning that start with mission statements, so it is useful to examine them here.

• A Mission statement tells you the fundamental purpose of the organization. It concentrates on the present. It defines the customer and the critical processes. It informs you of the desired level of performance.

• A Vision statement outlines what the organization wants to be. It concentrates on the future. It is a source of inspiration. It provides clear decision-making criteria.

A advantage of having a statement is that it creates value for those who get exposed to the statement, and those prospects are managers, employees and sometimes even customers. Statements create a sense of direction and opportunity.

Many people mistake vision statement for mission statement. The Vision describes a future identity while the Mission serves as an ongoing and time-independent guide. The Mission describes why it is important to achieve the Vision. A Mission statement defines the purpose or broader goal for being in existence or in the business and can remain the same for decades if crafted well. A Vision statement is more specific in terms of both the future state and the time frame. Vision describes what will be achieved if the organization is successful.

A mission statement can resemble a vision statement in a few companies, but that can be a grave mistake. It can confuse people. The vision statement can galvanize the people to achieve defined objectives, even if they are stretch objectives, provided it can be elucidated in SMART (Specific, Measurable, Achievable, Relevant and Time-bound) terms. A mission statement provides a path to realize the vision in line with its values. These statements have a direct bearing on the bottom line and success of the organization.

Which comes first? The mission statement or the vision statement? That depends. If you have a new start up business, new program or plan to re engineer your current services, then the vision will guide the mission statement and the rest of the strategic plan. If you have an established business where the mission is established, then many times, the mission guides the vision statement and the rest of the strategic plan. Either way, you need to know your fundamental purpose - the mission, your current situation in terms of internal resources and capabilities (strengths and/or weaknesses) and external conditions (opportunities and/or threats), and where you want to go - the vision for the future. It's important that you keep the end or desired result in sight from the start.^{[citation needed]} .

Features of an effective vision statement include:

• Clarity and lack of ambiguity
• Vivid and clear picture
• Description of a bright future
• Memorable and engaging wording
• Realistic aspirations
• Alignment with organizational values and culture

To become really effective, an organizational vision statement must (the theory states) become assimilated into the organization's culture. Leaders have the responsibility of communicating the vision regularly, creating narratives that illustrate the vision, acting as role-models by embodying the vision, creating short-term objectives compatible with the vision, and encouraging others to craft their own personal vision compatible with the organization's overall vision. In addition, mission statements need to conduct an internal assessment and an external assessment. The internal assessment should focus on how members inside the organization interpret their mission statement. The external assessment — which includes all of the businesses stakeholders — is valuable since it offers a different perspective. These discrepancies between these two assessments can give insight on the organization's mission statement effectiveness.

Marketing effectiveness

Marketing effectiveness is the quality of how marketers go to market with the goal of optimizing their spending to achieve good results for both the short-term and long-term. It is also related to Marketing ROI and Return on Marketing Investment (ROMI).

Introduction

Marketing effectiveness has four dimensions:

• Corporate – Each company operates within certain bounds. These are determined by their size, their budget and their ability to make organizational change. Within these bounds marketers operate along the five factors described below.
• Competitive – Each company in a category operates within a similar framework as described below. In an ideal world, marketers would have perfect information on how they act as well as how their competitors act. In reality, in many categories have reasonably good information through sources, such as, IRI or Nielsen. In many industries, competitive marketing information is hard to come by.
• Customers/Consumers – Understanding and taking advantage of how customers make purchasing decisions can help marketers improve their marketing effectiveness. Groups of consumers act in similar ways leading to the need to segment them. Based on these segments, they make choices based on how they value the attributes of a product and the brand, in return for price paid for the product. Consumers build brand value through information. Information is received through many sources, such as, advertising, word-of-mouth and in the (distribution) channel often characterized with the purchase funnel, McKinsey & Company concept. Lastly, consumers consume and make purchase decisions in certain ways.
• Exogenous Factors – There are many factors outside of our immediate control that can impact the effectiveness of our marketing activities. These can include the weather, interest rates, government regulations and many others. Understanding the impact these factors can have on our consumers can help us to design programs that can take advantage of these factors or mitigate the risk of these factors if they take place in the middle of our marketing campaigns.

There are five factors driving the level of marketing effectiveness that marketers can achieve:

1. Marketing Strategy – Improving marketing effectiveness can be achieved by employing a superior marketing strategy. By positioning the product or brand correctly, the product/brand will be more successful in the market than competitors’ products/brands. Even with the best strategy, marketers must execute their programs properly to achieve extraordinary results.
2. Marketing Creative – Even without a change in strategy, better creative can improve results. Without a change in strategy, AFLAC was able to achieve stunning results with its introduction of the Duck (AFLAC) campaign. With the introduction of this new creative concept, the company growth rate soared from 12% prior to the campaign to 28% following it. (See references below, Bang)
3. Marketing Execution – By improving how marketers go to market, they can achieve significantly greater results without changing their strategy or their creative execution. At the marketing mix level, marketers can improve their execution by making small changes in any or all of the 4-Ps (Product, Price, Place and Promotion) (Marketing) without making changes to the strategic position or the creative execution marketers can improve their effectiveness and deliver increased revenue. At the program level marketers can improve their effectiveness by managing and executing each of their marketing campaigns better. It's commonly known that consistency of a Marketing Creative strategy across various media (e.g. TV, Radio, Print and Online), not just within each individual media message, can amplify and enhance impact of the overall marketing campaign effort. Additional examples would be improving direct mail through a better call-to-action or editing web site content to improve its organic search results, marketers can improve their marketing effectiveness for each type of program. A growing area of interest within (Marketing Strategy) and Execution are the more recent interaction dynamics of traditional marketing (e.g. TV or Events) with online consumer activity (e.g. Social Media). (See references below, Brand Ecosystems) Not only direct product experience, but also any stimulus provided by traditional marketing, can become a catalyst for a consumer brand "groundswell" online as outlined in the book Groundswell.
4. Marketing Infrastructure (also known as Marketing Management) – Improving the business of marketing can lead to significant gains for the company. Management of agencies, budgeting, motivation and coordination of marketing activities can lead to improved competitiveness and improved results. The overall accountability for brand leadership and business results is often reflected in an organization under a title within a (Brand management) department.
5. Exogenous Factors - Generally out of the control of marketers external or exogenous factors also influence how marketers can improve their results. Taking advantage of seasonality, interests or the regulatory environment can help marketers improve their marketing effectiveness.

Criticism and defense of marketing effectiveness

The practice of marketing effectiveness is often criticized because it allegedly only focuses on short term revenue gains. When, in fact, by definition, it concentrates on marketing actions that can be taken to improve both short and long term results. Short term results improvements are measured in terms of revenue gains. Long term improvements are typically measured in terms of gains in brand equity in the minds of a company’s customers.

Business-to-Business Marketing

Business-to-business marketing (often referred to as B2B) is the development and marketing of services and products to business, governmental, and institutional markets at the local, national, or international level, rather than private retail consumers. The vehicles of business-to-business marketing are fundamentally the same as those that are used to reach the consumer market. They range from traditional methodologies such as newspaper and magazine advertisements, direct mail, catalogs, television and radio marketing, outdoor advertising, sales promotions, and other long-established public relations/advertising media to the relatively new business avenue of the Internet. According to business analysts and participants alike, the World Wide Web is revolutionizing this aspect of the corporate world. In fact, the Internet has already surpassed many traditional marketing avenues for both business-to-business and business-to-consumer marketing, transforming the term "B2B" into one that is practically synonymous with electronic commerce. "What's behind this [tremendous growth]?" asked The Practical Accountant. "The intention is to enable buyers and suppliers to find each other much more easily, and still be able to take a slice of every transaction. That's the basic business model behind the thousands of business-to-business firms that have already started operations."

Business-to-business selling is much different than business-to-consumer marketing in several important respects. The average business buyer, for instance, is more knowledgeable about the merits (price value, ability to meet business needs, etc.) of products and/or services under consideration. Business buyers are also governed by organizational buying behavior, whereas consumer purchases are typically made by individuals or small groups (such as married couples or roommates). Major business purchases, whether of bulk shipments of office supplies, a single major piece of manufacturing equipment, or an ongoing business service (from security and maintenance to accounting and graphic art services) require far more research on the part of the buyer than do retail purchases by individual consumers, both because of their complexity and their price tag. "Many people influence the [business purchase] decision—from the purchasing agent and company president to technical professionals and end-users," noted Robert Bly, president of the Center for Technical Communication. "Each of these audiences has different concerns and criteria by which they judge you." Finally, and most importantly, business-to-business marketing is based on the knowledge—shared by both buyer and seller—that the buyer needs to purchase goods and services merely to keep its operations going. The question is whether the buyer chooses to utilize your company's goods and/or services, or those of one of your competitors. "Most consumer advertising offers people products they might enjoy but don't really need," stated Bly. "But in business-to-business marketing …the business buyer wants to buy. Indeed, all business enterprises must routinely buy products and services that help them stay profitable, competitive, and successful."

B2b Marketing on the Internet

Traditional means of reaching business customers such as catalogs, direct mail, and convention booths remain an important element of marketing for many companies, and they will continue to be valuable tools. But the business-to-business market was fundamentally transformed by the growth of the Internet in the late 1990s, and e-commerce is widely expected to drive the expansion of the B2B world in the foreseeable future. In fact, many analysts believe that B2B spending on the Internet will quickly eclipse that of business-to-consumer spending in that medium. Gartner Group reported in 1999, for instance, that business-to-business transactions reached $237 million, a figure four times greater than the amount generated by business-to-consumer electronic commerce transactions. And Forrester Research, an Internet consulting firm, claimed that business-to-business e-commerce reached about $406 billion in 2000, and estimated that the figure would increase to about $2.7 trillion by 2004. A 2000 analysis by Jupiter Communications offered an even more optimistic assessment of the business e-commerce scene, predicting that the B2B market will account for more than $6.43 trillion in online trade by 2005. The same study indicated that 35 percent of that money will be attributed directly to business-to-business exchanges (also known as net marketplaces, net markets, B2B auctions, and online trading areas).

Marketing exchanges are an important facet of this explosion in business-to-business activity on the Internet. B2B marketing exchanges are electronic marketplaces that allow companies to place goods and/or services out for bid on the Internet. Any qualified supplier can then bid on the job order. "Some online exchanges allow businesses to search for particular products or suppliers and agree on the terms of transactions online (with actual transactions being conducted offline)," explained Entrepreneur's Melissa Campanelli. "Other exchanges allow complete transactions to take place online. Either way, B2B exchanges make it easy for buyers and sellers worldwide to come together on the Web to do business."

Whatever their form, Internet marketing exchanges can be beneficial to businesses in several specific ways. David Pyke, writing in Supply Chain Management Review, cited process cost savings and unit cost reductions as key bottom-line benefits: "Process costs include developing supplier relationships, handling proposals and quotations, and processing purchase orders. To the extent a company can automate procurement, it saves time, needs fewer people, and makes fewer errors…. Unit cost savings arise when a company solicits bids from multiple suppliers, rather than repeatedly awarding the contract to the same one or two companies…. If a company can attract bids from 25 suppliers rather than 5 and, if suppliers can see the bidding real time, the market appears to approach the economists' ideal of perfect competition." Many experts, however, urge B2B buyers to consider more than the bid price when evaluating suppliers. "Exchanges can be used …to put suppliers against one another," noted Pyke. "If there is a lot of fat in the system, exchanges should create real and long-term supply chain savings." But he warns against taking good suppliers for granted. "A company could restrict the number of bidders or reserve a portion of the volume for select suppliers, even if their prices are slightly higher," he wrote. "The bidding information can be a basis for discussions about price reduction, but it is important that purchasers use exchanges to support their strategy, not to undermine supplier relationships…. Managers should take care not to employ the B2B products in ways that disrupt existing, successful relationships or that create unnecessary confusion in the supply chain." Besides, dropping transaction costs on B2B sites have made it easier for many buyers to avoid making bid price the sole consideration in awarding business. In 1999, for instance, buyers and suppliers were charged an average fee of 12 percent of total transaction; in 2000, average transaction fee dropped to about 4 percent. Some analysts believe that transaction fees may disappear altogether in the future, if exchange owners can instead be compensated with business information about buyers that they can in turn package and sell as a value-added service to suppliers.

Other observers, meanwhile, point to other advantages that can be gained from involvement in B2B exchanges, from exposure to suppliers/buyers that they might not otherwise meet through traditional channels (because of distant location, limited visibilility of other marketing media, etc.) to general networking opportunities. "A trading exchange can be defined as a dynamic electronic marketplace that allows participants to conduct commerce, collaborate on projects and purchases, review industry news and trends, and use information for smart decision making within a trading community," summarized Jay McIntosh in Chain Store Age Executive.

Using B2b Exchanges

Before selecting an exchange on which to do business (as either a buyer or seller of business goods and/or services), small business owners and managers should first conduct extensive research to make sure that they are dealing with a reputable exchange that can satisfy their business needs. Industry publications are a good source of information in this regard, as is the Internet itself.

Characteristics of good, reliable B2B exchanges include the following:

1. It can and does integrate full product catalogs onto the site. "Suppliers don't want to be a line item in a catalog," one analyst told Manufacturing Systems. "Rather, they want rich systems to differentiate themselves, profile customers, and segment prospects."2) It is a well-known site that targets your industry. Suppliers who establish a presence on a B2B marketplace site that sees heavy traffic can save money on advertising and may be able to forgo the expense of establishing and maintaining their own Internet web site. Conversely, buyers want to frequent exchanges that have a variety of suppliers to choose from so that they can better their chances of securing the goods/services they require at an advantageous price.
2. It is an innovative site that is responsive to rapidly changing business dynamics, both in your industry and in the larger business world. "The ongoing challenge is to have the people and processes in place to cope with any crisis or development, whether a new trend, market fluctuation, security issue, product shortage, or other situation as they arise," wrote McIntosh. "These cannot be dealt with on an ad hoc basis. However, the more layers put into a trading exchange, the less efficient they can be. In other words, the trading exchange must achieve a delicate balance between efficiency and security to become a viable part of the supply chain."
3. Usage is compatible with other current business practices and dovetails with desired buyer/supplier relationships. "A company can concurrently use many different B2B products with many different suppliers" that range from close partners to distant sellers, noted Pyke. "As the B2B industry consolidates, companies will be able to use one product to support multiple styles of relationship."
4. Other services provided on the site have value to your company. Many B2B marketplaces provide valuable information to participating companies, including current marketing information and data, industry news, and customer feedback. In addition, technically sophisticated exchanges can provide valuable assistance in closing the sale. "Credit checks are an essential part of commercial transactions, yet very few B2B sites have any kind of support for either party to the transaction, in terms of qualifying buyers and providing credit histories, guarantees, and so forth," noted Jim Seymour in PC Magazine. Ideally, the exchange will have mechanisms in place that will certify business processes, validate transactions, and efficiently resolve disputes between parties.

Today's business-to-business marketing practices continue to evolve, driven by the current power and future potential of the Internet. "Experts insist the future lies in the B2B-exchange business model," stated Melissa Campanelli in Entrepreneur. "Because the Internet is secure and open to the worldwide community, companies can work more efficiently via faster and less expensive business processes." These basic, fundamental advantages seem destined to cement the Internet's reputation as the primary vehicle for business-to-business marketing for the foreseeable future.

Global marketing

The Oxford University Press defines global marketing as “marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives.” Oxford University Press’ Glossary of Marketing Terms

Here are three reasons for the shift from domestic to global marketing as given by the authors of the textbook, Global Marketing Management—3rd Edition by Masaaki Kotabe and Kristiaan Helsen, 2004.

Worldwide competition

One of the product categories in which global competition has been easy to track is in U.S. automotive sales. Three decades ago, there were only the big three: General Motors, Ford, and Chrysler. Now, Toyota, Honda, and Volkswagen are among the most popular manufacturers. Companies are on a global playing field whether they had planned to be global marketers or not. (Kotabe & Helsen, p.3)

e-Commerce
With the proliferation of the Internet and e-commerce (electronic commerce), if a business is online, it is a global business. With more people becoming Internet users daily, this market is constantly growing. Customers can come from anywhere. According to the book, “Global Marketing Management,” business-to-business (B2B) e-commerce is larger, growing faster, and has fewer geographical distribution obstacles than even business-to-consumer (B2C) e-commerce. (Kotabe & Helsen, p.4) With e-commerce, a brick and mortar storefront is unnecessary.

Evolution to global marketing

Global marketing is not a revolutionary shift, it is an evolutionary process. While the following does not apply to all companies, it does apply to most companies that begin as domestic-only companies.

Domestic marketing

A marketing restricted to the political boundaries of a country, is called "Domestic Marketing". A company marketing only within its national boundaries only has to consider domestic competition. Even if that competition includes companies from foreign markets, it still only has to focus on the competition that exists in its home market. Products and services are developed for customers in the home market without thought of how the product or service could be used in other markets. All marketing decisions are made at headquarters.

The biggest obstacle these marketers face is being blindsided by emerging global marketers. Because domestic marketers do not generally focus on the changes in the global marketplace, they may not be aware of a potential competitor who is a market leader on three continents until they simultaneously open 20 stores in the Northeastern U.S. These marketers can be considered ethnocentric as they are most concerned with how they are perceived in their home country.

Export marketing

Generally, companies began exporting, reluctantly, to the occasional foreign customer who sought them out. At the beginning of this stage, filling these orders was considered a burden, not an opportunity. If there was enough interest, some companies became passive or secondary exporters by hiring an export management company to deal with all the customs paperwork and language barriers. Others became direct exporters, creating exporting departments at headquarters. Product development at this stage is still focused on the needs of domestic customers. Thus, these marketers are also considered ethnocentric

International marketing

If the exporting departments are becoming successful but the costs of doing business from headquarters plus time differences, language barriers, and cultural ignorance are hindering the company’s competitiveness in the foreign market, then offices could be built in the foreign countries. Sometimes companies buy firms in the foreign countries to take advantage of relationships, storefronts, factories, and personnel already in place. These offices still report to headquarters in the home market but most of the marketing mix decisions are made in the individual countries since that staff is the most knowledgeable about the target markets. Local product development is based on the needs of local customers. These marketers are considered polycentric because they acknowledge that each market/country has different needs.

Multinational marketing

At the multi-national stage, the company is marketing its products and services in many countries around the world and wants to benefit from economies of scale. Consolidation of research, development, production, and marketing on a regional level is the next step. An example of a region is Western Europe with the US. But, at the multi-national stage, consolidation, and thus product planning, does not take place across regions; a regiocentric approach.

Global marketing

When a company becomes a global marketer, it views the world as one market and creates products that will only require weeks to fit into any regional marketplace. Marketing decisions are made by consulting with marketers in all the countries that will be affected. The goal is to sell the same thing the same way everywhere.

Elements of the global marketing mix

The “Four P’s” of marketing: product, price, placement, and promotion are all affected as a company moves through the five evolutionary phases to become a global company. Ultimately, at the global marketing level, a company trying to speak with one voice is faced with many challenges when creating a worldwide marketing plan. Unless a company holds the same position against its competition in all markets (market leader, low cost, etc.) it is impossible to launch identical marketing plans worldwide.

Product

A global company is one that can create a single product and only have to tweak elements for different markets. For example, Coca-Cola uses two formulas (one with sugar, one with corn syrup) for all markets. The product packaging in every country incorporates the contour bottle design and the dynamic ribbon in some way, shape, or form. However, the bottle or can also includes the country’s native language and is the same size as other beverage bottles or cans in that country.

Price

Price will always vary from market to market. Price is affected by many variables: cost of product development (produced locally or imported), cost of ingredients, cost of delivery (transportation, tariffs, etc.), and much more. Additionally, the product’s position in relation to the competition influences the ultimate profit margin. Whether this product is considered the high-end, expensive choice, the economical, low-cost choice, or something in-between helps determine the price point.

Placement

How the product is distributed is also a country-by-country decision influenced by how the competition is being offered to the target market. Using Coca-Cola as an example again, not all cultures use vending machines. In the United States, beverages are sold by the pallet via warehouse stores. In India, this is not an option. Placement decisions must also consider the product’s position in the market place. For example, a high-end product would not want to be distributed via a “dollar store” in the United States. Conversely, a product promoted as the low-cost option in France would find limited success in a pricey boutique.

Promotion

After product research, development and creation, promotion (specifically advertising) is generally the largest line item in a global company’s marketing budget. At this stage of a company’s development, integrated marketing is the goal. The global corporation seeks to reduce costs, minimize redundancies in personnel and work, maximize speed of implementation, and to speak with one voice. If the goal of a global company is to send the same message worldwide, then delivering that message in a relevant, engaging, and cost-effective way is the challenge.

Effective global advertising techniques do exist. The key is testing advertising ideas using a marketing research system proven to provide results that can be compared across countries. The ability to identify which elements or moments of an ad are contributing to that success is how economies of scale are maximized. Market research measures such as Flow of Attention, Flow of Emotion and branding moments provide insights into what is working in an ad in any country because the measures are based on visual, not verbal, elements of the ad.

==Global marketing Advantages and Disadvantages==

Advantages

• Economies of scale in production and distribution
• Lower marketing costs
• Power and scope
• Consistency in brand image
• Ability to leverage good ideas quickly and efficiently
• Uniformity of marketing practices
• Helps to establish relationships outside of the "political arena"
• Helps to encourage ancillary industries to be set up to cater for the needs of the global player

The benefits of eMarketing over traditional marketing

Reach

The nature of the internet means businesses now have a truly global reach. While traditional media costs limit this kind of reach to huge multinationals, eMarketing opens up new avenues for smaller businesses, on a much smaller budget, to access potential consumers from all over the world.

Scope

Internet marketing allows the marketer to reach consumers in a wide range of ways and enables them to offer a wide range of products and services. eMarketing includes, among other things, information management, public relations, customer service and sales. With the range of new technologies becoming available all the time, this scope can only grow.

Interactivity

Whereas traditional marketing is largely about getting a brand’s message out there, eMarketing facilitates conversations between companies and consumers. With a twoway communication channel, companies can feed off of the responses of their consumers, making them more dynamic and adaptive.

Immediacy

Internet marketing is able to, in ways never before imagined, provide an immediate impact. Imagine you’re reading your favourite magazine. You see a double-page advert for some new product or service, maybe BMW’s latest luxury sedan or Apple’s latest iPod offering. With this kind of traditional media, it’s not that easy for you, the consumer, to take the step from hearing about a product to actual acquisition. With eMarketing, it’s easy to make that step as simple as possible, meaning that within a few short clicks you could have booked a test drive or ordered the iPod. And all of this can happen regardless of normal office hours. Effectively, Internet marketing makes business hours 24 hours per day, 7 days per week for every week of the year. By closing the gap between providing information and eliciting a consumer reaction, the consumer’s buying cycle is speeded up and advertising spend can go much further in creating immediate leads.

Demographics and targeting

Generally speaking, the demographics of the Internet are a marketer’s dream. Internet users, considered as a group, have greater buying power and could perhaps be considered as a population group skewed towards the middle-classes. Buying power is not all though. The nature of the Internet is such that its users will tend to organise themselves into far more focussed groupings. Savvy marketers who know where to look can quite easily find access to the niche markets they wish to target. Marketing messages are most effective when they are presented directly to the audience most likely to be interested. The Internet creates the perfect environment for niche marketing to targeted groups.

Adaptivity and closed loop marketing

Closed Loop Marketing requires the constant measurement and analysis of the results of marketing initiatives. By continuously tracking the response and effectiveness of a campaign, the marketer can be far more dynamic in adapting to consumers’ wants and needs. With eMarketing, responses can be analysed in real-time and campaigns can be tweaked continuously. Combined with the immediacy of the Internet as a medium, this means that there’s minimal advertising spend wasted on less than effective campaigns. Maximum marketing efficiency from eMarketing creates new opportunities to seize strategic competitive advantages. The combination of all these factors results in an improved ROI and ultimately, more customers, happier customers and an improved bottom line.

Disadvantages

• Differences in consumer needs, wants, and usage patterns for products

• Differences in consumer response to marketing mix elements
• Differences in brand and product development and the competitive environment
• Differences in the legal environment, some of which may conflict with those of the home market

• Differences in the institutions available, some of which may call for the creation of entirely new ones (e.g. infrastructure)

• Differences in administrative procedures
• Differences in product placement.