Literature Review on Marketing Essay Example

tools, as well as understanding the customers' purchasing process (Farrell & Hairline, 2010). Successful implementation of the marketing strategy requires activities aimed at increasing employee motivation and commitment. It is important to have a control mechanism in place to monitor and assess the effectiveness of the marketing strategy according to the proposed plan (Farrell & Hairline, 2010). Effective strategic control is vital for maintaining a suitable communication system. Managers must make business decisions that align with the interests of the organization and its customers. Furthermore, marketing strategy is an ongoing process that requires monitoring and evaluating implemented plans for future benefits. This allows the company to focus on limited resources and identify opportunities for increased sales and competitive advantage.Strategy is crucial for a company's success in gaining benefits against competitors. To gain a competitive advantage, it is essential to analyze the business environment, including external factors such as customers, competitors, suppliers, distributors, government, and social institutions (Richard Lynch, 2006). This report will briefly discuss various marketing analyses in relation to gaining a competitive advantage.

The Strategic Analysis is part of the environmental analysis that contributes to strategically analyzing the environment. It involves measuring Market Size, Market Growth, and Market Share. Market Size helps with developing a strategy task while Market Growth relates to the organization's objectives and shows how much the market has grown over time. Market Share determines how much portion of the market the firm consumes and benefits from compared to its competitors (Lynch, 2006).

However, before applying this analysis, it is necessary to properly define the market. The company must understand which specific market or markets it is entering. The PESTLE Analysis defines Political,

Economic, Social Technological Environmental and Legal factors that can affect the firm. It serves as a valuable starting point for understanding the overall environment surrounding an organization (Lynch, 2006).

The PESTLE analysis can serve as a future forecast for managers, despite being rooted in past events. However, it is crucial to regularly update this analysis due to the evolving nature of lifestyles, regulations, culture, and technology over time (Lynch, 2006).

Special attention should be paid to the forces driving changes in the environment's dynamics. Measuring these forces requires considering two factors: Changeability, which indicates the likelihood of environmental changes, and Predictability, which refers to how predictable these changes are (Lynch, 2006).

Moreover, managers must identify the Key Factors of success that are necessary for achieving organizational goals. These factors encompass the organization's resources, skills, and attributes crucial for market success (Lynch, 2006).

Although conducting and measuring environmental analysis can be time-consuming and costly for companies as it involves using potentially inaccurate statistical tools based on ever-changing external factors mentioned by Lynch (2006), it still offers significant benefits.

Environmental analysis helps managers make informed business and marketing decisions by understanding the market industry in which their organization operates and identifying key areas to explore for success. This allows the organization to increase potential customer satisfaction. Differentiating itself from competitors, analyzing the competitive strategy of the industry focuses on a firm's ability to achieve its goals (Barney 2002). From a business perspective, a competitive firm aims to survive in the market, attain desired market share, and achieve profitability. The success of a competitive firm is measured by its current position in the defined market. To assess this position,

Michael E. Porter's (1985) five forces model is widely regarded as the best model. This model identifies the competitive strategy that an operating business adopts to outperform rival companies. Porter (1985) categorizes these guidelines into "five competitive forces": entry of new competitors, threat of substitutes, bargaining power of buyers, bargaining power of suppliers, and rivalry among existing competitors. He further explains that while industry structure is generally stable, it can change over time as industries evolve and the strength of these competitive forces varies across different industries.Based on this model, the analysis of buyer bargaining power determines a firm's pricing. Supplier power affects material costs, while competition intensity impacts competitor prices. New entrants pose limits on prices and require significant investment to outperform rivals. Substitutes present risks with technological breakthroughs or low-cost options. Chaffed (2002) supports Porter's model as it offers a practical framework for analyzing emerging threats. Porter's model allows managers to assess industries systematically for further examination. However, the competitive environment is constantly changing despite the fixed nature of this model. Additionally, it does not apply to nonprofit organizations (Lynch, 2006). The model assumes minimal significance given to buyers compared to other micro-environment factors; however, customers are considered important in competitive strategy development. To address these issues, SWOT analysis can be implemented (Lynch, 2006), which identifies a firm's strengths, weaknesses, opportunities, and threats within its operating environment.Despite facing criticism, this model is valuable for managers of major firms in conducting competitive strategic analysis within the industry. It is undeniably the best model for defeating major competitors in the market. According to Engel Hill, Greg Ruche & Rachel Allen (2007), Customer Relationship Analysis emphasizes

customer satisfaction and maintaining customers as a top priority. This analysis helps identify customer attitudes and behavior towards the firm, contributing to satisfying customers. To enhance satisfaction, organizations should focus on areas where they are falling short in meeting customer requirements. Keeping customers longer increases their profitability over time and can be measured through customer lifetime value, including acquisition during their first year with the organization. The text discusses how customer satisfaction increases revenue and improves business performance by increasing sales revenue and reducing production or service costs when satisfied customers purchase more products or services.In addition, customer satisfaction leads to cost savings by reducing service costs through customers' familiarity with the organization's techniques. Highly satisfied customers can also attract new customers through referrals, eliminating the need for customer acquisition expenses. Moreover, long-term satisfied customers are willing to pay a higher price for products or services, thereby increasing the firm's value. The importance of internal analysis is emphasized as it can further enhance organizational value and customer satisfaction by identifying areas that require improvement. Overall, both customer satisfaction and thorough analysis play a crucial role in achieving business success. It is the responsibility of organizations to establish strong relationships with their customers that satisfy them and contribute to long-term profits and competitive advantage.

As stated by Sally Dib & Lyndon Simi (1996), market segmentation aims to identify customers with similar needs and select target segments in order to position products/services effectively within the targeted market. This understanding helps firms comprehend consumer preferences and can be measured through research and feedback from existing customers. The market segmentation process consists of three parts: segmentation, targeting, and positioning. A

comprehensive understanding of how markets can be segmented is essential before making final decisions.The process requires assistance at three points in order to identify factors contributing to positive results and qualities exhibited by emerging segments during analysis. Once segmentation output is confirmed, criteria are needed to evaluate the desirability of different segments. The most commonly used approach involves considering several factors: insurability, profitability, accessibility, accountability, and stability. These factors help measure segment size and prospects, ensure profitability, enable reaching customers in the segments, support marketing programs effectively, and secure financing of resources. This information is intended for managers during the segmentation process as it presents qualities that contradict emerging segments that can be identified. However, market segmentation poses a challenge as marketers often struggle with generating usable solutions due to difficulty in analyzing constantly changing information which leads to imprecise data collection (Dib & Simi, 1996; Kettle, 1994).

Furthermore, this analysis relies primarily on statistical information, which can be challenging to accurately calculate since statistical data also involve assumptions. The Marketing Mix is essential in identifying an organization's product/revive, determining pricing, selecting a suitable production location, and implementing effective promotional methods (Hill, Ruche&Allen, 2007). To achieve success in market segmentation, managers must critically evaluate the quality of information they receive. This involves questioning the source and timeliness of data collection. The method of data collection must be accurate, reliable, and up-to-date (p align="justify"). Marketing ethics, according to Body B. Schlemiels (1998), involves ethical dilemmas in the marketing function (p align="justify"). Firms often face ethical issues in marketing situations. It is important for firms to make ethical marketing decisions to satisfy society. This includes analyzing market

opportunities and addressing ethical concerns. Critics argue that marketing, as presented in the marketing mix, can harm customers, society,
and the environment by promoting materialism and contributing to moral decay (p align="justify"). Marketing ethics is concerned with the moral principles and values that govern ethical marketing decisions and activities (Cobber,
2010).

The support of primary stakeholders (Customers, Employees, Suppliers, Shareholders & other investors) and secondary stakeholders (Media, Special-Interest Groups & Government Institutions) is essential for promoting ethical marketing practices (Schlemiels, 1998). It is crucial for marketing managers to consider ethics in order to satisfy their organization's customers and employees (Schlemiels, 1998). Customers purchase goods and services that keep the business running, while employees contribute to the organization's success through their job performance and attitudes. These two factors are directly or indirectly related to all other factors and are therefore the most important to satisfy in order to achieve desired goals and objectives. Marketing activities have an impact on society and the environment as a whole. Therefore, it is important for organization managers to act responsibly in the best interests of those who will be affected. In conclusion, despite the challenges and uncertainty that companies may face in implementing ethical practices, marketing ethics remains a crucial factor to consider. This chapter provides an overview of the theoretical background for major areas of marketing techniques in research. The objective is to examine key aspects of existing knowledge encompassing significant findings on marketing techniques and contribute to theoretical and methodological advancements in specific topics.The reviews provided here are based on secondary sources and do not include any original experimental work.