What keeps businesses competitive
Section 1: Introduction
A competitive firm is a business that satisfies consumers needs as well as trying to stay ahead of the competition it might have.
There are two main ways in which firms stay competitive. This is by the quality of their service or product and they way in which the product or service is marketed. These two factors greatly appeal to the consumer and help them to buy the product or service on sale.
Quality in a product is the factors it possesses which enables it to meet the consumer needs. The more needs a product or service will fill for a consumer, the higher quality it is. For example the needs for a mobile phone could well be that it is able to call and receive calls, able to text and able to play games on it. A phone manufacturer may fill all these needs with their mobile phone whilst another phone manufacturer may produce a phone which cannot play games for instance, so the phone which can play games is of a higher quality compared to the other phone. The higher the quality the product has to offer the more competitve it will be and more likely the firm will be in beating competitors.
Marketing is a business activity, which enables the right product to reach the right consumer in the right place at the right price. A business is more competitive, for instance, if it can distribute its goods to the places where it is demand. This would mean it could sell more goods, which is beneficial for the company, but more importantly it would be satisfying the consumers needs. If all the factors of marketing (price, consumer, price and place) are met by a firm then the firm will be far more competitive compared to its rivals.
I’m going to investigate which of these vital factors, marketing or quality is more important in keeping firms more competitive.
Section 2: Primary Research
Primary research, or field research, involves collecting fresh data or information, form a diversity of people and organisations.
For my survey I asked 25 people on their opinions of a product that they regarded of high quality. My survey asked for their views on which factor that was on option was in their opinion an important factor. The aspects that my respondents could choose on were appearance of the product, the reliability of the product, the durability of the product and the after sales service. They gave each aspect a number with the numbers ranging from 4-0 (where 4 was very good and 1 was poor, 0 meant that the aspect did not apply to the product). I then calculated the average score as it were for each aspect of quality so I can rank the aspects in order of importance. Also it will be useful for later when I can easily compare the scores with scores that aspects of marketing received.
See appendix 1.
See appendix 2.
The order of importance for the aspects of quality according to my survey is (in descending order of importance):
> Appearance (3.48 points)
> Reliability (3.44 points)
> Durability (2.96 points)
> After Sales Service (2.28 points)
After this the same respondents were asked whether the same product had important marketing aspects and which aspects were most important. They had to choose on the following aspects: advertising, special offers value for money and availability.
The order of importance for the aspects of marketing according to my survey is (in descending order of importance):
> Availability (3.2 points)
> Value For Money (3.0 points)
> Advertising (2.88 points)
> Special Offers (2.64 points)
Evaluation: From the quality question I can draw up the conclusion that a firm could sell its goods more effectively if it mainly concentrate its money and effort on making its products have a great appearance and are reliable. The appearance and reliability factor ranked considerably higher than the other aspects. This suggests that as appearance is so great, many decisions are on-the-spot ones.
From the questions concerning the marketing of a product, it is evident that a firm should spend more money making the product easily available as cost of the product low as these were the most important factor.
However, this does not mean that a firm should spend all of its money and efforts solely on the aspects that gained the most points. All of the aspects are important for sales and to keep the firm competitive. The above results merely imply that some aspects were more important than others and therefore should have more time and money spent on theses aspects of the product.
From my primary research, it is apparent that aspects concerning the quality of a product seemed to be more important to the consumer than the aspects concerning marketing of a product. This can be seen, as the points for the aspects of quality were generally higher than the aspects of marketing.
Section 3: Secondary research
Secondary research is also very important to a business. Secondary research is evidence already collected by someone else. For my secondary research, I wanted to find out what the firms themselves think is more important.
My secondary research includes data obtained from the Internet on Boots Opticians. After I analysed this evidence I learned that they designed their ‘News’ range based on appearance that was influenced by what 14 year olds were after. This is part of the quality of the product. However they carried out their own field research by means of a focus group and found that comfort was very important in the eyes of the customer. From this focus group they based two new ranges of spectacles which were the Reform Range which prevents stretching of the glasses and the Boots Leva-Ti range which is hypoallergenic.
After reading through this piece of evidence it was quite clear that Boots felt that quality was more important than marketing to stay competitive as they tried to manufacture for the customers needs such as appearance for teenagers, comfort of product and better health for customers for using their product. Marketing was clearly not the priority as they did not focus on advertising or special offers for their products. But boots his renowned for its reasonable pricing and its value for money, which was illustrated on the Internet which involves the marketing factor in keeping Boots competitive. Also the company also situates Boots stores in key locations making it easily accessible for it customers, another example of the marketing factor employed.
The other business I investigated into for my secondary research was BP. Again I received the evidence from the Internet. Again I found, likewise to Boots Opticians, that quality of the product was the main priority of the company. This is clearly illustrated by the severe testing of the product at each of its key stages. This means they try to ensure that the product is of its highest quality. But it is also clearly evident that marketing is very important as the places where they sell their goods has to be in top quality condition for example is the forecourt well lit and the shelves have to be clean whilst the service of employees has to be immaculate. All these contribute to selling the products as the consumers feel more like to be inclined to visit BP, as it is a very pleasant place to go. This helps to contribute to BP staying in good competition with other petrol firms such as ESSO. So although it seemed that quality was dominating in keeping BP competitive, marketing did have its part to play.
Section 4: Conclusions
In the primary research I found that the aspects of quality were far more important to a firm than the aspects of marketing as the general scores, excluding the last score, was higher for quality than marketing. My secondary research seems to support this trend as Boots Opticians clearly employ quality improvement tactics whilst BP uses a mixture of marketing and quality tactics.
My research included a mixture of adults as well as children and a mix of boys and girls. However the majority of the respondents in my survey were teenage boys, which may have flawed my research as the majority is from one segment, teenage boys, instead of a good mix of people. However I did manage include other types of people in my research. It is interesting to note that for the quality of a product, the teenagers did not consider the durability and after sales service much on buying a product whereas adults did. This could be explained as a common conception is that teenagers want products which they thing looks goods or can do interesting things, However adults are more concerned about value for money as they want to make sure their money is spent well on products by it not breaking but last a long time and in the case it does become faulty they can receive help. Also usually when teenagers have a fault in their goods, they rely on their parents to sort it out, this is also why adults would be more concerned about durability and after sales service.
I think that qualitative research would have been useful but it would be hard to say if it would have been better. Qualitative research would be far more specific and help me understand to a greater depth exactly what was on the mind of the participant but it is time consuming and hard to compare answers. Maybe I should have used a mix between qualitative and quantitative research questions to obtain the best results.
I believe however that the secondary research was quite adequate for its purposes, as the two companies used are quite random and unrelated.
It also may have been easier to compare the two factors if I chose two products, each one originating from a different firm, and ask the participants of my survey to award points solely based on those two products. This would be easier to identify the leading factor of that firm which keeps it competitive. However this would only be comparing a few amount of products and not a wide enough range.