Type: Process Essays
Sample donated: Jasmine Carter
Last updated: September 27, 2019
The term is largely used amongst marketingpractitioners as an indicator of the extent to which a firm implementsmarketing concept.
Such firms are thus, perceived to possess superiormarket-sense and consumer-linking capabilities (Lara et al., 2004). Marketing concepts are in five components with eachcomponent varying in their function. (i)Production Concept The production concept is largely involved with operationswith a major proposition that customers will choose products and services ofless cost and high level of availability. In effect, the focus is on producingas many units as possible thereby utilizing economies of scale maximisingprofitability (Bhasin, 2017).
(ii)Product Concept This concept establishes that consumers will opt forproducts of comparatively better quality, performance, and features. The concept is mostly identified within theelectronics and mobile handsets markets. Thus, much emphasis is placed onquality, performance, and innovation and as such, the production functionsolely aims at producing to meet customer preference. (iii)Selling Concept The Selling Concept, on the other hand, maintains, that theconsumer will only by enough if persuaded to do so through the selling process.This concept thus supports the aggressivepromotion or selling as the sure way to offer products to the consumer.However, with this approach, the customer will certainly buy the product afterthe persuasion and will refuse to recommend it if dissatisfied. (iv)Marketing Concept This orientation employs the method of gathering ofinformation about needs and desires of the consumer including information onthe evolution of other factors of the environment based on which products aremade available.
The concept relies on a pull strategy targeted at making strong brand customers themselves prefer overevery other competitor (Reinares et al.,2004). b.
Orientations adopted by Addison Lee Addison Lee employs a number of approaches in its bid toenhance its chances of winning the market. Firstly, Addison Lee is employingthe production orientation approach which seeks to ensure that a product iswidely available and at a cheaper cost.This is evidenced by their operationaldecision to increase their number of fleet drivers from a little over 3600 to4450 as well as introducing off-peakfares. By this means, their services are close to the consumer with betterprice variations. Secondly, the company has adopted the sellingorientation which involves the rebranding through catchy advertisement to drawthe customer to the service or product being provided. This is also evidenced by the use of a bold new premium look and feelwith logo and colors simply promising thecustomer excellent customer service delivery. The product orientation approach is also identifiedevidenced in the numerous forms and usage of their services i.
e. taxi cabs, motorbikesetc. as well as the introduction of anapp through which about 50% of the business being carried out and a quarter oftraffic being generated through their website 2. Marketing Environment analysis The marketing environment of a business comprises aninternal and an external environment. The nature of internal environmentdepends on the nature of company or business.
It includes owners, workers,machines, materials etc. the external environment consists of macro and microdivisions which encompasses factors relating production, distribution, andpromotions being offered. As a strategic tool, the analysis helps ascertain all theexternal and internal elements, which can affect the organization’s performance.The analysis largely focuses on determining any threats or opportunities thatmay pertain. These evaluations are subsequently translated into thedecision-making process. Through the analysis, strategies are aligned with thefirm’s environment (Pahwa 2017). (i)Importance of Marketing Environment Analysis to AddisonLee Several benefits may be derived from this form of analysisFor Addison Lee. For the purpose of proper planning, it is imperative that oneunderstands the firm’s environment(Nale,2005).
It also helps reduce disagreement between the business andcustomers and helps in understanding consumer behaviorbetter. The process will also help in venturing into other markets such as London taking advantage of themarket prospects. With every individual market, there is fierce competitionto be the best, thus, a better understanding of the market is extremelybeneficial for Addison Lee to appreciate the prevailing competitions as well asthe competitors’ urge over them (ii)Effect of Macroeconomyon Addison Lee Ever business without a doubt is affected by the macroenvironment. It has to do with many factors which, left unchecked, can destroya business (Fue, 2016). The overall impact of the macro environment on acompany depends on the extent of linkage.As already established, economic factors affect everybusiness. The loss of license by Uber is a macro environment factor and a majoropportunity for Lee. This gives Addison Lee a bigger market within which tooperate.
Social and cultural forces, onthe other hand, may consist of the impact products and services of a businesshas on the environment. The product or service must be harmless to the society.With the intended increase in a number offleets, Addison Lee is supposed to ensure there is less air pollution fromvehicle exhaust.
If not checked, thismight raise concerns about environmentalpollution which affects the society b. Impact of the microenvironmenton Addison Lees The case clearly presents Uber as a major competitor toAddison Lee. With the apparent loss of license in a bigger market such asLondon, Uber is expected to put up a very tight competition in areas where thetwo companies operate as well as discovering new territories and controllingthem ahead of Addison Lee. Secondly, the strategy to increase fleets, to some extent,puts Addison Lee at the mercy of vehicle manufacturing companies – thesupplier. The realization of the increased fleet strategy largely depends onthe supplier’s ability to deliver in order to meet Addison Lees’ demand withinthe expected time frame c. Internal Environmental Factors The internal environment of the business encapsulates allthe forces and factors within the organizationwhich affects the generality of itsoperations. These components may be grouped under the Five Ms.
Namely: Men,Money, Machinery, Materials, Markets(Pahwa,2016) (i)Machinery Considering the expansion of its business to consumeroffering, with 50% of the business undertaken online via the company app andthe company website, this provides Addison Lee with adequate machinery and this serves as a huge advantage since volumesof business can be carried out both within the physical environment and onlineplatform. (ii)Men With over forty years of operation, Addison Lee is withouta doubt a fully grown company with obviously a powerhouse of experiencedindividuals who have gathered experience within the market. This will serve asagain a huge advantage for the company to excel within their area of operation 3(a)Market segmentation and its importance in planning amarketing strategy The whole science of dividing an overall market intocustomer subsets or segments, with similar characteristics and needsconstitutes Market segmentation. The process involves intense market researchthrough the use of characteristics known as segmentation bases. These mayinclude age, gender, income, geographical area etc. This enables the businessto discover the segment and suitableproducts for customers (Eliya,2006). With the announcement of a new objective for the company togrow Addison Lee service business by 3% by targeting a younger demographic of16 – 25-year olds, the segmentation process will help Addison Lee narrow downits target market, identify the consumer needs of the market and satisfy themaccordingly. b.
Segmentation approaches for segmenting Two basic approaches may be used to determine how tosegment the market. These are “Consumer characteristics” approach as well as”consumer response” approach (Sharma, 2015). (i)Consumer Characteristic Approach Consumer characteristic largely measures the geographic,demographic and psychographic features of consumers. These characteristicsdescribe the consumer as regards “Where they live?” “Who are they?” “How theybehave?”(Sharma, 2015).
With this approach, Addison Lee would be able toidentify the exact demography of the target market which is 16-25-year-olds. This would in effect enablethe company knows their behavioral needs as regards the service thecompany renders. The category of clientele which encompasses young individualswho may not be financially independent and as such the company can provide aspecialized payment arrangement which would attract this age group. (ii)Consumer Response Approach The consumer response approach may be different fromconsumer characteristic approach in that, the response approach bothers on whatcauses a consumer to buy a product thenwho the consumer is.
Thus, the consumer response is of much importance andserves as the bases for segmentation. The responses may vary and they includeloyalty, benefit, occasion etc.(Sharma, 2015). In this regard, the use of the consumer response approachwould enable the company to identify whythis age group may want to patronize their services. The company thusascertains a reason for which service should be rendered in a particular mannerwith the sole aim of winning this agegroup and giving them sufficient benefit upon usage of the service provided.
4 (a)Marketing mix – The 7Ps The mix involves getting the right product or and/or service, where needed, and at what cost.Sufficient knowledge of the business plan will help in getting this donewell(Hanlon,2016). The seven Ps are as follows; Product – a product is only worth meeting the customerexpectation. Thus, the product should work to serve the exact purpose for whichit was made. Addison Lee offers a swift online delivery service. Place – The product should be readily available where thetarget consumer finds it easiest to shop.
This may online, marts etc. Addison Lee is present both physically and online through its new app. Price – The Product should simply represent value formoney- not necessarily being the cheapest available. A product is only worthwhat consumers are willing to buy (CIM,2004) the company, therefore, offers off-peak weekend fares. Promotion – the whole art of bringing the product orservice to the attention of consumers is crucial and this may include;advertisements, sales promo etc.
Addison Lee has employed a rebranding strategy signifying their desire togive customers the best of service People – the success of a business is largely dependent onthe caliber and capabilities of thepersonnel running the business. With a forty year operational history, thecompany can boast of an extremely experienced crop of human resource. Physical Evidence – Every form of service may consist ofphysical elements regardless of whether the bulk of the offering is tangible ornot. The service can be measured by its completeness.
In this light, AddisonLee should ensure prompt and regular delivery of service (b)Recommendations On The Market Mix Considering the revised objective of the company, it isimperative certain changes be made in the market mix to aid achieve desirableresults. Product The company must ensure the service is tailor-made to suitthe new target audience (youth). This can be done by providing minivans with less intimidating featuressuitable for individuals of that category.
The use of economical vehicles withmoderate luxury would be appropriate. With the youthful clientele, it is alsoimperative that the service becomes flexible and easy to assess. Safety shouldbe key to much assurance of quality notbeing compromised. Price The target market of youth brings to fore the issue ofpricing. Clearly, most individuals within this age bracket are mostly studentsand may be without a job or a less-paying one.
Pricing may, therefore, be donefactoring attractive and cheaper fares as well as special packages for specialoccasions. Owing to the fact that parents may have to end up paying, thepricing should be so reasonable such that parents wouldn’t shudder at makingtheir children opt for the service. Promotions Promotions are to be made via social media platforms,schools, youth centers as well as specialized programs sponsored by the company.Free services may also be rendered at certain times as a means of promoting thebrand. Exceptional delivery of service would also go along to sell the brand giving the customer a reason to stick tothe company (CIM, 2004) Conclusion In conclusion, Addison Lee has operated for quite anappreciable length of time with sufficient experience to determine the rightmarketing strategy to thrive and beat the market within which it finds itself.With the use of the right market mix strategic approaches, Addison Lee isundoubtedly a force to reckon with in this dynamic service industry