Tesco is a multinational retailing company that deals with groceries and general merchandise. It is a British company whose headquarters are in Chestnut, United Kingdom. It is one of the largest retailers in the world both in terms of profits (second largest) and revenues (third largest). Its vast size comes from its numerous branches located in fourteen different countries across Europe, Asia, and North America. Its founder is Jack Cohen, a British businessperson who founded it in 1919. It originally focused on grocery retailing in the UK. However, with growth and market expansion, it increased its business and diversified into books retailing, electronics, software, petrol, clothing, furniture, financial services, DVD rentals, telecoms and internal services, and music downloads. This enabled Tesco to appeal to people from all social groups, both rich and poor. Nonetheless, it is still a market leader of groceries in Malaysia, United Kingdom, Republic of Ireland and Thailand. This made Tesco realize wealth maximization, and listed its shares on the London stock exchange. In January of 2012, it had 24,4 billion euros turnover of market capitalization, making it among the largest (fifteenth) on the stock exchange with primary listing (Fernie 2009, p.160).
Tesco wants to enter the African market. Africa is now a major mover in the global economy, with her increasing population and infrastructural development. Many multinationals are scrambling for a share of the African market due to the potentially massive markets, increased demand for finished products, and the conducive business environment prevailing in most African states. South Africa has the leading economy in Africa. Egypt follows closely, and then Nigeria due to its large crude oil deposits. However, many developing countries located in Africa also provide potential markets for international giants like Tesco, necessitated by globalization syndrome and international business. The exports-imports trade further improves foreign investors’ chances of entering and taking over the African market. Standardization of African industries to match up to international standards makes Africa an equal player in world economics. Tesco intends to set up its subsidiaries and shops in five leading African economies, such as South Africa, Nigeria, Egypt, Kenya, and Cameroon, then later expand to the entire continent if it succeeds in its initial inception strategy. It plans to introduce shops, selling groceries and other household goods, in addition, other miscellaneous services, into the Africa economy. However, it should expect stiff competition from the global Woolworths chain stores from South Africa, Nakumatt Holdings from Kenya, and Ecobank, The Pan African Bank from Nigeria, which has offices in over fourteen African countries; in its financial services sector i.e. Tesco Banks. Tesco, however, plans to use its international brand image as a tool to take over this market, and stay as a leading player in the African economy through its subsidiaries.
Tesco has to design an appropriate marketing communications strategy that will enable it to penetrate the African market effectively and efficiently, thereby reducing competition and cost of the initial investment into the continent. The marketing communication strategy will help Tesco develop its brand awareness in Africa. This will enable its potential customers to translate product information to perceptions over the product’s position in the market, and its attributes. This will also profit Tesco by enabling it retains her African customer base, especially for those who visited Tesco shops while on trips in other countries where Tesco has stores and became her loyal consumers. In addition, it will help cement all possible relationships with its suppliers and customers on the continent. Generally, marketing communication strategy will define the business plan for Tesco African market for the development of its brand awareness and dissemination of product information (Berry, Pulford, Smith & Smith 1999, p.3). For a good marketing communication strategy to be effective and efficient, it should have several components in order to appeal more to the target market. Advertising allows Tesco to reach out to a wide audience in the African market, just as it uses mass marketing through broadcast media to capture its European and Asian markets through commercials. It can take advantage of continental based broadcast stations such as DSTV, ZUKU, and GO-TV to reach out to a wide range of African markets. Personal selling enables Tesco to reach out to its new customers on the African ground, directly communicate with them about the benefits of its products, and value addition in the African market as a multinational retail store. Direct marketing such as direct postal mail and catalogs permit Tesco to reach out to its consumers without involving the third party medium. Public relations and sales promotions further promote Tesco’s penetration into the African market and make it a world leader in retail marketing, just as is the case in Europe, Asia, and North America continents.
Marketing communication strategies have five general strategies that Tesco can capitalize on. This is by inspiring customer trust through the presentation of personal success stories that led to the creation of the business, eventually creating goodwill among its customers by developing consumer-focused topics on informational sheets. Consequently, this will enable the company to transmit accurately the benefits of their products, and that customers receive this message positively. Therefore, marketing communications becomes a strategic function in the penetration of the African market. This enables Tesco to define its relationship with her African customers, causing long-term relationships and effects that ensure consumer loyalty and business growth. This allows the customers to develop brand loyalty towards Tesco as a company, and to its products and services. Developing an effective marketing communication strategy, also known as ‘marcom’, in short, activates the selling process of the products and services offered by Tesco (Fill 2002, p.306). Tesco may rely on its international advertising campaigns through broadcast media, as well as employ other media mixes such as events and public relations. Some of the elements employed in marketing communication may include messaging, public relations, e-mails, advertising, seminars, and websites. Conferences and shows, direct marketing, downloadable materials, packaging, merchandising promotions and event sponsorships, by deciding on the fundamental selling message or a consistent theme that they can use for all their marketing materials, Tesco begin the creation of an effective messaging strategy that helps to convince buyers more about its products and services. For example, its motto of: ‘Pile It High & Sell It’ Cheap’ or its famous advertisement line: ‘Every Little Helps’ through its commercials. A sound marcom strategy benefits the company by creating a better and more consistent brand experience among its consumers.
A well-planned marcom will enable Tesco to execute it well, properly and effectively. This begins by developing a plan that is consistent with the company’s sales goals and budgetary realities, then developing a tactical plan that will enable the company to achieve its objectives. Both short-term and long-term concerns of the company blend into the designed tactics to acquire success. Details of this are in the five steps followed when designing a marcom. The first step is to assess the needs of the business. This means determining Tesco’s primary objectives, its SWOT analysis in the African context, its market influences, competitive pressures and barriers to success. The next step is evaluating available resources. This includes the impact on Tesco’s budget, its timeframes, and staffing programs. The third step is choosing the appropriate tactics to use in the marcom. The strategy should integrate tactical elements appropriately, consistent to the company’s desired objectives e.g. trade shows, public relations, internet, direct mail, advertising, etc.; fourthly comes the implementation of the chosen marketing communications. This should be within the timelines agreed upon and considering the costs and budgetary provisions. The fifth and final step is to review and evaluate the results of the marcom strategy. Here, Tesco can make any necessary adjustments in its plans, adapt to the changes in the market conditions and fine-tune future tactics. Procedures such as linking the strategy to industry events or company developments, and employing implementation phases in order to accommodate market cycles also help in achieving the objectives of the company. Through these procedures, Tesco stands a good chance at entering, conquering and maintaining its market leadership in retail marketing in the African continent. At this point, Tesco can employ an Integrated Marketing Communication (IMC) approach to further penetrate and stabilize its position in Africa (Percy 2012, p.3).
Integrated Marketing Communication (IMC) is a new approach in brand communications, whereby there is co-operation of different modes through working together, eventually creating for the consumer a seamless experience. These IMC methods come in a similar style and tone that reinforces the core message of the brand. It makes all components and aspects in marketing communication work hand-in-hand as a unified force, instead of working in isolation. This maximizes the cost of effectiveness of each of these aspects, which include sales promotion, advertising, public relations, personal selling direct marketing, social media and online communications (Hair, Lamb & McDaniel 2011, p.51). IMC has several components, such as the foundation, the brand focus, the corporate culture, communication tools, integration tools, and promotional tools. The foundation of IMC lies in the understanding of the market and product strategically. This involves technological changes, attitudes of buyers, and their behaviors, and anticipated moves from its competitors. The corporate culture involves imprinting the company’s vision, personality, capabilities, and culture in its brand. The brand focus details the company’s corporate identity, its logo, style, tagline, and the brand’s core message. Consumer experience includes the product’s design and packaging, and its experience and service on the consumer, especially in Tesco’s case since it is a retail store. Communication tools are the modes used in advertising, online communications through social media, and direct marketing. Promotional tools are trade promotions, personal selling, consumer promotions, customer relations management, database marketing, sponsorship programs, and public relations. Integration tools include software that enables the company to track the behavior of its customers and determine the effectiveness of campaigns. These software applications are web analytics, Customer Relationship Management (CRM) software, inbound marketing software, and marketing automation. IMC expands the 4Ps in the marketing mix to 8Ps and conflates them with As and Cs. During promotions’ opportunity analysis, Tesco can include enticements in their tactical efforts of attracting new markets. These may include volume discounts, rebates, coupons, and gift certificates. While undertaking these steps, the marketing manager must review and analyze consistently all the tools and actions utilized by Tesco’s major competitors in Africa.
A good marcom strategy comes up with a good promotional mix. A promotional mix is all the sales effort a business enterprise employs in order to inform, persuade, and influence the purchasing decisions of prospective consumers that exist to increase the company’s sales volumes and profits. This promotional mix has seven main components, which are advertising, personal selling, publicity, sales promotion, corporate image, exhibitions and direct marketing (Kurtz 2010, p.500). This promotion mix also considers the Product Life Cycle of the goods and services, which Tesco intends to introduce into the African market. There are five stages in the life cycle of a product, and each promotional mix should consider the stage at which the product or service is. In the pre-introduction stage, it is advisable to use light advertising and pre-introduction publicity. In the introduction stage, it is important to use heavy advertising, create awareness through public relations, and use sales promotion for trial purposes. The growth stage includes the use of public relations, advertising, brand marketing and branding, and personal selling for distribution. At the maturity stage, decrease advertising, personal selling, and sales promotion, but the usage of persuasion and reminder are the important tools. Finally, at the decline stage, it is necessary to decrease public relations and advertising, limit sale promotions, and use personal selling for distribution. Advertising is any paid form, through the media, of non-personal communication about a product or service, or an idea sponsored by an individual, company, organization, government, institution, etc. Personal selling is the face-to-face process of persuading a buyer to purchase a product, to use a service, to accept a certain viewpoint, or to convince the person to take a certain course of action conducive to the company’s sales (Mullin 2010, p.30). Tesco can use publicity, a non-personal demand stimulation of its products and services generated by significant commercial news published in the media about it. Sale promotion activities offer incentives over a limited period to customers in order to obtain the desired response from them. Tesco can use sweepstakes and self-liquidation premiums. Exhibitions provide buyers a chance to test the products, and for Tesco to test its services on consumers. Corporate image is the public’s sight of the organization in general or its reputation. Direct marketing is reaching out to consumers targeted by the company through letters, fliers, and catalogs. Furthermore, this promotion mix can be pull-oriented, push oriented, or better still profile oriented.
Tesco intends to introduce a Tesco Master Card into the African market. Through the Tesco card, customers of the retail giant can enjoy a wide range of services such as purchasing of goods and services from all Tesco outlets, saving bonus points from every transaction held at Tesco shops, financial transactions from Tesco bank, air miles, and trips, money transfer services, etc. This will be a universal card enabling all customers shopping at Tesco transact freely without carrying cash, thus creating convenience and safety in shopping. In order to evaluate the success of this card, Tesco employs analysis and evaluation of statistical data and quantitative indicators. These two also show the success of communications plans formulated by the marketing manager. Statistical data includes the figures collected on the ground about the performance of the communication strategy. These figures must be valid and reliable so that they can produce accurate data. Low-quality data provides useless and misleading results after the final analysis. Thus, the right data is necessary to generate usable findings (Masterman & Wood 2012, p.12). Quantitative indicators, on the other hand, also provide reliable data on the effectiveness of marcom strategy. Monitoring and evaluation relying on clearly defined indicators form an integral part in sound policies development. Moreover, this enables policymakers in the assessment of the extent to which the objectives in the policy become a reality and provide a basis for SWOT analysis. Thus, the necessary adjustments made. Quantitative indicators are highly effective when it comes to drawing attention to business regulation burdens, reform priorities identification, and communication strategy progress and success. Scorecards facilitate these consultations (Kamlongera & Metalopulos 2004, p.93).
Promotional campaigns such as advertising, sale promotion, and public relations, create a competitive advantage to the company. Since, they create awareness of the company’s existence, its products and services, and its terms of operations. This helps consumers in deciding the additional value the company injects through its products and services into their lives, and their economy at large. This helps in drawing prospective consumers to the company, thus creating a competitive advantage over other existing players in the market (Frow, McDonald & Payne 2011, p.300). Promotional campaigns capitalize on the advantages of their marketing mix. A good marketing mix that is efficient and effective creates a sharp competitive advantage for the company. A marketing mix is a business tool used for merchandising by professionals in marketing. It is crucial in determining a product, or the brand’s offering. It is synonymous with the 4Ps: price, place, promotion, and product in services marketing. However, in recent times, these 4ps expanded to 7Ps to address different natures of services. This also led to the introduction of the concept of 4Cs as a replacement of the 4Ps being more consumer-driven. The 4Cs have two theories. The first theory is Lauterborn’s 4Cs, which includes consumer, costs, convenience, and communication. The second theory of 4Cs is Shimizu’s 4Cs, which includes commodity, channel, communication, and cost.
The 4Ps form the producer-oriented model (Price, Product, Promotion, and Place). A product is an item that brings satisfaction to the consumers’ needs and wants. This may be an intangible service e.g. in the hotel, tourism, and financial industries, or a tangible good like vehicles, disposable razors, foodstuffs, furniture, etc. Price is the amount of money that the consumer pays in exchange for the product. Its importance draws from its determination of the company’s profits. Marketers should consider the effect of the price elasticity of the products when setting their prices, and the prices effect on demand and sales of the products. The set price must be the customer perceived value so they do not feel that it is too exorbitant or very cheap. Various pricing strategies include market penetration pricing, market skimming pricing, and neutral pricing. Promotion involves all communication methods a marketer employs to deploy information about the product to different parties’ i.e. sales promotion, personal selling, public relations, and advertising. Place involves the distribution strategies employed by the company i.e. selective distribution, franchising, intensive distribution, and exclusive distribution. The 7Ps, an additional model of marketing, involves the already mentioned 4Ps, with the addition of people, process and physical evidence. Process implies the systems and procedures within the organization affecting the marketing process. People refer to the company’s employees that meet the customers. Physical evidence refers to the physical elements within the store i.e. signboards, employees’ uniforms, storefronts among others.
The 4Cs form the consumer-oriented model, and best fits movement from mass to niche marketing. Consumer replaces the product, thus shifting focus to satisfaction of consumer needs. Cost replaces price, thus reflecting the ownership cost in total. Communication replaces promotion, broadening the focus to include even viral advertising. Convenience replaces place, taking into account the ease in finding and purchasing a product. These 4Cs form a 7Cs compass model. C1 is a corporation, which is the core of the 4Cs involving Competitors-Organization-Stakeholders (C-O-S), considering accountability and compliance. C2 is a commodity, which involves creating needs of the goods in people and ensuring the said goods please them. C3 is cost, which involves all costs of production, selling, social and purchasing. C4 is a channel, which involves the marketing channels that ensure the efficient flow of goods. C5 is marketing communication. C6 is the consumer, and this may involve his/her needs, wants, security and education. Finally, C7 is circumstances, which may be national or international, weather, economics, social and cultural. This seven compass model forms the framework in co-marketing or symbiotic marketing (Bowman & Gatigman 2010, p.21); through marketing mix elements, the organization meets its goals of promotion, which are informing, persuading and reminding.
Tesco can employ the use of information technology (IT) and the internet to enhance further its competitive advantage. With the introduction of globalization, internet services and IT became the major driving forces of international economies and every company nursing the desire to succeed globally must employ the use of the latest technological applications. Otherwise, it will face stiff competition and eventually face out of the market. Tesco can employ web-based marketing. This can be done through its websites, where the customers can log in and transact online with the company. They can also search, window-shop or purchase, and pay through wireless money transfers i.e. Tesco Master Card. Tesco can also buy advertising space on other commonly visited internet sites for advertising. This is online marketing. Therefore, this can be done through email accounts such as Gmail, Yahoo, and Hotmail, or social media sites such as Facebook, Twitter, MySpace, and Skype. Apart from internet marketing, Tesco can use IT to store and protect its confidential data, automate its services and processes to enhance efficiency and effectiveness in service delivery, and improve its communication e.g. blogging, e-conferencing, e-commerce, and video conferencing. Furthermore, this makes communication much cheaper, more efficient and very quick. IT further enhances customer service delivery at the counters by introducing self-service, thus reducing queues at Tesco stalls and outlets. IT enhances human resource performance and multiplies the productivity of employees through computer-aided applications. It reduces the operational costs of the company, as production shifts from labor-intensive to computerize. This increases the productivity of the company. IT further enhances the competitive advantage of the company by improving its agility and speed (Khosrow-Pour 2006, p.832). This sharpness in the competitive edge of the company enables Tesco to take over easily the African market in retail stores.
Marketing Assignment Two
Emirates Airlines forms part of the Emirates Group, which has a global reputation for tourism, aviation, and travel. The group has over 50,000 workers, working under the Investment Corporation of Dubai. The government of Dubai solely owns the group. Emirates draws its name from Emirate, which is a political territory ruled by a dynastic Muslim Monarch styled Emir. Emirates Airlines has its hub in Terminal 3 of the Dubai International Airport, United Arab Emirates. Statistics show that it is the largest airline in the Middle East, operating 2500 flights weekly and flying to 122 destinations across 74 countries in six continents. It also operates four of the ten longest non-stop flights in the world from Dubai to Dallas, Los Angeles, Houston and San Francisco. The airline has a Sky Cargo division that handles cargo activities and generates 20% of revenues for the airline. Emirates Airlines began in March 1985 by the Dubai Royal family after the Gulf Air reduced its services to Dubai in the mid-1980s. The first two aircraft of the airline came from the Dubai Royal Air Wing, and from then it operated independently from government subsidiaries apart from the $10 million start-up capital. It grew phenomenally ever since and increased its revenues by $100 million annually in the 1990s. This was from its large fleet of 137 aircraft, comprising some of the largest aircraft families in the world, which are Boeing 777, Airbus A330/A340 and Airbus A380. In fact, it is the largest operator of the Boeing 777s aircraft in the world (Collins 2003, p.51). The Airline plans to increase its fleet by 140 aircrafts awaiting delivery, comprising the latest designs in aircraft technology such as the Dreamliner.
B2B are initials for Business-to-Business. B2B usually occurs when a business works on selling to other businesses, rather than selling to an end consumer/user, thus engaging B2B marketing. This can be between a wholesaler and a manufacturer or between a retailer and a wholesaler. A contrast of B2B is B2C, which stands for Business-to-Consumer, and B2G, which stands for Business-to-Governments. B2B branding becomes the new marketing term. B2B transacts more volume than B2C because it is primarily a supply chain. Supply chains have many raw materials or sub-components, unlike B2C, which specifically engages in the sale of the finished product to the final consumer. For example, an automobile manufacturer engages in several B2B transactions before completing the unit, such as purchasing, windscreens glass, buying tires, and buying rubber hoses. A single unit of a finished vehicle then transacts in the final stage when selling to the consumer, thus only a single B2C transaction. B2B further enhances collaboration and communication among business, and amongst employees through social media in B2B communication (Shepherd 2012, p.1).
Many B2C products and services also form B2B products. However, consumers can only purchase very few of B2B services or products e.g. atypical B2C product in toilet paper can be a B2B product if purchased in large quantities by hotels for their guestrooms and restrooms. Very few people, for example, buy an excavator for private use. B2B products form part of final products through their use in production and manufacturing these goods and services. This benefit sells either to a company or to an individual. Moreover, B2B products possess high risks compared to B2C products. B2B products are particular in branding. A brand can be a logo, a sign, or an emotional feeling, which differentiates a firm’s product or service from those of another competing firm. As a matter of fact, a few differences exist between B2B and B2C, starting from the buyers of their services and products, the purchasing process, and the risks. B2B products carry much more risks compared to B2C products, due to their high initial cost of investment required when starting up the transactions or purchasing them. However, purchasing stronger brands implies that they have lower risks while using them. The buying behavior in a B2B environment has the following unique characteristics. Committees of people sit to discuss and consult on a given purchasing decision for the organization before they agree unanimously on one decision. Each member of this committee has a different attitude towards a given brand of product. Thus, the buying decision-making process takes much longer than anticipated. B2B products enjoy a higher brand loyalty since the companies seek to create long-term relationships as they try out different brands, and assess the impact that these brands create on the entire business. B2B goods have high costs, and the sellers must produce samples, prototypes, and mock-ups of the product to the buyer, apart from seeing them on several occasions to discuss the buying decision, in order to convince the buyer to purchase the product. For this reason, there should be a clear differentiation among B2B brands. Clearly defined brands target appropriate market segments. This reduces the risks perceived by the buyer (Boone & Kurtz 2011, p.175).
However, with recent developments in technology, B2B marketing is changing. B2B marketing now uses social media as a critical technique in marketing. Customer demands are what stimulate the use of, and growth of social media as in the B2B front. This is due to the economic nature of social media. Public relations through social media plays a key role in the promotion and creating content through awareness building, thought leadership, brochures and websites, and other computer-aided techniques. The general perception is that social media marketing best suits B2C products since most consumers are fond of online shopping and window-shopping. Nonetheless, B2B social media generates awareness through strengthening the brand. They capitalize on pull marketing, a case whereby the majority of B2B buyers opt to search online for the solutions they seek instead of waiting for sellers to make contact with an intention to make a sale. Emirates Airlines uses B2B social media marketing to create brand awareness among its corporate clients, i.e. those who fly first class and business class. Most of these clients form the cream of the society and are either representatives of big corporations or big business owners in their own sense. Thus, they get the VIP treatment. They may include top government official, business executives, movie stars, artists, celebrities, etc. Most of these people are familiar with social media, considering the stature and class of their position in society. Thus, Emirates Airlines easily reaches them through social media and does its advertising. The introduction of websites and online booking of flights even eases the hustle for these travelers as they are able to check out their convenient flights, book and pay for them at the convenience of their living rooms or offices. In order to use this service, they do not have to visit in person a travel agent to book their flights.
Invite your friends and get bonus from each order they
B2B uses business marketing to fulfill its agenda of selling products and services to governments, commercial businesses, and institutions. They either sell these products to them for resale purposes, or for use as components in other products and services offered i.e. raw materials, or for support operations. In other words, business marketing is also known as industrial marketing. Business marketing employs various strategies in order to penetrate the industrial markets and excel in its sales. These are B2B branding. Close alignment of divisional brands, corporate brands, product/service brands applies in this case. Other strategies lie in the product or service, the people or target market, the pricing of the products, promotion styles adapted, place i.e. the sales and distribution, the marketing communication methodologies, and the positioning statement i.e. what the company does and how it does it differently and more efficiently than its competitors. Then the company develops messages that strongly convey to consumers what it does and the benefits consumers get from them. Later, the company builds a campaign plan, a comprehensive plan targeting resources that deliver the best yields i.e. return on investment. The briefing then occurs to the target market and audience about the campaign description, product positioning, corporate guidelines, and graphical considerations. Business marketing is big. In fact, it serves the largest market and transacts the biggest volumes, e.g. through trade shows and events, internet and electronic media, promotion and market support, magazine advertising, publicity, and public relations, direct mail, telemarketing, as well as market research. The driving force behind B2B marketing is the technological revolution, the entrepreneurial revolution, and the marketing revolution. The internet now forms an integral component of Customer Relationship Management (CRM) strategy for business marketers. Thus, B2B marketing is special, because they have complex decision-making units, they have more complex products than consumer products, the marketers address a small number of large volume buyers, and this creates personal relationships between the businesses, which is very important for long-term business transactions.
Consumer marketing, on the other hand, focuses on selling finished goods and services to final consumers or end users. This usually involves already processed products, having undergone a series of stages during the manufacturing and production processes. They are simple products, and thus, the customers make a buying decision easily without many debates or considerations. They are also cheaper in value as compared to those in industrial marketing, and their main purpose usually is for household use, i.e. for consumption, relaxation, and comfort. It mainly focuses on strengthening the relevance of the consumers and strives to satisfy at best every need and want of the consumers. To best satisfy their consumers, the company must do research on consumer trends and insights, those which motivate and stimulate them to make a certain purchasing decision. This further develops the consumer’s lifetime loyalty. It is not just enough to promote a product, but the product must be able to carry the brand’s value that the consumer identifies with easily and thus accepts to use it. In this case, the company needs to come up with an effective consumer marketing strategy, focusing on mainly on the best moves to attain better market performance and generate impressive sales figures (Baker 2004, p.55).
The first step is to consider who the customers of the business are. Consumer-oriented marketing enables businesses to check up the pricing of their service or products and to determine whether it is fitting to the general consumers. The next step is to determine the segments in a given target market. An effective marketing strategy is one that effectively tackles the needs in each segment of the target market. After determining the segments in the market, then it is critical to evaluate and find out the most profitable segments, which the business can capitalize on and maximize its sales volumes. Then later, it is vital to determine the distinctive qualities of the customers as in niche marketing. After offering the products or services to the customers, it is important to measure their satisfaction levels. Consumer marketing can also involve direct marketing, which is directly promoting a product or service straight from the seller to the consumer. This comes in four methods, which include door-to-door marketing, face-to-face marketing, telephoning a special list of business clients and direct mail advertising using fliers, catalogs, and pamphlets. It is very beneficial to the company as it enables it to keep track of customer responses, thus allowing effectiveness in marketing. However, its drawback is that it may be offensive to some consumers resulting to boycott of the company’s products and services, or in a backlash of the same. To avoid this, it is advisable to conduct proper research, set the best timing for the marketing program thus creating convenience to the buyer and effectiveness in the campaign, and designing simple messaging that would greatly help in getting the intended message across to the buyer.
Business marketing and consumer marketing are very different from each other, despite the rather obvious similarities. Consumer marketing targets a large demographic group through retailers and mass media. Business marketing has a more personal negotiation process between the sellers and the buyer, thus requiring little commitment of resources on promotional budgets i.e. advertising (Blythe & Zimmerman 2005, p.13). The main differences between consumer marketing and business marketing are as follows. In business marketing, the organization or business is the one that wants to buy the products, either to enhance their profitability, or their competitiveness, or their business success. On the other hand, according to consumer marketing, the consumer is the one who wants to buy the products to satisfy his personal needs and wants. In business marketing, the buyer is more sophisticated and has a greater understanding of the product. Moreover, he knows how to use it, and knows the benefits that accrue from the use of that product e.g. consistency and efficiency in the production of goods and services using computerized programs. In consumer marketing, the consumer does not have adequate knowledge relating to the product he intends to purchase, thus it is easier for the seller at the point of sale to convince him to purchase it. Business marketing buyers’ research extensively in both primary and secondary data, and read a lot about the product they intend to purchase, thereby making a well-informed buying decision when they eventually decide to purchase the product. This is unlike consumer marketing buyers who do little research on the products they intend to purchase. The buying process in business marketing takes long, and is very tasking and involving unlike that of consumer marketing where the consumer has the final say in the buying decision. Some even engage in impulse buying, i.e. buying without properly budgeting for the purchases beforehand. Marketers, while selling in business marketing, face a committee of people who make the buying decision, thus they encounter multiple buying influences. Whilst in consumer marketing, only one person has to make the buying decision, hence very few influences on the purchasing decision. There is a lot of advancement in business products as compared to consumer products. Generally, business buyers look for personal benefits for themselves and their businesses, unlike consumer buyers who look for the personal satisfaction of their needs and wants.
There are key differences between B2B marketing and consumer marketing in the commercial sector. The commercial sector is the main target in mass marketing i.e. the public targeted by most marketers in the business world. Commercial sector business outlets include shops, malls, supermarkets, stalls, hard wares, etc. In this case, marketers’ best use mass marketing mix through media commercials and advertisements. These messages reach a large pool of people at the same time much faster. Social media sites also come in handy in these promotions of consumer marketing at the commercial sector. Since the target market is a massive consumer of social media. They have fun using it and participate in online blogs and conversations too. Thus, marketers capitalize on this through e-marketing to reach out to a wide range of potential consumers in the commercial sector consumer marketing. In the commercial sector, B2B marketing targets SMEs and other growing business interests thus best use word-of-mouth and references as the best promotional tools (Barcelona, Hurd & Malcolm 2008, p.165).
The key differences between B2B marketing and consumer marketing in the not-for-profit sector are the free will encouraged by these sectors. Unlike B2B, which emphasizes on wealth and profit maximization, not-for-profit sectors mainly center on charity. Thus, it targets to achieve its goals through purchasing its products in mass in order to enjoy trade discounts and economies of scale. Before purchasing a product, these organizations usually shop in the market for the best quality but lower in prices products. Hence, it uses pricing as its best element in the promotional mix. Personal selling and direct marketing work best for consumer marketing in the not-for-profit sectors. However, in B2B not-for-profit sector, marketers use public relations to enhance their sales targets, or event sponsorships, or corporate social responsibility, or corporate governance of the company. The latter two determine the corporate image of the company, which is the major driver and determinant of their marketing prospects (Lancase & Reynolds 212, p.349).
The differences between B2B marketing and consumer marketing in the public sector is evident through the set procurement procedures and bureaucratic processes required of public institutions. In B2B marketing, the process is long and tedious and has to conform to the statute laws and penal codes governing public sectors. This is to ensure accountability and transparency among public sector officials. This also improves their performance, thus better service delivery to the citizens. Apart from these bureaucracies, B2B marketers also have to provide substantial evidence over their capabilities to perform the tasks they seek. However, in consumer marketing, the public sector lessens its rules as these purchases involve employees’ provision within the organization, or office work enhancement (Kotler & Lee 2005, p.1). Thus, public sector consumer marketing may use social media as a marketing tool, and online service delivery to create publicity for the public institution, or public corporation, or public parastatal.
A macroeconomic change that can have an effect on the B2B marketing process of Emirates Airlines is the Global Economic Crisis that hit the entire globe in 2010. This economic crisis crippled major world economies, including Dubai where Emirates traces its roots. Resulting from this, Emirates Airlines suffered massive losses due to the increased operational costs, reduced air traffic, and high maintenance costs i.e. insurance for the planes paid yet they were not generating any income. The Sky Cargo volumes also dropped drastically as the economic crisis also crippled the import-export trade, where the Emirates Airlines Sky Cargo capitalized on for 20% of its annual revenues by transporting these goods (Bade & Johnson 2010, p.3). To continue wading into the murky business waters during these crucial financial times, Emirates had to raise its fare prices to cover its increased operational costs. This discouraged passengers from using it. To entice them, Emirates Airlines had to formulate a new and effective B2B marketing strategy in order to retain and attract more clients that are corporate. These enticements under the new B2B strategy were mainly non-financial, e.g. holiday trips and vacations.
The global economic crisis came with a lot of threats to the industry. The main one was the increased costs of operation. Everything literally shot up with the decline in economic revenues. This was from the fuel prices to insurance premiums, to employees’ wages and salaries. A lot of businesses faced the threat of extinction. This crisis significantly reduced the numbers of passengers flying first class airlines like Emirates. Most flocked to budget airlines like Etihad, which charged at half rates of what Emirates were charging. Others did not travel at all. This reduction in air traffic led to massive losses of the airlines. However, just as a coin has two sides, this crisis came with an opportunity for Emirates Airlines. It necessitated Emirates to construct its own terminal, Terminal 3. This terminal, located at the Dubai International Airport, exclusively attends to Emirates Airlines. This is the largest terminal in the world, and as such brings with it efficiency and convenience in service delivery. This attracts many passengers to the airline as they want to enjoy the ambiance and serene of this massive structure. This helped Emirates to attract and retain its customers despite the crisis. Due to improved service delivery and staying true to its mission, Emirate Airlines managed to stay in the Sky during the economic crisis (Dwivedi 2010, p.35).
In order to maintain a national and a global level competitive advantage while capitalizing on the global economic crisis, Emirates Airlines can use its resources in its massive fleet of aircraft to counter the effect of reduced air traffic (Bourguignon, Bussolo & Da Silva 2008, p.1). By increasing its number of destinations, it maintains the frequency of its flight, though in different routes. This helps in maintaining its revenues during this crisis. These new flight paths enable the airline to conquer and exploit new markets unknown to it before, thus consolidating its market share and sharpening its competitive advantage and ensuring consistency in the flow of incomes, appropriately profit maximization.