Name:

Course: Marketing Principles 2

Date of submission: 24th match 2013
Word count: 3933

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Contents
Introduction......................................................................................................................................3
Elements of the marketing process for ACL....................................................................................4
The costs and benefits of the marketing orientation for ACL.........................................................5
Macro and Micro environmental factors.........................................................................................6
Applying targeting strategies to find appropriate solution..............................................................7
Segmentation Criteria for ACL products in different markets.........................................................8
Targeting strategy for ACLS estate agency cleaning service..........................................................9
Buyer behavior impact on ACLs marketing activities in different buying situations...................10
Different product strategies used by ACLs competitors...............................................................11
New positioning strategy...............................................................................................................13
Distribution....................................................................................................................................14
Pricing............................................................................................................................................14
Promotion......................................................................................................................................15
The extended marketing mix.........................................................................................................15
Marketing mix for two different segments of ACL.......................................................................16
Differences in marketing products and services to businesses and consumers.............................17
Findings.........................................................................................................................................17
Differences in international and domestic marketing of ACL.......................................................18
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Limitations of the recommended marketing mix...........................................................................18

Planning managing and organizing the work................................................................................19
Justification of plan........................................................................................................................19
References......................................................................................................................................20

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Introduction
This paper aims at discussing the main elements of marketing principles. Moreover, it presents a
real life scenario of the ABC Cleaning Limited (ACL), a leading cleaning service company in the
UK. In light of this, the company has been used as a reference point for discussing marketing
principles. In a nutshell, the main objectives of this paper are as follows;

O b je c tiv e s
Elements of the marketing process for ACL
ACLs marketing process like any other company consists of the following elements; situational
analysis, planning, implementation and control (Armstrong, Kotler, Saunders& Wong, 2008) as
illustrated in the table below.
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Elements of the marketing process

Situational analysis

What it entails
A marketing audit that involves obtaining
information from the marketing mix.
An analysis of the marketing environment i.e.
the external and internal marketing
environment.

Planning

A PESTLE and SWOT analysis.

Formulating the mission of the company, the
corporate and marketing goals and objectives.
Setting marketing strategies to achieve the set
objectives

Implementation

Planning the marketing mix

Putting into effect the marketing strategies
which ultimately lead to achieving the set

Control

marketing objectives.
Analyzing and evaluating the outcome of the
entire marketing process and providing
measures to gauge performance and
contingency plans.
Rectifying the deficiencies of an unsuccessful
marketing process

The costs and benefits of the marketing orientation for ACL

The marketing concept holds that the key to a successful and profitable organization lies in
identifying and anticipating the needs and wants of customers and producing products that will
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satisfy them. In addition, developing superior products compared to their competitors (Kotler,
1980). The costs and benefits of the marketing orientation for ACL are illustrated below.

Costs
Extensive costs are likely to be incurred when

Benefits
ACL will be able to correctly identify feasible

researching the market in search of customer

segments which make the companys

needs and preferences. In addition, production

marketing effort more efficient and

costs can also take a toll on the company.

ACL may be required to train its salespeople a

economical.
Sustainable customer relationships because

fresh which is costly in terms of time and

ACL will provide as per the markets needs

money.

and wants as a result, the company will gain

The employees may be reluctant in accepting

the customers loyalty.

Fostering teamwork among the companys

the marketing concept since it is a paradigm

different departments because the marketing

shift from what they are accustomed to.

concept requires a team effort from say the R

and D department, the quality, marketing,
production departments to produce a

The marketing orientation is not ideal for ACL

wholesome product for the market.

The company will be profitable in the long

if it is seeking immediate sales and profits.

term as a result of customer satisfaction which

leads to goodwill from the customers who may
spread the good word about ACL hence

The markets are subject to new entrants hence

increasing its customer base.

ACL will stand out as a competitor to reckon

ACL will have to invest heavily in promotion

with.
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and distribution costs to sustain its competitive

advantage.
Macro and Micro environmental factors
Macro environmental factors are those external forces that an organization has little or no control
over and they directly or indirectly affect the organizations marketing decisions. On the other
hand, micro environmental factors are those that are within the organizations task environment;
those that it has control over and directly affect its marketing decisions (Palmer & Worthington,
1992). ACL like any company has macro and micro environmental factors that influence its
marketing decisions. These factors are illustrated below.
Macro

Micro

Environmental

Environmental

Factors
Demographic

The size and growth rate of

Factors
Company

factors

the population is important

and D, manufacturing,

to ACL when selecting and

purchasing and

targeting and marketing to

accounting work together

segments.

to arrive at

ACLs departments; R

comprehensive
Economic

This relates to the state of the Competitors

marketing decisions.
The companys

factors

economy; economic patterns

competitors pose as

such as a recession would

threats and opportunities

affect ACLs marketing

that influence its

decisions. Other factors such

marketing decisions.
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Political factors

as the markets income levels

ACLs competitors

and spending patterns are

include; YBC

factors that ACL needs to be

Commercial cleaning

aware of before formulating

services and Peartree

marketing strategies.
These consist of laws, the

Cleaning services.
Their wants and needs

Customers

government and advocacy

influence ACLs

groups; human rights

marketing mix decisions

activists. The current

and marketing strategies.

legislative frameworks are

bound to influence ACLs
marketing decisions, for
instance laws set on
standardizing prices will
influence how the company
Technological

sets its prices.

Technological changes pose

factors

opportunities and threats for

suppliers who are

ACL which means that it

efficient and available

needs to be aware of them as

because they ultimately

they influence marketing

influence when

decisions especially the

production starts.

Environmental

marketing mix.
These relate to the natural

factors

resources that are needed by

Suppliers

Distributors

ACL should invest in

The type, length and

complexity of the
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ACL as inputs. If for

distribution channel

instance there is a shortage

determine when, where

in raw materials the

and how the consumers

company will be prompted to

access ACLs products

make an adjustment in its

and services.

marketing decisions to
ensure that the markets needs
Socio-cultural

are met.
The markets norms, sets of

factors

beliefs, basic values,

have potential interests in

perceptions and social forces

ACL and impact its

influence the type of

ability to achieve its

products produced by ACL.

objectives.

Publics

These are groups that

Applying targeting strategies to find appropriate solution

This section requires identifying a problem that can be solved by applying targeting strategies.
Targeting involves deciding on the segment to aim at (Moehlman, 2010). ACL may face a
predicament of targeting a segment that matches its objectives and resources. This problem can
be solved by selecting suitable targeting strategies in this case, concentrated marketing and
selective specialization.

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CS elo ne cenct i v te r a spt e ecid m a arl i z k a ett oi n g

Segmentation Criteria for ACL products in different markets

Market segmentation involves identifying sub-sets of buyers within a market who share similar
wants and needs and display similar buying patterns (Frank, Massey & Wind, 1972). There four
bases for segmenting markets namely; geographic, demographic, psychographic and behavioral
segmentation. In light of this ACL can use these bases to segment its various products that
include; domestic cleaning, one-off and spring cleaning, end of tenancy cleaning, after builders
cleaning, after party cleaning, carpet cleaning, upholstery cleaning, office cleaning, estate agency
and industrial cleaning as illustrated below.

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Segmentation Criteria
Geographic segmentation comprises

Product
End of tenancy cleaning for consumers moving

dividing the market into distinct

out of their homes to other regions, office

geographical units (nations, states, regions

cleaning for offices located in different regions

or cities). It is ideal for ACL marketers

in the UK and industrial cleaning.

seeking to position their products on the

basis on their consumers geographical
location.
Demographic segmentation consists of sub

Domestic cleaning because it targets residential

dividing the market based on demographic

homes and apartments for consumers of

variables such as age, gender, family life

different ages, gender, different stages in the

cycle and income.

family life cycle and income levels. Upholstery

and carpet cleaning can be offered
simultaneously with domestic cleaning as a full

Psychographic segmentation. Here

package.
After party cleaning for the party lovers

consumers are divided into groups divided

(lifestyle and personality) and estate agency

into groups based on variables such as

cleaning for property owners who prefer

social class, personality, lifestyle and

customized services (social class and attitudes).

attitudes.
Behavioral segmentation. Consumers are

One-off and spring cleaning for consumers who

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divided on the basis of their, behavior,

do not require regular cleaning services and

knowledge of a product, use and response

those who seek the benefits of spring cleaning

to a product. In addition, the occasional

services.

benefits sought from the products, usage

After builders cleaning for occasions after

rates and loyalty to products.

construction.
Upholstery and carpet cleaning for the
occasional sofa and furniture cleaning.

Targeting strategy for ACLS estate agency cleaning service

The estate agency cleaning service targets letting agencies which require cleaning services for
new tenants and often request for customized services. According to Wedel & Kamakura (2000),
the main targeting strategies include; selective specialization, differentiated marketing,
concentrated marketing, product specialization and undifferentiated marketing. Therefore, ACL
has a wide range of targeting strategies to choose from however, since it has to choose one the
most appropriate strategy for the estate agency cleaning service would be concentrated
marketing.

Components of

Advantages

Disadvantages

concentrated marketing
Market structure; selects

Greater knowledge of the segment

The segment may turn

only one segment to

needs which gives the company a

sour due to the changing

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concentrate on.

strong market position and a special needs of consumers.

Focus; the companys

reputation.
High profits

objectives and resources

The threat of new entrants

in the market is high.

match to the segments

needs.
Design; the product is

Operative economics through

designed to appeal only to

product specialization, mass

the consumers in the

promotion and distribution within

segment.
Reliance; it relies on

the segment.
The company gains customer

product specialization,

loyalty.

mass promotion and

distribution.
Buyer behavior impact on ACLs marketing activities in different buying situations

Buyer behavior is the action that a person takes in purchasing and using products and services.
Moreover, it consists of the mental and social processes that precede these actions (Shaughnessy,
1992). In light of this, there are two types of buyer behavior; consumer and organizational
buying behavior (Horton, 1984). Similarly, the two different buying situations are consumer and
organizational purchasing. Buyer behavior has a profound impact on a companys marketing
activities because it gives the company the direction it should follow in terms of its marketing
decisions. This also applies to ACL. The table below demonstrates this.

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Buyer

Buying situation

Effect on ACL marketing activities

Behavior
Organizationa

Purchasing officer

ACL needs to ensure that it has a competitive advantage

evaluating

over the other companies. This means formulating

alternative

strategies that will put it ahead in the market for

vendors for office

instance, affordable prices quality office cleaning

cleaning

services, a skilled sales task force because organizational

buyers prefer a more personal and direct relationship

Consumer

A consumer

with the seller and effective promotional campaigns.

ACL is faced with the task of ensuring that its domestic

interested in the

cleaning service is the best in the market. This calls for

domestic cleaning

proper positioning and differentiating strategies for the

service

service as well as an effective sales promotion and

advertising campaign to encourage the consumer to
purchase the package. Consumers are easily convinced
by an attractive package hence ACL should ensure that
the service package is appealing.

Different product strategies used by ACLs competitors

Earlier, two of ACLs competitors were identified namely; YBC Commercial cleaning services
and Peartree cleaning services. In general, companies use the following product strategies when

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developing their products to gain and sustain a competitive advantage within the market; product
design, product quality, product features and product branding (Hake, 1971). YBC Commercial
cleaning services was founded in 1996 and has largely grown through recommendation and
referral. YBC is famously known for providing quality cleaning services and facilities
throughout the South-East and has a customer retention rate of over 85%. Similarly, Peartree
cleaning services is a huge competitor of ACL in the office cleaning segment. The company was
founded in 1986 and delivers office cleaning and support services to high profile corporate
organizations in the City of London, the South-East and the UK. The company has an annual
sales turnover in excess of 9m.
YBC Commercial cleaning services
Product design: a high quality

Peartree cleaning services

Product design: a high quality product that is tailored

product that is geared towards

according to their clients specifications. In addition,

customer satisfaction.

the product is compliant with the safety and health

Product quality: efficient, high

regulations.
Product quality: the company offers a high quality

quality and technological advanced

product to high profile corporate organizations and

products.

invests in highly trained and qualified operatives in

Product features: Daily office and

both cleaning and other specialist areas.

Product features: office, retail cleaning, waste

kitchen cleaning

management, manufacturing, front of house, stone

daily hygiene and washroom

,marble and terrazzo, IT cleaning, recycling,

cleaning, daily classroom cleaning,

preventive pest control, plant and landscaping

Periodic kitchen cleaning security,

washroom and hygiene supplies.

caretaking, janitorial supplies, waste

management and laundry.
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Product branding: the company

Product branding: the company brands itself as

brands its services by stating their

independent, innovative and one that has reputation

attributes, benefits and

for excellence and competiveness in terms of the

values(sustainability)

product and services it provides.

The strategies used by these two companies have proven to be effective for instance as earlier
stated YBC has customer retention rate of over 85%, while Peartree cleaning services has an
annual sales turnover in excess of 9m showing that both companies are doing exceptionally
well in the cleaning service market. .

New positioning strategy

Positioning is a strategy used by a company to design its products with distinct characteristics or
features that distinguish them from its competitors in order to give it a competitive advantage in
the market (Trout & Ries, 2001). This section proposes a new positioning strategy for the office
cleaning service. Since the market for this service is almost saturated, ACL may consider
adopting the competitor positioning strategy which comprises claiming that their service is better
than their competitors. In addition, to claiming that, ACL should add more features to the service
(for instance carpet cleaning at half price as part of the office cleaning package) if it wants to
gain a competitive advantage.
Developing a new product and sustaining its competitive advantage
ACL is developing a new vacuum cleaner and plans on sustaining the products competitive
advantage within the market. For this to happen ACL needs to consider the following factors as it

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develops the new product; relative advantages of the product, compatibility, ease of use, price
and existing standards and values (Porter, 2008).
Factors for sustaining
competitive advantage
Relative advantage

ACLs new vacuum cleaner should be of high quality and

Compatibility

posses additional features that stand out from competitors.

The vacuum cleaner should be compatible with modern

Ease of use

technology hence acceptable to the market.

Consumers should have an easy time using it. If so, the

Price

product will be competitive and marketable.

The price of the vacuum cleaner should be reasonable and

affordable.
Existing standards and values The product should be environmental friendly.

Distribution
Distribution is arranged to provide customer convenience by considering certain distribution
elements. These include; selection of the distribution channel, level of customer service and the
terms and conditions of distribution (Rolnicki, 1998)

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Selection of the distribution channel i.e. determining the type of distribution channel to use; extensive or intensive distribution.

Level of customer service; delivery periods and methods of transportation.

Terms and conditions of distribution with the distributors.

Pricing

Companies often price their products and services according to their marketing objectives and
the market conditions (Alpert, 1971).
ACLs Marketing

Price

Market Conditions

Price

Objectives
Survival: to survive in

Low

Price elasticity: the

Low and high

the market when

degree to which

respectively.

plagued with over

consumers are price

capacity and intense

sensitive or price

competition.
Maximum current profit
and revenue: to

High

insensitive.
Competitors prices:

High or low depending

they affect how ACL

on how the competitors

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maximize sales profits.

prices its products and

have set their prices.

Maximum sales growth:

Initial price is

services.
The economy

A boom in the economy

to penetrate the market

usually low but

means setting high

is increased

prices while a recession

Market Skimming: to

later on.
High

skim the market.

Government Laws set

means the opposite.

The prices should not

to regulate pricing by

exceed what is

companies.

stipulated in the law.

Promotion
For a companys promotional efforts to be successful, it is important to integrate them with the
companys marketing objectives (Sandhusen, 2000).
ACL Marketing objectives
Build long lasting customer

Promotional activity
Public relations because it involves building and maintaining

relations.

mutually beneficial relationships between a company and its

Customer Loyalty
Product awareness and

publics.
Advertising; it reaches the masses at low costs.

securing a large market

share
Customer satisfaction

Personal selling and direct marketing; It is interpersonal

Quality services to

enabling a comprehensive presentation of a product to a client.

customers
Follow up sales
Increasing sales and profits

Sales promotions; they serve as short-term incentives to

encourage increase in purchases.
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The extended marketing mix

The extended marketing mix consists of; people, process and physical evidence (Kotler, 1980).
Below is an analysis of the extended marketing mix for the vacuum cleaner.

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Marketing mix for two different segments of ACL

This section requires designing marketing mixes for two different segments in consumers
markets. The two different segments include; psychographic and geographic segments.
The psychographic segment marketing mix
Product

After party cleaning service. This product is suitable for customers who are out

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going and portray this kind of a lifestyle. The product features; dish and glass
washing, dusting and polishing furniture and all surfaces, sanitizing bathroom and
toilet facilities, vacuuming carpets, washing floors and rubbish removal
Place

.
The company will directly supply the service by sending its cleaners to the clients

Price
Promotio

residence.
The charge is 15 per hour per person
Television advertising, sales promotion and direct marketing.

The geographical segment marketing mix

Product

Office cleaning service (for offices all over the UK) This product is also suitable

Place

to consumers who prefer regular office cleaning.

The company will directly supply the service by sending its cleaners to the clients

Price
Promotio

residence
Regular weekly office cleaning at 12.50 per hour.
Television advertising, sales promotion and direct marketing.

n
Differences in marketing products and services to businesses and consumers

Businesses markets
Small in size: company invests in personal

Consumer markets
Large: company invests in intensive mass

selling and relative advertising.

Direct and shorter lines of distribution.

promotion.
Distribution channels may be direct or indirect
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and often long consisting of two or more

The buyers are sophisticated and highly trained

intermediaries.
Buyers are easily convinced about a product if

in purchasing.

the advertising campaign is catchy and

educative enough.

Involves a complex buying process.

Consists of parties that influence the purchase

Involves a simplistic buying process.

Individual purchase decision.

decision.

Consists of complex products for instance;

Products are not complex; clothes.

computer programs.
Findings

The findings of this presentation are as follows; the psychographic and the geographical segment
marketing mix have been designed and are ready for implementation; the price, product, place
and appropriate promotion techniques have been presented. Second, the differences between
marketing to businesses and consumers have been discussed and pointed out that, business
markets are smaller compared to consumer markets which requires different marketing
strategies; that business markets require more direct and shorter distribution channels; that the
buying process by business markets is complex which is not the case for consumer markets; that
there are multiple buying influences in business markets, while in consumer markets, consumers

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make individual purchase decisions; that products in business markets products are more
complex when compared to those in consumer markets.

Differences in international and domestic marketing of ACL

International Marketing
Involves producing, selling promoting and

Domestic Marketing
Involves producing, selling promoting and

distributing of ACLs products and services in distributing of ACLs products and services in a local
a global market.
ACL will have a wider scope of endless

market.
The domestic market may become too saturated

opportunities if it ventures into international

because of high competition from similar companies,

marketing.
It is more profitable.

causing ACL to incur losses.

It is not as profitable as international marketing
especially due if the domestic market becomes

Cultural, currency and language barriers that

saturated.
In domestic marketing ACL will not face any

may be present.
Is risky for the company because its products

cultural or language barriers.

Is less risky because ACL has an existing customer

and services may not be well received

base

Huge financial costs

Different consumers who possess different

Requires less financial resources

The company deals with only one set of consumers.

kinds of tastes and preferences.

Limitations of the recommended marketing mix

Psychographic segmentation is limited sue to the fact that is doe not account for
motivation among consumers and the value structures which guides people

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behavior. Thus, for factor such as attitudes it will be difficult to segment due to their
relatively diverse nature.
In this segmentation, it is difficult to differentiate the segment. This is because of
the attribute such as attitudes. The marketing mix element price is different and
this makes it difficult to segment the market. When it comes to promotion, it is also
very difficult to segment since capturing the consumers is difficult. For example,
advertising may not reach the intended audience since they have different
attributes.
Geographical segment is also limited in place of distribution. Consumers are
scattered which increases the costs of transporting goods to them. This also
increases prices which may discourage consumers. Possibility of consumer s moving
from one region to another is high. It may impact negatively on segments
profitability. Segments in different regions may need customized promotion. This
means travelling to their locations. This increases costs and make it unprofitable.

Planning managing and organizing the work

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Justification of plan

The marketing mix plan was formulated after carefully investigating the products offered by
ACL and placing them in suitable segments. The psychographic segment marketing consists of
the after-party cleaning service because it seeks to attract consumers who have an outgoing
personality and lifestyle. On the other hand, the geographical segment marketing mix seeks to
attract customers from all over the UK who require office cleaning in their companies and
corporate organizations. In light of this, the distribution channel that was selected for both mixes
is the direct channel one because it is a service and cannot be separated from its provider
(inseparability). The prices set are trial prices to test how the products will perform in the
segments, while the promotion techniques i.e. television advertising, sales promotions and direct
marketing are the most effective if the company wants to reach the entire market. On the other
hand, the limitations of the recommended marketing mix can be solved by adding more products
in both segments for instance in the geographic marketing mix, industrial cleaning can be added
to make the segment synergetic. Moreover, the marketing mix should include the effect of the
products life cycle and rate of adoption on the products performance in the market. In addition,
the heavy promotional costs are an investment for long-term sales and profitability. Finally the
marketing mix should account for the factors influencing the prices set for instance; the
companys marketing objectives or the prevailing market conditions.

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