Download Traditional and Non-traditional Marketing Strategies: A Comparative

Traditional and Non-traditional Marketing Strategies:
A Comparative Analysis
Thesis
by
Alena Listkova
Submitted in Partial fulfilment
Of the Requirements for the degree of
Bachelor of Science
in
Business Administration
State University of New York
Empire State College
2015
Reader: David Starr-Glass
Acknowledgement
My first acknowledgement and thank you goes to my parents Listkov Yevgeniy and
Listkova Yelena for their loving support throughout my education and especially for their
stubborn and persistent encouragements during the last year of my university education. I
am thankful to all my teachers who have provided, share and influenced my quest for
knowledge. A special gratitude goes to my mentor Professor David Starr-Glass, who
accorded me a generous amount of his precious time throughout the research and writing of
this research project. My final thank you and acknowledgement goes out to my friends for
their supports. I am especially grateful to Vladimir Abrashkin for his constant and
consistent support.
Thank you all.
Table of Contents
Chapter One: Introduction to the Research Project
1.0 The Reseach Project: An Introduction ............................................................................. 6
1.1 The Research Project Aim ............................................................................................... 7
1.2 The Research Project Objectives and Objective Questions ............................................. 7
1.3 Marketing, Marketing Concept and Marketing Strategies: An Overview ....................... 7
Chapter Two: The Research Project Methods and Methodology
2.0 The Research Project Methodology ............................................................................... 17
2.1 The Research Project Philosophy .................................................................................. 18
2.2 The Research Project Approach .................................................................................... 18
2.3 The Research Project Strategy ....................................................................................... 19
2.4 The Research Project Design ......................................................................................... 19
2.5 The Research Project Data Collection Technique - Literature Review ......................... 20
2.6 The Research Project Data Analysis Technique - Qualitative Content Analysis .......... 23
Chapter Three: Traditional & Non-traditional Marketing Strategies: An Investigation
3.0 An Overview of Traditional Marketing Strategies ........................................................ 25
3.0.1 Transactional Marketing Approach ............................................................... 28
3.0.2 Market Segmentation Approach .................................................................... 29
3.0.3 Relationship Marketing Approach ................................................................. 32
3.1 An Overview of Non-traditional Marketing Strategies ................................................. 38
3.1.1 Personal Marketing Approach ....................................................................... 39
3.1.2 Place Marketing Approach ............................................................................ 40
3.1.3 Cause-Related Marketing Approach .............................................................. 43
Chapter Four: Comparative Analysis and Conclusions
4.0 Comparative Analysis .................................................................................................... 47
4.1 Conclusion ..................................................................................................................... 52
Bibliography ........................................................................................................................ 54
Tables, Figures and Illustrations
Figure 1: Five Eras of Marketing Evolution ........................................................................ 10
Figure 2: The Shift to Customer Orientation ....................................................................... 14
Figure 3: The Honeycomb of Research Methodology. ......................................................... 17
Figure 4: How Theory Fits into Research. ........................................................................... 19
Figure 5: Research Data Types, Sources and Collection Techniques ................................. 21
Figure 6: Secondary Research Data Sources. ..................................................................... 22
Figure 7: Undifferentiated targeting strategy ...................................................................... 30
Figure 8: Concentrated targeting strategy........................................................................... 31
Figure 9: Differentiated targeting strategy .......................................................................... 32
Figure 10: The Six Markets Model ....................................................................................... 33
Figure 11: The Customer Markets Domain ......................................................................... 34
Figure 12: The Referral Markets Domain............................................................................ 34
Figure 13: The Influence Markets Domain .......................................................................... 35
Figure 14: The Recruitment Markets Domain ..................................................................... 36
Figure 15: The Supplier/alliance Markets Domain ............................................................. 37
Figure 16: The Internal Markets Domain ............................................................................ 37
Figure 17: World Internet Users by Regions ....................................................................... 41
Abstract
This research thesis investigates the marketing dichotomy between traditional and nontraditional marketing strategies and the approaches adopted by business organizations. The
research looked at the dynamic nature of marketing as the basis for the existence of the two
different strategic approaches deployed by business organizations for achieving the twin
objectives of generating revenue thus profit and ensuring that customers’ needs and wants
are adequately addressed. The research thesis focused on identifying which of the two
strategies and their approaches best serve business organizations’ objectives as stated above.
The significance of this research thesis is it impact on business organization’s ability to
effectively and efficiently market its products/services to its customers. The understanding
of which is of great financial benefits to business organizations by keeping marketing costs
under control, that is, lower overhead costs.
It is also of great benefits to the customers because the lower the cost of marketing the
products/service, the lower the overhead costs passed on to customers in the price of the
products/services, that is, cheaper goods and services. The research thesis is investigated
through the use of secondary research data. The secondary research data where extensively
collected from different body of works already in existence about the subject matter. The
large body of works were reduced through the use of systematic review of literatures to
separate the relevant from the irrelevant research information. The relevant information
collected from the systematic review of literature were then analysed through qualitative
content analysis. The result of the qualitative content analysis were then comparatively
analysed to arrive at the conclusion that business organizations interested in achieving the
most effective and efficient marketing strategies and approaches must see both strategies are
complementary rather contradictory strategies for achieving its marketing objectives.
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Chapter One
Introduction to the Research Project
1.0 Introduction
Marketing is a continuously evolving concept that seems to adapt effortlessly to the changes
in society as well as in technology. This study is a research into two aspects of the ability of
marketing to adapt to changing circumstances. Firstly, the study looked at application of
marketing strategies and approaches through the traditional marketing strategies and
approaches. Identifying the critical significance of how the strategy ensure the effective and
efficient communication of the manufacturers’ products/services to the consumers. The
research investigated the traditional marketing strategies and approaches highlighting the
role of transactional marketing approach, market segmentation approach and relationship
marketing approach.
Secondly, the research looked at non-traditional marketing strategies and approaches. The
non-traditional marketing strategies and approaches deviates away from the traditional
marketing strategies and approaches. It rather focuses on how marketing is adapting its
strategies and approaches to the societal changes, and the use of information and
telecommunication technology to reach the consumer in a more personal and individualistic
ways. To identify all the aspect of the dynamic and fast moving technological advancement
and its influences on the marketing of goods and services through personal marketing
approach, place marketing approach and cause-related marketing approach. The outcome
of these investigations where comparatively evaluated and a conclusion on how the research
study enable the researcher to answer the research questions. Enabling the researcher to
achieve the research aim and research objectives, establishing the fact the both strategies and
approaches are more complementary than contradictory to each other in ensuring the
marketing of goods and services to all.
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1.1 The Research Project Aim
The aim of this research project is to investigate the dynamism inherent in marketing as a
concept, focusing on the traditional and non-traditional strategies applied by businesses.
Identifying the merits and demerits of the two approaches through a comparative analysis.
1.2 Research Objectives and Objectives Questions
I. Investigate the traditional and non-traditional marketing strategies.
What are the attributes of the two marketing strategies?
What are the merits and demerits inherent in each of the strategies?
Is it advisable for business organizations to implement one of either or combine both in the
marketing of their products and services in a technological driven global economy?
II. Draw valid and reliable conclusions based on comparative analysis of the two
marketing strategies.
What does the comparative analysis of the two approaches reveal about their future
application to marketing of goods and services in the current dynamic and globalized
business environment?
1.3 Marketing, Marketing Concept and Marketing Strategies: An Overview
Marketing as a concept is dynamic and its dynamism is expressed through the speed at which
it continues to evolve and expand on the basis of societal changes and technological
advancement. This research project explores what can be referred to as the result of the
dynamism of marketing concept. By dynamism of marketing concept the researcher meant
the increasing leaning of marketing from the ‘traditional’ to the ‘non-traditional’ approaches
to marketing. The changes in marketing concept really not a new occurrence, the changes
has been ongoing for a long time.
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There are at least five recognized eras of marketing history. Before the five eras of marketing
history and its accompanying changes are explained in this introductory chapter. It is critical
to have a foundational understanding of the researcher’s approach to the subject matter. By
this, the researcher is talking about the dynamism of marketing concept as it was investigated
in this research project. The dynamism of marketing was investigated and explained through
two differing perspectives. The traditional marketing approaches and the non-traditional
marketing approaches. The Chartered Institute of Marketing (CIM) (2007) declares
marketing as “the strategic function that creates value by stimulating, facilitating and
fulfilling customer demand. It does this by building brands, nurturing innovation, developing
relationships, creating good customers service and communication benefits” (as cited in
Jackson, 2013, p.37).
According to Thomson and Baden-Fuller (2010), “strategy is the discipline that seeks to
explain why organizations do what they do, and how they can be changed to achieve a
purpose (such as make profits or survive)” (p.1). The effectiveness of the strategic function
identified above determines the success or failure of an organization’s approach to the
marketing of its goods and services. In order for an organization to determine the most
effective strategies for its goods and services, it must have a sound understanding of the
different available marketing strategies, that is, traditional and non-traditional.
The significance of the understanding of the right strategies extends to an appreciation of the
right approaches to be applied. The differences in marketing strategies and their
accompanying approaches is as a result of decades of changes that have taken place in the
application of marketing. It is therefore important to have the basic understanding of the
different eras of marketing that has resulted in the current traditional and non-traditional
strategies of marketing.
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There is perhaps no better evidence of the dynamism of the changes in marketing concepts
than the ever evolving definitions of the concept by no greater authority on the subject matter
than the American Marketing Association (AMA). In 1935, the National Association of
Marketing Teachers (as the AMA was formerly known) (1935) defined marketing as: “the
performance of business activities that direct the flow of goods and services from producers
to consumers” (as cited in Hackley, 2009, p.32). This definition explains the concept of
marketing from the perspective of it being solely a managerial activity.
By 1985, the AMA (1985) described marketing as: “The process of planning and executing
the conception, pricing, promotion, and distribution of ideas, goods and services to create
exchanges that satisfy individual and organizational objectives” (as cited in Hackley, 2009,
p.32). While the 1985 definition still view the concept of marketing as a managerial function,
the exchange was expanded beyond just goods and services to include ideas. The needs that
it was expected to satisfied has also expanded beyond that of consumers to include that of
businesses as well.
In 2004, the AMA (2004) argues that “marketing is an organizational function and a set of
processes for creating, communicating, and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its stakeholders” (as cited
in Hackley, 2009, p.32). The 2004 definition differs from the 1985 definition by recognizing
marketing as an organizational function and highlighting the presence of customer
relationship management within the concept of marketing. In 2007, the AMA (2007),
“Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offering that have value for the customers, clients, partners, and
society at large” (as cited in Masterson & Pickton, 2010, p.5). Irrespective of which of the
definitions above is applied, one undeniable fact remains that marketing as a concept evolves
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with time. The identification of traditional and non-traditional marketing strategies is an
expression of the evolution of the concept over time.
The researcher seeks to understand the traditional and non-traditional marketing activities,
institutions, processes of communicating as well as delivery. The research is not just looking
at the processes, but all the activities and institutions so as to identify the differences between
the two marketing strategies.
Following the evolution of the definition of marketing, it is equally important to have an
understanding of the evolution of marketing as a concept. This is critical because it was the
gradual evolution from the period prior to the 1920s that created the traditional and nontraditional marketing strategies. Boone and Kurtz (2015) provided five eras of marketing
concept evolution eras which included the production era (prior to 1920s), the sales era (prior
to 1950s), the marketing era (since 1950s), the relationship era (since 1990s) and finally, the
social era (since 2000s) (p.9). These evolutionary eras of marketing is identified and
explained below:
Figure 1: Five Eras of Marketing Evolution (Source: Boone & Kurtz, 2015, p.9).
The Production Era of Marketing (prior to 1920s)
During the 1920s the prevailing philosophy amongst entrepreneurs and manufacturers are
mainly that efficiency in the production process that result in excellent quality products. This
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era of marketing was not concern about customer buying behaviour. It was mainly concerned
with efficiency in the delivery of mass products with high quality as the main reason to
motivate customer patronage. According to Boone and Kurtz (2015), “this production
orientation dominated business philosophy for decades; business success often was defined
solely in terms of production success” (p.9). According to Solomon, Hughes, Chitty,
Marshall, and Stuart (2014):
“The production era of marketing was all about the efficient production of a product
for a mass market. The focus was on the company, not the customer…Basically, if
you [Organization] could mass-produce something cheaply and efficiently, you
could dominate a market. Customer need weren’t important, as in this case they had
little choice but to buy from you [Organization]” (p.11).
The emphasis of business was simply to ensure that their production process is efficient and
their products are of high quality. Once these two critical objectives are achieved, the success
of the product is all but guaranteed. A sentiment expressed in Ford’s famous slogan, “they
[customers] can have any colour they want, as long as it’s black” (as cited in Boone & Kurtz,
2015 p.9).
The Sales Era of Marketing (prior to 1950s)
By the 1950s the production era philosophy of efficient and effective mass production has
peaked. The advantages of efficient production process to create quality products peaked for
two critical reasons. Firstly, the war production process developed during the Second War
World by the military as part of the war efforts were converted producing goods at a greater
efficiency rate. These conversion of military production process to civilian purposes were
not limited to the United States alone, but across the developed world. Another aspect was
the improvement in critical utilities such as transportation systems that ensures the
movement of goods in at a faster rate than ever before, thus creating a massive production
of goods across the developed world (Burrow, 2009, p.25). Secondly, the consequence of
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the improvement in production processes and transportation systems created a saturated
market place because of its efficiency in making goods available in all nooks and crannies
of the world at a cheaper and more efficient rate. The saturation of the market place led to
increased customer bargaining power. The customer exercised their new found power
through choice and since there are plenty quality products to choose from, the production
era competitive advantage through efficient low cost production has been completely erased.
This left businesses is little or no differentiation that can be exploited at the detriment of
competitors thus the peaking of the production era of marketing. Burrow (2009) explained
that these changes resulted in increased competition among businesses because of the lack
of differentiation. Companies began to rely on salespeople to convince customers that their
products were better than that of competitors. Salespeople are able to introduce products that
customers had not purchased before and demonstrate the advantages of ownership (p.25).
The introduction of salespeople ignited the sales era of marketing.
The Marketing Era of Marketing (since 1950s)
There are no universally agreed start off year for any of the marketing eras investigated
throughout this research project. The marketing era is therefore no exception. Boone and
Kurtz (2015) postulated that this era started taking roots since the 1950s. Hurd, Barcelona
and Meldrum (2008) argues that the marketing era started in the early 1980s and that this
was due to the increased competitions amongst businesses that saw organizations becoming
more responsive to the needs of consumers (p.167). The first notable difference between this
era and the previous eras already examined is the shift from the production orientation, which
is concerned about efficiency in production. Or the sales orientation, which is concerned
about how much sales the organizations was able to generate. To meeting the needs of the
customers. This is the first time the needs of the customers became the first concern of
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businesses. Boone and Kurtz (2015) explained this shift as “a companywide consumer
orientation with the objective of achieving long-run success. All facets – and all levels, from
top to bottom – of the organization must contribute first to assessing and then to satisfying
customer wants and needs” (p.10).
Now, businesses are not thinking of their own successes from the perspective of their ability
to utilized their resources more effectively, but actually seeking to understand the needs and
wants of the customer and then developing products to meet these identified needs and wants
and therefore eliminating the possibility of producing what customers do not want or need.
Boone and Kurtz (2015) “business philosophy incorporating the marketing concept that
emphasizes first determining unmet consumer needs and then designing a system for
satisfying them” (p.10). This era exposes the reality that the success of businesses are not
limited to its production efficiency, or its sales peoples’ effectiveness, but the understanding
of the needs and wants of the customer.
The Relationship Era of Marketing (since 1990s)
The relationship era represented an expansion of the marketing era is a way that enable
businesses to create a symbiotic relation with consumers that is beneficial to both sides. This
era indicated the fact that consumer centric approach to product marketing is established.
Boone and Kurtz (2015) argues that the relationship era goes beyond just the business and
its customers when they argued that relationship era involves the “development and
maintenance of long-term, cost-effective relationships with individual customers, suppliers,
employees, and other partners for mutual benefit” (p.11). Solomon et al. (2014) explained
this symbiotic relationship as:
“The relationship era is all about having a consumer orientation that satisfies
consumers’ needs and wants. It is not about consumer domination where the
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customer is always right, but more about an era where the organization and
consumer both work with each other to create value in the relationship and the
consumption experience” (p.12).
Irrespective of whether the era is seen from a limited perspective Solomon et al. or from an
expanded perspective of Boone and Kurtz, the customer centricity of the eras post sales is
established (Figure2).
Figure 2: The Shift to Customer Orientation (Source: Cundari, 2015, p.9).
The Social Era of Marketing (since the 2000s)
The social era of marketing is an offshoot of the dramatic and dynamic changes in
telecommunication technology. Boone and Kurtz (2015) argues that the social era of
marketing is currently in full swing due to the ever increasing accessibility of the consumer
to the opportunities of the Internet and the creation of the social media sites (p.11). The new
era in marketing is unique in many ways.
Cundari (2015) argues that in the past eras while innovations in manufacturing, information,
and communications ignited new marketing practices. These practices were mainly driven
by the businesses and unaffected by the hands of the customers, but in this new era, it’s the
customers who have a prominent and leading role in the relations (p.9) (Figure 2). The social
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era marketing is more diverse than any of the precious eras of marketing already examined
in this research. This diversity is because of the many different opportunities for the
manufacturers to meet and satisfy customer needs and wants.
Masterson and Pickton (2010) explained that the Internet has had a significant impact on the
lifestyles of many and on the way that many companies market their products (p.26).
One of the dominant opportunity and venue that era of marketing provided was the social
media venue. Rath, Bay, Petrizzi, and Gill (2015) referred to the emerging and expanding
social era of marketing as Social Media Marketing (SMM) which is “the process of garnering
consumer attention and sales through use of social media platforms” (p.273). The vast
majority of social era marketing tools while still consumer centric like the previous two era.
It went further by actually allowing the consumers to determine the exact products they want
and how they want it. This era of marketing is the only era that has been able to merge the
traditional and non-traditional marketing strategies.
The social era marketing provide flexibility for businesses to incorporate online and offline
customer contacts (Masterson & Pickton, 2010, p.27). To understand the motivation behind
this broad attempt by the researcher especially in respect of the fusion of the traditional and
nontraditional marketing strategies. Hurd et al (2008) provided the basis for this motivation
arguing that, “the purposeful planning and execution of the pricing, promotion of ideas,
goods, and services to create an exchange of time or resources that results in the satisfaction
of individual needs and organizational objectives” (p.167).
It is therefore essential to have an understanding of marketing from the perspective of the
customer and the manufacturer in order to have a complete grounding of the phenomenon.
The exploration of the five different marketing eras above showed that while the production
era was focused on the products, it was also an era dominated by the manufacturing industry.
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In the current social era however, the focus is mainly on the consumer, but this does not
mean the need of the manufacturers have been ignored. The emphasis on the consumer is
basically because of business organizations focus on the service industry while the
manufacturing industries have been mainly outsourced to China and other emerging
economies such as Mexico and Brazil.
This is the era where giant corporations such as Google, and Facebook have generated sales
revenues in excess of $1 billion providing services while not manufacturing anything. The
potentials of this era is truly unlimited, however, the era also recognizes the fact that
manufacturing while not the main driving force of the so called ‘knowledge’ economies of
the developed world. It is still s significant part of the economy and will remain so for
decades to come. The fusion of the traditional and the non-traditional strategies is therefore
inevitable. The significance of the above introductory chapter will become clearer in the
proceeding chapters. These includes the chapter on the research aim, objectives and
methodology. Followed by the main chapter of the research project and concluded with the
comparative analysis and conclusions chapter.
In this introductory chapter, the researcher has been able to explain the research aim and
objectives, establishing the motivation behind the entire research. The chapter also provided
the underpinning for the dynamism of marketing highlighting the evolutionary growth of the
concept. In the next chapter, the researcher highlights the methods and methodology applied
in ensuring the meeting of the research objectives.
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Chapter Two
The Research Project Methods and Methodology
2.0 The Research Project Methodology
By research project methodology, the researcher meant the philosophy, assumptions and
values that serve as a rationale for research and the standards or criteria the researcher uses
for collecting and interpreting data to draw valid and reliable conclusions (Bailey, 1994,
p.34). The research methodology of this research consist of six elements of research (Figure
3). According to Wilson (2014) these six elements of research includes “(1) research
philosophy; (2) research approach; (3) research strategy; (4) research design; (5) data
collection and (6) data analysis techniques – come together to form research methodology”
(p.7) (Figure 3). The role of these six elements of research that formed the research
methodology of this research project explained in details as follows:
Figure 3: The Honeycomb of Research Methodology (Source: Wilson, 2014, p.7).
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2.1 The Research Project Philosophy
The researcher’s philosophical view of the research project is critical in conducting of a
marketing research. Saunders, Lewis, and Thornhill (2009) argues, the adopted research
philosophy contains important assumptions about the way in which the researcher view of
the world and these assumptions underpins the research strategy and the methods chosen as
part of the strategy (p.108). In the light of the above, the researcher Epistemology, that is,
the nature of the knowledge is interpretivist and the Ontology, that is, what the researcher
considered as acceptable knowledge is subjectivist. While the Axiology, that is, the role of
values in the research, is biased (Figure 3). Furthermore, Easterby-Smith, Thorpe and
Jackson (2012), “first, it helps to clarify research designs…Second…help the researcher to
recognize which designs will work and which will not…Third, it can help the researcher
identify, and even create, designs that may be outside his or her experience” (p.17).
2.2 The Research Project Approach
There are three main research approaches, these are the inductive, deductive and mixed
methods research approach which combines the inductive and deductive approaches. This
research project was approached through inductive reasoning. According to Hair, Celsi,
Money, Samouel and Page (2015) inductive research approach is the thinking that involves
identifying patterns in a data set to reach conclusions and build theories. Inductive research
approach enables researchers to build conceptual framework from the collected data (p.276)
(Figure 4). Inductive research approach enables the researcher to explain how the conceptual
understanding of traditional and non-traditional marketing fits into the whole research
through the application different marketing approaches.
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Figure 4: How Theory Fits into Research (Source: Wilson, 2014, p.18).
2.3 The Research Project Strategy
According to Blaike (2010) explains that “research strategies provide a logic, or a set of
procedures, for answering research questions, particularly ‘what’ and ‘why’ questions”
(p.18). The strategy for answering the research objective questions that enabled the
researcher to achieve the objective of the research project was the qualitative research
strategy. The qualitative research strategy was favour instead of the quantitative or mixed
methods strategy because this is an interpretivist research. As Smith (2010) explains,
“research strategy therefore is the logical set of principles that informs the researcher in the
process of planning, managing and implementing a single or collection of research method”
(p,21). The logical process for collecting data for an inductive interpretive research such as
this is through qualitative research data, hence the qualitative research strategy.
2.4 The Research Project Design
According to Ghauri and Gronhaug (2005), “the research design is the overall plan for
relating the conceptual research problem to relevant and practicable empirical research. In
other words, the research design provides a plan or framework for data collection and its
analysis” (p.56). The research design provides the researcher with the means of answering
the ‘what’ and ‘why’ questions of the research objectives. This research project design is the
archival research method. Jackson (2015) explains the appropriateness of the archival
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research design for this research arguing that as a qualitative method, the archival research
design involves describing data that existed before the time of the study, that is, the data
were not generated as part of this research (p.105). These already existing data on the
research topic were carefully selected to ensure that they are a valid and reliable data that
are fit for purpose.
2.5 The Research Project Data Collection Technique – Literature Review
The critical role of collecting the type of data required for the research project is underscored
only by the technique(s) used in collecting them. Graziano and Rawlin (2004) postulates that
effective data collection is pivotal to the entire research process since data is the raw material
of providing the answers to the research questions (as cited in Lancaster, 2005, p.65). The
research project data, the validity, reliability and appropriateness of the information gathered
from them is dependent on the technique(s) used for collecting them hence the significance
of this section. Lancaster (2005) underscore this importance arguing that “the researcher
must know not only what data is required, but also the principal methods, approaches and
techniques for collecting data such that the most appropriate data collection technique can
be used” (p.65). The appropriateness of the technique(s) is also dependent on the type of
data required. The type of data required for this research project is the secondary data (Figure
5).
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Figure 5: Research Data Types, Sources and Collection Techniques
(Source:Malhotra et al., 2006 as cited in Polonsky & Waller, 2011, p.130).
Secondary Information Sources
This entire research project sources research data from the secondary data as already
mentioned above. White (2010) explains that “secondary data consist of information that has
already been collected for another purpose but which is available for others to use” (p.61).
This sources of this research data however are limitless, but the common ones are illustrated
in figure 6 below. The researcher therefore took advantage of this large sources of secondary
research data. By sourcing research information from various sources to provide the most
appropriate and reliable information for providing the answers to the research questions.
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Figure 6: Secondary Research Data Sources (Source: Browne, 2005, p.418).
Apart from the research design and strategy that requires the use of secondary research
information. The secondary research information also provided the research other benefits
that are critical. As White (2010) argues, firstly, it helps in describing the issues that is the
focus of the research investigation by providing context. Secondly, helps to provide data
comparison through replication and finally, it provides the raw material for analysis (p.68,
69, 70). The secondary research information collected for this research project was used in
the various ways identified in the argument above.
Literature Review
Unlike the primary research information that could be collected through the application of
the survey questionnaire, interviews (structured and semi-structured), or observations. The
secondary research information are already in existence by their nature. The collection is
therefore completely different from that of the primary sources of research information. The
secondary research data collection technique for this research project is the literature review.
Dawidowicz (2010), “a literature review is a systematic examination of knowledge available
on a topic” (p.2). While the simple definition above give a broad view of what constitute a
literature review, it fall short of identifying a critical fact. The fact that literature can be either
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traditional or systematic depending on the purpose. In this research project, the systematic
literature review was the chosen path.
Petticrew and Roberts (2006) explained that systematic literature review is “a method of
making sense of large bodies of information, and a means to contributing to the answers to
questions about what works and what does not” (as cited in Jesson, Matheson & Lacey,
2011, p.12). The systematic literature review as applied in this research project provided the
researcher the opportunity to separate the important information required for the research
from the seemingly limitless body of information available. It helped the researcher to
answer the research questions, design the research and develop the appropriate strategy for
conducting the investigation. As Jesson et al (2011) explain “systematic review as a review
with a clear stated purpose, a question, a defined search approach, stating inclusion and
exclusion criteria, producing a qualitative appraisal of articles” (p.12). It is the technique
used in selecting the required information to meet the requirements of the research project
thus part of the entire research thesis and not an independent chapter as is common with
traditional literature review.
2.6 The Research Project Data Analysis Technique – Qualitative Content Analysis
One of the principal determinants of which analysis technique to use is the appropriateness
of the technique to the type of research data. This factor is essential because the technique
used in analysing the collected that have a direct impact on the quality of the interpretations,
and by extension the reliability and validity of the findings. As Hatch (2002) argues:
“Data analysis is a systematic search for meaning. It is a way to process qualitative
data so that what has been learned can be communicated to others. Analysis means
organizing and interrogating data in ways that allow researchers to see patterns,
identify themes, discover relationships, develop explanations, make interpretations,
mount critiques, or generate theories. It often involves synthesis, evaluation,
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interpretation, categorization, hypothesizing, comparison, and pattern finding”
(p.148).
In the light of the above, the researcher analysed the collected research data through the
application of the qualitative content analysis technique.
Qualitative Content Analysis
According to Kuckartz (2014), qualitative content analysis is a form of analysis in which an
understanding and interpretation of the text play a far larger role than in classical content
analysis (p.33). On the other hand, Schreier (2002) described qualitative content analysis as
a “method of systematically describing the meaning of qualitative material” (p.8). The
decision to use the qualitative content analysis technique is not limited to its suitability for
qualitative research data as explained above. It also includes the techniques appropriateness
for analysing research that are interpretative, inductive, situational and content specific
research data such as the ones collected in this research (Schreier, 2002, p.21, 22, 31). The
qualitative content analysis technique enable the researcher to analyse the research data in
an interpretive, situational, and context specific manner.
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Chapter Three
The Traditional and Non-traditional Marketing Strategies: An Investigation
3.0 An Overview of Traditional Marketing Strategies
The exploration of the historical background of marketing and its evolution revealed that
change was constant through the entire historical phases. The production era focuses on the
productive efficiency and product quality, but that focus was completely change by the time
of the marketing era. The changes in focus did not stop at just moving from the product to
the customers, it continued with the current social era which identifies the synergies of
combining satisfying the manufacturers’ desire for profit and the customer needs met
simultaneously. To establish a comprehensive understanding of the traditional marketing
approach, the researcher investigated four marketing approaches that business used in
ensuring that the manufacturers’ objective of profit maximization is achieve while ensuring
that the consumers are served as well.
To establish a comprehensive understanding of the traditional marketing strategies the
researcher investigated the popularly known marketing mix. As Kashani (2005) declared,
despite the emergency of integrated services, the traditional core ideas in marketing,
including the ever-present marketing mix (product, price, place and promotion) continued to
be tangible product centred (p.2). As already explained above, the whole premise of
marketing is to provide strategies the enables the manufacturer produce goods and services
that meets consumers’ needs and wants while remaining profitable enough to meet the
manufacturers objectives. The traditional marketing strategies are therefore the tools for
achieving these two sometimes conflicting objectives. The effectiveness of marketing
approaches such as transactional, segmentation, relationship or experiential marketing in
influencing the consumers’ decision is largely dependent on business understanding, and
management of the marketing mix as explained below:
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Product
According to Kerin and Hartley (2013), “a product is a good, service or idea consisting of a
bundle of tangible and intangible attributes that satisfies consumers’ needs and is received
in exchange for money or something of value” (p.213). The concept of product can be
broken down into consumer and business products. The traditional marketing strategy
provides a pathway to ensuring that business markets their products in such a way that it
addresses the specific needs of the type of customers that they are trying to reach. This means
that the way products are marketed are influenced by the type of the product whether
consumer or business products and their nature, that is, tangible or intangible.
Price
Schindler (2012) described price as “that which is given in return for a product in a
commercial exchange” (p.3). One critical aspect of the description of price given by
Schindler above is the phrase ‘commercial exchange’. If the transaction is not a commercial
exchange, then the value given in return for the product cannot be said to be price. Nagle
(1987) postulated that the significance of price in traditional marketing strategy is not
primarily concerned with creating value. Rather, it could be said to be the marketing activity
involved with capturing, or “harvesting” the value created by the other marketing activities
(as cited in Schindler, 2012, p.5). In addition, Kotler (n.d.) argues that price as a traditional
marketing activity is fundamentally different from others because it produces revenue while
others produces costs (as cited in Schindler, 2012, p.5). This is main significance of pricing
in the whole concept of marketing. Where the pricing strategy an organization is wrong, the
whole system of is doomed to collapse from production to marketing.
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Promotion
Under traditional marketing strategies, the promotion strategy is perhaps the most
distinguishing activity between the traditional and the non-traditional approach to marketing.
The methods of promoting products and services under the traditional marketing approach
is completely different from the non-traditional because of the rapid changes in
communication and technology. According to Hodgkinson (2005):
“Promotion includes advertising, public relations, and marketing communications.
The role of promotion is to call attention to a product or service, and build awareness
of it, usually with a focus on key benefits, with the ultimate aim of influencing
purchasing decisions. Promotion exists both to inform and create awareness, and is
an essential aspect of marketing in competitive markets” (p.74).
The traditional marketing strategy to advertising, public relation and marketing
communication is based on simply informing the potential customer about the product. The
approach is more concern of informing as oppose to seeking out the needs and wants of
customers.
Distribution
Distribution is a traditional marketing strategy that is pivotal because irrespective of the
effectiveness of the production process or the quality of the products that emerges from that
process. All the advantages accrued from efficient process and the quality of the product is
lost if the goods are not available in the market where they can be accessed by the consumers.
Where there is laxity in the distribution strategy, all the gain made through effective and
efficient production and promotion are lost. While the successful management of the
marketing mix is critical, a business organization’s marketing approach can make or
undermine the objectives of the manufacturer. The researcher investigated the significance
of traditional marketing approaches for the purposes of this research through the
transactional, segmentation, and relationship marketing approaches.
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3.0.1 The Transactional Marketing Approach
The transactional marketing approach is one of the areas most affected by the changes that
have been taking place in the way that organizations markets and relates with their
customers. Ferrell and Hartline (2014) explained that “the goal of transactional marketing is
to complete a large number of discrete exchanges with individual customers. The focus is
on acquiring customers and making sales, not necessarily on attending to customers’ needs
and wants” (p.21). While transactional marketing approach to the marketing of products and
services by business organizations are not as relevant as it was in the past. It does not in any
way diminished the fact that some specialized businesses the transactional marketing
approach is still relevant and effective. The main reason behind transactional marketing
approach losing its relevance amongst majority of business organizations is due to the
increasing competitiveness of the globalized business world. It is no longer enough to build
business on transactional basis and expect a repeat performance on the path of the customers.
Organizations have to build relationships with customers to ensure their loyalty.
However, transactional marketing approach is still the main marketing approach use by
organizations marketing and servicing political parties. In majority of democracies across
the world, elections occurs in specific intervals. As an example, the United States
presidential election circle occurs every four years. Business involved in producing flyers,
posters, and campaign advertisements approaches the political parties and their presidential
candidates on a transactional marketing basis. Building an enduring relationship with the
customers in this case is not applicable because the business relationship between the
producers and customers is time barred. Whether the candidates are elected or not, the
producers’ products and services will not be required again until another presidential election
circle four years later, making the transactional marketing approach the most appropriate
approach.
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3.0.2 The Market Segmentation Approach
The market segmentation as an approach to marketing by organizations is one of the oldest
approaches available to businesses. Unlike in the transactional marketing approaches
examined above, this approach is more detailed and long term oriented. Pride and Ferrell
(2014) explains that “market segmentation is the process of dividing a total market into
groups, or segments, that consist of people or organizations with relatively similar product
needs” (p.164). The importance of this segmentation is to enable organizations develop the
appropriate marketing strategies that will precisely match the needs if these customers.
It is the shared characteristics of the segmented market that enables organizations to produce
goods and services that meets these similar needs, and design the most effective and efficient
marketing strategies to reach the customers irrespective of whether they are consumer or
industrial customers. It is important to emphasize here that market segmentation is only
feasible in a heterogeneous market because of the diversity of the needs of the market. While
market segmentation does not apply to a homogeneous market because homogeneous
markets by their nature already consists of individuals and organizations with needs and so
do not require market segmentation.
Business organizations further breaks down segmented market into smaller segments that
are referred to as target market for more specific marketing. Iacobucci (2014) explained that
once the different segments’ preferences of the segmented market have been identified, the
next step is to now target each of the market segment using the appropriate targeting
approach (p.5). There are basically three types of targeting approaches that organizations
apply to target markets. Pride and Ferrell (2014) identifies these three types of targeting
approaches as undifferentiated targeting, concentrated targeting and differentiated targeting
(p.165):
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Undifferentiated Targeting
Pride et al., (2015), undifferentiated targeting is “a strategy in which an organization designs
a single marketing mix and directs this strategy at the entire market for a particular product”
(p.170) (Figure 7). Undifferentiated targeting is only used in situations where the
organization seeks to market a single product to the entire market without differentiating on
the basis of the needs of the consumers within that particular market. This means there is
also no distinction between the product marketed, the price charge and the promotion
deployed as well as the means of distribution. Undifferentiated targeting is mainly viable for
mass consumer goods such as food items, and similar home daily needs.
Figure 7: Undifferentiated targeting strategy (Source: Pride et al., 2015, p.171).
Concentrated Targeting
Concentrated targeting strategy as the name implies is a strategy that allows the organization
to concentrate its marketing efforts to target specific segment of the market that it is able to
serve best. Lamb et al., (2012) explains that this is “a strategy used to select one segment of
a market for targeting marketing efforts” (p.180) (Figure 8). This approach enables the
organization to concentrate its limited marketing resources in appealing to a particular
segment among the several segments existing in the market. The illustration below (Figure
8) shows a target market with three segments (As, Bs, and Cs). The organization in this case
31
concentrates its resources to concentrate on serving segment market ‘Bs’ using a single
marketing mix.
Figure 8: Concentrated targeting strategy (Source: Pride et al., 2015, p.171).
Differentiated Targeting
Pride et al., (2015) described differentiated marketing as “a strategy in which an organization
targets two or more segments by developing a marketing mix for each” (p.173) (Figure 9).
While the two preceding targeting approaches uses a single marketing mix to reach the
targeted market. The differentiated targeting approach follows a different route by deploying
multiple marketing mix designed to meet the need of each of the targeted segment. It is also
known as the multisegment or customer targeting approach. This approach is most effective
within industrial context where single or few larger customers requires specifically
developed products.
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Figure 9: Differentiated targeting strategy (Source: Pride et al., 2015, p.171).
3.0.3 The Relationship Marketing Approach
Gronroos (1997) described relationship marketing as an attempt “to establish, maintain and
enhance relationship with customers and other partners, at a profit so that the objectives of
the parties involved are met. This is achieved by mutual exchange and fulfilment of promise”
(as cited in Little & Marandi, 2003, p.22). The whole premise of relationship marketing
approach is the enhancement of the exchange relationships that benefits all the parties
concerned on a long term basis. The relationship marketing approach is usually adopted by
business organizations interested in enhancing its competitive position in the market. The
relationship marketing approach is concerned with all stakeholders benefiting from the
exchange. Based on the aforementioned, it is essential to identify and explain the role each
of the stakeholders in a relationship marketing approach. The identification of the
stakeholders in a relationship marketing approach is based on the ‘six markets model’
developed by Christopher, M., Payne, A., and Ballantyne, D. (1991). The six markets model
are (1) customer markets; (2) referral markets; (3) influence markets; (4) recruitment
(employee) markets; (5) supplier/alliance markets; and (6) internal markets (Payne,
Ballantyne & Christopher, 2005, p.855) (Figure 10).
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Figure 10: The Six Markets Model (Source: Payne et al., 2005, p.860).
Customer Markets
Payne and Frow (2013) explained as expected that the customer is at the centre of the model.
“It is clear that customers should be the main focus of marketing activity. In focusing on the
customer domain, companies need to adopt the relationship marketing approach” (p.120).
The customer market domain consists of the buyer, that is, the direct customer of the business
organization – the wholesaler. Followed by the intermediary, that is, the retailer to whom
the wholesaler above sells the business organization’s products and services. Finally, the
consumer, that is, the individual customers who buys the organization’s products and
services from the retail outlets (Payne & Frow, 2013, p.121) (Figure 11).
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Figure 11: The Customer Markets Domain (Source: Payne & Frow, 2013, p.121).
Referral Markets
This is a marketing relationship that deploys the ‘word of mouth’, that is, advocates the
principle of ‘the best form of marketing is to get the customer to do the marketing for the
organization’. It stimulates the existing customer base of the organization to recommend the
organization’s goods and services to other third parties within their sphere of influence
(Harwood, Garry, &Broderick, 2008 as cited in Buhler & Nufer, 2010, p.24) (Figure 12).
Figure 12: The Referral Markets Domain (Source: Payne & Frow, 2013, p.124).
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Influence Markets
The influence markets relationship marketing of an organization is limited only by how
wideness of the organization’s areas of influence. According to Buhler and Nufer (2010),
“influence markets refer to a wide range of sub-markets including financial and regulatory
organizations as well as the government” (p.24) (Figure 13).
Figure 13: The Influence Markets Domain (Source: Payne & Frow, 2013, p.130).
Recruitment (employee) Markets
According to Payne et al., (2005), this comprise of all potential employees in addition with
third parties that serve as access channels. These ranges from executive search organizations,
employment agencies, job centres, off-line and on-line advertising, as well as using the
organization’s own staff to suggest potential applicants (p.861) (Figure 14). This relationship
marketing domain is the entirety of the spectrum of the venues that an organization uses to
recruit employees both internal and external.
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Figure 14: The Recruitment Markets Domain (Source: Payne & Frow, 2013, p.133).
Supplier/alliance Markets
Brink and Berndt (2008) postulates that “one of the key relationships that organizations build
is with their suppliers” (p.144). This market is principally about the relationship with other
businesses that trades with an organization, this is not limited to the organization’s suppliers
alone. It also included other organizations that are in alliance with the organization
irrespective of nature of the alliance whether short, medium or long term alliance. The size
of the organization determines the size of these markets (Figure 15).
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Figure 15: The Supplier/alliance Markets Domain (Source: Payne & Frow, 2013, p.128).
Internal Markets
All the five preceding relationship marketing domains that has been discussed are focused
at the building relationship with entities external to the organization. The internal markets
domain changes that focus because it focuses on the internal customers of the organizations.
Brennan et al (2008), “internal marketing is the process of applying explicit marketing
practices to the organization’s internal departments, that is, treating departments within the
organization as if they were ‘real customers (p.148) (Figure 16).
Figure 16: The Internal Markets Domain (Source: Payne & Frow, 2013, p.137).
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3.1 An Overview of Non-traditional Marketing Strategies
The emergence of non-traditional market strategies speaks to the dynamic nature of
marketing as a concept. Fallon and Zgodzinski (2012) argues that “whether traditional or
nontraditional, marketing is designed to plan, price, promote, and distribute products and
services capable of satisfying the needs and desires of consumers” (p.92). Given the
postulation by Fallon and Zgodzinski above, the main difference between traditional and
nontraditional marketing strategies is simply the adaption of the current and evolving
changes in society to the original functions of marketing. The evolving changes in society
ranges from cultural changes to the most significant, that is, the way that society
communicates today. The increasing significance of societal changes has impact the way
goods and services are marketed to customers.
Kotler et al (2007) recognized these societal changes declaring that “marketing is a social
and managerial process by which individuals and groups obtain what they need and want
through creating and exchanging products and value with others” (as cited in Blythe, 2014,
p.5). The social era of marketing grants non-traditional more significance in reaching
customers and meeting their needs and wants. The changes in society and the social era
meant marketing is address in a different ways. Davis (2010):
“nontraditional marketing describes new media and/or unconventional marketing
communications choices have developed during the past 15 years as a result of
technological advances in technology, such as the advent of the commercial Internet
and the World Wide Web protocol, mobile technology, and social media” (p.301).
The non-traditional marketing strategies departures from traditional marketing strategies in
their approaches to meeting the needs and wants of the customers. The research into nontraditional marketing strategies therefore looks at how the customers are reached through the
personal marketing, place marketing and cause-related marketing approaches.
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3.1.1 Personal Marketing Approach
Traditionally manufacturers mass produce products for the customers without any form of
input from the customers. In non-traditional marketing, the production of goods and services
are personalized, that is, seeking to design goods and services based on the specific needs of
customers. Kotler et al. (2009) described personal marketing approaches as using a one-toone personalization approach to marketing which provides content or recommendations that
are relevant specifically to the individual customer’s need based on that individual’s
characteristics and preferences (p.141). In non-traditional personal marketing approach the
manufacturers produced products/services and market them based on the needs of individual
consumers. This involves taking extensive advantages of the Internet as a medium of
accessing the specific characteristics of individuals and then producing goods and services
to meet the needs of those customers.
Under non-traditional personalized marketing approach, the market is not just broken down
into smaller segments, but actually focused on individuals. It is this personalization of the
products/services that differentiates the non-traditional from the traditional. Non-traditional
personalization marketing gives manufacturers certain advantages that traditional product
marketing was not able to provide. Blakeman (2014) postulates that these advantages
includes: Firstly, “the ability to target only those [customers] most likely to buy, this means
that producers are producing only goods and services that on demand, cutting organization’s
cost of doing business such as warehousing. Secondly, “the ability to build and maintain a
long-term relationship” with the customers. The identification of the personal needs of
customers enable organizations to develop a lasting relationship with consumers through the
providing for their specific needs. Thirdly, “the ability to personalize messages” that is,
customized advertisements cutting the cost of unnecessary advertisements (p.194). The
postal child for personalized marketing is social marketing.
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3.1.2 Place Marketing Approach
Distribution strategies in traditional marketing at its basic level is simply the management
of product physical movement from the point of manufacturing to the point of consumption.
This is not limited in any way to tangible products as services in certain unique
circumstances involves physical movement. A computer engineer from an Information
Technology (I.T) firm going to the customer’s office to repair a defect is movement of
services in the physical. The same can be argued in terms of a plumber coming to a customer
place of abode to repair a broken water pipe. However, in non-traditional place marketing,
the issues involved in the strategies goes beyond the physical movement of goods and
services. In this section, the focus on place marketing strategy is approached from two
contemporary perspectives. The first is place marketing in terms of services provision that
does not involve physical relocation of the service provider from one location to another as
in the two given examples above.
Place marketing in this case is viewed from the perspective of the service economy. Kotler
and Armstrong (1991), “a service is an activity or benefit that one party can offer to another
that is essentially intangible and does not result in the ownership of anything. Its production
may or may not be tied to a physical product” (as cited in Clarke, 2000, p.11).
Hoffman and Bateson (2011), “traditionally, economies throughout the world tend to
transition from an agricultural economy to an industry economy (e.g., manufacturing,
mining, etc.), to service economy” (p.11). These transitions in the world economy lead to
the development of place marketing as the appropriate strategy for the marketing of services
that does not involve service as it is traditionally known. The marketing of services provided
through retail banking to mention an example, is not done through the traditional distribution
marketing strategy, but rather through for example the Internet. The Internet is perhaps the
most significant influencer on the development of place marketing differentiates strategic
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marketing of service different from the usual. Organizations such as banks today market
what is commonly known as ‘e-services’. E-services enables the organizations to market
their services as well as provide their services to the consumers through the Internet without
any physical contact with the potential consumers. Now services in retail banking are now
possible without a visit to the banking hall. Loans, overdrafts and card services can be
initiated and concluded on the Internet, eliminating the usual physical presence of the service
provider or the customer.
Figure 17: Source: Internet World States (as cited in Hoffman & Bateson, 2011, p.17).
The opportunities and potentials that the Internet represent as a tool for marketing is simply
limitless. It is limitless because its potentials and opportunities are not limited to the services
sector of the economy as discussed above is underscored by the Internet increasing
prevalence across the world (Figure 17). According to Hoffman and Bateson (2011), selfservice technologies enables the provision of convenience and efficiency to the both parties
involved in the transaction. It makes the service available to the customer at owns choosing
and the revenue from the transaction to the provider immediately the service is used (p.17).
The second perspective of place marketing approach as it concerns this research thesis is
focused on the marketing of a location, a city, a country (tourism). Boone and Kurtz (2010),
“place marketing attempts to attract people (customers) to a particular area, such as a city,
state, or nation. It may involve appealing to consumers as a tourist destination or to
businesses as a desirable business location” (p.395).
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Short et al., (2000) description of place marketing illuminates significance of using other
marketing mix elements in combination with place marketing. Declaring “place promotion
involves the re-evaluation and re-presentation of place to create and market a new image for
localities to enhance their competitive position in attracting or retaining resources (as cited
in Avraham & Ketter, 2008, p.5). The essence of place marketing is its ability to help cities
rebrand to create a new image in the minds of tourists to visit, or businesses to relocate. The
ability of cities and nations to draw in more tourists is not limited to the promotion of that
location as a place to vacation. There is an economic aspect to the movement of tourists.
It builds new business activities that are geared towards serving the needs of the visitors. It
also creates employments for people within the location ensuring the economic benefits of
tourism is spread from the governments to individuals. According to the World Travel and
Tourism Council (WTTC) (2015):
“The direct contribution of Travel & Tourism to GDP in 2014 was USD2,364.8bn
(3.1% of GDP). This is forecast to rise by 3.7% to USD2,451.1bn in 2015. This
primarily reflects the economic activity generated by industries such as hotels, travel
agents, airlines and other passenger transport services (excluding commuter
services)” (p.3).
On the attraction of businesses to a particular city or location. Place marketing works to
establish the advantages of businesses relocating to a locality based on promise of lower tax
burden, and granting of tax holidays. The essence of this type of marketing is the significant
impact it can have on the profitability of the organizations attracted to the location. Finally,
non-traditional place marketing exposes the business opportunities beyond the limitations of
movement of physical goods from one location to another. Place marketing approaches
involves not just the tangible, but also the intangible goods and services which is enhanced
by the increasing role of technology in the market place.
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3.1.3 Cause-Related Marketing Approach
Boone and Kurtz (2010) described cause-related marketing as “marketing that promotes
awareness of, or raises money [revenue] for, a cause or social issue, such as drug abuse
prevention, childhood hunger, or homelessness (p.395). Furthermore, Adkins (2011) argues
that cause-related marketing is “a commercial activity by which a business with a product,
service or image to market builds a relationship with a cause or a number causes for mutual
benefit” (p.11). There are two critical points in these definitions of cause-related marketing.
Firstly, the commercial characteristics of the approach to marketing of goods and services.
This removes the erroneous assumption that cause-related marketing is a charity, clearly it
is not. Secondly, the building of relationships for the purpose of creating mutual benefits
for the cause organizers and the business organization. The arguments above evidently
established the fact that cause-related marketing unlike the traditional marketing strategies
approaches is not solely geared towards revenue generation, but rather combines revenue
generation with benefiting a worthy cause.
One of the most recognized outlets for cause-related marketing approach adopted by
businesses across the globe currently is the concept of Corporate Social Responsibilities
(CSR). Sims (2003) described corporate social responsibility as “the continuing commitment
by business to behaving ethically and contributing to economic development while
improving the quality of life of the workforce and their families as well as of the community
and society at large [stakeholders]” (p.43). Furthermore, Fallon (2015) argues that forwardthinking organizations embed CSR into their business operations to create shared value for
business and society. Arguing along the same lines, Taylor (2013) explained that the
evolution of the CSR (cause-related marketing) has changed and is changing the entire
business environment significantly in that it creates the understanding that profit alone is
insufficient motive for the business organizations (p.49).
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The increasing popularity cause-related marketing is not only because of its benefits to the
society as an entirety, but more so due to its symbiotic benefits to all stakeholders, that is,
the business, the focal cause(s) and the society at large. Business organizations are only able
to sustain their commitment and in most cases increase their commitment to cause-related
marketing because of its symbiotic nature. To understand the effectiveness of cause-related
marketing as a viable marketing approach for business organizations, it is critical to identify
some its commercial and relationship benefits to business. Some of the commercial benefits
cause-related marketing includes the under listed:
Event or Activity Sponsorship
Kinzey (2013) explained that “when a non-profit event or activity is sponsored by a business
to help raise funds for a good cause, it is called a sponsorship” (p.122). The average customer
see the event simply as a charity by the business, but the organization is benefiting
commercially from the sponsorship in two broad sense. First, the sponsorship enables the
business to build goodwill among the people living in the locality and this goodwill do
translate to patronizing of such business. Second, the number of customers that patronize the
business ensures the business benefits commercially from the sponsorship. Finally, the most
visible benefit of the three is that the business is able to brand the venue of the event or
activity, through which it creates exposure for its brands.
Product and Service Sales
Business organizations sometimes set aside and donate a certain percentage of the profit
from the sale of an identified product or service to the non-profit organization on a
transactional sale agreement (Kinzey, 2013, p.123). This type of cause-related marketing
involves for example a Mobile Phone business pledging to donate say $1 of every one year
contract signed from December 1 2015 to end of February 2016 to an orphanage.
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This type of transactional sale agreement with the orphanage represent a cause-related
marketing. The business will market its Mobile Phone contract to the community stating
clearly that between the mentioned dates, a $1 from the signing of the contract goes directly
to the orphanage. Customers who sign up for the contract knows they are contributing to the
sustenance of the orphanage while make what is an ordinary purchase. The business stand
to benefit from this type of campaign because some people will make the purchase with the
sole aim of being able to support their local orphanage, while the business reap increase
profit from the initiative making the outcome a mutual benefit.
Trade-In
This is a common retail cause-related marketing program, it usually involves a retail business
asking customer to donate their gently used item such as lady’s handbags or gently used
smartphones. The end use of the donated items are made know in the marketing campaign,
such as stating that the lady’s handbags will be donated to a shelter for abused women
(Kinzey, 2013, p.125). This type of campaign also involve the retail business informing the
customers and other potential donors that in addition to supporting a worthy cause in kind,
they also get a certain percentage off their next purchase within the retail outlet. The business
benefits commercially through customers’ purchases while supporting a worthy cause, and
the non-profit organization the business entered the trade-in agreement with also benefit by
having an increase in number of items to give tout to the needy.
Attraction and Retention of Employees for Business
Smith (2003) argues that “there are ample evidence that CSR [cause-related marketing] can
have a positive effect on attracting applications, work satisfaction and staff retention” for
business involved in cause related marketing (as cited in Taylor, 2003, p.51).
Reduction in Corporate Costs for Business
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Another less discussed benefit of cause-related marketing approach to marketing is its
impact on reduction in the cost overhead of business. Berman et al., (1999) explained that
there is a growing evidence that cause-related marketing activities can lead to both risk and
cost reduction. They can both enhance efficiencies and reducing operating costs, pointing
out that 73 percent of business surveyed by PricewaterhouseCoopers indicated that one of
the top three reasons for becoming socially responsible was ‘cost savings’ (as cited in Taylor,
2003, p.51). In some cases, business benefit from tax exception or reduction on the basis of
some of their cause-related activities. A good example is the trade-in cause-related
marketing. Business benefit from reduce cost due to their ability to attract and retain
employees as less resources is committed to head hunting, recruiting and retaining talents.
Co-Branded Events, Competitions
Kinzey (2003) declares that a popular cause-related marketing technique is a co-branded
event. These includes runs, bike-a-thons, dinners, dance competitions and performances
(p.125). In this type of cause-related marketing the business provides the resources required
for marketing and operation of the event. “Promotional communication, event materials, and
even trophies or awards may be donated by the business” (Kinzey, 2003, p.125). In return
for its commitment, the business benefits from exposure to the attendees of the events as
socially responsible corporate citizen, improving its goodwill within the community. The
non-profit organization involve benefits by being the sole recipient of the proceeds from the
events, while the community benefits events organization through participation in
community relations building activity. Finally, cause-related marketing approaches creates
a perfect opportunity for the key stakeholders in a community to work together for the mutual
benefits of all concerned. And as the demands on business to increase its CSR commitments
grows, cause-related marketing will continue to grow.
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Chapter Four
Comparative Analysis and Conclusion
4.0 Comparative Analysis
The comparison between traditional and non-traditional marketing strategies reached in this
chapter of the research thesis are as a result of the collected secondary research data as used
in chapter three (page 19 – 39). This comparison enable the researcher to achieve the research
objective of investigating the traditional and non-traditional marketing strategies. The
achievement of the research thesis objective is made possible through the use of secondary
research data that enabled the researcher to answer the research objective questions. The
research thesis objective questions and how they are answered in this chapter of the research
thesis are as follows:
The erroneous believe that traditional and non-traditional marketing strategies are deployed
in opposition to each other or that they serve completely different purposes was dispelled by
this research. Firstly, the marketing mix of product, price, place and promotion are shared
similarity between the two marketing strategies albeit slight moderations. However, the
manner of application of the marketing mix differs, but are designed to result in the
achievement of the same objectives, that is, satisfying the needs and wants of consumers
while earning revenue for the businesses and thus profitability.
The traditional marketing strategies view of products as consisting of goods, services or idea.
These products are categorized into consumer and business products. The consumer products
are mass produced with the highest level of quality for the entire spectrum of ultimate
consumers. The business products on the other hand are also produced to satisfy variety of
business needs and wants. The business products can be produced to specification in certain
circumstances such as industrial supplies that must conform to certain technical
48
specifications. The non-traditional marketing strategies however, viewed products in a more
narrowed manner. Products/services are personalized in such a way that not only business
products get designed to their specifications. In non-traditional marketing strategies,
products are designed with the input of the consumers irrespective of whether they are the
ultimate consumer or the business customer. Examples of the personalized design of
products by non-traditional marketing strategies can be seen in the opportunities given by
Dell Computers for consumers to select the different parts they want in their computers.
The company then build the computer to the specification of the consumer, this marketing
strategy enables the non-traditional marketing companies to provide personalized, tailormade products to individual ultimate consumers as the traditional marketing strategy would
have done for business consumers. The non-traditional marketing strategy took full
advantage of the dynamism of marketing through the use of modern technology to give
consumers greater access to the way products communicated to them are produced.
In the same manner, traditional marketing strategies viewed price as the return given for
provision of products, services or ideas. Similarly, non-traditional marketing strategies view
of price also as a commercial exchange. This is where the similarities to price ends, nontraditional marketing strategies goes beyond the usual description of price as a ‘harvesting
of value’ to include the concept reaping of goodwill. Non-traditional marketing engage in
Cause marketing for the purposes of not receiving any commercial value such as price in its
traditional marketing sense, but as form of goodwill within the community. This form of
deriving non-commercial value is mostly referred to as ‘Corporate Social Responsibility’.
The price the non-traditional marketing organizations benefits extends to aforementioned
goodwill for its brand as well as attraction of the best employees.
49
The traditional marketing strategies view promotion as basically a tool for communicating
the manufacturers’ goods and services to the consumer through the use of advertising, public
relations, and marketing communication. The focus of these view of promotion is limited to
projecting the benefits of the product/service to the consumer with the sole aim of
influencing the consumers’ behaviour. This means the traditional marketing strategies is
more interested in creating awareness through information for the product/service as oppose
to seeking out consumers’ needs, that is, there is no avenue for feedback from the consumers.
The non-traditional marketing strategies also sees promotion as a tool of communicating the
products/services to the consumers. However, unlike the traditional marketing strategies, its
primary focus is on generating feedback from the consumers in order to be able to create a
more consumer specific products/services through the feedback they receive. The traditional
marketing strategies promotional communication is usually through the traditional
promotional tools of television, radio, newspapers and magazines. The non-traditional
marketing strategies took advantage of the modern communication venues provided by the
Internet, with its arrays of social media platforms providing excellent on-time, real time
feedback and the fastest promotion avenue ever known to man.
Finally, both traditional and non-traditional marketing strategies viewed distribution as a
critical factor in marketing process. The traditional marketing strategies is more focused on
the most effective and efficient means of products/service delivery. It tackles challenges of
distribution either through three levels of degrees, that is, intensive, selective or exclusive.
The non-traditional on the other hand, tackles distribution through use of the traditional
forms of distribution as well as providing the consumers the choice of deciding the form they
want.
50
The differences in the traditional and non-traditional strategies is not limited to their strategic
use of the marketing mix as detailed above. The fundamental and more significant is the
differences in the two marketing strategies approaches to deploying the above identified
marketing strategies. In investigating the traditional marketing approaches to marketing.
Firstly, the research finds that traditional marketing strategies approach the market through
transactional marketing approach. This approach is focused more on just making sales not
on attending to the customers’ needs or wants. This approach is fast losing effectiveness in
a competitive globalized market. Secondly, the strategy also use the market segmentation
approach. This approach attempts to at least recognize the differences in the market by
breaking the total market segments with similar needs and serve them on the basis of their
segment needs. The approach serve each of the segments of the total market through three
means, that is, undifferentiated, concentrated and differentiated targeting (Figure 7, page 24;
Figure 8, and Figure 9, page 25).
Finally, the research finds that traditional marketing also approached the market through,
relationship marketing approach. This enables the establishment, maintenance and
enhancement of an organizations relationship with its entire stakeholders and not just the
customers. Addressing the shortcomings of the other approaches through the recognition of
various stakeholders in modern marketing and developing effective means of reaching them.
The stakeholders were recognized and approached through customer markets; referral
markets; influences markets, recruitment markets; supplier/alliance markets; and internal
markets (Figure 10, page 26). The identification of these different markets on the basis of
their characteristics ensures that the markets are served more effectively and efficiently
through a sound knowledge of needs as uniquely different markets that requires different
products/services types and quality. As well as the appropriate distributive systems that
meets its requirements.
51
Non-traditional marketing strategies approached the marketing through three approaches
that adequately addresses the changes in society, the way and means of information and
communication changes. First, non-traditional marketing strategies approached the market
through personal marketing approach. Personal marketing seeks to involve the consumers
in the entire process of creating the products/services that they are to be supplied. This is
achieved through the involving of the consumers in the designing of the goods/services based
on the feedback on the specific needs of the markets. This approach addresses the specific
needs of individuals which is a light years ahead of traditional marketing approach of
addressing the needs of total markets through segmentation or relationship approach.
Second, non-traditional marketing uses place marketing approach. The function of this
approach is similar to distribution in traditional marketing mix. However, this approach is
focused on addressing the market for services, which does not involve the movement of
tangible products, but mainly services industry. This approach provided the virtual place for
the exchange of service for value. The explosion in the use of Internet banking, also known
as e-banking, and similar electronic platform services. As well as online shopping and egovernment are testaments to the effectiveness of this approach to marketing.
Third, non-traditional marketing also approached marketing through Cause-related
marketing approach which involves the building of relationship with a Cause or number of
Causes that benefits both the business objective for profit and the Cause objective of
addressing a particular need of society. The Cause-related marketing involves the use of
event or activity sponsorship; products and services sales; trade-in; and other related
avenues. It grants the business organizations a golden opportunity to generate goodwill as
well as revenue for its brands while at the same time ensuring that some critical needs of
society is satisfied, a fact that seems to be lost on the traditional approaches to marketing.
52
4.1 Conclusion
The aim of this research thesis was to investigate the dynamism inherent in marketing as a
concept. To achieve this aim, the researcher focused on traditional and non-traditional
strategies applied by organizations to communicate their products/services to the consumers.
The investigation into traditional and non-traditional marketing strategies enabled the
researcher to identify the advantages and disadvantages of the two strategies through a
concentrated focus on their approaches to marketing products/services to the consumers. A
comparison of the collected research data in respect of these approaches were then
comparatively analysed as seen above. The result of the comparative analysis enabled the
researcher to achieve the research objective by providing the answers to the research
objective questions. The significance of the answers this research provided to the research
questions is the comprehensive understanding the similarities, differences and the impact of
the concepts on the marketing of goods and services.
The first research objective question of what are the attributes of the two marketing
strategies? The research reveals that the main attribute of traditional marketing strategies
and approaches more suitable for the manufacturing industry where the majority of the
products are tangible goods. While the non-traditional marketing strategies and approaches
are geared more towards the services industry, where the majority of the products are
intangible. The second research objective question of what are the merits and demerits
inherent in each of the strategies? The answer to this research question shows that both
strategies and approaches have their merits and demerits. Therefore neither the traditional
nor the non-traditional has any major advantage over the other except as it concern
communications. The main demerit of traditional marketing strategies and approaches is the
limitation of the marketing to involve instant immediate feedback that enables the designing
of products and services tailored to the specific needs of the consumers.
53
The non-traditional marketing strategies and approaches on the other hand have these
attributes through the effective and efficient use of information and telecommunication
technology of today’s society, that is, the Internet and all its various platforms to market its
products and services. The advantage of this ability while undeniable, it does have its
limitations. There are still a significant number of products and services that cannot be rely
solely on the Internet platforms, thus making the traditional marketing strategies and
approaches indispensable.
The final research objective question of whether it is advisable for business organizations to
implement one of either or combine both strategies in marketing their products/services in
a technological driven global economy? As already mentioned above, the increasing
influence of non-traditional marketing strategies and approaches does not diminish the
relevance of the traditional marketing strategies and approaches but rather complements it.
In the light of this assertion, any business organization determined to maintain, increase or
expand its competitiveness must strive to implement both marketing strategies and
approaches in its marketing practices.
54
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