The Birth of Marketing Ideas

In 1914, Butler formulated marketing as a management discipline. Butler (1914, p. 1, 1917, p. 3) was the sales manager of the Protec and Gamble Company. Butler defines; marketing is a plan behind a campaign or promotion series. Before that, experts did not know marketing, only knew production and sales / distribution. This distribution is an intermediary task, covering risk, transportation of goods, financing, sales, assembly, selection, and shipping to the next buyer.

Butler makes a new definition because based on experience, there are many problems that need to be resolved before making advertisements in the media and sending salesmen to the streets. Companies need to determine decisions about products, distribution channels or how to reach the desired market. (Kazuo Usui, 2008, Development of Marketing Management, Ashgate).

Butler’s idea that incorporating product planning as part of marketing management or plans behind the campaign was a remarkable idea in his day. The idea separates marketing management from sales and distribution management. Marketing has a new meaning. At that time, production decisions were part of production management, not part of marketing that was still synonymous with distribution.

Until now there are still many people who equate marketing as a sales promotion and advertising. Indeed from the outside, marketing work that looks invisible is promotion, while its contribution to production planning is not visible, even though it is very important to adjust the product and market needs.

Butler formulated the marketing work in product policy is to ensure that the product achieves technical quality in accordance with consumer preferences, before the product is launched into the market. Before becoming part of marketing, production does not think about product conformity with consumer preferences.

Bartel (1962, p. 213) considered Bartel’s idea to participate in shaping what is now called the marketing mix. Butler emphasized the importance of separating the planning and implementation functions not only in personal sales promotion and advertising but also in marketing activities in a whole.

The great depression era (1929-1930) pressured the print media business finances. Media distribution has dropped dramatically; print media income from advertising has declined.

Entrepreneurs turn to advertise on radio. Radio is a famous entertainment center. Entrepreneurs sponsor radio plays. Radio plays are growing rapidly.

Amid advertising costs slumping while advertising competition is also tight, advertising costs are no longer an option; a breakthrough has emerged to attract viewers’ attention by differentiating. Advertisers focus on how products differ from competitors.

In 1933, Edward Chamberlin described the practice of differentiation in the form of theory. This theory states that consumers have a variety of preferences for products available in the same industry. Price is not the only consideration. This theory adds new treasures, considering that the theory that is commonly used is price is the balance between demand and supply. Consumers choose the lowest price and achieve a balance between demand and supply.

This conceptual contribution from Edward Chamberlin adds a new dimension and new traits in the marketing mix. Products do not have to be cheaper or superior, to be able to compete. More different and according to special group needs also allows the product that suit to the market.

Viral as Millennium Marketing Concept

The problem with marketing permissions is, how to get the first attention and ask permission to establish further relationships. The trick is not to buy ads that interrupt. The best way to build a business is to help customers tell about your product. Today, the majority of people are connected to the internet and easy to spread ideas in words, pictures and videos. The number of early users who are enthusiastic about new ideas is increasing in the age of information technology in this grasp.

What are the characteristics of ideas that are easily spread? Everett Rodgers studied more than 500 cases of how ideas were adopted by many people and organizations. He identified the characteristics.

First, relative advantage. The idea is easy to perceive better than the standard. The greater the superiority relative to the common ways, the easier it is to be accepted and spread.

Second, compatibility. Match your experience and expertise. The more suitable the experience and expertise available, the easier it is for people to understand new ideas.

Third, simplicity. The easier it is to digest, the easier it is to use, the easier it is to accept.

Fourth, it’s easy to try. The easier people use ideas, the easier it is to accept new ideas.

Fifth, it’s easy to see results. The more visible results if the idea is used, the easier it is to accept and spread the idea.

Segmentation Methods In Millennium Era

Segmentation methods are based on geographical location, demographic or demographic identity, psychographic / description of interests, and behavior-based segmentation.

Geographical segmentation can be done by opening a map. Maps can trigger insight that climatic conditions can trigger uniform needs in geographical locations. For example, hot areas need fans and air conditioning. Maps also help understand competitors’ control ranges. Where is the area of ‚Äč‚Äčcompetition on one item that is tight, which area has not been touched by competitors.

Facebook ads or Facebook Ads, provide tools to share viewers based on that geographical location.

Demographic or demographic identity

Demographics talk about the total population, the population per age group, the population in each sex. Demographics also include family size, income, and income, level of education, religion, race, generation, nationality, and social class. For marketers the data needed is data on the number and distribution of population per sex and age. In addition, data on industrial development is needed to estimate purchasing power.

The data inspires marketers about interest. How to?

Age

Age changes usually have a strong relationship with changes in tastes and changes in the type of goods needed. Suppose small children need a small T-shirt, sweet toothpaste with cute packing, toys, candy and so on. While in their teens they no longer need such items. Teenagers need acne medication, bigger shirts, toothpaste for adults, mountain bikes, textbooks and so on.

Life Stages

Human life can be distinguished according to the stages of life. Each stage has different tasks and needs. School age has learning tasks. Pre-marital working age has the task of finding a mate and preparing a marriage. The new bride has the task of preparing the house. Even though sometimes people have a house before the new bride. New couples have children who have the task of caring for children. It is a stage of life that has its own tasks. Each task has consumption needs. If the new bride is in charge of preparing the house, it means that marketers have the opportunity to offer housing products according to their budget.

Gender

Men and women have different attitudes and interests. The type of clothes needed is different. The culture of a society usually divides the different roles between men and women. There are people who authorize women to buy self-care items, such as soap, shampoo, toothpaste. Sometimes changes can occur, for example, many men begin to play that role. So that the ad adapts itself to the tendency of the sex of the target market.

Income

Different income also usually has different tastes. There are items that can only be reached by the price of people with high income. Examples of luxury items such as luxury cars, luxury homes, luxury cellphones, luxury cameras and so on.

Generation

Each generation is generally influenced by the situation and spirit of the era and the common mode of communication. The division of generations in Indonesia, with millennial terms, for example, is an imitation of the division of generations in America. Indeed there are similarities between America and Indonesia, for example baby boomers. The baby boom after the second world war occurred in both the United States and Indonesia, including in other countries. Another equation is millennial generation. The millennial generation of these two countries is the same as using mobile phones along with the internet as a mode of communication.

Marketers in America usually divide generations in American society into several parts, namely, the Silent Generation (born between 1925-1945), baby boomers (born 1946-1964), generation X (born 1964-1978), and millennial (born 1977-1994 ) The silent generation does not mean a silent generation. They also talked a lot to their young people. It is naming the marketer’s point of view today. For today’s marketers, they are a generation that is old and senior, their task is to become grandfather for their grandchildren.

Competition Landscape

When choosing a market segment, not only is the potential considered. Also consider threats. Sometimes it must be avoided, by looking for other segments. Even so, the easiest segment has threats. Michael E Porter formulated threat factors as well as generic competitive strategies, or outlines. Threats are dynamic, so the strategy is effective so that it needs to develop. The following threats in a business field.

The threat of hard competition.

Hard competition is not always caused by market attractiveness, for example large demand and purchasing power. It could also be because companies that enter the market are unable to get out of the business. Large investments have been made. Do not have the skills to strive in other fields. Such conditions encourage price wars and advertising wars. Profits shrink and costs increase.

The threat of newcomers

The most interesting market segment is that if newcomers find it difficult to enter and the old players are easy to get out. The terms are high entry barrier and low exit barrier. So that new players will have difficulty entering a business field.

That situation can change. The existence of the internet can change this, for example the circulation of rotiboy recipes, allowing new players in the same bread field. Thus, Rotiboy can no longer enjoy monopoly as before.

If entry barrier and exit barrier are high, profits may be high, if between players form a price agreement. But in such situations, players can compete hard, because they have no other choice.

If the entry barrier is low and the exit barrier is high, competition will tend to be tight. More and more players, there are no exits. Production exceeding market capacity can occur and prices fall.

Threats from substitute or substitute products

In this era of digital technology, more and more new innovations, substitute products often appear. Telecommunication shops are replaced by symbian phones. Symbian mobile replaced Android or Apple smartphone. It can also happen that these substitute products are cheaper and easier, so that they reduce prices and profits.

Threats from the bargaining power of buyers

A market segment is less attractive if the buyer has large and increasing bargaining power. Suppose that the bargaining power of national minimarket at suppliers will tend to be large along with the amount of turnover. The national minimarket erodes competitors, so that suppliers increasingly lose alternative buyers, then with a large turnover can reduce prices. The bargaining power of buyers increases if the product does not have a differentiator or an easy buyer switches to another supplier with risk and low cost. The best defense is to arrange good and inimitable products, so buyers don’t move.

Threats from the size of the supplier’s bargaining power

Market segments are less attractive if suppliers can easily increase prices or reduce the amount of goods sold. The strength of suppliers is strong if goods are scarce and there are no substitute or substitute materials, and it is difficult to change suppliers. The best defense is to build mutually beneficial relationships or use a variety of sources.

These are the factors that influence the competitive climate. Each market segment has a different level of competition based on its industrial structure. With that insight, it is better to choose an industry with a low level of competition and not increasing. Even so, in general every business sector is always in competition.