ASSIGNMENT: RELEVANCE OF NEEDS, WANTS AND DEMAND AS A CORE CONCEPT IN MARKETING AND HOW TO CREATE MARKET DEMAND FOR FMCG MANUFACTURING COMPANY IN NAIROBI

Question 1

An FMCG company is a company that deals with fast-moving consumer goods. In Nairobi, there are so many FMCG companies like Coca-Cola. Consumers of the products and services produced by companies have needs, wants, and demands. Needs are the basic requirements that a consumer uses to acquire benefits. Wants, on the other hand, are luxurious goods or services that a consumer receives for self-satisfaction while demand is the ability and willingness to purchase products or services. The three are essential in marketing.

Relevance of needs, wants and demands in marketing

Marketing is the ability to create, communicate and deliver value of goods or/and services to the customers and maintain consumer’s relationships for an extended period. Demands, needs, and wants are interrelated. Moreover, they are essential tools when making strategic decisions. Their relevance in marketing is as follows:

1. To make marketers aware of their target customers and markets

Wants demands and needs help a firm to know who are its significant users, and thus the organization can position itself better to focus on the group and satisfy their needs. Therefore, it is a factor to motivate specialization in a specific area to meet the identified needs fully. For instance, Coca-Cola knows its target market is teenagers.

1. To predict sales of goods/services in a specific target market

The rate of the demand and the measure of the need for consumers to use a product is a vital point to the firm to predict the amount of sales they will get from that particular good. Therefore, marketers will need to study their customers to come up with the approximate figures and rates at which the sales will occur.

1. To be conversant with the customer’s willingness to buy the products
   

Different consumers have different tastes. Their desire to purchase and use a product or service is dependent on the satisfaction of their demand. Some consumers also consider cost, reliability, and availability of the goods. As a result, the client’s needs and desires of clients help marketers to know the tendencies of their clients to consume their products.

1. To create strategic decisions and implement them.

Once a firm knows its market, it can successfully strategize on its next step. For instance, it may decide to improve their product or add additional products and services to widen its market. Coca-cola, for example, invented the coca-cola with zero sugar to satisfy the needs of its diabetic patients.

1. To maintain the company’s viability.
   

Obtaining consumer’s needs, wants and demand is vital for a company’s future viability. The mastering of what a consumer demands, wants, and needs makes a company marketable. Consumers will go for its products because they feel that it satisfies their quest. As a result, the firm will thrive in the market and maintain its viability.

1. To deal with monotonous products.
   

Demand and wants of customers help to reveal their preference for a good or service. There are many monotonous products in the market. The three factors are critical in that they favor the sales of some products while others are forced out of the market, and their firms have to re-strategize.

1. To maximize sales and profits of the company’s goods/services.

The demand for a product creates a particular popularity of the product, thus increasing its sale. The sales, in turn, lead to profits in a company

Creating market demand for my company

Various ways can be used to create market demand for goods and services of Coca Cola Company. They include;

1. Understanding of the main objective of marketing of the product.
   

Marketing provides a platform for identifying, satisfying, and retaining customers. It is enabled by creating a competitive advantage, that is, the ability to consistently convince consumers that what the company offers will satisfy their particular need or want thus they may be able to purchase the goods without considering their substitutes.

1. Establishing fast, responsive communication.
   

It is enabled by establishing a suitable communication medium to be used by the company to all stakeholders and creating a flexible communication schedule. It is essential to ensure there is effective communication with all stakeholders, that is, internal and external stakeholders, thus enhancing a strong relationship with them. Marketing uses different yet compatible communication strategies based on the target audience.

1. Establishing effective distribution strategy

It is enabled by understanding the utility a consumer expects to receive from an excellent or service being offered by the company and the company’s ability to avail the goods to consumers by either direct or indirect means with intermediaries.

1. Creating branded entertainment.

It will be able to bring the company’s products’ value to life. It also enables more opportunities to build awareness through social sharing and, as a marketer, can make an affinity for the brand of the company’s products.

1. Research on the needs of consumers.
   

Ability to identify consumer’s needs by identifying a significant issue facing the consumers and how they are searching for solutions, understanding what matters to the company’s potential customers, analyzing various customer’s feedbacks, evaluating substitute goods, and identifying the customer’s purchase decisions and post-purchase behavior.

1. Establishing a suitable advertisement platform.
   

Advertisement is essential in preventing or reducing post-purchase disparity while promoting popularity and differentiation from substitute products and positive attributes of goods and services offered by the company.

1. Adapting rapidly to dynamic business environment (macro and microenvironment).
   

There is a need to ensure a continuous change due to a continually changing business environment that changes customer preferences and attitudes. There is a need to ensure consistent attention to the environment. This will enable the company to efficiently market in areas with the highest customer potential, thus increase its profits and attaining its strategic goals.

1. Harness user-generated content.
   

It enabled by creating a company’s blog that is accessible to its stakeholders. This allows the stakeholders to write their comments on the blog on various companies’ operations. In turn, the company can engage with the stakeholders, for example, sharing of free company’s reports and eBooks and complimenting the people who mention the company on twitter. Moreover, the company can build a culture of trust with its audience.

1. Positioning of the company’s product in the competitive market.

It is enabled by understanding how to exploit the product’s brand and company’s resources effectively to create a positive brand reputation and configuring the products’ mix, thus ensuring each good or service of the company compliments each other.

1. Use of technology to build trust

Technology has enabled us to bring people worldwide together without meeting in person. It has continued to evolve; thus, how consumers get information is changing with it, for example, customers talking to each other about the company’s product. There is a need to build connections with all stakeholders through technology.

1. Establishing an effective pricing strategy.

Examples of pricing strategies include value-based pricing, cost-plus pricing, penetrating pricing, and skimming. That is, the one that equalizes the price floor and price ceiling and considers the customer’s perceived value.

1. Creative packaging of the company’s products
   

There is a need for an attractive packaging of the products by ensuring uniqueness and display of relevant value proposition, thus to enable the products to stand out and grab the customers’ attention to purchase the products.

In conclusion, as a marketer to continuously boost the company’s goods and services, there is a need always to consider both product and non-product factors when coming up with an effective marketing strategy. Moreover, all employees need to be empowered to represent the company since they are the most significant marketing resources.

Question 2

A macro-environment is the external business environment that affects a firm’s relations with customers and competitors in the market.  Some factors influence it like demography, legal matters, politics, ecology, social and culture, and technology. One of the major companies in Kenya, whose macro-environment affects its marketing practices is Safaricom PLC. It is the largest mobile network company in the country. As a result, its macro-environment faces stiff competition from its competitors like Telkom and Airtel. Therefore, Safaricom has to strategize its marketing practices to continue leading in the industry. The macro-economic factors considered are economic, social and cultural, technological, and environmental. (Claessens, 2015)

1. Economic factors

They affect the decision process of the firm’s customers and the level of production of the company. Some economic factors which influence the marketing practices of a firm include interest rates, inflation, taxes, demand, recession, supply and exchange rates. Thus the factors affect the marketing practices of various organizations.

For instance, in Kenya, a company like Safaricom Limited has left Kenyans with no other choice other than its services. The company has numerous marketing strategies that make Kenyans trust and opt for the network. For example, it has reduced prices of the call rates, awards free minutes,s also called the storo bonus, airtime and data when customers purchase their products (Alushula, 2019). It has also reduced the costs of its Neon smartphones to less than Ksh 5000. They are also using celebrity citizens, for example,  Eliud Kipchoge and Jalang’o to attract customers and localizing content, for instance, the advertisement of a man using storo bonus to purchase locusts from a friend. These market practices contribute to their success and in increasing the number of subscribers to their network.

Image of Eliud Kipchoge in celebrity advertising

2. Technological factors

They focus on ability and skills that are used in the production and delivery of services and material and technology. Factors influencing the technological capacity of a business include automation, speed, wireless charging, security, 3D technology, and internet connectivity.

Nearly, every Kenyan uses the Safaricom network, especially Mpesa, which is the biggest asset to Safaricom. Research shows that the corporation has received about 84.44 billion from Mpesa services in its financial year ending March 2020. Similarly, the company has upgraded to 4G, and most of its customers are using the improved internet connectivity. Some even enjoy 5G.  The company has also helped its customers to secure their mobile money pins, for instance, the ‘Sauti Yako Pin Yako,’ which used the famous Njugush to promote it (Ndonga, 2018).

Image of Safaricom Jitambulishe, mobile money secure pin.

3. Environmental forces

It includes the natural and physical part of the environment, which may affect different resources, for instance, agricultural activities and forestry. The forces include the availability of both natural and artificial resources, weather, and pollution, policies regarding the environment, climate change, and species.

The ban on usage of plastic papers as the country sought a green environment has been a significant blow to nearly all organizations. Almost all the companies in Kenya used plastic bags in their packaging and production. Safaricom is one of the companies. As a result, it was forced to look for more environmentally friendly packaging for its products. Currently, it uses the eco-friendly carry bags to replace the plastic bags.

The eco-friendly bag Safaricom uses to package its products.

4. Social and cultural forces

These factors drive the attitude of a community towards the consumption of a product. The business will benefit from customers use of the product. Some forces here include family size, religion, cultural beliefs, social classes, health, family structures, and population increase, rates of immigration and emigration, and health issues, among others.

Safaricom has wowed Kenyans with its numerous developments and marketing practices. The corporation has partnered with individuals, communities, and NGOs to provide education scholarships like the Mpesa School Foundation, access to health like the m-tiba, empowerment like the Chapa Dimba Na Safaricom to support football tournaments and other beneficiary programs like arts and culture.

Image of the Chapa Dimba Na Safaricom supporting soccer players.

In conclusion, Safaricom Limited is a big corporation in Kenya that has had numerous successes and developments in the last five years. Its macro-environment influences its operations a lot. The factors discussed in the paper are technological, social and cultural, environmental, and economical. Their impact has made Safaricom reduce call rates, invent m-tiba, use eco-friendly packages, support the youth and needy and find a secure way to protect mobile money, among others.

References

Alexa blog, Effective Marketing strategies, 2020, Alexa, Lydia Roth, https://blog.alexa.com/best

Alushula, P. (2019).  Safaricom now cuts airtime costs by 33 percent. Business Daily. https://www.businessdailyafrica.com/news/Safaricom-cuts-airtime-costs-by-33pc/539546-5322918-udafyaz/index.html

Claessens, M. (2015). THE MACRO ENVIRONMENT – SIX FORCES IN THE ENVIRONMENT OF A BUSINESS. Marketing- insider. https://marketing-insider.eu/macro-environment/

Ndonga, E (2018). Consumer Education: How to Avoid Being Conned By Fraudsters both Online and On Mobile. https://www.potentash.com/2018/09/05/avoid-conned-fraudsters-jitambulishe-safaricom/

Trivikaram, S. (2017). Customer Needs, Wants and Demands and Strategic Decision making, 34307.