Meaning of Trend and Mega Trend: some momentum and durability

Trend

A trend is a collection or sequence of events that has some momentum and durability. Generally, a trend is last for two to five years. Marketers can find many opportunities by identifying trends. The trend of smoking habits in teenager helps the growth of the tobacco industry. The trend of buying mobile phones is helping Nepal Telecom to expand its transactions. Generally, the trends can be seen mainly in fashionable items like in dress, electronics, beauty products, etc. It helps manufacturers and marketers to design the products and services according to the emerging trends.

According to Faith Popcorn –“A trend has longevity, is observable across several market areas and consumer activities, and is consistent with other significant indicators occurring or emerging at the same time.”

Trend reveals the shape of the future. It is direction of events in the changing environment. A trend is usually active for a period of two to five years.

Following are some of the glaring examples of marketing trends in Nepal:

• Women’s participation in different NGO’s for raising against social injustice and crime.
• The demand for self-service
• The use of miniskirt
• Digital watches
• Getting admission in MBBS classes by donating a huge amount of money
• Sending children for education to foreign countries etc.

Mega Trend

Mega trends are direction or sequence of events in the environmental forces that are of longer duration and they are shown because of political, economic, social, and technological changes. In other words, mega trends are large social, economic, political and technological changes that are slow to form once in place, they influence us for some time-between seven and ten year, or longer.

Some example of mega trends are:

• The booming global economy
• A renaissance in the arts
• The emergence of free-market socialism
• Global lifestyles and cultural nationalism
• The privatization of the welfare state
• The rise of the Pacific Rim
• The decade of women in leadership
• The age of biology
• The religious revival of the new millennium
• The triumph of the individual

There are some differences between a trend and mega trends. Mega trends are larger than trends. Trend is stable for two to five years whereas mega trends are relatively stable for almost a decade. Mega trend throws a greater influence on marketing than a trend.

The examples of mega trends visible in Nepal are as follow:

• Cultural invasion from the western countries
• Privatization of state owned enterprises
• Liberalization and globalization
• Increasing use of information technology
• Westernization of life styles
• Open university system, etc.

These trends and mega trends create marketing opportunities for the concerned marketing firms. But the firm should develop new products or marketing programs in line with strong trends and mega trends rather than opposing them.

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Environmental Scanning and Methods of Environment Scanning

Environmental Scanning

Scanning is generally defined as acquiring information. In the context of marketing programs and plan environmental scanning involves monitoring changes and developments in the marketing environment that have potential impact on the marketing activities. It is essential for formulating plans.

According to Richard Steers –“Environmental scanning involves monitoring changes and developments in the environment that have potential impact on the organization.”

In conclusion, environmental scanning is the process by which marketing management monitor its relevant environment to identify opportunities and threats affecting the business. Environmental scanning should be done to bring controllable environment in favor of the organization and plans.

Methods of Environmental Scanning

Environmental scanning is absolutely necessary for strategy formulation. As the environment is complex environmental scanning should be cautiously dealt. For the environmental scanning, some of following methods can be used.

1. Extrapolation method: These methods require information from the past to explore the future. The future is assumed to be some function of the past. There are a variety of extrapolation methods, including trend analysis, forecasting and regression analysis.
2. Historical analogy: When past data cannot be effectively used to analyze an environmental trend, the trend is studied by establishing historical parallels with other trends. This method assumes that sufficient information is available from the other trend. Turing points in the progression become guideposts for predicting the behaviors of the trend being studied.
3. Intuitive reasoning: This method calls for a rational intuition by the scanner. Intuitive thinking requires free thinking unconstrained by past experience and personal biases.
4. Scenario building: This procedure involves constructing a time-ordered sequence of events that have a logical cause-and-effect relationship to one another. The resulting forecast is based on interrelationships among the events.
5. Cross-impact matrix: When two different trends in the environment point to two conflicting futures, the trends are studied to see their potential impact on each other.
6. Morphological analysis: This method is used to identify all possible ways to achieve an objective. It can be used to anticipate and to develop ideal patterns for achieving desired objectives.
7. Network methods: Two types of network methods are popular: Contingency Trees and Relevance Trees.
1. Contingency Tree: A contingency tree is a graphic display of logical relationships among environmental trends that focuses on branch points, at which several alternate outcomes are possible.
2. Relevance tree: A relevance tree is a logical network similar to a contingency tree, but assigning degrees of importance to various environmental trends with reference an outcome.
8. Missing line approach: This approach combines morphological analysis and the network method. Many developments and innovations that appear promising may be hindered because something is missing. Under such circumstances this unique may be used to study new trends to see if they reveal the missing links.
9. Model building: This method is similar to network methods but relies more on developing mathematical representations of the environmental phenomena in question. Simulations are good examples of model building techniques.
10. Delphi technique: The Delphi technique is the systematic solicitation of experts opinion in varying stages, using feedback to develop new forecasts.

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Major Tasks of Marketing for the Success in Marketing

Marketing management has to do a set of tasks necessary for success in marketing. The basic tasks of marketing are as follows:

1. Develop marketing strategies and plans

The first and foremost tasks of marketing are to develop marketing strategies and plans. They consist of following tasks:

• Determining the strategies consist of identifying the marketing objectives or goals of the organization, their determination, and modification as well as determination of specific resources to achieve objectives or goals set. They are concerned with product, price, channel, promotion, competitors, etc.
• Marketing plans involve mangers by which the marketing goals can be achieved. They involve deciding policy, strategy, tactics, procedures, rules and regulations and marketing programs, budgets and schedules to achieve the long-term as well as short-term goals.
• Marketing strategies and plans allocate economic, physical and managerial resources of the organization for future.
• They assess and analyze strength and weakness, opportunities and threats (SWOT).

Related Topic:

Development of the Marketing Concept

2. Creating marketing information system

It is concerned with understanding what is happening inside and outside the company. Simply there are four components of marketing information. They are Internal Record System, Marketing Intelligence System, Marketing Research and Decision Support System.

3. Build customer relationship

Marketing needs to build customer relationship. Building customer relationship is a very effective way to increase satisfaction and sustain in market. The relationships can be built by using the emerging concepts such as relationship marketing and customer relationship management.

4. Build strong brands

Marketing needs to build strong brand. It is also a major task of marketing. Strong brand helps in promotion, value creating, image development, product positioning, brand loyalty and expansion of product lines.

5. Determine marketing mix

Marketing needs to create and determine and effective marketing mix to satisfy needs of target markets. It is the combination of four inputs such as the product, the price, the place and the promotional activities. Different marketing mix is essential for different groups of customers.

6. Deliver value

Marketing needs to deliver value to the target customers. Value is the ratio between what the customers pay and what they receive. Marketing must determine how to properly deliver the value embodied by the products and services to the target market. Customers’ product choice is guided by value. So, marketing should add maximum value to the customers.

7. Communicate value

Marketing needs to communicate value to target markets. It has to develop an integrated marketing communication program that maximizes the individual and collective contribution of all communication activities by which firm attempts to inform, persuade, remain and reassure consumers about the brands. For this, marketing has to set up mass communication programs consisting of advertising, personal selling, sales promotion, public relations and publicity.

8. Create long-term growth

Marketing must take a long-term view of its products and brands and how its profits should be grown. Based on its positioning, it must initiate new-product development, testing and launching.

9. Implementation and control

Marketing must organize its marketing resources and implement and control the marketing plans. It must build a marketing organization that is capable of implementing marketing plans and strategies. Similarly, it must find out any deviations between achieved performances against planned or budgeted performance using predetermined standards. It provides feedback about marketing planning and strategies.

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Customer Profitability Analysis for Corporate Growth

Customer Profitability

Smart marketers should always seek to establish strong relationship with profitable customers. Marketers have to bear so many costs and efforts for attracting, dealing and retaining customers. All such kinds of costs should be recovered for profitability. They should measure the profitability. They should focus on the lifetime stream of revenue and costs. In this regard, customer profitability is the difference between the revenues earned from and the costs associated with the customer relationship in a specified period.

Customer profitability is the result of applying the business concept of profit to a customer relationship. Measuring the profitability of a firm’s customers or customer groups can deliver useful business insights.

Customer Profitability Analysis

Marketers need to analyze customer profitability for corporate growth. A useful type of profitability analysis can be presented in the following figure:

Customer-Product Profitability Analysis

In above figure, columns represent customers and rows represent products. Each cell contains a symbol for the profitability of selling that product to that customer.

• Customer 1: S/he is very profitable customer. S/he buys three profit making products. (P1, P2 and P4)
• Customer 2: S/he yields a picture of mixed profitability. S/he buys one profitable product (P1) and one unprofitable product (P3).
• Customer 3: S/he is losing customer because s/he buys one profitable product (P1) and two unprofitable products (P3 and P4).

Here, customer 2 and customer 3 are unprofitable customers for a company. The company can do the following activities about them.

• It can raise the price of its less profitable products or eliminate them.
• It can try to sell them its profit-making products.

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