Sh3050 Unit 4
ASSIGNMENT COVER SHEET
Name:
Marinel De Abreu
Address:
Tecom Dubai
Post code / Zip:
36050
Telephone No:
00971503509140
Email Address:
marineldeabreu@yahoo.co.uk
Date:
15 January 2015
Course Name:
HND Business & Human Resource
Tutor Name:
Robert Smith
Assignment Name:
Marketing Unit 4
Understanding the concept and process of Marketing
Explain the various elements of the Marketing Process
Marketing is an essential part to the Organisations survival as we live in a customer driven environment that is possessed with endless aggressive competition. Thus the marketing process and effectiveness is important.
There are many definitions to define marketing but it is essentially the creation, communication and …show more content…
delivery of an essential product or service that will serve a purpose and fulfil a need of society as well as generate a profit and establish and maintain the existence of the Organisation who strives to satisfy the customers endless needs with innovation and creativity.
The only means of survival in a fiercely competitive environment is to be Market Orientated. Establishing the needs of a customer and working backwards to create a product which will meet or generate this need in the future, this is essentially known as Marketing Orientation. This brings us to the initial step of the marketing process which is Research.
Marketing Research has given rise to organisations establishing a marketing and Research Department. This enables organisations to keep ahead of trends thus stay ahead of competitors. This also enables the Organisation to realise their market segment through market segmentation. Aiming your marketing efforts towards the right market will not only minimise the risk of incorrect resource allocation, but will also save you time, energy and generate revenue. Segmentation of the market has various other benefits: Product differentiation, Build awareness for potential future marketing campaign effectiveness and as mentioned, effectiveness pf resource allocation.
Targeting the right Market segment requires a suitable and unique Marketing mix. We look more into depth the 4 P’s which are the components of an aggressive or effective marketing campaign:
PRODUCT: the design of the product, its function and benefits. Also, the product range in terms of how many segments will we target within this range and how many choices will be available.
PRICE: cost (variable and fixed costs)of manufacturing, marketing and distributing this product. Competitors’ price will also be a determining factor, Consumer perception will affect the asking price and the marketing conditions (are the material available or hard to get, is the economic factors which may affect this products price i.e. the price of oil/petrol).
PLACE: Having the product available when and where it is required so to meet customer demand and accessibility.
PROMOTIONAL: How to communicate the product to consumers to make them aware of its existence, Advertising, personal selling, public relations, direct marketing, Sales Promotion or word of mouth or a combination of all of these.
When compiling a strategy, one needs to evaluate the SWOT Analysis. What are the internal Strength and weaknesses of the Organisation and what are the external opportunities or threats that the organisation may face or are facing.
The marketing Strategy must be align with the Corporate Strategy, the organisations mission statement and objectives must be considered when formulating individual strategies for each interdependent department.
The marketing Strategy must have 3 components aligned with the corporate goals. It must be efficient, effective (is it communicating the right message and achieving sales target/company revenue) and dynamic (is it adaptable so as to change along with the corporate goals when imminent change is required).
Once the statement of objectives for the marketing department is formulated; which entails product, price, place and promotion; the marketing manager and corporate manager will have to undertake a situation analyse. This is the study of the market trend in the past and current which can predict future trends in the market. It also includes a close study of the competition and various market segments. A thorough in-depth analyse of internal strength and weakness, which may require product innovation, re-design or restructuring of the organisation, may be required.
This this brings as into Planning; what is the mission Statement of the organisation and objective of this marketing campaign. Setting the Sales Target, Marketing budget must be set and the allocation of resources such as staff salary and training, above the line expenditure (advertising) and below the line expenditure (in-store promotions, samples), and price decisions. In all marketing efforts, Sales forecasting also plays an important role. It’s an evaluation of sales trends and its importance plays a role in calculation the overall expenditure of the organisation as all the departments are invariably interlinked. Finance of the marketing strategy and campaign is affected by interest rates, inventory costs of the production and the cost of resources such as staff as well and environmental and technological changes. Forecasting can be categorised into different techniques such as time series (relating to past and current trends to predict future trends), Casual technique which is a numerical analysis of sales trends or qualitative technique which falls into explorative and normative (this is the study of consumer behaviour and desired state).
Tactics and management of marketing efforts will determine success of the strategy for if it is closely managed, it enables managers to rectify problems or short-comings or to redirect the course of the strategy, re-evaluate the strategy to get desired results before it’s too late.
Evaluate the benefits and costs of a marketing orientation for a selected organisation
Emirates Airlines prides itself on being a market/customer focused orientated organisation. This is evident in their mission statement,’ We strive to deliver the world’s best inflight service’. They have a strategic edge with product (having what the customer wants which is safety), at the right time (covering almost all areas of the globe making it accessible to virtually everyone) and offering a price which customers don’t mind paying (due to differentiating itself).
Emirates airlines has partnered with Qantas, another global leader in the aust-asia area, and by introducing a loyalty programme that promises reward and advantages for loyal customers.
It has also undertaken various charitable projects under its wings as a social responsibility movement towards its biggest markets (Africa and India). This is an effort towards relationship marketing, working towards retaining existing customers and encourage cross selling through family programmes or word-of-mouth from those already satisfied customers. Retaining customers who have already established a relationship with the company, will go through a life cycle, these customers are less sensitive to price change, are willing to try its share-code partners or companies who are in alliance with Emirates, and are less costly to service then acquiring new …show more content…
customers.
Emirates its always trying to stay ahead of its trend, being the first to fly the Airbus 380, being the first to introduce an entertainment system that has over 100 new movie releases and in addition various other channels (responding to customer wants).
Although we all know that it costs less to retain existing customers, it also incurs costs to keep these customers satisfied by offering value added services such as Emirates airlines free chauffer drive if you travel business or first class, the premium airport lounge across the globe exclusive to emirates customers and other value-added benefits. But these are all necessary in retaining the customer’s interest and maintaining a competitive advantage. The customers perception of buying this service is what value is in it for me and what are the benefits that outweighs the sacrifice of obtaining and paying the price. These all play a psychological importance on the customer’s decision on whether to remain with a certain service provider or use its competitor. Having a competitive edge and being customer centric is the aim of the game but all is not gain with any pain. There are costs to incur; use of newest technology, marketing intelligence, after sales service and constant modification for innovation is all at a cost.
Marketing Orientation has an overall impact on the profitability of the organisation, sales growth, market shares in the market place, new product launch success and perceptions of the customers, stakeholders and suppliers. The most challenging aspect of a market orientated organisation is to keep costs low, still provide an exceptional service and reward programme but be ahead of the game so as to win a great portion of the market share and still make desirable revenue and profit.
Section 2
Understanding and using the concept of segmentation, targeting and positioning
Show Macro and Micro environmental factors which influence Marketing decisions
The environment in which the organisation operates has an impact on the success or failure of its operation. The Organisation marketing environment consists of a Micro environment and a macro environment. Let’s take a look at how each has a direct impact on the Organisation:
The Micro environment can be subdivided into the external and internal factors. External factors of the Micro Environment are those factors that have a direct impact on the organisation; these are suppliers and their bargaining power or relationship with you. The suppliers credit facility that is a available; Customers and their bargaining power, Shareholders and financial Institutions. The internal factors known as the controllable factors consist of management, the finance department and how they manage financial resources and allocation, the Research and development Department on how effectively they conduct the research (accuracy and precision is vital in the R&D department), The HR department who contribute to the success of the organisation be facilitating restructuring and modernisation and selection of the right people to do the job properly, and the Company image and Brand equity. The brand that already has a good foot in the market will have a better possibility of survival to those brands that I still being launched.
The Macro environment is society as a whole and can affect the organisations potential to be profitable. The components of the Macro environment is Demographical forces, the distribution of a specific target market in a concentrated area with regards to age or sex and lifestyle; Political and legal forces such as policies and laws, wars and treaties; Economic forces such as how well the economy is doing, the employment rate, exchange rate, the rate of inflation etc.; Social and cultural forces, people from different social group or religious practises may have different Business ethics and language or cultural customs may create a barrier if the marketer is unaware of these traits; and technological forces, which is the main reason for such a rapid changing society especially amongst the youth can affect businesses. Keeping ahead of the trend and using innovative technological resources may give an organisation a competitive edge especially when it comes to innovation and staying ahead of trend.
In the Macro Environment economic factors may lend to challenges such as recession, were customers spending and lending power becomes tight-roped, the credit crunch, increasing rate of inflation which leads to price hikes and eventually a market crash. The unemployment rate may affect the market as well as the rate of the population growth of society. Political sanctions or government policies or restriction on foreign trade may all affect the organisations operation and the list goes on and on. Not to mention the new-age concept of ecological social welfare and the green market which all affects the position of the organisation the market and the way in which stakeholders and consumers perceive it.
In a free market economy, organisations are up for a lot of new competition. There are many factors affecting an organisation in this instance, threat of new entrance, threat of substitute products and services, bargaining power of consumers and suppliers and rivalry. In today’s fierce and fast pace environment, the lead belongs to the quick thinkers, the innovators and the strong-willed.
Propose segmentation criteria to be used for products in different Markets
when segmenting the market for you proposed marketing strategy, your market segment needs to be measureable (is the size of the target market going to achieve the desired objective of making a profit), substantial (does your target market have spending power, will they afford your new product or service), accessible (within a geographical area accessible to you), and differentiable (clearly defined homogenous or heterogeneous).
From this segmentation criteria’s, you will segment the market according to different lifestyle classifications. Are they upwardly mobile ambitious, these are individuals who are more affluent in life and are willing to try new products as they have the spending-power. Traditional or Social, meaning these individuals or groups conforms to norms and their purchasing pattern is more predictable and follows a pattern. Security and status seeking, segments of the market who would rather stich to what they know, or groups with a hedonistic lifestyle, they live in the now and don’t really have concerns of what will happen in the future.
All these segments would be categorised on a broader scale in terms of:
Geographical location: A group of individuals who lives out in the city, in a high-rise building of New York City would have little or no interest in the marketing of fertilizer for crop farming.
Demographics: Maternity sanitary towels would be targeted at women within a age frame and at the same cycle of life (child-bearing stage).
Behavioural segmentation: ready-made convenience food would be targeted at busy executives who have the income to dispose and not the time available to make a home cooked meal.
Psychographic segmentation: The sale of a history book would be targeted at individuals with a certain lifestyle and personality or a bicycle ad would be targeted to a market segment that enjoy the outdoors and sports, or families with children who are looking for some form of activity.
Cultural segmentation: is targeting a group with similar norms and values, for example, the sale of turkey during thanksgiving season would be targeted at a market that values that time of the year. Kosher meals will be targeted at a certain group of people and Halal products will be targeted at people with a similar requirement.
But within all these segments, people have different needs to fulfil at different time. Let’s take Maslow’s Hierarchy of needs for example; people are driven by different needs.
Physiological needs are the needs for survival (the basic essentials), Safety needs, Social needs and esteem needs (the need of affection, acceptance and love) and the final need being self-actualisation (fulfilment of personal potential). These needs are interchangeable and there level of importance may change over a period of time but this depends on the individual.
Segmentation of the market in terms of Maslow’s hierarch of needs would look something like this:
Physiological needs: Segment: People with Diabetes
Position: Sun chips harvest, snack food for diabetics
Safety needs :Segment: Home owners in South Africa
Position: ADT security advertising home alarm security systems
Social Needs :Segment Teenage girls and female adults
Position: The epilator by Philips that leaves your legs hair free and Silky smooth
Esteem Needs : Segment Upwardly mobile ambitious individuals
Position: BMW for the ultimate driving machine
Self-actualisation Segment College students and adults
Position: One year MBA course
The response of your target market will depend on their perception of the product and there cultural beliefs, norms, values and attitude.
Choose a targeting Strategy for a selected product or service
Product/Service : Contiki Tour Tailor made travel packages for young adults on budget
Market Segmentation/ : For young travellers Between the age of 18-35 who have a need to travel. University students or graduates Young working adults who want to break away from The rate race of a nine to five job and “find” themselves Individuals who like to meet new people Single adults Both male and female Adventurous and
Segmenting the audience :
Demographics
Young university students/graduates/singles who are both male and female
Psychograpgics
Segment of the market who are at a similar stage of the life-cycle, just starting out and curious of the world.
Educated individuals has they have a need to discover new things and new places. They want to be in the know.
Individuals that have a urge to travel, have not travelled much and are ready to break free from the nest.
People that have a similar hobby, such as traveling, partying, socialising, photography and meeting new
people.
Beliefs and values:
They believe that this will broaden their view and open them up to new horizons. People who value learning experiences and living the moment.
Life cycle:
Maybe they are just about to start off.
People who are nearing the end of schooling years but have not mastered the life satge of settling down and having children.
Geography:
This is a broad area. Geographically targeting all countries.
The marketing for this will vary according to price strategy and specific region. This may be affected by culture in religion.
Most targeting the western region where it is socially acceptable for young adults to travel unaccompanied, unlike the middle east and some Asian countries.
Market Targeting:
Commercial-Mass media- must be fun, emotional (appear to the emotions such as freedom).
A image of being free.
Digital marketing-google search and a website
Criteria size:
Must reach a large chunk of the market and appear to both male and female
Money:
Contiki tours are tailor made to suite individual budgets. Must be affordable.
Accessible:
A meeting point as at various locations throughout the year on specific date. Travel arrangement can be made.
Benefits:
A once in a life time opportunity. Live In the Now!
Demonstrate how buyer behaviour affects marketing activities in different buying situations
The buying behaviour of Organisation or consumer of a product a service affects marketing Activities at different stages. In turn, marketing activities can invoke or provoke different buying behaviours through effective marketing communication and by knowing the thinking process behind various buying decisions.
The buyer makes various decisions through a process known as a buyer’s thinking process.
1st stage: Need recognition & problem solving. The consumer or organisation recognises a need that needs to be fulfilled.
Stage 1 Marketers response: Gain interest of the consumer or Organisation by making the product or service known.
2nd stage: information search or developing product specification. An organisation will specify to its seller what it is what he needs or brainstorming will occur within the organisation to establish what it is specifically required to fulfil this need in stage 1. In a consumer, this stage may involve internet searching or looking and comparing different alternatives.
Stage 2 Marketers Response: Stimulate interest by appealing to the senses and emotion of the target market.
3rd stage: Evaluation of alternatives. The Organisation or consumer will look at price, availability and competitor/substitute product and compare.
Stage 3 Marketers Response: Create a desire within the target market identifying the product with the desired outcome if it is used.
4th stage: Purchase Decision. The Organisation or consumer has come to a conclusion.
Stage 4 Marketers Response: Generate a Action
Stage 5: Post-purchase evaluation. The consumer will decide whether his expectation has been met, has his needs been satisfied.
Stage 5 Marketers Response: Create satisfaction. Follow up on consumer or customer. Offer an after service customer care service. Ask for an evaluation of the product or service.
So we see that the buyers buying behaviour as shown by The Response Hierarchy model, follows a process of recognition, information search, evaluation, purchase decision and then post-purchase evaluation. This can also be driven by the consumers’ response to personal stimuli. Does the marketer’s communication objective create a cognitive response in the buyer.
All decisions are influences by Cultural values and behaviour, social influences as opinion leaders, aspirational models and status: personal influences such as age and lifestyle and psychological influences. Other influences may be Supply and demand, is it available. Is there greater demand than supply, in which case the consumer will look at other alternatives. This in turn can affect price thus affecting buying power of the individual.
In Organisational buying behaviour, there may be other influences other than the Marketers ability to appeal to the buyer since the decision is made by a group of people from different functions. These may be Environmental influences, Organisational Influences such as the company objectives, policies and procedures; Interpersonal influences such have level of power the decision makers have on the final purchase and conflicting beliefs and ideas of a product amongst individuals involved in the decision making process; or individual influences such as education level or personality or position within the organisation.
Propose New Positioning for a selected product or Service
Our Aim in positioning our new product, ‘Sparkle White 3D’ toothpaste, is to find a segment or market segments in the market where the product appeals to the target market and to differentiate the product in such a way that it give a competitive advantage over the competitors product.
So let’s generate our product positioning around the 3 C’s of position: Clear (Clarity), Consumer based (Consistent in performance), Competitiveness.
Clear:
Brand Positioning
The name should define the product, “Sparkle whit” for a white smile. 3D effect for a real visible and all-round cleanliness, even reaching the difficult to reach area.
Slogan: Let Your Health Shine
Market Segment:
Target ages group between 16-50 (a wide age group).
Male and female.
Those who are image conscious.
Those who are looking for a cheaper alternative to laser Teeth whitening and want a whiter brighter smile guaranteed.
Marketing Mix:
Target area will be commercial posts, Billboards, Magazine. Advertise healthcare institutes such as plastic surgery consultation rooms and dentistry consultation rooms. We also aim TV advertisements and cinema advertisements to target a large array of the different market segments.
Due to our large area of our market segment, we focus our efforts on Undifferentiated Marketing, Product orientation and Mass Marketing.
Product differentiation:
Feature
Shine and brighten just after one brushing
Whitens by removing up to 90% of surface stains in just 5 days
Strengthens weakened enamel and protects the enamel from errosion
Unique foaming action formula for a mouth wash effect
Fight cavities with regular brushing
Performance
Best new product as reviewed by better homes
Dental professionals’ choice award
Clinically tested for proven results
Plaque and gingivitis benefits
Triclosan free toothpaste
Conformance
Same benefits as your regular toothpaste but with added benefits of whitening 100% Guaranteed.
BB accreditation
Durability
Proven results in just one wash.
Lasting effect on continuous use
Reliability
100% teeth whitening Guaranteed
Removes up to 80% of surface stains
Style
Icy cool mint for arctic fresh effect or spearmint for a minty freshness on your breathe
Design
Adhere to ecological environmental standards, made from recycle material because we care about your family’s future and future generations to come.
Easy to open and biodegradable material are used for our packaging.
Silver, icy, cool blue because that’s how it feels in your mouth.
Competitive advantage
Our first ever, clinically effective proven, new formulae that includes an active ingredient called stannous fluoride for a whiter and healthier.
We use natural ingredients as much as possible
Chosen by the stars (in our mass communication press, we feature Eve Mendes with her sparkling white perfect teeth).
Section 3
Understanding the individual elements of the extended Marketing Mix
Explain how products are developed to sustain competitive advantage
To sustain competitive advantage, this can be done through various ways. Let us start by looking at the Marketing mix, Besides the 4 p’s as the elements to positioning the product (Product, Price, Place and promotion) we also have 3 more considered to be the extended marketing mix, these are People, Physical Evidence and Process. Or when entering foreign boundaries, we would look into public opinion and political entry as barriers to entry.
We will look into the extended marketing mix as a tool to sustaining a competitive advantage, but let’s cover some vital point about sustainability in today’s market. Sustainability is having a product that is asset-driven (loyal customers, suppliers and a efficient operation), this may also be your employees and professionalism and effectiveness of your work-force.
A sustainable product is one that is difficult to copy, differentiated from the competitive products. How affective is your product design, is the brand a strong brand that consumers have a favourable association with the brand. Is the product enduring, is it adaptable to change to meet the needs of people’s changing preferences I.e. such as Weetabix introducing oatabix. Sustainability in the market place is being a cost leader, does consumer view your product as taking the lead in price offering. Building customer intimacy through a sales force, one-to-one interaction or following up on after-sales purchase and keeping the communication channel open.
Focus is the main drive in sustainability. Dominate a part of the market segment by finding a niche and focus entirely on that niche’s needs and wants. Being focused also means being aware of the Strengths and weaknesses focus on your internal people such as your work-force, build on their strengths. Establish a good rapport with customers and suppliers by building a relationship with them. Know the bargaining power of your suppliers and competition that may be at work with the same supplier.
Look at opportunities of advancing technology and changes which allow you to keep ahead of your game. Threats may be economic conditions in the country or threats of entry of new competition or innovative product or services. What are the barriers of entry? If you dominate your market, the barriers of entry for new competition will be great.
Explain how distribution is arranged to provide customer convenience
Distribution is important because it plays a vital role in when and where of the marketing mix, so it can result in building customer loyalty or it may have an adverse effect and result in the customer turning to the competitor in future.
There are a few things the marketer needs to consider before he or she establishes the appropriate form of distribution: Can the product reach the consumer without getting damaged? Or is it feasible, will the profit-margin still be reached? What is the best way to distribute the goods so that it can also build a strong bond between the channel partner or build a strong reputation as been seen as a reliable source?
Distribution will vary according to business type. Is it an e-commerce business or a real world business? From this and the type of product, you will decide on a suitable means of channel distribution.
E-commerce business will have distribution centres all over the world i.e. Amazon.com. A regular retailer will have a display inventory which you can select your product and from there a means of transporting the goods will be provided. Many new age business work on the internet or over the phone where you can place your order and a home delivery service is provided such as is in the case when you order fast good from a restaurant.
There are two main distribution channels:
A Direct distribution System which is either:
1) A Direct Marketing System (online purchase or through a catalogue).
2) Direct Retail System i.e. Starbucks
3) Personal selling system through a salesperson
4) Assisted Marketing system i.e. EBay
An Indirect Distribution System
1) A single party selling system ( the retailer is also the distributor)
2) Multiple-Party Selling System
3) Multi-channel or Hybrid (the distributor is also the retailer; this retailer also distributes at stores and has a mail-order distribution system. So all the distribution channels are used to meet end-users convenience).
Distribution takes on many different channels and channel partners or is it is the marketer itself distributing it, it can either be transported via air, sea or rail. As technology gets more advanced, the distribution of goods is more fast and efficient than ever before. Explain how prices are set to reflect an Organisations objectives and Market Conditions
Price can be set in various ways: They can be set to meet the company’s objective of making a profit or to dominate a market segment or the market; or it can be set in relation to the target segment they wish to dominate.
There are various costs to take into consideration when setting a price, fixed and variable costs of production, distribution and promotion. You can also take into consideration the price of the competitions range, the company’s objective in the Marketing Strategy and the proposed positioning of the product. In an economical view point, you can take into consideration the Supply and demand of the product. If there is a high demand for a high quality product i.e. Mercedes or BMW, you can charge premium price. This has a lot to do with also the perception of the customer (this was covered in the extended marketing mix earlier).
There are various pricing strategies that can be considered on the consideration of your target segment and product standards and quality:
Price Penetration: This is where the price is set low to win market shares. This in my opinion can be used with products such as Lenevo, where apple and Samsung has already dominated the market, Lenevo can win market share by pricing in a differential product with similar or competitive features and then drop the price to reach a different market segment.
Skimming prices: Is charge high price to increase the perception of the product. This usually works with a new entry product and at a later stage, the price drops.
Competition pricing: is pricing the product according to the competitions price offering.
Value or bundle pricing: The price is set and a bonus items or promotional pack is offered.
Optional pricing: This is where different pricing is offered in the same category depending on the demand for it. i.e. same products may be cheaper cause the specific flavour is not popular in comparison to its sister product.
Premium pricing: is where a premium price is charged and remains at a premium price to perceive the quality of the product as superior i.e. Mercedes-Benz or jaguar.
Differential pricing can also be considered as for an international market such as Nokia, the pricing may vary according to geographical areas. A developing country’s pricing may vary to a developed country such as the UK vs Africa. This is known as pricing from an economical perspective and pricing according to different market conditions. Price, such as the other marketing variables need to be adaptable and SMART (specific, measurable, attainable and time specific). The pricing of the product mush adapt to the life-cycle of the product in order to be sustainable in the market.
Illustrate how promotional activities is integrated to achieve marketing objectives
The objective of any promotional strategy is to bring awareness of the consumer and persuade them to try it. An effective communication is vital for this reason, the message needs to be understood and heard.
There are various types of promotional tools one can use:
Advertising
Mass media, targeting an array of audience through television, billboards and radio.
Public Relations
Through public speaking and building positive brand awareness with the media and press
Sales Promotions or in-store display this is a short term sales tactic were a sales person stands at the target area and promotes the brand through persuasion.
Personal selling
Appointing a company representative to approach the customer or organisation and bring awareness or encourage repeat business
Direct Mail
This is used to distribute samples through direct mail
Internet Marketing
A new age and effective way of promoting through a website or internet advertising
Sponsorship
Emirates Airlines sponsors many sporting events like the rugby 7’s and the Dubai jazz festival as a means of marketing its product
Sample
A lot of FMCG goods are promoted this way by adding samples to magazines i.e. Shield antiperspirant in the women’s health magazine
The promotional activities must reinforce the benefits and promote awareness through consistency, co-ordination of efforts and repetition. What I mean by repetition is being visible everywhere so that the awareness of the product or brand sticks in the consumers mind. i.e. Nikes advertising and slogan, “just do it’.
The promotional methods should be in sync with the product life cycle. The 1st stage of the product life cycle is introduction of the product; this is the recognition stage, bringing awareness to the product through promotional efforts such as mass media. The second stage of the product life cycle is growth, this is where you need to bring brand awareness and build on customer loyalty by building a good rapport with your market segment.
Stage 3 is the Maturity stage where you may be faced with increased competition; this is where differentiating your product to the competitor is vital. And the last stage of the product life cycle is the Decline stage, your goal is to prevent or slow the death of your product through concentrating your efforts on your niche in the market and focusing on consumerization or through product innovation.
This is known as the Hierarchy of Effects which is bringing awareness and maintaining the awareness throughout the product life-cycle.
Analyse the additional elements of the extended marketing mix
This has already been explained in the first part of the question under, ‘Explain how products are developed to sustain competitive advantage’. We will cover a brief explanation of the elements of the extended marketing mix.
In addition to product (or service), price, place and promotion, the 4P’s of the marketing mix has extended to PEOPLE, PHYSICAL EVIDENCE, PROCESS.
PEOPLE: This is where HR efforts are crucial to the success of the company. Recruitment of the right staff, training and facilitating the development of your team is vital to a successful organisation as the people that you hire embody a vision of your organisation. They represent the organisation and put across a favourable or not so favourable perception of your organisation.
Customers, such as a restaurant or hotel staff, you judge the service and product by the way you have been treated and the efficiency of the service.
Interpersonal skills and knowledgeable staff is important to leave a favourable impression.
PROCESS: this is relating to how effective is the product in meet your expectations and satiety level and how efficiently the product was delivered (distribution).
PHYSICAL EVIDENCE: When you walk into the Four Seasons hotel, it is evident that it is a premium brand just by the service you are delivered and your surroundings, physical and tangible surrounding (the interior decoration) and your intangible surrounding (ambience and aroma).
I would add an additional 2 to the extended marketing mix, this would be perception of the brand as viewed by the market; and prestige (the productivity of the organisation and quality of its service or product).
Section 4
Understand & use the marketing mix in different context
Plan marketing mix for two different segments in the consumer market
Starbucks accounts for 33% of the market Share. The US market has long became saturated but its international market has grown considerably in the US, Japan and Germany in recent years.
Marketing Mix as presented by Marinel De Abreu:
Starbucks Coffee
Target Market
Product
Adults:
Premium coffee of various degrees of flavours
Varying in intensity from mild to rich and full in flavour
Wide availability of coffee from espresso, cappuccino, latte and flavoured
Design is contemporary and modern but yet sophisticated, design of the products such as thermal cups and mugs
The product feature such as the take away paper cups are disposable and user friendly.
Packaging is convenient i.e. the biodegradable and recycle carry cup holders.
The brand and design of the logo is easily recognisable
Young Adults: (age 18 to 24 years of age)
User friendly and disposable cups with fun designs
Starbucks stores is seen as a place where young adults can go socialise with their friends or study
Wi-Fi accessibility
The design of the store is fun and hip with contemporary designs
The wide array of different flavours and types of drinks will suit the young adults sweet and adventurous taste buds.
Price:
Starbucks prides itself on being a lifestyle premium brand that serves premium coffee beans and coffee from these beans
Starbuck uses a premium pricing strategy-its affordable but yet it is in the price bracket that it wants to keep its prestige as been known as the premium coffee provider.
Obviously the company objective is sustain existence through being profitable, thus the price will be aimed at meeting company objectives as well as being able to reach the market segment.
The prices of coffee beans has risen thus the price of coffee has invariable increased to cover rising costs.
Place:
Starbucks has covered virtually every street in the US making it convenient and has also made their products available in stores. You can now go to your local grocery store and find Starbucks coffee beans conveniently packed and ready to use at home.
Starbucks as established a drive through (in Dubai and UAE) obviously seeing a demand for a drive-thru coffee house tailor made to this market segment.
They have also increased their trading rights and license in hotels and universities; you will often find the Starbucks logo in hotel lobbies and a Starbuck branch in a university establishment (as I have observed in the UAE and USA).
Starbucks beans can be ordered online and delivered to your door and low delivery costs through their website.
Promotion
Starbucks has a reward program where after purchasing from their store a number of times, you are entitled to a free beverage of your choice.
They also have a website where you can submit feedback on your experience and level of satisfaction.
It is not common to find them advertising on mass media as it has already established itself and is a well-known brand. Its many stores that have covered almost every geographical area, speaks for itself.
It markets itself through its wide availability in retail stores, food services, hotels, close proximity to university and public facilities
People:
Starbucks prides itself on its people, they provide a great working environment.
They embrace diversification
Are committed to high working standards
Their mission is to contribute to the community through making Starbucks accessible to everyone.
They encourage environmental care by using all natural and recycle material as much as possible.
There corporate objective sees profitability as a way of sustaining the market and pride themselves as being a life style brand by offering employees a good salary
Service is of upmost importance and strengthens their brand
Physical Evidence:
Every stores cleanliness and high hygiene standards
Its interior decorating embodies the brand as hip, innovative and contemporary with an artistic décor friendly and efficient service
Great coffee
Illustrate differences in marketing products & services to businesses rather than consumers
The marketing of product and services to a business has a distinct difference to consumer marketing. For one, a consumer decision-making process is usually an emotional one, where is with businesses it is more of a rational and task-orientated decision. The promotional method will thus be different, Mass Media for consumer marketing and more of a personal or direct marketing with a B2B.
The marketing of a product and service to a business is more of a personal interaction through meeting and presentations. This is a long process, the life cycle of the business partnership, as a relationship needs to be built a strong foundation and brand loyalty.
Businesses usually want to minimise any risk involved in forming a business partnership therefore they would look for low-risk products or services that is of a good quality.
In business marketing, the distribution is likely to be a direct distribution channel with no involvement of a distribution channel. With consumer marketing, there is likely to be many channels of distribution before it reaches the end user.
In B2B marketing the product attributes and needs of the business is more specific, therefore the product must be tailor made to suit the businesses specification. On a B2C product specifications and attributes can be manipulated by the use of promotional tools to create a sense of need for the product.
Business clients are likely to spend more as they purchase larger quantities as opposed to consumers who will by one item from time to time. The relationship between the Marketer and the business is a strong one once established and nursed, thus the barrier to entry for competitors are hard. Usually these relationships are tied by contract therefore minimising the potential for competition to enter.
A business buying habits are based on the company culture and values so it important that you really get to know the culture of the organisation and their objectives as a business before you try penetrating that segment of the market. It is also important to differentiate your product or service so that it is perceived as high value, Low price sensitivity and unique in design.
The marketing strategy for business segment must be tailored around the organisation’s needs. Is the Organisation a ‘price-focused segment’, ‘Quality focused segment’,’ Service focused segment’ or a ‘partnership focused segment’. The Key is to really know your market and who you are dealing with.
Show how and why international marketing differs from domestic marketing
International Marketing
Domestic Marketing
Global entry into the market
High risk involvement and complex
Large financial resources
Differential market strategy
Different laws and regulations-there may be trade restrictions
Different marketing mix to local market-based on culture, values and principals
Competition is more dynamics
A need to assess suppliers power, buyers power and threats of new entrant
Technology may vary to a certain degree
Language may result in a communication barrier/ cultural differences may also be a challenge
Logistics-distribution may require export or import of goods.
Barriers to entry may vary either by varying substitute products, rife competition and restrictions on foreign trade or cultural barriers may arise
Restrictions on mass media production i.e. nudity or sexual connotations may be prohibited.
The marketing mix-production, promotion, distribution and price
Local Market-familiar grounds
Marketing strategy is less complex
Barriers to entry may be less restrictive
Less risk involved
Less finance required
Distribution is local
Biography:
Presented by Marinel De Abreu
References to resources:
HND business and Human resource study guide
Explainhow.com
Marketing Digest
Mindtools.com
Power point- Marketing strategy
Ebstudies.wordpress.com
Smartinsight.com
Slideshare.net
Cim.co.uk
Businesschron.com
Name:
Marinel De Abreu
Address:
Tecom Dubai
Post code / Zip:
36050
Telephone No:
00971503509140
Email Address:
marineldeabreu@yahoo.co.uk
Date:
15 January 2015
Course Name:
HND Business & Human Resource
Tutor Name:
Robert Smith
Assignment Name:
Marketing Unit 4
Understanding the concept and process of Marketing
Explain the various elements of the Marketing Process
Marketing is an essential part to the Organisations survival as we live in a customer driven environment that is possessed with endless aggressive competition. Thus the marketing process and effectiveness is important.
There are many definitions to define marketing but it is essentially the creation, communication and …show more content…
delivery of an essential product or service that will serve a purpose and fulfil a need of society as well as generate a profit and establish and maintain the existence of the Organisation who strives to satisfy the customers endless needs with innovation and creativity.
The only means of survival in a fiercely competitive environment is to be Market Orientated. Establishing the needs of a customer and working backwards to create a product which will meet or generate this need in the future, this is essentially known as Marketing Orientation. This brings us to the initial step of the marketing process which is Research.
Marketing Research has given rise to organisations establishing a marketing and Research Department. This enables organisations to keep ahead of trends thus stay ahead of competitors. This also enables the Organisation to realise their market segment through market segmentation. Aiming your marketing efforts towards the right market will not only minimise the risk of incorrect resource allocation, but will also save you time, energy and generate revenue. Segmentation of the market has various other benefits: Product differentiation, Build awareness for potential future marketing campaign effectiveness and as mentioned, effectiveness pf resource allocation.
Targeting the right Market segment requires a suitable and unique Marketing mix. We look more into depth the 4 P’s which are the components of an aggressive or effective marketing campaign:
PRODUCT: the design of the product, its function and benefits. Also, the product range in terms of how many segments will we target within this range and how many choices will be available.
PRICE: cost (variable and fixed costs)of manufacturing, marketing and distributing this product. Competitors’ price will also be a determining factor, Consumer perception will affect the asking price and the marketing conditions (are the material available or hard to get, is the economic factors which may affect this products price i.e. the price of oil/petrol).
PLACE: Having the product available when and where it is required so to meet customer demand and accessibility.
PROMOTIONAL: How to communicate the product to consumers to make them aware of its existence, Advertising, personal selling, public relations, direct marketing, Sales Promotion or word of mouth or a combination of all of these.
When compiling a strategy, one needs to evaluate the SWOT Analysis. What are the internal Strength and weaknesses of the Organisation and what are the external opportunities or threats that the organisation may face or are facing.
The marketing Strategy must be align with the Corporate Strategy, the organisations mission statement and objectives must be considered when formulating individual strategies for each interdependent department.
The marketing Strategy must have 3 components aligned with the corporate goals. It must be efficient, effective (is it communicating the right message and achieving sales target/company revenue) and dynamic (is it adaptable so as to change along with the corporate goals when imminent change is required).
Once the statement of objectives for the marketing department is formulated; which entails product, price, place and promotion; the marketing manager and corporate manager will have to undertake a situation analyse. This is the study of the market trend in the past and current which can predict future trends in the market. It also includes a close study of the competition and various market segments. A thorough in-depth analyse of internal strength and weakness, which may require product innovation, re-design or restructuring of the organisation, may be required.
This this brings as into Planning; what is the mission Statement of the organisation and objective of this marketing campaign. Setting the Sales Target, Marketing budget must be set and the allocation of resources such as staff salary and training, above the line expenditure (advertising) and below the line expenditure (in-store promotions, samples), and price decisions. In all marketing efforts, Sales forecasting also plays an important role. It’s an evaluation of sales trends and its importance plays a role in calculation the overall expenditure of the organisation as all the departments are invariably interlinked. Finance of the marketing strategy and campaign is affected by interest rates, inventory costs of the production and the cost of resources such as staff as well and environmental and technological changes. Forecasting can be categorised into different techniques such as time series (relating to past and current trends to predict future trends), Casual technique which is a numerical analysis of sales trends or qualitative technique which falls into explorative and normative (this is the study of consumer behaviour and desired state).
Tactics and management of marketing efforts will determine success of the strategy for if it is closely managed, it enables managers to rectify problems or short-comings or to redirect the course of the strategy, re-evaluate the strategy to get desired results before it’s too late.
Evaluate the benefits and costs of a marketing orientation for a selected organisation
Emirates Airlines prides itself on being a market/customer focused orientated organisation. This is evident in their mission statement,’ We strive to deliver the world’s best inflight service’. They have a strategic edge with product (having what the customer wants which is safety), at the right time (covering almost all areas of the globe making it accessible to virtually everyone) and offering a price which customers don’t mind paying (due to differentiating itself).
Emirates airlines has partnered with Qantas, another global leader in the aust-asia area, and by introducing a loyalty programme that promises reward and advantages for loyal customers.
It has also undertaken various charitable projects under its wings as a social responsibility movement towards its biggest markets (Africa and India). This is an effort towards relationship marketing, working towards retaining existing customers and encourage cross selling through family programmes or word-of-mouth from those already satisfied customers. Retaining customers who have already established a relationship with the company, will go through a life cycle, these customers are less sensitive to price change, are willing to try its share-code partners or companies who are in alliance with Emirates, and are less costly to service then acquiring new …show more content…
customers.
Emirates its always trying to stay ahead of its trend, being the first to fly the Airbus 380, being the first to introduce an entertainment system that has over 100 new movie releases and in addition various other channels (responding to customer wants).
Although we all know that it costs less to retain existing customers, it also incurs costs to keep these customers satisfied by offering value added services such as Emirates airlines free chauffer drive if you travel business or first class, the premium airport lounge across the globe exclusive to emirates customers and other value-added benefits. But these are all necessary in retaining the customer’s interest and maintaining a competitive advantage. The customers perception of buying this service is what value is in it for me and what are the benefits that outweighs the sacrifice of obtaining and paying the price. These all play a psychological importance on the customer’s decision on whether to remain with a certain service provider or use its competitor. Having a competitive edge and being customer centric is the aim of the game but all is not gain with any pain. There are costs to incur; use of newest technology, marketing intelligence, after sales service and constant modification for innovation is all at a cost.
Marketing Orientation has an overall impact on the profitability of the organisation, sales growth, market shares in the market place, new product launch success and perceptions of the customers, stakeholders and suppliers. The most challenging aspect of a market orientated organisation is to keep costs low, still provide an exceptional service and reward programme but be ahead of the game so as to win a great portion of the market share and still make desirable revenue and profit.
Section 2
Understanding and using the concept of segmentation, targeting and positioning
Show Macro and Micro environmental factors which influence Marketing decisions
The environment in which the organisation operates has an impact on the success or failure of its operation. The Organisation marketing environment consists of a Micro environment and a macro environment. Let’s take a look at how each has a direct impact on the Organisation:
The Micro environment can be subdivided into the external and internal factors. External factors of the Micro Environment are those factors that have a direct impact on the organisation; these are suppliers and their bargaining power or relationship with you. The suppliers credit facility that is a available; Customers and their bargaining power, Shareholders and financial Institutions. The internal factors known as the controllable factors consist of management, the finance department and how they manage financial resources and allocation, the Research and development Department on how effectively they conduct the research (accuracy and precision is vital in the R&D department), The HR department who contribute to the success of the organisation be facilitating restructuring and modernisation and selection of the right people to do the job properly, and the Company image and Brand equity. The brand that already has a good foot in the market will have a better possibility of survival to those brands that I still being launched.
The Macro environment is society as a whole and can affect the organisations potential to be profitable. The components of the Macro environment is Demographical forces, the distribution of a specific target market in a concentrated area with regards to age or sex and lifestyle; Political and legal forces such as policies and laws, wars and treaties; Economic forces such as how well the economy is doing, the employment rate, exchange rate, the rate of inflation etc.; Social and cultural forces, people from different social group or religious practises may have different Business ethics and language or cultural customs may create a barrier if the marketer is unaware of these traits; and technological forces, which is the main reason for such a rapid changing society especially amongst the youth can affect businesses. Keeping ahead of the trend and using innovative technological resources may give an organisation a competitive edge especially when it comes to innovation and staying ahead of trend.
In the Macro Environment economic factors may lend to challenges such as recession, were customers spending and lending power becomes tight-roped, the credit crunch, increasing rate of inflation which leads to price hikes and eventually a market crash. The unemployment rate may affect the market as well as the rate of the population growth of society. Political sanctions or government policies or restriction on foreign trade may all affect the organisations operation and the list goes on and on. Not to mention the new-age concept of ecological social welfare and the green market which all affects the position of the organisation the market and the way in which stakeholders and consumers perceive it.
In a free market economy, organisations are up for a lot of new competition. There are many factors affecting an organisation in this instance, threat of new entrance, threat of substitute products and services, bargaining power of consumers and suppliers and rivalry. In today’s fierce and fast pace environment, the lead belongs to the quick thinkers, the innovators and the strong-willed.
Propose segmentation criteria to be used for products in different Markets
when segmenting the market for you proposed marketing strategy, your market segment needs to be measureable (is the size of the target market going to achieve the desired objective of making a profit), substantial (does your target market have spending power, will they afford your new product or service), accessible (within a geographical area accessible to you), and differentiable (clearly defined homogenous or heterogeneous).
From this segmentation criteria’s, you will segment the market according to different lifestyle classifications. Are they upwardly mobile ambitious, these are individuals who are more affluent in life and are willing to try new products as they have the spending-power. Traditional or Social, meaning these individuals or groups conforms to norms and their purchasing pattern is more predictable and follows a pattern. Security and status seeking, segments of the market who would rather stich to what they know, or groups with a hedonistic lifestyle, they live in the now and don’t really have concerns of what will happen in the future.
All these segments would be categorised on a broader scale in terms of:
Geographical location: A group of individuals who lives out in the city, in a high-rise building of New York City would have little or no interest in the marketing of fertilizer for crop farming.
Demographics: Maternity sanitary towels would be targeted at women within a age frame and at the same cycle of life (child-bearing stage).
Behavioural segmentation: ready-made convenience food would be targeted at busy executives who have the income to dispose and not the time available to make a home cooked meal.
Psychographic segmentation: The sale of a history book would be targeted at individuals with a certain lifestyle and personality or a bicycle ad would be targeted to a market segment that enjoy the outdoors and sports, or families with children who are looking for some form of activity.
Cultural segmentation: is targeting a group with similar norms and values, for example, the sale of turkey during thanksgiving season would be targeted at a market that values that time of the year. Kosher meals will be targeted at a certain group of people and Halal products will be targeted at people with a similar requirement.
But within all these segments, people have different needs to fulfil at different time. Let’s take Maslow’s Hierarchy of needs for example; people are driven by different needs.
Physiological needs are the needs for survival (the basic essentials), Safety needs, Social needs and esteem needs (the need of affection, acceptance and love) and the final need being self-actualisation (fulfilment of personal potential). These needs are interchangeable and there level of importance may change over a period of time but this depends on the individual.
Segmentation of the market in terms of Maslow’s hierarch of needs would look something like this:
Physiological needs: Segment: People with Diabetes
Position: Sun chips harvest, snack food for diabetics
Safety needs :Segment: Home owners in South Africa
Position: ADT security advertising home alarm security systems
Social Needs :Segment Teenage girls and female adults
Position: The epilator by Philips that leaves your legs hair free and Silky smooth
Esteem Needs : Segment Upwardly mobile ambitious individuals
Position: BMW for the ultimate driving machine
Self-actualisation Segment College students and adults
Position: One year MBA course
The response of your target market will depend on their perception of the product and there cultural beliefs, norms, values and attitude.
Choose a targeting Strategy for a selected product or service
Product/Service : Contiki Tour Tailor made travel packages for young adults on budget
Market Segmentation/ : For young travellers Between the age of 18-35 who have a need to travel. University students or graduates Young working adults who want to break away from The rate race of a nine to five job and “find” themselves Individuals who like to meet new people Single adults Both male and female Adventurous and
Segmenting the audience :
Demographics
Young university students/graduates/singles who are both male and female
Psychograpgics
Segment of the market who are at a similar stage of the life-cycle, just starting out and curious of the world.
Educated individuals has they have a need to discover new things and new places. They want to be in the know.
Individuals that have a urge to travel, have not travelled much and are ready to break free from the nest.
People that have a similar hobby, such as traveling, partying, socialising, photography and meeting new
people.
Beliefs and values:
They believe that this will broaden their view and open them up to new horizons. People who value learning experiences and living the moment.
Life cycle:
Maybe they are just about to start off.
People who are nearing the end of schooling years but have not mastered the life satge of settling down and having children.
Geography:
This is a broad area. Geographically targeting all countries.
The marketing for this will vary according to price strategy and specific region. This may be affected by culture in religion.
Most targeting the western region where it is socially acceptable for young adults to travel unaccompanied, unlike the middle east and some Asian countries.
Market Targeting:
Commercial-Mass media- must be fun, emotional (appear to the emotions such as freedom).
A image of being free.
Digital marketing-google search and a website
Criteria size:
Must reach a large chunk of the market and appear to both male and female
Money:
Contiki tours are tailor made to suite individual budgets. Must be affordable.
Accessible:
A meeting point as at various locations throughout the year on specific date. Travel arrangement can be made.
Benefits:
A once in a life time opportunity. Live In the Now!
Demonstrate how buyer behaviour affects marketing activities in different buying situations
The buying behaviour of Organisation or consumer of a product a service affects marketing Activities at different stages. In turn, marketing activities can invoke or provoke different buying behaviours through effective marketing communication and by knowing the thinking process behind various buying decisions.
The buyer makes various decisions through a process known as a buyer’s thinking process.
1st stage: Need recognition & problem solving. The consumer or organisation recognises a need that needs to be fulfilled.
Stage 1 Marketers response: Gain interest of the consumer or Organisation by making the product or service known.
2nd stage: information search or developing product specification. An organisation will specify to its seller what it is what he needs or brainstorming will occur within the organisation to establish what it is specifically required to fulfil this need in stage 1. In a consumer, this stage may involve internet searching or looking and comparing different alternatives.
Stage 2 Marketers Response: Stimulate interest by appealing to the senses and emotion of the target market.
3rd stage: Evaluation of alternatives. The Organisation or consumer will look at price, availability and competitor/substitute product and compare.
Stage 3 Marketers Response: Create a desire within the target market identifying the product with the desired outcome if it is used.
4th stage: Purchase Decision. The Organisation or consumer has come to a conclusion.
Stage 4 Marketers Response: Generate a Action
Stage 5: Post-purchase evaluation. The consumer will decide whether his expectation has been met, has his needs been satisfied.
Stage 5 Marketers Response: Create satisfaction. Follow up on consumer or customer. Offer an after service customer care service. Ask for an evaluation of the product or service.
So we see that the buyers buying behaviour as shown by The Response Hierarchy model, follows a process of recognition, information search, evaluation, purchase decision and then post-purchase evaluation. This can also be driven by the consumers’ response to personal stimuli. Does the marketer’s communication objective create a cognitive response in the buyer.
All decisions are influences by Cultural values and behaviour, social influences as opinion leaders, aspirational models and status: personal influences such as age and lifestyle and psychological influences. Other influences may be Supply and demand, is it available. Is there greater demand than supply, in which case the consumer will look at other alternatives. This in turn can affect price thus affecting buying power of the individual.
In Organisational buying behaviour, there may be other influences other than the Marketers ability to appeal to the buyer since the decision is made by a group of people from different functions. These may be Environmental influences, Organisational Influences such as the company objectives, policies and procedures; Interpersonal influences such have level of power the decision makers have on the final purchase and conflicting beliefs and ideas of a product amongst individuals involved in the decision making process; or individual influences such as education level or personality or position within the organisation.
Propose New Positioning for a selected product or Service
Our Aim in positioning our new product, ‘Sparkle White 3D’ toothpaste, is to find a segment or market segments in the market where the product appeals to the target market and to differentiate the product in such a way that it give a competitive advantage over the competitors product.
So let’s generate our product positioning around the 3 C’s of position: Clear (Clarity), Consumer based (Consistent in performance), Competitiveness.
Clear:
Brand Positioning
The name should define the product, “Sparkle whit” for a white smile. 3D effect for a real visible and all-round cleanliness, even reaching the difficult to reach area.
Slogan: Let Your Health Shine
Market Segment:
Target ages group between 16-50 (a wide age group).
Male and female.
Those who are image conscious.
Those who are looking for a cheaper alternative to laser Teeth whitening and want a whiter brighter smile guaranteed.
Marketing Mix:
Target area will be commercial posts, Billboards, Magazine. Advertise healthcare institutes such as plastic surgery consultation rooms and dentistry consultation rooms. We also aim TV advertisements and cinema advertisements to target a large array of the different market segments.
Due to our large area of our market segment, we focus our efforts on Undifferentiated Marketing, Product orientation and Mass Marketing.
Product differentiation:
Feature
Shine and brighten just after one brushing
Whitens by removing up to 90% of surface stains in just 5 days
Strengthens weakened enamel and protects the enamel from errosion
Unique foaming action formula for a mouth wash effect
Fight cavities with regular brushing
Performance
Best new product as reviewed by better homes
Dental professionals’ choice award
Clinically tested for proven results
Plaque and gingivitis benefits
Triclosan free toothpaste
Conformance
Same benefits as your regular toothpaste but with added benefits of whitening 100% Guaranteed.
BB accreditation
Durability
Proven results in just one wash.
Lasting effect on continuous use
Reliability
100% teeth whitening Guaranteed
Removes up to 80% of surface stains
Style
Icy cool mint for arctic fresh effect or spearmint for a minty freshness on your breathe
Design
Adhere to ecological environmental standards, made from recycle material because we care about your family’s future and future generations to come.
Easy to open and biodegradable material are used for our packaging.
Silver, icy, cool blue because that’s how it feels in your mouth.
Competitive advantage
Our first ever, clinically effective proven, new formulae that includes an active ingredient called stannous fluoride for a whiter and healthier.
We use natural ingredients as much as possible
Chosen by the stars (in our mass communication press, we feature Eve Mendes with her sparkling white perfect teeth).
Section 3
Understanding the individual elements of the extended Marketing Mix
Explain how products are developed to sustain competitive advantage
To sustain competitive advantage, this can be done through various ways. Let us start by looking at the Marketing mix, Besides the 4 p’s as the elements to positioning the product (Product, Price, Place and promotion) we also have 3 more considered to be the extended marketing mix, these are People, Physical Evidence and Process. Or when entering foreign boundaries, we would look into public opinion and political entry as barriers to entry.
We will look into the extended marketing mix as a tool to sustaining a competitive advantage, but let’s cover some vital point about sustainability in today’s market. Sustainability is having a product that is asset-driven (loyal customers, suppliers and a efficient operation), this may also be your employees and professionalism and effectiveness of your work-force.
A sustainable product is one that is difficult to copy, differentiated from the competitive products. How affective is your product design, is the brand a strong brand that consumers have a favourable association with the brand. Is the product enduring, is it adaptable to change to meet the needs of people’s changing preferences I.e. such as Weetabix introducing oatabix. Sustainability in the market place is being a cost leader, does consumer view your product as taking the lead in price offering. Building customer intimacy through a sales force, one-to-one interaction or following up on after-sales purchase and keeping the communication channel open.
Focus is the main drive in sustainability. Dominate a part of the market segment by finding a niche and focus entirely on that niche’s needs and wants. Being focused also means being aware of the Strengths and weaknesses focus on your internal people such as your work-force, build on their strengths. Establish a good rapport with customers and suppliers by building a relationship with them. Know the bargaining power of your suppliers and competition that may be at work with the same supplier.
Look at opportunities of advancing technology and changes which allow you to keep ahead of your game. Threats may be economic conditions in the country or threats of entry of new competition or innovative product or services. What are the barriers of entry? If you dominate your market, the barriers of entry for new competition will be great.
Explain how distribution is arranged to provide customer convenience
Distribution is important because it plays a vital role in when and where of the marketing mix, so it can result in building customer loyalty or it may have an adverse effect and result in the customer turning to the competitor in future.
There are a few things the marketer needs to consider before he or she establishes the appropriate form of distribution: Can the product reach the consumer without getting damaged? Or is it feasible, will the profit-margin still be reached? What is the best way to distribute the goods so that it can also build a strong bond between the channel partner or build a strong reputation as been seen as a reliable source?
Distribution will vary according to business type. Is it an e-commerce business or a real world business? From this and the type of product, you will decide on a suitable means of channel distribution.
E-commerce business will have distribution centres all over the world i.e. Amazon.com. A regular retailer will have a display inventory which you can select your product and from there a means of transporting the goods will be provided. Many new age business work on the internet or over the phone where you can place your order and a home delivery service is provided such as is in the case when you order fast good from a restaurant.
There are two main distribution channels:
A Direct distribution System which is either:
1) A Direct Marketing System (online purchase or through a catalogue).
2) Direct Retail System i.e. Starbucks
3) Personal selling system through a salesperson
4) Assisted Marketing system i.e. EBay
An Indirect Distribution System
1) A single party selling system ( the retailer is also the distributor)
2) Multiple-Party Selling System
3) Multi-channel or Hybrid (the distributor is also the retailer; this retailer also distributes at stores and has a mail-order distribution system. So all the distribution channels are used to meet end-users convenience).
Distribution takes on many different channels and channel partners or is it is the marketer itself distributing it, it can either be transported via air, sea or rail. As technology gets more advanced, the distribution of goods is more fast and efficient than ever before. Explain how prices are set to reflect an Organisations objectives and Market Conditions
Price can be set in various ways: They can be set to meet the company’s objective of making a profit or to dominate a market segment or the market; or it can be set in relation to the target segment they wish to dominate.
There are various costs to take into consideration when setting a price, fixed and variable costs of production, distribution and promotion. You can also take into consideration the price of the competitions range, the company’s objective in the Marketing Strategy and the proposed positioning of the product. In an economical view point, you can take into consideration the Supply and demand of the product. If there is a high demand for a high quality product i.e. Mercedes or BMW, you can charge premium price. This has a lot to do with also the perception of the customer (this was covered in the extended marketing mix earlier).
There are various pricing strategies that can be considered on the consideration of your target segment and product standards and quality:
Price Penetration: This is where the price is set low to win market shares. This in my opinion can be used with products such as Lenevo, where apple and Samsung has already dominated the market, Lenevo can win market share by pricing in a differential product with similar or competitive features and then drop the price to reach a different market segment.
Skimming prices: Is charge high price to increase the perception of the product. This usually works with a new entry product and at a later stage, the price drops.
Competition pricing: is pricing the product according to the competitions price offering.
Value or bundle pricing: The price is set and a bonus items or promotional pack is offered.
Optional pricing: This is where different pricing is offered in the same category depending on the demand for it. i.e. same products may be cheaper cause the specific flavour is not popular in comparison to its sister product.
Premium pricing: is where a premium price is charged and remains at a premium price to perceive the quality of the product as superior i.e. Mercedes-Benz or jaguar.
Differential pricing can also be considered as for an international market such as Nokia, the pricing may vary according to geographical areas. A developing country’s pricing may vary to a developed country such as the UK vs Africa. This is known as pricing from an economical perspective and pricing according to different market conditions. Price, such as the other marketing variables need to be adaptable and SMART (specific, measurable, attainable and time specific). The pricing of the product mush adapt to the life-cycle of the product in order to be sustainable in the market.
Illustrate how promotional activities is integrated to achieve marketing objectives
The objective of any promotional strategy is to bring awareness of the consumer and persuade them to try it. An effective communication is vital for this reason, the message needs to be understood and heard.
There are various types of promotional tools one can use:
Advertising
Mass media, targeting an array of audience through television, billboards and radio.
Public Relations
Through public speaking and building positive brand awareness with the media and press
Sales Promotions or in-store display this is a short term sales tactic were a sales person stands at the target area and promotes the brand through persuasion.
Personal selling
Appointing a company representative to approach the customer or organisation and bring awareness or encourage repeat business
Direct Mail
This is used to distribute samples through direct mail
Internet Marketing
A new age and effective way of promoting through a website or internet advertising
Sponsorship
Emirates Airlines sponsors many sporting events like the rugby 7’s and the Dubai jazz festival as a means of marketing its product
Sample
A lot of FMCG goods are promoted this way by adding samples to magazines i.e. Shield antiperspirant in the women’s health magazine
The promotional activities must reinforce the benefits and promote awareness through consistency, co-ordination of efforts and repetition. What I mean by repetition is being visible everywhere so that the awareness of the product or brand sticks in the consumers mind. i.e. Nikes advertising and slogan, “just do it’.
The promotional methods should be in sync with the product life cycle. The 1st stage of the product life cycle is introduction of the product; this is the recognition stage, bringing awareness to the product through promotional efforts such as mass media. The second stage of the product life cycle is growth, this is where you need to bring brand awareness and build on customer loyalty by building a good rapport with your market segment.
Stage 3 is the Maturity stage where you may be faced with increased competition; this is where differentiating your product to the competitor is vital. And the last stage of the product life cycle is the Decline stage, your goal is to prevent or slow the death of your product through concentrating your efforts on your niche in the market and focusing on consumerization or through product innovation.
This is known as the Hierarchy of Effects which is bringing awareness and maintaining the awareness throughout the product life-cycle.
Analyse the additional elements of the extended marketing mix
This has already been explained in the first part of the question under, ‘Explain how products are developed to sustain competitive advantage’. We will cover a brief explanation of the elements of the extended marketing mix.
In addition to product (or service), price, place and promotion, the 4P’s of the marketing mix has extended to PEOPLE, PHYSICAL EVIDENCE, PROCESS.
PEOPLE: This is where HR efforts are crucial to the success of the company. Recruitment of the right staff, training and facilitating the development of your team is vital to a successful organisation as the people that you hire embody a vision of your organisation. They represent the organisation and put across a favourable or not so favourable perception of your organisation.
Customers, such as a restaurant or hotel staff, you judge the service and product by the way you have been treated and the efficiency of the service.
Interpersonal skills and knowledgeable staff is important to leave a favourable impression.
PROCESS: this is relating to how effective is the product in meet your expectations and satiety level and how efficiently the product was delivered (distribution).
PHYSICAL EVIDENCE: When you walk into the Four Seasons hotel, it is evident that it is a premium brand just by the service you are delivered and your surroundings, physical and tangible surrounding (the interior decoration) and your intangible surrounding (ambience and aroma).
I would add an additional 2 to the extended marketing mix, this would be perception of the brand as viewed by the market; and prestige (the productivity of the organisation and quality of its service or product).
Section 4
Understand & use the marketing mix in different context
Plan marketing mix for two different segments in the consumer market
Starbucks accounts for 33% of the market Share. The US market has long became saturated but its international market has grown considerably in the US, Japan and Germany in recent years.
Marketing Mix as presented by Marinel De Abreu:
Starbucks Coffee
Target Market
Product
Adults:
Premium coffee of various degrees of flavours
Varying in intensity from mild to rich and full in flavour
Wide availability of coffee from espresso, cappuccino, latte and flavoured
Design is contemporary and modern but yet sophisticated, design of the products such as thermal cups and mugs
The product feature such as the take away paper cups are disposable and user friendly.
Packaging is convenient i.e. the biodegradable and recycle carry cup holders.
The brand and design of the logo is easily recognisable
Young Adults: (age 18 to 24 years of age)
User friendly and disposable cups with fun designs
Starbucks stores is seen as a place where young adults can go socialise with their friends or study
Wi-Fi accessibility
The design of the store is fun and hip with contemporary designs
The wide array of different flavours and types of drinks will suit the young adults sweet and adventurous taste buds.
Price:
Starbucks prides itself on being a lifestyle premium brand that serves premium coffee beans and coffee from these beans
Starbuck uses a premium pricing strategy-its affordable but yet it is in the price bracket that it wants to keep its prestige as been known as the premium coffee provider.
Obviously the company objective is sustain existence through being profitable, thus the price will be aimed at meeting company objectives as well as being able to reach the market segment.
The prices of coffee beans has risen thus the price of coffee has invariable increased to cover rising costs.
Place:
Starbucks has covered virtually every street in the US making it convenient and has also made their products available in stores. You can now go to your local grocery store and find Starbucks coffee beans conveniently packed and ready to use at home.
Starbucks as established a drive through (in Dubai and UAE) obviously seeing a demand for a drive-thru coffee house tailor made to this market segment.
They have also increased their trading rights and license in hotels and universities; you will often find the Starbucks logo in hotel lobbies and a Starbuck branch in a university establishment (as I have observed in the UAE and USA).
Starbucks beans can be ordered online and delivered to your door and low delivery costs through their website.
Promotion
Starbucks has a reward program where after purchasing from their store a number of times, you are entitled to a free beverage of your choice.
They also have a website where you can submit feedback on your experience and level of satisfaction.
It is not common to find them advertising on mass media as it has already established itself and is a well-known brand. Its many stores that have covered almost every geographical area, speaks for itself.
It markets itself through its wide availability in retail stores, food services, hotels, close proximity to university and public facilities
People:
Starbucks prides itself on its people, they provide a great working environment.
They embrace diversification
Are committed to high working standards
Their mission is to contribute to the community through making Starbucks accessible to everyone.
They encourage environmental care by using all natural and recycle material as much as possible.
There corporate objective sees profitability as a way of sustaining the market and pride themselves as being a life style brand by offering employees a good salary
Service is of upmost importance and strengthens their brand
Physical Evidence:
Every stores cleanliness and high hygiene standards
Its interior decorating embodies the brand as hip, innovative and contemporary with an artistic décor friendly and efficient service
Great coffee
Illustrate differences in marketing products & services to businesses rather than consumers
The marketing of product and services to a business has a distinct difference to consumer marketing. For one, a consumer decision-making process is usually an emotional one, where is with businesses it is more of a rational and task-orientated decision. The promotional method will thus be different, Mass Media for consumer marketing and more of a personal or direct marketing with a B2B.
The marketing of a product and service to a business is more of a personal interaction through meeting and presentations. This is a long process, the life cycle of the business partnership, as a relationship needs to be built a strong foundation and brand loyalty.
Businesses usually want to minimise any risk involved in forming a business partnership therefore they would look for low-risk products or services that is of a good quality.
In business marketing, the distribution is likely to be a direct distribution channel with no involvement of a distribution channel. With consumer marketing, there is likely to be many channels of distribution before it reaches the end user.
In B2B marketing the product attributes and needs of the business is more specific, therefore the product must be tailor made to suit the businesses specification. On a B2C product specifications and attributes can be manipulated by the use of promotional tools to create a sense of need for the product.
Business clients are likely to spend more as they purchase larger quantities as opposed to consumers who will by one item from time to time. The relationship between the Marketer and the business is a strong one once established and nursed, thus the barrier to entry for competitors are hard. Usually these relationships are tied by contract therefore minimising the potential for competition to enter.
A business buying habits are based on the company culture and values so it important that you really get to know the culture of the organisation and their objectives as a business before you try penetrating that segment of the market. It is also important to differentiate your product or service so that it is perceived as high value, Low price sensitivity and unique in design.
The marketing strategy for business segment must be tailored around the organisation’s needs. Is the Organisation a ‘price-focused segment’, ‘Quality focused segment’,’ Service focused segment’ or a ‘partnership focused segment’. The Key is to really know your market and who you are dealing with.
Show how and why international marketing differs from domestic marketing
International Marketing
Domestic Marketing
Global entry into the market
High risk involvement and complex
Large financial resources
Differential market strategy
Different laws and regulations-there may be trade restrictions
Different marketing mix to local market-based on culture, values and principals
Competition is more dynamics
A need to assess suppliers power, buyers power and threats of new entrant
Technology may vary to a certain degree
Language may result in a communication barrier/ cultural differences may also be a challenge
Logistics-distribution may require export or import of goods.
Barriers to entry may vary either by varying substitute products, rife competition and restrictions on foreign trade or cultural barriers may arise
Restrictions on mass media production i.e. nudity or sexual connotations may be prohibited.
The marketing mix-production, promotion, distribution and price
Local Market-familiar grounds
Marketing strategy is less complex
Barriers to entry may be less restrictive
Less risk involved
Less finance required
Distribution is local
Biography:
Presented by Marinel De Abreu
References to resources:
HND business and Human resource study guide
Explainhow.com
Marketing Digest
Mindtools.com
Power point- Marketing strategy
Ebstudies.wordpress.com
Smartinsight.com
Slideshare.net
Cim.co.uk
Businesschron.com