1st assignment of marketing

8/2/2019 1st Assignment of Marketing

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Q.No: 1

A) describe the stages of the product life cycle.

B) describe how marketing strategies change during the products life cycle.

Q.No: 2

A) the battle between brands constantly ranges in the Pakistani market place. What are thebasic difference between manufactures brand and private bands? In the battle of tha

bands what advantages do retailers have?

B) why are many people willing to pay more for branded products than for unbrandedproducts? What does this tell you about the value of branding?

Q.No: 3

A) discuss different price strategies and explain when each of them is appropriate and canbe called effective pricing strategy. Or development and implementing product strategies?

B) explain the steps in the market reach process?

Q.No: 4

A) developing and implementing price strategy

B) explain the role of ethic in marketing

Q.No: 5

Discuss the concept of customer value and its importance to successful marketing. How arethe

concepts of customer value and relationship marketing linked?


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Developing and implementing product strategies

Q.No: 7

Define the three steps of targeting marketing, marketing segmentation, market targetingand market positioning in detail

Q.No: 8

A) identify and define the internal and external factors affecting firms pricing decision.

B) discuss how company adjust their price to take into account different type of customerand

situation.

Q.No: 9

Explain the developing and implementing product strategies.

Q.No: 10

Identify the difference between marketing concept, the production concept the productconcept, and the selling concept. Discuss which concepts are easier to apply in the shortrun. Predict which concept you believe can offer best long term success and why?

..Q.7 Discuss how companies adjust their prices to take in to account different types ofcustomers and situations.

Ans Companies usually adjust their basic prices to account for various customer

differences and changing situations. Summarizes six price adjustment strategies:1. Discount and allowance pricing.2. Segmented pricing.3. Psychological pricing.4. Promotional pricing.5. Geographical pricing.6. International pricing.


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1 - Cash discount pricingMost companies adjust their basic price to reward customers for certain responses,Such as early payment of bills, volume purchases and off-season buying. These priceadjustments called discount allowances can take much form.Cash discount .

A price reduction to buyers their bills promptly.Quantity Discount .A price reduction to buyers who buy large volumes.

Functional discount.A price reduction offered by the seller to trade channel members who perform

certain functions such as selling, and record keeping.Seasonal discount .

Price reductions to buyers who purchase merchandise or service out of season.

Allowance .Promotional money paid by manufacturers to retailers in return for an agreement tofeature the manufacturers products in some way.

2- Segmented pricing .Companies will often adjust their basic prices to allow for differences in customers,products, and locations. In segmented pricing, the company sell a products or serviceat two or more prices, even through the difference in prices is not based ondifferences in costs.Segmented pricing takes several forms. Under customer segment pricing , differentprice for the same product or services for example. Museums will charge a loweradmission for students and senior citizens. Under product form pricing differentversions of the product are priced differently, but not according to differences intheir costs.For segmented pricing to be an effective strategy, certain conditions must exist, Themarket must be segment able , and the segments must show different degrees of thedemand. Members of the segment paying the lower price should not be able to turnaround and resell the product to the segment paying the higher price.

3- Psychological Pricing. A pricing approach that consider the psychology of prices and not simply theeconomics; the price is used to say something about the product. Price says something about the product For example, many consumers use price to

judge quantity. A $ 100 bottle or perfume pay contain only $ 3 worth of scent, butsome people are willing to pay the $ 100 because this price indicates somethingspecial.In using Psychological pricing, sellers consider the psychological of prices do notsimply economics. For example, one study of the relationship between price andquality perceptions of Cars found that consumers perceive higher price Cars ashaving higher quality. By the same token, higher quality Cars as perceived to be evenhigher priced than they actually.


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4- Promotional Pricing With promotional pricing will temporarily price their products below list price and

sometimes even below cost. Promotional pricing takes several forms. Supermarketsand department stores will price a few products as loss leaders at attract customers tothe store in the hope that they will buy other items at normal markups . Sellers will

also special event pricing in certain seasons to draw more customers. Manufactureswill sometimes offer cash rebates to consumers who buy the product from dealerswith in specified time; the manufacturers sends to rebate directly to the customers

5- Geographical Pricing .A company must also decide how to price its products to customers located in

different parts of the country of the company or world. Should the company risklosing the business of more distant customers by charging them higher prices to coverthe higher shipping cost

Origin pricing.

A Geographical pricing strategy in which goods are placed free on board a carrier,the customer pays the actual fright from the factory to the destinations

Uniform delivered pricing .A geographical pricing strategy in which the company charges the same price plusfreight to all customers, regardless of their location .

Basing point pricing .A geographical pricing strategy in which the seller designates some city as basingpoint and charges all customers the fright cost from that city to the customerlocation, regardless of the city from which the goods are actually shipped.

6- International pricing.Companies that market their products internationally must decide what prices tocharge in the different countries in which they operate In some cases, a companycan set a uniform world wide price. For example, Boeing sells its jetliners at aboutthe same price everywhere, whether in the United States, Europe or a third worldcountry. However, most companies adjust their prices to reflect local marketconditions and cost considerations.The price that companies should charge in specific country depends on manyfactors, including economic conditions, competitive conditions, laws and regulationsand development of the of the wholesaling and retailing system . Consumerperceptions and preferences also vary from country to country, calling for differentprices or the company may have different marketing objectives in various worldmarkets, which require changes in pricing strategy. For example, Sony mightintroduce a product in to mature markets in highly developed countries with thegoal of quickly gaining mass-market share this would call for a penetrations pricingstrategy. In contrast, it might enter a less developed market by targeting smaller,less price sensitive segments. In this case, market-skimming pricing makes sense.


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Costs play an important role in setting international prices. Travelers abroad areoften surprised to find that goods that are relatively inexpensive at home may carryoutrageously higher price tags in other countries

Q. 2 List and define the steps in the new product development process.

Ans Definition of New Product development processNew products can add substantially to a company overall sales and boost its

market share for example the board game. Trivial pursuit sold 20 million sets in1984 its highest year. The game maker has increased sales since that time bydeveloping variations of the original game it now offers travel packs a childrenversion and annual year in review editions. These new games continue to sell millionunits each year.

According to one study new product those less than five years old accountfor about 35 percent of total sales for major consumer and industrial goodscompanies. New products can also help a company image by providing it with areputation as an innovator and leader with its customers. New product also

increases markups and profits to sellers. This happens when new products aresuccessful because they tend to be priced 10 to 15 percent higher than oldercomparable products.New Product development process steps

New product development generally involves seven key steps.

1. Generating ideas.2. Screening ideas.3. Developing the product.4. Testing the product5. Introducing the product.6. Evaluating customer acceptance of the product.7. Business AnalysisLet s take a closer look at each step.

1-Generating ideas

New product ideas come from a variety of sources including customers. Competitorschannels members and company employees. Creativity is essential for new product

development. Some companies sponsor discussing. Which are designed to generateas many new ideas sessions?

2-Screening ideas

During the screening stage in the new product planning process ideas for products are

evaluated. New product ideas are evaluated on general characteristics such as the size of

the mark it the profit potential and level of risk. New product ideas are also evaluated on


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their marketing impact such as the possible effect on existing product and on the company

image and the appeal to current and new market.

The production requirement for new product ideas must also bed considered. Howlong will it take to produce and introduce the new product can it be producedefficiently and at a competitive price each factor is weighed and decisions are than

made about which products to develop and market.

3-Developing the product

During product development the new product ideas takes a physical shape and marketersdevelop a marketing strategy. Plans relating to production packaging labeling brandingpromotion and distribution are made. Sometimes millions of dollars can be spend at this

stage of development for testing retypes and research. A prototype side a model of the

product. Usually only a few models are made at first as the business tests the idea and makes

changes to improve the final product.

4-Testing the product

After the product is developed it is tested both in the lab and by consumer. As you learned innew products are frequently test marketed in certain geographic areas to see whether

consumers will accept them. For example PepsiCo developed a new soft drink for the

European market to try to increase its market share the cola is called Pepsi max a one calorie

cola and its was made specifically for non American tastes. International consumes typicallydo not like diet beverage so the company spend more than two year testing different flavor

combinations on the European market. Finally one version met the company goal of having

at least 40percetn of the consumers in taste test chose the new product over coke.

5-Introducing the product

If a new product has been successfully test marketed it is ready for full marketintroduction. The costs of introduction a new product often are quiet high. The productmust be advertised to introduce its benefits to consumers. A new or revised distributionnetwork may be needed. The company may need to develop training programs for itssales force to pay for these costs. The company needs to get its new products into themarket as quickly as possible.

6- Evaluating customer acceptance of the product.Expending the product line

Companies can expand product mix by adding new product items and lines, whichmay or may not be related to current products. For example general mills introduced

Yoplait crunch n yogurt a cereal and yogurt combination as an extension of its Yoplaityogurt product line. Hershey Foods Corporation introduced Hershey hugs as a lineextension to the traditional Hershey kisses.

Product expansions make goods sense for many businesses. Companies oftenexpand product lines as a way to build on an already established image to increase salesand profits and to appeal to new market.


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Modifying product lines

A product modification is an alteration in a company existing product. Modifiedproducts may be offered in new and different varieties. Formulation colors stylesfeatures or sizes. Product modifications are a relatively quick and easy way to add

new products to a company product line.

At a time when launching a new product can cost as much as 50 million consumerproducts companies are turning to lower risk product modification. According to arecent study by marketing intelligence service ltd approximately 16,000 health beautyhousehold food and pet products are introduced yearly. About 70 percent of thesenew products were product modifications. Product modifications are viewed as lowrisk and lo cost ways to develop new products. Example of product modifications istelephones in new colors and styles and cars with airbags and antilock brakes.

Deleting a product or product line

Sometimes companies decide that they will no longer produce or sell a particularproduct or perhaps even a whole product line. For example a retailer who is tryingto appeal to a younger customer any stops selling product lines that appealed toolder customers.

Other reasons to drop a product or a product line include.

The product ahs become obsolete. It has lost its appeal. It does not match current company objective. It must be dropped to make room for other products. It is no longer profitable. It conflicts with another product in the same product line.7- Business analysis

Business analysis is a review of the sales costs and profit projections for a newproduct to find out whether these factors satisfy the companys objectives.

Once management has decided on its product concept and marketingstrategy it can evaluate the business attractiveness of the proposal. , Business analysisinvolves a review of the sales costs and profit projections for a new product to find outwhether they satisfy the companies objectives. If they do the product can move to theproduct development stage.

To estimate sales the company might look at the sales history of similarproducts and conduct surveys of market opinion. It can then estimate minimum andmaximum sales to assess the range of risk. After preparing the sales forecastmanagement can estimate the expected costs and profits for the product, includingmarketing R and D manufacturing accounting and finance costs. The company thenuses the sales and costs figures to analyze the new products financial attractiveness.


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8- Commercialization

Test marketing gives management the information needed to make a finaldecision about whether to launch the new product. If the company goes ahead withcommercialization introducing the new product into the market it will face high costs.The company will have to build or rent a manufacturing facility. It may have to spendin the case of a new consumer packaged good between $ 10 million and $200 million foradvertising sales promotion and other marketing efforts in the first year.

The company launching a new product must firs decide on introductiontiming? If Toyotas new electric car will eat into the sales of the companys other cars,

its introduction may be delayed. If the car can be improved furthers or if the economyis down the company may wait until the following year to launch it. Next the companymust decide where to launch the new product in a single location a region the nationalmarket or the international market. Few companies have the confidence capital and

capacity to launch new products into full national or international distribution. Theywill develop a plane market rollout over time. In particular small companies may enterattractive cities or regions one at a time. Larger companies however may quicklyintroduce new models into several regions or into the full national market.

Q.8. Define the three steps of target marketing: Market segmentation, market targetingand positioning in detail.

Ans Target MarketingTarget Marketing is defined as a set of buyers share in commonly needs or

characteristics that the company decided to serve .Market segmentation

Market segmentation refers to dividing a market in to distinct groups of buyers onthe bases of needs , characteristics, or behavior who might require separate productare marketing mixes .Market segmentation reveals the firms market segment opportunities. The firm nowhas to evaluate the various segments and decide how many and which ones to target.we now look at how companies evaluate and select target segments.

Market segments

In evaluating different market segments a firm must look at three factorssegment size and growth segment structural attractiveness and company objectivesand resources. The company must first collect and analyze data on current segmentsales growth rates and expected profitability for various segments. It well be in salesgrowth rates and expected profitability for various segments. It will be interested insegments that have the right size and growth characteristics. But right size andgrowth is a relative matter. The largest faster growing segments are not always the


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most attractive ones for every company. Smaller companies may lack the skills andresources needed to serve the larger segments or may find these segments toocompetitive. Such companies may select segments that are smellers and lessattractive in an absolute sense but that are potentially more profitable for them.

After evaluating different segments the company must now decide which

and how many segments to serve. This is the problem of target market selection. Atarget market consist of a set of buyers who share common needs or characteristicsthat the company decides to serve shows that the firm can adopt one of three marketcoverage strategies undifferentiated marketing differentiated marketing andconcentrated marketing.

Target market

A set of buyers sharing common needs or characteristics that the company

decides to serve is called target market . The group of customer for whom the

sellers design a particular marketing mix is a target market.

Ultimate Consumer Business UserSegmenting the Customer Marketing Geographic Demographic Psychographics BehavioralUndifferentiated marketing

A market coverage strategy in which a firm decides to ignore marketsegment differences and go after the whole market with one offer. Using anunderestimated marketing strategy a firm might decide to ignore market segmentdifferences and go after the whole market with one offer. This mass marketingstrategy focuses on what is common in the needs of consumers rather than on whatis different .the company designs a product and a marketing programs that willappeal to the largest number of buyers. It relies on mass distribution and massadvertising and it aims to give the products a superior image in peoples minds anexample of undifferentiated marketing is the Hershey companys marketing some

years ago of only one chocolate candy bar for everyone.

Differentiated marketing

Differentiated marketing is a market coverage strategy in which a firm decides totarget several market segments and designs separate offers for each. Using adifferentiated marketing strategy a firm decides to target several market segmentsto niches and designs separate offers for each. General motors try to produce a carfor every purse purpose and personality.


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Concentrated marketingConcentrated marketing is a market coverage strategy in which a firm goes after alarge share of one or a few sub markets. A third market coverage strategyconcentrated marketings especially appealing when company resources are limited

instead of going after a small share of a large market the firm goes after a large

share of one or a few sub markets. For example Oshkosh truck is the words largestproducer of airport rescue trucks and front-loading concrete mixers recycled paperproducts concentration the market for alternative greeting cards and solo naturalsodas concentrates on a narrow segment of the soft drink market.

3-Product positioning

The way the product is defined by consumers on important attributes the place theproduct occupies in consumers minds relative to competing products. Once acompany ahs decided which segments of the market it will enter it must decide whatpositions it wants to occupy in those segments. A products position is the way the

product is defined by consumers on important attributes the place the productoccupies in consumers minds relative to competing products.

Thus tide is positioned as a powerful all-purpose family detergent solo is positionedas a liquid detergent with fabric softener lovely snow is positioned as the gentledetergent for fine washables and baby clothes. In the automobile market Toyotatersely and suburb is positioned on economy Mercedes and Cadillac on luxury andPorsche and BMW on performance Volvo poisons powerfully on safety.

Positioning strategies

Marketers can follow several positioning strategies. They can position theirproducts on specific product attributes Honda civic advertises its low prices BMWpromotes performance produces d an be positioned on the needs they fill or thebenefits they offer crest reduces cavities aim tastes good or products can bepositioned according to usage occasions in the summer Gatorade can be positionedas a beverage for replacing athletes body fluids in the winter it can be positioned asthe drink to sue when the doctor recommends plenty of liquids. Another approach isto position the product for certain classes plenty of liquids. Another son improvedthe market share for its baby shampoo from three percent to fourteen percent byrepositioning the product as one for adults who wash their hair frequently and needa gently shampoo.

After segmenting markets so that the firm can target particular customer groups,the next step is to find out what customers want and expect. This takes analysis andresearch. A severe mistake is to assume the firm knows what customers want andexpect. Countless research studies reveal large differences between how customersdefine service and rank the importance of different service activities and howproducers view services. Identifying target customers upon whom to focusmarketing efforts sets the stage for deciding how to meet the needs and wants of


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particular consumer groups. The following stops are required in productpositioning Select key criteria that effectively differentiate products or services in the

industry. Diagram a two-dimensional product-positioning map with specified criteria

on each axis. Plot major competitors products of services in the resultant four-quadrantmatrix.

Identify areas in the positioning map where the companys products orservices could be most competitive in the given target market, look forvacant areas

Develop a marketing plan to position the companys products or servicesappropriately.

Choosing and implementing a positioning strategySome firms find it way to choose there position strategy for example a firm

well known for quality in certain segments will go for this position in a new segment

if there are enough buyers seeking quality in many cases tow or more firms will goafter the same position. Then each will have to find other ways to set itself apartsuch as promising high quality for a lower cost or high quality with more technicalservice. Each firm must differentiate its offer by building a unique bundle ofcompetitive advantages those appeals to a substantial group within the segment.Competitive advantage

An advantage over competitors gained by offering consumers greater value eitherthrough lower prices or by providing more benefits that justify higher prices.

Identifying possible competitive advantages

Consumers typically choose products and services that give them the greatest value.Thus the key to winning and keeping customers is to understand their

needs and buying processes better than competitors do and to deliver more value.To the extent that a company can position itself as providing superior value toselected target markets either by offering lower prices or by providing more benefitsto justify higher prices it gains competitive advantage.

Q. 6 a) Describe the stages of the product life cycle.

b) Describe how marketing strategies change during the product life cycle.

AnsPart ( a) Stages of the product life cycle.

The product life cycle

Product passes through a life cycle. A product life cycle represents the stages that aproduct goes through in its life. There are four stages of the life cycle. Introduction


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growth maturity and decline as each stage on the product life cycle is reachedmarketers must adjust their product mix and their marketing strategies to ensurecontinued sales.Managing during the introduction stageWhen the product is introduced to the market the focus of the company efforts is on

promotion and production. The major goals are to draw the customer attention tothe new product. For example compact displayers were introduced to the usemarket in 1983. By 1985 600,000 units had been sold.The company worked to build its sales by increasing product awareness. Specialpromotion may be tried to get the customer to try the new product. As you know thecosts of introducing a product are high thus this is usually the least profitable stageof the life cycle.

Managing during the growth stageDuring the growth phase of the product life cycle the product is enjoying success asshown by increasing sales and profits. Much of the target market knows about and

buys the product. Advertising may now focus on consumer satisfaction rather thanon the new product benefits. By this time the competition is aware of the success ofthe product and is likely to offer new product. In order to compete to keep itsproduct sales growing the company may have to introduce new models or modifythe existing product to offer more than the competition.

Using the compact disc player example by 1986 the produced had entered its growthstage sales of CD players now amount to several million units a year and severalcompanies offer competing products.

Managing during the maturity stageA product reaches the maturity stage when its sales level off or slow down. Theproduct may have more competition now or most of the target market may alreadyown the product for example when a large proportion of potential buyers have a CDplayer sales will slow and the product will enter the maturity stage.

During the is stage a company spends more of its marketing dollar fighting of thecompetition advertising expenses may climb and the company may have to decidewhether it can continue to improve the product to gain additional salesDuring the decline stage sales fall. Profits may reach a; point where they are smallearth costs. Management will need to decide how long it will continue to support theproduct.Besides dropping the product the company can use other product mix strategies totry to gain further sales from a declining of falling product. These strategies includeselling or licensing the product recommitting to the product line discounting theproduct regionalizing the product and modernizing or a altering the product.

This product life cycle would probably be representative of a twelve-month activity.Most executives prefer short data processing life cycles because computertechnology changes at a very rapid rate. An executive of a major utility commented


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that his company was having trouble determining how to terminate a computerprogramming project to improve customer service because by the time a package isready for full implementation, the solution appears to lie in establishing short dataprocessing project life cycle phases perhaps through segmented implementation. Inany case we can conclude that:

There are several reasons for this trend.

Clear delineation of the work to be accomplished in each phase may be possible. Pricing and estimating may be easier if well-structured work definitions exist. There exist key decisions points at the end of each life cycle phase so that

incremental funding is possible.

Part (b) How marketing strategies change during the product life cycle.Product life cycle marketing

After launching the new product management wants the products to enjoy a

long and happy life. Although it does not expect the product to sell fever the company

wants to earn a decent profit to cover all the effort and risk that went into launching it.Management is aware that each product will have a life cycle although the exact shape

and length is not known in advance.

Show a typical product life cycle PLC the course that a products sales and profits

take over its lifetime the product life cycle has five distant stages.

1. Product development begins when the company finds and develops a new productidea during product development sales are zero and the company investment costs

mount.

2. Introduction is a period of slow sales growth as the product is introduced in themarketer profits is nonexistent in this stage because of the heavy expenses of

product introduction.

3. Growth is a period of rapid market acceptance and increasing profits.4. Maturity is a period of slowdown in sales growth because the product has

achieved captaincy by most potential buyers. Profits level offer decline because of

increased marketing outlays to defend the product against completion.

5. Decline is the period when sales fall off and profits drop.For achieving better marketing performance of

Products portfolio and Market position it is essential to manage the market life cycle.

Example

Ccalculating power


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Ttechnologies life cyclesfinger counting, abacuses, slide rules, adding machines,calculators, computers. Each new technology usually satisfies the generic need in asuperior way

Four issues arise for the market-led organization

New customer New competitors New type of organization New ways of doing business

The sales and profits of individual brand cycle may not and often do not follow thelife cycle pattern. Brand essence

A statement of how the brands is defined

Factsrational aspects what the product does for me, how i would describe theproductFeelingsemotional aspects how the brands make me feel, how the brands makeme look.BCGThe Boston Matrix classifies a companys products in the term of relative marketshare and market growth rate. Importance of maintaining a balance of productsin the portfolio at different stages of the PLCBoston Matrix helps with themarket life cycle analysis


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Q.No. 7a) Define direct marketing and discuss its benefits to customers and companies.b) Identify and discuss the major forms of direct marketing.AnsPart (a)

Definition of Direct marketing

Direct marketing campaign that use multiple vehicles and multiple stages to responserate.

Reflection the trend toward more targeted and one to one marketing directmarketing is now the fastest growing form of marketing benefits of direct marketing tocustomers and sellers and the reasons of its rapid growth. Direct communication with


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carefully targeted individual consumers to obtain an immediate response. The mostrapid growing area of direct marketing is online marketing.

The benefits of direct marketing to its customers and companies

Q. No. 7

(a) Define direct marketing and discuss its benefits to customers and companies.

b) Identify and discuss the major forms of direct marketing.

Ans part (a)

Definition of Direct marketing .

Direct marketing is campaign that use multiple vehicles and multiple stages to

response rate.

Direct marketing is a communications with carefully targeted individuals

consumers to obtain an immediate response.

Benefits to customers and companies

Benefits to customers:

Direct marketing benefits customers in many ways. Consumers report that homeshopping is fun convenient and hassle free. It save time and introduces them to a larger

selection of merchandise. They can do comparative shopping by browsing through mail

catalogs and online shopping services then order products for them selves other or.Industrial customers can learn about available products and services without waiting for

and trying up time with salespeople.

Sellers also benefit direct markets buy mailing lists constraining names of

almost any groups millionaires new parents left handed people or recent college

graduates. They can then personalize and customize their message with todaystechnology a direct matter can select small groups of even individual consumers cauterize

offers to their special needs and wants and promote these offers thorough individualized

communications.


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The direct marketers can bold an ongoing relationship with each customer.

For example nestle baby food division maintains a database or new parents and maids

them six personalized packages of gifts and advice at key stages in the babys life. Directmarketing can also be timed to reach prospects at just the right moment. Because they

reach more interested consumers at the best times direct marketing materials receive

higher readership and response. Direct marketing also permits easy testing of alternativemedia and message. Finally direct marketing provides privacy the direct markets offer

and strategy is less visible to competitors. It consists of direct communication with

carefully together individual customer to obtain an immediate response. Under thismethod the segment may be an individual customer or group of customers. It is sort of

direct relationship marketing.

Other benefits of Direct Marketing are as under

Sometime home shopping is considered fun. It save time of seller and buyer. Seller can customize their message according to target customer (old people,

college graduates). Shopping is competitive (more choices in short time). It provides privacy.Benefits to companies .

Two way message. Economies of scope. Customized production. Identify prospects. Deciding which customer should receive a particular offer. Deepening customer loyalty. Reactivating customer purchases. Company profitable. Company incentives. Customized market offering Mass promotion. Mass distribution. Share of market.

Ans Part (b) Major forms of Direct MarketingFace to face selling

Direct mail marketing Fax E mail Voice mail Catalogue marketing Telemarketing Direct response television marketing


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The major forms of direct marketing as shown in include face to face selling

direct mail marketing catalog marketing telemarketing direct re spouse televisionmarketing kiosk marketing and online marketing.

Face to face selling

The original and oldest form of direct marketing is the sales call, which we

examined, in the previous chapter. Today most business-to-business marketers relyheavily on a professionals sales force to locate prospects develop them into customers

build lasting relationships and growth the business.

Customers and prospects

1. Face to face selling2. One lien marketing3. Kiosk marketing4. Direct response television marketing5. Telemarketing6. Catalog marketing7. Direct mail marketing

Direct mail marketing

Direct marketing though single mailings that include letters ads samplesfoldouts and other salespeople with wings sent to prospects on mailing lists. Direct mail

marketing involves sending an offer announcement reminder or other items to a person at

a particular address. Using highly selective mailing lists direct marketers send outmillions of mail pieces each year letters ads samples fold outs another salespeople with

wings direct mail is well suited to direct one to one communication. It permits high target

market selectivity can be personalized is flexible.

Catalog marketing

Catalog marketing involves sealing through catalogs mailed to a select lsit of

customers on made available INS stores. Some huge geranial merchandise retailers suchas J C. Penney and Spiegel sell a full lien of merchandise though cataloged but recently

the giants have been challenged by thousands of specialty catalogs that serve highly

specialized market niches. As a result sears discontinued in 97-Year-old annual big bookcatalog in 1993 after years of unprofitable operations opting instead to putts name of o n

dozens of smaller more specialized catalogs.


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Telemarketing

Telemarketing using the telephone to sell directly to consumer has become

the major direct marketing communication tool. Marketers use outbound telephonemarketing to sell directly to consumer sand business. Inbound toll free eight hundred

numbers are sued to receive orders from television and radio ads direct mail or catalogs.

Direct response television marketing

Direct response televisions marketing takes one of two major forms. The first is directresponse advertising. Direct marketers air televisions spots often sixty of one twenty

seconds long that persuasively des have a product and give customers a toll free number

for ordering. Television viewers often encounter thirty minute advertising programs of

infomercials for a single product such direct response advertising works well formagazines books small appliances tapes and CES collectibles and many other products.

Kiosk marketing

Some companies place information does ordering machines called kiosks in

contrast of vending machines which dispense actual products in stores airports and to therelocations. Hallmark and American greetings sue kiosks to help customers create

personalized cards lee jeans stores use a kiosk called fit finder to provide women with a

quickie way to determine the size and style of lee jeans to fit their personal preference

tower records has listening kiosks that let customers listen to the music before purchase.Car max the used car superstore sues a kiosk with a touch screen computer to guide

consumers through the vast inventory of as many as 1000 cars and trucks customs can

choose a handful and print out photos prices features and location on the stores lot.

Business markers also sue kiosks. For example Dow plastics place kiosks at

trade shows to collect sales leads and to provide information on its seven hundred

products.

The kiosk system reads customer data from encoded registration badges and

produces technical data sheets that can be printed at the kiosk or faxed or mailed to the

customer. The system ahs resulted in a four hundred percent increase in qualified salesleads.

Q.1 Describe the companys microenvironment & macro environment that affect thecompanys ability to serve its customers.

Ans


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Companys MICRO ENVIRONMENT

The MarketIt is a place where people or organizations are: With want to satisfy

Ability and willingness to spend money Individual or group of people will provide products / servicesIn market three factors affects the companys ability to serve its customers. People or organization with needs Their purchasing power Their buying behavior

Suppliers

Market

Market Intermediaries


Company

Marketing

Plan

Supplier: That provides raw material


These are independent business organizations that directly aid in the flow of goodsand services market organizations and its markets e.g. Distributors Transportationand all other who provide these goods which we need

Types of Intermediaries

i. Middlemanii. Facility OrganizationsOrganizations Internal Environment


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It includes all internal activities of organizations

Human resources department Administration Finance/Accounting

Marketing Production Research and Development (R&D)Impulse Buying: Without thing purchase

Cognitive Dissonance: First we think about the thingsMacro Environment

External Macro Environment

Different types of factors affects

1. Demographic2. Economic condition3. Competition4. Social and Cultural5. Political and Legal6. Technological

Company

Marketing

Program

ii

Viv

iii

1-Demographic Environment

It is the study of human population in terms of size density, location, age, gender, raceoccupation etc.e.g. size of population, nature of occupation

2-Economic Conditions

Factors that affect consumer buying power and spending patternse.g. interest rate, Inflation, Rate of Exchange

Stage of Business Cycle

ProsperityPeriod of economic growth RecessionPeriod of retrenchment of consumers Depressiondecline of business RecoveryWhen economy is moving from recession to prosperity


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Inflation: Rise in the prices of goods and services It effects consumers psychology and marketing programsInterest Rate

It means profit margin of manufacturer. Interest rate is inversely proportional topurchases

3-COMPETITION

Brand Competition: It comes from marketers of directly similar products

Substitute Product Competition: Competition between those products that satisfysame need.

General Competition

Company to company for developing public image e.g. Cash distribution to some charity4-SOCIAL & CULTURAL FORCES

These factors affect societys basic values, perceptions, preferences and behaviors.

Changing gender roles (women attitude towards careers)Belief -> Religion - > Value Ethics -> Culture Time Physical fitness and health5-POLITICAL & LEGAL FORCES

Laws: Government agencies that influence and limit various organization andindividuals in a given society

- There are grouped in three categoriesi. Monetary and fiscal policiesii. Social Legislation and regulationiii. Governmental relationship with industries

6-TECHNOLOGICAL FORCES

These forces create new technologies by creating new products and marketopportunities.


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It effect markets in three ways

By satisfy entirely new industries e.g. laser computers etc. Altering or destroying existing industries By stimulating markets and industries not related to current market

Q. 3 Identify and define the internal and external factors affecting a firmsPricing decision.

Ans. Factors to consider when setting pricing decision

A company pricing decision is affected both by international companyfactors and external environmental factors. To starts price planning begins with ananalysis of costs and expense, many of which are related to current marketconditions. Fox example the cost of raw materials may increase manufactures coststo

Raw materials may increase manufactures costs to make an item. Howeverit is not that simple the manufacture must consider the effect the higher price willhave in the marketplace. Howe will it affect demand consumer perceptions andbuying habits. And the competition

Internal & External factors affecting pricing decision

Internal factors affecting pricing include the company marketing objectivemarketing mix strategy costs and organization.

Marketing objective

Before setting price the company must decide on its strategy for the product.if the company has selected its target market and positioning carefully, fox exampleif general motors decides to produce a new sports car to compete with Europeansports cars in the high income segment ;this suggest charging a high price. Red roofin have positioned themselves as motels that provide economical rooms for budgeminded travels this position required charging a low price. Thus pricing strategy islargely determined by decisions on market positions.

Marketing mix strategyPrice is only one of the marketing mix tools that a company uses to achieve

its marketing objectives prices decisions must beer coordinated with produced

design distribution and promotion decision to form consistent to9 form and effectivemarketing program. The decision to position the product on high performancequality will mean that the seller must charge a higher price to cover higher costs.

Costs & Expenses

Costs set the factors for the price that the company can charge for ties product. Thecompany wants to charge a price that both cover all its costs for producing. A


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company costs may be an important element; in its pricing strategy.In today competitive economic environment, businesses constantly monitor analyze.And project prices and sales in the light of cost and expenses. They do this becausesales costs and expenses together determine a firm profit.

Responses to declining profit margins

What do marketers do when costs or expenses increase or when salesdecline. How do they maintain their profit margins? Do they change their prices?Some do and some find other ways to improve their profit picture. They will reducethe size of an item before they will change its price. For example a candymanufacturer might reduce a candy bar from ounces rather than increase its price.The manufacturer could still make a profit at the established price provided ofcourse the same quantity continued to be sold.

Responses to lower costs expenses

On occasion prices may actually drop because of decreased costs andexpenses. Aggressive firms are constantly looking for way to increase efficiency andthus decrease costs. Improved technology and less expensive but better qualitymaterials may help create better quality product at lower costs.Break even point

Manufacturers are always concerned with making profit .they areespecially concerned however in two situations when marketing a new product andwhen trying to establish a new price. They do this by calculating their break-evenpoint. The break-even point is the point at which sales revenue equals the costs andexpenses of making and distributing a product

Competition

Because price is one of the four of the marketing mix, it must beevaluated in relation to the target market. When its target market is price conscious,a company can use a lower price to appeal to that market.

As you learned non price competition minimizes price as a reason forpurchase. Instead it creates a distinctive product through such means as productavailability and customer service. the more unusual a product is perceived to beconsumers.Example

If the manufacture of tide detergent reduces its prices its competitors are likelyto do the same. The benefit of this kind of competition is low prices for consumers.When competitors engage in a fierce battle to attract customers by lowering prices aprice war is the result. He problem with rice wars is that firms reduce their profitwhile trying to undercut. Their competitors prices and attract new customers. Thismay result in excessive financial losses and in some cases actual business failure.


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Organizational considerationsManagement must decide who within the organization should set price

companies handle pricing in a variety of ways. In large companies pricing istypically handled bogy divisional 9or produced line managers. In doctrinal marketssalespeople may be allowed to negotiate with customers within certain price ranges.

1st assignment of marketing

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