11: Strategies for products and markets

Question 1

Define marketing

Answer 1

The management process that identifies, anticipates and supplies customer requirements efficiently and profitably

Question 2

How do we compete in the market?

Answer 2

Generic strategy (Differentiation/cost)

Product/market (New markets/product/refinements)

Orientation (Product, production, market, sales)

Question 3

What is it needed to be done for marketing?

Answer 3

Market research, positioning, targeting, segmentation

Question 4

Customer vs consumer

Answer 4

Customer - purchases and pays for goods, may be part of longer customer chain

Consumer - ultimate user of g&s

Question 5

Explain four orientation approaches to marketing

Answer 5

Product orientation - business makes products they want for themselves and know will sell in market

Production orientation - products provided to an audience where its highly likely to sell regardless of marketing e.g. beans

Market orientation - Company conducts exhaustive research so it has ready made customers upon launch

Sales orientation - marketed aggressively, somet customers wouldn’t naturally seek to buy

Question 6

What is market segmentation? How can it be done?

Answer 6

Division of the market into separately identifiable sub-units to help target the marketing effort. Can be split by:

-Mass/undifferentiated - no separate customer segments identified e.g. sugar

-Niche/concentrated - concentrate on one or market segments only

-Micro - products and services tailored to individual needs e.g. moonpig

Question 7

What is the benefits of segmentation?

Answer 7

• Org can identify new marketing opportunites
• Specialists can be used for each of org’s major segments
• Marketing budget can be allocated proportionally to each segment, optimising ROI
• Org can try dominate particular segments through competitive advantage from a strategy

Question 8

What are the bases for segmentation?

Answer 8

• Type of customer e.g. consumer/ business
• Location of customer
• Demographic factors e.g. age/gender
• Lifestyle of customer e.g. socially aware
• Behavioural needs-based e.g. tech savvy
• Contextual life changing event e.g. baby

Question 9

Explain targeting and what it depends on

Answer 9

Selecting market segments with the most potential for a return. Attractiveness depends on it being:

• Measurable: ability to forecast sales/mareket potential
• Accessible: ability to make and distribute a product to a market
• Stable: likelihood that the segment will persist for sufficient time to enable a ROI of developing a marketing mix on it
• Substantial: profits available will give an adequate return on capital employed
• Defensible: barriers to entry to allow firm some dominance

Question 10

Explain positioning

Answer 10

The overall location of a produt in a buyer’s mind in relation to other competing products/services/brands.
Position based on factors such as cost/value/quality

Can be used to represent the market and spot opportunities

Question 11

Explain market research

Answer 11

the systematic gathering, recording and analysing of info about problems relating to the marketing of goods and services. Used to form the marketing mix

Question 12

What are the areas for market research?

Answer 12

• Market itself: wants, needs, size
• Products: features, safety, durability
• Pricing: competitor prices, acceptable/target prices
• Promotion: methods, targeting data
• Distribution: onwards customer chain, determining margins against recommended retail prices

Question 13

What are the stages involved in market research?

Answer 13

• Defining problems, setting objectives
• Developing hypotheses
• Research (Desk/field)
• Data collection
• Analysis and interpretation
• Conclusions and recommendations

Question 14

What is desk research vs field research

Answer 14

Desk - gathering and analysing existing (secondary) data from internal and external sourecs

Field - collection of new (primary) information direct from respondents. E.G. Individual and group interviews, trial testing/focus groups, observation of processes, questionnaires.

Question 15

What are three essential features of branding

Answer 15

Name - should be legally protected and memorable

Livery - design, trademark,symbols, visual/identifable features

Associations of personality - helps a brand distinguish their product from competing products in the eyes of the user.

Question 16

What are brand policies an organisation can adopt?

Answer 16

Single company name - simple and builds on existing brand e.g. virgin

Different brand for each product e.g. unilever

Own branding - supermarkets own to create loyalty to store

Question 17

Explain brand positioning

Answer 17

Quadrant map with a trade off between price and quality, refer to book p121

High p low q: Cowboy High p high q: premium
Low p low q: Economy Low P high q: Bargain

Question 18

What is brand equity

Answer 18

An intangible asset that adds value to a business through positive associations made by consumer between brand and the benefits they enjoy

Question 19

What is the marketing mix?

Answer 19

the set of controllable marketing variables that a firm blend to produce the response it wants in the target market .
7ps:
Product, place, promotion and price for products and services

People, processes and physical evidence for services marketing

Question 20

Explain product

Answer 20

Good or service that customer buys and experiences. Made up of 3 elements:

• Basic product: e.g. car - the core of the product
• Actual product: e.g. BMW 5 Series - features/specific
• Augmented product: .g. BMW M5 with optional extras, GAP insurance, finance lease etc. Therefore G&S+ Extras

Question 21

What is the product development strategy

Answer 21

Develop or create:
- Entire new products
- New product features through adapting existing features
- Different quality versions/models/sizes

Question 22

What are the product classifications for global marketing?

Answer 22

Local products - only suitable in home market

International products - seen as having extension potential into other geographical markets

Multinational products - products adapted to the unique characteristics of national markets

Global products - worldwide without differentiation e.g. big mac same everywhere

Question 23

Explain Place

Answer 23

Orgs must decide the best way to get their products to the customer through distribution strategy

Question 24

Explain distribution channels

Answer 24

Direct distribution - directly from producer to consumer without use of intermediary e.g. online shopping, personal selling

Indirect distribution - systems of distribution which use an intermediary - can buy in bulk make most of EOS and better access to target market

Question 25

What are the types of intermediary

Answer 25

Retailers - sell directly to consumers Wholesalers - stock a range of products from competing manufacturers to sell to retailers Distributers - contract to buy a manufacturers goods and sell them to customers Agents - dont purchase the manufacturers goods but make commission on sales they make Franchisees - independent orgs that are allowed to trade under name of another org for an inital fee and share of sales revenue

Question 26

How can businesses sell and distribute in overseas markets?

Answer 26

- Can sell to a distributor who sells their products locally - Sales agent who sells product on their behalf on a commission basis - Joint venture with a local business - Set up own local office

Question 27

What is the promotion mix?

Answer 27

Consists of four elements - Advertising - Sales promotion - Public relations - Personal selling Described in terms of push and pull effects

Question 28

Explain push and pull effects

Answer 28

Pull effect is when consumers ask for brand by name Push effect is targeted on getting the company's goods into the distribution netowrk

Question 29

What is above and below line promotional activities

Answer 29

Above line - promotional activity that customer sees e.g. advertising Below line - non-media promotional e.g. displays, shows, exhibitions, incentive to intermediaries to stock up their product

Question 30

Explain advertising and its objectives

Answer 30

Designed to influence customers favourably regarding a G/S - Communicate info about a product - Create awareness of new products - Hihglight unique selling proposition - Increase sales/profits Advertising classed under 3 headings

Question 31

How is advertising classed

Answer 31

Informative advertising - conveying information and raising consumer awareness of the product. Usually for introduction of product Persuasive advertising - creating a desire for product and stimulating actual purchase. Growth/maturity stage for well-established products Reminding advertising - reinforcing knowledge held by potential consumers, reminding existing consumers of the benefits of their product

Question 32

Explains sales promotion

Answer 32

Stimulate consumer purchasing and dealer effectiveness

Question 33

Explain public relations

Answer 33

Creation of positive attitudes regarding products/services/companies.

Question 34

Explain personal selling

Answer 34

Sales force makes contact with potential customers on a one-to-one basis. also includes delivery, repair staff and call centre staff who have regular contact with the customer

Question 35

What are the principles of pricing?

Answer 35

the pricing decision is presented as a balance between the Three c's - Costs: products need to recover their costs to make a profit - Customers: the price that customers will bear to buy the product or service - Competitors: a benchmark against which a product is judged 4th C = corporate objective - max profits, obtain ROI, target revenue/MS

Question 36

PED

Answer 36

Responsiveness of QD to a change in price %Change in QD / % Change in Price

Question 37

Price discrimination

Answer 37

The setting of prices for a similar product in different parts of the market

Question 38

What are the different methods of differential pricing?

Answer 38

Market segment: Priced to appeal to different market segments Product version: Price changes depending on model/added extras Place: price impacted by location or convenience Time: Price impacted by time of day or season Dynamic: Price varies according to levels of demand

Question 39

List pricing decisions

Answer 39

Market skimming Predatory pricing/dumping Value pricing Penetration pricing Promotional pricing

Question 40

Advantages of a cost-plus approach

Answer 40

- Simplicity of price setting - Control of sales discounting - Ease of budgeting - Easy to state rates of mark-ups in contracts with the government so profits are deemed fair and not excessive

Question 41

Disadvantages of a cost-plus approach

Answer 41

- Ignores the effect of volumes on cost - Useless for very high fixed cost industries - May not suit positioning of the product ( could be undersold or overpriced) - Ignores competitive conditions

Question 42

Explain people as one of 7ps

Answer 42

People are particularly important in the service industry as the service cannot be separated from the staff who deliver it.

Question 43

Explain processes

Answer 43

It is more difficult to control the processes that will be employed in delivering the service. Processes need to be consistent to assure high quality of service to customers

Question 44

Explain physical evidence

Answer 44

Evidence of the service so the customer has something to pay for

Question 45

What is transaction marketing?

Answer 45

A marketing mix that gets customers to buy a product or service that satisfies their needs, perhaps in a single sale, without any sort of LT relationship with them.

Question 46

What is relationship marketing

Answer 46

Management processes that seek to attract, maintain and enhance customer relationships by focusing on the whole satisfaction experiences by the customer. Creating a long-lasting relationship with customers. Key characteristics: - Customers are individuals - Existing customers preferred over new ones - Based on interactions and dialogues

Question 47

How can relationship marketing be developed?

Answer 47

- Loyalty schemes: supermarket cards, company clubs etc - Personalisation programmes: amazon recommending prodcuts to suit returning customers - Structural ties: providing customers with computer equipment to managers orders e.g. just eat terminals to takeaways

Question 48

Why has relationship marketing grown?

Answer 48

- Increasing cost of attracting new customers - Marketing strategies based on product development: importance of selling more to existing customers - Increased capabilities of information technology

Question 49

Give some ethical concerns of marketing

Answer 49

- If people do not need the products marketed to them, their production wastes resources - Companies may use pricing to be selective to whom they sell their products to - Percieved benefits may be unrealistic or dishonest