MARKETING: Strategies

Question 1

Identify the 7P’s of the extended marketing mix

Keep in mind that extra 3P’s were introduced as a result of the expansion of service based industries

Answer 1

Product
Price
Promotion
Place (distribution)

People
Processes
Physical evidence

Question 2

What falls under the marketing strategies?

Answer 2

The best way to remember it:
- Market segmentation
- Product/service differentiation and positioning
- 7P’s (list all of them)
- E-marking
- Global marketing

Question 3

Define market segmentation and its ultimate aim

Answer 3

Market segmentation involves dividing the total market into segments. The business then selects the target market at which majority of marking resources will be directed at. The aim is to increase sales, market share and profits by better understanding and responding to the desires of the particular group of customers.

Question 4

How is Don’t Be Gay Please related to market segmentation?

Answer 4

Refers to the characteristics of customers that are used to divide the total market into segments:
Demographic
Behavioural
Geographic
Psychographic

Question 5

List examples of demographic, behavioural, geographic, and psychographic characteristics

Answer 5

Demographic:
Age, Sex, Income, Family size, Occupation, Education, Ethnicity.

Behavoural:
Loyalty, Usage Rate, Price Sensitivity, Benefits Sought,

Geographic:
Region, Urban, Suburban, Rural, City size, Climate,

Psychographic:
Lifestyle, Personality, Motives, Customer Opinions & Interests

Question 6

What does product/service differentiation involve?

Answer 6

Differentiation is the process of distinguishing the products/services of the business from the competitors. It aims to persuade consumers to perceive the product or service as being superior to all similar products, therefore, influencing them to buy it.

Question 7

Identify the 4 points of differentiation

Answer 7

Customer Service, Environment Concerns, Convenience, Social/Ethical

Question 8

Outline each of the 4 points of differentiation

Answer 8

Customer Service - Service given to customers that caters their specific need that treat customers with high quality and value. This helps serve as the foundation of a final impression on the business

Environment Concerns - Concerns about “quality of life” amongst customer, increasing awareness about environmental issues. Consumers would therefore choose businesses that act sustainable

Convenience - Choosing of products that maximises customers comfort, making their life easier (e.g precut veggies, and already marinated chicken)

Social/Ethical - Concerns about the way the goods are made, including conditions in factories. Businesses that act ethically by creating the products that do not harm the environment, animals and society, have a competitive advantage over the businesses that don’t (i.e., H&M study of 1000 clothing factories found fashion firms engaging in unfair practices, making consumers less likely to purchase their products

Question 9

What is referred to by product/service positioning?

Answer 9

Product positioning refers to the technique in which marketers try to create an image or identity for a product/service compared with the image of competing products/services.

Question 10

Provide relevant example of product/service positioning

Answer 10

Dominos launched a new menu that reduced their sizes of pizzas as well as increasing their prices to appear that they have a higher quality brand, in an attempt to change their given reputation of their low quality pizza

Question 11

What are products?

Answer 11

Products are goods/services offered for satisfying needs/wants

Question 12

What are the three subtopics of products (strategy)

Answer 12

• Branding
• Packaging
• Labelling

Question 13

What does the total product concept encompass?

Answer 13

The total product concept includes both tangible and intangible components of a product.

Question 14

Describe a manufacturer’s brand.

Answer 14

Owned by the manufacturer and highly recognised by customers due to established reputation and quality.

Question 15

Describe a house brand.

Answer 15

Owned by a retailer or wholesaler. Priced lower than manufacturer’s brands, found only in the stores of the retailer that owns them.

Question 16

Describe a generic brand.

Answer 16

No owner: no brand name, and is typically marketed under the store’s name. Usually priced lower than both manufacturer’s and house brands, and focus on providing basic quality and affordability.

Question 17

What is branding? What are the benefits of it for both business and its customers?

Answer 17

Branding is the process of customers recognising the business based on the particular features such as logo, colours, slogans, symbols, designs that set them apart form the competitors.

For the business:
+ Branding results in business recognition which leads to the repeated sales
+ Encourages customer loyalty
+ New products are easily introduced into the market and can be linked to the existent brand image
+ Promotion of one products indirectly promotes another

For customers:
+ Less perceived risk due to brand recognition
+ Less anxiety associated with choosing between random products and rather going for the brand that you are certain about in terms of quality
+ Psychological reward from purchasing the brand that you like

Question 18

Describe the importance of packaging for a product.

Answer 18

Packaging is crucial as it develops a container and graphic design for a product, preserving and protecting it, capturing consumer attention, providing convenient units, assisting with display, and facilitating transportation and storage.

Question 19

Explain how well-designed packaging can influence consumer perception.

Answer 19

Well-designed packaging can give a positive impression of the product, making it more appealing and increasing brand awareness. It can also become an integral part of the product’s identity, like the Coca-Cola bottle, which is recognisable by its shape.

Question 20

What information is typically presented on a product’s label.

Answer 20

Ingredients, package size, and country of origin are typically presented on a product’s label.

Question 21

Describe the purpose of labelling on a product package.

Answer 21

Labelling provides essential information about the product, including its ingredients, size, and country of origin, which helps consumers make informed purchasing decisions.

Question 22

Explain why accurate labelling is important for consumer trust.

Answer 22

Accurate labelling is important for consumer trust because it ensures that consumers have the necessary information about what they are purchasing, which helps them make informed decisions and fosters confidence in the brand.

Question 23

Recall the relevant case study for PRODUCT BRANDING AND PACKAGING

Answer 23

Coca Cola case study. The design and labelling of the Coca-Cola bottle, including its distinctive shape and embossing, help in brand recognition and consumer loyalty. The bottle’s silhouette is so iconic that it can be identified even without seeing the logo, enhancing brand awareness.

Question 24

Describe cost-based pricing METHOD. Identify its advantages and disadvantages

Answer 24

The price is formualted based on the total costs associated with making a product + a markup (which is the perecentage of the total production costs which ensures that all extra costs are covered and profitability is guaranteed).

Adv:
+ Very simple method to establish the price
+ Mark-up allows for the increased revenue

Disadv:
- Difficult to estimate the approapriate mark up that will not be too low or too high
- The price is determined after the production and disregards the external factors in the market

Question 25

Describe market-based pricing METHOD. Identify its advantages and disadvantages

Answer 25

The price is determined according to the interaction of the level of supply and demand.

Adv:
+ Accounts for the changing marketing conditions in supply and demand which ensures profitability

Disadv:
- The prices need to be adjusted frequently so it is difficult to implement

Question 26

Describe competition-based pricing METHOD. Identify its advantages and disadvantages

Answer 26

Competition-based pricing is when the products that is above, equal to or below that of competitors based on the cost of production. If the prices are below that of competitiors the business aims to undercut the market and increase their market share. If they are the same, the business avoids competition and saves R&D costs. IF they are higher, the business aims to establish the “superior” quality impression.

Adv:
+ Distinguishes from competitors which increases profit margins, brand recognition and attracts more customers

Disadv:
- Relying on the performance of competitors can lead to loss of profit

Question 27

Describe skimming pricing STRATEGY. Identify its advantages and disadvantages

Answer 27

Skimming: Involves setting price of product high while demand is high to quickly generate profit. This strategy is usually applicable for new technologies (such as a release of a new model of iphone).

Adv:
+ Recovers R&D costs
+ Generates profit very quickly in a short period of time

Disadv:
- Could lead to customer dissatisfaction, especially for customers that purchased something at X price which has been reduced by a certain amount after some time

Question 28

Describe penetration pricing STRATEGY. Identify its advantages and disadvantages

Answer 28

Penetration: setting price of product on release to lowest possible to promote product selling, stimulating demand.

Adv:
+ Aims to sell as many products as possible to prevent competitors from entering the market

Disadv:
- The business will struglle to raise the price for the product after some time unless there are substantial improvements or modifications to the product made

Question 29

Describe loss leaders pricing STRATEGY. Identify its advantages and disadvantages

Answer 29

Loss-leaders: The products are sold at or BELOW THE COST PRICE. The business is making loss on those products, in a hope that the customers will be attracted and purchase other products from that business. This strategy is usually used when the demand for the product is low or when the business wants to have a reputation of low prices.

Adv:
+ High customer attraction due to low prices

Disadv:
- Could result in loss of profit

Question 30

Describe price points pricing STRATEGY. Identify its advantages and disadvantages

Answer 30

Price points: selling products at predetermined prices. For example, a jeweller may offer a line of watches
priced at $55, $75 and $95 regardless of how much they cost at wholesale.

Adv:
+ Simplifies the decision making for the customers

Disadv:
- Ignores mark up costs and could lead to loss of sales and profits if incorrectly priced

Question 31

Define “Price and quality interaction”

Answer 31

A way to help determine the image customers have of a business, particularly products. For instance, highly priced goods are assumed to have superior quality, along with high manufacturing costs, achieving quality and status. Contrastingly, low-priced goods are perceived as low quality, requiring reduced manufacturing costs, therefore perceived as cheap

Question 32

Recall case study of “Price and quality interaction”

Answer 32

IKEA hires fewer people, furniture bought must be taken by customers, products are packed in flat boxes to save storage in warehousing costs. IKEA is therefore able to save more money aside for other expenses.

Question 33

Identify the elements of the promotion mix

Answer 33

Advertising
Personal selling
Relationship marketing
Sales promotion
Publicity
Public relations

Question 34

Describe advertising in the promotion mix

Answer 34

Paid messages about the product across mass media. Advertising media refers to forms of electronic and print communication used to reach business’s audiences. These include: social media ads, billboards, catalogues, e-marketing, telemarketing.

Question 35

Describe personal selling in the promotion mix

Answer 35

A sales representative attempting to directly reach a customer to make a sale. The message of the sales representative can be altered in such a way that can suit the customer’s needs.

Question 36

Describe relationship marketing in the promotion mix

Answer 36

Development of strong relationships with customers in the hope to create customer loyalty. This is achieved through loyalty programs that provide rewards offered to frequent customers such as Flybuys, Rewards card etc.

Question 37

Describe sales promotion in the promotion mix

Answer 37

Business’s attempting to sell its products by creating enticement to customers, used to gather attention of new customers and increase sales of existing customers. Includes the following:
- Coupons: discounts offered on particular items
- Premiums: gifts offered to customers in return for purchasing a product
- Refunds: return of product for money back
- Samples: free item of a product
- Point-of purchase displays: special signs and displays to gain customer attention

Question 38

Describe publicity in the promotion mix

Answer 38

Free news story that discusses of the business’s products. Differs from advertising, as publicises are done without business’s input of costs, and the message displayed cannot be controlled. The business aims, if publicity is present, to enhance product image, raise awareness, and reduce any potential negative image.

Question 39

Describe public relations in the promotion mix

Answer 39

Activities aimed at formulating favourable relations between business’s and its consumers, such as working with the media, participating in donations, or give-away sales.

Question 40

What is meant by “The communication process”

Answer 40

Methods used to communicate messages of a product. Customers would be more willing to make a purchase if the message is communicated through a channel.

Question 41

Define opinion leaders

Answer 41

Famous people that influence others. Business’s can refer to famous actors, athletes, musicians, and models to assist with celebrity endorsement.

Question 42

Define word of mouth

Answer 42

People influence each other over conversations. Consumers are found to trust their friends more and believe that the feedback is genuine.

Question 43

Define place as a part of exteneded promotional mix

Answer 43

How business’s make their products available to consumers for purchase through distribution channels

Question 44

Identify the types of distribution channels

Answer 44

• Producer to Consumer
• Producer to Retailer to Consumer
• Producer to Wholesaler to Retailer to Consumer
• Producer to Agent to Wholesaler to Retailer to Consumer

Question 45

What are the advantages of the distribution channels:

Answer 45

Producer to Consumer:
+ The producer has significant control over the product’s quality.
+ Direct customer contact helps the producer better understand their needs and wants.

Producer to Retailer to Consumer:
+ The producer can concentrate on the product’s manufacturing.
+ Greater distribution and access to the product are encouraged.

Producer to Wholesaler to Retailer to Consumer:
+ The producer can maintain less idle stock.
+ Marketing and sales are managed by the retailer, reducing costs for the producer.

Question 46

What is channel choice

Answer 46

How the busines chooses its distribution type to distribute their product depending on the market coverage.

*market coverage - number of outlets (places) the business chooses to sell its products from

Question 47

Define, and provide and example of the types of channel choice

Answer 47

Intensive: product is available in many local outlets
E.g convenience goods
adrian thinks I am trash at widowmaker( which is true but he couldn’t even carry me yesterday

Selective: moderate visibility of products. The products are available in certain locations and the customer is prepared to travel to shop for them.
E.g Zara, H&M

Exclusive: one store that the product can be made visible across a large geographical area
E.g Gucci, Tesla

Question 48

Describe the issues that occur in physical distribution (there are 3)

Answer 48

Transport: how products will be transported by road, water, rail, and air. The mean of transportation depends on the product.

Warehousing: receiving, storing, and dispatching goods in warehouses that are central points of effective delivery for goods

Inventory: stock stored in warehouses. Business must implement inventory control to monitor the amount of goods available and undertake resupplying when appropriate. If a business lacks stock, it will lead to loss of sales. If a business is holding too much stock, high storage costs will incur.

Question 49

With relevant example, explain what is meant by “People”

Answer 49

People refers to the quality of interaction between the customer and employees of business that deliver service. To achieve customer satisfaction, processes must be efficient, with the perception of customers is based on how they are being treated. I.e., interaction between Milena and Adrian as Coles workers between employees include: providing exception customer service, and assistance

Question 50

With relevant example, explain what is meant by “Processes”

Answer 50

Processes refers to how activities flow in order to deliver the service. Processes must be highly efficient in services to achieve customer satisfaction. For instance, Adrian working in Sharetea and making Milena’s boba tea. Processes were highly inefficient, as the time to making the drink was significantly long, and the response of Milena’s request was heavily mistaken; she asked for no sugar and no ice, but HE ENDED UP GIVING HER SUGAR AND ICE. Hence, Sharetea lost a valuable customer.

Question 51

With relevant example, explain what is meant by “Physical evidence”

Answer 51

Physical evidence refers to where the service will be delivered, along with the materials required to execute the service. Customers make judgements about the business based on these features. For instance, in a fancy hotel, visual material clues are present, evident in the furniture, beddings, and atmosphere of the hotel room. This is physical evidence that creates an impression to customers to make it look more luxurious.

Question 52

What is e-marketing

Answer 52

The practice of using the internet to perform marketing activities.

Pros:
+ Provides instant feedback, beneficial for market research
+ Communicates with customers which builds strong relationships

Cons:
- Ethical concerns in regrards to collection of personal info
Negative comments and reviews cannot be removed

Question 53

Briefly state and describe different means of e-marketing

Answer 53

• Webpages: displaying info in a form of text, images, videos, graphics with which customers can intereact to learn about the business’s products
• Podcasts: marketing messages are communicated via audio and can be targeting the specific audience
• SMS: texting customers directly
• Blogs: online forums where questions are raised and answered
• Web2.0: internet is used for sharing info rather than just retrieving it
• SMA: promotion across social media platforms. The most common type which provides great stastistics about cutstomers, inexpensive, gives great exposure.

Question 54

What are the subtopics of global marketing?

Answer 54

• Global branding
• Standardisation
• Customisation
• Global pricing
• Competitive positioning

Question 55

With a relevant case study, explain global branding

Answer 55

Global branding is the use of an identifier, such as name, term, symbol, or logo, that is used globally to assist customers in identifying products of a business. For instance, instead of Coca-Cola focusing on the product in their advertising, they focus on how the product is being used in everyday life. The campaign “Taste the feeling” focuses on emotions and lifestyle conveyed instead of the product. Although this is cost-effective, because ads do not have to be created from scratch across different markets, it is hard to reach global consumers, and does not focus on social trends such as increasing customer awareness about health.

Question 56

With a relevant case study, explain standardisation

Answer 56

Standardisation assumes that all customers have similar needs and wants and therefore the product is mass produced and distributed in the uniform format. This approach is beneficial as it allows to reduce the costs of promotion as it is the same across different markets.

E.g Promotion for Coca-Cola is the same globally, with minor changes of language and ethnic details that are relevant to the region. Coca-Cola applies the same theme and colours, hence creating a standardised advertisement. Thus, the business achieved global standardisation by taking low-cost actions of altering advertisements to suit different regions, keeping the product same as well as their universal brand message)

Question 57

Describe customisation

Answer 57

Customisation assumes how the product is used and the needs it satisfies, which differs between countries. For instance, although McDonald’s has standardised its name, logo, and production methods as well as its menu, there are local variation. For instance, in Japan, there is matcha ice cream unlike Australia.

Question 58

List the types of global pricing

Answer 58

Customised pricing
Market-customised pricing
Standardised worldwise pricing

Question 59

Identify what is meant by Global pricing?

Answer 59

Global pricing is how business’s adopt pricing policies across countries. Crucial for businesses to determine correct price, as it is the only factor that generates revenue, whilst others only incur costs.

Question 60

Outline the global pricing methods

Answer 60

Customised pricing: Consumers in different countries are charged different prices for the same product. This is due to the cost of transportation of the product and taxes associated with it, therefore cost plus method is used to cover those additional expenses. E.g Coca-Cola uses this approach to account for tax, transportation and manufacturing costs, therefore the prices across different marets vary. However, this leads to increased competition between the local businesses that do not have to include associated transportation costs.

Market-Customised pricing sets price according to local marketing conditions.

Standardised worldwide pricing refers to the practice of charging the same price for the product everywhere else in the world. The major concern is that it doesn’t account for exchange rates, and transportation costs.

Question 61

With reference to a case study, describe Competitive Positioning.

Answer 61

Competitive positioning refers to how businesses differentiate their products. Global businesses must show how their products are better than competitors.

For instance, Coca-Cola has a successful competitive position due to:
* having great product mix
* using celebrity endorsements such as Selena Gomez, allowing the business to grasp wider audience and develop associate the brand with success
* the slogan “taste the feeling” focuses on the feeling of joy rather than the product itself which reinforces the lovemark and develops a positive image based on the brand
* Global strategies are so broad and focus on themes/experiences/ emotions rather than product, this allows Coca Cola to have to differentiate their marketing campaigns in different countries as much.