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Explain the following:1.1 Production concept: Trang 2 According to viewpoint of marketing management, production concept is arecombinant of goods produced regardless of choices or tast
CÂU HỎI BÀI TẬP MARKETING MANAGEMENT 1 Explain the following: (a) Production concept (b) Product line (c) Augmented product (d) Social marketing concept 2 Explain various concepts of marketing with suitable examples 3 Explain market segmentation with suitable examples 4 “PLC as a tool for marketing strategy" justify 5 Explain “direct marketing" and its applicability with examples CONTENT I INTRODUCTION Today, marketing is a recognizable component in the success of businesses, a foundation of modern management If customers are satisfied, businesses will fail in business compared to their competitors Without the ability to satisfy customers, businesses will fail to attract new business projects We will analyze to clarify some issues related to marketing management through the contents of 5 questions above II BODY 1 Explain the following: 1.1 Production concept: Product concept is a proposal to consumers, who would prefer a product with better quality, high performance and outstanding features to a normal product This concept is clarified more when applied in some cases as electronic products and mobile handsets It can be identified more clearly on the dynamics of the product to launch the best qualities for customers' satisfaction According to viewpoint of marketing management, production concept is a recombinant of goods produced regardless of choices or tastes of customers It is one of the first marketing concepts, in which, the recombinant of goods is produced only on the belief that businesses will be able to sell because consumers need them However, today, with the advancement of science and technology, industrialization is constantly developing and more and more businesses are participating in the market; the available space to sell products becomes cramped because there are too many companies sell the same product Therefore, marketers must think about the quality of products and other things as well as the value and customers' satisfaction 1.2 Product line Marketing experts are always eager to expand their product line When they have a successful brand, they are compelled to create innovative products to meet the needs or tastes of neighboring segments The strength of brand helps reduce the risk of expanding product line (despite the risk of reducing the value of this brand) In general, marketing experts expand their products horizontally or vertically Horizontal expansion is to attract different tastes of customers, such as Coca Co., Ltd has released die Coke, diet Coke with lemon flavor Vertical expansion is to provide a product affordable for all subjects or to serve different levels of demands, e.g Microsoft Office version for family use and Microsoft Office version for professional use Some companies expand their products both horizontally and vertically In most cases, this expansion is based on the development of innovative products The vertical and horizontal in-favor expansion of product lines is the product platform Black & Decker also applied innovative approaches for product platform from the early 1970s Based on the platform, which are power tools, controllers and electric motor, Black & Decker released many civil electric appliances such as electric drill, polisher, saw, grinder and other tools Thanks to this common platform and cost advantage, Black & Decker has dominated on many markets specialized in civil electric devices Simultaneously, the company has also reduced its operational complexity Instead of manufacturing and warehousing engines, components and separate switches for each product, the company can use a separate assembly program and a set of common components Costs have been reduced significantly thanks to the number of big orders This helps the company undervalue compared with competitors from Asia and increase demands for product lines of Black & Decker When marketers discover a market segment which is unexploited and potential for business in the future, they will work with product development professionals to quickly create a product with ability to attract customers on this market segment In both cases above, the basic platforms are the same, only the external appearances of the products are different 1.3 Augmented product: In the book "Principles of the market", Philip Kotler devised a very interesting concept to develop benefits for products Kotler suggested that if you considered a product on three levels, it would help you extract all the benefits that your product offered This strategy has several different names, including Total Product Concepts, Augmented Product and Three Levels of A Product - Level 1: Core product - The most basic benefit that products give users Level 1 is the most basic level and simply looks at what people set out to buy and which benefits of products that manufacturers desire to provide buyers For example, a camera can take photos but it may have other benefit(s) that manufacturers would like buyers to enjoy such as a wide lens, face detection function and high definition video So, before designing, any product designers should list the core benefits needing to be provided of the product - Level 2: Actual product – more features, buying features Level 2 is a list of the core product benefits in a product that people will buy Products manufactured by other competitors may offer similar benefits, so, at this stage, the objective is to design a product that will convince people to buy your product Kotler said that this might be related to decision of the levels of quality, product and service features, style, branding and packaging For example, Apple's Iphone design has allowed it to become a market leader for smartphones and by September, 2012, it was possible to launch Iphone 5, the 5th edition of this product There are many kinds of smartphones on the market, but Apple has managed to design a product that makes people pre-order and camp overnight outside Apple's retail stores so that they can be the first buyer of this product - Level 3: Augment product – Augmented value as warranty, delivery more than what customers expect Level 3 is related to decision of augmented intangible benefits that a product can provide Competition at this level is based on after-sales service, assistance and manual, product-line upgrading, warranty, free delivery and so on In other words, it is something that product does not offer but customers may find it useful Intangible benefit such as warranty helps customers have peace of mind and prove that manufacturers have confidence in the quality of their products 1.4 Social marketing concept: Social Marketing was launched in the 1970s At that time, Philip Kotler and Gerald Zaltman defined "Social Marketing" as “Different from other areas of marketing only for objects of marketers and their organizations" Social Marketing impacts social behaviors and is unprofitable for marketers but profitable for target customers and for the society in general” Like Commercial Marketing, the first objective of Social Marketing is customers Marketing aims to the community but not for the purpose of selling products The objective to focus on customers is expressed through the familiar P elements of mix marketing: Product, Price, Place and Promotion However, to have an effective social marketing program, according to a new trend, it should have new "P": - Public: The public here refers to both groups inside and outside the program External participants are regarded as target customers, organizations meanwhile internal members are attendants supporting or carrying out the program - Parnership: Social problems are often very complex and need a lot of groups or organizations to be involved Thus, many different organizations should combine together to create highly effective work - Policy: Social marketing programs can motivate individuals in the community to change attitudes, but it is difficult to maintain that attitude if their habitats change Therefore, the policy change is necessary to better suit the external environmental changes - Purse: Most social marketing programs are often sponsored by corporations, subsidies of the government or charities This is also an issue needing paying attention to for the implementing units to have enough money for the program 2 Explain various concepts of marketing with suitable examples 2.1 Basic marketing concepts The concept of market is all potential customers, who share common demands and desires, those who are affordable and willing to buy products, are considered as a market The concept of marketing is to put right products into right places, with reasonable prices and at the right time Simply, you just need to create a product that a group of people desire, put it in some places that are visited regularly by a group of people, set its price to be consistent with its value and make customers feel they can identify it 2.2 Selling concepts The selling concept essentially mirrors the thought that consumers will not purchase enough of the company’s products unless large-scale promotional and selling efforts are carried out by it The focus here is more on selling the products of the company to consumers without comprehending the market needs and increasing sales transactions rather than building and enhancing relationships with customers 2.3 Marketing Concept Vs Selling Concept According to Prof Theodore Levitt ‘The difference between selling and marketing is more than semantic A truly marketing minded firm tries to create value satisfying goods and services which the consumers will want to buy What is offers for sale is determined not by the seller but by the buyers The seller takes his cues from the buyer and the product becomes the consequence of the marketing effort, not vice versa Selling merely concerns itself with the tricks and techniques of getting the customers to exchange their cash for the company’s products, it does not bother about the value satisfaction that the exchange is all about On the contrary, marketing views the en¬tire business as consisting of a tightly integrated effort to discover, create, arouse ad satisfy customer needs’ SELLING MARKETING 1 Emphasis is on the product 2 Company Manufactures the product first 1 Emphasis on consumer needs wants 2 Company first determines customers needs and 3 Management is sales volume oriented wants and then decides out how to deliver a product to 4 Planning is short-run-oriented in terms of today’s satisfy these wants products and markets 3 Management is profit oriented 5 Stresses needs of seller 4 Planning is long-run-oriented in today’s products 6 Views business as a good producing process and terms of new products, tomorrow’s markets and future growth 7 Emphasis on staying with existing technology and 5 Stresses needs and wants of buyers reducing costs 6 Views business as consumer producing process sat¬isfying process 7 Emphasis on innovation on every existing technol¬ogy and reducing every sphere, on providing 8 Different departments work as in a highly separate better costs value to the customer by adopting a water tight compartments superior technology 8 All departments of the business integrated manner, 9 Cost determines Price the sole purpose being generation of consumer 10 Selling views customer as a last link in business satisfaction 9 Consumer determine price, price determines cost 2.4 Target marketing 10 Marketing views the customer last link in business as the very purpose of the business Target marketing is sometimes also known as proper marketing, which is the art of marketing with a desired target market So, target marketing is primarily related to two steps as follows: 2.4.1 Decision on market segmentation of businesses as well as decision on target customers that businesses gain Decision on target segment of businesses is an important step of target marketing, the first time to decide which will be the target market of businesses Only through segmentation, we will come to know which segment will be the most profitable for us Segments can be done on the basis of: + Geographical segmentation + Behavioral segmentation + Psychological segmentation + Demographic segmentation A company can aim at a target or a combination of the above segments Thus, a segment can have both as geographic segmentation and behavioral segmentation Once an enterprise realizes a segment that they are targeting, marketing mix of the enterprise may be decided accordingly to target marketing - Customer profile Customer profile is a description of a customer or a set of customer's data, including characteristics of demography, geography and psychology as well as purchasing pattern, credit and buying habits Profile also uses specific information to make configurations as exact as possible All data can be anonymous, then used to give businesses clear images of customers to identify who they are and how important their behaviors may be in the future The data can be incorporated into the configurations, including: age, gender, address, incomes, financial behavior, debts and financial stress level After a profile has been developed, you can aim at potential customers who are consistent with this profile to define and improve investments of your business The unique combination of consumer groups with knowledge of businesses about the market and local economy means that businesses can determine the best data sources and methodologies to develop profiles of target customers and markets truly innovatively and accurately Profile can help you: + Manage database of your customers + Develop strong relationship with customers + Manage your credit portfolio and level of credit risk + Create more successful marketing campaigns + Gain the highest profits from potential customers 2.4.2 Designing the marketing mix of businesses with such appropriate products, prices, promotions and places that the target markets of businesses can adopt quickly - Marketing Mix – 4 P: Once a target market has been identified, it is followed by marketing mix decisions Marketing mix and the 4 Ps of marketing are often used as synonyms for each other "Marketing mix" is a general term used to describe different kinds of choices that organizations have to implement the entire process of launching a product or service to market The 4Ps is probably known most and first expressed in 1960 by EJ McCarthy - 4Ps: Product / Service; Place; Price; Promotion - Use of 4P model - Marketing Mix The marketing-mix model can be used to help you decide how to get a new offer to the market It can also be used to test your current marketing strategy Once you have a clear marketing mix, try to "test" the overall supply from customers' perspective by questioning customers with focused questionaire: + Does it meet their demands? (Product) + Will they find it at the place they do shopping? (Place) + Will they consider its favorable price? (Price) + And will marketing communications approach them? (Promotion) Continue to ask questions and change your combinations until you are satisfied that you have optimized your marketing mix with available information, data and figures that you gather Review your marketing mix regularly as a number of factors will need to be changed when the product or service and the market develop, mature and adapt in a constantly changing competitive environment Conclusion: Marketing mix will help you determine marketing factors for the success of the market that you supply One of the most popular models is 4Ps model, which helps you determine your marketing options for product, place, price and promotion Using the model when you are planning a new venture, or an evaluation for current proposal is to maximize impact on your target market 3 Explain market segmentation with suitable examples The concept of market segmentation means dividing a large heterogeneous market into smaller and more homogeneous segments Separate marketing programs, frequently with a separate product, is developed to meet demand(s) of each segment However, this approach also has limitations On one hand, research costs increase due to investigation of many segments Production costs increase due to shorter production cycle and an economical effectiveness thanks to large-scale production does not exist Finally, sales of a segment can "sacrifice" for other segment For the market segmentation to be effective, marketers need to figure out a feature of similarities, in which, preferences of customers form specific groups Innovative approaches for market segmentation offer marketers real opportunities The method most commonly used to subdivide the market is to segment according to population or socio-economy Demographic factors include age, gender, family size, marital status, race, religion and place of living Socio-economic characteristics include income, occupation and education These factors are useful in describing market segmentation because they are easy to quantify and proven as indicators of demand, desire, preference and use of products of customers For example, William - Sonoma Company understands that 15 % of customers of types of cookware is men and bought a list of customers' addresses from men's magazines such as Gentlement’s Quarterly to increase sales according to catalogs These geographic differences are widely used in market segmentation Marketers use nation, state, region, county, city and rural area as a basis for market segmentation For example, residents in New England use average 23 liters of ice cream per year, more than consumers in any given area Many companies itemize some countries into segments; however, this approach is not always suitable due to many political and cultural differences among countries Countries in the Middle East, including Iran, Iraq, Saudi Arabia, Kuwait, Egypt, Syria, Israel and Lebanon are completely different from each other though these countries seem similar in the viewpoint of the outside world Behavioral factors may give marketers deeper analysis of dynamics of consumers in a particular market segment Thus, these behavioral factors may be more powerful means for market segmentation than simulation factors For example, the objective of the campaign "Discovery of today's motorcycle riding" of motorcycle manufacturers such as Honda, Yamaha, Suzuki and Kawasaki is to put "the image of a motorcycle- riding mother" out of range of cycling and an ideal for women's movement As a result, the proportion of women buying motorcycles has increased from 7.5% to 10% Market segmentation under product use contains distinguishing those who use many products with those who do not use many products When analyzing the rate of use, marketers often realize "Principles of 80-20", i.e 20% of the market obtains 80% of sales, which leads to the importance of a small group of customers for the prosperity of many companies A market segmentation approach which is increasingly popular and strongly developing is under-benefit market segmentation This approach focuses on important benefits that consumers are seeking This means that consumers do not expect that a product would provide many benefits at once, instead, they look for an outstanding benefit For example, buyers of Levi's jeans seek for "durability" A knowledgeable marketing expert has emphasized “Consumers do not buy ¾ inch drills, they buy ¾ inch holes” Recently, marketers have been realizing personalities in a different aspect and found a promising method which is called market segmentation under lifestyle or psychology Dividing the market into segments based on how consumers live is expressed through their values, attitudes and preferences 4 “PLC as a tool for marketing strategy" justify Product lifecycle is a period of product's existence on the market, in which, shows stages that the product go through from introduction, growth, maturity and decline A typical lifecycle of product is indicated by the curvature of S (an ideal lifecycle of product) However, each product has a different lifecycle Stages of product's lifecycle: Introduction, Growth, Maturity and Decline 4.1 Introduction: This stage begins when a new product is launched on the market at the first time The introduction takes an amount of time, so the volume of goods sold rises slowly that leads sales growth to be slow During this stage, interest rate may be negative or very low because of low sales and high distribution and advertising costs In this case, Marketing Mix is usually: + Product: Pay attention to editing techniques and product commerce; enhance the quality control + Price: Skimming price on the market for unique products unmatched on the market Market-penetration price for popular products Regional price: different between places Temporarily lowered price + Distribition: limited distribution, exclusive or selective, high surcharges + Promotion: to promote to create understanding of a product and its benefits; prioritize to aim at pioneers and consumption encouragemers Means of promotion are individual sales or catalog templates 4.2 Growth: If a new product meets expectations of the market, sales will start increasing rapidly New competitors will enter the market to find opportunities for production and high profits In this case, Marketing Mix is usually: + Product: mass production, diversification, strengthening technical innovation, adding new features; standardizing products to easily extend selling + Price: Price downtrend in order to expand the market; using large price scale according to different market prices + Distribition: distribute for strong and wide expansion Large inventory reserves and rapid resupply sources + Promotion: create the most preferrence of the majority of customers by strongly using mass media 4.3 Maturity: During this stage, the volume of goods sold slows down because the product has been accepted by most potential customers In this case, Marketing Mix is: + Product: diversify the product to meet the deeper market segmentation by diversifying the brand and style + Price: There is strong competition on price, there is a very high cross-elasticity So, it tends to have implicit or overt agreement among these sellers against other sellers or buyers + Distribition: Still expanded and strong + Promotion: strengthen loyalty by using mass media or enhancing persuasion, promotion, advertising to aim at distinguishing markets 4.4 Decline: During this stage, sales volume reduces; risk of inventory increases rapidly It is due to advances in technology, changes in customers; preferences and increasing competition In this case, Marketing Mix is: + Product: reduce ineffective items + Price: Reduce, sometimes increase price because costs increase due to lower production volume + Distribition: highly select and specialize (implementing the Rule 20/80) + Promotion: Reduce costs to the least 4.5 New stages of product development: The beginning and development of ideas for new products: Nowadays, with the rapid advance in production technology, increasingly - high consumers' desires and the fierce competition of rivals, a business cannot rely on its existing products that they always have new, more complete products So, every business must have department of research and development for its own - Offering new ideas: Ideas for new products are as much as possible Ideas can come from customers, from competition observation or from exhibition, from opinions of the staff in the business, such as a business employee of 3M Company found out that users of their sandpaper were in trouble because of dust in the workplace; and then, he raised the idea of wet sandpaper to not create dust Currently, wet sandpaper is the role product of 3M Company Besides, offering new ideas can apply brainstorming method proposed by Osborn - Selection and evaluation of new ideas: Marketers often establish a formal method to select ideas called "key aspects" There are only 4 aspects: goods (features, the ability to sell), company (technology, manufacturing, market), environment (competition, suppliers, government) and joint venture (support, investment, strategy) - Development and test of new ideas: Imparting an idea into words for customers to understand is necessary Tasks of marketers are to develop ideas into concepts and to assess the attractiveness of each concept to customers to choose a product that meet consumers' demands most The product concepts describe design, color, size, flavor, using features and price Then, testing these concepts in appropriate groups of consumers, who the company is looking towards by questions as whether they clearly understand the product concepts, whether this product meets their demands or not, or according to you, what characteristics should be improved - Business analysis: The next step of the process is to estimate costs, profits, interests on investment (ROI) and cash flow if the product is launched into the market Results of this analysis are important because every idea must satisfy the manufacturing of new products to meet demands, desires of consumers; furthermore, it must bring profits to the company manufacturing and selling this product - Product development: The concept of product through analysis satisfying objectives of the business will be transferred to the Department of Research and Development to be developed into a material product The product will be developed into one or many material templates of the product concepts, which are then tested for features and tested by customers to consider technical levels of the product - Testing Marketing: Marketing experts try to measure responses of potential customers on a real product They observe expression of the product in selected markets and assess the likelihood of success in larger markets The company grasps attitude of distributors and competitors A tested market often provides information to improve marketing strategies In a tested market, the company is responsible for advertising, valuation and distribution - Selling to the market: When a new product has been successfully tested, it is ready to be launched into the market, or produced and distributed with the maximum scale on the target market The distribution of new product to the market under roll-style, from geographical area to other geographical area can help companies reduce large costs of the stage of new product launch and create opportunities for adjusting marketing program 5 Explain “direct marketing" and its applicability with examples The concept of Direct Marketing was created in the 90s of last century and has been commonly used by entrepreneurs in business to establish, maintain and develop relationships with customers through a variety of means such as letter attached to brochure or catalog, phone, fax; referral and direct sales through the media (television, radio and the Internet) According to the Direct Marketing Association, Direct Marketing is a marketing communication system frequently operating with the interaction of a number of media to create positive reactions of exchange or transaction (measurable) from customers that are less limited by space and time The most basic difference between Direct Marketing and Traditional Marketing is the interaction and exchange of information between buyers and sellers Hence, enterprises are easy to evaluate the effectiveness of their communications Direct Marketing is expressed through many specific communication activities making efforts towards customers such as direct mail to introduce products and the enterprise, order mail enclosed list of products which can be ordered for customers to choose Objectives which every direct marketing program aims at are direct and positive responses of customers to the program Direct Marketing brings many benefits for both customers and businesses 5.1 For customers: It help save time for purchase; through catalogs, customers may know many new items to choose, which is quite consistent with new lifestyle, overcomes barriers of space and help choose the most satisfactory products Industrial customers also have many advantages They may be more understanding of products and services without spending time meeting salespeople 5.2 For enterprises: It help seek real orders for each item, get more information about customers in the most quickly manner, aim at proper target(s) with high communication efficiency and low costs It ensures privacy and the ability to "hide" strategies from competitors (with the traditional forms of marketing, competitors will easily access media programs of enterprises, meanwhile, through Direct Marketing, competitors seem to be "tricked" because only target customers receive information) 5.3 Advantages of Direct Marketing: - Able to choose better potential customers - To build continuous relationship with each customer - Able to come up with potential customers at the right time and be more receptive - Able to assess the effectiveness thanks to the ability to measure responses of target customers, thereby helping businesses evaluate the effectiveness of each direct marketing program Enterprises develop appropriate policies to apply for each group of customers, each product category as well as each regional market - Through Direct Marketing, it is able to test changes in advertising, heading, price and benefits … - To help use resources most effectively, especially suitable for enterprises desiring to narrow structure, small and medium-sized businesses or enterprises aiming to strategies for discrete market segmentation with specific demands of each customer group - Competitors cannot know strategies that companiesare dedicated to their customers 5.4 Disadvantages of Direct Marketing: - Requiring initial investment for the construction of databases, material conditions - Requiring trained human resources with professional qualifications to meet requirements - A further issue is that not in any condition, Direct Marketing will be accepted by customers In the case that the market includes most consumers with daily purchase behavior at markets and just believing in their own experience after consuming products, Direct Marketing cannot promote its effectiveness in the early stage, they need some time for customers to adapt, get acquainted 5.5 Data on Direct Marketing applications Direct Marketing has developed rapidly and become a key marketing tool in many industrialized countries It has been predicted that, in future, Direct Marketing will replace forms of Traditional Marketing and become one of the main marketing tools because it is the integration of 3 forms: Advertising, sales promotion and direct sales without intermediaries Industries predicted to continue spending much on Direct Marketing are transport, industrial services, communications, customer service, direct sales, technological products, banking and retailing services Typical Direct Marketing activities in the order of being used much are Internet Marketing, Advertising and Sales through Television, Radio, Postal Marketing and so on… In the U.S., Direct-mail Marketing has gained tens of billions of dollars in sales In 1991, there was over 45% of Americans "have ever bought something" through direct mail and as reported by the Direct Marketing Association, sales from Direct Marketing in the United States in 2006 increased by 6% compared to 2005, reaching $ 6.5 billion In 2007, sales from Direct Marketing increased by 7.4%, reaching $ 7 billion, while the average increase in sales from marketing and advertising activities only reached 3.9% in general Conclusion: Direct Marketing is an inevitable development trend of marketing in the age of development of electronics and information technology as today III CONCLUSION In brief, marketing research helps managers not only make strategic or tactical marketing decisions but also identify or solve a specific marketing issue, such as understanding consumers' attitudes towards a certain type of brand, or their reactions to an advertising program, their behaviors before price adjustment of businesses Marketing research is commonly applied in the following fields: - Market Research: To identify issues: characteristics of the market, market-share analysis, forecasting commercial potential of the market; market distribution under territory, impact of these factors on direction of market volatility and so on - Customer Research: In view of Marketing, customers create market So, in addition to the geographical research of the market, marketing research also focuses on finding out types of customers with their views, tastes, attitudes and reactions as well as reviews how their processes of decision on purchase occur to discover real hidden reasons to motivate buyers to purchase products - Product Research: Product Research includes study usages, habits and preferences of consumers to help design, product improvement and understand differences or advantages over competitive products, product development direction and so on - Distribution Research: Focusing on learning and analyzing the current distribution system on the market, structure of distribution channels, intermediate types and methods of product distribution – Research on costs and product prices: Analyzing factors affecting the formation of costs of production and product distribution, cost structure and product price, factors affecting valuation and price adjustment and so on - Research on advertising and sales activities: Analyzing the achievement of objectives set out of advertising programs, analysis of the impact of advertising on awareness, thoughts, feelings and attitudes of customers, using effectiveness of promotional means for businesses and their products The research on sales aims at evaluate the comparison between actual sales volume and plan; sales analysis through products, territories and market segments - Competition Research: Learning objectives, strategies, activities of competitors in order to create a competitive advantage as strong as possible in the specific conditions of the enterprises' resources - Research and forecasting trend in changes and development: Comprehensively evaluating impacts of political, economic, social factors on customers and effectiveness of business activities of enterprises