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These values are considered as a part ofAugmented Products including:http://www.fingertecblog.com/2013/08/afiqs-5-ps-in-fingertec-part-5.html Guarantee: In the event of damaged product
Answer any FIVE questions All questions carry equal marks 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 process of selecting the final price 6 “Advertising forces people to buy goods that they do not want" Elucidate 7 Explain the process of integrated Marketing communication 8 Explain “direct marketing" and its applicability with examples CONTENT Question: 1 Explain the following: (a) Production concept (b) Product line (c) Augmented product (d) Social marketing concept Answer: (a) Production Concept Manufacturing philosophy shows that consumers will prefer products available for used and widely distributed at low prices Production Concept believes that consumers will prefer products which are available to use and are distributed widely at low prices Thus, marketing management should focus on boosting manufacturing and distributing of products This concept is often explained by two main reasons: Firstly, when demand for a product exceeds the supply, customers will interest in getting products and they do not focus on product quality Therefore, the firms will focus to increase the scale of production, and they desired increase sales volume and profitability Secondly, with the goal of reducing production costs, businesses will increase production to achieve economic efficiency (cost is minimal) and to expand the market The positive aspect of Production Concept is evidenced when demand exceeds supply However, the biggest drawback is the situation of supply exceeding demand (it is the cause of waste because the products have not been made a sale and revenue could not offset the cost); or the low price and the ease of shopping (due to the wide distribution) were not attractive customers (http://www.dankinhte.vn/cac-triet-ly-quan-tri-marketing-marketing-management-philosophies/) (b) The product Line - All goods are made by an enterprise - A group of closely related products made by the same process and are used for the same purpose, they are just different in the models, styles or size (http://www.merriam-webster.com/dictionary/product%20line) (c) Augmented Product Factors impact positively the customer's decision to buy the product when the product is provided by additional values These values are considered as a part of Augmented Products including: http://www.fingertecblog.com/2013/08/afiqs-5-ps-in-fingertec-part-5.html Guarantee: In the event of damaged products, they will be repaired or replaced by the new ones, or refund to the customers Warranty: the production have the maintenance time after the guarantee period such as repairing or replacing some components accordingly Customer Service: providing additional services to support the needs of customers as manuals, counseling by phone or website Addition of products: enhancing the utilities of product make the product being easier to use such as carybag for laptops, enhancing style (mobile surface) or extend functionality (mobile keyboard for PDA) Accessibility: the customer can get the product quickly as services: express delivery, sending goods to the place of purchase (http://www.knowthis.com/product-decisions/product-components-augmented-product) (d) The Social Marketing Concept The Social Mareting Concept is bring satisfaction of customers and at the same time ensuring the social benefits This is almost a step further than the marketing concept, because people believe that the satisfaction of consumers is not enough, but also focuse on protecting the interests of the entire society Before, companies made marketing decisions based on profit, now satisfying customer needs and achieving social benefits are more focused As a result, marketing activities will be significantly better with the longer-term benefits Question: 2 Explain various concepts of marketing with suitable examples Answer: There are many different ways of defining Marketing Marketing is the process of organizing a sales force to sell the goods produced by the company Marketing is the process of advertising and sales Marketing is the process of understanding and satisfying demands of the market Marketing is done market, market research to satisfy it We also can understand that Marketing is the economic and social mechanism that organizations and individuals use to satisfy demands and wants through exchange processes products on the market Accodring to Philip Kotler’s definition, “Marketing is the social management process, whereby individuals and groups get what they need and want through creating, offering and exchange the product that it is valuable to others” The this concept of marketing is based on the core concepts: needs, wants, demands, products, values, costs and satisfactions, exchanges, transactions and relationships, market, marketing and marketers So, marketing is a human conscious activity directed towards satisfying demands and wants through processes of product exchange on the market (Kotler, 1980) Examples relating to marketing: Advertising Strategy - Using Viral Marketing - The story of Nokia E75 (http://www.megalinkvn.com/marketing/chien-luoc-marketing/chien-luoc-marketing-cua- nokia-1) There is a handsome office staff, after many times working hardly in "Peak Hour", he was not able to complete his work He also was "Online Dating", but he did not know who of the girls wearing flowers in cafe over there, he was dating "Peak Hour" and "Online Dating" are the name of two humorous video clips The video clips made a difficult situations: There are character encountering obstacles in receiving and sending email in the emergencies Two video clips were viewed many times on the website, blog, forum such as Clip.vn, Youtube.com, Zing.vn, Vietnamworks.com, caravat.com, nokia.com.vn That guy needs a solution and he calls people to advise him In two weeks, there were more than 3,500 people sending "Solutions" for Nokia At this moment, the story of "the boy had a happy ending when he was recommended for the Nokia E75” The story of the above boy is a marketing style of Nokia This marketing was very effective and successful because marketing solutions were more emotive and at lowest costs This marketing has created a two-way interaction in the community through situations "raising the issue" and "finding the solution" Here's how increasing the feelings of participants Question: 4 “PLC as a tool for marketing strategy" justify Answer: The developed phase of the product over time is called as the "Product Life Cycle" Product Life Cycle (PLC) is a famous term in marketing PLC is used to describe the four distinct phases of product: initiation, growth, saturation and decline The firm should be know their products are in what phase to have a plan in their marketing including: product offer, refresh of old product or replace with new product lines In other words, PLC research helps the firm applications in strategic of product management and evaluation of product price and marketing budgetary management Typically, Product Life Cycle is indicated by the following chart: a) Introduction Stage: This is the initial phase, customers do not know or do not know much about products of the firm So, the firm has to lost a lot of costs to introduce and promote their products to market However, if the firm’s pricing strategies and product positioning are wrong, these will be the risk to devalue of product If the market size is too small, and not able to have good sales, the firm should be rethink marketing strategies Target customers, who are interested in exploring and experimenting, always want to be the first one to use the product For example, in the late 1970s, Apple, Atari, PET, Radio Shack, and other pioneers interest in the creation of the personal computer market and promote their particular products The increase of awareness and concern about personal computers are good for all competitors One of them is the giant IBM who jumped into this market in 1981 and people are very excited because IBM gives them new and diversified products (http://www.misa.com.vn/tabid/91/newsid/22774/Chien-Luoc-Marketing-Thay-Doi-Theo- Vong-Doi-San-Pham.aspx) b) Growth Stage: After the success of introduction stage, customers were concerned about the company's products because of the benefit of product, as well as the effects of marketing activities and targeted customers People has requirement to own the product and it becomes a huge demand leading to increase of products’ quantity, so the firm will have huge sales and profitability c) Maturity Stage: After the Growth stage, most of the customers have owned the product, so the product's appeal was not so much as before, and the demand of products was saturated Sales have leveled off and began to decline over time because of the emergence of new competitors, declining market share, or reducing the attraction of products At this stage, the firm should implement a marketing strategy for making fresh product or launching the product line instead d) Decline Stage Products are too familiar and not attractive, so consumers are already boring The consumers desire to own more new products and more features Purchasing power is declining, the operating cost increases, so profit declines The firm should reduce the price to attract customers in the lower segment and achieve sales in this period The following table shows the stages of Product Life Cycle and the features associating with marketing requirements and their effectiveness (https://www.boundless.com/marketing/products/product-life-cycles/impact-on-marketing- strategies/images/product-life-cycle-stages/) In summary, each stage of the product life cycle, the firm should develop and implement an appropriate marketing strategy to exploit the strengths of the product and the market Each product has its life Marketers should correctly identify each stage of the Product Life Cycle to develop the appropriate marketing, trying to keep products that do not fall into recessionary stage There are many appropriate solutions to launch alternative products on time with more advantages, attracting the best target customers The ultimate goal is getting the maximum profit Question: 5 Explain process of selecting the final price Answer: Price is the money to buy a product or service, or it is the sum of all the beneficial values when using products or services In the past, price is the main factor affecting the decision of buyers Today, the non-price factors are more important, because products or services with their non-price factors are higher than the tangible values of them The determination of the price is the most important because it makes the product or service in the process circulating on the market that they can attract customers and take profits or achieve initial goals Currently, the concept of boundaries for the market almost is not existence There are many suppliers of the same product, so the price competition has become the first problem that the managers have to face 1 Evaluation The company must establish a level of the price for the first time when developing a new product, introducing this product into a new distribution channel, or geographical area This process usually makes as follows: Determining target market segments for products or services, determining expectations need to achieve, and how to deliver products or services to that market segment Setting levels of the price for consumers in the target market segment Checking price (and checking costs if possibly) of the actual competitors or the potential competitors Checking range of the price from different levels about quality or distributive method of product Determination of profits that we can get at each level of the price If profit is low, we need to change the specifications of products to reduce costs and get the desirour profits 2 The order set pricing policies Selecting the pricing Objective This is the most important step The clear objective is easy to set up price There are 5 main objectives that relating to price including the survival of the firm, the maximum profit, maximum market share, maximum surfing market and product quality management Basing on specific objectives, the firms use price as a strategic tool that they will benefit more than the firms that the price of their product is evaluated by the cost or the market For example, Sony is one of the firms that has many experienced surfing market They sell their products at very high prices when they launch a high technology products for the consumer groups having a lot of money (premium segment), and they will reduce the price to attract purchasing power in the lower market segments when the purchasing power of this segment is declining Determining the demand The next step is determining the demand Each price level will create different needs towards be inversely proportional to each other and it has a different impact on marketing goals Most consumers are sensitive to prices of essential commodities The sellers can sell higher price than the competitor's price, and the customers are willing to buy at level of high price as long as the customer can own the lowest cost Estimating Costs The cost of products includes costs of production, distribution, and sale of products (including the favorable factors and risks) The level of this cost depends on each level of different production Analyzing competitor’s costs, prices and offers This is an important factor in setting prices This step depends on demand of the market and the cost of the product, the cost of competitors, and the reaction of the price (if any) The firms can not set at high price as the competitors, if their product is badly and their service is poorly On the other hand, the competitors also can change prices to compete with the price of the firms Selecting a pricing method There are three pricing methods that can be used: a) Cost Oriented Pricing, b) Competitor Oriented Pricing, c) Marketing Oriented Pricing a) Cost Oriented Pricing The firm often use cost oriented pricing methods when setting prices Two methods are normally used: i) Full cost pricing, the firm determines the direct and fixed costs for each unit of product The problem with full cost pricing is that it increases in price This method does not attract potential customers ii) Direct Cost, this method calculates the costs related to the production of large quantities It helps determine the lowest price but increase profits by increasing sales b) Competitor Oriented Pricing: Evaluation of market price: Based on the price of competitors, can be calculated the same, more than, or less than price of the competitors In case the price is higher price of the competitors, the firm need to consider the time of delivery or quality of service Competitive Bidding: The buyer will choose providers that they offer the lowest price c) Marketing Oriented Pricing: The price of a product is set to match the marketing strategy For new products, price depends on location and strategy; existing products is affected by strategic objectives Selecting final price: Pricing methods narrow the range from which the company must select its final price In selecting that price, the company must consider additional factors, including psychological pricing, gain and risk pricing, the influence of other marketing-mix elements on price, company-pricing policies, and the impact of price on other parties This is step to narrow the scope and the firms choose the final price of it, the firms need to consider additional factors such as: psychological price, favorable price and risky price, the impact of marketing, the company policies, and the effects and impacts of market prices In summary, concerning about the cost of the purchase is related to their expectations about the satisfaction and utility of the product The process of establishing the price to go to the final price in each period is important and necessary It helps the firm launching products or services on the market that is the most benefit including attracting the target customers of each stage and the optimal profit in the long term Question: 8 Explain “direct marketing" and its applicability with examples Answer: Previously, direct marketing is viewed as a form of marketing that product or service is transferred directly from producers to consumers According to this concept of direct marketing , businesses use sales force directly to the final user or organization into retail stores Nowadays , with the development of digital media, direct marketing is an interactive system of marketing, it uses one or more advertising media to effect a response and it is reciprocated and be measurable in every place Thus, direct marketing is performed to obtain a measurable response, it is often a buyer's orders (also known as direct marketing orders) In direct marketing, people use the advertising media to direct response and sales They learn about thier customers that the customer has the main characteristics and has been entered into the database client to establish a regular relationship The common forms of direct marketing: catalog marketing, direct-mail marketing, direct response marketing on TV, radio, newspapers and magazines, etc Direct marketing gives customers many benefits, such as saving time and effort Customers can choose to buy products in stay their house when they see in catalogs or computer networks, customers can order and send gifts directly to their friends, they can learn about the many products and services without having to take time to meet the salesman For example: - Integrated Campaigns marketing: The airlines establish a close relationship with their customers as accumulate bonus points and provide VIP card for high frequency use - Direct-Mail marketing: in December every year, Southern Power Corporation send letters by mail directly to the customers (approximately 10 % of clients) and get feedback about 15% of total letters being sent - Direct marketing: Direct marketing programs on TV are always associated with a phone number, called “hotline” This hotline is used to advise and support customers, The companies can have a lot of telephonists They always work directly 24/7 to answer, to guide and to care for their customers In summary, direct marketing is the high graded development of modern marketing It uses the maximum available tools such as mail, telephone and indirect communication tools to satisfy target customers REFERENCES Da Nang University Marketing Management Online version: http://voer.edu.vn/c/022e4f84 http://www.kbmanage.com/concept/direct-marketiing http://smallbusiness.chron.com/advantages-disadvantages-direct-marketing-telemarketing- 54933.html http://www.thewisemarketer.com/features/read.asp?id=68 http://luatminhkhue.vn/quan-tri/marketing-truc-tiep-kinh-nghiem-quoc-te-va-viec-ung-dung- o-viet-nam.aspx http://www.misa.com.vn/tabid/91/newsid/22774/Chien-Luoc-Marketing-Thay-Doi-Theo- Vong-Doi-San-Pham.aspx https://www.boundless.com/marketing/products/product-life-cycles/impact-on-marketing- strategies/images/product-life-cycle-stages/ http://www.dankinhte.vn/cac-triet-ly-quan-tri-marketing-marketing-management-philosophies/ http://www.merriam-webster.com/dictionary/product%20line http://www.fingertecblog.com/2013/08/afiqs-5-ps-in-fingertec-part-5.html http://www.megalinkvn.com/marketing/chien-luoc-marketing/chien-luoc-marketing-cua- nokia-1