International
School of Management and Technology
Bharatpur,Chitwan
NEPAL
Unit
:- Marketing Principles
Session/Year
:- Dec,2013
Unit
Code :- F/601/0556
Assignment
Title :- Taking Responsibility for Marketing Development
Submitted By
Ashish
Pathak
BBA-1st
Semester
Table
of contents
Task 1
Explain
the various elements of the marketing process that Chaudhary Groups Associates
can apply. (1.1)M1
Marketing is a vital role in big companies and
organizations to operate day to day activities smoothly and profitably. All of
the company’s daily transactions are considered under marketing process.
Company’s up rise and failure also depends on the type of marketing done by the
company. So, it is also a genital part of work supposed to be done
appropriately.
As, I am appointed as an Asst. Marketing Manager in Chaudhary
Groups Associates (henceforth CG Associates), I have to implement extra-special
plans and generate new marketing ideas to upgrade company’s situation & its
brand loyalty. CG Associates, which is linked with LG, is the top electronic
goods manufacturing company in Nepal, ranging its products from kitchen
appliances, home entertainment products to communication devices and electronic
components. For the best result of its successful marketing strategy, I have to
know the processes of marketing, its features, important task to be considered
while marketing and many more.
First of all, I have to develop the best &
worthy marketing plan which will support CG Associates for its overall
marketing activities & makes fine customer relationship; which will easily
flow-out its products. A product or brand plan should contain the following
sections : executive summary, current marketing situation, threats &
opportunities, objectives & issues, marketing strategies, action programs, budgets
& controls e.t.c.(Kotler et al, 1999). As, CG Associates is an electronic
goods producer, I have to introduce plans regarding today’s electronic goods
market. After this, research should be done regarding market situation, buying
behavior of the customers, successful competitors, new generation’s most-favored
products & focal point of electric goods marketing. By the data arrived
from the research, the company can do marketing audit; studying company’s
situation, its objectives, problem areas & its solving measures, new
opportunities for the company e.t.c. It is the best measurement tool for
identifying company’s internal strength & weakness as well as its
opportunities & threats.
The CG Associates can make a marketing audit by
arranging, SWOT analysis, Environmental analysis, Objectives analysis e.t.c.
SWOT analysis is distillation of the findings of the internal and external
audit which draws attention to the critical organizational strength and
weaknesses and the opportunities and threats facing the company.(Kotler et al,
1999). In SWOT analysis, company makes a data, analyzing its core competencies,
company’s weaknesses, opportunities for it & the successive threats, which
can be the obstacle of the company’s day-to-day operations & success. The
CG Associates can be aware of its weakness areas & threats like;
competitors, government rules & regulation, political treaties e.t.c. and
can rise-up a new strategies & control measures to face the challenges to
move ahead by adding strength & searching extra-opportunities. Production
procedures, skilled employees, reputed brand name, international supported
partners is its core competencies as well as lack of appropriate marketing
plan, and low-amount production e.t.c is its weaknesses. There are different
types of new opportunities for the company to move-ahead like diversification
of products, increasing capacity of production e.t.c. but it should be aware of
the threats & challenges to face-out. So, analyzing all these points, the
company can acknowledge its current market situation & spread new ideas
& plans to do aggressive marketing with improved products in quality &
quantity.
Along with SWOT analysis, the environmental scanning
can reflect the situation of business environment around it, which affects the
daily operations of the company. Environmental scanning helps to collect much
more information about the surrounding business environment affecting directly
towards the daily operations of the company. The environment consists of all
the factors and forces that affect the company’s ability to transact
effectively with its target market. (Armstrong et al, 1999). To reach a focused
point or a target place of success, the company should analyze its surrounding
environment its factors, its changes, policies e.t.c. The main environmental
factors are; Political, Economical, Socio-cultural, Technological,
Environmental and legal. Analyzing company’s business environment helps to
create new strategies and plans and provides knowledge regarding companies have
to do or do not.
By these measurement tools & strategies, CG
Groups associates marketing process can be completed, which will best-fit to
its type, increase its production, makes fine customer relationships e.t.c.
Task 2
Evaluate
the benefits and costs of using a marketing orientation for Chaudhary Groups
Associates. (1.2) D1
The marketing
orientation of a company means the approach which deals directly with its
customer’s needs, wants and demands rather than company’s intention about
customer’s needs. Most of the today’s business markets are giving priority to
this type of approach. Customers are increasing day by day and their needs also
growing in simultaneous way. Also, they are more knowledgeable with different
varieties and better quality products. So, To compete with other local and
international competitors, company must be familiar with what customers want
and supposed to get from the company, otherwise the sales of the company goes
downward.
CG Associates, a leading electronics goods
manufacturer of Nepal, is well-known for its quality and diversified products.
The company also practices different marketing approach to get high-flow of
customers and make fine company-customer relationship. From the marketing
orientation approach, CG Associates can get many more benefits. They are as follows:
More
focused production :- By making customers needs, wants and
demands a prime focus, CG Associates will more likely manufacture newer
products which will best fit to the demanded customers’ needs. From getting
needed products, customer will be satisfied and repeated purchase and
consumption takes place. From this, company will make more profit and also
gains well reputations.
Concentrated
strategy: - By adopting this type of marketing concept,
company makes all its process and procedures appropriate for meeting customer’s
needs, which is its vision. Company should provide extra-special services
behind products; products features, its uses, its benefits for customers e.t.c.
Also, The Company should take feedback and support from every customer and make
a market research. By the data collection from the research, company can get
information about company’s current situation, market situation, customer’s
needs, products quality e.t.c. which helps to re-energize products and services
by company and make fine customer relationship.
Marketing
advantages: - When company is highly succeeded to
fulfill customers needs, they will also buildup special powers to make a sense
of effective marketing ability. Company should clarify about the introduced
products, its features, its uses, its price, its benefits e.t.c. from which,
customers can get right decision to use or don’t use the product. By this task,
company will be on high sales volume with knowledge and loyal customers which
will surely make durable marketing of the company’s products.
Long-term
profitability: - By applying appropriate techniques
and decisions form market orientation, company can earn long-term
profitability. Company can turn one-time customers into repeat-on customers by
providing appropriate goods and services. By this approach, company can earn
high profit in equal rates in the market substituting other competitors.
Along with having different benefits from marketing
orientation approach, there are some disadvantages or costs too. The approach
is main problem is that this approach can’t be applied in small industries and
institutions because they don’t have massive number of production as well as few
numbers of customers and consumers. This approach is little-bit more costly for
those industries, which sales volume is low. The company if does not have
essential funding for market research, product differentiation, targeting
e.t.c. can’t afford this approach.
Task 3
Discuss
macro and micro environment factors which influences marketing decisions for an
organization like Chaudhary Groups Associates. (2.1)M2
For identifying opportunities and monitoring
successive threats, the company or organization must analyze it marketing
environment in which the firms operates. It consists of all the active factors
and forces outside normal marketing activities, which affects the marketing
management abilities to maintain and develop satisfactory relationship with its
target customers. Although, these factors may change depending on the type of
the company and its operations, it can be mainly divided into two broad
categories; micro and macro-environment. Micro-environment studies about the
company, suppliers, marketing intermediaries, customer markets, competitors and
public, who are actively attracted towards company’s daily transactions. The
macro-environment components are: demographic, economic, natural,
technological, political and cultural factors. Along with studying micro and
macro-environment, the company should have more strength in comparison to its
weaknesses and should be able to take opportunities dealing with its threats.
In the whole, marketing environment is the combination of whole factors and
forces that affects the daily transactions of business firms belonging ability
to develop and maintain successful relationship with its target customers, able
to adapt marketing mix. It offers both opportunities and threats to the
company. Company makes research of marketing environment to monitor the
changing environment of business.
It directly affects the daily transactions in
different companies and manufacturers. CG Associates is equally affected by the
changing business and marketing environment which it needs to analyze and
research. From the manufacturing of electronic goods to the supply and sales of
CG Associates, the marketing environment mainly affects. Environment affecting
CG Associates for forecasting its daily activities are:-
Micro-environment:
- The microenvironment consists of five
components. The first is the organization’s internal environment, its several
departments and management levels, which affects marketing management's
decision making. The second component includes the marketing channel firms,
which cooperate to create value: the suppliers and marketing intermediaries
(middlemen, physical distribution firms, marketing-service agencies, financial
intermediaries). The third component consists of the five types of markets in
which the organization can sell: the consumer, producer, reseller, government,
and international markets. The fourth component consists of the competitors
facing the organization. The fifth component consists of all the public that
have an actual or potential interest in or impact on the organization’s ability
to achieve its objectives: financial, media, government, citizen action, and
local, general, and internal publics. So the microenvironment consists of six
forces close to the company that affect its ability to serve its customers. The
companies itself, Suppliers, marketing intermediaries, customer markets,
Competitors, Publics are the factors of micro-environment.
The
company: - The first and important role played in
microenvironment is by the company itself. Company’s daily transactions affects
its surrounding environment and the environment again, affects the daily transactions
of company.
-
Top management is responsible for setting the company’s mission, objectives,
broad strategies, and policies.
-Marketing managers must make decisions within
the parameters established by top management
-Marketing
managers must also work closely with other company departments. Areas such as
finance, R & D, purchasing, manufacturing, and accounting all produce
better results when aligned by common objectives and goals.
- All
departments must think about consumer,
if the firm is to be successful. The goal is to provide superior
customer value and satisfaction.
Suppliers: - Suppliers are firms and
individuals that provide the resources needed by the company and its
competitors to produce goods and services. They are an important link in the
company’s overall customer‘s value delivery system. They plays active role in
the production, distribution, after-sales recognition e.t.c.
- One
consideration is to watch supply availability (such as supply shortages)
- Another
point of concern is the monitoring of price trends of key inputs. Rising supply
costs must be carefully monitored.
Marketing intermediaries :-
Marketing intermediaries are firms or people that helps the company to promote, sell, and distribute its goods to
final buyers. They are distribution channel firms that helps the company find customers or make sales to
them. These include wholesalers and retailers who buy and resell
merchandise. Resellers often perform
important functions more cheaply than
the company can perform itself. However, seeking and working with
resellers is not easy because of the
power that some demand and use.
Competitors :-
Every company faces a wide range of competitors. A company must secure a strategic advantage
over competitors by positioning their offerings to be successful in the marketplace.
No single competitive strategy is best for all companies. Competitors may be
local or international, they affects the daily transactions of business
companies. For CG Associates electronic goods another competitors may arise.
Public :- Public is any group that has an
actual or potential interest in or impact on an organization’s ability to
achieve its objectives. A company should prepare a marketing plan for all of
their major publics as well as their customer markets. Generally, publics
can be identified as being: Financial publics, which influences the company’s ability to obtain funds: Media publics, who carries news, features, and editorial opinion:
Government publics, who takes
developments into account: Citizen action
publics, which questions about consumers needs, wants and demands while
making company’s decision: Local publics, which includes neighborhood residents and
community organizations: General publics, which a company must be
concerned about the general public’s attitude toward its products and
services and Internal publics i.e., workers,
managers, volunteers, and the board of directors.
Macro-environment :- The company and all of the other actors operate in a larger
macro environment of forces that shape opportunities and pose threats to the company is known as macro
environment. There are six major forces in the company’s macro environment.
a.
Demographic. b. Economic. c. Natural. d. Technological. e. Political. f. Cultural.
Demographic Environment:- Demography is the study of
human populations in terms of size,
density, location, age, sex, race, occupation, and other statistics. It is of
major interest to marketers because it involves people and people make up
markets. Demographic trends are constantly changing. Some more interesting ones
are.
1).
The world’s population rate is growing at an explosive rate that will soon
exceed food supply and ability to adequately service the population. The
greatest danger is in the poorest countries where poverty contributes to the
difficulties
.
2).
The most important trend is the changing
age structure of the population. The population is aging because of a slowdown
in the birth rate and life expectancy is
increasing. The new prime market is the middle age group.
3).
Generational marketing is possible, however, caution must be used to avoid
Generational
alienation. Many in the modern family now telecommute in work at home or in a
remote office and conduct their business using fax, cell phones, modem, or the
Internet. In general, the population
is becoming better educated. The
work force is becoming more electronic goods consumer. Products such as books
and education services appeal to groups following this trend. Technical skills,
such as in computers is increasing day by day.
4).
The final demographic trend is the increasing ethnic and racial diversity of
the population. Diversity is a force that must be recognized in the next
decade. However, companies must recognize that diversity goes beyond ethnic
heritage.
Economic Environment :- the available purchasing power
in an economy depends on the current income, savings, debts and credit
availability. Marketers must be careful to trends affecting purchasing power
because these can have a strong impact on business, especially for companies
offering products geared to high-income and price-sensitive consumers. Income
distribution, lifestyle, consumables, spending capacity, government
recognition towards publics is the
economic environment which plays vital role in selling and distribution of
goods and services by business organizations.
Natural Environment:- The natural
environment involves natural resources that are needed as inputs by
marketers or that are affected by
marketing activities. During the past two decades
environmental
concerns have steadily grown. Some trend analysts labeled the specific areas of
concern are:
1).Shortages
of raw materials:
Staples
such as air, water, and wood products have been seriously damaged and
non-renewable such as oil, coal, and various minerals have been seriously
depleted during industrial expansion.
Increased
pollution is a worldwide problem. Industrial damage to the environment
is very serious. Far-sighted companies are becoming “environmentally friendly”
and are producing environmentally safe and recyclable or biodegradable goods.
The public response to these companies is encouraging. However, lack of
adequate funding, especially in third world countries, is a major barrier.
Government intervention in natural resource management
has caused environmental concerns to be more practical and necessary in
business and industry. Leadership, not punishment, seems to be the best policy
for long-term results. Instead of opposing
regulation, marketers should help develop solutions to the material and
energy problems facing the world.
4).Environmentally
sustainable strategies:
The
so-called green movement has encouraged or even demanded that firms produce
strategies that are not only environmentally friendly but are also
environmentally proactive. Firms are beginning to recognize the link
between a healthy economy and a healthy environment.
Technological Environment :- The technological
environment includes forces that create new technologies, creating
new product and market opportunities. Technology is perhaps the most
dramatic force shaping our destiny. New technologies create new markets and
opportunities. Products are being technologically outdated at a
rapid pace. There seems to be almost unlimited opportunities being
developed daily. Consider the expanding fields of health care, the space
shuttle, robotics, and biogenetic industries. The challenge is not only technical
but also commercial to make practical, affordable versions of products, increased regulation e.t.c. Marketers should
be aware of the regulations concerning product safety, individual privacy, and
other areas that affect technological changes. They must also be alert to any
possible negative aspects of an innovation that might harm users or arouse
opposition.
Political Environment :- The political
environment includes laws, government agencies, and pressure groups that
influence and limit various
organizations and individuals in a given
society. Various forms of legislation regulate business. Governments
develops public policy
to
guide commerce, sets of laws and regulations limiting business for the
good of society as a whole. Almost every marketing activity is subject to a
wide range of laws and regulations.
Socio-cultural environment :-
Society shapes the beliefs, values and norms that largely define
consumer preferences. The cultural environment is made-up of institutions and
other forces that affects society’s
basic values, perceptions, preferences, and
behaviors. Certain cultural characteristics can affect marketing decision-making.
1).
Persistence of cultural values.
People’s core beliefs and values have a high degree of persistence. Core beliefs and values are passed on
from parents to children and are
reinforced by schools, churches, business, and government. Secondary beliefs and values are more
open to change.
2). Shifts
in secondary cultural values. Since secondary cultural values and beliefs are
open to change, marketers want to spot them and be able to capitalize on the
change potential.
Task 4
Propose
segmentation criteria to be used for two selected products(such as home
appliances, communication devices e.t.c.) in different markets. Justify how
your proposed segmentation criteria will work. (2.2)D2
Market segmentation is the technique used to enable a
business to better target it products at the right customers. It is about
identifying the specific needs and wants of customer groups and then using
those insights into providing products and services which meet customer needs.
It is the process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment. . Segments are usually measured in
terms of sales value or volume.
In the
context of Nepal, it is a landlocked country with more hilly regions and
mountains than plain land. And there is no sufficient roadways linking capital
cities to other remote areas. So, CG Associates should segment its products
according to following factors :-
Geographic Segmentation
This
is perhaps the most common form of market segmentation, where in companies
segment the market by attacking a restricted geographic area. For example,
corporations may choose to market their brands in certain countries, but not in
others. A brand could be sold only in one market, one state, or one region of
the United States. Many restaurant chains focus on a limited geographic area to
achieve concentration of force. Regional differences in consumer preferences
exist, and this often provides a basis for geographic specialization. Taking
CG, its main focus area is Kathmandu, whereas its products is also supplied in
other parts of Nepal but in lower quantity. Likewise, a picante sauce might
concentrate its distribution and advertising in the southwest. A chainsaw
company might only market its products in areas with forests. Geographic
segmentation can take many forms (urban versus rural, north versus south,
seacoasts versus interior, warm areas versus cold, high-humidity areas versus
dry areas, high-elevation versus low-elevation areas, and so on). These
examples also reveal that geographic segmentation is sometimes a surrogate for
(or a means to) other types of segmentation.
Demographic
Segmentation
Gender, age, income, housing type, and education
level are common demographic variables. Some brands are targeted only to women,
others only to men. Music downloads tend to be targeted to the young, while
hearing aids are targeted to the elderly. Education levels often define market
segments. For instance, private elementary schools might define their target
market as highly educated households containing women of childbearing age.
Demographic segmentation almost always plays some role in a segmentation
strategy.
Psychographic
or Lifestyle Segmentation
Psychographic segmentation, based upon multi-variant analysis of consumer attitudes,
values, behaviors, emotions, perceptions, beliefs, and interests. Psychographic
segmentation is a legitimate way to segmenting a market, if we can identify the
proper segmentation variables (or lifestyle statements, words, pictures, etc.).
Behavioral
segmentation
Behavioral segmentation takes into account the
specific behavior of consumers related to occasions, benefits, user status and
rates, loyalty status, attitude towards products e.t.c. A consumer’s
preferences may change depending on the kind of occasion. Products such as T.V.
refrigerators, washing machines are highly sold-out in some special occasions
and festival times.
Task 5
Choose
and discuss a targeting strategy for a selected product (such as home
appliance, communication devices e.t.c.) and propose new positioning for the
products. Justify your proposal. (2.3, 2.5)M3
As CG Associates is a leading home appliances and
communication devices manufacturer in Nepal, It is also the most favored
products by customers amongst others. The company manufactures different
electronic goods which will fulfill all customer’s needs and expectations from
high pay customers to low level customers. Once the firm has successfully
identified the needs, wants and demands of the customers within a market, the
next step is to target these segments with products that closely match the
needs of the customers within that segment. There are a number of
targeting strategies, including:
Niche/concentration
marketing – this is concerned with targeting one particular,
well-defined group of customers (a niche) within the overall market.
Jordan’s,
the cereal company, adopted this approach by targeting groups of customers
interested in organic products at a time when this group of consumers
represented a relatively small proportion of the overall market.
Niche
markets can be targeted profitably by small firms who have relatively small
overheads and, therefore, do not need to achieve the volume of sales required
by larger competitors.
The
main disadvantages of niche markets are that the potential for sales growth and
economies of scale may be limited, and the survival of the firm may be
seriously affected if sales begin to decline.
Mass/undifferentiated
marketing – this is concerned with selling a single product to the
whole market. This strategy is based on the assumption that, in respect
to the product in question, customers’ needs are very similar if not
identical.
The
main benefit for the firm is that it can produce on a large scale, benefiting
from low unit production costs via economies of scale. These lower costs
can be passed on to the consumer in the form of lower prices because, although
profit margins on each item sold may be lower, high sales volume should
generate large profits overall.
The
main disadvantage of mass marketing is that, increasingly in today’s markets,
consumers are less interested in standardized products and often prepared to
pay premium prices for products that cater for their specific needs.
Differentiated/selective
marketing – this is concerned with targeting each segment with a
product with its own marketing mix designed to match the needs of the consumers
within the segment.
By
tailoring products to meet consumer needs more closely, firms are likely to
increase consumer satisfaction and generate a greater degree of consumer
loyalty.
The
differentiated approach also allows the firm to spread risks, so that it will
be less affected by a decline in demand from one segment.
The main disadvantages of this approach include
confusion amongst customers when faced with dozens of brands and lost economies
of scale from shorter production runs and the additional costs of having to
advertise several rather than one brand.
After making targeting strategy, company makes
positioning strategies. Positioning means the act of designing the company’s
offering and image to occupy a distinctive place in the minds of the target
markets.(Trout et al 2000). In other words, positioning is make right place of
products in consumer’s mind to make sales higher and make company in benefits.
A right market positioning helps to make appropriate marketing strategies for
the products with making special plans for company, staffs as well as its
customers. The result of positioning is the successful creation of a
customer-focused value proposition which will help the company to make
customers buy higher. Making right product, targeting right customers,
delivering in right time is called positioning.
CG Associates can make positioning by targeting it
loyal customers. The company can introduce newer and high-quality products,
which will give high satisfaction to customers and make the keep in touch with
their mind. CG Associates, Television has been set-upped in customers mind, so
its sales is conducted automatically.
Task 6
Demonstrate
how buyer behavior affects marketing activities in different buying situations.
(2.4)D3
Buying Behavior is the decision processes and acts
of people involved in buying and using products.
A buyer or consumer purchases goods or products from
the company and he/she starts to consume it and will be familiar with it. There
are six stages of consumption of products for a normal buyer. They are ; need
recognition and problem awareness, information search, evaluation of
alternatives, purchases, post-purchase evaluation. First of all, buyers needs
some help to find-out what he/she wants and what are the common problems to get
that product, then, he/she searches appropriate products which will satisfy
needs, wants and demands, After that comes the evaluation phase in which buyer
compares one product to another substitutes and then he/she purchases the
product and consumes it. After consuming the product, buyer evaluates the
service of the company, delivery process, product satisfaction, product’s other
utilities e.t.c. and if he/she is really satisfy from that product he/she will
regular buy that product.
So by buyer behavior, company makes loyal customers
who has effective knowledge and ideas about that product and who makes higher
purchase in the company.
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