Question 1: You must answer question 1. It is in two parts o (1.

1) to answer this question students should be able to demonstrate their clear understating the benefits of segmentation o (1.2) to answer this question students should be able to demonstrate a clear understanding of the limits of segmentation, and choose a market to provide examples of the disadvantages of too much segmentation? Question 1: o Why would you segment a market? What is the point?

In a business world, a great challenge lies ahead for its growth and survival among its tough competitors. For many organizations, a good perceptive of how definite group of people identify and respond to certain types of advertising is key component of how products or services are offered to each group. Hence business executives employ a strategy, called market segmentation. The market segmentation defines as grouping heterogeneous customers in a market into smaller, more similar homogeneous customer groups. It very important to segment a market because the company allows your marketing or sales program to focus on a specific group of prospects that are most likely to purchase your products or services. If its done properly, this will help the company to insure the highest return for its market or sales expenditures. Significantly, it will bring positive results such as enabling an organization to better serve a more homogeneous and tightly defined set of customers, recognize opportunities, compete more efficiently, develop customer satisfaction levels, and utilize its resources in a more resourceful manner.

Noted that whether you are selling your products or providing services to individual consumers or a business, there are specific distinctions in what you will to carefully think about when defining market segments.

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o What would happen if there were no segments? What products would we offer our customers? What prices? Advertising? Distribution? How does segmentation help create value?

A company cannot formulate a market strategy without market segmentation. Imagine that you became a sales assistant one day. And the only thing your immediate boss told you is that you have to assist your customer. There would be several questions asked by you. Which of the products am I selling? How would this product help my customer? How much this product will cost? If you dont ask these questions, the Customers will be very generic term for you, and you will have no thought to whom you have to sell your product or what bran you will have to sell.

The same predicament is faced by companies. If they dont implement segmentation, they will not identify to whom they have to sell and what they have to sell. Hence, market segmentation plays a crucial factor in a companys marketing efforts to better understand their consumers.

Determining your segment prospects, the company could have a better insight into which segments they can successfully focus on what the products or services they can offer to their consumers or better ways to improve its product or service. Furthermore, target segments are identified by several different demographics in localities or regions, income, age, ecommerce and buying patterns. Marketing campaigns are developed and put into action based on that segmentation. And most likely they could have an idea of the price into which their customer is willing to pay just to have that product or experience the service that the company offers. It will increase competitiveness as well as brand loyalty that will definitely increase too. People in a particular market segment would feel valued as the company focuses on their needs and wants in a certain product or service.

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Furthermore, segmentation is based on customer buying behavior characteristics: their needs, buying decision-making criteria and the influencing factors impacting on their choices. And for the companies practicing segmentation, they can identify their specific group in which they can do more surveys that would encourage their customers to suggest ways of improving the companys product or services. This may lead to changes in packaging or appearance of their products through advertising these improvements and that would send a clear message to their consumers of recognizing their needs is as important to the company as makings profits.

o Can you segment too much? Choose an example of a market that is too segmented, or an example of the way a market would look if it were too segmented.

Segmentation on the hand has its own limitations, as it needs to be executed properly. As segmentation plays a vital role in the marketing activities, you need to be aware of what pitfalls beforehand if you go wrong with your target segment. These limitations include the following - targeting multiple segments increases marketing costs, segmentation can lead to creation of too many brands/products, narrowly segmenting a market can hamper the development of broad-brand equity, consumers are misunderstood and confused and product is entirely new.

For example, if too much segmentation it will surely costs the company a lot of money turned out to be expensive. Targeting a segment is a good start but it needs to know how much you will have to spend to target a certain segment. If it is a Sec A segment, then you will have another Sec B segment, and so on, it will result to failure. Like the consumers would be confused of what really is your product or service that your company wants to offer.

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o Think about why we segment a market and what a segment has to be (MASDA). What happens if we offer too many types of product for too many different segments? Remember to give an example!

Requirements for effective segmentation: Measureable size, purchasing power, profiles of segments can be measured. If you cant recognize the customers, practically you dont have a segment . For example, your company wants to introduce a new beauty product that would erase pigmentations, blemishes, etc. for sure this target segment is assessable, knowing a lot of women would want to make their skin flawless. Accessible segments must be effectively reached and served. Locations that are reachable, definitely you have segment. For instance, a new restaurant located in nearby universities would like to know their popular food likes leading to positive segment. Substantial segments must be large or profitable enough to serve. Segmenting is expensive be careful not to segment too much! Too many segments would result to confusion, cannot focus on one brand/product because tendency you can create lots of products out these segments. Differential segments must respond differently to different marketing mix elements and actions. Once more, this is expensive if two segments behave the same, leave it as one segment. Actionable must be able to attract and serve the segments. You cant advertise soda drinks in a form of healthy drinks, for all we know it contains caffeine, sugar, etc. that would only worsen your health, especially if you have diabetes.

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Question 2: You must answer question 2. It is in two parts o (2.1) to answer this question students should be able to demonstrate their knowledge about the differences between consumer buying behavior and business buying behavior, show these differences using an example provided. o ( 2.2) To answer this question students should be able to demonstrate a clear understanding of the buying center in an organization , what does it do , and what should you do if you are marketing to do this kind of organization ?

Four different questions A, B, C & D Question A: This question is related to long term relationship with customers; it is in two parts o (3.1) to answer this question students should demonstrate the measures that can be undertaken to encourage long-term relationship with customers. o (3.2) to answer this question student should be able to describe the advantages and disadvantages of creating relationships with consumers for an example product

Question A: o How can you encourage long term relationships?

For every company, it is said that the customers are the core of every business. They are the main factors for bringing sales and profits to business. The more customers you have, the more sales you get. Consequently its better to retain old customers than attain new ones. Since it is often costs more to gain a new customer than to keep a present one.

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Taking good care of customers and treating them with due respect is all about customer relationship. It is essential to provide them with products and services that would inspire them to make frequent transactions.

In having a good relation skill to our customers, it is essential to have these strategies that would encourage them for a longer relationship.

Fulfill your promises. Anything you state in your business posters, commercials, or brochures must be realized. For example, if your beauty product claims that it will whiten your face in 7 weeks, then the customer would have notice the changes. Otherwise, it will lose the credibility of your product. Pay attention to every detail about your customers. A good practice to carry out is to ask for suggestions and feedback from your customers to make them realize they are valued in your business. Offer rewards to loyal customers to keep them coming from more. Appreciation is the key. When the customers feel they are appreciated most likely it would foster a personal and lasting relationship with their product or service. Provide attractive and something pleasant offers like freebies, rebates, etc. Dont forget to thank the customers for their continuous support. Go beyond their expectations. Customers continuous support will last longer when you deliver products or services always above the norm.

o We will give you an example of a major purchase, for the manufacturer of that product, what are the advantages and disadvantages of creating relationship with consumers?

Advantages are as follows: Reaching out for more customers in terms of awareness with regards to your product means to more sales/profits.

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Once they knew and supported the product, it will create stability between the manufacturer and the consumer.

Consistency in brand image. Since your customer is already familiar and satisfied with the product, it doesnt necessary need to advertise it aggressively in the market because your product established credibility.

Disadvantages are as follows: High costs in maintaining a relationship with usual consumers. Like there should be always a strategy to keep them supporting you product, promotions, etc. More responsibility in taking good care of your products image.

Question B: This question is related to product life cycles, it is in two parts o (4.1) To answer this question students should be able to know the product life cycle affects product development strategy o (4.2) To answer this question students should be able to use an example to show the differences between marketing a product in different stages of the life cycle

The standard different stages of the PLC are: introduction, growth, maturity and decline. These follow the human life cycle. In a competitive world of business, when a product achieves the maturity phase, competitive pressure and declining consumer interest may mean reduced profits, leading to the withdrawal from the market of certain competitors. For those competitors remaining, adequate demand may continue to create important sales, but companies are still likely to have to up-date their marketing mix activities.

To better illustrate different stage of the product life cycle, one must have a broad mind to explore all the possibilities of marketing activities to ensure the company will survive at all times. In the introductory phase, sales are zero and profits are negative, but a

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company must nonetheless endow in marketing activity to initiate product and brand awareness and trial. During the growth stage, as sales rise, a company must ensure its production ability is able to keep pace and that it has sufficient distribution coverage. The business should also be aware that greater numbers of competitors will enter the marketplace, requiring defensive marketing strategies and increasing marketing budgets. For instance, you have built a photo booth for special occasions and at the start, you are only few who competes each other. After some time, you wouldnt be surprise, there are many competitors doing the same business like you! Throughout the maturity stage, with declining profitability, the business must decide whether to continue operation in the target market or to withdraw. If the former, the marketing mix will require modification in order to revitalize sales. For the period of the decline stage, most remaining suppliers will withdraw. If a company decides to remain, though in a much smaller market, it is possible to carve out a successful niche.

Question C: o (5.1) To answer this question students should explain why a company should invest money to keep existing customers loyal ( customer relation ) o (5.2) To answer this question students should be able to provide examples that illustrate why it is important to consider customer Lifetime value

Question C:

o Reasons that customer relation is worth investing money in?

Everyone in the business entities want to retain their existing customers as well as to attract new ones. Organizations without positive customer relations approaches may rapidly lose their customers in a quick of time. As it was discuss PLC, during the growth stage, as the profits getting high, it is important to take care of your customers as well. Without their continuous support of your companys product or service, the venture will

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decline soon. Not only you would lose profits if you dont have positive relationship with your customers but also the opportunities that company could expand for further growth. In a case of Jollibee, a famous Filipino multinational chain of fast food restaurants in Philippines, it all started in ice cream parlor. Their expansion and acquisitions is because the company has built a solid relationship with their loyal customers. From knowing the unique taste of their customers to friendly staff, and so on. At present, it is the largest fast-food chain conquering other nations as well.

o Examples for the reasons that CLV is important

The face of marketing has changed. From making outlandish claims and misleading remarks just to sell their products to the concept of Customer Lifetime Value or CLV. CLV can be classified as the total profit that a particular customer brings to your company over their lifetime. It is essentially the amount of time that a customers lifetime is spend in your company as of the beginning until the end they visited to your store/shop to the last minute they buy something from you.

Reasons why CLV is important: CLV is helpful for predicting future sales and profits; it can also be useful for managing costs and resources effectively. CLV can easily identify the customer segments that are bringing most profit to your venture, thereby depicting the most suitable segments to allocate your marketing promotions. For example, most of the customers in Jollibee are families. Bringing their children to eat their, having quality bonding while spending time to eat as a family. Since the company has already identified their loyal customers, they can have better promotions to encourage more families to eat there, introducing new meals to satisfy their hunger, and even changing their environment/space to have a better feeling of at home.

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CLC can help to establish the amount that will be required to retain a specific customer.

Question D: This question is related to services, it is in two parts o (6.1) to answer this question students should be able to outline the four distinguishing characteristics of a service. And provide an example for each. These characteristics make services different than goods. o (6.2) to answer this question students explain the challenges that these differences pose for the marketing of services, as opposed to goods.

Question D: o Examples of: intangibility, inseparability, variability, and perishability: one clear example of each.

Intangibility
A service cannot be seen, smelled, heard, or touched prior to purchase. Ex. Govt sector services It could include a brand name, logo, animal, sound or slogan. Ex. Youre in good hands with Metrobank

Perishability
A service cannot be stored like a physical good. If it is not distributed, it is lost or it does not exist. Ex. A Valentine concert Cannot be inventoried. Ex. Airplane empty seat

Services
Inseparabilty
A service is performed and consumed at the same time. Ex. Hair rebonding at salon, School Student, Dentist Patient Most, but not all, services are delivered by people. Ex. Repairing cellphone

Variability
Each time a service is performed it will be performed in a different way. Ex. Teaching students with different strategies Strategy of customization. Ex. Custom Fitness programs, SPED life skills program

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o The challenges that these pose to the marketing of services, for example: why must we add three Ps? What is the importance of experience, referrals, and company image?

The characteristics of the service product, notably its intangibility, place great emphasis on creating a distinctive branding in services. For instance, Fitness Gym has created a product proposition based on the club notion, focusing on all-in services targeting adults desiring to be in good shape and have healthy lifestyle. The concept is intended to transport customers from their busy lives into fun, flexible routines, enjoyable atmosphere, in reachable locations. The Fitness Gym concept is uniform across its one hundred locations, ensuring regular customers visiting a different Fitness Gym find reassuring familiarity. This, linked with carefully managed customer service levels and the payment of a joining fee to the club, ensures on-going loyalty and repeat buying.

Another situation wherein a customer in a bank may be withdrawing cash, paying bills, enquiring about a mortgage, arranging life assurance or negotiating a loan. The bank, be it Dubai Bank, Rakbank, HSBC or Standard, will have a range of products to offer such a customer, all branded and promoted extensively through promotional mix activity. To the customer in the branch at the moment of enquiry, however, the product is only as good, appealing and effectively positioned as the bank staff offering the advice, guidance and providing the customer service. The customer also will be devotedly aware of the surrounding ambience and of how easy and straightforward the enquiry process has been. In this case, as in most services, the additional ingredients of the services marketing mix will be pivotal in the customers perception of product quality and ultimately in the level of customer satisfaction experienced.

Hence, we can add the three Ps - product, price, and place, which are vital to marketing services. Marketers must devote significant management time and resources to controlling service quality.

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