ASSIGNMENT No.

01
Marketing Management (8511) MBA / M. Com
Autumn, 2016
Q. 1 Describe the significance of integrated marketing and internal marketing with
example. (20)

A company's leadership closely watches certain factors before drawing up a marketing strategy.
Although most of these factors draw on the external environment, some internal elements -- such as
the organization's financial soundness -- may affect the marketing blueprint. The five components of
an external marketing environment are customers, suppliers, competitors, substitutes and entrants.

A large portion of any market analysis hinges on market research done before the actual analysis. Prior
research could include exploratory, secondary and primary research. Exploratory research defines the
basics of the market, secondary research uses existing studies and sources such as the U.S. census for
the analysis, and primary research uses tools such as surveys to gather data for the current, specific
market analysis. Once all the information is gathered, it's evaluated and split into various components
for a formal market analysis.

Customer Description

Customer description depicts the people in the company's market, known as the demographic or target
market. Demographics could be categorized any number of ways including income, buying habits,
geographic location or age. Knowing the size of the market is important because that figure is the basis
for projected income and overall business goals. Market researchers may also analyze factors such as
the values that drive individuals in the demographic, how they make their decisions and their purchase
power.

Customer Perception

How the target demographic perceives the business and the product is also an important aspect to
market analysis. The research for this analysis is often primary and in the form of surveys and focus
groups. The analysis of the gathered information lets the business know about consumer attitudes,
how likely they are to buy and their brand awareness and recognition.

Customers

Corporate leadership factors customer aspects in strategic discussions to find new ways to satisfy the
existing clientele but also to devise novel ways to attract new customers or convince the disinclined
ones to do business with the company. Dissatisfied customers, a source of long-term operating losses,
might resume business with the company if it changes its operational procedures, provides top-notch
service and beats rivals' prices. A customer-centric business strategy aims to align clients' needs and
desires with a company's portfolio of products and services.

Suppliers

Suppliers play an essential role in the competitive landscape, providing organizations with the
necessary raw materials to produce work-in process items and completely finished goods. In
formulating a business strategy, company principals often must ponder the best way to cultivate ties
with suppliers, and must think about proper methodologies to purchase top-quality goods affordably.
For example, senior executives could wonder whether it's better to have a single lead supplier in each
country or whether it's more advantageous to deal with multiple lead vendors.

Competitors

A business rarely evolves in a commercial vacuum; therefore it must factor rivals in its marketing
equation, unless the company is a monopoly. The presence of competitors often requires that a
company organize itself around the most promising opportunities and segments, shying away from

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conventional structures that might mandate a commercial focus on a single industry or region. Simply
put, the business must target sectors where it is more likely to make more money, make it quickly and
expand in the long term.

Substitutes

A substitute product is an item that, at least partly, satisfies customers' needs and desires. Clients use
substitutes as replacement products, if -- or when -- original products are temporarily unavailable or
inaccessible because of prohibitive pricing. A business must consider the threat of substitute products
and services because these items typically whittle away at the organization's profit potential.
Consequently, management may set procedures to educate customers and make them savvier about
the relationship between quality and price -- specifying plausible reasons why the company's products
are better than substitutes.

Entrants

Paying attention to market entrants helps a company determine the sector's penetration rate, which
illustrates how easily another business can enter the industry. Reviewing entrant activities draws on
competitive analysis because today's new entrants might be tomorrow's rivals, unless the newcomers
quickly fade away thanks to the intense marketplace rivalry.

Appropriate marketing objectives for organization

Organizations succeed or fail based on perception. Whether your organization is not-for-profit, selling
televisions or offering tax preparation services, your customers or clients will come to you because
they think you can do the best job at the most competitive price. How you make your customer aware
of your offering is as important as the offering itself. A solid marketing strategy cannot be understated.

Target Market

A comprehensive strategy will add value by helping you target your customers. You will not be able to
maximize sales if you are uncertain who needs what you have. To do this effectively, consult with your
in-house marketing expert or hire a marketing firm that has experience in target marketing and
segmentation. They can assist in segmenting your customer base, which in turn will drive the
customer-facing portion of your strategy.

Competitive Analysis

Understanding your competition is as important as understanding your customer. It is important that

your marketing strategy takes into account the companies that offer similar products and services. In
the digital age, it's important to conduct this research on a local, national and global scale. A well-
rounded strategy should document the opportunities and dangers of entering the market with these
competitors and identify how you will differentiate yourself to avoid competing solely on price.

Market Segment

A strategic understanding of your customer and your competitive landscape can aid in identifying the
appropriate market segment. Many organizations choose to target the high-quality end of a market
because they can charge higher prices and often enjoy better profits. However, if you are focused on
high volume, you may decide to pursue the lower end of the market. These are vital components to
any business plan. Effectively integrating them into a marketing strategy can help your company
maintain its focus.

Advertise

Organizations often rush into advertising campaigns without much formal strategy at all. However, if
your plan accounts for your customer, your competition and your market, you are more likely to
achieve better advertising results. Such straightforward strategies may employ classic selling
techniques in order to create awareness and help increase your customer's confidence in your
organization's brand. This can be done with the help of an advertising agency to determine the best

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use of marketing funds. Be sure to consider the cost of such promotions by forecasting the amount of
new customers you hope to gain.

Q. 2 Describe the nature and contents of a marketing plan. Also explain the steps involved
in business unit strategic planning process. (20)

Plans and planning. Plans are needed to clarify what kinds of strategic objectives an organization
would like to achieve and how this is to be done. Such plans must consider the amount of resources
available. One critical resource is capital. Microsoft keeps a great deal of cash on hand to be able to
jump on opportunities that come about. Small startup software firms, on the other hand, may have
limited cash on hand. This means that they may have to forego what would have been a good
investment because they do not have the cash to invest and cannot find a way to raise the capital.
Other resources that affect what a firm may be able to achieve include factors such as:

Trademarks/brand names: It would be very difficult to compete against Coke and Pepsi in the
cola market.
Patents: It would be difficult to compete against Intel and AMD in the microprocessor market
since both these firms have a number of patents that it is difficult to get around.
People: Even with all of Microsofts money available, it could not immediately hire the people
needed to manufacture computer chips.
Distribution: Stores have space for only a fraction of the products they are offered, so they
must turn many away. A firm that does not have an established relationship with stores will be at a
disadvantage in trying to introduce a new product.

Plans are subject to the choices and policies that the organization has made. Some firms have goals of
social responsibility, for example. Some firms are willing to take a greater risk, which may result in a
very large payoff but also involve the risk of a large loss, than others.
Strategic marketing is best seen as an ongoing and never-ending process. Typically:

The organization will identify the objectives it wishes to achieve. This could involve profitability
directly, but often profitability is a long term goal that may require some intermediate
steps. The firm may seek to increase market share, achieve distribution in more outlets, have sales
grow by a certain percentage, or have consumers evaluate the product more favorably. Some
organizations have objectives that are not focused on monetary profite.g., promoting literacy or
preventing breast cancer.
An analysis is made, taking into consideration issues such as organizational
resources, competitors, the competitors strengths, different types of customers, changes in
the market, or the impact of new technology.
Based on this analysis, a plan is made based on tradeoffs between the advantages
and disadvantages of different options available.
This strategy is then carried out. The firm may design new products, revamp its advertising
strategy, invest in getting more stores to carry the product, or decide to focus on a new customer
segment.
After implementation, the results or outcome are evaluated. If results are not as desired, a
change may have to be made to the strategy. Even if results are satisfactory, the firm still needs to
monitor the environment for changes.

Levels of planning and strategies. Plans for a firm can be made at several different levels. At
the corporate level, the management considers the objectives of the firm as a whole. For example,
Microsoft may want seek to grow by providing high quality software, hardware, and services to
consumers. To achieve this goal, the firm may be willing to invest aggressively.

Plans can also be made at the business unit level. For example, although Microsoft is best known for its
operating systems and applications software, the firm also provides Internet access and makes video
games. Different managers will have responsibilities for different areas, and goals may best be made
by those closest to the business area being considered. It is also more practical to hold managers
accountable for performance if the plan is being made at a more specific level. Boeing has both
commercial aircraft and defense divisions. Each is run by different managers, although there is some
overlap in technology between the two. Therefore, plans are needed both at the corporate and at the
business levels.
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Occasionally, plans will be made at the functional level, to allow managers to specialize and to increase
managerial accountability. Marketing, for example, may be charged with increasing awareness of
Microsoft game consoles to 55% of the U.S. population or to increase the number of units of Microsoft
Office sold. Finance may be charged with raising a given amount of capital at a given cost.
Manufacturing may be charged with decreasing production costs by 5%.

The firm needs to identify the business it is in. Here, a balance must be made so that the firms scope
is not defined too narrowly or too broadly. A firm may define its goal very narrowly and then miss
opportunities in the market place. For example, if Dell were to define itself only as a computer
company, it might miss an opportunity to branch into PDAs or Internet service. Thus, they might
instead define themselves as a provider of information solutions. A company should not define itself
too broadly, however, since this may result in loss of focus. For example, a manufacturer of baking
soda should probably not see itself as a manufacturer of all types of chemicals. Sometimes, companies
can define themselves in terms of a customer need. For example, 3M sees itself as being in the
business of making products whose surfaces are bonded together. This accounts for both Post-It notes
and computer disks.

A firms mission should generally include a discussion of the customers served(e.g., Wal-Mart and
Nordstroms serve different groups), the kind of technology involved, and the markets served.
Several issues are involved in selecting target customers. We will consider these in more detail within
the context of segmentation, but for now, the firm needs to consider issues such as:

The size of various market segments;

How well these segments are being served by existing firms;
Changes in the markete.g., growth of segments or change in technology;
How the firm should be positioned, or seen by customers. For example, Wal-Mart positions itself
as providing value in retailing, while Nordstroms defines itself more in terms of high levels of customer
service.

The Boston Consulting Group (BCG) matrix provides a firm an opportunity to assess how well its
business units work together. Each business unit is evaluated in terms of two factors: market
share and the growth prospects in the market. Generally, the larger a firms share, the stronger its
position, and the greater the growth in a market, the better future possibilities. Four combinations
emerge:

A star represents a business unit that has a high share in a growing market. For example,
Motorola has a large share in the rapidly growing market for cellular phones.
A question mark results when a unit has a small share in a rapidly growing market. The firms
position, then, is not as strong as it would have been had its market share been greater, but there is
an opportunity to grow. For example, Hewlett-Packard has a small share of the digital camera market,
but this is a very rapidly growing market.
A cash cow results when a firm has a large share in a market that is not growing, and may even
be shrinking. Brother has a large share of the typewriter market.
A dog results when a business unit has a small share in a market that is not growing. This is
generally a somewhat unattractive situation, although dogs can still be profitable in the short run. For
example, Smith Corona how has a small share of the typewriter market.

Firms are usually best of with a portfolio that has a balance of firms in each category. The cash cows
tend to generate cash but require little future investment. On the other hand, stars generate some
cash, but even more cash is needed to invest in the futurefor research and development, marketing
campaigns, and building new manufacturing facilities. Therefore, a firm may take excess cash from the
cash cow and divert it to the star. For example, Brother could harvest its profits from typewriters and
invest this in the unit making color laser printers, which will need the cash to grow. If a firm has cash
cows that generate a lot of cash, this may be used to try to improve the market share of a question
mark. A firm that has a number of promising stars in its portfolio may be in serious trouble if it does
not have any cash cows to support it. If it is about to run out of cashregardless of how profitable it
is is becomes vulnerable as a takeover target from a firm that has the cash to continue running it.

A SWOT (Strengths, Opportunities, Weaknesses, and Threats) analysis is used to help the
firm identify effective strategies. Successful firms such as Microsoft have certain strengths. Microsoft,
for example, has a great deal of technology, a huge staff of very talented engineers, a great deal of
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experience in designing software, a very large market share, a well respected brand name, and a great
deal of cash. Microsoft also has some weaknesses, however: The game console and MSN units are
currently running at a loss, and MSN has been unable to achieve desired levels of growth. Firms may
face opportunities in the current market. Microsoft, for example, may have the opportunity to take
advantage of its brand name to enter into the hardware market. Microsoft may also become a trusted
source of consumer services. Microsoft currently faces several threats, including the weak economy.
Because fewer new computers are bough during a recession, fewer operating systems and software
packages.

Rather than merely listing strengths, weaknesses, opportunities, and threats, a SWOT analysis should
suggest how the firm may use its strengths and opportunities to overcome weaknesses and
threats. Decisions should also be made as to how resources should be allocated. For example,
Microsoft could either decide to put more resources into MSN or to abandon this unit entirely. Microsoft
has a great deal of cash ready to spend, so the option to put resources toward MSN is available.
Microsoft will also need to see how threats can be addressed. The firm can earn political good will by
engaging in charitable acts, which it has money available to fund. For example, Microsoft has donated
software and computers to schools. It can forego temporary profits by reducing prices temporarily to
increase demand, or can hold out by maintaining current prices while not selling as many units.

Criteria for effective marketing plans. Marketing plans should meet several criteria:

The plan must be specific enough so that it can be implemented and communicated to people in
the firm. Improving profitability is usually too vague, but increasing net profits by 5%, increasing
market share by 10%, gaining distribution in 2,000 more stores, and reducing manufacturing costs by
2% are all specific.
The plan must be measurable so that one can see if it has been achieved. The above plans
involve specific numbers.
The goal must be achievable or realistic. Plans that are unrealistic may result in poor use of
resources or lowered morale within the firm.
The goals must be consistent. For example, a firm cannot ordinarily simultaneously plan
improve product features, increase profits, and reduce prices.

Q. 3 What are macro and micro external and external and external environmental forces
which the marketers need to identify and respond? Also describe the steps involved in an
effective marketing research process. (20)

Effective marketing incorporates macro and micro-marketing strategies, terms that may not be very
familiar to many small businesspeople. They are important concepts, though, that when applied
effectively can help to boost advertising results. Even small businesses can learn how--and why--to
consider the impacts of macro and micro impacts in their planning and strategy.

Micro Environment

The micro environment, as the name suggests, is the immediate environment that impacts a business.
The micro environment includes considerations related to suppliers, customers and local stakeholders,
including local government agencies or regulatory bodies. The micro environment can generally be
considered the local environment where the business operates and the business owner is likely to be
somewhat aware of the impacts that they are faced with.

Macro Environment

The macro-environment includes those things that may impact small businesses but which are outside
of their control. It is the larger, external environment within which businesses operate from an industry
or economic standpoint.

Using Strategy Effectively

In considering the micro and macro impacts on a business, internal and external factors must be
considered. Businesses use a variety of tools in planning to consider these impacts, including the
SWOT, which is strengths, weaknesses, opportunities and threats; analysis; the PEST, which is
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political, economic, social, technological, and Porter's 5-Forces Analysis, which is the threat of new
competitors, the level of competition, the threat of substitute products, and the bargaining power of
customers and suppliers.

Customers

Customers have the most direct microeconomic impact on a business. The simple fact is that you can't
successfully operate a for-profit company without attracting targeted customers. Knowing your ideal
customer types and developing and presenting effective marketing campaigns are integral to building a
customer base and generating revenue streams.

Employees

Your workers produce, sell or service the goods and service that drive your business. The availability of
qualified, motivated employees for your business type is vital to economic success. If you operate a
highly technical business, for instance, you might have to pay more in salary to attract a limited
number of available, specialized workers.

Distribution Channels and Suppliers

Sourcing goods used in production or resale and distributing your inventory to customers are important
as well. Manufacturers rely on materials suppliers and resale companies rely on manufacturers or
wholesalers to transport goods. To operate profitably, you need to get good value on products and
supplies and, in turn, offer good value to your customers with accessible solutions.

Competitors

The level of competition also impacts your economic livelihood. In theory, more competitors means
your share of dollars customers spend diminishes. However, a large number of competitors in an
industry usually signifies lots of demand for the products or services provided. If an industry lacks
competition, you might not find enough demand to succeed in the long run.

Investors

Shareholders and investors may help fund your company at start-up or as you look to grow. Without
funds to build and expand, you likely can't operate a business. You could look to creditors, but you
have to repay loans with interest. By taking on investors, you share the risks of operating and often
gain support and expertise. You do give up some control, though.

Demographics

Businesses need to be aware of changes in the general population. Is the age distribution changing?
Are household patterns changing? Major changes in ethnicity are critical to identify. Watch population
shifts to see if the populations in cities, suburbs or rural area are changing to determine if segments of
the population are leaving one area for another. The same holds true for geographic areas. Are people
leaving one region of the country for another? Past demographic trends would include the shift from
cities to suburbs in the 50s and 60s, the aging of the Baby Boomer generation currently, the growth of
the Hispanic population over the last 20 years and the growing acceptance of the gay community
recently.

Economics

In a recession, people lose jobs, or worry about that happening to them. This makes consumers less
willing to spend their disposable income. However, in an economic expansion, job security makes
people more willing to spend their disposable income. If your customers use disposable income to buy
your product, knowing where you are in the economic cycle helps you plan production. Look at income
distribution to see if certain segments of the population are growing wealthier and acquiring new
needs. For example, a major reason that China is seen as an attractive market is a rapidly growing
Chinese middle class that desires an increasing range of consumer goods.

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Social and Cultural

Every nation has a set of core cultural beliefs that are passed from generation to generation. Changes
in these core beliefs affect consumer purchases. Once taboo, single-parent families are now considered
mainstream and are growing, creating a whole new set of product needs. Preferences for music,
entertainment, exercise, eating habits or leisure time activities change with time, creating new needs
or lessening past needs.

Technological

The development of new technology can dramatically affect needs and wants. For example, the
Internet completely changed the way people communicate. If you walk into any electronics retailer or
department store, you will literally see hundreds of new products that were directly tied to the growth
of the Internet. That shift to the Internet resulted in new consumer needs and wants, opening the door
for smart companies to take advantage of that opportunity. Today, the pace of technological change
constantly provides opportunities for new products.

Megatrends

Most of the forces discussed here will only affect certain segments of consumers and businesses. Their
effects will diminish over time. A few forces, however, affect nearly every segment of our civilization,
and their effects last generations. We refer to these forces as megatrends. Some historical megatrends
might be the printing press, the incandescent light bulb and the telephone. Today, the Internet
appears to fall into that category as well.

Media and the General Public

Your local community and media also affect your ongoing business image. Communities often support
companies that provide jobs, pay taxes and operate with social and environmental responsibility. If you
don't do these things, you may run into negative public backlash. Local media often help your story
proliferate, for better or worse.

Producers

A company relies on other producers and vendors for supplies and other production factors, such as
labor, utilities and equipment required to produce and deliver a product to a customer. As a result,
events affecting a producer or vendor also have the potential to impact customer satisfaction, whether
those events impact the availability of materials, supply chain costs or product quality. A marketing
department formulates its marketing strategy in light of these risk factors.

Marketing Intermediaries

Organizations typically rely on banks, venture capitalists and other sources to finance operations;
wholesalers and retailers, warehousers and transportation companies to distribute goods; and
advertising, market research firms and public-relations firms to market their products. The marketing
strategy is defined in part on the degree to which each intermediary can potentially increase or
decrease customer satisfaction.

Publics

"Publics" are groups that may have a significant impact on marketing activities formulated to
contribute to customers' satisfaction with a product and an organization. For example, satisfied
customers are a public that contribute to a marketing program through positive word of mouth.
Consumer advocates and watchdog groups are examples of publics that may hinder marketing
activities through negative word-of-mouth.

Company

All departments within an organization have the potential to positively or negatively impact customer
satisfaction. As a result, a marketing department works closely with the finance, purchasing, research
and development, and manufacturing departments, among others, to identify ways that each

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department can contribute to the provision of exceptional customer value, which leads to superior
customer satisfaction.

Q. 4 Discuss how companies identify attractive market segments and choose a target
marketing strategy. (20)

An attractive market segment is one that offers solid current or long-term profit potential for your
business. Companies typically consider the various segment options they have to market to and may
target one or multiple markets depending on how much money they have available to invest in
marketing.

Market Segmentation Basics

Market segmentation means breaking down a large target audience into smaller, more homogeneous
market segments. Demographics, lifestyle, geography and behavioral traits are among the common
approaches used to segment markets. By breaking customers into smaller markets of customers with
similar traits, companies can more effectively target each segment with messages that will more likely
have an impact. After market segments are identified, companies must determine which segments to
pursue first with marketing efforts.

Size

One of the most attractive features of a market segment is its size. While the largest segments do not
always offer the best potential, it is better to have a larger potential market when possible. With larger
market segments, advertisers can generate business without having to pull in as high of a percentage
of the market segment. Long-term sales volume and profitability are both higher with large markets.

Growth Potential

Another trait of attractive market segments is untapped potential. With emerging markets or market
segments that have not seen a full range of product or service offerings, a company has more
opportunity to generate business and expand market share. Additionally, the opportunity to derive high
profit margins by offering value in a way that the market has not experienced is a draw. Higher profit
margins mean you can sell less and still make money.

Competition

Along with the traits of the market segment, the amount and quality of the competition already serving
the market significantly affects a segment's attractiveness. Generally, more competitors means a
business has to work harder and invest more in advertising to earn business and increase market
share. When considering two market segments, the one that poses a less competitive environment is
most attractive if other factors, such as size and potential, are constant.

After you segment buyers and develop a measure of consumer insight about them, you can begin to
see those that have more potential. Now you are hunting with a rifle instead of a shotgun. The
question is, do you want to spend all day hunting squirrels or ten-point bucks? An attractive market
has the following characteristics:

It is sizeable (large) enough to be profitable given your operating cost. Only a tiny
fraction of the consumers in China can afford to buy cars. However, because the countrys population is
so large (nearly 1.5 billion people), more cars are sold in China than in Europe (and in the United
States, depending on the month). Three billion people in the world own cell phones. But that still
leaves three billion who dont (Corbett, 2008).
It is growing. The middle class of India is growing rapidly, making it a very attractive market
for consumer products companies. People under thirty make up the majority of the Indian population,
fueling the demand for Bollywood (Indian-made) films.
It is not already swamped by competitors, or you have found a way to stand out in a
crowd. IBM used to make PCs. However, after the marketplace became crowded with competitors,
IBM sold the product line to a Chinese company called Lenovo.
Either it is accessible or you can find a way to reach it. Accessibility, or the lack of it,
could include geographic accessibility, political and legal barriers, technological barriers, or social
barriers. For example, to overcome geographic barriers, the consumer products company Unilever
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hires women in third-world countries to distribute the companys products to rural consumers who lack
access to stores.
The company has the resources to compete in it. You might have a great idea to compete
in the wind-power market. However, it is a business that is capital intensive. What this means is that
you will either need a lot of money or must be able to raise it. You might also have to compete with
the likes of T. Boone Pickens, an oil tycoon who is attempting to develop and profit from the wind-
power market. Does your organization have the resources to do this?
It fits in with your firms mission and objectives. Consider TerraCycle, which has made
its mark by selling organic products in recycled packages. Fertilizer made from worm excrement and
sold in discarded plastic beverage bottles is just one of its products. It wouldnt be a good idea for
TerraCycle to open up a polluting, coal-fired power plant, no matter how profitable the market for the
service might be.

Multisegment Marketing

Most firms tailor their offerings in one way or another to meet the needs of different segments of
customers. Because these organizations dont have all their eggs in one basket, they are less
vulnerable to competition. Marriott International is an example of a company that operates in multiple
market segments. The company has different types of facilities designed to meet the needs of different
market segments. Marriott has invested in unique brands so consumers dont confuse the brand and
the brand is not diluted. Some of the Marriott brands and their target markets are as follows:

Marriott Courtyard. Targeted at over-the-road travelers.

Ritz-Carlton Hotels. Targeted at luxury travelers.
Marriott Conference Centers. Targeted at businesses hosting small- and midsized meetings.
Marriott ExecuStay. Targeted at executives needing month-long accommodations.
Marriott Vacation Clubs. Targeted at travelers seeking to buy timeshares.
A multisegment marketing strategy can allow firms to respond to demographic changes and other
trends in markets. For example, the growing number of people too old to travel have the option of
moving into one of Marriotts Senior Living Services facilities, which cater to retirees who need
certain types of care. A multisegment strategy can also help companies weather an economic downturn
by allowing customers to trade up or down among brands and products. Suppose you take a pay cut
and cant afford to stay at Marriotts Ritz-Carlton hotels anymore. A room at a JW Marriottthe most
luxurious of the Marriott-brand hotels but cheaper than the Ritzis available to you. A multisegment
strategy can also help companies deal with the product life cycle issues. If one brand or product is
dying out, the company has others to compete.

Concentrated Marketing

Some firmsespecially smaller ones with limited resourcesengage in concentrated

marketing. Concentrated marketing involves targeting a very select group of customers. Concentrated
marketing can be a risky strategy because companies really do have all their eggs in one basket. The
auto parts industry is an example. Traditionally, many North American auto parts makers have
supplied parts exclusively to auto manufacturers. But when General Motors, Ford, Chrysler, and other
auto companies experienced a slump in sales following the recession that began in 2008, the auto
parts makers found themselves in trouble. Many of them began trying to make and sell parts for wind
turbines, aerospace tools, solar panels, and construction equipment.

Targeting Global Markets

Firms that compete in the global marketplace can use any combination of the segmenting strategies or
none at all. A microcosm of the targeting strategies used in global markets is shown in Figure 5.9
Targeting Strategies Used in Global Markets. If youre a seller of a metal like iron ore, you might sell
the same product across the entire world via a metals broker. The broker would worry about
communicating with customers around the world and devising different marketing campaigns for each
of them.

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Targeting Strategies Used in Global Markets

Most companies, however, tailor their offerings to some extent to meet the needs of different buyers
around the world. For example, Mattel sells Barbie dolls all around the worldbut not the same Barbie.
Mattel has created thousands of different Barbie offerings designed to appeal to all kinds of people in
different countries.

Pizza Hut has franchises around the world, but its products, packaging, and advertising are tailored to
different markets. Squid is a popular topping in Asia. Companies tailor products not only for different
countries but also for different customers in different countries. For example, Procter & Gambles China
division now offers products designed for different local market segments in that country. P&G has an
advanced formulation of laundry detergent for the premium segment, a modified product for the
second (economy) segment, and a very basic, inexpensive product created for the third (rural)
segment.

Q. 5 Write short notes on the following: (20)

a) Product life cycle

When it comes to advertising a product, the advertising life cycle is made up of four primary stages.
These stages are the introduction, growth, maturity and decline stages. Each stage is associated with
how the product sells, but each stage has its own set of advertising guidelines businesses should abide
by so companies can plan to address the advertising challenges a product faces as it moves through
each stage of the product life cycle.
Determine the potential customers of the product. Before you can create an advertising plan or
campaign, you first have to know to whom you are advertising the product. Identify the potential
customer by describing their gender, their age, where they live, what their household income is and
how they benefit from using the product.
Stage of the product life cycle
Determine where your product is in the life cycle. Learn the traits of each stage of the product life cycle
so you can determine which stage of the cycle is where your product is. Determining the stage helps
guide you in what you need to focus on in your advertising efforts. If you are just introducing your
product, then advertising efforts generally focus on bringing awareness of the product to customers,
while products in the growth stage are performing advertising efforts that sets its product apart from
the competition. Products in the mature stage use advertising as reminders to buy the product by
offering coupons or special sales to existing customers. Companies with products in the decline stage
generally cut back spending on advertising.
Choose an advertising technique. Choose one form of advertising, based on where the product is in the
life cycle. For example, you may offer coupons to save money on the purchase of the product. Send
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the coupons using different mediums, such as email, in-store displays on the business website and
sending coupons in the mail.
Measure response results. Track the responses to the advertising campaign. For coupons, a
promotional code on the coupon helps to determine where the coupon came from. If orders are placed
by phone or online, promotional codes can also be used, or company representatives can ask where
the buyer heard of the product. if the advertisement is successful, then you can mimic the
advertisement in future efforts. If not, you can tweak the advertising effort to try to increase the
response rate.
Introduce a new advertisement. Companies often find that a combination of advertising efforts work to
promote the product. In addition to the original advertisement, add a new type of advertising to your
efforts, such as giving out free samples.
Repeat Steps 3 to 5. Continue to add and take away advertising efforts until you create a combination
of advertising techniques that seem to sell the product the best.

b) Pricing strategies

Starting a new business or launching a new product or service requires detailed thought and planning.
A critical piece of that planning is deciding how you should price your products and services. The
pricing strategy you choose dramatically impacts the profit margins of your business, and determines
the pace at which your business can grow. Several pricing strategies exist for products and services,
and choosing the best for your business depends greatly upon your overall long-term business
strategy.

Competition Based

Competition-based pricing strategies focus solely on what the competition is charging, and strive to
meet or beat those prices. Sometimes this strategy is referred to as a rock-bottom pricing strategy, or
a low price leader strategy. The goal is to best your biggest competitors based on pricing alone. As
Web Marketing Today exhibits, the competition-based pricing strategy is used by many large retailers
on the Internet. Because the same products are available from multiple sources, the consumer buying
decision is simply to select the retailer with the lowest price. This pricing strategy is a difficult one for
small businesses to maintain, because it provides very narrow profit margins that make it challenging
for the business to achieve enough momentum to grow.

Penetration Strategy

A penetration pricing strategy is used as a loyalty-building or market-entry tool. The penetration

pricing strategy offers a high-quality product at a much lower than expected price. This combination
helps the business enter a new market even when strong competitors exist, and it builds loyalty with
new customers from the beginning. The penetration strategy can dramatically increase the lifetime
value of customers, because they're "hooked" with the outstanding first product offering and--
assuming future products are just as high quality--they are more willing to buy additional products
from the company long into the future.

Loss Leader

Also known as a promotional pricing strategy, the goal of the loss leader pricing strategy is to get new
customers even if you do not make a profit from the initial sale. By taking a loss on the first sale,
businesses can offer related products or upsells at normal prices. Despite loosing profits on the
promotional product or loss leader, enough profits are normally made from the additional regular-
priced products and services to sustain the strategy for the long term. Grocery store sales utilize the
loss leader pricing strategy on a regular basis. They discount one or more items on their shelves to the
point of taking a loss of profit, with the intention of getting customers into their stores. Once there, the
customers are likely to buy more than just those products that are on sale.

High End

Premium pricing takes advantage of a segment of consumers who believe high quality comes at a
premium price. Instead of trying to have the lowest price amongst competitors, businesses who use

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the premium pricing strategy attempt to price their products and services at the highest in their
market. This strategy limits the customer base available to market products and services to, but also
provides much higher profit margins for each sale.

c) Distribution systems

Multichannel marketing is an efficient and productive system used by businesses to reach potential
customers. This marketing system uses different methods to promote and sell products. Specifically,
multichannel marketing uses research and analysis to reach specific target audiences. Additionally, this
system aims to use distribution methods to create a return on investment for the business in a shorter
period.

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An advantage of multichannel marketing systems is that they create reliable distribution channels that
concentrate on different demographic populations. The target audience is the marketing term used to
describe these demographic populations. Further, multichannel marketing systems contribute to the
rapid growth of revenue and branding. The plethora of new channels available to businesses, such as
the Internet, has drastically changed the infrastructure of multichannel marketing. For example, email,
text messages, e-commerce services and technology in general create new and innovative
multichannel opportunities for business.

Supply Chain Management

Supply chain management is an integral component of multichannel marketing. Supply chain

management includes market analysis, delivery, storage and the distribution of finished goods. This
system helps to manage areas of production, distribution operations and delivery of the product. An
organization should implement a reliable and consistent supply chain system according to the products
sold and various internal and external factors to ensure a strong, profitable and long relationship with
customers.

New Technology

New technology developments contribute to more efficient and productive multichannel marketing
methods used by businesses to reach customers. Systems such as a website and e-commerce services
allow customers to have easy access to products and services offered with a click of the mouse. Mass
emailing systems allow companies to reach millions of clients instantly. The use of cellphones and text
messaging has become a reliable method for reaching current and prospect clients. For example, a
business can send text messages to clients advertising a new product, upgrade or discount offer.

Competitive Market

Businesses increasingly turn to Web marketing services to promote products and services using
multichannel marketing systems. The pay-per-click system, banners, text ads and blogs create a more
competitive market where customers can compare similar products and services and view prices from
different vendors at the same time. However, this also presents drawbacks for businesses. For
example, server crashes, lack of inventory, cyber crimes and software updates can create problems
within the multichannel marketing system. Additionally, as these systems become more complex and
technology expands, multichannel marketing becomes more difficult to manage.

d) Promotion mix

The marketing mix comprises four main pieces that create the picture of a successful business. Price,
place, promotion and product, known as the "4 Ps," make the foundation of what your company is all
about. After all, selling the right product at the right price is how business gets done.

Product

The product, or service, that a consumer is purchasing goes beyond the obvious. To truly market the
product correctly, you need to consider what needs are being met by the consumer. If we are talking
about a beverage, is it simply to satisfy thirst? Or, is the consumer looking for a particular health

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benefit? There are many ways to look at the same product or service. Put yourself in the shoes of your
consumer to understand the best way to communicate the benefits of your product.

Promotion

Promotion has everything to do with telling your customer about your product. Do not confuse
promotion with marketing; promotion is just one part of the marketing equation. Promotion has many
facets to consider, such as the formats of the message: television, print or online. Of course, the
message you send to the consumer is important: beverages are enjoyed all over the country. A hot
beverage is an easier sell during the winter or in a cool climate. Selling a hot beverage in warm climate
brings a different challenge and a different kind of promotion.

Place

While place is a geographic designation, for the purposes of marketing, it also refers to how the
product or service, is brought to the consumer. Does your company deliver the product directly, or is it
on shelf in a store? If so, does it get to the store via your delivery crew or do you rely on a wholesaler?
The channels you use to get the product or service to the consumer add to or lessen the final cost.

Price

Pricing your product has a lot to do with how it will sell. Priced too high you risk your consumer not
seeing any value; priced too low, you risk the consumer losing confidence in your product; as being
cheap. Different strategies go into finding the right price for your product, beyond simply taking the
cost and adding a percentage for profit. If consumers value your product more than your competitors,
you can raise your price.

Benefit of Marketing Mix

Your business does not operate in a vacuum. It relies on the wants and needs of consumers.
Therefore, by taking into account the components of the marketing mix, you will know when and how
to promote your products and services. For instance, a cleaning company will want to promote its
service at a strong price point before major holidays when demand is higher. Similarly, when the
timing or place is different, the same cleaning business would can see an increase of business by
offering a low price incentive.

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