Instituto Superior de Contabilidade e Administrao do Porto

Licenciatura em Marketing

Sebenta 2010/2011
Ingls de Negcios I

Docente:

Mestre Carina Cerqueira

 Instituto Superior de Contabilidade e Administrao do Porto

Curso: Licenciatura em Marketing

Regime: Diurno

1 Ano; 1 semestre

Ano Lectivo: 2010 - 2011

Docente: Mestre Carina Cerqueira (Gabinete 333)

Programa da Unidade Curricular

1. Marketing: concept analysis

2. Marketing Mix: 4Ps or 7Ps
3. Marketing Plan: SWOT analysis; Product.
o Marcas. Segmentos de Mercado. Produtos e mercados. Place: Locais de distribuio e venda;
Price: Preos estratgias para a definio de preos. Relao preo/qualidade. Promotion:
Tcnicas promocionais. Estudos de casos.

Introduction to Business Studies

 1. MARKETING: CONCEPT ANALYSIS

MARKETING What is it?

Marketing is a broad term that includes many activities and requires many skills. Marketing is the process of
planning, pricing, promoting, selling, and distributing ideas, goods, or services to create exchanges that satisfy
customers. Note that marketing is a process. This means it is ongoing and it changes. As a marketer, you need to
keep up with trends and consumer attitudes. The products, ideas, or services you develop and the way you
price, promote, and distribute them should reflect these trends and attitudes. All functions of marketing
support this effort. Current marketing practices focus on customers and maintaining a close relationship with
them.

Ideas, Goods, and Services

Marketing promotes ideas, goods, and services. Politicians, for example, use marketing techniques to promote
their platform, or ideas. Goods are tangible items that have monetary value and satisfy your needs and wants
such as cars, toys, furniture, televisions, clothing, and candy. Intangible items that have monetary value and
satisfy your needs and wants are services. Intangible means you cannot physically touch them. In most cases,
services involve a task, such as cooking a hamburger or cutting hair. Banks, dry cleaners, amusement parks,
movie theaters, and accounting offices all provide economic services. Every time someone sells or buys
something, an exchange takes place in the marketplace.
The marketplace is the commercial environment where such trades happen. It is the world of shops, Internet
stores, financial institutions, catalogs, and much more.

Foundations of Marketing

The practice of marketing depends on four key areas of knowledge.

1. Business, management, entrepreneurship
Understanding the basics of business, management, and entrepreneurial concepts that affect business
decision making

2. Communication and interpersonal skills

Understanding concepts, strategies, and systems needed to interact effectively with others

3. Economics
Understanding the economic principles and concepts that are basic to marketing

4. Professional development
Understanding concepts and strategies needed for career exploration, development, and growth
Seven Functions of Marketing

The seven functions include distribution, financing, marketing information management, pricing,
product/service management, promotion, and selling. These functions define all the aspects that are part of the
practice of marketing.

Distribution

Distribution is the process of deciding how to get goods in customers hands. Physically moving and storing
goods is part of distribution planning. The main methods of transportation are by truck, rail, ship, or air. Some
large retail chains store products in central warehouses for later distribution. Distribution also involves the
systems that track products so that they can be located at any time.

Financing

Financing is getting the money that is necessary to pay for setting up and running a business. Business owners
often obtain bank loans to start a new business. Some also form corporations and may sell shares (or stock) of
the business. Financing also involves decisions such as whether to offer credit to customers. Most retailers offer
customers payment options such as MasterCard or Visa, while other stores offer their own credit services.

Marketing Information Management

Good business and marketing decisions rely on good information about customers, trends, and competing
products. Gathering this information, storing it, and analyzing it are all part of marketing information
management. Collecting information is done on a continual basis and through special marketing research
studies. This is what marketers do to find out about customers, their habits and attitudes, where they live, and
trends in the marketplace. Have you ever been asked to complete a questionnaire about the service at a
restaurant or other type of business? If so, you have participated in marketing research. Companies conduct
research so they can be successful at marketing and selling their products.

Pricing

Pricing decisions dictate how much to charge for goods and services in order to make a profit. Pricing decisions
are based on costs and on what competitors charge for the same product or service. To determine a price,
marketers must also determine how much customers are willing to pay.
Product/Service Management

Product/service management is obtaining, developing, maintaining, and improving a product or a product mix
in response to market opportunities. Marketing research guides product/service management toward what the
consumer needs and wants.

Promotion

Promotion is the effort to inform, persuade, or remind potential customers about a businesss products or
services. Television and radio commercials are forms of promotion. This type of promotion is called
advertising. Promotion is also used to improve a companys public image. A company can show that it is socially
responsible by recycling materials or cleaning up the environment. Promotion concepts and strategies are used
to achieve success in the marketplace.

Selling

Selling provides customers with the goods and services they want. This includes selling in the retail market to
you, the customer, and selling in the business-to-business market to wholesalers, retailers, or manufacturers.
Selling techniques and activities include determining client needs and wants and responding through planned,
personalized communication. The selling process influences purchasing decisions and enhances future
business opportunities.

The Marketing Concept

The marketing concept is the idea that a business should strive to satisfy customers needs and wants while
generating a profit for the firm. The focus is on the customer. For an organization to be successful, all seven
functions of marketing need to support this idea. The personnel responsible for those functions must
understand the marketing concept and reach for the same goal in order to send a consistent message to the
customer. The message is that the customer satisfaction is most important. Everyone in an organization needs
to recognize that repeat customers keep a company in business. For example, the switchboard operator in a
large corporation or the pizza delivery person must understand the marketing concept and be mindful of the
companys goals. Everyone in an organization is an extension of that firm and must provide the best possible
service to its customers. Businesses that stress the marketing concept with all employees are successful.

Customer Relationship Management (CRM)

In todays marketplace, customer relationship is most important. Customer Relationship Management (CRM) is
an aspect of marketing that combines customer information (through database and computer technology) with
customer service and marketing communications. Marketers who specialize in CRM try to create more
meaningful one-on-one communications with the customer by applying customer data (demographic, industry,
buying history, etc.) to every communication.

READING SKILLS

Where Has All The Good Marketing Gone?

What You Can Learn From Top Marketers

By Michael Fleischner

I dont know about you, but I feel like there is a scarcity of good marketing today. What do I mean good
marketing? You know the kind of marketing that sticks with you and drives you to take action. The only
marketing that has really moved me in the last couple of years has been from Apple. How do I know? I own 3
iPods.

You might be thinking to yourself that its more the product that drives behavior than the marketing, and when
it comes to the iPod I dont necessarily disagree. However, I would argue that in some ways, the marketing has
to be even better than it does with your run of the mill product.

Apple has maintained a certain level of success with their marketing and now that marketing must not only tie
together with previous marketing campaigns, but convince current customers that their current products are
no longer sufficient.

It appears that this is done, not through sleight of hand, but by showing you what you cant do with your
current device. By illustrating this in a manner that is contradictory to your current satisfaction, it does make
you feel like your iPod which was fine until a moment ago has suddenly become inadequate. To me, thats
really good marketing.

So what can be learned from the tens of millions that Apple spends on advertising every year? I think the
answer to that question is to work in lock step with your product development team to showcase developments
and tap the emotions of those using your products. When I use my iTouch, I feel empowered, cool, and
complete. I wouldnt have reached that conclusion without the help of marketing to get me there.

The lesson that Ive learned is that marketing, if done correctly, helps us to define how we feel about a product.
Once you have prospects and customers attaching emotions to your products, you develop loyal customers. The
next time that youre thinking about a marketing campaign, consider how you want your customers to feel
about your product.

Manage the entire purchase decision process in order to consistently manage the experience to reinforce or
produce these desired feelings. Once youve been able to do that successfully, your creative, marketing
messages and promotions should be relatively easy to produce. Now thats what I call good marketing.
EXERCISES

Exercise 1 - Marketing Definitions:

Fill each gap in the sentences below with the correct word from the box.

customers developing distribute needs place price Producing

product product profit promote service time want

Marketing is concerned with getting the right (1) ___________________ to the right (2) ___________________ at the right
(3) _____________________________.

Marketing is about meeting consumer (4) ____________________________ at a (5) _____________________________________.

Marketing makes it easier for (6) _________________________ to do business with you.

Marketing aims to find out what people (7) ____________________________________; then (8) _______________________________

and (9) ________________________ a (10) _________________________ or (11) ____________________________________ that will

satisfy those wants; and then determining the best way to (12) ___________________________________________ (13)
___________________________________ and (14) __________________________ the product or service.

Exercise 2 - Use the following words to complete the text below.

Product Goods Research Plan Demand Mix

Customers Quality Marketing Services Distribution

Marketers and all levels of management realise the vital importance of (1) _______________________. This has
become the watchword of good business. (2) _________________________ and experience has shown that (3)
_______________ will pay more for (4) ________________________ and (5) _____________________________ of high quality, and
also that they expect every aspect of the (6) ____________________________, including (7) ________________________________,
to meet the highest standards. The job of marketers is to design a (8) _________________________ (9)
____________________ with a (10) _____________________________ of all the necessary components to satisfy consumer
(11) ___________________________.

Exercise 3. - Fill in the missing words in the table.

Verb Agent General Noun

(1) Market Marketer
(2) Distribute
(3) Competition
(4) Advertising
 Advertisement
(5) Supplier
(6) Sponsor
(7) Consume
(8) Produce
(9) Analyst
(10) Researcher
(11) Import

Exercise 4. - Complete the sentences below with words from the world table.

A. Marketers m_______________________ p__________________________ to customers.

B. Advertisers a_____________________ to c_____________________________.
C. Market analysts a _________________________ the performance of s_____________________________ and the
behaviour of c______________________.
D. The opposite of export is ______________________________.
E. The opposite of demand is ____________________________.
F. C___________________________ is good for consumers.
G. S___________________________ is a form of a ____________________.

Exercise 5. - For each definition choose the correct word or phrase.

A. Providing money to cultural or sporting activities in exchange for advertising rights.

B. A business which specializes in giving advice and support to companies about marketing and markets.
C. An economy which allows open and reasonably free exchange between private companies.
D. A market in which there are too many suppliers producing similar products.
E. A market in which there are few suppliers producing goods that a lot of people want to buy.
F. A company which sells more of a particular type of product than its competitors.
G. A person who uses their specialist knowledge of a specific market to try to explain what has happened
and predict what will happen.
H. A specific promotional activity over a limited period of time.
I. The activity of moving goods from the producer to the consumer.
J. The activity of selling goods to other countries.
K. The proportion of the total market which one company controls.
L. What a company or organization says it intends to do for its customers/clients and the community.

1. (a) promotion (b) grant aid (c) sponsorship

2. (a) marketing consultancy (b)counselling service (c) company analysts
3. (a) command economy (b) conservative economy (c) free market economy
4. (a) saturated market (b) buyers market (c) heavy market
5. (a) weak market (b) sellers market (c) light market
6. (a) trend setter (b) multinational (c) market leader
7. (a) market analyst (b) forecaster (c) market broker
8. (a) campaign (b) season (c) trend
9. (a) selling (b) distribution (c) orientation
10. (a) multinational (b) exporting (c) exchange distribution
11. (a) dominion (b) market place (c) market share
12. (a) corporate mission (b) strategic plan (c) corporate image

READING SKILLS

The Top 10 Marketing Tips of All Time

With more than a decade of experience in marketing, ranking from pay-per-click to direct mail, Ive seen a lot of
failures and far more successes when it comes to marketing.

Today, the art of marketing is far more complex than it once was. However, many of the same basic principles
still apply. Too often, professional marketers and small business owners overlook the basic techniques that
have separated successful campaigns from those that never turn a profit. Here is my all time list of effective
marketing tips.

Know your audience. Successful campaigns get that way because marketers know their audience. They fully
understand their needs, how to help meet those needs and how to create demand. Knowing and understanding
your audience through proper market segmentation means a well targeted campaign that generates a
profitable return.

Focus on the offer. A marketing offer is the driving force of marketing promotions that drive results. In fact,
market testing has proven that the offer is the most significant criterion for conversion. Focus on your offer if
you want to be successful.

Split test. Never ever run a campaign without testing something. One of the most common is a split test which
allows you to simultaneously test two versions of something. It can be a web page, post card, or email. Split
testing is essential for improving performance.

Never work alone. The most creative ideas come from working with other creative people. Dont feel like you
need to have all the answers or great ideas. You may start with an idea, but an open dialog with creative
individuals will make it better.

Dont sell on price. Ive seen so many marketers fail because they sell on price alone. This leads to a discounting
war, lower profitability, and often bankruptcy. Rather, focus on creating so much value that the perception of
price becomes insignificant.
Consistent messaging. Consider the entire user experience before you launch a campaign. From email to
website to offer, is the prospect having a consistent user experience? If they are, your campaigns stand above
98% of others.

Create value after the sale. As marketers, its our job to understand our market segment and build relationships,
not dump people off at the front door of our store and walk away. Focus as much of your energy on building
relationships with customers as you do prospects.

Test. Test. Test. In addition to split testing, you should consider multiple forms of testing in each marketing
discipline. For direct mail, test headlines, offers, copy, time of direct mail drop, etc. Consider testing a life long
mission.

Integrated Marketing Works Best. You cant rely on one form of marketing to carry you to success. Its okay to
generate most of your leads or sales through PPC marketing if you will but what happens when that dries out?
Use multiple media sources to meet your goals.

Nothing can replace experience. You can run out and hire all of the best consultants in the world, but you still
have to do the work. Nothing can replace actual experience. It will make you a stronger marketer and more
successful in the long term.

Apply these helpful marketing tips if you want to be truly successful. These techniques and tips are applied by
successful marketers on a daily basis. The result is an ever growing success rate of marketing success.

2. Marketing Mix: 4Ps or 7Ps

The four Ps and three more Ps

The traditional marketing mix was described in terms of four Ps:

o PRODUCT the goods or services
o PRICE the cost of the product
o PLACE often called distribution
o PROMOTION - this aims to make people aware of the product.
In recent years other considerations have been added, giving a mix of normally seven Ps. The additional
three, sometimes referred to as service Ps are:
o PACKAGING or everyone involved from producer to consumer
o PHYSICAL EVIDENCE or anything that shows the existence of the company, e-g- its buildings,
vehicles, website, stationery, staff uniforms, badges.
o PROCESS this is the interaction between everyone involved.
 Market and Market Identification

Marketers know that their product or service cannot appeal to everyone. To do their job, they look for people
who might have an interest in or a need for their product. They also look at people who have the ability to pay
for their product. These people often share other similar needs and wants. All people who share similar needs
and wants and who have the ability to purchase a given product are called a market.
You could be part of the market for video games, but not be part of the market for an expensive car. Even
though you may want an expensive car, you may not have the means to buy one. If you liked video games and
had the resources to buy or rent them, you would be part of the video game market.

Consumer versus Industrial Markets

There are different types of markets. A market can be described as a consumer market or an industrial market.
The consumer market consists of consumers who purchase goods and services for personal use. Consumers
needs and wants generally fall into a few categories that address their lifestyles. For the most part, consumers
are interested in products that will save them money, make their life easier, improve their appearance, create
status in the community, or provide satisfaction related to some other personal motivation.
The industrial market or business-to- business (B-to-B) market includes all businesses that buy products for
use in their operations. The goals and objectives of business firms are somewhat different from those in the
consumer market. Most relate to improving profits. Companies want to improve productivity, increase sales,
decrease expenses, or in some other way make their work more efficient. Companies that produce products for
sale in the consumer market consider the reseller of their products to be part of the industrial market.
Therefore, they require two distinct marketing plans to reach each market.
Market Share

A market is further described by the total sales in a product category. Examples of categories are video games,
fax machines, cameras, ice cream, or soft drinks. A companys market share is its percentage of the total sales
volume generated by all companies that compete in a given market. Knowing ones market share helps
marketers analyze their competition and their status in a given market. Market shares change all the time as
new competitors enter the market and as the size of the market increases or decreases in volume.

Target Market and Market Segmentation

Businesses know they cannot convince everybody to buy their product or service.
They look for ways to offer their product or service to the people who are most likely to be interested. This
involves segmenting, or breaking down the market into smaller groups that have similar needs. Market
segmentation is the process of classifying customers by needs and wants.
You already know that a market can be segmented into a consumer and an industrial market. Within those
markets, further segmentation is possible. The goal of market segmentation is to identify the group of people
most likely to become customers.
The group that is identified for a specific marketing program is the target market. Target markets are very
important because all marketing strategies are directed to them. When a business does not identify a target
market, its marketing plan has no focus. Identifying the target market correctly is a key to success.

Consumers versus Customers

A product may have more than one target market. For example, manufacturers of childrens cereal know that
they need to target children and parents differently. They have two target markets: one is the children
(consumers) who will be asking for the cereal and eating it. The other is the parents (customers) who need to
approve of it and will be buying it. To reach the children, marketers might advertise on Saturday morning
television programs specifically designed for children. The advertising message might be how much fun it is to
eat this cereal. To reach parents, print advertising in magazines such as Family Circle or Parenting might be
used, and the ad message might stress health benefits.
To develop a clear picture of their target market, businesses create a customer profile. A customer profile lists
information about the target market, such as age, income level, ethnic background, occupation, attitudes,
lifestyle, and geographic residence. Marketers spend a lot of money and time on research to collect data so that
they understand the characteristics of their target markets customer profile.
This information helps them make intelligent marketing decisions. An easy and fun way to understand
customer profiles is to look at magazines. If you thumb through a magazines articles and advertisements, you
will know who reads the publication.
 READING SKILLS

Media Advertising
Learn the basics of multiple types of ads - print, television, radio, and more.

The media is a powerful thing -- the average person spends an enormous amount of their life consuming it in
one form or another, and will spend a significant percentage of that time looking at, listening to or watching
advertisements. If you want to use the power of the media, though, you need to know what you're doing
otherwise your investment will be a financial disaster. Listed below are the most common forms of media
advertising. No doubt you can think of others as well.

Advertising in Newspapers and Magazines

There are two kinds of advertising you can get in newspapers and magazines: classified and display. Classifieds
are the small ads towards the back of the publication, while display ads can be almost any size, from a small
corner of a page to a massive double-page spread.

If there's a publication you're interested in advertising in, either go to its website (the rate card section) or call
its advertising department to find out the rates it charges. Now pick your jaw up off the floor. Yes, advertising in
the print media really is that expensive, and for most home businesses it probably just won't be that
economical.

There is, however, an exception: niche and trade magazines. If you've ever looked around in a newsagent, you
will have seen just how many magazines there are out there, filling every conceivable gap in the market. You
need to find the magazine that people who are interested in your services might read. For example, if you're a
wedding photographer, look for a magazine called 'Your Wedding', 'Bride', or something similar. Advertising in
these magazines will be far cheaper than placing an ad in a general-audience publication, and far more likely to
actually get some responses.

Advertising on the Radio

Wherever you are, the chances are that there's a local radio station. Once your home business grows to a decent
size, you might consider buying some time on it.

Really, though, the only kind of home business that can benefit enough from radio ads to justify the cost is one
that does anything to do with cars. Since radio is almost entirely limited to use as in-car entertainment now,
you know that almost everyone your ad reaches will be a car-owner, and so might be interested in what you're
offering. If you offer something that people need cheaply or even for free, you can get a big response.

Unfortunately, that response could be a little too big -- thanks to the time-sensitivity of radio, you'll get mobbed
the next day, and then everyone will forget you again. Radio advertising offers the listener no opportunity to
keep your ad and refer to it later, or to find it again in the future. You will find that any ads involving a phone
number are spectacularly useless.
Advertising on the Television

Unless your business is getting pretty big, this would be quite a bad idea. You'd have trouble producing and
airing an ad even on local cable channels for less than $10,000. Of course, if there's a market for your product
and you've got the budget for this, you could take a gamble and make a mint. The home businesses that tend to
do best out of TV ads are ones that have a 'unique and useful invention' product with easy-to-demonstrate
benefits -- think infomercial. Research shows that you can sell almost anything given a 60-second ad, a free
phone number and a price point of $19.95.

Advertising on Billboards

Here's one that gets overlooked pretty often, but can be very effective if you do it right. Billboard ads are
relatively expensive, but they do generally stay up for a long time, and they can be very specifically targeted to
an area -- the one where they're physically located. You'll have the best results with this if you can put one near
enough to your business that it could say 'turn left at the next junction', or something like that. Phone numbers
are, again, pretty useless, although you could have some luck putting a website address up there.

Advertising at the Movies

Finally, here's one that often gets overlooked. If you turn up to the cinema early, you might have seen that
before the big-budget ads, ads for local businesses are run. This can be a great place to advertise relatively
inexpensively in quite a high-profile way, and it works especially well for takeaway food businesses.

Market Research

Secondary Research

Internal Sources External Sources

Company Accounts Government Statistics (ONS)
Internal Reports and Analysis EU - Euro Stat
Stock Analysis Trade publications
Retail data - loyalty cards, till data, etc. Commercial Data - Gallup, Mintel, etc.
Household Expenditure Survey
 Magazine surveys
Other firms research
Research documents publications, journals, etc.

Primary Research

First hand information

Expensive to collect, analyse and evaluate

Can be highly focussed and relevant

Care needs to be taken with the approach and methodology to ensure accuracy

Types of question closed limited information gained; open useful information but difficult
to analyse

Quantitative and Qualitative Information:

Quantitative based on numbers 56% of 18 year olds drink alcohol at least four times a week
- doesnt tell you why, when, how

Qualitative more detail tells you why, when and how!

Market Research
o Sampling Methods:
Random Samples equal chance of anyone being picked
May select those not in the target group indiscriminate
Sample sizes may need to be large to be representative
Can be very expensive
Stratified or Segment Random Sampling
Samples on the basis of a representative strata or segment
Still random but more focussed
May give more relevant information
May be more cost effective
Quota Sampling
Again by segment
Not randomly selected
Specific number on each segment is interviewed, etc.
May not be fully representative
Cheaper method
 Cluster Sampling
Primarily based on geographical areas or clusters that can be seen as being
representative of the whole population
Multi-Stage Sampling
Sample selected from multi-stage sub-groups
Snowball Sampling
Samples developed from contacts of existing customers word of mouth type
approach!

Purpose

Advantages of Market Research Disadvantages of Market Research

Helps focus attention on objective
Aids forecasting, planning and strategic development
May help to reduce risk of new product development
Communicates image, vision, etc.
Globalisation makes market information valuable
(HSBC adverts!!)
Information only as good as the methodology used
Can be inaccurate or unreliable
Results may not be what the business wants to hear!
May stifle initiative and gut feelingAlways a problem
that we may never know enough to be sure!

Marketing Mix

The marketing mix includes four basic marketing strategies called the four Ps: product, place, price, and
promotion. These are tools marketing professionals or businesses use and control in order to influence
potential customers. Marketers control decisions about each of the four Ps and base their decisions on the
people they want to win over and make into customers. Because of the importance of customers, some would
add a fifth P to the list: people. Marketers must first clearly define each target market before they can develop
marketing strategies.
The four elements of the marketing mix are interconnected. Actions in one area affect decisions in another.
Each strategy involves making decisions about the best way to reach, satisfy, and keep customers and the best
way to achieve the companys goals. Lets look at what each marketing mix component involves.

Product

Product decisions begin with choosing what products to make and sell. Much research goes into product
design. A products features, brand name, packaging, service, and warranty are all part of the development.
Companies also need to decide what to do with products they currently sell. In some cases, those products
require updating or improvements to be competitive. By developing new uses and identifying new target
markets, a company can extend the life of a product.

Place

The means of getting the product into the consumers hands is the place factor of the marketing mix. Knowing
where ones customers shop helps marketers make the place decision. Place strategies determine how and
where a product will be distributed. For global companies, it may mean making decisions about which products
will be sold in which countries and which retail outlets or other means of selling the product will best reach the
customer. Can the product be sold directly to the consumer, or are intermediaries necessary? Other place
decisions include deciding which transportation methods and what stock levels are most effective.

Price

Price is what is exchanged for the product. Price strategies should reflect what customers are willing and able
to pay. To that end, marketers must consider the price they will charge their industrial customers, including
resellers. Pricing decisions also take into account prices the competition charges for comparable products.

Pricing Strategies

Price strategies therefore include arriving at the list price or manufacturers suggested retail price, as well as
discounts, allowances, credit terms, and payment period for industrial customers. On occasion, a company may
use special promotional pricing that would adjust the suggested retail price. A manufacturer may decide to use
a promotional price for a fixed period of time, for example. This technique is frequently used to launch new
products.

Promotion

Promotion refers to decisions about advertising, personal selling, sales promotion, and publicity.
Promotional Strategies

Promotional strategies deal with how potential customers will be told about a companys products, including
the message, the media selected, special offers, and the timing of the promotional campaigns.

Define each of the following terms in writing.

1. Marketing
2. Goods and services
3. Marketing concept
4. Utility
5. Market
6. Consumer and industrial markets
7. Market share
8. Target market
9. Customer profile
10. Marketing mix

11. Define marketing.

12. Identify and explain the four foundations of marketing.
13. List the seven functions of marketing.
14. Explain the marketing concept.
15. What is meant by utility and what are the five economic utilities?
16. What is a market and in what ways can a market be identified?
17. What is market share?
18. Define a target market.
19. What are the four components of the marketing mix?
Exercises

Exercise 6 - The Marketing Mix

Peter Bowen of Citimetal Inc. is talking to Anna James, a marketing consultant. Complete Annas part of the
conversation. Choose from the following:

a. And then the fourth area is physical evidence.

b. It covers both goods and services offered by the company.
c. Exactly and the desire to buy the product. And, finally, people, which means colleagues,
employees, agents and customers. The idea is to keep everyone happy, make personal contact.
d. Yes. This means any visual presence or signs suggesting the company.
e. The second area is place also called distribution meaning the movement of goods from the
producer to the consumer.
f. Well, we identified six areas where improvement is necessary.
g. After place, process. Process is the interaction between people and systems at all stages, from
market research, design, production, delivery and after-sales.
h. The first is product.
i. Promotion.

Peter: So, what have you got to report?

Anna:_________________________________________________________________________________________________________________________
_____________________________________________________________________________________________________________________________

Peter: Really? What are they?

Anna:_________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________

Peter: And what exactly does that term cover?

Anna:_________________________________________________________________________________________________________________________
_____________________________________________________________________________________________________________________________

Peter: I see. What else?

Anna:_________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________________

Peter: And after place, whats next?

Anna:_________________________________________________________________________________________________________________________
_____________________________________________________________________________________________________________________________
Peter: Yes, I understand co-ordination of systems.

Anna:_________________________________________________________________________________________________________________________
_____________________________________________________________________________________________________________________________

Peter: Physical evidence?

Anna:_________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________

Peter: Everything visual. Right, I follow you. And whats the next area?

Anna:_________________________________________________________________________________________________________________________
_____________________________________________________________________________________________________________________________

Peter: So, thats creating consumer awareness and establishing the brand identity?

Anna:_________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________________

Exercise 7. Product Marketing

Choose the best definition for each of the words or phrases:

1. Augmented product
a. a product now selling at a higher price
b. a product that is no longer made
c. a core product plus additional benefits such as brand name, quality styling and design features,
extended warranty, after-sales service, etc.
2. generic
a. not know by a special brand name
b. for general use
c. popular with all types of consumers
3. cannibalism
a. when a product eats into the competitors market share
b. when a product reduces sales of the other product made by the same manufacturer
c. when an employee leaves his/her company to join a competitor
4. sell-by date
a. the limit placed on sales representatives to meet targets
b. The date by which a food or drug must be sold
c. The date on which a product is sold
5. Launch
a. When a product is taken off the marker
 b. When a product is tested before being sold
c. When a product is first released onto the market
6. Product life cycle
a. The normal pattern of sales for a product
b. The process of development of a new product
c. The different stages of improvement in an old product
7. Part
a. A product
b. A component
c. A phase in the development of a product

Exercise 8. Branding

Complete each sentence with the correct word or phrase from the box.

Brand identity Own-brand Brand image

Brand valuation Brand name Premium brand
Brand loyalty unbranded Intangible assets

1. Coca cola, Sony, and Mercedes Benz: each of these is a famous ____________________________________________.
2. Deciding a financial value for a brand name is called ______________________________________________________.
3. Consumers usually expect to pay less for products that ate _______________________________________________.
4. Products like Channel or Christian Dior have a ______________________________ which are more glamorous
than that of many less well-known competitors.
5. In the 1990s most supermarkets began to sell ____________________________________ products.
6. A brand name is valuable not only for the main products that are represented by the name, but also for
the range of _______________________________ that accompany that name.
7. A key concern for marketers is to establish ____________________________________ among their customers so
that they do not buy similar products made by other companies.
8. Consumers are often prepared to pay a high price for a _________________________________ which they believe
represents high quality.
9. A new product must create a _________________________________ so that it is easily recognized and associated
with specific qualities.

Exercise 9. Product Management

Complete the sentences with terms from the box.

Appeal Consumers Decision-Making Development Extend Markets Penetration

Portfolio Positioning Potential Quality Research Return
 1. Managers have to understand the __________________________ of their products.
2. Most companies produce many different products and services. Together this is called the product
____________________________.
3. Companies market products at particular groups of consumers, so the product is matched to the
consumer. This is called product ___________________________________.
4. Product management is about getting the maximum _______________________________ from each product.
5. A key objective is to get the maximum market ______________________________________, which means reaching
the most _______________________________________.
6. Another important objective is to __________________________________ the life os the product. The typical life
cycle diagram then shows a wave effect.
7. This is possible if the product ___________________________________ is good. This means changing or improving
the product, to add to its __________________________________ and _________________________________.
8. Managers also try to find new ____________________________________ for their products.
9. In all cases, product management needs good ____________________________ to help __________________________.

Exercise 10. After-Sales Assistance

The following text came with the user manual for a new telephone. Fill each gap with the correct word or
phrase from the box.

After-sales Customer Helpline Labour Launched Network

On-site Parts Premium State-the-art Support Warranty

Since the TeleTalk was (1) _______________________________________________, it has been an outstanding success. Well
known for reliability, it does, however, come with a full two-year (2) __________________________________________ and
(3) ___________________________________ (4) __________________________________.

Utilizing the very latest technology, this (5) _______________________________ product is supported by our extensive
(6) ___________________________________ (7) __________________________________. Call our (8) _________________________________
(9) ____________________________________ for free advice on how to solve any problems you may have. For a small (10)
________________________________________we can also offer a full (11) ______________________________________________
technical (12) ____________________________ service for all your communications equipment.

Exercise 11. Products, Services and Service

Change each word in bold type to a related word which fills the gap in the sentence correctly.

1. We sell a very large range of goods, including fast moving _________________________________ goods such as
canned foods, cleaning materials and cassettes.

CONSUME
2. Of course, we also sell ___________________________________ goods like milk, cheese and meat, which need to
be sold within a short time.

PERISH

3. It is not only food ____________________________________ which have a very short shelf life. Fashion items
quickly become out of date.

PRODUCE

4. For larger consumer __________________________________, like music systems and TVs, we provide an after-
sale service.

DURATION

5. An important aspect of marketing goods like computers is possible ____________________________ value, such
as free software, internet access and technical support.

ADD

6. The business of a ________________________________________ is to sell products.

RETAIL

7. A ________________________________________ industry is one that offers specialist expertise or advice. Lawyers,

marketers, translators and financial consultants all do this.

SERVE

8. If you are not completely satisfied with any product _________________________________ in this store, you may
return it and receive a complete refund or exchange it for a different item.

PURCHASER

9. A ______________________________________ gives one person or company the right to make a particular product
for a period of time. The inventor may sell or lease it to a manufacturer.

PATENTED

10. A product which was expensive to develop, manufacture and launch, and which does not have the sales
that the manufacturer expected can be described as a __________________________________________.
 FLOPPED

Exercise 12. Success and Failure

Fill each gap in the sentences with the correct word from the box.

AWAY BACK BY INTO OFF ON ON TO

1. Perishable goods go ___________________________________ in a short time.

2. If dairy products are not sold __________________________________ the sell-by date, they cannot be offered for
sale.
3. Unsold perishable goods usually have to be thrown ________________________________.
4. If a safety fault is discovered in a product, the manufacturer may ask customers to bring
______________________ all examples of the product.
5. Thousand of new products are put _____________________________________ the market every day, but only a
few are successful.
6. Success or failure depends _______________________________ many factors, but the most important is the
quality of the marketing.
7. Customers with a strong sense of brand loyalty are rarely prepared to switch
________________________________ a competitor.
8. Powerful advertising may help a new product to eat ____________________ the market share of rival brands.

Exercise 13. Pricing Strategy

Fill each gap in the sentences below with a phrase from the box.

Budget-priced Demand curve Going rate Price war

Retail margin Selling costs Unit costs

1. The amount of money necessary to produce one individual example of a product is the
______________________________.
2. The difference in price between what retailers pay for a product and what they sell the product at is
called the ____________________________.
3. The total amount of money spent on all aspects of selling, including advertising, commissions and
promotion, is known as the ___________________________________.
4. A period during which several competitors aggressively lower their prices in an effort to build up
market share is called a __________________________________.
5. Products at the lowest end of the price scale are sometimes referred to as ________________________ goods.
6. The price which the market will accept for a product or for services is the ________________________.
 7. The line on a graph which shows the relationship between prices and consumer demand is called the
_____________________________________.

Exercise 14. Pricing Strategy Explaining vocabulary

Match the words (1-9) with the definitions (a-i)

1. Break-even point a. The price wholesalers and distributors pay to the producer for goods.
2. Discounting b. A pricing strategy based on low pricing and low unit profits.
3. Factory gate price c. An illegal and secret agreement between competitors to fix higher
prices to boost their profits.
4. Inelastic demand d. The day-to-day costs of running a business.
5. Overheads e. Sales of a product do not change much with variations in price.
6. Penetration strategy f. Reducing the price of goods in return for bulk sales or to a favoured
customer.
7. Price sensitive buyers g. A product sold at an especially low price, perhaps at a loss, in the
expectation that customers will spend money on other goods where
margins are high.
8. Loss leader h. The point in the development of a product when sales begin to
exceed the investment.
9. cartel g. Consumers who are very attentive to price changes and look for
lower-priced items.

Exercise 15. Costs

Choose the best definitions for each of the words or phrases.

1. Cost of labour
a. Cost of all work involved in making a product or service ready for sale
b. Cost of manual workers employed buy a company
c. Cost of industrial action by employees
2. Cost of production
a. Selling price for a finished product
b. All expenses for raw materials, heating, lighting, electricity, etc.
c. All costs involved in making a product ready for distribution and sale.
3. Cost of sales
a. Total cost involved in making a product or service, distributing it and selling it
b. Cost of selling a product in salaries, commissions, etc
c. The price of a product when it is sold
4. Commission
 a. A royalty paid to an inventor of a product
b. A percentage of the selling price which is paid to the seller, usually an agent or distributor
c. Instructions given to a sales representative or to the shop which is asked to sell a product
5. Selling costs
a. The total money raised selling a product or service
b. The costs involved in distributing, promoting and selling a product
c. The salaries and other expenses paid to the sales representatives
6. Direct costs
a. All costs relating to production of a product, including development costs and raw materials,
electricity and labour
b. All taxes paid to the government
c. The cost of labour involved in making a product
7. Direct labour costs
a. All costs relating to production of a product, including development costs and raw materials,
electricity and labour
b. All labour costs involved in actual production of a product
c. All labour costs involved in producing a product and, in addition, all support labour costs, such
as secretarial and administrative work
8. Fixed costs
a. Prices established by the government
b. Costs which are decided by the management of a manufacturing company, not by suppliers or
retailers
c. Costs which do not depend on quantity of production, e.g. heating, lighting, rent.
9. Variable costs
a. Costs which change according to the quantity of production, such as raw materials, components,
overtime pay, etc.
b. Costs which are difficult to estimate as they many suddenly change because of changes in the
market, such as competitors pricing
c. Costs which change according to the time of the year, e.g. warm clothes for winter, or summer
fashions.
10. Overheads
a. Regular costs associated with the day-to-day running of a company
b. Additional expenses because of a higher than expected demand for products
c. Extra costs above what was planned in the costs budget
11. Unit costs
a. The costs associated with all production of all products
b. The costs involved in making one single example of a product
c. The total costs for any one part of a factory producing one type of product
12. Labour input
a. The cost of labour in producing products for distribution and sale
 b. Additional payments to workers during periods of high demand
c. The costs of all non-managerial wages and salaries

3. MARKETING PLAN: SWOT ANALYSIS; PRODUCT.

Good marketing relies on good plans. A companys planning efforts begin with a critical look at itself and its

business environment, or the market in which it operates. This assessment lists and analyzes the companys

strengths and its weaknesses. It also includes the opportunities and the threats that surround it. In other

words, this analysis lists everything that can foster the businesss success and what could make it fail. The

acronym for strengths, weaknesses, opportunities, threats is also the name of this process: SWOT analysis.

This internal and external awareness will help a business deal with weaknesses and prepare it to handle

threats such as competition or a changing marketplace. An accurate analysis also will help a company be more

competitive because it provides guidance and direction. The company will develop strategies around the SWOT

analysis.

Internal Strengths and Weaknesses

Strengths and weaknesses are internal factors that affect a business operation. The internal analysis centers
around three Cs: company, customers, and competition. It is important to review these factors objectively and
fairly. For this reason, some firms bring in outside consultants to conduct this phase of the analysis.

Company Analysis

Questions that are part of a companys internal analysis are about what a company does well and what areas
are weak. This includes a review of the staff (both management and other personnel), the companys financial
situation, its production capabilities, and each aspect of the marketing mix (product, promotion, place, and
pricing). Here are a few sample questions that could be used as part of a company analysis:

Staff-Related Questions

What is the companys mission statement? Does everyone know it? Is everyone on staff following it?
How experienced are the company executives? What have they accomplished?
Does the company have too much or not enough staff in each area to provide the quality of service it should?
Should staff be re-assigned?
What is the quality of the staff? Are there formal training and assessment programs?
 How effective is its sales force?

Financial Questions

Has the company been profitable? In which areas? And why?

Are there enough financial resources to achieve the companys goals?

What is the companys sales history? Are sales increasing or decreasing?

Production Capability Questions

How are adjustments made in production due to an increase or decrease in sales orders?

Has the research and development (R & D) department created successful new products?

What percentage of sales come from products that are five years or older?

What changes in technology are required to remain competitive?

Marketing Mix (Four Ps) Questions

Product

What new products have been successful and why?

Does the company own a patent on any of those products?

Are any patents expiring in the future?

Price

What are the present pricing strategies?

Are the pricing strategies working?

Promotion

How is the company positioned in the marketplace?

What are the promotional strategies and have they been successful?

What is the companys reputation and image among consumers?

Place

Do products easily reach customers?

Who helps the company with distribution?

The answers to these questions might reveal such strengths (or core competencies) as talented and well-

trained employees, quality workmanship, and an excellent service record.

Customer Analysis
Customers are a great source of information. Studying their buying habits may reveal patterns that offer
insights into product offerings and pricing strategies. Here are a few questions that help in the analysis of
customers.

Who are the customers?

How do groups of customers differ from one another?
What, when, where, and how much do they buy?
How do customers rate the company on quality, service, and value?
How satisfied is each customer segment?
What customer segments are not having their needs met?
Is your customer base increasing or decreasing? Why?

Catalog companies use database technology to see buying patterns, which allow them to produce interest-
specific catalogs. Companies with this technology and know-how have a major advantage over their
competitors because they can structure their product selection, pricing, and promotional messages to very
specific targeted audiences.
To monitor customer satisfaction, many firms ask customers to complete a questionnaire or some form of
survey after making a purchase. Data from this research helps companies pinpoint areas that need
improvement.
Monitoring customer satisfaction reveals both strengths and weaknesses. Take, for example, the case of an eye
doctor. Suppose that strength is the amount of personal attention the doctor gives each patient. Patients report
that the doctor spends a lot of time answering their questions. This strength also creates a weakness:
complaints about the time patients spend in the eye doctors waiting room. The solution seems simple:
schedule fewer patients in a given time period so there is less overlap. This poses another problem that may
generate complaints from patients wishing to make appointments. Under that new policy, patients might have
to wait two weeks or more before they can get an appointment. So, what appeared to be a quick and easy
solution is not so simple.

Competitive Position

A company may find that it has certain strengths and weaknesses when compared to its competitors. A
companys market share may be greater than its competitors, which would be a major strength. If a company
loses market share to its competitors, it would be a weakness. Questions that help a company analyze its
internal competitive position are:
 What market share does the company have?
What advantages does the company have over its competitors?
What core competencies does the company possess? Does it have a better reputation, own a patent, have
special resources, or better distribution capabilities?
Are competitors taking business away from the company? How? New products? Better promotion?

External Opportunities and Threats

Companies must always look for opportunities to create competitive advantage due to external factors.

Competition

To stay competitive, companies need to know what their competitors are doing at all times. Changes in a
competitors financial situation and problems in the marketplace can provide opportunities. For example,
Smart & Final, a discount supermarket chain based in the western United States, enjoyed increased customer
traffic and increased sales when a labor strike crippled three competitors (Vons, Ralphs, and Albertsons) in
2004. The obvious weakness of Vons, Ralphs, and Albertsons (their inability to end the strike quickly) opened
the door for competitors to take business away from them. Companies that conduct a SWOT analysis on an
ongoing basis are in a better position to react and make adjustments to their marketing mix. To assist in this
process, companies must continually scan the external environment.

Environmental Scan

An environmental scan is an analysis of outside influences that may have an impact on an organization. This is
a methodical look at the world that typically includes four areas: political, economic, socio-cultural, and
technological (sometimes referred to with the acronym PEST). Understanding how each of these areas is
changing or is likely to change in the future can lead to a better appreciation of potential opportunities or
threats for the firm.
An alert business owner may use a change in one of these four aspects as an opportunity to be first to market
products customers want.

Political

Political issues center on government involvement in business operations. Companies must be alert to changes
in laws and regulations that affect their industries. Global companies need to understand the political structure
and regulations of each foreign country in which they conduct business. To assess potential political risks and
new opportunities, it is important to see what changes are likely in the laws governing your business operation,
as they will have an impact on marketing plans. Here are a few examples of issues and current regulations that
may affect certain industries in a positive way (opportunity) or in a negative way (threat):
 Do Not Call Registry the U.S. government pass this legislation in 2003. It gives people the ability to demand
that telemarketers not call their phone numbers. This regulation forced many businesses to rethink part of
their marketing strategies. Telemarketing companies had to adjust their data files to comply with the law.
Downloading Music from the Internet The problem of illegal downloading of music created a whole industry
with online companies that now provide legal down loading of music for a fee. This new industry may hurt
music stores but has become an opportunity for companies like Apples iTunes, RealNetworks RealRhapsody,
and Roxios Napster.

Economic

The current state of the economy is of interest to all businesses: If the economy is robust, businesses are more
likely to invest in new products and markets. An economy that is in a recession or slowing down sends a
completely different message to the companys decision makers. Upcoming marketing programs may be altered
or scrapped altogether in a weak economy. Factors, such as the unemployment rate, inflation, retail sales
figures, productivity, and consumer confidence, are tools to estimate the current status of the economy. The
value of the dollar in relation to foreign currencies affects imports and exports. Here are some economic factors
marketers would consider opportunities or threats:

An economy in recession poses a threat to nearly all companies. Most companies slow or stop plans for new
facilities and often reduce research and development (R&D) efforts.
If unemployment figures decrease and consumer confidence increases, companies may see an opportunity to
grow their business.
Changes in foreign currency rates could be seen as a threat or an opportunity depending on whether this
makes the companys products or services cheaper or more expensive in their foreign target market.
Illegal dumping (selling imported products at a very low price) in a given market is a threat to all businesses
in that industry.
Changes in trade restrictions, such as lowering or raising tariffs (taxes) on imported goods, could be
considered a threat or an opportunity, depending on where a company does business.

Socio-Cultural
A socio-cultural analysis is based on customers and potential customers. Changes in their attitudes, lifestyles,
and opinions provide a multitude of opportunities and threats. Socio-cultural analysis covers changes in all
demographic factors, such as age, income, occupation, education level, and marital status. Here are two
examples.

The United States is becoming a more ethnically and racially diverse country. Marketing plans need to meet
this change. For example, in the area of home buying, minority consumers are expected to account for nearly
two-thirds of all new home purchases by 2010.
Obesity is an issue in the United States, as it causes many health problems. Consumer advocates for healthier
eating habits have criticized fast-food chains.
Technological

Changing technology may be a threat for one industry or company, but an opportunity for others. A perfect
example is digital photography. To be competitive, traditional photo companies like Kodak are looking for ways
to adapt to this new technology. Camera companies are making more digital cameras. Other companies are
seizing the opportunity to capitalize on this new technology by developing products to support it. Printer
companies like Epson and Hewlett-Packard have developed products to make it easy for consumers to print
their own digital photographs. Companies that keep abreast of the newest technological breakthroughs can use
that knowledge to be more competitive. Here are a few examples:

Computer Automation The home of the future may be completely automated. You may be able to call from
your cell phone to change your thermostat so your home is warm when you arrive.
Satellite Technology Cars now offer satellite radio and navigation systems that direct you to your destinations,
as well as SOS systems such as OnStar that help you in an emergency.

Writing a Marketing Plan

Marketing is a complicated activity that relies on many different tasks. For this reason, marketers create a
marketing plan. A marketing plan is a formal, written document that directs a companys activities for ma
specific period of time. It details analysis and research efforts and provides a roadmap for how a product will
enter the market, be advertised, and sold. A marketing plan also communicates the goals, objectives, and
strategies of a company to members of the management team. The specifics in the plan let managers know their
responsibilities, budget, and timelines for completion. A marketing plan helps a company monitor a companys
performance. A small retail business may develop a simple marketing plan for a year, but a large manufacturer
with global sales would prepare a marketing plan that covers five years.

Elements of a Marketing Plan

Marketing plans may differ from company to company. However, there are some basic elements that will be
found in all marketing plans. Those elements include an executive summary, a situation analysis, marketing
goals/objectives, marketing strategies, and implementation, as well as a system for evaluation and control.

Executive Summary

An executive summary is a brief overview of the entire marketing plan. It briefly addresses each topic in the
plan and gives an explanation of the costs involved in implementing the plan. The executive summary may also
be used to provide information to people outside the organization, especially those who may be investing in the
company or organization.
Situation Analysis

Situation analysis is the study of the internal and external factors that affect marketing strategies. The
information from a companys SWOT analysis and from the environmental scan becomes the basis for this
portion of the marketing plan.

Goals and Objectives

Objectives let everyone know what the marketing plan will accomplish. To be useful, an objective must be
single-minded (have only one topic for each objective), specific, realistic, measurable, and have a time frame.
For example, you cannot include increasing sales and increasing profits in the same objective. Each topic needs
to be a separate objective. Specific means that the objective provides enough detail that there can be no
misunderstanding. You cannot use, to be better than a competitor as an objective because what is better to
one person may not be to another. Measurable means that the objective includes a way to evaluate it. For
example, you cannot simply say you want to increase sales. You need to identify the percentage increase in
dollar or unit sales to make that objective measurable. Thus, you could use, to increase dollar sales by 15
percent as compared to the same time last year. Finally, you must include a time frame, such as in six months,
or as compared to last years sales. Without a time frame, you would not know if an objective was actually
reached. Marketing objectives must be in line with the organizations goals and mission. If an organizations
goal is to double its business in five years, marketing objectives must coincide with that goal and provide the
means to reach it. A companys mission statement provides the focus for a firms goals with its explanation of
the companys core competencies, values, expectations, and vision for the future.

Marketing Strategies

A marketing strategy identifies target markets and sets marketing mix choices that focus on those markets. All
strategies need to take the customers needs and wants into account, as well as the objectives of the marketing
plan.
A companys or products position in the marketplace determines the appropriate marketing strategy. The
positioning of the product or service will drive decisions for each of the four Ps.
An effective marketing strategy should be focused on the key points of difference. The key point of difference is
the advantage a company, a product, or service has over its competition. The point of difference could be the
quality of the product, a superior distribution system, a more creative ad campaign, or a more competitive
pricing structure. This competitive advantage is what will make the company successful. The marketing mix
elements can help create points of difference with respect to competition. The results of the SWOT analysis
should provide enough information to identify the specific target market and suggest ideas to create the
necessary point(s) of difference to be competitive.
Implementation: Make the Plan, Work the Plan

Implementation is putting the marketing plan into action and managing it. This means obtaining the financial
resources, management, and staffing necessary to put the plan into action. A timetable shows when each part
goes into play. This part of the marketing plan outlines a schedule of activities, job assignments, sales forecasts
(the projection of probable, future sales in units or dollars), budgets, details of each activity, and who will be
responsible for each activity. This phase of the plan requires excellent communication among members of the
management team so that tasks are completed on a timely basis.

Evaluation and Control

In the evaluation section of the marketing plan, measures that will be used to evaluate the plan are discussed. It
is important to explain exactly how a specific objective will be measured and who will be responsible for
providing that evaluation.

Performance Standards and Evaluation

Performance standards are the measuring stick. A performance standard is an expectation for performance
that reflects the plans objectives. As part of the planning process, the control section suggests actions that
should be considered if objectives are not met. In the control phase, the companys goal is to reduce the gap
between planned performance standards and actual performance. Lets say sales did not reach the sales
forecast numbers. One reason for this discrepancy could be recent changes in economic conditions. In such a
situation, a company may revise its sales forecast to make it more realistic.

Appendix

The appendix is the section of the marketing plan that includes supplemental materials such as detailed
financial statements, sample ads, and other materials that support the plan.

Conclusion

The marketing process is ongoing. Think of it as a circular pattern that keeps going through the three phases of
the marketing process of planning, implementation, and control. The key question at the end of the process is
Did we accomplish the objectives listed in the marketing plan within the boundaries of the plan? A marketing
audit evaluates a companys marketing objectives, strategies, budgets, organization, and performance. It
identifies problem areas in marketing operations. A marketing audit happens on a formal basis once a year and
informally on a continuous basis.
Exercises

Exercise 16. Planning advertising

SPEAR, a mail order company, is planning a new advertising campaign. Below is an extract from an internal
report to senior marketers in the company. Fill each gap in the report with a word or phrase from the box.

Advertisements Advertising mix Campaign Catalogue Website

Commercials Competition Consumer awareness Direct mail
Hard sell Impulse buying Mailshot Online

ADVERTISING PLAN

Our plan is to sell products through a (1) ___________________________________ and mail order service. We will use a
high pressure, (2) ____________________________________ approach. We can attract customers to order the goods by
offering special (3) _________________________________ prizes. Once the catalogue arrives, consumers will order goods
which have an instant appeal. We will depend on ______________________________________.

Another approach is to run a long advertising (5) _______________________________________________________ to increase

(6) _______________________________________________ of our products. We plan a variety of advertising techniques: this
(7) __________________________________ will consist of television (8) __________________________________. We plan to do a
(11) ________________________________________ twice, to put extra pressure on those who do not answer the first time.

We also have a company (12) _______________________________________ where we advertise our products. Customers
can also order goods (13) ______________________________________.

Exercise 17. Planning advertising Strategies

Match each strategy (1-9) with the correct description (a-i).

1. Advertising on the Internet. a. Generic advertising

2. A promotion strategy based on getting the b. Below-the-line promotion
consumers attention and interest, then desire
for the product, then action (buying the
product).
3. All forms of advertising except mass media c. AIDA
advertising.
4. Mass media advertising. d. Customer-oriented selling
5. A selling style based on identifying and meeting e. Push strategy
the customers needs.
6. Advertising for a whole sector, such as tourism f. Above-the-line promotion
 or health promotion, rather than for a specific
product.
7. A sales-oriented selling style, using high g. Hard sell approach
pressure and persuasion, discounts and free
services.
8. A method of sales promotion which uses h. In-store promotion
pressure on distributors or on retailers.
9. Advertising at the point of sale. i. On-line promotion

Exercise 18. Planning advertising Strategies

Fill each gap in the sentences with a word or phrase from the box.

Consumers Emotional appeal Image Promotes

Publicity Rational appeal Targets USP (unique selling proposition)

1. A set of characteristics that make a product different from its competitors is its
_________________________________________.
2. Any activity which increases consumer awareness of a company or its products is ________________________.
3. Promotional techniques based on giving the consumer facts and technical information is concerned
with _____________________________________.
4. Promotional techniques aimed at peoples fears, ambitions, feelings, likes and dislikes are concerned
with ___________________________________.
5. Advertising ________________________________________ consumers and ___________________________ products.
6. Companies use websites and e-commerce strategies to appeal to new consumers and to promote a
state-of-the-art _______________________________________.
7. Mass media promotion aims to influence public perception, not only target _______________________________.

Exercise 19. Types of promotion

Choose the correct alternative for each sentence. In one case, both/all of the alternatives are possible.

1. Sending product or service information by post to specific individuals or companies is called

_________________________________________.

Direct mailing Mail order Postal advertising

2. A selling technique based on making a personal call to an individual or company is called

____________________________________.
 Personal selling Direct selling

3. A promotion based on advertising in the actual shop is __________________________________________.

An in-store promotion A special offer

4. A promotion method that involves the packaging of a product, such as including a free sample
or coupons, is called ____________________________________.

Point-of-sale advertising On-pack promotion

5. Advertising around the playing area at sports grounds is called ___________________________________________.

Sponsorship Perimeter advertising

6. A promotion method for fast moving consumer goods which involves buying one and getting one free is
called ___________________________________________.

Bargain selling BOGOF

7. Promoting your activities or your company and its products or services on the Internet is called
___________________________________.

Online advertising Advertising on the web Internet advertising

8. Telephoning direct to homes or business to try to interest people in your products or services is called
____________________________________________.

Cold calling Door-to-door selling

Exercise 20. Promoting a message

Match the definitions (1-6) with the phrases (a-f).

1. The way the company is perceived by the public. a. Positioning

2. What a promotion says about its subject. b. Message structure
3. The attempt by marketers to give a product a unique strength, or special c. Message format
characteristics, in the market.
4. The person who conveys the message in the advertisement. d. Corporate image
5. The way a message is presented in an advertisement, for example, through e. Message source
symbols, through shock, through humour.
6. The design of an advertisement, in terms of presenting a problem, providing a f. Message content
solution and justifying why that solution works.

Exercise 21. Key words

Choose the correct alternative for each sentence.

Survey Data Poll Bias Market researcher

Subject Questionnaire Respondent Sample

1. A study of what people think or what they do. ___________________________________________

2. A person who finds out information from the public in order to discover what they want or can afford to
buy. _____________________________________________
3. A set of questions to find out peoples opinions on particular issues, often used in studies of political
opinion and preference. _____________________________________________
4. Something that is given away free to make the customer aware of the product, or to make them try the
product. _______________________________________________
5. A set of questions designed to find out what people think about a product or service.
____________________________________________________
6. Information collected from research. The researcher then analyses the information before making
conclusions. ______________________________________________
7. Subjectivity or personal opinion affecting the results of a survey. __________________________________________
8. The person who is asked questions or is studied in market research. ________________________________________
9. Another name for the person who answers questions in market research, often by returning a
completed questionnaire. _______________________________________________

Exercise 22. - Research terms

Match each word on the left with an appropriate word on the right to make a phrase common in market
research.

1. Closed a. Analysis
2. Random b. Population
3. Biased c. Trial
4. Computer d. Brief
5. Clinical e. Awareness
6. Consumer f. Sampling
 7. Personal g. Interview
8. total h. Sample
9. Quota i. Question
10. research j. survey

Exercise 23. - Research terms

Now match each of the phrases you have made to one of the definitions below.

1. A test carried out on a new drug.

_______________________________________________________________________________________________________________________
2. A survey which is not objective and has been designed to give a particular result.
_______________________________________________________________________________________________________________________
3. A detailed description of the objectives of some marketing research.
_______________________________________________________________________________________________________________________
4. A sample in which all the people taking part have been selected by chance.
_______________________________________________________________________________________________________________________
5. A question with a yes/no answer.
_______________________________________________________________________________________________________________________
6. Use of ICT (Information Communications Technology) or computers to interpret results.
_______________________________________________________________________________________________________________________
7. What the public know about a company or product.
_______________________________________________________________________________________________________________________
8. Choosing a sample because of the particular characteristics of the individuals.
_______________________________________________________________________________________________________________________
9. All the people who could possibly be consumers for a particular product.
_______________________________________________________________________________________________________________________
10. A survey technique based on face to face (or possibly telephone) conversation.
_______________________________________________________________________________________________________________________

Exercise 24. - Research methods

Match the definitions (1-10) with the words and phrases (a-j).

1. Research which is designed to provide facts and statistical data. Results are a. Opinion poll
easy to analyse, often by computer.
2. A sampling method based on using small groups that are representative of b. validity
much larger groups.
3. Analysis of numerical information to test those results is accurate and reliable. c. Quantitative
 research
4. A limited study carried out on a small number of people to test your research d. Extrapolation
methods.
5. A survey designed to find out what people think, often on politics or e. Statistical
environmental issues. analysis
6. A set of questions in which the answers given affect what question(s) will be f. Pilot survey
asked next.
7. An original study carried out among the population, not by finding out g. Fieldwork
information from published sources.
8. An essential quality for research. Without it, the research is not reliable. h. Unstructured
survey
9. Using information gained from a small number of people to estimate how large i. Qualitative
numbers of (similar) people would behave in similar circumstances. research
10. Research which is open-ended and gives respondents the chance to express j. Cluster
opinions, feelings and attitudes. sampling

Exercise 25. Consumer marketing and buyer behaviour

Match the term on the left with the definition on the right.

1. Marketing ethics
2. Niche marketing
3. Brand loyalty
4. Routine purchasing
5. Impulse buying
6. Fast moving consumer f.
goods (FCMG)
7. Consumer durables
a. An established liking for a particular producers products that means you
often buy the same product again, even over many years.
b. Large purchases of products that will be used for a long time, even for
years. Such purchases are often thought about a lot, with a high level of
customers involvement.
c. A spontaneous decision to buy something you see it you buy it!
d. Aiming a high price, high quality product at a narrow group of consumers,
with a lot of purchasing power (a lot of money!).
e. Repeat buying, with little involvement in the purchase.
Regularly used items that are bought frequently with little personal
involvement.
g. Concern for the environment, for society and for a moral code in
marketing.

Exercise 26. Consumer marketing and buyer behaviour

Fill each gap in the sentences below with a preposition from the box. The prepositions may be used more than
once.

At In Into Of On To With For About

 1. People who are concerned ____________________________________________ society are typically interested
__________________________________________ marketing ethics.
2. Niche marketing is frequently concerned ______________________________________ aiming particular products
___________________________________ specific socio-economic groups.
3. Brand loyalty is based _______________________________________ the development _________________________________
routine purchasing of low-involvement goods.
4. The success of shops attached ______________________________________________________ petrol stations depends
____________________________________ impulse purchasing. You can see motorists who suddenly decide to buy
a music cassette, confectionery or a magazine.
5. Research _______________________________ buyer behaviour shows that when consumers make routine
purchases _________________________________ regularly used consumer products; they are not personality
involved ____________________________________________ for products.
6. Routine purchasing contrasts ______________________________________ the purchase of consumer durables,
such as furniture, kitchen appliances or a car. Here there is a greater degree ________________________________
personal involvement.
7. Clients have increasingly high expectations __________________________________ the providers of professional
services in a range of fields, including health, education and the law.
8. Special government appointed committees are responsible _______________________ ensuring that
consumers get good service and adequate protection. Sometimes called consumer watchdogs, they
respond _______________________ reports of malpractice.

Exercise 27. Economic factors and buyer behaviour

Fill each gap in the text below with a word or phrase from the box. The items in bold are headings.

Assets Credit availability Discounts

Economic growth Employment Discretionary income
Purchasing power Loss leader General economic situation
Price Outgoings

There are four major economic factors which affect consumer buying behaviour.

1. _________________________________________________________________________________

When the national economy is doing well, when people feel that there __________________________________ is
safe, they spend more. In times of a slowdown in _____________________________________________, if interest
rates or taxation rates increase, then buyer confidence goes down.

2. __________________________________________________________________________________
 People spend according to what is left after meeting their regular costs on rent, mortgage, bills, tax,
borrowings and other _______________________________________________. What is left is called
_________________________________________________.

3. __________________________________________________________________________________

Banks and other lenders are sometimes particularly happy to lend, for example to anyone in work, or
with ____________________________________________________ such as property. Credit card spending goes up and
many people borrow money to buy goods.

4. __________________________________________________________________________________

This is perhaps obvious. High prices may limit spending, but not always. Sometimes high prices indicate
high quality and this increases the desirability of the product. Price may also be less important if the
need is great. But, in contrast, low prices may increase buying, especially where ___________________________

are no offer. Sometimes items are offered at a low price as a ___________________________________. This means
products are sold at below cost price. The shop thinks that consumers will buy these low priced goods,
but also other high profit items.

Exercise 28. Consumers and lifestyle

Match the consumer type (1-8) to the lifestyle definitions (a-h).

1. Achiever a. This person has a traditional, conservative and conformist lifestyle. He or she
likes to feel comfortable but does not like change
2. Belonger b. This person has the original idea to do something.
3. Decision maker c. This person is young, ambitious, successful, hard-working and determined to
win in life.
4. Dependent d. This person is ambitious and competitive, and seeks to become richer and more
successful, but is content with life.
5. Emulator e. This person has worked hard and got what he or she wanted. He/She is rational
and reasonable.
6. Influencer f. This person announces that something is going to happen.
7. Initiator g. This person tells other people about an innovation they think is a good one, and
recommends buying.
8. Integrated h. This person is unable to survival well alone because of age, lack of money or a
physical or mental disability.

Exercise 29. Market Segmentation

Mark Statements 1-8 T (True) or F (False). If a statement is false, correct it.

 1. Social marketing targets particular consumers according to their socio-economic group.
a. TRUE
b. FALSE
2. Target marketing is concerned with advertising to particular groups of consumers.
a. TRUE
b. FALSE
3. Differentiated marketing aims to appeal to specifically identified groups of potential users of a product.
a. TRUE
b. FALSE
4. Undifferentiated marketing is all kinds of marketing techniques used at one.
a. TRUE
b. FALSE
5. Segmentation strategy is an attempt to divide the total market into specific types of consumers.
a. TRUE
b. FALSE
6. Product positioning is a way of promoting goods in stores.
a. TRUE
b. FALSE
7. Industrial marketing is the marketing of manufactured goods.
a. TRUE
b. FALSE
8. Consumer watchdogs have become more common especially in service industries and in public sector.
a. TRUE
b. FALSE

Exercise 30. Industrial Marketing

Industrial marketing is marketing by companies where the target audience is another company, or
organization, not individual consumers or members of the public. Completely different marketing strategies are
involved.

Read the extract from a management training book below. Fill in the gaps with headings from the box.

Buyer factors Price and promotional factors Supplier factors

External factors Needs

Influences on industrial purchasing

Industrial marketers must understand what affects buying decisions in companies and organizations. Then
they can plan a marketing strategy. We can say that buying is affected by five factors.
 1. _____________________________________________, for example discounts, special prices and terms, as well as the
influence of advertising, free samples, and trial offers.
2. _____________________________________________, or what people say about the company, exhibitions and trade
fairs, reviews and comments in trade journals, and also any relevant seasonal factors.
3. _____________________________________________. Examples are the buyers experience, and knowledge of the
product, and of the potential suppliers. The culture of the buying organization is also important, and an
understanding of the company purchasing policy. The size, complexity, level of technology, and financial
resources are all important. A final factor in this category is the structure of the organization, and the
role of senior executives in buying decisions.
4. _____________________________________________ including level of urgency, stock levels, and the perceived value
of the purchase to the buying organization.
5. _____________________________________________ include competitors and rival offers, the quality and availability
of the product offered, after-sales service, location and labour relations at the suppliers. Another
significant factor here is the relationship with existing suppliers, including personal relationships, and
the desire for continuity.

Exercise 31. Industrial Marketing

Find words in the text above which go with these definitions. They are in the right order.

1. Special reduced prices

2. Conditions attached to payment, such as dates and credit.
3. Special industry events to show off products.
4. Specialist magazines.
5. Rules about buying goods and services.
6. Quantity of equipment held in storage.
7. Support provided by a seller to a buyer.
8. The relationship between a company and its employees.

Exercise 32. Key Words

Match each word (1-6) with its opposite (a-f).

1. overseas a. Free market economy

2. strength b. Global
3. buyers c. Domestic
4. supply d. Weakness
5. Command economy e. Suppliers
6. local f. Demand
 Exercise 33. Key Words

Now fill each gap in the sentences with a word or phrase from the box above.

1. Nabisco has dominated the ____________________________________________ biscuit market in the USA for over 60
years.
2. The enormous _______________________________________ of the McDonalds brand name has helped the
company to enter new markets all over the world.
3. A ______________________________________ of small retail businesses is their inability to compete with larger
competitors in fixing favourable terms with __________________________________________.
4. All major European manufacturers have to look to __________________________________ markets to increase
their turnover.
5. When commercial ____________________________________ purchase large quantities of goods, it is often possible
to achieve important cost savings.
6. Effective pricing policy depends on the ______________________________________ and ______________________________
relationship.
7. The WTO, NAFTA, Japan and the EU are committed to the values of the _____________________________________.
8. Globalization has caused many businesses to look to ____________________________________ markets and not
just ______________________________________ ones.

Exercise 34. Marketing planning

Fill each gap in the sentences below with a word or phrase from the box.

Accountability Competition Economics of scale External audit Marketing audit

Economics of scope Marketing planning Marketing research Public sector Service

1. Increasing production by 25% does not increase costs by much, because we are able to take advantage
of ______________________________________________________.
2. A complete _________________________________________________ will demonstrate all aspects of our performance
in terms of meeting our marketing objectives.
3. ________________________________________________ is essential to prepare clear objectives and a strategy for
reaching our objectives.
4. The _______________________________________ examines factors which are not under the companys control.
5. By having documentation which can be used in various markets we are able to take advantage of
_____________________________.
6. We are conducting _________________________________________ to try to improve all aspects of our company
performance.
 7. We know that marketing planning has a long history in the private sector and in manufacturing.
Recently there has been a new emphasis on planning in the ________________________________________ and in
all kinds of ___________________________________________ industries.
8. Public sector marketing has had to respond to increased _____________________________________ and the need
for ______________________________________ in all areas of service provision.

Exercise 35. The international trading environment

Choose the correct term for each of the definitions.

1. The market consisting of the country where a company is based and no other countries.
a. Servant market
b. Domestic market
c. Local market
2. Factors which I) may have a negative effect on company performance, but which II) are outside the
companys control and III) are identified during an analysis of marketing performance and prospects.
a. Weakness
b. Threats
c. Quotas
3. A contract which allows another company to make your product and states the terms of payment.
a. Franchise
b. A patent
c. A licence agreement
4. The action of making illegal duplicates of copyright material.
a. Black market
b. Cloning
c. Copyright infringement
5. A large company with subsidiaries in many different countries.
a. A multinational
b. A holding company
c. A corporation
6. Factors which I) probably have a negative effect on company performance, II) are within the companys
control, and III) are identified during an analysis of marketing performance and prospects.
a. Weakness
b. Threats
c. Failures
7. A body which negotiates and then monitors international trade agreements.
a. World Trade Organisations (WTO)
b. General Agreement on Tariffs and Trade (GATT)
 c. World Bank
8. Companies which advertise and trade internationally using their own website on the Internet.
a. High tech companies
b. Dot.com companies
c. Internet Service Providers (ISPs)
9. Cash incentives provided by a government to encourage a company to do business overseas.
a. Export taxes
b. Export tariffs
c. Export subsidies
 CASE STUDIES

Barclays - Discovering customer needs through research

Portakabin - How market research helps Portakabin to remain at the cutting edge
Portakabin - How the role of marketing drives business forwards
Portabakin Promoting the Brand
Kellogg's - New products from market research
McCain The marketing mix in the food industry
Zurich Providing customer-centric service
Diesel Live, breathe and wear passion