• For Demographics: This method is to divide the market into groups based on variablessuch as age, gender, family size, family life cycle, income, occupation, education,religion, race, g
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I INTRODUCTION
Nowadays, businesses often appreciate the Marketing Management because customer's demands are not limited They often like new things and persue personal passions
Therefore, we can understand that Marketing is the combination of all these factors to adapt to customer's changes The most important is that every corporate should have plans and schemes to perform this matter It is not only necessary but also brings success for corporates
Therefore, to understand more about the activities of marketing, I chose some concepts of marketing activities to analyze to supplement knowledge for myself
II BODY
In order to perform activities of Marketing Management, the businesses should
understand exactly the concepts which relate to marketing activities The following are some concepts of the marketing management
1 Explain market segmentation with suitable examples.
Nowadays, the rapid development of the global economy has grown a fierce competition among enterprises on the market To survive, each business must have dynamic approaches to the market and be willing to deal with threats as well as high competitive pressures Therefore, they have to implement their market-oriented production In particular, the establishment and completion of market segmentation policy to have a suitable marketing strategy is an essential request and effective instrument to help an enterprise get success These are contents and reasons that I want to present this topic Definition of market segmentation
It is conceivable that Market segmentation is the process that companies use to divide large heterogeneous markets into small markets and a business gives criteria to review and collect people with the same criteria together and then put the suitable value for that
Trang 2group Or market segmentation is an activity in order to determine general characteristics
of a group of customers in the overall market For example of the mobile phone market, businesses now compete with each other fiercely and focus on main segments Firstly, a segment of cheap phones such as: Samsung, LG, Nokia, Philips for low and moderate income people as employees, workers, unskilled workers, students is to meet needs of listening, calling and sending message Secondly, a segment of expensive phones such as Apple's iPhone, Samsung's Samsung Galaxy for relatively high income people and managers is to meet needs of calling, sending message as well as Web access, email, listening to music, watching movies, entertainment And finally, a segment of superior phones as Vertu of Nokia….is to meet the need of showing professional level of traders and famous people
Enterprises now have to seek their own suitable market segment because of following reasons: Firstly, the market demand is very large, enterprises cannot attract and satisfy all the needs of the market at once, so they have to analyze the needs of different customer groups to choose and provide the products or services accordingly and increase their competitive advantage For example, for many reasons, the demand for products and services such as telephones, cars, or trips, etc., is different Secondly, today's customers are increasingly differentiated by preferences, style, income, segment otherwise it cannot create products to suit each customer group Thirdly, each company has its own strength and resources and has to face many competitors, so if they identify a suitable market segment, build their own style and personal image consistent with their inherent ability; they will succeed because it helps the business focus their efforts on the right target market Conversely, if they choose a wrong target market, such as choosing a market is bigger than their ability, they will be not able to meet the demand better than other competitors Finally, market segment is not only a basis for formulating market strategies of enterprise but also a basis for identification, market assessment It helps them monitor developments and forecast market changes in order to prepare for future market needs
Trang 3The methods used in market segment
There are many criteria that a business can choose or combine criteria to conduct market segment, such as Geographics, Demographics, Psychographics and Behaviors
• For Geographics: This method is to divide the market into different areas of the country and regions with different climate, economy and culture Since then, businesses will realize the differences in morphology and demand in each region to select and make decisions accordingly For example, the need of using air conditioning in Nha Trang is more than in Dalat because Dalat has cool climate all year
• For Demographics: This method is to divide the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality… thence businesses will understand exactly what customers need to have a business strategy effectively Different ages, different genders will have different needs for clothing, music, motorcycles, perfume, travel, for example P/S Co has separate segments of products for children and the elderly; the dairy market also has segments for children such as Dutch Lady 123 and 456, Grow for the elderly such as Ensure, Allen, etc.,
• For Psychographics: This segment is divided into groups based on social class, lifestyle
or personality For example, each social class has different consumer psychology such as people with different lifestyles and personalities will have different care of products such
as cars, fashion, music, etc.,
• For Behaviors: Divide market segmentation of consumers into homogeneous groups of characteristics as: reasons for shopping, search interests, loyalty, quantity and rate of use, consumption power marketers think that research on consumer behaviors is the best starting point to form market segments For instance, the toothpaste products of Colgate and Sensodyne compete in the same market segment of sensitive teeth While some other toothpastes aims to make white teeth, no cavities
Trang 4Some examples of market segment in Vietnam.
For the shampoo market, based on the diverse needs of consumers in Vietnam, shampoo companies have fierce competition in the highly fragmented market of this product according to the criteria as mentioned above For instance, segments by product benefits such as anti-dandruff shampoo, glossy hair, and anti-split include Unilever's Sunsilk and Clear, P & G’s Head & Shoulders; product of fragrance for women as ICP Enchanteur Products aim at low-income families and mainly in rural areas such as Unilever's Lifebuoy and Dove In particular, previous shampoo products are mostly aimed at women However, recently the market has appeared the product line for men as Unza's Romano, ICP’s X-men, P & G’s Head & Shoulders and Unilever's Clear Men,etc
In short, Market segmentation is an activity to help enterprises identify the best market and choose the right target market If the research and market segmentation of enterprises are good, they will have a stronger position than competitors, set out the right marketing strategy At the same time, marketing activities will be more effective in every market segment that has been studied and will be gradually the master of the market
2 "PLC as a tool for marketing strategy" justify.
Product Life Cycle (PLC) is an important concept of marketing It helps marketing managers to better understand the movement and transformation of products on the market, the competitive dynamics of competitors and approaches necessary for the business of the various stages of the product life cycle
There are many concepts of PLC However PLC is simply the amount of time that products exist on the market In particular, periods of trading history of a product are described differently Thus, businesses could better make plan for their marketing plan Basically, product or service after it was launched to the market will also change over time and will usually go through four distinct stages Firstly, Introduction stage is a period of slow sales growth as the product is introduced in the market Profits are
Trang 5nonexistent in this stage because of the heavy expenses incurred with product introduction At this stage, sales are low and costs are high in the introduction stage, thus,
no profits are made Secondly, Growth Stage is a period of rapid market acceptance and substantial profit improvement Thirdly, Maturity stage is a period of stable sales index, slowdown in sales growth In this stage, products have established its position and market share in the market Finally, Decline stage is the period when sales show a downward drift and profits erode due to competitive pressures, changes in market demand
However, each different product has different life cycle, such as: short time and long time, consumption and profits at each stage Therefore, businesses have different marketing strategies of production, supply, and finance in each stage of each product life cycle For example, Toyota Lifecycle is dependent on factors such as vehicle type, market demand changes, provisions of circulation, safety, and environment the life cycle of car products is usually longer than other consumption industries because of great value of products, high production costs and long innovation research time
Marketing strategies under the product life cycle
• Introduction stage
In this stage, products begin newly to enter the market and companies take heavy costs to introduce the product to the market and promotion costs very much with a little profit coming from product sale However, an enterprise has suitable price strategies such as: rapid skimming strategy, low skimming strategy, rapid penetration strategy and low penetration strategy depending on the market Specifically, rapid penetration strategy is used to launch new product at low price but with high promotion and used when the market is large; market is not aware of products; customers are price sensitive and product competition is high… rapid skimming strategy is used to recover capitals when the market has little competitors, and used when customers are aware of products and ready to pay a high price for products (due to brand favorability or advertising) For example, iPad 2 of Apple was launched into the Vietnam market with the price of VND
Trang 613-14 million (in 2011) and so far, its price is only VND 8-9 million and has been upgraded to iPad 3, iPad 3 4, etc
• Growth Stage
Products meet demands of the market and sales increase rapidly In this stage, enterprises may deploy marketing strategies to lengthen the development of products in the market, such as: improve product quality, add new features and models Strategies include new market segment, expansion of existing distribution channel and participation in new distribution channel; an increase of advertising from product awareness to product properties and discount strategy… For example, in the Vietnam market, AT car lines are
in the development stage and will replace traditionally MT car lines
• Maturity Stage
In this stage, the growth rate slows down and is likely to stay longer than the previous stages; the most of the marketing management deals with mature products For example, market modification (entering new market segments, trying to get competitors’ customers) and product modification, etc
In this period, companies should not focus on advertising because of no profit but they should try to convince customers to use products in different ways and sell as many products as possible Concurrently, companies should focus on investment, research and development of innovative products to maintain the efficient business operations because current products will become obsolete, sales and market share will decline due to competing products, resulting in profits of enterprises increasingly reduced Especially,
do not let products fall into the end-stage (decline stage) because then products will die For example, the product line of Apple’s iPhone always improves when it entered into prolific period as the iPhone 3, 3s, iPhone 4, 4s New products are currently in vogue is iPhone 5 and Apple are preparing to launch iPhone 6 to the market (when the iPhone 5 is
on the stage of fullness)
Trang 7• Decline Stage
The main characteristic of this stage is lower sales volume and profit erosion because of technical advances which lead to better substitutes, change in customer taste with time and increase in competition At that time, the company should have a strategy to quickly remove products (because the more they prolong the more they lose) For example, TRIBICO carbonated soft drink products of Tan Hiep Phat had a development and fullness stage from 2001-2005 but later it transferred to decline stage because of the competition of Coca-Cola and Pepsi So far it has disappeared from the Vietnam market
In short, a product life cycle could be divided into several stages characterized by the revenue from products It can be applied to a brand or a product group and product life cycle is a tool that helps marketing managers to set up marketing strategies so as to address the challenges that their products may encounter It is also useful for monitoring sales results over time and comparing them to the life cycle of similar products
3 Explain process of selecting the final price
As we all know, price is a key factor and one of four important components of the strategy and the success of marketing activities because it directly affects sales and profits of a Company For customers, price plays a decisive role in the choice and decision to buy products For a company, price plays a decisive role in the competition of the market Therefore, selecting and determining the final price of a business must be commensurate with the value received by customers and their competitiveness
Definition of price: Price is a currency that customers need to spend to get a right product quality, at a right time, in a right place
The importance of price: Firstly, in the Marketing mix, Price is the one, which creates sales revenue - all the others (Products, Places, and Promotions) are costs Secondly, price causes more immediate reaction than other components for customers as well as competitors Thirdly, price directly affects sales and profitability of a business Finally,
Trang 8because prices have significant impact on consumer spending, it is important in their selection and purchase
However, the pricing decisions affected and influenced by many factors inside and outside of the company, at the same time, its formation and movement is complex Giving a rational pricing strategy requires solving many integrated and synchronous problems Specifically, internal factors include pricing decisions such as marketing objectives, marketing mix strategy; product life cycle, cost and valuation organization and external factors include market, demand, competition, government policies, economic conditions, politics, society, etc
Businesses choose a final price
The choice of final price is to help marketer narrow price and then make the best decision
of choice However, there is no fixed formula for the pricing because each business line has its own characteristics, or depends on the product life cycle to determine the price Typically, when choosing the final price, firms often have to go through the process of determining the basic price such as identify objective, product demand, cost estimates, price and product analysis of competitors, choose the valuation methods and finally decide the price of the company
When deciding on the final price, companies often consider factor: Firstly, psychological pricing of customer acceptance because prices are often associated with quality and product prestige For instance, Vietnam people often appreciate product lines of Apple brand such as iPhone, iPad, and are willing to pay high prices to own it Or businesses often use cheap psychological pricing of customer when fix product price in odd numbers like $ 999 instead of $ 1,000 Secondly, the company's pricing policy Specifically, pricing policy of the company must ensure that pricing decisions are coordinated with the company's decision on target market, image and other marketing mix factors E.g product prices for high income market segments in luxury places must be higher than others and vice versa For example, in Ba Ria-Vung Tau Vietnam, the price of a
Trang 9HENEIKEN beer in Pacific Hotel (2 stars) is VND 25,000, while at Ho Tram Strip (5 stars) is VND 70,000 (in 2013) Thirdly, Impact of price on other parties—distributors, sales force, competitors, suppliers, government policies E.g responses of distributors, attitude in favor of sales force, responsive of competitors, suppliers, and government regulations of issues related to price management For example, EVN's electricity price in Vietnam is very much dependent on the policy of the Vietnamese government in order to stabilize the macro-economy of the country Finally, when fixing a price, the company often considers to the reputation of its brand and the objective of the ad E.g when a product is advertised widely and many consumers are aware of products, they are willing
to pay higher prices for products with the same functionality but are not well- known
In summary, the choice of a final price is an art because it does not merely offer a price for the product, but it makes a difference as well as creates a position of businesses on the market Building a right price is an important condition to ensure businesses could penetrate and occupy the market, helping enterprises achieve business efficiency
4 Explain the process of the Integrated Marketing Communication.
As we know, under the fierce competition, most of the mass market has fragmented into many small markets, and each market requires a particular approach At the same time, with a variety of new communication tools, a rich understanding and broader view of the consumer to the market has created pressure for managers to build awareness of products among target customers in order to make them interested, confident and willing to spend money to buy products To resolve this challenge, a process of Integrated Strategic Marketing Communication launched to help businesses fully understand the different waysof communicationto influenceconsumers’ behavior.
What is Integrated Marketing Communication? According to American Association of Advertising Agencies (also 4A's), Integrated Marketing Communication (IMC) is a concept of marketing communicationsplanning A concept of marketing communications planning recognizes
the added value of a comprehensive plan that evaluates the strategic roles of a variety of
Trang 10communication disciplines – generel advertising, direct responce, sales promotion, public relations – and combines these disciplines to provide clarity, consistency, and maximum communication impact
Features of IMC: Firstly, all IMC efforts should be target consumer focused Secondly, forms of IMC are human and/ or media used Finally, IMC's objectives are to use many different media to increase awareness about the products or services of a company and inform people about the features and benefits, as well as promote consumers
Roles of IMC: Firstly, IMC is a tool to perform functions of communication and meet customer needs Secondly, it coordinates with other tools in the marketing-mix to achieve marketing objectives Thirdly, it is a competitive tool in business: Increase the value of products, information, create product awareness, enhance brand reputation and maintain confidence, good attitude of the public about the company
The basic tools are combined in IMC, including:
• Advertising is a paid, non-personal communication about an organization and its products transmitted to a target audience through mass media.
• Sales promotion is activities of stimulating shopping needs by bringing additional benefits to customers in a period
• Direct marketing is an interactive system of marketing, which uses one or more advertising media to affect a measurable response and/or transaction at any location
• Public relations (PR) is a form of communication in order to create a friendly attitude towards business and its products that usually do not specify a specific sales message
• Personal selling is a form of product presentation by staff of a business done before customers, be it face to face or over the phone
Each of IMC tool has different roles, made with different forms and each tool has its advantages and disadvantages