Bài tập marketing về chiến lược tiếp thị quá trình định giá cuối cùng, marketing trực tiếp

Marketing management shall direct other managementactivities by showing the needs of the targeted customers, competitive pressures andsupply of appropriate products and services.. From t

Bài tập marketing về Chiến lược tiếp thị - Quá trình định giá cuối cùng, Marketing trực tiếp

1

1 Explain the following:

(a) Production concept

(b) Product line

(c) Augmented product

(d) Social marketing concept

2 Explain various concepts of marketing with suitable examples.

3 “PLC as a tool for marketing strategy” justify.

4 Explain process of selecting the final price.

5 Explain “direct marketing” and its applicability with examples

CONTENT

I INTRODUCTION

Nowadays, marketing is increasingly focused by most enterprises It is possible that marketing is the key to success in business A product or service whether may be sold or not and an enterprise whether may develop or not depend mainly on marketing activities

The question is how to drive all marketing operations towards a motto: Thoroughly understand and satisfy the needs and desires of your customers more strongly than competitors Accordingly, business objectives will be successfully implemented This relates to the marketing management

In view of the marketing management of Philip Kotler: "Marketing management include analysis, planning, implementation and inspection for the implementation of measures to establish, consolidate, maintain and develop beneficial discussion with selective buyers to achieve the fixed targets" (Kotler, Philip (2012), Marketing management, 14 th

edition).

Marketing management has a very important role for managing other business operations such as: production management, financial management and human resource management Marketing management shall direct other management activities by showing the needs of the targeted customers, competitive pressures and supply of appropriate products and services

From the knowledge of Marketing management course and my instructor's

guidance, I have decided the following topic: "Marketing Management" and analysis

of several contents to demonstrate the important role of the marketing management

My assignment focuses on 5 contents: (1) Production concept, Product line, Augmented product, Social marketing concept; (2) Explain various concepts of marketing with suitable examples; (3) “PLC as a tool for marketing strategy” justify; (4) Explain process of selecting the final price; and (5) Explain “direct marketing” and its applicability with examples

My assignment includes three parts: the introduction, the body and the conclusion

My analysis will be accompanied with a number of examples to prove

II BODY

1

1 Explain the following:

(a) Production concept

(b) Product line

(c) Augmented product

(d) Social marketing concept

Several important marketing concepts are described as follows:

Production concept:

The production concept indicates that consumers will favor products to be available for use and widely distributed at a low cost Thus, the marketing management should focus on manufacturing and product distribution

This policy is usually explained by two major reasons:

Firstly, when a product demand exceeds the ability to supply, buyers will be interested in obtaining products to consume rather than focus on the sophisticated attributes of product quality For example, in the developing countries, the food demand of buyers is quite high while the ability of producers to meet is not sufficient

At that time, the manufacturers only pay attention to increase their production scale for the purpose of increasing sales and profits They do not pay much attention to product quality

Secondly, if the production costs are high and need to be declined, manufacturers seek how to increase production to achieve the economic efficiency in scale in order

to expand the market For example, in the '90s, Vietnamese consumers were less likely to own a motorcycle though it was produced in the country (such as Super Dream ) because its price was too high But later, due to mass production, its price has been dropped significantly and many people are easy to buy

Product line:

This concept means that all goods produced by a manufacturer This is a group of relative products, or because they perform a similar function, are sold to the same group of customers, are marketed under the same distribution channels, or classified a certain price

For example, the line of personal hygiene products of Procter & Gamble (P&G) consists of all kinds of products such as toothpastes, mouthwashes, toothbrushes, shampoo, shower gels with so many extensive goods

Augmented product:

In business, when main products offered to add additional values will positively

impact the purchase decisions of customers They are called as Augmented products.

These values are considered as part of augmented products, in particular:

http://www.fingertecblog.com/2013/08/afiqs-5-ps-in-fingertec-part-5.html

- Guarantee: If the product is damaged, it will be replaced with a new one, repaired or refunded to customers

- Warranty: Maintenance shall be provided during the warranty by repairing or replacing a number of products and equipment

- Customer service: Additional services shall be provided to support the needs of customers such as manuals, client consultation via phone or website

- Additional products: Several product utility shall be strengthened so that major products may be easier to use For example, scratch-resistant cover shall be given when you buy an ipad

- Accessibility: Products may be accessed by customers quickly such as availability when needed, quick delivery, shipment in person

Social marketing concept

The social marketing concept shows that the business mission is not only to bring customer satisfaction but also ensure the social benefits

The social marketing concept requires marketers to balance three objectives for the purpose of designing the marketing policies: customer satisfaction; profit target, social welfare

For example, an enterprise specializing dishwashing liquid focuses on high detergent, no damage to users' hands but now its focuses on manufacturing biological products without polluting the environment (such as dishwashing liquid bio products of Amway company ) Thus, products shall ensure consumers’ benefits and social benefits

2 Explain various concepts of marketing with suitable examples.

The marketing management is the conscious efforts to achieve desired exchange outcomes with the targeted markets In the course of business, each company may apply various marketing management concepts

There are five basic concepts:

(1) Production Concept

(2) Product Concept

(3) Selling Concept

(4) Marketing Concept

(5) Societal Marketing Concept

The following viewpoints of the said philosophies include:

Production Concept:

As described in section 1 The production concept focuses on production, because customers will benefit for availability and widely distributed at low prices

The positive aspect of this concept is obvious when the demand exceeds the supply However, the supply sometimes exceeds the demand For example, when the supply exceeds the demand, it if hard for companies to sell their products, revenue is not sufficient to offset the cost At that low price, the ease of shopping will motivate customers to buy

Product Concept:

The product concept focuses on production, because customers will benefit if products with best designs, innovative models are provided to them The marketing management should try its best efforts to obtain the continuously advanced

The positive aspect of this concept is to promote the market to get many good products, but there are difficulties due to emergence of substitute products on increase Therefore, customers will buy the substitute products with better uses and benefits For example, Elgin watches (produced in USA) with a concep of product respect, the manufacturer made expensive watches with high strength, excellent accuracy But it failed when consumers change their views It is said that the watch function is to show time only, it should not be very durable, exact, but its shape must be fashionable, convenient and affordable So they chose to buy watches from other manufacturers

Selling Concept:

The sale mission is focused, because consumers will not buy all products of a company if its strong promotional sales are insufficient

This concept is applied to detect the potential customers by convincing the product benefits For example, the seller convinces the buyer to buy the products with passive demand (unsought goods) that the buyer normally does not think about it such

as insurance, functional food or products with active demands (sought goods) but expensive such as houses, cars…

The shortcoming of this concept makes many potential customers be surrounded

by the advertising programs, promotional services They are very fretful and avoid

Marketing Concept:

The customer satisfaction is focused on bringing success, so manufacturers should only offer products to be wanted by customers

The marketing philosophy is based on four main pillars such as: targeted market, customer trends, mixed marketing and profitability The marketing philosophy indicates that the key to achieve the targets of the organization is to determine the needs and wishes of the targeted market, and distribute the satisfaction more effectively than competitors

This concept quickly becomes the foundation of modern business philosophies However, its limitation is not to pay attention to social welfare For example, a company specializes in selling chemical pesticides with efficiency of fast insect killing responding to customer needs, but affecting the environment (social benefits) However, they are not interested in producing biological pesticides due to slow insect killing, high prices, customers do not like them

Societal Marketing Concept:

As described in section 1 The social marketing concept is not only to respond the customer satisfaction but also ensure the social benefits

Previously, most companies established their marketing decisions on the basis of profit, but they now focus on satisfying customer needs and perceptions of the importance of the social benefits As a result, the marketing activities will be significantly better with the longer-term benefits

From the basic concepts, companies may choose to apply to their business activities The choice of a particular concept depends on factors such as: competitive position, product and service features, market situation But the most important thing in modern marketing management trends is to bring high satisfaction to their customers, business profits and social benefits

3.“PLC as a tool for marketing strategy” justify:

A product in the market will go through the stages of development and declination The development phases of the product from time to time are known as the "Product Life Cycle", abbreviated as PLC

Product life cycle is a key concept of marketing It vividly describes four stages in product consumption: Introduction, growth, maturity and decline

Product Life Cycle may be illustrated by the following chart:

http://www.misa.com.vn/tabid/91/newsid/22774/Chien-Luoc-Marketing-Thay-Doi-Theo-Vong-Doi-San-Pham.aspx

Companies should be aware of their products stages to propose the following appropriate marketing plans: Product introduction, old product renewal, or replacement with a new product line It can be said that PLC is a useful tool to help businesses applications in numerous marketing strategies

Specifically:

1/ Introduction Stage : The product is being marketed Customers do not know or

do not know much about the product Sales growth is slow and unprofitable because it takes a lot of costs to introduce and advertise products on the market

In this stage, if the pricing strategy is made, wrong product positioning would reduce the product value Due to small market size, big sales may not be created The enterprises must consider their marketing strategies in case of market uncertainty The targeted customers like to explore and experiment They always want to be the first person to use the product

For example: In the late '90s, the motorcycle market of Vietnam almost did not know the Chinese motorcycle brand When introduced in the motorcycle market in Vietnam, the Chinese companies used the "rapid penetration strategy." This strategy used the high-support and low initial rates, for the purpose of rapid penetration and

market share domination This strategy was consistent with the market where had not known the product, price sensitive, potential market and intensive competition As a result, Chinese motorcycle brand was successful, achieved a large market share in Vietnam

2/ Growth Stage : After the introduction stage, many customers are interested in

the product The products are received by the market rapidly When the product is dominant to the market, it will bring profits significantly

In this stage, companies may develop several marketing strategies to prolong the rapid market growth

For example, after the motorcycle brand has been dominant to the market, the product improvement strategy may be made; new features and models are enhanced

Or the strategy to penetrate into new market segments may be implemented

3/ Maturity Stage : After the growth stage, the number of customers who have got

the products at a high level Attractiveness of the product is not significant as ever before The product demand has been gradually matured

Sales stops growing and begin to decline gradually from time to time Many competitors appear, so it is risky to lose the market share or the product is not met to consumers

In this stage, enterprises should deploy marketing strategies for new products or alternative products

For example, a motorcycle manufacturer has owned the "numbered motorcycle"

to be matured; accordingly motor-scooter line is made to replace the existing products

4/ Decline Stage : At this time, the product has become too familiar and not so

attractive Consumers are boring They want to buy new products with more features Purchasing power is declined strongly, sale costs are on increase and profits are on decrease

In this stage, enterprise should now decide whether to implement any marketing strategy: Maintenance, collection or removal

For example, a “numbered motorcycle" manufacturer should apply discount strategies to attract customers at a lower segment and to obtain revenue in the period

In short, the selection of appropriate marketing strategies for each stage of the product life cycle is to exploit the strengths of the product and the market When a product is introduced to the market, enterprise should forecast its product life cycle to develop the appropriate marketing activities Accordingly, they will achieve their profit maximization

4 Explain process of selecting the final price:

Price is the sole factor in the marketing-mix to generate revenue, other factors create costs It is important to determine the prices of products or services in the process of circulation on the market for the purpose of attracting customers as well as achieve profits or targets

For product price that becomes an effective marketing tool in the marketing-mix, enterprise have to analyze the impact of factors affecting product pricing in order to take steps to determine the price to provide the highest efficiency

Pricing:

Enterprises must establish a price for the first development of a new product, introduction of a new distribution channel or geographical area This is usually done

as follows:

- Identify the targeted market segments for products or services

- Establish the prices for consumers of such prices targeted market segments

- Check prices (and costs if possible) of actual or potential competitors

- Check different prices in quality or product distribution method

- Identify profits to be obtained at each price

- If profits are low, it is needed to change specifications of products to reduce costs and generate profits as desired

The order to design the pricing policy

Step 1: Selecting the pricing Objective

This is the most important step in pricing The major objectives include: The survival of the enterprise, highest profit, maximum market share, maximum market surf and product quality management Enterprises use prices as a strategic instrument

to be more beneficial than other companies that use the cost and market to determine their prices

For example, Samsung, one of the groups, has experienced in market surf They sell at a high price when a high-tech phone is launched in the market for consumers who have a lot of money (high segment) When the purchasing power in this segment

is declined, its prices will be rapidly discounted to attract the purchasing power in lower market segments

Step 2: Determining the demand

The next step is to determine demands Each rate will create different demands that will be inversely proportional to each other and have different impacts on marketing objectives

The demand estimation leads to:

- Estimation of sensitivity;

- Estimation and analysis of the demand curve;

- Determination of the demand elasticity in price

Step 3: Estimating Costs

Product costs include: Production cost, distribution cost and sale of products These costs depend on each different production levels

Step 4: Analyzing competitor’s costs, prices and offers

This is an important factor in pricing This step depends on market demand and product costs, competitors’ cost and possible reactions For example, if a product or service is poor, the enterprises will not impose a high price to their competitors On the other hand, they can also change prices to compete

Step 5: Selecting a pricing method

There are three methods of valuation to be used:

First, price oriented costs: Two methods are commonly used:

- Full cost: Includes all related costs; however its shortcoming leads to an increase

in prices, in contrast to the solvency of potential customers

- Direct cost: Includes the costs that are likely to increase in case of increased

production to determine the lowest prices and increase profits in case of price reduction for the purpose of increasing sales during off-peak hours For example, the enterprise may reduce call and message charge from 23:00 pm to 6:00 am to attract more users