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0 Marketing
The right product, in the right place, at the right time, at the right price
Adcock
The process of planning and executing the conception, pricing, promotion and
distribution of ideas, goods, and services to create exchanges that satisfy that
satisfy individuals and organizational goals.
-Marketing,6th Edition by Lamb,Hair,Mc Daniel
What was in existence before the Marketing concept was the Selling concept
where the companies use to produce products and services according to the
company specifications and tried to find customers for these goods.
With the Marketing concept, the whole practice changed the other way where
companies began to do research and understand the different needs and
requirements of the customers and then developed products and services in order
to satisfy them. So the starting point was not the production house but the
customer him self.
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The best classic example is industry of car manufacturing where Henry Ford
believed that customers would but cars as long as they are black and he produced
T model cars with the same design and all in black colour. He ignored the
customers wants in seeking variety in design and colour of a car.
Japanese car manufacturers understood the gap and they researched on the
customer requirements. They introduced cars in different colours and designs.
And soon the market leadership was with Japanese car companies in no time even
today.
In conclusion, companies who are ignorant of their customers and who only
concentrates on the business priorities can no longer survive in today’s context.
Customers no longer want to use a product similar to their neighbors. They are
offered a variety of options to satisfy their needs by both local and international
companies to day. Introducing superior products where ordinary customers can
not by or hard selling no longer works in the current market conditions. So the
only way to survive is to change the business focus in satisfying customer needs.
Philosophy that assumes that a sale does not depend on an aggressive sales force
but rather on a customer’s decision to purchase a product.
Marketing,6th Edition by Lamb,Hair,Mc Daniel
Market orientation can be explained as the total set of activities that a firm does in
its strategies, operations, practices with keeping the market as the core. In other
words, all business activities will be focused on to the market and the customer
needs so that products and services of these firms will cater to these specific
needs.
This is the changing phase of the industries from product concept and selling
concept where the focus was not on the needs of the customer.
Market orientation believes that there is no reason why customers should buy one
organization’s offerings unless it is in some way better at serving the customers’
wants and needs than those offered by competing organizations.
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The best example would be the mobile phone industry in the whole world. Needs
of the target market have been well identified by the mobile phone manufacturers
and as a result, the mobile phones today do not simply used for oral
communication but caters are far greater set of wants such as entertainment,
verbal and visual communication, data storage, global connectivity, etc. People
were having such wants and were using different devises to satisfy each want.
Now all such requirements are catered by a single product. A mobile phone
manufacturer who do not cater to the needs of the market with such mobile phone
products will die in no time.
In the current context, a lot of companies have been able to do this with the use of
modern information communication technology. For example, a number of
supermarket chains in Sri Lanka, retail banks and hotels are practicing customer
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concept through online databases. As a result, at the point of closing a transaction
or checking in to a hotel, the management gets all the past transaction history and
purchase history of each client. This enables them to get closer to customers and
identify individual interests and thereby cater to the needs better.
Levis trousers is also practicing customer orientation and they have gone up to the
extent of doing tailor made Levis denims for customers.
Is the marketing approach that views the market as one big market with no
individual segments and thus requires a single marketing mix.
Marketing,6th Edition by Lamb,Hair,Mc Daniel
A company designs a single marketing mix and directs it at an entire market for a
particular product
Marketing, Basic Concepts and decisions by Pride/Ferrell
Mass marketing is where a company will concentrate on the whole broad market
with a particular product they sell. This mean that all the resources of the
company is invested in a single marketing mix. It is known as mass production,
mass communication, mass distribution, etc. The intension is to cost minimization.
The assumption is that the market has similar product needs and it can be catered
with a particular single marketing mix.
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This concept is not 100 practiced by any of the companies at today’s context.
However, the global powerful brand, Coke use to practice this strategy at a
broader scale with standardized product, bottle shape, advertising message, etc.
Further, the brand “Panadol” in Sri Lanka was also practicing this strategy with a
similar product to all levels of customers, similar prize, similar type of
advertising, etc. However , by now all these companies have understand the need
to customization in order to survive competition. As a result, even Coke and
Panadol have customized their marketing mix to a certain degree.
In conclusion, even though there are cost benefits as well as other benefits such as
better control over operations, there are negative factors as well. One of them is
that customers may not be fully satisfied with the mass offering and might shift to
a competitor product, which is more customized, and mass communications will
not appeal to all customers in the same level. Other factor is the risk involved in
concentrating all efforts on a single marketing mix. If a crisis happens that
particular marketing mix, it will lead to business closedown. So this concept is
evolving to mass customization now.
wikipedia
This is the customization of the marketing strategies to fit a certain segment of the
customers. The ultimate form makes the segment with just one person
wikipedia
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An example can be Levis jeans where they have started practicing customized
marketing to a level where now they produce Levis jeans to fit the exact
measurement of the customer. This is done through taking measurements of the
customers who makes the order and then tailoring it. Earlier, Levis use to have
jeans with specific waist sizes.
A particular definition cannot point out on the above topic since this is a set of
concepts that Dr. Philip Kotler has introduced. Further, these core concepts are
covered in this assignment individually.
These are a set of concepts, which would help to understand the concept of
marketing better. These concepts include customer needs, wants, demand and it
further goes to concepts like, segmentation, customer value, etc.
Needs are the basic human requirements. People need food, air, water, clothing,
and shelter to survive. People also have strong needs for creation, education, and
entertainment.
The above needs become Wants when they are directed to specific objects that
might satisfy the need. person needs food but may want a hamburger, French fries,
and a soft drink. A person in Mauritius needs food but may want a mango, rice,
lentils, and beans. Wants are shaped by one's society.
Demands are wants for specific products backed by an ability to pay. Many people
want a Mercedes; only a few are willing and able to buy one.
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In conclusion these core concepts helps to further elaborate the marketing concept.
In going through these it is evident that all of them are focused on analyzing
customer. Customer needs is the starting point in Marketing concept.
Defining a business in terms of goods and services rather than in terms of the
benefits that customers seek.
Marketing,6th Edition by Lamb,Hair,Mc Daniel
The best example is how Coca cola defined its business. , Coca Cola is not in the
business of selling soft drinks. If that’s the case their competitors will be other soft
drink manufacturers. The target market and potential is limited as well. However
for Coke, they are in the business of satisfying thirst. With such a broaden
thought, even water becomes the biggest competitor and Coke will start working
to see each and every person drinking Coke instead of water for thirst.
In conclusion, in today’s context, a company can not take business decisions with
the understanding that the companies who produce a similar product is the
competitor. The focus should not be on the proposition we offer to the market but
on the need the company expects to satisfy in the market. If a company produces a
lunch packet to satisfy hunger, the competitors will not limit to other producers
who market lunch packets, but it broadens from short eat marketers, biscuit
manufacturers, milk/dairy products, etc. This is due to the fact that all these
products try to satisfy the customer need of hunger,
8.0 Product
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A product is both favorable an unfavorable, that one receives in an exchange. It is
a complexity of tangible and intangible attributes including functional, social, and
psychological utilities or benefits.
Marketing,Basic Concepts and decisions by Pride/Ferrell
A product is anything that can be offered to a market that might satisfy a want or
need
wikipedia
Product can be anything from a physical thing like a car to a service like
transportation or even an experience like cinema. Or it can even be information
such as what you buy as a newspaper etc. The core is that is satisfies customer
need or a want.
9.0 Segmentation
Is the process of dividing a total market into market groups consisting of people
who have relatively similar product needs
Marketing, Basic Concepts and decisions by Pride/Ferrell
Any company would like to satisfy each and everyone’s needs and wants with a
product. However, as discussed earlier, customer wants, preferences, behavoiurs
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and thought processes are different to each other and will result in demanding for
different products and services.. But marketers do not have sufficient resources to
have such a wide variety and it will be too costly to purchase as well.
AS a result, Marketers try to find a set of people would at least have some
similarities in satisfying particular needs and wants. This is done by dividing the
total population into groups who would fall into particular similarities in nature.
They can me on demographic qualities such as gender, age, income etc or can also
be on personality, buying habits, etc.
As an example Old Spice can not produce a perfume which can be sold to both
men and women since the aroma preferences by males and female are different.
As a result, they segmented the market into Males and female. All females have
similar preferences on aroma in a broader perspective. So they cater only to men.
There are a number of factors in effective segmentation. They are a segment
should be,
Measurable
Substantial
Accessible
Differentiable
Actionable
10.0 Personality
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Is an internal structure of in which both experience and behavior are related in an
orderly way.
Marketing,Basic Concepts and decisions by Pride/Ferrell
The way a person would respond to a stimuli that they grasp through the 5
sensory organs are different. This is because their personality is different. It can
be due to many reasons such as education, learning, family influences, culture,
experiences, etc. These form the personality of a person.
These personalities can be extrovert where such pole will be out going
adventurous, etc. and Even be introverts where such people will be calm, slow
in work, silent, etc.
Marketers can use personality as a segmentation mechanism. Companies like
Nike have used it and communicate to the extroverts with their products who
like adventure. The tag line on Nike “ Just Do It” says it all.
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With environmental changes such as changes in customer taste, advancements in
technology etc, the demand for such products will be different. This result in
limited life time for such products well.
As an example, 5-6 years back, the most common and easiest method of data
transportation from a computer to another was the 3.5 inch diskette. However, in
such a short time, this has been overtaken by USB flash pen drives which are
virtually portable mini hard disks. This was a result of the invention of data
storage ability in computer chips rather than in magnetic metal disks. In modern
computer models, the diskette drive is not seen and its being replaced with a set
of USB drives. Diskettes life time ended because of the technology
obsolescence.
To conclude, the life time of most of the products marketed at present is short.
This is totally due to the technological advancements taking place so rapidly.
Computers, software, mobile phone designs, electronic appliances are some of
them with the highest risk of technological obsolescence. So companies need to
keep on doing innovations in order to at least sustain in the market even though
it is a costly affair. This is why companies like 3M has been able to sustain
technological obsolescence.
The concept which provides a way to trace the stages of a product’s acceptance,
from its introduction( birth) to its decline( death)
Marketing,6th Edition by Lamb,Hair,Mc Daniel
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Product Life Cycle is known as a very useful tool that is being used in different
occasions such as analysis and strategy decision stages. It describes different
characteristics that the product would have when it passes through each. Seeking
whether these characteristics mach with the nature of the product will help
marketers to identify which stage their product is in.
Further, there are different strategies marketing mix variations laid out in each
stage. So after understanding the stage of your product in the life cycle, the
company can follow strategy and Mix changes prescribed in the particular stage.
Example, Horlicks was reaching the end of its life cycle with demand for
alternative milk powders and milk products were in operation. One of the
strategies in the declining stage is to reposition the band. Horlicks did it in Sri
Lanka positioning it as an energy drink for children. The marketing mix was
changed accordingly. The bottle shape, cover got different, communication
mediums, message got different accordingly. With the relaunch, Horlicks was
able to re-grow the market as well
In conclusion, the product life cycle is both an analysis tool as well as a strategy
directional tool. This is because, with the PLC tool, companies can try to
understand the stage of the life cycle that its products are passing currently and
at the same time they can try out the strategies laid out in each stage.
13.0 Positioning
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and analyze what the available gaps in the customers mind are since positioning
will only be successful if the company can fill a gap.
Corporate social responsibility (CSR) is about how businesses align their values
and behaviour with the expectations and needs of stakeholders - not just
customers and investors, but also employees, suppliers, communities, regulators,
special interest groups and society as a whole. CSR describes a company's
commitment to be accountable to its stakeholders
www.csrnetwork.com/csr.asp
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With people becoming more and more educated and aware of their rights, they
become a force who would work against such companies who would have
negative impacts on their environments/ societies.
Understanding this trend, Companies started giving something back to the
environment/society for what they earn so they can minimize the negative
impacts. Corporate social Responsibility emerged due to this and it looks at
these efforts that are focused strategically and benefits the environment on a
longer term.
15.0 Generalization
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name in the same category, as well as a product with the same name in a
different category. To evince it with example, Wal Mart started as a organized
retail stores for multibrands. Once the brand was registered in the mind they
came up with private label for both parallel and un-parallel products and they
got similar response from the consumer as they got it for wal-mart stores. Or if
to take an example, Anchor in Sri Lanka has been an established well in the
industry of milk powder. Over the years it has become a well-known household
name and even used by consumers as a generic name for milk powder. With that
registration, Anchor went into the mild foods industry and launched Anchor
Yogurt, ready to drink milk with the same Anchor brand name. Consumers
would welcome the new products in different categories due to generalization of
the brand.
Further, ‘Me Too” products are also applying this concept where a new product
is launched in the same category with the close/ more similar brand name or
logo so customers would generalize and try the new product. In Sri Lanaka,
Local manufacturer of carbonated drinks launched My Cola brand in the Sri
Lankan market where the logo letter design, colour, etc were similar to Coca
Cola.
In conclusion, generalization is widely practiced in marketing as a way of easy
entry to markets when products are launched. However, the other side of this is
the impact of brand crisis. If an established brand faces a crisis and if it creates a
negative perception amongst the customers, the newly launched brand
extensions or even closely branded products will face the same negative
perception. Further, it can happen the other way round where if a newly
launched product with close branding fails in the market, it might have a
negative impact on the established brand as well.
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do not understand this need, they all will run out of business soon since fuel will
not be affordable by general public in time to come with these price increase
trends.
Another good example is the crisis faced by the export garments manufacturing
industry in Sri Lanka. The large customers such as Europe and US are taking
initiative to uplift the quotas given to Sri Lanka and Sri Lanka will have to
compete with low cost producers like China for these markets in the future.
Already companies like MAS has announced they are bringing down the
number of employees.
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Consumers perceptual space is the hypothetical geometric space in the
consumers mind where brands and products occupy in different places in that
space.
This means that how a consumer perceives a particular brand or a products and
conditions its benefit against competitors in his or her own mind. This has
nothing to do with the actual features of the product against its competitors, but
totally about how consumers perceive and record them in their minds.
For example, at present, if someone asks from a local person what are the
options that can satisfy the hunger in between meals( “ podi badaginna) almost
anyone would say its Munchi Super Cream Cracker as the first option. This is
how they have perceived the brand in their minds.
Another example can be the carbon pens. If a research is done amongst students,
and if they were asked a brand of the carbon pen that writes till the last ink drop,
most of them will say its “ Atlas Chooty”. This is how the brand has established
in the minds of the consumer.
In the above examples, Munchi Super cream cracker may not be a good solution
for satisfying hunger during the in between meals. And there may be better
options as well. But, that space in the consumer’s mind is already filled by the
Super Cream Cracker brand. This is why is is mentioned that it has nothing to
do with actual product offerings.
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In conclusion, Consumer Perceptual Space is a concept which arises in the area
of brand positioning. It discusses how a general consumer would perceive each
and every brand that he or she recalls against competitors. Analyzing perceptual
space of the target consumers is really important to any business since it enable
the companies to identify perceptual space gaps in the consumers mind and
there by can fill the brands with their brands.
There are number of initiatives taken by the responsible authorities on this, some
of them are the relationship building through the Sri Lankan ambassadors who
operate in all over the world. Further, hosting events like SAARC, international
cricket matches would take the message to the world in order to change negative
perceptions about the country.
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Repetition means the effect that repeated sensations grasped through a sensory
organs of a person, would have on the perceptions that he is going to have on
those particular objects.
In simpler terms, it means if a person getting the same sensation from an object
over a number of times, he or she would have a stronger recall as well as an
established perception on that particular object. This is highly used by marketers
in planning communications/advertising. Sensations of a customer would be
sight, smell, toughed feeling, noises heard and the taste. If a similar sensation is
focused at the customer over a number of times, the message establishment in
the mind will be stronger. One of the key elements that a logo attributes is this.
For example, the Coca Cola logo colours, lettering are similar and when ever a
person sees a soft drink bottle with a red background and the white lettering, he
perceives it as coca cola. This helps the particular brand to standout better in the
consumers mind.
Another example is in doing advertising campaigns, marketers try to do it in an
integrated approach where a single message is communicated from all the
mediums used. The music themes used in ads will be similar. So getting exposed
to the same message repeatedly will make that brand perception to be
established stronger in the consumers mind. Another example would be the TV
advertisements done for the soap brand Sunlight. The thematic music has been
the same in all Sunlight advertisement for all this time and when ever a person
hears the thematic music, the Sunlight becomes the top of the mind recall.
Further, in advertising, repetition concept is of vital importance since the
frequency of the advertisements should run ( the number of times) is dependant
on this repetition theory and it is assumed that the target audience should see a
TV advertisement at least 3 times a week for it to have a proper recall.
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Subjective reality is the reality seen through our inner mental filters that are
shaped by our past conditioning. Objective reality is how things really are.
www.ahalmaas.com/glossary/o/objective_reality.htm
These two concepts also fall within the broader concept of perception. The
definitions are self explanatory. Although it is possible to perceive objectively,
we cannot take in the totality of reality and say anything about it; we can only
point to some of its characteristics. So whenever we explore reality in any
specific manner, we have to leave out something. For example, when you
describe an orange, you cannot say anything about its totality. You have to talk
about its color or its taste or its shape. If you want your description to
encompass the whole thing -- its color, shape, and taste all together -- you can
only say, "orange."
In marketing communications, this is what the marketers trying to practice in
order to position their brands in the minds of the customer. When a customer
comes across the messages communicated through media, when they are
exposed to products, packaging, branding, etc, the customers will have a certain
perception about the product. It can be negative or positive. But marketers want
it to be positive. This is subjective reality since the customer has not tried it yet.
But the real product may be different to what the customers perceive it to be.
The best example would be the classic case of Coke. Major competitor of Coke
was Pepsi in Us, and through research, Coke found that Pepsi in bought by
consumers is because it is sweeter. Through blind tests, consumers preferred
Pepsi over Coke. So Coke changed its flavour and introduced a sweeter flavour
with slight changes to marketing mix. The new sweeter Coke was rejected by
consumers and they rampaged asking for the original Coke. The insight is that
even though that consumers were happy with a less carbonated drink ( even they
prefer to have sweeter drinks) as long as it was Coke.
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