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• 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
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 group 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 The 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 Some 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 nonexistent 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 13-14 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) • 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, because 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 HENEIKEN 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 ways of communication to influence consumers’ 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 communications planning A concept of marketing communications planning recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication 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 For the effective management of IMC, businesses need to understand roles and objectives of the IMC as well as positive points, limitations and budget allocation of marketing tools to use accordingly and effectively conditions as well as target customers of businesses As we all know, the ultimate goal of marketing communications is to influence consumers Here are some typical steps leading to the purchase: • Building customer awareness about products For example, recently, commercials of OTIV product have appeared often on TV; this product is imported from the U.S, but little known in Vietnam • Providing information about features of the product or service to customers For example, advertising provides information of products "OTIV is a functional food Its uses are to help anti-aging nerve cells and preventing cerebral vascular accident” • Creating a positive impression to customers from benefits of the product For example, “OTIV Product helps reduce stress and the risk of stroke, bring more positive life." • Achieving favorable position in the customer's mind For example, "The product is very easy to use, convenient at anytime, anywhere for customers." • Creating an attention to purchase If done well, it will create an attention and lead to the purchase decision of customers "I have amnesia, headache due to ischemia and I will buy the product for trial " • Carry out the transactions to make potential customers become real and familiar customers For example, "Our products are very effective, so I decided to use this product in a long term” Such, an enterprises using IMC must have a specific plan and clear commitment to comply with what they set up, the message will be used consistently and could bring the desired results for their campaign For example, Pepsi Company has been very successful in linking their online and offline marketing efforts In 2001, Pepsi and Yahoo! after combining the sales campaign was increased 05% to the cost of one fifth compared with the campaigns of the previous message Pepsi splashed Yahoo's logo on 1.5 billion cans while Yahoo put up a co- branded website PepsiStuff.com that allowed consumers to collect bottle-cap points (Marketing communication design & management –MBA Nguyen Van Dung-2010 & p.67) In short, Modern marketing not only calls for more than just developing a good product, pricing it attractively, and making it available to target customers but Companies must also communicate with their customers and there should be controlled direction to those communications 5 Explain "Direct marketing" and its applicability with example Nowadays, the development of information technology systems and communications has opened up new horizons for Marketing, in which direct marketing is growing This method helps businesses use many ways to communicate directly with customers Since then, businesses measure customer’s responses to timely adjust their activities in order to satisfy the needs of target customers Direct marketing is an interactive system of marketing, which uses one or more direct advertising media (direct mail, catalogs, telemarketing, and e-purchasing, etc.) to affect a measurable response and/or transaction at any location Today, many businesses use direct marketing to build long-term relationships with customers For example, the supermarket chain Co.opmart set up its clientele, VIP clients and often send birthday gifts to customers Outstanding features of Direct marketing is a direct interaction with customers and emphasis on the positive feedback so that can track and measure customer On the form of direct marketing: because each product will cater to a specific target customer, different businesses will choose an appropriate form of direct marketing to influence their target customers There are some common forms of Direct marketing today That is: • Direct Mail is a form of direct mail by post to the customer in order to offer, inform For example, THIBIDI Electrical Equipment Joint Stock Company gives offer of transformers, power cables, or Bao Viet Company sends mail of product introduction, etc • Email marketing, SMS marketing is the form of letter sent via email or SMS to the customer For example, a real estate company introduced the product of houses, or master's programs, services of selling nice SIM, etc • Catalog marketing is a form that a company sent catalogs with a full line of products to their customers This form is usually found in Nguyen Kim Supermarket Center, KFC and LOTTERIA fast food brand • Telemarketing is a form of direct phone used to attract potential customers or conduct commercial transactions such as direct selling, receiving orders or customer care activities For example, bookstores call for the introduction of books, publications, new magazines, or HYUNDAI, TOYOTA Motor Corporation calls for customer care service to convince customers buy their products • Door to Door Leaflet Marketing is products and services brought to consumers in person such as daily food, lunch serving at home, at the office or brochures introducing new products • Couponing is the form of media used to get feedback from readers with cutting out coupons for a discount in exchange for money or gifts For example, products of the Khan Quang Do, Nhi Dong newspaper or Co.opmart • Direct selling is the marketing of products to customers through face-to-face sales by salespeople, exposure and direct sales to customers For example, trade fairs, supermarket system, shops Applications of Direct Marketing: In recent years, direct marketing has flourished and become a key marketing tool because it is the integration of all 3 forms: Advertising, sales promotion and direct sales Direct marketing is currently used by many businessmen in their business operations Compared to other marketing tools, direct marketing targeted directly to customers in the best way to impress the most attentive care With Direct marketing, the communicative interaction between businesses and customers is heightened maximum, so enterprises are fairly easy to grasp customer needs On the other hand, Direct marketing also easily combine the power of promotion mix, helping save marketing budget and easily measure the effectiveness Direct marketing provides many benefits for both customers and businesses For customers, it provides much information about issues that customers concern, saves time of purchase, reduces travel costs, and overcomes the spatial obstacles but still selects the best product For businesses, Direct marketing helps search for the real orders of each item, gets more information about a customer as quickly as possible and aims at targets with high media efficiency and low cost Besides, it could ensure the privacy and "invisible" capability before competitors Advantages of Direct marketing are the measurable ability to the response of target customers, thereby helping enterprises evaluate the effectiveness of each direct marketing program in order to get appropriate policies to apply for each customer group, each product category as well as each market area At the same time, Direct marketing helps effectively use most of existing resources of enterprises However, Direct marketing has some disadvantages Firstly, enterprises must initially invest for the construction of databases, physical conditions and human resources Secondly, not in any conditions, Direct marketing is also customers received such as SMS, email, internet, phone, etc., that could cause confusion, inconvenience and loss of business image For example, a milk product for old people is sent by promotional emails to a student, a shower cream product for women is sent to boys, or an SMS advertising messages is sent right to your lunch break, etc Thirdly, housewives are often based on personal experiences to buy products after product consumption Therefore, Direct marketing cannot effectively promote all In Vietnam, the economic growth is relatively stable, the Internet is becoming increasingly familiar to people, e-commerce develops quickly and the accessibility and shopping to new forms of customer increasingly grow, so Direct marketing have been developing favorably and many companies have successfully applied this form of marketing For example, Savills Vietnam Company is the largest real estate consulting firm in Vietnam (directly under Savills UK) Savills Company has been quite successful when they established a telemarketing team to collect data base of target customers effectively, or Vinamilk Company in Vietnam has implemented direct marketing through distribution channels such as: agents and Supermarkets Customer care and feedback of Vinamilk is done through a separate Web page (www.vinamilk.com.vn) and here, customers may give feedback about the product and will receive a response from the company, or many other enterprises successfully applied this form of marketing such as: Prudential, AIA, Bao Viet Insurance Company; brokerage service companies on training, study abroad such as RMIT, VAS; cosmetics companies such as L'Ovite, Avon, and Oriflamme, etc In short, the development of rich and diversified business forms, changes in customer behavior have created new trends in the application of enterprise’s marketing In the context of information technology and communication channels develop strongly and the traditional forms of marketing show costly and less effective, Direct marketing has become remarkable With the goal is to establish, maintain and develop relationships directly with customers through mass media such as direct mail or catalogs, phone, referrals and direct selling, etc., Direct marketing has brought many successes to businesses Therefore, Direct marketing is a trend used by enterprises in Vietnam and in the world III CONCLUSION Marketing Management are essential activities for every corporates It is one of the business strategies and it decides the success or failure of enterprises Thus, the companies must respect this activity, and the leaders should exactly understand the concepts of marketing to apply to their business activities References -http://www.luatminhkhue.vn -Marketing communication design & management –MBA Nguyen Van Dung-2010