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The Social Marketing Concept Trang 3 The Social Marketing Concept supposes that the task of the business is toidentify the needs, desires and interests of target markets and to deliver
Topic2 : MARKETING MANAGEMENT Answer any FIVE questions All questions carry equal marks 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 Explain market segmentation with suitable examples 4 “PLC as a tool for marketing strategy" justify 5 Explain process of selecting the final price 6 “Advertising forces people to buy goods that they do not want" Elucidate 7 Explain the process of integrated Marketing communication 8 Explain “direct marketing" and its applicability with examples CONTENT I QUESTION 1: I.1 Explain the following: (a) Production concept (b) Social marketing concept A – Introduction Marketing Management is a very important process in the business plan of an enterprise - the process of analysis, planning, implementation , checking the implementation of the measures to maintain , provide selected buyers with beneficial discussions to achieve the tasks identified by the enterprise such as expanding information, increasing sales and profit to reach the goals of the business 1 Formed in the mid-1950s , marketing philosophy was rapidly accepted and its dominant ideology has become one of the cornerstones of the modern business philosophy One of five basic philosophies guiding the enterprises to implement their marketing activities is: The production concept and Social marketing concept B - Body a The Production concept http://www.dankinhte.vn/cac-triet-ly-quan-tri-marketing-marketing- management-philosophies/ The production concept alleges that consumers will favor products that are available for use and widely distributed at low price Thus, marketing management should focus on boosting manufacturing and distributing products The notion that consumers pay attention to the availability and low price of the product isexplained by two following reasons: - First, when demand for a product exceeds the supply, the buyer will be more interested in getting products for consumption rather than focus on the subtle attributes of product quality Therefore, manufacturers will focus on increasing the scale of production with the desire to increase sales volume and profitability Second, the high production costs need to be cut down, the businesses seeks ways to increase production in order to achieve economic efficiency and hence also expand the market Example : Henry Ford - Founder of Ford Motor Corporation - was one of the first businessmen to apply philosophy of production Since 1900s, he has improved production methods to save production costs, increasing labor productivity and output and has created cars with low prices for customers to buy more and more cars b The Social Marketing Concept The Social Marketing Concept is not only to bring satisfaction but also to ensure that the social benefits to customers 2 The Social Marketing Concept supposes that the task of the business is to identify the needs, desires and interests of target markets and to deliver products / services to satisfy customers’ needs more effectively than their competitors do At the same time, the enterprise ought to preserve or enhance the welfare of consumers and society This is almost a further step than the marketing concept, because it is believed that only the satisfaction of consumers is not enough, but also the focus on protecting the interests of the whole society Before, the business mainly based on profit when constructing the marketing decisions, but now satisfying customers’needs and perceptions of the importance of the social benefits have been emphasized more and more As a result, marketing activities would be significantly better with the longer-term benefits B - Conclusion The choice of a particular marketing philosophy in practice marketing management depends on a lot of factors : the competitive position of the business, features of products and services , target market needs , abilities of the marketing team of business , etc It is important that the implementation of its marketing philosophy should provide maximum satisfaction to clients , contribute to the achievement of business goals and not damage the benefits of society I.2 – Explain the following: (c) Product line (d) Augmented product A - Introduction The lifeblood of your business is the products or services which your company is selling Business strategies of a company are not only the way products, product lines are made or the way to find out users who are suitable for them but also the way products are effectively used by target customers B - Body c The product line 3 The product line is a group of series of different products which are similar in structures, features, sizes, applications for customers to become familiar with For example: There is a wide range of mobile phones in the market, so make the customers to be more familiar with them, manufacturers release different product lines such as: Iphone 4S, Samsung Galaxy S4, HTC J one, Sony Xperia Z, Nokia Lumina 1520 d Augmented product Additional values are considered as an active factor which influences customers to decide which products to buy They are an integral part of augmented products and include: - Warranty : In case of defects, the seller ensures to replace with a new product, repairs if possible or makes a refund to the customers - Insurance: Providing the maintenance services to the customers after the insurance expiration by repairing or replacing some certain accessories - Customer service: Include additional services such as use instructions, consultancy via phone or website - Additional values: Add some product applications which can make the product easier to be used: augment laptops with carry bag, present mobile phone screen cover or enhance the function ( mobile keyboard for PDA) - Accessibility: Provide the products to the customers promptly such as the availability if necessary, prompt delivery at the customers’ convenience C - Conclusion 4 Product strategies play the significant role in marketing strategies of a company They are also regarded as a kind of sharp weapons in the market competition The key to the success of an enterprise is its own products Determining appropriate product strategies is the decisive factor to the survival of a company, which can help the company to provide satisfying products and services to the target customers II QUESTION 3: Explain market segmentation with suitable examples A - Introduction - Today, businesses face many competitors in the market Each of these businesses typically has one or two particular strengths to meet the needs of their customers When a business identifies good market segments for their products, they will control the competition of rivals and gradually master the market B - Body Market segment is dividing the market into different groups of buyers with various needs In marketing, we divide the market to satisfy the needs of every segment, because each customer group has different characteristics, preferences, purchasing habits, in other words, different market segment is an activity determining the general characteristics of a group of customers in a market, such as: - Group of customers based on their motivation to purchase - Group based on customer needs and their buying behavior - Group of customers based on the determinants that they set out to purchase goods, supplies of selected products and services A market segment (market segment) consists of a group of customers with the same needs, desires, preferences, and similar buying habits The task of marketers is to determine the number and nature of suitable market segments and determine the target market segments Here are the basic principles of market segments: 5 - Geographics segment: the market segmentation according to customers’ geographical location such as city, province, region, nation, abroad eg customer segmentation of using a smart phone in Ho Chi Minh City, Hanoi has a higher rate than the other provinces or cities in the country - Demographics segment: statistics by individual characteristics including gender, age, income, education, occupation, ethnicity, religion eg customer segmentation of using mobile phones in Vietnamese market based on age and income: customer segmentation of using smart phones is mostly young people or those with high incomes; - Psychographics segments: research customers in society, lifestyle and psychological characteristics including attitudes, values, style For example, customer segment of using smart phones on the extent of use: much, less, average; just as there are 01 phone users; 02 or 03 phone users at the same time There are people who almost never use mobile phones - Product benefits: segmentation characteristics of the product benefits For example, users of Apple smart phones have a higher rate than users of phone company LG - The fact is, many brands having not focused on a specific customer segment have failed miserably Miss Saigon, for example, having launched a new product Delux Miss Saigon with the same level as CK, Channel failed These patrons will not accept its perfume at high price, high-income people will not spend perfume brand because the brand Miss Saigon "Miss Saigon" was reminiscent to "cheap perfume" , the company should have given a completely different name for the product and should not have added the old name Miss Saigon to the new product C Conclusion Market segmentation of the business ensures the business more secure because it helps businesses focus their efforts on the right target market, builds a style of its own business, a separate image to exploit the inherent ability of the business effectively For successful marketing activities, businesses need to identify and satisfy the appropriate market segment III QUESTION 4: “PLC as a tool for marketing strategy" justify 6 A - Introduction Product life cycle: the development stages of the product over time Product life cycle includes four stages: introduction, growth, saturation and degradation Businesses need to be aware of their products in which stage to have appropriate marketing plan: bring products to market, renew or replace old products with new product lines Typically Product Life Cycle is indicated by the following chart: 1 Introduction stage: This is the initial phase, customers do not know or do not know much about the product, so businesses pay a lot of money to introduce and advertise products on the market To enter the market, companies must build one wide consumption system around through the various intermediate and then to retailers When penetrating the market of the product, price should be lower than the price of the product of the same type on the market to attract customers, to increase sales and expand market section However, if businesses implement pricing strategies, product positioning error would create the risk of reducing the value of the product If the market size is too small,it will be impossible to have good sales Then businesses must rethink marketing strategies accordingly Target customers who are 7 interested in exploring and experimenting always want to be the first to use the product For example: In the late 1970s, Apple, Atari, PET, Radio Shack, and other pioneers were both interested in the creation of the personal computer market and promoted their particular products The increasing awareness and interest in the personal computer was good for all competitors When giant IBM jumped into the market in 1981, people were overjoyed because the involvement of IBM brought their products legitimacy and attracted more customers 2.Growth stage: This is the stage when the Company's products have the confidence of customers and the amount of goods sold has been growing increasingly, reducing costs and product prices significantly Therefore, sales and profits soar , market sections are spreading The basic objective of this phase is to penetrate new markets or new market segments which are available At the same time the company constantly strengthen and perfect the quality and features of the products which are welcomed by the customers Prices at this stage can remain or may apply promotional measures if the company has achieved high sales and profits, and offset the costs of the previous period 3.Maturity stage: It is the stage when the volume of goods sold has peaked and cannot rise further The phenomenon of stagnation in the distribution channel begins to appear Revenue decreases due to the presence of many competitors There is loss of market share or products are no longer fit for human consumption At this stage, enterprises need to deploy marketing strategies for new products or for the lifetime of the alternative product line At this stage, the company will have to reduce the selling price to the maximum possible extent to promote the consumption of backlog goods In addition, the company needs to improve the quality of the product and the packaging or label to revive the reputation of the product, enhance advertising and more services 4 Decline stage: This is the stage when goods sold were seriously impaired Products have become too familiar and not so attractive to consumers Customers appear to be bored and psychologically want more new products and more features 8 Purchasing power has plummeted which makes the cost of sales higher Market share and profitability are significantly reduced and there may be bankruptcy Now the company should improve products, lower prices, enhance advertising services to attract customers in the lower segment ; or ought to cease production at this item decisively and have a plan to roll out new product strategy in the style of promoting the legacy continues The following table shows the stages in the life cycle of the product and the features associated with marketing requirements and their effectiveness C - Conclusion The marketing strategy is to identify what the market needs, is based on the formation and development of products The task of marketing is to understand market needs, creating products that satisfy the needs and promote the development of products to expand markets, increase profits of businesses Marketers must properly identify each stage of the product lifecycle to develop the appropriate marketing strategies and prevent products from falling into recession phase through appropriate transition measures by launching by new products at the right time to replace with more advantages, attracting the best target customers, for the purpose of maximizing profits IV QUESTION 5: Explain process of selecting the final price A - Introduction Price is the monetary expression of the value of goods / products or services Price is the main factor affecting the purchase decision of the customer Determining the price of how to make the product or service in the process of circulation on the market being able to attract customers as well as bring high profits for enterprises is the most important goal B - Body 9 I Valuation Enterprises must establish a price when first developing a new product The introduction of a product into a new distribution channel or new geographic areas expresses as follows : 1 Identify target market segments for products or services , with expectations to achieve and how to deliver products or services to access it 2 Setting up prices for consumers of the target market segment 3 Checking price ( and cost if possible ) of the actual or potential competitors 4 Checking price range from different levels of quality or product delivery methods 5 Identify possible profit at each price 6 If low profits , need to change the specifications of products to reduce the cost to generate the desired profit II The order of setting pricing policies 1) Selecting the Pricing Objective This is the most important step The clearer the purpose is, the easier the setting prices is Five major objectives through pricing is: The survival of the enterprise, the maximum profit , maximum market share, maximum market surf and product quality management Businesses use price as a strategic tool to achieve their goals The pricing for products is initiated by identifying targets Each target requires different prices, which should be based on strategic products were selected in each period for implementation Example: Samsung is one of the firms having extensive experience surfing market They sell their products at high price when making a high technology product market segments for target customer who have lots of money When the purchasing power in this segment declines they apply discount policy to attract buying in lower market segments 2 ) Determining the demand 10 Identifying the needs of the product in the target market valuations is the next step Each price level will create different needs So the business must determine the needs of the business product in the target market Besides, the need for changes to make the price different is expected Since then, the demand graphs Furthermore, there needs to determine the elasticity of demand for the product price To determine the elasticity, there are the following methods: - The method is based on the experience of the relationship between price and demand in different markets - Methods of sample surveys, conducted interviews with the customers in the target market: + Survey of customers’ attitudes towards prices, selected products, purchase price + Survey of possibility of customers’ acceptance for the expected price + Value experiment: In some cases, businesses can sell products in a comparable geographic area but in different prices 3 ) Estimating costs Costs of products include: production cost, distribution cost and sale of products (including the favorable and risky factors) This cost depends on each different production levels Market demand decides the maximum price that the enterprise can sell their products The minimum price depends on the cost of business In this step, there must be determination for the cost of products such as : the fixed cost , variable cost and total cost The enterprise should try to analyze the costs incurred in the manufacturing process, operational costs for product delivery , detailed charges for marketing and sales support - When determining the cost of production, the business has to make a breakeven analysis This is the basis for determining and selecting appropriate price and selecting the minimum selling to each different sales to reach break-even point 4 ) Analyzing competitor 's Costs, prices and offers 11 This is an important factor in setting prices Consumers usually price products basing on the price and quality of equivalent products Therefore, businesses need to know the price of competitors by sending employees to make price survey, price comparison on the similar products by looking into the unit price list of the competitors Interviews on customers can lead to a source of information about the price and quality of goods of competitors Businesses can use the knowledge of competitive price and product as a starting point to form the price for their products If their products are similar to the ones of competing businesses, pricing must be close to the price of competing products, and lower -quality products cannot be priced higher For the higher price, the enterprise must ensure the higher quality of their products In fact, businesses use price to position their products as compared to the prices of competitors 5 ) Selecting a pricing method Knowing the demand curve, the total estimated cost and pricing of competitors the enterprise may now choose the product price When choosing product prices, the enterprise has to rely on: - The demand curve - The cost - The price of Competitors: Based on price competed in the market , the price can equal , more than, or less than the one of competitors In case of higher pricing, enterprises need to control the delivery schedule or quality of service to justify a higher selling price Buyers will choose the provider that has the lowest cost through bidding 6) Selecting the Final Price To select the final price for the product, enterprises ought to consider adding some following bases: - Psychology of accepting rates of customers - Pricing policies of the enterprise - The price influence on distributors, sellers and policies of the state - The price impact for the product category trading 12 - Company policy and the impact, the impact on market prices C- Conclusion Buyers are always concerned about the price of the products relating to their expectation, their satisfaction or utility given by products The process of determining the price aims at going up price in each time to launch products or services into the market most beneficially Achieving the goals of the business, which attracts the target customers of each phase and getting optimal profit in the long term contribute to business development With the six steps above, depending on the specific conditions that businesses should be prioritized for some appropriate steps to achieve these goals most effectively V QUESTION 8: Explain " direct marketing " and its Applicability with examples A – Introduction The concept of direct marketing is used in business operations to establish , maintain and develop relationships with potential customers through a variety of means such as letters enclosed brochures or catalogs , electric telephone , advertising email, email,recommendation message , and direct selling via the media ( TV , radio and Internet ) Thanks to the quick recognition of feedback , businesses wanting to sell products will synthesize demanding requirements on products or identify , evaluate responsive levels from customers to have appropriate marketing policies B - Body 1 Benefit of direct marketing: a Direct marketing gives many benefits to the customers, such as: - Save time For example: customers may understand more about products and service without spending time to meet the salesmen - Be convenient For instant: customers can stay at home and can buy products They can receive gifs without going out 13 b Direct marketing also gives many benefits to the sellers - Possibility of choosing potential customers - Build continual relationships with each customer - Change the way how to advertise (price policy, product strategy…) - Competitors don’t know the company strategy for the customers 2 Goal of the Direct marketing The main aim of Direct marketing is to attract potential customers to buy products immediately Besides, Direct marketing also impacts on customer’s intention to buying products It gives guiding information to customers for the next purchase and creates opportunities for the salesmen 3 Some ways of Direct marketing: - Catalog marketing: provide detail information about typical features of product, sample collection, hotline telephone number, some promotion such as give gifts or discount… - Direct – mail marketing: email advertisement - Tele-Marketing: use no free phone number to order This is also the most popular and major way of direct marketing - Direct marketing on multimedia such as: T.V, newspapers and magazines - Door to door leaflet marketing: is commonly used in fast food industries - Direct selling: is face to face between the salesmen and the customers 4 The 6 substantial factors for success of Direct marketing: 1 Database: Based on the customer background: name, address, age, sex, job, social position, telephone number and email, shopping product or service 2 Offer: Polite requests relating to price, benefit and bonus to the customer 3 Creative: offering goods, create an impression on the customer by using pictures, writing styles, printing technique 4 Media: email, internet, message on telephone, phone-calls 14 5 Organizing: organizing performance according to the plan on the agenda Organizing must be considered the most important factor leading to the success 6 Customer service and call center: is used to deal with the troubles happening in business with customers For examples: Most supermarkets use door to door leaflet marketing or catalog- marketing Electronic-households appliance supermarkets take advantage of offering and customer services Telephone companies give SMS on their discount Restaurants, hotels and tourist agencies exploit the internet to advertise their service promotion C – Conclusion The purpose of marketing is generally done for target customers to know target marketing products , the benefits satisfying the needs of buyers, to express creativity and the unique of products for sale in the value of both material and non-material Thus, the business needs to approach each type of products or service into the market through diversity as Direct Marketing Direct marketing , as any part of the sales and mix marketing , not a magic wand to be suitable for all products and services Each type of products, service or brand has its own characteristics Each business or business manager has different business goals Therefore, to succeed in direct marketing , the management should not be limited in a framework as a major selling means but needs to take advantage of its full potential as a branding mechanism To take advantage of the full value of direct marketing , the enterprise should approach the structure combining diverse requirements, smart hints of customers with policies and marketing target properly By doing so , businesses will assert its brand and could sell more products or services REFERENCES 15 - Vu, The Phu (1938-2006), Basic marketing, thuvien.ou.edu.vn - www.marketingchienluoc.co./market segment - Thieu, Kim Trong.wordpress.com/…/marketing – truc tiep 16