jaynil

MARKETINGIntroduction

Private limited company: Tesco

Choosing Tesco as the company for my course work the reason of choosing Tesco is very well company in U.K. Tesco's Ownership which is owned by several partners, Tesco is owned by thousands of people. This is because Tesco is a public limited company or Plc. The reason for Tesco being a Plc is because of its mammoth size. Due to its size it would be hard to raise enough funds for Tesco if it was owned by a sole trader or by partners whereas in a Plc (like Tesco) the company is owned by shareholders who fund the company. This happens by the people buying shares in the company and becoming shareholders. Sometimes this may seem more appealing to the people investing in a company as they have the luxury of having limited liability. Limited liability is where if the business goes bankrupt the people only lose whatever they invested in the business this is common with Plc's, Ltd's (Private limited company) Unlimited liability applies to soul traders and partnerships if one of these went bankrupt they could lose all their personal assets over it and the money they put into it.Task 1:

Marketing is traditionally the means by which an organization communicates to, connects with, and engages its target audience to convey the value of and ultimately sell its products and services. However, since the emergence of digital media, in particular social media and technology innovations, it has increasingly become more about companies building deeper, more meaningful and lasting relationships with the people that they want to buy their products and services. The ever-increasingly fragmented world of media complicates marketers ability connect and, at the same, time presents incredible opportunity to forge new territory.

Marketing Process for tesco:

TESCO is top leading retailer in UK. It manages over a thousand supermarkets, hypermarkets, and convenience store in the United Kingdom, Ireland, central Europe, and Asia. TESCO started life in 1919 when Jack Cohen started surplus groceries from a stall in the East end of London. MR Cohen made profit of 1 from sales of 4 on his first day. TESCO brand first appear five years after in 1942 when he bought shipment of tea from a MR T. E Stockwell. From that time TESCO slowly improve in retail business and now they are take top position in UK retail business. Tesco aim is provide best products for their customer and make sure about customer requirements. (Dave, 1999). Main Characteristics of MarketingThere are four main characteristics of marketing oriented organization:

1. Production Orientation: This is organizational or values where competitive advantage is attained through increase productivity or volume. It's a traditional orientation that exists in the Henry ford era. In modern times this is practiced in compliment with other orientations.

2. Product Orientation: An organizational culture where competitive advantage gained through the creation of product leadership (high quality features) becomes the sole objective of a business.

3. Sales orientations: An organizational culture where competitive advantage attainted through the creation of superior sales force to generate adequate sales becomes the objectives of a business. Carphone warehouse attained its objectives through telemarketing.

4. Marketing Orientations: An organizational culture where beating competition through the creation of superior customer value is the paramount objective throughout the business

Key elements of market orientation

1. Customer orientation: Understanding customer well enough to create superior value for them.

2. Long term profit focus: Having this as strategic focus business objective.

3. Interfunctional coordination: Mobilising all company resource to create value for target customer.

4. Competitor orientation: Awareness of the short and long term capabilities of competitors.

5. Organizational Culture: Management and employee behavior to focus on customer satisfactions a value.

Benefits of marketing approach

High customer satisfaction, loyalty and retention

Increase sales and market share

Growth in profitability

Enhanced competitive advantage

Improved corporate image

Cost of marketing approach

Increasing customer expectations

Staff training and development needs

Technology requirement for customer contact and improved ways of doing business

Increase resource demand to providing customer specific marketing

Complex customer growing needs and power

Market orientation assessmentCustomer orientation (Dave, 1999). Regular collection of information on customer needs

Customer focus corporate policies and objectives

Regular customer satisfaction review and improved service levels

Responsiveness to customer needs

Market offers reflecting the various needs of distinct segments

Competitor orientation

Regular collection of information on competitor activities

Responsiveness to competitor actions

Bench marking on competitor offering

Differentiating on the basis of customer needs

Market segmentation criteria

In addition to having different needs, for segments to be practical they should be evaluated against the following criteria:

Identifiable: the differentiating attributes of the segments must be measurable so that they can be identified

Accessible: the segments must be reachable through communication and distribution channels.

Substantial: the segments should be sufficiently large to justify the resource required to target them.

Unique needs: to justify separate offerings, the segments must respond differently to the different marketing mixes.

Durable: the segments should be relatively stable to minimize the cost of frequent changes.

A good market segmentation will result in segment that are internally homogenous and externally heterogeneous, that is, as similar as possible within the segment, and as different as possible between segments.

Base for Segmentation in consumer markets:

Consumer markets can be segmented on the following customer characteristics:

1. Geographic

2. Demographic

3. Psychographic

4. Behavioralistic

Targeting StrategyThere are several different target-market strategies that may be followed. Targeting strategies usually can be categorized as one of the following:

Single-segment: strategy - also known as a concentrated strategy. One market segment (not the entire market) is served with one marketing mix. A single-segment approach often is the strategy of choice for smaller companies with limited resources.

Selective specialization: this is a multiple-segment strategy, also known as a differentiated strategy. Different marketing mixes are offered to different segments.

Product specialization: the firm specializes in serving a particular product and tailors it to different market segments. (Charles, Joseph and McDaniel, 2011) Market specialization: the firm specializes in serving a particular market segment and offers that segment an array of different products.

Full market coverage: the firm attempts to serve the entire market. This coverage can be achieved by means of either a mass market strategy in which a single undifferentiated marketing mix is offered to the entire market, or by a differentiated strategy in which a separate marketing mix is offered to each segment.

This all factor effects on TESCO marketing operation because customer is now king and every business have to make sure about there needs. For example in local market means UK TESCO can sale pork but in Asian market it is not possible to sale pork in every place. Organization duty to make sure about customer requirements and also maintain there cultural and social wants (Charles, Joseph and McDaniel, 2011)Affects of buyer behavior

One of the most important parts of marketing is buyer or customer behavior. Because of that TESCO must understand why a customer or buyer makes a purchase. Without such an understanding it is hard for TESCO to respond customer's needs and wants.

"According to Peter Clark, co-editor of the Wise Market and co-author of the loyalty Guide reports series," there are six major factors that play key roles in influencing the loyalty and commitment of customer: (Charles, Joseph and McDaniel, 2011)http://www.thewisemarketer.com/news/read.asp?lc=w29860tx2320zs(access-05-01-2010)

This six factors working when every customer goes to buy something. There for TESCO contain to this factor. Because of customer different needs TESCO has focus to maintain what they want and it also depend on different buying situation.

There are two main factors that influence a purchase:

1. Cultural factor: Cultural factors have a significant impact on customer behavior. Culture is the most basic cause of person's wants and behavior. Growing up, children learn basic values, perception, and wants from the family and other important groups.

2. Social factor: A customer buying behavior is also influenced by social factors, such as the groups to which the customer belongs and social status.

This all factor effects on TESCO marketing operation because customer is now king and every business have to make sure about there needs. For example in local market means UK TESCO can sale pork but in Asian market it is not possible to sale pork in every place. Organization duty to make sure about customer requirements and also maintain there cultural and social wants.

Marketing Mix

The concept of a marketing mix is best described by (1990, 43) claiming that is "the set of controllable marketing variables that the firm blends to produce the response it wants in the target market" it is compose of 4ps: product, price, place, and promotion. In the context of TESCO, their entry to the Chiness market should significantly adapt to the culture of the consumer in the said location. However, the company should take into keep in mind the basic standards to which their company adheres to. (Charles, Joseph and McDaniel, 2011)A. Product: The management of TESCO should set off product development strategies once they have taken control of their shop in China by marketing their existing products, exporting products in different province of the country and in so doing pressing forward on the possible opportunities of boosting the company's market penetration and market share. Tesco should consider restoring or revising models of their product to provide the Chiness customers what they want and what they need. In this way Tesco could develop the store's own brand product which could be marketed strategically within the territory of china.

B. Price: Looking at the situation of Tesco, one way that it could acquire cost advantage is by enhancing process efficiency, expanding exclusive contact to a large supplier of lower cost materials, or steering clear of several costs in general. If rival organizations in the country are incapable to lower their costs by a comparable quantity, Tesco will be capable of sustaining a competitive anchored cost leadership. (Charles, Joseph and McDaniel, 2011)C. Place: To develop its success in its retail operations, the Tesco should make multi-million pound investments in store expansion in low-income districts and localities. By getting involved with similar-minded public and private sector groups like local community based associations, colleges, and chambers of commerce, the Tesco will be able to open sites in economically disadvantage districts in china. Targeting these areas will enable the company to gain of local luminaries and gain favor from the local government by providing employment to the locals.

D. Promotion: The Tesco's approach should constitute a long-standing strategic plan that centers on generation value to expand the loyalty of their customer which takes account of preserving a well-built central Chinese business, to be as strapping in non-food as food product and services, to develop globally and to set the ball rolling on retailing services like on-line shopping. (Charles, Joseph and McDaniel, 2011)The bottom-line is that object of the marketing mix is to satisfy the customer and in this analysis we can see place play most important roll in china situation. Because of that Tesco not catch that much success like UK or other place. Other hand tesco product price is contribute to get success of Tesco and for that in UK Tesco is a number one retail company. Different between domestic and international market

There are eight main factors which is play the key roles to different between domestic and international market. The factor is below:

1. Market size

2. Market rate of growth

3. Government regulation

4. Economic and political factor

5. Market share

6. Product fit

7. Contribution margin

8. Market support (BPP, 2010)These are the key factor which is making different in global and domestic market. For example: In the case of Tesco, Malaysia, economic development condition, food supply chains are being rationalized according to more complicated major retail and food service consumers who wants to make business with fewer, larger, better-resourced manufacturers, suppliers and farmers. Therefore, power is polarizing the global retail industry. However Tesco has a long term business strategy in order increase profits, the company has three different dimensions in their strategies, and these are: corporate, functional and global or international. In this example we can see that how and why international marketing operation of Tesco deferent from domestic market operation. (BPP, 2010)http://ivythesis.typepad.com/term_paper_topics/2009/11/strategic-marketing-tescopestleswotbcg.html (access-06-01-2010)

Different marketing strategy of Tesco

Tesco brought about o lot of changes in these marketing strategies and has grown to become UK's number one retailer. "Today in the UK, the retailer has been dominant force more than 10 years"-(Seth, A. & Randall G., The Grocers: The Rise and Rise of the supermarket Chains). If we look in Tesco history we can see Tesco always change there strategy within time base and for that they get success constantly. (BPP, 2010)In 1973 Lesile Porter and managing director lan MacLaurin applied one philosophy that is "pile it high, sell it cheap" which had left the company "stagnating" and with a "bad image". In 1977 Tesco launched "Operation Checkout" which included the abandonment of green Shield stamps, price reductions and centralized buying for all stores. The result is a rise in market share of 4% in two month.

1990s

In 1994 the company took over the supermarket chain William Low, successfully fighting off Sainsbury's for control of the Dundee-based firm which operated 57 stores. Tesco introduced a loyalty card, branded 'Clubcard' in 1995 and later an internet shopping service. In 1997 Tesco and Esco (part of Exxonmobil) forged a business alliance that included several petrol filling stations on lease from Esco, with Tesco operating the attached stores under the Express format. Ten years later over 600 Tesco/Esco stores can now be found across the UK.

2000s

In October 2003 the company launched a UK telecoms division, comprising mobile and home phone service, to complement its existing internet service provider business. August 2004, it also launched a broadband service. (BPP, 2010)In 2007 Tesco took part in a joint venture with O2 to from the Tesco Mobile virtual network operator in Ireland. In April 2009, Tesco announced that it had created a super tomato "doesn't leak." We can see here that how Tesco change their strategy from beginning to until now. Other hand we can see Tosco's almost entire relationship marketing strategy based on its "Clubcard" scheme. It has been able to use the Clubcard very effectively in addressing different customer segments and in attracting customers of all types. (BPP, 2010)PESTEL AnalysisPEST analysis shows the main external impacts of organization. PESTEL stands for political, economical, sociological, technological, ethical, and legal, in TESCO the following external will have great effects whether negatively or positively.

Political: following the European integration and free trade Agreements, the market has opened up for British Companies to invest in Eastern Europe. Tesco already has 60 Hypermarket store in hungry.

Economic: the Retail sector is fairly recession prawn and also very sensitive t change in interest rates. Since the events of September 11th the world economics have suffered heavily, stock plummeted and price is at all time lows. The world economy is however, now on the up post September 11th. (BPP, 2010)Sociological: Change in consumer taste and lifestyle represent both opportunity and threats for the industry.

Technological: change in retailing methods as such clothes sales via the internet is now a common place in retailing. Paperless operation, the management and administration of the company are undertaken on IT system, which are accessed through secure servers provide flexibility in the running of the business.

Environmental: the threats are in terms of legal consequence for livestock's in terms of heath and safety. The renewal source of resource used in production, namely cotton and wool are environmentally friendly. (BPP, 2010)Legal: the legal factor is national legislation for health and safety both in terms of consumer and also in terms of production of own natural renewable resource for making clothes.

SWOT analysis of TESCO

Strengths

TESCO have secured commercial standing within the global market place wining Retailer of the Year 2008 at the "World Retail Awards" this can be used marketing campaigns to drive advantage towards the demographic base for future growth and sustainability. (BPP, 2010) In an environment where global retail sales are showing decline or level performance on a like basis TESCO Group have published sales gain of 13% for UK markets and 26% growth in international markets.

As a business looking for continued expansion TESCO have reserve funds of credit coupled with income derived from property portfolio development funds.

Weaknesses

TESCO finance profit levels were impacted through bad debt, credit card arrears and household insurance claims.

TESCOs position as a price leader in UK markets can lead to reduced profit margins in order to retain the key price points on must have commercial items.

Grocer outlets are not set up to operate as specialist in specific areas of product which can be capitalized on by other smaller bespoke retailer.

Whilst current economic conditions suggest TESCO key value massage will succeeded there is a weakness in nonessential, mind to high ticket price items which will suffer from the rising cost of living and lower disposable incomes.

Opportunities

Statistics suggest TESCO is the third largest global grocer which indicates a level of buying power to ensure mainstream economies of scale. (BPP, 2010) The acquisition of Homever provides the opportunity to develop the brand through Asia, specifically South Korea and further grow international markets for the group.

The development of TESCO Direct through online and catalogue shopping will grow the use of technology, providing the launch pad for large non food based products with moderate to high margin returns and less focus on sale and margin per foot return to space.

Threats

UK and America markets have been affected by economic through the "credit crunch" Lower available income and strategic focus may need to change to lower priced basic products with less focus on higher priced brands suggesting a switch in price architecture.

Rising raw material costs from both foods will impact profit margins overall.

Changes to consumer buying behaviors require further analysis - as technology develops consumers buying patterns change which will result in product areas requiring evaluation. (BPP, 2010) For TESCO there is a persistent threat of takeover form the market leader Wal-Mart who has both means and motive to pursue such action. Another element of marketing mix

People: People play c crucial role in the production and delivery of products and service. The physical presence of people performing the job is a vital aspect of customer satisfaction.

The people mix issue:

1. careful job selection

2. careful policies of selection (BPP, 2010)3. Institute programmers in staff training etc.

Process: process involved the ways in which the market's task is achieved.

The process mix:

1. company policies

2. accessibility

3. service feature

4. Capacity levels etc.

Physical: The physical evidence relates to those aspects of the service provider that customer can see and fell so as to from an impression of the service or its provider. (BPP, 2010)The physical evidence mix:

1. logos

2. colours

3. equipment

4. company vehicles

5. labels

6. Packaging etc.

Three new marketing mixes also create importance in marketing. Therefore Tescos marketing operation also effect by this new marketing mix.

Task 2:

Micro environment

Micro environment consists of the different types of stakeholders outside the organisation. The constituents or stakeholders of the micro environment include customers, suppliers, creditors, distributors, dealers, etc. Although these constituents arent the direct control of the organisation, still they can be influence by organisation through its policies and strategies

For eg: Micro environment factors which could influence Dynamic International Ltd are:

Employees: Employees are critical to success of the organisation, the dynamic international is hand gloves manufacturing company and their employees are the ones responsible for keeping their company going. Employing the right stuff, providing them trainings and keeping them motivated gives ability to meet customers deadlines and produce high quality hand gloves. (Jon, Peter and Patric, 2004)

Suppliers: Suppliers are those that provide goods and services which are transformed into value by organisations. Tesco company should look for right suppliers and keeping good relationship is crucial to organisation, getting competitive prices and high quality goods are the one of the good relationship examples.

Customers: Customers are the ones who make a market; they are the ones who buy goods and using them. Customers are the reason why companies start business, why companies developing new products and differentiated their existing products. By selling the goods to the customers organisations makes a profit, thats why Tesco company have to concentrate on satisfying their customers needs and wants. (Jon, Peter and Patric, 2004)Macro environment

The macro environment consists of constituents that are beyond of the business organisation. The constituents are social-cultural, technological, economical and political factors which constitute their own individual environments

Political : Government is the one that responsible providing the rules of the game which make business function smoothly, government responsible for introducing new laws and regulations, taxation for the business. For example if government decides to cut funds for public sector in order to save money, all councils may have to look for cheaper options to buy gloves for their workmen, which means Tesco company could lose their customers.

Economic: It is very important to look at economic environment. Almost every business depends on it, some countries have strong economy some countries dont. Economic environment is very dynamic; it keeps on changing in changes with government policies. If economy is poor there will be negative effect on the business and organisations would have to find the way out to make people buy their products. For example if there would be high unemployment in the country Tesco companywould have to use different marketing strategies by using commercials or advertising, or dropping their prices to show compassion for their customers. (Jon, Peter and Patric, 2004)Technology: Technology is changing fast and the adoption of the new technology could be a good investment in the business, for example Tesco companydecide to buy a new manufacturing machine , this could be a competitive advantage for them, and it could increase a speed of the production and save the money instead of hiring extra employees.

Segmentation Criteria

To segment the market is crucial because you have to allocate resources and to know who you are concentrated at. There are four types of segmentations which is geographic, demographic, psychographic, and behavioural segmentation. I will be proposing two segmentation criteria for Tesco Company which is: (Jon, Peter and Patric, 2004)Demographic segmentation

Dave Needham (1999) suggests that this is the most commonly approach to the market. The division of consumer groups according to demographic variables such as age, gender, income, occupation, education, family size helps you to target market. Tesco company could use this to understand how these characteristics influence the products they selling. For example, knowing that customer needs changes with age they could promote their products to meet the needs of all age of groups or using gender segmentation they could increase productivity buy start selling both male and female hand gloves. (Jon, Peter and Patric, 2004)Behavioural segmentation

Behavioural segmentations concerned about buyers behaviour, they are divided into segments according the way they behave, such as usage of the product, knowledge of the product, loyalty, and attitude toward the products. For example loyal customers might be able pay extra price for a pair of gloves, because their trust the quality and standard of the product, but some may not be interested because they know little or nothing about it.

Targeting Strategies

Another step after we finish segmentation is targeting. Once the market has been segmented, the Dynamic International need choose targeting strategy. Targeting is about which and how many groups of customers organisations are going to target with its products or services. There are three targeting strategies: differentiated, undifferentiated, and concentrated.

Differentiated strategy

This strategy is when the company decides to target more than a one market segment. Using this strategy the company can spread risk across the market, so if one segment declines the company still has revenue from others. The disadvantage is that it requires a high level of marketing expertise and will incur higher costs

Undifferentiated strategy

This strategy is when organisation assumes that the market is homogenous unit, in other words company ignores market segment differences and goes after all market with one product offering. This approach would suit for large global companies that have strong offerings, or organisations who sell commodity products. (Jon, Peter and Patric, 2004)Concentrated strategy

This strategy involves specializing in one specific segment. This can lead to detailed knowledge of target segment`s needs and wants, with the added benefit that organisation is regarded as a specialist over it mass-market competitors. Advantage of this strategy is that it reduces costs, as there is only one marketing mix to manage

I think the most suitable targeting strategy for Tesco would be differentiated strategy, because this strategy is perfect for organisations wishing to grow. Targeting more than one segment means that Tesco Company would have got more products to offer, so even if some segments would fail they would still get profit from other segments.

Indentify factors that influence buyer behavior and purpose a new positioning stratergy for a product or service of your organization:

Consumer Buying Behaviour

Why do we need to understand customer behaviour? Analyzing customers behaviour helps to understand why buyers buy and use certain products and services, it helps business to adjust their marketing strategies and promote their products. Consumer buying behaviour is `the decision processes and acts of individuals involved in buying and using products or services` (Jon, Peter and Patric, 2004)There are many situations that buying behaviour could affect marketing activities. As I illustrated below in the first situation it could depend on customers lifestyle. If the customer is young student who doesnt really know much about technology and needs new laptop, because the old one is broken down, would probably make up his mind quick and easy. While professional IT specialist would probably take is time and think about performance and quality of the product. Second situation as illustrated below it might be psychological factors, where customer is loyal to Apple products and belief that is better than any others.

Buying a laptop (first situation)

Buying a laptop (second situation)

Positioning

After finishing segmenting and targeting I am going to decide what type of positioning strategy could tesco use for its products. Positioning strategy helps to differentiate organisation products and services from its competitors. Havaldar (2010) suggest that positioning could be defined as the distinct place of products (or service) occupies in the minds of the target customers relative to competing products. In other word, how the firms wants its products to be perceived by target customer on important attributes or benefits. Differentiating themselves from competitors is crucial to success, being able to create different perception about your product in your targeting customers minds that is where the success is. First thing Tesco could try to be different by offering different prices to their customers; however their competitors could switch their prices easy to be competitive.

But having good competitive price and quality products that what makes different from your competitors. Tesco should come up new design gloves that are comfortable, long lasting and safe gloves that could suit both male and female. Being the first to offer something unique would be a success. They could even use a slogan for their products such as The Best hand gloves to protect your hands`. (Jon, Peter and Patric, 2004)Task 3:

In business, competitive advantage can be defined as the strategic advantage that one business entity has over its rivals within the same competitive industry. Achieving a competitive advantage puts the business in a stronger position within its business environment. For this we need to develop our products and services day by day according to our customers needs and wants. (Jon, Peter and Patric, 2004)There are several ways in which a business might think about developing a product in order to sustain or build a competitive advantage:

Staged release into the market: It could be considered beneficial to hold back certain developments you have made to a product so that you can release an improved version of the product periodically, rather than release it once and then fail to improve upon the product thereafter. The staged 'improvement' of the product can make it appear dynamic and exciting to the customers, whereas rival products might be perceived as static and boring in comparison. We need the customers to feel that our company is dynamic and wont stay the same the whole time.

Differentiation and positioning: If we can differentiate our product from that of our competitors, we can afford to get their attention easily and glow out in the market. If we can provide unique and special benefits to our customers that no one else can provide them, then we are in well-position to refer to them as loyal customers. We just need to focus on creating new inventions and keeping them in good position, which will appeal to our customers within a short period of time. (Jon, Peter and Patric, 2004)

Research and marketing: The development of new products has to be based on the wants and needs of the customers. Rather than simply releasing a product and waiting to see if the demand is there for it, firms should be conducting market research beforehand in an attempt to find out whether there is:

A demand for a product and

A gap in the market for the particular product if the firm releases it.

b

There are several ways in which businesses arrange distribution to provide customer convenience. The methods used may vary slightly based on what sort of business is being operated. (Krishna, 2010)

For example, those who are running an e-commerce business will have different techniques than those who have a standard "real world" business headquarters. Also, different real world businesses may have different techniques dependent upon the size of the business and where they may be dealing with customers.

First, let's look at e-commerce. Tesco.com is a great example of how distribution can be arranged to make things more convenient for customers. Tesco offers free standard shipping for items that are advertised through Tesco. One of the reasons that they are able to do this is because they have distribution centers located all over the place. When you make a purchase from the site, you will receive your packages (Krishna, 2010) from a particular distribution center and the location of the center is based on whichever one of the Tesco fulfillment centers is nearest you and contains the item within its standard inventory.

This results in savings for the customer as well as faster receipt of items purchase, as they often do need to travel very far. It also means that packages are less likely to arrive damaged or in poor condition, as they don't have to be in transit as long or switch hands as many times.

Next, there are stores that you can walk into and order from their display inventory. The item will then be sent to you from a local distribution center that is found in another part of your city or state. This method allows stores to cut down on transportation costs as items don't have to be shipped in large quantities to each individual store. They are just housed at a central distribution warehouse instead. (Krishna, 2010)

The savings that companies see in their own transportation, warehousing, labor and other costs translate to savings in final prices for customers. They also usually mean that fulfillment processes are more reliable as well, as the network for handling distribution isn't as complex and prone to problems of challenges.According to the definition the price of the product might be the amount of money that a business expects to receive from good or service which was purchased by its customer. For a majority of products price is determined in a free market by the forces of supply and demand. Also price is one of the 4 elements of Marketing Mix. (Krishna, 2010)

Pricing strategies are only the medium or long-term pricing plans that a business adopts.

There are some main pricing strategies:

Price skimming: is often used when a new innovative product is launched onto the market. The risk that this product will face competition in the short term is very low. So by setting a high price, the business will achieve a limited volume of sales but with a high profit margin on each sale. This revenue which will be generated might recoup some of the development costs for this product, as R&D stage requires a lot of investments. An example might be such Apple product as Ipad. The price is lowered in this case when the competitors enter the market. (Krishna, 2010)

Price leadership: is often used for established products with strong brand images and brand loyalty. The firm who is adopting this strategy should be a dominator on the market while other firms just follow it. It is common for price leaders to set up prices over the market rate. A bright example is Bentley Continental which price is incredibly high.

Firms: which decide to enter the market with the similar products uses penetration pricing. The price is set deliberately low to gain a foothold in the market. The expectation of the business is, once the product is established, the price will be increased in order to boost profits. Companies adopting these strategies rely on high sales to earn high profits. For instance there are a lot of new brands of chocolate bars in Tesco which are selling twice cheaper than others as brands are new, so the companies decides to adopt penetration pricing strategy. (Krishna, 2010)Communication mix including:

1. Advertising: advertising media and factors to consider when advertising media

2. Sales promotions: objectives and relative techniques

3. Direct marketing: objectives and relative techniques

4. Public relations: objectives and relative techniques

5. Sponsorship: objectives and the relative types

6. Personal selling: functions of salespeople and the personal selling process

Promotion mix: Promotions or marketing communications refers to the exchange of exchange of information between an organisation and its publics.

Public includes the following:

Customers

Shareholders

Employees

The Government

The local community in which the organisation operates

Trade Unions

Pressure Groups

The Media

Objective:

The purpose of marketing promotions is best explained by the DRIPE MODEL:

D = Differentiate

R = Remind

I = Inform

P = Persuade

E = Engage

The promotional mix consists of 6 techniques / tools/ methods:

1. Advertising

2. Sales promotions

3. Direct marketing (Krishna, 2010)4. Personal selling

5. Public relations and

6. Sponsorship

Factors choosing advertisement:

1. Cost of media2. The target market or audience3. Control or measurability of media4. Media availability5. Reach or coverage6. Media used by competitorsSales promotion:

These are short-term incentives aimed at generating sales or encouraging consumer trial of the companys products.The objectives of sales promotion include:

To increase brand awareness

To increase trial and adoption of new and existing products

To attract customers to switch brands from competitors

To level out fluctuations in demand and supply

To increase brand usage

To increase customer loyalty (Krishna, 2010) To disseminate information

Task 4:

Marketing mix modeling (MMM) is a term of art for the use of statistical analysis such as multivariate regressions on sales and marketing time series data to estimate the impact of various marketing tactics (marketing mix) on sales and then forecast the impact of future sets of tactics. It is often used to optimize advertising mix and promotional tactics with respect to sales revenue or profit. (Stone and John, 2007).

Components

Marketing-mix models decompose total sales into two components:

Base Sales: This is the natural demand for the product driven by economic factors like pricing, long-term trends, seasonality, and also qualitative factors like brand awareness and brand loyalty.

Incremental Sales: Incremental sales are the component of sales driven by marketing and promotional activities. This component can be further decomposed into sales due to each marketing component like Television advertising or Radio advertising, Print Advertising (magazines, newspapers etc.), Coupons, Direct Mail, Internet, Feature or Display Promotions and Temporary Price Reductions. Some of these activities have short-term returns (Coupons, Promotions), while others have longer term returns (TV, Radio, Magazine/Print).

Elements measured in MMM

Base and incremental volume: The very break-up of sales volume into base (volume that would be generated in absence of any marketing activity) and incremental (volume generated by marketing activities in the short run) across time gain gives wonderful insights. The base grows or declines across longer periods of time while the activities generating the incremental volume in the short run also impact the base volume in the long run. The variation in the base volume is a good indicator of the strength of the brand and the loyalty it commands from its users. (Stone and John, 2007).

Media and advertising: Market mix modelling can determine the sales impact generated by individual media such as television, magazine, and online display ads. In some cases it can be used to determine the impact of individual advertising campaigns or even ad executions upon sales. For example, for TV advertising activity, it is possible to examine how each ad execution has performed in the market in terms of its impact on sales volume.

Trade promotions: Trade promotion is a key activity in every marketing plan. It is aimed at increasing sales in the short term by employing promotion schemes which effectively increases the customer awareness of the business and its products. The response of consumers to trade promotions is not straight forward and is the subject of much debate. Non-linear models exist to simulate the response. Using MMM we can understand the impact of trade promotion at generating incremental volumes. It is possible to obtain an estimate of the volume generated per promotion event in each of the different retail outlets by region.

Pricing: Price increases of the brand impacts the sales negatively. This effect can be captured through modelling the price in MMM. The model provides the price elasticity of the brand which tells us the percentage change in the sales for each percentage change in price. Using this, the marketing manager can evaluate the impact of a price change decision.Distribution: For the element of distribution, we can know how the volume will move by changing distribution efforts or, in other words, by each percentage shift in the width or the depth of distribution. This can be identified specifically for each channel and even for each kind of outlet for off-take sales. In view of these insights, the distribution efforts can be prioritized for each channel or store-type to get the maximum out of the same.

Launches: When a new product is launched, the associated publicity and promotions typically results in higher volume generation than expected. This extra volume cannot be completely captured in the model using the existing variables. Often special variables to capture this incremental effect of launches are used. (Stone and John, 2007).

Competition: The impact of competition on the brand sales is captured by creating the competition variables accordingly. The variables are created from the marketing activities of the competition like television advertising, trade promotions, and product launches etc. The results from the model can be used to identify the biggest threat to own brand sales from competition. The cross-price elasticity and the cross-promotional elasticity can be used to devise appropriate response to competition tactics. A successful competitive campaign can be analyzed to learn valuable lesson for the own brand.B)

The two major segmentation strategies followed by marketing organizations are concentration strategy and multi-segment strategy.

Segmentation of a market to reach a target consumer base can be done by defining consumers in terms of geographic, demographic, psychographic, and behavioral characteristics. (Stone and John, 2007).

An ideal market segment is possible to measure, large enough to earn profit, stable, possible to reach, internally homogeneous, externally heterogeneous, consistent in response to market stimulus, reachable in a cost-effective manner, and useful in determining marketing mix.

marketing mix

A business tool used in marketing products; often crucial when determining a product or brand's unique selling point. Often synonymous with the four Ps: price, product, promotion, and place. (Stone and John, 2007). market segment

Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs and desires as well as common applications for the relevant goods and services.

psychographic

The science of using psychology and demographics to better understand consumers.

Differences between Domestic Marketing and International Marketing

International marketing means that domestic organisations are developing marketing mixes and setting up some type of operation targeted at foreign markets. The concepts of marketing management are common in case of domestic and international marketing. Though the basic concepts, tools and techniques are the same, the difference lies in their application. The difference arise because the environment in our country and the environment abroad is not the same. These differences are summarised as below:

Sovereign political entities. Each country is a sovereign political entity and goods and services have to move across national boundaries. As a result they have to face a number of restrictions. (Stone and John, 2007).

Different legal systems. Each country has its own legal system and very often the legal systems operated by different countries differ from each other.

Different monetary systems. Each country has its own monetary system and the exchange value of each countrys currency is different from that of the other.

Cultural variables. Exporting means operating in a cross-cultural environment. Marketers need to understand different cultures, so that they can adapt their marketing mixes to meet the differences demanded by a new culture. Carlsberg, the world famous producer of beer, had to add a third elephant to its label of elephant beer in its advertisement in Africa. Two elephants are considered to signify bad luck there.

Governmental intervention. There is normally too much of governmental intervention in case of international trade. On the other hand, in case of domestic marketing, governmental intervention is least affecting the business dimensions.

Transport costs. Transport costs play a decisive role in case of international marketing, while in case of national market, transport costs play minor role as output may be absorbed by local markets where the products are produced.The marketing programmes naturally directed towards different marketing environments must be different. For this a check list has been prepared. (Stone and John, 2007).

Reference

BPP Learning Media (2010). Business Essentials: Marketing Principles. 2nd ed. United Kingdom: BPP Learining Media Ltd. p131.

Charles W. Lamb, Joseph F. Hair, Jr., Carl D. McDaniel (2011). Essiantial of Marketing . 7th ed. United

Dave Needham (1999). Business for Higher Awards. 2nd ed. Great Britain: Reed Educationa and Proffesional Publishing limited . p37.

Dr. Karminder Ghuman (2010). Managment: Concepts,Practise and cases. India: Tata McGraw Hill Education Limited. p37.

Jon Groucutt, Peter J. Leadley, Patrick Forsyth (2004). Marketing essential principles, new realities. Great Britain and USA: Kogan page Limited. p27.

Krishna K Havaldar (2010). Business Marketing: Text and cases . 3rd ed. New Delhi,India: Tata McGraw Hill Education Private Limited. p143.

States: South western, Cengage Learning . p262.Stone and John Desmond (2007). Fundamentals of Marketing: A Critical Evalution. 2nd ed. USA and Canada: Routledge. p172.

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