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Unit 2 Marketing Principles Assignment – British SME
Diploma in Business (Marketing)
Unit Number and Title
Unit 4 Marketing principles Assignment
This marketing principles assignment is intended to describe the marketing principles of the British SMEs. Here the learner has appointed as the marketing executive of the department of the trade and industry, and the primary task of the student is to formulate marketing principle so they can internationalize their operation efficiently. Marketing principles are idea that is agreed upon the basis of the product promotion strategies. There are several SMEs in the UK like TPP, the 7Stars, The Jenrick Recruitment group, ChapmanBlack, etc. Total employment in the British SMEs is 15.7 million people who are working in more than 4.5 million SMEs organization.
1.1 Various elements of the marketing process that British SME adopts:
As stated by Applbaum (2014), marketing process is the technique that can recognize the impending and feasible marketing opportunities in the market as well as it develops the strategy for utilizing the opportunities. For grabbing the market opportunities, detailed customer analysis is necessary for the area in which organization is operating. According to this, it is important to develop an effective strategic plan, and by considering this strategic plan, it is important to make different tactical decisions for the proper parameters of the marketing mix. In the case of the British SMEs it is important to make marketing decision by considering promotional and development decision of the product and services, pricing decision so the product and services and the distribution decisions. To decide the element for the marketing mix, different British SMEs should conduct various techniques like situational analysis and analysis of the marketing strategy and should take decisions regarding the marketing and they should implement those decisions on business. As the initial investments of the British SMEs are not high, so they should choose that product or services, which can benefitted them. In the recent time, customers are more prices conscious so price should be selected according to the ability of clients.
The result of British SMEs includes various range of product and services like grocery and beverages items, fashion products, different types of financial services, recruitment services, etc.
There are several established organization in the market so they should select a low pricing strategy to attract customers
Different SMEs organization should be created in that area where customer can easily access those products
British SMEs should follow an effective communication strategy through various channels to spread awareness regarding their goods and services.
1.2 Identification of the winning orientation during internationalization and evaluation of cost and benefit to adopting those orientations: (M3)
For making internationalization successful, a different strategy needs to implement. Some winning strategies are the export strategy, franchising, joint ventures, turnkey projects and licensing.
For implementing the strong market orientation , massive investments of money and time is required because it needs to involve different business intelligence strategy to attract the customers as well as require association of detailed research. For satisfying the needs and requirements of the customers, British SMEs should invest that amount of money that they can easily retrieve from their business within several years. As stated by , to make an SME successful, it is important to invest the average amount of money because their first revenue is not so high. If any SME invest medium amount of money, then only they can retrieve that with an ease because massive investment requires tremendous time to recover it.
1.3 Micro and macro environmental factors that influence marketing decision: (D1)
The macro-environmental factor can be defined as the uncontrollable external factors that can affect the operation of any business (. Several uncontrollable and external factors can affect the decision making of the British SMEs. The macro-environmental factor of British SMEs is as follows:
Influence on business
Different legislation regarding the employment, rate of tax, stability of the government in British and in another market in which those SMEs are planning to develop their business
Foreign direct investments, financial stability of the states, the rate of inflation, customer's flow, generation of profit, etc.
The belief of the customers regarding the quality of the product, living standards, population in the country in Britain and that country they are operating, workforce, etc.
Digital marketing, research and development and the e-commerce, etc.
Legislation regarding employment and safety act
Pollution, greenhouse effect, carbon footprint, etc.
On the other hand, the micro environmental factor can be defined as those factors that have very significant impact on the operation as well as the success of any organization. Different microenvironmental factor that affects the marketing decision of British SMEs are as follows:
Threat of substitution
There can be several substitutions of the SME, so the risk of change is high. This is because; any customer can stop their services from the small and middle-level organization and can accept their services from the big organization.
Bargaining power of supplier
Bargaining power of the vendor is high because of the availability of so many providers and less amount of switching costs.
Bargaining power of buyer
Due to huge competition in the market and less amount of switching costs, bargaining power of buyer is high.
Intensity of competitive rivalry
Due to the presence of several same types of organization in the market, the intensity of competitive rivalry is very less.
Threat of new entry
As the investments in the SMEs are not so high, so there are potential, threat of new entry is very high. Therefore, competition in this market is very much high.
1.4 Reason and the way by which international marketing differs from the domestic marketing:
1) In the case of the local market, the price of the product is low because the product is intended for the home country (Golding and Peattie, 2012).
2) Revenue generated by the domestic market is lesser than the international market because scope of profit generation in domestic market is lower
3) This size of the local market is small, so the range is low in this market.
4) In the case of the domestic market, the cost of advertising and promotion is lesser than the international market because it is intended for the customers of a particular region.
1) The introductory price for the product in the international market is high because of the presence of different tax rates in the different country.
2) Because of the inclusion of foreign currency, the scope of revenue generation is high.
3) The scope of work in the international market is huge because of the involvement of the vast operational area.
4) The International market requires the investments of the huge revenue because of the huge promotional and marketing costs to attract the diverse range of customers.
1.5 Explanation of how products can be developed to sustain competitive advantage: (D3)
As opined by Hastings (2011), the most important thing to improve a product is inventing the idea to produce a product. For promoting any new product and services and for gaining competitive advantage high-quality product as well as pricing strategy is necessary to achieve competitive advantage than the competitors. Therefore, to develop the sustainable competitive advantage, British SME should provide high-quality product at lower price. Along with that, it is important to have a new packaging style so it can attract customers through a good look and feel. To achieve competitive advantage, British SME should implement effective promotional strategy and pricing strategy, and they should advertise their products or services through the effective promotional channel. For the development, a new product an excellent after sales service is also important. Along with that, British SMEs should provide several offers and locusassignments.to the customers so it can make those customers aware regarding the product or service provided by British SMEs.
Figure 1: Stages of new product development
1.6 Explanation of how distribution needs to be arranged by British SME: (D2)
To increase the revenue in the market and create a huge market for any organization, British SMEs should develop an effective distribution channel so they can make their product available to their customers. For facilitating an efficient distribution channel, it is important for British SME to open their store in that location where the number of customers is high. As initial investments of the British SME are not so much, so it is not possible for them to open different branch. Therefore, it would be helpful for them, if they open their store in the most convenient place that can be easily accessed by the customers (Joneset al.2012). Along with that, they should make retailer, wholesalers and stockiest available for their businesses. Along with the offline presence of their brand, British SMEs can utilize the online media so they can attract online customers also. By accessing those online customers, they can earn more revenue for their newly developed product.
1.7 Setting of price to reflect the market condition and objective of organization:
In the recent times, maximum customers are price concerned, and they want superior quality products in low price. In different economy need of customers are also different so in various economies price is one of the most concerning elements that mainly decide the sales level. Therefore, it is important to set the price according to the need and ability of the customers. According to Meghraoui and Benabou (2014), the ultimate objective of any organization is earning the profit by serving customers with quality products so to fulfill this purpose they must attract customers attention. Therefore, this goal can be fulfilled by offering goods or services at low costs. If any organization higher their price that means they are concentrating on quality, while lowering price indicates they want to achieve immediate profit. British SMEs should set different price in different time. At the initial phase, they should offer lower pricing strategy to create demand for their product. At the later date, they can charge higher pricing strategy. However, they should offer different discounts in a different era.
1.8 Promotional activities that British SME can be integrated to achieve the marketing objective:
There are several promotional strategies, which can help the British SMEs to increase their sales; they are advertising, sales promotion, direct mailing, etc. For every organization, the effective promotional strategy is important because it creates a sufficient awareness in the mind of customers. As stated by Piercy (2011), the different promotional strategy attracts customers towards the products and services of the organization that helps them to secure a good amount of profit that is one of the marketing objectives of any organization. In the later time, it helps the organization to establish a good brand image if they can be successful to satisfy those customers. British SMEs require an efficient promotional activity that can lower their operational costs and reduces their inventory so it can benefit those organizations with a high amount of profit. British SMEs also require various personal and professional skills so it can help British SMEs to achieve their marketing objective. Different personal knowledge is also required regarding the need of customers, as well as marketing trend is also needed to achieve a marketing goal.
1.9 Additional elements of the marketing mix:
British SMEs should consider the extended marketing mix elements like people, process, and physical evidence to gain the competitive advantage.
People:To gain competitive advantage, British SMEs should attract and retain highly experienced employees so they can provide most effective customer services to their organization (Jamal, 2015). It will not be effective for them to hire fresher employees because they incur some extra costs for training. The initial investments of SMEs are small, so it will not be effective for them to hire fresher.
Process:For gaining effective operability, it is important for SMEs to have effective processes like delivering effective customer services with the help of professional executives. To provide effective services, they should minimize all of the conflicts among their employees.
Physical evidence:For satisfying customers, they should provide some extra facilities to their customers like car parking. Along with that, right packaging style, interior, and exterior of the store is also important.
2.1 Segmentation criteria of Tesco: (M1)
As stated by market segmentation helps any organization to target diverse customers by distinguishing the complete value of the products and services. The segmentation criteria of Tesco should be:
- Region: The UK along with 11 other countries in the Asia and Europe
- Density: Urban as well as rural density in the country
Demographic segmentation:Income: Tesco must segment their customers according to the low and middle-income group (Tesco.com. 2016),.
- Gender: They must segment their customers based on their genders like male and female.
- Age: They must segment their customers according to their age group.
- Social status: They must segment their customers according to their social statuses like the middle class, high class, and low class.
- Education: According to the education, they must segment (high school, technical graduate and the graduate) their customers.
- Attitude: positive and doubtful
- Benefits from the product: differentiation in product, advantages in the costs
- Behavioral segmentation:
- Occasion: regular, irregular
- Personality: informal customers, high-minded customers
2.2 Identification of targeting strategy and select a targeting strategy for Tesco for a selected product:
There are different targeting strategies that can help Tesco to attract their customers. To sell their grocery products, they require some specific targeting strategy so it can attract the attention of the particular segment of customers. For selling their grocery products to the particular segment of customers, Tesco can follow the online marketing strategy, personal selling this strategy and direct marketing strategy (. Last two strategies are very convenient targeting strategy for the customers because the target customers of Tesco are the middle and low-class family, so there is huge possibility that they are computer savvy. On the other hand, to sell the grocery product to the higher income group, they should follow the online marketing strategy. This is because maximum customers who are especially belonging from the higher income group and urban area like to shop in online to reduce their effort to buy products as well as transportation costs.
2.3 Effect of buying behavior in the marketing activities: (M2)
Detailed analysis and research regarding customer-buying behavior are important because it helps customers to make decisions regarding buying products or services. Tesco should decide their marketing activities based on the buying behavior of their customers so they can adapt some strategy that can attract the attention of the customers and satisfy their desires. Therefore, to draw the attention of the customers, it is important to conduct a detailed research on the consumer buying behavior.
There are various groups of clients who are price concerned and the quality concerned, and the other group is both the quality and price concerned (. If any of their customer segments are price concerned, then Tesco must select their pricing strategy in that way that can attract the attention of the customers. On the other hand, if one segment of customers is quality concerned, then they must maintain high quality in their products and should sell clean and fresh foods. On the other hand, order to grab the attention of another type of customers, they should provide good quality products in low price so they can maintain sustainability in the market.
2.4 Positioning strategy for selected product:
As opined by Hastings (2011), the positioning strategy of any organization must be associated with the marketing process of the brand so that it can attract the target customers in greatest extent. For gaining the effective flow of customers, Tesco should follow functional and symbolic positioning strategy.
To offer the superior quality products, Tesco should develop practical positioning strategy. The main reason behind this is, practical positioning strategy is mainly associated with the development of a different range of services and products. This positioning strategy can help Tesco to resolve various organization related problem and help them to attract the attention of the customers for their premium range of products.
On the other hand, symbolic positioning strategy can help Tesco to offer products with lower prices. Tesco can provide their grocery products, beverages, and fashion items through this positioning strategy. This is because this positioning strategy is effective to increase the brand image by achieving the competitive advantage in the market.
2.5 Marketing mix for two different segments of Tesco:
There are different types of customers, and for satisfying the need of those customers, Tesco set premium and economy range of products.
This kind of product must be superior in quality, and the overall look and feel of the product must be classy to grab the attention of premium customers
The pricing strategy must be high
Tesco superstore as well as online shopping
Celebrity endorsements must be involved
Table 2: Premium range
Must be attractive in look and feel
Pricing strategy must be lower
All type of the retail store of Tesco
Tesco must promote this kind of product in social media, and they can use advertising in television and newspaper as well
Table 3: Economy range of product
2.7 Differences in marketing products and services for the businesses contrast to customers:
High in quality
Low in quality
Low to attract the attention of customers
More effective promotional strategy to attract the attention of customers
Promotional strategy is not important here
Table 4: Differences in marketing products for B2B and B2C
More to attract a range of customers
More effective promotional strategy to attract huge customers
More effective promotional strategy to attract huge businesses
More to attract huge number of organizations
Table 4: Differences in marketing services for B2B and B2C
From the above discussion, it can be easily concluded that marketing principles and the product development strategy must be selected based on the marketing mix. Therefore, it is important for any organization to select effective marketing mix by considering all of the elements for the specific products. It is only possible then when there is clear knowledge regarding the organization objective, and there is an effective plan to achieve those objectives.
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