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Unit 4 Principles of Marketing Mix Assignment
Diploma in Business
Unit Number and Title
Unit 4 Principles of Marketing Mix
The process of Principle of marketing mix mainly deals with the transfer of information from the business organizations to the customers with the aim to obtain value and profits in lieu of this transfer. The plan of marketing is said to be successful when it covers the production cost with profit generation and is based on effective strategies to reach the segments of market with appropriate mix of marketing elements. The Principle of marketing mix helps us in studying the concept of marketing process along with the benefits and methods of market segmentation, market orientation, strategies of targeting and repositioning and the factors affecting the buyers’ behaviour.
1.1 Explain the various elements of marketing process.
Marketing: Marketing is that function of the business organization that identifies the needs and wants of the consumers and meets them. The goals of marketing are achieved with the help of various processes of marketing planning. (Perner, 2008)
Elements of marketing process
- Situation Analysis: The actual position of the company and its products is analyzed and the gaps are identified to be plugged in order to achieve the goals o the organization.
- Marketing Strategies: After identifying the gaps, the strategies are formed to plug those gaps.
- Marketing Mix: The elements of Marketing Mix are decided upon to make the strategies effective.
- Implementation and Control of the Market Mix Elements: The strategies and policies are framed, implemented and controlled to meet the requirements. (Kantosha267,2016)
1.2 Evaluate the benefits and costs of marketing orientation for a selected organization
- Marketing Orientation-Concept Market Orientation refers to the process of the company whereby it tries to identify the undiscovered facts regarding the wants and preferences of the customers and then fulfils it.
- Market Orientation- Benefits Helps in giving effective response to the market Companies that have strategies for market orientation reckon the changes in the market trends quickly and respond to the trend changes soon by making changes in the products and operations process.
- Helps in giving effective response to demand: Companies that have strategies for market orientation come to know the of the preferences of trends from the customers only and make changes accordingly to meet the demand.
- Helps in building value for the customer: Market orientation helps the company in building a stronger base for the satisfaction of customers and enhancing the value for them. This makes the buyers repeated customers.
- Helps in consistent improvement: Companies practicing market orientation strategies comprehend and acknowledge the demands and needs of the customers in a better way and this makes the companies to bring about innovations and improved changes in the products and services effectively.
- Market Orientation- Costs High Investment Cost incurred for extensive and expensive research
When the company frames and implements market orientation strategies, it has to incur heavy investments in making extensive research and development regarding the needs and wants of the consumers. The company has to update itself in the field of technological knowledge and also has to incur costs for up gradation of technology for gathering information and analyzing the data. (Kokemuller, 2016)
This report throws light on the process of segmentation, criteria of segmentation, the factors affecting the behaviour of buyers in different situations, targeting strategies and repositioning strategies of marketing. ‘MULBERRY’, the company from the fashion industry has been taken for the study.
Mulberry known as one of the most luxurious brads of fashion industry in Britain is a company that is recognized world-wide for the unique designs and high quality products that it offers to its customers. The company has strengthened itself in designing, manufacturing and sourcing the products which are mainly classic handbags, casual apparels, footwear and chic jewellery. (Mulberry.com)
2.1 Show macro and micro environmental factors which influence marketing decisions.
There are certain internal and external factors that affect the decisions, processes, operations and strategies of marketing. The internal factors form the micro environmental factors and the external factors form the macro environmental factors.
Micro environmental factors:
The internal factors or the micro environmental factors mainly include the following:
- The Employees: Productive and efficient employees raise the productivity level of the company.
- The Customers: Profits and sale of the company are dependent upon the base of satisfactory customers.
- Intermediary links: The access to the products and services can be convenient for customers only if the distribution channels and intermediary links are efficient.
- The Suppliers: The Company can meet the deadlines of contracts and orders only if the suppliers are prompt and efficient.
- The Competitors: The Company’s market share can largely be affected by competitors.
Macro Environment Factors:
The external factors or the micro and macro environmental factors are mainly the following:
- Demographic Factor: The demographic factor includes the sex, age, religion, education background etc that affect the preferences and needs of the customers and hence the marketing strategies.
- Economy Factor: The nation’s and world’s economy that affects the buying capacity of the consumers and hence the marketing policies constitute the factor of economy.
- Political or legal Factor: The scenario of politics and legal policies also affect the company’s strategies.
- Technological Factors: The strategies are also affected by the technology of the company used in production and operations.
- Socio-cultural Factors:The socio cultural considerations and the CSR also affect the strategies of the company. (Oxford College of marketing, 2016)
2.2. Propose segmentation criteria to be used for products in different markets.
Concept/ Purpose of Segmentation of Market: Segmentation of market refers to the concept of marketing whereby the market is segmented into market subsets based on the consumers with similar wants, needs tastes and buying capacity. Different segments are targeted for different products depending upon their demands and preferences for attaining customer value.
Segmentation Basis for Mulberry:
- Demography Basis: Mulberry makes a consideration for factors of demography such as sex, age, gender, socio-cultural values etc for segmentation.
- Basis of Psychology and buying behaviour: The behaviour, preferences and perceptions of the present and potential customers is taken into consideration by Mulberry because these aspects form the psychology of an individual and thus the buying behaviour.
- Geographical Location Basis: Nations, locations etc are taken into consideration by the company because people belonging to the similar locations have similar preferences. (Net MBA, 2010)
Segmentation criteria for Mulberry: Mulberry makes an analysis of the market for gathering information regarding the trend, preferences, wants and buying capacity of the consumers by breaking the market into segments on the basis of demographic, psychological and geographical basis. Mulberry then makes an identification of the segments that are lucrative with the point of view of sales and profits. The company then designs the promotion campaigns for the targeted segment. (MSG, 2016)
2.3 Choose a targeting strategy for a selected product/service
Targeting strategies- Concept the company tries to identify the segment of the customers that can add value to the sales and profits to the company. The process of identifying such customers is referred to as targeting and the customers are known as targets. The company tries to sell its products to the targets. Thus the targeting strategy for a product is the strategy to identify the profitable segments of the market and offer products to these segments that suit their demands and preferences.
Types of Targeting strategies mainly found:
Differentiated Targeting Strategy of Marketing: It is seen that sometimes a specific segment of market has the potential to offer large profits to the company. The company then makes special designs and strategies of marketing mix for such segments. This is differentiated targeting.
Undifferentiated Targeting Strategy:When it is seen that many differences are not found amongst the wants for various segments, then the company resorts to undifferentiated targeting strategy or Mass targeting strategy. For instance a soft drink company can produced a soft drink that can be relished by all segments of the market and is price effective as well. Here the company can produce large volumes of the product and can take the benefits of economy of scale.
Concentrated Marketing Strategy of Targeting: This is a targeting strategy where the company targets a specific section of customers. For example Mulberry can target the range of clothing and shoes for a specific age group.
Targeting strategy of Micro marketing: This type of strategy is introduced when certain group of individuals or the customers from local areas have unique demands but their purchasing power is good enough to offer reasonable profits to the company. In such situations customised mixes are introduced for these buyers. (Demand Metric, 2008)
Mulberry’s Targeting Strategy: A targeting strategy of differentiated marketing is followed by the Company Mulberry. The company obtains competitive advantage by differentiating the targets and offering unique products of high quality at good price to the consumers. For this the company offers fine quality clothes that are trendy and reach to the customer easily. The products are also well positioned in the market because the customer has all information regarding trends in fashion through social media and fashion magazines.
2.4 Demonstrate how buyer behaviour affects marketing activities in different buying situations.
Affect of buyers’ behavior on marketing activities: The internal factors as well as the external factors affect the behavior of buyers. These factors comprise of demography, economic status, social strata, psychology and ethics. The company studies these factors and understands the buying behavior of customers and forecast the trend in the ratio of supply and demand and then modifies its strategies to make the products suitable for customers’ preferences. The marketing activities of the company are affected by the behavior of buyers.
Buyers’ behaviours and the influencing factors:
- Buyers buying consumer products: The socio-cultural values, psychology, economic status, perceptions, opinion of friends, family and peer etc. affect the behaviour of customers buying consumer products.
- Buyers buying Business products: The Behaviour of buyers buying business products is affected by the factors that comprise of micro and macro environmental factors. These factors comprise of demography, political and legal scenario, technology and the stakeholders’ attitude.
- Online buying: Online buyers get the benefit of online buying because they don’t have to search the physical market for the products. They can compare the products from various sellers and get the best deals at the doorstep. (Dietrich, 2016)
- Process of making buying decision:Before making the process of buying or purchasing, the customer goes through a complicated process that leads to the materialization of purchase.
First the buyer recognizes the need or purchasing a specific product. After that he discusses bout the product or offer with his family, relatives, friends and colleagues. He also tries to search for the appropriate substitutes of the product and the options available in the market. He may also search for the product on internet. After making satisfactory research he makes a call on the decision of buying the product. After buying the product h tries to calculate the approximate worth he has received from the purchase made. That determines his satisfaction level and his decision of recommending the product to others. Buyer’s behaviour Influencing the Marketing Activities and Strategies of Mulberry
Direct and straight implications have been exhibited by the marketing strategies and activities of Mulberry in several situations. An example of this is that the buying behavior of buyers was influenced by the global recession recently in UK. The recession reduced the spending capacity of buyers largely. Mulberry addressed to this change by framing cost effective strategies and integrating those strategies with the marketing strategies and activities. (Vogt, 2016)
2.5 Propose new positioning for a selected product /service.
Sometimes the product of the company which is already positioned is not able to develop much interest amongst the buyers and the sale of that product is stagnant. In such cases it becomes necessary for the company to reposition it in order to spur the growth of that product. Therefore repositioning strategy of the company is a strategy that persuades the customers to see the product from different angle with a different perspective.
- Repositioning by Mulberry for its products: Mulberry can reposition its products that make little contribution towards sale by the following:
- Unique retail type and mix: The Mulberry Company can go for unique type of retail and marketing mix comprising of merchandising, price, advertising, sale services, designing and store locations. This will definitely offer high value to the buyers and the company can attain competitive advantage. Mulberry can make an advertisement of its unique features of its products via unique selling proposition strategies.
- Product differentiation:Mulberry can differentiate its products on the basis of high quality and suitable price in relation to its competitors.
- Service differentiation: Mulberry can give after sale service for its products and can differentiate itself from the competitors in the industry on this aspect.
- Personnel differentiation: Mulberry stores must deploy sales team which is more empathetic, tolerant and polite to give a personnel touch to the customers.
- Unique Image differentiation: Mulberry possesses a reputed and unique image in the market. The company offers products of high quality and does not follow the strategy of producing in mass with similar designs like most of the companies. This can be used as a strategy to differentiate its products from the competitors.
- Distribution Channel differentiation: Mulberry Company can position on the basis of functional and efficient channels of distribution. (Chief outsiders, 2016)
The report gives an understanding of the macro and micro environmental factors that cast an impact on the decisions related to marketing strategy of the company and the criteria of segmentation of market. It also makes us understand the targeting strategies and the repositioning strategies for the products. The report also tells about the factors that affect the buying behaviour of customers.
In this task the marketing manager of the bank is preparing a report of the marketing mix. The bank tries to develop the sustainable competition in the market. Distribution channel of the bank help in increasing the convenience of the customer. The pricing strategies of the company must be value based. The promotional mix helps in the advertisement of the bank. I have been appointed as a marketing manager of a bank. I have been asked by my marketing director to prepare a report on marketing mix.
3.1 Explaining how products are developed to sustain competitive advantage
Sustainable competitive advantage is a strategy in a corporate world. It help in maintaining healthy competition in the market. It helps in maintenance of the company over a long period of time. It helps in coping up with the competition of the other companies. It helps in gaining competitive advantage over the other companies by providing quality goods with the minimum possible prices. The loyalty of the customer can be gained by with this strategy. When a company sustains over time then the profit of the company increases. The major aim of the company is to gain competitive advantage. The basis type of competitive advantage is as follows:
- Cost competitive advantage: This advantage exists with the bank delivers the same benefits as the competitors.
- Differentiation competitive advantage: This type of competitive advantage exists when the bank is able to deliver more advantage than the competitors.
The competitive advantage is able to have a greater value of the company than the competitors. The competitive advantage helps in making the customer loyal and the profit increases. The position of the bank increases in the perspective of the consumer. Competitive advantage also helps in positioning of the bank in the eyes of the consumer. (Bhasin, 2016)
3.2 Explaining how distribution is arranged to provide customer convenience
In marketing strategy distribution is essential in attracting the customers to the bank. The distribution in the bank also helps in determining its ability. The bank opens branches in different and new areas so that the consumer can access the banks easily from different locations. These days instead of opening a new branch the bank opts for opening an ATM branch for the convenience of the customers. The bank ensures that they have an extensive distribution network. These days with the introduction of mobile banking and e-banking the customers can access the bank services on their mobiles and laptop at any time of the day. Distribution channel in the main bank branch and the ATM is enhanced through the middleman. Middleman plays an important role in increasing the distribution network of the bank. The bank keep in mind that the customers are able to access the services easily. (Sujai, 2010)
3.3 Explaining how prices are set to reflect an organization’s objective and marketing condition
Most of the banks set their profit and interest rate in accordance with the other banks. The interest rate of the bank must be in accordance with the condition of the market. Sales manager is responsible for setting the pricing for the bank. The pricing strategy of the bank must be value based to improve the positioning of the bank in the market. The pricing strategy adopted by the bank must not focus on fulfilling the short term goals of the company but rather the more important long terms goals. If the bank focus on fulfilling the short term goals then the growth of the bank might be hampered. The major reason for maintaining the value pricing strategy is the satisfaction of the customers. The customer can be made loyal and satisfied by providing them various discounts and schemes in home loans. The process of obtaining loans from the bank should also be made easier. (Nitisha, 2016)
3.4 Illustrating how promotional activity is integrated to achieve marketing objectives
Promotional activities increase the awareness of the bank services among the customers. The important promotional mix of the banks are as follows:
- Advertisement:The advertisement of the bank services are made available to the customers through television, newspaper, radio and posters. The purpose of advertisement is to attract the consumers.
- Publicity:Publicity of the bank services is done through communication channels which are non-selling. The important communication is conveyed to the customers.
- Promotion through sales: In this various strategies of the company are made to enhance the sales of the company. Sufficient funds are released by the company for promotional activities.
- Personal selling: Personal selling is a method of conveying the information directly to the customers. It helps in maintaining personal contacts with the customers and gaining their trust. This method is expensive as a single employee have to hire to attend a single customer.
The important elements of the marketing mix are as follows:
- Product: The products for the banks are the various services offered such as loans and the fixed deposits.
- Price:The interest rate and the prices charged must be in accordance with the market.
- Promotion: The promotional activities of the bank help in increasing the awareness about the bank products.
- Place: The bank tries to open their branches at multiple locations. (Hose, 2016)
3.5 Analyzing the additional elements of the extended marketing mix
- People: The employees in the bank follow a dress code and maintain a very friendly behavior with the customers. The bank has a separate customer care for the customers who face difficulty in bank formalities.
- Process: The bank try to maintain the transparency in its entire process as customer need trust before investing their money.
- Physical evidence: The bank has separate helpdesk for the different section such as loan and fixed deposits. The employees at the bank are very reluctant to help the employees with the bank formalities. The employees try their best to provide premium services to its employee relation and give the loans without any hassle. (Business Case Study, 2016)
In this task the report is being prepared by the marketing manager about the various marketing elements. The bank must have competitive advantage in order to have increased profit over long term. The distribution network help in increasing the availability of the bank services to the customers. Effective pricing strategy helps in attraction of the customers. Promotional activity helps in advertising the bank and attracting new customer.
The study that has been made through this assignment leads us to the inference that in today’s times, it is not only important for the companies to produce quality products but it is equally significant to frame effective marketing, targeting and positioning strategies in order to reach various segments of the market and make the customers aware of the features of the product.
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