Assignment - Marketing Principles
PART A
The Marketing Mix of any company is extremely important in terms of the products it offers and also in terms of the segments it plans to cover. It is a tool by the help of which the company strategizes, set tactics and take actions so that it can capture the maximum market share along with earning the maximum revenue. First the marketers used to consider the 4Ps while defining their marketing mix, but time and again the physical touch, along with people and the process has become extremely important in order to attract customers. Thus 7Ps of marketing are apt in describing the marketing mix(Goi, 2009).
With the context of Marketing Mix, it is the depth, width, and the length of the products that actually define the customer segments and also attract the appropriate customers. Without proper segmentation of the products through marketing mix, the customers will be confused and the result will be disastrous in terms of customer engagement(Pour, et al., 2013).
For our discussion under consideration, "Dove Shampoo" has been considered. Dove Shampoo comes in different varieties which are targeted for different segments. In this discussion the two products which are being considered are:
A) Men+Care Shampoo(Men's Shampoo)
B) Detox and Purify Dry Shampoo (Detox Shampoo)
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Men's Shampoo
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Detox Shampoo (Dry)
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Product
(3.1)Explain how products are developed to sustain competitive advantage
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Shampoo and conditioner mixed in a single product.
The shampoo also has the characteristics to fight dandruff which is one of the major problems among the men, along with improving the health of the scalp.
Promoted under Dove brand by HUL.
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This is a special type of shampoo which serves a very niche segment and generally it is used in the salons and the parlours for better effects.
This shampoo generally targets the high end customers especially the women who are very much concerned about their quality of shampoo.
The shampoo is in the form of a spray which helps in removing the stains, oil and dirt from the hair instantly.
Nil visible residue and used for style.
The shampoo is not used in the wash format, but used in between the washes and that is why being promoted as the Dry Shampoo(dove.com, 2016).
Promoted under Dove brand by HUL, in the category of Shampoo for specialised treatment.
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Place
(3.2) Explain how distribution is arranged to provide customer convenience
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Dove generally uses a Pull strategy where it tries to persuade its customers through different promotional strategies and tries to make the product more famous.
After the product is being manufactured, the product passes through the stage of "C&F - Cost & Freight" before being stocked at the stockist level.
Departmental stores, Supermarkets, Retail Outlets, Modern Trade and generic stores.
Available in convenient stores & online.
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For Detox Shampoo Dove also uses the pull strategy. As this is a niche product, the product is not easily available in comparison to the men's shampoo product.
Demand generated from customers and passes through the same stages. Moves to supermarkets or hyper markets or salons or spa.
Purchase options available online.
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Price
(3.3) Explain how prices are set to reflect an organisations objectives and market conditions
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Normal Range Shampoos - The cost of this shampoo is as low as $3.8 and as there are different varieties of the shampoo the maximum cost can go up to $5.5. (Amazon.com, 2016).
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Niche Shampoo & hence costs around $7.80.
The shampoo is being marketed as a specialised shampoo and not to be used as a generic shampoo and is considered a dry shampoo, to be used without water.
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Promotion
(3.4) Illustrate how promotional activity is integrated to achieve marketing objectives
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The promotional strategy for this shampoo is mainly done by the normal promotional channels. The normal channels being TV advertisements, billboards, media, newspapers.
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The advertisements are not generic and they target only high rich class. The advertisements are to be found only in high end magazines and in salons or parlours. The media help is only take to promote this product through personal mailers and not like other products present all over the web.
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People
(3.5) Analyse the additional elements of the extended marketing mix
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The culture of the company at different countries vary from place to place but remains one of the healthy and most spoken culture of that region, with employees being highly satisfied ones.
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Strong R&D department, results in best products and best strategies.
Efficient and a strong management maintains the same corporate principles across the world.
Strong customer service response strategy for niche products.
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Physical Evidence
(3.5) Analyse the additional elements of the extended marketing mix
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The products are available in different packages. There are different packs under the same name, which are mainly "Oxygen Charge", "Fresh & Clean", "Thick & Strong", "Aqua Impact" & "Anti Dandruff. Conical shaped bottles with different colours and price ranges like below:
Normal Shampoo - $3.80
"Oxygen Charge" comes with the cost of $5.22
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Funnel shaped unique shape and size. Elegant looking white bottle with golden rims.
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Process
(3.5) Analyse the additional elements of the extended marketing mix
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Streamlined process of transfer from stockist to retailers. There is no place for the retailer to charge extra as the stockists are determined by the product manufacturer who in turn charges the same price across the retail channels and thus, the cost also remains the same due to its generic nature.
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The products are generally placed at the stockist and are transferred to salon and spa only at the demand from those areas. As the product is used for the treatment of the hairs and for the beauty of the hair, that charges vary a lot. These places, charges as per their convenience and as per their service quality.
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Chart 1: Difference between Marketing Mix (7Ps) of two similar products
PART B
Task 1: Marketing Context
Marketing Planning Process
The market planning process for a smart phone can be outlined as below:
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Major Milestones
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Strategic Objectives
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Description
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Goal Settings
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Mission
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An overall mission statement is made for the respective products which is then to be divided into definite objectives linked to KPIs, which in turn will be divided into action plans.
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Objectives (Corporate)
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While creating a product, aligning the mission and thereby strategic objectives behind the product should be made in such a way that those are aligned with the marketing objectives, which in turn should be aligned with the Vision, Mission and Goals of the company under consideration.
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Feasibility Analysis
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Audit of Present Capability
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Audit helps determining the company capability.
If the company is not being able to produce products which are cheap and of good quality, the company should not market its product as cheap.
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SWOT Analysis
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After knowing the capabilities, the company must be able to judge its Strength, Weaknesses, Opportunities and Threats.
This will help the company to align its strategy accordingly.
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PESTLE Analysis
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The PESTLE (Political, Economic, Social, Technological, Legal & Environmental) analysis is very important for the company to understand the market it is going to introduce its products.
Without proper knowledge of the above stated facts, the company will not be able to capture the market and thereby make business out of it(Saif & Aimin, 2015).
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Assumptions
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All the information about the market may not be available for analysis, so in that case the company must take into consideration the important assumptions.
In the most important decisions are to be made from assumptions, the company must see historical data and analyze accordingly(bplans.com, 2016).
If at all no information is available, the company must see the data from similar industries related to similar products and also must assume the segments in which it aims to offer its product.
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Marketing Strategy
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Marketing Objectives & Strategy
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Marketing objectives are very important from the perspective of the marketing plan. The objectives must be aligned with the corporate objectives to get maximum support from the corporate office.
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Forecast
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Forecast plays an important role in order to determine the market growth, market potential and segmentation and to determine future investments.
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Back Up or Fall Back Plans
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In case of the objectives not meeting the standards, the company must have back up plans in the form of back up segmentation, value added services and partnership opportunities
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Risk Planning
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Planning the risk mitigation and strategies to avoid them is one of the important plan of the market planning process.
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Allocating Resources
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Allocating Budget
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The company must allocate dedicated amount of money along with dedicated man power and fix stable suppliers before proceeding with the new product launch.
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Detailed Timeline Plans
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Detailed time planning helps the company to gauge the progress and thereby expedite the processes if needed.
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Feedback
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After the initial launch, the feedback in the form of revenue generated, demographic profiles catered should be collected and used as further inputs for further advancements.
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Chart 2: Marketing Planning Process
Market Oriented Approach is always better for a smart phone company to launch its product, because sell of smart phones depends on the pull strategy, where the customer demands determines the revenue and further production. Hence in this context, where the company is planning to launch a new smart phone, the company must gauge the market in terms of the available gaps where it can position its smart phone accordingly.
For a market oriented company, the customer is at the heart of the company and all the work of the company is focused towards serving the customers. For the company to be successful, the market oriented company first starts with a detailed market research. After knowing the segmentation and the sub-segments of the company, the company defines the functional strategies which are also aligned with the vision, mission and goals of the company. Starting from the product development, along the value chain, and till the product sales stage, the company is only focused towards its customers. After the sales have begun, the company will again focus on further research in order to develop and refine the features of the smart phone which are more suited for the market under consideration. In the market oriented approach, the company always needs to be updated with the consumer demand and consumer taste. After knowing the present situation and conditions, then only the company can take next step for further product modifications.
For the company under consideration to develop the smartphone product, the company must follow the following steps in order to follow a market oriented approach:
» The company must have a very strong external orientation towards customers and must always be updated with the market expectation. For this a detailed market research is required to be done by the company at the beginning and obviously before the product launch. This Market research will help the company determine the market segments and the target segment.
» During the market research, the external environment will also play an important role in getting the orientation of the company right. Not only the market demand but also the competition moves need to be monitored and the decisions need to be aligned as per the requirement and the competitors. If the competitors are doing a price war, the company must have deep pockets to enter into one, otherwise the company must position itself with a different market proposition
» The company should also have to display qualities of excellent intra-firm communication capabilities. This will help in transcending and communicating the exact requirements to the company stakeholders regarding the market requirements and the competitor moves and thus the product could be designed or the product launch strategy could be designed in that way.
» Collaboration among departments is one of the main criteria for the firm to be market driven. For the firm under consideration in this research, the smart phone maker needs to have a flat interconnected structure of the firm so that the needs of the customers are transcended to each and every stakeholder of the company in a very short time and thus the product could be modified or optimized as per the need of the market.
The market oriented approach has the following advantages:
• Responding to the actual Demand - For the company, the products are generally made as per the customer demand and thus the pull marketing is used to sell of the products. Thus the manufacturer do not have to worry about the forecast and trends of selling.
• Customer Value Build - The strategy to build customer value and to gain the trust of the customers, is one of the main part. By building the brand the company can ensure smooth sale through repeat purchase. This is very much possible in Market Oriented approach where the customers decided the final product quality.
• Increasing Value to Increase the Selling Price - The market Oriented approach helps the customers to decide their end products. As the demand increase the manufacturer keeps on adding features along with increasing selling price. If the customer demand is very high, the selling price will also go up exponentially.
One of the disadvantages of the Market Oriented approach is the fact, a great amount is spent on research and analysis. Before the launch of the product the company needs to do a detailed analysis of the market in order to determine the possible customer segment.
Macro Parameters
For a smart phone company to be successful in selling its smart phones, it must take into consideration some of the important macro parameters(2015). The parameters can be:
o Government Rules and Regulations - These are important in the context of whether the government has favorable regulations with context to the products.
o Government policies with regards to smart phone market, pricing and competition strategies - The policies sometimes can be very stringent and the company operating can be sued if they did not take care of these stringent laws.
o Presence of internal conflicts - Sometimes the internal conflicts present in a country can work as a hindrance for the company to produce the required products for the consumer.
o Economic conditions of the country - The economic conditions of a country can be a major factor determining the surplus income of the consumers, which in turn can result in affecting the buying behaviour.
o Surplus Income of the country or region - Economic conditions of the country - Economic condition determines the living habits and the surplus income.
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o Social Acceptance - The social conditions, may prevent the company to include specific features.
o Design, Model and Advertisements should be designed taken into consideration the culture, events and activities of those regions
o Technological adoption of the people of those region - In developing countries, the new features may not work well, as the capabilities of the people of those countries prevent the company from introducing those.
o Technological advancements(Gupta, 2013) - The technological advancements can sometimes trigger new smart phones to be introduced in the market.
o Use of patented products - Without the proper permissions and sanction, use of patented products can cause loss for the company.
o Patent violation checks - So Patent violation checks are very important while including certain design or features.
o Some regions across the world are too much concerned about the environment and thus the supply chain should be planned accordingly with related to disposal
o Use of suppliers, product launch, campaigns and use of labour force should be planned accordingly
Micro Parameters
The micro parameters will help the company determine the capability with respect to the product launch
o Technological capability
o Labour Force availability
o Workforce Quality
o Investment capability
o Marketing planning
o Previous records and reputations
o Current positioning
o Overseas experiences
o New Market
o New Segments
o Gap Analysis to understand the customer needs
o New Revenue generation areas
o Presence of incumbent competitors
o Pricing strategy by the competitors
Task 2: Segmentation, Targeting and Positioning
Segmentation Strategy
In marketing segmentation is defined as the process of dividing a market into smaller segments which have homogenous needs. This is done with an intention to design the marketing mix for that particular segment.
As per some of the researchers the customer segmentation of the mobile phone markets should always be based on demographics and in some cases it will be based on customer behaviour. So for the new product under consideration, the segmentation will be made on the basis of demographics and behaviour of the customer(Hamkaa, et al., 2015). For the consideration of this smart phone, the US market is taken into consideration as US consists of one-tenth of the total smart phone users in the World. With over 207 million smart phone users in the year 2016, the US market is forecasted to grow at a steady rate of 5% CAGR till 2018.
Demographic segmentation - The smart phone will aim to cater certain demographic segments of people who are aged in between 18 to 54. The users in this segment are the most active users who are ready to spend significant amount on their smartphones so that they get the latest model as available in the market along with the latest features. Thus this age segment will be targeted the most as this age segment also has the maximum number of office goers. Thus the dual fork strategy of the company to serve both the generic and the corporate customers will be fulfilled(Blodget, 2012).
Behavioral segmentation: The smart phone users have different priorities of their own, as is evident from the different types of behaviour they show or the different ways they use their smart phones. The smart phone which will be introduced in the market should be of three types with basic features same in all. But the three types will be more focused on:
- Data Friendly - US market shows such trend.
- Navigation Friendly - Most of the US corporates prefer this.
- Corporate Model - Both features
Examples of Buyer's Behaviour
• Demographic Segmentation - As per a latest survey, by Nielsen in 2012, Q1 all the people who earns a decent amount yearly. Only that segment which does not earn more than $100,000 a year & are aged above 55 penetration is less along with those who are above age 65 and have income less than $50,000 per year.
• Behavioral segmentation - Younger adults, people with low household income who cannot afford the internet or broadband connections in their homes, are heavily dependent on the smart phone internet data plans. An example of the Navigation friendly model can be: 67% of the smartphone users use the navigation feature in their smartphones in order to drive and locate a particular destination(SMITH, 2015).
Targeting Strategy & Positioning
Target Market - The market aimed for this smart phone is the US market with an age group of 18 to 54. This target market is being envisaged because of the wide range of users available in the market. This segment not only includes the college going students but also the corporates who can prove to be major market for the smart phone.
Positioning Strategy - With users being kept under focus the phone aims to target the mid-segment customers as well as the corporates, the phone company refrains from targeting the affluent users but the people who have decent income are also ready to spend money on brand and latest features. Thus the smart phone will aim to position itself as a mid-ranged smart phone with some additional features from the high end phones which can help the people in their daily life(Zhang, 2016).
Task 3: Marketing Mix / Marketing mix in different contexts
Marketing Mix
The marketing mix of the product that is to be launched, should be aligned with both the expectations of the individual customers as well as the business customers. The marketing mix will define the product positioning. The marketing Mix can be designed as follows:
The reasons for a particular marketing mix should be clear and concise and should be communicated through proper communication channels across the company, so that the company employees are aware of the larger objectives and thereby align themselves in order to make the best product.
- Product - The Company must focus on developing the brand image, like that of Apple.
• Price - The price should be at par with the competition and if possible there should be discounts and combo offers during the product launch so as to attract maximum people in the segments the product is aimed to cater. For example, the strategy that is being taken by Xiaomi while entering the Asia-Pacific Market.
• Place - Predetermined places with 2-3 distributors. The products will come directly to the distributor from the manufacturing facilities through service dealers or sales persons. They will have the right to sell directly to the corporates. The retailers will be able to sell to the generic customers along with corporate customers (Bhasin, 2016). Unique distribution schemes &E-Commerce platforms should also be engaged for selling the product. For example: Samsung follows a strategy of unique distributor or wholesaler across the city or a region. In some cases, where the demography is huge there may be multiple members in the value chain at the same place. Thus the company which is already an established brand should be able to develop and integrate the value chain of its latest brand with those of the others.
• Promotions -Television, newspapers, advertisements through billboards, events to be organized in shopping centers and hyper markets. The promotions made in the form of TV advertisements should be subtle enough to catch hold of the segment of people aimed for. For example: Blackberry when launched its phone, it tries to portray the corporate look of the phone into each and every segment and tried to make each and everyone feel special.
• People - The employees who will be responsible for the product development and promotions should also be motivated to understand the utility. For example: The company Nokia almost died of the fact that the employees, were not convinced enough of the new smart phones.
• Physical Evidences - The product should be made available in different standard colous of black, white, silver, grey and golden. For the corporate customers, the product should either with black with silver lining or while with golden lining. This will help in positioning itself as a separate brand among the corporates. For Example: When blackberry launched its first version of the phone, they were made only for the corporates and have black, silver or white models with dedicated corporate channels.
• Process - Clear arrangement of JV & partnership for distribution.. For example: When Samsung and Apple launches its high end phones in developed countries, the companies always go for bundling offers apart from singular buys.
Adapting Marketing Mix
• Product - Considering the company to be already present in the aforementioned segment, the product should reflect the brand value. The product should be aligned with the brand objectives of the company and meet the customer expectation.
• Price - Competitive pricing will help the company position itself among the incumbent brands and for initial hype, discounts are an excellent strategy.
• Place - Unique distribution centers and distribution schemes will help the company create optimized processes and thereby reducing the overheads and thereby reducing the operating costs.
• Promotions - For corporates separate promotional channels will ensure uniqueness. For normal customers, availability should be one of the main criterion.
• People - Until unless the people who are product makers are convinced of its use, the goodness will not be cascaded into the products.
• Physical Evidences - This will help to position the phone as a unique product and also will create a recall image in the memory of the customers, which will help the company to sell its products and to earn more revenue.
- Process - Optimized processes ensure less operation costs and thus more profit.
Conclusion
The report starts by comparing the characteristics of two similar products in Task A.
Task B defines the market planning of a new product to be launched. The market planning involves defining the strategic objectives of the company which are not only analyzing the feasibility but also to determine the marketing strategies along with determining the allocation of the resources. After that the total plan of the company is being charted out in the form of the market orientation of the company who is planning to launch the smartphone product. It was found that aligning with the external environment to understand the customers and the environment will help the firm get a better perspective of the situation and thereby plan the strategies accordingly. The macro factors affecting the new product company is being analyzed and the study is also complemented with the micro factor effects. Ultimately the segmentation and the targeting of the company was determined which was the US market in the age group of 18 to 54. The target market consists of the college going students and the corporates.
Finally the product mix and the marketing mix was defined for the product under consideration which was on similar lines with the smart phone products with the inclusion of some unique value addition in the value chain of the product.