B203A – Q. Week 7 – Marketing – Chapter 1 – Chapter 2 Q1) Define

B203A – Q. Week 7 – Marketing – Chapter 1 – Chapter 2
Q1) Define the term “Marketing”, and discuss in some details the
evolution of the marketing concept throughout the time.
Marketing: an organizational function and a set of processes for creating,
communicating and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its
stakeholders.
Marketing indeed must be viewed as a process, of analysis to gain market
insights, strategy decisions and the management of marketing programs in
order to implement the desired marketing strategy.
The definition of marketing relates to more than just tangible goods, that
marketing activities occur in a dynamic environment and that such activities
are performed by individuals as well as organizations.
The goal is to satisfy targeted customers and stakeholders, seeking their
loyalty and consumptions, in a way that adds value for the organization and
its stakeholders.
Marketing consists of individual and organizational activities that facilitate
and expedite satisfying exchange relationships in a dynamic environment
through the creation, distribution, promotion and pricing of goods, services
and ideas.
Marketing: is the management process which identifies, anticipates, and
supplies customer requirements efficiently and profitably.
Marketing: is the sum of all the activities involved in planning, pricing,
promoting, distributing, and selling of goods and services to satisfy
consumers need and want.
Marketing concept throughout the time:
1) The Production Era – Second half of the nineteenth century
“The period of mass production following industrialization”
The industrial revolution was in full swing in Europe and the US.
Electricity, railways, the division of labor, the assembly line and mass
production made it possible to manufacture products more efficiently.
Products poured into the marketplace, where consumer demand for
manufactured goods was strong.
This continued into the early part of the last century, encouraged by the
scientific management movement that championed rigidly structured jobs
and pay based on output.
2) The Sales Era – in the 1920s
Business people believed that the most important marketing activities were
personal selling and advertising
The strong consumer demand for products subsided. Companies realized
that products, which by this time could be made quite efficiently would have
to be „sold‟ to consumers.
From the mid-1920s to the early 1950s, companies viewed sales as the
major means of increasing profits.
As a result this period came to have a sales orientation.
3) The Marketing Era – early 1950s
“As organizations realized the importance of knowing customers‟ needs,
companies entered into the marketing era – the era of customer
orientation”
Some business people began to recognize that efficient production and
extensive promotion of products did not guarantee that customers would
buy them.
Companies found that they first had to determine what customers wanted
and then produce it, rather than simply making products first and then
trying to change customers‟ needs to correspond to what was being
produced.
4) The Relationship Marketing Era – 1990s
The current ear is moving away from transaction-based marketing and
towards nurturing ongoing relationships.
Many organizations had grasped the basics of the marketing concept and
had created marketing functions.
Their view of marketing was often largely transaction based.
The priority for marketing was to identify customer needs, determine priority
target markets and achieve sales through marketing programs.
The focus was on the individual transaction or exchange.
Relationship marketing refers to „long-term, mutually beneficial
arrangements in which both the buyer and seller focus on value
enhancement through the creation of more satisfying exchanges‟.
Relationship marketing continually deepens the buyer‟s trust in the
company and, as the customer‟s confidence grows, this in turn increases
the company‟s understanding of the customer‟s needs.
Successful marketers respond to customers‟ needs and strive to increase
value to buyers over time.
Eventually this interaction becomes a solid relationship that allows for
cooperation and mutual dependency.
As this era developed it suggested that beside the importance of customers
relationships, also suppliers, agents, distributors, recruiters, referral bodies
(i.e. financial advisers), influencers (i.e. government departments), all
should be „marketed to‟ in order to ensure their support, understanding and
resources.
The internal workforce must be motivated and provided with a clear
understanding of a company‟s target market strategy, marketing mix
activities, and of the corporate strategy and planned direction.
Q2) In order to make the devised marketing strategy a reality,
marketers must specify a set of marketing mix ingredients. Discuss
the statement and support your answer with a proper example.
Traditionally, the marketing mix was deemed to consist of four major
components: product, place (distribution), promotion and price – 4 Ps.
Increasingly a fifth component is viewed as „people‟, who provide customer
service and interact with customers and organizations within the supply
chain.
These components are called „marketing mix decision variables‟. They are
often viewed as controllable variables because they can be changed.
There are limits to how much these variables can be altered.
(i.e. because of economic conditions manager may not be free to adjust
prices daily).
Changes in sizes, colors, shapes and designs of most tangible goods are
expensive; therefore such product features cannot be altered very often.
Promotional campaigns and the methods used to distribute products
ordinarily cannot be changed overnight. People too require training and
motivating and cannot be recruited or sacked overnight.
Marketing managers must develop a marketing mix that precisely matches
the needs of the people – or organizations in business-to-business
marketing – in the target market.
Marketing managers need to collect information about those needs that
might include data about age, income, ethnic origin, sex and educational
level of people, etc. in the target market.
With such information managers are better able to develop a product,
service package, distribution system, promotion program and price that will
satisfy the people in the target market.
1) A product can be a good, a service or an idea.
The product variable is the aspect of the marketing mix that deals with
researching consumers‟ product wants and designing a product with the
desired characteristics.
It also involves the creation or alteration of packaging and brand names,
and may include decisions about guarantees, repair services and customer
support.
It is important because it directly involve creating products and services
that satisfy consumers; needs and wants.
To maintain a satisfying set of products that will help an organization
achieve its goals, a marketer must be able to develop new products, modify
existing ones and eliminate those that no longer satisfy buyers or yield
acceptable profits.
2) To satisfy consumers, products must be available at the right time and in
a convenient location.
In dealing with the place/distribution variable, a marketing manager seeks
to make products available in the quantities desired to as many customers
as possible, and to keep the total inventory, transport and storage costs as
low as possible.
Marketing manager may become involve in selecting and motivating
intermediaries (wholesalers, retailers and dealers), establishing and
maintaining inventory control procedures, and developing and managing
transport and storage systems.
3) The promotion variable relates to communication activities that are used
to inform one or more groups of people about an organization and its
products.
Promotion can be aimed at increasing public awareness of an organization
and of new or existing products.
Promotion can serve to educate consumers about product features or to
urge/encourage people to take a particular stance/situation on a political or
social issue.
It may be also used to keep interest strong in an established product that
has been available for decades…
4) The price variable related to activities associated with establishing
pricing policies and determining product prices.
Price is a critical component of the marketing mix because consumers and
business customers are concerned about the value obtained in an
exchange.
Price is often used as a competitive tool; in fact, extremely intense price
competition sometimes leads to price wars.
5) Marketers of services include people as a core element, along with other
ingredients.
As marketers, they manipulate the rest of the marketing mix.
As intermediaries in the marketing channel, they help make products and
services available to the market-place.
As consumers or organizational purchasers, they create the need for the
field of marketing.
The people variable reflects the level of customer service, advice, sales
support and after-sales back-up required, involving recruitment policies,
training, retention and motivation of key personnel.
Q3) Differentiate between “Marketing Strategy”, “A Strategic Market
Plan”, and “Strategic Business Unit”.
1) Marketing strategy: articulated the best uses of an organization‟s
resources and tactics to achieve its marketing objects. It states which
opportunities are to be pursued by an organization, indicates the specific
markets towards which activities are to be targeted, and identifies the types
of competitive advantage that are to be developed and exploited.
The strategy requires clear objectives and a focus in line with an
organization‟s corporate goals; the „right‟ customers must be targeted more
effectively than they are by competitors, and associated marketing mixes
should be developed as marketing programs to implement the marketing
strategy successfully.
2) A strategic market plan is an outline of the methods and resources
required to achieve an organization‟s goals within a specific target market.
It takes into account not only marketing but also all the functional aspects
that must be coordinated, such as production, IT, logistics, finance and
personnel. Also environmental issues is important.
A strategic marketing planning is a process that yields a marketing strategy
that is the framework for a marketing plan. It is a plan of all aspects of an
organization‟s strategy in the marketplace.
Marketing plan includes the framework and entire set of marketing activities
to be performed; it is the written document or blueprint for specifying,
implementing and controlling an organization‟s marketing activities and
marketing mixes. It deals primarily with implementing the marketing
strategy as it relates to target markets and marketing programs. It states
which are priority target markets and details the marketing programs,
specifying also timeframes, budgets and responsibilities.
3) Strategic Business Unit (SBU): is division, product line or other profit
center within a parent company. Each sells a distinct set of products to an
identifiable group of customers, and each competes with a well-defined set
of competitors. Each SBU‟s revenue, costs, investments and strategic
plans can be separated from those of parent company and evaluated.
Q4) Differentiate between the “Mission” and the “Corporate
Strategy”, and then discuss in detail how the mission statement could
benefit the organizations.
Mission: the broad, long-term tasks that the organization wants to
accomplish. A company‟s organizational goal should be derived from its
mission.
Corporate strategy is a strategy that determines how resources are to be
used to meet the organization‟s goals in the areas of production, logistics,
finance, R&D, human resources, IT and marketing.
Corporate strategy planners are concerned with issues such as
diversification, competition, differentiation, interrelationships among
business units, and environmental issues.
Creating or revising a mission statement is very difficult because of the
many complex variables that must be examined.
Mission statement can benefit the organization in five ways:
1- Give it a clear purpose and direction, keeping it on track and preventing
it from drifting.
2- Describes the unique aim of the organization that helps to differentiate it
from similar competing organizations.
3- Keeps the organization focused on customer needs rather than its own
abilities.
4- Provides specific direction and guidelines to top managers for selecting
alternative courses of action.
5- Offers guidance to all employees and managers of an organization, even
if they work in different parts of the world. It is act as a „glue‟.
Q5) Discuss in some details SWOT analysis and apply it to an
example which you are familiar with.
SWOT: assessment of the strengths and weakness, opportunity and
threats in relation of external and internal environmental factors that effect
the business to evaluate it condition and set a long-term plan.
- Strengths and weakness comes from internal environment and it includes:
resources, structure and culture.
-Opportunities and Threats comes from external environment and it
includes: market-share and competitors.
The strengths refers to relate to those internal operational, managerial,
resource and marketing factors that managers believe provide a strong
foundation for their organization‟s activities and for their ability co compete
effectively in the marketplace. (Positive)
Many marketers treat the notion of marketing assets as a means for
classifying strengths.
Weaknesses are those aspects of the organization, its products and
activities in the marketplace that place the organization at a disadvantage
vis-à-vis competitors and in the view of targeted customers. (Negative)
Best practice indicates that an organization should strive to remedy such
faults, particularly those that may be exploited by rivals.
The forefront of the marketing concept is marketing opportunity analysis.
A sound appreciation of marketing environment forces and evolving market
trends is essential for a marketing-oriented organization.
It is difficult to contemplate a scenario in which an organization lacking
such an external awareness is able to develop a truly meaningful marketing
strategy.
Marketing environmental scanning identifies numerous issues that
marketers must consider when developing marketing strategies. These
market developments may offer opportunities (Positive) for marketers to
exploit or they may be the cause of threats (Negative) to the fortunes of an
organization.
The SWOT analysis in its simplistic way, has the benefit of placing an
organization‟s strengths and weaknesses in the context of the identified
opportunities and threats, so implying the extent to which an organization is
capable of leveraging an opportunity or fending off an apparent threat
Q6) Define what is meant by the “Competitive Advantage”, and then
discuss in some details the generic routes to achieve the competitive
advantage. Support your answer with examples.
Competitive advantage – the achievement of superior performance vis-àvis rivals, through differentiation to create distinctive product appeal or
brand identity; through providing customer value and achieving the lowest
delivered cost; or by focusing on narrowly scoped product categories or
market niches so as to be viewed as a leading specialist.
Generic routes to achieve the competitive advantage:
1- Cost leadership. This involves developing a low cost base, often through
economies of scale associated with high market share and economies of
experience, to give high contribution. Very tight cost controls are essential
to the success of this strategy.
2- Differentiation. Companies adopting a differentiation strategy strive to
offer product and marketing programs that have a distinct advantage or are
different to those offered by competitors. It can be achieved by creativity
and innovation, novel distribution channel, pricing and customer service
policies.
3- Focus. Companies must maintain close links with the market so that
product and marketing effort are designed with a particular target group in
mind. Typically of small size, unable to achieve cost leadership or maintain
significant differentiation, such companies succeed by effectively meeting
customer needs that may be being missed by larger players in the market.
Failure to achieve any of these strategic can result in companies becoming
„stuck in the middle‟, with no real competitive advantage.
It is not usually possible to simultaneously follow all three generic strategies
for competitive advantage, but it is common for businesses to gain cost
leadership while also differentiating their proposition, and also for
organizations to seek both a focused and a differentiated approach.
Q7) Define what is meant by the “Differential Advantage”, and then
explain why it is important for organizations to acquire a differential
advantage.
A differential advantage is an attribute of a brand, product, service or
marketing mix that is desired by the targeted customer and provided by
only one supplier: it is a unique edge over rivals in satisfying this customer.
If a marketing mix is developed that matches target market needs and
expectations and is superior to those offered by competitors, there is a real
or perceived differential advantage.
If successful in developing a differential advantage, an organization is likely
to have its differential advantage copied by rivals.
Achieving a differential advantage or competitive edge requires an
organization to make the most of its opportunities and resources while
offering customers a satisfactory mix of tangible and intangible benefits,
and monitor competitors activities.
There are many different sources f differential advantage that companies
can pursue:
- Unique to the one organization, otherwise it is only a strength or
capability.
- Desirable to the targeted customer.
- Not simply the expected marketing mix taken for granted by the target
market.
- Not simply an internal perception by a team of marketers.
Q8) There is a straightforward sequence that marketers follow when
attempting to identify a differential advantage. Discuss the statement.
1- Identify the market‟s segments.
2- Establish what product and service attributes are desired and demand
by customers in each segment.
3- Decide which of these attributes the company in question offers.
4- Determine which attributes the company‟s competitors offer.
5- Consider what the marketplace perceives the competitors‟ genuine
strengths to be.
6- Identify whether any gaps exist between customer expectations of the
product/service on offer and perceptions of the competitors‟ marketing
programs.
7- Consider whether any gaps identified in step 6 are matched by the
company and its own offerings.
8- Question whether any of these potential advantages for the company
can be emphasized through sales and marketing programs.
9- Consider the sustainability of these advantages for the company.
10- If there are not current advantages for the company, given the gaps
identified between competitors; propositions and customer expectations,
consider which areas offer potential for developing a future differential
advantage.
11- Detail the changes the company must make to its research and
development, engineering, sales and marketing activities.