Process Marketing Assignment
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Marketing is one of the most important processes of the organisation as it increases the success rate of the product produced by the organisation by identifying the exact need of the customers present in the market. In the other words, the term marketing is basically a form of communication between the customer and organisation in which the organisation wants to sell the product to customers for the purpose of gaining profit and customer wants to buy the product to satisfy his or her needs. The main concept of marketing is to communicate the right message to the right customers so that they can purchase the goods or services according to their needs. The process of marketing includes various concepts such as buying behaviour, segmentation, targeting etc. For the better understanding of the concepts of marketing and its principles, I am taking the case study of “Appy food and drinks”.
Task 1 Process Of Marketing
1.1 Explain the various elements of the marketing process with suitable examples from Appy foods and drinks.
Marketing is a term that helps the organisation in satisfying the exact need of the customers and this can’t be possible without a deep analysis and research on the market and customers. Thus, the process of marketing includes the following steps:
Setting of objectives: this is the important step of the marketing process as it defines the main motive of the organisation to be in the market as in the case of Appy foods and drinks, the main motive of the organisation is to keep the children and families happy and healthier.
Situation Analysis:Once the objective is defined, then it is very important for the organisation to analyse the situations and conditions of the market with the help of market research (to identify the capabilities of market), customer analysis (to identify the need and wants of customers) and competitor analysis (to identify the strength of competitors) (Huang & Sarigollo, 2012). Following are some other analyses that are also included in situation analysis:
- SWOT Analysis: SWOT analysis done by the McDonald is explained in the following diagram:
· Products are low calories and low in sugar.
· Healthy for families and children as it does not have any artificial stuff.
· Absence of snacks etc.
· Millennial generation
- PEST Analysis: PEST analysis of the organisation includes the political, economical, social and technological factors. These factors will be discussed afterward in this report in detail.
Figure 1: PEST analysis
Marketing strategy:Marketing strategy are the actions that the organisation takes after analysing the environment of the business. In the context of Appy food and drinks, the marketing strategy includes:
- Segmentation:the marketing strategy that divides the markets into the various segments. Appy foods and drink also has divided its segments into various sub-segments according to behavioural, geographical, and psychographic basis.
- Targeting:the marketing strategy that helps the organisation in choosing the best segment from the various sub-segments. The selection of best segments highly depends on the available resources and the capability of the organisation.
- Positioning:the marketing strategy that can help Appy foods and drinks in creating a positive image of the product in the mind of customers (Kim & Hyun, 2011).
Marketing mix decisions:these are also known as 4P’s. These are the decisions that Appy foods and drinks have to take on the products launched by the organisation. These decisions include:
- What to produce that can satisfy the targeted customers, how to produced, design and quality of the product (PRODUCT)
- What price the targeted customers willing to pay, the cost of product, (PRICE)
- The place where Appy food and drink can distribute the product (PLACE)
- Advertising, public relation, campaigning etc (PROMOTION)
Implementation and control:this is the last step of marketing process that enables the organisation to implement the actions or strategies and also helps the organisation in controlling all the factors that can influence or affect the process.
1.2 Evaluate the benefits and costs of a marketing orientation for Appy foods and drinks.
The marketing orientation is a concept that works on the exact need of the customers and tells the organisation about the valuable information about the customers such as their needs, wants, spending power, nature etc. Earlier the production concept was in prevalent where the main focus of the organisation was on the production unit but nowadays most of the organisation is using these concepts and gaining the success into the market.
“Appy foods and drinks” company is also using the marketing orientation concepts by offering the products of low calories and sugar as now days most of the beverages companies are targeting youths and offers the refreshment drinks for them. These refreshments are high in calories and sugar and these products also have artificial stuff that could be bad for the customers. “Appy foods and drinks” recognised the need of the products that are low in sugar in calories and also don’t has artificial stuff. Thus the company is offering a range of foods and drinks option for the children and families. Benefits, “Appy foods and drinks” can avail from the marketing concepts, are mentioned below:
- Customer satisfaction: the customer keeps the customer’s satisfaction first in its priority list and marketing orientation strategy always tries to meet the level of the satisfaction to the customer by the products offered by companies (Liou, et al 2011). If the product is strongly fulfil the need of the customer then the customer will buy the product by paying double in money. This has been proved in the recent research done by Boston Consulting Group in USA; the millennial would like to choose healthy options like organic food, in spite of tougher economic conditions.
- Customer loyalty: the customer satisfaction brings the customer loyalty for the organisation. If the customer is getting the product what is satisfy their need and under the spending range for them, they will buy that product only for sure. The marketing orientation brings the loyalty to the organisation.
When the marketing orientation concept enables the organisation to catch the maximum numbers of the customers, then obviously the cost of the strategy would be high. In other words, the cost of the marketing orientation is very high because the whole process of marketing orientation includes:
- Researches and finding.
- Interviews of experts.
- Recruitment etc.
Task 2 Concept of Segmentation, Targeting and Positioning
2.1 Show three macro and three micro environmental factors which influence marketing decisions in “Appy foods and drinks”.
The macro and micro environmental factors that could influence marketing decision of “Appy foods and drinks” are described below:
Micro environmental factor:these are the factors that could be controlled by “Appy foods and drinks”, such as:
Customer: Customers are the game player for any organisation. In the case of “Appy foods and drinks”, the whole marketing decisions of the organisation depends on the nature, attitude, and choices of the customers.
Competitors: The competitors of “Appy foods and drinks” affects the marketing decision of the company as if the competitors is offering the same product with the value added services at the same price then “Appy foods and drinks” has to reduce the price of the product to attract the customers (Luan & Sudhir, 2010).
Employee: the characteristic of employees such as their experience, skills and knowledge are the real assets of the company. To achieve the marketing objectives or plan such as make the product launched at right time, “Appy foods and drinks” need to keep the employees happy and motivated toward the organisation.
Macro environment factor:These are theenvironmentalfactors that could not be controlled by “Appy foods and drinks”, such as:
Political factor:political conditions such as taxation policies, entry rules also affects the marketing decision especially the decision that are taken for setting the price of the product. Such as if the government charges huge amount under taxation policy then “Appy foods and drinks” has to increase the price of the product.
Economical factor:economic factors such as inflation, exchange policy, employment rate of the country also could affect the marketing decision of “Appy foods and drinks”. For example, at the time of inflation, the employment rate goes down (Murray, Gao & Kotabe, 2011). In this case “Appy foods and drinks” has to reduce the price of the product to make the product available for the customers.
Social factor:the social factors such as value, beliefs, culture and rituals of society also could affect the marketing decision of “Appy foods and drinks”. Such as, for the promotion of product the organisation must choose the campaign that supports thee beliefs and values of the culture of the country.
2.2 Propose segmentation criteria to be used forby “Appy foods and drinks” based on new product.
Segmentation is a process that helps the organisation in dividing the whole population in small segments. These segments are different from each other in various means such as location, occupation, age, gender, lifestyle etc (Powers & Loyka, 2010). The members’ characteristics of one segment remain same. Basically there are four type of segmentation that is geographical (population is divided according to location, region etc.), demographical (population is divided according to age, occupation, gender etc), behavioural (population is divided according to loyalty, usage of product etc.) and psycho-graphical segments (population is divided according to lifestyle, personality etc). The segmentation criteria for new product of “Appy foods and drinks” are as follows:
|Age||15-40, especially the millennial generation who born after 1980|
|Occupation||Students, children, old people and families|
|Life style||Outgoing people and lively people|
|Location and climate||Near schools, colleges and travel destinations|
2.3 Choose a targeting strategy for “Appy foods and drinks” on new product.
Targeting strategy is the strategy that helps the organisation in selecting one or more segments on the basis of the available resources and the capabilities of the organisation. for “Appy foods and drinks” it is very important to choose the targeting strategy wisely as the whole success of the marketing process or plan depends on the fact how well the organisation is able to choose the most favourable market segment. As mentioned in the research conducted by BCG group, the millennial are most interested in adopting the eco friendly products. And an example of targeting millennial has been seen in Adidas as the company won many titles and awards for engaging millennial generation. So it would be beneficial for the company to focus on the age factor of the demographic segmentation for the company as this is the factor that can bring the right customers for “Appy foods and drinks” such as children, old people, millennial (Schoultz, 2013).
According to me, “Appy foods and drinks” should focus on the concentration targeting strategy. This is the strategy in which “Appy foods and drinks” need to focus only on one segment rather than more than one.
2.4 Demonstrate how the buyer behaviour affects marketing activities in different buying situations.
The buying behaviour of customer comprises of the internal and external factors that explains the fact why the customer chooses particular things. These internal and external factors are nature, attitude of customer, spending power, environment etc. The buying behaviour of the customer can easily affect the marketing decision of the business and also can guide the management of the organisation toward the improvements in product if analysed wisely (Sheng, Zhou, & Li, 2011). For the healthy food and drinks, “Appy foods and drinks” also need to analyse the behaviour of the customers. The customers for the healthy food and drink belongs to age 15-40 especially the children, old people and millennial. The customers’ behaviour comprises of the nature, choice, and buying pattern of the customers. Thus the study of consumer behaviour includes psychology, sociology, economics and social anthropology etc. For the Appy foods and drinks, following are the buying situations that can arise:
Modified re-buy: expectations of the millennial generation are very high as they want health, taste and benefits from Appy food and drinks. Thus, the product launched by the Appy Foods and drink could be under modifications as the wants of millennial generation. The customer buying process for this type of buying situation includes following steps:
- Need recognition: In this step, need of the modification such as change in price, design etc, is identified by the customers.
- Information search: the customers search for other products that can satisfy the exact need of them or include these modifications.
- Evaluation of alternatives: evaluation of the benefits of different product is take placed according to the wants of customer.
- Purchase decision: best product is selected, for the millennial generation, the buying decision could be based on following terms:
- Buying decision based on social situations: millennial generation is more likely to buy the product on the basis of the opinion of their family and friends. “Appy foods and drinks” has to do more preparation to promote the healthy foods and drinks among the customers especially the millennial.
- Buying decision based on technology friendly or environment: Millennial generation is very friendly to the technology and the smart phones. For them, the product is existed only if the product has its identity on internet (Sheth, 2011). Before making a purchase decision, they go to internet to fetch the information about the product. Thus, millennial buys the product on the basis of its availability on internet.
- Post purchase behaviour: this step includes the review of the customer about products after purchase.
Straight re-buy: this is the buying situation in which the customer is willing to purchase the current product offered by the organisation as he or she finds it satisfactory in the term of need and wants. In this case, the customer does not want any change in the product offered by the customers. The consumer buying process includes the same stages what the modified re-buy have.
2.5 Propose a new positioning for product of “Appy foods and drinks”.
Positioning is a strategy that helps the organisation in setting an image into the minds of customers. “Appy foods and drinks” is going to make a healthy drinks and foods especially for the children and old people. Hence the positioning of the product should be on the basis of the health issues not on price or competitors basis. For the positioning of the brand, “Appy foods and drinks” may use the tag line such as “A beverages brand that thinks for your health first”. This would attract the attention of each group that is the old people, parents and millennial.
3.1 Explain how the products are developed to sustain the competitive advantagefor “Appy foods and drinks”.
To sustain the competitive advantages, it is very important for the organisation to improve the quality of the product. Following is the process that would help “Appy foods and drinks” in improving the quality of the product and gaining competitive advantages:
Idea generation: the different ideas on introducing the product are developed. The company may get the new ideas with the help of meetings, brainstorming sessions etc.
Idea screening: the most suitable idea is selected for example “Appy foods and drinks” has choose the idea to offer the healthy foods and drinks to the customers.
Concept development and testing: the concept development includes how the product could be developed in the company so that it can gain the success into the market (Steenhuis, Waterlander & Mul, 2011). While in testing, the various types of questioning is done in front of true customers of the company so that they can recommend how the quality could be improved to more level.
Business analysis: the success of any idea for the business means it has gain profit in terms of money from the market. Thus, “Appy foods and drinks” must go for the business analysis and should calculate cost, profit etc.
Product development: if the product is profitable for “Appy foods and drinks” then it must go for development of product.
Test marketing: experts scrutinises the product in all aspects in different circumstances.
Commercialisation: the decisions on the marketing and campaign are taken.
Launch: the end product is released among the true customers of product.
3.2 Explain how distribution will be arranged to provide customers’ convenience for “Appy foods and drinks”.
The distribution strategy enables the organisation to make the product available to the end customers. As “Appy foods and drinks” is going to launch healthy foods and drinks so the organisation must sure about the places where most of its customers are present. “Appy foods and drinks” is targeting the children, old people and millennial then the places like malls, parks, departmental stores, restaurants and canteen or cafeteria would be best places to place the product. “Appy foods and drinks” may also use the intensive distribution strategy (Tu, Wang & Chang, 2012). According to this strategy, the customers will buy the product if it is highly available in the market. So “Appy foods and drinks” needs to make the product highly available in the markets such as in mall, local market, departmental stores etc.
3.3 Explain how you would set the price for new product to reflect on “Appy foods and drinks”objectives and market conditions.
As mentioned in the case, the mission of “Appy foods and drinks” is “To become No1 healthier choice for families and its objective is to keep the families healthy and happy. The pricing strategy is used to set the price of the products after analysing the factors like cost of raw material, labour cost, taxation policies etc. “Appy foods and drinks” may choose the penetration pricing strategy at the initial level only to make the customers comfortable about the product offered by the company and also to gain the competitive advantage over the competitors (Becerra, Santaló & Silva, 2013). “Appy foods and drinks” can go for premium pricing strategy later to gain the market share and organisational growth. Premium pricing strategy is a strategy in which the prices of the product are set at higher level as it put a positive impression into the minds of the customers as high price is a symbol of high quality product.
3.4 Illustrate how the promotional activityis integrated to achieve marketing objectives of new product.
Promotional activity is very important for the organisation as it communicate the right messages to the right targeted customers of the organisation. Main aim of the promotional activity is to make the customer aware of the information about the product going to launch soon. Following are the ways through which “Appy foods and drinks” can meet its marketing objectives:
Advertising: Advertising of the product offered by “Appy foods and drinks” is very important as it can communicate the message of company to the right customer through TV, radio and newspaper. The millennial generation could get the information about product from TV and newspaper and old people can get the information from advertisements in newspaper (Turnbull & Valla, 2013).
Public relation: public relation is used to maintain good relationship with the customers. To increase the chances of success for “Appy foods and drinks”, the company need to maintain customer handling department separately so that the quarries could be answered and problems can get the solutions.
3.5 Analysis the additional elements of the extended marketing mix for new product from “Appy foods and drinks”.
The extended marketing mixes are listed below:
People:People elements of the marketing mix represent the employees of the organisation. The employees of “Appy foods and drinks” should be well dressed and it is the responsibility of the organisation to provide them training program on the personality developments and communications skills especially for the sales people.
Process:Process element includes the manufacturing or production units of the organisation. For “Appy foods and drinks”, the delivery of raw material, end product, the production of end product all comes under process elements (Williams & Chinn, 2010). For the success of the “Appy foods and drinks”, smoothly executions of these processes are very important.
Physical evidence:For the customer, the physical evidence is the logo, design and atmosphere of company. If handled properly, the physical evidence is also works as an end product.
4.1 Plan and present marketing mixes for two different segments in consumer markets for new product.
Marketing mixes for the different segment in consumer market for new product are as follows:
Marketing Mix for demographical segment: The age factor of the demographic segmentation is considered. The marketing mix is as follows:
- Product:the product includes healthy foods and drinks, products with low sugar or low calories.
- Price:the penetration pricing policy could be used at the initial level of product life cycle.
- Place: the customer can get the product from malls, restaurants, departmental store, super markets etc (Wilson, Daniel & Donald, 2002).
- Promotion:advertisements in TV, newspaper etc.
Marketing mix for Psychographic segment: the lifestyle factor is considered in this segment. The marketing mix is as follows:
- Product:the product with low sugar and low calories.
- Price:price of the product should be based on the premium pricing strategy as the customers of this segment will have high spending power.
- Place:“Appy foods and drinks” need to place the product in bars, Jims, clubs, malls, restaurants etc.
- Promotion: advertisements in newspaper, advertising campaign etc.
4.2 Illustrate the differences in marketing this product to businesses rather than consumers.
There is a huge difference in the marketing of the product to business rather than consumers as the business buyer has complex nature than consumer and more educated then consumer. Counterexample the case of “Appy foods and drinks”, if the company is looking for the business buyer then it has to keep its sales forces up to dated about the information of the industry such as numbers of competitors, the special quality of the products etc. while selling the product to the customer direct, the sales person only need the information about the product (Yuan & Han, 2011). The nature of the buying process of both (the business buyer and customers) is totally different as the business buyer needs the large quantity of the product and consumers demands less quantity of product. The numbers of consumers are very much in the comparison of the business buyers.
4.3 Show how and why international marketing differs from domestic marketing
The difference in the marketing of the product domestically and internationally is mentioned below:
- While marketing the product within the boundaries, “Appy foods and drinks” would be already aware of the taste, culture of the customers while in marketing the product internationally, the organisation needs intensive researches on the taste and need of the customers.
- The political, economical, social conditions are different in international market. Even, “Appy foods and drinks” has to face the many challenges in international market in the comparison of domestic market (Zhang, 2012).
- Nature of the customer, buying behaviour and pattern are totally different in international marketing.
- Culture and ritual also plays a very important part while market the product internationally.
Healthy food and drinks are the needs and demand of the customers as now they are being more health conscious. In the above report, the marketing process for the healthy foods and drink is explained along with benefits and costs of marketing orientation. The strategies such as segmentation, targeting, and positioning, pricing, distribution are also explained. The effect on “Appy foods and drinks” is also highlighted if the company decides to sell the product to business buyer or in international market.
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