MARKETING

Introduction
Private limited company: Tesco
Choosing Tesco as the company for my course work the reason of choosing Tesco is very
well company in U.K. Tesco's Ownership which is owned by several partners, Tesco is
owned by thousands of people. This is because Tesco is a public limited company or lc. The
reason for Tesco being a lc is because of its mammoth si!e. "ue to its si!e it would be hard
to raise enough funds for Tesco if it was owned by a sole trader or by partners whereas in a
lc #like Tesco$ the company is owned by shareholders who fund the company. This happens
by the people buying shares in the company and becoming shareholders. %ometimes this may
seem more appealing to the people investing in a company as they have the lu&ury of having
limited liability. 'imited liability is where if the business goes bankrupt the people only lose
whatever they invested in the business this is common with lc's, 'td's #rivate limited
company$ Unlimited liability applies to soul traders and partnerships if one of these went
bankrupt they could lose all their personal assets over it and the money they put into it.
Task 1:
Marketing is traditionally the means by which an organi!ation communicates to,
connects with, and engages its target audience to convey the value of and ultimately sell
its products and services. (owever, since the emergence of digital media, in particular
social media and technology innovations, it has increasingly become more about
companies building deeper, more meaningful and lasting relationships with the people
that they want to buy their products and services. The ever)increasingly fragmented
world of media complicates marketers* ability connect and, at the same, time presents
incredible opportunity to forge new territory.

Marketing Process or tesco:
T+%CO is top leading retailer in UK. ,t manages over a thousand supermarkets,
hypermarkets, and convenience store in the United Kingdom, ,reland, central +urope, and
-sia. T+%CO started life in ././ when 0ack Cohen started surplus groceries from a stall in
the +ast end of 'ondon. 12 Cohen made profit of . from sales of 3 on his first day. T+%CO
brand first appear five years after in ./34 when he bought shipment of tea from a 12 T. +
%tockwell. 5rom that time T+%CO slowly improve in retail business and now they are take
top position in UK retail business. Tesco aim is provide best products for their customer and
make sure about customer re6uirements. !"ave# 1$$$%&
Main '(aracteristics o Marketing
There are four main characteristics of marketing oriented organi!ation7
1 | P a g e
.. Production )rientation: This is organi!ational or values where competitive
advantage is attained through increase productivity or volume. ,t's a traditional
orientation that e&ists in the (enry ford era. ,n modern times this is practiced in
compliment with other orientations.
4. Product )rientation: -n organi!ational culture where competitive advantage gained
through the creation of product leadership #high 6uality features$ becomes the sole
ob8ective of a business.
9. *ales orientations: -n organi!ational culture where competitive advantage attainted
through the creation of superior sales force to generate ade6uate sales becomes the
ob8ectives of a business. Carphone warehouse attained its ob8ectives through
telemarketing.
3. Marketing )rientations: -n organi!ational culture where beating competition
through the creation of superior customer value is the paramount ob8ective throughout
the business
Key elements o market orientation
.. 'ustomer orientation: Understanding customer well enough to create superior value
for them.
4. +ong term proit ocus7 (aving this as strategic focus business ob8ective.
9. Interunctional coordination: 1obilising all company resource to create value for
target customer.
3. 'ompetitor orientation: -wareness of the short and long term capabilities of
competitors.
:. )rgani,ational 'ulture: 1anagement and employee behavior to focus on customer
satisfactions a value.
-eneits o marketing approac(
(igh customer satisfaction, loyalty and retention
,ncrease sales and market share
;rowth in profitability
+nhanced competitive advantage
,mproved corporate image
'ost o marketing approac(
,ncreasing customer e&pectations
%taff training and development needs
Technology re6uirement for customer contact and improved ways of doing business
,ncrease resource demand to providing customer specific marketing
Comple& customer growing needs and power
2 | P a g e
Market orientation assessment
Customer orientation !"ave# 1$$$%&
2egular collection of information on customer needs
Customer focus corporate policies and ob8ectives
2egular customer satisfaction review and improved service levels
2esponsiveness to customer needs
1arket offers reflecting the various needs of distinct segments
Competitor orientation
2egular collection of information on competitor activities
2esponsiveness to competitor actions
<ench marking on competitor offering
"ifferentiating on the basis of customer needs
Market segmentation criteria
,n addition to having different needs, for segments to be practical they should be evaluated
against the following criteria7
Identiia.le: the differentiating attributes of the segments must be measurable so that
they can be identified
Accessi.le: the segments must be reachable through communication and distribution
channels.
*u.stantial: the segments should be sufficiently large to 8ustify the resource re6uired
to target them.
/ni0ue needs: to 8ustify separate offerings, the segments must respond differently to
the different marketing mi&es.
"ura.le: the segments should be relatively stable to minimi!e the cost of fre6uent
changes.
- good market segmentation will result in segment that are internally homogenous and
e&ternally heterogeneous, that is, as similar as possible within the segment, and as different as
possible between segments.
<ase for %egmentation in consumer markets7
Consumer markets can be segmented on the following customer characteristics7
.. ;eographic
4. "emographic
9. sychographic
3 | P a g e
3. <ehavioralistic
Targeting *trategy
There are several different target)market strategies that may be followed. Targeting strategies
usually can be categori!ed as one of the following7
%ingle)segment7 strategy ) also known as a concentrated strategy. One market
segment #not the entire market$ is served with one marketing mi&. - single)segment
approach often is the strategy of choice for smaller companies with limited resources.
%elective speciali!ation7 this is a multiple)segment strategy, also known as a
differentiated strategy. "ifferent marketing mi&es are offered to different segments.
roduct speciali!ation7 the firm speciali!es in serving a particular product and tailors
it to different market segments. !'(arles# 1osep( and Mc"aniel# 2311%
1arket speciali!ation7 the firm speciali!es in serving a particular market segment and
offers that segment an array of different products.
5ull market coverage7 the firm attempts to serve the entire market. This coverage can
be achieved by means of either a mass market strategy in which a single
undifferentiated marketing mi& is offered to the entire market, or by a differentiated
strategy in which a separate marketing mi& is offered to each segment.
This all factor effects on T+%CO marketing operation because customer is now king and
every business have to make sure about there needs. 5or e&ample in local market means UK
T+%CO can sale pork but in -sian market it is not possible to sale pork in every place.
Organi!ation duty to make sure about customer re6uirements and also maintain there cultural
and social wants !'(arles# 1osep( and Mc"aniel# 2311%
Aects o .uyer .e(avior
One of the most important parts of marketing is buyer or customer behavior. <ecause of that
T+%CO must understand why a customer or buyer makes a purchase. =ithout such an
understanding it is hard for T+%CO to respond customer's needs and wants.
>-ccording to eter Clark, co)editor of the =ise 1arket and co)author of the loyalty ;uide
reports series,> there are si& ma8or factors that play key roles in influencing the loyalty and
commitment of customer7 !'(arles# 1osep( and Mc"aniel# 2311%
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This si& factors working when every customer goes to buy something. There for T+%CO
contain to this factor. <ecause of customer different needs T+%CO has focus to maintain
what they want and it also depend on different buying situation.
There are two main factors that influence a purchase7
4 | P a g e
.. 'ultural actor: Cultural factors have a significant impact on customer behavior.
Culture is the most basic cause of person's wants and behavior. ;rowing up, children
learn basic values, perception, and wants from the family and other important groups.
4. *ocial actor: - customer buying behavior is also influenced by social factors, such
as the groups to which the customer belongs and social status.
This all factor effects on T+%CO marketing operation because customer is now king and
every business have to make sure about there needs. 5or e&ample in local market means UK
T+%CO can sale pork but in -sian market it is not possible to sale pork in every place.
Organi!ation duty to make sure about customer re6uirements and also maintain there cultural
and social wants.
Marketing Mi:
The concept of a marketing mi& is best described by #.//?, 39$ claiming that is >the set of
controllable marketing variables that the firm blends to produce the response it wants in the
target market> it is compose of 3ps7 product, price, place, and promotion. ,n the conte&t of
T+%CO, their entry to the Chiness market should significantly adapt to the culture of the
consumer in the said location. (owever, the company should take into keep in mind the basic
standards to which their company adheres to. !'(arles# 1osep( and Mc"aniel# 2311%
-. roduct7 The management of T+%CO should set off product development strategies once
they have taken control of their shop in China by marketing their e&isting products, e&porting
products in different province of the country and in so doing pressing forward on the possible
opportunities of boosting the company's market penetration and market share. Tesco should
consider restoring or revising models of their product to provide the Chiness customers what
they want and what they need. ,n this way Tesco could develop the store's own brand product
which could be marketed strategically within the territory of china.
<. rice7 'ooking at the situation of Tesco, one way that it could ac6uire cost advantage is by
enhancing process efficiency, e&panding e&clusive contact to a large supplier of lower cost
materials, or steering clear of several costs in general. ,f rival organi!ations in the country are
incapable to lower their costs by a comparable 6uantity, Tesco will be capable of sustaining a
competitive anchored cost leadership. !'(arles# 1osep( and Mc"aniel# 2311%
C. lace7 To develop its success in its retail operations, the Tesco should make multi)million
pound investments in store e&pansion in low)income districts and localities. <y getting
involved with similar)minded public and private sector groups like local community based
associations, colleges, and chambers of commerce, the Tesco will be able to open sites in
economically disadvantage districts in china. Targeting these areas will enable the company
to gain of local luminaries and gain favor from the local government by providing
employment to the locals.
". romotion7 The Tesco's approach should constitute a long)standing strategic plan that
centers on generation value to e&pand the loyalty of their customer which takes account of
preserving a well)built central Chinese business, to be as strapping in non)food as food
product and services, to develop globally and to set the ball rolling on retailing services like
on)line shopping. !'(arles# 1osep( and Mc"aniel# 2311%
The bottom)line is that ob8ect of the marketing mi& is to satisfy the customer and in this
5 | P a g e
analysis we can see place play most important roll in china situation. <ecause of that Tesco
not catch that much success like UK or other place. Other hand tesco product price is
contribute to get success of Tesco and for that in UK Tesco is a number one retail company.
"ifferent between domestic and international market
There are eight main factors which is play the key roles to different between domestic and
international market. The factor is below7
.. 1arket si!e
4. 1arket rate of growth
9. ;overnment regulation
3. +conomic and political factor
:. 1arket share
@. roduct fit
A. Contribution margin
B. 1arket support !-PP# 2313%
These are the key factor which is making different in global and domestic market. 5or
e&ample7 ,n the case of Tesco, 1alaysia, economic development condition, food supply
chains are being rationali!ed according to more complicated ma8or retail and food service
consumers who wants to make business with fewer, larger, better)resourced manufacturers,
suppliers and farmers. Therefore, power is polari!ing the global retail industry. (owever
Tesco has a long term business strategy in order increase profits, the company has three
different dimensions in their strategies, and these are7 corporate, functional and global or
international. ,n this e&ample we can see that how and why international marketing operation
of Tesco deferent from domestic market operation. !-PP# 2313%
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tescopestles5ot.cg&(tml !access<39<31<2313%
"ierent marketing strategy o Tesco
Tesco brought about o lot of changes in these marketing strategies and has grown to become
UK's number one retailer. >Today in the UK, the retailer has been dominant force more than
.? years>)#%eth, -. C 2andall ;., The ;rocers7 The 2ise and 2ise of the supermarket
Chains$. ,f we look in Tesco history we can see Tesco always change there strategy within
time base and for that they get success constantly. !-PP# 2313%
,n ./A9 'esile orter and managing director lan 1ac'aurin applied one philosophy that is
>pile it high, sell it cheap> which had left the company >stagnating> and with a >bad image>.
,n ./AA Tesco launched >Operation Checkout> which included the abandonment of green
%hield stamps, price reductions and centrali!ed buying for all stores. The result is a rise in
market share of 3D in two month.
1$$3s
6 | P a g e
,n .//3 the company took over the supermarket chain =illiam 'ow, successfully fighting off
%ainsbury's for control of the "undee)based firm which operated :A stores. Tesco introduced
a loyalty card, branded 'Clubcard' in .//: and later an internet shopping service. ,n .//A
Tesco and +sco #part of +&&onmobil$ forged a business alliance that included several petrol
filling stations on lease from +sco, with Tesco operating the attached stores under the
+&press format. Ten years later over @?? TescoE+sco stores can now be found across the UK.
2333s
,n October 4??9 the company launched a UK telecoms division, comprising mobile and
home phone service, to complement its e&isting internet service provider business. -ugust
4??3, it also launched a broadband service. !-PP# 2313%
,n 4??A Tesco took part in a 8oint venture with O4 to from the Tesco 1obile virtual network
operator in ,reland. ,n -pril 4??/, Tesco announced that it had created a super tomato
>doesn't leak.> =e can see here that how Tesco change their strategy from beginning to until
now. Other hand we can see Tosco's almost entire relationship marketing strategy based on
its >Clubcard> scheme. ,t has been able to use the Clubcard very effectively in addressing
different customer segments and in attracting customers of all types. !-PP# 2313%
PE*TE+ Analysis
+%T analysis shows the main e&ternal impacts of organi!ation. +%T+' stands for political,
economical, sociological, technological, ethical, and legal, in T+%CO the following e&ternal
will have great effects whether negatively or positively.
olitical7 following the +uropean integration and free trade -greements, the market has
opened up for <ritish Companies to invest in +astern +urope. Tesco already has @?
(ypermarket store in hungry.
+conomic7 the 2etail sector is fairly recession prawn and also very sensitive t change in
interest rates. %ince the events of %eptember ..th the world economics have suffered heavily,
stock plummeted and price is at all time lows. The world economy is however, now on the up
post %eptember ..th. !-PP# 2313%
%ociological7 Change in consumer taste and lifestyle represent both opportunity and threats
for the industry.
Technological7 change in retailing methods as such clothes sales via the internet is now a
common place in retailing. aperless operation, the management and administration of the
company are undertaken on ,T system, which are accessed through secure servers provide
fle&ibility in the running of the business.
+nvironmental7 the threats are in terms of legal conse6uence for livestock's in terms of heath
and safety. The renewal source of resource used in production, namely cotton and wool are
environmentally friendly. !-PP# 2313%
'egal7 the legal factor is national legislation for health and safety both in terms of consumer
7 | P a g e
and also in terms of production of own natural renewable resource for making clothes.
*?)T analysis o TE*')
*trengt(s
T+%CO have secured commercial standing within the global market place wining
2etailer of the Fear 4??B at the >=orld 2etail -wards> this can be used marketing
campaigns to drive advantage towards the demographic base for future growth and
sustainability. !-PP# 2313%
,n an environment where global retail sales are showing decline or level performance
on a like basis T+%CO ;roup have published sales gain of .9D for UK markets and
4@D growth in international markets.
-s a business looking for continued e&pansion T+%CO have reserve funds of credit
coupled with income derived from property portfolio development funds.
?eaknesses
T+%CO finance profit levels were impacted through bad debt, credit card arrears and
household insurance claims.
T+%COs position as a price leader in UK markets can lead to reduced profit margins
in order to retain the key price points on must have commercial items.
;rocer outlets are not set up to operate as specialist in specific areas of product which
can be capitali!ed on by other smaller bespoke retailer.
=hilst current economic conditions suggest T+%CO key value massage will
succeeded there is a weakness in nonessential, mind to high ticket price items which
will suffer from the rising cost of living and lower disposable incomes.
)pportunities
%tatistics suggest T+%CO is the third largest global grocer which indicates a level of
buying power to ensure mainstream economies of scale. !-PP# 2313%
The ac6uisition of (omever provides the opportunity to develop the brand through
-sia, specifically %outh Korea and further grow international markets for the group.
The development of T+%CO "irect through online and catalogue shopping will grow
the use of technology, providing the launch pad for large non food based products
with moderate to high margin returns and less focus on sale and margin per foot
return to space.
8 | P a g e
T(reats
UK and -merica markets have been affected by economic through the >credit crunch>
'ower available income and strategic focus may need to change to lower priced basic
products with less focus on higher priced brands suggesting a switch in price
architecture.
2ising raw material costs from both foods will impact profit margins overall.
Changes to consumer buying behaviors re6uire further analysis ) as technology
develops consumers buying patterns change which will result in product areas
re6uiring evaluation. !-PP# 2313%
5or T+%CO there is a persistent threat of takeover form the market leader =al)1art
who has both means and motive to pursue such action.
Anot(er element o marketing mi:
eople7 eople play c crucial role in the production and delivery of products and service. The
physical presence of people performing the 8ob is a vital aspect of customer satisfaction.
T(e people mi: issue:
.. careful 8ob selection
4. careful policies of selection !-PP# 2313%
9. ,nstitute programmers in staff training etc.
rocess7 process involved the ways in which the market's task is achieved.
T(e process mi::
.. company policies
4. accessibility
9. service feature
3. Capacity levels etc.
hysical7 The physical evidence relates to those aspects of the service provider that customer
can see and fell so as to from an impression of the service or its provider. !-PP# 2313%
T(e p(ysical evidence mi::
.. logos
4. colours
9. e6uipment
3. company vehicles
:. labels
9 | P a g e
@. ackaging etc.
Three new marketing mi&es also create importance in marketing. Therefore Tesco*s
marketing operation also effect by this new marketing mi&.
Task 2:
Micro environment
1icro environment consists of the different types of stakeholders outside the organisation.
The constituents or stakeholders of the micro environment include customers, suppliers,
creditors, distributors, dealers, etc. -lthough these constituents aren*t the direct control of the
organisation, still they can be influence by organisation through its policies and strategies
@or eg: 1icro environment factors which could influence "ynamic ,nternational 'td are7
Employees: +mployees are critical to success of the organisation, the dynamic international
is hand gloves manufacturing company and their employees are the ones responsible for
keeping their company going. +mploying the right stuff, providing them trainings and
keeping them motivated gives ability to meet customer*s deadlines and produce high 6uality
hand gloves. !1on# Peter and Patric# 233A%
10 | P a g e
*uppliers: %uppliers are those that provide goods and services which are transformed into
value by organisations. Tesco company should look for right suppliers and keeping good
relationship is crucial to organisation, getting competitive prices and high 6uality goods are
the one of the good relationship e&amples.
'ustomers: Customers are the ones who make a marketG they are the ones who buy goods
and using them. Customers are the reason why companies start business, why companies
developing new products and differentiated their e&isting products. <y selling the goods to
the customers organisations makes a profit, that*s why Tesco company have to concentrate on
satisfying their customers* needs and wants. !1on# Peter and Patric# 233A%
Macro environment
The macro environment consists of constituents that are beyond of the business organisation.
The constituents are social)cultural, technological, economical and political factors which
constitute their own individual environments
Political 7 ;overnment is the one that responsible providing the Hrules of the game* which
make business function smoothly, government responsible for introducing new laws and
regulations, ta&ation for the business. 5or e&ample if government decides to cut funds for
public sector in order to save money, all councils may have to look for cheaper options to buy
gloves for their workmen, which means Tesco company could lose their customers.
Economic: ,t is very important to look at economic environment. -lmost every business
depends on it, some countries have strong economy some countries don*t. +conomic
environment is very dynamicG it keeps on changing in changes with government policies. ,f
economy is poor there will be negative effect on the business and organisations would have
to find the way out to make people buy their products. 5or e&ample if there would be high
unemployment in the country Tesco companywould have to use different marketing
strategies by using commercials or advertising, or dropping their prices to show compassion
for their customers. !1on# Peter and Patric# 233A%
Tec(nology: Technology is changing fast and the adoption of the new technology could be a
good investment in the business, for e&ample Tesco companydecide to buy a new
manufacturing machine , this could be a competitive advantage for them, and it could
increase a speed of the production and save the money instead of hiring e&tra employees.
*egmentation 'riteria
To segment the market is crucial because you have to allocate resources and to know who
you are concentrated at. There are four types of segmentations which is geographic,
demographic, psychographic, and behavioural segmentation. , will be proposing two
segmentation criteria for Tesco Company which is7 !1on# Peter and Patric# 233A%
11 | P a g e
"emograp(ic segmentation
"ave Ieedham #.///$ suggests that this is the most commonly approach to the market. The
division of consumer groups according to demographic variables such as age, gender,
income, occupation, education, family si!e helps you to target market. Tesco company could
use this to understand how these characteristics influence the products they selling. 5or
e&ample, knowing that customer needs changes with age they could promote their products to
meet the needs of all age of groups or using gender segmentation they could increase
productivity buy start selling both male and female hand gloves. !1on# Peter and Patric#
233A%
-e(avioural segmentation
<ehavioural segmentations concerned about buyers behaviour, they are divided into segments
according the way they behave, such as usage of the product, knowledge of the product,
loyalty, and attitude toward the products. 5or e&ample loyal customers might be able pay
e&tra price for a pair of gloves, because their trust the 6uality and standard of the product, but
some may not be interested because they know little or nothing about it.
Targeting *trategies
-nother step after we finish segmentation is targeting. Once the market has been segmented,
the "ynamic ,nternational need choose targeting strategy. Targeting is about which and how
many groups of customers organisations are going to target with its products or services.
There are three targeting strategies7 differentiated, undifferentiated, and concentrated.
"ierentiated strategy
This strategy is when the company decides to target more than a one market segment. Using
this strategy the company can spread risk across the market, so if one segment declines the
company still has revenue from others. The disadvantage is that it re6uires a high level of
marketing e&pertise and will incur higher costs
/ndierentiated strategy
This strategy is when organisation assumes that the market is homogenous unit, in other
words company ignores market segment differences and goes after all market with one
product offering. This approach would suit for large global companies that have strong
offerings, or organisations who sell commodity products. !1on# Peter and Patric# 233A%
'oncentrated strategy
This strategy involves speciali!ing in one specific segment. This can lead to detailed
knowledge of target segmentJs needs and wants, with the added benefit that organisation is
regarded as a specialist over it mass)market competitors. -dvantage of this strategy is that it
12 | P a g e
reduces costs, as there is only one marketing mi& to manage
, think the most suitable targeting strategy for Tesco would be differentiated strategy, because
this strategy is perfect for organisations wishing to grow. Targeting more than one segment
means that Tesco Company would have got more products to offer, so even if some segments
would fail they would still get profit from other segments.

Indentiy actors t(at inluence .uyer .e(avior and purpose a ne5 positioning stratergy
or a product or service o your organi,ation:
'onsumer -uying -e(aviour
=hy do we need to understand customer behaviourK -naly!ing customer*s behaviour helps
to understand why buyers buy and use certain products and services, it helps business to
ad8ust their marketing strategies and promote their products. Consumer buying behaviour is
Jthe decision processes and acts of individuals involved in buying and using products or
servicesJ !1on# Peter and Patric# 233A%
There are many situations that buying behaviour could affect marketing activities. -s ,
illustrated below in the first situation it could depend on customer*s lifestyle. ,f the customer
is young student who doesn*t really know much about technology and needs new laptop,
because the old one is broken down, would probably make up his mind 6uick and easy. =hile
professional ,T specialist would probably take is time and think about performance and
6uality of the product. %econd situation as illustrated below it might be psychological factors,
where customer is loyal to -pple products and belief that is better than any others.
<uying a laptop #first situation$
<uying a laptop #second situation$
Positioning
-fter finishing segmenting and targeting , am going to decide what type of positioning
strategy could tesco use for its products. ositioning strategy helps to differentiate
organisation products and services from its competitors. (avaldar #4?.?$ suggest that
positioning could be defined as the distinct place of products #or service$ occupies in the
minds of the target customers relative to competing products. ,n other word, how the firms
wants its products to be perceived by target customer on important attributes or benefits.
"ifferentiating themselves from competitors is crucial to success, being able to create
different perception about your product in your targeting customer*s minds that is where the
success is. 5irst thing Tesco could try to be different by offering different prices to their
13 | P a g e
customersG however their competitors could switch their prices easy to be competitive.
<ut having good competitive price and 6uality products that what makes different from your
competitors. Tesco should come up new design gloves that are comfortable, long lasting and
safe gloves that could suit both male and female. <eing the first to offer something uni6ue
would be a success. They could even use a slogan for their products such as HThe <est hand
gloves to protect your handsJ. !1on# Peter and Patric# 233A%
14 | P a g e
Task ;:
,n business, competitive advantage can be defined as the strategic advantage that one
business entity has over its rivals within the same competitive industry. -chieving a
competitive advantage puts the business in a stronger position within its business
environment. 5or this we need to develop our products and services day by day according to
our customers* needs and wants. !1on# Peter and Patric# 233A%
There are several ways in which a business might think about developing a product in order
to sustain or build a competitive advantage7
L *taged release into t(e market: ,t could be considered beneficial to hold back certain
developments you have made to a product so that you can release an improved version of the
product periodically, rather than release it once and then fail to improve upon the product
thereafter. The staged 'improvement' of the product can make it appear dynamic and e&citing
to the customers, whereas rival products might be perceived as static and boring in
comparison. =e need the customers to feel that our company is dynamic and won*t stay the
same the whole time.
L "ierentiation and positioning: ,f we can differentiate our product from that of our
competitors, we can afford to get their attention easily and glow out in the market. ,f we can
provide uni6ue and special benefits to our customers that no one else can provide them, then
we are in well)position to refer to them as loyal customers. =e 8ust need to focus on creating
new inventions and keeping them in good position, which will appeal to our customers within
a short period of time. !1on# Peter and Patric# 233A%
L Researc( and marketing: The development of new products has to be based on the wants
and needs of the customers. 2ather than simply releasing a product and waiting to see if the
demand is there for it, firms should be conducting market research beforehand in an attempt
to find out whether there is7
o - demand for a product and
o - gap in the market for the particular product if the firm releases it.
15 | P a g e
.
There are several ways in which businesses arrange distribution to provide customer
convenience. The methods used may vary slightly based on what sort of business is being
operated. !Kris(na# 2313%
5or e&ample, those who are running an e)commerce business will have different techni6ues
than those who have a standard >real world> business head6uarters. -lso, different real world
businesses may have different techni6ues dependent upon the si!e of the business and where
they may be dealing with customers.
5irst, let's look at e)commerce. Tesco.com is a great e&ample of how distribution can be
arranged to make things more convenient for customers. Tesco offers free standard shipping
for items that are advertised through Tesco. One of the reasons that they are able to do this is
because they have distribution centers located all over the place. =hen you make a purchase
from the site, you will receive your packages !Kris(na# 2313% from a particular distribution
center and the location of the center is based on whichever one of the Tesco fulfillment
centers is nearest you and contains the item within its standard inventory.
This results in savings for the customer as well as faster receipt of items purchase, as they
often do need to travel very far. ,t also means that packages are less likely to arrive damaged
or in poor condition, as they don't have to be in transit as long or switch hands as many times.
Ie&t, there are stores that you can walk into and order from their display inventory. The item
will then be sent to you from a local distribution center that is found in another part of your
city or state. This method allows stores to cut down on transportation costs as items don't
have to be shipped in large 6uantities to each individual store. They are 8ust housed at a
central distribution warehouse instead. !Kris(na# 2313%
The savings that companies see in their own transportation, warehousing, labor and other
costs translate to savings in final prices for customers. They also usually mean that
fulfillment processes are more reliable as well, as the network for handling distribution isn't
as comple& and prone to problems of challenges.
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-ccording to the definition the price of the product might be the amount of money that a
business e&pects to receive from good or service which was purchased by its customer. 5or a
ma8ority of products price is determined in a free market by the forces of supply and demand.
-lso price is one of the 3 elements of 1arketing 1i&. !Kris(na# 2313%
ricing strategies are only the medium or long)term pricing plans that a business adopts.
T(ere are some main pricing strategies:
Price skimming7 is often used when a new innovative product is launched onto the market.
The risk that this product will face competition in the short term is very low. %o by setting a
high price, the business will achieve a limited volume of sales but with a high profit margin
on each sale. This revenue which will be generated might recoup some of the development
costs for this product, as 2C" stage re6uires a lot of investments. -n e&ample might be such
-pple product as M,padN. The price is lowered in this case when the competitors enter the
market. !Kris(na# 2313%
Price leaders(ip7 is often used for established products with strong brand images and brand
loyalty. The firm who is adopting this strategy should be a dominator on the market while
other firms 8ust follow it. ,t is common for price leaders to set up prices over the market rate.
- bright e&ample is <entley Continental which price is incredibly high.
@irms: which decide to enter the market with the similar products uses penetration pricing.
The price is set deliberately low to gain a foothold in the market. The e&pectation of the
business is, once the product is established, the price will be increased in order to boost
profits. Companies adopting these strategies rely on high sales to earn high profits. 5or
instance there are a lot of new brands of chocolate bars in Tesco which are selling twice
cheaper than others as brands are new, so the companies decides to adopt penetration pricing
strategy. !Kris(na# 2313%
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Communication mi& including7
.. Advertising: advertising media and factors to consider when advertising media
4. *ales promotions7 ob8ectives and relative techni6ues
9. "irect marketing: ob8ectives and relative techni6ues
3. Pu.lic relations: ob8ectives and relative techni6ues
:. *ponsors(ip: ob8ectives and the relative types
@. Personal selling7 functions of salespeople and the personal selling process
Promotion mi:: romotions or marketing communications refers to the e&change of
e&change of information between an organisation and its publics.
Pu.lic includes t(e ollo5ing:
L Customers
L %hareholders
L +mployees
L The ;overnment
L The local community in which the organisation operates
L Trade Unions
L ressure ;roups
L The 1edia
).Bective:
The purpose of marketing promotions is best e&plained by the "RIPE M)"E+7
" O "ifferentiate
2 O 2emind
, O ,nform
O ersuade
+ O +ngage
T(e promotional mi: consists o 9 tec(ni0ues 4 tools4 met(ods:
.. -dvertising
18 | P a g e
4. %ales promotions
9. "irect marketing !Kris(na# 2313%
3. ersonal selling
:. ublic relations and
@. %ponsorship
5actors choosing advertisement7
.. Cost of media
4. The target market or audience
9. Control or measurability of media
3. 1edia availability
:. 2each or coverage
@. 1edia used by competitors
*ales promotion:
These are short)term incentives aimed at generating sales or encouraging consumer trial of
the company*s products.
T(e o.Bectives o sales promotion include:
L To increase brand awareness
L To increase trial and adoption of new and e&isting products
L To attract customers to switch brands from competitors
L To level out fluctuations in demand and supply
L To increase brand usage
L To increase customer loyalty !Kris(na# 2313%
L To disseminate information
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Task A:
Marketing mi: modeling #111$ is a term of art for the use of statistical analysis such as
multivariate regressions on sales and marketing time series data to estimate the impact of
various marketing tactics #marketing mi&$ on sales and then forecast the impact of future sets
of tactics. ,t is often used to optimi!e advertising mi& and promotional tactics with respect to
sales revenue or profit. !*tone and 1o(n# 233C%&
'omponents
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1arketing)mi& models decompose total sales into two components7
-ase *ales7 This is the natural demand for the product driven by economic factors like
pricing, long)term trends, seasonality, and also 6ualitative factors like brand awareness and
brand loyalty.
Incremental *ales7 ,ncremental sales are the component of sales driven by marketing and
promotional activities. This component can be further decomposed into sales due to each
marketing component like Television advertising or 2adio advertising, rint -dvertising
#maga!ines, newspapers etc.$, Coupons, "irect 1ail, ,nternet, 5eature or "isplay romotions
and Temporary rice 2eductions. %ome of these activities have short)term returns #Coupons,
romotions$, while others have longer term returns #TP, 2adio, 1aga!ineErint$.
Elements measured in MMM
-ase and incremental volume: The very break)up of sales volume into base #volume that
would be generated in absence of any marketing activity$ and incremental #volume generated
by marketing activities in the short run$ across time gain gives wonderful insights. The base
grows or declines across longer periods of time while the activities generating the
incremental volume in the short run also impact the base volume in the long run. The
variation in the base volume is a good indicator of the strength of the brand and the loyalty it
commands from its users. !*tone and 1o(n# 233C%&
Media and advertising: 1arket mi& modelling can determine the sales impact generated by
individual media such as television, maga!ine, and online display ads. ,n some cases it can be
used to determine the impact of individual advertising campaigns or even ad e&ecutions upon
sales. 5or e&ample, for TP advertising activity, it is possible to e&amine how each ad
e&ecution has performed in the market in terms of its impact on sales volume.
Trade promotions: Trade promotion is a key activity in every marketing plan. ,t is aimed at
increasing sales in the short term by employing promotion schemes which effectively
increases the customer awareness of the business and its products. The response of consumers
to trade promotions is not straight forward and is the sub8ect of much debate. Ion)linear
models e&ist to simulate the response. Using 111 we can understand the impact of trade
promotion at generating incremental volumes. ,t is possible to obtain an estimate of the
volume generated per promotion event in each of the different retail outlets by region.
Pricing: rice increases of the brand impacts the sales negatively. This effect can be captured
through modelling the price in 111. The model provides the price elasticity of the brand
which tells us the percentage change in the sales for each percentage change in price. Using
this, the marketing manager can evaluate the impact of a price change decision.
"istri.ution: 5or the element of distribution, we can know how the volume will move by
changing distribution efforts or, in other words, by each percentage shift in the width or the
depth of distribution. This can be identified specifically for each channel and even for each
kind of outlet for off)take sales. ,n view of these insights, the distribution efforts can be
21 | P a g e
prioriti!ed for each channel or store)type to get the ma&imum out of the same.
+aunc(es: =hen a new product is launched, the associated publicity and promotions
typically results in higher volume generation than e&pected. This e&tra volume cannot be
completely captured in the model using the e&isting variables. Often special variables to
capture this incremental effect of launches are used. !*tone and 1o(n# 233C%&
'ompetition: The impact of competition on the brand sales is captured by creating the
competition variables accordingly. The variables are created from the marketing activities of
the competition like television advertising, trade promotions, and product launches etc. The
results from the model can be used to identify the biggest threat to own brand sales from
competition. The cross)price elasticity and the cross)promotional elasticity can be used to
devise appropriate response to competition tactics. - successful competitive campaign can be
analy!ed to learn valuable lesson for the own brand.
<$
The two ma8or segmentation strategies followed by marketing organi!ations are
concentration strategy and multi)segment strategy.
%egmentation of a market to reach a target consumer base can be done by defining
consumers in terms of geographic, demographic, psychographic, and behavioral
characteristics. !*tone and 1o(n# 233C%&
-n ideal market segment is possible to measure, large enough to earn profit, stable,
possible to reach, internally homogeneous, e&ternally heterogeneous, consistent in
response to market stimulus, reachable in a cost)effective manner, and useful in
determining marketing mi&.
marketing mi:
- business tool used in marketing productsG often crucial when determining a product
or brand's uni6ue selling point. Often synonymous with the four s7 price, product,
promotion, and place. !*tone and 1o(n# 233C%&
market segment
1arket segmentation is a marketing strategy that involves dividing a broad target
market into subsets of consumers who have common needs and desires as well as
common applications for the relevant goods and services.
psyc(ograp(ic
The science of using psychology and demographics to better understand consumers.
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"ierences .et5een "omestic Marketing and International Marketing
,nternational marketing means that domestic organisations are developing marketing mi&es
and setting up some type of operation targeted at foreign markets. The concepts of marketing
management are common in case of domestic and international marketing. Though the basic
concepts, tools and techni6ues are the same, the difference lies in their application. The
difference arise because the environment in our country and the environment abroad is not
the same. These differences are summarised as below7
*overeign political entities& +ach country is a sovereign political entity and goods and
services have to move across national boundaries. -s a result they have to face a number
of restrictions. !*tone and 1o(n# 233C%&
"ierent legal systems. +ach country has its own legal system and very often the legal
systems operated by different countries differ from each other.
"ierent monetary systems& +ach country has its own monetary system and the
e&change value of each country*s currency is different from that of the other.
'ultural varia.les& +&porting means operating in a cross)cultural environment.
1arketers need to understand different cultures, so that they can adapt their marketing
mi&es to meet the differences demanded by a new culture. Carlsberg, the world famous
producer of beer, had to add a third elephant to its label of elephant beer in its
advertisement in -frica. Two elephants are considered to signify bad luck there.
Governmental intervention& There is normally too much of governmental intervention
in case of international trade. On the other hand, in case of domestic marketing,
governmental intervention is least affecting the business dimensions.
Transport costs& Transport costs play a decisive role in case of international marketing,
while in case of national market, transport costs play minor role as output may be
absorbed by local markets where the products are produced. The marketing programmes
naturally directed towards different marketing environments must be different. 5or this a
check list has been prepared. !*tone and 1o(n# 233C%&
Reerence
< 'earning 1edia #4?.?$. <usiness +ssentials7 1arketing rinciples. 4nd ed. United
Kingdom7 < 'earining 1edia 'td. p.9..
Charles =. 'amb, 0oseph 5. (air, 0r., Carl ". 1c"aniel #4?..$. +ssiantial of 1arketing . Ath
ed. United
"ave Ieedham #.///$. <usiness for (igher -wards. 4nd ed. ;reat <ritain7 2eed +ducationa
and roffesional ublishing limited . p9A.
"r. Karminder ;human #4?.?$. 1anagment7 Concepts,ractise and cases. ,ndia7 Tata
1c;raw (ill +ducation 'imited. p9A.
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0on ;roucutt, eter 0. 'eadley, atrick 5orsyth #4??3$. 1arketing essential principles, new
realities. ;reat <ritain and U%-7 Kogan page 'imited. p4A.
Krishna K (avaldar #4?.?$. <usiness 1arketing7 Te&t and cases . 9rd ed. Iew "elhi,,ndia7
Tata 1c;raw (ill +ducation rivate 'imited. p.39.
%tates7 %outh western, Cengage 'earning . p4@4.
%tone and 0ohn "esmond #4??A$. 5undamentals of 1arketing7 - Critical +valution. 4nd ed.
U%- and Canada7 2outledge. p.A4.
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