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Assignment on Marketing Principles

Introduction:
In a business organization there are few departments and marketing is one of them.
Marketing introduces organizational products and services to customers. The sales and profit
of an organization largely depends on the activities of marketing. Dynamic marketing team
can ensure higher sales and profitability. Normally big organizations spend a lot of money in
marketing activities and this assignment represents the business report of Boots consisting of
marketing strategy options and marketing environment.

Task 1: Marketing concept and process

1.1: Marketing and the elements of the


marketing process
Marketing:
Many theorists define marketing in different ways. Jon Jantsch stated that “Marketing is
getting someone who has a need to know, like and trust you”. According to
Philip Kotler “Marketing is the social process by which individuals and groups obtain what
they need and want through creating and exchanging products and value with others.”

The Marketing Process:


Marketing process consists of several steps and these steps are analyzing below:
1. Analyzing marketing opportunities: Boots generally finds out its market opportunities by
analyzing current and future market trends, current resources and capabilities, and internal
and external environment.
2. Selecting the target Market: the next element is choosing of target customers for their
products and services. Boots segments the whole market in different parts based on different
aspects and select the best one for their products and services.
3. Marketing Strategy: Boots develops marketing strategy after selecting the target market and
marketing strategy consists of value proposal, targeting, segmenting and positioning of
services and goods.

4. Marketing Mix Decisions: The next stage is determining marketing mix for
organizational products and services. Marketing mix should cover pricing decision,
promotional marketing campaign growth, distribution agreements and product
growth.

5. Implementation and Control: the last stage of marketing process is implementation


and control where strategies are implemented and monitored. During this time if
management thinks that the current marketing mix and advertising is not appropriate,
they change those.

1.2: The benefits and costs of a


marketing orientation for Boots.
Business organization can develop products based on either product oriented approach or a
marketing oriented approach. The marketing oriented approach means organization reacts to
what customers want. Here organization makes decision based on customers’ needs and
wants rather than what the organization thinks is right for the customers. Generally successful
organizations follow market-oriented approach. Market oriented approach bring some
benefits and costs to Boosts. The benefits of market oriented approaches are:
1. Customer centric: This process is customer centric and Boots gives importance on the
customers’ demands and needs.
2. Addressing demand: Boots reacts with customer demand
3. Making customer benefit: This process helps Boots to create buyer value that increase
customer loyalty and frequent shopping.
4. Reasonably competitive advantage: As Boots develops products and services based on
customers’ demands and needs; it ensures the full use of products and services that gives
competitiveness over its competitors.
The disadvantages of customer orientations are:
1. Comprehensive and costly research: It is really cost ineffective and Boots spends a lot of
money in marketing research which is not possible to perform by small organizations.
2. Increasing benefit increases price tag: As consumers are getting their desired products they
have to pay higher price.
3. Deficiency of predictability: In market orientation product development is really tough
because different customers have diverse choices.
Task 2: Segmentation, targeting and
positioning
2.1: Macro and Micro environmental
factors which influence marketing
decisions of Boots
Business organizations run their operation in a business environment and business
environment is classified as macro and micro environment which have great influence on
marketing decisions.

Micro environmental factors:


These environmental factors are very close to business and having significant impact on the
success and operation of Boots. Micro environmental factors are competitors, media,
employees, shareholders, customers and suppliers and these factors determine organizational
resources and capabilities.
Customers: customers are the key focusing substance of an organization and Boots attracts
and retains customers by providing excellent products and services.
Employees: The employees of Boots are skilled, motivated and knowledgeable and they play
significant role in the success of the Boots and the betterment of sales and customer services.
Suppliers: Another important factor is suppliers and if organization has good supply chain it
is able to achieve competitiveness and to provide quality products to end users.
Shareholders: to expand a business shareholders are needed and good relationship among
shareholders ensures long term success and higher profit.
Media: It can play an important role and it should promote positive matters of the Boots to
draw more customers’ attractions.
Competitors: Boots has many competitors and it must aware of the activities and products of
its competitors. It should use modern technology in its production and understand the trading
condition and customer behavior (Scribd, 2012).

Macro environmental factors:


These factors are not closely related to the organization but it has long lasting and devastative
impact on the organization. Macro environmental factors determine the threats and
opportunities of the organization. Macro environmental factors are cultural, demographic,
political, economic, technological and natural.
Demographic factors: it includes customers’ occupation, age, sex, density, location and so
on and these factors change very steadily.
Economic environment: it covers buyers’ buying and spending capabilities.
Natural environment: It consists of environmental pollutions, government interventions
and natural resources like raw materials and these factors have immense impact on
organization.
The technological environment: it includes modern technological systems, process and
machineries.
Political environments: It covers local and national governments laws, regulations, and
political parties.
Cultural environment: This consists of people beliefs, behaviors and values (Scribd, 2012).

2.2: Segmentation criteria to be used


for products in different markets.
Boots has wide range of products and it develops different products for different
customers. First of all it segments the whole market in different parts based on

different aspects. Boots may segments its market based on the following aspects:

Geographic Variable: Boots can segment market on basis of population, size and
atmosphere of a region or a geographical area.
Demographic Variable: Boots can segment its market based on sex, race, age, status, sexual
orientation, education, income of the people.
Psychographic Variable: Boots can segment the market on basis of customers’ thoughts,
feelings, beliefs, interests, values, lifestyles, social status and class, personality and so on.
Behavioural Variable: here Boots can segment the total market based on customers’
purchasing behavior like readiness to buy, loyalty to the organization, users status and
occasions.

By considering the above factors Boots


segmented its whole market in different
parts namely pharmacy & health, Beauty,
Fragrance, Mother & baby, Toiletries,
Men, Electrical, Photo, Opticians, Toys,
Gift and Food. Top ten segments of Boots
are given below:

Health and beauty category 2006 value £bn % Change 06-11

Over-the-counter medicines 2.1 12%

Babycare 2.0 8%

Skincare 1.8 36%

Other 1.7 7%

Paper products 1.7 12%

Haircare 1.4 8%

Bathroom toiletries 1.3 5%

Perfumes 1.1 20%

Men's Toiletries 1.9 33%

Dental Care 0.7 20%

2.3: Targeting strategy for a selected


product.
Generally organizations produces different products and services for certain group of people or customers. Organizations
may follow different targeting strategies like differentiated or selected marketing, niche/ concentration marketing and mass/
undifferentiated marketing. In niche marketing organization chooses certain group of people as its customers from all
people. Organizations have moderately minor overhead and less bargains with customers. Generally specialist organizations
of various products and services follow this targeting strategy. Economic recession has negative impact on niche marketing.
Organizations conduct their marketing only for their target groups. Generally big organizations follow mass marketing
strategy where they produce goods and services for whole market. According to this strategy, organizations have to produce
goods and services in huge volume and sell goods in reasonable prices and do little profit per product. Huge sales will turn
out huge profit. Generally organizations conduct marketing for all segments of the market. In differentiated marketing
strategy, organizations concerned with targeting each segment with a product with its own marketing mix designed to match
the needs of the customers within the segment. In this process organizations can increase customer satisfaction and customer
loyalty and allow organizations to spread risks. Generally Boots follow mass marketing strategy; for example, it produces
different products for all segments. It sells various health and beauty products and services to all customers including men,
women, and kids and so on. It produces goods in large volume and sell those products in reasonable prices.

2.4: Buyer behaviour affects marketing


activities in different buying situations
Batra and Kazmi (2004) stated that “Consumer buying behavior is the mental and emotional
processes and the observable behavior of consumers during searching purchasing and post
consumption of a product and service”. Organizational marketing activities largely depend on
the buying behavior of the customers. Customers may become highly involved or lowly
involved with organizational products and services and it depends on tangible and intangible
value of the products. Generally we see four kinds of buying behaviors and these are:
1. Complex buying behavior: Here customers are highly involved and they spend a lot of time
before buying the products and services. Generally these products are precious and customers
ask others or expertise before buying products. These products has significant impact on
customers; for example, buying a car or diamond or getting admitted in a university.
2. Variety seeking behavior: here customers have low involvements and there are a lot of
options for same kind of product. Customer may check those products. For example, there are
lots of fragrances in the market and people may buy different fragrances in different times
only for variety. Manufacturers have to give different offers to customers to sell their
products and to attain competitiveness.
3. Dissonance buying behavior: customers are highly involved here but there are only few
products options in the market like floor tiles.
4. Habitual buying behavior: here customers have low involvement and there are lot of same
quality products available in the market but those products are very essential for our everyday
life like rice, meat, breads and so on.

2.5: Propose new positioning for a


selected product/service.
Business organizations should give importance on product positioning because it helps to generate business loyalty. "Product
positioning is a marketing technique intended to present products in the best possible light to different target audiences”.
Market segmentation and product position is correlated and organization establishes product positioning according to the
product segmentation. In positioning, organization creates message regarding its products and deliver the message to target
customer through different mediums such as leaflet, magazines, television, radio, etc. The message includes manipulation
and symbol and the success of product positioning largely depends on the technical experts, expert advice, fast service,
creative ideas, high quality, caring attitudes, immediate results, low price and emotional supports. Recently Boots dropped
its long running ‘Here comes the girls’ ads and introduced a new brand positioning in its Christmas advertising campaign.
This new ads bring a message to customers like “Let’s feel good. Let’s give gifts that keep on giving”. The new campaign
resonated will all ages and families, not just women. This Christmas ads are set to the track “Are you ready for love”. Proper
and effective positioning may ensure higher sales and created emotional support.
3.1: How products are developed to
sustain competitive advantage.
Nowadays companies are applying different techniques to achieve competitive advantage.
Boots is competing with Superdrug, Tesco, Body Shop, Sainsbury’s, Asda, Morrison, M&S
and Debenhams. Product development is one of the key strategies to get sustainable
competitive advantage. Organization can develop its existing products or it can introduce new
products to customers. Product development has physical and insubstantial benefits. Product
development conducted in two parallel paths: one path is related to market research and
analysis and another path is related to idea generation, product design and detail engineering.
It is very essential to conduct product development regularly otherwise it is really tough to
get competitiveness. Product development has some steps:
- Generating ideas which is often called as “fuzzy front end” of the product development
process
- Idea screening
- Concept development and testing
- Business analysis
- Beta testing and market testing
- Technical implementation
- Commercialization
- New product pricing
Boots follows the above mentioned process in its product development. Sometimes Boots
conducts several steps at a time to produce its own products and services.

3.2: How distribution is arranged to


provide customer convenience.

Boots has its own products and it sells other products as well. Generally there are three types of distribution channels and
Boots uses two types of distribution channels. First of all it produces its own products and services which it sells to
customers directly. It has its own brand products which it sells to customers directly. It uses second distribution channel as
well where they act as a retailer. It buys products from different manufactures and sells products to customers. Generally
Boots sells quality products of different brands like Boss, Calvin Klein, CHANEL, DIOR, Diesel, ARMANI, Gucci, Lssey
Miyake, Jean Paul Gaultier, Marc Jacobs, Jimmy Choo, Thierry Mugler, TOM FORD etc. It has around 2500 stores from
local community pharmacies to large destination health and beauty stores. 90% of the UK population is estimated to be
within a 10 min drive a Boots store. It develops multi-format strategy to give services to customers in right place by friendly
and professional people. There are different types of Boots’ shops like Boots health and beauty stores offer destination
shopping with lot of products including all Boots leading brands. Boots flagship stores offer beauty halls with premium
cosmetics and beauty consultants. Boots travel stores meet the demands and needs of the travellers. Most of their shops are
situated in densely populated and prime areas like railways and bus stations and nearby areas of community, supermarkets,
and shopping malls and so on.

3.3: How prices are set to reflect an


organisation’s objectives and market
conditions.
Pricing strategies are of different types like penetration pricing, focused based pricing, price
skimming, product life cycle pricing and discount pricing.
Penetration pricing: Organization keeps the price low than competitors to penetrate the
market. Here organization arises awareness regarding products among customers and insists
people to try the products.
Price skimming: here organizations tend to keep price high. The prices fall following the
normal laws of demand and supply.
Premium pricing: here organization provides quality products with higher price. Prices are
charged as “extra” for the quality supplied by the organization. This is good when
organization enter a new market.
Economy pricing: here quality of the products and services are low; prices are kept low too.
This pricing is also called minimum pricing.
Boots follows two pricing strategies like premium and penetration pricing strategy. When
they introduce new products to customers generally they follow premium pricing strategy.
Rest of the time Boots follow penetration pricing strategy. The product and service quality of
Boots is high and the costs of its products are relatively lower than other competitors. Boots
is able to do that by controlling the cost of raw materials, components, labor and some other
inputs. The objective and goals of Boots are selling quality goods and providing quality
services to customers with reasonable price. The pricing strategy of Boots change with
market condition.

3.4: How promotional activity is


integrated to achieve marketing
objectives.
Promotion is one of the elements of marketing mix and there are different kinds of
promotional activities like advertising, public relations, personal selling and sales
promotions. If marketing department wants to achieve its marketing objectives it should
integrated its promotional activities. Other promotional strategies are coordination, repetition,
consistency and reach. Organizations have to spend a lot of money in marketing. Marketing
department spends money in advertising to reach its messages to customers. Most common
advertising mediums are television, radio, websites, city transports, magazines, newspapers,
social media, etc. Personal selling is another effective promotional activity and some
common forms of personal selling are individual gathering, correspondence, telemarketing
and message. Organizations sometimes offer different sales promotions to customers and
Boots offers some promotions like the Boots advantage card, the Boots bonus machine,
double and triple points weekends and other deals. In public relations, organizations are
pushing an item or administration in a casual sense.

3.5: The additional elements of the


extended marketing mix and their
significance:
The first four elements of marketing mix are product, price, place and promotion. Later
another three elements are added: people, process and physical evidence.
 People: management and employee are responsible for marketing activities and they expose
organizational culture to customers and outsiders through their services and marketing
rapport. HRM is responsible for hiring dynamic employees for all departments especially for
marketing. Dynamic employees can effectively promote organizational products and services
to customers and deliver services. HRM will facilitate different training, coaching, mentoring
to increase the skills, knowledge and efficiency of the employees.
 Process: Marketing activities are conducted by following some process or systems like
uniformity of offering, service delivery and service consumption. Marketing management
should concern about the effectiveness and difficulty of these processes otherwise marketing
message should not reach to desired customers.
 Physical evidence: it includes service deliver, infrastructures and facilities. Service should
be delivered in friendly and quick ways. Physical appearances of stores should be tidy, nice,
safe and healthy. Facilities should be dynamic and modern.

4.1: Marketing mixes for two different


segments in consumer markets.
From the previous we know that marketing mix has seven elements: product, price,
promotion, place, process, people and physical evidence. Generally organization segments its
market based on customer behavior, physiographic, demographically and geographically.
Boots is operating in 21 countries. The products for Qatar and the UK have some differences
because of climate and the prices in Qatar are higher than the UK. Products vary with
geography. The marketing process and physical evidences are almost same in the UK and
Qatar but people, promotion, price, product and places are different. Product quality, price
and promotional offers are not same. People of management and employees are not same for
those two countries. The products for men and women are different and prices are different
for those products. The heath care and beauty services for kids & women and men are
different. Boots has different products and services for different demographic segments.
4.2: Illustrate differences in marketing
products and services to businesses
rather than consumers
Different business organizations have different kinds of products. Organizations develop
products and services according to market demand. The number of customers in the market is
almost same. In a market there are wide ranges of products. Products are divided in different
sectors. For example, Boots provides health and beauty services and products to customers.
Similarly other organizations like Superdrug, Tesco, Body Shop, Sainsbury’s, Asda,
Morrison, M&S and Debenhams also provide health and beauty services and products to
customers. Marketing activities of those companies are not same. They do different activities
for promoting their products but their targeting customers are almost same. The targeting
customer of Boots and Superdrug will be same but there will be slight difference. The
product price of Superdrug is higher than Boots. It is clear that difference in marketing
products and services to business rather than customers. Superdrug, Boots, Tesco concentrate
on their product most rather than customers as all those companies target the same customers
and customer will buy product which has more loyalty and marketing activities.

4.3: How and why international


marketing differs from domestic
marketing.
There are some differences between international marketing and domestic marketing and these are:
- Scope: International marketing has more scope than domestic marketing.
- Obstructions: International marketing has to face more obstructions than local marketing. They have to compete with other
manufacturers in overseas and to follow the rules and regulations of operating countries.
- Profits: Generally profit margin of international marketing is higher than domestic marketing.
- Offering of engineering: Though both marketing use modern innovation but international marketing use most recent
innovations.
- Political relations: domestic marketing has nothing to do with political relations but international marketing organization
should have good political relation
Conclusion:
Marketing is very important for an organization and the success of an organization largely
depends on the dynamicity of marketing activities. Boots is one of the leading retailers which
provide different products and services to customers which ranges from health and beauty to
skincare. It has been doing profitable business since 1849 because of it provides quality
products to customers and it has dynamic marketing team. Marketing team conducts market
analysis and informs R&D team to develop products according to the customers’ needs and
demands. It does proper market segmentation, targeting, position and pricing for its products
which facilitate higher brand loyalty and profit.
References
Ankit, (2011), McDonald’s and Subway Services Marketing 2011, [online] 2011, Available
from: http://www.scribd.com/doc/100666475/13/PRICING-STRATEGY [Accessed: 7/4/2014]

Kokemuller, N., (2012) Advantages & Disadvantages of Having a Marketing Orientation in


an organization [online], Available from http://yourbusiness.azcentral.com/advantages-disadvantages-having-
marketing-orientation-organization-1510.html [Accessed: 7/4/2014]

Learnmarketing, (2012) Service Marketing Mix (Extended Marketing Mix) [Online], Available
from: http://www.learnmarketing.net/servicemarketingmix.htm [Accessed: 7/4/2014]
Laura (2011), Market segmentation in foodservice operations,[online] 13-10-2011, Available
from:http://hotelmule.com/wiki/Market-segmentation-in-foodservice-operations [Accessed:
7/4/2014]
Muthumani, S., (2010), International Trade 2010 [online], 07/12/2010, Available
from:http://www.scribd.com/doc/34200662/3/International-Marketing-vs-Domestic-
Marketing[Accessed: 7/4/2014]
Scribd, Marketing environment [online], 2012, Available
from http://www.scribd.com/doc/22543929/Marketing-Micro-and-Macro-
Environment [Accessed: 7/4/2014]
Shma (2012), 4 types of consumer buying behavior [online], Available from: http://managementation.com/4-types-of-
consumer-buying-behavior/ [Accessed: 7/4/2014]
Thimmesch, M., (2010) What is Marketing? How 10 Experts Define It.[Online] August 08, 2010, Available from:
http://www.skylinetradeshowtips.com/what-is-marketing-how-10-experts-define-it/ [Accessed: 7/4/2014]

ZeePedia (2013), Principle of Marketing [online], Available from:


http://www.zeepedia.com/read.php?marketing_process_analyzing_marketing_opportunities_
contents_of_marketing_plan_principles_of_marketing&b=39&c=8 [Accessed: 7/4/2014]
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August 12, 2015 at 11:33 AM
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