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Plan The marketing mix A market Market segmentation and targets market Brands and distribution chances Consumer

behaviour Marketing mix The term marketing mix became popularized after Neil H. Borden published his 1964 article the concept of the marketing mix. Borden began using the term in his teaching in the late 1940s after James Cullinton had described the marketing manager as a mixer of ingredients. The ingredients in Bordens marketing mix included product planning, pricing, pranding, distribution channels, personal selling, advertising, promotion, packaging, display, servicing, physical handling, fact finding and analysis. E. Jerome Mc carthy later bought these ingredients into the four categories that today had known as a four Ps: Product Price, Place & Promotion Most specialists distinguish between selling and marketing. According to the selling concept, resisting consumers have to be persuaded by hard selling techniques to buy none essential goods and services. Product In short, products are sold rather than bought. The marketing concept, on the contrary, assume that the producers task is to find ones and fill (wants) them In other words you dont sell what you make; you make what will be bought. Here, the emphasis is put on the anticipation of the costumers needs. When marketing their products, firms need to make a successful mix of the right product, sold at the right price in the right place and using the suitable promotion. The marketing mix is the balance of marketing techniques required for selling the product. To create the right marketing mix, businesses have to meet the following conditions: - The product has to have the right features for example it has to look good and work well - It also has to be appropriated to the market segment; the firm is trying to sell to. - The term product refers to tangible physical product as well as services, e.g., safety, brand name, packaging. In the past many firms were product-oriented which means that all their efforts was focus on marketing the product. There was little flexibility for Anglais Langue & Affaires 1

individual customers or segments of the market. Firms now tend to be market -oriented. This means that there are flexible and adaptable to the demand of the market. They aim to change the product as necessary to satisfy their customers. Price The second element in the marketing mix is price. Price is simply the amount of money that consumers are ready to pay for a product or service. Pricing new products and pricing existing products require the use of different strategies. However the price must be right. Consumers will need to buy in large numbers for companies to produce a healthy profit. The price of the product particularly the price compared to competitors is a vital part of marketing. When pricing a new product, businesses can use either market penetration pricing or market skimming pricing. Market penetration strategy involves establishing a low product price to attract a large number of customers. By contrast a price skimming strategy is used when a High price is established in order to recover the cost of a new product development as quickly as possible. Manufacturers or computers and other technical items with High development cost frequently used a market skimming strategy. In short market skimming means pricing High but selling less. Promotion. Promotion is the third element in the marketing mix. In the context of the marketing mix, promotion represents the various aspects of marketing communication. That is the communication of information about the product with the goal of generating a positive customers response. Promotion is a communication process that takes place between a business and its various publics. Publics are the individuals and organisations that have an interest in what the business produces and offer or save. Thus in order to be effective, businesses need to plan promotional activities with the communication process in mind. There are 4 basic Tools: Advertising, sales promotion, public relations and personal selling. The main aim of promotion is to make the target group aware of the existence of availability of the product. Place The fourth element of the marketing mix is place. So place refers to having the right product in the right location and at the right time. This part of the marketing mix is all about how the product will be distributed. Current trends are towards shortening the chains of distribution. Examples to illustrate the notion of marketing mix Anglais Langue & Affaires 2

The marketing mix of the Manchester united is one of some famous multinational. First of all, the product which includes providing and excellent football team, that plays and wins most of the time in an existing way. However there are other ingredients of the product including merchandising such as the sales of shirts and a range of souvenirs. The product also relates to television rights and Manchester united own television channels. Place, refers to Old Trafford where home games are played. Its products are sold across the globe through the club website and a range of other sales Medias. The club also engages in a range of joint promotional activities for example with the mobile phone company Vodaphone. Other example, Kellogg's it sales a global products i.e. the same for different markets regardless of existing local preferences. Kellogg's tries to change consumption patterns instead of adjusting them. In other words, it offers one standardized products everywhere. Coca cola, on the contrary has a different strategy, it changes the favourite drink to conform to local taste just like McDonald's which sales hamburgers without ham in Muslim countries. The same differences in products strategies have also to be found in advertising Rolex, for example, has the same advertising message for all markets. The advantage can be lower costs. Nike Founded as an importer of Japanese shoes, Nike has grown to be the world's largest manufacturers of athletic footwear holding a global market share of approximately 37 %. In the US Nike's shoes are sold through about 20 000 retail outlets and worldwide the company's products are sold in more than 200 countries. Nearly, all of the items re manufactured by independent contractors, primarily located overseas. In addition to its wide range of core (core product / core activity) athletic shoes and apparel, marketed under the flagship marketing brand, the company sales also footwear under the brands such as Converse all stars. Nike is one of the most popular and successful company known to the world today. Its founder Bill Bowerman, a track coach and Philip Knight attract athletes, selected a brand mark today internationally known as the "Swoosh". Nike has relied on consistent innovation in the design of athletic product and heavy promotion to fuel its growth both in US and foreign markets. The Anglais Langue & Affaires 3

ubiquitous present of the Nike brand and its "swoosh" trade mark led to a backlash against the company in the late 20' century particularly in relation to allegations of low wages and poor working conditions at the company's Asian factories. "Just do it" that is the slogan that has one the attention of million of consumers across the world.

It's one of the most efficient advertising campaigns of all time. The number 2 leading had slogan at the XX century according to the advertising age magazine. One the "just do it" campaign was launched Nike received thousands of letters from consumers who claim the campaign gave them the inspiration to do lot of things. Some were inspired them to get fit, go back to school or even to find Jesus! Finally, Nike's products are available in multi brand stores & the exclusive Nike store across the globe. In the international market, Nike sells shoes through independent distributors, franchisees and subsidiaries. In conclusion, the marketing mix consist of the various element of marketing program, their integration and amount of efforts that a company can expend on them in order to influence the target market. Adapting a product to different market present both advantages and drawbacks. The question is how to find a balance between the different markets and to adapt the product to each market. At a time of globalization, international marketing involves recognizing that people all over the world have different needs. Companies like Gillette, Coca Cola, and Bic have brands that are recognized across the globe. While many of the products that these businesses sell are targeted at a global audience using a consistent marketing mix, it is also necessary to understand and take into account regional differences, hence, the importance of the international marketing. Organisation must understand that differences in values, customs, languages and currencies will mean that some products will suit only some countries. As a result they will have to adjust their marketing mix. For example: advertising in China and India will need to focus on local languages. The potential market size degree and type of competition, price promotional differences, products differences, and consumption habits have to be carefully analyzed.

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Market What is the market? A. Defining the market All businesses operate in market but what is a market and how can it be defined? The simplest way to define a market is to think of it as consisting of all the people or organisations that may have an interest in purchasing a company's products or services. In other words, a market comprises (includes) all customers who have needs that may be fulfilled by an organization opering. Yet, just having a need is not enough to define a market. So, other factors must be taken into account when defining a market. The first factor is that a market consists of customers who are qualified to make the purchase. Qualified customers are defined as those who: a) Seek a solution to a need b) Are eligible to make a purchase c) Possess the financial ability to make a purchase d) Have the authority to make the decision The second factor for defining a market rests with the company's ability to service the market. If a company identifies a group of customers who are qualified to make purchases, they only become a market for the company once the company is in a position to execute marketing activities designed to service those customers. In marketing, the term market refers to the group of consumers or organizations that is interested in the product, has the resources to purchase it and is permitted by law and other regulations to acquire it. The market definition begins with: 1. The total population and gradually narrows into 2. The potential market i.e. those in the population who have interests in acquiring the product. 3. The available market i.e. those in the total population who have enough money to buy the product. 4. The qualified available market i.e. those in the potential market who legally are permitted to buy the product. 5. The target market i.e. the segment of the qualified available market that the firm has decided to serve 6. The penetrated market i.e. those in the target market who have purchased the product or service. Anglais Langue & Affaires 5

As a market consists of all the consumers who purchase a particular type of good or service, a market may be subdivided into separate segments each of which can be considered to be a separate market in its own rights. It's very important for a business to be able to define its own market so that it can estimate and forecast the size of the market. Defining its own market will enable business: 1. To identify the competitors in the market 2. To break the market down into relevant segments 3. To create an appropriate marketing mix to appeal to customers in the market. Some markets take place in a physical location e.g. a street market whereas others may be virtual markets e.g. when people buy and sell through the medium of the internet. The size of the market can be calculated in term of the number of customers that make up the market or the value of sales in the market. A business can then calculate its market share in terms of the number of customers it sells to or the total value of its sales. Markets are typically structured into segments. Primary segmentation is between customers buying totally different products. Further segmentation can be based on demographic and psychographic factors Demographic segment people buy clearly ascertainable facts such as their sex, their age, size of family, income, location, educational background ... they are particularly used by decisions makers to plan a head and make more accurent predictions. Demographic study which people buy and psychographic study why people buy. Psychographic segment people buy something less clearly ascertainable often disputable. Some categories of psychographic factors include social class, life style, behaviour, opinions, interest and values.

B. Types of markets There are two types of markets: Business to consumers market (B2C market) in which businesses sell to other consumers and Business to business market (B2B market) in which businesses sell to other businesses. However the most common distinction is between consumer market and industrial market. 1. Consumer markets (B2C) Consumer markets are the markets for products and services by individuals Anglais Langue & Affaires 6

for their own or family use. Goods bought in consumer markets can be categorized in several ways. a) Fast Moving Consumer Goods (FMCGs), these have high volume and low unit value fast repurchase. Examples include ready made meals, baked beans, news papers... b) Consumer durables, these have low volume but high unit value. Consumer goods can be divided into: White goods e.g. fridge-freezers, cookers, dishwaters, microwaves... Brown goods e.g. DVD players, game consoles, personal computers... Soft goods are similar to consumers durables except that they wear out more quickly and therefore have a shorter replacement cycle; examples include cloth, shoes... Services e.g. hairdressing, childcare... 2. Industrial or Business market (B2B) Industrial markets involve the sales of goods between businesses. These are goods that are not aimed directly at consumers. Industrials markets include a) Sailing finished goods, examples include office furniture, computer system. b) Sailing raw materials or components, examples include steel, coal, gas, timber c) Sailing services to businesses, examples include waste disposal, security, accounting, and legal services Industrial markets often require a slightly different marketing strategy and mix. In particular a business may have to focus on a relatively small number of potential buyers e.g. the IT director responsible for ordering computer equipment in a multinational group. C. Consumer markets VS Industrial or business markets: 1. Characteristics of a consumer market In a consumer market every consumer has equal value and represents a small percentage of revenue. Sales are made remotely; the manufacturer doesnt meet the customer. Products are the same for all costumers. The service element is low. Purchases are made for personal use, image is important for its own sake. The purchaser is normally the user and costs are restricted to purchase costs. The purchase event is not subject to tender (appel doffre) and negotiations. Finally the exchange is one of transactions and there is no long-term view. 2. Characteristics of industrial or business to business markets

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In a B2B market there are a small number of customers that account for a large percentage of revenue. Sales are made personally and the manufacturer gets to know the customers. Products are customised for different customers and service is highly valued. Purchase costs may be a small part of the total costs of views. The purchase event is conducted professionally and includes tender and negotiations. There is the potential for long-term value. Conclusion For both consumers and B2B market, the foundation of marketing is based on knowing the customers. However, in consumer market, the customer is remote at arms length (= no personal contact) and consequently we use mass communication and distribution pools. In a B2B the customer is far closer. You have far more knowledge of customers though personal contact. For the consumer market, the product and its packaging are for the greatest importance in the marketing mix. For B2B market, although product quality is important, this has to be matched by quality of supply i.e. delivering the product when it is needed, provide service and support and strategic flexibility within the relationship context. The role of marketing is limited to creating promotional materials, attending exhibition, and running seminars. In these circumstances marketing may have no strategic role in the business.

Market segmentation and Target market


Market segmentation

A. What is the market segmentation and why is it necessary for businesses to segment their markets?
Market segmentation is the process of dividing a total market into market groups consisting of people who have relatively similar product needs. Another definition could be: market segmentation is the process that marketers use to divide up the market into smaller segments that can be efficiently addressed.

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Market segmentation is the identification of portions of the market that are different for another. Segmentation allows the firms to better satisfy the needs of their potential customers. There are several important reasons why businesses attempt to segment their market. It allows them to better match their customers needs. Customers needs differ so creating separate offer to each segment makes sense and provide customers with better solutions. It allows them to increase their profits. Customers have different disposable income so they react differently to price increases. By segmenting markets businesses can raise average prices and subsequently in hands profit. Inter provide them with better opportunities of growth. Market segmentation can build sales : for example customers can be encourage to trade up after being introduce to a particular product with an initial lower price product. It allows them to adapt to changes in customers circumstances: for example customers grow older form, families change jobs, get promoted, or change their buying patterns. So by marketing products that appeal to customers at different stages of their life, a business can retail a customer that might otherwise switch to competing products and brands. Finally it allows them to target their marketing communication.

The need for market segmentation

Businesses need to deliver their marketing message to a relevant customers audience. If the target market is too broad there is a strong risk that the key customers are missed. By segmenting markets the target customers can be reached more often and at a lower cost. The marketing concept calls for understanding customers and satisfying their needs better than their competition. But, different customers have different needs and its almost impossible to satisfy all customers by treating them alike. Mass marketing refers to treatment of the market as a homogeneous group and offering the same marketing mix to all customers. So mass marketing allows economies of scale to be realized through production, mass distribution and mass communication. The drawback of mass marketing is that customers needs and preferences differ and the same offering is unlikely to be viewed as optimal by all customers. Targeting marketing, on the other hand, recognizes the diversity of customers and doesnt try to satisfy all of them with the same offering. Anglais Langue & Affaires 9

The first step in target marketing is to identify different market segment and their needs.

B. Requirements of market segments

In tradition to having different needs, markets segments should be evaluated against the following criteria in order to be efficient: Identifiable i.e. the differentiating attributes of the segments must be measurable so that they can be identified. Accessible i.e. the segment must be reachable through communication and distribution channels Substantial i.e. the segments should be sufficiently large to justify the resources required to target them. Unique needs i.e. in order to justify separate offerings the segments must respond differently to the marketing mixes. Durable, the segments should be relatively stable to minimise the cost of frequent changes. So, good market segmentation will result in segments that are internally homogeneous. That is as similar as possible within the segment and externally heterogeneous that is as different as possible between segments.

C. Bases for segmentation in consumer markets

Consumer markets are driven by people motivation to spend disposable income. In consumer markets, retailers and marketers sell goods that are consumed in everyday use. Peoples motivations and actions fuelled the market. In order to market consumer goods, companies have to segment the market and tap into the minds of their consumers. Unlike business to business market, consumer markets are driven by the customers buying habits and motivation to spend money. Consumer markets can be segmented on following consumers characteristics: demographic psychographic geographic behaviouralistic

a. Geographic segmentation
It consists in dividing a market into different geographical units such as countries, states, regions and towns. It can also include other variables, size or metropolitan areas, segmented according to size of population. Population density often classified as urban, suburban or rural.

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Climate According to whether patterns, common to geographic region

b. Demographic segmentation
Characteristics of consumers market based on demographics include differences in gender, age, ethnic background, income, occupation, education, household size, religion, generation, nationality and even social class. For example, companies may identify the age of their consumers in the 18 to 24, 25 to 34, 35 to 64, etc Companies often identify these demographic characteristics through market research surveys used to discover which demographic group comprises the majority of their group base. Companies can then target their advertising towards these demographic groups. c. Psychographic segmentation Consumer market characteristics can also be psychographic in nature. Psychographic characteristics of consumers include interests, activities, opinions, values and attitudes. Obviously many magazines had geared (orienter) towards consumers interests. For example, pre-natal magazines target expectant mothers who are interested in learning more about carrying for a baby. A company may better understand consumers opinions and attitudes after conducting a focus group and used that information to tailor advertising of marketing campaign. Consumers values can pertain to how a group of individuals fells about certain social issues which can be of interest to non profit or charity organization. In other words, psychographic segmentation groups customers according to their life style.

d. Behavioural segmentation
Behaviour characteristics can be garnered (collect) through marketing research. Behavioural characteristics of consumers market include product usage rates, brand loyalty, user status or how long they have been a customer and even benefits that consumers seek. Companies like to know how often consumers visit stores or use their products. Company marketing department usually try to distinguish between heavy, medium and light user, whom they can target through advertising. To sum up behavioural segmentation is based on actual customer behaviour towards products. Variables include: Benefits sought for example quality service economy

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Usage rate, light user, medium user, heavy user Brand loyalty User status, potential, first time, regular Readiness to buy Occasion e.g. holydays and events that stimulate purchase

Behavioural segmentation has the advantage of using variable that are closely related to the product itself. Its a good starting point for market segmentation.

D. Bases for segmentation in industrial markets

In contrast to consumers, industrial customers tend to be fewer in number and purchase in larger quantities. They evaluate offering in more details and the decision process usually involves more than one person. These characteristics apply to organizations such as manufacturers and service providers as well as resellers, governments and institutions. Many of the consumer market segmentation can be applied to industrial market. Industrial market can be segmented on characteristics such as location, company type, and behavioural characteristics

a. Location
In industrial markets, location may be important in some cases as the cheaping cost can influence the buyers decision. In some industries, firms tend to cluster together geographically and therefore may have similar needs within regions.

b. Company type
Business customers can be classified according to: company size industry decision making unit purchase criteria

c. Behavioural characteristics
In industrial market, patterns or purchase behaviour can be a basis for segmentation. Such behavioural characteristics may include usage rate, buying status, purchase procedures (sealed bid: sousmission sous pli cache)

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Target market

A. Attractiveness of a market segment

Two important factors to consider when selecting a target market segment are the attractiveness of the segment and the fit between the segment and the firms objectives resources and capability. In determining whether a segment is worthy of deal with a target market, the marketer needs to address the following questions: Size of the segment i.e. is the market large enough to support the marketers objectives Growth rate of the segment i.e. is the segment showing signs of growth. Competition in the segment Brand loyalty of existing customers in the segment Attainable market share given promotional budget and competitors strategy Required market share to break even Sales potential of the firm in the segment Expected profit margin in the segment Market research is instrumental in obtaining this information. Market research involves connecting, recording and analysing all the available information which will help a business to understand its market. Market research sets out to answer the following questions: Who makes up the target audience? What do they want? When do they need it? Where the product does sells best? How can it be taken to customers? What do they want or need it? What are the competitors doing? How is the market changing?

B. Suitability of market segments to the firms

Market segments should be evaluated in relation to the firms objectives. Here are some factors that must be taken into account. How can the firm offer superior value to the customers in the segment? What is the impact of serving the segment and the firm image? Does the firm have access to distribution channel required to serve the segment? Does the firm have the necessary resources to serve the segment?

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C. Target market strategy

There are different target market strategies that may be followed. Targeting strategies can categorized as one of the following

a. Single segment strategy

Single segment strategy also known as concentrated strategy One market segment not the entire market is served with one marketing mix A single segment approach often is a strategy of choice for smaller companies with limited resources.

b. Selective specialisation
Selective specialisation is a multiple segment strategy also known as differentiated strategy. Different marketing mixes are offered to different segments. The product itself may not be different. In many cases, only the promotional message or distribution channels vary.

c. Product specialisations
The firm specializes in a particular product and tailors it to different market segment.

d. Market specialisation
The firm specializes in serving a particular market segment and offers that market different products.

e. Full market coverage

The firm attempts to serve the entire market. The coverage may be achieved by means of either a mass market strategy in which a single undifferentiated marketing mix is offered to the entire market or by a differentiated strategy in which a separate marketing mix is offered to each segment. Conclusion: A firm that is seeking to enter a market and grow should first target the most attractive market segment that matches its capabilities. Once, it gains a foothold, it can expand by pursuing a product specialization strategy, tailoring the product for different segments or by pursuing a market Anglais Langue & Affaires 14

specialization strategy and offering new products to existing market segments.

Products, Brands and distribution channels

A. Products 1. Introduction
A product is defined as anything that is capable of satisfying consumers needs Both the definitions include both physical product e.g. cars, washing machine, DVD players as well as services, banking, insurance. The consumer products industry can be divided into 4 groups: - Beverages - food - Toileteries - Cosmetics - Small appliances Most firms offer products that fit primarily into only one of these groups. Also a firm may have brands that cross the lines. Consumers products are the bases of the modern consumer economy. In order to be efficient, consumers products companies must implement an efficient strategy in order to a) keep up with constantly changing consumers preferences b) design, develop and test new products quickly c) design, packaging with high consumer appeal d) determine product and manufacturing processes and costs e) eliminate ideas that have not going to meet markets needs f) move product that have a high probability of success into volume production Of course all these activities must be done while complying with country, state and local regulation. Besides, manufacturers have to differentiate their products from the competition. The process by which manufacturers distinguish their products offering from the competition is called branding. For most companies, brands are not developed in isolation; there are parts of product group. A product group or product line is a group of brands that are closely related in terms of their functions and the benefit they provide. They are 2 main types of product brands: manufacturer brands own-label brands

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Manufacturer brands are created by producers and use their chosen brand name. The producer has the responsibility for marketing the brand, by ensuring its distribution and gaining consumer brand loyalty. Good examples include Microsoft and Mercedes. As for own-label brands they are created and owned by distribution. Good examples include Tesco and Sainsburrys.

2. Classifying products
Products can be classified depending on who the final purchaser is. a) Consumer products made for the final consumer for personal family and household use. b) Business to business product to satisfy the goals of the organization. The same product can be purchase by both for example a computer for the home or the office. In addition, to categorizing by type or product offering, most products intended for consumers use can be further categorize by how frequently and where they are purchased. (Seulement dans la premire catgorie : consumer products !) Convenience products: these are products that appeal to a very large market segment. They are generally consumed regularly and purchase frequently. Examples include most household items such as food, cleaning products and personal care products. Because of the high purchase volume, pricing per item tends to be relatively low and consumers often see little value in shopping around since additional efforts yields minimal saving. From the marketer perspective, the low price of convenience products means that profit per unit sold is very low. In order to make high profit marketers must sell in large volume. Consequently, marketers attempt to distribute these products in mass, through as many retail outlets as possible. These are products that are readily available. Low priced heavily advertised and which are purchased quickly and often. Finally, packaging is important to sell the product. Shopping products: these are products consumers purchase and consume on a less frequent schedule compared to convenience products. Consumers are willing to spend more time locating these products since they are relatively more expensive that convenience product. And because they may possess more additional and psychological benefits for the purchaser. Consumers spend more time comparing prices, quality and style. Examples include many closing products, personal services, electronic 16

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products and household furnishings. Because consumers are purchasing less frequently and are willing to shop to locate these products, the target market is much smaller than that of convenience goods. Consequently, marketers are more selective when choosing distribution channels to sell their products. Speciality product: these are products that a consumer will make a special effort to locate. In many cases, consumers know in advance which product they prefer and will not shop to compare products. But, they may shop at retailers that provide the best value. Examples include high-end luxury automobiles, expensive champagne and customers are ready to pay the premium if necessary and will not accept substitute. Unsought products: these are products whose purchase is unplanned by the consumer but occur as result as marketer actions. Such purchase decisions are made when the customer is exposed to promotional activity such as a sales person persuasion or purchase incentives like special discounts. In short, unsought goods are products consumers are unaware off and that they do not necessarily think of purchasing. Examples include umbrellas, encyclopaedia, double glazing (double vitrage). Once, a company has developed a product, it has to decide on how to price it, how to promote it and where to sell it.

c) Marketing mix
a) Price: It is not easy for a company to set the price of a product. This is a tricky decision and the stakes can be high. Before deciding on it pricing method, the company has to define its objectives. Some of the most common are to achieve a certain overall profit target, to increase sales, to get a bigger share of the market, to achieve high profits on a particular product, to discourage competition, to promote a particular image and finally to accomplish social and ethical goals. b) Promotion Promotion is persuasive communication that motivates people to buy a companys products. It make take the form of advertising, personal selling, publicity, sales promotions, reseller support or a combination of the following activities. Advertising which is any paid form of impersonal presentation of goods, services or ideas using a mass communication medium. Personal selling which is the use of person to person communication to assist or persuade a prospect to buy. Its used especially when the number of buyer Anglais Langue & Affaires 17

is limited and the product is expensive and complicated. Publicity: is any unpaid media coverage of news about an organization and its products. Publicity may of course be positive or negative. Positive publicity may generate far more sales than pages of paid add. Sales promotion: is a direct inducement that motivates someone to purchase a product. It covers a wide variety of activities such as exhibiting at trade shows, displaying material at retail location and giving away coupons that offer a discount. c) Place There is many ways in which products can be distributed to customers. The channel of distribution may include own seller who sell products to other firms for resell or for industrial use and retailer who sell directly to the public. Here are a few examples of retail outlets that will be studied in more detail in the chapter on distribution. Department stores, these are large stores that offer a large variety of high quality merchandise (Macys US- Harrods GB) Speciality stores, shops offering particular type of goods such as children clothing. Supermarket, large departmentalized stores specializing mainly in foods and household products. Hypermarkets are extremely large supermarket where a wide range of products can be board. Discount stores, stores selling limited range of goods had prices 30% lower than supermarkets. Malls are completely closed shopping areas. Mail order firms are companies selling goods through catalogues and cheeping them directly to customers by mails.

3. Product mix
The product mix of a company consists of all the products offered by a particular organization. Its made of both product line and individual products. A product line is a group of products within the product mix that are closely related. Either because their functions in a similar manner are sold to the sales customers group, are marketed towards the same outlets or fall within given price ranges. Offering a wide product mix provide opportunity to increase the amount of goods sold to each customers. But as costs associated with the variety of resources required to support it.

4. Product positioning and product repositioning

No matter which target marketing strategy is selected the overall marketing strategy should involve the process of positioning the firm offerings in ways that will appeal to the targeted customers. Product positioning refers to a

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place, a product offering occupies in consumers minds and important attributes relative to competing offerings how new and current items in the product mix are perceived in the minds of the consumers. Therefore, reemphasizing the importance of perception. The role of positioning is a) To strengthen the power of messages directed at customers b) To target a particular segment c) To ensure that the product is differentiated in the mind of customers. d) To decide on the ground on which to compete e) To analyse repositioning possibilities Product positioning involves tailoring and entire marketing program including product attributes, images and price as well as packaging, distribution and service to better meet the needs of consumers within a particular market segment. In order to position a product effectively, the business must identify the attributes that are most important to the customers in the segment. And then, develop an overall marketing strategy that will attract consumers intention. Positioning can be usefully applied during the earliest stages of product design, when a company first identifies who its target customers will be, in terms of demographic, geographic and behavioural characteristics. Successful position strategy required: a) Clarity : the message must be clear b) Consistency : the message contain in promotion, in packaging and in the product itself should be consistent c) Credibility : the message has to be believable d) Competitiveness: the product should offer benefits that rivals do not. To position successfully the marketer must have thorough knowledge of the key benefit sough the market. Obviously the more effort the marketer devotes to the segmentation, the more likely they will know the benefits sought by the market. Once known the marketer must tailor marketing efforts to ensure they offerings satisfy the most sought after benefit and communicate to the market in a way that differentiate the marketer offering from competitors. Repositioning can be defined as changing the position of the product in the market. Its aim is a) to extend the product like cycle b) to move into a new market segment c) to adjust to changes in society and in social attitude

5. Product life cycle

The life of a product is the period over which it appeals to customers. The sales performances of any product rises for nothing when the product is Anglais Langue & Affaires 19

introduced into the market, reaches a pick and then, declines to nothing again. The life cycle of some product may last for hundred of years while for other it may be a few months. If a firm once to prolong the life cycle of its own distinct product it is essential to invest well in the development of the product and in the promotion. These may mean that a lot of work is put into the product before its launched. Once the product is on the market it may be necessary to periodically inject new life into it. These can be done in several ways including product improvement, extending the product range, improving promotion, etc. The stages through which individual products develop overtime are commonly known as the product life cycle. The classic product life cycle has 4 stages.

a) Introduction stage
When the product is introduced sales will be low until customers become aware of the product and its benefits. Some firms may announce the product before it is introduced but such announcement often alert competitors and remove the element of surprise. Advertising costs are usually high during this stage in order to rapidly increase customers awareness of the product and to target the early adopters. During the introduction stage, the firm is likely to have additional costs associated with the initial distribution of the product. This higher cost couple with a low sales volume usually make the introduction stage a period of negative profit. During the introduction stage, the primary goal is to establish a market and build primary demand for the product.

b) Growth stage
The growth stage is a period of rapid revenue growth. Sales increase as more customers become aware of the product and its benefits. And additional market segments are targeted. Once the product has been proven a success and customers begin asking for it, sales increase further as more retailers become interested in distributing the product. The marketing team may expand the distribution at this point. When competitors enter the market, often during the later part of the growth stage, they may be price competition and or increased promotional cost in order to convince consumers that the firms product is better than that of the competition. During the growth period, the goal is to gain consumers preferences and increase sales.

c) Maturity stage
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The maturity stage is perhaps the most common stage for all markets. Its in this stage that competition is most intense, as companies fight to maintain their market share. Competition may result in decreased market share and or price. The competing product may be very similar at this point, increasing the difficulty of differentiating the product. Sales promotions may be offered to encourage retailers to give the product more shelf-space over competing products so as to incite competitors customers to switch and convert non users into customers. During the maturity stage the primary goal is to maintain the market share and expand the product life cycle.

d) Decline stage
In the decline stage, the market is shrinking reducing the overall amount of profit that can be shared amongst the remaining competitors. Eventually sales begin to decline as the market becomes saturated. If the product has developed brand loyalty, the profitability may be maintained longer. Ultimately, depending on whether the product remains profitable the company may decide to withdraw it to the market.

Research suggests that customers go through five stages in the process of adopting a new product or service. 1) Awareness, so the customer becomes aware of the product but lacks information about it 2) Interest, the customer seeks information about the new product 3) Evaluation, the customer considers whether trying the new product make sense. 4) Trial, the customers tries the new product on unlimited scale to assess the value of the product. 5) Adoption, the customer decides to make full or regular use of the product A marketing team looking to successfully introduce a new product should think about how to help customers move through the five stages. Brands A Brand is a unique and identifiable symbol name, association or trade mark or other visual element which serve to differentiate competed products or services. In short, a brand is a name or symbol used to identify the source of a product. Brands are usually protected from use by others by securing a Anglais Langue & Affaires 21

trade mark or service mark from an authorized agency usually a government agency. Before applying a trade mark or a service mark you need to establish that someone else hasnt already obtained right on your name. Although the applicant can do the searching himself, its common to hire a law firm that specializes in doing trade mark searches and managing the application process, which in a country like the US can take about a year. Once the applicant knows that no one is using it, he can then begin to use his brand name. Building a strong brand is crucial to sustaining customers loyalty and trust. Yet protecting a company and its product is difficult in a world in which individuals and companies participate in piracy and counterfeiting activities. There are two main types of brands: manufacturer brands and own label brands.

1. Manufacturer Brands
Manufacturer brands are created by producers and bear their chosen brand name. The producer is responsible for marketing the brand and the brand is owned by the producer. By building their brand names, manufacturers can gain wide spread distribution for example by retailers who want to sell the brands and build customers loyalty.

2. Own label brands

Own label brands are created and owned by businesses that operate in the distribution channel, often referred to as distributors. Often these distributors are retailers but not exclusively. Sometimes the retailers entire product range will be owned label. However, most of the time, the distributor will mix own label and manufacturer brands. The major supermarkets, e.g. Tesco, Asda, Sainsburys, Walmart are good examples of this. Own label branding is well carried out can often offer the consumers excellent value for money (rapport qualit / prix) and provide the distributors with additional bargaining power when it comes to negotiated prices and terms with manufacturer brands. There are many advantages to businesses building their brand and this includes higher prices, higher profit margins, better distribution, and customer loyalty. Businesses that operate successful brand are also much more likely to enjoy higher profit and consumers are rarely prepared to pay a premium for products that simply deliver core benefits. Successful brand are those that deliver added value in addition to the core benefits (benefices that are delivered to all customers). These added values enable the brand to differentiate itself from the competition. When its done well, the customer recognizes the added value in the product and chooses the brand in preference.

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3. Brands and brand names

Marketing theory suggests that there are three types of brand names.

a) Family brand names

A family brand name is used for all products. By building customers trust and loyalty to the family brand name, all products that use the brand can benefit. Good examples in the food industry include Heinz, Kelloggs; of course the use of a family brand can also create problems if one of the products gets bad publicity or is a failure in a market. This can damage the reputation of the whole range of product.

b) Individual brand names

Lets take the example of Heinz. Heinz is a leading global food manufacturer with a very strong family brand. However it also operates many well known individual brand names like Farteys (market baby food), Linda Mac Cartney foods (market vegetarian meals) and Weight Watcherss foods (market diet foods and supplement) There are several reasons why a brand needs a separate identity unrelated to the family brand name. First, the producer may be competed in a new segment where failure could harm the name family brand name. Second, the family brand name may be positioned inappropriately for the target market segment. Third element, the brand may have been acquired in other words it has already established itself as a leading brand in the market segment. The fact that it has been acquired by a company with a strong family brand name does not mean that acquired brand has to be changed.

c) Combination brand names

A combination brand name brings together a family brand name and an individual brand name. The idea is provide some association for the product with a strong family brand name but maintaining some distinctiveness so that customers know chat theyre getting. Examples of combination brand name include Microsoft XP, Microsoft Office in personal computing software and Heinz tomato ketch up and Heinz Pet foods.

4. What are the features of a good brand names

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Brand names should be chosen carefully since the name conveys a lot of information to the customers. A good brand name should: Evoke positive association easy to pronounce or remember suggest product benefits be distinctive use numeral when empathising technological features not infringe register brand name be easy to translate into all languages in markets where the brand will be used

5. Building a brand
There are several main factors that contribute to the building of successful brands. a) Quality Quality is a vital ingredient of a good brand. Researches confirm that, higher quality brands achieve a higher market share and an higher profitability than their inferior competitors. b) Positioning Positioning is about the position the brand occupies in a market, in the minds of consumers. The positioning can be achieved through several means including brand name, image, service standards, product guarantees, packaging and the way the product is delivered. c) Re-positioning Re-positioning occurs when a brand tries to change its market position to reflect a change in consumers taste. d) Communication Communication also plays a key role in building a successful brand. All the elements of the promotional mix need to be used to develop and sustain consumers perceptions. e) First mover advantage

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Business strategies often talk about fist mover advantage in terms of brands development. By first mover, they mean that its possible for the first successful brand in a market to create a clear positioning in the minds of target customers before the competition enters the markets. f) Long term perspective It refers to the need to invest in the brand over the long term. Since building customers awareness, communicating the brands message and creating customer loyalty takes time. This means that management must invest in a brand perhaps at the expense short term profitability.

6. Brand equity, brand image and brand extension a) Brand equity

Brand equity is an intangible asset that depends on associations made by the consumer. It refers to the value of a brand. Its based on the extent to which the brand has a high brand loyalty and strong product associations. Brand equity also includes other intangible assets such as patens, trade marks and channel relationships. Strong brand equity provides the following benefits: It provides a more predictable income stream It increases cash low by increasing market share reducing promotional cost and allowing premium pricing. Brand equity is an asset that can be sold or leased.

b) Brand image
It refers to the set of believes that customers hold about a particular brand. These are important to develop since a negative brand image can be very difficult to shape off.

c) Brand extension
Brand extension makes use of the reputation of the existing products or services in order to increase the sales of both the new products and services and at the same time promote the existing products. A successful brand helps a company enter a new product category more easily. In a more and more competitive environment, brand managers are looking for ways to extend their portfolios and at the same time decrease the cost of the new product introduced as well as limits the risks of products failures. One of the most popular ways is to put a new product created in another category under the name of an existing brand and this is called Brand extension.

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Brand names and the advertising that supports them are especially important as signals of quality and consistency because a brand is a valuable assets, it acts as a disincentive to provide poor quality For many consumers goods and some producers goods companies their brand is their most important asset. Brands fulfil multiple roles most importantly a brand provides a guarantee by the producer to the consumer of the quality of the product. At its most base, a brand identifies the producer of a product. This ensures that the producer is legally and morally accountable for the product supply to the market. Further, the brand represents an investment that provides an incentive to maintain quality and customer satisfaction. The traditional role of the brand as the source of reliability has become of particular importance of ecommerce. Internet transactions are characterized by the anonymity of buyers and sailors like an experience between most buyers and sailors and lack of government regulation. As a result well established players in ecommerce, aol, amazone, Microsoft, EBay and Yahoo provide substantial brand equity in terms of reducing buyers perceived risks. By contrast the value conferred is less a guarantee of reliability and more embodiments of identity and life style. For these brands advertising and promotion are the primary means of re-enforcing customers perceptions.

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The role of the distribution system

Product decisions may be the most important of all marketing decisions since they lead directly to the reasons why customers decide to make the purchase. But, having a strong product does little good if customers are not able to easily and conveniently obtain it. With this in mind, return to the second major marketing decision area: distribution. Distribution decision focuses on establishing a system that allows customers to gain access to un-purchased marketer products. However marketers may find that getting to the point at which a customer can acquire a product is complicated, time consuming, and expensive. The distribution system must be effective, the good or service must be delivered to the right place, in the right amount, in the right conditions and at the right time for the right cost. However achieving these goals takes considerable efforts. Distribution decisions are relevant for all types of products physical goods as well as digital goods or services. In fact, while the internet is playing a media role in changing product distribution and its perceived to offer more opportunities for reaching customers, online marketers face the same distribution issue as off line marketers. In order to facilitate an effective distribution system, many decisions must be made including: Assessing the distribution channels for getting products to customers Determining weather resellers networks it needed to assist in a distribution asset. Ranging a reliable ordering system that allows customers to place orders Creating a delivery system for transporting the goods to the customers. Establishing facilities (infrastructures) for product storage. As the distribution channel, is made up of all the activities that help a marketer create and deliver products to the customer, the activities involve in the channel are wide and varied, though the basic activities revolved around these general tasks:

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Ordering Handling and cheeping Storage Display Promotion Selling Information feedback

As a result choosing the right distribution channel is critical to a business. There are several factors affecting how a business may decide on the most appropriate distribution channel: Profits and sales, which channel will maximize sales and profits using intermediaries such as agents, retailers and wholes sailors can help distribute the companys products on a wider scale. But can also lead to reduced profit levels. Product or service, firstly perishable products such as certain foods e.g. fruits usually require direct sale because of their short shelf lives. The s principal applies fragile products to reduce the amount of transportation and handling. Secondly, services need to be sold direct or through intermediaries that provides a strong link between the consumer and the business such as direct mails, e-commerce or telemarketing Thirdly, products of low value that are manufactured in high quantities are usually distributed by whole sailors. This way it reduces the issue of storage as own sailors will buy in bulk. The key question are how convenient is it for the consumer to buy the product : who is the target audience Competition, how does direct competition sells their product, is it enough to follow.


1) Definition

Retailing is defined as selling products to consumers for their personal use. Retailer is a reseller from which a consumer purchases products. In the US alone, there are 1 100 000 retailers according to the US Census of Retail Trade. Retailers operate outlet that trade directly with household customers. Retailers can be classified in several ways: Type of goods being sold e.g. clothes, furniture, grocery Type of service e.g. hairdressing, Size : corner shop, convenience store, super store As a reseller, the retailer offers many benefits to suppliers and customers. For consumers, the most important benefit relate to the ability to purchase small quantities of a wide assortment of products at prices that are considered reasonably offered able. For suppliers, the most important Anglais Langue & Affaires 28

benefits relate to offering opportunities to reach their target market, build product demand through retail promotions and provide consumers feedbacks to the marketers. The most basic characteristic of a retailer its his retail mix i.e. the elements used by retailers to meet their customers needs. Four elements of the retail mix that are particularly useful for classifying retailers are: the type of merchandise sold the variety of assortment of merchandise sold the level of customer service the price of the merchandise

2) Major stores types: department stores, variety stores, grocery stores and hypermarkets, speciality stores, convenience stores, online stores.
Department stores are retailers that provide a broad variety and deep assortment of products and services. They offer considerable customers services and are organized into separated department for displaying merchandises. Each department within the store is allocated a specific selling space. The major department are women, men and children clothing and accessories, home furnishing and furniture, kitchenware and small appliances. Recently, these stores have incorporated additional activities to attract customers e.g. restaurants, coffee shops, hair dressing, weeding services, etc. (Macys USA, Harrods GB, Gallery Lafayette FRANCE) Variety stores, they tend to be slightly smaller and more specialized offering reduced range of merchandise. Theyre appeal tend to be middle market and selection of traditional service is limited: usually, just coffee shops. These stores are characterized by low cost facilities, self service payment; they appeal to large heterogeneous markets especially price conscious customers. Grocery stores and Hypermarkets Grocery stores sell pre-packaged right food product as well as perishable items like produce dairy and meat product. Grocery stores also typically sell non food items such as stationary supplies, cookware, health and beauty products and greeting cards. Larger grocery stores may include features like fast food restaurant and flower shops and modern conveniences like internet cafs.

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Hypermarkets are 300 000 square foot larger than 6 football fees and stock over 50 000 items. Annual revenues are typically 100 000 000 $ per stores. Hypermarkets were created in France after WW2 and they have not been successful in the US for a variety of reasons including less restrictive land laws, competition, and store size. Hypermarkets are just a bigger version of the normal grocery super store using size to give a wider product range. They are few genuine hypermarkets in the UK. In France and Germany, which are bigger countries where real estate is generally cheaper, they are much more common. Speciality stores sell specific types of merchandises such as jewellery, electronic equipment or toys. The speciality store may be further divided into different categories within the speciality. For example, toy store may have separate department for video games, dolls and model cars. Speciality store may be small independently owned operation or larger stores that have part of retail chain. Convenience stores provide a limited variety of assortment of merchandises at a convenient location in 2000 to 3000 foot stores with a speedy check out. They are modern versions of the neighbourhood Mom and Pop stores. Often called the corner shop, these stores sell essential groceries, alcoholic drinks, drugs and newspapers outside normal shopping hours. However, as most grocery stores have extended their opening hours 24hours a day, 7 days a week, convenience stores are especially on endangered species. The only real advantages they have are proximity and friendly service. In the US, almost all convenience stores sell gasoline which accounts for over 55% of annual sales. Online stores With the advent of the internet age, online stores allow shoppers to make purchases from home or at the office by using a computer. Customers browse through the retailers online catalogue which features photos of the merchandise and return product description. When the shopper makes the selection, he pays for the merchandise with a credit card or by using an online payment service. The merchandise is then cheeped to the shoppers home.

3) Ways to categorize retailers : target market served, products offerings, pricing strategy, promotional focus, distribution method, service level, ownership
Retailers can be categorized according to the following criteria: target market served product offering

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pricing strategy promotional emphasis distribution method service level ownership

Target market The target market served can be divided into mass market, speciality market and exclusive market. Mass market Mass market retailers appeal to the largest market possible by sailing products of interests to nearly all consumers. The competition among retailers in such a large market is often fears. Speciality market Retailers, categorized as servicing the speciality market, usually target buyers looking for products, having certain features that go beyond mass market products such as customers who required more advanced products options or higher level of customer service. Exclusive market This market targets customers who are willing to pay a premium for features found in very few products and for highly personalised services. Since this target market is small, the number of retailers addressing this market within a given geographic area may also be small. Pricing strategy Retailers can be classified on the basis of their general pricing strategy. They must decide whether their approach is to use price as a competitive advantage or to sick competitive advantage in none price ways. Retailers in this category have 3 different approaches: Discount approaches, discount retailers are best known for selling low priced products that have a low profit margin. To make profits, these retailers look to sell in high volume Competitive pricing, these retailers often operate in speciality markets. Higher quality products nicer store sitting are used to create higher value for which the customers will pay more. Full price pricing, these retailers are likely to sell in lower volumes than discount or competitive pricing retailers. The profit margin for each product are much higher Promotional focus To generate consumers interest, retailers use a variety of promotional techniques such as: advertising, many retailers find traditional mass promotional message of advertising such as newspapers on the TV to be their

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best means for creating customers interest. Retailers selling online, they rely mostly in internet advertising as their promotional message of choice. Personal selling The promotional effort of retailers selling expensive or high end products is mainly based on person to person contact with customers.


Business models

What are the main different business models in the retail sector?

1) Mom and Pop stores

They represent the small individually owned and operating retail outlet. In many cases they are family run businesses. They provide a more personal shopping experience and employees usually provide a better customer service. However, things tend to cost a little more due to the fact that they dont buy in bulk.

2) Mass discounters
A discount store is a departmentalised retail operation that sells at prices substantially lower than conventional retailers. To offset the lower prices, expenses are kept down by minimising free customers services, maximising the use of self-service, and using inexpensive fixtures, decorations and displays. The starting point for discount stores is often traced to the opening of a radio and appliance store by the Masters Brothers in Manhattan in 1937. By the early 1940, a significant number of retail operations call discount houses had been established in several major cities. After WW2, discount merchandising grew rapidly. These explosions in growth was fuelled by consumers bargain hunting in the face of rising prices and the growing demand for goods that followed word time shortages. Discount stores sprang up across the USA to satisfy the demand for consumers goods, sparked by increased consumers confidence in discount stores and increased avialibilty of good from manufacturers discounting continued to grow rapidly in the 1950. And became an important part of the retail landscape. In addition to the national and regional chain that entered the industry in the 1950 several other open their doors in the early 1960. Among them, wera 4 that would become the giant of the industry: K-Mart, Wolco; Target and Walmart. Walmart is currently Americans biggest company and the number 1 retailer in the world. Today, Walmart operate nearly 2 800 stores in 12 countries.

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Walmart has considerably expending as acquired majority state interest in many joined ventures companies and is expending to new markets like India and Russia. While Walmart has grown to dominate the western hemisphere, it has stumble in countries like Japan, South Korea and in the European Union. The European mainland is a market Walmart has difficulties bring it into. Walmart attempted to enter the German market but found that the Walmart model would not sustainable and did not fit to the German culture or economy. Walmart business model, which is based on high saturation of stores, on the out squired of towns, massive distribution centres and influx of foreign goods was unlikely to succeed in the highly urban German market where public transport is extremely important and space is at the premium. In addition, the cultures of Walmart in Germany did not blend well. Walmart tried to impose many American management styles in Germany which were alien to the German people. While Walmart tired and failed in German, it did not attempt to enter the remainder of the European mainland which is dominated by other retailers such as Frances Carrefour. In addition, most of Western Europe runs on the street land use and labour laws that create significant problems considering Walmart anti-union-policy and strategy development. As for Walmarts UK subsidiaries Asda, it is a profitable yet problematic venture for Walmart. The number 2 retail and grocery chain in the UK has problems competing against more flexible and dominant UK rival Tesco.

3) E-Commerce
Commerce has a long tradition of profiting from innovative systems and tools. As technologys image successful businesses are quick to identify developing opportunities and expand their commercial capabilities. Conducting commerce electronically is no different. For many businesses, new technologies that digitally exchange text and monetary information are effective tools to serve traditional business goal of developing new markets and creating innovative business opportunities. E-Commerce can be defined as the buying and selling of goods and services on the Internet especially the World Wide Web. E commerce isnt an entirely new type of commerce. Its first image in the 1960 and private networks when large organisations develop Electronic Data Exchange (EDE) and banks implemented Electric Found Transfers (EFT). Today however, e-commerce is no longer the exclusive domain of large organisations and private networks. When the web first became well known, among the general public in 1994 many externs forecast that e-commerce would soon become a major economic sector. However it took 4 years for security protocols to become sufficiently developed and widely deployed. Subsequently, between 1998 and 2000, a substantial number of businesses in the US and Western Europe developed rudimentary web sites. Although, a large number of pure e-commerce disappeared during the dot com collapse (effrondrement des valeur internet) Anglais Langue & Affaires 33

in 2000 and 2001, many bricks and mortar retailers recognize such companies had identified valuable niche market and began to add ecommerce capabilities to their web sites. Even though, e-commerce has existed for more than 30 years, it has just recently sustained significant growth. In the past 5 years, the internet has became the mass communication medium. E-commerce growth is tied/linked directly to the sociological changes that have taken place in the past decade. As market expand, more businesses are attracted, which in turn drives the development of better more stable and secured technology to facilitate ecommerce. E-commerce is also conducted through the more limited form of communication called e-mail, fax and the imaging use of telephone calls over the internet. Most of this is business to business with companies attempting to use e-mail and fax for unsolicited ads to consumers and others business prospects. Besides, an increasing numbers of business websites offer main newsletters to subscribers. Finally a new trend is opt in e-mail in which web users voluntarily sign up to receive e-mail usually sponsored or containing ads about product categories and other subjects they are interested in.

I. Introduction

An important part of the marketing process is to understand the role of customers and the reasons that led them to make a purchase. Marketers are constantly gathering information about their customers in order to better

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serve them and most importantly to retail them as loyal customers. In recent years, a number of techniques are images that have designed to improve the relationship between the marketer and its current and potential customers but also to target new customers. Without a good understanding of customers, businesses find it hard to respond to their needs and wants. A good starting point therefore, is to carry out market research to find out customers requirements in relation to the 4 Ps. There are two main kinds of research, quantitative research which involves collecting a lot of information by using techniques such as questionnaires and other forms of surveys and qualitative research which involves working with smaller samples of customers often asking them to discuss products and services while researchers takes notes about what they say. The marketing department usually combines both forms of research. A useful definition of marketing is the anticipation and identification of customers needs and requirements so as to be able to meet them. Marketing theory traditionally divide customers into two broad groups: consumers buyers and industrial buyers. Consumers buyers are those who purchase goods for their personal consumption and industrial buyers are those who purchase goods and be off of the business or organisation. Businesses spend huge amount of money to understand what influences customers buying decisions. The main questions they tried to answer are: Who buys? How do they buy? When do they buy? Where do they buy? And why do they buy? For a marketing manager the challenge is to understand how customers might respond to the different elements of the marketing mix that are presented to them. If management can understand customers responses better than the competition, then it is a potentially significant source of competitive advantage. Such knowledge is critical for marketers, since understanding customers behaviour will help shed light and what is important for the customers and also suggest the main factors that influence customer decision making. The potential factors that may influence the customers purchasing decision are limitless and extremely complex. They include social factors, life style, culture, perception and interpretation.

A. Social factors

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A customers buying behaviour is influenced by social factors such as the groups to which the customers belongs and social status. In a group, several factors may interact to influence the purchase decision. The typical role in such a group decision can be summarised as follows: - Initiator i.e. the person who first suggest things of the idea of buying particular product or services. - Influencer i.e. a person who views or advices influences the buying decision - Decider i.e. the individual with the power and/or financial authority to make the ultimate choice regarding which products to buy. - The buyer, the person who concludes the transaction - The user, the person or persons who actually use the product or service. The family unit is usually considered to be the most important influence in the buying decision. Marketers are particularly interested in the roles and relative influence of the husband, wife and children on the purchase of a large variety of products and services. There is evidence that the traditional husband, wife buying rules are changing. Almost everywhere in the world the wife is traditionally the main buyer for the family, especially in the area of foods, households products and clothes. However, with an increasing number of women in full time work, the traditional roles are inversing. The challenge for marketers is to understand how this might affect demand for products and services and the promotional mix needs to be modified to attract mail rather than e-mail buyers.

B. Life style
In business, life style provides a means buy which advertisers and marketers endeavour to target and match consumer needs with products or to create aspiration relevant to new product. Therefore, marketers take the patterns of believe an actions, characteristics of life styles and direct them towards expenditures and consumptions. These patterns reflect the demographic factors, (i.e. the habits, attitudes, tastes, moral standard, economic level and so on) that define a group. These influencing factors relates to the way we live through the activities we engage in and interest we express. Lifestyle is often determined by how we spend our time and money. Successful life style brand speaks to the core identity of their customers. Individuals each have their own personality, based on their background e.g. ethnicity, social class, subculture, nationalities, etc. A life style brand allows individuals to associate themselves to the brand. One key indication that a brand has become a life style is when it successfully extends beyond its original product category. For example Nike used to be a company focusing on making running shoes but over time the company and its logo has become associated with the athlete subculture. This has allowed Nike to expand into athletic related categories such as sports equipment and apparel. Although life style brands are relatively uncommon on electronics and computer industry, apple has become a life style brand since it expanded its market share into the music Anglais Langue & Affaires 36

industry through its I-pod musical digital music player. The I-pod and the ubiquitous wide I-phone included are also considered to be a fashion accessories by song and may be considered a status symbol by others. Life style brands have gained an increased share of luxury market. Luxury based life style brands like Gucci, Armani, and Louis Vuitton allows consumers to buy products that they associate with a better more luxurious life.

C. Culture & other group membership

The culture is the most basic cause of a persons wants behaviour. Growing up children learn basic value from the family and other important groups. Marketers are always trying to spot cultural shifts which might lead consumers to look for new products. For example the cultural shift toward greater concern about health and fitness has created new opportunities for industries trying to meet the needs of customers wishing to buy for example law calorie foods, health club member ship, exercise equipment, activity or health related holidays. Similarly the increased desire for leisure time has resulted in increased demand for convenience product and services such as microwaves ovens, ready meals and direct marketing service businesses such as telephone banking and insurance. Marketers often use cultural representation to influence customers buying decisions, especially when they promote their product. The objective is to connect consumers using cultural references that are easily understood and that are likely to be embraced by them. By doing so, the marketer hopes the consumer will feel more comfortable with, and can relate better with the product since it corresponds with their cultural values. In addition to cultural influences, customers belong to many other groups with which they share certain characteristics and which may influence purchase decision. Often, these groups contain opinion leaders or others who have a major influence on what the customer purchases. Some of the groups we may belong to include: Social class, it refers to the hierarchical distinction between individuals and groups of society. It represents the social standing one has within society based on such factors as income level, education, occupation. Family, the family situation can have a strong effect on how purchase decision has made Reference groups, most consumers belong to many other groups with which they associate of in some cases feel the need to disassociate. Identifying and understanding the group consumers belong to is a key strategy for marketers. This helps them identify target market develop new

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product and create appealing marketing promotion to which consumers can relate.

D. Perception
Several factors influence our perceptions. Exposures involve the extent to which we encounter a stimulus. For example we are exposed to numerous commercial messages, bill boards, radio advertisement, bumper, stickers on cars, and signs on panels, places on shopping malls. Most of these exposures are random and we dont deliberately sick it out. Exposure in itself is not enough to significantly impact the purchase decision. In order for stimuli to be consciously processed, attention is needed. Attention is actually a matter of degree. Our attention may be quite high when we read directions for getting and income tax reform but low when commercial come on during a television program; also it can be high if its an advertisement for a product we are interested in.

E. Interpretation
Interpretation involves making sense out of the stimulus. For example, when we see red can we may categorise it as a Coke product. II.

Types of customers buying decision

Consumers are faced with purchase decisions nearly everyday. However, some decisions are more important than others and require more effort by the consumer. Others are fairly routines and require little efforts by the consumer. According to marketers, consumers face 4 types of purchase decisions: Minor new purchases, also these purchases represent something new to the consumer there are not very important for them in terms of need of money Minor re-purchases, these the most routine of all purchases and often the consumer returns to buy the same product without paying much attention to others product option. Thus, showing the loyalty to the brand. Major new re-purchases, these purchases are the most difficult of all purchases as the product being purchased is important to the consumer, in terms of investment. Besides, his choice is all Anglais Langue & Affaires 38

the more difficult as he has little or no previous experience making this decision. Major re-purchases, these purchase decisions are also important to consumers but, they feel rather confident in making these decisions as they have previous experience purchasing the product.

Understanding how customers treat the purchase decision, enable marketers to develop marketing strategy adopted to each type of situation as different buying situations require different marketing efforts. Now that we have discussed, the main factor influencing a consumers decision to purchase, lets examine the process itself. According to marketers, they are five steps in this process. However, whether a consumer will actually carry out each step depends on the type of purchase decision they have to make. Step 1: is called the desire to fill a need. In the first step, the customer for some reasons is not satisfied and wants to improve his/her situation. For example, the consumer may fill the need to buy something to eat or to drink because they are hungry or thirsty. External factors can also trigger consumers need. Marketers are particularly good at this, through advertising, in store displace and the intentional use of sent. Step 2 is called search for information, if consumers are motivated to satisfy a need, they will undertake a search for information for possible solutions. The sources used to acquire this information may be varied. Memory i.e. trying to remember past experience, internet search etc Step 3 is called evaluate option, consumer such efforts may result in asset of option from which a choice can be made. For example a consumer who need to replace a television set have multiple solutions to choose from, such as plasma, LCD liquid crystal display, CRT cathode ray tube, Within each solution type will be multiple brands offering the product the consumer is looking for. So marketers have to understand how consumers evaluate product option in order to better answer their needs. Most importantly, marketers must determine which criteria consumers are using in their selection of possible solutions and how each criterion is evaluated. Step 4 is called purchase, most of the time the solution chosen by the consumer is the same as the product whose evaluation is the highest. However, this may change when its actually time to make the purchase. The intending/intended purchase may be altered because the product is out of stock or because a competitor offers an incentive at the point of purchase or because there has been unfavourable publicity about the product.

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Step 5: is called after purchase evaluation, once consumers have made a purchase, they are faced with an evaluation of the decision. If the product performs below the consumers expectation, he will either return it or decide not to repeat purchase with that type of product. Such evaluations are more likely to occur in cases of expensive or highly important purchases. Customer service centres and follow up market research are useful tools in helping to address purchase concerns.


Customers relationship management

Types of customers Since customers are people who buy products and services from other people. Its important for businesses and particularly for marketers to understand what customer think and feel. Customers attitudes towards products are shaped by experience of the product. The friends opinions direct dealing with the company, and the advertising and other representation of the company. Irrespective of whether businesses customers are consumers or organisations, it is the role of marketer to understand their needs. In doing so they can develop goods or services that meet their need more precisely than their competitors. The organisation that can understand why customers make decisions such as who buys, what they buy, and how they buy, will by catering more closely for customers satisfaction and needs become potentially more successful. The super market industry provides a good example of the way in which different group of customers will have different expectation. Some customers just want to buy standard products at the lowest possible prices. They will therefore shop from supermarket that offer the lowest prices and provide a reasonable range of goods. In contrast, some supermarket shoppers are seeking such aspects as variety and quality. They will therefore buy from an up-market supermarket. Additionally some customers will have special taste or requirements such as wanting to buy fair trade products (commerce equitable) or organic foods and vegetable. Its clear therefore thats to be successful a business has to have a clear understanding of its target customers and of their expectations. In general terms a customer is a person or organisation that a marketer believes will benefit from the goods and services offered by the marketers organisation. As this definition suggests a customers isnt necessarily someone who is actually buying from the marketer. In fact customers may fall into 3 categories Existing customers, it consists of customers who have purchased or used an organisations goods or services, typically within a determined period of time. Existing customers are by far the most important of the customers groups since they have a current relationship with a company which keeps in close contact with them by sending them e-mail for example to inform them about special discount for new products. Getting these existing Anglais Langue & Affaires 40

customers to purchase more is significantly mess expensive and time consuming than trying to find new customers. Former customers, this group consists of those who have formally had relation with the organisation, typically through a previous purchase. However, the marketer no longer considers them as existing customers because they have not made a purchase from the marketer within a certain time frame or because they have purchased a similar product from a competitor. Potential customers, this group includes those who have yet to purchase but are likely according to the marketers criteria and requirements to eventually become existing customers. The requirements to become customers include such issues as having a need for the product, possessing the financial means to buy, and having authority to make the buying decision.


Customer relationship management (CRM)

CRM entails all aspects of interaction a company has with its customers. Whether it be sales of service related, computerisation has changed the way companies are approaching their CRM strategies, because it has also changed customers buying behaviour with its new advance in technology, especially the proliferation of self-service channels like the web, more of the relationship is being managed electronically. For small businesses, customer relationship management includes: a) CRM processes that help identify and target their best customers, generate quality sales and plan and implement marketing campaigns with clear goals and objectives. b) CRM processes that help create individualise relationships with customers to improve customers satisfaction and provide the highest level of customers service. c) CRM processes that provide employees with the information they need to know about their customers wants or needs and build relationship between the company and its customers. For marketers simply finding customers, who are willing to purchase their goods or services, is not enough to build a successful marketing strategy. By using marketing tools that are designed to maintain good relationship with customers, rather than concluding a quick sale, the organisation is more likely to satisfy its customers and thus to retain them. Indeed satisfy customers are more likely to become good customers. A good customer is someone who has the potential to undertake activities that offer long term value to an organisation. The activities performed by customers not only Anglais Langue & Affaires 41

include purchasing products but they also include such thing as offering feed bag on company performance, making prompt payment, offering suggestions of new products, and finally voluntarily promoting the companys products to others.

One definition of consumer behaviour is the study of individual groups or organisations, and the processes they used to select secure and dispose of products, services, experiences and ideas to satisfy needs and the impacts these processes have on the consumers on society. Understanding these issues helps business to adapt a strategy by taking the consumer into consideration. For example by understanding that a number of different messages, compete for the potential consumers attention, marketers learn that to be effective advertisement mist usually be repeated instantly. They also learn that consumers will sometimes be persuaded by more logical arguments but at other time will be persuaded more by emotional or symbolic appeals. By understanding the consumer, marketers will be able to make a more inform decision concerning their strategy. Finally, to survive in a competitive environment, a marketer must provide target customers more value than is provided by its competitors. And understanding of customers behaviour is the base for an efficient marketer strategy. Consumers reactions to these marketing strategies determine the organisation success of failure. Customers pas apprendre ! E-commerce normalement pas de question

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