Assignment

MarketingPrinciples

St Patrick College

2013

Assouan V Ackah Marketing Principles

Student Name: Assouan Vincent Ackah

Student ID: P1009154

Student Group: 5A

Lecturer: John H

Date Issued: 30/11/2013

Assouan v Ackah Marketing Principles

Introduction

In these case study, we will discuss the concept and

process of marketing, the concepts of segmentation,

targeting and positioning and also explaining the

individual elements of the extended marketing mix and

finally explain the used off marketing mix in

different contexts.

Task one

Consider these two definitions of Marketing:

1. “Marketing is defined as the management process for identifying,

anticipating and satisfying customer requirements profitability”

(The chartered institute of Marketing)

2. “Marketing is the activity, set of institutions, and processes for

creating, communicating, delivering, and exchanging offerings

that have value for customers, client, partners, and society at

large” (American Marketing Association,2008)

Answer

Part 1

The definition of the chartered institute of

Marketing gives a clear picture of the major

concerns of business focused organisation.

This definition has a number of key words:

Management process

This show the level of importance of marketing

decisions. Successful marketing requires managerial

input because it requires ongoing information

gathering, analysis and then evaluation in order to

make clear decisions.

Identifying

This involves answering questions such as how do we

find out what consumers requirements are? And how

do we keep in touch with their thoughts, feelings

and perceptions about our goods or services?

Anticipating

Consumer requirements change all the time. For

example, as people become more prosperous they may

seek greater variety of goods and services.

Anticipation involves looking at the future. What

will people require tomorrow?

Satisfying

Consumers expect their requirements to be met. They

seek particular benefits the right goods, at the

best price, at the right time and in the right

place.

Profitably

Marketing involves ensuring a margin of profit. An

organisation that fails to make a profit will have

nothing invest in the future. Without the resources

for ongoing marketing activities, it will not be

possible to identify, anticipate or satisfy

consumer requirements.

Section 2

The definition of the American Marketing

Association includes the role marketing plays

within Society at large. Defines marketing as a

science, an educational process and philosophy, not

just management system. It also expands the

previous scope of the term to incorporate the

concept that one can market something to do well.

One of the important changes to the new definition

for marketing is that marketing is presented as a

broader activity, according to (Nancy Costopulos)

head of the AMA; marketing is no longer a function,

but it is an educational process.

Taking examples from an organisation of your

choice.

(A) Discuss and summarise key issues and

elements of the Marketing process.

Executives Summary

In this project, we will discuss and analyse the

marketing process of the Baby food company name

“Nestle Cerelac”. This company is one of the

largest producer of infant food in UK and abroad.

Nestle is well known worldwide for its excellent

quality products include infant dietetic milk

(SMA), water and beverages. Their aim is to

provide customer with the best infant food at

competitive prices. Nestle Cerelac marketing plan

is based on various strategies, the company used

many ways to improve the quality of the products

and also to reach customers. Our report includes

the company vision, mission statement, and its

marketing objectives, description of the

products, situation analysis, consumption,

trends, profitability and future growth, Swot

analysis, competition. We will also explore the

marketing mix of the products which include,

pricing, promotion, and placement. The

segmentation and targeting will help to

understand the criteria of” Nestle” marketing for

a specific product.

Vision statement

Nestle vision is to be the global leader producer

of infant food. The company wants to meet the

food needs of all infant regardless of their

circumstances, background, or nationality.

Mission statement

To improve all infant quality of life by

producing and providing the best nutrition food.

Marketing objectives

Nestle wants to be the world’s largest and

biggest branded of infant food manufacturer.

Situational Analysis

Consumption

Nestle Cerelac products are consumed by infants

all over the world, and it is affordable to any

parents, the prices are cheaper.

Trends

Nestle provides innovative ideas that appeal to

customers in term of changing lifestyle.

Profitability

The world largest infant food company managed to

triple his annual revenue in the last two years,

until recently when the company sees sell

falling. The chief manager has described the

markets as tough, volatile and competitive. His

saying that the economic instability is for blame

as rising raw material prices, strong currency

and high inflation are the factors why sells

drop. But despite that the company managed to

drive growth in developed countries where

consumers demand is high.

Future Growth

Nestle is doing well on the global market; the

company mission is to provide healthy food to an

infant. Nestle has added new products and created

several plants with new technology in place to

improve the production and increase future sell.

Swot Analysis

As a result of carrying out a SWOT analysis, the

business should go on develop the policies and

practice that will enable it to build on its

strengths, minimize its weaknesses. Seize its

opportunities, and take measures that will cancel

out minimise threat.

Strengths Weakness .Good product

.Good relationship with

customer

.Good management team

.operate on small

scale

.Regular cash-flow

. Deal in a limited

market

opportunity threats.new and rapidly growing

markets

.changing tastes of

customers

.could diversify into a

number of product lines

. Growing competition

from rivals

.Recession leading to

poor demand in the

economy

.Development of

foreign competitors.

Strength

Nestle Cerelac is the leading selling of infant

milk in UK and abroad, they most demanding milk

by parents is the (SMA) milk. Every chemist and

big stores have them on their shelves. It is one

of their good product in the market. And the huge

demands abroad is so high that distributors in UK

refuse to export the product to china. Nestle

also develops good relationship with customer.

Weaknesses

Nestle has limited his distribution of infant

food in some of poorest countries in the world

because some of the products are unfordable. They

don’t seem to do well in those countries.

Opportunities Nestle Cerelac can review the Asian market and

concentrate their production and distribution in

Asia instead of Europe because, countries in Asia

have a large population producing many children

so for Nestle to expand they business in those

countries will increase profits.

Threats

The emerging of new infant food brand on the

market will have an impact on Nestle in the

future. There is growing competition from rivals.

Recession leading to poor demand in the economy,

development from foreign competitors.

CompetitionNestle is competing with other infant food

producer brand and food stores, chemist is also

competitors as they promote variety infant food

from different brand on the market.

SegmentationNestle use segmentation to target customers, they

do so according to set criteria include,

geographic, demographic, psychographic,

behavioural. By doing so, they are able to

determine what the customer want and need.

Marketing Mix

Product

Nestle has various types of products to choose

form. Some of the products are made of rice,

fruits, meat etc… it’s all depend on the customer

choice base on what they want and need.

Price

Nestle products are affordable to anyone. The

company tries to keep the price lower to appeal

to any customers in a competitive market.

Promotion

Nestle promotes the product through media

channels, TV, newspapers, magazines.

Placement

Nestle products are funded all over the globe.

(B) Evaluate the marketing orientation for a selected

business, clearly highlighting the costs and

benefits involved with each approach.

Production Concept

Nestle will produce many quantity of their most

demanding products and make them available for

supermarkets stores and chemists to expose them on

their shelves. The company knows what the customer

want and need and make sure that the most popular

products are available in the stores.

Product Concept

Nestle has developed a range variety of products

include (SMA milk, SMA banana flavour, SMA

chocolate flavour) each of the product has his

own taste and flavour, shape, and colour, and

that is because the company has a clear view of

what their customer want and need. Parents are

able to choose the one that is preferred by their

child. Nestle produces these product with the

best ingredient so that once tasted by a child

will favour the product. Even the container

carrying the milk is nicely colour looks

attractive to any parents to let their child try

the product.

Selling Concept

Nestle Cerelac has adopted the idea of promoting

each of their product because the company is

aware that when the product is produced and out

form factory they need to promote that product in

the idea of making the consumer know about the

existence of the product, the quality, and how

good this can be for them . And some consumers

are reluctant to try a product that their not

familiar with for that reason Nestle Cerelac

focus on the existing products by promoting it in

the end the business end up selling volume of the

product and make profits.

Marketing Concept

Nestle will first develop a customer orientation

by being a strong advocate for the customer’s

point of view. By collecting information through

access to the most relevant and details

information sources. The marketing managers of

Nestle Cerelac first task is to obtain

information relating to customer needs. Once such

information is collected, marketers can develop

products and create marketing strategies to meet

these needs. Nestle will fund out about

customer’s requirements before supplying the

products to satisfy customer needs. The company

needs to communicate effectively with their

buying publics through the selling process.

Societal Marketing concept

Nestle is always seeking to meet the individual

needs and wants of customers by being honest with

the product that the business sale, being open ,

recognize the business responsibility to the

customer’s and caring for those in need.

Benefits of Marketing Orientation

Nestle Cerelac will benefit from Marketing

oriented because it will allow the company to

achieve the high level of branding. Contented

customers stay with the company. In these days of

branded products, the brand is all powerful.

Customer who is happy with Nestle Cerelac product

will often buy their products. And also Nestle

Cerelac need to develop new product that will

help the business grows.

Cost of marketing orientation

Nestle Cerelac focusing on marketing within the

business and product marketing in particular do

not come without costs. The prime cost of

marketing activities is in the use of scarce

resources that involve time, money, people, etc…

but Nestle needs to invest in market research

because the business needs intelligence to

respond in the competitive markets. Thing like

technology is also important as this allow the

company to use databases to collect, analyse and

use customer data.

Task2

(A)The concept of segmentation, its value and

give examples of segmentation criteria that can

be used for products or services in different

markets.

Segmentation

"Segmentation can be defined as a process of

dividing the total market in different segments for

product or service into distinct sub-groups”.

(Whaley, A. 2010, P72). In segmentation each segment

represents a separate target market to be reached

with a distinctive marketing mix. Market segment

means dividing the market into different subsets of

customers with different needs. Segmentation can also

be summarized as dividing the market by set of Pre-

determined criteria. (Taken from Whaley, A. 2010, P).

Argos has successful mechanisms for identifying

customer needs, generating new product ideas,

developing product, testing them in selected test

markets and then launching them on a national basis.

Segmentation is not easy to achieve, because, in the

society, different groups of people have different

choices and needs about products. It can only be

achieved when customers share similarly of demands.

Example

Argos’s segmentation

Argos supply different products to suit customer

with similar needs. Many variables can play a role in

buying decision of consumers. In Argos demographic

approach is used because demography is the study of

population, and it refers to personal statistics like

income, age, gender, nationality, religion, and

occupations etc. Argos adopts demographic approach

because this approach represent the every member of

the society i.e. there are many high and low income

people in society, they have different needs and

choices . Furthermore, people of different ages and

background are also important for the business.

before dividing the market in different segments.

Argos’s strategy about market segmentation is to

fulfil the need of every customer. It does not matter

customer is rich or poor, male or female, educational

or uneducated etc. Argos creates well balanced market

segment for its target and product. (The Times i,

2010)

(C) Examples of targeting strategies and applying one

of them to a selected product/service of your

choice.

Targeting

After the completion of segmentation companies decide which

segment they need to target, and it depends on the size, area,

profit and growth of each segment. So, “Targeting of business

is defined as the identification of market segments that are

identified as being the most likely purchasers of the

company’s product”. (Whaley, A 2010:P76) In targeting, the

business should target segments in which it has a differential

advantage over its competitors. choice about targeting

segments should generally depend on many factors. The first

part in targeting is checking the existing level of the

competition and how good it is serving the customers need. The

organisation should know about segment, how large it is and

how we can expect it to grow and have company strengths as a

company that will help customers demand particularly to one

group of customers. Company’s actual ability of communication

with the segment is also an important factor for companies in

targeting. (Whaley, A.2010:P76)

Model

Argos‘s Targeting

Customer buying habits change with the passage of time.

Advancement of the technology changes customer shopping habits

because technology makes its access simple for people. people

these day are using the internet for shopping and buying

goods. The one that like traditional shopping come into

stores to buy goods, but the proportions of online buyers are

increasing. This behaviour of customers changes companies’

approach of targeting. Argos thus uses a variety of modern

channels to communicate with customers and to provide them

with facilities for inquiring about availability of stock, and

for making purchases.

Argos do understand that customers have different needs and

prefer to shop in different ways. Argos way of targeting

custromers has been successful because Argos’s customers have

already decided what they want to buy before visiting stores.

Argos targeting approach is relevant and reliable for its

customers, because it’s grant customers easy access for its

products. Hence, Argos is using modern technology to target

its customers because the company understand that in this

busy world thecnology has become a way of life to people..

(The Times i, 2010)

© How marketers can propose and change positioning

strategies for a market segment.Positioning

positioning in marketing process. refers to the way in which

an organization sets itself apart in the market and how its

products are perceived by the target market as a whole”.

(Whaley, A 2010:P77) Product positioning is the process of

creating product features. These features are: product, place,

promotion and distribution. Positioning is therefore very

important, this the way the organisation communicates the

benefits of a product to customers. A study by competitor’s

show that positioning and services, products are very

important for to businesses, because it’s essential for a

business to make good place for its customers and information

about products for customer needs. Customers need should be a

main priority of the company. (Whaley, A.2010:P77)

Example

Argos Positioning

As discussed previously, product positioning is the process of

creating product features. These features are the product,

place, promotion and distribution. Positioning is the final

step in STP process. A strong positioning strategy is very

important for the business. Argos product positioning is using

a differentiated business strategy. Argos’ low prices create

value for its customers and its branded products lines are

able to meet the demands of customers. Argos uses low price

strategy and the company cut cost through retailing channels

and the business useless team. Argos positioning strategy

about area divides in three formats. These formats are store

format, online format and catalogues. In distribution feature,

Argos distributes products through Royal mail and its own

delivery services. Argos uses advertising tools like internet,

TV and indirect advertising through shopping catalogues for

the promotion of its products. (Scribe i, 2010)

Argos as a truly multi-channel, value orientated general

merchandise Retail Company. Its strategy about product

positioning is differentiated and formatted. Argos offers

highly competitive customers through its positioning features

like product, position, distribution and promotion.

Infrastructure advantages approach is to gain infrastructure

advantage to increase revenue for this purpose Argos spends

capital to improve its stores because strong infrastructure

also helpful to build product position in the market for

customers. Argos positioning about reductions or increased

flexibility cost has been achieved while Argos is still

maintaining or improving its operational standards. (HRG PLCi:

2010B).

(d) How buyer behaviour influences and affects marketing

activities in different buying situations.

It is important to understand that when people buy

goods and services they are really choosing benefits

rather than the product or service itself. for

example: when a consumer chooses to buy a brand new

Toyota car the consumer will be seeking the one that

gives him the most valuable benefits per pound spend.

Clearly the most important benefit for him will be

that the car gets him and his family from one place

to another. It will take him to work, to sporting

events, to cinema, and to France during the summer

holidays. This is the prime benefit. However, the

consumer also seeking other key benefits like, he

wants the car that will be safe, be fuel efficient,

create minimal environmental quality impact or be

easy to park, comfortable so, in his mind, he will

prioritise these benefits, deciding how important

each will be influencing the buying decision. A key

purpose of research is to identify the range of

benefits that consumers seek when buying goods. Once

customer requirements are identified it becomes

possible to supply quality goods. Quality goods are

ones that are fit for the purpose required.

Examples that show how the marketing mix can differ

from segments to segment with justification for your

choice.

The main objective of segmentation is to identify a

group of customers with similar needs and

characteristics. The task is to produce and supply

different products to suit these segments.

Understanding the market segmentation can give an

opportunity to the marketer to create a more

effective and efficient marketing mix. The ways that

marketing mix can differ from segment to segment it

is by Generic Market (Large Segments) and Product

Markets (Small Segments).

Generic Market

A generic market constituted of groups customers who

have a general need, but have many offerings to

choose from to meet that need. For example

transportation is a generic market that can be met by

many offerings: car, bus, subway, taxi, etc..

Product Markets

Refer to a group of customers who have a very

specific need, with fewer offerings to choose from.

For example, the luxury car market fulfils a specific

need and has only a few options to choose from: we

have Bentley, Aston Martin, Ferrari, etc.. Product

market segments are related within the specific

segment, example of (luxury cars), and are different

across segments example of (luxury, Mid-size,

Economy), and each segment has very specific

features, which when reflected in the product, can

return higher profits to the business.

Markets can be segmented by defining the goals of the

customers in the market subset. For example, in the

transportation market (Generic Market), a group of

customers who’s goals of transportation are to be

able to travel in their own vehicle, feel

comfortable/ safe/ fast relative to other transport

options, and be able to show other people how nice

their own vehicle is: this subset can be said to have

goals which define as a luxury car segment.

Task 3

Write a formal report to the chairman of the company,

which will

(a) Examine the key macro environmental factors

that Sainsbury’s will have to consider as it

tries to become an international marketing firm

and clearly showing how and why international

marketing differs from domestic marketing.

The best and simple ways for Sainsbury’s to

integrate the global economy and compete

successfully in the international market. A

company must focus on the Stakeholders. There are

the most valuable resource available to the

business. The stakeholders of Sainsbury’s:

Owners, customers, suppliers, government,

distributors, local community, workforce,

interest groups, creditors, society.

Influence of stakeholders

Customers are the most important group in the

micro-environment. The company must recognize

that it is customers who ultimately make the

choice of whether to spend their money on a

particular product. Other relevant stakeholders

are the Employees. Staff will be motivated only

if they believe in the business. Suppliers will

do their best only for a company that respect

them, the local community wants to know their

rights are being respected, and so on. Success

will generate Sainsbury’s if they operations are

based on values shared by all stakeholders.

(b) Describe and discuss the value of the four Ps

of the Marketing Mix

Description:

Price: refers to the value that is put for a

product. It depends on costs of production,

segment targeted, experience of the market to

pay, supply - demand and a host of other direct

and indirect factors. There can be various types

of pricing strategies, each tied in with the

overall business plan. Pricing can also be used a

demarcation, to differentiate and enhance

The image of the product.

Product: refers to the item actually being sold. The

product must deliver a minimum level of performance;

otherwise even the best work on the other elements of

the marketing mix won't do any good.

Place: refers to the point of sale. In every business,

catching the eye of the consumer and making it easy

for her to buy it is the main aim of a good

distribution or 'place' strategy. Retailers pay a

premium for the best area. In fact, the mantra of a

successful retail business is 'location, location,

location'.

Promotion: this refers to all the activities undertaken

to make the product or service known to the user and

trade. This can include advertising, word of mouth,

press reports, incentives, commissions and awards to

the trade. It can also include consumer schemes,

direct marketing, contests and prizes.

The value of the marketing mix

All the elements of the marketing mix influence

each other. They make up the business plan for

the company and managed right, can give it great

success. But handled wrong and the business could

take years to recover. The marketing mix needs a

lot of understanding, market research and

consultation with many people, from users to

trade to manufacturing and many others.

(c) Describe and discuss the value of the three

additional Ps of the service marketing mix

To discern the differences between services and

physical products, the 4Ps marketing mix i.e.

Product, Process, Pricing and Promotion has been

extended to include three additional 3Ps:

People, Physical Evidence and Process. The unique

3 Ps of services marketing influence the

customer’s decision to purchase a service, the

customer’s level of satisfaction and repurchase

decisions.

People:

They carry the responsibility of projecting the

image of the service firm. Because of the

inseparability of production and consumption of

services, service delivery is characterized by

interactions between customers and service

employees.

Physical Evidence:

Physical evidence of service includes all the

tangible representations of service such as clear

signage, good ventilation, adequate space,

internet presence, equipment and facility. As

services are intangible, customers are searching

for any tangible cues to help them understand the

nature of the service experience.

Process: Process is referred to as the

procedures, mechanisms and flow of activities by

which the service is delivered i.e. the service

delivery and operating systems. Delivering

customer expectations depends on how well various

steps function together.

In summary, delivering the service customers

expect depends on how well the 3Ps of People,

Physical evidence and Process function together.

These elements include the people who perform.

(d) Explain how products will be developed to

sustain competitive advantage

competitive advantage can be defined as the

strategic advantage that one business entity has

over rivals within the same competitive business.

Achieving a competitive advantage puts a business

in a stronger position within its business

environment. There are various ways in which a

business might think about developing a product

in order to sustain or build a competitive

advantage:

Staged release into the market

It could be considered beneficial to hold back

certain developments you have made to the product

so that you can release an improved version of

the product periodically, rather than release it

once and then fail to improve upon the product

thereafter. The staged improvement of the product

can make it appear dynamic and exciting to the

customer, whereas rival products might be

perceived as static and boring in comparison.

Differentiation and positioning

If you can differentiate your product from that

of your competitors, then you can set yourself in

a prime position in the market. If you can

provide unique and great benefits to your

customers that no one else can provide them, then

you are well-positioned to maintain them as loyal

customers.

Research and marketing

The development of new products has to be based

on the want and needs of the customer rather than

simply releasing a product and waiting to see if

the demand is there for it, firms should be

conducting market research beforehand in an

attempt to find out whether there is a demand for

a product and a gap in the market for a

particular product if the firm release it.

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