Bài tập chuyên đề services marketing – crm en

CONTENT

Explain market segmentation with suitable examples.

In a large, wide and diverse market, it is difficult for company to connect all
customers, but the market can be divided into customer group or segment with
different needs and expectations. The Company needs to determine market segment
that they can meet the needs effectively. In this part, I will explain the market
segmentation with suitable examples

The market segmentation is the division of market into clear segments. A market
segment includes a customer group with the same needs and expectations. The
missions of the marketer are to determine the quantity and nature of market
segment and to identify the target segments.

To have effective marketing, the marketer shall:- Identify give preliminary
description of various buyers with different needs and expectations (market
segment).- Choose one or more market segment to enter (market identification).-
Create and transmit different benefits of products that the company release them to
the market for each target segment (market positioning).

There are different ways in market segmentation, but the most important thing is to
have adjustment to promotion in order to identify the differences in customer. The
key differences in segmentation are demographics, geographics, psychographics,
and product benefits. We will give clearer explanation with example of beer
customer segmentation in Vietnam market:

- Demographics segment: the statistics by personal characteristics include: gender,
age, income, education, ethnic and so on. According to the gender, those who love
drinking beer are male, about over 90% against female 10%. For age, those who
love drinking beer are at the age of 25 to 50 with higher percentage than the age of

below 25 and over 50. Those who drink beer with the income from 3 to 5 million
dong/ month accounts for higher percentage than those who have income of below

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3 million dong/ month and above 5 million dong/ month. For education, those who
drink beer with high school level occupy higher percentage than those who have
higher education level….

- Geographics segment : the market segment by the geographics is customers in
cities, provinces, domestic and international regions. The Southern beer drinker
accounts for higher percentage than the Northern and Central ones. The beer
drinker in Ho Chi Minh City has the highest percentage compared to other cities
and provinces.

- Psychographics segment : the customer research by psychographics consists of
attitude, value and lifestyle. For example, the beer consumer segment by the level
of utilization: a lot, a little or moderate; those who drink beer one a week occupies
higher percentage than those who drink beer one time a long time, or one time in a
several weeks

- Product benefits: the segment by product benefits: for instance, those who drink
bottle or can of beers accounts higher percentage than those who drink beer, black
beer or normal beer.

The fact shows that many brands did not focus on a certain customer segment, so
they suffered from miserable failure. Take Miss Saigon for example, when it
launched Miss Saigon Delux at the same class with CK, Channel, it did not get
success. The present customers will not accept the perfume at high price; the high-
income people will not use Miss Saigon perfume because the brand “Miss Saigon”

evokes the feeling of “cheap perfume”. The solutions to this case are to make
completely different name for products and not to let anything relate to Miss
Saigon.

In order to develop the most effective marketing plans, the Company needs to
understand what are the differentiation and prominence of market segments.
Identifying and satisfying the market segment is the key of successful marketing.

4. “PLC as a tool for marketing strategy" justify.

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When a new product is released to the market, the Company wants its products to
have a long and bright life cycle. The products may be sold forever, but the
Company wants to reach high sales in long run, and get profit in order to offset the
efforts and threats. They understand that every product has its own life cycle, and
they are not sure of how long and what model its products are. In this part, I would
like to present product life cycle (PLC) as a tool for marketing strategy.
The typical life cycle of products is in form of sinusoidal and it is divided into
stages as follows:

We will make survey on major characteristics of every stage in the life cycle of
products and according market strategies for such stages.
1. Development and Introduction stage: It is the planned research and development
stage (R&D), and the products are being released to the market. Because the launch
costs a little, the increase in sales is very slow. In this stage, the profit may be
negative or very low because the sales are low, and the distribution and advertising
cost is high. The familiar products such as soluble coffee, chilled orange juice and
coffee cream maker took years to enter a new stage of rapid development
In this stage, there are a few of competitors. The Company concentrates on the

customers who are the most willing to buy, who are usually high income
customers. The prices tend to be high because of high cost and relative low output;
the technical problems in production can be still unfinished, and it needs to have

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high interest rate to offset high advertising cost to the extent necessary to achieve
development”.
When introducing a new product to the market, the marketer can impose different
levels on marketing factors: price, place and promotion. If we consider price and
promotion, there are four strategic solutions to pursue.

- Quick skimming strategy: is the strategy which releases the products to the market
at initial high price and high level of promotion. The enterprise imposes the high
rate in order to ensure the gross profit on the products at the highest level. The
Company spends a lot of money on operations such as advertisement, promotion,
etc. in order to speed up the market penetration. This strategy is often applied to the
case in which the products are unknown to most potential markets; those who know
products expect to have products and they are willing to pay high rate to have such
products; the enterprise will face the potential competition; and the enterprise wants
to create the brand preference
- Slow skimming strategy: is the strategy which new products are launched at initial
high price and low level of promotion. The enterprise believes that the high rate
will make high gross profit on the products, and the low level of promotion will
keep the marketing cost low rate, and it will earn more profit in the market. This
strategy is used when the market has limited scale; most of market knows the
products; the buyer are ready to pay at high rate, and the potential competition does
not happen.
- Quick penetration strategy: is the strategy which new products are released to the
market at high level of promotion and initial low price, with the hope to get quick

penetration seed, and the largest market share. This strategy is only appropriate
when the market is large and it does not know the products; most buyers are
sensitive to the price; the potential market has serious competition; the Company
can gain high performance by scale and accumulate the production experience.
- Slow penetration strategy: is the strategy which launches new products at initial
low price and low level of promotion. The low price will encourage the customers
to accept the products quickly, and the low promotion cost aims at gaining high net

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interest rate. This strategy is appropriate with the market with strong elastic
demand by price, but less elastic by promotion factors; the market has a large scale,
know products and have potential competition

2. Growth stage: The growth stage is marked by the quick increase in consumption.
The competitors penetrate the market because they are attracted by the
opportunities of production expansion and high profit. They release new natures of
products and develop additional distribution stores.
The price is either fixed or reduced because the demand growth is very fast. The
Company still remains the promotion cost at the old rate or higher rate in order to
deal with its opponents. The quick increase in consumption reduces the promotion
rate of sales. The profit increases during the growth stage, whereas the advertising
cost is calculated on the mass volume, and the production cost of every unit is also
reduced thanks to “accumulated experience”. In the end of growth stage, the pace
changes from fast to slow. The Companies shall track the starting slow pace to
prepare for new strategies.
In this stage, the enterprise uses some strategies to extend the rapid growth of the
market as long as possible:- the product quality improvement strategy, enhance new
features and models for products.- penetration strategy into new market segments-
Strategy of expanding existing distribution scope and joining new distribution

channels.- Strategy of transferring the advertising objectives from introduction to
confidence and interest.- Strategy of right time discount to attract those who are
sensitive to price

3. Maturity and Saturation: it is the stage which the growth of sales is slow, because
the products are widely accepted by most potential customers. The profit may be
whether fixed or reduced because the marketing cost increases to protect products
from its enemies. This stage often last longer than previous stages, which places the
serious challenges for marketing managers. Most of products are in maturity of life
cycle and most of marketing managements are aim at dealing with problems of
products in such maturity stage.
The growth rate of sales is lower causing the surplus of production in industry, and

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making competition fiercer and fiercer. The competitors often applies discount.
They boost the advertisement and strengthen the relationships with intermediate
distribution and customer, add cost to research and development fund aiming to
make better models for products. Finally, these works will cause profits lower.
Some weak competitors started to withdraw from the market. In the industry, there
are only stable enterprises which their primary trends are to try to gain the
competitive advantage.
In the maturity stage, the enterprises often remove low quality products and focus
resources on products with high profit, and sometimes they look down on their old
or present products. The marketers need to systematically consider the market
strategies, products and improvement of marketing – mix.
- Renovation of the market: The Company tries to enhance the consumption of
exiting products in two directions: increase in user and increase in the use of every
consumer.
- Innovation of products: Marketing executives can renovate the properties of

products such as quality, features and design aiming to attract more customers and
gain better use.
- Improvement of marketing – mix: the marketing executives can stimulate the
sales by improving some factors of marketing – mix: Price, Place, Promotion and
Service. Subject to specific situation of marketing – mix of every enterprise, we
will improve factors in accordance with the market change. They need to take
notice that the improvement of marketing – mix is easy for opponents to imitate,
especially the discount and additional customer services. Therefore, the Company
needs to have full analysis of market factors, the structure of marketing – mix of the
Company and of its competitors in order to have possible and effective
improvement

4. Decline stage: After a period of existence in the market, most products and labels
will have lower sales. The reduction in sales may be low or quick, either fixed at
low rate in a long run, but it basically does not have profitability as before. That is
the expression of the decline stage

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The selection of marketing strategy in the decline stage of the product depends too
much on the relative attractiveness of the industry and competitive strengths of the
Company in such industry. For every product in the decline stage, the managers
must make decision on which marketing strategy they should perform: maintaining,
harvesting or removing:
- The company can make decision on maintaining its performance by additional
investment with the hope that its opponent will give up this industry.
- The Company can harvest the products or cut down on all types of cost (facility
and equipment, maintenance, R&D, advertisement, number of salespeople) with the
hope that the sales are still stable in a future. If successful, this solution will
increase the profit for the Company in the short run.

- Finally, the Company can remove products from its list of products, or sell them
to other enterprises.

In the change of economic situation, the competitors launch new competition
because a product experiences in new stages of interest and requirement by
purchaser. Therefore, the enterprise must propose next strategies in accordance
with each stage in the life cycle of products. Even when the Company knows that
the products cannot last forever, it still hopes to increase the lifespan and
profitability of such products

5. Explain process of selecting the final price.

Developing and managing the right pricing strategy are important in ensuring that
the Company can penetrate and dominant the market as well as effective business
operations. The price is affected by a lot of factors: The formation and movement
are very complicated. The reasonable management of pricing strategy requests to
deal with many general and synchronous issues.

Steps in pricing policy and planning are to select the pricing objectives; to
determine the demand; to estimate the cost; to analyze the cost price and supply of
competitors; to select the pricing method; and to chose the final price. In this part, I
will only explain the selection of pricing objectives.

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The enterprise will decide on where it should position its supply products in the
market. The clearer the objectives are, the easier the pricing is. Five main
objectives are penetration pricing, price skimming, product life cycle pricing,
competitive-base pricing, temporary discount pricing.

1)-Penetration pricing: the main goal of penetration pricing is to attract more
customers at low price and then use different marketing strategies to keep them.
The Company wants to get the highest market share. It believes that the higher
sales will have lowest unit cost and higher long-term profit. The conditions of this
tactic are- The market is very sensitive to the price and the low price will promote
the market growth- the production and distribution cost is reduced along with the
accumulated production experience- The low rate will discourage the real and
potential competitors.
Texas Instruments (TI) has applied this penetration pricing. TI will build the plants,
fix its price at the lowest cost and gain a large market share, witness the reduced
cost and reduce the cost.
2)-Price skimming: The main target of this strategy is to obtain profit quickly. The
Company imposes high price to recover the production and advertising cost
quickly. This strategy supposes that the Company captures the needs and costs, but
it is, in fact, difficult to estimate. If the Company appreciates the immediate
achievements, it can cause the damage to long-term achievement because they
ignore the impact of marketing variables, response of competitors and regulatory
constraints on price.
When Philips, a Dutch electronic producers fixed the price of phonograph so that it
is profitable for each piece, Japanese competitors fixed lower rate and establish the
market share, and then reduce the cost afterwards
3)-Product life cycle pricing: A product will get through various stages by the cycle
of the stages: Introduction, Growth, Maturity and Decline; called product life cycle.
The Company shall fix the product price by the stage of product life cycle. For
instance, in the introduction stage, the Company fixes the price by quick or slow

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skimming strategy, or quick or slow penetration strategy. This part will be

specifically presented in the question 4.
4)-Competitive-base pricing: the objectives of the Company are the survival. It
must face the surplus of capacity, fierce competition, or change in customer’s
needs. When the price offsets the variable and fixed costs, the Company still runs
its business. The survival is the short-term objective. In the long run, the Company
must find ways to enhance the value; if not, it can be deleted. Take a small paper
company for example, it needs to fix the lower rate, or it is unable to sell for the
paper box or Styrofoam cups used for fast food or out-door picnics, because the
customers often buy at the lowest rate when there are minimal differences in
products.

5)-Temporary discount pricing: the objective of temporary discount is to increase
the sales. It includes the coupons, cents-off sales, seasonal discount and every
volume purchase. For instance, a small clothing manufacturer can discount (a buy-
four-get-one-free promotion), or make seasonal discount after holidays in order to
reduce the inventories.

The price is an important element of marketing. This is the only component making
revenue, and other ones make cost. However, the decisions on pricing causes a lot
of challenges in the change of economic context and technical environment

7. Explain the process of integrated Marketing communication.
Currently, many enterprises only depend on one or two communication tools.
However, in fact, there is segmentation of public market into a large number of
small markets. Each market needs to have its own marketing method; the increase
in new mass media and the increasing complexity of consumers. The diversity of
communication tools, message and candidates forcing the enterprises to orient to
integrated marketing communication. In this part, I will explain the process of
integrated Marketing communication (IMC).

American Marketing Association defined the integrated Marketing communication
(IMC) “It is a planning process designed to assure that all brand contacts received

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by a customer or potential customer for products, services or organizations is
suitable with such person and durable over the time”. This planning process
evaluates the strategic role of a series of communication- for instance, mass media,
direct response, promotion, public relation- and it combines these industries
cleverly in order to provide the clarity, consistency, and maximum effect through
the seamless integration of the message .
Steps that the Company should make plan and implement IMC as follows:

- Review of Marketing Plan: At first, the enterprise will assess on performing the
existing marketing plan. Review the objectives and plans of marketing, the role of
advertisement and promotion, analyze the competition, and assess the effect of
environment (SWOT).
- Promotional Program Situation Analysis: For Internal Factors: Assess the
organization and advertising capacity of the Company; Review the previous
promotions by the company; evaluation of the Company or brand image and impact
on promotion; Assess the strengths and weaknesses of the products/ services. For
external Factors: analyse customer; analyse competition; and analyse the
environment.
- Analysis of the Communications Process: Analyze the response process of

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recipient; analyze of resources, messages and factors of communication channel;
establish the communication objectives.
- Budget Determination: Establish the communication budget and budget

allocation.
- Develop Integrated Marketing Communications Programs: the communication
tools include: advertising, direct marketing, interactive/internet marketing, sales
promotion, publicity/public relations, personal selling. Every tool needs to: set
objectives of tools; determine the budget of the tool, and develop the strategy of
tool: messages and means.
-Integration & Implementation of Marketing Communications Strategies: Integrate
promotional mix strategies; Create and produce ads; Purchase media time and
space; Design and implement direct marketing programs; Design and implement
sales promotion program; Design and implement public relations/publicity
programs; Design and implement interactive/internet marketing programs.
- Monitor, Evaluate & Control Promotional Program: Evaluate promotional
program results and determine effectiveness; take actions to control and adjust
promotional programs.

An example of IMC as follows: Dietrich Mateschiz established Red Bull in India
and introduced the energy drink in Hungary in 1992. Initially, Red Bull did not use
the communication advertisement as well as did not advertise its products via
newspapers, panels, banners or Super Bowl, whereas it runs 01 minimum amount
of advertisement on TV and cartoon spot
Red Bull started to develop the buzz about the products through viral marketing
tactics aiming at fashion shops, clubs, bars or stores. When there was been a
momentum in the bar, then it moved to the convenience stores near colleges,
fitness, nutrition stores and supermarkets. The marketing efforts of Red Bull focus
on building up the brand image with authenticity, originality and communities in its
own way. Next, Red Bull combined itself with a variety of adventure sports,
athletes, events and artists (music, dance and cinema). Red Bull’s website provided
consumers with information and event of Red Bull, video as well as interviews with

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athletes. Red Bull bought traditional advertisement when the market was in growth
stage and the Company needed to strengthen its brand towards the consumers.
The combination of integrated communication of Red Bull was so successful that
the company made a brand new industry: energy drinks, and it became a brand
worth billions of dollars between the competition of Coca Cola and Pepsi. Within
20 years, Red Bull became the market-leading energy drinks. Now, Redbull sold 4
billions cans of Red Bull energy drinks in more than 160 countries.

The management and regulation of the whole of communication process request
integrated marketing communication: make plan on marketing communication;
recognize the added value of a comprehensive plan in order to assess the strategic
role of a series of communication industry, and combine these industries aiming at
providing the clarity, consistency and maximum impact via seamless integration of
discrete messages.

8. Explain “direct marketing" and its applicability with examples.
Today, many enterprises build up long-term relationships with customers. They
send small gifts, material and birthday greeting card to customers, which is called
direct marketing. The direct marketing is the use of direct channels connecting
consumers to approach and provide goods and services for customers without using
the intermediary marketers. This part will explain “direct marketing" and its
applicability with examples.

According to the definition of the American Marketing Association, Direct
marketing is an interactive system of marketing, which uses one ore more
advertising media, to impact on the response which is responded and measured at
any where

Forms of Direct Marketing are telemarketing, direct-mail marketing, catalog

marketing, direct-response television marketing, kiosk marketing, online marketing
and face-to-face marketing.

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There are two main features to distinguish between direct marketing and other
marketing’s: firstly, it takes efforts to send the messages to the consumers. It uses
the form of commercial communication (direct mail, email, order via phone and so
on) in order to send to customers or enterprises. The second characteristic is to
emphasize on positive feedbacks which can be tracked or measured from the
customers. For instance, if a marketer sends a million of letter of sale and there are
twenty thousand of customers sending the feedback to Promotion, such marketer
can say that the marketing campaign had response.
The advantage of direct marketing for sellers: it is easy to use this marketing; there
is an interaction between the buyer and seller, the information is transmitted in two
dimension, the relationship between purchase and sale is personalized, the ability to
aim at high objective customers in order to aim at specific actions; thus marketing
is flexible and it does not depend on other means and the ability to measurement is
effective. In addition, the supply and marketing strategy becomes closer than
competitors.
The advantage of direct marketing towards buyers: build up the relationship with
sellers for purpose of satisfying their needs such as personal fashion, convenience
in purchase because the consumers lack time, and feel tired because of traffic and
parking; buy goods at cheap price and efficiency in term of specialty items
The disadvantages of direct marketing: lack the perception of customers, and the
percentage of response is very low; the consumer are confused and annoyed by
many messages and junk mail; especially marketing via phone making them
difficult to figure out the products because of lack of image.
To apply the direct marketing effectively, the Company needs to develop the
customer database and apply advanced information technology

An example of direct marketing: the founder of Leon Leonwood of the brand L.L.
Bean came back after hunting in 1911 with cold and soaked feet and revolutionary
idea. He combined a part of leather hat with rubber boot to make a dynamic and
comfortable pair of boots. He sent hunters a brochure including three pages
describing the benefits of new product and full warranty mode. However, it was not
successful at the first time. Off the first 100 shoes, 90 pairs of shoes had torn-off

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soles. Under the commitment, he returned the whole amount of purchase and the
problems were resolved. L.L Bean has still kept the golden rule that he declared at
the first time:” Selling good quality goods at reasonable profit, treating your
customers like a human and they will come back to buy more”. Today, L.L.Bean is
a company worth 1.4 billion U.S.D. In 2009, the firm made 49 different catalogues
and got 11 millions of addresses of customers. The website of the Company is one
of the leading electric commercial websites.

In conclusion, the direct marketing is an interactive marketing system which uses
one ore more mass media to meet or transact measurement at any place. The direct
marketing, especially e-marketing is booming.

REFERENCES
1. Keller, Kevin; Kotler Philip 2012, Marketing management, the 14th version,

Labor and Social Publisher.
2. Segmentation: market segment, dated May 13rd, 2014, from

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3. Do, Hoa 2011, what is the market segment and why to do segment? Dated May
02nd 2014, from /> C3%BAc-th%E1%BB%8B-tr%C6%B0%E1%BB%9Dng

4. Strategies by the product cycle life dated May 12nd, 2014 from
/> ky-song-cua-san-pham.
5. Pricing strategies in marketing mix dated May 12nd, 2014, from
/> VGs/edit?pli=1.
6. Nguyen, Hoang Sinh 2011, integrated marketing communication dated May 15th,
2014, from />7. Direct marketing – Solutions to crisis dated May 13rd, 2014 from
tp://mediapost.com.vn/tiep-thi-truc-tiep-qua-thu.html.

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