Bài tập marketing management

Bài tập marketing Management
CONTENT

1. Explain the following:
(a) Production concept
Philip Kotler and Kevin Lane Keller wrote: “The production concept is one of

the oldest concepts in business. It holds that consumers prefer products that are widely
available and inexpensive. Managers of production-oriented businesses concentrate on
achieving high production efficiency, low costs, and mass distribution. This orientation
makes sense in developing countries such as China, where the largest PC manufacturer,
Legend (principal owner of Lenovo Group), and domestic appliances giant Haier take
advantage of the country’s huge and inexpensive labor pool to dominate the market.
Marketers also use the production concept when they want to expand the market” (Philip
Kotler, Kevin Lane Keller, 2012, p. 18)

(b) Product line
“Firms may decide to split their product mix into groups known as product lines.
A product line is a number of products grouped together based on similar characteristics.
The characteristic used to split products, will depend on the firm and its product strategy.
They include product price, product quality, who the product is aimed at (target group),
and product specification/features. For example Samsung's mobile phones are divided
into product lines based on the following features; touch screens, slider/folders,
QWERTY keyboards and bar phones. Product lines help firms manage their products as
product strategy can be designed around product lines. This is useful if the firm has a
large product mix as there is less need to concentrate on individual product type
strategy.” (Product strategy, 2014)
(c) Augmented product
“Consumers often think that a product is simply the physical item that he or she
buys. In order to actively explore the nature of a product further, let’s consider it as three

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different products – the core product, the actual product, and finally the augmented
product. This concept is known as the Three Levels of a Product.

The augmented product is the non-physical part of the product. It usually consists
of lots of added value, for which you may or may not pay a premium. So when you buy a
car, part of the augmented product would be the warranty, the customer service support
offered by the car’s manufacturer and any after-sales service. The augmented product is
an important way to tailor the core or actual product to the needs of an individual
customer. The features of augmented products can be converted in to benefits for
individuals.” (Three Levels of a Product, 2014)

(d) Societal marketing concept.

Philip Kotler wrote: “Some have questioned whether the marketing concept is
an appropriate philosophy in an age of environmental deterioration, resource shortages,
explosive population growth, world hunger and poverty, and neglected social services.
Are companies that successfully satisfy consumer wants necessarily acting in the best,
long-run interests of consumers and society? The marketing concept side steps the
potential conflicts among consumer wants, consumer interests, and long-run societal
welfare.

Yet some firms and industries are criticized for satisfying consumer wants at
society’s expense. Such situations call for a new term that enlarges the marketing
concept. We propose calling it the societal marketing concept, which holds that the
organization’s task is to determine the needs, wants, and interests of target markets and to
deliver the desired satisfactions more effectively and efficiently than competitors in a
way that preserves or enhances the consumer’s and the society’s well-being.

The societal marketing concept calls upon marketers to build social and ethical
considerations into their marketing practices. They must balance and juggle the often
conflicting criteria of company profits, consumer want satisfaction, and public interest.
Yet a number of companies have achieved notable sales and profit gains by adopting and
practicing the societal marketing concept.” (Philip Kotler 2002, p.14)

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Body Shop is a cosmetic company found by Anita Roddick. The company uses
only vegetable based materials for its products. It is also against Animal testing, supports
community trade, activate Self Esteem, Defend Human Rights, and overall protection of
the planet. Thus it is completely following the concept of Societal Marketing.

Ariel is a detergent manufactured by Procter and Gamble. Ariel runs special fund
raising campaigns for deprived classes of the world specifically the developing countries.
It also contributes part of its profits from every bag sold to the development of the
society.

British American tobacco Company (BAT) is a British based Tobacco company.
It was found in the year 1902. BAT is involved in working for the society in every part of
the world. It conducts tree plantation drives as part of its societal marketing strategy.
(What Is Societal Marketing Concept And Give Its 3 Example? , 2014)
2. Explain various concepts of marketing with suitable examples.

There are five competing concepts under which organizations conduct marketing
activities: production concept, product concept, selling concept, marketing concept, and
societal marketing concept. Below, these concepts are defined according to Philip Kotler.

(a). The Production Concept: see answer sentence 1.a
(b). The Product Concept

The Product Concept “holds that consumers favor those products that offer the
most quality, performance, or innovative features. Managers in these organizations focus
on making superior products and improving them over time, assuming that buyers can
appraise quality and performance.
Product-oriented companies often design their products with little or no
customer input, trusting that their engineers can design exceptional products. A General
Motors executive said years ago: “How can the public know what kind of car they want
until they see what is available?” GM today asks customers what they value in a car and
includes marketing people in the very beginning stages of design.

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However, the product concept can lead to marketing myopia. Railroad
management thought that travelers wanted trains rather than transportation and
overlooked the growing competition from airlines, buses, trucks, and automobiles.
Colleges, department stores, and the post office all assume that they are offering the
public the right product and wonder why their sales slip. These organizations too often
are looking into a mirror when they should be looking out of the window. (Philip Kotler
2002, p.11)

(c). The Selling Concept
“The selling concept, another common business orientation, holds that
consumers and businesses, if left alone, will ordinarily not buy enough of the
organization’s products. The organization must, therefore, undertake an aggressive
selling and promotion effort. This concept assumes that consumers must be coaxed into
buying, so the company has a battery of selling and promotion tools to stimulate buying.
The selling concept is practiced most aggressively with unsought goods—goods
that buyers normally do not think of buying, such as insurance and funeral plots. The
selling concept is also practiced in the nonprofit area by fund-raisers, college admissions
offices, and political parties.

Most firms practice the selling concept when they have overcapacity. Their aim
is to sell what they make rather than make what the market wants. In modern industrial
economies, productive capacity has been built up to a point where most markets are
buyer markets (the buyers are dominant) and sellers have to scramble for customers.
Prospects are bombarded with sales messages. As a result, the public often identifies
marketing with hard selling and advertising. But marketing based on hard selling carries
high risks. It assumes that customers who are coaxed into buying a product will like it;
and if they don’t, that they won’t bad-mouth it or complain to consumer organizations
and will forget their disappointment and buy it again. These are indefensible assumptions.
In fact, one study showed that dissatisfied customers may bad-mouth the product to 10 or

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more acquaintances; bad news travels fast, something marketers that use hard selling
should bear in mind.” (Philip Kotler 2002, p.11)

(d). The Marketing Concept
The marketing concept emerged in the mid-1950s as a customer-centered, sense-
and-respond philosophy. The job is to find not the right customers for your products, but
the right products for your customers. Dell doesn’t prepare a perfect computer for its
target market. Rather, it provides product platforms on which each person customizes the
features he or she desires in the computer.
The marketing concept holds that the key to achieving organizational goals is
being more effective than competitors in creating, delivering, and communicating
superior customer value to your target markets. Harvard’s Theodore Levitt drew a
perceptive contrast between the selling and marketing concepts:
Selling focuses on the needs of the seller; marketing on the needs of the buyer.
Selling is preoccupied with the seller’s need to convert his product into cash; marketing
with the idea of satisfying the needs of the customer by means of the product and the
whole cluster of things associated with creating, delivering, and finally consuming it.

Several scholars found that companies embracing the marketing concept at that
time achieved superior performance." (Philip Kotler, Kevin Lane Keller, 2012, p.18)
(d) The Societal Marketing Concept: see answer sentence 1.d
3. Explain market segmentation with suitable examples.
Market segmentation is a part of a company's marketing strategy. It is the
process of dividing a large target market into smaller, more homogeneous groups of
customers that you can get more efficient market.
There are 3 reasons that today businesses are focused on finding the best market
segmentation for yourself:
-The consumer demand is huge, no businesses can meet all demand although it
is a global corporations.

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-Customer split more higher with every passing day based on age, style, income.
If they don't segment they can not create the products satisfying consumers.

-Based on the strength and resources of its own, each business can focus all
resources to best meet consumer demand .

There are 4 main factor for market segmentation: geographic, demographics,
psychographic, behavior:

-Geography: geographic segmentation is used by companies that sell products or
service specific to a certain community, state, region, country or group of countries. In
Vietnam, they can divide into segment North, Central, South area; urban, rural, ....If
company have enough force it can serve in many different areas, but should pay attention
to the difference of customers in each region.

- Demographic: business simply divides the larger market into groups based on

several defined traits. Age, race, gender, marital status, occupation, education and income
are among the commonly considered demographics segmentation traits. A example, a
company that sells feminine hygiene products will include "female" in its description of
its primary market segment.

- Psychographics: personality, social class, lifestyle, ...

- Behavioral: segmentation is based on user behaviors such as when do customers
buy product, number of times use the product, how to make decisions, the degree of
loyalty to the product, ...A company may have customers with a similar demographic
make up but distinct behavioral tendencies. Some may use the product daily, while others
use it weekly or monthly. Higher-income earners may have more interest in higher-
quality products versus low-cost products. This may prompt the provider to target higher-
end products and services to one group and more value-oriented offerings to lower-
income or budget-conscious customers.

Some examples of market segments :

- Toyota company has Lexus and Toyota brands . Lexus is the luxury cars are
sold mainly in rich countries like Europe and America . Toyota has a variety of kind that

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sell in the rest. Manufacturing plants are located in the appropriate position for the
optimal price .

- The banks in Vietnam issue many kind of ATM and credit cards for many
objects who have different incomes . Dong A Bank issue a ATM cards for some colleges.
They are not only ATM card but also a student's card with suitable preferential treatment
for students .

-Viettel get income segment . Initially they focused on developing prepaid
telecommunication services for rural areas, low -income areas. That is areas where VNPT
less concerned. After Viettel dominate market in this region, they continued to expand
in other areas where VNPT dominate . As a result, Viettel continued success .
4. “PLC as a tool for marketing strategy" justify.

A product has a life cycle because: i)- Products have a limited life; ii)- Product
sales pass through distinct stages with different challenges, opportunities, and problems
for the seller; iii)- Profits rise and fall at different stages of the product life cycle; and iv)-
Products require different marketing, financial, manufacturing, purchasing, and human
resource strategies in each stage.

This PLC curve is typically divided into four stages:
-Introduction: Because it takes time to roll out a new product and find dealer,
sales growth tends to be slow at this stage. During this period, the interest rate can be
negative or very low because of high cost (example: distribution cost , advertising).
- Growth: A period of rapid market acceptance and substantial profit
improvement.
- Maturity: A period of a slowdown in sales growth because the product has
achieved acceptance by most potential buyers. Profits stabilize or decline because of
increased competition.
-Decline: The period when sales show a downward drift and profits erode.
Summary of Product Life Cycle Characteristics, Objectives, and Strategies

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Introduction Growth Maturity Decline
Low sales
Characteristics Rapidly rising Peak sales Declining sales

Sales sales
Average cost
Costs High cost per per customer Low cost per Low cost per
Profits customer Rising profits customer customer
Negative
Early adopters High profits Declining
Growing profits
number
Customers Innovators Middle majority Laggards
Competitors Few Maximize
market share Stable number Declining
beginning to number
Offer product decline
extensions,
Marketing Create product service, Maximize profit Reduce
Objectives awareness and warranty while defending expenditure and
trial Price to market share milk the brand
Strategies penetrate
Product Offer a basic market Diversify Phase out weak
product Build intensive brands and models
distribution items

Price Charge cost- Price to match Cut price
plus or best
competitors’ Go selective:
Distribution Build selective phase out
distribution Build more unprofitable
intensive outlets
distribution
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Advertising Build product Build Stress brand Reduce to level
awareness awareness and differences and needed to retain
Sales among early interest in the benefits hard-core loyal
Promotion adopters and mass market
dealers

Use heavy sales Reduce to take Increase to Reduce to
entice trial advantage of encourage minimal level
heavy consumer brand switching
demand

(Philip Kotler 2002, p.172)
Marketing Strategies through the PLC:
a)-Introduction Stage
When introducing new products to market, marketing managers can set different
levels of marketing elements, such as price, distribution, promotion. Considering price
and promotion, there are four strategic options that can be pursued.

- Rapid skimming strategy is the strategy of launching new products to the
market with high initial price and strong promotion. Company set high prices to get high
gross profit per unit of product. Company costs more for advertising, promotions,

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increasing market penetration rate. This strategy is often be applied in cases the product
are unknown in most potential markets or who were known the product they desired
buying it and paying high price or company want to create preference brand.

- Slow skimming strategy is the strategy of launching new products to the market

with high initial price and slow promotion. Company set high prices to get high gross
profit per unit of product, promote slowly to keep low marketing cost. Therefore
company will skim more profit on the market. This strategy is applied in limited market
size; most market know products and customers ready pay high price; potential
competition is not capable of happening

- Rapid penetration strategy is the strategy of launching new products to the
market with low initial price and strong promotion. The company hope to get rapid
penetration speed and largest market share. This strategy is only appropriate when: the
market is large and not known products; most buyers are sensitive to price; the market is
implicit intense competition; The company can achieve economies and accumulate
productive experience.

- Slow penetration strategy is the strategy of launching new products to the
market with low initial price and slow promotion. Company set low prices to encourage
customers acceptance their product, promote slowly to keep low cost (get high gross
profit per unit of product). This strategy is only appropriate when: the market is high
price elasticity of demand and low promotion elasticity of demand; the market is large
size and know product; the market is ability competition.

b)-Growth Stage

During the growth stage, profits increase because advertising costs divide on
large quantity of products, production costs per unit is further reduced by "accumulated
experience". At the end of the growth stage, product increase slow down and the
company prepare new strategies for the next stage.

During this stage, the company uses several strategies to sustain rapid market
growth as long as possible:

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- Improving product quality and adding new product features and improved
styling;

- Adding new models and flanker products;
- Entering new market segments;
- Increasing distribution coverage and entering new distribution channels;
- Shifting from product-awareness advertising to product-preference advertising;
- Lowering prices to attract the next layer of price-sensitive buyers.
c)-Maturity Stage
At some point, the rate of sales growth will slow, and the product will enter a
stage of relative maturity. This stage normally lasts longer than the previous stages, and
poses formidable challenges to marketing management. Most products are in the maturity
stage of the life cycle, and most marketing managers cope with the problem of marketing
the mature product.
Three strategies for the maturity stage are market modification, product
modification, and marketing-mix modification.
-Market modification:
The company might try to expand the market for its mature brand by working to
expand the number of brand users. This is accomplished by (1) finding new customers
(working to change the attitudes of people who do not use such products); (2) entering
new market segments; or (3) winning competitors’ customers. Volume can also be
increased by convincing current brand users to increase their usage of the brand.
-Product modification:
Managers try to stimulate sales by modifying the product’s characteristics
through quality improvement, feature improvement, or style improvement. Quality
improvement aims at increasing the product’s functional performance—its durability,
reliability, speed, taste. New features build the company’s image as an innovator and win
the loyalty of market segments that value these features. However, feature improvements

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are easily imitated; unless there is a permanent gain from being first, the feature
improvement might not pay off in the long run.

-Marketing-mix modification:
Product managers can try to stimulate sales by modifying other marketing-mix
elements such as prices, distribution, advertising, sales promotion, personal selling, and
services.
d)-Decline Stage
After some time on the market, most of the products and brands will gradually
reduce its sales. The sales decline may be fast or slow, or stable at a low level for a long
time. In other words, profitability of product reduced. The product come in decline stage.
Through analysis shows that, marketing manager need to be aware the product
life cycle for planning marketing strategies that are suitable for each stage. The duration
of each stage will depend upon the product, its newness, its functions and the marketing
strategy of the company. With appropriate marketing strategies, the company can make
PLC become advantage. And, the PLC is useful tool in the formulation of marketing
strategy.
8. Explain “direct marketing" and its applicability with examples.
Before, direct marketing is understood as a form of marketing that product or
service is transferred from producers to consumers, not through any intermediaries.
Nowadays, with the development of communication technology, direct marketing is a
system of marketing by which organizations communicate directly with target customers
to generate a response and/or a transaction.
The direct marketing is a part of communications mix (consists of advertising,
sales promotion, public relations and publicity, personal selling, and direct marketing).
The common forms of direct marketing: marketing with catalogs; direct mail marketing,
telemarketing; direct response ads on TV, radio, newspapers and magazines, internet;

direct selling.

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All forms of direct marketing—direct mail, telemarketing, Internet marketing—
share four distinctive characteristics: They are (1) nonpublic (the message is normally
addressed to a specific person); (2)customized (the message can be prepared to appeal to
the addressed individual); (3)up-to-date (a message can be prepared very quickly); and
(4)interactive(the message can be changed depending on the person’s response).

Direct marketing gives many benefits. For buyers are: convenient, easy to use,
private, access to a wealth of information, immediate, interactive. For sellers are: building
relationships; targeting of small groups or individuals with customized offers in a
personalized fashion; access to buyers that couldn’t be reached via other channels; low-
cost, effective alternative for reaching specific markets

- Applicability
"Sales produced through traditional direct-marketing channels (catalogs, direct
mail, and telemarketing) have been growing rapidly. Whereas U.S. retail sales grow
around 3 percent annually, catalog and direct-mail sales are growing about 7 percent
annually. These sales include sales to consumers (53 percent), business-to-business sales
(27 percent), and fundraising by charitable institutions (20 percent). Annual catalog and
direct-mail sales are estimated at over $318 billion, with per capita direct sales of $630.
The extraordinary growth of direct marketing is the result of many factors.
Market “demassification” has resulted in an ever-increasing number of market niches
with distinct preferences. Higher costs of driving, traffic and parking headaches, lack of
time, a shortage of retail sales help, and queues at checkout counters all encourage at-
home shopping, as do 24-hour toll-free telephone order hotlines and Web sites.
Convenient next-day delivery via Federal Express, Airborne, and UPS has made ordering
fast and easy. In addition, many chain stores have dropped slower-moving specialty

items, creating an opportunity for direct marketers to promote these items directly to
interested buyers. Also, direct marketers now have the computer power and the detailed
data to cost-effectively single out the best prospects for their products. Increasingly,

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business marketers have turned to direct mail and telemarketing as an alternative to the
rising costs of reaching business markets through the sales force.

Electronic communication is showing explosive growth, with Internet traffic
doubling every 100 days. Millions of Web sites are already open for business, with more
coming on-line every day. Electronic businesses the general term for buyers and sellers
using electronic means to research, communicate, and potentially transact with one
another. Electronic markets are sponsored Web sites that (1) describe the products and
services offered by sellers, and (2) allow buyers to search for information, identify what
they need or want, and place orders using a credit card. The product is then delivered
physically (to the customer’s residence or office) or electronically (software and music
can be downloaded to a customer’s computer)." (Philip Kotler 2002, p.318)

REFERENCES
Philip Kotler, Kevin Lane Keller (2012), Marketing Management 14th edition, Copyright

© 2012, 2009, 2006, 2003, 2000 Pearson Education, Inc., publishing as Prentice
Hall, One Lake Street, Upper Saddle River, New Jersey 07458
Philip Kotler (2002) Marketing Management, Millenium Edition, Custom Edition for
University of Phoenix; PEARSON CUSTOM PUBLISHING 75 Arlington
Street, Suite 300, Boston, MA 02116 A Pearson Education Company
Product strategy (2014). Available at:
(Accessed May 21, 2014)

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What Is Societal Marketing Concept And Give Its 3 Example? (2014). Available at :
/> concept-and-give-its-3-example (Accessed May 21, 2014)

Three Levels of a Product (2014). Available at: /> levels-of-a-product/ (Accessed May 21, 2014)

Trương, Đình Chiến 2011, Quản trị Marketing, Nhà xuất bản Đại học Kinh tế Quốc dân,
Hà Nội.

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