Individual assignment marketing management

iNDIVIDUAL Assignment Marketing Management

CONTENT

1. Explain the following:

(a) Production concept

(b) Product line

(c) Augmented product

(d) Social marketing concept.

The Production Concept

Focus on production as customers will benefit when there is availability, wide
distribution at low prices so marketing management should focus on boosting
production work as well as product distribution. This concept is often explained
mainly by the following factors:

Firstly, when the demand for products exceeds the supply, customers will pay more
attention to getting the product than focusing on product quality. Therefore,
enterprises will increase the scale to increase sales and profitability.

Secondly, to reduce production costs, enterprises look for increasing production to
achieve economic effect and thereby expand the market.

The advantage of this concept is it obviousness when demand exceeds supply.
However, the biggest drawback when supply exceeds demand is waste when products
cannot be sold, revenue cannot offset costs; or low price as well as the ease of

shopping (due to wide distribution) is not the major factor attracting customers so that
they decide to purchase goods.

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The Product Line

All goods are manufactured by an enterprise.

A group of closely related products is manufactured by the same process and is for the
same purposes and only differs in presentation, style or size. For example, Coca-Cola
has beverage product line: Coca-Cola, Fanta, Sprite ... etc.

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Augmented product
Factors positively impact customer's decision are products are provided with
additional value. These values are considered a part of an augmented product,
including:

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- Guarantee: When a product is damaged, the seller will replace it with a new product,
repair or refund the customer.
- Warranty: Provide customers a warranty regime by repairing or replacing some
certain components freely during warranty period.
- Customer service: Include services supporting clients such as: user manual, advice
via telephone or website.
- Product adding: Strengthen some utility to make the product be easier to use as
carry-bag for laptops ... etc.
- Accessibility: Make sure that customers can get the product quickly such as fast
delivery, shipment to buyers.

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The Social Marketing Concept
Social marketing concept does not only bring satisfaction to customers but also ensure
social benefit because it is believed that consumers’ satisfaction is not enough, but it
must be the interests of the whole society.
In the last time, enterprises made their marketing decisions based on profit, but now
satisfying customer needs and knowing the importance of social benefits have been
focused more and more. As a result, marketing activities will be significantly
improved with longer-term benefits.
2. Explain various concepts of marketing with suitable examples.

There are many different ways to define marketing: Marketing is the process of
organizing the sales force to sell goods produced by a company. Marketing is the
process of advertising and sales. Marketing is the process of understanding and
satisfying the needs of the market and marketing is to do market, research the market
to satisfy it.
We can also understand that marketing is a mechanism which organizations and
individuals use to satisfy its needs and wants through product exchanging processes
on the market. According to Philip Kotler, marketing is understood as follows:
Marketing is a process of social management, whereby individuals and groups obtain
what they need and want through creating, offering and exchanging valuable products
with others. This concept of marketing is based on the core concepts such as needs,
wants and requirements, product, value, cost and satisfaction, exchange, transactions
and relationships, market, marketing and marketers.
So, marketing is a conscious activity of man to satisfy the needs and wants through
product exchanging processes on the market.
Explain different concepts of marketing with appropriate examples:

Marketing is a good product that is sold in convenient places with a reasonable price.
(Adcoketal).

EX: An enterprise runs a business with high-class products and takes its products to
rural areas with low income to sell. This activity proves that the enterprise does not
understand about marketing, which means it does not sell what customers need, but
only sell what they have

 Marketing is activities aiming towards satisfying customers’ needs and wants
through interactive processes. (Kotler 1980).
EX: Product continuous improvements of Honda in improving product features to
benefit customers’ operation and safety are to market, contributing to increase
customers’ confidence. To achieve this, Honda must have a team working in market
research, customer research to provide effective marketing strategy.

 Marketing is a task in organizational structure and a set of processes in order to
create, exchange, convey values to customers, and to manage customer relationships
in different ways to bring about benefits to the organization and members of the
General Meeting of Shareholders. (American Marketing Association - 2008)

EX: Honda is always a pioneer in the introduction of new product lines, namely 2-
wheel vehicles in Vietnam, Honda has improved designs and modern technology, its
products are cheaper, if a person wants to buy a Honda vehicle, he can find it
anywhere, Vietnamese often use the word Honda when saying about 2-wheel
motorcycle whether it is manufactured by other manufacturers. This has proven that
Honda has done marketing very well (Promotion) and eventually, the cause why
Honda develops today is understandable to everyone.
4. “PLC as a tool for marketing strategy" justify.

INTRODUCTION
The development phases of a product over time are known as "Product Life Cycle".
Product Life Cycle describes four distinct phases of a product: introduction, growth,
maturity and decline. Enterprises need to be aware of which phase their products are

to have a marketing plan: Launch products, refresh, or replace the product with a new
product line. In other words, PLC helps enterprises a lot in product management
strategy, product pricing strategy and marketing budget management strategy.

BODY
Product Life Cycle is usually indicated by the following chart:

Introduction Stage: This is the initial phase, customers do not know or do not know
much about the product so enterprises spend a lot of expenses to introduce and
advertise products on the market.
However, if businesses implement pricing strategy, false product positioning would
create the risk of reducing the value of the product. If market size is too small, sales
will not be much, so businesses must rethink about their marketing strategies if they

are uncertain about the market. Target customers are interested in exploring and
experiencing and they always want to be the first to use the product.
For example: In the late 1970s, Apple and other pioneers were interested in creating
personal computer market, and in promoting their particular products. The increase in
awareness and interest in the personal computer is good for all competitors. When
IBM jumped into this market in 1981, people were overjoyed because of its
involvement as IBM’s products attract more customers.

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Growth Stage: After the initial success, many customers are interested in products
because of its value, as well as of the effects of marketing activities and of targeted
customers. Owing a kind a product becomes a demand, so the number of products sold
increases, enterprises will have greater revenue and profitability. When the product is
popular on the market, it will bring about the biggest profit margin.
Maturity Stage: After the development phase, the number of customers who own the

product is high, so the attraction of the product is not as large as before and the
demand for products gradually becomes saturated. Sales stops and begins to decline
over time due to the emergence of other competitors, loss of market share or products
unfit consumers. At this stage, enterprises need to deploy marketing strategies to
renew products or introduce new product lines.
Decline Stage: Products have become too familiar and not so attractive, to consumers
feel bored and wants new products with more features. So at this time, purchases fall
sharply, cost increases and profits reduce. Enterprise should reduce the price to attract
customers at lower segment and to get revenue in the period.
The following table shows the stages in product life cycle, features, marketing
requirements and their effectiveness.

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CONCLUSION

The marketing strategy is to identify what the market needs based on the formation
and development of products. The task of marketing is to understand market needs, to
create products that satisfy the needs and to promote the development of products to
expand markets and increase profits for businesses.

Thus, for each stage of the product life cycle, businesses need to build and deploy
appropriate marketing tasks to exploit the strengths of the product and the market.
Each product has its expected lifespan, and marketers must correctly identify each
stage of the product life cycle to develop appropriate marketing strategy, to keep
products from falling into recession through appropriate transition by launching
alternative products on time with more advantages so that they can best attract target
customers, to maximize profits.

5. Explain process of selecting the final price.

INTRODUCE

Price is the money paid to buy a product or service, or it is the sum of all values or
benefits when using products or services. In the past, price is the main factor affecting
the purchase decision. Currently, non-price factors become more important,
accordingly, there are many products and services whose proportion of non-price
factors is much higher than tangible value. Determining the price will decide how the
product or service in the process of circulation on the market attracts customers as
well as how it makes profit.

Today, the concept of markets border does not exist, there are many suppliers of the
same product, so price competition has become the number one problem faced by
administrators.

BODY

Price assess

Enterprises must establish a price in the first introduction time when developing a new
product, when introducing it to a new distribution channel or geographical area. This
is usually done as follows:

- Identify target market segments for products or services, and expectations to
achieve.

- Set up the price for consumers at target market segment.
- Check the price of potential or real competitors.

- Check prices range from different levels of quality or product delivery method.

- Identify the profit at each price.

- If profit is low, it is necessary to change specifications of products to reduce
costs in order to get the desired profit.
The order to set up pricing policy

Selecting the Pricing Objective

This is the most important step. The clearer purpose is, the easier to set up the prices.
Five major objectives through pricing is: The survival of the enterprise, maximum
profit, maximum market share, maximum market network and product quality
management. Whatever the specific goals are, businesses using price as a strategic
tool will benefit more than the business simply lets cost or market assess their
products.

Example: Sony is one of the companies that have experience in the market. They sell
at a very high price when introducing a high technology product on the market to
consumer groups having a lot of money (high-level segment), and the purchasing
power of this segment declines, they will reduce the price to attract the purchasing
power of lower market segments.

Determining the demand

Each price level will create different needs in inverse proportion and have different
impacts on marketing objectives. Most consumers are sensitive to the price of
essential products. A seller can charge a higher price than competitors and still sell
products as long as customers can own it with the lowest cost.

The process of estimating demand leads to: Estimating sensitivity; estimating and

analyzing the demand curve and determining the elasticity of demand.

Estimating Costs

The cost of products includes: production cost, distribution cost and cost for sale of
products (including favorable and risky factors). This cost depends on each different
production levels.

Analyzing competitor’s costs, prices and offers

This is an important factor in setting prices. This step depends on market demand and
the cost of the product, the cost of competitors and the to-be reaction of prices. In
particular, if the product or service is poor, enterprises will not set a high price like
competitors. On the other hand they can also change their prices to compete with the
price of the business.

Selecting a pricing method

There are three methods to assess prices can be used: price oriented cost, price
oriented competitors and oriented marketing towards price.

Price oriented cost: Two methods are commonly used:

Full cost: include all associated costs. However, this approach has led to an increase in
prices, so it opposes the affordability of potential customers.

Direct cost: Only include cost that is likely to increase as production increases; it helps
determine the lowest price to increase profits while reducing prices to increase sales in
off-peak hours. For example, reduce the price for empty seats on the plane to attract
more passengers.

Price oriented competitors:

Assess based on the market: Based largely on the price of competitors, so the price
may be the same, more than, or less than competitors’. In case of price is higher than
competitors, enterprises need to have advantage in the delivery or quality of service to
explain a higher selling price.

Competitive bidding: The buyer will choose the provider who require the lowest cost.

Marketing towards price: The price of a product should be set to match the marketing
strategy. For new products, price depends on location and strategy; while current
products are affected by strategic objectives.

Selecting the final Price

This is a step that businesses chooses its final price, it is necessary to consider
additional factors such as price due to sentiment, favorable and risky price, the impact
of marketing, company policies and the influence or impact of prices on market.

CONCLUSION

Concerns about the cost of purchases are related to their expectations about the
satisfaction or utility related to products. Many times, high prices can attract
customers and bring about high profit while low cost seems unattractive or even leads
to failure. For customers, they always have to consider whether the utility corresponds
to the money. So the process of setting the price is to reach the price at each time to
launch the product or service to the market in a most beneficial way: Achieve the
initial goal of the business which attracts target customers of each stage and get
optimal profit in the long term, contributing to the development of the business.

Through the above steps, depending on specific conditions, businesses should give
priority to an appropriate number of steps to best achieve their goals.

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8. Explain “direct marketing" and its applicability with exam

INTRODUCE

In this day, marketing is increasingly taken care of. A product or service can be sold
or not and enterprises can develop or not primarily due to marketing activities. If in
the past, the products were transported directly from manufacturers to consumers,
now, a new trend has appeared, which is called sales technique that involves contact
with potential customers, using media like introducing products directly, sending
catalogs, advertising mail, e-mail, messages, online advertising ... which is called
Direct Marketing. Thanks to the quick recognition of feedback, businesses who want
to sell their products will know about the demand or identify consumer’s reactions on
a small scale before widening its scale with high costs. Thanks to the two-way contact
through promotions, discounts ... businesses can develop their relationship with
customers, and make them become closer.

BODY

With the nature of a marketing communication system that operates regularly,
interacts and exchange information between buyers and sellers through a number of
media to create positive and direct exchange reaction (measurable) from customers
with little limitation due to space and time.

The benefits of direct marketing which customers get is: Easily adapt to an active
lifestyle, help save time shopping, know new items to choose from; face less obstacles

related to space, travel but still choose products needed. For businesses, direct
marketing will facilitate orders, help business get more information about customers
most quickly in order to meet high media with efficiency and low cost. Help use
resources most effectively, particularly suit corporates that has compact structure, or
suit discrete market segments with specific needs.

Direct Marketing has the following forms:

-Direct Mail: Send letters via postal mail to customers in the region or to
customers in the portfolio management of the business.

-Email Marketing: Send e-mail to clients.

-Direct response television marketing: There are two forms: call on the screen or
on the Website, long form is a long period of time (about 30 minutes) to describe the
product in detail and short form Terms is a short period of time for advertising (30
seconds or 1 minute) to clarify client's feedback.

-Telemarketing: Call customers directly, as well as help clients contact marketers
regardless of distance, time or weather.

-Couponing: Use printed newspaper to get feedback from readers thanks to
coupons cut out in exchange for discount.

-Direct selling: Salespeople will meet clients directly.

-Integrated campaigns are a combination of all the above mentioned forms to
achieve optimum efficiency.
For example: there are a number of practical examples to illustrate direct marketing
applications as follows:

-Direct selling: Staff of insurance companies directly meets potential customers to
convince them to buy their product or service. For real estate businesses, they send
emails, messages and invite potential customers to visit sample houses (for project
under preparation for construction) or flat (for completed projects).

-Online business: Businesses set to website to introduce their units and sell
products online (such as household products).

CONCLUSION

The purpose of marketing in general is to make customers that businesses are
targeting know about products, the benefits that can satisfy the needs of buyers, it
expresses creativity and unique of products for sale in both aspects: physical and non-
physical value. Thus, each type of product or service needs accessing the market
through the diversity and differences.

Direct marketing is a part of sales and mix marketing is not always suitable for all
products and services. Each type of product or service or brand has its own
characteristics, each person or business manager has different goals. Therefore, to
succeed in direct marketing, managers should not apply a framework as a major
selling method but need to take advantage of its full potential as a brand building
mechanism. To fully take advantage of the value of direct marketing, combine
customers’ diverse requirements and suggestions with proper objectives and
marketing policies. By doing so, businesses can assert its brand and can sell more
products or services.

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