Marketing management

Topic2 : MARKETING MANAGEMENT
Answer any FIVE questions All questions carry equal marks
1. Explain the following:
(a) Production concept
(b) Product line
(c) Augmented product
(d) Social marketing concept. .
2. Explain various concepts of marketing with suitable examples.
3. Explain market segmentation with suitable examples.
4. “PLC as a tool for marketing strategy" justify.
5. Explain process of selecting the final price.
6. “Advertising forces people to buy goods that they do not want" Elucidate.
7. Explain the process of integrated Marketing communication
8. Explain “direct marketing" and its applicability with examples.

CONTENT

I. QUESTION 1:
I.1 Explain the following:
(a) Production concept
(b) Social marketing concept.
A – Introduction

Marketing Management is a very important process in the business plan of an
enterprise - the process of analysis, planning, implementation , checking the
implementation of the measures to maintain , provide selected buyers with
beneficial discussions to achieve the tasks identified by the enterprise such as
expanding information, increasing sales and profit to reach the goals of the
business.

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Formed in the mid-1950s , marketing philosophy was rapidly accepted and its
dominant ideology has become one of the cornerstones of the modern
business philosophy. One of five basic philosophies guiding the enterprises to
implement their marketing activities is: The production concept and Social
marketing concept.

B - Body

a. The Production concept

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The production concept alleges that consumers will favor products that are
available for use and widely distributed at low price. Thus, marketing
management should focus on boosting manufacturing and distributing
products . The notion that consumers pay attention to the availability and low
price of the product isexplained by two following reasons:

- First, when demand for a product exceeds the supply, the buyer will be
more interested in getting products for consumption rather than focus on the
subtle attributes of product quality. Therefore, manufacturers will focus on
increasing the scale of production with the desire to increase sales volume
and profitability.

Second, the high production costs need to be cut down, the businesses seeks
ways to increase production in order to achieve economic efficiency and
hence also expand the market.

Example : Henry Ford - Founder of Ford Motor Corporation - was one of the

first businessmen to apply philosophy of production. Since 1900s, he has
improved production methods to save production costs, increasing labor
productivity and output and has created cars with low prices for customers to
buy more and more cars.

b. The Social Marketing Concept

The Social Marketing Concept is not only to bring satisfaction but also to
ensure that the social benefits to customers.

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The Social Marketing Concept supposes that the task of the business is to
identify the needs, desires and interests of target markets and to deliver
products / services to satisfy customers’ needs more effectively than their
competitors do. At the same time, the enterprise ought to preserve or enhance
the welfare of consumers and society. This is almost a further step than the
marketing concept, because it is believed that only the satisfaction of
consumers is not enough, but also the focus on protecting the interests of the
whole society.

Before, the business mainly based on profit when constructing the marketing
decisions, but now satisfying customers’needs and perceptions of the
importance of the social benefits have been emphasized more and more. As a
result, marketing activities would be significantly better with the longer-term
benefits .

B - Conclusion

The choice of a particular marketing philosophy in practice marketing

management depends on a lot of factors : the competitive position of the
business, features of products and services , target market needs , abilities of
the marketing team of business , etc. .. It is important that the implementation
of its marketing philosophy should provide maximum satisfaction to clients ,
contribute to the achievement of business goals and not damage the benefits
of society .
I.2 – Explain the following:

(c) Product line

(d) Augmented product

A - Introduction

The lifeblood of your business is the products or services which your
company is selling. Business strategies of a company are not only the way
products, product lines are made or the way to find out users who are suitable
for them but also the way products are effectively used by target customers.

B - Body

c. The product line

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The product line is a group of series of different products which are similar in
structures, features, sizes, applications for customers to become familiar with.
For example: There is a wide range of mobile phones in the market, so make
the customers to be more familiar with them, manufacturers release different
product lines such as: Iphone 4S, Samsung Galaxy S4, HTC J one, Sony

Xperia Z, Nokia Lumina 1520...
d Augmented product

Additional values are considered as an active factor which influences
customers to decide which products to buy . They are an integral part of
augmented products and include:

- Warranty : In case of defects, the seller ensures to replace with a new
product, repairs if possible or makes a refund to the customers.

- Insurance: Providing the maintenance services to the customers after
the insurance expiration by repairing or replacing some certain accessories.

- Customer service: Include additional services such as use instructions,
consultancy via phone or website.

- Additional values: Add some product applications which can make the
product easier to be used: augment laptops with carry bag, present mobile
phone screen cover or enhance the function ( mobile keyboard for PDA).

- Accessibility: Provide the products to the customers promptly such as
the availability if necessary, prompt delivery at the customers’ convenience.
C - Conclusion

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Product strategies play the significant role in marketing strategies of a
company . They are also regarded as a kind of sharp weapons in the market
competition. The key to the success of an enterprise is its own products.
Determining appropriate product strategies is the decisive factor to the

survival of a company, which can help the company to provide satisfying
products and services to the target customers.

II. QUESTION 3: Explain market segmentation with suitable examples.

A - Introduction

- Today, businesses face many competitors in the market. Each of these
businesses typically has one or two particular strengths to meet the needs of
their customers. When a business identifies good market segments for their
products, they will control the competition of rivals and gradually master the
market.

B - Body

Market segment is dividing the market into different groups of buyers with
various needs. In marketing, we divide the market to satisfy the needs of
every segment, because each customer group has different characteristics,
preferences, purchasing habits, in other words, different market segment is an
activity determining the general characteristics of a group of customers in a
market, such as:

- Group of customers based on their motivation to purchase.

- Group based on customer needs and their buying behavior.

- Group of customers based on the determinants that they set out to purchase
goods, supplies of selected products and services

A market segment (market segment) consists of a group of customers with

the same needs, desires, preferences, and similar buying habits. The task of
marketers is to determine the number and nature of suitable market segments
and determine the target market segments.

Here are the basic principles of market segments:

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- Geographics segment: the market segmentation according to customers’
geographical location such as city, province, region, nation, abroad ... eg
customer segmentation of using a smart phone in Ho Chi Minh City, Hanoi
has a higher rate than the other provinces or cities in the country

- Demographics segment: statistics by individual characteristics including
gender, age, income, education, occupation, ethnicity, religion ... eg customer
segmentation of using mobile phones in Vietnamese market based on age and
income: customer segmentation of using smart phones is mostly young
people or those with high incomes;

- Psychographics segments: research customers in society, lifestyle and
psychological characteristics including attitudes, values, style ... For example,
customer segment of using smart phones on the extent of use: much, less,
average; just as there are 01 phone users; 02 or 03 phone users at the same
time. There are people who almost never use mobile phones

- Product benefits: segmentation characteristics of the product benefits. For
example, users of Apple smart phones have a higher rate than users of phone
company LG.

- The fact is, many brands having not focused on a specific customer segment

have failed miserably. Miss Saigon, for example, having launched a new
product Delux Miss Saigon with the same level as CK, Channel ... failed.
These patrons will not accept its perfume at high price, high-income people
will not spend perfume brand because the brand Miss Saigon "Miss Saigon"
was reminiscent to "cheap perfume" , the company should have given a
completely different name for the product and should not have added the old
name Miss Saigon to the new product.

C. Conclusion
Market segmentation of the business ensures the business more secure
because it helps businesses focus their efforts on the right target market,
builds a style of its own business, a separate image to exploit the inherent
ability of the business effectively.

For successful marketing activities, businesses need to identify and satisfy the
appropriate market segment

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

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A - Introduction
Product life cycle: the development stages of the product over time. Product
life cycle includes four stages: introduction, growth, saturation and
degradation. Businesses need to be aware of their products in which stage to
have appropriate marketing plan: bring products to market, renew or replace
old products with new product lines.
Typically Product Life Cycle is indicated by the following chart:

1. Introduction stage:

This is the initial phase, customers do not know or do not know much about
the product, so businesses pay a lot of money to introduce and advertise
products on the market.
To enter the market, companies must build one wide consumption system
around through the various intermediate and then to retailers.
When penetrating the market of the product, price should be lower than the
price of the product of the same type on the market to attract customers, to
increase sales and expand market section.
However, if businesses implement pricing strategies, product positioning
error would create the risk of reducing the value of the product. If the market
size is too small,it will be impossible to have good sales. Then businesses
must rethink marketing strategies accordingly. Target customers who are

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interested in exploring and experimenting always want to be the first to use
the product

For example: In the late 1970s, Apple, Atari, PET, Radio Shack, and other
pioneers were both interested in the creation of the personal computer market
and promoted their particular products. The increasing awareness and interest
in the personal computer was good for all competitors. When giant IBM
jumped into the market in 1981, people were overjoyed because the
involvement of IBM brought their products legitimacy and attracted more
customers.

2.Growth stage:

This is the stage when the Company's products have the confidence of
customers and the amount of goods sold has been growing increasingly,

reducing costs and product prices significantly. Therefore, sales and profits
soar , market sections are spreading .

The basic objective of this phase is to penetrate new markets or new market
segments which are available. At the same time the company constantly
strengthen and perfect the quality and features of the products which are
welcomed by the customers.

Prices at this stage can remain or may apply promotional measures if the
company has achieved high sales and profits, and offset the costs of the
previous period.

3.Maturity stage:

It is the stage when the volume of goods sold has peaked and cannot rise
further. The phenomenon of stagnation in the distribution channel begins to
appear. Revenue decreases due to the presence of many competitors .There is
loss of market share or products are no longer fit for human consumption. At
this stage, enterprises need to deploy marketing strategies for new products or
for the lifetime of the alternative product line.

At this stage, the company will have to reduce the selling price to the
maximum possible extent to promote the consumption of backlog goods.

In addition, the company needs to improve the quality of the product and the
packaging or label to revive the reputation of the product, enhance
advertising and more services.

4 . Decline stage:

This is the stage when goods sold were seriously impaired. Products have
become too familiar and not so attractive to consumers. Customers appear to
be bored and psychologically want more new products and more features.

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Purchasing power has plummeted which makes the cost of sales higher.
Market share and profitability are significantly reduced and there may be
bankruptcy. Now the company should improve products, lower prices,
enhance advertising services to attract customers in the lower segment ; or
ought to cease production at this item decisively and have a plan to roll out
new product strategy in the style of promoting the legacy continues.
The following table shows the stages in the life cycle of the product and the
features associated with marketing requirements and their effectiveness.

C - Conclusion
The marketing strategy is to identify what the market needs, is based on the
formation and development of products. The task of marketing is to
understand market needs, creating products that satisfy the needs and
promote the development of products to expand markets, increase profits of
businesses.
Marketers must properly identify each stage of the product lifecycle to
develop the appropriate marketing strategies and prevent products from
falling into recession phase through appropriate transition measures by
launching by new products at the right time to replace with more advantages,
attracting the best target customers, for the purpose of maximizing profits.

IV. QUESTION 5: Explain process of selecting the final price
A - Introduction
Price is the monetary expression of the value of goods / products or services.

Price is the main factor affecting the purchase decision of the customer.
Determining the price of how to make the product or service in the process of
circulation on the market being able to attract customers as well as bring high
profits for enterprises is the most important goal.
B - Body

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I. Valuation

Enterprises must establish a price when first developing a new product . The
introduction of a product into a new distribution channel or new geographic
areas expresses as follows :

1. Identify target market segments for products or services , with expectations
to achieve and how to deliver products or services to access it .

2. Setting up prices for consumers of the target market segment .

3. Checking price ( and cost if possible ) of the actual or potential
competitors.

4. Checking price range from different levels of quality or product delivery
methods .

5. Identify possible profit at each price .

6. If low profits , need to change the specifications of products to reduce the
cost to generate the desired profit

II. The order of setting pricing policies

1) Selecting the Pricing Objective

This is the most important step. The clearer the purpose is, the easier the
setting prices is. Five major objectives through pricing is: The survival of the
enterprise, the maximum profit , maximum market share, maximum market
surf and product quality management. Businesses use price as a strategic tool
to achieve their goals. The pricing for products is initiated by identifying
targets. Each target requires different prices, which should be based on
strategic products were selected in each period for implementation.

Example: Samsung is one of the firms having extensive experience surfing
market. They sell their products at high price when making a high technology
product market segments for target customer who have lots of money . When
the purchasing power in this segment declines they apply discount policy to
attract buying in lower market segments.

2 ) Determining the demand

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Identifying the needs of the product in the target market valuations is the next
step. Each price level will create different needs. So the business must
determine the needs of the business product in the target market . Besides, the
need for changes to make the price different is expected. Since then, the
demand graphs. Furthermore, there needs to determine the elasticity of
demand for the product price. To determine the elasticity, there are the
following methods:

- The method is based on the experience of the relationship between price and
demand in different markets.

- Methods of sample surveys, conducted interviews with the customers in the
target market:

+ Survey of customers’ attitudes towards prices, selected products, purchase
price.

+ Survey of possibility of customers’ acceptance for the expected price.

+ Value experiment: In some cases, businesses can sell products in a
comparable geographic area but in different prices.

3 ) Estimating costs

Costs of products include: production cost, distribution cost and sale of
products (including the favorable and risky factors). This cost depends on
each different production levels.

Market demand decides the maximum price that the enterprise can sell their
products. The minimum price depends on the cost of business. In this step,
there must be determination for the cost of products such as : the fixed cost ,
variable cost and total cost. The enterprise should try to analyze the costs
incurred in the manufacturing process, operational costs for product delivery ,
detailed charges for marketing and sales support.

- When determining the cost of production, the business has to make a
breakeven analysis. This is the basis for determining and selecting
appropriate price and selecting the minimum selling to each different sales to

reach break-even point.

4 ) Analyzing competitor 's Costs, prices and offers

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This is an important factor in setting prices. Consumers usually price
products basing on the price and quality of equivalent products. Therefore,
businesses need to know the price of competitors by sending employees to
make price survey, price comparison on the similar products by looking into
the unit price list of the competitors . Interviews on customers can lead to a
source of information about the price and quality of goods of competitors.

Businesses can use the knowledge of competitive price and product as a
starting point to form the price for their products. If their products are similar
to the ones of competing businesses, pricing must be close to the price of
competing products, and lower -quality products cannot be priced higher. For
the higher price, the enterprise must ensure the higher quality of their
products. In fact, businesses use price to position their products as compared
to the prices of competitors.

5 ) Selecting a pricing method

Knowing the demand curve, the total estimated cost and pricing of
competitors the enterprise may now choose the product price. When choosing
product prices, the enterprise has to rely on:

- The demand curve

- The cost

- The price of Competitors: Based on price competed in the market , the price
can equal , more than, or less than the one of competitors . In case of higher
pricing, enterprises need to control the delivery schedule or quality of service
to justify a higher selling price. Buyers will choose the provider that has the
lowest cost through bidding.

6) Selecting the Final Price

To select the final price for the product, enterprises ought to consider adding
some following bases:

- Psychology of accepting rates of customers.

- Pricing policies of the enterprise.

- The price influence on distributors, sellers and policies of the state.

- The price impact for the product category trading

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- Company policy and the impact, the impact on market prices.

C- Conclusion

Buyers are always concerned about the price of the products relating to their
expectation, their satisfaction or utility given by products. The process of
determining the price aims at going up price in each time to launch products
or services into the market most beneficially Achieving the goals of the

business, which attracts the target customers of each phase and getting
optimal profit in the long term contribute to business development. With the
six steps above, depending on the specific conditions that businesses should
be prioritized for some appropriate steps to achieve these goals most
effectively

V. QUESTION 8: Explain " direct marketing " and its Applicability
with examples.

A – Introduction

The concept of direct marketing is used in business operations to establish ,
maintain and develop relationships with potential customers through a variety
of means such as letters enclosed brochures or catalogs , electric telephone ,
advertising email, email,recommendation message , and direct selling via
the media ( TV , radio and Internet ) . Thanks to the quick recognition of
feedback , businesses wanting to sell products will synthesize demanding
requirements on products or identify , evaluate responsive levels from
customers to have appropriate marketing policies .

B - Body

1. Benefit of direct marketing:

a. Direct marketing gives many benefits to the customers, such as:

- Save time. For example: customers may understand more about
products and service without spending time to meet the salesmen.

- Be convenient. For instant: customers can stay at home and can buy

products. They can receive gifs without going out.

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b. Direct marketing also gives many benefits to the sellers.
- Possibility of choosing potential customers.
- Build continual relationships with each customer.
- Change the way how to advertise (price policy, product strategy…).
- Competitors don’t know the company strategy for the customers.
2. Goal of the Direct marketing.
The main aim of Direct marketing is to attract potential customers to buy
products immediately. Besides, Direct marketing also impacts on customer’s
intention to buying products. It gives guiding information to customers for
the next purchase and creates opportunities for the salesmen.
3. Some ways of Direct marketing:
- Catalog marketing: provide detail information about typical features of
product, sample collection, hotline telephone number, some promotion such
as give gifts or discount…
- Direct – mail marketing: email advertisement.
- Tele-Marketing: use no free phone number to order. This is also the most
popular and major way of direct marketing.
- Direct marketing on multimedia such as: T.V, newspapers and magazines.
- Door to door leaflet marketing: is commonly used in fast food industries.
- Direct selling: is face to face between the salesmen and the customers.
4. The 6 substantial factors for success of Direct marketing:
1. Database: Based on the customer background: name, address, age, sex, job,
social position, telephone number and email, shopping product or service.
2. Offer: Polite requests relating to price, benefit and bonus to the customer.
3. Creative: offering goods, create an impression on the customer by using
pictures, writing styles, printing technique.

4. Media: email, internet, message on telephone, phone-calls.

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5. Organizing: organizing performance according to the plan on the agenda.
Organizing must be considered the most important factor leading to the
success.

6. Customer service and call center: is used to deal with the troubles
happening in business with customers.

For examples:

Most supermarkets use door to door leaflet marketing or catalog-
marketing.

Electronic-households appliance supermarkets take advantage of
offering and customer services.

Telephone companies give SMS on their discount.

Restaurants, hotels and tourist agencies exploit the internet to advertise
their service promotion.

C – Conclusion

The purpose of marketing is generally done for target customers to know
target marketing products , the benefits satisfying the needs of buyers, to
express creativity and the unique of products for sale in the value of both
material and non-material . Thus, the business needs to approach each type of

products or service into the market through diversity as Direct Marketing .

Direct marketing , as any part of the sales and mix marketing , not a magic
wand to be suitable for all products and services . Each type of products,
service or brand has its own characteristics. Each business or business
manager has different business goals .Therefore, to succeed in direct
marketing , the management should not be limited in a framework as a major
selling means but needs to take advantage of its full potential as a branding
mechanism . To take advantage of the full value of direct marketing , the
enterprise should approach the structure combining diverse requirements,
smart hints of customers with policies and marketing target properly . By
doing so , businesses will assert its brand and could sell more products or
services .

REFERENCES

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- Vu, The Phu (1938-2006), Basic marketing, thuvien.ou.edu.vn.
- www.marketingchienluoc.co./market segment
- Thieu, Kim Trong.wordpress.com/…/marketing – truc tiep

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