1)IDENTIFY AND EXPLAIN MACRO AND MICRO ENVOIRMENTAL FACTORS WHICH INFLUENCE MAKRETING DECESIONS :-

Macro environmental Factors are:1.political

2.Economical3.sociological

4.Technological

5.envoirmental6.legal

Micro envoirmental factors : 1.customer

2.employess

3.suppliers

4.shareholders

5.media

6.competitors

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Macro environmental Factors are:There are many factors in the macro-environment that will effect the decisions of the managers of any organisation. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change.

Political factors. These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidising firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system.

Economic factors. These include interest rates, taxation changes, economic growth, inflation and exchange rates. As you will see throughout the "Foundations of Economics" book economic change can have a major impact on a firm's behaviour. For example:

- higher interest rates may deter investment because it costs more to borrow - a strong currency may make exporting more difficult because it may raise the price in terms of foreign currency - inflation may provoke higher wage demands from employees and raise costs - higher national income growth may boost demand for a firm's products

Social factors. Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work. In the UK, for example, the population has been ageing. This has increased the costs for firms who are committed to pension payments for their employees because their staff are living longer. It also means some firms such as Asda have started to recruit older employees to tap into this

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growing labour pool. The ageing population also has impact on demand: for example, demand for sheltered accommodation and medicines has increased whereas demand for toys is falling.

Technological factors: new technologies create new products and new processes. MP3 players, computer games, online gambling and high definition TVs are all new markets created by technological advances. Online shopping, bar coding and computer aided design are all improvements to the way we do business as a result of better technology. Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organisations providing the products.

Environmental factors: environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider. The growing desire to protect the environment is having an impact on many industries such as the travel and transportation industries (for example, more taxes being placed on air travel and the success of hybrid cars) and the general move towards more environmentally friendly products and processes is affecting demand patterns and creating business opportunities.

Legal factors: these are related to the legal environment in which firms operate. In recent years in the UK there have been many significant legal changes that have affected firms' behaviour. The introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle are examples of relatively recent laws that affect an organisation's actions. Legal changes can affect a firm's costs (e.g. if new systems and procedures have to be developed) and demand (e.g. if the law affects the likelihood of customers buying the good or using the service).

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Different categories of law include:consumer laws; these are designed to protect customers against unfair practices such as misleading descriptions of the product

competition laws; these are aimed at protecting small firms against bullying by larger firms and ensuring customers are not exploited by firms with monopoly power

employment laws; these cover areas such as redundancy, dismissal, working hours and minimum wages. They aim to protect employees against the abuse of power by managers

health and safety legislation; these laws are aimed at ensuring the workplace is as safe as is reasonably practical. They cover issues such as training, reporting accidents and the appropriate provision of safety equipment

Micro envoirmental factors :

CustomersOrganisations survive on the basis of meeting the needs, wants and providing benefits for their customers. Failure to do so will result in a failed business strategy.

Employees

Employing the correct staff and keeping these staff motivated is an essential part of the strategic planning process of an organisation. Training and development plays an essential role particular in service sector marketing in-order to gain a competitive edge. This is clearly apparent in the airline industry.

Suppliers

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Increase in raw material prices will have a knock on affect on the marketing mix strategy of an organisation. Prices may be forced up as a result. Closer supplier relationships is one way of ensuring competitive and quality products for an organisation.

ShareholdersAs organisation require greater inward investment for growth they face increasing pressure to move from private ownership to public. However this movement unleashes the forces of shareholder pressure on the strategy of organisations. Satisfying shareholder needs may result in a change in tactics employed by an organisation. Many internet companies who share prices rocketed in 1999 and early 2000 have seen the share price tumble as they face pressures from shareholders to turn in a profit. In a market which has very quickly become overcrowded many havel failed.

MediaPositive or adverse media attention on an organisations product or service can in some cases make or break an organisation.. Consumer programmes with a wider and more direct audience can also have a very powerful and positive impact, hforcing organisations to change their tactics.

CompetitorsThe name of the game in marketing is differentiation. What benefit can the organisation offer which is better then their competitors. Can they sustain this differentiation over a period of time from their competitors?. Competitor anlaysis and monitoring is crucial if an organisation is to maintain its position within the market.

 

 

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Micro Environmental Factor/Stakeholder Analysis

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2. OUTLINE THE FACTORS WHICH INFLUENCE THE CHOICE OF TARGETING STRATEGY :-

Targeting strategy decisions are influenced by:

market maturity diversity of buyers' needs and preferences strength of the competition the volume of sales required for profitability

A competitive advantage could simply be defined as the advantage or ability a firm has over its rivals in the industry; or the ability a firm has to outperform its industry rivals.

A firm is said to have a competitive advantage when it has the capabilities or means to push out its rivals in striving for the favour of customers. This applies internationally or locally as well as to both services and products.Thus, a sustainable competitive advantage is the persistence the firm applies despite efforts by competitors or potential entrants to copy or overtake it. Sustainability therefore, requires that strategic assets are not easily available to others and imperfectly mobile. This will be considered later.

Porter (1990) states that, though not all nations are in the forefront of competition, the home nation which shapes the competitive advantage is the starting point for a firm's competitive advantage and also from which it must be sustained. However, in whatever field of endeavor, competitive advantage creation must be a choice of management and it must really fit to achieve results. It must be noted here that competitive advantage can normally be traced to one of three roots:

Superior resources, superior skills and superior positions.

Competitive strategy is one of the ways in which a business relates to its environment by competing with other firms who are also trying to adapt within

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the operating environment. It is with this aspect- the competitive strategy which if appropriately chosen and implemented appropriately give the firm a competitive advantage over its rivals.

It must be noted here that the prescriptive view of strategic planning emphasizes the importance of the organizational environment as a source of threats and opportunities and the need for effective responses by the organization if survival was to be assured and the success achieved. The response is later formulated into plan which formulates major decisions about entry into new markets or development of new products and services guided by set goals. Under the influence of Porter's writings in the 1980s the emphasis shifted from the plan to the selection of an appropriate generic strategy to position the business unit in its competitive environment. Porter, arguing that the environment poses threats and brings opportunities than with trends and events, suggested that the environment could be analyzed using the five forces analysis to identify the issues which affect the level of competition in an industry; after which a strategy is formulated to combat it.

The resultant strategy, which he referred to as generic, distinguished some strategic options the firm can possess:

Cost leadership: the business could position itself as offering a low cost product as a standard price i.e. cost leadership strategy. Costs are reduced at every element of the value chain. Producers can exploit the benefits of a bigger margin than the competitors. Toyota is a good example of an organization that produces quality cars at low price coupled with a brand and marketing skills to use a premium pricing policy.

It could offer a product that was different from that offered by rivals. I.e. differentiation. This allows companies to make prices less sensitive and focus on value that generates a comparatively higher price and a better margin. Even though additional costs will be incurred pursuing differentiation, it is possible that this will be offset by the increased revenue generated by the sales.

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By focusing on a small but well-defined part of the market, for instance a particular buying group or product area or geographical area. Also known as niche, this is usually suitable for a small company i.e. focus strategy.

Generic Competitive strategy, usually used after competitive analysis or as a response to competitors advantage, is defined as the basis on which a strategic business unit (SBU) might achieve or counter competitive advantage in its market. (Johnson and Scholes, 5th Edition.)

Building on Porter's (1980) generic competitive strategies, Bowman et al argues that organizations achieve competitive advantage by providing their customers with what they want, or need better or more effectively than competitors and making it difficult for competitors to imitate. This was later developed into five generic strategies which would be used in this discussion. Thus, the generic competitive strategies are the fundamental activities on which an SBU seeks to achieve a lasting advantageous position in its environment and gaining the favor of stakeholders by meeting the expectations of buyers, users or other stakeholders

The following are Bowman's five-generic competitive strategy options and examples of organizations who applied them to gain competitive advantage: no frills strategy, low price strategy, hybrid strategy, focused differentiation strategy and added value or differentiation strategy.

In brief, a no frills strategy combines a low price, low perceived added value and targets a price-sensitive market. No frills strategy is now a popular strategy with low-cos airlines Easy Jet and Ryanair seeking to enter the airline industry to compete with likes of Virgin and is a determinant in the market. This, therefore, affords the firm the needed competitive edge over its competitors who charge higher price. This strategy is a success because there could possibly be a segment of the market that overlooks the low quality of the commodity provided it fulfills the same purpose.

To obtain the competitive advantage using no fills strategy revenues must increase and the product must really be price-sensitive. Easy Jet frills strategy

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seems to be going on well as a result of the cost savings techniques they are using. For instance no ticketing, no ticket agents, no in-flight food or drink for customers as well as the short-haul flight. Now, almost all supermarkets in the UK use no frills strategy by introducing own brands the price of which have been reduced to attract customers in order to gain a competitive advantage.

The next generic strategy is the low price strategy. This strategy pursues a lower price than pertains in the market whilst trying to maintain similar value of product or service as those offered by competitor alike. There is the potential of price war among competitors and in the long run consumers are likely to lose as the firms might not be able to sustain the lower-price-good-value strategy. Notwithstanding the price war and low margins, there are some suggested ways in which a low-priced strategy can bring about a firms competitive advantage. The market segment must be low-price sensitive, and also the SBU has a cost advantage over its competitors.

However, in practice, the lower price strategy usually brought about by lowering operational cost alone does not give the firm the competitive advantage if the firm is not able to sustain it in the long-term as there are now more firms entering the market because of low or no entry barriers like small capital requirements and also how efficient the staff might be.

Hybrid competitive strategy seeks to achieve differentiation and a price lower than that of competitors simultaneously. This is not an easy strategy to pursue because to differentiate a product or service involves some money and increases cost the very thing the low price seeks to reduce. This strategy is fit for the DIY industry as the likes of Robert Dyas are not able to stand the competition. The success of this is dependent on providing unique more efficient products or services to consumers whilst at the same time operating at a lower cost to be able to lower its price below the industry level. The success of this strategy could further be enhanced if the firm has economies of scale and can increase volume of sales more than its competitors, thereby, reducing its base cost as a result. Asda's George brand is an example of a generic hybrid strategy in a SBU.

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Another strategy is differentiation strategy. This seeks to provide products or services completely different from those of its competitors by adding features valued by consumers. The main objective of using this is to either maintain the market share or increase market share relative to its competitors. A clear example of this is aircraft manufacturer Airbus's wider fuselages, cockpits designed for use in more than one aircraft and electrical rather than mechanical flight controls.

Those features have helped Airbus win customers like New York-based Jet blue; although Jet Blue is staffed with former employees from Boeing. (Fortune, Europe Edition 22 November 17th 2003; pp34) This strategy could be used to achieve a competitive advantage which is its ultimate aim by the firm investing more in R&D, unique designs and features. The marketing-based approaches in terms of good marketing communication (example advertising the products or services) as well as the brand power to win the loyalty of consumers. (Example Airbus)

The fifth generic competitive strategy is the focused differentiation strategy which seeks to provide high perceived value; justifying a substantial price premium usually to a selected market, segment. It is usually adopted to counter or to compete others in seemingly similar segment. This could therefore be argued that focused differentiation is just an extension of any of the four strategies so far considered depending on the competitors in this new segment which is usually middle to high income earners. A convincing example is the introduction of Lexus in 1989 by Toyota to compete with other luxury brands of BMW and Mercedes Benz new series.

For the focused differentiation strategy to be used to obtain a competitive advantage over competitors in the industry, the business unit must find ways to make the production more efficient to be able to pass on the savings to customers. The business unit must identify new segments and must also be prepared to aggressively create new market segment where it is believed first movers get huge advantage. Again Toyota prides itself in this by being the first to introduce a brand,scion,specifically for young buyers in January, 2003 which was a success and the introduction of hybrids in 1997 selling 127,000 far more than

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Honda.( Hybrid uses two engines and is environmentally friendly.) (Fortune, Europe Edition, Number 24 December 22 2003; pp57).

The essence of the various strategies discussed so far is to create or add value to the products or services in order to give improved and or enough satisfaction to the customer so that the firm will gain a competitive advantage over its rivals. However, it is one thing for a firm to gain a competitive advantage and another to sustain the competitive advantage so gained. So when a firm is able to get a competitive advantage over its competitors, it becomes expedient to try to sustain this advantage.

Some of the ways to sustain the competitive advantage is by what is described as isolating mechanism. This is the application of forces like barriers of imitation which limit the extent to which a competitive advantage can be duplicated or matched or even possibly scrapped through the resource creation activities of other firms. Though similar in principle to the barrier of entry force, whereas the entry barriers protect profitability of an entire industry, isolating mechanisms sustain the competitive advantage of a single firm. For example legal barriers like trademarks, patents or intellectual property rights as in Microsoft's case.

It could also be for the mere fact that the leading firm makes it difficult for the competitor to catch up with the firm's technology because it entered the market earlier and it continues to research and might be able to move to a superior position by the time its competitors catch up. This is known as the early mover advantage. Because the business unit has entered the market earlier, the past success in the market is believed to sustain the firm.

In my own opinion based on the discussions above, if really sustainable competitive advantage is the persistence of a firm's ability to outperform its industry, then suffice it to say that, as much as gathering and use of competitive information as illustrated in the Sears' story above can give a firm a (sustainable) competitive advantage, it is really difficult if not impossible to sustain any competitive advantage for a very long time. This is so because of the rate of technological changes, changes in business strategies, and the fact that customers' loyalty can wane and affect sales leading to a fall in market share and

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thus competitive advantage. Boeing was overtaken by Airbus in the aviation industry at some time. Sears' leadership was taken away by Wal-mart.

In spite of the availability of choice of the five generic strategies, it is supposed that the onus of their success rests with management and how the technology and the information gathered are blended for use. This is so because a careful monitoring and evaluation constantly and the right identification and proper timing of a particular segment are keys to the success of these strategies due to market dynamism.

3)EXPLAIN HOW PRICES ARE SET TO REFLECT AN ORGANISATIONS OBJECTIVES AND MARKET CONDITONS:-

One of the four major elements of the marketing mix is price. Pricing is an important strategic issue because it is related to product positioning. Furthermore, pricing affects other marketing mix elements such as product features, channel decisions, and promotion.

While there is no single recipe to determine pricing, the following is a general sequence of steps that might be followed for developing the pricing of a new product:

1. Develop marketing strategy - perform marketing analysis, segmentation, targeting, and positioning.

2. Make marketing mix decisions - define the product, distribution, and promotional tactics.

3. Estimate the demand curve - understand how quantity demanded varies with price.4. Calculate cost - include fixed and variable costs associated with the product.5. Understand environmental factors - evaluate likely competitor actions, understand

legal constraints, etc.6. Set pricing objectives - for example, profit maximization, revenue maximization, or

price stabilization (status quo).7. Determine pricing - using information collected in the above steps, select a pricing

method, develop the pricing structure, and define discounts.

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Marketing Strategy and the Marketing MixBefore the product is developed, the marketing strategy is formulated, including target market selection and product positioning. There usually is a tradeoff between product quality and price, so price is an important variable in positioning.

Because of inherent tradeoffs between marketing mix elements, pricing will depend on other product, distribution, and promotion decisions.

Estimate the Demand CurveBecause there is a relationship between price and quantity demanded, it is important to understand the impact of pricing on sales by estimating the demand curve for the product.

For existing products, experiments can be performed at prices above and below the current price in order to determine the price elasticity of demand. Inelastic demand indicates that price increases might be feasible.

Calculate CostsIf the firm has decided to launch the product, there likely is at least a basic understanding of the costs involved, otherwise, there might be no profit to be made. The unit cost of the product sets the lower limit of what the firm might charge, and determines the profit margin at higher prices.

The total unit cost of a producing a product is composed of the variable cost of producing each additional unit and fixed costs that are incurred regardless of the quantity produced. The pricing policy should consider both types of costs.

Environmental FactorsPricing must take into account the competitive and legal environment in which the company operates. From a competitive standpoint, the firm must consider

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the implications of its pricing on the pricing decisions of competitors. For example, setting the price too low may risk a price war that may not be in the best interest of either side. Setting the price too high may attract a large number of competitors who want to share in the profits.

From a legal standpoint, a firm is not free to price its products at any level it chooses. For example, there may be price controls that prohibit pricing a product too high. Pricing it too low may be considered predatory pricing or "dumping" in the case of international trade. Offering a different price for different consumers may violate laws against price discrimination. Finally, collusion with competitors to fix prices at an agreed level is illegal in many countries.

Pricing ObjectivesThe firm's pricing objectives must be identified in order to determine the optimal pricing. Common objectives include the following:

Current profit maximization - seeks to maximize current profit, taking into account revenue and costs. Current profit maximization may not be the best objective if it results in lower long-term profits.

Current revenue maximization - seeks to maximize current revenue with no regard to profit margins. The underlying objective often is to maximize long-term profits by increasing market share and lowering costs.

Maximize quantity - seeks to maximize the number of units sold or the number of customers served in order to decrease long-term costs as predicted by the experience curve.

Maximize profit margin - attempts to maximize the unit profit margin, recognizing that quantities will be low.

Quality leadership - use price to signal high quality in an attempt to position the product as the quality leader.

Partial cost recovery - an organization that has other revenue sources may seek only partial cost recovery.

Survival - in situations such as market decline and overcapacity, the goal may be to select a price that will cover costs and permit the firm to remain in the market. In this case, survival may take a priority over profits, so this objective is considered temporary.

Status quo - the firm may seek price stabilization in order to avoid price wars and maintain a moderate but stable level of profit.

For new products, the pricing objective often is either to maximize profit margin or to maximize quantity (market share). To meet these objectives, skim pricing

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and penetration pricing strategies often are employed. Joel Dean discussed these pricing policies in his classic HBR article entitled, Pricing Policies for New Products.

Skim pricing attempts to "skim the cream" off the top of the market by setting a high price and selling to those customers who are less price sensitive. Skimming is a strategy used to pursue the objective of profit margin maximization.

Skimming is most appropriate when:

Demand is expected to be relatively inelastic; that is, the customers are not highly price sensitive.

Large cost savings are not expected at high volumes, or it is difficult to predict the cost savings that would be achieved at high volume.

The company does not have the resources to finance the large capital expenditures necessary for high volume production with initially low profit margins.

Penetration pricing pursues the objective of quantity maximization by means of a low price. It is most appropriate when:

Demand is expected to be highly elastic; that is, customers are price sensitive and the quantity demanded will increase significantly as price declines.

Large decreases in cost are expected as cumulative volume increases.

The product is of the nature of something that can gain mass appeal fairly quickly.

There is a threat of impending competition.

As the product lifecycle progresses, there likely will be changes in the demand curve and costs. As such, the pricing policy should be reevaluated over time.

The pricing objective depends on many factors including production cost, existence of economies of scale, barriers to entry, product differentiation, rate of

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product diffusion, the firm's resources, and the product's anticipated price elasticity of demand.

Pricing Methods

To set the specific price level that achieves their pricing objectives, managers may make use of several pricing methods. These methods include:

Cost-plus pricing - set the price at the production cost plus a certain profit margin. Target return pricing - set the price to achieve a target return-on-investment. Value-based pricing - base the price on the effective value to the customer relative to

alternative products. Psychological pricing - base the price on factors such as signals of product quality,

popular price points, and what the consumer perceives to be fair.

In addition to setting the price level, managers have the opportunity to design innovative pricing models that better meet the needs of both the firm and its customers. For example, software traditionally was purchased as a product in which customers made a one-time payment and then owned a perpetual license to the software. Many software suppliers have changed their pricing to a subscription model in which the customer subscribes for a set period of time, such as one year. Afterwards, the subscription must be renewed or the software no longer will function. This model offers stability to both the supplier and the customer since it reduces the large swings in software investment cycles.

Price DiscountsThe normally quoted price to end users is known as the list price. This price usually is discounted for distribution channel members and some end users. There are several types of discounts, as outlined below.

Quantity discount - offered to customers who purchase in large quantities. Cumulative quantity discount - a discount that increases as the cumulative quantity

increases. Cumulative discounts may be offered to resellers who purchase large quantities over time but who do not wish to place large individual orders.

Seasonal discount - based on the time that the purchase is made and designed to reduce seasonal variation in sales. For example, the travel industry offers much lower off-season rates. Such discounts do not have to be based on time of the year; they also can be based on day of the week or time of the day, such as pricing offered by long distance and wireless service providers.

Cash discount - extended to customers who pay their bill before a specified date.

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Trade discount - a functional discount offered to channel members for performing their roles. For example, a trade discount may be offered to a small retailer who may not purchase in quantity but nonetheless performs the important retail function.

Promotional discount - a short-term discounted price offered to stimulate sales.

Types of Pricing Strategies

There are a number of prevailing pricing strategies used in marketing. From product to product, one or more of those pricing strategies may come into play over a product's lifecycle.

Price Leader

o A product that has a demonstrated benefit or attribute over other products in the same category can price itself far above the prevailing pricing rates. Tide laundry detergent is such a product in the laundry detergent segment. Liquid Tide can cost almost 10 times the amount of other brand name detergent products like Arm & Hammer or Gain for the same amount of product. For decades, Tide has made numerous product improvements, and heavy advertising spending communicated its superiority over competitors and justified its position as the pricing leader.

Price Matching

o Matching a competitive price is a tactic used by marketers to take the issue of price off the table. This tactic is used by a company that may be stronger competitively on other features and benefits. Price matching puts a competitor on the defensive. The gasoline industry sets price based upon the price of crude oil primarily. However from block to block, there will be price matching and even pricing wars among local competitors.

Price Undercutting

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o A product may undercut price with the recognition that it is in a difficult position against a strong competitor and the only way to compete is to lose money on price but make it up on the volume sold. This is known as price undercutting. With this strategy, unit sales volume becomes the measurement of market success rather than dollar sales volume. The goal here is to make up the loss realized from a lower price with growth in unit sales from an attractive price, which creates higher demand and thus higher total dollar volume.

Lost Leader

o Another pricing strategy is to sell a product at such a low price that the company loses money with each purchase. This strategy is usually a short-term strategy that the product employs to create demand for itself or another company product selling in the same product category. A manufacturer of bread spreads might price its jelly as a lost leader and charge a premium for its peanut butter. The perception by customers is that both products have a good price even though one might be significantly above competitors' pricing.

Close Out and Sale Pricing

o This pricing strategy is employed when the goal is to move units of product without regard to price. This is a technique often used by stores that are closing or when new seasonal merchandise is due in the store but current stocks of last season's goods have not been sold.

4 ) ILUSTRATE HOW PROMOTIONAL ACTIVITY IS INTEGRATED TO ACHIEVE MARKETING ONJECTIVES :-

Integrated Marketing Communication (IMC) involves the idea that a firm’s promotional efforts should be coordinated to achieve the best combined effects of the firm’s efforts. Resources are allocated to achieve those outcomes that the firm values the most.Promotion involves a number of tools we can use to increase demand for our The

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most well known component of promotion is advertising, but we can also use tools such as the following:

Public relations (the firm’s staff provides information to the media in the hopes of getting coverage). This strategy has benefits (it is often less expensive and media coverage is usually more credible than advertising) but it also entails a risk in that we can’t control what the media will say.  Note that this is particularly a useful tool for small and growing businesses—especially those that make a product which is inherently interesting to the audience.

Trade promotion.  Here, the firm offers retailers and wholesalers temporary discounts, which may or may not be passed on to the consumer, to stimulate sales. 

Sales promotion.  Consumers are given either price discounts, coupons, or rebates. Personal selling.  Sales people either make “cold” calls on potential customers and/or

respond to inquiries. In-store displays.  Firms often pay a great deal of money to have their goods displayed

prominently in the store.  More desirable display spaces include:  end of an aisle, free-standing displays, and near the check-out counter.  Occasionally, a representative may display the product.

Samples Premiums

PROMOTIONAL OBJECTIVES AND EFFECTIVENESS

Generally, a sequence of events is needed before a consumer will buy a product. This is known as a “hierarchy of effects.” The consumer must first be aware that the product exists. He or she must then be motivated to give some attention to the product and what it may provide. In the next stage, the need is for the consumer to evaluate the merits of the product, hopefully giving the product a try. A good experience may lead to continued use. Note that the consumer must go through the earlier phases before the later ones can be accomplished.

Promotional objectives that are appropriate differ across the Product Life Cycle (PLC). Early in the PLC—during the introduction stage—the most important objective is creating awareness among consumers. For example, many consumers currently do not know the Garmin is making auto navigation devices based on the global position satellite (GPS) system and what this system can do for them. A second step is to induce trial—to get consumers to buy the product for the first time. During the growth stage, important needs are persuading the consumer to buy the product and prefer the brand over competing ones. Here, it

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is also important to persuade retailers to carry the brand, and thus, a large proportion of promotional resources may need to be devoted to retailer incentives. During the maturity stage, the firm may need to focus on maintaining shelf space, distribution channels, and sales.

Different promotional approaches will be appropriate depending on the stage of the consumer’s decision process that the marketer wishes to influence. Prior to the purchase, the marketer will want to establish a decision to purchase the product and the specific brand. Here, samples might be used to induce trial. During the purchase stage, when the consumer is in the retail store, efforts may be made to ensure that the consumer will choose one’s specific brands. Paying retailers for preferred shelf space as well as point of purchase (POP) displays and coupons may be appropriate. After the purchase, an appropriate objective may be to induce a repurchase or to influence the consumer to choose the same brand again. Thus, the package may contain a coupon for future purchase.

There are two main approaches to promoting products. The “push” strategy is closely related to the “selling concept” and involves “hard” sell and aggressive price promotions to sell at this specific purchase occasion. In contrast, the “pull” strategy emphasizes creating demand for the brand so that consumers will come to the store with the intention of buying the product. Hallmark, for example, has invested a great deal in creating a preference for its greeting cards among consumers.

There are several types of advertising. In terms of product advertising, the “pioneering” ad seeks to create awareness of a product and brand and to instill an appreciation among consumers for its possibilities. The competitive or persuasive ad attempts to convince the consumer either of the performance of the product and/or how it is superior in some way to that of others. Comparative advertisements are a prime example of this. For instance, note the ads that show that some trash bags are more durable than others. Reminder advertising seeks to keep the consumer believing what other ads have already established. For example, Coca Cola ads tend not to provide new information but keep reinforcing what a great drink it is.

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push and pull strategies :-

Marketing theory distinguishes between two main kinds of promotional strategy - "push" and "pull".

Push

A “push” promotional strategy makes use of a company's sales force and trade promotion activities to create consumer demand for a product.

The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers.

A good example of "push" selling is mobile phones, where the major handset manufacturers such as Nokia promote their products via retailers such as Carphone Warehouse. Personal selling and trade promotions are often the most effective promotional tools for companies such as Nokia - for example offering subsidies on the handsets to encourage retailers to sell higher volumes.

A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer promotions and advertising are the most likely promotional tools.

Pull

A “pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product.

If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.

A good example of a pull is the heavy advertising and promotion of children's’ toys – mainly on television. Consider the recent BBC promotional campaign for its new pre-school programme – the Fimbles. Aimed at two to four-year-olds, 130

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episodes of Fimbles have been made and are featured everyday on digital children's channel CBeebies and BBC2.

As part of the promotional campaign, the BBC has agreed a deal with toy maker Fisher-Price to market products based on the show, which it hopes will emulate the popularity of the Tweenies. Under the terms of the deal, Fisher-Price will develop, manufacture and distribute a range of Fimbles products including soft, plastic and electronic learning toys for the UK and Ireland.

In 2001, BBC Worldwide (the commercial division of the BBC) achieved sales of £90m from its children's brands and properties last year. The demand created from broadcasting of the Fimbles and a major advertising campaign is likely to “pull” demand from children and encourage retailers to stock Fimbles toys in the stores for Christmas 2002.

promotional mix elements :-

A business' total marketing communications programme is called the "promotional mix" and consists of a blend of advertising, personal selling, sales promotion and public relations tools. In this revision note, we describe the four key elements of the promotional mix in more detail.

It is helpful to define the four main elements of the promotional mix before considering their strengths and limitations.

(1) Advertising

Any paid form of non-personal communication of ideas or products in the "prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to persuade and to inform. The two basic aspects of advertising are the message (what you want your communication to say) and the medium (how you get your message across)

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(2) Personal Selling

Oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale".

(3) Sales Promotion

Providing incentives to customers or to the distribution channel to stimulate demand for a product.

(4) Publicity

The communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly. otherwise known as "public relations" or PR.

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Advantages and Disadvantages of Each Element of the Promotional Mix

Mix Element Advantages Disadvantages

Advertising Good for building awareness

Effective at reaching a wide audience

Repetition of main brand and product positioning helps build customer trust

Impersonal - cannot answer all a customer's questions

Not good at getting customers to make a final purchasing decision

Personal Selling Highly interactive - lots of communication between the buyer and seller

Excellent for communicating complex / detailed product information and features

Relationships can be built up - important if closing the sale make take a long time

Costly - employing a sales force has many hidden costs in addition to wages

Not suitable if there are thousands of important buyers

Sales Promotion Can stimulate quick increases in sales by targeting promotional incentives on particular products

Good short term tactical tool

If used over the long-term, customers may get used to the effect

Too much promotion may damage the brand image

Public Relations Often seen as more "credible" - since the message seems to be coming from a third party (e.g. magazine, newspaper)

Cheap way of reaching many customers - if the publicity is achieved through the right media

Risk of losing control - cannot always control what other people write or say about your product

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5)ANAYLYSE THE ADDITIONAL ELEMNTS OF EXTENDED MARKETING MIX:-

(The 4 P's of Marketing)

Marketing decisions generally fall into the following four controllable categories:

Product

Price

Place (distribution)

Promotion

The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's after James Culliton had described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of marketing, depicted below:

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The Marketing Mix

These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response.

Product Decisions

The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made:

Brand name

Functionality

Styling

Quality

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Safety

Packaging

Repairs and Support

Warranty

Accessories and services

Price Decisions

Some examples of pricing decisions to be made include:

Pricing strategy (skim, penetration, etc.)

Suggested retail price

Volume discounts and wholesale pricing

Cash and early payment discounts

Seasonal pricing

Bundling

Price flexibility

Price discrimination

Distribution (Place) Decisions

Distribution is about getting the products to the customer. Some examples of distribution decisions include:

Distribution channels

Market coverage (inclusive, selective, or exclusive distribution)

Specific channel members

Inventory management

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Warehousing

Distribution centers

Order processing

Transportation

Reverse logistics

Promotion Decisions

In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include:

Promotional strategy (push, pull, etc.)

Advertising

Personal selling & sales force

Sales promotions

Public relations & publicity

Marketing communications budget

6)RECOMMEND MARKETING MIX FOR TWO DIFFERENT SEGMENTS IN CONSUMER MARKET:-

Demographic Segmentation

Some demographic segmentation variables include:

Age

Gender

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Family size

Family lifecycle

Generation: baby-boomers, Generation X, etc.

Income

Occupation

Education

Ethnicity

Nationality

Religion

Social class

Geographic Segmentation

The following are some examples of geographic variables often used in segmentation

Region: by continent, country, state, or even neighborhood

Size of metropolitan area: segmented according to size of population

Population density: often classified as urban, suburban, or rural

climate: according to weather patterns common to certain geographic regions

7)EXPLAIN IN DIFFERENCES IN MARKETING PRODUCTS AND SERVICES TO ORGANISATIONS RATHER THAN CONSUMERS :-

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There are many differences in marketing a product compared to a service. One difference is that with a product, it is generally something the consumer can touch. Services are more based on creating an end result. Another difference that is normally found in marketing a service compared to a product is the guarantee. It is harder to guarantee a service, although it can be done, while it is fairly easy to guarantee a product. Another big factor is cost. Pricing products is easier than pricing services. For example, one copywriter may charge $250 for the service of writing a sales letter while another copywriter may charge $10,000 to write a sales letter. Which service is better? What is the price based on? How does one copywriter justify charging $250 and the other justify charging $10,000? It can be based on experience and proof of being able to generate the results the consumer wants. Service is more psychological marketing.

Marketing products and services to an orginization is different due to the fact that those within an orginization are usually employees of their assigned departments. This changes the atmosphere to where you will be using more facts and hard data to present in your advertisement. While a visual element will still be used, the photography and artwork usually will want to relate to the reward a orginization will receive for doing business with the advertiser. In an orginization value and necessity are core concepts you want to implement. When marketing to an orginization your segment will go into department channels as well as will need to target and address the proper decision makers. Consumer products and services have a greater focus on creating desires and needs in a more social and less formal fashion. Hard facts may be good to present to the consumer but a focus more on simple functions and social status become core concepts in the consumer market. Demographics and key market channels can be less complex in the consumer market. This in part is due to technology in today's media environment allowing better statistics on segmented marketing channels.

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8 ) EXPLAIN HOW AND WHY INTERNATIONAL MARKETING DIFFERS FROM DOMESTIC MARKET :-

Domestic marketing is the marketing practices within a marketer's home country. Foreign marketing is the domestic operations within a foreign country (i.e., marketing methods used outside the home market). Comparative marketing analytically compares two or more countries' marketing systems to identify similarities and differences.

International marketing studies the "how" and "why" a product succeeds or fails abroad and how marketing efforts affect the outcome. It provides a micro view of the market at the company level.

Multinational, global, and world marketing are all the same thing. Multinational marketing treats all countries as the world market without designating a particular country as domestic or foreign. As such, a company engaging in multinational marketing is a corporate citizen of the world, whereas international marketing implies the presence of a home base. However, the subtle difference between international marketing and multinational marketing is probably insignificant in terms of strategic implications.

People In Every Nation Differ

As any marketing student can tell you, the market segment of the United States is dependent on many different factors, including demographic and psychographic characteristics and buying behaviors. Each of these types of characteristics change from nation to nation so marketing that doesn't also change is doomed to fail.

Good global marketing considers these characteristics and how they change what people want, need, and will buy. Effective global marketing campaigns alter marketing strategies, tactics, and messages to match the people in each nation.

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Demographic Characteristics Change By Nations

Once you move beyond marketing in the United States, each country is defined by a different history and culture. Thus, marketing to the same generation differs. For example, what an 18-year-old in the United States wants, differs greatly from what an 18-year-old in Sudan wants.

Psychographic Characteristics Are Affected By Culture

A major part of the concept of marketing segments is psychographic characteristics. These also be differ across the nations. Every single culture on Earth has its own morals, values and culture, and that means different cultures will put different pressures on their citizens.North Korea puts the pressure of following the "Glorious Leader" on its citizens, while Britain is very different. What one culture wants is very different from what another culture considers acceptable.Over time, what a culture considers to be acceptable changes. Once marketers focused on women as being only housewives. In some countries that is still acceptable, and marketers still focus on that segment and attitude. But in many nations, marketers no longer portray women in that way.

Buying Power And Habits Vary

Throughout world markets, people buy differently because of different buying behaviors that have been affected by what they need, what they can buy and how much money they have. People with more spending power have very different buying habits from those with less money to spend. This is true across the world and within nations.

Furthermore, people's buying habits change. For example, in Europe people buy their food fresh for the meals they are having that day, while in North America, they buy what they need for a month at a time, and freeze it or store it.

North Americans don't want to keep going out to buy food, Europeans don't want to eat frozen food.

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REFRENCES:-

http://www.learnmarketing.net/microenvironment.htm http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12http://wiki.answers.com/Q/Outline_factors_that_influence_the_choice_of_targeting_startegies#ixzz1GQ84UOLr

http://ezinearticles.com/?Sustaining-Competitive-Advantage&id=2240669

http://www.netmba.com/marketing/pricing/

Read more: Types of Pricing Strategies in Marketing | eHow.com

http://www.ehow.com/about_5561422_types-pricing-strategies-marketing.html#ixzz1Glvi4Bt2

http://tutor2u.net/business/marketing/promotion_mix.asp

http://www.consumerpsychologist.com/intro_Promotion.html

http://tutor2u.net/business/marketing/promotion_pushpull.asp

http://www.netmba.com/marketing/mix/

http://www.netmba.com/marketing/market/segmentation/

http://wiki.answers.com/Q/How_Marketing_products_and_services_to_organisation_differs_from_marketing_products_and_services_to_consumers#ixzz1Gnd6LSeC

http://wiki.answers.com/Q/Distinguish_international_marketing_from_domestic_marketing#ixzz1GnhWFoeI

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Context :-1)IDENTIFY AND EXPLAIN MACRO AND MICRO ENVOIRMENTAL FACTORS WHICH INFLUENCE MAKRETING DECESIONS…………………………………………………………(1-6)

2)OUTLINE THE FACTORS WHICH INFLUENCE THE CHOICE OF TARGETING STRATEGY…………………………………………………………………………………………… …(7-13)

3)EXPLAIN HOW PRICES ARE SET TO REFLECT AN ORGANISATIONS OBJECTIVES AND MARKET CONDITONS……………………………………………………………………………13-19

4 ) ILUSTRATE HOW PROMOTIONAL ACTIVITY IS INTEGRATED TO ACHIEVE MARKETING ONJECTIVES………………………………………………………………………………19-25

5)ANAYLYSE THE ADDITIONAL ELEMNTS OF EXTENDED MARKETING MIX……26-29

6)RECOMMEND MARKETING MIX FOR TWO DIFFERENT SEGMENTS IN CONSUMER MARKET………………………………………………………………………………………………………29-30

7)EXPLAIN IN DIFFERENCES IN MARKETING PRODUCTS AND SERVICES TO ORGANISATIONS RATHER THAN CONSUMERS……………………………………………30-31

8 ) EXPLAIN HOW AND WHY INTERNATIONAL MARKETING DIFFERS FROM DOMESTIC MARKET……………………………………………………………………………………31-33

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SUBMITTED TO :- SIR,ZAHID MEHMOOD

SUBMITTED FROM :- OMER,TALHA,BINYA,ADNAN

UNIT NAME :- MARKETING

SUBMISSION DATE :-

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SUBMITTED TO :- SIR,ZAHID MEHMOOD

SUBMITTED FROM :- OMER,TALHA,BINYA,ADNAN

UNIT NAME :- ORGANISATION AND BEHAVIOUR

SUBMISSION DATE :-

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