Notesale: Turn your study into money

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MS2005 Revision Questions
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+ What are the differences between a market-orientated business and an
internally-orientated business?
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Marketing orientation: focus on customer needs to identify potential market
opportunities
 focus on customers, marketing research, innovation, search for new markets,
fast-paced, competitive advantage

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The marketing concept: ‘the achievement of corporate goals through meeting
and exceeding customer needs better than the competition’
 customer orientation, integrated effort, goal achievement

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Production orientation: efficiency, low-cost
 focus on internal processes, such as products, price and performance,
ignoring competition, slow, avoidance of mistakes, stick with the same

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Product orientation: quality, performance, innovation
 similar to MO in some ways, however completely ignores ‘external’ processes

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The selling orientation: promotion
 little focus on products themselves, everything is based on customers

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In contrast, effective companies take external
processes into account as well; who wants to buy what and why, how to produce
the best profit possible
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A firm’s offering is typically a ‘bundle of benefits’
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Product as a bundle of benefits
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Products are what marketers supply in exchange for customers' money
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e
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Since
marketing involves seeing everything the firm does from the viewpoint of the
customer, marketers define products as bundles of benefits
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How can we categorise the different factors that make up a buyer’s characteristics?
- Cultural: culture, subculture, social class
- Social: membership groups, family (5 roles)
- Personal: age, life cycles, occupation, lifestyle and so on
- Psychological: motivation, perception, learning, beliefs and attitudes
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Who are the participants in the buying process (the different buyer roles)?
- Family holiday:
- Initiator = mom and dad, come up with the idea of a holiday
- Influencer = especially children
- Decider = mom and dad
- Buyer = mom or dad
- User = everyone
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)
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Need recognition: awareness of needs and inhibitors

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Information search: where consumers look

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Evaluation: awareness of choice criteria (technological, economic, social,
personal), lots of information vs
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evaluation: cognitive dissonance can be dispelled by advertising and keeping
in touch, but best way is to provide a high-quality product

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Low-involvement decision: simple evaluation, where awareness produces trial
and leads to repeat purchase

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High-involvement purchase: extensive evaluation, other opinions, attitudes,
subjective norms

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How can marketers judge the usefulness of these bases?
- Psychographic and behavioural bases are used for determining preferences and
demand for a product and advertising content
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- An effective segment is defined, measurable, accessible, actionable and suitable
for the firm
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- Substantiality/profitability
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What bases can firms use to position themselves?
- Attribute: highlighting a product feature/attribute
 Pringles: once you pop, you can’t stop – deliciousness
- Price and quality: emphasising e
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low price or high quality
 Walmart: low prices, always
- Use/Application: a specific use
 Nescafe coffee: winter/summer drink
- Product user: associating the use of a product with a certain type of user
 Adidas: Impossible is nothing
- Product class: association with a particular category of products

 Subway: Eat Fresh – healthy eating
- Competitor: position against competitors
 Apple: Everything is easier on a Mac
- Product differentiation: quality, price, performance, innovation
- Services differentiation: delivery, installation, speed, customer services
- Personnel differentiation: training, hiring
- Image differentiation: images that reflect the soul/ethos of the company
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What is the difference between features and benefits?
- Features are under the actual product; they might be related to the style or the
design of the product
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- Benefits are under the core product
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For example, when a customer buys a
hammer, they are actually buying a hole in the wall, rather than the hammer
itself
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- Features are defined as surface statements about your product, such as what it
can do, its dimensions and specs and so on
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- For example, saying that a cell phone has a fast internet connection is actually
showcasing a feature, not a benefit
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- Core product: the main benefit gained when the product is bought
- Augmented product: additional features/benefits that, when combined, form a
brand; eg
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What factors are important for successful brands?
- A clear name that’s easy to pronounce and remember
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- Building quality into the core product
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- Using well-blended communications
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- Taking a long-term perspective
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What elements determine a brand's position in the marketplace?
- Target market: where does the brand compete?
- Heritage: background and culture
- Core values and characteristics: e
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quality or price
- Assets: what makes the brand different from its competitors?
- Personality
- Reflection: how the brand relates to self-identity
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Might be PR or other aspects of the marketing mix
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How do the additional 3Ps of services marketing map onto these characteristics?
- People: inseparability – importance of service provider
- Process: all characteristics – importance of how the process works
- Physical evidence: because services are largely intangible, it is the marketer’s job
to plant some physical cues for the customer, for example, environment,
ambience, special layout
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Outline the Product life cycle
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- Introduction: the product is introduced to the market – low sales, money is used
on promotion in order to create awareness
 Product: importance of branding and quality level
 Price: low prices to attract customers (market penetration), high skimming if
the product is expensive to produce

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 Promotion: building brand awareness
 Place: distribution is usually selective and scattered
Growth: sales and profits and competition start to increase, money is invested in
promotion and gaining market share
 Product: new improvements in order to beat competition
 Price: depends on other factors, e
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competition and firm goals
 Place: channels are increased
 Promotion: increased, more efforts to create brand preference and loyalty
Maturity: brand awareness is strong, sales increase but at a decreasing rate (very
competition orientated approach)
 Product: adding features and modifying product in order to gain market
share and beat competition
 Price: reduced in order to do better than competition
 Place: new channels
 Promotion: differentiation and loyalty, discounts may be offered
Decline: sales decrease, change in trend, unfavourable economic conditions
 maintaining the product: price is decreased and new uses for product are
found
 harvest: reducing marketing cost and offering to loyal niche until zero profit
 discontinue the product

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- If the firm has an existing product in an existing market: market penetration
 increasing market share and sales, fighting competition with e
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lower prices
and promotion
- An existing product in a new market: market development
 new geographical markets, new packaging, new distribution channels
- A new product in an existing market: product development
 brand extensions, product replacements, innovation
 can be reached with R&D, being first into the market, detailed knowledge of
customer needs
- A new product in a new market: diversification
 clear idea about what the firms is trying to achieve
 e
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Apple releasing the first iPod – moving to music industy



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