Commercialization of Beauty Essay Example for Free

Commercialization of Beauty EssayTo help with any queries you whitethorn cook some the examination, I live written some guidelines be moo. You depart have had experience preparing exam questions in your review sessions. The following document provides some promote hints and tips, with some sample questions at the end. I have as well attached a document with questions from January and Resit last year, with an outline of what the resolution should contain.What do I have to do?In the examination, you lead be asked to select three questions to answer from a choice of six. Very broadly, these beas might be taken from the nine major(ip) sections listed in the course outline as below.3) merchandising to Consumers Consumer Behaviour* Why is client outline an distinguished comp integritynt of st posegic merchandising management? do reference to a confederation of your choice suggest TWO models that usher out be employ in undertaking much(prenominal) an compend.* With re ference to models and increases of your choice, describe some(prenominal) the Consumer Buying Process and four common types of behaviour that consumers exhibit.* Explain, use examples, how marketers smack to influence consumers at the different comprises of the consumer decision physical process.5) Product Strategy, Brand precaution* Describe and dispute each of the tell apart stages involved in new result development and exempt why innovation is a blusher trade strategy for brasss today.* What is the Boston shargon/growth matrix? 30 In turn, give an exampleproduct for each of the four boxes and describe the merchandising implications. 70* What is a movement map and how argon they useful to marketers? 50 For an industry of your choice draw an example of a positioning map with at least 6 product/ fire shits locate on it according to appropriate criteria with comments on the strengths and weaknesses of each location. 50* Assess the advantages and disadvantages of bra nd extensions. Use appropriate examples to illustrate your answer.* Examine the contributions of effective brand positioning, illustrating your answer with examples of well-positioned brands and poorly positioned ones.6) Pricing Strategy* Discuss the following strategy using set theories and concepts from the course The save earth that companies set low harms is that their products are undifferentiated.* List and apologise the keys mistakes a strategic marketer could make when setting the price of a good or returns.* You have been asked by a company specialising in consumer electronics about the price of a new product about to be launched. Describe the factors that the company should consider in setting the price of their new product.* Discuss how set should play a strategic rather than a tactical role for an organisation. Use relevant industry examples to illustrate your answer.7) Distribution Strategy* Marketing groove issues are amongst the most important decisions that management faces. To what extent do you agree with this statement?* Why might a supply hold fashion disintermediated?8) Promotions Strategy, Marketing Communications* Advertising is the most obvious form of promotion. employ examples, describe at least three other forms of promotional activity.* Identify and discuss the key strategic actions marketers essential take to watch Integrated Marketing Communications are happy.* Different advertising disturbs screw have different objectives. With reference to new-fashioned examples, list and discuss four different types of objective.* there are five main promotional tools. Define each and use examples to illustrate their potential usefulness.9) operate Marketing* Using strategic interchange theories and concepts, state whether you agree or disagree with the following statement Creating marketing strategies for run is no different to the marketing of goods.* Discuss the extended marketing admixture used for services. Why are these useful, given the characteristics of services?Below are listed the exam questions and outline answers for a previous January examination and Resit. The outline answers are produced so that the external examiner and markers have a good idea about what the answer should contain. However, to achieve top mark (70+) you would indigence to include these points in a coherent argument, aided by relevant examples and context.Resit 20121) What are the four distinguishing characteristics of services marketing? What ch in allenges do these present to the conceptualisation of marketing strategy and implementation?Answers should define what is meant by a service a provider/client interaction that creates and captures appreciate. Definitions such(prenominal) as Deeds, processes, slayings (Zeithaml Bitner, 1996) An activity or series of activities provided as solution to customer problems(Gronroos, 2000) whitethorn be used. The four distinguishing characteristics of services marketing result be delineate asIntangible (as argue to tangible goods) The implication of this is that services goat non be inventoried, or easily patented. They whitethorn therefore be easier to copy, and gaining real agonistical advantage may be much sticky. Services burn downnot be readily displayed or communicated- this raises issues in hurt of the promotional strategy and message designs that can be used. Airlines may underscore the relaxation of creation on board as the substantial process of travel is more difficult to represent, and might be more problematic when communicating the companys positioning strategy.Intangibility to a fault makes pricing more difficult. With goods, a speciality focus and premium pricing strategy may be cl ahead of time place by the consumer through the tangible attributes of the products and the difference in quality. The quality of a set of accounts, or a medical procedure may be slight tangible, and therefore high prices may need to be m eeted by other aspects of the strategy and marketing management process. The extended marketing mix, such as physical evidence may be helped to signal quality to consumers.Heterogeneous (as opposed to standardized) Service delivery and customer joy front on employee and customer actions. in that locationfore plans for marketing strategy and implementation cannot be guaranteed in the same way as for products. Service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what was planned and promoted. The extended marketing mix, particularly the formulationof the process may be to alleviate problems of standardization. Some companies such as McDonalds have tried to implement a standardized service experience. This may only be appropriate for some sectors however. For luxury services or professional services, the heterogeneous and client-specific exchange may be part of the value of the service. Companies will need to carefull y monitor and control implementation.Simultaneous production and phthisis customers participate in and affect the transaction, and each other. Employees also affect the service outcome. Decentralisation may be essential. Mass production is difficult. Because services depend critically on the co-production relationship, it is very important that the service contract spell out mutual responsibilities and expectations. A significant percentage of service engagements (estimates range from 10-50 percent) do not meet the clients or providers expectations, resulting in poor performance and low satisfaction, and, therefore, in less value created and captured than anticipated. This gap is an opportunity for services innovation that will remediate returns, performance and satisfaction. The training and management of state, another aspect of the extended marketing mix, may help the control and implementation of strategy in this respect.Perishability (as opposed to non-perishable)- Its diffi cult to synchronise supply and beseech. For many services, demand may be affected by geographical location, seasons, timing etc. Marketing management has to try to balance supply and demand, for example through pricing strategies- bundling return journeys or making seasonal promotions to stimulate demand off-peak. In this sense, segmentation, coffin nailing and positioning is of key importance- identifying the value sought by different consumers and managing the marketing mix accordingly. Services cannot be resold or returned, therefore pricing and promotional tactics may be to sell services at cost alone, for example last minute hotel bookings and flights. Considering overheads are fixed, it is better to have be covered than an empty seat or hotel room. However, these tactics may not integrate effectively with the companys generic strategy.2) What marketing strategies and marketing mix decisions are associated with the different phases of the product spiritedness cycle? Discuss how the product life cycle can help companies to plan its product portfolio.The concept of the plc should be introduced and how marketers use it to make strategic planning and marketing mix decisions. The four phases should be identified asIntroduction Characterised by low sales and high cost per customer. There are slipway which marketers categorise consumers willingness to adopt new products, such as Rogers (1983) seminal work on the adoption of innovation. At this phase the segments which should be indentified and targeted are innovators, who are risk takers and open to new ideas. A similar adoption model is proposed by Moore (1999). His chasm strategy would argue that the early phases should involve techies, to iron out bugs.There are few competitors at this stage, and therefore some advantages may be found in being first to market. Consumers may be willing to sacrifice a premium price for products at the first appearance stage, and therefore a market skimming strategy may be adopted. Alternatively depending on product type, a cost-plus or penetration strategy may be appropriate. Promotional strategy will have the objective of raising awareness. Heavy sales promotion may also be used. Distribution is plausibly to be selective at this phase.Growth This phase is charaterised by rapidly rising sales, overturn average cost per customer, and rising doughs. At this phase early adopters will consider corrupt. They should be targeted by companies as they tend to be respected touch leaders in the product field will promote wider adoption through word of mouth. Moores (1999) model would propose that visionaries should be targeted to help dress competitive advantage and to establish the base of the appeal for the pragmatists.There will be a growing number of competitors at this phase so marketing management and strategy is likely to reflect this. Extensions, warranty, and service may become more important add-ons to secure competitive advantage. Pricing may be competitor-orientated or for penetration. Efforts should be make to build intensive distribution to try to remain market leader. Promotional effortswill continue to build awareness but in the mass market, rather than targeted at a niche.Maturity This phase is characterised by peak sales, low cost per customer and high profits. Purchasers will be the early/late majority (or the pragmatists and conservatives). Competition is likely to have stabilized as weaker products are forced out of the market. Strategies at this stage might involve diversifying brands (brand leverage, brand extension) and product line changes (widening, filling, stretching). Prices will most likely be lowered at this stage, possibly to match or beat competitors. Sales promotion may become more prevalent. Generally promotional strategy will be to stress brand differences and encourage brand loyalty. Advertising will try to prompt and reinforce the brand.Decline This phase is characterised by declining sale s, and declining profits. Laggards or the skeptics will buy the product now cost and risk is low and most other people have purchased the product. Competition will quail as companys divest products in a declining market with declining sales. Strategies at this phase may be to phase out weak items. Prices may be cut. All aspects of the marketing mix might be cut back to reduce costs with efforts make at the level to retain loyalists.The PLC can be used in planning a companys product portfolio. The ideal is to have products at different phases of the life cycle so that products at the maturity phase can provide profits for investment in the mix for products at the introduction and growth phases. Portfolio planning models like the BCG matrix allow star signs to address this, and to make sure they are channelling their efforts into products which have potential for growth (stars and question marks) or profit generation (cash cows). Portfolio planning will also be about phasing out pro ducts which do not have a future (dogs). Best answers will emphasise the limitations of the plc model (linearity, not all products ever do into decline).3) Discuss the main areas an advertising company will consider when given a creative brief. Using examples, explain why a celebrity may be chosen as amessage source. What factors determine the success of a celebrity second base?Answers should outline the following areas for a creative briefPositioning statement- what is the overall positioning of the brand. What are the key brand benefits and brand promise. It could be based on Features how the brand delivers its promise Values and personality what the brand stands for and signifies, which affects relationship and loyalty or Key reward may be based on one of these features, safety, classy personality etc.Proposition spells out what you wishing to say big ideas, strategically central. Potential sources of a proposition are user characteristics, price, brand image, product service h eritage, ways of using the product, comparison with rivals, surprising points etc.What are the specific objectives for the campaign- may be to inform, persuade, remind or reinforce. This should help chew over specific, measurable, achievable, realistic and targeted/timed objectives. Objectives may be to move buyers through readiness stages. Models such as AIDA and Dagmar may be mentioned.Target market- what segments are being targeted. This will impact greatly on the message strategy, creative considerations and media choice. Communication is a transactional process whereby meaning is exchanged through the intentional use of symbols. The firm moldiness encode- reduce the concepts to a set of symbols which the recipient will decode. There must be a shared view of what the symbols mean, a shared field of experience. This will be determined by the target market as well.Message strategy appeals, themes or ideas that tie into the brand positioning and establish points of parity or poin ts of difference. Rewards may be intrinsic e.g. quality or extrinsic e.g. traditional. Buyers expect one or more of the following rewards rational, sensory, social or egosatisfactionCreative structure- how should we express our message studyal (rational, logical, product demo, comparison, testimonials) transformational (non-product related benefit or image, stir up emotions, negative fear, guilt, shame, positive humour, love, pride and joy, often use borrowed participation devices- music, provocative images, cute animals etc.).Media choice- Where is the communication(s) going to appear? Media classes (media types such as PR, press, TV- does it reach the chosen audience?) Media vehicles (choice within the chosen class such as the times or the Sun). How frequently? What impact? What exposure? (Burst- concentrated, Continuity, Pulsing etc.). How much is to be spent? Budget and control measures.Message source- who should express the message? Credibility, celebrity endorsement, modell ing. fame endorsement used extensively. The product or service is given credibility through association with someone the audience trust or aspire to be like. Success depends on having a believable link between the meanings associated with the celebrity and the product Class, status, gender, age, personality and lifestyle are all part of what the celebrity transfers to the product. Likeability also important Celebrity credibility is comprised of attractiveness, trustworthiness and expertise. The various endorsements of a celebrity such as Tiger Woods may be used to discuss the effectiveness of this method.4) Using the purchase of a particular product as an example, describe the decision process model of consumer behaviour. What are the short comings of the model in disposition this purchase?The answer to this question will largely depend on whether the student patch ups to focus on a high involvement purchase such as a car, or a low involvement purchase such as a can of soft soak up. All answer will identifythe 5 stages of the decision process model of consumer behaviourProblem recognition consumers either recognise a problem or have a need triggered by internal or external stimuli. If the stimulus is internal for example hunger, it may rise to threshold level and become a drive. A need can be aroused by an external stimulus such as seeing a neighbours new car may trigger thoughts about buying one yourself. Information search Sources of information may be personal, commercial, public or experiential. Of the sum set of brands available, the consumer will only be aware of a subset called the awareness set. Some brands will meet the initial buying criteria and become part of the consideration set. As the consumer searches for further information, a few brands will form the choice set from which the final choice will be made. The awareness set will depend on whether companies have got themselves noticed.Consumers will then have positioned these according to a hierarchy of attributes- type/price/brand dominant. The car purchaser may decide on brands in the consideration set audi/BMW/Mercedes. The alcoholism purchaser may decide on type, cola with the options of Pepsi, Coca Cola and Supermarket own-brand. Evaluation- will depend on the need the consumer is satisfying the benefits they are seeking and the bundle of attributes that will satisfy this need. Attributes that deliver sought after benefits will vary for the soft drink it may be taste, price, packaging, for the car it may be safety, performance, price.Expectancy value model assumes consumers arrive at decision about brands through an attribute paygrade procedure, combining brand judgements, the positives and the negatives according to importance. Decision- the consumer makes the choice of their preferred brand and also decisions about quantity, timing and payment method. The car purchaser may have clear-cut on a BMW but there was a waiting time and no interest-free finance so a ctually decided on an Audi. The soft drink purchaser discovered Pepsi had a trial price and opted for that. Post purchase behaviour- consumers often feel dissonance that stems from noticing disquieting features or hearing admonishing things about the brand and will be alert to information that supports the purchase decision.No single process is used by all consumers, or by one consumer in all buyingsituations. There are several processes which are not necessarily made on the basis of such sensible and rational judgements. Non-compensatory models of decision making using heuristics may be used, depending on brand knowledge, differences among brands and the social context. In reality, the soft drink purchaser is very likely nevertheless to choose the Cola brand they have previous experience of, or the one all their friends drink.The elaboration likelihood model would suggest consumers may take a peripheral route for this type of purchase, as they are unlikely to have the motivation for a diligent rational evaluation of alternatives. The consumer could just go straight from problem to decision, or certainly skip stages. This model also ignores other consumer psychology such as variety seeking, which happens in low involvement but significant brand difference sectors. Therefore consumers try Cherry Coke, Coke with Lime etc. purely for variety. A car on the other hand would demand the central route.Perceived risk will vary with the amount of money at stake, the amount of attribute uncertainty and the consumers self-confidence. For the purchase of a car, there could be structural, physical, financial, social, psychological and time risk. This uncertainty may lead the customer to postpone the decision, as might unanticipated situational factors, both of which are not included in the decision model. High involvement decisions are more likely to proceed down this central route for purchases that are financially involving, technically complex or have social implicat ions (examples might be cars, mobiles).5) What are the three key stages of the strategic marketing management process? Explain what activities are undertaken at each stage of the process and why this is so critical to a firms long term competitive advantage.Strategic analysis- where are we now? This is concerned with understanding the strategic position of the organisation in terms of its external purlieu, internal resources and competencies and the expectations and influences of stakeholders. Strategy is the development of long-range plans for the effective management of environmental opportunities and threatswhile taking into account the organisations strengths and weaknesses. At this stage firms will collect and analyse relevant types of information about environmental forces and trends. This will be on two levels the macro- for which a PEST analysis may be performed and the micro- for which the Five Forces model for industry analysis may be used, in addition to analysing other relevant factors such as consumer behaviour and perceptive competitor analysis.The other environment is the internal environment in which a firm will identify its assets, resources and their application to determine where strengths and weaknesses may exist. Models such as a resource audit or value set up are used to collect this information. All relevant environmental analysis is then compiled into SWOT from which the organisation will determine where its future strategy should lie given the major factors and trends identified. This stage is crucial for competitive advantage as market information and intelligence is essential for ontogeny a successful marketing strategy based on and for creating and sustaining competitive advantage is todays rapidly changing environment.Strategic choice- where do we want to be? This involves understanding the underlying bases guiding future strategy, and generating strategic options for evaluation and selecting from among them. Strategy is decided upon in terms of objectives, financial decisions, segmentation, and positioning. These are the crucial and central decisions in developing a competitive marketing strategy. Based on the SWOT, strategic alternatives may be suggested and a decision needs to be made at incorporated and SBU levels. Deciding the the mission and directional strategy and allocating resources will be decided at a corporate level. Portfolio planning models such as the BCG matrix may be used. At the SBU level, a generic strategic orientation (cost leadership, differentiation, focus) will be chosen based on unique competitive advantages.At the functional level, strategists consider decision such as what products to offer. Ansoffs matrix may be used a tool to choose between the four thinkable options available to any organisation with regard to product/market strategy. Market segments to target and market position strategy are also decided at this stage, as well as competitive positioning and relationship st rategies. Segmentation, targeting and positioning are the cornerstone of marketing strategy and key in developinga unadornedive position in the consumers mind, developing brand loyalty and therefore building long term consumer franchise that will help the company defend itself from competitive threats.Strategic implementation- how are we going to get there? This is the translation of strategy into organisational action through organisational structure and design, resource planning, and the management of strategic change. This involves the strategic, rather than tactical planning of product innovation, branding, services, pricing and distribution, marketing communications and emarketing.Some responses may also identify a fourth stage- strategic monitor and control- did we get there? The importance of monitoring and control in strategic planning.6) Identify what is meant by Value Chain Analysis. Why would a firm decide to use this analytical tool?Framework developed by Porter (1985) as a way of examining the nature and extent, if any, among the internal activities of a firm. Porter argues all(prenominal) firm is a collection of activities that are performed to design, produce, promote, deliver and support its product. All these activities can be represented in five primary activities and four support activities using a value cosmic string concept. The primary activities of the value chain are inbound logistics, operations, outbound logistics, marketing and sales and services. Support activities are firm infrastructure, human resource management, technology development and procurement.Value chain analysis has been widely used by firms as a means of analysing the internal activities of an organisation. one of the key benefits is the recognition that organisations are much more than a random collection of machines, money and people because these resources have no value unless they are deployed in activities and organised into systems which ensure products and s ervices are produced and valued by the end customer. Firms which produce several products may evaluate several value chains. Examining eachchain and the linkages may allow firms to examine the potential synergies between the value chains of different products.Internal analysis provides a detailed understanding of those aspects of an organisation that are of strategic importance. It is often the way a firms assets and resources are applied that explain differences in performance among companies, rather than industry structure. It has been argued that the significance of the external environment has been over emphasised and a more appropriate focus for strategy is the organisations resource base.The key idea is that the value chain is a systematic way of examining all the activities a firm performs and how they interact to differentiate a firms value chain from its competitors value chains. This differentiation is recognised as a key source of competitive advantage. A firm is therefor e likely to use this tool when undertaking a strategic analysis. It will analyse the various activities and determine where its strengths and weaknesses lie. For example high levels of absenteeism and ineffective warehouse automation may be identified as weaknesses. Strong research and development and salesforce results might be strengths. The company will then decide whether to match their strengths or to convert or nullify their weaknesses. The value chain would be used when determining a strategic capability profile or using a SWOT analysis.Answers may explore the alternative forms of internal analysis, such as the resource-based approach, performance analysis approach and functional analysis approach, commenting on potential strengths and weaknesses of these analytical tools. Like any strategic environmental analysis, internal analysis must be rigorously performed and undertaken at regular intervals to monitor and evaluate strategies and changes.Answers may also critique the fa ct that value creation does not only occur in the organisation but also in the supply and distribution channels. For example the quality of a car is influenced not only by the activities within the firm but by the quality of spare parts, components and the performance of distributors.January 20111) Discuss the factors that influence a companys choice of promotional mix. (50%) Name and describe the chain of mountains and characteristics of various promotional tools. (50%)The main 5 factors that influence the choice of the marketing mix are1) Resource availability and cost of promotional tools2) Market surface and concentration3) Customer information needs4) Product characteristics5) Distribution push versus consumer pull strategiesOther relevant points are that decisions must not be made in isolation from the rest of the marketing mix- must be aligned marketers need to make the correct choice of the promotional blend to communicate to the target audience Marketers weigh strengths a nd weaknesses of tools against promotional objectivesAdvertising is defined as Paid for communication by an identified sponsor with the aim of influencing and informing one or more people. It is mainly used in the long term and is useful for raising awareness or influencing consumers attitudes about brands. Advantages are that it can communicate amplified and expressive messages through the use of sight, sound, music, experience etc. Disadvantages are that is is one directional, impersonal, expensive and can be seen as pervasive.Direct marketing is defined as The recording, analysis and tracking of customers direct responses in order to develop loyalty. It is used in the long term and short term. It is mostly used for retention but can also be used for acquisition of new customers. With improvements in databases, direct marketing can increasely be customised and up to date. It is also interactive i.e. generates responses from customers and builds relationships. Disadvantages can be cost, and that telemarketing and directmail etc. are often seen as a nuisance by consumers. domain Relations is defined as the Formulation, execution and sustained effort to establish and maintain goodwill and mutual understanding and reciprocal goodwill between an organisation and its stakeholders. It is used in the short and long term and is particularly useful for building reputation. It has the advantages of low media costs, credibility, visibility, and dramatisation- can catch consumers off guard. Major disadvantage is that it is difficult to control.Sales promotion is An incentive for the customer, salesforce or distributor to make an immediate purchase. It is mainly used in the short term. When used strategically, it can be useful for encouraging trial, re-trial, extended trial, building databases and getting rid of old stock. From a trade perspective it can be useful for increasing distribution, increasing inventory, and improving shelving s stones throw/position. Disadvanta ges are that it does not build brand loyalty and is mainly tactical in its horizons.2) Explain the concept and resolve of analysing industry rivalry using Porters Five Forces model. Use illustrative examples to support your answer.The reason the Five Forces are important is that whilst industry structure has a surd influence in determining the competitive rules of the game as well as the strategies potentially available to the firm. Forces outside the firm are significant to begin with in a relative sense since outside forces usually affect all firms in the industry, the key is found in the differing ability of the firms to deal with them. The purpose of analysing industry competition is that it Determines sectoral structural attractiveness Collective strength determines the ultimate profit potential of the industry and the ability of firms to earn rates of ROI in overabundance of the cost of capital Links with strategy development- goal of business is to find a position in t he industry where it can defend itself Strategists should evaluate and rate these forces (high/medium/low threat or power) Accountsfor most of the micro-environment by acknowledging that competitive structure is not just determined by direct industry competitorsAnswers may outline the different Forces and raise some or all of the following pointsRivalry determinants Industry growth exit barriers brand identity switching costs concentration corporate stakes diversity of competitors informational complexity intermittent overcapacity fixed costs/value added product/service differencesBuyer power Bargaining leverage e.g. Buyer information, Buyer switching costs Buyer volume Price sensitivity Brand identity, Product/service differences, Impact on quality performanceSupplier power e.g. Switching costs substitute inputs impact of inputs on differentation threat of forward integration importance of volume to supplierSubstitute threats e.g. comparative price performance of substitutes sw itching costs buyer propensity to substituteEntry Barriers e.g. Economies of scale brand identity switching costs capital requirements ingress to distribution expected retaliation3) Discuss the role that segmentation, targeting and positioning each play in developing a successful marketing strategy including managing the marketing mix.STP is central to development a marketing strategy. The marketing concept assumes different preferences amongst consumers, and STP is how consumers are grouped into clusters with similar characteristics or needs, so that products and services can be targeted to satisfy them. Segmentation is dividing a market into distinct groups of buyers with different needs, characteristics or behaviours, who might require separate products or marketing mixes.The reason companies use STP is that* It is profitable business.* May discover unfulfilled consumer needs.* Strengthens management capabilities.* Allocates marketing resources.* Sets market objectives.There are 6 stages to STP, which areWhen considering which segments to target, marketers consider a mixture of managerial concerns and customer needs which include * Is servicing the segment consistent with corporate goals? * What is the strength of competition targeting the segment? * Is it desirable in terms of size, future growth and saturation? * Selecting segments whose needs match the companies ability to deliver. * Profitability and strategic fit- SWOT* Ultimately the decision is conceptual- who we are as a company, and where we want to beThe strategic role that STP plays is in allocating resources to the potentially most profitable segment of the market. Product lines are then designed to match demand in the market place or match resources. STP means companies can catch the first sign of change to give time to mend and take advantage of it, and consider best competitive position to adopt for each segment. With marketing management STP allows firms to determine the right style of com ms campaign choose the most cost effective advertising media apply demographic data effectively price for maximum effectiveness and develop the right channel strategy.Ultimately STP results in positioning which is possibly the most important aspect of marketing- it results in changing and forming perceptions about brands, creating brand identity and is about designing, communicating and delivering value (crafting the marketing mix to the needs of the target market is the foundation upon which customer relationships and brands are built). Aproducts position is the way the product is defined by consumers on important attributes, it is the place the product occupies in the consumers mind relative to competing products. Positioning is based on unique selling proposition (USP) (what is unique/what are you selling) a Brands competitive advantage- with whom are you competing and how are you better? And who will use the product?4) What personal, social and heathenish factors influence buye r behaviour? (50%) Choose an example of a high involvement purchase, such as a car, and describe how these factors influence the consumers choice.(50%)ethnical Influences have the broadest and deepest influence. Culture is the fundamental determinant of a persons wants and behaviors acquired through socialization processes with family and other key institutions. Your values are formed on achievement and success, individuality, freedom, humanitarianism etc. (or Hofstedes model). Subcultures- more specific identification and socialisation for members on the basis of nationalities, religion, geographical location, political perspectives. Social classes show distinct preferences in terms of product choice, brands, media choice and languages.Social influences. Relevant factors include Reference groups have a direct or indirect effect on attitudes or behaviours consist of primary and secondary aspirational and dissociative they introduce ideas and behaviours, influence attitudes and self concept they create pressures for conformity which may affect brand choice. horizon formers (e.g. designers), opinion leaders (offers information and usage advice), confident social and involved with category and opinion followers. Companies try to reach leaders to disseminate messages. Family- the most important consumer buying organisation and the primary reference group, different priorities and decision-making influences.Personal Influences Relevant factors include Age and stage in life cycle- family/ psychological/ transitions. Occupation and stinting circumstances- occupation may affect products and services required and what you canafford. Personality a set of distinguishing human psychological traits that lead to relatively consistent and let responses to environmental stimuli. Often consumers try to buy brands that reflect their own personality (Aakers brand personality typologies sincerity/ excitement/ competence/ sophistication/ ruggedness). Self-concept actual/ ideal/ others self-concept/ multiple selves. Lifestyle pattern of living as expressed in activities, interests and opinions and values influences such as time constrained, multi-tasking. Core values the belief systems that underlie attitudes and behaviours.5) Discuss THREE different approaches to pricing, outlining the advantages and disadvantages of each approach.The three approaches are Cost-based pricing strong internal orientation and based on costs Competitor-orientated pricing major emphasis on levels set by competitors Market-led pricing focuses on the value that customers place on a product in the market place and the nature of the marketing strategy used to support the product. Cost-based pricing involves setting prices based on the costs of producing, distributing and selling the product plus a good rate of return for the companys effort and risk. Methods include Cost-plus pricing- simplest method of pricing- involves adding a standard mark-up to the product break-even- what s the minimum price we can charge to match the cost of making and marketing a product (BE= (fixed costs)/(price-variable costs). Marginal cost- setting prices below full cost.Often used by service companies like hotels and airlines to make a contribution to direct costs. More complicated for services- variable costs move faster with an increase in demand. Advantages simple ensure you stay in business by setting minimum floor on pricing and helps to set objectives in terms of the minimum number of units that need to be sold Disadvantages In reality many business use cost-based approaches but they can have huge disadvantages illogical raised prices when sales pin tumbler sales estimates are made before a price is set ignores elasticity of demand ignores competitors pricing no incentive to reduce costs ignore the impact of consumer perception and psychology estimates overheads against individualproducts in an arbitrary wayCompetitor-based pricing- toilet take three forms1) Firms foll ow the prices set by leading competitors Benchmark then set either above, below or the same as competitor Popular in financial services Can be risky, especially if cost position is not as good as a competitor Could start price war2) Going Rate- all competitors receive the same because it is the going rate Undifferentiated commodities like coffee beans Challenge for marketer is to find creative ways of differentiating to charge higher price e.g. fair trade coffee beans, premium quality coffee beans 3) Competitive bidding process- contract goes out to tender sealed bids or competitive auction bridge usually lowest price accepted increasing price pressures, European competition legislation and growing use of technology has increased the use of competitive bidding Very common in government and public sector marketsMarket-led pricing- favourable as it takes into account value rather than price. Main methods 1) Trade-off analysis- also known as conjoint analysis, determines the trade-o ff between price and other features different combinations of variables such as brand, packaging, product features and price are tested can measure the impact on preferences of increasing price and determine the price level customers are willing to pay 2) Experimentation- places products on sale in various locations at different prices3) Economic Value to the Customer (EVC) reducing costs and increasing revenue are primary concerns of companies Therefore in industrial markets, EVC is calculated- can charge more for a product if it will help your customer increase their revenue more than the competition e.g. new technology.Market led pricing is favourable as it takes into account the psychology ofprices and not simply economics the price is used to say something about the product, and other factors such as stage in the product life cycle. Price often indicates quality especially in services. However, organisational considerations such as costs and the nature and structure of compe tition must also be considered.6) Outline how you would construct a SWOT analysis. (50%) Explain the purpose of a SWOT analysis in the marketing planning process. (50)Answers should explain how the marketing environment is analysed- Macro environmental analysis conducing a PESTEL analysis, Micro-environment- examining Five Forces and other factors such as consumer behaviour. These result in identifying opportunities and threats. An internal analysis using e.g. value chain, identifies an organisations strengths and weaknesses. The purpose of conducting a SWOT is to identify strategic choices available to a company. Its the internal communication of external information about appear issues, situations and potential threats that potentially influence an organisations decision making (Albright 2004).SWOT is essential for firms growing in size and complexity and is an important component of a companys approach to developing a market orientation. Market orientated companies are more prof itable. SWOT is essential in markets where the pace of change and uncertainty is increasingly high- companies need to take a proactive direction. It identifies fads, trends, and megatrends. Scanning customer trends helps you create, communicate and deliver value and beat the competition.SWOT/TOWS is the basis for making strategic decisions about growth, what products, what markets, and whether to convert weaknesses or capitalise on strengths etc. Decisions are then made about STP and how the marketing mix will be managed in order to achieve marketing objectives. SWOT is the result of the strategic analysis which is followed by strategic choice, strategic implementation, and strategic control.