General Marketing Questions, Essay Example

General Marketing Questions, outline the alternative types of indirect channels of distribution the company could use.  

Assuming that Arnold’s Emperor cream cookies are a high quality, high calorie, premium product about to be launched into the Australian market Which type of channel of distribution would you believe is most suitable for this product? State your reasons as well as any assumptions that may underpin your argument.

Assuming the Arnold’s Emperor Cookies as a new high quality product to be launched in the Australian market, there are many different indirect channels of distribution the company could use.  Being cream cookie manufacturers, the company may use indirect marketing channels like retailers, franchises and mail order service for functions among others.  Channels like franchising make sure that the product is easily accessible to consumers who are far away from the manufacturers.  Single-party selling system can be used to reach customers directly through retailers e.g. with the help of store-based chains (Monsoff, 2009).  However, multiple-party system may be used to reach customers in faraway or remote areas like different states of cities or remote towns etc.

I believe indirect channels of distribution are most suitable for Arnold’s Emperor cream cookies, as they would make it possible for the single manufacturer to reach a large number of customers.  As the product is a high calorie product, the target audience may be limited and distributed all over the place.  It would have to be made sure that the product reaches the target audience. Store-based retail chains are a good idea for distribution.  Moreover, online retailing and mail order services can be considered for bulk orders for functions, parties, weddings, etc.

Using indirect marketing channels, Arnold’s Emperor will establish a number of retailers with whom to do business with. The retailers should be located in different parts of the country so that the company can reach as many customers as possible. Customers want to buy easily accessible products. This will be enabled through indirect distribution channels, as customers will not have to travel long distances to purchase the product form the main store. They will need to get the product of their choice from the nearest store, the retailer stores.

The main assumption in this case is that the product is new and customers have to become aware of its existence. This implies that the new product should be distributed through many retailers and with strategic display. This will make the customers who get to the retailer stores attracted to the well displayed product.  It is also assumed that online marketing will fit for the customers ho purchase in bulk because these are the types of people who are busy and like to spare time whenever they are shopping.

Explain the product life cycle model.  Assume that the Australian consumer market for mobile phones is expected to enter into the mature phase in about one year’s time. Assume you are the dominant business operating in this market and intending to continue. How would you prepare to change your pricing and distribution strategies?

A product life cycle model is a model that has been made to show the different stages in the life of any product.  It shows the stages through which products evolve and develop overtime.  It means that all products go through different phases in the course of their life, and that all products have limited life.  The product life cycle model consists of four basic stages: introduction, growth, maturity and decline (Stark, 2011).  These stages are explained below:

Introduction

At this stage, the market and growth size is small.  At this stage, it is necessary to monitor the product and its growth carefully in order to decide whether to withdraw the product or to let it go.  In the introduction stage, the costs are very high and the volume of sales is slow.  There is minimal competition, demand needs to be created and special efforts are required to prompt the customers to buy the product at this stage.  The product does not give profits at this stage (Sääksvuori & Immonen, 2008).

Growth

There is rapid sales and profit growth at this stage.  The output increases and this causes an increase in the profits.  It is better for the companies to invest in marketing at this stage.  In the growth stage, the costs are reduced, volume of sales increases, the profits increase and the product starts becoming more popular in the public’s eyes.  Competition increases and due to this, the prices of the product decrease (Stark, 2011).

Maturity

Maturity is the stage when the competition is most intense.  The key activities in this stage are marketing and finance.  The market as a whole earns the most profit at this stage.  As production increases, costs are lowered.  Sales reach their peak point and more and more competitors start entering the market.  This leads to market saturation.  Industrial profits on a whole go down (Sääksvuori & Immonen, 2008).

Decline

In this stage, the costs become counter-optimal i.e. the costs incurred to increase sales do not increase sales but instead decrease the profits.  The total volume of sales declines, which causes prices to further lower and the profitability to finish.  Earning profit from the product at this stage becomes a challenge (Sääksvuori & Immonen, 2008).

Assuming that the Australian consumer market for mobile phones is entering into maturity in about one year’s time, a dominant business operating in this market would have to specially formulate its pricing and distribution strategies in order to continue.  This will be done through price skimming. The company should set its prices very high because it dominates the market to cover its sunk costs. Since the dominating company is expected to reduce the prices once competition increases, by this time, it will have covered the fixed costs and therefore lowering the costs will not harm it (Gregson, 2009). After other companies enter the market at the end of the year, the dominating company will be prepared to lower its prices significantly and still not make losses. It will be able to gain a high market share because it will decrease prices to lower levels than those of the competitors and therefore, attract more customers.

Explain the difference between a direct distribution system and an indirect distribution system. You are the marketing manager for an internationally recognized American brand of high quality footwear that is currently selling its products to Australian consumers using a traditional channel system but achieving poor exposure, low market penetration and poor profits. Assume you continue to favor an indirect distribution system consisting of the alternatives of a traditional channel system, a corporate system, an administered system, or a contractual system. Explain what kind of indirect distribution system you would like to set up to improve your poor performance, stating your reasons.

Direct and indirect distribution systems are two different distribution systems used for distribution of products by businesses. Direct distribution channels are used when the manufacturer has to deal through an overseas or other faraway channel so the dealing can be done without any intermediary. It is also employed in order to maintain greater control over the market. It is used to actively exploit the market. It is the shortest and simplest distribution channel available. Moreover, it is possible for the manufacturer to provide more reasonable and lower prices than possible through an intermediary channel or retailer. Sometimes direct distribution channel is the only channel because use of intermediary may cause an increase in prices, which can make the business lose customers. Direct distribution, however, is very time consuming and can be expensive. It is also difficult to manage (Onkvisit & Shaw, 2008).

Indirect distribution channels involve some intermediary between the manufacturer and the consumer (Capon & Hulbert, 2008).  These intermediaries can be franchises, retail stores, and other indirect channels.  In indirect distribution, manufacturers use other sales intermediaries for marketing and selling their products.  Indirect distribution channel is simple and inexpensive.  The manufacturer is relieved of the duty to physically transport and move goods.  Producers also use indirect channels of communication because the customers are often familiar with certain retailers and transporters. It can also be used to sell small products through large retailers.  This makes it easier for producers to reach their target consumers (Onkvisit & Shaw, 2008).

The best distribution channel to be applied by the company and succeed in the Australian market is Contractual distribution channel. Through this method, all the distribution channels are tied together by a contract such that there are set targets of sales that need to be accomplished (Cant, Strydom, & Jooster, 2009). In the contracts, there are economies of scale to achieve and this will be beneficial to the company since it will be able to improve its exposure, increase the profits and improve on market penetration.  With signed in contracts, the retailers will have to adhere to the specifications in the contract.

Outline the new product adoption process model [the steps individuals are likely to go through on the way to accepting or rejecting a new product or service]. Assume you’re relatively small, and financially constrained ice-cream company that is about to launch on to the Australian market a range of high quality, premium, low fat, non dairy-based ice cream. Explain a suitable integrated marketing communication strategy for this early phase of the adoption process.

Production adoption process is a model that comprises of the steps all prospective buyers mentally go through before deciding whether to accept or reject a product (Pride & Ferrell, 2010).  The product adoption process model consists of the following five steps:

Product Awareness: This is when the prospective customer finds out about the product but is not fully aware of all the necessary information.  Customers mostly get awareness about products through ads they see in magazines, newspapers, TV, internet, or through other people.  They also get awareness about the product’s utility, price, quality and features (Pride & Ferrell, 2010).

Product Interest: This is when the product gets the customer’s attention and the customers try to find out more about it (Shimp, 2007).  Only when a consumer is interested in a product does he start gathering information regarding its price, quality and the opinion of other users about the product.  He looks around and collects all the information he needs for proper decision-making.

Product Evaluation: This is the stage when the customer considers the product good and beneficial (Pride & Ferrell, 2010). They evaluate on the basis of the information they have collected whether the product is good for them or not.  They decide if the price, features, quality and utility of the product are satisfactory or not.

Product Trial: This is the first purchase that the customer makes with the intention of trying it out (Shimp, 2007).  The consumer purchases a small amount or single unit of the product to test if it is according to what he needs.

Product Adoption/Rejection: This is when the customer decides whether to use the product again, or to reject it.  After collecting information and trying the product, the customer decides whether he will accept the product and use it again, or if he is dissatisfied and will reject (Pride & Ferrell, 2010).

Another way to describe the customer’s state of mind is:

Cognitive state: This is when the customer is getting awareness and being informed.

Emotional state: This is the emotional state of mind of the customer when he decides on his likes and preferences.

Behavioral state: This is the state when the customer makes use of his both likes and dislikes, and the awareness and information he has, to decide on a product (Pride & Ferrell, 2010).

The speed of adoption of a product is greatly dependent on the marketing efforts on behalf of the firm, the nature and quality of product, and consumer’s individual traits.  If consumers have high income, the product adoption rate shall be faster.

In introducing a new premium, high quality, low fat, non-dairy ice cream, the marketing strategies will target specific audiences.  The consumers that will be targeted mainly will be diet conscious people, people with dairy allergies or other medical reasons, or other people who would prefer low calorie food products.  The modes of marketing should target the audiences directly. The best type of communication strategy to do this would be external integrated marketing communication strategy. Through this type of strategy, all the outside sources with a direct link with the company would be included in the communication system (Blakeman, 2007). These outside sources are public relations, marketing and distribution firms. These firms help the small company to successfully launch its product into the market and succeed during the adoption process.

Briefly describe the various stages buyers pass through in order to reach a buying decision. Describe two buyer situations where a buyer might not pass through all the stages of the buyer decision process.

The various stages buyers pass through in order to reach a buying decision are awareness, interest, evaluation, trial and decision (Pride & Ferrell, 2010).  The two buyer decisions where a buyer might not pass through all the above stages are need recognition, evaluation of alternatives and purchase decision. In this case, the buyer needs to identify the kind of need he wants to satisfy, evaluate the alternative products there are in the market for his need and make the purchase decision. This way, the buyer does not have to pass through the five stages in buying decisions. The post purchase behavior will guide future similar needs. If the customer is satisfied with the first purchase, he will make the same purchase decision if a similar need arose.

Explain the marketing concept. Explain how a business that applies the marketing concept will tend to be different in its approach to the market and consumers, from a business with a production orientation

The marketing concept is also known as the 4 P’s of Marketing (American Management Association, 2007).  These are the 4 elements that should be kept in mind for proper marketing of the product.  These elements should be kept in mind to make sure the right kind of consumers get the message and that the marketing efforts do not go on waste or in the wrong direction.

Product: The product should be different from the other products of competitors.  Variation attracts customers.  The product should also be innovative and should have all the features the customers need.

Price: The pricing includes cost recovery pricing, penetration pricing, and price skimming.  The price should be fixed keeping in mind the customers and the targeted audience.

Place: The place includes distribution channels e.g. direct and indirect, advertising etc.  The place should be according to the target audience and the kind of product being marketed.

Promotion: Promotion includes advertising and other different promotional techniques.  These techniques include both individual and mass communication, brand management and corporate identity.

A business that makes use of marketing concept gets more profits and more customers.  The costs are decreased and the profits increased (American Management Association, 2007).  It is made sure that the amount spent on direct expenses and advertising and other expenses is not wasted.  The costs are decreased due to this and it is made sure that the costs are reduced and income increased.

BOOST Juice Marketing Questions

Identify the target market/s that might find BOOST Juice appealing using geographic, demographic, psychographic and behavioural segmentation bases in your answer. Explain why the BOOST Juice product concept appeals to the chosen target segment/s?

Following are the target markets using geographic, demographic, psychographic and behavioral segmentation.  We can easily identify the BOOST Juice target market using geographic segmentation.  Geographic segmentation includes geographic factors including land relief and accessibility etc.  On the basis of this type of segmentation, the BOOST Juice Company would probably attract more customers from urban areas.  The reason is, more and more people in urban areas are becoming conscious about the chemicals and artificial flavours and additives that go in their food and drink.  They are increasingly becoming conscious about their health and fitness.  The people in rural areas or smaller towns are comparatively less conscious about these things.  So geographically, BOOST will attract more urban customers.

Demographic segmentation is segmentation based on age, gender, marital status, financial standing, etc.  Demographically speaking, the BOOST Juice would probably attract people who are conscious about health and fitness.  It may even target parents who are conscious about what their children are eating and drinking.  As juices and juice bars are a quick way of refreshment and providing energy, it can target the working class and job doing people as it provides a light and quick mode of refreshment.  Based on gender, it may attract more women and children than men, as women are more concerned about their level of fat and sugar intake and will opt for healthy and natural juices.

Psychographic factors include factors like the attitude, thinking, mindset, values and ethics of the targeted audience.  Based on Psychographic factors, the BOOST Juice should be more popular in health conscious people and people who opt for non-alcoholic drinks.  It may also target parents of school going children who are especially concerned about the kind of food and drink their children consume.  Behavioural factors are the factors related to the behaviours of the people in the target audience.  It includes their values, beliefs, behaviours and acceptance towards change.  Behaviourally, BOOST Juice will probably attract all behavioural segments of the audience.

BOOST juice is able to appeal its target customers because it emphasizes on psychographic factors by changing attitudes and awareness of the target customers. It appears in the eyes and minds of the customers that the juices from BOOST are very delicious, original and of high quality and therefore, customers should not think of any other type of juice.

What pricing strategy has been chosen for BOOST Juice? Do you think that the company priced their product correctly? Explain your answer with reference to marketing pricing strategies for new products.

The pricing strategy chosen by BOOST Juice Company was decided keeping in view the behaviour of the customers.  People are gradually becoming more and more aware of what they eat and drink.  The company priced their product correctly which is why it easily gained popularity in the eyes of its customers.  From what I believe after reading the case study, the BOOST Juice Company may have used two different marketing price strategies in pricing the product.

The pricing strategy chosen by BOOST Juice Company is penetration-pricing strategy. Through this type of strategy, the company was able to penetrate into the market and change the notions of all the customers to believe that the juice is the best. The company has been able to build brand equity and this has benefited it very much.

From the case study outline consumer behaviour factors

There are various consumer behaviour factors that influenced the popularity of BOOST juice.  Trends change and the way of customer’s thinking also changes.  People today like products that are healthy and have become fitness conscious.  These consumer behaviour factors greatly influence the product’s popularity.  Consumers mentally pass through different stages in order to decide which brand to use and which one to reject.  The consumers first find out about the product through advertisement or through other users.  If they find the product interesting, they collect more information about it like the price, special features, utility, etc.  This information may urge the customer to try out the product.  If, after trying the product, the customer is satisfied, he decides to continue using the product.

The consumer behavior factors in this case are personal such as the mindsets of the customers that BOOST has the best types of juice. Other factors are environmental influenced by the locality a customer lives such that one cannot live with people who treasure BOOST products and think of products from other companies.

According to the case study, the thinking of the people and their attitudes change with the passage of time.  The trends and general likes and dislikes of the people also change from time to time.  People are becoming more and more conscious about health and fitness.  The trends have changed a lot.  Any product that is launched into the market has to be launched keeping in mind the current trends and the thinking of the people.  This is because the trends and the ever-changing minds of the people greatly influence the success of any product.

Explain what is a brand? Using BOOST juice as an example, explain the conditions generally required for BOOST juice to be branded successfully. What do you consider are the most important benefits of branding for BOOST Juice?

A brand is the name or symbol that represents the product and that people recognize and are aware of.  To be branded successfully, BOOST juice needs to make sure that the target audience is attracted to the brand.  The brand represents drinks that are free from colours and preservatives.  This should target audiences that are more conscious about what goes into the food they eat.  The most important benefit of branding for BOOST juice is that it gained popularity.

The most important benefit of branding for BOOST Juice is the speed of its growth.  Since its opening in 2000, BOOST has been growing continuously as a brand.  It offers healthy fast drinks to its customers and it is the fastest growing juice brand in the whole of Australia.  It has managed to win over an astounded amount of customers which is still growing.  The company has made perfect use of pricing strategies and marketing policies. Branding has enabled BOOST to build brand equity and loyalty. Through this, it has been able to attract and maintain a great market share.

References

American Management Association. (2007). The Marketing Concept: its Meaning to Management. New Jersey: Kraus Reprint Corp.

Blakeman, R. (2007). Integrated Marketing Communication: Creative Strategy from Idea to Implementation. New York: Rowman & Littlefield Publishers.

Cant, M. C., Strydom, J. W. & Jooste, C. J. (2009). Marketing Management. Cape Town: Juta and Company Ltd.

Capon, N. & Hulbert, J. M. (2007). Managing Marketing in the Twenty-First Century. Ohio, US: Wessex Publishing.

Gregson, A. (2009). Pricing Strategies. London: Jaico Publishing House.

Onkvisit, S. & Shaw, J. J. (2008). International Marketing: Strategy and Theory. New York: Taylor & Francis Publishers.

Pride, W. M & Ferrell, O. C. (2010). Foundations of Marketing. New York: Cengage Learning.

Sääksvuori, A. & Immonen, A. (2008). Product Lifecycle Management. New York: Springer Publishers.

Shimp, T. A. (2007). Advertising, Promotion, and other Aspects of Integrated Marketing Communications. New York: Cengage Learning.

Stark, J. (2011). Product Lifecycle Management: 21st Century Paradigm for Product Realisation. New York: Springer Publishers.