Anglais Langue Et Affaires-1

8/6/2019 Anglais Langue Et Affaires-1

1/42

Plan

The marketing mixA marketMarket segmentation and targets market

Brands and distribution chancesConsumer behaviour

Marketing mix

The term marketing mix became popularized after Neil H. Borden publishedhis 1964 article the concept of the marketing mix. Borden began using theterm in his teaching in the late 1940s after James Cullinton had describedthe marketing manager as a mixer of ingredients. The ingredients in Bordensmarketing mix included product planning, pricing, pranding, distribution

channels, personal selling, advertising, promotion, packaging, display,servicing, physical handling, fact finding and analysis.E. Jerome Mc carthy later bought these ingredients into the four categoriesthat today had known as a four Ps:Product Price, Place & PromotionMost specialists distinguish between selling and marketing. According to theselling concept, resisting consumers have to be persuaded by hard sellingtechniques to buy none essential goods and services.

ProductIn short, products are sold rather than bought. The marketing concept, on the

contrary, assume that the producers task is to find ones and fill (wants) themIn other words you dont sell what you make; you make what will be bought.Here, the emphasis is put on the anticipation of the costumers needs. Whenmarketing their products, firms need to make a successful mix of the rightproduct, sold at the right price in the right place and using the suitablepromotion.

The marketing mix is the balance of marketing techniques required for sellingthe product. To create the right marketing mix, businesses have to meet thefollowing conditions:- The product has to have the right features for example it has to look good

and work well- It also has to be appropriated to the market segment; the firm is trying tosell to.- The term product refers to tangible physical product as well as services,e.g., safety, brand name, packaging.

In the past many firms were product-oriented which means that all theirefforts was focus on marketing the product. There was little flexibility for

Anglais Langue & Affaires 1


2/42

individual customers or segments of the market. Firms now tend to be market-oriented. This means that there are flexible and adaptable to the demand ofthe market. They aim to change the product as necessary to satisfy theircustomers.

PriceThe second element in the marketing mix is price.Price is simply the amount of money that consumers are ready to pay for aproduct or service. Pricing new products and pricing existing products requirethe use of different strategies. However the price must be right. Consumerswill need to buy in large numbers for companies to produce a healthy profit.The price of the product particularly the price compared to competitors is avital part of marketing.When pricing a new product, businesses can use either market penetrationpricing or market skimming pricing.Market penetration strategy involves establishing a low product price to

attract a large number of customers. By contrast a price skimming strategy isused when a High price is established in order to recover the cost of a newproduct development as quickly as possible.Manufacturers or computers and other technical items with Highdevelopment cost frequently used a market skimming strategy.In short market skimming means pricing High but selling less.

Promotion.Promotion is the third element in the marketing mix. In the context of themarketing mix, promotion represents the various aspects of marketingcommunication. That is the communication of information about the product

with the goal of generating a positive customers response. Promotion is acommunication process that takes place between a business and its variouspublics. Publics are the individuals and organisations that have an interest inwhat the business produces and offer or save. Thus in order to be effective,businesses need to plan promotional activities with the communicationprocess in mind. There are 4 basic Tools:Advertising, sales promotion, public relations and personal selling.

The main aim of promotion is to make the target group aware of theexistence of availability of the product.

PlaceThe fourth element of the marketing mix is place.So place refers to having the right product in the right location and at theright time. This part of the marketing mix is all about how the product will bedistributed. Current trends are towards shortening the chains of distribution.

Examples to illustrate the notion of marketing mix



3/42

The marketing mix of the Manchester united is one of some famousmultinational.

First of all, the product which includes providing and excellent football team,that plays and wins most of the time in an existing way. However there areother ingredients of the product including merchandising such as the sales ofshirts and a range of souvenirs. The product also relates to television rightsand Manchester united own television channels.Place, refers to Old Trafford where home games are played. Its products aresold across the globe through the club website and a range of other salesMedias.The club also engages in a range of joint promotional activities for examplewith the mobile phone company Vodaphone.

Other example, Kellogg's it sales a global products i.e. the same fordifferent markets regardless of existing local preferences.Kellogg's tries to change consumption patterns instead of adjusting them. Inother words, it offers one standardized products everywhere.

Coca cola, on the contrary has a different strategy, it changes the favouritedrink to conform to local taste just like McDonald's which sales hamburgerswithout ham in Muslim countries. The same differences in products strategies have also to be found inadvertising Rolex, for example, has the same advertising message for allmarkets.

The advantage can be lower costs.

NikeFounded as an importer of Japanese shoes, Nike has grown to be the world'slargest manufacturers of athletic footwear holding a global market share ofapproximately 37 %. In the US Nike's shoes are sold through about 20 000retail outlets and worldwide the company's products are sold in more than200 countries. Nearly, all of the items re manufactured by independentcontractors, primarily located overseas. In addition to its wide range of core(core product / core activity) athletic shoes and apparel, marketed under theflagship marketing brand, the company sales also footwear under the brands

such as Converse all stars.

Nike is one of the most popular and successful company known to the worldtoday.Its founder Bill Bowerman, a track coach and Philip Knight attract athletes,selected a brand mark today internationally known as the "Swoosh".Nike has relied on consistent innovation in the design of athletic product andheavy promotion to fuel its growth both in US and foreign markets. The



4/42

ubiquitous present of the Nike brand and its "swoosh" trade mark led to abacklash against the company in the late 20' century particularly in relationto allegations of low wages and poor working conditions at the company'sAsian factories."Just do it" that is the slogan that has one the attention of million of

consumers across the world.

It's one of the most efficient advertising campaigns of all time. The number 2leading had slogan at the XX century according to the advertising agemagazine. One the "just do it" campaign was launched Nike receivedthousands of letters from consumers who claim the campaign gave them theinspiration to do lot of things.Some were inspired them to get fit, go back to school or even to find Jesus!Finally, Nike's products are available in multi brand stores & the exclusive

Nike store across the globe.

In the international market, Nike sells shoes through independentdistributors, franchisees and subsidiaries.In conclusion, the marketing mix consist of the various element of marketingprogram, their integration and amount of efforts that a company can expendon them in order to influence the target market.Adapting a product to different market present both advantages anddrawbacks. The question is how to find a balance between the differentmarkets and to adapt the product to each market.

At a time of globalization, international marketing involves recognizing thatpeople all over the world have different needs. Companies like Gillette, CocaCola, and Bic have brands that are recognized across the globe. While manyof the products that these businesses sell are targeted at a global audienceusing a consistent marketing mix, it is also necessary to understand and takeinto account regional differences, hence, the importance of the internationalmarketing.

Organisation must understand that differences in values, customs, languagesand currencies will mean that some products will suit only some countries.As a result they will have to adjust their marketing mix. For example:

advertising in China and India will need to focus on local languages. Thepotential market size degree and type of competition, price promotionaldifferences, products differences, and consumption habits have to becarefully analyzed.



5/42

Market

What is the market?

A. Defining the market

All businesses operate in market but what is a market and how can it bedefined?The simplest way to define a market is to think of it as consisting of all thepeople or organisations that may have an interest in purchasing a company'sproducts or services.In other words, a market comprises (includes) all customers who have needsthat may be fulfilled by an organization opering. Yet, just having a need is notenough to define a market. So, other factors must be taken into account

when defining a market.The first factor is that a market consists of customers who are qualified tomake the purchase. Qualified customers are defined as those who:a) Seek a solution to a needb) Are eligible to make a purchasec) Possess the financial ability to make a purchased) Have the authority to make the decision

The second factor for defining a market rests with the company's ability toservice the market. If a company identifies a group of customers who arequalified to make purchases, they only become a market for the company

once the company is in a position to execute marketing activities designed toservice those customers.In marketing, the term market refers to the group of consumers ororganizations that is interested in the product, has the resources to purchaseit and is permitted by law and other regulations to acquire it.

The market definition begins with:

1. The total population and gradually narrows into2. The potential market i.e. those in the population who have interests

in acquiring the product.

3. The available market i.e. those in the total population who haveenough money to buy the product.

4. The qualified available market i.e. those in the potential market wholegally are permitted to buy the product.

5. The target market i.e. the segment of the qualified available marketthat the firm has decided to serve

6. The penetrated market i.e. those in the target market who havepurchased the product or service.



6/42

As a market consists of all the consumers who purchase a particular type ofgood or service, a market may be subdivided into separate segments each ofwhich can be considered to be a separate market in its own rights. It's veryimportant for a business to be able to define its own market so that it can

estimate and forecast the size of the market.Defining its own market will enable business:1. To identify the competitors in the market2. To break the market down into relevant segments3. To create an appropriate marketing mix to appeal to customers in the

market.

Some markets take place in a physical location e.g. a street market whereasothers may be virtual markets e.g. when people buy and sell through themedium of the internet. The size of the market can be calculated in term ofthe number of customers that make up the market or the value of sales in

the market.

A business can then calculate its market share in terms of the number ofcustomers it sells to or the total value of its sales.Markets are typically structured into segments. Primary segmentation isbetween customers buying totally different products. Further segmentationcan be based on demographic and psychographic factors

Demographic segment people buy clearly ascertainable facts such as theirsex, their age, size of family, income, location, educational background ...they are particularly used by decisions makers to plan a head and make more

accurent predictions. Demographic study which people buy andpsychographic study why people buy.Psychographic segment people buy something less clearly ascertainableoften disputable. Some categories of psychographic factors include socialclass, life style, behaviour, opinions, interest and values.

B. Types of markets

There are two types of markets: Business to consumers market (B2C market)

in which businesses sell to other consumers and Business to business market(B2B market) in which businesses sell to other businesses.However the most common distinction is between consumer market andindustrial market.

1. Consumer markets (B2C)

Consumer markets are the markets for products and services by individuals



7/42

for their own or family use. Goods bought in consumer markets can becategorized in several ways.

a) Fast Moving Consumer Goods (FMCGs), these have high volume andlow unit value fast repurchase. Examples include ready made meals, bakedbeans, news papers...

b) Consumer durables, these have low volume but high unit value.Consumer goods can be divided into:White goods e.g. fridge-freezers, cookers, dishwaters, microwaves...Brown goods e.g. DVD players, game consoles, personal computers...Soft goods are similar to consumers durables except that they wear outmore quickly and therefore have a shorter replacement cycle; examplesinclude cloth, shoes...Services e.g. hairdressing, childcare...

2. Industrial or Business market (B2B)

Industrial markets involve the sales of goods between businesses. These aregoods that are not aimed directly at consumers. Industrials markets include

a) Sailing finished goods, examples include office furniture, computersystem.

b) Sailing raw materials or components, examples include steel, coal,gas, timber

c) Sailing services to businesses, examples include waste disposal,security, accounting, and legal servicesIndustrial markets often require a slightly different marketing strategy andmix. In particular a business may have to focus on a relatively small number

of potential buyers e.g. the IT director responsible for ordering computerequipment in a multinational group.

C. Consumer markets VS Industrial or business markets:

1. Characteristics of a consumer market

In a consumer market every consumer has equal value and represents asmall percentage of revenue. Sales are made remotely; the manufacturerdoesnt meet the customer. Products are the same for all costumers. The

service element is low. Purchases are made for personal use, image isimportant for its own sake. The purchaser is normally the user and costs arerestricted to purchase costs. The purchase event is not subject to tender(appel doffre) and negotiations. Finally the exchange is one of transactionsand there is no long-term view.

2. Characteristics of industrial or business to business markets



8/42

In a B2B market there are a small number of customers that account for alarge percentage of revenue. Sales are made personally and themanufacturer gets to know the customers.Products are customised for different customers and service is highly valued.Purchase costs may be a small part of the total costs of views. The purchase

event is conducted professionally and includes tender and negotiations.There is the potential for long-term value.

Conclusion

For both consumers and B2B market, the foundation of marketing is based onknowing the customers. However, in consumer market, the customer isremote at arms length (= no personal contact) and consequently we usemass communication and distribution pools.

In a B2B the customer is far closer. You have far more knowledge ofcustomers though personal contact. For the consumer market, the productand its packaging are for the greatest importance in the marketing mix.

For B2B market, although product quality is important, this has to bematched by quality of supply i.e. delivering the product when it is needed,provide service and support and strategic flexibility within the relationshipcontext.The role of marketing is limited to creating promotional materials, attendingexhibition, and running seminars. In these circumstances marketing mayhave no strategic role in the business.

Market segmentation and Target market

I. Market segmentation

A. What is the market segmentation and why is it necessary for

businesses to segment their markets?Market segmentation is the process of dividing a total market into marketgroups consisting of people who have relatively similar product needs.Another definition could be: market segmentation is the process thatmarketers use to divide up the market into smaller segments that can beefficiently addressed.



9/42

Market segmentation is the identification of portions of the market that aredifferent for another.Segmentation allows the firms to better satisfy the needs of their potentialcustomers.There are several important reasons why businesses attempt to segment

their market.- It allows them to better match their customers needs. Customersneeds differ so creating separate offer to each segment makes senseand provide customers with better solutions.

- It allows them to increase their profits. Customers have differentdisposable income so they react differently to price increases. Bysegmenting markets businesses can raise average prices andsubsequently in hands profit.

- Inter provide them with better opportunities of growth. Marketsegmentation can build sales : for example customers can beencourage to trade up after being introduce to a particular product

with an initial lower price product.- It allows them to adapt to changes in customers circumstances: forexample customers grow older form, families change jobs, getpromoted, or change their buying patterns.

So by marketing products that appeal to customers at different stages oftheir life, a business can retail a customer that might otherwise switch tocompeting products and brands.Finally it allows them to target their marketing communication.

The need for market segmentation

Businesses need to deliver their marketing message to a relevant customersaudience. If the target market is too broad there is a strong risk that the keycustomers are missed. By segmenting markets the target customers can bereached more often and at a lower cost.

The marketing concept calls for understanding customers and satisfying theirneeds better than their competition. But, different customers have differentneeds and its almost impossible to satisfy all customers by treating themalike. Mass marketing refers to treatment of the market as a homogeneousgroup and offering the same marketing mix to all customers.

So mass marketing allows economies of scale to be realized throughproduction, mass distribution and mass communication.The drawback of mass marketing is that customers needs and preferencesdiffer and the same offering is unlikely to be viewed as optimal by allcustomers.

Targeting marketing, on the other hand, recognizes the diversity ofcustomers and doesnt try to satisfy all of them with the same offering.



10/42

The first step in target marketing is to identify different market segment andtheir needs.

B. Requirements of market segments

In tradition to having different needs, markets segments should be evaluatedagainst the following criteria in order to be efficient:

- Identifiable i.e. the differentiating attributes of the segments must bemeasurable so that they can be identified.

- Accessible i.e. the segment must be reachable throughcommunication and distribution channels

- Substantial i.e. the segments should be sufficiently large to justify theresources required to target them.

- Unique needs i.e. in order to justify separate offerings the segmentsmust respond differently to the marketing mixes.

- Durable, the segments should be relatively stable to minimise the costof frequent changes.

So, good market segmentation will result in segments that are internallyhomogeneous. That is as similar as possible within the segment andexternally heterogeneous that is as different as possible between segments.

C. Bases for segmentation in consumer markets

Consumer markets are driven by people motivation to spend disposableincome. In consumer markets, retailers and marketers sell goods that are

consumed in everyday use. Peoples motivations and actions fuelled themarket. In order to market consumer goods, companies have to segment themarket and tap into the minds of their consumers.Unlike business to business market, consumer markets are driven by thecustomers buying habits and motivation to spend money.Consumer markets can be segmented on following consumerscharacteristics:

- demographic- psychographic- geographic- behaviouralistic

a. Geographic segmentation

It consists in dividing a market into different geographical units such ascountries, states, regions and towns. It can also include other variables, sizeor metropolitan areas, segmented according to size of population. Populationdensity often classified as urban, suburban or rural.



11/42

ClimateAccording to whether patterns, common to geographic region

b. Demographic segmentation

Characteristics of consumers market based on demographics includedifferences in gender, age, ethnic background, income, occupation,education, household size, religion, generation, nationality and even socialclass. For example, companies may identify the age of their consumers in the18 to 24, 25 to 34, 35 to 64, etc Companies often identify these demographic characteristics through marketresearch surveys used to discover which demographic group comprises themajority of their group base. Companies can then target their advertisingtowards these demographic groups.

c. Psycho graphic segmentation

Consumer market characteristics can also be psychographic in nature.Psychographic characteristics of consumers include interests, activities,opinions, values and attitudes. Obviously many magazines had geared(orienter) towards consumers interests.For example, pre-natal magazines target expectant mothers who areinterested in learning more about carrying for a baby. A company may betterunderstand consumers opinions and attitudes after conducting a focus groupand used that information to tailor advertising of marketing campaign.

Consumers values can pertain to how a group of individuals fells aboutcertain social issues which can be of interest to non profit or charityorganization. In other words, psychographic segmentation groups customersaccording to their life style.

d. Behavioural segmentation

Behaviour characteristics can be garnered (collect) through marketingresearch. Behavioural characteristics of consumers market include productusage rates, brand loyalty, user status or how long they have been acustomer and even benefits that consumers seek. Companies like to knowhow often consumers visit stores or use their products. Company marketingdepartment usually try to distinguish between heavy, medium and light user,whom they can target through advertising.

To sum up behavioural segmentation is based on actual customer behaviourtowards products. Variables include:

- Benefits sought for example quality service economy



12/42

- Usage rate, light user, medium user, heavy user- Brand loyalty- User status, potential, first time, regular- Readiness to buy- Occasion e.g. holydays and events that stimulate purchase

Behavioural segmentation has the advantage of using variable that areclosely related to the product itself. Its a good starting point for marketsegmentation.

D. Bases for segmentation in industrial markets

In contrast to consumers, industrial customers tend to be fewer in numberand purchase in larger quantities. They evaluate offering in more details andthe decision process usually involves more than one person. Thesecharacteristics apply to organizations such as manufacturers and service

providers as well as resellers, governments and institutions. Many of theconsumer market segmentation can be applied to industrial market.Industrial market can be segmented on characteristics such as location,company type, and behavioural characteristics

a. Location

In industrial markets, location may be important in some cases as thecheaping cost can influence the buyers decision. In some industries, firmstend to cluster together geographically and therefore may have similar needswithin regions.

b. Company type

Business customers can be classified according to:- company size- industry- decision making unit- purchase criteria

c. Behavioural characteristicsIn industrial market, patterns or purchase behaviour can be a basis forsegmentation. Such behavioural characteristics may include usage rate,buying status, purchase procedures (sealed bid: sousmission sous pli cache)



13/42

II. Target market

A. Attractiveness of a market segment

Two important factors to consider when selecting a target market segmentare the attractiveness of the segment and the fit between the segment andthe firms objectives resources and capability.In determining whether a segment is worthy of deal with a target market, themarketer needs to address the following questions:

- Size of the segment i.e. is the market large enough to support themarketers objectives

- Growth rate of the segment i.e. is the segment showing signs ofgrowth.

- Competition in the segment- Brand loyalty of existing customers in the segment

- Attainable market share given promotional budget and competitorsstrategy

- Required market share to break even- Sales potential of the firm in the segment- Expected profit margin in the segment

Market research is instrumental in obtaining this information. Marketresearch involves connecting, recording and analysing all the availableinformation which will help a business to understand its market. Marketresearch sets out to answer the following questions:

- Who makes up the target audience?- What do they want?- When do they need it?- Where the product does sells best?- How can it be taken to customers?- What do they want or need it?- What are the competitors doing?- How is the market changing?

B. Suitability of market segments to the firms

Market segments should be evaluated in relation to the firms objectives.Here are some factors that must be taken into account. How can the firmoffer superior value to the customers in the segment? What is the impact ofserving the segment and the firm image? Does the firm have access todistribution channel required to serve the segment? Does the firm have thenecessary resources to serve the segment?



14/42

C. Target market strategy

There are different target market strategies that may be followed. Targetingstrategies can categorized as one of the following

a. Single segment strategy

Single segment strategy also known as concentrated strategyOne market segment not the entire market is served with one marketing mixA single segment approach often is a strategy of choice for smallercompanies with limited resources.

b. Selective specialisation

Selective specialisation is a multiple segment strategy also known asdifferentiated strategy. Different marketing mixes are offered to differentsegments. The product itself may not be different. In many cases, only thepromotional message or distribution channels vary.

c. Product specialisations

The firm specializes in a particular product and tailors it to different market

segment.

d. Market specialisation

The firm specializes in serving a particular market segment and offers thatmarket different products.

e. Full market coverage

The firm attempts to serve the entire market. The coverage may be achievedby means of either a mass market strategy in which a single undifferentiated

marketing mix is offered to the entire market or by a differentiated strategyin which a separate marketing mix is offered to each segment.

Conclusion:A firm that is seeking to enter a market and grow should first target the mostattractive market segment that matches its capabilities. Once, it gains afoothold, it can expand by pursuing a product specialization strategy,tailoring the product for different segments or by pursuing a market



15/42

specialization strategy and offering new products to existing marketsegments.

Products, Brands and distribution channels

A. Products

1. Introduction

A product is defined as anything that is capable of satisfying consumersneeds Both the definitions include both physical product e.g. cars, washingmachine, DVD players as well as services, banking, insurance. The consumerproducts industry can be divided into 4 groups:- Beverages

- food- Toileteries- Cosmetics- Small appliances

Most firms offer products that fit primarily into only one of these groups. Alsoa firm may have brands that cross the lines.Consumers products are the bases of the modern consumer economy. Inorder to be efficient, consumers products companies must implement anefficient strategy in order to

a) keep up with constantly changing consumers preferencesb) design, develop and test new products quicklyc) design, packaging with high consumer appeald) determine product and manufacturing processes and costse) eliminate ideas that have not going to meet markets needsf) move product that have a high probability of success into volume

production

Of course all these activities must be done while complying with country,state and local regulation.Besides, manufacturers have to differentiate their products from thecompetition. The process by which manufacturers distinguish their productsoffering from the competition is called branding.For most companies, brands are not developed in isolation; there are parts ofproduct group. A product group or product line is a group of brands that areclosely related in terms of their functions and the benefit they provide. Theyare 2 main types of product brands:

- manufacturer brands- own-label brands



16/42

Manufacturer brands are created by producers and use their chosen brandname. The producer has the responsibility for marketing the brand, byensuring its distribution and gaining consumer brand loyalty. Good examplesinclude Microsoft and Mercedes.

As for own-label brands they are created and owned by distribution. Goodexamples include Tesco and Sainsburrys.

2. Classifying products

Products can be classified depending on who the final purchaser is.a) Consumer products made for the final consumer for personal family

and household use.b) Business to business product to satisfy the goals of the organization.

The same product can be purchase by both for example a computer for the

home or the office.In addition, to categorizing by type or product offering, most productsintended for consumers use can be further categorize by how frequently andwhere they are purchased.

(Seulement dans la premire catgorie : consumer products !)

- Convenience products: these are products that appeal to a very largemarket segment. They are generally consumed regularly andpurchase frequently. Examples include most household items such asfood, cleaning products and personal care products. Because of the

high purchase volume, pricing per item tends to be relatively low andconsumers often see little value in shopping around since additionalefforts yields minimal saving. From the marketer perspective, the lowprice of convenience products means that profit per unit sold is verylow. In order to make high profit marketers must sell in large volume.Consequently, marketers attempt to distribute these products inmass, through as many retail outlets as possible. These are productsthat are readily available. Low priced heavily advertised and which arepurchased quickly and often. Finally, packaging is important to sell theproduct.

- Shopping products: these are products consumers purchase andconsume on a less frequent schedule compared to convenienceproducts. Consumers are willing to spend more time locating theseproducts since they are relatively more expensive that convenienceproduct. And because they may possess more additional andpsychological benefits for the purchaser.Consumers spend more time comparing prices, quality and style.Examples include many closing products, personal services, electronic



17/42

products and household furnishings. Because consumers arepurchasing less frequently and are willing to shop to locate theseproducts, the target market is much smaller than that of conveniencegoods. Consequently, marketers are more selective when choosingdistribution channels to sell their products.

- Speciality product: these are products that a consumer will make aspecial effort to locate. In many cases, consumers know in advancewhich product they prefer and will not shop to compare products. But,they may shop at retailers that provide the best value. Examplesinclude high-end luxury automobiles, expensive champagne andcustomers are ready to pay the premium if necessary and will notaccept substitute.

- Unsought products: these are products whose purchase is unplannedby the consumer but occur as result as marketer actions. Such

purchase decisions are made when the customer is exposed topromotional activity such as a sales person persuasion or purchaseincentives like special discounts. In short, unsought goods areproducts consumers are unaware off and that they do not necessarilythink of purchasing. Examples include umbrellas, encyclopaedia,double glazing (double vitrage). Once, a company has developed aproduct, it has to decide on how to price it, how to promote it andwhere to sell it.

c) Marketing mix

a) Price:It is not easy for a company to set the price of a product. This is a trickydecision and the stakes can be high. Before deciding on it pricing method,the company has to define its objectives. Some of the most common are toachieve a certain overall profit target, to increase sales, to get a bigger shareof the market, to achieve high profits on a particular product, to discouragecompetition, to promote a particular image and finally to accomplish socialand ethical goals.

b) Promotion

Promotion is persuasive communication that motivates people to buy acompanys products. It make take the form of advertising, personal selling,publicity, sales promotions, reseller support or a combination of the followingactivities.Advertising which is any paid form of impersonal presentation of goods,services or ideas using a mass communication medium.Personal selling which is the use of person to person communication to assistor persuade a prospect to buy. Its used especially when the number of buyer



18/42

is limited and the product is expensive and complicated.Publicity: is any unpaid media coverage of news about an organization andits products. Publicity may of course be positive or negative. Positive publicitymay generate far more sales than pages of paid add.Sales promotion: is a direct inducement that motivates someone to purchase

a product. It covers a wide variety of activities such as exhibiting at tradeshows, displaying material at retail location and giving away coupons thatoffer a discount.

c) PlaceThere is many ways in which products can be distributed to customers. Thechannel of distribution may include own seller who sell products to otherfirms for resell or for industrial use and retailer who sell directly to the public.Here are a few examples of retail outlets that will be studied in more detail inthe chapter on distribution.Department stores, these are large stores that offer a large variety of high

quality merchandise (Macys US- Harrods GB)Speciality stores, shops offering particular type of goods such as childrenclothing. Supermarket, large departmentalized stores specializing mainly infoods and household products.Hypermarkets are extremely large supermarket where a wide range ofproducts can be board.Discount stores, stores selling limited range of goods had prices 30% lowerthan supermarkets.Malls are completely closed shopping areas.Mail order firms are companies selling goods through catalogues andcheeping them directly to customers by mails.

3. Product mix

The product mix of a company consists of all the products offered by aparticular organization. Its made of both product line and individualproducts. A product line is a group of products within the product mix thatare closely related. Either because their functions in a similar manner aresold to the sales customers group, are marketed towards the same outlets orfall within given price ranges. Offering a wide product mix provideopportunity to increase the amount of goods sold to each customers. But as

costs associated with the variety of resources required to support it.

4. Product positioning and product repositioning

No matter which target marketing strategy is selected the overall marketingstrategy should involve the process of positioning the firm offerings in waysthat will appeal to the targeted customers. Product positioning refers to a



19/42

place, a product offering occupies in consumers minds and importantattributes relative to competing offerings how new and current items in theproduct mix are perceived in the minds of the consumers. Therefore,reemphasizing the importance of perception.The role of positioning is

a) To strengthen the power of messages directed at customersb) To target a particular segmentc) To ensure that the product is differentiated in the mind of customers.d) To decide on the ground on which to competee) To analyse repositioning possibilities

Product positioning involves tailoring and entire marketing program includingproduct attributes, images and price as well as packaging, distribution andservice to better meet the needs of consumers within a particular marketsegment.In order to position a product effectively, the business must identify theattributes that are most important to the customers in the segment. And

then, develop an overall marketing strategy that will attract consumersintention. Positioning can be usefully applied during the earliest stages ofproduct design, when a company first identifies who its target customers willbe, in terms of demographic, geographic and behavioural characteristics.Successful position strategy required:

a) Clarity : the message must be clearb) Consistency : the message contain in promotion, in packaging and in

the product itself should be consistentc) Credibility : the message has to be believabled) Competitiveness: the product should offer benefits that rivals do not.

To position successfully the marketer must have thorough knowledge of thekey benefit sough the market. Obviously the more effort the marketerdevotes to the segmentation, the more likely they will know the benefitssought by the market.Once known the marketer must tailor marketing efforts to ensure theyofferings satisfy the most sought after benefit and communicate to themarket in a way that differentiate the marketer offering from competitors.

Repositioning can be defined as changing the position of the product in themarket. Its aim is

a) to extend the product like cycle

b) to move into a new market segmentc) to adjust to changes in society and in social attitude

5. Product life cycle

The life of a product is the period over which it appeals to customers. Thesales performances of any product rises for nothing when the product is



20/42

introduced into the market, reaches a pick and then, declines to nothingagain.The life cycle of some product may last for hundred of years while for other itmay be a few months. If a firm once to prolong the life cycle of its owndistinct product it is essential to invest well in the development of the

product and in the promotion. These may mean that a lot of work is put intothe product before its launched. Once the product is on the market it may benecessary to periodically inject new life into it. These can be done in severalways including product improvement, extending the product range,improving promotion, etc.The stages through which individual products develop overtime arecommonly known as the product life cycle.The classic product life cycle has 4 stages.

a) Introduction stage

When the product is introduced sales will be low until customers becomeaware of the product and its benefits. Some firms may announce the productbefore it is introduced but such announcement often alert competitors andremove the element of surprise. Advertising costs are usually high during thisstage in order to rapidly increase customers awareness of the product and totarget the early adopters.During the introduction stage, the firm is likely to have additional costsassociated with the initial distribution of the product. This higher cost couplewith a low sales volume usually make the introduction stage a period ofnegative profit. During the introduction stage, the primary goal is to establisha market and build primary demand for the product.

b) Growth stage

The growth stage is a period of rapid revenue growth. Sales increase as morecustomers become aware of the product and its benefits. And additionalmarket segments are targeted. Once the product has been proven a successand customers begin asking for it, sales increase further as more retailersbecome interested in distributing the product. The marketing team may

expand the distribution at this point. When competitors enter the market,often during the later part of the growth stage, they may be pricecompetition and or increased promotional cost in order to convinceconsumers that the firms product is better than that of the competition.During the growth period, the goal is to gain consumers preferences andincrease sales.

c) Maturity stage



21/42

The maturity stage is perhaps the most common stage for all markets. Its inthis stage that competition is most intense, as companies fight to maintaintheir market share. Competition may result in decreased market share and orprice. The competing product may be very similar at this point, increasing the

difficulty of differentiating the product. Sales promotions may be offered toencourage retailers to give the product more shelf-space over competingproducts so as to incite competitors customers to switch and convert nonusers into customers. During the maturity stage the primary goal is tomaintain the market share and expand the product life cycle.

d) Decline stage

In the decline stage, the market is shrinking reducing the overall amount ofprofit that can be shared amongst the remaining competitors. Eventuallysales begin to decline as the market becomes saturated. If the product has

developed brand loyalty, the profitability may be maintained longer.Ultimately, depending on whether the product remains profitable thecompany may decide to withdraw it to the market.

Conclusion

Research suggests that customers go through five stages in the process ofadopting a new product or service.

1) Awareness, so the customer becomes aware of the product but lacksinformation about it

2) Interest, the customer seeks information about the new product3) Evaluation, the customer considers whether trying the new product

make sense.4) Trial, the customers tries the new product on unlimited scale to assess

the value of the product.5) Adoption, the customer decides to make full or regular use of the

product

A marketing team looking to successfully introduce a new product shouldthink about how to help customers move through the five stages.

Brands

A Brand is a unique and identifiable symbol name, association or trade markor other visual element which serve to differentiate competed products orservices. In short, a brand is a name or symbol used to identify the source ofa product. Brands are usually protected from use by others by securing a



22/42

trade mark or service mark from an authorized agency usually a governmentagency.Before applying a trade mark or a service mark you need to establish thatsomeone else hasnt already obtained right on your name. Although theapplicant can do the searching himself, its common to hire a law firm that

specializes in doing trade mark searches and managing the applicationprocess, which in a country like the US can take about a year. Once theapplicant knows that no one is using it, he can then begin to use his brandname. Building a strong brand is crucial to sustaining customers loyalty andtrust. Yet protecting a company and its product is difficult in a world in whichindividuals and companies participate in piracy and counterfeiting activities.There are two main types of brands: manufacturer brands and own labelbrands.

1. Manufacturer Brands

Manufacturer brands are created by producers and bear their chosen brandname. The producer is responsible for marketing the brand and the brand isowned by the producer. By building their brand names, manufacturers cangain wide spread distribution for example by retailers who want to sell thebrands and build customers loyalty.

2. Own label brands

Own label brands are created and owned by businesses that operate in thedistribution channel, often referred to as distributors. Often these distributorsare retailers but not exclusively. Sometimes the retailers entire product

range will be owned label. However, most of the time, the distributor will mixown label and manufacturer brands. The major supermarkets, e.g. Tesco,Asda, Sainsburys, Walmart are good examples of this. Own label branding iswell carried out can often offer the consumers excellent value for money(rapport qualit / prix) and provide the distributors with additional bargainingpower when it comes to negotiated prices and terms with manufacturerbrands. There are many advantages to businesses building their brand andthis includes higher prices, higher profit margins, better distribution, andcustomer loyalty. Businesses that operate successful brand are also muchmore likely to enjoy higher profit and consumers are rarely prepared to pay apremium for products that simply deliver core benefits. Successful brand are

those that deliver added value in addition to the core benefits (benefices thatare delivered to all customers). These added values enable the brand todifferentiate itself from the competition. When its done well, the customerrecognizes the added value in the product and chooses the brand inpreference.



23/42

3. Brands and brand names

Marketing theory suggests that there are three types of brand names.

a) Family brand names

A family brand name is used for all products. By building customers trust andloyalty to the family brand name, all products that use the brand can benefit.Good examples in the food industry include Heinz, Kelloggs; of course theuse of a family brand can also create problems if one of the products getsbad publicity or is a failure in a market. This can damage the reputation ofthe whole range of product.

b) Individual brand names

Lets take the example of Heinz. Heinz is a leading global food manufacturerwith a very strong family brand. However it also operates many well knownindividual brand names like Farteys (market baby food), Linda Mac Cartneyfoods (market vegetarian meals) and Weight Watcherss foods (market dietfoods and supplement)There are several reasons why a brand needs a separate identity unrelatedto the family brand name. First, the producer may be competed in a newsegment where failure could harm the name family brand name. Second, thefamily brand name may be positioned inappropriately for the target marketsegment. Third element, the brand may have been acquired in other words ithas already established itself as a leading brand in the market segment. Thefact that it has been acquired by a company with a strong family brand namedoes not mean that acquired brand has to be changed.

c) Combination brand names

A combination brand name brings together a family brand name and anindividual brand name. The idea is provide some association for the productwith a strong family brand name but maintaining some distinctiveness sothat customers know chat theyre getting.

Examples of combination brand name include Microsoft XP, Microsoft Officein personal computing software and Heinz tomato ketch up and Heinz Petfoods.

4. What are the features of a good brand names



24/42

Brand names should be chosen carefully since the name conveys a lot ofinformation to the customers. A good brand name should:

- Evoke positive association- easy to pronounce or remember

- suggest product benefits- be distinctive- use numeral when empathising technological features- not infringe register brand name- be easy to translate into all languages in markets where the brand will

be used

5. Building a brand

There are several main factors that contribute to the building of successful

brands.

a) Q uality

Quality is a vital ingredient of a good brand. Researches confirm that, higherquality brands achieve a higher market share and an higher profitability thantheir inferior competitors.

b) P ositioning

Positioning is about the position the brand occupies in a market, in the minds

of consumers.The positioning can be achieved through several means including brandname, image, service standards, product guarantees, packaging and the waythe product is delivered.

c) R e-positioning

Re-positioning occurs when a brand tries to change its market position toreflect a change in consumers taste.

d) C ommunication

Communication also plays a key role in building a successful brand. All theelements of the promotional mix need to be used to develop and sustainconsumers perceptions.

e) First mover advantage



25/42

Business strategies often talk about fist mover advantage in terms of brandsdevelopment. By first mover, they mean that its possible for the firstsuccessful brand in a market to create a clear positioning in the minds oftarget customers before the competition enters the markets.

f) Long term perspective

It refers to the need to invest in the brand over the long term. Since buildingcustomers awareness, communicating the brands message and creatingcustomer loyalty takes time. This means that management must invest in abrand perhaps at the expense short term profitability.

6. Brand equity, brand image and brand extension

a) Brand equity

Brand equity is an intangible asset that depends on associations made by theconsumer. It refers to the value of a brand. Its based on the extent to whichthe brand has a high brand loyalty and strong product associations. Brandequity also includes other intangible assets such as patens, trade marks andchannel relationships. Strong brand equity provides the following benefits:

- It provides a more predictable income stream- It increases cash low by increasing market share reducing promotional

cost and allowing premium pricing.- Brand equity is an asset that can be sold or leased.

b) Brand image

It refers to the set of believes that customers hold about a particular brand.These are important to develop since a negative brand image can be verydifficult to shape off.

c) Brand extension

Brand extension makes use of the reputation of the existing products orservices in order to increase the sales of both the new products and services

and at the same time promote the existing products. A successful brandhelps a company enter a new product category more easily. In a more andmore competitive environment, brand managers are looking for ways toextend their portfolios and at the same time decrease the cost of the newproduct introduced as well as limits the risks of products failures. One of themost popular ways is to put a new product created in another category underthe name of an existing brand and this is called Brand extension.



26/42

Conclusion

Brand names and the advertising that supports them are especiallyimportant as signals of quality and consistency because a brand is a valuable

assets, it acts as a disincentive to provide poor qualityFor many consumers goods and some producers goods companies theirbrand is their most important asset. Brands fulfil multiple roles mostimportantly a brand provides a guarantee by the producer to the consumer ofthe quality of the product. At its most base, a brand identifies the producer ofa product. This ensures that the producer is legally and morally accountablefor the product supply to the market.Further, the brand represents an investment that provides an incentive tomaintain quality and customer satisfaction. The traditional role of the brandas the source of reliability has become of particular importance of e-commerce. Internet transactions are characterized by the anonymity of

buyers and sailors like an experience between most buyers and sailors andlack of government regulation. As a result well established players in e-commerce, aol, amazone, Microsoft, EBay and Yahoo provide substantialbrand equity in terms of reducing buyers perceived risks. By contrast thevalue conferred is less a guarantee of reliability and more embodiments ofidentity and life style. For these brands advertising and promotion are theprimary means of re-enforcing customers perceptions.



27/42

Distribution

I. The role of the distribution system

Product decisions may be the most important of all marketing decisions sincethey lead directly to the reasons why customers decide to make thepurchase. But, having a strong product does little good if customers are notable to easily and conveniently obtain it. With this in mind, return to thesecond major marketing decision area: distribution.Distribution decision focuses on establishing a system that allows customersto gain access to un-purchased marketer products. However marketers mayfind that getting to the point at which a customer can acquire a product iscomplicated, time consuming, and expensive. The distribution system mustbe effective, the good or service must be delivered to the right place, in theright amount, in the right conditions and at the right time for the right cost.However achieving these goals takes considerable efforts. Distributiondecisions are relevant for all types of products physical goods as well as

digital goods or services. In fact, while the internet is playing a media role inchanging product distribution and its perceived to offer more opportunitiesfor reaching customers, online marketers face the same distribution issue asoff line marketers.In order to facilitate an effective distribution system, many decisions must bemade including:

- Assessing the distribution channels for getting products to customers- Determining weather resellers networks it needed to assist in a

distribution asset.- Ranging a reliable ordering system that allows customers to place

orders

- Creating a delivery system for transporting the goods to thecustomers.- Establishing facilities (infrastructures) for product storage.

As the distribution channel, is made up of all the activities that help amarketer create and deliver products to the customer, the activities involvein the channel are wide and varied, though the basic activities revolvedaround these general tasks:



28/42

- Ordering- Handling and cheeping- Storage- Display- Promotion

- Selling- Information feedback

As a result choosing the right distribution channel is critical to a business.There are several factors affecting how a business may decide on the mostappropriate distribution channel:

- Profits and sales, which channel will maximize sales and profits usingintermediaries such as agents, retailers and wholes sailors can helpdistribute the companys products on a wider scale. But can also leadto reduced profit levels.

- Product or service, firstly perishable products such as certain foods

e.g. fruits usually require direct sale because of their short shelf lives.The s principal applies fragile products to reduce the amount oftransportation and handling. Secondly, services need to be sold director through intermediaries that provides a strong link between theconsumer and the business such as direct mails, e-commerce ortelemarketing Thirdly, products of low value that are manufactured inhigh quantities are usually distributed by whole sailors. This way itreduces the issue of storage as own sailors will buy in bulk.

- The key question are how convenient is it for the consumer to buy theproduct : who is the target audience

- Competition, how does direct competition sells their product, is it

enough to follow.

II. Retailing

1) D efinition

Retailing is defined as selling products to consumers for their personal use.Retailer is a reseller from which a consumer purchases products. In the USalone, there are 1 100 000 retailers according to the US Census of RetailTrade. Retailers operate outlet that trade directly with household customers.Retailers can be classified in several ways:

- Type of goods being sold e.g. clothes, furniture, grocery - Type of service e.g. hairdressing, - Size : corner shop, convenience store, super store

As a reseller, the retailer offers many benefits to suppliers and customers.For consumers, the most important benefit relate to the ability to purchasesmall quantities of a wide assortment of products at prices that areconsidered reasonably offered able. For suppliers, the most important



29/42

benefits relate to offering opportunities to reach their target market, buildproduct demand through retail promotions and provide consumersfeedbacks to the marketers. The most basic characteristic of a retailer its hisretail mix i.e. the elements used by retailers to meet their customers needs.Four elements of the retail mix that are particularly useful for classifying

retailers are:- the type of merchandise sold- the variety of assortment of merchandise sold- the level of customer service- the price of the merchandise

2) Major stores types: department stores, variety stores,grocery stores and hypermarkets, speciality stores,convenience stores, online stores.

Department stores are retailers that provide a broad variety and deepassortment of products and services. They offer considerable customersservices and are organized into separated department for displayingmerchandises. Each department within the store is allocated a specific sellingspace. The major department are women, men and children clothing andaccessories, home furnishing and furniture, kitchenware and small

appliances. Recently, these stores have incorporated additional activities toattract customers e.g. restaurants, coffee shops, hair dressing, weedingservices, etc.(Macys USA, Harrods GB, Gallery Lafayette FRANCE)

Variety stores, they tend to be slightly smaller and more specialized offeringreduced range of merchandise. Theyre appeal tend to be middle market andselection of traditional service is limited: usually, just coffee shops. Thesestores are characterized by low cost facilities, self service payment; theyappeal to large heterogeneous markets especially price conscious customers.

Grocery stores and HypermarketsGrocery stores sell pre-packaged right food product as well as perishableitems like produce dairy and meat product. Grocery stores also typically sellnon food items such as stationary supplies, cookware, health and beautyproducts and greeting cards. Larger grocery stores may include features likefast food restaurant and flower shops and modern conveniences like internetcafs.



30/42

Hypermarkets are 300 000 square foot larger than 6 football fees and stockover 50 000 items.Annual revenues are typically 100 000 000 $ per stores. Hypermarkets werecreated in France after WW2 and they have not been successful in the US fora variety of reasons including less restrictive land laws, competition, and

store size. Hypermarkets are just a bigger version of the normal grocerysuper store using size to give a wider product range. They are few genuinehypermarkets in the UK. In France and Germany, which are bigger countrieswhere real estate is generally cheaper, they are much more common.

Speciality stores sell specific types of merchandises such as jewellery,electronic equipment or toys. The speciality store may be further divided intodifferent categories within the speciality. For example, toy store may haveseparate department for video games, dolls and model cars. Speciality storemay be small independently owned operation or larger stores that have partof retail chain.

Convenience stores provide a limited variety of assortment of merchandisesat a convenient location in 2000 to 3000 foot stores with a speedy check out.They are modern versions of the neighbourhood Mom and Pop stores. Oftencalled the corner shop, these stores sell essential groceries, alcoholic drinks,drugs and newspapers outside normal shopping hours. However, as mostgrocery stores have extended their opening hours 24hours a day, 7 days aweek, convenience stores are especially on endangered species. The onlyreal advantages they have are proximity and friendly service. In the US,almost all convenience stores sell gasoline which accounts for over 55% ofannual sales.

Online storesWith the advent of the internet age, online stores allow shoppers to makepurchases from home or at the office by using a computer. Customersbrowse through the retailers online catalogue which features photos of themerchandise and return product description.When the shopper makes the selection, he pays for the merchandise with acredit card or by using an online payment service. The merchandise is thencheeped to the shoppers home.

3) Ways to categorize retailers : target market served,products offerings, pricing strategy, promotional focus,distribution method, service level, ownership

Retailers can be categorized according to the following criteria:- target market served- product offering



31/42

- pricing strategy- promotional emphasis- distribution method- service level- ownership

Target marketThe target market served can be divided into mass market, speciality marketand exclusive market.

Mass marketMass market retailers appeal to the largest market possible by sailingproducts of interests to nearly all consumers. The competition amongretailers in such a large market is often fears.

Speciality marketRetailers, categorized as servicing the speciality market, usually target

buyers looking for products, having certain features that go beyond massmarket products such as customers who required more advanced productsoptions or higher level of customer service.

Exclusive marketThis market targets customers who are willing to pay a premium for featuresfound in very few products and for highly personalised services. Since thistarget market is small, the number of retailers addressing this market withina given geographic area may also be small.

Pricing strategy

Retailers can be classified on the basis of their general pricing strategy. Theymust decide whether their approach is to use price as a competitiveadvantage or to sick competitive advantage in none price ways. Retailers inthis category have 3 different approaches:

- Discount approaches, discount retailers are best known for sellinglow priced products that have a low profit margin. To makeprofits, these retailers look to sell in high volume

- Competitive pricing, these retailers often operate in specialitymarkets. Higher quality products nicer store sitting are used tocreate higher value for which the customers will pay more.

- Full price pricing, these retailers are likely to sell in lower volumes

than discount or competitive pricing retailers. The profit marginfor each product are much higher

Promotional focusTo generate consumers interest, retailers use a variety of promotionaltechniques such as: advertising, many retailers find traditional masspromotional message of advertising such as newspapers on the TV to be their



32/42

best means for creating customers interest. Retailers selling online, they relymostly in internet advertising as their promotional message of choice.

Personal sellingThe promotional effort of retailers selling expensive or high end products is

mainly based on person to person contact with customers.

III. Business models

What are the main different business models in the retail sector?

1) Mom and Pop stores

They represent the small individually owned and operating retail outlet. In

many cases they are family run businesses. They provide a more personalshopping experience and employees usually provide a better customerservice.However, things tend to cost a little more due to the fact that they dont buyin bulk.

2) Mass discounters

A discount store is a departmentalised retail operation that sells at pricessubstantially lower than conventional retailers. To offset the lower prices,expenses are kept down by minimising free customers services, maximisingthe use of self-service, and using inexpensive fixtures, decorations anddisplays.The starting point for discount stores is often traced to the opening of a radioand appliance store by the Masters Brothers in Manhattan in 1937. By theearly 1940, a significant number of retail operations call discount houses hadbeen established in several major cities. After WW2, discount merchandisinggrew rapidly. These explosions in growth was fuelled by consumers bargainhunting in the face of rising prices and the growing demand for goods thatfollowed word time shortages. Discount stores sprang up across the USA tosatisfy the demand for consumers goods, sparked by increased consumers

confidence in discount stores and increased avialibilty of good frommanufacturers discounting continued to grow rapidly in the 1950. Andbecame an important part of the retail landscape. In addition to the nationaland regional chain that entered the industry in the 1950 several other opentheir doors in the early 1960. Among them, wera 4 that would become thegiant of the industry: K-Mart, Wolco; Target and Walmart.Walmart is currently Americans biggest company and the number 1 retailerin the world. Today, Walmart operate nearly 2 800 stores in 12 countries.



33/42

Walmart has considerably expending as acquired majority state interest inmany joined ventures companies and is expending to new markets like Indiaand Russia. While Walmart has grown to dominate the western hemisphere,it has stumble in countries like Japan, South Korea and in the EuropeanUnion. The European mainland is a market Walmart has difficulties bring it

into. Walmart attempted to enter the German market but found that theWalmart model would not sustainable and did not fit to the German culture oreconomy. Walmart business model, which is based on high saturation ofstores, on the out squired of towns, massive distribution centres and influx offoreign goods was unlikely to succeed in the highly urban German marketwhere public transport is extremely important and space is at the premium.In addition, the cultures of Walmart in Germany did not blend well. Walmarttried to impose many American management styles in Germany which werealien to the German people. While Walmart tired and failed in German, it didnot attempt to enter the remainder of the European mainland which isdominated by other retailers such as Frances Carrefour.

In addition, most of Western Europe runs on the street land use and labourlaws that create significant problems considering Walmart anti-union-policyand strategy development. As for Walmarts UK subsidiaries Asda, it is aprofitable yet problematic venture for Walmart. The number 2 retail andgrocery chain in the UK has problems competing against more flexible anddominant UK rival Tesco.

3) E-Commerce

Commerce has a long tradition of profiting from innovative systems and

tools. As technologys image successful businesses are quick to identifydeveloping opportunities and expand their commercial capabilities.Conducting commerce electronically is no different. For many businesses,new technologies that digitally exchange text and monetary information areeffective tools to serve traditional business goal of developing new marketsand creating innovative business opportunities. E-Commerce can be definedas the buying and selling of goods and services on the Internet especially theWorld Wide Web. E commerce isnt an entirely new type of commerce. Itsfirst image in the 1960 and private networks when large organisationsdevelop Electronic Data Exchange (EDE) and banks implemented ElectricFound Transfers (EFT). Today however, e-commerce is no longer the

exclusive domain of large organisations and private networks. When the webfirst became well known, among the general public in 1994 many externsforecast that e-commerce would soon become a major economic sector.However it took 4 years for security protocols to become sufficientlydeveloped and widely deployed. Subsequently, between 1998 and 2000, asubstantial number of businesses in the US and Western Europe developedrudimentary web sites. Although, a large number of pure e-commercedisappeared during the dot com collapse (effrondrement des valeur internet)



34/42

in 2000 and 2001, many bricks and mortar retailers recognize suchcompanies had identified valuable niche market and began to add e-commerce capabilities to their web sites.

Even though, e-commerce has existed for more than 30 years, it has just

recently sustained significant growth. In the past 5 years, the internet hasbecame the mass communication medium. E-commerce growth is tied/linkeddirectly to the sociological changes that have taken place in the past decade.As market expand, more businesses are attracted, which in turn drives thedevelopment of better more stable and secured technology to facilitate e-commerce. E-commerce is also conducted through the more limited form ofcommunication called e-mail, fax and the imaging use of telephone calls overthe internet. Most of this is business to business with companies attemptingto use e-mail and fax for unsolicited ads to consumers and others businessprospects. Besides, an increasing numbers of business websites offer mainnewsletters to subscribers. Finally a new trend is opt in e-mail in which web

users voluntarily sign up to receive e-mail usually sponsored or containingads about product categories and other subjects they are interested in.

CUSTOMERS

I. Introduction

An important part of the marketing process is to understand the role ofcustomers and the reasons that led them to make a purchase. Marketers areconstantly gathering information about their customers in order to better



35/42

serve them and most importantly to retail them as loyal customers. In recentyears, a number of techniques are images that have designed to improve therelationship between the marketer and its current and potential customersbut also to target new customers.Without a good understanding of customers, businesses find it hard to

respond to their needs and wants. A good starting point therefore, is to carryout market research to find out customers requirements in relation to the 4Ps. There are two main kinds of research, quantitative research whichinvolves collecting a lot of information by using techniques such asquestionnaires and other forms of surveys and qualitative research whichinvolves working with smaller samples of customers often asking them todiscuss products and services while researchers takes notes about what theysay.The marketing department usually combines both forms of research. A usefuldefinition of marketing is the anticipation and identification of customersneeds and requirements so as to be able to meet them. Marketing theory

traditionally divide customers into two broad groups: consumers buyers andindustrial buyers. Consumers buyers are those who purchase goods for theirpersonal consumption and industrial buyers are those who purchase goodsand be off of the business or organisation. Businesses spend huge amount ofmoney to understand what influences customers buying decisions. The mainquestions they tried to answer are:

- Who buys?- How do they buy?- When do they buy?- Where do they buy?- And why do they buy?

For a marketing manager the challenge is to understand how customersmight respond to the different elements of the marketing mix that arepresented to them. If management can understand customers responsesbetter than the competition, then it is a potentially significant source ofcompetitive advantage. Such knowledge is critical for marketers, sinceunderstanding customers behaviour will help shed light and what isimportant for the customers and also suggest the main factors that influencecustomer decision making.

The potential factors that may influence the customers purchasing decision

are limitless and extremely complex. They include social factors, life style,culture, perception and interpretation.

A. Social factors



36/42

A customers buying behaviour is influenced by social factors such as thegroups to which the customers belongs and social status. In a group, severalfactors may interact to influence the purchase decision. The typical role insuch a group decision can be summarised as follows:- Initiator i.e. the person who first suggest things of the idea of buying

particular product or services.- Influencer i.e. a person who views or advices influences the buying decision- Decider i.e. the individual with the power and/or financial authority to makethe ultimate choice regarding which products to buy.- The buyer, the person who concludes the transaction- The user, the person or persons who actually use the product or service.

The family unit is usually considered to be the most important influence inthe buying decision. Marketers are particularly interested in the roles andrelative influence of the husband, wife and children on the purchase of alarge variety of products and services. There is evidence that the traditional

husband, wife buying rules are changing. Almost everywhere in the world thewife is traditionally the main buyer for the family, especially in the area offoods, households products and clothes. However, with an increasingnumber of women in full time work, the traditional roles are inversing. Thechallenge for marketers is to understand how this might affect demand forproducts and services and the promotional mix needs to be modified toattract mail rather than e-mail buyers.

B. Life style

In business, life style provides a means buy which advertisers and marketers

endeavour to target and match consumer needs with products or to createaspiration relevant to new product. Therefore, marketers take the patterns ofbelieve an actions, characteristics of life styles and direct them towardsexpenditures and consumptions. These patterns reflect the demographicfactors, (i.e. the habits, attitudes, tastes, moral standard, economic level andso on) that define a group. These influencing factors relates to the way welive through the activities we engage in and interest we express. Lifestyle isoften determined by how we spend our time and money. Successful life stylebrand speaks to the core identity of their customers. Individuals each havetheir own personality, based on their background e.g. ethnicity, social class,subculture, nationalities, etc. A life style brand allows individuals to associate

themselves to the brand. One key indication that a brand has become a lifestyle is when it successfully extends beyond its original product category. Forexample Nike used to be a company focusing on making running shoes butover time the company and its logo has become associated with the athletesubculture. This has allowed Nike to expand into athletic related categoriessuch as sports equipment and apparel. Although life style brands arerelatively uncommon on electronics and computer industry, apple hasbecome a life style brand since it expanded its market share into the music



37/42

industry through its I-pod musical digital music player. The I-pod and theubiquitous wide I-phone included are also considered to be a fashionaccessories by song and may be considered a status symbol by others. Lifestyle brands have gained an increased share of luxury market. Luxury basedlife style brands like Gucci, Armani, and Louis Vuitton allows consumers to

buy products that they associate with a better more luxurious life.

C. Culture & other group membership

The culture is the most basic cause of a persons wants behaviour. Growingup children learn basic value from the family and other important groups.Marketers are always trying to spot cultural shifts which might leadconsumers to look for new products. For example the cultural shift towardgreater concern about health and fitness has created new opportunities forindustries trying to meet the needs of customers wishing to buy for example

law calorie foods, health club member ship, exercise equipment, activity orhealth related holidays.Similarly the increased desire for leisure time has resulted in increaseddemand for convenience product and services such as microwaves ovens,ready meals and direct marketing service businesses such as telephonebanking and insurance. Marketers often use cultural representation toinfluence customers buying decisions, especially when they promote theirproduct. The objective is to connect consumers using cultural references thatare easily understood and that are likely to be embraced by them.By doing so, the marketer hopes the consumer will feel more comfortablewith, and can relate better with the product since it corresponds with theircultural values. In addition to cultural influences, customers belong to manyother groups with which they share certain characteristics and which mayinfluence purchase decision.Often, these groups contain opinion leaders or others who have a majorinfluence on what the customer purchases. Some of the groups we maybelong to include:

- Social class, it refers to the hierarchical distinction betweenindividuals and groups of society. It represents the social standingone has within society based on such factors as income level,education, occupation.

- Family, the family situation can have a strong effect on howpurchase decision has made

- Reference groups, most consumers belong to many othergroups with which they associate of in some cases feel the needto disassociate.

Identifying and understanding the group consumers belong to is a keystrategy for marketers. This helps them identify target market develop new



38/42

product and create appealing marketing promotion to which consumers canrelate.

D. Perception

Several factors influence our perceptions. Exposures involve the extent towhich we encounter a stimulus. For example we are exposed to numerouscommercial messages, bill boards, radio advertisement, bumper, stickers oncars, and signs on panels, places on shopping malls. Most of these exposuresare random and we dont deliberately sick it out. Exposure in itself is not

enough to significantly impact the purchase decision. In order for stimuli tobe consciously processed, attention is needed. Attention is actually a matterof degree. Our attention may be quite high when we read directions forgetting and income tax reform but low when commercial come on during atelevision program; also it can be high if its an advertisement for a productwe are interested in.

E. Interpretation

Interpretation involves making sense out of the stimulus. For example, whenwe see red can we may categorise it as a Coke product.

II. Types of customers buying decision

Consumers are faced with purchase decisions nearly everyday. However,some decisions are more important than others and require more effort bythe consumer. Others are fairly routines and require little efforts by theconsumer. According to marketers, consumers face 4 types of purchasedecisions:

- Minor new purchases, also these purchases representsomething new to the consumer there are not very important for

them in terms of need of money- Minor re-purchases, these the most routine of all purchases

and often the consumer returns to buy the same product withoutpaying much attention to others product option. Thus, showingthe loyalty to the brand.

- Major new re-purchases, these purchases are the most difficultof all purchases as the product being purchased is important tothe consumer, in terms of investment. Besides, his choice is all



39/42

the more difficult as he has little or no previous experiencemaking this decision.

- Major re-purchases, these purchase decisions are alsoimportant to consumers but, they feel rather confident in makingthese decisions as they have previous experience purchasing the

product.

Understanding how customers treat the purchase decision, enable marketersto develop marketing strategy adopted to each type of situation as differentbuying situations require different marketing efforts.Now that we have discussed, the main factor influencing a consumersdecision to purchase, lets examine the process itself.According to marketers, they are five steps in this process. However, whethera consumer will actually carry out each step depends on the type of purchasedecision they have to make.

- Step 1: is called the desire to fill a need. In the first step, the

customer for some reasons is not satisfied and wants to improvehis/her situation. For example, the consumer may fill the need tobuy something to eat or to drink because they are hungry orthirsty. External factors can also trigger consumers need.Marketers are particularly good at this, through advertising, instore displace and the intentional use of sent.

- Step 2 is called search for information, if consumers aremotivated to satisfy a need, they will undertake a search forinformation for possible solutions. The sources used to acquirethis information may be varied. Memory i.e. trying to rememberpast experience, internet search etc

- Step 3 is called evaluate option, consumer such efforts mayresult in asset of option from which a choice can be made. Forexample a consumer who need to replace a television set havemultiple solutions to choose from, such as plasma, LCD liquidcrystal display, CRT cathode ray tube, Within each solutiontype will be multiple brands offering the product the consumer islooking for. So marketers have to understand how consumersevaluate product option in order to better answer their needs.Most importantly, marketers must determine which criteriaconsumers are using in their selection of possible solutions andhow each criterion is evaluated.

- Step 4 is called purchase, most of the time the solution chosenby the consumer is the same as the product whose evaluation isthe highest. However, this may change when its actually time tomake the purchase. The intending/intended purchase may bealtered because the product is out of stock or because acompetitor offers an incentive at the point of purchase or becausethere has been unfavourable publicity about the product.



40/42

- Step 5: is called after purchase evaluation, once consumershave made a purchase, they are faced with an evaluation of thedecision. If the product performs below the consumersexpectation, he will either return it or decide not to repeatpurchase with that type of product. Such evaluations are more

likely to occur in cases of expensive or highly importantpurchases. Customer service centres and follow up marketresearch are useful tools in helping to address purchase concerns.

III. Customers relationship management

Types of customersSince customers are people who buy products and services from otherpeople. Its important for businesses and particularly for marketers tounderstand what customer think and feel. Customers attitudes towardsproducts are shaped by experience of the product. The friends opinions

direct dealing with the company, and the adver

Documents

Anglais Langue Et Affaires-1