Provide a brief explanation of the major influences on business buyers
Business buyers are concerned about the product and service quality, product prices and the existing relationship with the producer or the supplier. The quality of the products directly affects the buyers’ businesses and products.
Services have a direct influence on the cost, profits and the sales obtained by the buyers. A profitable, satisfying long-term buyer-seller relationship is a key business asset that positively influences the perspectives of the buyers toward the business.
What are the major characteristics of institutional markets?
Institutional markets are mainly characterized by geographical concentration, number of buyers, size, purchase decision process and the buyer-seller relations. The geographical concentration of the institutional market helps reduce marketing costs.
The institutional market customers encompass a large section of the business market. Schools and health care institutions make up a considerable fraction of the entire institutional market which includes colleges, national libraries, art galleries, universities among others. The institutional market purchasing process is often constrained by political concerns and directed by law.
Many of the institutions categorized under institutional markets are controlled by the government while a few are privately managed. For example the government manages public schools and large firms are managed privately. Another key characteristic of the institutional market is that it supports diversity.
For instance some small health centers assign duties for purchasing food to chief dietitian. All the other purchasing agents can only make the purchase through the chief dietitian.
Describe the typical roles played by the various members of a buying center.
Users:
These are the people who do the actual purchasing and consumption of the products and services.
Gatekeepers:
These are individuals who control the information that is reviewed by all the buying center members.
Influencers:
These are participants who affect the buying decisions by giving information that guides the evaluation of the available alternatives.
Deciders:
These are participants who select a product or service while another person may have the official authority to do so.
Buyers:
These are participants who have the right to select a supplier and to follow the appropriate procedures to secure a product or service.
Explain the four major steps in designing a customer-driven marketing strategy.
Market segmentation:
This entails taking the total diverse markets for a particular product and splitting them into smaller market segments so that each of which tends to be standardized in full significant portions.
Market targeting (targeting):
This entails assessing every market segment in order to establish the attractiveness of each segment and trying to identify one or more segments to penetrate.
Market Differentiation:
This entails distinguishing the market segments in order to define the most appropriate segmentation. It primarily involves centralizing on one or more major criteria valued by the clients and selectively incorporating costs in the areas believed to be essential to acquirers and adjusting the premium price for excess costs added.
Market positioning:
This entails organizing for a market offering in order to take a unique and advantageous place in relation to competing products in the minds of the target clients.
Explain the four major segmenting variables for consumer markets.
Geographic:
This includes density, state, climate and country among other attributes.
Demographic:
The demographic factors include age, race, education, occupation, nationality, social class and other related aspects.
Psychographic:
This includes factors such as lifestyle, personality, core values and so on.
Behavioral:
The behavioral variables include attitudes, user status, buyer willingness, loyalty status among many other related aspects.
Why do international markets need to be segmented?
International market segmentation helps classify consumers located in different countries or geographical locations according to their respective needs. The segmentation allows for identification of identical consumer groups that are likely to respond to a particular marketing mix.
Why do businesses segment their markets?
It helps categorize clients into market segments based on a number of variables and splits the market by the amount of products purchased.
Explain how companies identify attractive market segments and choose a target marketing strategy.
Companies accurately identify attractive market segments by carefully following the strategic markets segmentation steps that begin with identification of segmentation variables and goes through the evaluation of the variables until the best attractive market segment is identified.
After satisfactory and promissory markets are selected it becomes necessary to identify attractive market segments. Market segments can be accurately discovered by the use of the market segmentation process which involves a number of stages.
The firm should always support the essential strategic business decisions with properly established facts. The process should methodically scrutinize the identified strategic segmentation aspects.
There has been a long history of legal concerns about packaging and labels. Explain why this is so and how labeling is regulated in Canada.
The long history of legal concerns has existed due to the fact that there have not been well defined constitutional provisions regarding the product packaging and labeling.
Prepackaged goods sold in Canada are subject to statutory packaging and labeling requirements controlled by the provincial and federal administrations even though the majority is done federally. The law protects consumers by ensuring that certain standards are attained for merchandising products, materials and substances.
A company has four choices when it comes to developing brands.
Describe what they are:
- Product acquisition
The company may decide to buy a whole company or to obtain a license to produce the brands from another company.
- New product generation
The company may decide to create its own original products based on totally new ideas.
- Product improvement
The firm may opt to modify an existing brand to enhance its quality and product features.
- Joint venture
The company may decide to join forces with a similar company that produces different but related product brands in order to have a chance to trade in new brands.
Explain concept testing
It involves contacting potential clients and stakeholders within a particular target market defining the product relevance and determining whether there is a need for the product in the market. The test helps recognize the main features and gains that the target market considers and how it relates to the market.
Describe the role of packaging.
Product packaging techniques are used to attract consumers at the point of sale the packaging is a real part of the product and deserve careful attention during the product planning process. Product packaging improves marketing.
What does price elasticity reveal about a product?
Price elasticity is important because it tells whether the company is able to convey cost increase to clients. When the demand is inelastic, the company can increase the product price with less negative impact.
Discuss the importance of consumer perceptions of value and costs for setting prices.
Accepting customer perceptions when setting the price and the idea of balancing consumer benefits and costs helps marketers and producers to better manage the products and prices.
Explain the concept of positioning for competitive advantage.
Positioning describes a combination of the product concepts, price communication and distribution to the market. Positioning for competitive advantage means the process by which a firm identifies a set of differentiating competitive advantage upon which to build its products.
Services are characterized by four key characteristics. Name and describe these four characteristics.
Intangibility:
One key feature for most services is that they are intangible by nature. This means that they cannot be touched.
Inconsistency:
The quality regarding the same service may differ even though it may be the same service offered by the same business or service deliverer.
Inseparability:
The client does not separate the service from the service deliverer or the delivery environment.
Perishability:
Services cannot be stored or saved, their unused capacity cannot be set aside and they cannot be inventoried.
Name and describe three decisions that companies make regarding their individual products and services.
Companies decide on what products and services to introduce into the market. Companies also decide on what market segments to target with the product and service offerings. The companies make decisions regarding the pricing of the products and services.
Explain why so many new products fail and how a company can improve its odds of new product success.
Several new products fail due to a number of reasons, for example when the demand for innovations is innately uncertain. When it is extremely difficult or when it is not possible to know whether the new product has hit an unmet consumer need and if there exists adequate demand that justifies the development of the new product.
The new products also fail due to poor commercialization of technology. The surest way to improve the odds of the new product’s success is for the organization to utilize strong product planning methods and procedures. The management must properly and carefully define the market and the product proposition in order to enhance the probability of success.
Distinguish between a product idea, the product concept and the product image.
Product ideas:
This is the innovative information collected about a particular product that the company intends to offer. It is obtained internally or externally from reliable sources such as competitors, customers, trade shows and so on.
Product concept:
This is a detailed version of the product idea expressed in meaningful consumer understandable terms.
Product image:
Refers to the manner in which the clients view the potential product offering.
Each product will have a life cycle, although its exact shape and length is not known in advance. Briefly explain each step in the PLC.
Idea generation:
Ideas are obtained from internal or external sources. The issues regarding competitiveness and business expansion are considered at this point.
Idea screening:
The innovative product ideas obtained from the various sources are carefully evaluated.
Concept development and testing:
Concept testing is used to analytically predict the success of the new product idea before it finds its way into the market. The concepts may be presented to the client typically or practically.
Marketing strategy development:
This entails establishment of the initial marketing approach for introducing the product into the market. It basically comprises value proposition, definition of target market as well as sales and profit goals.
Business analysis:
This entails assessment of the sales costs and profit projections to verify whether they are in line with the organizational goals. If they do, then the product moves to the next step.
Businesses tend to treat new brands as and especially the business analysis process as a difficult task. The firms must treat this step the most important step because it has significant impact con the performance in the next steps.
Product development:
At this stage, the research and development department generates the product concept into the physical product. Up to this point, the product idea remains as word descriptions, drawings or sketches.
Test marketing:
At this step, the product and the marketing plans are tested in a more practical and realistic market environment. The marketer gets to understand how to market the product and determines the potential and actual problems that may demand for improvement.
Commercialization:
At this point, the new product is launched into the market. The most appropriate time and place to launch the product is determined for the planned market.
List and discuss the functions of marketing channels.
The marketing channels direct the flow of products from the manufacturer to the client. They heavily influence the rate of the marketing mix including promotion and pricing. The channels also determine the product market presence and the client’s convenience for accessing the product. Other functions include facilitating exchange efficiencies and creating utility. They create utility of four types including place possession, time and form. They facilitate exchange efficiencies by reducing the costs of exchange by performing particular services or functions proficiently.
List and describe the major types of retailers:
- Self service retailers
Self service retailers are single-person or partnership-owned retailers not operated as part of the bigger level of service.
- Limited service retailers
Limited service retailers provide more sales support because they purchase more products about which the clients require information.
Full service retailers
Full service retailers use sales people or agents to support customers in every phase of the shopping practice.
Explain the major types of wholesalers and their marketing decisions.
Merchant wholesalers:
These are privately owned firms that buy and sell products in their own accounts either as full service or limited service wholesalers.
Brokers Wholesalers:
These are agents who bring buyers and sellers together and help in the negotiation by providing market information to both parties. They assist in the negotiations and get paid by the party that appoints them.
Agent wholesalers:
These are middlemen who assist in negotiating rights or ownerships without taking titles. They assume many forms but tailor their operations to meet the demands of the party they embody who can be either the seller or buyer or both.
Manufacturers’ sales branches and offices:
These are merchant wholesaler operations and manufacturer owned intermediaries that that sell products and provide special services to the manufacturer’s sales force. They are often situated far from the manufacturing plant but near the high consumer demand regions.
Define the five promotional mix tools for communicating customer value.
Advertising:
This is a promotional tool used by marketers to communicate messages to the clients. It provides the best possible selling messages to the target audience by means of various techniques including but not limited to outdoor, print, internet and broadcast methods. The methods are used to persuade and inform clients about the business product and service offerings.
Sales Promotion:
This is a marketing tool and an activity that temporarily improves the product value by offering extra inducement for purchase by the client. The main techniques used with this tool include product displays, demonstrations, discounts and coupons.
Public relations:
This refers to an attempt by the organization to manage the two-way communication between itself and the public in order to promote the overall corporate mission and to gain public understanding. The tool utilizes sponsorships, press releases, events and websites to accomplish its objectives.
Direct Marketing:
This entails personalized communications between the marketer and the client and involves the use of special techniques such as kiosks, telemarketing, catalogues, mail and telephone to effect quantifiable responses or transactions at any location.
Personal selling:
This refers to paid personal communication that aims at informing the clients and influencing them to buy products in an exchange situation. This promotional mix tool utilizes ales presentations, incentives, trade shows and other applicable techniques to accomplish its objectives.
Discuss the value of the marketing mix.
The marketing mix helps define a business product more broadly in line with the client requirements. The marketing mix establishes a product blend, pricing, promotional methods and distribution mechanism that bring superior value to specific customer categories.
“The customer is always right!” Discuss the impact of this statement.
The reason for the argument “The customer is always right” is that the customer controls the business effects. Every customer who interacts with the business or organization will have an impact on the business. It is of course understandable that this phrase in not true in all cases.
The client may not be right at times and that is very true. This old adage is a technique for explaining that the client deserves to be respected at all times. So the customer must always be appreciated because without the customer’s money the business cannot stand and it can be impossible to meet personal financial obligations. On the other hand, the client is not obliged to appreciate the business or the seller.
The only obligation the client has toward the business is to pay for the product or services obtained from the business. Additionally, the client chooses which business to interact with and may at times ask questions that do not look relevant or make inquiries that display inadequate knowledge.
The customer questions must be taken positively and considered genuine. The ignorant questions must be answered politely and cautiously so that the attitude of the client toward the business is not affected negatively.