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Question 1

  1. 1. Question 1 a) Briefly explain the differences between the marketing and selling concept. (10marks) In sales concept, the organization main focus is to sell products that the organization make, instead of selling products that customer need and want. In the marketing concept on the other hand, the organizations concern about producing product and services that can satisfy customers‟ wants, taste and preferences. Secondly selling concept concern more on selling goods and services they produce to people who want to consume it. As a result the company will adopt marketing mixes in order to sell their goods and services to target market. The main reason for marketing concept is to achieve satisfaction from their customer who used the goods and services. There are also many efforts done by those marketers as their strategy. The sales concept goal is to make as much profit through volume selling of their product through the use of intensive marketing. Both selling and marketing concept are concept that directly opposed in respect. There will always be a need for some selling. The aim of marketing is to know and understand the customer so well that the goods and services fit him. Marketing comprise of many activity such as marketing research, pricing, product development and distribution. In fact, selling is part of marketing. Marketing takes place before and after the selling activity. Many companies have adopted the marketing concept in Malaysia for example KFC. Many companies know the concept but do not practice it. They prefer sales-oriented company.
  2. 2. b) Briefly explain the philosophies of marketing. (15 marks) Most successful business requires efficient and effective management. This means the manager must able to plan, organize, direct and control the factors of production in order to achieve the organization‟s goals. 1. Production philosophies Production concept is the orientation that holds consumer who will favor these products that are available and highly affordable and therefore management should concentrate on improving production and distribution efficiency. The emphasis on this concept is to produce it as much base on the capability of the firm. Products that easily available and affordable to most customers, will give companies the advantages of selling the products very well in the market. 2. Product philosophies Product concept is an approach to business that centers its activities on continually improving and refining its products. All efforts are put into making the product better. For example we can offer you non-chip paint on your car. The product concept proposes that consumers will prefer products that have better quality, performance and features as opposed to a normal product. The concept is truly applicable in some niches such as electronics and mobile handsets. Two companies which stand apart from the crowd when we talk about the product concept are Apple and Google. Both of these companies have strived hard on their products and deliver us feature rich, innovative and diverse application products and people just love these brands. 3. Selling philosophies Selling concept means that the consumer will not buy enough of the organization undertakes substantial selling and promotion efforts. In simple words, marketing need to aggressively promote their product by either advertising, doing a sales promotion and personal selling in order to catch more customer to consume the product. Selling concept is more focus on the selling rather than satisfaction of their consumer. A good example would be the attractive advertisement conducted by Dashing that use Remy Ishak as their opinion leader.
  3. 3. 4. Marketing concept Companies that adopt marketing concept in their production are known to be „market oriented‟. So, marketing manager must work hard in order to satisfy and fulfill customer need and wants. One famous and world-wide well-known company id Macdonald is known to adopt this marketing concept. How do they done it? Just ask teenagers today about Mcd. Almost everyone know them including adults too. In Malaysia, the marketing concept has been expressed in many forms such as „Maybank – a bank with a smile‟.5. Societal- marketing philosophies Societal marketing concept not only concern about the customer need and wants but also the long term and society as a whole. For example it concern about pollution of the environment, waste of natural resources and others. Currently, societal marketing concept is to receiving an increasing emphasis among many business organizations. Products such as lead-free petrol, recycled paper are some of the things that marketers are paying more attention to care for the environment. These are important issues because customers are now more educated and more aware that they demand not just quality products but also to have extra benefits. For example benefit sought from the product.
  4. 4. Question 2 a) Briefly explain the BCG growth-share matrix. (10 marks) Strategic business units (SBUs) is the key business that make up the company. An SBU can be a company division, a product line or sometime single product or brand. 1. Stars Stars are high-growth, high-share business or products. They often need heavy investment to finance their rapid growth. Eventually they will turn into cash cow 2. Cash cows Cash cows are low-growth, high-share business or products. These established and successful SBUs need less investment to hold their market share. Thus, they produce a lot of the cash that the company uses to pay its bills and support other SBUs that need investment. 3. Question marks Question marks are low low-share business units in high-growth markets. They require a lot of cash to hold their share, let alone increase it. Management has to think hard about which question marks it should try to build into star and which should be phased out. 4. Dogs Dogs are low-growth, low-share business and products. They may generate enough cash to maintain themselves but do not promise to be large source of cash.
  5. 5. b) Marketer need to deal with marketing management. Briefly explain about marketing analysis. (15 marks) Managing the marketing function begins with a complete analysis of the company‟s situation. The marketer should conduct a SWOT analysis by which it evaluate the company overall strength (S), weakness (W), opportunities (O), and threats (T). Strength includes internal capabilities, resources and positive situational factors that may help the company serve its customers and achieve its objectives. Besides that, the competitive advantages also the strength of the organization that competes with their competitors. Weaknesses include internal limitations and negative situational factors that may interfere with the company‟s performance. For example like the weak management of worker that the organization have that will affect the organization‟s performance. Opportunities are favorable factors or trends in the external environment that the company may be able to exploit to its advantage. And threats are unfavorable external factors or trends that may present challenges to performance. There are many threats that occur recently for example the overflow of information on the internet which become threat to the organization‟s objective. The company should analyze its markets and marketing environment to find attractive opportunities and identify environmental threats. It should analyze company strengths and weakness as well as current and possible marketing actions to determine which opportunities it can best pursue. The goal is to match the company strength to attractive opportunities in the environment, while eliminating or overcoming the weaknesses and minimizing the threats. Marketing analysis provides inputs to each of the other marketing management functions.
  6. 6. Question 3 a) Explain the micro and macro forces of environment. (6 marks) Micro is the actors close to the company that affect its ability to serve its customers. Marketers must work in harmony with other company departments to create customer value and relationships. For example, Walmart‟s marketers can‟t promise us low prices unless its operations department delivers low costs. In creating value for customers, marketers must partner with other firms in the company‟s value delivery network. For example, Lexus can‟t create a high- quality ownership experience for its customers unless its suppliers provide quality parts and its dealers provide high sales and service quality. Customers are the most important actors in the company‟s microenvironment. The aim of the entire value delivery system is to serve target customers and create strong relationships with them. Macro consists of broader forces that affect the actors in the microenvironment. Changing demographic means changes in markets. For example, Merrill Lynch now targets aging baby boomers to help them overcome the hurdles to retirement planning. Besides that, concern for the natural environment has spawned a so-called green movement in industries ranging from PCs to diesel locomotives. For example, last year HP recovered and recycled 250 million pounds of electronics globally, equivalent to some 800 jumbo jets. The goal of many companies today is environmental sustainability.
  7. 7. b) The changes of technology and social affect the marketing strategies. Explain with examples. (10 marks)Technology is the knowledge of how to accomplish tasks and goals and oftenincludes all activities involved in translating technical knowledge into physicalreality that can be used on a societal scale. Marketers must be aware of the newdevelopments in technology and their possible effects, because technology canand does affect marketing activities in many different ways. Businesses caneasily decline when they ignore the changes in the technology.Major technological break-through carries a threefold market impact. They canstart entirely new industry, as computers and airplanes have done. Then, it alsoradically alters or virtually destroys existing industries. For example, computerreplacing typewriter.Besides that, technology also involves high cost. Stimulate other markets andindustries not related to the new technology. Rather than being involve in theproducing new products, companies can improve on current products bydeveloping and making product improvement.The social environment changes also affect the company and marketing mix. Anincreasing number of working women in Malaysia, for example has also led toincreasing number of firms producing fast-food services such as Brahim‟s packetrendang, kurma, sweet and sour and even instant roti canai to cater to thesecareer women‟s demand for convenient food and cooking ingredients.The food industries in Malaysia require conforming the needs and demands ofthe various ethnic groups. In general the “Halal” sign at any site selling food willbe something that will make it convenient for all Muslims to consume a halal foodwithout doubt.The societies today are accepting the value of health and leisure. So, marketersneed to cater for these activities. There a re increasing number of tour packagesavailable offering very attractive prices especially during the school holidays. TheMalaysian government has encourage local tourism by giving two Saturday off ina month and promote the “Cuti-cuti Malaysia” holiday program to boost localtourism.
  8. 8. c) Explain the types of public that help the organization‟s ability to achieve its objectives. (9 marks) Public is any group that has actual or potential interest in or impact on an organization‟s ability to achieve its objectives. There are seven types of publics. 1. Financial publics This group influences the company‟s ability to obtain funds. For example banks, investment analysts, and stockholders are the major financial publics. 2. Media publics This group carries news, features and editorial opinion. It includes newspapers, magazines, television stations, and blogs and other internet media. 3. Local publics This group includes neighborhood residents and community organizations. Large companies usually create departments and programs that deal with local community issues and provide community support. 4. General public A company needs to be concerned about the general‟s public attitude toward its products and activities. The public‟s image of the company affects its buying. 5. Internal publics This group includes workers, managers, volunteers and the boards of directors. Large companies use newsletter and other means to inform and motivate their internal publics. When their employees feel good about the company they work for, this positive attitude spills over to the external publics. 6. Citizen-action publics A company‟s marketing decisions may be questioned by the consumer organizations, environmental groups, minority groups and others. Its public relation department can help it stay in touch with consumer and citizen groups.
  9. 9. Question 4 a) Explain the internal and external influences that affect the consumer behavior. (12 marks) Consumer purchases are strongly influenced by cultural, social, personal, and psychological characteristics. 1. Cultural factors Culture is the set of basic values, perceptions, wants and behaviors learned by a member of society form family and other important institutions. Marketers need to understand the role played by the buyer‟s culture, subcultures, and social class. Every group or society has a culture, and cultural influence on buying behavior may vary greatly from country to country. For example, the cultural shift toward greater concern about health and fitness has created a huge industry for health-and-fitness services, exercise equipment and clothing, organic foods, and a variety of diets. Each culture contains smaller subcultures, or group of people with shared value systems based on common life experiences and situations. Subcultures include nationalities, religions, racial groups and geographic regions. Examples of four such important subculture groups include Hispanic American, Africa American, Asian American, and mature customer. Social class is not determined by a single factor, such as income, but is measured as a combination of occupation, income, education, wealth, and others variables. 2. Social factors Group that have a direct influence and to which a person belong are called membership groups. Reference groups serve as direct (face-to-face) or indirect points of comparison or reference in forming a person‟s attitudes or behavior such as opinion leader. Aspirational group is one to which the individual wishes to belong, for example Datuk Lee Chong Wei. Family member can strongly influence buyer behavior. For example husband-wife involvements are widely by product category and by stage in the buying process. People usually choose products appropriate to their roles and status. Consider the various roles of working mother plays. In her company, she plays the roles of a brand manager; in her family, she plays the role of wife
  10. 10. and mother; at her favorite sporting events, she plays the role of avid fan. Asa brand manager, she will buy the kind of clothing that reflects her role andstatus in her company.3. Personal factorsLife-stages changes usually result from demographics and life changingevents marriage, having children, purchasing a home, divorce and retirement.A person‟s occupation affects the goods and services bought. Blue-collarworkers tend to buy more rugged work clothes, whereas executives buy morebusiness suits. A person‟s economic situation will affect his or her store andproduct choices. Their demand was backed by purchasing power.4. Psychological factorsMotivation is the need that drives or directs the person to seek satisfaction ofthe need. Maslow hierarchy explains about the arrangement of human need.They include physiological needs, safety needs, social needs, esteem needs,and self-actualization needs.Perception is the process where people select, organize and interpretinformation to form a meaningful picture of the world. People can formdifferent perceptions of the same stimulus because of three perceptualprocesses which is selective attention, selective distortion, and selectiveretention.Learning describes the changes in an individual‟s behavior arising from theexperience. Learning occurs through the interplays of drives, stimuli, cues,responses, and reinforcement.A belief is a descriptive thought that a person holds about something. Beliefsmay base on real knowledge, opinion, faith and may or may not on emotionalcharge. Attitude describes a person‟s relatively consistent evaluations,feelings, and tendencies toward and object or idea.
  11. 11. b) Explain how marketers use marketing strategy to segmenting, targeting, differentiate and positioning. (13 marks)Market segmentationMarket segmentation involves dividing a market into smaller segment of buyerswith distinct needs, characteristic or behaviors that might require separatemarketing strategies. There are six steps marketers need to know segmenting amarket. There are follows: i. Select a market or product category for study This involves the process of defining the overall market or product category. For example, Nestle surely would have made an intensive study among Malaysians market before they introduces a new type of drink “Nestomalt” a brand that compete with “Horlicks”. ii. Choose a basis or bases for segmenting the market In this process, marketers need to have creativity and in depth market knowledge. For example, when Nestle range of famous “Maggie” brand produced the latest addition of the “Thai Chili Sauce”, they must have considered the needs of hot chili lover sauce. It is obvious, if the demand for this chili sauce among Malaysians is not they will not introduce it into the market. iii. Select segmentation descriptors Through this process, marketers choose the segmentation descriptors which requires them select demographics as a marketer segmentation basis. They could use gender, age, income and occupation as a descriptor. For example “Anlene” milk powder id definitely targeted for adults above 30 years old, who need high calcium intake and need to prevent themselves from getting osteoporosis.
  12. 12. iv. Profile and analyze segmentsIn creating a profile, marketers may need to get the right data from someorganizations who have conducted some form of research on areas they arefocusing. The profile include the details of the segment‟s size, expected growth,purchase frequency, current brand usage, brand loyalty and long term sales andmarket potential. Analyzing profiles of the right segment is important beforedeciding which the best segment to target is. v. Select target marketsThis requires the marketing firm to select the most suitable target market anddecide on the firm‟s marketing mix. For example, when New Zealand Milk (M)Sdn Bhd produces the “Anlene Gold” milk powder for those customers above 1year, it is certainly a great decision because no other producers have produced asimilar milk powder to cater for customers of this age group. Recently in year2003, this company have introduced “Anlene Active High Calcium with Bone Maxformula” specially formulated for those above 30s to help reduce the risk ofosteoporosis. vi. Design, implement and maintain appropriate marketing mixesThis involves the process of using the most suitable marketing mix: product,prices, place and promotion to enable the firm target the segmenting of themarket successfully.Selecting Target MarketMany organizations are not usually able to sell goods and services with equalefficiency and success to the entire market, because of limited resources,competition and large markets, example to every market segments. It isnecessary for the sake of efficiency to select target markets. In market targeting,producers identify market segments, select anyone of them and create productstailored to each group. Therefore, in market targeting, marketers need to decide
  13. 13. on how many segments to cover and how to identify the best segment. Themarketing management may choose one of the following alternatives to markettargeting. They are undifferentiated marketing, differentiated marketing,concentrated marketing and micromarketing.Positioning and differentiationThe positioning and differentiation is an attempt to distinguish a company from itscompetitors along real dimensions in order to be the preferred company tocertain segments of the market. Position aims to help customers know the realdifferences between competing producers‟ products, so that they can matchthemselves to other producers‟ product that can be of most value to them.Although positioning is ultimately in terms of the buyer‟s perception, the actionstaken by firms through their marketing efforts provide the essential informationthat buyer‟s process in reaching their perceptions. There are seven positioningbases that every marketer must know. They are: I. Product attributesA product is associated with an attribute, which include the product‟s feature,national creation, economical buy and durability. Scholl is known for its qualityand providing comfort to users‟ feet. II. Benefit offerThe objective here is to position the product‟s benefit in relation to competitors.For example, Colgate‟s “Double Fluoride” reduces cavity. III. Usage or applicationAll products that are introduced into its market have a specific purpose andusage. The Johnson Baby Company‟s positioning strategy involves advertisingthe product to cater for the adult market also. For example, Johnson Baby Lotionfrom Johnson & Johnson is not only advertised for its basic purpose examplelotion for baby skin but is it also useful for adults use.
  14. 14. IV. CompetitorA product can be positioned directly against a competitor. For example the“Pepsi Challenge Campaign” was directly positioned to compete against Coke interm of taste. V. Price and qualityIt stresses on high price as indication for quality. For example, Sony is wellknown for quality sound and picture for its audio equipment and televisions. Alow price may also indicate value. Department Stores like Kamdar and Globe SilkStore has successfully adopted the “lower price and value strategy”, makingthem very popular among the Malaysians consumers. VI. Product userMarketers can position its products based on the type of user or the user‟spersonality. For example, Anlene Gold is specially formulated for adults above 51in great need for high calcium intake to combat osteoporosis. VII. Product classHere, the aim of marketers is to position its product as being associated with aparticular category of products. For example Dorina Margarine is positioned as a“margarine brand” that competes with butter. To many Malaysians who areweight and health conscious, Dorina light Margarine is as good as butter but haslow cholesterol.