Unit 3 Marketing

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Unit 3 Marketing
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Learning Objectives

• To define marketing and explain the elements of
  marketing
• To understand the functions of marketing and the
  marketing mix
• To discuss the way of market segmenting and
  targeting

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• Can you recognize which company it is from the
  following website?

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Can you name some of the household products of
IBM?
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• Have you ever thought of why IBM could be so
  popular all of the world?

IBM has undergone a remarkable transformation.
All top IBM managers met face-to-face with
important customers and report back their
problems and priorities.
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What are Consumers Needs, Wants and Demands?

• Needs - state of felt deprivation for basic items
  such as food and clothing and complex needs such
  as for belonging. i.e. I am hungry.
• Wants - form that a human need takes as shaped by
  culture and individual personality. i.e. I want
  a hamburger, French fries, and a soft drink.
• Demands - human wants backed by buying power.
  i.e. I have money to buy this meal.

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The scope of marketing

• In fact, marketing people are involved in
  marketing 10 types of entities
• - Goods ?? - Places ??
• - Services ?? - Properties ???
• - Experiences ?? - Organizations ??
• - Events ?? - Information ??
• - Persons ?? - Ideas ??

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What Will Satisfy Consumers Needs and Wants?
Products Anything that can be Offered to a Market
to Satisfy a Need or Want
Services Activities or Benefits Offered for Sale
That Are Essentially Intangible and Dont Result
in the Ownership of Anything
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Modern Marketing System (Fig. 1-3)
Suppliers
Competitors
Company (Marketer)
Marketing Intermediaries
Environment
End User Market
Environment
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Developing the Marketing Mix
Price Amount of money that consumers have to pay
to Obtain the product
Product Goods-and-service combination that a
company offers a target market
Target Customers Intended Positioning
Activities that persuade target customers to
buy the product Promotion
Company activities that make the product
available Place

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Oral Practice

• An interview
• A a host of an economic TV program
• B an expert on marketing

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• A From June 10th to July 10th, the football has
  been the focus of the world during these 30 days.
  The accumulated number of audience to these 64
  matches has reached about 320,000,000,000, this
  is a great festival the World Cup brings to us.
  However, there has been another world cup in the
  eyes of business men, and those games are more
  intensive, more fierce and crueler, of course,
  they are real matches. This is the war of
  marketing which revolves around the World Cup.

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• B Everyone who watches the World Cup can
  definitely feel that not only the players are
  trying to win the game, the team sponsors are
  fighting outside of the grassland.
• A There are three famous sports brands Adidas,
  Nike and Puma, they choose different football
  teams to support, which one do you think has made
  a brilliant decision?
• B In my opinion, I agree more on Puma.

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• A May I know your reason?
• B In football games, people prefer to focus on
  Black Horse, I think Puma has acted as a Black
  Horse. It firstly launched in the African teams,
  which is a potential market for sports brands,
  this strategy not only grasp a big emerging
  market but also very economic.

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• A We hope Puma can really grasp this new market
  and make great achievements. The World Cup for
  football comes every four years, however, the
  competition on marketing on football or we can
  call it as a war because it may be more violent,
  will never end. It is even a start for most
  Chinese enterprises, because we will play a real
  home game in 2008.

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• Text One
• An Overview of Marketing

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Vocabulary

• availability n. ???
• E.g.local availabilities
• ??????????
• the availability of a candidate
• ??????????

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• solution n.????
• E.g. He came up with a really elegant solution
  to our problem.
• ????????????????????

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• categorize vt. ??, ??
• E.g. If you categorize the information you need
  to remember, you will find it much easier.
• ?????????????,???????????????

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• priority n. ??????
• Itll take three months to repair the house. Now
  patience is something should be a priority .
• ??????????,??????????

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• promotion n. ????
• E.g.
• A What is the next step following the promotion
  campaign?B I guess you need to find someone who
  can bankroll you.
• A ??????????
• B ????????????

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• conception n. ??
• E.g. This concept is at the very core of her
  theory. 
• ????????????.
• I can not understand the so abstract concept. 
• ?????????????

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• split off ??
• E.g.The road splits off from the main street. 
• ????????????

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• tailor-made adj. ???, ???
• E.g.He seems tailor-made for the job. 
• ???????????

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• brochure n. ???
• E.g. I'll send you the brochure right away. 
• ??????????????
• The travel brochure lured me into taking a
  Caribbean vacation. 
• ???????????????????

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• modify vt. ??
• E.g. The policy was agreed by the committee, but
  only in a modified form. 
• ?????????????????
• He'll have to modify his views if he wants to be
  elected. 
• ???????????????.

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Explanation of the text

• The American Marketing Association defines
  marketing as the process of planning and
  executing the conception, pricing, promotion, and
  distribution of ideas, goods, and services to
  create exchanges that satisfy individual and
  organizational goals.

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• ????????????????????????,????????,???????????????
  ????????????????

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• The word create gives marketing an anticipatory
  dimension and emphasizes the forward-looking
  approach necessary to identify future needs and
  wants.
• ?????????????????????,???????????????????????
  ?

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• IBMs marketing managers tried to win over the
  game, they have to understand that the customers
  needs are their goals. Without this concept in
  mind, they could produce only white elephants
  which they could sell to nobody. The concept of
  finding the needs of the consumers and
  satisfying them is the essence of marketing, a
  word literally meaning finding a market and
  serving it.

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Keys to Exercises

• II. Fill in the table below by giving the
  corresponding Chinese or English equivalents.
• ???? deliver solutions
• ????? marketing mix
• ???? pricing
• ?? demand for consumption

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• III. Choose one suitable answer from the
  following four choices to answer the question or
  to complete the sentence.
• B A D D A

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IV. Practical Writing

• The genius XXX Home Appliance Company
  has come up with a new model Microwave ovens
  -EB-3190EG. It can cook the food with amazing
  speed by heating the food. Furthermore its
  convection facility provides fans and a certain
  'airflow' circulation that cooks the food by
  using much less electricity. It can bake, broil,
  cook, re-thermalize and warm the food effectively
  which makes it be the best oven available in the
  market that provides the users with delicious,
  tasty and fast cooked foods.

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• Basic functions of this new model
• 1. Halogen grill
• 2. Electronic operation with LED display
• 3. 10microwave power levels
• 4. 90minutes time setting
• 5. Auto menu auto defrost function
• 6. Child lock
• 7. Quick start key

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• Special Features of Microwave Convection Ovens
  this new model is a wonderful creation. It
  provides the couple advantages of microwave
  methods. There are some other features too that
  make this oven so special.

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• Baking features - During baking, a heating
  element raises the temperature inside the oven.
  So, it can operate temperatures from 225- 450F.
  The fan circulates the hot air throughout the
  oven, over the food and produces brown exteriors
  and moist interiors.

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• Following are some of the other advantages of
  microwave convection oven
• There are heating and cooling switches, which
  heat and cool the food perfectly. The nutrients
  are preserved and the actual taste of the food
  also remains same. The oven operates at much
  lower temperature and leads to 20 decrease in
  cooking time compared to other ovens.

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• If you still don't have an excellent microwave
  oven like this, then hurry up and get yourself
  this oven to provide wonderful dishes to your
  family and friends.

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• Text Two
• Market Selection

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Text B

• To know what the buyers behavior is
• To know how to segment the market
• To know the methods of targeting a market

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Consumer Buying Behavior

• Consumer Buying Behavior refers to the buying
  behavior of final consumers -individuals
  households who buy goods and services for
  personal consumption.
• All these consumers make up the consumer market.
• The central question for marketers is
• How do consumers respond to various marketing
  efforts the company might use?

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Factors Influencing Consumer Behavior
Social Reference groups Family Roles and sta
tus
Personal Age and life-cycle Occupation Economi
c situation Lifestyle Personality and self-conce
pt
Psycho- logical Motivation Perception Learning
Beliefs and attitudes
Buyer
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Steps in Market Segmentation, Targeting, and
Positioning
Market Segmentation 1. Identify bases for
segmenting the market 2. Develop segment profiles
Market Targeting 3. Develop measure of
segment attractiveness 4. Select target segments
Market positioning 5. Develop positioning for
target segments 6. Develop a marketing mix
for each segment
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Step 1. Market SegmentationGeographic
Segmentation
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Step 1. Market SegmentationDemographic
Segmentation

• Dividing the market into groups based on
  variables such as
• Age
• Gender
• Family size or life cycle
• Income
• Occupation
• Education
• Religion
• Race
• Generation
• Nationality

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Step 1. Market SegmentationPsychographic
Segmentation
Divides Buyers Into Different Groups Based on
Social Class
Lifestyle
Personality
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Step 1. Market SegmentationBehavioral
Segmentation

• Dividing the market into groups based on
  variables such as
• Occasions
• Benefits
• User status
• Usage rate
• Loyalty status
• Readiness stage
• Attitude toward product

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Segmenting International Markets
Geographic Location
Factors Used to Segment International Markets
Economic Factors
Cultural Factors
Political and Legal Factors
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Step 1. Market SegmentationRequirements for
Effective Segmentation
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Discussion Connections

• Using the segmentation bases youve just read
  about, segment the skin cream market in our
  country.
• Describe each of the major segments and sub
  segments.

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Step 2. Market TargetingEvaluating Market
Segments

• Segment Size and Growth
• Analyze current sales, growth rates and expected
  profitability for various segments.
• Segment Structural Attractiveness
• Consider effects of competitors, availability
  of substitute products and, the power of buyers
  suppliers.
• Company Objectives and Resources
• Company skills resources needed to succeed in
  that segment(s).
• Look for Competitive Advantages.

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Step 2. Market TargetingMarket Coverage
Strategies
Market
Company Marketing Mix
Company Marketing Mix 1
Segment 1
Company Marketing Mix 2
Segment 2
A. Undifferentiated Marketing
Segment 3
Company Marketing Mix 3
Segment 1
Company Marketing Mix
Segment 2
B. Differentiated Marketing
Segment 3
C. Concentrated Marketing
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The promotional tools

• Advertising ??
• Sales promotion ????
• Public relations and publicity ???????
• Personal selling ????
• Direct marketing ????

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Vocabulary

• laundry n.??
• E.g. When does the wash come back from the
  laundry? 
• ????????????????
• The report on the hospital mentions such
  desiderata as a supply of clean laundry. 
• ?????????????????.

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• variable n. ??
• E.g. Winds are mainly light and variable. 
• ????,?????
• The temperature was a variable in the
  experiment. 
• ????????????

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• diversify vt. ????
• E.g. Hill and woods diversify the landscape. 
• ??????????
• A factory must try to diversify for further
  development. 
• ???????????????????????

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• zero in on ??????
• E.g. The congressional opponents zeroed in on
  the bill. 
• ???????????????????
• The police zeroed in on two suspects who had
  arrived three days before. 
• ?????????3??????????????

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• homogeneous adj.???
• E.g. The state or quality of being homogeneous. 
  
• ?????????????

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Procter Gamble

• Procter Gamble sells many famous brands of
  laundry detergent, hand soap, shampoo, skin care
  potions and disposable diapers in USA

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(No Transcript)
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• why would PG introduce several brands in one
  category instead of concentrating its resources
  on a single leading brand?

Market segmentation Market targeting
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Market Segmentation

• In this increasingly diversified world, no firm
  would be so naive or ambitious as to assume that
  it can satisfy all the needs and wants of all
  people. Marketing managers have long realized
  that, for their efforts to be effective and
  successful, they must zero in on one or
  several, but rarely all, segments of the market.

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Definition

• Market segmentation is the process of dividing
  the total market into several relatively
  homogeneous groups with similar product interests
  based on such factors as
• demographic
• psychographic characteristics
• geographic location
• perceived product benefits.

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1. Geographic variables

• It calls for dividing the market into different
  geographical units such as nations, regions,
  counties or neighborhoods. For example, Campbell
  sells Cajun gumbo soup in Mississippi and makes
  it cheese soup spicier in Texas

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2. Demographic variables

• Factors like age, gender, ethnic background,
  race, religion, education and income make people
  different from each other. Such demographic
  differences influence peoples buying decisions.

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• Procter Gamble boldly targets its Oil of Olay
  ProVital moisturizing creams and lotions at women
  over 50 years of age it helps to improve the
  elasticity and revitalize the appearance of
  maturing skin.

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3. Psychographic variables

• People can also be grouped according to their
  attitudes, motives, activities and opinions.

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• Early in 50s, Ford and Chevrolet were famous for
  their advertisements focused on different
  customers personalities. The owners of Ford were
  likely to be independent, self-central and
  man-like. However, the customers preferred
  Chevrolet were conservative and economical.

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4. Product-use variables

• People buying the same product can be further
  divided according to their use of the product.

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• Take a ball-pen for example, teenagers in school
  like colorful, fancy and toy-like ball-pens,
  however, office clerks prefer sturdy, practical
  and reliable ones.

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Market Targeting

• After evaluating different segments, the company
  must now decide which and how many segments to
  serve. This is the problem of target market
  selection. A target market consists of a set of
  buyers who share common needs or characteristics
  that the company decides to serve.

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1. Undifferentiated Marketing

• Using this strategy, a firm might decide to
  ignore market segment differences and go after
  the whole market with one offer. This
  mass-marketing strategy focuses on what is common
  in the needs of consumers rather than on what is
  different.

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• Coca Colas original marketing strategy was based
  on this form. One product aimed at the mass
  market in the hope that a sufficient amount of
  buyers would be attracted, although there are now
  changes in their product line to cater for
  growing dietary and caffeine free needs of
  consumers.

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2. Differentiated Marketing

• Using this strategy, a firm decides to target
  several market segments or niches and designs
  separate offers for each.

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• General Motors tries to produce a car for every
  purse, purpose, and personality.
• Nike offers athletic shoes for a dozen or more
  different sports, from running, fencing, and
  aerobics to bicycling and baseball.

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3. Concentrated Marketing

• The third strategy is especially appealing when
  company resources are limited. Instead of going
  after a small share of a large market, the firm
  goes after a large share of one or a few segments
  or niches.

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• Oshkosh Truck is the worlds largest producer of
  airport rescue trucks and front-loading concrete
  mixers.
• Tetra sells 80 percent of the worlds tropical
  fish food
• Steiner Optical captures 80 percent of the
  worlds military binoculars market.

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Keys to Exercises

• II. Fill in the table below by giving the
  corresponding Chinese or English equivalents.
• ?????? market segmentation
• ???? area differentiation
• ????? demographics
• ??? market targeting
• ???????? concentrated marketing

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III. Read the following extract about marketing.
In most lines there is one extra word which does
not fit in.

• 1) of 2) if 3) will 4) high
  5)than 6) be 7) use 8) to
  9)CORRECT 10)the

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IV. Finish the crossword quiz with the worlds 25
leading brands.

• NOKIA NESCAFE AMERICANEXPRESS
• GILLETTE CITIBANK ATT
• HONDA IBM BUDWEISER
• COCACOLA BMW TOYOTA
• MCDONALDS MARLBORO INTEL
• SONY MICROSOFT FORD

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• Case Study
• Starbucks Brewing in the Whole World

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SWOT Analysis Starbucks

• Strengths.
• Starbucks Corporation is a very profitable
  organization, earning in excess of 600 million
  in 2004.The company generated revenue of more
  than 5000 million in the same year.
• It is a global coffee brand built upon a
  reputation for fine products and services. It has
  almost 9000 cafes in almost 40 countries.

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• Starbucks was one of the Fortune Top 100
  Companies to Work For in 2005. The company is a
  respected employer that values its workforce.
• The organization has strong ethical values and an
  ethical mission statement as follows, 'Starbucks
  is committed to a role of environmental
  leadership in all facets of our business.'

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• Weaknesses.
• Starbucks has a reputation for new product
  development and creativity. However, they remain
  vulnerable to the possibility that their
  innovation may falter over time.
• The organization has a strong presence in the
  United States of America with more than three
  quarters of their cafes located in the home
  market. It is often argued that they need to look
  for a portfolio of countries, in order to spread
  business risk.

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• The organization is dependant on a main
  competitive advantage, the retail of coffee. This
  could make them slow to diversify into other
  sectors should the need arise.

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• Opportunities.
• Starbucks are very good at taking advantage of
  opportunties.
• In 2004 the company created a CD-burning service
  in their Santa Monica (California USA) cafe with
  Hewlett Packard, where customers create their own
  music CD.
• New products and services that can be retailed in
  their cafes, such as Fair Trade products.

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• The company has the opportunity to expand its
  global operations. New markets for coffee such as
  India and the Pacific Rim nations are beginning
  to emerge.
• Co-branding with other manufacturers of food and
  drink, and brand franchising to manufacturers of
  other goods and services both have potential.

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• Threats.
• Who knows if the market for coffee will grow and
  stay in favour with customers, or whether another
  type of beverage or leisure activity will replace
  coffee in the future?
• Starbucks are exposed to rises in the cost of
  coffee and dairy products.

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• Since its conception in Pike Place Market,
  Seattle in 1971, Starbucks' success has lead to
  the market entry of many competitors and copy cat
  brands that pose potential threats.
• 'Starbucks' mission statement is 'Establish
  Starbucks as the premier purveyor of the finest
  coffee in the world while maintaining our
  uncompromising principles while we grow.'

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• The following six guiding principles will help
  Starbucks measure the appropriateness of our
  decisions
• 1. Provide a great work environment and treat
  each other with respect and dignity.
• 2. Embrace diversity as an essential component in
  the way we do business.

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• 3. Apply the highest standards of excellence to
  the purchasing, roasting and fresh delivery of
  our coffee.
• 4. Develop enthusiastically satisfied customers
  all of the time.
• 5. Contribute positively to our communities and
  our environment.
• 6. Recognize that profitability is essential to
  our future success.