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Table of Contents

Introduction..............................................................................................................................3 1. Marketing mixes for two of Sainsburys market segments...............................................3 1.1. Product................................................................................................................................3 1. . Place.....................................................................................................................................! 1.3. Pricing................................................................................................................................." 1.!. Promotion..........................................................................................................................." . T#e additional elements of t#e extended marketing mix...................................................$ 3. Marketing to organi%ations..................................................................................................& !. International marketing orientations..................................................................................' Conclusion.......................................................................................................................... .......( )ibliogra*#y............................................................................................................................1+

Introduction In this assignment we will try to show which are the components of the extended marketing mix and how important are they for the formation of a successful marketing strategy. When we will present each constituent of the extended marketing mix we will give examples for two different market segments within the British retailer Sainsburys.

Further we will speak about the differences in marketing products and services to business rather than consumers and at the end of the assignment we will present some aspects of the international marketing as well as some differences between it and the domestic marketing.

1. Marketing mixes for two of Sainsburys market segments In the early !!!s" Sainsburys " one of the leading retailers in the #$" have obvious problems in mantaining a top position in preferences of the british consumers. %esco" its main competitor" succeeded in the previous years to increase its market share following a very effective marketing strategy &%emporal and 'ee" !!(). %o get back on an upward trend" Sainsburys decided to revise its marketing strategy" drawing on some points some successful ideas used by %esco" but also using some new and original ones. %hus" the consumer markets was divided in different segments" trying to better satisfy different customer categories.
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Further we will talk about two different segments of Sainsburys market from the early years of the twenty*first century" namely Foodie category and Starter families &'evey" !!+).

1.1. Product ,ventually a market segment is represented by a group of customers that have approximately the same needs and wants. -bviously the marketing mixes will be different from each other depending on which market segment addresses.

For example the Foodie category products addresses more to those from the upper middle class" consumers with a high income. For this reason" the products made for this market segment will follow rather to satisfy the customers wants for special and unusual premium foods" so the taste and the presentation of these products will have a great importance in their success. -n the other side the Starter families products addresses for families with children where both parents work. %he products for this market segment must be healthy and easy to prepare. .lso" unlike the first segment presented" here the price matters &'evey" !!+).

%o ensure that a product will have a competitive advantage" the producers uses before its release a process named the /ew 0roduct 1evelopment &/01)" which consists of eight stages2 (. Idea 3eneration * different methods such as brainstorming" SW-% analyse" focus groups or measuring trends are used to generate new product ideas. . Idea Screening 4 the best ideas are selected depending on their profitability and utility. +. 5oncept 1evelopment and %esting 4 at this phase" the company is trying to anticipate customers6 reactions and to see if there are any problems regarding the intellectual property. 7. Business .nalysis * estimating the profitability of an idea and its break*even point.
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8. Beta %esting and 9arket %esting 4 at this stage" a product can be sold only to a test market or presented at fairs. :. %echnical Implementation 4 the company adds more features to the product and estimates the resources and the logistics operations necessary to implement the product. ;. 5ommerciali<ation 4 the market launch of the product and the organi<ation of promotions and advertising campaigns. =. /ew 0roduct 0ricing 4 at this phase" the company is trying to forecast the real value of the product" what profit and revenues it will generate &$otler" et al. !!8).

1. . Place .fter we have ensured that the product will be well received by the consumers from a market segment" the next issue that we must deal with is its distribution %he way in which the distribution is arranged is very important because it provides visibility and attainability to the customers for the products. When it comes to appropriate distribution we must take into account the so*called 8 rights of distribution * the right product" the right place" the right time" the right >uantity and the right price &9alik and Bidgoil" !(!) .

Sainsbury is trying to distribute its products as efficiently so that they can be easily purchased by the consumers. For example in !!+ the British retailer opened two foodie store in 'ondon at the Bluebird 3astrodome in 5helsea and at Wilton ?oad &,vening Standard" !!+). %he placement of these stores in these areas was not a coincidence" knowing the fact that in these areas are living residents with high incomes. In this case we can speak about a niche market segment approaching.

%he distribution of the products from the Starter families market segment will be different because they target a much larger audience with different needs and financial possibilities. %he products from this segment can be found mostly in the Main Mision stores that focuses mainly on supplying for the weekly family shop.
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1.3. Pricing .nother aspect of the marketing mix is the pricing strategy. 0ricing a product should consider the production costs" the profit that a company whishes to obtain and the knowledge of the price which a client would be willing to pay for it. %here are different pricing strategies applied by companies according to the market segments whom it is addressed.

For example" Sainsburys may apply for its Foodie category products a premium price strategy" because consumers from this segment can afford to pay a higher price. .lso a buyer will also assume that an expensive product has outstanding >uality and distinction. In the case of Starter families products" Sainsburys may choose to apply a psychological pricing where the prices are designed to produce a psychological impact &eg. selling a product for @7.AA instead of @8) or a price discrimination strategy which means setting different prices for the same product depending on the different opening times of their stores for example. In order to bring clients to the organi<ation they could also apply a high*low pricing or a marginal*cost pricing &$otler et al. !!8)

1.!. Promotion %he last element of the four 0s model is 0romotion. Basically the promotion represents all of the methods of communication by which a marketer is trying to offer informations about a product to various potential clients. 0romotion can be divided into two categories2 above the line and below the line. .bove the line promotion refers to traditional mass media advertising which runs through television" newspapers" radio" or even on the internet. Bellow the line promotion refers to the advertising methods which are trying to approach a more personal and direct relation with the customers &e.g. price promotions or discounting" coupons" gift*with* purchase" competitions and pri<es" monetary refunds" loyalty incentives and point*of*sale displays).

.s an example of .bove the 'ine .dvertising within Sainsburys we can mention the advertising campaigns which have had in the spotlight the well known television chef Bamie -liver. For eleven years" he was the company6s image" contributing substantially to increasing sales. %hus the Foodie category products were promoted through campaigns as C9aking 'ife %aste BetterD" CSwitch %he FishD" or C%aste the differenceD. . special campaign was launched to promote products that address to the Starter families segment called C Feed Eour Family For @8! a weekD &Sherwin" !(().

Bellow the 'ine .dvertising proved to Sainsburys as important as .bove the 'ine .dvertising. So in !!( Sainsburys /ectar program has been established. %his is a loyalty program based on points" inspired by %esco" that provided for the retailer the opportunity to record demographic and shopping cart data about its customers into a corporatewide database. Basically by this method Sainsburys changed its strategy from a product*centric one to a customers centric one. In the same year the number of the targeted mails have increased with +!!F" due to the use of data obtained through /ectar. .ctually" the market segmentation within Foodie category and Starter families category were created" owes its success to the /ectars database as well &'ewey" !!+).

. T#e additional elements of t#e extended marketing mix %he four 0s model was first introduced in speciali<ed terminology in the (A8!ies and since then the market continued to grow very rapidly. %his led to the necessity of extending the marketing mix by introducing another three 0s" which are people" process and physical evidence" thus forming a new seven 0s model. (. 0eople refers to a company6s employees that come into contact with the buyer. %heir skills" knowledge and attitude have to create a good impression for the entire business in the eyes of the customer. . 0rocess refers to the way in which a service is provided to the customer" being preferable a fast and an efficient mode. +. 0hysical evidence refers to the visible part of a service such as a member card or the environment from a retail unit &$otler" !!8).
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%he new extended marketing mix have to be applied especially when it comes to the services sector. %his sector is very important for the economy of #nited $ingdom" considering that it represents ;=F of the entire 310" and =!F of the #$s labor force is working in services. So the use of the seven 0s model is absolutely necessary for developing a successful marketing strategy &5I. %he World Factbook).

%hese three additional elements of the extended marketing mix are successfully used by Sainsburys when it comes to its Foodie category segments by providing to its clients the best possible customer service in a shortest time. For example its foodie store C9arket at 0imlicoD in Wilton ?oad has ten specialists food counters such as a master butcher" charcuterie" fishmonger" and cheese monger. In the store was functioning as well a stone bake oven for cooking hot pi<<as and a hot carvery for preparing tailor*made sandwiches. . high level of presentation for the products was provided as well &,vening Standard" !!+).

3. Marketing to organi%ations #nlike the consumer markets" the -rgani<ational market refers to the situation where companies or individuals are buying products and services for other purposes than personal consumption. %he marketing mix is still used but in a different way than in consumer markets. %hus in an organi<ational market a buyer will want to know more details about the product or the service which he plans to buy. %he pricing strategy will be different" the price is more flexible and sometimes the buyer and the seller are negotiating the price. %he promotion will be different as well" the most widely used ways being the trade fairs and the exhibitions. When it comes to place the organi<ations are expecting that the items purchased by them to be delivered in a shorter time than in consumer markets because they are buying larger >uantities &$otler" !!8). -rganisational 9arkets can be divided into four categories2 (. Industrial market which refers to the companies and individuals who purchase goods and services for the production of other products and services. . ?eseller market which refers to the companies or individuals who are buying some products or services only for resale them to the consumers.
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+. 3overnment market refers to the fact that certain government agencies buy goods and services in order to assure the government functions. 7. Institutional market refers to some non*profit making organi<ations like hospitals or schools which are buying products or services for the people cared of by these institutions &Imber and %offler" !!=).

!. International marketing orientations In these days many companies are expanding their businesses to other markets in order to increase their profit. %he financial crisis that hit in particular the Western countries determined many corporations to extend their businesses specially to the B?I5S and 9, countries &Bra<il" ?ussia" India" 5hina and South .frica G 9iddle ,ast countries.) %herefore a company who runs its businesses globally will be less vulnerable when it comes to some negative changes among the macro environmental factors from some countries or regions. In order to be successful on the international marketing" a company should have a strong and flexible structure. It needs to establish as well an appropriate international marketing orientation &$owitt" !!A).

%here is an international business model called ,03 which presents three ways in which a company may choose to conduct its businessess globally. %he first one is called ethnocentrism and in this case there are not maHor differences between its domestic marketing strategy and that implemented at an international level. %he second is called polycentrism and refers to the fact that a global company is trying to adapt its marketing strategies and its products to the specifics of each local country or region. %he last one is called geocentrism (regiocentrism) by which a company is trying to establish a balance between its own domestic approach and the adaption to the overseas markets" thus trying not to favor any of them. We can not say which of these approaches is better" each international company is choosing the one that fits best for it &1eresky" (AA;).

Conclusion .fter the elaboration of this assignment we concluded that a marketing mix done properly may change for the better the situation of a company. In this way Sainsburys managed in the first decade of the twenty first century to redefine its marketing strategy by being more concerned with the needs and the wants of its costumers. .s a result of this new strategy" the company has stopped to make losses then followed an upward trend.

We also found that a business will have different re>uirements and expectations of the products or services purchased compared to a customer in the consumer markets and for this reason the marketing mix should be changed by the seller so as to satisfy the different needs and demands of its client. Finally we could notice that in order to succeed internationally a company must be willing to alter its domestic marketing strategy" adapting to the specifics of each market separately" while maintaining its consistency and identity.

!& words were used in t#is assignment wit#out table of contents, in text references and bibliogra*#y.

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)ibliogra*#y

(. 1eresky" I. (AA;. International Management: Managing Across Cultures. ?eading" 9.2 .ddison*Wesley

nd ed.

. ,pure" 9. !!(. Programe de marketing" Bucharest2 ,ditura Fundatiei ?omJnia de 9Jine +. Imber" B. and %offler" B. .. !!=. ictionary of Marketing !erms ("arron#s "usiness

$uides). 7th edition. /ew Eork2 Barrons ,ducational Series" Inc. 7. $otler" 0. et al." ,ducation 'imited 8. $owitt" B. !!A. For 9r. B?I5" nations meeting a milestone. C%% Money KonlineL (; Bune. uneNindex.htmP K.ccessed 8 Banuary !!AL :. 'evey" ?.I. !!+. /ectar Feeds Sainsbury6s Segmentation ,fforts. Chief& Marketer .vailable at2 Mhttp2NNmoney.cnn.comN !!AN!:N(;NnewsNeconomyNgoldmanOsachsOHimOoneillOinterview.fort !!8. Principles of Marketing. 7th ,uropean ,dition. 'ondon2 0earson

KonlineL ( .pril. .vailable at2 http2NNchiefmarketer.comNdirect*marketingNnectar*feeds* sainsburys*segmentation*efforts K.ccessed 7 Banuary !(+L.


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;. 9allik" S. and Bidgoil" I. !(!. !he 'and(ook of !echnology Management: Supply Chain Management) Marketing and Ad*ertising) and $lo(al Management) *ol +. ( ed. Ioboken" /ew Bersey2 Bohn Wiley =. 0istol" 3. !!8. Marketing. Bucharest2 ,ditura Fundatiei ?omJnia de 9Jine A. %emporal" 0. and 'ee" $.5. !!(. 'i,!ech 'i,!ouch "randing: Creating "rand Po-er in the Age of !echnology. ( ed. Singapore2 Wiley (!. Sherwin" .. !((. .fter (( years" -liver6s deal with Sainsbury6s is past its sell*by date. !he Independent KonlineL (+ Buly. .vailable at2 M http2NNwww.independent.co.ukNnewsNmediaNadvertisingNafter*((*years*olivers*deal*with* sainsburys*is*past*its*sellby*date* +( :8!.html P K.ccessed = 1ecember !( L ((. QQQ. !(+. %he World Factbook. ,urope2 #nited $ingdom. Central Inteligence Agency KonlineL ; Banuary. .vailable at2 M https2NNwww.cia.govNlibraryNpublicationsNthe*world* factbookNgeosNuk.html P K.ccessed A Banuary !(+L ( . QQQ. !!+. Sainsbury6s taste grow for foodies. .*ening Standard KonlineL 8 September. .vailable at2 http2NNwww.standard.co.ukNnewsNsainsburys*taste*grow*for*foodies* :A=778+.html K.ccessed ( 1ecember !( L

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