MARKETING

I. Evaluating the Principles of the Marketing Mix and the Benefits of Segmentation for Businesses The basic task of marketing is the delivery of product(s) to consumers so that their needs are fulfilled and organizational objectives are also achieved. This involves several important decisions, e.g. deciding about the product or products which should be offered for sale, price of the product, markets where products may sell and the means of communication with the consumer for the sale of the product. Marketing, as described by Dr. Barakat (2000), is the business function that identifies customer needs and wants, determines which target markets the organization can serve best, and designs appropriate products, services, and programs to serve these markets. It guides the entire organization. And, the normative statements about marketing that specify a condition followed by a suggested action are described as principles of marketing (Armstrong and Schultz 1993). The word normative simply means explicating a norm, where norm is an authoritative rule. Thus, principles are action steps or rules that are authoritative in the sense that they work in a given situation. Another way of looking at these is that they are operational guidelines, telling managers how to act in a given situation. Moreover, in the early 1950s, Neil Borden redefined the position of the marketing manager by introducing "marketing mix" as an integrated set of marketing "tactics" to realize organizational objectives and create a closer, higher value relationship with customers. In the late 1950s, Jerome McCarthy condensed the number of variables in a marketing mix into four principal categories: 1. product: select the tangible and intangible benefits of the product;

2. price: determine an appropriate product pricing structure; 3. promotion: create awareness of the product among the target audience; 4. place: make the product available to the customer. Cited further by McCarthy (1960) it is important to the Four P's that they be regularly reviewed to take into account changes in customer needs and other external influences and that marketing managers adapt their set of controllable variables to face the new conditions. Promotion and price can be adjusted in the short term, not the product itself nor its distribution channels. Decisions involving the marketing mix reinforce one another and strengthen the overall product's position if they are internally consistent and pursued over a longer period of time. The two metrics express this process. One is the mix coherency. It refers to how well the components of the mix blend together. For example, a strategy of selling expensive luxury products at discount stores creates a poor coherency between distribution and product offering. The second one is the mix dynamics. It refers to how the mix must be adapted to a changing business environment, to changes in the organizations resources, and to changes in the product life cycle. However, there are cited pros and cons as to the four principles of the marketing mix. One of the pros is that, at the time, the model created a greater awareness of marketing as an important discipline for organizations. Then, the model's simplicity allowed fast adoption. At the same time, its scope is wide enough to help coordinate key decisions for product introduction, positioning and interaction with target markets. And, the model stressed the importance of combining long term planning with short term planning and control cycle in order to service a target market on an ongoing basis. As to the cons, the model is biased toward consumer markets and physical goods and works less well with industrial products and services where interaction and relationships are

more important. Borden started with thirteen factors in his marketing mix. McCarthy condensed this number to four principal categories. Others have expanded the number of principles and changed the order. Principles of marketing can be found if they are looked at in a fresh light and attention shifted to the logical consistency of marketing decisions. Given the track record of the past, this approach is surely worth trying (Schultz 2003). Ehmke at al. (undated) have their final comment on the Marketing Mix or the 4 Ps. The four Ps product, price, place, and promotion should work together in the marketing mix. Often, decisions on one element will influence the choices available in others. Selecting an effective mix for the market will take time and effort, but these will pay off as to satisfying customers and creating a profitable business. Once one has a good marketing mixthe right product at the right price, offered in the right place and promoted in the right wayone will need to continue to stay on top of market changes and adopt the marketing mix as necessary. Marketing is a part of venture that will never end. Benefits of Segmentation for Businesses One of the marketings processes is the segmentation. Whats on segmentation? Segmentation involves finding out what kinds of consumers with different needs exist. In the auto market, for example, some consumers demand speed and performance, while others are much more concerned about roominess and safety. In general, it holds true that You cant be all things to all people, and experience has demonstrated that firms that specialize in meeting the needs of one group of consumers over another tend to be more profitable. Generically, there are three approaches to marketing. In the undifferentiatedstrategy, all consumers are treated as the same, with firms not making any specific efforts to satisfy particular

groups. This may work when the product is a standard one where one competitor really cant offer much that another one cant. Usually, this is the case only for commodities. In the concentratedstrategy, one firm chooses to focus on one of several segments that exist while leaving other segments to competitors. For example, Southwest Airlines focuses on price sensitive consumers who will forego meals and assigned seating for low prices. In contrast, most airlines follow the differentiated strategy: They offer high priced tickets to those who are inflexible in that they cannot tell in advance when they need to fly and find it impractical to stay over a Saturday. These travelersusually business travelerspay high fares but can only fill the planes up partially. The same airlines then sell some of the remaining seats to more price sensitive customers who can buy two weeks in advance and stay over. Note that segmentation calls for some tough choices. There may be a large number of variables that can be used to differentiate consumers of a given product category; yet, in practice, it becomes impossibly cumbersome to work with more than a few at a time. Thus, we need to determine which variables will be most useful in distinguishing different groups of consumers. We might thus decide, for example, that the variables that are most relevant in separating different kinds of soft drink consumers are (1) preference for taste vs. low calories, (2) preference for Cola vs. non-cola taste, (3) price sensitivitywillingness to pay for brand names; and (4) heavy vs. light consumers. We now put these variables together to arrive at various combinations. Several different kinds of variables can be used for segmentation.

Demographic variables essentially refer to personal statistics such as income, gender, education, location (rural vs. urban, East vs. West), ethnicity, and family size. Campbells soup, for instance, has found that Western U.S. consumers on the average

prefer spicier soupsthus, you get a different product in the same cans at the East and West coasts. Facing flat sales of guns in the traditional male dominated market, a manufacturer came out with the Lady Remmington, a more compact, handier gun more attractive to women. Taking this a step farther, it is also possible to segment on lifestyle and values.

Some consumers want to be seen as similar to others, while a different segment wants to stand apart from the crowd.

Another basis for segmentation is behavior. Some consumers are brand loyali.e., they tend to stick with their preferred brands even when a competing one is on sale. Some consumers are heavy users while others are light users. For example, research conducted by the wine industry shows that some 80% of the product is consumed by 20% of the consumerspresumably a rather intoxicated group.

One can also segment on benefits sought, essentially bypassing demographic explanatory variables. Some consumers, for example, like scented soap (a segment likely to be attracted to brands such as Irish Spring), while others prefer the clean feeling of unscented soap (the Ivory segment). Some consumers use toothpaste primarily to promote oral health, while another segment is more interested in breath freshening. In the next step, we decide to target one or more segments. Our choice should generally

depend on several factors. First, how well are existing segments served by other manufacturers? It will be more difficult to appeal to a segment that is already well served than to one whose needs are not currently being served well. Secondly, how large is the segment, and how can we expect it to grow? (Note that a downside to a large, rapidly growing segment is that it tends to attract competition). Thirdly, do we have strengths as a company that will help us appeal

particularly to one group of consumers? Firms may already have an established reputation. While McDonalds has a great reputation for fast, consistent quality, family friendly food, it would be difficult to convince consumers that McDonalds now offers gourmet food. Thus, McDs would probably be better off targeting families in search of consistent quality food in nice, clean restaurants. REFERENCES EHMKE, C. et al. (undated). Marketings Four Ps: First Steps for New Entrepreneurs. [Online]. Available: http://www.ces.purdue.edu/extmedia/ec/ec-730.pdf [5 September 2011] SCHULTZ, R.L. 2003. Principles of Marketing. [Online]. Available: http://www.theproduct.com/faculty/papers/principles.pdf [6September 2011] BARAKAT, P. H. 2000. Principles of Marketing. [Online]. Available: http://www.sc.edu/uis/pdfs/cil_info_pages/mktgc350_04_info.pdf [6 September 2011]

II. Examining the advantage of branding in relation to the chosen product (Pepsi-Cola) and design n a SWOT analysis for the chosen company

An essential issue in product management is branding. Different firms have different policies on the branding on their products. While 3M puts its brand name on a great diversity of products, Proctor & Gamble, on the opposite extreme, maintains a separate brand name for each product. In general, the use of brand extensions should be evaluated on the basis of the compatibility of various productscan the same brand name represent different products without conflict or confusion? Coca Cola for many years resisted putting its coveted brand name on a diet soft drink. In the old days, available sweeteners

such as saccharin added an undesirable aftertaste, implying a clear sacrifice in taste for the reduction in calories. Thus, to avoid damaging the brand name Coca Cola, Coke instead named its diet cola Tab. Only after NutraSweet was introduced was the brand extension allowed. Research shows that consumers are more receptive to brand extensions when (1) the company appears to have the expertise to make the product [McDonalds was not thought as credible as a photo-finishing service], (2) the products are congruent (compatible), and (3) the brand extension is not seen as being exploitative of a high quality brand name [e.g., one should not use a premium brand name like Heineken to make a trivially easy product like popcorn]. In many markets, brands of different strength compete against each other. At the top level are national or international brands. A large investment has usually been put into extensive brand buildingincluding advertising, distribution and, if needed, infrastructure support. Although some national brands are better regarded than otherse.g., Dell has a better reputation than eMachinesthe national brands usually sell at higher prices than to regional andstore brands. Regional brands, as the name suggests, are typically sold only in one area. In some cases, regional distribution is all that firms can initially accomplish with the investment capital and other resources

that they have. This means that advertising is usually done at the regional level. This limits the advertising opportunities and thus the effect of advertising. In some cases, regional brands may eventually grow into national ones. For example, Snapple was a regional beverage. While a regional beverage, it became so successful that it was able to attract investments to allow a national launch. In a similar manner, some brands often start in a narrow nicheeither nationally or regionallyand may eventually work their way up to a more inclusive national brand. For example, Mars was originally a small brand that focused on liquor filled chocolate candy. Eventually, the firm was able to expand. Store, orprivate label brands are, as the name suggests, brands that are owned by retail store chains or consortia thereof. (For example, Vons and Safeway have the same corporate parent and both carry the Select brand). Typically, store brands sell at lower prices than do national brands. However, because the chains do not have the external brand building costs, the margins on the store brands are often higher. Retailers have a great deal of power because they control the placement of products within the store. Many place the store brand right next to the national brand and place a sign highlighting the cost savings on the store brand. http://www.consumerpsychologist.com/marketing_introduction.html

SWOT Analysis PepsiCo From the web: http://marketingteacher.com/swot/pepsi-swot.html Strengths

Branding - One of PepsiCos top brands is of course Pepsi, one of the most recognized brands of the world, ranked according to Interbrand. As of 2008 it ranked 26th amongst top 100 global brands. Pepsi generates more than $15,000 million of annual sales. Pepsi is joined in broad recognition by such PepsiCo brands as Diet Pepsi, Gatorade Mountain Dew, Thirst Quencher, Lays Potato Chips, Lipton Teas (PepsiCo/Unilever Partnership), Tropicana Beverages, Fritos Corn, Tostitos Tortilla Chips, Doritos Tortilla Chips, Aquafina Bottled Water, Cheetos Cheese Flavored Snacks, Quaker Foods and Snacks, Ruffles Potato Chips, Mirinda, Tostitos Tortilla Chips, and Sierra Mist.

The strength of these brands is evident in PepsiCos presence in over 200 countries. The company has the largest market share in the US beverage at 39%, and snack food market at 25%. Such brand dominance insures loyalty and repetitive sales which contributes to over $15 million in annual sales for the company

Diversification - PepsiCos diversification is obvious in that the fact that each of its top 18 brands generates annual sales of over $1,000 million. PepsiCos arsenal also includes ready-to-drink teas, juice drinks, bottled water, as well as breakfast cereals, cakes and cake mixes.This broad product base plus a multi-channel distribution system serve to help insulate PepsiCo from shifting business climates.

Distribution - The company delivers its products directly from manufacturing plants and warehouses to customer warehouses and retail stores. This is part of a three pronged approach which also includes employees making direct store deliveries of snacks and beverages and the use of third party distribution services.

Weaknesses

Overdependence on Wal-Mart - Sales to Wal-Mart represent approximately 12% of PepsiCos total net revenue. Wal-Mart is PepsiCos largest customer. As a result PepsiCos fortunes are influenced by the business strategy of Wal-Mart specifically its emphasis on private-label sales which produce a higher profit margin than national brands. Wal-Marts low price themes put pressure on PepsiCo to hold down prices.

Overdependence on US Markets - Despite its international presence, 52% of its revenues originate in the US. This concentration does leave PepsiCo somewhat vulnerable to the impact of changing economic conditions, and labor strikes. Large US customers could exploit PepsiCos lack of bargaining power and negatively impact its revenues.

Low Productivity - In 2008 PepsiCo had approximately 198,000 employees. Its revenue per employee was $219,439, which was lower that its competitors. This may indicate comparatively low productivity on the part of PepsiCo employees.

Image Damage Due to Product Recall - Recently (2008) salmonella contamination forced PepsiCo to pull Aunt Jemima pancake and waffle mix from retail shelves. This followed incidents of exploding Diet Pepsi cans in 2007. Such occurrences damage company image and reduce consumer confidence in PepsiCo products.

Opportunities

Broadening of Product Base - PepsiCo is seeking to address one of its potential weaknesses; dependency on US markets by acquiring Russias leading Juice Company, Lebedyansky, and V Wwater in the United Kingdom. It continues to broaden its product base by introducing TrueNorth Nut Snacks and increasing its Lipton Tea venture with Unilever. These recent initiatives will enable PepsiCo to adjust to the changing lifestyles of its consumers.

International Expansion - PepsiCo is in the midst of making a $1, 000 million investment in China, and a $500 million investment in India. Both initiatives are part of its expansion into international markets and a lessening of its dependence on US sales. In addition the company plans on major capital initiatives in Brazil and Mexico.

Growing Savory Snack and Bottled Water market in US - PepsiCo is positioned well to capitalize on the growing bottle water market which is projected to be worth over $24 million by 2012. Products such as Aquafina, and Propel are well established products and in a position to ride the upward crest.PepsiCo products such as, Doritos tortilla chips, Cheetos cheese flavored snacks, Tostitos tortilla chips, Fritos corn chips, Ruffles potato chips, Sun Chips multigrain snacks, Rold Gold pretzels, Santitas are also benefiting from a growing savory snack market which is projected to grow as much as 27% by 2013, representing an increase of $28 million.

Threats

Decline in Carbonated Drink Sales - Soft drink sales are projected to decline by as much as 2.7% by 2012, down $ 63,459 million in value. PepsiCo is in the process of diversification, but is likely to feel the impact of the projected decline.

Potential Negative Impact of Government Regulations - It is anticipated that government initiatives related to environmental, health and safety may have the potential to negatively impact PepsiCo. For example, manufacturing, marketing, and distribution of food products may be altered as a result of state, federal or local dictates. Preliminary studies on acrylamide seem to suggest that it may cause cancer in laboratory animals when consumed in significant amounts. If the company has to comply with a related regulation and add warning labels or place warnings in certain locations where its products are sold, a negative impact may result for PepsiCo.

Intense Competition - The Coca-Cola Company is PepsiCos primary competitors. But others include Nestl, Groupe Danone and Kraft Foods. Intense competition may influence pricing, advertising, sales promotion initiatives undertaken by PepsiCo. Resently Coca-Cola passed PepsiCo in Juice sales.

Potential Disruption Due to Labor Unrest - Based upon recent history, PepsiCo may be vulnerable to strikes and other labor disputes. In 2008 a strike in India shut down production for nearly an entire month. This disrupted both manufacturing and distribution.

PepsiCo is a world leader in convenient snacks, foods and beverages with revenues of more than $43 billion and over 198,000 employees

Report on Pepsi-cola From the web: http://jpkc.szpt.edu.cn/english/article/Report%20on%20Pepsicola.htm

At the 20's and 30's in the 20 century, Coca-Cola was the absolute leader of soft drink market. Pepsi-Cola was just a new brand at that time. Pepsi-Cola was thought of just a copy of Coca-Cola and its flavor is similar to Coca-Cola. So the Coca-Cola did not take any importance for it. But later Pepsi-Cola developed fast and became the strongest competitor to the Coca-Cola And now Pepsi shared 40% of the market. It is a big threat to the Coca-Cola. A. The strengths, the weaknesses, the opportunities and the threats (SWOT) of Pepsi 1. The Advantages of Pepsi-Cola a) Firstly, Pepsi has stayed in this market for almost one century. So they are so experienced and stationed in people's mind deeply. Now no one doesn't know the brand Pepsi-Cola Whenever the name Pepsi is heard, people will conjure up the image of fresh and cool drink. b) Secondly, Pepsi-Cola is not only in high quality, cool and fresh but also have a competitive price in Chinese market* Sometimes Pepsi-Cola even has a lower price than Coca-Cola In China

c) Thirdly. Pepsi is such an experienced powerful global company, Which has a basic of a great fund. So it has the ability to place a Idle sum of money to the promotion. We can see that the advertisement of Pepsi-Cola is so attractive. It also invited the top famous people to advertise for it. The advertisement is so elaborate and attractive so that Pepsi gained the special prize of the advertisement Granny. d) Pepsi also compares with the competitors and find their disadvantages to update its own quality, flavor and also package promptly in order to satisfy the consumers' need. This is the biggest advantage of Pepsi company.

Pepsi-Cola is the most popular one. Pepsi company also produce the Diet-Cola to meet the people who more concern their health. And it just changes the design of the package of Pepsi-Cola. 2. The disadvantages of Pepsi-Cola But we can not consider things just on one side. Still there are some disadvantages existing in Pepsi-Cola The pipe-chat 3 showed that most of the people like the package of Coca-Cola best.48% people like it. It has only 32% people prefer the package of PepsiCola. So the design of Pepsi-Cola's package is not as attractive as Coca--cola. It still needs to be improved. We suggest that the package needs to be designed more colorful to attract people's attention.

3 .Although in the cola market there are many competitors, Pepsi still has the opportunity to enlarge its market share because the cola in the market is quite monotonic. Most of the end user is young people. There are still some people who do not like the taste of the cola. So we can try to provide some other taste of cola such as adding some lemon juice. We can change the flavor in order to meet different taste of different people. 4 .As to the threats, all of us know that Pepsi-Cola and Coca-Cola have had the competition for about 80 years. Although Pepsi-Cola have won several times during this competition, the market share of Pepsi-cola is a little bit smaller than Coca-Cola. There is another threat nowadays. Some local cola such as FeiChang and FenHuang cola have taken their feet in the market. Their advertisement says "Chinese people drink our own cola". It is well known that China is a united and patriotic nation. So these words can really catch

Chinese people's heart. And these local cola's flavor is more suitable for Chinese. So it can not be ignored. B . After analyzing the SWOT 1)Pepsi-Cola should improve the design of the package first. As it is advertised as" the choice of new generation", the design must be looked young and fresh. So the color should be more sharp and attractive. 2) As the flavor and ingredients of cola in the market are similar and the most active consumer is the young people, we can diversify the Pepsi production to meet the different need of the consumers. That is customer-orientated 3) Besides the Diet cola for the ladies, we can have many other new choices. For example, we can create a new kind of cola more suitable for children. Maybe we can add the Vitamins or some nutritious element that are necessary to children. Or we can create a new flavor like mintcola and the cola with very light alcoholic which is more suitable for the adults.

Being in such a tense competition ( just like the brand Coca-Cola), Pepsi-Cola should not take the direct and tough attack upon it. There is no good to either side. The best wad is to keep a peaceful relationship with it and always compare with others, We should find their disadvantages and show our advantages on this aspect. Then by and by, the people would think ours is betted Of course the most important rule is to improve ourselves to meet the consumers.

III. Evaluating External Influences when promoting a specific product and analyzing marketing objectives when planning a promotional campaign

Promotion involves a number of tools we can use to increase demand for our The most well known component of promotion is advertising, but we can also use tools such as the following:

Public relations (the firms staff provides information to the media in the hopes of getting coverage). This strategy has benefits (it is often less expensive and media coverage is usually more credible than advertising) but it also entails a risk in that we cant control what the media will say. Note that this is particularly a useful tool for small and growing businessesespecially those that make a product which is inherently interesting to the audience.

Trade promotion. Here, the firm offers retailers and wholesalers temporary discounts, which may or may not be passed on to the consumer, to stimulate sales.

Sales promotion. Consumers are given either price discounts, coupons, or rebates. Personal selling. Sales people either make cold calls on potential customers and/or respond to inquiries.

In-store displays. Firms often pay a great deal of money to have their goods displayed prominently in the store. More desirable display spaces include: end of an aisle, freestanding displays, and near the check-out counter. Occasionally, a representative may display the product.

Samples Premiums Generally, a sequence of events is needed before a consumer will buy a product. This is

known as a hierarchy of effects. The consumer must first be aware that the product exists. He or she must then be motivated to give some attention to the product and what it may provide. In the next stage, the need is for the consumer to evaluate the merits of the product, hopefully

giving the product a try. A good experience may lead to continued use. Note that the consumer must go through the earlier phases before the later ones can be accomplished. Promotional objectives that are appropriate differ across the Product Life Cycle (PLC). Early in the PLCduring the introduction stagethe most important objective is creating awareness among consumers. For example, many consumers currently do not know the Garmin is making auto navigation devices based on the global position satellite (GPS) system and what this system can do for them. A second step is to induce trialto get consumers to buy the product for the first time. During the growth stage, important needs are persuading the consumer to buy the product and prefer the brand over competing ones. Here, it is also important to persuade retailers to carry the brand, and thus, a large proportion of promotional resources may need to be devoted to retailer incentives. During the maturity stage, the firm may need to focus on maintaining shelf space, distribution channels, and sales. Different promotional approaches will be appropriate depending on the stage of the consumers decision process that the marketer wishes to influence. Prior to the purchase, the marketer will want to establish a decision to purchase the product and the specific brand. Here, samples might be used to induce trial. During the purchase stage, when the consumer is in the retail store, efforts may be made to ensure that the consumer will choose ones specific brands. Paying retailers for preferred shelf space as well as point of purchase (POP) displays and coupons may be appropriate. After the purchase, an appropriate objective may be to induce a repurchase or to influence the consumer to choose the same brand again. Thus, the package may contain a coupon for future purchase. There are two main approaches to promoting products. The push strategy is closely related to the selling concept and involves hard sell and aggressive price promotions to sell

at this specific purchase occasion. In contrast, the pull strategy emphasizes creating demand for the brand so that consumers will come to the store with the intention of buying the product. Hallmark, for example, has invested a great deal in creating a preference for its greeting cards among consumers. There are several types of advertising. In terms of product advertising, the pioneering ad seeks to create awareness of a product and brand and to instill an appreciation among consumers for its possibilities. The competitive or persuasive ad attempts to convince the consumer either of the performance of the product and/or how it is superior in some way to that of others. Comparative advertisements are a prime example of this. For instance, note the ads that show that some trash bags are more durable than others. Reminder advertising seeks to keep the consumer believing what other ads have already established. For example, Coca Cola ads tend not to provide new information but keep reinforcing what a great drink it is. From: http://www.consumerpsychologist.com/marketing_introduction.html

IV. Identifying advantages and disadvantages of primary and secondary research and examining internal and external sources of information available to business when planning an expansion

Manufacturers of different kinds of products have different interests with respect to the availability of their products. For convenience products such as soft drinks, it is essential that your product be available widely. Chances are that if a store does not have a consumers preferred brand of soft drinks, the consumer will settle for another brand rather than taking the

trouble to go to another store. Occasionally, however, manufacturers will prefer selective distribution since they prefer to have their products available only in upscale stores.