BSB126 Chapter Summary Notes.docx

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Queensland University of Technology
Management and Human Resources

Week 6 - Reaching Global Markets Protectionism - practice of shielding one or more industries within a country's economy from foreign competition through tariffs or quotas Multi-Domestic marketing strategy - multinational firms have as many different product variations, brand names and advertising programs as countries in which they do business. Global marketing strategy - used by transnational firms to standardise marketing activities when there are cultural similarities and adapts them when cultures differ. Week 7 - Segmentation Market Segmentation is the process of dividing the total market for a good or service into several smaller, internally homogenous groups. Segmentation is necessary because of:  differences in buying habits  differences in the way the good or service is used  different motives for buying  it is dangerous to treat all customers the same A useful segmentation process must meet 5 criteria. 1. potential for increased profits 2. similarity of needs of buyers within a segment 3. difference of needs of buyers among segments 4. potential of marketing action to reach a segment 5. simplicity and cost of identifying and assigning buyers to segments "First Cut" (basic) segmentation divides prospects into:  ultimate consumers - personal use  business users - use in business, make other product or resell Geographic segmentation divides the market based upon the geographic distribution of the population Demographic segmentation uses the vital statistics that describe a population (age, ethnicity, social class). Psychographic segmentation involves examining attributes related to how a person thinks, feels and behaves (personality, lifestyles, values). Behavioural segmentation is used to segment the market based upon product-related behaviour (benefits desired from product, product usage rates). In targeting, when selecting a segment to pursue, a company can follow one of three broad strategies:  market aggregation - treat the total market as a single segment - product differentiation  single-segment - focus on one segment - niche market  multiple-segment - select two or more segments and devise different marketing mixes for each Week 8 - Product A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, persons, places, organisations and ideas. There is 3 level of products 1. Core - what is the buyer really buying? 2. Tangible - quality level, features, styling, brand name and packaging 3. Augmented - look at buyer's total consumption system Convenience Product: a relatively inexpensive item that merits little shopping effort Shopping Product: a product that requires comparison shopping because it is usually more expensive and found in fewer stores Speciality Product: a particular item that consumers search extensively for and are reluctant to accept substitutes Unsought Product: a product unknown to the potential buyer or a known product that buyers do not actively seek Product Item, Product Line and Product Mix Product Item: a specific version of a product that can be designated as a distinct offering among an organisations products Product Line: a group of closely related products that satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same customer group (AMEX CARD, green, blue, gold) Product Mix: is the number of products lines offered by a company Width - number of different product lines a company carries - DIVERSIFIES RISK, CAPITALIZES REPUTATION Length - the total number of product items the company carries Depth - how many versions are offered of each product in the line - ENHANCES SALE BY SEGMENTATION, CAPITALIZES ON ECONOMIES OF SCALE Consistency - how closely related the various lines are in end use, productions requirements and distribution channels Product Life Cycle 1. Introduction Stage - high failure rates, little competition, limited distribution, negative profits, high marketing and production costs 2. Growth Stage - increased rate of sales, entrance of competitors, initial healthy profit, prices fall 3. Maturity Stage - sales increase, extending product line, heavy promotion to dealers and consumers, prices and profits fall, niche marketers emerge a. Increase number of users - concern non-users, enter new segments b. Increase usage per usage - frequency of use, quantity used 4. Decline Stage - long-run drop in sales, large inventories of unsold items Week 9 - Integrated Marketing Communication Integrated Marketing Communication is a concept under which a company carefully integrates and coordinates its many communication channels to deliver a clear, consistent and compelling message about the organisation and its product. Key concepts of IMC:  Starts with consumer  Builds on number of traditional marketing communication disciplines  Integrates the strategy and the message to maximise impact  Chooses the marketing communication discipline based on IMC objectives  Addresses multiple audiences and builds relationships with them Reasons for the growth of IMC:  Changes in marketplace o mass production/mass marketing/mass advertising o rise in database/marketing/sales promotion o declining audience numbers  Changes in organisational structure o consolidation of advertising agency and public relations agency ownership o increasing qualifications of client o growth in outsourcing o dramatic shift from product to service economy  Changes in consumers o increased education levels o more women in workforce o money rich, time poor o declining brand loyalty  Changes in communication o verbal to visual o free media channels IMC Disciplines:  Advertising - paid, mediated form of communication from an identifiable source  Sales promotion - short term incentives  Direct Mark
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