Exam practice question and answer Essay

Marketing can be defined as an organization function and a set of process foe creating, communicating and delivering value to the customer and for managing customer relationship in a way that it benefits the organization and its stakeholders. In order to understand the marketplace and customer needs and wants, marketers need to identify the needs of the consumer, which is defined as the state of felt deprivation, such as hunger and self-actualization needs. Next, it advanced into wants, which is defined as the form of human need that is shaped by culture and individual personality. To satisfy ones hunger, they may opt to eat either rice or noodles depending on their preference. Demand, the human wants that are backed by buying power indicates a person’s financial ability to buy their wants. Organizations need to identify its microenvironment and macroenvironment to identify forces or actors in the business environment that can have effect on the organization’s marketing and business activities. Microenvironment of a company is made up of the company itself, its competitors, the suppliers, customers, marketing intermediaries and the publics. The publics are those people or organization that affect the operations of the organization. There are seven publics in total, which is made up of financial publics, media publics, citizen-action publics, government publics, local publics, general publics and internal publics that affects the marketing operation of an organization. Financial publics are banks and insurance companies that affect the company success in obtaining loan. Macroenvironment is the larger societal force that affects the whole environment. In an organizations macroenvironment, it consist of demographic environment, economic environment, natural environment, technological environment, political environment and cultural environment. Demographic environment is mainly made up of the changing age structure in the population, the changing family, geographical shift in population, better educated and white collar population and increased in ethnic diversity. A changing age structure means that as a person’s age grows, their needs and wants for a certain product will change according to their life cycle. After identifying the environment, marketers will undergo marketing research process. The first step of marketing research process is to define the problem and research objectives, which contains of exploratory, descriptive and causal research objectives. Next, the process will be continued by the development of the research plan from secondary source and primary source. Then it will decide on the research approaches it will utilize whether it is observational, experimental, ethnographic or survey type of research. Then, it researcher will decide on the contact method through mail, telephone, personal and group interviews or online marketing research. Then it will proceed to sampling plan and research instruments like mechanical devices and questionnaire. The processes are completed by implementing the plan and report it to the management. After research, marketers need to identify the factors that influence a consumers purchasing behavior. The factors that determine the buyer decision are personal factors, social factors, psychological factors and cultural factors. Social factors consist of age and life cycle, reference groups and roles and status in the society. For example, according to the age and life cycle of everyone, the needs and wants of an individual differs as their age grows, an old man require a walking stick. In buying a product, consumer may display one of the four buying behavior, which consist of complex buying behavior, dissonance-reducing buying behavior, habitual buying behavior and variety-seeking buying behavior depending on the involvement and the perceived brand difference from the consumers. In buying an item, consumers may go through stages such as problem recognition, information search, evaluation of alternatives, purchase decision and post-purchase behavior. Then, marketers will move on to the next step of the marketing process of designing customer-driven marketing strategy. To create a marketing strategy, marketers need to identify the segments in a particular market. A market is a set of potential and actual buyers of a product. Market segmentation can be divided into four variables, which consist of geographical, demographic, psychographic and behaviorial. But then, there are some criteria in assessing the effectiveness of the segmentation by looking into the measurable, accessible, substantial, differentiable and actionable in the segmented groups. After segmentation, marketers will proceed to market targeting, defined by evaluating segment attractiveness and selecting one or more segments to enter. In evaluating market segments, marketers need to look into the segment size and growth, the structural attractiveness of the segment and the company’s objectives and resources. The companies can decide to use a range of market-coverage strategies such as differentiated marketing, undifferentiated marketing, concentrated marketing or micromarketing depending on the product they offers. After targeting, the company can differentiate their offering by giving superior value from several aspects, product, service, image or personnel differentiation. Customer value is the difference between the benefits gain from using and owning a product and cost of obtaining it. Thus consumer tend to purchase what they perceived as the highest value. Marketer will make their offering superior than of competitors by offer more value in its current offering to justify high price or lower price to compensate for low perceived value. Organizations need to have its own marketing offering in order to deliver value to customers. Marketing offering is a combination of product, service, information and experience that is offered to a market to satisfy a need or wants. Product is anything that can be offered into a market for attention, acquisition, use or consumption that might satisfy a need of wants. Products are classified into three different levels, which consist of core products, actual product and augmented products. Next, marketer will determine whether the product falls into the different categories of the consumer markets such as convenience goods, shopping goods, specialty goods and unsought goods. Or if it is industrial goods, the category of materials and parts, capital items and supplies and services. In service, its characteristic is intangible, inseparable, perishable and variable. Price is sum of value that the customer exchanges for the benefits from using or having a product or services. The internal factors that affect pricing are the marketing objectives, the marketing mix strategy, cost and organizational consideration while the external factors are market and demand, competitors price and offer and other factors such as economic conditions and government regulations. Some of the approaches in pricing are cost-based pricing, value-based pricing and competition-based pricing and price skimming and penetration for new innovative products. Promotion is an act that persuades the publics about the products or brands merits. In influencing the consumers to buy its products, marketers can utilize integrated marketing communication tools such as advertising, direct marketing, personal selling, sales promotion and public relation. For example, marketer can use sales promotion in the form of tools such as coupons, rebates and discounts that act as sort-term incentives to build add-in value to encourage people to buy it products. The next tool is place where it describes how the product is made available to customer. Marketer can examine the number of marketing intermediaries where it consists of intensive distribution, exclusive distribution and selective distribution. For example, the goods that run on intensive distributions are normally fast moving consumer goods that are stocked in as many outlets as possible. It is available anywhere and anytime. Process involves the process that is part of the service. For example, if a car owner who experience poor customer service during one of his regular service, then he or she will not recommend the company to others and is less likely to rebuy the brand. People in an organization determine the success of the organization’s process in delivering superior value and satisfaction. Example, a lack-trained employee may mislead a customer into buying the wrong needs. Physical evidence is the quality of services in physical feature the customer can see, such as brochures and facilities. Without the presence of lecture halls, one could doubt the presence of the university whether it is a place for academic learning. In building profitable customer relationship, one must look into the customer satisfaction, which is defined as customer evaluation of the product or service feature, or the product or service itself. Customer satisfaction prompt repeat purchase thus is important. Satisfaction is influenced by the customer’s past buying experience from the company or its competitors, the information given and promises by the company or its competitors and what the customer thinks of a fair value in the price they paid. Feedbacks, mystery shoppers and exit interviews set a platform to improve the customer satisfaction which then strengthens the bond between the company and the customer thus leading to higher customer loyalty. After accessing satisfaction, marketers need to concern by building and maintaining profitable customer relationship by delivering superior customer value and satisfaction. Retaining current customer relationship is cheaper than to attract new customer. In retaining customers, marketers can implement club and frequency marketing program to strengthen bonds with the customers. By building strong customer relationship, a company can capture value from customer in the form of loyalty, profits and the spread of word of mouth from them. When the company produces superior value to the customers, most likely it will generate high customer satisfaction. High satisfaction lead building long lasting relationship with the customer gaining the loyalty of these customers in a long period, profits will eventually grow. Companies aim to achieve lifetime customer value, share of customer and customer equity from the customers.. All in all, by creating, delivering superior value and developing a strong customer profitable relationship, one can achieve returns like profits and sales, a monetary return and brand loyalty from the loyal customers. Q3. The six forces in an organization’s macroenvironment is cultural environment, political environment, economic environment, technological environment, demographic environment and natural environment. Demographic environment is based on the utility of demography, which is defined as the study of human population in terms of size, religion, occupation, age, sex and education. The changing age structure of the population is one of the factors that affect the macroenvironment. People of different age have different wants and needs and will continue to change as their age varies. The increase in aging population because of low birth rates and higher life expectancy has change the demand for certain products in the market. For example, youths wants products that match their lifestyle of cool and adventurous like game consoles, skateboards and smartphones while those baby boomers typically in their 50s now wants products like vacation, massage chair and antique vase. Geographical shift in population is also one of the factors. It can be categorized into movement between states, movement from rural to urban areas and movement from city to suburbs and back again. For example, the need for air-conditioning is more likely to be in demand in the Northern Territory, which is very hot than the demand in Sydney, which is cooling. A better-educated and more white-collar population has trigger the demand for formal attires such as a suit and corporate skirt. Next, an increasing of ethnic diversity in Malaysia has trigger the rising demand for wasabi and rice from the Japanese population that migrated to Malaysia. Every group of people has their specific wants depending on their attitude, behavior and buying habits too. Q6. Consumer product is made up of convenience products, shopping products, specialty products and unsought products. Convenience products are consumer products and services that the customer usually buys frequently, immediately and with minimum comparison and buying effort. It can be relate to habitual buying behavior too when the purchase of a product is made without much consideration and it is cheap despite widely available. Examples are washing powder and broom. Shopping products are less frequently purchased consumer products and services that customers compare carefully on suitability, price, quality and style. Consumers spend considerable amount of time and effort to access information about the products. It is classified as in complex buying behavior. Examples are television and laptops. Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase purpose. It is classified under the buying behavior of complex buying behavior and dissonance reducing buying behavior. This kind of product is purchase without much comparison with other brands. Examples are a Gucci handbag and a luxury car. Unsought goods are consumer products and services that the consumers either doesn’t know about it or knows but do not consider buying it. These products need intensive marketing such as promotions and advertising. Examples are funeral services and life insurance.