Marketing Principles

Unit -4

Submitted by Khant Zaw Hein

Business-B
Year 1, Semester 1
Table of Contents
Introduction...........................................................................................................................................2
Objectives..............................................................................................................................................2
Executive Summary...............................................................................................................................3
Task (1)..................................................................................................................................................4
Task(1.1) The various elements of marketing process...........................................................................4
Task (1.2) Benefits and costs of marketing orientation for a selected organization..............................6
Task (2)..................................................................................................................................................8
Task (2.1) Macro and micro environment factors which influence marketing decisions.......................8
Task (2.1) Segmentation criteria to be used for products in different market.....................................13
Task (2.3) Choosing a targeting strategy for selected product or service............................................15
Task 2.4 Buying behaviors and their effects on marketing activities...................................................16
Task (2.5) New positioning strategy for selected product or service...................................................18
Task 3...................................................................................................................................................21
Task (3.1) how products are developed to sustain competitive advantage.........................................21
Task 3.2 How distribution is arranged to provide customer convenience...........................................23
Task 3.3 How prices are set to reflect an organization's objectives and market conditions................25
Task 3.4 how promotional activity is integrated to achieve marketing objectives..............................27
Task 3.5 Additional elements of marketing mix...................................................................................29
Task (4)................................................................................................................................................31
Task (4.1) Plan marketing mixes for two different segments in consumer market..............................31
Task (4.2) Differences in marketing products and services to business rather than consumer market
.............................................................................................................................................................32
Task (4.3) how and why international marketing differs from domestic marketing............................33
Conclusion and recommendations......................................................................................................35
References...........................................................................................................................................36

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Introduction
In the success of the businesses, the performance of its marketing department or team is
crucial. Marketing can be assumed as the most basic process in a company. Marketing
decides what to produce, to whom the products are sold, where to distribute and many more
basic parts of the firm's functions. Depending on the results of homework marketing, the
production department does production. The marketing department determines what will
satisfy the customers. Without the customer satisfaction, the sales department's effort will be
non-sense. Then, the profit of the business will decrease. The marketing has much influence
on the success of the business. So, knowing the marketing principles is crucial in running a
business. As a marketing student, we are going to understand the important principles of
marketing and use in our real situations when we get to workplace.

Objectives
The completion of this assignment aims to get the following knowledge and experience about
marketing.

To understand the concept and process of marketing

Be able to use the concepts of segmentation, targeting and positioning

Understand the individual elements of the extended marketing mix

Be able to use the marketing mix in different contexts

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Executive Summary
This assignment is formed of important theories and principles of marketing. In the first part
of the assignment, concept and knowledge about marketing process are explained. Then,
marketing strategy is discussed. Marketing strategy includes three parts segmentation,
targeting and positioning. Next, how the marketing mix should be arranged is suggested.
Moreover, additional elements of extended marketing mix are expressed. The practical
arrangements of Yatha marketing mix are also expressed. Finally, the international marketing
is discussed to get knowledge to enter international market.

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Task (1)

Task(1.1) The various elements of marketing process

A long time ago, marketing was considered as only telling and selling. But nowadays, most
of the marketing gurus talk about marketing as a value delivery process including five steps.
Simply marketing process is a way formed of procedures that lead to customers' satisfaction
by filling their needs and wants. Each step of marketing process consists of main elements
that shape it. For the smooth run of marketing process step by step, we must clearly
understand the elements in each steps. Five steps of marketing process are as follows.

1) Understand the marketplace and customer needs and wants

2) Design a customer driven marketing strategy
3) Construct an integrated marketing program that delivers superior value
4) Build profitable relationships and create customer delight
5) Capture value from customers to create profits and customer equity

Understand the market place and customer needs and wants

The overall objective of all marketing activities is to satisfy customers' needs and wants. So,
as a marketer, we need to know customers' needs and wants. In order to be a successful
business, we must also understand changing marketplace. If we understand needs and wants
of customers and adapt the marketplace, our businesses will be surely successful in the
market. The main elements we have to focus in the first step include needs, wants, demands
and market offerings, value and satisfaction, exchange and relationship and markets. In this
stage, we just only analyze customers' needs and wants and the environment. So, we must
carry out marketing research and plan a marketing information system. We need to seek for
the market opportunities from the data we collected. After we have evaluated the market
opportunities, we can select our target market for which we can serve best.

As Yatha Company, we must firstly consider the type of soft drink that Myanmar people will
like. So, we need to carry out marketing research in order to know what Myanmar people
needs and wants are. The researches should be analyzing not only customers' needs and wants
but also market opportunities. As Yatha has plans to enter international market, we should
analyze international market through secondary research. Although primary research is more

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effective than secondary research, it is really costly and time consuming. Then, it is not easy
to go to another country and do primary research. We need to know the information about all
above core elements of the first step. That information will help us in planning for Yatha's
future production.

Design a customer driven marketing strategy

It is the beginning of the planning activities. In this step, we use the information we collected
in the first step to design a customer driving marketing strategy. As it is very beginning of the
all marketing strategies, we first must fill basic strategic planning. We have to divide the
market into many segments. Then, one segment that we can serve best is targeted to create
value proposition for it. Value proposition of a company is a set of benefits that is delivered
to customers to satisfy their needs and wants. In designing a marketing strategy, the basic
concept is to set our main target and to choose a method to serve that target. Then, we occupy
a place in customers' minds through a favorable market offering. The core elements in this
step are segmenting, targeting and positioning.

For Yatha Soft Drink, it is the stage of creating value proposition for both existing and
potential consumers. A segment should be targeted by Yatha to give the most valuable
products. Yatha should also use a winning positioning strategy to get a clear and distinctive
place relative to competitors like Max Soft Drink Company in the minds of consumers. In the
case of entering into international market, we should use Ansoff's market expansion grid.

Construct an integrated marketing program that delivers superior value

In the third step, the firm delivers superior value to customers through integrated marketing
plans and programs. The plans and programs are action forms of the marketing strategy. The
main content of a marketing program is the marketing mix of the firm including four main
tools: product, price, place and promotion. According to the aspect of integrated marketing,
all departments of the firms implement the marketing programs together.

In the case of Yatha Soft Drink, we should set the plans and programs that fit with the
marketing strategy. We should make a value that is higher than our competitors by creating
add-ons in the marketing mix. Moreover, the completion of our plans and programs should be
in the integrated form. The result of integrated marketing reduces the competition among the
departments of the firm. After completing all the tasks in this stage, the firm must be ready
for delivering high-valued products to customers.

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Build profitable customer relationship and create customer delight

The above three steps leads to this step in which the firm build customer relationships
through customer relationship management (CRM).Although CRM is narrowly defined as
customer data management activity, it is deeper than that kind of activity. Actually, CRM is
the overall process of building and maintaining profitable customer relationships by
delivering superior customer value and satisfaction. The most important thing in this step is
superior customer value and customer satisfaction. Customer satisfaction bases on the
customer perceived performance related to expectation. If the performance fails to implement
customer's expectation, the customer is disappointed. If the performance catches the
expectation, the customer is satisfied. If the performance exceeds the expectation, the
customer is delighted. In the fourth step, the firm must also build a good relationship with
marketing partners. The core elements in this step are customer value, customer satisfaction,
customer relationship level and tools and partner relationship.

Capture value from customers in return

This step is nothing but the firm consequently consumes the benefits of creating customer
value in the former steps. In this step, the firm generates sales process in order to get market
shares and finally profit. The firm also considers customer after sales services and customer
retention to get customer loyalty and customer equity. The main elements in this step are
sales, profit, market shares, customer retention, customer loyalty and customer equity.

Task (1.2) Benefits and costs of marketing orientation for a selected

organization
Nowadays, most successful businesses are using modern marketing management concept as
the marketing management aspects can build strong customer relationship. Business theorists
have passed many steps to get to the right theories of marketing concept. The basic theory of
marketing concept is to satisfy customers' needs. Before getting into the modern marketing
management concept, the businesses went through three earlier concepts such as production
concept, product concept and selling concept.

Production concept has been used frequently at the end of 19 th Century. Production concept
involves producing high volume of products at low prices and mass distribution. Production

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concept is used with the expectation that the customers will prefer the product which is easily
available at low price. This production concept may be useful in markets where the products
are scare and the customers are interested in availability rather than quality and features.

The product concept is a product-orientation concept in which the quality and features of
product are assumed to be the most important thing in to penetrating the market. This concept
proposes the customers will choose product that can give better attributes. This type of
concept of may be useful in niche market in which the products are specially made for limited
customers. This concept also does not consider the needs and wants of customers. The
businesses produce what they think to be popular. So, it can lead to marketing myopia.

Selling concept proposes to get the high sales volume through large-scale selling and high
promotion effort. Businesses use selling concept believing the customers should be persuaded
to buy the products. The customers are persuaded with a lot of selling techniques even
including hard selling technique. In this concept, the whole marketing is assumed to be
selling. Due to the persuasion through large-scale selling and promotion methods, the
customer may buy the product at the first time. After using the product, he may be
dissatisfied by the product as it may not fit with his expectation. Selling concept can also
lead to marketing myopia as it goes for short-term and long term loyalty of customers cannot
be seen in this concept.

After the three concepts that lead to marketing myopia, modern marketing management
concept which does not lead to the marketing myopia is discovered. Modern marketing
management concept is based on the needs and wants of customers. According to customers'
needs and wants, marketing activities are carried out. The main aspect of marketing is the
firm gives what the customers want in a profitable way. All the products and services are
produced to satisfy the customer's expectation in this concept. All departments of the
business work in holistic form in order to satisfy the customers' needs specifically.

Marketing management concept has many benefits while some costs exist on the other side.
The first and main benefit of marketing management concept is that it can specifically know
and satisfy customers' needs and wants. Secondly, it can build long-term customer
relationship as it is customer-centered concept. The products are sold itself in this marketing
management concept. Formal strategic marketing planning such as targeting, segmenting and
positioning are used in this concept. By the help of those strategies, the products are delivered
to the right customers effectively. As the marketing is made by all departments of the firm in

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the integrated form, the conflicts and competition among the departments are reduced. Fluent
connection of work between departments makes the firm more efficient. Although the
marketing management concept does not lead to marketing myopia, it has some
disadvantages. In marketing management concept, we have to make many research and
development programs. These researches are very costly and time-consuming. And these
researches cannot be affordable for small businesses. However, the marketing management
concept is the best concept in satisfying customers' needs.

Task (2)

Task (2.1) Macro and micro environment factors which influence

marketing decisions
Marketing environment is formed of two sections including task environment and broad
environment that have an impact on the company's capacity to deliver the value successfully
to the customers. Generally, the task environment of a company consists of the actors that
concerned with producing, distribution and promoting of the company's offering. This means
the task environment of the company contains internal factors that are in the operational level
of the company consisting of the company itself, suppliers, distributors, dealers, and target
customers. These are called internal factors. The broad environment, the external forces that
have effects on the business, includes demographic environment, economic environment,
social-cultural environment, natural environment, technology environment and political-legal
environment. In fact, both internal and external factors have influence on the company's
marketing decision making. That's why these factors are called micro and macro
environments of the company.

Micro environment factors

Micro environment factors contain the internal factors which are usually controllable. In
creating customer value and building customer relationship, marketers can't do this in one
way process but also adjust the factors which have influence on the marketing decisions. The
followings are micro environment factors and how they influence on the marketing decisions.
(1)The company

In a company, the marketing department is linked with many other departments. The
functions and plans of the marketing department are affected by other departments or vice

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versa. So, the designing of the marketing plan is considered related to the company's other
groups containing top management, finance, research and development (R&D), purchasing,
operations and accounting. These all are known as internal marketing. Although the
marketing department mainly makes the marketing decisions, its decisions are based on the
company's mission statement and objectives set by top management. Sometimes, the
marketing department may have to adjust the other departments. For example, research and
development makes the product attributes that the marketing department suggests. The
accounting department points out the financial plan that the company may be able to product
that kind of products or not. It is certain that the marketing department is influenced by other
department in decision making.

(2)Suppliers

Suppliers have strong impact on the whole value delivery process as they supply resources
that are essential to the firms. Firstly, without the supply of resources, the firm cannot do
anything. Not only the marketing department but also the rest departments of the firm may
have to stop their work in the lack of supply. For example, Yatha cannot produce soft drinks
without the supply of carbonated water. Yatha's packing process will stop in the lack of glass,
plastic or cans supply. On the other hand, rise in the cost of raw materials can forces the
prices of the products or services to increase. Consequently, the rising prices affect the sales
volume of the company. Moreover, the quality of raw materials supplied can also affect the
quality of the products or services. So, Yatha must wisely choose the suppliers and build
close relationship with the suppliers. In conclusion, Yatha should treat suppliers as partners in
creating and delivering customer value so as to be a successful business.

(3)Marketing intermediaries

Yatha needs to consider marketing intermediaries in developing marketing strategies as they

participate in promoting, selling and distribution of the products in value delivery process.
The marketing intermediaries range from the resellers, physical distributors marketing
agencies and media to financial intermediaries. Resellers include wholesalers and retailers
both of which hold the company's products and sell to final consumers. Physical distributors
include places such as warehouses which store the products and logistic firms that help the
company in moving the products from the origin to respective destinations. Marketing
agencies firms are composed of marketing research firms, advertising firms and marketing
consulting firms that aid in the company's marketing process and promote the products to

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customers. Media is also an important intermediary for the company. The negative content
about the company in media can harm the company's overall success. In contrast, positive
media content leads to company reputation. Financial intermediaries include financial
institutes such as banks, insurance companies and credit companies. They help financial
transactions and insure against the risks in the buying and selling of goods. Financial
intermediaries give safety and liquidity in business transactions to a firm. In conclusion,
Yatha should have strong relationship with intermediaries by working with them as partners.

(4)Competitors

Most of the firms in the competitive market are affected by the competitors in various ways.
The most important thing in marketing is to deliver more valuable products than competitors
do. That's why a company needs to know its main competitors and their activities. In order to
draw winning marketing strategies, marketer must consider strengths and weaknesses of
competitors so that he can get ahead of the competitors. Competitors not only contain current
intention of competition with existing competitors but also encompass a variety of
challenges. According to Porter's five forces analysis, challenges also consist of new entrants
to industry, substitute products or services, threat of customer bargaining power and threat of
supplier bargaining power. Marketer has to care deeply about the challenges as they all affect
the intention of competition within a market which consequently influences the marketing
decisions.

Yatha has a lot of competitors as a firm in competitive market. Therefore, the monitoring the
competitors' activities and adapting them are essential for Yatha. Yatha is strongly impacted
by new entrant firms and substitute products as the country economy is turning to free market
economy in which the barrier to entry into the market is low. Then, the bargaining power of
consumer is relatively raised due to the increasing choices of products. Yatha have to
differentiate its products apart from competitors to get a position in the market.

(5)Publics

Publics encompass a wide range of groups including financial publics (banks, stockholders),
media publics (newspapers, magazines, radio and television), government publics, citizen-
action publics (consumer organizations, environmental group and others), general public and
internal public. All these groups have actual or potential interest in or impact on the firm's
ability to get its objectives. For example, financial public can influence the company's

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performance by providing funds for future plans. Media public may influence customers'
opinion on the company by pushing articles about the company's products. Government
publics impact the company's actions by legislation and laws that the company must follow.
Citizen action publics may question actions that can harm customers or environment. General
public's opinions on the organizations which may be positive or negative have strong
influence on the sales volume of the company. Finally, internal public, employees that the
company recruited, affect the company's overall performance.

Yatha can get required amount of funds if it has good relation with financial partners. Yatha
should get good opinions from various groups of citizen publics and general publics by using
media publics. Publishing actions of the company can prove what the company is doing and
why the company does it. It will convince the citizen action publics and general publics.
Next, Yatha should care about internal public. Yatha should care starting from the
recruitment section. Then, employees' abilities and skills should be improved through
trainings. Finally, Yatha should consider the skill and ability of the employees in setting
marketing plans.

(6)Customers

The final goal of all marketing activities is to satisfy the target customers' needs and build
strong relationship with them. It can't be wrong to say all marketing plans depend mainly on
the customers. There are five sorts of customer market each having its own market structure
and characteristics. They are consumer market, business market, reseller market, government
market and international market. Consumer market is formed of individual customers who
buy the products for personal use. In business market, the businesses buy the products to use
in their own productions. Reseller market is made of customers that buy the product to resell
it. Government market buys the products for use in public services or distribute to people
who need them. International market represents customers from other countries that includes
all above four categories. Yatha has to consider the demand of each consumer market.

Macro environment

Macro environment factors are usually in the national level which has influence on many
organizations in the market. They are not close to the firm and we seldom control them.
Although they are not too close to firms, firms must adjust the macro environment factors to
smoothly achieve the objectives. The followings are macro environment factors.

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Demographic environment

Demographic environment is concerned with the studies of human populations. It means the
study of people. The understanding of demographic environment is crucial for marketers
since the market is made of people. The studies are in terms of size, density, sex, age,
occupation, race, location, education and many other things. These many kinds of studies
help the marketers to segment the markets into different groups. Moreover, the marketers can
easily know which segment they can serve best and can target it. For example, Yatha can
study the population density which reflects the amount of consumption to protect overstock.

Economic environment

In economic environment, we mainly consider the income level of customers and their
spending patterns. We emphasizes on the changes in income of customers and their
distributions of income. Yatha must consider economic environment in setting marketing
plans because the level of income and spending patterns have strong influence of
consumption of the products. For example, imagine Yatha produces a soft drink which has
very good taste and quality while the level of income of customers is falling. According to
Engel's law, the amounts of money spend on various things increases as the income rises. But
in this case customers can't afford to buy high quality product with high price because of low
income. Then, Yatha will face with decrease in sales volume. That is why Yatha must
understand the economic environment.

Natural environment

A company's natural environment includes natural resources used as raw materials in

production. It has strong impact on the company's operation because the company can't
produce products without raw materials. The marketers need to consider scarcity of
resources, pollution and government interventions dealing with natural environment.
Increasing scarcity of resources will affect Yatha ability of production. Yatha have to reduce
pollution caused by the Yatha's factory because the reputation of the business can be affected
by the enormous pollution. Yatha will face with stringent interventions by the government
through protection laws which make the business harder to reach its goals.

Social cultural environment

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Social cultural environment is the most challenging force of the macro environment. People's
beliefs and attitudes are shaped by the society in which they grow up. Social conditions
influence people's general behavior including buying behavior. The culture of the society also
has core influence on the beliefs and behaviors of the people. The culture of society has been
established for many years by passing generation to generation. Kotler expresses the culture
is the most fundamental determinant of a person's wants and behaviors. So, it is definitely
difficult to change beliefs and behaviors of the society. Besides, that cultural beliefs and
behaviors are reinforced by other institutions such as schools, governments, etc. Yatha have
to adapt the beliefs, attitudes, and behaviors of the people which are shaped by their culture
and society.

Technological environment

Technological environment is the most changing one of the macro environment. The
technology enhancement can raise the efficiency with which the businesses can operate. One
of the most enormous changes in technology is the internet. Nowadays, the businesses can do
market research by online questionnaires. The business can sell the products from online.
Moreover the new technology for sales forecasting can make the business easier to forecast
the sales. Indeed, the technology makes people easier to work and can give the efficiency.

Political legal environment

This sector is the starting point on which many other macro environment factors depend. In
this sector, the role of government is vital. The policies set by government, laws, legislations
and pressure groups are visible changes of political legal environment. They limit both the
businesses and individuals in the society. For example, cigarette businesses are not allowed to
market young children and the children are also restricted not to smoke. Policies emph asize
on ethics and social responsibility. Legislations are made to protect consumers and for the
welfare of society. For example, consumer protection law is set to protect the right of
consumers. Yatha must be aware of the laws, polices and restrictions and follow them. If
Yatha does not follow the restrictions, the penalties will be given by the government.

Task (2.1) Segmentation criteria to be used for products in different

market
Segmentation is a marketing strategy in which the business divides the broad market into
segments, each sharing similar wants, behaviors, buying power and geographic location. The

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businesses segment the market because they cannot serve the entire market in which there are
numerous consumers with different needs, buying behaviors and buying powers. So, the
businesses choose the segments for which they can serve most effectively with their limited
resources. Most businesses segment the market depending on the two groups of variables.
The first one is consumers' characteristics which include geographic, demographic and
psychographic segmentations. The second one is consumers' responses to the products which
include behavioral segmentation. Therefore, we can use four major segmentation methods
including geographic, demographic, psychographic and behavioral segmentations.

Geographic segmentation

Geographic segmentation is dividing the market into geographical units in terms of districts,
cities, nations, neighborhoods and regions. It is possible to serve all segments if the business
has ability to do so. But the difficulty is the business has to bend on variations of the location.
For example, we should sell some hot drinks like coffee instead of soft drink in cold regions.
In Yatha soft drink, we find that the business is not using geographical segmentation.

Demographic segmentation

Demographic segmentation is segmenting the consumers in terms of variables such as age,

gender, income, social class, family size, family life cycle, occupation, education, religion,
race, generation and nationality. Demographic variables are frequently used by marketers
because they are easily measurable. Moreover, the usage rates, wants and preferences are
closely related with demographic variables. Among the variables, Yatha should use income
segmentation because it is easy to use and can divide the market into very visible segments.

Psychographic segmentation

Psychographic segmentation is based on the interests, opinions and activities of the

consumers. Consumers' interests, activities and opinions are different according to the
variables such as lifestyle, personality and value. Even consumers who have the same
incomes can have different opinions and interests. The psychographic segmentation is the
solution to solve that kind of problems. Yatha should sometimes use psychographic
segmentations to serve the consumers specifically.

Behavioral segmentation

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In behavioral segmentation, the consumers are grouped according to their knowledge,
responses, usage, and loyalty dealing with the products. The variables in this segmentation
include occasion, benefit, user status, user rate and loyal status. Behavioral segmentation can
improve rate of usage and loyalty of consumers to the products. Yatha is found to be using
behavioral segmentation such as occasions on Thadingyut, Tasaungdine, and New Year Days
and so on. The company is using various kinds of sales promotion for its products.

Task (2.3) Choosing a targeting strategy for selected product or

service
Targeting is a consequent strategic concept of segmentation. In this sector, the business
selects the most convenient and effective segments that has been evaluated. In general, the
business evaluates the segments by measuring the costs to serve those segments and the
potential revenues from those segments. There are three targeting strategies that the business
can use according to its ability and nature in the market.

Undifferentiated marketing

In differentiated marketing, a large volume of consumers formed with different segments is

provided with the same product which commonly covers the most of consumers' needs. The
marketer doses not provide any differences for different consumers. The marketer uses only a
single marketing mix that is one product, one price, one distribution method and one
promotional strategy to reach the mass consumers. This strategy is suitable for those firms
which can act mass production, mass distribution and mass communication. Bending on the
nature of the product, this structure is also useful for products like sugar and salt which are
essential daily used products and it is naturally cannot be differentiated. Sometimes, it is also
effective in the launching of a new product as a task to the market. Then, marketer needs to
consider competitors marketing strategies. When competitors' are using differentiated
marketing strategy or concentrated marketing strategies (expressed below), using the
undifferentiated marketing will be suicidal. The final thing to consider in choosing this type
of targeting strategy is the marketer's skill to reach many consumers' needs. Yatha should not
use this strategy because of the mature product life of its products. Yatha introduced the
products since 2010 when it established. It is time to make something different to retain the
position in the market.

Differentiated marketing

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In differentiated marketing strategy, the marketer emphasize on two or more different
segments. The marketer provides different products which are specific to different target
consumers. And also the different marketing mixes that tailor for each targeted market
segment are used in this strategy. This strategy is completely useful for those products which
can be varied in design such as cars, phones, cameras and etc. It is also convenient to use
when the products of the businesses are in the mature stage. It makes the most sense in those
companies which can afford costly researches and product developments. As differentiated
marketing is very costly, it is not suitable for firms with low resources. The marketer can be
beneficial by using differentiated marketing strategy while competitors are using
undifferentiated marketing strategy. For Yatha, it is a useful targeting strategy. Yatha can
create different products with different features to retain the mature stage of product life-
cycle.

Concentrated marketing

Concentrated marketing is opposite to undifferentiated marketing. Concentrated marketing

only approaches to a small group of consumers with a specialized product for them. The
targeted market contains very limited amount of consumers aim to serve them more
effectively than competitors instead of serving a wide market. The marketer tailors the
marketing mix very strict and precisely. This strategy is very common in small businesses
with limited resources. It is the most effective in niche market in which the products are
aimed to specific limited consumers. For example, this strategy is frequently used by luxury
product companies such as Rolls- Royce in car industry and Rolex in watch industry of which
products are intended to high-income group. Yatha can use this strategy to build new industry
of luxury soft drinks which carry high prices and aim at high-income people. Yatha can use
concentrated marketing to attract consumers who really cares about social status. To sum up,
choosing a targeting strategy depends on company resources, product variability, life-cycle
stage, market variability and competitions marketing strategies.

Task 2.4 Buying behaviors and their effects on marketing activities

Consumers buying behavior is a part of factors that have impact on marketing activities of the
businesses. Consumer buying behavior includes mental and emotional situations that
determine to buy a product or not. Buying behaviors encompass all the facts about what to
buy, where to buy, when to buy, how much amount to buy and how many times in a period to
buy. Buyer's decision makings are different according to the type of type of buying decision.
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The decision making processes to buy a car and to buy a cloth are totally different. The more
expensive and complex the product is the more information and involvement is required by
the buyer. Involvement which is the customer's perception of importance of the product is
high when the products become expensive and complex in attributes. Involvement is low
when the customers' perceived the importance of the products is low. Depending on the level
of buyer involvement and the degree of differences between brands, consumer buying
behaviors are divided into four groups.

Complex buying behavior

Complex buying behavior is found between consumers when they are highly involved in the
buying process and they see significant differences between brands. This type of buying
behavior is found when the buyers buy products which are usually expensive, infrequently
purchased and risky and can give high self-expression. In complex buying behavior, there are
three steps. First, the consumers develop beliefs about the products. Second, they develop
attitudes toward those products. Finally, they make a choice when they are fully satisfied.
The customers will try to know about product attributes, features, quality, and reliability
through print media and electronic media as the final decision is important for them.
Marketers of high-involvement products must be aware of the information gathering and of
evaluation of the consumers. Buying a car is an example of using complex buying behavior.

Dissonance-reducing buyer behavior

Consumers go with dissonance-reducing buyer behavior when they are highly involved in a
purchase but observe few differences among brands. This type of behavior is found when the
products are expensive, risky, infrequently bought but there are few differences between
brands. Even the products are expensive and risky; the consumers can buy without the
consideration for brands. But after a consumer has bought a product, he might feel dissonance
as he notice some disquieting features or he hears favorable things about her brands. In this
buying behavior, consumers make the actions first. Then, new beliefs are developed and
finally attitudes are developed. Marketers of dissonance-reducing buyer behavior must be
aware of methods to prove that a consumers' brand choice is right. As an example of
dissonance-reducing buyer behavior, we can find in buying furniture.

Habitual buying behavior

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Consumers flow in habitual buying behavior when they buy low involvement products with
few differences between brands. The products are usually inexpensive and frequently bought.
Generally, FNCG (fast moving consumers goods) products are that kind of products. Here,
the consumers buy a product in a certain brand frequently without considering too much
about other brands. There is no belief, attitude or behavior procedure in habitual buying
behavior. The behavior is derived from consumers' familiarity to the brand. A consumer will
just go to a store and buy a brand with which he familiar through printed media or TV
advertisement. Marketers of habitual buying behavior should emphasize on advertising to
make the products familiar with the consumers.

Variety seeking buying behavior

In variety seeking buying behavior, the involvement of consumers is low but there are
significant differences between brands. In this type of buying behavior, consumers collect
some information about the product and he buys the product without evaluating the
information well. Next time, he may buy the same product on different brand as he wants to
get new satisfaction or new taste of using the product. The consumers do a lot of brand
switching in this buying behavior. The marketers of variety seeking buying behavior should
build the customers relationship by differentiating the products well.

Yatha is a soft drink company who is a marketer of habitual buying products. Consumers
buy soft drinks at low involvement and they see a few differences between the soft drinks.
For example, when a consumer buys a cola, he just walks into a store and takes a bottle of
cola with which he is familiar. Yatha has to consider the facts that can make its products
familiar with the consumers. Here, we can know that buying behaviors have effects on the
marketing activities. Habitual buying behavior makes Yatha to emphasize on promoting its
products to be well-known. In this case, elements of promotion mix such as advertising and
public relation are suggested to be useful.

Task (2.5) New positioning strategy for selected product or service

After the business has chosen its main target from a lot of segments, a positioning strategy is
needed to be carried out. Positioning is getting a position in consumers' mind through a
related differentiated value. Depending upon what position in targeted customers' mind we
are going to occupy, the differentiated value can be varied. When we want to get high
position in consumers' mind, we have to differentiate our products much better than our

18
competitors. Besides, we must differentiate our services to be speedy and convenient for our
consumers. In building a strong position in consumers' mind, we cannot end up with empty
promises. Actual differentiation that brings the promised level of product is required in a
positioning. There are three steps in differentiation and positioning. First, we need to find out
possible competitive advantages on which positioning strategy will be carried on. Then, we
choose the most suitable competitive advantage and an overall positioning strategy is planned
for it. Finally, a chosen position must be carefully accessed to consumers.

Products are made in the factory and brands are made in hand. In order to be successful
brand, a full proposition of brand called value proposition is required. There are four options
in choosing a positioning strategy: more for more, more for the same, the same for less, less
for much less and more for less.

More for more: More for more positioning means charging more price than others' as the firm
provides more benefits than other do. Simply, the firm claims that it provides best service or
product so as to charge at a high price. This type of positioning strategy can be only used
when the firms can give premium products or services which are usually difficult to imitate.
And also the target market segment must be affordable for expensive products or services.
Otherwise, this type of positioning can be beaten by more for the same and the same for less
positioning strategy. Usually more for more strategy goes for status and a loftier lifestyle. An
adequate example is Apple Company. Apple provides unique products which are difficult to
copy in attributes. Apple convinces its customers that they pay high price for premium
products.

More for the same: In the nature of more for the same positioning strategy, the firm provides
the products which are comparable to competitors in quality at lower prices. It is a
positioning strategy to beat the more for more competitors. The idea is to raise sales volume
by convincing the customers that the firm provides products in premium standard in cheaper
prices than competitors who charge high prices for premium products. We can see the
usefulness of more for the same strategy in automobile industry. Lexus and Infinity are clear
examples of using more for the same value proposition to compete more for more brands
such as Mercedes and BMW. They occupy more market shares by producing more cars at
lower price points. While using more for the same strategy, we need to fill promised quality
level that can convince customers our products are comparable to premium level. Otherwise,
the firm value proposition will fail.

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The same for less: This type of positioning strategy is commonly found in discounters. They
do not provide better products. But they claim to provide the same quality products with same
benefits at lower prices. It provides the products at lower prices than more for more and more
for the same strategies. It is a powerful positioning strategy as people like lower prices for the
same benefits. For instance, we can get a high quality PC in Dell brand at lower price.

Less for much less: This type of value proposition aims for people who cannot afford much
for the things. In reality, there are very few people who can buy the best products or high
priced products. Many people are satisfied by the products they can afford. There is always a
market for those who cannot spend much on luxuries. The firm provides this market with
products bearing fewer benefits (low quality and features) at much lower prices. The firm
using less for much less value proposition emphasize on high sales volume as the margin is
very low.

More for less: It is sure the company that can completely use more for less strategy will make
more customers than any other companies. Everyone wants to get products with better quality
and features at lower prices. In practice, producing higher products will cost higher prices.
Providing higher products at lower prices may lead to selling the products at loss. In short
run, more for less positioning may be beneficial as it generates a lot of sales. But in long run,
the company may not afford financially to develop new product features in new product
generation and sell it at lower price. More for less strategy is only suitable for startup
business with a lot of capital to penetrate the market with high quality products at low prices.

For Yatha Soft Drink, we suggest to penetrate the market with two different value
propositions. We plan to take place in customers mind with different differentiations. To
occupy most of the market shares and get many customers, we should use a value proposition
which is affordable to many people. This idea can be accomplished by less for much less
value proposition which provides products at low prices. Although, the quality and the
benefits offered by less for much less value proposition is low, people love the price of the
products. There is no doubt that less for much less value proposition is a very powerful
positioning strategy for Yatha Soft Drink. Next, Yatha plans to penetrate on niche market
with more for more positioning strategy. That is planning to take place in customers' minds as
a company which can produce different levels of products to satisfy customers' needs as
much as we can. Now, our strategy is to occupy two most profitable targets: one offering high

20
sales volume and the other providing highest margin. In fact, Yatha is suggested to get
success with two winning value propositions.

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Task 3

Task (3.1) how products are developed to sustain competitive

advantage
Products are developed as the time passes and the needs and wants of customers change. The
older the product, the less popular it is. People are not fond of using the same product for a
long time. They want new forms of products as they fed up with the old ones. The duration
that a product can be accepted in the market by customers is limited. Every product has its
own lifespan according to its nature. For instance, products like phones have short lifespan
and we need to develop new products at most in one year. Products such as cars have longer
lifespan than phones. So, we need to emphasize in product development so as to continue our
company growth. We can analyze how product development should be carried out in product
cycle stages. Product life cycle can express how a product is developed in its lifespan. There
are four stages in product life cycle. They are-

 Introduction
 Growth
 Maturity and
 Decline

Introduction

Introduction stage is a stage when the new products are lunched into the market. In this stage,
the firm has to struggle high cost of launching a new product. When a product is about to
lunch into the market, the firm has to complete both before launching and after launching
activities. Before launching a product, the firm has to invest in many researches, developing
programs and consumer testing programs. After launching a product, the firm has to make
follow-up activities such as marketing activities (marketing mix). The sales of products in
introduction stage are mostly low since the product awareness is low. The publicity of
product is crucial in this stage.

Yatha has to arrange its marketing mix depending on the product lifecycle stages. The
product portfolio in introduction stage is usually narrow and the products are
undifferentiated. The other elements of marketing mix should be also considered in to get

22
competitive advantages. Prices of products in introduction stage should be low prices to
penetrate the market or high prices aimed at early adopters to recover the development costs
quickly. The distribution should be aimed at selective target until we get acceptance from
consumers. In promotion, we try to inform early adopters and trendsetters about the product.
The awareness of products is built among potential consumers. When Yatha plan to introduce
new products, the development of product and other marking mixes should be as suggested
above.

Growth stage

It is the stage when the early adopters and trendsetters use the products and the other potential
consumers follow the trend. The awareness of products in this stage becomes strong through
advertising and word of mouth. The sales of product and profits reach a secure level. In
competitive market, the firm has to survive by creating preference to its products. When
Yatha is about to survive in the growth stage of its products, it has to add new features and
better quality to products. Besides, product support services such as good packaging should
be provided. The price of the product can be set at a high level as the sales are rising. The
more suitable one is to reduce the price to occupy more market shares in competitive market.
Distribution is expanded as the product is accepted in this stage. Intensive are given to
resellers in order to distribute the products quickly through them. Promotion is emphasized
on advertising to get brand preference.

Maturity

The maturity stage is the stage when the product has a strong position in the market. The
sales of product reach at a maximum level in this stage. The firm owns a lot of market shares
as a result of the early two stages. It only needs to maintain the market shares. But the firm
has to face with high competition in this stage as the similar products may be in the market
than early stages. The firm has to modify product and other marketing mixes to get
competitive advantages. To struggle in this stage, Yatha has to modify its product. More
features that can differentiate the product from the competitors should be introduced to the
market. The price of the product should be reduced at suitable level according to increasing
competition. New distribution channels should be added as the distribution becomes intensive
in this stage. The incentives to resellers should be given so as to distribute the products to
wider place and maintain the position in the market. The promotion should be emphasized on
differentiation as the level of competition rises.

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Decline

Decline stage is a stage in which the firm has fewer customers for its products. The
consumers of products decrease in this stage. Sales and profits decrease rapidly. The firm
loses its market shares as the new products and substitute products enter the market. The firm
can pass through three ways in this stage. These three ways are maintaining the product,
harvesting the product and discontinue the product. Depending on the ways the firm chooses,
the arrangement of marketing mixes can be varied. Yatha have three options, maintaining,
harvesting and discontinue the product, when it comes to passing the decline stage. Product
may be rejuvenated to penetrate the market again. Product can also be offered at a low cost to
highly loyal customers. Price of the product is lowered as the demand decreases. But we can
maintain at certain level in loyal niche market. Distribution is aimed to selective customers.
Unprofitable channels are phased out. Promotion is aimed at niche market at a low cost.

Yatha has to adjust the product lifecycle stages in developing its products. To sustain
competitive advantages, Yatha has to arrange suitable marketing mix in each stage.

Task 3.2 How distribution is arranged to provide customer

convenience
Distribution is a process of reaching the products from the production party to consumers.
The products are distributed to consumers through a variety of marketing channels including
both direct and indirect. Marketing channels comprise all institutions that perform the
activities to transfer the products from marketers to consumers. In direct marketing channel,
the products are sold directly from the marketers to consumers. Usually, most producers do
not carry out the distribution process themselves for many reasons. The main and the most
common reason is they cannot reach very wide the geological areas themselves. They can
reach wide geographical areas by spreading their products through intermediaries, indirect
channels. There are three main types of channel intermediaries including wholesaler, agent
and retailer.

Wholesalers: wholesales buy a variety of products in large quantities from producers and sell
them back to retailers. They can reduce the firms' task to communicate with a lot of retailers.

Agents: agents are representatives of the firms. Agents make sure to get order from the
customers and they get commission on sales. In some cases, agents take the possession of

24
products. They may have purchased or they just hold them on consignment. Agents are the
most used intermediaries in export market.

Retailers: retailers are the nearest to the consumers. They buy products from producers or
wholesalers and sell them to the consumers directly. Retailers independently own the
products and sell freely in the market.

There are four possible marketing channels including both direct channel and uses of
intermediaries.

1) Producer → consumer
2) Producer → retailer → consumer
3) Producer → wholesaler → retailer → consumer
4) Producer → agent → wholesaler → retailer→ consumer

Depending on the nature of businesses and their sizes, different businesses have different
suitable marketing channels. Yatha have to choose the most suitable ways for itself. Products
have much impact on distribution. Depending on the product life cycle stages, Yatha
distribution channels should be carefully prepared. When the product is just introduced,
distribution should not be too intensive. Yatha should choose to contact with some retailers as
the product is just lunched and needed to test. When the product begins to be popular, Yatha
can expand its distribution to penetrate new geographical areas and occupy market shares.
Yatha should use wholesalers to reach wide range of retailers and finally to many consumers.
As Yatha is expecting to enter the international market, it should have agents that can attract
foreign markets. When Yatha have demand in the international market, it can distribute its
product efficiently through agents. In conclusion, distribution can be arranged to get
consumer's convenience by using suitable channels and reaching products to the customers
efficiently.

25
Task 3.3 How prices are set to reflect an organization's objectives and
market conditions
Pricing is the process of determining how much the firm should get in return to its product or
service provided. It is the only elements of marketing mix that generate revenues. The other
elements are cost centers. Pricing is not a simple marketing activity that can be carried out
freely. Actually in deeper form, pricing matters the whole value delivery process. It
determines the value of products related to its cost. Pricing have much influence on consumer
perception of value. The adjustment of price and the benefits of product can influence the
consumer perception of value. According to their perception, the consumer will decide to buy
or not to buy the product. Therefore, consumer perception becomes upper limit for pricing.
On the other hand, pricing have to cover all the costs from the other marketing activities.
Then cost becomes lower limit for pricing.

Consumer perception of value: The consumer perception of value determines whether the
price is right or not. If the consumers think the price is not worth with its benefits provided,
they will not buy the product. If they think the price is suitable for benefits offered, they will
happily give no matter the price is high or not. Consumers set the highest price they can give
for a product. Customer value is crucial in this concept. Value-based pricing is used to
overcome the problems with consumer perception of value. Value-based pricing emphasizes
on consumer value and the price is set based on the value perception of consumers. There are
two types of value-based pricing: good-value pricing and value-added pricing. Good-value
pricing involves the combination of quality and good service at an affordable price. Value-
added pricing is building firm's pricing power. The firm goes for high differentiation by
adding different features and services to escape from the price competition. Value-added
pricing mainly includes premium pricing providing high value and charging high price.

Costs: costs comprise all other company costs and production costs. The firm at least has to
cover its costs in running. That is why the firm's costs become lower limit of pricing. In cost-
based pricing, the firm sets the price by adding expected profit to costs. The weak point of
this pricing is that it is product-oriented. The firm produces the product that is assumed to
provide good value without the consideration of consumer perception. There are two types of
cost-based pricing. The first one is simple cost plus pricing in which the firm sets the price by
adding a standard mark up to the cost. The next one is break-even pricing which set the price
of the product at a level at which the firm will meet its target profit or get the break-even

26
point. In making pricing decisions, many other internal and external factors are also need to
be considered.

Internal factors: internal factors include firm's overall marketing strategy and its objectives.
Pricing can be also seen as a content of strategic marketing decisions. Pricing is concerned
with basic marketing activities including segmenting, targeting and positioning processes.
Depending on what position the firm is going to take in the market, the prices can be varied.
If the firm targets to enter less for less market, the price needed to be at low level. Price is
also used as the most visible form of positioning. For instance, Wal Mart holds a position of
providing a variety of products at low prices. Pricing have to lead to firm's objectives. For
example, if the objective of the firm is to get market shares in minimum time, the pricing
should lead to penetration price.

External factors: external factors that have influence on pricing include competitors, market
demand, environmental factors and political factors. Competitors' prices and strategies
influence the firm's pricing process in many ways. The firm has to monitor how much the
competitors charge for their offerings. The price that the firm charges for the same quality
product should not be higher than competitors. If the firm has high value perception, it can
charge high prices by neglecting competitors' prices. Prices are also affected by demand in
the market. When the demand is increasing, the firm can set higher prices. In contrast, the
firm has to reduce prices when the demand is decreasing. Sometimes, the prices are affected
by the environmental and political factors.

Yatha has to follow the aspect of right upper limit and lower limit in pricing. The prices that
are set for Yatha's products should be in the level that the customers are willing to pay for
these products. That does not mean the prices should be at low level. The prices of Yatha's
products should be in the level equal to its benefits. If Yatha can make many differentiations
in form of quality or features, it can set high prices as the consumers will have good
perception of value for good quality products. The best pricing strategy is to charge high
prices by differentiating our products to worth more. Then, we can get high margin and high
profit and also the reputation of providing high quality products. Yatha have to consider its
marketing strategies suggested in above tasks and its objectives.

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Task 3.4 how promotional activity is integrated to achieve marketing
objectives
Promotion is a marketing effort that can improve the awareness of brand and product.
Consequently, it is an activity that can raise sales volumes of a product. It is crucial in
building firm's reputation. The main objectives of promotion are to inform the customers
about the products, to express what the special offer in the product is and to build profile of
the product or firm. Moreover, promotional activities can correct misunderstandings about
the product. Promotion is also a component in building strong customer loyalty. There are
five main types of promotional activities in promotion mix. They are

 Advertising
 Sales promotion
 Personal selling
 Public relation and
 Personal selling

Advertising: advertising is any activity that presents the benefits about the product in
persuasive manner through many communication ways to the target customers. The most
common types of advertising involve internet, newspapers and magazines, TV and radio
advertisements and public transport signs.

Sales promotion: sales promotion includes sales related activities that can boost the sales of
the product in short term. The main types of sales promotion are discounts, coupons, displays,
and demonstrations.

Personal selling: personal selling involves real in person relation with customers. It includes
sales presentation, trade exhibitions and incentive programs.

Public relation: public relation is building understanding between the firm and public. It can
build the way the public see the firm. Press releases, sponsorships, fund raising events and
Web pages are main methods of how public relation is done.

Direct marketing: direct marketing is giving the information directly to the customers without
middle mans in communication. It consists of catalogs, mailers, telephone, and many more.

Most of the firms use all five promotion method in generating sales. And all these methods
are useful for the firms. What we need to consider is to emphasize in one or two methods that

28
fit with the situations of the firm. Yatha have to arrange its promotion in integrated promotion
mix. As a production company that distributes products to all around the country, Yatha
needs all five components of marketing mix. What the firm emphasis in promotion should be
depends on many factors. First, the emphasis is determined by what the firm's final
customers, i.e. business-to-business or business-to-consumers. In business-to-business firm,
the firm needs many discussions with its customer (another business). And also business-to-
business firm usually uses push strategy in channels of distributions. The nature of push
strategy includes pushing the channels to get demand from final consumers. So, the personal
selling which involves the in personal contact with the customer should be emphasized. In
business-to-consumer firms, the firms usually use pull strategy in channel distribution. Pull
strategy attracts the final customers rather than pushing channels. Then, the advertising or
public relation which can influence the demand of the final consumers is emphasized. As
Yatha is a business-to-consumer, Yatha should arrange the emphasis in advertising and
public relation followed by sales promotion and personal selling.

Another factor that we should consider in choosing emphasis in promotion is product life
cycle stages. In the early stages of product life cycle such as introduction and growth,
advertising and public relation which can reduce unawareness of the product are the most
suitable to emphasize. Sales promotion which is the best to penetrate the market is also
suitable in introduction stage. In mature stage, sales promotion and advertising are again
crucial as the competition becomes higher. In decline stage, sales promotion aims to continue
as a generator of short term sales boost as the products are not any longer popular. Yatha has
to adapt the product life cycle stages in building a promotion mix.

29
Task 3.5 Additional elements of marketing mix
The marking mix is introduced as a 4Ps model with the aim to integrate the marking
programs to raise the effectiveness of marketing activities. The components of the 4Ps model
marketing mix are product, price, place and promotion. And we find that 4Ps model mostly
contains the consideration about product and service is seemed to be neglected. An offering
includes product, services and experiences. To cover the service concept in marketing mix,
three additional elements are added. These three additional elements of marketing mix are
people, processes and physical evidence.

People

People mean the employees (human resources) within the organization. Employees are also
crucial in performing external marking functions. Without the effort of the employees, any
good performance cannot be seen in marketing. So, internal marketing is needed to carry out
in a firm. The employees have to be highly trained to be able to give best services to
customers. People are the most important in services providing businesses such as banks,
restaurants, airlines and education.

Processes

Processes include how the firm arranges to provide services to be efficient. Processes cover
all the rules, tactics, creativity, innovation and structure with which the marketing is running.
For example, Lotteria, a fast food restaurant, can give what the customers order instantly.
That is how the Lotteria prepares its processes to provide very fast services for customers.
Every service should be planned and programmed using a variety of tactics and strategies to
be efficient and flawless service.

Physical evidence

Physical evidence is an effort to prove the customers that the firm gives good services for
them. As the services are not tangible, the help of physical evidence is required. Physical
evidence includes physical layout and physical environment. Physical layout is a thing that
can make firm different from others. When the Sedona hotel charges high fees for a room, the
high services that the hotel provides is proved by its room's layout and facilities. Besides, a
product will be more attractive to customers if it is physically packed well. Physical evidence
is useful for proving the quality of the services.

30
Yatha should also consider three additional elements of marketing mix. Yatha should train its
employees to give high services for customers. Good internal marking that leads to good
external marketing should be built by Yatha. Creativity and innovations that will comfort the
customers consuming our products should be planned carefully. Finally, Yatha should well
prepare for its product physical vision. Yatha should innovate a well and attractive packing
for its products to prove that the company gives high quality soft drink.

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Task (4)

Task (4.1) Plan marketing mixes for two different segments in

consumer market
Table showing marketing mix for two different segments in consumer market for Yatha Soft
Drink

Segment Product Price Place Promotion Positioning

High Diet coke High special personal selling, More for more
income places in advertising and
cities public relation
Low Normal Low wholesales Advertising and Less for much less
income soft drink and retails personal selling

Yatha is going to enter two segments of the market with differentiated marketing. One
segment is aimed at high income people. The product Yatha will provide for high income
customers is diet coke. It is specially made for those people who want to drink coke without
any defects to their health. The diet coke is also suitable for people who are suffering from
diabetes. The price of the diet coke will be high because it is not only a much differentiated
product but also the costs of producing it is larger than normal. The distribution of this diet
coke will go to the special places in cities where the rich people mainly visited such as
shopping malls and City mart. . The scope of distribution will be narrow as the product is just
introduced into the market. Promotion is suggested to emphasize on advertising, personal
selling and public relation. As the rich people wants to get door to door system, personal
selling becomes an emphasis in the promotion mix.

Another segment that Yatha will enter is low income people who can only afford normal soft
drink. The product Yatha is going to produce for this segment is soft drink with normal
quality. The price of the product will be low as the product quality is low. The product will be
sold in wholesale and retail shops where normal people can buy easily. The promotion
method that should be emphasized here is advertising and personal selling because the
product needs the awareness of the brand.

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33
Task (4.2) Differences in marketing products and services to business
rather than consumer market
Marketing activities that aim to business-to-business market and business-to-consumers
market are different. The main reason why these activities become different is their aims of
buying the products are different. B2B (business-to-business) market aims for incorporating
services or adding values to its production while B2C (business-to-customers) market goes
for final consumption. There are many differences in marketing B2B and B2C market. Some
differences that are common are as follows.

Market structure: Firstly, the market structure is different. In B2B market, there are fewer
buyers than the B2C market. But B2B buyers are larger buyers than B2C market. For
example, in tyre industry, there are only small numbers of car companies that buy enormous
amount of tyres for to use in their car production. There are a lot of consumers that buy tyres
of enough for their cars.

Market demand: In B2B market, the demand of the products is not direct. Derived demand
is common in B2B market. The buyers of B2B market demands for the product depending on
the demand of their customers. In B2C market, there is direct demand. For instance, farmers
are demanded by rice retail shop depending on the consumption of final consumers. But the
rice retail is directly demanded by the consumers as direct demand.

Selling: The selling of products in B2B market needs close discussion between the buyers
and sellers. In B2C market, the selling process is direct and traditionally convincing
customers.

Buying behavior: B2B buyers buy the products through consultative advices.B2B buyers
also have to consider the budget and financial plan of the organization. B2C buyers only need
emotional decisions to buy the product. That's why B2C marketers do a lot of advertising to
convince their customers.

Decision makers: B2B buyers have a lot of members in decision making unit. Decision
making process is long in B2B market including analysis of data and many discussions. B2C
buyers have only few influencers in decision making.

34
Brand image: The brand image and reputation in B2B business is hardly built through
personal relationships and consultative selling. B2C firm's image is based on the advertising
and public relation of the firm.

Yatha have to consider the differences between B2B and B2C market if it has plans to enter
B2B market with new development of product. Currently, Yatha is in B2C market and has to
consider the nature of B2B market.

Task (4.3) how and why international marketing differs from

domestic marketing
International marketing is the marketing of goods and services across national frontiers.
International marketing involves selling or producing products in foreign countries. On the
other hand, the international marketing includes international trade in which the firm may be
an exporter or importer. And the marketing activities are affected by the foreign market in
which the firm operates. In domestic market, the firm can produce its productions and
services freely. There are many factors that make international marketing different from
domestic marketing.

Firstly, international marketers face with many restrictions to protect infant industries of the
countries. In the trade system, the firm faces with a lot of limitations and restrictions. Quotas
that limit the amount to import are set by the government. Different countries limit imported
goods in two ways: in percentage of sales or number of units sold. Quotas are set to protect
domestic firms in respective industries. As a firm to export products to another firm in
foreign country, that firm has to face with the impacts of quota. The firm loses its exporting
opportunities. The firm cannot provide enough amount if there is high demand in foreign
market. Then, the scarcity of products leads to higher prices for consumers.

Another restriction that international marketer face is tariffs of the countries. Tariff is tax on
the imported goods and raises the price of the products when reach to consumers' hands. And
exporting firms cost a lot because of tariffs. There are two alternatives that exporting firms do
to adapt the tariffs. The first one is to raise the price of product. Then, the demand of the
product can decrease when the price rises. The second option is to cut the costs.

35
Consequently, the quality of products and service can be decreased as the production costs of
products are cut.

Next foreign currency exchange control affects the firm's marketing. The currency exchange
rates affect the prices of the products when they are exported to other countries. The currency
exchange rates can higher or lower the price of products.

These restrictions between international trades of countries make the prices of goods rise. To
reduce intentions of trading, many organizations such as Europe Union (EU) and Asian Free
Trade Area evolve. When Yatha enters to international market, it does not need to consider
too much about the restrictions like quota, tariff and currency.

Another difference is that the needs and wants of the foreign customers may be very far from
our ability. The expectations of customers from different countries can be various. This
makes the firm difficult to export the same type of products to many countries. Many
researches and differentiations are needed to satisfy the foreign customers. The reason why
international marketing differs from domestic marketing is international marketing concerns
with the economics of many countries. To limit the influence of foreign companies,
government set many restrictions on foreign company. That makes the firms more difficult to
make marketing in international market than domestic market. Another reason is that culture
and behaviors of people from difficult countries cannot be the same. The different nature of
customers from foreign market makes the firm to seek for alternative ways to get a place in
their minds. Yatha has to struggle many difficulties to enter international market. Yatha also
have to adapt the effects of different culture and behaviors of customers in foreign countries.
On the other hand, Yatha can get market shares from foreign market. In conclusion, firms
have to adapt all the things including government policies and economic conditions to
survive in the foreign market.

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Conclusion and recommendations
In this assignment, we have learned very valuable principles of marketing. The principles are
also used to help the marketing of Yatha Soft Drink Company. We get many ideas to use the
principles in real business operations. The suggestions we give in the assignments for Yatha
Company are derived from the combination of our own thinking and theories. Indeed, the
assignment can give us valuable knowledge and experiences.

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References
Webpages

www.entoesbma.com

www.entreprenuer.com

www.investopedia.com

www.inc.com

www.marketingteacher.com

www.learningmarketing.net

www.marketing91.com

www.marketsarus.com

www.boundless.com

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