Topic M09: Marketing Mix Topic Overview P.1

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Topic M09: Marketing Mix Topic Overview P.1

BAFS Learning and Teaching Example As at April 2009

Topic Overview

Topic BAFS Elective Part - Business Management Module – Marketing Management M09: Marketing Strategies for Goods – Marketing Mix

Level S5 / S6

Duration 2 lessons (40 minutes per lesson)

Learning Objectives:

1. To understand the concepts of market targeting, market segmentation and market positioning;

2. To explain the factors affecting the determination of target market;

3. To explain the concept of the marketing mix in business scenarios and business planning;

and

4. To apply marketing strategies for goods.

Overview of Contents:

Lesson 1 Market Segmentation and Market Positioning Lesson 2 Marketing Mix

Resources:

Topic Overview and Teaching Plan

PowerPoint Presentation

Student Worksheet

Suggested Activities:

Role Play

Case Study

Group Discussion

Problem Solving

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Topic M09: Marketing Mix Topic Overview P.2

BAFS Learning and Teaching Example As at April 2009

Lesson 1

Theme Market Segmentation and Market Positioning Duration 40 minutes

Expected Learning Outcomes:

Upon completion of this session, students will be able to:

1. Identify market segments with customers’ needs and wants;

2. Explain the concept of market segmentation and market positioning; and 3. Understand how market positioning affect the determination of target market.

Teaching Sequence and Time Allocation:

Activities Reference Time

Allocation Part I: Introduction

Teacher starts the lesson by asking the question, “What are customers’ needs and wants when buying footwear?”

Teacher then asks students to brainstorm who the target customers are for those products.

PPT#1-2 5 minutes

Part II: Content

Activity 1: Identifying Market Segment

Students are asked to identify target customer groups associated with specific types of footwear.

Teacher concludes the activity by stressing the different needs and wants among different target customer groups and the importance of market segmentation to a company’s marketing strategies.

PPT#3-6 Student Worksheet

pp.1-3

10 minutes

Activity 2: Role-play - Market Positioning

Students are asked to pair up with their neighbouring students and perform a sales drill.

Students should learn that different footwear brands are designed to satisfy needs of specific market segment(s).

Teacher concludes the activity with the concept of market positioning.

PPT#7-9 Student Worksheet

p.4

10 minutes

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Topic M09: Marketing Mix Topic Overview P.3

BAFS Learning and Teaching Example As at April 2009

Teacher illustrates the concepts of market segmentation and market positioning with the market positioning map of footwear.

PPT#10 5 minutes

Part III: Conclusion

Teacher summarises the key concepts covered in this lesson.

To prepare for the next lesson, students should complete Activity 3 on the use of marketing mix strategy in

rebranding a company before attending the next lesson for discussion.

PPT#11-12 Student Worksheet

pp.5-6

10 minutes

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Topic M09: Marketing Mix Topic Overview P.4

BAFS Learning and Teaching Example As at April 2009

Lesson 2 Theme Marketing Mix

Duration 40 minutes

Expected Learning Outcomes:

Upon completion of this session, students will be able to:

1. Understand the use of marketing mix;

2. Apply marketing mix in rebranding of products; and

3. Understand the external factors and forces affecting product and service positioning.

Teaching Sequence and Time Allocation:

Activities Reference Time

Allocation Part I: Introduction

Teacher starts the lesson by disclosing the case in Activity 3 about rebranding “Tai Cheong Hong (

太昌電器行

)” .

After collecting answers from students, teacher should address and justify the correctness of students’ choices with the concept of Marketing Mix Strategy.

PPT#12-20 Student Worksheet

pp.5-6

10 minutes

Part II: Content

Activity 4: Matching Marketing Mix

Students are required to form groups of 4 or 5 to match the marketing mixes (4Ps) in a logical manner.

(e.g. HK$500, a dress, advertisement in fashion magazine, Causeway Bay)

Teacher invites volunteers to present their answers.

Teacher reveals the conclusion on the slides and explains the rationale of the matches.

Key points should be addressed which are related back to Activity 3: Rebranding exercise: “Tai Cheong Hong (

太昌電器行

)” on how the

appropriate choice of a marketing mix can support rebranded products or services.

PPT#21-24 Student Worksheet

p.7

10 minutes

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Topic M09: Marketing Mix Topic Overview P.5

BAFS Learning and Teaching Example As at April 2009

Activity 5: Discussion on Changing Environment

Slides of various decades (e.g. 70s, 80s, 90s) containing different products are shown.

Students, remaining in their groups, should compare the changes over the given periods and identify the factors that lead to these changes.

(e.g. company management, customer taste,

technology, manufacturing, competitors ,the public)

Teacher invites students to present their answers.

Teacher further explains the factors and forces that affect marketing decisions.

PPT#25-30 Student Worksheet

p.8

15 minutes

Part III: Conclusion

Teacher concludes the lesson by explaining the

significance of the changing environments to marketing strategies and how companies should cope with these changes by rejuvenating the marketing mix.

PPT#31-32 5 minutes

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Topic M09:

Marketing Strategies for Goods – Marketing Mix

Technology Education Section Curriculum Development Institute

Education Bureau, HKSARG April 2009

BAFS Elective Part

Business Management Module – Marketing Management

Introduction

This session provides students with a fundamental understanding of the marketing environment and its concepts. Through different activities, students will gain in-depth knowledge of marketing management concepts and better understanding on how marketing strategies are applied in business scenarios.

Duration

Two 40-minute lessons

Contents

Lesson 1 – Market Segmentation and Market Positioning Lesson 2 – Marketing Mix

Topic M09

Marketing Mix BAFS Elective Part

Learning and Teaching Example 2

What are the customers’

needs and / or wants when purchasing footwear?

Lesson 1

1. As a starting point, ask students: “What are customer’s needs and / or wants from a pair of footwear?”

2. Ask volunteers to express their thoughts. Their answers may include:

• Protect feet from harm

• Protect ankle from twisting

• Provide comfort

• Run on grassy fields

• Provide good grip on sand and rocky surfaces

• Trendy and stylish

• Brand name and value

• Increase body height

3. Based on students’ feedback, teacher explains that people buy a product (such as footwear) because they have certain need(s) / want(s) to satisfy.

As explained in Topic 6, customers having similar need(s) / want(s) / preferences for a certain product from a market segment.

4. Teacher asks students: “Can you identify the target customers / market segments of different footwear?”

5. Go to the next slide to reveal the suggested answers.

Remarks:

Footwear may include leather shoes, running shoes, sandals, and boots.

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Topic M09

Marketing Mix Strategies for Goods BAFS Elective Part

Activity 1: Identifying Market Segments

Target Customers with Target Customers with different needs

different needs… …. .

●Office Workers

●Runners

●Sport Players

●Students

●Infant, Elderly, Men or Women, etc.

Activity 1

Instructions:

1. Teacher wraps up the previous question by displaying a few groups of target customers / market segments of footwear in this slide.

2. Ask students to complete Activity 1 – Identifying Market Segments.

3. After completion of the worksheet, go to the next slide to continue further discussion.

Topic M09

Activity 1: Identifying Market Segments

What have you noticed about the footwear customers after completing this activity?

Instructions (cont’d):

4. Collect students’ answer.

5. Though there are no model answers, student choices should be more or less the same.

6. The exercise shows that customers in each market segment do have distinctive features.

7. Ask students “Why is it important for marketers to identify the distinctive features of each segment?”

8. After a brief discussion among students, go to the next slide for the answer to the question and the conclusion to Activity 1.

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Topic M09

Activity 1 : Conclusion

Markets consist of different buyers in one or more ways. The differences include wants, needs, resources, locations, buying attitudes, and buying practices.

Example 1: Business person would like a pair of leather dress shoes to match his suit; while a student may want a sport shoes to play basketball after class.

Example 2: An outdoor photographer may want a pair of hiking boots for handling harsh environment;

while a retiree might just want a pair of simple value for money sandals for daily walking.

Teacher explains that customers from each market segment varies differently in terms of needs and wants or other attributes such as age and occupation. Therefore, marketing segmentation is crucial in creating marketing strategy.

Topic M09

Activity 1 : Conclusion (Cont’d)

Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match customers’

unique needs.

It is important to identify the target market segment before the implementation of marketing activities to ensure profitability.

Remarks:

1. After completion of Activity 1, students should recognise that a single market such as the footwear can be divided into different target groups in different ways.

2. There is no single way to segment a market. A marketer must attempt to identify the segmentation variables, alone and in combination, to uncover the best way to view the market structure and employ appropriate marketing strategies.

3. The major variables used in segmenting consumer markets are geographic (world region, country, city), demographic (age, gender, family size, income, occupation), psychographic (social class, lifestyle, personality), and behavioral (occasions, benefits, user status, loyalty status).

Source:

Marketing, an Introduction (Eighth Edition), Gary Armstrong, Philip Kotler, Pearson Prentice Hall, New Jersey, 2007.

Introduction to Business Studies, Revised Editiion, C. N. Cheng, Hong Kong Educational Publishing Co., 2000.

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Topic M09

Is there any linkage between

Ask students whether there is any linkage between market segmentation and market positioning.

Go to the next slide to start Activity 2: Role Play – Market Positioning.

Topic M09

Activity 2: Role Play - Market Positioning

What is Market Positioning?

• perception in the minds of target customers

• aggregate market perception of a particular company, product or service

• perceptions of the company relative to its competitors

If a company or its product is perceived to be the same as its competitors, consumers have no reason to select it over the other.

Activity 2

Through the previous activity on “Identifying Market Segments”, students should have a basic idea of how footwear markets are segmented to target different groups of customers with different needs and wants.

Start the next activity by reviewing with students on “What is Market Positioning?”

Market Positioning is the result of careful manipulation of the marketing mix in order to create an expected perception of a product in the minds of the target customers so that companies can be more competitive within an industry.

Ask students to complete Activity 2 – Identifying Market Positioning.

Source: Marketing: An Introduction (Ninth Edition), Gary Armstrong, Philip Kotler, Pearson Prentice Hall, New Jersey, 2009.

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Topic M09

Activity 2: Role Play - Market Positioning

Instructions:

1. Ask students to pair-up with a neighboring student to perform a sales- drill.

2. One student acts as the footwear sales-assistant and the other as a walk-in customer.

3. The sales-assistant should spend 1 to 2 minutes determining the type of footwear that will satisfy the needs and wants of the customer by asking the questions listed on Student Worksheet p.4.

4. After completing all the questions, the sales-assistant should provide an appropriate footwear suggestion that would suit the requirements of the walk-in customer.

5. Next, ask the students to swap positions and repeat the drill. By asking the students to perform the sales-drill, they should be able to notice the diversity of wants among individual customers even for a single product such as footwear.

6. Ask students to post the types of footwear to the market positioning map (next slide) according to their specific features or functions.

7. Ask students to suggest a real brand name for each type of footwear.

(E.g. Nike/Adidas for sports, New Balance for running, Converse for casual wear, Y3 for style and fashionable, Timberland for outdoor, Ecco/Geox for casual/business.)

8. Conclude the activity by explaining that different footwear brands are designed to satisfy specific market segment(s). In return, they create their specific market position in the product market.

Topic M09

Sports / Outdoor

Sports / Outdoor Dress / IndoorDress / Indoor

Daily Use / Casual Daily Use / Casual Professional / Formal Professional / Formal

Market Positioning Map

The above market positioning map shows how footwear are differentiated from each other through market positioning.

Such examples are:

For the sport shoes category, some brands position themselves as professional athletes' footwear such as Nike and Adidas while others such as Converse will position themselves as stylish casual footwear. To further differentiate the brand from it’s competitors, some brands such as Nikewill build strong associations with basketball through constant support of the sport.

Some brands may try to position themselves in a niche market such as New Balance, which is strongly tied with running sports / events and Headis well known for producing sport shoes specially for tennis.

For the dress shoes category, Ecco positions its brand as comfort while Geoxpositions its brand as “shoes that breathe”.

Given the above examples, marketers use marketing positioning strategies to create positioning (perception) in the minds of the target customers.

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Topic M09

Conclusion to Lesson 1

Why Market Segmentation?

zNot possible to satisfy every individual need in the market

zTarget a segment to focus resources to increase sales and profit.

Why Market Positioning?

zTo differentiate brands each other.

zInfluence consumers thinking and perceptions of your product/service to win them over.

Conclusion to Lesson 1:

No organisation has the resources to develop different products and tailor their marketing strategies to address the various needs of consumers in a market.

If organisations ignore heterogeneous markets and adopt the same marketing strategy for all markets, a disappointing sales level will result.

Very often, products offered by different companies within the same category can be quite similar and undistinguishable (Such as Coke and Pepsi). Therefore differentiations through the use of marketing mix (Product, Promotion, Price, Place)is necessary for companies to create distinctive brands and build closer customer connections and

associations.

Through the appropriate use of advertisements, product designs, pricing strategies, and retail renovations, emotional associations are formed to influence customers’ choice, build customer loyalty and maintain long- term profitable customer relationship. This is why and how marketing positioning works.

Remarks:

A firm’s market positioning cannot be formed solely by the using the components of a product (brand name, quality level, packaging, design, features). It requires the collective effort of the marketing mix (Product, Promotion, Price, Place)working closely together for maximum effectiveness.

Source: Introduction to Business Studies, Revised Editiion, C. N. Cheng, Hong Kong Educational Publishing Co., 2000.

Topic M09

Activity 3: Rebranding Exercise Tai Cheong Electronics 太昌電器行

A local electronic store in Sham

A local electronic store in Sham Shui Shui Po Po wants to rebrand the store to attract new wants to rebrand the store to attract new customers.

customers.

zDefinition of Rebranding: The process by which a product or service developed with one brand, company or product line affiliation is marketed or distributed with a different identity.

z Patrick is determined to revive the failing business and restore the family business to its original success then expand as a chain.

z What factors should Patrick take into consideration?

Activity 3

Brief students on the store’s background and the owner’s objectives.

Students were asked to complete Student Worksheet pp5-6 before attending the next lesson for further discussion.

End of Lesson 1

Remarks:

Definition of Rebranding: The process by which a product or service developed with one brand, company or product line affiliation is marketed or distributed with a different identity. This may involve radical changes to the brand's logo, brand name, image, marketing strategy, and advertising themes. These changes are typically aimed at the repositioning of the brand/company, usually in an attempt to distance itself from certain negative connotations of the previous branding, or to move the brand up-market.

Source: Rebranding, Wikipedia, http://en.wikipedia.org/wiki/Rebranding, August 17, 2008.

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Topic M09

Activity 3: Rebranding Exercise - Review of Current Business

Patrick’s analysis provided the following:

z Sham Shui Po district and his customers have aged significantly;

z Customers’ tastes are rapidly changing and product his assortment is out-dated.

z Store identity is weak without impact to consumers;

z Internal staff are customer sensitive, but they lack sufficient technical information and product knowledge.

Lesson 2

Begin the lesson by recapping the case of Activity 3 and brief students about the review of current business.

Check and discuss answers of the Activity with students using the following slides.

Remarks:

1. There are no model answers for the questions in Activity 3.

2. Students’ answers should be justified by the effectiveness and coherent of their choices.

Topic M09

Using the 4Ps marketing mix, Using the 4Ps marketing mix, which elements should Patrick which elements should Patrick consider to rebrand the retail consider to rebrand the retail operations and achieve his operations and achieve his objectives?

objectives?

Activity 3: Rebranding Exercise

Ask students, “What factors should Patrick consider in his rebranding plan?”

Suggested Answers:

Four groups of variables known as the Marketing Mix, or 4Ps are to be considered: Product, Price, Promotion, and Place.

Remarks:

Definition of Marketing Mix: The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything the firm can do to influence the demand for its products. The many possibilities can be grouped into four variables known as the “four Ps”: product, price, place, and promotion.

.

Source: Introduction to Business Studies, Revised Edition, C. N. Cheng, Hong Kong Educational Publishing Co., 2000.

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Topic M09

Activity 3: Rebranding Exercise

According to Patrick’s objectives, which marketing mix should he take into consideration in his rebranding plan?

Marketing Mix Strategy

Ask students what marketing mix they have chosen and explain the reason for their choice.

Go to the following slides for the suggested answers.

Topic M09

Activity 3:

Rebranding Exercise - Product

Which product mix would you recommend?

Variety Quality Features After Sale

Services

Brand Name Packaging Services

Suggested Answers: Product

1. Variety: By offering a wide range of products, Patrick’s shop can attract a wider range of customers (note remark 1 and 2).

2. Quality:Though Patrick does not manufacture his own products, choosing products with good quality is an important decision to make.

3. Features:Same as point 2. Choosing products with great features is an important decision for the success of his shop.

4. Brand Name:Because the brand image and name of the store is not easily remembered, a new logo is recommended to establish the store’s identity.

5. Packaging:a shopping bag displaying the new store identity is recommended to further strengthen customer brand recall.

6. Services:Staff are friendly but lacking professional product knowledge.

Training is suggested to improve knowledge and professionalism.

7. After Sale Services: Repairs, support, and warranties are always considered when deciding to purchase an electronic product.

Remarks:

1. If the product range were narrowed, this could create a stronger market position by becoming a specialty store. Example: If the store only offers computer equipment and computer accessories, then the store will become a computer specialty store.

2. Products that change quickly can be considered. This will generate more customer interest and results in more frequent visits. Example: Digital cameras, laptop computers, MP3 players, and mobile phones are great product assortments.

3. Be aware that different districts have different characteristics and attributes, you should take these factors into account when developing your marketing mix strategies. As mentioned previously, the downside of Sham Shui Po is that the district has aged with a demographic profile limiting expansion. However, its location is centralised and well known for selling computer goods, and therefore attracts a large number of customers from other districts.

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Topic M09

Which price mix would you recommend?

List Price Promotional

Pricing Discounts

Allowances Payment period Credit terms

Activity 3:

Rebranding Exercise - Price

Suggested Answers: Price

1. List Price: It is important for Patrick to set the price to match target customers expectations. The list price should also match the product quality and the store location.

2. Promotional pricing: Temporarily pricing products below list price and sometimes even below cost to create buying excitement and urgency.

Patrick can offer one or two products at promotional pricing to attract customers.

3. Discounts: This refers to price-adjustment strategies where Patrick’s shop can enjoy a price reduction of imported goods by settling his bills promptly or performing specific sales actions stated by the

manufacturer (trade discount, quantity discount, seasonal discount).

4. Allowances: This works similarly with discounts where Patrick will receive price reduction for performing specific sales actions (trade-in- allowances, promotional allowances).

5. Payment period: If Patrick can purchase his import goods at a pre- season price and promptly settle payment, he can enjoy a price reduction which allows him to transfer this financial benefit to the customers.

6. Credit terms: The store can offer interest-free installment payments to further attract sales.

Topic M09

Which promotion mix would you recommend?

Advertising Personal selling

Sales promotion Public relations

Activity 3:

Rebranding Exercise - Promotion

Suggested Answers: Promotion

1. Advertising: Advertising in local papers to further build on store identity and notify customers of discount promotions.

2. Sales promotion:To attract customers to the store, sales promotion can be offered to build traffic and brand recognition. Promotions such as: coupons, contests, cents-off deals, premiums, and others to attract consumer attention, and offer strong incentives to purchase.

3. Personal Selling: Not applicable in this case. Personal selling works more effectively when dealing with non-tangible offerings.

4. Public Relations: Use local newspaper press releases to build brand awareness. This can be used in conjunction with sales promotions to generate stronger interest and impact customers.

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Topic M09

Which place mix would you recommend?

Channels Coverage Locations

Inventory Transportation Logistics

Activity 3:

Rebranding Exercise - Place

Suggested Answers: Place (also known as Distribution)

1. Channels: the distribution channel might need to be revised to increase contact points between customers. Patrick can consider franchising to expand operations.

2. Coverage:Increase the coverage area by increasing the number of stores and a wider spread of store locations.

3. Locations:To build a customer base, the store should be relocated to shopping districts such as MongKok, Tsim ShaTsui, or Causeway Bay to attract new customers.

4. Inventory:Improve inventory management by utilising the UPC (Universal Product Code) barcode system to track previously sold products and control warehouse stock levels. This practice can effectively reduce cost, risk, and better match the fast changing consumer taste.

5. Transportation: Speed of delivery for trendy electronic products is a major consideration. Air transport can be used for bring in the shipment of goods.

Cargo ships can be used for the second round of imported products. (The first lot of goods imported by Air are usually higher in retail price. This is often the arrangement to satisfy customers who are willing to pay a higher price to purchase the latest gadgets. The second lot of goods are for the customers less eager to purchase the newest products and will wait for a price drop.)

6. Logistics:Also known as physical distribution. Patrick can consider

outsourcing to a logistics firm to manage the physical distribution of products.

Patrick can enjoy benefits such as logistic information system, warehouse storage services that are provided by a third-party logistic firm.

Topic M09

Best Marketing Mix Strategy requires:

z

Consideration of factors under its control

z

Marketing analysis, planning, implementation, and control

z

Achieve the company’s marketing objectives

Activity 3: Conclusion

Conclusion to Activity 3:

1. The company designs an integrated marketing mix comprised of factors under its control – product, price, place, and promotion.

2. To find the best marketing strategy and mix, the company implements a marketing analysis, planning, implementation, and control.

3. An effective marketing program blends all of the marketing mix elements into an integrated marketing program designed to achieve the company’s marketing objectives by delivering value to consumers.

After reviewing the conclusion with students, go to the next slide to begin Activity 4.

Remarks:

1. This activity is only an exercise to strengthen students’ understanding on the application of marketing mix in reviving a company.

2. Teacher should make note to students that in real-life situations, a rebranding project would be much more in-depth and many aspects would require careful considerations.

Source: Marketing, an Introduction (Ninth Edition), Gary Armstrong, Philip Kotler, Pearson Prentice Hall, New Jersey, 2009.

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Topic M09

z

Form into groups of 4 or 5 to match the marketing mixes in a logical order.

z

Construct 5 sets of marketing mixes and write them down in the blank area provided.

z

Note that each choice should only be used once.

Activity 4:

Matching Marketing Mix

Activity 4

Ask students to form into groups of 4-5. Teacher explains the activity and ask students to complete Activity on Student Worksheet p.7.

Topic M09

Activity 4: Matching Marketing Mix

After students’ completion of the worksheet, go to the next slide for different marketing mix combinations.

Example 1:$500.00 (Price), Mong Kok (Place), Dress (Product), Magazine (Promotion).

Example 2:$2,000.00 (Price), Tsim Sha Tsui (Place), Watch (Product), Television Commercial (Promotion).

Remarks:

Again, there are no absolute answers for the exercise. Students’ answers should be justified with appropriate combinations that create a market position matching the targeted customers.

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Topic M09

Activity 4: Matching Marketing Mix

Marketing Mix Combinations

Instructions:

1. Start off the conclusion by asking volunteers to share their results.

2. Provide appropriate feedback and suggested marketing mix combinations for students’ reference.

3. Teacher should stress that there is no definite combination but it is important to select appropriate combinations of a marketing mix to form an effective market position.

1. In the above examples, Set 1 to Set 4 would be logical choices of marketing mix combinations but would not position the company at a distinctive market position (such as Set 5). The rationale behind setting a company’s marketing mixes to a “logical” state is because customer acceptance is more likely. By changing only one element of the marketing mix ($9,000.00, Mong Kok, Dress, Magazine), this example varies dramatically and is targets a totally different customer segment.

2. The promotion choice should match the type of products sold by the firm. In practice, magazine or print advertising is effective for apparel products due to the segmented nature of magazines plus the use of high quality of color images. Another effective marketing mix match is online promotion and technology products such as in the example Set 3 above, where laptop computers and online banners share great similarities in their nature.

3. An example of a poor match of marketing mix would be Set 5. This combination might create a strong market positioning but it could perform poorly due to the mismatch of price, product and promotion.

Remarks:

1. Although an illogical marketing mix could possibly create a distinctive market positioning (such as Set), it is difficult to gain customer acceptance if the marketing mix combination is too extreme.

2. Marketers must consider these marketing mix combinations carefully, and each element in the marketing mix supports the other in order to create successful market positioning.

Topic M09

Activity 4: Conclusion

When dealing with marketing mix, marketers should

:

● Consider marketing mix carefully when deciding on company’s market positioning strategy.

● Define a clear, distinctive and desirable market position using the 4Ps approach.

● Create an acceptable market positioning strategy that matches consumer perceptions and thinking.

1.It is important to consider the marketing mix carefully when deciding on the company’s market positioning. The choice of a marketing mix should be justify on its appropriateness and effectiveness against the marketing objective.

2.The company must use the marketing mix appropriately to define a clear, distinctive, and desirable market positioning relative to competing firms in the minds of target consumers.

Go to the next slide to begin Activity 5 – Discussion on Changing Environment.

Remarks:

This activity aims to strengthen students’ understanding on the application of the marketing mix on various products and services. Teacher should make note that in real-life situations, the use of marketing mix would be much more complicated and many aspects would require careful considerations. Example would be the choice of “Place”. Not only is the district important for choosing a location for a retail store, but the format such as shopping mall or street-side store will affect the outcome dramatically.

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Topic M09

Activity 5: Discussion on Changing Environment

Activity 5

Instructions:

1. Ask students to remain in their groups and complete Activity 5 as a team.

2. Next, product images of various decades are shown to the students.

3. Ask students to observe the images, discuss and compare them to the ones at present time.

4. Students are required to write down the factors that have led to these changes in the space provided on Activity 5.

5. Teacher should get groups to share their thoughts and generate discussions.

Remarks:

1. Students can gather around in a circle and discuss the topic as a group, but write down the points on their individual worksheets.

2. The factors leading to the changes can be:

Micro-environment: company management decisions, change in consumer taste, increase in competition, change in public regulations.

Macro-environment: demographic, economic, nature, technological advancement, political, cultural change.

Topic M09

A. B.

C. D.

Show this slide to the students to provide a basic reference to the kind of products we are using in the 21^stcentury.

Show the next 3 slides to the students to give them an idea of the products that were used for the last few decades (70’s, 80’s, and 90’s).

The products that are used in the 21^stcentury:

A: Digital music player century B: LCD TV

C: Mobile phone with TV function D: Laptop computer

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Topic M09

A. B. C.

Products in the 70’s:

A. Rotary Phone

Changes: no longer in use and was phased out in 1970s with the onset of touch tone phone. In the 21^stcentury, most people use a mobile phone for communication rather than a fixed-line phone.

Factors: change in user habits and technological advancement.

B. Vinyl Record

Changes: The primary medium used for commercial music reproduction for most of the 20^thcentury. It was gradually replaced by the CD-ROM in the late 80’s because it provided higher quality and more data on a single disc. In the 21^stcentury, most people use MP3 as the primary music medium because it can store hundreds and thousands of songs in just a single MP3 player.

Factors: Technological advancement along with the increase demand for portable music device (vinyl record > cassette tape > CD-ROM > Mini Disc > SD card > Flash memory).

C. Television

Changes:In 2008, digital television signals were introduced to the general public.

Instead of using radio frequencies as the transmission in the 70’s, we can now transmit a large amount of data through the digital network. Other than the transmission method, one noticeable difference is the full color display instead of black and white. Another change is the number of televisions per household. In the 70’s, it was typical that each household would have only one television. The number of televisions today have increased and some families may even have one television per room.

Factors: Technological advancement in visual display method.

Remarks:

Teacher is not restricted to the above suggestions and may include any relevant points to explain the concept.

Topic M09

A.

B.

C.

D.

A. Cassette Tape

Changes: Cassette tape was the most popular portable music media in the last century. It is no longer in use today and is replaced by larger storage medium such as flash-memory (e.g. SD card or Memory Stick). Most portable music players offered today have large built-in flash- memory storage (1G to 100G) that could hold up to 4,000 songs.

Factors: Technological advancement along with the increase demand for portable music device (vinyl record > cassette tape > CD-ROM > Mini Disc > SD card > Flash memory).

B. Mobile Phone

Changes: Also known as 大哥大, is the first generation of mobile phone offered to the consumer market in the late 80’s. The size of the phone is much larger compared to the mobile phones we use today. These mobile phones are sold at a very high price due to the newly recognised technology at the time. Only business owners and senior management were affordable.

Factors: Technological advancement, customer demand for mobile communication in personal and business.

C. Desktop Computer

Changes: Also known as Personal Computer (PC), was widely produced in the 80’s and onward.

Compared to the present, the cost of owning a PC has dramatically declined due to the large demand and increase in number of companies. One noticeable change in the computer market is the replacement of CRT (cathode ray tube) monitor by LCD (Liquid-crystal display) monitor.

Factors: Again, technological advancement has played a significant role in this market’s movement. Increases in competition and manufacturing processes have led to the changes in PC currently being offered.

D. Television

Changes: Viewers can switch channels and adjust the speaker volume with just a click of a button on the remote control . The technology has brought convenience to our daily life.

Factors: Technological advancement.

Remarks:

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Topic M09

A. B. C. D.

A. CD-Player

Changes: CD-players are no long in use and replaced by MP3 players.

Factors: The company is a major factor for changes in the portable music industry.

Many companies tried to develop their own format of digital storage media for replacing the CD-ROM. An example would be Sony for developing the Mini Disc (MD) and Memory Stick, Panasonic / SanDisk / Toshiba for developing the SD (Secure Digital) card and SanDisk for developing the CompactFlash (CF). One of the major reasons for developing proprietary standards and formats was due to keen competition.

B. Mobile Phone

Changes:Only provides limited functions such as dial-in and dial-out, monochromatic screen display, and simple text messaging. The number of mobile phone users have dramatically increased due to the price drop and cultural changes in “individualism”.

Factors: Technological advancement, cultural changes, economic changes, increase in customer demand for mobile communication in personal and business usage.

C. Personal Computer

Changes: higher storage for hard disk, much colorful display, and faster CPU. Most PCs produced before the 90’s are made of plastic in a beige color. The computers offered today have much more variety in style and design.

Factors: Changes in consumer tastes, improvement in manufacturing processes, and technological advancement.

D. Flat-Screen CRT Television

Changes: Flat-Screen CRT were used to provide better viewing quality, but now replaced by LCD displays.

Factors: Technological advancement.

Remarks:

Topic M09

Activity 5: Conclusion

External factors in marketing environment:

1. Many companies view the marketing environment as an uncontrollable element to which they must react and adapt. Factors such as the constantly changing customer tastes and continuous technological advancements are something marketers should be aware of.

2. The changes in marketing environment:

Technological Advancement – The improvement in information technology, logistic management technology, and data storage media have led to product innovation. Better and more advanced products are constantly introduced to the market to satisfy customer needs.

Increase in Competition – The world is getting smaller and smaller due to the effect of improvement in information technology and globalization.

Foreign companies are less challenged to expand into overseas markets.

The transparency of production processes leads to products similarities and have also increased the market competition.

Cultural Change – As the society is moving more and more towards individualism, the products and services offered to the market will be catered towards personal or individual use.

Change in Consumer Taste – Consumer taste is changing much more rapidly than ever. In order to adapt to this trend, companies are offering new products in a shorter product-lifecycle to suit the taste of the market.

3. Companies analyse the ever-changing environmental forces through marketing research and design strategies that help the company avoid threats and take advantage of the opportunities the environment provides.

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Topic M09

Conclusion

Why Create a Marketing Strategy?

z

Change is constant – constant analysis needed

z

Modifying and updating the marketing mix is essential to adapt and survive

z

To differentiate the company, its products, services from competitors

Teacher concludes the lesson by summarising the concepts delivered in lesson 2 with the points below.

Conclusion to Lesson 2:

1. The constantly changing customer taste alters the environment we live in.

2. In business management, we need to constantly modify and update our marketing mix in order to suit the taste of the market audience.

3. By applying the appropriate marketing mix, companies can create a strong market position among competitors and generate competitive advantage through its products and services.

Topic M09

The End

Teacher concludes the 2 lessons by reviewing the key concepts covered.

Key concepts covered in these 2 Lessons:

• Define the needs and wants of segmented customers on products and services. (Activity 1 and 2)

• Understand the importance of market positioning for products and services. (Activity 2 and 4)

• Amend marketing mixes to develop market positioning for rebranded product / services. (Activity 4)

• Understand the use of marketing mix strategy. (Activity 3)

• Apply marketing mix strategy in rebranding a company. (Activity 3)

• Understand the external factors and forces that affect the company’s positioning. (Activity 5)

End of Lesson 2

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Topic M09: Marketing Mix Student Worksheet P.1

BAFS Learning and Teaching Example As at April 2009

BAFS Elective Part - Business Management Module – Marketing Management Topic M09: Marketing Strategies for Goods – Marketing Mix

Activity 1: Identifying Market Segment

Identify the characteristics of the Target Customers of each footwear type below according to Occupation, Gender and Age Group. Tick a box according to your choices in each column. If you can identify any brand name associated with the specified type of footwear, write it down in the space provided.

*There are no definite answers, tick the choices according to your perception of the product.

You can even check more than one choice in each column.

Products / Brand Occupation Gender Usage Age Group

1. Baby Shoes ($290) Brand:

_______________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

2. Soccer Shoes ($650) Brand:

_______________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

3. High Heel Shoes ($1280)

Brand:

_______________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

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Topic M09: Marketing Mix Student Worksheet P.2

4. Running Shoes ($699)

Brand: _______________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

5. Hiking Shoes ($560) Brand: _______________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

6. Basketball Shoes ($799)

Brand: _______________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

7. Leather Shoes ($3,400) Brand: _______________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

8. Open Toe Sandals ($190) Brand: _______________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

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Topic M09: Marketing Mix Student Worksheet P.3

9. High Heel Boots ($1490)

Brand: _______________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

10. Climbing Boots ($190) Brand: _______________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

11. Beach Sandals ($190) Brand: ________________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

12. Water Boots ($290) Brand: _______________

White-collar Workers

Blue-collar workers

Sport Players

Students

Retirees

Other:___________

Male

Female

Both

Daily

Occasional

Professional

Babies

Kids

Adults

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Topic M09: Marketing Mix Student Worksheet P.4

Activity 2: Role Play - Market Positioning

Pair up with a neighbouring student and perform a sales drill scenario. One person acts as the footwear shop sales person and the other person as a walk-in customer. The sales person should spend 1 to 2 minutes trying to uncover the type of footwear that will satisfy the needs and wants of the walk-in customer by asking the questions listed below.

After completing all the questions, the sales person should provide appropriate footwear suggestions that match the customer requirements. Next, swap positions and practice again…..

Sales-drill

Q1 Sale Assistant: Good afternoon (or morning)! Welcome to Foot-Shocker. May I help you?

Customer: I‘d like to buy a pair of shoes for my friend as a present but don’t know which type of shoes I should get.

Q2 Sale Assistant: Oh I see! Well in this case, we’ve a variety of choices in our shop for you to choose from.

Anything from sports shoes to outdoor boots to leather dress shoes and boots.

Customer: That’s wonderful. I’m sure you can recommend a pair of shoes just right for my friend.

Q3 Sale Assistant: Is your friend an active person who loves outdoor or sports?

(YES => Q4, NO => Q7)

Q4 Sale Assistant: I see I see. What activities does he/she like? Outdoor activities or sports?

(Outdoor => Q5, Sports => Q6)

Q5 Sale Assistant: Does your friend like to go hiking, fishing and camping? Or is your friend the extreme type who likes mountain climbing? (Hiking => Type B, Extreme => Type E)

Q6 Sale Assistant: I believe your friend must be very health conscious and physically fit. Let me take you to the sports section to have a closer look. (Type A)

Q7 Sale Assistant: Oh, then I believe a pair of leather dress shoes is just right. Is your friend a MR or MS?

(MR => Type C, MS => Type D)

Type A: I’d recommend you to buy a pair of professional sport shoes for your friend.

Type B: A pair of outdoor hiking shoes would be perfect. It is suitable for light climbing, waterproof, and durable for any outdoor activity.

Type C: I’d highly recommend you to buy a pair of leather shoes. It’s great for everyday walking and provides great comfort and style even after long hours of wear.

Type D: Either a pair of leather high heels or leather boots would suit perfectly for your friend for daily use or at work.

Type E: Here is a pair of professional, reliable climbing boots for the most extreme situations.

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Topic M09: Marketing Mix Student Worksheet P.5

Activity 3: Rebranding exercise: “Tai Cheong Hong 太昌電器行”

Case Study

Introduction

A local electronic store at Sham Shui Po called Tai Cheong Electronics

太昌電器行

selling imported goods such as CRT television, CD stereos, microwaves and fans to customers around the neighbourhood. The management is considering refreshing their business practices due to slow store traffic, sales and profit. Patrick Wong has recently taken over the ownership of the store due to his father’s retirement. He plans to research the market to determine the current demand for electronic gadgets. Patrick is determined to revive the failing business and restore the family business to its original success then expand as a chain.

Reviewing the financial history, Patrick notices that the business was relatively good for the past 10 years. As the local area demographics have changed with aging, the result was a reduced demand for new electronic goods. He knows a new strategic plan is needed to address the changes and reposition the company.

Review of Current Business

The first thing Patrick did was to conduct an analysis to identify the existing weaknesses of the business. After some investigation, he discovered:

i. Sham Shui Po district and his customers have aged significantly;

ii. Customers’ tastes are rapidly changing and product assortment is out-dated;

iii. Store identity is weak without impact to consumers;

iv. Internal staff members are customer sensitive, but they lack sufficient technical information and product knowledge.

1. Using the marketing mix, which elements should Patrick consider in order to facilitate the rebranding of his retail operations and achieve his objectives?

2. Based on your assessment, how can he use your choices to effectively communicate to the target customers and establish an effective market presence and position? Explain your answers in the blank space provided.

Turn to the next page to fill in your answers.

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Topic M09: Marketing Mix Student Worksheet P.6

Select the boxes below that would assist Patrick in achieving his rebranding objectives.

Marketing Mix A. Product

Variety Brand Name Quality Packaging Features Services After Sale Services

B. Price

List Price Allowances Promotional Price Payment period Discounts Credit terms

C. Promotion

Advertising Sales promotion Personal selling Public relations

D. Place

Channels Transportation Coverage Logistics

Locations Inventory

Explain your reason(s) of choice in the space provided.

A. Product

_________________________________________________________________

B. Price

_________________________________________________________________

C. Promotion

_________________________________________________________________

D. Place

_________________________________________________________________

Example: Product Variety – The increase of products variety offered by Patrick’s shop can

attract more customers of various types and age to visit the store, and therefore increase

the store’s traffic.

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Topic M09: Marketing Mix Student Worksheet P.7

Activity 4: Matching Marketing Mix

Form into groups of 4 or 5 to match the following marketing mixes in a logical order to construct 5 sets of marketing mixes. Select one item from each category and write them down in the blank area provided.

Each choice should only be used once.

Price Place

$500.00 $2,000.00

$9,000.00

$25,000.00

$45,000.00

Mong Kok Shum Shui Po Tsim Sha Tsui

Central Causeway Bay

Product Promotion

Hand Bag Hotpot Laptop Computer

Watch Dress

Magazine TV Commercial

Online Banner Outdoor Billboard

Coupon

Price Place Product Promotion

(eg:) $500 Mong Kok Dress Magazine

Set 1: _________ _ _________

Set 2: _________ _ _ _________

Set 3: _________ _ _ _________

Set 4: _________ _ _ _________

Set 5: _________ _ _________

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Topic M09: Marketing Mix Student Worksheet P.8

Activity 5: Discussion on Changing Environment

Observe the product image from the slides #27 - #29 and compare the differences of the products in the 70’s to 90’s with products in the 21

^st

century in terms of style, design, and functionality. Write down the changes you feel have occurred and identify the factors that led to these changes.

Tips: These factors can be - Micro-environment: company management decisions, change in consumer taste, increase in competition, and change in public regulations.

Macro-environment:

demographic, economic, nature, technological advancement, political, cultural change, globalization, internet, improved communications, mobile phones…etc.

Topic M09: Marketing Mix Topic Overview P.1