Marketing Principles

BTEC HND LEVEL 5

BUSINESS MARKETING/ACCOUNTING

Unit no.4

Marketing Principles

Assessment title

Marketing Elements

Table of contents

3.1 Explain how products are developed to sustain competitive advantage

3.2 Explain how distribution is arranged to provide customer convenience

3.3 Explain how prices are set to reflect an organizations objectives and market conditions

3.4 Illustrate how promotional activity is integrated to achieve marketing objectives

3.5 Analyze the additional elements of the extended marketing mix

4.1 Plan marketing mixes for two different segments in consumer markets

4.2 Illustrate differences in marketing products and services to businesses rather than consumers

4.3 Show how and why international marketing differs from domestic marketing

Conclusions

Recommendations

Bibliography

3.1. Explain how products are developed to sustain competitive advantage

In business, competitive advantage can be defined as the strategic advantage that one business entity has over its rivals within the same competitive industry. Achieving a competitive advantage puts a business in a stronger position within its business environment.

There are several ways in which a business might think about developing a product in order to sustain or build a competitive advantage:

Staged release into the market

It could be considered beneficial to hold back certain developments you have made to a product so that you can release an improved version of the product periodically, rather than release it once and then fail to improve upon the product thereafter. The staged 'improvement' of the product can make it appear dynamic and exciting to the customer, whereas rival products might be perceived as static and boring in comparison.

Differentiation and positioning

If you can differentiate your product from that of your competitors, then you can position yourself in a prime position in the market. If you can provide unique and special benefits to your customers that no one else can provide them, then you are well-positioned to maintain them as loyal customers.

Research and marketing

The development of new products has to be based on the wants and needs of the customers. Rather than simply releasing a product and waiting to see if the demand is there for it, firms should be conducting market research beforehand in an attempt to find out whether there is a) a demand for a product and b) a gap in the market for the particular product if the firm releases it.

3.2 Explain how distribution is arranged to provide customer convenience

There are several ways in which businesses arrange distribution to provide customer convenience. The methods used may vary slightly based on what sort of business is being operated. For example, those who are running an e-commerce business will have different techniques than those who have a standard "real world" business headquarters. Also, different real world businesses may have different techniques dependent upon the size of the business and where they may be dealing with customers.

First, let's look at e-commerce. Amazon.com is a great example of how distribution can be arranged to make things more convenient for customers. Amazon offers free standard shipping for items that are advertised through Amazon. One of the reasons that they are able to do this is because they have distribution centers located all over the place. When you make a purchase from the site, you will receive your packages from a particular distribution center and the location of the center is based on whichever one of the Amazon fulfillment centers is nearest you and contains the item within its standard inventory.

This results in savings for the customer as well as faster receipt of items purchase, as they often do need to travel very far. It also means that packages are less likely to arrive damaged or in poor condition, as they don't have to be in transit as long or switch hands as many times.

Next, there are stores that you can walk into and order from their display inventory. The item will then be sent to you from a local distribution center that is found in another part of your city or state. This method allows stores to cut down on transportation costs as items don't have to be shipped in large quantities to each individual store. They are just housed at a central distribution warehouse instead. The savings that companies see in their own transportation, warehousing, labor and other costs translate to savings in final prices for customers. They also usually mean that fulfillment processes are more reliable as well, as the network for handling distribution isn't as complex and prone to problems of challenges.

3.3 Explain how prices are set to reflect an organizations objectives and market conditions

Pricing Strategies

One of the four major elements of the marketing mix is price. Pricing is an important strategic issue because it is related to product positioning. Pricing also affects other marketing mix elements as well, such as product features, channel decisions, and promotion. A pricing strategy is a course of action designed to achieve pricing objectives. This strategy helps marketers set prices. There are many ways to price a product. The following, figure 1.1, shows a list of five major types of pricing strategies. (Business, 8th Ed., pg 421)

New-Product Pricing

There are two primary types of new product pricing strategies, price skimming and penetration pricing. An organization can use one or both of them over a calculated period of time.

Price