2INTRODUCTION TO MARKETING Table of Contents Task 1...............................................................................................................................................5 P1: Use of Marketing Techniques to Market Products....................................................................5 P1.1 Heineken..............................................................................................................................5 Background Information of Company.....................................................................................5 Branding and Relationship Marketing.....................................................................................6 Market Segmentation...............................................................................................................6 Marketing Mix.........................................................................................................................7 Business objectives..................................................................................................................9 Growth Strategies (Ansoff’s Matrix).......................................................................................9 Survival Strategy...................................................................................................................10 P.1.2 H&M.................................................................................................................................10 Background Information of Company...................................................................................10 Branding and Relationship Marketing...................................................................................10 Market Segmentation.............................................................................................................11 Marketing Mix.......................................................................................................................12 Business objectives................................................................................................................13 Growth Strategies (Ansoff’s Matrix).....................................................................................13 Survival Strategy...................................................................................................................14 P.2: Limitations and Constraints of Marketing..............................................................................14
3INTRODUCTION TO MARKETING P3: Use of Marketing Research to the Development of Marketing Plan in H&M........................15 Marketing Plan Process (SOSTAC)..........................................................................................15 Relationship between Marketing Research and Marketing Plan...............................................16 Information Gathering in Marketing Research..........................................................................16 PEST......................................................................................................................................16 SWOT....................................................................................................................................17 SMART Objectives...............................................................................................................17 P 4: Use marketing research for marketing planning....................................................................18 Definition of Marketing Research.............................................................................................18 Quantitative and Qualitative Data.............................................................................................18 Primary and Secondary Research Methods...............................................................................18 Uses of Research- Reduce Risk in Decision Making................................................................19 Task 2.............................................................................................................................................19 M1: Compare marketing techniques used in marketing products in two organizations................19 Task 3.............................................................................................................................................20 M2: Limitations of Marketing Research Used in Developing Marketing Plan of H&M..............20 Task 4.............................................................................................................................................21 D1: Effectiveness of the Use of Techniques in Marketing Products in H&M..............................21 Task 5.............................................................................................................................................22
4INTRODUCTION TO MARKETING D2: Recommendations for Improving Validity of Marketing Research in Developing Marketing Plan of H&M.................................................................................................................................22 Ways to Ensure Market Research Meets Organizational Objectives of H&M.....................22 Changes and Recommendation..............................................................................................22 Reference List................................................................................................................................24
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5INTRODUCTION TO MARKETING Task 1 P1: Use of Marketing Techniques to Market Products P1.1 Heineken Background Information of Company Heineken is the most popular global beer producing company. The company was established in the year 1864. It has a proud and long history as an independent global brewer. Apart from serving in its domestic market, the organization also operates in 70 international countries and becomes the number two brewer in the world. Furthermore, the organization has grabbed number one position in the market of Europe. Heineken is mostly popular for its signature green bottle and red star (Ashenfelter, Hosken and Weinberg 2015). Apart from that, the quality of beer and unique design of the beer bottle has made it unique in the global market. The organization has grabbed 9% global market share holding a significant portion of global market(Theheinekencompany.com 2018). Business objectives To be the leading global brewing company To embrace innovation in the areas of production, communication, marketing and packaging Togrowbusinessinconsistentandsustainablemannerforconstantlyimproving profitability
6INTRODUCTION TO MARKETING Branding and Relationship Marketing Marketing is the activities associated with an organization for promoting and selling their products and services. It can also include marketing research and advertisements. In case of the brandingstrategyofHeineken,theauthenticitylogooftheorganizationreinforcesand communicates the brewing authenticity and heritage. The organization uses a special advertising campaign like Lifestyle executional framework spreads the message of unique personality among the people (Ghose, Heiman and Lowengart 2017). In case of relationship marketing, Heineken uses social media sites for interacting with the valuable customers on frequent basis for leading an effective relation with them. The organization also uses loyalty program like “Star Treatment”, where it provides free beers to the customers on special events (Akinyoade, Ekumankama and Uche 2016). It leads to effective and long term customer relationship with valuable customers. Market Segmentation SEGMENTATION VARIABLE AND TARGET MARKET OF HEINEKEN SEGMENTATIO N VARIABLE GeographicGlobal Market DemographicAge: 25-50, mostly adult Gender: Both Male and Female Income: Upper middle income group customers EducationLevel: Educated people Occupation: Stable job holders, corporate officials and businessperson PsychographicPersonality:Positive Personality Lifestyle: Modern lifestyle
7INTRODUCTION TO MARKETING Attitude: Positive Attitude Hobby:Inclined to entertainment BehavioralBrand Loyalty: High brand loyalty Distribution Channel used: Both online and offline distribution channels Benefit Sought: Seeking discounts and offers TARGET MARKET High income customers will be targeted, who can afford the price of premium beer brand The people having elegant lifestyle will be selected with unique beer brand The people coming to night club and pubs are mostly targeted Table 1: Segmentation Variable and Target Market of Heineken (Source: Aquilaniet al.2015) Marketing Mix Product Heineken is mostly involved in brewing and marketing of specialty, premium, regional and local beers and ciders. The organization produces pale larger beer having alcohol content of 5.4% (Theheinekencompany.com 2018). It has owned around 165 breweries all over the world. Beside the main products like larger beer and light larger beer, the organization is also associated with brewing and marketing of 250 other types of beers. It markets its beer products under several names like Desperados, Foster’s, Cruzcampo, Heineken, Dos Equis and Anchor. Price
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8INTRODUCTION TO MARKETING Heineken has to maintain an appropriate pricing strategy for enhancing its profit and revenue volume. The organization has mainly adopted premium pricing strategy, which it charges high prices for its high quality beer brand (Chen and Shieh 2016). The premium pricing policy has been projected as value based pricing, where high end products are charged at high prices. Place Heineken has an international presence of around 170 countries, having operating countries located in Western Europe and Asia Pacific Region (Sluyterman and Bouwens 2015). The organization has a strong distribution network for reaching at the end customers. It includes the services of wholesalers and retailers for reaching at the customers through bars, liquor shops, clubs, hotels and restaurants. Apart from that, the customers can also avail Heineken’s beer products through online order system. Promotion Heineken believes in creation of catchy commercials, which facilitates in fostering positivebrandawarenessthroughprintmediaandelectronicmedia.Thecommercial advertisements of the organization are telecasted on the popular channels of television, aired on popular radio station and displayed on billboards and magazines (Thomé and Soares 2015). Apart from that, the organization also uses social media sites for increasing the exposure of beer products to new generation customers. Growth Strategies (Ansoff’s Matrix) GROWTH STRATEGIES OF HEINEKEN MARKETHeineken seeks to achieve market growth and increase market share
9INTRODUCTION TO MARKETING PENETRATIONwith existing beer products in existing Netherland market. MARKET DEVELOPMENT Heineken seeks to achieve market growth through targeting the existing beer products into global markets. PRODUCT DEVELOPMENT Apart from offering only beer products, the organization should also offer some other types of health drinks in its domestic market. DIVERSIFICATIONHeineken can get huge market growth through developing new health drinks and marketing them to international markets. The organization should assess the international scope for their new products and based on the scope, it should launch its new products in international markets. Table 2: Growth Strategy ofHeineken (Source:Calvo Porral and Levy-Mangin 2015) Survival Strategy DifferentiationInnovativepackaginganduniquequalityofbeerproductof Heineken helps its long term business sustainability. ProvidingOutstanding Customer Service Customized bottling and unique taste of beers act as effective survival strategy forHeineken. Increasing Marketingand Business Expansion Internationalexpansionandglobalcustomersoftencompensatethe business loss occurred in domestic market leading to long term business sustainability. Table 3: Survival Strategies ofHeineken (Source:Amienyo and Azapagic 2016)
10INTRODUCTION TO MARKETING P.1.2 H&M Background Information of Company Hennes and Mauritz AB (H&M) is the Swedish multinational clothing retail company. It is mostly popular for its fast fashion clothing for women, men, children and teenagers. This organization and its associated organizations operate in almost 62 countries having more than 4500 stores. H&M has also a significant online presence having online shopping availability in 33 countries. H&M has grabbed 7.5% market share in the global market with the unique fashion trends in the design of clothing (H&M 2018). Business objectives To be the leading clothing retailer in global market To lead the change towards more sustainable fashion industry To become the market leader in fast fashion industry Branding and Relationship Marketing Marketing goes beyond just selling or products and services and it is associated with promotion and customer relationship of an organization. In case of branding of H&M, the logo of the organization having red color represents its significant trademark in fashion industry. The promotional message of the organization gives an appealing feeling of quality at best price (Thompson and McLarney 2017). In case of relationship marketing, the organization uses several loyalty programs for maintaining a positive relationship with the customers. The organization also uses social media sites for keeping in constant touch with the customers.
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11INTRODUCTION TO MARKETING Market Segmentation SEGMENTATION VARIABLE AND TARGET MARKET OF HEINEKEN SEGMENTATIO N VARIABLE GeographicGlobal Market DemographicAge: All age group from children to adults to aged person Gender: Both Male and Female Income: Lower Middle Class to high income group EducationLevel: Educated people Occupation: Stable job holders, corporate officials andbusinessperson,students,retiredperson, household PsychographicPersonality:Positive Personality Lifestyle: Sophisticated lifestyle Attitude: Positive Attitude Hobby:Fashion trend BehavioralBrand Loyalty: High brand loyalty Distribution Channel used: Both online and offline distribution channels Benefit Sought: People seeking offers and discounts TARGET MARKET The customers having high level of fashion sense will be targeted The women from lower middle class and working class will be targeted Consumers having high family value will be targeted with all types of clothing
12INTRODUCTION TO MARKETING Table 4: Segmentation Variable and Target Market of H&M (Source: Dunfordet al.2016) Marketing Mix Product The core range of products under the fashion brand of H&M includes accessories and clothing like basic jumpers, cardigans, sleeved jersey dresses, vests, pants, fashion shirts, jeans, jackets, shoes, jewelry, T-shirts and purses. The organization highly focuses on the quality of clothing and always incorporates latest fashion trends in designing the clothing. Moreover, 25% organization’s stock includes fast fashion clothing for attracting new generational customers (H&M 2018). Price H&M mostly follows affordable pricing strategy in which the organization charges low price for their clothing. The organization targets lower middle and high income group customers through this pricing strategy. Furthermore, H&M also offers various offers and discounts on its core and fresh products (Boström and Micheletti 2016). Place H&M uses strong distribution network for reaching at the valuable customer section. It is a second ranked retail of clothing having spread in almost 55 countries. Apart from retail outlet, the customers can also avail it’s clothing through online ordering system.
13INTRODUCTION TO MARKETING Promotion H&M comes with different creative television advertisements for promoting unique values of the clothing. The organization has its own YouTube channel, where it initiates unique advertising campaign for increased customer engagement (Dumaet al.2016). Social media and public relationship is also the integral part of the organization to promote its products. Growth Strategies (Ansoff’s Matrix) GROWTH STRATEGIES OF H&M MARKET PENETRATION H&M seeks to achieve market growth and increase market share with existing clothing products in existing Sweden market.The market share of the company may increase may increase, if the competitor companies reach their capacity limit. MARKET DEVELOPMENT H&M seeks to achieve market growth through targeting the existing clothing and accessories into global markets. PRODUCT DEVELOPMENT H&M can increase its business growth through offering some other types like grocery and food products in its Sweden market. DIVERSIFICATIONH&M can get huge market growth through developing new product items like fresh food products and marketing them to international markets. Table 5: Growth Strategy ofH&M (Source:Norum 2018) Survival Strategy Keeping Cost DownH&M uses low cost production strategy for enjoying economies of scale
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14INTRODUCTION TO MARKETING for long term business sustainability DifferentiationThe fast fashion clothing of H&M highly attracts large group of new generation customers Increasemarketingin International Countries H&M can explore new customer groups and avoid tough competition in domesticmarketthroughinternationalizationleadingtolongterm business sustainability Table 6: Survival Strategy of H&M (Source: Mo 2015) P.2: Limitations and Constraints of Marketing UnfairTrading Regulations 2008 Both Heineken and H&M ensure this regulation that prevents them to perform unfair trade. It actually intended to protect the consumers from unfair trade. ConsumerProtection Regulation Heinekenhastocomplywiththehealthinterestandhealth protection regulation through its beer product H&M has to establish informative leveling on all clothing and accessories for protecting customers’ interests H&M has also to accept the return of goods from the customers in case of any dispute in clothing
15INTRODUCTION TO MARKETING DataProtectionAct 1998 BothHeinekenandH&Marerestrictedtodisclosepersonal information of the customers to unauthentic users The personal information of the consumers is not also kept by the organization no longer than it is necessary Theconsumershavetheirlegalrightsforcontrollingthe information about themselves ConsumerCreditAct 1974 and 2006 As per Consumer Credit Act 1974, both Heineken and H&M must obtain credit license from the Office of Fair Trading for using credit facilities As per Consumer Credit Act 2006, the consumers can challenge unfair debtor-creditor relationship to court The idea of the act is also intended towards allowing the debtors for confronting the unfair relationship with the creditors. Voluntary Constraints AdvertisingStandard Authority (ASA) AsperASAcode,Heinekenmustnot influencethechildrenthroughits advertising content As per ASA code, H&M is restricted to convey any false promotional message to the customers Both the companies are always liable to monitor the public opinion regarding the advertisement PressureGroupandPressuregroupalwaysinfluencethe
16INTRODUCTION TO MARKETING Consumerismcustomer opinion of both the organizations hampering the sales Consumerism makes the customers aware of allconsumerprotectionactleadingto pressure in the organizations Acceptable languageBoththecountrieshastocreateits promotional content based on the preferred language of different international countries Table 7: Limitations and Constraints of Marketing (Source: Cleeren, Dekimpe and van Heerde 2017) P3: Use of Marketing Research to the Development of Marketing Plan in H&M Marketing Plan Process (SOSTAC) Situation: In this step, H&M assess its present business scenario for further planning business progress. Objectives: In this step, the organization set its mission and goals for getting exact business direction. Strategy: In this step, the organization set effective business strategies for achieving the set business objectives. Tactics: In this step, H&M determines detailed approach for achieving business goals. Actions: This step is associated with determining the actors and initiative for achieving the business objectives.
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17INTRODUCTION TO MARKETING Control: In this step, H&M set control measures for measuring the level of business progress over the time. Relationship between Marketing Research and Marketing Plan An effective marketing plan must have to start with exploration of specific marketing problems and market opportunities. Effective recognition of marketing threats and marketing potentiality through market research always facilitates in establishing effective marketing plan for business progress (Davcik and Sharma 2016). Market research also assists in identifying the market resources for implementing the marketing plan successfully. Information Gathering in Marketing Research PEST H&M successfully uses PEST framework of market research for leading effective marketing plan. The organization uses this framework for scanning the macro environment factors and their associated threats and opportunities for setting effective marketing plan. The PEST framework assesses the factors like political factor, economic factor, social factor and technological factor. The information gathered from political factors helps the organization in understanding political stability, trade regulations, taxation, anti-trust laws and many more things regarding an industry in a particular country. The economic factor facilitate in understanding the economic growth of a country, which is helpful in assessing the profit potentiality of a marketing plan (Samiee, Chabowski and Hult 2015). Social factors facilitate in assessing the social acceptance of a particular marketing strategy. Furthermore, the technological factor helps in deciding upon the technical compatibility of a particular market with the new marketing plan.
18INTRODUCTION TO MARKETING SWOT H&M effective uses SWOT framework for gathering huge market information for establishing effective marketing plan. This framework helps the organization to assess its internal strength and weakness and external threats and opportunities. SWOT stands for strength, weakness, opportunity and threats. The information gathered from strength factor facilitates H&M to assess its reputation in marketplace for its potential acceptance of new products. The assessmentofweaknessfacilitatesinimprovingtheweakareasoftheorganizationto successfully implementing the marketing plan (Krafftet al.2015). Furthermore, the opportunity factorsfacilitatetheorganizationinexploringthe externalmarketopportunityfor better exploiting the marketing plan. On the other hand, the assessment of weakness help the organization in avoiding the external market threats for successfully implementing the marketing plan. SMART Objectives SMART objective is the acronym for specific, measurable, achievable, realistic and time factors. H&M mostly uses these objectives for implementing a marketing plan successfully by using the information gathered from the market research. In specific factor, the organization establishesthespecificobjectivestobeachievedforimplementingthemarketingplan. Measurable and achievable factor assess the meaningfulness and degree attainability of the set specificobjectives(Eisend2015).Theorganizationusesrealisticfactortoassessthe reasonableness and realistic base of the specific objective. The time factor determines the specific time within which the organization completes the specific objective.
19INTRODUCTION TO MARKETING P 4: Use marketing research for marketing planning Definition of Marketing Research Marketing research is the systematic use of collecting, recording and analyzing data that is actually used for solving marketing problems. The purpose of marketing research is to recognize the marketing opportunities and threats through collecting information regarding consumers, competitors, exporters, suppliers, distributors and others (Keegan, Rowley and Tonge 2017). Quantitative and Qualitative Data Quantitative data is associated with the numeric data regarding the market environment of surrounding a business organization. Such data is mostly used for measuring and assessing the marketing opportunities and risks objectively. On the other hand, Qualitative data is associated with descriptive data regarding the market environment surrounding a business organization (Kumar 2015). Such data assesses the marketing opportunities and threats of a business organization in a descriptive way. Primary and Secondary Research Methods Primary research method is used to collect first hand data regarding the marketing opportunitiesandthreats.Thismethodmostlyusessurveytechniqueforcollecting straightforward information from the target market for effective marketing plan. On the other hand, secondary methodisused tocollectsecondaryand descriptivedataregardingthe marketing needs for leading successful marketing plan.
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20INTRODUCTION TO MARKETING Uses of Research- Reduce Risk in Decision Making Effective marketing research effectively assesses the market opportunities and market threats associated with a particular business organization. Moreover, the organizations can properly assess the potential market threats, which can hamper the business success. Hence, the effective market research helps the organizations to avoid the market threats beforehand they affect in business progress (Davcik and Sharma 2016). In this way, marketing research actually facilitates in reducing business risk and measure progress over time.
21INTRODUCTION TO MARKETING Task 2 M1: Compare marketing techniques used in marketing products in two organizations Similarities of Marketing Techniques Marketing TechniqueHeinekenH&M AdvertisementHeineken uses print media, social media for promoting its products in the market H&Musesmassmediasocial mediaandprintmediafor promotingitsproductsinthe market Public RelationUses sponsorship for maintaining public relation Usesmarketcampaignand sponsorship for enhanced public relation Value AdditionMore focused on adding value throughenhancingproduct quality Enhancing product quality is the onlymediumofenhancing product value to the customers Table 8: Similarities of Marketing Technique (Source: Eisend 2015) Differences of Marketing Techniques Marketing Technique HeinekenH&M Target CustomersHeinekenhasmostlytargetedtheadult people,whoarehighlyinclinedtowards Ontheotherhand,H&Mhas mostly targeted the people from
22INTRODUCTION TO MARKETING going night clubs, pubs, bars, hotels and restaurants. Moreover, such customers are highlyinclinedtowardsdrinkingbeers (Ghose, Heiman and Lowengart 2017). all age group having a sense of fast fashion clothing. UniqueSelling Proposition The USP of Heineken is unique quality of beer USPofH&Misfastfashion clothing PLC CycleThe beer product of Heineken has become thedominantplayerinthemarket.Itis actually in the maturity stage of PLC stages having substantial market share with steady volume of sales. H&Misstillenjoying the growth stage of PLC cycle, where the sales volume of the organizationisincreasing significantly(Dunfordetal. 2016).Furthermore,the organization has also reduced the cost with increasing economies of scale. PricingHeinekenmostlyusespremiumpricing strategy for offering their premium quality beers at high prices to the customers. H&Musesaffordablepricing strategyforofferingtheir clothingatlowpricestothe customers. Market ReachThe beers of Heineken is sold at almost 70 countries including the countries like USA, UK,Thailand,Maldives,China,India, Kuwait and many others. Thefastfashionclothingof H&M is available in almost 62 countriesincludingAsiaand Middle East countries. Table 9: Dissimilarities of Marketing Technique
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23INTRODUCTION TO MARKETING (Source: Boström and Micheletti 2016) Task 3 M2: Limitations of Marketing Research Used in Developing Marketing Plan of H&M LIMITATIONS OF MARKETING RESEARCH IMPACT ON H&M COST EFFECTIVENESSConducting extensive marketing research for developing marketing plan has been proved to be highly expensive for H&M. It ultimately impacts on the overall business cost of the organization. TIME CONSTRAINTSH&M often has to spend a considerable amount of valuable time for conducting market research. The excessive time gap between inception and completion of market research may obsolete the actually meaning of collected data. RELIABILITY AND VALIDITY OF INFORMATION GATHERED H&M may often gather biased information from market research.Suchlackofreliabilityandvalidityinthe collectedinformationcanhampertheoverallbusiness success. LEGAL AND ETHICAL CONSTRAINTS (DATA PROTECTION ACT) During data collection process in marketing research, H&M may face the issue of data protection for protecting the collected data from authentic access. Table 10: Limitation of Marketing Research
24INTRODUCTION TO MARKETING (Source: Samiee, Chabowski and Hul0074 2015) Task 4 D1: Effectiveness of the Use of Techniques in Marketing Products in H&M H&M is using market penetration and market development growth strategies from Ansoff’s matrix. These strategies are good for increasing marketing share in domestic and international markets (Kumar 2015). However, the organization should diversification strategy for avoiding the risks associated with older product lines. The branding of H&M through appealing communication message and logo is quite successful for establishing its brand (Eisend 2015). However, the organization should give more focus on its relationship marketing through increased customer interaction. The survival strategies of the organization are quite effective for long term business sustainability, but the organization should be more focused on improving the skills level of the employees towards fostering innovative fashion design for clothing.
25INTRODUCTION TO MARKETING Task 5 D2: Recommendations for Improving Validity of Marketing Research in Developing Marketing Plan of H&M Ways to Ensure Market Research Meets Organizational Objectives of H&M H&M ensures that market research meets its organizational objectives, when the data collected through market research is valid and reliable. The market research is proved to be valid enough, while it provides accurate insights regarding customer behavior. The information collectedinmarketresearchregardingcustomerandcompetitionsuccessfullymeetsthe organizational objectives to foster uniqueness in products. Such marketing research is proved to be effective in meeting the organizational objectives of H&M. Changes and Recommendation Research MethodInstead of using any one type of research method, H&M should use mixed method consisted of primary and secondary research method for collecting market information. Types of Information Used in Research H&M should use both quantitative and qualitative information for gathering more authentic and valid information regarding market environment. SamplesIn case of primary research, the organization should always choose more relevant samples associated with marketing objectives for collecting more authentic information. Sample SizeThe sample size for collecting quantitative data should be adequate enough for providing bias free and valid information regarding the market environment. Market ResearchersH&M should employ right researcher, who have concrete idea about marketing
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26INTRODUCTION TO MARKETING objectives. Such marketing researchers will be able to collect most authentic and accurate market information associated with business objectives. Table 11: Changes in Marketing Research (Source: Created by Author)