Influence of Marketing Mix on Brand Equity

This assignment explores the relationship between marketing mix efforts (product, price, place, promotion) and brand equity in the IT software sector. It examines existing research on this topic, drawing on academic sources such as Kim and Hyun (2011), Kitchen (2013), Krafft et al. (2007), and Leonidou et al. (2013). The assignment also incorporates insights from marketing communication theories and buyer behavior models, illustrating the complex interplay between these factors in shaping brand value.

Marketing Principles

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
1.1 Elements of marketing process.........................................................................................4
1.2 Benefits and costs of marketing orientation.....................................................................5
2.1 Analysing macro and micro environment using appropriate tools and techniques..........5
2.2 Segmentation criteria for products in different markets...................................................8
2.3 Choosing a target strategy for selected product...............................................................8
2.4 Impact of buyer behaviour on different marketing activities in different buying situations
................................................................................................................................................9
2.5 Positioning options for selected product/service..............................................................9
3.1 Development of product to sustain competitive advantage............................................10
3.2 Distribution Strategy......................................................................................................10
3.3 Pricing strategy...............................................................................................................10
3.4 Promotional activity.......................................................................................................11
TASK 2..........................................................................................................................................11
4.1 Marketing Mix for two different segments....................................................................11
4.2 Differences in marketing products and services to businesses rather than consumers. .12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

ILLUSTRATION INDEX
Illustration 1: Micro environment of an organization......................................................................4
Illustration 2: Macro factors of business environment....................................................................5

INTRODUCTION
Marketing principle is a process which is very helpful in understanding the customers’
requirements and accordingly providing them satisfaction. Because of high competition it is very
important to conduct these process as it provides a clear picture regarding audience can be
known. Mainly this process involves four process which are product, price, place and promotion
(Constantinides, 2006). Later when time passed on 3p's more were added which are people,
positioning and packaging. Present report is about Tesco which is a British multinational retail
store located in UK. This report covers concepts and process which are used in marketing and
different concepts which are used in segmentation, targeting and positioning. Further, it also
covers individual elements of the extended in marketing mix and use of marketing mix in
different contexts.
TASK 1
1.1 Elements of marketing process
Marketing process includes mainly four steps and they all are completed with achieving
the goal of creating value for target customers and in this process, some elements of steps are
performed repetitively (De Chernatony, McDonald and Wallace, 2010). Marketing process of
Tesco is described as below:
 Scanning marketing environment- To scan the marketing environment of Tesco, few
types of strategic tools can be used like SWOT, value chain and PESTLE analysis.
 Market strategy- It this process, three types of strategies are used, that is, segmentation,
targeting and positioning. In segmentation, customers are divided in different segments
by their age or gender. Further, targeting is a concept to target the specific category and
positioning refers to designing of brand image. So, customers understand about the
reason for which company stands (Ferrell and Hartline, 2012).
 Marketing tactics- Marketing mix is the main concept of marketing tactics which
explains the factors that are influencing the demand. In this, 7P's of marketing place,
price, product, people, etc. are considered.
 Monitoring and control- It begins with establishing financial, sales and marketing goals
of Tesco which are totally within their control. These are the main things which Tesco
has to do in order to run efficiently in the market.
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1.2 Benefits and costs of marketing orientation
TESCO is a market oriented company which offers products and services as per the
desires, needs and requirements of customers. In this regard, different types of cost and benefits
are included which are discussed as below:
Tesco mainly focuses on customers. Thus, firm conducts some surveys and market
researches. Through this, organization gathers the information about requirements of customers.
This process takes more time, money and efforts of company but with the help of this process,
they find out the demand of product and requirements of customers (Grönroos, 2006). This
process also eliminates the forecasting and guessing of product trends and demands. All the
firm's strategies and product developments revolve around customer desires. Investment in
marketing research and analysis process is high because firm needs powerful and effective
market intelligence to respond and give feedback accurately. According to the review of
customers satisfaction, firm has to improve their service and quality levels. Firm is benefited
from building customer satisfaction and relationship. Increasing value for firm’s customer base
also increases the cost of production (Gunsel, 2012). For example, according to the customer’s
demand, firm chooses to offer product warranties which will cost them by hiring of maintenance
staff.
2.1 Analysing macro and micro environment using appropriate tools and techniques.
The external marketing environment of Tesco is broadly classified into micro and macro
environment. These factors impact the marketing strategy of the retail firm. In order to discuss
these following points can be considered:
Micro Environment
These include those factors that can be controlled by the management of Tesco such as:
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Illustration 1: Micro environment of an organization
(Source: Hamilton and Webster, 2015)
 Customers: Customers largely impact the marketing strategies of Tesco as they generate
profit for the firm (Hamilton and Webster, 2015). The retailer needs to find the potential
customers to increase its sales. Competitors: Rival retailers influence the marketing strategies of Tesco. The company
needs to focus on tactics to make its offerings different from the rival firms in order to
gain competitive advantage (Henley, Raffin and Caemmerer, 2011). Suppliers: They provide required raw materials to the company and thus play significant
role in firm's strategic decisions. Tesco identifies key suppliers and maintain long term
relation with them to receive quality raw material at low prices. Public: These include group of individuals who affect Tesco's ability to achieve its
business goals such as consumer protection groups, environmentalists, media houses, etc. Marketing Intermediaries: Intermediaries are group of individuals who assist the retail
firm in carrying out marketing activities such as promotion, distribution and sales of
products to consumers (Kim and Hyun, 2011). These include retailers, wholesalers,
distributors, marketing agencies and financial institutions.
Macro Environment
Macro factors of Tesco can be scanned with the help of PESTLE Analysis. The factors of
the analysis are as follows:
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Illustration 2: Macro factors of business environment
(Source: Bah and Fang, 2015) Political: These factors are referred to government regulations that the company has to
follow to operate its business. Tax policies and government trade agreements are
examples of political determinants that impact the decision making of Tesco (Bah and
Fang, 2015). Economic: These factors include economic scenario prevailing in a country such as
employment rate, fiscal and monetary policies, cost of raw materials, etc. The firm have
to consider these determinants to craft an effective marketing plan. Socio-cultural: These determinants represent the culture of the market in which the retail
company operates. These entails lifestyle of customers, population distribution in a given
demographic area, education levels, social beliefs, wealth distribution,etc. Tesco has to
analyse these elements of the market to make appropriate marketing plan. Technological: These are referred to technological inventions in the field of mobile,
internet and information management systems (Krafft and et.al., 2007). Innovation in
internet technology has encouraged Tesco to develop online shopping portals to reach out
to maximum consumers. Legal: These include laws related to consumer protection, employment laws, national and
international trade regulations and merger policies. These laws impose legal implications
to Tesco.
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 Environmental: Environmental rules such as waste management and recycling
procedures that the company has to abide by in order to minimise pressure on natural
resources (Leonidou, Katsikeas and Morgan, 2013).
2.2 Segmentation criteria for products in different markets
Segmentation is a marketing activity of an organization that enable the marketer to
segregate the target market into its subsets on the basis of similar needs and demands of
customers (Piercy and Morgan, 2015). The segmentation of Tescos's new health cereals can be
done in the following ways: Demographic Segmentation: It is the market segmentation based on factors such as
gender, age, culture, income, education, race, religion. Tesco needs to target kids and
working ladies of age group 4-10 years and 30- 45 years respectively to launch its new
product. The demographic segmentation enables the firm in using the available
information to formulate the marketing plan for the new product launch (Hamilton and
Webster, 2015).
 Psycho graphic Segmentation: The segmentation involves division of target market based
on personal characteristics such as beliefs, attitudes, values and lifestyle of end users. The
segmentation encourages the retail firm to use a focussed approach in product
development. Healthy cereal is developed keeping in mind the nutritional needs of kids
and working women. These segments are looking for a cereal that meet their daily
nutritional requirements without raising their concerns for body weight (Venter Wright
and Dibb, 2015).
2.3 Choosing a target strategy for selected product
Targeting can be elaborated as a process of selling the products to selected potential
customers with a view to earn profits in return. The targeting strategies of Tesco for its new
product are discussed in the following points:
 Differentiated Targeting: It involves designing promotional messages for potential target
segments and different marketing mixes are used for these segments. Tesco will use multi
target strategy for two segments that are kids and working women and design distinct
marketing strategies to address the benefits of the new product in the chosen segments.
 Concentrated Targeting: It is referred to targeting a single segment and implementing
marketing strategy to serve the segment with greater profitability. Tesco can formulated
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two distinct marketing plans to target kids and women for positioning its healthy cereal
(Cui and Choudhury, 2015).
2.4 Impact of buyer behaviour on different marketing activities in different buying situations
Customer’s behaviour significantly impacts the marketing activities of the company in
varied situations. These are discussed briefly in the below points: Pricing: Pricing strategies greatly affect the buying decision of the customers. When the
buyer does not see value for his money from the desired product then he may not
purchase the product. Price sensitive customers make purchases when discounts are
offered. Besides this, they tend to switch brands for low prices (Vogt, 2015). Promotional activities: Advertising and sales activities greatly impact the buying decision
of the customers. For instance: when buyers see their favourite celebrity endorsing a
brand they immediately make connection with the brand and make purchases.
 Quality of customer services: The quality of customer services significantly affects the
satisfaction level of the customers. For example: If a customer is not happy with the
services of a company then he may switch to another brand (Kitchen, 2013).
2.5 Positioning options for selected product/service
Positioning is a marketing tactic of a company to of make a distinct position of brand in
the minds of the consumers as compared to rivals (Chen and Wang, 2015). Tesco in order to
create a unique brand image for its new product need to implement a sound positioning strategy.
The key points include:
Product Positioning Strategy
Tesco need to position its Healthy Cereal in the target segment market research should be
conducted to evaluate the needs of buyers (Chabowski, Mena and Gonzalez-Padron, 2011). On
the basis of this evaluation marketing plan need to be designed. It is very important for the
company to add a differentiating factor while designing the business plan for Healthy Cereal to
gain a competitive edge over rival firms. Effective product promotion tools can help in building
positive brand image in the minds of target customers. These tools include advertising and sales,
public relations, interactive marketing, social media marketing and promotion through social
events. These tools will enable the company to reach out to maximum target customers (Hassan,
2015).
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3.1 Development of product to sustain competitive advantage
There any many rivals which are available in health cereals. In order to compete
effectively it is mainly targeted to children and women. For children cereals provided to them
will be focused on providing them nutrition supplement. Different types of flavoured cereals can
be developed like chocolate, vanilla and strawberry (Meenaghan, 2001). Providing cereals in
different will be help in attracting children who prefer any of the preferred flavours. These
cereals will be helpful in providing the target audience with iron, thiamine and riboflavin. All the
flavours will taste differently but will provide all the required nutrients which a child needs. On
the other hand, women will be very much benefited with the cereal provided to them. They will
be provided with only one type of flavour which contains low fat. Moreover, it will be helpful in
preventing cancer, will fill them with energy, colon disorders, vitamins, calcium and will also
help in increasing the level of haemoglobin. This cereal will be focused on all types of age
groups in women. Thus, by covering all these points the product will be able to attract its
customer and will be able to sustain competitive advantage (Ulaga and Chacour, 2001).
3.2 Distribution Strategy
It is very important for the firm to make the product easily available to the customers as it
will be helpful in increasing sales. Customers will prefer the product which will be available
when they require. In today's world, online business is growing rapidly. Tesco should provide its
products online so that customers can be attracted easily available as the purchase through online
have rapidly increased (Smith and Taylor, 2004). In addition to this, Tesco should make
available its products on all its branches. Moreover, the organization can also select other retail
stores for selling the products. This will be helpful for Tesco in attracting customers. By making
the product available to the customer easily will make the customers feel that the product is very
helpful and will satisfy all their required needs and wants.
3.3 Pricing strategy
In a marketing mix, it is the most critical part as pricing is a factor which determines that
targeted audience will prefer it or not. Pricing creates a perception regarding the quality of the
product among the customers. With accordance with the target audience select, for the category
of children up to 12 years the price of the product will be £2.30. Kellogg's provides its product
for £2.69. Selling the product in lower price will be helpful in attracting customer (Kwak, 2010).
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As the product is new to the customers, so the trust on it may not that much as compared to other
cereal products. Slowly when product develops trust among the customers, then the rate can be
increased depending upon the demand of the product. On the other hand, cereal for women will
be sold for £2.60 as it include additional ingredients which are beneficial for them. Similarly, as
the cereals for children these women's cereal will be increased according to the demand. Mostly
women are very concious regarding their health. Once the trust on the product will increase, then
more and customers will buy this product.
3.4 Promotional activity
The product will be promoted with the help advertisement on Television, magazines,
radio, various social sites. In addition to this, the product will be endorsed by celebrity which
will be helpful in attracting customers. Other strategies like cereals for children will be provided
with toys free with cereals (Kärnä, Hansen and Juslin, 2003). Any famous cartoon character's toy
will be given free which will create anxiety among the children to buy the product. One more
strategy which will be adopted in attracting customers is by providing the products in pouches
which so that customers can taste all the provided flavours and choose the best one which they
prefer. Similarly, cereals for women will also be given in pouches as it will be helpful in
developing trust on the product quickly. Videos can be made and uploaded on social sites which
will be helpful in attracting new customer. In addition to this, it will be helpful in knowing the
customer perception regarding the product. Emails can be sent which provide the customer all
the required information regarding the cereals (Cooper, 2000). Moreover, feedback can be
collected which will help in making required changes according to customers preference.
3.5 Additional elements of marketing mix
Additional marketing mix elements include people, place and physical evidence. In order
to discuss these elements for Tesco following points can be referred: People: People is referred to Tesco's employees who execute company's business
operations. Employees of the company play very important role in carrying out marketing
activities related to launch of Health cereals for kids and women. It is very crucial to
recruit skilled and trained staff to effectively deal with target customers. Tesco can hire
customer service executives to communicate with consumers and service them
effectively.
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 Process: It is one of the important element that encompasses Tesco's ability to service
customers in efficient manner. It include all the processes that deals with complaint
handling to resolve several issues of consumers related to products or services of Tesco
(Ferrell and Hartline, 2012). Tesco can develop sound processes to service kids and
women in order to increase its sales of Health Cereals in the market.
 Physical evidence: In order to present Health cereals to kids and women it is very
important to have attractive and convenient retail layouts. The layout of Tesco store need
to be welcoming and impressive to enhance shopping experience of target consumers.
TASK 2
4.1 Marketing Mix for two different segments
Marketing mix for Health cereals for children:
PRODUCTS Different types of flavoured cereals can be developed like chocolate, vanilla
and strawberry. Cereals will be helpful in providing the target audience with
iron, thiamine and riboflavin.
PRICE Competitive price: £2.30.
PLACE Online stores, different branches of Tesco and other physical outlets.
PROMOTION Television, magazines, radio, various social sites
Marketing mix for Health cereals for Women:
PRODUCT Only one type of flavour which contains low fat, will be helpful in preventing
cancer, will fill them with energy, colon disorders, vitamins, calcium and will
also help in increasing the level of haemoglobin.
PRICE Competitive price: £2.60.
PLACE Online stores, different branches of Tesco and other physical outlets.
PROMOTION Television, magazines, radio, various social sites and premium pouches will be
made so that customers trust can be developed.
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4.2 Differences in marketing products and services to businesses rather than consumers
Following are the differences in marketing of products and services in both business to business
and business to customer transactions:
Business to business Business to customer
Meaning The services and products of Tesco
are marketed to other businesses.
Tesco's services and goods are provided
directly to the customers.
Cost Tesco's cost of sale is higher and
expensive.
In comparison to B2B, cost of sale is
lower.
Focus In this marketing technique, they
focus on the features of product.
They basically focus on the benefits of
product.
Product Whole-selling Retailing
Place Business approaches through
websites, headquarters or authorized
agents.
Physical stores are available and also
through online shopping.
Promotion Through sales promotion and trade
discounts.
Through online promotion, sale
discounts or advertisements Promotion
through advertisements,
Consignment In this, consignment size is large. Small in size
Approach This follows systematic approach
which means that they give
presentations and after that,
quotations are made.
In this, firm directly approaches to the
customers.
Price Prices may vary customer to
customer.
Consumers pay the same price as other
customers.
Use They buy products and services to
use in companies.
Customers buy products and services for
their personal uses.
Decision Decision making process is more
complex.
Decision making process is easy-going.
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4.3 Difference between domestic marketing and international marketing
Following are the difference between domestic and international marketing
Basis Domestic market International market
Meaning It concerns with those activities in
which transfer of goods and services
are traded within the home country.
This refers to those activities which
includes transfer of services and goods
from one country to another.
Scope Scope is limited. It has endless scope and opportunities.
Barriers In this market there no barriers. There are many barriers like difference
in culture, language, currency and
traditions.
Role of politics In this political factors are less
important.
In this market political factors plays
vital role.
Risk Marketing is less risky in this. It is more complex and risky.
Financial
resources
They require lesser financial
resources.
They require large financial resources.
Payment In this mode of payment is normally
letter of credit.
Cash payment and plastic cards are the
mode of payment.
Transport cost They are low as compare to
international market expenses.
They are the major expenses.
Government
interference
The regulation and laws are not
much applicable in domestic market.
In this exchange takes place under
government regulations.
Market It deals with a single market. It deals with several markets of
different countries.
CONCLUSION
From this report, it can be articulated that marketing plays an important role in increasing
the growth of the organization. Process of marketing-mix is very helpful in targeting, positioning
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and targeting customer. In addition to this, promotional activities are very essential so that
customer get to know about the product and in attracting customers.
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REFERENCES
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