Marketing Principles: Comprehensive Report for Iceland Supermarket

This report delves into the core principles of marketing, examining various elements of the marketing process, including market analysis, target market determination, and the development of marketing objectives. It evaluates the benefits and costs of a marketing orientation for Iceland Supermarket, a UK-based retail firm specializing in frozen foods. The report analyzes how macro and micro environmental factors influence marketing decisions, proposing segmentation criteria and targeting strategies for different markets. It also explores how buyer behavior affects marketing activities in different buying situations, and suggests new positioning for selected products or services. Furthermore, the report discusses product sustainability, distribution arrangements, pricing strategies, promotional activities, and the extended marketing mix. Finally, it formulates a marketing mix for two different segments, and differentiates between marketing products and services to businesses versus consumers, as well as international versus domestic marketing strategies. The report provides a comprehensive analysis of marketing principles and their practical application within the context of Iceland Supermarket.

Marketing Principles

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Various elements of the marketing process..........................................................................3
1.2 Evaluation of the benefits and costs of a marketing orientation for Iceland Supermarket . .4
TASK 2 ...........................................................................................................................................5
2.1 How macro and micro environmental factors that influence marketing decisions...............5
2.2 Propose segmentation criteria to be used for products in different markets.........................6
2.3 Selection of targeting strategy for a selected product or service .........................................7
2.4 Buyer behaviour affects marketing activities in different buying situations........................7
2.5 Propose new positioning for a selected product of services.................................................8
TASK 3............................................................................................................................................9
3.1 Product sustainability in the competitive advantage.............................................................9
3.2 Distribution arrangement to provide customer convenience:-............................................10
3.3 How prices reflect an organisation's objectives and market conditions..............................11
3.4 Integration of promotional activities to achieve marketing objectives...............................11
3.5 Additional elements of extended marketing mix................................................................12
TASK 4..........................................................................................................................................13
4.1 Plan marketing mix for two different segments .................................................................13
4.2 Differences in marketing products and services to businesses rather than consumers.......14
4.3 Difference between international and domestic marketing ................................................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
In the present era, different sheds of marketing is adopting by the organizations with the
aim of promoting goods and services within the market. The intention of behind using this
concept is to deliver the right information to the target customers so that they can able to know
more about the commodities (Barrett and Weinstein, 2015). Most of the businesses use a variety
of marketing principles in order to optimize the market performance of existing products and
services. It also assists in successful launch of new goods into a new and existing market. The
present study is relating to marketing principles and to understand its importance within the
companies, Iceland Supermarket is taking into the consideration. It is UK firm that deal in retail
market and specialized in frozen foods such as prepared meals and vegetables, non frozen
grocery items like dry goods, milk, dairy products, meat etc. Objectives that will undertake
during the study are concept and process of marketing, use of concepts of segmentation,
targeting and positioning, elements of the extended marketing mix and their application in
different contexts.
TASK 1
1.1 Various elements of the marketing process
According to the Chartered Institute of Marketing defines marketing as a a management
process that responsible for determine, anticipate and satisfy customers requirements profitably
(Hartley and Claycomb, 2013). Marketing definition state by American Marketing Association is
it is a set of activities and processes for creating, communicating, delivering and exchange
offering that create value for end uses in different aspects. For Iceland Supermarket, elements of
marketing process is as follows:
Analysis of market and environment: Here, different strategic tools use for market and
environment analysis such as PESTEL, Porter's Five Forces, SWOT, Value Chain Analysis etc
(Lehmann, 2014).
Determining the target market: Under this, Iceland Supermarket targets specific segment
of population in the UK and other overseas nations where organization is currently operating its
business.
Development of marketing objectives: Marketing objectives of Iceland Supermarket is
maximization of profit in both short and long term (Iceland Supermarkets UK, 2016). It also
wants to raise its brand value in the marketplace. Marketing objectives of Iceland Supermarket

closely link with its current business strategy. Along with this, the formulated objectives also
align with mission and vision of the firm in more appropriate manner.
Dealing with marketing mix elements: At the time of marketing of products and
services, it is important for Iceland Supermarket to consider marketing mix elements (Kerrigan,
Fraser and Ozbilgin, 2007). With the help of this, it can be easy to analyse the demand and
needs of target customers.
Reflection, control and revision: With the help of this element in marketing
management, Iceland Supermarket access the level of effectiveness of marketing strategy (Kur
and Hvenegaard, 2012). Along with this, it helps the organization to improve those areas of
existing marketing tactics which are directly or indirectly affect by internal or external
environment.
1.2 Evaluation of the benefits and costs of a marketing orientation for Iceland Supermarket
Marketing orientation is a business model and support the concept of development of
products and services according to consumers requirement. It can be divided into four types:
production, product, sales and marketing orientation (Larreche, 2005). When company produce a
product in large volume without giving importance of needs and wants of service users then it is
called production marketing orientation. When organization focus on improve quality of goods
rather then their volume then it comes under product marketing orientation. If firm emphasize on
increase profits for effective distribution and sales of the commodities then it is known as sales
marketing orientation. Further, when enterprise produce the goods and services as per the
requirement and expectations by ignoring profit maximization concept then it is called marketing
orientation.
Benefits of marketing orientation
There are various benefits of marketing orientation for Iceland Supermarket which are as
follows:
Increase customer satisfaction level: With the help of marketing orientation concept,
Iceland Supermarket easily meet and increase satisfaction level of end users. The reason of this is
the products and services customized in nature (Rudd and Mills, 2011.). At the time of
development of commodities, requirements and needs of end users take into the consideration all
the time.

Meet quality standards: Marketing orientation assist Iceland Supermarket to produce
goods and services as per the quality standards (Hollensen, 2015). The result of this, a quality
product deliver to the end users and added value of their money.
Consumer retention: Marketing orientation provide facility to Iceland Supermarket to
produce products and services according to their needs and wants. This thing beneficial for the
organization in terms of increase retention of users for long time (Nijssen and Frambach, 2013).
The reason of this is when consumers receive the goods as per their expectations then they starts
repeat purchase.
Downsides of marketing orientation
The major downside of marketing orientation for Iceland Supermarket is cost of a too
narrow marketing focus. The reason of this problem is missed sales and failure to attract new
customers. Because of this, it is hard for the organization to change the perception of end users
regarding retail store purchasing (Pulendran and et.al., 2015). The result of this is it is difficult to
predict demand and costing of products for target market.
TASK 2
2.1 How macro and micro environmental factors that influence marketing decisions
There are two factors that influence marketing decisions of Iceland Supermarket: micro
and macro. Impact of these elements on affecting marketing decisions of organization is as
follows:
Macro environment:
Political and legal factors: It influences marketing decisions of Iceland Supermarket in
terms of deliver right information to the customers via different media such as advertisement,
social media, newspapers etc (Lee and et.al., 2013). As per the act, company should deliver
appropriate information about the goods to the consumers. So, it highly affects marketing
decisions of the firm.
Economic factors: in this factor the unemployment ration in the UK, exchange rate of
currency are covered. At present time, in the UK companies used decision making strategies and
with the help of this they reduce the negative impact of other strategy (Ratten, 2016).
Social factors: The changes in the expectation of customers and their buying behaviour
comes in to the point. Due to this, the market influence and the marketing decision of
organisation fluctuated. It is important for organisation to understand the actual reason behind

the changing behaviour of customers and for this company can take a feedback from them
(Toledo and et.al., 2014). According to their suggestion change their strategies.
Environmental factor: The changes into the environment like;climate, disasters and food
etc. affect the operation activities of company. So company time to time modified their decision
as per the need and requirement of organisation. For save the environment, organisation use
battery vehicle at the time of transportation.
Micro environment:
Customers: Customer are the back bone of organisation. All business activities are based
on the demand of them. It is company duty to anlyze the changing behaviour of customers and
also fulfil their demand on time (Armelini and Villanueva, 2011). Company time to time take a
feedback from the customers and according to their demand change the ingredients of their
products.
Supplier: Iceland supermarket purchase their raw material from different suppliers. Due
to this, if any vendor change their decision so it put major effect in the organisation and also
affect their business activities.
2.2 Propose segmentation criteria to be used for products in different markets
Segmentation is a marketing strategy that include dividing a huge target market into
subsets in terms of consumers, businesses or countries. It based on common needs, interest and
priorities and on the basis of this, the strategies to attract the target market develops. Iceland
Supermarket offers diversified products and services to the customers to different segments
(Armstrong and et.al., 2014). The important characteristic of firm is it sells the goods at the low
cost by maintaining quality of it. It runs business in different nations at huge level and its
customer base is also too high. In this regards, it use two segmentation criteria to promote and
marketing of the products: demographic and geographic segmentation. In demographic
segmentation, division of target market is based on different variables such as sex, age, religion,
generation, education level, occupation etc according to perceived benefits. On the other hand, in
geographic, segmentation based on different criteria such as nations, neighbourhoods, cities,
regions, postal codes etc (Barrett and Weinstein, 2015). With the application of geo-cluster
approach, it becomes easy to integrate both geographic and demographic data to get better
outcomes and make effective marketing strategies. Therefore, from the discussion. It has found

that there are geographic and demographic segmentation criteria that used by Iceland
Supermarket to promote products in different markets.
2.3 Selection of targeting strategy for a selected product or service
Targeting strategy can be defines as a selection of potential customer to whom an
organization wants to sell services and products (Bose, 2010). It includes segmentation of the
market, selection of which segment is appropriate for the business and identify the commodity
that will be offer to determine target segment. It is company responsibility to explore that
offering goods support mass marketing or multi segment. There are two types of targeting
strategy: undifferentiated, concentrated and differentiated. In undifferentiated target tactic, same
promotional message deliver to all type of customers. When designing of a promotional message
is that kind which communicate benefits to a particular segment then it is called concentrated
target strategy (Hartmann, Nair and Narayanan, 2011). But a firm design more than one
promotional message to communicate different benefits to a specific segment then it is known as
differentiated targeting strategy.
The product which is selecting for marketing of Iceland Supermarket is carpet cleaner.
Basically, this good design for women to make their cleaning more easy and faster. Organization
can serve this product to middle and elite class customers. For this, firm first of all conduct a
market research to determine their needs, lifestyle, perception etc of the end users. After this, on
the basis of collected information, marketing strategy can be develop. For launching of carpet
cleaner product, company can use differentiated targeting strategy for demographic segmentation
where income can be taken as the criteria (Henley, Raffin and Caemmerer, 2011). With the help
of proposed targeting strategy, it can be easy to target more than one segment on a single time. It
assist in increase the volume of sales, raise profit level, improve market share, good product
design, achieve economic of scale etc. Under differentiated target strategy, more than one
promotional message develops for demographic segmentation. The reason of adopting
differentiate targeting strategy is Iceland Supermarket can charge premium prices for carpet
cleaner (Huang and Sarigöllü, 2012). Organization can do this thing with confidence because it
has strong brand identity in the market place.
2.4 Buyer behaviour affects marketing activities in different buying situations
Buying behaviour is a decision process that shows how people involve in purchasing of
products. It attempts to learn about the decision making process of the customers in more

effective manner (Jobber and Ellis-Chadwick, 2012). Demographic and behavioural are the
major factors that affect buyer behaviour either in positive or negative manner. With the help of
understanding of consumer behaviour, it can be easy for the organization to influence them.
Buying behaviour of the end user change according to situation and their perception regarding
the services of the company. From the perspective of marketing, buying behaviour of customers
can be categorized into two parts: straight rebuy and modified rebuy.
In the context of Iceland Supermarket, buying behaviour of its consumers affects its
business operations and mainly its marketing activities (Butler, 2014). In straight buy behaviour,
organization so not need to make modifications in marketing activities because there are some
positive views in the customers mind regarding its products. In this situation, company should
not pay too much attention on creating awareness in the service users mind. But in the case of
modified rebuy, the frequency and quantity of purchasing of goods of the customers change very
quick (Charles, 2007). For this, it is required for Iceland Supermarket to make changes in
marketing activities so that they can alter their mind set and take right decision during buying of
commodities. Along with this, it necessary for the firm to pat attention on understanding the
preferences of end users and offer products according to it. So, from the above discussion, it has
clear that buying behaviour of consumers have changed according to the different buying
situation and it has directly affected marketing activities of Iceland Supermarket in positive and
negative direction (Chatzipanagiotou, 2010).
2.5 Propose new positioning for a selected product of services
Iceland supermarket want to launch their new product and services into the market so it is
important to management to understand the actual need and demand of customers. Then select it
is target market and strategy as well (Ivy, 2008). For positing strategy for new carpet company
define its characteristic and necessity to all customers and also explain why their new product is
different from another one. Apart from this, company adopt the demography criteria and as per
this segment company select the process of their new product and also decide that from which
level of income people afford this. By using product-user approach Iceland supermarket analyse
the actual need and demand of customers. According to the need of customers company select
the price of customers. For example, if in the competitive market the demand of carpet is high so
company select high process for the new products and if demand is low and there are so many
competitors so company select the process of product is low (Jevons, 2000). Under the position

strategy, company use digital marketing and promote all the characteristics of their product. By
doing this, they can easily grab the abreaction of customers and by providing loyalty voucher,
discount coupons increase the sell of product. On other hand, by using products differentiation
method company can easily sell out their new carper cleaner. For this, firm change the style of
their items (Grinstein, 2008). By doing this, customers can easily carry it at the time of
travelling. By doing this little change, firm attract the concentration of their customers and make
them different from other companies. For promotion activities, company choose door to door
advertisement, where company employees visit every house and explain the benefit of their new
product by showing live example, by doing this they create a positive relationship with
customers and convenience them to purchase the new products of company. Further, company
also change their distribution channel. For this, they adopt three level of distribution where
customers give their order to retailer and this person purchase all the required item form
organisation (Charles, 2007). By doing this activity, organisation can easily provide their all
items to customers on time.
TASK 3
3.1 Product sustainability in the competitive advantage
Competitive advantage is an advantage that a organization has over its competitors by
way of more customers retaining and more sales margin in the market. Sustainable development
means different things to different people (Hollensen, 2015). But in main sense of sustainable
development means to meeting or satisfying the customer needs without compromising the
ability of future generation and in long term duration.Sustainable development involves:-
 Broad views of social, environmental, and economic outcomes.
 Meeting the demands and customers needs.
In the case of Iceland Supermarket sustainable competitive advantage:-
Iceland supermarket was founded in 1970 as a single shop and it is now a high- street
supermarket chain with over 700 stores around the world. In present era Iceland supermarket has
a strong sustainability in the competitive advantage. Iceland researched on its marketing strategy
and find out what customers are demanding and how (Butler, 2014). Their management efforts
towards in competitive markets to stability of their organization in the field of foods and seafood.
The management of Iceland supermarket developed their market strategy to cover the markets in
their seafood. Former Iceland known for its frozen food range, but has been expanding its store

and providing a range groceries including fresh fruits, vegetables, chilled product, and home
appliances. The management of Iceland applied food safety norms at international level and
focused in health norms. If any organization which applies the rule of SWOT analysis to develop
in competitive than it can survive for a long time in the market to serve more customer demands
and their needs.
3.2 Distribution arrangement to provide customer convenience:-
The main function of a distribution channel is to provide a link between production and
consumption. There are some way in which businesses arrange distribution to provide customer
convenience (Ratten, 2016). Methods applies by the organization are may be according to their
business nature. Organization make sure that its distribution channel should be strong so that
their product easily be available to customer and markets where the demanded most. After
choosing channels it is necessary to motivate channel members on regular basis and evaluate
their performance timely. Distribution is arranged to provide customer convenience that product
should easily be available to customer and they can easily purchase it from retailer or whole
seller (Lehmann, 2014). Ways by which organization meet customer convenience are
Promotions, Easy availability, Usage or Benefits, variety of products and freedom to choose
product.
But there are main distribution channels which may be as:
 Direct Marketing- Producer of any product directly contact to customer in the market and
meet their wants and needs.
 Internet Marketing- Through internet marketing also producer directly reach to the
customer and into the market. By promoting its product on internet organization can
easily make product availed to customers.
 Whole seller- By establishing the wholesale stores in the markets to make product availed
easily to customers and satisfying the demands.
 Retailers- Through retail stores company can easily reach to customer with their product
and it is the easiest way to distribute the product.
These two main channel which make convenience to customer to buy product easily. In
the case of Iceland supermarket which has opened its retail chain or stores or outlets over the
worlds to make their customers facility to choose product on easy conveyance and fresh product
also can be served in wide variety range under one roof.

Advantages of distribution channels:-
 Cost saving.
 Time saving.
 Customer convenience.
 Customers can buy in small quantities.
3.3 How prices reflect an organisation's objectives and market conditions
Price can reflect the objectives and market conditions of a company. Iceland supermarket
has ensured that raw materials are bought from approved suppliers. They have made an attempt
to sell the goods at the same price at the competitors but with excellent quality. It is for the same
reason that all the suppliers of the company are approved from British Retail Consortium (BRC).
They have reflected the same thing in their marketing and promotional campaigns (Pulendran
and et.al., 2015). It is essential for a business to link their pricing strategy to the objectives. It has
helped Iceland supermarket to achieve their target sales. The management of the company has
adopted a simple pricing strategy which helps them to improve their brand image. They have
ensured that the prices of the products remains same. This reflects that the company has not
compromised with the quality in order to increase the sales and profit margin. The marketing
strategy of the company is based on creation of premium image for the company in frozen food
category. They want to send a message in the market that their products are of excellent quality.
Many of the advertisements of Iceland supermarket shows the 'Power of Frozen' concept
(Iceland Supermarkets UK, 2016). They have highlighted the benefits of frozen food and how it
preserves the natural flavours. This change of strategy has been beneficial for them as it has
helped them to increase their sales. They have an independent team in the company which helps
them to maintain the quality of the products at much lower prices. They have supported health
campaigns and even the labels on the products display full and honest list of ingredients. Prices
and marketing strategies are closely related to the objective of the company. If a company is
trying to increase their customer base then it will reduce the prices of the products. They will
offer more discounts to the customers and it will reflect in their marketing strategies as well.
3.4 Integration of promotional activities to achieve marketing objectives
Marketing include development of products and services according to the requirements
and preferences of the customers. On the other hand, promotional activities includes all the
activities which can be used to attract the customers towards the products. There has to be proper

integration between marketing objectives and promotional activities of a business (Hollensen,
2015). It will help the company to build long term relations with the customers.
The management of Iceland supermarket has done an excellent job in this respect. They
have designed their promotional activities which has helped them to achieve their marketing
objectives. The sales promotion activities of the company has been integrated with the pricing
strategy. They have used many methods to achieve their marketing objectives. They have been
consistent, coordinated and within the reach of the customers. The concept of 'Power of Frozen '
has been successful for the company and it has increased their sales (Iceland International,
2016). They have used multiple media channels to spread the message and it has allowed them to
reach a wider audience. The management of the company has been making huge efforts to create
a premium image of the company in frozen food products. They have also introduced Food
Warehouse which provides extended category of food products and allows the customers to buy
in bulks. it has been helpful for the company in achieving their marketing objectives. This
change in strategy has increased their sales by 3.4 percent in the last 12 weeks. Iceland
supermarket has been trying hard to increase their market share as well which has slightly
improved. They are still getting tough competition from Aldi and Lidl. But they have managed to
maintain the image of responsible retailer which has given them positive results (Butler, 2014).
Iceland supermarket is the first company to eliminate artificial colours and flavour products
from the market. The marketing objective of the company is clear and consistent. They want to
provide best quality products to their customers and the promotional campaigns also reflect that.
3.5 Additional elements of extended marketing mix
The traditional marketing mix consists of 4 P's namely, product, place, price and
promotion. It has been replaced by 7 P's which has three new elements of marketing mix. it has
been developed because services were excluded in the traditional mix (7ps additional aspects
marketing mix, 2016). The extended marketing mix consists of physical goods as well as
intangible services. Both of these are related to each other and should be considered while
formulating the marketing strategy. The 7 P's of marketing are given as follows:
Product: The products of Iceland supermarket are of excellent quality and they have
taken into consideration the needs and preferences of the customers.