Category: Marketing

About the company

Brookside Dairy Limited is based in New Zealand. The company intends to enter the China and Middle Eastern markets with its milk powder product. This paper presents the companys financial statement and a marketing plan to penetrate the markets in China and the Middle East.

Financial statement

Opening entries to set up the accounts

• Brookside Dairy Limited
• Balance sheet statement

As at 1^st February 2015

The balance sheet is prepared based on the assumption that the business will commence the milk powder export on 1^st February 2015. To start up the export business, the owners will require a total capital amounting to $3,754,500. The owners will raise $1,637,500 and the remaining will be obtained by using long term debt facilities amounting to $2,030,500.

Brookside Dairy Limited

Trial balance

As at 1^st February 2015.

Marketing plan

Introduction

Basically, this marketing plan targets the China and the Middle Eastern bloc markets. In order to release the final milk powder product to the targeted markets, the process will commence with buying milk in New Zealand and then shipping it to a processing factory in China. The processing factory will then release the final product into the market. The penetration is discussed in the marketing plan below.

Doing business in China and the Middle East

Marketing challenges

Political requirements conformity

The essential political requirements of Brookside Limited towards the entry planning and development phases are those that impact directly on the stability of the Chinese and Middle Eastern cultures. The overall development levels exhibited by the Middle Eastern market are relatively stable and high though still fragile, thus, discouraging prospective investors. The rate at which the economies in the Middle East and China are growing is incredibly rapid and this has led to the diversification of the economy.

Demographic segmentation

The penetration strategy should be that which causes minimum disturbances to the company in terms of financial resources and the dairy organizational activities. The demographic factors are deeply entrenched in the religious perceptions in China and the Middle East. These two markets are characterized by Buddhist and Islamic religions respectively. Thus, the company must present its milk powder product within these religious demographic characteristics to ensure that the potential customers are in a position to identify with the product.

Legal aspects

The provisions of patent and trademark rights in these markets have helped to eliminate the chances of fraudulent attempts on a companys product. The trademark rights in China and the Middle Eastern regions will ensure that the company is not disadvantaged. The company could take up this as an assurance of the protection of its product against illegal dealers.

Marketing opportunities

The inflation rates in the target markets are at a minimum and the currency management authorities are confident that the rates are not only minute but also manageable. Thus, it will not have a substantial macro effect on the market demand pillars. The companys revenues are projected to increase if it opts to invest in these markets. Besides, these markets have more than one billion potential customers.

Entry strategy

With a capital base of more than three million dollars, the company possesses veto powers above other milk powder exporters. Reflectively, to capture the distribution channel, the beneficial interests will be distributed across the commodity pool in the two markets. Also, this strategy will facilitate the restructuring of effective sales and public awareness to develop product knowledge among the targeted clients in China and the Middle East. Correspondingly, the Brookside Company may seek to offer different packages and sizes for the milk powder product to ensure that customers, who buy in relatively smaller quantities but in bulk, are integrated into the marketing plan. Besides, the plan should offer a variety of different distributions channels that will be vital in the attraction of new customers in the Middle East and China markets.

The Most Significant Prevailing Market Forces

Currently, the most important market forces that may have a considerable effect on the companys development are technology and globalization. According to Kotler and Keller (2016), these are two of the three major market forces that occupy the most prominent position in the modern world. For HTC to save its profitability and increase its sales, it is crucial to realize that the rapid development of technology and globalization is inevitable. Moreover, the company should pay attention not only to the progress of these dimensions but also to the areas that are most fruitful and promising. Currently, HTC has focused on virtual reality (VR), neglecting the possibilities in the sphere of smartphone development (Robertson, 2019). By doing so, the company has indeed focused on the technology market forces. However, taking into consideration the growing impact of globalization on peoples communication preferences, HTC must reconsider its choice.

Smartphones are becoming more and more popular, whereas VR is not as popular, and products in this sphere are much more expensive. As a result, the company risks losing both customers loyalty and the success it currently has. To avoid disastrous outcomes, it is necessary to invest in the development of efficient smartphones that will be both innovative and inexpensive so that people would continue purchasing HTCs products. In the future, it will be possible to introduce VR products gradually. However, complete neglect of the smartphone niche can lead to adverse outcomes for the organization. The most disastrous effects will be the loss of customers and bankruptcy.

The Key Market Outcomes

With the advent of new market niches, new capabilities emerge both for companies and their clients. As Kotler and Keller (2016) note, new company and customer opportunities are the key market outcomes of the nearest future. For HTC to be able to pursue these goals, it is necessary to identify the features people are most frequently looking for in smartphones. These include the possibility of fast charging, a flexible display, the wireless charging option, multiple-lens camera solutions, biometric authentication, and correspondence with the most common Wi-Fi standards (Goasduff, 2016). At the same time, it is necessary to acknowledge that VR is one of the key capabilities desired by customers (Goasduff, 2016). Therefore, HTC has the opportunity to develop innovative smartphones, which will give the company new capabilities.

The most prominent opportunities for the organization will be increasing its client base and growing profit. At the same time, the company will be able to promote its VR developments since people are demonstrating more and more interest in it. However, it would be wrong to focus solely on the organizations capabilities by focusing on VR solely, whereas neglecting customer capabilities by refusing to create smartphones.

Adopting a Holistic Marketing Approach

Finally, HTC should pay more attention to the adoption of a holistic marketing approach. As defined by Kotler and Keller (2016), the four pillars of holistic marketing are performance, relationship, integrated, and internal marketing. HTC should implement internal marketing messages by declaring its vision and expressing its willingness to serve as a dedicated partner for its existing and potential consumers. Performance marketing is related to advertising and relies on various channels of promoting a product. Integrated and relationship marketing should be developed through a unique experience for clients. According to statistics, U.S. citizens website visits are most frequently performed via smartphones (DBS Interactive, 2017). Thus, the company should not neglect this niche and develop it first of all. Only when HTC has established in the smartphone direction, can it move forward in the VR one.

Reference List

DBS Interactive. (2017) What the future of smartphones means for digital marketers, Web.

Goasduff, L. (2016) Here are the top 10 smartphone technologies and capabilities that create more-compelling experiences for the user, as well as unravel new business models for mobile device vendors, Smarter with Gartner, Web.

Kotler, P. and Keller, K. L. (2016) Marketing management. 15^th edn. Harlow, England: Pearson.

Robertson, A. Its 2019  which VR headsets can you actually buy? And which ones would you want?, The Verge, Web.

The target market for Marks and Spencer is the US retail market. The selection of the country is based on the consumer demand for retail products including clothing, food, and home products. The details provided in the consumer groups section and market overview explain the reasons for selecting this market.

The US Retail Market Overview

The US retail market reported an average growth of 4.5 percent in the last three decades. The statistics showed that its annual total retail sales reached $24 trillion in 2015 as compared to $22 trillion in 2014. The market is highly competitive due to the presence of US-based retailers selling their products in the local and international market. Five of the ten largest retail companies in the world are based in the US, and most of them operate in the domestic markets of the US (Farfan 2017). The trend of online shopping for apparel is also increasing in the US. Further growth is expected in the sales of apparel and accessories by e-commerce businesses, which is highlighted in Figure 1. Therefore, it could be suggested this business channel should be considered by companies in the retail sector to reach a larger market of consumers in different countries.

Gaps for Different Consumer Categories

There are three main consumer categories for Marks and Spencer in the US retail market including kids, men, and women. The primary focus of Marks and Spencer is on these three categories depending on the increasing trend of money spent on apparel and accessories. Therefore, the company will primarily target these three categories to achieve its marketing objective of higher sales of its products in the US market.

Kids

Kids are the primary target of Marks and Spencers apparel segment in the US. The apparel is available for boys and girls of age between 3 months and 16 years. A gap is identified in this age group as there is a consumer shift towards discounted stores for shopping. Ewen (2016) highlights the statement of Andy Mantis that Amazon recorded high sales growth in the teenage market. The statistics also showed that around half of the revenue growth from online shopping was generated by discounted-price sales offered by the US retail stores. Millennials are attracted towards discounts and packages that are marketed by companies on social media.

Marks and Spencer is also specialized in offering high-quality consumer products for teenagers. The slogan of the company is dont ask the price; its a penny, which can be revised in this market. Although there are many domestic and international brands offering differentiated products in the US, Marks and Spencer can fill the gap by offering high quality products at affordable prices. The US kids are price conscious when it comes to shopping branded products, and they look for discount packages and off-prices to make their buying decisions. Therefore, it is important to look into this gap to achieve the marketing objective of increasing sales in the US market.

Men

The report of IBIS World (2016) indicated that the problem of obesity in the United States is increasing every year. Over 70 percent of men are overweight, and they cannot wear fashionable clothes due to their oversized body. Many retailers in the US market provide fashionable clothing to their domestic and international customers. However, there is a lack of fashionable apparel line for men who do not have a regular-shaped or sized body, which also affected the sales of retailers and departmental stores in 2016. Although there will be a small group extra-large men who prefer to wear luxury brands, it is a gap found in the US apparel industry.

Marks and Spencer offers a variety of apparel to its worldwide customers. The company can take advantage of this gap by targeting oversized men in the US. The accessibility is possible only when it is offered to them through the online store, wholesale club or departmental stores. The new brand should be communicated effectively to this group of customers. It is indicated that the US apparel market is highly competitive due to the availability of US-based and international companies. However, Marks and Spencer can gain a competitive advantage by offering high-quality fashionable clothing for men.

Women

The demand for plus-sizes is increasing in the US apparel market. The US retail chains have not paid special attention to the women in this group. Although there are few products available in this market, the large store brands have not yet realized the importance of the increasing demand for plus-size womens clothing. A gap is found between demand and supply in the women segment as it is claimed by big-size women that they are ignored by retailers (Banjo & Molla 2016).

Marks and Spencer offers different sizes of clothing to local and international customers. The company has the opportunity to fill in the identified gap between demand and supply by offering fashionable products for overweight women at competitive prices. The strategy is required in this market segment to attract women who claim that their demands are not addressed by retailers. A clear market segmentation is also important in this case, and there is a need to spread the awareness of the availability of such products. The product differentiation is also applicable here as Marks and Spencer has to compete with domestic retailers.

Segmentation

The market research for each consumer category indicates that Marks and Spencer should not overlook the gap found in these three segments. The company plans to enter the competitive market of the US. Therefore, a strategic plan will fill all gaps to achieve the goal of competitive advantage (Williamson & Jenkins 2013). The segmentation should include a low-pricing strategy to target kids, and product differentiation should be followed based on irregular sizes for men and women clothing. There is also a need to prepare a different marketing strategy for each gap. However, the company can achieve its marketing objective by incorporating all of them in a single campaign.

Current Marketing Mix

Product

The products of Marks & Spencer are classified into many categories including clothing, food, footwear, and accessories. The category of food includes main courses, starters, and wine, etc. The clothing category includes cashmere, jumpers, jackets, suits, linen, skirt, and jeans, etc. The footwear category includes loafers, sandals, heels, pumps, and boots, etc. The accessories sold by Marks and Spencer include flowers, appliances, and gift items, etc. (Marks and Spencer 2018).

Price

The pricing strategy of Marks and Spencer is to set competitive pricing for its products. The company has its brand of clothing category available for kids, men, and women. However, the pricing is categorized by the company on the basis of the quality of its products. The company faces price competition due to online and large size retailers offering homogeneous products in the same markets. Marks and Spencer also adopted a dynamic pricing strategy for seasonal sales (Marks and Spencer 2018). The current strategy of the company is to lower the price of its old stocks for quick turnover.

Place

The products of Marks and Spencer are available in 50 countries including the UK, Spain, France, Turkey, India, and Hungary, etc. Marks and Spencer has around 1,000 stores in different cities that offer high-quality products (Marks and Spencer 2018). The company adopts a local currency strategy to maintain consistency in its prices of products sold in different countries. The main objective of the company is to make its products accessible through its stores. Moreover, Marks and Spencer also provides the option for international delivery of some products. The companys management understands that the trend of online shopping is currently positive. Therefore, the company has also adopted this approach to increase its sales volume.

Promotion

The marketing and promotion strategy of Marks and Spencer is aligned with digital marketing and in-store strategy. The strategy of the company is to spread a common message through TV ads, print media, and social media campaigns. Marks and Spencer has its official website that contains the details of different product categories and types along with their prices. The marketing tactics of the company are also attributed to its sales strategy as it offers differentiated products at discounted prices in various seasons (Vizard 2015). Although the strategy is to sell old stocks during sales discount periods, the company earned a high revenue from this strategy every year. The special loyalty program, Sparks organized by Marks and Spencer offers reward points to customers, who can utilize them for shopping.

Extending Marketing Mix

Product

There is a need to categorize the companys products into additional segments. It has been indicated that the demand for plus-size is increasing in the US market (IBIS World 2016). Therefore, the company can create a sub-category of apparel to increase its revenue by targeting customers in this target market. Marks and Spencer can achieve the objective of high market share by providing unique products in this competitive market.

The market research shows that millennials attract towards multinational brands that are accessible on social media. Marks and Spencer will adopt a similar strategy to use social sites for targeting kids and their parents. The company will offer packages and discounts to kids and enable them to buy its luxury brand at affordable prices. There is a need to introduce new fashionable products for kids. The addition of new products in the existing product line will attract new customers in the US. Furthermore, the new variety of clothing will be introduced in other emerging markets such as the Middle East, China, and India, etc.

Price

The current pricing strategy of Marks and Spencer is to set competitive prices of its products to gain a competitive advantage. There is no requirement to change the strategy, but the target market especially kids or youngsters should have complete knowledge about the product offerings of the company. Marks and Spencer will use social and electronic media to target its audiences as companies are increasingly using them in the modern competitive environment (Vizard 2015). The company will follow the same pricing strategy by highlighting its off-prices on different platforms. The communication will enable the company to achieve its goal of increasing its sales volume. Particularly, Marks and Spencer will offer discounts and packages on fresh stocks for kids to engage them.

Place

The existing strategy of Marks and Spencer is aligned with its objective to enhance the number of customers. However, there is a requirement to mainly focus on social media and e-commerce platform as the market research indicates that kids use websites for their purchases (Vizard 2015). The company will prepare social media analytics to redefine its marketing strategy and offer discounts and packages on bulk purchases. The company will have an opportunity to improve its international online sales as the trend of online shopping is not limited to the US. Furthermore, there is a need to open new stores in the US.

The market research shows that US customers find it difficult to find high-quality products at affordable prices. There are many global brands including Levis, Gap, and Dockers offering homogeneous products. Therefore, the physical existence of Marks and Spencer is also required in this competitive market to achieve its long-term objectives (Banjo & Molla 2016). However, the expansion plan will be based on the resource availability and feasibility of getting a high return on the investment in the US.

Promotion

There is a need for making changes to the current promotion strategy of Marks and Spencer. The company should redefine its target market and modify its segments according to the market research. The requirement is to incorporate the information regarding the availability of all categories and sizes of products at affordable prices. In fact, the company will follow up its loyalty program by informing that new sizes of existing products are also available to address the clothing issues faced a major proportion of US customers (Ewen 2016). The content will be prepared by marketing officials to deliver an emotional message and give awareness to the public that it has a solution for the problems of overweight people.

References

Banjo, S & Molla, R 2016, Retailers ignore most of Americas women, Bloomberg. Web.

Ewen, L 2016, The new look of fashion: how 2016 made over apparel retail. Web.

Farfan, B 2017, 2016 US retail industry overview. Web.

IBIS World 2016, Plus-Size mens clothing stores in the us: market research report. Web.

Marks and Spencer 2018, Annual Report 2017  Marks and Spencer. Web.

Statista 2018, Apparel, footwear and accessories retail e-commerce revenue in the United States from 2016 to 2022 (in million U.S. dollars). Web.

Vizard, S 2015, M&S invests 20% of media spend in social media as it ups focus on storytelling, Marketing Week. Web.

Williamson, D & Jenkins, W 2013, Strategic management and business analysis, 2nd edn, Routledge, London.

Marketing Communications

The advertising and promotion strategies of Keurig rely on integrating marketing communications between the company and potential customers. The company has long abandoned the traditional channels of advertising and communication, such as radio, TV, and paperback advertisements, instead preferring to connect with its potential audience using the Internet (Kotler, Keller, Sivaramakrishnan, & Cunningham, 2013).

There are several reasons for such an unorthodox decision. While standard television and radio communications reach out to a great number of people, the advertisements using those channels are not targeted. They help build up brand recognition but do very little in terms of increasing sales. Keurig realizes that their product is a situational purchase, unlike household consumables, food, and beverages, which are frequently seen in TV advertisements. Customers search and compare coffee machines using the Internet and are more open to targeted ads. Therefore, the primary forms of communication between the company and its customers are done through social media and e-mail.

The company utilizes Facebook, Instagram, and Twitter to inform the population of its new products, contests, and promotions (Kotler et al., 2013). E-mails are used to gather feedback and to urge customers to introduce their friends to Keurig, acquiring extra market share and growth. Billboards are also used as a method of mass communication, but they are used sparingly and are usually placed at the entrances of large house appliances markets and electronics shops. The primary objectives for Keurigs an advertising and promotion campaigns are as follows (Anderson, 2017):

• Brand recognition and exposure;
• Product recognition;
• Targeted advertising;
• Increase in sales
• Formation of a loyal customer base.

The company enables the communication between individuals using social media platforms and live communication to introduce more people to their quality products.

Existing Marketing Strategy

Keurig currently pursues several marketing strategies to sell its products. They are as follows (Treadway, 2015):

• Internet marketing. The company purchases customer data from large search engines and social media services to utilize targeted ads and promote the product to large volumes of potentially-interested customers.
• Word-of-mouth. As evidenced by the bring a friend campaign pursued by Keurig, the company urges its customers to introduce their friends to Keurig products to spread the word and get additional benefits.
• Relationship marketing. The company organizes fan-groups on Facebook, Twitter, and Instagram to create a sense of community and strengthen its customer base.
• Transactional marketing. This type of marketing involves providing additional benefits to retailers and customers while maintaining a competitive price. Keurig utilizes transactional marketing as one of its primary strategies, as the products provided by the company are typically sold in bundles, which include coffee mugs, coffee packs, and other coffee-related accessories.
• Cause marketing. The company is aware of the effects of its business on the environment. As such, it participates in the Fair Trade Certified program, which ensures that the materials and coffee used in their products are received from environmentally-friendly sources, which seek to reduce their greenhouse emissions and engage in safe waste utilization.

Keurigs marketing strategy helped the company grow from being a small company to a moderately-large and recognized brand with growing sales, showing a modicum of efficiency. However, the weakness of such an approach is its diversity. Keurigs marketing budget has to be split between five different approaches, meaning that there is a lack of focus on any single one of them. The company should limit their efforts to 2-3 strategies rather than waste money and effort on less productive endeavors (Stephens, 2016).

References

Anderson, E. T. (2017). Keurig at home: Managing a new product launch. Kellogg School of Management Cases, 1-19.

Kotler, P., Keller, K. M., Sivaramakrishnan, S., & Cunningham, P. H. (2013). Marketing management (14th ed.). Don Mills, Canada: Pearson.

Stephens, D. L. (2016). Essentials of Consumer Behavior. New York, NY: Routledge.

Treadway, R. B. (2015). Keurig Green Mountain 2015: Dynamic capabilities and sustainable strategic positioning. American Journal of Management, 15(3), 43.

Successful marketing helps to attract customers and stakeholders. It is not enough to use appropriate sources, choose effective advertisements, and produce multiple services and goods. Effective business is based on properly organised strategic marketing. The role of the STP approach  that includes segmentation, targeting and positioning cannot be ignored (West et al., 2015, p. 151). The authors like Armstrong et al. add the concept of differentiation to this strategy, explain it as differentiating the firms market offering to create superior customer value (2015, p. 174). In this paper, the idea of Pyo to combine the concepts of positioning and differentiation in one step as the creation of tangible and intangible differences on one or two key dimensions will be used (2015, p. 258). Differentiation may be a good contribution to any part of the STP process because it helps to understand what is missing in a situation and how to cover the loss (Schlegelmilch, 2016, p. 76). The analysis of the chosen STP concepts will help to clarify how to achieve strategic advantage in modern business, what organisational examples can be used to understand the essence of the STP strategy, and what recommendations can be given to succeed.

Importance of STP

Today, in their intentions to solve the problem of a shortage of customers, marketing experts focus on the promotion of the STP strategy (Khan, 2013, p. 56). STP consists of the three logical steps, segmentation, targeting and positioning, that have to be taken by professional marketers or other people involved in a strategic company (Pires and Stanton, 2014, p. 16). According to Hooley et al., despite the fact that they are distinct parts of the [marketing] strategy, they remain linked by the central issue of focusing on satisfying customers needs in ways that are superior to competitors (2012, p. 183). As soon as a company identifies its goals, evaluates its opportunities, and defines its market, it is time to understand the plan to provide customers with the best services.

The STP process helps to establish the link between the market, a company, and its customers, achieve their marketing goals, measure activities, and create a specific environment (Schultz, 2016, p. 12). The STP process may be time-consuming, expensive, and challenging (Lintern, 2013). Segmentation may be dangerous for companies because there is a chance to miss some important customers who do not meet the chosen criteria but can bring certain benefits (Lintern, 2013). Therefore, it is necessary for a company to analyse each case separately.

Segmentation

Segmentation is a marketing concept that describes the process of dividing a customer market into specific groups, also known as segments, regarding an existing variety of characteristics. Segmentation aims at providing a marketer with an opportunity to introduce an effective marketing mix regarding the needs and interests of potential customers who introduce segments (Pride and Ferrell, 2015, p. 164). A market segment is an important concept of the STP strategy because it introduces an individual or a group of people who possess similar characteristics. Companies should identify the details of segmentation and understand potential consumers (Khan, 2013, p. 57). However, it is wrong to believe that segmentation aims at identifying customers only. In addition to the existing forms of segmentation like demographics, behaviour, psychographics, and culture, it is also important to distinguish between brand and product segmentation (Anesbury et al., 2017, p. 524; Jaman, 2012, p. 63; Northway, 2016). Segmentation of markets is an ability to satisfy the needs of all stakeholders of a marketing process. To succeed in segmentation, it is expected to check the products for heterogeneity, to identify segments, to compare segments, to consider profit potential, and to take the steps which help to reach the chosen segment (Pride and Ferrell, 2015, p. 168). Although these characteristics are not always identified in the STP process, they cannot be neglected because companies may achieve certain benefits.

It is necessary to remember that segmentation can be a B2B concept when such segments as price, risks, and buying cycles have to be identified. To understand the process of segmentation, the works by Khan (2013, p. 57) and Weinstein (2014b, p. 60) who suggest using organisational and consumer segmentation may be used. Organisational segmentation helps companies to recognise their powers and establish the relationships with customers (Weinstein, 2014a, p. 259). Consumer segmentation aims at identifying what customers want to achieve with the company and what situations to be avoided. Segments have to be measurable not only by their individual characteristics but also by their size and profiles. Segmentation helps to increase business accuracy and identify appropriate markets. Different methods can be used to learn customers and understand organisational goals. To succeed in B2B segmentation, Boone and Kurtz (2014, p. 294) introduce two methods for the identification of the required segments: a management-driven approach when managers use their observations of consumer characteristics and a market-driven approach when customers are asked to share their interests and preferences. It is a mistake to believe that one method is better than another method because in both cases enough information may be gathered for successful and effective segmentation.

Despite the necessity to gather consumers in groups, it is important to remember that every customer is an individual with a unique way of thinking, behaving, and learning, and these needs usually become a priority for companies (Schiffman et al., 2013, p. 74). An understanding of needs is an important step due to their innate and acquired nature. Innate needs are based on the physiological level, and people cannot neglect them. Acquired need depend on the environment and motives supported by society. Regarding the individualism of each customer, another peculiar feature of segmentation can be defined. It is the possibility to cover different aspects of human life and divide people according to their age, gender, race, or ethnicity (demographic segment), region, country/county size, or climate (geographical segment), possible motives or lifestyles (psychographic segment), and price sensitivity, expectations, or loyalty (behavioural segment). Attention to all these factors will better work in the company because even if one segment is poorly or mistakenly identified, it may be replaced with another properly recognised segment. Such attention to needs and choices promote loyalty of customers and increased satisfaction (Melnic, 2016, p. 57). Therefore, individualism in segmentation has to be taken into consideration and used to divide customers and understand their needs.

Targeting

When the segmentation process is over, companies have to start working on targeting the market. It is the second stage of the STP process, the identification of the number of customer groups for targeting (Barton, 2015, p. 50). If the segmentation process includes the necessity to investigate all customers, market targeting is a step when the choice of customers has to be narrowed, and all options have to be discussed. If the segmentation process makes marketers think about the people who can buy goods or services, the targeting process is about the necessity to think about the people who a company is going to sell goods and services to.

Modern people want to think that they have a variety to choose from and the possibility to consider their personal interests. They use their demands to promote the creation of new products and services. Companies have to investigate the fields of possible interests and clarify what services they can meet regarding the scope of their work. Companies have to make their final decisions regarding their available sources and employees skills to be ready to develop marketing mixes for every chosen segment (Pride and Ferrell, 2015, p. 167). This type of marketing is usually expensive, and not all companies are ready to spend their money at this stage of work and make a similar mistake to raise prices and question customer loyalty.

A concentrated targeting segment is chosen by companies that usually lack resources to meet the needs of different populations (Brennan et al., 2017, p. 160). Such limitations should not be defined as one of the possible shortages of the strategy. Dumitru and Caescu (2013, p. 122) claim that concentrated targeting is a good chance to cover the weaknesses that could be possibly identified during a segmentation process and choose the right direction in cooperation with consumers. Organisations focus on several segments to market. It is possible to combine geographic and demographic factors or investigate the combination of socioeconomic and psychographic factors. The main benefit and threat of this approach is its depth. It implies a concentration of available resources and strong positioning so that even small companies are able to compete in the market. Still, high investments and costs may be lost in case one segment is wrongly identified. A wrong STP plan usually leads to the decrease in customer satisfaction and low loyalty (Aithal et al., 2015, p. 421). Large competitors can easily take advantage of such company and achieve success regarding the failure of one company.

Positioning

Positioning is the last step in a marketing process that deals with segmentation. When several segments are identified, it is high time for a company to develop a position regarding the segments (West et al., 2015, p. 160; Brennan et al., 2017, p. 160). Positioning is the period when all employees have to work hard to offer something bigger and more interesting than their competitors may imagine (Kokemuller, n.d.). At this stage, the first ideas of how customers can see a future product should be developed. Current technological progress and the use of the Internet provide customers with a good opportunity to learn their options, investigate the services of different companies, and develop their final conclusions about their further cooperation with a particular company and the usage of its services or goods.

Positioning may be introduced as a process of designing a marketing mix in terms of which the concept of product value can be created in customers minds (Anozie, 2013, p. 158). It is what can be done by a company with a product, not physically but figuratively. Positioning is a step with the help of which it is possible to attract the attention of stakeholders and get support in completion in the marketplace (Chowdhury, 2013, p. 57). If some mistakes and doubts can be allowed during segmentation or targeting, positioning is the stage where each mistake influences the results of the work directly. If stakeholders fail to understand the offered position, it means that the company makes a mistake. The correction is possible. Each case is unique, and much depends on the position of a company, the choice of customers, and the recognition of other segments that may improve the situation.

In other words, positioning is an image that can be offered to people by a company. Some companies find it normal to use their leaders or employees as the main marketing goals. In some cases, a positioning purpose is to underline price or promote sales. Positioning may be based on values (the example is Apple iPhone proposition that is based on unique experience), quality (for example, IKEA uses its brand and customer loyalty as the best evidence of its quality in terms of services and products), and competition (in the technological field, Apple competes with Samsung using various user interfaces to prove its innovation compared to Samsung differentiation).

The evaluation of each part of the STP process shows that it is wrong to separate these three concepts if the goal to succeed in marketing is established. It is impossible to start positioning of the product or services in case segmentation or targeting is not finished or even neglected. Segmentation is useless if other concepts are not followed in the STP strategy. Targeting does not make sense without proper segmentation organised beforehand. Therefore, segmentation, targeting and positioning are three core aspects of any marketing campaign, and organisations are free to develop these processes in the most appropriate for them ways.

Examples of the STP Process

In a competitive business world, it is crucial for a company to know how to attract customers, how to introduce a product or a service, and how to ask for additional help. Some companies succeed in developing effective marketing strategies and using the concept of segmentation, targeting, and positioning, and some companies have to work better to achieve the desired results.

Amazon

Amazon is an international organisation whose STP strategy works successfully. In the analysis, Bhasin (2017) introduces Amazon as one of the brightest examples of how to use demographic and psychographic segmentation in the market. This company focuses not on what people can be interested in, but what they can really purchase and need. Individual work with each customer is a cause of customer loyalty and the possibility to develop long-term relationships around the whole globe. Amazon is not interested in a customers race, age, or gender. The only requirement to consider is peoples technological experience. Customers should know how to turn on their PC or smartphones and surf the web. Amazon gives clear instructions on how to promote customer segmentation. Every segment is based on certain segmentation criteria like region, age, gender, lifestyle, social status, etc. Therefore, it can be dynamic and change with time inviting new customers and promoting loyalty of current users. Segmentation of this company is based on customer behaviour analysed at the micro-level, including price, information, brand recognition, and personal services. There are four main groups of stakeholders recognised by Amazon Company, including customers (who want to buy something), sellers (who try to sell something), enterprises (who want to cooperate with the company), and content providers (who offer services to improve the work of the company independently). Geographic segmentation of Amazon includes regions (the citizens from more than 100 countries can use its services) and density (both rural and urban areas are included). Demographic and psychographic segmentation is general and includes both genders, all life-cycle changes that occur in people older than 18 years, all social classes and lifestyles.

Targets are chosen in regards to the groups of people to whom it is possible to sell products and services. Customers may be interested in multiple products, sellers want to observe favourable conditions, and content providers have to investigate the scope of their possible work. The positioning of the company is developed in two different ways. There is multi-segment adaptive positioning that has already brought the company a number of benefits (Dudovskiy, 2017). This type of positioning leads to the possibility to redefine customer experience and improve the already offered services according to new needs and expectations (Davis, 2016). Its position is based on low-cost leadership, differentiation of customers and their interests through design and quality, and the development of customer-focused strategies. Customer choice and loyalty introduce the best evidence of the STP appropriateness of the company. Multi segmentation includes an offering of many different products that may be interesting to a wide stakeholder segment. Adaptive positioning is used to check the latest changes and needs of customers addressing peoples expectations. In general, Amazon strategy is effective and works due to the possibility of its leaders to involve as many countries as possible in its development.

Mary Kay

Mary Kay is a multi-level marketing organisation that focuses on cosmetics selling and promoting supplementary services. The peculiar feature of this organisation is a possibility to combine the customers need and employment. Regarding the core values of this company, it is not enough to provide customers with the best services. It is obligatory to enrich womens lives both, customers and employees) and open a new door to success with pink Cadillac, legal patents, and a legacy of giving (Mary Kay, 2018). The company pays much attention to its clients and co-workers.

There are several criteria that are established by the company to segment the market: geographical (urban areas in more than 35 countries), demographic (females older than 18). Its leaders admit that the company does not divide its consumers according to their income or social status. Therefore, a part of psychographic and behavioural criteria remains to be unclear in comparison to those of Amazon. The core of its psychographic segmentation is the promotion of good look of the skin among women who wear make-up regularly, have regular annual incomes, prefer to shop at stores or online, and enjoy high-quality customer services. Positioning of the company is based on the idea to enrich womens lives and explain how to look confident. Mary Kay is a brand that offers high-quality products at an affordable price with the help of which a woman can leave a good impression, develop self-confidence, and gain respect. The chosen approach works properly in the company due to the intentions to work with certain customers under specific conditions.

Volkswagen

Volkswagen is a world-known automaker that takes successful steps in targeting and positioning. Volkswagen sells about 9 millions of cars annually (Muller, 2013). Though the company takes certain steps to create premium products and avoid low-priced products (Taylor, 2017), these attempts are not enough due to the already established strong segmentation and targeting. Volkswagen segments its market into four main categories: cars for passengers (the development of cars that are comfortable for families of different types), commercial vehicles (the production and promotion of trucks, buses, and other vehicles that promote interlinking), financial services (the relationships between dealers, customers banks, and insurance companies), and engineering field (the introduction of diesel engines and compressors for different industries). To cover all segments with appropriate services and products, Volkswagen tries to target urban consumers who appreciate quality, speed, and comfort. Price is not a critical point because of the possibility to cooperate with dealers and banks to divide payments. The company finds it optimal to target young and older buyers who understand the importance of a safe environment and an attractive design. Therefore, radio and TV advertisements can be used. Positioning of Volkswagen is based on the access to environmentally friendly, safe and attractive vehicles for urban people. The chosen STP strategy works in this company because its leaders and marketers establish their goals and higher standards with a possibility to meet customers expectations.

Generic Recommendations

Taking into consideration theoretical and conceptual perspectives of the STP model, several recommendations can be developed:

1. Never mix up or neglect the stages and follow the steps in the STP model;
2. Develop a list of segments according to the model developed by researchers, including geographical, demographic, etc. segmentation;
3. Brainstorm all possible variables at the stage of segmentation and choose only the best and most appropriate options at the stage of targeting;
4. Evaluate all available resources for positioning before targeting;
5. Identify one or two major companys segments at the initial stage of targeting;
6. Investigate the attitudes of customers and employees to services and their expectations that have to be met in the field;
7. Make a plan with several options on how to introduce the same product in different ways;
8. Communicate with a team about the appropriateness of decisions;
9. Share personal opinions and experiences in the intentions to develop a strong STP model;
10. Think about the connection between employees, customers, and leaders and use different sources to exchange information.
11. Compare the results of strategic marketing demonstrated by different companies to understand what improvements are possible in a particular case.

Conclusion

Segmentation, targeting, and positioning are helpful tools for companies who want to establish a link between customers and products. The factors mentioned in this work play an important role in business and organisational management. When managers and marketers work to understand customers needs, they get an opportunity to develop a new effective product or service with all possible benefits. The main requirement that has to be followed is to never separate the processes of segmentation, targeting, and positioning. Separately, they do not make any sense and have no power; and together, they introduce a strong combination of helpful steps for developing a marketing campaign.

References

Aithal, P.S., Shailashree, V.T. and Kumar, P.M.S. (2015) A new ABCD technique to analyse business models & concepts. International Journal of Management, IT and Engineering. 5(4), 409-423.

Anesbury, Z., Winchester, M. and Kennedy, R. (2017) Brand user profiles seldom change and seldom differ. Marketing Letters. 28(4), pp. 523-535.

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Chowdhury, P.P. (2013) Key strategies and issues of positioning: a review of past studies. American Academic & Scholarly Research Journal. 5(1), pp. 55-66.

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The most important message delivered by Malcolm Gladwell in his Choice, happiness, and spaghetti sauce speech that can be linked to marketing (and pricing policy in general) is the innovation that should be brought to the pricing strategy. This innovation regards examples in which companies revolutionize their pricing policies, strategies, or organization, or where companies use an understanding of customer psychology to change client perceptions of value and price (Hinterhuber & Liozu 2012). This means that somewhere deep inside the customers know what they want, but they would never tell.

In most cases, the customer would not tell the company what his or her preferences are just because the company does not ask the right question and the resonance, they get is confusing. It is important that even research-intensive, advanced companies should approve a variety of substitute pricing strategies across their merchandise and service portfolio. When approving the strategies, the businesses should remember that there is no perfect price for all the customers, but there is a perfect price for a distinct cluster of clients.

One of the best strategies that correlate with the customers needs is the value-based strategy. The customers value is well-defined as the customers alleged preference for and appraisal of those product characteristics and consequences that simplify (or complicate) reaching the customers goals and purposes in use conditions.

Price-adjustment strategies are often based on competitive conditions. Competitive pricing strategy is the most popular among other types of pricing strategies (Jensen 2013). Another key to understanding the customer needs is dynamic pricing. But the most important lesson that you learn is that sometimes the best position is simply the one that is open. This means that if you are planning to launch a new tomato sauce and the opponents are all priced about the same, that tells you the best niche for your new product might be top priced.

Additionally, when you launch, your unique selling proposition will be informal and persuasive, offering your customers to treat themselves to the best. Any pricing strategy, no matter how good it seems to be, should be first tested among the potential customers (Kotler et al. 2013). After you received the results, you would divide the clients into groups by a unique characteristic that would define each cluster.

Another great lesson that we learn is that sometimes we should forget everything we have known before and try to start over in order to come up with new ideas that would change the game. The main idea is also that we should not always follow the patterns, but create our own if we want to represent the dominance and originality in the business world. The pricing strategy might seem aggressive, but if it is one of a kind  it is destined to be successful. Creating a pricing strategy is like creating a spaghetti sauce  you will have to create 45 varieties of it before you make it in a proper way as there is no chance the same price, just as the same sauce, would be ideal for everyone.

References

Hinterhuber, A & Liozu, S 2012, Innovation in Pricing: Contemporary Theories and Best Practices, Routledge, London.

Jensen, M 2013, Setting Profitable Prices: A Step-by-Step Guide to Pricing Strategy -Without Hiring a Consultant, John Wiley & Sons, Hoboken.

Kotler, P, Armstrong, G, Trifts V & Cunningham P, 2013, Principles of Marketing, Ninth Canadian Edition, Pearson Education, Upper Saddle River.

Introduction

Business rivalry is inevitable in any business environment because profit maximization is the enterprises ultimate goal. Therefore, market competition is a revenue expansion strategy through which vendors improve their product and service offering to increase their customer base. Commercial activities involve expenses for stocking merchandise or services and recurrent costs such as employee salaries or rental bills (Baye & Pince, 2016). Revenue gain allows a company to meet these expenses, while loss creates monetary burdens that can be costly for a business. Low financial payments create panic, and the possibility of corporate closure, while capital growth implies commercial success and expansion. Companies put maximum effort into their activities to intensify yields and avoid economic depreciation.

Resilient and strategic decision-making is key to meeting exceeding industry competition. In Keds case, the existing competition from business rivals such as Nike, Reebok, Adidas, and Brooks requires tactical marketing, customer service, quality, and price restructuring to meet its trading challengers. The firms should use print media, radio, and television marketing, offer friendly customer services, and adjust their prices compared to those of the competitors. The approach would allow the organization to earn back its customers and make new and long-term clients for a competitive advantage.

Market Structure Pricing

Strategically adjusting the product costs would boost Keds sales and ultimate profit. Tactical pricing incorporates a detailed study of the target customer to understand their spending habits and financial capability. Low charges would create an impression that the companys products are of poor quality. Equally extortionate price of commodities may discourage potential customers who may not afford them (Baye & Pince, 2016). Therefore, Keds valuing choices would consider an understanding of the target customer, who in the 1980s would include the middle-class baby boomers with additional disposable income from integration into the growing technological working environment. The costing choices would also be determined by market research to estimate competitors rates to appropriately adjust the firm products fees in the market for superior earnings. Overall, strategic payment decisions would facilitate Keds sales creating a competitive advantage.

Quality and Performance

Quality and performance align with the pricing as valuable products can sell at higher charges yet contribute to customer satisfaction. Establishing a research and development (R&D) department can allow the organization to conduct innovation activities to improve commodity and service quality to meet and even exceed that of competitors. For example, one of Keds competitors dominant features is an investment in R&D. Adopting this strategy will ascertain that the firm frequently renews its tennis shoe designs allied with changing customer demands. In this way, the corporation would gain and maintain clienteles for competitive and financial benefit.

Marketing would also be a vital step for Keds as it would expand its customer reach. Although social media channels had not been established and increased in the 1980s, broadcast media, including radio and television, were commonly used. The firm would capitalize on these promotion channels and business consistency to reach its target customers. Sufficient investment in advertising would boost the businesss message to existing and potential customers.

Conclusion

Business competition is unavoidable and necessary in the contemporary commercial world. Industry rivalry can be converted into a lucrative opportunity through strategic decision-making on steps required to meet and exceed this competition. In Keds context, the firm needs to restructure its pricing strategy to fit the potential buyers. The provision of quality performance is also vital through establishing an R&D department to advance product and service innovation. Lastly, the corporation would also capitalize on the then existing media such as radio and television for marketing and advertisement of the products. These strategic steps would allow Keds to gain and retain more customers for a competitive and financial advantage.

Reference

Baye, M. & Prince, J. T. (2016). Managerial economics & business strategy. McGraw-Hill.

Main Messages, Ideas, and Implications

Nowadays, there is a need to transform marketing based on the opportunity for direct interaction and customer cultivation. The formation of long-term relationships is the key message revealed in the article Rethinking Marketing by Rust et al. (96). At this point, a customer-manager-driven organization should be employed to serve customers rather than merely promote brands and products. In other words, the paramount message of the article is the necessity to shift from the traditional marketing process to the new one driven by relationships and technology.

The main idea is that todays companies have various technologies and tools to understand their customers by exploring their evolving needs and wants and meeting their expectations, thus creating consumer value. For example, Business to Business (B2B) companies, Customer Relationship Management (CRM), Marketing Return on Investment (Mktg ROI), Research and Development (R&D), and other instruments are to be used to design and maintain competitive strategies. Another idea is associated with the role of a customer manager, who is expected to express a companys marketing information and marketing mission.

As noted by Rust et al., T-shaped people, who have a broad knowledge of the sphere they operate in and are also proficient in some issues, present the most beneficial option for the position of a customer manager (98). They are experts in extracting insights and interpreting customer needs by focusing on market targeting.

The given article contributes to the improvement of customer departments in companies that strive to advance their performance as well as attract and retain more customers through building long-term relationships. It helps to understand that the implementation of marketing strategies and technologies would promote customer lifetime value, profitability, equity, and a share of the latter. It should also be emphasized that the article outlines several significant points of a marketing shift, making it clear for readers that while initiating the transition from traditional marketing, it is advantageous to focus on a complex of instruments and strategies.

10 Discussion Questions

1. What was your reaction to the given article? Do you agree with its ideas?
2. If you were a customer manager, what strategies would you use? Why?
3. What do you think is the main strong point of the article?
4. What are the weak points and limitations of the article?
5. Compare product-manager driven and customer-manager driven relationships. Why do companies need to reinvent marketing?
6. What does a company cultivating customers look like?
7. What is the role of market research and development as a customer-facing function?
8. What is the difference between B2B and B2C companies? Focus on their strategies and provide examples.
9. How this articles ideas may be improved?
10. Did the article change your attitude towards marketing? How?

Brief Answers

1. This article is quite interesting as it presents new ideas that seem to be relevant to todays environment and customers expectations. Therefore, one should agree with such an idea as the adoption of new marketing principles.
2. Having read the article, it became evident that the selection of a marketing strategy depends on different factors, including a companys size, target audience, product, etc. However, the focus is to be made on establishing relationships with customers.
3. Among the strengths of the given article, one may note its clear structure and reasonable ideas. The authors properly explain their assumptions and provide vivid examples to support their views. Diagrams and images also contribute to understanding the articles main points.
4. The article fails to provide a reference list and citation of credible sources that were used in the course of its preparation and composition. It would be better if the author outlined some reliable books, statistics, or websites, so that readers may proceed with exploring the identified topic. The limitation of the article is associated with the focus on the US context, the insights regarding which cannot be generalized to a broader perspective.
5. The key difference between compare product-manager driven and customer-manager driven relationships lies in marketing orientation. If the former targets a product promotion and mass marketing, then the latter strives to engage individual consumers by creating value. The companies need to change their marketing approaches as the second one is more suitable today.
6. A company cultivating customers has a customer-oriented structure, while it especially concerns marketing departments. Such a company is also characterized by the first-order business and the position of a chief customer officer (CCO).
7. Since customers needs and preferences change with time, it is essential to conduct market research and development in a constant manner. Improvements and adjustments compose the expected outcomes of R&D.
8. B2B companies address other businesses and have more than one level regarding decision-making processes. B2C companies are those in terms of which the target is the customer (restaurants, websites selling goods, etc.).
9. Further research may contribute to the development of the mentioned ideas. In addition, the consideration of more examples may reveal potential failures and ways to improve.
10. Yes, the article helps to consider the situation from a different angle and understand that companies need to shift from old marketing approaches to remain competitive by meeting customers expectations and trying to anticipate them.

Work Cited

Rust, Roland T. et al. Rethinking Marketing. Harvard Business Review, vol. 88, no. 1, 2010, pp. 94-101.

Dream Water: Core Product, Actual Product, and Augmented Product

Core Product

The core product is the main benefit that the product brings to the consumer. For Dream Water, the core product is the medication against insomnia. This is the main benefit offered for the potential consumers: a drug allowing for falling asleep quickly.

Actual Product

The actual product is the physical or tangible product that a consumer purchases (Donovan & Henley, 2010). For Dream Water, it is comprised of the drug itself (which comes in different flavours), and of the plastic bottle in which it is contained, with a label on it. It may also include the cardboard box a whole package is bought.

Augmented Product

The augmented product is the non-physical part of the product which includes the additional benefits provided with the product, or its additional features (Solomon, Hughes, Chitty, Marshall, & Stuart, 2013). For Dream Water, the augmented product includes the packaging (which could be greener), the guarantees given by the manufacturer and celebrities, the fact that its energetic value is 0 calories, etc.

Which factors could affect Dream Waters adoption? Why?

Various factors could affect Dream Waters adoption.

Relative advantage

The relative advantage will depend upon the effectiveness of Dream Water as a sleep-inducing medication (the more effective the drug is, the greater the advantage) and its price (the lower the price, the greater the advantage over other similar products). In fact, the advantage will depend upon the combination of effectiveness and price, because the customers will want to buy an effective product, but need to be able to afford it (Rogers, 2010).

Compatibility

The compatibility will depend on packaging in which Dream Water is sold, for certain clients may be environmentally aware and thus wishing to purchase products that do not pollute the environment.

Complexity

The complexity will depend on the way in which Dream Water is used: its interaction with other drugs, the need (not) to eat before using Dream Water, etc., because some clients might find it difficult or annoying to follow such additional instructions.

Trialability

The trialability will depend on how easy it is to purchase a small amount of Dream Water and try it, because clients might not wish to buy much of it before trying.

Observability

The observability will depend on how well the product is advertised, because people will need to hear about the product and its effectiveness.

References

Donovan, R., & Henley, N. (2010). Principles and practice of social marketing: An international perspective. Cambridge, UK: Cambridge University Press.

Ind, N., & Iglesias, O. (2016). Brand desire: How to create consumer involvement and inspiration. London, UK: Bloomsbury Publishing.

Rogers, E. M. (2010). Diffusion of innovations (4th ed.). New York, NY: The Free Press.

Solomon, M., Hughes, A., Chitty, B., Marshall, G., & Stuart, E. (2013). Marketing: Real people, real choices (3rd ed). Melbourne, VIC: Pearson Education Australia.

Case Study

Davids Tea was founded in 2008 by tea enthusiast, David Segal, and his cousin, Herschel Segal. Headquartered in Montreal, the duo opened their first retail space on Queen Street in Toronto and quickly expanded to over 75 stores in North America. Davids Tea built its business on selling over 150 varieties of loose leaf tea and accessories, lauding the health benefits and deliciousness of tea to an increasingly health-conscious and discerning target market.

In 2012, Davids Tea opened its first retail store in Prince Edward Island. Located in the northern end of the downtown core, Davids Tea is ideally situated within a one-block radius of two major federal buildings, a technology-driven office building, the electrical utilities office building, most of the major banks, the performing arts center, and plenty of small locally-owned restaurants and shops. Also along the same block and street front is a Running Room outlet and a Starbucks.

Like all Davids Tea locations, the Charlottetown store was corporately owned and managed. Upon the stores opening, Davids Tea hired Laura Smith, a recent UPEI Business School graduate, and tea drinker, to be the local store manager. Lauras responsibilities included the day-to-day management of the Charlottetown location including staff, scheduling, inventory management, purchasing, and working closely with the head-office to help Davids Tea reach its organizational goals. Most of the marketing related decisions with regards to products, pricing, place, and promotion, were the responsibility of the head office. However, Laura was given a small amount of leeway to take initiative if local opportunities presented themselves.

In January 2016, Starbucks announced the closure of the Starbucks located two-doors down from Davids Tea. To Laura, this represented a real opportunity for Davids Tea to capture consumers who were used to visiting Starbucks regularly. Before she acted, Laura knew it was important to stop and reflect on what she learned in her introductory marketing class at UPEI to help make sure she

1. truly understood the nature of the opportunity in front of her, and
2. crafted a marketing strategy that would benefit Davids Tea.

Question 1

Laura knows that all customers go through the same 5 steps when making a consumer purchase. To help Laura better understand her customers, provide a detailed account of the 5 steps of the consumer buying process specifically for Davids Tea.

The 5 steps of the buying decision process for Davids Tea can be described in the following way. First of all, the customer recognizes the need for buying the product. At this point, a tea purchaser can be guided by internal stimuli (love for tea or thirst, for example) or external ones (a friend who is a tea lover and keeps talking about tea). After the need is recognized, the potential customer seeks information.

At this stage, Laura needs to be certain that the customers will have numerous means of learning about Davids Tea, including happy relatives who enjoy the product (and who become the personal source of information), advertising (from commercial and public sources, for example, mass media and packages with Davids Tea logo), and eventually personal positive experience. The customer is then going to consider the alternatives. With Starbucks closing, the number of alternatives for the suddenly thirsty customers will diminish, but Davids Tea still needs to distinguish itself from the rest of the brands available.

The purchase decision of the customer is the next stage; this stage is affected by Davids Tea reputation and the level of service, but many of the factors that influence the decision can remain unaffected by the store itself. For instance, the suddenly thirsty customer may discover that she had left her purse at home. The final stage is the postpurchase behavior. If the customer is satisfied with the buying experience, they are likely to return to the store, which is the ultimate goal for Laura. To this end, the store needs to be customer-oriented and enhance the experience by the service, environment, bonuses, and other perks that suit Davids Tea brand. By knowing this process, Laura can help the customer move through it and make sure that the perception of the brand is positive.

Question 2

Laura remembers that differentiation and positioning are critical parts of a competitive marketing strategy. Help Laura create a detailed differentiation and positioning strategy.

Question three will dwell on the customers of Laura; the specifics of the ideal customer image are directly connected to the positioning strategy of a product. The product is positioned as a high-quality, delicious, healthy beverage; the customers have the chance of becoming the members of a tea lover club and show their belonging by buying the accessories from the company. The high quality is correlated to the luxuriousness of the product and its high price. Indeed, given the fact that Lauras store competes with Starbucks and given the image of Davids Tea, it is unlikely that the case store is lowering the prices.

The answer to question 1 shows that for Laura, it is important to distinguish the brand from others to ensure that the customer chooses Davids Tea and not its alternative. The differentiation strategy for Lauras store (the one that distinguishes it from the rest) may focus on three qualities of Davids Tea: it is healthy, delicious, and Davids Tea. This way, she can exploit and at the same time support the reputation of the brand and avoid the differentiation strategy of lowering prices.

Question 3

Laura knows its easy to lump all of her customers into one simple category = tea lovers. But the truth is that many segments make up the customers of Davids Tea. Help Laura by identifying some market segmentation strategies that may be relevant for Davids Tea.

There are several marketing segmentation strategies, and some of them are especially relevant for Laura. Since Laura is in charge of a single store, geographical segmentation can only be of use if she can see any means of suggesting localization strategies for the product. Similarly, many of the demographic segmentation variables are unlikely to work (like gender, race, or marital status), but the income can be of significance.

From the case study, it can be concluded that Davids Tea focuses on positioning the beverage as a delicious, luxury product (that can rival Starbucks  coffee). Also, the case study states that the store provides accessories; it is apparent that Davids Coffee works to attract loyal customers who will belong to this club of tea lovers. Therefore, it may be suggested that the income of the consumers is likely to be above the average. It also follows that behavioral and psychographic segmentation is of particular importance for Laura: as stated in the case study, her customers are likely to be tea lovers who are attracted to high-quality products and lead a healthy lifestyle.

To sum up, Laura will benefit from segmenting her market on multiple bases. From the case study, we may suggest that her typical customer is a person who lives in Charlottetown, tries to lead a healthy lifestyle, has an over-the-average income and a taste for stylish and luxurious things, loves tea, and has the potential of becoming a loyal customer of the tea lovers club. Possibly, Laura has more details to add to this profile.

Question 4

One of the target markets that Laura has often overlooked is the business market in Charlottetown. She knows that selling to other local businesses (such as offices and restaurants) represents a good opportunity for Davids Tea. But Laura is unsure how to proceed. Help Laura buys remind her of the important differences between business buyers and consumer buyers and how these differences are important to a business like Davids Tea.

Business customers behavior is different from that of the consumer customers, and Laura needs to keep in mind the following aspects. The buying decision process is rarely spontaneous for a business buyer. Moreover, it is going to be centralized, and it is not unlikely to involve some people, which is also explained by the fact that such deals typically involve large sums of money. Economic stimuli (for example price), quality of the product, and reputation (that Lauras store has yet to earn as a supplier) will be of primary importance.

However, the people involved in the decision process do not become cogs in the machine; they are still affected by social stimuli, which means that building proper relationships with them is also of importance. To sum up, Laura needs to get better acquainted with the businesses that attract her attention and the people who run them, learn more about the deals she can have with them, negotiate, mind her liabilities, and demonstrate that Davids Tea is a responsible business partner.

Question 5

The marketing landscape is changing and Laura needs to be aware of and prepared for these changes. Help Laura by providing detailed explanations of the way the marketing landscape is changing and how these changes might impact Davids Tea.

The marketing landscape will always be changing, but from Lauras case, it follows that some very specific changes are occurring in her environment. From the case study, it is not clear why Starbucks is closing. In effect, it might be the result of the decline in economics on the global scale or locally in Charlottetown, which indicates a threat for any business. However, personally, for Lauras store, the disappearance of a very famous rival means that it has the opportunity of attracting its customers. Starbucks product is coffee, and the introduction of coffee to a teashop is a questionable action, but Laura can consider it. In other aspects, Starbucks customers are similar to those of Davids Tea in being attracted to luxurious beverages.

Laura needs to consider the opportunities and threats that are related to the change in her immediate environment. Moreover, she needs to consider global trends. One of them is the development of technology, in particular, mobile phones and tablets. Nowadays, a technologically-savvy store may offer, for example, a free Internet connection and means of paying for the order with the help of a mobile phone. Laura needs to keep up with the change in that arena as well, transforming it into the strengths and competitive advantages of her store. To sum up, Laura needs to conduct research (or have it conducted) and monitor all the business-relevant aspects of the changing environment now and in the future to ensure that her business is flexible, which is a competitive advantage of its own.