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Table of Contents Task 1: Understanding marketing concept and process...............................................................................2 1.1 Explanation of the various elements of the marketing process of Boots...........................................2 1.2 Evaluation of the benefits and costs of marketing orientation of Boots............................................4 Task2: Using the concepts of segmentation, targeting and positioning.......................................................6 2.1 The macro and micro environmental factors influencing the marketing decisions of Boots..............6 2.2 Proposing segmentation criteria to be used for products in different markets..................................7 2.3 Choosing a targeting strategy for a selected product/service............................................................7 2.4 Demonstrate how buyer behaviour affects marketing activities in different buying situations.........8 2.5 Propose a new positioning for a selected product/service................................................................9 Task 3: Understanding the individual elements of the extended marketing mix of Boots.........................10 3.1 Explaining how products are developed to sustain competitive advantage.....................................10 3.2 Explaining the arrangement of distribution channel of Boots to provide customer convenience. . .10 3.3 Explaining how prices are set to reflect Boot’s objectives and market conditions...........................11 3.4 Illustrating the integration of promotional activities in Boots to achieve marketing objectives......11 3.5 Analysing the additional elements of the extended marketing mix.................................................12 Task 4: Using the marketing mix in different contexts...............................................................................14 4.1 Planning marketing mix for two different segments in consumer markets, with reference to a product of Boots....................................................................................................................................14 4.2 Illustrating differences in marketing products and services to businesses rather than consumers, with reference to the product...............................................................................................................15 4.3 Show how and why international marketing differs from domestic marketing................................16 Bibliography...............................................................................................................................................17
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Task 1: Understanding marketing concept and process 1.1 Explanation of the various elements of the marketing process of Boots
Definition of Marketing: The process of marketing is oriented to bring compatibility between the company and the customers. It enables the companies to access its capabilities in order to meet the needs and wants of the customers they target. (Leader, 1990) Scope of marketing:
Identifying where you have a business opportunity or where a possible market for your
business is Measuring what are the needs of customers and segmenting the customers in groups
based upon them Assessing the requirements of the company needs to meet the needs of the customers. Communication once you have identified the above requisites, to the people in your
company and working towards meeting the needs of the customers Checking what is delivered to the customers Devising and implementing a strong tool for promoting and advertising the business (Jain, 2010)
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Elements of the marketing mix of boots: Product: Boots is the seller of many products. Health, beauty, pharmacy, mother and baby, toiletries are sum of its product lines. It manufactures many of the products under its own brand name. Price: Boots take pricing decision considering market conditions. It faces fierce competitive pricing from companies offering substitute products. So it has to devise a strong price mechanism that prohibits customers to purchase from other companies. (BBC, 2014) Promotion: Boots follows an integrated efficient promotion mechanism. The company announces offers and discounts in its web portal. Gives shopping points to the customers on downloading the Boots app, gives products for half prices and discount of a fixed amount on purchase above a mentioned amount. Packaging: Boots adopts the method of attracting customers by attractive packaging of products. Packaging is just not a container of the product but it tells about the brand name, and it is the first impression of your product to the customers. Place: Boots is a recognised UK store. It operates targeting wider customer base both online and offline. (Masterson & Pickton, 2010)
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Marketing process adopted by Boots: Boots is repositioning its brand image to target more and more customers and acquire the youth as its new target customers. They were initially positioned in the market as low cost brand but now after reaching the maturity of product life cycle they have repositioned themselves as a brand of cosmetics “for girls with attitude�. It is adopting the process of packaging more attractively to appeal the youth and the younger generations. (Business Case Studies, 2014)
1.2 Evaluation of the benefits and costs of marketing orientation of Boots Having a marketing orientation will give Boots a better understanding of the needs and expectations of its customers and a better strategic planning to meet them. Marketing orientation helps Boot to reposition its brand as it understands the requirement of repositioning by having a marketing approach. Marketing strategy development by defining marketing objectives
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In order to address a problem you need to identify the problem first. Defining marketing objectives indicates a firm what is the current situation of the firm’s micro and macro environment and what needs to be done to make the situation better. Example an analysis of competitors pricing strategy will help Boots know where does it stands over or under priced and what does it need to do to have a competitive pricing without compromising on quality. (Ainsworth, 2012) The benefits of having a marketing orientation:
This is an approach that helps business to understand and evaluate their marketing plans better having a marketing orientation a company understands are they targeting their customers better or not or do they require to devise e a new strategy? It also helps them
forecast a long term plan that is future oriented. Marketing orientation will enable Boot’s to analyse pricing trend in the competitive
market Help s Boot to structure new promotional plans in order to reach out to their maximum
customers They have better market penetration by selling online A marketing orientation means you are better positioned and thriving in the global market (Baker, 2013)
Costs A big brand that exists in the market for years like Boots needs high investments for having a marketing orientation. The marketing research for such a huge product line will be very costly. You need high investments for the process of marketing research for a big brand like Boots. But Boots cannot overlook the importance of spending on making technological advances. You need web enabled data bases and software tools to collect and compile your market research data. Also you need to invest heavily on the equipment required and the ongoing training. But the cost factor cannot undermine the benefit and necessity of having a marketing approach. Marketing orientation is an approach that has its costs associated, but the benefits always overrides the costs Boots need to spend on marketing orientation if they desire to gain customers
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and profitability in the long term. (Kokemuller, Advantages & Disadvantages of Market Orientation, 2014)
Task2: Using the concepts of segmentation, targeting and positioning 2.1 The macro and micro environmental factors influencing the marketing decisions of Boots The marketing environment affect s Boots directly .The micro environment known as the internal environment of the Boots is made up of
the
itself
business and
the
challenges coming from
within
business. contains
the It the
suppliers, customers, marketing intermediates and the public. Customers:
The
marketing decisions are made keeping in mind the
requirements
and the demands of the customers. Boots for an example are taking many marketing decisions
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targeting teens and devising its brand image accordingly. Even packaging is done keeping the preferences of teens in mind. Suppliers:
Boots being a retailer of pharmaceutical products and beauty products depend
heavily on its suppliers.It has a supplier mannual integrated at its website which is a site of informatyion of Boots supply chain requirements. (Boots UK, 2014) It is very essential to have trusted and duiverse suppliers supporting the procurements need of the company. Employees: No company can negelect the importanc eof having a well motivated and trained workforce to ensure a healthy internal environment.Boots employee interact with customers directly so they need to be highly trained in customer management. Macro Environment of Boots affecting the marketing decision- PEST Analysis Political Factors:Marketing decisions are influenced by the policies of the Government in UK. The stability of governement, policies regarding trade and commerce. Economic Factors: During a situation of an economic crisis, Boots will have low sales.Similarly when there is a recession in the economy leading to unemployment people will not prefer buying beauty products and cosmetic product from Boots. The demand of Pharmacy products rises in situation such as out break of an endemic etc. Social Factors: Marketing decisions of any company is influenced sand based upon the soicial ocnditions of the segement of customer it trargets.Boots has to consider taking marketing decisions keeping in mind the minimun wages, earning power of the customers, literacy rates etc.Animal testing for pharmacy products may not be liked by a section of society , Boots need to consider this. Technological Factors: Boots has adapted itself to the changing technological trends.the emergence of the social media has given a new dimension to marketing.Boots is using online shopoping portal and it is using internet as a tool to spread its promotional news.Boots displays all its new offers and discounts in its website .This created customer awareness. (Dudovskiy, 2012) 7
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2.2 Proposing segmentation criteria to be used for products in different markets By Lifestyle People
have
different needs of products
and
services owing to the differences in their
life
style.
People of different age groups or family patterns
have
different
needs
known
as
psychographic segmentation or life style segmentation. Boots can use this for building a picture of how their target market desires to spend their leisure time and what activities interest them? Building a product unique to the preferences of people will help Boot’s target new markets. Boots has customers having different psychological needs such as a customer who is health oriented will purchase products accordingly that will benefit his/her health. A couple having a baby will purchase baby products and their psychology will be to provide their baby of a brand they can trust. So, Boots can use these psychological needs and target accordingly. (Symis, 2009)
2.3 Choosing a targeting strategy for a selected product/service Target strategy has to be chosen keeping the customer segment in mind. Concentrated Targeting can be used by Boots to target a particular segment of customers. This can be used for targeting the younger generation of women for its beauty products and cosmetics.
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The need, activities and interests of the younger female population of UK will form the basis of this targeting strategy. (Kotler & Keller, 2006) The younger generation opts for more colourful range of beauty products such as shades of nail polishes, lips sticks and blushes. They are much open to experiment. So the targeting strategy should be implemented accordingly. The strategy should lay focus on even the packaging as younger generation like innovative packaging such as use of matt finish materials, use of vibrant colours etc. Boots can use multi -segmented targeting to focus on its wide product line such as the beauty and the pharmacy.
2.4 Demonstrate how buyer behaviour affects marketing activities in different buying situations The purchasing decision of the consumers is influenced by many factors. The buying process is complex with many internal as well as external factors in it. Consumers many a time indulge in impulse buying. Purchasing costly products involves lots of research and thinking. Evaluation Process: Customer understands their needs first then they choose a brand in the market satisfying that need. They have their own parameter to judge a product. Purchasing Decision After evaluating consumers, select a product that they settle for. Then the seller initiates the process of purchasing. But an impulse could change purchasing decision at this stage too. Consumers can change their buying decision very easily. It is essential for the seller to make the entire purchase process easy and enjoyable.
Post Purchase Behaviour
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It is common to have doubt about the product after purchasing it. Manufacturers require reassuring the consumers so that they turn into loyal customers and recommend the product to their family and friends. Situations that marketing manager of Boots should consider for influencing the buying behaviour of its customers are; Social Situation This influences the buying pattern and needs of the customers. So Boots need to keep in mind and analyse the social situation to acquire more customers and keep existing customers happy. Consumer’s Time Situation Boots will have high sales volume at weekend when cunsomers are intersted in making the purchase. (Hawkins & Mothersbaugh, 2010)
2.5 Propose a new positioning for a selected product/service Product chosen: Boots Seventeen range of makeup and beauty products Positioning Mission: Positioning it as a range of beauty products and cosmetics for young girls, and changing its earlier positioning as a low budget brand. Strategies: Strategies implemented for re-positioning it will be,
Changing the logo and concept in accordance to the new positioning mission Brand endorsement by a young teenage celebrity Conducting market research of the makeup preferences of teenage girls and launching
new products accordingly Stressing on the packaging of the 17products by making it attractive to the younger generation use unusual materials and vibrant dark colours for packaging. (Boots, 2014)
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Task 3: Understanding the individual elements of the extended marketing mix of Boots 3.1 Explaining how products are developed to sustain competitive advantage The process of new product development requires immense market research and expertise. It gives the business a platform to revive and strengthen their brand image by developing products needed and desired by the customers The business of Boots is driven by developing new and innovative products. They welcome innovative idea as the company believes that good ideas are the ones that sell. They materialise many new ideas every year to be ahead in competition. They are now planning to target global customers catering to global needs and demands creates bigger need to develop new products. They have a separate new product development team. Their team in Nottingham are working on new product development of their cosmetic range No.7.They is stressing on the new product development of their pharmaceutical products as well. They recruit scientists, people from the technical teams, health care expert to be a part of their new product development cycle. (Boots UK, 2014)
3.2 Explaining the arrangement of distribution channel of Boots to provide customer convenience Boots are into cosmetics and pharmaceutical wholesale business; these require an effective and timely availability of supplies. Boots in coordination with their suppliers deliver health care products in about 20 countries. This vast delivery coverage is possible because of a wellmanaged supply chain. They provide customer convenience by having product availability round the clock, and by having an efficient delivery channel. They believe in delivering on time. The need of products of pharmacy is often urgent and delay in this business can be hazardous to the customers. They encourage pharmaceutical manufacturers to gain control over the distribution channel and thus save extra costs they would have to bear by having the delivery process through a middleman. They outsource their activities such as pre- wholesale, direct delivery of supplies, and delivery of special drugs to increase the efficiency of their distribution channel. They aim at 11
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growing their distribution channel through acquisitions and mergers and the acquisition of Unichem was a part of this strategy. (Alliance Boots, 2014)
3.3 Explaining how prices are set to reflect Boot’s objectives and market conditions Boots operates in a highly competitive market. The beauty industry is already facing a state of high competition .With the entry of grocery chains such as Sainsbury and Asda in the pharmacy business Boots has increased challenge of competition in these industries as well.
Competitive
pricing is a tool to survive
in
the
competition. Boots take great care to determine prices fits product and charge accurate prices from the
customers.
It
informs customer to check prices when they order from the online portals as the prices on which the products were ordered before can change over time. (Boots Website, 2014) It understands that pricing is one of the biggest impulses for customers to buy products so they use many promotional activities that offer discounts and sales. Such as 50% discount on certain products, 20% discount on shopping above certain amount, buy the first product at the MRP and get 50% off on another purchase etc.
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In the year 2004 Boots was facing crisis and it decided on cutting prices paid to the suppliers by 3%. This was done to save funds that for further investments. (Hall, 2004)
3.4 Illustrating the integration of promotional activities in Boots to achieve marketing objectives Promotion is a marketing tool designed to retain the customers that you already have and acquire more customers. It is also used to target new market segmentation and creating an awareness of your brand. Boots has incorporated a very nice loyalty scheme for their customers which give them 4 points for every purchase of £1 Boots indulge in promotional activities in shopping centres by providing entertainment to the public by Jazz Bands, musical shows etc. Promotion in Christmas season Availing special discounts and offers for customers Boots was one of the main sponsor of millennium doom and planned its promotion linked to the sponsorship (Jardine, 1999)
3.5 Analysing the additional elements of the extended marketing mix Physical Layout – the layout of the stores has gained much importance as consumers are in direct contact with the work areas of business so, the business are much aware of creating a better and pleasing ambience for their customers as well as employees. So the presentation of the place is very important. Boots uses certain customer service guidelines to maintain consistency in the way customers are served Boots requires to stress more focus on their shelf design to make it convenient for the customers The company needs to strategically place its beauty and pharmacy products in the stores to make it more convenient 13
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ďƒ˜ Physical layout is also essential aspect for the online or virtual stores as it impacts the customers directly People: People are essential resource of a company. Boots provide excellent career opportunity for its employees. The company believes that people are their biggest strength and aims at making Boots a great place to work. A happy staff can only make the customer happy, so it is very essential that the organisations keep the staff motivated. Process: Boots involves high degree of laboratory testing and scientific research in developing its products as it deals in pharmacy and beauty products both these product lines need to have laboratory accreditations. The process of delivery system in Boots is well developed catering to the pharmaceutical needs of 20 Countries .They encourage pharmaceutical manufacturers to gain control over the distribution channel and thus save extra costs they would have to bear by having the delivery process through a middleman. They outsource their activities such as pre- wholesale, direct delivery of supplies, and delivery of special drugs to increase the efficiency of their distribution channel.
Task 4: Using the marketing mix in different contexts 4.1 Planning marketing mix for two different segments in consumer markets, with reference to a product of Boots Make up products Marketing Mix Plan 1. Segment: Geographic Place: Indian beauty market. Product: The customer needs of beauty products vary in different geographic segments. Foundations used will be matching to their skin tone and the sunscreen required at certain places will be of higher SPF. Make up primer used also should not be launched of very lighter shades. 14
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Gothic and metallic shades of blushes will be more preferred. Buying skin whitening products are a trend so selling them can earn profitability. Price: It should be fixed keeping in mind the economic condition and the paying capacity of people to pay for beauty products. India is a country having unequal distribution of wealth being the 8th ranked countries having the richest people of the world .It is advisable that Boots as an efficient marketing strategy can release two lines of product just a L’Oreal did releasing Maybelline Boots can release an economical low priced brand as well as a premium high priced brand. Promotion: Promotional strategy for targeting a new geographic segment should be very effective. Creating brand awareness is required. Foreign brands a thriving well in Indian beauty market. Promoting the products by free makeovers at malls, distributing the product at super markets, malls, beauty outlets, branding it in the new geographic market .promotional contests, prizes will be effective tools (Boots, 2014) 2. Segment – Behavioural Health and fitness products Place: Distributing the products at pharmaceutical outlet of Boots. Healthcare shops, gyms etc. Product: Diet and weight loss product like Forza T5 Super green coffee Price: Prices of these products vary from £20 to 200 Promotion: Targeted at the segment of people whose psychology is to lose weight the promotion strategy should be made accordingly. Promote the range of weight loss products at Boots by TV commercials, social media, at Gyms, fitness centres etc. (Boots, 2014)
4.2 Illustrating differences in marketing products and services to businesses rather than consumers, with reference to the product While marketing to consumers, consumers are the decision makers although influenced by family and friends to a little extent at time. While marketing a product to a business the sale is made to a business or a firm. 15
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Behaviour of the buyer: Consumers are driven by emotions in making the purchase. Business are driven more on rationale and less on emotions. Business customers access a product before buying on parameters such as its usability, quality, features, productivity etc. The buying process in case of consumers is simple whereas when it comes to business it is much lengthy and complex. Relationship between customer and buyer: Consumer marketing is focused on larger groups or target segments but business marketing is more of a personalised type. In an organisation, sales representatives and marketing coordinator takes buying decisions whereas when consumers buy they decide on the basis of personal or family needs and on the basis of their perception based on advertisements and promotion. When business buy they engage in private discussion about the features and utility of the product through presentations or business talk on the other hand customers are sometimes call for group promotional activities. (My Marketing Dept. Inc, 2014)
4.3 Show how and why international marketing differs from domestic marketing There is a considerable amount of difference in doing the business in your home country and doing it outside the home country. Working in a new country requires business to have a hang on their laws, buying behaviour and pattern and the strategies. Culture For a business to thrive well in international market it is essential to understand the culture of the country they are venturing and devise their 7P’s of marketing accordingly in order to suit the cultural preferences of the country they operate in. This involves conducting a thorough marketing research of the country the business desires to expand in. (Brady, 2011) Competition Level Foreign markets always pose more complex and dynamic competition risks. Porter 5 force model can help to understand the level and type of competition better. Whereas it is less in domestic marketing
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Market Intelligence: Entering international markets require having the intelligence to understand the working of the new market, the direct rival and how do you make an entry? These are requisite to make a good start. (Burgel, 2000) Politics, Government and Legal Systems The business need to comply with the laws of the host country and the governmental regulation. Trade in a country where the political system is disturbed is not feasible. Business is subject to international laws and trade agreements. Boots supplies its products to both businesses as well as customers.The pharmaceutical products are bought by hospitals , drug houses and supplied to 20 countries as well. Boot when supplying to the other countries has to d analyse the cultural preferences of the country it is supplying the products in. There is always threat of rivals more in foreign markets where Boots is trying to gain customer cofidence.
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