Chapter-01

Benefits Nike Reebok New balance

www.nike.com www.reebok.com www.newbalance.com
Product benefits √ √ √

Retail locator √ √ √

Non product √ √ √
Information
Multiple Language √ √ √

Multiple targets: √ √ √
gender
Multiple targets: age √ √ √

Multiple targets: √ √ √
different sports
Social marketing √ √ √
concept
Customer feedback √ √ √

Fun to surf? × × ×
For Discussion
1. Of the benefits listed above which three do you think are the most important?
Refund/Exchange
We hope that you are happy with your purchase but if you would like to return your purchase for
a refund or size exchange, please contact us toll free on 1300 440 134 or email us
at ecustomerservice@nike.com stating your name, delivery address and order details . You
will be provided with an Exchange / Refund form and further details will be emailed to
you in relation to sending your product back.

Returns Policy & Process

We take great pride in our reputation for quality, and if for any reason you are dissatisfied with
your purchase, we will assist you with an exchange or refund.
Items must be returned within 14 days of original dispatch date in a resalable condition (unworn,
unwashed, with the tags still attached). The Nike exchange/return form must be included with the
item when returned. We recommend you utilize registered post as Nike does not take
responsibility for items not received if a customer attempts to send an item to Nike via non
registered post. Please allow 10 days from the day you return your product for your account to be
credited or your exchange product to be redelivered.

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2. Overall which site best embodies the marketing concept? Why?
Nike Selling Concept or Marketing Concept?
Nike I think has mastered the art of both concepts. They have done great at supplying a better
product then most by listening to their customers needs and wants. At the same time they have
blasted our lives with sports stars, movies, clothes, commercials, and radio.
Nike has made themselves a part of all American lives. They at this point probably don't have to
worry to much about the selling concept because they have done so well with making such a
good product, but the selling concept will always be a huge part of how they do business because
with sports their product and competitors products are always going to be in the spotlight.
3. Suggest one or more customer benefits, not listed above, that the “best” site contains.
Benefits of Adidas
Adidas shoes and clothes are some of the best in the industry today. It has been a very long time
since Adidas started producing different kinds of shoes such as sneakers and running shoes and
many others. They have a wide selection of clothes and shoes that can be worn by both men and
women. The following are benefits of Adidas.
1. Benefits athletes
Most athletes prefer Adidas shoes over other shoe brands due to the numerous benefits they get
from using them. In fact, running shoes made by Adidas are some of the most beneficial ones
that a professional runner can have. The shoes are produced from suede material to make certain
that they are soft and light, which is an essential criteria for running shoes.
2. Stylish shoes
Not only are shoes produced by Adidas useful, but they are also trendy and stylish. The
distinctive mixture of different colors with silver is quite appealing. Shoes are produced with
great color combination, with the stripes being popular amongst young people. Adidas sneakers
as well as running shoes can be accessed in different vibrant colors such as orange, blue and red
among others.
3. Great clothing line
Making certain that you are properly clothed with the correct shoes and clothes is an essential
aspect of being successful and active in sports. Adidas has a popular clothing line that offers
products ranging from warm-up clothes to soccer gear. Adidas workout clothing enables the user
to sweat easily while offering protection from rain as well as other weather situations. Workout
gear is also suitable in other places apart from only the gym. For instance, Adidas basketball
jerseys make an excellent gift for basketball fans. Other accessories made by Adidas include hats
and bags among others.

Adidas also has certain shortcomings including that some of their products are very highly priced
and thus unaffordable by most people.

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 Chapter-02
Amazon Barnes & Noble

Mission statement √ √

Target customer √ √

Market position √ √

Industry position √ √

Product: number of books √ √

Price: general strategy √ ×

For Discussion:
1. What will be the cool and catchy name for your online book company?
Answer:
My online book company cool and catchy name “kothakoli”. It's never too early to start making
a positive impression on customers for my online used book store. When I write my business
plan I want to dream up a catchy name that easily rolls off my tongue that's appealing to buyers.
However, selecting a clever name doesn't automatically mean you're going to start making easy
money online right away.

But having a company name that's great eye candy may be just the edge I need to attract the best
used book buyers and clinch a sale if all other factors are equal. There are companies that pay
hundreds of thousands of dollars to marketing firms to come up with a catch name and spiffy
logo design. Shouldn't small sellers spend a reasonable amount of time thinking about a decent
name when contemplating their online home based business ideas?

2. What is your company’s mission statement?

To continue to offer quality products and services using the best technology available and at a
reasonable price. This results in highly loyal customers, while maintaining shareholders interest
and company profits in mind. We also want to expand geographically, increasing the number of
customers and to keep improving our main competitive advantage - infrastructure. By working
hard and having fun we seek to offer the best working environment to our employees, promoting
career opportunities, and to increase our responsibility towards environment and the society.

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3. Who are your target customers: will you compete head on with the big guys or select a
special target market?
Customers of Target no longer will be allowed to research products on Kothakoli.com site, the
online retail giant announced today.
Kothakoli’s surprising move comes in apparent response to Target’s recent decision to stop
selling kothakoli online books. In January, Target had written a letter to vendors warning that
they wouldn’t allow Kothakoli to use Target stores as a showroom for online retailers. That letter
followed Kothakoli’s offer last December to give shoppers a 5% price cut on books.

“People are always searching for books on Kothakoli.com, then not buying them,” Kothakoli
CEO Rashed said in a statement. “We think they’re just using Kothakoli to collects books. We
may be the most customer-centric company in the world, but we can’t afford to offer good prices
if people keep using our computing cycles without buying from us.”

It wasn’t clear how Kothakoli would identify Target customers visiting Kothakoli. Kothakoli
wouldn’t comment, but insiders said the company would analyze typical Target customer
characteristics such as a tendency to be a woman who has children or is pregnant. Target said it
would work with the Electronic Frontier Foundation to enact legislation barring online retailers
from tracking customers in the same way Target does.

Target Market
Most business plans cover both the existing size and the anticipated growth rate of the market
they are targeting. For example, a business plan for an online discount travel service might point
out that travel is the most successful segment of the online industry, and that despite the rapid
demise of many dot-com businesses, analysts continue to forecast substantial growth in online
travel bookings, particularly as a weak North American economy prompts travelers to search for
discounted options. Business plans also quite often include descriptions of potential customers,
including their gender, age, level of education, marital status, how they make purchases, and the
reasons behind those purchases.

Discussions of target market also provide information on the history of the market, as well as
various trends within the market. While e-commerce entrepreneurs planning to target an
emerging market might be unable to produce historical data, they might be able to make
comparisons with related markets. Although Kothakoli.com founder Rashed was unable to
analyze the online consumer book industry—which for all practical purposes did not exist prior
to Kothakoli's launch—while creating his business plan, he was able to examine the traditional
book industry.

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4. What will be your market position? Industry Position?
Kothakoli.com’s market position as defined by a recent Fortune 780 ranking was 540.....was
formerly 432.
Yet in terms of book sales related services like a blog for unpublished authors called gather,
which includes a blog, and membership by anyone who wields a pen, in these areas particularly,
they seem to have the market.

5. What products will you carry: for more books, specialized books, other products?
Sometimes at the grocery store in which I work customers ask us: I was just wondering if you
carried this product. How might that be in India, to carry a product? Carry, not in the sense of to
hold in your hands in bring to another location, but more as in: to have a product.

Some stories books carry specialized from the customers. Every customer easy buy won your
choice books.

6. What will be your general pricing strategy: above, below, or the same as the
competition?
Kothakoli.com yesterday reported its first profit outside of the fourth quarter, which includes the
holiday season, as its strategy to reignite growth with lower prices continues to pay off.
Kothakoli, which some investors wrote off as being on the brink of insolvency a few years ago,
is now generating cash at a steady clip. Its low prices and increasing selection of goods from
other merchants have accelerated its growth in North America. Its sales are still growing rapidly
in Europe and Japan, but the pace of growth is slowing overseas, largely as a result of increased
price- cutting and offers of free shipping in many countries.
For the third quarter, the company earned $15.6 million, or 4 cents a share, in contrast to a loss of
$35.1 million, or 9 cents a share, in the quarter a year earlier. Its sales increased 33 percent, to
$1.13 billion.
Using the company's pro forma measure, which excludes some noncash items, Kothakoli earned
11 cents a share, a penny more than analysts had expected.

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 Chapter-03
 Explain the Factors in the Microenvironment & Macroenvironment?
Marketing Environment
The actors and forces outside marketing that affect marketing management’s ability to build and
maintain successful relationships with target customers.
Includes:
Microenvironment - forces close to the company that affects its ability to serve its customers.
Macro environment - larger societal forces that affect the whole microenvironment.

Micro environment
The actors close to the company that affects its ability to serve its customer- the company,
supplies, marketing, intermediaries, customer markets, competitors and publics.
The important micro environmental factors are:
 The Company
 Supplies
 Marketing
 Intermediaries
 Customers
 Competitors’
 Publics

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The Company
In designing marketing plans, marketing management takes other company groups into account-
groups such as top management, finance, research and development (R&D), purchasing,
operations, and accounting. All these interrelated groups from the internal environment. Top
management sets the company’s mission, objectives, broad strategies, and policies. Marketing
managers make decisions within the strategies and plans made by top management. Marketing
managers must work closely with other company departments. Other departments have an
impact on the marketing department’s plans and actions. And under the marketing concept, all of
these functions must “think consumer.” They should work in harmony to provide superior
customer value and satisfaction.

Suppliers
Suppliers form an important link in the company’s overall customer value delivery system. They
provide the resources needed by the company to product its goods and services. Supplier
problems can seriously affect marketing. Marketing managers must watch supply availability
supply shortages or delays, labor strikes, and other events can cost sales in the short run and
damage customer satisfaction in the long run. Marketing managers also monitor the price trends
of their key inputs. Rising supply costs may force price increases that can harm the company’s
sales volume.

Marketing Intermediaries
Firms that help the company to promote, sell, and distribute its goods to final buyers; they
include resellers, physical distribution firms, marketing service agencies, and financial
intermediaries.

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Customers
The company needs to study five types of customer markets closely. Consumer markets consist
of individuals and households that buy goods and services for personal consumption. Business
markets buy goods and services for further processing or for use in their production process,
whereas reseller markets buy goods and services to resell at a profit. Government markets are
made up of government agencies that buy goods and services to produce that need them finally,
international markets consist of these buyers in other countries, including consumers, producers,
resellers and governments. Each market type has special characteristics that call for careful study
by the seller.

Competitors
The marketing concept states that to be successful, a company must provide greater customer
value and satisfaction than its competitors do. Thus marketers must do more than simply adapt to
the needs of target consumers. They also must gain strategic advantage by positioning their
offerings strongly against competitors offering in the minds of consumers. No single competitive
marketing strategy is best for all companies. Each firm should consider its own size and industry
position compared to those of its competitors. Large firms with dominant positions in an industry
can use certain strategies that smaller firms cannot afford.

Publics
The company’s marketing environment also includes various publics. Publics are any group that
has an actual or potential in or impact on an organization’s ability to achieve its objectives. We
can identify seven types of publics.

Financial Publics
Your relationships with Financial Publics are extremely important. These relationships directly
influence your ability to obtain funding for your business. Financial Publics typically include
banks, investment houses and stock holders. How these groups perceive you will directly affect
your ability to get loans, favorable payment terms, and whether or not other Publics choose to do
business with you. For example, if a brokerage perceives that you are having issues internally, or
your products have deficiencies, then it may give your stock a low rating. If that happens, people
may sell your stock, your market valuation will decrease, and your customers may start to buy
less of your products and services.

Media Publics
Media Publics can be extremely valuable, or they can be a thorn in your side. Media Publics
typically carry news, features and editorial opinions, delivering them to your customers and other
Publics. They include newspapers, blogs, magazines (print and digital), radio (broadcast and
internet) and television outlets. You can carry out your "relationship" with Media Publics via
VNR's, PR media releases, open’s, interviews, or open invitations to review your products and
services. Do not be afraid to make friends and connect with people in the media.
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Government Publics
Take note: Management MUST take governmental developments into account. You should
always keep an eye on the current state of any laws and regulations that effect the production of
your products, the day-to-day operation of your business, or the methods you can use to sell your
products and services. Marketers must often consult with government officials, their lawyers,
and sometimes lobbyists. Get to know your local government, and keep tabs on what your
government officials are doing.

Citizen-Action Publics
The decisions you make will sometimes be questioned by citizens, consumer organizations,
environmental groups, minority groups and others. Your PR department can help you stay in
touch with these groups. It can keep you abreast of any concerns or problems that arise. Make it
your mission to get to know the citizen groups that may affect your business and your marketing
practices. Make it a point to have a friendly relationship with any of their representatives.

Local Publics
Local Publics typically include neighborhood residents and community organizations.
Businesses will usually appoint a community relations officer to meet with the community,
answer questions and contribute to worthwhile causes.

General Publics
A business needs to be concerned with the general public's attitude and perception towards its
products and activities in the marketplace. The perception of the business, it's brands, products
and services in the public directly affect consumers buying habits. Keep an eye on Twitter feeds
and Face Book posts. You will be able to get a very real sense of the general public's perception
of you in the marketplace.

Internal Publics
Internal Publics are groups of people inside your own business. These groups can consist of
employees, managers, volunteers, and the board of directors. Businesses typically use
newsletters, memos, company meetings, intranets and other means to motivate and educate their
internal publics. When your employees feel good working for you, when your board of directors
are happy with your success, when your internal communications send the right messages to
motivate, encourage, train, and edify your staff, this positive attitude spills over to external
publics, and helps to communicate your brand message in the marketplace.

Macroenvironment

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A business and its forces in its micro environment operate in larger macro environment of forces
that shape opportunities and pose threats to the business. It refers the major external and
uncontrollable factors that influence an organization's decision making, and affect its
performance and strategies. These factors include the economic factors; demographics; legal,
political, and social conditions; technological changes; and natural forces.
The important macroenvironmental factors are:
 Demographic Environment
 Economic Environment
 Natural Environment
 Technological Environment
 Political and Governmental Environment
 Socio-cultural Environment

Demographic Environment
Demographic factor include Size, growth rate, age composition, sex composition etc. of
population, Family size, Economic stratification of population, Educational level, Caste, religion
etc. All these demographic factors are relevant to business. These factors affect the demand for
goods and services. High population growth rate indicates an enormous increase in lab our
supply. Population with varied tastes, preferences, beliefs, temperaments etc. gives rise to
differing demand pattern and calls for different marketing strategies.

Economic Environment
Economic environment of business has reference to the board characteristics of the economic
system in which the business operates. The business sector has economic relation with the
government, capital market; household sector and global sector. These sectors together influence
the trends and structure of the economy. The form and functioning of the economy vary widely.

Natural Environment

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Environmental factors include the weather and climate change. Changes in temperature can
impact on many industries including farming, tourism and insurance. With major climate
changes occurring due to global warming and with greater environmental awareness this external
factor is becoming a significant issue for firms to consider. The growing desire to protect the
environment is having an impact on many industries such as the travel and transportation
industries (for example, more taxes being placed on air travel and the success of hybrid cars) and
the general move towards more environmentally friendly products and processes is affecting
demand patterns and creating business opportunities.

Technological Environment
In order to survive in today's competitive world, a business has to adopt technological changes
from time to time. New technologies create new products and new processes. Technology can
reduce costs, improve quality and lead to innovation. These developments can benefit consumers
as well as the organizations providing the products. MP3 players, computer games, online
gambling and high definition TVs are all new markets created by technological advances. Online
shopping, bar coding and computer aided design are all improvements to the way we do business
as a result of better technology.

Political and Governmental Environment

Political environment refers to the influence exerted by the three political institutions they are;
Legislature, Executive, Judiciary etc. The legislature decides on a particular course of action.
Government is the executive and its job is to implement whatever was decided by parliament.
The judiciary has ensure that both the legislature and executive function in public interest and
within the boundaries of constitution.

Socio-cultural Environment
Changes in social trends can impact on the demand for a firm's products and the availability and
willingness of individuals to work. Social class and caste of a person goes a long way in deciding
the business activities in relation to its production and marketing activities. Tradition, customs
and social attitudes have changed the attitude and beliefs of the persons which have their effect
on organizational environment. Class and caste are influencing the purchasing pattern. Socio-
cultural environment may include expectations of the society from business, attitudes of society
towards business and its management, views towards achievement of work, views towards
structure, responsibility and organizational positions, views towards customs, traditional and
conventional, class structure and lab our mobility and level of education.

Chapter- 05
 Explain the characteristics or factors that affect the consumer Behavior?

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Consumers Behavior
Consumer behavior refers to the selection, purchase and consumption of goods and services for
the satisfaction of their wants. There are different processes involved in the consumer behavior.
Initially the consumer tries to find what commodities he would like to consume, then he selects
only those commodities that promise greater utility. After selecting the commodities, the
consumer makes an estimate of the available money which he can spend. Lastly, the consumer
analyzes the prevailing prices of commodities and takes the decision about the commodities he
should consume. Meanwhile, there are various other factors influencing the purchases of
consumer such as social, cultural, personal and psychological. The explanation of these factors is
given below.

1. Cultural Factors
Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture,
and social class.

• Culture
Basically, culture is the part of every society and is the important cause of person wants and
behavior. The influence of culture on buying behavior varies from country to country therefore
marketers have to be very careful in analyzing the culture of different groups, regions or even
countries.

• Subculture
Each culture contains different subcultures such as religions, nationalities, geographic regions,
racial groups etc. Marketers can use these groups by segmenting the market into various small
portions. For example marketers can design products according to the needs of a particular
geographic group.

• Social Class
Every society possesses some form of social class which is important to the marketers because
the buying behavior of people in a given social class is similar. In this way marketing activities
could be tailored according to different social classes. Here we should note that social class is not
only determined by income but there are various other factors as well such as: wealth, education,
occupation etc.
2. Social Factors

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Social factors also impact the buying behavior of consumers. The important social factors are:
reference groups, family, role and status.

• Reference Groups
Reference groups have potential in forming a person attitude or behavior. The impact of
reference groups varies across products and brands. For example if the product is visible such as
dress, shoes, car etc then the influence of reference groups will be high. Reference groups also
include opinion leader (a person who influences other because of his special skill, knowledge or
other characteristics).

• Family
Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying
to find the roles and influence of the husband, wife and children. If the buying decision of a
particular product is influenced by wife then the marketers will try to target the women in their
advertisement. Here we should note that buying roles change with change in consumer lifestyles.

• Roles and Status

Each person possesses different roles and status in the society depending upon the groups, clubs,
family, organization etc. to which he belongs. For example a woman is working in an
organization as finance manager. Now she is playing two roles, one of finance manager and other
of mother. Therefore her buying decisions will be influenced by her role and status.
3. Personal Factors
Personal factors can also affect the consumer behavior. Some of the important personal factors
that influence the buying behavior are: lifestyle, economic situation, occupation, age, personality
and self concept.

• Age
Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that the
consumers change the purchase of goods and services with the passage of time. Family life-cycle
consists of different stages such young singles, married couples, unmarried couples etc which
help marketers to develop appropriate products for each stage.

• Occupation
The occupation of a person has significant impact on his buying behavior. For example a
marketing manager of an organization will try to purchase business suits, whereas a low level
worker in the same organization will purchase rugged work clothes.

 Economic Situation
Consumer economic situation has great influence on his buying behavior. If the income and
savings of a customer is high then he will purchase more expensive products. On the other hand,
a person with low income and savings will purchase inexpensive products.
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• Lifestyle
Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle
refers to the way a person lives in a society and is expressed by the things in his/her
surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole
pattern of acting and interacting in the world.

• Personality
Personality changes from person to person, time to time and place to place. Therefore it can
greatly influence the buying behavior of customers. Actually, Personality is not what one wears;
rather it is the totality of behavior of a man in different circumstances. It has different
characteristics such as: dominance, aggressiveness, self-confidence etc which can be useful to
determine the consumer behavior for particular product or service.
4. Psychological Factors
There are four important psychological factors affecting the consumer buying behavior. These
are: perception, motivation, learning, beliefs and attitudes.

• Motivation
The level of motivation also affects the buying behavior of customers. Every person has different
needs such as physiological needs, biological needs, social needs etc. The nature of the needs is
that, some of them are most pressing while others are least pressing. Therefore a need becomes a
motive when it is more pressing to direct the person to seek satisfaction.

• Perception
Selecting, organizing and interpreting information in a way to produce a meaningful experience
of the world is called perception. There are three different perceptual processes which are
selective attention, selective distortion and selective retention. In case of selective attention,
marketers try to attract the customer attention. Whereas, in case of selective distortion, customers
try to interpret the information in a way that will support what the customers already believe.
Similarly, in case of selective retention, marketers try to retain information that supports their
beliefs.

• Beliefs and Attitudes

Customer possesses specific belief and attitude towards various products. Since such beliefs and
attitudes make up brand image and affect consumer buying behavior therefore marketers are
interested in them. Marketers can change the beliefs and attitudes of customers by launching
special campaigns in this regard.
Chapter-07
1. What major variables have all three companies used to segment the sports drink
markets?

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 Major Segmentation Variables of PepsiCo
Segmentation Variables Data
Geographic
World Region or country Asia
Country Pakistan
Cities All major cities of Pakistan
Density Urban
Climate Hot and Dry
Demographic
Age 14-30
Gender Male, Female
Family size 1-2, 3-4, 5+
Family life cycle Married, Unmarried
Income Rs. 10,000+
Occupation From middle class to upper class
Education Schools, Colleges, University
Religion Major religion of Islam, Christianity and Hinduism
and others
Nationality Pakistani
Psychographic
Social Class Middle class, Upper class
Lifestyle Actualizes, Fulfilled, Believers, Achievers, Strivers,
Experience’s markers and Strugglers
Behavioral
Occasions Parties, Birthdays, sports and Regular Occasions
Benefits Quality, Taste
User status First time user
Loyalty Status Strong
Readiness Stage Aware, Interested

Major Segmentation Variables of Coca-Cola

Segmentation Variables Data
Geographic
World Region or country GMA, Luzon, Visayas, Mindanao
Country Filipino, American, Japanese
Cities All major cities
Density Urban, Suburban, Rural
Climate Hot and Dry

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Demographic
Age Under6, 6-11, 12-19, 20-34, 35-49
Gender Male, Female
Family size 1-2, 3-4, 5+
Family life cycle young/single, young/married/children
Income Under 10k, 11k, 41k-60k, 61k-100k
Occupation Managers, Proprietors & Clerical, Students
Education GS, Hs, College
Religion
Catholic, Protestant, Jewish

Race Asian, White, Black, Hispanic

Nationality Filipino, American, Japanese
Psychographic
Social Class lower lowers, upper lowers, working class, middle
class, upper middles, lower uppers, upper uppers
Lifestyle
Actualizes, Fulfilled, Believers, Achievers, Strivers,
Experience’s markers and Strugglers

Personality compulsive, gregarious, authoritarian, ambitious

Behavioral
Occasions Special occasion sports and Regular Occasions
Benefits Quality, service, economy
User status
Nonuser, ex-user, potential user, first-time user, regular
user

Usage rate Light user, medium user, heavy user

Loyalty Status none, medium, strong, absolute
Readiness Stage unaware, aware, informed, interested, desirous,
intending to buy

Major Segmentation Variables of Quaker Oats

Segmentation Variables Data
Geographic
World Region or country UK
Country Australia
Cities All major cities

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Density Urban, Suburban, Rural
Climate Hot and Dry
Demographic
Age Under6, 6-11, 12-19, 20-34, 35-49
Gender Male, Female
Family size 1-2, 3-4, 5+
Family life cycle young/single, young/married/children
Income Under $15,000+
Occupation Managers, Proprietors & Clerical, Students
Education Universities, GS, Hs, College
Religion
Catholic, Protestant, Jewish

Race Asian, White, Black, Hispanic

Nationality Filipino, American, Japanese
Psychographic
Social Class lower lowers, upper lowers, working class, middle
class, upper middles, lower uppers, upper uppers
Lifestyle
Actualizes, Fulfilled, Believers, Achievers, Strivers,
Experience’s markers and Strugglers

Personality compulsive, gregarious, authoritarian, ambitious

Behavioral
Occasions Special occasion sports and Regular Occasions
Benefits Quality, service, economy
User status
Nonuser, ex-user, potential user, first-time user, regular
user

Usage rate Light user, medium user, heavy user

Loyalty Status none, medium, strong, absolute
Readiness Stage unaware, aware, informed, interested, desirous,
intending to buy

2. What kinds of market coverage strategies have the three firms used?

Market coverage strategies of PepsiCo

A firm attempts to serve all customer groups with all the products they might need. Only very
large firms such as IBM (computer market), General Motors (vehicle market), and Coca-Cola
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(nonalcoholic beverage market) can undertake a full market coverage strategy. Large firms can
cover a whole market in two broad ways: through undifferentiated marketing or differentiated
marketing.

In undifferentiated marketing, the firm ignores segment difference and goes after the whole
market with one offer. It designs a product and a marketing program that will appeal to the
broader number of buyers. It relies on mass distribution and advertising. It aims to endow the
product with a superior image. Undifferentiated marketing is the marketing counterpart to
standardization and mass production in manufacturing. The narrow product line keeps down
costs of research and development production, inventory, transportation, marketing research,
advertising, and product management. The undifferentiated advertising program keeps down
advertising costs. Presumably, the company can turn its lower costs into lower prices to win the
price sensitive segment of the market.
In differentiated marketing, the firm operates in several market segment and designs different
products for each segment. Cosmetics firm Estee Lauder markets brands that appeal to women
(and men) of different tastes: The flagship brand, the original Estee Lauder, appeals to older
consumers; Clinique caters to middle aged women; MAC to youthful hipsters; Aveda to
aromatherapy enthusiasts; and Origins to eco-conscious consumers who want cosmetics made
from natural ingredients.

Market coverage strategies of Coca-Cola

Mass or undifferentiated marketing refers to the market coverage strategy that enterprises
determine to neglect the market segment differences and use one product to pursue the whole
market (Tyagi & Kumar, 2004). The company only produces a product. The firm will rely on
extensive distribution and advertising in order to broadcast its product and appeal a large
majority of consumers’ attention.
The biggest strength of undifferentiated marketing is to save cost (Sandhusen, 2008). Coca-Cola
can make full use of the single product line to produce enough products in order to meet the
consumers’ need. Only in this way can Coca-Cola reduce the cost of production, inventory and
transportation. Moreover, this strategy does not pay more attention to market segmentation. So
companies not only do not spend capital in researching the but also establish special
organizations to manage and plan market segmentation. So this strategy is beneficial for
companied to cut down on a lot of middle links and intermediaries. Only in this way can
enterprises reduce the cost of marketing research and the cost of management. However, the
strategy is not perfect. With the rapid development of society, the strategy’s weakness exposed
day by day. As consumers’ actual situations are different, consumers have different demands for
products. But, because mass marketing ignores the differences of market demands, it cannot
meet the diversified demands of the consumers. Moreover, consumers’ needs are not machine-
passable. Their needs will change with the change of incomes and time. It is impossible that one
product is accepted by consumers in a long time. Because of Coca-Cola’s changeless taste, it will
let some consumers lose the desire to buy Coca-Cola. This strategy is easy to let Coca-Cola’s

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competitors find its breaking point and make the Coca-Cola lose some consumers. It will let
Cola-Coca fail in intense competitions.

Market coverage strategies of Quaker Oats

In 1972, Snapple had a modest beginning in Brooklyn, New York. Initially, Snapple beverages
were sold to health-food stores and Snapple became successful by launching innovative
products, based on fruit juices and teas, into the beverage market. Snapple was a brash
newcomer which won over New Yorkers and soon the rest of the US. Homemade freshness and
endearing amateurism was a part of the Snapple brand. Some brands just want to have fun and
from birth Snapple was one of them. In 1992, Boston-based Thomas H. Lee Co. purchased
Snapple from the original owners for $27.9 million. Snapple's distribution channels and
promotion were unconventional and it had very little supermarket coverage. Instead, it flowed
through the so-called cold channel: small distributors serving hundreds of thousands of lunch
counters and delis, which sold single-serving refrigerated beverages consumed on the premises.
Small distributors were, they aggregated into a mighty marketing force.

Quaker CEO William D. Smithburg had bought Stokely-Van Camp in 1983, mainly for its
Gatorade, then a $90 million sports drink. Even though he drew criticism, Smithburg turned
Gatorade into a billion dollar brand. Quaker Oats bought Snapple in 1993 for an extravagant
$1.7 billion dollars even though industry leaders thought it was only worth $700 million.
Smithburg's strategy was to use the strength of Snapple's distributors in the cold channel to help
Gatorade and use Gatorade's strength in the supermarkets to help Snapple. Quaker executives
hoped that Snapple would provide the same type of benefits as their highly successful Gatorade
brand had done in previous years. They expected to achieve these benefits by applying the
marketing expertise used for Gatorade, but they failed to understand some important differences
in the markets, distribution channels, and customer attitudes for the two types of beverages.

3. Compare the positioning of the three sports drinks. How well do their respective
marketing efforts support the chosen positioning?
Positioning of PepsiCo
PepsiCo is positioning All Sport as the body quencher. Its ad campaign, sporting the slogan "The
game will never be the same," touts All Sport as a more "evolved" drink than the more traditional
Gatorade. Spots show athletes drinking All Sport in the future. One ad shows well-known
athletes such as Jerry Rice and Steve Young drinking All Sport during the half time of "Global
Bowl LVXIII."
Meanwhile Gatorade has not been idle. It has launched new flavors, packaging changes such as
the one-gallon "big-grip" bottle and four packs, and beefed up advertising with memorable and
popular Michael Jordan advertisements. Gatorade is positioned as the beverage for "active
thirsts."

Positioning of Coca-Cola

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The Coca-Cola Company, which controls more than half of the global market in non-alcoholic
drinks, wants to strengthen its position in Poland, the Polish daily Dziennik reported last week.
The company strategy for 2007 includes becoming one of the top two brands in all segments of
the Polish beverage market. Coca-Cola currently leads in 3 of 6 categories, those being:
carbonated soft drinks, sports drinks, energy drinks, tea/coffee, juices and nectars, and waters.

Everyone knows Coca-Cola as one of the most famous brand names in the world. In the last
BrandZ Top 100 Most Powerful Brands ranking, Coca-Cola took fourth place with a brand value
of $44.134 bin. Raw data for the study is collected annually through interviews with
professionals and customers, who are asked to evaluate brands they actually purchase from
product categories. This results in a valuable market survey, which indicates product
characteristics important to the consumer.

However, the findings of the BrandZ 100 refer to global rankings, while in Poland the world?s
leading soft drink concern has yet to win a top position in half of the non-alcoholic drink
categories.

The other three market segments –juices and nectars, energy drinks and non-carbonated mineral
waters — are going to be the main field of competition for the company this year. Intensifying
the competition, Restaurator magazine, a Polish Food and Beverage Service trade channel
publication, supported Coca-Cola HBC Polska?s growth position by awarding the company ?
Partner of the Year 2006? in the Drinks, Juices and Waters category as indicated by survey
results.

Positioning of Quaker Oats

Many products are identified by particular brand names, like Levi’s (instead of jeans), Kleenex
(instead of tissue), or Band-Aid (instead of adhesive bandages). A brand distinguishes “the
goods of one producer from those of another” (Kotler & Keller, 2009). A brand identifies the
manufacturer of a product and symbolizes a particular level of quality. Some brands can
represent many different products, but to the consumer they are all believed to be of the same
quality. An interview was conducted in order to understand how branding influences consumer
behavior and decision making.
A male subject, 54 years of age, who does not routinely shop or particularly even like the task,
was interviewed about his brand loyalty to breakfast cereal. The first thing that he mentioned
was his loyalty to Quaker oatmeal, as opposed to another name or store brand of oatmeal. He
described himself as very loyal to the brand, to the point of exclusivity, due to the historical
reliability and quality of the brand. He is very familiar with the look of the container and the
label, making it easy for him to find the product in almost any store. Many other manufacturers
of oatmeal have copied the shape of the Quaker Oatmeal container, but none use the colors and
logo associated with Quaker.

Marketing efforts support the chosen positioning

With all these marketing efforts, have competitors made a dent in Gatorade's domination of the
market? Not by much. By mid-1997, Gatorade's market share had slipped only slightly to78.9
percent while PowerAde's rose by 0.9 percent to 10.2 percent and Pepsi's All Sport had stabilized
at 8.1 percent. Although Gatorade might be tempted to dismiss these competitor gains as minor,

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it should note that PowerAde and All Sport are now beginning to eat into Gatorade's share.
Previously, the two challengers had taken sales mostly from small manufacturers and 10K.By
1997, however, those opportunities were exhausted, and the competitors were beginning to take
share directly from Gatorade. This could signal future problems for the Quaker brand. Coca-Cola
and PepsiCo have deep pockets, and Quaker Oats will be hard pressed to spend as much as either
major competitor to protect its market shares. However, because Gatorade is its major brand,
Quaker may be more willing to fight the encroachment of rivals. From Coca-Cola's and
PepsiCo's viewpoint, sports drink sales are still relatively small and market share gains are
exceedingly costly. If Gatorade can develop creative campaigns in the future, it may be able to
stave off the challenges of PowerAde and All Sport.

4. What are the competitive advantages and disadvantages of each of the firms?
In response to the international competitive threats, posed by Coca-Cola and PepsiCo, Quaker
Oats has reorganized. It has formed a separate division to market Gatorade worldwide. In
addition, Gatorade is pursuing partnerships with other companies to expand worldwide
distribution. But Gatorade is a new brand and an unknown firm outside the United States. In
addition, along with Coca-Cola and PepsiCo products, it will face other sports drink competitors
in the international market, such as Lucozade (distributed by SmithKline Beecham in the United
Kingdom).

5. Evaluate Gatorade’s strategy for the international market. How might Gatorade be
marketed successfully internationally?
As the battle for global markets heats up, however, Coca-Cola has a major advantage with its
large share of the international soft drink market and its extensive international marketing
expertise. Even PepsiCo, with its switch to blue Pepsi, is picking up share internationally.
According to one industry analyst, "International sports franchises and other potential partners
are more likely to want to team up with a `primo beverage player' with several brands than with a
company with one brand." With satellite transmissions, fans in England and Japan are watching
American football and baseball and Americans now have access to soccer and cricket. This
creates the potential for international sports markets and creates international celebrity status for
sports heroes. While Gatorade is strongly associated with American football and basketball, the
sport with the greatest worldwide following is soccer. If Coca-Cola or PepsiCo could grab a
major soccer sponsorship, or even a baseball sponsorship (another international sport), they
would gain a significant lead in the international market.

Chapter-08
KLM Royal Dutch British airways Lufthansa
Airlines www.british- www.lufthansa.com
www.klm.nl airways.com
Many destinations? √ √ √

Attractive frequent flyer √ √ √

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program?
Other service features √ √ √

Evidence of service quality √ √ √

Competitive position √ √ √

Method of customer × × ×
metrication at site
For Discussion
1. How would you classify airlines using the consumer product categories: convenience, shopping,
specialty, or unsought products?
Product is the most important component in an organization. Without a product there is no place,
no price, no promotion, and no business. Product is anything that can be offered to a market to
satisfy a want or a need. It is the core ingredient of the marketing mix and is everything
favorable and unfavorable, tangible and intangible received in the exchange of an idea, service or
good (Kotler 11th edition, 2003). British Airways is a business offering service products, flights
across destinations, in the transportation industry. Service is an intangible product involving a
deed, performance or effort that cannot be stored or physically processed, were customers
directly participate in the production process.

Product strategy is therefore very vital for the organization's success. It needs to be developed
and manage very careful in order to be successful. British Airways product strategy includes
flight services, quality of flights, various destinations across Europe and the world, executive
class, business class, speed, security, support facilities and years of experience. It provides the
basic product and various alternatives to satisfy all the different customer needs.
2. Which airline brand name best conveys a quality image?
British Airways carries a strong brand name and image. It is the largest air line and flag carrier of
the United Kingdom and for sure the size and scale of British Airways put satin competitive
advantage over competitors such as Virgin Atlantic Airlines which is the 2 nd largest long haul
airline in the United Kingdom. Virgin Atlantic is a successful competitor and has also an
established and highly recognizable brand name and brand image. Still, BA is an older and a
bigger organization and it is still leading ahead of Virgin Atlantic in the airline industry. BA
‟strong key messages are consistency, reliability and quality, and the organization enjoys a good
reputation and is renowned for the very high standards of customer service and efficiency.

Virgin Atlantic differentiation is based on 3strong characteristics: value, service and price, and it
were recently was voted No 1 for having the best online reputation (Creative Match, Undated).
Virgin was also voted as the most child-friendly airline, with BA ranking in the 2 nd place (Just-
The Flight, Undated). It’s interesting how British airways began building brand equity. In
creating brand equity British Airways began using musical theme predominant talon British

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Airways advertisings "The Flower Duet" by Leo Delibes. This and the slogan "The World's
Favorite Airline" were introduced in 1989 with the launch of the iconic "Face" advertisement.
3. How does each airline differentiate itself from the others: KLM? British Airways?
Lufthansa?
KLM Airlines
A special card
You will have a single, shared card number for both your Flying Blue Petroleum and Flying Blue
cards.
Advantages at the airport
 Priority check-in
At the main AF oil routes destinations, check-in at special Petroleum Club check-in counters
At CDG2, within the High Contribution zones (CDG2C Area 3, CDG2F area 11 and CDG2E
area 5)
All around the world: at Air France L´Espace Affaires check-in counters
At KLM oil destinations at Business Class check-in counters
At Schiphol at KLM Business Class check-in counters
 Priority access to high contribution transfer desks
How to benefit of these advantages at the airport?
Meals and drinks are offered in exchange of vouchers "Flying Blue Petroleum Service" (PCS),
for the Day-use room, a voucher "Flying Blue Petroleum Hebergement" (PCSH).
The vouchers are given to customer of presentation of their Flying Blue Petroleum card and their
flight coupon:
 At Paris-Charles de Gaulle : at connecting desks at CDG2
 At Amsterdam-Schiphol : at KLM Crown Lounge
Special advantages at Paris-Charles de Gaulle and at Amsterdam-Schiphol
 For all Flying Blue Petroleum members
Access to the private Flying Blue Petroleum lounge at Pullman Paris Charles de Gaulle
Airport (showers, refreshments, cable TV, modem connections, international press, and
rest area)
At Schiphol: Access to KLM Crown lounge
 For Flying Blue Petroleum members on connection between two AF and/or KL flights
Less than 3 hours: Refreshment is offered
Between 3 and 6 hours: a meal is offered in our partner restaurants
Over 6 hours: a second meal is offered + at CDG only day- use accommodation in a 4
star hotel at the airport.

Security
In terms of security, KLM also does everything in its power to utilize reliable equipment and
procedures, in combination with professional deployment of and attention for our employees.
Programs

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We have implemented a wide range of security programs, which include compulsory and
voluntary measures to protect our customers, staff, and property, based on a comprehensive risk
assessment.
This includes regular aircraft checks and searches, random checks of staff, 100% baggage
screening and reconciliation, cargo screening, reinforced cockpit doors, and the deployment of
specially-trained security agents on specific flights.
Investing in security
We invest in a wide variety of innovative systems to promote both security and travel
convenience. For instance, we worked together with Amsterdam Airport Schiphol to introduce an
improved biometric scanning system.

British Airlines
Your British Airways Credit Card offers a world of opportunities with more Avios and more
reward flights.
Earn Rewards
Wherever you go, bring your British Airways Credit Card along for all your purchases. With up
to 2.5 Avios for every $1 you spend, it's the fastest way to earn Avios towards your next reward
flight. Plus, you can earn special bonuses along the way like redemption vouchers for a
companion. A world of opportunities waits.
Redeem Rewards
From flying to your dream destination to enjoying your next flight in greater comfort – it's easy
to get the most from your Avios. Spend your Avios for a reward flight or upgrade on British
Airways or flights with any of our partner airlines. You can even purchase those few additional
Avios you need to get your reward flight quicker.
Security
At British Airways the safety and security of our customers and staff is our highest priority.
For many years, we have been a leader in the aviation industry on security matters, and you can
be reassured that we have in place some of the most stringent security measures in the industry.
We continuously work closely with governments and relevant authorities around the world to
monitor and implement the security measures we have in place, and our policy is in full
compliance with all regulatory requirements.

As one of the world’s largest international airlines we have experience in meeting this task in
many destinations around the world. We take our commitment to delivering a safe and secure
operation seriously indeed, and would not fly to a location unless we felt it was safe and secure
to do so.

British Airways security measures

We spend more than £100 million a year on security measures, which include:
 Screening of flying crew and ground staff
 Participation with government and airport screening of passengers and cabin baggage

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  Extra hand baggage and customer searches at the gat
 Baggage and passenger reconciliation
 Security controls for cargo, courier material, mail and catering
 Searches and guarding of aircraft
 A team of trained security auditors who carry out security checks worldwide
 CCTV systems on all of our aircraft so the pilot can see who is outside the cabin door
 100% x-ray screening of checked baggage worldwide
 Installation of reinforced, bulletproof cockpit doors on all our fleet
 Security training for all airport and flying staff
 Background and criminal checks of all flying and ground staff
In addition to these visible signs, there is also a large amount of covert security in place to
maintain our customers' safety. British Airways, the BAA and the Metropolitan Police meet
regularly to confer on matters of security to ensure that the safety and security of our customers
and staff is paramount at all times.
Lufthansa Airlines
Transit Visa Regulations for Indian Residents
In order to ensure a smooth and hassle free transit through two Schengen States or when booking
a Journey from India to USA via Canada, please pay attention to the transit visa regulations.

1. Indian passport holders in possession of a valid visa to USA and traveling to USA via Canada
Require a Canadian Transit Visa.
Routing Example: Bangalore - Frankfurt -Toronto- Newark - Frankfurt - Bangalore

In the above routing, the Indian resident would require a Candian Transit Visa even if there is no
stopover in Toronto.
2. Indian passport holders in possession of a valid visa to their final destination, but transiting via
two Schengen States, require a valid Schengen Visa.
Routing Example : Chennai- Frankfurt- Paris -Chicago- Frankfurt- Chennai or Chennai
Frankfurt- Munich -Chicago- Frankfurt- Chennai
Transit Visa a requirement also applies if one of the transiting airports is Vienna or Zurich. E.g.
New Delhi - Vienna - Frankfurt/Munich/Dusseldorf - USA/Canada
In the above routing, the Indian resident would require a Schengen Visa even if there no stopover
in Frankfurt or Paris or Munich.
3. Indian nationals can Transit without Visa via FRA or MUC if holding a valid visa for the
destination and a valid Visa for any of the following countries
Bulgaria, Canada, Cyprus, Ireland, Japan, Liechtenstein, Romania, UK and USA (the approval
notice I-797 is not valid document for visa free airport transit).
For further information on visa regulations, please contact the respective Embassy or click on the
links below:

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Security
The strategic importance of security measures within Lufthansa Cargo is integral to our business
and core competencies. The following overview will outline our security approach and the
developments of air cargo security in the industry. Over the course of the last ten years, security
regulatory requirements have increased tenfold and continue to place pressure on the industry
supply chain.

Lufthansa Cargo has been recognized in the industry as being the leader in all matters relating to
air cargo safety and security. Our security concept is led by a rigorous risk management
program. This concept adjusts our approach against risk modeling and sets benchmarks beyond
regulatory requirements. Rapid, flexible logistics are essential to global competition – in
particular when shipping high value goods. Security is therefore the core component of all
Lufthansa Cargo processes and is a key characteristic of quality in a seamless transport process.

Lufthansa Cargo offers the highest standards of security at all its stations. These security
Standards are expanded at our “security hubs” of Frankfurt and Munich and at various “premium
security stations” throughout the world.
4. If Lufthansa decided to expand by developing a tourist hotel, would you recommend a
brand extension or a new brand? Justify your choice,
Passenger transportation is the core business of the Lufthansa Group. This business segment
includes Lufthansa passenger airlines (incl. Lufthansa Regional and Lufthansa Italia), Austrian
Airlines, British Midland (bmi), SWISS and German wings as well as the equity stakes in
Brussels Airlines, JetBlue and Sun Express.

The objective in this business segment is to strengthen Lufthansa’s position as a leading

European premium carrier offering services in a global network. Lufthansa serves all major
traffic flows into, out of and across Europe. To realize its goal, Lufthansa rests its growth
strategy on three pillars.

For one, Lufthansa is expanding its short and long-haul network in the medium term through
organic growth. In the interest of cost efficiency, that expansion is achieved primarily through the
hubs in Frankfurt, Munich, Zurich, Vienna and Brussels.

5. Which airline would you choose for your European travel? Why?
Customer satisfaction
Customer satisfaction and the opinion of all of our stakeholders are key to defining our success.
British Airways needs to understand its stakeholders - customers, opinion leaders and employees
- to better inform business decisions. Therefore, in-depth and thorough measurement and
research are in place to provide this important information.

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Over the past year customer insight has been used to support a range of product and service initiatives.
These have included:

 Evaluation of more cost-effective meal options.

 Recommendation of improvements to service routines on very long flights.
 Evaluation of technical developments to provide customers with greater flexibility and
control when making their booking and checking-in.
 Evaluation of different types of on-board seating configuration (seat type and amount of
legroom) in addressing the needs of short haul customers.

 Evaluation of the success of providing customized meal service options to non-English

speaking customers on key routes.
 Evaluation of the success of Customer Relations' service recovery across different channels
and methods of complaint handling.

The insight has been used by many departments in British Airways to inform business
decisions.

Reference
www.google.com
www.coca-cola.com
www.pepsico.com
www.quakeroats.com
www.nike.com
www.reebok.com
www.newbalance.com
www.klm.nl
www.british-airways.com
www.lufthansa.com
www.amazon.com

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