Assignment 1

Marketing: MAKT5112

Neil Ludick
ST10043784
Contents
QUESTION ONE:....................................................................................................................................2
QUESTION TWO:...................................................................................................................................3
QUESTION THREE:.................................................................................................................................4
QUESTION FOUR:..................................................................................................................................5
REFERENCE LIST:...................................................................................................................................6
QUESTION ONE:

1.1.1) The business name is “Voss Vodka”, this is an alcoholic beverage it’s my own idea
stemming from the water brand Voss water but now I’m turning it into an alcoholic
brand called Voss Vodka. I feel like the double “V” s in both words can create a lovely
logo that is aesthetically pleasing.
1.1.2) The main product is an alcoholic beverage and with the high demand of alcohol in
South Africa and internationally. I’ve created this beverage to satisfy the needs of
consumers by providing an acceptable amount of alcohol percentage which is 12%.
People complain about how strong vodka can be but with this product you’ll
experience the strong hit with an amazing fruity taste.
1.1.3) Voss Vodka has been through multiple taste tests and top tier distributor companies
are willingly to partner up with our brand for the long term. It’s a beverage to enjoy
a lovely calm night at your house and compliments and passes the vibe check with
parties as well. As with us being a new business a promotion of the first 300 bottles
is cut down to 50% to customers and 20% to liquor stores that are willing to sell my
product. We will keep track of who exactly has purchased our product to keep them
updated with new products or promotions coming.
1.1.4) Our business targets every other gender and we specifically do not discriminate with
this side of the community. The age group is obviously from the legal age for alcohol
being 18 to 30s. We are in popular locations nationally being Sandton in
Johannesburg, V&A waterfront in the Cape Town and Umhlanga in KwaZulu-Natal as
well as private clubs around the country. We are targeting middle class income level
customers but also provide special service to higher income level customers because
of the price going higher for that income level.
1.2) The demographic environment, since people make up the demographic environment
and they are what propel markets forward, marketers are particularly interested in
it. (Phillip, B. 2019) It may influence a company's product marketing strategy and its
ability to effectively reach its target market. The kind of marketing tactics a company
employs may depend on the size of the target market. (Staff writer, 2022). The
technological environment, the macro environment is significantly influenced by
technology. The business must be aware of the level of technology adoption and
user interface development in the area to plan its communications and marketing
initiatives effectively. The cultural environment is linked to elements that have an
impact on societal norms, preferences, perceptions, and behaviour. (Phillip, B. 2019)
In South Africa especially the culture is so rich so our business will focus on
participating in local events sponsoring events and a lot more. The natural
environment, it speaks of the physical environment or natural resources that
marketers need as inputs or that are impacted by their marketing efforts. (Phillip, B.
2019) Our products packaging is made from raw materials and our Voss Vodka glass
bottles are recyclable as well.
QUESTION TWO:

2.1) Customer loyalty is crucial in an alcoholic industry. For a business, loyal customers
are like gold dust. They consistently purchase your good or service, which is why.
Retaining them is less expensive than acquiring new clients. Of all the customers,
they have the highest lifetime value. The real key to success in business is knowing
your loyal customers. It's critical to understand the factors that influence your
customers' loyalty. Customer surveys can be used to collect this data. Following that,
you can maximize these clients through reward programs and other marketing
initiatives. Purchase and Use Patterns, Usage and purchase behaviour refers to how
consumers use a product and act when making a purchase decision. One of the most
crucial types of behavioural segmentation is this one because it enables companies
to enhance the purchasing process. (Staff writer (2), 2022)
2.2) I’ve selected a differentiated market targeting strategy. Targeting different markets
helps us gain a little more insight and clarity. It is also referred to as "segmented"
marketing and entails focusing on a few (typically two or more) primary target
segments that have the greatest potential for generating revenue for the business. A
brand will then create unique marketing strategies for each of those few targets
after defining them. One of the most popular methods of market targeting is this
one. It makes sense for brands to choose a variety of market segments and then
develop unique, focused strategies for each. By doing this, businesses avoid simply
producing identical products repeatedly in the hope that consumers will eat up
whatever is put forth for them. Segmented market targeting is aware that
consumers fall into various categories and that personalization is necessary for and
effective with these groups. (Langford, S. 2022)
2.3) Product quality, Customers are accustomed to paying more for products of
perceived or actual higher quality. This tactic works particularly well in the luxury
market, where factors like high quality, scarcity, and well-known brand ambassadors
affect consumer decisions. (Masterclass. 2022)
2.4) Real customer decision-making process is what perfectly fits the business for the
type of product we’re selling. This is a difficult process that requires a great deal of
problem-solving, like choosing whether to buy a new car.
QUESTION THREE:

3.1) The core product itself is not the core product. The phrase "core product" refers to
the value that a consumer receives from using a product. The primary purpose for
which the product was created is met. (Bhasin, H. 2017) Our product aligns perfectly
with our customers’ needs with the pure enjoyment and taste of alcohol for the right
occasion, the core product also being alcohol. The tangible product layer has the
features, quality level, brand name, styling, and packaging of the product are the
components that the customer will evaluate and use to inform their decisions. These
elements are present in all products, in varying degrees, and the consumer uses
them to compare products. The tangible product here will be the choice of Voss
Vodka. The augmented product layer, numerous auxiliary services are offered to
support each product. The tangible product and all its supporting services are all part
of the augmented product. The buyer frequently demands these services and, in the
absence of them, would turn down the physical product. (Staff writer (3), 2022) Our
product is distributed by South Africa’s largest distributor in the alcohol/liquor
industry, which is Edward Snell & Co. Our product is sold in the top three highest
populated provinces in South Africa. The potential product layer stems from Kotler’s
Five Product Level Model. This covers all future augmentations and modifications a
product might experience. A company must continue to enhance its products to
surprise and delight customers in the future to maintain their loyalty. For instance,
the customer receives regular updates to image processing software with new and
practical features. (CGMA. 2022) Our product is going to provide a lot of promotions
and gives loyal customer multiple chances to win 10 bottles for free, our product will
sponsor a lot of local events that happen, and we will strive to sponsor or get
sponsored by big brands. Brand image and product image are very similar. The term
"product image" refers to the perceptions and the underlying mental picture
connected to the product. It is a collection of opinions pertaining to a particular item.
It denotes what the item currently represents. (MBA Skool Team. 2015)
3.2) It is obvious that packaging has a significant impact on how valuable a product is
perceived, but overall, in contrast to the ongoing advancements in portable
technology, the packaging industry hasn't changed all that much in recent years.
(Velarga, M. 2017) For my product Voss Vodka, the best packaging used for it is
cardboard packaging this is by far the most widely used type of packaging. It is
widely regarded as being economical, environmentally friendly, and incredibly
versatile. It can be used to package a variety of goods, from big, bulky items to small,
delicate ones. (Staff writer (4). 2022).
QUESTION FOUR:

4.1) Marketing Penetration will implemented on the day of the launch of Voss Vodka.
Businesses use a lower price when introducing a new good or service to draw
customers to it. A new product or service can enter the market more easily and draw
customers away from rivals by offering a lower price. Pricing for market penetration
relies on the tactic of using initially low prices to make many customers aware of a
new product. (Kenton, W. 2021)
4.2) First step, determine pricing goals and limitations defining the function of price in
the marketing and strategic plans of an organization. In the long run, short run. The
range of prices a company can set is restricted by constraints. Second step, calculate
demand and revenue estimating the amount of revenue that will be generated and
the amount of demand that will exist for the product. Third step, identify the
relationships between cost, volume, and profit this determines the fixed costs,
variable costs, and production volumes of the company. Fourth step, choose a rough
price range establishing prices using the demand, cost, profit, or competition-
oriented approaches. Fifth step, set price. Sixth step and final step, make special
adjustments to the set price with discounts and allowances.
4.3)
Don't steal, respect others, and always lower the toilet seat for your female friends
are just a few examples of moral principles that are simple to comprehend.
However, the line between right and wrong is a little bit fuzzier when it comes to the
market. Of course, it is wrong to use children as slaves, but does that give a company
the right to set its own prices? After all, consumers won't buy if the number is too
high or the marketing is too egregious, right. In this essay I’ll be covering the
different ethical issues in South Africa and bring in different perspectives of ethical
issues. Governments have enacted laws over time for the most heinous of fraudulent
pricing practices, but even so, some strategies are still regarded as unethical, and
you might be making these mistakes without even realizing it. We briefly discussed
the ethics of natural disaster price optimization in a previous post, but before we get
into the five key ideas you should steer clear of in your business, let's take a quick
look at the broad picture of pricing ethics. (Guo, V. 2021)
Therefore, the ethical pricing of a product is a crucial choice for any company.
Businesses that sell their goods and make a profit ethically are respected far more
than those that harm and defraud rivals or even customers. You must be able to
recognize the ethical problems that prevent fair pricing to engage in ethical pricing. A
pricing strategy that is ethical goes beyond simply abiding by the law. Like how not
all unethical pricing practices are dishonest or against the law. Because there isn't
always a clear distinction between what is morally right and wrong, making ethical
decisions can be challenging. As with many ethical issues in business, we must step
back, consider our choices in the context of the larger business community, and
establish personal ethical standards. (Guo, V. 2021)
Furthermore, it’s not difficult to have ethical pricing practices, but it can occasionally
be confusing. The following are the top 5 ethical pricing problems that hurt
businesses: Price fixing, a group of individuals who are on the same side of the
market may agree to fix the price at which they will buy or sell a good or service.
Typically, prices for goods and services decline because of competition between
these participants for consumers. Imagine a scenario where every ice cream parlour
in South Africa vowed to raise the price of single scoops to R150. Because we
couldn't go to another local establishment to compete with the high prices/low
quality offering of another, consumers would lose out because we'd find alternatives
or pay a hefty sum of money. Horizontal price fixing, in which businesses at the same
level of the supply chain cannot agree on a target, maximum, or minimum price, is
prohibited because of the potential harm to consumers (among other things). (Guo,
V. 2021)
Bid rigging, which can be known as favouritism. This one's more for the proposal
crows but bid rigging entails awarding a business contract to one organization while
creating the impression that several parties were given the chance to submit a bid.
Since the government deals with so many bids and contracts each year, this is not
only unethical but also one of the few things that gets followed up on, particularly
within their own ranks. Because the best producer may not always get the job, this
practice severely harms consumers. This crime can take many different forms, but
they all involve predetermined agreements between businesses involved in winning
a contract. (Guo, V. 2021)
Price discrimination is the practice of charging various customer groups different
prices for the same product, typically based on how much they are willing to spend.
The practice also appears when selling items at lower prices to customers who are
more willing to pay. This one can be a little challenging because it is socially
acceptable in some situations but not in others. For instance, very few people would
object if an 80-year-old man paid R100 less to enter the carnival with his 2-year-old
great-granddaughter. However, the fact that Orbitz only displayed the priciest hotels
to wealthy customers generated a significant amount of negative PR. (Guo, V. 2021)
Price Skimming is the practice of initially selling a product for a very high price and
then gradually lowering it. Producers want to capture each step on the demand
curve; first, consumers who are willing to pay more buy the product, and then with
each decrease in price, a new group of consumers is prompted to make a purchase.
This tactic is most frequently used in the tech sector because some customers are
willing to pay more for the most recent gadgets. (Guo, V. 2021)
Supra competitive pricing, there are times when a good's value to consumers is
significantly higher than its production cost. In these situations, there is debate over
whether the company has a right to charge a much higher price and still match the
perceived value. When a certain product is the only one of its kind available or there
is a shortage, such as when food or fresh water are expensive after a hurricane, this
can happen. (Guo, V. 2021)
While you should never use illegal methods to set or modify your prices, you should
always take a step back and consider the price from the point of view of your
customers. Your company is not being built for quick sales. Keep in mind that you're
creating something sustainable and steer clear of any pricing PR mishaps.
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