Retail

The Marketing principles I will present are; Understanding the customer’s needs: ‘if you can speak the customers language you can understand their needs better” Book: Marketing plans 1996, (Angela Wheaton) It is very important that companies have the knowledge of customer’s needs, as it is a key to a company. Markets are always changing; therefore companies needs to keep reducing new fashionable products. Companies need to know what their customers, wants and prepared to produce the right product. Such as new clothing, accessories, etc.

One of the examples where customers satisfaction has been achieved is whereby online customers has received the packaged in order and in great shape. The Company has made sure the prices are affordable for their customers of all preference and (income) by being a high street shop which means it is affordable to people of all ages and class. Example if it is too high your customers will not buy. This means if the prices in H are too expensive their 10 company loses customers, less customers result in H losing sales. And if it is too low your cost will not be covered. And if prices in H are too low profits will not be made.

H has a great customer service and customers can call for any questions they have, they are always willing to help with wide open arms, they are always willing to offer help and make them aware of the latest offers that they have for the customers. Secondly, the quality of the goods should also be considered, it should be at a satisfactory state and good condition Understand and keep ahead of the competition: Businesses have to make sure they keep up with competition, by having an eye on their competitors. Good competition is healthy for businesses as it will push the company to work harder and to be more successfully.

They keep up with competition by being up to date with technology. H is leading the way in following a strategy of vertical integration with distribution network. This strategy has allowed the company to directly collect and fully search information market. (www. Businesswoman. Org. 2004) Who are their competitors? They clearly do have competition. Which are Top shop, River Island, Berserk, Ezra, etc, Ezra is defiantly known for H biggest Competition cause of the similar fashion sense, which are Men’s wear, woman’s wear, accessories etc, not only do they use technology which the company H also uses .

However for the company to be ahead of their competition; is by promoting their brand and teaming up with the famous Karl Laagered, designer for Channel, to create a high-end line that was also reasonable priced for the younger customers that H caters to. The results were extraordinary, as many items sold out within an hour. Recognizing this idea as an clear success, the company then went on to team up with other famous designers and celebrities such as: Stella McCarty, Victor & Roll, Madonna, Roberto Cavil Jimmy Coho, Sonic Riskily, and Lanolin”.

This shows that H&M is always ahead of the competition by bringing new designs to the table (Marketing week October 2013) Furthermore H&M offer two man collections each year on spring and one in fall. Within each season, this allows H&M to continually refresh its inventory (Forbes, 2012) H? COLD Communicate effectively with its customers to satisfy customer’s expectations: For genuineness to become successful, the ability to communicate well should be the aim of every business.

Companies are willing to try their best to communicate with their customers/clients. This is important for all types of advertisement. Clients want to feel that they are the company’s priority and a way to ensure this is by giving them exemplary customer service. Good communication is effective for meeting customer needs and an example of where this is demonstrated, is where the employer can quickly address any problems the customer may have with the new product.

Chapter 1

Background Study

I have decided to make a research on the consumer behavior and perceptual experience on their purchasing form. A displacement has been observed amongst the young person today from shopping from sole branded shops and promenades to street markets and flea markets. Flea markets are markets where cheap goods are available. It may be indoors, such as in a warehouse or a store or it may be out-of-doorss, such as in a compound or under a collapsible shelter.

Harmonizing to an article Flea Markets in India ; people in India love to dress up for any juncture, even if it means traveling to the school to pick up their child. One can happen the hippest and the most traditional garbs being worn in the same age group. The current coevals is trade name witting yet values money. The solution to this lies in the flea markets. These popular flea markets in India sell the most fashionable and comfy apparels and casuals that are preferred by the people. Childs can easy be spotted in these flea markets, striking a good trade with the sales representatives. The merchandises found in these markets are as per the outlook of the young person in footings of monetary value, invention, assortment, comfort, styling, trade name image. The merchandises besides have the added benefit of belonging to international trade names, where some of them have the exclusivity of non being available in India. The 1s with the endowment of dickering accomplishments can acquire a really good trade every bit low as 20-30 % lower than the quoted cost. Delhi flea markets are every bit popular as Goa or Mumbai or Kolkata, etc. flea markets.

( Beginning: Text retrieved from hypertext transfer protocol: //www.bharatonline.com/travel-tips/flea-markets.html )

Flea Markets in Delhi

1. Connaught Place, Janpath and Palika Bazaar
2. Sarojini Nagar
3. Greater Kailash
4. Lajpat Nagar
5. Vasant Vihar
6. Nehru Topographic point
7. Karol Bagh
8. Exclusive stores for export excess in topographic points like Gurgaon shopping promenade, Patel Nagar, Greater Kailash

These topographic points are full of branded garments and are offered at really low monetary values. Trade names like H & A ; M, ZARA, Mother Care, Polo and many more are available in majority with the latest of manners and tendencies incorporated in them and are really popular amongst all age groups particularly the young person.

Factors Influencing Band Switching

There are many factors which influence the clients to exchange trade names like monetary value distinction, publicity schemes, in shop shows, friend ‘s recommendation or equal force per unit area, packaging, famous person indorsements, new manners, advertizements, etc. There are many more but in the instance of exchanging from a trade name to a flea market the major factors which influence are:

• Monetary value
• Peer force per unit area
• New styles/ Latest trend/ Change in Fashion

The first two are easy to understand but the 3rd is the most of import factor. In a flea market particularly Sarojini Nagar or sole export excess shops all the exported ware is sold and hence that topographic point is the first topographic point where childs can happen fashionable garments before or about at the same clip they reach the shops at assorted parts of the universe.

Chapter 2

This chapter examines the literature relevant to the two defined aims. There are three major subdivisions:

The first includes an overview of the demographics of the Indian young person and its growing. It besides includes why the young person is an of import section to aim on when it comes to selling of goods.

The 2nd negotiations about the current consumer behaviour and penchants which includes their life style, their likes and disfavors, etc. Besides the factors which result in switching from trade names are explained in brief.

Last, the 3rd subdivision explains the consumer behaviour towards flea markets after which the consequence of the flea markets on different factors is explained.

Indian Demographic Overview

India ‘s part to the Earth ‘s human population is 17.5 % with 1.17 billion people in the state. Harmonizing to the NCAER study on National Readership Survey ( NYRS ) , India ‘s young person population grew at over 2 % to 459 million in 2009 from 390 million in 2001 nose count. Three out of every four young person is literate and every one in three literate young person in India is a pupil.

The tabular array below justifies the growing of young person in India from 2001 to 2009 i.e. 2.05 % and the growing of literate young person as good which is 2.49 % .

Harmonizing to the saloon graph below which shows the young person involvement in selected issue/topics all over India, 28.9 % literate young person is interested in manner.

The young person today involves itself into a batch of leisure activities. The graph below shows the leisure activities preferred by the literate young person in India. Television remains as the most popular beginning of information with 78 % .

Why Target Youth as Important Consumers?

Many sellers consider immature grownups aged between 18 and 24 as a distinguishable consumer section that boasts considerable buying power. In the UK, such consumers spend around ?10 billion each twelvemonth while it has been projected that immature grownups will shoot more into the US economic system than babe boomers by 2010.

The Young Adult Segment

The importance of these consumers is besides widely acknowledged. Their impact on household purchase determinations is turning and they are recognized as tendency compositors that influence ingestion alteration within other market sections. Sellers besides remain cognizant that procuring the backing of immature grownups may be of import given their capacity for future disbursement.

Like other consumers, the image, life style and buying behavior of immature grownups is shaped to some grade by assorted external factors. The challenge to research workers is to place which factors hold sway. Previous probes have indicated facets that include household values, peer influence and ego perceptual experience to act upon consumer behaviors aboard such as age, gender and life style. Some analysts believe, nevertheless, that sellers have deficient cognition about what motivates this market section.

Some selling directors continue to avoid the immature grownup section on the premiss that such consumers are non trade name loyal. Evidence for this is, nevertheless, slightly inconclusive. On the one manus, research workers suggest that the purchase behavior of immature grownups is frequently determined by pecuniary restraints. An purpose to salvage money means that exchanging to inexpensive trade names becomes a natural response.

Consumer Buying Behaviour and Preferences

India has the youngest population in the universe. There are a batch of immature people in different locations and income groups who influence their parents disbursement and their ain disbursement every bit good. Indian market is altering quickly and an foreigner who visits India one time or twice a twelvemonth can easy do out the difference.

Amongst assorted consumer behavior groups there is a immature emerging consumer behavior group which is immature and ungratified, who start gaining at an early age and proudly pass money which does non belong to their parents. This group consists of adolescents who love eating out, ticker films and travel on occasion for clubbing and all these activities have become an built-in portion of their life style. Their dressing is constantly modern and they believe in altering their garb often. If the latest manner and voguish apparels are non available in the shops at the right monetary value they switch to either Sarojini Nagar in Delhi or Fashion Street in Mumbai. The consumer defines value with quality. If a merchandise has good quality, sustainability, length of service, significance, etc. it is considered as valuable.

Adolescents are more adventuresome than their seniors and they care less for tradition and faith. They adopt the latest manner tendencies that emerge with clip as they are the 1s who are more receptive towards alterations and want to obtain a new expression every clip. They believe in disbursement money at present and non salvage much for the hereafter. They can non be influenced with other people ‘s perceptual experience but they can easy be motivated at the same clip. They non merely take determinations for the merchandises they need and have to purchase but besides help their grownups in taking determinations. Harmonizing to a survey ; Rs.500 crore a twelvemonth is the sum of money given to kids as pocket money which justifies them being an of import section to be targeted on.

( Understanding the “ in-between category ” Urban Teenagers as Consumer, n.d )

The increasing competition makes distinguishing new merchandises and services offered by a company hard from the older 1s. The companies try to vie with their challengers by cut downing the monetary value of the merchandises as they feel that monetary value is the chief factor. Customer behavior has become intercrossed. On one manus they are monetary value sensitive and they search for deals and store from discounted mercantile establishments and on the other manus they enjoy branded and luxury goods.

It ‘s non that they do n’t wish passing but they want to obtain value for their money spent. Customers today are really much aware about the latest manner and merchandises and besides their importance to a company and hence have high outlooks from companies and take a company which provides them with the best merchandises and services. Price, quality and functionality are non the lone factors to do a client loyal towards a company, but now it is the clients experience and interactions every bit good. Any sort of bad experience can damage the attitude of a client towards a company.

Consumer purchasing behavior is a procedure of doing determinations to purchase and utilizing a merchandise. It is therefore of import to understand why and how they make a purchase determination with altering factors in our society.

Different companies have assorted selling schemes to pull the clients. They take aid of different client relationship direction package to prolong their clients to do them loyal. When the clients make their purchasing determination they evaluate the benefits which can be perceived from a peculiar merchandise and compare them with the costs. They associate themselves with a merchandise emotionally and take it as a position symbol. With altering fortunes, the client ‘s demands and perceptual experience besides alterations.

Positive consequence of client perceptual experience on trade names is that their trade name value increases with increasing clients and the value of the merchandise offered by them besides additions popularity. The negative consequence of client perceptual experience is that increasing popularity of luxury and premium merchandises can take to loss of exclusivity and therefore can be perceived as less valuable merchandises. Besides the quality and services may differ in some merchandise classs if consumed by a big figure of people.

( Recklies, 2006 )

Factors which influence Consumer Behaviour and Brand Switching

Factors which influence consumer behavior are cultural, societal, psychological and personal ( age, demand, etc. ) . Personal factors means single wants and needs which makes the client comfortable and satisfied. Social factors consist of household influence, sentiments of friends or other groups, civilization, etc. Culture affects the purchasing behavior of a consumer as they belong to different households and civilizations that have their ain perceptual experiences and every person has its ain purchasing form with regard to their existing civilization. Psychological besides refers to motivations of purchasing for a peculiar event like birthday ‘s, or for a friend, etc.

As per a research assortment seeking behavior is non ever a factor for trade name shift. Consumers need assortment in their lives but trade name shift is non straight caused because of the demand for assortment factor. This factor varies from merchandise to merchandise.

Consumer Behaviour and Perception towards Flea Markets

Flea markets are great retail market topographic points. Customers who visit these markets have a preset purchasing determination. Unlike people in promenades and people walking in the streets, flea market clients are more than merely browsers. They are serious clients who have a trip to the flea market to purchase merchandises but at the same clip it is of import to maintain on pulling them and do them purchase and non do them lose their involvement. ( Lowy, n. vitamin D )

In the US Flea markets are a multibillion-dollar concern. There are different booth sizes and rents vary depending on factors such as location, equipment ( tabular arraies included, etc. ) , and hours of operation, but by and large are in the scope of $ 3 to $ 10 per square pes per twenty-four hours. When the engagements are done for the sellers the organisers try booking for a broad assortment of merchandises that will be offered like sale ‘antiques, electronics, kitchenware, nutrient points, vesture, tools, playthings, art and featuring goods. Making so will guarantee wide entreaty to a big mark audience of flea market shoppers. ( Flea Market Organizer, n. vitamin D )

A research was conducted on Informal Retailing: An Analysis of Merchandises, Attitudes and Expectations. The writers concluded that flea markets are considered to be an gratifying topographic point to shop. Flea market is a portion of the belowground economic system which means which is immeasurable, tax-exempt or both. Flea markets are rather popular amongst the consumers and therefore increase gross revenues and do better than formal retail merchants. Consumers shop more with friends and household instead than shopping entirely. The flea market is considered a topographic point to socialise as it is a topographic point to ease the informal exchange of goods. Flea markets are favorable amongst consumers because it is fun to shop for merchandises for deals ; they have friendlier and personal services and a broad assortment of merchandises to take from. But flea markets have some disadvantages excessively like hapless quality, deficiency of warrants, policies like no return and exchange in some and its is non a to the full authorized market. Harmonizing to this research 93 % of the consumers bought apparels, playthings and jewelry and 20 % bought place contraptions. ( Sherman, McCrohan, Smith, 1985 )

Flea markets are everyplace these yearss and can be full clip or merely on weekdays. One can follow his/her avocation and gain a batch of money through flea markets even if particular techniques are non used to do the merchandise. Seasonal points are a hit in the flea markets like tapers and candle bases at the clip of Diwali or bars, Christmas gifts at the clip of Christmas. ( Wright, n. vitamin D )

Consequence of Flea Markets on conveying extra footsteps in the nearby market country

In an interview, Mr. Rajiv Duggal, CEO, Select CITYWALK said that flea market is non a new construct and is the most preferable by Indian clients and tourers. Every major metropolis has its ain popular flea markets which attract a batch of people. The construct of the flea market introduced every Wednesday is to advance touristry and to show new sort of merchandises to the clients in an organized manner. He believes that consumers attracted to the promenade are fixed who buy branded merchandises and to prolong them and pull new clients it is of import to supply the clients with advanced merchandises. For this he tries to give them non commercial or non branded merchandises through this medium. Flea market is a selling scheme as it helps in pulling clients i.e. clients who come to the flea market are by and large observed in the promenade as good which helps in increasing footsteps to the promenades. It non merely attracts the adult females and shoppers from South Delhi but besides a big figure of them come from North and West Delhi and NCR parts. ( Shah, n.d )

After seeing footsteps increasing in the Select Citywalk promenade in Saket because of the flea markets, The Great India Place, Noida and Pacific Mall, Ghaziabad besides adopted the thought and started with the similar constructs which lead to fringy addition in footsteps. This flea market had a assortment of merchandises like books, nutrient, metal merchandises and apparels. The construct of flea market is ask foring big figure footsteps in Spice World, Noida excessively and in add-on they have a batch of activities and distribute film tickets as awards. ( Sinha, 2009 )

A partnership between two organizations is successful if both are able to optimize their operations and benefit from each other’s successes. Procurement and contract management is one area of the organization that can be maximized while reducing costs by using e-business solutions and outsourcing. Procurement and involves the purchase or ownership of goods and services at the best possible cost, the right quantity, quality, place, time and the right source for the benefit of groups or organizations. Procurement involves the decision to buy goods and services under the conditions of scarcity.

Procurement involves contracting wherein two parties with different purposes interact. If procurement practices are effective, they can increase the profitability of the organization. Effective procurement practices result in the reduction of cash flow problems by taking advantage of discounts when buying in bulk only from trusted and quality suppliers (Kalakota & Robinson 2001). Procurement contributes to the organization’s profitability therefore it is a centralized operation (Sifri 2003). This results in reduction of costs and standardization of practices.

The procurement of operating resources is done in coordination with the financial accounting department. The managers of the organization will have to determine the priorities of the planned project. It is in this context that replacement investments are given more importance than expansion projects. The quantity of investment procurement depends on the availability of financial resources. Operating resources are important to the organizations because they are composed of goods and services necessary to the daily tasks of employees.

Examples are office supplies and janitorial services. Operating resources cost low but acquired in high quantity. Effective management of operating resources will result in savings for the organization. A considerable percentage of a company’s funds are spent on purchases that are not relevant to the production process (Garrett 2007). Due to the routine purchase of operating resources, their acquisition is not included in the official procurement processes of the company. Since majority of these purchases are performed by employees, there is limited control and accountability.

Although management may be aware that a considerable amount was spent on these items, it is also highly possible that management did not know the exact details of the purchase or how they have contributed to the achievement of company objectives. Without supervision of this process, the organization cannot work on its inefficiencies or implement cost reduction strategies. Operating resource procurement is a form of controlled chaos the organization continues to operate amidst the disorder of the process.

If the company does not know where the funds were spent, it does not have power and control of the procurement process. There are several reasons why managers of organizations will consider outsourcing a function of their business operations. An organization will be more likely to pursue outsourcing if there were several factors for doing so such as the need for cost reduction and selling assets to the supplier. This is typically the reasons for a company that is under a financial crisis. One of the reasons for outsourcing is to acquire new skills.

The organization may discover that the skills of their employees are no longer enough in a given business function. As a result, the improvements to the function will only be minimal. The organization can provide a solution to this problem by turning over the function to an outsource service provider that specializes in that business function and is considered to be competent in that area (Bragg, 2006). The organization can expect that the outsource service provider has experienced and skilled staff adopting the new developments of technology and updated with the most current procedures.

Companies that might need this kind of expertise are those requiring high level competencies in computer and engineering functions (Bragg, 2006). One example of an organization that has acquired successful partnerships with other businesses is Redbox. Redbox is a leading movie rental kiosk company that took advantage of the Internet technology, the small size of DVDs and developments made in terms of data processes systems (Pal 2008). The company used these to provide service and product innovation in the industry of movie rentals.

Redbox has brought its movie rental kiosks closer to consumers by adapting to their busy lifestyle. Movie rental kiosks are found in retail locations such as restaurants, grocery stores and drugstores. A trip to any one of these locations allows the consumer to do different things at once. The fully automated movie rental kioskt maximizes the small size of the DVD to provide consumers with a wide selection of popular and frequently watched movies.

The target market of the company is a group of consumers who knows the importance of convenience and instant satisfaction because of the wide selection of movies (Dantes 2009). Since the movie rental kiosk does not have employees like a regular video store, Redbox offers cheaper movie rentals. The concept of Redbox is unique and revolutionary. Redbox has proven that it listens and responds to the needs of consumers. Redbox has partnered with various retail locations to serve the needs of their customers.

The retail stores also benefit from the partnership because the presence of Redbox movie rental kiosks can increase customer traffic and sales. Both parties have a greater opportunity to generate profits. Redbox has also partnered with Flextronics in the development of new movie rental kiosks. Redbox is in need of an outsourcing company for the development of a new and optimized supply chain (Red Orbit 2009). The company believes that Flextronics can help the company develop and create more kiosks for their consumers in order to implement an aggressive marketing strategy.

After producing the kiosks, they are stored in warehouses until they are ready to be shipped. Redbox contacts the warehouses regularly for scheduled shipments. The company uses the supply chain of Flextronics to manage the demand for kiosks. The company can see what units have been shipped and how many will be shipped in the following week. Redbox and Flextronics enjoy a successful partnership because of the mutual benefits they enjoy.

References

Bragg, S (2006) ‘Outsourcing: a guide to– selecting the correct business unit– negotiating the contract– maintaining control of the process’. http://www.plume-noire.com/movies/resources/movie-rentals.html

Supply chain is a network of logistic systems. Logistics concerns one company’s system. Supply chain includes different companies. E. G. Dell computer – the logistics is Just their company but the supply chain includes all the part suppliers. Their logistics system is a part of dells supply chain. It includes also the retailers and supplier. Other company’s logistics included in Dell’s supply chain. Logistics is an early version of the supply chain. Logistics originated in the US military. Flow of cargo (people, weapon in war is logistics. ) Organizing a course/seminar – logistics needed for success.

Today all the successful companies find their competitiveness from logistics, not from the product itself. E. G. Walter (retailer, wholesaler, supermarket chain) – their competitive edge comes from logistics. They are not selling anything different from others. They have a superior logistics system. Logistics make them succeed. Dell also, service is good, price attractive – success comes from logistics. Another definition people define logistics differently but they mean the same thing. Slide Logistics/Concept 4 Instead of saying process, they say optimization, etc. Process of location.

Says movement and storage of resources instead of saying goods/services and information. They call logistic activities economic activities. Transport is one of then, port services, production, storage, distribution, etc. – take place bet. The point of origin and point of destination and consumption. Logistics is about the 5 RSI. What are the 5 RSI? Logistics is about getting right goods at right place at right time in right form at right price. Military is really about this. In commercial entities we emphasize on the price a lot. This is also the definition of logistics.

Right goods, right in quality in correct quantity. Different level of logistics. In-bound, out-bound logistics. Logistics of production (table, book, car, etc. ), there are two levels of logistics. Logistics within the production process – in the factory. How do you optimize the production within the factory? We call this operational logistics or workers together. How do you put temporary storage along the assembly line? All this is logistics. E. G. WHIM library – lack of space. How to maximize space? Library space layout. It’s about logistics. Different factories have different layouts – this is logistics.

We are interested in logistics before the production starts. The cargo coming into the factory and when the production is finished, the cargo moving out to the next step – all towards the final consumption. This is what we call in-bound and out-bound logistics. This is what we are interested in. Maritime transport takes part in inbound and out-bound logistics than for production logistics. We are interested in how to move material to production and from production to consumers. When we try to understand logistics, we look at some logistics questions for example a typical question is about where to find the raw material needed.

Raw material may be in different places. Some places might have different quality and prices. The difference between that place and the production might be different and therefore remonstration time and cost might be different. Where to find energy supply? Labor supply? Should you move your factory offshore to benefit cheap labor? If you do that be careful that higher prices might have to be paid on other services for example transportation. Where to set up production bases? In shipping, where should the port be located? Where to build warehouse and distribution centre. E. . Toyota car has their distribution centre for the Nordic countries at the port of Mammal. Before that they had centre in all the countries. So many distribution centre, different logistics cost than if there is a concentration of activities. Where to have branch organizations? The answers consider a lot of activities including transportation. We are in maritime transport so we are affected by the customers decision. Other types of logistics questions for ex. How to transport from A to B and choice of transport mode – air sea, road. Egg. Oslo to Mammal – road, sea. Air, rail.

Different modes of transport have different logistics implications. Ex field trips – logistics question, how to transport students – sea (too long), air, road, rail. How to transport container? Hub and spoke – benefit from economies of scale. More cargo handling costs. The best solution must be a logistics solution. Best way to transport cargo from A to B. Flow and storage from point of origin to destination to comply with customers’ requirement. Moving from A to B different options – different solution. When should transport start – how long should it take. Route? Storage? How, when needed?

Mat of cargo to be transported at one time? Economies of scale? Packing needed? Logistics is everywhere. Farmer from southern Sweden – buy fertilizer in Sweden, buy from Germany (expensive land transport), buy from US where its much cheaper, but he has to pay more transportation cost. Where to find the material? Emphasis is on maritime transport – movement of goods. Shipping co. Transport goods – need info to do so. Port and shipping concerned with flow and storage of goods. October 28, 2008 Session 2 Slide Logistics/Concept 9 There always has to be a logistics concept. And a logistics concept is what?

It’s about total cost concept. This is the most important concept. It looks easy but total cost concept is not always observed, so people make mistakes as a result. It is a customer service requirement. Logistics concept is also about outsourcing, integration, global about concept, it is also about processes. The processes we call drivers. It drives the logistics process. It can’t all be about concept. It has to be something tangible. Logistics is about processes. We are doing these everyday, ex. Manufacturing and transportation, distribution, inventory control, procurement.

These are all activities, but the difference between these and logistics are that we are doing these in an integrated manner under the concept of logistics. So we have the concept and the drivers. The difference between these activities and logistics, we are doing them under the total cost and the customer service concept, so this is relatively new. Third is IT. We call IT enablers – that enables us to do the processes under the concept of logistics. Sometimes we can’t do the processes (drivers) without IT. Ex. Dell computers. They obtained their competitive edge from logistics.

Logistics means to get a computer from the production to the customers without any retailers. No middlemen. Order online, design own computer. The aim of logistics is to minimize the total cost. Can only do this with IT tools. So the three components have to come together using the IT tools. We need to understand the role of IT in the whole process. Ex. Just in Time system. This is Inventory control under the concept of egoistic using information technology. The 3 components have to work together. How do we take all these functions (MFC, transportation, distribution, warehousing, etc. In an integrated manner under the concept of logistics using IT tools. Ex. Individual delivery. Concept is to minimize total cost. Total cost is manufacturing, transport, didst. , etc. How do we minimize that? Use IT. Dell used IT to find out that their total cost will be minimized if they cut out the middle man. IT enables the cutting out of the middle man. Good online service. Shipping line is not making anything – it is a part of transport. Shipping companies as a company have logistics problems also. Shipping has a double role to play.

Shipping is a part of the logistics chain of a customer, but at the same time they have their own logistics problem. Shipping’s logistics problems include arranging bunkers, choosing port of call, types of service to provide, empty container management, repositioning of containers, terminal logistics, fleet logistics, agency logistics, but shipping as a service provider is part of the logistics of customers. Ex. KEA – furniture maker – shipping important. Shipping has a double role to play. Ex. Wimp’s logistics service. Logistics in third world countries is not good enough. Read World Bank Report.

The three components of logistics are important. Dell manages their total cost through logistics, so does Wall-Mart. All the processes have to be IT enabled. Control-implementation-control. HP has a fixed model on the shelf. Dell, make your own – different customer service. One is enabled by IT. Logistics has 3 components – concept, process, IT. Slide logistics/Concept 10 Supply chain – different sources to choose from. Take one then the next step and the next. This is the flow of cargo from origin to destination – the flow of information from user to origin. Information flow and cargo flow go in opposite directions.

Ex. Dell – the information goes from the customer to Dell and the cargo from Dell to the customer. How will the producer know what kind of products the consumer will need? The consumer will have to tell. Opposite directions. Dell transport one computer to each customer so the customer pays more for transportation, but other costs like the shops and overhead related costs do not exist. If we compare this cost with the cost is very important. Total cost concept can be better understood by looking at slide Logistics/Concept 1 1 . This is a Total cost in Logistics and Supply Chain System.

Marketing and logistics are closely related. This picture is very true. What is marketing? It is about the 4 As – product, price, promotion, place. So in this marketing there is one component about place which is about logistics. In the logistics about the place and the customer service (where the customer wants the cargo to be) and there are other cost elements. Ex. Related to place, transport cost has to be incurred – also warehousing cost, flow and storage. Other costs like inventory costs will be incurred. What is the difference between inventory cost and warehousing cost – inventory cost for keeping goods in stock).

Inventory cost is the value of the goods. Books for new WHIM students – cost of book (inventory) plus storage (warehousing). Processing and information cost – each time we order, we have to follow procedure, fill in forms, etc. Processing cost can be high. Egg. When we are transporting our boxes home, have to have bill of lading. This has a cost (processing and information cost). Lot quantity cost – economies of scale. Purchasing/transporting/buying a big amount and will benefit from economies of scale, this is called lot quantities. Put all these 5 elements together and this is total cost.

The objective of logistics is not to optimize a cost element, it’s not to minimize a cost element, but rather to optimize the total cost and minimize the total cost. Minimize the total cost – this is what logistics is all about. This is easier said than done. KIT, the idea is to reduce the inventory cost to zero if possible. At the same time warehousing cost is being reduced – this is a good system. What other cost will be affected – transport cost. All these cost elements are interrelated and interdependent. So interaction and interdependence are also important.

Change of inventory will affect transport cost, lot quantity cost, etc. KIT system for example – daily consumption of rice. Let’s say we eat egg of rice each time. Based on KIT, each time we need rice, we should buy only egg. Do we do this? No, then against KIT principle. We buy 200 kilos – 2 cost occur – inventory cost and the money spent on the rice cannot be used (capital tied up – cash flow problem). If this money was put in the bank it would generate some interest. Where is the rice put? The place occupied by the rice can’t be used for something else.

In production if you buy too much to get economies of scale from purchasing, we’ll incur a high inventory cost. If we are not buying kilos, we buy a quantity in between – say 2 kilo. Optimal total cost. If we buy egg each time inventory cost is zero – have to buy each time we need to cost. That is time and transport cost. Lot quantity cost will change as there is no savings to be got through economies of scale. And each time we buy there are other costs like information and processing (maybe not in the case of rice, but generally). Put all these costs together, and find a good place in between. We do this by Cost Trade-off.

Cost Trade Off Slide Ex. Manufacturing activity involves making projectors in Mammal, Sweden and need to supply them to the rest of Europe. No distribution centre, or warehouses, or depots, o because we cover the entire Europe, each time we have an order from someplace in Europe, we pack the projector and send it off. What do we save – inventory, we do not keep inventory. What do we have to spend more – transportation cost will be very expensive. We therefore have to find out if we have a warehouse somewhere in them from Mammal to the customer; we send it from that storage which is closer so we save transportation cost.

How many such warehouses we need to cover Europe? It depends on the elements: transport, inventory, lot quantity, warehouse costs. In optimizing all these costs together is a logistics decision. Ex. In the case of the depots, we might have 8, 10, 12 to cover the entire Europe. What cost elements we have in the case of the distribution of projectors in Europe. First the systems cost, the processing and information cost. When there is a centre there needs to be a computer system, a financial system, etc. If there is no centre, the system cost is very low.

The more centre, the higher the system cost and this is a storage cost. If there is only one storage at the headquarters in Mammal, the cost would be relatively low. As the numbers of depots are being increased the storage cost will be very high. Inventory cost – more depots, more stock – higher inventory cost. Trucking cost – tree has trunk and branches. Trunk means main transportation, branches mean local delivery. Transport cargo from production to main distribution centre = trunk transport and then from distribution centre to each individual apartments = local delivery.

Trucking cost – the more centre, the more trucking cost. If there are no depots, each time to ship from mammal to each individual location will be very high. The more depots, the less the local delivery cost will be. The total distribution cost is the addition of all cost, this is what we call total logistics cost. When we have the total logistics cost curve it corresponds to the number 8 meaning there should be eight distribution centre. So this is the solution – 8 centre. As costs change, oil, etc, the optimal numbers of centre will change. Its not static, its dynamic (the Total Didst. Curve).

Logistics – one has to plan, implement, control. If the individual costs are changed then total cost will be different – high/low. E. G. If the interest becomes low – inventory cost will be affected as the capital will become cheap. If oil cost increase, interest rate decrease – could end up with more centre which means saving more rainspout cost, esp.. Local delivery cost. Transport cost in total will be less. Inventory cost is dependent on interest rates. May have 9/10 depots. # of depots depend on cost elements. Cost trade off is important. With depots total cost is lower, so this will save cost.

Having depot is a cost but the cost is lower than not to have them. E. G. KEA used to rent warehouses, now they build – benefit of depreciation. Next Slide Logistics cost in the USA Logistics cost include transportation cost, inventory, warehousing, distributing, etc. How much logistics cost people pay as a percentage of a country GAP – 10% in the US. Inventory cost increase faster than the transportation cost bet. 1980 and 2005- why? Better inventory control, interest rate lower so inventory cost lower. Interest was low in the rest of the world until about 2005. Deflation = lower inventory cost.

In other countries this percentage is much higher. China – 18% of GAP spent on logistics (used to be 20%). China is more representative of developing countries. So in developing countries logistics systems are not as efficient as those in industrialized countries. 9. 5% is similar in Europe and Japan (COED countries). In developing countries it’s much higher. Includes all logistics cost element – transport, inventory, etc. – big room for improvement. Next slide Customer service is another concept. Customer service is the output of logistic based, performance-based, philosophy based.

Activity based e. G. After sales service, marketing, public relations. Performance based – what is the standard? Ex. Dell computer is performance based, delivered in 48 hours – performance-based customer service. Can be measured. Ex. , ports – waiting time for ships – rush. Philosophy based on what customers require is the customer service – according to customers taste – before, during, and after transaction. What is transaction? Buy goods, pay. Customer service can take place before this, during, after. Changes in CSS level affect total logistics cost. Next slide CSS High, Low.

Cost Low/High – the higher the customer service level, the higher the cost. No ship should wait in port for more than 3 hours. This will cost a lot of money – will have to build more berths. Define customer service level. Try to minimize total cost based on this pre-condition. Why CSS level increase and inventory level affected. The higher the CSS, the higher the inventory level. Goal: increased SSL, so high inventory level. It’s a decision the company makes – customer service level is very important. (Refers to graph on the right) Try to find a way to push the line by introducing a better way of production e. . Using IT, new production method. Reduce cost but still satisfy goal – IT, use better system. Next slide: industry norm, etc. Customer’s response to stock out. Is a risk being run of losing the customer? All different ways to define the customer service level. KIT System Developed by Toyota. Called the Kanata system. When a container of parts is chosen to be used from inbound stockinet in-out in-out This is the production. Eng the assembly line how do you get different stages to work together in harmony. The system has two cards. KIT works with 2 cards – the move cards and the production cards. Hen you see the move card, time to move the container or the other card, time to produce. Work centre 1 the card moves along the production line from one work centre to the next. Toyota manage to have minimum inventory along the assembly line. They have one container of part. Cards are turning around and the parts are being moved from one centre to another. For logistics a better understanding of Just in time is very important. 9 Cot 2008 There are two circulations of cards. How do the 2 circulations make the KIT system work? Why does it work? Key elements: to reduce inventory therefore reduces the capital tied up in inventory.

Planning, staff commitment including suppliers, suppliers’ ability to meet the demand. Some inventory is kept because there is a container. One piece at a time is being used from the container so the rest must be inventory. What is the average inventory? What is the customer requirement? It’s the size of the container. The container is full – how big is the container. How is the size of the container defined? The size of the container is planned based on production. Supply 20 units at the beginning and then it’s consumed and a new container comes. The container is consumed during a cycle. The cycle is the time needed.

The average inventory is a half of the container what ever the amount it contains. Typical KIT, there should be no inventory so why is inventory kept? When we need egg rice why don’t we get exactly that? Other costs would increase too much. KIT – to keep as little inventory as possible. The size of the container depends on what? Transportation two don’t match then the size of the container needs to be changed. If the transport sakes more time then increase the size of the container and vice versa. Transport time important. Volvo had KIT between Gent and Mammal. How much inventory should be in the Volvo factory in inventory?

A lot. Why? Engine parts are made in Sweden to be used in Belgium. This transport takes one week by ship. As it takes one week, there should at least be spare parts for one week. Toyota has KIT. In the city of Toyota in Japan within 30 kilometers of the factory all Toyota parts are made there. This is the perfect KIT system. KIT emphasizes the reliability of the transport system. The two containers must have the same matching size. If parts can’t be produced in time, the cart must be moved earlier. At the moment one container is taken to the in stock point, another container load of part should be produced.

Suppose the production takes more time than when one cart comes back? Egg. If production takes 20 hours, parts can be made in 10 hrs. The time information is sent – information flow is the key. Plan to know how long production will take. In Japan, transport is guaranteed (Toyota). What is supplier commitment? Shortcomings of the KIT system? Now we assume we only need 20 parts in 10 hours, how about if the demand change and we need 30 parts in 10 hours. If the speed of production is variable the whole system is challenged. If the demand is certain/flexed then it can be planned – production rate and transportation.

But what if production rate changes? This is a challenge for some of the production down the line that may need more time and material which might have to come from far. Not easy to adjust production. Shortcomings: Does only one supplier have to be used with KIT? No, Honda uses more than one supplier. In KIT, anything that goes wrong will collapse the entire system. In KIT the entire chain has to be KIT, it can’t be at only one stage of the production. If not it forces other suppliers downs the line to keep inventory. KIT of big companies push inventory down the line if the don’t plan effectively.

Because smaller suppliers want to satisfy big companies, they are forced to keep inventory. KIT has to be along the entire supply chain. KIT may be only at the very large suppliers who push the inventory down the line to smaller suppliers. Toyota case: 1/52 weeks car production stopped because of a fire at one supplier – ripple effect. The decision of Toyota to do nothing was based on the total minimum cost of they did various studies. CCITT Case: The reliability of transportation and the uncertainty factors make logistics system key. The importance of information. Logistics concept drivers enablers, under total cost and customer level.

KIT will never work without IT. Everything works together with IT supporting the processes under total cost and customer level. The process, concept or IT cannot work separately. Information is critical for success as well as the reliability of demand. Forecast and planning important to know when demand change. Transportation is also important for this system. If the transport distance is long, the container has to be big. The size of the container is influenced by time (transport). Transport is via sea – only use air in case of emergency. If transport takes a long time or is unreliable then more inventory needs to be kept.

Gent is the biggest Volvo manufacturer. Terrines transport the parts from Sweden to Belgium. The shorter the interval of the shipping service, the lower the level of inventory required. This can make the transport expensive. So it’s the total cost that is important that will Supply chain 2 definitions (see slide): it’s a network, not port to port. In logistics there is no procurement. The 2 key words in logistics are flow and storage. Supply chain includes manufacture. Transformation = manufacturing. 1st law of dynamics – don’t create anything, only change the form. Supply chain includes much more than logistics.

Logistics narrowly defined. Supply chain is broader. Procurement also concerned with about origin of the goods. Optimization Integration Collaboration Synchronization Optimization – optimize one stage, the entire thing is not optimized so integration has to take place then consolidation then synchronization (concerted manner, happening in the same time). Relationship along supply chain. Start from optimization to synchronization. The idea of supply chain is relatively recent compared to logistics. 1960/ass people start to talk about total cost. E. G. In stage one warehousing and transport are separate functions.

Management focus was operations performance. No integration. Logistics integrated both to see how they can be optimized. This is called total cost management. So the focus changed to optimizing total cost and customer service. Customer service put together with cost. Organization design is a centralized function. 80,s integrated logistics function. This moved today to supply chain MGM. Put logistics together to get supply chain. Supply chain broader than logistics. Stage 1 -separately treated, not optimized. Optimization done within the company. Optimize internal functions – transportation and inventory.

Intra company and intra functional. This function is a logistics function. The logistics function today is moving still in the company but inter functional. Everything in the company put together – integration. Toyota inter company – higher level of integration. Toyota owns the supplier – easier to do KIT. Companies are integrated supply chain – Inter company and inter functional. Dell and their suppliers are integrated. Also Wall-Mart. The producers don’t take orders from Wall-Mart – the ‘cards’ in KIT comes from individual supermarkets. Producers can check storage level of Wall-Mart outlets.

Everything is totally integrated. No personal intervention to place order etc. The system is integrated – good supply chain – inter company. Next Slide From fragmented logistics to integrated supply chain. In the fist stage do one function at a time – inventory or warehouse or transport. In the later stage, intra functional – the whole function optimized. From fragmented logistics to integrated SCM. Suppliers, manufacturer, distributor, retailer, customer are all integrated with he other functions in the company and go to the next stage you integrate between the functions in the companies and between the companies.

This is interception and will become in the true sense a supply chain. Supply chain broader today than the logistics. SC have to work with other companies. To satisfy your customers require more than one company: need supplier, manufacturer, distributor, and retailer. E. G. Markers – their system integrated with some of their key customers – key client management. Copra’s definition of supply chain. Within an organization there is a supply chain. Egg. WHOM, teaching, supply services, library, canteen, etc. Al depots. Work together to satisfy customer. SC decisions – have to have supply chain design and strategy.

Strategic level, medium term, short term – operational, daily and based on the company’s competitive strategy. Michael porter: define competitive strategy in terms of product differentiation or cost cutting leadership. How to achieve strategy: SC strategy. Balance bet. Efficiency and responsiveness. How to respond to demand? Efficiency includes cost-effectiveness, I. E. Cheap. Fast response – this is provided at a cost. Efficiency might compromise cost. Decision making is from lower level to higher. Many competitive strategies come from SC strategy. Wall-Mart is from logistics.

Dell is from Supply chain Beer game: Once demand is variable SC difficult to maintain. KIT difficult to maintain. Long time to reach an equilibrium. In the end have to keep large inventory. Once demand is unstable KIT is not suitable. SC Design. Planning is important. SC design is about planning. When suppliers design their supply chain maritime and port services is a part of that. So mapping is important. Stockholders point is storage. Horizontal line represents move. When it stops – vertical lines = storage or waiting. Egg. BBC container tracking. This is SC mapping.

Horizontal line is lead-time (time from production centre 1 to production centre 2). Lead time depends on inventory to determine when order is to be placed. SC starts from the fiber and end with the clothes on the shelf. Through this we see pipeline length and volume. E. G, coca cola. Postponement of safety stock What is postponement? H and Ezra – they use postponement principle. Clothes must be in fashion. Don’t know faction of 09. Try to postpone as much as possible the manufacturing time. Forecast, ii, postpone. Dell also uses this strategy. Don’t develop their machines until last moment.

Can use the latest technology and the price gets cheaper. Anticipate time needed and kind of product needed. Decision is postponed to the last moment. Postponement principle can reduce stock. Has bearing on transport too. Better information flow will impact SC. Next slide Sometimes for material flow speed might not be appreciated. Transport is used as storage to adjust transport time to match with performance. Sometimes it’s because of the price. E. G. Iron ore in China, there is too much now. Information speed is always good but for material sometimes it needs to be fast and other times not so fast.

Compression of lead-time in manufacturing activity. Supply chain map – length (vertical) volume (horizontal) – try to compress it to see possibilities to reduce some of the variable. Ocean transport can’t be adjusted as speed can’t be reduced. SC design. Lead-time is transport. Port of Amsterdam case study summary Market research – likelihood to attract new carriers / guarantee – balance and supply (elasticity). When port built no congestion in Europe – more port than ships. Impossible to get firm commitment – plenty choices. More supply than demand. Demand price inelastic. Shipping companies never give guarantees.

Optimization, integration, collaboration, synchronization. Have to synchronize. Increase speed of one operations but the speed of other things remained unchanged. No synchronization. If the discharged boxes cannot be moved this is a logistics problem. The concept of logistics: most important – total cost. Port of Amsterdam forgot total cost. Typical failure case that should never have been done. Restricted berths – bigger ships cannot fit in today – size is restrictive. How wide and long should ship be. (Panama Canal has size restriction and is thus a constraint – ships in the Asian

Target demographic divides the market into groups on variables such as age, gender, family size, income, occupation and education and religion. These factors are the most common in targeting customers groups, therefore, how do these variables influence multiple retailers such as Marks and Spencer and Aldi in their planning;

Age being the leading factor upon planning since consumer needs and wants change with age, M&S being an ancient organisation which originated in 1884 tends to be very conservative and as a result it has more aged people who believe that shopping at M&S is more of a culture to them since it is a store that they have known from their childhoods, hence it more of an act of loyalty.

The age group that tends to shop at M&S ranges from 45yrs and above whereas Aldi tends to attract more of the younger generation ho have no sense of loyalty but rather hunt for where is cheaper to shop with such Aldi tend to offer weekly specials every Thursday’s and Sunday’s, hence, the younger generation is easily manipulated by special offers and discounts. Gender has more emphasis when one is shopping for clothes, hairdressing and cosmetics; however, it still influences planning.

M&S though it deals with products for all genders it appears to be more focused on the female especially in clothing where even the adverts target on the female gender than the male, this could be a result that it is a conservative organisation and hence has the belief that a woman is the home maker whereas Aldi is less gender biased, having both genders seeking for cheaper prices.

Family size of consumers may influence the planning of target demographic in a way that larger families have less spending power compared to smaller families, in planning this multiple retailers such as M&S is more focused on pleasing the elderly who have small family sizes since their families have their own homes or their children are away in university hence its planning is more focused a smaller family size unlike Aldi which is more ideal to a large family hence its planning is focused more on making special offer such as buy one get one free, to make it more cheaper for larger families to get more for less.

Income, it is due to this that a retailer will know the spending power of his consumers and upon it decide what products to accommodate, M&S having more aged people who are at the peak of their earnings, and because the children are either away from home or in the process of leaving home and the end of the mortgage is atleast in sight, they have more disposable income to enjoy for themselves plus that most of them will be living of their pension whereas Aldi having consumers who are mostly young, adventurous, keen and single most of which are college or university students if not then it is a large family with likely a mortgage to pay off if not then if they are students then hey depending on either their parents, a loan or a part time job hence have low spending capacity due to a low income.

Race, has less influence since societies these days tend to be more mixed than they used to be before fair trade and globalisation, M&S has more consumers who are originally from British since they have been here since the beginning if not then it has been a family tradition to shop at M&S different from Aldi’s which is having multi-race consumers who are less conservative who are served best by what is cheaper, thus the planning at M;S will be more British oriented giving the customers the feeling of home that they demand.

Many variables can influence the planning of a multiple retailer but age and income seem o have more power in, however most of these variables tend to be dynamic due to technology even the loyal customers and the conservatives want a product that is up to date and technology influenced products tend to be easy to manage.

Tania Ghawi Puerto Vallarta Autos Marketing Research (30pts) Research the 5 main types of marketing research and determine the best method for the below scenario. 5 Types of Market Research *Your answer should be concise and professionally written. *Minimum of 1 page typed and double spaced. *Type your answer as an extension to THIS file. * THIS IS NOT GROUP WORK! Due: Wednesday November 10 1. Surveys 2. Focus Groups 3. Personal Interviews 4. Observations 5. Field Trials Puerto Vallarta Autos has been in business since 1967.

It has always been a successful, professional organization. Since the locality has an economy based mainly upon agriculture, their traditional customer has been the aspiring Mexican consumer, usually business or professional people. Recently they have noticed that their local market has changed considerably. Puerto Vallarta has become a center for tourism and recreation for Mexicans from Guadalajara and Mexico City, as well as North Americans and Europeans. There are many beach clubs, hotels, apartments, and holiday condos.

Doreteo Dominguez, the sales manager at Puerto Vallarta Autos, feels that the company may have a problem. They do not know who their customer is and hence cannot target advertise. You are the Account Representative for Punta Mita Marketing Research Associates. Advise Doreteo Dominguez on an appropriate method of marketing research, and describe any advantages and disadvantages of such a method. Survey: with concise and straightforward questionnaires, you can analyze a sample group that represents your target market.

The larger the sample, the more reliable your results will be. * In-person surveys are one-on-one interviews typically conducted in high-traffic locations such as shopping malls. They allow you to present people with samples of products, packaging, or advertising and gather immediate feedback. In-person surveys can generate response rates of more than 90 percent, but they are costly. With the time and labor involved, the tab for an in-person survey can run as high as $100 per interview Focus groups.

In focus groups, a moderator uses a scripted series of questions or topics to lead a discussion among a group of people. These sessions take place at neutral locations, usually at facilities with videotaping equipment and an observation room with one-way mirrors. A focus group usually lasts one to two hours, and it takes at least three groups to get balanced results. Personal interviews. Like focus groups, personal interviews include unstructured, open-ended questions. They usually last for about an hour and are typically recorded.

Focus groups and personal interviews provide more subjective data than surveys. The results are not statistically reliable, which means that they usually don’t represent a large enough segment of the population. Nevertheless, focus groups and interviews yield valuable insights into customer attitudes and are excellent ways to uncover issues related to new products or service development. observation. Individual responses to surveys and focus groups are sometimes at odds with people’s actual behavior.

When you observe consumers in action by videotaping them in stores, at work, or at home, you can observe how they buy or use a product. This gives you a more accurate picture of customers’ usage habits and shopping patterns. Field trials. Placing a new product in selected stores to test customer response under real-life selling conditions can help you make product modifications, adjust prices, or improve packaging. Small business owners should try to establish rapport with local store owners and Web sites that can help them test their products.

There have been a lot of people who have contributed to my coursework whom I would like to thank in this section. First of all, I would like to thank my sister who had given me the idea to choose Vodafone as the subject of my coursework when I seemed clueless on what business to do my coursework on . Secondly I would like to thank the 25 people who took out their time in order to participant in my questionnaire. I also like to thank the staff in the Vodafone store in Bow Street, Lisburn who gave me some additional information on Vodafone.

Lastly, I would to thank my business studies teacher Mark Higgins who has also contributed to the success of this investigation. Introduction The reason I have chosen this title for my coursework is that the marketing mix was one of my best topic and the one I most enjoyed in my AS level Business Studies course. It is also because I have an interest in researching the 3 additional P’s. I have chosen Vodafone as my business for which I will do my project on.

This is due to the fact that doing research on a mobile phone company who not only started in the UK but have also ended up as the largest mobile phone retailer and one of the largest companies in Europe. It would also give me the best results and the most enjoyment in researching the company. Another factor to my choice is their location and ability to get information about them via a website and the Vodafone store in Lisburn, Co Antrim, which is the town where I live. This allows me to participate in field research. Vodafone is a multi-national company, which made the UK’s first ever mobile phone call on the 1st of January 1985.

This call was to mark the launch of the mobile industry and to transform the communications world. In their first 15 years they have become the largest company in Europe by market capitalisation and the largest telecommunications company of its kind globally. They also have a customer base of over 93 million and interests in network operators across 28 countries. 1 in every 100 people in the world own a Vodafone mobile phone, which is a tremendous feat for any mobile phone firm and surely a benchmark for others to aim for.

Vodafone also serve 12 million UK customers and deals with 50 million calls per day and 10 million text messages per day. They have roaming agreements with more foreign network operators than any other UK network, so the customer is more likely to be able to roam onto Vodafone when they come to the UK. They have also been recently reported as having the highest level of customer satisfaction, of all UK networks as well as extensive network coverage in the UK whereby they cover 99% of the UK population.

Their vision is based on continuing to understand the multiple benefits of mobile communications and aims to continue to deliver these through focused customer services and commitments to remaining at the front of service developments. Vodafone also continue to massively invest at a rate of i?? 10 million per week into building a network which allows the customer to make more calls from more places and remain assured that the quality and reliability of their service is as high as ever.

Vodafone also take steps in committing to environmental policies that are designed to minimise the impact of the network in both rural and urban areas, i. e. , with network base towers being erected. They are also concerned with other environmental issues such as using technology that is not known to be harmful to people or the environment, minimising the use of harmful CFCs and endeavouring only to purchase environmentally friendly products. Vodafone has a high-profile sponsorship program, supporting large and small organisations throughout the world.

This illustrious list includes sponsorship of Manchester United, Benetton Formula 1 Racing Team, Ferrari Formula 1 Racing Team, English Test Cricket and the Vodafone Derby horserace. I will look at the marketing mix of Vodafone due to having an interest in Vodafone’s marketing affairs, especially at its high cost promotional end. I will investigate the marketing mix of Vodafone and evaluate its effect on customers, who are ultimately the most important player to the success of Vodafone. The marketing mix consists of the 7 P’s.

Vodafone are more so concerned with the 3 additional P’s of marketing and well as the standard 4 P’s as they are marketing a service. Product: Vodafone must make sure that their product is meeting the needs of its customers. The importance of the product may be shown in a product life cycle. This means looking at a number of features of the product. This includes quality assurance, branding, the appearance of the product and a question mark over the financial viability of the product. Price: The pricing policy that the business chooses will reflect the market it is aiming at.

Prices may be set to attract customers or they may be set to profit maximise. They may even be prepared to make short-term losses in order to capture a large market share. Vodafone may use such pricing policies as cost based pricing (prices are based upon costs), market orientated pricing (prices are based upon the analysis of the market) and competition based pricing (prices are largely based on what competitors are charging for their good). Promotion: Vodafone would use promotional techniques in order to give them a competitive edge.

This could be done through above the line promotion (promotion through an independent media), which would include television advertisements, newspaper advertisements, radio and posters advertisements, to below the line promotion (promotion where the firm have a degree of control over the methods they use), e. g. , personal selling, direct mailing, trade fairs and product endorsements. Place: This refers to where the good is sold and what distribution methods are used in order to get the good to the consumer.

This can be done from Vodafone straight to the consumer (this may be done on the Internet, increasing Vodafone’s revenue as a result), through Vodafone stores or from Vodafone to a retailer, such as The Link, to the consumer. People: This helps with customer satisfaction and also refers to all people, whether it be people employed by the firm whose job it is to sell the good to consumers or whether it be people who are potential customers to Vodafone, whose needs are focused on by Vodafone.

Process: This explains the way in which the good is sold. Such examples would be purchasing goods in person over the counter by credit card, cash, cheques or direct debit, via the telephone or over the Internet. Physical Environment: Even though the good is intangible, the customer can still feel that the physical environment of the store. This can be through the outlay of the store and memorabilia such as umbrellas and Manchester United football shirts in the case of Vodafone.