Marketing Strategy and Factors of Customer Satisfaction - Assignment Example

Essay Questions

Question One

Firms acknowledge that pricing is one of the most influential elements of marketing that has the potential to change a business for good. They therefore pay too much attention on the prices at which they offer their products, more than even other factors such as the production costs (Ferrell &Hartline 231). However, competitors are the first reason why firms will be quick to realize and adjust their prices. This is regardless of why the competitor is reducing their prices, which could range from either the competitor is new to the industry and wants to get known, or maybe they have been forced to cut costs so as to boost their fading sales. However, even as firms concentrate on prices, they are certain that even if their profits will not increase, at least they will be maintained. In other cases, firms might decide to stick with their current price rather than sell at lower prices because it might be more economically viable that way. In fact, firms are warned that in some cases, price cuts might cause more harm than good. It is most common in industries where cutting prices to sell at lower costs could make customers feel that the quality of the product has also been compromised (Ferrell &Hartline 234). But in price-sensitive industries, it is critical to match the prices to those of other competitors, although it should be affordable so that it does not jeopardize the long-term growth strategies.

Question Two

In some instances, especially when demand is expected to rise sharply, firms can take to temporary discounts or reduce prices as part of their marketing strategy, with different levels of rewards or risks (Ferrell &Hartline 239,240). But this decision lies on the nature of competition in the market and the targeted population. In this case, cutting the prices can be a good idea to boost sales volumes and increase profits. However, it is also risky because it can easily damage the brand, thus making it less competitive. Quite often, firms cut their prices and rely on low turnovers, especially when they are large enough and well established. In the long-run, this is a step aimed at discouraging other competitors out of the industry. But reducing the prices below the production costs to keep away potential competitors and increase the price later is referred to as predatory pricing, and it could face legal sanctions if found to break antitrust laws through discouraging competition (Ferrell &Hartline 256). Apart from the legal disadvantage, price cuts to levels below the competition levels are an indicator to the customers that the firm is a bargain, which is more likely to chase away high-end shoppers. Maintaining reasonably high prices can be a message that the products are of superior quality, of course to be supplemented by quality product features and good customer service. Another alternative can be through the use of a loss-leader, since it is considered a legal and ethical business practice (Ferrell &Hartline 252).

Question Three

Sometimes back, people only knew how to advertise on newspapers and radio since they were the most common among the population. However, in the wake of technology it is a whole new thing where people no longer have to depend on only one source for news and for other media needs. There are too many avenues that they can turn to to get updates, yet these are the same places that they are meant to find advertisements. With the current state of technology even television, the main mass media outlet, is becoming tricky in terms of advertising. The audience has gone digital and with the increased need for economic engagement, they have practically no time to sit behind screens watching television and advertisements (Ferrell &Hartline 301). Instead, they stream specific news online and everything else that they are not interested in. with tie, radio and print press have increased so much in number that advertising in only one of them reaches very few, yet they cannot advertise in all broadcast and print media to achieve coverage. Firms are then turning to special media and other websites that have high traffic (Ferrell &Hartline 313). They are forced, now more than ever before, to sort out different ads that will be suitable for each of their audience group, even if it is promoting the same product. This is to reach out the maximum number of people from each fragment.

Question Four

The AIDA model is a selling concept that majors on explaining how personal selling works. It gives an outline of the process towards the achievement of promotional goals with regard to stages of consumer involvement with the message. These stages are:

• Attention: this is where the advertiser has to be quick and capture the attention of the audience. Very good ads could work well if they catch the attention of the audience enough to make them stop whatever they are attending to and first watch them. This is done by using powerful graphics and audios to make them catchy.
• Interest: after attracting the attention of the audience, it is important to keep them engaged so that they seek the message of the ad in detail. This is however more challenging than catching their attention, and the ad has to pay close attention to the needs of the audience so that they can be interested.
• Desire: this is closely related to interest, since the ad has to build the audience’ interest and then show them that their product can practically help them. Here, the ad should be more appealing to personal needs and wants. Linking features and benefits of the product is an effective way of achieving this.
• Action: this is the final stage and the advertiser or the ad should be keen on the action that they need the audience to take. This may include trial of the product, purchase, or repurchase (Ferrell &Hartline 314).

Question Five

Measuring the effectiveness of an advertising campaign can be a challenging exercise since the advertisement might not project immediate results in the short-run. However, it is still viable to measure how effective the campaign has been (Ferrell &Hartline 345), especially through the following parameters:

• The audience size- some modes of advertising have more coverage than others, which is directly proportional to the size of audience reached.
• Circulation- this measures how often the advertisement message was sent across the audience. Different audiences receive the ad at different times, and it should be well distributed to cover most people.
• The number of addresses- if an ad is carried out through mailing, it is easier to check how many fliers were sent around to the audiences and how many never got back.

However, there are challenges to measuring the effectiveness of the campaigns. One challenge is the cost of carrying out a measurement program that might be too expensive. There are also problems related to research, arising from time, financial, personnel, and other constraints (Ferrell &Hartline 348). There are also disagreements on what, where, and when to carry out the measurement tests.

Nevertheless, it is most appropriate to conduct the measurement test after the campaign, since it is harder to determine how effective it will be without rolling it out first.

Question Six

Role of Sales Promotion and Types of Consumer Sales Promotion Activities

Consumer sales promotion plays a central role in the firm’s marketing strategy. In collaboration with advertising, personal selling and public relations forms the company’s primary communication strategy. Sales promotion as a marketing activity increases the value of a product over a short period thus bolstering consumer buying, increases the selling efficiency and also boosts the sales force efforts. Some of the roles of consumer sales promotion in marketing include the following;

Enhance the awareness of the Product Brand

Conducting promotions for instance television, newspaper, and other media advertising helps to increase the awareness of the brand to the consumers. Many people seem to learn more concerning the firm or its products when they are frequently informed about them either by seeing or hearing. New companies need to market their products often through advertisements to appraise customers concerning their products and creating the consumer trust in them (Ferrell 153). This, however, helps in instilling brand awareness to the consumers to match their competitors’ levels.

Customer Sales Promotion Provides Information

Consumer promotions also provide information pertaining the firm and its products to the customers. Marketers may use media and advertisements to convince customers that their products have the capacity to do more than their competitors’ products. Moreover, Promotion informs customers during all levels of the purchase process. Also, firms and entrepreneurs use promotions to familiarize consumers concerning the price, the places where they can find the firm’s products and the features regarding the product (Ferrell 154).

Increases Customer Traffic and Builds Sales and Profits

Many entrepreneurs and firms use promotions for example frequency programs to boost consumer traffic. The promotion is meant to fringe benefit to customers who visit and spend more with the business. Many marketers and firms commence their frequency programs by ensuring their clients filling an application and then issuance of cards to be used by the consumers during their purchase. These promotions are mainly meant to attract more influx of the present customers (Ferrell 154). New customers may also be attracted to the promotion upon hearing about it. However, consumer sales promotions help in building sales as they are meant to enable people to try products and services. Promotions of products of high qualities target customers to return and spend more on the goods. This helps the firms in building an upright and loyal consumer base that leads to the attainment of higher sales and thus profits.

Some of the consumer sales promotion activities include providing free samples. Free samples are used to give consumers a chance to try a different product that they never wanted to purchase. Besides, it is also a way of introducing a new product or service to the market. Another activity is the giving out of free gifts, and they are mainly used to entice consumers to make more purchase. Moreover, doing a free trial will enable customers to try a new product as they try to eliminate the risk in the product (Ferrell 156). The customers are guaranteed a duration for trying the product and can return it for a refund if they are not satisfied. Also, the firms and marketers conduct contests that allow customers a chance of winning prizes such as cash and thus helps in generate more attention of customers about the product being sold. Finally, special pricing may be used to offer clients lower prices over certain duration to attract more customers.

Question Seven

Managing customer expectations to the actual product performance may result in an increased consumer traffic to the product if the customers are satisfied, a reduced consumer base for the product when the customers are dissatisfied and a regular client base if the alternative supplements for the product do not outdo it (Ferrell 160). However, for marketers to manage consumer expectations effectively, they should reward their loyal and good customers as a way of trying to retain them, discuss the solutions to the business problems openly and being able to talk to these solutions quickly. Moreover, they should provide clear timelines regarding the solving of the customers’ problems.

Customers get angry and dissatisfied if their problems are not solved quickly and lose trust with the firm. Besides, the marketers should be transparent and honest as this will affect the customer’s trust and confidence in a firm. Also, the firm should remain optimistic but as well as realistic about their solutions. Thus, the firm should set realistic expectations that should be met (Ferrell 166). Finally, the marketers should make regular follow ups concerning each level of the resolution process.

Question Eight

Customer satisfaction casts the customer’s expectations and experiences concerning a product or service. Consumers feel dissatisfied if they do not get what they expected from a company. Low expectations may make clients more satisfied than having high expectations to feel finally let down by the high expectations (Ferrell 168). Customer expectation escalates when they experience and learn about the product from promotions and advertisements. Advertising a product makes it appear more realistic that it is hence raising the consumer’s expectations. On the hand, a low or poor outcome of the product or service will reduce the consumer’s expectation. Dissatisfied clients have their expectation for the future products from the firm reduced as they lose trust and confidence in them. The zone of tolerance matches the customer’s degree of recognizing and willing to accept the alterations in firm’s performance for instance in product quality, value, and other marketing aspects that are measurable (Ferrell 160).

Question Nine

The primary objective of managing the customer’s relationship is to understand the consumer’s needs better as well as trying to retain the long-term consumer relationship with the firm that will enable the company to follow a marketing relationship strategy (Ferrell 180). The stage that customers go through in customer relationship management includes denial where the clients refuse the product or service, and it is meant to come up with new communication ways of convincing the consumer to purchase the product. However, anger arises when the consumer gets dissatisfied, and it helps the marketers to understand their capacity to produce their products (Ferrell 184). Bargaining is another stage where the consumers get a chance of reducing the price of the product; it is aimed at attracting more customers.