1. Any product or service occupy a unique position in the market by … .

2. Products similar in all important respects are called … because … .

Read text 7 and answer the question given in the title.

Text 7. Why Does Re-positioning Occur?

When Johnson and Johnson discovered that sales of their baby powder and baby lotion were exceeding the levels that could be expected purely from babycare use it became obvious that a much wider market was being tapped. Subsequent research revealed that women were buying these products because they had assumed, logically enough, that any product which was gentle enough for a baby's skin would probably also be kind to their skin.

As a result of this discovery, Johnson and Johnson launched an advertising campaign aimed at women. This exploited the company's strength in the babycare market with appeals such as 'Baby yourself - be a Johnson's baby'. Later campaigns targeted men when it was realized they were also using baby products. Johnson and Johnson capitalized on the discovery that their products appealed to adults and were able, as a result, to re-position their products in these new segments.

In this case, the re-positioning occurred because the products came to be used in a number of segments within the toiletries market and no longer just in the babycare segment. In other cases, re-positioning may be necessary when shifts in taste, technological advances or the introduction of a successful com­petitive product result in a product becoming seen as out of date.

A classic example of a product which became hugely successful once it was re-positioned is the Marlboro brand. Formerly marketed as a filter cigarette aimed at women, the 1954 re-positioning, linked to a new advertising campaign featuring the familiar Marlboro cowboy, created the second most widely-recognized brand name in the world, after Coca-Cola. In recent years, the successful re-positioning of Lucozade, which transformed the brand into a main-stream soft drink product, provides one of the best examples of this strategy.

Unit 3. The Marketing Process

Read text 1 and write out the main steps in marketing planning process.

Text 1. The Marketing Planning Process

In his book “Marketing Plans” Malcolm McDonald points out that 'During periods of high economic prosperity there was little pressure on companies to do anything other than solve operational problems as they arose. Careful plan­ning for the future seemed unnecessary. However, most companies today find themselves in increasingly competitive markets, and there is a growing realiza­tion that success in the future will come only from patient and meticulous plan­ning and market preparation.' What, then, does planning involve?

In contrast to the day-to-day matters which need to be dealt with imme­diately, planning focuses attention on issues that are likely to be important in the future. Working towards goals that have been set forces managers to look beyond the pressing operational problems which can so easily occupy all their energies. Companies that adopt such a proactive approach towards change, which means that they anticipate rather than merely react to change, are obviously in an ideal position to exploit any new market opportunities that may arise. This forward-looking orientation results in managers having a better long-term vision of where the company is going.

Unfortunately, however, what often passes for marketing planning is simply sales budgeting and forecasting. In some cases, managers set arbitrary profit goals without any thought as to how these targets are to be achieved.

Marketing planning involves gathering information on an existing situation, analyzing both the internal and external factors affecting the company's perfor­mance, and making some basic assumptions about external trends that are likely to occur in the future. The results or objectives that firms hope to achieve and the actions or strategies that are needed to implement these are then decided. Finally, the strategies adopted are evaluated in relation to the desired objectives. The time scales involved vary greatly from industry to industry. The entire planning process may take as little as three to six months in the case of the fashion clothing industry, whereas the introduction of a new jet engine, high speed train or car may require planning over a period of fifteen years or more.

(a) Situation analysis. The first step in the marketing planning process is to examine the firm's existing situation, which essentially means finding out, 'Where are we now?' This involves carrying out an internal audit of the organization's own resources and capabilities, together with an external audit of the factors in the wider business environment which are likely to affect the company's performance.

(b) SWOT analysis. When all the information has been gathered together, it is then subjected to a SWOT analysis. The aim of this is to pick out from the mass of data collected the factors which relate most closely to the company's activities. The SWOT analysis highlights only the impor­tant internal strengths and weaknesses as well as the key external opportunities and threats.

(c) Make assumptions. At this point, it is usually necessary to make some assumptions about external factors which are likely to affect the company's performance. For example, decisions will vary greatly depending on whether it is assumed that prices are likely to increase by 15 per cent or decrease by 15 per cent in the next few years.

Assumptions might include statements like: 'The level of imported goods is likely to increase by 10 per cent during the next two years' or 'The entry of several new competitors into the market over the next five years is likely to force prices down by 20 per cent'.

Assumptions should be as accurate and specific as possible as decisions obviously cannot be made on the basis of vague suppositions. Only those fac­tors which are likely to have a critical impact on the firm's performance should be taken into account.

(d) Set objectives. The setting of objectives enables firms to answer the key question of ‘Where do we want to go?’ People are much more motivated when they are working towards a particular goal like passing an examination, getting a promotion, saving up to buy a car and so on. Organizations benefit from setting and pursu­ing goals in the same way as individuals do. On a practical level, the existence of clear objectives improves co-ordination between departments and prevents potentially disastrous situations like the personnel department reducing pro­duction staff at a time when the marketing department has introduced a new advertising campaign designed to boost sales.

Most well-run companies set objectives which are challenging yet realistic and try to involve staff at all levels in formulating these objectives, although broad strategic objectives, such as a decision to expand market share in Europe would invariably be decided by senior management at corporate level.

Marketing plays a central role in achieving any business objective. If one accepts like management writer Peter Drucker, that the purpose of business is to create a customer, it becomes clear that marketing is the key element in all business objectives. In fact, it is difficult to see how any overall corporate objective, such as improving profitability, could be achieved without the involvement of marketing. In other words, an improvement in profitability will only occur if specific marketing objectives have been achieved, e.g. increasing sales volume, improving advertising effectiveness and so on.

If these marketing objectives are to be implemented fully, it is important that they are stated in terms which are quantifiable, i.e. capable of measurement. An example might be to 'increase the market share of product A by 10 per cent within the next two years'. Objectives need to be worded as precisely as possible otherwise it is impossible for staff to know when they have been achieved.

(e) Decide strategies. Once definite marketing objectives have been agreed, the next step is to decide on the strategies that will need to be adopted in order to achieve those objec­tives. This involves the firm working out ‘How do we get where we want to go?’ Strategies are the actions and decisions which need to be taken in order for the eventual objectives to be accomplished. Strategies are in turn translated into tactics These are the detailed actions and decisions, taken on a day-to-day basis, which are needed to implement the strategies. In practice, marketing strategies tend to revolve only around products and markets. The strategies which can be adopted by firms include:

• Selling existing products to existing markets.

• Selling existing products to new markets.

• Developing new products for existing markets.

• Developing new products for new markets.

Strategies relating to any element of the marketing mix (i.e. product, price, place and promotion) ultimately relate to these four strategies. For example, the decision to introduce a price discount might be taken as a result of a firm deciding to sell an existing product to new markets.

(f) Measure results. Once the marketing plan is in operation, the results are monitored closely in order to assess whether the original objectives have been achieved. This will establish whether, for example, Product A actually did increase its market share by 10 per cent within two years. If the results reveal that there is a marked discrepancy between actual and planned performance, the entire planning pro­cess would be analyzed in order to determine the reasons for the variations. The process may then need to be modified at one or more stages in the light of these findings.