AB1501 Marketing Semester 2, AY 2012/13 COVER PAGE Individual Reflection Paper

Full Name: Chen Jiehui Matriculation Number: U1210092E Tutorial Group Number: TCG18 Tutorial Group Instructor: MR. LIM BOON CHONG Team Number: 5

Content Page
1. Introduction ....................................................................................................................................1 2. Lessons and Insights ......................................................................................................................1 2.1 Importance of addressing customers needs ........................................................................1 2.1.1 Marketing Myopia ...........................................................................................................1 2.1.2 Case study of McDonalds ..............................................................................................2 2.2 Importance of proper Market Segmentation and Targeting .............................................3 2.2.1 Market Segmentation being too broad ...........................................................................3 2.2.2 Aligning Marketing strategies to Target segment ..........................................................4 2.3 Importance of effective pricing strategies............................................................................4 2.3.1 Low pricing may diminish novelty ................................................................................4 2.3.2 Low pricing may lead to cannibalization .......................................................................5 3. Conclusion ......................................................................................................................................5

I, Chen Jiehui, U1210092E, declare that the work which I am submitting is original and that I have made proper referencing and citations where appropriate and required.

Signature: _______________________

1. Introduction
In this reflection paper, I would be discussing my main takeaway and insights from this module. I would do so through reviewing the different issues and problems of the marketing reports, namely from team 1, 3 and 5 (my team). Included would be more oversights of my teams marketing report as well as the process of doing it.

2. Lessons and Insights

2.1 Importance of addressing customers needs After going through the whole module on marketing, I have realised the importance of having a customerdriven marketing strategy (Suttle, 2013). Although it sounds simple, it is not that easy to design a good marketing strategy which focuses on creating values for the customers. There are many issues we may face along the way. 2.1.1 Marketing myopia One of the issues many of us faced is marketing myopia. In Theodore Levitts Harvard Business Review piece (Lewitt, 1960) about marketing myopia, he introduced the most influential marketing idea of the past half-century: that business will do better if they concentrate on meeting customers needs rather than on selling products. Indeed, many of us were too focused on the products special features and tried to sell it even if it does not meet the needs of the customers. Initially, the products might appear to be an effective solution to our customers problem. However, if we were to analyse carefully, we would realize the product might not be a realistic solution.

An example would be Team 1s product: Ice Spark. It is a foam spray that is able to lower body temperature with the layer of cool air of -9C released. Team 1 positioned its product as a precautionary measure for heat related problems. This may seem to be a valid solution - with a temperature as cold as 9 C, it is an effective way to bring body temperature down as fast as possible. However, on second thought, Ice Spark might not be practical for customers to use directly after intense physical activities. Drastic drop in body temperature after exercise may lead to muscle cramps as well as other harmful effects. Researchers have warned athletes against the practice of plunging into ice baths after exercising, claiming that it might pose a number of potentially serious health risks (The Guardian, 2012). From their marketing report, Team 1 claimed that Ice Spark has an edge over its competitors. They emphasized that their products cooling effect will be more observable by comparing the temperature in air bubbles released by Ice Spark (-9 C) and their competitors product (room temperature). Team 1 did not realise that the rapid cooling effect in which they have been marketing, may not be what their targeted customers really need. This illustrated marketing myopia where the team focused too much on the selling the features of Ice Spark and neglected their customers needs for a practical prevention. 2.1.2 Case study from McDonalds Building on my point on the importance of targeting consumer needs, I would like to discuss a case study (Federick, 2012) of McDonalds which I came across while researching on this topic. When McDonald's noticed a decline in milkshake sales, the company devised a strategy focused on their targeted customers. McDonalds started by attempting to find out the reason customers buy milkshakes. It turned out that customers most frequently buy milkshakes in the morning on the way to work or to please their whining children. In response to these findings, McDonalds recognized and focused on the

needs of their customers by increasing the thickness of the milkshake so that it will not melt on the way to work and added child size milkshakes. McDonalds has successfully countered marketing myopia by making improvements which focus on meeting customer needs. If they attempted to increase sales of their milkshake by introducing boozeinfused milkshake as offered by other burger restaurants (Raabe, 2012) , results may backfire. Such booze-infused milkshake may be innovative. However, they would not be suitable for customers who are driving to work and even more so for underage children. 2.2 Importance of proper Market Segmentation and Targeting Another issue which many teams had problems with was market segmentation and selecting the right target customers. Marketing segmentation is an essential part of any marketing plan as it enables one to gain a better understanding of the customers needs (Kotler, 2011). As mentioned above, it is important that we understand and target those needs. Without proper market segmentation and targeting, we may risk wasting marketing efforts on a population who does not require or value our product/services. 2.2.1 Market segmentation being too broad In my teams proposal presentation, it was pointed out that our market segmentation was too broad and not specific enough. I realized that if the target segments are too broad, there is the risk of missing out the key customers who are more likely to buy our product. Also, it may result in increased marketing cost since the message has to be communicated to more audience, leading to an unprofitable venture (Riley, 2012). By segmenting broad markets into smaller groups, the target customer can be reached more easily and at lower cost. Our team has responded by narrowing down our target to women who requires high heels frequently: business women and students who have to do a lot of formal presentations.

2.2.2 Aligning marketing strategy to target segment Not only is it important to do proper segmentation and targeting, it is also essential that we align our marketing strategies to target the specific segments. Even if we identified the correct target segments, it would be useless if positioning of our product does not meet the needs of the target segments. In my teams case, Cambiare Heels, offers 4 different categories, namely: Formal, Cute, Classy and Gorgeous. Our marketing strategies seem to be targeting stylish and health-conscious women instead of the segments in which our team had identified. Our identified target customers, Business women as well students, would generally require only heels from the formal category. I feel that my team was too narrow-minded during selection of target segment (business women) due to feedbacks from the proposal presentation. We narrowed down our target segments too much and failed to identify other potential customer segments such as fashionable-conscious women who also wear heels regularly. 2.3 Importance of effective pricing strategies Lastly, pricing strategies was another major problem faced by many. If used correctly, pricing can be a key strategic tool for creating and capturing customer value (Kotler, 2011). On the other hand, improper use of pricing strategies may lead to problems such as diminished value and cannibalization. 2.3.1 Low pricing may diminish novelty An example would be my teams pricing strategy. In view of our direct competitor, Camileon heels ($79.90-$129.90), we have decided to price our products at a $50 - $100 which is in the lower range of Guesss shoes pricing ($50 -$500) to gain market share. However, by pricing our shoes too low, we may diminish the novelty branding of Guess. Furthermore, my team did not take customers perceived value of our convertible heels into consideration. I feel that our team should have adopted customer valuebased pricing instead. After all, the customer will decide whether a products price is right (Kotler, 2011)

and if they will buy them at that price. Since, our convertible heel has more feature, customers perceived value of this new product line should be higher than that of normal Guess heels. Therefore, we should price our product at a higher price, in alignment with customers perceived value. 2.3.2 Low pricing may lead to cannibalization Similarly, Team 3 pricing strategies have raised the issue of brand dilution and diminish novelty. It has also raised the issue cannibalization. They adopted a penetration pricing strategy where the price charged for KOInstant is set artificially low to gain market share from the instant tea market. KOInstant is priced at $8 per box of 12 sachets (approximately $0.70 per drink). This is too low compared to the milk teas sold at KOI retail stores which are price at $2.40 for original and $2.90 for hazelnut flavoured. Furthermore, team 3 emphasized that there is no quality differences between KOInstant and the milk teas sold at KOI outlets. If there is no quality differences, KOInstant will become a strong substitute product with a much lower price, encouraging customers to buy only KOInstant and not from KOI outlets. This would erode profits from selling milk teas at existing KOI outlets significantly. Unless KOI has intention to venture more towards the instant tea market and reduce number of their retail outlets, KOIstant would not be a very feasible product line if priced at such a low price.

3. Conclusion
From the several issues mentioned above, we can see that most of our problems stem from our lack of understanding of the marketplace and customer needs. As this forms the foundation of the marketing process, we face problems at later stages of the process because of misconceptions and the lack of information. Hence, it is important for us to perform the necessary research and understanding before we proceed to the designing process. Also, during the designing phase, we would need to go back and relook at our understanding of the marketplace from time to time to ensure that our strategies are always

congruent with fulfilling customer needs. And only when we continually re-assess our understanding then we can design a customer-driven marketing strategy to its best.

Bibliography
Federick, L. (2012, January 13). Marketing myopia and Mcdonalds. Retrieved from http://iuspringm510.blogspot.sg/2013/01/marketing-myopia-and-mcdonalds.htm Kotler, P. A.-M. (2011). Principles of Marketing - An Asian Perspective. Singapore: Pearson. Lewitt, T. (1960, July-August 1960). Marketing Myopia. Harvard Business Review, 38, pp. 24-47. Raabe, S. (2012, October 10). Booze-infused milkshakes boost Colorado "better burger" chains . Retrieved from The Denver Post : http://www.denverpost.com/business/ci_21848620/booze-infused-milkshakes-boostcolorado-better-burger-chains Riley, J. (2012, September 23). Market segmentation. Retrieved from http://www.tutor2u.net/business/marketing/segmentation_why.asp Suttle, R. (2013). Customer Driven Marketing Strategies. Retrieved from Chron: http://smallbusiness.chron.com/customer-driven-marketing-strategies-3227.html The Guardian. (2012, November 8). Bathing in ice after intense exercise 'does not work', says new report. Retrieved from guardian.co.uk: http://www.guardian.co.uk/sport/2012/nov/08/ice-bath-exercise-newresearch