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The Benefits and Costs Essay Sample

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The Benefits and Costs Essay Sample

Successful organizations realize that companies wanting to exist and do business profitably by providing customers with the right product, in the right time, at the right place with a good promotion is very importance


Goals of marketing is to stimulate customer, maximize consumer by meeting customers’ needs and make them feel pleased with products , after-sales services and following benefits of company . Furthermore, customer satisfaction is basis for purchasing again; buy more the same item or more expensive items and setting up trust, loyalty for the brand name and the producer. This result is important because it can lead to increased sales and higher profit. If customers are satisfied they may:

• Think this product is the best and most suitable for them • Don’t want to change other brands
• Use this product for a long time and stick to product • Buy again from the same supplier
• Buy more of the same stuff , or more expensive stuffs • Become a loyal customer of company
• Bring a stable turnover / profit for company
• Recommend to their friends about advantages of product

According to all this benefits, Canon Inc. Vietnam always attach special importance to customer care by opening two customer service centers at Ho Chi Minh City and Ha Noi with the main roles such as supplying services before and after sales , professional warranty services and consulting for customers . Mr. Mike Asao , Manager of Canon Singapore in Vietnam said : “Our goal when setting up the service centers in Vietnam to continue to support customers and add value for their products. Meet the growing needs of consumers is always a top priority of us.” (www.canon.com.vn)


It is far more expensive to convert a non-buyer (buy 0 product) into an occasional buyer (buy 1 product) than to turn an occasional buyer into a frequent buyer (buy from 2 products) The company should have a budget to maintain a certain amount of customers or campaign for launching new products or forms of promotion, personal selling that not only spend a lot of money but also waste time. Costs maybe involve some or all of following: • Advertising

• Personal selling
• Initial discounts
• Agent commission
• Physically transporting

Advertising is a form of communication which is paid to perform. Additional advertising aimed at persuading or influencing impact on buyers. Advertising messages can be sent to customers in many different media such as newspapers and magazines, radio, television, internet …to introduce a new product, convince customers to buy a new one and gain high profit. Companies have to spend a lot of money for advertising.

Personal selling is oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to “close the sale”. The main disadvantage of personal selling is the cost of employing a sales force. Sales people are expensive. In addition to the basic pay package, a business needs to provide incentives to achieve sales (typically this is based on commission and/or bonus arrangements) and the equipment to make sales calls (car, travel and subsistence costs, mobile phone etc)

Initial discounts are used to reduce the percentage of money for the outlets, shops or customers that buy a large amount of goods. It helps to encourage buying or paying cash directly.

The companies need agents to sale their products and have to pay them a commission on whatever sales they make

Transporting between the markets also take a considerable cost. The cost of physically transporting goods is estimated as high as about 25% of the cost of a product.

Almost organizations are using these methods to marketing and Canon Inc. is no exception

5 – What are the micro and macro environment factors and the effects on Canon’s marketing decisions?

The marketing environment gathers agents and refers the forces outside of marketing that effect marketing management ability to build and maintain successful relationships with target customers. The marketing environment including both the micro environment and the macro environment

The micro environment

The micro environment consists of factors that affect directly to an organization and its activities in relation to a specific market and any internal aspects of the organization such as: customers, competitors, suppliers and intermediaries.

The chart above describes the essential factors of micro environment.

( Suppliers is businesses or organizations that supply the input elements of manufacture process such as machines, equipments, raw materials, fuel, workforce, finance and so on for the companies and as well as the competitors . The suppliers play an important role in the production line; choosing a right supplier will be related to price, quality of product and the regular course of production as well. Canon Vietnam Co. Ltd. has four large manufacturing factories in Hanoi , Bac Ninh and Hung Yen so it is essential to find the suitable component suppliers that can meet the strict requirements of company. Mr. Sachio Kageyama , general director of Canon Vietnam said: “ Canon has found 90 local suppliers , a figure is considered compared with seven Vietnam suppliers in 2001 . However, the amounts of components from these suppliers just satisfy 37% of company’s needs, almost units are valuable and not demanding high technique. Canon has to import the remainder from China (40%), Singapore, and Thailand… We have not found Vietnam suppliers for some products requiring an high accuracy such as circuit boards , motors , metal mold …Many foreign investors follow Canon to Vietnam , but that is not enough” (http://www.shtp.hochiminhcity.gov.vn/webshtp/tintuc/default_opennew.aspx?news_id=1210)

( The intermediaries maybe are marketing agencies who help to find the right markets, right consumers and introduce the method to approach this market. The intermediaries are also the wholesalers, retailers, and agents. The businesses need to use the intermediaries because they can guarantee and create many good conditions for customers such as places, time and procedure during the process of purchasing items. There are many advantages for storing goods, as well as satisfying customers whenever they need. They also make many easy conditions to deal a contract, deliver and transport products for customers. If an enterprise undertakes all of intermediaries’ work the cost will be extremely large and the risk of capital will be greater. Canon Vietnam Co. Ltd. has 300 authorized service partners in Vietnam that assume to distribute the Canon products throughout country.

( A customer is the purchaser of a product or service. Every person who enters the business is a potential customer in the future. Even though they may not buy something today, they may buy something tomorrow so the company should respect and satisfy them in the best way. The customers not only purchase products of one enterprise but also purchase of the others therefore finding out the customer’s needs and trying to service them are the leading mission of each company. There is much different kind of customers with various behaviors. The customers buy products for their family, friends, company, sales and themselves. The customer’s need and predilection always change over time and space so the business should predict the factors leading to this change and catch consuming trends. Canon Inc. has captured the changing and produced items which are suitable for many different customers in Vietnam and other countries. For example: the Vietnamese young people who like the high-tech products with high usability, attractive colors, stylish design, convenience, good quality and especially low price

( Any businesses also trade in a competitive environment. The businesses should know clearly about their markets that they are aiming and the competitors in this market. The competitors are not just enterprises doing the same products but in the others. Any organizations that sell products relating to your products or these products attract your potential customers that are your competitors. • The competitors of different industries

• The competition between competitors in the same industry • The competition between different brand name
The company should get the information about their competitors that will ensure you have a good position in the market. Firstly, finding out the competitors’ activities help to make a right marketing decision to survive and develop. In addition, knowing what the competitors are doing in business, the company can be sure prices are competitive, marketing strategies are suitable and the products attract customers enough. Secondly, researching who are company’s competitors and understanding the difference between businesses that help the company try to motivate continuously about quality, packaging and following benefits. If the company want to success in their own business the products must be different from the same kind of products or have a salient features compared with the others. When a new business enters the market they will bring new technologies, new marketing approach and innovation in their products. Any factors will significantly affect to your company.

As a result, this competition will help the companies grow together and it also expects the firms must bring out new efficient marketing methods and study to renovate products. Moreover the customers for themselves always search to a better choice and they purchase less when there are too few options thus the competition between rivals make great advantages for customers in prices, quality, choices and other benefits. In Vietnam, Canon Inc. have strict competitions in the high-tech industry to occupy the market share. The competition from the other companies such as Nikon, Sony, Samsung, and Kodak …occurs drastically everyday, they continuously launch new products with new technologies and more attractive. Therefore, Canon has to make the intelligent decisions for their goods which offer users not only convenience, high quality and versatility but also a unique lifestyle.

( Interest groups are a group or organization that care about activities of a business and affect to achieve the business’ objectives. There are different interest groups:
• Financial group
• Interest group in media communication
• Interest group of government
• Local communities
• Internal communities

The macro environment

The macro environment includes four key components: political / legal, economic, social / cultural and technological (PEST factors) that influence an organization in wide scope and indirect control. The market or environment continuously changing and the company have to be able to adapt. These factors affect to the organization decision making, its strategies and also product development but that are outside the company’s control so the business have to research and observe to make timely responses.The effect of macro environment to company’s marketing performances that are identified by the chart below [pic]

The political factors include:
• Tax policy
• Employment laws
• Environmental regulations
• Trade restrictions and tariff
• Political stability
( The political forces are the most important factor influencing considerably on local businesses or foreign businesses that want to launch new products in a country. The institutional, legal factors not only create the advantages and opportunities for organization but also threaten the viability and growth of a business. When trading on a new government, the organizations will be required to obey the laws in this area. The policies can affect directly to product price and marketing plans.

( The stabilizing in a political environment of a country is one of the first elements considered by foreign investors. Institutions have a high stabilizing can create good conditions for business and in the contrast a nation is insecure and often occurring conflict, crisis that will have adverse effects to businesses’ activities on its territory. Vietnam was honored as one of the most peaceful countries in the world at the Global Conference of the Peaceful Nations that was organized in Washington, America from 1st to Nov 3rd 2009. Vietnam keep the peace through by developing the country in all fields, especially economy and improving people‘s life standard, life condition (http://www.vnexpress.net/GL/The-gioi/2009/11/3BA1541C/). Vietnam continues to maintain the stabilization of macro-economic policies to attract investment and create the trust of investors to government business policies that is one of the core issues for Canon Inc. decides to invest and build factories in Vietnam. (http://www.mofa.gov.vn/vi/nr040807104143/nr040807105039/ns080125095946?b_start:int=10)

Vietnam is a socialism country which has a mixed economy operating under the market mechanism and state intervention. The mixed economy system ensure the fair, equal competition, guarantee the customer‘s interests and also protect the social benefits. (The government promulgated a lot of laws, ordinances, and decrees such as: Corporation law, Business law, Investment law, Banking law, Commercial law, Tax law, Labor law, Antidumping law… (The government policies: Fiscal policy, Monetary policy, Salary policy, Income policy, Export/ Import policy, Commercial policy…. All the laws and policies have huge influences on activities of business. Tax law includes export/import tax, turnover tax, business income tax, value-added tax (VAT)…effect directly to turnover and profit of business.

The economic forces consist of factors that impact to purchasing power and expenditure structure:
• Economic growth
• Interest rates
• Exchange rates
• Inflation rates
Analyzing the economic factors will help organization to identify the customers and decide investment strategy for each industry or sector. For instance: economic situation development will make people’s income increase and affect their purchasing behavior. There are decrease percentage of paying for foods and a stable rate for spending on house, subsistence expense while people spend much for clothes, transport, entertainment, healthcare and education. In Vietnam, when people’s income raise there are different things by geography region, the people in the North like designing house and buying home furniture compared with the South interest in foods more.

( Currently the world economy is gradually rehabilitating; growth speed of Vietnam GDP is the highest in Asian (respected by the end of 2009, increase from 5% to 5.5%). This result is influenced by fiscal policy and monetary policy to support businesses and promote economics through by decreasing business income tax and assisting interest rates (4% in a long term) for production and business to overcome difficulties, lower product cost, and increase competitiveness in the market Government has the policies to continue to support policies, stimulate practical support to both restore growth and promote economic restructuring; the businesses have to adapt gradually with market interest rates dominate high inflation. (http://vovnews.vn/Home/Uu-tien-ngan-chan-lam-phat-phuc-hoi-tang-truong/200911/127095.vov)

( In each country, society will shape the particular culture, lifestyle, and views life. The culture of different countries, areas will rule to customer’s buying behavior and marketing strategies. Researching the different between social environments will help company to find the suitable marketing plants and have a right manner in commercial transaction. In the trends of global integration, the marketers have to overcome the cultural barriers such as viewpoint, language, and custom…to satisfy customer’s needs in different markets (design product, advertising…) without taking risk of cultural differences. For example: Canon Inc., a foreign company, which wants to launch a new camera in Vietnam by a nationwide advertising campaign expecting the company must know clearly about Vietnamese culture, tradition and awareness of beauty to have appropriate marketing. Vietnamese most like colorful and bright things and respect family values so that the advertisement of a digital camera with a lot of beautiful photos of a happy family will be welcomed more than pictures of sexy girls.

( Science and technology have created the magic for human life, especially for high-tech industry, the technology plays a huge role in creating new products. The development of science and technology contribute to change people’s lives, the technical progress extremely fast and impact to improve quality, design of products. The innovation of technology also makes a competitive pressure for all companies in the market. They should invest seriously for researching and developing their products if they want to survive and compete with the other companies. Therefore, in order to ensure continued sound growth, Canon strives to enhance its research capabilities with new technology and explore new business domains. Accordingly, the company established the Leading-Edge Technology Research Center, an R&D base at its headquarters in Shimomaruko, Tokyo, equipping the facility with cluster computers, microscopes supporting nano-level observation, and other state-of-the-art equipment.

The Center supports the research of cutting-edge technologies for displays, intelligent image processing, healthcare, and nanotechnology. (http://www.canon.com/technology/canon_tech/category/future.html) The revolution of technology is making product life cycle shorten, especial the digital products (cameras, mobiles, televisions and so on). Previously the product life cycle is measured by year but nowadays it is counted in several months. As a result, the consumers will benefit most from these achievements of science – technology. They have many choices between different products which are the most suitable for their income, taste and needs but the customers may be feeling backward after buying a product and having new products with higher technologies next few months. Accordingly, the customers will be confused to decide to purchase an item

6 – What is market segmentation and the benefits or limitations of each method?

Market segmentation is “the subdividing of a market into distinct and increasing homogeneous subgroups of customers, where any subgroup can conceivably be selected as a target market to be met with a distinct marketing mix”

Market segmentation is like a tool which helps the companies divide the potential markets into small customer groups that have the homogeneous needs, behavior, consumer habits. It also help the business choose the right markets efficiently. Market is segmented by following methods:

• Geographic region, urban, suburban, population density • Demographic: age, sex, marital status, socio-economic status, social class, education. • Psychographic: lifestyle, personality, self-image, value perceptions, motives • Behavioral: usage rate & volume, occasion when used, brand loyalty, benefits sought.

There are several methods to segment markets, Canon has used different ways to separate and approach the target market. Markets are segmented by geographic scope: foreign market, domestic market, region, city, country…. This is the popular method because the difference of consumer’s needs in each area is separated by border line, local culture, local character, economic. Canon based on the variety of customer’s needs in Ho Chi Minh City and Hanoi, two large cities with a dense population to launch different marketing plans for each product

The company can use demographic method to segment the market such as:

( Age: customer’s needs are very different in each age. Teenagers like colorful things with fashionable designs while the elders who like simply design with neutral or dark colors.

( Sex: the company should grasp the expenditure behaviors and personal taste between male and female. For example: the males are attracted by high-tech specification, applicability, durability and strong designs of products and they are willing to spend a lot of money for their favorite stuffs; compared with the females always like something look so cute and beautiful appearance .

( Income: it is an important factor to segment the market. Obviously, the customers who have different income will have different concerns, expenditure behaviors. For this reason, the company should create product lines that are suitable for customers have high or low income.

( The company also can classify customers according to circumstance when used and benefits sought. The customers will be segment into groups such as people purchasing for their office, their family or for offering as a gift. The business need to analyze the benefits that customer are seeking and give them the following services. For instance: Canon printer product line SELPHY ES3 & ES30 possess good looking shapes that best fit in home interior and have been designed for portability with newly designed carrying handle. The another printer line Laser Printer LBP3250 and the color laser printer LBP5050 are best suitable for home and small offices , with better features and quicker printouts while assuring both quality and quantity.

Nowadays, the organizations realize that they can not approach all the customers in the market. There are a huge number of customers who live in different areas and have varied wants, needs. In addition, the company has limited possibilities to meet all of them so the marketing segmentation is very important for company to determine their potential market efficiently and profitably.

The benefits of marketing segmentation:
• Improved customer relations
• Accurate marketing mix
• Resource allocation
• Competitor analysis
• Strategic marketing planning

The limitation of segmentation
• Increasing cost of marketing.
• Getting difficult to select the best method for marketing segmentation. • Getting difficult to estimate how suitably or widely to segment. • Being attracted to markets that the company is not able to satisfy

7 – The factors which will influence the choice of the targeting strategies for the company’s products

A target market is a market or segment selected for special attention by an organization (possibly served with a distinct marketing mix) There are 3 policies of targeting strategies an organization can apply • Undifferentiated marketing

• Concentrated marketing
• Differentiated marketing

( Undifferentiated marketing is to product a single product and hop to get as many customers as possible to buy it; segmentation is ignored entirely. This is sometimes called mass marketing.

When using this option, the company decides to ignore the difference of marketing segmentation and try to fulfill a huge amount of customer. The company makes a particular product with a common marketing strategy and an aim to attract entire market. This method has advantages to save money for marketing research, diversifying product lines, advertising… and also have a large number of customers in whole market. However, firstly the business can get a trouble how to create a product which satisfies all customers Secondly, if all businesses put the undifferentiated marketing into practice they will ignore the other smaller markets leading to inefficient marketing.

( Concentrated marketing: the company attempts to product the ideal product for a single segment of the market. In the case of concentrated marketing the producers will select one of the market segments and concentrate all their efforts for that market. The organization can know clearly about the customer’s wants, needs and focus on finding a highly specific market so the company position will be improve in a high rank. By contrast, the major disadvantage of concentrated marketing is the business obviously base on a single segment of a single market. It is so dangerous because if the market fluctuates it also will influence the company immediately and the business can ignore the other trading occasions.

( Differentiated marketing: the company attempt to introduce several product versions, each aimed at a different market segment.

The organization will diversify their products by approach to different market segments and apply various marketing strategies for each target group. Choosing this option will help the business to meet their different kind of customer’s needs, extend their market and increase sales. However when using this method the company have to spend more money for marketing activities and producing (more product design, promotion cost, researching to create new products cost and so on)

The company should select a best suitable strategy to invest profitably that will depend on many factors

1. Resources and objectives of the business

It all depend on the finance, workforce, management ability and marketing activities of company to choose the right method. The small business should follow the concentrated marketing to reduce competition of other company and just focus on potential customers. The large company which has broad extent and strong resource usually applies the undifferentiated marketing and differentiated marketing.

2. Diversification of product and market

The company use differentiated marketing required to product different product lines aiming to many kind of customers who have unlike demands, income, lifestyle, social position… so that the customers will have many choices and be satisfied in different ways. The company must follow the marketing segmentation factors to allocate the market

3. Product life cycle

The profitability and sales position of product can be expected to change over time that require company have appropriate strategies following each stages of life cycle (introduction, growth, maturity, decline)

4. Marketing strategy of competitors

The business should know information about competitors and research their competitive plan and ability of rival to give suitable marketing decides.

Canon Inc. has decided to develop their target market according to the differentiated marketing. The company product many product lines that is suitable for different kind of customers and they sale the products on over the world. For example: Canon has various digital camera lines for amateur, professional photographers or high-income and low-income customers. They aim to all of customers and try to satisfy all their needs.

8 – What are buyer behaviors and the effects to marketing activities?

Customer buying behavior can be defined as, “the decision processes and acts of individuals involved in buying and using products or services” The business often research the customer behavior to understand the personality, demands, habits… and all the outside elements that direct or indirect affect to the customer behavior. The buying behavior of customers in Ho Chi Minh City and Hanoi will have the differences and it is influenced by following factors: • Cultural

• Social
• Personal
• Psychological

( The cultural factors including:
• Beliefs
• Customs
• Language
• Religion
• Education

The culture is formed and improved over many generations. It is the basic factor and deep effect to customer’s demanding and behavior. Each culture of a country consists of different subculture: ethnic origin, race, religion, geography, life style, life environment, beliefs, customs, taste, and attitude. The culture influences deeply to customer taste, behavior, choosing to purchase the products. In order to know customer’s needs the marketer should analyze, distinguish the several of customer culture and the response to their products.

For example: Vietnamese in HCM city and Hanoi have their own shopping opinion and custom. The consumers in HCM city work hard and enjoy their life at the present while the people in Hanoi live and save money for the future. People said: “The Hanoi people earn 10 coins, just spend 1 compared with the people live in HCM city that earn 10 but spend 11”. This statement describes the difference from buying behavior between two regions.

( The social factors include:
• Reference group
• Family
• Social role & status

The reference groups is groups “with which an individual identifies so much that he or she takes on many of the values, attitudes or behaviors of group members”

• Primary membership groups: family, friends, neighbors, work colleagues… who are familiar or have an interaction directly with the customers • Secondary membership groups: trade union, religious groups and professional societies that tend to be more formal and less interaction than the primary groups • Aspirational groups: an individual who want to be a member belongs to • Dissociative groups: whose valures and behavior the individual rejects

The reference groups often impact to the point of view, attitude, lifestyle and consumer behavior of a person. For example: Consumers in Hanoi listen to the comments of friends, family and influenced by the opinions of others and by the prejudices of society while consumers in Ho Chi Minh less interested in the opinions of others and not follow by majority

Another major social influence is the family. Members of the family are the most influential reference group. There are main types of family:

• The family orientation: grandparent, parent, children • Procreation family: husband, wife and children. This is the important group in purchasing decision and the members have different dominated roles in each kind of products such as:

♦ Husband dominated: life insurance, cars and television ♦ Wife dominated: washing machines, carpets, kitchenware and non living- room furniture ♦ Equal: living-room furniture, holidays, housing and entertainment.

For instance: the wife will undertake shopping foods and other stuffs for family but the husband will keep the strong role in buying a new camera or technology things because of his knowledge, experience about this high-tech products.

People can involve in many groups – family, clubs, and organizations. Position of the person in each group can be determined based on the role and status of them. The social role and status can impact to their buying behavior. The people have a high social class that trend to buy luxury products representing for their position.

( The personal factors include:
• Age
• Occupation
• Economic circumstance
• Lifestyle

The personal factors affect directly to the buying decision of customer. In different stage of ages, the needs and behavior of people are also different and the businesses depend on it to plan marketing strategies for each age.

There is relevance between occupation and economic circumstance. The marketer can segment the customer into small groups with various jobs and income to launch the suitable products. For example: Canon has two product printer lines SELPHY ES3 & ES30 with different prices and functions to satisfy many customers who have different demands and income.

A person’s lifestyle is a way of life that expressed by their activities, manner, behavior, personal opinion. They impact to the way of purchasing. For instance: Hanoi people enjoyed the high quality product / brand goods. They are attracted by easy products, especially high-value products such as mobile phones or cosmetics. They are willing to pay high prices for high quality products. Meanwhile, consumers in the Ho Chi Minh who tend to “buy fast” – they will buy what they need at that time. They will only spend money for things they need rather than buy to show off with people, they like to spend money to buy more products essential.

( Psychological factors include:
• Motivation: an inner state that energizes, activates or moves, that directs or channels behavior towards goals • Perception: the motivation promote people act but human act depend on the perception of world • Learning: as a result of studying process and summarizing experience about life • Beliefs: customers’ beliefs about a brand name, company image is very important for the business • Attitudes: assessing the products is bad or good will affect to the buying decision of customers. As a result, through analyzing the factors influence to the customer behavior the company can identify the differences between two religions and plan the suitable marketing strategies for their business.


The report analyzes and identifies the basic concept for making marketing strategies before launching a new product to the market; and it can be a reference document for the business.

HNC/HND Marketing Supporting Foundation Degrees-Course book (1st Edition) London: BBP Professional Education

Marketing Principle and Practice (4th Edition) Singapore: Tyndale Education Group Pte Ltd

http://wiki.answers.com/Q/What_is_marketing_oriented_company (Nov.15th 2009) www.canon.com.vn (Nov.19th 2009)

http://tutor2u.net/business/marketing/promotion_personalselling.asp (Nov.20th 2009) http://www.shtp.hochiminhcity.gov.vn/webshtp/tintuc/default_opennew.aspx?news_id=1210 (Nov.23rd 2009)

http://www.vnexpress.net/GL/The-gioi/2009/11/3BA1541C/ (Nov.27th 2009)

http://www.mofa.gov.vn/vi/nr040807104143/nr040807105039/ns080125095946?b_start:int=10 (Nov.30th 2009)

http://vovnews.vn/Home/Uu-tien-ngan-chan-lam-phat-phuc-hoi-tang-truong/200911/127095.vov (Dec.2nd 2009)

http://www.canon.com/technology/canon_tech/category/future.html (Dec.4th 2009) http://www.learnmarketing.net/pestanalysis.htm (Dec.6th 2009) http://www.saga.vn/Marketing/Phantichvadubao/2926.saga (Dec.7th 2009) http://www.techmartvietnam.vn/news/internally/200812026379217675/tmnews_view (Dec.11st 2009) http://www.bmg.edu.vn/forum/showthread.php?p=325 (Dec.11st 2009)

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