Question No. 4 - Principles of Marketing BCOE - 141

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BCOE - 141 - Principles of Marketing

Question No. 4

What is augmented and virtual reality? State its advantages and limitations. 

• Augmented reality 

Augmented reality (AR) is an enhanced version of the real physical world that is achieved through the use of digital visual elements, sound, or other sensory stimuli delivered via technology. It is a growing trend among companies involved in mobile computing and business applications in particular.

Amid the rise of data collection and analysis, one of augmented reality’s primary goals is to highlight specific features of the physical world, increase understanding of those features, and derive smart and accessible insight that can be applied to real-world applications. Such big data can help inform companies' decision-making and gain insight into consumer spending habits, among others.

Augmented reality continues to develop and become more pervasive among a wide range of applications. Since its conception, marketers and technology firms have had to battle the perception that augmented reality is little more than a marketing tool. However, there is evidence that consumers are beginning to derive tangible benefits from this functionality and expect it as part of their purchasing process.

For example, some early adopters in the retail sector have developed technologies that are designed to enhance the consumer shopping experience. By incorporating augmented reality into catalog apps, stores let consumers visualize how different products would look like in different environments. For furniture, shoppers point the camera at the appropriate room and the product appears in the foreground.

Elsewhere, augmented reality’s benefits could extend to the healthcare sector, where it could play a much bigger role. One way would be through apps that enable users to see highly detailed, 3D images of different body systems when they hover their mobile device over a target image. For example, augmented reality could be a powerful learning tool for medical professionals throughout their training.

• Benefits of AR:

1. The primary benefit of Augmented Reality is that it can be used by anyone including mentally and physically disabled individuals.
2. It blurs the line of difference between the virtual and real world, thus increasing its usability and effectiveness in the area of application.
3. It possesses a highly interactive nature which enable to assess several instances in advance.
4. Success or failure of an instance can be determined by using the computing power of AR, thus saving a ton of money.
5. It finds its heavy usage in the field of health, thus increasing the accuracy of diagnosis for diseases. Since now, it has saved lives of numerous patients.

• Drawbacks of AR:

1. One major drawback of AR based application is the lack of privacy
2. AR based applications or devices cannot be leveraged without appropriate training thus increase costs and time involved
3. There can be certain instances where such applications have recorded low performance, thus reducing the overall appeal of the package.
4. It can get extremely costly to develop and maintain an AR based device or an application.

• Virtual reality 

The definition of virtual reality comes, naturally, from the definitions for both ‘virtual’ and ‘reality’. The definition of ‘virtual’ is near and reality is what we experience as human beings. So the term ‘virtual reality’ basically means ‘near-reality’. This could, of course, mean anything but it usually refers to a specific type of reality emulation.

We know the world through our senses and perception systems. In school we all learned that we have five senses: taste, touch, smell, sight and hearing. These are however only our most obvious sense organs. The truth is that humans have many more senses than this, such as a sense of balance for example. These other sensory inputs, plus some special processing of sensory information by our brains ensures that we have a rich flow of information from the environment to our minds.

Everything that we know about our reality comes by way of our senses. In other words, our entire experience of reality is simply a combination of sensory information and our brains sense-making mechanisms for that information. It stands to reason then, that if you can present your senses with made-up information, your perception of reality would also change in response to it. You would be presented with a version of reality that isn’t really there, but from your perspective it would be perceived as real. Something we would refer to as a virtual reality.

So, in summary, virtual reality entails presenting our senses with a computer generated virtual environment that we can explore in some fashion.

• Advantages of Virtual Reality:

1) Virtual reality creates a realistic world

2) It enables user to explore places.

3) Through Virtual Reality user can experiment with an artificial environment.

4) Virtual Reality make the education more easily and comfort.

• Disadvantages of Virtual Reality

1) The quipments used in virtual reality are very expensive.

2) It consists of complex technology.

3) In virtual reality environment we cant move by our own like in the real world.

Question No. 3 - Principles of Marketing BCOE - 141

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BCOE - 141 - Principles of Marketing

Question No. 3

What do you understand by channel of distribution? Discuss the functions of channel of distribution.

Channels of Distribution or Distribution Channel can be defined as the path taken by the good or service when they move from manufacturer to the end consumers. The movement of the goods implies the physical distribution of the goods or the transfer of ownership.

It is the network of intermediaries such as wholesalers, retailers, distributors, agents, etc., who carry out a number of interrelated and coordinated functions in the flow of goods from its source to its destination. Additionally, it creates utility of time, place, form, and possession to the product by the quick and efficient performance of the function of physical distribution.

Have you ever wondered that product manufacturing units of various companies are set up at a particular location only, but the consumers of that product are everywhere across the globe, so how these goods are available to the people residing in a place distant from the place where the manufacturing unit is located? Well, it is the channels of distribution that act as an intermediary to make the goods available to the intended consumer.

Channels of Distribution implies the means through which the good or service need to pass to reach the intended consumer. Based on the number of intermediaries involved, the channel of distribution can be short or long. Further, it has a great impact on the company’s sales, as the higher the availability of the goods, the more will be its sales.

Depending on the type of the product, i.e. good or service, different marketing channels are employed by the companies.

• Functions of Channel of Distribution

The functions performed by the channels of distribution are divided into three main categories:

1. Transactional Functions: Functions like buying, selling, and risk-bearing which are relevant to a transaction are called transactional functions. Producers sell goods to intermediaries, who further sell them to the customers. In this way, the title of goods changes hands, and goods flow from producer to consumer. In the absence of any buying and selling, there won’t be any transaction.

2. Logistical Functions: It involves the physical exchange of the goods such as assembling, storage, sorting, grading, packing, and transportation. This is to make certain that goods must reach the marketplace at right time and sell to the consumers conveniently.

3. Facilitating Functions: Functions like post-purchase service, maintenance, financing, information dissemination, channel coordination, etc form part of facilitating functions.

Question No. 2 - Principles of Marketing BCOE - 141

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BCOE - 141 - Principles of Marketing

Question No. 2

What do you mean by consumer buying behaviour? Explain the factors influencing consumer buying behaviour. 

Consumer behavior is the study of consumers and the processes they use to choose, use (consume), and dispose of products and services, including consumers’ emotional, mental, and behavioral responses. Consumer behavior incorporates ideas from several sciences including psychology, biology, chemistry, and economics. 

Studying consumer behavior is important because it helps marketers understand what influences consumers’ buying decisions. By understanding how consumers decide on a product, they can fill in the gap in the market and identify the products that are needed and the products that are obsolete. Studying consumer behavior also helps marketers decide how to present their products in a way that generates a maximum impact on consumers. Understanding consumer buying behavior is the key secret to reaching and engaging your clients, and converting them to purchase from you.

Consumer behavior is often influenced by different factors. Marketers should study consumer purchase patterns and figure out buyer trends. In most cases, brands influence consumer behavior only with the things they can control; think about how IKEA seems to compel you to spend more than what you intended to every time you walk into the store.

• What affects consumer behavior?

Many things can affect consumer behavior, but the most frequent factors influencing consumer behavior are:

1. Marketing campaigns

Marketing campaigns influence purchasing decisions a lot. If done right and regularly, with the right marketing message, they can even persuade consumers to change brands or opt for more expensive alternatives. Marketing campaigns, such as Facebook ads for eCommerce, can even be used as reminders for products/services that need to be bought regularly but are not necessarily on customers’ top of mind (like an insurance for example). A good marketing message can influence impulse purchases.

2. Economic conditions

For expensive products especially (like houses or cars), economic conditions play a big part. A positive economic environment is known to make consumers more confident and willing to indulge in purchases irrespective of their financial liabilities. The consumer’s decision-making process is longer for expensive purchases and it can be influenced by more personal factors at the same time. 

3. Personal preferences

Consumer behavior can also be influenced by personal factors: likes, dislikes, priorities, morals, and values. In industries like fashion or food, personal opinions are especially powerful. Of course, advertisements can influence behavior but, at the end of the day, consumers’ choices are greatly influenced by their preferences. If you’re vegan, it doesn’t matter how many burger joint ads you see, you’re not gonna start eating meat because of that.

4. Group influence

Peer pressure also influences consumer behavior. What our family members, classmates, immediate relatives, neighbours, and acquaintances think or do can play a significant role in our decisions. Social psychology impacts consumer behaviour. Choosing fast food over home-cooked meals, for example, is just one of such situations. Education levels and social factors can have an impact.

5. Purchasing power

Last but not least, our purchasing power plays a significant role in influencing our behavior. Unless you are a billionaire, you will consider your budget before making a purchase decision.The product might be excellent, the marketing could be on point, but if you don’t have the money for it, you won’t buy it. Segmenting consumers based on their buying capacity will help marketers determine eligible consumers and achieve better results.

Question No. 1 - Principles of Marketing BCOE - 141

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BCOE - 141 - Principles of Marketing

Question No. 1 

What is marketing? Explain the different marketing concepts. 

Marketing refers to activities a company undertakes to promote the buying or selling of a product or service. Marketing includes advertising, selling, and delivering products to consumers or other businesses. Some marketing is done by affiliates on behalf of a company.

Professionals who work in a corporation's marketing and promotion departments seek to get the attention of key potential audiences through advertising. Promotions are targeted to certain audiences and may involve celebrity endorsements, catchy phrases or slogans, memorable packaging or graphic designs and overall media exposure.

Marketing as a discipline involves all the actions a company undertakes to draw in customers and maintain relationships with them. Networking with potential or past clients is part of the work too, and may include writing thank you emails, playing golf with prospective clients, returning calls and emails quickly, and meeting with clients for coffee or a meal.

At its most basic level, marketing seeks to match a company's products and services to customers who want access to those products. Matching products to customers ultimately ensures profitability.

Marketing is the process of “creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large,” according to the American Marketing Association. This process is done in a number of different ways; marketing professionals use one or more of the five concepts of marketing in order to earn consumer confidence and create profitable, long-term relationships with consumers. But not all the concepts are equally effective.

Robert Katai, an experienced marketing strategist, provides the definition of a marketing concept: “A strategy that companies and marketing agencies design and implement in order to satisfy customers’ needs, maximize profits, satisfy customer needs, and beat the competitors or outperform them.” The main five include the production, product, selling, marketing, and societal concepts, and they have been evolving for decades. Not every concept is beneficial to every business, so here is a timely and convenient opportunity to learn more about each one.

• The Production Concept

The production concept is focused on operations and is based on the assumption that customers will be more attracted to products that are readily available and can be purchased for less than competing products of the same kind. This concept came about as a result of the rise of early capitalism in the 1950s, at which time, companies were focused on efficiency in manufacturing to ensure maximum profits and scalability. 

This philosophy can be useful when a company markets in an industry experiencing tremendous growth, but it also carries a risk. Businesses that are overly focused on cheap production can easily lose touch with the needs of the customer and ultimately lose business despite its cheap and accessible goods.

• The Product Concept

The product concept is the opposite of the production concept in that it assumes that availability and price don’t have a role in customer buying habits and that people generally prefer quality, innovation, and performance over low cost. Thus, this marketing strategy focuses on continuous product improvement and innovation. 

Apple Inc. is a prime example of this concept in action. Its target audience always eagerly anticipates the company’s new releases. Even though there are off-brand products that perform many of the same functions for a lower price, many folks will not compromise just to save money. 

Working on this principle alone, however, a marketer could fail to attract those who are also motivated by availability and price. 

• The Selling Concept

Marketing on the selling concept entails a focus on getting the consumer to the actual transaction without regard for the customer’s needs or the product quality — a costly tactic. This concept frequently excludes customer satisfaction efforts and doesn’t usually lead to repeat purchases. 

The selling concept is centered on the belief that you must convince a customer to buy a product through aggressive marketing of the benefits of the product or service because it isn’t a necessity. An example is soda pop. Ever wonder why you continue to see ads for Coca Cola despite the prevalence of the brand? Everyone knows what Coke has to offer, but it’s widely known that soda lacks nutrients and is bad for your health. Coca Cola knows this, and that’s why they spend astonishing amounts of money pushing their product. 

• The Marketing Concept

The marketing concept is based on increasing a company’s ability to compete and achieve maximum profits by marketing the ways in which it offers better value to customers than its competitors. It’s all about knowing the target market, sensing its needs, and meeting them most effectively. Many refer to this as the “customer-first approach.”

Glossier is a recognizable example of this marketing concept. The company understands that many women are unhappy with the way that makeup affects the health of their skin. They also noticed that women are fed up with being told what makeup products to use. With this in mind, Glossier introduced a line of skincare and makeup products that not only nourish the skin but are also easy to use and promote individualism and personal expression with makeup.

• The Societal Concept

The societal marketing concept is an emerging one that emphasizes the welfare of society. It’s based on the idea that marketers have a moral responsibility to market conscientiously to promote what’s good for people over what people may want, regardless of a company’s sales goals. Employees of a company live in the societies they market to, and they should advertise with the best interests of their local community in mind. 

The fast-food industry is an example of what the societal concept aims to address. There’s a high societal demand for fast food, but this food is high in fat and sugar and contributes to excess waste. Even though the industry is answering the desires of the modern consumer, it’s hurting our health and detracting from our society’s goal of environmental sustainability.

BCOE 141 Principles of Marketing Assignments Solutions

Solutions to Assignments 

BCOE - 141 - Principles of Marketing

Section A