Demand States In A Market Essay

Length: 13 pages Sources: 2 Subject: Business - Advertising Type: Essay Paper: #2145792 Related Topics: Market Segmentation, Fresh Direct, Food Pyramid, Scientific Method
Excerpt from Essay :

Yet, they do not know exactly what it is that they want. A database would be extremely helpful at this stage as it could offer information on the type of products and services the customers need and the new market could as such be created. A relevant example of an emergent market is constituted by the it products and services within most developing countries. The second evolutionary stage occurs as the products and services introduced in the emergence stage begin to register high levels of sales. At this level, more producers are interested in promoting their own products within the growing market and the future expectations related to it are generally positive. The growth stage of the market is also supported by customers, who realize the benefits of the given product, but also by companies which develop and implement strong marketing campaigns.

The third evolutionary level is maturity, a situation in which the market is saturated. The main characteristic of this stage is that the interest of the consumer is at its highest levels and not much can be done to further increase it. The marketers' strategies mainly revolve around maintaining the current sales levels. Bolder actions refer to regaining the interest of the customer, but this seldom succeeds as the clients are also saturated with the product. The forth and final stage is the decline, in which the products no longer manage to raise the interest of the customers. The efforts of the marketing specialists revolve around the introduction of new features which serve new needs (Rao and Jain).

7. Brand equity

The brand of a product is often a major determinant in the purchase decision. For the customer, the brand means that they have to spend more on the respective item, but they also get to enjoy it more for two main reasons -- the brand offers them the personal pleasure pegged to the usage of a reputable trademark and as such makes a social statement. Secondly, the brand guarantees a high quality of the product. From the standpoint of the manufacturer, the strength of the brand creates a net advantage, generally called brand equity. The concept can be simply defined as the larger advantages which are generated by the focus on brand in comparison to the fewer advantages which would be retrieved if a brand was not used.

The strength of the brand, manifested through brand equity, helps the consumer make positive associations between the product and the company and as such stimulates the purchase decision. The main characteristics of brand equity are: it represents an organization asset; it allows the more accurate estimation of future incomes; and third, it reduces marketing expenses, allows premium pricing and reduces promotional costs, all leading to increased cash flows. Based on the angle of analysis, brand equities can be perceived in three distinct manners. From the financial standpoint, brand equity allows premium pricing. Secondly, in terms of extensions, brand equity can form the basis of launching other organizational products. Finally, from the consumers' standpoint, brand equity improves customer perceptions relative to the product and brand, as well as the manufacturing organization (Net MBA, 2007).

8. Customer Value Hierarchy

An important element within the marketing campaign is that of promoting and placing the product in full accordance with the customer value hierarchy. The concept refers to the means in which customers perceive the value of the product, decide their need for it and determine whether or not to purchase it. There are five distinct levels within a hierarchy of customer value -- the core benefits of the product, the basic product, the expected product, the augmented product and the lastly, the potential product. The highest levels of competition are met at the augmented level. It is also important to notice that each new value added to the product increases its cost of production and as such its retail price. For instance, if a microwave oven adds a value of low electricity consumption, its price will also increase.

At the core benefit level, marketers identify the main advantages of the product or service. Within the hospitality industry for instance, the core benefits would be ensured by the ability to book a room that provides


The basic product refers to the actual offer included in the product or service, such as the bedroom or the bathroom. The third value chain incorporates the features expected by the customer to be included in the service, such as clean sheets, cable television or fresh towels within the booked hotel room. The fourth layer, the augmented product, refers to the complementary products and services which could be offered in order to satisfy more needs and as such increase customer satisfaction. Examples in this sense include access to the hotels' spa, the swimming pool or any other complementary service which generates additional pleasure to the consumer. Finally, the potential product value level translates into a new product, commenced with the core benefits and improved through time, with the additional values as perceived by customers (Rao).

9. Product line width, length, depth, and consistency

Similar to the marketing mix (the 4Ps of marketing -- product, place, price and promotion), the product in itself is also constructed on a mix. This is generically formed from the product line's width, length, depth and consistency. At the first level, the product mix consists of the totality of different product lines that a company manufactures and sells. For instance, METRO, a leading retailer within the European market, produces under its ARO brand a wide selection of consumer goods, from foods to cleaning supplies. Nike Inc. On the other hand has a less wide mix, as it only process three product lines -- sports apparel, shoes and equipments.

The length of the product mix refers to the number of products included within a product line. The "longer" the product mix, the more items the company includes in one line. An example of product mix length is given by Fisher-Price, an undisputable leader within the toys and baby gear industry. The third layer, or the depth of the product line, refers to the internal diversity of the offering in the meaning of presenting the customers with numerous versions of the selected product. Knorr, the largest brand of Unilever, offers its condiments in powder form, cubical shapes or granules. Another example of product line depth refers to the size of the product; in the Knorr example, the spices can come in 10 grams packages or in 1 kilo bags. Last, the consistency of the product mix refers to the closeness between the various product lines, assessed from different angles. In the case of Knorr, the levels of consistency are high as they serve customers the same purpose. The Metro product lines are less consistent as they serve different needs.

10. Hybrid channel distribution system

The explanation of a hybrid channel system of distribution is generally a simple one. In this essence, a hybrid distribution includes the usage of more than one distribution channels. The practical application of the concept is however more complex due to the increased risks it involves, such as the potential threat of channel conflicts. This basically means that the multiple channels used by the company to sell its products could reach a situation where they compete against each other, in the net detriment of the manufacturing organization.

Despite its relative novelty, the hybrid distribution system is gaining in popularity. And this is obvious not only at a corporate level, but also with small and medium size entities. In terms of multinationals however, coffee monolith Starbucks is probably the company offering the most relevant example of a hybrid distribution system. Alongside with other delivery systems, they use direct sales throughout their own stores, indirect sales through grocery stores or direct marketing, in which sales are conducted online (Know This, 2009).

The concept and practice of multiple distribution channels are relatively new and occurred as a response to the changing features of markets and organizations. Historically, companies would only use a single distribution system to market one product onto one market. As diversification emerged and as the registration of profits through sales onto multiple markets were identified however, the hybrid channel distribution system came into being. The new system, increasingly popular, offers a wide series of benefits to organizations. "With each new channel, the company expands its sales and market coverage and gains opportunities to tailor its products and services to the specific needs of diverse customer segments. But such multichannel systems are harder to control, and they generate conflicts as more channels compete for customers and sales" (Kotler and Armstrong, 2005).

11. Service output levels

Another feature which increased the complexity of the marketing function is the necessary analysis of the service output levels. The emergence of this characteristic is pegged to the growing popularity of services, which is mostly…

Sources Used in Documents:


Grashaw, K., 2009, Recognizing the Eight Demand States in a Market, Kurt Grashaw Marketing Communications, last accessed on October 16, 2009

Kotler, P., Armstrong, G., 2005, Principles of Marketing, 10th Edition,, ISBN 7302114358

Perner, L., 2009, Service Outputs, University of Southern California, last accessed on October 16, 2009

Rao, T.P.R., Jain, a.K., Key Concepts for Marketing of Information Products and Services, the International Development Research Center, last accessed on October 16, 2009

Cite this Document:

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