Buisness

Assigment
Marketing
Mahmoud

11B2
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Marketing is the process by which companies determine what products or

services may be of interest to customers, and the strategy to use in sales,
communications and business development. It is an integrated process through
which companies create value for customers and build strong customer
relationships in order to capture value from customers in return.

Marketing is used to identify the customer, to keep the customer, and to satisfy
the customer. With the customer as the focus of its activities, it can be
concluded that marketing management is one of the major components
of business management. The evolution of marketing was caused due to mature
markets and overcapacities in the last 2-3 centuries. Companies then shifted the
focus from production to the customer in order to stay profitable.

Harvey Norman has been well recognized as one of the most efficient businesses
in Australia at marketing their products, mainly in regards to knowledge and
implementation of marketing segmentation, how the product life cycle impacts
on the marketing mix, and the necessity of regularly monitoring the
effectiveness of the marketing plan.

Marketing Segmentation

Every market is different. Harvey Norman realizes this, and therefore has a
number of separate markets, designed specifically with the target of tempting to
people who may not regularly use the Harvey Norman brand name simply
because of the nuance the name has- Harvey Norman being a family store, may
scare away people who are either single, or looking for a more budget-friendly
option (particularly with newer products, as Harvey Norman use a price-leading
strategy).

In order to try and attract consumers away from other stores, and to broaden the
potential market for their products, Harvey Norman has created three unique,
yet individual, brand names, to appeal to different segments of the market.

The three brand names include-

∗ Harvey Norman- designed specifically for the suburban family

∗ Rebel Sport- aimed at the Under 35 sports/leisure market.

∗ Domayne- typically aimed at single person families, living in

luxury apartments.

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The creation of the three separate marketing areas has both its advantages and
disadvantages.

One of the key advantages to the development of the three marketing segments
would of course be the increase in the amount of merchandise sold. As the three
different segmentations would each attract a different portion of the overall
market, it would be particularly effective in boosting overall profits, which could
then be fed back into both stock production and supply, and the marketing
budget.

The key disadvantage is the need to spread the advertising budget into not one
but three separate accounts, so as to design campaigns to approach each of the
markets individually. A single ad would not be enough, if the company intends to
avoid mentioning Harvey Norman brand name.

The Product Lifecycle and the Marketing mix

The product lifecycle is a critical aspect of any potential marketing plan. At

different stages of the lifecycle, products need to be treated in different ways, in
order to maximize potential profit. The marketing mix should be manipulated in
such a way as to provide the best return for the business.

One of the biggest products in Harvey Norman’s catalogue since the company’s
inception has been its range of information technology equipment- particularly
computers. When discussing the influence of the product lifecycle on the
marketing mix, computers are an obvious example of this influence.

Product- A product can always be improved. When computers were first

released into the general market in 1995, Gerry Harvey foresaw that people
were going to enthusiastically accept them, claiming that “in five or ten years
there is going to be a computer in every home, some may have four or five
computers.”

The introduction of computers as a wholesale product was a stroke of genius,

leading to a profit increase of up to 132% by 2000. The product, however, was
constantly undergoing a number of changes, and as it moved towards the
maturity and decline stage of the product lifecycle, the introduction of new
operating platforms, such as the 98, 2000, ME, etc., as well as laptop and
handheld computers, helped to maintain a constant profit.

Price- Harvey Norman acts as a price leader. It introduces new products

earlier than its competitors, in order to make massive profits. People queued for
hours in order to buy computers when they were first released on the main
market. When computers became a more common product, and entered the
maturity stage of the product lifecycle, Harvey Norman approached the market

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with a price discounting approach- reducing the price so as to maintain a larger

market share than its competitors.

Promotion- Whenever products are first introduced to the market, large

amounts of funds are diverted into its advertising and promotion. This was
particularly noticeable in 1995, when the computer first became a main stream
purchasable item at Harvey Norman.

Gerry Harvey ensured that a large budget was available for the promotion of
computers, because he spends any excess funds into the advertising budget, so
that when products do come out, he has the available finance to be able to
effectively promote them.

Once a product moves into the maturity stage, the amount spent on promoting
either steadies or dies off- leaving room for the entry into the market of a new,
similar product. A perfect example was the swift transmission made by Harvey
Norman from computers, to home entertainment. When Harvey saw the decline
in the purchases of computers, funds were then pushed towards the advertising
of home entertainment, and slowly moved out of computers as the market for
computers settled.

Place- As a product moves into the growth stage, Harvey Norman must look at
the way it can take with the product, particularly in regards to location. Harvey
Norman has promoted the concept of superstores- designed to stock one typical
product, and all the sales and after-sales assistance needed for it. This is
particularly effective at the height of the introduction and growth stages, where
people who are interested in purchasing a computer can simply head to one of
these superstores, and be able to find everything that they are after in the one
location.

Harvey Norman also has the potential to export products internationally, with
new markets opening up all over the world, particularly in places like Singapore,
the United Kingdom, and Dubai. As products reach the top of the growth stage,
their introduction into the international market not only boosts the
manufacturers own profits, but also increases sales and overall profits in
internationally trading companies such as Harvey Norman.

Mahmoud