Marketing principle help for HND - HND Assignment Help

Marketing principle help for HND - HND Assignment Help:

Marketing Principle

  • Macro & micro environmental factor influencing marketing decisions
Environmental factors can be mainly categorized into two parts i.e. micro environmental factors and macro environmental factors. Micro environmental factors can be defined as the factors which affect a firm and activities carried out by the firm in particular relation with the operations of an organization into particular market. Micro environmental factors are considered important for the development of marketing strategy of any organization. Macro environmental factors show the wide trends & patterns prevailing in society and would affect particular markets. Based on the macro environmental factors prevailing in markets, organization would identify business opportunities and probable threat to their business. Analysis of opportunities and threat to the business would allow the organization to adopt a proactive approach for handling their business rather than reactive approach.
1.1 Micro environmental factor analysis affecting marketing decision
Micro environmental factor analysis of any organization would include six factors which are vital to analyze the internal environment. These six factors influencing marketing decisions can be given as mentioned below:
  • Company: Company itself is the first and primary factor for determination of marketing decisions. Under company several departments and management style forms the decision making elements in an organization. Internal environment of the two companies can be distinguished basis these two important factors and ultimately lead to different marketing decisions (Lenskold, 2003).
  • Marketing channels: Marketing channels are the intermediaries which help in order to promote, sell or distribute the goods & services produced by the company. Marketing channel involved in the marketing decision making of an organization includes reseller, wholesaler, retailer, physical distribution firms, marketing service agencies and financial intermediaries.
  • Suppliers: Suppliers can be defined as the individuals or firms who provide resources for the company and develop important link between the value delivery system of the company and organization. There are two important factors which need to be monitored into suppliers which are availability of supply and tracking key price trends.
  • Customer markets: In order to establish marketing decisions a company should have adequate study of its consumer markets, reseller markets, international markets, government markets and business markets etc. Study of these markets would allow the organization to take appropriate marketing decisions.
  • Publics: Public is group of individual having interest and impact on the organization’s marketing decision making process. Company should develop marketing plan in order to address different publics such as financial publics, government publics, local publics and internal publics etc (Patterson, 2008).  
  • Competitors: Every company should have wide range of competitors as these competitors would offer competitive advantage for the organization and this competitive advantage would allow company to out compete their rivals. Understanding competitor and their strategy would allow adopting accurate marketing decisions.
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1.2 Macro environmental factors affecting marketing decisions
Macro environmental factors affecting marketing decisions include political, environmental, social, technological, economical and legal factors. Political/legal environment surrounding the organization has vital importance for any organization as every organization has to work under confined laws & regulations. Taking example from European countries it has been observed that there are critical changes into political system due to which serious disruption has been caused into their business. Economic growth of a nation would support the organization towards their perspective betterment hence economic growth is vital factor in making marketing decisions. Looking at the economic terminology there are three factors which define economic growth of nation and these are rate of growth, rate of inflation and level of unemployment.
Social factors surrounding business entities are very important as social factors of consumer segment need to be accepted by the business and businesses should take their marketing decisions in accordance with these factors (Masi & Weidner, 1995). Some of the critical factors which need to be considered include demographic factors, lifestyle factor, influence of peer groups, values & norms such as family, sharing and family influence. Technological factors can change the direction of business and hence consider critical for the success of business and businesses are expected to have close uniformity with the ongoing technological advances. Technology affect the marketing decisions by type of product made changes with technology, quality of product gets improved with change in technology and manufacturers of products changes with technological advance. Environmental factor affect marketing decision as organizations are expected to work for the benefit of environment and products & services affecting environment adversely should be discouraged.
1.3 Competitive factor
Competitive factors are among the important determinants for the marketing decisions in any organizations and Porter’s five force strategy provides the competitive factors for any organization. Competitive factors surrounding any organization are given as mentioned below:
  • Bargaining power of customer: An organization with high bargaining power of customer would be having low competitive advantage as there would be high number of sellers with better value delivery to customers.
  • Bargaining power of supplier: Organization with high bargaining power against supplier would be having advantage in terms of assured supply and more number of suppliers giving low cost supply for long term (Ries & Jack, 2000).
  • Rivalry among competitors: An industry with high rivalry among competitor would have high cost efficiencies and benefits for the customers. In case of high rivalry among the players in industry, organization would have to make wise marketing decision so that they can get ahead of competitors prevailing in industry.
  • Threat of new entrants in industry: New entrants in industry would create pressure on the organization to make it more competitive and efficient. Higher number of new entrant in industry would demand for the key advantage from the existing players so that they can secure their market share (Porter, 1998).
  • Threat of substitute products: Threat of substitute products affects marketing decisions as substitute product would provide higher bargaining power to the customers.

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2.0 Segmentation criteria to be used for products in different markets
Segmentation process can be defined as the division of consumer markets into homogenous subgroups and distinct segments which are potential market to be selected by any organization matching to the marketing mix developed by the company. Segmentation process allows the organization to make best possible use of opportunities and threats. Marketing mix is designed in order to suit the segmentation of the organization. In order to develop segmentation it is important that wide range of information is available and this process is known as marketing research. Segmentation criteria are used in order to enhance marketing efficiency so that marketing efforts can be targeted into right direction (Kotler & Kevin, 2006).  In order to represent the segmentation criteria for any organization below segmentation methods are being used by World Call:
  • Geographic segmentation: Based on the geography a nation can be divided among different units so as to cater different consumer needs pertaining to the consumer behavior residing into different geography. Based on the geographic allocation World Call can rely heavily on its supply chain in order to deliver wireless sets and USB broadband devices. World Call is expanding into northern and rural areas in order to capture the entire markets.
  • Demographic segmentation: Demographic variables are important in order to segment entire market into different segments. Some of the important parameters which divide markets based on the demographic variable include age, sex, family size, social class, income range and education level. Every organization sets particular criteria for the demographic variables based on which the segments would be divided. World Call has its segmentation strategy where in company would target businessman along with teenager students use high speed internet for the study purpose. The pricing strategy of the organization should be such that it matches the potential consumer segment where in low price strategy can be adopted to meet requirement for the students by World Call as students are having low income.
  • Behaviorist segmentation: Segmenting the market based on behavior such as uses loyalties and response given by buyers etc. Two vital factors for the behaviorist segmentation include product of brand usage and degree of usage. Along with product of brand and degree of usage would include with demographic and psychographic factors in order to develop the profile for markets (Porter, 1998). World Call has the advantage of being reputed among their consumer segments and people have strong loyalty for the World Call brand. Based on these advantages World Call would be able to target their consumer segments to promote the new products & services offered by company for its consumer according to their behaviorist factors.
Hence these three criteria would be of prime importance in order to decide on the segmentation used by any organization into particular market. Segmentation strategy developed on these three factors i.e. demographic, geographic and behaviorist would change according to the markets and characteristics exhibited by the market elements. Marketing decisions pertaining to the segmentation would be taken by the organization after deep study of these elements so that a comprehensive segmentation strategy can be developed and accordingly marketing mix for the targeted consumer segment would be decided.     
3.0 Selection of targeting strategy for selected product/service
Marketing decisions are made as per the decided process where in starting from the segmentation, targeting and positioning is decided so that complete marketing plan can be laid out in order to promote the products & services of the company. Based on the segments divided for the entire market targeting would be decided and particular targets would be made as per the segments divided. Some of the critical factors which are considered by the organizations while making targeting decision include below mentioned:
  • Concentrated marketing: Concentrated marketing strategy is used by the organization in order to capture the particular market segments. Concentrated marketing efforts would be directed based on the particular markets where in niche marketing strategy would be devised for these segments. Concentrated targeting marketing efforts are characterized by the selection of a single particular market and developing ideal products & services for this single individual market. Concentrated targeting efforts are developed by the organizations after a deep study of the entire segments, its need and accordingly products & services are designed by the organization so that these offerings can match with the targeted segment of the company (Clancy & Peter, 2000). There are no general products & services developed by the company catering to the concentrated marketing efforts. Some of the ideal example for the concentrated targeting efforts include Rolls Royce Cars and “Mother Care” mother and baby soaps. For both these products there is a niche market segment which is targeted by the company and this target segment is the only consumer base interested in the products & services of the organization.
  • Differentiated marketing: Differentiated marketing efforts are developed with different versions of the products where in each version of the products is targeted to the particular market segment. Though the product is generic in nature but modification is being done into different versions of the product so that it can meet the requirement of different target segments for which this product is being altered. While adopting the differentiated marketing efforts it is important that particular market segments are deeply studied by the marketers and changes in the standard products & services is being done by the organization in accordance with the particular segments (Philip & Kevin, 2006). Differentiated marketing efforts can be exampled by the separate articles for the clothing developed by the readymade garments company. For example Jeans is being modified by the company into various forms so as to match up with the different consumer segments.
While taking the decision on segmentation process it is important to note that cost of differentiation should not exceed the benefits which are being received after segmentation of the market. Though efficiency is gained by the organization by segmenting the market but sometimes cost of differentiating the market would exceed and net benefits would be lower as compared to the cost incurred by the organization. When such a condition occurs that cost of differentiation is higher in comparison to the benefits received, in such case market is said to be over differentiated. Higher level of segmentation has threat of over differentiation and high costing while concentrated marketing efforts posses the risk for organization to rely on single market which may pose high threat. Based on the targeting efforts of an organization products are being positioned into such a manner that product offerings of the organization matches with the desired criteria for product & services of organization. Brands are positioned on competitive map in comparison to the other available products & services so that consumer perceives high value for a particular brand in comparison to the products & services offered by other market players in same segment.
4.0 Impact of buyer behavior on marketing activities in different buying situations
Buying behavior for consumers can be defined as the process through which decision making is being done in order to purchase the products and consume the products. Each set of consumer is different from others and based on the level of differentiation between two consumers as per their choice and subjectivity involved buyer behavior would differ for the consumer segments. Buying behavior exhibited by the consumers is important for the marketers in order to make decision pertaining to particular products & services (Joshi, 2005). There are two reasons for which consumer buying behavior is important and plays a vital role in decision making for the organization which are importance of the buyer reaction in gaining success for the organization and an organization should examine the influence on what, how and when customer buy. Asking these questions by the marketers would allow them to have a deep understanding of the characteristics for the consumers based on which futuristic behavior for the products & services of the organization can be predicted. Once the marketers are in well control and have understanding for the behavior of buyers it would be easy for them to predict their expectations and accordingly their products & services would be designed in tandem with these expectations. Further information on these vital factors for organization would be important so as that by knowing these factors organization would be able to predict the effectiveness of their marketing program. Further an assessment for the effectiveness can be done by the organization and in case of any deficiency into the marketing program same can be reviewed and changes can be done so as to make the marketing activities as per the desired marketing plan.
Taking the example of World Call to understand the role of consumer buying behavior on the decision on marketing activities it can be said that consumer behavior is basis for making marketing decisions by the organization. World Call puts high importance for the consumer behavior while making decision on the wireless set and USB devices marketing activities. Consumer behavior is formed by several factors such as the expectation of the consumer to see what they want to see, past experience and cultural factors driving knowledge for the consumers. Consumer behavior is mainly affected by the past experience and cultural factors affecting them and knowledge is generated for the consumers through these experiences. In case of product offerings from World Call people consider USB broadband as high quality product and would respond for such products into learned manner (Reid & Bojanic, 2009). The readiness for the consumers towards product responsiveness can be called as perceptual set. Expectation of the consumer would lead him/her to buy particular product but when experience is gained by using the products and two things (expectation & experience) does not match a negative wide is created due to which other consumers may also get affected.
When experience of a person with the offered product is not good a negative impact would be carried by the consumer and this negative effect may be circulated among the other consumers as well with word of mouth publicity. Sometimes consumer buying behavior is also affected by the pricing set for the particular product however this is not the case for all products. For example considering the case of World Call’s wireless set which is considered as low quality products with lower price value, consumers would be expecting a low price range for the product and when organization tends to set high value for such products a negative image would be carried by the consumer towards that product. Hence in this case of World Call consumer buying behavior gets affected by the pricing strategy adopted by the organization.
The marketing activities adopted by World Call would differ very much from each other for these two products as one product caters to the low quality and low price range while other product is being perceived by the consumer with high quality and consumers would be ready to pay higher price for that product as per their perception. In the advertisement promoted by the company for USB broadband an office along with executives have been shown, this represent that company want to position this product into higher markets for high class people and skimming pricing strategy is being adopted. While the wireless set is being shown in the advertisement in local PCO shops representing that wireless set has been targeted to the low class people with lower costing. Advertisement showcase that lower class people would use the wireless set in place of their PCO so that lower costing can be attained for the particular consumer segment (Gupta & Lehmann, 2005). The most important characteristics of the consumer buying behavior include personal income, age and attitude. With change in these characteristics for the consumers buying behavior would also change, for example with increase in spending income for the consumers their buying pattern would change and consumers would tend to shift towards branded products which would allow marketers to change their marketing activities and align marketing efforts towards the changing consumer behavior.        
5.0 Positioning strategy for selected product/service
Positioning strategy is developing image of the products & services of organization in accordance with the perceived brand image for the consumers. An organization need to position its products & services into such a manner that high value delivery can be assured for the consumer group targeted with the offered products & services. Positioning of a brand is an important activity where in positioning process can’t be considered in isolation and competitive positioning strategy is considered while positioning the products & services of an organization. Price and quality are two vital factors based on which positioning of various products would be done and there can be four segments in which a particular product or service can be positioned with respect to quality & prices of the product (Goldstein, 2007).
Perceptual map can be drawn by selecting the two criteria for positioning of the various products and their brands so that comparison can be done between the several brands offering similar products. A simple perceptual map for the chocolate industry representing the quality vs pricing map for the different chocolate manufacturers can be shown as per the below figure:
Low quality
Figure 1: Showing the perceptual map for chocolate industry
As shown in the figure above that based on the price and quality for the chocolates entire market has been divided into two four quadrants. Each quadrant for the perceptual map represents the balance of quality and price for the chocolate industry. Every brand positions its products & services into market based on these two factors and these two factors are critical in order to decide superiority of the products or services for different brands. As shown above there are four quadrants for the perceptual map in chocolate industry which can be explained as below:
  • High price and high quality: Generally goods with high quality are associated with the high price and hence these are the goods positioned for the high class consumers who can afford to purchase high priced products but demands for higher quality goods. Hence the first quadrant have positioning for the premium brands of chocolate offered for the high class consumers having premium pricing and very high quality products. Some of the important chocolate brands included in this category are Ferrero Rocher, Milk Tray and Cadbury Roses etc (Trout and Rivkin, 1996). All these chocolate brands are positioned as the high quality and high price brands seeking premium consumer segment into chocolate industry.
  • Low price and low quality: Similar to the perception of high quality high price, lower quality goods are considered to be associated with lower price range. Hence for the goods which are having low quality as per consumer perception and positioning made by marketers for the particular products, pricing expected by the consumers would also be on the lower spectrum. In case the pricing for such low quality products would be on higher side consumers would neglect the products & services and would shift their brand of product & services. These products are being positioned by the marketers into third quadrants and consumer segment selected for these products would be lower class people looking for cheaper goods & services with lower quality of goods and services as compared to the market competitors. Some of the major brands positioned with low quality and low price include Cadbury Fruit & Nut, Mar Bar and Twix. All these brands are positioned in such a way that consumer perceive lower quality for these brand and would be ready to pay off low price for these brand of goods & services (Levi, 2007).
  • Low price high quality: This would be the ideal situation in case of positioning the product as consumer would be looking for the products & services having low quality but high quality. Generally there are no goods & services being placed into low price high quality segment of goods. This segment of goods and services are categorized as the bargain goods due to the reason that for low price high quality is obtained by the consumers. Marketers tend to allocate positioning of their products into this quadrant but most of the times goods positioned by the marketers does not qualify for this quadrant as consumer does not perceive high quality for the goods which are priced low. In case marketers gets successful in positioning goods & services into this segment then customers would be able to get high value of money for the goods & services bought by them. Marketers can get significant competitive advantage in case the perceive positioning of the goods and services lies in this segment.
  • High price low quality: This is the adverse segment where in marketers does not want that consumer should perceive their product this segment. Positioning for the products sometimes gets into this quadrant as many a times benefits offered by big brands does not match up for the cost incurred by the consumer while buying the goods and services. In case this happen then consumer would get a bad experience for the goods & services and image would be for the low quality and high price.
Hence positioning of the product is very important in order to convey image of the product to targeted consumer segment. Every product is positioned in consumer mind with some specific characteristics of price and quality and overall composition for price and quality offered by the product would be considered by consumer while making purchase decision for that product.
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