AHMADU BELLO UNIVERSITY

DISTANCE LEARNING CENTRE

DEPARTMENT OF BUSINESS ADMINISTRATION

COURSE TITLE: Marketing Management & Strategy

CODE: BUAD 828

INDIVIDUAL ASSIGNMENT

BY

Ishiyaku Adamu Njidda

Reg. No.: P20DLBA80996; E-mail: [email protected]
Phone No.: 08035296154

QUESTION(S):
Questions were given in sections. One question to be answered from each section.
Additional instructions were also provided.

E-TUTOR: Dr. Bose Ogedengbe

JANUARY 2023.

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 SECTION 1

QUESTION: Describe the types of Contractual Vertical Marketing System.

 Definition:

(Retailing definition) A contractual vertical marketing system is a form of vertical marketing

system in which independent firms at different levels in the channel operate contractually to
obtain the economies and market impacts that could not be obtained by unilateral action. Under
this system, the identity of the individual firm and its autonomy of operation remain intact.

(Channels of distribution definition) A contractual vertical marketing system is a marketing

channel that achieves vertical coordination between independent firms at different channel levels
through the use of contractual agreements. The three principal types of contractual systems are
franchise system, retailer-sponsored cooperative, and wholesaler-sponsored cooperative.

Vertical marketing systems are ways that companies work together to streamline marketing for
an entire distribution chain. These types of processes typically reduce costs and increase profit,
while also better meeting consumer needs. Since the distribution channel usually consists of a
few levels, each of which focuses on something different, making sure these efforts are aligned
is incredibly beneficial to the original production company and the brand in question.

 Types/Levels of Contractual Vertical Marketing Systems:

The Study website explains that there are three main levels of contractual vertical marketing
systems. The levels vary based on who owns the strategy, how distribution happens, and how the
marketing strategies are chosen. According to Inc., this kind of collaborative system aims to
ensure that each level has a distinct market to pull from without cannibalizing sales from another
portion of the market.

o Corporate vertical marketing, also called the corporate system, is a setup where marketing is
vertically aligned because the corporate company owns all the distribution channels. In this
case, there is no intermediary, so the corporate company has complete control over the
distribution and marketing of each level of its products.

The company oversees development, production, marketing and distribution. It determines

how to sort out chain stores, how it wants to distribute, and the methods by which to do so.
Contractual Vertical Marketing Systems.

o The contractual vertical marketing system introduces an agreement between the levels of
marketing involved with a particular product. For example, businesses that work through
franchising use this approach to benefit from the overall marketing of the brand name in a
way that helps each individual location. This is one of the advantages of chain stores.

This contractual distribution system works to align advertising at each level – production,
transportation, wholesale and distribution – so that the advantages add up cumulatively for

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 each company involved. This contractual system helps companies benefit from economies
of scale and increases the consumer reach at each level because of the shared information
and market segment knowledge.

o Administered vertical marketing occurs when one member of the vertical marketing chain
administers the marketing strategy for the rest. This is different from corporate vertical
marketing because each step remains individually owned, but the partners have agreed to
let one partner have administrative control over the others.

With this strategy, any step of the marketing chain can lead the effort. The choice usually
comes down to whichever firm has the internal knowledge and experience required to
manage the marketing experience effectively. A contractual distribution system can
eventually lead to this kind of arrangement, where the company with the most experience
in the fields ends up leading the marketing effort.

In many cases, the manufacturing company has expertise in the technical sides of
manufacturing but does not necessarily have strength in marketing and distribution. In
cases where the company is moving toward corporate vertical marketing, it may look to
acquire distribution channels and chains to control the marketing efforts. However, in most
cases, companies look to external partners with the experience and expertise to assist in the
marketing strategy. All of these contractual vertical marketing systems can help a company
expand its reach into a specific market base.

REFERENCE:

Web addresses:

1. https://smallbusiness.chron.com/advantages-vertical-marketing-system-21617.html
2. https://marketing-dictionary.org/c/contractual-vertical-marketing-system/

Access Date: 30/12/2022 Access Time: 13:30 – 15:00 WAT

 SECTION 2

QUESTION: As a Marketer, how would you describe Multicultural Marketing.

Multicultural marketing is devising and executing a marketing campaign that targets people of
different ethnicities and cultures within a brand is overarching audience. Not only does it help a
marketer relate to and resonate with minority groups, but it also recognizes their ethnicities and
cultures and helps majority groups realize that most countries are melting pots and not dominated
by one main ethnicity or culture.

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Multicultural marketing involved recognizing different ethnicities and cultures in consumer base.
The next step is to use specific aspirations and motivations to enter them into the sales funnel.
This marketing strategy further explores the subgroups, including gender, age, sexual identity,
disability, and religion of the target audience.

However, as a brand, you must refrain from stereotyping cultures and gain a genuine
understanding of their consumers’ culture. This will help address the target audience’s needs by
exploring their cultural and socio-economic background.

REFERENCE:

Web addresses:

1. https://blog.hubspot.com/marketing/multicultural-marketing#:~:text=Multicultural
%20marketing%20is%20devising%20and,within%20a%20brand's%20overarching
%20audience.
2. https://www.myasbn.com/small-business/marketing/multicultural-marketing-in-2021-
strategy-best-practices-and-campaigns/

Access Date: 29/12/2022 Access Time: 14:00 – 15:00 WAT

 SECTION 3

QUESTION: Discuss mass customization as a marketing strategy

Mass customization is the process of delivering market goods and services that are modified to
satisfy a specific customer's needs. Mass customization is a marketing and manufacturing
technique that combines the flexibility and personalization of custom-made products with the
low unit costs associated with mass production. Other names for mass customization include
made-to-order or built-to-order.
Mass customization allows a customer to design certain made-to-order features of a product
while still keeping costs closer to that of mass-produced products. In some cases, the
components of the product are modular. This flexibility allows the client to mix-and-match
options to create a semi-custom final product.

Mass customization may apply to many fields, but many connect it to the retail industry.
Software creators may use this method to include software-based product configurations that
enable end-users to add or change specific functions of a core product. Even the financial
services industry embraces mass customization through the growth of independent, fee-only
advisory firms.

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REFERENCE:

Web addresses:

1. https://www.investopedia.com/terms/m/masscustomization.asp#:~:text=Mass
%20customization%20is%20a%20marketing,or%20built%2Dto%2Dorder.

Access Date: 29/12/2022 Access Time: 12:30 – 14:00 WAT

 SECTION 4

QUESTION (1): Briefly differentiate between value and satisfaction in marketing.

Customer satisfaction and value are both fundamental concepts in the understanding of
marketing. It is important to note that while they are highly interrelated, they also operate
independently.

Essentially, value is when a consumer perceives that they will get a good deal from the
company, brand, product or service. To put this in more marketing terms, the consumer will see
value when the benefits they expect to receive exceed the expected costs and effort involved in
acquiring the product.

Customer value is when a customer perceives that the range of benefits they receive from a
transaction exceeds the cost and effort undertaken to participate in that transaction. In other
words, did they get a good deal and did they benefit overall from the purchase?

Therefore, as potential customers (that is, the target market) will be attracted to the offering if
they perceive that the benefits exceed the cost (which equals value), the ability of a firm to be
able to offer good value is paramount to its success in generating ongoing new customers.
This means that value is a pre-purchase assessment of the product by the consumer. If a
consumer perceives that, the product brand or service offers very little value based on their pre
purchase assessment OR if they perceive that it offers less value than a competitive offering, then
the consumer will not buy that particular item.

In terms of the buyer decision process (which marketing students will cover in consumer
behavior topics), this pre-purchase assessment occurs in the evaluation phase.

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Customer satisfaction, on the other hand, occurs after the consumer has become a customer.
That means they have purchased the product or have had dealings with a service firm with.
Customer satisfaction is their assessment of how well that value was delivered – that is, did they
get the value that they expected to receive? (Again, please note that there is a separate section
article on this website that discusses customer satisfaction in more detail). In terms of the buyer
decision process, this customer satisfaction assessment occurs in the post-purchase phase.

Therefore, the difference between customer satisfaction and value is that one is a pre-purchase
assessment and the other is a post purchase assessment.

QUESTION (2): With example identify and explain the five (5) types of customer need
available to Marketers to explore.

A customer need is a motive that prompts a customer to buy a product or service. Ultimately, the
need is the driver of the customer's purchase decision. Companies often look at the customer
need as an opportunity to resolve or contribute surplus value back to the original motive.
Customer needs are the psychological and physical motivations that make someone want to
purchase a product or service and stay loyal to that business. For example, customers today need
quick and convenient ways to reach support online. If a business does not provide an online
experience that is on par with, or better than, an in-person experience, customers might leave for
a competitor that does.
 Types of Customer Need

1. Functional Needs

Functional needs are the most tangible and obvious of the three main types of customer needs.
Customers typically evaluate potential solutions based on whether they’ll help them achieve a
particular task or function. The product or service that best addresses their functional need is
likely to be the one they purchase, or hire.

Functional needs can be broad or extremely specific, depending on the customer’s buying
criteria.

For example, a customer who is planting a garden for the first time might say, “I need a garden
hose.” Meanwhile, an experienced gardener might tailor their criteria by saying, “I need a hose
that’s long enough to reach my vegetable garden from my backyard spigot.” Another customer
who’s dealt with the frustration of using a low-quality product might tailor their need differently
by saying, “I need a high-quality garden hose that won’t tear or kink from regular use.”

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With this kind of insight into customers’ functional needs, a company that manufactures garden
hoses might develop new products, such as hoses that come in a range of lengths and do not
kink.

2. Social Needs

A social need is a customer need that relates to how a person wants to be perceived by others
when using a product or service. While social needs are not typically a customer’s primary
concern when considering a purchase, they can influence their final decision.

Social needs are often more difficult for a company to identify, and vary substantially from
customer to customer. By understanding various social needs, you can look for patterns among
your users. If enough of your customers share a particular need, consider how it can inform your
product development, sales, and marketing processes.

Returning to the garden hose example, imagine the customer is a member of a gardening
association. Members of this association have an affinity for high-tech gardening tools and
regularly discuss new products they have tried. The customer may decide, either consciously or
unconsciously, to purchase a hose with advanced features—for example, one that connects to a
smart water controller—to bond with other association members.

3. Emotional Needs

Emotional needs are similar to social needs in that they are typically secondary to functional
needs. Whereas social needs refer to how a customer wants to be perceived by others when using
a product, emotional needs refer to how a customer wants to feel.

Returning once more to the garden hose example, consider the reasons why the customer
gardens. If they find gardening to be a relaxing hobby, they may be more likely to choose a basic
hose over a high-tech option. Alternatively, if gardening triggers memories of the customer’s
grandparents, they might opt for a brand that evokes that nostalgia.

While emotional needs can be difficult to pinpoint, companies that identify those of their
customers can use the information to tailor and optimize their product messaging.

Additional notes:

Meeting customer needs can help brands sharpen messaging and generate more sales. Common
customer needs that can affect the operations of small businesses and large corporations alike
include:

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 1. Price: This is one of the most important factors buyers consider in the customer journey.
Different customer bases will have unique budgets - knowing what customers spend
allows brands to tailor prices.
2. Experience: In product development, instructions for using the sold item must be easy
for customers to understand.
3. Functionality: The product should work properly; if it does not or easily breaks, brands
may sacrifice customer satisfaction.
4. Options: Businesses can enhance the customer experience by offering choices. For
example, a business can sell the same product in different colors or sizes or offer
purchase plans to allow customers to pay at different intervals.
5. Respect: If customers need assistance, they should be able to access a customer support
team easily. Customers will expect those representatives to treat them with respect and
provide answers or solutions promptly.

Examples of customer needs

A great way to determine your customer’s needs is to pay attention to your customer support
data. Your customer service team is a treasure trove of customer insights. Customers are
reaching out to your support team because they have a need they want you to solve.

Here are a few examples of customer needs:

 Fast, reliable customer service

 Convenient ways to get help, such as through messaging channels
 Options for getting in touch with customer support
 A knowledge base that enables customers to solve issues on their own, 24/7
 Friendly, empathetic agents
 Sustainable products and socially conscious brands
 Seamless returns
 Transparent pricing
 Functional products that solve a problem
 The right information, at the right time

REFERENCE:

Web addresses:

1. https://www.marketingstudyguide.com/what-is-the-difference-between-customer-
satisfaction-and-customer-value/
2. https://www.zendesk.com/blog/customer-needs/
3. https://online.hbs.edu/blog/post/types-of-customer-needs
4. https://www.masterclass.com/articles/customer-needs

Access Date: 30/12/2022 Access Time: 13:30 – 15:00 WAT

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 SECTION 5

QUESTION: From brand equity, Marketers can reinforce brand equity by consistently
conveying the brand’s meaning in terms of?

Marketers can reinforce brand equity by consistently conveying the brand’s meaning in terms of:

(1) What products it represents, what core benefits it supplies, and what needs it satisfies.

(2) How the brand makes products superior, and which strong, favourable, and unique brand
associations should exist in consumers’ minds. NIVEA, one of Europe’s strongest brands, has
expanded from a skin cream brand to a skin care and personal care brand through carefully
designed and implemented brand extensions that reinforce the brand promise of “mild,” “gentle,”
and “caring.”

REFERENCE:

1. Lecture Handbook, BUAD 828: Marketing Management and Strategy, ABU-DLC. 2022.

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CONCLUSION:

It is understood that:

Vertical marketing systems are ways that companies work together to streamline marketing for
an entire distribution chain. These types of processes typically reduce costs and increase profit,
while also better meeting consumer needs.

Customization refers in the context of international marketing to a country-tailored product

strategy which focuses on cross-border differences in the needs and wants of target customers,
appropriately changing products in order for them to match local market conditions.

Therefore, the difference between customer satisfaction and value is that one is a pre-purchase
assessment and the other is a post purchase assessment

Value is a strategic measure, whereas satisfaction is a transactional measure best used in a post
sale interaction between the customer and the organization.
Customer needs are the psychological and physical motivations that make someone want to
purchase a product or service and stay loyal to that business. For example, customers today need
quick and convenient ways to reach support online. If a business doesn’t provide an online
experience that’s on par with, or better than, an in-person experience, customers might leave for
a competitor that does.
Marketers can reinforce brand equity by consistently conveying the brand’s meaning in terms of:

(1) What products it represents, what core benefits it supplies, and what needs it satisfies.

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