Market Segmentation, Marketing Mix & Recruitment

Posted on Oct 6, 2024 in Economy

Market Segmentation

Market segmentation is the process of dividing a market into smaller, uniform groups with similar characteristics and needs.

Variables Used for Segmentation

Geographic Variables

  • National or international
  • Country size
  • Weather

Demographic Variables

  • Age
  • Income
  • Profession
  • Education Level
  • Socioeconomic status
  • Religion
  • Nationality

Psychographic Variables

  • Personality
  • Lifestyle
  • Values
  • Attitudes

Behavioral Variables

  • Pursuit of profit
  • Product utilization rate
  • Loyalty to the brand
  • Using the final product
  • Level of ‘ready-to-eat’
  • Decision making unit

Marketing Mix

Product

A product or service is anything (tangible or intangible) offered to a market for purchase, use, or consumption that can satisfy a need or desire. Products have a life cycle that varies depending on consumer response and competition.

Product Life Cycle Stages

  • Introduction
  • Growth
  • Maturity
  • Decline

Stage of Market Introduction

The introductory phase (also called presentation) occurs just after a new product is introduced into the market. Sales are low because there isn’t wide market acceptance. Product availability is limited, and competition is limited or nonexistent.

Growth Stage

If the market accepts the product, sales increase rapidly. Physical distribution planning is difficult at this stage of growth (also called acceptance). However, product availability expands rapidly to accrue buyer interest. Profits increase as customers become familiar with the product.

Maturity Stage

The earlier growth phase can be quite short, followed by a longer period called maturity. Sales growth slows or stabilizes at the highest sales levels. The product is considered established in the market. At this point, profitability is high, and different marketing techniques can extend the product’s lifespan.

Decline Stage

Eventually, sales decline (decay) for most products due to changes in technology, competition, or loss of customer interest. Prices often fall, and profits shrink.

Price

Price is the monetary amount exchanged in a transaction. It’s determined by market research and defines the rate assigned for market entry. Price is the only element of the marketing mix that generates income.

Place or Distribution

Place or distribution defines where to market the product or service offered to the consumer. It considers the effective management of distribution channels, ensuring the product reaches the right place at the right time and under appropriate conditions.

Direct Channel (Short Circuits Marketing)

The producer or manufacturer sells the product or service directly to consumers without intermediaries.

Indirect Channel

A distribution channel is often indirect because intermediaries exist between the supplier and the end user or consumer.

Middlemen

Middlemen perform distribution functions. Distribution companies are located between the producer and the end user and are usually independent of the manufacturer.

  • Facilitate and simplify buying and selling; it’s inconceivable that all consumers could contact all manufacturers.
  • Buy large product quantities and sell them in smaller lots or individual units. In the case of agricultural products, they buy from small farmers, group production, classify, package, label, and accumulate sufficient quantities to meet target market demand.
  • Provide funding to various figures in the distribution channel.
  • Store products to reduce delivery time (lead time) to the consumer.

Promotion

Promotion involves communicating, informing, and persuading customers and other stakeholders about the company, its products, and offers to achieve organizational objectives. The promotional mix consists of sales promotion, sales force personnel, advertising, public relations, and interactive communication.

Recruitment Sources

Characteristics of Each Source

Internal Candidates

Candidates from Outside the Company (Supply, Demand, and Price)

Means of Internal and External Recruitment

Internal Recruitment

Internal recruitment occurs when a company tries to fill a vacancy by relocating employees. This can involve internal recruitment, staff transfers, promotion of staff, promotion of personal transfers, and personal development programs.

Advantages of Internal Recruitment

  1. It’s cheaper.
  2. It’s faster.
  3. It has a greater validity and safety index.
  4. It’s a powerful source of motivation for employees.
  5. It leverages the company’s investment in staff training.
  6. It develops a healthy competitive spirit among the staff.

Disadvantages of Internal Recruitment

  1. It requires that new employees have development potential.
  2. It can generate conflicts of interest.
  3. When used improperly, such as when employees are promoted unnecessarily.
  4. When performed continuously, it can lead employees to limit political and organizational guidelines.
  5. It may not be done globally within the organization.

External Recruitment

External recruitment involves candidates from outside the organization who can come from:

  • Candidate files
  • Posters or ads
  • Contacts with trade unions and professional associations
  • Contact with universities
  • Contact with other companies operating in the same market
  • Recruitment agencies

Advantages of External Recruitment

  • Brings new blood and new experience to the organization
  • Renews and enriches the organization’s human resources
  • Leverages investments in training and staff development conducted by other companies

Disadvantages of External Recruitment

  • Usually takes longer than internal recruitment
  • Is more expensive and requires immediate investments and expenditures in newspaper ads
  • Is less secure than internal recruitment, as external candidates are unknown
  • Can thwart internal staff
  • Wage policy affects business

Joint Recruitment

This method uses both internal and external recruitment. It can be adopted in three ways:

  1. Initially external recruitment, followed by internal recruitment if the desired performance isn’t achieved. The company is more interested in human resource input in processing.
  2. Initially internal recruitment, followed by external recruitment. The company gives priority to employees.
  3. Simultaneous external and internal recruitment.

Selection Process

Definition of Acceptance or Rejection Criteria for Each Stage

Reception of History (CV) or Job Applications

Preliminary Interviews, Examinations or Tests of Different Types, Depth Interviews or Evaluation, Findings and Recommendations, and Background Examination

Decision of Recruitment, Job Offer to the Candidate

Direct Observation Methods

The analysis of the position involves observing the occupant of the office directly and dynamically while they perform their functions. The analyst records the data by key observation in the analysis sheet of charge. It’s advisable to apply this method to simple and repetitive work.

Features

  1. The charge analyst collects data through observation.
  2. The analyst’s participation fee is active, and the occupant’s is passive.

Advantages

  1. Accuracy of data
  2. Doesn’t require the occupant of the office to stop performing their work
  3. Ideal way to implement simple and repetitive charges
  4. Proper alignment between the data and the basic formula of the analysis of charge (what they do and why they do it)

Disadvantages

  1. High cost because the analyst position requires investing time
  2. Simple observation doesn’t allow for obtaining important data for analysis
  3. Not recommended for positions that aren’t simple and repetitive

Method of Survey

Allows for obtaining correct answers and helpful information before applying. Requires meeting at least one occupant of the position and their superior to ensure the relevance and appropriateness of the questions and eliminate unnecessary details.

Features

  1. A questionnaire filled by the occupant or their superior
  2. The analyst is responsible, the occupant is passive, and the superior is active

Advantages

  1. The occupants of the office and line managers can fill out the questionnaire together or sequentially
  2. This is the most economical method for the analysis of charge
  3. The method covers more people because the questionnaire may be circulated to all occupants of the charge
  4. The ideal method for analyzing high-level positions

Disadvantages

  1. Not recommended for use in low-level positions
  2. Requires careful planning and preparation
  3. Tends to be superficial or distorted in relation to the quality of the written responses

Method of Interview

Guarantees face-to-face interaction between the analyst and the employee, allowing for the removal of doubt and distrust.

Features

  1. Data collection through verbal questions and answers
  2. Participation of the analyst and the occupant of the position is active

Advantages

  1. Data relating to a charge are obtained from those who know it best
  2. This method provides improved performance in the analysis
  3. Can be applied to any type or level of charge

Disadvantages

  1. A poorly conducted interview can lead to a negative staff reaction
  2. Can lead to confusion between opinions and facts
  3. Is time-consuming if the analyst isn’t well-prepared
  4. High operating cost

Mixed Method

An eclectic combination of two or more analytical methods. The most used are:

  1. Questionnaire and interview, both with the occupant of the position
  2. Questionnaire with the occupant and interview with the superior
  3. Questionnaire and interview, both with the superior
  4. Direct observation with the occupant of the position and interview with the superior
  5. Questionnaire and direct observation, both with the occupant of the office
  6. Questionnaire with the superior and direct observation by occupants of the cargo, etc.

Variable Costing Method

Absorption costing is the most widely used costing system for external purposes and even for making decisions. It tries to include all production function costs in the product cost, whether fixed or variable.

Absorption Costing Method

The absorption costing method includes the cost of items (materials, labor, and overhead) and incorporates them into products, whether fixed or variable. That is, items absorb the costs, regardless of their behavior in relation to the volume of activity.

The Cash Conversion Cycle

The cash conversion cycle is the time lag from when raw materials are purchased to the collection of sales for the finished product. This ratio measurement, also known as the cash cycle, is calculated using the following formula:

CCE = PCI + PCC – PCP

PCI = inventory conversion period

PCC = collection period of accounts receivable

PCP = period in which accounts payable are deferred

Bank Reconciliation

Bank reconciliation is a process to confront and reconcile the values a company has registered in a checking or savings account with the values supplied by the bank statement.

The company has a bank ledger where it records every transaction made in a bank account, such as check writing, consignments, debit notes, credit notes, canceled checks, and allocations.

Corporate Credit Policy

A company’s credit policy is a set of operational procedures designed to facilitate the effective management of the entity’s credit transactions. Choosing a credit policy for any particular company will be strongly influenced by the existing socio-economic and legal environment.

Granting of Credit

The first set of topics, granting of credit, becomes clear if we ask ourselves the following questions:

  1. Which companies are granted credit?
  2. How much credit will be awarded to companies authorized to receive it?
  3. Under what terms or restrictions will credit be given?

Collection Policy Claims

The second set of items, collection policy claims, relates to the following questions:

  1. How many total resources should be spent on recovering existing commercial loans?
  2. At what point in the life of trade credit should these resources be spent?
  3. When should efforts to recover trade credit be abandoned?

The third item relates specifically to methods for monitoring credit policies.

Lending Policies

a) Credit Conditions

When firms offer trade credit to other companies, they usually prepare documentation that includes:

  1. The maximum number of days the customer may defer payment (credit period)
  2. The day from which this period is counted, if different from the billing date
  3. The amount of cash discount (expressed as a percentage of the sales price) and the maximum period within which the customer can use it

b) Credit Standards

This system allows for accepting or rejecting unwanted credit applications. The existence of credit standards improves the chances that the company’s credit staff makes the right decisions.

  1. Applicant’s credit history
  2. Current financial situation
  3. Some indication of long-term financial strength

c) Information Sources

The credit manager can use information from various sources, both internal and external, for credit-granting decisions. For example, customers may be asked about their credit history, and comparative balances can be used.

Some of these indicators are the current ratio, the acid test, and the average collection time of accounts receivable.

Policy for the Recovery of Loans

This policy is closely related to the question of how many resources the enterprise should commit to collecting delinquent customer loans.

The range of options for accounts receivable collection begins with a simple phone call or standard letter and culminates in legal action and asset seizure.

It’s necessary to ask a few questions before starting a stock account when the time limit is exceeded.

  1. How significant is the account?
  2. How long has the account been exceeded?

Maintenance and Credit Control

Maintenance and credit control policies should be designed to evaluate the performance of the company’s loan granting and recovery policies.