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Unit 3: Introduction to Marketing

Contents
P1: Describe how marketing techniques are used to market products in two organisations................ 1
P2: Describe the limitations and constraints of marketing .................................................................... 4
P3 & P4: Describe how a selected organisation uses marketing research to contribute to the
development of its marketing plans. ...................................................................................................... 6
Market Research For Market Planning ........................................................................................... 6
P5: Explain how and why groups of customers are targeted for selected products............................ 11
P6: Develop a coherent marketing mix for a new product or service .................................................. 13

P1: Describe how marketing techniques are used to market products


in two organisations

Diesel And Kellogg's use various different marketing techniques to market their products.
They use the same techniques but in different ways.

About Kellogg's: Kellogg's is a prominent player in the world of Breakfast and produces
more than three out of 10 packets eaten in UK. Kellogg's has 42% of UK market share, this
makes Kellogg's a market leader and in 2009 it was Britain's biggest grocery selling brand
with sales of £550 million and global sales of nearly 12 billion. Kellogg's products are
manufactured in 18 countries and marketed in more than 180 countries and it employs around
32000 employees. The Company Products including cookies, crackers, toaster pastries, cereal
bars, fruit-flavored snacks, frozen waffles and veggie foods. Kellogg's markets its products
under a variety of brands include Rice Krispies, Special K and Nutri-Grain.

About Diesel

Diesel is a global clothing and lifestyle brand. With a history stretching back over 30 years,
the company now employs some 2,200 people globally with a turnover of 1.3 billion and its
products are available in more than 5,000 outlets. However, this list of numbers is far less
interesting than the company, people and founder behind them. Diesel is a remarkable
company with a unique mindset. A mindset which puts sales and profit second to building
something special, something cool and something which can change the world through
fashion.

Manohary Verakathy
Unit 3: Introduction to Marketing

Ansoffs Matrix
The Ansoff Matrix is a growth strategy used by businesses to decide on their product and
how they are going to expand. The Ansoff Growth Matrix is a diagram that helps businesses
grow in the right direction.
Diversification
Product diversification is a form of corporate strategy for a company. It seeks to increase its
profits through greater sale volume obtained from new products and new markets.
Diversification can occur either at business unit level, or cooperate level. At Business level, it
is most likely to expand into a new segment of an industry that business is already in. At
cooperate level, it looks at the overall scope of the enterprise, while taking stakeholders
expectations into the business.

Market Development
Market development is when a business sells its existing products into new markets, this can
be done geographically, which means exporting existing products to other countries, they
could also create new packaging and different pricing policies. Kelloggs use this strategy
with their products, they enter into new markets by having products for kids (Coco Pops,
Moons and stars), cereals and cereal bars for the health conscious ( Special K, Bran Flakes),
and sweets such as fruit winders. They also have family size packs, and mini cereals for
travel. By doing this they are increasing their customers as they are exploring new markets.
Diesel enter new segments of the market, by selling products other than clothing. They have
bough our several different perfumes, jewelry, footware, underwear, eyeware, watches,
childrens clothing and bags. By doing this, they are introducing their brand to different
people, and adding more products to their range, which will increase their clientele.

Branding

A brand is the identity of a specific product service or business. Branding can take many
forms, such as; name, sign, symbol, colour or slogan. Both Kellogg's and diesel have branded
themselves, and are easily recognised. Kelloggs have their name in red writing, and diesel
have a red box, with "diesel" written in white in the middle, and a slogan saying " For
successful living"

Manohary Verakathy
Unit 3: Introduction to Marketing

Market Penetration

Market penetration is increasing market share of an existing product, or promoting a new


product though strategies such as bundling, advertising, lower prices, or volume discounts.
Kellogg's use this strategy by introducing a range of products to suit all age types. They do
special offers, discounts, and sell larger packages for less. Diesel increase their market share
of an existing product by advertising their products, and making them available for sale in
other outlets.
Brand Positioning

Brand positioning is a marketing strategy that aims to make a brand occupy a distinct position
which is relative to competing brands, in the mind of the customer. Companies apply this
strategy either by emphasising the particular features of their brand and create a suitable
image. Kellogg's sand diesel are very different but both use this strategy, they just apply it in
different ways. Diesel use celebrities and models, to advertise their products. This is meant to
emphasise that diesel is a desirable brand. They make the adverts sexy, they do this to
encourage people to want to wear their clothes, and use their products so they can have that
look and feel. Kellogg's however, are very family orientated. They have individual characters
for their children cereals, and their adverts are similar to cartoons. Their adult adverts have
woman in red dresses, promoting healthy eating, as a brand they are very delicate and family
orientated.

Brand Extensions

Brand Extension is an alternative word for line extension, which refers to increasing the
range of products, and expanding the variety. Kellogg's and diesel both use this strategy, but
again in different ways. Kellogg's has increased its range of products, by offering cereal bars
and snacks, which are available for both adult and children. They also have expanded on their
variety by offering several different flavours for their products. Diesel have increased their
range of products by offering perfumes and various accessories instead of just clothing, their
variety consists of different colours for their products and sizes to fit everyone.

Relationship Marketing

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Unit 3: Introduction to Marketing

Relationship marketing is an activity that is aimed at developing and managing trusting and
long term relationships with larger customers. In relationship marketing, customer profile,
buying patterns, and history of contacts are maintained in a sales database. Kellogg's is using
a strategy called "Direct Mail Drive" to communicate with over 1.5 million customers. They
are working with agency Leo Burnett using integrated strategies to build up a relationship and
database of customers.
Difference Between Relationship Marketing And Transactional Marketing
Transactional marketing focuses on getting the customer to buy a certain product and walk
away, while relationship marketing sees the sale as a first step at building up a long term
relationship. Diesel prefers to use transactional marketing compared to relationship marketing
. By using brand extension strategy, they can offer more products to keep customers happy.
This can build up a relationship so customers keep coming back.

Value Of A Lifetime Customer


Its important as customers spread good words and basically advertise the company. Different
rewards for different customers are given as a thank you for their loyalty.Diesel offer
different rewards for different customers. They have a "Diesel Cult Card" which allows you
to collect points called style miles, which can be swapped for gifts, invitations to parties and
pre-sale events, also can purchase brand new products before release.

P2: Describe the limitations and constraints of marketing

When you buy a product or service, there are laws which have been created to protect you.
I'm going to write about several laws, and how each of them impact Kellogg's and Diesel in
different ways.

Sale Of Goods Legislation 1979 Act

This law means that the person selling the product or service, has the legal right to do so. If
you are selling goods by description, such as newspaper, or catalogue, the goods have to
correspond with the description. This also applies to selling goods by sample - the rest of the
goods have to have the same quality of the sample product. This applies to both Kellogg's and

Manohary Verakathy
Unit 3: Introduction to Marketing

Diesel. Kellogg's have to have the legal right to sell their products, however they don't sell by
description in newspaper as they show pictures and promote the cereal instead of describing
it, they also don't sell in catalogues. Diesel also have the legal right to sell their products, and
they do sell by catalogue, so their products have to correspond to their description.

Consumer Protection From Unfair Trading

This law is to ensure traders act honestly and fairly towards their customers. This applies both
to Kellogg's and diesel, as their customers are purchasing goods/services from them.

Consumer Credit

This law requires most businesses that lend money to customers or offer goods and services
on credit or engage on certain credit activities to be licenced by OFT. Trading without a
licence in such cases is a criminal offence and can result in a fine and/or imprisonment. This
doesn't not apply to Kellogg's as they don't offer credit for their products, however Diesel do
offer credit accounts / catalogues for their products.

Consumer Protection

This law is aimed at making sure that businesses act fairly towards their customers, this
applies to both Kellogg's and diesel, and they sell products to customers. This will allow
customers to be protected, and businesses treat them fairly.

Distance Selling

A lot of people buy products and services online, through the mail and over the phone. These
are all examples of distance selling. Business that normally sell by distance means they have
systems in place for trading this way, such as letters and emails they send to customers they
death with from a distance. These businesses need to comply with the consumer protection (
Distance Selling) regulations 2000. This would not apply to Kellogg's as they don't sell their
products directly to their consumers, they go through a third party such as Tesco's or
Sainsbury's. Diesel however do sell their products internationally online, and through the

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Unit 3: Introduction to Marketing

mail so they would have to comply with the regulations act.

ASA Self Regulations And Advertising To Children

This law is to stop companies from advertising junk food, horror, and sexual scenes to
children. This applies to both Diesel And Kellogg's. Diesel offer a children's clothing range,
so they will have to comply with the advertising act, and Kellogg's is classed and junk food
as it sugar and salt content, so they use cartoons to advertise, and characters instead of
children.

P3 & P4: Describe how a selected organisation uses marketing


research to contribute to the development of its marketing plans.

Market Research For Market Planning


Introduction

This marketing plan consists of a one year plan for kelloggs new cereal called On The Go's.
This plan will describe what the companys goals are for the year ahead and what htye plan to
achieve using the marking mix and PEST analysis and SWOT analysis.

The Challenge

The product that has been created for Kellogs, is called On The Go's. These are bitesized
pieces of multigrain biscuit, which are covered with a coating of yoghurt. These are designed
to slowly release energy to students throughout the day, and can be taken in a bag to eat as a
snack aswell as a cereal, for students who dont have the time to sit down to a proper
breakfast.

Situation Analysis - Company Analysis

Kelloggs began on feburary 19th, 1906. The company was founded by two brothers, William
Kieth Kellogg, and John Harvey Kellogg. The kelloggs philosophy was - That improved

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Unit 3: Introduction to Marketing

diets, leads to improved health. The popularity of Kellogggs cornflakes, was almost
accidently discovered in 1876, which encouraged William Kieth Kellogg to set up his
company, which is now the worlds most successfull cereal manufacturer.

Customer Analysis

The people who are going to purchase the cereal will be teenages in school/college. The
whole idea of brain food, is to create a new cereal, which will provide the correct nutrients
and energy to students, so they can improve their learning ability and concerntration in the
classroom. Its also convienient as the cereal On The Go's, can be taken with you in a lunch
box or bag to be eaten as a snack, and because it provide slow release energy, it will keep you
energised, and not hungry. This cereal is perfect for students who dont have time to eat a
proper breakfast in the morning, and lack concertration in the class room. On The Go's will
improve this. The target audience would be 17-21, which will cover people in school, college
and university.

Competitor Analysis

Kelloggs have to make sure their competitors dont offer better products than themselves.
They dont want thei competitors to take away their customers, by offering products which
can do more, and have more of an effect, such as diet, or convience. They need to constantly
market research to see what people want, and provide it, so they can keep their customers and
carry on to achieve their goal as the most sucsessfull cereal manufactuer. Some of their
competitors are company such as, Red Bull, Lucozade Energy, Pro Plus, Beaskfast Bars and
Power Shakes.

Climate

PEST analysis stand for - Political, Economic, Social, and Technological analysis and
describes a framework of macro -enviromental factors used in the enviromental scanning
component of strategic management. Starting with political, in the Uk we have a coalition
government. This means two parties have joined together. A coalition government can be
created in a time of national difficulty and crisis such as wartime, or economical crisis. The

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Unit 3: Introduction to Marketing

economic enviroment has just pulled through one of the worst recessions in history, which
caused the VAT rates to increase by 2.5%, this meant the public had less money to spend on
"luxuries" and had to make certain cutbacks on spending, which affected almost every
business. Social and Cultral Enviroment, has also changed, which means people now have
less time to sit down and have a meal, instead people resort to fast food to save time, and for
convienience. The technological enviroment is constantly improving, and this world is
becomming more digital. Kellogg's can use internet social networking sites to advertise, and
even have mobile apps - which people can use to play games, and keep track of their fibre
intake.

SWOT Analysis

Swot analysis is a strategic planning method used to evaluate the strengths,


weaknesses/limitations, opportunities and threats involved in a business.

Strengths

The strengths for On The Go's would be that they are priced affordably for students, and can
be purchased from corner shops, petrol stations and major super markets, so they are local to
everyone. They are small convienient size so can be taken anywhere with you, and can fit in a
lunchbox or handbag. This kind of strength appeals to the target market as they want
something they dont need to travel miles for, a good price, and doesnt take up too much space
in their bag.

Weaknesses

The weaknesses for boost bites would be to overcome the competition that is out there
already, and to try convice people that On The Go's is a product that works. Also, product
awareness would also be needed in order for the customer to recognise it. Advertising would
be needed and promotion. People at kelloggs would also need to be trained so they have full
knowledge of the product.

Opportunities

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Unit 3: Introduction to Marketing

One of the main opportunities for On The Go's would be that it could be sold internationally,
and could also be avaliable for sale in schools and college canteens. This would increase the
market share of the product, and allow the product the opportunity to be recognised as a
healthy convenient alternative to breakfast. This would increase the profits for kelloggs and
could lead to On The Go's developing more products similar in different sizes and flavours,
and come in different forms to suit the tastes for people.

Threats

Competition from other brands would be a threat to On The Go's sucsess. Kelloggs already
have a wide varity of breakfast bars such as nutri grain, and healthy mini breaks for the health
concious. Bad advertising, and bad promoting could also have a efffect on kelloggs sucsess
on the new product, as they would need to create an identity which is associated with the
product. As seasonal wise, people might not want something that could be considered "dry"
in the summer, or eat buscuits for breakfast, and people could oopt out for eating hot snacks
in the winter instead of "cold" snacks. Kelloggs need to take all of this into consideration
when promoting the product, otherwise it could damage their profits, and lose money on the
product if it doesnt sell well.

Market Segmentation

Primary Research

My target market for On The Go's would be 17-21 year olds, and are males. They would be
waking up late giving themselves not enough time to eat breakfast, so the time they do have
is to scrub up for college or school. They would probarly drive a 1.1 saxo, have a weekend
job with a low income of about 6-8 k per annum. This would be a person with no
commitments or responsibilities so he would have a high disposable income. He would also
go clubbing every friday night and drink WKD with his mates. The only big expenses he
would have would be his car insurance, phone contracts, and social life spending money. He
would also watch tv programmes such as top gear, saturday football matches, and always at
the park playing football with his friends.

Manohary Verakathy
Unit 3: Introduction to Marketing

Secondary Research

My secondary market would be 14-16 year old single males. Who live at home with their
parents who have control of all the supporting of the child. This particular person would play
xbox games such as call of duty, grand theft auto, and need for speed. His mother would
probarly give On The Go's as a extra bit of breakfast to snack on the way to school, or as a
alternative for chocolate in the lunchbox. This person would earn about 2K a year, that
money would go cinemas and genereal hanging out with friends.

Alternative Marketing Strategies

Alternative marketing strategies are things such as promotional texts sent to kelloggs
customers, letting them know about new products and offering promotions via codes, emails
could also be sent out offer discounts and vouchers, and kelloggs could sponser sporting
events or concerts to help their products become more recognised.

Selected Market Strategy

My chosen market strategy would be sproting events as thats what my target market consists
of. This would let young people recognise kelloggs is apart of their sport, and this could
increase the awareness of their products. On The Go's could become more desired and seen
as a healthy snack and is relevant with sport.

Marketing Mix

Product

The product i have created is Kelloggs " On The Go's" which is a multigrain buscuit covered
in yoghurt. These are designed as a alternative to sitting down and having a bowl of cereal,
asa they slowly release energy and carbs throughout the morning and will take you through

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healithy to lunchtime.

Price

The price for Kelloggs " On The Go's" would be 1.29, which is almost the same price as a
bag of crips in most places or a bar of chocolate. I think this price is reasonable for a student
budget.

Distribution ( Place)

On The Go's will be distributed in major outlets such as sainsburys and tescos, aswell as local
corner shops, petrol stations, schools and canteens.

Promotion

40% Advertising
30% Leaflets + Flyers
10% Post ( Vouchers and discounts)
20% Sporting events sponserhips

Short Term And Long Term Projections

Short term projections would be to kick start the sales and promotion for On The Go's, and let
the brand enter the market and attract customers, once that has happend, my long term
projection would be to develop the product, and have it known globally, increasing sales and
creating a healthy profit off my product, and to also have On The Go's as the worlds favourite
breakfast time snack.

P5: Explain how and why groups of customers are targeted for selected
products

A target market is a specific, well-defined segment of consumers that a company plans to


target with its products, services and marketing activities. Target marketing orients all of the
various components of the marketing function toward a single group, maximizing the appeal
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Unit 3: Introduction to Marketing

of brands to specific markets. The term target audience is a bit narrower; it refers
specifically to the group of consumers targeted by advertisements. Outside of the context of
business, target audience can also refer to the specific group of people targeted by television
shows, movies and music products. In marketing and advertising, a target audience is a
specific group of people within the target market at which a product or the marketing
message of a product is aimed at.

Positioning Statement

Positioning is a marketing concept that outlines what a business should do to market its
product or service to its customers. In positioning, the marketing department creates an image
for the product based on its intended audience. This is created through the use of promotion,
price, place and product. The more intense a positioning strategy, typically the more effective
the marketing strategy is for a company. A good positioning strategy elevates the marketing
efforts and helps a buyer move from knowledge of a product or service to its purchase.

Positioning in Sales Locations


Reaching the customer is not simply a matter of advertising, it is also a matter of choosing the
right channels for distribution. If a majority of your target market lives in an urban area with
only public transportation available to them, having your product in rural areas where a
private automobile is needed for transport would not equal sales success. Place or position
your product or service as close to the target market as possible. Create similar
advertisements in store as the ones seen out of store to create an overall identity for your
brand. Positioning through Price.

It should be noted that there is a large amount of research on the psychology of pricing in
marketing. Simply put, the price of an item tells the buyer more about the item than most
realize. Many associate a higher price with higher quality and the opposite with a lower price.
Additionally, if a product is positioned as a good alternative to high-priced brands, the
marketing department must price it in the middle of the market to avoid a comparison to the
cheapest end of the spectrum.

Examples of Target Market


Examples of Target Market in a Business.

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Unit 3: Introduction to Marketing

1.Nike Air
Nike air is aimed for athletics, and both sex are enable to purchase and wear the trainers that
does athletics or any types of other sports which thinks the trainers are suitable for them.
Nike air is demographics as it is targeted for a certain age group that are active in sports.
2. Mac
Mac is aimed at woman because, they sell lipstick, foundation and many more as men dont
wear make-up as woman does. Mac is demographic because they target woman of certain
ages for example ,an 8 year old girl cannot wear full on make-up as they are young.
3.Bodyshop
Bodyshop is aimed at both sex but mostly woman as they sell make-up and organic products
and it is psychographicbecause Bodyshop products are all organic.

4.IKEA
Ikea is aimed at young and fashionable people as its main consumers; in particular those love
modern furniture and accessories. Therefore, its products are more colourful. This shows that
IKEA is a demographic and geographic, as many countries has IKEA. In addition IKEA
packages there products completely different compare to B&Q also IKEA has products
starting from birth such as ,cots and a new-born baby decoration and upwards.
5.Nivea
Nivea is aimed at woman and men aged 18-35, this is a demographic because its market by
gender, with similar products for women and men that are packaged distinctively.
6..Starbuck
Starbuck is aimed at everyone except children that are not suitable to the products they
produce and sell. However this is geographic because all over different countries they have
Starbucks.

P6: Develop a coherent marketing mix for a new product or service

Product - Granola bars


Price
Price is very significant aspect of the marketing mix as this affects whether consumer will

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Unit 3: Introduction to Marketing

purchase your product or not.


Our pricing strategy

I have selected to utilize the skimming pricing strategy for our new product, this is done to
maximize the profits as we have entered the market with a product before the competitors
enter the market, if however the competitors enter the market with a product similarly or
same then our product will be unsuccessful at making a profit which is the core value.
The pricing I have elected for the organic granola bars is 8.79 for 18 bars of 2 bar packs
Therefore meaning that 8 granola bars will be in one box and the second pack will entail the
other 8 granola bars. If the situation comes to that our product demand decreases we will
decline the pricing to 4.40

Factors that influenced the pricing strategy

There are numerous diverse factors that were taken notice of for the product pricing and they
are the following;
Competitors pricing
Manufacturing expenses
The price that is believed to our target audience will be delightful and willing to pay
Place (distribution)
Place (distribution) is how businesses gets its products to the consumers through what
location should the product be at and the distribution of it.
Grocery stores
Organic granola bars will be sold at Grocery stores or known as supermarkets entailing the
following; Waitrose, Sainbury's, Morrison's and Marks and Spencer's. The product will also
be available at convenient stores for example Tesco Metro, Tesco Express, Sainbury's Local,
and the Co-Operative.
Distribution
The objective of distribution is to make products available in the correct place at the correct
time and in the correct amount of quantities. The type of distribution we have selected is
selective distribution for our product. Small quantity of retail outlets have been chosen to
distribute the product, throughout United Kingdom. This will entail Supermarkets,
convenient stores and the product will further be available for online shopping.

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Unit 3: Introduction to Marketing

E-commerce
E-commerce is defined as commercial transaction conducted electronically on the internet.
Organic granola bars will be sold online and further in stores. Through E-commerce we will
be able to link promotional offers Thus maintaining high sales figures.
Product
Product -
organic granola bars
Competitors Quaker Oats Chewy Granola Bars and Nature Valley Crunchy
Quaker Oats Chewy Granola Bars
Quaker Oats has presently a selection of granola bars that have 8g of whole grains that
contain no high fructose corn syrup. The granola bars is available in boxes of 8 with 18 bars.
The average pricing for the granola bars are 3.63. On observation it can be seen that there is
a clear gap between the quality and pricing as compared with branded granola bars and
supermarket own brands more specifically organic granola bars.

Nature Valley Sweet & Nutty


This product contains crunchy nuts and toasted oats for a delightful sweet and nutty flavor
which comes in three variations and they are the following; peanut, almond, and chocolate.
They are further dipped into nutty flavor coating. The bars are available in boxes of three
with 5 bars entailed. The average pricing for the granola bars are 2.39.

The average weight of a granola bar is 55g, this information will aid the product
development. The product is granola bars is made from organic barley, whole grains and
oats.
Promotion
The organic granola bars will be sold at the given price of 8.79 for the majority of the year
however during the low sale periods that the organic granola bars will have their price
lessened. promotion strategy for example purchase one get one free will be utilized. At the
beginning of the year we will give out free samples with Waitrose online shopping and in
store shopping orders. This is done to encourage and enthuse the consumers into purchasing
more of the different five variations of the product that we have offered.
The product
Promotion for our product will push its ethic values lets take for example we will promote

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Unit 3: Introduction to Marketing

how all of the granola bars utilize organic ingredients.


Promoting the brand
Promoting the brand is significant as promoting the food product. Commercial will play an
important role in selling the product whilst it will promote the brand of Nestle's. This will be
done by utilizing television commercial, radio, pamphlets, internet and store promotions. By
doing this the brand of Nestle's and it's new product entering a new market will be recognized
because of variations in the promotion strategy.

References

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Kevin, K. (2002), Branding and Brand Equity, in Handbook of Marketing, eds., Bart Weitz
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Kotler, Philip (2012). Marketing Management. Pearson Education. p. 25.

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References

Bhatia, S.C. (2008) Retail Management. India: Atlantic Publishers & Dist.

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BMS (2013) Explain Bases of Market segmentation. [Online]. Available


at: http://www.bms.co.in/explain-bases-of-market-segmentation/ [Accessed: 10
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Silk, A. J. (2006). What is marketing? USA: Harvard Business Press.

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[Online].

Manohary Verakathy

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