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REG. NO: SP15-EMBA-290
DATED: 18 APRIL, 2014

Strategic Business Unit
A Strategic Business Unit often termed as SBU is an autonomous, fully functional and
distinct unit of the business that develops their own strategic vision and direction. It may be
small enough to be flexible and could be large enough to exercise control over most of the
factors affecting its long-term performance. SBUs normally have their own strategic plans,
objectives as well as a distinct marketing mix which may very well be different from their parent
For example, General Electric is a company that has 49 SBUs. These SBUs are managed
independently having control over the factors affecting their performance. In Pakistan, Sitara
Group has 6 SBUs till to date.

Institutional markets
In these types of markets, buyer are large players like hospitals, schools, university and hotels
and the product purchased is not directly consumed by them. They use the purchased goods to
deliver and create goods and service of their own to serve the people in their care.
For example, hospitals buy medicine and surgical equipment in large quantity but these are not
utilized by the owner or staff rather they are used for provision of services to their customers.
Some major characteristics are;
Low budget
Captive clientele
Mostly, objective is welfare and not for profit.

Un-sought products
These are such products that consumers are unaware of or are not much interested in actively
pursuing to purchase these. A high degree of marketing, including heavy advertising and
aggressive sales and promotional efforts are often necessary due to consumer unawareness of the
product or no real desire to purchase it. Sometimes, these goods are purchased by consumer out
of fear, precaution, need and religious or cultural rituals.
Some common examples are funeral services, encyclopedias, fire extinguishers, and reference
books, earthquake or flood insurance, survival gear, smoke detectors, cemetery plots,
gravestones. In some cases, even airplanes and helicopters can be cited as examples of unsought

Buying process
The purchase is only the visible part of a more complex decision process created by the
consumer for each buying decision he makes. The stages that lead a shopper to purchase a new
product are described in detail below;

(Buying process)

1. Need Recognition (Awareness Of Need)

The buying process starts when the buyer recognizes a problem or need. The need can be
triggered by internal, external or marketing stimuli. For example a persons normal needs
rises to threshold level and becomes a drive.
The Maslows hierarchy of needs, these are one the best known and widely used
classifications and representations for hierarchy of needs. It specifies that an individual is
guided by certain needs that he wants to achieve before seeking to focus on the following
1. Physiological needs
2. Safety needs
3. Need of love and belonging
4. Need of esteem (for oneself and from the others)
5. Need of self-actualization.

2. Information search
An aroused consumer will be inclined to search for more information
Internal search : memory
External search: if he needs more information.
Friends and relatives (word of mouth), Marketer dominated sources, comparison
shopping, public sources etc. It Helps buyer find possible alternatives. For example you
are hungry and want to go out and eat
o Chinese food
o Indian food

3. Evaluation Of Alternatives
Once the information is collected, the consumer will be able to evaluate the different
alternatives that offer the most suitable option according to his needs and what he thinks is
best for him. Consumers evaluate the attributes of the products such as;
For Cameras : pixels, sharpness, size ,price

4. Purchase Decision
After evaluating different solutions and products according to his needs, consumer will
choose the one most appropriate and desired. His decision will depend on the information
and the selection made in the previous step based on the perceived value, products features
and capabilities that are important to him.
For example, a consumer is committed to the idea of buying a stereo of a well-known brand,
could change his decision if he has an unpleasant experience with sellers in the store. Also
promotional efforts, packaging, storage, method of purchase, incentives offered, out of stock,
and budget have important impact upon purchase decision.

5. Post-purchase Evaluation
Once the product is purchased and used, the consumer will evaluate its suitability with his
original needs (those that caused the buying behavior) and whether he has made the right
choice in buying this product or not. He will feel either a sense of satisfaction for the product
and the choice or on the contrary, a disappointment if the product was unable to meet the
desires and expectations.
Some after sale services and other such benefits like warranties, dedicated helplines and easy
availability of spare also make an impact on such evaluation.
For example, after eating Chinese, you may think due to lack of satisfaction that you wanted
a Pakistani meal.

Marketing mix
Marketing organizations around the world have been using the marketing mix to develop,
design and market products and services that satisfy customers needs. The success of a
product in the market depends on a marketers ability to mix the elements namely product,
price, place and promotion in the right proportion.
The way a product is priced should reflect the value it delivers,
keeping the competitors pricing structure in mind. Promotion helps a
company create awareness and build recognition for itself and its
products in the target market through advertising, sales promotion
etc. A company can gain higher profits if it can choose the right
place in terms of distribution channels like distributers, wholesalers,
and retailers etc., to sell its products.


The four traditional Ps of the marketing mix- product, place, price and promotion are
adequate for marketing a product. However they fail to cover the following aspect, which
differentiate products from services and are therefore, important for services marketing. The
problems faced by marketers have led to the addition of another three Ps for marketing
services, namely, people, process management, and physical evidence.

Marketers have identified three levels in developing the product element of the marketing
mix as far as services are concerned. The core level aims to satisfy the important needs of
the customer while the tangible level manages the appearance of the product. The
augmented level involves the addition of supplementary services to the basic offering.
These three levels can be condensed into two, the core level that caters to the basic benefits
and a secondary level which includes the tangible as the augmented service levels.

The pricing of services is very different from the pricing of goods for various reasons.
Service for example, can be differentiated based on their price, as a higher price is generally
associated with better quality. The fixed cost is higher and the variable cost is low in the case
of service. Pricing of the same service can be changed depending on the demand for the
service. However, this only happens with some of the products which are seasonal.

Service providers should aim to promote their service in order to eliminate the perceived risk.
This can be best achieved by encouraging and promoting positive word-of-mouth publicity,
developing strong brands, offering a trial use and finally by managing advertising and public
relation effectively to clearly communicate the message to the customers.

Place relates to the ease in accessing the service. Due to the inseparability of service, they are
produced and consumed at the same place. This makes it impossible for service providers to
produce the service at a place where the cost are low and sell at a place where there is a high
demand for it.

Service organizations perceive people as a means to gain a competitive advantage in the
industry. Therefore they invest in attracting, training and relating the best talent.

The service personnel have an important role in not only designing the service, but also in
delivering it.
Involve consumers as co-producers in designing the service offering to suit their individual
preferences. In this case the service personnel play an important role in helping the end
consumer present his requirements precisely.

The production and delivery process in the manufacturing sector is easier than in the service
sector. Marketers of service are often confused, as there is little difference between marketing
and operations management in services. Customer service encounters have an impact on the
quality of service delivered by the organization.

Physical Evidence
Service customers experience a great perceived risk as they cannot rate a particular service
until it is consumed. Therefore they attach an element of tangibility to their service offering.
The physical evidence can be in any form, for example, brochures or TV commercials
showing the detail of holiday destination, pleasant and courteous behavior of the service
personnel in a bank, the location and ambience of a food outlet etc. makes an impact.