You are on page 1of 24

Chapter 1:

What is marketing?

Marketing is the process of communicating the value of a product or service to customers,

for the purpose of selling the product or service. It is a critical business function for
attracting customers.

Gap in the market

An unmet consumer need or a group of potential customers who are not yet purchasing a
good or service. Gaps in the market represent opportunities for companies to expand
their customer base by increasing awareness and creating targeted offers or advertising
campaigns to reach the untapped market. Identification of gaps in the market is an
important step in increasing market share.

There are a number of marketing gaps:

Space gap
Time gap
Information gap
Ownership gap
Value gap

Marketing activities to bridge the gaps

The gap analysis can be used to analyse gaps in processes and the gap between the existing
outcome and the desired outcome. This step process can be summarised as below:

Identify the existing process

Identify the existing outcome
Identify the desired outcome
Identify the process to achieve the desired outcome
Identify Gap, Document the gap
Develop the means to fill the gap
Develop and prioritize Requirements to bridge the gap
Market orientation

Production Orientation
Production orientation follows the premise that any product of a high quality can be sold.

From the beginnings of capitalism until the 1950s, it had been assumed that the key
requirement of business success was a product of high technical quality. If a business
produced a product that worked well and was durable, the assumption was that it would
have no difficulty selling the product at a profit. This was called the production orientation,
and it was generally true that good products could be sold without effort - encapsulated in
the saying "Build a better mousetrap and the world will beat a path to your door." The
production orientation generally held true due to the growing numbers of affluent and
middle class people that capitalism had created.

Sales Orientation

Sales orientation focuses primarily on the selling and promotion of a particular product.

As opposed to production orientation or product orientation, a firm using a sales orientation

focuses primarily on the selling and promotion of a particular product. The successful
management of the relationship between the company and its customers defines the act of
sales or selling. It creates value for customers. Emphasis is not placed on determining new
consumer desires, as such. Consequently, this entails simply selling an already existing
product and using promotion techniques to attain the highest sales possible.

Marketing orientation

A market orientated business starts with the customer, finds out what they want and the
produces it for them.

It was claimed that instead of producing products then trying to sell them to the customer,
businesses should start with the customer, find out what they wanted, and then produce it
for them. The customer became the driving force behind all strategic business decisions. The
marketing orientation is perhaps the most common orientation used in contemporary
marketing. It involves a firm essentially basing its marketing plans around the marketing
concept and, thus, supplying products to suit new consumer tastes.
Societal marketing orientation

This concept is an enlightened marketing concept that holds that a company should make
good marketing decisions by considering consumers' wants, the company's requirements,
and society's long-term interests. It is closely linked with the principles of corporate social
responsibility and of sustainable development.

The societal marketing concept holds that the organizations task is to determine the needs,
wants, and interests of a target market and to deliver the desired satisfactions more
effectively and efficiently than competitors in a way that preserves or enhances the
consumers and the societys well-being. Therefore, marketers must endeavour to satisfy
the needs and wants of their target markets in ways that preserve and enhance the well-
being of consumers and society as a whole. The orientation has an emphasis on social
responsibility and suggests that for a company to only focus on exchange relationship with
customers might not be suitable in order to sustain long term success. Rather, marketing
strategy should deliver value to customers in a way that maintains or improves both the
consumer's and the society's well-being.

Heres the definition of some of the important concepts from the study guide:

Exchange: The act of obtaining a desired object from someone by offering something
of value in return is called the exchange process.
Relationship marketing: This is a form of marketing that shifts focus away from sales
transactions to emphasize customer satisfaction.
Needs and wants: A need is a consumer's desire for a product's or service's
specific benefit, whether that be functional or emotional. A want is the desire for
products or services that are not necessary, but which consumers wish for.
Value: Value is a customer's perception of relative price (the cost to own and use)
and performance (quality) of a product.
Intermediaries: An intermediary is a third party that offers an intermediation service
between two trading parties
Strategic marketing management: The field of marketing strategy considers the
total marketing environment and its impacts on a company or product or service.
The emphasis is on "an in depth understanding of the market environment,
particularly the competitors and customers." A marketing strategy differs from a
marketing tactic in that a strategy looks at the longer term view of the products,
goods, or services being marketed.
Chapter 2:

Macro Environment
1. The major external and uncontrollable factors that influence an organization's decision
making, and affect its performance and strategies. These factors include the economic
factors; demographics; legal, political, and social conditions; technological changes;
and natural forces.
2. Specific examples of macro environment influences include competitors, changes
in interest rates, changes in cultural tastes, disastrous weather, or government regulations.

Micro environment - Factors or elements in an organization's immediate area

of operations that affect its performance and decision-making freedom. These factors
include competitors, customers, distribution channels, suppliers, and the general public.

Market environment- The collection of non-marketing influences that have an impact on

a marketing manager's success in forming and keeping favourable relationships with
desirable customers. The overall market environment for a business is made up of
the macro environment that consists of broader societal influences and
the microenvironment which includes company related influences.

SWOT Analysis
The SWOT analysis is a valuable step in your situational analysis. Assessing your firms
strengths, weaknesses, market opportunities, and threats through a SWOT analysis is a very
simple process that can offer powerful insight into the potential and critical issues affecting
a venture.

Strengths describe the positive attributes, tangible and intangible, internal to your
organization. They are within your control. What do you do well? What resources do you
have? What advantages do you have over your competition?
You may want to evaluate your strengths by area, such as marketing, finance,
manufacturing, and organizational structure. Strengths include the positive attributes of the
people involved in the business, including their knowledge, backgrounds, education,
credentials, contacts, reputations, or the skills they bring. Strengths also include tangible
assets such as available capital, equipment, credit, established customers, existing channels
of distribution, copyrighted materials, patents, information and processing systems, and
other valuable resources within the business.
Strengths capture the positive aspects internal to your business that add value or offer you a
competitive advantage.

Weaknesses are factors that are within your control that detract from your ability to obtain
or maintain a competitive edge. Which areas might you improve?
Weaknesses might include lack of expertise, limited resources, lack of access to skills or
technology, inferior service offerings, or the poor location of your business. These are
factors that are under your control, but for a variety of reasons, are in need of improvement
to effectively accomplish your marketing objectives.
Weaknesses capture the negative aspects internal to your business that detract from the
value you offer, or place you at a competitive disadvantage. These are areas you need to
enhance in order to compete with your best competitor. The more accurately you identify
your weaknesses, the more valuable the SWOT will be for your assessment.

Opportunities assess the external attractive factors that represent the reason for your
business to exist and prosper. These are external to your business. What opportunities exist
in your market, or in the environment, from which you hope to benefit?
These opportunities reflect the potential you can realize through implementing your
marketing strategies. Opportunities may be the result of market growth, lifestyle changes,
resolution of problems associated with current situations, positive market perceptions
about your business, or the ability to offer greater value that will create a demand for your
services. If it is relevant, place timeframes around the opportunities. Does it represent an
ongoing opportunity, or is it a window of opportunity? How critical is your timing?
Opportunities are external to your business. If you have identified opportunities that are
internal to the organization and within your control, you will want to classify them as

What factors are potential threats to your business? Threats include factors beyond your
control that could place your marketing strategy, or the business itself, at risk. These are
also external you have no control over them, but you may benefit by having contingency
plans to address them if they should occur.
A threat is a challenge created by an unfavorable trend or development that may lead to
deteriorating revenues or profits. Competition existing or potential is always a threat.
Other threats may include intolerable price increases by suppliers, governmental regulation,
economic downturns, devastating media or press coverage, a shift in consumer behavior
that reduces your sales, or the introduction of a leap-frog technology that may make your
products, equipment, or services obsolete. What situations might threaten your marketing
efforts? Get your worst fears on the table. Part of this list may be speculative in nature, and
still add value to your SWOT analysis.
Chapter 3

Consumer Behaviour
This is a brief introduction on what consumer behaviour is:
The study of consumers helps firms and organizations improve their marketing strategies by
understanding issues such as how
The psychology of how consumers think, feel, reason, and select between different
alternatives (e.g., brands, products, and retailers);
The psychology of how the consumer is influenced by his or her environment (e.g.,
culture, family, signs, media);
The behaviour of consumers while shopping or making other marketing decisions;
Limitations in consumer knowledge or information processing abilities influence
decisions and marketing outcome;
How consumer motivation and decision strategies differ between products that
differ in their level of importance or interest that they entail for the consumer; and
How marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.
One "official" definition of consumer behaviour is "The study of individuals, groups, or
organizations and the processes they use to select, secure, use, and dispose of products,
services, experiences, or ideas to satisfy needs and the impacts that these processes have
on the consumer and society." Although it is not necessary to memorize this definition, it
brings up some useful points:
Behaviour occurs either for the individual, or in the context of a group (e.g., friends
influence what kinds of clothes a person wears) or an organization (people on the
job make decisions as to which products the firm should use).
Consumer behaviour involves the use and disposal of products as well as the study of
how they are purchased. Product use is often of great interest to the marketer,
because this may influence how a product is best positioned or how we can
encourage increased consumption. Since many environmental problems result from
product disposal (e.g., motor oil being sent into sewage systems to save the recycling
fee, or garbage piling up at landfills) this is also an area of interest.
Consumer behaviour involves services and ideas as well as tangible products.
The impact of consumer behaviour on society is also of relevance. For example,
aggressive marketing of high fat foods, or aggressive marketing of easy credit, may
have serious repercussions for the national health and economy.
Phases in the consumer decision making process:
A consumer goes through several stages before purchasing a product or service.





1. Step 1 - Need is the most important factor which leads to buying of products and
services. Need in fact, is the catalyst which triggers the buying decision of individuals.
An individual who buys cold drink or a bottle of mineral water identifies his/her need as
thirst. However in such cases steps such as information search and evaluation of
alternatives are generally missing. These two steps are important when an individual
purchases expensive products/services such as laptop, cars, mobile phones and so on.
1. Step 2 - When an individual recognizes his need for a particular product/service he
tries to gather as much information as he can.
An individual can acquire information through any of the following sources:
Personal Sources - He might discuss his need with his friends, family members, co-
workers and other acquaintances.
Commercial sources - Advertisements, sales people (in Tims case it was the store
manager), Packaging of a particular product in many cases prompt individuals to buy
the same, Displays (Props, Mannequins etc)
Public sources - Newspaper, Radio, Magazine
Experiential sources - Individuals own experience, prior handling of a particular
product (Tim would definitely purchase a Dell laptop again if he had already used
3. Step 3 - The next step is to evaluate the various alternatives available in the market.
An individual after gathering relevant information tries to choose the best option
available as per his need, taste and pocket.
4. Step 4 - After going through all the above stages, customer finally purchases the
5. Step 5 - The purchase of the product is followed by post purchase evaluation. Post
purchase evaluation refers to a customers analysis whether the product was useful
to him or not, whether the product fulfilled his need or not?
Steps in the marketing research process
Step 1. Define the Objective & Your Problem
Perhaps the most important step in the market research process is defining the goals of the
project. At the core of this is understanding the root question that needs to be informed by
market research. There is typically a key business problem (or opportunity) that needs to be
acted upon, but there is a lack of information to make that decision comfortably; the job of
a market researcher is to inform that decision with solid data. Examples of business
problems might be How should we price this new widget? or Which features should we
By understanding the business problem clearly, youll be able to keep your research focused
and effective.
Step 2. Determine Youre Research Design

Now that you know your research object, it is time to plan out the type of research that will
best obtain the necessary data. Think of the research design as your detailed plan of
attack. In this step you will first determine your market research method (will it be a survey,
focus group, etc.?). You will also think through specifics about how you will identify and
choose your sample (who are we going after? Where will we find them? How will we
incentivize them?, etc.). This is also the time to plan where you will conduct your research
(telephone, in-person, mail, internet, etc.). Once again, remember to keep the end goal in
mindwhat will your final report look like? Based on that, youll be able to identify the types
of data analysis youll be conducting (simple summaries, advanced regression analysis, etc.),
which dictates the structure of questions youll be asking.
Your choice of research instrument will be based on the nature of the data you are trying to
collect. There are three classifications to consider:
Step 3. Design & Prepare Your Research Instrument

In this step of the market research process, its time to design your research tool. If a survey
is the most appropriate tool (as determined in step 2), youll begin by writing your questions
and designing your questionnaire. If a focus group is your instrument of choice, youll start
preparing questions and materials for the moderator. You get the idea. This is the part of
the process where you start executing your plan.
By the way, step 3.5 should be to test your survey instrument with a small group prior to
broad deployment. Take your sample data and get it into a spreadsheet; are there any
issues with the data structure? This will allow you to catch potential problems early, and
there are always problems.
Step 4. Collect Your Data

This is the meat and potatoes of your project; the time when you are administering your
survey, running your focus groups, conducting your interviews, implementing your field test,
etc. The answers, choices, and observations are all being collected and recorded, usually in
spreadsheet form. Each nugget of information is precious and will be part of the masterful
conclusions you will soon draw.

Step 5. Analyse Your Data

Step 4 (data collection) has drawn to a close and you have heaps of raw data sitting in your
lap. If its on scraps of paper, youll probably need to get it in spreadsheet form for further
analysis. If its already in spreadsheet form, its time to make sure youve got it structured
properly. Once thats all done, the fun begins. Run summaries with the tools provided in
your software package - build tables and graphs, segment your results by groups that make
sense (i.e. age, gender, etc.), and look for the major trends in your data. Start to formulate
the story you will tell.

Step 6. Visualize Your Data and Communicate Results

Youve spent hours pouring through your raw data, building useful summary tables, charts
and graphs. Now is the time to compile the most meaningful take-away into a digestible
report or presentation. A great way to present the data is to start with the research
objectives and business problem that were identified in step 1. Restate those business
questions, and then present your recommendations based on the data, to address those
When it comes time to presenting your results, remember to present insights, answers and
recommendations, not just charts and tables
Chapter 5
Market Segmentation: The process of splitting customers, or potential customers, in a
market into different groups, or segments, within which customers share a similar level of
interest in the same or comparable sets of needs satisfied by a distinct marketing
proposition. another explanation of market
segmentation is: The process of defining and subdividing a large homogenous market into
clearly identifiable segments having similar needs, wants, or demand characteristics. Its
objective is to design a marketing mix that precisely matches the expectations of customers
in the targeted segment. Few companies are big enough to supply the needs of an entire
market; most must breakdown the total demand into segments and choose those that the
company is best equipped to handle. Read more:
Benefits of market segmentation implementing segmentation has many benefits to a
company. After segmenting the market, a customer needs and wants can be identified more
effectively, communication with these customers improves, opportunities for growth and
innovation are created and profits and market share increase.
1. Better Satisfy Customer Needs and Wants
2. Better Communication
3. Opportunity for growth
4. Increased Innovation
5. Higher Profits/Market Share

Disadvantages of market segmentation? It is very expensive? Its much cheaper to develop

one product for one segment than multiple products for multiple segments? Only limited
market coverage - since the communication and other marketing efforts will only be
targeted at the chosen target market? excessive differentiation of the product - this may
eventually lead to cannibalization of the product, when the new product takes sales away
from the existing product Prerequisites of market segmentation An effective segment needs
to defined, measurable, accessible, actionable and suitable for the firm. These elements
mean that a firm - has a clearly defined, distinguishable and profitable segment - has the
resources to cater for its segments and - is able to access its segment, so that it can profit
from a segment with growing product sales. If any of these elements is missing it will hinder
the success of the firm and lead to wasted effort. the
criteria for marketing an ideal market segment meets all of the following criteria? It is
possible to measure. ? It must be large enough to earn profit. ? It must be stable enough
that it does not vanish after some time. ? It is possible to reach potential customers via the
organization's promotion and distribution channel. ? It is internally homogeneous (potential
customers in the same segment prefer the same product qualities). ? It is externally
heterogeneous, that is, potential customers from different segments have different quality
preferences. ? It responds consistently to a given market stimutarlus. ? It can be reached by
market intervention in a cost-effective manner. ? It is useful in deciding on the marketing
mix. Definition of target market the consumers a company wants to sell its products and
services to, and to whom it directs its marketing efforts. Identifying the target market is an
essential step in the development of a marketing plan. A target market can be separated
from the market as a whole by geography, buying power and demographics, as well as by
psychographics. Not all products and services are meant for all types of consumers. In fact,
companies may tweak certain aspects of a product, such as the amount of sugar in a soft
drink, so that it is more likely to be purchased by consumers with varying tastes. Creating
the target market may require the use of limited product roll-outs and focus groups,
allowing product managers to get a feel for which aspects of the product are the strongest. Bases for market segmentation (See attachment)
Chapter 6
Product: A good or service that most closely meets the requirements of a
particular market and yields enough profit to justify its continued existence. As long as cars
are manufactured, companies that produce tires fill the market need and continue to
be profitable.

Product Classification

Product classifications help marketers focus their efforts using consumers buying behavior.
Your business can use these buying habits to design your marketing efforts for a clearly
defined target audience.

Tangible Physical Characteristics:

Product can be classified into three group, according to their durability or tangibility as
shown below:

a. Non-durable goods: Non-durable goods are tangible goods that are normally consumed
in one or few uses. Examples are Beer, Toothpaste, Sugar, Soap and Salt. These goods are
consumed fast and purchased frequently by the consumers. Many fast foods fall into this

b. Durable Goods: These are tangible goods that normally survive many uses. Goods that
fall under this category include, Furniture, Refrigerator, Clothing, Rug etc. They are not
frequently purchased as non-durable goods because they are used up slowly.

c. Services: These are activities, benefits or satisfaction that are offered for sale.

Examples are Haircuts, Repairs, Banking Services and Dry cleaning. Services are intangible.
They are usually produced and consumed in the same time frame unlike durable goods or
non-durable goods that can be produced and shelved. The producer of goods may be far
away from consumers, but service providers often work in the presence of the customers.

Consumer Products:

Convenience Goods

Those products your customers buy often and without much thought or planning are
classified as convenience goods. Soap, condiments and toothpaste are common examples of
convenience goods. Consumers typically make a choice once on their brand preference for
these products and repeat that choice over many purchases. Making your convenience
goods available for impulse or emergency purchases can be particularly effective. Youll see
this marketing tactic in the placement of candy near the cash register of your grocery store
for impulse buys. Another version is to place umbrellas, boots or snow shovels near a store
exit when sudden weather changes call for them.

Shopping Goods

Buying decisions are detailed considerations of price, quality and value for products
classified as shopping goods. Think about the amount of time you put into picking out a
clothing purchase, a car or appliances. Successful marketing of your shopping goods can
come from positioning as a better buy than your competitors -- for example, presenting
better value with higher quality for the price or vice versa. Products in the shopping goods
classification tend to rely on heavy advertising and even trained salespeople to influence
consumer choices.

Specialty Products

Goods in the specialty products classification tend to promote very strong brand identities,
often resulting in strong brand loyalty among consumers. Examples include stereos,
computers, cameras and the most high-end brands of cars and clothing. While used cars are
classified as shopping goods, a brand-new Mercedes is classified as a specialty good. Buyers
for your specialty goods generally spend more time seeking the product they want than on
comparing brands or products to make a value decision. Your marketing of specialty goods
can be successful by promoting what you have on hand and where your costumers can find

Unsought Goods

The products classified as unsought goods are those that your consumers dont put much
thought into and generally dont have compelling impulse to buy. Examples include
batteries or life insurance. Your consumers essentially buy unsought goods when they have
to, almost as an inconvenience rather than the newest, latest, greatest product they cant
wait to purchase. Marketing your unsought goods will likely be most effective with lots of
advertising and salespeople promoting the idea of unresolved need for your unsought

Industrial Products:

This classification is based on relationship of the goods to the organisations production

process and cost structure. Industrial goods are intermediate goods and can be classified
into three categories below:

FOUNDATION GOODS: These are manufacturing machines upon which production is

dependent. They are not used up in the production process but over a course of years
during which a part is charge off as depreciation. Foundation goods are long-term
There are two types of foundation goods: installation and accessory equipment.

Installations: These are long - lasting products that are not bought very often. These
consist of buildings and fixed equipment.

Accessory equipment: These comprise of portable factory equipment and tools.

These equipment do not become part of the finished product. They simply help in
the production process.

ENTERING GOODS: These refer to ingredients or components of product.

These are the parts that go into the product itself. Entering goods can also be categorised
into two main sub-groups: raw material and fabricating materials.

Raw materials: These are goods that have been produced only enough to make
handling convenient and safe. They enter the manufacturing process basically in
their natural state.

Fabricating materials: These undergo some degree of initial processing before they
enter the product manufacturing process.

FACILITATING GOODS: These are operating supplies that are used up in the operation of the
firm but do not become part of the product. They are usually budgeted as expenses and
have short life. The purpose of such goods is to keep the foundation goods functioning
properly and to help in the handling and supply of the entering goods. Examples are
lubricating oil; saw blades, cider forms and labels.

Product line decisions

A group of products that are closely related because they function in a similar manner are
sold to the same customer groups, are marked through the same types of outlets, or fall
within given price range.

For example: Nike products several lines of athletic shoes, Motorola products several lines
of telecommunications products and AT&T offers several lines of long distance
telephone services.

A major product line decision involves product line length.

The number of items in the product line.

The line is too short if the manager can increase profits by adding items.
The line is too long if the manager can increase profits by dropping items.

A brand can be defined as a "name, term, sign, symbol or design, or a combination of them
intended to identify the goods and services of one seller or group of sellers and to
differentiate them from those of other sellers.

Therefore it makes sense to understand that branding is not about getting your target
market to choose you over the competition, but it is about getting your prospects to see you
as the only one that provides a solution to their problem.

The objectives that a good brand will achieve include:

Delivers the message clearly

Confirms your credibility
Connects your target prospects emotionally
Motivates the buyer
Concretes User Loyalty

To succeed in branding you must understand the needs and wants of your customers and
prospects. You do this by integrating your brand strategies through your company at every
point of public contact.

Your brand resides within the hearts and minds of customers, clients, and prospects. It is the
sum total of their experiences and perceptions, some of which you can influence, and some
that you cannot.

A strong brand is invaluable as the battle for customers intensifies day by day. It's important
to spend time investing in researching, defining, and building your brand. After all your
brand is the source of a promise to your consumer. It's a foundational piece in your
marketing communication and one you do not want to be without.

A brand is a product, service, or concept that is publicly distinguished from other

products, services, or concepts so that it can be easily communicated and usually
A brand name is the name of the distinctive product, service, or concept.
A brand mark is the aspect or element (such as colour, design, picture, symbol, and
typeface) of a brand that cannot be expressed in words.
A trademark is a symbol, word, or words legally registered or established by use as
representing a company or product.
A copyright is the exclusive and assignable legal right, given to the originator for a
fixed number of years, to print, publish, perform, film, or record literary, artistic, or
musical material.

Manufacturer brand: Common practice where a manufacturer markets a good or family of
goods under its own brand name(s). The objective is to attract and retain satisfied-
customers whose loyalty may be transferred to the manufacturers other products. For
example, many successful clothing designers, operating on this principle, have licensed their
manufacturer's brand name outside the clothing category to include cosmetics,
perfumes,and even jewelry.

Generic brand: A type of consumer product that lacks a widely recognized name or logo
because it typically isn't advertised. Generic brands are usually less expensive than brand-
name products due to the lack of promotions, which can inflate the cost of a good or
service. Generic brands are designed to be substitutes for more expensive brand-name
goods. Generic brands are known for their trimmed-down packaging, and often plain labels.
For example, a supermarket may offer its own generic product next to a name-brand
product in the hope that a cost-conscious customer will select the cheaper substitute.

Family brand: It involves using one brand name to market multiple products. For example, a
company may use one brand to market soap, lotion, hair shampoo, and nail polish. This
differs from branding individual products, which involves giving each product its own name
and image. For example, a company may sell lipstick and nail polish, giving each product line
a separate marketing identity.


With the increased importance placed on self-service marketing, the role of packaging is
becoming quite significant. For example, in a typical supermarket a shopper passes about
600 items per minute, or one item every tenth of a second. Thus, the only way to get some
consumers to notice the product is through displays, shelf hangers, tear-off coupon blocks,
other point-of-purchase devices, and, last but not least, effective packages. Considering the
importance placed on the package, it is not surprising that a great deal of research is spent
on motivational research, color testing, psychological manipulation, and so forth, in order to
ascertain how the majority of consumers will react to a new package. Based on the results
of this research, past experience, and the current and anticipated decisions of competitors,
the marketer will initially determine the primary role of the package relative to the product.

Types of packaging:

Family packaging: This means that products in the same brand have a similar type of visual
packaging. This helps consumers recognize the products on the shelf, and also helps them to
quickly assign characteristics to each product based on previous experience of the brand.
Elements of the family packaging, such as color and pattern, are generally carefully chosen
by packaging designers to make the products as appealing as possible to potential

Special packaging: Packaging that has been made for specific use of a particular item.

Reusable packaging: Packaging that can be used more than once.

Multiple packaging: Multiple packaging is one of the best, quickest and easiest ways to
increase volume sales for your product. When consumers buy in multiples in convenient
paperboard carriers, they will consume more product, faster, at home and return to
replenish it sooner. Bottom line, your sales and profitability increase

Kaleidoscopic packaging: This is when packaging continually changes to reflect a series/

particular theme. An example World Cup soccer or rugby pictures on cold drink cans.

Types of new products:

1. New-to-the-world: This category is for those products that have just been invented. No
one knows how they work. So knowledge about what they do and how they are used must
be imparted to potential customers. And once they start getting buyers, they give birth to
new markets and thus companies producing them get to enjoy the first mover advantage.

2. New-to-the-marketer: Sometimes companies wish to produce products that are new to

them, but old to the customers. The markets already exist and the companies through the
products just need to enter into them.

3. Line extensions: It is very common for big companies often embark on creating products
to add to the existing product lines. There are many reasons behind this. But the ultimate
one is profit.

4. Improved products: Companies wishing to offer the best to customers often restudy their
products so every bit of them gives the best service. Such products are categorized as
improved and revised. It is usually seen this category is used by companies specializing in
electronic and makeup products.
5. Repositioned products: Many existing products often end up being valuable for other
usage. When companies realize it they reintroduce them to the customers by emphasizing
this other usage. This is basically known as repositioning.

Factors influencing the adoption process

Differences in peoples readiness to try a new product

Categorisation of individuals:

Innovators: venturesome - very eager to try new ideas

Early adopters: opinion leader, respect from their peers, person to check with
before purchasing
Early majority: Deliberate - adopt ideas later than average time
Late majority: Sceptical, purchase because of economical necessity
Laggards: traditional, last person to adopt an innovation
Chapter 7

Defining Pricing:

Pricing is the process of determining what a company will receive in exchange for its

Market Price is the economic price for which a good or service is offered in
the marketplace.
Target Price is the price at which a seller projects that a buyer will buy a product.
Selling Price is the market value, or agreed exchange value, that will purchase a
definite quantity, weight, or other measure of a good or service.

Price Setting Process

As an entrepreneur, setting a pricing strategy and policy for your products/services for the
first time when you develop it or when you introduce your product / service into a new
geographical area, can be a big head ache. Reason being, that price is not just a tag on the
product or service, it communicates to your customers your businesss intended value
positioning and also determines your profitability.
Chapter 8
Marketing Communications Mix


A paid form of non-personal presentation and promotion of ideas, goods or services by an

identified sponsor.

Sales Promotion:

A variety of short-term incentives to encourage trial or purchase of a product or service.


Public Relations:

A variety of programs designed to promote and/or protect an organizations image or its

individual products.

Personal Selling:

Face-to-face interaction with prospective purchasers for the purpose of making

presentations, answering questions and procuring orders.

Direct Marketing:

Use of mail, telephone, email and other non-personal contact tools to communicate directly
with or solicit a direct response from specific customers and prospects.


The deliberate attempt to manage the public's perception of a subject. The subjects of
publicity include people (for example, politicians and performing artists), goods and
services, organizations of all kinds, and works of art or entertainment.
Chapter 9
Channel Design
1. Intensive Distribution: the producer's products are stocked in the majority of
outlets. This strategy is common for basic supplies, snack foods, magazines and soft
drink beverages.
2. Selective Distribution: means that the producer relies on a few intermediaries to
carry their product. This strategy is commonly observed for more specialised goods
that are carried through specialist dealers, for example, brands of craft tools, or large
3. Exclusive Distribution: means that the producer selects only very few
intermediaries. Exclusive distribution is often characterised by exclusive dealing
where the reseller carries only that producer's products to the exclusion of all
others. This strategy is typical of luxury goods retailers such as Gucci.

Channel Management Conflict

1. Vertical Channel Conflict: Vertical channel conflict arises when manufacturer tries
to sell on their own while still maintaining working relationships with third-party retailers
and distributors. This leads to competition for sales where retailers and distributors often
get lower profits for selling the same product or service as the manufacturer is selling. Since
it is primarily the retailers and distributors role to build awareness of the product, this can
lead to an overall decrease in sales. This situation is called a vertical channel conflict
because it affects two different levels of business, third-party sales and bottom-line sales.

2. Horizontal Channel Conflict: In this type of channel conflict, a manufacturer not

using third-party retailers faces a struggle between two of its own sales divisions, such as its
online and offline departments. Usually one division starts to cut into the sales and profit of
the other division, devaluing the latter. Horizontal channel conflicts occur between two
departments on the same level of importance

3. Multi-Channel Conflict: Multilevel channel conflicts arise when a manufacturer

creates competition between its own sales and promotion arms, while also having business
relationships with third-party retailers and distributors. The reason for this approach may be
to aggressively and more quickly expand its sales and promotion network, but it can create
both internal and external discord between the various divisions and third-parties.
Advantages of Franchising
Advantages from the Franchisors point of view:
1. Financial: Franchising creates another source of income for the franchisor, through
payment of franchise fees, royalty & levies in addition to the possibility of sourcing
private label products to franchisees. This capital injection provides an improved
cash flow, a higher return on investment and higher profits. Other financial benefits
that the franchisor enjoys are reduced operating, distribution and advertising costs.
Of course that also means more allocated funds for research and development.
Additionally, there will always be economies of scale with regard to purchasing
2. Operational: The franchisor can have a smaller central organization when compared
to developing and owning locations themselves. Franchising also means uniformity
of procedures, which reflects on consistency, enhanced productivity levels and
better quality. Effective quality control is another advantage of the franchise system.
The franchisee is usually self-motivated since he has invested much time and money
in the business, which means working hard to bring in better organizational and
monetary results. This also reflects on more satisfied customers and improved sales
3. Strategic: To the franchisor, franchising means the spreading of risks by multiplying
the number of locations through other peoples investment. That means faster
network expansion and a better opportunity to focus on changing market needs,
which in its turn means reduced effect from competitors.
4. Administrative: With a smaller central organization, the business maintains a more
cost effective labour force, reduction of key staff turnover and more effective

B. Advantages from a Franchisees point of view:

1. Avoiding the unnecessary trial and error period in starting and operating a new
2. Lower financial risk, compared to other ventures, because investment costs are
lower and profit margins are higher.
3. Business Format Franchising complete packages ensure a ready to go turn-key
franchised unit.
4. Managing a small business whilst depending on the power of the franchisor
company which has a bigger organization.
5. The franchisee has an opportunity to run a proven business concept with a
successful operational track record.
6. The opportunity to learn the latest developments and changes in the local and global
market from the franchisor and focus entirely on developing the sales revenues.
7. The benefit of operating under a recognized trade name/trademark, which can have
better marketing results.
8. The franchisee has access to accumulated business experience and technical know-
how in managing the business.
9. A unified store design which leverages the business reputation in marketing the
10. Easier purchasing, storing, and product display systems.