CONSTRUCTION MARKETING WORK

GROUP ONE
Introduction

According to the American Marketing Association (AMA), 2013, marketing is the activity, set of
institutions, and processes for creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large.

The term market is an economic mechanism that governs the relation of supply and demand. So
marketing can be seen as the recognitions and use of the economic forces and other forces that
exist within the market to create business, marketing identifies economic needs, creates the
products to satisfies hose needs and bringing the two together it fulfills its primary objective of
creating business (Pearce, 1992).

Further definitions in this book state that; marketing is the recognition and use of the economic
and other forces that exist within the market to create business. The chartered institute of marketing
has also adopted the following succinct definition: that marketing is the management process
responsible for identifying, anticipating and satisfying customer requirements profitably.

Builders and developers

Construction developers can be just project owners or both the owner and contractor of a
development project. In either capacity, a developer has certain obligations that need to be spelled
out clearly in the contract documents. If this is done, the probability of a successful completion of
the project is enhanced. (Pearce, 1992).

Developers develop and builders build. That is, a developer takes raw land, obtains the necessary
permits, creates building lots, and puts in the sewers, the water and electric lines, the streets and
curbs. Then the builder comes in and erects the house.
A builder also can be a developer. In fact, many are. But building and developing are two distinct
and different tasks. In addition, nowadays, most of the larger housing companies buy "finished"
lots, or "pads," from someone else.

Ways to get people to remember your construction company

One of the constant responsibilities of the construction industry manager is soliciting new business.
Word of mouth can bring in a good amount of business, but you must augment your good
reputation with marketing methods that work. Selecting marketing that will give you a good return
on investment will help you to reduce your costs.

1. Take advantage of existing opportunities

When you are working on a house, ensure that you place a lawn sign out front and that you have
signage on your vehicles. This way, you are getting free advertising and neighbors may strike up

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a conversation that could lead to new work. You can also create stationary, fridge magnets or
stickers that will keep your company name and number handy for homeowners you have worked
with you should they need you in the future or if they wish to recommend you to a friend.

2. Consistent marketing
Traditional forms of marketing like flyers and ads in local newspapers may produce results. If you
are working in an area, distribute flyers to the neighbors while you are there. The flyers, lawn signs
and vehicle signage will give you more prominence.

3. Get recommendations
Nothing sells quite like a recommendation from a friend. You can ask your happy customers for
recommendations which you can use in your marketing efforts. You can also start a referral
discount system which will encourage them to talk to friends and family members while you are
busy on the build.

4. Branding
Branding is the way in which you present your company to the world. One of the most important
things to remember is that you must always present your brand in the same way. Ensure that you
maintain the same colors, logo and look on all of your advertising. This means that if your lawn
signs look different to flyers and to your van signage, customers may think they represent different
companies.

5. Effective methods
You must measure the efficacy of your marketing methods to see which ones you should continue
to pursue. You can do this online through analytics or set up a dedicated phone line to measure
business you get from newspaper ads and flyers. Online reputations Google yourself from time to
time to see what you can find about your company. Ensure that your contact details are easy to
find. If there are any disparaging remarks or reviews online, deal with them in a professional
manner. You can get a rundown of how to deal with these here.

6. Face time
At the end of the day, the best way to be memorable is to offer wonderful customer service. Ensure
that your employees are always friendly and respectful and spend some time with your customers,
be sure that you understand their needs, ask lots of questions and do a follow up call after the job
is done to ensure that they are satisfied.
Essential Business Tips for Building Professionals.

 Communication
This is the key to understanding what your client wants and avoiding callbacks or
misunderstandings. It’s also integral to getting your team to do the job properly while adhering to
the customer’s specifications. Take time prior to the start of a project, at set times during the project
and again once the job is done to communicate effectively with clients. If necessary, get things in
writing. Take time to gauge the progress that your team is making, inspect work and clearly lay

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out the expectations and the time constraints. Be precise in assigning tasks so that everyone
understands what they are responsible for and how to go about doing the jobs they have been given.
This goes for trades and vendors too. Keep the lines of communication open and share realistic
goals with clients and team members.

 Plan
Have a plan for every job, short term goals and long term goals. Try to plan for every possible
outcome and have contingency plans for when things go wrong. Plan for a downturn in the market
so that you have the financial backing to get you through tough times.

 Don’t Micro Manage

There is a fine line to walk here. You need to delegate tasks and responsibilities to your team
members, but delegate, don’t abdicate. Keep communication open and keep your eye on the ball
so that you can catch problems early on and gauge the performance of your team members. When
you delegate, you are able to focus on management and growing your business instead of getting
caught up in the minutia of the day. You can improve communication and the workflow by
implementing systems for everything from ordering, to on-site storage and documentation. If there
is a process to follow, your team members know what they are supposed to be doing and how to
do it. Make sure that you lead by example when following policies.

 Hire With Care

Take your time when hiring new team members. Ensure that you do your homework and pick the
right people. Of course it’s difficult to know if someone is right for the job, but be quick to reassign
them if they are in the wrong position or let them go if they aren’t working out. Keeping people
on your team who aren’t performing well will cost you a lot in the long run. When you have a team
you can rely on, allow them to run as much of the day-to-day as possible.

 It’s who you know

Foster relationships with everyone from architects to interior designers. This will mean you have
an extended team of trustworthy people who produce great work. Don’t be slow to cut ties with a
trades person or construction professional who is no longer delivering.

 Analytics
There are so many programs, apps and reports available to construction professionals. Even if you
are not the most tech savvy individual, you need to harness the latest technology to help manage
your job sites and get feedback on what’s happening in the market and how your team members
are performing. The more information you have, the more informed your decisions will be.

 Offer Great Customer Service

It is tough to always find the time to offer great customer service, but it’s essential. When your
customers are happy, they will be more patient when things go wrong and they are likely to
recommend you to friends and family members. Always keep your word, even when things go
awry that are not the customer’s fault. There is no substitute for great quality and excellent service.

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Importance of marketing can be studied as follows:

 Marketing Helps in Transfer, Exchange and Movement of Goods:

Marketing is very helpful in transfer, exchange and movement of goods. Goods and services are
made available to customers through various intermediaries’ viz., wholesalers etc. Marketing is
helpful to both producers and consumers.

 Marketing Is Helpful In Raising And Maintaining The Standard Of Living Of The

Community:
Marketing is above all the giving of a standard of living to the community. Paul Mazur states,
“Marketing is the delivery of standard of living”. Professor Malcolm McNair has further added
that “Marketing is the creation and delivery of standard of living to the society”.

 Marketing Creates Employment:

Marketing is complex mechanism involving many people in one form or the other. The major
marketing functions are buying, selling, financing, transport, warehousing, risk bearing and
standardisation, etc. In each such function different activities are performed by a large number of
individuals and bodies.

 Marketing as a Source of Income and Revenue:

The performance of marketing function is all important, because it is the only way through which
the concern could generate revenue or income and bring in profits. Buskirk has pointed out that,
“Any activity connected with obtaining income is a marketing action. It is all too easy for the
accountant, engineer, etc., to operate under the broad assumption that the Company will realise
many dollars in total sales volume.

 Marketing Acts as a Basis for Making Decisions:

A businessman is confronted with many problems in the form of what, how, when, how much and
for whom to produce? In the past problems was less on account of local markets. There was a
direct link between producer and consumer.
In modern times marketing has become a very complex and tedious task. Marketing has emerged
as new specialised activity along with production.

As a result, producers are depending largely on the mechanism of marketing, to decide what to
produce and sell. With the help of marketing techniques a producer can regulate his production
accordingly.

 Marketing Acts as a Source of New Ideas:

The concept of marketing is a dynamic concept. It has changed altogether with the passage of time.
Such changes have far reaching effects on production and distribution. With the rapid change in
tastes and preference of people, marketing has to come up with the same.
Marketing as an instrument of measurement, gives scope for understanding this new demand
pattern and thereby produce and make available the goods accordingly.

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  Marketing Is Helpful In Development Of An Economy:
Adam Smith has remarked that “nothing happens in our country until somebody sells something”.
Marketing is the kingpin that sets the economy revolving. The marketing organisation, more
scientifically organised, makes the economy strong and stable, the lesser the stress on the
marketing function, the weaker will be the economy.

MARKETING ENVIRONMENT
This is made up of the forces that directly and indirectly influence an organization’s capability to
undertake its business. It involves the trading forces operating in a market place over which a
business has no direct control ,but which shape the manner in which the business function and is
able to satisfy its customers (Coviello, 1997).

Why is it important to know the marketing environment?

An understanding of macro and micro marketing environment forces is essential for planning.
It helps a business to compete more effectively against its rivals
Assists in the identification of opportunities and threats.
Enables an organization to take advantage of emerging strategic opportunities.

Components of marketing environment

The marketing environment consists of; the internal, micro and macro environments

The internal environment

This environment includes the forces and actions inside the firm that affect the marketing
operation. It is composed of internal stake holders and the other functional areas within the
business organization.

All factors that are internal to the organization are known as the internal environment. They are
generally audited by applying the Five Ms which are; Men, Money, Machinery, Materials and
Markets. The internal environment is as important for managing change as the external a process
known as internal marketing.
The internal environment includes the following:

 The human resource department.

 The operations department.
 The accounting and finance department
 The research and development department.

Micro Environment

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The factors in the immediate neighbourhood of an organization environment. The forces close to
the company that affects its ability to serve. It comprises all those organizations and individuals
who directly affect the activities of a company. All factors which impact directly on a firm and its
activities in relation to a particular market including; Suppliers, the market channel, Customers,
Competitors and the Public

 Suppliers
Suppliers are either individuals or business houses. They provide resources needed by the company
to run business. The developments in the suppliers’ environment have a substantial impact on the
marketing operations of the company. Companies can lower their supply costs and increase
product quality to gain competitive advantage in the market. Supply shortages have to be fully
monitored and plans should be made to avoid it.

 Market Intermediates
They are either business houses or individuals. They help the company in promoting, selling and
distributing the goods to customers. They are middlemen, distributing agencies, market service
agencies and financial institutions.

 Customers
The target market of the company is usually of five types:
Consumer market i.e. individual and householders
Industrial market i.e. organizations buying for producing other and services.
Reseller market i.e. organizations buying goods and services with a view to sell them to others

Government and other non-profit markets .i.e. those buying goods and services in order to produce
public services.

International market i.e. individuals and organizations of nations other then home land who buy
for either consumption or industrial use.

 Competitors
No company stands alone in serving and satisfying the needs of a customer market. It faces
competition. This helps the company in facing a host of competitors with confidence. The
company in order to come out successfully has to adopt means which may help it to outmaneuver.
The competitive environment consists of certain basic things which every marketing manager has
to take note of. According to Philip Kotler, the best way for a company to grasp the full range of
its competition is to take viewpoint of a buyer.

 Public
Public is defined as ‘any group that has an actual or potential interest in or impact on a company’s
ability to achieve its objective. The actions of the company do affect the interest of other groups
i.e., those who form general public for the company who must be satisfied along with the

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consumers of the company. According to Kotler ‘companies must put their primary energy into
effectively managing their relationships with their customers.

Macro environment
This can also be known as the external environment
It involves broad forces which shape the character of an organizations opportunities and threats

This includes the factors that have influence on the firms marketing operations but the firm cannot
influence them.

Macro environment refers to those factors which are external to company’s activities and do not
concern the immediate environment. It comprises general forces that affect all business activities
in market.

Factors affecting macro environment

 Political and Legal forces

These include laws, government agencies and pressure groups that influence or limit various
organizations and individuals in a given society. There is increasing legislation, changing
government agency enforcement. More emphasis on ethics and socially responsible actions

 Economic environment
The economic environment consists of factors that affect consumer’s purchasing and spending
power. Under economic environment, managers generally should study; trends of gross national
product, patterns of real growth in income, variations in geographical income distribution,
borrowing pattern, trends and governmental and legal restrictions, and major economic variables

 Social and cultural forces

Social responsibility has crept into the marketing literature as an alternative to the market concept.
Socially responsible marketing is that business firms should take the lead in eliminating socially
harmful products

 Demographic forces
Demographic data helps in preparing geographical marketing plans, household marketing plans,
age and sex wise plans. It influences behavior of consumers which in turn will have direct impact
on market place. A marketer must communicate with consumers, anticipate problems, respond to
complaints and make sure that the firm operates properly.

 Technological Environment
This is the most dramatic force now shaping our destiny. It changes rapidly and creates new
markets and opportunities. Its Challenge is to make practical, affordable products. Safety
regulations on technology result in higher research costs and longer time between
conceptualization and introduction of product.

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  Natural Forces
They involve the natural resources that are needed as inputs by marketers or that are affected by
marketing activities. Natural environment trends include; Shortage of raw materials, limited
quantities of non-renewable resources, increased pollution, waste disposal, air/water pollutants,
increased government intervention and other initiatives. Environmentally sustainable strategies..
PEST Analysis A scan of the external macro environment in which the firm operates can be
expressed as a pest analysis. The acronym PEST (or sometimes rearranged as “STEP”) is used to
describe a framework for the analysis of these macro environmental factors.• A PEST Analysis
fits into an overall environmental scan, which includes Political, Economical, Social, and
Technological environment (Wang, 2006).

Purpose of analysing the market

 To know where the environment is heading

 To discern which events and trends are favorable
 To assess the scope of various opportunities
 To help secure the right fit between the environment and the business unit

GROUP TWO
MARKETING MIX AND SEVEN P’S
Concept of the marketing mix

Borden claims to be the first to have used the term “marketing mix” and that it was suggested to
him by Culliton’s (1948) description of a business executive as “mixer of ingredients”. However,
Borden did not formally define the marketing mix; to him it simply consisted of important elements
or ingredients that make up a marketing program. (Borden, 1984).

McCarthy (1964) refined this further and defined the marketing mix as a combination of all of the
factors at a marketing manager’s command to satisfy the target market.

Marketing mix is a set of controllable marketing tools that a firm uses to pursue its marketing
objectives in a target market (wikipedia, 2017)

According to Philip Kotler “Marketing Mix is the set of controllable variables that the firm can
use to influence the buyer’s response. The controllable variables in this context refer to the 7Ps.
Each firm strives to build up such a composition of 7Ps, which can create highest level of consumer
satisfaction and at the same time meet its organizational objectives. Thus, this mix is assembled
keeping in mind the needs of target customers, and it varies from one organization to another
depending upon its available resources and marketing objectives

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The marketing mix concept applies to the construction and design projects perfectly (identified by
marketing mix- 4Ps/7Ps: product, place, price, promotion, people, process, physical environment)
for which can distinguish two situations.
Marketing a project.

All the elements of the marketing mix influence each other. They make up the business plan for a
company and if handled carefully can give it great success. But handled negatively, can take the
business years to recover
Illustration of the Elements that make up the Marketing Mix

Figure 1: Elements that make up the Marketing Mix

The seven instruments of a professional services marketing mix.

“Every product we buy, every store we visit, every media message we receive and every choice
we make in our consumer society has been shaped by the forces of marketing”
As stated above, a marketing mix is a combination of variables that influence the success of a
marketing endeavor.
These variables are known as the seven P‟s of marketing. These marketing P‟s include;

 Product
 Price
 Promotion
 Place

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  People
 Process
 Physical evidence

1. People
All companies are reliant on the people who run them from groundwork executioners to the
managing director(s) and the construction industry is no different. Having the right people is
essential because they offer as much a part of the business as the final unit of the product/service
offered.
In the construction industry, we are able to consider all persons involved in the delivery of
construction and consultancy services as well as project development directly and indirectly. Much
as not all individuals get in touch with the customers, they all have a role to play in production,
marketing, distribution and delivery of the consumer units which all affect the satisfaction index
of the clients. Further consideration is made for people employed by the company to design,
develop and execute the construction of a project, do market research to determine demand
requirements and customer needs and preferences, managers of the construction section to ensure
timely transfer of the finished units as well as support services associated with the touch points of
the clients and this can be broken down as follows:

 People who work on the projects;

This ranges from the Management team to the workers on the ground at the sites. People employed
should have the relevant technical skills for the project at hand in order to execute the highest
quality of work for the clients. Further utilization of such personnel in advertising and sales
pitching guarantees more satisfaction and better feedback.

 People who convey the projects to the clients;

Here we look at the managers and other support staff responsible for presentation of the finished
projects or company portfolio(s) to prospective clients. In marketing construction, the aim is to
create a lasting positive impression and easily attract prospective clients. When this feature is well
executed, the vivid positive image serves to secure repeat clients and reduces hesitations to make
recommendation of such a construction company.

 People who talk to the clients;

Regardless of the size of the company, interaction with the clients is unavoidable necessitating
competent personnel to be in place manning all such customer touch points. Clients tend to have
questions, concerns and/or complaints which all have to be addressed ideally. Owing to the
technical and complex nature of construction on top of client desire to have work executed to their
exact specifications, personnel to relay such information should provide a proper blend of
professional and personal delivery to communicate the company message across to the client in a
receivable manner. This necessitates an important training role by the Human Resource department
to ensure that the team can do this job well.

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Overall customer experience is final area of impact with the clients. For the purpose of marketing,
the entire experience gone through when executing a project leaves an impression that can either
strengthen or weaken loyalty ties to a particular company as well as influencing the client‟s
decision on whether or not to recommend the company to other prospective clients.
The best experience received thus is key in gaining and maintaining clients to a company.

2. Price
The price is the amount a customer pays for the product hence a product is only worth what
customers are prepared to pay for it. The price also needs to be competitive, but this does not
necessarily mean the cheapest; the small business may be able to compete with larger rivals by
adding extra services or details that will offer customers better value for money.

According to A. Ramaraju (2014), the price is very important as it determines the company's profit
and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and
depending on the price elasticity of the product, often it will affect the demand and sales as well.
The marketer should set a price that complements the other elements of the marketing mix.

When setting a price, the marketer must be aware of the customer perceived value for the product.
Three basic pricing strategies are:

 Market skimming pricing

 Market penetration pricing
 Neutral pricing.
The 'reference value' (where the consumer refers to the prices of competing products).

The 'differential value' (the consumer's view of this product's attributes versus the attributes of
other products) must be taken into account.
Price/offer is the only element of the marketing that generates revenue; everything else represents
a cost. Thinking of price as a cost to the customer helps to underscore why it is so important.

Price positions the company in the market place; the more you charge, the more value or quality
your customers will expect for their money.

Existing customers are generally less sensitive about price than new customers; a good reason for
looking after them all.

If a company decides in favor of higher price added-value approach, it is important to remember

that price „positions‟ a business/company in the marketplace. This means it gives an indication to
potential and existing customers of where to place the company in relation to its customers.
Expectations will generally be higher; customers will assume higher quality product or service.

Everything about a company‟s dealings with customers must live up to the expectation s of this
positioning. Anything that can be seen by the customer must be consistent with these higher quality
expectations.

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In the construction industry, agreeing the price for a piece of work/facility/service seals the
relationship between contractor and client. It is the central feature and reflects the value placed on
the relationship. Working to contract in construction means production only occurs after contract
is secured. Each „product‟ is client and project specific hence unique. Production and assembly
techniques are generic rather than standard in a flow-line systems‟ sense, reducing opportunities
for knowledge transfer between projects, and for accurate comparative pricing (Cassimatis, 1969).
Any historical cost data are only pricing indicators so far as pricing is concerned and forecasts are
inherently unreliable, scarce and time-lagged between data collection and availability (Bowen
1994; Raftery 1991). Price related to the construction industry, is based on the total value of
resources needed to complete the project.
Price is therefore based on the combination of:

 What the market expects.

 What the client can afford.
 The nature of competition in the sector.
 What the contractor can afford to work for.
 Any specific factors concerning the particular job e.g. location material used
 What is being agreed and paid for.

3. Place
This refers to providing the product at a place which is convenient for consumers to access.
Placement or distribution is a very important part of the product mix definition. You have to
position and distribute the product in a place that is accessible to potential buyers. The product has
to reach the ultimate buyer so the company works with its intermediaries to bring their product to
the market.

This comes with a deep understanding of your target market. Understand them inside out and you
will discover the most efficient positioning and distribution channels that directly speak with your
market. In the housing and the construction industry, construction cannot be transferred but here
intermediaries transfer information of distinct places about the availability of accommodation so
that those not having any idea about these constructions get to know about it.

In this industry, distribution is done through real estate agents, who act as connecting tool between
the consumer and the provider.
There are many distribution strategies, including

 Intensive distribution
 Exclusive distribution
 Selective distribution
 Franchising

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 4. Promotion
Promotion can be defined as a method for which the consumer is made aware of the goods and
services offered. In regard to construction they can be homes you build and other construction
sites.

Promotion can also be refers to the process of informing and persuading the consumers to buy
certain product. By using this process, the marketers convey persuasive message and information
to its potential customers. The main objective of promotion is to seek buyers‟ attention towards
the product with a view to:
Arouse his interest in the product;
Inform him about its availability; and
Inform him as to how is it different from others.

It is thus a persuasive communication and also serves as a reminder. A firm uses different tools for
its promotional activities which are as follows:

 Advertising
 Publicity
 Personal selling
 Sales promotion
These are also termed as four elements of a promotion mix. Let us have a brief idea about these
promotion tools.

1. Advertising:
Advertising is the most commonly used tool for informing the present and prospective consumers
about the product, its quality, features, availability, etc. It is a paid form of non-personal
communication through different media about a product, idea, a service or an organization by an
identified sponsor. It can be done through print media like newspaper, magazines, billboards,
electronic media like radio, television, etc. It is a very flexible and comparatively low cost tool of
promotion.

2. Publicity:
This is a non-paid process of generating wide range of communication to contribute a favorable
attitude towards the product and the organization. You may have seen articles in newspapers about
an organization, its products and policies. The other tools of publicity are press conference,
publication and news in the electronic media etc. It is published or broadcasted without charging
any money from the firm. Marketers often spend a lot of time and effort in getting news items
placed in the media for creation of a favorable image of the company and its products.

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 3. Personal selling:
You must have come across representatives of different companies knocking at your door and
persuading you to buy their product. It is a direct presentation of the product to the consumers or
prospective buyers. It refers to the use of salespersons to persuade the buyers to act favorably and
buy the product. It is most effective promotional tool in case of industrial goods.

4. Sales promotion:
This refers to short-term and temporary incentives to purchase or induce trials of new goods. The
tool includes contests, games, gifts, trade shows, discounts, etc. Sales promotional activities are
often carried out at retail.
Therefore, promotion can be defined as a method for which the consumer is made aware of the
goods and services offered in regard to construction they can be homes you build and other
construction sites.

In regard with construction, promotion starts with launching calls for proposals with detailed
information about technical specifications and later the rendering process. To market your
construction, or design-built successfully, a builder needs to think of the product from the
consumer's perspective which brings us to promotion.
Promotion can be done in a number of ways for example:

 Sponsorship. Like sports function, TV shows

 Special promotions for example when you rent with us you're guaranteed security or if your
buy a house, you're given free transportation for movement into the bought house.
 Use of promotional products such as calendars, pens, tape measures with the company's
name, logo and contacts
 Branding equipment for example vehicles, machinery and plant. 0. Charitable initiatives
for example the company may give back to the community through building drainages,
providing latrines.
 Media, the company can publicize through newspapers, television or radios about the
services they render.
 In conclusion since a service or commodity offered can be replicated, promotion becomes
crucial in differentiating a service or commodity in the mind of a consumer, but to achieve
this quality must be maintained.

5. Product
In marketing product refers to the totality of the offering. Product refers to the goods and services
offered by the organization. These are purchased because they satisfy one or more needs (Willion
J. Stanton).

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“Product is a set of tangible and intangible attributes including packaging, color, price,
manufacture’s prestige, retailer’s prestige and manufacturer’s and retailer’s services which buyer
may accept as offering satisfaction of wants and services.”
Product classification
Product can be broadly classified on the basis of:

 Use
 Durability
 Tangibility

1. Based on use: the product can be classified as

Consumer Goods; and Industrial Goods
a) Consumer goods:

Goods meant for personal consumption by the households or ultimate consumers are called
consumer goods. This includes items like toiletries, groceries, clothes etc. Based on consumers‟
buying behavior the consumer goods can be further classified as:

 Convenience Goods
 Shopping Goods
 Specialty Goods
 Industrial Goods
Convenience Goods; these are goods bought frequently without planning or shopping effort and
are consumed quickly. Buying decision in case of these goods does not involve much preplanning.
Such goods are usually sold at convenient retail outlets.

Shopping Goods: These are goods which are purchased less frequently and are used very slowly
like clothes, shoes, household appliances. In case of these goods, consumers make choice of a
product considering its suitability, price, style, quality and products of competitors and substitutes,
if any. In other words, the consumers usually spend a considerable amount of time and effort to
finalize their purchase decision as they lack complete information prior to their shopping trip. It
may be noted that shopping goods involve much more expenses than convenience goods.

Specialty Goods: Because of some special characteristics of certain categories of goods people
generally put special efforts to buy them. They are ready to buy these goods at prices at which they
are offered and also put in extra time to locate the seller to make the purchase. The nearest car
dealer may be ten kilometers away but the buy will go there to inspect and purchase it. In fact,
prior to making a trip to buy the product he/she will collect complete information about the various
brands. Examples of specialty goods are cameras, TV sets, new automobiles etc.

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2) Industrial Goods: Goods meant for consumption or use as inputs in production of other
products or provision of some service is termed as „industrial goods‟. These are meant for non-
personal and commercial use and include:

 Raw materials
 Machinery
 Components
 Operating supplies (such as lubricants, stationery etc.).
The buyers of industrial goods are supposed to be knowledgeable, cost conscious and rational in
their purchase and therefore, the marketers follow different pricing, distribution and promotional
strategies for their sale. It may be noted that the same product may be classified as consumer goods
as well as industrial goods depending upon its end use. Take for example the case of coconut oil.
When it is used as hair oil or cooking oil, it is treated as consumer goods and when used for
manufacturing a bath soap it is termed as industrial goods. However, the way these products are
marketed to these two groups are very different because purchase by industrial buyer is usually
large in quantity and bought either directly from the manufacturer or the local distributor.

2. Based on Durability, the products can be classified as:

1) Durable Goods;
2) Non-durable Goods

Durable Goods: Durable goods are products which are used for a long period i.e., for months or
years together. Examples of such goods are refrigerator, car, washing machine etc. Such goods
generally require more of personal selling efforts and have high profit margins. In case of these
goods, seller’s reputation and presale and after-sale service are important determinants of purchase
decision.

Non-durable Goods: Non-durable goods are products that are normally consumed in one go or last
for a few uses. Examples of such products are soap, salt, pickles, sauce etc. These items are
consumed quickly and we purchase these goods more often. Such items are generally made
available by the producer through large number of convenient retail outlets. Profit margins on such
items are usually kept low and heavy advertising is done to attract people towards their trial and
use.

3. Based on tangibility, the products can be classified as:

Tangible Goods; and
Intangible Goods

Tangible Goods: Most goods, whether these are consumer goods or industrial goods and whether
these are durable or non-durable, fall in this category as they have a physical form that can be
touched and seen. Thus, all items like groceries, cars, raw-materials, machinery etc. fall in the
category of tangible goods.

16
Intangible Goods: Intangible goods refer to services provided to the individual consumers or to the
organizational buyers (industrial, commercial, institutional, government etc.). Services are
essentially intangible activities which provide want or need satisfaction. Medical treatment, postal,
banking and insurance services etc., all fall in this

In Construction industry the total product includes services offered by the contractor in the support
of the core product i.e. physical product.
For the construction industry products are:
Physical: houses, public and commercial facilities infrastructure & building products.
Service: expertise consultancy & design
Persons and reputation
Ideas and proposals: urban regeneration, regional development and competitions

Essentials: water gas electricity telecommunication, transport facilities Highly desirable:

schools, hospitals, shopping complexes, leisure centers Desirables: environmentally secure,
adaptable.

Product offerings can be explained through the total product concept which consists of core
product, formal product and augmented product.
In the Housing industry:

The core product consists of: permanent accommodation / living space. The format product
consists of: locations, utilities, electricity, brand name, availability of schools and hospitals nearby.
The augmented product consists of: security available clean environment, amenities.

6. Process
Many customers no longer simply buy a product or service - they invest in an entire experience
that starts from the moment they discover your company and lasts through to purchase and beyond.
According to (Hall)

That means the process of delivering the product or service, and the behavior of those who deliver
it, are crucial to customer satisfaction. A user-friendly internet experience, waiting times, the
information given to customers and the helpfulness of staff are vital to keep customers happy.

Process is one of the P s that is frequently overlooked. A customer trying to reach your company
by phone is a vital source of income and returning value but so often customers minutes listening
and recorded message before they are able to get through, many of these customers will give up,
go elsewhere and tell their friends not to use your company just because of the poor process that

17
is in place. Even if they do get through, they will go away with a negative impression of the
company.

The reason for this is that the systems are not usually designed by marketers, there are designed
for the company‟s benefit not the customers.
Customers are not interested in the detail of how your business runs, just that the system works.
However, they may want reassurance they are buying from a reputable or „authentic‟ supplier.

Remember the value of a good first impression. Identify where most customers initially come into
contact with your company - whether online or offline – and ensure the process there, from
encounter to purchase, is seamless.
Ensure that your systems are designed for the customer’s benefit, not the company’s convenience.

However, one should ask himself if customers have to wait? Are they kept informed? Is your
website fast enough and available on the right devices? Are your people helpful? Is your service
efficiently carried out? Does your staff interact in a manner appropriate to your pricing?

Customers trying to reach your company by phone are a vital source of income and returning
value; but so often they are left on hold. Many will give up, go elsewhere and tell their friends not
to use your company – just because of the poor process.

7. Physical evidence
Physical evidence is about where the service is being delivered from. It is particularly relevant to
retailers operating out of shops. This element of the marketing mix will distinguish a company
from its competitors.

Physical evidence can be used to charge a premium price for a service and establish a positive
experience. For example all hotels provide a bed to sleep on but one of the things affecting the
price charged, is the condition of the room (physical evidence) holding the bed.

Customers will make judgments about the organization based on the physical evidence. For
example if you walk into a restaurant you expect a clean and friendly environment, if the restaurant
is smelly or dirty, customers are likely to walk out. This is before they have even received the
service.

The concept behind the component of physical evidence is that no one will pay for a good or
service he has not seen. Physical evidence is presented in the following way;

 Lay out
 Décor
 Ease of access
 Forms of presentation i.e. tangible goods that help to communicate the product or service.

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Therefore in construction marketing, physical evidence is a strong aspect as seen in the following
ways;

In marketing of services such as quantity surveying, architectural works, the client needs to see
the physical offices of the professionals, past works done by the same people so that he can be
convinced they will deliver.

Also , in purchasing of goods that is houses, buildings , the prospective buyer has to first tour the
premises to ensure if they will meet his needs and thus determine how much to pay for the building.

GROUP 3
MARKETING SYSTEMS
A marketing system is a network comprised of a number of elements: the particular products (like
construction materials for example bricks, blocks, roofing tiles, cement and others) and their
characteristics being transferred from producer to consumer; the characteristics of participants (e.g.
the producer/manufacturer, the trader, the consumer); the functions or roles that each participant
performs in the market; and the locations, stages, timetable and physical infrastructures involved.

When describing, quantifying or analyzing a particular marketing system, there is an implicit

assumption that we can distinguish the elements of that system from other economic activities.
Analyses of marketing systems usually include quantification of the flows and of the value added,
costs and profit margins at each stage in the system.
The participants in a marketing system include:
Direct market players – producers, buyers and consumers who drive economic activity in the
market.
Suppliers of supporting goods and services such as finance, equipment and business consultants.

Entities that influence the business environment such as regulatory agencies, infrastructure
providers and business associations.

FORMS OF MARKETING SYSTEMS

1. Horizontal marketing system
A horizontal marketing system is a distribution channel arrangement whereby two or more
organizations at the same level join together for marketing purposes to capitalize on a new

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opportunity. For example two manufacturers; one supplying construction equipment for hire
combining with another who supplies fine and coarse aggregates to achieve economies of scale
otherwise not possible with each acting alone to meet the needs and demands of a very large
retailer.

A horizontal marketing system is a merger of firms on the same level in order to pursue marketing
opportunities. The firms combine their resources, such as production capabilities and distribution,
in order to maximize their earnings potential.

2. Vertical marketing system

Vertical marketing system is a kind of cooperation that exists between the distribution channels
that are available in various levels with different members working together for promoting the
efficiency and also the economies of scale in way that the products can be promoted towards
customers, products get inspected, credit can be provided to the customers and also can be
delivered to the customers.

The vertical marketing system comprises of mainly three components which are producer,
wholesaler and retailer. The producer can be considered as the manufacturer who is involved in
the making of the product.
The wholesaler usually purchases the products from these producers and then they manage the
distribution to the retailers. The retailers are the people who markup the price of the products
depending on wholesaler and also can sell the products to the final users or the customers.
Types under vertical marketing systems include;

 Corporate
A corporate vertical marketing system can be involved with the ownership of the levels of
distribution or production chain that is associated with a single company. A company has a place
for the designing and also the making of the products which are sold in the retailer shops of the
company itself. They need not have to depend on any of the other people for the purpose of
production or even selling of the products.

 Contractual
This is a kind of vertical marketing system that has a formal agreement involved in it that exists
between various levels of production or it can be between the levels of distribution channel. This
is done for coordinating the overall process that is related with the particular company

 Administered
This is a kind of vertical marketing systems that has one company from the production chain and
the other from the distribution chain and the latter has more dominance. They organize the whole
nature that is associated with the vertical marketing system in an informal manner. This is due to
the sheer size that is associated with the company.

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The distribution usually dictate their terms and conditions to the production companies that are
small and are involved in making some products which come under the category of producers a
base component of the vertical marketing systems.

MARKETING ENVIRONMENT
A variety of environmental forces influence a company’s marketing system. Some of them are
controllable while some others are uncontrollable. It is the responsibility of the marketing manager
to change the company’s policies along with the changing environment.

According to Philip Kotler, “A company’s marketing environment consists of the internal factors
& forces, which affect the company’s ability to develop & maintain successful transactions &
relationships with the company’s target customers”.
The Environmental Factors may be classified as:

 Internal Factor
 External Factor
 Internal Environmental Factors
A Company’s marketing system is influenced by its capabilities regarding production, financial &
other factors. Hence, the marketing management/manager must take into consideration these
departments before finalizing marketing decisions. For example; the Research & Development
Department, the Personnel Department, the Accounting Department have an impact on the
Marketing Department. It is the responsibility of a manager to company-ordinate all department
by setting up unified objectives.
External Environmental Factors
External Factors may be further classified into:
External Micro Factors
External Macro Factors
External Micro Factors
These include;

Suppliers: They are the people who provide necessary resources needed to produce goods &
services. Policies of the suppliers have a significant influence over the marketing manager’s
decisions. A company must build cordial & long-term relationship with suppliers.

Marketing Intermediaries: They are the people who assist the flow of products from the producers
to the consumers; they include wholesalers, retailers, agents, etc. These people create place & time
utility. A company must select an effective chain of middlemen, so as to make the goods reach the
market in time. The middlemen give necessary information to the manufacturers about the market.

21
If a company does not satisfy the middlemen, they neglect its products & may push the
competitor’s product.

Consumers: The main aim of production is to meet the demands of the consumers. Hence, the
consumers are the center point of all marketing activities. If they are not taken into consideration,
before taking the decisions, the company is bound to fail in achieving its objectives.

A company’s marketing strategy is influenced by its target consumer. For example: If a

manufacturer wants to sell to the wholesaler, he may directly sell to them, if he wants to sell to
another manufacturer, he may sell through his agent or if he wants to sell to ultimate consumer he
may sell through wholesalers or retailers. Hence each type of consumer has a unique feature, which
influences a company’s marketing decision.

Competitors: A prudent marketing manager has to be in constant touch regarding the information
relating to the competitor’s strategies. He has to identify his competitor’s strategies, build his plans
to overtake them in the market to attract competitor’s consumers towards his products.

Any company faces three types of competition:

 Brand Competition: It is competition between various companies producing similar

products. For example: The competition between Hima Cement and Tororo Cement.
 The Product Form Competition: It is competition between companies manufacturing
products, which are substitutes to each other For example: Competition between Iron sheets
and Roofing tiles.
 The Desire Competition: It is the competition with all other companies to attract consumers
towards the company. For example: The competition between the manufacturers of
cement& all other companies manufacturing various products like blocks.
Hence, to understand the competitive situation, a company must understand the nature of market
& the nature of customers.

The Public: A Company’s obligation is not only to meet the requirements of its customers, but also
to satisfy the various groups. The public is defined as “any group that has an actual or potential
ability to achieve its objectives”. The significance of the influence of the public on the company
can be understood by the fact that almost all companies maintain a public relation department. A
positive interaction with the public increases its goodwill irrespective of the nature of the public.
A company has to maintain cordial relation with all groups, public may or may not be interested
in the company, but the company must be interested in the views of the public.
The public may include;

Press: This is one of the most important group, which may make or break a company. It includes
journalists, radio, television, etc. Press people are often referred to as unwelcome public. A
marketing manager must always strive to get a positive coverage from the press people.

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Financial Public: These are the institutions, which supply money to the company. For example:
Banks, insurance companies, stock exchange, etc. A company cannot work without the assistance
of these institutions. It has to give necessary information to these public whenever demanded to
ensure that timely finance is supplied.

Government: Politicians often interfere in the business for the welfare of the society & for other
reasons. A prudent manager has to maintain good relation with all politicians irrespective of their
party affiliations. If any law is to be passed, which is against the interest of the company, he may
get their support to stop that law from being passed in the parliament or legislature.

General Public: This includes organizations such as consumer councils, environmentalists, etc. as
the present day concept of marketing deals with social welfare, a company must satisfy these
groups to be successful.

 External Macro Environment

These are the factors/forces on which the company has no control. Hence, it has to frame its
policies within the limits set by these forces:

Demography: It is defined as the statistical study of the human population & its
distribution. This is one of the most influencing factors because it deals with the people who form
the market. A company should study the population, its distribution, age composition, etc. before
deciding the marketing strategies. Each group of population behaves differently depending upon
various factors such as age, status, etc. if these factors are considered, a company can produce only
those products which suit the requirements of the consumers.

Economic Environment: A company can successfully sell its products only when people
have enough money to spend. The economic environment affects a consumer’s purchasing
behavior either by increasing his disposable income or by reducing it. For example: During the
time of inflation, the value of money comes down. Hence, it is difficult for them to purchase more
products.
Physical Environment or Natural Forces: A company has to adopt its policies within the
limits set by nature. A man can improve the nature but cannot find an alternative for it.
Nature offers resources, but in a limited manner. A product manager utilizes it efficiently.
Companies must find the best combination of production for the sake of efficient utilization of the
available resources. Otherwise, they may face acute shortage of resources. For example: Petroleum
products, power, water, etc.
Technological Factors: From customer’s point of view, improvement in technology means
improvement in the standards of living. Every new invention builds a new market & a new group
of customers. A new technology improves our lifestyle & at the same time creates many problems.
For example: Invention of various consumer comforts like mixers have resulted in improving our
lifestyle but it has created severe problems like power shortage.

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 Social & Cultural Factors: Most of us purchase because of the influence of social & cultural
factors. The lifestyle, values, believes, etc. are determined among other things by the society in
which we live. Each society has its own culture. Culture is a combination of various factors which
are transferred from older generations & which are acquired. Our behavior is guided by our culture,
family, educational institutions, languages, etc. A marketing manager must study the society in
which he operates.

DEVELOPMENT OF MARKETING STRATEGY

This is the selection of a course of action from among several alternatives that involves specific
customer groups, communication methods, distribution channels, and pricing structures. It is a
combination of target markets and marketing mixes.
Marketing Strategies by life cycle

 Introduction Stage
In this stage, a new product is introduced on a large scale for the first time. Market reacts slowly
to the introduction. In other words, consumers take time to accept the new product. Initially, the
company may suffer losses, sales improves gradually. Most of the products fail in this stage itself.
Following are the characteristics of this stage:

 Consumers do not have the knowledge of the product

 Consumers may or may not be strongly in need of the new product.
 If there is a need for the product, the company gets readymade demand. Otherwise, it
increases slowly.
 Sales are minimum
 The competition is less, in fact the company, which introduces new product is called as a
Market Pioneer.
 The cost of it is very high because the company spends money heavily on Research &
Development, Sales, Promotion, etc.
 A company has to prepare the policies very carefully in the stages because it has a great
impact on the image of a new product. Even a minor mistake results in the premature death
of a product.
The following are the strategies that the company may adopt in this stage:
It may spend heavily on promotion & fix high price. This meets two objectives.

Firstly, heavy promotion creates large demand & high price, brings immediate profits. This
strategy also helps to create brand preference in the minds of the consumer. It is normally followed
when there is a great need for the product, when the product belongs to the richer class & when
products are consumer specialties.

24
 The second strategy is to fix high price but to spend less on promotion. This is preferred
when the product has limited market, in which people have knowledge about the product & the
competition is completely absent.

Another strategy is to charge low price & spend heavily on promotion. This is preferable
when consumers are sensitive to the price and when the market is wide enough. This strategy
brings good returns in the long run.

The company may charge low price & spend less on promotion. This is preferable when the
consumers are informed about the product, market is very large & there is no competition for the
time being.

In the introduction stage, the competitors are very cautious. They do not enter the market
immediately. They study the strategies of a company and watch the reaction of the consumers.
This helps them to find out the defects of the company’s strategy.

 Growth Stage
It is called the market acceptance stage. The following are its features:

 Consumers & traders accept the product

 Sales & profits increase
 More competitors enter the market
 The focus of competition is on the brand rather than the product
 Competitors may introduce new features to the product
 Distribution network increases
 The price will be reduced marginally
The following are the strategies in this stage:
The company tries to impress upon the consumers that its brand is superior.
It may introduce new models or improve the quality.
It may enter new market and sell its products with new distribution channels.
To attract more buyers, it may reduce the price.

 Maturity Stage
This stage indicates the capacity to face the competition, sales increases at a decreasing rate.
Competition becomes severe. It is reflected in various ways such as offering discounts, modifying
products etc.

In this stage, the manufactures have to take responsibility to promote his product. This strategy
aims at creating brand loyalty.

 Decline Stage

25
For all products, sales invariably decline as new products enter the market. In this stage, there is a
sharp decline in the profits, cost increases and market share comes down. Most of the manufactures
withdraw from the market. Some may reduce production & concentrate only on a limited market.
The marketing strategies in this stage:

This stage offers one of the greatest challenges to the marketing manager. He has to decide whether
or not to continue with the product. The main task of marketing manager is to revitalize the demand
instead of discontinuing the product immediately. It is better to withdraw gradually. Those
channels of distribution, which are costly and unproductive maybe removed. In the meantime, the
weak points of the marketing mix maybe identified & altered as required.
Marketing strategies by Market Position

Market Leaders
Expand the size of the total market
Protect market share
Expand market share

Market Challengers
Take on or attack the market leader
Market Followers
Shy away from any attacks on market leaders

Market Nichers
Specialize in a particular market segment.

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GROUP 4
MARKETING SYSTEMS
A market system is a dynamic space incorporating resources, roles, relationships, rules and results
in which private and public actors collaborate, coordinate and compete for the production,
distribution and consumption of goods and services. (Campbell, 2012)
MARKETING SEGMENTATION

Market Segmentation refers to the process of dividing a broad consumer or business market,
normally consisting of existing and potential customers, into sub groups of consumers based on
some type of shared characteristics. The shared characteristics include: - common needs, common
interests, similar life styles and sometimes similar demographic profiles.
The aim of segmentation is to identify high yield segments and these segments are usually most
profitable and others have growth potential. It also identifies true clients’ needs, which can be
combined together to identify the best segments on which to focus marketing efforts. (Campbell,
2012)
REASONS FOR MARKET SEGMENTATION

According to (www.marketingstudyguide.com, 2012) the following are the reasons for market
segmentation.
Target markets: The main reason is to help identify potential target markets

Market understanding: Splitting the overall market into smaller groups helps managers
have a much greater understanding of the marketplace, as they gain knowledge of differing
consumer needs within the same market

Marketing mix: It is then easier to develop a marketing mix is based upon the needs of a
precise market

Competitive position: It can be easier to compete against existing firms by focusing upon
a smaller, more defined, group of consumers

New opportunities: Creative approaches to market segmentation may generate new

opportunities

Avoid mass-marketing: In today’s environment, it is generally quite difficult to be

successful as a mass-marketer

More offerings: Firms are better able to position multiple products in the same overall
market by defining and understanding multiple segments

27
 Niche marketing: Some firms find success as niche marketers (pursuing very narrowly
defined segments) and this specialized approach becomes their basis of their competition
advantage

MARKET SEGMENT
According to (Investopedia.Staff, 2010) a market segment is a group of people who share one or
more common characteristics, lumped together for marketing purposes. Each market segment is
unique, and marketers use various criteria to create a target market for their product or service.
Marketing professionals approach each segment differently, after fully understanding the needs,
lifestyles, demographic and personality of the target consumer.

A market segment is a category of customers who have similar likes and dislikes in an otherwise
homogenous market. These customers can be individuals, families, businesses, and organizations.

Market segmentation assumes that different market segments require different marketing programs
that is, different offers, prices, promotion, distribution or some combination of marketing
variables.
The major segmentation criteria in the construction industry would be:

 Commercial
 Industrial
 Public non-housing
 Infrastructure
 Private housing
 Public housing
THE MAIN CHARACTERISTICS OF MARKET SEGMENTS

To meet the most basic criteria of a market segment, these three characteristics must be present
(Investopedia.Staff, 2010);
There has to be homogeneity among the common needs of the segment.
There needs to be a distinction that makes the segment unique from other groups.

The presence of a common reaction or a similar and somewhat predictable response to

marketing is required for example; common characteristics of a market segment include interests,
lifestyle, age, gender, etc.
WAYS IN WHICH THE MARKET CAN BE SEGMENTED

Business to Business: - this is where the sellers segment the market into different types of
businesses or countries
Business to Consumer: - this is where sellers segment the market into demographic
segments, lifestyle segments, behavioral segments or any other meaningful segment.
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MARKET SEGMENTATION STRATEGY

Market segmentation is dependent on the choice of the company. However the company’s decision
to segment or not is also dependent on the resources available, product type, market characteristics.
Usually they are approaches used in segmentation and these include:-

Undifferentiated approach: this can also be called mass marketing where the marketer
ignores segmentation and develops a product that meets the needs of the largest number of buyers.
Differentiated approach: this involves the firms targeting one or more segments and
develops separate offers for each segment.
Focus strategy; this involves firms focusing efforts on small, tightly defined target market.
Hyper segmentation: this is where firms focus on customizing the offer to each individual
customer. This can also be defined as one-to-one marketing.
FACTORS AFFECTING THE COMPANY’S SEGMENTATION STRATEGY

Consumer resources: when resources are restricted, a concentrated strategy may be more
effective.
 Product variability: For highly uniform products, an undifferentiated marketing may be
more appropriate. For products that can be differentiated then either a differentiated or
concentrated approach is applicable.
 Product life cycle: For new products, one version may be used at the launch stage, but this
may be expanded to a more segmented approach over time. As more competitors enter the
market, it may be necessary to differentiate.
 Market characteristics: When all buyers have similar tastes, or are unwilling to pay a
premium for different quality, then undifferentiated marketing is suitable for such
scenarios.
 Competitive activity: When competitors apply differentiated or concentrated market
segmentation, using undifferentiated marketing may prove to be fatal. A company should
consider whether it can use a different market segmentation approach.(Mcmillan, 2013)
MARKET SEGMENTATION PROCESS

The process of segmenting the market is deceptively simple. They are seven basic steps that
describe the entire process including segmentation, targeting and positioning. However, the task
involves poring over loads of data, and requires a great deal of skill in analysis, interpretation and
some judgment. Although a great deal of analysis needs to be undertaken, and many decisions
need to be made, marketers tend to use the S-T-P process that is Segmentation→ Targeting →
positioning, as a broad framework for simplifying the process.(Outcomes, n.d.)

29
Segmentation

 Identify market (also known as the universe) to be segmented.

The first step in this process is to clearly define the market that the firm is interested in, then
estimate the percentage likely to use the product or service and finally to estimate the revenue
potential. This may sound relatively straightforward but it is an important consideration.

Another approach is to use historical analogy, For example, a supplier of mobile concrete mixers
and pumps might assume that the number of consumers willing to adopt them will be similar to
the adoption rate for excavation equipment. Finding useful analogies can be challenging because
every market is unique. However, analogous product adoption and growth rates can provide the
analyst with benchmark estimates, and can be used to cross validate other methods that might be
used to forecast sales or market size.

 Identify, select and apply base or bases to be used in the segmentation

Once the market has been defined, the next step is to segment the market, using a variety of
different segmentation bases/variables in order to construct groups of consumers. In other words,
allocate the consumers in the defined market to similar groups (based on market needs, behavior
or other characteristics).

After market segments have been developed they are then evaluated using a set criteria to ensure
that they are useable and logical. This requires the segments to be assessed against a checklist of
factors, such as: are the segments reachable, do they have different groups of needs, are they large
enough, and so on.

 Develop segment profiles

Once viable market segments have been determined, segment profiles are then developed.
Segment profiles are detailed descriptions of the consumers in the segments – describing their
needs, behaviors, preferences, demographics, shopping styles, and so on.
Often a segment is given a descriptive nickname by the organization.

Targeting

 Evaluate each segment's attractiveness

Available market data and consumer research findings are then added to the description of the
segments (the profiles), such as segment size, growth rates, price sensitivity, brand loyalty, and so
on. Using this combined information, the firm will then evaluate each market segment on its
overall attractiveness. Some form of scoring model will be used for this task, resulting in numerical
and qualitative scores for each market segment.

 Select segment or segments to be targeted

With detailed information on each of the segments now available, the firm then decides which
ones are the most appropriate ones to be selected as target markets. There are many factors to
consider when choosing a target market. These factors include: firms strategy, the attractiveness

30
of the segment, the competitive rivalry of the segment, the firm’s ability to successfully compete
and so on.

Positioning

 Identify optimal positioning for each segment

The next step is to work out how to best compete in the selected target market. Firms need to
identify how to position their products/brands in the target market. As it is likely that there are
already competitive offerings in the market, the firm needs to work out how they can win market
share from established players. Typically this is achieved by being perceived by consumers as
being different, unique, superior, or as providing greater value.

 Develop the marketing program for each segment

Once a positioning strategy has been developed, the firm moves to implementation. This is the
development of a marketing plan that will support the positioning in the marketplace. This requires
suitable products need to be designed and developed, at a suitable price, with suitable distribution
channels, and an effective promotional program.

After a period of time, and on a regular basis, the firm needs to revisit the performance of various
products and may review their segmentation process in order to reassess their view of the market
and to look for new opportunities.
TYPES OF MARKET SEGMENTATION

Geographic segmentation separates a market into different geographical boundaries which

can impact the marketing mix of product, price, promotion and channel to market.

Demographic segmentation separates a market by demographic indicators including

gender, age, household type, education level and income. Simply put, the type of products we buy,
how much we spend, and how we buy them are largely determined by demographic factors.

Psychographic segmentation separates a market by lifestyle as well as values and beliefs.

There are large target markets which fit psychographic segmentation, such as outdoor recreation
and fitness.
Behavioral segmentation separates a market by shopping and buying behaviors. Are you
an online shopper or do you prefer to handle products in the store? How often do you shop? Do
you research a purchase carefully before making a decision, or do you tend to buy on impulse? All
of these factors determine how consumers are segmented and marketed to.

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BENEFITS OF MARKET SEGMENTATION

 More efficient advertising

This is the most obvious benefit. If you take a large, unwieldy market and segment it into
manageable pieces, advertising is going to be both easier and more effective. When you segment
a market, you simultaneously segment marketing options. You can now choose websites,
magazines, TV stations, etc. that are tailored to each market.

 New Segment, New Focus

Not all segments are divided to suit pre-existing products. Much of the time the product is
reimagined to fit a new market segment. If a company can spot this segment early, then it can alter
its focus for more effective results. In this way, a company’s entire strategy, from designing a new
product to creating a marketing objective to complement it, is based on a new segment and new,
narrower focus.

Vital to the success of a new focus is ensuring that the focus is legitimate, lasting and proven to be
profitable.

 Concentrated Distribution
When your focus narrows, so do your channels of distribution. It might seem counter-intuitive that
when you decrease market size by segmenting it, you are able to increase distribution. Further,
how it this possible when you also must decrease the overall number of distribution channels? The
idea is that once you figure out the high-density areas of customer interest, you can eliminate
ineffective distribution channels and use these new, freed-up resources to pump those outlets that
receive the greatest amount of traffic.

 Precise Branding
Once the market is segmented, you can hit the nail on the head when it comes to branding. Every
aspect of your company and its products can be tailored to meet the customers’ demands: design,
customer service, price, quality, etc.

 Increase in Sales
This is the one we’ve all been waiting for. Yes, increases in sales are more than possible with
market segmentation, but there is one thing to consider first: you are bound to lose some customers
when you narrow your boundaries. It’s inevitable. For this reason, immediate sales may drop. But
if you devised an intelligent plan, you will soon boost sales in your target audience thanks to many
of the benefits listed above. And once you’ve established yourself as a leader in your segmented
market, you will begin stealing customers from the competition.

 Customer Retention
Customer retention is accomplished in two ways. First, by segmenting the market into three
primary categories: affordable, mid-range, and high-end. By so doing, products are created for just
about anyone.

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Second, customer retention is achieved through increasing competitiveness. That is, you are
making yourself more competitive by narrowing your focus. Brand loyalty directly results from
association.
THE BUYER DECISION PROCESS

The buyer decision process refers to the decision making process used by consumers regarding
market transaction before, during and after the purchase of a good.(Behaviour et al., n.d.)
This process describes the journey the buyer goes through before they buy the product. The buyer
decision process is not only very important for the salespeople however it also enables you to align
yours sales strategy accordingly.

The five stages framework remains a good way to evaluate the customer’s buying process. John
Dewey first introduced the following five stages in 1910.

 Problem/need recognition
This is stage one where there is recognition of a particular problem or need and here the buyer has
a need to satisfy the problem. The need may have been triggered by internal factors such as hunger
or thirst and or external factors such as advertising or word of mouth.

 Information search
Having recognized a problem or need, the next step a buyer may take is the information search
stage in order to find out what they feel is the best solution. This is the buyer’s effort to search
internal and external business environments in order to identify and evaluate information sources
related to the central buying decision and also find the best product or service for solving the
problem or satisfying any need. The buyer may rely on print, visual, online media or word of
mouth for obtaining information.

 Evaluation of alternatives
At this stage, individuals will evaluate different products or brands on the basis of alternative
product attributes where the buyer will decide upon a set of criteria to use for assessing each
alternative. A factor that heavily influences this stage is the buyer’s attitude; involvement is
another factor that influences the evaluation process. For example, if the customer’s attitude is
positive and involvement is high, then they will evaluate a number of companies or brands; but if
it is low, only one company or brand will be evaluated.

 Purchase decision
At this stage, we buy or select a product, service and supplier. Individuals or teams of buyers make
the final choice of what to buy and from whom to buy it but Philip Kotler (2009) states that the
final purchase decision may be disrupted by two factors: negative feedback from other buyers and
the level of motivation to accept the feedback. For example, having gone through the previous
three stages, a buyer chooses to buy a new telescope. However, because his very good friend, a
keen astronomer, gives him negative feedback, he will then be bound to change his preference.

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Furthermore, the decision may be disrupted due to unforeseen situations such as a sudden job loss
or relocation.

 Post-purchase behavior
In brief, customers will compare products with their previous expectations and will be either
satisfied or dissatisfied. This can greatly affect the decision process for similar purchases from the
same company in the future, having a knock-on effect at the information search stage and
evaluation of alternatives stage. If your customer is satisfied, this will result in brand loyalty, and
the Information search and Evaluation of alternative stages will often be fast-tracked or skipped
altogether. And if the buyer is dissatisfied, he or she can take action to improve the product or
service so the buyer’s actions at this point might inform other potential buyers who would be keen
to hear about your experiences-good or bad.
General example

Let’s look at an example based upon buying a new smart cellphone. The first stage is likely to be
that you have a need for communication or access to the Internet, or problem because you cannot
interact with friends using social media. The value added by products such as Android, iPhone or
Windows phone and others should satisfy your need or solve your problem. So the second stage is
where you speak to your friends and surf the Internet looking at alternatives, which represent stage
two – or your information search. As a buyer you might visit a local cellphone store and speak to
the sales staff to help you complete stage three, i.e. your evaluation of alternatives. Stage four is
the selection of product and you go and make your final decision and buy your smartphone from
a local store or using an e-commerce website. Stage five involves your postpurchase evaluation
whereby you use the phone and have a positive, negative or mediocre experience of the product.
If it doesn’t satisfy your needs you take action and more importantly you’ll tell others of your
problems. If you’re pleased with the product, you will tell your friends and this will influence stage
two (their information search) when they decide to buy a cellphone.
COGNITIVE AND PERSONAL BIASES IN DECISION MAKING

According to (Munthiu, 2006)It is generally agreed that biases can creep into our decisionmaking
processes, calling into question the correctness of a decision. Below is a list of some of the more
common cognitive biases.

Selective search for evidence - We tend to be willing to gather facts that support certain
conclusions but disregard other facts that support different conclusions.
Selective perception - We actively screen out information that we do not think is salient.

Premature termination of search for evidence - We tend to accept the first alternative that
looks like it might work.
Conservatism and inertia - Unwillingness to change thought patterns that we have used in
the past in the face of new circumstances.

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 Experiential limitations - Unwillingness or inability to look beyond the scope of our past
experiences; rejection of the unfamiliar.

Wishful thinking or optimism - We tend to want to see things in a positive light and this
can distort our perception and thinking.

Recency - We tend to place more attention on more recent information and either ignore
or forget more distant information.
Repetition bias - A willingness to believe what we have been told most often and by the
greatest number of different of sources.

Anchoring - Decisions are unduly influenced by initial information that shapes our view of
subsequent information.
Groups think - Peer pressure to conform to the opinions held by the group.

Source credibility bias - We reject something if we have a bias against the person,
organization, or group to which the person belongs: We are inclined to accept a statement by
someone we like.

Incremental decision-making and escalating commitment - We look at a decision as a small

step in a process and this tends to perpetuate a series of similar decisions. This can be contrasted
with zero-based decision-making.
Inconsistency - The unwillingness to apply the same decision criteria in similar situations.

Attribution asymmetry - We tend to attribute our success to our abilities and talents, but
we attribute our failures to bad luck and external factors. We attribute other's success to good luck,
and their failures to their mistakes.

Role fulfillment - We conform to the decision-making expectations that others have of

someone in our position.

Underestimating uncertainty and the illusion of control - We tend to underestimate future

uncertainty because we tend to believe we have more control over events than we really do.

Faulty generalizations - In order to simplify an extremely complex world, we tend to group

things and people. These simplifying generalizations can bias decision-making processes.

Ascription of causality - We tend to ascribe causation even when the evidence only
suggests correlation. Just because birds fly to the equatorial regions when the trees lose their
leaves, does not mean that the birds migrate because the trees lose their leaves.
MODELS OF BUYER DECISION MAKING
According to (Behaviour et al., n.d.)There are generally two classifications of buyer decision
making models

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Traditional
Economic models–This model assumes that with limited purchasing power and a set of needs and
tastes, a consumer will allocate his/ her expenditure over different products at a given prices so as
to maximize utility.
Bases for Economic Model:

 Price Effect
 Substitution Effect
Income Effect Criticism:

 Fails to explain how the consumer actually behaves.

 Incompleteness in the Model.
 Lack of broader perspective
 Largely quantitative and are based on the assumptions of rationality and near perfect
knowledge. The consumer is seen to maximize their utility.
Psychological models–This model based on the work of psychologists who were concerned with
personality. The view was human needs and motives operates on buying.

This model is concerned with personality and says that human behaviour to a great extent is
directed by a complex set of deep seated motives.
Helps the marketer to know how buyers influenced by symbolic factors in buying a product.

Psychological and cognitive processes. Such as motivation and need recognition. They are
qualitative rather than quantitative and build on sociological factors like cultural influences and
family influences.
Consumer behavior models - practical models used by marketers. They typically blend both
economic and psychological models.

Learning Model
This model helps marketers to promote association of products with strong drivers and cues, which
would lead to positive reinforcement from the consumers.

In marketing context, ‘learning’ will help marketers to understand how consumer learn to respond
in new marketing situations, or how they have learned and respond in the past in similar situations.

As Consumers also learn to discriminate and this information will be useful in working out
different marketing strategies.

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The Sociological Model
As per this model, an individual buyer is a part of the institution called society, gets influenced by
it and in turn, also influences it in its path of development.

The interactions with all the set of society leave some impressions on him and may play a role in
influencing his buying behaviour.

The marketers, through a process of market segmentation can work out on the common behaviour
patterns of a specific class and group of buyers and try to influence their buying pattern.

Contemporary models
The Howard Sheth Model of buying behaviour

It attempts to throw light on the rational brand behaviour shown by buyers when faced with
situations involving incomplete information and limited abilities.
The model refers to three levels of decision making:

 Extensive problem solving

 Limited problem solving
 Routinized response behaviour
The model has borrowed the learning theory concepts to explain brand choice behaviour when
learning takes places as the buyer moves from extensive to routinized problem solving behaviour.

The model makes significant contribution to understand consumer behaviour by identifying the
variables which influence consumers.
Four components involved in the model:

 Input variables
 Output variables
 Hypothetic constructs
 Exogenous variables
Limitations of the model

 There is an absence of sharp distinctions between exogenous variables and other variables.
 Some of the variables, which are not well defined, and are difficult to measure too.
 The model is quite complex and not very easy to comprehend.
The Nicosia Model
This model attempts to explain buying behaviour by establishing a link between the organisation
and its prospective customer. It analyse human being as a system with stimuli as the input to the
system and the human behaviour as an output of the system.

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The model suggests that message from the first influences the predisposition of the consumer
towards the product or services. Based on the situation, the consumer will have a certain attitude
towards the product. This may result in a search for the product or an evaluation of the product
attributes by the consumer.

If the customer satisfies with above it may result in a positive response, with a decision to buy the
product otherwise the reverse may occur.
The Nicosia Model explains in 4 basic areas:

Field 1:- the consumer attributes and the firm’s attributes. The advt. message sent from the
company will reach the consumer attributes.

Field 2:- it is related to the search and evaluation, undertaken by the consumer, of the advertised
product and also to verify if other alternatives are variable.
Field 3:- it explains how the consumer actually buys the product.

Field 4:- it is related to the uses of the purchased items. It can also be related to an output to receive
feedback on sales results by organisation. Limitations
The flow is not completed and does not mention the various factors internal to the consumer.

The assumption about the consumer being involved in the decision process with no predisposition
about the various brands is restricting.
Overlapping between firm’s attributes and consumers attributes.

The Engel – Kollat – Blackwell (EKB) Model

This model talks of consumer behaviour as a decision making process in the form of five steps
(activities) and other related variables which occur over a period of time.
5 steps involved in the decision process:

 Problem Recognition
 Information Search
 Alternative Evaluation
 Choice
 Outcome
Other related Variables included in this model:

 Information input
 Information processing
 Product – brand evaluation
 General motivating influences
 Internationalised environment influences

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About the model
The model has emphasised on the conscious decision making process adopted by a consumer.
The model is easy to understand and is flexible.

This model recognises that a consumer may not go through all the steps always. This is because in
case of repeat purchases the consumer may bypass some of the steps.

One limitation, the inclusion of environmental variables and general motivating influences but not
specifying the effect of these on the buyer behaviour.

Engel, Blackwell and Minirad (EBM) Model

It shares certain things with Howard-Sheth model.

The core of the EBM model is a decision process which is augmented with inputs from information
processing and other influencing factors.
Four sections of the Model:

 Input
 Information Processing
 Decision process and
 Variables influencing decision process.
The EBM Model when compared to the Howard-Seth model is more coherent and flexible than
the latter.

This model also includes human processes like memory, information processing and considers
both the positive and negative purchase out comes.

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GROUP 5
INTRODUCTION
Market research is any organized effort to gather information about target markets or customers.
Marketing research is concerned specifically about marketing processes.

Marketing research often focuses on understanding the “Customer” (purchasers, consumers,

influencers), the “Company” (product design, promotion, pricing, placement, service, sales), and
can also be expanded toward the environment to include “Competitors” (and how their market
offerings interact in the market environment).

TYPES OF MARKETING RESEARCH

Marketing research can be classified into three categories depending upon the objectives of the
research. These are:

 Exploratory research
Exploratory research is used in cases where the marketer has little or no understanding about the
research problem due to lack of proper information. For example, a marketer has heard about social
media marketing techniques which are employed by their competitors with great success but he is
not familiar with using these for his products/services.

Exploratory research is used when the main objective of the marketer is to precisely formulate
problems, clear concepts, gain insights, eliminate impractical ideas and form hypotheses.

Exploratory research follows an unstructured format and makes use of qualitative techniques,
secondary research and expert opinions. For example, the marketer from the previous case can use
books, case studies, focus groups, expert interviews and survey techniques to conduct exploratory
research.
The core goal of exploratory research is to equip marketers with enough information to facilitate
marketers to plan a format research design correctly. For example by conducting exploratory
research the marketer can find out that the competitors are using popular social media channels
like Facebook, Twitter, LinkedIn and YouTube to reach target consumers effectively and
successfully engaging customers with the brand directly. Now with this information he can plan a
formal research design to test his hypothesis.

 Descriptive research
Descriptive research is used to explain, monitor and test hypotheses created by marketers to help
them find accurate answers. Due to this reason descriptive research is rigid, well structure and well
planned and uses quantitative techniques like questionnaires, structured interviews, data analysis
and others.

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Descriptive research is used to find accurate answers of questions like:

 Who are users of my products / services?

 How they are using my products / services?
 What proportion of population uses my products / services?
 What is the future demand for my products / services?
 Who are all my competitors?
Causal research
Causal research is used by marketers to find cause effect relationship of variables. In this type of
research, the marketer tries to understand the effects of manipulating independent variable on other
dependent variable.

Causal research uses field and laboratory experimentation techniques to achieve its goals. This
research is used by marketers mainly to predict and test hypotheses.
Test cases where causal research can be used may include the following:

 What will happen to sale of my product if I change the packaging of the product?
 What will happen to sale of my product if I change the design of the product?
 What will happen to sale of my product if I change the advertising?
REASONS FOR CONDUCTING A MARKETING RESEARCH

 Identification of potential new customers

Marketing research carried out in order to identify new customers together with their details so
that to produce a product that satisfies their needs. This involves getting customer details like
customer age, their sex, marital status, their physical address and others.

 Understanding existing customers

Marketing research helps to the business owner to get a better understanding of the existing
customers and the reasons that keeps them buying the business products instead of those of
competitors. This enables you to maintain the quality of the products so as to keep the existing
customers. This involves finding out why do business customers choose business products instead
of those of competitors, what makes business products special or stand out, who or what influences
what they buy, what do customers enjoy doing, watching, and reading and others.

 Setting realistic targets for the business

With the information collected, the management will be able to set achievable and realistic targets
for important business areas like growth, sales and also when it comes to introducing new products
and services to the customers.

 Developing new and effective strategies

Based on the results from the market research, management can make informed marketing
decisions regarding the pricing of business products and services, the distribution, which

41
marketing channels to use, if a new product is to be developed and introduction of a new service.
The results will also help management to make informed decisions about the existing business
activities like whether to increase or reduce? Or perhaps diversify?

 Examining and solving business problems

If the problem has already been identified, marketing research will helps to figure out what went
wrong. Perhaps it is a new competitor who has entered the market and offers more value for
money? Maybe brand awareness has fallen and led to declining sales? This enables management
to find solutions to these problems in order to keep the business running smoothly.

 Preparation for possible business expansion

Marketing research helps with identifying areas for expansion and testing if the market is ready to
receive a new product or service. An example may be the business owner wanting to open a new
shop and are looking for the right location.

 Identification of new business opportunities

When conducting market research, new markets that are un-serviced or under-serviced may be
discovered. One might also be able to identify changing market trends due to new housing areas
being built, increased levels of education, or other changes that will bring new opportunities for
the business.

SOURCES OF DATA USED IN MARKETING RESEARCH

These are divided into two categories which are internal and external sources.
INTERNAL SOURCES

These refer to the sources of information within the business organization. In certain cases internal
sources are indispensable without which the researcher cannot obtain desired results. Internal
sources include accounting information like trading profit & loss account and balance sheets of
different years, salesmen’s reports, statistics in relation to advertisement expenditure,
transportation costs and others. Information from internal sources is easily available and no
financial burden is involved in gathering the information.
EXTERNAL SOURCES

In order to study marketing problems in detail, the need of external sources of marketing research
arises. External sources are of immense importance and utility in case where research needs
detailed and thorough investigation. External sources data can be divided with two categories
which are primary data and secondary data.

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Primary data

This refers to the information collected by the researcher from original sources. It has to be
gathered by the researcher himself by tapping various resources. Primary data is usually collected
for specific purposes.

The main sources from where primary data can be obtained are salesmen, dealers, consumers and
others. It is a very slow process of collecting data and involves huge costs. The results obtained
from this data are original and tend to be more accurate and reliable.
These sources are explained below:

 Salesmen
Salesmen are the most important source of providing first-hand information. They are appointed
by the owners for the sale and promotion of its products. They have a direct link with the
consumers understand tastes, preferences and buying habits of the consumers.

They can also know about the dealer’s reaction especially that of retailers towards the firm’s
products by taking into consideration price, design, packaging and size and others of the product.
The marketing manager may direct the salesmen to prepare periodical reports containing the
information collected by them.

The information collected in this manner is original and more meaningful. This will further
enhance the morale of salesmen as they feel that they are contributing towards the formulation of
marketing policies of the organization.

Sometimes information provided by salesmen is not accurate and up to the mark. The salesmen
may not be properly trained and do not know the methodology to collect the information properly.

 Dealers
This is another source of collecting primary data. Valuable information can be collected with
regard to demand of the product from retailers. Information about the marketing policies of
competitors can also be gathered from the dealers.

It has been observed that sometimes this method does not prove to be fruitful as dealers do not
keep proper records and they do not want to waste their time in supplying information.

 Consumers
This source of collecting primary data is of great importance. Representative samples of consumers
may be selected for conducting thorough investigation with regard to price, quality and use of the
product. This method of collection data is very reliable as it establishes direct link between
producer and the consumer.

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Secondary data
Secondary data is already existing which has been collected and published by some individuals or
institutions. This data is available at a very low cost and it requires lesser time to collect it.
The main sources of secondary data are:

 Periodicals and Newspapers

Business magazines and journals published periodically contain data which is very useful for
marketing research. Newspapers such as East African business week and others also contain data
regarding business trends and market reports.

 Government publications and reports

There are innumerable publications brought by central and local governments which contain
valuable data for conducting marketing research. Census reports of the Government of Uganda,
Publications of Ministries and others supply valuable information extensively used in marketing
research.

 Trade associations
Various trade associations like Chambers of Commerce, Export Promotion Board and others
publish useful data which is of immense help to the research.

 Published surveys of markets

This is another useful source of supplying secondary data. Market surveys and reports are
important instruments in the hands of researcher for conducting marketing research. These are
published by business houses or independent research organizations. These pertain to specific lines
of products.

 Foreign governments and International agencies

Publications of foreign governments with regard to trade and other important aspects of economy
of respective countries and information published by international agencies like world bank,
International monetary fund and others serve useful purpose in making comparisons among
countries in terms of trade.

 Other sources
Besides the above mentioned sources of marketing research, there are many other sources of
supplying secondary data like colleges and universities, stock exchanges and commodity
exchanges, specialized libraries, internal sources such as sales and purchase records, salesman,
reports, sales orders, customer complaints and records of other companies.
The secondary data collected from above mentioned sources suffer from certain limitations. The
basis undertaken by different agencies for collecting data may not be comparable. In other words,
uniform basis may not be adopted for data collection. The data may be based on incomplete records
under secondary source; data is collected for purposes other than marketing research.

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BASIC RESEARCH PROCESS

How is marketing research actually conducted? What are the general steps in completing a research
project? These questions are answered in the steps of the research process.

It is important to carefully plan the research process and formally recognize the relationship
between the stages.
STAGE 1: PROBLEM FORMULATION

Problem formulation means translating the management problem into a research problem. In order
to formulate an appropriate research problem, the researcher must understand the origin and nature
of management’s problem and then be able to rephrase it into meaningful terms from an analytical
point of view. The end result of problem formulation is a statement of the management problem.
STAGE 2: METHOD OF INQUIRY

Market researchers look to the scientific method as the source of their investigative methods. The
scientific method makes great use of existing knowledge both as a starting point for investigation
and as a check on the results of the investigations (i.e. a test of validity). It is analytical in its
processes and is investigator independent. Thus, the scientific method is for the most part logical
and objective, and frequently makes extensive use of mathematical reasoning and complicated
experiments.
STAGE 3: RESEARCH METHOD

Two broad methodologies can be used to answer any research question. These are experimental
research and non-experimental research. The major advantage of experimental research lies in the
ability to control extraneous variables and manipulate one or more variables by the intervention of
the investigator. In non-experimental research, there is no intervention beyond that needed for
purposes of measurement.
STAGE 4: RESEARCH DESIGN

Research design is defined as the specific methods and procedures for acquiring the information
needed. It is a plan or organizational framework for doing the study and collecting the data.
Research designs are unique to a methodology.
STAGE 5: DATA COLLECTION TECHNIQUES

Research design begins to take on detailed focus as the researcher selects the particular techniques
to be used in solving the problem formulated and in carrying out the method selected. A number
of techniques available for collecting data can be used. Some techniques are unique to a method
of inquiry. In general, data collection uses either communication or observation.
Communication (survey) involves asking questions and receiving responses. This process can be
done in person, by mail, by telephone, by e-mail, and over the internet.

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In contrast to this process, data may be obtained by observing present or past behavior. Regarding
past behavior, data collection techniques include looking at secondary data such as company
records, reviewing studies published by external sources, and examining physical traces such as
erosion and others.
STAGE 6: SAMPLE DESIGN

Rarely will a marketing research project involve examining the entire population that is relevant
to the problem. For the most part, practical considerations like absolute resources available cost
versus value and others dictate that one use a sample, or subset of the relevant population. In other
instances, the use of a sample is derived from consideration of the relevant systematic and variable
errors that might arise in a project.
In designing the sample, the researcher must specify three things:

 Where the sample is to be selected

 The process of selection
 The size of the sample
STAGE 7: DATA COLLECTION
Data collection begins after the previous six stages of the research process are complete. It involves
researchers going to the field to collect information/data.
STAGE 8: ANALYSIS AND INTERPRETATION
Data collected must be analyzed. The data must be edited, coded, and tabulated before performing
formal analyses such as statistical tests. The types of analyses that can be properly performed
depend upon the sampling procedures, measurement instruments, and data collection techniques
used.

It is imperative that the techniques of analysis, associated descriptive or prescriptive

recommendation types, and presentation formats be selected prior to data collection.
STAGE 9: THE RESEARCH REPORT

It includes a clear, accurate, and honest description of everything that has been done and the results,
conclusions, and whenever possible recommendations for courses of action.

LISTING
Listing of a property for sell is usually the first step taken by any individual after deciding to sell
off that particular property. It is a simple but vital process that involves the owner of the property
signing an agreement with a broker who will handle the advertisement and all the necessary sales
legalities of that property. In simple terms, it is basically declaring the property up for sale. Listing
involves signing of a “listing agreement”.

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A “listing agreement” is a contract between a real estate agent (the listing agent) and a seller that
says that the agent has the right to list (advertise and handle the sale of) the property, according to
West’s encyclopedia of American Law (2008). It is a legally binding contract between Broker and
Seller and should be entered into with full understanding.

Listing as a term was actually defined by Burton’s Legal Thesaurus as “an agreement that
represents the right of a real estate agent or broker to handle the sale of real property and to receive
a fee or commission for services”, which is basically the same definition for the listing agreement
(contract).

Essential Elements of Listing Agreements

Listing contracts come in all shapes and sizes, but there are characteristics which are common to
all. The listing agreement will normally specify the following items:

1. Title
Property can't be sold unless everyone holding title interest in the property is part of the sale. Hence
the document should show clear authorization from all holding parties on the title to the property
for the sales transactions to proceed. Some of the key defined elements include;

 The common address for the property,

 The legal description (given in bold letters).
2. Terms of Employment
The listing contract is a personal services contract between the seller and the broker. It should
contain all of the terms and conditions of employing the broker and authorizing the broker to
represent the seller in marketing and selling the property. Some of these terms include;

 The broker and the brokerage company details,

 Seller’s warranties and representations regard the right to sell and encroachments,
 Seller’s indemnification to hold agent harmless if his/her representations are incorrect,
 Brief information on closing costs,
 Disclaimer regarding insurance,
 Broker’s right to market the property,
 Brief information on the seller’s disclosure statement,
 Consequence and damages in the event of a buyers breach,
 Attorney’s fees.
 Compensation
The listing contract should specify the amount and timing of payment to the broker. Typically,
payment is an agreed upon percentage of the sales price, payable at closing. The rate of
commission should be stated in the agreement.

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 3. Marketing and Multiple Listing Service Plan
This is a key element in some contracts, whereby a time frame for placing an advertisement to
other Realtors and to the public by the agent through entering the property for sale in the Multiple
Listing Service (MLS) is provided. In such contracts, permission from the seller for the property
to be listed and their agent to cooperate with other member of the MLS is included. This varies
among agents with their personal marketing plan for the property.

4. Listing Duration and Termination Date

It is very advisable for all listing contracts or agreements to specify the duration of contract other
than have an indefinite period. The most common duration for listing is 180 days. If the contract
expires before the property is sold and the owner still wants to keep using the same broker, a new
contract is signed. It is important to note that all listing agreements should be in writing for
effectiveness.

5. Safety or protection clause

Even though the contract has an expiration date, it will probably also include a clause that protects
the agent or broker after that date. This prevents the seller from trying to avoid paying an agent’s
commission by finding a buyer while being represented by the agent, but waiting to conduct the
sale until the listing agreement expires.

6. Dispute Resolution
The agreement may specify how to handle disputes that may not work out informally, such as
through mediation or binding arbitration.

Types of Listing Agreements

There are various types of real estate listings. These include:

Open listing: A general or open listing is a right to sell that may be given to more than one
agent or broker simultaneously. In this type of agreement, sellers have the right to use as many
brokers as they want. The seller is not, however, obligated to pay any of them if he or she sells the
property without the broker’s help.

Exclusive agency listing: An exclusive agency listing is the right of one real estate agency
to be the sole party, with the exception of the owner, who is permitted to sell the property during
a particular period. Agents get paid in this type of agreement only if they sell the property. No fee
is earned if the owner alone sells the property. The exclusive listing agreement may also provide
for a protection period to prevent the seller from abusing the agreement to avoid paying a
commission and to reward the agent for doing his job. The protection period would allow the agent
to still receive full commission after the expiration of the agreement if a potential buyer the agent
brought to the house during the listing period came back later and decided to complete the
purchase. This is known as the extender clause.

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 Exclusive right to sell listing: This is also known as exclusive authorization to sell listing.
In this agreement one agency is given the sole authority to sell the property during a certain time
period. The agency will receive a commission even if the owner finds the buyer during the time
period.

Net listing: A net listing is an arrangement whereby the seller establishes a minimum price
that will be taken for the property, and the agent's commission is the amount for which it sells
above such minimum. This type of agreement is illegal in some states or countries.

A multiple listing: This takes place when an agent with an exclusive listing provides a
number of members of a real estate association with information about the property and shares the
commission with the agent who is able to find a buyer.

Real Estate Agents

These are licensed professionals who represent buyers and sellers in real estate transactions. These
are the individuals who do the direct trade transactions on behalf of sellers and buyers Agents
usually work completely on commission, so their income depends on their ability to assist clients
and close transactions. Agents may work for buyers or sellers.

Duties of Agents
Fiduciary Duty

This is owed to the client. An agent must act in the best interest of the client and not in the best
interest of the salesperson or a third party. A real estate salesperson’s duty includes disclosing all
known facts regarding the property and transaction to the client.
Searching

A real estate salesperson working with a buyer searches for property, while the real estate
salesperson working for a seller searches for a buyer. A primary duty of a real estate salesperson
working for a buyer is to locate an available property that best meets the client’s needs. For the
real estate salesperson working for a seller, the task is to find a qualified buyer to purchase the
client’s property.
Marketing

When searching for a buyer, the real estate sales agent’s duties include marketing the property.
Marketing might involve preparing fliers, creating a virtual tour, installing a for-sale sign,
advertising on the Internet and in print. The listing agreement often governs the extent of the
advertising. A client may pay more for additional marketing services. The agent’s duty is not
necessarily to personally locate a buyer but to reach out to agents who have qualified buyers.

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 Disclosure

The real estate salesperson’s duty is to make a full disclosure to all parties on any matters that
might materially affect the transaction. Yet, a real estate agent should never disclose his client’s
confidential information, especially if that information might give the other party an advantage
during the transaction. For example, a real estate sales agent would need to disclose that his seller’s
property has mold but would not disclose (without the client’s permission) that the seller is
desperate to sell because of a family emergency or that the seller will take less than the listing
price.
Negotiation

The real estate salesperson owes it to the seller to get the best and highest sale price for the client
who is a seller, while the duties of the real estate salesperson representing a buyer is to negotiate
for the lowest possible price for her client. During the negotiation process, the real estate
salesperson advises the client, giving the client all possible information, yet it is not the agent’s
duty to make the final decision for the client. It is the agent's duty to follow all lawful instructions
of the client.
Qualities of a good Agent

 Ability to meet client’s actual requirements (not impose their own)

 Should show clear interest in meeting client’s needs
 Professional designation and membership of the local, state or national real estate institute
 Positive word of mouth and references from previous clients
 Knowledge of the area in which transactions take place
 Knowledge of the price bracket the client is likely to sell in
 Commitment to frank, realistic dialogue about the market and client’s situation

SELLING
This is the last step in the chain of commerce where buyer exchanges cash for a seller’s good or
service.
The steps taken in selling

Deciding how to sell; when we decide to sell, we should find or appoint an agent, asking friends
or family to recommend a real estate agent they have enjoyed working with in the past can be a
great first step. Method of selling may therefore include; private treat or auction. However,
marketing and advertising play an important role in selling. It’s no secret that the greater the
exposure a property has to the market, the greater the number of buyers who are aware of the
listing. Therefore an agent should consider the most effective marketing methods for the style of
property and its attributes.

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 Decide on a listing price; an agent in this case plays an important role. He or she should
provide you with a comparative market analysis. The report contains information on at least three
properties of similar nature and style to yours that have sold recently in your area. This enables
you to know your property’s price potential.

Prepare the property; to encourage more buyer interest taking time freshening up the look
of your property inside and out is highly recommendable. For example; neutral color, clean, bright
and airy residences, well-landscaped gardens and pleasant fragrance.

Inspections; when setting days and times for inspections, think about when your property
is shown I the best light. Agents encourage sellers to not be present during inspections in order to
allow prospective buyers the freedom of inspecting the property without thinking that they are
intruding in someone else’s home.

Knowing the best deal; agents have an obligation to present all offers. Exceptions may
occur when, for example, the seller instructs their agent not to submit offer under certain amount
of money. Some sellers may consider accepting a lower price if the offer is unconditional or has
minimal conditions rather than take the risk on higher priced offer with conditions that may not
proceed to settlement.
Auctions; the seller sets a reserve price (if any) prior to the auction. The seller should
consult with agent and auctioneer when setting the reserve, as they will be familiar with recent,
comparable sales in the area. The agent should take the responsibility to provide the seller with
regular feedback from prospective buyers through the entire marketing campaign.

Costs to consider; this basically is about the agents commission. The agent is required to
ensure that commission is clearly expressed and client fully understands the likely amount and
when it is payable. They may choose to express the commission payable in a variety of ways which
may include a flat fee commission that is to say irrespective of sale.

Other costs; selling your property can incur other costs such as for advertising and
marketing, a valuation report, as well as legal and financial fees.

The Selling Process

Selling is a complex process that varies across industries, products, and customers. Using the
selling process gains customer confidence ensures that customer needs are met, and increases
profits for the company. There is no one, single, correct selling process for all situations, but a
general understanding of the process can be applied to any selling experience. The selling process
consists of several phases which should be performed consecutively. These phases include;

 Preparing to sell,
 Establishing relationships with customers,
 Discovering customer needs,
 Prescribing solutions to customer needs,

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  Reaching closure, and
 Reaffirming buyer-seller relationships.
Each phase is important and contributes to accomplishing the salesperson’s goal of making the
sale. Keep in mind that there is no one, single, correct selling process for all situations, but a general
understanding of the process can be applied to any selling experience.
Preparing to sell

No matter what product being sold, no salesperson can sell without preparation. The first thing a
salesperson must do is acquire knowledge about the product. Another aspect of preparing to sell
is being able to identify the product’s features and benefits.

In certain cases, salespeople also need to generate and qualify sales leads. This means that they
must do the legwork to find potential customers and then determine if those customers are likely
to need or want the product and have the ability to buy it.
Establishing relationships with customers

The completion of a sale is largely determined by the first few minutes that a salesperson spends
with his/her customers. During this time, the company may gain a valuable customer for years to
come or lose a customer forever. Salespeople can use their initial contact time with customers to:

 Put customers at ease.

 Encourage customers to want to hear about the product(s).
 Gain customer confidence.
 Create favorable impressions of themselves and the business.
As a salesperson, your first few minutes with the customer also gives you the chance to size up the
customer so that you can adjust your approach to fit that individual. You’ll soon find that some
customers are not actually aware of their needs, while others know exactly what they want. Your
job is to try to determine what buying decisions have been made by the customer. To do this, look
for clues to the customer’s personality, including general appearance, dress, and nonverbal signs.
Discovering customer needs

The third phase of the selling process involves discovering customer needs and wants. When
customers do not know precisely what they are looking for, the salesperson must be prepared to
discover their needs through skillful questioning and careful listening. Each salesperson can
develop her/his own way of determining customer needs. One thorough approach that you might
try is:

 Asking the customer questions

 Listening to the answers
 Observing customer reactions
 Analyzing customer reactions and comments

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This approach will enable you to tailor your sales presentation based on specific information
gathered from the customer. Assessing customer needs is also important because it:

 Reduces the amount of selling time required

 Reduces dissatisfaction and customer returns
 Allows salespeople to serve more customers, leading to greater potential profit for their
firm and greater potential commission for themselves
 Prescribing solutions to customer needs
Prescription phase.

The salesperson should now offer solutions to the customers’ needs based on the diagnosis that
s/he has made for a particular customer. The prescription phase includes the sales presentation
(prepared in the first phase), which often consists of two parts—the sales talk and the product
demonstration. The sales talk should convince the customer of the benefits to be derived from
purchasing the product. Throughout the talk, the salesperson must translate product features into
benefits that meet the buyer’s specific needs. For instance, if the office-equipment salesperson has
determined that the customer needs a copy machine that makes color copies, the salesperson would
focus on color copiers that also satisfy the customer’s other copying needs.
Reaching closure
Reaching closure is the fifth phase of the selling process. Many salespeople feel that the closing
actually has two purposes—identifying any remaining objections (resistance) the customer may
have and getting the order.

An objection is a question or concern raised by customers after they have been shown a product.
For example, after listening to a lawn-care service sales representative discuss his/her firm’s
capabilities, a customer may express concern about how the chemicals will affect the family pet.
Salespeople should anticipate objections and learn to use them to their advantage in a sales
presentation. Some tips for handling objections are:

 Welcome them! Clearing up objections can serve as a chance for you to demonstrate your
knowledge and further solidify the product’s benefits.
 Listen from the customer’s point of view to identify the real objection.
 Restate the objection to be sure that you understand it.
 Answer and overcome each objection completely, without arguing with the customer or
losing your poise.
 Review customer benefits.
 Try to develop customer conviction for the product.

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AUCTIONING
An auction is a process of buying and selling goods or services by offering them up for bid, taking
bids, and then buying the item to the highest bidder. Auctions are generally used by sellers in
situations where they do not have a good estimate of the buyers’ true values for an item, and where
buyers do not know each other’s values. They as well use it d to elicit bids from buyers that reveal
these values.
Relationships between Different Auction Formats
Descending-Bid and First-Price Auctions

First, consider a descending-bid auction. Here, as the seller is lowering the price from its high
initial starting point, no bidder says anything until finally someone actually accepts the bid and
pays the current price. Bidders therefore learn nothing while the auction is running, other than the
fact that no one has yet accepted the current price.
Ascending-Bid and Second-Price Auctions

Now let’s think about an ascending-bid auction, in which bidders gradually drop out as the seller
steadily raises the price. The winner of the auction is the last bidder remaining, and she pays the
price at which the second-to-last bidder drops out.

TYPES OF AUCTIONING
There are basically three types the primary and secondary.
1. Absolute Auction (or auction without reserve)

 The property is sold to the highest bidder, regardless of the price.

 Since a sale is guaranteed, buyer excitement and participation are heightened.
 Generates maximum response from the market place.
 Many sellers, including financial institutions and government agencies have begun to use
this method more frequently.
2. Minimum Bid Auction

 The auctioneer will accept bids at or above a published minimum price. This minimum
price is always stated in the brochure and advertisements and is announced at the auction.
 Reduced risk for seller as the sales price must be above a minimum acceptable level.
 Buyers know they will be able to buy at or above the minimum.
 The seller may, however, limit interest in the auction to only those buyers willing to pay
the minimum bid price, and therefore it must be low enough to act as an inducement rather
than a hindrance.

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3. Reserve Auction (an auction subject to Confirmation)

In this scenario, the high bid is reduced, in effect to an offer not a sale. A minimum bid is not
published, and the seller reserves the right to accept or reject the highest bid within a specified
time -- anywhere from immediately following the auction up to 72 hours after the auction
concludes. Sellers predetermine the price at which the property will be sold and are not obligated
to confirm a sale other than at a price that is entirely acceptable to them. The main disadvantage
of a Reserve Auction is that prospective buyers may not invest the time and expense of due
diligence when there is no certainty they will be able to buy the property even if they are the highest
bidder.

AUCTION PROCESS

 Listing the property

This is where the seller offers the property for sale by signing an agreement with either the broker
or agent.

 Inspection of the property:

This is done by the seller through invitation of potential buyers in order to allow them check the
quality of the products that are to be auctioned in order for them to make right decisions.

 Setting of a reserve price

This step is where the seller sets the lowest acceptable price for his/her property and below which
he/she cannot offer the property to the buyer.

 Short list the bidders

This involves evaluating of the bidders on grounds as to whether they meet the necessary
requirements

 Bidding process
Under this process, the seller offers the property and the highest bidder takes the property and the
lowest agrees to lose it.

 Offering the property

The property is then given to the highest bidder amidst among all bidders

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GROUP SIX

Practical implications of the characteristics of intangible products and the pricing,

promotion, placement, physical evidence, process people.
INTRODUCTION

Intangible products are those you cannot see and touch. Services are intangible in nature.
Intangibility of services is derived from the fact that you cannot see or touch a service. A service
is made and delivered on spot and hence it cannot be measured as easily as a tangible product.

A service like a restaurant is always varying because you pay as per the service that you receive.
You cannot taste the food in a restaurant and then order the food. You have to first order it and
then hope that it is good in taste. Thus, unlike products, services cannot be touched or felt
beforehand. They have to be first ordered and then they become tangible.
For example payment for transportation of materials like cement to a construction site.
There are 5 main characteristics of intangible products namely;

 It cannot be touched, seen, tasted, heard or felt.

 There is no precise standardization method for an intangible product.
 It cannot be patented
 There are no inventories in services
 The consumer is part of the service process because he consumes the intangible product.
Implications of characteristics of intangible products
Since an intangible product cannot be touched, seen, tasted, heard or felt, the provider must
communicate the benefits of the intangible product by drawing parallels with imagery and ideas
that are more tangible. Therefore it is necessary to add tangible elements to your intangible product
to make your marketing possible. For example the service offered by a mason in construction is
seen through the brickwork on a particular building.

Intangible products cannot be stored, for example if you are a resort owner, you have the same
rooms across the year. However, you are sure to be occupied during the peak season whereas in
other seasons your inventory of rooms will go waste. Due to its intangible nature, you cannot
reduce the inventory of a service as you wish.

Different providers for the intangible products tend to set different standards for their marketing
instruments like pricing, promotion, placement, physical evidence, process and people.

Having no patent rights, quality of the intangible product is compromised for example not all
masons can produce quality work even if there are no limitation to whoever wants to become a
mason.

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Since the consumer is part of the consumption process, either the intangible product must go to
the customer or the customer has to come to the intangible product. For example in public
transport, the client has to go to the park, airport or to the train station while for private transport,
service like uber comes to the client.

Intangible products are more difficult to evaluate, which increases the level of uncertainty and
perceived risk of consumers. The consumer is therefore never really certain of what he or she is
purchasing.

Unique to intangible products is the fact that the customer is seldom aware of being served well
only when things do not go well is the customer aware of the product’s existence. Its existence is
therefore affirmed only by its absence. This is dangerous because the customers will be aware only
of failure and of dissatisfaction, making them vulnerable to the flattery of the competitors.

Pricing of intangible products

An intangible product is only worth what customers are prepared to pay for it. The price needs to
be competitive, but this doesn’t mean you have to be the cheapest in your market. Small businesses
can compete with larger rivals by offering a more personal services in relation to the intangible
product, value-adds or better value for money. You also need to make a profit. Pricing is the only
element of the marketing mix that generates revenue, everything else represents a cost to you.
When considering the price of your intangible product, it is important to look at it from the
customer’s perspective:

Price positions you in the market place. It tells consumers where to place you in relation to your
competitors.
The more charge the more value or quality your customers will expect for their money.

This is a relative measure. If you are the most expensive provider in your market, customers will
expect you to provide a better intangible product.
Existing customers are generally less sensitive about the price of intangible products than new
customers hence a good reason to look after them well.

High vs. low pricing: Because intangible products are so difficult to evaluate in advance of the
purchase, the price can become an important decision point in the buying process. What’s
more important, the impact of the price on the decision may not be as straightforward as for goods.
Price per unit: The customization of intangible product makes it difficult to establish the
reasonable price of a unit of the intangible product.

Pricing competence: Another aspect is the fact that, more often than not, intangible products rely
heavily on abstract qualities in those that provide them, i.e. the employees of the
company. Things such as skill and expertise play a role. The logic behind pricing these
factors is rather hazy and individual.

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PROMOTION
Promotion is the way a company communicates what it does and what it can offer customers.
Tools of promoting

 Branding;
This is the process involved in creating a unique name and image for a product. This helps to
establish a significant and differentiated presence of the product in the market that attracts and
retains loyal customers

 Advertising;
This is defined as any form of paid communication or promotion for a product, service and idea.
Advertising development involves a decision across five M’s that is; Mission, Money, Message,
Media and Measurement.

Mission looks setting objectives for the advert which could be to inform, to persuade, to remind
or to reinforce. Objective has to follow the marketing strategy set by the company.
Money or budget decision for advertising should look at the stage of product life cycle, market
share, consumer base, competition and advertising frequency

Message development is further divided into four steps that s; message generation, message
evaluation and selection, message execution and social responsibility review.

Once the message has been decided the next step is to finalize the media for delivering the message.
The choice depends on reach of media, frequency and potential impact on consumer.

Advertising for different products is different. Advertising can be done using signs, brochures,
commercials, direct mailing.

 Cooperate identity;
This is a tool that articulates the organizations aims, vales and presents a sense of individuality
that can help differentiate it within its competitive environment. By effectively managing its
cooperate identity a company can build understanding and commitment among its stake holders,
help to attract and retain customers, gain support of financial markets and generate a sense of
direction and purpose

 Outreach
This is a tool that takes marketing and promotion back to its roots and focuses on human to human
connection on the basis of consumer psychology, it is a philosophy that aims to fix the damage
and confusion that all of the buzz words have caused and bring marketing back to as simple level
and the fact that it’s as simple as a connection to your consumers instead of a process of marketing
at them

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  Sales promotion;
This is an incentive tool to drive u short term sales. Sales promotion can have many objectives for
example, to grab attention of new customers, reward the existing customer, and increase
consumption of occasional users

 Public relations;
This is a tool that includes ongoing activities to ensure the company has a strong public image.
This can be done through newspapers, radio. The public relations office therefore is to handle press
releases, support product publicity, handle matters with law makers and guide management with
respect to public issues.

 Direct marketing
This is the communication through a direct channel without using any intermediaries. This can be
used to deliver product or service. It does not include advertisements places on radio or on the
internet. It includes direct mail, telemarketing, email marketing, text message marketing and social
media marketing.

Reasons of promotion
It paves way for dialogue between customer and producers whether in person or online
It helps create a first impression of the product which is of great importance in sales of that product
It helps communicate the benefits the customer will get from the product
It provides also ways to communicate to employees about the values and attributes of your product
which they can later pass on to their customers
It increases sales of the product

Characteristics of good promotion strategy

It should be two way, in other words it should pave way for communication between customer and
producer
It should communicate benefits the consumer receives from consuming the product

In case of use of social media tool, the platforms and website should always have up to date
information
The producer should always explore new channels of promotion
Advertisements should always be made where the target market is
Printed promotion material must grab the attention of the customers, be easy to read
It should be cost effective
It must gain attention of the people

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It must be appealing
Send a consistent message
Give the customer reason to choose your product over other products

Implications
Creative advertising: Due to the abstract nature of services, straightforward displays of services
are difficult.

Surrounding factors: The intangibility issue of services also compels the companies to look at
factors surrounding the service provision, such as the company image and the quality/appearance
of equipment used. Improving these factors will aid in bringing positive associations to the service
offerings.

Internal marketing: The variation in the composition of a service due to customization will also
lead to a situation where the employees themselves will have to be convinced to provide it.

Word-of-mouth: Existing customers will pass on information about their positive or negative
experience within their contact network. This effect, called word-of-mouth, should be accounted
for. Positive word-of- mouth should be facilitated and showcased in order to provide potential
customers with a credible source of knowledge about value and benefits provided.

PEOPLE.
All companies are reliant on people who run them from Frontline sales staff to the managing
director. Having the right people is essential because they are a part of your business offering as
the product/ services you are offering.
People represent the business and the image they represent can be very important and should have
a high extent of training and knowledge of the product/service concerned. The people should be
well trained to limit the skill gaps in the marketing department. When you provide excellent
customer service, you create a positive experience for your customers and in doing so you market
your brand to them in turn existing customers may spread the word about your excellent service
and you can win referrals because customers tell each other about something good they have
experienced.

You must give your business a competitive advantage by recruiting the right people and training
your staff to develop their skills and making sure you motivate them to retain the good staff.
Superior after sales services and advice adds value to your offering and can give you a competitive
edge. These services will probably become more important than price for many customers over
time.

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PLACE
Appropriate location:

Choosing appropriate locations for the premises at which the service is performed can be an
important ingredient in marketing the service offerings of the company.

The intangible product must be available in the right place, at the right time and in the right quality,
while keeping the prices to an acceptable level. The place where customers get a service, and the
means of distributing one’s product to that place, must be appropriate and convenient for the
customer. Customer surveys show that delivery performance is one of the most important criteria
when choosing a service provider.

The image of the neighborhood, the distribution of facilities to provide ease of access to target
consumer groups, vicinity to public transport, etc., are factors that can improve the way the services
are perceived by the customers.

AGENTS (placement)
When agents come into the picture as a sales channel, further demands are put on the managerial
skills related to marketing.

If an agent handles the contact with the customers, direct control over many of the hitherto
discussed implications is lost. Instead, a framework has to be put into place that makes sure that
all agents live up to the standards and values emphasized by the company. Even one rotten apple
in the basket can ruin everything in extreme cases. In this case, prevention is usually easier and
less costly than damage control.

PHYSICAL EVIDENCE
Traditionally, market considerations were known as the 4Ps and these are price, product, place and
promotion. But later on other three were thought of and found to be working, the two of these are
people and process as described above. The third is physical evidence, and hence the7Ps.

Choosing a familiar product or service is risky for the consumer, because they don’t know how
good it will be until after purchase. You can reduce this uncertainty by helping potential customers
see what they are buying

A clean tidy and well decorated reception area or home page is reassuring. If your digital or
physical promises aren’t up to scratch why would the customer think your service is?

The physical evidence demonstrated by an organization must confirm the assumptions of the
customer. The financial services product will need to be the delivered in form of setting while a
children’s birthday entertainment company should adopt a more relaxed approach

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Some company’s engage customers and ask for their feedback, so they can develop reference
materials. New customers can then see these testimonials and are more likely to purchase with
confidence.

Although the customer cannot experience the service before purchase, he or she can talk to other
people of the service. Their testimony is credible, because their views do not come from the
company. Alternatively, well shot videos testimonials are reviews on independent websites will
and authenticity

PROCESS
There is a number of perceptions of the concept of process within the business and marketing
literature. Processes include direct activities and indirect activities. Direct activities add value at
the customer interface as the consumer experiences the service. Many processes are supported by
indirect activities, often known as back office activities, which support the service before, during
and after it has been consumed.

Process is an element of service that sees the customer experiencing an organization’s offering. Its
best viewed as something that your customer participates in at different points in time.

Many customers no longer simply buy a product of service; they invest in an entire experience that
starts from the moment they discover your company and lasts through to purchase and beyond.

That means the process of delivering the service and the behavior of those who deliver it are crucial
to customer satisfaction. A user friendly internet experience, waiting times, the information given
to customers and the helpfulness of staff are vital to keep customers happy.
Customers are not interested in the detail of how your business runs, just that the system works.
However, they may want reassurance they are buying from a reputable or ‘authentic’ supplier.

Remember the value of a good first impression. Identify where the customers initially come into
contact with your company; whether online or offline and ensure the process there from encounter
to purchase is seamless.
Ensure that your systems are designed for the customer’s benefit not the company’s convenience.

Do customers have to wait? Are they kept informed? Is your website fast enough and available on
the right devices? Are your people helpful? Is your service efficiently carried out? Do your staff
interest in a manner appropriate to your pricing?

Customers trying to reach your company by phone are vital source of income and returning value;
but so often they are left on hold. Many will give up, go elsewhere and tell their friends not to use
your company just because of the poor process.

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GROUP SEVEN
TOPIC: PROFESSIONAL MARKETING
INTRODUCTION
What is marketing?

According to the American Marketing Association, one of the world’s largest associations of
professional marketers, “Marketing is the process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy
individual and organizational objectives.”

This definition takes into account that marketing is a managerial process involving “planning and
executing” and that there are four main areas of marketing activities, sometimes known as the
“4 Ps.” These are the conception of a product, followed by its pricing, promotion and distribution.

Moreover, marketing can pertain to any offering (ideas, goods and services) and, lastly, the goal
of marketing is to create satisfactory exchanges among willing parties.

Product
A product refers to an item that satisfies the consumer's needs or wants. Products may be tangible
(goods) or intangible (services, ideas or experiences).

The product aspects of marketing deal with the specifications of the actual goods or services, and
how it relates to the end-user's needs and wants. The scope of a product generally includes
supporting elements such as warranties, guarantees, and support.

Pricing
This refers to the process of setting a price for a product, including discounts. The price need not
be monetary; it can simply be what is exchanged for the product or services, e.g. time, energy, or
attention. Methods of setting prices optimally are in the domain of pricing science.

Placement (or distribution)

This refers to how the product gets to the customer; for example, point-of-sale placement or
retailing. This third P has also sometimes been called Place, referring to the channel by which a
product or service is sold (e.g. online vs. retail), which geographic region or industry, to which
segment (young adults, families, business people), etc. also referring to how the environment in
which the product is sold in can affect sales.

Promotion
This includes advertising, sales promotion, including promotional education, publicity, and
personal selling. Branding refers to the various methods of promoting the product, brand, or
company

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PROFESSIONAL MARKETING.
Professional Marketing is the determination of marketing needs of a firm through a marketing
professional who assists in developing, implementing, and maintaining marketing plans; and help
develop promotional, pricing, product development, advertising, and public relations strategies to
balance the needs of the firm and ensure customer satisfaction.

PROFESSIONAL MARKETING COMPETECIENCES.

Updated and re-released in 2016, the Professional Marketing Competencies are a framework of
marketing abilities which provides a guide to the skills and behaviors that are expected of
professional marketers at varying levels of proficiency. (Marketing T. C., 1996-2017)
The Competencies give individuals and organizations the basis on which to assess the abilities of
a capable and competent marketer.

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The competencies are divided into

 Core
 Technical
 Behavioral. (Marketing T. C., 1996-2017)
CORE COMPETIENCES

 Insights
This core capability sits at the heart of marketing and plays an essential role in developing and
using deep insights to create marketing strategies and deliver solutions that lead to the achievement
of business goals and sustainable organisational performance.

 Championing the Customer

This core capability sits at the heart of the marketer’s role in uniting the organisation to meet
customer needs and achieve all business goals, identifying and leading change across the
organisation for the benefit of the customer.

 Strategy
This core capability plays an essential role in both informing corporate strategy from a marketing
perspective and translating this into effective marketing plans that contribute to the achievement
of business.

TECHNICAL COMPETENCIES
The technical competencies identify the knowledge and skills required in specific areas of
marketing, reflecting the variation in career progression available in this field. (Marketing T. C.,
1996-2017)

 Brand
This technical capability is about defining brand strategy and positioning, managing the brand and
providing clear brand guidelines for its protection, and tracking and measuring its performance to
inform future activity

 Integrated Marketing Communications

This technical capability is about the integration of marketing communications strategy with
business strategy and the use of both physical and digital communications tools in an integrated
way.

 Digital Integration
This technical capability is about influencing the development of organisational digital strategy in
terms of its impact on structure, culture and strategic plans, and implementing digital
transformation in line with the needs of the customer

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  Product management
This technical capability deals with the planning, forecasting, production and marketing of a
product, proposition or portfolio of products, throughout a product lifecycle.

 Monitoring and measuring effectiveness

This technical capability is about identifying appropriate metrics and ensuring that all marketing
activities, whether generated by the organization or the customer, are monitored on an ongoing
basis and measured for their effectiveness. Data and insights produced are then interpreted and
used to achieve improvements in the future.

 Customer Experience
This technical capability is about defining what the customer experience should be in order to meet
corporate objectives and achieve customer advocacy. It is also about the delivery of activities that
deliver the desired customer experience through effective customer journeys.

 Partnership and marketing

This technical capability is about developing and managing appropriate channels and partners to
meet changing customer needs and business goals, and incorporating members of the channel to
market as partners.

 Risk and reputation management.

This technical capability is about managing the impact of risk, governance and compliance on
corporate reputation, through effective monitoring and application of relevant legislation and
regulation. It is also about managing reputation through the alignment of people, processes and
brands.

BEHAVIOURAL COMPETIENCES.
These competencies describe the behaviors that marketing professionals need to be able to
demonstrate in order to do their jobs efficiently and effectively and contribute to the achievement
of business goals.

 Creative
The ability to use imagination and new ideas to produce solutions (Marketing T. C., 1996-2017)

 Commercially aware
The ability to use business acumen from experience or learning in a day-to-day work situation

 Collaborative
The ability to work with others to the benefit of the business and its goals

 Influencing
The ability to actively promote ideas and initiatives both internally and externally

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  Inspiring
The ability to inspire and motivate others towards a common vision

 Challenging
The ability to challenge the status quo and drive change in a business environment

 Entrepreneurial
The ability to think ahead to spot or create opportunities and maximise them

 Financially literate
The ability to use financial calculations to justify, manage and approve expenditure and investment

 Responsible
The ability to work in a way that considers its impact on other people, organisational goals and the
wider environment

 Innovative
The ability formulate new ideas or to adapt existing ideas in a new or unexpected way to solve
problems.

DIMENSIONS OF PROFESSIONAL SERVICES.

Professional services are occupations in the economy requiring high skills and special training in
the arts or sciences. Some of these occupations include lawyers, accountants, management
consultants, architects, engineers, dentists, doctors, and other professionals. Some professions
require one to attain status by achieving one or more of either skill, knowledge or certain level of
education, experience, reputation, capacity, ethics, and creativity.

However for a professional company to remain relevant in this ever competitive economy, one
must do extensive marketing to maintain their clientele and build their practices.

In order to ensure extensive and exhaustive professional marketing, companies should ensure that
the following factors also known as dimensions are met in their full capacity.

 Sharing knowledge
This could be one of the greatest marketing tools there is. By providing knowledge and information
to those concerned, you’re not only educating people, answering their questions and providing
solutions for commonly experienced problems in your industry but you’re also establishing
yourself to be trusted, closing a gap to the people in the industry as a way to improve your company
and the people concerned as well.

The public is more inclined to believe not only an expert but also an expert who gives them reason
to believe that they are who they say they are. Sharing knowledge not only enhances the corporate
reputation but also the reputation of the expert.

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  Physical facilities
Physical environment not only plays an important role in marketing the services but also provides
a source of identity in terms of location for specific services in an area. Physical facilities give an
idea of the expected service quality and aid the customer in decision making.

 Complaint management
It is important for service providers to get feedback from their customers, particularly after an
unfavorable service experience. This is important to maintain a healthy relationship between the
client and the service provider. In order to have proper management, the communication system
should be especially clear and convenient for the client. Such Information from customers helps
professional and business services clients make smarter decisions in the future.

 Price
The price of a service being offered plays an important role in marketing the service, as it’s the
first question the potential customer asks once he knows the field of services a given company
provides. It’s always advisable to discuss the price up front. It’s usually better to know your
potential customer's perception of the value of your work is low (and maybe lower than your cost)
in advance of you doing it. Similarly have conversations with the client to understand their position
and focus on what is relevant to them.

 Expert Competence
This involves possession of the required skills and knowledge to perform the service, skill and
knowledge of the contact personnel and research capability of the organization or service
providers.

 Product information Quality

Product information provides many benefits, from helping the sales team make their quotas to
helping your company’s systems function properly. Your company speeds up the time it takes to
bring a product to market, decreases the time it takes to get new products placed in catalogs and
websites, improves lead quality and increases revenue through high quality product information.
Everyone from your designers to your customers need access to this information, so it’s critical to
place a high priority on developing better product information for your business. The correct data
will drive customer acquisition, incremental sales and contribute towards increasing the lifetime
value of a customer. The wrong data can impact brand reputation, growth and see an advertiser
lose customers to a more savvy competitor. Product data must be comprehensive.

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INTERNATIONAL PROFFESSIONAL STANDARDS.
These are standards as per the Code of Professional Standards. (Marketing T. C., 2012)

1. A member shall at all times conduct himself with integrity in such a way as to bring credit
to the profession of marketing and the Chattered Institute of Marketing.
2. A member shall not by any unfair or unprofessional practice injure the business, reputation
or interest of any other member of the institute.
3. Members shall, at all times, act honestly in their professional dealings with customer and
clients, employers and employees.
4. A member shall not, knowingly or recklessly, disseminate any false or miss leading
information either o is own behalf or on behalf of anyone else.
5. A member shall keep abreast of current marketing practice and act competently and
diligently and be encouraged to register the Institute’s scheme of Continuing Professional
Development.
6. A member shall, at all times seek avoid conflicts of interest and shall make prior voluntary
and full disclosure to all parties concerned of all matters that may arise to any such conflict.
Where conflict arises, a member must withdraw prior to the work commencing.
7. A member shall keep business information confidential except: from those persons entitled
to receive it, where it breaches this code and where it’s illegal to do so.
8. A member shall promote and seek business in a professional and ethical manner.
9. A member shall observe the requirements of all other codes of practice which may from
time to time have any relevance to the practice of marketing in so far as such requirements
do not conflict with any provisions of this code, or the Institutes Royal Charter and by-
laws; a list of such codes being obtainable from the Institutes Head of Office.
10. Member shall not hold themselves as having the Institute’s endorsement in connection with
an activity unless the Institutes prior written approval has been obtained first.
11. A member shall not use any funds derived from the Institute for any purpose which doesn’t
fall within the powers and obligations contained in the Constitution and Member Group
Guide, and which doesn’t fully comply with this code.
12. A member have due regard for, and comply with, all the relevant laws of the country in
which they are operating.
13. A member who knowingly causes or permits any other person or organisation to be in
substantial breach of this code or who is a party to such a breach such himself be guilty of
such breach.
14. A member shall observe this code of professional standards as it may be expanded and
annotated and published from time to time by the Constitution and Ethics Committee.

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GOVERNEMENT AND PRIVATE PRACTICES
Advertising, marketing and PR in Uganda is a developing but identifiable industry. There are
numerous firms operating in the sector including the Ugandan firm E-World Marketing
Consultancy and Nessigroup which operates across East Africa. Worldwide advertising brand
WPP has five subsidiary firms in the country. (Uganda, 2017)
GOVERNMENT PROFESSIONAL MARKETING.
Government organizations can engage in marketing according to this definition. When a
government department develops a “product” – be it a physical product such as an ocean chart, an
idea such as “don’t start smoking,” or the provision of a service such as the upkeep of a national
park for visitors – and then prices, promotes and distributes it to a targeted audience to promote an
exchange, marketing is taking place.

TYPES OF GOVERNMENT MARKETING.

Marketing of products and services.

It is important to note that the marketing of products and services by government is similar to such
marketing in the private sector. (Madill, 2003)
Social marketing

Social marketing – marketing that attempts to change the behaviours and attitudes of targeted
groups – is the second type of marketing commonly practiced by government organizations.
(Madill, 2003) e.g. When the Health Sector of Uganda develops an advertising campaign intended
to persuade young Ugandans not to start smoking, it is engaging in social marketing.
Policy marketing

This can also be termed as “policy marketing.” This typically occurs when governments launch
marketing programs to convince specific sectors of society to accept their policies e.g when
government attempted to convince people to get National ID’s through skits on television etc.
De-marketing or Don’t-use our-programs marketing

De-marketing campaigns are launched by governments to advise and/or persuade targeted groups
not to use government programs that have been available to them in the past. (Madill, 2003)

PRIVATE PROFESSIONAL MARKETING.

Private practice

The private sector is that part of the economy, sometimes referred to as the citizen sector, which
is run by private individuals or groups, usually as a means of enterprise for profit, and is not
controlled by the state (areas of the economy controlled by the state being referred to as the public
sector).

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The private sector employs most of the workforce in some countries. It is legally regulated by the
state.

The private sector is usually composed of organizations that are privately owned and not part of
the government. These usually includes corporations (both profit and non-profit), partnerships, and
charities. For example, retail stores, credit unions, and local businesses will operate in the private
sector.

Types of Marketing in Private Sector

The private sector has considerable experience with tools aimed at influencing consumer choice,
and some of these tools may also be applicable to public efforts to promote healthier eating. This
phase aims at identifying success stories and good practices in marketing actions within the food
sector that can possibly be transferred to policy applications.
This will be pursued through 3 specific sub-objectives:

 Identification of a set of marketing techniques that have proven useful for influencing
consumer food choice
 An evaluation of their effectiveness and transferability to social marketing in the healthy
eating area
 Specification of conditions for transfer of these techniques
1. Promotional Strategies
Private organization and sector use many promotional strategies to target there customer and
increase their revenues. Promotional strategy is another tool to increase the sale and also to
introduce its product to the market and to the customer. Promotional strategies are also used to
achieve the economies of the scale.

2. Online Marketing Strategies

Today’s 21st century is all about marketing and advertising the products and services. Social media
is a very big shot now a days like Facebook, Twitter, Orkut and My Space etc. Private companies
are using social and other online marketing sources very well for the development of the services
and product.

3. Aggressive Advertising
Private Sector believes in the aggressive marketing, and flow of the product and services. They
want to make their product more visible and accessible to the people. The best example is of the
Q Mobile in the Pakistan. They used aggressive marketing technique to attain the market share.

4. Use to Electronic and print Media

Electronic and print media is also used by the Private sector very well. Sometimes the private
organizations also hold their share in the media cells. Private organizations are also using it for
their marketing.

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 5. Societal Marketing
Private organizations have looked and studied a lot. They have started a societal marketing concept
in which the work something for the society and then advertise it. It is also a channel of Green
Marketing concept.

Challenges in Private Sector Marketing

Private Sector Development (PSD) is a strategy for promoting economic growth and reducing
poverty in developing countries by building private enterprises, membership organizations to
represent them, and competitive markets that are stronger and more inclusive.
Business Environment Reforms

Where entrepreneurship and markets are stifled by inappropriate regulation, excessive taxation,
lack of fair competition, lack of voice or an unstable policy environment, growth and poverty
reduction are likely to suffer. Typically, donors first fund business environment analyses, such as
the World Bank's Doing Business Reports, identifying the major constraints to business growth.
Business linkage & Value Chain Development

A value chain is a series of activities that enterprises undertake when they produce a good or
service, adding value to the inputs at each stage. Value Chain Development thus seeks to maximize
the value of any given type of product, whilst incurring the least possible cost to the producers, in
the places along the production chain that give the most benefit to poor people.
Business Culture Relationship

Another thing that becomes a challenge for the marketer to market their product is to build the
cultural relationship of that product with the society. Cultural importance in the marketing
describes the success of the marketing priorities of the firm. Marketer face the major problem in
the cultural understanding. While looking at the Pakistan, the Pakistan is the diversified nation
many cultures prevails there. So marketers have to think very smartly to overcome that and to
cover all aspects.
Administrative affairs with the Government

While dealing with the marketing the marketer have to go side by side with the Government
authorities. There are many challenges while having the administrative affairs with the
gsovernment. Marketers are bound to work according to their rules n regulations.

The marketer job is to cover all the obstacles he/she faces during their work and make the
best out of it. Every negative have the positive as well. Marketing in the private sector makes the
100% use of it. These challenges faced by the marketer can also be the positives if he/she is able
to come out if it.

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Constraints in Public & Private Sector Marketing
The public sector is constrained in terms of the services it is obliged to provide and hence may be
unable to implement a customer-led approach even if this is desired Constraints may include:
Legislative restrictions

A legislature is a decision-making organization, usually associated with national government that

has the power to enact, amend and repeal laws. Legislatures observe and steer governing actions
and usually have exclusive authority to amend the budget or budgets involved in the process.
Political philosophies

Political parties have their own motives behind Public and Private Sector. So the Philosophies of
the Political party also affect it.
Lack of physical resources

Physical Resources also affects the marketing. Physically certain things need to be looked. Like
geographically things need to be proved and should be applicable.
Lack of financial resources

Another factor that affects the marketing is the Financial Resources of Public and Private
organizations. Generally it is observed that Public Organizations are not willing to pay for the
Marketing as compared to the Private organizations, they invest heavy on the marketing and thus
there WOM becomes very strong in the minds of the People.

DIFFERENCES.
In the private sector, rather little demarketing occurs, since businesses engage primarily in
promoting the consumption of goods and services whereas DE marketing is popular in government
marketing.

Government faces resistance when marketing because government is not a business and that it is
inappropriate to run government like business while private sector has a receptive clientele since
they run as businesses.

In the private sector, marketing is a clear career path with positions ranging from entry level to
senior vice-presidential levels whereas in the public sector, individuals are not typically hired
because they have strong marketing skills, and there is no established marketing career path.

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