MARKETING

*Definitions of Marketing:

Important for external

• Marketing is the process of identifying present consumers wants and needs and
anticipating future consumers wants and needs, then analyzing and interpreting
this information in order to design products meeting customers’ requirements in
the future in a profitable manner.
• Marketing is to launch the right product for the right segment of consumers at
the right price, in the right place, and using the right promotional strategies.

*The relationship between the marketing departments and the remaining of the
business’s departments:

• None of the business’s departments operate solely neither on separate

islands. All business departments therefore collaborate and operate line in
line to achieving the overall objective of the business organization.
• The marketing department has to communicate and collaborate with the
finance department for instance as marketing activities and the preparation of
an appropriate marketing mix needs finance. Hence the marketing department
will have to organize the provision of such resources with the advice and the
help of the finance and accounting department.
• The marketing department communicates and coordinates with the HRM
department as well for example the marketing department might need extra
sales people to market the products and advertise those products, therefore it
has to contact the HRM department to see the availability of the needed staff
with the needed skills.
• The marketing department will as well coordinate and communicate with the
production department as the marketing department will be responsible for
the conduct of the marketing research and for identifying the present and the
future consumers’ wants and needs. The results of this research will be sent
to the production department to produce a good that meets customers
satisfaction.

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*Definition of Market:

A market is any place where a large number of consumers or customers meet with
suppliers or sellers in order to exchange money with products. A market doesn’t have
to be at one place, it might be face to face, online shopping, or using the fax/telephone
to order.

❖ Markets might be local serving a certain area, for example a dry cleaning outlet.
❖ A market might be national serving the country as a whole, for example
newspapers.
❖ A market can be international serving different markets at different countries; for
example McDonald’s.

*What are the main features / characteristics of the market/markets where businesses
operate?

1. Market size
2. Market growth
3. Market share

*Definition of Market Growth:

Some markets might be growing and others might be declining according to PEST

Factors. The market growth is measured by the percentage difference in the market
size over a period of a year. This could be based on market value or volume. For
example if the sales value increase form 100 000 $ to 200 000 $ then the difference is
100% increase in the market size.

*Definition of Market size:

The size of the market is either measured through the volume of sales ( number
of units sold) or through the value of sales ( price * quantity). Attention must be
taken into considerations when comparing the size of different businesses
according to value and volume as some businesses might be small in size
according to their number if units sold but large according to the value of their
sales.

*Definition of market share:

Important for the external

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The market share concept shows how much share the business holds within the
market, it shows the businesses sales compared to the total sales of the market
as a percentage. The market share concept shows how much foothold the
business has within the market. The larger the Business’s market share, this
business will be considered a market leader whereas other businesses with
smaller market share will be considered as market followers.

*What is meant by a market leader?

Important for the external

A Market Leader is the business with the largest market share; this is the
business dominating the market setting the pace and determining usually the
price and the strategies in the market.

*What are the benefits of being a market leader?

1. Market leaders have the highest proportion of sales in the market; this
would lead to profit maximization.
2. Market leaders have the highest sales in the market thus they enjoy from
economies of scale and a lower unit cost.
3. Market leaders enjoy a good standing in its own market and a marketing
advantage.

Yet

1. The market share is calculated either according to the value of sales

or the volume of sales so a business might be a market leader
according to one of the criterions whereas if the criterion is changed,
the position of the business in the market will change as well.
2. Time changes and thus the result of market share changes, a business
might be market leader now but after a month figures change and the
business’s position in the market will change as well.
3. The type of products sold might influence the calculations as well.

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*What is meant by a market follower?

Market Followers are businesses with lower market share compared to the
market leader. Market followers follow market leaders in terms of the price.

Market leaders try to set strategies in order to remain market leaders. Market
followers, on the other hand, bench mark (compare themselves) with market
leaders in order to set strategies to increase their market share and become
market leaders themselves. But this market share is subjective to the time
element.

*What is meant by Market oriented businesses & Product oriented businesses:

Important for the external

We have to differentiate between these two concepts

1- Market Oriented/ led/orientated businesses:

Those are Businesses which are led by the market, they concentrate on
the market and they take into account customers wants and needs. This is
why most market oriented businesses are of success as they are adjusted
according to customer’s wants and needs. On the other hand, not all
market led businesses are of success as some external uncontrollable
factors might result in the products failure. (I.e. PEST factors)

➔ These are much better businesses as they take into consideration

market realities as well as customers’ wants and needs.
➔ The businesses which are market led are usually more successful than
product oriented businesses.
➔ Being market led means that the business is less risky and it will to
some extent assure that it will sell its products as they are more likely
to meet cliental expectations in comparison to product led businesses
➔ Businesses that are market led are more competitive and are able to
respond to competitors quickly as they are led by the market and they
have regularly updated information about the market.

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 ➔ Yet being market led and conducting market research is expensive and
costly.
➔ As well some market led businesses might fail as although they do
conduct market research, yet this might be out dated or inaccurate or
consumers’ trends and demand might be changing.
➔ PEST factors might affect consumers demand and thus affect the
results of the market research negatively.

2- Product Oriented /led/orientated Businesses:

Those are businesses which concentrate on the product itself and on the
production process rather than taking into consideration customers’ wants
and needs. They usually fail as they are not adjusting their products
according to customers’ needs. What is more, the growth in globalization
and the international trade means that the business must be market led in
order to stay competitive. On the other hand, not all product oriented
businesses are of failure. Such businesses might invest in R&D (research
and development) where they concentrate on the product itself and yet
they are successful because they produce unique products.
E.g.: Agricultural businesses and other businesses which invests in R&D.
• Product led businesses might successed if they operate within an
industry where the level of change and the speed of change are low.
• Businesses usually have control over their activities.
• Yet being product led means that the business is not designing a
product that meets consumers’ expectations, this might mean failure
of the business.
• Other competitors might be market led and they might produce
products that are catered according to consumers’ preferences, this
will disadvantage the business. ( dis)
• As well product led businesses will be obligated to spend a lot of
money on research and development (R&D) which is costly and
doesn’t even take consumers preferences into account.

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*What is meant by commercial marketing?

This refers to the marketing, making, selling and promoting products (goods and
services) that meet consumers’ wants and needs. Usually market research is
carried by businesses to identify current and predict future consumers’
preferences. The marketing mix is then tailored to the needs of the consumers
(targeted audience) and the nature of the product. Commercial marketing is
aimed at making profits and is usually done by profit making enterprises
(businesses).

*What is meant by social marketing?

This is an approach to marketing where businesses/ firms use and utilize the
concepts, strategies and techniques of commercial marketing for the benefit of
the society and for influencing consumers’ behavior to benefit the society and
the well being of the community. Example: Anti smoking campaigns.

Usually NPO’s and NGO’s (non for profit social enterprises) use social
marketing.

If businesses (for profit social enterprises and commercial businesses) use

social marketing then this will improve their ethical stand and their CSR
approach and they can sell at high justified prices as their products benefit the
society.

*Marketing in non for profit organizations/ what are the objectives of marketing
in NPO’s (nonprofit social enterprises) and how does those objectives differ in
profit making organizations? :

Important for the external

Marketing objectives are the objectives set by the marketing department and
achieved via marketing strategies and tactics. The marketing objectives must be
in line with the overall objectives of the business organization as a whole. Those
objectives might relate to: increase market share, increase market size,
becoming a market leader, increasing brand awareness, entering into new
markets, targeting new segments in the market, and launching new products. For
profit businesses use marketing techniques, strategies and tactics in order to

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identify current consumers wants and needs and to predict future consumers
wants and needs and they aim to design, launch and introduce products that
meet those wants and needs in a profitable manner, hence the final objective is
to make profits based on fulfilling consumers preferences and predicting future
needs. Hence they use commercial marketing.

In the past, NGOs nor NPO’s did not use to hire specialist marketing managers
or to even market its products. But due to globalization and due to the increased
intense competition especially from large international lotteries, these NGOs
/NPO’s have adopted marketing techniques such as hiring specialist marketing
managers and conducting additional activities to raise funds such as launch
meetings or breakfast meetings. What is more, some NGOs/NPO’s subcontract
or outsource the marketing activities to specialist marketing agencies. All of this
is done by NGOs/NPO’s to market the service that it provides, and to market the
cause that it tries to promote (social marketing), and to promote the interests
that it tries to preserve. NGOs /NPO’s do not promote themselves for prestige or
reputation unlike private profit making businesses do. These NGOs/NPO’s
market their services for good causes and for the well being of the society and
mainly to achieve social wellness and social benefits. Different marketing
campaigns conducted by those NGO’s and NPO’s are done in order to raise
donations to make income which is then used to cover its costs. Any surplus is
then used to help cover its costs. If NGOs/NPO’s decided to expand and grow
this will be to serve its main aim of promoting its good cause. This expansion
won't be for prestige unlike private profit making businesses. NGOs/ NPO’s
operate in the private sector enjoying limited liability and unlimited life, and they
are increasing in importance since they are filling a gap between the private and
the public sector.

*Note: Marketing objectives, strategies and practices change according to the

PEST factors and businesses continuously study the market and the changes in
consumer behavior and they must adapt their marketing mixes according to
demand patterns and consumers preferences.

*What is the difference between marketing goods and marketing services?

Important for the external

➢ Goods:
1. Tangible or touchable products e.g. tables, chairs, computers.
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 2. Can be stored.
3. Can be separated from the seller.
4. Can be touched and tried/tested.
5. Products might be homogenous (identical especially if flow production
is used).
6. The ownership actually transfers from the seller to the buyer (seller →
consumer).

➢ Services:
1. Intangible or untouchable things that are provided by other businesses
by other people e.g. health care, education, insurance, telecommunication.
2. Can’t be stored.
3. Can be separated from the person providing the service.
4. It is not touched.
5. Services are not identical even if the same person provides them (not
homogenous).
6. The ownership of the services cannot be actually transformed.

Marketing goods → 4 P’s: Product and packaging, Price, Place and

Promotion.
Marketing services → extra 3 P’s: Process, Physical Evidence
(surrounding facilities) and People (people working, their skills, their
communication abilities and their looks).

The difference between marketing goods and marketing services is that

the marketing of goods takes into consideration the 4P’s, while the
marketing of services takes into consideration the extra 3P’s. People
mean the skills of those who are providing the service; their experience
and whether they are trained or not. Physical evidence refers to the
surroundings; the décor and it also refers to the facilities provided by the
business, physical evidence also includes the location of the business.
Process stands for the way the service is provided, this also includes the
method of payment and the time to process the service . In reality,

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businesses take the whole 7P’s in addition to packaging (physical
container) when marketing both the goods and services.