B203a Final Material - Omar Abu-Jbara

B203a – Final Material – Omar Abu-Jbara
Author: Omar Abu-Jbara
Course Code: B203a
Course Title: Business Functions in Context I
Content: Final material
[Marketing; 1,2,3,4,6,8,10,11,12,13]
[Information Management; 1,4,5]
[Chapter Numbers are based on the old edition books]
[‫]أرقام الشباتر فقط مأخوذة من نسخ الكتب القديمة‬
For any inquiry or TMA assistance do not hesitate to contact me.
.‫ألي استفسار او مساعده بحل الواجب يرجى التواصل عن طريق االيميل او الواتس‬
Contact Details: E: oabujbara@gmail.com
W: +965-50620600
Author: Omar Abu-Jbara - E: oabujbara@gmail.com - W: +965-50620600
Marketing - Chapter 1
Marketing Definition
Marketing is the sum of all the activities involved in planning, pricing, promoting,
distributing, and selling of goods and services to satisfy consumers need and want. The
marketing activities occur in a dynamic environment and that such activities are performed
by individuals as well as organizations. The goal from marketing is to satisfy targeted
customers, seeking their loyalty in a way that adds value for the organization.
The Evolution of the Marketing Concept

The marketing concept may seem an obvious approach to running a business. However,
businessmen have not believed that the best way to make profit is to satisfy customers.
A- Production Era 1900: period of mass production following industrialization;

the industrial revolution through; Electricity, railways, the division of labor, mass production
made it possible to manufacture products more efficiently. With new technology and new
ways of using labor, products poured into the marketplace, where consumer demand for
manufactured goods was strong. This production orientation encouraged by the scientific
management movement that supported the structured jobs and pay based on output.
B- Sales Era 1920: period of emphasizing sales person into the business strategy;
the strong consumer demand subsided. Companies viewed sales as the major means of
increasing profits. As a result this period came to have a sales orientation. Business people
believed that the most important marketing activities were personal selling and advertising.
C- Marketing Era1950: period of identifying and satisfying the customers’ needs;

businessmen began to recognize that efficient production and wide promotion of products
did not guarantee that customers would buy them. Companies realized the importance of
knowing customers’ needs firstly then produce it, rather than making products first and then
trying to change customer’s needs. Companies entered into the era of customer orientation.
D- Relationship Marketing Era 1990: period of developing relationship with customers;

The priority for marketing was to identify customer needs, determine priority target markets
and achieve sales through marketing programs. The focus was on the individual transaction.
It should be recognized that long term success depend on such transactions, but also on
maintain a customer’s loyalty and on repeatedly gaining sales from existing customers which
require ongoing supportive and tailored relationship building marketing programmers.
Relationship marketing refers to long-term, mutually beneficial arrangements in which both

the buyer and seller focus on value enhancement through the creation of more satisfying
exchanges. Relationship marketing extends the customer’s confidence, the buyer’s trust,
and increases the understanding of the customer’s needs. Eventually this interaction
becomes a solid relationship that allows for cooperation and mutual dependency.
As this era developed it has been suggested that beside the importance of customers’
relationships, it’s also important to understand the relationships with the suppliers, agents,
distributors, financial advisers and influencers, to ensure their support and resources.
Hence, this ear is moving from transaction-based towards nurturing ongoing relationships.
2
Marketing Mix Development
Traditionally, the marketing mix was believed to consist of four major components: product,
place, promotion and price “4 Ps”.Increasingly a fifth component is viewed as people. These
components are called “marketing mix variables‟. They often viewed as controllable
variables because they can be changed but there are limits to such change. The primary goal
of marketing manager is create & maintain a marketing mix that satisfies consumers’ needs.
A- The Product variable;

The product variable is the aspect of the marketing mix that deals with researching
consumers‟ product wants and designing a product with the desired characteristics. It
involves the creation or alteration of packaging and brand names, and includes decisions
about guarantees, repair services and customer support.
It’s important because it directly involve creating products and services that satisfy
consumers; needs and wants. To maintain a satisfying set of products that will help an
organization achieve its goals, a marketer must be able to develop new products, modify
existing ones and eliminate those that no longer satisfy buyers or yield acceptable profits.
B- The Place/distribution variable;

The place variable is the aspect of the marketing mix that deals with making products
available in the quantities desired to as many customers as possible, and to keep the total
inventory, transport and storage costs as low as possible.
Marketing manager may become involve in selecting and motivating intermediaries
(wholesalers, retailers and dealers), establishing and maintaining inventory control
procedures, and developing and managing transport and storage systems
C- The Promotion variable;

The promotion variable is the aspect of the marketing mix that relates to communication
activities that are used to inform one or more groups of people about organization products.
Promotion increases public awareness of an organization and of new or existing products
and educates consumers about product features. It may be also used to keep interest strong
in an established product that has been available for decade.
D- The Price variable;

The price variable is the aspect of the marketing mix that related to activities associated with
establishing pricing policies and determining product prices.
Price is a critical component of the marketing mix because consumers and business
customers are concerned about the value obtained in an exchange. Price is often used as a
competitive tool; in fact, extremely intense price competition sometimes leads to price wars.
E- The People variable;

The people variable is the aspect of the marketing mix that reflect the level of customer
service, advice, sales support and after-sales back-up required, involving recruitment
policies, training, retention and motivation of key personnel.
Marketers of services include people as a core element, along with other ingredients. As
marketers, they manipulate the rest of the marketing mix. As intermediaries in the
marketing channel, they help make products and services available to the market-place. As
consumers or organizational purchasers, they create the need for the field of marketing.
3
Marketing Strategy Defined

Marketing strategy: The best uses of an organization’s resources to achieve its marketing
objects. It state which opportunities to pursue, indicate specific target markets to address,
and identifies the types of competitive advantage that are to be developed and exploited.
The strategy requires clear objectives and goals; the right customers must be targeted more
effectively than they are by competitors, and associated marketing mixes should be
developed as marketing programs to implement the marketing strategy successfully.
A strategic market plan: is an outline of the methods and resources required to achieve an
organization’s goals within a specific target market. It takes into account not only marketing
but also the functional aspects such as production, IT, logistics, finance and personnel.
Strategic Business Unit (SBU): is division, product line or other profit centre within a parent
company. Each sells a distinct set of products to an identifiable group of customers, and
each competes with a well-defined set of competitors. Each SBU revenue, costs, investments
and strategic plans can be separated from those of parent company and evaluated.
A strategic marketing planning: is a process that yields a marketing strategy that is the
framework for a marketing plan. The planning process should be guided by a marketing
oriented culture and processes in the organization. It’s a plan of all aspects of firm strategy.
Marketing plan: includes the framework and entire set of marketing activities to be
performed; it is the written document or blueprint for specifying, implementing and
controlling an organization’s marketing activities and marketing mixes. It deals primarily with
implementing the marketing strategy as it relates to target markets and marketing
programs. It states which are priority target markets and details the marketing programs,
specifying also timeframes, budgets and responsibilities.
Marketing programme: a marketer’s marketing mix activities and implementation processes

designed to operationalise the marketing strategy. Marketing programmes centred on a
detailed marketing mix specification and include internal controls and procedures to ensure
that they are implemented effectively.
Organizational Mission, Goals and Corporate Strategy

Mission: is the broad, long-term task that the organization wants to accomplish. A
company’s organizational goal should be derived from its mission. Organizational mission
indicates what is the business area of activity and what should this be.
Creating or revising a mission statement is very difficult because the complex variables that
must be examined. However, Mission statement can benefit the organization in five ways:
1- Give a clear purpose and direction, keeping it on track and preventing it from drifting.
2- Describes the organization unique aims that help to differentiate it from competitors.
3- Keeps the organization focused on customer needs rather than its own abilities.
4- Provides specific directions to top managers for selecting alternative courses of action.
5- Guide all employees even if they work in different parts of the world. It is act as “glue”.
Corporate strategy: is a strategy that determines how resources are to be used to meet the
organization’s goals in the areas of production, logistics, finance, R&D, human resources, IT
and marketing. Corporate strategy planners are concerned with issues such as; competition,
differentiation, interrelationships among business units, and environmental issues.
4
SWOT Analysis
SWOT is the examination of the strengths & weakness, opportunity & threats in relation of
external & internal environmental factors that affect the business. Strengths &weakness
come from internal factors such as: resources, structure and culture. While Opportunities &
Threats come from external factors such as: market-share and competitors.
The strengths refer to those internal operational, managerial, resource and marketing
factors that provide a strong foundation for organization’s activities and for their ability
compete effectively in the marketplace. Weaknesses refer to organizational activities in the
marketplace that place the organization at a disadvantage vis-à-vis competitors and in the
view of targeted customers.
Marketing environmental scanning identifies numerous issues that marketers must consider
when developing marketing strategies. These market developments may offer opportunities
for marketers to exploit or they may be the cause of threats to the organization wealth.
The SWOT analysis in its simplistic way, has the benefit of placing an organization’s strengths
and weaknesses in the context of the identified opportunities and threats, so implying the
organization ability of leveraging an opportunity or fending off an apparent threat
Competitive advantage
The competition is viewed by organizations “competitors”, who have products substitutable
for, or similar to, other company products when the targeted customer is the same. While,
Competitive advantage: is the achievement of superior performance vis-à-vis rivals through;
1- Differentiation to create distinctive product appeal or brand identity;

2- Providing customer value and achieving the lowest delivered cost;
3- Focusing on scoped product or market niches to be viewed as leading specialist.
Michael Porter identified Generic routes to achieve the competitive advantage:
A- Cost leadership :This involves developing a low cost base through economies of
scale associated with high market share and economies of experience, to give high
contribution. Very tight cost controls are essential to the success of this strategy.
B- Differentiation: This offer product and marketing programs that have a distinct
advantage or are different to those offered by competitors. It can be achieved by
creativity, innovation, novel distribution channel, and customer service policies.
C- Focus: This involves maintaining close links with the market so that product and
marketing effort are designed with a particular target group. Typically for small size
firms who failed in the first two routes, such companies success by effectively
meeting customer needs that may be being missed by larger players in the market.
Failure to achieve any of these strategic can result in companies becoming “stuck in the
middle”, with no real competitive advantage. It is not usually possible to follow all three
generic strategies for competitive advantage at once, but it is common for businesses to gain
cost leadership while also differentiating their proposition, and also for organizations to seek
both a focused and a differentiated approach.
5
Differential advantage
Differential advantage is an attribute of a brand, product, service or marketing mix that is
desired by the targeted customer and provided by only one supplier. It is a unique edge over
rivals in satisfying this customer.
If a marketing mix is developed that matches target market needs & expectations and is
superior to those offered by competitors, there is a real differential advantage. If successful
in developing a differential advantage, an organization is likely to have its differential
advantage copied by rivals.
Achieving a differential advantage or competitive edge requires an organization to make the

most of its opportunities and resources while offering customers a satisfactory mix of
tangible and intangible benefits, and monitor competitor’s activities.
There are many different sources of differential advantage that companies can pursue. It’s
important to ensure that the promoted differential advantage comply with below attributes :
- Unique to the one organization, otherwise it is only a strength or capability.

- Desirable to the targeted customer.
- Not simply the expected marketing mix taken for granted by the target market.
- Not simply an internal perception by a team of marketers.
If there is no observable differential advantage, an organisation must look to its strengths

over its rivals. These will still form the foundation for its ability to compete effectively. The
SWOT analysis assists marketers in identifying their strengths and capabilities. The
composite of any differential advantage with any string this a company's basis for
competing, which should form the leading edge of the organisation marketing strategy.
There is straightforward sequence that marketers follow to identify a differential advantage :
1- Identify the market’s segments.

2- Establish what product and service attributes are desired in each segment.
3- Decide which of these attributes the company in question offers.
4- Determine which attributes the company’s competitor’s offer.
5- Consider what marketplace perceives the competitors genuine strengths to be.
6- Identify any gaps exist between customer expectations and perceptions.
7- Consider whether any gaps identified are matched by the company offerings.
8- Is these advantages can be emphasized through sales and marketing programs?
9- Consider the sustainability of these advantages for the company.
10- Which areas offer potential for developing a future differential advantage?
11- Detail the changes that the company must make to its research and development.
It is important to remember that companies frequently examine their relative strengths and
weaknesses in relation to their rivals. Strength is not the same as a differential advantage.
For example; many rivals may also have strong brand awareness, product that perform well,
loyal distributors or high profitability. A differential advantage is something that targeted
customer want and value, and that only one supplier is able to provide
6
Marketing Environment
Marketing Environment: consists of external forces that directly or indirectly influence an
organization’s acquisition of inputs and generation of outputs. It consists of six categories of
forces: Political, Legal, Regulatory, Societal, Technological and Economic/Competitive.
There are numerous environmental factors fall into one of these six categories, termed the
macro forces of the marketing environment as they affect all organizations operating in a
particular market. While, Micro forces are more situations and organization-specific,
includes internal environment, suppliers, intermediaries, buyers, competitors and public.
However, environmental forces are always dynamic, changing in the marketing environment
can create uncertainty, threats and opportunities for marketers.The future isn’t predictable;
marketers can estimate the future, although some fail might affect their performance. Smart
marketers continually modify their strategies in response to the dynamic environment.
Environmental Scanning and Analysis

Environmental scanning is the process of collecting information about the forces in the
marketing environment.Scanning involves: observation; keeping “an ear to the ground”;
review secondary sources, and marketing research.Managers must be careful not to gather
so much information that sheer volume makes analysis impossible.
Environmental analysis is the process of assessing and interpreting the information

gathered through environmental scanning. Through analysis a marketing manager seeks to
describe current environmental changes and to predict future changes. By evaluating
changes, the manager should be able to determine possible threats and opportunities linked
to environmental fluctuations which will assess the performance of current marketing
efforts and develop marketing strategies for the future.
The Core Aspects of the Micro Marketing

1) The Organization
Marketers must be aware of the organizational factors, monitor them, and modify their
actions accordingly to ensure internal take-up of their ideas and plans. The marketing
function’s recommendations of the organization must be;
- Consistent with senior management’s corporate goals;
- Conveyed to other functions within the organization;
- Reflect colleagues‟ views and abilities to implement the desired marketing plan.
2) Suppliers
Most organizations supplies from third parties. Without the cooperation of those suppliers,
a business would fail to deliver a quality product or service that satisfies its customers'
needs. Marketers must be aware of supplier innovations; deals with rivals; supply shortages,
quality concerns; supply costs and price trends or any new entrants into the supply chain.
3) Marketing Intermediaries
Some businesses sell directly to their customers. But some rely on retailers, wholesalers,
agents and physical distribution companies. Without the cooperation of such intermediaries,
an organization is unlikely to be able to deliver its products as required by its customers.
7
4) Buyers
Customers are central to the marketing concept. Customers have changing requirements,
needs and perceptions, which marketers must understand and satisfy. Each organization will
have a unique set of resources, marketing programs and products to offer its customers.
5) Competitors
Marketers must differentiate their product and overall plan form competing companies.
Hence, marketers must realize two concepts regard the competitor's competitive arena;
1) Competition stems not only from direct rivals but also from substitute and new entrants.
2) The organization’s; position, resources, capabilities, market standing, strengths and any
competitive activity differ between companies, hence any impact will be different.
6) Publics
Public could impact on an organization’s ability to satisfy its target customers and achieve its
corporate objectives. These include: financial bodies, media, government, pressure groups,
neighborhood publics; general public; and internal public.
PEST Analysis
It is essential that the marketing environment is monitored continually to the formulation of
any target market strategies or marketing mix programs in order to maximize the marketing
opportunities and hold off competitors' actions.
The planning phase is the base that the future of the business will depend on it. One of main
planning steps is the PEST analysis, stands for (political, economic, social and technological).
It analyses the marketing environment (macro & micro forces) to identify the opportunities,
threats and the restriction that they will go through and how to deal with those factors.
8
The Consumer Buying Decision Process

Not all decision processes lead to a purchase. A consumer might stop the process and revisit
a certain stage at any time. Consumer decisions do not always include all five stages. It’s a
five-stage process that includes; Problem recognition, Information search, Evaluation of
alternatives, Purchase, Post-purchase evaluation.
Stage 1: Problem recognition;

Problem recognition occurs when a buyer becomes aware that there is a difference between
a desired state and an actual condition. Marketers use advertising and sales promotion to
help trigger such need recognition. The speed of problem recognition can be either slow or
rapid, depending on the individual concerns.
Stage 2: Information search;

Search for information about products that will resolve the problem or satisfy the need.
There are two aspects to information search:
A- Internal search; buyers search their memory for information about products.
B- External search; connecting with friends, reviewing television and using the internet.
There are some features of the information itself that assist this stage such as;
A- Repetition; is a technique that increases consumer learning of information.
B- Format; the information transmitted format might be verbally, numerically, visually.
Stage 3: Evaluation of alternatives;

When evaluating the products in the evoked set "group of alternatives", a buyer establishes
criteria for comparing the products. These criteria are the characteristics or features that the
buyer wants. Marketers influence consumers' evaluation by framing the alternatives.
Framing can make a characteristic seem more important and affects the decision processes.
Stage 4: Purchase;
When the consumer chooses which product to buy, the buyer will pick the seller from whom
the product will be purchased and finalizes the terms of the sale. The closeness of
alternative stores and product availability can influence which brand is purchased. Other
issues such as price, delivery, guarantees, service terms and credit arrangements are settled.
Stage 5: Post-purchase evaluation;

When the buyer evaluates the product to check whether the actual performance meets the
expected levels or not, this will influence the future behavior.
Three major categories of influence are affecting the consumer buying decision process;
9
Marketing Segmentation
Marketing: an aggregate of people who, as individuals or within organizations, have a need
for certain products and the ability, willingness and authority to purchase such products.
Market segmentation: the process of grouping customers in markets with some

heterogeneity "different" characteristics into homogeneous "similar" segments.
Market segment: is homogeneous groups sharing one or more similar characteristics that
cause them to have relatively similar product needs and buying characteristics.
Segmentation, Targeting and Positioning

Segmentation; there are many ways to group the
customer or segment the market. In different
markets, the variables are appropriate change. The
key is to understand the different product
requirements and the exact customer needs of the
market segment.
Targeting; there are many decisions about which and

how many customer groups to target can be made.
There are several options:
1- Focusing on the total market.
2- Focusing on a single segment with one product.
3- Offer one product to a number of segments.
4- Target number of segments with different product.
Positioning Products; Companies must decide how

and where within any targeted segments to aim a
product or a brand. The needs and wants of targeted
customers must be translated into an appropriate
marketing mix. The consumers' view of the product
position relative to the competition is particularly
critical. After all, the paying public does not always
perceive a product in the way the manufacturer does.
Segmentation Variables
Segmentation variable or bases are the characteristics of individuals or groups that are used
for dividing a total market into segments. Companies must make choices about the most
appropriate variable to use but they must consider the needs and buying behaviour of their
potential customers. The selected bases should be usable and easy to measure.
Selecting appropriate variables for market segmentation is an important marketing
decision, because the variable is the primary factor in defining the target market. In some
cases, segmentation is based on more than one variable. Decisions about the number of
segmentation variables used are partly based on a company resources and capabilities.
Marketers must decide how many segmentation variables to use; A Single Variable is the
simplest to perform, achieved by using one variable, while A Multivariable Variable is
achieved by using more than one variable to divide the market. However, the more variables
used, the greater number of segments likely to be identified, this may reduce the sales
potential of many of the segments because it will be more complicated to manage.
10
The Four Segmentation Variables
Companies developing their strategy for segmentation can choose one or several
variables/bases from a wide range of choices. Segmentation variables can be grouped into
four categories: demographic, geographic, psychographic and behaviouristic.
1- Demographic variables: Segmenting market based on the aspect of population

characteristics such as; age, gender, race, lifestyle, education and income. Market
managers rely on these demographic characteristics because they are often closely
linked to customers’ needs and purchasing behaviour, and can readily be measured.
- Age; Population statics keeps a track of the changing in the age profiles.
- Gender; includes clothing markets, alcoholic drinks, books, magazines.
- Marital status; Products and services needs also vary accordingly.
- Income; reflect people's ability to buy the products.
2- Geographic variables: Segmenting market based on the aspect of geographic

characteristics such as; local climate, natural resources and population density.
Marketers may divide the market into regions because one or more geographic
variables may affect the customers’ needs. Market density refers to the number of
potential customers within a unit of land area. Marketers also use Geo-demographic
segmentation that clusters people according to areas postcode & census data.
3- Psychographic variables: Segmenting market based on the aspect of Personality

characteristics such as; personal attributes, motives and life style. It can be used by
itself or combined with other types of segmentation variables. Such type is useful
when a product is similar to many competing products and when consumers’ needs
are not significantly affected by other segmentation variables. However, segmenting
markets according to personality characteristics could be problematic, because
consumer choice and product use vary with each consumer personality and lifestyle.
4- Behaviouristic variables: Segmenting market based on the aspect of consumers’

behaviour towards the product such as; benefit expectation, brand loyalty and price
sensitivity. This might relate to the way that particular product is used for or to the
required benefits from it. Benefit segmentation is the division of a market according
to the required benefits that the consumers want from the product. By determining
the benefits desired; marketers will be able to divide people into groups seeking
certain sets of benefits for each group.
11
Product Definition
Product can be delivered in a form of an idea, service or good. Developing a successful
product requires knowledge of fundamental marketing and product concepts.
Good: is a tangible physical entity, when buyers purchase a product, they are really buying
the benefits and satisfaction they think the product will provide.
Service: is the application of human efforts to people in order to provide intangible benefits
to customers. Services are bought on the basis of promises of satisfaction.
Ideas: are concepts, philosophies, images or issues that provide the psychological stimulus
to solve problems or adjust to the environment.
Classifying Products
A- Consumer products; purchased to satisfy personal or family needs.
1. Convenience products; items that are inexpensive and frequently purchased
consumers will expend no effort in planning and purchasing these items (food).
2. Shopping products; items that are chosen more carefully, consumers will expend
effort in planning and purchasing these items (furniture, jewelry,).
3. Specialty products; items that possess one or more unique characteristic;
consumers will expend considerable effort to obtain them (car).
4. Unsought products; items that are purchased when aggressive selling is used to
obtain a sale that would not otherwise take place (life insurance).
B- Industrial or business products: purchased to be used in a company’s operations.

1. Raw materials; the basic materials that become part of physical products.
2. Major equipment; large tools and machines used for production purposes.
3. Accessory equipment; tools and equipment used in office activities.
4. Component parts; part of the physical product that need little processing.
5. Process materials; materials used directly in the production of other products.
6. Consumable supplies; supplies that facilitate production and operations.
7. Business services; the intangible products that organization uses in their
operations.
The Three Levels of Product

1. Core product: the level of a product that
provides the real core benefit or service.
2. Actual product: is a composite of the features
and capabilities offered in a product, quality and
durability, design and product styling, packaging
and brand name.
3. Augmented product: are the support aspects of
a product, including customer service, warranty,
delivery and credit, installation and aftersales
support.
12
Characteristics of Services
The marketing of services is different from the marketing of goods. To understand the
nature of services marketing, it's necessary to understand its particular characteristics;
A- Intangibility:
Services cannot be tasted, touched, seen, smelled such as; Experience qualities can be
assessed only after purchase such as satisfaction. Credence qualities cannot be assessed
even after purchase such as appendix surgery. However, Services have tangible attributes;
search qualities, which can be viewed prior to purchase, such as the décor in a restaurant.
B- Inseparability:
Inseparability in relation to production, Services produced at the same time as they are
consumed such as medical examination. Because of high consumer involvement in most
services, standardization and control are difficult to maintain.
C- Perishability:
Perishability a characteristic of services whereby unused capacity on one occasion cannot be
inventoried for future occasions, where the consumer of a service generally has to be
present and directly involved in the consumption of service at the time to its production
such as airlines where an empty airline seat on a flight is a sale lost forever.
D- Heterogeneity:
Heterogeneity is variability in the quality of service because it's performed by people; this
may result in varying levels of customer satisfaction such as Starbucks branches. Hence,
Standardization and quality are extremely difficult to control. Characteristics of services
themselves may make it possible for marketers to customize their offering to consumers.
E- Client based relationship:
Interactions that result in satisfied customers who use a service repeatedly. To ensure that
client-based relationships are created and maintained, a service provider must take action to
build trust, demonstrate customer commitment, and satisfy customers so well that they
become very loyal to the provider and unlikely to switch to competitors.
F- Customer contact:
Level of interaction between the provider and customer needed to deliver the service. High-
contact services include healthcare and beauty services. Low-contact services include car
repairs and dry cleaning.
Key challenges against each service feature
13
Classification of Services
Services can be meaningfully analyzed using Five-category classification methods;
A- Type of market;
Services can be viewed in terms of the market or type of customer they serve (consumer or
business). Examples-consumer: childcare, legal advice, entertainment. Examples-business:
consulting, caretaking services, installation.
B- Degree of labor intensiveness;

Many services rely heavily on human labor, and other services are more equipment
intensive. Labor based services are more susceptible to heterogeneity than most equipment
based services. Examples-labor based: education, haircuts, dentistry. Examples-equipment
based: telecommunications, fitness centers, public transport.
C- Degree of customer contact;

High contact services involve actions that are directed towards individuals, the consumer
must be present during production. The appearance of the production facilities and the
interpersonal skills of actual service providers are critical in high contact services. Examples-
high: healthcare, hotels, air travel. Low contact services involve actions directed at things.
Although consumers may not need to be present during service delivery, their presence may
be required to finish the service. Examples-low: home deliveries, postal service, theatres.
D- Skill of the service provider;

Professional services tend to be more complex and more highly regulated than non-
professional services. Examples-professional: legal advice, healthcare, accountancy.
Examples-non-professional: domestic services, dry cleaning, public transport.
E- Goal of the service provider;

The goal of service could be classified according to whether they are profit or non-profit.
Most non-profit organizations provide services rather than goods. Examples-profit: financial
services, insurance, tourism. Examples-non-profit: some healthcare, education, government.
Developing Marketing Strategies for Services

In developing marketing strategies, the marketer must develop the right service for the right
people at the right price, in the right place with the right positioning and image. The
marketer must then communicate with consumers so that they are aware of the need-
satisfying services available to them.
The strategies that services marketers implement are contingent upon a good understanding
of the pattern and determinants of demands. Marketers can alter the marketing mix to cope
with the fluctuating of demand, through price incentives, promotional efforts, modified
distribution and alternative products.
Below table summarizes a range of marketing and non-marketing strategies that service
businesses may use to deal with fluctuating demand.
Marketing Strategies Non-marketing Strategies

Use different pricing Hire extra staff/Work employees overtime
Alter product Cross-train employees
Change place/distribution Use employees to perform non-vital tasks
Use promotional efforts Subcontract work/seek subcontract work
Modify customer service levels Slow the pace of work
Alter branding and positioning Turn away business
14
Marketing Channel Definition

A channel of distribution or a marketing channel is a group of individuals and organizations
that direct the flow of products from producers to customers. Channels of distribution make
products available at the right time, in the right place and in the right quantity by providing
such product-enhancing functions as transport and storage.
The challenges of channel management for marketers are to balance between optimizing
customer satisfaction and making an adequate return on investment. Providing customer
satisfaction should be the driving force behind all marketing channel activities.
Functions of Marketing Channels

Marketing channels serve many functions, although some of these functions may be
performed by a single channel member, most are accomplished through both the
independent and joint efforts of channel members. These functions include;
A- Creating utility; Marketing channels create four types of utility (usefulness);
- Time utility; having products available when the customer wants them.
- Place utility; making products available in locations where customers want.
- Possession utility; giving the customer access to the product to use for future use.
- Form utility; assembling or refining the product to suit individual customer needs.
B- Facilitating Exchange Efficiencies; marketing intermediaries can reduce the costs of

exchanges by performing certain functions efficiently. They are specialists in
facilitating exchanges by providing valuable assistance because of their access to and
control over important resources used in the functioning of marketing channels.
C- Alleviating Discrepancies/conflicts; The functions performed within marketing

channels help to overcome two major distribution problems:
- Discrepancies in quantity; occurs when the quantity of products the company
produce efficiently is more than the average customer wants.
- Discrepancies in assortment/variety; occurs when consumers want a broad
assortment, but an individual manufacturer produces a narrow assortment.
An assortment is a combination of products put together to provide customer benefits.
The assortment discrepancies are resolved through the sorting activities;
- Sorting out; is classifying heterogeneous products into relatively uniform,
homogeneous groups based on product characteristics such as size, shape or weight.
- Accumulation; is developing a bank, or inventory, of homogeneous products with
similar production or demand requirements to provide aggregated inventory.
- Allocation; is breaking down large homogeneous inventories into smaller lots. It
eliminates discrepancies in quantity by enabling the efficiently buying in lorry loads.
- Assorting; is combining products into assortments in one place. It eliminates
discrepancies in assortment by grouping products in ways that satisfy buyers.
15
D- Standardizing Transactions; marketing channels standardize the transactions
associated with numerous products. Its' members tend to limit customers options.
E- Providing Customer Service; Retailers of durable goods are expected to provide in-
store advice, technical know-how, delivery, installation, repair services, and training,
in order to provide end-user satisfaction. The customer service provided through the
distribution channel provides marketers with an edge over their competitors.
The Channels for Consumer Products or Service

The various marketing channels can be classified as channels for consumer products and
services, or channels for industrial, business-to-business products and services. Below figure
illustrates several channels used in the distribution of consumer products or services;
- Channel A describes the direct movement of goods from producer to consumers.

This channel is the simplest but not necessarily the cheapest (E-commerce).
- Channel B which moves goods from producer to retailers and then to consumers, is
often used by large retailers that can buy in quantity from a manufacturer (Cars).
- Channel C a long-standing distribution channel, it takes goods from producer to
wholesalers, then to retailers and finally to consumers (Coca Cola - Tobacco).
- Channel D through which goods pass from producer to agents to wholesalers to
retailer, and only then to consumers (Processed food).
Benefits of a long distribution channel; a long channel may be the most efficient
distribution channel for certain consumer goods. When several intermediaries are available
to perform specialized functions, costs may be lower than if one channel member is
responsible for all the functions in all territories.
16
Terms Used to Describe Price

Price is expressed differently in different exchanges such as; insurance companies charge a
premium requiring protection. A policeman writes a ticket that requires fine. An accountant
charges a fee, and a fare is charged for travelling by plane. A toll is charged for the use of
motorway bridges. Rent is paid for the use of a flat. An agent receives a commission on the
sale of a property. A tip helps pay waitresses for their services. Interest is charged for loans,
and taxes are paid for government services. The value of many products is called price.
Price and Non-Price Competition

A product offering can compete on either a price or non-price basis. The choice will affect
not only pricing decisions but also will affect the other marketing mix decision variables.
A- Price Competition;
It is a policy whereby a marketer emphasizes price as an issue, and beats the prices of
competitors. To compete effectively on a price basis, a company should be the low-cost
producer of the product. Sellers using this approach will be flexible to change prices
frequently, particularly in response to competitors altering their prices.
A major drawback is that competitors may also have the flexibility to adjust their prices to
match or beat another company’s price cuts. If so, a price war may result. If a user of price
competition is forced to raise prices, competing companies may decide not to do the same.
B- Non-price Competition;
It is a policy in which a seller elects not to focus on price but instead emphasize other factors
such as distinctive product features, service, product quality, promotion, or packaging to
distinguish the product from competing brands. Organizations that use non-price
competition aim to increase unit sales in other ways.
A company can use non-price competition to build customer loyalty towards its brand, if so
the customer may not easily be shifted away by competing offers. Non-price competition is
workable under the right conditions. A company must be able to distinguish its brand to
make it hard for competitors to imitate. However, a marketer attempting to compete on a
non-price basis must still consider competitors’ prices.
Stages for Establishing Prices

Marketers must be able to grasp target customers’ evaluation of price and understand
market trends and competitors’ pricing moves. There are eight stages for establishing prices;
Stages 1: Selection of pricing objectives
Pricing objectives are the foundation on which the decisions of subsequent stages are
based. Organizations may use numerous short and long term pricing objectives.
Stages 2: Assessment of target market’s evaluation of price and its ability to pay
This stage shows how much emphasis to place on price and may help determine how far
above the competition prices can be set. Understanding customers’ buying power helps
the target market’s evaluation of price to be accurately assessed.
Stages 3: Determination of demand
The classic demand curve is a graph of the quantity of products expected to be sold at
various prices, if other factors are held constant. It illustrates that as price falls the
quantity demanded usually increases.
17
Stages 4: Analysis of demand, cost and profit relationships
This stage can be accomplished through marginal analysis or break even analysis.
Marginal analysis is the examination of what happens to a company’s costs and
revenues when production is changed by one unit. The optimum price is the point at
which marginal cost equals marginal revenues. Break even analysis involves determining
the number of units necessary to break even. The point at which the costs of producing
a product equal the revenue made from selling the product is the breakeven point.
Stages 5: Evaluation of competitors’ prices

Company can keep its prices as competitors’ prices when non-price competition is used.
If company uses competitive price, it can price its product below competitors' products.
Stages 6: Selection of a basis for pricing

The three major dimensions on which prices can be based;
A- Cost based pricing; a company determines prices by adding a monetary amount or

percentage to the cost of the product (mark-up/cost plus pricing).
B- Demand based pricing; is based on the level of demand for a product and requires
marketers to estimate the amounts of a product that buyers will demand at
different prices, that’s if the company wishes to use price differentiation where High
price when demand is strong and low price when demand is weak.
C- Competition based pricing; costs and revenues are secondary to competitors’
prices. It may be combined to arrive at price levels necessary to generate a profit.
The increasingly popular marketing oriented pricing involves a company taking
account of a wide range of factors; marketing strategy, competition, price-quality,
costs, product line pricing, negotiating margins and political factors.
Stages 7: Selection of a pricing strategy

Pricing strategy influence& determine pricing decisions, designed to achieve marketing
objectives. Using differential pricing involves charging different prices for the same
quality of product such as; negotiated pricing, secondary market discounting, periodic
discounting and random discounting. Strategies used in new product pricing are;
A- Price skimming; charges highest price for the buyers who most desire the product.
B- Penetration pricing; sets a price below competitors prices of penetrate the market.
C- Psychological pricing; encourages purchases that are based on emotional behavior.
D- Promotional pricing; related to the short term promotion of particular product.
Stages 8: Determination of a specific price

The basis for price and the pricing strategy should structure the selection of a final price.
However, pricing remains a flexible and convenient way to adjust the marketing mix.
Marketers must never lose sight of the longer term implications for the brand of the
fundamental relationship between demand, cost and profits.
18
The Promotional Mix
Promotional mix is the specific combination of ingredients an organization uses to promote
a product, traditionally including the following ingredients:
1- Advertising
Advertising is a paid form of non-personal communication about an organization and its
products that is transmitted to a target audience through a mass medium.
The advantages of advertising;
- It offers the options of reaching an extremely large target audience,
- It can be an extremely cost-efficient promotional method,
- It enables the user to repeat the message a number of times,
- Advertising a product in a certain way can add to its value,
- Enhances the company’s public image and the product’s brand positioning.
The disadvantages of advertising;
- The absolute monetary outlay can be extremely high (high costs).
- Advertising rarely provides rapid feedback.
- Measuring its effect is difficult, and has a less persuasive impact on customers.
- Advertising is a complex processes and prone to error.
There are eight stages to create an advertising campaign.
- The identification and understanding of the advertising target audience.
- The scoping of objectives for the marketing campaign.
- Creates an advertising platform which seeks to differentiate the brand from rivals.
- Agreement on the available advertising budget, which is a specific project amount.
- The highly specialized act of establishing a media plan.
- The creation of the specific message.
- The execution of the campaign using the agreed platform, message and media.
- The evaluation of the campaign effectiveness and its apparent benefits.
2- Personal selling
Personal selling is the use of personal communication in an exchange situation to inform
customers and persuade them to purchase products. When sales person and customer
meet face to face they use kinesic communication (body language) by moving their
heads, eyes or arms. They also may use tactile communication through shaking hands.
Sales could be done through direct selling over the telephone that called Telemarketing.
Sales could be done through the Proxemic communication that occurs in face-to-face
interactions when either person varies the physical distance that separates them.
3- Publicity and public relations

Publicity refers to non-personal communication in news-story form about the firm
products that is transmitted through a mass medium at no charge (Radio & TV). Publicity
is compatible and supportive with the other elements of promotional mix; it cannot be
controlled to the extent that other elements can be. Public relations manage and
control the process of using publicity effectively. It is the planned and sustained effort to
maintain goodwill and understanding between an organization and its target publics.
Public relations are very important in handling any negative publicity engineered by
competitors or stemming from the media, regulatory bodies or public interest groups.
19
4- Sales promotion
Sales promotion is an activity that acts as a direct motivation by offering added value to
or incentive for the product to resellers, sales people or consumers such as; coupons &
bonuses. Marketers rely on sales promotion to improve the effectiveness of other
promotional mix ingredients and to produce immediate, short-run sales increases.
Consumer sales promotions encourage consumers to support a specific retail store or to
try a particular product, or they strive to bring forward purchases by existing customers.
Trade sales promotions encourage wholesalers, retailers or distributors to stock a
product, increase display space and market the product.
5- Sponsorship
Sponsorship is the financial or material support of an event, activity, person or product
by an unrelated organization or donor. Funds are made available to the recipient of the
sponsorship in return for notable public recognition of the benefactor’s generosity, and
display of the sponsor's name, products and brands.
6- Direct mail
Direct mail is a method of communication used to attract prospective customers or
charitable donors to invest in products, services or worthy causes. The direct mail
industry takes a significant slice of the promotional budgets for many companies and
organizations. Good database management is essential, and the material must be
targeted carefully to overcome the growing public aversion to ‘junk mail’.
7- The internet and digital

The Internet is a network of computer networks stretching across the world, linking
computers of different types. Most large companies now have their own websites. Web-
based marketing is important in many business-to-business markets. As a promotional
mix ingredient, the internet provides a tool that can be interactive, updated or modified
quickly, and that can produce material aimed at very tightly defined target groups.
8- Direct marketing
Direct marketing is a decision by a company’s marketers to select a marketing channel
which avoids dependence on marketing channel intermediaries and to focus marketing
communications activity on promotional mix ingredients which deal directly with
targeted customers. The deployment of any direct marketing campaign must reflect
targeted customer behaviour and perceptions; provide a reasonable offer that differ
from competitors’ propositions; match the firm corporate goals & its trading philosophy.
20
IM - Chapter 1
The Strategic Importance of Business Information Management

Internal& external information are important to any organization. High quality information
improves decision-making, enhances efficiency and allows organizations to gain competitive
advantages. There are different ways that information can create value through;
A- Add Value
Value is added through providing better quality products and services to an organization’s
customers. Information can be better used to better understand customer characteristics
and needs and their level of satisfaction with services, and also used to sense and respond to
markets. Information about trends in demands, competitor products and activities must be
monitored so that organizations can develop strategies to compete in the marketplace. For
Example; Airline Company uses databases to store personal characteristics of its customers
to understand their preferences and market products that better meet their needs.
B- Reduce costs
Cost reduction through information is achieved through making the business processes
more efficient. Efficiency is achieved through using information to create market and deliver
services using fewer resources than previously. Technology is applied to reduce paperwork,
reduce the HR needed to operate the processes through automation and improve internal
and external communications. For Example; Airline Company has used internet technology
so that customers serve themselves when they book tickets.
C- Manage risks
Risk management is a well-established use of information within organizations. Risk
management within organizations has created different functions and professions such as
finance, accounting, and auditing and corporate performance management. For Example;
Airline Company produces information management on tickets sales and costs of operating
the different routes which will be used by managers to review their strategies.
D- Create new reality
It refers to how information and new technologies can be used to innovate and create new
ways in which products or services can be developed. For Example; Airline Company can use
online services to introduce new products more cost effectively, such as holiday booking
services and a car rental service.
21
IM - Chapter 4
Data, Capta, Information and Knowledge

To understand the definition of knowledge that is not straightforward, we must understand
the definitions of data, capta, and information as these concepts are related to knowledge.
Data represents unstructured facts, collected from observations recordings about events,
objects or people, (newspaper contains lots of data). Capta is the result of selecting some
data for attention, (calculating the company's share price listed in a newspaper).
Information is data that has been processed, shaped or formed into a meaningful and useful
form for the management decision, (Students grades). Hence, knowledge comes from
information as information driven from Capta, which is driven from data.
From data to capta;

There are a difference need to be made between the great mass of facts (Data), and the
result of selecting some data for attention (Capta). Data are a starting point in our mental
processing, and the moment we choose to give data attention it turns into Capta. Turning
data into Capta is very familiar mental process, that has become completely transparent to
us, we do it all the time without noticing the process occurring.
From Capta to information to knowledge;

Having selected, paid attention to, or created some data, thereby turning it into (Capta) that
is enhanced to something different called (information). This process, which can be both
individual and/or collective, by which data are selected and converted into meaningful
information, can itself lead to larger structures of related information called (knowledge).
Significant issues in such process are; the apparent facts are not necessarily true so we need
to check their accuracy, the absence of any message conveys information so that nothing
has carried the information, and the Meaning attribution may be personal or shared.
The most important feature of this analysis of data, Capta, information and knowledge is a
human act that machines cannot produce. It’s about attributing meaning to the selected
data, or understanding the data.
22
IM - Chapter 5
The Process of Information Management
The process of information management can be broken down into a set of key phases; they
form the generic framework for information management, they includes;
A- Gathering Information;
This process includes activates to collect information that we need, activities to receiving
information from other people and activities to seek out the information. Information
gathering may be routing or an ad hoc project. It's the most critical phase of the process, if
things go wrong here, it will affect the other phases. It could have many problems like:
- Required information is not gathered at all.
- Gathering is done poorly so that there are gaps and errors in the information.
- Information is gathered but nothing is then done with it.
- Too much information is gathered where some of them are irrelevant information.
- A lot of time is spent for the use of others but nothing of value for you is achieved.
Steps that help to achieve a conscious process of gathering information:
- Accountability - responsibility for who collects what,
- Data definition - what items each type of info should include,
- Standardization - everyone is collecting the same information in the same way,
- Quality monitoring - collecting information of the right quality,
- Skills - help staff improve their information gathering skills.
B- Analyzing information
This phase consists of manipulating the data in order to get something more meaningful.
These manipulations can range from being simple calculations in one’s head to complex
calculations requiring the use of sophisticated computer software. Transforming information
into knowledge is another necessary transformation should be made to provide a complete
basis for decision making. The use of Computers can reduce the time spent in data analysis,
but there’s always an issue on whether the right statistical technique has been used.
C- Communicating information;
The nature of the communication process are; Formulation that involves three main steps;
deciding what to say, to whom and how to say it. Transmission that involves the
communication means choice and the timing for sending. These choices will be influenced
by considerations; to whom the message is for, how to be express, how urgent it is, how
confidential it is and its reliability. Reception is affected by choices about formulation and
transmission. You can do your best in focusing and expressing your message and in choosing
the right time, place and means of transmission, but the overloaded recipient may still not
attend to your message, in such cases you have to make extra efforts to ensure that you
have the recipients' attention. Interpretation involves the issue of whether the recipient
understands the message in the way you intended. Where accuracy of interpretation is
important, it is necessary to implement a procedure through which you can confirm that
your message has been correctly interpreted.
D- Storing information
Many times, information gathered is used and forgotten. Information needs to be stored
both for use in later activities and for submission to higher management and auditing
bodies. There are some key issues for each type of information that need to be stored;
- The form of the original information.
- The volume of the information.
- Who needs to access the stored information?
- How long the information needs to be kept.
- What kind of protection the information required.
23

B203a Final Material - Omar Abu-Jbara

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

B203a Final Material - Omar Abu-Jbara

Uploaded by

Copyright:

Available Formats

B203a – Final Material – Omar Abu-Jbara

Author: Omar Abu-Jbara

Course Code: B203a

Course Title: Business Functions in Context I

Content: Final material

[Chapter Numbers are based on the old edition books]

[‫]أرقام الشباتر فقط مأخوذة من نسخ الكتب القديمة‬

For any inquiry or TMA assistance do not hesitate to contact me.

Contact Details: E: oabujbara@gmail.com

The Evolution of the Marketing Concept

A- Production Era 1900: period of mass production following industrialization;

C- Marketing Era1950: period of identifying and satisfying the customers’ needs;

D- Relationship Marketing Era 1990: period of developing relationship with customers;

Relationship marketing refers to long-term, mutually beneficial arrangements in which both

A- The Product variable;

B- The Place/distribution variable;

C- The Promotion variable;

D- The Price variable;

E- The People variable;

Marketing Strategy Defined

Marketing programme: a marketer’s marketing mix activities and implementation processes

Organizational Mission, Goals and Corporate Strategy

1- Differentiation to create distinctive product appeal or brand identity;

Michael Porter identified Generic routes to achieve the competitive advantage:

Achieving a differential advantage or competitive edge requires an organization to make the

- Unique to the one organization, otherwise it is only a strength or capability.

If there is no observable differential advantage, an organisation must look to its strengths

There is straightforward sequence that marketers follow to identify a differential advantage :

1- Identify the market’s segments.

Environmental Scanning and Analysis

Environmental analysis is the process of assessing and interpreting the information

The Core Aspects of the Micro Marketing

The Consumer Buying Decision Process

Stage 1: Problem recognition;

Stage 2: Information search;

Stage 3: Evaluation of alternatives;

Stage 5: Post-purchase evaluation;

Market segmentation: the process of grouping customers in markets with some

Segmentation, Targeting and Positioning

Targeting; there are many decisions about which and

Positioning Products; Companies must decide how

1- Demographic variables: Segmenting market based on the aspect of population

2- Geographic variables: Segmenting market based on the aspect of geographic

3- Psychographic variables: Segmenting market based on the aspect of Personality

4- Behaviouristic variables: Segmenting market based on the aspect of consumers’

B- Industrial or business products: purchased to be used in a company’s operations.

The Three Levels of Product

Key challenges against each service feature

B- Degree of labor intensiveness;

C- Degree of customer contact;

D- Skill of the service provider;

E- Goal of the service provider;

Developing Marketing Strategies for Services

Marketing Strategies Non-marketing Strategies

Marketing Channel Definition

Functions of Marketing Channels

B- Facilitating Exchange Efficiencies; marketing intermediaries can reduce the costs of

C- Alleviating Discrepancies/conflicts; The functions performed within marketing

The Channels for Consumer Products or Service

- Channel A describes the direct movement of goods from producer to consumers.

Terms Used to Describe Price

Price and Non-Price Competition