MARKETING

MARKET – A place where people meet to exchange, or buy and sell products. OR – It is a
process/activity by which buyers and sellers interact for the purpose of exchange.

MARKETING – The management process responsible for identifying, anticipating and satisfying
consumers’ requirements profitably.

The marketing research process may be defined as follows:

a. Defining the problem and aims of research – identify the actual market problem/s, stated in
the form of a question.
b. Developing the research plan for collecting data – find and develop the likely sources from
which a firm may get information.
c. Implementing the research plan – collect the information
d. Analyzing the data – analyze the information
e. Interpreting and reporting – present findings in the form of a report.

This means working with potential or actual customers to get them to purchase the product,
satisfying their desires and at the same time making a profit.

A successful marketing campaign must take the following steps:

1. Find out what goods and services people want.

2. Ensure that these goods and services are available to the customers when needed, the right
quantity and price.
3. Make sure to calculate the price of the product, anticipate the price of the product,
anticipate demand and promote so that profits can be made.

TARGET GROUP – Those persons you intend to sell your product/s to.

MARKETING ACTIVITIES:

A. Identify and design a product

B. Package and brand the product – this distinguishes your product from your competitors. It
provides convenience during distribution, sale and use.

- Creates a distinction from other similar products through the name, design, symbol or
other unique feature. Its aim is to create a difference in experience in the consumer’s
mind.

MARKET RESEARCH – the systematic gathering of information in order to help to make accurate
management decisions. It is not a part of the marketing mix but an aid to the decision making
progress.

There are many methods/tools used to collecting data:

a. Experiment methods – this aims at discovering whether or not a cause and effect
relationship exists. Eg. an experiment may be carried out giving some customers a sample of
a product, without telling them what the ingredients are, while some are given with the
ingredients stated (this is the control factor). The reactions will then be noted and
compared.
 b. Survey method (collection from primary sources) - a questionnaire is the most common
survey method used. It may be written or orally (interview) administered.
c. Data collection from secondary sources - data which is already collected for other purposes.
They may be found in company records government publications, trade studies, university
journals, newspaper articles etc.

TYPES OF MARKETING RESEARCH - there are 2 types of market research which fall into 2 main
categories. They are either ‘ad hoc’ or ‘continuous’

Ad hoc – focus on specific marketing problems and collect data at one point in time from one sample
of respondent.

Continuous – studies the same sample of people repeatedly.

Some ad hoc studies are:

- Product usage, advertising development (how consumers respond to a particular

advertisement)
- Corporate image surveys
- Customer satisfaction surveys

Continuous studies are:

- Consumer panels – formed by recruiting large numbers of consumers who provide

information on their purchases.
- Retail audits – firms gain the cooperation of retail outlets to measure the sales of brands
using MIS to track changes in brand loyalty, market shares
- Television viewership and radio listening panels – these panels aim at measuring viewer
or listenership minute by minute in order to provide critical data for broadcasters to
determine what kinds of programmes to produce and when to broadcast them.

MARKETING MIX

Making decisions concerning the four ‘P’s known as the Marketing Mix. These 4 elements are used
to construct marketing plans.

The 4 ‘P’s are: PRODUCT, PRICE, PLACE (which includes distribution) and PROMOTION.

a. PRODUCT - the type of good or service produced e.g size, quantity, packaging and design.

Developing new products:

i. Idea generation – sources include the market production office and research personnel,
sales representatives etc.
ii. Idea screening – preliminary review on the product, target market etc.
iii. Concept development and testing – the product is pre-tested to see if it right for
consumer demand, testing methods include: surveys, feedback, expo’s and trade shows.
iv. Business analysis – cost estimates of inputs, expected retail price, profit analysis etc.
v. Product development – involves technical development to further examine how feasible
it is to launch the product on to the market.
vi. Test marketing – selling the product under the same conditions as it would be sold
under to the target market/group.
 vii. Commercialization – the results of the test marketing may lead to the product being
redesigned, sold as it is or discarded.

Branding – this refers to a design, sign, symbol/logo which distinguishes one product from another.
A trademark is the legal part of a brand the name is a part of the brand) a brand mark is the part of
the brand which is recognized as a picture or a symbol.

Eg. of trademark – Adidas, Coca Cola, Nike etc.

Reasons for branding. To:

a. Control a section of the market by building brand loyalty

b. Gain greater control over different products in a product line
c. Provide legal protection for the owner
d. Allow the promotion of products easily through advertising

Packaging is carried out for the main purposes: protection, convenience, economy promotion and
product safety. Packaging decisions about size, colour , shape, materials and brand mark must be
made. The materials used as packaging materials are also important an awareness must be made as
to prevent environment damage, such as: recyclable materials, etc.

Labelling – to assist in identification, promotion of a product. It also includes vital information to the
public such as, nutritional content.

Certain factors should be considered when determining the type of product for customers:

-size and shape, colour, quantity of raw materials, style and fashion, price, packaging, types of
customers, terms of sale eg. credit, brand name etc.

PRODUCT LIFE CYCLE: all products have a life cycle which describes how sales rise and fall. Life cycle
includes:

1. Introduction – product is developed

- Large amount of expenses to develop the product
- No sales revenue
- Product is advertised
- Product is placed on the market of sale
- Some products fail in this stage as consumers may not be impressed by them.
2. Growth – product is accepted by the consumers
- Profits will start to increase
3. Maturity – product is established in the market
- Sales may stop increasing
- Firm may face competition from similar producers/sellers
- Minimum effort may be used to maintain sales eg. price cutting, heavy advertising etc.
- This is the longest stage of the life cycle.
4. Decline – sales stop increasing
- There is a fall in profits
- Some firms may stop making the product
- Other firms may add new features to their product
- Some goods never reach this stage and have been around for hundreds of years eg.
matches and salt.
- Firms may decide to introduce a new product.
MARKETING MANAGEMENT CONCEPTS

These concepts that a firm may choose aiming to satisfy the customers’ wants while making a profit.

Sales concept - trying to sell something before learning what the customer wants.

Customer concept – do what the customer wants despite having the other goals in mind.

b. PRICING – Is very important. It is a marketing strategy and a marketing activity.

As a strategy pricing involves pricing policy. As an activity pricing relates to the setting of prices by
procedures.

The price of a product is the exchange value for a good/service or the amount that is asked for the
product.

The price placed on the product must be:

-attractive to customers

-competitive so that it is favoured

-enough to cover the cost of production and gain profits.

The following affect the product price:

- Discounts given
- Credit allowances
- Promotions – advertising, sales promotion, public relations, personal selling, pricing
strategy.

Cost based pricing – the cost of producting the product is determined and a percentage is added on
for profit.

Breakeven analysis – a financial technique that identifies the number of units that needs to be sold
to cover all fixed and variable costs.

Penetration pricing techniques – where they price the product below cost to get established in the
market place. Price will be increased once the product gets established.

Non-cost pricing factors include:

i. Competition – prices are set based on their competitor’s prices.

ii. Image – high prices may be linked to high quality products and status. To support this
positive image, some firms eg. Clarke and Rolex price their products to appeal to those
ostentatious customers.
iii. Market position- competitive firms will use price to determine their basic position and
aim to price below their competitors using the following strategies:
- Competitive pricing – pricing the same as the competitor.
- Demand based pricing – different prices to different customers for the same products.
When demand for the product increases, supply may be limited – price will increase.
When demand is low, there may be a large quantity of the good to get rid of them,
prices will be lowered.
- Dumping – products are sold at low cost just to allow the firm to earn some money
 - Internet pricing – the internet allows you to compare price lists.
- Loss leaders/ing – special offers to attract customers. Lowering the price of an item in
the store, hoping to attract customers who will then spend the money they saved on the
particular item on another item in the store.
- Price leadership – the largest firm in the industry set the price. The other firms
set/change their prices afterwards.
- Psychological pricing – consumers tend to match quality with high prices, some firms
price products higher to appeal to this type of customer eg. some brands of women’s
make up.
- Skimming or creaming – selling a new product at a high introductory price as some
customer are impatient to obtain the product. The price will fall then competitors enter
the market.
- Value pricing – cha
- charging low prices for high quality products. For this to be profitable firms have to
reduce their overhead costs.
- Price lining – a seller who identifies different areas of the market and prices the product
to match each/segment. Eg. Ford Motors sells Escorts, Telstar motor cars.
- Price discrimination – prices vary between customers and markets eg. some airlines sell
cheaper tickets during the off-season.

c. PROMOTION – making customers aware that the product exists. This can be done through
advertising, sales promotion, personal selling etc. this can be done through:

Advertising, sales promotion, public relations, personal selling.

Advertising – 4 main features:

- It is a non-personal sales promotion technique

- It is relatively long term
- The firm pays for the costs involved
- The sponsor is always identified

Types of Ads:

- Informative – educating the consumer eg. making the public aware that a new product
in on the market.
- Persuasive – convincing the consumer to buy the good or service
- Competitive – the producer of the product tries to gain market share by telling the good
points about his or her product and comparing these with his or her competitors.
- Collective, generic or cooperative – aims at getting the public to buy a product without
focusing on a particular brand eg. milk

FORMS OF ADVERTISING – advertising can be direct or indirect

- Direct eg. circulars and catalogues. Free samples or souvenirs

- Indirect eg. newspaper, magazines, trade papers, television and radio, slides and films,
posters and signs, special shop displays, sound cars (using loud speakers in cars to
advertise something)

Some advantages of advertising:

 - It provides demand, making mass production possible
- Through mass production, more people are employed
- It increase sales and therefore keeps costs down through economies of scale
- It encourages the production of goods of high standards

Some disadvantages of advertising:

- They sometimes deceive the public with exaggerated or untrue claims

- The cost of advertising is usually borne one the consumers
- Some ads are harmful because they encourage anti-social habits and behaviour.

Ad agencies - middlemen who work between the firm desiring the ad and television stations that
provide the ad media. These agencies:

- Create the ads

- Produce the ads
- Place the ads

Sales promotion is a short term incentive given to wholesalers, retailers or consumers by a firm to
encourage sales.

Sales promotion tools/techniques include: free samples or dollars, coupons (cents off a product),
gifts, price discounts, cash refund, extra volume for the same price, contests, point of purchase
displays eg. sweets, peanuts etc. trade shows.

Loss Leaders – products that are discounted in order at attract customers.

Some features of loss leaders are:

- It is usually a product that is popular so consumer know it is being sold at a bargain

price.
- Some are made scarce to discourage stockpiling
- There is a limit on how much a customer may buy.

PUBLICITY/PUBLIC RELATIONS – public relations handles the publicity of the firm. In the form of:

-press releases – provide info to newspapers, magazines, radio, TV etc. to draw attention to the
product.

- sponsored activities – such as sporting environmental and cultural events.

- flyers or booklets – explaining different features of the product for different interest groups eg.
students, teachers, housewives etc.

- scholarships – to employees and their relatives

- uniforms – provide for workers, so even after working hours they can continue to advertise the
firm.

Publicity - a long term effort by the firm and is usually not a cost to the firm in the long run because
the firm does not pay for the news items that are reported on them by the media.