MARKETING FUNDAMENTALS PDC

MARKETING FUNDAMENTALS
Introduction
In the old days, marketing was looked at as making a sale. However, today marketing
should be seen in the sense of satisfying consumer needs.
Marketing is so basic that it cannot be considered a separate function. It is the whole

business seen from the point of view of its final result, which is from the customer’s point
of view. Business success is not determined by the producer but by the customer.
Definition of marketing
Marketing comes in a wide variety of flavors based on audience, media platform and
business in today’s evolution and dynamic market place. Therefore, it’s no surprise that
marketers define what they do differently.
According to Philip Kotler marketing is a human activity directed at satisfying human

needs and wants through exchange processes.
According to the chartered institute of marketing , marketing is defined as a managerial

process responsible for identifying , anticipating, and satisfying customers’ requirements
profitably.
However, it should be noted that there are various definitions of marketing but the
following criteria can be used to determine a good definition of marketing.
It begins with customer needs and wants.
It includes more than just persuading customers.
It includes or involves all departments in the organization.
NAYIGA HARRIET-LECTURER MARKETINGPage 1

It applies to both profit and non-profit oriented organizations.
It involves or includes everybody in the organization.
Core concepts of marketing
1. Human needs and wants
This is the beginning point in marketing where needs can be both physical and
physiological.
Needs: A need is a state of felt deprivation of some requirements such as food, clothing,
shelter, etc… These needs are not invented by marketers, but they co-exisMARKETING
FUNDAMENTALS
Introduction
In the old days, marketing was looked at as making a sale. However, today marketing
should be seen in the sense of satisfying consumer needs.
Marketing is so basic that it cannot be considered a separate function. It is the whole

business seen from the point of view of its final result, which is from the customer’s point
of view. Business success is not determined by the producer but by the customer.
Definition of marketing
Marketing comes in a wide variety of flavors based on audience, media platform and
business in today’s evolution and dynamic market place. Therefore, it’s no surprise that
marketers define what they do differently.
According to Philip Kotler marketing is a human activity directed at satisfying human

needs and wants through exchange processes.

According to the chartered institute of marketing , marketing is defined as a managerial
process responsible for identifying , anticipating, and satisfying customers’ requirements
profitably.
However, it should be noted that there are various definitions of marketing but the
following criteria can be used to determine a good definition of marketing.
It begins with customer needs and wants.
It includes more than just persuading customers.
It includes or involves all departments in the organization.
It applies to both profit and non-profit oriented organizations.
It involves or includes everybody in the organization.
Core concepts of marketing
1. Human needs and wants
This is the beginning point in marketing where needs can be both physical and
physiological.
Needs: A need is a state of felt deprivation of some requirements such as food, clothing,
shelter, etc… These needs are not invented by marketers, but they co-exist marketing.
Wants: Wants are needs that have been shaped by culture and individual personality.
Wants are objects that satisfy needs, e.g thirst is a need that can be satisfied by cold
water, soda, beer, etc….
Demand: This refers to wants and needs that are backed by purchasing or buying power.
Companies should measure demand as not only whether customers will want to buy their
products but how many are willing and able to buy.

2. Product (services, goods and ideas)
This is anything that can be offered to a market for attention, acquisition use of
consumption that might satisfy a want or a need. It can be tangible or intangible.
3. Customer value, Satisfaction and total quality management.
a) Customer value is a difference between the values, the customer gains from owning
and using a product and the costs of obtaining the product.
b) Customer satisfaction. Is the extent to which a product’s perceived performance

matches a buyer’s expectations. If the product’s performance matches or exceeds
expectations of the expectations of the buyer is then satisfied.
c) Total quality management. Are programs designed to constantly improve the products
and marketing.
4. Exchanges, Transactions and relationship marketing.
This is the act of obtaining a desired object from some by offering something in return.
Transaction; Is a trade between two parties that involves at least two things of value.
Relationship marketing; Is a process of creating, maintaining and enhancing strong value

relationships with customers and other stakeholders.
Market ; This consist of all the potential and actual buyers of a product.
MARKETING ORIENTATIONS /PHILOSOPHIES/CONCEPTS.
Any organisation’s marketing efforts are guided by its marketing philosophies. These
marketing philosophies involve carrying out marketing in order to achieve stated

objectives. There are five marketing philosophies that an organisation can use. These
include the following;
Production Concept: This concept holds that consumers will favour those products that
are widely available and low in cost. Managers of production oriented organizations
concentrate on achieving high production efficiency and wide distribution coverage.
Therefore management should focus on improving production and distribution efficiency.
It looks at how much is produced.
The main pillars of this concept;
Demand must be exceeding supply of the products.
Production costs are high therefore improved productivity is needed to bring down the
costs leading to mass production.
Product concept: This concept holds that consumers will favour those products that offer
the best quality, performance and innovative features. Organizations focus their energy
on making superior products and improving them overtime. Therefore focus should be
put on product quality.
Selling concept: This concept holds that customers will not buy enough of the
organization’s products unless the organization undertakes a large scale selling and
promotion effort. Therefore it focuses on sales volume.
Marketing Concept: This concept holds that the key to achieving organizational goals
depends on determining the needs and wants of the target markets and delivering the
desired satisfactions more effectively and efficiently than competitors do. Therefore it
focuses on consumer satisfaction.
The main pillars of this concept;
Market focus.
Customer retention.

Coordinated marketing.
Profitability.
Societal marketing concept: This holds the idea that the organization should determine
the needs, wants and interest of target markets and deliver the desired satisfactions more
effectively and efficiently than competitors do, in a way that preserves or enhances the
consumer’s and the society’s well being.
ORIGIN AND DEVELOPMENT OF THE CONCEPT MARKETING.
Stage of economic life sufficiency; Human beings lived in small family groups. These
units carried out total tasks of meeting all their needs for food, clothing and shelter. This
meant absence of exchange. This therefore was a stage devoid of the concept of
marketing.
Stage of primitive communism; During this stage, communities banded together to carry
out economic activities in common. The land was held in common and the fruits of their
labour were shared in common.
The stage of simple barter; Some early societies operated on the principle of simple barter
to effect the distribution of economic goods. This was due to the discovery of the
principle of economic specialisation and its benefits on human productivity.
Specialisation meant that man must be prepared to engage in trading out their surplus.
The stage of local markets; During this stage economic specialisation increased the
importance of barter and encouraged the emergence of local markets. They first emerged
as trade affairs on specific days of the week or period in a year. However, they later
developed into forms of trading posts. During this stage, specialisation expanded the
concept of marketing where by the process of exchange of economic goods was through
specialised institutions that facilitated exchange.
The stage of money economy; Through barter trade promoted self sufficiency through
economic specialisation it remains a high insufficient method of exchanging goods

because of the differences in value and indivisibility of goods. The solution to this
problem came through a common medium of exchange that took various forms. This
solved the problems with barter trade.
The stage of capitalism; This rise of specialisation, local markets and money opened up
production for gains within the community. Successful people accumulated wealth and
exchanged it for other people’s labour. The basic commodities during this stage were
without branding, packaging and advertising and were that of searching for customers or
markets and moving goods from producers to consumer centers for the purpose of selling
to make gains.
The stage of mass production; The rapid growth of the world’s population, the
improvement of the means of transportation and communication, the development of
large cities and the movement of nations away from economic self sufficiency to
economic specialisation and accumulation of wealth stimulated the stage of mass
production. During this stage entrepreneurs saw this as a chance of growth of large scale
enterprises and improved productivity of labour. Management of organisations developed
how to organise men machines and money to maximise profitability on invested
resources and modern marketing practices were born.
The affluent society; An affluent society can be said to exist when a substancial number
of persons have a surplus of money over their basic biological needs and they constitute a
considerable market for goods and services that cater for psychological societies,
producers and sellers of goods have to probe into the question of what want rather than
what they need and adjust their production capacities and product lines to meet the
interpreted wants.

IMPORTANCES OF MARKETING
Marketing touches all of us everyday in our lives and plays an important role in our
economy as a whole. The following are some of the importance of marketing;
Through marketing, producers are able to find out what consumers what and they can
therefore produce what they can sell, hence avoiding surplus and losses.
Marketing also enables producers to produce quality goods because, if their product are
of low quality, the consumer will shift to consumption of better quality products.
Marketing further enables the organization to look at social responsibilities like putting
up houses for the poor, providing scholarships, etc.
Marketing enables the organization to get good reputation and hence be able to maintain
their customers and attract others, hence being able to make profits.
Marketing links all other functions of the organization since through marketing research,
new ideas will be brought, which ideas encompass all other departments.
Marketing enables consumers to get a variety of goods and services; hence they are able
to improve their standards of living.
Marketing offers employment opportunities to people who can effectively run the
organizations; and others who are employed as marketers.
As a result of increased products and services due to marketing, their will be increased
growth in the economy and hence economic development.
Through marketing, people are able to get entertainment and news when companies come
up to sponsor activities like sports and news over radios and televisions.
Marketing is a source of revenue because government taxes revenue from marketing

activities.

MARKETING MANAGEMENT
According to Philip Kolter a marketing management is analysing, planning,

implementing and controlling of programs designed to bring about desired exchange with
target markets for the purpose of achieving organizational objectives.
MARKETING MANAGEMENT PROCESS.
This is the process of planning, organising, implementing and controlling marketing

activities to facilitate and expedite cahnges effectively and effeciently. By Effectively; we
mean the degree to which an exchange furthers an organisation’s objectives. Efficiently;
we mean the miximisation of the resources that an organisation must expend to achieve a
specific level of desirable exchanges. Thus, the purpose of the marketing management
process is to facilitate highly desirable exchanges and minimise as much as possible the
costs of doing so.
ILLUSTRATION OF THE MARKETING MANAGEMENT PROCESS.

👣DJ*HAPZO👆
The elements of the marketing management process can be

analyzed as below.
 Analyzing marketing opportunities; This is to identify and evaluate the

organization’s opportunities, a company needs to build and operate a reliable
marketing information system to identify customer needs and wants, their
locations, buying practices, etc… Formal research may also be done by use of both
primary and secondary sources. The collected data is well organized using
advanced statistical methods and models for the company to identify the effect of
marketing forces on sales.
 Researching and selecting target markets and positioning the offer; Researching
and selection of target markets is possible by knowing how to measure and
forecast the attractiveness of every given market. This requires estimating the
market’s overall size, growth and profitability. Marketers must understand the
major techniques for measuring market potential and forecasting future demands.
The marketing measures and forecasts guide marketers in deciding on the type of market,
and new products to focus on. This is done through market segmentation and selection of
target markets that can be served.
 Market segmentation; This is the task of dividing a market into distinct groups of
buyers on the basis of needs, characteristics, or behavior who might require
separate products or marketing mix.

Market segment; This is a group of buyers or consumers who respond in a similar way to
a given set of marketing efforts. The market may be segmented according to the graphic
factor, demographic and behavioral factors.
 Market targeting; This is the process of evaluating each market segment’s

attractiveness and selecting one or more segments to serve. A company should
target segments in which it can profitably generate the greatest consumer value,
and sustain it over time.
 Marketing positioning; This is arranging for a product to occupy a clear distinctive
and desirable place relative to competing products in the minds of target
customers. Marketers plan positions that distinguish their products from
competing products in the minds of target customers. Marketers plan positions that
distinguish their products from competing brands and give them the greatest
strategic advantage in their target markets.
 Product positioning; This is the place occupied by a product relative to
competitors’ products in the minds of the customers.
 Designing marketing strategies:
For a company to serve its target markets more effectively than competitors, it needs to
develop a differentiating and positioning strategy for that target market. The company has
to decide how it will defer from its significant competitors.
Marketing strategies are marketing topics by which the business unit hopes to achieve its
marketing objectives. It consists of specific strategies for target markets, positioning the
market mix and marketing expenditure levels.
 Planning marketing programs:
A marketing program is a systematic process that involves accessing marketing

opportunities and resources determining marketing objectives and developing a plan for
implementation and control.

A marketing plan includes the frame work and entire set for activities to be performed. It
is the written document or blue print for implementing and controlling an organization’s
marketing activities. A firm must have a plan for each marketing strategy it develops. A
marketing plan is a continuous process because the firm’s plan must change as forces in
the firm and the environment change.
The planning process calls for information about the differences if any, between the
objectives and current performance. Probable performance in the future should be
assessed, then the current marketing strategy can be altered or objectives changed if
forecasted performance does not meet the desired objectives in the next planning period.
THE MARKETING PLANNING CYCLE:
Marketing plan is a circular process because it has to move from the beginning to the end,
which is the beginning point for the next period.
The doted lines indicate that the planning cycle is un directional. Feedback is used to
coordinate and synchronize all stages of the planning cycle.
The duration of maarketing plan vary, plans which cover a period of one year or less are
called short term plans. Medium term plans cover periods ranging from between two to
five years. Marketing plans that cover periods stretching over five years are generally
viewed as long term plans.
Organisating implementing and controlling; Management has to build a marketing

organisation capable of implementing the marketing plan. This involves taking a decision
on different marketing functions like marketing research, selling, advertising, customer
service etc… Each of the sales personnel has to work closely with those of other different
functions to facilitate implementation of the plan.
The managers meet with subordinates to review performance periodically, uphold their
strength and point out weakness and suggest ways of improving. They also consider the
control methods to monitor the extent to which the set objectives are achieved.
Management also has the task of making sure that the company is achieving the sales,
profits of other goals established in the plans. It further has to get ways of measuring on
going performance, determining causes of any serious gaps in performance and deciding
on the best corrective action to close the gaps between goals and performance.
MARKETING ENVIRONMENT
These are the factors and forces outside marketing that affect marketing management’s
ability to develop and maintain successful transactions with it’s target customers. The
marketing environment is made up of micro-environment and macro-environment.
Micro-environment:
These are factors/forces to the company that affect its ability to serve its customers.
Marketing management’s job is to attract and build relationships with customers by
creating customer value and satisfaction. However, marketing managers cannot
accomplish this task alone. Their success will depend on other factors in the company’s
micro-environment i.e.
The company: In designing marketing plans, management tasks other groups into
account. Such as Top management, Finance, Research and Development (R&D),
purchasing, manufacturing, Accounting etc….
The suppliers: Suppliers are an important link in the company’s overall customer value
delivery system. They provide the resources needed by the suppliers to produce its goods
and services. Supplier problem can seriously affect marketing. Marketing managers must
watch supply availability, they also watch/monitor the price force, price increase that can
affect the company’s sales volume.

Marketing Intermediaries: These are firms that help the company to promote, sell, and
distribute it’s goods to final buyers. These include resetters, physical distributors,
marketing services agencies and financial intermediaries.
Customers: The Company needs to study its customers markets closely. Consumer
markets consist of individuals and households that buy goods and services for personal
consumption. There are other markets such as business markets, reseller markets,
government markets etc…. Therefore each market type has special characteristics that
call for careful study by the sellers.
Competitors: The marketing concept states that to be successful, a company must provide
greater customer value and satisfaction than its competitors do. Thus marketers must do
more than its competitors to the needs of target consumers. They also must adopt
strategic advantage by positioning their offerings strongly against competitor’s offerings
in the minds of consumers.
Publics: Public is any group that has an actual potential interest in or impact on an
organization’s ability to achieve its objectives. Publics such as financial, media,
government etc…..
Macro-environment:
Changes in the wider macro-environment may not be so close to the company’s day to
day activities but they are just as important These include;
Political and Legal: These are laws, rules and regulations, government agencies ad
pressure groups that influence and limit various organizations and individuals in a given
society. Marketing decisions are strongly affected by the developments in the political
environment.
Economic: Markets require buying power and people. The economic environment
consists of factors that affect consumer purchasing power and spending patterns.
Marketers must pay close attention to major trends and consumer spending patterns both
cross and within their world markets.
Social and cultural: This is made up of institutions and other forces that affect a society’s
basic values, perceptions, preferences, behaviors etc. People grow up in a particular
society that shapes their basic beliefs and values.
Technological: These are forces that create new technologies, creating new products and
market opportunities. This is now the most dramatic forces shape our destiny. New
technologies create new markets and opportunities, companies that do not keep up with
technological changes soon will find their products outdated so they will miss new
product and market opportunities.
IMPORTANCES/ROLES OF MARKETING TO A BUSINESS
Analyzing market opportunities by conducting marketing research.
Identifying the target market for products and services.
Product planning and development (R&d).
Formulating price structure
Packaging and branding

Managing distribution channels
Sales force management.
Carrying out promotional activities.
Customer service
MARKETING INFORMATION SYSTEMS (MIS)
Marketing Information systems: Is a collection of people, equipments and procedures to

gather, sort, analyze, evaluate and distribute needed timely and accurate information to
marketing decision makers.
Management needs to monitor the larger forces in the marketing environment if it is to

keep its products and marketing practices current. Therefore, information has become an
important resource as money, materials, machines and men.
Many companies have not yet adapted to the intensified information requirements for
effective marketing and may have equipment such as computers, fax machines or tape
recorders but do not have a marketing research department.
Three developments have increased the need for marketing information and they are the
shift from;
Local to national and global marketing.
Buyer needs to buyer wants.
Price to non price competition.
However, apart from those it should be noted that there are also other factors at work.
FUNCTIONS OF M.I.S
Gather information

Sort information
Analyze information
Distribute information
What kind of information
It must be needed by the user
It must be timely
It must be accurate
Who utilize the information
Marketing managers
Brand and packaging
Sales manager
Commercial manager
Other executives in the marketing department.
Sub systems of MIS
Internal data/records
Information analysis
Marketing intelligence
Marketing research
THE THREE MAJOR FUNCTIONS OF M.I.S

It interacts with the marketing managers to assess the information needs of managers.
It develops the information needed through its sub-systems from the marketing
environment i.e external and internal.
It distributes information to the managers/marketing decision makers.
ILLUSTRATION OF M.I.S
analyzing, planning, organizing, coordination, controlling and implementation
M.I.S
M.I.S

MARKETING RESEARCH
In order to be able to carry out marketing activities in the organization, the first task of
the marketing department is to scan the environment and see what opportunities are
available. This requires understanding the markets.
New firms usually carry out a preliminary research to find out whether it would be
worthwhile distributing their products. Marketing research will greatly assist a company
at this stage to understand its markets and know the opportunities available in the market
place.
Definition:
Marketing research is a systematic design, collection analysis and reporting of data and
findings relevant to a specific marketing situation facing the company.
Suppliers of marketing research
A company can obtain marketing research in a number of ways;
Small companies can engage students or academicians at a local college to design to

design and carryout the project.
ii) They can hire marketing research firm.
iii) Most large companies on the other hand their own marketing research, departments.
The marketing research process.
Define the problem and setting objectives:

Defining the research problem is difficult as it can be too broad or too narrow. A Problem
well defined is half solved. The problem to be defined in clear and precise terms. If the
problem is not clear, the research results may be useless. The research objectives should
be agreed upon. These should be SMART. There are three types of research;
Exploratory ( to gather preliminary data )
Descriptive (to ascertain certain magnitudes )
Causal ( to test a cause and effect relationship )
Formulate the research design/research plan:
Data sources: The research plan can call for gathering secondary data, primary data or
both.
DATA SOURCES
Data comes from two sources i.e ;
Secondary data
Primary data
Sources of secondary data: This is data that already exists, no having been prepared for
the starting point in research.
1. Internal sources such as customer financial sales reports, etc
2. Government publications like census of manufacturers etc..
3. Periodicals for example trade magazines etc
4. Commercial data e.g. research firms

5. Online databases e.g. internet
6. Advertising agencies e.g. contract, graphics
7. World bank
8. Embassies
Advantages of using secondary data
Low cost
Readily available
Saves time
Clarifies the problem at hand
May provide a smooth to the problem.
May alert the marketing researcher to potential problem.
Disadvantages of using secondary data
Unavailability of data required by the researcher.
Existing data may be outdated.
Inaccuracy
Unreliability.
Insufficiency.
Lack of relevancy.
Primary data: These are data specially prepared for a particular problem to aid decision
making relating to the problem. Primary data can come from salesperson’s reports,
dealers and consumer reports.

b. Research approaches/data collection methods
Primary data can be collected in the following ways,
Observation. Here fresh data is gathered by observing the relevant people, action and
situations.
Reasons for preferring observation to other methods.
When it is the only method
When people cannot remember
When dealing with respondents who are not aware of the product.
When people cannot accept their behavior.
Conditions for use of observation.
The must be observable.
The occurrence of the event must be predictable, repetitive and recurrent.
The people observed should not be aware of the being observed
The event must take place in a short life span
ii. Interviewing: This is primary data which is collected by asking respondents questions
and they give answers. This specially collects descriptive data e.g attitude, behavior,
perception and opinion.
iii. Experimentation. This is a scientifically valid research that calls for selecting matched
groups of subjects subjecting them to different treatments and checking whether observed
response differences are statistically significant.

There are two issues i.e. independent and dependent variables. This is the manipulation of
variable in such a way that the effect can be measured in one or more variables.
Purpose: This is to be able to establish the causal relationship i.e. cause and effect.
Cause: this is changing i.e. increase or decrease in the independent variable e.g. the effect
of advertising on the scale volume.
Groups in experimentation:
Treatment group
Control group
Treatment group. This is the group or section of the sample which is exposed to the
manipulation of independent variable.
Control group. This is the section of the sample where the independent variables are not
changed. These are static displays. i.e. the measure these groups before and after.
iv. Surveys. Surveys involve questioning subjects and collecting their responses through
personal interviewing, telephone interview or personal onnaires.
c. Research instruments.
I. Questionnaires. This the most common instrument in collecting primary data. The
questionnaire consists of a set of questions presented to respondents for their answers.
ii. Mechanical instruments, these are used less frequently in industrial marketing
research. E.g. Galvanometer (to measure interest, emotions aroused), Eye camera (to
study eye movements), Audiometer (to record which channels are frequently set). Etc

Sampling plan: The marketing researcher must design a sampling plan which calls for
three decisions.
i) Sampling unit: Who is to be surveyed? This requires determining the target population
that will be sampled.
Ii) Sample size; How many people should be surveyed.
iii) Sampling procedure; How should the respondents be chosen.
Contract method.
How should the subject be contracted?
Mail questionnaire
Telephone interviewing.
Personal interviewing.
Collecting the information.
The researcher must now collect the data. This is the most expensive phase. Several
challenges are likely to occur during this exercise.
Analyzing the data:
This step calls for extracting pertinent findings from the data. The researcher tabulates the
data and computes averages and measures of dispersion for the major variables.
Presenting the findings:
The researcher should present major findings that are relevant to the major marketing
decisions facing the marketing management.
AN ILLUSTRATION OF A MARKETING RESEARCH PROCESS.

RELATIONSHIP BETWEEN MARKETING RESEARCH AND MARKETING
INFORMATION SYSTEMS.
MARKETING RESEARCH
MARKETING INFORMATION SYSTEMS
Emphasizes the handling of external information.
Handles both internal and external data.
It is concerned with solving problems.
It is concerned with preventing as well as solving problems.
Operates in a fragmented intermittent fashion on a project basis.
Operates continuously i.e.it is a system.
Need not to be computer based.
It is a computer based project.
Tends to focus on past information
Tends to be future oriented.

It is one source of information input for a marketing information system.
It includes other sub systems besides marketing.
IMPORTANCES OF MARKETING RESEARCH TO BUZINESS.
Helps to get information about the competitors.
Information is very important in the marketing activities.
Information is an asset to the business.
It helps the managers to know the changes in the marketing environment.
It helps the managers to make better informed decisions.
REASONS TO CARRYOUT MARKETING RESEARCH
When there is need for information.
When the decisions need information to be made.
When the needed resources for making research are available.
When there is an opportunity to make research.
When the benefits of conducting research out way the costs.
REASONS NOT TO CONDUCT MARKETING RESEARCH.
Lack of enough resources.

Sometimes research result would not be useful.
When the opportunity of conducting research has passed.
When the decision has already been made.
When mangers cannot agree on what they want to know.
When the decision making information already exists
When the costs of conducting information research outweighs the benefits.
PROBLEMS THAT ARE FACED BY RESEARCHERS IN THE LDCs.
Limited resources
Limited information
Cultural hindrances
Low technological development
Political instabilities
Illiteracy
MARKETING MIX
The marketing mix is one of the major concepts in modern marketing. The marketing mix
is a set of controllable variables that a firm blends to produce the response that it wants in
a target market. The variables of the marketing mix are categorised into two. The first set
is known as the 4ps;
The marketing mix is composed of the 4ps and the extended marketing mix 3ps making
7ps.
The 4ps.
Product

Price
Promotion
Place
The 3ps
Physical evidence
People
Process.
N.B Therefore, the general elements making up the marketing mix is called the 7ps. The
4ps are called the hard mix while the 3ps are referred to the soft mix.
IMPORTANCE OF THE MARKETING MIX.
It enables the company to produce the right product features.
It enables the company to set the right price ranges.
It enables the company to select the best distribution channels.
It enables the company to select the right promotional tools.
It enables the company to manipulate and vary the 4ps each time depending on the
circumstances.
It enables the company to plan and combine the mixes appropriately.
It enables the company to prove the effectiveness of marketing.
THE MARKETING MIX ELEMENTS.
PRODUCT

A product is anything that can be offered to the market to gain attention for use,
acquisition or consumption and that might satisfy a need or a want. A product therefore
stands for the combination of goods and services that a company offers to the target
markets. The attributes that are looked at in a product are; Quality, Features, Options for
use, Styles, Brand name, Size, Package etc…
Levels of a product.
A product includes tangible products (physical goods) or intangible products (services).

Product planners think about a product in three levels i.e the core product, actual product,
and augmented product.
AN ILLUSTRATION OF THE LEVELS OF A PRODUCT
Augmented product
Core products
Tangible product

Core product: This is the benefit of a product. The satisfaction derived after use of a
product. e.g. After using tooth paste such as Colgate, clean teeth/ white teeth is the core
product. This is the problem solving parts of the products from which consumers derive
satisfaction.
Tangible product: This is the packaging of the benefits attributes such as shape, texture,
color, quality, design, packaging, etc… Example, like a car’s features such as size, color,
model, capacity, design, brand, etc… combine to deliver the benefits like comfort,
quality, safety, durability, stability, fuel economy etc…
Augmented product: This is additional information/ benefits that are not core/major
benefits of a product e.g. instructions, after sales services, lockers, warranties,
installation, repairs etc…
PRODUCT CLASSIFICATION
CONSUMER PRODUCTS
Consumer products are goods that are bought by final consumers for personal
consumption.
CLASSIFICATION OF CONSUMER PRODUCTS.
Consumer products can be classified on two bases i.e
Rate of consumption and physical attributes (tangibility).
Consumer buying habits.
CLASSIFICATION ON THE BASIS OF RATE OF CONSUMPTION AND

TANGIBILITY.
NON DURABLE CONSUMER GOODS.
These are tangible goods normally consumed once or a few times. These include goods
like soap, salt, beer, etc… These goods are consumed fast and are frequently purchased.

These goods are therefore likely to be widely distributed and are available in many
locations.
DURABLE CONSUMER GOODS.
These are tangible goods which are normally used over long period of time e.g
refrigerators, clothing, machines, tools etc…These goods require more personal selling.
A higher profit margin charged on them and many promotional activities are carried out
of them.
CLASSIFICATION ON THE BASIS OF CONSUMER BUYING HABIT.
CONVINIENCE GOODS.
These are goods which a consumer is willing to spend very little effort in their purchase.
The consumer is even willing to substitute brands rather than having additional efforts to
buy a particular brand. The goods are handled by most retail outlets and are lowly priced.
Examples of these goods include detergents, match boxes, tooth paste, chewing gum etc.
SHOPPING GOODS.
These are goods for which a consumer has developed strong preferences. They require
the initiation of a search to obtain information and develop preferences. These goods are
got in a fewer outlets and there prices are relatively higher. Examples include; appliances
such as radios, TV sets, furniture, clothing, shoes etc.
SPECIALITY GOODS

These are goods for which a consumer is willing to spend the most effort required to
purchase the most preferred item. The consumer is not willing to take any substitutes.
These goods are relatively very expensive and are consumed over a long period of time.
They are normally sold in one or a few outlets. Examples include luxury goods such as
golden jewelry, perfumes etc.
B. INDUSTRIAL GOODS/PRODUCTS.
These are goods that are bought to be used for further production of other goods or as raw
materials to be used in the production process.
Consumer goods and industrial goods can be differentiated basing on who has bought the
good and the reasons for which the goods have been bought.
CLASSIFICATION OF INDUSTRIAL PRODUCTS.
Industrial products may be classified mainly into two as production goods and support
goods:
Production goods.
These are goods which are used in the manufacture of final products and they can
physically be seen in the final product. Production goods are grouped into two as:
Raw materials
These are the best components in the manufacturing process and they contribute to about
80% of the final product. Examples of raw materials are timber, iron, cotton etc.
Component parts.
These are goods which are manufactured by an organization but are used in the
manufacturing process of other organization. E.g. a company may manufacture door
hinges which are used by a car manufacturer in its car doors.

Support goods
This class consists of goods which are purchased to assist in the production of the
finished goods and they include the following;
Installation
This consists of buildings and fixed equipments such as machinery.
Accessory equipments
These include tools and office equipments. The tools are equipments used in the repair
and servicing of machinery while office equipments include items like computers,
photocopiers, printers etc.
Supplies/Consumables
These consist of items such as oil and grease which are used in the machines and other
items like stationery, paper clips, brooms, disinfectants etc.
Utilities.
These include water and electricity used in the organization.
Services.
These are benefits provided to assist the on going activities. This category includes
maintenance and repair services and consultancy services.
These are goods which have little search effort extended, they are brought frequently, low
priced, widely distributed, manufactured primarily, advertising and packaging is very
important.
Types of convenience goods.
Staple goods: These are goods purchased regularly e.g. salt, sugar, carry powder,
matchbox etc..

Impulse goods: These are goods with little chances to be purchased e.g. Alcohol, beers
etc
Emergency goods: These are goods purchased when the need is urgent e.g. medicines,
sanitary pads etc…
Shopping goods:
These are goods where buyers can seek some alternative therefore sellers of shopping
goods have high chances of gaining or losing customers. More time is needed to plan for
purchasing, consumers compare prices and quality of the products and the purchase is not
so frequent and the goods are not so widely distributed.
Specialty goods: These are goods which have no alternatives and are accepted goods.
They have unique qualities or brand identity. Buyers will make special buying effort.
Their distribution is limited and is exclusively arranged. The retailers may have
exclusively rights and niche strategy. Goods are relatively expensive. E.g. Godiva
chocolate.
N.B Caveats:
Some products are hard to classify because one’s shopping goods are another
convenience goods.
BRANDING.
A brand is a name, sign, symbol, or design or a combination of them intended to identify

the goods and services of one seller or a group of sellers and differentiate them from
those of competitors.
Qualities of a good brand name.

It should suggest the product benefits
It should be easy to pronounce and remember
It should be legally protected
It should be distinctive
It should be acceptable and adoptable to any advertising media.
No competitor should have the same brand name.
It should not carry poor meanings in other countries or languages
Importance of branding.
To the consumer
It assists in the identification of the preferred products.
It assists the consumer’s memory.
It helps to give the consumer references, habits and loyalty
It reduces the level of perceived risk so improve the quality of the shopping experience.
It provides psychological reassurance or reward.
It reduces the time spent in shopping.
To the seller/supplier
It helps to position the product in the minds of the customers
It permits premium pricing.
It differentiates the products of the seller from those of competitors.
Encourages customer loyalty/retention and repeat in the buyer behavior.

It assists in the development and use of integrated marketing communications
PACKAGING.
These are activities of designing and producing the container or wrapper for a product.
The container or wrapper is called the package.
There are three forms of packaging;
Primary packaging; This refers to the product’s immediate container that holds the
content e.g a bottle containing soda or a tube of tooth paste.
Secondary packaging; This refers to the material or outer cover that holds and protects
the primary package e.g a box that carries the toothpaste tube.
Tertiary/shipping package; This refers to containers used for carrying secondary packages
when transporting and storing.
IMPORTANCES OF PACKAGING.
It protects the product.
Brand identification
It is a point of purchase advertising
It facilitates product transportation
It assists in the storage of a product
It offers convenience for customers especially in self-service retail outlets such as

supermarkets and departmental stores.
Promotes the company and brand image
It gives for branding and labeling plus information about the product

LIMITATIONS OF PACKAGING.
It is expensive to design packaging materials. This ultimately increases the cost of the
product.
Packaging materials might be hazardous to life when used for other purposes.
Packaging can be deceptive and can lead to alteration.
It can also lead to environmental degradation.
Etc….
FACTORS TO CONSIDER IN DEVELOPING A PACKAGE FOR A PRODUCT.
Customer needs in terms of convenience, use of space and the package should be able to
sell itself.
Reseller’s consideration e.g convenience of the product and maximum use of the space.
The costs involved which determines quality, quantity and distribution.
Environmental consideration i.e the packages should be environmental friendly or

recyclable.
Nature of the product basing on its shape and size, reactivity, fragility etc…
Legal requirements e.g in some countries the use of polythene materials for packaging is
illegal.
WHY IS IT NECESSARY TO CHANGE PROCUCT PACKAGING?
When the product does not stand out so much.
When there is need to update product outlook.
To change customer perception
When there is need to increase ease of use of a product.

On a small promotion budget, may be most effective way to increase sales.
When the product has reached maturity (decline stage in the product life cycle)
When the product has been faked by some people.
NEW PRODUCT DEVELOPMENT.
New product development is coming up with a totally new product or new features on the
already existing product.
New product development is a risky business; however, it is mainly done because of

competition and the product life cycle (PLC), which holds that all products follow the
stages of introduction, growth, maturity and decline.
Inevitably, therefore, if a number of a company’s existing products are the

maturity/decline stage and the company doesn’t carry out new product development the
company’s profits will decline.
NEW PRODUCT DEVELOPMENT PROCESS.
Idea generation: New product ideas can be generated from employee suggestions the
R&D function or simply by observing competitive activity and listening to customers.
Idea screening: Each idea is analyzed in terms of prescribed criteria including its potential
development, market potential, it’s likely PLC financial and other resources required, the
company’s capability to market the product effectively and the likely return on
investment.
Concept development and testing: Screened ideas are then developed into conceptual
products which meet identified customers needs and can be packaged to sell to the market
segment.

Market strategy: A draft marketing plan then needs to be produced to indicate short and
long term sales, profit and market share objectives, together with details of the marketing
mix.
Business analysis: This stage involves more comprehensive marketing research, a

detailed competitor analysis and a full analysis of the resources required to launch the
product successfully and to achieve the sales targets.
Product development: Prototypes of the new product need to be produced, tested and
modified as necessary.
Test marketing: The product can be tested with a selected group of customers in a
particular geographical region. It can involve simple trial or be supported by testing,
various marketing mixes to see which has the most effect on sales.
Commercialization: Essentially these are decisions taken after successful test marketing
on when to launch where to launch, how to launch and which initial groups should be
targeted.
Post launch evaluation: The launch itself needs to be tracked and performance against
targets evaluated, together with competitor’s reactions. Modifications to the marketing
mix may be required and decisions will need to be made as to which further groups or
regions the new products should be marketed.
CATEGORIES OF A NEW PRODUCT DEVELOPMENT.
Real innovation: This is when there is demand for a product but no existing similar
products; such as product is hard to sell, more likely to require extensive information.
Adoptive replacement: These are products that introduce significant changes and replace
existing products. Such require relearning the product.

Imitative products: This is where products are new to the marketer but not new to the
market. Such products have little or a minor change made from existing products
therefore it is easier to explain to customers by convincing them that there are minor
changes which are worth it.
REASONS WHY NEW PRODUCTS FAIL.
Ineffective nature of the product. i.e if the product appears ineffective in terms of quality
features, design, size and other characteristics.
In appropriate pricing decisions. i.e when the price of the product is not preferred by
customers of a particular market segment.
Distribution problems especially when the company does not widely distribute the
product among various channels i.e when there is limited access to customers.
Process problems i.e if the rules, regulations, policies and procedures of a company are
hard and difficult to be adjusted to the customers.
People problem i.e if the human resources used in serving customers in with the
company’s products are not having good qualities or have ineffective skills.
A physical evidence problem i.e if the company’s physical out look is not forth coming in
terms of the nature of the buildings, equipments and sorroundings. Customers may
associate that with ineffective products hence lower sales.
Poor timing of the product i.e if the company brings the product too early or too late as
compared to the time when the product may have been required.
REASONS FOR SUCCESS OF NEW PRODUCTS.
Superiority i.e the degree to which the new product has a clear advantage over other
previous products.

Sociability i.e the degree to which the new product is associated with consumer value.
Satisfaction i.e the degree to which the new product satisfies the consumers felt needs.
Simplicity i.e the degree to which the consumer finds the product easy to understand and
use.
Separability i.e the degree to which the new product can be tested on trial basis with
limited investment by the consumer.
THE PRODUCT LIFE CYCLE (PLC)
Introduction Growth Maturity Decline
1 2 4
Sales

Research & Development Time and output
(R&D)
1st Introduction stage: This is the stage where the research and development and the idea
is generated and it is the initial stage. Here there are no profits realized yet.
2nd Growth stage: This is the stage where the sales start to grow and here profits start to
be realized and the sales also start to grow.
3rd Maturity stage: this is the stage where the sales are very high and profits are also at
the pick, everything here is booming.
4th Decline stage: This is normally a stage which comes after the maturity stage. Here the
sales start to decline and the profits also drop. It is at this stage that the product needs to
be renewed and make the product appear new.
NOTE:
Not all products follow the S- shaped product life cycle because some products are
introduced and they die quickly while others stay longer and can be recycled into new
products.
The product life cycle concept can be applied to what is known as;
Styles: A style is a basic and distinctive mode of expression in clothes, art, etc… Once a
style has been invented, it can last for generations.
Fashion: This refers to a currently accepted popular style in a given field. They tend to
grow slowly and remain popular for a while then they decline slowly in sales and profits
reduce.
Fads: These are fashions that enter quickly, are adopted with great zeal; they reach a
speak and decline very fast. They last for only a short time and tend to attract only a

limited demand. They do not survive for long because they normally don’t satisfy a
strong need and will.
WHY THE PLC FLACTUATES/VARIES/CHANGES.
Differences in tastes and preferences.
Changes in technology.
Competition levels.
Intensity of marketing programs.
Changes in social habits and customs.
ADVANTAGES/MERITS OF THE PRODUCT LIFE CYCLE.
The orderly step by step process can help bring control to a complex and risky project.
The product life cycle can describe the product class, form/ brand
And this applies differently at different stages.
The product life cycle can be applied in products which are Fads, Fashions and Styles
respectively.
The product life cycle can be used by marketers as a useful frame work for describing
how products and markets work.
Careful use of the product life cycle can help in developing good marketing strategies for
different stages of the product life cycle.
DEMERITS OF THE PRODUCT LIFE CYCLE.
Not all the products follow the five steps and S-shaped product life cycle because some
products fail and others stay longer at the different stages.

Using the product life cycle for forecasting product marketing strategies presents some
practical problems. e.g identifying the stage due to the length of the stages and the shape
of the curves.
Using the product life cycle to develop marketing strategies is difficult because strategy
is both a cause and result of the product life cycle e.g the product life cycle position can
suggest best marketing strategies.
PRICE:
Price may be defined as the monetary value of a product or service. The concept of price
is central to micro-economics where it is one of the most important elements in resource
allocation theory also known as price theory.
Price stands for the amount of money or other considerations exchanged for the purchase
or use of a product, service or idea. Prices includes retail prices, wholesale prices,
discounts, allowances and credit terms.
The price must be in line with the perceived value of the offer or else buyers will
purchase competing products. Price is the only element in the marketing mix that that
produces revenue. All the other elements represent costs yet price is the only flexible
element of the mix.
PRICING.

This is the setting of price of a product or a service.
Factors to consider in pricing;
Pricing objectives
Marketing strategy
Cost of production
Other marketing mix variables
Competitors’ prices
Buyers’ perception
Suppliers’ bargaining power
Legal issues
PRICING OBJECTIVES/AIMS/TARGETS
Pricing objectives provide direction to the whole pricing process. Determining what a
company objectives are the first step in pricing objective and when deciding on
pricing objective and when deciding on pricing objective you must consider the
following;
1. The overall financial, marketing and strategic objectives of the company.
2. The objectives of your product or brand.
3. Consumer price elasticity and the price of products.
4. The available resources.
NB: Consideration of the above factors will guide a company towards setting SMART
pricing objectives.
Common pricing objectives;

1) To maximize long run profits
2) To increase sale volume as well as expand the market share of the organisation.
3) To obtain a target rate of return on investments
4) To stabilize the market price.
PRICING APPROACHES/STRATEGIES.
1. Cost based pricing:
This acknowledges that a business cannot trade indefinitely below the cost fixed and
variable costs need to be known so as to be able to calculate the breakeven point.
This is
a) Cost-plus pricing: this is adding a standard mark-up to the cost of the product.
b) Breakeven analysis and profit pricing: this is setting price to breakeven on the
costs of making and marketing a product or setting prices to make a target profit.
2. Value based pricing:
This is setting prices based on buyers’ perceptions of value rather than on the seller’s
cost. Therefore it offers the right combination of quality and good service at a fair
price.
3. Competition based pricing/competitor oriented pricing:
Here competitor’s prices have to be put into consideration, hence market penetration
pricing. Hence a basis for setting the prices for the products.
a) Market penetration pricing: This is where the company fixes a price lower than its
competitors’ prices in order to penetrate the market so as to capture a large share
of it.

i) Going-rate pricing: This is where a company keeps its prices at the average level
charged by the industry. Here the company sets prices based largely on following
competitors’ prices rather than on company costs or demand.
ii) Sealed bid pricing: this is where companies compete for jobs on the basis of bids,
for example tenders to supply certain products. Here the company sets the price
based on how the firm thinks competitors will price rather than on its own costs or
demand used when a company bids for jobs.
4. Demand oriented pricing/New product pricing:
a) Market skimming pricing: Here a higher price is charged in the initial stages of the
introduction of a new product. The producer takes advantage of the inelastic
demand. The company makes fewer but more profitable sales. e.g celtel when had
just come to Uganda.
b) Market penetration pricing: Here a low price is set for a new product in order to
attract a large number of buyers and a large market share. For example MTN used
this strategy when it came to Uganda.
c) Price discrimination: Here companies charge different prices in different markets
for same product depending on demand, status, ignorance of consumers etc.
PRICE ADJUSTMENT STRATEGY
1. Segmented pricing: This is selling a product or service at two or more prices,

where the difference in price is not based on differences in costs.
2. Psychological pricing: This is a pricing strategy or approach that considers the
psychology of prices and not simply the economics. The price is used to say
something about the product.
N.B: Reference prices: These are prices that buyers carry in their minds and refer to
when they look at a given product.
The pricing tricks that companies use.
1. Charge higher for a product and people will think it is better.
2. Create a fake price and then give a fake discount.
3. Pretend you have made your product better.
4. Charge more for buying more.
5. Add a toy and charge anything.
PROMOTION:
This is making the product known to the customers. This stands for the activities
which communicate the merits of the product and persuades target customers to
buy.
4Ps Vs 4Cs
 Promotion -Communication
 Product -Customer care
 Price -Cost of the product
 Place -Convenience
Relationship between promotion and other 3Ps.

 Promotion; communicates to all the marketing mix. Every element of the
marketing mix communicates something to the customers.
 Product; this communicates through the features on the packaging i.e. quality,
color, material, shape, texture etc..Branding also communicates e.g. the name,
logos, signs, symbols etc
 Price; this does a lot of communication. Some people think that high prices are a
sign of good quality products. It also indicates a god image of the organisation i.e.
good will.

 Place; the place also gives a very important communication about the product and
these are the outlets which determine the quality of a product. The organisation of
a layout of a place. Some organisations select the distributor of their product in a
given area.
Marketing Promotion Mix

 Promotion:
This is an element in an organisation’s marketing mix that serves to inform, persuade
and remind the market of a product and owe the organisation selling it in hopes of
influencing the recipient’s feelings, beliefs or behavior.
 Promotional strategy:
This is a promotional plan and it contains all the above i.e. advertising, sales
promotions, personal selling, publicity and direct marketing.
 Promotional tools
1. Advertising
2. Sales promotions
3. Personal selling
4. Public relations
5. Direct marketing
NB: The above promotional tools make the promotion mix. First understand the type
of your product so as to select the promotional tools e.g.
-In consumer markets: advertising is the most appropriate, direct marketing and sales
promotion.
-Industrialized markets: personal selling is the most appropriate. When a government
department wants to buy in bulk.
TOOLS IN DETAILS
1. Advertising:

This is any paid for form of a non-personal presentation and promotion of ideas, goods or
services by un identified sponsor. The most familiar forms of adverts are found in the
broadcast (TVs and radios) these days and internet, print (News papers) and magazines,
posters, bill boards etc
 Print based adverts:

These are the posters, magazines, news papers, directories, outdoors, bill boards
etc
 Broad casts:
These are radios, television, set lights(DSTV) etc.
 Electronic adverts:
These take form of internet called banner adverts i.e pop-ups etc.
Advantages of advertising:
 Inviting inquiries; these adverts create curiosity, interests, desires of the population
and hence their need to inquire about such a product.
 Reminding the existing customers; this mainly reminds customers that our
products still exist.
 Entering new markets and expanding the old ones.
 Aiding the sales executive; here the work of these sales men will be intensified
that is, there is no need for them to persuade the customers.
 Announcing new products and product changes; these can mainly be seen in
communication companies.
 Creating a branch or company image; here with advertising, you are trying to
inform people what your company does.
DISADVANTAGES OF ADVERTISING.
 The costs are high for placing the messages of the products.
 Lack of feedback makes it difficult to know how well the message has been
received.
 The same message can be perceived differently by different people in the
same market segment.
 Some of the segment members may miss the information due to the choice
of the media and timing.
 Some of the adverts may be misleading and hence end up disappointing the
consumers.
Advert media
- News papers
- Television
- Direct mail
- Radios
- Magazines
- Out door
Note: Before placing an advert must decide on the choice of media to use. In doing this
you consider the following
 The target audiences; who do you want your message to reach.
 The type of a product; is it a consumer good, industrial good, technical product or
simple product.
 Nature of the message; is the message long or short.
 Campaign objectives; what do you want to achieve in the end?
 The available budget; do you have enough money to pay for the type of media?
However, for whichever media is chosen, it should be one that maximizes
exposure and minimizes costs.
2. Personal selling

This is personal presentation of a company’s products or services by the company’s sales
force with an intention of making a sale and build lasting customer relationships.
Sales presentations are like proposals. They are informal i.e trade show. There is direct
interaction between the customer and sales force of the company.
ADVANTAGES OF PERSONAL SELLING.
 Immediate feedback is given and you can therefore establish whether the message
has been understood or not.
 It is very persuasive and the audience can most likely change their minds in favor
of the product or service.
 The audience can be selected since the action is interpersonal.
 Complex information can be given since there is all the time for explanations to
give more details.
 A sales person can control whom the presentation is made to hence avoiding
wastage of coverage.
 With personal selling, the seller can hear or see the potential buyers’ reactions to
the message.
DISADVANTAGE OF PERSONAL SELLING.
 Personal selling is extremely expensive.

 Different sales people can change the message so that no consistent
communications given to all customers.

 Being highly persuasive, a customer may be forced to purchase what they
actually did not want.
TYPES OF PERSONAL SELLING.
Personal selling broadly has three types which are; order taking, order getting and sales
support activities. The differences here are based on the amount of selling done and the
amount of creativity required in performing the sales task.
i. ORDER TAKING; An order taking process routine orders or re-orders for

products which were already sold by the company. The main task of order takers is
to maintain the existing relationships with customers and maintain sales. There are
two types of order takers. The outside order takers who visit customers and add
them stock and assist them in arranging displays. The inside order takers simply
take orders from people who walk in or make calls and they may also answer a
few questions.
ii. ORDER GETTING; An order getter identifies prospective customers, provides
them with information, persuades them to buy, closes sales and make follow ups
on use of the product. Just like in order taking, order getters can either be inside or
outside. Order getting requires a lot of creativity and is required for selling
complex and technical products.
iii. SALES SUPPORT PERSONNEL; Sales support personnel add value to the
selling effort of order getters performing several services but they are not involved
in the actual selling. A sales engineer for example identifies, analyses and solves
customer problems and brings know how and technical expertise to the selling
situation but often does not sale products and services.
THE SELLING PROCESS
The selling process is the steps that the sales person follows when selling.
1) Prospecting and qualifying: This is the step in which the sales person
identifies the qualified potential customers. Approaching the high potential

customers is crucial to selling success. Prospects can be qualified by looking
at their financial ability, volume of business, special needs, location and
possibilities for growth.
2) Pre approach: this is the step where the sales person learns as much as
possible about a prospective customer before making a sales call. The sales
person must decide on the best approach suitable for both of them i.e. a
personal visit or a telephone call etc.
3) Approach: This is the step in the selling process in which the sales person
can start with greeting, introducing him or herself, the company, the
product with attractive words etc.
4) Presentation and demonstration: This is where a sales person tells the
product “story” to the buyer showing how the product will make or save
money for the buyer. The sales person describes the product features but
concentrates on presenting customer on presenting customer benefit s
using need satisfaction approach. Sales presentation s can be improved
with product samples or demonstrations. Information on how the product
works can be provided with booklets, brochures etc.
5) Handling objections: This is where a sales person seeks out, clarifies and
over comes customer objections to buying. The sales person should use a
positive approach, seek out hidden objectives ask the buyer to clarify any
objections as opportunities to provide more information and turn the
objections into reasons for buying.
6) Closing the sale: this is a step in the selling process in which the sales
person asks the customer for an order. After handling the prospects
‘objections, the sales person now tries to close a sale. The sales person can
ask for the order, review points of agreements, offer to help write up the
order, ask whether the buyer wants this model or the other etc.
7) Follow up: This is the last step in the selling process in which the sales
person follows up after the sale to ensure customer satisfaction and repeat
business.
TYPES OF PERSONAL SELLING.

1) Retail selling: This is selling to the domestic end user or consumer e.g the
organization owning retail outlets or retailers in chain of distribution.
2) Direct selling: This sells to either domestic or industrial end users. It will
either involve a large sales force or occur with high value capital products
provisions. Direct selling to industrial end users may also be referred to as
industrial selling, concept selling, corporate selling etc depending on the
organization.
3) Trade selling: This is when the producer sells to an intermediary or a higher
level intermediary sells to a lower level intermediary. It can also be applied
to a supplier selling to a producer. Also other terms can be applied such as
distribution selling, wholesale selling, merchant selling, industrial trade
selling, part and component selling etc.
4) Missionary selling: this involves convincing a third party of the value and
benefits of the product. E.g a doctor or an architect recommends a product
for their clients.
5) Repeat selling: This is to retain and maintain the existing customers in the
first instance, to but customer over the longer term and to increase
profitability through sales volume.
6) Face to face selling: This is personal meetings between customers and
sales persons to enable the full range of personal communication tools to
be used.
7) Telephone selling: This is where a sale is concluded over a telephone. This
is most likely to be effective in repeat selling situations, although it can be
used for new business selling in some situation.
SALES PROMOTION
Sales promotion is a short term inducement of values offered by a seller to a buyer in
order arouse interest in buying goods or services of a given business organization. Sales
promotion is one of the promotional mixes which a firm may use as a supplemental tool
to advertising, personal selling and publicity.

OBJECTIVES OF SALES PROMOTION
 To increase sales; This is mainly because sales promotion creates new customers
for the products and encourages existing customers to buy more i.e increasing their
consumption rates.
 To build product awareness; Several sales promotional techniques are highly
effective in exposing customers to products for the first time and can serve as a
key promotional component in the early stages of new product introduction.
 To create interest; Marketers find that sales promotion is very effective in creating
interest in products. In fact creating interest is often considered the most important
use of sales promotion for instance sales promotion helps customers to try
products for free or at lower costs.
 To stimulate demand; Sales promotion is also designed to build demand by
convincing demanding customers to make a purchase.
 To reinforce brand royalty; Once customers have made a purchase, sales
promotion can be used to both encourage additional purchasing and also reward
purchase loyalty. This in turn creates good reputation for the organization.
 To counter the sales promotional activities of competitors; Sales promotion is
done in order to keep in line with competitors and prevent them from over
powering the business. If no counter action is taken, the business could loose its
market share.
 To create urgency for customers to make a purchase; A price reduction which may
be given for a short period of time creates urgency for the customer to make a
purchase knowing that the price is bound to bound to rise in a short time.
TYPES OF SALES PROMOTION
There are two types of sales promotion which are;

1. Consumer sales promotion; This type of sales promotion is directed and focused
on end users or consumers. It is intended to make them increase on their usage
rates.
2. Trade sales promotion; this type focused towards retailers and other channels
members. Trade sales promotion is intended to motivate the channel members and
encourage them to hold more stock.
SALES PROMOTIONAL TOOLS.
These are instruments or methods that are used to carry out sales promotion and they
include the following;
 Coupons; These are cards that ae usually given to prominent customers that allow
them some entitlement liked reduced prices among others.
 Rebates; In this case consumers are offered money back upon fulfilling certain
conditions like say mailing back a bar code to the producer. Rebates are usually
given for a short period of time and mainly for highly priced goods.
 Sweepstakes; This involves contests and draws whereby the winner is given the
company’s products in form of prizes.
 Trade ins; These allow a customer to get a product for lower prices by
exchanging something in return such as an old product for a new product.
 Free samples; These are small quantities of a product given to customers to have
experience with it before they buy. This stimulates their desire to purchase and use
the products.
 Gifts; This involves giving free products to customers who buy the company’s
products. The gifts may include calendars, key holders, and other items bearing the
brand of the company. This increases brand awareness and sales.
 Personal appearance; This involves the use of celebrities to advertise the product
in order to increase sales.
 Trade shows; this is where companies that produce different products organize
themselves in a single place to sell their products usually at lower rates.

 Price deals; This is temporally reduction in prices of the product. Examples
include: 20% cut in the price, buy two for the price of one free, 10% extra, e.t.c.
STEPS IN DEVELOPING A SALES PROMOTION CAMPAIGN.

STEP1, Identify the potential customers:
To create a sale promotion, you must first come to understand whom you a trying
to sale the products or services to. So you can choose a methodology that appeals
to the customer. Create a scenario that describes who the customers are, how they
think and feel, what they like, what their house hold income is and how the
product or service benefit them.
STEP2, Plot your product life cycle composed of four main stages. Sales
promotional efforts are different in each stage. Determining where your products
falls in the life cycle reveals how you should be marketing your products.
STEP3. Choose sales promotion tools. In this stage you choose one or a few
tools to use for the sale promotion. You can start by offering coupons to customer.
Coupon can work at any stage of the product life cycle and can be distributed in a
number of ways in stores where products are sold, on your business website, in
newspapers, etc.
STEP4. Implement the sales promotion. After deciding on the tools to use, you
implement the sales promotion campaign. You may combine the tools like say
giving free sample with a coupon so that after a customer has tried a product and
likes it, the customer then in deciding to buy the product saves some money off the
coupon.
STEP5. Track the response rate. When you implement the sales promotion,
track the response rate of the method. If the sales promotion is successful, then
you can modify the existing methods or add a new method or add a new method to
the mix.
REASONS FOR THE RAPID GROWTH OF SALES PROMOTION.
 Increasing competition. Due to increasing competition, companies
are finding it increasingly difficult to compete on quality. They are
therefore resorting to more innovative methods of sales promotion.
 Customers have become more price sensitive which is directly as a
result of rampant inflation.
 Sales promotion creates an immediate impact on sales this is mainly
because they create urgency in the customers to buy immediately.
 Products have become more standardized and for marketers to
explain their products, they use sales promotion in order to capture a
wider market.
 Consumer’s acceptance; As competition intensifies and promotions
proliferate, consumers have learnt the rewards of being smart
shoppers.
 Advertising has become more expensive and less effective in a short
period of time. This has led marketers to opt for sales promotion
which is more cost effective and gives immediate results.
 Introducing an element of interest: there are a number of promotions
which are called interest promotions. These promotions create an
element of interest and excitement which consumers enjoy thereby
responding enthusiastically to the promotion.
ADVANTAGES OF SALES PROMOTION.
 Sales promotion offers customers value in terms of money in terms of money

through coupon and rebates.
 It is effective at changing purchase behavior in the short run. For example gifts
and prizes change consumer behavior towards buying the product.

 It is very flexible in that it can be withdrawn and reintroduced at any time and the
tools can be varied depending on the market.
 It encourages dealers to forward buy which ensures that retailers will not run out
of stock.
 Sales promotion provides information to potential customers. The information so
got enable the customers to make purchase decision.
 It helps create loyalty since customers will favor products from they get additional
benefits like gifts and price cut.
DISADVANTAGES OF SALES PROMOTION.
 It cannot be used alone since gains are temporally and sale drop off when the deal
ends.
 Sales promotion is usually carried out in conjunction with advertising and personal
sales.
 If they are conducted continuously, they lose their effectiveness. For example
samples can be used continuously as customers will have already tried the
products.
 They can easily be abused whereby employees for the company could connive
with some customers to defraud the company.
 They can lead to promotional wars as competitors will retaliate to counter the
effects of the sales promotion for the other company. Which could erode
profitability
 They can easily be duplicated whereby several sales promotions are carried out on
the same product. This may end up confusing the customers.
PUBLICITY
This is the non personal indirectly paid presentation of an organist ion’s products or
services. This can take the form of a new story, editorial or product announcements. With

publicity, the company does not pay for space in the mass media but attempt to get media
to run a favorable story about the company.
The difference between publicity and personal selling is the ‘indirectly paid’ dimension.
The indirect payment comes about because the company has to support the staff carrying
out the publicity.
PROMOTIONAL TACTICS IN PUBLICITY
 Event sponsorship.
 Making an analysis or a prediction.
 Taking a stand on controversial issues/ subjects.
 Invent and present award.
 Arrange for speeches or talk shows.
ADVANTAGES OF PUBLICITY.
 It is less costly for example a one minute story in a news broad caste costs
less compared to a fifteen seconds advertising on the same broad caste.
 It is credible in that publicity often appears as a media story which makes
the story appear more credible to many people.
 It takes a wider and broader coverage than some forms of promotion like
personal selling.
 It easily draws attention in that people are more likely to pay attention to
and believe in a news story than advertisements.
 It create a positive image for example when a company offers scholarships
the community is bound to see its positively.
DISADVANTAGES:
 The content released in the media cannot be controlled by the organization unlike
in advertising.

 It may lead to frustration over low release as the media tends to select the content
as well as decide when and how the content will be presented to the audience.
 Negative stories are bound to be publicized as positive stories about a company’s
success story or work in the community.
 Publicity and pairing may not be according to facts for example a television
series rated as very good could be aired at a time when it is not good to air a
publicity story.
PUBLIC RELATIONS.
This refers to any activity designed to create a favorable image towards the business, its
product or policies.
Public relation can also be referred to as the building of good relationship with the
company’s various publics by obtaining favorable publicity, building a good corporate
image and making clarifications on unfavorable rumors or stories.
FORMS OF PUBLIC RELATIONS
 Consumer relations: Good communication between employees and customers is

vital in promoting the business image. Courtesy, helpfulness, tolerance and
friendliness gives the company a good reputation.
 Employee relations: Successful businesses have loyal and well motivated
employees who feel they are important to the company. The public relations staff
work with management and staff to design programs that foster positive attitudes.
 Community relations: This refers to the activities that a business uses to acquire
the respect of the community. This can be by sponsoring or participating in
activities that benefit the civic, social and cultural life of the society.
PLACE/DISTRIBUTION:
This stands for the various company activities that make the product available to target

markets. Thus , the company has to choose wholesalers, retailers and agents and
motivate them. The company also has to check on stock levels and arrange efficient
transportation and storage of the products.
A company chooses its intermediaries according to the type of product and prices of the
Products. The channel level chosen can range from a zero level where the consumer gets
the products directly from the producer to a four level or more where there are several
channel members in between as illustrated in the diagram below.
Distribution: Is a set of interdependent organisations involved in the process of making a
product or service available for use or consumption by the consumer or a business.
i) Direct marketing channel: This is a marketing channel that has no
intermediary levels. These sell products directly i.e. door to door or through
home and office sells or outlets.
ii) Indirect marketing channel: Is a marketing channel containing one or more
intermediary levels. This will involve wholesale and retailers, the business
marketer can use multilevel distribution channel.
DIAGRAM SHOWING CHANNEL LEVELS.
P R O D U C E R
Level four
Level three
Level two
Level one Distributor
Zero level

Agent
Agent
Whole seller
Whole seller
Whole seller
Retailer Retailer Retailer

Retailer
C O N S U M E R
ROLES/FUNCTIONS OF DISTRICUTION CHANNEL MEMBERS.
Members of the marketing channel perform many key functions as follows;
Information: Gathering and distributing marketing research and intelligence information

about actors and forces in the marketing environment needed for planning and aiding
exchange.
Promotion: Developing and spreading persuasive communications about an offer.
Contact: Finding and communicating with prospective buying.
Matching: shaping and fitting the offer to the buyer’s needs, including activities such as
manufacturing, grading, assembling, and packaging.
Negotiation: reaching an agreement on price and other terms of the offer so that
ownership or possession can be transferred.

Physical distribution: transporting and storing goods.
Financing: acquiring and using funds to cover the costs of the channel work.
Risk taking: assuming the risks of carrying out the channel work.
Retailing: all activities involved in selling goods and services directly to final consumers
for their personal or non business use.
Wholesaling: all activities involved in selling goods and services to those buying for
resale or business use. E.g. merchants, brokers and agents.
FACTORS AFFECTING CHANNEL CHOICE AND MANAGEMENT.
The final choice of a marketing channel by a producer depends on a member of factors

that often interact with each other. These include the following;
 Environmental factors; Factors in the changing environment have an important

effect on the choice and management of marketing channels. Examples are rising
employment opportunities, changes in the economic situation, advances in
technology among others affect the choice of a channel.
 Consumer factors: Consumer characteristics have a different bearing on the
choice and management of a marketing channel. In order to determine a type of
channel to use, it is important to get answers to questions like who are the
potential customers, where, when, what and how to buy? The answers also
indicate the type of intermediary best suited for reaching the target buyers.
 Product factors: In general highly sophisticated products such as main frame
computers, un standardized products such as custom made machinery and
products of high unit value are distributed directly to buyers. Unsophisticated
standardized products with low unit values such as sugar, salt and soap are
typically distributed through indirect channels. A products stage in the product life
cycle also affects marketing channels as this stage requires a unique strategy.

 Company factors: A firm’s financial, human and technological capabilities affect
channel choice. Firms that are unable to employ sales force might use
manufacturer’s agents to reach whole sellers or buyers. The resources that a firm
has, may also affect channel choice. Where the resources are limited, they reach
buyers through whole sellers, supply dealers, retailers etc…
FACTORS TO CONSIDER WHEN CHOOSING CHANNELS AND

INTERMEDIARIES.
There are several routes through which buyers can be reached and there are also several
factors that affect the choice of a channel. However, marketing executives should
consider three questions when choosing a marketing channel and intermediaries. These
questions are;
a. Which channel and intermediaries will provide the best coverage of the target
market?
b. Which channel and intermediaries will best satisfy the buying requirements of the
target markets?
c. Which channel and intermediaries will be the most profitable?
1. TARGET MARKET COVERAGE
Achieving the best coverage of the target market requires attention to the
distribution density which are ; intensive, exclusive and selective.
a. Intensive distribution; This means that a firm tries to place its products in as
possible. This is usually done for convenience products or groceries.
b. Exclusive distribution; This is the extreme opposite of intensive distribution
where only one outlet in a specified geographical area carries the firm’s
products or services such as automobiles, designer boutiques etc…
c. Selective distribution; This lies between the two extremes of intensive and
exclusive distribution. Under this arrangement, a firm selects a few outlets
in a specified area to carry its products. Selective distribution is normally
chosen for shopping goods such as television sets, mobile phones, etc…

2. SATISFYING BUYER REQUIREMENTS.
a. Information; This is an important requirement when buyers have
limited knowledge or desire specific data about a product or service.
Properly chosen intermediaries communicate to buyers through in
store displays, demonstrations and personal selling.
b. Convenience; To buyers convenience has several meanings. To
some, it is the approximate time it takes to reach a retail outlet. To
others it means the minimum time and hustle associated with
shopping. For example buying through catalogues is a way of
reducing buying time.
c. Variety; This reflects the buyers’ interests in having numerous
competing and complementing brands from which to choose.
Intermediaries which have variety enhance their attraction to buyers.
d. Attendant services; This is an important buying requirement for
products such as appliances that require delivery, installation and
credit. This is the reason why some firms choose outlet with these
services.
3. PROFITABILITY
The third consideration in choosing a channel is profitability. This is

determined by the margins earned by each channel member and for the channel
as a whole. The costs incurred in the channels determine profitability. These
costs include distribution, advertising and selling expenses. The extent to
which channel members share these costs determines the margins received by
each member.
SERVICE MARKETING
In the marketing mix the 4Ps are supplemented with more 3Ps which we call the
extended marketing mix to make it 7Ps.

A service is any activity or benefit that a party can offer to the other that is essentially
intangible and does not result in the ownership of anything e.g holiday etc
Examples of services
 Communication
 Insurance
 Banking
 Transport
 Education
 Health
 Recreation
 Funeral services
 Construction etc
CHARACTERISTICS OF SERVICE MARKETING
1. Service inseparability: the service is consumed as it is produced. The producer

and the consumer must be present. The customer is also part of the production.
2. Intangibility: this is the invisibility of a product. It cannot be seen, touched or felt.
The consumer has to pay first and then consume the product /service later.
3. Service variability: the quality of the service vary from one service provider to
the other.
4. Lack of ownership: the service cannot be owned. There are some things used like
papers to show ownership of the service. For example one must have educational
papers like certificates, testimonials, and academic transcripts to show one’s
education.
5. Service perishability: the service cannot be stored that is to say it is completely
perishable. Some marketers try to store the services by recording on CDs, tapes etc
TYPES OF MARKETING SERVICE INDUSTRY

Company
Internal marketing External marketing
Customer
Employees
Interactive marketing
Here, there are 3 parties involved i.e company, employees and customers.
Internal marketing: this is marketing done by the company to its employees. This is done
through training the employees and promoting them.
External marketing: This marketing done direct to the customers. Promotion by

advertising, personal selling, sales promotion, public relations etc…….These are done to
target customers. This deals with traditional marketing mix (4ps)
Interactive marketing: These are activities that take place between the employees and
customers i.e buyer seller relationship.
MAJOR MARKETING TASK IN SERVICE MARKETING
1. Managing differentiation :this involves offers which involves innovative features

of a service, image which are symbols or branding that are used to differentiate one

product from others and delivery which involves able and reliable people,
superiors, physical environment, process etc
2. Managing service/offer/image/delivery quality: Here make sure you exceed
customer expectations, subjective to satisfaction in relations to the cost there fore
empowers frontline staff, the service providers.
3. Managing productivity: this is making the service more or better delivered.
Improved service quality i.e industrialize service for example online home
banking, credit cards ATM cards etc
Extended marketing mix
3Ps
 Physical evidence
 Peoples
 Process
Physical evidence:
This is the evidence shown so as to present the service due to its intangibility that is
buildings, furniture, equipments, people etc. something which can be seen to show that
something is taking place
People;
This is the staff or service providers for example lecturers in a college, doctors in a
hospital etc.
Process: this is the procedure of delivering a service. The process of delivering a service.
For example in a college, conducting lectures, giving assignments, tests, exams, etc
THE PRODUCT SERVICE CONTINUM.
Theoretically, there are pure goods and pure services. However, in reality all products
and services fall within a continuum called the product service continuum which have
five classes as explained below.

1. The pure tangible product: This is an offer which is purely visible and can be
touched e.g a chair, soap etc…
2. Tangible product with accompanying service: These are tangible offers with one
or a few accompanying services before it is used e.g cars are tangible products that
must be accompanied by a service (transport) it is used.
3. Hybrid product: This is an offer which has equal parts of physical products and
services e.g restaurants and bars.
4. Major service with accompanying goods: These are offers which are mainly
services with additional supporting goods e.g in airlines, passengers buy a
transport service but are offered meals, drinks, magazines etc… during the flight.
5. Pure service: The offer is purely a service without any good accompanying it e.g
massaging, baby sitting, etc…
SELECTING TARGET MARKETS
A market segment is a collection of prospective buyers. Market segmentation is the

division of prospective buyers into groups that have common needs and react in a
similar way to a given market situation.
STEPS IN SEGMENTING MARKETS
There are five steps that have to be followed when segmenting markets and
then selecting and reaching target segments and these are as follows;
 Grouping customers according to characteristics such as their needs, buying
behavior or characteristics etc…
 Group the products offered or marketing actions into meaningful categories.
 Develop a market-product grid that relates potential sales of product lines to
the segments.
 Select the target segments for emphasis or on which to focus efforts.
 Take marketing actions to reach the target segments.

BASES/VARIABLES FOR SEGMENTATION
Marketing variables are often used to represent customer needs in the market
segmentation process. For consumer markets, the typical customer variables are;
1. REGIONAL/GEOGRAPHICAL SEGMENTATION: Customers can be grouped

according to regions from where they come or according to geographic location.
Thus customers can be grouped according to regions e.g north, south etc… They
can also be grouped as urban, rural or sub urban.
2. DEMOGRAPHIC SEGMENTATION: In this case customers are grouped
according to demographic variables or population characteristics. These variables
include age, sex, family size, stage of family life cycle, race, education, etc…
3. PSYCHOGRAPHIC SEGMENTATION: Psychographic variables are consumer
activities, interests and opinions. In other words life styles. Knowing the life styles
of a particular segment helps marketers in designing marketing activities.
4. SEGMENTATION ACCORDING BENEFITS SOUGHT: The benefits that are
offered are a situation characteristic. An important benefit offered to customers is
a useful way to segment markets. For example some consumers want or need a
healthier life style than others.
5. SEGMENTATION ACCORDING TO USAGE RATE: Usage rate refers to the
quantities consumed or the number of store visits during a specific period. This
varies significantly among different customer groups. Customers can be grouped
as heavy users, medium users, light users or non users.
For industrial markets, the bases used for segmentation are;
1. LOCATION: This refers to the area in which the firm is located in central business
district might have personal sales calls while those outside the central business
district could be contacted by phone.
2. STANDARD INDUSTRIAL CLASSIFICATION (SIC): In this case firms are
categorized under the two digit categories. The SIC codes show the different needs
that the firms have.
3. BUYING SITUATIONS: Under this category, the consumers are categorized
according to what they buy i.e a product or service, where they use what they have
bought, and the application e.g office use, limited production or heavy production
use.
4. BUYING CONDITION: Here the issues looked at are the purchase location i.e is
it centralized or decentralized or decentralized, who buys i.e is it an individual or a
group and the type of buying i.e is it a new buying, a modified re-buy or a straight
re-buy.
FACTORS TO CONSIDER BEFORE SEGMENTATION
The use of market segmentation is not always the best strategy. For it to work profitably,
the following factors should be considered;
1. Market identification and measurement: The marketer should be able to identify

which consumers are members of a particular segment. This is done by
identifying some common characteristics that include or exclude a consumer from
a particular group and that characteristic must be measurable.
2. Market size: The market must be large enough to generate a sales volume that
ensures profitability. Otherwise it would be useless to design a unique marketing
mix for a market that is not profitable.
3. Market accessibility: When segmenting a market, the marketer must be able to
communicate effectively and efficiently with each segment. Some segments even
though identified as substantial cannot be reached properly because no medium
matches the characteristics of the market.
4. Market responsiveness: The market segments must be willing to react to the
marketing programs developed. Otherwise it would be of no use to develop a
unique program for each segment. Market segments must necessarily be defined
on their willingness to purchase a product in response to variations in the
marketing mix.
BENEFITS/ADVANTAGES OF MARKET SEGMENTATION

 It leads to improved profit contribution from each segment.
 It enables the organization face realities of the market place in relation to its
offering.
 It enables the organization to be able to spot new marketing opportunities.
 The organization can make better adjustments to the product/ service offerings
and marketing appeals used for each segment.
 It enables the organization to focus on a particular segment since looking at the
whole economy is unrealistic and resources are limited.
 It enables organizations gain competitive advantage by dominating particular
segments.
 Improved segmentation allows more higly targeted marketing activities and
enhances an in depth knowledge of the needs of a particular group of consumers.
 Segmentation allows competitor analysis where by companies understand the
type of competition they face, their main competitors and which segments they
are targeting.
APPROACHES TO USE IN MARKET SEGMENTATION
Once the segmentation strategy has been adopted, a firm may take one of the five
approaches discussed below;
1. Marketing atomization: This is a strategy that treats every customer uniquely.

This approach is popular among firms that market industrial goods but is also
used for many consumer goods. Companies that make tailor made suits and
dresses, custom built homes and custom made furniture are all practicing
market atomization.
2. Concentrated marketing: This is a strategy where marketers attempt to serve a
single market segment. A good example is Yamaha which concentrates on
making motor bikes. The major advantage with concentrated marketing is that
the company puts all its efforts on a single segment and can thus analyze the

needs and wants of its customers more carefully and then satisfies them.
However the main problem is that it puts all its eggs in one basket.
3. Differentiated marketing: This is a multi segment strategy whereby a firm
decides to select and appeal to several market segments. Firms do this through
variations in the marketing mix.Text book publishers practice differentiated
marketing by publishing materials for every education level. This strategy
enables firms to increase sales in the total by focusing on more than one
segment.
4. Undifferentiated marketing: In this approach, a firm designs a single
marketing mix and directs it to an entire market for a particular product. In
undifferentiated marketing,the market is treated as one. The firm in this case
focuses on what is common in the needs of people rather than what is
different. Firms like coca cola and pepsi cola have used this strategy
successfully because they rely on mass channels, mass advertising media and
universal themes. Undifferentiated marketing is most suitable for
homogeneous products.
5. Niche marketing: This is the process by which a firm segments the market
into finer (smaller) homogeneous clusters than that which is normally used
under traditional segmentation strategies. The organization is able to provide
products or product versions to buyers who are looking are looking for
products / services that are specially tailored to their individual desires and
preferences. Niche marketing enables the firm to fine tune it has its offers and
positioning. It also helps the firm to avoid direct competition with larger firms
that prefer to pursue bigger segments. Information about any product or
service from any part of the world by simply surfing the internet.
CONSUMER BUYING BEHAVIOUR
This is the process by which individuals decide on what they will buy, from whom they
will buy it and when they will buy it.

The consumer buying decision making process.
i. Problem/ need recognition: This is the first stage of the buyer decision process
in which the consumer recognizes a problem or need. The consumer perceives a
problem (need) that can be resolved by a particular product.
ii. Information search: This is the second stage of the buyer decision process in
which the consumer is aroused to search for more information, the consumer
may have heightened attention or may go into active information search. i.e,
financial sources, performance of the product, wear and tear, etc…
iii. Evaluation of alternatives: This is the third stage of the buyer process in which
consumers use information to evaluate alternative brands in the choice set. Here
there are alternative products from the immediate competitors that the buyer can
replace the product with other products.
iv. Purchase decision: This is the fourth stage of the buyer decision process in
which the consumer actually buys the product. Here the best alternative is made.
Choose the place and method and method of purchase i.e, where, what and how
to purchase.
v. Post purchase behavior: This is the last stage of the buyer decision process in
which the consumers take further action after purchase based on customer
satisfaction or dissatisfaction. Here there is evaluation of the level of satisfaction.
There is a cognitive dissonance i.e., a feeling that other choice could have been
better. Customers purchase more if satisfied.
However, consumers sometimes do not go through all the five steps,so they skip or minimize
one or more of the steps and this is mainly in low involvement purchase occasions like in
impulse buying where a problem is identified and a purchase decision is taken immediately.
In high involvement purchase occasions the items to be purchased have atleast one of the three
characteristics below;
 The item is expensive.

 The item purchased could have serious consequences on the person buying.
 The item could reflect one social image.
For this reason, a consumer follows all the steps in the buying decision process.
ORGANISATIONAL BUYING BEHAVIOUR
Organisational buying is also called industrial buying. It is defined as the decision making
process by which formal organizations establish a need for purchasing products and services,
identify, evaluate and choose among alternative brands and suppliers.
THE BUSINESS BUYING PROCESS.

 Problem recognition: Here someone in the company recognizes a problem or need
that can be met by acquiring a good or service.
 General need description: This is where a company describes the general
characteristics and quantity of a needed item.
 Product specification: Here the buying organization specifies the best technical
product characteristics for needed item.
 Supplier search: Here the buying organization in which the buyer tries to find the best
vendors.
 Proposal solicitation: This is where the buying organization invites qualified suppliers
to submit proposals.
 Supplier selection: here the buying organization reviews proposals and selects a
supplier or suppliers.
 Order-routine specification: This is where the buying organization writes the final order
with the chosen supplier, listing the technical specifications, quantity needed, expected
time of delivery, return policies and warranties.
 Performance review: Here the buying organization rates its satisfaction with suppliers,
deciding whether to continue, modify or drop the suppliers.
TYPES ORGANISATION BUYING BEHAVIOUR
a. Producer markets: These are organizations that purchase products for the
purpose of making a profit by using them in their own operations e.g
manufacturing organizations like Mukwano industries.
b. Reseller markets: These include retailers, whole sellers, etc… who buy
finished goods in order to resell them to get profits.
c. Government markets: These refer to national and local governments who
buy a variety of goods and services to support their internal operations
and provide public services. Governments normally make their purchases
through bids or negotiated contracts e.g Ministries.
d. Institutional markets: These comprise of those organizations that seek to
achieve charitable, educational, community or other non business goals
e.g schools, colleges, universities, churches, NGOs, etc…
TYPES OF ORGANISATIONAL PURCHASE
1) New task purchase: Here the organization is facing the need or problem for the
first time and the full organizational buying process will probably occur as the
problem has never been encountered before. The organization has to produce
detailed specializations of both the producer and ordering routine for this and
future purchases. Much information will generally be needed in order to make a
purchase.

2) Modified re-buy: In this purchase, something about the buying situation changed
but a lot still remained the same. Such situation may include circumstances where
a buyer requires faster deliveries, different prices etc…
3) Straight re-buy: This occurs when a buyer routinely purchases the same products
under the same terms of sale.
PARTICIPANTS IN THE BUSINESS BUYING PROCESS.
Buying centre (DMU) Decision Making Unit:
These are all the individuals and units that participate in the business buying decision process.
The buying centre includes all members of the organization who play any five roles in the
purchase decision process.
1) Users; these are members of the organization who will use the product or service. Users
often initiate the buying proposal and help define product specifications.
2) Influencers; these are people in organization’s buying centre who affect the buying
decision. They often help define specifications and also provide information for
evaluation for evaluating alternatives.
3) Buyers; these are people who have formal authority to select the supplier and arrange
terms of purchase. Buyers may help shape product specifications, but their major role is
in selecting vendors and negotiating.
4) Deciders; these are people in the organization’s buying centre who affect the buying
decision who have formal or informal power to select or approve the final supplier.
5) Gate keepers; these are people the organization’s buying centre who control the flow of
information to others.
CONTRAST BETWEEN CONSUMER AND INDUSTRIAL BUYING

BEHAVIOUR
CONSUMER BUYING BEHAVIOUR INDUSTRIAL BUYING

BEHAVOIUR
 Simple decisions  Complex decision
 Single/one person is involved  Many people involved
 Unlimited range of products  Limited range of products
 Small quantities  Large quantities
E-MARKETING

E-marketing refers to the use of digital technologies to help in the sales of
goods and services. It can also be defined as the application of marketing
principles and techniques through electronic media especially the internet.
STAGES IN THE DEVELOPMENT OF E-MARKETING
Businesses normally progress through three stages as they develop their e-

marketing presence on the internet. This begins with offering information, then
creating interactive capabilities and then integration of business transactions
on the web. These stages can be detailed as below;
INFORMATION STAGE
This is the stage in e-marketing where companies develop websites. These

websites provide basic information about a company’s products, its
customers, payment methods and any other relevant information. The
limitation of this stage is that customers cannot use the website to interact
with the business and they must visit the business physically use telephone or
e-mail to obtain any additional information not included on the website or to
make a purchase.
INTERACTION STAGE
This is the second stage where in addition to providing information, the

company uses this website to interact with customers through email. People
viewing the company’s website can use the links given to request for
additional information, ask questions or contact specific people in the
company. In addition to e-mail, the company can add a data base where
customers can search for specific information about available products,
features and services. The customers can check the products available,
calculate product prices and flight charges and determine how long it will take
to have an order delivered. An order form may also be on the website along
with a product catalogue. This will enable the customers to complete, print
and fax or mail the form to the company but sell, the customer cannot place
an order directly from the website using the internet.
INTERGRATION STAGE
This is the last stage where a company that wants to take full advantage of
the internet moves to. In this stage, the company has full integration with
internet tools available and entire business transaction can be completed on
an integrated site. A customer can get all the necessary information required
place an order and also make payment and even receive the goods all
assisted by the internet. A full integration gives customers the options to use
the internet for part or all of their business transactions.
ON LINE MARKETING DOMAINS
Marketing domain refer to exclusive ways through which customers and

businesses interact, there are basically four online domains which are ;
i. Business to consumer. (B2C)

ii. Consumer to business. (C2B)
iii. Business to business. (B2B)
iv. Consumer to consumer. (C2C)
BENEFITS OF E-MARKETING
 E-marketing has full time availability in that it can be accessed at any

where even if it outside working hours.
 Results of marketing activities can be easily tracked and measured. This
makes it easier to establish how effective your campaign has been. This is
enabled by the availability of detailed information about customer
responses.

 A properly planned and effectively targeted e-marketing campaign can
reach the right customers at a much lower cost than traditional marketing
methods.
 E-marketing can lead to personalization in that if your customer data base
is linked to your website, then whenever someone visits the sites you can
get them with targeted offers. The more they buy from you, the more you
can refine your customer profile and hence market effectively to them.
 E-marketing gives instant responses to customers who want to know about
the company’s products and services. This leads to a higher conversion
rate.
 E-marketing captures a wider audience based on location, age and income
in that all categories of people from any location who want the company’s
products to be accessed.
DISADVANTAGES OF E-MARKETING
 E-marketing is highly dependent on technology in that the use of

computers and the internet is compulsory. This limit e-marketing to
only people who can access such facilities.
 E-marketing is very costly in that it is very expensive to create and
maintain websites. In addition to that, making improvements due to a
highly changing environment is also very costly.
 There is no facial contact between the buyers and sellers. This
makes people from different parts of the world to transact without
physically knowing each other.
 E-marketing is sometimes affected by computer viruses and
hackers. This sometimes destroys information and can also lead to
losses bosses to the company and the customers. This eventually
leads to loss of good will.

 Being computer based, E-marketing is prone to computer related
illnesses since people will tend to sit at their computers for very long
hours.
 There is no physical examination of products before purchase which
makes buyers rely on pictures which may at times be deceptive.
GLOBALISATION
Globalization can be said to be the process of development of the world into a

single integrated economy. Globalization can also be defined as the process of
change, increasing interconnectedness and interdependence among countries
and economies bringing the world closer through the World Wide Web.
Globalization can further be defined as the interdependence and integration of

world economies driven by international trade and investment aided by
information technology.
The main drivers of globalization are as follows;
 Liberalization; this has been brought about by the opening up of world

economies and promotion of free and fair trade among countries. This has
also been promoted by the information of world bodies and organizations
like the World Trade Organization.
 Technological change; Technology has enabled firms to achieve
economies of scale and increased productivity. Technology has also
caused a revolution in the communication and transport systems which is
the back born to international trade.
 Increased competition in the home markets; This has led firms to
explore new markets and new production centers which can help them in
reducing their production costs and make them more competitive in the
international markets.
 Profit, growth and increased market share; Companies also go global in
order to increase their profits, market share and also look for more
avenues for the growth.
 Increased consumer needs; Due to increased consumer needs as a
result of increased awareness and an increase in disposable income,
companies have been forced to try and fulfill these needs thereby making
them go global.
 Strategic vision of the organizations; The willingness of management to
make their organizations leading players in the global market has also
been a major force that has led to globalization.
 Emergence of global institutions; Global institutions like the World Trade
Organization, World Bank, United Nations and the International Monetary
Fund have also played an important role in the globalization process. It is
true I would think technology plays an important role in promoting
international trade because has caused all systems involved in
international trade to become faster and more efficient. These systems
include transportation, communication, refrigeration wireless technology
and other technical advancements.
COMPONENTS OF GLOBALISATION
 Globalization of markets;
This refers to the merging of historically distinct and separate national
markets into one huge global market. The tastes and preferences of
consumers in different nations are beginning to convey on some global
brands. Companies like coca cola, Sony, MacDonald’s etc… have
offered standardized products worldwide thereby helping to create
global markets.
 Globalization of production;

This refers to the tendency among firms to service goods and services
from locations around the globe to take advantage of national
differences in the cost and quality of factors of production such as land,
labor and capital. For example a European company may have a
product designed in Europe, produced in Asia and sold in America.
FEATURES OF GLOBALIZATION
 New actors: One of the actors of globalization is the emergence of

multinational corporations which integrate their production and
marketing activities and hence dominate over smaller organizations.
 New rules and norms: Another feature of globalization is the
emergence of rules and norms. These bring into play market economic
policies spreading over the world with greater privatization and
liberalization than in the earlier decades.
 New markets: Global markets are yet another feature of globalization.
This has led to the emergence brands and new financial markets.
 Easy communication: Another feature of globalization is faster and
cheaper tools of communication. This includes the internet and
electronic communications linking many people simultaneously. E.g
cellular phones, fax machines etc…
GLOBAL MARKETING
This is a type of marketing concerned with integrating marketing actions across

different geographical markets. In global marketing, firms face various restrictions
on trade. These include tariffs, quotas, embargos, exchange controls and non-
tariff barriers. However, at the same time certain forces help in the control of

trade like the general agreement on tariffs and trade (GATT) and the world trade
organization, free trade zones among others.
Before deciding to go global, firms take into consideration decisions concerning

international operations. These decisions include;
i. Looking at the global marketing environment.

ii. Deciding whether to go international.
iii. Deciding on which market to enter.
iv. Deciding on how to enter the markets.
v. Deciding on the global marketing program.
ADVANTAGES OF GLOBALISATION
1. It leads to the creation of peaceful relationships among nations as they

carry out their trade activities.
2. Companies through globalizations get access to wider, markets since they
operate globally.
3. Globalization has led to the improvement of standard of living with the
availability of more goods and services.
4. Globalization has also led to improvement in technology since most of the
global marketing activities are carried out using the internet and
computers.
5. Employment opportunities are created with globalization as the
organizations tend to be available all the time.
6. It also leads to free trade whereby firms can operate in different countries
without any restrictions.
DISADVANTAGES OF GLOBALISATION
1. Globalization has led to greater competition since multinational

organizations operate almost in the whole world.

2. Globalization has also led to omission of some cultures and replaced
with other cultures which may not be pleasant.
3. It has also led to the collapse of some industries which have failed to
complete globally.
4. It has also led to loss of employment.
GREEN MARKETING
According to the American Marketing Association, green marketing is defined as

the marketing of products which are presumed to be environmentally friendly or
safe.
Green marketing can also be defined as the development and marketing of

products designed to minimize effects on the physical environment or to improve
its quality.
Green consumption is the decision directly or indirectly related to consumer

choice and usage which involves environmentally relayed beliefs, values and
attitudes, behavior and choice.
Green washing refers to all industries that adopt outwardly green acts with an
underlying purpose to increase profits.
Green marketing incorporates a broad range of activities including product

modifications, changes in production processes, and changes in packaging and
modifying advertisements.
IMPORTANCE OF GREEN MARKETING
 Green marketing helps in the production of environmentally friendly

products which leads to environmental protection.
 It also leads businesses to gain competitive advantage and have a strong
consumer base since today’s customers prefer products which have no
effects on their lives.
 Green marketing also enables companies to be in good terms with other
organizations concerned with conversation of the environment.
 Green marketing is a way of using environmental benefits of the products
or services to boost sales and profits.
CHALLENGES IN GREEN MARKETING
 Patience and perseverance; the investors and marketers need to look

at the long term benefits of the green movement. It may require a lot of
expenditures yet it may yield no immediate results.
 Green myopia; the first rule of green marketing is to focus on the
benefits of customers. If this is not taken care of, green products will be
priced highly which may make them loose acceptability. Marketers must
therefore fight hard to overcome green myopia.
 Need for standardization; currently, there exists no standard to certify
a product as green. A standard quality control board needs to be in
place to certify such products.
 Green marketing is a new concept; For many people and societies
today, green marketing is a new concept. Therefore the consumers
need to be educated and made aware of environmental threats and
benefits of green marketing.
 Promotion; this involves communicating with marketers and in this
aspect more pressure should be put on the environmental aspects for a
safe environment.
THE 4 Cs OF GREEN MARKETING
 Customer solutions: These solutions go beyond selling and buying

physical products and provide solutions to customers. They include
offering products and services as solutions to satisfying customer and put
into consideration environmental aspects.

 Customer Costs: In addition to the financial costs or price that a buyer
has to prepare to pay for a product or service, the cost concept considers
the physical, ecological, social and environmental costs for obtaining and
using a product.
 Communication: Besides facilitating the promotional process, green
communication is a process of interactive dialogue within which it is
essential to obtain trust and credibility.
 Convenience: In this aspect, convenience means that customers want to
use products and services that meet their needs and which are easy and
simple to access and use.
WHY MOST FIRMS GO IN FOR GREEN MARKETING
 Government pressure.
 Competitive pressure.
 Corporate social responsibility.
 Desire to use the available resources efficiently without wastage as well as
to achieve organizational objectives.
 Growing internet among consumers all over the world regarding protection
of the environment.
CHARACTERISTICS OF PRODUCTS UNDER GREEN MARKETING
 Products under green marketing do not harm the environment and

neither do they pollute it.
 The products are either recyclable or biodegradable.
 The products should have natural ingredients and should not be
genetically modified.
 The products should be able to contribute to environmental upgrading
or generation.
 The products should be energy saving or energy efficient.

THE 4Ps IN GREEN MARKETING
In green marketing, the 4Ps can be analyzed as follows.
 Product: Products represent the goods and services that a company may
offer. Green considerations for the product include the product materials,
components and design, product packaging and the environmental
impacts of the product.
 Price: Pricing is a complex issue that has to be handled carefully.
However, what is certain is that price considerations for green products
and service offerings need to be adjusted to meet the customers’
expectations.
 Place: Green logistical concerns seek to maximize distribution while
minimizing the negative impacts on the environment mostly from the
carbon emission perspective.
 Promotion: Products have to establish how green their promotional mix is.
They should also establish the impact of print and digital media on the
environment.
MARKETING ETHICS
Marketing ethics refers to the basic principles and values that govern
business practices of those engaged in marketing. Ethical marketing is about
whether a firm’s marketing decisions are morally right or wrong.
IMPORTANCE OF MARKETING ETHICS

 Marketing ethics defines the principles and standards that define the
acceptable code of conduct in the market place and controls practices
such as black marketing and smuggling among others.
 It reduces consumer exploitation by marketers who may charge high
prices for goods and services whose quality has been compromised.
 Marketing ethics enables firms to create a royal customer base hence
improving on the performance of the business and increasing market
share.
 It also helps in the retention of good employees who work with the
ethics that are required in that particular organization and are able to
promote the reputation of that organization in the public.
 It further helps the organization to work with other organizations which
share similar ethics hence creating harmony and strategic alliances
among the organizations.
PRINCIPLES OF MARKETING ETHICS
According to the American marketing association, the following are some of the
laid down principles of marketing ethics;
 The golden rule is that do to others what you have them do to you.
This principle applies to the way businesses treat their customers and
employees. E.g if employees are treated well, their morale will be raised
hence increasing productivity.
 Put the customers first and the profits will come later. This builds good
reputation on the brand name of the business hence increasing the
customers of the organization.
 Tell the truth because telling lies about your competitors or their products
is unethical and can undermine your reputation with customer and
suppliers.

 Being a good citizen. In this aspect firms stop behaving in self servicing
ways and get involved in community development activities in order to
meet public needs.
 Honesty and fairness: Marketers should uphold and advance the
integrity, honor and dignity of the marketing profession.
 Marketers must accept responsibility for the consequences of their
activities and make every effort to ensure that their decisions, actions and
recommendations function to identify, serve and satisfy all relevant
customers, organizations and society.
 Marketers should adhere to all applicable laws and regulations
concerning marketing.
WAYS OF PROMOTING MARKETING ETHICS
 Through training the employees: This involves organizing sessions to

train employees on how to approach ethical dilemmas among the staff.
 By rewarding employees over their behaviors: The employees with
solid ethical codes of conduct such that employees work within the
established marketing ethics.
 Through regular communication with employees about the major ethical
codes of conduct such that employees work within the established ethical
boundaries.
 Meeting obligations and responsibilities in professional relationships
with regard to privileged information in contracts and mutual agreements in
a timely manner.
 By avoiding taking the work of others in whole or in part and presenting
their work as your own or directly benefiting from it without compensation
or consent of the original owner.
 Through avoiding false and misleading advertisements and all other
forms of promotion that are deceptive and manipulative.

UNETHICAL ISSUES IN MARKETING
 Irritation: Many people get irritated by hard sales and many solicitations
especially during times when they are busy, resting or in bad mood.
 Unfairness: Some marketers take advantage of the less sophisticated
buyers and the vulnerable especially children and the elderly.
 Deception and fraud: Some marketers design products intended to
mislead the buyers. They may even exaggerate the product size,
performance claims or the retail price.
 False advertising: Some business people exaggerated product claims
when advertising. This causes disappointment for the customers who
eventually use the product.
 Stereotyping: Marketing campaign often cast particular groups in
stereotypical roles such as washing powder adverts that show women as
house wives preoccupied with laundry work.
 Use of child labor: Some companies employ children to work for them
and they end up under paying them yet the use of child labor is prohibited
by many governments and child rights organizations.
 Use of prisoners labor: Some organizations hire prisoners to do work for
them yet the prisoners do not benefit from their labor. It should however be
noted that if the prisoners are the direct beneficiaries, then it is normal.
FRAME WORKS IN MARKETING
 Value oriented framework: This involves analyzing ethical problems on
the basis of the value on which they infringe e.g honesty, autonomy,
privacy, transparency etc… An example of this approach is the American
Marketing Association statement on ethics.
 Process oriented framework: This is the analysis of ethical problems in
terms of the categories used by marketing specialists’ e.g research,
Pricing, promotion, placement, etc…

 Stake holder oriented frame work: This is analyzing ethical problems on
the basis of which they affect e.g consumers, competitors, suppliers or
society as a whole
 END

MARKETING FUNDAMENTALS PDC

Uploaded by

Document Information

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

MARKETING FUNDAMENTALS PDC

Uploaded by

Copyright:

Available Formats

MARKETING FUNDAMENTALS

Marketing is so basic that it cannot be considered a separate function. It is the whole

According to Philip Kotler marketing is a human activity directed at satisfying human

According to the chartered institute of marketing , marketing is defined as a managerial

It begins with customer needs and wants.

It includes more than just persuading customers.

It includes or involves all departments in the organization.

NAYIGA HARRIET-LECTURER MARKETINGPage 1

It involves or includes everybody in the organization.

Core concepts of marketing

1. Human needs and wants

Marketing is so basic that it cannot be considered a separate function. It is the whole

According to Philip Kotler marketing is a human activity directed at satisfying human

NAYIGA HARRIET-LECTURER MARKETINGPage 2

It begins with customer needs and wants.

It includes more than just persuading customers.

It includes or involves all departments in the organization.

It applies to both profit and non-profit oriented organizations.

It involves or includes everybody in the organization.

Core concepts of marketing

1. Human needs and wants

NAYIGA HARRIET-LECTURER MARKETINGPage 3

3. Customer value, Satisfaction and total quality management.

b) Customer satisfaction. Is the extent to which a product’s perceived performance

4. Exchanges, Transactions and relationship marketing.

Relationship marketing; Is a process of creating, maintaining and enhancing strong value

MARKETING ORIENTATIONS /PHILOSOPHIES/CONCEPTS.

NAYIGA HARRIET-LECTURER MARKETINGPage 4

The main pillars of this concept;

Demand must be exceeding supply of the products.

The main pillars of this concept;

NAYIGA HARRIET-LECTURER MARKETINGPage 5

ORIGIN AND DEVELOPMENT OF THE CONCEPT MARKETING.

NAYIGA HARRIET-LECTURER MARKETINGPage 6

NAYIGA HARRIET-LECTURER MARKETINGPage 7

Marketing is a source of revenue because government taxes revenue from marketing

NAYIGA HARRIET-LECTURER MARKETINGPage 8

According to Philip Kolter a marketing management is analysing, planning,

MARKETING MANAGEMENT PROCESS.

This is the process of planning, organising, implementing and controlling marketing

ILLUSTRATION OF THE MARKETING MANAGEMENT PROCESS.

NAYIGA HARRIET-LECTURER MARKETINGPage 9

The elements of the marketing management process can be

 Analyzing marketing opportunities; This is to identify and evaluate the

NAYIGA HARRIET-LECTURER MARKETINGPage 10

 Market targeting; This is the process of evaluating each market segment’s

 Planning marketing programs:

A marketing program is a systematic process that involves accessing marketing

NAYIGA HARRIET-LECTURER MARKETINGPage 11

THE MARKETING PLANNING CYCLE:

Organisating implementing and controlling; Management has to build a marketing

NAYIGA HARRIET-LECTURER MARKETINGPage 13

IMPORTANCES/ROLES OF MARKETING TO A BUSINESS

Analyzing market opportunities by conducting marketing research.

Identifying the target market for products and services.

Product planning and development (R&d).

Formulating price structure

Packaging and branding

NAYIGA HARRIET-LECTURER MARKETINGPage 15

Sales force management.

Carrying out promotional activities.

MARKETING INFORMATION SYSTEMS (MIS)

Marketing Information systems: Is a collection of people, equipments and procedures to