MARKETING DEPARTMENT

SUMMARY/REVIEW OF MARKETING
MANAGEMENT TEXTBOOK
(BUSARI S.O., TAIWO C.A., ODUWOLE W.K.)
AND SHORT NOTE ON OTHER MARKETING
MANAGEMENT TOPICS

COURSE: MARKETING MANAGEMENT

COURSE CODE : MKT 314

LECTURER: DR. OLUTADE

ADEOSUN OLALEKAN HAMMED

F/HD/21/3650009
Chapter 13
Marketing Research
Concept of Marketing Research

Research connotes a systematic and objective investigation of a subject or problem in order to

discover relevant information on principle. It can be considered to be primarily
"fundamental" or primarily applied in nature Fundamental research seeks to extend the
boundaries of knowledge in a given area without any need for immediate application to
existing problems while applied research attempts to use existing knowledge as an aid to
solving some problems. Many organisations conduct marketing research projects on a broad
array of topics. The researches are performed by companies for internal use, by commercial
marketing research firm and by government and non-profit institutions Research can aid in
recognising the alternatives the decision-maker might adopt given some assumptions.

Marketing therefore requires an assessment of consumer needs through market research and
the orientation of all the firm's activities towards the satisfaction of those needs.
Marketing research is responsible for providing information about marketing performance of
the company and its competition.

DEFINITIONS OF MARKETING RERSEARCH ACCORDING TO SOME SCHOLARS

Giles (1978) states that marketing research is objective and systematic collection, recording,
analysis, interpretation and reporting of information about existing or potential markets,
market strategies and tactics, and the interaction between markets, marketing method and
current or potential products or services.
American Marketing Association define marketing research as the systematic gathering,
recording and analyzing of data about problems relating to the marketing of goods and
services. Marketing research covers all aspects of the marketing activities carried on in
connection with the management of marketing work, while market research on the other hand
is limited to finding out information existing or potential markets.
The British Institute of Management (1962) defined marketing research as the objective
gathering, recording and analyzing of all parts about problems relating to the transfer of sales
goods and services from producer to consumer.

Marketing research involves the collection and analysis of information about a firm's market
and its customers in order to determine who buys a firm's products, why, when and under
what circumstances.

Marketing research is a fact-finding process, logical and essential for successful marketing
and adaptable to the requirements of firms operating in markets of all kinds, (Chisnal, 1975).

According to Baker (1996), marketing research deals with factors that impinge upon the
marketing of goods and services. It includes the study of advertising effectiveness,
distributive channels, competitive products and marketing policies and the whole field of
consumer behaviour. 

FEATURES OF MARKETING RESEARCH (MR)

(i) Observation of or identification of problems or questions 
(ii) Formulation of hypothesis or suggested answers 
(iii) Prediction of the future
(iv) Testing of the hypothesis.

Marketing policy may then evolve on the basis of such analysis. It is systematic or well-
planned and comprehensive enquiry containing a number of stages. It involves collection and
analysis of data, identification and solution of marketing problems.Marketing is also an art,
successful decision-making depends on the skill and judgement of the individuals involved.
Most decisions are made quickly and are based on experience but sometimes information is
collected to help in decision-making.Marketing is also an art, successful decision-making
depends on the skill and judgement of the individuals involved. Most decisions are made
quickly and are based on experience but sometimes information is collected to help in
decision-making.It includes investigation of market segments, product differentiation,
channel relationship, effectiveness of sales representatives and advertisements, pricing
practices and so forth. Marketing research covers all aspects of marketing activities for an
organization in order to solve problem existing in every element of marketing. Therefore, it is
comprehensive in its investigation and problem solving. The purpose of marketing research is
to obtain information which helps in identification of a marketing opportunity or problem, to
determine the issues, dimension and magnitude, to enumerate and evaluate the alternative
"solutions" to select the "right" course of action and to follow through. This will assist the
manager in arriving at the best possible decision. It provides information about marketing
performance of the company and its competitors and helps in informing the management
about what is going on, its weakness and strength, what they have to do to exploit marketing
opportunities and avoid threats.It is an essential part of marketing function whose purpose is
to solve or forestall marketing problems thus increasing the efficiency and lowering the costs
of marketing.It is far ranging in its enquiries by covering product development, identifying
the market, distribution, promotion and sales service facilities.

SCOPE OR PROBLEM AREAS IN WHICH MARKETING RESEARCH IS RELEVANT

MR is concerned with the scientific investigation of all factors affecting marketing of goods
and services hence it covers all aspects of the marketing functions. Coverage of marketing
research includes

 Market Segment (Consumer Research)

 Developing A Product (Product Research)
 Designing Advertising (Advertising Research) 
 Establishing Method Of Reappraisal
 Controlling Marketing Activities 
 Expenditure (Market And Sales Analysis Research).

Problem area in which marketing research is applied cuts across all elements of marketing
namely the 4Ps or 7Ps. Problems in any of these elements of marketing if not quickly solved
can spread to other elements and adversely affect marketing performance of the organization.
Each of the elements is an area of problem requiring consideration in marketing activities.
PRODUCT/SERVICE RESEARCH

This is the identification of product opportunities, customer's perceptions of existing and

proposed products, comparative perceptions of competing products: positioning studies, test
marketing and packaging studies. MR determines the extent to which existing products are
fulfilling the needs of customers, establishes possible modification and forecasts likely trend
in customers preference in functional qualities, etc. that can give the producer competitive
advantage. It covers inquiries into analysis of the competitive strengths and weaknesses of
existing products. It covers inquiries into analysis of the competitive strengths and
weaknesses of existing products. The company and competitors' product range resulting in
product simplification or elimination, investigation of new uses for existing products, product
concept testing, new product acceptance and potential, competitive product studies, research
on the acceptance or otherwise of the packaging of a product and its physical characteristics,
etc. It also evaluates competitive products and their impact on the product market position. It
includes the design development and testing of new products in order to determine the
products' acceptability to customers and marketing efforts required for them to be successful
in the market.

Product research will enable the management to provide insight into whether they have been
successful in developing the desired product. All production companies engage in a sort of
product research, most especially during product development. It is one which consumers and
users perceive the product to be new either because it is significantly different from existing
products or because it is an imitative product that is new to a particular company. Through
products research a company can establish for engineer, the design and manufacturer what
the consumer wants in a given product, what price he is willing to pay and where and when it
will be wanted (Ikoku, 1980).

In Nigeria, product is a major problem because demand is greater than supply for most goods.
Many producers do not take pains in perfecting their goods and therefore in most cases
customer complaints are centred around the following variables.

(1) Size: Many consumers want product of moderate sizes that occupy minimum floor space.
(2) Packaging: This particular aspect of product has always shown deficiency particularly
when locally made goods are placed side by side with their foreign counterpart, it is easy to
identify local product from foreign product.

(3) Weight or measures: In some instances, products carrying the same grammage do not
have equal weight when measured by consumers.

(4) Performance or functionality in use: Many Nigerian consumers fail to patronize local
products for fear of poor performance, particularly when the product do not carry approval
number of product quality regulatory agencies such as SON and NAFDAC.
Surveys: These are useful for descriptive research and are therefore best undertaken to find out about
people's knowledge, beliefs, preferences and satisfaction.ma

ii. Observation: This involves observing (watching and recording) events, consumers, customers etc in
action, through manual or mechanical means.

iii. Experimental research: This is regarded as the most scientific type of research. The purpose of
experimental research is to find cause and effect relationship between variables.

iv. Focus group research: As an exploratory research, it enables researchers to gain insight into people's
perception, attitudes, motives, beliefs and satisfaction.

Research Instruments: Marketing researchers can choose between two main research instruments in
collecting primary data namely questionnaires and electro-mechanical devices.

Questionnaires: This consists of a set of question presented to respondents for their answers. Because it is
flexible, it is that most common instrument used to gather primary data.
Electro-mechanical devices: These are occasionally used in marketing research. Depending on what is
being observed, marketers can choose between the four alternative instruments.exposure to a specific ad or
picture.
Sampling plan: This involves taking the following three decisions such Sampling unit, Sample size and
Sampling procedures

PRICING RESEARCH

Research is directed to means of pricing new and existing products in relation to channels of distribution
and competitive activities. It examines and continuously reviews competitive pricing, discount structure
and policies. The researcher's interest is on the perception of price and quality; cost analysis, price-demand
elasticity and credit-related issues. The product/ price relationship, and product/quality relationship are
examined in order to recommend price level that client place on the existing product. A company may fail
in its marketing result due to poor pricing decision in the following area.
Level of price: Consumers are very rational by comparing quality and price of competing product. In
developing countries, poverty is prevalent and consumes are price- sensitive. Where price is found
unreasonable, it discourages demand.
Discount: This is a price reduction enjoyed by consumers of various kinds. It can encourage marketing
intermediaries that perform marketing function, if it is higher than those of the competitors. It becomes a
problem to producer who requires investigating discount allowed of competitors in order to determine their
own customers.

Price war: Some companies fight for leadership in the market by consistently reducing prices of their
products. To avoid losing their customers, other companies retaliate in the like manner thereby resulting in
price war.

Terms of sales or transaction: No company can operate for long without granting credit transaction.
However, in Nigeria, this is dangerous to a large extent because most credit customers are dubious. Where
some companies aim to operate on cash only, they may not be able to attract many customers because
majority of whom are interested in credit purchases.

PROMOTION OR MARKETING COMMUNICATION RESEARCH

This study measures the effectiveness of the promotional programmes used by the firm. It assesses
effectiveness of the various elements of the promotions mix including image studies; copy and media
issues, sales effects; sales force studies and comparative studies of competitors' promotional techniques.
Advertising research: On advertising, studies are conducted on copy research (measuring the effectiveness
of advertising copy), motivation research, media research (determining the suitability and effectiveness of
the advertising media employed), audience research (identifying the appropriate audience characteristics)
and investigating the advertising methods of competitors. It covers methods used to select advertising
media based on what should be said about the product? What is the best way to put the appeal into a
message and what type of media should be selected? All these areas are researched into because of the
huge amount involved in advertising.

Sales promotion: Many consumers nowadays have become deal-oriented by expecting marketers to reward
them failure of which leads to loss his customers to competitors. This implies that companies are
compelled to join the bandwagon by rewarding their customers at all cost and ensuring the inducements
are competitive. Sales promotion is examined by picking each sales promotion technique and its
contribution to the marketing performance of the product or service.
Public Relations: To initiate and build goodwill, marketers apply all forms of interaction with consuming
and non consuming publics. To meet the needs of non consuming public, marketers plan and implement
corporate social responsibility programme.

Publicity: This promotion tool presents favourable new stories about happenings in a business
organization. The stories make company and its product current in the minds of the public. Companies or
particularly marketers have to create avenue for supplying the public regularly with favourable
information.
Personal Selling: Every organization requires some personnel to carry product to consumers and sell to
achieve good result, the sales personnel or marketing team have to be trained in salesmanship. In their
sales territory deliberate and indeliberate mistakes in the interaction between the sales force and consumer
can arise thus causing problem to marketing effort of the organization.
IDENTIFICATION AND DEFINITION OF MARKETING PROBLEMS
: The existence of problems and opportunities give rise to interest in marketing research. Therefore,
problems must be identified and defined properly, not too narrowly or broadly. This is the starting point of
research process in which the researcher carries out situation analysis by collecting all relevant information
about the firm, its product, the market, the industry and marketing mix,

ESTABLISHMENT OF MARKETING RESEARCH OBJECTIVES

Preliminary investigation (exploratory research) is conducted to obtain background information about the
problem, the application of quick desk research, interview of consumer, clients, distributors, experts in the
industry and other sources enables the researcher to analyse and understand clearly the causes of the
problem, he is able to meet and discuss his discovery with the management in an objective manner.

MARKETING RESEARCH REPORT

It is a means of communicating the result of marketing research conducted to the sponsors and users. It is
an oral and/or written record of research completed. It is passed to the listeners and readers with
conclusions and recommendations. In marketing and other professions, research report follows
professional formats containing the following components, among others:

(1) Title page: This includes title of the report, for whom the report is prepared by who the report is
prepared and date of release or presentation.

(2) Letter of transmittal: This is the comment on general finding and matters of interest relating to the
research.
(3) Letter Authorisation: This is the letter from the sponsor to the researcher approving the project,
detailing who has responsibility for the research and indicating resources available to support it.

(4) Table of content: This part of the report carries list of divisions and subdivisions with their pages. If the
report has many figures of table, a list of these is included immediately following the table content.

(5) Summary: This carries brief statements on why the research was conducted, what aspects of the
problems were covered, what the outcome was and what should be done. It is the main gist of the report
which should cover a page or two pages.
(6) Body of the report: This is the mainframe of the report or the pillar of the report containing:

Introduction that initiates the research: It addresses such issue as, why conducting research, what are the
research objectives, the research problems and the research questions.

Discussion of methodology: This contains procedures used to collect and analyze data. Appendix materials
are not included and also glossary of terms.

Result of investigation: This consists of summary tables and

charts used.

Limitation of the study: This reveals constraints the researcher faced during the investigation. It may
include sampling procedure used, lack of cooperation from respondent; etc.

Conclusions: These are opinions of the researcher based on the result. Recommendations: These are
suggestions for action.

Appendix: This contains materials that are too detailed or too technical e.g. data collection form detailed
calculation, discussion highly technical question, bibliography etc.

SPECIALISED USES OF MARKETING RESEARCH MR is used in many areas including marketing and
other issues outside marketing.

Retail audit research: The MR researcher selects a sample of representative outlets in the trade, which he is
interested and carry out a period-by-period measurement of the stocks on hand while asking the
shopkeeper to keep a detailed record of all the goods delivered between those stock counts. This research
implication is that it provides marketing management knowledge about how, when, where and why it is
doing in the market in order to plan the most suitable marketing activities. It shows types of relationship or
pattern of sales that exist between different outlets. It provides information on the effect of competitors'
programmes on the success of the product.

Home audit: Household consumers are constantly used as research panel. When using area and stratified
sampling, the researcher measures ownership and acquisition of consumer durables.

Poster audience research: This considers and measures the degree of contact that exists or could exist
between the people (target audience) and the medium. For posters, majority of the audience is in motion
relative to the medium and exposure can be fleeting and limited.

Television audience research: To know the effectiveness in the selling power of medium, the coverage and
characteristics of total viewers are broken down.

a) Estimating the physical size of the viewing audience, time and the days on and their demographic
characteristics.

b) Effectiveness of the medium in communicating messages to the viewing audience and degree to which
the messages through this medium supplements or supercedes those in other media

Chapter 14
MARKETING APPRAISAL AND CONTROL

INTRODUCTION: Buzzel et al (1972) remarked that a basic

requirement for determining marketing effectiveness of management in any field, including marketing, is
by evaluating the performance of an organisation, an individual, an activity or a program. It involves
asking such questions as did it work? How are we doing?nwob nexord

The evaluation requires a system for measuring performance, for analyzing the reasons for variation in
performance and for determining how it can be improved. However, performance can be measured only in
terms of some specified set of objectives, which have been established for an activity or organisation. It
deals with an explicit or implicit comparison with some standard. Observation and recent research on
organisational behaviour suggest that there is probably no single, universally applicable measure of
business performance.
COMMON FEATURES OF THE DEFINITIONS
To track and use suggestions of stakeholders within and outside

d)

the company to improve the decisions of the company's

marketing executives. To monitor the performances of various marketing activities such as advertising,
sales volume, promotion, profitability. etc. For marketing executives to be able to apply corrective
measures to any noticed deviation. e) f)

g) To ensure a wise, judicious allocation and efficient use of marketing resources (i.e. men, money,
material, time, etc) and thereby preventing wastage.

MARKETING CONTROL TECHNIQUES

In practice, many methods are used by different firms depending on their levels of innovations and
intended degree of accuracy of control. Market share analysis, sales analysis, budgetary (expense) analysis,
financial/asset utilization analysis, profitability/cost analysis and efficiency/qualitative analysis are control
methods commonly adopted by marketing practitioners. There are many approaches to marketing control,
but they are focused on the revenue expenses, profit and efficiency. Each of the marketing techniques has
its own weakness. Thus, a combination of two or more techniques is often used to

achieve the best performance.

ANNUAL PLAN CONTROL: This is technique used during the year to check ongoing performance
against the plan (or standard) and to apply corrective actions when and where necessary. Companies set up
a regular pattern of control procedures to ensure the realization of the annual marketing plan goals such as
sales, revenues, profits and others. It is, therefore, an operational control plan. This type of control applies
to all levels of the organisation and the process. Annual plan control tools include sales analysis, market
share analysis, marketing expenses to sales ratios, attitude tracking, profitability and efficiency.

Sales Analysis: Actual sales are compared to sales targets and budgets and an analysis of any variance
between the two is conducted. Sales analysis focuses on the relative contribution of different factors to a
gap in sales performance. It can be done on the basis of specific products, market segments and/or sales
areas to evaluate the profit contributions of each and to identify those that are poor performers
 Market share Analysis: This reveals how well the organisation is doingcompared to competitors. It
determines market share, either by absolute measures (overall market share) or relative to main
competition (relative share), or to leading competitor (relative to market leader share). It also assesses
market share movements. The market share of a company suggests whether changes in company sales are
due to uncontrollable outside forces (or weaknesses) in the company's marketing program. It is a
comparison of the company's performance with the average performance of other companies in the
industry. This analysis requires periodic information on total industry sales and individual competitors'
sales.
Expenses-to-sales ratio: Annual plan control also requires checking actual expenses in relation to sales to
make sure that the company is not overspending while achieving its sales goals (or targets). The marketing
expense to sales ratio is used to ascertain whether the organisation is spending too much or too little on
marketing. The marketing expense to sales ratio includes a number of components such as sales force size
to sales, advertising to sales, sales promotion to sales, marketing research to sales and sales administration
to sales.

Customer-Attitude Tracking or Qualitative Appraisal: Customer attitude tracking studies give qualitative
information such as customer complaint or suggestion schemes, customer panels or customer surveys.
These are useful in revealing what customers feel about the organisation, its products, services and
behaviour towards society as a whole. Market development is measured by investigating attitudes of the
consumers, dealers and other publics towards the marketing efforts of the firm.

Customer satisfaction survey is also utilized to determine the amount of satisfaction or dissatisfaction of
the customers through research. Current research effort has proven that customers are dissatisfied with one
out of every four purchases and 5% of dissatisfied customers will complain. Also, most customers will
rather buy less or switch suppliers than complain. To avoid this, responsive companies obtain a direct
measure of customer satisfaction by conducting periodic surveys.

PROFITABILITY CONTROL (OR FINANCIAL APPRAISAL) This control measures the profitability of
various products, territories, customer groups, trade channels and order sizes. This information will help
management to determine whether to expand, reduce or eliminate any products or marketing activity.
Management of the firm sets the financial plan of the activity to be implemented during each financial
year. Financial ratios are calculated to measure efficiency of the company in its assets' utilization
STRATEGIC CONTROL: This review of the firm's basic operations from time to time to make sure they
are attuned to the changing environment and opportunities. It tests major areas where rapid obsolescence of
objectives, policies and programs is constantly occurring. It goes beyond annual plan control, profitability
control and efficiency control. Because of rapid changes in the marketing environment, each company
periodically reassess its overall approach to the market place. One of the basic tools mostly used for
strategic control is a marketing audit
Marketing Audit: The word audit simply means to examine i.e. is an official examination of business and
financial record to see that they are true and correct. This is usually done by a person called an auditor. A
marketing audit is a comprehensive systematic, independent and periodic examination of a company's
business unit and its marketing environment.
Characteristics

a. Comprehensive: Marketing audit covers all the major marketing activities of a business, not just a few
trouble spots. It reviews all the 4Ps (for goods) and 7Ps (for services) of marketing mix i.e. product, price,
promotion and place and the extended 3Ps which is people, process and physical evidence.

b. Systematic: It involves an orderly sequence of diagnostic steps covering the firm's macro and micro
marketing environment, marketing objectives and strategies. Therefore, it reviews both micro and macro
factors i.e. the internal and extreme environment in order to indicate the most needed improvement.

C. Independent: A marketing audit is conducted by an unbiased expert to provide objective result of the
analysis. This is the actual carrying out of the marketing audit. who/how to carry out the audit? Is it
internal/external audit? It can be done through the follow ways:

Self audit: This is within the organization (internal) From above audit: This is usually imposed on the
company's managing director by the marketing department. Company's audit office: It can also be carry
out by audit department of the firm.

Audit from across: It can be from production department to marketing department.

Outside audit: This is normally auditing the external factor surrounding the firm.

d. Periodic: It varies among companies. it can be monthly, quarterly, yearly depending on the best suitable
one for a particular company. This audit is a measurement employed for tracking day-to-day, week-to
week, and month to month performance to see that planned results are actually delivered

Marketing Audit Organization

The task of marketing audit can be handled by central auditing personnel, a person from any of the
functional areas, an auditing committee having members drawn from all departments or an outside
consultant can be contracted to do the job more objectivity.

Procedures for Marketing Audit

According to Stanton (1981), evaluation process consists of getting information on what happened, finding
out why and deciding on what to do. The plan and its implementation can be adjusted more realistically.
The following steps are necessary to set up an effective marketing audit:

a. Marketing audit starts with a meeting between the auditor and all marketing officers whose job are being
evaluated to establish common agreement on the audit's objectives, coverage, depth, data sources, report
format and time frame allocated for the audit.

b. The audit staff design data collection methodology covering who is to be interviewed within and outside
the company, the time and place of contact and other relevant issues are mutually agreed to ensure that
auditing time and cost are kept to a minimum.

C. Data are collected and analyzed to spot the firm's strength, weaknesses, opportunities and threats. The
evaluation process consists of the three steps viz get information on what happen, find out why and decide
on what to do.

d. Finally, translating the research plan to action and after collection of data has been completed, the
auditor formally presents the main findings and recommendations to improve marketing action.

Benefits of Marketing Audits

With periodic marketing audit management can:

1, Identify problem areas in marketing
2, Review the firm's strategies to keep abreast changing marketing
environment
3, Analyze the firm's to capitalize on its strong points
4,Spot lack of coordination in the marketing program, outdated strategies, or unrealistic goals.
5,Allow management to correctly place responsibility for good or poor performance.
6,Anticipate future situations to diagnose and prepare to overcome its challenges.
7, Evaluation of marketing activities result in identifying problems, which make actual performance to
deviate from set standard.

Chapter 15
MARKETING PLANNING AND CONTROL

Wells et al (1989) defined marketing planning as the act of analyzing marketing situation, identifying the
problems and opportunities and setting objectives and strategies to achieve the objectives. According to
Blots and Octon (1982), it is the task of observing changes in demand and considering how the
organisation seeks to attain its objectives by matching its resources with the outside opportunities. The
management looks ahead and works out the implications of changes for the organisation and creates a
marketing plan. Marketing plan, according to Kotler (1980), is a statement of intended actions, given
statement that specifies a systematic and integrated programme by which the organisation can match its
resources to the identified opportunities. It is the framework or totality of activities to be performed and
serves as blueprint for implementation and controlling the organisation's marketing efforts.
The task of planning requires identifying the most important future developments and careful thinking
through the implication of each of them. Companies operate in complex environment consisting of internal
and external factors. External factors the companies cannot control and the internal variables that can be
controlled interact in a complex way to affect performance of the firms particularly sales. Therefore,
managers should understand how all these variables interact and rationally make business decisionss.

PLANNING PROCESS

Marketing plan is an aspect of the overall corporate plan dealing focusing on marketing issues to achieve
marketing goals. The common elements of the plan among industrialists include executives summary,
situation analysis, setting of goals/objectives, setting of strategies, action programmes, budget,
implementation and controls.

SITUATION ANALYSIS: This is a systematic investigation of the marketing environments to identify

opportunities and problems or threats. McDonald (1979) remarked that situation audit involves gathering
relevant information about the external environment and the company internally. The planners carefully
evaluate the current marketing situation and monitor major challenges that must be properly addressed.
They also collect detailed and periodic data about the past and present operating climates of the company.
The investigation covers many operational areas of the firm such as its marketing efforts, competitors, the
market and market segments and external environmental forces. Situation analysis could take the following
form:

(1) A reviewing of recent developments, which are relevant to the organisation's activities. This is required
because any organisation's understanding of its current situation is dependent upon its recognition and
interpretation of recent events both within and outside its own boundaries.

2i)

What is the organisation's reputation? What is the centre

known for-good and bad points? ii) What are its relevant contacts?
iii) What is the attitude of staff (cleaners through to the centre manager) to change?

iv) What are the organisation's relevant physical assets?

v) What are the capabilities of staff? vi) What financial resources are available?

31) What actions is the organisation already committed to? ii) Factors likely to change in the competitive
environment?

iii) Potential growth of identifiable sub-markets,

iv) Major social and political changes

Adeleye (1998) disclosed that internally, the following marketing activities of the firm are examined to
know their strengths and weaknesses.

Product analysis: All attributes of the products are compared with their competing brands. Product
features, distinctiveness, competitive advantage, perceived and symbolic attributes and performance are
thoroughly deliberated upon to know its level of competitiveness. On product decision, the analysts
examine product use, product usage, number of users, frequency of use and brand share.
Market analysis: The management studies market behaviour and trends towards the product and
geographical areas of the consumers. Sales records are compiled and checked to know sales trend, market
size in monetary value. Total sales is measured in quantity and monetary value for the product and its
competitors. Size of the market, demand level and market shares are also determined from historical sales
records.
Marketing Resources: According to Berry and Donnelly (1975), marketing resources of the firm are
assessed such as PR activities, marketing staff competence, assets, marketing facilities, financial resources,
advertising and other promotion tools, history of the firm and its competitors and its current expenditures.
External analysis: This deals with monitoring external environments and collecting information about
events, relationship and changes taking place in them. It helps marketing planners to locate opportunities
and threats to avoid crisis management.

Competitive analysis: Industry and individual competitors are examined at macro or industry levels to
guide decision-making on marketing strategy.
Consumer analysis: This identifies and measures consumer needs, buying motives, benefits sought and
buying criteria. Market segmentation is applied to understand different segments and their behaviour in
terms of sociological, psychological, economic and personal variables.
Establish Marketing Objectives

In marketing objective setting, marketing management states precisely what the company anticipates that
the organisation will achieve at the end of a specified period of time. The former contributes to the
achievement of the latter. management must prioritize its aims from the short-term to the long-term and
ensure that the former contribute towards the achievement of the latter. The objectives have to be Realistic,
Measurable and consistent with other corporate objectives, if they are to be operational:.
1. They should be realistic
2. They should be measurable and
3. They should be consistent with other objectives.
Development of Marketing strategies Strategies are statements showing where major marketing efforts of
the firm should be directed in order to attain the marketing objectives. They determine how the
organisation will arrive at the objectives in short-term or long-term. These include:

Integration Strategies
Forward Integration: Forward integration involves gaining ownership or increased control over distributors
or retailers. Another effective means of implementing forward integration is franchising. Businesses can
expand rapidly by franchising because costs and opportunities are spread among many individuals.
Backward Integration: Manufacturers and retailers purchase needed materials from suppliers. It is a
strategy of seeking ownership or increased control of a firm's suppliers.
Horizontal Integration: Horizontal integration refers to the strategy of seeking ownership or increased
control over a firm's competitors. One of the most significant trends in strategic management today is the
increased use of horizontal integration as a growth strategy. Mergers, acquisitions and takeovers among
competitors leads to increased economies of scale and enhanced transfer of resources and competencies.
Intensive Strategies
These consist of market penetration, market development and product development are sometimes referred
to as "intensive strategies" because they require intensive efforts to improve a firm's competitive position
with. existing products.
Market Penetration: A market penetration strategy seeks to increase market share for present products or
services in present markets through greater marketing efforts.

Diversification Strategies
Concentric Diversification: Adding new, but related, products or services is widely called concentric
diversification.
Conglomerate Diversification: Adding new, unrelated products or services. to serve new market segments
is called conglomerate diversification.
Horizontal diversification: Adding new, unrelated products or services for customers is called horizontal
diversification. This strategy is not as risky as conglomerate diversification, because a firm should already
be familiar with its present customers.
BENEFITS OF MARKETING PLANNING

a) It enables organization to identify the most important future developments and put up effort and
discipline of thinking through the detailed implications of each of them.

b) It forces management to consider environmental issues in conjunction with the overall competences and
resources of the organisation.

c) It also highlights deficiencies in present abilities and provides a framework for assessing the possibility
of overcoming such weaknesses. d) It permits an organisation to prepare in advance for expected
circumstances: e.g. what actions should be considered in response to

the predictions of increased long-term change in the operating

897 environment. e) It uncovers events that would otherwise go unrecognized until they occur: e.g. the
implications of a change in any external forces can be considered before it occurs.

f) It serves as an antidote for hasty and emotional behaviour: e.g. constrains overreaction to sudden bursts
of interest in particular activities due to, say, an international event.

g) It improves communications amongst members of the organisation: e.g. managers are made aware of the
intention to attract a new type of demand and have time to evolve suitable programmes for such groups
and indicate any additional requirements that they may identify.

h) By planning, implications of future development are analysed to assist management in paying attention
on possible threats to current activities and on the potential future opportunities for organisational growth.

i) It reveals potential deficiencies in current abilities and gives procedure

for examining how to overcome the weaknesses. j) The organisation can prepare in advance for unexpected
events.

k) It gives early warning signals for marketing management to take decisions required to cope with the
anticipated changes.
PROBLEMS OF MARKETING PLANNING

a) The plans cannot be implemented rigidly as it is supposed to serve merely as a guide to action of
employees. b) Plans regular changes or adaptation as forces in the external

environment are changing in unpredictable manner thereby making the plans' attainment a mirage. c) There
may arise inability to agree on and define objectives and strategy

among managers.

d) Rivalry can occur between groups in the organisation leading to sub optimization and use of the
planning process as a mechanism for obtaining resources.

e) Failure to allocate authority to those responsible for achieving the plan can lead to failure.

f) Failure to obtain support of all levels of staff can kill the plan workability.

g) Formalized marketing planning is extremely difficult in practice, perhaps the most difficult of all the
marketing skills. The reason is that the degree to which any company can develop an integrated,
coordinated and consistent plan depends on a deep understanding of the marketing planning process itself
as a means of sharpening the focus of all levels of management within an organisation.

h) It is immensely difficult because it is in practice a complex process, proceeding as it does from reviews
to objectives, strategies, programmes, budgets and back again, until some kind of acceptable compromise
is reached between what is desirable and what is practicable, given all the constraints to which any
company is subject.

i) The literature on marketing planning being generally so inadequate makes it difficult to obtain
any practical guidance on the subject. The result is that marketing managers try to carry out
marketing planning without really understanding how it works and it is not surprising that
they quickly reject it because it does not help them in any way.

Chapter 18
MARKETING ORGANISATION
A marketing organisation is a group of persons in marketing department who work together toward
achieving common marketing objectives. It involves division of the overall marketing functions into
groups of tasks, determining objectives for individuals and subgroups, assigning tasks to competent
individuals and groups that can perform and specifying their authority-responsibility relationships. The
structure can be expressed in an organisation chart and supported by manual or other documents.
Marketing management of the firm consciously plans and specifies the type of structure it requires to
achieve the best result.

Types of Marketing Organisation Structure

Marketing departments have evolved through many stages. Today, the modern marketing department can
be organised by function, by geographic location, by product or by customer markets

FUNCTIONAL ORGANISATION
This is the most centralised and bureaucratic design and simple in nature and operation. This method
works well in firms that adopt centralized marketing operations with few products and customers. It
operates on a formalized mechanism and relies primarily on the hierarchical mechanism for
communication and operations.

ADVANTAGE

It is very simple to operate and allows division of labour to function well.

Coordination of marketing tasks is placed under functional management structures through committee
meetings.
The Marketing Director is a member of the Board of Director (BOD) and helps to instill marketing-
orientation in the organisation's culture and values. He does this by participating in marketing and
corporate planning. He provides market intelligence and functions in plan implementation, guiding and
leading R & D policy. He determines the marketing mix and properly coordinates areas that affect other
departments.

It operates on hierarchical format.

It promotes simple line of communication. It promotes specialization and professionalism.

It is cost effective and most suitable for small scale enterprises. No manager is allocated to cover any
particular market or product as there is

Disadvantages

no planning focused on this area.

Each functional subgroup sets its own goal to have higher share of the
company's budget and status. This can cause an unhealthy rivalry, conflict

and difficulty in coordination.

It is not effective for large organizations. It breeds rivalry among departments.

GEOGRAPHIC ORGANISATION

Also called region-based organisation, this pattern is applied by firms that serve national and international
markets. It is organized to cover the regional or zonal borders or territorial coverage in which the target
market is divided.

The market is divided into regions, zones and districts. It is most suitable where regional climate, tradition
and culture cause differences in the needs and product features.

. Advantages

i. It ensures better implementation of sales strategies in each local market.

ii. It encourages a better control over the territory's sales force.

It creates employment in the local market because it encourages the employment of indigenes of the local
territories who can relate better with the local consumers.

iv. It promotes branching and independence of territory by giving them relative freedom and flexibility in
their operations. Customers can be served quickly and more effectively.

Disadvantages

a)It is an expensive operational marketing system

b) It promotes duplication of efforts through creation of multiple positions.

c) It does not provide for product expertise or specialized knowledge to assist customers for their needs.

PRODUCT-BASED ORGANISATION
This is also known as Brand Management system. It is used by firms that have diverse products with their
peculiar needs and problems. The basis for which firms organize their sales force department is product
specialization. Companies producing variety of products often establish this structure to cater for the
marketing of each product brand. This structure does not in anyway replace the functional structure rather
it serves as another layer of marketing activities.

Advantages:

1. Each product manager obtains information from other functional units in marketing and non-marketing
department to perform well.

II. It makes the firm flexible to develop special marketing mix for different

products.

III. The manager can quickly react to market problems relating to his product without involving many
managers in long deliberations. IV. Smaller brands of product are given enough attentions,

V. It is a training ground for young managers by exposing them to other operational areas like finance,
production, personnel and other aspects of marketing.

VI. It is easy to coordinate activities of product managers and to make design

VII. Each product manager plans the strategy for the brands, supervises, encourages their development and
recommends the most suitable marketing mix.

VIII. Managers identify and react more quickly to the threat and opportunities in each product market IX.
The managers ensure improved coordination of functional activities within the cross product market..

X. There is increased attention to smaller product market entries which might either-to be neglected in a
functional organisation. Disadvantages

a) The product manager may not be given adequate authorities they need to carry out their responsibilities.
They sometimes persuade other managers to enjoy their support.

b) As market research, advertising, etc are responsibilities of other managers, all product/brand managers
compete seriously for the limited resources and time of the outside managers. Conflict may arise as other
managers have their own priorities and they can use their closer relationship with some brand managers to
treat their cases.

c) It is expensive to implement as each product can require many managers for its proper management and
because duplication of functional operations within a market territories.

d) Product brand managers become specialists in their areas but merely achieve functional expertise

e) Brand managers normally manage a brand for few periods before they are moved.

MARKET-MANAGEMENT or CUSTOMER-BASED ORGANISATION

This system subsists when firms divide their sales departments on the basis of customer specialization.
Customers may be grouped by type of industry or channel of distribution.

Advantages

1. The marketing activities are organized to meet the needs of distinct customer group rather than being
focused on marketing functions, regions or products.

II. Companies organise themselves to understand and deal with individual customers rather than mass
market or market segment. III. This structure often leads to market-centred structure organizations.

IV. This structure enables marketing team to relate well with a large number of individual decision-makers
at customer locations. They are able to monitor changes in the markets, to forecast sales and to investigate

specific customer problems thoroughly.

V. It meets the needs of different consumer groups and solves problems arising from changes in the market

VI. Each customer group or market segment is given its due marketing mix.

Disadvantages

1. It leads to duplication of efforts as it does not eliminate the use of other marketing structure.

2.It is expensive to operate.

3. It often breeds rivalry among the line managers

PRODUCT/MARKET ORGANISATION

This system of marketing department structure is a counterpart of the customer-based structure. But it is
often called product management/market management structure. It is also called the matrix management or
hybrid of product and market structures. It is adopted when company makes product that flows into many
markets.

CORPORATE-DIVISION ORGANISATION

Large multi-product companies or conglomerate having many corporate divisions install this structure.
Each larger division or group of companies has its own marketing department in order to have firm control
and knowledge over its market.

At the top management level, there is a corporate marketing staff that performs a number of functions to
the divisional marketing departments. It reviews marketing activities and opportunities

Chapter19
Sales Forecasting
A sales forecast is an estimate of the amount or unit sales for a specified future period under a proposed
marketing plan. The American Marketing Association define sales forecast as "an estimate of sales, in
dollar or physical units for a specified future period under a proposed marketing plan and under an
assumed set of economic and other forces outside unit for which the forecast is made" (Abhishek, 2013). It
is one of the most important elements of a business plan. It is a quantitative estimate of the total possible
sales by all the firms selling the product in a given market (Abhishek, 2013). Sales forecasting refers to
prediction or anticipation of sales revenue that can be generated in a specified for future period, if a
specified marketing mix and strategy are implemented.

Uses of sales forecasting

 A sales forecast helps every business make better business decisions. It

helps in overall business planning, budgeting, and risk management. 
 Sales forecasting allows companies to efficiently allocate resources for
future growth and manage its cash flow.
 Sales forecasts help sales teams achieve their goals by identifying early
warning signals in their sales pipeline and course-correct before it’s too late
  Sales forecasting also helps businesses to estimate their costs and revenue
accurately based on which they are able to predict their short-term and long-
term performance.
USERS OF SALES FORECASTS

Marketing managers: They use sales forecasts to determine optimal sales force
allocations, set sales goals and plan promotions and advertising, market share,
prices and trends.

Production planner: They need forecasts in order to schedule production activities,

order materials, establish inventory levels and plan shipments. Other areas that
need forecasts include material requirements (purchasing and procurement), labor
scheduling, equipment purchases, maintenance requirements, and plant capacity
planning.

The personnel department: It requires a number of forecasts in planning for human

resources. Workers must be hired, trained, and provided with benefits that are
competitive with those available in the firm's labor market.

Hospital administrators: They forecast the healthcare needs of the community. In

order to do this efficiently; a projection has to be made of: growth in absolute size
of population, changes in the numbers of people in various groupings, and varying
medical needs these different age groups will have.

Tertiary instituions: They forecast student enrollments, cost of operations, and in

many cases, the funds to be provided by tuition and by governmentappropriations.
SALES FORECASTING METHODS

There are various techniques used for sales forecasting thus an organization can
choose from a wide range of forecasting techniques. The methods are varied and
are available in qualitative and quantitative terms. There is no single full proof
method as a company operates in competitive market with demand fluctuations.
QUALITATIVE OR SYNTHETIC FORECASTING METHOD
Qualitative forecasting analyses can be used to formulate forecasts for new
products having no historical data; to devise or adjust mid- or long-range forecasts
for corporate planning; to adjust quantitatively generated product-line forecasts;
and/or to adjust patterns (trends) generated by endogenous quantitative techniques
(such as time series). Below are the types of synthetic forecasting methods,

a) SURVEY OF BUYER INTENTIONS: Forecasting is essentially the art of

anticipating what buyers are likely to do under a given conditions. This
immediately suggests that a most useful source of information would be the
buyers themselves. A list of potential buyers is drawn and each buyer is
interviewed orally about how much of the product he intends to buy in a
future period. Market research personnel are used for the interview.
b) COMPOSITE OF SALES FORCE OPINIONS:The sales force composite is
a qualitative forecasting method that uses the knowledge and experience of a
company's salespeople, its sales management and/or channel members to
produce sales forecasts. The grass roots approach to a sales force composite
accumulates sales forecasts for the regions, products, and/or customers of
individual salespeople.
c) EXECUTIVE JUDGEMENT: This is also known as jury of executive
opinion. Opinions of senior executives of the firm are sought and compared
to the estimates obtained from other methods. Where they have many years
of experience and demand is relatively stable this method provides reliable
estimates.
d) The Delphi method:It is a group forecast in which experts used respond to
carefully designed questionnaire on individual or personal basis. Each
member is not known to other members hence views or sales figures
provided by each member are independent of or not influenced by other
members.

MARKET RESEARCH TOOLS FOR QUALITATIVE FORECASTING

The information obtained through market research efforts can, in many cases,
enhance qualitative forecasts. For example, assume a jury of executive opinion
is attempting to formulate a long-range forecast to guide corporate capacity and
budget planning. Information obtained from market research can be provided to
a jury of executive opinion; to members of a panel participating in the Delphi
method; to salespeople, sales managers, or independent distributors
participating in a sales composite technique;
QUANTITATIVE/EXPLICIT OR ANALYTICAL METHODS

Despite the above important role of sales forecasting, it is very difficult to

develop a good forecast. Yet, the sales manager has historical data that can be
statistically extrapolated to give future sales forecast. He also knows the market
directly and indirectly through his sales force efforts.
The following methods belong to quantitative forecasting: 1) SIMPLE
AVERAGE OR MEAN SALES DEMAND: The average of sales

data over past years is estimated and adopted as sales forecast. ii)
PROJECTION OF PAST SALES: Next year's forecast is made equal to that of
the current year or can be improved by addition of a given

percentage to forecast of the current year. This method is simple and not
expensive. Where the company belongs to matured industries that have
relatively stable sales trend, this method is good and acceptable.

MOVING AVERAGES: An individual level of demand is constantly

adjusted according to trends or passage of time. As new actual sales value is

available, it is incorporated into the averaging formula so that the calculated
values move through time. In this method various weekly or monthly past
demands are added and oldest values are ignored in the series. The average of
the series is the moving average. Therefore, given a set of sales figures Y ₁, Y,
Y--- a moving average of order "n" is the sequence of arithmetic means. These
averages tend to reduce the amount of variations present in a data or eliminate
unwanted fluctuations.

Advantages: It is used for short-term forecasting of a few months ahead. It

provides a rolling forecast as sales for the next month are taken as

the average of monthly sales for the past years. It is simple to estimate.

It considers influencing trends of the market that can reduce random

fluctuations.

Advantage: The forecast tends to lag behind the trend.

iv) EXPONENTIAL SMOOTHING: This technique projects observed trends in

sales data into the future and considers errors of previous forecasts. It involves
application of a simple statistical formula to past sales data, which gives more
weight to recent data.
v) REGRESSION ANALYSIS: In this approach the sales forecasting tool
relates quantity sold in the past to some variables influencing sales levels such
as income, price, population, etc.
Advantages:

*It sets objective and measurable forecast.

It reveals factors that influence initiative forecasting methods. Disadvantages:

Over-reliance on statistical sales figures can fail to consider

subjective influences that affect forecast. *It is not easy to determine if there is
little or no historical record for

analysis.

vi)TIME SERIES ANALYSIS: This forecasting technique applies

statistical and mathematical tools to analyze past sales data and predict

the future sales.

vii) MARKET - TEST ANALYSIS: The forecaster applying this method
conducts a market test in specific sales territories from the samples of
respondents, the company's sales potential or market share is estimated over
many territories.
viii) MODELING OR MODEL BUILDING: The forecaster views sales as a
function of many variables and therefore more complex relationships have to be
calculated. To estimate sales figure for a company having many products in
different markets, a series of equations are developed. This is called a model
showing statistical representation of sales.
Advantages:

Modeling uses factors that affect sales in forecasting.

⚫ The forecaster can study workings of the model to develop greater

knowledge of forces in the market that determine sales. Experimentation on

many variables that can influence sales may make forecasters to come up with
results of alternative assumptions on future

events.

Therefore, a model can have wider value to marketing management but not
only in sales forecasting.

Disadvantages
⚫ Model is not a perfect substitute but a complement to other methods

of forecasting. It has to be constantly reviewed as forces used to calculate the

equations change over time.
In conclusion, no firm can conduct its business successfully without trying to
measure the actual size of markets. Presents and future quantitative
measurements are necessary for the analysis of market opportunity, the
planning of marketing programmes and the control of marketing efforts

Chapter 20
Market Segmentation

Market segmentation is the identification of portions of the market that are

different from one another. The needs for market segmentation call for
understanding customers and satisfying their needs better than the competition.
BASES FOR MARKET SEGMENTATION
The major variables are: geographical Segmentation, demographic
Segmentation, psychographic Segmentation and behavioural Segmentation.

GEOGRAPHICAL SEGMENTATION

Marketers can segment according to geographic criteria such as nations, states,

regions, countries, cities, neighborhood or postal codes. The geo cluster
approach combines demographic data with geographic data to create a more
accurate or specific profile. Companies segment the market by attacking a
restricted geographic area.
DEMOGRAPHIC SEGMENTATION

Segmentation according to demography is based on variables such as age,

gender, occupation and education level or perceived benefits which a product or
service may provide. Demographic segmentation divides markets into different
life stage groups and allows for messages to be tailored accordingly. Consumer
needs, wants, and usage rates often vary closely with demographic variables
and variables are easier to measure

than other types of variables.

PSYCHOGRAPHIC SEGMENTATION
Psychographic segmentation, also called lifestyle, is measured by studying the
Activities, Interests and Opinions (AIOs) of customers. It considers how people
spend their leisure and external influences they mostly respond to and are
influenced by. Psychographics identify the personal activities and targeted
lifestyle image they are attempting to project. Lifestyle products may pertain to
high involvement products and purchase decisions, to specialty or luxury
products and purchase decisions.
BEHAVIOURAL SEGMENTATION

This involves dividing buyers into groups based on their knowledge, uses or
responses to a product, attitude towards, usage rate, loyalty status and readiness
to buy a product. It is based on actual customers' behaviour towards products.

Media Segmentation
It is based on the fact that different media tend to reach different audiences. If a
brand pours its entire budget into one media, it can possibly dominate the
segment of the market that listens to the radio station or reads magazine. It is
mostly practiced by companies that have some control over the media and can
somehow discourage competitors from using that media.

Price Segmentation
Variation in household incomes creates an opportunity for segmenting some
markets along a price dimension. If personal incomes range from low to high,
then a company can offer some cheap products, some medium priced ones and
some expensive ones.
Time Segmentation Some stores stay open later than others, or stay open on
weekends. Some products are sold only at certain times of the year (e.g.
Christmas cards, fireworks). The Olympics come along every four years.
Department stores sometimes schedule midnight promotional events. Thus time
dimension. can be an interesting basis for segmentation.

Emotive Segmentation
 Emotive segmentation focuses on core emotional needs of the consumer when
doing the segmentation. It looks at gratification aspects like "how I want to feel
when I am using a brand/product" or personality aspects like "how I want to be
seen as when using a product".

Cultural Segmentation.
Culture is used to enhance customer insight by classifying markets according to
cultural origin. It enables appropriate communications to be crafted to particular
cultural communities and is important for message engagement in a wide range
of organizations, including businesses, government and community groups.
Multi-Variable Account Segmentation

Sales territory management uses more than one criterion to characterize the
organisation's accounts, such as segmenting sales accounts by government,
business, customer, etc. and account size or duration, in effort to increase time
efficiency and sales volume.

PROCESS OF MARKET SEGMENTATION

The target market is a set of buyers sharing common needs or characteristics that
the company decides to serve. Sulekha (2011) presented an eight steps process of
segment as:

Step One: Identify the Target Market: The first step is to identify the target market.
The marketers must be very clear about who all should be included in a common
segment by ensuring that the individuals have something in common. A male and a
female cannot be included in one segment as they have different needs and
expectations.
Step Two: Identify Expectations of Target Audience: The needs of the target
audience are investigated to enable the product meet expectations of the
individuals. Thus the marketer interacts with the target audience to know more
about their interests and demands.
Step Three: Create Subgroups: The overall market is clearly defined to produce
meaningful segments. The organisations create subgroups within groups for
effective results.
Step Four: Review the Needs of the Target Audience: It is essential for the
marketer to review the needs and preferences of individuals belonging to each
segment and sub-segment. The consumers of a particular segment must respond to
similar fluctuations in the market and similar marketing strategies
. Step Five: Name the Market Segment: With enough information at the

company's disposal, it can select one or more market segments that fit with its
strategy and offer good potential for growth. It requires giving an appropriate name
to each segment to ease implementation of strategies. A kids section can have
various segments namely new born, infants, toddlers and so on.

Step Six: Formulate Marketing Strategies: The firm cannot have same strategies
for all the segments hence it ensures there is a connection between the product and
the target audience.
Step Seven: Review the Behaviour: Evaluate the identified segments against some
criteria after identifying potential market segments to determine if the segments are
compatible with the company and offer a real economic opportunity.
Step Eight: Size of the Target Market: It is essential to know the target market size.
The target market is a set of buyers sharing common needs or characteristics that
the company decides to serve. There is need to collect necessary data for sales
planning and forecasting.

IMPORTANCE OF MARKET SEGMENTATION

Improves knowledge of market:
Identifies market opportunities:
Better assessment of competitors:
Better utilization of firm's resources:
Consumer orientation:
REQUIREMENTS FOR EFFECTIVE SEGMENTATION
To ensure effective segmentation Kotler and Keller (2006) presented the

following basic characteristics as the requirements or conditions: Measurability:

This is a condition which demands that members of the market segment must be
measurable on the chosen variable. That is, the age of customers, size purchasing
power, attitude and characteristics of the segments can be measured.

Substantiality: This implies that each market segment must be large enough to be
sufficiently profitable to the organisation. This is to justify the reason for
developing and maintaining a specific marketing mix.
Accessibility: The market segment should be accessible through existing marketing
institutions like middlemen, advertising media, company sales forces with a
minimum cost and effort.
Profitability: The segment shows signs of profitability to be considered viable.
Stability: The segment should be stable to be effective. In other words, efforts must
be made to ensure that the market segment is not so volatile such that the changes
may be detrimental to business.
Identifiability: The buyers constituting the market segment must be such that they
can be identified. Identifiability is a characteristic that makes it possible for the
marketer to group the buyers into age, income, sex and occupation to know the
specific requirements of his market segments.

Differentiable: The segments are distinguishable and respond differently to

different marketing mix elements and programs Actionable: It should enable
effective marketing programs to be formulated to attract and serve the segments.
TYPES OF MARKET SEGMENT

There are different types of marketing segments resulting from segmentation.

Among them are;

1. Market Atomization: Single market strategy, also known as concentrated

strategy, involves concentrating all the firm's efforts in a single segment
with a single marketing mix.
Advantages of the Strategy
The advantage of the single market strategy is that the company is free to devote
all of its resources to attracting a single, narrowly defined type of customer with a
specific need it can fulfill better than other companies.
Disadvantages
In reality worker mobility is not as great as hoped.
Many businesses still see barriers. Monopolies may be formed - these are an
example of market failure.
2. Multi Segment: Instead of focusing on a target market as is the usual trend
of companies to better position their product, multi-segment marketing aims
at the market as a whole and attempts to maximize the reach in order to
generate as many sales as possible.
Advantages
Greater financial success
Economies of scale
Disadvantages
High costs
Cannibalization i.e. reduction in sales volume, sales revenue, or market share of
one product as a result of the introduction of a new product by the same producer
3. Overlapping Segment: Here, consumers have certain things in common and
irrespective of the things they have in common they expect marketers to
serve them differently and at the same time be able to have optimal
satisfaction from them. This segment represents a situation where customer
groups have characteristics that are heterogeneous to each other as well as a
common need that unites them.
4. Mutually Exclusive Segment: This implies that at the end of the mass
market assessment, it is considered that consumer needs vary widely and the
marketers have to come with diversified products. It represents extreme
situation where the consumer groups or segments do not share anything in
common.
Chapter 21
Market Targeting
 Target market, according to (Chamberlin, 2004), is a group of customers with
similar needs that form the focus of a company's marketing effort. Targeting
refers to tailoring the company's marketing effort to appeal to a specific group
of customers. It is identifying specific target market and delivering products and
promotion ultimately maximize the profit potential of the market
MARKET ATTRACTIVENESS
Size
Growth
Stability
Price sensitivity
Competition
Accessibility
SUITABILITY OF MARKET SEGMENT TO THE FIRM

Market segments are evaluated according to how they fit the firm's objectives,
resources and capabilities. Some aspect of it includes:

Whether the firm can offer superior value to the customer in the segment.

The impact of serving the segment on the firm's image.

Access to distribution channel required to serve the segment. The firm's

resources against the capital investment required to serve

the segment.

Small businesses can gain knowledge and information on how to segment

their markets using secondary data and qualitative research from: Trade and
association publications and experts

Basic research publication

 External measurement services.

Conducting informal factor and cluster analysis

Watching key competitors marketing efforts and copying them. Talking to key
trade buyers about new product introductions. Conducting needs analysis from
qualitative research with

individuals and groups.

TARGET MARKETING STRATEGIES

Market Penetration: This is the attempt to increase sales of current products in

present markets. Some strategies to penetrate market include; more aggressive
marketing, increasing service to improve renewal rates,
attracting competitors' customers directly (Sherer, 2001). Market Development:
This is the effort to increase sales by selling current products into new markets.
Firms may advertise to reach new target customers within a geographic region, or
look to international market for expansion.
Diversification: This means opening completely new lines of business, with new
products in new market. Many organizations diversify their product mix to
mitigate risk related to economic variables such as recessions.

Single Segment Strategy: This strategy involves the use of only one marketing mix
for market segment. Usually small scale one companies with limited budget and
resources opt for this form of target marketing strategy.

Selective Specialization Strategy: In this strategy, several marketing mixes are

implemented in different segments. The same product is marketed differently in
different segments, which is why this target marketing strategy is also known as
"differentiated strategy".
Product Specialization: The product manufactured is customized and then
marketed to cater for different market segments.

Market Specialization Strategy: In this form of target marketing, the companies

first finalize the market segment they wish to and then manufacture a variety of
products exclusively for this segment.
Chapter 22
PRODUCT POSITIONING
Kotler (2003) defines product positioning as the act of designing the company's
offering and image to occupy a distinctive place in the mind of the target market.
BENEFITS OF PRODUCT POSITIONING

Advantages of product positioning in the market place are given by Aminu (2008)
as:

(i) It makes the producers to build good image for the product and the
company which will lead to profit-making in the long-run.
(ii) It helps in determining how to correct a product weakness and
thereby enhance product appeal.
(iii) Producers are able to gain control of the product and the market by
giving the right product to the right consumer thereby eliminating or
reducing complaints about the products.

(iv) Product positioning shows weakness and strength of a competing product.

(iv) The product is able to have competitive advantage over other

competing products in market place.
(v) Effective positioning is needed to determine what consumers

KEY FACTORS TO SUCCESSFUL POSITIONING

Jobber (2004) proposes four key factors known as 4Cs to successful positioning
and these are
i. Clarity: The positioning idea must be clear in terms of both target market and
differential advantage. This is because complicated positioning statements are
unlikely to be remembered. Such messages should be simple. For example, MTN's
"Any where you go" or BMW "The Ultimate Driving Machine".

ii. Consistency: People are bombarded with messages daily. To break through this
noise, a consistent message is required. Confusion may arise where organization
changes positioning statement yearly e.g. "quality of service" and then superior
product performance.

iii. Credibility: The differential advantage that is chosen must be

credible in the mind of the target customer and iv. Competitiveness: The
differential advantage should have a competitive edge. It should offer something of
value to the customers that the competitor failed to offer.
POSITIONING PROCESS

Positioning strategy processes vary from industry to industry, and company to

company. There is a framework for designing positioning strategy, which might be
applied by the companies.
Market review
Identification of competition
Customers Analysis
Revisiting of marketing objective
Selection of position
Monitoring the position

POSITIONING STRATEGIES
Attributes positioning
Use or application positioning
Positioning by competitive advantage
Positioning by product user
Positioning in relation to a product class
Price positioning
Position by price/quality
EXECUTING POSITIONING PLAN

Executing of positioning plan is very important to a company that wanted to

maintain its status quo in the market place (Courtland, 1999). People within and
outside the organization play a prominent role in executing the positioning plan to
shape the way customers and prospects perceived the product. The following are
necessary for executing the positioning plans.

(1) INSIDE THE COMPANY: The communication of positioning to people inside

the organization such as product designer, market researchers, account department,
sales personnel, etc must coordinate all efforts of marketing mix to achieve the
positioning strategy the company wants to adopt.

(2)

OUTSIDE THE COMPANY: People outside the company including advertising

agency, public relations agency, consultant, etc need to know the positioning plans
before the products is introduced so that they can help in developing marketing
materials needed for the positioning.

Hence, there must be cooperation and effective communication between outside

and inside company executing the positioning plan for the product to gain more
attention in the mind of the target audience.
PROBLEMS OF POSITIONING
1. Under-positioning: This happens where the message is simply too vague and
customers have little real understanding of what the organization stands for and
exactly how it is different from the competitors. The brand is seen as just another
entry in a crowded market place. When Leventis introduced their "Snacky"
sometimes ago, customers were distinctly unimpressed.
2. Over-positioning: This is giving buyers too narrow a picture of the company. It
occurs where customers perceive the organizations range of products or services as
being simply expensive.
3. Confused positioning: This is leaving buyers with a confused image of the
company as a result of making too many claims about the brand.
4. Doubtful positioning: Buyers may find it hard to belief the brand claims in view
of the product's features, price, or manufacturer.
METHODS OF CORRECTING PRODUCT POSITIONING ERROR
Communication: Having agreed that positioning has to do with what is done to the
minds of customers, the role expected of communication is such that exchange of
thoughts and messages has to be tailored to the peculiar image and perception of
the company. It is always better to introduce prototype advertising or copy
platforms so that management can see the strategy come to life.

Internal Programmes: The positioning strategy adopted by an organisation needs

much inside education to avoid potential problems. Internal communications
programmes should be run before or in line with the company's external
programme.

Financial Implication: Any good plan should be capable of being justified on the
strength of cost-benefit analysis. To optimize the position of the organisation,
efforts should be made to analyze what is spent by the firm and those of its
competitors for positioning.
Chapter 23
PRODUCT REPOSITIONING
DEFINITIONS: Corstjens and Doyle (1989) define product repositioning as "the
conscious effort on the part of the retailer to change its segments and or differential
advantage". This definition conceptualizes repositioning as a strategic decision, a
view that is similar to the notion of positioning as "selecting those associations
which are to be built upon and emphasized and those associations which are to be
removed or de-emphasized" (Aaker

& Shansby, 1982).

THE REPOSITIONING STRATEGY

Repositioning strategies are used to respond to changes in consumer tastes or

market conditions or a change in competitor's strategy. The extent of the
repositioning will depend on the level of changes in tastes, lifestyle and
technologies and also on how well competitors are doing. Corstjens and Doyle
(1989) identified types of repositioning strategies

1. Zero repositioning: This is not a repositioning at all since the firm

maintains its initial strategy in the face of a changing environment.

2. Gradual repositioning: This is where the firm performs incremental and

continuous adjustments to its positioning strategy to reflect the evolution of its
environment.
3. Radical repositioning: This corresponds to a discontinuous shift toward a new
target market and or a new competitive advantage. When products reach maturity,
they are well known.
Product repositioning: Changing the product to makes it more attractive to the
current market.
Intangible repositioning: This involves using the same product to target a different
market segment.
Tangible repositioning:This is most radical strategy as both product and target
market are changed.
REPOSITIONING PROCESS
(a) MARKETING RESEARCH: It involves examining or investigating the market
in order to detect the causes for reposition or possible low or reduction in sales
volume of the product.

(b) IDENTIFICATION OF DEMAND AND ITS NEEDS: This stage involves

finding what the target market or audience really wants from the brand/product to
the consumers.
(c) TEST MARKETING: Having identified the needs of the target audience and
worked on it, some selected users of the product/brand being repositioned are
invited to use the product, feel it to know their perception of the product and if any
more adjustment is needed before it is finally released to the open market for sale.

(d)

COST-BENEFIT ANALYSIS: This entails estimating price the product to be

repositioned will sell after deducting the cost incurred.

(e)

DESIGN AND PACKAGING: It involves designing the package of the product

repositioned by adding beautiful colors and other features to make it more
attractive to the customers and ease movement of the product and for protection.

DISTRIBUTION CHANNELS: This stage involves the means through(g)

which the brand will get to the target audience in order to attract new customers
and retain the existing ones.

PROMOTION: It is the process of communicating and passing message about the

product repositioned to the audience. This can be done by using promotional tools
(advertising, sales promo personal selling and publicity and public relations).

(h)

DIRECT SALES: This is also called personal selling or face-to-face or one-to-one

selling to the target audience. In most cases this is done to observe reaction of the
consumers towards the product. Consumers also prefer this method because they
receive direct response from the salesman.
CUSTOMER SERVICE: This is examining the reaction, feeling and attitude
exhibited by customers or users of the product have been repositioned after using
it.
PROBLEMS OF REPOSITIONING

Problems of repositioning as given by Michael and Peter (1992) are:

(i) CONFUSED REPOSITIONING: This happens when buyers are

unsure of what the organisation stands for and do not clearly see how
it is different from the competitive companies and products in the
choice presented.
(ii) OVER-REPOSITIONING: This occurs where customers perceive the
organization's range of products and /or services as being simply
expensive.
(iii) UNDER-REPOSITIONING: It happens where the message is simply
too vague and customers have little real idea of what the organisation
stands for and exactly how it is different from the competition.
(iv) POOR POSITIONING OR REPOSITIONING: This usually occurs
when all the ingredients of repositioning are not effectively utilized
orapplied, here the buyers see the product has it were before it was
positioned.

(v) INADEQUATE FUNDING: This is insufficient financing of the

repositioning tasks by company that intends to reposition its product.

ADVANTAGES OF PRODUCT REPOSITIONING

A number of advantages accrue to organisations that reposition their products.

These include:

1. Repositioning an organizational product helps the organisation to redesign its

offer and image so as to occupy a distinct and valuable place in the mind of its new
and existing customers.
2. It aids an organisation in attaining greater competitive edge over others.

3. Repositioning the product of an organisation assists in increasing the sales

volume of the company's product thereby boosting its profitability.

4. It assists in retaining new and existing customers' loyalty towards the

product.

5. Repositioning is a way of creating awareness and communicating it to the

target audience about the added benefits to the product being repositioned in
order to secure a greater space in the minds of the consumers.
6. DISADVANTAGES OF PRODUCT REPOSITIONING
7.
8. The coherence between the components of the marketing mix influences the
strength of a brand image. The failure to establish such coherence
contributed to demise of several repositioning efforts among retailers. It is
more difficult to reposition a brand when the new associations are
9.
10.inconsistence with existing brand image and the firm's core competencies.
Time elapsed between market changes and the repositioning affects the
options available to the firm.

Green Marketing
Green marketing is the marketing of products that are presumed to be
environmentally safe. It incorporates a broad range of activities, including product
modification, changes to the production process, sustainable packaging, as well as
modifying advertising.

Greenwashing is the process of conveying a false impression or providing

misleading information about how a company's products are more environmentally
sound.
SOCIAL MARKETING AND SOCIAL RESPONSIBILITY

social marketing is an approach used to develop activities aimed at changing or

maintaining people's behaviour for the benefit of individuals and society as a
whole.

what is social responsibility in marketing? It involves addressing social, ethical and

environmental factors in the promotion of products or services and showing the
positive impact and direct benefits of the offering to your target audience.

INTEGRATED

MARKETING

COMMUNICATION

VS

TRADITIONAL

COMMUNICATION: IMC is a concept of bringing together separate aspects or

elements of marketing and communication to consumers to buy their products or
services as a whole as one

strategy. It means to integrate the marketing strategies to connect places and

people.

Traditional communication can be defined as the physical act of transferring

information. We speak, hear, send and receive text and instant messages, and
transmit e-mail. We engage in phone conversations; we listen to MP3s, radio, and
TV; we read and write.
FIVE MOST RECOGNIZED PROFESSIONAL BODIES RELATED TO
MARKETING IN

NIGERIA.

Chartered Institute of Marketing of Nigeria.

FUNCTION

1. To develop Programmes of educational support and forum for exchange of ideas

relating to the advancement of the practices of marketing management.

2. Conduct examinations and other form of assessment for the award of certificates
and membership of the institute. 3. Authorize qualified individual to use the
designatory letters denoting his grade of

membership.

Institute of Credit and Risk Management.

FUNCTION

1. The Institute of Credit Administration is committed to bringing changes to the

face and habit of credit business at all levels in Nigeria and influence structures of
risk measurement to protect the item on the balance sheet called "accounts
receivable."

2. The Institute of Credit Administration (ICA) is Nigeria's only nationally

recognized professional credit management body solely dedicated to the
development of skills and capacity building of people involved in credit
management across sectors of the economy. The provision of credit management
academic and professional certification programmes and award of specialist
certifications in credit management are core activities of the Institute.
Pharmacist Council of Nigeria.

FUNCTION

1. To advice on Labour conditions relating to Pharmacists

2. To collate and disseminate statistical, scientific and other information relating to

Pharmacy
and publish such in an Official Journal

3. The Council is statutorily responsible for regulating and controlling pharmacy

education, training and practice in all aspects and ramifications. The Federal
Ministry of Health is charged with the responsibility of supervising the
Pharmacists Council of Nigeria (PCN).

Nigerian Institute of Public Relations.

FUNCTION

1. To represent and serve the professional interests of our members. 2. To provide

opportunities for members to meet and exchange views and ideas.

3. To raise standards within the profession through the promotion of best practice -
including the production of best practice guides, case studies, training events and
our continuous professional development scheme 'Developing Excellence'.

Chartered Institute of Taxation of Nigeria.

FUNCTION

1. To raise, maintain and regulate the standard of taxation practice amongst its
members.
2. To promote professional ethics and efficiency in tax administration and practice.

3. To encourage, promote and co-ordinate research for the advancement of taxation

practice

and administration in Nigeria.

Nigerian Institute of Industrial Management

FUNCTION

1. To collect and disseminate information on management subjects.

2. To provide such facilities as may be required by those aspiring to or studying for

professional examination in management studies.
Product Meaning - A product is the item offered for sale. A product can be a
service or an item. It can be physical or in virtual or cyber form. Every product is
made at a cost and each is sold at a price. The price that can be charged depends on
the market, the quality, the marketing and the segment that is targeted.

Types of Products- What is Product Type? Product type is a group of products

which fulfill a similar need for a market segment or market as a whole. Product
type can also be defined as set of common specific characteristics in products or
goods.

Some of the types of product are: 1. Durable Products 2. Non-Durable Goods 3.

Consumer Products 4. Industrial Products 5. Goods, Services and Experiences 6.
Convenience, Shopping, and Specialty Goods 7. Industrial Goods and Consumer
Goods 8. Unsought Goods 9. Primary Goods 10. Semi-Manufactured Goods 11.
Natural Goods 12. Agricultural Goods 13. Manufactured Goods
Levels of product- A particular product has 5 levels (core benefit, generic product,
expected level, augmented product, potential product). When a buyer buys a
product, he buys a package, not only the tangible product. With a soap, you
purchase, for example, the soap itself, an image, and a number of interrelated
satisfactions.

Product life-cycle- Product life cycles are used by management and marketing
professionals to help determine advertising schedules, price points, expansion to
new product markets, packaging redesigns, and more. They can also help
determine when newer products are ready to push older ones from the market.
These strategic methods of supporting a product are known as product life cycle
management.

Product Development - is also called new product management, is a series of steps

that includes the conceptualization, design, development and marketing of newly
created or newly rebranded goods or services. The objective of product
development is to cultivate, maintain and increase a company's market share by
satisfying a consumer demand.

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