Week 6: Profitability or Growth
Profitability is inevitably vital to the life of a
corporation, but development is essential to long-term
survival.
net profit of a corporation is the income after deducting
all the expenditures related to the manufacture,
distribution, and selling of the goods.
1. Profitability
Profit is "money in the bank." This goes directly to a
company's owners or shareholders, or is reinvested in
the business. Profit is the primary aim for any company,
and for a company that doesn't have investors or
funding at first, profit may be the sole resource of the
business.
income statement demonstrates not just the
performance of a company but also its costs and
expenditures for a given period, usually over a year.
The income statement is important to calculate
profitability in order to build a profitability ratio. One
can measure several different profitability ratios from
which to assess the financial position of a business.
2. Growth
It is important to assess and concentrate a company's
productivity at the beginning, or start-up. At the other
hand, demand and revenue growth is the way to
attain the initial profitability. Growth is basically an
expansion for a company, making the business larger,
growing its demand, and eventually making it more
successful. It is possible to calculate growth by looking
at certain specific figures, such as total revenue,
number of employees, market share and turnover.
3. The Bottom Line
When it comes to market success, productivity and
development all go together. Income as a corporate
organization is vital to basic financial survival while
growth is vital to income and long-term success.
Investors should consider any factor that relates to a
company.
THE FOUR NEEDS OF A CONSUMER
The aim of any business should be to have loyal
trustworthy customers who continually use your
product or service.
The four crucial things customer needs are:
•Fair price •Good service
•Good product •Feel valued
Week 7: UNDERSTANDING THE MARKET
1. What is a Market?
 A environment in which two or more parties
participate in the exchange of goods,
services, and information is called a market.
Ideally a market is a place where two or
more people are interested in the buying and
selling.
 The two parties involved in a transaction are
called seller and buyer.
 In return for money the seller sells goods and
services to the buyer. In the market to be
competitive, there needs to be more than one
buyer and seller.
2. What is Segmentation?
 Segmentation refers to a process of bifurcating
or dividing a large unit into various small units
which have similar or related characteristics
.
Market Segmentation
 Market segmentation is a marketing term
dividing the entire market into smaller subsets
of customers with specific tastes, demands and
expectations.
 A market segment is a small unit composed of
likeminded individuals within a large market.
 One segment of the industry is absolutely
different from the other
 A market segment includes individuals with
common preferences and thinking along the
same lines
 Individuals from the same group react in a
manner similar to market fluctuations.
Basis of Market Segmentation Gender
 Marketers are separating the market into
smaller, gender-based divisions. Men and
women have different desires and expectations,
and thus require segmentation.
 Companies need different marketing
approaches for men which obviously will not
work for women.
 A woman does not buy a product intended for
men and vice versa.
 Gender segmentation is significant in many
industries such as cosmetics, clothing, jewelry.
Age Group Division
 based on age group of the target audience
is also one of the ways of market
segmentation.
Income Marketers
 divide the consumers into small segments as
per their income. Individuals are classified into
segments according to their monthly earnings.
The three categories are:
 High income Group
 Mid Income Group
 Low Income Group
2. Types of Market Segmentation
 Psychographic segmentation
Individual behaviors are the basis for such
segmentation. The attitude, interest, and value of the
individual enables marketers identify them into small
groups.
Behavioral Segmentation
 Consumers' loyalties to a brand help
advertisers divide them into smaller groups,
each category consisting of individuals loyal to a
brand
Geographic Segmentation
 Geographic segmentation refers to the
classification of market into various
geographical areas. A marketer can‘t has similar
strategies for individuals living at different
places.
Week 8: CONCEPT AND COMPONENTS OF
MARKETING MIX
These are to be combined or mixed in an
appropriate proportion to achieve the marketing
goal. Such mix of product, price, distribution, and
promotional efforts is known as ‘Marketing Mix’.”
According to Philip Kotler “Marketing Mix is the set
of controllable variables that the firm can use to
influence the buyer’s response”. “The
controllable variables in this context refer to
the 4 ‘P’s [product, price, place (distribution)
and promotion].
“The marketing mix definition is simple. It is
about putting the right product or a
combination thereof in the place, at the right time,
and at the right price.”
1. Product
Product refers to the goods and services
offered by the organization. Product can
also take the form of a service like an air
travel, telecommunication, etc. Thus, the
term product refers to goods and services
offered by the organization for sale.”
PRODUCT CLASSIFICATION
Product can be broadly classified
based on (1) use,
(2) durability, and
(3) tangibility.
1. Based on use, the product can be
classified as:
(a) Consumer Goods; and
(b) Industrial Goods.
(a )Consumer goods “Goods meant
for personal consumption by the
households or ultimate consumers
are called consumer goods. This
includes items like toiletries,
groceries, clothes etc. Based on
consumers’ buying behavior the
consumer goods can be further
classified as:”
(i) Convenience Goods;
bought frequently without
much planning or shopping
effort and are also consumed
quickly.
(ii) Shopping Goods; and
These are goods which are
purchased less frequently
and are used very slowly like
clothes, shoes, household
appliances.

(iii) Specialty Goods.
special characteristics of
certain categories of goods
people generally put special
efforts to buy them. They are
ready to buy these goods at
prices at which they are
offered and put in extra
time to locate the seller to
make the
purchase.
(b) Industrial Goods “Goods intended for
consumption or use as inputs in the
manufacture of other products or the
supply of some service are called 'industrial
goods. These are meant for non-personal
and commercial use and include (i) raw
materials, (ii) machinery, (iii) components,
and (iv) operating supplies (such as
lubricants, stationery etc.).
2. Based on Durability, the products can be
classified as:
(a) Durable Goods; and
(b) Non-durable Goods.
(a)Durable Goods: Durable goods are
products which are used for a long
period i.e., for months or years together.
Examples of such goods are refrigerator,
car, washing machine etc. (b)“Non-durable
Goods: “Non-durable goods are products
that are normally consumed in one go or
last for a few uses.” Examples of such
products are soap, salt, pickles, sauce etc.”
3. Based on tangibility, the products can be
classified as:
(a) Tangible Goods; and
(b) Intangible Goods.
2. Price
The price is the amount paid in respect
of a good or service. It is the second
most significant marketing mix item.
PRICING AND FACTORS AFFECTING PRICING
DECISIONS
(a) Cost:
(b) Demand
(c) Competition
(d) Marketing Objectives
(e) Government Regulatation
3. Place
The products are made to sell to customers.
These must be made available to customers
at a location where they can make
transactions conveniently.
CHANNELS OF DISTRIBUTION
The path or route adopted by him for the
purpose is known as channel of
distribution.
A channel of distribution thus, refers to
the pathway used by the manufacturer
for transfer of the ownership of goods and
its physical transfer to the consumers and
the user/buyers (industrial buyers).” Kotler,
(2010).
Primarily a channel of distribution performs the
following functions:
(a) It helps in establishing a regular contact
with the customers and provides them the
necessary information relating to the goods.
(b) It provides the facility for inspection of
goods by the consumers at convenient
points to make their choice.
(c) It facilitates the transfer of ownership as
well as the delivery of goods.
(d) It helps in financing by giving credit
facility.
(e) It assists the provision of after sales
services, if necessary.
(f) It assumes all risks connected with the
carrying out the distribution function.
TYPES OF CHANNELS OF DISTRIBUTION
According to Philip Kotler (2010), the
various channels used for distribution of
consumer goods can be described as
follows:
 a) Zero stage channel of distribution
“Zero stage distribution channel
exists where there is direct sale of
goods by the producer to the
consumer.
b) One stage channel of distribution
Kotler (2010) “In this case, there is
one middleman i.e., the retailer. The
manufacturers sell their goods to
retailers who in turn sell it to the
consumers.
c) Two stage channel of distribution
“This is the most used channel of
distribution for the sale of consumer
goods. In this case, there are two
middlemen used, namely,
wholesaler and retailer. This is
applicable to products where
markets are spread over a large
area, value of individual purchase
is small, and the frequency of
purchase is high” Kotler, (2010).
d) Three stage channel of distribution
“When the number of wholesalers
used is large and they are
scattered throughout the country,
the manufacturers often use the
services of mercantile agents who
act as a link between the producer
and the wholesaler. They are also
known as distributors” Kotler,
(2010).
FACTORS AFFECTING THE CHOICE OF
DISTRIBUTION CHANNEL
 Nature of Market:
 Nature of Product
 Nature of the Company
 Middlemen Consideration
4. Promotion:
It stimulates the interest of potential
buyers in the product, compares it with
the product of the competitors and makes
its decision. Promotion refers to the process
of informing and persuading the consumers
to buy certain product. By using this
process, the marketeers convey persuasive
message and information to its potential
customers.
The main objective of promotion is to seek
buyers’ attention towards the product with
a view to:
– arouse his interest in the product;
– inform him about its availability; and
– inform him as to how is it different from
others.
It is thus a persuasive communication and
serves as a reminder. A firm uses different
tools for its promotional activities which are
as follows:
– Advertising
– Publicity
– Personal selling
– Sales promotion
1. Advertising: Advertising is the most
used tool for informing the present
and prospective consumers about the
product, its quality, features,
availability, etc. It is a paid form of
non-personal communication through
different media about a product,
idea, a service or an organization by
an identified sponsor.
2. Publicity: This is a non-paid process of
generating wide range of
communication to contribute a
favorable attitude towards the product
and the organization. You may have
seen articles in newspapers about an
organization, its products, and policies.
3. Personal selling: You would have
encountered representatives of
numerous firms knocking at your
doorstep and persuading you to
purchase their product. It is a direct
presentation to consumers or
prospective purchasers of the
product.
4. Sales promotion: It applies to short-
term and temporary opportunities to
purchase new products or to promote
trials. The tool includes competitions,
 games, gifts, trade shows, discounts,
and so on.
The 3 further Ps of marketing
1. People
The team involved in the delivery of the
project should possess the skills and
qualities needed to ensure its success
(barring unforeseen mishaps).
This is perhaps especially true of
customer-facing staff, whose
communication and behavior will greatly
impact the audience’s perception of the
brand.
The Importance of People within the Marketing
Mix
 People Who Make the Products
 People Who Bring the Products to the
Customers
 People Who Talk to the Customers
2. Processes
The processes involved in a product’s
delivery will significantly affect the
customer’s experience, level of
satisfaction, and lifetime value to your
business. These processes may include
(and are not limited to):•Website user
experience
•Delivery time
•Delivery methods and service •In-store
wait time
•Communicating with customer support
•Aftercare
They will need to provide protocols when
something goes wrong as well as
procedures used to deliver a product or
service – for example, the provision of
sufficient compensatory fees to
consumers that have negative experiences.
3. Physical evidence
The final P refers to the physical context
and paraphernalia (such as receipts, “thanks
for ordering” cards, confirmation emails and
PDF invoices) that come along with the
product. In order
to reinforce the product’s and the seller’s
credibility, these components should exhibit
the qualities customers expect of them,
based on up-todate industry standards.
Week 10: 4M’s of Business operation
1. Manpower Human Resource
(Manpower) refers to the overall
aspect of planning and organizing the
personnel who will fill-in the key-
functions of business operations.
 Hire the right people.
 Assign responsibilities
 Ensure work safety.
 Staff rotation.
2. Method Methods are ways of doing
things in a certain workplace.
3. Machine Machines are known to be
automated devices that results to
attaining efficient, and better
results/multi-tasking. These are
devices that make mechanical work
easier.
4. Materials Materials are used in the
primary production or manufacturing of
goods and is very important in the
business operation. For the big
companies especially, which sell high
priced products, they always look for
high quality raw materials. Companies
which care about uniformity and
consistency of their products, product
output are always being looked at and
carefully decide what specific material
to use and ratings of the product, where
to buy, and even specific suppliers.