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MARKETING PRESENTAT

PROFESSIONAL CERTIFICATE IN MARKET

VERVIEWING THE MARKETING PROCESS: MARKETING AS AN EXCHANGE PROCES

Consumer
Individua

Costs and benefits

Organization

Slake thirst
Insurance premiums

Medical treatment

Private hospital

Patient
Student
Volunteer
Voter

University

Non-profit
Youth group

Time
Sense of community service

Political party

Vote
Sense of economic/social progress

Public library

Taxes
A good read
ated
Cre
by

Reader
1

Fees
Education

Jude Asongwe

http://www.valuebasedmanagement.net/

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ated
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MARKETING PRESENTATION
FOR
PROFESSIONAL CERTIFICATE IN MARKETING

Consumer buying decision making process and its influencing factors:


y

Individual
influences
Personality
Perception
Motivation
Attitude.

Decision-making process
Problem
recognition
Information search

Jude Asongwe

Situational
influences
Sociocultural
Technological
Economic/compe
titive
Political/legal

Information
evaluation/evaluation of
alternatives

Group
influences
Social class
Culture/subcu
lture
Reference
groups
family

Purchase decision

Post-purchase evaluation

Marketing mix
Product
Price
Place
promotion

Summary:
PROFESSIONAL
CERTIFICATE IN MARKETING IS DIVIDED IN TO FOUR PARTS:

Part A: Marketing Fundamentals


Part B: Marketing Environment
Part C: Marketing in Practice
Part D: Customer Communication.

DISTRIBUTION CHANNEL IN CONSUMER MAREKT


Producer

Consumer

Producer
Producer
Producer

Retailer
Wholesaler

Consumer

Retailer

Wholesaler

Agent

Producer

Producer

Retailer

Consumer

Business Customer

Producer
Producer

Consumer

Business distributor
Sales branch
Sales branch

Business Customer
Business customer

Business distributor

Business customer

DISTRIBUTION CHANNEL IN ORGANISATIONAL MARKET

The

CONTENTS of PART A:
Marketing Fundamentals

development of marketing and marketing orientation

Marketing
The

planning and budgeting

marketing mix: Product

The

marketing mix: new product development and portfolio


management
The marketing mix: price
The

b
ated
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marketing mix: place


The marketing mix: promotion
The marketing mix: People (service and customer care).
Marketing in context
Marketing Fundamentals

Source: CIM course book

Jude Asongwe

MARKETING FUNDAMENTALS: LEARNING


OBJECTIVES
By the end of this module you should be able to:
Understand the development of marketing and its changing
role within a variety of organizations
Understand the various tools of the marketer and evaluate
their strengths and weaknesses
Recognise the impact achievable through modifying the
marketing mix for (re)positioning the product and service
offerings
Understand the importance of planning in the management of
the marketing activity
Develop an awareness and understanding of thetechnological
advances in marketing and the impact of information
technology on the marketing mix decisions
Understand the importance of customers and their behaviour
relating to marketing decisions
6

Marketing Fundamentals-

The development of marketing and marketing


orientation.

What is marketing?

The marketing concept: marketing orientation.

Factors contributing to the need to be marketing oriented

Marketing as a form of competition: creating customer value

Building a marketing culture

Difficulties in managing the introduction of a customer-oriented culture


Market segmentation

The tools of marketing management: the marketing mix

Overviewing the marketing process: marketing as an exchange process.

The changing role of marketing

Marketing Fundamentals

Source: CIM course book

Marketing Fundamentals

What is Marketing?

Marketing is the management process which


identifies, anticipates and satisfies customer
requirements efficiently and profitably. (CIM
definition)

Consists of individual and organizational activities


that facilitate and expedite satisfying exchange
relationships in a dynamic environment through the
creation, distribution, promotion and pricing of
goods, services and ideas ( by Dibb, 2000)
b
ated
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Marketing Fundamentals.

Source: CIM course book

Jude Asongwe

rketing Fundamentals

Marketing means working with markets to bring about


exchanges for the purpose of satisfying human needs
and wants. It is a process by which individuals and
groups obtain what they need and want creating and
exchanging products and value with others. (Kotler,
2000).

Marketing Fundamentals

b
ated
Cre
y

Source: CIM course book

Jude Asongwe

THE MARKETING
CONCEPT ( MARKETING
ORIENTATION).1960s-today
Marketing Fundamentals-

1.
2.

The marketing concept focuses on customers.


A company that adopts the marketing concepts
does the following
Puts customers at the centre of all business
decision-making and planning
Marketing research to better satisfy customers.

Marketing Fundamentals

10

Source: CIM course book

Marketing Fundamentals

: Other forms of

orientation.

Production-orientation(1900-1930s)
Product-orientation
Sales-orientation(1930s-1960s)

Marketing Fundamentals

11

Source: CIM course book

Marketing Fundamentals The

Production Orientation or

concept

The production concept concentrates on production


and distribution economies.

This is based on the notion that customers will choose


lower priced products that are readily available.

Marketing Fundamentals

12

Source: CIM course book

Marketing Fundamentals-

Marketing OrientationPRODUCT ORIENTATION

Marketing Fundamentals

13

Source: CIM course book

Marketing
Fundame
ntals: The
orientatio
sales (sel
n.
ling) c

14

oncept or

This is of course based on the notion that


customers need to be persuaded to buy
through aggressive selling and promotion.

Marketing Fundamentals

Source: CIM course book

MARKETING HISTORY AND BUSINESS


ORIENTATIONS - SUMMARY

15

Marketing fundamentals: Factors

underpinning
the need to be market oriented.
Demand
Average disposable income
General level of education
Mass media/ access to information
Supply/industry capacity
Competition
Broad political, economic,
social,technological, ecological and legal
factors (PESTEL) factors.
Marketing Fundamentals
16

Source: CIM course book

Marketing as a form of competition:


reating customer value

arketing Fundamentals- :

Marketers are recognizing that it is important to be


competitor as well as customer oriented.
The achievement of organisational and marketing
objectives rests on whether the company can beat the
competition
Provision of value to customers is important
Marketing research will help better satisfy customers
Good customer service and customer care
Market intelligence about competitors.
Reliability of service, speedier delivery, low prices, high
quality; can create superior customer value.
Superior customer value should reflect customers needs.
Source:

17Marketing Fundamentals

Source: CIM course book

Marketing fundamentals-

Building a marketing culture

Thinking about customers through how we view and


define the business is the first step in developing a
marketing culture.
Thinking about customers must permeate all functions
and levels of the organization and not just the
marketing function or even senior management.
Communication among managers and employees
from different function is important
Marketing Research and market intelligence.
Co-ordination between functions based on customer
needs.
Marketing planning
Company-wide communication on customer needs.
Right attitudes, practices throughout the company.
Source: CIM course book

18

ASSESSING THE EXTENT OF


THE MARKETING CULTURE:
Marketing Fundamentals-

An Assessment of the following issues are concerned in order to know the extend to which businesses have been successful or unsuccessful in marketing orientation

1.
2.
3.
4.
5.
6.
7.
8.
9.

Management
Employees
Products
Services
Competitors
Prices
Distribution of products
Market
Strategies

Marketing Fundamentals

19

Source: CIM course book

Marketing Fundamentals- DIFFICULTIES

IN
MANAGING THE INTRODUCTION OF A
CUSTOMER-ORIENTED CULTURE:

Managers fail to realize or understand the true concept of


market orientation.
Resistance to change
Power struggle between departments.
Separation of the responsibility for marketing strategy and
implementation.
Lack of co-ordination
Lack of technology/inability to use latest technology.
Poor planning
Influence of macro factors (PESTEL Analysis)
Influence of micro factors: Employees, management, suppliers,
distributors, media and competitors.
Inadequate finance
No strategic direction

Marketing Fundamentals

20

Source: CIM course book

Marketing fundamentals

MARKETING AS A MANAGEMENT

FUNCTION:

1.
2.
3.
4.
5.

21

Marketing is the function of management.


Management has to control, co-ordinate, plan, motivate, analyze and
organize marketing activities:
The marketing manager has to perform the following:
Marketing / market research
Planning
Environmental analysis
Market segmentation, targeting and positioning.
Marketing mix implementation
Marketing is not only the function of the marketing manager.
Marketing should be part and parcel of each and every department of
the company.
The various departments such as Human Resource, Production,
Logistics, Finance, Stock and Technical departments have to corporate
with the marketing department

Marketing Fundamentals

Source: CIM course book

Marketing fundamentals

MARKET

SEGMENTATION
Learning objectives
1.
2.
3.
4.

To understand what is market segmentation


To examine the reasons for segmenting the
market
To examine the bases for segmenting the
market.
To examine the importance of segmenting the
market.

Marketing Fundamentals

Source: CIM course book


22

Marketing Fundamentals -

MARKET SEGMENTATION

Definition
What is market segmentation?
Market segmentation is the process of identifying and
classifying customers according to their different needs
and
wants.

Marketing Fundamentals
23
Source: CIM course book

MARKET
SEGMENTATION. Definition continues
Marketing Fundamentals-

It is the division of market in to groups of customers


and using the marketing mix to target customers in
these groups.
It is the splitting up of customers in to segments and
using the marketing mix to target customers.

Marketing Fundamentals

24
Source:
CIM course book

Marketing fundamentals- MARKET SEGMENTATION

REASONS FOR SEGMENTING THE MARKET

1.
2.
3.
4.
5.
6.
7.
8.

Because of differences that exist among


customers with regards to the following:
Age
Psychology
Sex
Life cycle
Marital status
Life style.
Behaviour
Inadequate finance.
Location
Income
Culture
Social status

Marketing Fundamentals

25

Source: CIM course

Marketing fundamentalsMARKET SEGMENTATION

THE CRITERIA FOR SEGMENTING THE MARKET

Identifiable
Profitable
Recognisable
Accessible
Actionable
Stable (reliable)
Substantial
Measurable
Affordable
Marketing Fundamentals

26

Source: CIM course book

Marketing fundamentals- MARKET SEGMENTATION

BASES FOR SEGMENTING THE MARKET IN


CONSUMER MARKET

Demographic: age,gender,income,occupation, marital


status and Life cycle
Geographic: regions, counties, nations, cities, town, villages
and continents.
Geo-demographic: Segmentation according to geography
and demography. This is used by ACORN: The post office
also uses this.
Psychographic: social class and perception of customers.
Behaviour: User status, usage rate, usage occasion, loyalty
status and purchase rate.

Marketing Fundamentals

Source: CIM course book

27

M1

M2

M3
Targeting
M1

P1
Single segment
target

P2
P3
P1

M1

M2

M1 M2
P1
P2
P3
28

P1
P2
Product specialisation

Multi-segment
target

P3

M3

P3

M3

P2

M2

M1

M2

M3

P1
P2

M3

P3
Market
Specialisation
M=Market and P= Product

Full market coverage

Strategy
Segment 1
MARKETING MIX
Concentrated strategy/marketing

MARKETING MIX 1

Segment 2
Segment 3
Segment 1

MARKETING MIX 2

Segment 2

MARKETING MIX 3

Segment 3

Differentiated strategy/marketing
MARKETING MIX
29

Whole
market

POSITIONING
Positioning means designing a product to occupy a distinct

and valued place in the minds of customers.


Companies can position the market in terms of price,
product, quality, brands, promotion, and customer service.
The essence of positioning is to enable the company to have
more competitive advantage over its competitors.
When positioning, the company should identity customers
needs, produce the product targeted at customers.
The product packaging, labelling, styling, branding,
designing, pricing, promotion and distribution should
seriously be analysed.
A good marketing programme such as marketing research,
Marketing mix, segmentation, targeting, new product
development and market expansion will boost the companys
competitive advantage.

30

POSITIONING
Companies need to find out what position they
are
in, in relation to their competitors.
Am I a market leader or a market follower? This is
a question that should be asked by organisations.
Marketing planning, and marketing
strategies should be implemented to enable
the company to have competitive
advantage.

31

POSITIONING

KEYS TO SUCCESSFUL POSITIONING


Consistency
Clarity

Successful positioning
Credibilit
y

Compet
itivenes
s

Source: Principles and practice of marketing- 2nd edition by David Jobber

ated
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32

Jude Asongwe

POSITIONING

.
.
..
.

POSITIONING MAP OF SUPERMARKETS:


A

High price

C
D
Wide product range

Low price

. ..
G

A PERCEPTUAL MAP OF SUPERMARKETS


Source: Principles and practice of marketing- 2 nd edition by David Jobber

33

F
E

Narrow
product range

BUSINESS TO BUSINESS BUYING


BEHAVIOUR:
Otherwise known as industrial or organisational buyer
behaviour:

Business to business transaction is when


one business transact business with another.

Certain factors influence business to business buyer


behaviour.
1.
Marketing mix: price,product, place , promotion
2.
Environmental influences
3.
Organisational factors
4.
Group influences: reference groups e.g decision
making unit such as users, influencers, deciders,
approvers, gate keepers and buyers.
34

Business
Example of a shoe manufacturer
Hides and skin
producer

Leather
producer

to Business Marketing Business to business buyer

distributor

Shoe
manufacturer

behaviour
Agent

Wholesaler

Retailer

Consumers

Example of cloths manufacturer


Cotton
producer

Distributors

Textile
Industry/manufac
turer

Agents

Producer

Agent

Wholesalers

Retailers

Consumers

Example of biscuit manufacturer


Sugar/flour
Banana p

Distributor

Wholesaler

Retailer

Consumers

Example of bread manufacturer


Flour producer

Distributor

Producer

Agent

Wholesaler

Wholesaler

Retailer

Retailer

Consumer

Example of car manufacturer


Iron and steel
Tyre producers

Distributor

Car producer

Example of aircraft manufacturer


Accessories
producer

35

Aircraft
producer e.g
Boeing

Wholesaler

Consumer

Consumers

STRATEGIC MANAGEMENT
Strategic analysis

Strategic
Choice

36

Strategy implementation

A basic model of strategic management process


Source: Exploring Corporate Strategy by Gerry Johnson
Kevan Scholes

STRATEGIC MANAGEMENT
Culture and
stakeholder
expectation

The
environ
ment

Resources
And strategic
capabilities

Strategi
c
analysis

Identifying
Strategic
options

Strategi
c choice

Evaluating
options
Selecting
strategy

37

Strategy
implemen
tation

Managing
Strategic
change

Planning
And
allocating
resources

Organisati
on
structure
and design

CORPORATE SOCIAL RESPONSIBILITY

This is the responsibility that corporate businesses have on the environment. They are
supposed
to produce goods and services under social and environmentally friendly conditions:
CORPORATE SOCIAL RESPONSIBILITY TOUCHES THE FOLLOWING AREAS:
1.
Employees
Suppliers
Retailer
Distributors
2.
Customers
Government
Shareholders
Competitors
3.
Products
Services
Banks
Media
Green
issues
SOCIALEnvironmental
RESPONSIBILITY
4. CORPORATE
Local community
pollution CAN BE VIEWED

FROM TWO ANGLES:


Internal Aspects: This focus on the companys internal structure
E.g Employees, Shareholders, Management, Products, Services, and
Resources.
External Aspects: This focus on the society : For example Pressure
Groups, local community, government, media, suppliers, distributors
and Retailers

38

SWOT ANALYSIS

STRENGTH

WEAKNESSES

High

profit
Sales
Market share
High product quality
Many product lines
High staff morale
High staff motivation
New technology
High managerial ability
Technical expertise
Machinery
Economies of scale
Good mission statement
Good customer service
New product development

Low

OPPORTUNITIES

THREATS

Market

High

expansion
Reduction of taxes
Deregulation or reduction of legislation
New market (emerging markets)
Good economic conditions
Good social conditions
Stable political, social, economic and ecological environment

39

profit

Sales
Market

share
Low product quality
Limited product lines
Low staff morale
Low staff motivation
Lack of technological development
No technical expertise
Insufficient machinery for production
Diseconomies of scale
Poor mission
Poor customer service

competition
Inflation
Legislation
High taxes
Natural disasters e.g Hurricanes, Tsunami, Flood,
Landslide, Earthquakes and Tornadoes
Political instability: wars
High unemployment
High interest rates

THE TOOLS OF MARKETING


MANAGEMENT: THE MARKETING MIX
Marketing fundamentals-

What is the marketing mix


The components of the marketing mix.

Marketing Fundamentals

40 Source: CIM course book

Marketing fundamentals
The tools of the marketing management:

THE MARKETING MIX - definition

It is the strategic blending of product,


price, place, promotion, people, physical
evidence and processes in order to
achieve marketing objectives
It is a combination of 7ps which marketers
use in order to satisfy the market.

Marketing Fundamentals

41 Source: CIM course book

Marketing fundamentals
The tools of the marketing management:

THE MARKETING MIX definition


Continues

Marketing mix is the tactical toolkit of the


7ps ; namely product, price , place,
promotion, people, physical evidence
and processes.

42Source: CIM course book

THE MARKETING MIX - PRODUCT


We will examine the following issues under product:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.

43

Product Definition
Product Classification
Various levels of a product
The Product Mix
The Product Life cycle
Product Packaging
Product Labeling
Product quality
Product lines
Branding
The product adoption process
New Product Development Process
The importance of New Product Development
Portfolio Analysis
Product Pricing
Product Placing
Promotion of product.

THE MARKETING MIX - PRODUCT


PRODUCT CLASSIFICATION:
Consumer Products
1.
Shopping goods: e.g. television, cloths, shoes,
watch & cameras
2.
Unsought goods: e.g life assurance, grave
stones,grave yard,
3.
Convenience goods
4.
Speciality goods
Producer products
1.
2.
3.

44

Materials and parts


Machinery
Services

THE MARKETING MIX - PRODUCT


THE VARIOUS LEVELS OF A PRODUCT:
Potential product
Augmented product
Expected product
Actual/Basic product

Core product

45

Firm infrastructure
Technology development
Human resource management
Procurement

Inbound
Logistics

46

Operations

Outbound
Logistics

Marketing
and sales

Service

46

McKinseys Seven Ss
model
The 7-S Framework of McKinsey is a management model that describes
7 factors to organize a company in an holistic and effective way.
Together these factors determine the way in which a corporation
operates.
Managers should take into account all seven of these factors, to be sure
of successful implementation of a strategy. Large or small.
They're all interdependent, so if you fail to pay proper attention to one
of them, this may effect all others as well. On top of that, the relative
importance of each factor may vary over time.
47

Origin of the 7-S Framework. History


The 7-S Framework was first mentioned in "The Art Of Japanese Management" by
Richard Pascal and Anthony Athos in 1981. They had been investigating how
Japanese industry had been so Successful.
At around the same time that Tom Peters and Robert Waterman were exploring
what
made a company excellent. The Seven S model was
born at a meeting of these four authors in 1978.
It appeared also in "In Search of Excellence" by Peters and Waterman,and was
taken
up as a basic tool by the global management consultancy company McKinsey.
Since
then it is known as their 7-S
model.
48

McKinseys Seven Ss model


Structure

Skills

Systems

Share values

Style

Strategy

Staff

Shared Values (also called Superordinate Goals). The interconnecting center of McKinsey's model is: Shared Values.
What does the organization stands for and what it believes in. Central beliefs and attitudes. Compare: Strategic Intent
Strategy
Plans for the allocation of a firms scarce resources, over time, to reach identified goals. Environment, competition,
customers.
Structure
The way in which the organization's units relate to each other: centralized, functional divisions (top-down); decentralized;
a matrix, a network, a holding, etc.

49

McKinseys Seven Ss model


System
The procedures, processes and routines that characterize how the work should
be done:
financial systems; recruiting, promotion and performance appraisal systems;
information systems.
Staff
Numbers and types of personnel within the organization.
Style
Cultural style of the organization and how key managers behave in achieving
the
organization's goals. Compare: Management Styles.
Skill
Distinctive capabilities of personnel or of the organization as a whole.
Compare: Core Competences.
50

McKinseys Seven Ss model


Strengths of the 7-S Model. Benefits
Diagnostic tool for understanding organizations that
are ineffective.
Guides organizational change.
Combines rational and hard elements with emotional
and soft elements.
Managers must act on all Ss in parallel and all Ss are
interrelated.

51

Barriers to Implementation
INTERNAL
Management culture
Leadership skills
Organisational structure
Resources
Attitude to planning
Measurement procedures
Communications
EXTERNAL
Political intervention
Competition
Distributors
Suppliers
Customers
Economic conditions
Change in technology

52

Gilligan and Fifield

Implementation Variables
Senior management involvement

Staff involvement

Successful
implementation will
occur

Staff will struggle


Implementation will be
impeded

Staff are likely to resist Plan resist in all ways


the plan. Implementation Implementation stage
will be impeded
unlikely to succeed.

53

STAKEHOLDERS
Employees
Present and
prospective
competitors

Local
community

Suppliers

The Firms
Stakeholder

Distributors

Management

Shareholders

54

Media

STAKEHOLD
VALUE VALUES
STAKEHOLDER
STAKEHOLDER
AND EXPECTATIONS
ES
EXPECTATION

EXPECTATION FROM
ORGANISATION

Consumers

Purchase

goods
and services thus
raising revenue for
organisations.

Fair

prices
Safe and healthy products
Environmentally friendly products
High quality products
Good customer service and care.

Payment

Employees

They

Good

Commitment

help produce
goods and services.

Management

They

Suppliers

They

Distributors

They

55

help plan,
organise, direct,
control, motivate
and train staff.
supply
logistics needed for
production.
distribute the
products to the
market.

working conditions
Fair wage for a days job/month
Motivation bonuses, allowances,
holidays, promotion, ego and self
actualisation needs.
Equal opportunity in employment,
training and development.
Training and development
Industrial democracy
Empowerment and delegation
Freedom of speech/free flow
communication

for goods and services


Good behaviour from customers
Respect purchasing policies.

from staff
strike action
No absenteeism
Total participation
Respect companys policies
Good morale
No

STAKEHOLDERS
STAKEHOLD
ES

VALUE

Financial
institutions

Provides

Government

Provides

Local community

Purchase

STAKEHOLDER
EXPECTATION

financial products e.g loans,


overdraft and advice.
public and merit goods.
Help investors morally and financially.
organisational products.

Pressure group
Shareholders

Provide

Retailers/wholes
alers/agents

Facilitate

Competitors

Compete

56

shares (business finance)


Put pressure on companies to produce
products under social and environmentally
friendly conditions.
the distribution
Acts as an important link in business supply
chain.
with firms thus making companies
to offer even better services and goods.

EXPECTATION
FROM
ORGANISATION

STAKEHOLDERS

Stakeholders can be divided into three categories


1.

2.

3.

57

Internal Stakeholders: Employees,


Management, shareholders and BOD.
Market place stakeholders: Customers, banks,
media, suppliers, distributors, agents, retailers
and wholesalers and competitors.
External Stakeholders: Government, pressure
groups and the local community

The New Product Development Process


Idea generation
Idea screening
Concept development and testing
Outlining Marketing strategies
Business Analysis
Product development
Test marketing
Commercialisation
Monitoring

Controlling

58

CHARCTERISTICS
PRODUCT INTRODUCTION
LIFE CYCLE

GROWTH
CHARACTERISTICS

MATURITY

DECLINE

Sales

Low

Increasing

Slowing

Declining

Profits

Loss

Peaking

Declining

Low to Zero

Cash flow

Negative

Moderate

High

Low

Customers

Innovative

Mass Market

Mass Market

Laggards

Strategic focus

Expanding market

Market penetration

Defensive
marketing

Productivity

Marketing
expenditur
e

High

High-declining

Falling

Low

Product plan

Market to
innovators, early
adopters; high
product failure
rate; basicdeveloping

Expand for early


and late majority;
less product
distinctiveness;
improve models.

Widen product
lines, rationalize
brand; less
competition;
differentiate.

Niche marketing;
reinforce brand
loyalty; rationalize

Competitor
reaction

No reaction

Maximum new
entrants - high

Marginal
competitors exit

Competition
declines

Pricing plan

High skimming

Differentiated for Lowest each segment


competitive

Price cutting
rises for niches

Distribution plan

Unstable pattern
widen
channels, seize
shelf space.

Increasing
pattern
competitor
activity

Segmented,
fragmented and
localized.

59

Control passing
to fewer firms

COMPETITION
LAYERS OF COMPETITION
Tertiary competitors
Secondary competitors
Immediate
competitors
Technically similar
products

60 Source: Principles and practice of marketing by David Jobber

MICHAEL PORTERS FIVE FORCE


ANALYSIS OF THE COMPETITIVE
STRUCTURE
Potential entrants
Threat of
entrants

Bargaining
Suppliers
Power

Competitive
Rivalry

Bargaining
Buyers
Power

Threat of
substitutes

Substitutes

61

Source: Exploring Corporate Strategy by Garry Johnson and Kevan Scholes


Adapted from M. Porter, Competitive Strategy, Free Press,
1980, p. 4.

THE IMPORTANCE OF THE


PRODUCT LIFECYCLE:

The product life cycle is important in planning


and control
Strategic formulation, implementation and
analysis
Advertising strategy
Product management
Targeting and positioning

62

PORTFOLIO ANALYSIS
Business Portfolio: The collection of businesses and products
that make up the company.
Portfolio analysis: A tool by which management
identifies and evaluates the various businesses that
make up the company
Strategic business unit (SBU): A unit of the company that has
a separate mission and objectives and that can be planned
independently from other company businesses. A SBU can be
a company division, a product line within a division, or
sometimes a single product or brand.
63

PORTFOLIO
ANALYSIS GROUP MATRIX
BOSTON CONSULTING

Market growth

High 20

Low
64

Framework of the BCG Matrix

10

0
10x

1x
Market share

0.1x

Stars

PORTFOLIO ANALYSIS

High growth
High market share (High-share businesses)
Products often require heavy investment to finance their rapid growth
High profit and high sales

Cash cows
Low-growth
High-share businesses or products
Established and successful units that generate cash that the company uses
to pay its bills and support other business units that need investment
Profit and sales are high but later decline because of competition
Question marks
Low-share business units in high-growth markets
Low profits and sales.
Dogs
Low growth
Low market share
Low profit
Low sales

65

BCG MATRIX : BCG CLASSIFICATION OF


PRODUCTS
High 20

Question marks

Market growth

Stars

Low
66

10

Dogs

Cash cows

0
10x

1x

0.1x

BCG MATRIX- CASH POSITION FOR


PRODUCTS
Stars

Question marks

Revenue
+++
Investment - - 0

Revenue

Cash cows

Dogs

Revenue + + +
Investment
++

Revenue +
Investment
0

67

+ +

Investment - - -

PORTFOLIO STRATEGIES
Build
Hold
Harvest
Divest

68

GENERAL ELECTRIC MATRIX

69

THE GENERAL ELECTRIC


MATRIX BY MCKINSEY

The GE matrix / McKinsey matrix is a model to perform


a business portfolio analysis on the Strategic
Business Units of a corporation.

A business portfolio is the collection of Strategic


Business Units that make up a corporation. The optimal
business portfolio is one that fits perfectly to the
company's strengths and helps to exploit the most
attractive industries or markets. A Strategic Business Unit
(SBU) can either be an entire mid-size company or a
division of a large corporation, that formulates its own
business level strategy and has separate objectives from
the parent company.

70

THE GENERAL ELECTRIC


MATRIX BY MCKINSEY

The aim of a portfolio analysis is to:


1) Analyze its current business portfolio and decide which
SBU's should receive more or less investment, and
2) Develop growth strategies for adding new products
and businesses to the portfolio
3) Decide which businesses or products should no longer
be retained.
The BCG Matrix (Boston Consulting Group Matrix) is the
best-known portfolio planning framework. The GE /
McKinsey Matrix is a later and more advanced form of
the BCG Matrix.

71

THE GENERAL ELECTRIC MATRIX BY


MCKINSEY

Typical (external) factors that affect Market Attractiveness:


- Market size
- Market growth rate
- Market profitability
- Pricing trends
- Competitive intensity / rivalry
- Overall risk of returns in the industry- Entry barriers
- Opportunity to differentiate products and services- Demand variability
- Segmentation
- Distribution structure- Technology development

Typical (internal) factors that affect Competitive Strength of a Strategic Business


Unit:
- Strength of assets and competencies
- Relative brand strength (marketing)
- Market share- Market share growth
- Customer loyalty
- Relative cost position (cost structure compared with competitors)- Relative profit
margins (compared to competitors)
- Distribution strength and production capacity
- Record of technological or other innovation- Quality
- Access to financial and other investment resources- Management strength

72

A six-step approach to implementation of portfolio analysis


(using the GE / McKinsey Matrix) could look like this:
1. Specify drivers of each dimension. The corporation must carefully
determine those factors that are important to its overall strategy
2. Weight drivers. The corporation must assign relative importance
weights to the drivers
3. Score SBU's each driver
4. Multiply weights times scores for each SBU
5. View resulting graph and interpret it
6. Perform a review/sensitivity analysis using adjusted other weights
(there may be no consensus) and scores.

73

74

Some important limitations of the GE


matrix / McKinsey Matrix are:
- Valuation of the realization of the various
factors
- Aggregation of the indicators is difficult
- Core competencies are not represented
- Interactions between Strategic Business
Units are not considered

CHANGES IN PRODUCT/STRATEGIC
BUSINESS POSITION

75

CONCLUSION

76

GENERAL ELECTRIC BUSINESS


SCREEN (GE)

77

PRODUCT LINE
A

Television
Panasonic
Sharp
Sony
LG
Technics
Samsung

Product
Line
length

Laptops
HP
Packard bell
Microsoft
Dell
PC world
Sony

Cars

Mobile

Watches

Jaguar
Mercedes
Rover
Vauxhall
Corolla
Nissan
Audi
Ferrari
Opel
BMW
Honda
Pajero
Toyota
Camri

Nokia
Motorola
Samsung
LG
Siemens
Sargem
Sony E

Rolex
Seiko
Seconda

14

78

Product line width

7
Product
Line
Length

NATONAL INCOME STATISTICS

79

GDP STATISTICS

80

PRICE

PRICING STRATEGIES:
Cost-based pricing or cost-oriented pricing:
a)
Full cost pricing
b)
Direct cost pricing
2. Competitor-based pricing or competitor orientated pricing
a)
Going-rate pricing
b)
Competitive bidding
3. Market-oriented pricing
4. Product line pricing
5. Me too pricing
6. Product bundling pricing
7. Seasonal pricing
8. Psychological pricing
1.

Source: Principles and practice of marketing 2nd Edition by David Jobber

81

PRICE

FACTORS THAT DETERMINE THE PRICE OF PRODUCTS:

MACRO FACTORS
Political
Economic
Social
Technological
Ecological
Legal

1.
2.
3.
4.
5.
6.

MICRO FACTORS
7.
8.
9.
10.
11.
12.

82

Customers (demand & market segment)


Competitors
Suppliers
Distributors
Media
Company: production costs, objective and mission.

RESEARCH STUDIES

83

WHAT IS RESEARCH
Research

is the gathering, recording, analysing and reporting of all facts relating to the
transfer and sale of goods and services from producers to consumers. It is usually based
on statistical probability theory and always uses scientific methods.
Research is the
Gathering
Analysis
Storage
Retrieval
and
Dissemination of information to aid in decision making:

84

Source: Association of business executives

WHY RESEARCH

1.
2.
3.

4.
5.
6.
7.
8.
85

To find out cost involved in advertising


To find out what customers want to buy
To determine which distribution methods are
more efficient
To analyze what competitors are doing
To reduce risk
To help in planning and forecasting results
To aid mix decisions
To improve decision-making capabilities

INTERNATIONAL MARKETING RESEARCH AND ANALYSIS


THE MARKETING RESEARCH PROCESS

MARKETING RESEARCH
MARKETING RESEARCH

THE MARKETING RESEARCH PROCESS

Defining the
research
QUESTION
AND
objectives

Developing
The research plan
For collecting
information

Implementing the
Research planCollecting and
Analysing the
data

Interpreting and
Reporting the
findings

FIGURE 2: The Marketing Research Process.

Sunday, February 19, 2006

86

By J Asongwe

Source: Principles of marketing by Philip Kotler

The research process


The process of research describes the steps taken
in the research activity:
Gathering
Analysis
Storage
Retrieval
Dissemination
87

Source: Association of business executives

INTERNATIONAL MARKETING RESEARCH AND ANALYSIS

THE MARKETING RESEARCH PLAN: (WH QUESTIONS)


The research plan includes objectives, strategies and programmes and above all it
should be logical and
structured.
1.
What are the research problems? ( outline the research problems)
2.
What are the research objectives?( outline the research objectives)
3.
Determine the target to be researched : crucial to the research plan.
4.
Which research methodology are you using? Determine how the research is to be
carried out:
5.
Who will be responsible for carrying out the research? In-house or external
agency.
6.
How will data be collected?
7.
When will the research be carried out? Determine
8.
How long will the research take. (set time frame or limit)? time scale is important.
9.
How much budget have you set aside for the research? Set or agree the budget:
10.
Where will the research be carried out?
11.
Start carrying out the research : Implement the plan
12.
Gather and record the information
13.
Monitor and control
14.
Reach conclusions: Report the information and take action.
15.
Store the information to be retrieved in future.

88

RESEARCH PROPOSAL

The research proposal defines what the marketing research promises to do for its
client, and how
much it will cost.

Like the research brief, the proposal should be written to avoid misunderstandings.
A client should expect the following to be included.
1.
A statement of objectives: to demonstrate an understanding of the clients
marketing and research problems
2.
What will be done: an unambiguous description of the research design including
the survey method, the type of sample, the sample size, and how the fieldwork will
be controlled.
3.
Timetable: if and when a report will be produced.
4.
Costs: how much the research will cost and what specifically is/is not being
included in those costs.

Source: Principles and practice of marketing 2nd Edition by David Jobber

89

INTERNATIONAL MARKETING RESEARCH AND ANALYSIS

TYPES OF RESEARCH
1.
2.
3.
4.
5.

6.

7.
8.

9.

10.
11.
12.

90

Primary (field) research


Secondary (desk) research
Exploratory research
Conclusive research
Market research: This is focused on the size, composition, trends, structure of the market,
competitors and the environmental factors affecting the market.
Marketing research: Research which is focused on the marketing mix elements: Product,
price, place, promotion, people, physical evidence and process.
Experimental research:
Quantitative research:Quantitative comes from quantity meaning numbers. Results can be
in the form of numbers or percentages. This type of research is used to assess trends,
potential and actual growth or decline of a market or product consumption.
Qualitative research: Its about ideas and opinions, likes and dislikes: Likert scale or semantic
differential scale is normally used in qualitative research, which allows responses to be
quantified.
Observational research:
Survey research:
Descriptive research : Survey research may be undertaken to describe customers beliefs,
attitudes, preferences, behaviour, etc. For example, a survey into advertising effectiveness
might measure awareness of the brand, recall of the advertisement, and knowledge about its
content.

Source: Principles and practice of marketing 2nd Edition by David Jobber

RESEARCH METHODS
PRIMARY RESEARCH METHOD

91

Interviews and discussions


Observations
Questionnaires
Test marketing
Sampling
Survey/(Intelligence gathering)

USING EXTERNAL RESEARCH


AGENCIES

92

In-house or External
Finding, selecting and recruiting an
agency
Briefing
Controlling

DATA COLLECTION
Primary source
Secondary sources

Source: Principles and practice of marketing 2 nd Edition by David Jobber

93

SAMPLING
THE SAMPLING PROCESS:
1. Simple random sampling
2. Stratified random sampling
3. Quota sampling
4. Sample size

Source: Principles and practice of marketing 2nd Edition by David Jobber

94

SURVEY RESEARCH
THE SURVEY METHOD
Face-to-face interviews
Telephone interviews
Mail surveys

Source: Principles and practice of marketing 2nd Edition by David Jobber

95

QUESTIONNAIRE DESIGN
PLANNING STAGE
DESIGN STAGE
1.
Ordering of topics : it should have a logical flow
2.
Types of questions: Closed end questions and open
end questions.
3.
Wording and instructions
4.
Layout
5.
Scaling
6.
Probes and prompts
7.
Coding
Source: Principles and practice of marketing 2nd Edition by David Jobber

96

QUESTIONNAIRE

PILOT STAGE

Source: Principles and practice of marketing 2nd Edition by David Jobber

97

DATA ANALYSIS AND


INTERPRETATION

Source: Principles and practice of marketing 2nd Edition by David Jobber

98

REPORT WRITING AND


PRESENTATION

Source: Principles and practice of marketing 2 nd Edition by David Jobber

99

INTERNATIONAL MARKETING RESEARCH AND ANALYSIS

SOURCES OF INFORMATION
There are four main sources of information
1. Internal Sources
2. Government publications
3. Other publications
4. Commercial data

100

INTERNATIONAL MARKETING RESEARCH AND ANALYSIS

SOURCES OF INFORMATION
PRIMARY DATA:
Original

data . Data from the


horses mouth.
It takes time and it is expensive

SECONDARY DATA:
Existing data
Takes less time
It is not expensive
There is a possibility of getting obsolete data

101

MARKETING INFORMATION
SYSTEM:
The Marketing Information System
Marketing Information System
Marketing
environment
Marketing
managers

Planning

Assessing
information
needs

Internal record

Marketing
intelligence

Target
Markets

Marketing
channels

Execution

Competitors

Control

Distributing
information

Information analysis

Marketing research

Publics
Microenviron
ment forces

Marketing decisions and communications


FIGURE 1: The marketing Information

102

System
Tuesday,
December 20,
2005

By J Asongwe

BUSINESS AND MARKETING STRATEGIES


BUSINESS STRATEGY
1. Ansoff Matrix
2. Porters generic strategy

103

MARKETING STRATEGIES
PORTERS GENERIC STRATEGY MODEL
Differentiation

Stuck with no
clear strategy
Cost
leadership
104

Focus

STRATEGIES
ANSOFF MATRIX
Existing
Existing MARKET

PENETRATION

MARKET
DEVELOPMENT
New

105

New

PRODUCT
DEVELOPMENT

DIVERSIFICATION

MARKETING Strategies
Segment 1
MARKETING MIX
Concentrated strategy/marketing

MARKETING MIX 1

Segment 2
Segment 3
Segment 1

MARKETING MIX 2

Segment 2

MARKETING MIX 3

Segment 3

Differentiated strategy/marketing
MARKETING MIX
106

Whole
market

CORPORATE STRATEGIES

ATTACH STRATEGIES
1. Direct challenge differential advantage
2. Direct attack distinctive competence
3. Direct attack market share
4. Flank attack
5. Encirclement
6. Bypass
7. Guerrilla
107

1.
2.
3.
4.
5.
6.
7.

MARKETING STRATEGY

DEFENCE STRATEGIES
Position defence
Pre-emptive defence
Counter-offensive
Mobile defence
Flanking defence
Contraction defence
By-pass

108

OVERVIEWING THE
MARKETING PROCESS: MARKETING AS
AN EXCHANGE PROCESS
Marketing fundamentals

Marketing Fundamentals
109

Source: CIM course book

Marketing fundamentals-

MARKETING

110

THE CHANGING ROLE OF

Marketing fundamentals -

UNIT 2: MARKETING

PLANNING AND

BUDGETING

LEARNING OBJECTIVES:

To understand what is the marketing planning process.


To understand the importance of the marketing planning process
To examine the structure and components of the marketing plan.
The marketing planning process.
The concept of marketing audit
The value of marketing research and information in developing marketing plans.
To understand the importance and approaches to objective setting.
To understand the importance and process of segmentation, targeting and
positioning
Appreciate the range of tools and techniques to satisfy customer requirements
and compete

The process of setting marketing budgets

To understand the various management structures for implementing marketing


plans and the importance of monitoring and control of marketing activities.

Appreciate the range of tools and techniques available to satisfy customer


requirements and compete.

111

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

112

COMPONENTS OF A MARKETING PLAN

EXECUTIVE SUMMARY
BUSINESS MISSION
MARKTING AUDITING
SWOT ANALYSIS
MARKETING OBJECTIVES
BUSINESS OBJECTIVES
MARKETING STRATEGIES
BUSINESS STRATEGIES
MARKETING MIX
IMPLEMENTATION
EXPECTED RESULT
MONITORING
CONTROLLING

Marketing fundamentals -

UNIT 2:

MARKETING PLANNING

Definition
Marketing planning is deciding at present what to do in future.
Marketing planning involves the various steps which marketers have to follow
before achieving their overall objectives

Marketing Fundamentals

Source: CIM course book


113

Marketing fundamentals -

UNIT 2: MARKETING PLANNING AND

BUDGETING

The marketing planning process


1.
2.
3.

Business Mission/corporate objectives


Marketing audit
SWOT analysis

4.

Business Objectives

5.

Marketing objectives

6.

Marketing strategies

7.

Marketing tactics / marketing mix decisions

8.

Implementation

9.

Monitoring and control


Marketing Fundamentals

114

Source: CIM course book

MARKETING PLAN
Environmental scanning
Business Mission
Objectives
Strategies
Marketing Mix

Product

Price

Place

Promotion

People

Implementation

Monitoring

115

Control

Physical
evidence

Processes

MARKETING PLANNING
STRATEGY AND PLANNING
Initial environmental and business analysis
Develop the mission statement

CORPORATE
Detailed marketing audit

Corporate objectives and strategy formulation

Marketing objectives and strategy formulation

BUSINESS

Estimate expected results


Identify alternative plans and mixes
Implementation

Review

116

FUNCTIONAL

STRATEGY AND PLANNING

Corporate or visionary planning that provides


a mission and structure for evaluating and
allocating resources to business
Business planning which involves long-range
planning for positioning the company and its
products to best serve its target markets
Functional planning including marketing
planning which is generally annual planning
involving specific goals and plans over one
year.

117

CORPORATE STRATEGY
Strategies are formulated as a response to the
various
factors in the companys environment- and these
may
come from both external and internal sources:
a) External
b) Internal

118

Organizational Stance and


Positioning

119

Leaders
Followers
Nichers

Marketing fundamentals -

UNIT 2: MARKETING PLANNING AND

BUDGETING

THE BUSINESS MISSION


Learning Objectives

What is a Mission Statement.


What are the components of a mission statement.
What is the importance of a mission
statemement.
What are the characteristics of a Mission
Statement
Examples of Mission Statements: M&S, Asda,
Tesco, Sainsbury, BT & Npower.

120

Marketing fundamentals -

UNIT 2: MARKETING PLANNING AND

BUDGETING

The Marketing Audit


Learning Objective

What is the marketing audit


What are its components
What is the importance of the marketing audit.

121

Marketing fundamentals -

UNIT 2: MARKETING PLANNING AND

BUDGETING

THE SWOT ANALYSIS


Learning Objectives

122

What is the SWOT Analysis


What is the importance of carrying out a
SWOT Analysis.

Marketing fundamentals

Marketing planning and


budgeting.

123

Content OF PART B: Marketing


Environment:

The nature of the organization and the impact of its


environment
The micro-environment
Analysis of the competitive environment
The macro-environment
The demographic, social and cultural environment
The economic and international environment
The political and legislative environment
The technical/information environments

Environmental information systems-coping with the


challenge of environmental change.
Marketing Environment.

Source: CIM course book


124

Marketing Environment:
LEARNING OBJECTIVES
By the end of this module you should be able to:
Understand the nature of the marketing environment
and its relevance for the organisation and marketing
practice.
Examine the various types of organisation, their
objectives and the interface between marketing,
internal functions and external influences.
Recognise the importance of building relationships
with relevant stakeholders.
Identify and interpret the marketing implications of
significant changes in an organization's wider
environment.
Understand the complex, dynamic and uncertain
nature of the external environment and how it might
be best managed in marketing terms.
125

Marketing Environment:
Unit 1: The nature of the organization and the impact of its
environment

The importance of the marketing environment


Business classifications
The formal and informal economy
The legal form of trading organizations
Vision and the organizations mission
General organizational objectives
How are goals established?
What causes the goals to change?
The organization as an open system
The interface between marketing and other functions.
Managing the marketing environment: a contingency approach.

Marketing Environment.

126

Source: CIM course book

Marketing Environment:
Unit 1: The nature of the organization and the impact of its
environment
LEARNING OBJECTIVES
1. To explain the classification of private, public and voluntary organizations, their
legal status and operational characteristics.
2. Assess comparative strengths and weaknesses of small/medium and large/global
sized organizations.
3. State the meaning and importance of an organizations mission and explain the
nature and significance of the objectives pursued.
4. Identify the internal and external influences on the formation of objectives and
specify the likely drivers for organizational change.
5. Explain the nature of open systems responding to changing environmental
conditions.
6. Represent the organization as an open system responding to changing
environmental conditions
7. Distinguish between the types of organizations with the public, private and
voluntary sectors
8. Understand the diversity of organizational objectives and influences upon them
9. Understand the nature of organizations as open systems and the environmental
influences that affect them.
127

Marketing Environment:
Unit 1: The nature of the organization and the impact of its environment

The formal economy

The public sector


The private sector.

The Informal economy


Hidden
Voluntary
Household

128

Source: CIM course book

Marketing Environment:

Unit 1: The nature of the organization and the impact of its


environment

The formal economy

The public sector


State industries
Public/private partnership
Quangos
Municipal/local authority services

129

Source: CIM course book

Marketing Environment:
Unit 1: The nature of the organization and the impact of
its environment
The formal economy

The private sector.


Sole traders
Partnerships
Private limited companies; e.g. small/medium
businesses.
Cooperatives; e.g agricultural
Franchises; e.g McDonalds
Public limited companies; e.g Unilever plc
Multinationals: e.g BP, Coca-Cola Inc, Nestle, Cadbury.
130

Source: CIM course book

Marketing Environment:
Unit 1: The nature of the organization and the impact of its
environment

The Legal form of trading organizations:


Sole Trader:
Characteristics
Oldest type, simplest to form self-employment
Unincorporated
Ownership and control by a single person
Individuals assume all rights/duties
No separate legal existence: the business= the individual
No disclosure of information bar to tax authorities
No limit on employees: may employ >100
Farming/personal services/building/retail
May originate in the hidden economy.
131
Source:
CIM course book

The marketing environment: Unit 1: The nature of the organization and the impact
of its environment
SOLE TRADER:

MERITS

DEMERITS

Minimum formalities

Complete control/no consultation

Raising capital is difficult

Favorable tax treatment

Specialized and risky

Highly motivated/single-minded

Jack of all trades

Least costly to form

May lack continuity

Close to customers/employees

Self-exploitation

Flexible/attend to detail

Competition from large/small

Niches where limit to market

Lack management skills

Exemption from certain legislation

No one to share burden

Personal satisfactions-status

Source: CIM course book

132

Unlimited liability for any debts


,unincorporated,

no legal entity.

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
PARTNERSHIP
CHARACTERISTICS

133

Unincorporated
Two or more in common with a view to profit
No more than a legally specified maximum number (e.g
20), bar certain professions.
Form an agreement or bound by legislation
Unlimited liability and jointly liable
Share management/profits/losses
No legal personality.

Source: CIM course book

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
PARTNERSHIP
MERITS

DEMERITS

Able to raise more capital

Unlimited liability unless limited- still


must be at least one partner fully liable.

Pool expertise/mutual support funds

Lack of legal identity-dissolves if


death/disagreement

More chance to specialize

Potential disagreements

No company tax on business

Frozen investment
Unincorporated
No separate legal entity

Source: CIM course book

134

The marketing environment: Unit

1: The nature of the organization and


the impact of its environment
REGISTERED COMPANY: PLC & Private LC

CHARACTERISTICS
Incorporated, separate legal entity enter contracts,
etc.
Formed under relevant legislations, e.g 1985
Companies Act
Confers various rights and duties
Members contribute capital and own shares.
Dominant form
Liability limited to amount invested or guaranteed.
135

Source: CIM course book

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
For example, in Britain:

Public Limited Company


(PLC)

Private Limited Company


(Ltd)

Two or more members

Minimum two/100 authorized capital

50 000 and two directors

One director plus a secretary

Offer shares to the public

Offence to offer shares to public

Requires business certificate before


trading/borrowing

Trade once incorporation certificate is


received

Similar legislation elsewhere.

Typical family business


Raising additional bank funds easier

136

Source: CIM course book

The marketing environment: Unit

1: The nature of the organization


and the impact of its environment
For example, in Britain:
A registered company has a number of duties and must also submit to the
Registrar of Companies:

Memorandum of Association: It contains the external


rules and regulations
Articles of Association: It contains the internal rules and
regulations.
Statutory declaration of compliance with the relevant Act
Independently audited annual accounts and directors
report.

137

Source: CIM course book

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
REGISTERED COMPANY: PLC & Private LC

MERIT
Separate

DEMERIT
legal entity

Special

and double taxation

Limited

liability of owners

Complex/costly

Greater

financial capability

Disclosure

Easy

transfer of ownership

requirements

Government

regulations

Able

to fund innovation/new product


development

Inflexibility

Customers

Impersonality.

feel reassured.
Economies of scale:Internal and External.

to form

of size

Source: CIM course book


138

e marketing environment: Unit

1: The nature of the organization and


e impact of its environment

OOPERATIVE

CHARACTERISTICS

Pioneered in mid-nineteenth century-most prevalent in agriculture and


retailing
Governed by relevant legislation
Worker ownership/control but falling numbers/mergers
Limited liability but one member one vote
Self-help not profit maximizing via management committee
Equitable distribution of dividend if a surplus is made.

139

Source: CIM course book

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
FRANCHISING
CHARACTERISTICS

Franchisor sells the right to market a product under its name to a


franchisee.
Separate entities but interdependence businesses.
Rapid growth especially retailing McDonalds the Body shop.
Ready-made opportunity for an entrepreneur with capital wishing to
minimize risks of a new venture (90 per cent survive beyond three
years).

140

Source: CIM course book

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
AGREEMENT BETWEEN THE FRANCHISOR AND
THE FRANCHISEE:

Franchisor agrees to

Pay an initial sum to


franchisor

Provide business format/initial


training

Pay a percentage of profit to


franchisor

Supply product and quality control

Buy supplies of product from


franchisor

Extend promotional support (e.g.)


advertising

Maintain standards laid down.

141

Source: CIM course book

e marketing environment: Unit

1: The nature of the organization and


e impact of its environment

THE PUBLIC SECTOR


Local Authorities:

Services provided by local government


Examples include, among others, fire and police,
road maintenance, consumer protection,
recreation, environmental health, education and
airports.
They are managed by elected councillors through
full time professional officers.

Source: CIM course book


142

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment

THE PUBLIC SECTOR


STATE INDUSTRIES

143

Source: CIM course book

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment

THE PUBLIC SECTOR


PUBLIC PRIVATE PARTNERSHIP

144

Source: CIM course book

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment

THE PUBLIC SECTOR


QUANGOS (State Agents)

145

Source: CIM course book

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
THE PUBLIC SECTOR AND THE PRIVATE
SECTOR COMPARED:

PUBLIC SECTOR

PRIVATE SECTOR

Source: CIM course book


146

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
NATIONALISATION AND DENATIONALISATION OR
PRIVATISATION COMPARED:

NATIONALISATION

PRIVATISATION

Management and control of state owned


industries by the government

Transfer of ownership and control of state owned


industries from government to individuals.

147

Source: CIM course book

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
The regulated PLC:
The bulk of nationalized industries were
privatized in the 1980s and 1990s.
They were sold directly to the public:
management/employee buyouts or to other
companies.
Examples of privatized industries in the UK
includes : BT, Royal Mail, London Underground)

148

Source: CIM course book

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
THE ARGUMENTS FOR PRIVATISATION:
POLITICAL ARGUMENTS

ECONOMIC ARGUMENTS

Reduced

Achieve

role of the state

Deregulation

of the economy

efficiency improvements

Increased

Encourage

shareholding democracy
among customers

Pressure

Enable

Improve

Provide

worker share-ownership

competition and choice

on management to
become marketing oriented
industrial relations

freedom to manage

Exploit

new opportunities

Cut

borrowing(PSBR)and taxes

Supply

side rises in productivity.

Cut

costs

Source: CIM course book

149

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
VISION AND THE ORGANIZATIONS MISSION:

VISION
Components of a vision statement
Characteristics of vision statements
The importance of a vision statement
From Vision to Mission.

Source: CIM course book


150

e marketing environment: Unit

1: The nature of the organization and


e impact of its environment
HE ORGANIZATONS MISSION

Component of a Mission Statement


Characteristics of a Mission Statement
The importance of a Mission Statement

151

Source: CIM course book

The marketing environment: Unit

1: The nature of the organization and


the impact of its environment
THE ORGANIZATONS MISSION

Examples of Mission and Vision Statements


THE MISSION STATEMENT OF ASDA Superstore.

152

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
THE ORGANIZATONS MISSION
THE MISSION STATEMENT OF TESCO

153

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
THE ORGANIZATONS MISSION
THE MISSION STATEMENT OF Marks & Spencer

154

Source: Strategic Marketing Management by R.M.S Wilson

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
THE ORGANIZATONS MISSION

The Mission Statement of NPOWER

155

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
THE ORGANIZATONS MISSION

The Mission Statement of British Gas

156

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
THE ORGANIZATONS MISSION
THE MISSION STATEMENT OF DEBENHAMS:
We will be the leading countrywide speciality store, the first
choice for fashion on card which employees

157

Source: Strategic Marketing Management by R.M.S Wilson

The marketing environment: Unit

1: The nature of the organization


and the impact of its environment
THE ORGANIZATONS MISSION
The Mission Statement of Sainsbury

To discharge the responsibility as leaders in our trade by acting


with complete integrity, by carrying out our work to the highest
standards, and by contributing to the public good and to the
quality of life in the community.
To provide unrivalled value to our customers in the quality of the
goods we sell, in the competitiveness of our prices and in the
range of choice we offer.
In our stores, to achieve the highest standards of cleanliness
and hygiene, efficiency of operation, convenience and customer
service, and thereby create as attractive and friendly a shopping
environment as possible.
To offer our staff outstanding opportunities in terms of personal
career development and in remuneration relative to other
companies in the same market, practising always a concern for
the welfare of every individual.
To generate sufficient profit to finance continual improvement
and growth of the business whilst providing out shareholders
with an excellent return on their investment.

1.

2.

3.

4.

5.

Source: Strategic Marketing Management by R.M.S Wilson

158

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
THE ORGANIZATONS MISSION
THE MISSION STATEMENT OF BT:

To provide world class telecommunications and information products


and services

To develop and exploit our networks at home and overseas so that


we can
1.
Meet the requirements of our customers
2.
Sustain growth in the earnings of the group on behalf of our
shareholders
3.
Make a fitting contribution to the community in which we conduct our
business.
BTS CORE VALUES

We put our customers first

We are professional

We respect each other

We work as one team

We are committed to continuous improvement.

159

Source: Strategic Marketing Management by R.M.S Wilson

The marketing environment: Unit

1: The nature of the


organization and the impact of its environment
THE ORGANIZATONS MISSION

The Mission Statement of Argos

160

Learning objectives what you


should know by the end of the lesson

161

The nature of the organization and the impact of its


environment
The micro-environment
Analysis of the competitive environment
The macro-environment
The demographic, social and cultural environment
The economic and international environment
The political and legislative environment
The technical/information environments

Environmental information systems-coping with


the challenge of environmental change.

THE MARKETING ENVIRONMENT


MACRO ENVIRONMENT
Political
Government policies
Rules and regulations
Laws, taxes, political stability/instability,regime in government
MICRO ENVIRONMENT
Company
Management/BOD
Shareholders
Employees

Customers

Financial Intermediaries
Social
THE COMPANY
Banks
Economic
Credit Institutions
AND ITS
Demographic
Social Class
Inflation,
Building Societies
ENVIRONMENT
Reference groups
Employment,
Insurance companies
GDP,GNP,NI,
Local community Health
Marketing Intermediaries
Education
Unemployment,
Pressure
groups
Communication
wages,
Suppliers
Culture
Interest rates,
Distributors/transporters
Tax,
Think-tank consultancy
deflation,
Media
Ecological
trade cycle,
Law firm
Retailers
exchange
Polusion
Wholesalers
rates,
Climate change
Energy prices
Scarcity of oil
Agents/brokers
economic growth
Per Capita Income,
competitors

Technological
Internet, digital, ATM
EPSS, mobile, SMS,

162

Natural disasters

Recycling

Legal
Polusion law ,Alcohol law,consumer protection law
Employment law, product safety law
Human rights law, Business law

THE BUSINESS ENVIRONMENT PEST FACTORS

Political
Government policies
Rules and regulations
Laws, taxes, political stability/instability,regime in government

Economic
Inflation,
Employment,
GDP,GNP,NI,

Social

Unemployment,
wages,
Interest rates,
Tax,
deflation,
trade cycle,
exchange
rates,
Energy prices
economic growth
Per Capita Income,
competitors

Technological
Internet, digital, ATM
APSS, mobile, SMS,

163

ENVIRONMENTAL
FACTORS

Demographic
Social Class
Reference groups
Health
Education
Communication
Culture

Ecological
Polusion
Climate change
Scarcity of oil
Natural disasters

Legal

Recycling

Polusion law ,Alcohol law,consumer protection law


Employment law, product safety law
Human rights law, Business law

ANALYSIS OF THE MACRO ENVIRONMENT


PESTEL FACTORS
POLITICAL
ECONOMIC
SOCIAL
TECHNOLOGICAL
ECOLOGICAL
LEGAL

164

ANALYSIS OF THE MACRO ENVIRONMEN

POLITICAL
The

political environment
Political uncertainties/instability
International political environment

165

ANALYSIS OF THE MACRO ENVIRONMENT

ECONOMIC
Employment/unemployment
Inflation/deflation
Government

economic objectives
NI,GDP,&GNP
The Business Cycle
BOP & BOT
Trade & exchange rate policy
The impact of international trade
Interest rate
Prices
Competition
Demand

166

ANALYSIS OF THE MACRO ENVIRONMENT

SOCIAL

Demographic:
This is the study of the composition of a countrys population in
terms of age, gender, sex, occupation.
Population
Age composition
Gender composition
Marital status and household structure
Income
Migration: Immigration & Emigration (Net migration)
Birth rate & Death rate
Fertility rate.
Trends in population
The dependency ratio
World population
Aggregate population
Population structure
Regional distribution of population
Ethnic groups
Occupational structure
The workforce in employment: some important trends
The changing role of women in work and society

167

Demographic studies and


marketing
POPULATION:
WORLD POPULATION

168
Source:
http://esa.un.org/unpp/

distribution
Europe and the New Independent
States

Source
169

http://www.overpopulation.com/faq/basic_information/age_distribution/europe.html

World population:
6000,000,000
The most highly populated countries in the world:
Country:
Population:
Density
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

CHINA
INDIA
UNITED STATES OF AMERICA
INDONESIA
BRAZIL
PAKISTAN
BANGLADESH
RUSSIA
NIGERIA
JAPAN

1,306,313,812
1,103,600,000
293,655,404
241,973,879
186,112,794
162,419,946
144,319,628
143,420,309
128,771,988
127,417,244

Source: http://en.wikipedia.org/wiki/World_population
http://en.wikipedia.org/wiki/Population

170

136
328
30
126
21
202
1,002
8
139
337

Gender composition:

171

MARITAL STATUS AND HOUSEHOLD


STRUCTURE

172

INCOME DISTRIBUTION

173

BIRTH RATE/ FERTILITY RATE

174

DEATH RATE

175

MIGRATION:
Immigration/Emigration

176

TRENDS IN POPULATION

177

REGIONAL DISTRIBUTION OF POPULATION

178

OCCUPATIONAL STRUCTURE:

179

SOCIAL

Social class
Culture
Reference groups
The family
Lifestyle
Education
Health
Communication

180

ANALYSIS OF THE MACRO ENVIRONMENT


TECHNOLOGICAL

181

ANALYSIS OF THE MACRO ENVIRONMENT


ECOLOGICAL

182

ANALYSIS OF THE MACRO ENVIRONMENT


LEGAL
Legislation imposed by governments
The legal framework
Role and objective of legislation
Fair trading and the consumer
Protecting the consumer
Implications to the marketer.

183

INTERNATIONAL MARKETING:
1.
2.
3.
4.

184

What is international marketing


International marketing environment
International market entry strategy
International marketing mix

INTERNATIONAL MARKETING
DIFFERENCES IN CULTURE

What is culture

Culture is sum total of belief, rituals, custom, tradition,


norms etc;
that characterizes a particular group of people, society, or
organization.

The sum total of learned beliefs, values and custom that serve to direct
customer behaviour
in a particular country market

Components of culture.

185

Differences in culture:

1.
2.
3.
4.
5.
6.
186

There exist cultural differences in different


continents across the world with respect to the
following:
Language
Aesthetics
Norms
Values
Rituals
Custom and tradition

CHAPTER 4: INTERNATIONAL TRADE


THEORY
Demand and supply
Tariffs
Quotas
BOP
TOT
IMPORTS & EXPORTS
INTERNATIONAL CURRENCIES
TRADE RESTRICTIONS
BORDER CONTROL
EXCHANGE RATE
INTEREST RATE
NATIONAL INCOME.
BUDGET
187

ENVIRONMENTAL INFLUENCES ON
INTERNATIONAL MARKETING
Socio/Cultural
Language
Religion
Aesthetics
Values and attributes
Social organisation
Material culture
Health
Communication/transport.
Economic
Developed economies
Emerging economies
Less developed economies
Currency movements
188

Legal
Local domestic laws
International law
Home domestic law

Environmental
Influences on
International
Marketing
Ecological

Political
Operational restrictions
Discriminatory restrictions
Physical actions

Technological
Satellite Communications
ISDN
Internet
WWW
The Electronic
Superhighway

INTERNATIONAL MARKET ENTRY


STRATEGY

189

Content of PART C: Marketing in


practice

An overview of the marketing system


The context of marketing
The integrated marketing mix: product
The marketing mix: price
The marketing mix: place
The marketing mix: promotion
The integrated marketing mix service extension (people,
physical evidence and process)
The management of marketing information
Skills for the marketer
Bringing it all together: the marketing plan

Source:
190 CIM course book

THE LEARNING OBJECTIVES IN Marketing


in practice
By the end of this module you should be able to:

Collect relevant data from a variety of secondary information


sources

Analyse and interpret written, visual and graphical data

Devise appropriate visual and graphical means to present


marketing data

Make recommendations based on information obtained from


multiple sources

Evaluate and select media and promotional activities appropriate


to the organisation's objectives and status and to its marketing
context

Calculate and justify budgets for marketing mix decisions

Develop relationships inside and outside the organisation

Apply planning techniques to a range of marketing tasks and


activities

Undertake basic marketing activities and within an agreed plan


and monitor and report on progress

Gather information for, and evaluate marketing results against,


financial and other criteria

191

Content of PART D Customer


Communication

The importance of the Customer


Buying behaviour
The communication process
The communication mix
The role of information communication technology in
customer communications
Effective communications
Communicating in meetings, interviews and
negotiations
Using statistical data and visual information
Written communication formats.

192

Source: CIM course


book

LEARNING OBJECTIVES

OF

Customer

Communication
By the end of this module you should be able to:

Recognise organisations as open systems and explain the


importance of relationships between the organisation and its
suppliers, intermediaries, customers and other key stakeholders in a
changing environment

Explain why it is important for marketers to understand consumer


and industrial buying behaviour for marketing decisions

Explain the elements of the promotional mix and its fit with the
marketing planning process

Explain the advantages and disadvantages of the range of


communications tools available to an organisation

Develop internal and external communications using appropriate


tools to suit a variety of target audiences and using an
understanding of customer behaviour and customer information

Select appropriate verbal and non-verbal communications with


people inside and outside the organisation

Demonstrate the importance of customers and customer service and


apply customer care principles to create positive relationships with
customers in a variety of contexts

193

Content of PART D Customer Communication

Unit 1: The importance of the Customer


Who are customers?
Why are customers important?
Why do people communicate in business?
So who are your customers?
Who are an organizations customers?
Internal Customers
Internal Marketing
Improving customer communications.

Source: CIM course book

194

Content of PART D Customer Communication

Why do people communicate in Business:


1.
2.
3.

4.
5.
6.
7.
8.

9.

195

To build relationships internally and externally with individuals and


groups
To give specific instructions to others on a range of business matters,
both procedural and strategic.
To disseminate information on a range of corporate matters such as the
mission statement, policy issues or, in the case of the external market,
on price changes or new promotional initiatives
To share ideas and values on work-related issues or procedural tasks
To negotiate matters of policy as a joint venture or merger
To discuss or negotiate on personal or professional matters such as
remuneration and other higher and lower level hygiene factors
To motivate, interest and stimulate employees for commitment and
loyalty to the firm
To create an awareness of the organization, its products or services and
persuade the external market, for example, to make a purchase
decision or to request further information
To receive feedback in order to monitor whether the communication was
understood and the reaction of the recipient to the message.

Source: CIM course book

Content of PART D Customer Communication

UNIT 2: BUYING BEHAVIOUR


The purpose of communication
Communications and marketing
Relating customer behaviour to external communications
Communication objectives and buying process
How the buying process relates to communications
Understanding organizational buying behaviour
Bibliography.

196

Source: CIM course book

Content of PART D Customer Communication

UNIT 3: THE COMMUNICATION PROCESS:


The purpose of communication
The communication chain
Barriers to successful communication
Avoiding barriers to communication
Effective communicators
Planning the business message
How the PASS framework can help in planning messages.

Source: CIM course book


197

Content of PART D Customer Communication

UNIT 4: THE COMMUNICATIONS MIX:


The communications mix or promotions mix
Integrated Marketing Communications
Above-the-line promotional activity
Below-the-line promotional activity
Corporate image
Brand image
Logos
Packaging
Point of sale display and Merchandising.
Sales promotion
Exhibition
Sponsorship
Public relations
Direct Marketing
Evaluating the effect pf advertising
The role of the brief.

Source: CIM course book


198

Content of PART D Customer Communication

UNIT 4: THE COMMUNICATIONS MIX:

Above-the-line communication methods:

Advertisement
Definition: This is any paid form of non-personal presentation and promotion of ideas, goods or
services by
an identified sponsor
Advertisement can be done through the following means: Above-the-line advertisement.

Radio

Television

Newspaper: Local, national and international newspapers; E.G The times, financial times, daily
mirrow, express and star and the sun.

Internet

Magazine

Outdoor

Cinema
199 Philip Kotler(Principles of Marketing), CIM course book.
Sources:

Content of PART D Customer Communication


UNIT 4: THE COMMUNICATIONS MIX:

ADVERTISMENT:
This is any paid form of non-personal presentation and promotion of ideas, goods or
services by
an identified sponsor

200

Sources: Philip Kotler(Principles of Marketing-4th European Edition) and CIM course book.

ADVERTISMENT:
Main Advertising Decisions
Advertising strategy

Objectives
setting
Communicati
on
Objectives

Budget decisions

Affordable approach
Percentage of sales
Competitive parity

Message
decision

Media
decision

Reach, frequency,
Message strategy Impact
Message execution Main media types
Specific media
vehicles

Objective and task

Sales
Objectives

201

Media timing

Campaign
evaluation
Communication
Impact
Sales impact

ADVERTISMENT:
Important decisions in advertising:
Setting advertising objectives:

The first step is to set advertising objectives.


Advertising objective is a specific communication task to be accomplished
with a specific target audience during a specific period of time.

202

ADVERTISMENT:
Possible Advertising Objectives:
Informative advertising
Telling

the market about a new product


services
Suggesting new uses for a product
impressions
Informing the market of a price change
Explaining how the product works

Persuasive advertising
Building

brand preference
switching to your brand
Changing customer perceptions of product attributes
Persuading customers to purchase now
Persuading customer to receive a sales call
Encouraging

Reminder advertising
Reminding

203

customers that the product may be needed in the near future


Reminding customers where to buy the product
Keeping the product in customers minds during off-seasons
Maintaining top-of-mind product awareness.

Describing available
Correcting false
Reducing customers fears
Building a company image.

ADVERTISMENT:
Setting the advertising budget
After determining its objectives, the company
next sets its advertising budget for each
product.
Four methods for determining promotion
budget

204

ADVERTISMENT:

Specific factors that should be


considered when setting the
advertising budget:

1.

Stage in the product life-cycle:


Market share
Competition and Clutter
Advertising frequency
Product differentiation

2.
3.
4.
5.

205

ADVERTISMENT:
Developing Advertising Strategy:

Creating the advertising message:


No matter how big the budget, advertising can
succeed
only if commercials gain attention and
communicate
well.
206

ADVERTISMENT:
The changing message environment

207

ADVERTISMENT:
Message strategy:

208

ADVERTISMENT:
Message Execution
Any message can be presented in different
execution styles such as the following:

Slice of life
Lifestyle
Fantasy
Mood or image
Musical
Personality symbol
Technical expertise
Scientific evidence.
Testimonial evidence or endorsement

209

ADVERTISMENT:
Selecting advertising media
Deciding on reach, frequency and impact

Choosing among chief media types

210

ADVERTISMENT:
Choosing among chief media
types
Medium
Advantages
Limitations
Newspape
rs

Flexibility;timeliness; local market


coverage;broad acceptance; high
believability

Short life; poor reproduction quality; small passalong audience.

Television

Good mass-market coverage; low


cost per exposure; combines
sight, sound and motion;
appealing to the senses.

High absolute cost; high clutter; fleeting exposure;


less audience selectivity.

Radio

Good local acceptance; high


geographic and demographic
selectivity; low cost.

Audio presentation only; low attention ( the halfheard medium); fleeting exposure; fragmented
audience

Magazines

High geographic and


demographic selectivity; credibility
and prestige; high-quality
reproduction; long life; good passalong readership.

Long ad purchase lead time; high cost; some waste


circulation; no guarantee of position.

Direct mail

High audience selectivity;


flexibility; no ad competition within
the same medium; allows
personalization.

Relatively high cost per exposure;


Junk mail image.

Outdoor

Flexibility; high repeat exposure;


low cost; low message
competition; good positional
selectivity.

No audience selectivity; creative limitations.

211

ADVERTISMENT:

Selecting Specific Media Vehicles

Deciding on Media timing

212

ADVERTISMENT:

EVALUATING ADVERTISING:

213

Repeat
Trial
Intention
Preference
Attitude
Aware
214

Unaware

ADVERTISMENT:

Other advertising considerations:

Organizing for advertising

215

ADVERTISMENT:

International advertising decisions

Standardisation or differentiation

Centralisation and decentralisation

216

ADVERTISMENT:
Worldwide advertising media:

217

ADVERTISMENT:

Media planning, buying and costs

International advertising regulations

218

UNIT 4: THE COMMUNICATIONS MIX


Below the line communication:
Corporate image
Brand image
Logos
Packaging
Point of sale display and Merchandising.
Sales promotion
Trade fairs and Exhibition
Sponsorship
Public relations
Direct Marketing
Direct Mail
Evaluating the effect of advertising
Source: Priciples of Marketing by Philip Kotler and CIM course book.

219

UNIT 4: THE COMMUNICATIONS MIX

Below the line communication:


SALES PROMOTION:
It is a short-term incentive to encourage purchase or sales of a product or service.
It consists of short-term incentives, in addition to the basic benefits offered by the
product or service, to encourage the purchase or sale of a product or service.
Whereas advertising offers reasons to buy a product or service, sales promotion
offers reasons that would achieve immediate sales.
Sales promotion seeks to motivate the customer to buy now.
Sales promotion includes a wide variety of promotion tools designed to stimulate
earlier or stronger market response.
These tools are used by many organizations-manufacturers, distributors, retailers,
trade associations and non-profit institutions-and may be targeted towards the
consumer or final buyer, business customers, the trade or retailer and the companys
sales force.
Consumer promotion include money-off, coupons, premiums, contests and others.
Trade promotion range from special discounts, free goods and loyalty bonuses to
training.
Business promotion include many of the same tools used for consumer or trade
promotions such as conventions and trade shows, as well as sales contests.
Sales force promotions include bonuses, commissions, free gifts and competitions.
220

SALES PROMOTION:
Consumer promotion

Sales promotion designed to stimulate consumer purchasing, including


samples, coupons, rebates, price-offs, premiums, patronage rewards,
displays, and contests and sweepstakes.

Trade (or retailer promotion)

Sales promotion designed to gain reseller support and to improve reseller


selling efforts, including discounts, allowances, free goods, cooperative
advertising, push money, and conventions and trade shows.

Business promotion

Sales promotion designed to generate business leads, stimulate purchase,


reward business customers and motivate the salesforce.

Sales force promotion

Sales promotion designed to motivate the sales force and make sales force
selling efforts more effective, including bonuses, contests and sales rallies.
221

SALES PROMOTION
MAJOR SALES PROMOTION TOOLS:
CONSUMER PROMOTION TOOLS:
Samples: Offers to consumers of a trial amount of a product
Coupons: Certificates that give buyers a saving when they purchase a
product
Cash refund offers (rebates): Offers to refund part of the purchase price of a
product to consumers who send a proof of purchase to the manufacturer
Price packs: Reduced prices that are marked by the producer directly on the
label or package
Premiums: Goods offered either free or at low cost as an incentive to buy a
product.
Advertising specialities: Useful articles imprinted with an advertisers name,
given as gifts to consumers.
Patronage rewards: Cash or other awards for the regular use of a certain
companys products or services.
Point-of-purchase (POP) promotions: Displays and demonstrations that take
place at the point of purchase or sale.
Competitions, sweepstakes, lotteries and games: promotions that offer
customers the chance to win something cash, goods or trips by luck or
extra effort.

1.
2.
3.
4.
5.
6.
7.
8.
9.

222

STAKEHOLDERS

Staff

Govern
ment

Owners
Custo
mers

Supplier

Distribu
tors

Financial
Institu
tions

Community

Competitors

223

Pressure
groups

Stakehol
ders

Manage
ment

Media

SALES PROMOTION
MAJOR SALES PROMOTION TOOLS:
TRADE PROMOTION TOOLS:

DISCOUNT: A straight reduction in price on


purchases during a stated period of time
ALLOWANCE: (1)Reduction in price on
damaged goods.
(2) Promotional money paid by manufacturers to
retailers in return for an agreement to feature
the manufacturers product in some way.
224

SALES PROMOTION
MAJOR SALES PROMOTION TOOLS:

BUSINESS PROMOTION TOOLS


1. Conventions and trade shows
2. Sales contests

225

SALES PROMOTION
RAPID GROWTH OF SALES PROMOTION

226

SALES PROMOTION
SETTING SALES PROMOTION
OBJECTIVES

227

SALES PROMOTION-consumer market


MAJOR SALES PROMOTION TOOLS
Samples
Offers to consumers of a trial amount a product

Coupons
Certificates that give a saving when they purchase a product

Cash refund offers (rebates)


Offers to refund part of the purchase price of the purchase price of a product to consumers
who send a proof of purchase to the manufacturer

Price packs
Reduced prices that are marked by the producer directly on the label or package

Premiums
Goods offered either free or at low cost as an incentive to buy a product

Advertising specialties
Useful articles imprinted with an advertisers name, given as gifts to consumers.

Patronage rewards
Cash or other awards for the regular use of a certain companys products or services.

Point-of-purchase (POP) promotions


Displays and demonstrations that take place at the point of purchase or sale

Competitions, Sweepstakes, lotteries and games


Promotions that offer customers the chance to win something cash, goods or trips by luck or
extra effort.

228

PUBLIC RELATIONS
1.This is a planned, sustained and deliberate effort by an
organization
to maintain a good relationship with the public.
2.Public relations means building good relations with the
companys
various publics by obtaining favorable Publicity, building up a good
corporate image, handling or heading off unfavourable rumours,
Stories and events. Major PR tools include press relations,
product
publicity, corporate communications, lobbying and counselling:
229

PUBLIC RELATIONS
Public relations is another mass-promotion technique. This concerns building good
relations with the
companys various publics by obtaining favourable publicity, building up a good corporate
image' and
handling or heading off unfavourable rumours, stories and events. Public relations (PR)
departments
Perform any or all of the following functions:
Press relations or press agency: Creating and placing newsworthy information in the
news media to attract attention to a person, product or service.
Product publicity: Publicising specific products
Public affairs: Building and maintaining local, national and international relations.
Lobbying: Building and maintaining relations with legislators and government officials
to influence legislation and regulation.
Investor relations: Maintaining relationships with shareholders and others in the
financial community.
Development: Public relations with donors or members of non-profit organisations to
gain financial or volunteer support.

1.

2.
3.
4.

5.

6.

230

PUBLIC RELATIONS
Public relations is used to promote products, people, places, ideas, activities,
organisations and even nations.
Trade associations have used public relations to rebuild interest in declining
commodities. Nations use public relations to attract more tourists, foreign
investment
and international support.
The government uses public relations to sensitize the public about the
consumption
of dangerous products such as cigarettes and alcohol.
The government also uses public relations to make the public to protect them
selves
from diseases e.g. AIDS. Steal in this light, the government uses PR to educate
the
public about precautionary measures to take in so far as Bird Flu Virus is
concerned.
Pressure groups such as the Food Standards Agency also uses the PR to
inform customers about those harmful products which can damage their
health.

231

PUBLIC RELATIONS
MAJOR PUBLIC RELATIONS TOOLS:

PR professionals use several tools. One essential tool is news . PR professionals find or create favourable news
about the company and its products or people. Sometimes news stories occur naturally. At other times, the PR person can
suggest events or activities that would create news.

Speeches also create product and company publicity. Increasingly, company executives must field questions
from the media or give talks at trade associations or sales meetings. These events can either build or hurt the
companys image.

Another common PR tool is special news, ranging from news conferences, press tours, grand openings and
firework displays to laser shows, hot-air balloon releases, multimedia presentations and star-studded
spectaculars, or educational programmes designed to reach and interest target publics.

Public relations people also prepare written material to reach and influence their target markets. These materials
include annual reports, brochures, articles and company newsletter and magazines.

Audiovisual materials such as films, slide-and-sound programmes and video and audio cassettes, are being used
increasingly as communication tools.

Corporate-identity materials also help create a corporate identity that the public immediately recognises. Logos,
stationery, brochures, signs, business forms, business cards, buildings, uniforms and even company cars and
trucks make effective marketing tools when they are attractive, distinctive and memorable.

Finally, companies might improve goodwill by contributing money and time to public service activities: campaigns
to raise funds for worthy causes- for example, to fight illiteracy, AIDS, Bird Flu, Tuberculosis, cancer; support the
work of a charity, or assist the aged and handicapped- help to raise public recognition.

Sponsorship is any vehicle through which corporations gain public relations exposure. Corporate sponsorships
have become an important promotional tool for companies looking to lift their brand image, or introduce new
product lines or services. Worldwide spending on sponsorships totalled $24bn in 2002, an annual increase of 3.4
percent according to a Chicago based research company (IEG).

232

PUBLIC RELATIONS
MAIN PUBLIC RELATIONS DECISIONS

233

PUBLIC RELATIONS

SETTING PUBLIC RELATIONS OBJECTIVES

234

PUBLIC RELATIONS

CHOOSING PUBLIC RELATIONS MESSAGES


AND VEHICLES

235

PUBLIC RELATIONS
IMPLEMENTING THE PUBLIC RELATIONS
PLAN

236

PUBLIC RELATIONS
EVALUATING PUBLIC RELATION RESULTS

237

Below the line communication:


DIRECT MARKETING
It is direct communications with carefully targeted
individual customers to obtain an immediate
response.

238

DIRECT MARKETING
THE BENEFITS OF DIRECT MARKETING TO THE
CONSUMER
Direct marketing benefits buyers in many ways:
1.
First it is convenient: from the comfort of their homes or offices, customers can browse mail
catalogues or sellers websites at any time of the day or night. Buying is easy and private. Customer
confront fewer buying hassles and do not have to face salespeople or open themselves up to persuasion and
emotional pitches. Business Customers can learn about available products and services without waiting for
and tying up time with sales people.
2. Direct Marketing often gives shoppers greater product access and selection: For example, the worlds the
limit for web. Cyberstores such as Amazon, CDNow and others can offer an almost unlimited selection
compared to the more meagre assortments of counterparts in the bricks- and mortar world. Beyond a
broader selection of sellers and products, online and Internet channels also give buyers access to a wealth of
comparative information, information about companies, products and competitors, at home and around the
globe. Good websites often provide more information in more useful forms than even the most solicitous
salesclerk can. Amazon. COM and CDNow, for example, offer best-seller lists and reviews:
3. Finally, direct marketing- especially online buying is interactive and immediate. Customers can often interact
with the sellers by phone or on the sellers website to create exactly the configuration of information, products or
services they desire, then order them on the spot. Furthermore, the internet and other forms of direct marketing
give
customers a greater measure and sense of control. For example, a rising proportion of car buyers shop online,
arming themselves with information about car models and dealer costs before showing up at a dealership.

239

DIRECT MARKETING
THE BENEFITS OF DIRECT MARKETING TO
THE SELLER:
Direct marketing also yields many benefits to sellers:
1.
Direct marketing is a powerful tool for customer relationship building:
2.
Direct marketing gives sellers access to buyers that they could not reach
through other channels. For example, the internet provides access to global
markets that might otherwise be out of reach.
3.
Finally, direct marketing can offer sellers a low-cost, fast and efficient
alternative for reaching their markets. For example, direct marketing has
grown rapidly in B2B marketing, partly in response to the ever-increasing
costs of marketing through the sales force.

240

DIRECT MARKETING
FORMS OF DIERCT MARKETING
Telephone marketing
Direct-mail marketing
Catalogue marketing
Direct-response television marketing
Integrated direct marketing

241

Content of PART D Customer Communication


UNIT 4: THE COMMUNICATIONS MIX: Sources: Philip Kotler(Priciples of Marketing

Below the line


advert
Corporate image
Brand image
Logos
Packaging
POSDM
Sales promotion
Exhibitions
Sponsorship
Public relations
Direct
242 marketing

Advantages

Disadvantages

UNIT 4: THE COMMUNICATIONS MIX:


Above the line advert

Advantages

Disadvantages

Television: Terrestrial, satellite,


cable and interactive: Local,
national and International.

Can

provide movement/colour/sound
and emotion.
It is an intrusive medium.
Viewers can identify with situations in
adverts.
Mass, regional or specific coverage
available.

Short

Radio: Local, national and


international.

Airtime

is not very expensive.


Offers sound effects and emotion.
Versatile in location (Portable)
It is intrusive.

Non-visual

High

No

Press Advertising: It covers all


printed papers; Newspapers,
Magazines and directories. It may
be national, regional, specialist,
trade or general publications.

243

circulation with good opportunity


to see(OTS).
Audience can be easily identified
Information can be saved and retrieved
Advantages can include response
coupons.
Relatively low costs involved(both
preparation and advert space)

time of adverts
restricts informationpassing.
Can be repetitive which will
result in boredom for viewer.
Costly/time consuming to
produce live adverts
Adverts shown when many
supply points are closed.
Adverts not retained for
review(consider home
videos)
Can be difficult for viewer
to respond(consider telemarketing)

Transmit

only non complex

info
Needs repetitive advert to
ensure coverage.
High risk of listener
intolerance due to repetition.
sound and Movement
If too many adverts, some
will be missed.
Magazines require long
lead time.
Printing only as good as
the staff involved.

UNIT 4: THE COMMUNICATIONS MIX:

Above the line advert

Cinema

Internet

Outdoor

244

Advantages

Disadvantages

Content of PART D Customer Communication

UNIT 5: THE ROLE OF INFORMATION COMMUNICATION


TECHNOLOGY IN CUSTOMER RELATIONSHIPS:
How communications with customers is changing
The evolution of e-business
Using ICT to improve customer communications.
The Internet
Websites
Electronic Mail
Intranet
Extranet
E-Commerce
E-Business
E-Marketing
Signposts for the future
Telecommunications
Digital technology
245

Source: CIM course book

Content of PART D Customer Communication

UNIT 6: EFFECTIVE COMMUNICATIONS


Communication skills in marketing.
Verbal communication
Non-verbal communication
Using and interpreting non-verbal communication
Listening skills
Using the telephone
Planning telephone calls
Guidelines for making effective telephone calls
Guidelines for receiving calls
Conference calls
Presentation skills

Source: CIM course book


246

Content of PART D Customer Communication


UNIT 7: COMMUNICATING IN MEETINGS, INTERVIEWS AND NEGOTIATIONS:
Meetings
Reasons for meeting
Types of meetings.
Managing meetings
Constituting a formal meeting
Terminology of meetings
Meeting documents
The role of interview and negotiations
Purpose of interview
Types of interview
Planning the interviews
The interview process
Types of questions
Negotiations

Source: CIM course book


247

Content of PART D Customer Communication


UNIT 8 : USING STATISTICAL DATA AND VISUAL INFORMATION:
Why is data relevant to marketing?
Interpreting, selecting and summarizing information
Why use visual information?
How to present visual information?
Problems with distorting information.

Source: CIM course book


248

Content of PART D Customer Communication


UNIT 9: WRITTEN COMMUNICATION FORMATS
Why study communication formats?
Written communications skills in marketing
When to use letters
The layout of a business letter
Types of letters
Memoranda
E-MAIL
Notices
Reports
Articles.

Source: CIM course book


249

WRITTEN COMMUNICATION FORMAT


(a)

Blocked layout

(b) Semi-blocked layout

Letter head
----------------------

Letterhead
------------------------

-----------------------

-------------------------

------------------------------------------------------------

------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------

---------------------------------------------

250

Layouts for business letters: (a) blocked; (b) semi-blocked

-----------------------------------------------

WRITTEN COMMUNICATION FORMAT


LETTERHEAD
Letter references
Date
Inside address of recipient
Attention letter
Salutation
Subject heading
Body
Complimentary Close
Signature
Name
Position
Enclosure reference.

251

A template for a business letter

WRITTEN COMMUNICATION FORMAT

Midshire Bank Plc


High Street
Assington
Berkshire AS 1 6EL
Mr Joe Davies
17 Goldthorpe Way
Assbury
Berkshire AS2 4WQ
12 April 200X
Dear Mr Davies
At Midshire Bank we try to provide banking facilities of the highest quality in order to accurately meet our
customers needs. To do this ti is essential that we listen to what our customers hafe to say. Wwe would
like you to help uus by giving us your opiinion of Midshrie Banks services.
We are asking an independent market research company. TMI Limited to interview a number of customers
over the next few weeks. TMI Limited is a reputabnle company and your individual responses will be
completely confidential to them, according to the Market Research Societys Code of conduct.
They will be co ducting the interviews by telephone and so an interviewer may telephone you at some point
over the next few weeks.
Because TMI Limited will choose who to overview, you might not be contacted in this instance. Ift yhour are,
we wouold vallue your contribution and hope you wil be able to help use if asked.
Yours Sincerely
Signature
Charles Gowers
Branch Manager.

252

A sample customer letter

WRITTEN COMMUNICATION FORMAT


MAKE-IT BUILDING SUPPLIERS
Churchyard Grove
Pickwick
Lancashire LU1 5TF
Tel: 0123 668791
Our ref: HBJ/abc
October 1st 20XX
The Timber Merchants Ltd
Station Road
Ripon
Yorkshire YU8 TR3
For the attention of Deborah Jones
Dear Ms Jones,
Account Number: 5690 Special order under invoice 123
Further to our last order, would you supply the following additional items:
1
20 metres to extra hard-wearing timber for fencing.
5.95 per metre excl.VAT=119
2
5 litres of creosote liquid in natural colour.
2.75 per litres excl.VAT=13.75
3
24 litres of indoor wood varnish in antique pine.
1.44 per litres excl VAT= 34.56
Balance
167.31
VAT on items
29.28
Total balance
196.59
The balance should be started on the above invoice and charged to our existing account. I would appreciate
delivery by November 15th, latest.
Yours sincerely,
Sign
Harold Jenkins
Purchasing Manager.

253

An order letter.

WRITTEN COMMUNICATION FORMAT


ULTIMATE COMPUTER COMPANY Ltd
3 THE Gateway
Hounslow
Middlesex TW15 6TU
Tel: 0181 967 6345
TRJ/abc
October 1st 20XX
Mr Andrew Collins
Marketing Communications Consultants
The Nook
Twinkle Lane
Beaconsfield
BUCKS DU18 74R
Dear Mr Collins
Ref: Computers of the World Exhibition, London, 20XX
I had the pleasure of using your professional services in helping us to prepare and
present at the above last year.
We are now in the process of planning to exhibit our new product range again this year and would like to know
whether you would offer us your services. I am pleased to enclose our latest catalogue.
Please contact me at the end of next week to arrange for a meeting at our offices.
I look forward to hearing from you.
Yours sincerely,
Timothy R. Jones
Marketing Manager
Enc. Catalogue of product range X.

254

A letter of enquiry.

WRITTEN COMMUNICATION FORMAT


BEAUTY POTIONS LTD
2-6 Staines Road
Windsor
Berkshire BK7 9LE
Tel: 01753 576423
JK/abc
October 1st 20XX
Variety Fragrances
10 Harrow Road
Wembley
Middlesex 8TU 65R
For the attention of Mr Gardiner
Dear Mr Gardiner,
On September 5th 20XX, we received your order 1112, together with the invoice, 2224.
You will note that the first item on the invoice is listed as 50. Fragance Irresistible, but unfortunately we received 50. Fragrance
Uncontrollable. A copy of the invoice is attached.
Please be kind enough to collect the wrong items and have them replaced by 50. Fragrance Irresistible at the same time.
I look forward to receiving the correct order by November 1st 20XX.
Sincerely,
Joanna Kemp
Sales and Purchasing Manager

Enc. Copy of invoice 2224

255

A letter of complaint

WRITTEN COMMUNICATION FORMAT


CATERING WHOLESALERS LTD
35 Redruth Avenue
Tunbridge
Kent TN15 UCI
T el: 01932 57311
HB/abc
October 1st 20XX
Mr R.Anderson
The Manager
The Restaurant
76 Sevenoaks Road
Sevenoaks
KENT
Dear Mr Anderson,
Thank you very much for your recent application for credit. I am pleased to inform you that this has been
approved.
Our terms and conditions are as follows:

A credit limit of 2000 is available for your establishment.

Invoices must be settled within 15days of the date of issue, after which an interest charge of 5%
will be levied on outstanding balances.
Yours sincerely,

Harry Bains
Credit Manager.

256

A letter approving credit

WRITTEN COMMUNICATION FORMAT


FINANCE and INSURANCE Co
The Causeway
Newcastle upon Tyne NN4 65T
Tel: 0191 35202
SB/abc
October 1st 20XX
The Membership Secretary
Chartered Institute of Marketing
Moor Hall
Cookham
Berks
Dear Sir/Madam,
Re: Caroline Taylor
I am pleased to support Ms Taylors application for membership of the Chartered Institute
of Marketing
Ms Taylor has been in our employment for 6 years working in the area of Direct Marketing.
I understand that she passed all her CIM examinations and will be pleased to receive
further benefit as a member of the CIM
Yours faithfully,l
Sheila Brown
Marketing Director.

257

A letter of recommendation

WRITTEN COMMUNICATION FORMAT

MEMO
Medical Software Ltd
To: Carole Francis(Sales and Marketing Director)
From: Clare White (Marketing Manager)
Copy to: Hannah Craven (secretary)
Subject: Software 20XX Exhibition, Amsterdam, December 1st 3rd
Date: October 1st 20XX
We have 8 weeks before the exhibition takes place and need to finalize the
details
of the follow-up campaign, particularly the role of our sales force.
Further to our meeting last week, we also need to discuss the sales promotion
initiatives to push our products following the exhibition.
Please confirm that a meeting on October 5th at 3pm in my office will be
convenient.

258

A memo

WRITTEN COMMUNICATION FORMAT

kasongwe
F0000000
2f07b5c3
Send now

Message Composition
Quote

Attach

Address

Stop

Subject: Click here to enter the subject: exhibition material


Addressing

Attachments

Mail To: asonjude


yahoo.co.uk
Cc: Click here to enter carbon copy recipientsJohn.brown@apt.co.uk

Dear Jane
Thanks for the opportunity to quote for the exhibition material job. I have produced some costings and draft
timescale based on our requirements. Please see the attachment. Ring me if you have any queries. I amount of the
office until Monday but I will ring you then to see if you want me to proceed with the
work.
Regards
Alex Kelly

259

An example of an email message.

WRITTEN COMMUNICATION FORMAT

SAFETY FIRST!
A Special First-AID Course designed to give You basic introduction
will be available free To all employees on the following dates.
October 1st 5-6pm
November 1st5-6pm
December 1st 5-6pm
The number of places is limited to 20 per class so early booking is
advisable.
Contact: Jane Slater, ext. 123

A notice

260

WRITTEN COMMUNICATION FORMAT

REPORT
TO: Denise Wood, Marketing Manager
FROM: Amy Mills, Marketing Assistant
DATE: 6 December 2005
GO EASY- THE CASE FOR A WEBSITE & ON-LINE BOOKING SERVICE

1.Introduction
2.Findings
3. Conclusions

261

An example of a formal report

WRITTEN COMMUNICATION FORMAT

PRINTMAN PRINTING COMPANY


Report on Office Telecommunications Facilities
To: Mark Scrivens, Managing Director
From: Jo Goodwin, Sales and Marketing Manager
Date: 2 December 2005
Introduction
Findings
Arguments for
1.
Arguments against
1.
Conclusions.
Recommendation
262

An example of an informal report