Chapter 9 - PPT (New)

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CHAPTER NINE
Marketing
BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

© Oxford Fajar Sdn. Bhd. (008974-T), 2012 9– 2
LEARNING OUTCOMES
In this chapter, you will learn to:

 Define marketing and identify the core marketing
concepts.
 Discuss the marketing management orientations.
 Describe the micro and macro-environmental forces
that can affect the company’s ability to serve customers.
 Define consumer market and name the four major
types/factors that can influence consumer buying
behaviour.
 Elaborate on the stages in the buyer decision process.

LEARNING OUTCOMES (cont.)
 Identify the steps in designing a customer-driven market

strategy: market segmentation and market targeting.
 Define product and the major classification of consumer
goods.
 Identify the decisions that the company will have to make
concerning the product.
 Describe the steps and marketing strategies of the
product life cycle.
 Define pricing and factors to be considered when setting
pricing.

 Define marketing channel and the key functions of

marketing channel.
 Identify the steps in the channel design decisions.
 Explain the types of retailers and their roles in the
distribution channel.
 Discuss the communication process.
 Set the total promotion budget and promotion mix
strategies.
 Describe the major decisions involved to develop
advertising programmes.
 Explain the role of public relations in the promotion mix.

 Identify the sales promotion campaigns that are being
developed.
 Discuss the steps in the personal selling process.
 Define direct marketing and the benefits to the buyers
and sellers.
 Discuss the major forms of direct marketing.

WHAT IS MARKETING?
Marketing is a process whereby individuals

or groups obtain what they need and want
through exchanging products, services and
value with others.

MARKETING ENVIRONMENT
• Micro-environment • Macro-environment
1. Company 1. Demographic
environment
2. Suppliers
2. Economic
3. Marketing environment
intermediaries 3. Natural environment
4. Customers 4. Technological
5. Competitors environment
6. Publics 5. Political environment
6. Cultural environment
CONSUMER MARKET
• All the individuals, groups and households who

buy goods or services for their own personal use.
• The five stages in a buyer decision process:

MARKETING MIX
• Refers to a mixture or blend of product, place

(distribution), promotion and pricing strategies
which are designed to create understanding and
satisfy exchanges with a target market.

DEFINING A PRODUCT
• Anything, both favourable and unfavourable,

that a person receives in an exchange between a
marketer and a customer.
• It is one component of the marketing mix.

CLASSIFICATION OF
CONSUMER PRODUCTS

BRANDING
• A brand is a name, term, symbol or

combination which can identify the sellers
product and differentiate them from the
competitors’ products.

BRANDING STRATEGIES
• Manufacturer’s brand: This is a brand created and

owned by a producer.
• Private brand: This is a brand created and owned
by a retailer of a product or service.
• Licensed brand: A licensed brand is where the
company sells its output or product under another
brand name.
• Co-branding: This is where two companies agree to
make and manufacture one product.

DEFINING PACKAGING
• The activities that design, shape and produce

the container or wrapper for a product.
• Three levels of packaging:
– Primary packaging
– Secondary packaging
– Shipping packaging

FUNCTIONS OF PACKAGING
• Self-service: The package performs many sales tasks

such as describing the ingredients and benefits of the
product.
• Consumer affluence: Consumers are willing to pay
extra for convenience of handling and dependable.
• Innovational opportunity: It means better and
improved product offering such as reusable package.
• Enhanced brand image and company: The
packaging can enhance the image of the product.

PRODUCT LIFE CYCLE

PRICING
• The amount of money charged for a product or

service that consumers buy with the exchange
for the benefits of having or using the product
or service.
• Approaches of pricing strategy:
– Value-based pricing
– Cost-based pricing
– Break-even analysis

COST-BASED PRICING
ILLUSTRATION

BREAK-EVEN ANALYSIS
Break-even point formula:
Total Fixed Cost
Price – Variable Cost per unit

FACTORS TO CONSIDER
WHEN SETTING PRICES

DISTRIBUTION
• As a set of interdependent organizations involved

in the process of making sure products or
services are available for the use of consumers or
businesses.

KEY FUNCTIONS PERFORMED
BY CHANNEL MEMBERS
• Research and information

• Promotion
• Contact
• Matching
• Negotiation
• Physical distribution
• Financing
• Risk taking

NUMBER OF CHANNEL LEVELS
• Channel 1
• Channel 2
• Channel 3 Wholesaler
• Channel 4

CHANNEL CONFLICT
• Channel conflict – occurs when channel members

disagree on roles, activities, or rewards.
• Types of conflict:
– Horizontal conflict: This occurs among firms at
the same channel level, e.g. conflict between
retailers and retailers.
– Vertical conflict: This occurs among firms at
different channel levels, e.g. conflict between
wholesalers and retailers.

CONVENTIONAL MARKETING
DISTRIBUTION CHANNELS
• This method is the traditional way where the

manufacturers, wholesalers and retailers work
independently where each is a separate business
trying to get their own profits.

VERTICAL MARKETING SYSTEM
• It is whereby the manufacturers and the

intermediaries such as the wholesalers and
retailers work as a team and act as one or a
unified system.

COMPARISON BETWEEN CONVENTIONAL
MARKETING DISTRIBUTION CHANNEL
AND VERTICAL MARKETING SYSTEM

CHANNEL DESIGN DECISIONS
1. Analyzing consumer needs

2. Setting channel objectives
3. Identifying major alternatives
• Types of intermediaries
• Number of marketing intermediaries
• Responsibilities of channel members
4. Evaluating major alternatives

RETAILING
• Activities which are involved in selling goods or

services directly to final consumers for their own
personal use.
• Types of retailers:
1. Specialty stores
2. Department stores
3. Supermarkets
4. Convenience stores
5. Off-price retailers
6. Superstores
MARKETING COMMUNICATIONS
MIX/PROMOTION MIX
• Marketing communications mix or promotion

mix consists of the advertising, personal selling,
sales promotion, and public relations a company
uses to pursue its advertising and marketing
objectives.

ELEMENTS IN THE
COMMUNICATION PROCESS
• Sender •Decoding
• Encoding •Response
• Message •Feedback
• Media •Noise
• Receiver

PROMOTION MIX STRATEGIES
• Push strategy: A push strategy involves ‘pushing’

the product through marketing channels to final
consumers.
• Pull strategy: In pull strategy, the producers will
use advertising and consumer sales promotions to
generate strong consumer demand for products. In
turn, the consumers will demand for the products
or services from the marketing intermediaries, who
will demand for them from the producers.

PROMOTION TOOLS
• Advertising
• Sales promotion
• Public relations
• Personal selling
• Direct marketing

MAJOR DECISIONS
IN ADVERTISING
1. Setting objectives
2. Setting the budget
3. Developing the advertising strategy
• Creating advertising messages
• Selecting advertising media
4. Evaluating advertising campaigns
5. Measuring sales effect

SALES PROMOTIONS
• Are short-term period and have the incentives

to encourage sales of a product or service.
• Types of sales promotion:
1. Consumer promotion
2. Trade promotion
3. Sales force promotion

CONSUMER PROMOTION TOOLS
• Samples
• Coupons
• Cash refunds (rebates)
• Patronage rewards
• Contests, games and sweepstakes

CONSIDERATIONS
WHEN DEVELOPING
SALES PROMOTION PROGRAMME
1. Size of incentive
2. Conditions for participation
3. Promotion and distribution of the sales
promotion programme
4. Length of the programme
5. Evaluation

PUBLIC RELATIONS
• Objective of public relations is to build good

relations with the company’s various publics by
building up a good corporate image.
• Functions of public relations:
– Press relation or press agency
– Public affairs
– Lobbying
– Investor relations

PUBLIC RELATIONS TOOLS
• Speeches
• Buzz marketing
• Corporate identity materials
• Mobile marketing

PERSONAL SELLING
• Personal selling is a direct communication

between buyers and sellers.
• Steps in a personal selling process:
1. Identify and qualify potential customers
2. Gather information
3. Approach customer
4. Present and demonstrate
5. Close
6. Follow-up

DIRECT MARKETING
AND CUSTOMER DATABASE
• Direct marketing: Is a direct one to one

connection with targeted consumers to obtain
response and build relationships with customers.
• Customer database: Is a collection of data of

customers which include the psychographic and
behavioral data. A good customer database can
build strong and lasting relationship with
customers.

FORMS OF DIRECT MARKETING


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All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

In this chapter, you will learn to:

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

 Identify the steps in designing a customer-driven market

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

 Define marketing channel and the key functions of

 Explain the role of public relations in the promotion mix.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Marketing is a process whereby individuals

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• All the individuals, groups and households who

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• Refers to a mixture or blend of product, place

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• Anything, both favourable and unfavourable,

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• A brand is a name, term, symbol or

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• Manufacturer’s brand: This is a brand created and

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• The activities that design, shape and produce

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• Self-service: The package performs many sales tasks

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• The amount of money charged for a product or

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Break-even point formula:

Total Fixed Cost

Price – Variable Cost per unit

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• As a set of interdependent organizations involved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• Research and information

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• Channel conflict – occurs when channel members

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• This method is the traditional way where the

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• It is whereby the manufacturers and the

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

1. Analyzing consumer needs

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• Activities which are involved in selling goods or

• Marketing communications mix or promotion

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• Push strategy: A push strategy involves ‘pushing’

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• Are short-term period and have the incentives

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

• Objective of public relations is to build good

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved