Elementary principle of

Marketing
1.2. Marketing Strategies
Definition
A marketing strategy is a process or model
that an individual or company focuses
its limited resources on the best
opportunities to increase sales and
thereby achieve a sustainable competitive
advantage (profit)
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 Cont.
• Marketing strategy includes all basic, short-term, and long-
term activities in the field of marketing that has the
fundamental goal of increasing sales and achieving a
sustainable profit
• As a small trader: Your marketing strategy is the way you
make sure you’re getting the maximum impact from your
limited marketing budget and time.
• For example, if there’s a single influencer (individual, group
or company) who touches all your customers and has a
significant impact on the way those customers try to solve
their problem... one of your strategies may be to focus on
building a strong relationship with that influential individual
or company
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 1.3. Consumer Behavior and Marketing mix
1.3.1 What is consumer behavior?
Consumer behavior is the study of consumers (individuals,
groups or organizations) and the processes they use to
choose, use (consume), and dispose of products and services
Example: Just image you’re a consumer and you have
decided to buy a Coca-Cola. Now! What are the various
factors responsible for your decision?. Along with your
external factors there is also an internal factor called as
behavior of an individual.

Therefore the study of this internal factors is very important

for the marketers

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 Cont.
‘’All marketing decisions are based on
assumptions and knowledge of consumer
behavior," (Hawkins and Mothersbaugh, 2007).

Researching consumer behavior is a complex

process, but understanding consumer behavior
is critical and of important to marketers

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 Importance of understanding consumer
behavior
• Provide value and customer satisfaction.
• Effectively target customers.
• Enhance the value of the company.
• Improve products and services.
• Create a competitive advantage(increase sales/profit
• Understand how customers view their products versus
their competitors’ products.
• Expand the knowledge base in the field of marketing,
• Apply marketing strategies toward a positive affect on
society

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 Factors and variables that influence the
behavior of consumers
“WHY HE/SHE WILL CHOOSE A
PRODUCT/BRAND OVER ANOTHER?
There are 4 main types of factors influencing
consumer behavior namely;
• cultural factors,
• social factors,
• personal factors and
• psychological factors
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(i) Culture factor

An individual will be influenced by his family, his friends,

his cultural environment or society that will “teach” him
values, preferences as well as common behaviors to
their own culture.

For a Product, it is important for a marketer to

understand and take into account the cultural factors
inherent/exist to each market or to each situation in
order to create the right marketing strategy and
product. As these will play a role in meeting the
perception, habits, behavior or expectations of
consumers
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(ii)Social factors

Social factors fall into three categories: reference

groups, family and social roles and status.
Reference groups and membership groups :
• The membership groups of an individual are social
groups to which he belongs and which will influence
him. The membership groups are usually related to
its social origin, age, place of residence, work,
hobbies, leisure, etc..
“It is generally observed that there is a common
consumption trends among the members of a same
group (Assey,2012)
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(iii)Personal factors:

• Decisions and buying behavior are obviously

also influenced by the characteristics of each
consumer.
Purchasing power and revenue:
• The purchasing power of an individual will
have, of course, a decisive influence on his
behavior and purchasing decisions based on
his income and his capital.

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 cont.
Lifestyle:
The lifestyle of an individual includes all of its activities,
interests, values ​and opinions.
Personality and self-concept:
• Personality is the set of specific characteristics of each
individual. It includes some traits such as confidence,
sociability, autonomy, charisma, ambition, openness to
others, shyness, curiosity, adaptability, etc..
• In order to attract more customers, many brands are
trying to develop an image and a personality that conveys
the traits and values ​- real or desired – of consumers they
are targeting.
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 Cont.
Age and way of life:
• A consumer does not buy the same products or services at 20 or 70
years. His lifestyle, values​​, environment, activities, hobbies and
consumer habits evolve throughout his life.
• The family life cycle of the individual will also have an influence on
his values, lifestyles and buying behavior depending whether he’s
single, bachelor etc.. As well as the region of the country and the
kind of city where he lives (large city, small town, countryside, etc..).
• For example, it is more than possible that consumers living in Dar es
Salaam do not have the same behavior and purchasing habits as the
ones in Bagamoyo.

A sole trader/retailer, should have a deep understanding and adapt to

these differences will be a real asset to increase sales

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(iv) Psychological factors

Psychological factors can be divided into 4

categories, namely:
a) motivation,
b) perception,
c) learning
d) beliefs and attitudes.
Motivation:
Motivation is what will drive consumers to develop a
purchasing behavior ‘’What motive behind’’? Motive
may be discount, suitability ,origin etc
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 Cont.
Perception:
Perception is the process through which an individual selects,
organizes and interprets the information he receives in order
to do something that makes sense. The perception of a
situation at a given time may decide if and how the person
will act.
Learning
This include level of education of the individual
Beliefs
Depending to his experiences, beliefs and personal
characteristics, an individual will have a different perception
from another.
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 1.3.2 Marketing mix
Is a planned mix of the controllable elements of
a product's marketing plan commonly termed
as 4Ps:Namely as product, price, place, and
promotion.

These four elements are adjusted until the right

combination is found that serves the needs of
the product's customers, while generating
optimum income.

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 Balance to marketing mix
When marketing their products an entrepreneur
needs to create a successful balance of:
• the right product
• sold at the right price
• in the right place
• using the most suitable promotion.

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 Conditions to create a right marketing mix
To create the right marketing mix, businesses have to meet the
following conditions:
• The product has to have the right features - for example, it
must look good and work well.
• The price must be right. Consumer will need to buy in large
numbers to produce a healthy profit.
• The goods must be in the right place at the right time. Making
sure that the goods arrive when and where they are wanted
is an important operation.
• The target group needs to be made aware of the existence
and availability of the product through promotion. Successful
promotion helps a firm to spread costs over a larger output.

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 1.4 Market Demand, Supply and Elasticity

Supply and demand is an economic model of

price determination in a market.
• It concludes that in a competitive market, the
unit price for a particular product, will vary
until it settles at a point where the quantity
demanded will equal the quantity supplied
resulting in an economic equilibrium for price
and quantity demanded and supplied.

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 Supply and Demand schedule

• A supply schedule is a table that shows the

relationship between the price of a good and
the quantity supplied.
• A demand schedule is table represents the
amount of some products that buyers are
willing and able to purchase at various prices

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 Determinants' of Demand and Supply
The determinants of demand are:
• Income.
• Tastes and preferences.
• Prices of related goods and services.
• Consumers' expectations about future prices
and incomes that can be checked.
• Number of potential consumers

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 Cont.

The determinants of supply are:

• Production costs: how many a goods costs to
be produced. Production costs are the cost of
the inputs; primarily labor, capital, energy and
materials.
• Firms' expectations about future prices
• Number of suppliers

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Demand and Supply Schedule
consider the following table

MARKET PRICE IN QUANTITY QUANTITY

REF. TSH DEMANDED SUPPLIED
(KG) (KG)

1 2,000 13 1
2 3,000 11 2
3 4,000 9 3
4 5,000 7 4
5 6,000 5 5
6 7,000 3 6
7 8,000 2 7
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 Supply and Demand Curve

• Supply Curve is curve slopping downwards

from right to left that reflecting the relationship
between price and quantity supplied.
• Demand Curve is the curve slopping
downwards from left to right that reflecting the
relationship between price and quantity
demanded.
Both the curves is depicted from Demand and
Supply Schedules

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Supply and Demand Curves

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 Equilibrium and Elasticity
Equilibrium Price
Equilibrium price is determined where the quantity
demanded is equal to the quantity supplied.
Market Equilibrium: A situation in a market when the
price ,is such that the quantity demanded by
consumers is correctly balanced by the quantity that
firms(Suppliers) wish to supply.
Elasticity
Elasticity Measure of the responsiveness/changes/shift
of demand and supply of a good or service to an
increase or decrease in its price

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