Role%of%Marketing%

Marketing"is"the"process"of"planning"and"executing"the"conception,"pricing,"promotion"and"
distribution"of"ideas,"goods"and"services"to"create"exchanges"that"satisfy"individual"and"
organisational"objectives."
"
A"more"simplified"definition"is"that"marketing"is"a"total"system"of"interacting"activities"designed"to"
plan,"price,"promote"and"distribute"products"to"present"and"potential"customers."
"

Strategic%Role%of%Marketing%Goods%and%Services%

A"business"main"financial"goal"is"profit'maximisation.""
! Profit"maximisation"occurs"when"there"is"maximum"difference"between"the"total"revenue"
coming"into"the"business"and"total"costs"being"paid"out"
"
To"develop"customer"awareness"and"demand,"and"thus"form"a"customer"base,"an"organised"marketing"
campaign"is"necessary,"starting"with"the"development"of"a"marketing"plan."Without"a"marketing"
strategy,"financial"disaster"is"inevitable."Many"new"inventions"become"commercial"failures"because"
they"have"not"been"marketed"adequately."
"
The$Marketing$Plan$
The"marketing"plan"is"a"document"that"lists"activities"aimed"at"achieving"particular"marketing"
outcomes"in"relation"to"goods"or"services."The"plan"provides"a"template"for"future"action"aimed"at"
reaching"business"goals,"such"as"profit"maximisation."
"
Profit'maximisation'='marketing'plan'focused'on'short7term'and'long7term'planning'
"
This"is"because:"

1)"The"marketing"plan"
outlines"the"strategies"to"
be"used"to"bring"the"buyer"
and"seller"together"

2)"The"core"of"marketing"
is"satisfying"existing"
customer"wants,"which"
should"lead"to"repeat"
sales"

3)"Marketing"is"the"
revenueIgenerating"
activity"of"any"business."
Nothing"is"achieved"until"
a"sale"is"made"

A"successful"business"develops"a"marketing"plan"based"on"careful"research"and"design."The"customer"
should"always"be"the"central"focus"of"the"marketing"plan."
"
The"business"needs"to"be"able"to"identify:"
! Where"the"market"is"
! Who"will"buy"the"product"
! Why"they"will"buy"the"product"
! How"often"they"will"buy"the"product"
"
"

Interdependence%with%Other%Key%Business%Functions%

The"marketing'concept'is"a"business"philosophy"that"states"that"all"sections"of"the"business"are"
involved"in"satisfying"a"customers"needs"and"wants"while"achieving"the"businesss"goals.""
"
The"marketing"manager"must"work"with"the"operations"manager"in"meeting"the"customers"demand,"
as"the"production"process"would"have"to"be"able"to"create"a"product"in"time"for"the"marketing"team"to"
advertise"it."Financial"planning"must"also"connect"with"the"marketing"plan"as"marketing"costs"money,"
and"therefore"finances"must"be"available"for"any"planned"marketing"strategy."Finally,"the"marketing"
manager"would"also"have"to"work"with"the"human"resources"manager"to"ensure"that"the"right"staff"is"
employed"to"create"the"good"or"service"that"is"desirable"to"customers."
"

Production,%Selling,%Marketing%Approaches%

$
The$Production$Approach$$1820s$to$1920s"
The"demand"for"products"exceeded"production"capabilities"of"many"businesses."Businesses"were"
normally"able"to"sell"their"output."Businesses"took"orders"and"delivered."Business"was"production"
orientated."
"
The$Sales$Approach$$1920s$to$1960s$
Productivity"increased"and"output"caught"up"with"demand."Mass"produced"products"came"onto"the"
market"and"competition"between"businesses"increased."Businesses"developed"the"sales"orientated"
approach."Businesses"increased"advertising,"and"made"use"of"radio"and"film."Sales"representatives"
were"hired"and"trained,"and"marketing"took"a"more"dominant"role."Even"though"marketing"was"
becoming"more"refined,"most"businesses"were"still"neglecting"the"needs"of"the"customer.""
"
The$Marketing$Approach:$Stage$One$$1960s$to$1980s$
The"marketing"approach"focuses"on"finding"out"what"customers"want""through"market"research""
and"then"satisfying"that"need."Australian"families"had"discretionary"income"post"WWII,"which"meant"
that"they"used"this"extra"income"to"satisfy"their"needs"and"wants"with"different"goods"and"servicers."
Producers"discovered"what"the"customers"were"interested"in,"and"based"their"business"around"the"
demand.""
"
The$Marketing$Approach:$Stage$Two$$1980s$to$present$
Corporate"Social"Responsibility"(CSR):"Marketing"managers"have"recently"started"to"act"upon"their"
CSR"due"to"external"pressure"from"customers,"etc.""influencing"the"marketing"plan"of"businesses."
"
Customer"Orientation:"Customer"orientation"refers"to"the"process"of"collecting"information"from"
customers"and"basing"marketing"decisions"and"practices"on"customers"wants"and"interests."
"
Relationship"Marketing:"Relationship"marketing"is"the"development"of"longIterm"and"costIeffective"
relationships"with"individual"customers."These"come"from"reward"programs,"customer"care"or"good"
after"sales"service""generates"repeat"sales."This"occurs,"as"it"is"not"always"easy"to"attract"new"
customers."

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Types%of%Markets%

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Resource"
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Mass"
Industrial"
"
"
"
Types"
"
of"
"
Markets"
"
"
"
Consumer"
Intermediate"
"
"
"
"
Niche"
"
"
"
"
A"market'is"defined"as"a"group"of"individuals,"organisations"or"both"that"
! Need"or"want"a"product"(goods"or"service)"
! Have"the"money"(purchasing"power)"to"purchase"the"product"
! Are"willing"to"spend"their"money"to"obtain"the"product"
! Are"socially"and"legally"authorised"to"purchase"the"product"
"
Resource$Market$
The"resource"market"consists"of"those"individuals"or"groups"that"are"engaged"in"all"forms"of"primary"
production,"including"mining,"agriculture,"forestry"and"fishing."
"
Industrial$Market$
The"industrial"market"includes"industries"and"businesses"that"purchase"products"to"use"in"the"
production"of"other"products"or"in"their"daily"operations."For"example,"Tip"Top"Bakery"buys"flour"to"
make"bread,"and"Sony"buys"plastics"and"metals"to"produce"televisions."
"
Intermediate$Market$
The"intermediate"market"consists"of"wholesalers"and"retailers"who"purchase"finished"products"and"
sell"them"again"to"make"a"profit.""
"
Consumer$Market"
Consumer"markets"consist"of"individuals""that"is,"members"of"a"household"who"plan"to"use"or"
consumer"the"products"they"buy."
"
Mass$market""in"mass"markets,"the"seller"massIproduces,"massIdistributes"and"massI
promotes"one"product"to"all"buyers."Basic"food"items,"electricity"and"water"are"three"current"
examples."
"
Niche$market$$A"niche"market,"also"known"as"a"concentrated"or"micro"market,"is"a"narrowly"
selected"target"market"segment."These"market"segments"consist"of"buyers"who"have"specific"
needs"or"lifestyles."

Influences%on%Marketing%
"
Customer$choice$(buying$behaviour)"refers"to"the"decisions"and"actions"of"customers"when"they"
search"for,"evaluate,"select"and"purchase"goods"and"services."
"

Factors%Influencing%Customer%Choice%

Psychological"
InVluences"

Economic"
InVluences"

Sociocultural"
InVluences"

Government"
InVluences"

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"
"
"
"
"
"
"
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"
$
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Psychological$Influences$
Psychological"factors"are"influences"within"an"individual"that"affect"his"or"her"buying"behaviour."There"
are"five"main"psychological"factors"influencing"customer"choice:"perception,"motives,"attitudes,"
personality"and"selfIimage,"and"learning."
"
Perception:"Perception"is"the"process"through"which"people"select,"organise"and"interpret"
information"to"create"meaning."Marketing"managers"are"extremely"aware"that"they"must"create"
a"positive"or"favourable"perception"about"their"product"in"the"mind"of"the"consumer""they"will"
not"normally"purchase"a"product"that"they"perceive"as"inferior."
"
Motives:"A"motive"is"the"reason"that"makes"an"individual"do"something""these"include:"
comfort,"health,"safety,"ambition,"taste,"pleasure,"fear,"amusement,"cleanliness"and"the"approval"
of"others."Advertising"attempts"to"motivate"the"customer"to"buy"the"product."
"
Personality$and$SelfLImage:"An"individuals"personality"is"the"collection"of"all"the"behaviours"
and"characteristics"that"make"up"that"person."For"example,"the"style"of"car,"clothing"or"
jewellery"that"a"person"buys"may"reflect"their"personality."An"individuals"selfIimage"relates"to"
how"a"person"views"himself"or"herself""we"all"have"an"image"of"who"we"are,"and"we"reinforce"
this"image"through"our"purchases."
"
Learning:"Learning"refers"to"changes"in"an"individuals"behaviour"caused"by"information"and"
experiences."For"example,"learning"occurred"the"first"time"a"customer"tasted"CocaICola."
Successful"marketing"strategies"may"assist"customer"learning"that"encourages"brand"loyalty"
(favourable"attitude"towards"a"single"brand"resulting"in"repeat"sales)."
"

Sociocultural$Influences$
Sociocultural"influences"are"forces"exerted"by"other"people"and"groups"that"affect"an"individuals"
buying"behaviour."There"are"four"main"sociocultural"factors:"social"class,"culture"and"subculture,"
family"and"roles,"and"reference"(peer)"group."
"
Social$Class:"Social"class"or"socioeconomic"status"refers"to"a"persons"relative"rank"in"society,"
based"on"his"or"her"education,"income"or"occupation."Social"class"influences"the"type,"quality"
and"quantity"of"products"a"customer"buys."
"
Culture$and$Subculture:"Culture"is"all"the"learned"values,"beliefs,"behaviours"and"traditions"
shared"by"a"society""this"influences"buying"behaviour"as"it"determines"what"people"wear,"what"
and"how"they"eat,"and"where"and"how"they"live."
"
Family$and$Roles:"Different"family"roles"influence"buying"behaviour""e.g."most"women"still"
make"buying"decisions"related"to"healthcare"products,"food"and"laundry"supplies."
"
Reference$(Peer)$Groups:"A"reference"or"peer"group"is"a"group"of"people"with"whom"a"person"
closely"identifies,"adopting"their"attitudes,"values"and"beliefs."The"rest"of"the"group"may"
influence"an"individuals"buying"behaviour""e.g."if"a"close"friend"tells"you"of"a"bad"experience"at"
a"particular"shop,"you"will"probably"change"buying"behaviour"based"on"this"information."
Alternatively,"if"friend"buys"expensive"clothes,"so"will"you."
"
Economic$Influences$
Economic"forces"influence"a"businesss"capacity"to"compete"and"a"customers"willingness"and"ability"to"
spend."
"
Boom:"A"boom"is"a"period"of"low"
unemployment"and"rising"incomes"and"
therefore"businesses"increase"their"
production"lines,"and"attempt"to"increase"
their"market"share."Customers"are"willing"
to"spend"and"therefore"marketing"
potential"is"large"during"this"time."
"
Recession:"A"recession"sees"
unemployment"reach"high"levels"and"
incomes"fall"dramatically."This"means"that"
customers"reduce"their"spending""and"
therefore"marketing"plans"should"stress"
the"value"and"usefulness"of"product."
"
"
Government$Influences$
Put"simply,"the"government"implements"a"variety"of"policies"at"different"times"to"influence"the"level"of"
economic"activity."These"policies"directly"or"indirectly"influence"business"activity"and"customers"
spending"habits,"and"therefore"will"influence"the"marketing"plan."
"
Laws"such"as"the"Competition'and'Consumer'Act'2010'(Cwlth),"Sale'of'Goods'Act'1923'(NSW)"and"the"
Fair'Trading'Act'1987'(NSW)"all"influence"marketing"decisions."
"
Governments"also"play"an"important"social"role"in"influencing"customers"purchasing"behaviour."Age"
restrictions"on"the"purchase"of"alcohol"and"tobacco"and"censorship"warnings"on"television"programs"
and"films"reflect"the"governments"role"in"promoting"social"responsibility"in"the"community."
"

Consumer%Laws%

Governments,"both"federal"and"state,"have"introduced"laws"to"improve"the"protection"and"rights"of"
consumers,"and"to"clarify"the"rights"and"responsibilities"of"businesses."

"

Competition$and$Consumer$Act$2010$
This"is"one"of"the"most"important"pieces"of"legislation"affecting"marketing"and"business"practices"
in"Australia."The"Act"has"two"major"purposes:"
"
1. To"protect"consumers"against"undesirable"practices,"such"as"misrepresenting"the"contents"
of"products,"their"place"of"production,"and"misleading"and"deceptive"advertising."
2. To"regulate"certain"trade"practices"that"restricts"competition."The"government"also"wants"
to"ensure"a"number"of"businesses"are"operating"at"any"one"time"in"the"same"market"to"
encourage"competition."
"
The"CCA"allows"the"court"to"impose"penalties"of"up"to"$1.1"million"for"companies"and"$220,000"
for"individuals"for"unconscionable%conduct."
"

Consumer%Laws%and%Specific%Marketing%Practices%
"

Refunds"and"
Exchanges"

Deceptive"and"
Misleading"
Advertising"

Price"
Discrimination"

Warranties"

Implied"
Conditions"

"
"

Deceptive$and$Misleading$Advertising"
False"or"misleading"advertising"is"a"method"still"used"by"some"businesses"despite"the"legislation"rendering"it"
illegal."Examples"of"deceptive"and"misleading"advertising"include:"
"
! Fine$print"(important"conditions"written"in"smallIsized"print"and"difficult"to"read)"
! Before$and$after$advertisements"(consumers"are"forced"to"fall"for"distorted"comparisons"where"the"
before"images"are"worsened"and"after"images"enhanced)"
! Tests$and$surveys"(unsubstantiated"claims"when"no"survey"has"been"conducted)"
! Country$of$origin"(cannot"lie"about"country"of"origin""destroys"authenticity)"
! Packaging"(the"size"and"shape"of"the"package"may"give"a"misleading"impression"of"contents)"
! Special$offer"(Ads"may"imply"that"a"special"offer"is"available"for"only"a"limited"period,"when"in"fact"the"
offer"is"continuously"available)"
"
Two"of"the"most"common"deceptive"and"misleading"advertising"techniques"are:"
"
Bait$and$Switch$Advertising:"This"involves"advertising"a"few"products"at"reduced"and,"therefore,"
enticing"prices"to"attract"customers."When"the"advertised"products"quickly"run"out,"customers"are"
directed"to"higher"priced"items."
"
Dishonest$Advertising:"Dishonest"advertising"is"when"an"advertisement"uses"words"that"are"
deceptive"or"claims"that"a"product"has"some"specific"quality"when"it"does"not."
"
Price$Discrimination$
Price"discrimination"is"the"setting"of"different"prices"for"a"product"in"separate"markets."The"difference"in"
price"is"possible"because:"
! The"markets"are"geographically"separated,"for"example"city"and"country"prices"
! There"is"product"differentiation"within"the"one"market,"for"example"different"electricity"prices"for"
domestic"and"business"users"
"
This"prohibition"also"applies"to"discounts"given,"credits,"rebates,"services"and"payment"arrangements."This"
means"that"a"business"cannot"give"favoured"treatment"to"some"customers."
Implied$Conditions$
The"Australian"Consumer"Law"established"consumer%guarantees""a"set"of"rights"and"remedies"for"defective"
goods"and"services."
"
Implied"conditions"are"the"unspoken"and"unwritten"terms"of"a"contract."The"most"important"implied"term"is"
acceptable"quality."A"product"is"of"acceptable"quality"if"it"is"for"the"purpose"for"which"is"being"sold,"acceptable"
in"appearance"and"finish,"free"from"defects,"safe"and"durable."
Warranties$
All"businesses"have"an"obligation"to"offer"customers"a"degree"of"protection"if"there"is"a"problem"with"the"
good."One"important"obligation"is"to"provide"a"warranty""a"warranty"is"a"promise"by"the"business"to"repair"
or"replace"faulty"products."The"law"requires"businesses"to"clearly"state"the"terms"and"conditions"of"the"
warranty."
"
"Refunds$and$Exchanges$
A"business"is"required"by"law"to"offer"a"refund:"
! If"the"products"provided"are"faulty"
! Do"not"match"the"description"or"a"sample"
! Fail"to"do"the"job"they"were"supposed"to"do"
"
There"is"no"obligation"to"offer"a"refund"if"the"customer"has"simply"changed"their"mind,"has"found"the"same"
product"at"a"cheaper"price"in"another"store,"or"damage"has"occurred"after"the"purchase"was"made."
"

Ethical%Influences"

Critics"of"marketing"argue"that"it"lacks"a"strong"code"of"professional"conduct"and"sometimes"blurs"the"
lines"between"what"is"ethically"right"and"wrong."The"main"ethical"criticisms"of"marketing"include:"
"
! Creation$of$needs$$materialism:'Businesses"use"sophisticated"and"powerful"promotional"
strategies"to"persuade"and"manipulate"customers"to"buy"their"products""meeting"an"
individuals"desire"to"constantly"acquire"possessions.""
! Stereotypical$images$of$males$and$females:"Many"ads"follow"stereotypes"of"men"and"women"
doing"strong"and"weak"jobs"respectively."
! Use$of$sex$to$sell$products:"Often"an"overuse"of"sexual"themes"and"connotations"to"sell"
products."
! Product$Placement:"The"inclusion"of"advertising"in"entertainment"is"a"promotion"strategy"
referred"to"as"product"placement."
"
Truth$and$Accuracy$in$Advertising$
! False"or"misleading"advertising"is"not"only"unethical,"it"is"also"illegal"
! If"the"marketer"uses"a"word,"attempting"to"knowingly"mislead"customers,"this"would"be"
classified"as"unethical"behaviour"
! E.g."a"business"may"use"the"term"special""to"a"customer"that"means"reduced"price"while"the"
business"may"interpret"the"word"to"mean"that"the"product"is"distinct"or"unique."
"
"
Untruths$Due$to$Concealed$Facts$
Exaggerated$Claims$
"
! The"unethical"practice"of"concealed"
! Exaggerated"claims"(puffery)"cannot"
"
facts""pieces"of"information"
be"proved"
"
purposefully"omitted"from"an"
! E.g."a"claim"that"a"certain"shampoo"is"
"
advertisement""can"severely"harm"
superior"to"any"other"on"the"market"
"
the"trust"customers"have"in"a"
cannot"be"confirmed"by"consumers"
"
product"or"a"business."
"
"
"
"
"
Vague$Statements$
Invasion$of$Privacy$
"
! Vague"statements""statements"using"
! Ethical"issues"also"include"the"
"
words"so"ambiguous"that"the"
tracking"of"web"users"and"using"this"
"
consumer"will"assume"the"
information"to"target"them"with"
"
advertisers"intended"message""are"
advertisements."Collection"of"data"in"
"
another"type"of"unethical"
this"way"may"breach"consumer"
"
advertising."
privacy."
"
"
Products$That$May$Damage$Health$
! Marketers"have"been"heavily"criticised"by"consumer"and"health"groups"for"promoting"products"
that"damage"health,"especially"junk"food."
! SocialInetworking"sites"are"used"by"marketers"to"digitally"advertise"junk"food"to"children."
"
Engaging$in$Fair$Competition$
! There"may"be"a"temptation"for"marketers"to"engage"in"unfair"strategies,"which"ultimately"result"
in"consumer"exploitation."
! Marketers"can"use"a"corporate"ethical"marketing"policy"to"help"ensure"the"business"is"engaging"
in"fair"competition."
"
Sugging:$
! Sugging,"Selling"Under"the"Guise"of"a"Survey""is"not"illegal,"but"it"raises"several"ethical"issues"
including"invasion"of"privacy"and"deception."

Marketing%Process"
The"marketing"process"consists"of"the"steps"involved"in"developing"a"marketing"plan."
"
"

%
1)"Situational"
Analysis"
%
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6)"
%
Implementation,"
%
Monitoring"and"
Controlling"
%
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5)"Develop"
Marketing"
%
Strategies"
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4)"Identify"
Target"Markets"
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Situational%Analysis%%SWOT%&%Product%Lifestyle%

2)"Market"
Research"

3)"Establish"
Market"
Objectives"

The"most"crucial"step"of"the"marketing"plan"is"that"management"has"a"precise"understanding"of"the"
businesss"current"position"and"a"clear"picture"of"where"it"is"heading."For"this,"a"situational"analysis"
must"be"undertaken."
$
SWOT$(Strengths,$Weaknesses,$Opportunities$and$Threats)$Analysis$
A"SWOT"analysis"involves"the"identification"and"analysis"of"the"internal"strengths"and"weaknesses"of"
the"business,"and"the"opportunities"in,"and"threats"from,"the"external"environment."It"provides"the"
information"needed"to"complete"the"situational"analysis"and"gives"a"clear"indication"of"the"businesss"
position"compared"with"its"competitors."
"
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Product$Life$Cycle$
The"product"life"cycle"consists"of"the"stages"a"product"passes"through:"introduction,"growth,"maturity"
and"decline."
"
Introduction$Stage:$
The"business"tries"to"increase"consumer"awareness"and"build"a"market"share"for"the"new"product."
! Product"brand"and"reliability"are"established"
! Price"is"often"lower"than"competitors"
! Promotion"directed"at"early"buyers""and"communication"educate"potential"customers"
! Distribution"is"selective""consumers"form"an"acceptance"of"the"product"
"
Growth$Stage:$
The"producers"of"the"product"actively"pursue"brand"acceptance"and"market"share."
! Product"quality"is"maintained"and"improved"and"support"services"may"be"added"
! Price"per"unit"of"production"is"maintained"I"increased"customer"demand"and"market"share"
! Promotion"now"seeks"a"wider"audience"
! Distribution"channels"are"increased"as"the"product"becomes"more"popular"
"
Maturity$Phase:$
Sales"plateau"as"the"market"becomes"saturated:"
! Product"features"and"packaging"try"to"differentiate"
! Price"may"need"to"adjust"downwards"to"hold"off"competitors"
! Promotion"continues"to"suggest"the"product"is"tried"and"true""the"best"
! Distribution"incentives"may"need"to"be"offered"to"encourage"preference"over"rival"products"
"
Decline$Stage$
Sales"begin"to"decline"as"the"business"faces"several"options:"
! Product"maintained"with"some"improvements"or"rejuvenation"
! Price"is"reduced"to"sell"the"remaining"stock"
! Promotion"discontinues"
! Distribution"channels"reduced"and"product"offered"to"a"loyal"segment"of"market"
"
"
"
Products"end"for"various"reasons:"
"
" Changing"public"perception"of"what"is"fashionable"
"
" New"technologies"
"
" New"products"reduce"demand"for"older"ones"
"
" Fluctuations"in"level"of"economic"activity"
"
" Environmental"issues"
"
"
"
"

%
%
%
%
%
%
%
%
%
%

Market%Research%

Market"research"is"the"process"of"systematically"collecting,"recording"and"analysing"information"
concerning"a"specific"marketing"problem."
"
MINIMISING%RISK%IS%THE%MAIN%PURPOSE%OF%MARKET%RESEARCH%
"
By"collecting"and"assessing"information"about"the"needs"and"wants"of"consumers,"a"more"accurate"and"
responsive"marketing"plan"can"be"designed"and,"therefore,"reduce"the"risk"of"market"failure"
"
There"are"three"main"steps"of"the"market"research"process:"
"
Determining$Information$Needs"
Information"is"useful"if"it:"
" Results"in"marketing"strategies"that"meet"the"needs"of"the"businesss"target"market"
" Assists"the"business"to"achieve"its"marketing"objectives"
" May"be"used"to"increase"sales"and"profits"
"
The"information"collected"must"be"relevant"to"the"issue"or"problem"being"investigated."
"
Data$Collection$$Primary$and$Secondary$Sources$
Marketing"data"refers"to"the"information""usually"facts"and"figures""relevant"to"the"defined"
marketing"problem."There"are"two"types"of"data:"primary"and"secondary"data."
"
Primary$Data:""
The"main"advantage"of"primary"data"is"that"their"collection"is"directed"at"solving"a"specific"marketing"
problem."There"are"three"main"methods"used"to"gather"primary"data:"
"
1) The%Survey%Method:"These"include"personal"interviews,"focus"groups,"electronic"methods"of"
collection"and"questionnaires."The"benefit"of"a"survey"is"that"it"gathers"customers"opinions.""
"
2) The%Observation%Method:"Observation"involves"recording"the"behaviour"of"customers""the"
actions"of"the"customers"are"systematically"observed."Information"may"be"gathered"through"
personal"observation"(researcher"posing"as"customer)"or"electronic"observation"(using"camera"
or"counting"machines)."
"
3) The%Experiment%Method:"Experiments"involve"gathering"data"by"altering"factors"under"
tightly"controlled"conditions"to"evaluate"cause"and"effect."
"
Secondary$Data:""
Secondary"data"comprises"information"that"has"already"been"collected"by"some"other"person"or"
organisation."For"example,"census"data"and"household"expenditure"surveys"gathered"by"government"
and"private"organisations."There"are"two"types"of"secondary"data:"
"
! Internal%Data:"Information"that"has"been"already"collected"from"internal"sources""i.e."from"
inside"the"business."E.g."customer"feedback,"sales"and"management"reports,"and"research"
reports."
"
! External%Data:"This"is"published"data"from"sources"outside"the"business""e.g."magazines,"
industry"association"newsletters,"Internet"sources"and"private"data"collection"agencies,"ABS."
"
$
$
$
$

Data$Analysis$and$Interpretation$
! Once"the"data"has"been"gathered,"conclusions"need"to"be"drawn.""
! Statistics"are"processed"to"determine"if"responses"show"trends"or"patters"that"can"be"used"in"
the"business.""
! The"first"step"is"to"tabulate"the"data"and"use"the"method"of"crossItabulation.""
! For"example"crossItabulation"could"show"how"men"and"women"display"different"shopping"
habits,"or"the"differences"between"the"purchasing"behaviour"of"high"and"lowIincome"earners."
"

Establishing%Marketing%Objectives%

Marketing"objectives"are"the"realistic"and"measurable"goals"to"be"achieved"through"the"marketing"
plan."Three"common"marketing"objectives"include:"
"
"
Increasing"
"
market"
"
"
share"
"
"
"
"
Three"
"
Common"
"
Marketing"
"
Objectives"
Expanding"
"
the"
Maximising"
"
product"
"
customer"
range"
"
service"
Increasing$Market$Share$
Market"share"refers"to"the"businesss"share"of"the"total"industry"sales"for"a"particular"product."
Increasing"market"share"is"an"important"marketing"objective"for"businesses"that"dominate"the"market,"
because"small"market"gains"often"translate"into"large"profits."
"
Expanding$the$Product$Mix$
The"total"range"of"products"offered"by"a"business"is"referred"to"as"the"businesss"product"mix."
Businesses"wish"to"expand"their"product"mix"as"this"will"increase"profits"in"the"long"term"due"to"
changing"customer"tastes"and"preferences."Each"item"in"a"product"line"should"attempt"to"satisfy"the"
needs"of"different"target"markets."
"
Maximising$Customer$Service$
Customer"service"means"responding"to"the"needs"and"problems"of"the"customer."High"levels"of"
customer"service"will"result"in"improved"customer"satisfaction"and"a"positive"reaction"from"
customers."This"leads"to"a"solid"customer"base"and"possibility"of"repeat"purchases.""

"

The"strategies"a"business"can"use"to"maximise"customer"service"include:"
! Asking"customers"what"they"want"
! Training"employees"and"rewarding"them"for"excellent"customer"service"
! Anticipating"market"trends"by"conducting"research"
! Finding"out"what"competitors"are"offering"and"then"reviewing"the"product"mix"
! Establishing"and"maintaining"longIterm"relationships"with"customers"
! Encouraging"employees"to"focus"their"attention"on"customers"needs"
"

Identifying%Target%Markets%

A"target"market"is"a"group"of"present"and"potential"customers"to"which"a"business"intends"to"sell"its"
product."The"customers"within"the"target"market"share"similar"characteristics"such"as"age,"income,"
lifestyle,"location"and"spending"patterns."A"primary"target"market"is"the"market"segment"at"which"
most"of"the"marketing"resources"are"directed."A"secondary"target"market"is"usually"a"smaller"and"less"
important"market"segment."
"
This"occurs"because"the"business"is"able"to:"
! Use"its"marketing"resources"more"efficiently"="more"cost"effective"and"time"efficient"
! Promotion"material"is"more"relevant"to"the"customers"needs"
! Better"understand"the"consumer"buying"behaviour"of"the"target"market"
! Collect"data"more"effectively"and"make"comparisons"within"the"target"market"over"time"
! Refine"the"marketing"strategies"used"to"influence"customer"choice"
"
Businesses"can"choose"on"of"three"approaches"to"identifying"and"selecting"a"consumer"target"market."
"
Mass$Marketing$Approach$
In"a"mass"market,"the"seller"massIproduces,"massIdistributes"and"massIpromotes"one"product"to"all"
buyers."The"mass"marketing"approach"assumes"that"individual"customers"in"the"target"market"have"
similar"needs.""
! One"type"of"product"with"little"or"no"variation,"one"promotional"program"aimed"at"everyone,"
one"price,"and"one"distribution"system"used"to"reach"all"customers"
"
Mass$Segmentation$Approach$
Market"segmentation"occurs"when"the"total"market"is"subdivided"into"groups"of"people"who"share"one"
or"more"common"characteristics."Segmenting"a"market"enables"a"business"to"design"a"marketing"plan"
that"meets"the"needs"of"a"relatively"uniform"group."
"
Niche$Market$Approach$
In"a"sense,"the"niche"market"is"a"segment"within"a"segment,"or"a"microImarket."For"example,"an"
exclusive"fashion"boutique"can"carve"out"a"niche"market"and,"therefore,"avoid"direct"competition"with"
large"department"stores."
"

Developing%Marketing%Strategies%

Marketing"strategies"are"actions"undertaken"to"achieve"the"businesss"marketing"objectives"through"
the"marketing"mix.""
A"business"has"control"over"the"four"Ps"and"uses"them"to"reach"its"target"market.""
"
Product:"This"element"involves"the"business"deciding"which"product"to"make,"and"determining"
features"such"as"the"products"quality,"packaging/labelling,"design,"brand"name"and"guarantee."
"
Price:"Selecting"the"correct"price"can"be"difficult."The"major"pricing"decision"is"whether"to"set"a"price"
above,"below"or"about"even"with"the"competitors"price."
"
Promotion:"A"promotion"strategy"details"the"methods"to"be"used"by"a"business"to"inform,"persuade"
and"remind"customers"about"its"products."Main"forms"of"promotion"include"advertising,"personal"
selling"and"relationship"marketing,"sales"promotion,"publicity"and"public"relations."Technology"has"
had"major"impacts"on"how"businesses"promote"their"products."
"
Place/Distribution:"The"channels"of"distribution"are"the"ways"of"getting"the"product"to"the"customer."
This"process"usually"involves"a"number"of"intermediaries"such"as"the"wholesale"or"retailer."The"
intermediaries"chosen"will"determine"how"widely"the"product"will"be"distributed."E.g."Louis"Vuitton"
and"Gucci"only"have"a"few"selected"locations,"whereas"CocaICola"is"available"everywhere"around"the"
world."

Implementation,%Monitoring%and%Controlling%

"
Implementing$the$Marketing$Plan$
Implementation"is"the"process"of"putting"the"marketing"strategies"into"operation."Implementation"
involves"the"daily,"weekly"and"monthly"decisions"that"have"to"be"made"to"make"sure"the"plan"is"
effective."
"
Monitoring$and$Controlling$the$Market$Plan$
Monitoring"means"checking"and"observing"the"actual"progress"of"the"marketing"plan."The"information"
collected"during"the"monitoring"stage"is"now"used"to"control"the"plan."Controlling"involves"the"
comparison"of"planned"performance"against"actual"performance"and"taking"corrective"action"to"make"
sure"the"objectives"are"attained."
"
STEPS$INVOLVED$IN$THE$CONTROL$PROCESS:$
$
1)$Developing$a$Financial$Forecast$
A"business"must"develop"a"financial"forecast"that"details"the"costs"and"revenues"for"each"strategy."By"
measuring"the"sales"potential"and"revenue"forecasts"(benefits)"for"each"strategy,"and"comparing"these"
with"the"anticipated"expenditures"(costs),"a"business"is"in"the"best"position"to"decide"how"to"allocate"
its"marketing"resources."
"
Developing"a"financial"forecast"requires"two"steps:"
1. Cost'estimate:"how"much"is"the"marketing"plan"expected"to"cost?"
2. Revenue'estimate:"how"much"revenue"(sales)"is"the"marketing"plan"expected"to"generate?"
"
2)$Comparing$Actual$and$Planned$Results$
Three"key"performance"indicators"used"to"measure"the"success"of"the"marketing"plan"are:"
1. Sales"analysis"
2. Market"share"analysis"
3. Marketing"profitability"analysis"
"
Sales%Analysis%
A"sales"analysis"uses"sale"data"
to"evaluate"a"businesss"
current"performance"and"the"
effectiveness"of"a"marketing"
strategy."
"
Strength""I"sales"figures"are"
relatively"inexpensive"to"
collect"and"process."
"
Weakness""data"for"sales"
revenue"do"not"reveal"the"
exact"profit"level."

Market%Share%Analysis%
By"undertaking"a"market"
share"analysis,"a"business"is"
able"to"evaluate"its"marketing"
strategies"as"compared"with"
those"of"its"competitors."
"
The"evaluation"can"reveal"
whether"changes"in"total"sales"
have"resulted"from"the"
businesss"marketing"
strategies"or"have"been"due"to"
some"uncontrollable"external"
factor."

Marketing%Profitability%
Analysis%
Using"a"marketing"
profitability"analysis,"the"
business"breaks"down"the"
total"marketing"costs"into"
specific"marketing"activities,"
such"as"advertising,"transport,"
administration,"order"
processing"and"so"on."
"
By"comparing"the"costs,"a"
marketing"manager"can"assess"
the"effectiveness"of"each"
activity."

"
3)$Revising$the$Marketing$Strategy$
Once"the"results"of"the"sales,"market"share"and"profitability"analysis"have"been"calculated,"the"
business"is"now"in"a"position"to"assess"which"objectives"are"being"met"and"which"are"not."Based"on"
this"information,"the"marketing"plan"can"be"revised"(modified)."There"are"three"different"ways"to"
revise"the"marketing"strategy:"
"

Changes%in%the%Marketing%Mix%
The"marketing"mix"will"
constantly"need"to"be"revised."
Changes"that"could"be"
introduced"include:"
! Product"modifications"
! Price"modifications"
! Promotion"
modifications"
! Place"modifications"

"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"
"

New%Product%Development%
If"a"business"wants"to"achieve"
longIterm"growth,"it"must"
continually"introduce"new"
products."For"example,"if"Sony"
had"stopped"product"
development"at"the"transistor"
radio,"it"would"probably"be"out"
of"business"today."
"

Product%Deletion%
A"business"will"have"to"
eliminate"some"lines"of"
products."This"is"called"product"
deletion."Outdated"products"
may"create"an"unfavourable"
image"and"this"negativity"may"
rub"off"on"other"products"sold"
by"the"business."
"

Marketing%Strategies%
"
Marketing%Segmentation%

Marketing"segmentation"involves"dividing"the"total"markets"into"segments."Once"the"market"has"been"
segmented,"the"marketing"manager"selects"one"of"these"segments"to"become"the"target"market."
"
Segmenting$Consumer$Markets$
The"consumer"market"can"be"segmented"according"to"four"main"variables."

Demographic"

Geographic"

Psychographic"

Behavioural"

Demographic$Segmentation:"Demographic"segmentation"is"the"process"of"dividing"the"total"market"
according"to"particular"features"of"a"population,"including"the"size,"age,"sex,"income,"cultural"
background"and"family"size."E.g."energy"drink"Monster"is"targeted"at"15I35"year"old"males."
"
Geographic$Segmentation:"Geographic"segmentation"is"the"process"of"dividing"the"total"market"
according"to"geographic"locations."Different"geographical"locations"have"different"needs,"tastes"and"
preferences."
"
Psychographic$Segmentation:"Psychographic"segmentation"is"the"process"of"dividing"the"total"
market"according"to"personality"characteristics,"motives,"opinions,"socioeconomic"group"and"
lifestyles."A"business"would"research"a"consumers"brand"preferences,"favourite"music,"radio"and"
television"programs,"reading"habits,"personal"interests"and"hobbies,"and"values."
"
Behavioural$Segmentation:$Behavioural"segmentation"is"the"process"of"dividing"the"total"market"
according"to"the"customers"relationship"to"the"product."A"total"market,"for"example,"may"be"divided"
into"users"and"nonusers."Users"can"then"be"classified"as"heavy,"moderate"or"light.""
"

Differentiation%and%Positioning%of%Product/Service%

"
Points$of$Differentiation$
Four"important"points"of"differentiation"are"customer"service,"environmental"concerns,"convenience,"
and"social"and"ethical"issues."
"
Customer$Service:"Consumers"expect"a"high"level"of"customer"service""especially"preIsales"and"afterI
sales."Customer"service"also"includes"the"presentation"of"the"premises,"the"atmosphere,"or"the"range"of"
products"that"set"a"business"apart"and"capture"the"consumers"interest."
"
Environmental$Concerns:"People"are"becoming"more"concerned"with"quality"of"life"issues,"especially"
the"physical"environment."Businesses"that"create"pollution"may"risk"losing"customers;"and"vice"versa."
"
Convenience:"Because"todays"consumers"are"busy,"they"will"often"select"products"that"are"convenient"
to"use."For"example,"businesses"have"introduced"frozen"meals"because"many"consumers"do"not"have"a"
lot"of"time"for"meal"preparation."
"
Social$and$Ethical$Issues:"Ethical"consumerism"provides"businesses"with"opportunities"to"satisfy"the"
demands"of"this"growing"number"of"consumers."Consumers"appreciate"if"products"or"brands"do"not"
exploit"workers,"producers"or"the"environment."
"
$

Product/Service$Positioning$
Product/service"positioning"refers"to"the"technique"in"which"marketers"try"to"create"an"image"or"
identity"for"a"product/service"compared"with"the"image"of"competing"products"or"services."The"
business"will"decide"on"the"image"it"wishes"to"create"for"a"product/service"and"will"use"other"elements"
of"the"marketing"mix"to"shape"and"maintain"this"image."This"will"be"achieved"through"the"
product/services"name,"price,"packaging,"styling,"promotion"and"channels"of"distribution."Prada,"for"
example,"portrays"an"image"of"sophistication"and"luxury."
"

Products%%Goods%and/or%Services%

! Goods"are"real"objects"that"can"be"touched"and"owned;"they"are"tangible"
! Services"are"for"our"use"or"enjoyment;"they"are"intangible"

"
Product$Branding$
A"brand"is"a"name,"term,"symbol,"design"or"any"combination"of"these"that"identifies"a"specific"product"
and"distinguishes"it"from"its"competition."
Benefits$of$Branding$
Branding"helps"consumers:"
! Identify"the"specific"products"they"like"
! Evaluate"the"quality"of"products"
! Reduce"their"level"of"perceived"risk"of"purchase"
! Gain"a"psychological"reward"that"comes"from"purchasing"a"brand""symbolises"status"and"
prestige"
"
Branding"helps"businesses:"
! Gain"repeat"sales"because"consumers"recognise"the"businesss"products"
! Introduce"new"products"onto"the"market"because"consumers"are"already"familiar"with"the"
brands"
! With"their"promotional"activities"because"the"promotion"of"one"product"indirectly"promotes"
other"products"with"the"same"brand"
! Encourage"customer"loyalty"
"

"
Branding$$Symbols$and$Logos$
A"brand"symbol"or"logo"is"a"graphic"representation"that"identifies"a"business"or"product."Some"
businesses"encourage"the"instant"recognition"of"their"brand"symbol"rather"than"their"brand"name."

"
Branding$Strategies$
! Brands"are"usually"classified"according"to"who"owns"them""e.g."Kraft"foods"and"Billabong"
clothing"
! A"private"or"house"brand"is"one"that"is"owned"by"a"retailer"or"wholesaler""e.g."Myer"sells"
products"from"its"own"label,"including"Reserve,"Blaq,"Urbane,"etc."
! Generic"brands"are"products"with"no"brand"name"at"all""e.g."Home"Brand,"Select"(Woolworths)"
"
Packaging$
Packaging"involves"more"than"simply"putting"the"product"in"a"container"or"placing"a"wrapper"around"
it."Packaging"involves"the"development"of"a"container"and"the"graphic"design"for"a"product."
"
Packaging:"
! Preserves"the"product"
! Protects"the"product"from"damage"or"tampering"
! Attracts"consumers"attention"
! Divides"the"product"into"convenient"units"
! Assists"with"the"display"of"the"product"
! Makes"transportation"and"storage"easier"
"
Apart"from"performing"these"practical"functions,"packaging"also"acts"as"a"form"of"communication."For"
example,"consumers"see"certain"colours"and"draw"conclusions""red"soft"drink"would"mean"cola."
Furthermore,"the"shape"of"the"packaging"can"become"part"of"the"product"itself."
"
Labelling$
Labelling"is"the"presentation"of"information"on"a"product"or"its"package."Marketers"can"use"labels"to"
promote"other"products"or"to"encourage"proper"use"of"products"and"therefore"greater"consumer"
satisfaction"with"products."
"

Price%and%Pricing%Methods%

Price"refers"to"the"amount"of"money"a"customer"is"prepared"to"offer"in"exchange"for"a"product."
! A"price"set"too"high"="lost"sales"
! A"price"set"too"low"="gives"customers"the"impression"that"the"product"is"cheap"and"nasty"
"
However,"once"the"product"is"differentiated,"businesses"attempt"to"gain"some"control"over"the"price."
"
Pricing$Methods$
There"are"three"main"pricing"methods,"which"factor"in"both"internal"and"external"factors:"competition"
in"the"marketplace,"government"regulations,"and"the"location"of"the"product"on"its"life"cycle"and"the"
level"of"economic"activity."The"main"pricing"methods"are:"
$
$
CostIBased"
MarketIBased"
CompetitionI
$
(MarkIUp)"
Pricing"
Based"Pricing"
$
Pricing"
$
$
$
$
$
$
$
$
$
$

CostLBased$(MarkLUp)$Pricing$
"
As"a"starting"point,"the"business"determines"the"total"cost"of"producing"(or"purchasing)"one"unit"
of"the"product."

The"business"then"adds"an"amount"to"cover"the"additional"costs"(overheads"such"as"interest"
payments,"insurance,"transport)"and"to"also"provide"an"adequate"proVit"margin.""

That"amount"is"referred"to"as"the"markIup"and"is"usually"expressed"as"a"percentage."

"
The"total"of"the"cost"plus"the"markIup"is"the"selling"price"of"the"product."The"formula"is:"
"
Major"drawbacks:"
! Difficulty"in"accurately"determining"an"appropriate"markIup"percentage"
! The"product"is"priced"after"production"and"associated"costs"are"incurred"without"taking"into"
account"the"other"elements"of"the"marketing"mix"or"the"state"of"the"market"
"
MarketLBased$Pricing$
Business"sometimes"set"prices"according"to"the"level"of"supply"and"demand."
! When"Demand>Supply"="Price"goes"up"
! When"Supply>Demand"="Price"goes"down"
"
CompetitionLBased$Pricing$
Businesses"need"to"consider"the"competition"when"making"their"pricing"decisions."CompetitionIbased"
pricing"is"where"the"price"covers"costs"and"is"comparable"to"the"competitors"price."Once"a"business"
has"established"a"base"price,"it"can"then"decide"to"choose"a"price"either:"
! Below"competition"
! Equal"to"competition"
! Above"competition"
"
Price"
Pricing$Strategies$
Skimming"
Once"the"basic"price"has"been"set"using"the"
preferred"pricing"method(s),"the"business"
then"fineItunes"this"price"in"line"with"its"
pricing"strategy."
"
Price$Skimming$
" Price"skimming"occurs"when"a"
Pricing"
Price"
Price"Points"
Strategies"
Penetration"
business"charges"the"highest"possible"
price"for"the"product"during"the"
introduction"stage"of"its"life"cycle.""
" The"objective"is"to"recover"the"costs"of"
research"and"development"as"quickly"
as"possible,"before"competition"enters"
the"market.""
" Consumers"are"willing"to"pay"a"high"
Loss"Leader"
price"for"a"products"novelty"features"

because"of"the"prestige"and"status"that"ownership"gives.$
"
Price$Penetration$
" Price"penetration"occurs"when"a"business"charges"the"lowest"price"possible"for"a"product"in"an"
attempt"to"achieve"a"large"market"share"for"a"product."
" The"objective"is"to"sell"a"large"number"of"products"during"the"early"stages"of"the"life"cycle"and"
thus"discourage"competitors"from"entering"the"market"
" Main"disadvantage"of"this"is"that"it"is"more"difficult"to"raise"prices"significantly"than"it"is"to"
lower"them"
"
Loss$Leader$
" A"loss"leader"is"a"product"sold"at"or"below"cost"price"
" This"is"done"to"attract"customers"to"the"shop"
" The"psychology"behind"this"is"that"customers"will"buy"more"products"once"in"the"store"
" The"business"can"recover"the"loss"on"the"lowIprice"item"from"the"sale"of"the"other"items"
" This"strategy"is"often"used"when"the"business:"
o Is"overstocked"or"a"product"is"slow"to"sell"
o Wants"to"increase"the"traffic"flow"in"the"expectation"of"gaining"customers"
o Wants"to"build"a"reputation"of"having"low"prices"
"
Price$Points$
" Price"points"is"selling"products"only"at"certain"predetermined"prices"
" Used"by"retailers,"especially"clothing"stores"and"boutiques"
" Price"will"be"set"regardless"of"how"much"they"cost"at"wholesale"
"
$
Price$and$Quality$Interaction$
Normally,"products"of"superior"quality"are"sold"at"higher"prices."If"a"business"charges"a"low"price"for"a"
product,"customers"may"perceive"the"product"as"cheap.""A"higher"price"could"mean"an"aura"of"quality"
and"status."This"is"referred"to"as"prestige%or%premium%pricing.""
"

Promotion%

Promotion"attempts"to:"
Attract"new"customers"by"heightening"awareness"of"a"particular"product"
Increase"brand"loyalty"by"reinforcing"the"image"of"the"product"
Encourage"existing"customers"to"purchase"more"of"the"product"
Provide"information"so"customers"can"make"informed"decisions"
Encourage"new"and"existing"customers"to"purchase"new"products"
"
Promotion$Mix$
"""
Advertising$
Advertising"is"a"paid,"nonIpersonal"message"communicated"through"a"mass"medium."The"purpose"of"
advertising"is"to"inform,"persuade"and"remind."The"six"main"advertising"media"includes:"
"
! Mass"marketing""I"television,"radio,"newspapers"and"magazines"
! Direct"marketing"catalogues""catalogues"mailed"to"individual"households"
! Telemarketing""the"use"of"the"telephone"to"personally"contact"a"customer"
! EImarketing""the"use"of"the"internet"to"deliver"advertising"messages"
! Social"media"advertising""online"advertising"using"social"media"platforms"such"as"Facebook"
! Billboards""large"signs"placed"at"strategic"locations"
"
Which"type"of"advertising"media"a"business"selects"depends"on"a"number"of"variables"including"the:"
"

#
#
#
#
#

Type"of"product"and"its"positioning"
Size"of"the"target"market"and"its"characteristics"
Businesss"marketing"budget"
Cost"of"the"advertising"medium"
Products"position"on"the"product"life"cycle"

"
Personal$Selling$
Personal"selling"involves"the"activities"of"a"sales"consultant"directed"to"a"customer"in"an"attempt"to"
make"a"sale."Personal"selling"offers"three"unique"advantages:"
$ The"message"can"be"modified"to"suit"the"individual"customers"circumstances"
$ The"individualised"assistance"to"a"customer"can"create"a"longIterm"relationship"="repeat"sales"
$ The"sales"consultant"can"provide"afterIsales"customer"service"
"
Relationship$Marketing$
Businesses"are"looking"for"ways"to"develop"longIterm,"costIeffective"and"strong"relationships"with"
individual"customers,"a"process"known"as"relationship"marketing."The"ultimate"aim"is"to"create"
customer"loyalty."For"example,"Woolworths"introduced"the"Everyday"Rewards"Scheme"to"offer"
rewards"to"those"loyal"customers"who"spend"specified"amounts"or"make"repeat"purchases."
"
Sales$Promotion"
A"business"may"decide"to"offer"a"direct"inducement"to"customers"in"an"attempt"to"sell"more"of"its"
product."Sales"promotion"techniques"are"used"primarily"to"increase"the"effectiveness"of"other"
promotion"activities,"especially"advertising."Examples"of"special"promotions"include:"
" Coupons"
" Premiums"
" Refunds"
" Samples"
" PointIofIpurchase"displays"
"
Publicity$and$Public$Relations$
Most"businesses"use"publicity"and"public"relations"as"a"means"of"increasing"sales"and,"therefore,"
profits."The"main"aims"of"publicity"are"to:"
# Enhance"the"image"of"the"product"
# Raise"awareness"of"a"product"
# Highlight"the"businesss"favourable"features"
# Help"reduce"any"negative"image"that"may"have"been"created"
"
Public"relations"are"those"activities"aimed"at"creating"and"maintaining"favourable"relations"between"a"
business"and"its"customer."There"are"four"main"ways"in"which"public"relations"activities"can"assist"a"
business"in"achieving"its"objective"of"increased"sales:"
# Promoting"a"positive"image"
# Effective"communication"of"messages"
# Issues"monitoring"
# Crisis"management"
"
$
$
$
$
$
$
$
$
$

The$Communication$Process$
Marketing"managers"must"be"able"to"communicate"to"their"target"markets."Marketing"managers"use"a"
variety"of"channels"to"communicate"a"message"including"print"and"electronic"media"advertising."More"
respected"and"trusted"channels"include"an"opinion"leader"or"by"word"of"mouth."

Communication"Methods"

Opinion%Leaders%%
"An"opinion"leader"is"a"person"who"
inVluences"others."Actors,"athletes,"
musicians"and"models"are"used"for"
endorsement"

Word%of%Mouth%%
Consumers"tend"to"trust"their"
friends"because"recommendations"
can"be"a"powerful"inVluence,"
especially"when"there"are"many"
competing"products"

"
"

Place/Distribution%
Once"a"business"manufactures"a"product,"it"must"see"that"the"product"gets"into"the"customers"hands""
and"therefore,"an"efficient"distribution"system"is"required."
"
Distribution$Channels$
The"four"most"commonly"used"channels"of"distribution"are:"
"
! Producer"to"Customer"(simple"channel""used"by"most"services)"
! Producer"to"retailer"to"customer"(retailer"buys"from"producers"and"resells"to"customers)"
! Producer"to"wholesaler"to"retailer"to"customer"(most"common"method"for"consumer"goods)"
! Producer"to"agent"to"wholesale"
to"retailer"to"customer"(agent"is"
paid"commission)"
"
Channel$Choice$$Including$Intensive,$
Selective$and$Exclusive$
How"a"business"chooses"the"channel"of"
distribution"best"suited"to"its"product"
depends"largely"on"the"location"of"the"
businesss"market"or"market"coverage."
"
A"business"can"decide"to"cover"the"
market"in"one"of"three"ways"as"follows,"
the"difference"being"the"intensity"of"
coverage:"
"

1) Intensive%Distribution:"occurs"when"business"wishes"to"saturate"the"market"with"its"product"
"customers"can"shop"at"local"outlets"and"be"able"to"purchase"the"product."
2) Selective%Distribution:"involves"using"only"a"moderate"proportion"of"possible"outlets"
3) Exclusive%Distribution:"only"one"retail"outlet"for"a"product"in"a"large"geographic"area"

"
"
Physical$Distribution$Issues$
"
Transport:"An"intricate"network"of"transportation"is"required"to"deliver"the"products"to"the"
supermarkets."The"method"of"transportation"will"depend"on"the"type"of"product"and"the"degree"of"
service."
"
Warehousing:"Warehousing"is"a"set"of"activities"involved"in"receiving,"storing"and"dispatching"goods."
"
Inventory:"Businesses"may"implement"an"inventory"control"system"so"stock"is"usually"always"
available""the"goal"of"inventory"is"to"find"the"correct"balance"between"too"much"stock"and"too"little"
stock."
"

People,%Processes%and%Physical%Evidence%

Three"more"Ps"have"been"added"to"the"original"four,"which"apply"especially"to"intangible"products"
(services)"such"as"tourism,"entertainment"and"hospitality."
"
People$
It"is"essential"that"the"business"use"appropriately"recruited,"qualified"and"trained"employees"to"deal"
with"customers."The"people"element"refers"to"the"quality"of"interaction"between"the"customer"and"
those"within"the"business"who"will"deliver"the"service."Customers"base"their"perceptions"and"make"
judgements"about"a"business"based"on"how"the"employees"treat"them."
"
Processes$
When"employees"provide"a"service,"such"as"McDonalds"employees,"they"rely"on"a"delivery"system""a"
set"of"processes""to"perform"their"task."Processes"refer"to"the"flow"of"activities"that"a"business"will"
follow"in"its"delivery"of"a"service.""
! Good"processes"="customer"at"McDonalds"gets"his/her"food"on"time"
! Bad"processes"="a"pizza"delivery"business"delivers"cold"pizza"
"
Physical$Evidence$
Physical"evidence"refers"to"the"environment"in"which"the"service"will"be"delivered."It"also"includes"
materials"needed"to"carry"out"the"service"such"as"signage,"brochures,"calling"cards,"letterheads,"
business"logo"and"website."A"business"should"provide"highIquality"evidence"to"create"an"image"of"
value"and"excellence."
"
For"example,"a"restaurant"with"dirty"cutlery"and"uncomfortable"chairs"would"not"entice"customers"to"
go"there"again."That"is"an"example"of"bad"physical"evidence."
"

ESMarketing%

With"rapid"changes"in"electronic"communication"and"the"development"of"the"information"
superhighway,"marketers"are"beginning"to"exploit"all"types"of"eImarketing."EImarketing"is"the"
practice"of"using"the"Internet"to"perform"marketing"activities."The"main"technologies"presently"
available"for"eImarketing"include:"
"
# WebIpages"(display"of"info"accessible"on"the"web"through"a"web"browser)"
# Podcasts"(involves"the"distribution"of"digital"audio"or"video"files"over"the"Internet)"
# SMS"(alert"regular"customers"of"any"special"deals"on"offer"and"notify"suppliers"of"new"arrivals)"

# Blogs"(allow"for"communication"between"the"business"and"its"existing"and"potential"
customers)"

"
The"development"of"social"networking"sites"has"also"made"it"easier"for"individuals"and"businesses"to"
create"and"share"many"different"types"of"content"on"the"web."Social"media"advertising"(SMA)"is"a"form"
of"online"advertising,"using"social"media"platforms"such"as"Facebook"to"deliver"targeted"commercial"
messages"to"potential"customers."

%
Global%Marketing%

A"businesss"marketing"plan"must"be"modified"and"adapted"to"suit"overseas"markets"as"marketing"
environment"and"target"markets"differ"from"the"domestic"scene."
"
Global%Branding%
Global"branding"is"the"worldwide"use"of"a"name,"term,"symbol"or"logo"to"identify"the"sellers"product."
Businesses"us"global"branding"because:"
! It"can"be"cost"effective""i.e."one"ad"used"in"a"number"of"locations"
! It"provides"a"uniform"worldwide"image"
! The"successful"brand"name"can"be"linked"to"new"products"introduced"in"market"
"
Standardisation%
A"standardised"approach"is"a"global"marketing"strategy"that"assumes"the"way"the"product"is"used"and"
the"needs"it"satisfies"are"the"same"the"world"over."It"is"a"case"of"one"marketing"fits"all."
! Cost"savings"
! Production"runs"are"longer"therefore"achieving"economies"of"scale"
! R&D"costs"reduced"
! Spare"parts"and"afterIsale"service"simplified"
! Promotion"strategies"can"be"standardised"
! Evaluation"and"modification"of"the"plan"is"a"much"simpler"task"
"
Customisation%
A"customised"approach"(local"approach)"is"a"global"marketing"strategy"that"assumes"the"way"the"
product"is"used"and"the"needs"it"satisfies"are"different"between"countries."
"
Global%Pricing%
Accurate"pricing"decisions"must"be"made"if"the"businesss"overseas"expansion"is"to"be"successful""it"is"
one"of"the"most"critical"but"complex"issues"that"global"businesses"deal"with."
Customised%Pricing%
Customised"pricing"occurs"
whenever"consumers"in"
different"countries"are"charged"
different"prices"for"the"same"
product."
"
Often"businesses"use"the"cost'
plus'method"to"cover"the"added"
costs"of"exportation."

"

%
%

MarketSCustomised%Pricing%
MarketIcustomised"pricing"sets"
prices"according"to"local"
market"conditions."The"price"is"
set"depending"on"the"level"of"
demand"and"competition"
within"the"overseas"market."

Standard%Worldwide%Price%
Standardised"pricing"is"the"
practice"of"charging"customers"
the"same"price"for"a"product"
anywhere"in"the"world."Two"
major"risks:"
1. A"domestic"business"
may"undercut"the"
standardised"price"
2. Changes"in"the"exchange"
rate"may"negatively"
impact"on"the"exported"
price"

Competitive%Positioning%

Competitive"positioning"relates"to"how"a"business"will"differentiate"its"products."To"differentiate"
successfully,"the"business"should:"
! Strive"to"develop"product"leadership"
! Positive"customer"relationships"
! Operational"excellence"
"