MARKETING
MARKETING AND
COMMUNICATION INSTITUTE
UNIVERSITY OF
THE GAMBIA
STUDENT NAME:ALI SANKANU
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Sales orientation: An organisational culture where competitive advantage attained through the
creation of superior sales force to generate adequate sales becomes the objective of a business.
Carphone warehouse attained its objective through telemarketing.
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A ‘road map’ for achieving objectives and implementing strategy
A framework for monitor and control
Clarifies roles and functions
Specifies how resources are to be allocated
Assigns responsibilities and deadlines
Creates awareness of barriers to achievement
Ensures customer focus and competitor awareness
Internal analysis
This refers to analysis of organizational internal activities in an effort to determine its capabilities.
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There are number of marketing techniques that can be used in analyzing an organization’s Micro-
environment. These include the following:
Porters 5 Forces. Michael Porter categorized five competitive forces in the analysis of
the environment of the firm, which the firm must consider and understand.
MACRO-ENVIRONMENTAL ANALYSIS
The macro-environment (external environment) consists of activities beyond the firm’s control
and such as, the firm should at best try to adapt to its changing external environment.
The PESTLE Analysis Model is the most widely used technique for analyzing the firm’s
external environment
PESTLE ANALYSIS
This is mainly used to analyze the wider macro-environmental or the external environment in
which the firm operates. The organisation will normally have no control over PESTLE factors
and at best should try to accommodate and devise strategies around it.
SWOT ANALYSIS
This is an overall evaluation of a company’s Strengths, Weaknesses, Opportunities and Threats.
Strengths and Weaknesses are internal and can be controlled by the organisation whilst
Opportunities and Threats are external.
The objective of SWOT analysis is to identify and convert threats into opportunities and
weaknesses into strengths.
Strengths refer to an organization’s capabilities or aspects of its business that it does better than
its competitors. For example:
Coca Cola has a brand name
Marks and Spencer is noted for its high quality products
Tesco for its high levels of customer service
Microsoft for its product innovation
Weaknesses refer to aspects of an organisation’s activities that it does not excel in or does
comparatively worse than its competitors. For example,
Lidl supermarket is criticised for its poor customer service.
Macdonald’s for its ‘junk food’
Virgin trains for lateness or delays to train times.
Opportunities are aspects in the business environment that the organisation can capitalise upon
or take advantage of. For example,
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Tesco using its huge customer database to offer non-grocery products such as
insurance, credit cards and loans.
Threats are aspects in the business environment that pose a challenge or can hamper the
organisation from achieving its objectives. For example,
Competitors
Changing pace of technology
Government legislation
Natural disasters such as earthquakes or floods
OBJECTIVE SETTING
Objectives are basically what the organisation wants to achieve in its operational activities.
Objectives can be set at different levels of organisation.
Corporate objectives define specific goals for the organisation as a whole. This may be
expressed in concrete terms such as profitability, return on investment, growth of asset base and
earnings per share. They will permeate the planning process and be reflected in the objectives for
business units and functional objectives.
Business objectives define the goals of the various SBUS or individual business units that form
the corporation and are used by such multi-product organisations as Virgin and Unilever.
Marketing objectives relates to what the organisation wants to achieve in its marketing
activities. Examples of marketing objectives include growth in market share for a particular
product, increase in its customer base or growth in the usage of certain facilities.
S = STRATEGY DEVELOPMENT
Strategies are the means to achieving the organisation’s stated objectives.
Broadly speaking, strategies can be categorised as growth, competitive and institutional
strategies.
Growth strategies include:
The Ansoff matrix or Product-market strategy
Growth strategies are used when the objective of the firm is to expand, grow, increase or develop
its activities such as sales, profits, market share and international expansion.This is perhaps the
most popular method employed by organisations in an attempt to grow their businesses.
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The strategy is mainly based on the manipulation of the two variables of markets and products so
as to grow the business. This produces four possible strategy options.
1. Market penetration: This involves selling more of the firm’s existing products to its
existing markets. This can be achieved by means of heavy advertising and sales promotions
and sales promotions focussing on the following:
Persuading existing users to use more
Persuading non-user to use
Attracting consumers from competitors
Sales promotions activities such as BOGOF, discount pricing, more for less
2. Market development: This involves expanding into new markets with existing products.
These may be achieved by way of expanding into:
New markets geographically (international markets)
New market segments or
New users for products.
3. Product development: This approach requires the organisation to develop modified
products, which can appeal to existing markets. By tailoring the products specifically to the
needs of existing customers, the organisation can strengthen its competitive advantage.
4. Diversification: This implies developing new products for new markets. It is very risky
because the organisation might be entering into new areas in which it has no expertise. The
Virgin group has been very successful in its diversification efforts.
COMPETITIVE STRATEGIES
Organisations have to decide whether to compete across the entire market or only in certain
segments (competitive scope) and whether to compete through low costs and prices or through
offering a differential product range (competitive advantage).
These competitive strategy options according to Michael Porter can be expressed as three possible
strategies.
Cost leadership: attempts to control the market through being the low cost producer. This
would be appropriate if an organisation has a costing advantage over competitors. This
could be due to many factors such as economies of scale, superior working practices or a
technological advantage.
Differentiation: This aims to offer products, which are recognised as unique in areas,
which are highly valued by the consumer. It is the product’s uniqueness and the associated
customer loyalty that protects the firm from competition.
Focus: This uses either costs or differentiation but rather than concentrating on the entire
market, the organisation looks to operate only in particularly attractive segments or niches.
T = TACTICS
Tactics are measures or techniques that aid the achievement of strategies.
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These tactics principally includes that use and manipulation of the7Ps– namely
Product, Price, Place, Promotion, Process, People and Physical evidence.
A = ACTION / IMPLEMENTATION
Once marketing strategies and tactics have been set, it becomes necessary to turn them into action
plans. Implementations of marketing plans include the following 3 activities:
Allocating tasks and responsibilities (use of internal staff or outsourcing to external
agencies or both)
Scheduling of marketing activities: This implies the use of a Gantt chart, which is a
diagrammatic illustration of the marketing activities that will be executed and the times
when they will executed.
Setting the marketing budget: A budget is a financial statement showing how much the
company intends to spend on its marketing activities for a given period. The company can
use any of the following methods for setting its marketing budget.
1. Percentage of sales: Research has shown that in the UK some marketing budgets are fixed
by some non scientific methods such as the following.
- A percentage of the previous year’s sales
- A percentage of the budgeted annual sales
- A percentage of the previous year’s profit
2. Competitive parity: This implies fixing marketing expenditure in relation to the
expenditure incurred by competitors.
3. All-you-can-afford: This is crude and unscientific, but commonly used. The firm simply
takes a view on what it thinks it can afford to spend on marketing.
4. The objective and task method: The marketing objectives are set and then the tasks
needed to accomplish them are identified. Estimating the cost of these tasks then sets the
budget. This is the most scientific method but can be difficult and time consuming.
5. Arbitrary: This implies a senior manager using his own initiative and judgement to se the
marketing budget.
6. Historical: This implies past budgetary records to se the present or current marketing
budget.
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PRODUCT
PRODUCT: is any tangible activity of benefit that one party can offer to another that results to
the ownership of something as an exchange value.
Components of a product
This refers to the various levels of a product needed to enhance value creation to customers.
Core product: is the basic functional attributes of a product that a customer needs i.e. the
benefit offered. E.g. the core benefit of any vehicle is transportation.
Basic product: refers to product features such as design, colour, quality etc
Expected product: Product attributes that customers expect when they purchase a
product. E.g. performance
Augmented product: Product attributes that create customer delight i.e. the provision of
services over and above customer expectations. These include customer advices,
warrantees, guarantees, free delivery etc
Potential product: Product attributes that offer solutions to customer potential needs.
This implies being proactive and embarking on continuous product and service
improvements to meet changing customer needs.
In today’s increasingly competitive era, potential product is the best possible means to creating
customer value, sustainable customer relationship hence competitive advantage.
Product decisions
Product attributes: quality, style and design
Branding: creating, maintaining and enhancing the brand
Packaging: designing and producing the container/wrapper for the product
Labeling: tags, graphics and illustrations attached to the package
Product support: augmented services
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Test marketing: is the launching of a product on a small scale to test target market product
acceptability. This should be done in an authentic market setting (on sample of shops or
distributors for industrial goods and representative geographical area for consumer goods).
Commercialization: Full scale product launch after ascertaining market demand for a product.
Speed to market become quite paramount to enhance a sustainable product leadership in a given
market.
Classification of products
Products are mainly classified into two categories namely; Consumer goods(FMCG) and
Industrial goods
A. Fast Moving Consumer Goods (FMCG): Goods produced for immediate consumption.
These are;
Convenience goods: Consumers basic needs such as bread, sugar, salt, tooth paste etc
Shopping goods: Semi-durable products that are relatively expensive hence need rational
purchase decision. Consumers mostly look around at different places for information and
comparison prior to buying.
Unsought goods: Products whose needs and existence consumers do not realize until
seen on promotion mostly on door to door drop leaflets.
B. Industrial goods: Mostly durable goods produced to help further production. These are;
Installation: Plants and machinery items required for the production of goods
Accessories: Replacement items or parts to goods existing in the market. E.g. mobile
jackets, covers, batteries etc
Raw materials: Items consumed in the process of production
Supplies: Usually called the convenience goods of industrial requirement. It includes
office stationery and cleaning materials.
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Characteristics of the plc
CUSTOMER SALES COMPETITION PROFIT
Introduction Mostly Low sales Few competitors Negative
innovators
Growth Early adopters Rapidly rising More competitors Rising
Maturity Early majority High Competitor no. High
declining
Decline Laggards Sharply falling Small no. of declining
competitors
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Product Adoption
This describes the process and timings of customers or users acceptance of a product. This is
referred to as diffusion. Diffusion of innovation: the rate at which a product moves through the
adoption proces
Branding
Branding is the process of developing and enhancing a brand
Brand is a name, term, sign, symbol, design or a combination of them intended to identify
products and services of a seller and differentiate them from those of competitors (Kotler).
Brand Equity: is the asset the marketer builds to ensure continuity of satisfaction for the
customer and profit for the supplier.
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Creating positive impression hence reducing the importance of price
Facilitating customer choice
Creating brand equity
Supporting aspirations and self image
Encouraging shelf space(pull strategy)
Branding decisions
Brand positioning
Brand name selection
Brand sponsor
Brand development
Success criteria for branding
Suggest benefit. E.g. Ariel washes whiter
Suggest quality. E.g. BMW featuring strong body and quality engine
Easy to pronounce E.g. Boots
Be acceptable in all markets E.g. Nike
Be distinctive
Be meaningful
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2. Brand revitalisation: Becomes necessary where a brand is potentially strong but lacks
adequate market attractiveness to offer maximum profit. It is enhanced in the following:
Finding new markets: Developing new international markets were used by Cocoa cola
& McDonalds in maintaining the strength of their brands after reaching maturity in the
US market.
Enter new segments: E.g. Timberland extension into fashion shoes
New application: Creating new uses. E.g. Arm& Hammer baking soda used as a
deodoriser, cleaner for refrigerators, sinks, animals and tooth paste
Increasing usage: Creating additional incentives such as easy product use (instant tea),
frequent discounts and new ways of increasing quantity consumption (large packages).
3. Improving brand productivity: This is achieved through cost cutting, reducing working and
fixed capital, raising prices and reducing badly performing brands
4. Brand rejuvenation: Involves bringing a brand back to life after realising strong customer
demand for it. E.g. Lego experienced this with its duplo brand
5. Brand elimination: Withdrawing or killing brands with less viable markets or too many
brands to prevent the risk of spreading marketing spend too thinly.
Problems of branding
Protectionism: This refers to the need for trademarks, copy rights and registration of
designs to protect intellectual property
Competitive messages: There exist the likelihood of consumers forgetting brands as a
result of confusing variety adverts
Ineffective brand identity: This is certainly possible if a brand does not match
customer needs
Wrong media use: This prevent adequate reach and customer confidence
Brand superiority: The existence of more renounce and powerful brands over shadow
the strength of others.
Service
A service is any activity of benefit that one party can offer to another that is essentially intangible
and does not result in the ownership of anything(Kotler, Societal marketing)
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PRICE
PRICE is the exchange value of a product or service usually expressed in monetary terms.
Pricing methods
1. The economist perspective (demand based): Determine price on the basis of bringing
demand and supply into equilibrium. This varies from perfectly, imperfectly competition
and monopolistic market structures.
2. The accountant perspective (cost based): Determines price on the basis of cost of
production. This takes the form of marginal or cost plus pricing
3. The marketer perspective( competition based/value based): Determines price to
reflect competitor pricing
Pricing objectives
To maximize profit
To generate return on investment
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To acquire product leadership
Survival
Increase sales and market share
Pricing strategies
Price skimming: Initial high price attached to exclusive products
Price penetration: Initial low prices on goods to enable market presence and acceptance
Price adjustment policies;
1. Discount pricing: Pricing reduction to increase consumption
2. Differential pricing: Differing prices on the basis of seasonality, location and
customer type
3. Promotional pricing: Short term tactical pricing to promote increase usage. E.g.
Bogof(buy one get one free), 2 for the price of 1
Psychological pricing: Strategies that influences buyers mentally. E.g. 1.99(odd number
pricing), reduction in size or quality for the same price
Marginal pricing: Temporary pricing to lure customers to switch
Cost plus pricing: mark up pricing
Cost Behaviour
This reflects how cost and revenue vary at different activity levels hence the way in which cost is
affected by changes in volume of output.
Patterns of Cost
Fixed cost: Cost that is unaffected by activity levels hence remain constant over time.e.g Rent,
lighting e.t.c.
Total fixed cost: Accumulated fixed cost
Variable cost: Cost that varies with the levels of activity e.g. Salary, raw materials e.t.c.
Total variable cost: Accumulated variable cost
Total cost: Over all (fixed & variable) cost of producing a product
Calculation of a price
Fixed cost per unit * Output levels = Total fixed cost
Variable cost per unit * Output levels = Total variable cost
Total fixed cost + Total variable cost = Total cost
Total cost = Unit cost(cost per unit) = Price @ breakeven
Total output
Mark up: is always calculated on cost and added on unit cost to form the expected profit
price.
Margin: Calculated on sales, added to unit cost to form the expected profit price.
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PROMOTION
Modern marketing calls for more than just developing a good product, pricing it attractively, and
distributing it to potential stakeholders, such as consumers, suppliers, distributors, employees,
pressure groups , shareholders, the media, local community and the government. The objectives of
marketing promotions can best be described by the DRIP factors:
D = Differentiate: This makes it possible for companies to promotional activities in order
to show that their product or services are unique or different as compared to competitors.
R = Remind: This implies using promotion aimed at reaching established or existing
consumers about the availability of an organisation’s products and services.
I = Inform: This is aimed at creating awareness about the existence of a product in the
minds of new or potential customers.
P=Persuade: This is the ultimate goal of promotion and it is aimed at convincing
customers to actually buy organisation’s products and services.
ADVERTISING
Advertising is any paid form of non-personal communication that is transmitted through mass
media by an identified sponsor. The AIDA Model best explains the objectives of advertising.
A = Awareness
I = Interest
D = desire
A = Action
The following points also help our understanding of why organisations advertise
Promoting product, organizations and services
Stimulating demand for products
Increasing sales
Educating the market
Increasing the use of a product or service
Reminding and reinforcing
Reducing fluctuations in demand
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Advertising Media
Broadcast(Television and Radio)
Print media (newspaper and magazines)
New media( Internet, Digital television and CD-ROM)
Outdoor(Billboards, Fly Posters, Street furniture and transit)
In-store(Point of purchase displays, Packaging
Cinema
ADVERTISING CAMPAIGN / PROCESS
Situation analysis
Advertising objective definition
Identifying target audience
Setting advertising budget
Media planning and selection
Advertising development and testing
Scheduling and implementation
Monitoring and evaluation
SALES PROMOTINS
These are range of tactical marketing techniques designed with a strategic marketing frame work,
to add value to a product or service in order to achieve a specific sales and marketing objectives
(institute of sales promotion). The main aims and objectives of sales promotion are usually:
To increase brand and product awareness-attracting new customers
To increase trial and adoption of new or existing products
To attract customer to switch brands from competing organisations
To level out fluctuations in supply and demand
To increase brand usage
To increase customer loyalty
To disseminate information
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DIRECT MARKETING
This is an interactive system of marketing, which uses one or more advertising media to effect a
measurable response at any location. It tends to exclude the intermediary.
It is the planned, recording, analysis and tracking of customer behavior to develop relational
marketing strategies (Institute of direct marketing). The aims and objectives of direct marketing
include:
Increasing direct mail order levels from new and existing customers
Dissemination of information – provision of information to aid customer enquiries and
support adopting process
Generation of sales leads
Generation of trial leads-to increase the number of customers willing to try the product.
Direct Marketing Techniques
Direct mail
Telemarketing
Home shopping television channels
Use of sales force
Catalogues
Direct response advertising
The internet
SPONSORSHIP
Sponsorship implies an organisation undertaking to carry the cost of hosting an event in return for
advertising space. The objectives of sponsorship include the following:
Increasing brand awareness
Building and enhancing corporate image
Raising awareness of brands related to products restricted in advertising through various
legislation such as alcohol and cigarettes.
Types of Sponsorship
1. Programme sponsorship: Involves mainly sponsoring programmes on television for
example Cadburys sponsor Coronation Street on ITV.
2. Event sponsorship: Involves sponsoring major event for example
MasterCard sponsored the last football World Cup.
3. Person or individual sponsorship: for example, Nike sponsors
Tiger Woods.
3. Art sponsorship: Companies sponsor museums and music events. For example,
Saatchi and Saatchi sponsors the Tate Gallery, Capital Radio sponsors Party in
the Park.
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PUBLIC RELATIONS (PR)
Public relations are planned and sustained effort on the part of an organisation to create goodwill
and a positive public perception in the minds of its publics. Organisations publics include:
Customers
The general public
Financial institution
Shareholders
Employees
The media-TV, press, radio
Trade Unions
Governments
PERSONAL SELLING
This refers to the personal presentation of products / services and persuasive communication to
potential customers in an effort to generating sales leads
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FUNCTIONS OF PERSONAL SELLING
Prospecting
Communicating
Selling
Servicing
Information gathering
Administration
Customer relationship enhancement
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PLACE (Distribution)
Place represents the distribution element of the marketing mixes that constitute all activities
involved in getting products and services to the final consumer.
Place (distribution) is facilitated by the marketing channels.
A marketing channel refers to the route (individuals and organisations) through which products
and services are taken from the producers to consumers.
Channels of distribution
Direct: Manufacturer Consumer
Distribution strategies
1. Intensive: Wider distribution
2. Selective: Average scale distribution with in few outlets
3. Exclusive: Small scale distribution with in few outlets
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Logistics Management: refer to the planning, implementing and controlling the physical flow of
materials and related information from one point to the point of consumption to meet customer
requirement profitably.
Functions of logistics
Warehousing
Inventory management
Transportation
Logistic information management such as customer orders, billing, inventory levels and
customer data through EDI, intranet and extranet, telemarketing
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Industry Analysis
This is also referred to as competitive forces or porter’s five forces analysis. It influences the
state of competition in an industry hence determines the average profitability of a market. It
entails the following:
1. Threat of new entrants: This is very pertinent in the drink and pharmaceutical industry. It is
influenced by the strength of barriers to entry which explains high profit margins as outlined
below.
Patents and legal regulation requirements
Economic of scale
Capital requirement
Brand superiority
Access to distribution channels
Threat of retaliation
How ever this has been lowered by globalisation, deregulation and technological advancements
(internet)
2. Threat of substitute: Substitutes are indirect products that can undermine demand and prices.
This is common in the glass manufacturing industry. It is influence by:
Availability of alternative products
New products
Technological advancement that leads to elimination of needs. For instance new cars use
less oil whilst sealed engines make replacement lubricant unnecessary.
Abstinence: Consumers doing without
Generic substitution: Consumers shifting in purchase.
3. Power of suppliers: This is common in the textile and petroleum industry. It is influence by
the following:
Number of suppliers in the industry
Level of differentiation
Switching cost involved
Size and strength of customers
Prevalence of forward integration
4. Power of customers: This is pertinent in the chemical and auto tyre industry where
profitability disappear except for low cost suppliers. It is determined by:
Size and strength of customers
Number of suppliers
Level of differentiation
Switching cost
Prevalence of backward integration
5. Inter company / Competitive rivalry: This is common in the steel and textile industry where
profits are eliminated except for the most efficient producers. It is influence by;
Production capacity
Product standardisation
Number of competitors
Growth levels.
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Competitor Analysis
This is the assessment of competitor behaviour and activities with a view to acquiring adequate
information to enhance the formation of effective marketing strategies. Information about
competitors could be gathered from primary and secondary research.
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Creation of strong brand identities
Creation of strategic break point
Improving service levels
After sale service
Relationship enhancement
Greater flexibility
Innovative packaging and distribution
Superior financing deals
Speed to market
Relevant and unique product features
New technologies
3. Focus/Niche: Concentration of activities on a segment or segments that matches your core
competencies. This could either be cost or differentiations focus. E.g. Morgan in car market.
Strategies for niche
Creation of strong and specialist reputation
Effective and efficient use of R&D resources
Concentration of effort on chosen specialist and defensible position
Choosing niche on the basis of segment attractiveness and company exploitative strength.
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Intense advertising
Product range proliferation
Cost reduction
3. Market followers: Firms with relatively low market share who adopt a less aggressive stance
to maintaining its status quo.
Strategies for followers
Careful market segmentation
Competing only in highly valued market areas
Effective and efficient use of R&D resources
Profitability focus
Specialise in high value added products/ services.
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Customer Analysis
This is the assessment of customer behaviour in an effort to accessing information on customer
present and future needs to enable effective segmentation, targeting and positioning.
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Information search
Information evaluation
Purchase decision
Post purchase confirmation
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SEGMENTATION, TARGETING AND POSITIONING
SEGMENTATION: refers to the act of dividing a market into specific groups of customers who
share common needs and who might require separate products and marketing mixes (Kotler et al
1998).
ROLE/ IMPORTANCE OF SEGMENTATION
1. Enhances effective customer targeting
2. Facilitates adequate provision of customer needs
3. Promotes profitability through effective targeting(choosing customers that match firm’s
core competence)
4. Promotes effective and efficient resource utilization
5. Facilitates the gathering and management of adequate customer information
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Size(small, medium or large)
Product type(FMCG or industrial goods)
Customer type(b2b, b2c or c2c)
TARGETING: refers to the decision as to which market segment(s) a firm decides to prioritize
its sales and marketing efforts (Dibb et al 2001). This implies selecting the target segment(s) that
match (es) a firm’s core competence whose needs are met with distinct marketing mix.
POSITIONING: is the act of designing an offer so that it occupies a distinct and value space in
the minds of customers (kotler).
Problems of segmentation
1. High cost of information collection and management
2. High demand for personnel with highly specialized skills
3. The process is complex and time consuming
4. It requires adequate technologies for effective and efficient information management
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The Marketing Information System
Information refers to the facts gathered both internally and externally, organised into a form to
help making informed decisions.
Information can be in to three categories namely;
Data: raw facts not organised in to any form to suit purpose. E.g. sales figures
Information: Processed data organised into a format to suit purpose. E.g. sales figures in
tabular format to portray performance in particular month
Intelligent: analysed and interpreted information. E.g. portray of a correlation between
sales performance in January and a sales promotion.
Information management is therefore the gathering, processing, analysing, interpreting,
organising and presentation of information to management for effective decision making.
The MKIS (Marketing information system) is an adequate tool for data collection and
management with in an organisation. It is defined as a collection of people, equipment,
techniques and procedures used to gather, sort, analyse, interpret and distribute needed, timely
and accurate information to marketing decision markers.
Internal RecordMarketing
System Research System
1. Internal Report System: This gathers information generated by internal reports which
includes orders, billing, receivable, inventory levels, stock outs and so on. In many cases, the
internal report system is called the accounting information system. A sophisticated internal report
system can yield valuable historical information for a given product, product line, location or
region including:
Revenue
Product cost
Gross margin
Direct and indirect costs
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2. Marketing Intelligence System: This is defined as a set of procedures and sources used by
managers to gather or obtain everyday information about pertinent development in the
environment. Such systems include both formal and informal information-gathering procedures.
Informal information-gathering procedures involve such activities as scanning newspapers
magazines and trade publications. Formal-gathering information procedures involve assigning
staff specific tasks of searching for any information that seems pertinent to the company. They
can edit and disseminate this information to the appropriate members or company departments.
3. Marketing Decision Support System (DSS): This is defined as collected data that can be
accessed and analysed using tools and techniques that assist managers in decision-making. Once
companies collect large amounts of information, they store this information in huge data bases
that when accessed with decision making tools and techniques such as break even analyses,
regression models and linear programming, allows companies to ask ‘what if’ questions. Answers
to these questions are then immediately available for decision making.
4. Marketing Research System: The marketing research system gathers information not
gathered by the other three MIS components. Marketing research studies are gathered for specific
situation facing the company, hence it is sometimes referred to as ‘ad hoc’ research or ‘projects’.
Such ad hoc research unlike the other three MIS components is not continuous; they have a
beginning and an end.
Problems of MKIS
1. High cost of information collection, processing, analysis and interpretation
2. High cost of staff training and development
3. Time and cost implication of developing a marketing culture
4. Cost of technology needed to effectively gather, analyse and interpret data
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C = Collect the research data
A = Analyse the research data
R = Report the research findings
1. Define the research problem or the need for marketing research :
Marketing research is needed when decision makers must make a decision and they do not
have the information to help them make the decision.
Marketing research is needed to determine if problem exists, to generate, refine and evaluate
marketing actions and to evaluate marketing performance. It is also needed to determine if
there are opportunities in the market. This is the most important step in the marketing research
process because all the subsequent steps are very much influenced by the nature of the research
problem or need for the research.
2. Determine the objectives of the research:
Research objectives are determined by the research problem, which when achieved, provides
the necessary information to solve the research problem.
A good way of setting research objectives is to ask, ‘‘what information is needed in order to
solve the problem’’.
Research objectives identify what specific pieces of information are necessary to solve the
research problem at hand.
3. Design the research plan:
Designing the research involves the various issues that need to be considered for the successful
implementation of the research. These issues include the following:
a. The research methods to be chosen such as exploratory, descriptive or casual
research methods
b. The cost of the research
c. The time period involved in conducting the research
d. Who will do the research- in-house or the use of external research agencies
e. The research sample and the size of the research sample
f. The methods for collecting the research data
g. The types and sources of information to be used in the research
h. The methods to be used in presenting the data.
4. Collect the research data:
Data can be collected from two main sources namely primary and secondary data sources.
Primary data is information collected specifically for the study under consideration.
Secondary data is data collected for another purpose not specifically related to the proposed
research.
5. Analyse the research data:
Once data is collected, data analysis is used to give the raw data meaning. Data analysis
involves entering data into computer files, inspecting the data for errors and running tabulations
and various statistical tests (for quantitative data) and other means of analysis and summary
(qualitative data) to find out what the data reveals.
6. Report the research findings:
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The final stage of the marketing research process is to prepare and present the final research
report.
Preparing the marketing research report involves describing the process used, building
meaningful tables and using presentation graphics for clarity. The research report can be
presented in any of the following forms:
Tables
Graphs
Charts
Oral presentations
Combination of any or all of the above
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Difficulty of finding bespoke data
It could result to staff demotivation as they are rarely involved in any sort of research
activity.
Problem of data interpretation.
Research Methodology
It would definitely be quite helpful to adopt the methodology that best suits the project
background, interest and the subject under investigation. This is made possible with the use of
Quantitative or Qualitative research or the combination of them.
Quantitative research: This is a research approach used when studying objects with numerical
values. Quantitative research describes, explains and test relationships. E .g in an effort to
investigating the punctuality of students, the numerical nature of the topic at stake necessitates the
use of such research. Mathematical and statistical methods (descriptive statistics) are also used
for interpreting such information.
Qualitative research: This refers approach where the object under study has non- numerical
values such as behaviour, perception etc. E .g studying the behaviour of students
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Finally, questionnaires contain the information on which reliability assessment may be
made, and they are used in follow-up validation of respondent’s participation in the
survey.
Types of questions
1. Open questions
2. Closed questions
3. Scale or rating questions
Likert scales: Entails statements where respondents could show their degree of agreement.
Colleges generally give better services.
1 2 3 4 5
Strongly agree Agree Neither agree nor Disagree Strongly disagree
disagree
Semantic differential scale: This entails the use of two bio-popular or opposite words
where the respondent selects a point in between. It used for brand, store or company image.
Rating: entails the use of adjectives to describe a particular subject. E .g HSMF tutorials
are; please choose from the following
1. Excellent 2. Very good 3. Good 4. Fair 5. Poor
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2. Internet survey: This refers to a survey where questionnaires are administered through the
internet.
SAMPLING: This is the process of collecting data from subset of a population for investigation.
Sample is a subset of a population under study. Census is the technique used in studying or
accounting a population. The population (sampling framework) consists of sampling units
(subjects) that are under investigation. Hypothesis testing is the technique of measuring the
degree of representativeness of sample data to a sample population.
Sampling Process
Define the relevant population on the basis of the problem under research
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Design a sampling framework
Determine a sample size. This is influenced by the size of population, number of
subgroups, type of data and test, the degree of accuracy required, time and financial
resources availability
Select a sampling method. This is determined by the nature of population under study
Draw a sampling plan
Pilot test the drawn plan
Administer or carry out the sampling
Advantages of Sampling
It makes population studies a possibility through limiting the number of units to be
investigated hence promoting accuracy.
It helps minimize unnecessary work load by creating a truly representative group of the
population.
It helps save time and cost
Disadvantages of Sampling
Risk of sampling error as a result of unrepresentative sample size arising from poor
sample selection
Risk of sample bias resulting from prejudice, self judgement and carelessness.
Risk of insufficient and incomplete data
Problem of non response. This occurs as a result of the following
Respondent’s refusal to participate
Inability to participate
Inavailability at the time of call
Refusal to answer sensitive questions
Relocation or change of address at the time of call
These non responses could be minimized through the following
Giving out financial incentives
Replacing disables with able ones
Giving advance notices and negotiating prior meeting agreements
Avoiding sensitive information seeking
Replacing relocates
Sampling Methods
These refer to the ways and means of conducting sampling. These are categories into Random
(probability) and Non random (non probability) sampling methods.
Random Sampling methods
These are methods where every sampling unit or member of the population has an equal chance
of being selected. These require accurate and up to date sampling frame and mostly where
statistical analysis is paramount.
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1. Simple random sampling: This refers to the use of a sampling frame to select a sample
that guarantees every sampling unit or member of the population equal chance of being
selected. It is suitable for small sampling frames.
Advantages- It always produced unbiased sample
Disadvantages- Sampling units might be difficult and expensive to contact
2. Systematic random sampling: Refers to the selection of a random starting point (nth)
from a sampling frame which is persistently used as an interval for the selection of
sampling units or members. E .g if a sample 20 is required from a population of 100
units, every 5th item on the frame is selected (5, 10, 15….). It is suitable for large
sampling frames.
Advantages- It is simple and fast to select sampling units
Disadvantages- Tendency sample bias
3. Stratified random sampling: Refers to the use of simple random sample to select
sample from a population with a distinctive characteristics (strata). Basis for the strata
include gender, age, occupation and income levels. It is suitable for population with
distinguishable strata.
Advantages- Results from sample is less bias or distorted by emphasis on
extreme observation
Disadvantages- Difficulty of defining strata. It could also be very be time
consuming, expensive and complicated to analyse.
4. Multi- stage sampling: Consists of a number of stages designed to retain the advantages
of simple random sampling whilst minimizing the cost of a sample.
Advantages- It saves time and cost as there is no need to create a sample
framework of the entire population
Disadvantages- Risk of interview bias and inconsistency at each of the different
stages
5. Cluster Sampling: Refers to the creation of definable subgroups (clusters) within the
population and the random selection of a group which is assumed to be representative of
the whole. E .g the sampling of beer drinkers in one pub selected to be the representative
of the entire drinkers.
Advantages- It is relatively cheap and fast to carry out
Disadvantages- It only works well in homogeneous groups (clusters)
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Advantages- It is probably the cheapest sampling method
Disadvantages- It is difficult to ascertain the degree of confidence in deduction
with less control.
2. Judgemental (purposive): A sampling method where the individual discretion is used as
a basis for sample selection. The researchers subjectively select the sample they think
will deliver the best information (satisfy the research objectives).
3. Snowball sampling: A sampling method in which a small number of samples is selected
and a questionnaire given foe members to pass to acquaintances to enable the selection of
a larger sample
4. Convenience sampling: A sampling method in which sample members are selected on
the basis their availability and willingness to participate
Focus Group Interviews These are depth interviews with a group of people, and involves
interaction between respondents (Wilson 2003)
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Generally consists of between 6 and 12 respondents
Runs at the beginning of the research project
Conducted by skilled interviewer referred to as a moderator
Lasts generally between 45 minutes to 2 hours
Discussion is usually tape recorded and videoed
Possibility for the client to observe the group remotely or form a special room with
one-way window
Characteristics of the focus group moderator
Highly qualified and experienced in research/ psychology
Possess a high level of business and marketing awareness
Strong communicator, being able to relate to a wide range of people
Social disposition, relaxed and friendly attitude but strong enough to control group
Flexible and quick thinking with ability to respond to the unexpected
Discussion guide
Introduction
Greeting and welcoming message from the group moderator
Introduction of participant or self introduction by participants
Brief summon of Agenda(the purpose of the event) and the nature of the session
Briefly outline the topics for discussion
Discussion phase
Exploration on topic areas
Projective techniques to be used during the discussion
Break(tea time) to avoid boring session and encourage participation
Discussion continues
Summary phase
Summary of discussions
Questions time
Thank participants and hand out gifts as a sign of appreciation
Projective techniques: Are techniques used to create stimuli that help to unearth interviewees’
unconscious beliefs and true opinions that could not have been revealed under direct questioning.
Psychodrama: This entails the placing of participants in a role playing action to determine
their respond at specific situation. E .g asking a participant to play the role of customer
service personnel.
Third person or Friendly Martian: This involves getting an individual talk about an
issue at stake by asking the respondent what would be done if someone wants to do
something.
Sentence completion: Entails asking respondents to complete a list of incompleted
sentences in an effort to unearth underlying attitudes and opinions. Example
Smart looking personnel are ……………
Wider stores are ……………….
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Thematic apperception tests (TAT): Involves showing respondents a picture and
asking them to describe it. It could also involve asking what has happened before the
picture and what might happen after.
Word association: Entails the invasion of respondents mind by asking a sudden
question in order to reveal ones subconscious thought.
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Relationship Marketing
Relationship marketing refers to all activities directed towards establishing and maintaining
successful relational exchange (Morgan and Hunt).
Relationship marketing has gone beyond customer relationship to include all stakeholders’
relationships.
Customer
Prospects
Emphasis on
acquisition
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3. Win-win value creation: The prevalence of gain for each of the parties to a contract makes
relationship marketing a possibility
4. Customer service: The need to share information helps find solution to the needs and
perception of parties to a contract. Information sharing could further create trust and strengthen
the relationship
5. Long term focus: The willingness to sacrifice short term gains for future ones.
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Ethics and Corporate Social Responsibility
Ethics refers to a morals code of conduct that determines what is wrong and right
Ethical stance
This refers to the extent to which an organisation exceeds it minimum obligation to stakeholders
(Johnson & Scholes). Following are the various ethical stances an organisation can take
(Henderson).
Ethical and legal e.g. the body shop sale of products not tested on animals
Ethical and illegal- An employee disclosure of misappropriation in an organisation
Legal and unethical- Sale of products harmful to the society e.g. cigarettes
Unethical and illegal- Child and force labour
Components of CSR
1. Societal responsibility: This entails the provision of benefits to the public in the following
means
Sponsorship of community events. E.g. Barclay card premiership football sponsorship
Charitable donations. E.g. Tesco computer donation to UK primary schools
Employee volunteer days
Promotion of fair trade
2. Green Marketing: This connotes the involvement in activities that are less harmful to the
society in the below given means
Prevention of pollution
Promoting recycling
Production of ethical products/service
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Role/ Importance of CSR
Generating long term goodwill and positive publicity
Avoiding penalties such as fines, revoke of registration etc.
Attracting potential investors
Attract government recognition and support in the form of tax rebates and subventions
High skill employee attraction and motivation
CSR Strategies
1. Proactive strategy: Acting on ones own initiates to prevent an incident or damage. E.g. Dell
recalls all its 2006 batches of computer batteries when it realised the threat/ risk of explosion
2. Reactive strategy: Acting as at when a damage or incident occurs and complaints heard. E.g.
Cadbury acted as a result of consumerist group agitation despite its knowledge of salmonella
content contamination
3. Defensive strategy: Attempting to avoid or minimise obligation arising from an incident or
damage in the following means
Legal actions
Trade union support
Lobbying government
4. Accommodation: Taking responsibility for actions as a result of the following
Encouragement from a specialist interest group
Expectation of government intervention
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Internationalisation
This generic term refers to the getting into business or trading beyond local or domestic
boundaries into overseas countries.
Evolution of globalisation
Domestic marketing: Trading or doing business locally
Export marketing: Trading of domestic goods abroad
International marketing: Trading in one or two overseas countries
Multi-national marketing: Trading in three or more countries
Global marketing: Trading world wide
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Exchange valuables from the licensee
Payment of royalties
Brand strength enhancement and awareness
Cooperation
Advantages of licensing
It helps create market presence hence improving market size
It is cheap and simple to operate in practical sense
It is relatively less risky
It helps improve brand awareness
Disadvantages of licensing
It has a relatively low revenue generation capability
It stimulates competition between a licensor and licensee
Difficulty of getting government approval
Problem of controlling licensee operations
Difficulty of maintaining consistent product quality which might lead to bad publicity
2. Franchise: Is a contract where a franchiser provides a standard package of goods and services
in exchange for a payment from the franchisee
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Advantages of contract manufacturing
It is relatively cheap
It is relatively less risky
It also helps gain market presence
4. Joint ventures: This refers to the combination of resources by two or more firms usually
competing ones in an effort to enhancing their competencies without sacrificing their autonomy.
Such firms get together to promote effectiveness and efficiency
5. Consortium: Refers to the creation of working relationship amongst partners to help minimise
risk and cost with out actually surrendering autonomy
Advantages of consortium
It is relatively less risky
It helps gain market presence
It makes possible the existence of high capital investment ventures
It create a room for surplus funds investment hence full capacity and opportunity
exploitation
Disadvantages of consortium
Tendency of conflict of interest arising amongst partners
Difficulty of managing different cultures and interest
It is costly to run
6. Mergers: Two firms combining resources together to enhance their competitive position in a
market
7. Acquisition: Refers to the buying of another firm to build up strength for effective operation
and competitiveness
Advantages
It enhances market presence
It helps improve competitive position
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Disadvantages
It is relatively the riskiest
Problem of managing different cultures
High tendency of employee redundancies and demotions
Possibility of conflict of cultures and values
Dangers of diseconomies of scale
8. Wholly owned subsidiaries: Is the establishment of a firm that is wholly owned and centrally
managed by a parent company
Advantages
It promotes effective management and control
It encourages high employee commitment
It helps gain market presence
Disadvantages
High risk of losses arising in the case of instability and appropriation
It requires high cost of capital investment
Difficulty of getting government registration approval
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Control
This refers to the continuous assessment, detection and taking of corrective actions to enhance
perfect match between performance/ results and objective.
Financial perspective: This incorporates the financial drivers of shareholder value. It set
objectives for and measure performance of:
Return on capital employed
Operating margin
Economic value added
Cash flow
Sales growth
Internal business perspective: This determines the efficiency of the business processes. The
goals and measures are focused on
Percentage of sales from new products
Manufacturing cost
Manufacturing cycle time
Inventory management
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Innovation and learning perspective: This refers to the firm’s core capabilities and its
ability to up grade them over time. Goals and measures can be set for competency
developments in
New product and service developments
Manufacturing cycle time
Technology efficiency
Marketing and sales effectiveness
Number of new ideas generated
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