Chapter Five

Marketing
 Chapter Objectives
 Define marketing concepts
 Analyze marketing philosophies
 Role of marketing in achieving the goals of business
 Assist in conducting marketing research
 Make competitive analysis of the level
 Implement marketing intelligence in organization,
 Apply the various marketing mixes and strategies
 Understand and selling and customer service skills

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 Meaning and Definitions of Marketing

 Marketing can occur any time with one social unit

(person or organization) who strives to exchange
something of values with another social unit. Thus,
the essence of marketing is a transaction or
exchange.
 Marketing consists of activities designed to generate
and facilitate exchange intended to satisfy human
needs or wants.
 Marketing is a social and managerial process by
which an individual or group obtain what they need
and want through creating, offering and exchanging
of product of values with others (Philip Kotler,2012).
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 Cont….
 Marketing is the total business activity designed to
plan, price, promote and distribute want satisfying
products to target market to achieve organizational
goal (William J.Stanton, 1984).
 Marketing is the creation and delivery of standard of
living to society (Paul. Mazor, 2005).
 Marketing management is the process of planning
and executing, the conception, pricing, promoting
and distributing of ideas, goods and services to
create an exchange that satisfy individual or group
objectives (American marketing Association, 2015).

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 Cont…
 Marketing is the effort to identify and satisfy
customers’ needs and wants. It involves finding out
who your customers are, what they need and want,
the prices, the level of competition. It involves the
knowledge and all the processes you undertake to
sell your product.
 The above definitions of marketing reset on the
following core concepts: needs, wants and demands;
products (Goods, Services and Idea), value, cost and
satisfaction: exchange and transaction; Relationship
and Networks; market; and marketers and
prospects.
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 Cont…
 Marketing answers the following questions:
Who are my customers?
What are my customer’s needs and wants?
How can I satisfy my customers’?
How do I make a profit as I satisfy my customers?
 Who are your customers? Your customers are the
people or other businesses that want your products/
services and are willing to pay for them.
People who are buying from you now.
People you hope will buy from you in the future.
People who stopped buying from you but you
hope to get them back.
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 Cont…
 What are my customer’s needs and wants?
 An important point to note is that customers
want to look at different products so that they can
choose what they like best.
 Some customers want a different design and
others want high quality and are willing to pay
extra for that.
 How can I satisfy my customers’? You need to do
everything to find out who your customers are and
what they need and want in order to satisfy them
improve your sales and make a profit.

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 Cont…
 How can I satisfy my customers’?
 Products/services your customers want.
 Products/services your customers want.
 Price your customers are willing to pay.
 Location of your business in-order to reach your
customers (Place).
 Promotion to use to inform your customers and
attract them to buy your products or services.

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 Core Concepts of Marketing
 Needs, Wants and Demand: A person at any given
time has a need. This need arises out of physical or
psychological imbalances. Marketing starts with
human needs and wants.
 Need: - Human Need is a state of deprivation of
some basic satisfaction. People require food,
clothing, shelter, safety and belonging and esteem.
 Wants:- Wants are desires for specific satisfiers of
needs. Human wants are continually shaped and
reshaped by social forces and institutions including
churches, school, families and business cooperation.
Eg. A person needs food but wants spaghetti.
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 Core Concepts of Marketing…
 Demands: - Demands are wants for specific products
that are backed by ability and willingness to buy
them. Wants become demand when supported by
purchasing power.
 Product: - is anything that can be offered to satisfy a
need or want. Products broadly classify as tangibility
and intangibility features.
 Value: - is the consumer’s estimate of the products
overall capacity to satisfy his or her needs. According
to DeRose, value is “the satisfaction of customer
requirement at the lowest cost of acquisition,
ownership and use”.
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 Core Concepts of Marketing…
 Cost:- is the amount of money that are going to be
expended or already incurred to acquire a product.
 Exchange:- is the act of obtaining a desired product
from someone by offering something in return.
 Transaction:- is the trade of values between two
parties.
 Market:- consists of all the potential customers
sharing a particular need or want who might be
willing and able to engage in exchange to satisfy
their need or want.

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 Importance of Marketing
 The money pays for designing the products to meet
our needs, making products readily available when
and where we want them, and informing us about
producers. These activities add want satisfying
ability or what is called utility, to products.
 A customer purchases a product because it provides
satisfaction. That something that makes a product
capable of satisfying want is its utility. And it is
through marketing that much of a products utility is
created.
 Then potential buyers must be informed about the
products existence and the benefits it offers through
various forms of promotion.
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 Cont…
 The kinds of utility that marketing provides in the
process are as follows:
 Form Utility: Form utility is associated primarily with
production- the physical or chemical changes that
make a product more valuable.
 Place Utility: Place utility exists when a product is
readily accessible to potential customers. So
physically moving the products to a store near the
customers add to its value.
 Time Utility: Time utility means having a product
available when you want it.

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 Cont…
 Information Utility: Information utility is created by
informing prospective buyers that a product exists.
Unless you know a product exists and where you can
get it, the product has no value.
 Possession Utility: Possession utility is created when
a customer buys the product-that is, ownership is
transferred to the buyer. Thus, for a person to
consume and enjoy the product, a transaction must
take place.

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 Marketing Philosophies
 There are five competing concepts under which
organizations can choose to conduct their marketing
activities:
 Product concept
 Production concept
 Marketing concept
 Selling concept
 Societal Marketing concept
 Relationship Marketing Concept.

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 Marketing Philosophies…
The Production Concept
 The production concept is one of the oldest
concepts in business.
 The production concept holds that consumers will
favor products that are widely available and low in
cost.
 Managers of production-oriented organization
concentrate on achieving high production efficiency
and wide distribution.
 The assumption that consumers are primarily
interested in product availability and low price holds
in at least two situations.
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 Marketing Philosophies…
The Product Concept
 The product concept holds that consumers will favor
those products that offer the most quality,
performance or innovative features.
 Managers in product oriented organization focus
their energy on making superior products and
improving them over time.
 Under the concept, mangers assume that buyers
admire well-made products and can appraise
product quality and performance.
 In such situation, customers are ready to pay high
prices for product extra features.
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 Marketing Philosophies…
The Selling Concept/Sales Concept
 The selling concept holds that consumers, if left
alone, will ordinarily not buy enough of the
organization product.
 The organization must therefore undertake an
aggressive selling and promotion effort.
 To operate as a legal businessperson and protect the
business from unnecessary suits and liabilities.
 The selling concept is practiced more aggressively
with unsought goods, those goods that buyers
normally do not think of buying, such as insurance,
encyclopedia, and funeral plots.
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 Marketing Philosophies…
The Marketing Concept
 The marketing concept holds that the key to
achieving organizational goals consists of being more
effective than competitors in integrating marketing
activities toward determining and satisfying the
needs and wants of target markets.
 The marketing concept has been expressed in many
colorful ways:
 “Meeting needs profitably”
 “Find wants and fills them”
 “Love the customers, not the product etc.”
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 Marketing Philosophies…

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 Marketing Philosophies…
The Societal Marketing Concept
 The societal marketing concept holds that the
organization should determine the needs, wants and
interests of target markets.
 Deliver the desired satisfactions more effectively and
efficiently than competitors maintains or improves
the consumers and the society’s well-being.
 The societal marketing concept questions whether
the pure marketing concept is adequate in an age of
environmental problems, resource shortages, rapid
population growth, worldwide economic problems,
and neglected social services.
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 Marketing Philosophies…
Relationship Marketing
 Relationship marketing is the practice of building
long term satisfying relations with key parties-
customers, suppliers, distributors in order to retain
their long term preferences and business.
 The ultimate outcome of relationship marketing is
the building of a unique company asset called a
marketing network.
 In this case, customer experience rather than
customer satisfaction is the most critical component
in relationship marketing.
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 Marketing Philosophies…

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 Marketing Information Systems
 A marketing information system consists of people,
equipment and procedure to gather, sort, analyze,
evaluate and distribute needed timely and accurate
information to marketing decision makers.
 The marketing managers to carry-out their analysis,
planning, implementation and control
responsibilities they need information about
development in the marketing environment.
 The role of the information system is to assess the
manager’s information needs, develop the needed
information, and distribute the information is a
timely fashion to the marketing managers.
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 Cont…

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 Cont…
 The needed information is developed through
internal company records, marketing intelligence
activities, marketing research, and marketing
decision support analysis.
 Marketing Research:-is the systematic and objective
identification, collection, analysis, and dissemination
of information for the purpose of assisting
management in decision making related to the
identification and solution of problems and
opportunities in marketing.
 Thus, systematic planning is required at all the stages
of the marketing research process.
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 Cont…
 Marketing research is objective. It attempts to
provide accurate, impartial information.
 The Role (Significance) Of Marketing Research In
Decision Making;
 Descriptive Function:-gathering and presentation
of statements of fact.
 Diagnostic (analytical) Function :- The explanation
of data.
 Predictive Function:-Specification of how to use
the descriptive and diagnostic research to predict
the result of a planned marketing decision.
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 Cont…
Marketing Research Components
 Market size: this deals with the number or value of units sold to a market
in a given period.
 Market Share: this one is about a specific corporation’s share of the
market size out of the whole market of a product or products of the same
purpose.
 Market penetration: this is a marketing strategy which is used to know
when a company enters/penetrates a market with current products to get
better market share by lowering the price of a product.
 Brand equity research: this research is conducted to know how favorably
consumers view the brand.
 Buyer decision processes research: this part of marketing research
activity is used to determine what motivates people to buy and what
decision-making process they use.

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 Customer Satisfaction Research
 Distribution channel audits to assess distributors’ and retailers’ attitudes
toward a product, brand, or company.
 Marketing effectiveness and analytics: Building models and measuring
results to determine the effectiveness of individual marketing activities.
 Mystery Consumer or Mystery shopping: the researcher acts as a shopper.
 Positioning research: this research is mostly conducted to answer
questions like How does the target market see the brand relative to
competitors?
 Price elasticity testing: here the objective of the research is to determine
how sensitive customers are to price changes.
 Sales forecasting - to determine the expected level of sales given the level
of demand with respect to other factors like advertising expenditure,
sales promotion etc.
 Segmentation research: this type of research helps to determine the
demographic, psychographic, and behavioral characteristics of potential
buyers.
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 Marketing Research Process
Step 1: Define the research purpose or objectives
Where potential customers buy the product?
Why they purchase there?
What is the size of the market? How much of it
can your business capture?
How does your business compare with
competitors?
The impact of promotion on customers.
What types of products are desired by potential
customers?

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 Cont…
 Step 2: Research Design Formulation
 The research design is a blueprint for conducting the
marketing research. More formally, formulating the research
design involves the following steps:
 Study period and place determination.
 Qualitative data collection methods.
 Methods of collecting quantitative data (survey,
observation, and experimentation).
 Definition of the information needed.
 Questionnaire design.
 Measurement and scaling procedures.
 Sampling process and sample size.
 Plan of data analysis.
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 Cont…
 Step 3: Gather at this stage secondary data: A data
which is originally collected by others for their own
purpose: Secondary data:
 Is less expensive.
 Can be acquired within or outside the venture.
 But, may be out-dated and less valid.
 Step 4.Gather Primary Data
 Observational techniques-do not involve contact with respondents.
 Focus groups
 Experimentation-investigates cause and effect relationships.
 Survey techniques- generate data by asking people questions and
recording their responses

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 Cont…
 Step 5: Data Processing and Analysis: includes the
editing, coding, transcription, and verification of
data.
 Step 6: Report Preparations and Presentation
The specific research questions identified
Describes the research approach
The research design
The data collection methods and sampling
procedures
The data processing and analysis procedures,
The major findings and suggestions for actions.
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 Marketing Intelligence
 Market intelligence is the systematic process of
gathering, analyzing, supplying and applying
information (both qualitative and quantitative)
about the external market environment.
 The Importance of Marketing Intelligence
 Market and customer orientation: promote external focus
 Identification of new opportunities.
 Smart segmentation
 Early warning of competitor moves.
 Minimizing investment risks.
 Quicker, more efficient and cost-effective information.
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 Marketing Intelligence....
 Ways to Undertake Marketing Intelligence
 Unfocused scanning: gathered any useful
information without any specific purpose in mind.
 Semi-focused scanning: no specific purpose. The
manager is not in search of particular pieces of
information that he/she is actively searching but
does narrow the range of media that is scanned.
 Informal search: - limited and unstructured attempt
to obtain information for a specific purpose.
 Formal search: - this is a purposeful search for
information in some systematic.
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 Competitive Analysis
 Competitive analysis refers to determining the
strengths and weaknesses of competitors and
designing ways to take opportunities or tackle
threats posed by competitors.
 Uses of Competitive Analysis
 It helps management understand its competitive advantages/
disadvantages relative to competitors.
 It generates understanding of competitors’ past, present (and most
importantly) future strategies.
 It provides an informed basis to develop strategies to achieve
competitive advantage in the future
 It helps forecast the returns that may be made from future
investments.

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 Competitive Analysis
 Steps of Competitive Analysis
1. Identify your competitors: Determine both local and international
competitors.
2. Gather information about competitors: At this stage you need to know;
what markets or market segments your competitors serve; what benefits
your competitors offer; why customers buy from them..
3. Gathering Information on Competitors: promotion strategies by visiting
their business site; prices; your competitors’ customers; vendors or
suppliers, and their employees; trade shows; and publicly available
information - from Newspapers, magazines, press releases and online
publications.
4. Analyzing the Competition How are you going to compete with that
company?
5. Develop a pricing: The last step in the process is to develop a pricing
model that represents what you are offering the market and the value
you bring to your target buyers.
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 The Marketing Mix and Marketing Strategies
 The 4 P’s Of Marketing/The Marketing Mix
 Product: refers to goods/services produced for sale,
the product /service should relate to the needs and
wants of the customers.
 Pricing: refers to the process of setting a price for a
product/service. Your prices must be low enough to
attract customers to buy and high enough to earn
your business a profit.
 Place: means the different ways of getting your
products or services to your customers. It is also
referred to as distribution.
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 Cont…
 Promotion: Refers informing your customers of your
products and services and attracting them to buy
them. Promotion includes advertising, sales
promotion, publicity (non-paid promotion) and
personal selling.
 Ensure you maintain attractive displays.
 Let customers try new products.
 Have competitions.
 Give demonstrations.
 Sell complementary products (products that go
together
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 Marketing Strategy
 A marketing strategy is a process that can allow an
organization to concentrate its limited resources on
the greatest opportunities to increase sales and
achieve a sustainable competitive advantage.
 Marketing strategy is a method of focusing an
organization's energies and resources on a course of
action which can lead to increased sales and
dominance of a targeted market.
 Marketing strategy combines product development,
promotion, distribution, pricing, relationship
management and other elements; identifies the
firm's marketing goals, and explains how they will be
achieved, ideally
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 Pricing Strategy
 Pricing Strategy: It is subject to incredibly complex
environmental and competitive forces.
 Price is the value placed on what is exchanged.
Something of value is exchanged for satisfaction and
utility, includes tangible (functional) and intangible
(prestige) factors.
 Price is often the only element the marketer can
change quickly in response to demand shifts.
 It relates directly to total revenue
 TR = Price * Quantity; Profit = TR – TC
Where, TR=Total Revenue, TC=Total Cost
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 Cont…
 The following are some of pricing strategies mostly
applicable in the real world scenario;
 Price Skimming: this is a type of marketing strategy
that firms use by charging the highest possible price
that buyers who most desire the product will pay.
 Penetration Pricing: In this strategy, prices of
products are reduced compared to competitors’
price for the same product to penetrate into markets
and to increase.
 Cost-plus pricing: Any amount that is above unit
cost may be considered.
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 Cont…
 Mark-up pricing: A certain percentage of the selling
price is added to unit cost.
 Competition-Oriented Pricing: Considers
competitors prices primarily; but the market type
matters.
 Odd-even-pricing:-This is Psychological
pricing method based on the belief that
certain prices or price ranges are more appealing
to buyers

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 Promotion Strategies
 Promotion is the communication of the company and its
products to customers. Promotional strategy is choosing
target market and formulating the most
appropriate promotion mix to influence it.
 Advertising: It is any paid form of non-personal, one-way, mass
communication about an organization, good, service, or idea by an
identified sponsor.
 Personal selling: This is the two-way flow of communication between a
buyer and seller, often in a face to face encounter, designed to influence a
person’s or group’s purchase decision.
 Public relations: Public relation is a form of communication that seeks to
change the perceptions of customers, shareholders, suppliers, employees
and other publics about a company and its products.
 Sales promotion: This involves short term incentives of value such as
discounts, free samples, and prizes to be offered to arouse interest of
customers in buying the good/service.
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 Distribution Strategies
 A successful product or service means nothing unless the
benefit of such a service can be communicated clearly to the
target market.
 Marketing Channels are individuals/organizations involved in
the process of making the product available for use or
consumption by consumers. Channels are used to improve
exchange efficiency. It is divided into Direct and Indirect;
 Direct channels: In this type of channel, producers and end
users directly interact.
 Indirect channels: In this type of channel intermediaries are
inserted between seller and buyer. Intermediaries include
Merchant Wholesalers, retailers, dealers, agents, brokers; and
manufacturer’s branches and offices.

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 Distribution Strategies….
 The following factors should be considered to select the best
channel under the condition of using best distribution
strategy.
 Company Factors: financial, human and technological
capabilities of a company to do its business activities.
 Market Characteristics: Geography, market density, market
size, target market
 Product Attributes: perishability, value and sophistication of
the product
 : those forces that affect the business like
compEnvironmental Forcesetition, technology and culture.

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 Selling and of Customer Service
 Customer service is what happens between the
customer determining his/her needs and receiving
the desired benefits.
 How service providers do their jobs?
 How fast and accurately they process paper works?
 how successfully they pursue accounts?
 how effective they are in taking the next step to develop
customer loyalty?
 will determine an organization's success in serving
customers?

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 The Concept of Service
 Service refers to any activity undertaken to fulfil
customer’s needs. It is any act or performance that
one party can offer to another that is essentially
intangible and does not result in the ownership of
anything.
 The feature of intangibility shows that pure services
cannot be defined in terms of the physical
dimensions; or the customer cannot see or feel them
before purchase.
 The concept of inseparability, on the other hand,
refers that production and consumption of services
are inseparable; the 'sale' occurs just before both.
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 The Concept of Customer
 Customer is a person or organization that buys a
product or service either for use or for resale.
 Customers can be internal (e.g. member of the organization)
or external (customers coming from outside).
 Strategic Activities needed for Quality Customer Service Delivery;
 Establishing a clear customer service strategy.
 Ensuring that correct people are in place, with the correct skills to
deliver outstanding personal service.
 Establishing clear material service delivery processes
 Improving in terms of process improvement, quality monitoring and
recovery continuously.
 Participatory Management.

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 Customer Handling and Satisfaction
 Customer handling and satisfaction is a key for
successful organizations.
 Managers and employees should work hand-in-hand
to improve their service delivery programs.
 Existing customers must be satisfied with the
existing service.
 Existing customers are also means of potential
customers.
 Poor service/defective service is the causes of loss
and bankruptcy for many organizations.

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 Customer Handling and Satisfaction
 major reasons to lose customers are:
 Poor service
 Poor quality
 Rude behaviour

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 Reducing Customer Complaints
 Considering Customers as valuable Asset
 91% of customers who have major complaints decide they
will never come back But if the complaint is resolved quickly,
82% of them will return.
 Quick complaint resolution drops customer defection rate
from 91% to 18%.
 There is no investment like investment in customer
satisfaction.
 Treat the cost of satisfying a customer as an investment
rather than as an expense
 In the customer’s benefit lies our benefit.
 Place Yourself in The Customer’s Shoes
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 End Of Chapter Five

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