Nsanje Hills Training Institute [Duly registered with TEVETA: No.

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Sales and Marketing Training Course

“The best idea for any organization is the idea of how to serve customers better”

Training Module Notes

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UNIT 3: MARKETING FOUNDATIONS

WHAT ARE THE FOUNDATIONS OF MARKETING?

Marketing is the process of getting the right goods or services or ideas to the right people at the
right place, time, and price, using the right promotion techniques and utilizing the appropriate
people to provide the customer service associated with those goods, services, or ideas. Marketing
is finding out the needs and wants of potential buyers (whether organizations or consumers) and
then providing goods and services that meet or exceed the expectations of those buyers.

Marketing is about creating exchanges. An exchange takes place when two parties give
something of value to each other to satisfy their respective needs or wants. In a typical exchange,
a consumer trades money for a good or service. In some exchanges, non-monetary things are
exchanged, such as when a person who volunteers for the company charity receives a T-shirt in
exchange for time spent

Marketing Foundation consists of the processes and tools you need to work through and
create before doing any other marketing. These pieces will fuel and guide everything else you
do. They become the solid, or foundational, base from which you’ll decide which tactics to try
and how to plan your campaigns. While those tactics will continue to change as technology and
consumer needs and behaviors shift, your marketing foundations will stay constant.

To be successful at marketing, organizations must be familiar with and adept at managing some
foundational concepts, the foundations of marketing. The four main foundations of marketing
are specialization, differentiation, segmentation, and concentration. It is important to consider all
four foundations in developing a successful marketing plan.

1) SPECIALISATION

Generally speaking, more customers know about your business means you have more chances to
increase sales. This is the reason why many businesses go out of their way to make a marketing
strategy that try to reach everybody, at every price point, with every product they have.

However, let’s be real: it’s impossible to promote a general product without any special points to
the mass public. Well, you can do that, but your sales will not surge dramatically like you
expected. In order to really achieve some success with your marketing schemes, the marketing
strategy must state clearly the specialization points of your product or service.

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2) DIFFERENTIATION

This is the most important point of a marketing strategy. Your business will never succeed if
what you do is replicate what others are doing or doing things just like them. Consumers must
remember who you are and what you do to make the decision to buy from you. Thus, whatever
you do, make sure that it is distinctively different from what others in the market are doing to
make an impression in the consumer’s mind. Also, make it your mission to provide products and
services that are superior to what your competitors are putting into the market.

3) MARKET SEGMENTATION

The is by identifying a target market to divide the entire market into smaller portions, or market
segments—groups of potential customers with common characteristics that influence their
buying decisions. The purpose of segmenting a market is to focus the marketing and sales efforts
of a business on those prospects who are most likely to purchase the company’s product(s) or
service(s), thereby helping the company (if done properly) earn the greatest return on those
marketing and sales expenditures. Market segmentation maintains two very important things:
(1) there are relatively homogeneous subgroups (no subgroup will ever be exactly alike) of te
total population that will behave the same way in the marketplace, and (2) these subgroups will
behave differently from each other. You can use a number of characteristics to narrow a market.

Figure 1: Market Segmentation

Let’s look at some of the most useful categories in detail and figure 1 labels the four important
categories of marketing segmentation.

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a) Demographic Segmentation

Demographic segmentation divides the market into groups based on such variables as
age, marital status, gender, ethnic background, income, occupation, and education.Age,
for example, will be of interest to marketers who develop products for children, retailers
who cater to teenagers, colleges and universities that recruit students and assisted-living
facilities that promote services among the elderly.

b) Geographic Segmentation

Dividing a market according to such variables as climate, region, and population density
(urban, suburban, small-town, or rural)—is also quite common. Climate is crucial for
many products: try selling jerseys in cold season or umbrella in rain season. Consumer
tastes also vary by region. Likewise, differences between urban and suburban life can
influence product selection.

c) Behavioural Segmentation

Dividing consumers by such variables as attitude toward the product, user status, or usage
rate is called behavioural segmentation. Consumers can also be divided into two camps:
technology optimists, who embrace new technology, and technology pessimists, who are
indifferent, anxious, or downright hostile when it comes to technology.

Some companies segment consumers according to user status, distinguishing among

nonusers, potential users, first-time users, and regular users of a product. Depending on
the product, they can then target specific groups, such as first-time users.

d) Psychographic Segmentation

Psychographic segmentation classifies consumers on the basis of individual lifestyles as

they’re reflected in people’s interests, activities, attitudes, and values. Do you live an
active life and love the outdoors? If so, you may be a potential buyer of hiking or
camping equipment or apparel. If you’re a risk taker, you might catch the attention of a
gambling casino.

e) Clustering Segments

Typically, marketers determine target markets by combining, or “clustering,” segmenting

criteria. There those will use demographic variables such as age, geography, and income
and geography is a factor as customers tend to live or work in cities or upscale suburban
areas. Here the socioeconomic factor is also important.

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BENEFITS OF SEGMENTATION

Segmentation helps business to understand their customers and potential customers. This helps
them target, acquire, manage and develop profitable relations.

Practical Benefits will include:

a) Marketing Opportunities: Throough understanding customer needs in each segment

b) Budgeting: Marketing budgets can be allocated according to segments with the most
potential.
c) Product Assortment: Assortments of products can be refined to appeal to different
segments.
d) Specialism: Specialists can be appointed to build each of the firm’s main segments.
e) Precision Marketing: The approach can be fine-tuned according to each market segment.
f) Competitive advantage: May result through specialist knowledge of particular segments.

4) CONCENTRATION

Your business doesn’t have all the resources in the world to pour into EVERY target segment,
which is why you should carefully select which one is worth putting your bet into, then
concentrate the limited resources you have on it. There are no specific criteria for choosing a
segment because situations can be varied depends on the market your business is operating in,
but to make it easy for you to choose, it suggested that finding the segment that consisted of
consumers who will be most likely to purchase from your business the soonest is the best.

The marketing mix, competitive advantage, and customer value are other components and
concepts important in applying the foundations of marketing.

A good marketing strategy is needed for a product or service to make an impact in the
marketplace and sell well. Without proper research and careful calculations and planning, a
marketing plan might end up doing the opposite of helping the business to achieve success.