Marketing Management (CUIM 101)

Lecturer: Ms Chigwende

Level: 1:2

Year 2019

Definitions of Marketing

According to Kotler and Armstrong (2013) Marketing is the process by which companies create
value for customers and build strong customer relationships in order to capture value in return.

Marketing is the management process responsible for identifying, anticipating and satisfying
customer requirements profitably (CIM)

Marketing is the delivery of customer satisfaction at a profit.

'' To explain this definition, we examine the following important terms: needs, -wants and
demands products; value and satisfaction; exchange, transactions and relationships; and
markets.

Needs Wants and Demands

The most basic concept underlying marketing is that of human needs.

A human need is a state of felt deprivation. Humans have many complex needs.

These include basic physical needs for food, clothing, warmth and safety; social needs for
belonging and affection; and individual needs for knowledge and self-expression.

These needs are not invented by marketers; they are a basic part of the human make-up. When a
need is not satisfied, a person will do one of two things:
1. look for an object that will satisfy it; or
2. try to reduce the need.

Human wants are the form taken by human needs as they are shaped by culture and individual
personality
Wants are described in terms of objects that will satisfy needs.
Value, Satisfaction and Quality

Customer value is the difference between the values the customer gains from owning and using a
product and the costs of obtaining the product. For example, Federal Express customers gain a
number of benefits. The most obvious is fast and reliable package deliver; ‘However, when using
Federal Express, customers may also receive some status and image values.

Customer satisfaction depends on -A product's perceived performance in delivering value relative

to a buyer's expectations. If the product's performance falls short of the customer's expectations,
the buyer is dissatisfied.
If performance matches expectations, the buyer is satisfied. If performance exceeds expectations,
the buyer is delighted. Satisfied customers make repeat purchases, and they tell others about their
good experiences with the product.

Customer satisfaction is closely linked to quality. In the narrowest sense, quality can be defined
as 'freedom from defects

Customer-focused definitions of quality suggest that a company has achieved total quality only
when its products or services meet or exceed customer expectations

Exchange, Transactions and Relationships

Marketing occurs when people decide to satisfy needs and wants through exchange. Exchange is
the act of obtaining a desired object from someone by offering something in return.

Exchange is only one of many ways people can obtain a desired object

A transaction consists of a trading of values between two parties. In a transaction, we must be

able to say that one party gives X to another party and gets Fin return
For example, you pay a retailer £300 for a television set or the hotel £90 a night for a room. This
is a classic monetary transaction, but not all transactions involve money. In a barter transaction,
you might trade your old refrigerator in return for a neighbour's second-hand television set.

Transaction marketing is part of the larger idea of relationship marketing. Smart marketers work
at building long-term relationships with valued customers, distributors, dealers and suppliers.
They build strong economic and social tics by promising and consistently delivering high-quality
products, good service and fair prices.
Increasingly, marketing is shifting from trying to maximize the profit on each individual
transaction to maximizing mutually beneficial relationships with consumers and other parties. In
fact, ultimately, a company wants to build a unique company asset called marketing network
Market
The concept of exchange leads to the concept of a market. A market is the set of actual and
potential buyers of a product.
These buyers share a particular need or want that can be satisfied through exchange. Thus, the
size of a market depends on the number of people who exhibit the need, have resources to
engage in exchange, and are willing to offer these resources in exchange for what they want.

Marketing
The concept of markets finally brings us full circle to the concept of marketing.
Marketing means managing markets to bring about exchanges for the purpose of satisfying
human needs and wants.
Thus, we return to our definition of marketing as a process by which individuals and groups
obtain what they need and want by creating and exchanging products and value with others.

Marketing Management

We define marketing management as the analysis, planning, implementation and control of

programmes designed to create, build and maintain beneficial exchanges with target buyers for
the purpose of achieving organizational objectives.
Thus, marketing management involves managing demand, which in turn involves managing
customer relationships.

The Marketing Management Orientations/ philosophies

The production concept

The production concept holds that consumers favour products that are available and highly
affordable.

Therefore management should focus on improving production and distribution efficiency.

This concept is one of the oldest concepts that holds sellers, it is still useful in some
situations e.g. Lenovo company dominates the highly competitive, price sensitive Chinese
PC markets through low labour costs, high production efficiency and mass distribution(they
enjoy the economies of scale),

This concept was also applied by Henry Ford on his Model T automobile, he was asked
why
have it in any colour as long as it is black.” He concentrated on production only.

However in some situations production concept can lead to marketing myopia. Companies
adopting this orientation run a major risk of focusing too narrowly on their own operations
and losing sight of the real objective of satisfying the customer needs and building customer
relationships.

The Product Concept

It focuses on the features of a product.

It assumes that consumers will buy products with the best quality, performance and features.
Managers seek to win customers through product excellence in terms of improved product,
new product features and ideally designed and engineered.

Often organisations practising this concept don’t bother to study the market and consumers in
depth. They concentrate on making the company’s products better while simultaneously
neglecting to consider changes in the market.

The selling Concept

The selling concept holds that consumers will not buy enough of the firm’s products unless it
undertakes a large scale selling and promotion effort.

The selling concept is typically practiced with unsought goods- those goods that buyers do
not normally think of buying, such as insurance, these industries must be good at tracking
down prospects and sealing them on product’s benefits.

Such aggressive selling however carries high risks. It focuses on creating sales transactions
rather than building long term profitable customer relationships.
 The aim is often to sell what the company is making rather than making what the customer
wants.

It assumes that customers who are coaxed into buying the product will like it or if they don’t
like it they will possibly forget their disappointment and buy it later again.

The Marketing Concept.

It holds that the key to achieving organisational goals consists of the company being more
effective than competitors in creating, delivering, and communicating customer value, to its
chosen target markets.

The concept exists when an organisation focuses all its efforts on providing products that
satisfy its customers.

The customer is the focal point for how each area of the organisation is run; the products are
created with the goal of satisfying customer needs

All departments are to be organised around the marketing function of anticipating customer
needs and working towards customer satisfaction.

Implementing the marketing concept often means more than simply responding to customers’
stated desires and obvious needs, Customer- driven company’s research on current customers
to deeply learn about their desires, gather new product and service ideas and test proposed
product improvements.

The marketing concept takes an outside view that focuses on satisfying customer needs as a
path to profits.

The Societal Concept

It holds that the marketing strategy should deliver value to customers and society’s well
being.

It calls for sustainable marketing, socially and environmentally responsible marketing that
meet present needs of customers and businesses while also preserving or enhancing the
ability of future generations to meet their needs.

Companies should balance three considerations in setting their marketing strategies-

company profits, consumer wants and society’s interests.

Strategic Marketing Planning

All companies need strategies to meet changing markets.

No one strategy is best for all companies.
Each company must find the way that makes most sense, given its situation, opportunities,
objectives and resources.
Marketing plays an important role in strategic planning.
It provides information and other inputs to help prepare the strategic plan.
Strategic planning is also the first stage of marketing planning and defines marketing's role in the
organization.
The strategic plan guides marketing, which must work with other departments in the organization
to achieve strategic objectives.
Here we look at the three stages of strategic market planning: first, the strategic plan and its
implications for marketing; secondly, the marketing process; and thirdly, ways of putting the
plan into action.

The Planning Process

Putting plans into action involves four stages: analysis, planning, implementation and control.
ANALYSIS
Planning begins with a complete analysis of the company's situation. The company must analyse
its environment to find attractive opportunities and to avoid environmental threats. It must
analyze company strengths and weaknesses, as well as current and possible marketing actions, to
determine which opportunities it can best pursue. Analysis feeds information and other inputs to
each of the other stages.

PLANNING.
Through strategic planning, the company decides what it wants to do with each business unit.
Marketing planning involves deciding marketing strategies that will help the company attain its
overall strategic objectives. Marketing, product or brand plans are at the centre of this.

IMPLEMENTATION
Implementation turns strategic plans into actions that will achieve the company's objectives.
People in the organization that work with others both inside and outside the company implement
marketing plans.

CONTROL
Control consists of measuring and evaluating the results of plans and activities, and taking
corrective action to make sure objectives are being achieved. Analysis provides information and
evaluations needed for all the other activities.

The Strategic Plan

The strategic plan contains several components: the mission, the strategic objectives, the
strategic audit, SWOT analysis, portfolio analysis, objectives and strategies. All of these feed
from and feed into marketing plans.

The Mission
A mission states the purpose of a company. Firms often start with a clear mission held within the
mind of their founder. Then, over time, the mission fades as the company acquires new products
and markets.

A mission statement is a statement of the organization's purpose -what it wants to accomplish in

the larger environment, A clear mission statement acts as an 'invisible hand' that guides people in
the organization, so that they can work independently and yet collectively towards overall
organizational goals.
Traditionally, companies have defined their business in product terms ('we manufacture
furniture'), or in technological terms ('we are a chemical-processing firm'). But mission
statements should be market-oriented.

Management should avoid making its mission too narrow or too broad.
A lead pencil manufacturer that says it is in the communication equipment business is stating its
mission too broadly.
A mission should be: Realistic. Specific. Distinctive and Motivating.

Visions guide the best missions. A vision is a contagious dream, a widely communicated
statement or slogan that captures the needs of the time.

The fertilizer division ,Minerals & Chemical Corporation's does not say that its mission is to
produce fertilizer. Instead, it says that its mission is to increase agricultural productivity'.

Objectives should be SMART

Specific
Measurable
Attainable
Realistic
Timeous

The objective to 'increase our market share' is not as useful as the objective to 'increase our
market share to 15 per cent in two years'. The mission states the philosophy and direction of a
company, whereas the strategic
Objectives are measurable goals

Strategic Audit

The extemal audit or marketing environment audit examines the macro environment and task
environment of a company.

SWOT Analysis
SWOT analysis draws the critical strengths; weaknesses, opportunities and threats (SWOT) from
the strategic audit.
The audit contains a wealth of data of differing importance and reliability. SWOT analysis distils
these data to show the critical items from the internal and external audit.

The number of items is small for forceful communications, and they show where a business
should focus its attention.

Strengths

A firm’s strengths are its resources and capabilities that can be used as a basis for developing a
competitive advantage. Examples of such strengths include

 Patents
 Strong brand name
 Good reputation among customers
 Favorable access to distribution networks
 Customer brand loyalty
 Skilled workforce
 Adequate financial resources

Weaknesses

The absence of certain strengths may be viewed as a weakness for example each hof the
following may be considered as a weakness

 Lack of patent protection

 A weak brand name
 Poor reputation
 Outdated facilities
 Weak distribution network
 Inefficient staff
 Skills shortage

Opportunity

An opportunity is a favourable condition in the business organization’s environment which

enables it to consolidate its resources and strengthen its position for example

 Possible new markets and unfulfilled customer need

 Increasing demand of a company’s products
 Improved literacy rate in Zimbabwe
 Emerging new technologies
 Removal of international barriers
 Loosening of regulations
  Mergers, joint ventures and strategic alliances to increase capital base
 Government support

Threats

A threat is an unfavourable condition in the business organisations’s environment which causes a

risk for, or damage to, the organization

 Emerging stiff competition

 Shifts in customer tastes away from the organisation’s products and services
 Increased trade barriers for example embargos
 Entry of lower cost customers
 Recession in the economy
 Technological changes increase in taxation by government

The Business Portfolio

The business portfolio is the collection of businesses and products that make up the company. It
is a link between the overall strategy of a company and those of its parts.

The best business portfolio is the one that fits the company's strengths and weaknesses to
opportunities in the environment.

The company must analyze its current business portfolio and decide which businesses should
receive more, less or no investment and (2) develop growth strategies for adding products or
businesses to the portfolio.

Analysing the Current Easiness Portfolio

Portfolio analysis helps managers evaluate the businesses making up the company.
The company will want to put strong resources into its more profitable businesses and phase
down or drop its weaker ones.
Management's first step is to identity the key businesses making up the company. These are
strategic business units. A strategic business unit (SBC) is a unit of the company that has a
separate mission and objectives, and which can be planned independently from other company
businesses.
An SBU can be a company division, a product line within a division, or sometimes a single
product or brand.
The next step in business portfolio analysis calls for management to assess the attractiveness of
its various SBUs and decide how much support each deserves.
In some companies, this occurs informally. Management looks at the company's collection of
businesses or products and uses judgment to decide how much each SBU should contribute and
receive.
 Other companies use formal portfolio-planning methods. The purpose of strategic planning is to
find ways in which the company can best use its strengths to take advantage of attractive
opportunities in the environment.
So most standard portfolio-analysis methods evaluate SBUs on two important dimensions: the
attractiveness of the SBU's market or industry; and the strength of the SBU's position in that
market or industry. The best-known portfolio-planning methods are from the Boston Consulting
Group, a leading management consulting firm, and by General Electric and Shell.

THE BOSTON CONSULTING GROUP

Using the Boston Consulting Group (BCG) approach, a company classifies all its SBUs
according to the growth-share matrix shown above. On the vertical axis,. market growth rate
provides a measure of market attractiveness.
On the horizontal axis, relative market share serves as a measure of company strength in the
market. By dividing the growth share matrix as indicated, four types of SBU can be
distinguished:
1. Stars. Stars are high-growth, high-share businesses or products. They often need heavy
investment to finance their rapid growth. Eventually their growth will slow down, and they will
turn into cash cows,

2. Cash cows. Cash cows are low-growth, high-share businesses or products. These established
and successful SBUs need less investment to hold their market share. Thus they produce cash
that the company uses to pay its bills and to support other SBUs that need investment.

3. Question marks. Question marks are low-share business unit in high growth markets. They
require cash to hold their share, let alone increase it. Management has to think hard about
question marks - which ones they should build into stars and which ones they should phase out.

4. Dogs. Dogs are low-growth, low-share businesses and products. They may generate enough
cash to maintain themselves, but do not promise to be large sources of cash.

Once it has classified its SBUs, the company must determine what role each will play in the
future. There are four alternative strategies for each SBU.
The company can invest more in the business unit to build its share. It can invest just enough to
hold the SBU's share at the current level.
It can harvest the SBU, milking its short-term cash flow regardless of the long-term effect.
Finally, the company can divest the SBU by selling it or phasing it out and using the resources
elsewhere.

As time passes, SBUs change their positions in the growth-share matrix.

Each SBU has a life cycle. Many SBUs start out as question marks and move into the star
category if they succeed.
They later become cash cows as market growth falls, then finally die off or turn into dogs
towards the end of their life cycle.
The company needs to add new products and units continuously, so that some of them will
become stars and, eventually, cash cows that will help finance other SBUs.

Product Growth Strategies

The product/market expansion grid,'"shown below is a useful device for identifying growth
opportunities. This shows four routes to growth: market development, new markets, new
products and diversification

Ansoff Matrix
A tool managers use to help determine their strategic direction. It focuses on the ways companies
can grow through increased sales opportunities. It looks at the product in relation to its market
and help managers to identify their potential business opportunities.

Market penetration
This involves increasing market share within existing market segments. This can be achieved by
selling more products/services to established customers or by finding new customers within
existing markets.
Market Penetration seeks to achieve four main objectives
 Maintain or increase the market share, this can be achieved by a combination of
competitive pricing strategies, advertising, sales promotion and perhaps more resources
dedicated to personal selling
  Restructure a mature market by driving out competitors, this would require a more
aggressive promotional campaign supported by a pricing strategy designed to make the
market unattractive for competitors
 Increase usage by existing customers for example introducing loyalty schemes
 Secure dominance of growth markets.

Product development
This involves developing new products for existing markets. Product development involves
thinking about how new products can meet customer needs more closely and outperform the
products of competitors. This is achieved through Research and development

Market development
This strategy entails finding new markets for existing products. Market research and further
segmentation of markets helps to identify new groups of customers.
 Finding new geographical markets eg exporting the product to a new country
 Coming up with new product dimensions or packaging
 New distribution channels eg moving from selling via retail to selling using e-commerce
and mail order
 Different pricing policies to attract different or create new market segments

Diversification

This involves moving new products into new markets at the same time. It is the most risky
strategy. The more an organisation moves away from what it has done in the past the more
uncertainties are created. However, if existing activities are threatened, diversification helps to
spread the risk

Marketing Strategy

Target consumers are at the centre of the marketing strategy.

The company identifies the total market, divides it into smaller segments, selects the most
promising segments and focuses on serving them.
 It designs a marketing mix using mechanisms under its control: product, price, place and
promotion.
The company engages in marketing analysis, planning, implementation and control to find the
best marketing mix and to take action.
The company uses these activities to enable it to watch and adapt to the marketing environment

Target Consumers

To succeed in today's competitive marketplace, companies must be customer centred - winning

customers from competitors by delivering greater value.
However, before it can satisfy consumers, a company must first understand their needs and
wants.
There are too many kinds of consumer with too many kinds of need, and some companies are in
a better position to serve certain segments of the market.
As a consequence, each company must divide the total market, choose the best segments and
design strategies for profitably serving chosen segments better than its competitors do.

This process involves five steps: demand measurement and forecasting, market segmentation,
market targeting, market positioning and competitive positioning.

The Competitive. Environment

Companies aim to serve their customers, but they must do so in an environment with many other
Influences.
At the widest level is the macro environment of Political, Economic, Social and Technological
(PEST) influences that all organizations face.
Besides this companies also face a unique micro environment, including suppliers, competitors,
channels of distribution and publics - such as employees and the media - that are not necessarily
customers.

Demand Measurement and Forecasting

Suppose a company is looking at possible markets for : potential new product.
First, the company needs to estimate the current and future size of the market and its segments.
To estimate current market size, the company would identify all competing products, estimate
the current sales of these products, and determine whether the market is large enough to support
another product profitably that show strong growth prospects.

Growth potential may depend on the growth rate of certain age, income and nationality groups
that use the product. Growth may also relate to larger developments in the environment, such as
economic conditions, the crime rate and lifestyle changes.
For example, the future markets for quality children's toys and clothing relate to current birth
rates, trends in
Consumer affluence and projected family lifestyles. Forecasting the effect of these
environmental forces is difficult, but it is necessary in order to make decisions about the market.
The company's marketing information specialists will probably use complex techniques to
measure and forecast demand.

Market Segmentation
If the demand forecast looks good, the company next decides how to enter the market. The
market consists of many types of customers, products and needs, The marketer has to determine
which segments offer the best opportunity for achieving company objectives.

Consumers are grouped in various ways based on geographic factors (countries, regions, cities);
demographic factors (sex, age,income, education); psychographic factors (social classes,
lifestyles); and behavioral factors (purchase occasions, benefits sought, usage rates).

The process of dividing a market into groups of buyers with different needs, characteristics or
behavior, who might require separate products or marketing mixes, is market segmentation.

Market Targeting

After a company has defined market segments, it can enter one or many segments of a given
market.
Market targeting involves evaluating each market segment's attractiveness and selecting one or
more segments to enter.
A company should target segments in which it has a differential advantage over its competitors;
where it can generate the greatest customer value and sustain it over time.
A company with limited resources might decide to serve only one or a few special segments; this
strategy limits sales, but can be very profitable, alternatively, a company might choose to serve
several related segments - perhaps those with different kinds of customer, but with the same
basic wants.
Or perhaps a large company might decide to offer a complete range of products to serve all
market segments.
Most companies enter a new market by serving a single segment, and if this proves successful,
they add segments. Large companies eventually seek full market coverage

Positioning
After a company has decided which market segments to enter, it must decide what 'position' it
wants to occupy in those segments. A product's position is the place the product occupies in
consumers' minds.
If a product were perceived to be exactly like another product on the market, consumers would
have no reason to buy it. Market positioning gives a product a clear, distinctive and desirable
place in the minds of target consumers compared with competing products.
Marketers plan positions that distinguish their products from competing brands and give them
the greatest strategic advantage in their target markets.

For example, Ford says, 'Everything we do is driven by you'. Renault builds cars that 'take your
breath away', Mitsubishi's are 'designed to be driven'. BMW is 'the ultimate driving machine'.
Rolls-Royce cars are 'Strictly for the wealthy arrived individual', while the equally luxurious
Bentley is 'The closest a car can come to having wings'. Such simple statements are the backbone
of a product's marketing strategy.

In positioning its product, the company first identifies possible competitive advantages upon
which to build the position.
To gain competitive advantage, the company must offer greater value to chosen target segments,
either by charging lower prices than competitors or by offering more benefits to justify higher
prices.
However, if the company positions the product as offering greater value, it must deliver greater
value.
Effective positioning begins with actually differentiating the company's marketing offer so that it
gives consumers more value than is offered by the competition.

The company can position a product on only one important differentiating factor or on several.
However, positioning on too many factors can result in consumer confusion or disbelief. Once
the company has chosen-a desired position, it must take steps to deliver and communicate that
position to target consumers.

Marketing Strategies for Competitive Advantage

Providing excellent value and customer service is a necessary but not sufficient means of
succeeding in the marketplace.
Besides embracing the needs of consumers, marketing strategies must build an advantage over
the competition. The company must consider its size and industry position, then decide how to
position itself to gain the strongest possible competitive advantage. The design of competitive
marketing strategies begins with competitor analysis.

The company constantly compares the value and customer satisfaction delivered by its products,
prices, channels and promotion with those of its close competitors.

In this way it can discern areas of potential advantage and disadvantage.

The company must formally or informally monitor the competitive environment to answer these
and other important questions: Who are our competitors? What are their objectives and
strategies?
What are their strengths and weaknesses? How will they react to different competitive strategies
we might use? Which competitive marketing strategy a company adopts depends on its industry
position.

A firm that dominates a market can adopt one or more of several market leader strategies.
Developing the Marketing Mix
Once the company has chosen its overall competitive marketing strategy, it is ready to begin
planning the details of the marketing mix.
The marketing mix is one of the dominant ideas in modern marketing. We define marketing mix
as the set of controllable tactical marketing tools that the firm blends to produce the response it
wants in the target market.
The marketing mix consists of everything the firm can do to influence the demand for its
product. The many possibilities gather into four groups of variables known as the 'four Ps';
product, price, place and promotion.

The Marketing Plan

SECTION PURPOSE

Executive Summary Presents a quick overview of the plan for

management review.

Current Marketing Situation The marketing audit that presents background

data on the
Market, product,
 competition, and distribution

SWOT analysis identifies the company’s main strengths and

weaknesses and the
Main
opportunities and threats facing the product

Objectives and Issues Defines the company’s objectives in the area of

sales, market share and profits and issues that
will affect these objectives

Marketing Strategy Presents the broad marketing approach that

will be used
To achieve the
plan’s objectives

Action Programs Specifies what will be done or when it will be

done and what it will cost
Budgets A projected profit and loss statement that
forecasts the expected Financial outcomes
from the plan

Controls Indicates how the progress of the plan will be

monitored

Using SOSTAC

 Situation – where are we now?

 Objectives – where do we want to be?

 Strategy – how do we get there?

 Tactics – how exactly do we get there?

 Action – what is our plan?

 Control – did we get there?

ANALYSING THE MARKETING ENVIRONMENT

A company’s marketing consists of the actors and forces that affect the marketing management’s
ability to build and maintain successful relationships for example Xerox Company

Marketers must be environmental trend trackers and opportunity seekers.

The marketing environment consists of a micro environment and macro environment. The
microenvironment consists of actors close to the company that affect its ability to serve is
customers-the company, suppliers, marketing intermediaries, customer markets, competitors and
publics

Macro environment-demographic, economic, natural, technological, political and cultural forces.

The benefits of a formal environmental scanning

 Better general awareness of and responsiveness to environmental changes

 Monitor trends, issues and events and study their implications
 Better strategic planning and decision making (develop forecast, scenarios and
issues analysis as input to strategic decision making
 Greater effectiveness in dealing with government
 Improved industry and market analysis
 Better foreign investment and international marketing
 Improved resource allocation and diversification decisions
The
The Microenvironment
Microenvironment
Company
Company
Forces
Forces Affecting
Affecting aa
Publics
Publics
Company’s Supplier
Supplier
Company’s Ability
Ability to
to
Serve
Serve
Intermediari
Customers
Competitors
CustomersIntermediari
Competitors Physical
Physicaldistribution
distributionfirms
firm
Marketing
Marketingservices
servicesagencie
Customers
Customers Financial
agenci
intermediaries
Financial intermediaries

The marketing manager’s job is to build relationships with customers by creating value and
satisfaction

Marketing managers cannot do this alone; marketing success requires building relationships with
other company departments, suppliers, marketing intermediaries, customer markets, competitors
and publics and customers which combine to make the company’s delivery network.

The company

In designing marketing plans, marketing managers take into account groups such as top
management, finance, research and development (R&D), purchasing, operations, accounting etc,
all of these interrelated groups form the internal environment.

Top management sets the companies objectives, broad strategies and policies

Marketing managers make decisions within the strategies and plans by top management
Suppliers

Suppliers form an important link in the company’ overall customer value delivery network.

They provide the resources needed by the company to produce its goods and services.

Supplier problems can seriously affect marketing.

Marketing managers must watch supplier availability and costs.

Supply shortages or delays, labour strikes and events can cost sales in the short run and damage
customer satisfaction in the long run.

Rising supply costs may force price increases that can harm the company’s sales volume.

Marketing Intermediaries

Help the company to promote, sell and distribute its products to final buyers. They include
resellers, physical distribution firms, marketing services agents and financial intermediaries

Resellers are distribution channel firms that help companies find customers or make sales to
them. These include wholesalers and retailers who buy and resell merchandise

Physical distribution firms help company stock and move goods from their points of origin to
their destinations

Marketing services agencies are marketing research firms and marketing consulting firms that
help the company target and promote its products to the right markets

Financial intermediaries include banks, credit companies, insurance companies and other
businesses that help finance the transactions or insure against risks associated with buying and
reselling of goods.

Like suppliers, marketing intermediaries form an important component of the company’s overall
value delivery network. In its quest to create satisfying customer relationships the company must
do more than just optimise it own performance. It must partner effectively with marketing
intermediaries to optimise the importance of the entire system.

Competitors

Those who serve a target market with similar products and services. Conducting competitor
analysis is critical for success of the firm. A marketer must monitor its competitors’ offerings to
create strategic advantage.
The
The Macroenvironment
Macroenvironment
Demographic
Demographic
Forces
Forces that
that Shape
Shape
Socio-Cultural
Socio-Cultural
Opportunities Economic
Economic
Opportunities
and
and Pose
Pose Threats
Threats
to
Political
Politicalto aa Company
CompanyNatural
Natural
Technological
Technological

Demographic

Demography is the study of human populations in terms of size, density, location, age, gender,
race, occupation and other statistics

Changes in demographics mean changes in markets so they are very important to marketers.
 For example in china there was a period when the population was highly increasing and the
government passed on regulations limiting the families to one child only and these parents in
china spend most of their income on their only child, something like 40% and this information is
greatly important to a marketer.

Thus marketers keep a close eye on demographic trends and development in their markets, both
at home and abroad.

They analyse the changing age structure and changing family structures - Marrying later, fewer
children, working women, geographic population shifts- the migratory patterns (Moving to the
urban areas ), educational characteristics(Increased Education

Increased college attendance and white-collar workers) and population diversity- racial make-
up.

Economic
Economic Environment
Environment

Economic Key
Economic Key Changes
Changes
Economic
Development
Economic in
Development in Income
Income
Concerns
Concerns for
for
Marketers
Marketers

It consists of factors that affect consumer purchasing power and spending patterns. These are
inflation, government’s monetary policy, unemployment, exchange rates, interest rates, Gross
Domestic product.

The economic situation varies from country to country.

There are variations in the levels of income and living standards, interpersonal distribution of
income, economic organization, and occupational structure and so on.

These factors affect market conditions.

The level of development in a country and the nature of its economy will indicate the type of
products that may be marketed in it and the marketing strategy that may be employed in it.

In high-income countries there is a good market for a large variety of consumer goods.

But in low-income countries where a large segment does not have sufficient income even for
their basic necessities, the situation is quite different

Political Environment

Political
Political Environment
Environment
Increased
Increased Changing
Changing
LegislationKey
Legislation Enforcement
Key Enforcement
Competition,
Competition,fair
fairtrade
tradepractices
Prodt safety,
Prodt safety,
Trends
Trends in
practices
in the
the
Political
Political
Environment
Environment
Greater
Greater
Concern
Concern for
for
Ethics
Ethics
The main actors in the political environment include politicians, political parties, governments,
pressure groups that seek to influence governments and politicians. In analyzing this
environment marketers consider,

(a) Political stability- businesses prefer to operate in environments that are politically stable
as political unrest can be disruptive to business activities. In severe cases, political
stability results in loss of assets by business without any compensation.
(b) Changes in government- governments are formed by political parties. Governments exert
pressure on business and other organizations through enactment and enforcement of
legislation and formulation and implementation of government policies.

Technological Environment

Technological
Technological Environment
Environment
Rapid Pace of High R & D
Rapid Pace of High R & D
Change
Change Budgets
Budgets

Issues
Issues in
in the
the Technological
Technological
Environment
Environment

Focus
Focus on
on Minor
Minor Increased
Increased
Improvements
Improvements Regulation
Regulation
Technological advances are perhaps the most dramatic forces affecting today’s marketing
strategies and these are forces that create new product and market opportunities

Technology is vital for competitive advantage, and is a major driver of globalization. Consider
the following points:

Does technology allow for products and services to be made more cheaply and to a better
standard of quality?

Does the technology offer consumers and businesses more innovative products and services such
as Internet banking, new generation mobile telephones, etc?

How is distribution changed by new technologies e.g. books via the Internet, flight tickets,
auctions, etc?

Natural
Natural Environment
Environment
More
More Government
Government
Intervention
Intervention in
in natural
natural
resource
resource management
management
Factors
Affecting Shortages of
Higher
Higher Pollution
Pollution the Shortages of
Raw Material
Levels
Levels Natural (air, water,Material
Raw
Environment ( air, water,coal,
coal,fores
fore

Increased
Increased Costs
Costs
of
of Energy
Energy
Involves the natural resources that are needed as inputs by marketers or that are affected by
marketing activities.

Environmental problems including global warming, depletion of the ozone layer, depletion of
natural resources and the degradation of air, water and soil quality.

Marketers need to be aware of the threats and opportunities associated with changes in this area
the processes and materials used to produce products, scarcity of natural resources.

Marketers should also be aware of increased government intervention in natural resources

management.

The governments of different countries vary in their concern and efforts to promote a clean
environment for example the green to support environmental sustainability (USA)

SOCIO-CULTURAL FACTORS

The social and cultural influences on business vary from country to country. It is very important
that such factors are considered. Factors include:

(a) What is the dominant religion?

(b) What are attitudes to foreign products and services?

(c )Does language impact upon the diffusion of products onto markets?

(d) How much time do consumers have for leisure?

(e) What are the roles of men and women within society?

(f) How long are the population living? Are the older generations wealthy?

(g) Does the population have a strong/weak opinion on green issues?

CULTURE: Culture describes the kind of behaviour considered acceptable in society.

The prescriptive characteristic of culture simplifies a consumer’s decision-making process by

limiting product choices to those, which are socially acceptable.

The same feature creates problems for those products, which are not in time with culture.
The institutions and other forces that affect a society’s basic values, perceptions, preference, and
behaviours.

Core beliefs and values are passed on from parents to children and are reinforced by schools,
churches, business, and government.

Secondary beliefs and values are more open to change.

The major cultural dimensions include language, education, social organization, attitudes and
values, religion, and aesthetics

Notes

Question

Do a pest analysis of Zimbabwe

MARKETING INFORMATION SYSTEM

A marketing information system (MIS) consists of people, equipment and procedures to gather,
sort, analyze, evaluate and distribute needed, timely and accurate information to marketing
decision makers. The MIS begins and ends with marketing managers. First, it interacts with these
managers to assess their information needs. Next, it develops the needed information from
internal company records, marketing intelligence activities and the marketing research process.
Information analysis processes the information to make it more useful. Finally, the MIS
distributes information to managers in the right form at the right time to help them in marketing
planning, implementation and control.
Internal Data

Many companies build extensive data bases, electronic collections of consumer and markets
information obtained from data sources within the companies’ network. Marketing managers can
readily access and work with information from data sources within the company’s network.
Marketing managers can readily access and work with information in the data base to identify
marketing opportunities and problems and plan programs and evaluate performance.

Information in the data base can come from many sources. The marketing department furnishes
information on customer demographics, psychographics, sales transactions and website visits

The customer service departments keep records of customer satisfaction or service problems,
accounting department – prepares financial statements and keeps detailed records of sales, costs,
cash flows etc.

Internal data bases usually can be accessed more quickly and cheaply than other information
sources but they also present some problems because internal information is often collected for
other purposes. It may be incomplete or in wrong form for making decisions, data also ages
quickly.

Competitive Marketing Intelligence

Is a systematic collection and analysis of publicly available information about consumers,
competitors and developments in the market place.

The goal of competitive marketing intelligence is to improve strategic decision making by

understanding the consumer environment, assessing and tracking competitor’s actions and
providing early warnings of opportunities and threats

Good marketing intelligence can help marketers gain insights into how consumers talk about and
connect with their brands

Many companies send out teams of trained observers to mix and mingle with customers as they
use and talk about the company’s products.

Other companies monitor consumer’s online chats with the help of monitoring services.

Companies use marketing intelligence to gain early warnings of competitor moves, strategies,
new product launches etc.

Competitor intelligence can be collected from people inside the company, the employees,
suppliers, resellers and key customers.

Companies can get good information by observing competitors and monitoring their published
information, annual reports, publication, trade show exhibits, press release, web pages etc.

Marketing Research

In addition to marketing intelligence, information about general consumers, competitors, and

market place happenings, marketers also need formal studies that provide customer and market
insights for specific marketing information and decisions.

Marketing research is the systematic design, collection, analysis and reporting of data relevant to
a specific marketing situation facing an organisation

Marketing research gives insights into customer motivations, purchase behaviour and
satisfaction. It can help them to assess market potential and market share or measure the
effectiveness of pricing, product, distribution and promotion effectiveness.

The Marketing Research Process

Step 1: Problem Definition

The first step in any marketing research project is to define the problem.
 In defining the problem, the researcher should take into account the purpose of the study, the
relevant background information, what information is needed, and how it will be used in decision
making.

Problem definition involves discussion with the decision makers, interviews with industry
experts, analysis of secondary data, and, perhaps, some qualitative research, such as focus
groups.

Once the problem has been precisely defined, the research can be designed and conducted
properly.

Step 2: Development of an Approach to the Problem

Development of an approach to the problem includes formulating an objective or theoretical

framework, analytical models, research questions, hypotheses, and identifying characteristics or
factors that can influence the research design.

This process is guided by discussions with management and industry experts, case studies and
simulations, analysis of secondary data, qualitative research and pragmatic considerations.

Step 3: Research Design Formulation

A research design is a framework or blueprint for conducting the marketing research project.

It details the procedures necessary for obtaining the required information, and its purpose is to
design a study that will test the hypotheses of interest, determine possible answers to the research
questions, and provide the information needed for decision making.

Conducting exploratory research, precisely defining the variables, and designing appropriate
scales to measure them are also a part of the research design.

The issue of how the data should be obtained from the respondents (for example, by conducting
a survey or an experiment) must be addressed. It is also necessary to design a questionnaire and a
sampling plan to select respondents for the study.

More formally, formulating the research design involves the following steps

1. Secondary data analysis

2. Qualitative research
3. Methods of collecting quantitative data (survey, observation, and experimentation)
4. Definition of the information needed
5. Measurement and scaling procedures
 6. Questionnaire design
7. Sampling process and sample size
8. Plan of data analysis

Step 4: Field Work or Data Collection

Data collection involves a field force or staff that operates either in the field, as in the case of
personal interviewing (in-home, mall intercept, or computer-assisted personal interviewing),
from an office by telephone (telephone or computer-assisted telephone interviewing), or through
mail (traditional mail and mail panel surveys with prerecruited households).

Proper selection, training, supervision, and evaluation of the field force help minimize data-
collection errors.

Step 5: Data Preparation and Analysis

Data preparation includes the editing, coding, transcription, and verification of data. Each
questionnaire or observation form is inspected, or edited, and, if necessary, corrected.

Number or letter codes are assigned to represent each response to each question in the
questionnaire.

The data from the questionnaires are transcribed or key-punched on to magnetic tape, or disks or
input directly into the computer.

Verification ensures that the data from the original questionnaires have been accurately
transcribed, while data analysis, guided by the plan of data analysis, gives meaning to the data
that have been collected.

Discuss the Importance of carrying out Marketing Research?