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Title: CHINHOYI UNIVERSITY OF TECHNOLOGY SCHOOL OF BUSINESS SCIENCES AND MANAGEMENT DEPARTMENT OF INTERNATIONAL MARKETING


1
CHINHOYI UNIVERSITY OF TECHNOLOGYSCHOOL OF
BUSINESS SCIENCES AND MANAGEMENTDEPARTMENT OF
INTERNATIONAL MARKETING
  • PRINCIPLES OF MARKETING
  • BY
  • DR GERALD MUNYORO

2
COURSE OUTLINE
  • Introduction
  • The significance of information and research in
    marketing
  • Consumer behaviour
  • Market segmentation
  • Product
  • Price
  • Place
  • Promotion

3
Definitions of Marketing
  • Marketing is the management process that
    identifies, anticipates and satisfies customer
    requirements profitably
  • The Chartered Institute of Marketing
  • Marketing is the activity, set of institutions,
    and processes for creating, communicating,
    delivering, and exchanging offerings that have
    value for customers, clients, partners, and
    society at large
  • American Marketing Association

4
Definitions of Marketing
  • Marketing is a social and managerial process
    by which individuals and groups obtain what they
    want and need through creating, offering and
    exchanging products of value with others Kotler
    et al (2010)
  • The right product, in the right place, at the
    right time, and at the right price
  • Adcock et al (2001)

5
The Marketing concept
  • Choosing and targeting appropriate customers
  • Positioning your offering
  • Interacting with those customers
  • Controlling the marketing effort
  • Continuity of performance

6
The Marketing concept
  • Customer focus, profits, and integration of
    organizational efforts.
  • Customer orientation
  • Satisfying its customers at a profit
  • Determining the needs and wants of target
    markets
  • Discovering the wants of a target audience and
    then creating the goods and services to satisfy
    them

7
The Marketing concept
  • According to Levitt (1960), "the organization
    must learn to think of itself not as producing
    goods or services but as buying customers, as
    doing the things that will make people want to do
    business with it."
  • Since its publication, corporate leaders have
    moved from product-orientation toward
    market-orientation.
  • Firms overemphasize the satisfaction of customer
    wants and needs and as a result ignore
    competition.

8
The Marketing concept
  • Profitable
  • Offensive (rather than defensive)
  • Integrated
  • Strategic (is future orientated)
  • Effective (gets results)
  • Davidson (1972)

9
MARKETING MANAGEMENT PHILOSOPHIES
  • The role that marketing plays within a company
    varies according to the overall strategy and
    philosophy of each firm.
  • There are five alternative concepts under which
    organizations conduct their marketing activities
  • Production concept
  • Product concept
  • Selling concept
  • Marketing concept
  • Societal marketing concepts

10
Marketing Management
Management Orientations
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
11
Company Orientations Towards the Marketplace
Consumers prefer products that are widely
available and inexpensive
Production Concept
  • Consumers favor products that
  • offer the most quality, performance,
  • or innovative features

Product Concept
Consumers will buy products only if the company
aggressively promotes/sells these products
Selling Concept
Focuses on needs/ wants of target markets
delivering value better than competitors
Marketing Concept
12
Marketing Concept
  • The marketing management philosophy that holds
    that achieving organizational goals depends on
    determining the needs and wants of target markets
    and delivering the desired satisfactions more
    effectively and efficiently than competitors do.

13
Marketing Concept
  • The key to achieving its organizational goals
    consists of the company being more effective than
    competitors in creating, delivering, and
    communicating superior customer value to its
    chosen target markets.
  • Slogans ???????, ????, ???????, We do it all for
    you (Toyota).
  • Four pillars target market, customer needs,
    integrated marketing and profitability.

14
Societal Marketing Concept
  • The idea that the organization should determine
    the needs, wants, and interests of target markets
    and deliver the desired satisfactions more
    effectively and efficiently than competitors in a
    way that maintains or improves the consumers and
    societys well being. Companys negative
    effects on society
  • Conflict between consumer wants and long-term
    social welfare
  • Marketing managers should be concerned with
    social responsibility
  • Companys task is to determine needs and wants of
    target markets to satisfy them more effectively
    and efficiently than competitors --in a way that
    preserves or enhances the consumers and
    societys well-being.

15
Societal Marketing Concept
Society (Human Welfare)
Societal Marketing Concept
Company (Profits)
Consumers (Want Satisfaction)
16
Production Concept
  • The philosophy that consumers will favour
    products that are available and highly affordable
    and that management should therefore focus on
    improving production and distribution efficiency.
  • Consumers will favor those products that are
    widely available and low in cost.
  • Managers concentrate on achieving high production
    efficiency and wide distribution.

17
Production Concept
  • Consumers will prefer products that are widely
    available and inexpensive.
  • Focus achieving high production efficiency, low
    costs, and mass distribution.
  • It is useful when (1) the demand for a product
    exceeds the supply (2) the products cost is too
    high.
  • Examples Standard Raw Materials and Components,
    CD, LCD.

18
Product Concept
  • The philosophy that consumers will favour
    products that offer the most quality,
    performance, and innovative features. Consumers
    will favor those products that offer the most
    quality, performance or innovative features.
  • Managers in product-oriented organizations
    concentrate on making superior products and
    improving them over time.
  • The assumption g the customers will admire
    well-made products and can evaluate product
    quality and performance
  • This concept may lead to marketing myopia

19
Product Concept
  • Consumers will favor those products that offer
    the most quality, performance, or innovative
    features.
  • Focus making superior products and improving
    them over time.
  • Examples Digital Camera, CPU.
  • Better Mousetrap Fallacy
  • Marketing Myopia. (Theodoes Levitt, 1965)

20
Selling Concept
  • The idea that consumers will not buy enough of
    the organizations products unless the
    organization undertakes a large scale selling
    and promotion effort. Agressive selling and
    promotion
  • Assumptions are
  • Consumers must be convinced of buying company
    products
  • Company is powerful in generating effective
    selling and promotion to stimulate more buying
  • This concept is mostly used by firms which have
    overcapacity.
  • The aim is to sell what they make rather than
    make what the market wants.
  • Short-term profits are more important (customer
    dissatisfaction may occur)

21
Selling Concept
  • Consumers and businesses, if left alone, will
    ordinarily not buy enough of organizations
    products.
  • Focus undertake an aggressive selling and
    promotion effort.
  • Examples unsought goods encyclopedias, funeral
    plots, foundations.

22
Marketing management process
  • Analysis/Audit - where are we now?
  • Objectives - where do we want to be?
  • Strategies - which way is best?
  • Tactics - how do we get there?
  • (Implementation - Getting there!)
  • Control - Ensuring arrival

23
Marketing planning
  • Systematic futuristic thinking by management
  • better co-ordination of a companys efforts
  • development of performance standards for control
  • sharpening of objectives and policies
  • better prepare for sudden developments

24
Building relationships with consumers
  • Firms that embrace the marketing concept
    seek ways to build a long-term relationship with
    each customer. This is an important idea. Even
    the most innovative firm faces competition sooner
    or later. And trying to get new customers by
    taking them away from a competitor is usually
    more costly than retaining current customers by
    really satisfying their needs. Satisfied
    customers buy again and again. This makes their
    buying job easier, and it also increases the
    selling firms profits. Building mutually
    beneficial relationships with customers requires
    that everyone in an organization work together to
    provide customer value before and after each
    purchase. If there is a problem with a customers
    bill, the accounting people cant just leave it
    to the salesperson to straighten it out or, even
    worse, act like its the customers problem.
    Rather, its the firms problem.

25
Marketings role in non profit organisations
  • The marketing concept is as important for
    nonprofit organizations as it is for business
    firms. However, prior to 1970 few people in
    nonprofits paid attention to the role of
    marketing. Now marketing is widely recognized as
    applicable to all sorts of public and private
    nonprofit organizations Ñranging from government
    agencies, health care organizations, educational
    institutions, and religious groups to charities,
    political parties, and fine arts organizations.
    Some nonprofit organizations operate just like a
    business. For example, there may be no practical
    difference between thegift shop at a museum and a
    for-profit shop located across the street. On the
    other hand, some nonprofits differ from business
    firms in a variety of ways. As with any business
    firm, a nonprofit organization needs resources
    and support to survive and achieve its
    objectives. Yet support often does not come
    directly from those who receive the benefits the
    organization produces.

26
Marketing Research
  • Marketing research is the systematic gathering,
    recording and analyzing of data about problems
    relating to the marketing of goods and services.
  • A systematic inquiry whose objective is to
    provide information to solve managerial problems.
  • Marketing research is the function that links the
    consumer, customer, and public to the marketer
    through information--information used to identify
    and define marketing opportunities and problems
    generate, refine, and evaluate marketing actions
    monitor marketing performance and improve
    understanding of marketing as a process.
    Marketing research specifies the information
    required to address these issues, designs the
    method for collecting information, manages and
    implements the data collection process, analyzes
    the results, and communicates the findings and
    their implications.
  • American Marketing Association

27
Marketing Research
  • Market research will give you the data you need
    to identify and reach your target market at a
    price customers are willing to pay.
  • Research provides you with the knowledge and
    skills needed for the fast-paced decision-making
    environment.
  • Applied Research
  • Emphasis on solving practical (specific) problems
  • It could be exploring opportunities also
  • Rectifying an inventory system that is resulting
    into lost sales
  • Opportunity to increase stockholder wealth by
    acquiring another firm
  • Pure Research/Basic Research
  • Emphasis on problem solving but of a general
    nature (not specific)
  • Effect of coupon as against rebate to stimulate
    demand

28
Consumer behaviour
  • Those activities directly involved in obtaining ,
    consuming and disposing of products and services,
    including the decision processes that precede and
    follow these actions
  • You cannot take the consumer for granted any
    more
  • Therefore a sound understanding of consumer
    behaviour is essential for the long run success
    of any marketing program
  • Logical Positivism
  • Understanding and predicting consumer behaviour
  • Cause and effect relationships that govern
    persuasion and/or education
  • Post Modern to understand consumption behaviour
    without any attempt to influence it

29
Consumer behaviour
  • MEET THE NEW CONSUMERand smile when you do
    because she is your boss. It may not be the
    person you thought you knew. Instead of choosing
    from what you have to offer, she tells you what
    she wants. You figure it out how to give it to
    her.-Fortune Editor
  • A new product must satisfy consumer needs, not
    the needs and expectations of management
  • Understanding and adapting to consumer motivation
    and behaviour is not an option it becomes a
    necessity for competitive survival

30
Consumer behaviour
  • Consumer sovereignty presents a formidable
    challenge but skilful marketing can affect both
    motivation and behaviour if the product or
    service offered is designed to meet consumer
    needs and expectations.
  • A sales success occurs because demand either
    exists already or is latent and awaiting
    activation by the right marketing offering.

31
Consumer behaviour
  • Dominant forces shaping Consumer Research
  • Factors that move an economy from
    Production-driven to Market-driven
  • Level of sophistication with which human
    behaviour is understood in psychology and other
    behavioural sciences

32
Consumer behaviour
  • Motivational Research
  • It seeks to learn what motivates people in making
    choices. The techniques are such as to delve into
    the conscious, subconscious and the unconscious.
  • women dont buy cosmetics, they buy hope.
  • women bake cakes out of the unconscious desire
    to give birth

33
Consumer behaviour
  • The advice to footwear salesmen should be Dont
    sell shoes sell lovely feet
  • Marketers must contend with small changing
    segments of highly selective buyers intent on
    receiving genuine value at the lowest price
  • All managers must become astute analysts of
    Consumer motivation and Behaviour
  • Three foundations for marketing decisions
  • Experience
  • Intuition
  • Research

34
Consumer behaviour
  • Enhancing Consumer Value-added
  • Marketers have to constantly innovate after
    understanding their consumers to strip out costs
    permanently by focusing on what adds value for
    the customer and eliminating what doesnt.
  • Individualised Marketing
  • A very personal form of marketing that
    recognises, acknowledges, appreciates and serves
    individuals who become or are known to the
    marketer.
  • Data based marketing DM
  • Customized marketing

35
Consumer behaviour
  • Variables involved in understanding consumer
    behaviour
  • Stimulus ads, products, hungerpangs
  • Response physical/mental reaction to the
    stimulus
  • Intervening variables mood, knowledge,
    attitude, values, situations, etc

36
Overall Model of Consumer Behaviour
External Influences
Decision Processes
Culture
Subculture
Demographics
Problem Recognition
Social status
Reference groups
Self-Concept Learning
Information Search
Family
Marketing Activities
Alt Eval Selection
Internal Influences
Outlet select Purchase
Perception
Learning
Memory
Motives
Postpurchase Processes
Personality
Emotions
Attitudes
37
Marketing Environment
  • A companys marketing environment consists
    of the actors and forces outside marketing that
    affect marketing managements ability to develop
    and maintain successful relationships with its
    target customers.
  • 1). Being successful means being able to
    adapt the marketing mix to trends and changes
    this environment.
  • 2). Changes in the marketing environment are
    often quick and unpredictable.
  • 3). The marketing environment offers both
    opportunities and threats.
  • 4). The company must use its marketing
    research and marketing intelligence systems to
    monitor the changing environment.
  • 5). Systematic environmental scanning helps
    marketers to revise and adapt marketing
    strategies to meet new challenges and
    opportunities in the marketplace.

38
Marketing Environment
  • Includes
  • Micro environment actors close to the company
    that affect its ability to serve its customers.
  • Macro environment larger societal forces that
    affect the microenvironment.
  • Considered to be beyond the control of the
    organization.

39
Marketing Environment
  • 1. Micro Environmental
  • The microenvironment consists of five
    components.
  • The first is the organizations internal
    environmentits several departments and
    management levelsas it affects marketing
    management's decision making.
  • The second component includes the marketing
    channel firms that cooperate to create value the
    suppliers and marketing intermediaries
    (middlemen, physical distribution firms,
    marketing-service agencies, financial
    intermediaries).
  • The third component consists of the five types of
    markets in which the organization can sell the
    consumer, producer, reseller, government, and
    international markets.

40
Marketing Environment
  • The fourth component consists of the competitors
    facing the organization.
  • The fifth component consists of all the publics
    that have an actual or potential interest in or
    impact on the organizations ability to achieve
    its objectives financial, media, government,
    citizen action, and local, general, and internal
    publics.
  • - So the microenvironment consists of six
    forces close to the company that affect its
    ability to serve its customers
  • a. The company itself (including
    departments).
  • 1). Top management is responsible for
    setting the companys mission, objectives, broad
    strategies, and policies. 2). Marketing managers
    must make decisions within the parameters
    established by top management. 3). Marketing
    managers must also work closely with other
    company departments. Areas such as finance, R
    D, purchasing, manufacturing, and accounting all
    produce better results when aligned by common
    objectives and goals. 4). All departments must
    think consumer if the firm is to be successful.
    The goal is to provide superior customer value
    and satisfaction.
  • .

41
Marketing Environment
  • b. Suppliers.
  • Suppliers are firms and individuals that
    provide the resources needed by the company and
    its competitors to produce goods and services.
    They are an important link in the companys
    overall customer value delivery system.
  • 1). One consideration is to watch supply
    availability (such as supply shortages).
  • 2). Another point of concern is the
    monitoring of price trends of key inputs. Rising
    supply costs must be carefully monitored.

42
Marketing Environment
  • c. Marketing channel firms (intermediaries).
  • Marketing intermediaries are firms that
    help the company to promote, sell, and distribute
    its goods to final buyers.
  • 1). Resellers
  • are distribution channel firms that help
    the company find customers or make sales to them.
  • 2). These include wholesalers and retailers
    who buy and resell merchandise.
  • 3). Resellers often perform important
    functions more cheaply than the company can
    perform itself. However, seeking and working with
    resellers is not easy because of the power that
    some demand and use.
  • Physical distribution firms
  • help the company to stock and move goods from
    their points of origin to their destinations.
    Examples would be warehouses (that store and
    protect goods before they move to the next
    destination).
  • Marketing service agencies
  • (such as marketing research firms, advertising
    agencies, media firms, etc.) help the company
    target and promote its products.
  • Financial intermediaries
  • (such as banks, credit companies, insurance
    companies, etc.) help finance transactions and
    insure against risks.

43
Marketing Environment
  • d. Customer markets'. Competitors'. Publics.
  • The company must study its customer markets
    closely since each market has its own special
    characteristics. These markets normally include
  • 1). Consumer markets
  • (individuals and households that buy goods and
    services for personal consumption).
  • 2). Business markets
  • (buy goods and services for further processing or
    for use in their production process).
  • 3). Reseller markets
  • (buy goods and services in order to resell them
    at a profit).
  • 4). Government markets
  • (agencies that buy goods and services in order to
    produce public services or transfer them to those
    that need them).
  • 5). International markets
  • (buyers of all types in foreign countries).

44
Marketing Environment
  • e. Competitors.
  • Every company faces a wide range of
    competitors. A company must secure a strategic
    advantage over competitors by positioning their
    offerings to be successful in the marketplace. No
    single competitive strategy is best for all
    companies.

45
Marketing Environment
  • f. Publics
  • A public is any group that has an actual or
    potential interest in or impact on an
    organizations ability to achieve its objectives.
    A company should prepare a marketing plan for all
    of their major publics as well as their customer
    markets. Generally, publics can be identified as
    being
  • 1). Financial publics--influence the companys
    ability to obtain funds.
  • 2). Media publics--carry news, features, and
    editorial opinion.
  • 3). Government publics--take developments into
    account.
  • 4). Citizen-action publics--a companys decisions
    are often questioned by consumer organizations.
  • 5). Local publics--includes neighbourhood
    residents and community organizations.
  • 6). General publics--a company must be concerned
    about the general publics attitude toward its
    products and services.
  • 7). Internal publics--workers, managers,
    volunteers, and the board of directors.

46
Marketing Environment
  • 2. MACRO ENVIRONMENT
  • The Companys Macro environment
  • The company and all of the other actors operate
    in a larger macro environment of forces that
    shape opportunities and pose threats to the
    company.
  • The company and all of the other actors operate
    in a larger macro environment of forces thats
    have opportunities and pose threats to the
    company. There are six major forces (outlined
    below)in the companys macro environment. There
    are six major forces (outlined below) in the
    companys macro environment.
  • a. Demographic.
  • b. Economic.
  • c. Natural.
  • d. Technological.
  • e. Political.
  • f. Cultural.

47
Marketing Environment
  • a. Demographic Environment
  • Demography
  • is the study of human populations in
    terms of size, density, location, age, sex, race,
    occupation, and other statistics. It is of major
    interest to marketers because it involves people
    and people make up markets. Demographic trends
    are constantly changing. Some more interesting
    ones are.1). The worlds population (though not
    all countries) rate is growing at an explosive
    rate that will soon exceed food supply and
    ability to adequately service the population. The
    greatest danger is in the poorest countries where
    poverty contributes to the difficulties. Emerging
    markets such as China are receiving increased
    attention from global marketers.2). The most
    important trend is the changing age structure of
    the population. The population is aging because
    of a slowdown in the birth rate (in this country)
    and life expectancy is increasing.
  • The baby boomers
  • following World War II have produced a
    huge bulge in our population's age
    distribution. The new prime market is the middle
    age group (in the future it will be the senior
    citizen group). There are many subdivisions of
    this group.
  • a). Generation X--this group lies in the
    shadow of the boomers and lack obvious
    distinguishing characteristics. They are a very
    cynical group because of all the difficulties
    that have surrounded and impacted their group.
    b). Echo boomers
  • (baby boom lets) are the large growing
    kid and teen market. This group is used to
    affluence on the part of their parents (as
    different from the Gen Xers). One distinguishing
    characteristic is their utter fluency and comfort
    with computer, digital, and Internet
    technology(sometimes called Net-Gens).

48
Marketing Environment
  • c). Generational marketing is possible,
    however, caution must be used to avoid
    generational alienation. Many in the modern
    family now telecommute--work at home or in a
    remote office and conduct their business using
    fax, cell phones, modem, or the Internet. In
    general, the population is becoming better
    educated. The work force is becoming more
    white-collar. Products such as books and
    education services appeal to groups following
    this trend. Technical skills (such as in
    computers) will be a must in the future. The
    final demographic trend is the increasing ethnic
    and racial diversity of the population. Diversity
    is a force that must be recognized in the next
    decade. However, companies must recognize that
    diversity goes beyond ethnic heritage. One of the
    important markets of the future are that disabled
    people (a market larger any of our ethnic
    minority groups).

49
Marketing Environment
  • b. Economic Environment
  • The economic environment -includes those
    factors that affect consumer purchasing power and
    spending patterns. Major economic trends in the
    United States include
  • 1). Personal consumption (along with
    personal debt) has gone up (1980s) and the early
    1990s brought recession that has caused
    adjustments both personally and corporately in
    this country. Today, consumers are more careful
    shoppers.
  • 2). Value marketing
  • (trying to offer the consumer greater value
    for their dollar) is a very serious strategy in
    the 1990s. Real income is on the rise again but
    is being carefully guarded by a value-conscious
    consumer.
  • 3). Income distribution
  • is still very skewed in the U. S. and all
    classes have not shared in prosperity. In
    addition, spending patterns show that food,
    housing, and transportation still account for the
    majority of consumer dollars. It is also of note
    that distribution of income has created a
    two-tiered market where there are those that
    are affluent and less affluent. Marketers must
    carefully monitor economic changes so they will
    be able to prosper with the trend, not suffer
    from it.

50
Marketing Environment
  • c. Natural Environment
  • The natural environment -involves natural
    resources that are needed as inputs by marketers
    or that are affected by marketing activities.
    During the past two decades environmental
    concerns have steadily grown. Some trend analysts
    labelled the specific areas of concern were
  • 1). Shortages of raw materials.
  • Staples such as air, water, and wood
    products have been seriously damaged and
    non-renewable such as oil, coal, and various
    minerals have been seriously depleted during
    industrial expansion.
  • 2). Increased pollution
  • is a worldwide problem. Industrial damage
    to the environment is very serious. Far-sighted
    companies are becoming environmentally friendly
    and are producing environmentally safe and
    recyclable or biodegradable goods. The public
    response to these companies is encouraging.
    However, lack of adequate funding, especially in
    third world countries, is a major barrier.

51
Marketing Environment
  • 3). Government intervention
  • In natural resource management has caused
    environmental concerns to be more practical and
    necessary in business and industry. Leadership,
    not punishment, seems to be the best policy for
    long-term results. Instead of opposing
    regulation, marketers should help develop
    solutions to the material and energy problems
    facing the world.
  • 4). Environmentally sustainable strategies.
  • The so-called green movement has encouraged
    or even demanded that firms produce strategies
    that are not only environmentally friendly but
    are also environmentally proactive. Firms are
    beginning to recognize the link between a healthy
    economy and a healthy environment.

52
Marketing Environment
  • d. Technological Environment
  • The technological environment -includes
    forces that create new technologies, creating new
    product and market opportunities.
  • 1). Technology is perhaps the most dramatic
    force shaping our destiny.
  • 2). New technologies create new markets and
    opportunities.3). The following trends are worth
    watching
  • a). Faster pace of technological change.
    Products are being technologically outdated at a
    rapid pace.
  • b). There seems to be almost unlimited
    opportunities being developed daily. Consider the
    expanding fields of health care, the space
    shuttle, robotics, and biogenetic industries.
  • c). The challenge is not only technical but
    also commercial--to make practical, affordable
    versions of products.
  • d). Increased regulation. Marketers should be
    aware of the regulations concerning product
    safety, individual privacy, and other areas that
    affect technological changes. They must also be
    alert to any possible negative aspects of an
    innovation that might harm users or arouse
    opposition.

53
Marketing Environment
  • e. Political Environment
  • The political environment
  • includes laws, government agencies, and
    pressure groups that influence and limit various
    organizations and individuals in a given society.
    Various forms of legislation regulate business.
  • 1). Governments develop public policy to guide
    commerce--sets of laws and regulations limiting
    business for the good of society as a whole.
  • 2). Almost every marketing activity is subject to
    a wide range of laws and regulations. Some trends
    in the political environment include
  • - Increasing legislation to
  • a). Protect companies from each other.
  • b). Protecting consumers from unfair
    business practices.
  • c). Protecting interests of society against
    unrestrained business behaviour.

54
Marketing Environment
  • -Changing government agency enforcement.
    New laws and their enforcement will continue or
    increase.
  • 3). Increased emphasis on ethics and
    socially responsible actions. Socially
    responsible firms actively seek out ways to
    protect the long-run interests of their consumers
    and the environment.
  • a). Enlightened companies encourage their
    managers to look beyond regulation and do the
    right thing.
  • b). Recent scandals have increased concern
    about ethics and social responsibility.
  • c). The boom in e-commerce and Internet
    marketing has created a new set of social and
    ethical issues. Concerns are Privacy, Security,
    Access by vulnerable or unauthorized groups.

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Marketing Environment
  • f. Cultural Environment
  • The cultural environment
  • is made up of institutions and other
    forces that affect societys basic values,
    perceptions, preferences, and behaviours. Certain
    cultural characteristics can affect marketing
    decision-making. Among the most dynamic cultural
    characteristics are
  • 1). Persistence of cultural values.
    Peoples core beliefs and values have a high
    degree of persistence.
  • 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.
  • 2). Shifts in secondary cultural values.
    Since secondary cultural values and beliefs are
    open to change, marketers want to spot them and
    be able to capitalize on the change potential.
    Societys major cultural views are expressed in
  • a). Peoples views of themselves. People
    vary in their emphasis on serving themselves
    versus serving others. In the 1980s, personal
    ambition and materialism increased dramatically,
    with significant implications for marketing. The
    leisure industry was a chief beneficiary.
  • b). Peoples views of others. Observers
    have noted a shift from a me-society to a
    we-society. Consumers are spending more on
    products and services that will improve their
    lives rather than their image.

56
Marketing Environment
  • c). Peoples views of organizations.
  • People are willing to work for large
    organizations but expect them to become
    increasingly socially responsible. Many companies
    are linking themselves to worthwhile causes.
    Honesty in appeals is a must.
  • d). Peoples views of society.
  • This orientation influences consumption patterns.
    Buy American versus buying abroad is an issue
    that will continue into the next decade.
  • e). Peoples view of nature.
  • There is a growing trend toward peoples feeling
    of mastery over nature through technology and the
    belief that nature is bountiful. However, nature
    is finite. Love of nature and sports associated
    with nature are expected to be significant trends
    in the next several years.
  • f). Peoples views of the universe.
  • Studies of the origin of man, religion, and
    thought-provoking ad campaigns are on the rise.
    Currently, Americans are on a spiritual journey.
    This will probably take the form of spiritual
    individualism.

57
Market Segmentation
  • Market segmentation is a marketing strategy
    involves dividing a broad target market into
    subsets of consumers, businesses, or countries
    who have common needs and priorities, and then
    designing and implementing strategies to target
    them. Market segmentation strategies may be used
    to identify the target customers, and provide
    supporting data for positioning to achieve a
    marketing plan objective. Businesses may develop
    product differentiation strategies, or an
    undifferentiated approach, involving specific
    products or product lines depending on the
    specific demand and attributes of the target
    segment.
  • A marketing term referring to the aggregating of
    prospective buyers into groups (segments) that
    have common needs and will respond similarly to a
    marketing action. Market segmentation enables
    companies to target different categories of
    consumers who perceive the full value of certain
    products and services differently from one
    another.

58
Types of Market Segmentation
  • The following are the most common forms of market
    segmentation practices
  • Geographic Segmentation
  • Marketers can segment according to
    geographic criterianations, states, regions,
    countries, cities, neighborhoods, or postal
    codes.The geo-cluster approach combines
    demographic data with geographic data to create a
    more accurate or specific profile.1 With
    respect to region, in rainy regions merchants can
    sell things like raincoats, umbrellas and
    gumboots. In hot regions, one can sell summer
    clothing. A small business commodity store may
    target only customers from the local
    neighborhood, while a larger department store can
    target its marketing towards several
    neighborhoods in a larger city or area, while
    ignoring customers in other continents.
    Geographic Segmentation is important and may be
    considered the first step to international
    marketing, followed by demographic and
    psychographic segmentation. The use of national
    borders is the institutional use of geographic
    segmentation, although geographic segments may be
    classified by identified geological regions.

59
Types of Market Segmentation
  • Demographic Segmentation
  • Segmentation according to demography is based
    on variables such as age, gender, occupation and
    education level 2 or according to perceived
    benefits which a product/service may provide.
    Benefits may be perceived differently depending
    on a consumer's stage in the life cycle.
    Demographic segmentation divides markets into
    different life stage groups and allows for
    messages to be tailored accordingly.
  • Behavioral Segmentation
  • Behavioral segmentation divides consumers into
    groups according to their knowledge of, attitude
    towards, usage rate, response,4 loyalty status,
    and readiness stage to a product. There is an
    extra connectivity with all other market related
    sources.

60
Types of Market Segmentation
  • Psychographic Segmentation
  • Psychographic segmentation, which is sometimes
    called Lifestyle. This is measured by studying
    the activities, interests, and opinions (AIOs) of
    customers. It considers how people spend their
    leisure,6 and which external influences they
    are most responsive to and influenced by.
    Psychographic is highly important to
    segmentation, because it identifies the personal
    activities and targeted lifestyle the target
    subject endures, or the image they are attempting
    to project. Mass Media has a predominant
    influence and effect on Psychographic
    segmentation. Lifestyle products may pertain to
    high involvement products and purchase decisions,
    to speciality or luxury products and purchase
    decisions.

61
Types of Market Segmentation
  • Cultural Segmentation
  • Cultural Segmentation7 is used to classify
    markets according to cultural origin. Culture is
    a strong dimension of consumer behaviour and is
    used to enhance customer insight and as a
    component of predictive models. Cultural
    segmentation enables appropriate communications
    to be crafted to particular cultural communities,
    which is important for message engagement in a
    wide range of organisations, including
    businesses, government and community groups.
    Cultural Segmentation can be applied to existing
    customer data to measure market penetration in
    key cultural segments by product, brand, channel
    as well as traditional measures of recency,
    frequency and monetary value. These benchmarks
    form an important evidence-base to guide
    strategic direction and tactical campaign
    activity, allowing engagement trends to be
    monitored over time.
  • Cultural Segmentation can also be mapped
    according to state, region, suburb and
    neighbourhood. This provides a geographical
    market view of population proportions and may be
    of benefit in selecting appropriately located
    premises, determining territory boundaries and
    local marketing activities.

62
The Benefits of Segmentation
  • While there may be theoretically 'ideal' market
    segments, in reality, every organization engaged
    in a market will develop different ways of
    imagining market segments, and create product
    differentiation strategies to exploit these
    segments. The market segmentation and
    corresponding product differentiation strategy
    can give a firm a temporary commercial advantage.
    Most market segmentations are the techniques used
    to attract the right customer.
  • In essence, the marketing objectives of
    segmentation analysis are
  • To reduce risk in deciding where, when, how, and
    to whom a product, service, or brand will be
    marketed
  • To increase marketing efficiency by directing
    effort specifically toward the designated segment
    in a manner consistent with that segment's
    characteristics
  • Market segmentation is a twofold process that
    includes
  • Identifying and classifying people into
    homogeneous groupings, called segments
  • Determining which of these segments are viable
    target markets.

63
The Benefits of Segmentation
  • There are several advantages of segmentation.
  • 1) Focus of the Company Segmentation is an
    effective method to increase the focus of a firm
    on market segments. If you have better focus,
    obviously you will have better returns. Numerous
    automobile companies have started focusing on
    small car segments. This is nothing else but a
    company changing its focus for better returns.
    Thus companies base their strategy completely on
    a new segment which increases its focus and
    profitability.
  • 2) Increase in competitiveness Naturally, once
    your focus increases, your competitiveness in
    that market segment will increase. If you are
    focusing on youngsters, your brand recall and
    equity with youngsters will be very high. Your
    market share might increase and the chances of a
    new competitor entering might be low. The brand
    loyalty will definitely increase. Thus market
    segmentation also increases competitiveness of a
    firm from a holistic view.

64
The Benefits of Segmentation
  • 3) Market expansion Geographic segmentation is
    one type of segmentation where expansion is
    immediately possible. If you have your market
    strategy on the basis of grography, then once you
    are catering to a particular territory, you can
    immediately expand to a nearby territory. In the
    same way, if you are targeting customers based on
    their demography (Ex reebok targets fitness
    enthusiasts) then you can expand in similar
    products (Ex reebok expanding with its fitness
    range of clothes and accessories). Segmentation
    plays a crucial role in expansion. You cannot
    expand in a territory when you have no idea of
    which segment of customers you will be meeting.
  • 4) Increases profitability Segmentation
    increases competitiveness, brand recall, brand
    equity, customer retention, communications. Thus
    if it is affecting so many factors of your
    business, then definitely it affects the
    profitability of the firm. Do you ever see people
    negotiating in a Nike, Gucci or BMW showrooms?
    You wont. One of the USPs of these brand is
    their segmentation. They are in fact targeting
    segments which have no need of bargaining or
    negotiation. Thus their profitability is high.

65
Publicity Strategy
  • 1. Types
  • A. Press release
  • B. Feature article
  • C. Captioned photograph
  • D. Press conference
  • E. Letters to editor/editorials
  • F. Films/tapes/videos
  • 2. Requirements
  • 3. Limitations

66
Public Relations
  • Public relations - a public organizations
    communications and relationships with its various
    audiences.
  • Helps a firm establish awareness of goods and
    services and builds a positive image of them.
  • Publicity - stimulation of demand for a good,
    service, place, idea, person, or organization by
    disseminating news or obtaining favorable unpaid
    media presentations.
  • Good publicity can promote a firms positive
    image.
  • Negative publicity can cause problems.

67
The Benefits of Public Relations
  • Credibility
  • Lets face it consumers today are more cautious
    when spending. Thats why having credibility is
    so essential to a successful business. Because PR
    and advertising are very different things,
    consumers are likely to give credibility to your
    business when they see it mentioned in the media
    (uncompensated!) compared to when they see your
    ads or billboards. Studies show that PR has 7
    times more credibility among consumers than
    advertising!
  • 2. Target Market
  • With PR, its much easier to aim and fire on that
    target market you are hoping to reach. Media
    sources can place the information that is right
    up the consumers alley and give them the required
    information they need. If you are an accountant
    hoping to generate some new clientele, placing an
    ad in a teen magazine likely wont help you. But
    a well written article smack dab in the middle of
    the finance section will probably lead you right
    where you want to be. These target markets are
    especially vital in businesses that only appeal
    to a small target market.

68
  • 3. Cost
  • While its true that PR can be costly if you hire
    the wrong firm, considering the cost of other
    promotional advertising, it is on the cheap end
    of the scale. When you step back and look at the
    cost of PR considering the possible leads when
    reaching the right market, youll find that the
    cost is very beneficial.
  • 4. Lead Generation
  • The media placement that you receive from PR is
    long lasting. Youll likely have an initial flood
    of leads, and then as time wheres on, youll
    notice that there is still the possibility of
    lead generation from just one good media mention.
    As people and businesses stumble on the PR, it
    will still be effective at generating leads (thus
    leading back to our 3 point cost).
  • 5. Image
  • PR isnt just promoting an item or a special. PR
    takes your entire business and puts it in the
    lights. This helps create an image of your
    company and creates the possibility of a more
    well rounded patronage. Effective PR leaves your
    company with a positive image, which is always
    helpful in the future.

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The Disadvantages of PR
  • The major disadvantage of PR is the potential for
    not completing communication process. While PR
    messages can break through the clutter of
    commercials, the receiver may not make the
    connection to the source. Many firms PR efforts
    are never associated with their sponsors in the
    public mind.
  • PR may also mis-fire through mis management and a
    lack of co-ordination with the marketing
    department. When the marketing and PR department
    operate independently, there is a danger of
    inconsistence communication, redundancies in
    efforts and so on.
  • The key to effective PR is to establish a good
    program, worthy of public interest and manage it
    properly. To determine if this program is
    working, the firm must measure the effectiveness
    of the PR effort.

70
RECOMMENEND TEXTBOOKS
  •  Kotler, P,. Armstrong, G,. Wong, V and Saunders,
    J (2010) Principles of Marketing Pearson
    Education Limited Harlow, Engand, UK
  • Armstrong, G,. Kotler, P,. Harker, M and Brennan,
    R (2012) Marketing A Introduction Pearson
    Education Limited Harlow, Engand, UK
  • Kotler, P,. Keller, K,. L,. Brady,. M,. Goodman,
    M and Hansen, T (2009) Marketing Management
    Pearson Education Limited Harlow, Engand, UK
  • Pride, W,. M and Ferrell, O,. C (2012)
    Foundations of Marketing Cengage Learning
    South-Western USA

71
RECOMMENEND TEXTBOOKS
  • Jobber, D (2004) Principles and Practice of
    Marketing McGraw-Hill International (UK) Limited
  • Brassington, F and Pettitt, S (2006) Principles
    of Marketing Pearson Education Limited Harlow,
    Engand, UK
  • Adcock, D,. Halborg, A,. L,. Ross, C (2001)
    Marketing Principles and Practice Pearson
    Education Limited Harlow, Engand, UK
  • Perreault, J,. R,. Cannon, J and McCarthy, E,. J
    (2011) Essentials of Marketing McGraw-Hill
    International (UK) Limited
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