consumer costs and benefits organization

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MARKETING PRESENTATION FOR

PROFESSIONAL CERTIFICATE IN MARKETING

OVERVIEWING THE MARKETING PROCESS: MARKETING AS AN EXCHANGE PROCESS:

Consumer Costs and benefits Organization

Individua

Patient

Student

Volunteer

Voter

Reader

Source: Principles of marketing by Dr. Frances Brassington & Dr Stephen Pettitt; chp 1 pg 7

Slake thirstInsurance premiums

Medical treatment

FeesEducation

TimeSense of community service

VoteSense of economic/social progress

TaxesA good read

HPrivate hospital

University

Non-profit Youth group

Political party

Public library

Jude Asongwe

Created

by

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http://www.valuebasedmanagement.net/

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MARKETING PRESENTATION FOR PROFESSIONAL CERTIFICATE IN MARKETING

Consumer buying decision making process and its influencing factors:

Individual influences

•Personality•Perception•Motivation•Attitude.

Group influences

•Social class•Culture/

subculture•Reference

groups •family

Situational influences

•Sociocultural•Technological

•Economic/competitive

•Political/legal

Marketing mix•Product

•Price•Place

•promotion

Problem recognition

Information search

Information evaluation/evaluation of

alternatives

Purchase decision

Post-purchase evaluation

Decision-making process

Jude Asongwe

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Summary: PROFESSIONAL CERTIFICATE IN MARKETING IS DIVIDED IN TO FOUR PARTS:

Part A: Marketing Fundamentals Part B: Marketing Environment Part C: Marketing in Practice Part D: Customer Communication.

Producer

Producer

RetailerProducer

Retailer

Consumer

Consumer

Wholesaler

Agent

Consumer

Producer Wholesaler Retailer Consumer

Producer Business Customer

Producer Business distributor Business Customer

Producer Sales branch Business customer

Producer Sales branch Business distributor Business customer

DISTRIBUTION CHANNEL IN ORGANISATIONAL MARKET

DISTRIBUTION CHANNEL IN CONSUMER MAREKT

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CONTENTS of PART A: Marketing Fundamentals

The development of marketing and marketing orientation

Marketing planning and budgeting

The marketing mix: Product

The marketing mix: new product development and portfolio managementThe marketing mix: price

The marketing mix: placeThe marketing mix: promotionThe marketing mix: People (service and customer care).Marketing in context

Marketing Fundamentals

Source: CIM course book

Jude Asongwe

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MARKETING FUNDAMENTALS: LEARNING OBJECTIVES

By the end of this module you should be able to: Understand the development of marketing and its changing

role within a variety of organizations Understand the various tools of the marketer and evaluate

their strengths and weaknesses Recognise the impact achievable through modifying the

marketing mix for (re)positioning the product and service offerings

Understand the importance of planning in the management of the marketing activity

Develop an awareness and understanding of the technological advances in marketing and the impact of information technology on the marketing mix decisions

Understand the importance of customers and their behaviour relating to marketing decisions

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Marketing Fundamentals-

The development of marketing and marketing orientation.

What is marketing?

The marketing concept: marketing orientation.

Factors contributing to the need to be marketing oriented

Marketing as a form of competition: creating customer value

Building a marketing culture

Difficulties in managing the introduction of a customer-oriented culture Market segmentation

The tools of marketing management: the marketing mix

Overviewing the marketing process: marketing as an exchange process. The changing role of marketingMarketing Fundamentals


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What is Marketing?

Marketing is ‘the management process which identifies, anticipates and satisfies customer requirements efficiently and profitably. (CIM definition)

Consists of individual and organizational activities that facilitate and expedite satisfying exchange relationships in a dynamic environment through the creation, distribution, promotion and pricing of goods, services and ideas ( by Dibb, 2000)

Marketing Fundamentals.


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Marketing means working with markets to bring about exchanges for the purpose of satisfying human needs and wants. It is a process by which individuals and groups obtain what they need and want creating and exchanging products and value with others. (Kotler, 2000).



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Marketing Fundamentals- THE MARKETING CONCEPT ( MARKETING ORIENTATION).1960s-today

The marketing concept focuses on customers. A company that adopts the marketing

concepts does the following1. Puts customers at the centre of all business

decision-making and planning2. Marketing research to better satisfy

customers.



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Marketing Fundamentals : Other forms of orientation. Production-orientation(1900-1930s) Product-orientation Sales-orientation(1930s-1960s)



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Marketing Fundamentals– The Production Orientation or concept

The production concept concentrates on production and distribution economies.

This is based on the notion that customers will choose lower priced products that are readily available.



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Marketing Fundamentals- Marketing Orientation- PRODUCT ORIENTATION



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Marketing Fundamentals: The sales (selling) concept or

orientation.

This is of course based on the notion that customers need to be persuaded to buy through aggressive selling and promotion.

Marketing FundamentalsSource: CIM course book

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MARKETING HISTORY AND BUSINESS ORIENTATIONS - SUMMARY

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Marketing fundamentals: Factors underpinning the need to be market oriented. Demand Average disposable income General level of education Mass media/ access to information Supply/industry capacity Competition Broad political, economic,

social,technological, ecological and legal factors (PESTEL) factors.



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Marketing Fundamentals- : Marketing as a form of competition: creating customer value

Marketers are recognizing that it is important to be competitor as well as customer oriented.

The achievement of organisational and marketing objectives rests on whether the company can beat the competition

Provision of value to customers is important Marketing research will help better satisfy customers Good customer service and customer care Market intelligence about competitors. Reliability of service, speedier delivery, low prices, high

quality; can create superior customer value. Superior customer value should reflect customers needs.

Source:

Marketing Fundamentals Source: CIM course book

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Marketing fundamentals-

Building a marketing culture

‘Thinking about customers’ through how we view and define the business is the first step in developing a marketing culture.

Thinking about customers must permeate all functions and levels of the organization and not just the marketing function or even senior management.

Communication among managers and employees from different function is important

Marketing Research and market intelligence. Co-ordination between functions based on customer

needs. Marketing planning Company-wide communication on customer needs. Right attitudes, practices throughout the company. Source: CIM course book

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Marketing Fundamentals- ASSESSING THE EXTENT OF THE MARKETING CULTURE:

An Assessment of the following issues are concerned in order to know the extend to which businesses have been successful or unsuccessful in marketing orientation

1. Management2. Employees3. Products4. Services5. Competitors6. Prices7. Distribution of products8. Market9. Strategies



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Marketing Fundamentals- DIFFICULTIES IN MANAGING THE INTRODUCTION OF A CUSTOMER-ORIENTED CULTURE:

Managers fail to realize or understand the true concept of market orientation.

Resistance to change Power struggle between departments. Separation of the responsibility for marketing strategy and

implementation. Lack of co-ordination Lack of technology/inability to use latest technology. Poor planning Influence of macro factors (PESTEL Analysis) Influence of micro factors: Employees, management,

suppliers, distributors, media and competitors. Inadequate finance No strategic direction



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Marketing fundamentals – MARKETING AS A MANAGEMENT FUNCTION:

Marketing is the function of management. Management has to control, co-ordinate, plan, motivate, analyze and

organize marketing activities: The marketing manager has to perform the following: 1. Marketing / market research2. Planning3. Environmental analysis4. Market segmentation, targeting and positioning.5. Marketing mix implementation Marketing is not only the function of the marketing manager. Marketing should be part and parcel of each and every department of

the company. The various departments such as Human Resource, Production,

Logistics, Finance, Stock and Technical departments have to corporate with the marketing department


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Marketing fundamentals – MARKET SEGMENTATIONLearning objectives

1. To understand what is market segmentation2. To examine the reasons for segmenting the

market3. To examine the bases for segmenting the

market.4. To examine the importance of segmenting

the market.



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Marketing Fundamentals - MARKET SEGMENTATION

Definition

What is market segmentation?

Market segmentation is the process of identifying and

classifying customers according to their different needs and

wants.


24

Marketing Fundamentals- MARKET SEGMENTATION. Definition continues

It is the division of market in to groups of customers and using the marketing mix to target customers in these groups.

It is the splitting up of customers in to segments and using the marketing mix to target customers.


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Marketing fundamentals- MARKET SEGMENTATION

REASONS FOR SEGMENTING THE MARKET Because of differences that exist among

customers with regards to the following:1. Age Psychology2. Sex Life cycle3. Marital status Life style.4. Behaviour Inadequate finance.

5. Location6. Income7. Culture8. Social statusMarketing Fundamentals


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THE CRITERIA FOR SEGMENTING THE MARKET

Identifiable Profitable Recognisable Accessible Actionable Stable (reliable) Substantial Measurable Affordable



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BASES FOR SEGMENTING THE MARKET IN CONSUMER MARKET Demographic: age,gender,income,occupation, marital

status and Life cycle Geographic: regions, counties, nations, cities, town,

villages and continents. Geo-demographic: Segmentation according to geography

and demography. This is used by ACORN: The post office also uses this.

Psychographic: social class and perception of customers. Behaviour: User status, usage rate, usage occasion,

loyalty status and purchase rate.



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Targeting

Single segment target

Multi-segment target

M1 M2 M3

P1

P3

P2 Market Specialisation

M1 M2 M3P1

P2

P3

M1 M2 M3

P1

P2

P3

M=Market and P= Product

M1 M2 M3

P1

P2

P3

M1 M2 M3P1

P2

P3

Product specialisation

Full market coverage

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Targeting Strategy

MARKETING MIX

Segment 1

Segment 2

Segment 3

Segment 1

Segment 2

Segment 3

MARKETING MIX Whole market

MARKETING MIX 2

MARKETING MIX 1

MARKETING MIX 3

Concentrated strategy/marketing

Differentiated strategy/marketing

Undifferentiated strategy/marketing

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POSITIONING Positioning means designing a product to occupy a distinct and valued place in the minds of customers.

Companies can position the market in terms of price, product, quality, brands, promotion, and customer service.

The essence of positioning is to enable the company to have more competitive advantage over its competitors.

When positioning, the company should identity customers needs, produce the product targeted at customers.

The product packaging, labelling, styling, branding, designing, pricing, promotion and distribution should seriously be analysed.

A good marketing programme such as marketing research, Marketing mix, segmentation, targeting, new productdevelopment and market expansion will boost the company’scompetitive advantage.

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POSITIONING Companies need to find out what position they

arein, in relation to their competitors.Am I a market leader or a market follower? This is

a question that should be asked by organisations.

Marketing planning, and marketingstrategies should be implemented to enablethe company to have competitiveadvantage.

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POSITIONINGKEYS TO SUCCESSFUL POSITIONING

Source: Principles and practice of marketing- 2nd edition by David Jobber

Successful positioning

ClarityConsistency

Credibility Compet

itiveness

Jude Asongwe

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POSITIONINGPOSITIONING MAP OF SUPERMARKETS:

Source: Principles and practice of marketing- 2nd edition by David Jobber

High price

Wide product range

Low price

Narrow product range

.. . .

. . ..A PERCEPTUAL MAP OF SUPERMARKETS

D

CB

A

X

GF

E

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BUSINESS TO BUSINESS BUYING

BEHAVIOUR: Otherwise known as industrial or organisational buyer

behaviour: Business to business transaction is when one business transact business with another. Certain factors influence business to business buyer

behaviour.1. Marketing mix: price,product, place , promotion2. Environmental influences3. Organisational factors4. Group influences: reference groups e.g decision

making unit such as users, influencers, deciders, approvers, gate keepers and buyers.

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Business to Business Marketing/Business to business buyer

behaviour

Cotton producer

DistributorsTextile

Industry/manufacturer

Agents Wholesalers Retailers

Sugar/flourBanana p

Distributor Producer Agent Wholesaler Retailer

Hides and skinproducer

Leatherproducer

distributor Shoe manufacturer Wholesaler Retailer

Accessories producer

Aircraft producer e.g

BoeingWholesaler Consumer

Iron and steelTyre producers

Distributor Car producer Wholesaler Retailer Consumers

Flour producer Distributor Producer Agent Wholesaler Retailer

Example of a shoe manufacturer

Example of cloths manufacturer

Example of biscuit manufacturer

Example of bread manufacturer

Example of car manufacturer

Example of aircraft manufacturer

ConsumersAgent

Consumers

Consumers

Consumer

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STRATEGIC MANAGEMENT Strategic analysis

Strategic Choice

Strategy implementation

A basic model of strategic management processSource: Exploring Corporate Strategy by Gerry Johnson Kevan Scholes

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STRATEGIC MANAGEMENT

Strategic

analysis

Strategic choice

Strategy implemen

tation

The environ

ment

Culture and stakeholder expectation Resources

And strategic capabilities

IdentifyingStrategic options

Evaluating options

Selecting

strategy

Planning And

allocating resources

Organisation

structure and design

Managing Strategic change

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CORPORATE SOCIAL RESPONSIBILITYThis is the responsibility that corporate businesses have on the environment. They are

supposed

to produce goods and services under social and environmentally friendly conditions:

CORPORATE SOCIAL RESPONSIBILITY TOUCHES THE FOLLOWING AREAS:

1. Employees Suppliers Retailer Distributors

2. Customers Government Shareholders Competitors

3. Products Services Banks Media Green issues

4. Local community Environmental pollutionCORPORATE SOCIAL RESPONSIBILITY CAN BE VIEWED FROM TWO ANGLES:Internal Aspects: This focus on the company’s internal structureE.g Employees, Shareholders, Management, Products, Services, and Resources.External Aspects: This focus on the society : For example Pressure Groups, local community, government, media, suppliers, distributors and Retailers

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SWOT ANALYSIS

STRENGTHHigh profitSalesMarket shareHigh product qualityMany product linesHigh staff moraleHigh staff motivationNew technologyHigh managerial abilityTechnical expertiseMachineryEconomies of scaleGood mission statementGood customer serviceNew product development

WEAKNESSESLow profitSalesMarket shareLow product qualityLimited product linesLow staff moraleLow staff motivationLack of technological developmentNo technical expertiseInsufficient machinery for productionDiseconomies of scalePoor missionPoor customer service

OPPORTUNITIESMarket expansionReduction of taxesDeregulation or reduction of legislationNew market (emerging markets)Good economic conditionsGood social conditionsStable political, social, economic and ecological environment

THREATSHigh competitionInflationLegislationHigh taxesNatural disasters e.g Hurricanes, Tsunami, Flood, Landslide, Earthquakes and TornadoesPolitical instability: warsHigh unemploymentHigh interest rates

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Marketing fundamentals- THE TOOLS OF MARKETING MANAGEMENT: THE MARKETING MIX

What is the marketing mix The components of the marketing mix.



41

Marketing fundamentalsThe tools of the marketing management:

THE MARKETING MIX - definition

It is the strategic blending of product, price, place, promotion, people, physical evidence and processes in order to achieve marketing objectives

It is a combination of 7p’s which marketers use in order to satisfy the market.


42

Marketing fundamentalsThe tools of the marketing management:

THE MARKETING MIX – definition Continues

Marketing mix is the tactical toolkit of the 7’ps ; namely product, price , place, promotion, people, physical evidence and processes.


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THE MARKETING MIX - PRODUCTWe will examine the following issues under product:1. Product Definition 2. Product Classification3. Various levels of a product4. The Product Mix5. The Product Life cycle6. Product Packaging7. Product Labeling8. Product quality9. Product lines10. Branding 11. The product adoption process12. New Product Development Process13. The importance of New Product Development14. Portfolio Analysis15. Product Pricing16. Product Placing17. Promotion of product.

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THE MARKETING MIX - PRODUCT

PRODUCT CLASSIFICATION:

Consumer Products

1. Shopping goods: e.g. television, cloths, shoes, watch & cameras

2. Unsought goods: e.g life assurance, grave stones,grave yard,

3. Convenience goods

4. Speciality goods

Producer products1. Materials and parts

2. Machinery

3. Services

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THE MARKETING MIX - PRODUCT

THE VARIOUS LEVELS OF A PRODUCT:

Core product

Actual/Basic product

Expected product

Augmented product

Potential product

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Firm infrastructureTechnology development

Human resource managementProcurement

Inbound Operations Outbound ServiceLogistics Logistics

Marketing and sales

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McKinsey’s Seven Ss model

•The 7-S Framework of McKinsey is a management model that describes 7 factors to organize a company in an holistic and effective way.

•Together these factors determine the way in which a corporation operates.

•Managers should take into account all seven of these factors, to be sure of successful implementation of a strategy. Large or small.

•They're all interdependent, so if you fail to pay proper attention to one of them, this may effect all others as well. On top of that, the relative importance of each factor may vary over time.

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Origin of the 7-S Framework. History

The 7-S Framework was first mentioned in "The Art Of Japanese Management" byRichard Pascal and Anthony Athos in 1981. They had been investigating howJapanese industry had been so Successful.

At around the same time that Tom Peters and Robert Waterman were exploring what

made a company excellent. The Seven S model wasborn at a meeting of these four authors in 1978.

It appeared also in "In Search of Excellence" by Peters and Waterman,and was taken

up as a basic tool by the global management consultancy company McKinsey. Since

then it is known as their 7-Smodel.

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Skills

Style

Staff

Strategy

Systems

Structure

Share values

Shared Values (also called Superordinate Goals). The interconnecting center of McKinsey's model is: Shared Values. What does the organization stands for and what it believes in. Central beliefs and attitudes. Compare: Strategic Intent

StrategyPlans for the allocation of a firms scarce resources, over time, to reach identified goals. Environment, competition, customers. StructureThe way in which the organization's units relate to each other: centralized, functional divisions (top-down); decentralized; a matrix, a network, a holding, etc.

http://www.12manage.com/methods_hamel_prahalad_strategic_intent.html

http://www.12manage.com/methods_PEST_analysis.html

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SystemThe procedures, processes and routines that characterize how the work should

be done: financial systems; recruiting, promotion and performance appraisal systems;information systems.

StaffNumbers and types of personnel within the organization.

StyleCultural style of the organization and how key managers behave in achieving

theorganization's goals. Compare: Management Styles.

SkillDistinctive capabilities of personnel or of the organization as a whole. Compare: Core Competences.

http://www.12manage.com/methods_earley_cultural_intelligence.html

http://www.12manage.com/methods_path_goal_theory.html

http://www.12manage.com/methods_corecompetence.html

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Strengths of the 7-S Model. Benefits Diagnostic tool for understanding organizations that

are ineffective. Guides organizational change. Combines rational and hard elements with emotional

and soft elements. Managers must act on all Ss in parallel and all Ss are

interrelated.

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Barriers to Implementation

INTERNAL

Management culture

Leadership skills

Organisational structure

Resources

Attitude to planning

Measurement procedures

Communications

EXTERNAL

Political intervention

Competition

Distributors

Suppliers

Customers

Economic conditions

Change in technology

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Implementation Variables

Successful implementation will occur

Staff will struggle

Implementation will be impeded

Staff are likely to resist the plan. Implementation will be impeded

Plan resist in all ways

Implementation stage unlikely to succeed.

Senior management involvement

Sta

ff in

volv

emen

tGilligan and Fifield

54

STAKEHOLDERS

competitors

Local community

Management

Shareholders

Distributors

Media

Suppliers

EmployeesPresent and prospective

The Firm’s Stakeholder

55

STAKEHOLDER VALUES AND EXPECTATIONSSTAKEHOLDES

VALUE STAKEHOLDER EXPECTATION

EXPECTATION FROM ORGANISATION

Consumers Purchase goods and services thus raising revenue for organisations.

Fair pricesSafe and healthy productsEnvironmentally friendly productsHigh quality productsGood customer service and care.

Payment for goods and servicesGood behaviour from customersRespect purchasing policies.

Employees They help produce goods and services.

Good working conditionsFair wage for a days job/monthMotivation – bonuses, allowances, holidays, promotion, ego and self actualisation needs.Equal opportunity in employment, training and development.Training and developmentIndustrial democracyEmpowerment and delegationFreedom of speech/free flow communication

Commitment from staffNo strike actionNo absenteeismTotal participation Respect company’s policiesGood morale

Management They help plan, organise, direct, control, motivate and train staff.

Suppliers They supply logistics needed for production.

Distributors They distribute the products to the market.

Media Advertising products.

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STAKEHOLDERSSTAKEHOLDES

VALUE STAKEHOLDER EXPECTATION

EXPECTATION FROM ORGANISATION

Financial institutions

Provides financial products e.g loans, overdraft and advice.

Government Provides public and merit goods.Help investors morally and financially.

Local community Purchase organisational products.

Pressure group

Shareholders Provide shares (business finance)Put pressure on companies to produce products under social and environmentally friendly conditions.

Retailers/wholesalers/agents

Facilitate the distributionActs as an important link in business supply chain.

Competitors Compete with firms thus making companies to offer even better services and goods.

57

STAKEHOLDERSStakeholders can be divided into three categories

1. Internal Stakeholders: Employees, Management, shareholders and BOD.

2. Market place stakeholders: Customers, banks, media, suppliers, distributors, agents, retailers and wholesalers and competitors.

3. External Stakeholders: Government, pressure groups and the local community

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The New Product Development Process

Idea generation

Idea screening

Concept development and testing

Outlining Marketing strategies

Business Analysis

Product development

Test marketing

Commercialisation

Monitoring

Controlling

59

PRODUCT LIFE CYCLE CHARACTERISTICSCHARCTERISTICS INTRODUCTION GROWTH MATURITY DECLINE

Sales Low Increasing Slowing Declining

Profits Loss Peaking Declining Low to Zero

Cash flow Negative Moderate High Low

Customers Innovative Mass Market Mass Market Laggards

Strategic focus Expanding market Market penetration Defensive marketing

Productivity

Marketing expenditure

High High-declining Falling Low

Product plan Market to innovators, early adopters; high product failure rate; basic- developing

Expand for early and late majority; less product distinctiveness; improve models.

Widen product lines, rationalize brand; less competition; differentiate.

Niche marketing; reinforce brand loyalty; rationalize

Competitor reaction

No reaction Maximum new entrants - high

Marginal competitors exit

Competition declines

Pricing plan High skimming Differentiated for each segment

Lowest - competitive

Price cutting rises for niches

Distribution plan Unstable pattern – widen channels, seize shelf space.

Increasing pattern – competitor activity increasing.

Control passing to fewer firms

Segmented, fragmented and localized.

Promotional plan

Push for awareness

Create ‘pull’ Withdraw Cease

Source: Association of business executives

60

COMPETITIONLAYERS OF COMPETITION

Immediate competitors – Technically similar

products

Source: Principles and practice of marketing by David Jobber

Secondary competitors

Tertiary competitors

61

MICHAEL PORTER’S FIVE FORCE ANALYSIS OF THE COMPETITIVE STRUCTURE

Competitive Rivalry

Potential entrants

Suppliers Buyers

Substitutes

Bargaining

Power

Threat of entrants

Bargaining

Power

Threat of substitutes

Source: Exploring Corporate Strategy by Garry Johnson and Kevan ScholesAdapted from M. Porter, Competitive Strategy, Free Press,1980, p. 4.

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THE IMPORTANCE OF THE PRODUCT LIFECYCLE:

The product life cycle is important in planning and control

Strategic formulation, implementation and analysis

Advertising strategy Product management Targeting and positioning

63

PORTFOLIO ANALYSISBusiness Portfolio: The collection of businesses and products

that make up the company.

Portfolio analysis: A tool by which managementidentifies and evaluates the various businesses thatmake up the company

Strategic business unit (SBU): A unit of the company that hasa separate mission and objectives and that can be plannedindependently from other company businesses. A SBU can bea company division, a product line within a division, orsometimes a single product or brand.

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PORTFOLIO ANALYSISBOSTON CONSULTING GROUP MATRIX

Framework of the BCG Matrix

Market share

Mar

ket g

row

th

Low

High

0.1x1x10x0

10

20

65

PORTFOLIO ANALYSISStars

Cash cowsLow-growthHigh-share businesses or productsEstablished and successful units that generate cash that the company usesto pay its bills and support other business units that need investmentProfit and sales are high but later decline because of competition

Question marksLow-share business units in high-growth marketsLow profits and sales.DogsLow growthLow market shareLow profitLow sales

High –growth High market share (High-share businesses)Products often require heavy investment to finance their rapid growthHigh profit and high sales

66

BCG MATRIX : BCG CLASSIFICATION OF PRODUCTS

Dogs

Market share

Mar

ket g

row

th

Low

High

0.1x1x10x0

10

20

StarsQuestion marks

Cash cows

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BCG MATRIX- CASH POSITION FOR PRODUCTS

Stars

Revenue + + +

Investment - - -

0

Question marks

Revenue + +

Investment - - -

-

Cash cows

Revenue + + +

Investment –

+ +

Dogs

Revenue +

Investment –

0

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PORTFOLIO STRATEGIES

Build

Hold

Harvest

Divest

69

GENERAL ELECTRIC MATRIX

70

THE GENERAL ELECTRIC MATRIX BY MCKINSEY

The GE matrix / McKinsey matrix is a model to perform a business portfolio analysis on the Strategic Business Units of a corporation.

A business portfolio is the collection of Strategic

Business Units that make up a corporation. The optimal business portfolio is one that fits perfectly to the company's strengths and helps to exploit the most attractive industries or markets. A Strategic Business Unit (SBU) can either be an entire mid-size company or a division of a large corporation, that formulates its own business level strategy and has separate objectives from the parent company.

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The aim of a portfolio analysis is to: 1) Analyze its current business portfolio and decide

which SBU's should receive more or less investment, and2) Develop growth strategies for adding new products and businesses to the portfolio

3) Decide which businesses or products should no longer be retained.

The BCG Matrix (Boston Consulting Group Matrix) is the best-known portfolio planning framework. The GE / McKinsey Matrix is a later and more advanced form of the BCG Matrix.

http://www.valuebasedmanagement.net/methods_bcgmatrix.html

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Typical (external) factors that affect Market Attractiveness:- Market size- Market growth rate- Market profitability - Pricing trends - Competitive intensity / rivalry - Overall risk of returns in the industry- Entry barriers - Opportunity to differentiate products and services- Demand variability- Segmentation - Distribution structure- Technology development

Typical (internal) factors that affect Competitive Strength of a Strategic Business Unit:- Strength of assets and competencies- Relative brand strength (marketing)- Market share- Market share growth- Customer loyalty- Relative cost position (cost structure compared with competitors)- Relative profit margins (compared to competitors)- Distribution strength and production capacity- Record of technological or other innovation- Quality- Access to financial and other investment resources- Management strength

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A six-step approach to implementation of portfolio analysis (using the GE / McKinsey Matrix) could look like this:

1. Specify drivers of each dimension. The corporation must carefully determine those factors that are important to its overall strategy2. Weight drivers. The corporation must assign relative importance weights to the drivers 3. Score SBU's each driver4. Multiply weights times scores for each SBU5. View resulting graph and interpret it 6. Perform a review/sensitivity analysis using adjusted other weights (there may be no consensus) and scores.

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Some important limitations of the GE matrix / McKinsey Matrix are:

- Valuation of the realization of the various factors

- Aggregation of the indicators is difficult - Core competencies are not represented - Interactions between Strategic Business

Units are not considered

http://www.valuebasedmanagement.net/methods_corecompetence.html

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CHANGES IN PRODUCT/STRATEGIC BUSINESS POSITION

76

CONCLUSION

77

GENERAL ELECTRIC BUSINESS SCREEN (GE)

78

PRODUCT LINE

Television Laptops Cars Mobile WatchesPanasonicSharpSonyLGTechnicsSamsung

HPPackard bellMicrosoftDellPC worldSony

NokiaMotorolaSamsungLGSiemensSargemSony E

RolexSeikoSeconda

ProductLine length

Product line width

JaguarMercedesRoverVauxhallCorollaNissanAudiFerrariOpelBMWHondaPajeroToyotaCamri

ProductLine Length

A B C D E

6 6

14

7

3

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NATONAL INCOME STATISTICS

80

GDP STATISTICS

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PRICEPRICING STRATEGIES:1. Cost-based pricing or cost-oriented pricing:

a) Full cost pricing

b) Direct cost pricing

2. Competitor-based pricing or competitor orientated pricing

a) Going-rate pricing

b) Competitive bidding

3. Market-oriented pricing

4. Product line pricing

5. Me too pricing

6. Product bundling pricing

7. Seasonal pricing

8. Psychological pricing

Source: Principles and practice of marketing 2nd Edition by David Jobber

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PRICE FACTORS THAT DETERMINE THE PRICE OF PRODUCTS:

MACRO FACTORS1. Political

2. Economic

3. Social

4. Technological

5. Ecological

6. Legal

MICRO FACTORS7. Customers (demand & market segment)

8. Competitors

9. Suppliers

10. Distributors

11. Media

12. Company: production costs, objective and mission.

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RESEARCH STUDIES

84

WHAT IS RESEARCHResearch is the gathering, recording, analysing and reporting of all facts relating to the transfer and sale of goods and services from producers to consumers. It is usually based on statistical probability theory and always uses scientific methods.

Research is the

Gathering

Analysis

Storage

Retrieval

and

Dissemination of information to aid in decision making:


85

WHY RESEARCH1. To find out cost involved in advertising

2. To find out what customers want to buy

3. To determine which distribution methods are more efficient

4. To analyze what competitors are doing

5. To reduce risk

6. To help in planning and forecasting results

7. To aid ‘mix decisions’

8. To improve decision-making capabilities

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INTERNATIONAL MARKETING RESEARCH AND ANALYSIS

MARKETING RESEARCHMARKETING RESEARCH

88Sunday, February 19, 2006Sunday, February 19, 2006 By J Asongwe By J Asongwe

MARKETING RESEARCHMARKETING RESEARCH

THE MARKETING RESEARCHTHE MARKETING RESEARCH PROCESSPROCESS::

Defining theresearch

QUESTIONAND

objectives

DevelopingThe research plan

For collecting information

Implementing the Research plan-Collecting and Analysing the

data

Interpreting and Reporting the

findings

FIGURE 2: The Marketing Research Process.

THE MARKETING RESEARCH PROCESS

Source: Principles of marketing by Philip Kotler

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The research processThe process of research describes the steps takenin the research activity: Gathering

Analysis

Storage

Retrieval

Dissemination


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THE MARKETING RESEARCH PLAN: (WH QUESTIONS)The research plan includes objectives, strategies and programmes and above all it

should be logical andstructured.1. What are the research problems? ( outline the research problems)2. What are the research objectives?( outline the research objectives)3. Determine the target to be researched : crucial to the research plan.4. Which research methodology are you using? Determine how the research is to be

carried out:5. Who will be responsible for carrying out the research? In-house or external

agency.6. How will data be collected?7. When will the research be carried out? Determine 8. How long will the research take. (set time frame or limit)? time scale is important.9. How much budget have you set aside for the research? Set or agree the budget: 10. Where will the research be carried out?11. Start carrying out the research : Implement the plan12. Gather and record the information13. Monitor and control 14. Reach conclusions: Report the information and take action. 15. Store the information to be retrieved in future.

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RESEARCH PROPOSAL The research proposal defines what the marketing research promises to do for its

client, and how

much it will cost. Like the research brief, the proposal should be written to avoid misunderstandings.

A client should expect the following to be included.

1. A statement of objectives: to demonstrate an understanding of the client’s marketing and research problems

2. What will be done: an unambiguous description of the research design including the survey method, the type of sample, the sample size, and how the fieldwork will be controlled.

3. Timetable: if and when a report will be produced.

4. Costs: how much the research will cost and what specifically is/is not being included in those costs.


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TYPES OF RESEARCH1. Primary (field) research

2. Secondary (desk) research

3. Exploratory research

4. Conclusive research

5. Market research: This is focused on the size, composition, trends, structure of the market, competitors and the environmental factors affecting the market.

6. Marketing research: Research which is focused on the marketing mix elements: Product, price, place, promotion, people, physical evidence and process.

7. Experimental research:

8. Quantitative research:Quantitative comes from quantity – meaning numbers. Results can be in the form of numbers or percentages. This type of research is used to assess trends, potential and actual growth or decline of a market or product consumption.

9. Qualitative research: Its about ideas and opinions, likes and dislikes: Likert scale or semantic differential scale is normally used in qualitative research, which allows responses to be quantified.

10. Observational research:

11. Survey research:

12. Descriptive research : Survey research may be undertaken to describe customers’ beliefs, attitudes, preferences, behaviour, etc. For example, a survey into advertising effectiveness might measure awareness of the brand, recall of the advertisement, and knowledge about its content.


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RESEARCH METHODS

Interviews and discussions Observations Questionnaires Test marketing Sampling Survey/(Intelligence gathering)

PRIMARY RESEARCH METHOD

92

USING EXTERNAL RESEARCH AGENCIES

In-house or External Finding, selecting and recruiting an

agency Briefing Controlling

93

DATA COLLECTION


Primary sourceSecondary sources

94

SAMPLINGTHE SAMPLING PROCESS:

1. Simple random sampling

2. Stratified random sampling

3. Quota sampling

4. Sample size


95

SURVEY RESEARCHTHE SURVEY METHOD Face-to-face interviews Telephone interviews Mail surveys


96

QUESTIONNAIRE DESIGNPLANNING STAGE

DESIGN STAGE

1. Ordering of topics : it should have a logical flow

2. Types of questions: Closed end questions and open end questions.

3. Wording and instructions

4. Layout

5. Scaling

6. Probes and prompts

7. Coding


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QUESTIONNAIREPILOT STAGE


98

DATA ANALYSIS AND INTERPRETATION


99

REPORT WRITING AND PRESENTATION


100

SOURCES OF INFORMATION

There are four main sources of information

1. Internal Sources

2. Government publications

3. Other publications

4. Commercial data


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PRIMARY DATA: Original data . Data from the

‘horses mouth’.

It takes time and it is expensive

SECONDARY DATA:Existing data

Takes less time

It is not expensive

There is a possibility of getting obsolete data

SOURCES OF INFORMATION

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MARKETING INFORMATION SYSTEM:

55Tuesday, December 20, Tuesday, December 20, 20052005 By J Asongwe By J Asongwe

The Marketing Information SystemThe Marketing Information System

Internal recordMarketing

intelligence

Information analysis Marketing research

Assessing information

needs

Distributinginformation

Marketing environment

Target Markets

Marketing channels

Competitors

Publics

Microenvironment forces

Marketingmanagers

Planning

Execution

Control

FIGURE 1: The marketing Information System

Marketing Information System

Marketing decisions and communications

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BUSINESS AND MARKETING STRATEGIES

BUSINESS STRATEGY

1. Ansoff Matrix

2. Porters generic strategy

104

MARKETING STRATEGIESPORTERS GENERIC STRATEGY MODEL

Stuck with no clear strategy

Differentiation

Cost leadership

Focus

105

STRATEGIESANSOFF MATRIX

MARKET PENETRATION

PRODUCT DEVELOPMENT

MARKET DEVELOPMENT

DIVERSIFICATION

Existing New

Existing

New

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MARKETING Strategies

MARKETING MIX

Segment 1

Segment 2

Segment 3

Segment 1

Segment 2

Segment 3

MARKETING MIX Whole market

MARKETING MIX 2

MARKETING MIX 1

MARKETING MIX 3

Concentrated strategy/marketing

Differentiated strategy/marketing

Undifferentiated strategy/marketing

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CORPORATE STRATEGIESATTACH STRATEGIES

1. Direct challenge – differential advantage

2. Direct attack – distinctive competence

3. Direct attack – market share

4. Flank attack

5. Encirclement

6. Bypass

7. Guerrilla

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DEFENCE STRATEGIESMARKETING STRATEGY

1. Position defence2. Pre-emptive defence3. Counter-offensive4. Mobile defence5. Flanking defence6. Contraction defence7. By-pass

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Marketing fundamentals – OVERVIEWING THE MARKETING PROCESS: MARKETING AS AN EXCHANGE PROCESS



110

Marketing fundamentals- THE CHANGING ROLE OF MARKETING

111

Marketing fundamentals - UNIT 2: MARKETING PLANNING AND BUDGETINGLEARNING OBJECTIVES:

To understand what is the marketing planning process. To understand the importance of the marketing planning process To examine the structure and components of the marketing plan. The marketing planning process. The concept of marketing audit The value of marketing research and information in developing marketing plans. To understand the importance and approaches to objective setting.

To understand the importance and process of segmentation, targeting and positioning

Appreciate the range of tools and techniques to satisfy customer requirements and compete

The process of setting marketing budgets

To understand the various management structures for implementing marketing plans and the importance of monitoring and control of marketing activities.

Appreciate the range of tools and techniques available to satisfy customer requirements and compete.

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COMPONENTS OF A MARKETING PLAN1. EXECUTIVE SUMMARY

2. BUSINESS MISSION

3. MARKTING AUDITING

4. SWOT ANALYSIS

5. MARKETING OBJECTIVES

6. BUSINESS OBJECTIVES

7. MARKETING STRATEGIES

8. BUSINESS STRATEGIES

9. MARKETING MIX

10. IMPLEMENTATION

11. EXPECTED RESULT

12. MONITORING

13. CONTROLLING

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Marketing fundamentals - UNIT 2: MARKETING PLANNING Definition

Marketing planning is deciding at present what to do in future.Marketing planning involves the various steps which marketers have to follow

before achieving their overall objectives



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Marketing fundamentals - UNIT 2: MARKETING PLANNING AND BUDGETING

The marketing planning process1. Business Mission/corporate objectives

2. Marketing audit

3. SWOT analysis

4. Business Objectives

5. Marketing objectives

6. Marketing strategies

7. Marketing tactics / marketing mix decisions

8. Implementation

9. Monitoring and control



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MARKETING PLANEnvironmental scanning

Business Mission

Objectives

Strategies

Marketing Mix

Monitoring

Control

Implementation

Price Place Promotion People Physical evidence

Product Processes

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MARKETING PLANNINGSTRATEGY AND PLANNING Initial environmental and business analysis Develop the mission statement Detailed marketing audit

Corporate objectives and strategy formulation

Marketing objectives and strategy formulation

Estimate expected results

Identify alternative plans and mixes Implementation

Review

BUSINESS

FUNCTIONAL

CORPORATE

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STRATEGY AND PLANNING Corporate or visionary planning that provides

a mission and structure for evaluating and allocating resources to business

Business planning which involves long-range planning for positioning the company and its products to best serve its target markets

Functional planning including marketing planning which is generally annual planning involving specific goals and plans over one year.

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CORPORATE STRATEGYStrategies are formulated as a response to the

various

factors in the company’s environment- and these may

come from both external and internal sources:

a) External

b) Internal

119

Organizational Stance and Positioning

Leaders Followers Nichers

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THE BUSINESS MISSIONLearning Objectives

What is a Mission Statement. What are the components of a mission statement. What is the importance of a mission

statemement. What are the characteristics of a Mission

Statement Examples of Mission Statements: M&S, Asda,

Tesco, Sainsbury, BT & Npower.

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The Marketing AuditLearning Objective

What is the marketing audit What are its components What is the importance of the marketing audit.

122


THE SWOT ANALYSIS

Learning Objectives

What is the SWOT Analysis What is the importance of carrying out a

SWOT Analysis.

123

Marketing fundamentals

Marketing planning and budgeting.

124

Content OF PART B: Marketing Environment:

The nature of the organization and the impact of its environment

The micro-environment Analysis of the competitive environment The macro-environment The demographic, social and cultural environment The economic and international environment The political and legislative environment The technical/information environments Environmental information systems-coping with the

challenge of environmental change. Marketing Environment.


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Marketing Environment:

LEARNING OBJECTIVESBy the end of this module you should be able to: Understand the nature of the marketing environment

and its relevance for the organisation and marketing practice.

Examine the various types of organisation, their objectives and the interface between marketing, internal functions and external influences.

Recognise the importance of building relationships with relevant stakeholders.

Identify and interpret the marketing implications of significant changes in an organization's wider environment.

Understand the complex, dynamic and uncertain nature of the external environment and how it might be best managed in marketing terms.

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The importance of the marketing environment Business classifications The formal and informal economy The legal form of trading organizations Vision and the organization’s mission General organizational objectives How are goals established? What causes the goals to change? The organization as an open system The interface between marketing and other functions. Managing the marketing environment: a contingency approach.

Unit 1: The nature of the organization and the impact of its environment

Marketing Environment.


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Marketing Environment:Unit 1: The nature of the organization and the impact of its

environmentLEARNING OBJECTIVES1. To explain the classification of private, public and voluntary organizations, their

legal status and operational characteristics.2. Assess comparative strengths and weaknesses of small/medium and large/global

sized organizations.3. State the meaning and importance of an organization’s mission and explain the

nature and significance of the objectives pursued.4. Identify the internal and external influences on the formation of objectives and

specify the likely drivers for organizational change.5. Explain the nature of open systems responding to changing environmental

conditions.6. Represent the organization as an open system responding to changing

environmental conditions7. Distinguish between the types of organizations with the public, private and

voluntary sectors 8. Understand the diversity of organizational objectives and influences upon them9. Understand the nature of organizations as open systems and the environmental

influences that affect them.


128


The public sector The private sector.

Unit 1: The nature of the organization and the impact of its environment

The formal economy

The Informal economy

•Hidden•Voluntary•Household


129

The formal economy

The public sector State industries Public/private partnership Quangos Municipal/local authority services

Marketing Environment:Unit 1: The nature of the organization and the impact of its environment


130

Marketing Environment: Unit 1: The nature of the organization and the impact of its environment

The private sector. Sole traders Partnerships Private limited companies; e.g. small/medium

businesses. Cooperatives; e.g agricultural Franchises; e.g McDonald’s Public limited companies; e.g Unilever plc Multinationals: e.g BP, Coca-Cola Inc, Nestle,

Cadbury.

The formal economy


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Marketing Environment:Unit 1: The nature of the organization and the impact of its environment

The Legal form of trading organizations:

Sole Trader:

Characteristics Oldest type, simplest to form – self-employment Unincorporated – Ownership and control by a single person Individuals assume all rights/duties No separate legal existence: the business= the individual No disclosure of information bar to tax authorities No limit on employees: may employ >100 Farming/personal services/building/retail May originate in the hidden economy.


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The marketing environment: Unit 1: The nature of the organization and the impact of its environmentSOLE TRADER:

MERITS DEMERITS Minimum formalities Unlimited liability for any debts

,unincorporated, no legal entity.

Complete control/no consultation Raising capital is difficult

Favorable tax treatment Specialized and risky

Highly motivated/single-minded Jack of all trades

Least costly to form May lack continuity

Close to customers/employees Self-exploitation

Flexible/attend to detail Competition from large/small

Niches where limit to market Lack management skills

Exemption from certain legislation No one to share burden

Personal satisfactions-status Source: CIM course book

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The marketing environment: Unit 1: The nature of the organization and the impact of its environmentPARTNERSHIP

CHARACTERISTICS

Unincorporated Two or more in common with a view to profit No more than a legally specified maximum number (e.g

20), bar certain professions. Form an agreement or bound by legislation Unlimited liability and jointly liable Share management/profits/losses No legal personality.


134

The marketing environment: Unit 1: The nature of the organization and the impact of its environmentPARTNERSHIP

MERITS DEMERITS

Able to raise more capital Unlimited liability unless ‘limited’- still must be at least one partner fully liable.

Pool expertise/mutual support funds Lack of legal identity-dissolves if death/disagreement

More chance to specialize Potential disagreements

No company tax on business Frozen investment

Unincorporated

No separate legal entity


135

The marketing environment: Unit 1: The nature of the organization and the impact of its environment

REGISTERED COMPANY: PLC & Private LC

CHARACTERISTICS Incorporated, separate legal entity – enter contracts,

etc. Formed under relevant legislations, e.g 1985

Companies Act Confers various rights and duties Members contribute capital and own shares. Dominant form Liability limited to amount invested or guaranteed.


136

The marketing environment: Unit 1: The nature of the organization and the impact of its environmentFor example, in Britain:

Public Limited Company (PLC)

Private Limited Company (Ltd)

Two or more members Minimum two/100 authorized capital

50 000 and two directors One director plus a secretary

Offer shares to the public Offence to offer shares to public

Requires business certificate before trading/borrowing

Trade once incorporation certificate is received

Similar legislation elsewhere. Typical family business

Raising additional bank funds easier


137

The marketing environment: Unit 1: The nature of the organization and the impact of its environmentFor example, in Britain:

A registered company has a number of duties and must also submit to the Registrar of Companies:

Memorandum of Association: It contains the external rules and regulations

Articles of Association: It contains the internal rules and regulations.

Statutory declaration of compliance with the relevant Act Independently audited annual accounts and directors

report.


138


REGISTERED COMPANY: PLC & Private LC

MERIT DEMERIT

Separate legal entity Special and double taxation

Limited liability of owners Complex/costly to form

Greater financial capability Disclosure requirements

Easy transfer of ownership Government regulations

Able to fund innovation/new product development

Inflexibility of size

Customers feel reassured.Economies of scale:Internal and External.

Impersonality.


139


COOPERATIVE

CHARACTERISTICS Pioneered in mid-nineteenth century-most prevalent in agriculture and

retailing Governed by relevant legislation Worker ownership/control but falling numbers/mergers Limited liability but one member one vote Self-help not profit maximizing via management committee Equitable distribution of dividend if a surplus is made.


140

The marketing environment: Unit 1: The nature of the organization and the impact of its environmentFRANCHISINGCHARACTERISTICS

Franchisor sells the right to market a product under its name to a franchisee.

Separate entities but interdependence businesses. Rapid growth especially retailing McDonald’s the Body shop. Ready-made opportunity for an entrepreneur with capital wishing to

minimize risks of a new venture (90 per cent survive beyond three years).


141

The marketing environment: Unit 1: The nature of the organization and the impact of its environmentAGREEMENT BETWEEN THE FRANCHISOR AND THE FRANCHISEE:

Franchisor agrees to Pay an initial sum to franchisor

Provide business format/initial training

Pay a percentage of profit to franchisor

Supply product and quality control Buy supplies of product from franchisor

Extend promotional support (e.g.) advertising

Maintain standards laid down.


142


THE PUBLIC SECTORLocal Authorities: Services provided by local government Examples include, among others, fire and police,

road maintenance, consumer protection, recreation, environmental health, education and airports.

They are managed by elected councillors through full time professional officers.


143


THE PUBLIC SECTORSTATE INDUSTRIES


144


THE PUBLIC SECTOR

PUBLIC PRIVATE PARTNERSHIP


145


THE PUBLIC SECTORQUANGOS (State Agents)


146

The marketing environment: Unit 1: The nature of the organization and the impact of its environment THE PUBLIC SECTOR AND THE PRIVATE SECTOR COMPARED:

PUBLIC SECTOR PRIVATE SECTOR


147


NATIONALISATION AND DENATIONALISATION OR PRIVATISATION COMPARED:

NATIONALISATION PRIVATISATIONManagement and control of state owned industries by the government

Transfer of ownership and control of state owned industries from government to individuals.


148


The regulated PLC: The bulk of nationalized industries were

privatized in the 1980s and 1990s. They were sold directly to the public:

management/employee buyouts or to other companies.

Examples of privatized industries in the UK includes : BT, Royal Mail, London Underground)


149

The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ARGUMENTS FOR PRIVATISATION:

POLITICAL ARGUMENTS ECONOMIC ARGUMENTSReduced role of the state Achieve efficiency improvementsDeregulation of the economy Increased competition and choiceEncourage shareholding democracy among customers

Pressure on management to become marketing oriented

Enable worker share-ownership Improve industrial relationsProvide freedom to manage Exploit new opportunitiesCut borrowing(PSBR)and taxes Supply side rises in productivity.Cut costs


150


VISION AND THE ORGANIZATION’S MISSION:

VISION Components of a vision statement Characteristics of vision statements The importance of a vision statement From Vision to Mission.


151

The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSION

Component of a Mission Statement Characteristics of a Mission Statement The importance of a Mission Statement


152


Examples of Mission and Vision Statements THE MISSION STATEMENT OF ASDA Superstore.

153


THE MISSION STATEMENT OF TESCO

154


THE MISSION STATEMENT OF Marks & Spencer

Source: Strategic Marketing Management by R.M.S Wilson

155


The Mission Statement of NPOWER

156


The Mission Statement of British Gas

157


THE MISSION STATEMENT OF DEBENHAMS:

We will be the leading countrywide speciality store, the first choice for fashion on card which employees


158

The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSIONThe Mission Statement of Sainsbury

1. To discharge the responsibility as leaders in our trade by acting with complete integrity, by carrying out our work to the highest standards, and by contributing to the public good and to the quality of life in the community.

2. To provide unrivalled value to our customers in the quality of the goods we sell, in the competitiveness of our prices and in the range of choice we offer.

3. In our stores, to achieve the highest standards of cleanliness and hygiene, efficiency of operation, convenience and customer service, and thereby create as attractive and friendly a shopping environment as possible.

4. To offer our staff outstanding opportunities in terms of personal career development and in remuneration relative to other companies in the same market, practising always a concern for the welfare of every individual.

5. To generate sufficient profit to finance continual improvement and growth of the business whilst providing out shareholders with an excellent return on their investment.Source: Strategic Marketing Management by R.M.S Wilson

159


THE MISSION STATEMENT OF BT: To provide world class telecommunications and information products

and services To develop and exploit our networks at home and overseas so that

we can 1. Meet the requirements of our customers2. Sustain growth in the earnings of the group on behalf of our

shareholders3. Make a fitting contribution to the community in which we conduct our

business.BT’S CORE VALUES We put our customers first We are professional We respect each other We work as one team We are committed to continuous improvement.


160


The Mission Statement of Argos

161

Learning objectives – what you should know by the end of the lesson

The nature of the organization and the impact of its environment

The micro-environment Analysis of the competitive environment The macro-environment The demographic, social and cultural environment The economic and international environment The political and legislative environment The technical/information environments Environmental information systems-coping with

the challenge of environmental change.

162

THE MARKETING ENVIRONMENT

THE COMPANY AND ITS

ENVIRONMENT

MICRO ENVIRONMENT

MACRO ENVIRONMENT

CompanyManagement/BODShareholdersEmployees

Marketing IntermediariesSuppliersDistributors/transportersMediaRetailersWholesalersAgents/brokers

Financial IntermediariesBanksCredit InstitutionsBuilding SocietiesInsurance companies

Customers

Local communityPressure groups

Think-tank consultancy

Political

Economic Social DemographicSocial ClassReference groupsHealthEducationCommunicationCulture

Technological

Ecological

Legal

Unemployment, wages, Interest rates, Tax, deflation, trade cycle, exchange rates, Energy prices economic growth Per Capita Income, competitors

GDP,GNP,NI,Employment,

Inflation,

PolusionClimate changeScarcity of oil

Natural disasters

Recycling

Polusion law ,Alcohol law,consumer protection lawEmployment law, product safety law Human rights law, Business law

Internet, digital, ATM EPSS, mobile, SMS,

Government policies Rules and regulationsLaws, taxes, political stability/instability,regime in government

Law firm

163

THE BUSINESS ENVIRONMENT– PEST FACTORS

ENVIRONMENTAL FACTORS

Political

Economic

Social DemographicSocial ClassReference groupsHealthEducationCommunicationCulture

Technological

Ecological

Legal

Unemployment, wages, Interest rates, Tax, deflation, trade cycle, exchange rates, Energy prices economic growth Per Capita Income, competitors

GDP,GNP,NI,Employment,

Inflation,

PolusionClimate changeScarcity of oil

Natural disasters

Recycling

Polusion law ,Alcohol law,consumer protection lawEmployment law, product safety law Human rights law, Business law

Internet, digital, ATM APSS, mobile, SMS,

Government policies Rules and regulationsLaws, taxes, political stability/instability,regime in government

164

ANALYSIS OF THE MACRO ENVIRONMENTPESTEL FACTORS

POLITICAL

ECONOMIC

SOCIAL

TECHNOLOGICAL

ECOLOGICAL

LEGAL

165

ANALYSIS OF THE MACRO ENVIRONMENT

POLITICAL

The political environmentPolitical uncertainties/instabilityInternational political environment

166

ANALYSIS OF THE MACRO ENVIRONMENTECONOMIC

Employment/unemploymentInflation/deflationGovernment economic objectivesNI,GDP,&GNPThe Business CycleBOP & BOTTrade & exchange rate policyThe impact of international tradeInterest ratePricesCompetitionDemand

167

ANALYSIS OF THE MACRO ENVIRONMENTSOCIALDemographic: This is the study of the composition of a country’s population in terms of age, gender, sex, occupation.•Population•Age composition•Gender composition•Marital status and household structure•Income•Migration: Immigration & Emigration (Net migration)•Birth rate & Death rate•Fertility rate.•Trends in population•The dependency ratio•World population•Aggregate population•Population structure•Regional distribution of population•Ethnic groups•Occupational structure•The workforce in employment: some important trends•The changing role of women in work and society

168

Demographic studies and marketing

POPULATION:

WORLD POPULATION

Source: http://esa.un.org/unpp/

169

Age composition and distribution

Europe and the New Independent States

http://www.overpopulation.com/faq/basic_information/age_distribution/europe.html

Source

170

World population: 6000,000,000

The most highly populated countries in the world: Country: Population: Density1. CHINA 1,306,313,812 1362. INDIA 1,103,600,000 3283. UNITED STATES OF AMERICA 293,655,404 304. INDONESIA 241,973,879 1265. BRAZIL 186,112,794 216. PAKISTAN 162,419,946 2027. BANGLADESH 144,319,628 1,0028. RUSSIA 143,420,309 89. NIGERIA 128,771,988 13910. JAPAN 127,417,244 337

Source: http://en.wikipedia.org/wiki/World_population http://en.wikipedia.org/wiki/Population

http://en.wikipedia.org/wiki/Image:World_population_evolution.png

http://en.wikipedia.org/wiki/World_population

http://en.wikipedia.org/wiki/World_population

http://en.wikipedia.org/wiki/Population

http://en.wikipedia.org/wiki/Population

171

Gender composition:

172

MARITAL STATUS AND HOUSEHOLD STRUCTURE

173

INCOME DISTRIBUTION

174

BIRTH RATE/ FERTILITY RATE

175

DEATH RATE

176

MIGRATION: Immigration/Emigration

177

TRENDS IN POPULATION

178

REGIONAL DISTRIBUTION OF POPULATION

http://images.google.co.uk/imgres?imgurl=http://www.freemap.com/images/wallmaps/USDecorator.jpg&imgrefurl=http://www.freemap.com/WallMaps/UnitedStatesandRegionalareas/USANationalGeographicDecoratorLargeLL.htm&h=829&w=1200&sz=659&tbnid=625NUMXy9hgJ:&tbnh=103&tbnw=150&prev=/images%3Fq%3Dmap%2Bunited%2Bstates%2Bof%2Bamerica%26hl%3Den%26lr%3D&oi=imagesr&start=1

179

OCCUPATIONAL STRUCTURE:

180

SOCIAL Social class Culture Reference groups The family Lifestyle Education Health Communication

181


TECHNOLOGICAL

182


ECOLOGICAL

183


LEGAL Legislation imposed by governments The legal framework Role and objective of legislation Fair trading and the consumer Protecting the consumer Implications to the marketer.

184

INTERNATIONAL MARKETING:

1. What is international marketing

2. International marketing environment

3. International market entry strategy

4. International marketing mix

185

INTERNATIONAL MARKETING DIFFERENCES IN CULTURE

What is cultureCulture is sum total of belief, rituals, custom, tradition,

norms etc;that characterizes a particular group of people, society,

ororganization.

The sum total of learned beliefs, values and custom that serve to direct

customer behaviour

in a particular country market

Components of culture.

186

Differences in culture: There exist cultural differences in different

continents across the world with respect to the following:

1. Language

2. Aesthetics

3. Norms

4. Values

5. Rituals

6. Custom and tradition

187

CHAPTER 4: INTERNATIONAL TRADE THEORY

Demand and supply Tariffs Quotas BOP TOT IMPORTS & EXPORTS INTERNATIONAL CURRENCIES TRADE RESTRICTIONS BORDER CONTROL EXCHANGE RATE INTEREST RATE NATIONAL INCOME. BUDGET

188

ENVIRONMENTAL INFLUENCES ONINTERNATIONAL MARKETING

Socio/CulturalLanguageReligionAestheticsValues and attributesSocial organisationMaterial cultureHealthCommunication/transport.

PoliticalOperational restrictionsDiscriminatory restrictionsPhysical actions

EnvironmentalInfluences on InternationalMarketing

LegalLocal domestic lawsInternational lawHome domestic law

TechnologicalSatellite CommunicationsISDNInternetWWWThe Electronic Superhighway

EconomicDeveloped economiesEmerging economiesLess developed economiesCurrency movements

Ecological

189

INTERNATIONAL MARKET ENTRY STRATEGY

190

Content of PART C: Marketing in practice

An overview of the marketing system The context of marketing The integrated marketing mix: product The marketing mix: price The marketing mix: place The marketing mix: promotion The integrated marketing mix – service extension (people,

physical evidence and process) The management of marketing information Skills for the marketer Bringing it all together: the marketing plan


191

THE LEARNING OBJECTIVES IN Marketing in practice

By the end of this module you should be able to: Collect relevant data from a variety of secondary information

sources Analyse and interpret written, visual and graphical data Devise appropriate visual and graphical means to present

marketing data Make recommendations based on information obtained from

multiple sources Evaluate and select media and promotional activities appropriate

to the organisation's objectives and status and to its marketing context

Calculate and justify budgets for marketing mix decisions Develop relationships inside and outside the organisation Apply planning techniques to a range of marketing tasks and

activities Undertake basic marketing activities and within an agreed plan

and monitor and report on progress Gather information for, and evaluate marketing results against,

financial and other criteria

192

Content of PART D Customer Communication

The importance of the Customer Buying behaviour The communication process The communication mix The role of information communication technology in

customer communications Effective communications Communicating in meetings, interviews and

negotiations Using statistical data and visual information Written communication formats.


193

LEARNING OBJECTIVES OF Customer Communication

By the end of this module you should be able to: Recognise organisations as open systems and explain the

importance of relationships between the organisation and its suppliers, intermediaries, customers and other key stakeholders in a changing environment

Explain why it is important for marketers to understand consumer and industrial buying behaviour for marketing decisions

Explain the elements of the promotional mix and its fit with the marketing planning process

Explain the advantages and disadvantages of the range of communications tools available to an organisation

Develop internal and external communications using appropriate tools to suit a variety of target audiences and using an understanding of customer behaviour and customer information

Select appropriate verbal and non-verbal communications with people inside and outside the organisation

Demonstrate the importance of customers and customer service and apply customer care principles to create positive relationships with customers in a variety of contexts

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Unit 1: The importance of the CustomerWho are customers? Why are customers important?Why do people communicate in business?So who are your customers?Who are an organization’s customers?Internal CustomersInternal MarketingImproving customer communications.


195


Why do people communicate in Business: 1. To build relationships internally and externally with individuals and

groups 2. To give specific instructions to others on a range of business matters,

both procedural and strategic.3. To disseminate information on a range of corporate matters such as the

mission statement, policy issues or, in the case of the external market, on price changes or new promotional initiatives

4. To share ideas and values on work-related issues or procedural tasks5. To negotiate matters of policy as a joint venture or merger6. To discuss or negotiate on personal or professional matters such as

remuneration and other higher and lower level hygiene factors7. To motivate, interest and stimulate employees for commitment and

loyalty to the firm8. To create an awareness of the organization, its products or services

and persuade the external market, for example, to make a purchase decision or to request further information

9. To receive feedback in order to monitor whether the communication was understood and the reaction of the recipient to the message.


196


UNIT 2: BUYING BEHAVIOURThe purpose of communication

Communications and marketing

Relating customer behaviour to external communications

Communication objectives and buying process

How the buying process relates to communications

Understanding organizational buying behaviour

Bibliography.


197


UNIT 3: THE COMMUNICATION PROCESS:The purpose of communication

The communication chain

Barriers to successful communication

Avoiding barriers to communication

Effective communicators

Planning the business message

How the PASS framework can help in planning messages.


198


UNIT 4: THE COMMUNICATIONS MIX:The communications mix or promotions mixIntegrated Marketing CommunicationsAbove-the-line promotional activityBelow-the-line promotional activityCorporate imageBrand imageLogosPackagingPoint of sale display and Merchandising.Sales promotionExhibitionSponsorshipPublic relationsDirect MarketingEvaluating the effect pf advertisingThe role of the brief.


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Above-the-line communication methods:

AdvertisementDefinition: This is any paid form of non-personal presentation and promotion of ideas, goods or

services byan identified sponsor

Advertisement can be done through the following means: Above-the-line advertisement. Radio

Television

Newspaper: Local, national and international newspapers; E.G The times, financial times, daily mirrow, express and star and the sun.

Internet

Magazine

Outdoor

CinemaSources: Philip Kotler(Principles of Marketing), CIM course book.

UNIT 4: THE COMMUNICATIONS MIX:

200


ADVERTISMENT:This is any paid form of non-personal presentation and promotion of ideas, goods or

services by

an identified sponsor


Sources: Philip Kotler(Principles of Marketing-4th European Edition) and CIM course book.

201

ADVERTISMENT:

Main Advertising Decisions

Objectives setting

Communication

Objectives

Sales Objectives

Budget decisions

Advertising strategy

Campaignevaluation

Messagedecision

Media decision

Affordable approach

Percentage of sales

Competitive parity

Objective and task

Message strategy

Message execution

Reach, frequency,Impact

Main media types

Specific media vehicles

Media timing

CommunicationImpact

Sales impact

202

ADVERTISMENT:Important decisions in advertising:

Setting advertising objectives: The first step is to set advertising objectives. Advertising objective is a specific communication task to be accomplished

with a specific target audience during a specific period of time.

203

ADVERTISMENT:

Possible Advertising Objectives:

Informative advertisingTelling the market about a new product Describing available servicesSuggesting new uses for a product Correcting false impressionsInforming the market of a price change Reducing customers’ fearsExplaining how the product works Building a company image.

Persuasive advertisingBuilding brand preferenceEncouraging switching to your brandChanging customer perceptions of product attributesPersuading customers to purchase nowPersuading customer to receive a sales call

Reminder advertisingReminding customers that the product may be needed in the near futureReminding customers where to buy the productKeeping the product in customers’ minds during off-seasonsMaintaining top-of-mind product awareness.

204

ADVERTISMENT:Setting the advertising budget After determining its objectives, the company

next sets its advertising budget for each product.

Four methods for determining promotion budget

205

ADVERTISMENT:

Specific factors that should be considered when setting the advertising budget:

1. Stage in the product life-cycle:

2. Market share

3. Competition and Clutter

4. Advertising frequency

5. Product differentiation

206

ADVERTISMENT:

Developing Advertising Strategy:

Creating the advertising message:

No matter how big the budget, advertising can succeed

only if commercials gain attention and communicate

well.

207

ADVERTISMENT:

The changing message environment

208

ADVERTISMENT:

Message strategy:

209

ADVERTISMENT:

Message Execution

Any message can be presented in different execution styles such as the following:

Slice of life Lifestyle Fantasy Mood or image Musical Personality symbol Technical expertise Scientific evidence. Testimonial evidence or endorsement

210

ADVERTISMENT:

Selecting advertising media

Deciding on reach, frequency and impact

Choosing among chief media types

211

ADVERTISMENT:

Choosing among chief media typesMedium Advantages Limitations

Newspapers

Flexibility;timeliness; local market coverage;broad acceptance; high believability

Short life; poor reproduction quality; small pass-along audience.

Television Good mass-market coverage; low cost per exposure; combines sight, sound and motion; appealing to the senses.

High absolute cost; high clutter; fleeting exposure; less audience selectivity.

Radio Good local acceptance; high geographic and demographic selectivity; low cost.

Audio presentation only; low attention ( the ‘half-heard’ medium); fleeting exposure; fragmented audience

Magazines High geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life; good pass-along readership.

Long ad purchase lead time; high cost; some waste circulation; no guarantee of position.

Direct mail High audience selectivity; flexibility; no ad competition within the same medium; allows personalization.

Relatively high cost per exposure;

‘Junk mail’ image.

Outdoor Flexibility; high repeat exposure; low cost; low message competition; good positional selectivity.

No audience selectivity; creative limitations.

Internet High selectivity; low cost; immediacy; interactive capabilities.

Small, demographically skewed audience; relatively low impact; audience controls exposure.

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ADVERTISMENT:

Selecting Specific Media Vehicles

Deciding on Media timing

213

ADVERTISMENT:

EVALUATING ADVERTISING:

214

ADVERTISMENT:

Repeat

Trial

Intention

Preference

Attitude

Aware

Unaware

215

ADVERTISMENT:

Other advertising considerations:

Organizing for advertising

216

ADVERTISMENT:

International advertising decisions

Standardisation or differentiation

Centralisation and decentralisation

217

ADVERTISMENT:Worldwide advertising media:

218

ADVERTISMENT:

Media planning, buying and costs

International advertising regulations

219

Below the line communication: UNIT 4: THE COMMUNICATIONS MIX

Corporate imageBrand image

Logos

Packaging

Point of sale display and Merchandising.

Sales promotion

Trade fairs and Exhibition

Sponsorship

Public relationsDirect MarketingDirect Mail

Evaluating the effect of advertisingSource: Priciples of Marketing by Philip Kotler and CIM course book.

220

UNIT 4: THE COMMUNICATIONS MIX

Below the line communication: SALES PROMOTION: It is a short-term incentive to encourage purchase or sales of a product or service. It consists of short-term incentives, in addition to the basic benefits offered by the

product or service, to encourage the purchase or sale of a product or service. Whereas advertising offers reasons to buy a product or service, sales promotion

offers reasons that would achieve immediate sales. Sales promotion seeks to motivate the customer to buy now. Sales promotion includes a wide variety of promotion tools designed to stimulate

earlier or stronger market response. These tools are used by many organizations-manufacturers, distributors, retailers,

trade associations and non-profit institutions-and may be targeted towards the consumer or final buyer, business customers, the trade or retailer and the company’s sales force.

Consumer promotion include money-off, coupons, premiums, contests and others. Trade promotion range from special discounts, free goods and loyalty bonuses to

training. Business promotion include many of the same tools used for consumer or trade

promotions such as conventions and trade shows, as well as sales contests. Sales force promotions include bonuses, commissions, free gifts and competitions.

221

SALES PROMOTION:

Consumer promotion Sales promotion designed to stimulate consumer purchasing, including

samples, coupons, rebates, price-offs, premiums, patronage rewards, displays, and contests and sweepstakes.

Trade (or retailer promotion) Sales promotion designed to gain reseller support and to improve reseller

selling efforts, including discounts, allowances, free goods, cooperative advertising, push money, and conventions and trade shows.

Business promotion Sales promotion designed to generate business leads, stimulate purchase,

reward business customers and motivate the salesforce.

Sales force promotion Sales promotion designed to motivate the sales force and make sales force

selling efforts more effective, including bonuses, contests and sales rallies.

222

SALES PROMOTIONMAJOR SALES PROMOTION TOOLS:CONSUMER PROMOTION TOOLS:1. Samples: Offers to consumers of a trial amount of a product2. Coupons: Certificates that give buyers a saving when they purchase a

product3. Cash refund offers (rebates): Offers to refund part of the purchase price of a

product to consumers who send a ‘proof of purchase’ to the manufacturer4. Price packs: Reduced prices that are marked by the producer directly on the

label or package5. Premiums: Goods offered either free or at low cost as an incentive to buy a

product.6. Advertising specialities: Useful articles imprinted with an advertiser’s name,

given as gifts to consumers.7. Patronage rewards: Cash or other awards for the regular use of a certain

company’s products or services.8. Point-of-purchase (POP) promotions: Displays and demonstrations that take

place at the point of purchase or sale.9. Competitions, sweepstakes, lotteries and games: promotions that offer

customers the chance to win something – cash, goods or trips – by luck or extra effort.

223

STAKEHOLDERS

Staff

Supplier

Distributors

Community

Competitors Management

Media

FinancialInstitutions

Pressure groups

Customers

Owners

Government

Stakeholders

224

MAJOR SALES PROMOTION TOOLS:TRADE PROMOTION TOOLS:

DISCOUNT: A straight reduction in price on purchases during a stated period of time

ALLOWANCE: (1)Reduction in price on damaged goods.

(2) Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer’s product in some way.

SALES PROMOTION

225

SALES PROMOTIONMAJOR SALES PROMOTION TOOLS:

BUSINESS PROMOTION TOOLS

1. Conventions and trade shows

2. Sales contests

226

SALES PROMOTIONRAPID GROWTH OF SALES PROMOTION

227

SALES PROMOTION

SETTING SALES PROMOTION OBJECTIVES

228

SALES PROMOTION-consumer marketMAJOR SALES PROMOTION TOOLS SamplesOffers to consumers of a trial amount a product CouponsCertificates that give a saving when they purchase a product Cash refund offers (rebates)Offers to refund part of the purchase price of the purchase price of a product to consumerswho send a ‘proof of purchase’ to the manufacturer Price packsReduced prices that are marked by the producer directly on the label or package Premiums Goods offered either free or at low cost as an incentive to buy a product Advertising specialtiesUseful articles imprinted with an advertiser’s name, given as gifts to consumers. Patronage rewardsCash or other awards for the regular use of a certain company’s products or services. Point-of-purchase (POP) promotionsDisplays and demonstrations that take place at the point of purchase or sale Competitions, Sweepstakes, lotteries and gamesPromotions that offer customers the chance to win something – cash, goods or trips – by luck or

extra effort.

229

Below the line communication:

PUBLIC RELATIONS1.This is a planned, sustained and deliberate effort by an

organization

to maintain a good relationship with the public.

2.Public relations means building good relations with the company’s

various publics by obtaining favorable Publicity, building up a good

‘corporate image’, handling or heading off unfavourable rumours,

Stories and events. Major PR tools include press relations, product

publicity, corporate communications, lobbying and counselling:

230

PUBLIC RELATIONSPublic relations is another mass-promotion technique. This concerns building good

relations with the

company’s various publics by obtaining favourable publicity, building up a good ‘corporate image' and

handling or heading off unfavourable rumours, stories and events. Public relations (PR) departments

Perform any or all of the following functions:

1. Press relations or press agency: Creating and placing newsworthy information in the news media to attract attention to a person, product or service.

2. Product publicity: Publicising specific products

3. Public affairs: Building and maintaining local, national and international relations.

4. Lobbying: Building and maintaining relations with legislators and government officials to influence legislation and regulation.

5. Investor relations: Maintaining relationships with shareholders and others in the financial community.

6. Development: Public relations with donors or members of non-profit organisations to gain financial or volunteer support.

231

PUBLIC RELATIONS Public relations is used to promote products, people, places, ideas,

activities,organisations and even nations.Trade associations have used public relations to rebuild interest in decliningcommodities. Nations use public relations to attract more tourists, foreign

investmentand international support. The government uses public relations to sensitize the public about the

consumptionof dangerous products such as cigarettes and alcohol.

The government also uses public relations to make the public to protect them selves

from diseases e.g. AIDS. Steal in this light, the government uses PR to educate the

public about precautionary measures to take in so far as Bird Flu Virus is concerned.

Pressure groups such as the Food Standards Agency also uses the PR to inform customers about those harmful products which can damage their health.

232

PUBLIC RELATIONSMAJOR PUBLIC RELATIONS TOOLS: PR professionals use several tools. One essential tool is news . PR professionals find or create favourable newsabout the company and its products or people. Sometimes news stories occur naturally. At other times, the PR person cansuggest events or activities that would create news. Speeches also create product and company publicity. Increasingly, company executives must field questions

from the media or give talks at trade associations or sales meetings. These events can either build or hurt the company’s image.

Another common PR tool is special news, ranging from news conferences, press tours, grand openings and firework displays to laser shows, hot-air balloon releases, multimedia presentations and star-studded spectaculars, or educational programmes designed to reach and interest target publics.

Public relations people also prepare written material to reach and influence their target markets. These materials include annual reports, brochures, articles and company newsletter and magazines.

Audiovisual materials such as films, slide-and-sound programmes and video and audio cassettes, are being used increasingly as communication tools.

Corporate-identity materials also help create a corporate identity that the public immediately recognises. Logos, stationery, brochures, signs, business forms, business cards, buildings, uniforms and even company cars and trucks make effective marketing tools when they are attractive, distinctive and memorable.

Finally, companies might improve goodwill by contributing money and time to public service activities: campaigns to raise funds for worthy causes- for example, to fight illiteracy, AIDS, Bird Flu, Tuberculosis, cancer; support the work of a charity, or assist the aged and handicapped- help to raise public recognition.

Sponsorship is any vehicle through which corporations gain public relations exposure. Corporate sponsorships have become an important promotional tool for companies looking to lift their brand image, or introduce new product lines or services. Worldwide spending on sponsorships totalled $24bn in 2002, an annual increase of 3.4 percent according to a Chicago based research company (IEG).

233

PUBLIC RELATIONSMAIN PUBLIC RELATIONS DECISIONS

234

PUBLIC RELATIONSSETTING PUBLIC RELATIONS OBJECTIVES

235

PUBLIC RELATIONSCHOOSING PUBLIC RELATIONS MESSAGES

AND VEHICLES

236

PUBLIC RELATIONSIMPLEMENTING THE PUBLIC RELATIONS

PLAN

237

PUBLIC RELATIONSEVALUATING PUBLIC RELATION RESULTS

238

Below the line communication:

DIRECT MARKETING

It is direct communications with carefully targeted

individual customers to obtain an immediate response.

239

DIRECT MARKETINGTHE BENEFITS OF DIRECT MARKETING TO THECONSUMERDirect marketing benefits buyers in many ways:1. First it is convenient: from the comfort of their homes or offices, customers can browse mailcatalogues or sellers’ websites at any time of the day or night. Buying is easy and private. Customer confront fewer buying hassles and do not have to face salespeople or open themselves up to persuasion andemotional pitches. Business Customers can learn about available products and services without waiting forand tying up time with sales people.2. Direct Marketing often gives shoppers greater product access and selection: For example, the world’s thelimit for web. Cyberstores such as Amazon, CDNow and others can offer an almost unlimited selectioncompared to the more meagre assortments of counterparts in the bricks- and –mortar world. Beyond abroader selection of sellers and products, online and Internet channels also give buyers access to a wealth ofcomparative information, information about companies, products and competitors, at home and around theglobe. Good websites often provide more information in more useful forms than even the most solicitoussalesclerk can. Amazon. COM and CDNow, for example, offer best-seller lists and reviews:3. Finally, direct marketing- especially online buying – is interactive and immediate. Customers can often interactwith the sellers by phone or on the seller’s website to create exactly the configuration of information, products orservices they desire, then order them on the spot. Furthermore, the internet and other forms of direct marketing

givecustomers a greater measure and sense of control. For example, a rising proportion of car buyers ‘shop online’,arming themselves with information about car models and dealer costs before showing up at a dealership.

240

DIRECT MARKETING

THE BENEFITS OF DIRECT MARKETING TO

THE SELLER: Direct marketing also yields many benefits to sellers:

1. Direct marketing is a powerful tool for customer relationship building:

2. Direct marketing gives sellers access to buyers that they could not reach through other channels. For example, the internet provides access to global markets that might otherwise be out of reach.

3. Finally, direct marketing can offer sellers a low-cost, fast and efficient alternative for reaching their markets. For example, direct marketing has grown rapidly in B2B marketing, partly in response to the ever-increasing costs of marketing through the sales force.

241

DIRECT MARKETINGFORMS OF DIERCT MARKETING

Telephone marketing

Direct-mail marketing

Catalogue marketing

Direct-response television marketing

Integrated direct marketing

242

Content of PART D Customer CommunicationUNIT 4: THE COMMUNICATIONS MIX: Sources: Philip Kotler(Priciples of Marketing

Below the line advert

Advantages Disadvantages

Corporate image

Brand image

Logos

Packaging

POSDM

Sales promotion

Exhibitions

Sponsorship

Public relations

Direct marketing

243


Above the line advert Advantages Disadvantages

Television: Terrestrial, satellite, cable and interactive: Local, national and International.

Can provide movement/colour/sound and emotion.It is an intrusive medium.Viewers can identify with situations in adverts.Mass, regional or specific coverage available.

Short time of adverts restricts information-passing.Can be repetitive which will result in boredom for viewer.Costly/time consuming to produce live advertsAdverts shown when many supply points are closed.Adverts not retained for review(consider home videos)Can be difficult for viewer to respond(consider tele-marketing)

Radio: Local, national and international.

Airtime is not very expensive.Offers sound effects and emotion.Versatile in location (Portable)It is intrusive.

Non-visualTransmit only non complex infoNeeds repetitive advert to ensure coverage.High risk of listener intolerance due to repetition.

Press Advertising: It covers all printed papers; Newspapers, Magazines and directories. It may be national, regional, specialist, trade or general publications.

High circulation with good opportunity to see(OTS).Audience can be easily identifiedInformation can be saved and retrievedAdvantages can include response coupons.Relatively low costs involved(both preparation and advert space)

No sound and MovementIf too many adverts, some will be missed.Magazines require long lead time.Printing only as good as the staff involved.

244


Above the line advert Advantages Disadvantages

Cinema

Internet

Outdoor

245


UNIT 5: THE ROLE OF INFORMATION COMMUNICATION TECHNOLOGY IN CUSTOMER RELATIONSHIPS:

How communications with customers is changing

The evolution of e-business

Using ICT to improve customer communications.

The Internet

Websites

Electronic Mail

Intranet

Extranet

E-Commerce

E-Business

E-Marketing

Signposts for the future

Telecommunications

Digital technology Source: CIM course book

246

UNIT 6: EFFECTIVE COMMUNICATIONS

Communication skills in marketing.Verbal communicationNon-verbal communicationUsing and interpreting non-verbal communicationListening skillsUsing the telephonePlanning telephone callsGuidelines for making effective telephone callsGuidelines for receiving callsConference calls

Presentation skills.



247


UNIT 7: COMMUNICATING IN MEETINGS, INTERVIEWS AND NEGOTIATIONS:

Meetings

Reasons for meeting

Types of meetings.

Managing meetings

Constituting a formal meeting

Terminology of meetings

Meeting documents

The role of interview and negotiations

Purpose of interview

Types of interview

Planning the interviews

The interview process

Types of questions

Negotiations


248


UNIT 8 : USING STATISTICAL DATA AND VISUAL INFORMATION:

Why is data relevant to marketing?

Interpreting, selecting and summarizing information

Why use visual information?

How to present visual information?

Problems with distorting information.


249


UNIT 9: WRITTEN COMMUNICATION FORMATS

Why study communication formats?

Written communications skills in marketing

When to use letters

The layout of a business letter

Types of letters

Memoranda

E-MAIL

Notices

Reports

Articles.


250

WRITTEN COMMUNICATION FORMAT(a) Blocked layout (b) Semi-blocked

layout

Letter head Letterhead---------------------- ------------------------

----------------------- -------------------------

--------------------- ----------------------------------------------- ----------------------------------------------- ---------------------------

------------------ ------------------------------------------------------------ -------------------------------------------------------------- ------------------------------------------------------------- -------------------------------------- ----------------

--------------- ------------------------------- --------------------------------- -----------------

Layouts for business letters: (a) blocked; (b) semi-blocked

251

WRITTEN COMMUNICATION FORMAT LETTERHEAD

Letter references

Date

Inside address of recipient

Attention letter

Salutation

Subject heading

Body

Complimentary Close

Signature

Name

Position

Enclosure reference.

A template for a business letter

252

WRITTEN COMMUNICATION FORMAT

Midshire Bank Plc High Street Assington Berkshire AS 1 6ELMr Joe Davies17 Goldthorpe WayAssburyBerkshire AS2 4WQ

12 April 200X

Dear Mr Davies

At Midshire Bank we try to provide banking facilities of the highest quality in order to accurately meet ourcustomer’s needs. To do this ti is essential that we listen to what our customers hafe to say. Wwe wouldlike you to help uus by giving us your opiinion of Midshrie Bank’s services.

We are asking an independent market research company. TMI Limited to interview a number of customersover the next few weeks. TMI Limited is a reputabnle company and your individual responses will becompletely confidential to them, according to the Market Research Society’s Code of conduct.

They will be co ducting the interviews by telephone and so an interviewer may telephone you at some pointover the next few weeks.

Because TMI Limited will choose who to overview, you might not be contacted in this instance. Ift yhour are,we wouold vallue your contribution and hope you wil be able to help use if asked.Yours SincerelySignatureCharles GowersBranch Manager.

A sample customer letter

253


MAKE-IT BUILDING SUPPLIERS Churchyard Grove Pickwick Lancashire LU1 5TF Tel: 0123 668791Our ref: HBJ/abcOctober 1st 20XX

The Timber Merchants LtdStation RoadRiponYorkshire YU8 TR3

For the attention of Deborah Jones

Dear Ms Jones,

Account Number: 5690 Special order under invoice 123 Further to our last order, would you supply the following additional items: 1 20 metres to extra hard-wearing timber for fencing. £5.95 per metre excl.VAT=£1192 5 litres of creosote liquid in natural colour. £2.75 per litres excl.VAT=£13.753 24 litres of indoor wood varnish in antique pine. £1.44 per litres excl VAT= £34.56 Balance £167.31 VAT on items £29.28 Total balance £196.59 The balance should be started on the above invoice and charged to our existing account. I would appreciate

delivery by November 15th, latest.Yours sincerely, SignHarold JenkinsPurchasing Manager.

An order letter.

254


ULTIMATE COMPUTER COMPANY Ltd 3 THE Gateway Hounslow Middlesex TW15 6TU Tel: 0181 967 6345TRJ/abcOctober 1st 20XX

Mr Andrew CollinsMarketing Communications Consultants‘The Nook’Twinkle LaneBeaconsfieldBUCKS DU18 74R

Dear Mr Collins

Ref: ‘Computers of the World’ Exhibition, London, 20XXI had the pleasure of using your professional services in helping us to prepare andpresent at the above last year.We are now in the process of planning to exhibit our new product range again this year and would like to know

whether you would offer us your services. I am pleased to enclose our latest catalogue.Please contact me at the end of next week to arrange for a meeting at our offices.I look forward to hearing from you.

Yours sincerely,

Timothy R. JonesMarketing Manager

Enc. Catalogue of product range X.

A letter of enquiry.

255


BEAUTY POTIONS LTD

2-6 Staines Road

Windsor

Berkshire BK7 9LE

Tel: 01753 576423

JK/abc

October 1st 20XX

Variety Fragrances

10 Harrow Road

Wembley

Middlesex 8TU 65R

For the attention of Mr Gardiner

Dear Mr Gardiner,

On September 5th 20XX, we received your order 1112, together with the invoice, 2224.

You will note that the first item on the invoice is listed as 50. Fragance ‘Irresistible’, but unfortunately we received 50. Fragrance ‘Uncontrollable’. A copy of the invoice is attached.

Please be kind enough to collect the wrong items and have them replaced by 50. Fragrance ‘Irresistible’ at the same time.

I look forward to receiving the correct order by November 1st 20XX.

Sincerely,

Joanna Kemp

Sales and Purchasing Manager

Enc. Copy of invoice 2224

A letter of complaint

256


CATERING WHOLESALERS LTD 35 Redruth Avenue Tunbridge Kent TN15 UCI T el: 01932 57311HB/abcOctober 1st 20XX

Mr R.AndersonThe Manager‘The Restaurant’76 Sevenoaks RoadSevenoaksKENT

Dear Mr Anderson,

Thank you very much for your recent application for credit. I am pleased to inform you that this has been approved.

Our terms and conditions are as follows: A credit limit of £2000 is available for your establishment. Invoices must be settled within 15days of the date of issue, after which an interest charge of 5%

will be levied on outstanding balances.

Yours sincerely,

Harry BainsCredit Manager.

A letter approving credit

257


FINANCE and INSURANCE Co

The Causeway Newcastle upon Tyne NN4 65T Tel: 0191 35202SB/abcOctober 1st 20XX

The Membership SecretaryChartered Institute of MarketingMoor HallCookhamBerks

Dear Sir/Madam,Re: Caroline Taylor

I am pleased to support Ms Taylor’s application for membership of the Chartered Instituteof Marketing

Ms Taylor has been in our employment for 6 years working in the area of Direct Marketing.

I understand that she passed all her CIM examinations and will be pleased to receivefurther benefit as a member of the CIM

Yours faithfully,l

Sheila BrownMarketing Director.

A letter of recommendation

258


MEMO

Medical Software Ltd

To: Carole Francis(Sales and Marketing Director)

From: Clare White (Marketing Manager)

Copy to: Hannah Craven (secretary)

Subject: Software 20XX Exhibition, Amsterdam, December 1st –3rd

Date: October 1st 20XX

We have 8 weeks before the exhibition takes place and need to finalize the details

of the follow-up campaign, particularly the role of our sales force.

Further to our meeting last week, we also need to discuss the sales promotion

initiatives to push our products following the exhibition.

Please confirm that a meeting on October 5th at 3pm in my office will be

convenient.

A memo

259


An example of an email message.

2f07b5c3F00000002f07b5c3kasongwe

Message Composition

Send now Quote Attach Address Stop

Subject: Click here to enter the subject: exhibition material

Addressing Attachments

Mail To: [email protected]: Click here to enter carbon copy [email protected]

Dear Jane

Thanks for the opportunity to quote for the exhibition material job. I have produced some costings and draft timescale based on our requirements. Please see the attachment. Ring me if you have any queries. I amount of the office until Monday but I will ring you then to see if you want me to proceed with thework.

Regards

Alex Kelly

260


A notice

SAFETY FIRST!

A Special First-AID Course designed to give You basic introduction will be available free To all employees on the following dates.

October 1st 5-6pm November 1st5-6pm December 1st 5-6pm

The number of places is limited to 20 per class so early booking is advisable.

Contact: Jane Slater, ext. 123

261


An example of a formal report

REPORTTO: Denise Wood, Marketing ManagerFROM: Amy Mills, Marketing AssistantDATE: 6 December 2005GO EASY- THE CASE FOR A WEBSITE & ON-LINE BOOKING SERVICE

1.Introduction

2.Findings

3. Conclusions

262


PRINTMAN PRINTING COMPANYReport on Office Telecommunications Facilities

To: Mark Scrivens, Managing DirectorFrom: Jo Goodwin, Sales and Marketing ManagerDate: 2 December 2005Introduction

FindingsArguments for1. Arguments against1.Conclusions.Recommendation

An example of an informal report

consumer costs and benefits organization

Documents

marketing process

marketing presentation

principles of marketing

marketing concept

marketing activitydevelop

marketing culturedifficulties

productthe marketing

budgetingthe marketing