MARKETING MANAGEMENT

Marketing is the science of meeting the needs of a customer by providing valuable products to customers by
utilizing the expertise of the organization, at same time, to achieve organizational goals.

Classical marketing is often described in terms of the four “P’s, which are:

 Product – what goods or services are offered to customers

 Promotion – how the producer communicates the value of its products
 Price – the value of the exchange between the customer and producer
 Placement – how the product is delivered to the customer.
A complete analysis of these categories is often called the Marketing Mix.
“Marketing mix” is a general phrase used to describe the different kinds of choices organizations have to make
in the whole process of bringing a product or service to market

Product/Service
* What does the customer want from the product/service? What need does it satisfy?
* How and where will the customer use it?
* What size(s), colour(s), and so on, should it be?
* What is it to be called?
* How is it branded?
* How is it differentiated versus your competitors?
Place
* Where do buyers look for your product or service?
* If they look in a store, what kind?
* How can you access the right distribution channels?
* Do you need to use a sales force?
* What do your competitors do, and how can you learn from that and/or differentiate?
Price
 What is the value of the product or service to the buyer?
 Are there established price points for products or services in this area?
 Is the customer price sensitive?
 What discount should be offered to trade customers, or to other specific segments of your market?
 How will your price compare with your competitors?
Promotion
* Where and when can you get across your marketing messages to your target market?
* What is the best media to meet target audience?
* When is the best time to promote? Is there seasonality in the market? Are there any wider environmental
issues that suggest or dictate the timing of your market launch, or the timing off subsequent promotion?
* How do your competitors do their promotions?

4 C’s
 Customer needs and wants (the equivalent of product)
 Cost (price),
 Convenience (place)
 Communication

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Marketing has both inbound and outbound activities.

 Inbound activities largely center on discovering the needs and wants of the potential customers.
Other inbound activities are the analysis of market segment needs; analysis of existing sales and
profitability; the descriptions, design and introduction of new products; and the analysis of
competitor
 Outbound activities include all aspects of informing the market that a product is available, delivering
that product, and encouraging the purchase decision. These activities include advertising, promotion,
supply chain, sales support, product training, and customer support.

Marketing Models
 Business to Consumer (B2C) model - When the producer is a commercial entity and the end user
makes the purchasing decision.
 Business to Business (B2B) - When the producer is a commercial entity and a second commercial
entity makes the purchasing decision but provides the product to their customer

Aspects of Marketing
Marketing has many aspects or sub-disciplines within the broad discipline of marketing. They include:
• Advertising. • New product development.
• Branding. • Pricing.
• Copywriting. • Product management
• Customer relationship management (CRM). • Promotion.
• Direct marketing. • Public relations.
• Event planning. • Sales management and support.
• Graphic design. • Search engine optimization (SEO).
• Internet Marketing. • Social media optimization.
• Loyalty marketing. • Strategic planning.
• Market research. • Supply chain management.
• Marketing communications.
• Media relations.
• Merchandising.

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The Market- The market consists of all prospective customers for a given product, service, or idea.
Customers can be purchasers who intend to resell the product or end users who intend to use or consume
the product
The Product - that can be marketed include all goods, services, and ideas that are sold or traded.
Products can be either tangible, as in the case of physical goods, or intangibles, such as those associated
with service benefits or ideas (intellectual property), or any combination of the three.
Goods - Goods are a physical product capable of being delivered to a purchaser and involves the transfer
of ownership from seller to customer.
Services - A service is a non-material action resulting in a measurable change of state for the purchaser
caused by the provider.
Ideas (Intellectual Property) - Intellectual Property is any creation of the intellect that has commercial value,
but is sold or traded only as an idea, and not a resulting service or good. This includes copyrighted property
such as literary or artistic works, and ideational property, such as patents, appellations of origin, business
methods, and industrial processes.
Product Pricing - price is set at a level which indicates the perceived value agreement between producer and
purchaser. The price is set by balancing many factors including supply-and-demand, cost, desired profit,
competition, perceived value, and market behavior.
Product Promotion - Informing the market about a product, product line, brand, or company and
encouraging a purchase decision. There are many ways to promote including:
 Advertising
 Personal selling
 Word of mouth, including electronic endorsements
 Sales discounts
 Public Relations/Publicity
 Sampling
 Product placement

Product Distribution - Delivery of the product to the purchaser. This can be done by;
 Direct sale to the customer from the producer
 Wholesale distribution where the producer sells in large quantities only to an intermediary, not the end
user
 Retail sales where a retailer will buy large quantities, but sell smaller quantities to individual customers
 Value added resale (VARs) where an organization purchases a product from a producer and, in turn,
resells it to a consumer after adding additional products, services, or expertise.

Marketing Concepts

Earlier approaches
The marketing orientation evolved from earlier orientations, namely, the production orientation, the
product orientation and the selling orientation.
 Production orientation – Production methods - until the 1950s - A firm focusing on a production orientation
specializes in producing as much as possible of a given product or service. Thus, this signifies a firm exploiting
economies of scale until the minimum efficient scale is reached. A production orientation may be deployed
when a high demand for a product or service exists, coupled with a good certainty that consumer tastes will
not rapidly alter (similar to the sales orientation).
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 Product orientation- Quality of the product - until the 1950s - A firm focusing on a production orientation
specializes in producing as much as possible of a given product or service. Thus, this signifies a firm exploiting
economies of scale until the minimum efficient scale is reached. A production orientation may be deployed
when a high demand for a product or service exists, coupled with a good certainty that consumer tastes will
not rapidly alter (similar to the sales orientation).
 Selling orientation - Selling methods - 1950s and 1960s - A firm using a sales orientation focuses primarily on
the selling/promotion of a particular product, and not determining new consumer desires as such.
Consequently, this entails simply selling an already existing product, and using promotion techniques to attain
the highest sales possible. Such an orientation may suit scenarios in which a firm holds dead stock, or
otherwise sells a product that is in high demand, with little likelihood of changes in consumer tastes that
would diminish demand.
 Marketing orientation - The needs and wants of the customers - (1970s – present) - The 'marketing
orientation' is perhaps the most common orientation used in contemporary marketing. It involves a firm
essentially basing its marketing plans around the marketing concept, and thus supplying products to suit new
consumer tastes. As an example, a firm would employ market research to gauge consumer desires, use R&D
(research and development) to develop a product attuned to the revealed information, and then utilize
promotion techniques to ensure persons know the product exists.
 Holistic marketing orientation - Everything matters in marketing – 21st century - The holistic marketing
concept looks at marketing as a complex activity and acknowledges that everything matters in marketing - and
that a broad and integrated perspective is necessary in developing, designing and implementing marketing
programs and activities. The four components that characterize holistic marketing are relationship marketing,
internal marketing, integrated marketing, and socially responsive marketing.

Contemporary Approaches
 Relationship marketing - building and keeping good customer relations - 1970s - Emphasis is placed on the
whole relationship between suppliers and customers. The aim is to provide the best possible customer service
and build customer loyalty.
 Business marketing - Building and keeping relationships between organizations – 1980s - present - In this
context, marketing takes place between businesses or organizations. The product focus lies on industrial
goods or capital goods rather than consumer products or end products. Different forms of marketing
activities, such as promotion, advertising and communication to the customer are used.
 Societal marketing – Benefit to society – 1990s – present - Similar characteristics to marketing orientation but
with the added proviso that there will be a curtailment of any harmful activities to society, in product,
production, or selling methods.
 Branding - Brand value – 1980s – present - In this context, "branding" refers to the main company
philosophy and marketing is considered to be an instrument of branding philosophy.
New forms of marketing also use the internet and are therefore called internet marketing or more generally
e-marketing, online marketing, "digital marketing", search engine marketing, or desktop advertising.

Necessity of Marketing in an Economy - Marketing is most necessary in an economy when:

1) Free Supply of Goods: There are enough goods for consumers to buy. When supply exceeds demand.
2) Competitive Conditions: The consumer has many choices of almost equally well-matched brands.
3) Competition at Distribution Points: There is no bottle neck in the distribution chain, and all brands are
well represented at all relevant distribution outlets in the entire market.

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4) High Margins for Marketing and Profits: There are prospects for generating profit and marketing
potentials from every business venture.
5) Rapid Change in Technology and Consumer Taste: The pressing need to sell off what you have today to
avoid the obsolescence of tomorrow, and also try to beat your competitors in being the first to offer the
product of tomorrow, or at least a better product.
6) Frequent Purchases by Consumer: Marketing is most effective in mass consumable goods with quick
and continual repeat purchases.
7) Good Opportunities for Product Differentiation: This enables producers and sellers to woo and appeal to
consumers and buyers in different ways that will give them satisfaction.

Importance of Marketing to an Economy

The importance of marketing to any economy, include the following;
1) Marketing Impact on People: Marketing activities are affected by people’s beliefs, attitudes, life styles,
consumption pattern, purchase behavior, income, etc. Marketers help organizations and businesses to
develop products, promote, price and distribute them. Consumers’ satisfaction or dissatisfaction with these
products and activities go a long way in determining their consumption behavior.
2) Improved Quality of Life: Most consumers can always trace their knowledge and persuasion to patronize
the products they feel much dependent on to marketing dominated stimuli. Marketing presents consumers
with new, better and different brands and options of products which can meet their needs and helping them
to easily obtain and safely enjoy these products.
3) Improved Quality of Product: Competition has become more intense, such that only fast moving
companies and multinationals are surviving. This is because they have really capitalized on quality
improvement in products to enhance the dynamic consumers’ quest for goods and services.
4) Contribute to Gross National Product: The strength of any economy is measured in terms of its ability to
generate the required income within a given fiscal year or period. Thus such a country’s GNP must
appreciate overtime. Marketing is the pivot and life wire of any economy, because all other activities of an
organization generate costs and only marketing activities bring in the much needed revenues.
5) Acceleration of Economic Growth: Marketing encourages consumption by motivating people in a country
to patronize goods produced to meet their identified needs. When people buy goods that are produced in a
country, there is the tendency that producers will equally increase production to meet up with future
demands. In so doing, marketing increases the tempo of economic activities, creates wealth.
6) Economic Resuscitation and Business Turn- Around: Marketing is the most meaningful means for
achieving economic resuscitation and business turn- around strategy when economies go through economic
hardship. By practically adopting the modern marketing philosophy and fine-tuning its offerings to meet
consumer’s changing taste or counter competition, developing new and better products and exploiting new
markets at home or abroad, industries and organization can achieve economic resuscitation and a more
viable open widows for business prosperity.
7) Provide Job Opportunities: Marketing provides job opportunities to millions of people the world over.
This is mostly experienced in well industrialized countries and emerging markets. Most people in these
economies are engaged in private endeavors as investors and entrepreneurs. Some of these marketing
opportunities are abound in areas like, advertising, retailing, wholesaling, transportation, communication,
public relations, services, manufacturing, agents and brokers, to mention a few

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Problems of Marketing in Developing Economies

There are series of constraints that hinder the performance of marketing in most developing countries. The
experience of Nigeria and other Africa countries is worthy of note. These problems include the following;
1) Low Marketing Education: A well informed and educated people tend to be prosperous investors and
consumers. This is because they will imbibe the culture and tenets of marketing. But marketing
education is still generally low in developing countries. Many policy makers and managers of large
organizations still do not know what marketing is all about. Most of the people, though educated, yet
often compromise ethical marketing practices for worst alternatives such as sharp practices,
unwholesome behavior and smuggling that contribute less to gross total earnings of any country.
2) Preferences for Foreign Products: Because of the development process of most African countries and
their inability to produce most goods (especially technologically sophisticated products), they tend to
prefer buying from the more industrialized countries. This makes the development process of local
industries and commercial life of the people more impoverished. This situation makes the growth of
marketing and satisfaction of consumers locally difficult.
3) Low Patronage for Non-Essential Products and Services: The majority of the people in developing
countries are poor, and their per capita income is below average. This makes it imperatively difficult for
them to buy much of luxury goods. Rather their purchases and expenditure are directed towards
satisfying the basic needs for food, clothing, and accommodation.
4) High cost of production: Marketing has suffered dearly in most developing countries because virtually all
production techniques are imported from the developed world. The cost of acquiring equipment and
other inputs used for production locally to boost marketing is sometimes extremely exorbitant for the
poor developing countries to buy and finance.
5) Inadequate Infrastructures: Most developing countries are very poor, such that some of them depend on
aids from abroad. There are cases of debt accrual and debt burden hugging on some of the African
countries that are yet to be paid. It invariable becomes difficult for some of them to provide the
necessary infrastructures that would engender and propel smooth marketing scenario. The inability or
unwillingness of some developing countries to provide these necessary infrastructural facilities that will
facilitate the performance of marketing in these economies is in itself a major problem worthy of note.
6) Few Competitive Opportunities: Lucrative competitive businesses are not much in developing countries.
What are commonly found within African continent are peasant farmers, petty traders and negligible
number of investors that are not engaged in multimillion dollar businesses. In Nigeria one can find
competitive businesses mostly in the service industry, which contribute less than two percent of GDP.
But in the manufacturing sector nothing can be said of it, because there is no competition.
7) Over- Regulation of Business by Government: Another major problem that has be-deviled the
performance of marketing especially in Nigeria has been the issue of government regulations and
interferences in the activities of businesses and corporate firms. For instance, the over regulation of the
Nigeria economy especially between 1970-1985, including the enactment of the indigenization
decree, which excludes foreign interest from certain investment activities as well as the existence of a
complex bureaucratic requirements for direct and portfolio investment were among the major
constraints that hindered the development of marketing climate and foreign investment inflow.
8) Political Instability and Civil Unrest: Rapid economic growth and development of marketing techniques
cannot be achieved or attained in an environment of political and social instability or political hostility.
Political stability implies an orderly system for a positive change in governance and peaceful co-
existence amongst the citizenry that, poses a great challenge to marketing. Therefore, marketing does
not thrive where there is political instability and insecurity or civil disturbances.
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Prospects of Marketing in Developing Economies

Despite the numerous problems confronting marketing in developing countries, there exist prospects and
opportunities for future growth and development of marketing as the pivot of developing economies. These
prospects are explained as follows;
1) Growing Population: Before multinational companies establish their hold in any country they expect to
have a ready market for their products and services. Developed countries with their small population and
saturated domestic markets prefer marketing their products and services to emerging markets in developing
countries.
2) Absence of Competition and Large Unexplored Markets: By virtue of their large populations and
underdevelopment, developing countries have large markets that are not yet served or are partially served,
unsaturated as with developed countries, which allows for a boom for marketers.
3) Attractive Government Incentives: Trade policies in most developing countries are becoming quite
favorable to both local and foreign investors. These incentives include profit tax holidays, reduced or even
free customs and excise duties, liberalization of immigration and profit repatriation laws for foreign
investors.
4) Growing Affluence: Quite a large number of the consumers in developing countries are becoming
affluent. This will enable them to have reasonable discretionary income and purchasing power. This means
that a growing number of the consumers in many developing countries can now afford luxuries and other
products they could not purchase in the time past
5) Availability of Cheap Production Inputs: Most developing countries are endowed with abundant human
and material resources that are yet untapped. For example, Nigeria remains endowed with abundant natural
resources, good weather conditions and a large population. These will be readily handy for companies and
businesses to exploit.
6) Rapid Economic Development: the economies of developing nations are growing rapidly as a result of the
efforts being made by their various governments and the developmental agencies of the United Nations
towards this direction. These results to income re-distribution and increased purchasing power and
discretionary income are also enhanced.

Service marketing is a sub field of marketing. It is the marketing of economic activities offered by a business
to its clients for adequate consideration. It covers the marketing of both business to consumer (B2C) and
business to business (B2B) services.
Common examples of service marketing are found;
 Telecommunications
 Air travel
 Health care
 Financial services
 Hospitality services
 Car rental services
 Professional services.

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Characteristics of Services
 Inseparable – it is inseparable from the point where it is consumed, and from the provider of the
service. The consumer is actually involved in the production process that they are buying at the same
time as it is being produced for example medical test. Another attribute is that services have to be
close to the person consuming them. This localization means that consumption is inseparable from
production.
 Intangible – It cannot have a real, physical presence as does a product. For example, motor insurance
may have a certificate, but the financial service itself cannot be touched i.e. it is intangible. This
makes it tricky to evaluate the quality of service prior to consuming it since there are fewer attributes
of quality in comparison to a product. One way is to consider quality in terms of search, experience
and credence.
Search quality is the perception in the mind of the consumer of the quality of the product prior to
purchase through making a series of searches.
Experience quality Your experiences allow you to evaluate the level and nature of the service.
Credence quality is based upon the credibility of the service that you undertake.
 Perishable –in that once it has occurred it cannot be repeated in exactly the same way. For example,
a football match cannot be replicated exactly as it was played. You cannot put service in the
warehouse, or store in your inventory
 Variability – since the human involvement in service provision means that no two services will be
completely identical, they are variable. For example, returning to the same garage time and time
again for a service on your car might see different levels of customer satisfaction, or speediness of
work. So services tend to vary from one user experience to another.
 Homogeneity is where services are largely the same, the opposite of variability. Standardization is
largely embodied by the global brands which produce services.
 Right of ownership is not taken to the service, since you merely experience it. For example, an
engineer may service your air-conditioning, but you do not own the service, the engineer or his
equipment. You cannot sell it on once it has been consumed, and do not take ownership of it.

The 7 P’s of Services Marketing

The first four elements in the services marketing mix are the same as those in the traditional marketing mix.
However, given the unique nature of services, the implications of these are slightly different in case of
services.

Product: In case of services, the ‘product’ is intangible, heterogeneous and perishable. Moreover, its
production and consumption are inseparable. Hence, there is scope for customizing the offering as per
customer requirements and the actual customer encounter therefore assumes particular significance.
However, too much customization would compromise the standard delivery of the service and adversely
affect its quality. Hence particular care has to be taken in designing the service offering.
Pricing: Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking
into account the raw material costs, in the case of services, attendant costs – such as labor and overhead
costs - also need to be factored in. Thus, a restaurant not only has to charge for the cost of the food served
but also has to calculate a price for the ambience provided. The final price for the service is then arrived at
by including a markup for an adequate profit margin.

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Place: Since service delivery is concurrent with its production and cannot be stored or transported, the
location of the service product is important. Service providers have to give special thought to where the
service will be provided. Thus, a fine dine restaurant is better located in a busy, upscale market in
comparison to the outskirts of a city. Similarly, a holiday resort is better situated in the countryside away
from the rush and noise of a city.
Promotion: Since a service offering can be easily replicated, promotion becomes crucial in differentiating a
service offering in the mind of the consumer. Thus, service providers offering identical services such as
airlines or banks and insurance companies invest heavily in advertising their services. This is crucial in
attracting customers in a segment where the services providers have nearly identical offerings.

The final three elements of the services marketing mix - people, process and physical evidence - are unique
to the marketing of services.

People: People are a defining factor in a service delivery process, since a service is inseparable from the
person providing it. Thus, a restaurant is known as much for its food as for the service provided by its staff.
The same is true of banks and department stores. Consequently, customer service training for staff has
become a top priority for many organizations today.

Process: The process of service delivery is crucial since it ensures that the same standard of service is
repeatedly delivered to the customers. Therefore, most companies have a service blueprint which provides
the details of the service delivery process, often going down to even defining the service script and the
greeting phrases to be used by the service staff.

Physical Evidence: Since services are intangible in nature most service providers strive to incorporate certain
tangible elements into their offering to enhance customer experience. Thus, there are hair salons that have
well designed waiting areas often with magazines and plush sofas for patrons to read and relax while they
await their turn. Similarly, restaurants invest heavily in their interior design and decorations to offer a
tangible and unique experience to their guests.

Marketing Planning is the structured process that leads to a coordinated set of marketing decisions and
actions, for a specific organization and over a specific period, based on;
i. An analysis of the current internal and external situation, including markets and customers.
ii. Clear marketing direction, objectives, strategies and programs for targeted customer segments.
iii. Support through customer service and internal marketing programs.
iv. Management of marketing activities through implementation, evaluation and control.

Market plan is an internal document that outlines the market place situation and describes the marketing
strategies and programmes that will support the achievement of business and organization goals over a
specified period, usually one year.
The Benefits of Marketing Planning - Such planning enables marketers to examine any number of suitable
opportunities for satisfying customers and achieving marketing goals, as well as current and potential
threats to overall performance. The process provides a framework for systematically identifying and
evaluating different possibility and outcomes.
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The Dynamic Marketing Plan - A good marketing plan must be dynamic, anticipating likely changes and
providing guidelines for how to react with customer relationships in mind. The marketing environment has
become so volatile that the most successful companies continually update and revise their marketing plan
lasts forever’; even the most effective plan must be adjusted as the marketing situation evolves
The Marketing Planning Process - The Marketing plan document decisions and actions undertaken as a
result of the Seven Stage marketing planning process shown in the table below, most Organization begin this
process many months before a marketing plan is scheduled to take effect.

Marketing Segmentation is process of defining and subdividing a large homogenous market into clearly
identifiable segments having similar needs wants or demand characteristics. Its objective is to design a
marketing mix that precisely matches the expectations of customers in the targeted segments.
Few companies for example are big enough to supply the needs of an entire market; most must breakdown the
total demands into segments and choose those that the company is best equipped to handle

Four Basic Factors that Affect Market Segmentation are:

1. Clear identification of the segment
2. Measurability of its effective size
3. Its accessibility through promotional efforts, and
4. Its appropriateness to the policies and resources of the company.

The Four Basic Market Segmentation Strategies are based on.

1. Behavioral 2. Demographic 3. Psychographic 4. Geographical Differences

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Criteria for Segmentation

- It is possible to measure
- It must be large enough to earn profit
- It must be stable enough that it does not vanish after some time
- It is possible to reach potential customers via the organization’s promotion and distribution channel
- It is internally homogenous, that is potential customers from different segments have different quality
preferences
- It is responds consistently to a given market stimulus
- It can be reached by market intervention in a cost effective manners.
- It is useful in deciding on the market mix.

Market Segmentation strategies

1. Geographic Segmentation
Marketer can segment according to geographic criteria nations, states, regions, countries, cities,
neighborhoods or postal codes. The geo-cluster approach combines demographic data with geographic data
to create a more accurate or specific profile. With respects to region in rainy regions merchants can sell
things like raincoats, umbrellas and gumboots. In hot regions, one can sell warm summer wear. In cold
regions, someone can sell warm clothes. A small business commodity store may target only customers from
the local neighborhood.
2. Behavioural Segmentation
Behavioural Segmentation divides consumers into groups according to their knowledge of, attitude towards,
usage rate or response to a product.
3. Segmentation by Occasions
Segmentation can take place according to benefits sought by the consumer or according to perceived
benefits which a product/service may provide
4. Using Segmentation in Customer Retention
The basic approach to retention based segmentation is that a company tags each of its active customers
with three values:
- Is the customer at risk of canceling the company’s services?
- Is the customer worth retaining?
- What retention tactics should be used to retain the customer

Marketing organization is the foundation of effective sales planning and sales policies. It enables
systematic execution of plans, policies, programs for controlling all sales activities in order to achieve
maximum efficiency, profitability without sacrificing the level of customer services and satisfaction.

Role of marketing in an organization

The role of marketing in an organization is to please and win the loyal support of their customers. Marketing
involves planning, product development, packaging, pricing, distribution, etc. The marketing department has
responsibilities such as identifying target markets, identifying the most appropriate strategies, developing
new products, creating a sustainable competitive advantage and establishing management information
systems to identify progress.

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Six Types of Marketing Organizations

 Growth champion; This organization is highly valued within the company for its ability to drive revenue. It
is considered as important as other major departments, such as finance and sales. It drives the company’s
priorities and leads product innovation and new business development
 Senior counselor; Functioning as a high-level advisor on marketing strategy to the chief executive officer
and the individual businesses, the senior counselor leads major advertising, promotion, and public
relations campaigns’.
 Brand foreman; Above all, the brand foreman is an efficient provider of marketing services, ranging from
communication strategy to creative output and campaign execution, in support of the company’s key
brands. It serves as the central manager of agency relationship, and is considered among the company’s
most important support organizations.
 Growth facilitator; The growth facilitator has the authority and skills to develop and lead large, company-
wide marketing efforts and help as set the business overall priorities. These marketing organization
coordinators with other major functions, such as sales and product development.
 Best Practices Advisor; The best practices advisor work with the individual businesses to identify internal
and external best practices and incorporate them into all marketing activities. This organizations goal is
helping the businesses achieve maximum effectiveness and efficiency, and it has expertise across all
elements of the marketing toolkit
 Service provider; - This organization supplies marketing services such as adverting, promotion and public
relations at the request of the company’s brand and product teams. The service provider is effective at
executing specific task and is responsive to time sensitive requests.

Four Types of marketing Organization

 Functional organization;
It is one of the common forms of organization. All the activities are divided into line and staff
functions. For example; under staff function, sales manager, marketing manager, production
manager act as specialist and the line functions are given to sales department. The manager most
times looks after the work of line and staff functions, and the main drawback of the activities of the
company.
 Product oriented or brand management organization;
In this type of organization, the companies producing multiple products have individual manager to
look after the product and he develop the strategy related to the product, responsible for the
product, do advertising, promotion, distribution only for the product
 Geographical or market or territory organization;
This type of organization is made in case the company is selling the product worldwide. In this case
the people are assigned the job to a particular location, country, region, state, district which depends
upon the area. It may be three tier, two tier etc.
 Divisional or complex organization;
Usually big organizations have combination of all the above their types of the organization that’s why
such type of organization is called complex organization.

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The Three Types of Organizational Markets

Organizational markets are markets in which companies and individual purchase goods for purposes other
than personal consumption. These markets are characterized by having fewer buyers, but larger purchase
volumes, than consumer market do.
i. Producers;
Producers buy raw materials and machinery, often from other producers but sometimes from resellers.
Marketing to producers requires technical expertise and knowledge of the producer’s operations.
Typical marketing strategies involve identifying problem in the producer’s industry or particular
operations and proposing solutions that are cost- effective. Producers have a long term view of markets
since their needs change slowly. As a result, marketing to producers is usually based on long term
relationships.
ii. Resellers;
Resellers include wholesale companies and retailers, as well as niche suppliers that specialize in particular
area where they have expertise. The key factor for marketing to reseller is to be aware of their added-
value proposition. If the reseller is a wholesale company offering low prices for high volume, marketers
must develop proposal which address the characteristic. If the company buys specialized equipment
according to specifications and re-sells it to customers based on high quality and reliability, the
marketing will be different
iii. Institution
The institutional market includes governments and nonprofits. Marketing to these organizations is highly
specialized, with marketers relying on long term relationships as well as large, one-time opportunities.
The purchasing process for governments tends to be highly bureaucratic and a familiarity with
government procedures is a prerequisite. Where the idea of value in the other two market segments
tends towards the economic, value for these institutions exists more in benefit rather than profit.

Marketing research is the function which links the consumer, customer, and public to the marketer
through information – information used to identify and define marketing opportunities and problems;
generate, refine and evaluate marketing actions; monitor marketing performance; and improve our
understanding of marketing as a process.
 ‘Identify and define marketing opportunities and problems’ means using research to explore the
external environment.
 ‘Generate, refine and evaluate marketing actions’ means using research to determine whether the
company is meeting consumer needs.
 ‘Monitor marketing performance’ means using research to confirm whether the company is meeting the
goals it has set.
 ‘Understanding marketing as a process’ means using research to learn to market more effectively.

Importance of Marketing Research

 To Make Marketing Decisions: This research helps the marketers to make a decision about the
product or service. Sometimes a marketer might believe that the new product or service is useful for
the customers. However, research may show that customers do not need a product or are meeting
their needs with a certain competitor product and so on.
 Survive the Competition: Marketing research helps in ascertaining and understanding competitor
information such as their identity, marketing network, customer focus and scale of operations. This
helps in surviving and in certain cases, even leaving behind the competition.
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 Helps to Decide Target Markets: Research helps provide customer information in terms of their
location, age, buying behavior and gender. This helps the marketers zero in on the target markets
and customers for their products and services.
 Maximize Profits: Apart from profit maximizing steps such as item optimization, customer
profitability analysis, and price elasticity, marketing research allows you to find out methods that can
help you maximize profits.
 Increasing the Sales: Increasing the sales of your products or services helps a company in maximizing
its profits. By understanding the customer's needs, wants and attitude towards the products and
determining whether your products fit the bill, marketers can increase their sales.

Consumer behaviour is the study of individuals, groups, or organizations and the processes they use to
select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that
these processes have on the consumer and society.

Different Types of Consumers’ Behaviour

 Habitual buying habits are the most common and the simplest purchasing decisions for most
consumers. Choosing to buy a bunch of bananas rarely requires much extensive research on brands
and product offering, and may be done on a regular or habitual basis. Since a bunch of bananas from
one brand is likely to be quite similar to one from another brand, there is not a high level of
distinction between product choices. Habitual buying behaviour is most often found with low-cost
products for which a consumer has a regular need.
 Varietal buying, also called limited decision making, involves a little more thought than habitual
behaviour. This type of behaviour also requires little research on the part of the buyer, but may exist
in markets where there is a high level of product variety. When buying ice cream, for instance, a
consumer may have to choose between different flavors, often from different brands. Varietal buying
is frequently motivated by the desire for a change from habits, or the search for a better product.
 Complex or extensive decision making behaviour requires research and significant difference exist
between products. Buying a car is often a complex decision. Applies to markets where products are
high value and irregular purchases.
 Dissonance-reduction decisions, by contrast, also may require research, but occur in markets where
there is little difference between products. Applies to markets where products are high value and
irregular purchases, buying a one-carat pair of diamond earrings is a dissonance-reduction decision,
since most one-carat earrings will be roughly similar, regardless of brand.

Determinants of customer behaviour

 Individual determinants of consumer behavior- Under this sub-heading, there are five major groups of
individual determinants: personality and self-concept, motivation and involvement, information
processing, learning and memory, and, attitudes.
 Politics and Religion as determinants of consumer behavior - The political environment can play a large
part in consumer decision-making. For instance, in the aftermath of the terrorist attacks on September 11,
2001, sales of American flags and products with patriotic messages soared.
 Culture and Society as determinants of consumer behavior - Culture is the values, beliefs, preferences and
taste transfer from one generation to the next generation. Besides that, the subculture is a group with their

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own distinct modes of behaviour. As culture shifts its perception on certain topics, consumers follow.
A product can be seen as anything that is offered for acquisition, use and disposal, and that satisfies the
needs of the target market.

LEVELS OF PRODUCTS.
 Basic Product. - A marketer needs to convert the core benefit into a basic product. The product of petroleum
jelly should be made in a substance that makes it possible to achieve the desired effect especially in the
harmattan period.
 Core benefit. - This is the fundamental service or benefit that the customer is really buying. For instance, a
detergent buyer is buying cleanliness.
 Expected Product. - This set of attributes and conditions buyers normally expect when they purchase a
product. A buyer of detergent expects that it should be well packaged, reasonably priced and widely
available.
 Potential Product. - This encompasses all the possible argumentations and transformations a product might
undergo in the future. Here, companies search for new ways to satisfy customers and distinguish their
offers.
 Augmented Product - This is the improvement on the product that makes it possible for customers’
expectations to be augmented. An example, a petroleum jelly that is meant to retain oil moisture especially
during the harmattan period, in addition to body beautification represents an argumentation of the core
product.

CLASSIFICATION OF PRODUCTS.
Products fall into one of two general categories; products purchased to satisfy personal and family needs are
CONSUMER products. Those bought to use in a firm’s operation to resell, or to make other products are
BUSINESS products. Consumer buy products to satisfy the goals of their organizations Products classification
are important because they may influence pricing, distribution and promotion decisions.

CONSUMER PRODUCTS.
Products purchased to satisfy personal and family needs are CONSUMER products. Consumer products can
be categorized as -
1. Convenience Goods. - This type of products are relatively inexpensive, frequently purchased items for
which buyers exert only minimal purchasing effort. They range from bread, soft drinks and chewing gum
2. Shopping Products. - Shopping products are items which buyers are willing to expend considerable
effort in planning and making the purchase.
3. Specialty Products. - These type of products possess one or more unique characteristics, and generally
buyers are willing to expend considerable effort to obtain them.
4. Unsought Products - These types of products are purchased when sudden problem must be solved,
products of which customers are unaware, and products that people do not necessarily think of
purchasing.

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BUSINESS PRODUCTS
Products bought to use in a firm’s operation to resell, or to make other products
1. Installations. - These include facilities, such as office buildings, factories and warehouses, and major
equipment that are non-portable, such as production lines and very large machines.
2. Accessory Equipments. - These types of equipments does not become part of the final product but is
used in production or office activities.
3. Raw Materials - Raw materials are the basic natural materials that are actually become part of a
physical [product
4. Component Parts. - These items become part of the physical product and are either finished items
ready for assembly or products that need little processing before assembly.
5. Process Materials. - Process materials are used directly in the production of other products. Unlike
component parts, however, process materials are not readily identifiable.
6. MRO Supplies are maintenance, repair and operating items that facilitate production and operations
but do not become part of the finished products.
7. Business Services. - are intangible products that many organizations use in their operations. They
include financial, legal, marketing research and information technology.

The Product Life Cycle Concept.

A company which introduces a new product naturally hopes that the product will contribute to the profits
and provide consumer satisfaction. This however, does not always happen in practice. So progressive
organizations try to remain aware of what is happening throughout the life of the product in terms of the
sales and the resultant profits.
 THE INTRODUCTORY STAGE.
 THE GROWTH STAGE.
 THE MATURITY STAGE.
 THE DECLINE OR OBSOLESCE STAGE.

MARKETING MIX AT DIFFERENT STAGES

- At the introductory stage, the organization has to increase and thus spend a lot on physical distribution
and promotion. This is because the organization has to increase awareness and acceptance of the
product.
- At the growth stage, when the sales shoot up and the organization is satisfied with the profit generated
by the product; competitors will now enter the market. Therefore, the organization must begin to think
of how the product can be improved upon.
- At the maturity stage. there is a slowdown in the growth rate of sales in case of such mature products.
The decline can be arrested by improvements in the product and promotion.
- At the declining stage catches up. The decline may be slow or rapid. It may be due to better substitute
products, better competition, technological advances with which the organization has not kept up and
several other reasons. Promotional effort is required to be put in to prop up the product sales.

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OPTIONS IN THE DECLINE STAGE.

1 Improve product quality.
2 Add new product features resulting in extra benefits.
3 Penetrate new market.
4 Give incentives to distribution channels.
5 Expand the number of your distribution channels.
6 Improve advertising and sales effort.

NEW PRODUCT DEVELOPMENT STRATEGY.

 Generation of new product ideas
 Evaluation or screening of the ideas.
 Product concept development and evaluation.
 Product designing and evaluation.
 Product testing.
 Launching the new product.

A brand as “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods
or services of ne seller or group of sellers and to differentiate them from those of competitors.”
The following relevant terms have to be explained:

 Brand – word, mark, symbol, device or combination thereof, used to identify the product.
 Brand name – word, letter, group of words or letters comprising a name to identify the product and to
identify the seller.
 Brand mark – symbol for identification (mark, design, logo, type, colouring scheme, picture or combination
thereof).
 Trademark – the legalized version of the brand, to protect it from being used by others.

THE ROLE OF BRANDS

- Brands identify the source or maker of a product and allow consumers either individuals or
organizations to assign responsibility to a particular manufacturer or distributor.
- A brand also offers the firm legal protection for unique features or aspects of the product. The brand
name can be protected through registered trademarks; manufacturing processes can be protected
through patents; and packaging can be protected through copyrights and designs.
- Brands can signal a certain level of quality so that satisfied buyers can easily choose the product
again. Brand loyalty provides predictability and security of demand for the firm and creates barriers
to entry that make it difficult for other firms to enter the market.

Brand equity is the added value endowed to products and services. This value may be reflected in how
consumers think, feel, and act with respect to the brand, as well as the prices, market share, and profitability
that the brand commands for the firm.

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THE BENEFITS OF BRANDS

Brands generate value for companies in four ways:
1. Strong brands usually obtain price premiums from either consumers or resellers.
2. Strong brands obtain higher market shares.
3. Successful brands generate more stable and less risky earning streams because of customer loyalty.
4. Successful brands offer avenues for further growth.

IMPORTANCE OF BRANDING.
 The company selling the product is known;
 Consumers are confident of a certain level of quality;
 Product identification is easier;
 A quality brand may command a higher price;
 A brand image can be created through advertising;
 Segments can be targeted by a company with different brands;
 Many feel less risk in buying brand-name products;
 Retailers prefer to stock well-known, top-selling brands;
 A brand may be added to new products.

PACKAGING Distinctive or unique packaging is one method of differentiating a relatively homogeneous

product.

THE BASIC FUNCTIONS OF PACKAGING:

 Containment and protection of the product;
 Communication of the image, ingredients and direction;
 The ability for use and re-storing of the product;
 Convenient for channel members to stock and display;
 To provide a promotional tool.

Pricing policies and practices may be defined as the set of standard procedures used by a firm to set its
wholesale or retail prices for its products or services.
Factors That Influence Pricing Decisions
 Demand Influences on Pricing Decisions - Demand Influences on pricing decisions concern primary the
nature of the target market and expected reactions of consumers to a given price or change in price.
There are three primary considerations here, demographic factors, psychological factors, and price
elasticity.
- Demographic factors – Number, Location and economic strength of potential buyers
- Psychological Factors – How much will potential buyers be willing to pay, will they relate price and
quality
- Price Elasticity - Price elasticity is a measure of consumers’ price sensitivity, which is estimated by
dividing relative changes in quantity sold by the relative changes in price: (e=Percent change in
quantity / Percent change in price)

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 Supply Influences on Pricing Decisions

Supply influences on pricing decisions can be discussed in terms of three basic factors. These factors relate
to the objectives, costs, and nature of the product.
- Pricing Objectives
Pricing objectives should be derived from overall marketing objectives, which in turn should be derived from
corporate objectives. Since it is traditionally assumed that business firms operate to maximize profits in the
long run, it is often thought that the basic pricing objective is solely concerned with long-run profits.
Research has found that the most common pricing objectives are (1) pricing to achieve a target return on
investment, (2) stabilization of price and margin, (3) pricing to achieve a target market share, and (4) pricing
to meet or prevent competition.
- Cost Considerations in Pricing
The price of a product usually must cover costs of production, promotion, and distribution, plus a profit, for
the offering to be of value to the firm.
There are at least three basic variations: markup pricing, cost-plus pricing, and rate-of-return pricing.
1. Markup pricing is commonly used in retailing: A percentage is added to the retailer's invoice
price to determine the final selling price.
2. cost-plus pricing, in which the costs of producing a product or completing a project are totaled
and a profit amount or percentage is added on.
3. Rate-of-return or target pricing is determined by adding a desired rate of return on investment
to the total tally, a break-even analysis is performed for expected production and sales level of
return is added on. For example, suppose a firm estimated production and sales to be 75,000
units at a total cost of N300,000. If the firm desired a before-tax return of 20 percent, the
selling price would be (300,000 + 0.20 )< 300,000) + 75,000 = N4.80 per unit. However, such
approaches have been criticized for two basic reasons. First, cost approaches give little or no
consideration to demand factors. Second, cost approaches fail to reflect competition
adequately.
- Product Considerations in Pricing
Although numerous product characteristics can affect pricing, three of the most important;
1. Perishability Some products, such as fresh meat, bakery goods, and some raw materials are physically
perishable and must be priced to sell before they spoil. Typically, this involves discounting the products
as they approach being no longer fit for sale. Products can also be perishable in the sense that demand
for them is confined to a specific time period. For example, high fashion and fad products lose most of
their value when they go out of style and marketers have the difficult task of forecasting demand at
specific prices and judging the time period of customer interest.
2. Distinctiveness -Marketers try to distinguish their products from those of competitors and if successful,
can often charge higher prices for them. While such things as styling, features, ingredients, and service
can be used to try to make a product distinctive, competitors can copy such physical changes
3. Life Cycle The stage of the life cycle that a product is in can have important pricing implications. With
regard to the life cycle, two approaches to pricing are skimming and penetration price policies. A
skimming policy is one in which the seller charges a relatively high price on a new product. Generally, this
policy is used when the firm has a temporary monopoly and when demand for the product is price
inelastic. In later stages of the life cycle, as competition moves in and other market factors change, the
price may then be lowered. Flat screen TV's and cell phones are examples of this. A penetration policy is
one in which the seller charges a relatively low price on a new product. Generally, this policy is used
when the firm expects competition to move in rapidly and when demand for the product is, at least in
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the short run, price elastic.

 Environmental Influences on Pricing Decisions

Environmental influences on pricing include variables that the marketing manager cannot control. Two of
the most important of these are competition and government regulation.
- Competition factors help determine whether the firm's selling price should be at, below, or above
competition. Pricing a product at competition (i.e., the average price charged by the industry) is
called going-rate pricing and is popular for homogeneous products, since this approach represents
the collective wisdom of the industry and is not disruptive of industry harmony. An example of
pricing below competition can be found in sealed-bid pricing, in which the firm is bidding directly
against competition for project contracts. Although cost and profits are initially calculated, the firm
attempts to bid below competitors to obtain the job contract. A firm may price above competition
because it has a superior product or because the firm is the price leader in the industry.
- Government Regulations - Prices of certain goods and services are regulated by state and federal
governments.

Pricing Strategies
There are several strategies that are available to marketing managers which he may to arrive at a price that
reflects market realities, costs, consumer perceptions, and other considerations. According to Zikmund and
d’Amico (2002), pricing strategies may be broadly categorized under five headings:

1. Differential pricing strategies

2. Competitive pricing strategies
3. Product-line pricing strategies
4. Psychological and image pricing strategies
5. Distribution-based pricing strategies

 Differential Pricing Strategy; A differential pricing strategy is used by an organization that sells the
same product to different buyers at different prices. The type of industry strongly influences
whether an organization uses differential pricing strategy.
- One-price policy versus variable pricing
Determining whether to maintain a fixed price for all customers or to vary the prices from buyer to
buyer is a basic pricing decision. Holding the price, the same for all buyers is termed a one-price
strategy (or a one-price policy, if it is routinely used for all pricing decisions).
In Nigeria, most retailers follow a one-price policy. Whether a billionaire or a child with only N50.00
enters the same store, the price is the same. Some marketers defend this strategy on the grounds that
it is fair and democratic not to charge prices that might favor one customer over another. A one-price
policy provides the advantage of simplicity of administration, which leads, in turn, to lower personnel
expenses. This is the main reason most retailers use it. Sales people and clerks need not debate the
price of a loaf of bread or a yard of cloth with each customer.
Variable pricing appears to be the most popular differential pricing strategy, in variable pricing,
marketers allow customers to negotiate in an attempt to secure a favorable price. In the Nigeria, car
and real estate purchases often present such an opportunity. Internet auctions and reverse auctions on
the Internet are a new form of variable pricing.
- Second-market discounting - Second-market discounting is a differential pricing strategy designed to
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sell a brand at one price in the core target market and at a reduced price in a secondary market
segment.
- Skimming - In skimming, the practice is to price high and systematically reducing price over time.
- Periodic Discounting - uses price reductions that are predictable over time. Systematically as time
elapses.
- Random discounting - The random discounting pricing strategy involves lowering the Price of a
product occasionally and randomly to entice new customers

 Competitive Pricing Strategies

Competitive pricing strategies are used by organizations that have competitive pricing objectives. Dominant
firms may use pricing to exploit their positions. Weak firms may opt for the role of follower.
- Meeting the competition
Organizations concerned with meeting competition quite naturally set prices at levels equal to those of
competitors—the going rate.
- Undercutting the competition
An undercutting-the-competition strategy emphasizes offering the lowest price among available choices.
- Price Leadership and followers
Price leadership strategies are generally implemented by organizations that have large shares of the market
and of the production capacity in their industries. Such organizations have enough market information and
enough control over their distribution systems to determine a price level that others will follow.
- Penetration pricing
A penetration price is a low introductory price. In the short run, it may even result in a loss. A penetration
pricing strategy is implemented when a competitive situation is well established (or soon will be) and a low
price in the introductory stage of the product life cycle will be necessary to break into the market.
Penetration pricing is likely to be the most effective and desirable approach under one or more of the
following conditions:
1. When demand for the product is very sensitive to price (elastic demand)
2. When it is possible to achieve substantial economies in the unit cost of manufacturing and/or distributing
the product by operating at high volume (Economies of scale)
3. When a brand faces threats of strong competitive imitation soon after introduction (Strong competitive
threat)
4. When market segments do not appear to be meaningful and there is mass market acceptance of the
product (mass market acceptance)
5. When acquiring a customer leads to a relationship and additional purchases (customer acquisition and
retention)
- Traditional pricing
Certain prices are set largely by tradition rather than by individual marketers. These customary prices may
remain unchanged for long periods.
- Inflationary Pricing - Organizations may react to inflation by changing the size or amount of the
product sold.

 Product-Line Pricing Strategies

Many pricing strategists consider the product line, rather than individual product items to be the
appropriate unit of analysis. The objective of product-line pricing is to maximize profits for the total product
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line rather than to obtain the greatest profits for any individual item in the line.
- Captive pricing - In a captive pricing strategy, the basic product is priced low, often below cost, but the
high markup on supplies required to operate the basic product makes up for that low price.
- Leader Pricing and Bait Pricing
Leader pricing is when the product that is priced at a loss so as to attract customers, who may then buy
other goods or services.
Bait pricing involves attracting customers by advertising low-priced models of, but the marketer's
expectation is to trade the customer up to a higher-margin model that is also available for sale.
The term bait and switch, however, is used when the merchant has no intention of selling the bait
merchandise but only intends to convince the customer to buy more expensive goods.
- Price lining - A marketer using a price-lining strategy prices the products in a product line according to
a number of "price points." Price points are simply specific prices. A marketer selling a full product line
establishes certain price points to differentiate the items in the line.
- Price bundling and multiple-unit pricing - With a price-bundling strategy, a group of products is sold as
a bundle at a price lower than the total of the individual prices. The bargain price for the "extras"
provides an incentive for the consumer. Selling a car with an "options package" is an example of a
price-bundling strategy.

 Psychological and Image Pricing Strategies

Like any other stimulus, a price may be selectively perceived by consumers. Consumers may infer something
about a brand's value or image from its price.
- Reference pricing - Retailers often use a reference pricing strategy, in which they choose a moderate price
for a version of a product that will be displayed next to a higher-priced model of the same brand or a
competitive brand.
- Odd versus even pricing - The use of odd prices is based on the belief that, for example, a price of N1.95 is
seen by consumers as only a kobo plus some small change. Advocates of odd pricing assume that more sales
will be made at certain prices than at prices just one or two cents higher.
- Prestige pricing - For many products, consumers use price to infer quality, especially when it is difficult to
determine quality by inspection.

 Distribution-Based Pricing Strategies

Many prices are based on the geographic distance separating the buyer from the point of sale or production.
- F.O.B. - A common form of geographic pricing is F.O.B., which stands for either "freight on board" or "free on
board." Usually followed by the name of a location. This place name tells the buyer the point to which the
seller will ship the goods. At that point, the buyer takes title to the goods and becomes responsible for
shipping charges.
- Delivered pricing - When a department store advertises that the price of a bed is "N15,000 delivered in our
area," that store is practicing delivered pricing, or freight-allowed pricing. The delivery charges are built into
the price paid by the consumer.
- Basing-point pricing - Another distribution-based pricing system involves the selection of one or more
locations to serve as basing points. Customers are charged prices.
Marketing communications are the means by which firms attempt to inform, persuade, and remind
customers, directly or indirectly, about the products and brands that they sell.

STRATEGIC GOALS OF MARKETING COMMUNICATIONS

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1) Create Awareness - An important strategic goal must be to generate awareness of the firm as well
as its products. Marketing communications designed to create awareness are especially important for new
products and brands in order to stimulate trial purchases. As an organization expands, creating awareness
must be a critical goal of marketing communications.
2) Build Positive Images - When products or brands have distinct images in the minds of customers,
the customers better understand the value of what is being offered. Positive images can even create value
for customers by adding meaning to products. Retail stores and other organizations also use
communications to build positive images. A major way marketers create positive and distinct images is
through marketing communications.
3) Identify Prospects - Identifying prospects is becoming an increasingly important goal of marketing
communications because modern technology makes information gathering much more practical, even in
large consumer markets. Marketers can maintain records of consumers who have expressed an interest in a
product, then more efficiently direct future communications. Technology now enables marketers to stay
very close to their customers. Websites are used to gather information about prospects, and supermarkets
use point-of-sale terminals to dispense coupons selected on the bases of a customer’s past purchases.
4) Build Channel Relationships - An important goal of marketing communications is to build a
relationship with the organization’s channel members. When producers use marketing communications to
generate awareness, they are also helping the retailers who carry the product. Producers may also arrange
with retailers to distribute coupons, set up special displays, or hold promotional displays in their stores, all of
which benefit retailers and wholesalers. Retailers support manufacturers when they feature brands in their
advertisements to attract buyers. All members of the channel benefit because of such efforts. Cooperating in
these marketing communication efforts can build stronger channel relationships.
5) Retain Customers - Loyal customers are a major asset for every business. It costs far more to attract
a new customer than to retain an existing one. Marketing communications can support efforts to create
value for existing customers. Interactive modes of communication – including salespeople and websites –
can play an important role in retaining customers. They can serve as sources of information about product
usage and new products being developed. They can also gather information from customers about what
they value, as well as their experiences using the products. This two-way communication can assist
marketers in increasing the value of what they offer to existing customers, which will influence retention.

MARKETING COMMUNICATIONS MIX

The marketing communications mix concept refers to the combination and types of non-personal and
personal communication the organization puts forth during a specified period.
 Advertising – Any paid form of non-personal presentation and promotion ideas, goods, or services by an
identified sponsor. E.g. Brochures, company vehicles, leaflets, logos
 Sales promotion – A variety of short-term incentives to encourage trial or purchase of a product or service.
E.g. Contests, coupons, demonstrations, exhibits
 Public relations and publicity – A variety of programs designed to promote or protect a company’s image
or its individual products. E.g. Annual reports, community relations, company magazines

 Direct marketing – Use of mail, telephone, fax, e-mail, or internet to communicate directly with or solicit
response or dialogue from specific customers and prospects. E.g. Bill inserts, catalogues, direct mail, e-mail
 Personal selling – Face-to-face interaction with one or more prospective purchasers for the purpose of
making presentations, answering questions and procuring orders. E.g. Fairs, incentive programmes,
presentations
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 Events and experiences – Company-sponsored activities and programs designed to create daily or special
brand-related interactions. (Except on Peter and Donnelly (2011) list)

Factors to consider when devising a marketing mix

 the role of promotion in the overall marketing mix;
 the nature of the product, and
 the nature of the market.

ADVERTISING
Advertising is paid form of non-personal communications about an organization, its products, or its activities
that is transmitted through a mass medium to a target audience. The mass medium might be television,
radio, newspapers, internet, magazines, outdoor displays, car cards. Characteristics of adverts-
 Pervasiveness – Advertising permits the seller to repeat a message many times.
 Amplified expressiveness – Advertising provides opportunities for dramatizing the company and its
products through the artful use of print, sound, and colour.
 Impersonality – The audience does not feel obligated to pay attention or respond to advertising.
Objectives for advertising can be assigned that focus on creating awareness, aiding comprehension,
developing conviction, and encouraging ordering.

In the long run and often in the short run, advertising is justified on the bases of the revenue it produces.
Revenue in this case may refer to either sales or profits. Economic theory assumes that firms are profit
maximizers, and the advertising outlays should be increased in every market and medium up to the point
where the additional cost of gaining more business equals the incremental profits.

SALES PROMOTION
Sales promotion consists of a collection of incentive tools, mostly short-term, designed to stimulate quicker
or greater purchase of particular products or services by consumers or the trade. Whereas advertising offers
a reason to buy, sales promotion offers an incentive to buy. Sales promotion includes tools for:
 Consumer promotion – samples, coupons, cash refund offers, prices off, premiums, prizes, patronage
rewards, free trial, warranties, cross-promotions, point-of-purchase displays, and demonstrations;
 Trade promotion – prices off, advertising and display allowances, and free goods; and
 Business and sales-force promotions – trade shows and conventions, contests for sales representatives,
and specialty advertising.

Thus, companies use sales promotion tools to draw a stronger and quicker buyer response. Sales promotion
can be used for short-run effects such as to highlight product offers and boost sagging sales. Sales promotion
tools offer three distinctive benefits:
 Communication – They gain attention and may lead the consumer to the product.
 Incentive – They incorporate some concession, inducement, or contribution that gives value to the
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consumer
 Invitation – They include a distinctive invitation to engage in the transaction now.

PUBLIC RELATIONS AND PUBLICITY

Public relations and publicity refers to a variety of programs designed to promote or protect a company’s
image or its individual products. Doyle (2011) defined public relations (PR) as “those activities that the
organization undertakes to communicate to its public that are not paid for directly”.
Most companies have a public relations department or retain a specialist independent PR firm, that monitors
the attitudes of the organization’s publics and distributes information and communications to build goodwill.
Not only must the company relate constructively to customers, suppliers, and dealers, it must also relate to a
large number of interested publics. The best PR departments spend time counselling top management to
adopt positive programs and to eliminate questionable practices so that negative publicity does not arise in
the first place. They perform the following functions:
 Press relations – Presenting news and information about the organization in the most positive light.
 Product publicity – Sponsoring efforts to publicize specific products.
 Corporate communications – Promoting understanding of the organization through internal and external
communications.
 Counselling – Advising management about public issues and company positions and image during good
times and bad.

The Appeals of public relations and publicity

 High credibility – News stories and features are more authentic and credible to readers than
adverts.
 Ability to catch buyers off guard – Public relations can reach prospects that prefer to avoid
salespeople and advertisements.
 Dramatization - Public relations has the potential for dramatizing a company or product.

PERSONAL SELLING
Personal selling refers to face-to-face interaction with one or more prospective purchasers for the purpose
of making presentations, answering questions, and procuring orders.
The importance of personal selling function depends partially on the nature of the product. As a general rule,
goods that are new and different, technically complex, or expensive require more selling effort. Insurance,
for example, is a complex and technical product that often needs significant amounts of personal selling.
In summary, personal selling fulfils two essential duties (in addition to the core sales task itself):
 The salesperson dispenses knowledge to buyers – lacking relevant information, customers are likely to
make poor buying decisions.
 Salespeople act as a source of marketing intelligence for management.

Qualities of personal selling

 Personal interaction - Personal selling involves an immediate and interactive relationship between two or
more persons. Each party is able to observe the other’s reactions.
 Cultivation - Personal selling permits all kinds of relationships to spring up, ranging from a matter-of-fact
selling relationship to a deep personal relationship.
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 Response - Personal selling makes the buyer feel under some obligation for having listened to the sales
talk.

INTEGRATED MARKETING COMMUNICATIONS

Integrated marketing communications (IMC) is a concept of marketing communications planning that
recognizes the added value of a comprehensive plan. Such a plan evaluates the strategic roles of a variety of
communications disciplines – for example, general advertising, direct response, sales promotion and public
relations – and combines these disciplines to provide clarity, consistency, and maximum impact through the
seamless integration of messages.

IMC is the use of coordinated messages and media on regular bases to consumers. The messages are
consistent and clear in all the channels of communication. Databases are used to keep in touch with
consumers. Repeat sales, customer attitudes and related purchases are some of the tools used to measure
the effectiveness of IMC. Thus, IMC is the integrating and coordinating of a company’s communications, so
that the message delivered is consistent and clear in all channels used. These channels include:
 Advertising
 Direct marketing
 Public Relations
 Personal Selling
 Sales Promotion

The advocates of integrated marketing communications tend to agree on the following:

 There needs to be a consistent message in all communication vehicles;
 Product design and packaging are integrated in the IMC plan;
 Primary consumer research is key for targeting the right audience and message;
 A customer database can also be used to target.

FACTORS IN SETTING THE MARKETING COMMUNICATIONS MIX

 The company’s objectives and resources. If the company’s objective is to increase awareness in the
mass market, then advertising is the obvious medium. On the other hand, if it wants an immediate boost to
sales, promotion is relatively attractive. Resources available also influence the choice.
 Characteristics of the target market. If the target market consists of hundreds of customers, direct
selling will be an attractive vehicle. If the market consists of millions, then mass media will be more efficient.
 Type of product and market. In general, personal selling is the most effective vehicle for products that
are expensive, complex and high risk, and for markets with few, large buyers. For products that are cheaper
and routine and where emotions play an important role in the choice process and for large markets,
advertising and sales promotion are more important.
 Push versus pull strategy. A major factor affecting the choice is whether the manufacturer is pursuing a
push or a pull strategy. A pull strategy focuses promotional activities (mainly advertising and consumer
promotion) at the end customers with the aim of getting them to induce the retailer or other intermediary
to stock the product. Advertising and promotion encourage customers to pull the product through the
distribution chain by creating the demand. A push strategy directs promotion (mainly sales force and trade
promotions) at retailers and the trade with the aim of incentivizing them to carry the product and in turn
promote it to consumers.
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 Stage of market evolution. At the early stage of the market, advertising and public relations are usually
the most appropriate tools to build awareness of the new product. In the mature phase, sales promotion
and personal selling become relatively more important. In the decline stage, advertising, PR, and direct
selling are cut back as there is little to say about the product. Then sales promotion becomes more
important for stimulating the trade and customers.

Sales forecasting is a projection of achievable sales revenue, based on historical sales data, analysis of market
surveys, trends and salespersons’ estimates.
LEVELS OF SALES FORECASTING - There are three levels of forecasting which are discussed below:
 Market potential; this refers to the upper limit of industry demand, or the expected sales volume for all
brands of a particular product type during a given period. Market potential is usually defined for a given
geographical area or market segment under certain assumed business conditions. It reflects the market's
ability to absorb a type of product.
 Sales potential; this is an estimate of an individual company's maximum share of the market, or the
company's maximum sales volume for a particular product during a given period. Sales potential reflects
what demand would be if the company undertook the maximum sales- generating activities possible in a
given period under certain business conditions.
 The sales forecast, or expected actual sales volume, is usually lower than sales Potential because the
organization is constrained by resources or because management emphasizes the highest profits rather than
the largest sales volume.
Forecasters often assume the upcoming time period will be like the past. However, marketing is carried on in a
dynamic environment an effective forecaster recognizes that a forecast will be accurate only if the assumptions
behind it are accurate. Therefore, organizations often create three versions of each forecast: one based on
optimistic assumptions, one based on pessimistic assumptions, and one based on conditions thought to be
"most likely".

FORECASTING OPTIONS
Surveys of Executive Opinion; Top-level executives with years of experience in an industry are generally well
informed. Surveying executives to obtain estimates of market potential, sales potential, or the direction of
demand may be a convenient and inexpensive way to forecast.
Analysis of Sales Force Composite; asking sales representatives to project their own sales for the upcoming
period and then combining all these projections is the sales force composite method of forecasting. The logic
underlying this technique is that the sales representative is the person most familiar with the local market
area, especially the activity of competitors, and therefore is in the best position to predict local behavior.
Surveys of Customer Expectations; Surveying customer expectations simply involves asking customers if
they intend to purchase a service or how many units of a product they intend to buy.
Projection of Trends; Identifying trends and extrapolating past performance into the future is a relatively
uncomplicated quantitative forecasting technique. Time series data are identified and even plotted on a
graph, and the historical pattern is projected onto the upcoming period. However, if environmental change
is radical or if new competitors are entering the market, blindly projecting trends may not be useful and may
even be detrimental.
Analysis of market factors; The market factor method of forecasting is used when there is an association
between sales and another variable, called a market factor. Market index, Correlation methods and
regression methods are mathematical techniques that may be used to identify the degree of association
between sales and a market factor.
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FACTORS THAT DETERMINE GOOD SALES FORECASTING

1. Good sales strategy; A good sales strategy is essential for a sales forecasting in that it takes into
account the outcomes that need to occur in order to be successful in business. A good strategy may
include a SWOT analysis, or a clear understanding of the customer criteria for decision and how one
can rank against the criteria, but most importantly, it will direct the tactics and help to determine the
logical series of next steps.
2. Understanding buyers’ behaviour: Too many forecasts are simply lists or histories of what the seller
has done without taking into consideration what the buyer is doing. The sales process, however, only
moves forward when the buyer takes action, so it is incumbent on the sales organization to get clear
on how the buyer is making decision.
3. Continuous improvement: A forecast is a snapshot not a movie. At any given time, there is the need
to remember that if done well, forecasting represents a movement in time, and since the
environment is constantly changing, forecasts need to be continually refined.

Job Characteristic Model

The Hackman and Oldham’s Job Characteristic model explains five important job factors which would explain
about the job
a) Skill variety: Skill variety refers to the usage of different skills which the job requires.
b) Task identity: Task identity refers to the completion of a whole and identifiable piece of work.
c) Task Significance: Task significance is about understanding the impact of an employee work on the lives
or work of other employees or the organization.
d) Autonomy - Autonomy in this unit refers to the freedom which an employee can have at the work place.
e) Feedback - Feedback is the information that is conveyed to the employee about his/her performance in
the job. Job Analysis and Design

Job analysis is the process of critically evaluating the operations, duties and responsibilities of the job”,
Job design is the effort to integrate the work content (tasks, functions, relationships), the rewards (extrinsic
and intrinsic), and the qualifications required (skills, knowledge, abilities) for each job in a way that meets
the needs of employees and the organizations”.

Steps for job design:

Aswathappa (2005) defined three steps that involves in job design. They are: -

1) The specification of individual tasks

2) The specification of method(s) of performing each task
3) The combination of tasks into specific jobs to be assigned to individuals

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The Recruitment Process:

a) Internal Sources: Identifying employees within the company who can take care of job. Here the
employees from various departments may shift into the department where the vacancies are available or a
promotion will be given within the same department and fill the vacancy.
b) External Sources: Here the candidates will be selected from outside the company i.e. who are not
currently working with the organization. Companies might advertise in newspapers, job portals, magazines
etc. to attract the talent available.

The Selection Process:

A typical selection process which is explained by the following diagram: -

Two basic ways in which the interview can take place are: -
a) In a comfortable mode, where the recruiter would bring the atmosphere to the comfort level of the
candidate and then start observing the behaviour of the candidate.
b) In a stressed mode, where the recruiter would put the candidate under a lot of stress by asking a lot of
questions and then observe the candidate’s reactions.

Sales Training Process

Let us understand the typical sales training process as explained by Ingram (2009): -

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PUBLIC RELATIONS is a broad set of communication efforts used to create and maintain favorable
relationships between an organization and its stakeholders.

TOOLS OF PUBLIC RELATIONS

Public relations professionals prepare written materials, such as brochures, newsletters, company
magazines, news releases, websites, blogs, and annual reports that reach and influence their various
stakeholders.
Public relations personnel also create corporate identity materials, such as logos, business cards, stationery,
and signs, which make firms immediately recognizable.
Another form is news release, sometimes called a press release, which is usually a single page of type
written copy containing fewer than 300 words and describing a company event or product. A news release
gives the firm’s or agency’s names, address, phone number, and contact person.
A featured article is a manuscript of up to 3,000 words prepared for a specific publication. A captioned
photograph is a photograph with a brief description explaining the picture’s content. Captioned photographs
are effective for illustrating new or improved products with highly visible features.
A press conference is a meeting called to announce major news events.

EVALUATING PUBLIC RELATIONS EFFECTIVENESS

Environmental monitoring identifies changes in public opinion affecting an organization.
A public relations audit is used to assess an organization’s image among the public or to evaluate the effect
of a specific public relations program.
A communications audit may include a content analysis of messages, a readability study, or a readership
survey.
A social audit measures the extent to which stakeholders view an organization as being socially responsible.

UNFAVORABLE PUBLIC RELATIONS

Companies have to deal with unexpected and unfavorable publicity resulting from an unsafe product, an
accident, controversial actions of employees, or some other negative event or situation. Today’s mass
media, including online services and the Internet, disseminate information faster than ever before, and bad
news generally receives considerable media attention.
To protect its image, an organization needs to prevent unfavorable public relations or at least lessen its
effect if it occurs. First and foremost, the organization should try to prevent negative incidents and events
through safety programs, inspections, and effective quality-control procedures. Experts insist that sending
consistent brand messages and images throughout all communications at all times can help a brand
maintain its strength even during a crisis. However, because negative events can befall even the most
cautious firms, an organization should have predetermined plans in place to handle them when they do
occur. Firms need to establish policies and procedures for reducing the adverse impact of news coverage of
a crisis or controversy.

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