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Chapter6:marketing

Marketing
Marketingistheprocessofdevelopingaproductandimplementingaseriesofstrategiesaimedatcorrectlypromoting,
pricinganddistributingtheproducttoacoregroupofcustomers.
Thepurposeofthisistodeterminewhatthebusinessshouldbeproducing.
Marketingisusedprimarilybyabusinessasamethodofenhancingitsrevenuestreamsandincreasingthemarkets
awarenessofitsproducts.

Thestrategicroleofmarketing
Thestrategicroleofmarketingextendsalsotosocietywhichincludes:
o ChoiceBusinessesdifferentiatethemselvesfromtheircompetitorsthroughprice,productqualityandfeatures
andservice.Alltheseprovideconsumerswithgreaterchoicewhenpurchasingaproduct.

o StandardoflivingBusinesseswilloftendevelopandmarketproductsthatimproveandenhancestandardof
living.Toprovideconsumerswithbetterproducts.

o EmploymentToprovideaproducttoconsumers,businessesmustemploylabourtoassistintransforminginput
resourcesintofinishedproducts.Labourisalsorequiredtosellthesegoodsandservices.

o BrandawarenessBrandawarenessreferstotheextentthatcustomersareawareofaproduct/brandandits
features.Itisachievedthroughstrongandeffectivemarketingcampaigns.

Allofthisisdonetoincreasethemarketshare.Marketsharereferstothepercentageoftotalsalesabusinesshas
comparedwithitscompetitorsinaparticularmarket.Itincreasesthebusinessssalesandprofitability.

Interdependencewithotherkeyfunctions
Eachkeybusinessfunctionmustworkeffectivelywithotherfunctionstoensurethegoalsofthebusinessareachieved.
Operationrelateswithmarketingasitneedsthedatafrommarketingtoknowwhattoproduce
Humanresourcesrelateswithmarketingasstaffmustbemotivatedandskilledtodevelopproducts.Itisthroughthe
marketingprocessthatabusinessisabletodeterminetheskillsneeded.
Accountingandfinancerelateswithmarketingasthebusinessneedstoseehowmuchmoneyitcanputintomarketing.

Approachestomarketing
Marketingisaimedatincreasingproductawarenessandsales.Therearethreecoreapproachestomarketing:
o Productionapproach(19201930s)Reliesontheviewthatconsumersbasetheirpurchasingdecisionsonthe
qualityoftheproduct.

o SellingapproachBasedonthebeliefthatabusinesswillbesuccessfulinsellingaproductifitisabletopromote
thebenefitsoftheproducttoitstargetmarket.Itdoesnotlistentothetargetmarket.

o MarketingapproachThebasisofwhichisthatthecustomerisatthecoreofallbusinessactivities.Itinvolves
adoptingacustomerorientationwiththebeliefthatallactionsinthebusinessshouldbeaimedatsatisfyingthe
needsofthecustomer

Typeofmarkets
Theproductionandsaleofgoodsandservicesisnotrestrictedortargetedsolelytocustomers.
Someorganisationssimplybuyafinishedgoodfromamanufacturertoselltoconsumers.
Thereisadiverserangeofmarketsthatdemandgoodsandservices.Thetypeofmarketsthatdontselltocustomerare:
o Resourcemarketsthosemarketswheretheproductionandsaleofrawmaterialsoccurs.ExamplesareBHP
BillitonandRioTinto.

o Industrialmarketswheregoodsthatareusedassuppliesintheproductionprocessaretraded.E.g.construction,

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agriculture,mining,manufacturing.

o Intermediatemarketscommonlyreferredtoaswholesalers.Theysellproductstoretailbusinessesthathave
beenproducedbyotherorganizations.E.g.ArmstrongElectricalWholesalers.

Consumermarkets
Consumermarketsconsistofthefollowingmarkets:
Massmarkets:Wheretheproductsareaimedatallconsumersirrespectiveoftheirage,gender,residentiallocationor
income.Theseapplytogoodsandservicesthatappealtoalltypesofconsumers.Electricity,waterandpostalservicesare
examples.

Marketsegments:whereabusinesschoosestofocusononlyoneareaofparticularmarket.E.g.Womenaged2050years
old.

Nichemarkets:asmallersectionofamarketsegment.E.g.luxurycars,luxurywatchesandfashion

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Chapter7:influencesonmarketing

Factorsinfluencingconsumerchoice
Therearefourmainfactorsthatinfluenceconsumerandorganisationalpurchasingdecisions.
PsychologicalInfluencesPsychologicalfactorsarepersonalcharacteristicsofanindividualthataffecthisorherbuying
behavior.Theyinclude:
Perceptionistheprocessthroughwhichpeopleselect,organiseandinterpretinformationtocreatemeaning.
Individualsactonperceptionsofrealityratherthanrealityitselfthusmarketingmanagersmustcreatea
positiveperceptioninthemindofthecustomerthroughcertainimagessuchastrendyandclassy.
AttitudesAnattitudeisapersonsoverallfeelingaboutanobjectoractivity.Itgenerallyinfluencesthe
successorfailureofabusinesssmarketingstrategy.
LifestyleDifferentlifestylesattractdifferenttypesofproductsandservices.
PersonalityandselfconceptThewayweviewourselvesandthewaywerespondtootherpeoples
perceptionofus.Peoplethatdonotcareaboutluxury,willnotbuyRolexwatches.

SocioculturalInfluencesareforcesexertedbyotherpeopleandgroupsthataffectanindividualsbuyingbehaviour.
FamilyandRolesEveryoneoccupiesdifferentrolesinwithinthefamilyandgroupswithinthewider
community.Forexample:menaremorelikelytobeseenpurchasingtoolsandcarswhereaswomenpurchase
healthcareandlaundryproducts.However,rolesarechangingandmarketersarebeginningtounderstand
thataswell.
Reference(Peer)GroupsAreferenceorpeergroupisagroupofpeoplewithwhomapersonclosely
identifies,adoptingtheirattitudes,valuesandbeliefs.E.g.ifafriendtellsyouthattheyhadabadexperience
atacertainstore,youwillmostprobablyalteryourbuyingbehaviour.

EconomicInfluenceshaveanenormousimpactonthebuyingbehaviourofbusinessesandcustomers.Thelevelof
economicactivityfluctuatesanditsfourdistinctphasesinfluencesthemarketingenvironment.
Boomisaperiodoflowunemploymentandhigheconomicgrowthwhichleadtohigherincomes.Thisisthe
phasewherebusinessesandconsumersareoptimisticaboutthefuture.Customersarewillingtospendand
businessesattempttoincreasetheirmarketsharebypromotingheavily.Thepotentialmarketingduringthis
phaseisusuallylargewithmoresales.
Contractionisaperiodofhighunemployment,sloweconomicgrowthandstabilisingincomes.Customers
andbusinessesbecomepessimisticandreducetheirspendingandinvestment.Marketingplansduringthis
phasestressthevalueandusabilityoftheproduct.
Recessionseesunemploymentreachhighlevelsandincomesfalldramatically.Thereisalackofconfidence
intheeconomyandaverysmalllevelofspending.Marketingduringthistimeshouldconcentrateon
maintainingexistingmarketshare.

GovernmentInfluencesandpoliciesdirectly/indirectlyinfluencebusinessactivityandcustomersspendinghabits,andas
such,willinfluencethemarketingplan.
o Interestratesaresignificantindeterminingthelevelofexpenditureintheeconomyandthelevelofcreditthat
consumersandbusinesswillaccess.
o Itdoesthisthroughitsuseoffiscalandmonetarypolicies,microeconomicreformandagerestrictionsplacedon
thepurchaseofspecificproducts.

Consumerlaws
Roleofconsumerlaws
TheCommonwealthGovernmentcontrolsbusinessbehaviourthroughtheCompetitionandConsumerAct2010(Cth).This
legislationattemptstopromotefairandcompetitivebehaviourinthemarketplace.

Deceptiveandmisleadingadvertising
Somebusinesswilladvertiseinwaysthatarewrongorunethical.Examplesofdeceptiveandmisleadingadvertisingunder
theCompetitionandConsumerActinclude:
o overstatingthebenefitsthatproductsprovide
o offeringdiscountsandspecialoffersthatdontexist

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o usingbaitandswitchadvertisingpromotesaproductthatisheavilydiscountedeventhoughthebusinesshasvery
limitedsupplies
Pricediscrimination
Pricediscriminationreferstotheprocessofabusinessgivingpreferencetosomeretailstoresbyprovidingthemwithstock
atlowerpricesthanisofferedtothecompetitorsofthoseretailers.
Thecompetitorsarebeingdiscriminatedagainstbybeingforcedtopayahigherpriceforaproductthatisidentical.

Impliedconditionsandwarranties
Impliedconditionsortermsareunspokenandunwrittentermsinacontract.Thetwomostimportanttermsare:
Merchantablequalitymeansthattheproductisofastandardareasonablepersonwouldexpectforthe
price.
Fitnessofpurposemeansthattheproductissuitableforthepurposeforwhichitisbeingsold.
Awarrantyisapromisebythebusinesstorepairorreplacefaultyproducts.Allbusinesseshavecertainobligationswith
regardtotheproductstheysell.
Regardlessofwhethertheproductiscarryingawarranty,abusinessmust,bylaw,eitherrefundaclientsmoneyorofferan
exchangeofthegoodshouldthegoodberecognizedtohavebeenfaultyatthetimeofleavingthestore.Thisiswhyall
productsaresaidtohaveanimpliedwarranty.

Resalepricemaintenance
UndertheCompetitionandConsumerAct,amanufacturercannotrefusetosellgoodstoaretailerwhodecidesnottosell
thegoodatthepricethatissuggestedbythemanufacturer.

Amanufacturercannotdiscriminateagainststoresforsellingatapricethatislowerthanithasrecommended.

Ethicalandlegalaspectsofmarketing
Ethicsinmarketingreferstoacombinationofbroadprinciplesthatestablishstandardsofbehaviourandguidelinesfor
peopleworkingacrossthemarketingindustry.
Theyarenotenforceablethroughlaw.

Truth,accuracyandgoodtasteinadvertising
Itisexpectedthatwhenpromotionalmaterialisdistributed,thismaterialrepresentsinformationthatistruthful,accurate
andingoodtaste.
TheCompetitionandConsumerActprohibitsacorporationfromsupplyingconsumergoodsthatdonotcomplywith
prescribedproductsafetystandards.
TheAdvertisingFederationofAustralia(AFA)isthepeakbodyrepresentingcompaniesinadvertisingandmarketing
communications.Itseekstopromotethebestpracticesinadvertising.
Usingsomewhatcontroversialadvertisementstopromotesocialissues,whileatthatthesametimesellingitsbrandname.

Productsthatmaydamagehealth
Productsandservicesthatdamagepeopleshealthareregardedassinproducts,sothegovernmentputsrestrictions.
Theyinclude:
o restrictionsontobaccosponsorshipentriesintocasinos
o RestrictedopeninghoursforleaguesandRSLclubsforgambling
o Packetscontainhealthwarningsforcigarettes

Engaginginfaircompetition
TheroleoftheAustralianCompetitionandConsumerCommissionistoregulatebusinessbehavior.
Unfaircompetitivebehaviorincludes:
o pricefixingbetweentwoormoremajorcompetitors
o longtermlossleaderpricingstrategybyundercuttingsmallercompetitors
o misleadingadvertisingregardingproducts

AustralianCompetitionandConsumerCommission

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TheACCCattemptstoregulatethelevelofcompetitionwithinarangeofindustries.Itaimstopromotefairandethical
behaviourbybusinessestowardstheircompetitorsandallowsbusinessestolodgecomplaintsagainstcompetitors
regardingbehaviourthattheydeemtobeunfairandagainsttheActs.

Sugging
Sellingundertheappearanceofasurveyisasalestechniquedisguisedasmarketresearch.Thistechniqueisnotillegal,
however,itdoesraiseseveralethicalissuesincludinginvasionofprivacyanddeception.

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Chapter8:marketingprocess

Introduction
Planningisacentralactivityofanyorganisation.
Itallowsabusinesstoexamineitscurrentpositionwithinthemarket,consideropportunitiestostrengthenthatposition
anddeterminethemosteffectivemethodofimplementingtherequiredchanges.
Theelementsofamarketingplanare:
o Executivesummary
o Situationalanalysis
o Marketresearch
o Establishingmarketobjectives
o Identifyingthetargetmarket
o Developingmarketingstrategies
o Implementing,monitoringandcontrolling

Theexecutivesummary
Theexecutivesummaryprovidesabriefdescriptionofcurrentissuesfacingthebusiness.Itprovidesanoverviewofthe
goalsandstrategiesthataretobefeaturedintheplan.

Thesituationalanalysis
Thesituationalanalysisprovidesthefirmwithanopportunitytoexamineitscurrentpositionwithinthemarket.Thereare
twokeyelementstoasituationalanalysis.
o SWOT
TheuseoftheSWOTexercise(Strengths,Weaknesses,OpportunitiesandThreats)providesthe
informationneededtocompletethesituationalanalysisandgivesaclearindicationofthebusinesss
positioncomparedwithitscompetitors.
TheStrengthsandWeaknessesofthebusinessareinternalforcesastheyoperateinsidethebusinessand
alargelycontrolledbyit.
Doesthebusinesshaveagoodreputationamongstitsstakeholders?
Isthebusinessfinanciallystable?

OpportunitiesandThreatsaretheexternalforcesastheyoperateoutsidethebusinessandcannotbe
controlledbythebusiness.
Whatisthedegreeofcompetition?
Arecompetitorsreactingtothebusinesssproducts?

o Productlifestyle
Productanalysisexaminesthecurrentpositionofthegoodsand/orservicesthatabusinessproducesin
themarketplace.
thebusinesslifecycledifferentphasesoverthecourseofitsexistence.Therearefourphases,orstages,
tothebusinesslifecycle:
Establishmentwhenthenewproductisfirstlaunched.Profitsarelimitedbecauseofthelackof
revenue.Thebusinessisdevelopingaloyalcustomerbase.Penetrationpolicieswillbeused.
(usingalowpricetoestablishquickentry.

Growthprofitabilitywillgrowassalesexpand,costswillincreaseduringthisstage.Competitors
willcompeteformarketshareandmarketingstrategieswillneedtochange.Businesseslower
theirpricetodealwithcompetitors.

maturitysteadyincomestreamwithlimitedprospects,marketingstrategiesmodifiedto
ensureprofitcontinues.Theytrytodifferentiatethemselvesbypricedifferentiation,aftersales
service,ormakingiteasierforconsumerstoaccesstheproduct.

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postmaturityIncreasedcompetitionandchangingconsumerpreferences.Thereare4paths:
o declinecompetitionandchangesinthebusinessenvironment.Businessbeginsto
declineandlosemarketshare
o renewalproductsrevitalised,newpromotionalcampaigns,brandaltered.New
strategiesmaybedevelopedtoattractanewaudience.
o steadystatenochange,profitsstaythesame
o cessationthebusinessisshutdown.

Marketresearch
Thebusinessshouldknowthetypeofinformationthatitrequirese.g.Customerprofiles,brandawarenessetc.
Onceinformationneedsareestablished,thebusinesscandeterminethemostappropriateresearchmethod.

DataCollection(primaryandsecondary)Marketingdatareferstotheinformation,usuallyexpressedasfactsandfigures,relevant
tothedefinedmarketingproblem.
Primarydataarethefactsandfigurescollectedfromoriginalsourcesforthepurposeofthespecificresearchproblem.This
datacanbecollectedbythebusinessitselfbutitisveryexpensiveandtimeconsumingwhichiswhyitisusually
outsourced.Threetypesare:
o surveypersonalinterviews,questionnairesandtelemarketing,
o observationpersonalandmechanicallookatresearchandsurveillancefootage.E.g.askingquestion
o experimentalfieldteststoevaluatecauseandeffect.E.g.showingafilm
Secondarydataisinformationthathasalreadybeencollectedbysomeotherpersonororganisation.Thetwotypesof
secondarydataare:
o internaldatainformationthathasbeencollectedfrominternalsourcessuchasstatistics,feedbackandreports,
o externaldatapublisheddatafromothersourcessuchasmagazines,internetandtheABS.

DataanalysisandinterpretationStatisticalinterpretationanalysisistheprocessoffocusingonthedatathatrepresents
average,typicalordeviationsfromtypicalpatterns.Businesseswillanalyseandinterpretthecollecteddataso
managementcangainabetterunderstandingoftheimpactofthedataontheoperationsofthebusiness,andthen
determinethecourseofaction

Establishingmarketobjectives
BusinessesgenerallyadoptaSMARTapproachtosettingobjectives:
o S=specifictheobjectiveneedstobeclear
o M=measurablethebusinessneedstofindwaystomeasuresuccess
o A=achievablethebusinessneedstohavethefinancialandhumanresources
o R=realistictheobjectiveshouldbereasonable
o T=timethetimeframemustbereasonable

Marketingobjectivesshouldbecloselyalignedtotheoverallbusinessobjectives.Suchobjectivescanbemeasuredand
shouldincludespecifictargetstobemet.
o IncreasingmarketshareMarketsharereferstothebusinesssshareofthetotalindustrysalesforaparticular
market.Increasingmarketshareisofprimeimportanceforeachofthecompaniesinvolvedinanymarketthatis
dominatedbyonlyafewlargebusinesses.

o ExpandingtheproductrangeTheproductmixisthetotalrangeoftheproductsofferedbythebusiness.
Businessesareusuallyeagertoincreasetheirproductmixasthesamemixwillnotbeeffectiveinthelongterm
duethechangingtastesandpreferencesofconsumers.

o ExpandingexistingmarketsThedemandforsomeproductsvariesgreatlyfromonegeographiclocationto
another.Geographicalrepresentationreferstothepresenceofabusinessandtherangeofitsproductsacrossa
suburb,state,city,townorcountry.E.g.BlueScopeSteelisatransnationalcorporationthatallowsittobenearits
customers.

o MaximizingcustomerserviceCustomerservicemeansrespondingtotheneedsandproblemsofthecustomer

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andisperhapsthemostimportantobjective.Highlevelsofcustomerservicesusuallyresultsinimprovedcustomer
satisfaction.

Developingmarketingstrategies.
Marketinginvolvesanumberofstrategiesdesignedtoprice,promoteandplaceproductsinthemarketplace.The
marketingmixconsistsof4elementscalledthe4Ps:

ProductTheproductisacombinationof:quality,design,name,warranty,packagingandexclusivefeatures.
Customersbuyproductsthatsatisfytheirneedsaswellasprovidethemwithintangiblebenefits.

PriceTherightpriceneedstobechosentopreventtheproductfromnotsellingatallifthepriceistoohighor
receivinglowerturnoveraswellasacheapimageifthepriceistoolow.

PromotionThepromotionstrategyisthemethodthatistobeusedbythebusinesstoinform,persuadeandremind
customersaboutitsproducts.

PlaceDealswiththedistributionofthegoodorserviceandconsistsoftwopartswhichare:transportationandthe
numberofintermediariesinvolved.

Implementing,monitoringandcontrolling
Implementationistheprocessofputtingthemarketingstrategiesintooperation.Implementationofthemarketingplan
involvesintegratingitwithallthesectionsofthebusiness,establishinglinesofcommunication,motivatingtheemployees
andmakingthemfamiliarwiththemarketingobjectivesandstrategies.

MonitoringandcontrollingMonitoringmeanscheckingandobservingtheactualprogressofthemarketingplan.The
informationcollectedisusedtocontroltheplan.Controllinginvolvesthecomparisonofplannedperformanceagainst
actualperformanceandtakingcorrectiveactiontomakesuretheobjectivesareachieved.Thecontrollingprocessrequires
thebusinesstooutlinewhatistobeaccomplishedbyestablishingaperformancestandardwhichisaforecastlevelof
performanceagainstwhichactualperformancecanbecompared.Thecommonformsofanalysisare:

o SalesAnalysisisthecomparingofactualsaleswithforecastsalestodeterminetheeffectivenessofthemarketing
strategy.Benefitofthesalesanalysisisthatitisinexpensivetoproducehoweverthefiguresmaynotbe100%
accurate.

o MarketShareanalysis/ratiosreferstoabusinessevaluatingitsmarketingstrategiescomparedtoitscompetitors
throughanalysingthebusinessmarket.

o Marketingprofitabilityanalysisisamethodinwhichthebusinessbreaksdownthetotalmarketingcostsinto
specificmarketingactivities.Byassessingthecostsofthespecificmarketingactivitiesinrelationtotheprofit
levels,themanagercanassesstheeffectivenessofeachactivity.

DevelopingafinancialforecastAbusinessmustdevelopafinancialforecastthatdetailstherevenuesandexpendituresfor
eachstrategywhenevaluatingalternatives.Costbenefitanalysisisahelpfultoolusedtoitemizefixedandvariablecosts
anddrawupaprofitforecastshowingprofitandreturn.Developingafinancialforecastrequirestwostepsthatare:cost
estimatehowmuchthemarketingplanisexpectedtocostandrevenueestimatehowmuchrevenuewillbegeneratedas
aresult.

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Chapter9marketingstrategies

Introduction
Whendevisingamarketingstrategy,itisimportanttoknowwhototargetthemarketingact.Promotionalandpricingstrategies
mustcatertothetargetgroupchosen.

Marketsegmentation
Marketsegmentationistheprocessofbreakingdownatotalmarketintosmallmarketsbasedonthesimilarcharacteristics
ofacustomergroup.
Byfocusingonaparticulartargetgroup,abusinessisabletoidentifythespecificneedsofthisgroup.
Themarketingplanwouldconsiderthefeaturesthatconsumerofthetargetgroupsothatmarketingstrategiescanbe
determined.

Typesofsegmentation
Typesofsegmentationare:
Psychographicsegmentation:Theprocessofdividingamarketintosmallermarketsbasedonlifestyle,personality,values
andinterests.

Geographicsegmentation:dividingamarketorcustomergroupsintosmallermarketsbasedondifferentgeographic
locations.Byfocusingonaparticulartargetgroup,abusinessisabletoidentifythespecificneedsofthisgroupandtailorits
marketingplanaccordingly.

Demographicsegmentation:Theprocessofdividingamarketintosmallermarketsbasedonthecustomersage,gender.
E.g.girlsatolderageswouldbuymorematuremagazines.Girlswouldnotbuycarmagazines.
o Age:Consumerswilldemanddifferentproductsatdifferentstagesoftheirlife.OlderwomanreadCleo,whereas
youngchildrenreadDOLLY.
o Gender:whereconsumersdemandproductsdependingontheirgender.
o Income:Wheretheincomewillaffectwhatconsumersbuy.Inthecity,productswillbemarketedtowardsmiddle
andhighincomeearners.
o occupation

Behavioralsegmentation:dividingamarketbasedonpeoplesknowledgeof,attitudestowardsanduseofaproduct.Some
factorsare:
o Purchaseoccasion:whencustomerismostlikelytopurchaseproducts
o Usagerate:howoftencustomersusethebusinesssgoodorservice.E.g.Internetprovidershavemanypackages
dependingonrateofuse.
o Userloyalty:todevelopaloyalcustomerbase.E.g.WoolworthsEverydayrewardcardswasintroducedtoincrease
loyalty.
o Benefitssought:whatcustomerswantfromaproduct.

Product/servicedifferentiationandpositioning
Productdifferentiation
Productdifferentiationistheprocesswherebyabusinessdistinguishestheattributesandfeaturesofaproductfromthose
ofitscompetitorsproducts.Somestrategiestoemphasizeproductdifferentiationare:
Pricethecheapestproviderofaspecificrangeofgoods.E.g.BigWpromoteswithAustraliaslowestpriceseveryday.
ProductqualitythebestqualityforproductsaroundE.g.WoolworthsusesthesloganThefreshfoodpeople,

servicedifferentiation
Itinvolvesadirectandimmediateformofcontactbetweenthebusinessandtheconsumer.
Aftersalesserviceisatypeofstrategytoemphasizeservicedifferentiation.Thiswilldevelopintostrongbrandloyalty.

Marketingmix
Whendevisingmarketingstrategiesbusinessesneedtoconsiderthefourelementsofthemarketingmix:product,price,
promotionandplace.People,processesandphysicalevidencemayalsobeconsidered.Bycombiningallthese,wegetthe

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7Psifmarketing.

Products
Goodsand/orservices
Thetermproductcanrefertoeitheragoodorservice.Aproductoffersaconsumertangibleandintangiblebenefits.
Tangiblebenefitsrefertothephysicalattributesoftheproduct.Thesecanincludethedesignstyle,colourandfeaturesofa
product.
Intangiblebenefitsrefertothebenefitsaconsumerassociateswithpurchasingaproduct.E.g.Customercarehelpdesks,
warrantiesandcustomercarehelpdesks,warrantiesandmaintenancechecks.
Whendevelopingmarketingstrategiespositioning,brandingandpackagingneedtobeconsidered.
o Positioningtheimagethataproducthasinthemindofaconsume.Itisofprestigeandreliability.
o Brandingthereputationthatabusinessorproducthasdevelopedoveraperiodoftime.Astrongbrandnameis
importantinenhancingtherelationship,
o Packagingthephysicalappearanceofthegood.Itisoftenthefirstimageoftheproductthattheconsumerwill
see.

Price
Pricereferstotheamountofmoneyabusinesschargesforthepurchaseofitsproducts.
Abrandthatiswellestablishedandhighlyregardedmaysellforahigherpricewiththeexpectation

Pricingstrategies
Generalstrategies
Competitionbasedpricingconsiderstotalcosttothebusinessofmanufacturingorprovidingagoodorservicetothe
consumerandthenaddsanadditionalamount.
pricepointswhereabusinesssetsdifferentpricesforsimilarproducts.Theproductsaredifferentiatedbytheirfeatures.
Psychologicalpricingusedtotakeadvantageofthisconsumerresponse.E.g.$99ratherthan$100
Priceandqualityinteractionbasedonhowhighqualitytheproductsare.Higherquality=higherprices.

Fastsales
Penetrationpricingsettingpricesatthelowestpossiblepricetogainanimmediategroupofcustomers.Usedto
penetrateamarketandgainmarketsharerapidly.Itactsasanencouragementforconsumerstoswitchovertothenew
product.
Lossleaderprovidingalimitednumberofgoodsatapricethatgeneratesminimalprofitorevenalosstoencourage
consumerstopurchasegoodsfromthebusiness.Theaimofthispricingstructureistoenticeconsumersintoastorewith
cheaplimitedstock.Consumerswillthenbuymoreexpensiveproductsinthefuture.
Productdeletionusedtoclearstockthatthebusinessbelievesisnolongersellingorattractinginterest.

Greatestreturns
Marketskimmingusedbyabusinesswhenitwantstorecoverthehighcostsinvolvedinestablishingaproductand
releasingitontothemarketplacebysettingahighprice.
Demandpricingthehigherthedemandforaproduct,thestrongertheabilityoftheorganisationtochargeahigherprice
forthatproduct.
Prestigepricingusedforproductsthatconsumersregardasprestigiousand,therefore,forwhichtheyarewillingtopay
higherprices.

Promotion
Givesthebusinessitspublicimageandprofile.
Marketingisoftenthefirstformofinformationthataconsumerwillreceive.

Elementsofthepromotionalmix
Thepromotionmixisthatpartofthemarketingmixthatseekstogenerateinterestinandawarenessofaparticular
productorbrand.Itconsistsof:
o Personalsellingaimstoestablishadirectlinkbetweenthebusinessandtheconsumer.Itinvolvestakingthe

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businesstotheconsumer,someformsincludedoortodoorsales andpartyplans.
o Relationshipmarketingtheprocessofbuildingandmaintaininglongtermrelationshipswithcustomers.It
involvescreatingahighlevelofcustomersatisfaction,valueandservice.
o AdvertisingItseekstoconveyamessagetoabroadgroupofcustomers.Itincludesradio,televisionandthe
internet.
o SalespromotionItisintendedtocreateinterestinandgenerateawarenessofaparticularproduct.These
promotionsincludecompetitions,samples,anddiscounts.
o Publicrelationstheprocessofcreatinganeventforabusinesstogenerateawarenessofitsproducts,attracting
interestinthebusinesssactivitiesandproducts.

Thecommunicationprocess
Marketresearchwillallowthebusinesstodevelopstrategiesthatwillattracttheinterestoftheproductsintendedmarket.
Waysofcommunicationarevia:
o Opinionleadersbusinessuseindividualsinthecommunitythatarehighlyrespected.Theyhaveknowledgeand
expertiseandwillcreatealinkbetweentheleadersimageandreputation.
o Wordofmouthinvolvesconsumersrelatingtoothers,theirreactiontotheuseofaproduct,includingthedegree
towhichtheyweresatisfiedwiththeproduct.

Place/distribution
Theprocessofdistributingtheproductfromwhereitismadetotheconsumer.
Distributionchannelsthechannelsbywhichaproductismovedfromtheplaceofmanufacturetotheconsumer.
Intermediaryabusinessthatpurchasesthefinalproductandthentakesontheresponsibilityofsellingthisproducttothe
consumer.
Therearethreechannelsofdistribution:
o Producertoconsumerwherethegoodorserviceisproducedbyanindividual/organisationandisthenpassed
directlyontotheconsumer.Therearenointermediaries.
Advantages:Itallowstheproducertomaintaincontroloverallareasoftheproductandprovidesthe
producerwithadirectpointofcontactwithconsumers,.

o Producetoretailertoconsumerwherethegoodisproducedandthenpassedontotheretailerwhopassesit
ontoconsumers.
Advantages:Allowstheproducertoconcentrateonmanufacturing.Thereisgreaterdistributionand
accesstothegood.

o Producertowholesalertoretailertoconsumerwherethegoodisproducedandthenpassedonawholesaler
whosellspartofthestocktotheretailerwhopassesitontoconsumers.
Advantages:allowstheproducetoholdlesseramountsofidlestock.Marketingandsalestendtobethe
responsibilityoftheretailersolesscosts.

Channelchoices
Thechoiceofdistributionchannelwillinfluencethetypeofcustomerstheproductattracts.Thereare3distribution
channelcategories:
o Intensivedistributiontheproductisreadilyavailabletoawideselectionofstoresorlocations.Usedfor
convenienceitems.
o Selectivedistributioninvolvestheuseofalimitednumberofstores/locationstosellordistributeaproduct.
Allowsaproducertocontrolthemarket.Usedforfashionandelectronics.
o Exclusivedistributionwherethereisarestrictiononthenumberofproductsand/oravailabilityoftheproduct.
E.g.expensivejewelryandwatches.

Physicaldistributionissues
TransportTransportreferstotheprocessofmovinggoodsfromonelocationtoanother.Transportationcanbeexpensive
andthetypeofgoodneedstobeconsidered.
Warehousingtheprocessofstoringproductsbeforetheyaredistributedtotheconsumer.Theyareusedtostorefinished
productsandholdingstock.Somegoodscanonlybewarehousedforaverylimitedtimebeforelosinguse,e.g.foods.

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InventoryAbusinessmustensurethatithassufficientstocktosatisfydemand.Theyalsomustnotoverstockotherwise
clearancesalesareneeded.Thisreducesprofits.

People,processesandphysicalevidence
Thelast3Pswhicharepartofthe7Psofmarketingare:

People
havingtherightpeopletosupportthecompanysproductsand/orservice.Thismayincludedetailedproductknowledge
andattendingtocustomerconcernsinanunderstandingmanner.

Process
Theconsumerstotalexperienceofbuyingtheproductfromasimplestageofsearchingforinformationtothefinalstage
ofexperiencingthebenefits.

physicalevidence
Thephysicalappearanceoftheproductacrosseveryaspectofitspresentationtotheconsumer.
Physicalevidencemayalsorefertothepeoplewithinabusinessandthevisualpresentationthattheydisplaytoclients.E.g.
howemployeesactanddress.
Thepackagingneedstobeabletotalktotheconsumerasitisthefinalpointofpromotionwhereitisabletobe
communicated.

Emarketing
Internetmarketingisalsoknownasemarketing.Emarketingallowsabusinesswithonlineoperationstoreachaglobal
audience.
Thewebsitemustbecreativetoattracttheinterestofconsumerswhilefulfillingtechnicalaspectsofthesite.

Globalmarketing
Manybusinessesoperateincountriesbeyondtheirdomesticoperations.
Itprovidestheopportunitiestoincreasesales,furthertheirbrandawarenessandestablishmarketsinnewcountries.

Globalbranding
Itismoreeffectiveandefficienttopromoteabrandratherthanindividualproducts.
Abrandhasthesamemeaninginanylanguage.

Standardizationanddifferentiation
Owingtodifferencesinlanguage,religion,tastesandethicsitisveryimportantresearchesthemarket.Theproductmay
havetobechangedtosuitaspectsofdifferentcultures.

Marketingstrategiesinglobalmarkets
Product
Aproductsfeatureswillvaryfrommarkettomarkettosuitcustomersindifferentcountries.Labelsneedtoprintedin
differentlanguages.

Place
Placeinthemarketingmixreferstotheprocessofdeliveringtheproducttoconsumers.
Theinternethascreateda24hoursshop.
Havingagoodrelationshipwiththelocaldistributorisimportant.Itwillensureproductsaregiventheattentiontheyneed.
Competitivepositioninginvolvestheformalprocessofabusinessdetermininghowtodifferentiateitselffromits
competitors.Thismakesiteasierforconsumerstomakeachoice.Valuepropositionispartofthis,thereare3typesof
value:
o Operationalexcellencereferstotheabilityofthebusinesstoberunefficientlyasameansofproducingalow

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costoperation.Benefit:allowsthebusinesstopassoncostsavingstoconsumers.
o Customerintimacyinvolvesabusinessdevelopingapersonalisedprofileoftheircustomersshoppinghabitsso
thebusinesscandevisethecorrectmarketingstrategy.
o Productleadershipreferstohowthebusinesscanbethefirsttoproducethebestproduct.

Price
Becauseoftheadditionalcostsofexportingpacking,transportinsurance,documentationandcurrencyvariationa
competitivepriceismoredifficulttoestablish.Iftheproductisconsideredexclusive,thepricecanbesethigh.

Promotion
GlobalcanuseavarietyofmediumsliketheTV,internetandradio.language,religionandcultureneedtobeconsidered.
Namesdonotalwaystranslatewell.