Marketing

4.1 The role of marketing

Ms. Elaine B Gili

gilie@verdala.org
 The full marketing module:

Next
slide
Introduction to Marketing

What is marketing?
brainstorm as a class activity
Article – 1/14/1 what is marketing?
Read this as HW also uploaded on managebac
 Some introductory ideas:
• Needs – essentials vs Wants – desires. Marketing exists to address people’s
wants and needs

• Marketing is about making people buy your goods and services rather than
those of your rivals (competitors)

• Marketing – a business needs to analyse the reasons/aspects that make people

choose one product for another. These reasons/aspects refer to the:
– 4Ps (product)
– 7Ps (service).

• Marketing refers to getting the right goods at the right place to the right people
at the right price.

http://www.youtube.com/watch?v=JIirzTdaey4
5 minutes brief intro.

http://www.youtube.com/watch?v=DiqHPHHmf_Q
1 minute 4 P song
How is marketing related to
other business functions?
Discuss
Make sure to link MRK to all the main functions:
finance, production, HR
Marketing for services
From 4PS to 7PS
Paul Hoang 2nd ed. pages 448-449
Task 1:
Think about and share service
examples.

Task 2:
What are the main differences in
consuming or providing a service
compared to a product?
Examples of services
Services - Basic Features THINK!
HL can help here!
 Services - Basic Features
• It is an intangible product – cannot be touched and cannot be stored

• Very difficult to standardise services as opposed to the possibility of

producing thousands of homogenous products.

• Not taking anything with you home (you take a piece of paper and an
experience!)

• Experiences are not separated between customers e.g. in a restaurant.

If a customer is noisy, it will impact on others.

• The service experience depends on the service provider – the

employee in touch with the customer.

• The value added has to be in the experience (e.g. décor, atmosphere,

free delivery, the professional staff) rather than in a product.
From 4PS to 7PS

1. People
2. Processes
3. Physical evidence*
(aka physical
ambience/environment)
Task: Discuss each P
 PEOPLE
• The employees have a huge responsibility here

• They are crucial in making the experience pleasant or in

delivering a quality service to customers

WHAT ASPECTS DO YOU CONSIDER IMPORTANT WHEN YOU

ARE BEING RENDERED A SERVICE?
 People
• These are some elements to keep in mind if a business
wants its people to shine!

– Appearance
– Body language
– Attitudes
– Feedback – gather this to take action
– Efficiency – training, attention, practice, focus
 PROCESS
• This refers to the way a service is delivered

• It is obviously linked to the people – they overlap – it is inevitable!

• Services are harder to sell and differentiate (e.g. an insurance

policy) as they are not tangible, this makes the process crucial. So
we are here looking at
– Efficiency / Waiting time,
– support,
– technology used,
– Payment methods
– Customer service – attention/politeness (linked to people!!)
– After sales care
 Physical evidence
• This refers to the tangible elements of a service e.g. the lobby in a
hotel, the dining area in a restaurant, the waiting room in a clinic…

• Many businesses use peripheral products to boost the physical

evidence. These are additional products offered to make the
experience nicer! e.g.
– a coffee whilst waiting for a haircut,
– TV and wifi in a waiting room,
– play areas in shops/supermarkets/clinics,
– toffees in a bowl or newspapers,
– male magazines in a women’s clothes shop!

• Consider also the background music, pleasant smells, lighting,

decorations.
 Market orientations:
Product orientation
Market orientation
Social Marketing
Commercial marketing*
copies – Paul Hoang 2nd ed. pages 444-447 READ
* new – not in your book
search these two terms:

product orientation

market orientation
 A product oriented business
(product orientation)

The product is so unique and wanted that it sells

by itself. A product is designed and produced
without even checking what the customer really
wants.

This is possible with a) novelties or b) very

specialized goods. The customer has no choice
and this allows the company to ignore the
customer needs.
 A market oriented business
(market orientation)

Here the customers’ needs are continuously

given attention. Henry Ford is the founder of
this type of thinking. He produced a model
after taking into consideration what the
customers really wanted and after considering
the price that they could afford.
 Ford
http://www.bing.com/videos/search?q=produc
t++orientation+&&view=detail&mid=86B116FB
51F1FD650A4686B116FB51F1FD650A46&FOR
M=VRDGAR
 Where would you fit this?
A Brompton Bike

https://www.youtube.com/watch?v=opk3x1rCYgo
search these two terms:

social marketing

commercial marketing
 SOCIAL MARKETING
Definition: an activity that seeks to influence
social behaviour to benefit the target audience or
society as a whole e.g. anorexia, smoking,
drinking etc…

HOW??? through catch-phrases, promotional campaigns,

bill boards, TV, radio
Example: Dog trust slogan: A dog is for life not for christmas
FIND EXAMPLES!
 COMMERCIAL MARKETING
Definition: ‘the use of marketing strategies to meet
the needs and wants of customers in a profitable
way’. (Hoang, 2014, p 331)

• Ethical aspects are less important in commercial marketing

than in social marketing.

• We are here looking at normal profit making businesses

trying to sell more and more.

• The aim is to provide the customer with the product/service

desired be it alcohol, clothes, consumables, fast food,
weapons.
 Social marketing vs commercial marketing (new)

• Purpose – social marketing is about raising awareness

and commercial marketing is about selling more.
• Benefits – social marketing tries to spill beneficial
effects on the community. Commercial marketing aims
at financial benefits for the business owners /
stakeholders.
• Main users – Commercial marketing: obviously the
profit making businesses in the private sector mainly
and social marketing: the NGOs and public sector
businesses too.
(Hoang, 2014, p. 332)
 Asset Led marketing
• Identify the core competencies of your
business e.g. workers, product, location,

• Use these strengths as your main marketing

strategy and to gain a competitive advantage
e.g. using a strong brand name to launch a
new product.
 IB Q BANK
BAJAJ (again) from Franchising
In India, the market leader in motorbike manufacturing is Bajaj, with a 34 % market share. There
are many market segments for motorbikes. For some target markets, price is the most important
factor. Other target markets are willing to pay more for extra features, such as better styling*.
Bajaj is market orientated and offers 12 different models to satisfy the needs of various consumer
profiles.

Bajaj has an extensive distribution network even in remote areas. Twice a year, Bajaj carries out
primary market research through surveys, focus groups and interviews with their customers
about the quality, reliability and safety of the Bajaj motorbikes. This is particularly important in
remote areas where there are few garages to either service or repair them.

In the last 10 years the company has also gained a significant share of other markets, including
the Philippines, Colombia and Tajikistan. This was done through strategic alliances. One of the
company’s long-term objectives is this continued expansion in international markets.

For its international markets as in India, Bajaj is determined to make sure that each model of
motorbike satisfies local needs and preferences. One proposal is to use franchising to enter
international markets.

1. Outline briefly the difference between market orientation and product orientation. [2 marks]
 Model BAJAJ
Market orientation is one that allows the wants and needs
of customers and potential customers to drive all the
organization’s strategic decisions. The organization’s
corporate culture is systematically committed to creating
customer value. The rationale is that the more a company
understands and meets the real needs of its consumers, the
more likely it is to have happy customers who come back
for more, and tell their friends. Product orientation is an
approach to business that places the main focus of
attention upon the production process and the product
itself. The rationale is that the unique selling proposition of
the organization is centred on the special features of the
product.
 IB Q Bank Zesty
HL - Zesty
Zesty is a family owned partnership that grows oranges in Florida USA, for the export market. It currently exports
fresh oranges to Japan and Canada. Federal agricultural officials are predicting a 29 % increase in the orange crop
next year. In anticipation of this, Zesty have launched an orange juice drink using fresh orange juice. They have
marketed the drink using a product orientated approach rather than a market orientated approach.
Each year Zesty undertakes a SWOT analysis to help determine its strategic and operational objectives. An extract
from the opportunities and threats section of the SWOT analysis is shown below:

Opportunities
• a 50 % smaller orange crop in Brazil, the market leader
• significant growth in domestic sales of frozen concentrated orange juice
• US government negotiations with Cuba to establish a free trade agreement
• a promotional campaign by the Florida Citrus Growers Association (FCGA)
• favourable long-term weather forecasts
• a reduction in interest rates by the Federal Reserve.

Threats
• the spread of citrus diseases as a result of Hurricane Gloria
• labour shortages
• a slowing world economy
• new standards for grades of oranges developed by the United States Department of Agriculture
• an appreciation in the value of the US dollar.
 

4. Examine Zesty’s decision to use a product-orientated approach rather than a market-orientated approach to
increase its sales revenue. [6 marks]
 Model answer - Zesty
A market-oriented approach has at its heart the consumer and his or her needs. A marketing
campaign/strategy is devised to satisfy the customer to the mutual advantage of the buyer and
seller. Market research will determine the customer needs and the firm will produce what it can
sell. The consumer determines what will be produced and how much will be produced. A product-
oriented approach has at its heart the product itself, not the consumer. Such a marketing strategy
would acknowledge the intrinsic worth of the product and know that consumers will buy the
product if the price and/or quality are right. The aim is to sell what has been produced.

The Zesty marketing team may consider that consumers have an intrinsic belief in the value of
fresh fruit, particularly oranges and this may lead to a product-orientated approach. For example,
consumers already know they provide vitamins and are part of a healthy diet. There is no need to
convince consumers that they need the product. This may be added by the promotional campaign
by The Florida Citrus Growers Association. So the emphasis is on selling what is produced.
Advertising is likely to concentrate on the quality of the product compared to other orange drinks.
Perhaps they can use the threat of new quality standards in the US to their advantage. Advertising
could also emphasize a “support America” campaign in order to eat into Brazil’s market share.
Zesty’s marketing team could also emphasize the “value for money” of the product by pricing it
competitively.

However, given the competitive nature of the market and the type of the product (orange juice)
and as stated in the case, the current product – concentrated orange juice – is very popular;
perhaps Zesty should have carried out a market research re possible sizes of the bottles, added
natural ingredients and so on. This market research might have reduced the chance of failure and
11D ensured success. After all it is very easy to imitate a product that offers fresh orange juice. Zesty’s
unique selling point may not last too long.
 Class activity
• divide in groups of 4:
• find a business
• use the prepared handouts to go through to
the learning tasks planned for slides 34-44
What information do you need to know
about the market that a business is
operating in?

What is meant by the term:

The business’ MARKET?
THINK!
 Some new terminology:
A business is interested in the market it operates in. These are some aspects to
consider about the market a business operates in:

– The market size

– The market type
– The market growth potential
– The firm’s market share
– Competition & Market concentration
Discuss these!
– Barriers to entry
– Geographical & demographical characteristics
– Seasonal changes
– Cyclical characteristics

(Next few slides)

 Market type:
• Consumer markets -
markets that cater for
private individuals e.g.
consumer goods – B2C

• Industrial markets/producer
markets - markets that cater
for businesses and
governments e.g. capital
goods (aka commercial
markets) – B2B
 Market size:
• How many customer are there?

• It can be measured in: $, units, customers.

• With globalisation, market sizes are no longer

confined by geographical borders (globalization).
 Market growth potential:
– What is the likelihood that the market will expand
in the future (sunrise businesses)?

– Or is it likely to contract (sunset businesses)?

– Are sales volumes likely to increase e.g. internet in

Africa?

– If a market’s growth potential increases, it attracts

more players = more competition
 Market share:
1. What % of all sales in the market belongs to your
business?

2. What is your share of the cake?

sales of your business X %

sales in whole industry

You need to know this formula!

Could also be represented in a pie chart
 Market leaders
Evidence shows that there is a positive
relationship between market share and profits.

Why?

Market share = Status, image, economies of scale,

brand recognition, quality, trust, more funds for
operations (advertising/investment in technology, new
products, employment of best workers etc…)
ALL these aspects = PROFIT
 Market concentration
DEFINITION – it measures the level (degree) of
competition in a market by looking at the
market share held by the largest businesses in
the market.

If the top 3 businesses have 98% of the market

share (it is highly concentrated – not a lot of
competitors)
 Market concentration – some other terms
• 1 player = monopoly /monopolist

• 2 or more players = oligopolists (few strong

players) e.g. holding 98% of market share = a huge
concentration ratio – few players holding most of
the market share!!!

• perfect competition = a lot of players in the

industry competing between them. There could
be a price leader.
 Marketing objectives:

• Marketing goals – still STOP and SMART

• Can you think of any marketing goals that could

be set by a business?
 Marketing objectives:
• Marketing goals – still STOP and SMART
• Can you think of any marketing goals that could
be set by a business?
– Increase sales revenue
– Increase market share
– Improve market leadership
– Improve awareness and brand recognition
– Develop new products/markets

…and in social marketing, what are the marketing

objectives?
Section C - paper 2 (20 marks)

A glimpse into this NEW component.

 CUEGIS
Choose a business ideally a MNC and in
groups of 3/4 find elements pertaining to:
1. Change
2. Culture
3. Innovation
4. Ethics
5. Globalisation
6. strategy
DISCUSS
How do marketing strategies evolve
(change) as a result to changes in
customer preferences?

Do you think marketing strategies have

to change over time?

Why?
How?
THINK!
 Marketing strategies change due to:
• Technology changes – innovation/change

• Innovations - innovation

• Changing trends – culture/change

• Globalisation - Globalisation

• Competition - Change

• Products becoming obsolete at a faster rate – short product

life cycles (later) – change/globalisation/innovation
 What is a
marketing audit?
 Marketing Audit
• Audit – exercise to check what you are doing

• Financial audit – is an exercise mandatory for

companies where an auditor is appointed to
check the final statements of a business

• A marketing audit refers to a marketing SWOT

– you check your marketing function
 Marketing plan
• Once you carry out a marketing SWOT,
• Set the marketing objectives*
• Devise the strategies and tactics that will
enable you to reach the objectives set e.g. set up
promotional campaigns, plan outlets to be opened, training
of people
• this plan is referred to as the marketing plan
* Open 3 outlets by 2013 or increase the market share by 10% by 2013
 A marketing plan uses a lot of
theoretical applications covered in
class. Consider these for your IA!!
• SWOT
• Product life cycle
• Position maps
• Sales forecasting
• Boston Matrix
• 4Ps / 7Ps
• Ansoff
ETHICS IN MARKETING
Ethics – doing what is morally right.

Ethics in marketing – doing what is

morally right when devising your
marketing strategies (7Ps).
 FOOD for THOUGHT:
Unethical advertising
(PROMOTION)
short clip 3.13 minutes
http://www.youtube.com/watch?v=P
RNvhGND7Kc
 CADBURY!
(shape/size) PRODUCT / PACKAGING
http://www.dailymail.co.uk/news/article-2219775/Cadbury-cuts-size-Dairy-Milk-choc
olate-bar-keeps-price-exactly-same.html
http://www.dailymail.co.uk/news/article-3093921/Cadbury-s-Roses-tin-shrinks-fourth
-time-four-years-making-quarter-2011-size-price.html

articles go on and on…..

and others follow…
http://www.dailymail.co.uk/femail/article-3037688/Shrinkflation-sneaky-firms-making-favourite-pro
ducts-smaller-NOT-shrinking-price.html
 PESTER POWER
what is it?
http://www.youtube.com/watch?v=S-KwCNOg
0qs&list=PL8AA3E4A434C07CA3
3.45 minutes

e.g. chocolate at their eye level

and bright/colourful packaging
 Class activity:
Find examples of unethical
marketing practices!
DO NOT LIMIT TO PROMOTION pls!!!!
Examples of unethical marketing practices
 BAIT AND SWITCH
• An illegal tactic in which a seller advertises a product with the
intention of persuading customers to purchase a more expensive
product. When a seller uses this tactic, they frequently tell the
customer that the original product is sold out or no longer
available (even if the product is indeed still available), and push
hard for the customer to purchase the costlier product. This tactic
can be considered false advertising if the seller is not actually
providing the original product, but if the item is available but the
seller strongly encourages the customer towards another item, in
general no legal action can be taken.
Read more:
http://www.investorwords.com/389/bait_and_switch.html#ixzz2
MbOK7dpQ
 Unethical marketing examples:
• Products involving health aspects/miracles
• Products that make you rich quick
• Losing weight fast or beauty products
• Travel fraud
• Product misinterpretations – using brand names similar to
other more established brands
• Limited stocks only – until stocks last – instilling fear!
• The use of pester power
• Confusion marketing – overwhelming customers with
information so much so that they end up making
uninformed decisions.
• AND MORE!
Are there any repercussions from using
unethical advertising (easy come on….)?
 It is not always wise to use unethical marketing:

• There could be laws prohibiting/controlling

certain business activities to protect consumers.
• There could be other non-governmental
organisations aimed at regulating certain
industries.
• Pressure groups could target the business.
• The customers could boycott the business.
• The image and reputation of the business could
be tainted.
 Reinforcement
IB Q Bank – 4.2 Ethical Marketing

Discuss how ethical approaches can be

integrated into a company’s marketing strategy
to provide competitive advantage. [6 marks]