Transcript First Years - Richardo

MNB102-E
INTRODUCTION TO BUSINESS MANAGEMENT
Facilitator: Neels Bothma
Welcome to the Marketing
Section of today’s First
Years lectures.
Structure of the class
1. Introduction to marketing
2. Marketing research
3. Customer behaviour
4. Market segmentation
5. The marketing mix
6. The marketing strategy
7. Public relations
The Evolution of Marketing as
we know it
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Operation/Product orientation
Sales orientation
Marketing oriented
Consumer oriented
Strategic approach
Relationship marketing
Marketing & Sales
Concepts Contrasted
Starting
Point
Focus
Factory
Existing
Products
Means
Ends
Selling
and
Promoting
Profits
through
Volume
The Selling Concept
Market
Customer
Needs
Integrated
Marketing
Profits
through
Satisfaction
The Marketing Concept
What is
Marketing?
Marketing consists of management tasks and
decisions directed at successfully meeting
opportunities and threats in a dynamic
environment, by effectively developing and
transferring a need-satisfying market offering
to consumers in such a way that the objectives
of the business, the consumer and society will
be achieved.
The Marketing Process
(see Fig 13.1)
Simply:
 Marketing management creates an offering
(product, price marketing communication,
distribution)
 The target market sacrifices money
 The target market consumes the offering
 Marketing management gets feedback through
research
 This all happens in a marketing environment
 Everybody satisfies their objectives (maximise
profitability in the long term, total need
satisfaction)
Marketing Mix- The Four P’s
Product
Price
“Goods-and-service”
combination that a
company offers a
target market
Amount of money
that consumers
have to pay to obtain
the product
Activities that
persuade target
customers to buy
the product
Promotion
Target
Customers
Intended
Positioning
Company activities
that make the
product available
Place
The Importance of Information
Marketing
Environment
Customer
Needs
Why
Information
Is
Needed
Strategic
Planning
Competition
Marketing Research
Why?
Know the research process
Market forecasting
Sales forecasting
Profit forecasting
1. Define the problem to be investigated
2. Formulate hypotheses
3. Investigate hypotheses
4. Compile a questionnaire
5. Test the questionnaire
6. Select sample
7. Train fieldworkers and do fieldwork
8. Analyse data
9. Interpret the results
10. Compile the report
11. Management studies report
12. Management implements findings
Consumer Buying Behavior

Consumer Buying Behavior refers to
the buying behavior patterns of decision
making units (individuals & households)
directly involved in the purchase and
use of products, including the decisionmaking processes preceding and
determining these behaviour patterns.
Study consumer behavior to answer:

“How do consumers respond to
marketing efforts the company might
use, why do they behave the way they
do?”
Customer behaviour
INDIVIDUAL FACTORS
GROUP FACTORS
Motivation
Attitude
Perception
Learning ability
Personality
Lifestyle
Family
Reference group
Opinion leaders
Cultural group
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Awareness of need
Gathering information
Evaluation
Purchase action
Post purchase evaluation
Factors Affecting Consumer
Behavior: Group
Groups
•Membership
•Reference Group
Family
•Husband, wife, kids
•Influencer, buyer, user
Cultural group
Group Factors
Factors Affecting Consumer
Behavior: Individual
Motivation
Beliefs and
Attitudes
Individual
Factors
Learning
Perception
Personality
And
lifestyle
Maslow’s Hierarchy of Needs
Self
Actualization
(Self-development)
Esteem Needs
(self-esteem, status)
Social Needs
(sense of belonging, love)
Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst)
Consumer Decision Process
Awareness of need or problem
Information Search
Evaluation of Alternatives
Purchase Decision
Post-purchase Behavior
Market segmentation
What is a market?
Different types of markets:
• consumers
• industrial
Approaches to the
• resellers
market – see fig 13.3
• government
Requirements for successful segmentation:
• Identifiable and measurable
• Substantial
• Accessible
• Responsive
Customer Markets
International
Markets
Consumer
Markets
Company
Government
Markets
Business
Markets
Reseller
Markets
Requirements for
Effective Segmentation
Measurable
Accessible
• Size, purchasing power, profiles
of segments can be measured.
• Segments must be effectively
reached and served.
Substantial
• Segments must be large or
profitable enough to serve.
Differential
• Segments must respond
differently to different marketing
mix elements & actions.
Actionable
• Must be able to attract and serve
the segments.
Bases for segmentation
Demographic – Who they are
Geographic – Where they are
Psychographic – What they think they are
Behavioural – How do they behave
All of the above determine the consumer profile – draw a picture
Targeting and positioning
Bases for Segmenting
Consumer Markets
Geographic
Nations, states,
regions or cities,
density
Demographic
Age, gender, family size
and life cycle, or income
Psychographic
Social class, lifestyle,
or personality
Behavioral
Occasions, benefits,
uses, or responses
Market Coverage
Strategies
Company
Marketing
Mix
Market
A. MARKET AGGREGATION
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3
Segment 1
Segment 2
Segment 3
B. MULTI-SEGMENT APPROACH
Company
Marketing
Mix
Segment 1
Segment 2
Segment 3
C. SINGLE SEGMENT APPROACH
Positioning for
Competitive Advantage
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Product’s Position - the place the product
occupies in consumers’ minds relative to
competing products; i.e. Castle used to
position on “the great South African beer”.
Then: “the friendship brew”
Then: SA’s finest
Now? Satisfies a South African Thirst
Marketers must:

Plan positions to give products the greatest
advantage
 Develop marketing mixes to create planned
positions
Steps in Segmentation,
Targeting, and Positioning
6. Develop Marketing
Mix for Each Target Segment
5. Develop Positioning
for Each Target Segment
4. Select Target
Segment(s)
3. Develop Measures
of Segment Attractiveness
Market
Positioning
Market
Targeting
2. Develop Profiles
of Resulting Segments
1. Identify Bases
for Segmenting the Market
Market Segmentation
Marketing Mix- The Four P’s
Product
“Goods-and-service”
combination that a
company offers a
target market
Activities that
persuade target
customers to buy
the product
Promotion
Price
Target
Customers
Intended
Positioning
Amount of money
that consumers
have to pay to obtain
the product
Company activities
that make the
product available
Place
The marketing instruments (mix)
1. Product
― Product concept
― Product classification
― Brand decisions
― Packaging decisions
― Differentiation
― Obsolescence
― Multi- product decisions
― New product decisions
The marketing instruments
– Product (cont.)

New Product Development Process
 Develop new ideas
 Screen ideas
 Eliminate non viable ideas
 Develop product
 Develop strategy
 Test marketing
 Commercialisation
Classification of Product
Convenience Products
Shopping Products
> Buy frequently & immediately
> Low priced
> Many purchase locations
> Includes:
• Staple goods
• Impulse goods
• Emergency goods
> Buy less frequently
> Gather product information
> Fewer purchase locations
> Compare for:
• Suitability & Quality
• Price & Style
Specialty Products
Unsought Products
> Special purchase efforts
> Unique characteristics
> Brand identification
> Few purchase locations
> New innovations
> Products consumers don’t
want to think about
> Require much advertising &
personal selling
The marketing instruments
(mix)
2. Price

Types of prices

cost price
 market price
 target price
 final price
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Price adaptations

skimming
 penetration
 market price
 leader price
 odd price
 bait price
The marketing instruments
(mix)
3. Distribution
 Type
of channel
 Channel leadership
 Market coverage
 Physical distribution
Refer to box on page 326
Consumer Marketing
Channels & Levels
Channel Level - A Layer of Intermediaries that Perform Some Work in
Bringing the Product and it’s Ownership Closer to the Buyer.
Channel 1
Direct
M
C
Indirect
Channel 2
M
R
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C
R
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C
R
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C
Channel 3
M
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W
Channel 4
M
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W
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W
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Physical
distribution
Costs
Order Processing
Minimize Costs of
Attaining Logistics
Objectives
Submitted
Processed
Shipped
Physical
distribution
Transportation
Functions
Warehousing
Storage
Distribution
Water, Truck,
Rail,
Pipeline & Air
Inventory
When to order
How much to order
Just-in-time
The marketing
instruments (mix)
4. Marketing communication

to inform, persuade and remind
 advertising
 personal selling
 sales promotion
 publicity
The Marketing
Communications Mix
Advertising
Any Paid Form of Nonpersonal
Presentation by an Identified
Sponsor.
Personal Selling
Personal Presentations by
a Firm’s Sales Force.
Sales Promotion
Short-term Incentives to
Encourage Sales.
Public Relations
Direct Marketing
Building Good Relations with
Various Publics by Obtaining
Favorable Unpaid Publicity.
Direct Communications
With Individuals to Obtain
an Immediate Response.
The Integrated
Marketing Strategy
The marketing concept:
 Profitability
 Consumer orientation
 Social responsibility
 Organisational integration
Phases in the product life cycle:
 Introductory
Marketing warfare
 Growth
 Attack
 Maturity
 Defense
 Decline
Product Life Cycle
Sales and Profits Over the Product’s Life From
Introduction to Decline
Sales and
Profits ($)
Sales
Profits
Time
Product
Development
Losses/
Investments ($)
Introduction
Growth
Maturity
Decline
Marketing Planning and
Control
Planning
o Strategic planning
o Functional planning
Control
o
o
o
o
Set objectives
Measure performance
Evaluate performance
Take corrective action
Public Relations
A deliberate, planned and sustained
process of communication between a
business and its internal and
external publics. Its purpose is
obtaining, maintaining and/or
improving good relations and
understanding.
Developed from:
Manipulation
Information
Mutual influence
What is Public Relations?
•Building good relations with the company’s
various publics by obtaining favorable publicity,
building up a good “corporate image” and
handling or heading off unfavorable rumors,
stories and events.
•Major functions are:
– Press Relations
– Product Publicity
– Public Affairs
– Lobbying
– Investor Relations
–Development
Major Public Relations Tools
Web Site
Public
Service
Activities
News
Corporate
Identity
Materials
Speeches
Special
Events
Audiovisual
Materials
Written
Materials
Public Relations Management
1. Planning
o Scanning the environment
o Setting objectives
2. Organising
oOrganisational structure
oOutside consultants
3. Leading
oEstablish corporate culture
4. Evaluation and control
Communication
• Communication can be verbal and non-verbal
• Communication process – see fig 16.6
Basically: Sender encodes message which
is transmitted to receiver via a medium.
The receiver decodes the message and
interprets it in some way. This all happens
despite noise in the environment.
• Types of communication media:
The spoken word
The printed media
Sight and sound
Special events
The Internet
Publicity
• Methods of obtaining publicity:
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Unique special events
Unique communication messages
News releases
Sponsorships
• Social responsibility and business ethics
• Areas of social responsibility:
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Consumers
Suppliers
Competitors
Employees
Owners and shareholders
The community
The end!
We encourage you to
study further in this exciting
field!