MOUNT KENYA UNIVERSITY

SCHOOL OF BUSINESS AND ECONOMICS

DEPARTMENT OF ECONOMICS

BACHELOR OF BUSINESS MANAGEMENT

PRINCIPLES OF MARKETING

BBM 1202

1. Explain the competing marketing concepts/philosophies that guide the organization

orientation toward the market place.

(i) Production concept – This is the oldest in the concept of marketing. This type of

concept holds that consumers will need wide available products and services
 which are inexpensive and easy to access. In this concept managers mainly

concentrate in low cost products and mass distribution.

(ii) Product concept- This philosophy or concept holds that consumers will mainly

favor those products may or offer the most quality, performance, or creative and

innovative features. One of the modern example of this concept is IT companies,

they are very innovative and they try to improve on their products and services.

This concept assumes that buyers admire well made products and can be satisfied

by the quality and performance.

(iii) Selling concept – This is another common business concept or orientation. This

concept holds that consumers and businesses if left alone will not buy enough of

the selling company’s or organization products and services. Selling concept

mainly focuses on the possible sale of a product. This concept does not contain

repeated concept of sale of products and customer satisfaction is not that great.

(iv) Marketing concept – An organization or company that believes in the marketing

concept usually places the consumer at the center of the organization or company.

All activities done are focused towards the consumer. This concept uses the pull

strategy which means a brand is so strong that customers would always prefer

your brand of products and services to others.

(v) Societal marketing concept- This concept highlights the needs and wants of the

target market and delivery of better value than its competitors as a whole, this

concept also emphasizes the importance of the well-being of customers and

society as a whole (societal welfare). This concept enhances both consumer and

society reputation.
Reference

Kotler, Philip. (2000) Marketing Management. Upper Saddle River, New Jersey: Prentice Hall.

2. Differentiate among Needs, Wants and Demand?

(i) Needs – This are state of self-deprivation of an individual. The human needs are

starting point of marketing. Human needs can either be physiological, cultural,

social or either individual. Human needs are unlimited meaning creation or

inventions try to satisfy human needs. A need is a necessity that is needed for

survival factors. Examples of needs may include: food, shelter, water and clothes.

Other needs may include; education, healthcare, insurance and pension.

(ii) Wants – wants are desires for specific satisfiers of needs. Human needs are

unlimited and by that satisfiers are needed. A person desires for different

products, services and methods.

(iii) Demand- Demands are human wants backed by ability and willingness to buy. A

person wants goods and services that will only give them maximum satisfaction.

References:

Koirala, Dr. Kundan Dutta. Elemantary Marketing. Kathmandu: Buddha Academic Publishers

and Distributers Pvt. Ltd 2014.

Thapa, Gopal, Dipendra K. Neupane and Dilli Raj Mishra. Introduction to Marketing.

Kathmandu: Asmita Books Publishers and Distributors (P) Ltd., 2014.

 3. Explain the marketing tools/elements and identify the relevant variables associated

with these elements.

(i) Product- A product is an item that satisfies either a need or a desire. A product

can either be a service, a physical item or a virtual offering. A product follows a

certain lifecycle so as to satisfy the needs of a person. Products consists of

different characteristics such as branding. Branding determines the value of a

product and how it will affect the market of that item. Products are classified into

different categories which include: tangible goods, intangible goods and services.

(ii) Price- This determining the value of a product. How worthy a product is in terms

of market value. This also identifies the target customers, how good is the product

and the nature between consumer and product satisfaction. Price helps determine

the right market, the right customers and the right products.

(iii) Place- This means providing your customers with the right area to access the

product or service. A good place determines with the target audience and how

easily they can access the product. Availability of resources means the place is

good and products or services will move very fast.

(iv) Promotion- This is all about marketing your products and services either through

advertisements, online marketing or door to door marketing. As a result of digital

age, promotion is the marketing mix which determines the growth of a product.

Van Vliet, V. (2011). Marketing mix, the 4P‘s (McCarthy). Retrieved [Monday, Oct 21st 2019]

from toolshero: https://www.toolshero.com//marketing/marketing-mix-4p-mccarthy/

4. Explain the bases of market segmentation and the criteria for effective

segmentations

Bases of market segmentation

(i) Gender – The interests’ needs, wants of males and females differ at many levels.

Marketers focus on different marketing and communication strategies for both.

This type of segmentation is seen in cosmetics, clothing and jewelry industry.

(ii) Age – sometimes segmenting market according to the age group is a great

strategy because it helps in personalized marketing. Not all products in the market

are to be used by all the age groups. Segmenting the market is very important

according to the age group because marketers create better marketing and

communication strategies.

(iii) Income – This type of segmentation decides the type of target audience, examples

we have high income, middle income and low income.

(iv) Place – This means providing your customers with the right area to access the

product or service. A good place determines with the target audience and how

easily they can access the product. Availability of resources means the place is

good and products or services will move very fast.

(v) Occupation – This type of segmentation influences the type of purchase a person

wants to make.

Criteria for effective segmentations

(i) Measurable and obtainable – characteristics of segments should be measurable

and obtainable in terms of data.

(ii) Relevant – If the segment is small then the data will not be relevant
 (iii) Accessible – A segment should be accessible to a company or an organization.

(iv) Substantial – Required returns should be substantial

(v) Unique – A market segment should be unique

Essays, UK. (November 2018). Requirements For Effective Segmentation Marketing Essay.

Retrieved from https://www.ukessays.com/essays/marketing/ requirements-for-effective-

segmentation-marketing-essay.

5. Discuss the factors that influence consumer behavior

(i) Physiological factors – The psychology of a human plays a very important

goal when it comes to consumer behavior. Some of the factors include:

Motivation, perception, learning, Attitude and beliefs

(ii) Social factors – the social factors influence the buying behavior of an

individual or person. Some of the social factors include: family, reference

groups, roles and status.

(iii) Cultural factors – set of norms, behaviors and values at a very early stage

of childhood. Different behavioral factors and patterns are developed:

culture, subculture and social class.

(iv) Personal factors – different factors influence individuals buying decisions.

These factors include: Age, Income, Occupation and Lifestyle

(v) Economic factors – Economic factors have a significant effect in decision

buying of an individual. Some economic factors include: personal income,

family income, income expectations, consumer credit, liquid assets of the

consumer, savings.

References:
Bearden, B. Ingram, T., LaForge, B. (2003). Marketing Principles and Perspectives (4th ed.) New

York: McGraw-Hill. Retrieved January 29, 2009.

Caywood, C., Schultz, D.E. & Wang, G.P. 1991. Integrated marketing communications: A

survey of national customer goods advertising. Colorado: Northwestern University Report.

CAT II

1. Describe the new product adoption process

(i) Awareness phase- This is an understanding of the product. The

consumer has heard of it and has general idea of the whole product.

(ii) Interest phase- This is a progression from awareness. The consumer

generates some form of curiosity about the new product and considers

it as a solution.

(iii) Evaluation phase- This is a progression beyond interest, where the

potential consumer has gathered basic information about the new

product and how it works.

(iv) Trial phase- This is the first real interaction with the product. The

product experience will either change their thinking or the view about

the product.

(v) Adoption phase- This is the overall product category, where either the

firm/ brand adopts the whole idea. This is not an individual category

but a firm or a brand as a whole.

https://www.marketingstudyguide.com/product-adoption-process-plc/
 2. Discuss the product life cycle (PLC) and the strategies applicable on each

stage

(i) Introduction- This is the first stage where the product enters a life

cycle. It usually features frequent product modification, limited

distributions and heavy promotion. The failure rate at this stage is very

high.

(ii) Growth – after the product has passed the first stage it enters the

second stage which is the growth stage. This is the stage which mainly

focuses on brand advertisements. Marketing the new product for

product growth. Distribution becomes a major key during growth

stage.

(iii) Maturity- This is where sales continue to mount and rise but at a

decreasing rate. Most products which have been in the market for a

long time are in this stage.

(iv) Decline – when sales and profits fall, the product has reached the

decline stage. It contains two factors: the rate of change in consumer

tastes and the rate at which new product enters the market.

https://opentextbc.ca/businessopenstax/chapter/the-product-life-cycle/

3. Explain the following terms

(a) Stages of the consumer buying process

1. Problem recognition- the customer must have a reason to believe

what they want, where they want to be or how they perceive

 themselves. As a consumer you have to create a problem about

the product you are looking for.

2. Information search- after problem recognition, the customer

search process begins. They want to look for a solution from an

issue.

3. Evaluation of alternatives- This is where a customer makes sure

the product he/she is looking for is not the wrong product. The

customer evaluates other products to make sure it’s the right

product.

4. Purchase decision- After evaluation alternative this is where the

customer makes a decision whether to purchase the item or not.

5. Purchase- After purchase decision the customer now decides to

purchase the item.

6. Post- purchase Evaluation- After purchase the customer now

evaluates the product to make sure it’s the right product which

he/she purchased.

https://www.business2community.com/consumer-marketing/six-stages-consumer-buying-

process-market-0811565

(b) Types of consumer buying behavior

(i) Routine response- This is where a product is purchased without a

second thought because the consumer is either familiar with the

item severally.
 (ii) Limited decision making – This is where you purchase

something considering your budget.

(iii)Extensive decision making-This is a research done before

purchasing a product

(iv) Impulsive buying.-This are consumers who buy products without

a budget for those items.

4. How are services different from products?

Services Products

Intangible Tangible

No transfer of ownership There is transfer of ownership

Complicated Very simple and easy

Variability is Diversified Variability is Identical

Services cannot be returned back once Products can be returned back once they

they are paid are paid.

5. What are the steps in the marketing research process?

(i) Define the problem or opportunity – the first stage of research process

is defining the problem or the opportunity. This enables the researcher

to be able to find solutions to the problem.

(ii) Develop your marketing research plan- the second stage is to develop

the marketing research plan. This is done so as to follow a certain

criteria when doing the research.

 (iii) Collect relevant data and information – After developing a marketing

research plan you then collect relevant data and information about the

research you are doing

(iv) Analyze data and report findings- After collecting data and

information this is the stage that you analyze data and report findings

for your entire report information.

(v) Put your research into action – This is the final stage where you put the

solution you found about the whole research.

6. Describe the various types of distribution channels and the factors that

influence the choice of distribution channels.

Types of channel Distributions

(i) Direct selling- Direct selling is the marketing and selling of products

directly to consumers away from a fixed retail location

(ii) Selling through intermediaries- A marketing channel where

intermediaries such as wholesalers and retailers are utilized to make a

product available to the customer is called an indirect channel.

The most indirect channel you can use (Producer/manufacturer –>

agent –> wholesaler –> retailer –> consumer) is used when there are

many small manufacturers and many small retailers and an agent is

used to help coordinate a large supply of the product.

(iii) Dual distribution- Dual distribution describes a wide variety of

marketing arrangements by which the manufacturer or wholesalers

uses more than one channel simultaneously to reach the end user. They
 may sell directly to the end users as well as sell to other companies for

resale. Using two or more channels to attract the same target market

can sometimes lead to channel conflict.

An example of dual distribution is business format franchising, where

the franchisors, license the operation of some of its units to franchisees

while simultaneously owning and operating some units themselves.

(iv) Reverse channels- This one goes in the reverse direction and may go

from consumer to intermediary to beneficiary. Think of making money

from the resale of a product or recycling.

Reference

https://courses.lumenlearning.com/boundless-marketing/chapter/marketing-channels-in-the-

supply-chain/

Factors that influence the choice of distribution channels

(i) Unit value of the product

(ii) Standardized or customized products

(iii) Perishability

(iv) Technical nature

(v) Number of buyers

(vi) Types of buyers

(vii) Buying habits

(viii) Buying quantity

References:

Bearden, B. Ingram, T., LaForge, B. (2003). Marketing Principles and Perspectives (4th ed.) New

York: McGraw-Hill. Retrieved January 29, 2009.

Caywood, C., Schultz, D.E. & Wang, G.P. 1991. Integrated marketing communications: A

survey of national customer goods advertising. Colorado: Northwestern University Report.