BCOM HONS MM - Advanced Strategic Marketing Management

Bachelor of Commerce
(Honours)
in Marketing Management
ADVANCED STRATEGIC MARKETING

MANAGEMENT
Module Guide
Copyright © 2021
MANCOSA
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Bachelor of Commerce (Honours)
in Marketing Management
ADVANCED STRATEGIC MARKETING MANAGEMENT
Preface.................................................................................................................................................................... 5
Unit 1: The Nature of Strategic Marketing ............................................................................................................ 15
Unit 2: The Southern African Marketing Environment .......................................................................................... 29
Unit 3: Identifying Market Opportunities ............................................................................................................... 45
Unit 4: Developing Market Opportunities ............................................................................................................. 59
Unit 5: Identifying and Targeting Attractive Market Segments ............................................................................. 74
Unit 6: Sustainable Competitive Advantage (Sca) ............................................................................................... 90
Unit 7: Productivity and Service Innovation ......................................................................................................... 106
Unit 8: Branding and Positioning ........................................................................................................................ 119
Unit 9: The Marketing Plan.................................................................................................................................. 139
Unit 10: Implementation Of Marketing Strategies................................................................................................ 153
Unit 11: Marketing Metrics .................................................................................................................................. 166
Unit 12: Marketing: an Ethical And Sustainable Approach .................................................................................. 180
i
Advanced Strategic Marketing Management
List of Contents
List of Figures and Illustrations
Figure 1.1 Levels of strategy development ................................................................................................18
Figure 1.2: Strategies for achieving competitive advantage ......................................................................21
Figure 2.1: Dual structure of the country's economy..................................................................................31
Figure 2.2 South Africa population breakdown by province .......................................................................36
Figure 2.3 South Africa population breakdown by race/ethnic group .........................................................36
Figure 2.4 South Africa languages.............................................................................................................37
Figure 2.5: Total population by province ....................................................................................................38
Figure 2.6: South Africa population growth by province between 2001 and 2011 .....................................39
Figure 3.1 The three-tiered operating environment and outline for this chapter ........................................47
Figure 3.2: Porter’s Five Forces Model ......................................................................................................52
Figure 3.3: Steps when conducting a ratio analysis ...................................................................................55
Figure 4.1: Market potential unpacked.......................................................................................................62
Figure 4.2: Customer buying process ........................................................................................................63
Figure 4.3: Customer and product adoption forces ....................................................................................64
Figure 4.4: Categories of innovation ..........................................................................................................65
Figure 4.5: Product life cycle Stages of the PLC........................................................................................66
Figure 4.6: Market opportunity analysis .....................................................................................................70
Figure 4.7: GE’s strategic planning grid .....................................................................................................71
Figure 5.1 Segmentation, targeting, and positioning (STP) as a process ..................................................76
Figure 5.2 The three stages of strategic positioning ..................................................................................86
Figure 6.1: Steps in obtaining a sustainable competitive advantage .........................................................93
Figure 6.2: Model for Global competitive advantage..................................................................................94
Figure 6.3: Competitive advantages in the competitive environment .........................................................95
Figure 6.4 Competitive advantages through co-operation .........................................................................96
Figure 6.5: Different forms of co-option .....................................................................................................97
1 MANCOSA – Bachelor of Commerce Honours in Marketing Management

Figure 6.6: Business growth options ..........................................................................................................99
Figure 6.7: Generic testing criteria for different strategies .......................................................................102
Figure 7.1: The role of innovation ............................................................................................................110
Figure 7.2: The innovation development process ....................................................................................111
Figure 7.3 The innovation process...........................................................................................................113
Figure 7.4: Finding insight........................................................................................................................114
Figure 7.5 Total innovation management model ......................................................................................116
Figure 8.1: Holistic branding ....................................................................................................................122
Figure 8.2: The BrandAdvantageTM model .............................................................................................125
Figure 8.3 Examples of category hierarchies ...........................................................................................126
Figure 8.4 Points-of-parity and points-of-difference .................................................................................127
Figure 8.5: Perceptional mapping ............................................................................................................130
Figure 8.6 The brand alignment process .................................................................................................131
Figure 8.7 International brand valuation, 2018 ........................................................................................134
Figure 8.8: Building a brand portfolio .......................................................................................................135
Figure 8.9 Process to renew brand portfolio ............................................................................................136
Figure 8.10 The brand relationship spectrum ..........................................................................................137
Figure 9.1 Marketing plan ........................................................................................................................141
Figure 9.2 Market intelligence ..................................................................................................................144
Figure 9.3 Market opportunity analysis ....................................................................................................145
Figure 9.4 Types of budgets ....................................................................................................................149
Figure 10.1: Internal marketing segmentation .........................................................................................155
Figure 10.2: A model for interdepartmental internal marketing collaboration ...........................................157
Figure 10.3: Pressures for change...........................................................................................................160
Figure 10.4: Environmental variety and marketing centralization ............................................................162
Figure 11.1: The balanced scorecard ......................................................................................................172
Figure 11.2: Marketing-related linkages in the balanced scorecard .........................................................173
MANCOSA – Bachelor of Commerce Honours in Marketing Management 2

Figure 11.3: Top metric by category ........................................................................................................176
Figure 11.4: Marketing dashboard views .................................................................................................177
Figure 12.1: Pyramid of recourse channels .............................................................................................188
List of Tables
Table 1.1: Examples of a market-focused approach to corporate-level marketing ....................................19
Table 1.2: Marketing orientations...............................................................................................................24
Table 1.3 A comparison between strategic marketing and operational marketing .....................................25
Table 1.4: Outline of a strategic marketing plan ........................................................................................26
Table 2.1 South Africa’s HDI trends...........................................................................................................32
Table 2.2 Estimates of the Human Development Index .............................................................................33
Table 2.3: HIV estimates for South Africa ..................................................................................................40
Table 3.1 social/demographic factors ........................................................................................................50
Table 3.2 Technological factors .................................................................................................................50
Table 3.4: Marketing audit .........................................................................................................................54
Table 5.1: Business market segmentation .................................................................................................80
Table 5.2 Assessing segment attractiveness – an example ......................................................................83
Table 5.3 Assessing relative competitive positioning – an example ..........................................................84
Table 5.4 Selecting segment strategies .....................................................................................................85
Table 6.1: Evaluation tool for assessing suitability criteria .......................................................................102
Table 7.1 Classifying ideas ......................................................................................................................115
Table 8.1 Desirability and deliverability criteria POD ...............................................................................127
Table 8.2 Product and service differentiation ...........................................................................................128
Table 8.3 Six question toolkit for identifying product-driven differentiators ..............................................129
Table 9.1 Marketing mix decisions...........................................................................................................147
Table 9.2 The South African social media landscape ..............................................................................147
Table 9.3: Major obstacles to developing and implementing marketing plans .........................................150
Table 10.1: The seven levels of organizational consciousness ...............................................................159

Table 10.2: Comparison of organisational systems, style, and characteristics ........................................161
Table 10.3: Advantages and disadvantages of expansion.......................................................................163
Table 11.1: Leading and lagging metrics .................................................................................................175

Preface
A. Welcome
Dear Student
It is a great pleasure to welcome you to Advanced Strategic Marketing Management (ASMM8). To make sure
that you share our passion about this area of study, we encourage you to read this overview thoroughly. Refer to
it as often as you need to, since it will certainly make studying this module a lot easier. The intention of this module
is to develop both your confidence and proficiency in this module.
The field of Advanced Strategic Marketing Management is extremely dynamic and challenging. The learning
content, activities and self- study questions contained in this guide will therefore provide you with opportunities to
explore the latest developments in this field and help you to discover the field of Advanced Strategic Marketing
Management as it is practiced today.
This is a distance-learning module. Since you do not have a tutor standing next to you while you study, you need
to apply self-discipline. You will have the opportunity to collaborate with each other via social media tools. Your
study skills will include self-direction and responsibility. However, you will gain a lot from the experience! These
study skills will contribute to your life skills, which will help you to succeed in all areas of life.
We hope you enjoy the module.
MANCOSA does not own or purport to own, unless explicitly stated otherwise, any intellectual property rights in or
to multimedia used or provided in this module guide. Such multimedia is copyrighted by the respective creators
thereto and used by MANCOSA for educational purposes only. Should you wish to use copyrighted material from
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copyright owner.

B. Module Overview
• The module is a 15 credit module at NQF level 8
C. Exit Level Outcomes and Associated Assessment Criteria of the Programme

Exit Level Outcomes Associated Assessment Criteria
• Facilitate capacity building and human resource • Capacity building and Human Resource
development in order to promote and accelerate development are examined to understand how
economic development, economic development may be promoted and
accelerated.
• Empower students with advanced Marketing • Advanced management skills and competencies
management skills and competencies are empowered to students to understand how
necessary to function in and contribute to the functioning of the private and public sector
advancement of private and public sector organisations can contribute to the South African
organisations, economy.
• Contribute to the supply of managerial and • The supply of managerial and professional skills is
professional skills in the Southern African analysed to understand the contribution made to
Development Community the South African Economy.
• Cater for the career and economic needs of • The economic needs of students in full-time is
students who are in full-time employment analysed to understand how their life-learning
careers can be catered for.
• Contribute to research activity resulting in social • Research activity is evaluated to understand how it
development can contribute to the social development.
• Display an understanding of designing, • Marketing strategies are evaluated to understand

implementing and evaluating Marketing how they can be applied to the business
Strategies and their application in the business environment.
environment.
• Have the ability to formulate strategic planning • The formulation of strategic planning is assessed to
as a primary tool in business development. understand how it can be applied as a cornerstone
tool in business development.

• Identify and critically evaluate marketing issues • Strategic Marketing models, techniques and
within various environments, utilising a wide concepts are evaluated to understand how they can
variety of marketing techniques, concepts and provide marketing solutions.
models.
• Assess the relevance of, and opportunities • Contemporary marketing issues are assessed to
presented by, contemporary marketing issues determine how they contribute to innovation and to
within any given scenario including innovations seize the marketing opportunities available.
in marketing.
• Formulate and present a creative, customer- • Formulation of competitive strategies is assessed to

focused and innovative competitive strategy for determine how they support investment decisions,
any given context, incorporating relevant strategic control and effective planning.
investment decisions, appropriate control
aspects and contingency plans.
• Promote and facilitate the adoption and • The application of the marketing mix variables,
maintenance of a strong market and customer marketing concepts, the Ansoff matrix, the Boston
orientation with measurable marketing metrics Consulting Group models is analysed to
understanding the product portfolio growth and
customer orientation.

D. Learning Outcomes and Associated Assessment Criteria of the Module

LEARNING OUTCOMES OF THE MODULE ASSOCIATED ASSESSMENT CRITERIA OF THE MODULE
• Identify and critically evaluate marketing • Marketing strategy is conceptualised and illustrated as an
issues within various environments, activity effected at various levels in the organisation to
utilising a wide variety of marketing understand the integral role played by strategic
techniques, concepts and models. management.
• Demographic variables of the South African marketing
environment are scrutinized in order to specify marketing
action in response to its unique needs
• The operating environment is analysed using a variety of
marketing tools and techniques in order to establish
potential business opportunities and threats
• Marketing and industry competitiveness is analysed using
a variety of established marketing tools, techniques,
concepts, and models in order to shade light on the
inherent key success factors.
• Assess the relevance of, and • Market potential is identified, defined, quantified, and
opportunities presented by, valued in order to established its worthy to marketing effort
contemporary marketing issues within • Market opportunities are established through the
any given scenario including innovations evaluation of external, financial, and internal analysis in
in marketing. order to rank viable opportunities to choose from.
• New products and services development is discussed as a
means to attain and retain sustained competitive
advantage
• Product and service innovation is analysed in order to
understand how opportunity can be identified, evaluated,
incubated, and natured
• Identify and critically evaluate various • Market segmentation and targeting are discussed as key
options available when given constraints marketing imperatives that precede positioning as a
and apply competitive positioning means to gain insight into customer centred marketing
strategies, justifying any decisions taken. • Target markets are designed based on their relative
competitiveness and segment attractiveness to teach
strategy efficiency and effectiveness
• Differentiation is described as one of the competitive

positioning strategies to add an understanding on how

uniqueness cultivate a sustainable competitive edge
• Brand building is established as a means to achieve
competitive advantage
• Perceptual map utilisation is exposed as an option to
position or reposition brands.
• Product life cycles are discussed as they naturally give
birth to new products to understand the significance of
product and service renewal
• Formulate and present a creative, • The bases for sustainable competitive advantage are
customer-focused and innovative discussed at both micro and macro-level to understand
competitive strategy for any given how organisations can attain enduring market dominance
context, incorporating relevant • Marketing strategies aligned to the respective stages of
investment decisions, appropriate the product life cycle are formulated in response to the
control aspects and contingency plans. evolving needs of consumers
• Strategies specific to growing, mature and declining
markets are explored to provide insight into
investment/disinvestment decisions
• Strategy suitability, feasibility and acceptability is tested as
a contingency measure against strategy failure
• Demonstrate an understanding of the • Marketing planning is explored given the guidance it

direction and management of marketing provides to strategic direction and strategy management
activities as part of the implementation of thereafter
strategic direction, taking into account • Measures to annul obstacles to marketing planning are
business intelligence requirements, investigated and counter action prescribed
marketing processes, resource markets • Business intelligence accumulation and integration into the
and the company vision. marketing planning processes is discussed as a measure
to keep track of the company’s vision
• Internal marketing, leadership, organisational structure
and culture are discussed as the key considerations to
inform on how successful implementation of marketing
strategies is achieved
• Promote and facilitate the adoption and • The evolution of marketing metrics is tracked from
maintenance of a strong market and traditional to market-based and asset-based metrics to
show how marketing practitioners are being forced to be

customer orientation with measurable accountable.

marketing metrics.
• Integrated marketing performance measurement is
explored by means of market dashboards to gain insights
on how visibility of marketing efforts can be enhanced
• Marketing metrics are employed in order to monitor the

performance of the marketing strategies deployed
E. Learning Outcomes of the Units

You will find the Unit Learning Outcomes on the introductory pages of each Unit in the Module Guide. The Unit
Learning Outcomes lists an overview of the areas you must demonstrate knowledge in and the practical skills you
must be able to achieve at the end of each Unit lesson in the Module Guide.
F. Notional Learning Hours

Notional Learning Hour Table for the Programme
Learning time
Types of learning activities
%
Lectures/Workshops (face to face, limited or technologically mediated) 25
Tutorials: individual groups of 30 or less 0
Syndicate groups 0
Practical workplace experience (experiential learning/work-based learning etc.) 0
Independent self-study of standard texts and references (study guides, books, journal 50
articles)
Independent self-study of specially prepared materials (case studies, multi-media, etc.) 15
Other: Online 10
TOTAL 100

G. Acronyms
AIDA Attention/Awareness, Interest, Desire, Action.
B2B Business-to-Business
B2C Business-to-Consumer
CLV or CLTV Customer Lifetime Value
CRM Customer Relationship Management
SWOT Strengths, Weaknesses, Opportunities, Threats
ROI Return On Investment
H. How to Use this Module

This Module Guide was compiled to help you work through your units and textbook for this module, by breaking
your studies into manageable parts. The Module Guide gives you extra theory and explanations where necessary,
and so enables you to get the most from your module.
The purpose of the Module Guide is to allow you the opportunity to integrate the theoretical concepts from the
prescribed textbook and recommended readings. We suggest that you briefly skim read through the entire guide
to get an overview of its contents. At the beginning of each Unit, you will find a list of Learning Outcomes and
Associated Assessment Criteria. This outlines the main points that you should understand when you have
completed the Unit/s. Do not attempt to read and study everything at once. Each study session should be 90
minutes without a break
This module should be studied using the prescribed and recommended textbooks/readings and the relevant
sections of this Module Guide. You must read about the topic that you intend to study in the appropriate section
before you start reading the textbook in detail. Ensure that you make your own notes as you work through both the
textbook and this module. In the event that you do not have the prescribed and recommended textbooks/readings,
you must make use of any other source that deals with the sections in this module. If you want to do further reading,
and want to obtain publications that were used as source documents when we wrote this guide, you should look
at the reference list and the bibliography at the end of the Module Guide.
I. Study Material
The study material for this module includes tutorial letters, programme handbook, this Module Guide, a list of
prescribed and recommended textbooks/readings, which may be supplemented by additional readings.

J. Prescribed and Recommended Textbook/Readings

There is at least one prescribed and recommended textbooks/readings allocated for the module.
The prescribed and recommended readings/textbooks presents a tremendous amount of material in a simple,
easy-to-learn format. You should read ahead during your course. Make a point of it to re-read the learning content
in your module textbook. This will increase your retention of important concepts and skills. You may wish to read
more widely than just the Module Guide and the prescribed and recommended textbooks/readings, the
Bibliography and Reference list provides you with additional reading.
The prescribed and recommended textbooks/readings for this module is:

Prescribed
• Venter, P., & Jansen van Rensburg, M. (2018). Strategic marketing: theory and application for competitive
advantage. 2nd Edition. Oxford. Cape Town.
Recommended
• Ferrell, O. & Hartline, M. (2014). Marketing strategy. Mason, OH: South-Western/Cengage Learning.
• Hooley, G. J.; Piercy, N. F., Nicoulaud, B., & Ruddy, J. (2017). Marketing strategy and competitive
positioning. 6th Edition. Pearson.
• Journals.co.za. (2019). [online] Available at:
https://journals.co.za/docserver/fulltext/sabr/12/2/sabr_v12_n2_a1.pdf?expires=1564662110&id=id&accnam
e=guest&checksum=EB8C1CE9110C87BAC994C83EA822ACAF [Accessed 1 Aug. 2019].
https://journals.co.za/docserver/fulltext/mfsa1/2010/10/mfsa1_oct_nov_2010_a17.pdf?expires=1564663746
&id=id&accname=guest&checksum=5B44D172F0C8FE4AD7DE0288E43A8E86 [Accessed 1 Aug. 2019].
https://journals.co.za/docserver/fulltext/mfsa/11/3/mfsa_v11_n3_a8.pdf?expires=1564663972&id=id&accna
me=guest&checksum=B7DF8CC167F5D00E2E7111CFA718717C [Accessed 1 Aug. 2019].
• DATAMONITOR (FIRM). (2009). Burger King case study: targeting the Superfan as a means of retaining
growth in the fast food market. [Place of publication not identified], Datamonitor.
• DATAMONITOR (FIRM). (2009). The Campbell Soup Company case study: effective positioning in an
economic downturn. [Place of publication not identified],
• Datamonitor. http://www.library.auckland.ac.nz/eproducts/ebooks/Datamonitor/cscm0220.pdf

K. Special Features
In the Module Guide, you will find the following icons together with a description. These are designed to help you
study. It is imperative that you work through them as they also provide guidelines for examination purposes.
Special Feature Icon Explanation
The Learning Outcomes indicate aspects of the particular Unit you have
LEARNING to master.
OUTCOMES
The Associated Assessment Criteria is the evaluation of the students’

ASSOCIATED
understanding which are aligned to the outcomes. The Associated
ASSESSMENT
Assessment Criteria sets the standard for the successful demonstration
CRITERIA
of the understanding of a concept or skill.
A Think Point asks you to stop and think about an issue. Sometimes you
THINK POINT are asked to apply a concept to your own experience or to think of an
example.
You may come across Activities that ask you to carry out specific tasks.
In most cases, there are no right or wrong answers to these activities.
ACTIVITY
The purpose of the activities is to give you an opportunity to apply what
you have learned.
At this point, you should read the references supplied. If you are unable
READINGS to acquire the suggested readings, then you are welcome to consult any
current source that deals with the subject.
PRACTICAL Practical Application or Examples will be discussed to enhance
APPLICATION understanding of this Module.
OR EXAMPLES
KNOWLEDGE You may come across Knowledge Check Questions at the end of each
CHECKS Unit in the form of Knowledge Check Questions (KCQ’s) that will test
QUESTIONS your knowledge. You should refer to the Module Guide or your
textbook(s) for the answers.

You may come across Revision Questions that test your understanding
REVISION
of what you have learned so far. These may be attempted with the aid
QUESTIONS
of your textbooks, journal articles and Module Guide.
Case Studies are included in different sections in this Module Guide.
CASE STUDY This activity provides students with the opportunity to apply theory to
practice.
You may come across links to Videos Activities as well as instructions
VIDEO ACTIVITY on activities to attend to after watching the video.

Unit
1: The Nature of Strategic Marketing

Unit Learning Outcomes
CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:
1.1 Introduction • Introduce topic areas for the unit
1.2 The approach of this study guide • Develop the definition of strategy from different approaches
1.3 Marketing at the different levels of • Appraise how strategy is effected at different strategic levels
strategy development
• Distinguish strategy from marketing effort
1.4 Strategic marketing • Describe strategic marketing and establish its origin
• Interrogate various marketing activities that formulate the

strategic marketing process
• Assess the role of the marketing function in strategic

marketing
1.5 Conclusion • Summarise topic areas covered in unit
1.6 Summary
Prescribed / Recommended Readings
Prescribed Textbook
• Venter, P., & Jansen van Rensburg, M. (2018). Strategic marketing: theory and
application for competitive advantage. 2nd Edition. Oxford. Cape Town.Chapter
1, P 5 – 22.
Recommended Textbook
• Hooley, G. J.; Piercy, N. F., Nicoulaud, B., & Ruddy, J. (2017). Marketing
strategy and competitive positioning. 6th Edition. Pearson. Chapter 1, P6 – 25
& Chapter 2, P28 – 50.

1.1 Introduction
Without a clear strategy, an organisation will drift aimlessly and will fail to assert itself as a renowned competitor in
the marketplace. Strategy can be deployed at different levels of the business, corporate, business, and tactical.
At the highest level, corporate strategy provides direction, for example, deciding in which business an organisation
should operate. This paves the way for strategic marketing to create competitive advantage through the
deployment of aligned marketing strategy within the business units.
This unit sets off by defining strategy from different viewpoints before exploring the strategy management process
at different levels.
1.2 The approach of this study guide

The study guide will start most units by providing definitions to key terms. In this unit, we will endeavour to describe
the term strategy from different views. For example, in defining strategy, Henry Mintzberg identifies ‘5 Ps for
Strategy’ – plan, ploy, pattern, position, and perspective.
1.2.1 Strategy as plan

A strategy is a measured plan of action that culminates from a thorough analysis of the business environment. In
the context of strategic marketing, the typical outcome of the strategic marketing planning process is a strategic
marketing plan, (Venter & Jansen van Rensburg, 2018)
1.2.2 Strategy as ploy

For a strategy to be a ploy, the deployed strategy outwits competition in search of competitive advantage.
1.2.3 Strategy as pattern

Indeed, in some organisations strategy seem as unintended and emergent rather than a consciously planned and
executed action. In such instances, strategy is identified only after it has been executed and is, therefore, a ‘pattern
in a steam of actions’. However, as we will discover in the next units, a strategy ought to be a consciously planned
endeavour.
1.2.4 Strategy as position

This view requires that an organisation aptly position itself for competitive advantage. The art of positioning requires
careful selection of lucrative market segments to attract and serve. Ideally, resources should be focused on a place
in the environment where strategic decision-makers believe they will have the best effect.

1.2.5 Strategy as perspective

This definition of strategy looks within, suggesting that strategy may be viewed differently from individual to
individual. A strategy may be dependent on who, why and how it is deployed. Market-oriented companies, for
example, strongly believe in developing winning marketing strategies. A strategy is therefore not only a rational,
economic process but also a product of the individuals that make strategy and their personal influences.
Think Point
Many marketing and business strategies emerged from the great wars. What could
be the reason?
What is strategy?
Strategy arose from a military context: “The forces available must be employed with such skill that even in the
absence of absolute superiority, relative superiority is attained at the decisive point” - Karl von Clausewitz, On War
(2015).
1.3 Marketing at the different levels of strategy development

Marketing strategists formulate and implement enterprise strategy at three different levels: Corporate level,
Business unit level, and Functional or departmental level.
Figure 1Figure 1.1 Levels of strategy development

Image Source: Can stock photo - csp 2936090 hierarchical levels

1.3.1 Corporate-level strategy

Corporate-level strategy occupies the highest level of strategic decision making and covers actions such as dealing
with the objective of the firm, acquisition and allocation of resources and coordination of strategies of various
strategic business units (SBUs) for optimal performance. Top-level managers such as the board of directors or
CEO are responsible for corporate-level strategies. Executives make decisions on the scale (size) and scope (level
of diversification, geographical scope, and vertical integration) of the organisation.
To understand the essence of corporate-level strategies business executives have to provide answers to the
following fundamental questions:
• Which businesses are we in and which businesses should we be in?
• What are our basic directions for the future?
• What is our culture and leadership style?
• What is our attitude to strategic change? What should it be?
Corporate-level marketing may focus on different stockholders. (See Table 1.1 to view a market-focused approach
to corporate-level marketing aimed at various stockholders.)
Table 1Table 1.1: Examples of a market-focused approach to corporate-level marketing

Corporate Traditional corporate Corporate market What does the corporation have
function Management to market
Corporate Corporate governance & For employees Itself as an inspiring and safe
Strategy board employer
Stakeholder For corporate Itself as a contributor to the
management citizens welfare of society
Finance Financial markets For stock investors Itself as an attractive stock
investment option
Investment reporting For corporations with Openness, integrity, and
integrity transparency of reports on own
actions
Corporate Media communications For top management Dynamic and fluently-presenting
Communications personalities top managers
Investor relations For word-of-mouth Itself as everyday conversation
buzz topic, recommendations, and
hype
Marketing Products For products and Attractive and innovative,
services products and services
Customer relationships For research and Itself as an innovative, committed
development partner and trustworthy research and
development partner
Source: Adapted from Parvinnen et al., (2007:134)

Activity 1.1
The board of directors of an organisation typically makes corporate-level strategic decisions

and the focus is on growing shareholder value. Growing the business is a favourite decision
endorsed by many boards of directors.
In growing the business in scale and scope, several strategic options are available. Outline
how an organisation such as McDonald’s can achieve growth through the following
strategies.
• Market penetration
• Product development
• Market development
Answer to Activity 1.1

A large corporation can deploy a number of but not all strategies at once such as market penetration, product
development, and market development with the aim of achieving sales growth.
The organisation focuses on its existing markets with its existing products and grow the market, its sales,
and its share of the market. Business growth will manifest when traffic increases because of incentives
such as discounts being offered at McDonald’s.
New products or brands are developed for existing markets as a strategy to increase sales. McDonald’s,
which predominantly serves beef menus, may incorporate fish and mutton in their offering.
Existing products are used to enter new markets, such as new geographical areas or previously
untargeted market segments. As an example, McDonald’s may seek growth by entering countries such
as Swaziland.
1.3.2 Business-level strategy

At a business–level strategy, the focus is on how an organisation can compete successfully in a chosen industry
and achieving competitive advantage. Decisions at this level are constrained by the direction that the organisation
wants to take, and parameters of the corporate-level strategy. Senior managers are responsible for strategies at
this level and should try to match the organisation’s internal capabilities and external relationships. When a firm’s
capabilities allow it to serve customers’ needs better than the competition, it is said to have a competitive, or
differential, advantage (Hooley; Piercy; Nicoulaud, & Ruddy, 2017:34).

For the sake of a more focused approach, the business leaders prefer to unbundle the business into separate
business units, subsidiaries, divisions, product lines, or other profit centres within the parent firm commonly referred
to as strategic business units (SBU).
Ferrell & Hartline (2014:34) believe that larger firms often find it beneficial to devise separate strategies for each
SBU. Business-unit strategy determines the nature and future direction of each business unit, including its
competitive advantages, the allocation of its resources, and the coordination of the functional business areas.
In efforts to attain a competitive edge over their competitor, business-level managers must ask the following
questions:
• How do we compete successfully? What is our sustainable competitive advantage?
• How can we innovate?
• Who are our customers?
• What value do we add? Where? Why? How?
Many of the issues above are reflected in the business’s statements of strategic direction, such as the mission
statement. One of the most widely accepted frameworks of business strategy in Michael Porter’s model of generic
strategies (see Figure 1.2).
Figure 2Figure 1.2: Strategies for achieving competitive advantage

Source: Learnmarketing.net. (2019)

Case Study
Shoprite Holdings Integrated Report 2017

While the Group’s primary business is food retailing, our offering extends to a broad range
of goods and services including household products, furniture, pharmaceuticals, and
financial services, amongst others. At the heart of our offering is an unwavering dedication
to providing the lowest prices to people of all income levels across Africa.
We achieve this by pursuing efficiency in everything we do. Our advanced distribution

centres and sophisticated supply line infrastructure give us greater control over our
operations. This empowers us to overcome economic challenges without compromising on
quality.
By setting the conditions for enduring success, we can continue to provide affordable food
to our communities, invest in social upliftment and contribute to the African economy − all
while creating value for all our stakeholders.
Source: http://www.sharedata.co.za/data/000647/pdfs/SHOPRIT_ar_jun17.pdf
With reference to the above extract and in conjunction with Figures 1.2 & Figure 1.3 in your
textbook, analyse how ShopRite intends to gain a competitive advantage in the African retail
market.
1.3.3 Marketing strategy

At this level, the business should develop a strategic marketing plan that clearly explains the segmentation,
targeting, and positioning strategies of the business or business unit. In marketing strategy, the process focuses
on selecting one or more target markets and developing a marketing program that satisfies the needs and wants
of members of that target market. According to Dibb, Simkin, Pride & Ferrell, (2012), a marketing strategy involves
knowing how to group customers sensibly into homogenous market segments; determining which to target; and
seeking superiority over rivals. The marketing strategy should be set in the context of overall corporate strategy,
as it will need to align to and ensure that the overall direction of the organisation is achieved.
1.3.4 Tactical and operational marketing

At the tactical and operational levels, marketing supports the marketing strategy. Tactical and operational activities
comprise of short-term actions that are essential for the implementation of the marketing strategy.
Tactical/operational plans are usually developed in the areas of production, marketing, personnel, finance, and
plant facilities.
The marketing (the 4Ps or 7Ps) is extensively used to set short-term objectives to be achieved. Tactical/operational
plans describe milestones, conditions for success and explain how, or what portion of, a strategic plan will be put
into operation during a given operational period.

1.4 Strategic Marketing

Strategic marketing is key for an organisation to achieve a completive over its competitors. However, before
exploring the concept of strategic marketing, it is fitting to understand the roles of the marketing concept, marketing
philosophy or market orientation.
Think Point
Now that you know what strategy is; what is marketing strategy?
According to Palmatier & Sridhar, (2017), ‘Marketing strategy consists of decisions and actions focused on building
a sustainable differential advantage, relative to competitors, in the minds of customers, to create value for
stakeholders.’
1.4.1 The marketing concept and market orientation

To be able to be attentive to consumer needs, organisations need to move away from the production, product, and
selling concepts, towards marketing concept. The marketing concept manifests in organisations as market
orientation. The marketing philosophy or orientation has progressively evolved over time and the most significant
are captured in Table 1.2.

Table 2Table 1.2: Marketing orientations
Production Product Selling Marketing Societal

concept concept concept marketing
concept
concept
Starting point Factory Product design Factory Market Consumers
Focus Existing Continuous Existing Customer Long-run

products product products needs societal well-
improvement being
Means Mass Attractive Selling and Integrated Focus on

production and product features promoting marketing company
distribution profits,
consumer
wants, and
society’s
welfare
Ends Profits through Profits through Profits through Profits through Profits through
lower higher pricing sales volume customer long-term
production cost for more and satisfaction and sustainability
and higher better product retention
sales volume features
According to Ferrell & Hartline, (2014:46) the defining characteristics of a marketing concept holds that achieving
organisational goals depends on determining the needs and wants of target markets and delivering the desired
satisfactions more effectively and efficiently than competitors do. The societal marketing concept is an extension
of the marketing concept.
Activity 1.2
Why is marketing orientation such an important philosophy in the current marketing

environment?
At its simplest, the marketing concept holds that in increasingly dynamic and competitive markets, the
organisations that are most likely to succeed are those that take notice of customer expectations, wants, and needs
and gear themselves to satisfying them better than their competitors (Ferrell & Hartline, 2014:46).

Market-oriented firms are those that successfully generate, disseminate, and respond to market information. These
firms focus on customer analysis, competitor analysis, and integrating the firm’s resources to provide customer
value and satisfaction, as well as long-term profits (Hooley et al., 2017).
Several components form part of the market orientation:
• Customer orientation
• Competitive orientation
• Inter-functional orientation
• Organisational orientation
• Long-term profit focus
In conjunction with the evolution of marketing philosophies, marketing has also evolved over time from a
transactional approach to a value-based approach. (Venter & Jansen van Rensburg, 2018:14).
1.4.2 What is strategic marketing?

As mention already, strategic marketing is the process of segmenting, targeting, and positioning (STP). As much
as strategic marketing is poised at supporting strategy and identifying opportunities for competitive advantage,
existing products and services need to be managed from day to day – operational marketing. The two endeavours
can be analysed using Table 1.3 below.
Table 3Table 1.3 A comparison between strategic marketing and operational marketing
Strategic marketing Operational marketing
Orientation Analysis-oriented Action-oriented
Time frame Long term Short-term (day-to-day)
Planning perspective Proactive Reactive
Purpose Future perspective – new marketing Implementation – focus on existing

opportunities opportunities
Environment Dynamic Stable
Responsibility CEO, cross-functional Marketing Department, e.g. Brand

Managers
Marketing focus Product-market segments Marketing mix

Strategic marketing summaries to five key characteristics discussed below;

• Strategic marketing is driven by vision, strategic objectives and corporate strategy
• Strategic marketing is driven by customer needs and heterogeneous markets
• Strategic marketing focuses on segments where you can compete successfully
• Strategic marketing is everybody’s problem
• Strategic marketing is dynamic
1.4.3 The strategic marketing process

Strategic Marketing is a process of planning, developing and implementing manoeuvres to obtain a competitive
edge in a chosen niche. The resulting document outlines the road map of how the particular organisation’s
objectives and how to achieve them. The outcome of the strategic marketing process is a marketing plan.
An impression of the strategic marketing process adopted from McDonald is presented in Table 1.4.
Table 4Table 1.4: Outline of a strategic marketing plan

Step Action in the strategic marketing process
1 Start with a mission statement
2 Include a financial summary which illustrates graphically projected revenue and profits for the full planning
period
3 Include a market overview: has the market declined? How does it break down into segments? What is your
share of each? Keep it simple. If you do not have the facts, make estimates. Use life cycles, bar charts, and
pie charts to make it all crystal-clear.
4 Identify the key segments and do a SWOT analysis for each one: outline the major external influences and the
impact on each segment. List the key factors for success; these should be fewer than five. Assess the company
and your competitors out of 10 and multiply each score by a weighted factor for each critical success factor
(CSF). E.g. CSF 1 = 60, CSF 2 = 25, CSF 3 = 10, and CSF 4 = 5.
5 Make a brief statement about the issues that have to be addressed in the planning period
6 Summarise the SWOT using a portfolio matrix in order to illustrate the important relationships between your
key products and markets
7 List your assumptions
8 Set objectives and strategies
9 Summarise your resource requirements for the planning period in the form of a budget
Source: Adapted from McDonald, 2006:393.

Do an internet search and come up with an alternative to McDonald, (2006:393) strategic

marketing process
1.4.4 The role of the marketing function

Although previous discussions indicate that strategic marketing is the responsibility of the CEO and is an
interdisciplinary activity, the marketing function plays a leading role in the strategic marketing process. In its
mediating role, the marketing function is responsible for:
• Understanding marketing dynamics
• Identifying potential markets, segments, and customers
• Quantifying and qualifying the needs of defined customer groups (segments) within identified markets
• Determining value propositions to meet segment needs
• Communicating value propositions internally to employees and externally to segments
• Playing an appropriate part in delivering value propositions (marketing usually only has direct control over
marketing communications)
• Monitoring value delivered to segments
1.5 Conclusion
The unit demonstrates that strategic marketing is a vital component of an organisation’s business strategy.
Although the CEO is ultimately responsible for strategic marketing, the marketing function plays a crucial role in
understanding markets, developing value propositions, selling value propositions internally and externally, and
measuring value delivered in chosen target markets. The organisation must prudently deploy its resources towards
the most lucrative market segments.
1.6 Summary
After analysing strategy and its planning at different levels of the business, the next unit will explore the South
African marketing environment.
Knowledge Checks Questions

1. SWOT analysis is one of the key steps during the strategic marketing
process. Carry out a SWOT for your favourite banking institution.
2. Elaborate the supporting role played by the marketing function to the
strategic marketing process.

Answers
Answers guidelines to Self-test questions:

1. The SWOT analysis will differ but strength, weaknesses, opportunities, and
threats must be identified.
2. Section 1.3.4 will provide essential information to answer the question
Answers
Answer to case study questions

In summary
• Extract: The business in pursuing a cost leadership strategy.
• Figure 1.2. The strategy is reliant on the business’s ability to acquire
products that it retails at a cost significantly lower than its competitors
are. Low cost of acquiring products translates to lower prices in the
retail outlets.
• Figure 1.3. The market average profit margin will be 40 – the
difference between the market average price of 100 and market
average production cost of 60.
• As a cost leader, it will have a margin of 50 – the difference between
the market average price of 100 and the cost leader production cost
of 50 (10 lower than the market average production cost of 60).

Unit
2: The Southern African
Marketing Environment

2.2 Socio-economic dynamics • Understand and assess the impact macro environmental
factors have on strategy design and implementation
• Assess the complex socio-economic dynamics of the South

African economy
2.3 Demographic dynamics • Match strategy to relevant geographic and demographic

segments
• Analyse the various sources of national, industrial,

organisational statistics
2.4 Living Standards • Formulate LMS aided marketing strategy
2.5 Sources of information for marketing • Perform market segmentation, targeting and positioning
planning
2.7 Summary
Prescribed Textbook
• Venter, P., & Jansen van Rensburg, M. (2018). Strategic marketing:
theory and application for competitive advantage. 2nd Edition. Oxford.
Cape Town. Chapter 2, P 28 – 56.
• Hooley, G. J.; Piercy, N. F., Nicoulaud, B., & Ruddy, J. (2017).
Marketing strategy and competitive positioning. 6th Edition. Pearson.
Chapter 3 & Chapter 9, P214 – 233.

2.1 Introduction
Effective marketing plans should begin with a comprehensive analysis, as this will inform the marketing plans that
marketers will deploy. Companies must strive to know the environment in which they operate. The socio-economic
environment and the perceived changes will indicate opportunities and threats as well as emerging trends and
segments. The socio-economic dynamics of South Africa offers a unique case study to marketers given dual
structure of the country’s economy – a big divide between the rich and the poor.
Unit 2 will provide detailed demographic data such as population and migration figures, living standard measures.
2.2 Socio-economic dynamics
• White male dominated

• International competitiveness
First tier • Well integrated in global knowledge and

value networks
• Skill and capital intensive
• R & D plays an important role
Second
• Predominantly black
• Informal economic activities
• Not contributing to state or local government
tier
revenues
• Low paid and low skilled
• Impoverished labour
Figure 3Figure 2.1: Dual structure of the country's economy
The dual nature of the South African economy is a unique feature that calls for different marketing approaches in
order to remain relevant to the two main market segments.
On the one hand, there is a ‘first’ tier economy, which appears predominantly white-male dominated. This economy
has a long history of international competitiveness and appears well integrated into global knowledge and value
networks.
Alternatively, there is a large, ‘second’ tier economy, predominantly black, often consisting of informal economic
activities not contributing to local government revenues, consisting primarily of low-paid, low-skilled, often
impoverished labour.

The gap between the two economies poses a challenge particularly on the ‘second’ tier economy as it remains
researched mainly due to its limited or invisible economic activity. Marketers remain at quadrants on how best to
serve the lower end customers as marketing research often consider the top end of the market.
Gini coefficient of 0.70 (World Bank, 2013a)
2.2.1 The social structure of South Africa

South Africa is a middle-income developing country with a national income per capita of US$9,469 (United Nations,
2013). As typical in most developing countries, per capita income tells us little about the quality of life in South
Africa. To explore the ability of households and individuals to command the resources necessary to sustain a
reasonable standard of living, it is necessary to use more complex multi-factor measures of development that
include non-monetary elements in fields such as health and education. The Human Development Index (HDI)
developed by the United Nations is the best-known and widely used indicator of standards of living. HDI can be
regarded as a measure of people’s ability to live a long healthy life, to communicate, to participate in the community,
and to have sufficient means to be able to afford a decent living. (See Table 2.1)
Table 5Table 6Table 2.1 South Africa’s HDI trends
Life expectancy Expected years of Mean years of GNI per capita HDI value
schooling (2005 PPP$)
At birth schooling
1980 56.9 11.1 4.8 8,399 0,570
1985 59.8 11.1 4.8 7,892 0,581
1990 61.5 11.4 6.5 7,671 0,621
1995 59.9 13.1 8.2 7,350 0,65
2000 54.8 13.1 8.2 7,462 0,622
2005 51.1 13.1 8.2 8,420 0,604
2010 52.2 13.1 8.5 9,307 0,621
2011 52.8 13.1 8.5 9,463 0,625
2012 53.4 13.1 8.5 9,594 0,629

Source: Adapted from Gumede, (2010)
Countries’ HDI index is classified into four categories;

• Very high human development with an index of above 0.9
• High human development with an index ranging between 0.8 and 0.9
• Medium human development with an index ranging between 0.5 and 0.8
• Low human development with an index of below 0.5

With a score of 0.629 in 2012, South Africa is classified in the medium human development category and ranks
121 out of 187 participating countries.
Think Point
What are the implications to a marketer of luxury products to South Africa given
the 2012 HDI of 0.629?
Table 7Table 2.2 Estimates of the Human Development Index

Category HDI
Total 0.62
Black 0.63
Coloured 0.75
Indian 0.89
White 0.91
Source: Adapted from Gumede, V (2000)
Activity 2.1
Comparing the HDI among the black, coloured, Indian and white communities in
Table 2.2, which market segment is the least attractive to marketers? Justify your
answer
The majority of the black communities are mostly poor due to unequal distribution of income. With an income Gini
coefficient of around 0.70 in 2008 and a consumption Gini of 0.63 in 2009, South Africa stands as one of the most
unequal countries in the world.
According to Tomlinson and Walker (2010), the profile of poorer communities includes economically inactive,
limited education, manually skilled, single parent, and unemployed individuals who are prone to suffer poverty. As
a result, such communities rely on a range of strategies to cope with problems of poverty, unemployment, shocks,
and vulnerability. It is not surprising if the poorer communities are the main beneficiary of the expansive social
grant system in South Africa.
However, due to the insufficient of these funds, alternative coping strategies include relying on relatives and
neighbours for moral and material support, and many households depend on loans from community members,
micro-lenders, and burial societies. Others continually obtain credit from formal retailers and informal
moneylenders.

The World Bank remains worried about the high levels of inequality in South Africa warning that the economy will
not be able to achieve a faster pace of growth unless it becomes more inclusive. Some, however, argue that post-
apartheid South Africa has adopted measures to redress inequality with policies that have a special focus on capital
development.
Case Study
There’s a shocking number of loan sharks in South Africa – here’s how they
operate
A new report from short-term lender, Wonga, finds that non-registered credit
lenders, or ‘loan sharks’ appear to be more widespread than previously thought,
with as many as 40,000 operating in South Africa at a ratio of 1:100 for every
household in informal settlements.
The report found that the average value of a loan ranges from between R500 –
R1,000, while interest on a loan ranges from between 30% – 50%. Very few loans
exceed R5,000, the report found.
It further found that people use ‘mashonisas’ (a person or company that provides
informal loans to consumers) because they offer quick and easy access to small,
short-term loans, despite not having any legal protection.
The report comes on the back of a sharp incline in the percentage of credit users in
South Africa – from 57% of the adult population being active credit users in 2008 to
69% in 2017 (NCR 2008-2017).
The fact that the loan is structured so simply, is a draw-card for the use of
mashonisas, Wonga said, as opposed to perceived hidden fees attached to legal
financial services firms.
In addition to the report conducted from research in Khayelitsha – confirmed the

high cost of credit and tough collection practices, it found that many are “not the
monsters that media make them out to be” and that people who use mashonisas
often use them because they find them easier and more convenient to use than the
formal credit market.
“Some (mashonisas) said they had more customers today than they did previously
due to increased cost of living,” it said.

“It is clear that informal lending is embedded in the social fabric of communities in
which they operate. It would be naïve to think that they can be regulated like the
formal market. The sheer scale of mashonisas would make this virtually impossible
and I don’t believe customers would want mashonisas threatened as they depend
on them on a monthly basis to get by,” said van Aswegen.
Source:https://businesstech.co.za/news/banking/246129/theres-a-shocking-
number-of-loan-sharks-in-south-africa-heres-how-they-operate/
Delineate and provide reasons for the emergence of the market segment that is
lucrative to the ‘loan sharks’ also known as ‘mashonisas’ in the South African money
market.
2.3 Demographic dynamics

According to the United Nation’s regional classification of Africa, Southern Africa comprises of the following
countries; Botswana, Lesotho, Namibia, South Africa, and Swaziland. In 2007, South Africa’s population comprised
87% of the population in Southern Africa. On the continental level, Southern Africa’s total population comprised
about 6% of Africa’s estimated population of 964 973 million in 2007.
Compared to other parts of Africa, Southern Africa has a lower fertility rate but it is challenged with a relatively high
adult HIV prevalence.
2.3.1 South Africa’s population

The population of South Africa can be analysed using nine geographically placed provinces. The most and least
populous provinces are Gauteng and Northern Cape respectively.
Think Point
As a marketing executive, would you consider the population density per

province when designing a distribution strategy that supports the marketing
strategy?

Figure 4Figure 2.2 South Africa population breakdown by province

Source: Stats SA, 2018.
Four racial population groups represent the South African population also known as (aka) the rainbow nation.
Figure 5Figure 2.3 South Africa population breakdown by race/ethnic group

Source: Stats SA, 2018

2.3.2 Population groups

The African population is made up of four broad groupings;
• The Nguni, comprising the Zulu, Xhosa, Ndebele, and Swazi people
• The Sotho-Tswana, who include the Southern, Northern and Western Sotho (Tswana people)
• The Tsonga
• The Venda
White South African is made up of three broad groups;

• Afrikaners, descendants of Dutch, German and French Huguenot who came to the country from the 17th
century onwards.
• English-speakers, descendants of settlers from the British Isles who came to the country from the late
18th century onwards
• Immigrants and descendants of immigrants from the rest of Europe, including Greeks, Portuguese,
Eastern European Jews, Hungarians, and Germans
2.3.3 Languages
South Africa is a multilingual country. Interestingly, there are eleven official languages.
Figure 6Figure 2.4 South Africa languages


Think Point
What language is prominently used for outdoor advertising such as billboards

in the South African province that you are familiar with?
2.3.4 Migration
People are continuing to flow from poorer, more rural provinces to the provinces with the largest economies and
the best service delivery (See Figure 2.5 on migration between 2010 and 2011). Such figures can provide national
government with reasons to plan for and implement policies aligned to balanced economic growth. Marketers,
however, follow such trends in order to determine the potential size of markets in different parts of the country.
Figure 7Figure 2.5: Total population by province

Source: Statistics South Africa
Gauteng and Western Cape experience the highest net in-migration and rank among the best performing provinces
on employment and living conditions indicators. The two provinces are likely to continue attracting migrants from
inside of and outside the borders of South Africa. The net in-migration has mixed consequences.

Figure 8Figure 2.6: South Africa population growth by province between 2001 and 2011
Determinants of population change in South Africa

Fertility rate - the number of children a woman would have at the end of her reproductive life if she survived up to
age 50 years and experienced the current age-specific fertility rates
Mortality - estimates the life expectancies at birth (the number of years a child expects to live after birth)
Net migration - the difference between immigration and emigration or in-migration and out-migration for a given
area and period.
2.3.5 HIV/Aids in South Africa

The first HIV case in South Africa was diagnosed in 1981; since then HIV prevalence has steadily increased in
South Africa. HIV prevalence in South Africa was estimated at just under 30% among pregnant women attending
antenatal clinics in 2007. South Africa has the second-highest HIV prevalence in the world and in the African
continent (after Swaziland). As of 2012, the absolute number of people living with HIV in South Africa had
significantly increased probably due to intervention measures from the government. The number of new infections
(all ages) has decreased. The UNAIDS Report on the Global AIDS Epidemic 2013 reports a 52% reduction in new
HIV infections among children and a combined 33% reduction among adults and children since 2001.

Table 8Table 2.3: HIV estimates for South Africa
Source: United Nations, (2013)
2.3.6 Education and the Internet

Education has become a top priority in South Africa despite the quality remaining inferior compared to that of other
countries. Trends in international and national pupil performance in mathematics, science, and literature remain
poor and various reasons have been identified as the root cause.
When it comes to Internet usage and connectivity, the gap between Africa and the first world is still vast. Whereas
the 2012 percentage population users of the Internet in South Africa was 17.40%, Morocco, Kenya, Nigeria and
Mauritius recorded 51.00%, 28.00%, 28.40%, and 35.00% respectively.
Economic upliftment
There are two South African government-driven initiatives to address the divide between the two tiers of the
economy – broad-based black economic empowerment (BBBEE)
• Black economic empowerment (BEE)
o Employment equity
o Skills development
o Ownership and management
o Socio-economic development
o Preferential procurement
• An increased focus on education.

2.4 Living Standards

The South African Advertising Research Foundation’s (SAARF) Living Standards Measure group (LSM) measure
provides a unique opportunity to segment the South African market. What makes the LSM measure special is its
ability to combine socio-economic indicators with demographics for better insights into the market segments. In
addition, the analysis involves a comparison of certain demographic lifestyle variables measured in All Media and
Products Survey (AMPS). AMPS is a single source survey, because information on media usage, product
consumption demographics are collated from the same respondent.
Think Point
What makes Living Standards Measure (LMS) such a credible source of marketing
information?.
2.5 Sources of information for marketing planning

Although marketers prefer to conduct marketing research to inform their marketing planning activities but due to
resource limitations, they often rely on data collected by others. Both institutional and private companies such as
Statistics South Africa (Stats SA), the Bureau of Market Research, the South African Advertising Research
Foundation (SAARF), the Human Sciences Research Council, generate the source of published statistics.
2.5.1 Statistics South Africa (Stats SA)

Stats SA is a national government department accountable to the Minister in the presidency responsible for the
National Planning Commission. According to the Statistics Act, 6 of 1999, the purpose of official statistics is to
assist organs of the state, businesses, other organisations and the public in planning, decision-making, and
monitoring or assessment of policies.
Stats SA provides reports that deal with demographics, migration, education, general health and labour force,
mortality and household attributes. Additionally, Stats SA releases economic statistics such as consumer price
index (CPI), producer price index (PPI) the two variables that define the level of inflation. Besides live updates,
some statistics are produced monthly, quarterly, half-yearly or annually.

2.5.2 Industry information

In addition to statistics produced on a national level, industry associations also release information pertinent to
industry members. Websites of various institutions provide specific information that can be considered for
marketing planning purposes (Venter & Jansen van Rensburg, 2018:49-51). The main sources of information are:
• Internet websites
• SAARF’s AMPS data
• Stats SA
o Censuses
o Labour Force Survey
o General Household Survey
o The Community Survey
• Commissioned Research
• Industry information
2.5.3 Key issues in sources of information for South African marketers

Access to information for marketers remains a challenge because most institutions and private research companies
do not freely share their research information. Marketers are often quick to accept published statistics at face value,
but the quality of the data from which statistics are derived may be questionable. There is a general suspicion that
statistics from census and surveys become obsolete quickly since it is derived from a reference period at least a
year old.
Visit Stats SA website and five institutional sources to determine if you can find
information that can assist in profiling of market segments in South Africa.
2.6 Conclusion
Before designing the marketing plan, marketers need to scan the macro-environment in order to identify both
opportunities and threats relevant to the business. By keeping abreast with events that unfold in the macro-
environment, organisations can create an environment in which they will prosper, and increase their efficiency by
focusing their efforts in areas with the greatest customer potential.

2.7 Summary
The South African market environment is still marred with economic disparities that even threaten balanced
economic development. Valuable insights into economic and consumer activity are widely captured courtesy of
Statistics South Africa (Stats SA). The data sources available for marketers were analysed. The analysis of the
business environment makes it easy for an organisation to identify opportunities.

1. There are eleven official languages of South Africa: Afrikaans, English,
Ndebele, Northern Sotho, Sotho, SiSwati, Tsonga, Tswana, Venda, Xhosa,
and Zulu. What are the implications of having eleven official languages to a
marketing communication specialist designing cause-related marketing
campaigns?
2. What opportunities would marketers in a country with slow Internet

penetration rate lose in this digital age?
Answers
1. Difference in languages implies deference in culture and perceptions.

Communication would end up being done in English a language that is more
common. However, cause related communication is usually aimed at
people whose use of English is limited.
2. The discussion may include a variety of issues such as; limitations to the use
of the internet to communicate with current and potential customers, limited
e-commerce opportunities, limited mobile commerce opportunities.
Answers
Answers to case study questions:

• Market segments served is predominantly the poor black communities
• Strict requirements from the commercial banks makes it impossible
for low income employees to access loans through the formal
channels
• The practice of borrowing money from ‘loans sharks’ has become part
of the social fabric
• The majority of the black communities are mostly poor due to unequal
distribution of income.

• With an income Gini coefficient of around 0.70 in 2008 and a

consumption Gini of 0.63 in 2009, South Africa stands as one of the
most unequal countries in the world.
• According to Tomlinson and Walker (2010), the profile of poorer
communities includes economically inactive, limited education,
manually skilled, single parent, and unemployed individuals who are
prone to suffer poverty. As a result, such communities rely on a range
of strategies to cope with problems of poverty,
• However, due to the insufficient of these funds, alternative coping
strategies include relying on relatives and neighbours for moral and
material support, and many households depend on loans from
community members, micro-lenders, and burial societies.
• Others continually obtain credit from formal retailers and informal
moneylenders.

Unit
3: Identifying Market Opportunities

3.2 The operating environment • Examine the environment in which the organisation operates
3.3 Environmental scanning to identify • Demonstrate that environmental scanning is a deliberate

opportunities opportunity-seeking adventure
3.4 Macro environmental analysis • Undertake environmental audit to pre-empt potential threats
3.5 Industry and market analysis • Apply a range of relevant external analysis technics in order to
gain market insights
3.6 Internal analysis • Apply a range of relevant internal analysis technics to assess
organisation’s resources and capabilities
• Utilise the situation analysis as an authentic guide to strategic

marketing planning
• Devise a range of justifiable objectives reflective of a thorough

external and internal analysis.
3.7 Conculsaion • Summarise topic areas covered in unit
3.8 Summary
Prescribed Textbook
Cape Town Chapter 3, P 58 – 95.
Recommended Textbooks
strategy and competitive positioning. 6th Edition. Pearson. Chapter 3,
P55 – 85.

3.1 Introduction
Systematic analysis of the business environment typically commences at the macro level, highlighting aspects of
the broader environment that may impinge on the specific markets the firm operates in. At a more specific, industry
level, however, the identification of the forces driving competition within industries can be a useful starting point.
Subsequently, an internal analysis should be conducted to identify the company’s strengths and weaknesses and
determine whether it is able to take advantage of any opportunities or minimise threats. Smart marketer knows
that not all opportunities are worth chasing, as they may be too costly or too risky to pursue particularly to
organisations whose weaknesses overweigh their strength.
In this unit, opportunity/threat identification is going to be done with the help of renowned tools: STEEPLE and
Porter’s Five Forces. The internal analysis will be accomplished using the marketing audit and financial analysis.
3.2 The operating environment
Think Point
The operating environment is marred with surprises with one change occurring
after another. Think of five major changes that you have witnessed in the past
ten years.
The operating environment includes the combination of macro and market environments and the internal
environment in which a company operates.
Figure 9Figure 3.1 The three-tiered operating environment and outline for this chapter
Companies do not operate in a vacuum, as they have to contain a complex network of factors in the unpredictable
operating environment. Despite the complexity, marketers must still create winning strategies capable of carrying
the organisation forward. To gain an understanding of the operating environment, marketers need to engage in
ongoing environmental scanning. Environmental scanning entails acquiring information about events, trend, and
relationships in an organisation’s operating environment.

Environmental scanning assists marketers in a variety of ways:

• Helps an organisation to spot an opportunity early and capitalise from it
• Provides early signals to potential problems
• Sensitises the orgnaisation to the ever-changing needs of customers and consumers
• Provides a base of qualitative information about the environment
3.3 Environmental scanning to identify opportunities

Although the business environment usher’s threats to the organisation, marketers can also identify market
opportunities within the same business environment. An opportunity can be defined as a confluence of
circumstances leading to the choice or rejections of options. Market opportunity can be seen as a ‘gap’ in the
marketplace where a need is not satisfied sufficiently, representing a chance to design a product, service, or idea
to bridge the gap. Market threat refers to those factors that can inhibit marketers from achieving set marketing
objectives. Scanning the environment frequently will equip marketers to come up with, and adjust current strategies
in response to changes in the marketplace.
Case Study
Empty Shopping Mall Space

In the next 5-10 years, shopping malls might look a little sparse. There is a mall
in Fergus Falls, Minnesota that looks like a ghost town from the 80s. The colour
scheme is ripped right out of Ferris Bueller's Day Off, and the decor looks just
as dated. Mall walkers zip past wooden benches and fake trees, barely
registering the fact that 90% of the retailers moved out quite a few years ago.
There is a Dunham's Sports on one end of the mall and a Herberger's on the
other. In between, you can stop in for a dentist visit or get your eyes checked
at a clinic, but most of the spaces are boarded up and look just as vacant as
the stare from a pre-teen at a family picnic.
I used to live in the town, and it was always a little perplexing. The mass exodus
was a result of retailers moving to the downtown area. Yet, in recent years,
malls are starting to look a little sparse for a very different reason: People are
buying from Amazon.
The retail giant is raking in the cash. The tech giant scored half of all Black
Friday online sales with more to come today. Call it Cyber Monday if you want,
but it is more like Amazon has become the new Walmart, a place where many
of us shop for just about anything. A better name might be Cyber Decade.

Alternatively, maybe that is Cyber Millennia.
Source: Adapted from By John Brandon Contributing editor,

Inc.com@jmbrandonbb
With reference to the extract above, what lessons from environmental

scanning, should potential investors in future shopping-mall developments in
South Africa consider?
3.4 Macro environmental analysis

An environmental analysis can lead the marketer to discover trends in the macro environment and will guide
marketing decision-making. Managers responsible for taking charge of environmental analysis should prioritise
trend categories to ensure that they know what to look for. Secondly, they should identify and monitor relevant
information about macro trends, and thirdly, they need to anticipate impacts and adopt strategies accordingly.
Practical Application or Examples
Walmart’s purchase into South Africa’s Massmart took longer than anticipated.
Furthermore, the retailer had to wait a long time before it gained authority to
sell fresh fruit, vegetables, meat, dairy and bakery products. Which PESTLE
elements account for the frustrations experienced by international investors?
The framework to analyse the macro environment

The most common framework used to scan the macro environment is the PEST analysis also known as the STEP
or SLEPT analysis. Other extended versions of the analysis utilise the PESTLE or STEEPLE analysis.
Whereas the PEST analysis takes into account political, economic, social, and technological factors, the more
comprehensive STEEPLE analysis incorporates social and demographic, technological, economic, environmental
(natural), political, legal, and ethical factors. Tables 1.1 to 1.3 provide an opportunity identification template.
Opportunity identification template

Table 9Table 3.1 social/demographic factors
Table 10Table 3.2 Technological factors

Table 3.3 Economic, Environmental & Political factors
3.5 Industry and market analysis

After scanning the macro environment, the next step is to analyse the ‘market environment’. An industry analysis
and a market analysis will be undertaken. An industry consists of companies that produce or market similar
products or services. A market environment, however, consists of suppliers, intermediaries, customers, and
competitors.

Activity 3.1
Most marketers believe there is no longer a sellers’ market due to high levels of
competition in any industry. Would you think differently when you analyse the South
African motor industry that appears protected? Use relevant aspects of Porter’s five
forces model as the framework to your response.
3.5.1 Industry analysis of the competitive structure

Porter (1980) suggested that five main forces shape competition at the level of strategic business units and that a
systematic analysis of each, in turn, can help managers identify the keys to competitiveness in their particular
industry. Michael Porter’s framework consists of five forces – bargaining power of suppliers, bargaining power of
buyers, the threat of new entrants, the threat of substitutes, and rivalry between existing direct competitors.
Figure 10Figure 3.2: Porter’s Five Forces Model

Source: Adapted from Hooley et al., (2017: 74)
3.5.2 Market analysis dimensions

Market definition - marketers must start by defining the market accurately. If the market definition is too narrow it
may limit opportunities, whereas an excessively broad definition may lead to ‘mass marketing’ that can make the
efforts and resources of an organisation seem almost insignificant.

Emerging submarkets – marketers should be able to meet the challenge of detecting and understanding
embryonic sub-markets, as a brand may lose market share because of the perception that it is not relevant to the
emerging sub-markets. ‘Green consumers’ are an example of a sub-market.
Market and submarket profitability analysis – most companies aim to generate above-average profits. The
challenge, however, lies in correctly estimating how profitable the average company will be. The profitability and
the attractiveness of an industry or market, as measured by the long-term return on investment, depends largely
on the operating environment in which it functions.
Cost structure – marketers should analyse the cost associated with each value-added activity in order to
understand the cost structure of the market and gain insights into the current and future key success factors. By
analysing the value chain, they can pinpoint where value is added.
Distribution systems – by analysing distribution trends, evaluating the strength of distribution channels, and
considering alternative distribution channels, marketers may discover new opportunities. If trends are examined
and translated into strategies, opportunities may emerge.
Market trends – an external analysis enables marketers to identify market trends that will impact on the company’s
strategies. Three questions that will help marketers detect a real trend as opposed to a fad;
• What is driving it?
• How accessible is it in the mainstream?
• Is it broadly based?
Key success factors – marketers must identify the assets and competencies required in order to compete
successfully. The two types of competencies are; strategic necessities and strategic strengths
• Strategic necessities – these are the basic competencies that each firm must have
• Strategic strengths – these competencies will provide the firm with a competitive advantage
3.6 Internal analysis

Marketers should not only find attractive opportunities in the external environment but also take advantage of them
by evaluating their organisation’s internal strength and weaknesses.
3.6.1 Marketing audit
Think Point
Suggest reasons that call for conducting a full marketing audit.

Marketers must conduct an in-depth study if weaknesses are discovered after conducting an internal analysis. A
systematic examination of an organisation's marketing objectives, strategies, organisation, and performance.
Below is a checklist of areas marketers should consider when conducting an internal analysis to identify strengths
and weaknesses in their organisation.
Table 11Table 3.4: Marketing audit

Major or Minor Major or Minor Importance
Strength (MS or ms) weakness High/Medium/Low
MARKETING
Effectiveness of
marketing mix:
Product
Pricing
Promotion
People
Processes
Physical evidence
Customer:
After sales service
Satisfaction
Retention
Company reputation
Market share
Branding & positioning
Market information or
intelligence
Effectiveness of sales
force
Stakeholders:
Distributors
Suppliers
Other groups
OPERATIONS/MANUFACTURING
Facilities
Economies of scale
Capacity
Production or engineering
Technical manufacturing
skill

FINANCE
Cost or availability of
capital
Cash flow
Financial stability
MANAGEMENT
Leadership
Structure, behaviours, &
philosophies
Team work
3.6.2 Financial analysis
Activity 3.2
A due diligence study usually precedes any joint venture negotiation. Which
financial ratios would interest you during the study?
Financial analysis includes assessing an array of financial performance areas for the organisation plus comparing
to competitors. The most common measures of financial performance are the analysis of ratios. Ratios are typically
used to compare historical or future trends within a company, or to compare a company or business unit with an
industry or other companies.
Marketers may follow the following four steps when conducting a ratio analysis.
Choose Check for

Compute the Compare the
appropriate problems or
ratios ratios
ratios opportunities
Figure 11Figure 3.3: Steps when conducting a ratio analysis

Step 1 – Choose appropriate ratios

The four groups of financial ratios that are most relevant to marketers are profitability ratios, activity ratios (assets
management), leverage ratios (debt management), and liquidity ratios.
Step 2 – Compute the ratios

Ratios are computed using figures derived from the company’s balance sheet and income statement.
Step 3 – Compare the ratios

Comparison can take one of the following formats:
• Comparison over time
• Comparison with other companies
• Comparison with the industry average
Step 4 – Check for problems or opportunities

Marketers can identify problem areas or possible opportunities by comparing ratios, e.g. an assets turnover ratio
that is slightly below the industry average may require close monitoring.
3.7 Conclusion
Constant monitoring of the environment is vital if an organisation expects to keep abreast with changes taking
place. Scanning the environment also unveils opportunities and threats relevant to the business. The industry in
which the company operates may be highly competitive or poses barriers to entry. Proactive managers may design
strategies that provide their company competitive advantage.
3.8 Summary
The starting point for strategic marketing is the identification of market opportunities for marketers to capitalise on.
The discovery of potential threats will also save the marketers money.
The main tools used to scan the external environment are PEST, PESTLE, or STEEPLE. These tools will avail
opportunities and threats. Porter’s Five Forces model is a valuable tool to analyses the industry to determine the
attractiveness.
The internal analysis is also an essential analysis so that marketers can weigh their strength and opportunities
against competitions. A marketing audit should be conducted as part of the internal analysis. A historical analysis
of financial ratios can also reveal the organisation’s performance.
In the next unit, we will discover how opportunities can be developed.


1. On 21 July 2011, Reuters published an article that read – ‘Confirmed: Nokia
surrenders global smartphone crown to iPhone’. From the above statement;
(a) What lessons resonate with the above statement on the importance of scanning
the external environment?
(b) Which elements of Porter’s five forces model helps to explain the demise of
Nokia?
2. Watch a 3-minute video by Prof. Michael Porter on how the fives forces can be
applied in different industries. http://www.youtube.com/watch?v=mYF2_FBCvXw
3. A narrow focus on the existing market is regarded as a threat to a firm’s long-term
survival. Instead, marketers should be open to incorporate sub-markets as and when
that opportunity emerges. With specific reference to Clicks and Dis-Chem, analyse
sub-markets served.
Answers\
Answer guidelines to self-test questions:
1. (a) The lesson here is to emphasise the importance of scanning the external environment
to detect any potential threats. Nokia did not see it coming when Samsung and Apple
dislodge them from there to position
(b) All the five forces are relevant to Nokia. The good discussion should cite the activities
of Nokia’s competitors.
2. Take note of lessons from Prof. Michael Porter.
3. Clicks & Dis-Chem have expanded their market reach, moving from supplying just
medical related products to compete with supermarkets. They have re-defined their
market

Answers\
Answer guidelines to case study questions:
• Environmental scanning is done to identify opportunities and threats
• Market opportunity can be seen as a ‘gap’ in the marketplace where a need is not
satisfied sufficiently, representing a chance to design a product, service, or idea
to bridge the gap
• Future investments may realise that online purchasing is on the increase and will
result in less foot traffic in the shopping malls in the near future
• ROI would be the determining factor when designing future malls
• If occupancy rate falls - it also means less rentals being paid.
• Scanning the environment frequently will equip marketers to come up with, and
adjust current strategies in response to changes in the marketplace

Unit
4: Developing Market Opportunities

4.2 Market definitions • Devise measures to come up with a profitable market or sub-
market
4.3 Market potential • Re-organise the market into profitable sub-markets or

segments
4.4 Market growth • Assess strategic consumptions and marketing decisions

aligned to each stage of the PLC
4.5 Market forecasting • Appreciate advantages of holding sizable market share
4.6 Market opportunity development • Analyse how forecasting is used to predict market share and
framework share potential
4.7 Evaluating opportunities • Choose market opportunities to pursue in consultation with

internal, external and financial analysis
• Evaluate, and apply a range of marketing analysis tools and

techniques used to delineate a target market
4.9 Summary
Prescribed Textbook


Marketing strategy and competitive positioning. 6th Edition.
Pearson.Chapter 4, P89 – 104.

4.1 Introduction
Opportunity identification is followed by an analysis of how the companies can take advantage of the opportunity.
Companies take up opportunities for different strategic reasons, for example, to achieve growth. Some
organisations grow by expanding their business operations to new markets, others develop new or improve existing
products and services, and some differentiate themselves.
This unit focusses on developing market opportunities, which includes an assessment of the present and potential
market. Besides determining the current market share, the marketer should calculate the market size, expected
market growth, and focus future sales.
4.2 Market definitions

To identify opportunities for growth, marketers need to understand the market structure. Markets are defined as
groups of people who are willing and able to buy something because they have a need for it. This need creates a
demand for goods/services. Marketers need to match their product benefits with this demand so that they can meet
the market’s needs.
4.3 Market potential
Think Point
Many marketing and business strategies emerged from the great wars. What
could be the reason?
After establishing the market definition, marketers can determine the maximum potential of the market i.e. the
number of prospective customers that can be served within the defined market. Market potential is the maximum
number of customers who can enter the market given a specific market definition. The number of potential
customers is an important input to calculate the size of the market demand.
Market size is determined by:

• Revenue or unit sales for a defined product-market i.e. consuming unit multiplied by the rate of purchase
• Within a specified period
• Within identified geographical boundaries.

Activity 4.1
Is there a market for fast train service plying the Johannesburg to Cape Town
route?
4.3.1 Untapped market potential

Often actual sales do not match the market potential. There could be many reasons for this. It may be, for example,
that a company’s production and distribution systems cannot meet the needs of consumers during the period of
interest.
With a little adventure, business often discovers that there is considerable untapped market potential not previously
served. There are five major forces that can restrict a market from reaching its full potential; awareness, availability,
ability to use, benefit deficiency, and affordability (see figure 4.1)
Figure 12Figure 4.1: Market potential unpacked

Source: Adapted from Best, (2009: 108)
Awareness - Potential consumers are unaware of a product, or do not fully or accurately understand its benefits.
Availability – demand is influenced by availability i.e. if products are not in stock or freely available, market demand
will be reduced.
Ability to use – if consumers are unable to use the products, or perceive them to be technically complicated
products then full potential will not be reached
Benefit deficiency – not all customers have the same lifestyle needs or taste hence the product will not appeal to
them in its current design.
Affordability – some customers may like product benefit, but may simply not afford to purchase it

4.4 Market growth

Once marketers have calculated market potential and determined the forces that restrict market demand, they
should consider market growth.
Market growth is determined by the current market penetration and rate of entry:
• Market penetration is the total number of customers who have entered that market at a specific point in
time
• Rate of entry is the rate which new customers enter the market
Some markets grow quickly and reach their full potential much faster than others reach. Discussed below are some
strategies that can be developed to accelerate market growth.
4.4.1 Rate of market development

The rate of market development is ultimately determined by the success of consumer acquisition. Consumer
acquisition is difficult given that consumers are sceptical of new products and usually prefer to take a ‘wait and
see’ approach. For a clear understanding of market growth, we will discuss the customer-buying process, factors
that drive customer adoption, and the PLCs and market life cycles.
Customer buying process

When customers purchase new products they compare various product attributes in order to align their needs with
alternative product choices (see figure 4.2). Consumers will buy new products only if the product attributes are
attractive and add value compared to alternatives.
Figure 13Figure 4.2: Customer buying process

Customer and product adoption

Over the past 25 years, research as shown that new products have failed at the rate between 40% and 90%. This
is testimony of the decline of advertising, promotions, and sales force in introducing new products. It is becoming
increasingly difficult to convince consumers to adopt innovations.
To understand why some new products, fail and others succeed, marketers should consider adoption forces that
affect the rate at which customers enter a market (see figure 4.3).
Reasons for no or slow adoption

Customers do not need the new product or service
Customers cannot afford the new product
The new product is not widely available
Customers do not know how to use the new product
Customers are satisfied with existing alternatives
Products are less observable
Customers are sceptical about the new product’s performance
Customers are not able to try or sample products
Customers do not want to incur switching costs
More than one decision-maker is involved in the purchase decision
Figure 14Figure 4.3: Customer and product adoption forces
For rapid adoption, products should meet most of the forces in figure 4.3. Marketers should ask themselves what
they could do to ensure that consumers will adopt their new products.
Managing customer and product adoption

Breakthrough innovation usually involves substantial changes to the existing products that in turn, require changes
in customer behaviour. Marketers must, therefore, deal with the expected changes and walk the journey with
customers as they go through the changes in order to reduce resistance to change. In Figure 4.4, are four
categories of changes classified according to the changes they require;

Easy Sure Long Smash

sells failures hauls hits
Detergents Wireless
DVORAK
with improved Cellphones HSDPA USB
keyboard
whiteners modem
Figure 15Figure 4.4: Categories of innovation
Gourville (2006:105−106) provides guidelines to manage resistance to change. How to manage consumer
resistance
• Accept resistance
• Be patient
• Strive for significant improvement
• Eliminate the old
How to minimise resistance

• Make behaviourally compatible products
• Seek out the unendowed
• Find believers.
The Product life cycle (PLC)

A PLC (see figure 4.5) reflects how products and services pass through a number of distinct stages from their
introduction through to their removal from the market. Marketers need to understand the strategic implications of
each stage and develop appropriate strategies.
Introduction stage
The product is launched into the market and generally, sales are slow to pick up because customers and
distribution have to be found and convinced. If the product is new to the world, (e.g. the first HD DVD player) it will
face little or no competition and the company will have a pioneering advantage and appeal to innovators. If it is an
addition (e.g. Motorola Razor in the fashion phone market), it will be targeted at a new segment and fit the ‘ideal’
of that segment better than alternative solutions. The key question here has to do with how quickly competitors will
launch a variant. This is normally the stage to build strategies.

Figure 16Figure 4.5: Product life cycle Stages of the PLC
Growth stage
The growth stage is characterised by a rapid increase in sales as the product starts to attract different types of
customers and repeat purchases may start. Critically, it is at this stage that competitors assess the product’s
market, profit potential, and decide on their competitive moves. They may decide to modify or improve their current
offerings or enter the market with their own new products. If not, they may use the other elements of the mix to
detract attention away from the product, i.e. an advertising campaign or a price promotion. Defensive attacks may
be required to prevent the curve from flattening.
Maturity
At this stage, the rate of growth slows down significantly. This stage tends to last longer than the previous ones
and is, probably, the most challenging one: it is an unpleasant fact for most marketers that the markets they have
to deal with are mature. This is a stage of severe competition, market fragmentation, and declining profits, due to
overcapacity in the industry. Indeed, competitors will try to uncover untapped niches and/or enter price wars.
Weaker competitors will exit, possibly becoming suppliers to the stronger ones or being bought by them (as we
are currently seeing in the car industry). The survivors will be either companies supplying the bulk of the market,
competing on a high volume–low margin basis, or market niches. Many firms will try to buck the trend and revamp
their PLCs or expand the market by creating a new segment, and hence extra demand overall.

Decline
This stage is marked by a slow or rapid decline in sales of the product. The decline may be due to better solutions
supplanting weaker ones, a change in consumer tastes or an increase in competition, be it domestic or
international.
Case Study
Smartphone rankings shaken up once again as Huawei surpasses Apple moving

into the second position
The overall market declined by 1.8% in Q2 2018. According to preliminary data

from the International Data Corporation (IDC) Worldwide Quarterly Mobile
Phone Tracker, smartphone vendors shipped a total of 342.0 million units during
the second quarter of 2018 (2Q18), resulting in a 1.8% decline when compared
to the 348.2 million units shipped in the second quarter of 2017. The drop marks
the third consecutive quarter of year-over-year declines for the global
smartphone market and only the fourth quarter of decline in history. IDC believes
this is the result of churn in some highly penetrated markets, although many high
growth markets still exist and should return smartphone shipments to overall
growth.
The arrival of Huawei in the second position marks the first quarter since 2Q10
where Apple has not been the number one or two-smartphone company in terms
of market share. Huawei delivered shipments of 54.2 million units to move into
the second position with a record high market share of 15.8%. Samsung
maintained a comfortable lead, although indications from its recent 2Q18
earnings call suggest its mobile division revenues will face challenges moving
forward.
"The continued growth of Huawei is impressive, to say the least, as is its ability
to move into markets where, until recently, the brand was largely unknown,"
said Ryan Reith, program vice president with IDC's Worldwide Mobile Device
Trackers. "It is worth noting that Apple moved into the top position each of the
last two holiday quarters following its product refresh, so it's likely we'll see
continued movement among the top ranked companies in 2018 and beyond.

Samsung once again remained the leader in the worldwide smartphone market
despite a 10.4% decline in shipments from last year. The flagship S9/S9+, which
launched late in the first quarter, witnessed slower than normal sales according
to Samsung. Samsung claims the slowdown is due to both intensified
competitions at the high end and an overall sluggish smartphone market. The
Korean giant will look to bolster sales in the coming weeks as we await the arrival
of the new Galaxy Note 9.
Source: https://www.idc.com/getdoc.jsp?containerId=prUS44188018 According

to IDC. 31 Jul 2018.
From the above extract, explain the significance of being a market leader. What
marketing tactics are used to retain or defend market share
The strategic implications of the PLC according to Wilson & Gilligan (2005:479) are:
• Products have a finite lifespan
• During this lifespan, they pass through various stages which present different challenges to the marketer
• Most elements of the organisation's strategy need to change as the product moves from one stage to
another
• Each stage of the PLC offers different profit potentials for products
• Managerial demands and styles vary from stage to stage.
Market share
Market share indicates how a company is performing relative to its competitors and is calculated by dividing the
company’s share by the total sales of all companies for a specified product-market (Cravens & Piercy, 2010).
• Market share = Company’s share / Total market share
The metric indicates how a company is performing relative to its competitor.

4.5 Market forecasting

Forecasting is not an exact science as there is no crystal ball that allows marketers to see the future, and
companies operate in constantly changing environments. Customers also evolve, innovations and new
technologies get introduced, competitors came and go, and changes in the macro environment should never be
underestimated.
Despite the above challenges, marketers must still forecast future sales or revenue in order to create expenditure
budgets.
(Hooley et al., 2017: 200) pieces of advice on how to select a market forecasting method as follows:
• Use simple methods that you understand rather than complex methods understood by few people; simple
methods are often as good as complicated ones
• Choose a forecasting method based on its fitness for the current job, not its past forecasting accuracy
• Use a combination of different methods
• Expensive does not necessarily mean good
• Before making decisions based on forecasts, be aware of the way they were produced, and the limitations
and risks involved.
There are a number of forecasting methods and a few are outlined below;
• User expectations
• Salesforce estimates
• The jury of executive opinion (judgemental forecasting)
• Delphi technique
• Market tests
• Traditional time-series analysis
• Advanced time-series analysis
• Econometric methods
• Input-output analysis
• Statistical demand analysis
Activity 4.3
What advice would you give to a manager bent at making decisions solely
based on forecasts?

4.6 Market opportunity development framework

In order to grow market, share and exploit share potential, marketing strategy involves selecting target markets
and developing marketing mix programmes to reach these markets.
Figure 4.6, presents an overview of the process of analysing market opportunities.
Figure 17 Figure 4.6: Market opportunity analysis

Source: Stevens, Sherwood, Dunn & Loudon (2006)
4.6.1 External analysis

Marketers should begin with a detailed analysis of the external environment in which the company operates. The
analysis should assess the market size and growth trends, a customer analysis of consumers’ needs, attitudes,
and behaviour, and competition.

4.6.2 Financial analysis

Approximate the revenue inflows, estimate costs, and project the return on investment (ROI) in order to establish
the attractiveness of the market. The metrics will reflect the size of the investment needed for the company to
compete effectively in the market.
4.6.3 Internal analysis

The internal analysis will consider purpose/mission, corporate objectives, and resources.
4.7 Evaluating opportunities

Opportunities can be evaluated graphically using GE’s strategic planning grid. The nine-box grid was developed
by General Electric (GE) to help marketers to identify choose the best possible strategy. Figure 4.8 shows both
industry attractiveness and high opportunities.
Figure 18Figure 4.7: GE’s strategic planning grid

Source: Adapted from Perrault & McCathy, (2008: 112)

4.8 Conclusion
The type of marketing strategy that a marketer adopts is often the result of the interaction of several factors, the
type of the market, its structure, and the likely future of that market. Strategies are developed specifically to take
advantage of gaps identified in a markets. A full understanding of the market and its potential is therefore essential.
Market opportunities can then be assessed to see how growth can be achieved.
The unit focused on developing market opportunities after clearly defining the market that the business operates
in. the present and potential size of the market, including market potential, market growth, market share and sales
forecasting were assessed.
4.9 Summary
Opportunity analysis took centre stage, as this is a means to determine if there is potential to grow a business. A
framework for developing and evaluating opportunities was utilised. An opportunity not supported with substantial
demand is not worth pursuing.
Growing the business may also result in increased market share.

1. The Gautrain is a success story but why was the project not replicated in all
major towns of South Africa.
2. Since most consumers are sceptical of new products to the market, what
strategies can accelerate the adoption of untried products?
3. Proper opportunity analysis saves time and money. How do you ascertain
potential investors that you are chasing after realist opportunities?
Answers

1. The Gautrain may fail to gain acceptance in other areas, as it may not add
the same vale to consumers in the current market. Costs are prohibitive given
the potential low ROI.
2. A discussion of the following would provide a basic answer; easy sells, sure
failures, long haul, and smash hits. A discussion based on manipulating the
4Ps to improve trial should be done. The introduction stage of the PLC should
also assist in developing further arguments.
3. Develop the answer from Figures 4.6 and 4.7

Answers

Significance of being a market leader
• Samsung is the market leader in terms of volume of sales and it has
managed to reach more market segments more than its competitors
• Significant brand loyalty is achieved
• Brand equity means the leader will spend less when introducing new
products
Tactics used to retain or defend market share

• Product development to counter competition
• Relay on distribution advantages
Discounted pricing strategies

Unit
5: Identifying and Targeting
Attractive Market Segments

5.2 Segmentation, targeting, and • Appraise the separate and joint use of segmentation, targeting
positioning and positioning in strategic marketing process
5.3 Market segmentation • Apply different segmentation variables
• Coopt LMS as an approach to segment a market
5.4 Targeting strategies • Choose positioning strategies that attain a competitive

advantage
• Analyse the market segmentation process for B2B and B2C

markets
• Determine the most profitable market segments to target
5.5 Differentiation and positioning • Assess implications of segmentation, targeting, and positioning
strategies
5.7 Summary
Prescribed Textbook
strategy and competitive positioning. 6th Edition. Pearson.Chapter 7,
P159 - 185 & Chapter 9, P214 - 233.

5.1 Introduction
Segmentation, targeting, and positioning are three key concepts in our approach to strategic marketing. When
developing marketing strategies, it is important first to understand which market segments exist – this is the
segmentation process. Most companies do not have abundant resources to satisfy all three needs of every market
segment and would conveniently chase after segments than can be served profitably – this is the targeting
process. Having targeted certain segments, marketers must decide how to complete in each of their chosen
segments – this is known as their positioning in the segment.
Figure 19Figure 5.1 Segmentation, targeting, and positioning (STP) as a process

Source: Cravens & Piercy (2006)
This unit will focus on the following:

• Segmentation – identifying and describing segments
• Targeting – selecting attractive segments on which to focus
• Positioning – developing strategies for competing in each chosen segment and to assist with establishing
a unique selling position (USP)
5.2 Segmentation, targeting, and positioning (STP Process)

Segmentation, targeting, and positioning are at the heart of the strategic marketing process. Value-based approach
to marketing is a means to achieve strategic marketing process. A value-based marketing is a prudent approach
to use in this era of highly sophisticated customers who are also hardly loyal to a particular brand.
Market segmentation should result in a manageable number of segments that will enable marketers to make better
strategic marketing decisions, and provide a clear idea of what customers in the segment value and, subsequently,
which value propositions will appeal to them.

Analysis of segments should highlight certain opportunities that marketers can pursue using a personalised value
proposition. Market segments that are underserved or ignored by competitors, for example, present as an
uncontested opportunity. Marketers need to understand what specifically customers in this segment value so that
they can identify value opportunities to be used as the basis for succesrsful competition in that segment.
Organisations do not necessarily take on every opportunity that presents itself as a decision should be informed
by the organisations’ strategic capabilities and its relative strengths and weaknesses. Moreover, the organisation
may decide to scale down, postpone, or even avoid competing in segments that they deem cpmlex or expensive
to develop. After selecting a lucrative segment, marketers are expected to contnuously monitor actual value
delivered in each segment, for example, through market research, and re-evaluate and adjust their value
proposition as and when required.
Think Point
Why should targeting and positioning precede segmentation?
5.3 Market segmentation

McDonald and Dunbar (2006), describe market segmentation as “the process of splitting customers, within a
market into different groups, or segments, within which customers share a similar level of interest in the same, or
comparable, set of needs satisfied by a distinct marketing proposition.” Segmentation allows marketers to more
precisely define and understand customer needs and gives them the ability to tailor products to better suit those
needs Ferrell & Hartline, (2014).
The characteristics of a good segmentation can be described as follows:
• It identifies the product-market segments that are most worthwhile to pursue
• It recognises the dynamic nature of markets
• It helps the organisation to figure out what products to place before the consumers most likely to purchase it
Good segmentation can help organisations to become more profitable by focusing marketing efforts on segments
that will be most beneficial to them.
5.3.1 Types of market segmentation

The key segmentation variables are needs-based segmentation, demographic segmentation, geographical
segmentation, and segmentation by product, service, and channel. To have a broader view of segmentation we
will first analyse periods preceding the Second World War to access the origins of segmentation:
• Demand for goods outstripped supply
• The main role of the marketing function was marketing communication
• Demographic segmentation emerged as the dominant method used to segment markets

Needs-based segmentation
Termed one the most robust process, needs-based segmentation uses the buyers’ needs and preferences as the
basis for segmentation. This method of segmentation is extremely robust and results in a deep, detailed
understanding of consumer needs, attitudes, and perceptions that make it easier for marketers to understand which
value propositions will appeal to which segments, and why. During needs-based segmentation, other types of
data such as demographic and geographic segmentation data are useful in developing segment profiles and
making segment members recognisable.
Demographic segmentation
Demographic segmentation uses demographic variables, for example, age, gender, income, etc. or a combination
of these to group customers into segments. Demographic segmentation divides markets into segments using
demographic factors such as gender (e.g., First for women insurance for women), age (e.g., McDonald’s kiddy
burgers and upsize burgers for teens and young adults), income (e.g., Lexus automobiles for wealthy consumers),
and education (e.g., online executive MBA programs for busy professionals).
According to Ferrell & Hartline, (2014) demographic segmentation tends to be the most widely used basis for
segmenting consumer markets because demographic information is widely available and relatively easy to
measure. In fact, much of this information is easily obtainable during the situation analysis through secondary
sources which makes it an objective segmentation process.
Despite its objectivity, unfortunately, demographic segmentation becomes less useful when the firm has a strong
interest in understanding the motives or values that drive buying behavior. Often, the motives and values that drive
actual purchases do not necessarily have anything to do with demographics. For example, how would you describe
the demographic characteristics of a price sensitive, value-conscious consumer?
Demographics remain important in segmentation studies because they help to profile customers or potential
customers, but they are not particularly useful as key segmentation variables.
Geographical segmentation
In geographic segmentation, variables such as province, city development status (urban or rural), or postal codes
are used to group customers into segments. Geographic characteristics often play a large part in developing market
segments. For example, firms often find that their customers are geographically concentrated.
Geographical segmentation is by the implicit assumption that customers sharing a geographical space have similar
needs. Geographic data is useful in describing segments, particularly if it is combined with other data such as
demographics, but is not useful as a primary segmentation method.

Segmentation by product, service, and channel

Customer can be grouped according to the products or services that an organisation offers. In the cellular services,
for example, customers are grouped as ‘prepaid’ or ‘contract’ customers. There may be many different types of
customers using a particular product or channel, and it is necessary to understand which specific needs-based
proportions.
Psychographic segmentation
Psychographic segmentation deals with state-of-mind issues such as motives, attitudes, opinions, values,
lifestyles, interests, and personality. Personality types, lifestyle, and values are psychographic variables often used
to group customers. Ferrell & Hartline, (2014) believe that these issues are more difficult to measure, and often
require primary marketing research to properly determine the makeup and size of various market segments. Once
the firm identifies one or more psychographic segments, they can be combined with demographic, geographic, or
behavioral segmentation to create fully developed consumer profiles.
Psychographic segmentation is unfortunately regarded as too vague to be able to predict what customers might
buy in the future. However, the segmentation method is useful in identifying communication messages that might
appeal to customers but has limited use in providing marketing decision-makers with ideas for how to retain existing
customers or gain new ones.
Behavioural segmentation
Behavioural segmentation is the practice of clustering customers and potential customers according to their
understanding of, uses for, and responses to products and services. Typically, these distinctions are tied to the
reasons that customers buy and use products. Behaviouristic segmentation may include volume usage rates,
expenditure, brand loyalty levels, benefits sought, price sensitivity and end-use.
Ferrell & Hartline, (2014) believe behavioural segmentation is among the most powerful approaches because it
uses actual consumer behavior or product usage to make distinctions among market segments. Consequently,
behavioral segmentation, unlike other types of consumer segmentation, is most closely associated with consumers’
needs.
Although behavioral segmentation is a powerful tool, it is however quite difficult to execute in practice. For example,
conducting research to identify behavioral segments is quite expensive and time-consuming. Also, the personal
characteristics associated with behavioral segments are not always clear.
Segmenting business markets

Market segmentation is applicable in business markets just as it is in consumer markets. There are however
significant differences in the segmentation approaches. (see Table 5.1)

Table 12Table 5.1: Business market segmentation
Source: Perreault & McCarthy (2005)
Alternatives to market segmentation

Market segmentation and the approaches discussed above are not universalities accepted as the best starting
point for strategic marketing, and there are other approaches that could be used as an alternative to market
segmentation or in conjunction with it. A company with relatively few large customers, for example, will struggle to
effect market segmentation approaches. Also, a market which is relatively homogeneous would be difficult to
differentiate or segment. Some common alternatives to segmentation are one-to-one marketing, mass marketing,
and permission marketing.
The one-to-one marketing

This approach is used where each solution for a customer is unique and specifically tailored to their needs. This
approach has been used successfully in luxury and personalised products aimed at the upper end of the market.
One-to-one marketing approach can be used in conjunction with other marketing approaches such as market
segmentation.

Mass customisation
Advances in technology have enabled certain categories of products and services to be customised on a large
scale.
Permission marketing
Permission marketing occurs where customers sign up to be part of a market segment – in other words, they give
the marketer permission to market to them. For example, by checking a ‘like option to receive information’ from a
specific organisation provides that marketer explicit authority to send their marketing material. There is however
an option to reverse the consent.
Activity 5.1
With mobile marketing, mass customisation renders conventional market

segmentation useless. Discuss customisation as an alternative type of
segmentation.
5.3.2 The market segmentation process

Market segmentation is a three-step process and marketers should begin the market segmentation process by
understanding and defining the market to be segmented.
Think Point
A good market segmentation process should differentiate between the B2B and
B2C market segments..
Define market Decide on Identify and

and scope of segmentation profile
segmentation approach segments

Step 1 – Define the market and scope of segmentation

The market comprises of the totality of possible products that will satisfy consumer needs. Segmentation would be
more accurate if done at a product level e.g. soft drink market. The consumer decision-making process informs
marketers on how to win consumers over their competitors.
The decision-making process in the business-to-business (B2B) market segment differs significantly from the
Business-to-consumer (B2C) market. The purchase decisions in the business market are predominantly made by
the buying centre’. The buying centre comprisses of a number of role players who play different roles towards
purchases.
The buying centre role players

• Gatekeepers – controls the flow of information to and from the buying centre
• Influencers – affect the decision by providing information regarding alternatives (technical expert)
• Deciders – make the ultimate buying decision
• Buyers – have the formal authority to select a supplier and conclude the transaction
Marketers should have some idea of how purchase decisions are made in the two markets.
Step 2 – Decide on an approach to segmentation

The various approaches to market segmenting are;
• A priori segmentation
• Hypothesised segmentation
• Bottom-up segmentation
• Utilise existing knowledge about segments
• Qualitative market research in segmentation
• Quantitative market research in segmentation.
Step 3 – Identify and profile segments

Although the value of segmentation, targeting and positioning is widely accepted, some organisations experience
problems in implementing successful segmentation projects. The ultimate result is the failure to identify a target
market meaning that the organisation will find it difficult to design target market-driven strategies.
There are numerous barriers to segmentation development ranging from capability to resource constraints.

5.4 Targeting strategies

The process of identifying and profiling a market segment should include assessing which segment will contribute
to the organisation’s strategic objectives e.g. revenue growth, or profitability. Mindful that some market segments
offer only short-term benefits and would not be worth pursuing. The discussion below is a multi-disciplinary
approach to assessing the attractiveness of a market segment.
Activity 5.2
The segment attractiveness factors (SAFs) are a duplication of Michael Porter’s

five forces model. Provide a critical view.
5.4.1 Assessing segment attractiveness

The following steps can be followed to assess the strength and weaknesses of the potential market segment.
• Step 1 – identify segment attractiveness factors (SAFs)
• Step 2 – Weight the SAFs
• Step 3 – Define SAF evaluation parameters
• Step 4 – Rate segments (see 5.2)
Table 13Table 5.2 Assessing segment attractiveness – an example
From Table 5.2, the most attractive market segment is ‘eco-warriors’ and the least attractive being ‘First-time
buyers’.

5.4.2 Assessing relative competitive position

The analysis below will help to determine how well the organisation is positioned in each of the segments when
compared to competitors.
• Step 1 – identify critical success factors (CSFs)
• Step 2 – Weight the CSFs
• Step 3 – Rate segment competitors on CSFs
Table 14Table 5.3 Assessing relative competitive positioning – an example
From Figure 5.3, the most competitive product is new cars under R150 000 hence marketers need to come up with
strategies for the eco-warriors to purchase new cars under R150 000. The other alternative is to push e-volve
compact brand towards the eco-warriors.
5.4.3 Determinig market targets

The results of the segment attractiveness Table 5.2 and relative competitive positioning assessment (Table 5.3)
can be plotted on one axis and relative competitive position on the other. Table 5.4, illustrates four specific targeting
strategies:
1. Niche or concentration strategies avoid competition with large competitors across multiple segments and focus
on a single substantial segment e.g. Louis Vuitton
2. Mass marketing strategies target the total market with one undifferentiated offering. E.g. sugar brands
3. Differentiated marketing strategies target two or more segments with different value propositions and
positioning strategies. E.g. Shoprite Holding
4. Growth market strategies focus on a few high-growth product-market segments, even if they are initially not
very large.

ble 15Table 5.4 Selecting segment strategies
5.5 Differentiation and positioning

Positioning can be done in two possible ways, firstly compete ‘head-on’ or avoid direct competition (physical
positioning). Secondly, an organisation should position itself in the hearts and minds of customers in the segment
(perceptual positioning).
5.5.1 Competitive strategy

The competitive strategy involves an organisation’s decision on how to compete in a segment and which
competitive stance to take. Generally, strategies can be classified as being offensive or defensive.
5.5.2 Positioning
Marketers should decide on the positioning concept i.e. how management wants customers and potential
customers to view the company, product, or brand. This must be supported by a positioning strategy. Lastly,
marketers must evaluate whether positioning objectives were attained in the target segment.

Figure 20Figure 5.2 The three stages of strategic positioning
5.5.3 The role of perceptual mapping in determining positioning strategies
Think Point
Contemplate on the positioning variables used to differentiate branded

supermarkets in South Africa.
Perceptual mapping is a graphic depiction of the competitive positions occupied by different competing companies
or brands. The two most common combination of attributes used to compare competitors on price and quality.
Other positioning dimensions are:
• Product features
• Product benefits
• Heritage
• Manufacturing process
• Ingredients
• Endorsements by customers, intermediaries or celebrities
• Competitive comparisons
• Environmental friendliness
• Value for money

Think Point
Have you ever thought of a perceptual map as an overly simplified positioning tool that
omits an array of potentially critical positioning variables? Think of reasons for its continued
use as a positing framework.
The steps in perceptual mapping are as follows:

• Step 1: Determine the product-market segment
• Step 2: Design perceptual map
• Step 3: Identify competing products or brands
• Step 4: Plot all competitors on the map.
Case Study
Interplay between air passengers' service quality, satisfaction, loyalty and loyalty
programmes in South African owned airlines
This article examines service quality, passenger satisfaction, loyalty programmes and
passenger loyalty to the South African owned airlines. As in the global airline marketplace,
passengers are the key constituents of the South African airline industry. Therefore,
providing service excellence and quality should be the airlines' main fiduciary duty and
responsibility. From a passenger's perspective, excellent service quality induces customer
satisfaction and future loyalty and patronage. From an airline's perspective, providing
service quality promotes competitive advantage and increases the prospect of enjoying
ongoing passenger patronage and loyalty (Steven, Dong & Dresdner 2012:743). In the
global airline industry, loyalty or frequent flyer programmes are widely used to build stronger
links with customers (Keller 2013:189). The rationale is: 'identifying, maintaining, and
increasing the yield from a firm's best customers through long-term, interactive, value-
added relationships' (Keller 2013:189).
Source: http://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S1684-
19992017000100020
From the above extract and using price and value for money as the only differentiators,
develop a perception map to illustrate the unique positions in the marketplace occupied by
competing airlines plying the South Africa domestic routes.

5.6 Conclusion
A business is more likely to succed if it correctly identify and target lucrative market segments. Markers would then
need to offer products, services, and brands that match the value of customers in the market segments. The
targeting process essetially points marketers to market segments that are likely to be more profitable, easier to
interact with, and offers future growth. After profiling the best market segment, the next step would be to select a
positioning strategy.
5.7 Summary
When done deligently, the process of segmentation, targeting and positioning (STP) brings success to market
oriented businesses. Different types of segmentation variables are utilised culminating in luctrative market
segments being selected. Ampel targeting strategies are exlplored before a positioning strategy is derived for thr
chosen market segment. A well created position helps the business to communicate value to their market segment.

1. Demographic segmentation is no longer the predominant method used to divide
consumers into segments because consumers have become less predictable in their
buying habits. If this is true, then should we trust LSM guided segmentation? Refer to
how Shoprite utilises LMS based segmentation.
2. Segment Coca Cola South African markets according to (a) brands (b) type of
customers. (c) Geographical areas. What do you presume as the best way of
segmenting the Coca Cola market?
Answers Guidelines
1. Four common segmentation variables are commonly used including demographic

segmentation. Demographic segmentation is easy to implement due to the availability of
information but this does not mean it is the best way of segmenting a market. Read
section 5.2.1 for further explanations
The LMS framework is a combination of demographic, geographical, product, service
usage and lifestyle measures, developed by the South African Advertising Research
Foundation (SAARF). (visit www.saarf.co.za)
Shoprite uses LSM groupings as a means to position its various brands. The LSM
groupings seem to provide authentic segmentation but they emphasise demographic
segmentation. The LMS can be used in the B2C market segmentation but will fail to
effectively segment the B2B market.

2. A practical segmentation exercise for Coca-Cola will be multifaceted. This is evident

when you view their organisational structure. It divides the business according to
brands, geographical regions and type of customers
Answers to the Case Study

The probable positioning map would be as illustrated below
Case Study
Case Studies will give you an opportunity to apply theory to practice.

Unit
6: Sustainable Competitive
Advantage (SCA)

6.2 Sustainable competitive advantage • Describe the essence of attaining sustainable competitive
advantage
6.3 Global competitive advantage • Evaluate the theoretical frameworks used to accesses and
achieve international sustainable competitive advantage
6.4 Sources of global competitive • Identify sources of global competitive advantage

advantage (the four Cs)
6.5 Marketing strategies for growth • Prescribe marketing strategies for growth markets
markets
6.6 Marketing strategies for mature and • Recommend appropriate strategies for both mature and
declining markets declining markets
6.7 Testing strategies • Demonstrate knowledge of systematically evaluating winning

marketing strategies and plans

6.9 Summary
Prescribed Textbook

Cape Town Chapter 6, P 165 – 200.

Pearson.Chapter 10, P239 - 266

6.1 Introduction
Attaining sustainable competitive advantage (SCA) locally and globally is one of the main reasons for an
organisation’s continued success and extended product life cycle (PLC). Once SCAs are established, marketers
must incorporate them in the marketing strategies. This unit established sources of competitive advantage and
strategies thereafter that can be deployed to retain the competitive advantage. Various business growth options
are explored in different market situations. Strategies should be deployed after they have been tested.
6.2 Sustainable competitive advantage
Think Point
Do you agree that Take-a-lot is currently enjoying a sustainable competitive

advantage over competitors?
Competitive advantage occurs when an orgnaisation successfully formulates and executes business strategies
that are different from and create more value than the strategies of its competitors.
Activity 6.1
Diagnose the phrase sustainable competitive advantage (SCA) citing examples

related to each word in the phrase
Answer to Activity 6.1

Breakdown of the definition of (SCA)
• Sustainable means that what makes the organisation unique from its competitors to such an extent that
competitors find it difficult to replicate or too costly to imitate
• Competitive means that the organisation is able to successfully compete against competitors, providing
it with a uniqueness that is sustainable over a prolonged period
• Advantage (the essence), means that the organisation has an advantage over other organizations, for
instance, the technological superiority of the Research and Development section of the organisation that
provides new products and services.

6.1.1 The steps in creating a SCA

A strategic competitive advantage (SCA) can be created in the following format:
Figure 21Figure 6.1: Steps in obtaining a sustainable competitive advantage
6.3 Global competitive advantage
Think Point
China as a country has a competitive advantage based on cost leadership.

What would you suppose South Africa’s competitive advantage is based on if
there is any?
Just like companies do, countries can also develop national competitive advantages that are reffered to as
comparative advantages. A country’s comparative advantage can be defined as the net effect that is created when
a country specialises in the manufacturing of products that it manufactures most efficiently and from buying
products from other countries that it manufactures less efficiently.

6.3.1 Ownership-based
An ownership-based global competitive advantage is created when an organisation has ownership of a valuable
asset or factor, or a strong market position – e.g. for a long time, Toyota International has been the global market
leader in vehicle sales.
6.3.2 Access-based
An access-based competitive advantage is created when an organisation has superior access to a factor of
production or product market e.g. when a mine which enjoys mining tenure on its mining claim.
6.3.3 Proficiency-based
A proficiency-based global competitive advantage is created when an organisation has superior knowledge,
competence, or capabilities in relation to its competitors e.g. having patent rights to a product or holding on to a
special recipe such as the Coca-Cola’s special ingredients for coke.
6.4 Sources of global competitive advantage (the four Cs)
Figure 22Figure 6.2: Model for Global competitive advantage

Source: MA, H. (2004: 909)
Ma’s model proposes that global competitive advantage is created by ‘the Four Cs’: competition, creation, co-
option, and co-operation (see figure 6.2).

6.4.1 Competition
Competition can be discussed as aggressive behaviour towards rival(s) companies. Figure 6.3, illustrates six
methods for creating a competitive advantage in a competitive environment.
Figure 23Figure 6.3: Competitive advantages in the competitive environment
Timing and positioning (first-mover advantage) - Usually first-in-the-market advantages are enduring due to access
to the market which late entrants cannot readily match. Think of Vodacom and MTN against Cell C and Virgin
mobile.
Pre-emptive move - The pre-emptive move ties in with the first-mover advantage and relates to the fact that being
first in the market can secure the most luctrative segments or niches, making it more difficult for competitors to
enter the market. The first-mover can protect its market with the use of patents or raising entry barriers e.g.
Microsoft which ensured that other computer companies had to use Microsoft software in running their operating
systems.
Direct/frontal attack - Direct attack is a less commonly used strategies due to the risk of backlash but may payout
in certain circumstances. Succeeding in a frontal attack creates a competitive advantage for an organisation by
indicating its aggressiveness to the opposition. The victory sends a strong statement to other competitors and
instills confidence to customers of the commitment the organisation has in this market.
Flanking attack - The tactic is not to confront a competitor face-to-face, but to do so in a more roundabout way.
A flacking attack should be made only after calculating risk because competitors may be ignorant, lack interest, or
find it futile to try to counteract the attack.

Encirclement - This strategy takes flacking attack further by indirectly attacking the competitor. The aggressor
builds its strength in areas where the competitor does not feature. Peripheral markets are attacked first before a
head-on assault is launched e.g. Red Bull encirclement strategy.
Concentration - Concentration refers to an organisation focusing its resources on a specific segment of the market
in order to obtain a competitive advantage. E.g. First for Women.
6.4.2 Creation and innovation

Innovation remains one of the best ways to create a competitive advantage and is inherent in the quest to develop
a sustainable competitive advantage (SCA).
Creating new products or new markets - The creation of new capabilities, resources, products, and markets will
set an excellent way to avoid direct competition.
Effective organisational structure – aligning the organisational structure with company strategy can provide SCA
that an organisation can enjoy.
Organisational learning – an organisation can use the collective process of sharing knowledge to improve
performance. When knowledge is accumulated and utilised to obtain best-practice, a competitive advantage can
be obtained as in the case of Toyota
Superior corporate culture and creative HR practice – a superior corporate culture can be described joint belief
in value systems that are instilled in an organisation and that guide employees in their actions.
6.4.3 Co-operation
Figure 24Figure 6.4 Competitive advantages through co-operation

To create competitive advantage through co-operation requires that an organisation initiates or participates in
collaborative agreements with other businesses, i.e. alliances are formed in order to overcome a common
competitor. Figure 6.4, illustrates six methods for creating a competitive advantage through co-operation.
Obtaining a foothold – one of the most reliable ways a company can enter a market is by co-opting local partners
that have access to that market. The advantages of this strategy range from outlaying less initial capital to develop
the market to working with a partner with insider market information.
Pooling resource and sharing risks – this enables role players to tackle challenges that they would not be able to
undertake independently. Less capital and effort is required and risk is spread.
Sharing complementary resources and skills – business can pool complementary resources and skills to
venture jointly into opening up a new market or come up with a new product.
Learning from partners – in some highly technical fields or industries, businesses are forced to co-operate
because of, among other things, the speed of innovation and the high costs of R&D.
Building alliances – forming alliances helps the business to overcome common competitors. Co-operation is
better than the competition.
Using multiple alliances – working with multiple partners across the globe open up various opportunities, e.g.
logistics and supply options.
6.4.4 Co-option
Co-option involves collaboration between different parties or organisations to create a competitive advantage by
eliminating threats or seizing opportunities.
Figure 25Figure 6.5: Different forms of co-option

Tacit collusion – occurs when two or more competitors engage in a salient undertaking to limit competition to a
certain area, or to share the market or to put pressure on a rival who does not compete fairly, e.g. Nike and Reebok
that compete on brand image but with a tacit understanding that price competition will diminish the image of both
brands.
Enlisting a third party – a third party may be roped in to help an organisation to attain a competitive advantage
when there is intensive rivalry, i.e. a third party can swing the balance in favour of one organisation.
Lobbying the government – an organisation may lobby government for a more favourable business environment,
e.g. may request the introduction of barriers of entry to foreign competitors in domestic markets either arbitrary of
through the use of import taxes. Infant industry arguments are widely used in developing countries.
Engaging influential stakeholders – engaging and gaining support or acknowledgement from influential
stakeholders may bring competitive advantage. Influential stakeholders may take the mold of religious leaders,
social or cultural groups, and trade unions.
Co-opting customers – getting customers on your side assures the organisation of continued support and
rejection of competitors who may want to enter the market or community.
6.5 Marketing strategies for growth markets

Growth can be measure in various ways; increase in market share, turnover, profit, or the number of employees.
The success of most aggressive or competitive strategies are measured by the growth achieved hence growth is
the underlaying constant.
Igor Ansoff in the 1960s explored growth options available for marketers to pursue. His model is essential for
strategic marketing planning where it can be applied to look at opportunities to grow revenue for a business through
developing new products and services or "tapping into" new markets. Organisations have four main options to
achieve growth;
• Product development, and
• Diversification

Figure 26Figure 6.6: Business growth options
Case Study
Coca-Cola: Ansoff Matrix

The objective of every business is to grow, be it a start-up that is just closed its first deal or
an established market leader seeking to further increase profitability. However, how does a
business decide upon the best strategy for growth? The Ansoff Matrix management tool
offers a solution to this question by assessing the level of risk – considering whether to seek
growth through existing or new products in existing or new markets.
To demonstrate the robustness and legitimacy of Ansoff’s Matrix, it has been applied to
Coca-Cola, the most well-known trade name in the world and a company today operating
in over 200 countries; and a brand that has undertaken countless growth strategies in its
100+ year history.
Source: https://www.business-to-you.com/ansoff-matrix-grow-business/
Explain how Coca Cola has adapted options availed by the Ansoff growth matrix in pursuant
of growing its sales volumes.

6.5.1 Market penetration (growth in the existing product market)

The commonly used strategy to achieve growth is market penetration, i.e. encouraging existing users of a product
to buy or use more of the same product. Examples of how customers can be encouraged to increase the frequency
of use and the quantity used of the product are:
• Promoting alternative uses of a product on its packaging
• Offering incentives for using a product
• Adjusting the ingredients of a product
• Giant-sized packaging
• Increasing spending on promotions
6.5.2 Product development (new product sold to the existing customer base)
Growth through product development implies that the organisation develops new products to be sold to existing
customers. This is usually achieved through innovation supported by R&D. the current product mix can be modified
and extended. The organisation can achieve this through add product features, i.e. product refinement, expand
the product line, new generation products, and introduce innovative products.
6.5.3 Market development

Growth can be achieved when through developing new markets, i.e. the present products can be marketed in new
geographical or psychological markets. Global expansion, creation of new segments or creation of new target
markets can yeild sales growth.
6.5.4 Diversification
Diversification is yet another growth alternative that is relatively dynamic and risky. Diversification calls for entering
uncharted waters – entering new markers with new products. Two options available are related and unrelated
diversification.
Related diversification occurs when an organisation provides a variety of complementary goods and services,
whereas unrelated diversification refers to expansion into unrelated industries.
Altenative diversification routes - diversification can arise due to joint ventures, alliances, mergers and acqusitions.
Activity 6.1
Investigate reasons other than the growth of sales that sway corporations to seek growth in
international markets.

6.6 Marketing strategies for mature and declining markets

The declining stage of the product life cycle is usually characterised by lower sales figures and reduced profits.
The overall growth rate is either stagnant or declining. Most marketers will also consider leaving the market.
Howevr, this is not always the correct decision.
6.6.1 Characteristics of a mature and declining market

Characteristics of a mature and declining market are:
• The occurrence of excess capacity
• Competition which intensifies
• Problems in creating product differentiation
• Problems with distribution channels
• Problems in realising increased profits and lowering costs.
6.6.2 Strategies in mature and declining markets

Four strategies can be considered as options in declining and hostile markets:
• Growth, by revitalising the industry or a sub-segment of the market
• Being a profitable survivor
• The option to milk or harvest
• The option to exit or liquidate.
The video rental business has been on the decline. What advice would you
give to a video rental operator owning several outlets in most urban areas of
South Africa?
6.7 Testing strategies

Multiple strategies may cause a fair share of confusion if implemented jointly or one after another. Instead, it is
prudent to thoroughly assess the best possible strategy to adopt. Moreso, some strategy when implemented jointly
will conflict and bring negative results. Below is generic testing criteria proposed (see Figure 6.7) and an evaluation
tool used for assessing the suitability of the different strategies (see Table 6.1).

gure 27Figure 6.7: Generic testing criteria for different strategies
Table 16Table 6.1: Evaluation tool for assessing suitability criteria
Source: Adapted from Johnson, Scholes & Whittington (2008:367)
6.7.1 Qualifiers when evaluating criteria

Marketers should consider the following when evaluating the testing methods in Figue 6.7 above:
• The three methods may lead to conflicting conclusions e.g. one strategy may be suitable for an organisation
but not acceptable to the major stakeholders.
• There must be consistency between the different elements of a strategy, e.g. a competitive strategy decision
of low cost must be in line with the stratgic direction, i.e. product development, and the method used, e.g.
forming alliances
• Sometimes the full consequences of a strategy cannot be measured fully until partly of fully implemented.
This can be risky if huge capital has already been outlaid.

6.8 Conclusion
Attaining startegic competitive advantage (SCA) locally or globally provide companies with comfort as competitors
will need to catch up. SCA is realised from successful formulation and execution of business strategies that are
different from and ultimately create more value for the organisation than the strategies of competitiors. The
strategies are designed for different market situations.
6.9 Summary
The steps in creating Sustainable competitive advantage (SCA) are discussed and sources of global and local
SCA outlined. SAC can originate from competitions, creation and innovation, co-operation, and co-option. Different
strategies are created for the different market situation such as strategies for declining markets. Strategies cannot
be deployed before they are tested for suitablity, feasbility, and acceptability. The next unit will look at how an
organisation can prosper through product and service innovation.

1. Dr Chris Barnard performs the world's first human heart transplant. On 3
December 1967, South African doctor, Dr Christiaan (Chris) Barnard,
performed the world's first human heart transplant at Groote Schuur Hospital,
Cape Town. (SAHO, 1967). Based on the extract, what would you describe?
(a) The country’s global competitiveness in the medical field
(b) The sources of global competitive advantage
2. Assume you are a marketing strategist in the beverage industry. Which
operational strategies would you deploy to achieve growth in the existing
product market?
3. What are the tell-tale signs of a declining market?
4. One prescribed generic strategy-testing criteria is to consider the suitability,

feasibility, and acceptability of the different strategies. However, not all
suitable strategies are feasible, yet, not all feasible strategies are
acceptable. How would resolve the above conflicting situation?

Answers

1(a) South Africa has a good history in medical research and medical practices and
commands respect globally. 1(b) Develop answer from section 6.3
2. Product development would possibly be the best strategy.
3. Please refer to the characteristics of a mature and declining market on section 6.5.1
4. The question can be answer after reading through section 6 above
Answers
Answers for the Case Study questions:
Market Penetration: (Existing Market, Existing Product)

This strategy involves an attempt to increase market share within existing industries, either
by selling more product to established customers or by finding new customers within these
markets – typically by adapting the ‘Promotion’ element of the Marketing Mix. Due to the
incredible strength of Coca-Cola’s brand, the company has been able to utilise market
penetration on an annual basis by creating an association between Coca-Cola and
Christmas, such as through the infamous Coca-Cola Christmas advert, which has helped
boost sales during the festive period.

Product Development: (Existing Market, New Product)

This involves developing new products for existing markets by thinking about how new
products can meet customer needs more closely and outperform competitors. A prime
example of this was the launch of Cherry Coke in 1985 – Coca-Cola’s first extension beyond
its original recipe – and a strategy prompted by small-scale competitors who had identified
a profitable opportunity to add cherry-flavoured syrup to Coca-Cola and resell it. The
company has since gone on to successfully launch other flavoured variants including lime,
lemon and vanilla.
Market Development: (New Market, Existing Product)

Thirdly, the market development strategy entails finding a new group of buyers for an
existing product. The launch of Coke Zero in 2005 was a classic example of this – its
concept being identical to Diet Coke; the great taste of Coca-Cola but with zero sugar and
low calories. Diet Coke was launched more than 30 years ago, and whilst more females
drink it every day than any other soft drink brand, it came to light that young men shied
away from it due to its consequential perception of being a woman’s drink. With its shiny
black can and polar opposite advertising campaigns, Coke Zero has successfully generated
a more ‘masculine’ appeal.
Related Diversification: (New Market, New Product)

This involves the production of a new category of goods that complements the existing
portfolio, in order to penetrate a new but related market. In 2007, Coca-Cola spent $4.1
billion to acquire Glaceau, including its health drink brand Vitaminwater. With a year-on-
year decline in sales of carbonated soft drinks like Coca-Cola, the brand anticipates the
drinks market may be heading less-sugary future – so has jumped on board the growing
health drink sector.
Unrelated Diversification: (New Market, New Product)
Finally, unrelated diversification entails entry into a new industry that lacks important
similarities with the company’s existing markets. Coca-Cola generally avoids risky
adventures into unknown territories and can instead utilise its brand strength to continue
growing within the drinks industry. That said, Coca-Cola offers official merchandise from
pens and glasses to fridges, therefore exploiting its strong brand advocacy through this
strategy.

Unit
7: Productivity and Service
Innovation

7.2 Defining innovation • Understand the magnitude at which innovation takes place
7.3 The role of innovation • Appraise why innovation is an important ingredient to economic
growth
7.4 The innovation process • Outline an innovation process
• Apply the innovation process when making innovation decisions

in an organisation
• Establish an environment conducive to creativity
• Formulate concepts from innovative ideas
7.5 A modern perspective on the • Design communication to reach the target audience
innovation process
7.6 Organisational issues • Analyse how the hierarchy in an organisation gets involved in
innovation
7.7 Measuring innovation success • Deploy measuring technics to assess innovation progress
7.9 Summary
Prescribed Textbook

Cape Town.Chapter 7, P 203 – 223.
300 - 329 & Chapter 13, 342 – 352.

7.1 Introduction
Product and service life cycle was discussed in Chapter 3 relating to how product/services are managed and
monitored as they compete in the marketplace. Preceding this process is how and why new products and services
are developed – the notion of innovation. The two-prong process – innovation and marketing are basic functions
that marketers must master as only companies that succeed in developing and managing new products and
services reap the rewards. Innovators do not just ruffle competitions but places their products ahead of competitors
who will only but try to play catch up. Marketers should continuously track the performance of their brands so that
they can pick up the slightest shift in consumer tastes and preferences. Innovators may wish to go beyond
repackaging of current products and develop completely new market offerings.
In this unit, the process of actually developing a new product or service is described and discussed.
Case Study
Five Innovation Lessons from 3M

3M is an iconic innovative company. Although mostly known for “sticky and scratchy things”
(post-its and sandpaper), 3M have over 55,000 products, releasing 25 new products per
week and had over 3700 global patents granted in 2016.
Over 90,000 employees, 200 manufacturing plants and 86 labs are all focused on
progressing 3M’s innovation agenda, but how do 3M maintain and sustain this engine of
innovation?
Wanting to know the answers, I visited the 3M Innovation Centre (Bracknell, UK) in October.
From the moment I stepped in the door, I felt the inspiration and the potential to make a
difference. With pictures of “Hall of Fame Innovators” and 3Ms innovation elements plastered
all around the building, I knew this visit was going to be special.
I met Wynne Lewis, UK R&D Director and Adam Newland, UK&I Senior Technical Manager,
who shared some of 3M’s secret sauce: “Research is the transformation of money into
knowledge; innovation is the transformation of knowledge into money.” 3M understand the
importance of knowledge, and know knowledge is used to create value.
Source: https://www.innovationexcellence.com/blog/2017/11/07/five-innovation-lessons-
from-3m/
Contrast organisational factors that kept 3M innovative for decades to factors provided in
your study guide.

7.2 Defining innovation
Think Point
Innovation has attracted numerous definitions. What is your fitting definition of

innovation?
One popular perception of innovation is that it has to do with developing brand-new, advanced solutions for
sophisticated, well-off customers through the exploitation of the most recent advances in knowledge (Fagerberg,
Srhole & Verspagen, 2009). Yet, Zetler, (2013: 12 -14) opines that the word innovation makes people think that a
vast amount of investment must be spent to develop hi-tech gadgets. Economist Joseph Schumepter: “We can
distinguish five types of innovation: new products, new markets, new methods, new sources of supply, and new
ways to organise business”.
A few levels of innovation commonly identified are:
• Incremental innovation: Represented by small changes to the existing market offering to add value, for
example, adding a flavour to an existing consumer product.
• Substantial innovation: The innovation is readily visible and may include better delivery of a service
such as additional product support.
• Transformational innovation: The innovation is quite radical and may be driven by advances in
technology such as the adoption of the Global Positioning System (GPS) to replace the now-defunct map
books.
Search the Internet (The World’s Most Innovative Companies) to gather information
on the breadth and depth of innovativeness.
7.3 The role of innovation

The role of innovation is illustrated in figure 7.1. At a micro level, many successful companies regularly include
innovation as part of their strategic plans. A large proportion of innovator’s profit is obtained from new or
significantly improved products. At a macro level, innovation can be deemed to lie at the core of economic
development. Countries that persistently innovate have managed to build resilient, robust and highly competitive
economies. Among other researchers, Aaker, (2004) suggests that there is a relationship between innovation and
macroeconomic growth.

Competition
Creates jobs
Figure 28Figure 7.1: The role of innovation
Innovation creates competition as companies try to win customers by offering superior products - all to the benefit
of consumers. Multinational corporations, for example, would rather seek to attain a long-term competitive
advantage through product or service innovation than compete on price which usually brings short-term benefits.
In addition to competitive advantages created by innovation, evidence suggests that innovation not only creates
jobs, but it could also lead to the development of better-skilled workers. Increased consumption is likely going to
support the industrial sector making new-capital investment possible.
In a broader societal context, innovation improves the quality of life of people. South Africa has its fair share of
well-known innovations.
Think Point
Perceive the link between economic development and innovation. Use

examples to motivate the argument.

7.4 The innovation process

The innovation process for both products and services is a step-by-step approach, starting with the analysis of
information to decide on innovation as part of a marketing strategy. An innovation development process would
typically start with generating new ideas, and then follow a logic cause-and-effect sequence of actions until it
concludes with the launch and commercialisation of the innovation.
Figure 29Figure 7.2: The innovation development process

Source: Ventor, (2018: 208)
7.4.1 The traditional innovation process
• Idea generation
Idea generation can be formal (emanating from strategic planning) or informal (emanating from casual
discussions).
• Idea screening
To avoid dropping potentially good ideas, it is important that the screening done by a multidisciplinary
panel to make the review as objective as possible.
• Concept testing
Ideas that survive the initial screening are now evaluated more rigorously. The product idea is
developed further considering what features are most valued by customers.

• Business analysis
The business case for the product is developed. The purpose of this stage is to determine what the
potential revenue of the product is, compared to the cost of producing it, and whether the profits generated
will meet the company’s investment criteria concerning the required return on investment.
During this phase, the actual development and testing of the product will take place. A prototype may be
built to gather feedback and refine the final product. The developed product may be test-marketed before
market launch.
• Test marketing
Rather than launching a product into the whole market all at once, innovators may opt for a test marketing
phase to iron out any problems that remain. Following a successful test-marketing phase, the product is
ready for commercialisation.
• Commercialisation
The product is ready to be launched through the selected channel. This process is supported by an
extensive marketing and public relations campaign to ensure that the intended market becomes aware of
any new product as soon as it launched.
This traditional innovation process has been criticised for lacking insights into informing marketers on how fast the
innovation will be adopted. Among other things, a modern perspective on the innovation process has been put
forward and it is based on three equally important legs:
• Leg 1 – get insights
• Leg 2 – create the idea
• Leg 3 – communication
7.5 A modern perspective on the innovation process

The modern perspective on the innovation process postulates that the idea of successful innovation is based on a
process that stands on three equally important legs:
• Leg 1 – get insights i.e. getting meaningful market insight
• Leg 2 – create the idea i.e creating a new product, service or business model that meets that need
• Leg 3 – communication i.e communication that brings the first two together

Get insight
Create the
Communication
idea
Figure 30Figure 7.3 The innovation process

Source: Maddock & Uriarte, (2011)
7.5.1 Leg 1 - Get insights

Getting meaningful market insights requires that marketers identify unmet or partially met needs. An example could
be a quality product that consumers have accepted readily but the marketer failed to inform how to dispose of the
remnants or residue after consumption. A marker can capitalise on this tension that consumers have. A marketer
after realising this problem may offer an alternative product which does not burden consumer after they have
consumed the product.
To refine the unmet need into a more concrete reality, marketers need to:
• Define the success that you want in your organisation from the innovation. This success can be detailed in
terms of the revenue that you realise
• Define the characteristics that the intended market segment should have
• Find sufficient data to assist you in formulating a new product, service or business proposition that correlates
with your definition of the success that you want and the characteristics of the market segment that you intend
targeting

The process of formulating good insight is explained in Figure 7.4.
Figure 31Figure 7.4: Finding insight

Source: Maddocak & Uriarte, (2011)
7.5.2 Leg 2 - Create the idea

In this step, a good mix of creativity and technical ability is required. One of the key issues to be addressed is
whether the idea will break the tension that was diagnosed in Leg 1. A multidiscplinary team can work together to
thoroughly examine the feasibility of the idea.
Creativity can be encouraged by the following actions:
• Creating an environment where the climate is dynamic, energetic and inspiring
• Give people the freedom to be creative
• Assure participants that they can be open and frank
• Create an atmosphere of fund and humour
• Work with the ideas that come up

Various options to the innovation may form but a consencus should be reached and a test to how attaractive the
option is can be subjected to a framework (see Table 7.1).
Table 17Table 7.1 Classifying ideas
Source: Maddock & Uriarte, (2011)
After classifying the ideas into a few options, the creative team will have a few fairly solid ideas that could be
advanced into concepts. The concept should have at least meet the following requirements;
• A descriptive and evocative name
• A good match for the organisation
• A clear benefit
• Use visuals
• Create headlines and taglines
The concept should be 100% understood by the intended market. The litmus test for a concept usually used is the
80 x 30 test i.e. can the concept be described in 80 words or less and can it be read in 30 minutes or less. The
creative team can seek comments and feedback after a pilot.
7.5.3 Leg 3 - Communication

So the saying goes - “A brilliant idea badly communicated becomes a bad idea.” The ideas have to be aptly
communicated. Some practical tips to effective communication are;
• Make sure that you understand the story from a customer’s perspective i.e. the communication must
reflect the reality of the target market.
• Use simple words.
• If the market does not understand the benefits of innovation, it can be regarded as a failure.
• Use social media as an innovation tool and not as only a communication tool.

7.6 Organisational issues

The success of an innovation drive in organisations lies in the support that it gets from top management.
Organisations such as 3M and Unilever duly support the drive for innovation and would set aside a substantial
budget for R&D. In such innovation orientated organisation, innovation is part of the organisational culture.
The organisational capability to innovate has seven distinct elements:
• Create a vision and strategy for innovation
• Invite entrepreneurship and risk-taking
• Use information to assess the success
• Allow divergent thinking
• Reward innovation
• Failure not punished but seen as part of learning
• Expedite technological competence
7.7 Measuring innovation success

The total innovation management (TIM) model shared in Figure 7.5 is a comprehensive guideline to aspects that
should be considered in the management of innovation.
Figure 32Figure 7.5 Total innovation management model

Source: Hajikarimi, et al, (2013)

7.8 Conclusion
Innovation is part of organisational development. As changes occur on the marketspace, organisations must
equally innovate least they lag behind competitors. Marketers innovate to keep in touch with the changing
consumer needs.
7.9 Summary
Product and service innovation is discussed in unit 7. Innovation was classified as new product or service to the
market. The role of innovation cannot be underestimated as it is an important part of the future of progressive
companies. The traditional innovation process is still relevant and can be used to analyse and measure the
innovation. Unit 8 will discuss how branding can create strategic competitive advantage.

1. Innovative countries are by far more superior in creating a decent living
for their citizens. Discuss the positive spinoffs that result from
innovative decision-making.
2. Product launches are celebrated events mostly characterised by ‘glitz

and glamour’. For a product to fail immediately after launch is a
testimony of a trail of errors. Provide an account of activities that
precede product launch.
Answers

1. Innovation does not just lead to economic growth but to economic
development. Read section 7.2.
2. Outline the steps in ‘the traditional innovation processes identified in

section 7.3.1

Answers

Organisational factors that make 3M a dedicated innovative company are:
1. Spend Time in the Smokestacks
2. Create Innovation Time
3. Accept that Innovation is a Bumpy Journey
4. Remember the Innovation Heroes
5. Encourage Collaboration and Give Help
The above are very similar to the 7 factors given in Section 7.2 of the study
guide

Unit
8: Branding and Positioning

8.2 The concept of brand • Understand opportunities created by brands
• Formulate and justify brand development decisions
8.3 Building a brand • Illustrate how holistic branding creates strong brands
• Apply different positioning models to position or reposition

brands
8.4 Brand positioning • Demonstrate how brand differentiation creates competitive

advantage
8.5 Managing the brand • Demonstrate knowledge of the nature and process of brand
management
8.6 Brand measurement • Track brand performance
8.7 Brand portfolio strategy • Evaluate the practice of a multi-brand approach

8.9 Summary
Prescribed Textbook
• Venter, P., & Jansen van Rensburg, M. (2018). Strategic marketing: theory and
application for competitive advantage. 2nd Edition. Oxford. Cape Town.Chapter 8, P
226 – 260.
• Hooley, G. J.; Piercy, N. F., Nicoulaud, B., & Ruddy, J. (2017). Marketing strategy and
competitive positioning. 6th Edition. Pearson.Chapter 13, P334 - 342

8.1 Introduction
Brands are a sign of creative marketing and implementation of a comprehensive brand management framework.
Brands enjoy positive spinoffs such as brand extension and line extension. This unit will detail how brands can
achieve competitive advantage for the company.
8.2 The concept of brand

The development of the principle of brands has been rapid, and the explosive growth of the concept is litered with
a plethora of definitions and interpretations. Whereas the earlier commercial origins of branding centered on the
world of consumer goods, the meaning has evovled to incorperate branding in in a number of marketing spheres
such as in services, products, and organisations (Schmidt & Ludlow, 2002). Kotler, (1999) suggest that the art of
marketing is essentially about building brands and that anything that is not regarded as a brand is a commodity.
Perreault and McCarthy, (1996) offer a limited defition, proposing that branding is the use of a name, symbol or
design.
Gobe, (2001) empahsises the emotional aspect of branding: “Branding is not only ubiquity, visibility, and functions;
it is about bonding emotionally with people in their daily life. Only when a product or a service kindles an emotional
dialogue with the consumer, can this product or service qualify to be a brand”.
Knapp, (2000) offers a succinct definition of branding as ‘the internalised sum of all impressions received by
customers and consumers resulting in a distinctive position in their “mind’s eye” based on perceived emotional and
functional benefits.’
Achieving substential brand equity is every marketer’s dream as a brand can be exploited to satisfy several
avenues of marketing such as brand extension. Brand equity is an important intangible asset value that positively
impacts the balance sheet.
8.3 Building a brand
Activity 8.3
Consider why brands are termed organisational asset that add value to a
business
Building a brand involves far more than merely developing an identifty or logo - a brand needs to be underpinned
by a well-defined set of values and should be anchored in strategy of a business.

Holistic approaches to branding (Schmidt & Ludlow, 2002; Aaker & Joachimsthaler, 2000 ) formed the bases of
strategic brand leadership that was replacing the classic, tactically-oriented brand management system pioneered
in the twentieth century.
The holistic approach to branding is depicted in Figure 8.1, highlighting the many facets of a brand that ultimately
impact its total reputation.
Figure 33Figure 8.1: Holistic branding
Brands are not just build for customers but they need to connect with a multiplicity of audiences or stakeholders.
The typical stakeholders take the form of:
• Sharehoders
• Industry regulators
• Internal staff at all levels
• Media
• Customers
• Communities
• Intermediaries
• Suppliers
• Other funders
• Industry analysts

8.3.1 Brand identity and elements

The identity of a brand is the beginning point of the creation of a persona and a visual encapsulation of reference
point for the consumer.
According to Aaker, (2000) a brand identity is typically made up of the following elements; a name, logo, logotype,
colour, and style.
Name
Over time the name becomes the holder of equity. Naming a brand is important and involves various options such
as:
• Descriptive – names that explain what the company does in literal terms, e.g. General Electric or Standard
Bank
• Semi-descriptive – names that partially convey meaning, often through abbreviation, use of acronyms or
derivation from another language or historic reference, e.g. MTN. Stanlib, or Nike
• Invented or blue sky – names with no direct meaning or derivation, e.g. Kodak
Logo
Logos are a creative design option available to a brand to symbolise its foundational values and meaning, and set
it apart from its competitors. Logos range from simple, modern, and dynamic to complex, heraldic, and
conservative, depending on the strategic intent of the brand owner and the values alluded to above.
Logotype
This a letter-form used to express the name of the brand, and presents another opportunity for marketers to develop
uniqueness and diferentiation in their category and define the foundational personality of the brand e.g. Virgin
Colour
Colour is a definitive part of building early identity and aggregading long-term brand equity. Colour pyschologist
provide vivid arguments matching certain colours to brand personality and brand image. Colour choice remains a
contentious topic given that colour is subjected to different cultural, and religious intepretetions.
The use of colour, however, aids to customer awareness and recall, forming an intergral and critical part of brand
building process. You cannot wonder why fast food restaurants use primary or bright colours.
Style
The style of a brand unifies all the elements discussed thus far into what constitutes a visual language, and a ‘look
and feel’ that is unique to a particular brand. The considered use of geometric shapes, additional colour palettes,
photography, and graphic layout sysstems determines the overall impression created by the band and the
perception of the customer or consumer.

What is in a name? Explore on a number of brand names to establish the

naming strategies adopted.
8.3.2 The BrandAdvantage Model

Building a brand requires a balanced mix of three core elements: strategy, design, and implementation.
• Strategy
A brand must in the first instance be considered strategically. A thorough analysis of the brand should
include a comprehensive visual audit of the brand to examine areas that are functioning optimally, versus
thoose that are not.
• Design
Design is meant to create the differential point for the offering versus competiting brands. Design should
captivatebrand meaning, character, and ultimately position the brand.
• Implementation
Poor implementation will negate the effect of good strategic and creative work and it is therefore important
that marketers dedicate adequate time, resources, and commitment to the implementation phase in the
brand building process. The process should be imbeded with check moments to ensure that good
performnce is sustained.
8.4 Brand positioning

Brand positioning is the business process that designs a brand, product or service to occupy a relative position in
the chose market segment or consumer's mind.
On a daily bases, consumers face a myriad of brands, products, and service and if they were to objectively re-
evaluate the costs, benefits, and relative advantages of each offering each time they make a purchase, they would
struggle to get much done. Consumers who have already found comfort in certain brand would rather minimise the
purchase effort – a critical reason why a marketer should position a brand in the consumer’s mind.

8.4.1 Brand positioning defined

Marsden, (2002: 307) suggests that positioning relates to the different values associated with a brand or which it
‘owns’. Blankson and Kalafatis, (1999) however, suggest that positioning should rather be defined as the
delibarare, proactive, iterative process of defining, measuring, modifying and monitoring consumer perceptions of
a marketplace object’.
Figure 34Figure 8.2: The BrandAdvantageTM model

Source: HKLM, 2014
8.4.2 The positioning process
Activity 8.1
Create a perceptual and value map for mobile phone market in South Africa
The positioning process includes establishing category membership, deciding on brand differentiators, and
differentiation of products and services.

Establish Deciding on Differentiation

Positioning
category brand of products
statement
membership differentiators and services
Establishing category membership

Consumers often evaluate a brand on the category in which it competes. One product can be seen in different
pespectives by different consumers in accodance to which benefits it provides (see Figure 8.3).
Figure 35Figure 8.3 Examples of category hierarchies
Deciding on brand differentiators

Points and parity (POP) and points of differnce (POD) can be used to analysis how products can be differentiated
from competitors offerings.
Points of parity (POP) – these are the minimum attributes that all competing brands should posess for them to be
at least consudered by consumers.
Points of differnce (POD) – are attributes or benefits that consumers strongly associate with in a brand but believe
the benefits cannot be found to the same extent in competing brands. The differnce is what makes consumers
choose the brand ahead of the rest.

Figure 36Figure 8.4 Points-of-parity and points-of-difference
Table 18Table 8.1 Desirability and deliverability criteria POD
Barwise and Meeham, (2005) suggest a checklist for ensuring that differentiation is customer-focused:
• What are the main benefits you deliver fro your most important customers?
• Do you deliver these for all your customers?
• Do your competitors offer the same benefits?
• Are you proud of being ‘Simply Better’?

Differentiation of products and services

According to Porter, an organisation can outperform its rivals only if it can establish a difference that it can preserve.
It must deliver greater value to customers or create comperable value at a lower cost , or both. Porter identifies
three generic strategies, including differentiaon, cost leadership and focus.
Product differentiation Service differentiation
Physical size, shape or structure Ordering ease
Features Delivery
Customisation Installation
Performance quality Customer training
Durability Maintenance and repair
Reliability Returns
Repairability
Style and aesthetics
Design
Table 19Table 8.2 Product and service differentiation

Source: Adpted from Kotler & Keller, (2008: 174-175)
In Table 8.3 Dumovic and Knowles, (2008) provide a six-question toolkit for identifying product-driven
differentiators using the example of phamaceutical application.

Table 20Table 8.3 Six question toolkit for identifying product-driven differentiators
Who is the most appropriate product beneficiary?
What are the real and perceived benefits of the

product?
When does the product work most effectively?
Where does the product work best?
How are products in a specific category delivered to

the end user?
Why does the product work the way it is?
Source: Dumovic & Knowles, (2008)
Perceptual mapping
Perceptual mapping/market mapping is a diagrammatic technique used by asset marketers that attempts to visually
display the perceptions of customers or potential customers. It displays perceptions about specific attributes of an
organization, brand, product, service, or idea. The positioning of a brand is influenced by customer perceptions
rather than by those of businesses. This diagrammatic technique (perceptual mapping) places products relative to
one another along two or more axis.

Figure 8.5, provides consumer perceptions of various brands that satisfy thirst.
Figure 37Figure 8.5: Perceptional mapping

Source: http://www.perceptualmaps.com/wp-content/uploads/2013/05/thirst-competitors-in-sets.png
Once marketers have established a brand’s category membership and a means of differentiation, the next step is
to craft a positioning statement that captures the brand’s value proposition. The statement should answer the
following questions:
• Who are the chosen customer?
• Which set of needs is fulfilled?
• Why is this offering the best to satisfy those needs?
The positioning statement can be exprssed using the template below:

[Our offering] is [most important claim] among all [chosen segment] because [most important support].

8.5 Managing the brand

Branding is a dynamic, constantly evolving business process that requires ongoing attention and reources within
an organisation. Markerters o leading brands such as Coca-Cola, Nike, and VW make subtle yet innovative
changes to the brand on an annual basis, ensuring they maintain a competitive edge in the market.
8.5.1 Brand alignment – internal and external

Brand alignment is the business process of ensuring consistency between the brand's positioning and meaning
inside and outside the organisation (see Figure 8.6).
Figure 38Figure 8.6 The brand alignment process
Internal brand alignment is therefore the business activities that develop a deeper sense of the organisation's brand
within the employees. A brand identity can only be built by an organisation if its employees believe in it.
Totsi & Stotz, maintain that traditional branding efforts have focused on external activity at the expense of internal
brand building efforts. They propose the following four-steps process for aligning employees with the promise that
a brand makes:
• Clarify the brand proposition or promise of value to customers
• Establish the brand character that will best deliver that value
• Translate brand character into values and behavioural practices for both company leaders and the
company as a whole
• Redress human capital systems’current practice to align their compatibility to the brand pronise

Internal branding pitfalls

• Rooting the branding programme solely in internal communication efforts
• Failure to allocate resources, support and planning to internal branding
• Being seduced by new advertising campaigns
• Confining brand building exclusively to marketing and communication
• Failure to integrate brand building programmes into other internal efforts
• Over-dependence on technology in building better brand understanding
8.5.2 Brand rejuvination – remaining relevant

Brand rejuvination usually entails enhancing an outdated image in an evolutionary manner to remain relevant and
connecte to the needs and values of our target market. Markets shift and taregt market needs and behaviours
change over time. To remain relevant, brands must embrace the changes – brand rejuvination. Brand-orientated
organisations track shifts in the marketplace and consumer life cycles so that they can reinvent, innovate, and
reposition products and services accordingly. Brand rejuvination can also be achieved by extending product
offering into new product category in response to the changing needs of consumers.
Repositioning
Brand specialists advocate that brand equity needs to b ctively managed over time by reinforcing the brand
meaning and, if necessary, by revitalising the brand – brand repositioning.
Case Study
Rebranding National Geographic to Go Further in Today’s Media Markets

When market dynamics and business strategies change, it affects the brand. National
Geographic, a brand with over one hundred years of history behind it, needed rebranding
after the entity split off the non-profit Society form the for-profit National Geographic
Partners a joint venture with 21st Century Fox.
Rebranding does not always mean changing a name or logo, and that is the case here. The
National Geographic rebranding is more about refocusing the positioning and aligning the
growing number of media properties clearly under one “rallying cry.”
The iconic gold border and priceless brand name stayed. What was added was the idea of
“further,” which focused the company on progress and the quest for knowledge, science,
adventure and exploration across all platforms, including the flagship magazine and travel
magazines, television networks, social and digital properties, kid’s media, live events and
even consumer products.

The brand plays a role internally as well, as a strategic filter for future initiatives, as a
motivator and source of price for employees, and as a tool for recruiting talent.
National Geographic’s brand now, by definition can go further– “It never ends, it knows no
bounds.”
Source: http://lisamerriam.com/rebranding-national-geographic-further/
With reference to the case study, analyse the unique ways in which National Geographic
aims to remain relevant on the marketplace..
8.6 Brand measurement

Recently the concepts of financial awareness, business performance, and brand value have come to the forefront,
and this has been accompined by rapid developments in the brand sphere. Marketing metrics are discussed in
great detail in Unit 11.
8.6.1 Tracking performance

Marketing as a discipline has often attracted a fare share of critisism regarding the issues of measurability and
return on investment (ROI). Marketing is often seen as a cost centre rather tha a revenue genarator. Contrary, the
role of branding in creating and sustaining demand can never be doubted.
8.6.2 Brand valuation and equity

There are several brand valuation models that in most instances, try to rank brands according to the value that
they command on the market space. Young & Rubicam’s BrandAsset Valuator (BAV) is potentially the widely brand
perfomance model. Brand peformance is tracked via an extensive international database that records scores on
brand strength and brand structure.
Figure 8.7, shows the top 100 brands as valued by Interbrand during the year 2018. Most interesting is the topling
of long standing leader Coca-Cola by Apple.
More than half of the Best Global Brands came from five sectors: Automotive (16), Technology (13), Financial
Services (12), Luxury (9), and Fast-Moving Consumer Goods (9). Luxury is the new Top Growing Sector in
percentage terms (42%), replacing Retail, which continues impressive growth at second (36%). Electronics is third
(20%), Sporting Goods is fourth (13%), followed by Financial Services (10%).
The combined total value of the Top 100 crosses the $2 trillion threshold, an increase of 7.7% from 2017.

Figure 39Figure 8.7 International brand valuation, 2018

Source: Best Global Brands 2018 report, Interbrand (2018)
8.7 Brand portifolio strategy

A brand portfolio startegy involves orgnising, managing, and marketing more than one brand owned by a single
company. Managing a brand portfolio strategy involves carefuly defining and managing the relationships between
the brands that should function as members of a team rather than individually.

8.7.1 Building a brand portfolio

Building a brand portfolio is a cumulative process, related to time and expxperience facotors (see Figure 8.8).
Figure 40Figure 8.8: Building a brand portfolio
Phase 1 – Brand accumulation

This phase addresses the segmentation needs. Variuos brands are accumulated to serve the need of different
customers and this may result in internal and external brand competition.
Phase 2 – Brand reformation

There maybe need to focus investment on a few rather than too many brands. Petromilli, Morrison and Million,
(2002) propose a brand relationship mapping process to inventory, classify, and group existing brands in a portfolio.
• Brand relevance and credibility to address various customer needs
• Percived limitations that may inhibit brand and thus business growth
• Brands that overlap and can be consolidated into others or divested
• Gaps in the brand porfolio and the relative size of potential opportunities

Phase 3 – Brand development model

This stages maps out brand groups whose growth path is specified (see Figure 8.8).
Figure 41Figure 8.9 Process to renew brand portfolio

Source: Hill et al., (2005)
Wise and Pierce, (2005) identify four principles that marketers should follow when developing plans for each brand:
• Push ‘sleepr’ brands to their full potential
• Launch new brands or acquire them strategically, particlarly when a gap is identified in your orgnaisation’s
line-up
• Rationalise overlapping brands that add unnecessary costs and complexity
• Shut down the weakest brands
8.7.2 Brand architecture

Brand architecture is the way in which the brands within a company's portfolio are related to, and differentiated
from, one another. It is a system that organizes brands, products and services to help consumers access and
relate to a brand. A successful Brand Architecture enables consumers to form opinions and preferences for an
entire family of brands by interacting or learning about only one brand in that family.
Figure 8.8 depicts Aaker and Johnston, (2000) brand relationship spectrum, with four strategies and nine sub-
strategies. This illustrates the continuum between a house of brands startegy that includes an independant set of
stand-alone brands to a branded house (a single master brand) that spans multiple offerings with descriptive sub-
brands.

Figure 42Figure 8.10 The brand relationship spectrum

Source: Aaker & Johnston (2000); Dooley & Bowie, (2005)
Corporate brand
Within a brand portfolio, a corporate brand is the brand that defines the organisation that will deliver and stand
behind the offering.
8.8 Conclusion
Brands have become an integral part of lives as we interact with brands every day of our life. Brands are a result
of successful marketing efforts that can be termed invisible company assets. Successful branding will show by
consumers who display intense emotional attachment with the brand. Marketers expect to create a sizable number
of consumers who are brand loyal.
8.9 Summary
The concept of building brands was discussed to show how a brand adopts its identity. Brands are built around
specific brand elements. The unit also explored the role and application of positioning in developing a differentiated
and appealing value preposition. Brands on the decline need to be rejuvenated, including repositioning. Brand
success can be evaluated using numerous brand measurement models.
The next unit will outline the marketing planning process.


1. Use brand elements to differentiate between branded supermarkets in South
Africa.
2. Establish how points of difference (POD) create a competitive advantage.
3. Analyse the essential information provided by a position maps.
Answers
1. A discussion may include the brand elements in section 8.2.1

2. The main argument is that POD create differentiation that leads to the
creation of competitive advantage. When clearly differentiated, consumers
should believe the difference in brands.
3. The discussion should cover the following: brand positioning, identification

of POP & POD, options to reposition the brand/s.
Answers

• National Geographic must rebrand because the market dynamics and
business strategies have changed Rebranding should differenitate the
non-profit Society form the for-profit National Geographic Partners
• Rebranding does not always mean changing a name or logo, and that is
the case here.
• The exercise is more about refocusing the positioning and aligning the
growing number of media properties clearly under one “rallying cry.” –
they were previously TV based
• They have added the idea of “further,” which focused the company on
progress and the quest for knowledge, science, adventure and
exploration across all platforms, including the flagship magazine and
travel magazines, television networks, social and digital properties, kids
media, live events and even consumer products.
• By definition can go further–“It never ends, it knows no bounds

Unit
9: The Marketing Plan

9.2 Marketing planning defined • Explain and analyse how market segmentation, targeting and
positioning principles formulate the bases of marketing planning
9.3 The marketing planning process • Propose strategic direction supported with fitting objectives and
marketing activities
• Generate and evaluate a range of strategic options and

supporting programmes
• Evaluate implemented marketing strategies
9.4 Marketing plan structure • Create a staged marketing plan
9.5 Obstacles to the marketing plan • Discover major obstacles to development and implementation of
marketing plans
9.7 Summary
Prescribed Textbook

P413 - 425

9.1 Introduction
Most marketing programs fail not because of a lack of resources and talent, but because of a lack of planning,
focus, and consistent action. Alternatively, when, “Businesses don’t plan to fail, they fail to plan!”
The marketing planning process enables marketers to make informed decisions about the most appropriate
marketing options to profit, market share, and other objectives.
9.2 Marketing planning defined
Think Point
Would a small business benefit from a marketing planning?
Planning is defined as a systematic process of forecasting the future business environment and then deciding on
the most appropriate goals, objectives, and positions for best exploiting the environment. Planning is essential as
it provides focus, co-ordinates activities, and structures the implementation and execution of strategic and
operational activities. Marketing planning allows for a structured and systematic approach that enables marketers
to understand and take advantage of the dynamic environment in which a company operates.
Marketing planning culminates in a marketing plan that documents marketing intelligence, proposed marketing
accomplishments, intended marketing strategies and action plans, and control measures.
Figure 9.1 illustrates that the marketing plan is the outcome of an ongoing process evaluating marketing activities.
Figure 43Figure 9.1 Marketing plan

Types of marketing plans

Planning at be done at different levels i.e. strategic or operational levels.
Strategic marketing plan - deals with the total strategy in a market and link customers, competitors and
organisational capability and resources. It guides all planning and activities at a functional level across the whole
organisation and is prepared at a strategic business unit or company level
Operational marketing plan - deals with the marketing mix strategy that will be used to gain leverage in a specific
product-market for a specific market segment.
Marketing plans (both strategic & operational) must possess the following characteristics:
• Explain intended strategies for building relationships by creating, communicating, and delivering value to
customers
• Outline employee activities for reaching objectives
• Show mechanisms for measuring progress toward objectives
• Allow for adjustments if actual results are off course or the environment shifts
Guidelines for a good marketing plan

Good marketing plans are:
• Comprehensive: Make sure that there are no omissions of important information
• Flexible: The marketing plan structure should be flexible enough to be modified to fit the unique needs of
your situation
• Consistent: The marketing plan structure should be consistent with that of the other functional area plans
and adhere to the business planning timelines and requirements
• Logical: The structure must flow logically
9.2.1 Benefits of planning
Think Point
Do you plan? Reflect on your life experiences to identify five reasons why
planning is essential.
A marketing plan serves several purposes within an organization by:

• Providing a blueprint and road map for all marketing activities for the next year
• Aligning marketing activities with the corporate strategic plan
• Requiring that managers objectively review and think through all steps in the marketing process at least
once a year
• Assisting with the budgeting process
• Matching resources with marketing objectives

Research has shown that marketing planning can make a significant contribution to commercial success.
Some benefits of planning are:
• The systematic identification of emerging opportunities and threats
• Preparedness to meet change
• The specification of sustainable competitive advantages
• Improved communication among executives
• Reduction of conflicts between individuals and departments
• The involvement of all levels of management in the planning process
• More appropriate allocation of scarce resources
• Consistency of approach across the organisation
• A more market-focused orientation across the organisation
9.2.2 Positioning marketing planning within strategic and marketing management

In turbulent business environments that allow little room for error, there is an increased focus on planning, and
managing the planning process. Marketing planning is an important input to marketing decisions and strategies.
Strategic marketing is said to revolve around the following:
• A clear market definition
• Segmentation, targeting, and positioning
• Formulating and implementing marketing strategies
• Measuring performance
There are nine important properties of an effective strategy:

• Market definition: Effective strategies direct resource allocation between markets guided by the overall
market direction and strategy
• Definition of intended competitive advantage: Resources are allocated between internal functions
based on their contribution to the intended competitive advantage
• Internal consistency and synergy: Efficiency is enabled by minimising internal conflicts between areas
of activity and optimising synergy between areas of activity
• Degree of uniqueness: The effects of competition should be minimised by focusing on resources and
activity in a way that is significantly different from that of competitors
• Congruence with the external environment: Effective strategies lever relative the company’s internal
strengths against relevant market opportunities and counteracts relative organisational weaknesses
against likely market threats
• Consistency with the organisation's objectives: Effective strategies define a target market that is large
enough and perceive the company’s value proposition superior relative to the competition, to win a market
share per organisation's objectives

• Acceptability of risk level: Effective strategies involve a level of risk that is within the organisation's
limits of acceptability
• Feasibility within the organisation's resources: Effective strategies consider the availability of
resource before execution
• Provision of a level of guidance to tactical activity: Effective strategies facilitate their implementation
by providing clear tactical activities that are necessary for and appropriate to the execution of the strategy.
9.3 The marketing planning process
Study Table 9.1 in your prescribed textbook. Search the Internet to identify then compare
the suggested characteristics of an effective strategy. Highlight any differences.
Figure 9.2, Illustrates the stages of the planning process required to arrive at a marketing plan.
Figure 44Figure 9.2 Market intelligence
9.3.1 Market intelligence

Market intelligence is the method used by organisations to identify their current market position and to take stock
of their marketing resources and capacity. To fulfil this, a detailed marketing audit and a SWOT analysis are
performed.

The purpose of the marketing audit

• Used to gain an understanding of the internal and external environment in which a company operates
• Used as a framework within which strategies are formulated and implemented
• Used to link the internal and external environment’s realities
• Leads to a more comprehensive understanding of the business environment
• Inform strategies by factual and evidence-driven information.
SWOT analysis
A SWOT analysis is a practical managerial framework (or tool) that can be used to integrate the intelligence and
marketing views to guide strategic direction.
• Strengths
• Weaknesses
• Opportunities
• Threats
9.3.2 Opportunity analysis

After the marketing audit and SWOT analysis, marketers should have an understanding of what is valued by
particular market segments. Given the opportunities presented in the marketing environment, marketers need to
use segmentation and targeting to focus on opportunities and then use the positioning for competitive advantage
(see Figure 9.3)
Figure 45Figure 9.3 Market opportunity analysis

9.3.3 Marketing objectives

The next task will be to set measurable marketing objectives. Objectives translate the mission into targeted levels
of performance to be achieved by a specific time. Objective exits at the three different levels of the organisation.
To check if the objective set measure up, the marketer needs to answer the following questions:
• Is the objective specific, time-defined, and measurable?
• Is the objective realistic yet challenging?
• Is the objective consistent with the organisation's mission and overall goals?
• Does the objective support the strategic direction of the marketing plan?
• Is the objective consistent with resources and core competencies?
• Is the objective appropriate, given environmental opportunities and threats?
• Does the objective conflict with other objectives?
Confirm is the below is a good example of a SMART marketing objective:
Company A intends to increase market share in the export segment to

15% by 2022.
9.3.4 Marketing strategies

Marketing strategies are the means by which an organisation sets out to achieve its marketing objectives.
The main areas of focus are the definition of the target market and the marketing mix to be employed. Marketing
strategies also specify the resources required and the structure and allocation of responsibilities for
implementation.
9.3.5 Marketing programmes

The next step is to come up with marketing programmes – detailed actions required by market, product, and
functional areas to implement these strategies. The marketing mix elements are usually utilised to create marketing
programmes (see Table 9.1). The over-reliance on the marketing mix has received sharp criticism from modern
marketers and some have opted to experiment with the increasing power of social media to communicate with
potential and current customers.

Table 21Table 9.1 Marketing mix decisions
Source: Adapted from Perreault & McCathy, 2006: 39
Social media
Social media empowers consumers to connect, share and collaborate, creating spheres of influence that have
fundamentally altered the way marketers engage in influencing activities. Looking at the number of willing
participants on social networks, it makes sense for marketers to exploit opportunities availed by social media
platforms.
Social Media Platforms Number of active South African users
Facebook 9.4 million
Mxit 6 million
Twitter 5.5 million
Instagram 680 000
Google 466 000
Table 22Table 9.2 The South African social media landscape

Case Study
Advertising spending in South Africa from 2017 to 2020, by medium (in million South
African rand)
The entire advertising market in South Africa in 2018 is estimated to be worth 36.6 billion
South African rand (approximately 2.5 billion U.S. dollars), and TV and video advertising
spending is projected to account for the largest share of that amount, around 21 percent.
The internet is said to be the second largest medium in the country. However, looking at
2017-2022 compound growth rates, TV is 3.8 percent CAGR in the period will be exceeded
by internet’s 13 percent CAGR, which means that by the end of 2022 internet advertising
will be higher than TV advertising for the first time.
Internet advertising in South Africa is expected to account for 22.7 percent of the total ad
market in the country, with a value of over 700 million U.S. dollars by 2022. At the same time
mobile will represent 75 percent of internet advertising revenue, up from 66 percent in 2017.
These figures show the importance of mobile platforms to the future of South Africa’s
advertising industry. Therefore, it comes as no surprise that some of the largest advertisers
in South Africa are telecommunications companies such as Vodacom or and Mobile
Telephone Network.
Source: https://www.statista.com/statistics/386540/advertising-expenditures-by-medium-
south-africa/
Marketing communication is a key component of the marketing planning process. However,

the communication trajectory is rapidly shifting. With reference to the extract, provide
reasons why TV advertising could have lost its lustre. What are some compelling reasons
for organisations to adopt social network platforms as the alternative communication
channel?

9.3.6 The budget

Once marketers have established what they want to do, the next step is to determine how much money to budget
for the marketing programmes. Setting the budget can be done in three broad approaches; top-down, customer
mix, and bottom-up (see Figure 9.4).
Top-down
Customer mix
Bottom-up
Figure 46Figure 9.4 Types of budgets
9.3.7 Implementation and measurement

The final step in formulating a marketing plan is to ensure that it will be used to define procedures and set standards
for measuring progress toward performance targets after implementation.
9.4 Marketing plan structure
Think Point
The marketing plan document is not "cast in stone". It can be updated and
modified if the organisation changes its focus.
Various structures can be adopted and below is a summary of what is commonly used.
Marketing plan structure
• Executive summary
• Current marketing situation
• Opportunity analysis
• Marketing strategy
• Marketing programmes
• Budgets
• Implementation control

9.5 Obstacles to the marketing plan

Approval to carry out marketing planning can prove to be a challenge in organisations whose leaders are filled with
fear and mistrust.
Think Point
“There is no life without change. The real tragedy is that we are always fearful of change and
resist it vehemently.” ― Debasish Mridha
Does the above quote explain why some managers fear to embark on marketing planning
process?
Below are more obstacles to developing and implementing marketing plans (see Table 9.3)
Table 23Table 9.3: Major obstacles to developing and implementing marketing plans
Source: Simpkin, (2002: 13)

9.6 Conclusion
A marketing plan is a strategic tool used to develop and implement strategic marketing strategies. There is
numerous variance of the marketing plan as they differ from one organisation to another. Strategy development
and implementation is carried out by marketing oriented organisation who ensure that they keep up with changing
needs of the market. Strategies are consumer driven.
9.7 Summary
The role of marketing planning in a progressive company was explored. An effective marketing planning process
is culmination of a systematic, creative, yet structured process that uncovers market opportunities and threats that
a business can then address in order to achieve its performance objectives. Numerous obstacles to the marketing
plan were discussed.
The next unit will look at how strategies are implemented.

1. What are the salient differences between a strategic plan and an
operational plan?
2. Marketers set objectives with the full knowledge of market opportunities
available.
(a) Discuss the supporting role of market intelligence in the marketing
planning process
(b) How can you evaluate the effectiveness of a strategy?
Answers

1. The differences between a strategic plan and an operational plan are
outlined in section 9.1 above
2 (a) Market intelligence is discussed in section 9.2.1
(b) A number of metric can be used to measure the effectiveness of a

strategy. See section 9.2.7

Answers

• The discussion should acknowledge the dominance of TV advertising in
yesteryears
• Also discuss disadvantages of TV advertising e.g. one-way communication
• Type of modern communication channels and their advantages
• Use Table 9.2 and section 9.2.6 to support your discussion

Unit
10: Implementation of Marketing
Strategies

10.2 Internal marketing • Support the concept of buy-in in major project undertakings
10.3 Brand alignment • Utilise organisational capabilities to ensure a holistic approach

to branding
10.4 Leadership and culture • Analyse the role of culture, and the role of leaders, in effective
change management
10.5 Systems and structure • Demonstrate awareness of the practical issues that arise when
implementing new strategies and how these might be
addressed
10.6 Barriers to implementation • Identify barriers that may inhibit strategy implementation.
10.7 Measuring marketing • Prioritise tracking, measurement, and accountability during

implementation marketing implementation
10.9 Summary
Prescribed Textbook

Cape Town.Chapter 10, P 293 – 321.
P430 - 457

10.1 Introduction
Marketing strategy implementation is a multifaceted and complex endeavour. Strategy formulation is an easier
process compared to strategy implementation maybe due to lack of skills and uncooperative managers. Strategy
implementers need to overcome potential resistance from some employees unless if internal market is done.
Organisational culture and structure are important ingredients of strategy implementation.
10.2 Internal marketing
Think Point
Explain why internal marketing enables employees to play role of brand

ambassadors
Internal marketing can be described as the process of securing an understanding and appreciation for the
marketing function within an organisation and translating this into actions and behaviour. The concept of internal
marketing or internal communication is not new and it plays an essential role in mobilising the efforts of the
business.
Internal marketing can play an important role within an organisation, and marketers can be agents of change who
influence and motivate staff to change collaboratively the internal process required for the effective implementation
of marketing plans.
Figure 47Figure 10.1: Internal marketing segmentation

Internal marketing has the potential for acting as an integrating factor in the organization. It enables the
convergence of the HR function, organizational development, marketing, quality management, and acts as an
integrator of business functions within an organization, aligning it to a common purpose.
Activity
Map out internal Stakeholders for a widely known restaurant business that you are familiar
with.
10.3 Brand alignment

The brand alignment model enables the organisational capability and ensures a holistic approach to branding and
marketing that improves the alignment between internal and external marketing (McCoy, 2012). In the process,
this affects the strategic marketing implementation efforts of an organisation and contributes to building brand
equity and competitive advantage. The brand alignment has its origins in the resource-based view of competitive
advantage.
10.3.1 The resource-based view (RBV) and brand alignment

Resource-based proponents believe that superior resources will give companies a competitive advantage better
than marketers who wish to gain a competitive advantage from the external positioning of the firm. Investors also
increasingly view intangible assets such as the firm’s knowledge, skills, and reputation as the key to superior
business processes compared to investing in physical assets.
Organisational culture is relevant to this model in that brand alignment seeks to influence culture and align
performance such that the internal view of the brand meets the external marketing and brand expression of the
organisation.

Figure 48Figure 10.2: A model for interdepartmental internal marketing collaboration
10.3.2 Organisational architecture and brand

Organisational architecture is a management tool that is used to describe the workings of an organisation while it
can also be viewed as a model of the firm that can be shared by everyone involved in managing change. There
are several organisational architecture models such as the McKinsey 7-s framework, the organisational
architecture model proposed by Lee, Venter, and Bates.
10.4 Leadership and culture

Leadership and culture are closely interrelated, and they play critical roles in the marketing strategy implementation
process and ultimately shape much of the ensuing process of execution.
10.4.1 Leadership
Leadership influences strategy implementation. Great leaders have the capability to create competitive companies.
Influential company leaders can convey a picture of the future and coach staff towards it. Similarly, successful
marketing strategy implementation requires strong leadership. Although commonly criticised for thwarting
autonomy, top-down leadership appears to be more effective at marketing strategy implementation.
Search for and read Richard Branson autobiography to gain some insights on
how leadership influences strategy implementation.

10.4.2 Organisational culture
Think Point
What are the characteristics of organisational culture that will enhance

strategy implementation?
Organisational culture presents perhaps the most compelling opportunity for developing a competitive advantage
since appropriate cultural alignment will directly affect an organisation’s capacity for marketing strategy
implementation. Culture is a socially constructed reality and has the following properties that emerge when we
examine behavioural and learning principles to organisational culture.
Key characteristics of organisational culture

• Culture is learned
• Culture is transmitted through a pattern of behavioural interactions
• Multiple reinforcements and reinforcing agents
• Individual predispositions
• The symbolic relationship between the reinforcing agent and the target
• Changing an established culture is challenging

The table below illustrates key components of organisational culture.
Table 24Table 10.1: The seven levels of organizational consciousness
Table 10.1 illustrates the Barrett methodology that has been adopted by Nedbank to track shared norms,
behaviour, and culture overtime in an attempt to better align individual goals and aspirations with those of the
organisation.

10.5 Systems and structure

The pressure to change to systems and structures may come from the external or internal environment of the
organisation (see Figure 10.3)
Figure 49Figure 10.3: Pressures for change
10.5.1 Systems models

As firms grow, their strategy implementation models and marketing systems evolve simultaneously. Three
marketing strategy implementation models discussed below are;
• Change model
• Collaborative model
• Cultural model
Change model
The change model is hierarchical and uses organisational, and control systems to facilitate the implementation of
marketing strategies. Senior management take an active role.
Collaborative model
The model focuses on decision-making at a senior level and involves marketing executives in the strategy
formulation process. A formal strategic planning process is in place and teamwork is encouraged.
Cultural model
The model offers a highly participative process in both formulating and implementing strategies, through to the
lower level of employee input.

10.5.2 Structural considerations

The structure of the organisation should enable the organisation to execute its marketing strategy and plans. There
is however debate on whether centralisation and decentralisation inhibit strategy execution. Table 10.2 provides
different organisational systems, styles, and characteristics followed by different organisations.
Table 25Table 10.2: Comparison of organisational systems, style, and characteristics

Figure 10.4, illustrates the relationship between environmental variety and marketing centralization.
Figure 50Figure 10.4: Environmental variety and marketing centralization
10.6 Barriers to implementation
Activity 10.3
Identify some barriers to strategy implementation in an organisation that you are familiar with.
Strategy implementation occurs when marketing theory is put into practice, and the hard work really begins.
Common barriers to strategy implementation are listed below:

• Geography
• Language and culture
• Project management and production capability
• Internal behaviour
• Cost
• Marketing orientation

Case Study
Ten Barriers to Marketing Planning

This article explores why, given the acknowledged benefits companies can enjoy carrying
out formalized marketing planning, most industrial companies still rely largely on forecasting
and budgeting systems as their principal means of addressing the future. Ten barriers to the
preparation and implementation of marketing plans are identified:
1. Confusion between tactics and strategy
2.Isolating the marketing function from operations
3. Confusion between the marketing function and the marketing concept
4. Organizational barriers
5. Lack of in-depth analysis
6. Confusion between process and output
7. Lack of knowledge and skills
8. Lack of a systematic approach to marketing planning
9. Failure to prioritize objectives
10. Hostile corporate cultures
Source: McDonald, M.H., 1989. Ten barriers to marketing planning. Journal of Marketing
Management, 5(1), pp.1-18.
Which of the above barriers to marketing planning are prominent in an organisation that you
are familiar.
10.6.1 Geography
The geographical spread of operations presents marketers with many challenges (see Table 10.3).
Table 26Table 10.3: Advantages and disadvantages of expansion

10.6.2 Language and culture

A ‘one size fits all’ approach to building brands and implementing a marketing strategy in cross-border and multi-
cultural markets is futile, given the complexities presented by issues such as language and culture.
10.6.3 Project management and population capability

Most organisations’ strategy implementation capabilities are sabotaged by their incapacity to manage projects.
Additionally, developing countries have consumers whose purchasing power is too low to support innovation.
10.6.4 Internal behaviour

One reason why organisations fail to implement marketing strategies successfully is that they fail to recognise the
contributions that employees make towards strategy implementation. Employees simply do not have input in the
entire process until it comes to the implementation stage.
10.6.5 Cost
Some strategies require a substantial budget and this becomes a barrier. Deep international companies who have
deep pockets will forge ahead and this translates to the attaining completive advantage.
10.6.6 Marketing orientation

Marketing orientation explains the extent to which an organisation is marketing-led and inclined to engage in
marketing activity, implementation, and investment. Some organisations have a strong manufacturing and
technical bias, ahead of marketing.
10.7 Measuring marketing implementation

A though discussion on marketing metrics is covered in Unit 11.
Peruse Chapter 11 to identify marketing metrics used to measure the success

of an implemented strategy
10.8 Conclusion
Strategy implementation is a challenging task yet its importance is underestimated. Mobilising resources especially
employees can be met by some resistance leading to delays. The role of culture, leadership, and organisational
culture is central to the success of strategy implementation.

10.9 Summary
The unit assessed strategy implementation in an organisation. Important issues relating to strategy implementation
are explored, such as, the importance of internal marketing, brand alignment, organisational architecture, and
potential objectives to strategy implementation. Measuring of strategy implementation is also discussed.

1. Explore the elements that underpin the resource-based view (RBV).
2. It is argued that organisational culture works as either an impediment or

facilitator to strategy implementation. Explain.
Answers

1. The elements that underpin the RBV are found in section 10.2.1
2. Organisational culture is induring and is bound to work as an impediment to

strtegy implementation unless if programme managers sell the idea to all
stakeholders.
Answers
• Answers will differ from student to student

Unit
11: Marketing Metrics

11.2 The evolution of marketing metrics • Appraise the historical and the current use of marketing
metrics
11.3 Strategic monitoring system and • Explore numerous metrics used to monitor marketing
performance measurement performance
11.4 The portfolio of marketing metrics • Demonstrate the benefits of using a multi-factor performance
measurement approach
11.5 Designing marketing metrics • Show understanding of how strategy performance

measurement can be simplified
11.6 Integrated marketing measurement • Demonstrate metric systems that are integrated across all
business functions
11.8 Summary
Prescribed Textbook


Pearson.Chapter 13, P354 – 357.

11.1 Introduction
Recent attention has focused on the development of ‘marketing metrics’ as a better way of linking marketing
activities and financial returns to the business. Marketers argue that linking marketing to business performance
requires that such metrics are reported to top management regularly, compared with forecasts, and compared with
competitors, with the drivers of buyer behaviour clarified and monitored.
11.2 The evolution of marketing metrics
Think Point
What is the use of metrics in marketing strategy?
As pressure has been mounting on the marketing function to become more accountable, new methods of
measuring marketing effectiveness and the resulting financial consequences have been developed. Marketing
functions, just like any other function in an organisation must take account of their actions.
11.2.1 Terminology
Activity 11.1
It is important to understand the terminology used when measuring strategy

performance. Distinguish pan-company marketing from functional marketing.
Ambler, (2003) distingishes the responsibilities of employees in the marketing function from all other employees in
the organisation. Pan-company marketing, for example, refers to the activities undertaken by employees of the
organisation to secure customer preference and thereby achieve higher returns for the shareholder. Marketing
oriented companies have long accepted that every employee in the organisation has a part to play to support
customer acquisition efforts.
Functional marketing, on the other hand, refers to activities undertaken by the marketing teams. Marketing
professionals take decisive action and assume customer acquisition and customer delight as their key
responsibility.
Measuring metrics chosen should be able to access the efforts of both pan-marketing and functional market.
Metrics may be financial (measuring profit or loss) or non-financial (measuring innovation, employee performance).
Such metrics may make it possible to compare observations across regions and facilitate understanding and
collabouration. Other popular terminologies for metrics include benchmarks, diagnosis, and derivatives.

11.2.2 The increasing focus on marketing accountability

McDonald, (2006) edges marketers to reclaim their position at the helm of companies. In South Africa for example,
most CEOs are Chartered Accountants as opposed to being marketing professionals. McDonald’s blames the
seemingly unresponsible nature of marketers who fail to account for their actions. According to Barker and Halt
(2004), marketers are widely viewed as being unaccountable for their expenditures by the other departments of
organisations, a perception that originates from the inability of marketing practitioners to demonstrate a ROI for
activities they initiate.
11.2.3 From traditional marketing control to marketing metrics

Marketing has transformed, for example, it is now regarded as a science instead of an art. Additionally, the
traditional 4Ps developed in the 1960s have also been revolutionised to achieve long-term sustainability. Marketing
has been seen to influence the business decision through the use of metrics. The use of marketing aligned yearly
budgets as the bases for formulating other operational budgets is just one example.
11.2.4 Market-based marketing and asset-based marketing

Market-based assets are relational and intellectual endeavors that focus on a company’s ability to react profitably
to customer wants, while asset-based marketing relates to how effectively a company can deploy its assets to
satisfy wants in the marketplace.
According to Hooley, et al, (2017), marketing assets include company name, reputation, legal patents and can be
extended to include supply chain assets and agreements. Although intangible, market-based assets can be
deployed timeously to create or maintain a competitive advantage. Companies that utilise market-based marketing
tend to be more prosperous although the valuation of such assets is not easy.
11.3 Strategic monitoring system and performance measurement

If company performance is not measured, shareholders and senior management will not have a way to know if
goals are being achieved, or how well or poorly a company is performing. Some form of a strategic monitoring
system is therefore required.
11.3.1 Challenges in designing strategic monitoring systems
Activity
What are some limitations of using ‘return on marketing’ ROMI as a measure

of marketing performance?

Marketers face many challenges in designing and implementing strategic monitoring and performance
measurement systems. The dynamic and ever-changing competitive environment necessitates marketers to
constantly update the measuring yardstick. Another challenge is the timely availability of data.
In the fast-moving consumer goods industry, for example, organisations do not have or have very little direct
contact with final consumers making it difficult for them to gather competitor and consumer data directly. The other
challenge includes deciding on the relevant areas to be measured, and which measures to be adopted. Ambler,
(2000), for example, identifies ten marketing metrics that a marketer may want to measure:
• l relative perceived quality
• l loyalty/retention
• l total number of customers
• l customer satisfaction
• l relative price (market share/volume)
• l market share (volume or value)
• l perceived quality/esteem
• l complaints (level of dissatisfaction)
• l awareness
• l distribution/availability
Measuring all the above may be timeconsuming and expensive hence marketers may choose to measure elements
that they feel are more aligned to the overall strategic performance of their organisation.
Different metrics may be measured at different levels in an organisation, such as;

• Corporate or strategic business level - metrics are typically formulated to measure annual sales, profit
targets, and return on assets
• Product-market level – metrics will measure sales by market segment or sales by outlet, marginal
contributions, and operating margins
• Functional marketing level – metrics can be used to assess brand awareness, trial rate, repeat purchase,
loyalty, and product returns by channel members
A specific measure of marketing performance that appeals to CFOs is ‘return on marketing investment’ (ROMI),
which is described as ‘the contribution margin to marketing, divided by the marketing ‘invested’ or ‘risked’. Although
ROMI has its shortfalls, marketers must still endeavour to account for their effort and money outlaid in marketing
operations.

11.3.2 Design decisions
Think Point
Performance is generally measured on a monthly, quarterly, and annually

basis. Would you not consider weekly or daily performance measures?
Marketing metrics can be designed to either;

• Measure the effectiveness of the marketing strategy deployed in light of competitive pressures and the
changing marketplace, or
• Measure tactical marketing performance
Overall, performance measures must be SMART and such measures must be cross-functional so that all
departments in the organisation can benefit.
11.3.3 Creating a positive context for measurement

It is essential for marketers to consult widely in the organisation before they design and implement performance
measurements. Measurement implementation is highly dependent on the support given by the affected functional
departments. Marketers need to create a positive context to performance measurement to reduce resistance from
certain employees and they can willingly support and participate in the processes.
The success of implementing a measurement system will also be influenced by the history of measurement in the
organisation.
Other critical issues to consider include the general organisational climate, measurement constraints,
measurement resources, and measurement communication.
11.3.4 The balanced scoreboard – an integrated measurement approach

As firms approached the twenty-first century, they realised that traditional planning and measurement
approaches were not able to capture the value created by the organisation. There was also a realisation that
financial measures alone cannot capture the complexity of modern organisations and that additional measures are
required for planning and control purposes. One solution to this problem was the development of the balanced
performance scorecard by Robert Kaplan and David Norton of Harvard University.
Kaplan and Norton’s balanced scorecard has four broad measurement perspectives that are interlinked – financial,
customer, innovation and learning, and internal business (see figure 11.1).

Figure 51Figure 11.1: The balanced scorecard

Source; Kaplan & Norton, (1992: 72)
The dimensions of Kaplan & Norton’s Balanced scorecard

• Financial: how do we look to shareholders?
• Customer: how do customers see us?
• Internal business: what must we excel at?
• Innovation and learning: can we continue to improve and create value?

The four perspectives of the balanced scorecard approach are interlinked as thay impact on one another (see
figure 11.2).
Figure 52Figure 11.2: Marketing-related linkages in the balanced scorecard

Source: Adapted from Spitzer, (2007: 93)
Think Point
Which dimensions would you feature in a brand equity measurement model?
11.4 The portfolio of marketing metrics

Organisations across the world use a multitude of metrics to measure the performance of marketing, as no single
measure can sufficiently summarise the complexities of the marketing domain. More often than not, the
organisation uses a combination of metrics to measure what they believe is aligned to their business operations.
11.4.1 Classification of marketing metrics

There are many possible approaches to classifying marketing metrics. The three below will be addressed in this
unit.
• The cluster approach
• The marketing assets approach
• The comprehensive leading and lagging approach

The cluster approach

In this approach, marketing metrics are clustered together in logical groupings. Farris et al, (2010) clusters metrics
into the following groupings;
• Share of hearts, minds, and markets
• Margins and profits
• Product and portfolio
• Customer profitability
• Salesforce and channel management
• Pricing strategy
• Promotion
• Advertising, media, and web
• Marketing and finance
A brand equity metric could probably measure dimensions such as; familiarity and awareness, what customers
think, what customers feel, behavioral intentions, brand loyalty, and availability. Keller’s Brand Equity model and
Millward Brown’s BrandDynamics model are among the most popular brand measurement models to be
developed. There are also some metrics used for ‘service’ and ‘culture’ measurements in the organisation.
The marketing assets approach

Marketers have come to the understanding that there are two dimensions to customer values that the marketing
function should manage: the value that an organisation provides to a customer, and the value that a customer
provides to an organisation. While the value provided to a customer is the investment, the value of a customer to
the organisation is the return on investment. Computation of the Net Present Value (NPV) of all the income streams
associated with the brand can provide marketing performance for the company/brand.
The comprehensive leading and lagging approach

The model considers that financial results (lagging indicators) result from several marketing decisions (leading
indicators) upstream in the company (see Table 11.1).
Upstream marketing decisions concentrate on ‘demand stimulation and prospecting’ an activity preceded by
‘acquisition’ and then followed by customer ‘retention and business growth’.

Table 27Table 11.1: Leading and lagging metrics

11.4.2 Prioritising and selecting marketing metrics

Figure 11.3 identifies some important metrics that most organisations choose to implement when measuring
organsational performance.
• Awareness of • Sales
corporate volume/value
goals
Employee
Profit and
based
loss
equity
General
Innovation brand
equity
• Strategy – • Brand
awareness of familiarity
goals (vision)
Figure 53Figure 11.3: Top metric by category

Source: Ambler, 2003
11.5 Designing marketing metrics
The main challenge when designing is choosing the metric best for the industry. The portfolio of metrics developed
should be suited to the unique needs of the industry and the company business model.
Ambler, (2000) identifies five stages of development, from least sophisticated to most sophisticated.
• Unaware – the executive team does not see marketing as important
• Financial – assessments are done in financial terms only
• Many measures – there is a realisation that financial measues alone are inadequate and non-financial
measures are incorporated but with little coordination between functional departments
• Market forces – the company streamlines its metrics in line with a market focus to give a coherent view
• Scientific – a thorough analysis of what is required is conducted, mathematical analysis is employed, and
most suitable leading, lagging, and predictive indicators are formulated and implemented.
According to Walker, et al (2008) there should be five steps that need to be followed when formulating a system
of metrics specifically for measuring performance.
• Setting standards of performance
• Specifying the necessary feedback data
• Obtaining the necessary data
• Evaluating feedback data (explaining the gap between actual and given standards of performance)
• Taking corrective action

11.6 Integrated marketing measurement

No single measure can capture the complexities of the performance of a modern organisation. Multiple metrics are
therefore needed, some leading, some lagging, and even some that are predictive. Metrics cannot be used in
isolation hence an integrated approach is needed.
The use of marketing dashboards and scorecards (see figure 11.4) provides a wider view of organisational
performance but all monitored from one source.
11.6.1 Marketing dashboards and scorecards
Figure 54Figure 11.4: Marketing dashboard views

Source: Adapted from Pauwels et al., (2008)
According to MarketinNPV, (2004) marketers may follow the following steps when building a marketing dashboard.
• Identify business drivers
• Map the role of marketing
• Link goals to objectives and tactics
• Prioritise and weight
• Develop the dashboard

11.6.2 Integrating marketing metrics into a dashboard
Think Point
What are some teething problems likely to manifest when integrating market
metrics into a marketing dashboard.
Not all dashboard implementation is successful and below are some dashboard problems;
Problems with the process:
• No data
• No research
• Too busy for measurement
• Short payback
• Dashboard deficiency
Problems with the people:

• Parochial numbers
• Selective adoption
• Fizzles effort
• Lack of focus
• No co-operation
Problems with the skills:

• Technical gaps
11.7 Conclusion
Designing a customised set of metrics is usually preceded by a thorough business analysis to identify levels of
measurement and business drivers that contribute to creating shareholder value in the long term.
Understanding the expectations of the organisation regarding measurement at all levels is critical. Do employees
see it as adding value to the organisation, or as wasting time and other resources?

11.8 Summary
The evolution of marketing metrics was discussed emphasizing that marketing practitioners need to account for
the money that they spend on marketing activities. Various monitoring systems are outlined and their capabilities
discussed. Integrated marketing measurements are gaining prominence.

1. What challenges do marketers encounter when designing strategic
monitoring systems?
2. Justify why a balanced scorecard is an integrated measurement approach
3. What are the essential steps to follow when developing metrics?
Answers

1. The challenges marketers encounter when designing strategic monitoring
systems are found on section 11.2.1
2. The balanced scorecard just as the name refers, tries to provide a balanced
view on organisational performance. Read section 11.2.4
3. Steps that can be followed when developing metrics are on section 11.4

Unit
12: Marketing: an Ethical
and Sustainable Approach

12.2 Marketing ethics • Explain and evaluate alternative ways of how business can
communicate ethically
• Explore unethical practices besieging the South African

corporate space
12.3 Marketing and corporate • Demonstrate an appreciation of the growing obedience to

sustainability corporate responsibility and sustainability
• Identify and analyse ethical issues in the light of changing

attitudes towards the environment
12.4 Codes of conduct • Infer how a code of conduct underpins business behaviour
12.5 Regulation • Demonstrate a critical knowledge and understanding of the

regulatory bodies which are drivers of corporate social
responsibility
12.6 Consumer recourse • Identify the key factors shaping the debate on consumer
protection
12.7 Conclusiin • Summarise topic areas covered in unit
12.8 Summary
Prescribed Textbook

strategy and competitive positioning. 6th Edition. Pearson. Chapter 17,
P465 - 494

12.1 Introduction
Marketing ethics is also described as 'marketing with a conscience.’ The subject of ethics and sustainability has
gained prominence in most boardrooms. With increasing pressure from stakeholders for higher returns on
investment, some managers yield to the pressure and end up acting unethically. Unethical practices are
unfortunately on the increase in South Africa judging by stories that are emanating from the media.
12.2 Marketing ethics

Customer demands and increased regulation call for companies to incorporate ethics and social responsibility in
their strategic market planning processes. Managers must crave to be fair to both internal and external
stakeholders.
Ethics can be defined as ‘behavior per the values or standards that are in place’, (Waker & Marr, 2001: 73). The
Oxford dictionary defines ethics as moral principles that govern a person’s behavior or the conducting of activity.
Ethics is different from compliance but is closely related to integrity.
The two ends of the marketing ethics sprectrum are:
• Let the buyer beware: i.e. the rights of the seller are central and the organisation has little regard for
consumers
• Let the seller beware: i.e. customer satisfaction is taken to the extreme; no matter what the customer does,
it is all right
Marketing plays a key role in establishing, internalising and implementing ethics in an organisation.
The areas of concern in marketing ethics are;
• Unfair or deceptive marketing practices
• Offensive materials and objectionable marketing practices
• Ethical product and distribution practices
• Ethical issues in marketing to children
According to widespread research by Chonko & Hunt, (2000), the most frequent ethical problems are;
• Bribery
• Fairness
• Honesty
• Pricing
• Product
• Personnel
• Confidentiality
• Advertising
• Manipulation of data
• Purchasing

Activity 12.1
Consider the two ends of the marketing ethics spectrum: (a) let the buyer and
(b) let the seller be aware. As the consumer, which position do you find yourself
in?.
12.2.1 Bribery
Bribery occurs when a public official, performing official duties, is offered something valuable in return for
influencing a decision or policy in favour of the person offering a bribe.
Bribery is now a widespread phenomenon in international business transactions, including trade and investment,
which raises serious moral and political concerns, undermines good governance and economic development, and
distorts international competitive conditions.
Browse the internet to examine the breadth and depth of bribery in South Africa.
12.2.2 Ethical pricing

The four most legal and ethical issues in pricing are price discrimination, price-fixing, predatory pricing, and
deceptive pricing.
Price discrimination is when a marketer charges different prices to different persons or market segment but for
the same product or service. Pure price discrimination will occur when a supplier charges each customer the
maximum price that he or she is willing to pay for the same product or service.
Price fixing occurs when companies that serve the same market with similar products decide to co-operate rather
than compete to increase profit. Competitors, usually those with considerable market power, conspire or collude,
forming cartels (alliances), to charge higher prices and destroy members that are not part of the arrangement.
Predatory pricing is when a dominant firm with market power, engage in below-cost pricing with the intent of
driving a competitor out of the market and recouping costs after that, through future price increases. In terms of
the South African Competition Act, a dominant firm is prohibited from selling goods and services below their
marginal or average cost.
Deceptive pricing occurs when price promotions intentionally mislead customers. A common form of deceptive
pricing is superficially discounting for example, when a supplier advertises a sale price. This also occurs when
sellers hide additional fees and punitive conditions from the going price.

12.2.3 Ethical products

Sub-constructed products or those with questionable contents are traded on the market. Products that are unsafe
for human consumption filter to the market. Suppliers may either fail to inform consumers of negative side effects
or continue to supply products after the expiry date. The issue of marketing genetically modified consumer products
remains contentious.
12.2.4 Ethical advertising

Deceptive advertising occurs when customers are consciously led to believe they will get more value from a product
or service than they receive after purchasing it. Deception can take the form of misrepresentation, omission, or
misleading practice during any stage of the marketing process. For example, marketers can overburden consumers
with information and in the end, customers get confused and just sign up without clear knowledge. The consumer
act in South Africa favours customers with a “cooling off” period.
12.2.5 Consumer privacy

The information age is threatening individual privacy through the increasing sophistication of technology such as
data mining tools, thermal imaging, satellite imagery, global positioning, face recognition software, and biometrics.
This has led to the enacting and amendments of FICA regulations.
12.3 Marketing and corporate sustainability
Think Point
In which ways can marketers show environmental concern when developing

and marketing their products?
Marketing ethics is an integral part of corporate sustainability. Corporate sustainability addresses environmental,
social and economic impacts of business. This includes eliminating waste in the supply chain process, reducing
the carbon footprint, ensuring that employee are fairly renumerated, and reducing toxins or harmful ingridients in
products.
Overall, the corporate sustainable organisations should focus on profit, people, and the planet. The organisation
plays an important role in the lives of employees and corporate position of an organisation.
According to Davies, (2007:1) there are five stages of embracing a sustainable strategy:
• Desire
• Pride
• Satisfaction
• Depression
• Collabouration

12.3.1 Green marketing
Case Study
H&M’s Green Marketing Questioned by Consumer Authority in Norway

The Norwegian Consumer Authority has come down hard on Scandinavian budget
fashion powerhouse Hennes & Mauritz (H&M). The authority says that the brand’s
use of the term “Conscious” to indicate the clothes are sustainable and
environmentally friendly falls foul of Norwegian law.
A spokesperson for the authority told Norwegian broadcaster NRK that H&M is
making unsubstantiated claims that play on environmental emotions. They
concluded that the advertising is “misleading” and that it violates the law.
The Norwegian Consumer Authority has sent a letter H&M in which they require
that all marketing that features the specific sustainability claims must be changed.
In response, H&M said that they are in the midst of a transformation to, among
other things, “become 100% climate neutral.” H&M lauded the Norwegian
Consumer Authority for highlighting this and indicated that they are making efforts
to communicate the extensive work they are doing accurately.
The collection in question is the Conscious line, which H&M describes as a

“collection inspired by the wonders of planet earth.” The company describes the
range of t-shirts, blouses and frocks as “sustainable fashion pieces that make you
both look and feel good.” Through its website, the company also states that three
new sustainably sourced materials have been introduced: citrus peel, pineapple
leaves and algae biomass.
Source: https://www.lifeinnorway.net/hms-green-marketing-questioned-by-
consumer-authority-in-norway/
In light of the case study, should green marketing remain a voluntary conscious
effort by companies in South Africa?
Marketers must creatively think about how marketing can fulfill the needs of the largest part of the human spices
leading to better standards of living and sustainable development.

Stakeholders play a significant role in influencing organisations and markets in environment-related issues such
as the purchasing of green products, developing new green products, and recycling programmes.
Green marketplaces are developing in many parts of the world, that deliver products to the segment of consumers
known as ‘green consumers’. Green marketing is an opportunity for companies as the ‘green consumer’ market
segment is growing.
12.4 Codes of conduct

The code of contact or code of ethics is a set of shared vision of acceptable behavior developed from an
organisational perspective to cultivate consistent and reliable relationships with all concerned stakeholders.
The code of ethics reflects the desire of the board of directors and senior management to comply with the values,
rules, and policies that support an ethical climate.
Besides the codes of conduct implemented in organisations, various bodies help to regulate activities in the
industry.
12.5 Regulation
Visit the competitions authority website to read and appreciate their role of enforcing anti-
competitive conduct, including collusion in South Africa.
Regulation is action or behaviour that is required by governments and it is not voluntary. In South Africa, the
regulatory framework that controls marketing regulations is a combination of the common law and legislation. The
Consumer Protection Act, the Code of Advertising Practice, and the Competition Act are examples of regulatory
instruments commonly used in the South African marketplace.
The Consumer Protection Act 68 of 2008
The act outlines nine consumer rights
• Consumer Right No. 1 -: Right to equality in the consumer market and protection against discrimination
market practices
• Consumer Right No. 2 -: Right to privacy
• Consumer Right No. 3 -: Right to choose
• Consumer Right No. 4 -: Right to disclosure of information
• Consumer Right No. 5 -: Right to fair and responsible marketing
• Consumer Right No. 6 -: Right to fair and reasonable terms and conditions
• Consumer Right No. 7 -: Right to fair, just and reasonable terms and conditions

• Consumer Right No. 8 -: Right to fair value, good quality and safety
• Consumer Right No. 9 -: Right to accountability from suppliers
Eight (8) basic consumer rights (United Nations, 2003):

• Right to satisfaction of basic needs
• Right of safety
• Right to be informed
• Right to choose
• Right to be heard
• Right to redress
• Right to consumer education
• Right to a healthy and sustainable environment.
The Code of Advertising Practice

The Advertising Standards Authority of South Africa (ASA) is an independent body set up to regulate advertising
activities by South African advertisers. The body is set up and paid for by the marketing communication industry
to ensure that its system of self-regulation works in the public interest. The Code of Advertising Practice is used
as the guiding document for ASA. Consumers, or competitors, may complain to ASA if they perceive that an
advertiser bridged the Code of Advertising Practice.
The Competition Act

The Act governs a broad range of anti-competitive conduct, including collusion (competitive agreements), vertical
restraints and exclusionary conduct by dominant firms (firms with a market share of more than 35%). The
Competition Authority (a statutory body) is mandated to enforce the Competition Act. The authority has sufficient
power to investigate, control and evaluate restrictive business practices, abuse of dominant positions and mergers.
Non-compliance can be punishable with 10% of a company’s annual turnover.
Under the proposed amendments to the Act, company directors and officers of colluding firms may face personal
criminal liability and run the risk of being fined up to R500,000 or sent to prison for up to ten (10) years.
Consumer Protection Bill:
• Promote a fair, assessable and sustainable marketplace for consumer products and services
• Promote responsible consumer behaviour
• Promote a consistent enforcement framework for consumer transactions and agreements
• Prohibit certain unfair marketing and business practices
• Provide for improved standards of consumer information
• Provide for harmonisation of laws relating to consumer transactions and agreements
• Provide for the establishment of the National Consumer Commission.

The increase in consumer activism in SA due to:

• SA unique – 1st and 3rd World mix
• Strong middle class emerging
• Information technology increasing focus (i.e. HelloPeter)
• Services industry increasing
12.6 Consumer recourse
Activity 12.2
For too long, consumers have been on the receiving end of poor service from
powerful businesses. Explore ways in which consumers have been empowered
to fight back marketers who provide bad service.
Consumer rights are protected by regulations such as the Consumer Protection Act, ASA, etc. and they may
complain whenever they feel that their rights have been infringed. However, consumers need to know where to go
if they are in some way aggrieved and how to escalate a complaint if they are not satisfied with the result at the
first level of recourse. Figure 12.1, illustrates the different recourse channels available to consumers.
Figure 55Figure 12.1: Pyramid of recourse channels

Source: ECIAfrica, (2007)

12.7 Conclusion
Marketers are confronted with numerous ethical issues from the external and internal environment that impact on
strategic marketing decisions and activities. Unethical issues were identified and measures to reduce such
practises were discussed.
12.8 Summary
Marketers must consider their stakeholders as and when they make business decisions. They should avoid harm
to consumers through unethical practices at all costs. Ethical behaviour by organisation usually elicits a positive
response from customers and other stakeholders. Most companies have developed codes of conduct to guide and
enforce good behaviour from business leaders.

1. Why should marketers utilize the principles of UDAAP when advertising their
products?
2. Outline the rights to privacy as guided by the South African consumer protection act.
3. Discuss corporate sustainability using the triple-bottom-line reporting concept
Answers
1. The UDAAP calls for complience about unfair, deceptive, abusive acts, or practices
2. Consumers have the rights to privancy as dicribed in section 12.4
3. The elements of the triple-bottom-line report point to sustainability. Organisation should

engage in business activity but must take care of three important isses –
people/employees, earth/enviroment, and make profits.

Answers
Answer guidelines case study questions:
• Regulation on green marketing in South Afica is lux to non-existence
• The advertising authority of South Africa can provive oversight on communication
• Marketers may use green marketing as an opportunity to gain competitive edge over
their competitors
• Marketers must creatively think about how marketing can fulfill the needs of the largest
part of the human spices leading to better standards of living and sustainable
development.
• Stakeholders play a significant role in influencing organisations and markets in
environment-related issues such as the purchasing of green products, developing
new green products, and recycling programmes
• Green marketing is an opportunity for companies as the ‘green consumer’ market
segment is growing.

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Bachelor of Commerce

ADVANCED STRATEGIC MARKETING

Unit 1: The Nature of Strategic Marketing ............................................................................................................ 15

Unit 2: The Southern African Marketing Environment .......................................................................................... 29

Unit 3: Identifying Market Opportunities ............................................................................................................... 45

Unit 4: Developing Market Opportunities ............................................................................................................. 59

Unit 5: Identifying and Targeting Attractive Market Segments ............................................................................. 74

Unit 6: Sustainable Competitive Advantage (Sca) ............................................................................................... 90

Unit 7: Productivity and Service Innovation ......................................................................................................... 106

Unit 8: Branding and Positioning ........................................................................................................................ 119

Unit 9: The Marketing Plan.................................................................................................................................. 139

Unit 10: Implementation Of Marketing Strategies................................................................................................ 153

Unit 11: Marketing Metrics .................................................................................................................................. 166

Unit 12: Marketing: an Ethical And Sustainable Approach .................................................................................. 180

Figure 1.1 Levels of strategy development ................................................................................................18

Figure 1.2: Strategies for achieving competitive advantage ......................................................................21

Figure 2.1: Dual structure of the country's economy..................................................................................31

Figure 2.2 South Africa population breakdown by province .......................................................................36

Figure 2.3 South Africa population breakdown by race/ethnic group .........................................................36

Figure 2.4 South Africa languages.............................................................................................................37

Figure 2.5: Total population by province ....................................................................................................38

Figure 3.2: Porter’s Five Forces Model ......................................................................................................52

Figure 3.3: Steps when conducting a ratio analysis ...................................................................................55

Figure 4.1: Market potential unpacked.......................................................................................................62

Figure 4.2: Customer buying process ........................................................................................................63

Figure 4.3: Customer and product adoption forces ....................................................................................64

Figure 4.4: Categories of innovation ..........................................................................................................65

Figure 4.5: Product life cycle Stages of the PLC........................................................................................66

Figure 4.6: Market opportunity analysis .....................................................................................................70

Figure 4.7: GE’s strategic planning grid .....................................................................................................71

Figure 5.1 Segmentation, targeting, and positioning (STP) as a process ..................................................76

Figure 5.2 The three stages of strategic positioning ..................................................................................86

Figure 6.1: Steps in obtaining a sustainable competitive advantage .........................................................93

Figure 6.2: Model for Global competitive advantage..................................................................................94

Figure 6.3: Competitive advantages in the competitive environment .........................................................95

Figure 6.4 Competitive advantages through co-operation .........................................................................96

Figure 6.5: Different forms of co-option .....................................................................................................97

1 MANCOSA – Bachelor of Commerce Honours in Marketing Management

Figure 6.6: Business growth options ..........................................................................................................99

Figure 6.7: Generic testing criteria for different strategies .......................................................................102

Figure 7.1: The role of innovation ............................................................................................................110

Figure 7.2: The innovation development process ....................................................................................111

Figure 7.3 The innovation process...........................................................................................................113

Figure 7.4: Finding insight........................................................................................................................114

Figure 7.5 Total innovation management model ......................................................................................116

Figure 8.1: Holistic branding ....................................................................................................................122

Figure 8.2: The BrandAdvantageTM model .............................................................................................125

Figure 8.3 Examples of category hierarchies ...........................................................................................126

Figure 8.4 Points-of-parity and points-of-difference .................................................................................127

Figure 8.5: Perceptional mapping ............................................................................................................130

Figure 8.6 The brand alignment process .................................................................................................131

Figure 8.7 International brand valuation, 2018 ........................................................................................134

Figure 8.8: Building a brand portfolio .......................................................................................................135

Figure 8.9 Process to renew brand portfolio ............................................................................................136

Figure 8.10 The brand relationship spectrum ..........................................................................................137

Figure 9.1 Marketing plan ........................................................................................................................141

Figure 9.2 Market intelligence ..................................................................................................................144

Figure 9.3 Market opportunity analysis ....................................................................................................145

Figure 9.4 Types of budgets ....................................................................................................................149