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Principles and Practices of Marketing Notes (VVP)
Principles and Practices of Marketing Notes (VVP)
It is also the performance of business activities that direct the flow of goods and services
from producer or seller to the consumer/buyer.
It is also a social and managerial process by which individuals and groups obtain what
they need and want through creating and exchanging products of value with the others.
Sales/selling on the other hand is the transfer of ownership and possession of goods to
the purchasers.
1. Goods-phones,shoes,soaps,detergents
2. Services;hotel,hair dress
3. Events-trade shows,world cup, valentine,
4. Persons-rudisha, oliech.winfrey.
5. Places-city or state.
6. Organisations-airtel, safcom,bidco,equity.
7. Ideas-this is mainly encountered by many social marketers i.e. don’t drive and drink.
8. Experiences –e.g. a trip to Mount Kilimanjaro, lake turkana etc.
9. Information-this is usually the knowledge created and disseminated by universities and
colleges through teaching and publications mainly in media.
10. Properties-mainly real estates as well as financial instruments.
Sales and marketing always have had a close relationship, so close that many people
have confused the two being the same.
Marketing is a method of bringing customers to a business as well as making others
aware of the business product and brand. Sales is selling the product the company
offers.it can be achieved through phone, interaction as well as web page.
Marketing sells the idea of product and services to everyone whereas sales sells the
actual product one on one through personal interaction.
Marketing generates interest but sales brings in money.
Marketing does everything it can to reach and persuade prospective buyers while sales
does everything it can to close the sale and get assigned an agreement/contract.
Marketing responsibility is selling the idea while selling has a responsibility of selling the
product and can be achieved through sales making.
Selling is only a part of firm marketing activities and refers to personal communication of
information to persuade a prospective buyer to buy something.
Marketing refers to the process of planning,exchanging,the
process,concept/idea,pricing,promotion and distribution of goods and services and ideas
to satisfy companies or individuals.sales excludes all this.
Marketing has led to the emergence of marketing concepts(philosophies that aim at
satisfying customer needs) while selling has led to the emergence of selling concepts(a
philosophy that encourage organizations to undertake a large scale selling promotion
effect.
Sales people usually sells to customers the products while the marketing meets the
organization with customers. the major objectives of sales department is responsible for
activities like promotion. marketing ignores all this.
1. Need-this is a state of felt deprivation most of which is inborn and many can not do
without eg need for food,shelter and clothing.
2. Want –they are specific satisfaction for particular needs and are insatiable ie one can
never fully satisfy them.
3. Exchange-this is the act of obtaining a desired product from someone by offering
something else in return.
4. Product-this is anything that can be offered to someone to satisfy a need or want and can
be a good/services(doctors,hair cut),tangible or intangible.
5. Demand-This are human wants that are backed by the purchasing power of an individual.
6. Customer value-this is the difference between the value the customer gains from owning
and using a product and the cost of obtaining the product.
7. Customer Satisfaction – this depends on the customers perceived performance in
delivering value relative to the buyers expectation.
8. Quality-customer satisfaction is closely linked to quality of products and services.many
marketers have now adopted Total Quality Management programmes assigned to
constantly improve the quality of their offers and marketing processes.TQM can narrowly
be defined as freedom from defects.
9. Exchange-this is the act of obtaining a desired object from someone by offering
something in return.
10. Transaction and relationships-this are created mainly through satisfaction of consumers
needs and wants.
11. Market-the concept of exchange and relationships led to the concept of a market.these
buyers share a particular need or want that can be satisfied through exchange
relationships.
Cost leadership strategy-this is where a firm incurs the lowest costs in production as
opposed to other businesses in the same line of production.
Differentiation-this involves offering a product that is unique .
Market Focus/target-this involves targeting the innovators as opposed to laggards in a
market.
3.Prepairing an integrated marketing plan and programme-this is where the marketer will
outline the consumers and the company that will be served and create value to
consumers.next,the marketer develops an integrated marketing mix ie 8 ps of marketing
ranging from product,price,place,promotion,people,process,probe and process.
Customers perceived value which involves evaluation of the differences between all the
benefits and all the costs of a market offering relative to those of competing offers.
Customer satisfaction:product performance match buyers expectations.
5.Capturing value from customers.this is in return in the form of current and future
sales,marketing share and profits.
MARKETING ACTIVITIES.
1. Creates utility-this is the ability to satisfy a need ie form utility-this occurs mainly when we
have a change in state.place utility-this mainly occurs in transportation.time utility-this
arises in all retail outlets and poscession utility-arises when we have ownership of
goods.
2. Employment creation-this arises when one gets task of designing bill boards,website
designers,retailers,wholesalers,warehousing,communications as well as doctors and
lawyers indirectly.a good example is in the united states where between ¼ and 1/3 of
civilian labour force is engaged in marketing activities and projections indicate that future
employment in marketing will remain strong.
3. Creates revenue to the government due to the taxes that are levied to the marketers.
4. Earns a country foreign exchange mainly through international marketing.
5. Entertains consumers e.g. some tv adverts.
6. Consumers get informed about products that are prevailing in the markets-people are
able to consume what they would not haveconsumed as there is accessibility to products
due to cross-border trade,international trade etc.
7. Widens the markets-this is mainly through advertisements,salespromotion and
distribution.it is also through marketing that goods and services find their way into the
trading blocks thereby increasing sales e.g. PTA.COMESA and European markets.
8. Helps to develop brand loyalty-this arises due to the repeat purchase by existing
customers and favourable accommodators by existing customers to friends,neighbours
and others.
9. Helps to introduce new products in the market therefore raising the standard ofliving for
most people e.g. shopping at internet
10. It generates consumers enthusiasim(become interested in something eagerly) for goods
and services.
11. Has a strong impact on beleifs and lifestyles of people-marketers are criticized as
developing materialistic attitudes .
12. Helps to improve the quality of life as well as preservation of the environment- marketers
encourage firms to make safer products ie low-tar cigarettes,create public messages on
energy conservation,cure disaeses(e.g. usage of Dettol),driver safety ie don’t drink and
drive,abuse alcohol and other topics.
MARKETING /SALES MANAGERS FUNCTIONS/TASKS/ROLES
Global economy.
Changes in technology
Income gap
Environmental imperative and social responsibilities
Aging population
Later marriages
More divorce
Single and smaller families
Emergence of distinct ethnic consumer groups.
Proliferation of more varied lifestyles.
Stringent government policies
Poor infrastructure.
Inadequate finances.
Societies have moved from agriculture and individual self sufficient to an economy built
around division of labour and specialization,urbanization and industrialization.it should
however be noted that production for individual self sufficiency is not marketing because
there is no exchange going on hence exchange or trade laid the foundation of marketing
and is the corner stone of marketing.
Here,the production process was a simple one with the main emphasis laid on
production,which was believed to be in short supply,and the economy was characterized
by shortages.little or no attention was devoted to marketing and production processes
were very local ie within neighbouring areas.the function of a sales department in an
organization was simply to sell the copanys output at a price(this was a period of up to
1930.)
At this stage the small producers began to manufacturer their goods in larger quantities
in anticipation of future orders.further division of labour occurred and a type of business
developed to help sell the increased output ie intermediaries/middlemen.to facilitate
communication and buying and selling,the various interested parties tended to settle near
each other hence the formation of trading centers.the main idea at this stage was to sell
whatever was produced and this called for heavy/substantial promotional effort to be
expended.unfortunately,this was the period that the concepts of selling acquired its bad
reputation(this was the age of hard selling ie the period up to 1950).
Modern marketing was born with the industrial revolution where there was growth of
urban centers and declining rural population resulting in rural-urban migration. The
emphasis here was on the growth of manufacturing enterprises because the market
demand exceeded the available supply (demand greater than supply)but this has
changed and supply has now exceeded demand shifting the emphasis from production to
marketing.
The conditions of the 1970s led to this fourth stage,which was characterized by the
concern for the society.the emphasis here is on social responsibility on the part of the
marketers for their survival in the industries.marketers must therefore be concerned with
creating and delivering a better quality of life rather than only a material standard of
living. The rise in social responsibility as a concept for business was highly influenced by
the rise in consumerism movement.
Marketing concept-this refers to the ways of business thinking that have evolved over
time and they include;
1. Production concept-this is the oldest philosophy that has guided the sellers.it can be
traced to the industrial revolution. Organizations produced in large quantities the belief
being that consumers will favor products that are either available or were affordable.
Manufacturers therefore focused on improving production and distribution efficiency. This
philosophy is applicable when the following conditions exists.
1. When demand for a product exceeds the supply.
2. When the price of a product is too high and can only be brought down with increased
productivity.
1. Product concept-this was a belief system adopted by business men before 1920.the
belief was that consumers will favour products that offer the
most quality(design ) performance and features to them. If u design a product in a way
that looks attractive,consumers will have to buy the product.
2. Selling and sales concept/”hard sell”.this belief was developed between 1925-1950
and was commonly referred to as hard sell concept(companies using adverts to become
the best ie out do the others)and it prescribes that consumers will not buy enough of
organisations products unless it undertakes a lot of selling and promotional
effort.organisations must therefore advertise their products and employ sales persons to
communicate with consumers with the aim of convincing them to buy the products.this
theory is applicable for unsought goods i.e insurance,microwave etc.ie it aims at
informing,communicating and promoting a companys product.
3. Marketing concept.-this is a business philosophy that was adopted after 1950 and the
philosophy holds that achievement of business goals depends on determining the needs
of customers and delivering the desired level of satisfaction to consumers more
effectively and efficiently than the competitors.the marketing concept stands on the
following pillars/highlights/considerations.
1. Market focus/targeting-the firm must concentrate on one or a few key segments of the
market and satisfy their needs.ie marketers usualy target the innovators as opposed to
laggards in a market.
2. Customer orientation-the firm must carefully define customer needs from the customers
point of view.this is important because a satisfied customer:
3. Will buy the product again.
4. Will talk favourably to others about the firms product.
1. Is likely to buy other products that the company may add to its line.
2. integrated marketing-this means that the various marketing functions must pull together
inorder to satisfy the customer e.g. well trained and motivated employees,good and
efficient suppliers e.t.c.
3. profitability-the job of a marketer is to satisfy consumer needs at a profit.
This concept is based on detrmining the needs and wants of consumers and delivering
superior value in a way that maintains or improves consumers and societies well being.it
requires that organisations should not only satisfy consumer needs but act in a way that
preserves the welfare of consumer and society.The triangle below illustrates how all
stakeholders should be involved in any marketing activity.
a-balance the society(human welfare).
b-balance consumers(satisfaction).
c-balance company(profits).
High prices due to;high costs of distribution,high advertisement and promotion costs and
excessive markups.
Deceptive practices;ie deceptivive pricing,deceptive promotion and deceptive packaging.
Cultural pollution-some adverts erode the norms taboos and values of customers.
Acquisition of competitors.
Marketing practices that create barriers to entry
MARKETINGINFORMATIONSYSTEMS.
The marketing environment is changing at a very fast rate hence there is need for real
time and up to date market information. In today’s information based society, companies
with superior information enjoy a competitive advantage.
MKIS- is a system that consists of people equipment and procedures that are used
to gather, sort, analyse,evaluate and distribute needed timely and accurate
information to marketing decision makers.it helps managers to analyse,plan,implement
and control various activities in the organization.
1. Access information needs-a good mkis should balance the information that managers
require against what they really need and what is viable to offer given the organizations
resources.ie how much information is needed, cost of obtaining the information given
organization resources and benefits of having the information.
2. Developing needed information-this involves gathering information as many sources as
possible
3. Carrying out information analysis-this involves using statistical and mathematical models
to analyze information collected and its interpretation
4. Distributing the information-the mkis distributes information to various decision
This consists of information gathered from sources within the company which helps to
evaluate the marketing performance and identity marketing problems and opportunities.
The records include;
This is a set of procedures and sources used by managers to obtain every day
information about development in marketing environment. Sources of marketing
intelligence include;
Training and motivating the sales force to identify and report new developments.
Motivating retailers and distributors to report important intelligence.
Monitoring competitors activities
Setting up a customer’s advisory panel made up of representative customers or the
company’s largest customers so that a company can gain valuable information about
customer needs and feelings.
Purchasing information from outside suppliers ie research firms outside the company eg
synovate.
Establish a marketing information centre to collect and circulate marketing intelligence.
3)MARKETING RESEARCH.
This is the systematic design, collection, analysis and reporting of data and findings
relevant to a specific marketing situation facing the company. There is a design of an
interview guide and a questionnaire. Marketing research is based on specific and
opportunities that the company would like to pursue. It therefore requires;
1. A market survey.
2. Product preference tests –why; improvements etc
3. Sales forecasts based on various regions
4. Advertising evaluation-ie are you effective?.
SOURCES OF INFORMATION.
Primary sources-this is fresh research ie information being collected for the first time to
solve a particular problem or gain insight into a particular event. This information is
collected through
questionnaires,interviews,observation,fieldsurveys,opinioncalls,experimentation,aptitude
tests etc.
Secondary sources-this is information stored in some records and hence it is not an
original information source. It can either be from internal or external sources.
1. Internal sources-these are sources of information that already exists within the
organization. The information could have been collected for other uses but can be used
for the current research eg company magazine and the internal records system.
2. External sources-they are sources outside the organization and include the: internet,
ministry of trade and industry newspaper, libraries etc.
1. Primary data-this is the information at hand and collected for the first time.
2. Secondary data-this is data available or gathered(collected and analyzed by someone
else; published materials,reports,journals and books
Types of observation.
Limitations.
Feelings, beliefs and attitudes that motivate buying behavior and infrequent behavior can
t be observed.
Expensive method.
Advantages.
Limitations.
Advantages.
Limitations.
Not flexible.
Takes longer to complete than telephone /personal interview.
Response rate is often very low.
Researcher has no control over who answers.
Merits.
Drawbacks.
Advantages.
Disadvantages.
RESEAECH DESIGNS.
This is the most appropriate when there is little or nothing known about a phenomena of
study and there is need to gain insight and ideas about a problem eg customer surveys
to find out customer tastes and preferences.
This is most appropriate where the researcher is fairly knowledgeable about a key
aspect/subject of study but has little knowledge if any regarding their characteristic nature
of details; hence a descriptive study helps to generate knowledge about the qualitative
and quantitative elements of what is being studied.
This is concerned with determining a cause and effect relationships and it involves
manipulating one or more variables in order to determine their effects eg manipulating
price to determine its effect on sales of a company.
The research problem must be identified clearly and precisely ie it must not be
ambiguous (contradictory).
This refers to the group of people/objects that the researcher will make generalization
based on the findings. The concern of the researcher is:
1. To define the population of interest ie All those people likely to be interested in buying the
company’s products.
2. Specifying the sampling frame. This is a list of those in the population of interest ie same
gender, same income etc.
3. Specifying the sampling units ie the type of people to be interviewed or the specific group
of people ie eastern, western or coastal regions.
4. Selection of the sampling method to be used ie simple, stratified, systematic etc.
5. Determination of the sample size. The size must be representative of the total population.
6. Data collection.
This involves conducting desk research, field work or experiments. The researcher
should ensure that proper data collection instruments are put in place in order to obtain
the right information.
The purpose of data analysis is to obtain meaning from the research carried out. It
involves the use of statistical methods and tools eg mean, measures of central tendency
and software eg excel as well as hardware’s eg printers to analyze and interpret data.
This involves presenting the findings inform of a report in order for users to make
decisions that are relevant to their departments. The report is the yardstick for evaluating
the research project.
Completeness-it should not leave out important details or procedures of the research.
Accuracy-it should report the exact findings of the research without exaggeration.
Time bound
Economical in terms of cost.
Utilize the principles of the scientific (step by step) method wherever possible.
Creativity ie think “outside the box”.
Should follow the ethics of the society.
1. It provides accurate, effective and useful information that is vital for decision making
across the entire organization. The decisions include;
2. Size of the market.
3. Customers and their buying motives.
4. Changing trends in the market.
5. Customer satisfaction /dissatisfaction with a product.
6. It can be used to evaluate the effectiveness of the various elements of the marketing mix
such as advertising.
7. It provides feedback to the organization which helps it compare performance before the
marketing strategy was put in place and after.
This is the systematic collection of data from the other three systems, the use of tools
and techniques with supporting software and hardware by which an organization gathers
and interprets relevant information and turns it into a basis for making marketing
decisions. The decisions can be classified as;
1. Strategic decisions
This are made by top level management and involves establishing objectives for the
organization and long term plans for attaining those objectives.
1. Tactical decisions.
This are made by middle level management and are concerned with allocation of
resources needed to meet organizational objectives.
Operational decisions
They are made by lower level management and involve executing specific tasks.
TOPIC THREE
MARKETING MIX.
This is a framework which helps to structure the approach to each market. The mix is a
bundle of variables offered to the customer. This is a tactical/operational part of a
marketing plan.it is composed of the elements below
Product -refers to anything that can be offered to a market for attention, use, or
consumption that might satisfy a want or need
Price- This is the amount of money charged for a good or service.This is the sum of value
consumers exchange for the benefit of having or using a good or service.
Place- refers to channel of distribution or the route or path followed by a product as it
moves from the producer to the consumer/final user.
Promotion- Promotion is a function of marketing mix and is a technique used in creating
awareness on the companys product as well as the company itself.
Process-involves taking into account all elements that translate to satisfaction of
customer needs and wants.
People-this are the living creatures who are willing and able to transact.
Physical evidence-this are elements that can be seen,felt,heard or smelt.
Probe-this basically refers to asking questions or carrying out a market research.
Generally, the specific individual marketing mix elements can be used to elaborate
more on the specific marketing mix importance’s.
TOPIC FOUR.
MARKETING ENVIRONMENT.
This is the environment prevailing outside the organization for which a business can not
manipulate but has to try and fit within the prevailing factors.it takes the advantage of
opportunities and tries to avoid the threats.
1. Rivalry among firm-this is where firms come together and rival so as to attain the
highest market share.
2. Bargaining power of consumers-this is a case where there are many consumers who
have different bargaining powers and thus consumers will buy goods in the places they
wish to.
3. Bargaining power of suppliers-this is a case where there are numerous buyers and
few suppliers.therefore dictating the price to charge e.g. the case of oil.
4. Threat of substitues-this is where one can either opt one substitute instead of the other
e.g. coffee/tea.when one adopts one substitute good,the other good is faced with a
threat.
5. Threats of new entrants-when one experiences great profits,other firms may come in so
as to enjoy the same profits causing one to be faced with a serious challenge.
CLASSIFICATION OF COMPETITORS.
Leaders-they are usually innovative in nature and are regulary first to bring new products
in market place e.g. safaricom.they usually use the following
policies;harassment,innovation,fortification(competing ie safaricom and airtel in terms of
calling prices and is usually in futility) and confrontation through price wars.
Follower-tend to copy what the leaders do. ie they usually copy ,imitate and capitalize on
the leaders weaknesses.
Challenger-tries to overtake the market leaders.
Niche-marketers-this is a marketer or an organization which offers some kind of
specialized product/service referred as unique service provider(U.S.P) e.g. equity bank
that usually targets the low income groups.
KEY ISSUES ABOUT A COMPETITOR THAT A MARKETER SHOULD BE AWARE
OF.
1. Generic competition-this is a type of competition where products are used for the same
purpose through the products that are in different industries e.g. cinemas and football
matches compete as forms of entertainment.
2. Enterprise competition-this are firms that produce similar products e.g. bata shoe
company and tata company competing as forms of foot wear.
3. Brand competitions
4. Monopolies
5. Monopolistic
6. Oligopolies
7. Perfect competition.
Publics-this is any group that has an actual or potential interest in a firm and assists a
firm to achieve its objectives.the following are the types of publics;
1. Media publics.
2. General public
Environmental groups
1. Consumer organisations
2. Local public e.g. neighbours and community
3. Financial publics
Government bodies
Trade unions
1. Local community.
TOPIC FIVE
PRODUCT
Product refers to anything that can be offered to a market for attention, use, or
consumption that might satisfy a want or need. It includes,
Services
Ideas e.g. consultancy firm on lectures where people purchase your idea and pay e.g.
Elijah kupata invention of security alarm.
places e.g. visits to museum;a need is satisfied when one pays
physical objects
PRODUCT CLASSIFICATIONS.
Durable goods normally service many uses and are consumed or used for a very long
period of time. Perishables are used once or a very short period of time. Other products
which are taken into account in this stage includes tangible items which are usually
felt,touched or seen while intangible products can’t be felt, touched or seen e.g. services.
1. Consumer goods-this are products bought by consumers for their own final
consumption.they can be classified in four main categories.
2. Convenience goods-this are goods that consumers know enough about them before
purchasing them.they buy the goods on a day to day basis. they purchase them with
minimum effort thus no evaluations are made and frequently e.g.
newspapers,foodstuff,airtime,milk,bread,tea leaves etc.
3. Shopping goods-this are goods that consumers may want to compare in terms of
features,quality,price,suitability and style in several shops before making a
purchase.most of them are desirable e.g. furniture,clothes,tv set etc.
Speciality goods-this are goods that consumers have a strong brand preferences for and
they are willing to spend a lot of time and effort in locating them because they are not in
any shop ie they are got from specific outlets.most are very expensive and have a unique
brand identification and owning them carries a status in it e.g. tv,cothing.
1. Unsought goods-they are products consumers may not yet be aware of and if they are
aware they may not place so much meaning to them and have to be convinced of their
importance inorder to purchase them e.g. insurance policies.a customer do not ordinarily
purchase the product unless convinced through personal selling and are not in the
budget.
2. Industrial goods-they are products bought by businesses for further processing or for use
in conducting their operations.they include.
3. Material and parts-this includes raw materials such as wheat which is to be processed
into flour then to bread and parts such as wires,yarn(for sweaters).the finised forms must
be attached to others to function well e.g. for electricity lines,copper(finished product) is
needed as well as some sufurias.
4. Capital equipment-includes machinery equipment and installations such as
generators,computers,wardrobe etc.
5. Supplies and business services-this includes services such as
banking,warehousing,insurance and cleaning services and also includes repair and
maintenance services to machines as well as supplies of stationery.
6. Component parts-this are finished products themselves but which need to be attached for
another good for them to be useful e.g. tyres which are got from rubber(finished product).
7. Standardized and custom made goods-standardised goods are produced in large
quantities for use by everyone while custom made goods are produced based on
customer specifications.
INTRODUCTION.
Like people,products go through a life cycle in that they are born,grow,age and eventually
die or are replaced. Product life cycle refers to sales history of a product beginning with
development ending with sales decline.
1. Development.
This is the pre launch phase where a company undertakes research and development as
the product progresses from experimentation to the tangible product.confidentiality is
maintained by keeping information away from competitors.
1. Introduction.
1. Market skimming pricing-firms sets high prices to skim off profits as quickly as possible
before competitors enter the market.it is ideal when one is targeting the innovators,early
adopters,high income earners and customers with high social status.
2. Penetration pricing-a company sets low prices so that I can build a market share quickly
and attract more customers before competitors enter the market.its ideal when one relies
on economie of large scale,creation of barriers to entry to shy away competitors from
venturing in this market,to increase the market share of the company and when the
products demand is elastic.
3. Growth stage.
1. Decline stage.
Strengths of PLC
Enables the company to forecast future behaviour of the product and prepare to handle
such behaviour
Enables the company to decide on the marketing strategies to use at each stage of the
PLC
Assists the company to decide when to launch a new product and when to discard an
existing product
Enables the company to decide on the number of products it can maintain at each stage
of the PLc
Guides on the promotional methodology that can be used in different product stages.
Assists in targeting the right type of customers.
Helps marketers to understand the different stages that a product goes through.
Weaknesses of PLC
1. New to the world-this is a truly unique product that is there is no other product like that in
the market.
2. Improvement /revision to the existing products.this are products that are significantly
different from existing goods in that they provide improved performance.
3. Imitative products-they are new to a particular company but not new to the world.eg sqny
and not sony or addidias instead of addidas.
1. To sustain the company growth once a product has reached the maturity stage.
2. To respond to environmental force-produce products that are environmental friendly.
3. To respond to new technology.
IDEA GENERATION–
1. Customers ie
2. Customer ways-this is where you ask customers their need and wants which are not
being met.
3. Focused group discussions-this is where you get a group of customers and introduce a
topic to them.the fact will be towards their needs and lifestyle.
1. Mails sent
2. Telephone calls
3. Projected lists.
4. Company laboratories-when marketers are conducting experiments they may get an idea
ie they may make discoveries by chance coming up with good ideas about a product.
5. Competitors-ask competitors what they like about competitors products.also buy the
products yourself,analyse it and then make a better product.
6. Sales representatives and middlemen-because there is constant touch with
customers,they can provide first hand information about customers needs and their
complaints.
7. Marketing research firms-they are consultants who find out and tell you what is wrong
with your product and possibilities of new ideas in the market.
IDEA SCREENING
Sloot and drop poor ideas as early as possible.it tries to reduce the number of ideas to
one attractive practical few.in improving ideas and screening items the company should
avoid;
1. The existing or potential demand for the products-are there sufficient number of people in
the market and do they have purchasing power?.
2. The marketing compatibility-this is the extent to which the proposed product matches with
the existing marketing variables.
The environment and social standard compatibility-this is the extent the proposed new
product harmonizes with the environment and social standards.
BUSINESS ANALYSIS-
A company should evaluate the business attractiveness of the proposal and it is looked
at from the point of view of sales,costs involved and the profits you expect to make.it
makes use of forecasting techniques which include use of historical data of similar
products or through customer always in order to find out buyer intentions.
PROTOTYPE PRODUCT DEVELOPMENT-
This is where a company answers the question whether the product idea can be
translated to a technically and commercially feasible product.it is the stage of making the
idea concrete(reality).the research and development develops a prototype(model) that
satisfies the following criteria.
5)MARKET TESTING-
This involves testing the product to learn how customers and ideas react to its
use,handling and purchasing the actual product.First,one selects a representative sample
of consumers using probability and non probability techniques. The specific towns and
markets are then visited. The length/duration of the test is the next step where the period
that one carries the trial test is determined. How the product functions and how many
people are buying or trying frequency of purchase and overall attitude towards the
product is essential. Finally decide on the action to be taken based on the tested results.
6)COMMERCIALIZATION
This is the final stage in which a company makes a final decision to launch the new
product in market. A company can decide to launch a product by;
1. Roll out introduction-this involves starting with a few towns when introducing to its entire
country with time.
2. Crash introduction-here,one introduces the product into the national level market at once
ie the product is available country wide. A company has also to decide the time of the
launch e.g. text book can be launched at the beginning of the year. The launching can be
single,locational,international,national or regional. Market testing gives the management
enough information to make a final decision about whether to launch a new
product.When commercializing a new product, the following factors have to be taken into
account:
3. When (timing)
4. Where (Geographical strategy)
5. To whom (target market prospects)
6. How (introductory market strategy)
1. Core benefit – The fundamental service or benefit that the customer is really buying.
2. Basic products – Is the physical/ tangible product
3. Expected product – Set of attributes and conditions that buyers normally expect and
agree to when they purchase a product.
4. Augmented product – This is what customers desire beyond their expectations e.g.
warranty,repair services,toll free help no etc.
5. Potential product – This encompasses all the augmentations and transformations that the
products might ultimately undergo in the future.
1.Product Mix of a company refers to a set of all products, lines and items that a
particular seller offers for purchase to buyers / consumers. Conversely,
2.A company’s product line refers to a group of products closely related (due to the fact
that they function in a similar manner) and are sold to the same customer groups,
marketed through the same type of outlets or fall within a given price range. They satisfy
the characteristics below: –
Consumed together
Produced together
Distributed similarly or
1. Product Mix Depth refers to the number of variances offered for each product in the line
(for example, in the soft drink industry Crest comes in three sizes and two formulations
‘regular’ and ‘mint’ – thus Crest has a depth of six.) This can be used to expand a
company’s product portfolio if it is made deeper by adding more product variances to
each product e.g. adding more sizes in the packaging variation or adding more
formulations.
2. Product Mix Length: Refers to the total number of items in its product mix. For example
in the soft drink industry, a company like Coca Cola International may include Coke,
Sprite, Fanta and Crest. Thus, if we want the average length of a Coca Cola soft drink
product then we may calculate it as follows:A company can use product mix length to
expand its product portfolio by introducing more brands of its items to the existing ones
and making sure its current product lines are full ones.
3. Product Mix Width: Refers to how many different product lines the company carries (for
example Coca Cola International has one product line: soft drinks).
Product Mix Width can be used to expand a company’s product portfolio if the company
introduces new product lines like beer, water, juice or bread for example.
1. Consistency-how closely related the individual product lines are in end use,production
requirements,distribution channels or in some other way.
Is the set of all products and the items that a particular seller offers for sale to the buyers.
4.Product item
It usually adds to the product ia a bottle of soda with the name coca cola is perceived to
be of high quality than one in un-marked bottle which is said to be of low value.it also
helps consumers in identifying products that might benefit them.branding also says
something on the product quality and consistency ie same features,benefits and quality
each time they buy.
It usually gives sellers several advantages(one spends less on marketing).it also offers
legal protection for unique product features that otherwise might be copied by
competitors.ie Toyota can offer majors such as lexus;Toyota and Scion brands each with
numerous sub-brands e.g. Camry;Prius;Matrix;Yaris;Tundra and landcruiser.
PACKAGING
This involves designing and producing the container/wrapper for a product.it has shifted
from attracting attention to describing the product,to making the sale.companies are
realizing the power of good packaging to create immediate consumer recognition of a
brand.today,a competitive world,the package may be the sellers best and last chance to
influence the buyers.poorly designed packages can cause headaches for consumers and
lost sales for the company.sometimes even seemingly small packaging improvements
can make a big difference.
In recent years,product safety has also become a major packaging concern.we have all
learned to deal with hard-to open “child-proof packaging”.the company also must heed to
growing environmental concerns ie go “green” by reducing their packaging and using
environmentally responsible packaging materials.
This usually ranges from simple tags attached to products to complex graphics that are
part of the package.it helps or identifies product /brand.helps in describing the product ie
who made it and where it was made;its contents;how it is to be used and how to use it
safely.it promotes the brand,support its positioning and connect with customers.
E.g. pepsi;recrafted graphics on its soft drink to give the brand a more meaning and
social relevance to its youth audience.
PRODUCT ATTRIBUTES
1. Quality
2. Performance level.
3. Consistency ie freedom from defects and deliver the targeted level of performance.
4. Development-TQM model is used.
5. Features should be
6. The style ie appearance should have no effect on performance.
7.
Marketers must understand this process in order to build an effective strategy for early
market penetration.
– This process describes how potential customers:Learn about new products,try them
and Adopt or reject them. Adoption is an individual’s decision to become a regular user of
a product. The consumer adoption process is later followed by the consumer-loyalty.
Adopters of new products have been observed to move through the following five stages:
–
1. Awareness – The consumer becomes aware of the new product but lacks information
about it
2. Interest – The consumer is stimulated to seek information about the product
3. Evaluation – The consumer considers the costs and benefits of using the product
4. Trial – this is usually based on the evaluation to buy to estimate the value of using the
product.
5. Adoption-if the trial is favourable,adopt the new product and use it regulary.
Adopter Categories.
1)Innovators-this are the first 2.5% of the buyers who adopt new products. They
comprise of the young,better educated and consumers who have higher incomes. They
are more willing to take risks.
2)Early adopters-these are the next 13.5% of buyers and are guided by respect and are
the opinion leaders in the communities. They adopt new ideas early but carefully e.g.
preachers,musicians etc.
3)Early majority-these are the deliberate consumers.they are the leaders but are careful
in what they purchase.they represent 34% of the buyers.
TOPIC SIX
PRICE /PRICING.
This is the amount of money charged for a good or service.This is the sum of value
consumers exchange for the benefit of having or using a good or service. This is the
market value of a product as it is offered in market.
IMPORTANCE OF RICING.
PRICING OBJECTIVES.
This gives the directions to the whole pricing process.determining what your objectives
are is he first step in pricing.when deciding on pricing objectives,you must consider.
SPECIFIC OBJECTIVES.
A firm must set a price for the first time when the firm develops or acquires a new
product,when it introduces its regular product into a new distribution
channel/geographical area and when it enters its bid on new contract work.
Economy Penetration
Skimming Premium
price
high
1. Select the price objective-ie maximum current profits,maximum current revenues and
current sales growth.
2. Determine the demand-analyse the demand curve ie demand curve is normally inversely
related to price.
3. Estimate the cost-demand sets a ceiling on price that the company can charge for its
products and the company sets the floor ie fixed/variable.
4. Analyze competitors costs,prices and offers-benchmark your costs against competitors
cost.
5. Select a pricing method ie markup,target return,value,sealed bid etc.
6. Select the final price-pricing methods narrows the price range from which the company
must select its final price.in selecting the final price,the company must consider additional
factors including psychological pricing,influence of other marketing mix elements on
price,company policies and objectives,pricing policies and objectives and legal
constraints.
1.Cost-based pricing.
1. Mark-up pricing-this involves adding a standard markup to the product cost .markups are
higher on seasonal items,slower moving items and items with high sewerage and
handling costs.a high mark up however may be disadvantageous if competitors prices
are low.ie hotels peak mostly in holidays.
Advantages of high mark up.
It is advantagious in that sellers can determine their costs more easily and hence by
basing their prices on cost,they simplify the pricing task.
Where all firms use this pricing method,prices tend to be similar hence price competition
is minimized.
Most people feel that pricing method is fair to both buyers and sellers.
1. Target return pricing-the firms determines a price that will yield its target rate of return on
investments.if the firm doesn’t reach expected unit sales,the marketer can prepare a
break even chart to learn what would happen at other sales levels based on different
prices.the manufacturer will then use different prices and estimate the probable impact
on sales volume and profits.
v.Going rate pricing-the firms basis its price largerly on competitors prices.smaller firms
follow the leader changing their prices only when the market leaders change theirs rather
than when their own demand or costs change.some firms may charge a slight premium
or a slight discount but they preserve the amount of difference to minimum.
Vi sealed bid pricing-this is where a company submits sealed bid for jobs.the firm bases
its price on expectations of how commpetitors will price and for a firm to win a contract,it
has to submit the lowest price bid,however it can not price below costs and neither can it
compromise on quality,hence a firm will bid a price that will maximize the expected profits
in the long –run.
Pricing strategies
This are defined as long plans and they are not limited,compared to ways of establishing
prices.
1.Premium Pricing
Use a high price where there is uniqueness about the product or service. This approach
is used where a substantial competitive advantage exists. Such high prices are charge
for luxuries such as Conrad Cruises, Savoy Hotel rooms,airplnes etc
2.Penetration Pricing
The price charged for products and services is set artificially low in order to gain market
share. Once this is achieved, the price is increased. This approach was used by France
Telecom and Sky TV.
3.Economy Pricing
This is a no frills low price. The cost of marketing and manufacture are kept at a
minimum. Supermarkets often have economy brands for soups, spaghetti, etc.
4.Price Skimming
Charge a high price because you have a substantial competitive advantage. However,
the advantage is not sustainable. The high price tends to attract new competitors into the
market, and the price inevitably falls due to increased supply. Manufacturers of digital
watches used a skimming approach in the 1970s. Once other manufacturers were
tempted into the market and the watches were produced at a lower unit cost, other
marketing strategies and pricing approaches are implemented.
Premium pricing, penetration pricing, economy pricing, and price skimming are the four
main pricing policies/strategies. They form the bases for the exercise. However there are
other important approaches to pricing.
5.Psychological Pricing
This approach is used when the marketer wants the consumer to respond on an
emotional, rather than rational basis. For example ‘price point perspective’ 99 cents not
one dollar
Where there is a range of product or services the pricing reflect the benefits of parts of
the range. For example car washes. Basic wash could be $2, wash and wax $4, and the
whole package $6.
Companies will attempt to increase the amount customer spend once they start to buy.
Optional ‘extras’ increase the overall price of the product or service. For example airlines
will charge for optional extras such as guaranteeing a window seat or reserving a row of
seats next to each other.
8.Captive Product Pricing Where products have complements, companies will charge a
premium price where the consumer is captured. For example a razor manufacturer will
charge a low price and recoup its margin (and more) from the sale of the only design of
blades which fit the razor.
Here sellers combine several products in the same package. This also serves to move
old stock. Videos and CDs are often sold using the bundle approach.
10.Promotional Pricing
Pricing to promote a product is a very common application. There are many examples of
promotional pricing including approaches such as BOGOF (Buy One Get One Free).
11.Geographical Pricing
Geographical pricing is evident where there are variations in price in different parts of the
world. For example rarity value, or where shipping costs increase price.
12.Value Pricing
This approach is used where external factors such as recession or increased competition
force companies to provide ‘value’ products and services to retain sales e.g. value meals
at McDonalds.
TOPIC SEVEN
PLACE/DISTRIBUTION/TRANSPORTATION.
CHANNELS OF DISTRIBUTION.
A channel of distribution is the route or path followed by a product as it moves from the
producer to the consumer/final user.
Direct/zero channel.
Indirect channel.
DIRECT MARKETING/ZERO CHANNEL(PRODUCER-CONSUMER).
This is the distribution system where no intermediary is used and the company sells the
product directly to the consumer.
REASONS FOR GROWTH OF DIRECT/ZERO MARKETING.
1. High cost of driving,traffic congestion and packing headaches. Have made people prefer
goods to be directly delivered to their homes.
2. Lack of enough/inadequate/insufficient time.
The market is now comprised of high market nitches(narrowly defined groups),each with
different preferences.
1. Direct mail.
2. Tele marketing-calling through telephone.
3. Kiosk marketing-this is placing machines in busy places such as airports and bus stops
where customers can get specific goods e.g. stamps,sweets and soft drinks a good
example is the automatic vending machines.
4. Internet.
2.INDIRECT CHANNELS.
Producer-agent/broker-retailer-consumer.
Producer-wholesaler- jobber-retailer-consumer.
CHANNEL CONFLICT.
This are disagreements among marketing channel members on goals and roles ie who
should do what for what rewards.eg
In practice, conflict is usually spotted after it is well developed and obvious. This is
because the potentially negative effects of the conflict may have a head start and may be
already out of hand.
It is therefore better for the channel manager to have some kind of early warning system
using perception surveys, marketing channel audit and distributors advisory councils or
channel members’ committees.
1. Dual compensation-this is applied when conflict exist between direct and indirect
channels. The goal is to move the indirect channel from the position of potential
adversary for direct sales force to one of partner for direct sales force.
2. Activity based compensation/discount-it is used to manage cross-channels conflict or
conflict between channels of differing cost structures and capabilities.it is applied by
paying a channel a specific discount if it performs a measurable task or function.
3. Compensation for market share-it is usually applied to direct versus indirect conflict,
direct sales representatives is compensated based on total market in a territory.it
motivates the direct representatives to partner with indirect channels to maximize territory
volume.
4. Economic solutions-compensate channels fairly for function performed and help direct
channels away from functions that create destructive conflict.
5. Control-put a structure around a channel strategy to limit the potential for undue
destructive conflict.
RESOLVING CONFLICT.
Rosenberg suggested methods that a channel manager may use to resolve conflict.
These are:-
RETAILING.
This refers to all activities involved in selling goods or services directly to final consumers
for their personal, non-business use.
ROLES OF RETAILERS.
This roles are mainly classified into three main scopes;consumers,wholesalers and
manufactures. They include.
WHOLE SAILING
FUNCTIONS OF WHOLESAILING.
– Buying and assortment( a group of similar things having different sizes,colour and
quality) building
– Bulk-breaking
– Warehousing(storage).
-Price stability –This is possible mainly due to storage that happens .During low
production seasons,stored goods are released in the market and stabilize supply in the
market.
– Transportation
– Financing
– Risk bearing
what is supplied.
-buys in bulk and stocks in large quantity-buys at smaller quantity and sells in
smaller units.
-specialise in buying and selling few -buy and sell different commodities
types of commodities
FUNCTIONS OF MIDDLEMEN/INTERMEDIARIES.
1. Contacting function-this involves being link between the producer and the consumer.
2. Market feed back(communication)-they relay information to consumers about the product
and collect feedback from the customers to the manufactures.
3. Breaking the bulk-this is in smaller quantities that customers can afford.
4. Physical distribution-this is transportation of prducts from producer to the consumer.
5. Demand stimulation function-through advertising,personal selling and sales promotion.
6. Advancing credit to their clients
7. Storage function-warehousing goods on behalf of the producers.
E-commerce /It has improved distribution system and enhanced communication among
members.it involves use of computers,mobile phones,internet,electronic payments e.g.
Mpesa etc.
1.Use of mobile phones and emails helps channel members to communicate in fast
manner on issues regarding distribution of products.
2.Helps in monitoring and branding movement of goods.
3.Use of EDI among channel members helps them to always to be in touch to each other.
4.Marketing may also be carried out by channel members through internet.
5.Use of computerized system in storage helps channel members to store their goods in
modern way which is more effective.
6.Use of electronic payments among channel members helps to pick transaction and is
also cheap compared to traditional methods e.g. ATMS,MPESA etc.
7.Use of modern ways of ordering goods e.g. making online orders and use of emails
assists in saving costs and continuity in production processes.
8.Use of e-sourcing in locating suppliers.
INTENSITIES OF DISTRIBUTION.
1. I) Intensive Distribution
This is the strategy whereby a product is distributed by as many outlets as possible. This
is used for products, which the consumer requires a great deal of location convenience
e.g cigarettes, Newspapers milk, bread, Scratch cards,soft drinks etc.
Manufacturers select only a few distributors for a new product and is especially. For
speciality and shopping goods e.g. Appliance like fridge, cookers.
III) Exclusive distributionThis is getting into an agreement with a particular middle man
where the manufacturer gives exclusive rights to the marketer to distribute the
product.This severely limits the numbers of intermediate or channel members. Used
when the producer wants to maintain the control of the service levels. Also here, the
middleman in return agrees not to carry any merchandise of the competition e.g. Bata,
Simba Telecom (Safaricom Dealer),Marshall,-exclusive distributor of electronics and DT
Dobie for Mercedes.
The rational behind this strategy is that the specialization in one line may greatly increase
sales and profits particularly the premium price obtained through exclusive distribution
Certain service level is maintained.
Control by the manufacturer
Standardized price
Disadvantages
1. a) Requires greater partnership between the seller and re –sellers e.g. Bamburi.
2. b) Training of channel members thus costly.
LOGISTIC MANAGEMENT FUNCTIONS.
This are activities that support the physical distribution of goods and they include;
TOPIC EIGHT
ELEMENTS OF PROMOTION.
1.ADVERTISING.
2.Pervasiveness-this permits the seller to repeat the message to many times.it allows the
buyer to receive and compare the messages of various competitors.it also indicates the
sellers size,power and success.
4.Impersonality-the audience does not feel obliged to pay attention or respond to the
advertisement .it is usually a monologue infront of the audience ie a one way
communication.
IMPORTANCE /VALUE OF ADVERTISING/PROMOTION.
Used to inform consumers about a new product or an existing product by mentioning the
features of the product.
Used to persuade consumers to purchase a particular brand where such a brand is
believed to be offering quality for the value of money spent by the consumer.
Used in comparing one brand directly or indirectly to another or to existing competitors
brands available in the market.
Used to remind consumers that they need to purchase the product.
Indicate new uses of an existing product.
Give information of price changes, special offers etc.
Build brand recognition.
Increase market share and demand.
Increase the number of retail outlets.
Build overall company image.
Reach new segment/areas.
Develop overseas markets
Advantages
The combination of visual and audio effects and dramatization makes it very effective.
Advertisements can be aired at the most appropriate time when the targeted audience is
most likely to be reached.
Disadvantages
Television sets are generally expensive and out of reach for many Kenyans.
It is a costly medium to use.
Viewing is limited to areas with electricity or people who can afford batteries.
The advertisements may not appeal to all the viewers due to age,gender or cultural bias.
Coverage is not so large compared to other means .
Advantages
Disadvantages.
Newspapers which have a national circulation are not effectivein targeting specific
Illiterate consumers may not be reached.
Newspapers have a short life span for each edition e.g. it is very unlikely for people to
read past newspapers
Advantages.
They are attractive.they therefore catch the attention of prospective customers easily.
They have a fairly long span.
Some are modified to rotate in order to accommodate more than one advertisement.
Many people can view them at one time.
Disadvantages.
Interferes with the environment (space) by being unsightly and causing unnecessary
obstruction of general view.
Posters
Advantages.
Permission may be required to put them up.most of areas have posters warnings.
They have a very short life as they hardly last for more than a few days due to some
harsh weather conditions.
Advantages.
Many people own radios hence radio advertisement have a very wide reach.
Radios are used by a large number of people meaning the reach of the advertisement
will be multiplied.
Radio advertisements can be made entertaining thus hold the attention of the intended
audience.
The advertisements can be broadcast in many local languages to increase the resch
even further.
If a catchy,familiar tune is used with the advertisement,the listeners tend to internalize it.
Disadvantages.
Poor timing may lead to the advertisements being missed by the desired target group.
It is expensive especially so when they are aired at prime time and if they are lengthy.
Exhbitions
Videos
Slide
Transport(vehicles).
Ad post-notice boards along major streets
Ad shells-shelter places with roofing;waiting bays for vehicles.
Bronchures-small booklets containing pictures and information about a product or a
service.
Cinema-used to transmit visual and sound messages about products before the start of a
show,at the interval ,and at the end of the show.it is done at cinema theatres and at
mobile cinema shows which are common in rural areas.
Neon signs
FACTORS/CRITERIA TO CONSIDER IN SELECTING THE MOST APPROPRIATE
MEDIA FOR ADVERTISING.
An organization needs to budget in order to ensure that its expenditure does not exceed
its planned income.
2.SALES PROMOTION.
This comprises of short term incentives designed to increase the purchasing behavior of
consumer through a variety of rewards and are meant to increase sales.
To increase sales.
To introduce a new product.
To encourage sellers to re-stock the items or increase their stocks e.g. free refrigerators
to stock soda/water.,brand shelf given to supermarkets free to stock a given product.
Encourage the consumers sales force to put in greater effort ie giving of bonuses and
certificates.
To clear existing stock-this avoids carrying costs as well as sitting on money
To promote unsought products.
To remain competitive in the market
Consumer promotions-this are designed to increase short term sales by inducing final
consumers to try a new product or to increase purchase of an existing product. The effort
of company is directed towards the end user of the product. This technique is also known
as the pull strategy.ie producer-wholesaler-retailer-consumer.;but the arrow starts from
consumer backwards.The media /techniques used usually includes;
Free samples.
Cash discounts.
After sale services.
Free gifts.
Free demonstrations.
Price deals ie decreasing.
Sweep stakes- this is a method of gambling in which each person pays a small amount of
money and is given the name of a competitor before a race/contest and the person who
has the name of the winner receives all the money.
Rebates-cash refund to buyer for purchasing a product
Coupons(pieces of paper carrying a certain value).
Trade promotions-This includes getting wholesalers and retailer to carry new items or
increase their stocks by giving them certain incentives. This encourages them to
advertise the product and give it more self-space. The effort of organization is directed
towards the traders or intermediaries.it is also called the push This is exhibited by
producer-wholesalers-retailers-consumers. The arrow is a forward one. The
media/techniques used includes;
trade discounts
allowances
commissions
competitions
free demonstrations
credit facilities
free training-technical products/machines
technical support e.g. installations
rebates-cash refund given to resellers on providing proof on sales.
push money-manufactures pay retail people to promote products for them.
trade shows
trade contents
point of purchase display for attention and dealer loaders- This is a premium given to a
reseller to encourage development of special diplay/produced offering.
Sales force promotions-this are incentives given to the sales force to support current or
new products or getting the sales people to sign up new contracts with manufacturers
and suppliers.the media used to target sales force promotions
include;competitors,financial or non financial incentives ie cash rewards,free
training,bonuses and commissions.
Personal selling-this involves face to face interaction with one or more prospective
purchasers for the purpose of making presentations,answering questions and procuring
orders.
CLOSING TECHNIQUES.
2.NEGOTIATION.
Negotiating skills are important in order to reach an agreement on price and other terms
of sale.a sales person should win the order without hurting the profits of the company.
3.RELATIONSHIP MARKETING.
This involves building a long-term supplier customer relationship inorder to ensure repeat
business.it is based on the promise that ,important customers need focused and
continuous attention e.g. calling them,visiting them,taking them to dinner or lunch,making
useful suggestions about their business etc.eg equity bank offers calendars,pens
success cards etc.
4.PUBLIC RELATIONS/PUBLICITY.
Publications-this is published material used to reach and influence the target market e.g.
annual reports,articles , company newsletters,audio visual materials etc.
Events-this are special events such as
conferences,seminars,outings,anniversaries,sports ,cultural sponsorships that are used
to reach the target market.
5.DIRECT MARKETING.
This are direct communications with carefully targeted individual consumers to obtain an
immediate response and cultivate lasting customer relationships.the new direct marketing
models include:advances in direct marketing include emergence of catalog
companies,direct mailers and telemarketers.
BENEFITS TO BUYERS;
Easier to know the current models in the market as per ones needs
Convenient
There are numerous internet and online benefits which one enjoys ranging from,
Reduce costs and increased speed and efficiency.
Avoids expenses of rent,insurance utilities(owning a store).
Improve efficiency of channel and logistic functions.
Costs less than communicating on paper through the mail
Greater flexibility is enhanced in terms of production quotas and the needs of customers.
It is usually a global medium-ie across all nations.
Database marketing-this is the process of building and maintaining customers data for
the purpose of contacting and transacting with the customers.it is commonly used in
B2B and service retailing(hotels,banks and airlines). It makes use of a customers mailing
list – a set of names,addresses,telephone numbers etc and customer database-contains
much more information e.g. past purchases,personal information,family information etc.
CUSTOMER CARE.
This refers to activity of looking after customers and helping them with complaints and
problems. It involves provision of service before and after purchase. Customer care is
also a third party provider that takes customers calls,answers their questions,address
their concerns,and solves their problems etc, and submits detailed reports on such
activities to the principal(client).
It involves putting systems in place to maximize your customer’s satisfaction with your
business.
Expand your definition of services-how you define services shapes every interaction you
have with your customers services should provide customers with satisfaction in essence
the customers should walk away pleased at the result of transaction and not just content
but actually happy.a happy customer will continue to be a buying customer and a
returning customer.
Who are your customers-customers,buyers and clients want to pay a fair price for quality
service or product and feel satisfied they have paid for services or product and receive
what they have paid for in return.it is important to listen to customers and do
research,their habit and what they want and expect.
1. Business contacts
2. Local business reference libraries.
3. Your local authority;business link/chamber of commerce.
4. Internet.
5. Uk trade for information on export markets.
6. Forex ie N.S.E.
Professionals who constantly deal with customers inside or outside the company need to
strive for certain qualities to help them answer customer needs.the professional qualities
to be emphasized always relates to customer wants.
The purpose is to create and maintain a welcoming environment and we can achieve this
by;
There will always be customers who complain after completing the sale. Like customer
objections,don’t view complains negatively.rather they are often a very good way to;
1. To create customer loyalty-after offering good customer care for them in terms of
advertising, their problems and complains in proper manner; customer loyalty is created.
2. Addressing customer’s complaints.
3. Solving problems of customers.
4. To enhance sales performances in that good customer care is likely to attract a large
customer base hence improving sale performance.
5. It is used as a marketing tool.
6. Creates a good corporate image of the firm.
7. To receive customers.
8. To handle customers complaints
9. Handle difficult customers.
TOPIC 10
SERVICE MARKETING.
Service refers to any act/performance that one party offers to another that is essentially
intangible and does not result in the ownership of anything.
SERVICE CONCEPT.
This is based on the idea that actual service offering can be broken down into a number
of levels relating to customer need satisfaction,benefits and features. Three levels can be
identified.
1. Core benefit service-This relates specifically to the customers needs. The core benefit
satisfies the need or solves the problem.
2. Expected service-this relates to customers’ expectations of what kinds of services are
available to satisfy their need. The expected service reflects standards required or
expected by customers to satisfy their needs.eg in a bank one expects that polite
language is used,professional knowledge is applied by the staff etc.
3. Augmented service-this means making the service better in some way and it is the
means by which service providers differentiate their offering in an attempt to influence
customer choice. Extra features over and above the expected service can be added to
make the service more attractive to prospective customers. Innovation is the key to make
a service stand out from the competition.eg in the banking sector,we have the corporate
section where we have corporate customers who are usually served differently according
to class.
Service-this involves superior quality,a well known and trusted brand image,unique
features and extended guarantees.
Price-involves added value,special discounts and preferential credit terms(free for a new
customer brought).
New brands-(new brand,new service category) may be appropriate if none of the existing
brands is appropriate for a new service entering new market.
Mega brand strategies-this focuses on marketing dollars only in brand that can achieve
number one or number two market share in their categories.
TOPIC 11
Some trends and issues require more resources in order to meet the new trends and
issues e.g. more funding.
Government policy which might really affect the new trend/issue.