ROM 3

Nature of Marketing & Marketing

Philosophies

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Nature of Marketing

Marketing management is the process of

planning, organising, leading and control of
pricing, communication and distribution of
products and services to create an exchange
with target groups to satisfy customer
expectations.

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Good marketing is no accident, but is a result
of careful planning and execution.

What is marketed?
Goods, Services, Events, Persons and
Places.

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 NATURE OF MARKETING

NEED

TRANSACTION WANT
• Culture
• Environment

DEMAND
EXCHANGE
OFFER
PRODUCT

Marketing is the process of need satisfaction

within a certain culture and market
environment
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The concept of retail marketing
 The retail marketing concept is the acceptance by the
retailer that it is the “customer” and not “demand” that
lie at the core of the retail organization
 The retail marketing concept is a philosophy, not a
system of retailing or retail structure
 It is founded on the belief that profitable retailing and
satisfactory returns on investment can only be achieved
by identifying, anticipating and satisfying customer
needs and desires.
 It is an attitude of mind that places the customer at the
very centre of retailing activities. 

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Importance of marketing in
retailing 
 Marketing is a vital tool for every retailer, as it identifies current,
unfulfilled needs and wants, which it defines and quantifies.
 Marketing determines which target groups the retailer should serve.
 Marketing could be seen as delivering an acceptable standard of
living.
 Marketing can ensure complete satisfaction and sustained customer
loyalty. 
 Marketing depends on the efficient co-ordination of consumer
prediction, product development, packaging design and influencing
demand through appropriate communication medium
 From these, a suitable mix is achieved.

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Components of the Marketing Mix

Taken from Kotler (1997:92)

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Retail marketing mix
 Retail marketing mix is the term used to describe the
various elements and methods required to formulate and
execute retail marketing strategy.
 Retail managers must determine the optimum mix of
retailing activities and co-ordinate the elements of the
mix. 
 The aim of such coordination is for each store to have a
distinct retail image in consumers’ mind.
 The mix may vary greatly according to the type of market
the retailer is in, and the type of product/services

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Retail Marketing Mix
 While many elements may make up a firm’s retail
marketing mix, the essential elements may
include:
 merchandise assortments
 Store ambience
 customer service,
 Price
 Communication with customers

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Retail Marketing Mix
 Personal selling
 Store image 
 Store design
 Sales incentives
 People
 Process
 Physical evidence

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Strategic Marketing Objectives
All objectives must be S.M.A.R.T.!!!!!
S = Specific
M = Measurable
A = Achievable
R = Realistic
T = Time constraint
Eg. By 1 December 2020 we would like to
increase our market share by 3%.

Business Management 3 - Nature of Marketing 11

Marketing Philosophies
1. Product Concept – Consumers favour
products that offer the most quality,
performance or innovative features.
2. Production Concept – Consumers will
favour products that are widely available
and inexpensive.
3. Selling Concept – The organisation needs
to undertake aggressive selling and
promotion efforts.

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Marketing Philosophies
4. Marketing Concept – The key to achieving
organisational goals consists of the
company being more effective than
competitors in creating, delivering, and
communicating superior customer value to
its target market.
5. Relationship Marketing Concept – The
aim is to build long-term relationships with
key parties – customers, suppliers,
distributors etc. CRM is critical to building
long-term relationships.
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Marketing Mission
 The marketing mission statement should
describe the businesses marketing activities
and those that it would like to achieve.
 Example 1:
To provide innovative computer goods and
services to our customers at a reasonable
price and with the intentions to increase our
sales and gross profit.

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Example 2:

To meet the needs of our target market by

supplying them with the best quality parts
and accessories, so as to meet their
needs and thereby increase our sales and
gross profit.

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Grand Marketing Strategies
Service mix (Concentration / Diversify -
Concentric or Conglomorate)

Operational mix (Independent / Integration /

Joint Venture)

Growth strategy (Maintain / Develop /

Shrink) – Link with BCG / PLC & Product
Market Matrix.

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Grand Marketing Strategies
Market Segments – Similar to market
segmentation section done under “strategic
market analysis”. Select relevant markets to
be targeted.

Generic Strategy (Low cost / Differentiation /

Niche / Customise)

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Product Lifecycle Analysis

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Strategic Marketing Analysis
 Market segmentation – Indicate all possible target
markets of the business i.e. Current and Future
markets.
FACTORS TARGET TARGET TARGET TARGET
1 2 3 4
1 Demographic
 Income
 Age
 Gender
 Culture

2 Psychological
 Social
class

3 Buying
behaviour
 Reasons
for buying
 How many
per buy
 How often
buy

4 Geographical
 Area
 Number of 19
potential
Tactical Marketing Planning
1.1 Market Segmentation – A detailed analysis
of your chosen market segments for the “1
year period”.

1.2 Competition analysis – Identify your

specific direct competitors. What criteria
could be used to measure yourself versus
your competitors? Which areas have been
shown to be lacking?

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Tactical Marketing Planning
1.3 Sales analysis – Conduct an analysis of your
past sales patterns. Have sales been increasing,
decreasing or constant?

1.4 Sales Forecast – Using past sales analysis

(1.03) make predictions / forecasts as to what you
believe would be like this year.

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Tactical Marketing Planning
1.5 Market research – Market research is
required to verify assumptions made and
find out more about the needs of customers.
What types of assumptions should be
verified and where could you obtain this
information?

1.6 Client profile – If you analyse your market

segments selected for this year, would you
require a different marketing strategy for
each segment?

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Tactical Marketing Planning
1.7 Market positioning – Refer back to your
generic marketing strategy. What is the
driving force behind your strategy for this
year eg. To sell highest quality products at
cheapest prices.

1.8 Marketing objectives – Making a decision

about what you would like to achieve in
terms of market share, sales and gross profit
%.

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Tactical Marketing Planning
1.9 Marketing budget policy – How much
will be spent on marketing this year? E.g. 5%
of GP or 10% of Sales.

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Strategic Marketing Leading
Development of marketing personnel
Describe training and development initiatives
for marketing staff. Recruitment of marketing
staff i.e. Internal vs External?

Strategic motivation of marketing

personnel
How will marketing staff be kept motivated?

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Strategic Marketing Control
Strategic Marketing information systems –
Describe how and where you could gain
information about customers, competitors,
sales data etc.

Monitor strategic marketing assumptions

– Discuss which assumptions need to be
monitored and by whom.

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Strategic Marketing Control
Progress reports on strategic marketing
results –
E.g. reports on GP, Sales etc.

Control on strategic marketing direction -

How often will reviews take place and what
will be reviewed?

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THANK YOU

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