Chapter 6

6 Marketing
Marketing
Caribbean Business
Chapter Six
Caribbean Business for CSEC® Principles of Business © OUP 2010

6 Marketing
Marketing
6.1 Markets and marketing 6.8 Intellectual property
6.2 Market activities, 6.9 Promotion
marketing mix 6.10 Pricing
6.3 Consumer behaviour 6.11 Market structure
6.4 Market research 6.12 Placing, distribution and
6.5 Product retailing
6.6 Packaging 6.13 Consumer rights
6.7 Branding 6.14 Transport

6 Marketing
6.1 Markets and

marketing
Caribbean Business
Chapter Six
Marketing

6 Marketing
Markets and marketing

Market can mean
1 The demand for a particular product or service, often measured by sales during a
specified period. (Oxford DBM)
2 A place or institution in which buyers and sellers of a good or asset meet. A
market was originally a physical location and still is for some goods, for example
cattle or fish markets, and some services … In other cases the market is a network
of dealers linked by telephone and computer …(Oxford DE)
3 An arena in which buyers and sellers exchange goods and services, usually for
money. It does not have to have a physical location. (Oxford DBM)
4 Marketing: The process of getting customers to buy a firm’s products. This involves
making arrangements for distribution and advertising current products. It also
covers market research to discover likely customer reaction to potential new
products, and whether possible modifications to existing products would improve
their appeal. (Oxford DE)

6 Marketing
Local, national and world markets

● A supermarket serves the
local market in its
neighbourhood and
surrounding districts.
● A daily newspaper is sold on
the national market.
● Alumina is exported to the
world market.
Which other businesses sell to:
● The local or neighbourhood
market?
● The national market?
● The world market?

6 Marketing
6.2 Market activities,

marketing mix
Caribbean Business
Chapter Six
Marketing

6 Marketing
The marketing mix

● Product – the right product for the market
● Promotion – advertising, public relations, displays etc.
● Price – high enough for profit, low enough to stimulate demand
● Place – where and how the product is sold

6 Marketing
Product, place, price, promotion

Which of these are shown here?

6 Marketing
Marketing activities
● Market research
● Pricing
● Packaging
● Branding
● Sales promotion
● Advertising
● Distribution

6 Marketing
6.3 Consumer behaviour

Caribbean Business
Chapter Six
Marketing

6 Marketing
Consumer decisions
● Save money or spend it?
● Which goods and services to buy?
● Which brand to choose?
● How much to buy – large pack or small?
● When to buy – now or later?

6 Marketing
Consumers are influenced by…

● Income and affordability
● Spending patterns – what comes first?
● Price
● Price of substitutes. Rice or flour?
● Quality
● Taste and preference (not just for foods)
● Tradition
● Brand loyalty

6 Marketing
Market segments
Many products are aimed at a well-defined market segment or
niche. This may be:
● High, middle or low-income consumers.
● An age group, such as children aged 10-14.
● People with a particular interest, such as cars, music or sports.
A market segment is sometimes called a demographic group, from

the Greek word ‘demos’, meaning ‘people’.

6 Marketing
What is a likely target market for…

● Luxury cars?
● Computer games?
● Scuba-diving equipment?
● Air travel to New York?
● A daily newspaper?
● A new multiplex cinema?
● Flour?

6 Marketing
What influences her choice?

6 Marketing
Discussion points
● Are consumer incomes rising or falling?
● What are your spending priorities now?
● What will they be in ten years’ time?
● Have you ever stopped buying a product because of a price
increase?
What indicates high quality for…

● Cars?
● Non-alcoholic drinks?

6 Marketing
6.4 Market research

Caribbean Business
Chapter Six
Marketing

6 Marketing
Why market research?

Market research helps answer these questions
● How big is the market?
● What are your main competitors?
● Do the consumers like your product?
● What are its strong and weak points?
● What price should you charge?
● How should you advertise your product?

6 Marketing
Market research may use…
Primary data Secondary data

● Your own company’s sales ● Published census and
data economic reports
● Direct observation of ● Information about
customers in a supermarket competing companies, their
or shopping mall products and marketing
● Qualitative analysis with ● Secondary data may be
focus groups used for information
● Quantitative analysis with analysis
sample surveys

6 Marketing
Information analysis
Information about retail sales in Trinidad
and Tobago is collected by the Central
Statistical Office, and published by the
Central Bank.
● What happened to retail sales in
December each year?
● What was the overall trend from
2006 to 2008?
● What happened to consumer
demand in 2009?
How could this information be used by:

● A supermarket?
● An entrepreneur planning a new
store selling consumer electronics?

6 Marketing
Qualitative research
● Assesses emotive or ‘soft’ aspects of consumer decisions.
● Often uses a focus group of up to ten people, meeting for an
hour or more.

6 Marketing
Quantitative research
● Measures behaviour and attitudes.
● Often uses questionnaire surveys.
● People interviewed are a sample of the target market or
demographic group.
● Many surveys aim at 500 interviews.
● Interviews are followed by editing, data entry and analysis.
● The client is given a clear and lively report.

6 Marketing
What market segment does the interviewee

represent?

6 Marketing
6.5 Product
Caribbean Business
Chapter Six
Marketing

6 Marketing
Find the right focus
Product focus Consumer focus

● The product is fixed. ● Starts with consumer needs
● A marketing strategy is and preferences.
needed to sell it. ● The product is developed
● Local distributors need and adjusted to satisfy
product focus when selling consumers.
imported goods designed ● Local manufacturers and
for the world market. service industries may use
consumer focus to develop
products.

6 Marketing
Marketing strategies are needed for…

● Capital goods and services, sold to other businesses.
● Consumer durables, such as cars, computers and refrigerators.
● Consumer non-durables, such as foods and drinks.
● Consumer services, such as air travel, hotels and entertainment.

6 Marketing
The product life cycle

● Pre-launch
● Launch
● Introduction
● Growth
● Break-even
● Maturity
● Decline
● Re-launch or Death

6 Marketing
What is the life-cycle stage for these

products?
● DVD players ● Video downloads
● Candles ● Ice cream
● Incandescent light bulbs ● 4G cellular telephones
● Energy-saving bulbs ● 3D television
● Kerosene lamps ● LCD screen television
● Video cassette recorder ● Cathode tube television
● Newspapers ● Facebook
● Kinect for Xbox ● Air travel

6 Marketing
6.6 Packaging
Caribbean Business
Chapter Six
Marketing

6 Marketing
Packaging provides…
Protection Design
● Keeps goods fresh ● Attractive to the buyer
● Protects from damage ● Displays the brand name
Convenience Information
● Easy to store and display ● There may be legal
for sale requirements
● Easy to take home and use

6 Marketing
Packaging information may include…

Brand name
Product description
Bar code
Total contents, weight or volume
Ingredients and health information
Storage instructions
Safety precautions
Directions for safe disposal

6 Marketing
Label House
A packaging company
• Why is packaging an important
industry?
• How do exports benefit the
economy?
• What are business-to-business
sales?
• What is a one-stop shop?
• How has Label House used new
technology?
• How has mechanization and
automation affected:
• Productivity?
• Staff skills?
• Staff earnings?
• Customer?

6 Marketing
Recycling can provide a business

opportunity
● What problems are caused
by improper disposal of
packaging?
● Which company recycles
glass?
● How have Paul Bynoe and
B’s Recycling developed a
business from waste
disposal?

6 Marketing
6.7 Branding
Caribbean Business
Chapter Six
Marketing

6 Marketing
Branding
Brand: A trade name used to identify a specific product,
manufacturer or distributor. … Manufacturers believe that if they
invest in the quality of their brands, they will build up a brand image,
to which consumers will respond by asking for their goods by their
brand names, and by being willing to pay a premium for them. …
(Oxford DBM)
Brand loyalty: Support by consumers for a particular brand or

product. Brand loyalty is usually the result of continued satisfaction
with a product or its price and is reinforced by effective and heavy
advertising. … (Oxford DBM)

6 Marketing
Branding
Advantages Disadvantages
For the consumer ● Reliable product quality ● Brand loyalty may
discourage consumers
from trying new products.
● Consumers may pay a
high price for branded
products.
For the business ● Brand loyalty helps hold ● Establishing a brand

and retain a market. requires major marketing
● The business should costs.
maintain a good ● A bad product can cause
standard to protect its brand damage.
brand.

6 Marketing
Abovegroup
A web design and branding agency
● What is meant by the phrase
‘challenger brands’?
● What are the links between art,
business and technology?
● What is meant by the phrase
‘form and function go together’?
● Besides a name, what is needed
to create a successful brand?
● What approach should a
creative business take to
financial management?

6 Marketing
6.8 Intellectual property

Caribbean Business
Chapter Six
Marketing

6 Marketing
Forms of intellectual property

● Copyright – books, music and creative works
● Patents – inventions and innovations
● Trademarks – distinctive brand symbols
● Service marks – brand symbols for services
● Geographic indications – from a particular place
● Industrial designs – for products or packaging
● Trade secrets – such as secret recipes
● Plant varieties – such as new types of orchid
● Integrated circuits

6 Marketing
Organizations and agreements

● TRIPS agreement – Trade Related aspects of Intellectual
Property Rights
● Barbados, Belize, Trinidad and Tobago were TRIPS compliant by
2009.
● World Intellectual Property Organization is a UN agency based in
Geneva, Switzerland.
● In most countries, a government agency protects intellectual
property rights.

6 Marketing
Discussion points
● Should pharmaceutical companies have an exclusive right to new
medicines?
● Should you be allowed to download music and movies from the
internet, and share them with your friends?

6 Marketing
6.9 Promotion
Caribbean Business
Chapter Six
Marketing

6 Marketing
Sales promotion
Sales promotion: An activity designed to boost the sales of a
product or service. It may include an advertising campaign,
increased public relations activity, a free sample campaign, offering
free gifts or trading stamps, arranging demonstrations of exhibitions,
setting up competitions with attractive prizes, temporary price
reductions, door-to-door calling, telephone selling, personal letters
etc. (Oxford DBM)

6 Marketing
Above and below the line
Above-the-line Below-the-line
Advertising through Promotion at point of sale
● Television through
● Radio ● Correct placing within store
● Billboards ● Displays
● Newspapers ● Special offers
● Other print media ● Give-aways
● Internet and new media

6 Marketing
Advertising
Promotes brand awareness and image
May be:
● Informative – gives factual information
● Persuasive – conveys a favourable impression
● Competitive – “Come to Sandy Cove hotel”
● Collective or generic – “Visit the Caribbean”

6 Marketing
The advertising industry

Clients
Advertising agencies
● Account service department
● Creative department
● Media department
Media (television, print, new media etc)
Advertising should be truthful, accurate and maintain ethical

standards.

6 Marketing
Motor vehicle sales

● Mainly product focus
● Each brand aims at a target market
● Manufacturers provide marketing guidelines
● Dealers and advertising agencies develop a concept for the local
market
● Most sales are in the mid-market segment
● After-sales customer service is important

6 Marketing
Below the line promotion

● The marketing department works closely with retailers and other
sales outlets.
● Merchandisers place products on shelves.
● Correct placing within the store is important.
● Special promotions include:
● Two-for-one
● Banded offers
● Loss leaders

6 Marketing
Other marketing activities…

● Direct sales to customers – for example with life assurance
● After-sales service – maintains customer loyalty and encourages
repeat business
● Corporate customer relations – when the focus is on a few
large business customers

6 Marketing
Public relations
● Presents the activities of a business in a favourable light.
● Often handled by corporate communications department.
● Tries to reach all stakeholders, including customers, employees,
shareholders, the government and the wider community.

6 Marketing
Public relations activities

● Events sponsorship
● Social programmes
● Media relations

6 Marketing
Public relations is important for…

● Major companies
● Government ministries and public sector organizations
● Charities and voluntary organizations
● Umbrella organizations, such as chambers of commerce
● Trade unions

6 Marketing
6.10 Pricing
Caribbean Business
Chapter Six
Marketing

6 Marketing
Demand, supply and the market price

Pricing: The setting of selling prices for products and services …
(Oxford DBM)
Demand: The desire and ability to acquire a good or service. The

quantity of a good or service that economic agents are willing to buy
at a given price. (Oxford DE)
Supply: The amount of a good or service offered for sale… (Oxford

DE)
Equilibrium price: A price at which the quantity of a good supplied

is equal to the quantity demanded… (Oxford DE)

6 Marketing
The equilibrium price (1)

6 Marketing
The equilibrium price (2)

6 Marketing
Changes in supply
Supply may increase, for example if…
● New technology reduces costs
● Weather increases agricultural output
● Lower input prices reduce costs.
When supply increases…

● The equilibrium price falls
● More goods are sold at a lower price.

6 Marketing
Changes in demand
Demand may increase, for example if…
● Consumer incomes are higher
● A product comes into fashion
● The price of substitutes increases.
When demand increases…

● The equilibrium price rises
● More goods are sold at a higher price.

6 Marketing
Pricing strategies
● Cost-plus – a percentage ‘mark-up’
● Price skimming – high price for a new product
● Promotional pricing – low initial price to attract business
● Predatory pricing – to drive competitors out of business
● Differential pricing – for each market segment
● Branding – higher price for a premium brand
● Dumping – pricing below cost in export markets

6 Marketing
Terms of sale
● Cash – immediate payment by any method
● Credit – often 30, 90 or 180 days for business-to-business
● Cash discounts – lower price for cash sales
● Trade discounts – for business customers
● Other discounts – for staff, or for bulk orders
● Hire purchase – payment by installments.

6 Marketing
6.11 Market structure

Caribbean Business
Chapter Six
Marketing

6 Marketing
Perfect competition
● Many buyers and sellers.
● No barriers to entry of new buyers and sellers.
● No player can influence the market price.
● Goods are identical in type and quality.
● Demand and supply set the equilibrium price.
● Everyone knows the trading price.

6 Marketing
Perfect competition?

6 Marketing
Monopoly
● Only one seller
● No competition
● Barriers prevent entry of new sellers
● Seller can charge a high price
● No incentive to improve service
● No need to invest in new technology
● Regulators may attempt to protect consumers

6 Marketing
Monopolistic competition
● Many competing businesses
● Each tries to differentiate its product
● Branding and advertising used for product differentiation and
identity
● A premium brand can set a higher price

6 Marketing
Brands promote a distinct identity

6 Marketing
Oligopoly
● A few businesses supply the market
● Each promotes a distinctive brand
● Brands aim at individual market segments
● High spending on advertising and promotion
● Competition in product quality and customer service
● Companies try to introduce new technology

6 Marketing
6.12 Placing, distribution

and retailing
Caribbean Business
Chapter Six
Marketing

6 Marketing
The chain of distribution

6 Marketing
The chain of distribution

6 Marketing
Retailing may be through…

● Supermarkets
● Specialist stores
● Shopping malls
● Small shops
● Department stores
● E-commerce
● Telemarketing
● Mail order
● Vending machines

6 Marketing
Distributors…
● Represent international companies on the local market
● Import goods and store in a warehouse
● Work with advertising agencies to promote the product
● Transport goods to retailers
● Employ merchandisers to place goods in supermarkets and other
outlets.

6 Marketing
AMCO’s warehouse and head office

Why is this a good location for a distributor?

6 Marketing
6.13 Consumer rights

Caribbean Business
Chapter Six
Marketing

6 Marketing
Consumer protection
● ‘Caveat emptor’ means ‘let the buyer beware’.
● The 1895 Sale of Goods Act gave rights to consumers.
● Caribbean countries have updated consumer protection laws.
● Government bodies such as Barbados Fair Trading Commission
protect consumer rights.

6 Marketing
Barbados Fair Trading Commission

● Promotes public awareness.
● Investigates consumer complaints.
● Monitors promotional material.
● Promotes competition and consumer choice.
● Investigates anti-competitive practices.
● Regulates telecommunications and electricity supply companies.

6 Marketing
Consumer protection agencies in Trinidad

and Tobago
Agency Responsible for…
Advertising Standards Authority Advertising standards
Regulated Industries Commission Most public utilities
Telecommunications Authority Telecommunications
Bureau of Standards Standards for most goods
Consumer Affairs Division Consumer advice and complaints
Pharmacy Board Quality of pharmaceuticals
Ombudsman Complaints about the public service

6 Marketing
Regulations on…
Food and drug standards Price controls

● Food products must be ● Prices charged by electricity
clearly labelled. companies and many
● Weights and measures utilities are regulated.
must be accurate. ● There is price control for
● Pharmaceuticals must be gasoline in Barbados,
officially approved. Trinidad and Tobago and
● People handling food must some other countries.
have certificate.
● Price controls were
● Many countries have rules
on pesticide residues. common in the 1970s.

6 Marketing
Hire purchase
● Supplier retains ownership ● Hirer can terminate
until full price is paid. agreement, but must pay for
● Purchaser is known as the any damage.
hirer. ● Owner can repossess
● Hirer must be given a goods if hirer falls behind
written contract. with payments.
● Contract must state ● Until a fixed proportion of
● Cash and hire purchase price is paid, no court order
price is needed for repossession.
● Number of instalments ● Hirer must be given notice
of repossession.

6 Marketing
Rights and responsibilities
Rights Responsibilities
● Right of redress. ● Shop around before you
● Repair, replacement or buy. You cannot demand a
refund for faulty items. refund just because you
● The retailer is responsible change your mind.
for faulty products, not the ● Never sign a contract
manufacturer. without reading it.
● ‘No exchange, no refund’ ● Always keep receipts,
signs are illegal. warranties, estimates,
contracts and instructions.

6 Marketing
6.14 Transport
Caribbean Business
Chapter Six
Marketing

6 Marketing
Transport
Transport is important in: Transport-based businesses
● Domestic trade include:
● Regional trade ● Trucking companies
● Intercontinental trade ● Shipping companies
● Ports
● Airports
● Airlines
● Courier services

6 Marketing
Forms of transport
The main forms of transport Sea transport includes

● Road ● Containers
● Rail ● Break-bulk
● Air ● Bulk transport of
● Pipeline commodities such as sugar
● River transport ● Tankers for liquid cargo
● such as oil or methanol
Sea transport
● Roll-on roll-off for vehicles
● Cruise ships
● Inter-island ferries

6 Marketing
Ports in Jamaica
● Kingston Wharves Limited –
all types of cargo
● Kingston Container
Terminal - containers
● Montego Bay – cruise ships
and cargo
● Ocho Rios – cruise ships
● Rio Bueno – cement,
timber, steel
● Port Kaiser, Port Esquivel,
Rocky Point, Port Rhoades
– bauxite, alumina

6 Marketing
Kingston Wharves shipping terminal

6 Marketing
Problems with transport systems

Problem Possible solutions
Delays: late arrival disrupts business. Invest in roads, ports and airports.
Spoilage: goods damaged in transit. Use adequate packaging, containers.
Insure goods against damage.
Misdirection: goods or passenger baggage Careful management.
at wrong destination. Use of BAPLIE software.
Inadequate warehousing Build new warehouses or relocate port.
Reduce time to clear goods from port.
Lack of security – theft, terrorism, Ship goods in secure containers.
smuggling, guns or narcotics. Security at port and perimeter.
Use X-ray equipment.
Industrial unrest Maintain good labour relations.
Natural hazards – hurricanes, floods, etc. Design facilities to minimise damage.

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6 Marketing

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

6.1 Markets and

Caribbean Business for CSEC® Principles of Business © OUP 2010

Markets and marketing

Caribbean Business for CSEC® Principles of Business © OUP 2010

Local, national and world markets

Caribbean Business for CSEC® Principles of Business © OUP 2010

6.2 Market activities,

Caribbean Business for CSEC® Principles of Business © OUP 2010

The marketing mix

Caribbean Business for CSEC® Principles of Business © OUP 2010

Product, place, price, promotion

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

6.3 Consumer behaviour

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

Consumers are influenced by…

Caribbean Business for CSEC® Principles of Business © OUP 2010

A market segment is sometimes called a demographic group, from

Caribbean Business for CSEC® Principles of Business © OUP 2010

What is a likely target market for…

Caribbean Business for CSEC® Principles of Business © OUP 2010

What influences her choice?

Caribbean Business for CSEC® Principles of Business © OUP 2010

What indicates high quality for…

Caribbean Business for CSEC® Principles of Business © OUP 2010

6.4 Market research

Caribbean Business for CSEC® Principles of Business © OUP 2010

Why market research?

Caribbean Business for CSEC® Principles of Business © OUP 2010

Market research may use…

Primary data Secondary data

Caribbean Business for CSEC® Principles of Business © OUP 2010

How could this information be used by:

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

What market segment does the interviewee

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

Find the right focus

Product focus Consumer focus

Caribbean Business for CSEC® Principles of Business © OUP 2010

Marketing strategies are needed for…

Caribbean Business for CSEC® Principles of Business © OUP 2010

The product life cycle

Caribbean Business for CSEC® Principles of Business © OUP 2010

What is the life-cycle stage for these

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

Packaging information may include…

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

Recycling can provide a business

Caribbean Business for CSEC® Principles of Business © OUP 2010