CBS 102

FOUNDATIONS OF
BUSINESS ORGANISATION
LECTURE 8

MARKETING
Marketing defined:

A social and management process by which

individuals and groups obtain what they need and
want though creating, offering, and exchanging
products of value with others.
 What is marketing?

• Marketing is a management process

Requires planning & analysis, resource allocation,
control, implementation, monitoring & evaluation

• Marketing is about giving customers what they

want
If customers requirements’ are not satisfactorily
fulfilled, then marketing has failed
• Marketing identifies and anticipates
customer requirements
Marketer creates some sort of offering only after
researching the market and pinpointing exactly what
the customer will want

• Marketing fulfills customer requirements

profitably
Marketer has to work within the resource capabilities
of the organization, the agreed budgets and
performance targets set for the marketing function.
•Marketing offers and exchange ideas,
goods, and services.
Marketing as an exchange process
Basic idea - I’ve got something you want, you’ve got
something I want
Both parties value what the other has to offer. (mutual

value)
Marketing History and Business
Orientations

Production

Product

Selling

Marketing
Ethical and Sustainable
Marketing
Production orientation

•The idea that consumers will favor those products

that are widely available and highly affordable.

• Managers of production-oriented organisations

concentrate on achieving high production efficiency
and wide distribution.
Product orientation

•The idea that consumers will favor those products

that offer the most quality, performance, and features.

•Managers in these product-oriented organisations

focus their energy on making superior products and
improving them over time.

• Organization should therefore devote its energy to

making continuous product improvements.
Selling orientation
•The idea that consumers will not buy enough of the
firm’s products unless it undertakes a large scale
selling and promotion effort

•Organisation’s aim is to sell what they make rather

than make what the market wants.

• selling what’s produced

• aggressive selling and promotion effort

Marketing orientation

•The idea that achieving organizational goals depends

on knowing the needs and wants of the target markets
and delivering the desired satisfactions better than
competitors do

• defining needs in advance of production

• profit through customer satisfaction and loyalty

Ethical and sustainable marketing
The idea that a company should make good marketing
decisions by considering consumers’ wants, the
company’s requirements, and society’s long-run
interests
• serve the needs of the buyer with due respect for the
welfare of society and the environment
• define needs and designing and producing products
to minimise harm / damage
Developing a marketing strategy
Selecting a target market
Market – consists of people with purchasing power,
willingness to buy, and authority to make purchase
decisions.
Target market - The group of potential customers
toward whom it directs its marketing efforts.
•No single organisation has the resources to satisfy
everyone.
•Eg: Foot Locker is a chain of stores specializing in
the needs of active people looking for shoes and
other sports wear
Developing a Marketing Mix
Marketing Mix – blending the 4 elements of
marketing strategy – product, price, place and
promotion – to satisfy chosen customer segments.

Marketing success depends, not on the four

individual strategies, but on their unique
combination.

Product, Price, Place and Promotion – the 4Ps of

Marketing
1)PRODUCT
 Product Strategy involves more than just
designing a good or service with needed
attributes

 Also includes decisions about package design,

brand name, trademarks, warranty, product
image, new product development, and customer
service.
2) PRICE
 Price Strategy deals with the methods of setting
profitable and justifiable prices.

 Subject to government regulations

 Research shows that consumer perceptions of

product quality relate closely to price.

 High price correlates to high perceived quality.

3) PLACE

Place strategy ensures that customers receive their

purchases in the proper quantities at the right times
and locations.

Focus on the various modes of transportation and

the roles retailers and wholesalers play in
distribution channels
4) PROMOTION

Promotion strategy involves informing,

persuading, and influencing purchase decisions.

Many aspects of promotion, including personal

selling, advertising, sales promotion, and public
relations.
MARKET SEGMENTATION
The process of dividing a total market into several
relatively homogeneous groups
4 common bases for segmenting consumer
markets:
Geographic segmentation
Demographic segmentation
Psychographic segmentation
Product related segmentation

3 common bases for segmenting business to

business markets:
Customer- based segmentation
End – use segmentation
Geographic segmentation
 Consumer Markets

1) Geographic segmentation
Defines customers according to their location

Useful when consumer preferences and purchase

patterns for a good or service differ between region
Population size helps define target markets as
urban, suburban and rural markets.
Eg: Useful for service-based products that require
the customer to come to you. Example, hairdressers
attract business from a geographic catchment area.
 2) Demographic segmentation

Common measures include age, income,

occupation, household size, education, religion,
ethnic group, and gender.
 3) Psychographic segmentation
• Value and lifestyles, beliefs, attitudes,
personality, self image, behaviours, social class
and opinions of the potential customer.

• Eg: marketers promote their natural fiber

products as ideal for a natural, healthy, active
life.
 4) Product related segmentation
Marketers can divide a consumer market into
groups based on buyers’ relationships to good or
service.
3 most popular approaches:
Benefit sought – focuses on the attributes that
people seek in a good or service and the benefits
they expect to receive
Usage rates – heavy users, medium users, and
light users.
Brand loyalty levels – the degree to which
consumers recognize, prefer, and insist on a
particular brand.
 Business to Business Markets

1) Customer- based segmentation

Acknowledges that the same product can be

used in many different ways

This approach looks for customer groupings.

Example: Glass has many industrial uses, ranging

from packaging to architecture to the motor
industry. Each of these application sectors behaves
differently in terms of price sensitivity, quality and
performance requirements.
2) Usage rate

The quantity of product purchased can be used to

categorize potential customers.

A purchasing organisation defined as a “heavy user”

will have different needs from a “light user”, perhaps
demanding different treatment in terms of special
delivery or prices.
3) Geographic segmentation

According to the geographic concentration of

the industries

Especially organisation on international scale.

Customers needs and languages may require
differences in the marketing mix from one location
to another.