CHAPTER ONE

NATURE OF MARKETING

Learning Objectives.

After completing this chapter you should be able to: -

1) Define Marketing and explain what it is all about.

2) Distinguish between marketing and selling.

3) Explain in simple terms what marketing entails

INTRODUCTION

Marketing is a comparatively modern concept, which until its adoption there was only
selling. In simple terms, it means marketing, which is the assessing and identifying of needs
and wants of potential customers and then satisfying them, did not exist. Only selling existed
i.e. the producing and selling of goods and services without first identifying and assessing
what consumers want.

Modern business have realised that in this competitive world, real success can only be
achieved by adopting “the customer is king’ attitude. This is the underlying premise upon
which the marketing discipline rests. Marketing requires managers to orientate all company
efforts, planning, policies and operations towards the customer. The aim of Marketing is ‘to
know and understand the customer so well, that the product or service fits the customer and
sells itself’ - P. Drucker. With marketing, a firm produces what it can sell, rather than sell
what it can make. In marketing, business is conducted from the customer’s perspective and
not that of the organisation. The customer is therefore the focal point for all business
activities.

Marketing can therefore be regarded as a key discipline for all who wish to operate
successfully in business. In recent years the significance of the marketing concept has
become even more pronounced, with a far wider range of organisations (profit making and
non-profit making) accepting it as an approach to achieving their objectives.

Definition of Marketing

Many authorities and authors have given many definitions. The Chartered Institute of
Marketing (CIM) and Phillip Kotler definitions will be used here.

1. The Chartered Institute of Marketing Definition

 The Chartered Institute of Marketing (CIM) defines Marketing as a “management
process responsible for identifying, anticipating and satisfying customer requirements
profitably”. To understand this definition fully, we need to look at it in more detail.

(a) Marketing as a Management Process

Management is the process of planning, organising, leading and controlling business

activities. Marketing activities should therefore be planned, organised and controlled
for success to be achieved. Marketing activities like marketing research, product
development, distribution, pricing, promotion, customer services etc should be
planned, organised and controlled for success to be achieved. Management therefore
plays a crucial role if marketing activities are to be successful. Without proper
planning, organising and controlling, marketing activities are doomed for failure.

(b) Identifying, Anticipating and Satisfying Customer Requirements

Marketing research is used to find out what people want or require and anticipate
what those requirements will be in future. Customer requirements are products
customers want to buy, prices they are willing and able to pay for the products, where
they prefer to buy and the media they use and these should be identified to enable the
organisation to formulate marketing programmes that meet the customer
requirements.

Fulfilling customer needs can therefore be achieved if customer requirements are

identified and then met with the proper marketing programmes. When customers are
satisfied they willingly continue to do business with the organisation, recommend the
organisation’s products to other users and will not accept substitute products. More
importantly when customers are satisfied, this is proof that the organisation’s
products, prices, distribution (place) and promotion (marketing mix) are really
addressing the needs and wants of the customers. Simply put, the success of any
company depends on its ability to satisfy the customer. Customer delight is therefore
the route to long term survival.

(c) Profitably

Customer requirements must be met in a way that is profitable to the organisation.

Profits come from long term customers and consumer satisfaction, and should be
achieved for the long-term survival of the organisation. In Zimbabwe, many
companies have closed citing viability problems as they have failed to generate the
desired level of profits.

2. The Phillip Kotler Definition

According to Phillip Kotler, marketing is “a social and managerial process by which

individuals and groups obtain what they need and want through creating and
exchanging products and value with others.”

To understand this definition fully we also need to look at it in detail and analyse the
important elements that make up this definition.
(a) Marketing as a Social Process

Marketing has a social responsibility to enhance the well being of the society. For
marketers to stay in business they should demonstrate social responsibility by
developing products and technologies according to sound environmental principles.
Graham Palmer, Managing Editor of the South African Journal of Marketing and
Sales wrote “People are selecting products more on how safe or environmentally
friendly such products are and less on factors such as price and cost. People are
showing that they will support a product if its producers provide evidence of their
social responsibility in manufacturing it”. An organisation should therefore do
business in a way that ensures that requirements and concerns of the society at large
are taken on board. An organisation should produce products in such a way that there
are no harmful effects to the society and the environment.

(b) Needs and Wants

We can and must distinguish needs from wants.

(i) Needs

A need is a primary and basic requirement, which is a state of felt deprivation

of some basic satisfaction. Needs direct consumers towards certain behaviour.
Examples of needs are food, shelter, clothing etc. Marketers should be able to
identify these in order to meet the needs of their target markets.

(ii) Wants

A want is a secondary requirement, which is a desire for specific satisfaction

of a deeper need. We all need clothing but the way we satisfy this need is
influenced by individual circumstances. In simple terms wants are shaped by
our socio-economic and cultural backgrounds. Marketers should define and
analyse wants from the consumers point of view e.g. the need for clothing can
be satisfied by wants such as T-Shirts, body top, shirt, etc.

(c) Exchange

Marketing has exchange as its central pillar. Exchange is the act of obtaining a
desired object by offering something in return. Without willing exchange there can be
no true marketing and no exchange is possible without actual need being perceived.
Marketing is therefore more concerned with an exchange that will continue over time
as marketers recognise that profits come from long term association and not from a
one-off sale. The importance of long-term customer relationships have prompted
marketers to take Client Relationship Management (C.R.M) and Customer Retention
Strategies (C.R.S). Maintaining and honouring customer relationships is increasingly
being acknowledged as the chief strategic differentiation for the future and this leads
to competitive edges.

(d) Value
 Value refers to the consumer’s estimate of the product’s or service’s ability to satisfy
consumer needs. In simple terms value is the desirability of the offer to the consumer.
Willing exchange takes place when consumers perceive products or services to be of
value to them.

SUMMARY

Every organisation needs marketing because marketing is all about first knowing needs and
wants of the target group and then put in place what meets those needs. Profitable survival of
any organisation, depends largely on how the organisation meet the needs of customers. In
any business, the customer should therefore dictate all operations and activities. Fulfilling
customer requirements is therefore a prerequisite in any organisation.
 CHAPTER TWO
MARKETING MANAGEMENT PHILOSOPHIES

Learning Objectives

After completing this chapter you should be able to:-

1. Explain the Marketing Management Philosophies and how they apply in modern
business.

2. Explain the marketing concept and how it applies to all organizations.

Introduction

Different marketing activities are performed in an organization and this includes advertising,
sales promotion, personal selling, marketing research, customer services, product
development and many more. The degree to which these activities are carried out in an
organisation depends on the philosophy adopted by the organisation. The nature and focus of
the business determines the philosophy or idea to be adopted.

Definition

The marketing management philosophies refer to the ideas that were developed and that are
still being used today to guide organisations and their activities. The marketing management
philosophies also assist us in tracing how marketing developed to be what it is today. The
five philosophies are: -

(a) Production concept/Production Orientation

(b) Product concept/Product Orientation
(c) Selling concept/Sales Orientation
(d) Marketing concept/Customer Orientation
(e) Societal marketing concept/Societal Orientation.

(a) Production concept/Production Orientation

The production concept states that consumers prefer to buy goods and services that
are widely available and lowly priced. Production orientation results in management
focusing on high production efficiency to minimize costs of producing and increasing
wide distribution coverage. It is assumed that consumers buy what is available and not
wait for what exactly they want. This mostly applies where there are shortages
(where demand exceeds supply). In such a situation, consumers buy whatever is
available. However, the assumption that consumers buy goods and services provided
they are available and at affordably low prices may not always work as there are other
consumers who consider other things rather than price and availability.
(b) Product concept/ Product Orientation
 The product concept states that consumers would prefer to buy goods that offer
the best quality, good features and the best performance. Product orientation results in
management improving the product from time to time, in a bid to improve quality,
performance and features. Undue concentration, attention and emphasis is placed on
the product as management believes that it is by providing high quality and high
performance product that they can be successful. However on the contrary a good
product is not a guarantee for success unless it adequately addresses consumer needs.

(c) Selling Concept/Sales Orientation

The selling concept states that consumers can only buy if they are motivated through
incentives. Sales – orientation assumes that if consumers are left alone and not
motivated and induced, they show resistance and may not buy. Sales – orientation
results in management engaging in aggressive marketing and promotional efforts. The
OK Grand Challenge, Lever Brothers, “Knock Knock what have you got!” Sales
promotions are all efforts to motivate and entice consumers into buying more.

(d) Marketing concept/Consumer Orientation

The Marketing concept is a consumer – orientated philosophy that states that success
is achieved by identifying needs and wants of target markets and satisfying them
better than competitors. Such consumer – orientation results in management focusing
on needs and wants of customers and thereby doing business from the consumer’s
perspective. Three main aspects make up the marketing concept namely total
company effort, customer satisfaction and profitability .
Total company effort is a prerequisite to the achievement of company goals. More
Importantly, total customer satisfaction cannot be achieved without the participation
of all other functions and departments. Customer satisfaction is vital for long term
survival of the organisation. It is through satisfying customers that repeat purchases
are obtained. Profitability is also important for continued existence of the
organisation. Consumer – orientation assumes that profits can only be achieved when
customers are satisfied.

(e) Societal Marketing Concept

The societal marketing concept states that success is achieved through identifying
needs and wants of target markets and satisfying them better than competitors in a
way that preserves, enhances or advances the well being of the society. Societal –
orientation results in management placing much importance on the interests of the
society. An organisation should not engage into activities that are dangerous to the
society or the environment.

Summary

The marketing management philosophies are ideas that were developed to guide
organisations in their day to day activities. The five philosophies are the production –
orientation, product orientation, sales orientation, marketing or consumer orientation and the
societal orientation.
Production – orientation is when an organisation produces lowly priced goods and makes
efforts to ensure that they are widely distributed. This is normally used in the case of
shortages or where there is a monopoly. For example, where there is maize – meal shortages
in Zimbabwe, under such a situation consumers would just want maize meal and will not pay
attention to the type, quality or colour of the maize meal. Product orientation is when an
organization focuses on quality, performance and features and is always making
improvements. Imagine the number of times Surf has been improved?

Sales – orientation is when an organisation focuses mainly on putting in place incentives. For
example, competitions are introduced to induce consumers. Marketing concept or consumer
orientation is when emphasis is placed on consumer needs and wants. Customer satisfaction
is therefore central and when customers are satisfied one is guaranteed for success. Societal
orientation or societal marketing concept is when public interest is considered. Business
should be conducted in a socially acceptable way.
 CHAPTER THREE
MARKETING RESEARCH, ANALYSIS AND DECISION

Learning Objectives.

After completing this chapter you should be able to:-

1. Explain the importance of information and the reasons for marketing research.
2. Identify and explain elements of the marketing information system (M.k.I.S)
3. Distinguish between Marketing Research and Market Research.
4. Explain the marketing research process.
5. Distinguish between primary (field) and secondary (Desk) research
6. Explain the difference between quantitative and qualitative data
7. Describe forms of marketing research.
8. Describe Ad-hoc and continuous research and how they assist marketing
management.

INTRODUCTION

Marketing Research is a key to the success of any organisation as it ensures availability of

information to decision-makers. Without marketing research, an organisation is blindly going
about the job of finding its way. Marketing Research should provide an organisation with a
well-lit path for doing business and achieving its marketing objectives.

“Any organisation that ignores marketing research is like a doctor who prescribes treatment
to a patient without undertaking a diagnosis of the patient” wrote one Author. Such a doctor
can not prescribe the correct treatment. Similarly any organisation that prescribes a marketing
mix for any consumers without using marketing research methods and techniques to find out
needs of the consumers cannot be successful.

Marketers must therefore rely on marketing research so as to make informed decisions and
informed choices.

The Need for information

Information is the lifeblood of all organisations. Whatever the nature of business information
is a prerequisite for all marketing decisions areas. The more timely and accurate the
information is, the more effective the decision-making. It is therefore important for marketers
to make effective decisions.

Environmental dynamics have increased the need for accurate and up-to-date marketing
information as marketers require information about potential target markets, customers,
competitors, Intermediaries, STEEPLE factors and any factors that can affect marketing
operations. Without information about the foregoing, decisions are made in the dark and are
based on guesswork.
Definitions

1. Marketing Research is the systematic design, collection, analysis and reporting of data
and findings relevant to a marketing situation facing the organisation (Philip Kotler).

2. Marketing research is the systematic, recording, gathering and analysing of data about
problems relating to the marketing of goods and services. (American Marketing
Association).

Purpose of Marketing Research

The purpose or benefits of Marketing research can be described as follows:-

a) The critical task of Marketing Managers is decision making. For effective decisions
to be made, sufficient information is required. Marketing research therefore aids the
decision-maker by presenting pertinent facts, analysing them and suggesting possible
solutions.

b) Marketing Research is undertaken to understand a marketing problem better. For

example reasons behind a sales decline can be understood better by undertaking
marketing research which will reveal information pertaining to the problem.

c) Marketing Research can help reduce risk by indicating the likely outcome of certain
courses of actions. For example marketing research can reveal the high risk in
International and export markets and thereby enable the organisation to put in place
strategies to reduce risk.

d) Marketing Research helps to identify customer needs. If an organisation adopts the

marketing concept and become customer oriented, there is need to find out more
about the customer needs through marketing research. Marketing research helps
implement the marketing concept.

Marketing Information System (Mk.I.S)

Definition

The marketing information system is defined as a systematic, continuous organisational

structure which consist of people, equipment and procedures and these interact to gather,
process and store data from the organisations external and internal environment and distribute
timely and accurate information to marketing decision-makers.

Components/Elements of a Marketing Information Systems

The Marketing Information System consists of the following elements:-

a) Internal Records
 Internal records information comes from financial statements, sales force report and
manufacturing report. Internal records provide information, which is used to evaluate
marketing performance and to detect problems and opportunities.

b) Marketing Intelligence

This is everyday information about developments in the marketing environment that

helps Managers prepare and adjust marketing plans. Sources of marketing intelligence
include company’s own personnel, suppliers, resellers and customers.

c) Marketing Research

This entails the investigation of all Marketing activities and include:-

a) Market Research – focuses on the market and include:-

i) Analysis of market potential for existing products

ii) Forecasting likely demand for new products
iii) Sales forecasting for all products
iv) Study of market trends i.e. growth or decline of a market.
v) Study of characteristics of the market – in terms of buying and consumption
habits.
vi) Analysis of market shares.

(b) Product Research – Focuses on the product and include:-

i) Customer acceptance of proposed new products.

ii) Comparative studies between competing products.
iii) Studies into packaging and designing.
iv) Forecasting new uses for existing products
v) Test-Marketing to gauge consumer and trade reaction to the new product.
vi) Research into the development of product line or product range.

(c) Price Research

Focuses on price and include:-

i) Analysis of elasticity of demand to determine sensitivity of

quantity demanded to any changes in prices.
ii) Analysis of costs and contribution of profit margins.
iii) Effects of changes in credit policy on demand so as
to determine the appropriate credit policy.
iv) Customer perceptions of price and quality.

(d) Promotional Research/Communications Research

This focuses on promotional aspects and include:-

 i) Analysis of the effectiveness of advertising, sales promotion, Public Relations
and personal selling.
ii) Analysis of the effectiveness of different media, radio, newspapers etc.

(e) Distribution Research

Focuses on distribution and enables marketers to make effective distribution

decisions. It focuses on:-

i) The location and design of distribution centres.

ii) Analysis of the cost of difference methods of transportation and warehousing.
iii) Analysis of advertising requirements for the dealers. Any organisation should
know how to promotionally assist dealers such as retailers and wholesalers.

(f) Marketing research also extends to other areas such as:-

i) Studies of corporate responsibility towards the environment and customers

when research should be conducted to determine the role of the organisation in
the society.
ii) Economic forecasting – in terms of interest rates, inflation, exchange rates etc.
iii) International and export studies – to determine potential of foreign markets.
iv) Long-term business forecasting where predictions are made on what the
organisation can achieve in the long term for example in 5 years time.

The Marketing Research Process

The marketing research process consists of five stages as shown:-

Defining the - Developing - Collecting – Analysing - Presenting
Problem & the Research Data and Data and Findings
Research Plan Information Information
Objectives

STAGE 1

DEFINING THE PROBLEM

An individual marketing project cannot be undertaken successfully until the marketing

problem which management wishes to solve has been clearly and properly defined and
research objectives agreed on. It is important to define the actual problem and not the
symptoms.

A problem well defined will enable collection of the needed information and more
importantly a problem well defined is half-solved. Gathering information about the wrong
problem is a waste if resources.

In defining the problem an organisation prepares a research brief which is presented to the
researcher or research agency.

RESEARCH BRIEF
A Research Brief is a document presented to the researcher and provides the researcher with
information required to carry out the research. The Research brief contains six headings as
follows:-

a) Security

The level of security must be stated. This will ensure that research findings do not go
into wrong hands such as competitors. For example research into new products
development has to be highly secretive. Information about proposed new products
should not go into wrong hands.

b) Objectives

Objectives of any research should be clear and should contain no element of

ambiguity. For example to develop a comprehensive marketing mix for product A is a
clear objective. Such clarity will ensure that a proper job is done.

c) Background

There is need to give background information to enable the researcher to operate

effectively. Background information may relate to the origins of the problem. For
example informing the researcher on any sales and profit trends.

d) Budget

The amount of money that a company can afford for the research project should
be stated. A Research study should be properly funded so as to enable proper
collection of data. Researchers should therefore decide on an adequate budget.

e) Time

A research should have a time budget. This enables the researcher to know the
amount of time they are expected to take in undertaking the research. Timely
presentation of research findings and recommendations is therefore important.

f) Other Factors

This looks at any other information that the researcher requires to effectively carry out
the research. Pertinent information should not be kept away from the researcher.

Constraints on Marketing Research

In undertaking marketing research or commissioning a Research Agency it is important to

understand the marketing Research Constraints known by the acronym CATS.

a) C-Cost Effectiveness

Research requires funding. It is therefore important to justify a research budget

against the benefits the research brings. Benefits of marketing research must outweigh
 the costs. Marketing Research should be undertaken when the expected value of the
information to be provided by the research is greater than its estimated cost.

b) A – Accuracy

Any research must be accurate if it is to be relied upon. Bias and errors must be
minimised if a research is to be reliable. Decisions made should be accurate and
sound hence the need for accurate information.

c) T-Time

Results of any research must be made available for the research to be of value.
Delayed results maybe outdated and may not serve any purpose.

d) S-Security

Confidentially and a high level of security are of great importance in any research.
Access to information by authorised people must be protected and the researcher must
maintain the desired level of security.

STAGE 2

DEVELOPING THE RESEARCH PLAN

At this stage an efficient plan to collect the information must be designed. The researcher
prepares a Research Proposal, which among other things addresses the following.

a) Defining the research problems to be solved.

b) Research approaches to be used e.g. observations, experiments, focus groups,
consumer panels, retailer audits, omnibus surveys.
c) Sampling plan – sampling unit, sampling size – sampling procedure.
d) Contact methods – mail, telephone, personal.
e) Costs
f) Confirmation of time budget and submission dates of research report.
g) Data sources to be used, primary or secondary.

STAGE 3

COLLECTING THE INFORMATION

At this stage data and information is collected and this stage is the most expensive.
Collection of data is subjected to problems such as:-

a) Some respondents may not be at home and they must be re-contacted thereby
increasing expenses.
b) Other respondents may refuse to cooperate refusing to answer questions.
c) Respondents may give biased or dishonest answers.

STAGE 4

ANALYSING THE DATA/INFORMATION

When data is collected more analysis is needed to find out how the data can be applied to
marketing problems and decisions. It is at this stage that data is tabulated and pertinent
findings extracted from the data.

STAGE 5

PRESENTING THE FINDINGS

At this stage a report based on the data analysis is presented. Major findings that are relevant
to the major marketing decisions facing management are presented.

The presentation of a report should lead to a marketing decision.

SOURCES OF DATA COLLECTION/SOURCES OF MARKETING RESEARCH

The research plan may call for gathering of secondary data, primary data or both depending
on what information is required.

Data – is a range of facts and figures having many possible uses. The central statistical office
provides demographic data. Information refers to processed data that has meaning For
example if sales figures and expenditure are analysed, the information that can be obtained is
that the organisation has made a loss. The sales and expenditure figures are “data” and the
“loss” is the information.

1) Secondary Data

This is data that already exist somewhere, having been collected for another purpose.
Secondary data is neither collected directly by the user nor specifically for the user
and is often collected under conditions that are not well known to the user.

Secondary data provides the starting point for research, as it is easily available and
can be obtained at lower costs.

However if Secondary Data available is incomplete, inaccurate, outdated, unreliable and

cannot solve the problem in question, the researcher will have to collect primary data. The
collection of secondary data for marketing research purposes is also referred to as Desk
Research.

Sources of Secondary Data

a) Internal Sources – Internal sources of secondary data include company profit and
loss statements, balance sheets, sales figures, sales call reports, invoices and prior-
research reports. Such data is not compiled for purposes of research, hence it is
secondary data
b) External Sources - This includes published information from

i) Government Publications – These provide data on economic, demographic,

social and other aspects of the economy and society.
ii) Publications of Trade organisations e.g. ZNCC, CZI – These provide data on
business practices, business and economies trends, economic analysis.
iii) Professional Journals e.g. marketing and sales (I.M.M (S.A) – provide data on
marketing and sales techniques, current information about research in business
particularly marketing areas.

2. Primary Data

This is data collected specifically for the problem at hand. The collection of primary
data is known as Field Research . Primary research is of two kinds.

i) Ad hoc Research

This is research that consist of a single survey which conclude the research study. For
example a survey can be carried out to find the percentage of women who drink
alcohol, where they drink, what exactly they drink and how often they drink. Drinking
habits of women can therefore be established and once they are established the
research ends.

ii) Continuos Research

This is research conducted periodically in order to produce regular reports in certain

trends. Continuous Research enables marketers to observe consumers changing tastes,
their buying habits, opinions and brand preferences. Continuous Research is referred
to as tracking study as it keeps track of developments in the area of research.

Tracking Studies

These are often used where there is need to track (monitor) a marketing situation
before, during and after a research. Tracking Studies monitor changes in markets,
product performance, promotional effectiveness and all marketing programmes.

Uses of Tracking Studies

Tracking studies are used in the following areas:-

i) Tracking on new products from pre to post – Launch to assess acceptance of

the new products.
ii) Monitoring variations of prices in different regions to determine how they
influence demand.
iii) Monitoring promotional effectiveness (pretesting and post testing) so as to
effect appropriate changes.
iv) Tracking of products as they move through the channels of distribution
(wholesalers, retailers).
v) Monitoring changes in consumer behaviour.
 Benefits of Tracking Studies

i) Comparative changes can be spotted in the early stages by management

thereby enabling timely action.
ii) Decision makers are always supplied with up-to-date data.
iii) Future actions are designed using information from previous tracking studies.
iv) Results from tacking studies before, during and after action aids fine-tuning
adjustments to make marketing programmes more effective.
METHODS USED IN THE COLLECTION OF PRIMARY DATA

1. Observations
2. Focus Groups
3. Survey
4. Experiments
1. Retailer/Dealer/Shop Audit
2. Consumer Panels
3. Omnibus Survey (Piggy-backing)

(1) Observation

Data is collected by observing the relevant factors and settings. Observation is

effective because sometimes it is difficult to obtain accurate data by asking
respondents. Observational research maybe used to study consumer behaviour. For
example a researcher may hang around a supermarket to see how consumers pick
certain products and how they react to prices, packages etc. However observing
should not influence the subject’s behaviour e.g. the consumers being observed.

(2) Focus Group

A gathering of 6 – 10 people who spend a few hours with a skilled interviewer to

discuss a service, project, organisation or other marketing activity. The respondents
speak freely about their feelings, perceptions and attitudes.

(3) Survey

A survey is when investigations are conducted by interviewing. Respondents are

contacted through mail, telephone or in person. A survey is undertaken to learn more
about peoples’ knowledge, benefits, preference, satisfaction/dissatisfactions, attitudes
etc. Types of Surveys that can be used are as follows:-

(a) Mail Survey

A mail questionnaire is used and respondents are requested to complete the questions.
Questions should be simple to understand and easy to follow as the researcher will not
be there to assist. There is low response in a mail survey.

Problems of Mail Questionnaire

 Respondents may not complete or return questionnaires as they may not want to be
bothered. A mail questionnaire is characterized by a low response rate. Respondents
do not expand on particular points leading to inadequate responses.

b) Telephone Survey

The telephone is used to conduct interviews and it is an effective way of getting quick
answers to simple questions. The telephone survey is associated with high response
rate. It also allows the interviewer to probe and really learn what Respondent is
thinking.

Problems of the Telephone Survey

The telephone is not a desirable method to obtain confidential information.

c) Personal Survey

This is where interviewers personally visit the respondents to interview them. It is

important to ensure that buyers is minimised.

4) Experiments

Refers to a situation where the researcher conducts an experiment e.g. to find the best
advertising campaign, best price level, best incentive scheme etc.

5) Retailer/Dealer/Shop Audit

Retail shops are recruited to participate in the exercise e.g. food stores,
pharmaceuticals, cash and carry shops. A team of Auditors will make regular visits to
the selected panel of retailers to check on actual stock and invoiced purchases for the
period since last count. A retailer audit provides information on the rate at which
goods are moving and such information is used to make marketing decisions. Every
producer know its share and the changes in the market share between its own market
share and competitors market share.

Information categories in a Retailer Audit

In a Retailer Audit the following is revealed.

i) Sales to consumers by product and by brand to determine market share.

ii) Sales to Retailers by product and by brand.
iii) Current stocks by product and by brand to determine stock levels held.
iv) Retail and wholesalers selling prices by product.
v) Percentage of outlets handling the various brands.

(6) Consumer Panels

 A group of consumers is recruited as a permanent panel to provide information on a
continuing basis. Panel members are provided with diaries and each time the panel
member makes a purchase information is recorded i.e. on brands, prices, sizes, place
of purchase etc. The respondent may receive a small payment.

(7) Omnibus Survey (Piggy – backing)

This is where two or more companies join together in a research exercise to share and
lower costs. Research findings are then shared among the companies.

Research Instruments

In collecting Primary data researchers have a choice of two main research instruments
namely the Questionnaire and Mechanical devices.

(a) QUESTIONNAIRE

The use of a questionnaire provides a quick and cheap method of conducting a survey. The
questionnaire suffers from several defects.

(i) Respondents completing the questionnaire may be unaware of the requirements and
may put different interpretations on the questions.
(ii) Respondents may give false/misleading information if they have a desire to give a
favourable impression.

Main points to be kept in mind when designing a questionnaire

a) Keep it as brief as possible

b) Question should be short and unambiguous
c) Where possible use questions that require yes/no answer or use alternatives.
d) No calculations should be required.
e) Personal questions should left until possibly at the end
f) The purpose of survey should be explained and assurances of confidentiality made.

(b) Mechanical Devices

A Galvanometer can be used in Marketing Research and it measures the strength of a

subject’s interest or emotions aroused by an exposure to a specific advert or picture.
The Galvanometer picks up the minute degree if sweating that accompanies emotional
arousal.

(a) Qualitative Research

This is research that seeks in depth, open – ended and not yes/no answers by using
open ended questions. Qualitative research allows the respondent to express his/her
own opinions and feelings without any limitations. An example of an open-ended
question is “why do you prefer to use surf? Different respondents can respond
 differently by expressing their feelings and opinions to the same question. The use of
Qualitative Research or open-ended questions enables more information to be
revealed.

(b) Quantitative Research

This is research that seeks closed-ended responses by using close-ended questions.

Quantitative Research makes use of Alternative answers and options for the
respondent to choose from. The respondent is guided and constrained and can not give
responses outside the alternatives and options available. An example of a close-ended
question is “why do you buy from OK Stores”? Tick the appropriate answer

a) Affordable prices
b) Good service
c) It’s a one stop shop
d) There is variety
e) Other…(specify)

In this case the response is structured and one cannot give an answer outside the options
provided. Closed-ended responses can be summarised into percentages and are easier to
interpret and analyse.

Sampling
A sample is a section of the population that is selected for research purposes. A sample is
used because marketers are not able to interview all users of a product as a result of the
limitation of resources and time. For example it is not possible for Coca Cola to interview all
consumers of soft drinks, hence there is need for a sample. Marketers make the following
sampling decisions.

a) Sampling size – This looks at the number of respondents to be selected. The sample
selected should be big enough to represent the views of the entire population. The
larger the sample the greater the likelihood that the sample will provide an accurate
reflection of the population as a whole.

b) Sampling Unit – This refers to who should be selected as respondents. It is important

to have an unbiased sampling unit. For example if a milling company wants to do
research to find out perceptions consumers have towards the company’s maize meal,
they (company) should decide on who to select as respondents (sampling unit). Both
men and women should be selected as respondents as both can cook and have
perceptions about the product in question. In this case selecting females only as
respondents will produce biased results.

Sampling Procedures

This looks at how the respondents will be chosen. Usually researchers use Probability
Sampling and Non Probability Sampling methods.

a) Probability Sampling
 A probability sample is one selected in such a way that every item in the population
has an equal chance of being included in the sample. There are three types of
Probability Sampling.
i) Simple random sample – Every member of the population has equal chance of
selection and members are selected without using any method.
ii) Stratified random sample – the population is divided into segments or strata
e.g. (age groups, income groups and random samples are drawn from each
group. Stratified sampling eliminates dominance of a particular demographic
group.
iii) Cluster (Area) sample – the population is divided into groups/and areas such
as blocks and the researcher draws a random sample of the group to interview.
Cluster sampling is important because it avoids dominance of a group of
people from one or more areas.

b) Non Probability Sampling

This is when there are no equal chances of being included in the sample, and when
costs or time involved in probability sampling are too high. There are two types on
non probability sampling.

i) Convenience sample – The researcher makes a selection of the most and easily
accessible members of the population from whom to obtain information.
Respondents who are not easily accessible are deliberately left out.
ii) Judgement Sample – the researcher uses his/her own judgement to select
population members who are perceived to be good prospects for accurate
information e.g. selecting only economists to give information about the
economic situation in Zimbabwe instead of any Zimbabwean irrespective of
what they do.

Summary

The success of any organisation depend on the quality of decisions made and for effective
decisions to be made there is need for information. Marketers make decisions on what
segments to enter, what products to produce, what prices to set, where to distribute, how to
promote and such decisions should be based on information if success is to be achieved. It is
therefore the role of Marketing Research to provide timely, accurate and reliable information.

Marketing Research is a component of the Marketing Information System which consist of

other elements such as internal records and marketing intelligence. Marketing Research is
concerned with the activities and subsets such as Product research and Market Research
process consist of five steps namely defining the problem, developing a research plan, collect
data, analyse data and presentation of findings and recommendations which leads to solution.

Marketing Research can be conducted internally by marketing personnel or externally by

Research Organisations. However in briefing the researcher it is import to point the cost
effectiveness, accuracy, time and security (CATS) desired for the research.

There are two categories of data namely Primary and Secondary data. Secondary data is data
that already exist and the gathering of Secondary data, is referred to as secondary research or
desk research and is the starting point in research as it is time-saving and less expensive. On
the other hand Primary data is data collected specifically for the problem in question. Primary
Research or field research is the collection of primary data. Primary research is of two kinds
namely Ad hoc and continuos research.

The collection of data is done by using several tools or approaches such as observations,
focus groups, surveys, retailer audits, consumer panels, omnibus survey (Piggy-backing) and
many more. Each approach has its own benefits and limitations. In conducting any research it
is not possible to gather data from all the users of a product or service, hence there is need to
take a sample, which is a section of the target group. Researchers should use a sample that is
big enough and whose composition represent the characteristics and views of the entire target
market. Probability sampling and non probability sampling are two approaches that are used
to select respondents.

Conclusively marketing research plays an important role as it ensures gathering of

information, which should be the basis of marketing strategies.
 CHAPTER FOUR
CONSUMER /BUYER BEHAVIOUR

Learning objectives

1. Define and explain the importance of Consumer/Buyer Behaviour to marketing

2. Explain the major factors influencing Consumer/Buyer Behaviour.
3. Explain the different motivational factors driving customers and consumers.
4. Describe the consumer decision-making process and explain its relevance to marketing.
5. Explain the decision-making unit (D.M.U) and its importance in marketing.
6. Demonstrate an understanding of the adoption process and its significance in marketing.
7. Demonstrate an understanding of the diffusion process and its marketing implications.

Introduction
Success in the formulation and implementation of marketing programmes can only be
achieved when marketers analyse and understand consumer behaviour in terms of purchase
decisions and consumption patterns of consumers. The way consumers behave determines the
marketing mix to be put in place.

Definition

Consumer Behaviour is defined as the behaviour or acts consumers display in searching for,
purchasing, using, evaluating and disposing of products and services they expect will satisfy
their needs and wants. In studying consumer behaviour marketers try to find how consumers
make their buying decision and identify factors that influence these decisions.

As marketers study consumer behaviour they want answers to questions such as what do
consumers buy? Where do they buy? Why do they buy? When do they buy? And such an
insight becomes the basis of marketing strategies (Marketing mix). Knowledge of how
consumers behave helps marketers to implement the marketing concept.

Consumer Behaviour and the Marketing Concept

The Marketing concept is a consumer oriented philosophy which states that for success to be
achieved the organisation should identify needs and wants of target markets and deliver the
desired satisfaction better than competitors.

Under the marketing concept the organisation adopts “the customer is king attitude” and
managers orientates all company efforts, planning, policies and operations towards the
customer. Central to the marketing concept is the notion of Customer satisfaction and for
customer satisfaction to be achieved, it is imperative to understand consumers through
Consumer Behaviour Studies.

Studying consumer behaviour becomes an absolute necessity if an organisation is to survive.

More importantly when an organisation adopts the marketing concept as a guiding principle,
they should study consumer behaviour.

The bottom line is that the marketing concept have given rise to the studies of consumer
behaviour, or putting it simply, the studies of consumer behaviour are deeply rooted in the
marketing concept.

Marketing Implication of Consumer Behaviour

The marketing implication of consumer behaviour are that when marketers study and
understand consumer behaviour, they are able to develop tailored marketing programmes
which meet the requirements of specific target markets. Equipped with the knowledge of how
consumers behave markets are able to:

a) Produce the right products whose sizes, shapes, designs, styles, packages, colour and
quality are to the expectations of The consumers. Because of the knowledge of
Consumer Behaviour Coca-Cola (Pvt.) LTD produce different types of soft
drinks with different packages (glass, plastic and the cane).

b) Price products to the expectations of the target markets. When an Organisation has
knowledge about consumer behaviour it is able to formulate pricing policies that suit
customers. The same Television set at T.V.Sales and Hire will have two prices: one
for those who buy on cash and the other for those who buy on credit.

c) Distribute products to the outlets that consumers patronise. Products from National
Foods are distributed through Born Marché, OK Bazaars, T.M. Stores, Jarzin
Supermarkets etc as consumers prefer different outlets. It is because of consumer
behaviour knowledge that effective distribution is achieved.

d) Promote products through the media that consumers use. When Marketers understand
consumer behaviour they can communicate to consumers using the media that
consumers use. Adverts of Vaseline Blue Seal are found in magazines, daily
newspapers, television and radio.

e) Evaluate marketing opportunities. As marketers analyse and understand consumer

behaviour of different consumers they are able to assess, analyse and evaluate the
attractiveness of the opportunities that arise. In understanding the buyer behaviour of
the youths and adults marketers can compare the different opportunities created.

f) Segment markets (selecting the most attractive segments) and position (placing
products/services in unoccupied positions in the mind of the consumers). It is through
understanding consumer behaviour that marketers are able to subdivide the market
into distinct subsets, select the most promising segments and position
products/services in viable and sustainable positions.
Major factors influencing consumer behaviour

It is important for marketers to understand what influences purchase decisions and

consumption patterns that consumers display. The major influences are illustrated in the table
below.

Cultural Social Personal Psychological

Culture Reference groups Age and Life cycle Motivation

Subculture Family Occupation Perception

Social Class Roles and statuses Economic Learning

Circumstances
Life Style Attitudes

Personality

1. Cultural Factors

a) Culture
Culture is defined as the sum total of learned behaviour traits, beliefs, customs and
values that serve to regulate the consumer behaviour of members of particular society.
The implication of culture is that the way consumers views the world, what they value
most, what they believe in and how they act differ according to their cultural
backgrounds. Culture shape consumption patterns and choices of consumers, Hence
marketers should know the specific cultures of their target markets in order to produce
products and use symbols that are acceptable.

(b) Sub-culture
Each culture contains subgroups on subcultures, which are groups of people with
shared value systems based on common life experiences and situations. Different
nationality groups (Irish, polish, Italians), racial groups (coloureds, blacks and
whites), religious groups (Jews, Islam, Christianity) and Geographical groups,
(Manicaland, Matebeleland, Mashonaland) have distinct tastes and preferences,
interests, taboos, attitudes and lifestyles. Subcultures are definable segments and
marketing programmes can be designed to suit specific subcultures.

c) Social Class
A social class is defined as the division of members of a society into a hierarchy of
distinct status classes so that each class have relatively the same status and members
of all other classes have relatively the same status. Social classes are measured in
terms of income, education, occupation and other variables. One’s social class has
influence on what one buys, where they buy, how they buy and when they buy.
Marketers are interested in social classes because they are market segments where
product usage can be related to social class membership. For example the Mercedes
Benz and the Mitsubishi Pajero vehicles are purchased by those in the upper class.
Marketers are also able to tailor produce goods and services, tailor price, tailor
distribute and tailor promote to meet the needs and interests of different social classes.
 For example CIMAS offers different medical aid schemes for different social classes.
The different medical aid schemes for different social classes are basic, primary,
private, Medexec.

Some of the reasons why marketers should develop different marketing programmes for
different social classes include:-

a) Social classes show distinct product and brand choice in areas such as clothing,
furniture, leisure activities, food and vehicles
b) Social classes show differences in media exposure. High class consumers have greater
exposure to satellite dishes, high quality and expensive newspapers and magazines.
c) Social classes also differ in television program preference lower class consumers
arguably prefer more of local television programs, local drama whilst higher class
consumers prefer foreign programmes such as Beverly Hills.

The different social classes are as follows:-

a) The upper upper class

b) The upper lower class
c) The upper middle class
c) The lower middle class
d) The upper lower class
e) The lower lower class

2. SOCIAL FACTORS

Consumer Behaviour (what one buys, where they buy, how they use products and services) is
influenced by social factors such as reference groups, opinion leaders and family.

a) Reference Groups
A reference group is any person or group that serves as a point of comparison or
reference for an individual in forming either general or specific values, attitudes or
behaviour. Marketers should understand the impact of other people on individual
consumption choices, patterns, attitudes and behaviour.
References groups encourage conformity and marketers use reference groups as they
make individuals aware of a product or service by providing information, assist the
individual in evaluating the product/service and legitimise and individual’s decision to
use the same product/service as the reference group. Reference groups are effective
because of the perceptions that consumers have about the reference groups. For
example “what has been used by the reference group is good and should work for
them too.” Because of such perceptions marketers make use of the reference group
concept in promotions. For example in advertising, marketers use celebrity appeals as
many consumers would imagine to live the life of celebrities such as Simon
Chimbetu, Oliver Mutukudzi, Kelvin Sifelani, Patrick Kariwo, Patricia Mabviko,
Peter Ndlovu and international celebrities such as Ronaldo, Naomi Campbell have
been used in promoting products, services and ideas.

(b) Opinion Leaders

 Opinion Leadership refers to the process by which one person (the opinion leader)
informally influences the actions or attitudes of others, who may be opinion seekers or
merely opinion recipients. Marketers should figure out how to reach an opinion leader
in the relevant reference groups and direct messages at them. Friends, colleagues and
neighbours can be opinion leaders.

(c) Family

One’s family influences one’s consumption and buying Behaviour. Members of a

buyer’s or consumer’s family can exercise a strong influence on the buyer’s
behaviour. Some of the brands we use today are a result of family members who have
influenced us. For example the Surf advert which features Mbuya Mlambo and her
elder daughter illustrates the impact of family members and how they influence
transfer of brand usage from one generation to the other. Marketers are particularly
interested in the roles and influences of the husband, wife and children in the purchase
of different products and services. This is important as marketers will direct their
messages to the right person. Imagine the Radio LTD Advert where a child says
“Daddy it’s high time we go to Radio LTD”

3. Personal Factors

The consumer/buyer behaviour of an individual is influenced by their personal factors

such as age, life cycle stage, occupation, economic situation, personality and self
concept.

a) Age

People’s tastes and preferences are age related and people change the goods and
services they consume because of age. Age therefore influences the consumer
behaviour and marketers should have knowledge about this.

b) Family Life Cycle Stage

This refers to the stages through which people pass from singlehood to dissolution.
The stage at which one is in the family life cycle influences one’s buyer behaviour
hence marketers can segment markets (families). The different stages in the family
life cycle are:-

STAGE 1

Bachelorhood

This refers to young adults (men and women who reside away from parents). They spend
their income on leisure activities, entertainment, rent, and furniture. Young adults are a
lucrative market for entertainment Clubs, sports clubs, travel agents, healthy products etc.

STAGE 2
Honeymooners

Honeymoon stage starts after marriage. Honeymooners are interested in new homes, furniture
and are desirable candidate’s for new products/services.

STAGE 3

Parenthood

At this stage, the family have children and the stage spans over 20 years, spending patterns of
the family change as they feel financially squeezed because of child rearing and educational
expenses.

STAGE 4

Post Parenthood

At this stage parents are left alone as the grown up children leave home to live on their own.
Parents in the post parenthood feel better financially and are targets for luxurious and
expensive products.

STAGE 5

Dissolution

At this stage one spouse survives (normally the wife) and the other dies. The surviving
spouse becomes more economic in spending patterns, health deteriorates and there is special
need for attention, affection and security.

c) Occupation

One’s occupation affect one’s consumer behaviour and influences goods and services
purchased. When marketers know the impact of occupation on consumer behaviour
they are able to formulate appropriate marketing programmes.

d) Economic situation

Consumer’s economic situation in terms of enough disposable income, savings or

borrowing power will affect his/her buyer behaviour. Marketers should monitor trends
in interest rates, personal disposable incomes and savings so as to formulate a
Marketing mix that is acceptable.

e) Lifestyles

Marketers should understand lifestyles of consumers, which are expressed in the

activities, and interests of consumers. Knowing life styles of consumers helps
marketers to understand changing consumer values and how they affect buying
behaviour.

f) Personality
 Personality is defined as those inner psychological characteristics that both determine
and reflect how a person responds to his or her environment. In simple terms, one’s
personality refers to those attributes, qualities, factors, traits and mannerisms that
distinguish one individual from others. Marketers should understand personality
because one’s product or dealer choice and how one responds to the promotional
efforts is influenced and determined by his/her personality. Some of the personality
characteristics are self-confidence, sociability, aggressiveness, compliance, gentleness
and detached. For example products can be produced and described as “gentle soap”.
Marketers will then formulate suitable adverts bringing out this personality
characteristic (gentleness) and appeal to those with such a personality or those who
subscribe to it.

4. Psychological factors

Psychological factors are influences within an individual that influence one’s

buyer behaviour. The psychological influences are:-

a) Motivation
b) Perception
c) Learning
d) Attitudes and beliefs.

a) Motivation

A motive is that which moves an individual and that which makes an individual
sustain a certain behaviour. Needs and goals are the basic forces that motivate a
person to do something. When a need is not addressed this leads to a drive which is a
strong stimulus that encourages action to reduce a need. Dr Abraham Maslow a
Psychologist viewed human motivation as a hierarchy of five needs ranging from the
(most pressing) physiological needs to the (least pressing) highest needs for self-
actualization. According to Maslow individuals will be motivated to fulfill the most
powerful needs for them at a given time.

Each need must be partially satisfied before the individual desires to satisfy a need at
the next level. Maslow’s hierarchy of needs is important to marketers because it help
explain why consumers buy. Knowledge about consumer needs and motives enables
marketers to formulate appropriate and effective marketing strategies and tactics. The
Maslow’s hierarchy of needs is illustrated in the diagram.
 Self actualization
needs, fun,
freedom, Education, hobbies
Esteem needs
Status, Recognition
Social needs
Love. Affection, Friendship family
Safety and security needs
Protection and security, insurance, pension
Physiological needs
Food, Clothing Shelter

b) Perception

Perception is the process by which people gather and interpret information from the
world around them. The way individuals perceive stimuli vary from one person to
another because of the following perceptual processes.

i) Selective Exposure

One’s eyes and mind seek out and notice only information that interest them. As
consumers select what to pay attention to, marketers should ensure that the message in
the advert is clear, stands out among the rest resulting in the attention of the consumer
being captured.

ii) Selective Perception

As consumer’s are exposed to various stimuli they screen out or modify ideas,
messages and information that conflict with previously learned attitude and beliefs.

iii) Selective Retention

As consumers are exposed to various stimuli they only remember or retain what they
want to remember or remember information that supports their attitudes and beliefs
rather than challenge their pre-conceptions.

c) Learning

Learning is defined as a relative change in behaviour occurring as a result of

experience. Consumer learning is the process through which individuals acquire the
consumption knowledge and experience they apply to future related behaviour. The
way consumers learn is of great importance to marketers who want to know how
 consumers learn about products and services. An understanding of how consumers
acquire knowledge about the organisations goods and services is important in the
formulation of effective marketing programme. However for learning to occur certain
basic elements must be present namely.

i) Motive

A motive is that which moves one into action. Marketers should uncover consumer
motives so as to be able to teach consumers why and how their products or services
will best fulfill consumer needs. For example the motive behind taking a particular
soft drink may be to get refreshed.

ii) Cues

A cue is a stimuli that give direction to motives. Price, sign, advert, package and
displays are cues that help consumers fulfill their needs in product specific areas.
Using the soft-drink example an advert that describes how “refreshingly different” a
soft drink is, will be a cue that give direction to the consumer. Marketers should
therefore provide cues that meet consumer expectations, for consumers to learn.

iii) Response

A response is an effort to satisfy a drive or motive and the response, one makes
depends on previous learning or experience. In the soft drink example when one
receives information through the advert one can respond by trying the soft drink.

iv) Reinforcement

Reinforcement refers to anything that follows a response and increases the tendency
for the response to reoccur in a similar situation. For example if one tries the soft
drink and find the experience rewarding the consumers’ response is reinforced
positively. The consumer will have learned that by taking a particular soft drink, their
needs will be satisfied.

d) Attitudes and Beliefs

Attitude is a learned pre-disposition to respond favourably or unfavourably to a

given object. In simple terms an attitude is a person’s point of view
towards something. Marketers should understand attitudes of consumers, how they are
formed and how they change because such attitudes influence the selective process,
learning and the buying decisions consumers make. Beliefs that consumers have on
products and services make up product and brand images. Marketers should correct
wrong beliefs through advertising campaigns.

Buyer Decision Making Process

Marketers should understand the consumer decision-making process so as to be able to

influence consumers. The buyer decision process consist of five stages which are illustrated
in the diagram.
Need Information Evaluation Purchase Post
Problem Search of decision Purchase
Recognition Alternatives

1) Problem Recognition/Need Recognition

A consumer recognises a problem or a need when he or she senses a difference

between his or her actual state and the desired state. For example a young lady may
desire to have a smooth skin but the actual situation or state is that she has a rough
skin. The lady recognises a problem and she requires a bath soap that gives her the
smooth skin. Marketers should determine what triggers problem recognition and
should identify the stimuli that often triggers interest in the product category and
develop effective Marketing programmes which capitalize on the stimuli. Positioning
is therefore determined by what triggers interest in the product category. For example
when marketers, through research knows that what triggers interest in a bath soap is
its ability to provide a smooth skin then they are able to position their brand as “the
one that gives you the smooth skin”

2) Information Search

At this stage the consumer searches for information bearing on the need. The lady in
our example will search for information on which bath soap could give her the smooth
skin. Consumers look for information from personal sources such as friends, family,
neighbours, colleagues, commercial sources such as advertising, salesperson, dealers,
displays and other information sources such as experimenting with the product. The
search for information stage is important to marketers who should identify the target
group’s source of information and disseminate information. In giving information
marketers should point out the unique selling proposition (U.S.P) of the brand so as to
appeal to the consumer. U.S.P refers to a benefit, which is a distinct advantage your
customers cannot get from a competitor.

3) Evaluation

At this stage the consumer compares information about the various brands. In our
example the lady may compare Lux, Protex and Palmolive to know where each brand
stands on the attributes connected to her needs. As consumers compare brands,
marketers should point out those attributes the consumer will be looking for and this
will influence the consumer to select the marketers brand.

4) Purchase Decision

At this stage the consumer selects the brand rated the best and purchase it. In our
example the lady may purchase Lux soap. Fast moving consumer goods (FMCG) are
normally purchases on cash unlike other products, which may be purchased
differently. In this regard marketers should know how consumers buy. Knowing how
purchases are made will enable the marketers to develop appropriate credit e.g. lay-
bye, zero deposit schemes etc.
5) Post Purchase

After making a purchase and having used the product, the consumer will re-evaluate
the decision and action to select a certain brand. If the brand matched consumer
expectations in terms of its performance, this results in cognitive consonance a state
of satisfaction. If the brand can not meet consumer expectations this leads to cognitive
dissonance, dissatisfaction or discomfort that occurs when one makes a purchase.

In our example the lady will assess whether Lux is providing the expected results.
However marketers should not exaggerate product performance when advertising, but
should make product claims that represent the product’s likely performance so as to
achieve customer satisfaction. When a customer is satisfied he or she becomes the
best advertisement and more importantly a satisfied customer buys today, tomorrow
and forever. Marketers should establish post-purchase communications to the buyer.

The After Market

The after market consists of all post-sale efforts to satisfy customers and if possible secure
regular or repeat purchases and this will lead to on-going and long term profits. Marketers
recognize that long term profits can only be achieved through long term customer
relationships, which are achieved through the After Market. The marketers interest in the sale
should not end when the order is delivered or when it is paid for, but importantly the marketer
should make efforts to ensure that the consumer derives maximum satisfaction from the
purchase. After the market techniques include facilities such as:-

i) After – Sales Service

Marketers should make available servicing and repair facilities to products such as
motor vehicle and other machinery to enhance customer satisfaction. Marketers
should arrange for service depots or agents who can provide servicing. Such
arrangements will ensure fast repairs.

2) Manuals and Instructions

The availability of manuals and instructions enables the customer to easily understand
how to use the product to maximum use. Explanatory leaflets can also be used to
provide market education. Easy use of a product leads to customer dissatisfaction.

3) Deliveries and Installation

Marketers should not promise deliveries and installation unless the promise will be
honoured. Regular and reliable deliveries can offer competitive advantages over
competitors. Installation of the product is also of paramount importance.

4) Refunds and Exchanges

At times customers make wrong purchases only to return the products on another day.
Marketers should be willing to refund or exchange and this creates goodwill with
customers.
5) Product Recall

Marketers should be in a position to recall faulty products quickly and reassure

customer. This demonstrates that the marketers cares a lot about the customer and is
not just interested in the sale.

Decision Making Unit (D.M.U)

The Decision-Making Unit refers to a situation when the buying decision process consists of
more that one person. All the people involved in making the decision make up the Decision
Making Unit. Marketers should identify and understand the roles in the D.M.U and needs
and expectations of members of the D.M.U.

Such an insight will enable marketers to design the product and develop effective
promotional tactics. The elements in the Decision Making Unit (D.M.U) are as follows:-

S- Starter – This refers to a person or thing which triggers a purchase. In any buying
situation someone or something suggests the idea of buying the particular product or
service. For example children may trigger the purchase of a television set.

P- Purchaser – The person who actually buys the product or service. The Purchaser
does not make any decision but simply buys as instructed. In our television example
the eldest child maybe the purchaser.

A- Adviser – This refers to a person who gives advice or recommendation on what

product or service to buy. A sales representative, friend, neighbour or colleague may
be an adviser.

D- Decider – The person who makes the decision on what to purchase, where and how to
purchase it. The decider is normally one who has financial authority or power to
dictate the final choice. In our television example the father may be the decider.
E- End –user – This refers to the person or people who uses the product of service. In
our television example, end users are members of the entire family.

F- Finance – The money or credit that allows the purchase to be made.

The Adoption Process

The adoption process refers to the mental process through which an individual passes from
first hearing about an innovation (new product) to final adoption. The stages are as follows:-

i) Awareness – This is where the consumer is exposed to the innovation but does not
have much information about it. For example a consumer becomes aware of the New
Zambezi Lite lager.

ii) Interest – The consumer develops an interest and searches for more information
about how the innovation can benefit him or her. In our new Zambezi Lite lager
 example, the consumer, seeks information about how it tastes, its price and alcohol
content.

iii) Trial – At this stage the consumer uses the product on trial basis to determine the
utilises of the product. In our example the Consumer tries Zambezi Lite to determine
its taste and see whether it can satisfy the consumer.

iv) Evaluation – At this stage the consumer evaluates and assesses the performance of
the innovation. The consumer will assess whether the performance of the product will
meet the expectations of the consumer. In our example the consumer will assess
performance of Zambezi Lite and compare it with another brand the consumer has
been taking.

v) Adoption/Rejection - If results of the assessment of the trial purchase are positive

the consumer will adopt the innovation that is accept regular use of it. If the
innovation can not meet the expectations of the consumer, he/she rejects it.

Marketing implication of the adoption process

When marketers understand the stage at which consumers are in the adoption process, then
they are able to persuade consumers to the ultimate acceptance of new product. This is
important because if consumers are not persuaded into accepting the innovation, they will
continue to use their established brands.

Knowledge about the adoption process will enable marketers to use the appropriate
promotional tools. For example in the early phases of awareness and interest, advertising
plays an important role as eye-catching and exciting adverts create awareness and generate
interest among consumers. On trial sales promotions will play a critical role as consumers are
induced and enticed into trying the new product. On evaluation personal selling which enable
more objective presentation of the information to the consumer, should therefore be used on
establishing conviction in the mind of the consumer and provides reassurance to the
consumer.

Adopter Categories

Early Majority
Late majority
Early

Adopters

Innovators Laggards

The Diffusion is concerned with how new products or innovation spread or diffuses in the
market. As a new product is introduced in the market, not all consumers move through the
adoption process at the same time. Essentially it means the innovation is not adopted by all
consumers at the same time hence there are adopter categories as illustrated in the diagram
classifications scheme which shows five distinct consumers in terms of where the consumers
stand in accepting the innovation.
i) Innovators - These constitute 2 ½ % of the market and are those adventurous and
risk takers type of customers who immediately try a new product or model as soon as
it appears on the market.

ii) Early Adopters – They constitute 13.5% of the market and are often opinion leaders
who adopt new products, readily, but only after careful consideration.

iii) Early majority – These constitute 34% of the market, weigh risks carefully and
accept an innovation before an average person.

iv) Late majority – These constitute 34% of the market and are skeptical consumers who
take their time before commitment to a new product. They may adopt a product as a
result of peer pressure and when they are satisfied that the new product is well tried
and is reliable.

v) Laggards - These constitute 16% of the market and are the last to try an innovation.
The laggards tend to be older, traditionally oriented to the past and suspicious of the
new.

Marketing Implications of the Diffusion of Innovation Process

When marketers understand the diffusion process they are able to formulate effective
marketing plans. When marketers know that only 2.5% of the market will adopt the product
in the early stages, it means initial demand of the innovation is low, hence management
should not produce on big scale.

As opinion leaders (those who influence others) are most likely to be among the buyers, their
opinions and perceptions about the performance of the innovation are very important, hence
there is need to produce a good quality product with good features and performance for the
opinion leaders to talk favorably about the innovation. Distribution will also have to be
selective in the early stages and then intensive as more people adopt it. Appropriate pricing
and promotional strategies can also be formulated depending on consumer standing on the
adopter categories.

Summary

Understanding consumers is key to the success of any organisation. Effective marketing

programmes can only be put in place when marketers understand consumer behaviour i.e. the
acts displayed in buying goods and services.

The implication of consumer behaviour is that it determines the marketing mix to be adopted
by the organisation. In consumer behaviour marketers should also understand the major
factors that influence consumer decisions. These are the cultural, social, personal and
psychological factors, which shape and mould consumer choices and consumption patterns.
An understanding of these factors and how they affect consumers will enable marketers to put
in place an offer that appeals to the consumers.

Of great importance in consumer behaviour is the decision making process. An insight in the
buyer decision making process will assist marketing management in making decisions and
more importantly such and insight will enable the marketer to influence the consumer at each
stage of the buyer decision process.

The after-market provides marketing with an opportunity to secure repeat purchases as the
after market techniques enhances customer satisfaction. If done properly after-market can
bring about a competitive edge over competitors.

The decision making unit (D.M.U) also plays a role in the purchase decisions consumer
make. Marketers should understand the key players in the decision making unit and the
different roles they play. Such an insight will go a long way in assisting marketers to
formulate strategies and tactics of dealing with the key players in the D.M.U.

New products come on the market and marketing should know how consumers make a
decision to accept or reject the new product. As the new product is introduced in the market it
spreads through what is called the Diffusion process and there are adopter categories that
accept the innovation at different times. The diffusion process and the adopter categories
have major implications in marketing planning, production and all elements of the marketing
mix.

Conclusively consumer behaviour is an absolute necessity as it equips marketers with the

knowledge of the customer, the most important person in any organisation. Knowledge about
how that person behaves, becomes the proper ammunition to effectively deal with the
consumer. In addition it is through consumer behaviour studies that specific needs of
consumers are identified.
 CHAPTER FIVE
MARKETING MIX

PRODUCT

Learning Objectives

After completing this chapter you should be able to:-

1. Explain the 4p’s and 4c’s of the marketing mix.

2. Distinguish between industrial goods and consumer goods.

3. Distinguish between product attributes and consumer benefits.

4. Explain the new product development process and the role research plays in new
product development.

5. Show how the product life cycle can be used as a Marketing tool by marketers.

Introduction

The marketing Mix is a set of controllable marketing variables that the marketer blends or
mixes together to win the patronage of the targeted segment. The marketer is therefore
referred to as the “mixer of ingredients” who should mix them and produce an offer to the
satisfaction of the target group. The marketing manager should blend product, price,
promotion and channels of distribution within the framework of the uncontrollable marketing
environment that is dynamic. The controllable elements should therefore be altered in the
short run and long run to adjust to the changing market conditions. The elements of the
marketing mix are the ingredients that should be mixed to produce an offer to the satisfaction
of the consumer.

For the marketer to construct the appropriate marketing mix there is need for information
which is obtained through marketing research) covered earlier on). As the marketing mix is
determined by the target group in terms of their characteristics and consumption patterns
(consumer/buyer behaviour). Consumer/buyer behaviour studies will reveal that consumers
have different buyer behaviour characteristics and consumption patterns that should be
grouped to bring about homogeneous subgroups (segmentation) so that each group receives a
unique marketing mix.
Elements of the Marketing Mix
The simplified marketing mix consists of the 4p’s (Product, Price, Place and Promotion)
whilst the extended marketing mix include other 3p’s namely physical environment,
participants and process. The marketer should co-ordinate and integrate the mix elements to
influence customer buying decisions. In formulating the marketing mix the marketer should
consider the 7 Cs which refers to customer perspectives to the 7p’s marketing mix.

The 4p’s and the 4c’s are:-

Product Customer Value

Price Cost
Place Convenience
Promotion Communication

PRODUCT

A product is defined as anything that can be offered to a market for attention acquisition use
or consumption that may satisfy a need or want. The term product also include intangible
items such as services and ideas. It is therefore clear that a product is not just a tangible
object with physical attributes, rather it is something the consumer buys as a solution to
his/her problems and also to satisfy his/her needs.

The product embraces product range, product quality, branding, and packaging, labeling,
after sales service, guaranties and warranties.

Levels of a Product

A product has three levels, which are core product/benefits, actual product augmented
product.

a) Core Product/Benefits
This refers to the main or core benefits that the consumer derives when they buy or
use the product. The core benefits constitute the reasons why one makes a purchase.
In designing a product, marketers should first define the core benefits the product will
provide to the consumers. It is through research that customer needs and benefits are
revealed. For example when a lady buys a knitting machine the core benefit is good
knitting. A marketer should design a knitting machine that does exactly that.

b) Actual Product
This refers to the physical product that provide the core benefits. The actual product
also refers to the product’s parts, style, features, brand name, packaging and other
attributes that combine to deliver the core benefits. In our example of the knitting
machine the actual product refers to the different parts that make up the product.

c) Augmented Product

This refers to extra benefits that are offered to the customer. Augmented product or
augmented benefits include customer advice, 24 hour after-service, help-line, free
lessons, delivery, installation etc. In our knitting machine augmented benefits include
free lessons on how to use the machine, help-line and delivery. Augmented benefits
 play a crucial role as they create repeat purchases and help secure loyal customers,
and thereby enabling the organisation to have a competitive edge.

CLASSIFICATION OF PRODUCTS

1. Industrial Goods – These are industrial products purchased for further processing,
for use in making other products or for use in conducting a business. Industrial goods
are classified into:-

(a) Capital Items

These are expensive goods that include installations such as buildings and offices.
Accessory equipment such as typewriters, photocopiers, power tools etc are also
industrial products. Capital items affect the scale of operation in a company and are
usually purchased directly from the producer by user.

(b) Materials and Parts

These are goods that enter the finished product completely. Raw materials are
unprocessed item which become part of the final product. Component parts are
products that enter the finished product. For example tires for vehicle batteries, aerial
for a television are all component parts.

(c) Supplies and Services

Supplies are goods required to aid the firm’s operations, to keep it functioning and not
directly used in the production process. Supplies include maintenance supplies such as
typing paper. Services are those activities specially carried out to support the
operations of a firm. These include business consultancy, cleaning, security, legal,
catering and many more.

2. Consumer Goods
These are goods purchased by final consumers for personal consumption.
Classifications of consumer goods are based on consumer shopping habits. And
include:-

(a) Convenience Goods

These are items that require little thought, little effort and prior knowledge to make a
purchase. Convenience goods are further classified as:-

(i) Staples
These are foodstuffs and items purchased regularly and repeatedly. Examples are
bread, toothpaste, milk and many more.

(ii) Emergency Products

These are purchased to satisfy an immediate need. Examples include fuel and pain
killers. Retail outlets for emergency products may open 24 hours a day. Service
Stations and Pharmacies are examples.

(iii) Impulse Goods

 These are purchased without forethought, planning or search effort. For example
sweets, chocolates and many more.

(b) Shopping Goods

These are goods where, before buying, the buyer does some “shopping around” that is
making comparisons on the basis of quality, design, durability, price, suitability,
special payment terms and guarantees. Examples include beds, refrigerators, radios,
clothing and many more.

(c) Specialty Goods

These are goods with unique characteristics or brand identification that the consumer
particularly wants and is willing to make a special effort to find them. Examples
include specific brands of products such as vehicles, watches, radios, health foods,
cameras and many more.

(d) Unsought Goods

These are goods that the consumer do not know about or knows about but do not want
them hence consumers do not look for them in shops. These could be new products,
for example the latest food processors or already known products such as insurance
policies.

Individual Product Decisions

Marketing Management should make decisions on various factors in the development and
marketing of individual products. Marketing Research will aid marketing management in
making decisions on the following areas:-

1. Product Attributes
2. Branding
3. Packaging
4. Labeling

1. Product Attributes
Product attributes refers to the quality, features and design of the product.

(i) Quality
The quality of a product refers to the level of performance in terms of durability,
reliability, speed, ease of operation or use. Quality is therefore a positioning and
competitive tool that an organisation can use to occupy an unoccupied space in the
mind of a consumer. Marketing Management should define quality from the
consumer’s perspective so that the quality level of a product matches needs of the
target market.

(ii) Product Features

Features of a product refers to the different parts that make up the product. For
example the features of a Mitsubishi Pajero vehicle include electric windows, air
conditioning, air bag, four wheel drive and many more. Features of a product
differentiates the product from competing products. Product features provide benefits
to consumers. For example the air bag on a vehicle provide the consumer benefit of
 guaranteed safety. In other words a product feature is what the product is and a
consumer benefit is what the feature does.

(iii) Design
The design, shape or style of a product is a powerful competitive tool, which
differentiates a company’s products from competing products. It is important for
marketers to give careful attention to the styling and appearance of the product as well
designed products win the attention of consumers. First impressions are created by
how well designed or poorly designed a product is.

2. Branding
A brand is defined as a term, name, symbol or design, or a combination of them
which is intended to identify the goods or services of one seller from those
competitors. Branding includes the use of brand names, brand marks and trade marks.

(i) Brand Name

A brand name is made up of words, letters or number that can be said aloud and that
gives an idea of the attributes of a product. Perfection, Big Ben, Dolphin are brand
names for bar soaps.

(ii) Brand Mark

A brand mark is the part of the brand that is in the form of a symbol, design particular
colour or lettering. For example the cascade package has four trees and these
constitute a brand mark. The nike symbol is a brand mark.

(iii) Trade mark

A trade mark is a brand that is given legal protection because under the law. It has
been appropriated exclusively by one seller. It is therefore illegal to use a registered
trademark of another company. For example Telecel Zimbabwe was taken to court by
a computer company for using the name Mango. Lyons is also a registered trade
mark.

The Importance of Branding

Branding is of great importance to consumers, producers and traders for the following
reason:-

(a) Brand names differentiate a company’s product from those of competitors.

(b) Branding facilities recognition of products by buyers as they are able to identify a
company’s products.
(b) Brand names speeds the decision-making process as evaluation of alternatives maybe
lessened or eliminated and thereby making consumer shopping easier.
(c) Wholesalers and retailers are more ready to accept a branded product and are willing
to provide more display space.
(d) Branding leads to repeat buying and the reduction of marketing costs.
(e) A prestigious brand can improve the standing of the retailer because a brand is
expressive of standards, values and qualities quite unique to each product. For
example the fact that Savile Row suits are carried by Barons improves the standing or
image of Barons.

Types of Brands

In branding products marketers can use the following types of brands:-

(a) Family Branding

A family brand or multi-brand refers to the same brand name for several products. In
our market situation an example is Red Seal where there is Red Seal Rice, Red Seal
Salt, Red Seal Flour, Red Seal Cooking Oil. Another example is the Johnson and
Johnson Company, whose products include Johnson & Johnson Baby Lotion, Baby
Powder, Baby Oil, Baby Shampoo, all bearing the family brand name, 'Johnson &
Johnson'.

Advantages of Family Branding

(i) The goodwill that goes with one or two of the products may help promote the others.
Essentially, awareness and reputation can built up over a whole range of products. For
example a mother may know all Johnson and Johnson products.

(ii) Encourages customers or brand loyalty to the entire product range where one may buy
all the products repeatedly and consistently. Consider the advert, which says “Zvaitwa
nevakuwasha tazviona. Chivhurai mapasuru tione kuti muneyi. Inga mune Red Seal
Roller Meal, Red Seal salt, Red Seal Rice, Red Seal Cooking Oil, neRed Seal Flour”.
Translated into English. “We have seen what the in-laws have done now lets see the
parcels. There is Red Seal Roller Meal, Red Seal Salt, Red Seal Rice, Red Seal
Cooking Oil and Red Seal Flour”.

(iii) Costs of introducing a new product will be less because there is no need for heavy
advertising to create brand recognition and preference more importantly introducing
the new product becomes quicker and easier. For example, albeit hypothetical, if
National Foods (Pvt.) Ltd would introduce a product and brand it Red Seal Margarine
it is less expensive, quicker and easier to introduce it, in the market because of the
name Red Seal attached to it.

(b) Individual Brands

Individual brands are products with each having a separate and different brand name.
For example Olivine Industries have separate names for its products namely romance,
jade and sport bath soaps. National Breweries also have separate brand names namely
Bohlingers, Castle, Lion, Centenary, Zambezi, Black Label.

Advantages of Individual Brand names

(i) Individual brands stimulate competition within and outside the firm. Bath soaps
produced by olivine Industries will compete with each other for a share in the market.
(ii) If one product fails this will not affect other brands. For example failure of a single
brand will not affect other brands at Olivine Industries. On the other hand if any
product, which bears the name Red Seal, fails on the market, this is most likely to
affect other products, which bear the same name.

(c) Generic Brands

These are unbranded and plainly packaged products identified by their contents,
manufacturer of middleman. For example paraffin, coal etc.

(d) Dealer Brands (Middlemen’s Brands)

This is where a producer sells a product under a middlemen’s brand. These are
also referred to as private brands or own-label brands. Examples are OK’s Pot `O’
Gold and TM Super Savers where various products are sold under the two names.
Own-label brands are sold at lower prices, resulting in high gross margins for the
middlemen.

3) Packaging

Packaging refers to the activities of designing and producing the container or wrapper for a
product. Packaging plays an important role, such that other marketers consider it as an
element of marketing mix, i.e. an 8th P that stand on its own.

Roles of Packaging

(i) Protection
The package protects the product in transit from the manufacturer to end-user so that
it retains its freshness until its finally consumed. The product should be protected
from different and varying weather conditions.

(ii) Identification
The package should identify the product and distinguish it from competing products.
A liquid in a transparent plastic bottle could by anything. Hence the shape, colour or
design of the package should identify the product and make it instantly recognizable.

(iii) Disposability
Empty packages should be disposed of safely. Environmentally friendly packages are
preferred as they easily decompose over a shorter time span. Consider the easy
disposability of the coke plastic package.

(iv) Added Value

A good package adds value to the product as first impressions may be created by the
appearance. Marketers should design packages that consumers will perceive as
appropriate thereby adding value to the product.

(v) Legal
A package has a legal role and legal requirements should be met in terms of labeling
where information on quantity or weight, ingredients, instructions and expiry date is
provided. This is in tandem, with the consumer Bill of rights that stated that the
Consumer has a right to information to ensure an informed decision.
(vi) Promotion
Effective packaging serve as a promotional tool that attracts attention and create
instant recognition of the company or brand. As the package carries information,
marketers can communicate through the package.

(vii) Convenience
The package should be designed in such a way that it offers convenience to the
customer. For example it is important that a package can be carried easily in terms of
handling and re-usability where the empty package can be conversed to some other
use after the original contents have been consumed.

4. Labeling
A label is part of the package and labels range from simple tags to complex
graphics which is attached on the product.

Functions of a label

i) Identification – a label identifies the product or brand. For example the name Geisha
stamped on the package identifies the bath soap.

ii) Grading – A label grades the product. Products have different grades and it is from
the label that one knows. For example course salt and fine salt.

iii) Description – A label describes several things about the

product. For example instructions on how to use the product, expiry dates, who made
the product, where the product was made, its contents and how to use it safely.

iv) Promotion – A label can also promote the product through its attractiveness in terms
of colour, design or symbol used.

PRODUCT MIX DECISIONS

Product Mix
This refers to the total assortment of products a company offers for sale. For example the
product mix for National Foods refers to all products that it sells. The product mix for a
college refers to all the study programmes it offers.

Product Line
This refers to the product or range of products aimed at one target market. A product line
consist of a group of product items which have similar characteristics and similar uses in
fulfilling customer needs. For example all variations of cooking oil offered by National
Foods make a product line. National Foods offers product lines such as cooking oil, flour,
rice, maize meal, stock-feeds and others.

Reasons for having product lines

i) When a single line fails or face difficulties and the organization has other lines, it has
somewhere to lean on. For example millers have been affected severely by the
reduction in demand for maize meal as many consumers prefer to take their own corn
to grinding mills. If Blue Ribbon Foods and National Foods relied on maize Meal
lines only, then they would have liquidated by now.
iii) Introducing new items

When a company is already offering other lines, it can introduce a new item at
relatively little extra costs as the equipment, labour or expertise may already exist in
the company. For example assuming that National Foods (Pvt.) Ltd first introduced
the maize meal line, then they introduce the flour line because both flour and maize
meal are powders. The same equipment, labour and expertise used in maize meal
would be applied in the production and marketing of flour.

Product Mix Width/Breadth

This refers to the number of product lines the seller offers in the product mix. In our National
Foods example, it offers five lines. When a company increases the breadth of the product
mix it will reach a series of segments.

Product Mix Depth

This refers to the number, version or formulations of items offered within each product line.
For example if flour is in three formulations or versions namely cake, plan and self-raising
flour with 2kg, 5kg, 10kg and 20kg of each item then the Depth is obtained by multiplying
the number of sizes (4) and the number of formulation (3) to give a depth of 12 items. Depth
ensures more penetration into certain segments.

Product Mix Consistency

This refers to how closely the products are related in terms of end use, production facilities,
distribution channels etc. In our example of National Foods there is more consistency as
maize meal and flour are powders and are produced using the same machinery and are
distributed at the same place. Stock feeds are produced from residue obtained from maize
meal and flour. Cooking oil may also be produced from maize.

New Product Development Process

The product life cycle (PLC) postulate that companies can not rely on their current products
to produce the target rate of sales and profit growth. More importantly an organisation must
develop and introduce new products on the market in order to survive in the long-term. As
new product development is a high-risk activity, organisations are compelled to meticulously
follow the new product development process in order to minimise risk of new product failure.

A New Product

There are different types of a new product and these include:-

i) A new product could be an improvement or development of an existing product to

offer extra benefits to customers. For example the New Surf Super Blue which has an
improved performance and offers an extra benefit of being kind to “your hands”.

ii) A new product could be the introduction of a completely new product, one, which has
never been marketed before, or one, which is introduced in an entirely new market.
 For example Metropolitan Bank introduced Tele-banking for the first time in
Zimbabwe.

iii) A new product could be the development of a product which has the same use as an
existing product but which is technically different or produced by different
technology and which may be better. Many technical products fit this definition.

Stages In the New Product Development Process

Idea Idea Concept Development Marketing

Generation Screening and Testing Strategy

Commercialisation Test Product Business

Marketing Development Analysis

1) Idea Generation
A company should gather as many ideas as possible. New ideas are collected from
internal and external sources such as employees, customers, middlemen, and
competitors, trade agencies and advertising agencies.

2. Screening Ideas
The large number of ideas generated are now ranked, evaluated, and reduced.
Impractical ideas are removed and only serious contenders are passed to the third
stage. In screening ideas management will consider the skills, technology and
resources to produce the product.

3. Concept Development Testing

At this stage an idea that will have survived the screening process is now turned into
something more tangible that consumers can relate in terms of fulfilling real
consumer needs (product concept). The concept is tested, that is getting feedback
from customers, and distributors about the proposed new product.

4. Development of Marketing Strategies

Once consumer and trade reaction are known to the proposed product, it is important
to plan how to introduce the proposed new product. The strategy document will cover
all elements of the marketing mix (that is the product price, place and promotion. It
will also cover sales and profit forecasts, product positioning and marketing budget.

5. Business Analysis
With the marketing strategy in place, it is important to consider potential earnings,
costs, and budgets in terms of business point of view in order to know how they
satisfy Company goals and objectives. If company goals and objectives can be met
then the next stage of product development will take place.

6. Product Development
At this stage the product concept is now turned into physical reality, that is
developing a physical product that meets the expectations of consumers.

7. Test Marketing
 At this stage the product and the entire marketing program are tested in a limited
geographic area to elicit consumer and trade reactions in real market conditions.
Adjustments will then have to be made in regard to the entire marketing mix.
Although test marketing is important it can reveal information to competitors.

8. Commercialization
Test Marketing provides management with information that allows it to make a final
decision on whether to launch the product or not. If management decides to go ahead
and market the product on a commercial basis then they have to launch it. In
launching a product it is important to consider when to launch it, where to and how to
launch it.

NEW PRODUCT FAILURE

New product development will remain a high risk activity despite all efforts to reduce the
risk. It happens that products that pass all the tests and stages and are launched into the
market can fail. A new product is regarded to have failed when it fails to generate the desired
level of sales and profits within a stipulated or reasonable time. When a new product fails it
normally disappears from the market. Products that have failed in Zimbabwe include Fanta
Still, Tropical Punch, 929 Mazda Vehicle.

Reasons for New Product Failure

There are various reasons why new products fail on the market and these include:-
1. Poor marketing research – The purpose of marketing research is to gather
information to be used in making decisions. If inadequate, and incorrect information
is gathered then management will make wrong decisions on the new product
development process.

2. Underestimating competitor capabilities – competitors pressures can become too

strong than expected and thereby effectively countering an organisation’s efforts.

3. Ineffective advertising – advertising creates awareness of the new product and if it is

not properly done then the new product may remain unknown.
4. Overestimating the market size – The market could be very small to the extent that
not enough of the new product can be sold to cover all costs involved.

5. Product’s failure to meet customer expectations – If the quality, design and

performance of the new product fails to meet customer expectations then it will fail.

6. Ineffective distribution – If a new product is not available or

is not easily accessible then it may fail.

7. Inadequate resources – lack of financial, material and

human resources support for the new product also leads to failure of a new product on
the market.

8. Bad timing – certain products are seasonal and should be launched at the right
time. More importantly certain economic and market conditions prevailing at a certain
period may not be conducive to the launch of certain new products.
9. Overpricing – The price of the product should be within the expectations of the target
market. Over-pricing will lead to a rejection of the new product.

10. Technological/machinery problems – constant machinery breakdowns will

comprise on the desired quality of the new product, resulting in an inferior product,
being produced.

The Product Life Cycle (P.L.C)

When a product is finally launched, it enters the market and starts a life cycle. As a
fundamental part of marketing, the product life cycle is an important tool for analysis and
planning of the marketing activities. The product life cycle consist of four stages that a
product goes through from the beginning to the end. The stages are introduction, growth,
maturity and decline.

The product life cycle assists marketing management to identify distinct problems and
opportunities, which arise at different stages in the product’s history. Having identified
problems and opportunities at each stage marketers will adopt the appropriate marketing
strategies. The marketing success of a firm will depend largely on its ability to manage the
life cycle of its products, hence there is need for judicious management.

Sales
Profits

Intro Growth Maturity Decline

1. Introduction Stage

a) Characteristics

i) Sales are low as the product is introduced in the market. Many consumers are not yet
aware of the product hence sales are very low.
ii) Profits are non-existent because of heavy expenses incurred in research, product
development and product introduction.
iii) Customers are innovators, those adventurous consumers who tries a product
immediately when it appears on the market.
iv) There are no competitors if the product is totally new or just a few if the product is
already known.

b) Strategies

i) Product – offer a basic product without fancy features.

ii) Price – Penetration pricing if there is competition already in the market. Skimming
pricing if there is no competition.
iii) Distribution – Distribution is patchy and limited to enable monitoring of acceptance
of new product.
iv) Promotion– Heavy promotional efforts (advertising, sales promotion, personal selling)
to create awareness, and induce trial and secure distribution outlets.

2. Growth Stage

(a) Characteristics
i) Sales start to rise as more consumers become aware of the new product.
ii) Profits start to rise.
iii) Customers increase as early adopters try the product.
v) Competitors start to enter the market as they offer slight variations of the original
product.

c) Strategies

i) Product – improve product quality, features and offer variety to counter competitor
offers.
ii) Price – slightly reduce prices to penetrate the market.
iii) Distribution – increase distribution and secure more shelf space
iv) Promotion – High promotion to differentiate between competitor’s products and
build interest and loyalty.

3. Maturity Stage

Characteristics

i) Sales reach peak

i) Profits are high and start to decline
ii) Customers buying the product are the early and late majority.
iii) There are many competitors.

a) Strategies

i) Product – Differentiate the products and offer more variations to win new customers.
i) Price – reduce prices to maintain existing market share.
iii) Distribution – intensify distribution and find new
distribution outlets.
iv) Promotion – increase promotion to stress brand differences and benefits and to
encourage brand switching.

4. Decline Stage

a) Characteristics
i) Sales decline as a result of changes in customer tastes and preferences, increased
competition technological advances and changes in attitudes towards the product.
ii) Profits will decline as well.
iii) Laggards may join
v) Competitors will pull out.

b) Strategies

i) Product – drop the product, liquidate it or maintain the product hoping that
competitors will leave the industry.
ii) Price – reduce price to attract laggards and other consumers.
iii) Distribution – phase out unprofitable outlets.
iv) Promotion – reduce advertising and sales promotion.

SUMMARY OF THE PRODUCT LIFE CYCLE CHARACTERISTICS, STRATEGIES AND

OBJECTIVES

CHARACTERISTICS INTRODUCTION GROWTH MATURITY DECLINE

Sales Low Rising Perk Declining
Sales Sales Sales

Profits Negative Rising High Declining

Profits Profits Profits

Customer Innovators Early Middle Laggards

Adaptors Majority

Competitors Few Growing Many Rivals Declining

Number Number
Marketing Create Maximise Maximise Reduce
Objectives Product Market Profit expenditure
Awareness Share while or milk
And induce defending the brand
trial market share
Strategies Offer a Offer Differentiate Phase out
Products basic Variety or and weak items
product improved Diversify Brands
product

Price Skimming or Price to Price to Cut

Penetration Penetrate match or Price
Market beat
Competition

Distribution Patchy or Intensive Intensive Phase Out

Selective Unprofitable
Outlets
Advertising Building Build Stress Reduce
Product Awareness Brand
Awareness And Differences
Interest And
Benefits

Sales Heavy Sales Reduce to Increase to Reduce

Promotion Promotion to take encourage
Entice trial Advantage brand
Of Heavy switching
Consumer Demand

SUMMARY

The marketing mix is of great importance to an organisation as it represents the controlled

use of resources. The success of an organisation depends on how it manages the marketing
mix elements namely product, price, place, promotion, participants, physical evidence and
participants.

Product is the first P of the marketing mix. Product related decisions that marketers make
relate to quality, branding, packaging, labelling, guarantees and warranties. In branding
marketers should make a decision whether to use individual or family or brand names by
considering advantages and disadvantages associated with each of the types of branding.
Another important aspect to product policy is packaging which plays a crucial role to the
success of a product or brand. In putting in place a package marketers should ensure that the
package is capable of performing the different roles of a package. Labeling is also important
as it provide vital information to users.

There are different classification of products namely consumer products and industrial
products. Marketers should understand the different classification so as to formulate the
appropriate marketing approach to market each class of products.

Effective product portfolio management suggest that an organisation should develop new
products from time to time for it to survive. In producing a new product it is important for
marketers to carefully go through all the new product development stages to reduce chances
of new product failure. The stages are idea generation, idea screening, concept development
and testing, marketing strategy development, business analysis, product development, test
marketing and commercialization. An understanding of reasons why new products fail on the
market is of paramount importance so as to enable marketers to minimize chances of new
product failure. When a product or service is launched in the market it goes through the
product life cycle that is stages. It goes through in its life span from beginning to end. The
four stages namely introduction, growth, maturity and decline presents problems, challenges
and opportunities that should be dealt with. The product life cycle is an analytical and
planning tool that marketers should make use to determine the marketing resources required
at each stage.

CHAPTER FIVE
PRICE
Learning Objectives

After completing this chapter you should be able to:-

1. Explain the importance of pricing
2. Distinguish between Penetration pricing and Skimming pricing
3. Show Breakeven analysis and marginal analysis as methods of setting prices.
4. Explain a price war and how it can be avoided.
5. Discuss the different price modification strategies that can be
used.

INTRODUCTION

After producing a Product or service, a price should be set. Price plays an important role as it
may attract or scare away customers, hence there is need for marketers to handle pricing
decisions carefully. Price is defined as money or other consideration for which a product or
service is bought or sold. Among all elements of the Marketing Mix, Price is the only element
that directly contribute to revenue, all other elements contribute to costs.

Pricing Objectives
When setting a price for a product or service it is important to consider what the organisation
wants to achieve with the price.

Pricing objectives include:-

a) Pricing to maximise profits. This is where the organization seeks to achieve high
profits by setting high prices.

b) Pricing to maximise sales volume. This is where the organization seeks to sell as
much units as possible. This is normally achieved by setting a lower price because
under normal conditions the lower the price, the higher the quantity demanded.

c) Pricing to survive. This is where an organisation sets a price that covers and
ensure continued survival of the organisation. This is normally used where a company
is plagued with intense competition, changing customer tastes and preferences and a
rapidly changing environment. In such a case it is important to forego profits by
setting a price that ensures survival.

d) Pricing to kill the product. This is where a price is set to get rid of the product. It
is normally used where a product has reached a decline stage in the product life cycle.
The price is normally a very low price.

Factors to consider when setting prices

When setting prices it is important to consider several factors which are in two categories
namely Internal factors and External factors.

1) Internal factors
Internal factors are those factors inside the organisation and can be controlled. These
are:-
a) Marketing Objectives
Marketing objectives are important considerations and will guide and determine the
prices to be set. Marketing objectives include profit maximisation, market share
leadership, preventing competition and other objectives.

b) Marketing Mix Strategy

The price set should be consistent with other elements of the marketing mix such
as the design, and quality of the product, distribution outlets to be used and
promotional decisions. For example a High Quality Product suggests a high price and
the use of highly perceived Distribution outlets. In such a case there is consistence
between the price set, quality and the distribution outlets used. For example high
quality clothing may be priced highly and distributed through H.M. Barbours.

c) Costs
Costs of Manufacturing, marketing, promoting and distributing the products should be
considered in setting a price. The price set should cover all costs and allow a return on
investment. Costs to be considered are fixed costs, those that do not vary with level of
production for example rent, insurance and variable costs, those that vary with level
of production or sales for example direct labour, raw materials, packaging and others.

2. External Factors
External factors are those outside the organisation and these include:-

a) Level of Market demand

Research should be conducted to determine the customer demand of the product as
there is a relationship between price and demand. Under normal circumstances the
higher the price the lower the quantity demanded and the lower the price the higher
the quantity demanded. Price elasticity of demand, which is the responsiveness of
quantity demanded to a change in price should therefore be known by marketers.

b) Nature of Market Competition

The nature of market competition determines the prices to be set and the market
structures are pure/perfect competition, monopoly and oligopoly. Perfect competition
is where there are many buyers and sellers trading in a uniform commodity for
example bread. In such a situation the seller does not have the freedom to set the price
it wishes. Under a monopoly situation there is one seller who has the freedom to set
the price he/she wants as consumers do not have much choice and cannot readily shift
to other suppliers. Oligopoly competition is where there are a few suppliers for
example petroleum and steel industry. The product is homogenous and the price set is
the same.

c) Competitors Price and Offers

Marketers should also consider prices and other offers of competitors. Consumers
make comparison when shopping hence it is important to consider competitor’s offers
when setting prices.

d) Other factors
In setting prices it is important to consider the factors such as economic factors and
Government regulations. Price controls by Government and Economic factors such as
 inflation and interest rates have a major effect on the price, hence these should be
considered as well.

Pricing Methods

Various pricing methods can be used by marketers to set a price for a product or
service. Bearing in mind the different factors that influence and affect pricing
decisions, marketers can use the following pricing methods:

a) Cost Plus Pricing

This is where an organisation adds up all costs (fixed and variable) of the product and
then add a standard mark up which is often expressed as a percentage of the cost. This
method places much emphasis on cost and tend to ignore demand and competition.
Cost – plus or mark up pricing is mostly used because sellers are more certain about
costs than demand of the product/service.

b) Perceived – Value Pricing

This is where a price is set based on consumer perceptions about the value of the
product or service. Much emphasis is placed on perceptions and not costs.For
example the price of a pint of beer is different at Sheraton Hotel, a bottle store in the
high density areas, Beer engine, Boomerang, Live Wire and Star Bar. The reason for
such differences are different perceptions. However if a seller sets a price that is
above the perceived value this will have negative impact on sales.

c) Going Rate Pricing

This is where a price is based on competitors price. More emphasis is placed on
competitors prices and less attention is placed on the company’s costs and demand. In
any market there are market leaders who are followed by smaller companies. Small
companies change their prices when the market leaders change their prices instead of
them, the smaller companies changing prices when their costs change, hence the
smaller companies follow the leader.

d) Break-even Analysis
This is where a price is set based on the Breakeven point, that is the quantity where
the firms total cost will equal its total revenue TC=TR. Breakeven analysis evaluates
whether the firm will be able to breakeven that is, cover all its cost with a particular
price. As illustrated in the diagram, below the breakeven point the firm makes a loss
because total cost is higher than revenue. Above the break-even point the firm makes
profit because total revenue is higher than the total cost.
T
Breakeven
R V
Point
C

F
.
C
(e) Marginal Pricing
This is where a price is set based on marginal analysis which is based on the change
in total revenue and total cost obtained from selling one more unit to find the most
profitable price and quantity. Marginal Analysis is used when a firm wants to
maximise profits. Since the firm’s demand curve is down slopping an extra unit can
only be sold when the price is reduced. As the price is reduced total revenue will
increase until a certain point when negative marginal revenue will occur as a result of
the lower prices. The price should therefore be set where Marginal Revenue =
Marginal Cost (MR = MC)

Price Modification Strategies

Although an organisation can set a price by using any method, it is important to adjust
or modify prices to suit demand, customer and differences and changing situations.
This is done by using price modification strategies such as:-

a) Geographical pricing
As customers live in different Geographical areas it is important to differentiate prices
through Free On Board (FOB) Pricing and Zone pricing. FOB is when the seller pays
for transporting the product whilst it is in transit. Upon passing of ownership the
buyers will then pay for freight charges. FOB is used for the convenience of the
customer. The farther the customer is the more they pay.

Geographical pricing also include:-

i) Uniform Delivery Pricing – This is where the same price is charged to all customers
regardless of their location. Essentially it means the seller sells to all geographical
areas at one price.

ii) Zone Pricing – This refers to charging an average freight charge to all customers
within a specific geographic area. For example if the factory is in Harare, all
customers in Bulawayo (Zone), irrespective of where exactly they are, will pay the
same price.

b) Price Discounts
A discount is a reduction on the selling price of a product or service. Discounts that
can be offered to customers include:-

i) Cash Discount
This refers to a reduction on the price of a product for customers who buy on cash. A
cash discount is important because it encourages customers to pay promptly and
thereby reduce debt collection costs in the form of postage and stationery. For
example a television priced at $30 000.00 may have a cash discount of 10%.

ii) Quantity Discounts

This is a reduction on the selling price for customers who make volume purchases.
Quantity discounts are important as they encourage customers to buy more from one
seller. For example a 20% discount may be offered to anybody who purchase 50 or
more bags of cement.
iii) Functional Discounts/Trade Discounts
These are discounts offered to traders such as wholesalers and retailers to induce them
to perform certain functions such as storage, gathering of information and many more.

iv) Seasonal Discounts

These are reductions offered to customers for buying products off the season for
example discounts can be offered to customers for buying blankets in September and
October when it is very hot,. Seasonal discounts are important because they enable the
organisation to make sales even when demand is low.

a) Discriminatory Pricing
This is where prices are modified to accommodate customer differences, locations
or product. For discriminatory pricing to be effective it is important to have the
market properly segmented and it should not be made possible for the segment paying
a lower price to be able to purchase and resale the product to segment paying a higher
price. For example the price of one product at TM Stores Westgate maybe different
from the price of the same product at TM Stores Machipisa Shopping Centre.

d) Psychological Pricing
This is where Marketers modify prices on the basis of perceived psychological effect
of the price. Psychologically small price differences may suggest big differences and
have an impact on the consumer. For example a T-shirt priced at $600.00 compared to
one priced at $599.00. The actual price difference is $1 but the Psychological effect of
such difference is big.

e) Promotional Pricing
Promotional pricing is when a company’s goods and services are temporarily priced
below the selling price. Forms of promotional pricing include:-

i) Loss Leader
This is when a product is priced lowly in order to attract customers. This is practiced
in most retail outlets where selected items are lowly priced and placed on display
windows to get the attention of potential buyers. When the potential buyers get in the
shop they end up buying other products which should be more expensive.

ii) Cash Rebates

These are special offers for a given period of time. For example when price for soaps
are reduced for a week only.

New Product Pricing

When a new product is launched there are two main pricing strategies used and these are:-

a) Penetration Pricing
This is where an initially low price is set to secure market share. It is used where there
is already competition on the market. Setting high prices when there are rival products
may make the company lose sales. For example when the Daily News was introduced
on the market, penetration pricing was used as its price was $6.00 as compared to the
Herald whose price was $8.00.

b) Skimming
 This is where an initially high price is set to maximize profits. It is used where there is
no competition and where consumers do not have choice. For example Net One used
the skimming or creaming pricing when they first introduced cell phones in
Zimbabwe.

Price Wars
This is where there is a retaliation in slashing prices by different companies in a bid to out
compete each other. The companies may not secure price advantage but will cut in their profit
margins by low prices. In a price – war situation it is consumers who benefit both in the short
term and long term. It is therefore important for organisations to avoid price wars by using
special offers for a limited period, increasing after sales care, offer appropriate credit
facilities and rewarding loyal customers.
Summary

The price of a product is an important element of the Marketing mix. If pricing is not handled
properly the organisation may lose customers and profits. In setting price marketers should
consider pricing objective and marketing objective of the organisation. Marketers should also
consider costs and other elements of the marketing mix and these are internal factors.
External factors to be considered include level of market demand, nature of market
competition, competitor prices and offers and other factors such as Government Regulations
and Economic Factors.

Different pricing methods can be used to set the actual price and these include cost-plus,
perceived value, going rate, breakeven analysis and marginal pricing methods. Marketers
may not set a single price but may adjust prices using price modification strategies such as
geographical pricing, price discounts, discriminatory pricing, psychological pricing and
promotional pricing.

In setting prices for new products marketers can use market penetration pricing where there
are other rival products or skimming pricing where there are no competing products.

CHAPTER SIX
PROMOTION

Learning Objectives
After completing this chapter you should be able to:-
1. Identify and explain the elements of the promotional mix.
2. Discuss the communication process and its relevance to marketing
3. Explain the AIDA model and its significance to marketing communications.
4. Distinguish between above-the-line media and below the line media.
5. Discuss the role of advertising in the promotional mix.
6. Discuss the role of sales promotion and identify the sales promotional tools
7. Explain the push and pull strategies.
8. Distinguish between Public Relations and Publicity.
9. Explain the role of Public Relations in Crisis Management.
10. Discuss the role of Personal Selling in the promotional mix.
11. Explain Direct Response Marketing and how it can be used.

INTRODUCTION

Promotion is a key element in the marketing mix. Marketers understand that if consumers are
left alone they will not buy enough of the company’s products or services, hence there is need
to directly influence consumer’s minds and the decision they make through promotion which
is often referred to as the communication mix or the promotional mix. When an organisation
develops a good product (Product) that is well priced (price) and made available (place) then
marketing should communicate with its customers (promotion). In simple terms promotion is
communicating, information between a seller and potential buyer(s) and other players in the
channel to influence attitudes and behaviour.

Promotional Mix

The promotional mix consists mainly of advertising, sales promotion, personal selling and
public relations and publicity.

Promotional Mix

Advertisin Sales Personal Public

g Promotion Selling Relations
&

Promotion Objectives Publicity

It is important for an organisation to clearly define what it wants to achieve with promotion
and there are three basic promotional objectives namely:-

1) Informing – This refers to informing, telling about the product/service. Consumers

must know something about the product for them to purchase it.
2) Persuading – This refers to offering reasons why consumers should select your
brand and it is used when there are rivals brands on the market. It is not enough to
simply inform when there are competing rivals, hence there is need to persuade.
 Persuading is normally used in the competitive stage of the product life cycle to build
selective demand.

3) Reminding – This refers to making consumers to keep thinking about the

product/service. Consumers should be reminded on how good the brand is and about
past satisfaction so that they do not shift to competing brands.

The Communication Process

Communication is the process of transmitting information so that it is understood and acted

upon. As marketers are communicators who communicate with consumers they should
understand how communication works. Marketers should understand communication in the
context of marketing as illustrated in the diagram.

Model of Communication Process

Noise

Sender Encoding Message Decoding Receiver

Medium

Feedback

From a marketing perspective the sender is the marketer who initiates a message byencoding
that is putting thought into symbolic form. In encoding it is important to express a message in
a form that can mostly likely be understood or that is welcome to the receiver. Encoding is
the use of signs, colour, pictures, voice, words, music etc. For example in an advert entitled
“The Naked Truth” Net One used a naked man. A symbol that was received with mixed
reactions by Zimbabweans. The message is a symbolic expression of sender’s thought e.g.
the advertisement. The message should meet identified needs of the target audience. The
medium refers to the communication channels through which the message moves from
sender to receiver for example radio, television, newspapers and magazines. Marketers
should use media that cost effectively reaches the target audience. Decoding is the process
through which the receiver assigns meaning to the symbols encoded by the sender, that is
interpreting the meaning of an advertisement. A message should be decoded in the exact
form intended.

Noise is the extraneous distracting stimuli that interfere with the reception of the message in
its pure and original form. There will always be noise along the channel and a message
should contend with the extraneous distracting stimuli. For example all other messages that
scramble for attention are noise. The receiver is the party receiving the massage for example
the consumer. Feedback is part of the receiver’s response communicated back to the sender.
Feedback enables the sender to monitor how well the message has survived the journey along
the channel, whether it has impacted upon the receiver negatively or positively, whether it has
been decoded accurately and whether any intended action has been instigated.

Promotional Planning
As discussed previously in (Consumer behaviour) the adoption process refers to the stages
through which a consumer goes through from first hearing about an innovation to final
rejection or adoption. The stages are awareness, interest, trial, evaluation and
adoption/rejection. These stages guide promotional planning as the promotion objectives of
informing, persuading and reminding relate to the stages in the adoption process. The
marketer has a task to assist the consumer to go through the stages in the adoption process
and the decision making process and this can be achieved by using an action oriented Model
called AIDA. In developing an integrated promotional Campaign marketers can make use of
the AIDA model.

A - getting Attention
I - holding Interest
D - Arousing Desire
A - Obtaining action

a) Getting Attention – This is necessary to make consumers aware of the company’s

products. Marketers make use of attention – getting devices such as large deadlines,
shocking statements, pretty women, handsome men etc.
b) Holding Interest – Holding interest will give communication a chance to build the
consumers interest in the product/service. A message should hold and maintain
interest.
c) Arousing Desire – The desire to own or use the product must be aroused in the
consumer. In this regard marketers should convince the consumer that the product
meets consumer needs. Marketers should point out the unique selling preposition
(USP) an advantage that consumers cannot obtain from competing brands. The U.S.P
should aim at an important unsatisfied need.
d) Obtaining Action – The ability of the promotional message to lead the consumer to
try the product is a major requirement. Obtaining action means gaining trial of the
product.

ADVERTISING
Definition Advertising is defined as any paid form of non-personal presentation and
promotion of ideas, goods or services by an identifiable sponsor.

Purpose: The purpose of advertising is to communicate to customers and potential customers

by drawing their attention to the characteristics of an organisation or a product or service
which will appeal to their buying motives.

Objectives
a) Communicating certain facts about a product.
b) Highlighting specific features of a product that separates it from competing brands.
c) Building up a brand image or corporate image.
d) Changing customer and consumer habits for example adverts about AIDS, drunken
driving, cigarette smoking etc.
e) Influencing dealers and resellers to stock the organisation’s products.
f) To create awareness of new products and to generate enquiries from potential
customers.

Media Selection
A decision should be made on the media that carries the message. Two key concepts are
important when selecting media and these are:-

(a) Reach- The number of people exposed to the particular medium through which the
message is presented. For example the Daily News, Herald, Financial Gazette, Radio
1,2,3 and 4 have different reach. Marketers should know reach of a particular medium
before they select it.

(b) Frequency – The number of exposures in a given period.

Media Characteristics
Characteristics of each media should be known so as to select the appropriate one.
a) Newspapers

Advantages
1. Good market coverage 2. Broad acceptance 3. Timeliness

Disadvantages
1. Short life 2. Poor reproduction quality

(b) Television

Advantages
1. Combines sight, sound and motion
2. Appeals to these senses.

Disadvantages
1. High Cost 2. High Clutter

(c) Magazines

Advantages
1. Good pass – along readership
2. High demographic selectivity
3. High quality reproduction

Disadvantages
1. Long – lead purchase time.

(d) Direct Mail

Advantages
1. Audience selectivity
2. No advertising competition with the same media.
Disadvantages
1. Relatively high cost.

(e) Outdoor (Bill boards, bus shelters etc)

Advantages
1. High repeat exposure 2. Low cost 3. Low competition

Disadvantages
1. No audience selectivity 2. Creative Limitations

(f) Radio

Advantages
1. Mass use 2. Low cost 3. High geographic and Demographic Selectivity

Disadvantages
1. Audio presentation only 2. Low attention than television.

Above and Below the line

Above the line is advertising in media, which pay commission. The media pays commission
on purchase made by the advertising agent. Mass media such as radio, newspapers, television
and cinema are example of above the line.

Below the line is advertising in media where there is no payment of commission for example
exhibition, direct mail, point of sale etc.

Through the line is when a campaign is planned using above the line media linked to
below the line activity. In other words there is a combination of above and below the line
for example advertising on television will be linked to point of sale displays and both will
portray the same theme.

Evaluating Advertising Effectiveness

Marketers should ensure that they derive benefits from advertising hence, there is need to
find out whether a company’s advertising is effective. Measuring advertising effectiveness is
done in two ways.

a) Measuring communication effect – This refers to determining whether the advert is

capable of communicating effectively. Marketers should know the capability of an
advert to deliver the desired communication effect. In this regard marketers use pre-
testing and post testing.

i) Pre-testing – refers to assessing effectiveness on actual media. Before the advert is on

National Television it has to be exposed to a certain group of the target audience to
determine its effectiveness.
ii) Post-testing – refers to assessing effectiveness of an advert after it has been printed or
broadcast. Research is conducted on the number of consumers who remembers the
advert and what exactly they remember.

(b) Measuring Sales Effect

This refers to establishing sales generated by the advert. The level of sales generated
will show how effective or ineffective the advert has been. However sales effect is
difficult to measure as sales are not influenced by the advertising alone, but other
factors such as price, availability and competitor actions also influence sales.

2. SALES PROMOTION
Definition – A sales promotion is defined as the provision of short term incentives to
encourage the purchase or sale of a product or service.

Purpose - The purpose of a sales promotion is to support marketing activities in

persuading and motivating customers to buy.

Objectives – Sales promotions have various objectives, which include.

a) To encourage product trial. For example the New Africa Online Internet and email on
television without a computer. They were offering an introductory 6 months free e-
mail and Internet to encourage product trial.

b) To encourage more frequent or greater use of a product. For example the Lever
Brothers “Knock Knock what have you got" sales promotion. It encourages more
frequent use of Lever Brothers products.

c) To increase the number stockists. For example when producers offer discounts to
wholesalers and retailers for a specific period to encourage more of them to stock the
producers products.

d) To increase awareness of a product. For example :Great Stores Draw Sales

Promotion” between 24 November and 31 December 2000. CW Store, Radio Ltd,
Blooms and Creative World offered “Fantastic Prizes” to lucky customers who
purchased any Panasonic products.

(a) To encourage seasonal sales. For example prizes offered to customers who buy
blankets between August and October, a period when demand for such products is
low.

(b) To encourage brand switching. For example where marketers offer incentives to
consumers to encourage them to switch to their brands.

(g) To increase sales in a new market segment. For example the new TM outlet at High
Glen Shopping Centre offered special offers” on The Grand Opening.

Promotional Strategies
Organisations should communicate with the final consumer, public retailers and wholesalers
to ensure its products are promoted effectively. To achieve effective promotion two
promotional strategies are used namely:-
a) Promotions with a Pull Strategy/Pull effect – Pull techniques are aimed at
consumers to arouse their interest in the product. Such interest is communicated to the
retailers by making enquiries. Retailers will thereby be forced to increase stocks,
thereby “pulling” the products from producers as illustrated in the diagram.

Producer Wholesalers Retailer Consumer

b) Promotions with a push/strategy/push effect – Push techniques are aimed at traders

or channel members to induce them to order and stock and sell the products.
Essentially the products are “pushed” through the distribution channel as illustrated in
the diagram.

Producer Wholesalers Retailer Consumer

However both push and pull techniques have a range of advantages and disadvantages
associated with them as shown in the table.

Push Strategy
Advantages Disadvantages
-more self space gained -there is no contact with the consumer
-distributor co-operation is -high costs involved and profits enhanced
are reduced
-they educate distributors
-good relationships with
distributors are established.

Pull Strategy
Advantages Disadvantages
-Build brand image -High costs involved
-Create rapid brand awareness -There is no trade support
-Maintain customer loyalty.

Types of Sales Promotions

The types of sales promotions are:-

a) Consumer Promotions
b) Trade Promotions
c) Sales Force Promotions

a) Consumer Promotions - These are aimed to consumers to encourage more frequent

buying or faster usage and to encourage trials of other brands. Consumer promotions
are:-

i) Coupons– A coupon is a certificate entitling the bearer to a stated saving on the

purchase of a specified product. It could be attached on the product or published in
newspapers or magazines.

ii) Competition –This is where consumers are requested to send tokens or proof of
purchase and this induces more sales. However a competition should be simple to
 enter and should not run over a long period of time that contestants become bored and
forget to submit entries.

iii) Free Samples

These are free products given to consumers in stores by point of sale. Demonstrators
or are delivered to the door. Sometimes samples are attached to magazines.

iv) Self Liquidating offers

This refers to an offer, which is self supporting. A product is often offered free as an
incentive to buy the main product. For examples a three quarter bed being offered free
for buying a double bed. Such an offer brings extra sales so that the increase in sales
and profits (from selling the bed) will liquidate (pay off) the cost of the bargain offer
(three quarter bed).

(v) Multiple Packs

This is where small items are collectively packed or sold in multiples. For example
instead of buying two bath soaps one buys several as these will be packed in threes or
fours in single packs.

(vi) Banded Packs

This is where related or complimentary products are packed or sold together. For
example a tooth brush and tooth paste, ruler and a pen.

(vii) Price Cutting

This is where consumers are offered savings off the regular price of a product. For
example “Prices reduced by 50%”.

(viii) Point Of Purchase

This is where the product is presented and promoted in the location where it is sold.
Effective displays sells the product as they attract more attention and assist the
customer in making the final choice.

(b) Trade Promotions

These are aimed to encourage traders to hold larger stocks, carry stocks of new
products or to gain entry to new retail outlets. Trade promotions are:-

i) Buying allowance – This refers to a reduction on price on each pack or case of

products purchased during a period of time. This encourage traders to stock more.

ii) Advertising Allowance – This is used to compensate dealers for advertising a

manufacturer’s product. As OK Bazaars advertise products, producers should assist
OK Bazaars by offering advertising allowance as an incentive..

iii) Display allowance – This refers to offering incentives to dealers for carrying out
special displays of products. For example during the OK Grand Challenge various
special stands are designed for products from specific organisations, Olivine
Industries, Cairns Foods, Colcom, National Food etc.
iv) Free goods - This refers to offering extra cases of goods to middlemen to encourage
them to feature the producer products.

v) Push Money – Dealers or their sales force should be incentivised to push the
producers products and this may be done by offering them gifts or cash.
c) Sales Force Promotions- These are aimed at company ‘s own sales force and the
objective is to encourage support for a new product, encourage salesmen to prospect
for new customers or to stimulate sales in a slack period. Incentives will boost the
morale of the sales force. Sales force promotions are:-

(i) Sales Contests/Competition – As an incentive competitions among sales persons

are used to motivate them. For example sales persons may have the chance to win a
trip to Mauritius if they manage to sell certain amount of goods of a certain value.

ii) Periodic Conferences – regular meeting and conferences between Sales Managers
and sales people are a motivating factor as need and problems of sales people are
discussed and new sales techniques are learnt.

iii) Bonus Schemes - Performance related bonus schemes are an incentive and are aimed
at sales people for percentage increase achieved above sales products targets. Rewards
may be in cash or in kind.

3. PERSONAL SELLING

Definition - Personal selling is defined as one to one communications with a buyer,

which is made directly or over the phone or through other forms of electronic
communications.

Purpose – The purpose of personal selling is to change individual attitudes,

demonstrate the product, persuade, assist the potential buyer and deliver a package of
benefits to the buyer.

Objectives – Objectives of personal selling include:-

a) To change personal attitudes towards the product and establish conviction in the
mind of the would be purchaser.
b) To encourage and facilitate the actual purchase decision and action.
c) To reassure the customer that he/she has made the right decision to purchase the
product.

Steps in the Selling Process

i) Opening the Sale – One’s personal appearance, manners and behaviour and show of
respect create favourable initial responses from the prospective buyer. One’s opening
remarks are also important.

ii) Identifying customer needs and problems – The Sales person should identify needs,
wants, problems and requirements of the prospective buyer before they make an
attempt to sell the product.
iii) Presentation and Demonstration – having identified needs and problems of the
prospective buyer, the sales person should present an offer that best fit customer needs
and provide a solution to prospective customers problems. Product attribute and
benefits should be communicated to the prospective buyer.

i) Dealing with Customer Objections - During presentation the prospective buyer may
object to certain aspects about the offer. Such objections are an indication that the
prospect is not convinced. In dealing with objections the sales person should treat
them as requests for additional information and clarification. Objection handling
techniques should be used.

ii) Negotiating the terms of the sale – At this stage, negotiations on price, delivery,
credit terms, discounts and trade-in are done. However the discretional power to
negotiate depends largely on company policy. However negotiation becomes easier if
the seller knows competitor’s offers and buyer’s needs.

iii) Closing the Sale

This refers to asking for the order and the Sales person should take the initiative to
close the sale if the buyer does not ask for the product. Proper timing and use of the
appropriate closing techniques is therefore important.

iv) Follow-up
After the customer buys, there is need to follow-up and this is vital as this will
persuade customers to make repeat purchases. More importantly follow-up ensures
proper use of the product and thereby facilitates customer satisfaction.

Functions of the Sales Manager

(i) Setting sales objectives and strategies.
(ii) Recruiting and selection of sales people.
(iii) Motivating sales force.
(iv) Sales force organisation and this includes deciding on the size of the sales force,
territory design and planning.
(v) Training of the sales force.
(vi) Evaluation and controlling of sales activities and the sales force.
(vii) Preparing the sales budget.

4. PUBLIC RELATIONS AND PUBLICITY

Public Relations – Is defined as the deliberate planned and sustained effort to
establish and maintain a mutual understanding between an organisation and its
publics.
Purpose – The purpose of public relations is to present a positive image of the
organisation to publics such as shareholders, customers, government, employees,
suppliers etc and to promote understanding. Public Relations has a responsibility to
inform, educate and avoid unfavourable news coverage especially in times of crisis.
Public Relations should turn minds from a negative state to a positive state through
what is referred to as the Transfer Model.
TRANSFER MODEL

NEGATIVE STATE POSITIVE STATE

HOSTILITY SYMPATHY

PREJUDICE ACCEPTANCE

APATHY INTEREST

IGNORANCE KNOWLEDE

The transfer model illustrates the role of PR in times of disaster or crisis.

(i) In times of a crisis in an organisation, Hostility occurs in the various publics, which
may be a result of missing information. In such a case there is an urgent need to
satisfy the public’s desire for information so as to convert hostility to sympathy.
(ii) Converting prejudice into acceptance in a crisis situation is very important. The
situation may be handled well and communicated through effective PR, which lessens
prejudice.
(iii) Changing apathy to interest is also crucial in times of crisis. Apathy towards the
organisation develops and tactical and effective PR should change apathy to interest.
(iv) Changing ignorance to knowledge is of particular importance in a crisis to enable
publics to know exactly what has happened, how it has happened, where it happened,
whether it would happen again and the long term implications. The company should
speak with one voice and avoid conflicting statements.

Public Relations Techniques

As PR is a long term effort by the organisation to improve or sustain its image, various
techniques are used and these are as follows:-
(i) organised visits to the company
(ii) Sponsorship
(iii) Community projects
(iv) Company publication and this include annual reports
(v) Press releases
(vi) Community meetings

(b) Publicity
Publicity refers to information appearing in the media, which is concerned with
products / services, or the company and is secured as editorial rather than paid – for
space. Publicity is an effective communication tool as it lessens the effect of negative
news and is seen as a truthful and credible source of information.

Other Promotional Activities

a) SPONSORSHIP - Defined as financial patronage given to individuals, participants,

events, commercial TV and radio programmes and other activities by commercial
organisations. Sponsorship is an effective and significant technique where a company
decides to sponsor certain events. Marketers should give serious consideration to the
inclusion of sponsorship in the mix when deciding on the Integrated Marketing
communications. Typically sponsorships are directed towards sport, arts and culture,
music, education, environmental issues and other good causes. Examples are Madison
 sponsoring the soccer league, Net one sponsoring the Zimbabwe open golf
tournament, Jewel Bank sponsoring sports news on television etc.

Benefits of Sponsorship – The primary benefit from a sponsorship is brand building

where a company makes concerted efforts to build a strong brand. The benefits of a
strong brand are:
i) it reduces competition
ii) it increases customer retention
i) it creates a platform for other products, which can ride on the success of the strong
brand.

Purposes of Sponsorship – The purpose of sponsorship can be looked at from three

perspectives namely:-

i) Advertising – Sponsorship may be aimed directly at promotional purposes to raise

awareness levels in their products. For example when Econet Wireless sponsored live
coverage of the World Cup in 1998 and 2002 there was constant mentioning of the
sponsor and their products and this created a lot of awareness.

ii) Marketing - It may be a company’s marketing policy to associate a company’s

product or service with certain demographic groups by sponsoring activities which
interest them thereby positioning a product or brand by sponsoring an interest
associated with a certain specific market segment. For example Dairiboard (Pvt.) Ltd,
sponsoring athletics, Coca-Cola sponsoring “Coke on the beat” musical programme.

iii) Public Relations – Sponsoring may be directed at creating goodwill, establishing

good reputation and understanding, showing responsibility or providing a service.

b) DIRECT – RESPONSE DATABASE MARKETING

Definition
Direct - Response Marketing is defined as selling goods and services direct to
customers in response to orders produced by direct mail, catalogues, press, television
or other advertising. Direct Response Marketing goes direct to an identified person or
household and creates a direct exchange of information and response between two
parties.
Forms of Direct – Response Marketing
i) Telemarketing – This refers to using the telephone selling directly to customers.
Telemarketing saves time and money and is useful when the market is small or when
customers are in hard to reach places.
ii) Direct Mail – This involves single mailings that include letters, advertisements,
samples etc send directly to consumers. Direct mail is effective as it goes direct to the
intended target market and more importantly direct main adverts are read more that
those in mass media as newspapers, magazines, television or radio.
iii) Catalogue Marketing – A catalogue is a list of items or products by an organisation
and catalogue marketing refers to selling through catalogues. Catalogues can be
mailed to consumers, made available through newspapers or in shops. For example
Pelhams use catalogue marketing as they insert catalogues in newspapers.
iii) Television Marketing – This refers to advertising on television or giving information
about goods and services on television and then ask consumers to respond directly to
the company by phoning a given number. Television marketing takes two forms
 namely Direct Response Advertising where customers dial telephone number and
place orders after an advert and Home Shopping Channels where an entire television
station or program is dedicated to selling of goods and services.

Benefits of Direct – Response Marketing

Direct - Response Marketing entails buying and selling without the use of shops or retail
outlets and its benefits are:-
i) Shopping is made convenient – There is convenience to customers as they respond to
direct mail by placing orders and receiving products at home. It saves time as
customers do not leave their homes.
ii) The seller can build close and continuos relationships with each other through regular
mailing which update customers on the latest offers.
iii) There is privacy to the seller as competitors are not in a position to see the sellers
tactics and strategies.
There is high response rate as marketing efforts are directed to individuals. More
importantly Direct Response Marketing offers easy response measurement as results
are direct and immediate unlike when they buy from retailers.

(c) DATABASE MARKETING

A customer database is an organised set of data about individual customers or
prospects, which the company can use to sell products and services and maintain
customer relations. Insurance companies, building societies, producers maintain a
customer database. A customer database contains information about each customer.
Information categories contained in the customer database include:-

i) Basic information – name, address and telephone number.

ii) Personal details – age, gender, occupation, type of housing, income etc.
iii) Transaction data – frequency of purchase, time of purchase, credit cards, how and
when the customer pays.

Benefits of Database Marketing

A rich customer database contains vital information, which makes it possible for marketing
efforts to be directed to individuals. The benefits of such a marketing approach are as
follows:-
i) Locating good prospects – As information contained in the database shows frequency,
time, payment loyalty and value of business customers bring to the organisation, it is
easy to identify new opportunities and thereby achieve a competitive position in the
market.
ii) Increased understanding of customer needs from the information available in the
customer database. Marketers are in a position to monitor and understand
consumption patterns, resulting in them anticipating future customer needs.
iii) Improved quality of information flow for marketing planning. Marketers use the
information from a customer database for purpose of marketing planning and this
results in the formulation of effective tactics and strategies to achieve set objectives.
iv) More efficient development of the Marketing Mix for targeted segments. Detailed
information about customers will enable development of a tailored marketing mix to
suit each targeted segment.

Summary
Promotion is an integral and fundamental element of the Marketing Mix, which ensures
communication between an organisation and its customers and other relevant groups. For
marketers to be effective communicators they should know the communication process, that
is understanding how messages are conceived and transmitted from one source to another
party.

Promotions consists of Promotional Mix elements namely advertising, sales promotion,

personal selling, public relations and publicity. Advertising informs consumers about
products or services with a view to make them buy. Selection of the proper and suitable
media is important for advertising to be effective and marketers should understand
characteristics of each media. Measuring advertising effectiveness is important to ensure that
the organisation does not waste resources and to achieve this marketers use communication
effect research and sales effect research.

Sales promotions are incentives used to motivate buyers into action. The incentives are
targeted to consumers, traders and the sales force to induce them into action. Personal Selling
is another promotional mix element that provides face to face interaction between the seller
and the potential buyer. Public relations is also important at is ensures mutual understanding
between the organisation and its various publics.

However organisations also make use of other promotional activities such as sponsorship and
Direct – Response Marketing. The bottom line is that in developing an integrated promotional
programme marketers should give serious consideration to all promotional mix variables
namely:- advertising, sales promotion, personal selling, public relations and publicity,
sponsorship and Direct-Response Marketing.