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Marketing 101 – An Overview of Basic Marketing Concepts
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Marketing: is a social and managerial process by which individuals and groups obtain what they need and want through
creating, offering, and exchanging products of value with others. The central idea of marketing is of a matching of a
company’s capabilities and the wants of customers in order to achieve the goals of the firm. Marketing can also be defined as
the total system of activities designed to plan, price, promote and distribute want satisfying goods and services to markets.
MARKET
NEEDS OR
WANTS TO
SATISFY
WILLINGNESS
TO SPEND IT
people or
organizations
who have
MONEY TO SPEND
The Marketing Concept: is a business philosophy that regards customers’ wants satisfaction as being the economic and
social justification for a company’s existence. This concept rests on three fundamental beliefs:
♦ All customer planning and operations should be customer oriented
♦ The goal of companies should be profitable sales volume
♦ All marketing activities should be coordinated, within an organization
MARKETING
CONCEPT
CUSTOMER/
MARKET
ORIENTATION
COORDINATION
OF MARKETING
ACTIVITIES
PROFITABLE
SALES
VOLUME
“Marketing is so basic that it cannot be considered a separate function. It is the whole business seen from the point of view of
its final result, that is, from the customer’s point of view.” Peter Drucker
Needs,
Wants &
demands
PRODUCTS
Value, costs
& satisfaction
Exchange
transactions &
relationships
MARKETS
Marketing
&
Marketers
Difference between Marketing and Selling: In selling the company makes a product and uses sales techniques to sell
them. In marketing, the company finds out what the customer wants and then makes it.
FOCUS
Customer
needs & wants
MEANS
ENDS
Market
Segments
Marketing
Mix/Offer
Satisfied
Customer
Organisation
Goals
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Tracey Sernack-Chee Quee 2003
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Marketing 101 – An Overview of Basic Marketing Concepts
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Company
Capabilities &
Resources
Market
Needs and Wants
Market Segments
People
Facilities
Money
THE
OFFER
Product, Price,
Place, Promotion
Stages of Evolution of Marketing Management: Since the industrial revolution there have been three stages of
development, with a fourth emerging:
1. Product Orientation Stage – the company is oriented toward pushing production through. The function of Sales is to
sell the outputs of production. Up to 1930’s.
2. Sales orientation Stage – the “hard sell approach” – producing a better product had no impact if it was not sold. Sales
acquired its poor reputation during this period – post depression to 1960’s in Australia.
3. Marketing Orientation Stage – companies began directing efforts toward the customer and profitable sales volume
toward end of 1960’s. Marketing took place before products were developed, to see what products and features were
preferred by the customer.
4. Social responsibility and Human Orientation Stage – marketers must act in a socially acceptable manner in order for
their business to succeed or survive. External pressures such as consumer discontent, environmental concerns and
political and legal forces must be considered – a change from materialism to humanism in marketing of products and
services.
Production
orientation
Sales
orientation
Marketing
orientation
Social responsibility
& human orientation
Marketers must also be conscious of the effect their products may have over time. Companies must be willing to back up
their products if something happens in the future (e.g. Thalidomide, asbestos). Sometimes secondary customers are
unwittingly affected by the environmental hazards as a by-product of product manufacture (e.g. Chemical by products may
leak and affect the population surrounding the plant; air pollution as a result of petrochemical products etc). Marketers must
be aware of breadth and time considerations regarding their products.
Value Adding: Value should be added to the products and services that the organization produces, from each marketing
activity that takes place At all levels it is important that the activity is truly adding value; otherwise the marketing effort will
have been wasted and potential profits reduced.
The Marketing Environment: A variety of environmental forces affect marketing activities. Some of these are Internal - that
is within the company and controllable; others are External – that is outside the company, and uncontrollable by the
company, so they need to be accommodated within the marketing system.
♦
External Forces:
♦
♦
♦
Macro (broad) influences: social and cultural forces, demography, competition, political and legal forces and economic
conditions
Micro influences: producer/suppliers, marketing intermediaries (middlemen), customers and the market.
Internal Forces: production facilities, financial capability, human resources, company location, Research and
development capability and company image
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Tracey Sernack-Chee Quee 2003
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Marketing 101 – An Overview of Basic Marketing Concepts
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Demography
Producer
Suppliers
intermediaries
Producer
Suppliers
Economic
conditions
Competition
& Industry
structure
Social &
Cultural forces
Political
& Legal forces
intermediaries
A COMPANY’S MARKETING PROGRAM
Financial
Capability
Human
Resources
Company
Location
Technology
R&D
capability
the
market
CompanyIimag
e
Competitive Market structures: Four basic types of competitive structures exist:
♦
♦
♦
♦
Pure Competition – many small competitors, homogenous (nearly all the same) products, no control over price, easy entry into
industry
Monopolistic competition – many competitors, differentiated products, some control over price, easy entry into industry
Oligopoly – few competitors, usually large companies, homogenous or differentiated products, difficult entry into industry
Monopoly – no competitors, complete control over price, distribution etc
STRUCTURE
CHARACTERISTIC
Number of
Characteristics
Size of
competitors
Nature of
Product
Seller’s control
over price
Entry into
Industry
Pure Competition
Monopolistic
Competition
Oligopoly
Monopoly
very many
many
few
one
Small
varies
homogenous
differentiated
large
homogenous or
differentiated
none
some – depends on
degree of differentiation
some – but be careful
there are none
unique – no close
substitutes
complete – within
regulations
very easy
easy
difficult
very difficult
Marketing Research: the gathering and analysis of information relevant to a specific marketing problem or situation. Market
Research can be used in the study of advertising, Business Economics, Corporate Research, Product Research,
Measurement of Market Potential, determination of Market characteristics, and Sales Analysis. Both Quantitative
(measurable) and Qualitative (judgmental, opinionated) data may be gathered. Primary Data is gathered by the organization
that wants to use the data. Secondary Data is second hand data that has been originally gathered for another purpose. Data
is gathered from usually from a random sample; or sometimes a stratified or quota sample (a sample representing certain
characteristics of the population) of the target population. Methods of conducting market research can include:
♦
♦
♦
♦
Surveys: interview, questionnaire, telephone, mail, point of sale
Focus Groups:
Observation:
Experimenting: small scale test, such as the release of products, or another type of simulation that is appropriate for the
purpose
Procedure for conducting Market Research:
1.
2.
3.
4.
5.
Define the objective of the project
Conduct a situation analysis
Conduct an informal investigation
Is further investigation necessary? NoÖend. YesÖgo to 5
Plan and conduct a formal investigation
♦ Select sources of information
♦ Select method for gathering data
♦ Prepare pre data gathering forms
♦ Pretest the forms
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Marketing 101 – An Overview of Basic Marketing Concepts
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6.
7.
8.
♦ Plan the sample
♦ Collect the data
Analyze and interpret the data
Prepare a written report
Follow up the study
nDefine the objective of the project
END
NO
oConduct a Situational Analysis
pConduct an informal investigation
qIs further investigation necessary?
YES
rPLAN AND CONDUCT A FORMAL
INVESTIGATION
1. Select the sources of information
2. Select the methods of gathering data
3. Prepare data gathering instruments
4. Pre-test Questionnaires or other forms
5. Plan the sample
6. Collect the data
sAnalyse and Interpret
the Data
tPrepare Management
Report
uFollow up the Study
Marketing Information Systems (MkIS): determines what information is required, compiles and processes that information,
stores the information and allows it to be retrieved. It is both a management system, as well as a documentation system. A
good MkIS anticipates and prevents problems as well as solving them. It operates on a continuous basis, often in the form of
a managed Computer database.
Consumer Buying Motives: Customers buy certain products for many reasons. Dr A.H. Maslow maintained each person is
a ‘wanting’ person. When one series of ‘wants’ is satisfied, people look for something more. Maslow said people satisfy their
basic Physiological needs (eg. food and water) first, then their Safety and Security needs (eg. shelter, financial security, no
threat from danger). Then they will have Social needs (e.g. friendship, belonging), Esteem needs (e.g. recognition, being
valued), and Self-Actualization needs (self fulfillment). Maslow helps us understand the motivation of consumers in the
market. Products are often purchased to cater for these levels of need. The ways that consumers interpret and satisfy their
needs and wants also depends on:
♦
♦
♦
♦
♦
Age
Income
Climate
Occupation
Cultural Background
♦
♦
♦
♦
♦
Resource availability
Personal values
Affiliations
Goals
Lifestyle
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Marketing 101 – An Overview of Basic Marketing Concepts
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MASLOW’S HIERARCHY OF HUMAN NEEDS
Self Actualisation
Esteem
Social
Safety
Physiological
Logic gives a reason for customers to buy, Emotion gives the power to act. The real reasons for buying reflect the customer’s
needs and wants. Logical reasons for buying may include the feature benefits of the product itself, to cater for changed
circumstances, price, convenience, health or necessity. Emotional reasons for buying may include the desire to be distinctive
or to be recognized a desire for romance, a desire to imitate or a desire for adventure. Patronage motives are influenced by
customer policies, integrity, fashionability, quality, shopping atmosphere, assortment (variety of products), service and
customer amenities. Another major motivation for buying can be the stage in the life cycle. At different ages, we have
different priorities and different buying patterns as a result.
PEPUP theory: this theory of classifying consumer needs and wants identifies five motives for buying:
1.
2.
3.
4.
5.
Pleasure and comfort: for a loved one or yourself
Economy
Pride of ownership
Utility and convenience
Protection
The Market: Not a place but a group of potential customers. It is heterogeneous – that is very diverse.
Market Segmentation: the process of dividing the whole heterogeneous market into several segments each of which tends
to be homogenous in all significant aspects. The concept of market segmentation is based on the principle that one segment
must be sufficiently different to other segments, and must be sufficiently large to justify creating products and services, as
well as being accessible. It is the opposite of Market Aggregation where the organization treats the whole market as a unit –
mass marketing. Market segmentation is a customer-oriented philosophy – we first identify the needs of the customer within
the sub market and then satisfy those needs.
Segmentation bases for consumer markets:
♦ Geographic: region, city size, urban-rural, climate
♦ Demographic: Age, sex, Family life cycle, Education, Occupation, Religion, Ethnic background, Income
♦ Psychographic: Social class, personality, Life style
♦ Behaviour toward product: benefits desired, usage rate
Many market segmentation models and theories exist. Some examples include the “Australian Values Segments” formulated
by Roy Morgan/Ogilvy and Mathers in the late 1980’s. Market segmentation can be an important part of the marketing
strategy. There are several approaches:
♦ Single segment concentration Strategy: selecting as the target market one homogenous segment from within
the total market. One marketing mix is then developed to reach this single segment
♦ Multiple segmentation Strategy: two or more different groups of potential customers are identified as target
market segments
Target Markets: are the segments that will act as the focus for the marketing effort.
Niche: or corner of the market – a gap of unsatisfied demand. Usually there is little or no competition in the niche. Potentially
a company can become the sole supplier for niche products and acquire a competitive advantage.
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Marketing 101 – An Overview of Basic Marketing Concepts
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Consumer Markets: buy and use products for their own personal or household use.
♦
Market Segmentation
This simple model divided the fashion marketplace into three distinct customer segments
Commodity
Mainstream
Leading Edge
PRICE
Sensitive
Important
Sensitive
BRAND
Elastic
Possible Substitution
Sensitive
PURCHASE
FREQUENCY
High
Regular
Low
MOTIVATION
Reflects needs
Balances quality & value
Self Indulgent
MERCHANDISE
TYPE
Basic
Good taste
Innovative
Industrial/Business Users or markets: are made up of organizations that buy products for three main reasons:
♦
♦
♦
to use in the operation of their business
as materials to be used to manufacture products
to resell to other industrial users or consumers
Industrial and Business markets can include:
♦
♦
♦
♦
the farm/agricultural market
the reseller market
the government market
non profit business market-community groups, charities
In industrial markets demand for products is derived from the demand for consumer products in which the industrial item is
used. Demand is relatively inelastic (demand changes very little with changes in price), and widely fluctuating – subject to
upturns and downturns for no apparent reason. Unlike consumers, buyers in this market are usually exceptionally
knowledgeable and demanding – often insisting on ISO9000 Quality System accreditation etc Purchasing is often done using
a Tender system , where suppliers compete in order to supply goods for customers. The benefit of selling to business or
industrial customers rests in their buying power.
THE MARKETING MIX or the Four “P”s of Marketing
♦
♦
♦
♦
Product
Price
Place (Distribution)
Promotion
PRODUCT: A set of tangible and intangible attributes that provide want satisfaction benefits to a buyer in an exchange.
Benefits can include colour, price, brand, packaging, product warranty and the reputation and services of the manufacturer
and the middleman. A product may be physical goods, an idea, a place, an organization or even a person.
Formal, Core and Augmented Products: A Formal product is the physical object purchased – the goods or service. A Core
product is the essential benefits being offered – a mix of functional (e.g. value, economy, safety, versatility etc) and emotional
(e.g. exclusivity, status, individuality, fashionability etc) benefits. The Augmented product is the totality of benefits the
customer receives, including image, after sales service etc
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Marketing 101 – An Overview of Basic Marketing Concepts
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Physical characteristics of
goods
Price
Seller’s service
Brand
Seller’s reputation
Packaging
Colour
Product Warranty
Product Mix or Assortment: the full list of products offered for sale by a company.
Breadth and Depth: Breadth is the number and type of different lines produced or sold. Depth is the assortment within each
product line.
Product Development: the technical activities of product research, engineering and design. Can also include testing and
Quality Assurance.
Product Differentiation: a product strategy wherein a company promotes the differences between its products and the
products of its competitors.
Product Life Cycle: The stages a product goes through from its introduction, through its growth and maturity, to its eventual
decline and death (withdrawal from the market and deletion from the product range). Products become obsolete due to
changes in taste – something new has replaced it, or through innovation and the development of a superior substitute for the
product.
Product Positioning: The decisions and activities involved in developing the intended image (in the customer’s mind) for a
product in relation to its competitor products. Positioning strategies can include:
♦
♦
♦
♦
♦
Positioning in relation to a competitor
Positioning in relation to a target market-products are targeted to specific markets
Positioning in relation to a product class- associating (or disassociating) a product with others in the same class or group e.g.
milk is healthier than cola within the drink class.
Positioning by price and quality.
Product Life Cycle
Volume or Sales
Saturation Point
Stage 1
Introduction
Stage 2
Rise
Stage 3
Maturity
Stage 4
Decline
Stage 5
Obsolete
Time
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Marketing 101 – An Overview of Basic Marketing Concepts
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Volume or Sales
Saturation Point
Stage 1
Introduction
Stage 2
Rise
Stage 3
Maturity
Time
Volume or Sales
Saturation Point
Time
Product Portfolio: collection of products produced. These may be classified into ‘stars’, ‘cash cows’, ‘dogs’ and ‘question
marks’.
High
33
Medium
67
?
Low
MARKET ATTRACTIVENESS
100
Product Portfolio Analysis
Low
33
Medium
67
High
100
RELATIVE COMPETITIVE POSITION
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Brands: A brand is a customer reference point. It is composed of a word or symbol, smell, special logo or design or some
combination of these elements that is intended to identify the goods or services of one seller or groups of sellers. The
purpose of a brand is to promote a product or product groups, maintain a consistency in quality and output, and to add
perceived value and benefit for the customer. Brands selection indicates the customer’s desired image, quality standards,
status, lifestyle, values and attitudes. Good brands are consistent and reliable, have distinctive characteristics, are adaptable,
the name is easy to spell, recognize and remember.
Brand Marks and Trade Marks: A Brand Mark is the part of the brand that appears in the form of a symbol or design, in
distinctive colouring or lettering e.g. Coca-Cola lettering or McDonald’s golden arches. When a Brand mark becomes
registered it becomes a Trade Mark.
Product Diversification or Brand Diversification: One approach is when an established brand becomes associated with
another group of products, often manufactured by a Licensee for the established brand. The Licensee pays a fee for the use
of the brand name on products that they manufacture. Pierre Cardin is the most successful Licensee with licenses in over
100 countries, with over 400 product licenses in the early 1990’s.
Franchise System: wherein one organization (the franchisor) grants a number of independent operators (franchisees) the
right to sell the franchisor’s products or services, in exchange for meeting certain conditions laid down by the franchisor –
including payment of royalties. Examples of franchised businesses include McDonalds, KFC, Wendy’s etc.
PLACE: Where the customer can obtain the product or service. Usually used in reference to Distribution.
Place Utility: the utility (convenience, easiness) created by having a product available at the location where the customer
wants it
DISTRIBUTION: The channel structure (institutions and activities) used to transfer products and services from an
organization to its market. Channels of Distribution can include the producerÖwholesalerÖretailer;
producerÖagentÖretailer etc. Export is also a recognized channel of distribution.
EXAMPLE: CHANNELS OF DISTRIBUTION
Grower or
Source
Manufacturer
Processor
Wholesaler
Retailer
Consumer
Physical Distribution: activities involved in the flow of products as they move physically from producer to user.
Distribution Centre: A large warehousing centre that implements a company’s inventories location strategy
Role of the Middleman: they serve as purchasing agents for customers, and sales specialists for producers. They provide
financial services for suppliers and customers, storage facilities, bulk breaking activities and market information. The
middleman e.g. agent or wholesaler, disperses the product assortment to consumers or industrial buyers.
Dispersion: in distribution, the middleman’s activities that distribute the correct amount of product to the market.
Retailing: the business of buying/assembling merchandise from a variety of sources (or one source) and assembling it in
convenient locations for resale to the ultimate consumers. Types of retailers include:
♦
♦
♦
♦
Speciality Shops
Department stores
Mass Merchandisers
Discount stores
Classification of Retailers:
♦
♦
By Sales volume
By product lines carried
Future Trends in Retailing:
♦
♦
♦
More Discount Stores
More Warehouse stores
More Franchising
♦
♦
♦
♦
Convenience stores
Supermarkets
Warehouse Stores
Hypermarkets
♦
♦
By form of ownership
By method of operation
♦
♦
♦
Increased in home & interactive shopping
Increased home based enterprises
Interactive distribution
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Marketing 101 – An Overview of Basic Marketing Concepts
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Top Ten Retailer Attributes:
♦
♦
♦
♦
♦
Friendly and courteous
Offers value for money
Good quality merchandise
Good reputation
Wide range of merchandise
♦
♦
♦
♦
♦
Conveniently located to home
Offers refunds
Pleasant atmosphere
Staff have good product knowledge
Clearly priced merchandise
Sales Force: the personnel and middlemen who perform sales. Sales people need to know and identify with the company;
know the products; know the competitor’s products; know the customers; know about freight and distribution; know how to
make effective presentations; and understand their role and responsibilities.
Sales Forecasting: Forecasting future demand for products. Methods used include survey of buyer intentions, sales force
opinions, expert opinions, Market test, Time series analysis and Statistical Demand analysis.
Direct Selling: A vague term that may mean selling directly from producer to consumer without any middlemen, or from
producer to retailer without middlemen.
The Five ‘P’s of Selling:
♦
♦
♦
♦
♦
Preparation
Prospecting
Pre-approach
Presentation
Post Sale service
THE FIVE ‘P’s OF SELLING
Preparation
Product
Market
Competition
Techniques
Prospecting
Profiles
Leads
Records
Pre approach
Information
Habits
Preferences
Presentation
AIDA
Attention
Interest
Desire
Action
Post sale
activities
Service
Service
Service
PRICE: What you pay for what you get. Value expressed in dollars and cents. The main goals in pricing are to maximize
profit, to achieve return on investment, to increase sales, to maintain or increase market share, to stabilize prices and meet
the competitor’s prices. External factors influencing price include the nature of the competition, demand for products, the
nature of the product, and Government Policy and Legislation. Internal factors include the ability or otherwise to control costs,
the product range itself, and the importance of price within the marketing mix – price may not be an important factor.
Elasticity of Demand: We say that demand is elastic if reducing the overall price causes an increase in revenue i.e. more
sales; and raising the unit price causes a decrease in revenue i.e. less sales. Demand is Inelastic when a price cut causes
total dollar sales volume to decline or a price rise results in an increase in total revenue – i.e. price is not an issue – the
product is still in demand o or not in demand.
Fixed Costs: are elements such as rent, executive salaries or land tax that remains constant regardless of the amount of
goods produced.
Variable Costs: are elements such as labour or material cost that is related directly to production – i.e. if production
increases variable costs increase and vice versa.
Marginal Cost: is the cost of producing and selling just one more unit; it is the cost of the last unit produced. Usually
marginal cost of that unit is equal to the variable cost. This method can only be applied successfully once the Break Even
point has been reached, and there is surplus production capacity.
Break Even Point: The point at which total costs equals revenue. There is neither profit nor loss at this point. This technique
can assist marketers to set prices – the higher the selling price the sooner BEP will be reached. Graphs can be drawn which
show graphically the effect of different prices in the time taken to reach BEP.
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BEP Units = total fixed costs
Contribution margin
BEP $ = BEP units x selling price
(Selling Price – average Variable Cost)
Contribution Margin Approach: an accounting approach in which only the direct expenses are allocated to the marketing
units being studied. A units' gross margin minus its direct costs equal that units’ contribution toward covering the company’s
expenses.
Cost of Goods Sold: a major section in an operating statement, showing calculations to determine the cost of products sold
during the period covered by the statement.
Examples of Pricing Strategies:
♦
♦
♦
♦
♦
♦
♦
♦
♦
♦
♦
Cost Plus Pricing: A major method of price determination. The price of a unit of product is set at a level equal to the unit’s total cost
plus the desired profit on the unit.
Leader pricing or Loss Leaders: temporary price cuts in well known products. The price cut is made with the idea that these
specials will attract customers to the store.
Market Based pricing: market research is used to find the optimum (best) price for a product, and then meets this cost through cost
containment, product design and engineering methods.
Odd Pricing: or Psychological pricing - pricing at odd amounts e.g. $4.99 instead of $5 in the belief that seemingly lower prices will
result in a greater sales volume.
Price Lining: A retail pricing strategy whereby a store selects a limited number of prices and sells each item only at one of those
prices.
Skimming: Setting a high price in the market for the product because it is new or unique.
Penetration Pricing: a low price is set to reach the mass market quickly
One Price and Flexible Price: under a one-price strategy, a seller charges the same price to all similar customers who buy similar
quantities of a product. Under a flexible pricing (or variable pricing) strategy the price is set by buyer/seller bargaining.
Recommended Retail Price: used when manufacturers want some control over the prices of their product at retail. This can only
ever be suggested, as price maintenance by manufacturers is illegal.
Geographic Pricing Strategy: Pricing related to freight cost to deliver goods:
♦ F.O.B. price free on board the vessel or conveyance (customer pays freight)
♦ Uniform delivered price – same price to everywhere in the agreed area
♦ Zone delivered pricing – same price everywhere within a defined zone or area
♦ Freight absorption pricing – freight included in price e.g. C.I.F. cartage, insurance and freight are included in price
Discount Price: a reduction from the list price. Usually offered for buying in volume, paying in cash, early payment, or performing
services for the producer or seller (Trade Discounts).
PROMOTION: The elements in organizations’ marketing mix are used to inform and persuade the market regarding the
organizations products and services. The purpose of promotion is to change the location and shape of the demand curve for
a company’s products. Promotion conveys information about product availability and benefits, and is a powerful imagebuilding tool.
Promotional Mix
Advertising
Personal selling
Sales promotion
Public relations
Publicity
•
•
•
Marketing Mix
PRODUCT
PRICE
PLACE
PROMOTION
TARGET
MARKET
Promotional Mix: the combination of elements that constitute the promotion ingredients in an organizations’ marketing
mix.
Promotional Allowance: A price reduction granted by the seller as payment for promotional services rendered by the
buyer.
Promotional Appropriation: promotional activities are usually budgeted as current operating expenses. Methods of
determining finance appropriation for promotion include:
♦
♦
♦
♦
As a percentage of sales
Task method – decide what tasks the program must accomplish then determine what that will cost
Use of all available funds
Follow the competition – match what competitors spend on promotion
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•
•
“Push” Strategy: producer directs its promotion at middlemen that are the next link forward in Distribution Channels.
“Pull” Strategy: Aiming product promotion at end users so that they will ask the middlemen for the products.
Promotional Tools: Generally there are two broad types:
♦
♦
Institutional Tools – concerned with developing an overall favourable image of the company or product. Tend to be informative rather
than persuasive; lack a direct sales objective
Competitive Tools – persuasive, having a direct sales impact e.g., bridal registers, trade exhibits, catalogues and displays.
Advertising: the activities involved in presenting a paid, sponsor identified non-personal message about an organization and
its products, services and ideas. An Advertisement is the message that is disseminated.
Advertising media: These include Outdoor and transport, cinema, press (Newspapers and magazines), television, radio,
classified directories and electronic media such as the Internet. Considerations in selecting the appropriate media include:
•
•
•
Objective of the campaign
Media circulation to audience
Requirements of the message
•
•
Timing and location
Cost of the media
The Campaign Concept: a campaign is a coordinated series of promotional efforts built around a single theme (focus, idea,
concept), and designed to reach a predetermined goal. Goals can include publicity and increased sales. Themes must be
consistent with what will appeal to the customer – their motives, habits and preferences.
Public Relations and Publicity: PR is a planned effort by an organization to influence some group’s attitude to that
organization. Publicity is non-personal promotion that is not paid for by the organization benefiting from it.
Strategic Marketing Planning: drawing from the past and from market research in order to determine strategies for the
future. Planning can be short term, or long term. Strategic Company Planning sets the organizations long-term goals and
broad strategies. Takes finance, production capability. Labour needs, R & D, and marketing abilities. The Strategic Business
Planning Unit (SBU) exists in major corporations to facilitate this task. Planning often depends on Sales Forecasting
projections. Methods include study of the Market Factor and Market Index, Market Potential and Sales Potential. Marketing
Planning must then be completed so that further, individual plans can then be set for each other department. Most
organizations have a desire to grow – to increase revenue and profits. In these cases it has two paths – keep doing what it’s
doing now – only better; or find new products and/or markets.
The Strategic Marketing Planning process is as follows:
♦
♦
♦
♦
♦
♦
Analyze the situation – where are we and where are we going
Determine the objectives – goals should be consistent and realistic
Select and measure target markets – identify present and potential customers
Design marketing mix strategies and tactic – how do we get there?
Prepare annual marketing plan – the ‘how to do it ‘ guide
Implement and Evaluate plan – do it and check it to see if it worked
Marketing Strategies:
♦
♦
♦
♦
Market Penetration Strategy: try to sell more of present products to present markets.
Market Development Strategy: company continues to sell existing products, but in new markets.
Product Development Strategy: the organization intends to develop new products to sell to existing customers.
Diversification: a growth strategy that involves adding new, often unfamiliar products to be sold to new markets. Eg Cadburys have
diversified into biscuits and ice creams.
•
Market Factor and Market Index: a market factor exists in a market, can be measured quantitatively and is related to
demand for a product or service. A market index is a market factor expressed as a percentage.
Market Potential and Sales Potential: Market potential is the total expected sales for a product by all sellers within a
stated market during a defined period. Sales potential is the share of market potential that an individual company hopes
to achieve.
Market Share: One Company’s percentage share of the total industry sales in a given market
•
•
The Marketing Audit: a systematic, comprehensive, periodic review and evaluation of the marketing function in an
organization – its marketing goals, strategies and performance, organization, personnel and procedures. What happened
and why? Were goals reached? Was market share increased? What was the cost in relation to the benefits e.g. increased
sales. The information gained should be used to guide future activities e.g. territorial and product decisions can be made on
the basis of the Marketing Audit.
___________________________________________________________________________________________________
Tracey Sernack-Chee Quee 2003
Page 12
SALES AND MARKETING - Reference & reading list
The Small Business Handbook
BRW Business Library
Information Australia, Melbourne, 1998
Who moved my cheese
by Spencer Johnson, Kenneth H. Blanchard
Putnam
Fundamentals of Marketing
By William J. Stanton, Kenneth E. Miller,
Roger A. Layton, Peter Rix
Mc Graw Hill Book Co, Sydney. Latest
Edition
TAFE Library 658.8 STAN
Generations – Baby boomers, their parents
and their children
Hugh Mackay
Pan McMillan, 1998
Marketing In Australia
by Kotler, Chandler, Gibbs and McColl
Prentice Hall Australia 1989 or latest edition
TAFE Library 658.800994 MARK
Strategic Marketing Management
by Wilson, Gilligan and Pearson
Butterworth Heinemann, Oxford 1992 or
latest edition
TAFE Library 858.802 WILS
Strategic Marketing Planning - 2
(or Latest edition)
Malcolm Mc Donald
nd
Edition
Australian Marketing Dictionary
by Don Bradmore
Australian Print Group, Vic 1990 or latest
edition
TAFE Library 658.800994 BRAD
Practical Marketing in Australia
by Peter November
John Wiley and Sons, Qld, 1984 or latest
edition
TAFE Library 658.800 NOVE
Chaos Marketing
How to win in a turbulent world
Torsten H Nilson
Relationship Marketing
Regis McKenna
Influence
Robert Cialdini
Maverick
Ricardo Semler
The Age of Unreason
Charles Handy
Global Paradox
John Naisbitt
Managing in Australia
Frank Blount & Bob Joss
The Roaring 2000’s
Harry Dent
Five Frogs on A Log
Mark Feldman & Michael Spratt
Secrets of Successful Marketing
by Neil Shoebridge
The BRW Library, The Text Publishing Co,
Melbourne 1993 or latest edition
TAFE Library 658.8 SHOE
Fashion Merchandising and Marketing
by Marian H. Jernigan and Cynthia R.
Easterling
MacMillan, New York, 1990
Fashion Merchandising - an Introduction
5th edition (or latest edition)
by Elaine Stone
McGraw Hill, U.S.A., 1990
Clicking - 10 trends to future fit your life,
your work, and your business
Faith Popcorn, with Lys Marigold
Harper Collins, London 1996
The E-Myth Manager - Why Management
Doesn't Work--and What to Do about It
Michael Gerber
1st Harper Perennial, April 1999
Tracey Sernack-Chee Quee 2003
Page 13