MARKETING

Marketing is the process of planning and executing the conception, pricing,

promotion and distribution of ideas, goods and serices to create exchanges that
satisf! indiidual and organisational ob"ecties#
These definitions reveal the four main features of marketing. Marketing:
Involves a wide range of activities
Is directed at a wide range of goods, services and ideas
Stresses the importance of satisfying exchanges that is, something in return
Is not limited to the activities of usinesses
R$%E $& MARKETING
! Strategic role of marketing goods and services
Strategic role of a usiness is to translate usiness goals into reality" a common goal of
usiness is profit maximisation.
#usiness marketing provides the consumers with:
' (hoice
$ll usiness work in a competitive environment, in order to attract consumers they must
differentiate their product from similar products from other usiness. This can occur in
relation to product speeches, pricing, strategies, or promotional activity. This is known as the
competitive advantage, this provides the consumers with choices.
' Emplo!ment
To provide a product to consumers usiness must employ laours to consist the creation of
the product, to research innovative method of improving product and to promote and sell
products. Marketing is therefore a source of employment in $ustralia.
' )tandard of %iing
#usiness market and targets products that improves one%s lifestyle. &esearch and
development has played an important role in improving products, which improves the 'uality
of life. This also provides the usiness with continuous income stream. (.g. Moile
Technology.

'*rand A+areness
)ne of the main goals of a usiness is to increase the rand visiility. This is usually
achieved through strong marketing campaigns and advertisement.
*ithin the usiness the main goal is:
' ,rofit maximisation
*hen the usiness is ale to increase its sales it will e ale to also increase its profit. +rofit
maximisation is the main goal of all usiness
! Interdependence with other key usiness functions
The interdependence of marketing and other key usiness is how marketing is integrated
into the aspect of usiness.
$peration Sales prediction of the marketing will predict
the volume of products made and can lead to
changes in the existing product in process. It
can also affect the ordering of supplies
needed in the production process.
&inance The sales and profit forecast from marketing
are used to prepare financial udgets and
can provide a reason for orrowing money.
This marketing forecast can also e used to
set up a system of financial controls within
the usiness.
-uman Relation Marketing determines the volume and the
'uality demanded for a product this directly
effects the numer and result in a real
location of test of existing staff
! +roduction, selling, marketing approaches
In the past, usinesses tend to concentrate on a single element of marketing mix, as in the
production and selling approaches. Today%s usiness approaches marketing as a
comination of all elements of the marketing mix.
,roduction approach: ,-./ 0 ,1./ 2 *here a usiness focused on the production side of
good and services
)elling Approach: ,1./ 0 ,13/ 2 *here the importance of selling and promotion of goods
and services ecame more important
Marketing $rientation: ,13/ 2 ,1-/ 2*here the usiness finds out the customers% needs
and wants and approach to selling where all the elements of marketing mix are considered.
! Types of markets
Type of Market 4efinition
Market $ group of individuals or organisations need
or want products, have money to produce
them and are ale to and willing to spend it.
&esource Market *here the sales of raw material used in the
production process occurs
Industrial Market *here goods used in the production are
traded
Intermediate Market *here the retail usinesses purchase
products that have een produced y other
organisations
5onsumer Market *here usinesses sell their product directly
to the costumers
Mass Market The market where the products are aimed at
all consumers irrespective of their gender,
age, income or residential location
Market Segment $n area of particular market on which the
usiness chose to focus
6iche Market $ smaller and specialised section of a
market segment
IN&%.EN(E) IN MARKETING
! 7actors influencing customer choice
2 +sychological
These influences within an individual affect his or her uying ehaviour.
,erception2 +erception is the process through which people select organise and
interpret information to create meaning.
Moties2 Motives is the reason that makes an individual to do something
Attitude2 $n attitude is a person%s overall feelings aout an o8ect or activity
,ersonalit! and self'image' $n individual%s personality is the collection of all the
ehaviour and characteristics that make up that person. Self2Image is how the
individual view themselves
%earning: 9earning refers to the change in an individual%s ehaviour caused y
information and experiences.
2 Sociocultural
These influences are forces exerted y other people and groups that affect individual uying
ehaviour.
)ocial (lass2 Social class refers to a person%s relative rank in the society, ased on
his or her education, income and occupation.
(ulture and )ubculture2 5ulture is the learned values, eliefs, ehaviour. 5ulture
influences our uying ehaviour ecause it infiltrates all that we do in our everyday
life.
&amil! and Roles2 :roups of people with whom a person closely identifies, adopting
their attitudes, values and eliefs.
2 (conomic
(conomic forces have an enormous impact on oth usinesses and customers. They
influence a usiness%s capacity to compete and a customer%s willingness and aility to
spend.
*oom' The oom period of unemployment and high incomes.
Recession' The recession period is when the income drops dramatically.
2 :overnment
+olicies directly or indirectly influence usiness activity and customers% spending
haits
9aws such as the 5ompetition and 5onsumer $ct ./,/ ;5wlth<, Sale of :oods $ct
,1.= ;6S*< and the 7air Trading $ct ,1-> ;6S*< influence marketing decisions.
! 5onsumer laws
#oth federal and state government has introduced consumer laws with the aim protecting
the rights of the consumers and clarifying the responsiilities of a usiness.
The $ustralian 5onsumer 9aw commenced on the ,st of ?anuary ./,, and is a single
governing consumer law that applies to all $ustralian consumer and the usinesses. The full
text of the competition and consumer $ct ./,/, which protects the consumers usiness,
practices.
0 4eceptive and misleading advertising
(ven though deceptive and misleading advertisement is illegal, it is still used y some
usiness.
$ deceptive and misleading advertisement consists of:
2 7ine +rint
2 #efore and $fter $dvertisements
2 Tests and surveys
2 5ountry of origin
2 +ackaging
2 Special )ffer
The two most common type of misleading advertisement is *ait and )+itch adertisement
and dishonest adertisement. #ait and Switch advertisement is when a few products are
at reduced price and therefore enticing prices to attract consumers, and 4ishonest
advertisement is when a usiness uses words that are deceptive or claims that the products
has a 'uality ut does not.
0 +rice discrimination
+rice discrimination is the setting of different prices for a product in separate market. This
can e cause of two reasons:
,. 4ifferent location
.. +roduct differentiation within one market
0 Implied conditions
Implied 5onditions are the unspoken and unwritten terms of the contract.
0 *arranties
$ll usinesses have a certain oligation with regards to the product they sell. $ warranty
promises y the usiness to repair or replace any faulty products.
! (thical
There are many ethical issues associated with marketing some of these include:
5reation of 6eeds: Materialism. 5ritics of products presumption feel that most
usinesses, especially large usinesses use promotional strategies to persuade and
manipulate customers to uy whatever the firm wants to sell.
Stereotyping males and females: That is, female is constantly seen as cooking and
cleaning while the male is watching sports and drinking eer.
The use of sex to sell products: $dvertisers use sex portrayed images to appeal to
the costumers that the product would increase their attractiveness and charm of the
user. These ads have sutle and persuasive impact.
+roduct +lacement: The inclusive of advertisement in entertainment. It is often sutle
and critics 'uestion if this type of advertisement is ethical. #ecause of the fact most
costumers are not aware that the product is actually eing advertised. It lurs the line
etween advertisement and entertainment.
2 Truth, accuracy and in advertising
The main unethical marketing practices include untruth due to:
' (oncealed &acts: +ieces of information purposely omitted.
' Exaggerating claims/ &eferred to as puffery2 cannot e proved. 7or examples a product
eing compared to another and the usiness cannot prove what has een compared.
' 0ogue )tatement/ Statements that use words that the consumer assumes the
advertisement intends, for e.g. @this is will help reduce wrinklesA
' Inasion of ,riac!/ The collection of data y tracking we users and using this
information to target them with advertising.
2 :ood Taste in $dvertising
*hat is considered to e a good taste is highly su8ective. Some consumers may e
regarded an advertisement as offensive, while others view them inoffensive.
The $#S ;$ustralian #ureau Standards< note is to ensure that acceptale advertising
standards are followed. This is administrated through a system of self regulation which
some argue is ineffective, as the $#S lacks the authority to enforce these standards leading
to the temptation y some to ignore industry estalishment guidelines.
2 +roducts that may damage health
The federal and state government have sought to restrict the provision of various goods and
services that may act as a health determent to the consumer, without applying a an of their
sales. These goods and services are often referred to as Bsin% goods, ecause in essence,
they are ad for us. (xample includes sales of cigarettes and alcohol, restriction on
toaccos, entries of casinos.
There are also concerns aout the marketing of certain products to children. These can the
advertisement of 8unk food.
2 (ngaging in fair competition
#usiness across $ustralia operates highly competitive environments which can lead to some
usiness engaging in unfair marketing strategy in order to increase their marketing share.
7rom a 9egal perspective, it is the role of the $ustralian 5ompetition and consumer
commission to regulate usiness ehaviour includes:
2,rice &ixing: #etween two or more ma8or competition in the market, comine to set a high
price with an aim of reducing competition.
' Misleading Adertisement: regarding the product of a competitor
' %ong'term loss leader/ price strategy y underrating smaller competitors in the short
term, ringing the smaller usinesses to engage to a price war.
2 Sugging
$ disguised marketing process that uses general 'uestions in a survey or 'uestionaries to
determine the interest and needs of the consumers. $nd then offer the consumer a product
that the usiness elieves cater to the consumers needs.
Selling under the :uidelines of Survey ;research<, the ethical issue here is if the consumer is
aware of the usiness attempting to promote and sell their product. Sugging is regarded as
unethical as the consumers are not aware that they have een encouraged to uy the
product which the usiness tends to sell.
MARKETING ,R$(E))
$ Marketing +lan
+lanning is important to a usiness ecause it allows it to examine its current position within
the marketing consider opportunities to strengthen that position and determine the most
effective method of implementing the re'uired change.
$ marketing plan may e developed y the marketing department of a usiness, although
smaller usiness may outsource this activity and the employ services of a marketing firm.
The Marketing process involves investigating the common elements involved in developing a
marketing plan. These elements exist in all marketing plan regardless of the usiness%s siCe,
activity or legal structure.
The (lements of a Marketing +lan ;(.SM(I4I<
! Situational analysis
S*)T is the strengths, weaknesses, opportunities and threats of a usiness. 5hanges in
the external environment can dramatically alter the course of a usiness. 7or this reason,
usinesses constantly monitor these changes, looking for opportunities to exploit and any
threats to avoid. The internal forces of the usiness are operated completely y the
usiness, and it is the usinesses duty to manage the strength and the weakness of the
usiness.
0 S*)T, product life cycle
$ product life cycle consists of the stages a product passes through: Introduction, growth,
maturity and decline.
Introduction stage
2 +roduct rand and reliaility are estalished
2 +rice is often lower than the competitors in order to gain market foothold
2 +romotion directed at early uyers and users occurs, and communications seek to
educate potential customers aout the merits of the new product.
2 4istriution is selective, which enales consumers to gradually form an acceptance of
the product.
:rowth Stage
2 +roduct 'uality is maintained and improved and support services may e added.
2 +rice per unit of production is maintained as the firm en8oys increased consumer
demand and a growing market share.
2 +romotion now seeks a wider audience.
2 4istriution channels are increased as the product ecomes more popular.
Maturity Stage
2 +roduct features and packaging try to differentiate the product from those of
competitors.
2 +rice may need to e ad8usted downwards to hold off competitors and maintain market
share.
2 +romotion continues to suggest the product is tried and true it%s still the est.
2 4istriution incentives may need to e offered to encourage preference over rival
products.
4ecline Stage
2 +roduct maintained with some improvements or re8uvenation. 5ut the losses y selling it
to another usiness.
2 +rice is reduced to sell the remaining stock.
2 +romotion discontinued.
2 4istriution channels reduced and product offered to a loyal segment of the market only.
! Market research
Market research is the process of systematically collecting, recording and analysing
information concerning a specific marketing prolem.
There are two kinds of
4ata: +rimary and Secondary.
+rimary are facts and figures collected from original sourced for the purpose of the specific
research prolem, for example surveys and focus groups, as for Secondary sources are
7acts and figures collected y some other person or organisations, for example research
reports and $#S.
! estalishing market o8ectives
Marketing o8ectives are the realistic and measurale goals to e achieved through the
marketing +lan. The three common marketing o8ectives include:
2 Increasing the market share
2 (xpanding the product range
2 Maximising costumer service
! identifying target markets
$ target market is a group of present and potential customers to which the usiness wish to
sell their products to. $ usiness need to e ale to identify their target market so that they
are aware of the needs and wants of their targeted group. $ usiness can choose:
2 Mass Marketing approach: *here it is a large range of consumers
2 Market segmentation: *hen the market is divided into groups of people who share the
same characteristics
2 6iche Market $pproach: 7or specific needs.
! developing marketing strategies
+roduct
The usiness need to e ale to decide on the products design, laelling, rand
name etc. 5ustomers will uy products that not only satisfy their needs ut also
provide them with intangile enefits such as feeling security, prestige,
satisfaction or influence.
+rice
#usiness need to e ale to settle the right price for the product it is selling.
*hen the price is too cheap, the costumer would consider it to e a low 'uality
product as if the price was too high the costumer would consider it to e too pricy
for such a product.
+romotion
+romotion strategies are detailed methods used y the usiness to inform,
persuade and remind the costumers aout the product the usiness may e
selling. The changes in technology have a significant effect on how usiness
promote their usiness. The internet has ecome an effective way to advertise a
product.
+lace
$n element in the marketing mix with deals with how the product is distriuted to
the target consumers
! Implementation, monitoring and controlling
Implementing the marketing plan means to putting the marketing strategies into operation.
)nce the marketing plan has een implemented, it must e carefully monitored and
controlled. Monitoring means to checking and oserving the actual progress of a marketing
plan. 5ontrolling involves the comparison and planned performance against actual
performance and talking corrective action to make sure the o8ectives are attained. *hen
evaluation alternative marketing strategies, a usiness must develop a financial forecast that
details the cost and revenues for each strategy
0 developing a financial forecast" comparing actual and planned results, revising the
marketing strategy
4eveloping a financial forecast re'uires two steps:
Step ,: (stimate the cost of the marketing plan.
Step .: (stimate the revenue ;sales< the marketing plan expected to generate.
Three key performance indicators used to measure the success of the marketing
plan are:
sales analysis
market share analysis
Marketing profitaility analysis.
The marketing plan can e revised y either:
changes in the marketing mix
new product development
+roduct deletion.
MARKETING )TRATEGIE)
! Market segmentation, productDservice differentiation and positioning
The
demographic segmentation is dividing the total market according to a particular feature of the
population. The geographic is dividing the total market according to the geographic location.
The psychographic segmentation is dividing the total market according to the characteristics
of people. $nd the #ehavioural segmentation is dividing the total market according to the
relationship of the costumer with the product.
! +roducts
0 :oods andDor services
Tangile: *hen the customer pays for something and they receive something
Intangile: *hen the customer pays for something and receives pleasure, entertainment or
some kind of service. +roducts consist of goodsDor and services
0 randing
$ rand is a name, term, symol, design or any comination that identifies a specific product
and distinguishes it from its competition.
#randing provides enefits for oth uyers and sellers. #randing helps consumers:
Identify the specific products that they like. *ithout randing, a consumer selection
would e 'uite random ecause uyers could have no guarantee that they were
purchasing what they preferred.
(valuate the 'uality of products, especially when a consumer lacks the expertise to
8udge a product%s features.
&educe their level of perceived risk of purchase. $ respected and trusted rand will
provide reassurance that the consumer is making the right choice.
:ain a psychological reward that comes from purchasing a rand that symolises
status and prestige.
#randing helps usinesses:
:ain repeat sales ecause consumers recognise the usiness%s products
Introduce new products onto the market ecause consumers are already familiar with
the usiness%s existing rands
*ith their promotional activities ecause the promotion of one product indirectly
promotes all other similarly randed products
(ncourage customer loyalty. This has the added enefit to the usiness of eing ale
to charge a higher price for the product.
0 +ackaging
+ackaging involves more than simply putting the product in a container or placing a wrapper
around it. +ackaging involves the development of a container and the graphic design for a
product. 7or example, tasteful packaging can create an image of luxury, sensuality and
exclusiveness, helping to promote the product. In addition, packaging:
preserves the product
protects the product from damage or tampering
attracts consumers% attention
divides the product into convenient units
assists with the display of the product
makes transportation and storage easier
! +rice including pricing methods
+rice refers the amount of money the customer is willing to offer in exchange for a product.
Many usinesses have difficulty choosing the right price for a product. $ the customer
impression of pricing is different when the pricing is too high or too low
0 5ost, market, competition2ased 0 pricing strategies
5ost2ased
$s a starting point, the usiness determines the total cost of producing ;or purchasing< one
unit of the product. The usiness then adds an amount to cover additional costs ;overheads
such as interest payments, insurance, transport< and to also provide an ade'uate profit
margin. That amount is referred to as the mark2up and is usually expressed as a percentage.
The total of the cost plus the mark2up is the selling price of the product. 5ost2ased pricing is
a very simple and straightforward pricing policy and is used mainly y wholesalers and
retailers. Eowever, it has two ma8or drawacks.
,. 4ifficulty in accurately determining an appropriate mark2up percentage. If the
percentage is too high, the product will e overpriced and possily not sell. If the
mark2up is too low, the usiness is losing profit they could have easily otained.
.. The product is priced after production and associated costs are incurred without
taking into account the other elements of the marketing mix or the state of the
market.
Market2ased
Instead of using costs to determine price, usinesses sometimes set prices according to the
level of supply and demand whatever the market is prepared to pay. Market2ased
pricing is a method of setting prices according to the interaction etween the levels of supply
and demand. *hen demand for a product is greater than its supply, there will e
a shortage in the market. This will force up the price of the good. 7or example, if ,//
prospective uyers attend an art auction ut there is only one particular type of painting
;product< offered for sale, the price will rise. $s the price rises, uyers will progressively drop
out of idding until the final uyer is successful. 5onversely, when the supply of a product is
greater than its demand, a surplus will exist in the market. The price of the product will
conse'uently fall. This is why ananas are cheaper, for example, during the summer
months.
5ompetition2ased
5ompetition2ased pricing is often used when there is a high degree of competition from
usinesses producing similar products. )nce a usiness has estalished a ase price, it can
then decide to choose a price either:
#elow that of competitors. This policy of undercutting the competition is often used as
a way of reaking into an estalished market.
('ual to that of competitors. 7ollowing the price estalished y a price leader is an
easy option for a usiness ecause it avoids having to undertake market research to
find out what the consumer would actually pay. $s well, it also avoids the risks of
price competitionDwar.
$ove that of competitors. This is a favoured practice y usinesses who wish
consumers to perceive the product as superior, which appeals to the status2
conscious uyer.
0 +ricing Strategies
+rice Skimming
+rice skimming occurs when a usiness charges the highest possile price for the product
during the introduction stage of its life cycle.
+rice +enetration
+rice penetration occurs when a usiness charges the lowest price possile for a product.
The strategy aims to 'uickly achieve a large market share for a product sometimes called
Bmass2market pricing%. The o8ective is to sell a large numer of products during the early
stages of the life cycle and thus discourage competitors from entering the market or from
taking market share from existing usinesses. The main disadvantage of this strategy is that
it is more difficult to raise prices significantly than it is to lower them. 5onse'uently, a
usiness may e locked into low sales revenue until it sustantially modifies the product at a
later stage.
9oss 9eaders
$ loss leader is a product sold at or elow cost price. 7or a special promotion, many
usinesses, especially retail stores, delierately sell a product at a loss to attract customers
to the shop.
This successful pricing strategy is often used when the usiness:
Is overstocked or a product is slow to sell.
wants to increase the traffic flow in the expectation of gaining new customers
*ants to uild a reputation of having low prices.
+rice +oints
+rice points ;or price lining< are selling products only at certain predetermined prices. This
pricing strategy is used mainly y retailers, especially clothing stores and outi'ues. Fsing
this pricing strategy makes it easier for the customer to find the type of product they need. It
also makes it easier for the usiness to encourage the customer to Btrade up% to a more
expensive model.
0 +rice and 'uality interaction
The price2'uality relationship helps create an image of the product to the customers.
Therefore, if a usiness charges a low price for a product, customers may perceive the
product as Bcheap%. 5harge a high price and the product develops an aura of 'uality and
status. This price0'uality relationship does not apply to all products. Fsually, high2priced and
infre'uently purchased items such as cars, homes and furniture display a stronger price0
'uality relationship than fre'uently purchased products such as grocery items.
! +romotion
+romotion descries the methods used y a usiness to inform, persuade and remind a
target market aout its products.
+romotion attempts to:
attract new customers y heightening awareness of a particular product
increase rand loyalty y reinforcing the image of the product
encourage existing customers to purchase more of the product
provide information so customers can make informed decisions
(ncourage new and existing customers to purchase new products.
0 (lements of the promotion mix
The elements of promotion mix include advertising, personal selling and relationship
marketing, sales promotions, pulicity and pulic relations
2 Adertising : $ successful advertising campaign can result in increased sales and profit
for a usiness. The main advantage of advertising is that it provides usinesses with the
flexiility to reach an extremely large audience or to focus on a small, distinct target
market segment.
The six main advertising media includes:
Mass marketing television, radio, newspapers and magaCines
4irect marketing catalogues catalogues mailed to individual households
Telemarketing the use of the telephone to personally contact a customer
(2marketing the use of the internet to deliver advertising messages
Social media advertising online advertising using social media platforms such as
7aceook and Twitter
#illoards large signs placed at strategic locations.
*hich type of advertising media a usiness selects depends on a numer of variales
including the:
Type of product and its positioning
SiCe of the target market and its characteristics
#usiness%s marketing udget
5ost of the advertising medium
+roduct%s position on the product life cycle.
2 ,ersonal )elling : +ersonal selling involves the activities of a sales consultant directed
to a customer in an attempt to make a sale" it involves the human aspect of promotion.
$lthough personal selling is an expensive promotional method, usinesses are willing to
spend the money on it ecause it offers three uni'ue advantages. They are:
The message can e modified to suit the individual customer%s circumstances.
The individualised assistance to a customer can create a long2term relationship
resulting in repeat sales.
The sales consultant can provide after2sales customer service in relation to product
features, installation, warranties and servicing.
2 Relationship marketing/ 5ustomers want more individualised treatment. In response,
usinesses are looking for ways to develop long2term, cost2effective and strong
relationships with individual customers, a process known as relationship marketing. The
ultimate aim is to create customer loyalty y meeting the needs of customers on an
individual asis therey creating reasons to keep customers coming ack. (.g.
*oolworths (veryday &ewards.
2 )ales promotion
$ usiness may decide to offer a direct inducement to customers in an attempt to sell more
of its product. This type of promotion is referred to as sales promotion and aims to:
(ntice new customers
(ncourage trial purchase of a new product
Increase sales to existing customers and repeat purchases.
Sales promotion techni'ues are used primarily to increase the effectiveness of other
promotion activities, especially advertising. (xamples of special promotions include:
,. 5oupons . These offer discounts of a stated amount on particular items at the time of
purchase. 5oupons work est for new or improved products.
.. +remiums. $ premium is a gift that a usiness offers the customer in return for using
the product. 7or example, a food producer may offer customers a cookook as a
premium.
=. &efunds . +art of the purchase price is given ack to those customers who send in a
voucher with a specific proof of purchase. In recent years, refunds have ecome
widely used on power tools and kitchen appliances.
G. Samples . $ sample is a free item or container of a product. 7or example, when you
visit a supermarket, you will often find a sales representative encouraging you to
taste a product such as cheese, fruit, iscuits or cake.
H. +oint2of2purchase displays . Special signs, displays and racks are supplied and
installed y the manufacturer in retail outlets. They are usually located at the end of
aisles in supermarkets to gain consumer attention and make more efficient use of
floor space.
2 ,ublicit! and ,ublic relations
+ulicity is any free news story aout a usiness%s products. It differs from advertising in that
it is free and its timing is not controlled y the usiness. The main aims of pulicity are to:
(nhance the image of the product
&aise awareness of a product
Eighlight the usiness%s favourale features
Eelp reduce any negative image that may have een created.
There are four main ways in which pulic relations activities can assist a usiness in
achieving its o8ective of increased sales:
,. Promoting a positive image: reinforcing the favourale attitudes and perceptions
consumers have regarding the usiness%s reputation
.. Effective communication of messages: using advertising, sales promotions, pulicity
and personal selling to convey information aout the usiness and its products
=. Issues monitoring: protecting sales y providing an early warning of pulic trends that
could affect the usiness%s sales. &emedial action can e taken efore much harm is
done to sales.
G. Crisis management: protecting a usiness%s reputation as a result of negative or
unfavourale rumours and adverse pulicity, which, if left unchecked, might result in
a loss of sales
0 The communication process
Marketing managers must e ale to communicate clearly, efficiently and succinctly to their
target markets. If the communication process ecomes distorted or inefficient, the message
ecomes distorted. The resulting miscommunication may mean lost sales. *ithout effective
communication, promotion is wasted.
Marketing managers can use a variety of channels to communicate a message. $ channel is
any method used for carrying a message. Two of the most common channels used for
promotional communication include print and electronic media advertising.
0 )pinion leaders, word of mouth
$n opinion leader is a person who influences others. Their opinions are respected, and they
are often sought out for advice. #usinesses are increasingly using social media platforms
such as 7aceook and Twitter to engage in a form of word2of2mouth communication.
7riends% recommendations can e a powerful influence, especially when there are many
competing products from which to choose.
! +laceDdistriution
0 4istriution channels
5hannels of distriution or marketing channels are the routes taken to get the product from
the usiness to the customer. This process usually involves a numer of intermediaries,
such as the wholesaler, roker, agent or retailers. $part from the retailer, the other
intermediaries are often Binvisile%, with the customer knowing very little aout their role and
operation.
The four mostly common used channels of distriution are:
+roducer to customer
+roducer to retailer to customer
+roducer to wholesaler to retailer to customer%
+roducer to agent to wholesaler to retailer to customer
Innovative distriution methods: non2store retailing
Two of the most rapidly non store retailing is:
Telemarketing
Internet Marketing
0 channel choice
$ usiness can decide to cover the market in one of three ways as follows, the difference
eing the intensity of coverage.
,. Intensie distribution# This occurs when the usiness wishes to saturate the market
with its product. 5ustomers can shop at local outlets and e ale to purchase the
product. Many convenience goods, such as milk, lollies and newspapers, are
distriuted this way.
.. )electie distribution. This involves using only a moderate proportion of all possile
outlets. 5lothing, furniture and electrical appliances are often distriuted using this
method. The customer is prepared to travel and seek out a specific retail outlet that
stocks a certain rand.
=. Exclusie distribution. This is the use of only one retail outlet for a product in a
large geographic area. This method of distriution is commonly used for exclusive,
expensive products.
0 +hysical distriution issues
+hysical distriution is all those activities concerned with the efficient movement of the
products from the producer to the customer.
0 Transport, warehousing, inventory
The method of transportation a usiness uses will largely depend on the type of product and
the degree of service the usiness wishes to provide. The four most common methods of
transportation are rail, road, sea and air. *arehousing is a set of activities involved in
receiving, storing and dispatching goods. $ warehouse acts as a central organising point for
the efficient delivery of products. The goal of inventory is to find the correct alance etween
these two situations.
! +eople, processes and physical evidence
The Three +%s applicale for services:
+eople2 $s services are performed y people, it is essential that the usiness
use appropriately recruited, 'ualified and trained employees.
The people element refers to the 'uality of interaction etween the customer
and those within the usiness who will deliver the service. 5onsumers ase
their perceptions and make 8udgements aout a usiness ased on how the
employees treat them, for e.g. &estaurants and Eotels.
+rocess2 +rocesses refers to the flow of activities that a usiness will follow in
its delivery of a service.
+hysical (vidence2 +hysical evidence refers to the environment in which the
service will e delivered. It also includes materials needed to carry out the
service such as signage, rochures, calling cards, letterheads, usiness logo
and wesite.
! (2marketing
(2marketing ;electronic marketing< is the practice of using the internet to perform marketing
activities. The main technologies presently availale for e2marketing include we pages,
podcasts, SMS, logs and *e../.
! :loal marketing
0 :loal randing
*e are surrounded y gloal products all carrying gloal rand names. :loal randing is
the worldwide use of a name, term, symol or logo to identify the seller%s products.
#usinesses are increasingly using gloal randing for a numer of reasons:
It can e cost effective ecause one advertisement can e used in a numer of
locations.
It provides a uniform worldwide image.
The successful rand name can e linked to new products eing introduced into the
market.
0 Standardisation
$ standardised approach is a gloal marketing strategy that assumes the way the product is
used and the needs it satisfies are the same the world over
0 5ustomisation
$ customised approach is a gloal marketing strategy that assumes the way the product is
used and the needs it satisfies are different etween countries. 7or example, Mc4onalds
serves eer in 7rance and :ermany, sake in ?apan and noodles in the +hilippines.
0 :loal pricing
$ gloal usiness can implement one of the three gloal pricing strategies:
5ustomised +ricing: 5ustomised pricing occurs whenever consumers in
different countries are charged different prices for the same product.
Market 5ustomised +ricing: Market2customised pricing sets prices according
to local market conditions.
Standard *orldwide +rice: Standardised pricing is the practice of charging
customers the same price for a product anywhere in the world.
0 5ompetitive positioning
5ompetitive positioning relates to how a usiness will differentiate its products. It centres on
how a usiness will carve out a place in the competitive marketing environment. $s in a
domestic market, a gloal usiness must clearly show how its products are etter than the
competitors% products. *ithout differentiation, it takes more time, money and effort to
encourage potential customers to purchase a usiness%s products. To differentiate
successfully, and avoid competing on price only a difficult situation to sustain over the
long term the usiness should strive to develop product leadership, positive customer
relationships and operational excellence.