Marketing Full Notes

BPU 07210: MARKETING
MANAGEMENT
SEMESTER II COURSE FOR HDPLM 1

TOPIC ONE:INTRODUCTION
TO MARKETING
1.1 Basic Marketing Concepts

1.1.1 Marketing-definition
• There are various definition of marketing.
Marketing is about identifying and meeting
human and social needs. One of the shortest
good definition of marketing is “meeting
needs profitably. In another definition market-
ing is defined as a social process by which in-
dividuals and groups obtain what they need
and want through creating, offering, and
freely exchanging products and services of
value with others.
1.1.1 Marketing-Definition
• The American Marketing Association offers the
following formal definition: Marketing is the activ-
ity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offer-
ings that have value for customers, clients, part-
ners, and society at large.
• Managers sometimes think of marketing as “the
art of selling products,” but many people are sur-
prised when they hear that selling is not the most
important part of marketing! Selling is only the
tip of the marketing iceberg.
1.1.2 Needs, Wants and Demands
• Needs are the basic human requirements such
as for air, food, water, clothing, and shelter.
Humans also have strong needs for recreation,
education, and entertainment. These needs
become wants when they are directed to spe-
cific objects that might satisfy the need. A stu-
dents of low income family may need com-
puter ( a need) but a student of high income
family may need Apple or a McTosh (a want).
Wants are shaped by our society.
• We can distinguish five types of needs:
1. Stated needs (The customer wants a good
printer.)
2. Real needs (The customer wants a printer
which prints a large number of copies per
minutes)
3. Unstated needs (The customer expects good
service from the dealer from whom he bought
a printer).
4. Delight needs (The customer would like to
find a printer which is coloured.)
5. Secret needs (The customer wants friends to
see him or her as a know-how consumer.)
• Responding only to the stated need may
shortchange the customer.
• The different types of needs, lead us to differ-
ent types of marketing which are responsive
marketing, anticipative marketing, and cre-
ative marketing.
• A responsive marketer finds a stated need and
fills it, while an anticipative marketer looks
ahead to the needs that customers may have
in the near future.
• In contrast, a creative marketer discovers and
produces solutions that customers did not ask
for, but to which they devotedly respond.
• Sony exemplifies a creative marketer because
it has introduced many successful new prod-
ucts that customers never asked for or even
thought were possible: Walkmans, VCRs, and
so on. Sony goes beyond customer-led market-
ing:
• It is a market-driving firm, not just a market-
driven firm. Akio Morita, its founder, pro-
claimed that he doesn’t serve markets; he
creates markets.
Demands
• Are wants for specific products backed by an
ability to pay. Companies must measure not
only how many people want their product, but
also how many are willing and able to buy it.
Eight demand states are possible:
Negative demand-Consumers dislike the
product and may even pay a price to avoid it
vaccinations, dental work, vasectomies, and
hernia operations.
Nonexistent demand-Consumers may be un-
aware of or uninterested in the product-new
farming methods, and college students may
not be interested in taking foreign language
courses.
Latent demand-Consumers may share a
strong need that cannot be satisfied by an ex-
isting product-non harmful cigarettes, safer
neighborhoods, and more fuel efficient cars.
Declining demand-Consumers begin to buy
the product less frequently or not at all-
Churches have seen their membership de-
cline, and private colleges have seen their ap-
plications decline, reduced cigarette or alcohol
drinking.
Irregular demand-Consumer purchases vary
on a seasonal, monthly, weekly, daily, or even
hourly basis-museums.
Full demand-Consumers are adequately buy-
ing all products put into the marketplace-.
Overfull demand-More consumers would like
to buy the product than can be satisfied-eg
TANESCO or DAWASCO in our country.
Unwholesome demand-Consumers may be
attracted to products that have undesirable
social consequences cigarettes, alcohol,x-rated
movies, movies with anti-religion propaganda,
or large families.
• In each case, marketers must identify the un-
derlying cause(s) of the demand state and de-
termine a plan of action to shift demand to a
more desired state eg development marketing
for latent demand, demarketing for overfull
demand, remarketing for falling demand, etc.
1.1.3 Products, Offerings and
Brands
A product
A product is anything that can be offered to a
market to satisfy a want or need, including phys-
ical goods (coke), services (legal), experiences
(management skills, marketing),events (fiesta),
persons (A-Y/Celebrities), places (DSM Zoo),
properties (PPF Tower), organizations (NIT), in-
formation (how to reduce body weight), and
ideas (new product).
Brands
An Offering
•Companies address customer needs by putting
forth a value proposition, a set of benefits that
satisfy those needs. The intangible value propo-
sition is made physical by an offering, which can
be a combination of products, services, informa-
tion, and experiences. Air Line service go and re-
turn ticket between Dar es Salaam and Mwanza
at 280,000 only. This is an offering.
Brands
A brand
A brand is an offering from a known source. Air
Line service go and return ticket between Dar es
Salaam and Mwanza at 280,000 only by Fast Jet.
This a brand. All companies strive to build a
brand image with as many strong, favorable, and
unique brand associations as possible.
1.1.4 Exchange concept and its
importance in marketing
• Exchange, the core of marketing, involves ob-
taining a desired product from someone by of-
fering something in return. For exchange po-
tential to exist, five conditions must be satis-
fied:
i. There are at least two parties.
ii. Each part has something that might be of
value to the other part.
iii. Each part is capable of communication and
delivery.
iv. Each part is free to accept or reject the ex-
change offer.
v. Each part believes it is appropriate or desir-
able to deal with the other party.
• Whether exchange actually takes place de-
pends upon whether the two parties can
agree on terms that will leave them both bet-
ter off (or at least not worse off) than before.
Exchange is a value-creating process because
it normally leaves both parties better off. Note
that exchange is a process rather than an
event. Two parties are engaged in exchange if
they are negotiating-trying to arrive at mutu-
ally agreeable terms.
• When an agreement is reached, we say that a
transaction takes place. A transaction involves
at least two things of value, agreed-upon con-
ditions, a time of agreement, and a place of
agreement.
1.1.5 Marketing Mix
• Marketing mix is the set of controllable mar-
keting variables that the firm blends to pro-
duce the response it wants in the target mar-
ket. It consists of everything the firm can do to
influence the demand for its product. Mc-
Carthy classified various marketing activities
into marketing-mix tools of four broad kinds,
which he called the four Ps of marketing:
product, price, place, and promotion.
1.1.5 Marketing Mix
• It is known as a “mix” because each ingredient
affects the other and the mix must overall be
suitable to the target customer
i. Product - A product is anything that can be of-
fered to a market for attention, acquisition,
use, or consumption that might satisfy a want
or need. It includes physical objects, services,
persons, places, organizations, and ideas. Air
travel service=service/product
1.1.5 Marketing Mix
ii. Price - how much the customer pays for the
product. The price refers to the monetary value
of the product. Price is the only element in the
marketing mix that produces revenue; the other
elements represent costs. For example the go and
return fare between Dar es Salaam and Rwanda
of Tsh 850,000/=
iii. Place – how the product is distributed to the
customer-how people get air services such as
tickets, company branches, on line booking.
1.1.5 Marketing Mix
iv. Promotion - how the customer is found and per-
suaded to buy the product. Promotion stands for
activities which communicates the merits of the
product and persuade target customers to buy it.
This includes the use of salespeople, sales promo-
tion, advertisements, or arranging publicity for
company’s products.
Each element of marketing mix has its mix also i.e
product mix, price mix, place and promotion mix
1.1.6 Market
• Traditionally, a “market” was a physical place where
buyers and sellers gathered to buy and sell goods.
Economists describe a market as a collection of buy-
ers and sellers who transact over a particular product
or product class (such as the housing market or the
grain market).Marketers defines a market as the set
of actual and potential buyers of a product. This def-
inition is due to the fact that today market is more
than a marketplace (physical) but also a marketspace
(digital)
1.2 Nature and Scope of Market-
ing
Nature of Marketing
• The beginnings of contemporary marketing
were discussed as far back as the eighteenth
and nineteenth centuries by theorists such as
Adam Smith, the father of modern econom-
ics, who wrote: ‘Consumption is the sole end
and purpose of all production and the inter-
ests of the producer ought to be attended to
only so far as it may be necessary for promot-
ing that of the consumer.’
ing
• This statement is close to the basis of the
modern marketing concept, which postulates
that needs and wants of consumers should be
a manufacturer’s main concern and they
should only produce what can be sold. As will
be seen in the coming discussion of marketing
philosophies, marketing can be said to have
developed in an evolutionary rather than revo-
lutionary manner, alongside, and keeping pace
with, our economy.
ing
• Modern organizations are comprised of differ-
ent operative functions. These are such as
production, human resource, engineering,
R&D, and finance to mention few. Marketing is
therefore an organizational function and a set
of processes for creating, communicating, and
delivering value to customers and for manag-
ing customer relationships in ways that benefit
the organization and its stakeholders.
ing
Scope of marketing
• Marketing is practiced in both profit and not
for profit organizations. Marketing revolves
around the 4 p’s namely product, price, pro-
motion and place. These p’s give us a picture
on the scope of marketing.
• In order to understands the wide scope of
marketing we need to ask ourselves other
questions such as what is marketed. All these
will show us how marketing is wide.
ing
Marketers markets physical goods (coke), ser-
vices (include the work of airlines, hotels, car
rental firms, barbers and beauticians, mainte-
nance and repair people, and accountants,
bankers, lawyers, engineers, doctors, software
programmers, and management consultants, le-
gal advisors), experiences (management skills,
marketing),events (fiesta, olympics, kili
marathon), persons (A-Y/Celebrities),
ing
places (DSM Zoo, Ngorongoro), properties (PPF
Tower), organizations (NIT, ARU), information (how
to reduce body weight), and ideas (new product).
Marketing specialists are responsible for most of
the activities necessary to create the customers the
organization wants. These activities include the fol-
lowing:
identifying customer needs (marketing research)
designing products that meet those needs
communicating information about those goods
and services to prospective buyers
ing
making the items available at times and places
that meet customers’ needs.
pricing merchandise and services to reflect
costs, competition, and customers’ ability to
buy.
providing the necessary service and follow-up
to ensure customer satisfaction after the pur-
chase.
All issues explained under this part, describe the
nature and scope of marketing.
1.3 Marketing Management and
Marketing Philosophies
• Marketing management is the conscious/serious
effort (planning, organizing, implementation and
control) to achieve desired exchange outcomes
with target markets. But what philosophy should
guide a company’s marketing efforts? What rela-
tive weights should be given to the often conflict-
ing interests of the organization, customers, and
society?
• Clearly, marketing activities should be carried out
under a well-thought-out philosophy of efficient,
effective, and socially responsible marketing.
• In fact, there are five competing concepts un-
der which organizations conduct marketing ac-
tivities which tries to answer the questions
mentioned above; these are production con-
cept, product concept, selling concept, mar-
keting concept, and societal marketing con-
cept. These concepts on the other hand they
indicate the path under which recent market-
ing practices passed i.e the evolution of mar-
keting.
1. The Production Concept
The production concept holds that consumers
will favor products that are highly available
and affordable. Therefore, management
should focus on improving production and dis-
tribution efficiency. This concept is one of the
oldest orientations that guides sellers. The
production concept is still a useful philosophy
in some situations.
• For example, computer maker Lenovo domi-
nates the highly competitive, price-sensitive
Chinese PC market through low labor costs,
high production efficiency, and mass distribu-
tion. Companies adopting this orientation run
a major risk of focusing too narrowly on their
own operations and losing sight of the real ob-
jective of satisfying customer needs and build-
ing customer relationships.
2. The Product Concept
Other businesses are guided by the product con-
cept, which holds that consumers favor those
products that offer the most quality, perfor-
mance, or innovative features. Managers in
these organizations focus on making superior
products and improving them over time, assum-
ing that buyers can appraise quality and perfor-
mance. Product-oriented companies often design
their products with little or no customer input,
trusting that their engineers can design excep-
tional products. However, the product concept
can lead to marketing myopia.
• For example Chinese companies and other
mobile phone manufacturers continually put
new features in their products believing that
customers want such kind of products. This
may not be the reality however. Such chal-
lenges will be solved by other concepts.
3. The Selling Concept
• The selling concept, another common busi-
ness orientation, holds that consumers and
businesses, if left alone, will ordinarily not
buy enough of the organization’s products.
The organization must, therefore, undertake
an aggressive selling and promotion effort.
This concept assumes that consumers must be
coaxed into buying, so the company has a bat-
tery of selling and promotion tools to stimu-
late buying.
• The selling concept is practiced most aggres-
sively with unsought goods-goods that buyers
normally do not think of buying, such as insur-
ance and funeral plots. The selling concept is
also practiced in the nonprofit area by fund-
raisers, college admissions offices, and politi-
cal parties. Most firms practice the selling
concept when they have overcapacity. Their
aim is to sell what they make rather than
make what the market wants.
4. The Marketing Concept
• The marketing concept, based on central doc-
trine crystallized in the mid-1950s, challenges
the three business orientations we just dis-
cussed. The marketing concept holds that the
key to achieving organizational goals consists of
the company being more effective than its
competitors in creating, delivering, and com-
municating customer value (desired satisfac-
tions) to its chosen target markets. Theodore
Levitt of Harvard drew a perceptive contrast be-
tween the selling and marketing concepts;
• “Selling focuses on the needs of the seller;
marketing on the needs of the buyer.
• Selling is preoccupied with the seller’s need to
convert his product into cash; marketing with
the idea of satisfying the needs of the cus-
tomer by means of the product and the whole
cluster of things associated with creating, de-
livering and finally consuming it.” The market-
ing concept rests on four pillars: target mar-
ket, customer needs, integrated marketing,
and profitability.
• The selling concept takes an inside-out per-
spective. It starts with the factory, focuses on
existing products, and calls for heavy selling
and promoting to produce profitable sales.
The marketing concept takes an outside-in
perspective. It starts with a well-defined mar-
ket, focuses on customer needs, coordinates
activities that affect customers, and produces
profits by satisfying customers.
5. The Societal Marketing Concept
• Some have questioned whether the marketing
concept is an appropriate philosophy in an age of
environmental deterioration, resource shortages,
explosive population growth, world hunger and
poverty, and neglected social services. Are com-
panies that successfully satisfy consumer wants
necessarily acting in the best, long-run interests
of consumers and society? The marketing con-
cept sidesteps the potential conflicts among con-
sumer wants, consumer interests, and long-run
societal welfare.
• Yet some firms and industries are criticized for
satisfying consumer wants at society’s expense.
Such situations call for a new term that enlarges
the marketing concept. We propose calling it the
societal marketing concept, which holds that the
organization’s task is to determine the needs,
wants, and interests of target markets and to de-
liver the desired satisfactions more effectively
and efficiently than competitors in a way that
preserves or enhances the consumer’s and the
society’s well-being.
• The societal marketing concept calls upon
marketers to build social and ethical consider-
ations into their marketing practices. They
must balance the often conflicting criteria of
company profits, consumer want satisfaction,
and public interest.
6. Holistic Marketing
• Holistic marketing acknowledges that every-
thing matters in marketing-and that a broad,
integrated perspective is often necessary.
Holistic marketing thus recognizes and recon-
ciles the scope and complexities of marketing
activities.
Holistic marketing approach
a. Relationship Marketing
•Increasingly, a key goal of marketing is to develop
deep, enduring relationships with people and orga-
nizations that directly or indirectly affect the suc-
cess of the firm’s marketing activities. Relationship
marketing aims to build mutually satisfying long-
term relationships with key constituents in order to
earn and retain their business. Four key con-
stituents for relationship marketing are customers,
employees, marketing partners (channels, suppliers,
distributors, dealers, agencies), and members of the
financial community (shareholders, investors, ana-
lysts).
Marketers must create prosperity among all these
constituents and balance the returns to all key
stakeholders. To develop strong relationships with
them requires understanding their capabilities
and resources, needs, goals, and desires. When a
hospital buys an MRI from General Electric’s Med-
ical Systems division, for instance, it expects good
installation, maintenance, and training services to
go with the purchase. All company communica-
tions also must be integrated.
b. Integrated Marketing
•Integrated marketing occurs when the marketer
devises marketing activities and assembles mar-
keting programs to create, communicate, and
deliver value for consumers such that “the
whole is greater than the sum of its parts.”
• Using an integrated communication strategy
means choosing communication options that
reinforce and complement each other. A mar-
keter might selectively employ television, ra-
dio, and print advertising, public relations and
events, and PR and Web site communications
so each contributes on its own as well as im-
proving the effectiveness of the others. Each
must also deliver a consistent brand message
at every contact.
c. Internal Marketing
•Internal marketing, an element of holistic market-
ing, is the task of hiring, training, and motivating
able employees who want to serve customers well.
It ensures that everyone in the organization em-
braces appropriate marketing principles, especially
senior management. Smart marketers recognize
that marketing activities within the company can be
as important or even more important than those di-
rected outside the company. It makes no sense to
promise excellent service before the company’s
staff is ready to provide it.
d. Performance Marketing
•Performance marketing requires understanding
the financial and nonfinancial returns to business
and society from marketing activities and programs.
Top marketers are increasingly going beyond sales
revenue to examine the marketing scorecard and
interpret what is happening to market share, cus-
tomer loss rate, customer satisfaction, product qual-
ity, and other measures. They are also considering
the legal, ethical, social, and environmental effects
of marketing activities and programs. This is also
known as social responsibility marketing.
1.4 Marketing Institutions
Marketing institutions refers to various actors
who in one way or another undertake the market-
ing function. In another language we can call
these marketing intermediaries; and these are the
firms that aid the company in promoting, selling,
and distributing its goods to the final buyer. They
include middleman, physical distribution firms,
marketing service agencies, and financial inter-
mediaries.
a. Middleman
•Middleman is business firms that help the com-
pany find customers or close sales with them.
They fall into two types, agent middleman and
merchant middleman.
•Agent middleman-such as brokers and manufac-
turers’ representatives-find customers or negoti-
ate contracts, but do not take title to the mer-
chandise. Usually they are receiving commissions
due to the service they are giving.
• For example Max Malipo might hire any agent
to find customers in Mauritius and pay a com-
mission for each machine sold/services pro-
vided.
• Merchant middleman-such as wholesalers and
retailers-buy, take title to, and resell merchan-
dise (they often called resellers). These are
many in our country such as wholesalers and
retailers for TBL, Serengeti Breweries or TCC
which are found in different regions in Tanzania.
• Middleman has various advantage including
creating place utility by stocking products
where customers are located. They create time
utility by showing and delivering products
when consumers want them. They also create
possession utility by selling and transferring ti-
tles to the buyers.
b. Physical Distribution Firms
• These assist the company in stocking and moving
goods from their origin to their destination. These
includes:-
• Warehouses- which are firms that store and pro-
tect goods before they move to the next destina-
tion. A company has to decide how much space to
build itself and how much to rent from warehouse
firms. Example of warehousing companies in Tan-
zania are Export Trading Group and Brazafric En-
terprises (T) Limited
• Transportation firms-consist of railroads, truck-
ers, airlines, ships and other freight-handling
companies that specialize in moving goods from
one location to another. A company has to de-
cide on the most cost-effective modes of ship-
ment, balancing such considerations as cost, de-
livery, speed, and safety. Example of trans-
porters in Tanzania are such as Sino Logistics
Co. Ltd and SAS LOGISTICS Company Limited.
c. Marketing Service Agencies
• These includes marketing/market research
firms (SGS,ESRF and Ipsos-Synovate), advertis-
ing agencies (Ashton media, Prime Promotions,
Tanzapromo), media firms (Clouds, IPP Media),
and marketing consulting firms (KPMG, Focus-
Biz, M&R Agency Limited) - which assist the
company in targeting and promoting its prod-
ucts to the right markets.
Here the company faces a “make or buy” decision with respect to
these services. When it decide to buy it must make a carefully se-
lection in order to get the right firm.
Also the performance of these firms needs to be re-
viewed periodically and consider replacing those that no
longer perform adequately.
d. Financial Intermediaries
• These includes banks (NBC,NMB), credit companies
(BAYPORT), insurance companies (ASTRA,PHOENIX),
and other companies that help finance transactions or
insure risk associated with the buying and selling of
goods. The company’s marketing performance can be
seriously affected by rising credits costs or limited
credit or both. For this reason, the company has to de-
velop strong relationships with critical financial institu-
tions.
TOPIC TWO:MARKETING EN-
VIRONMENT
2.1 Introduction
2.1 Introduction
• A company’s marketing environment consists
of the actors and forces that are external to
the marketing management function of the
firm and that impinge/affect on the marketing
management’s ability to develop and maintain
successful transactions with its target cus-
tomers.
• Marketing of different products take place
within this environment.
2.1 Introduction
• The marketing environment comprises a mi-
croenvironment and macro environment forces.
• The microenvironment consists of the actors in
the companies immediate environment that af-
fect its ability to serve its customers- namely, the
company, market channel firms, customer mar-
kets, competitors, and the publics
2.1 Introduction
2.1 Introduction
• The macro environment consists of the larger
societal forces that affect all the actors in the
companies microenvironment. It includes the
demographic, economic, natural, technological,
political, and cultural forces.
2.1 Introduction-Macro-environment
2.2 Marketing Environment
Company’s Microenvironment. The actors in this
environment include:-
i. Company- marketing management of a company
in formulating marketing plans, must take into
account the other groups in the company, such as
top management, finance department, R &D,
purchasing, operations and accounting. Top man-
agement of firms include general manager, the
executive committee, the chief executive officer,
the chairman of the board, and the board of di-
rectors.
• These higher levels of management set the
company’s mission, objectives, broad strate-
gies, and policies.
• Marketing managers must make decisions
within the context set by top management.
Furthermore, their marketing proposals must
be approved by top management before they
can be implemented. They must also work
closely with the functional departments.
ii. Suppliers-these are business firms and individu-
als that provide the resources needed by the
company and its competitors to offer services.
For example a banking institutions must obtain
machines, papers, labor, computers, in order to
offer its services. Most services firms are faced by
a buy decisions and in this case the purchasing
departments must develop specifications, search
for supplier, qualify them, and choose those that
offers the best mix of quality, delivery reliability,
credit, warranties, and low cost.
• Development in the supplier environment can
have a substantial impact on the company’s
marketing operations. Marketing managers
need to watch price trends of their key inputs.
Rising supply costs may force price increases
that will reduce the company forecasted sales
volume and profit at large.
iii. Marketing intermediaries- are various firms
that aid the company in a number of market-
ing activities such as marketing research and
promotion. To a company these include; mar-
keting service agencies such as marketing re-
search firms, advertising agencies, media
firms, and marketing consulting firms which
assist the company in targeting and promoting
its services to the rights markets.
• Another group comprise financial intermediaries
which include central large banks, insurance
companies and other companies that help fi-
nance transactions or insure risk associated with
providing financial services such as massive de-
fault rates or bankruptcy. The company’s market-
ing performance can be seriously affected by ris-
ing credit costs or limited credit or both. For this
reason, the company has to develop strong rela-
tionships with critical financial institutions.
iv. Customers- The company needs to study its cus-
tomers markets closely. The company can oper-
ate in five types of customers markets. These in-
cludes:-
• Consumer markets- individuals and households
that buy goods or services for personal consump-
tion; for example customers who buy car for pri-
vate use only.
• Industrial markets- organizations that buy ser-
vices for their production process in order to
make profits or achieve other objectives.
• For example organizations who buy truck or
bus in order to offer services to other institu-
tions or individuals.
• Government markets- government agencies
that buy products or services in order to pro-
duce other services or transfer the services to
others who need them.
• International markets- customers who found
abroad including foreign consumers, produc-
ers, resellers and governments.
v. Competitors- A firm's competitors include not
only the other firms which market the same or
similar products but also all those who com-
pete for the discretionary income of the con-
sumers. For example, the competition for an
airline company is not other airline companies
but different companies where a customer can
spend his income such as saving the money in
the bank, traveling by bus, spending his
money with his friends (leisure) etc.
• This competition among these products may be
described as desire competition as the primary
task here is to influence the basic desire of the
consumer.
• If the consumer decides to spend his disposable
income on leisure, he will still be confronted with
a number of alternatives to choose from like
travelling to upcountry or outside the country, go-
ing to the local recreational centers, eating and
enjoying with children at home etc. the competi-
tion among such alternatives which satisfy a par-
ticular category of desire is called generic compe-
tition.
• If the consumer decides to travel outside the
country, the next question is which form of
transport to use airline, bus, train etc. this is
called 'product form competition'. Finally, the
consumer encounters brand competition, i.e.
competition between different brands like Fast
Jet, Precision Air, Air Tanzania, Emirates etc. An
implication of these different brands is that a
marketer should strive to create primary and se-
lective demand for his products.
• Using this method, a particular institution can
determine all the competitors standing in the
way of providing related services. The man-
ager will want to watch all four types of com-
petitors, paying the most attention to the
brand competitors because they are actively
competing with its service provision.
vi. Publics- company marketing environment
also includes various publics. A public is any
group that has an actual or potential interest
in or impact on a company’s ability to achieve
its objectives.
• Financial publics-these influence the company
ability to obtain funds. Large banks, invest-
ment houses, stock brokerage firms, and
stockholders are the major financial publics.
• A company can seeks the goodwill of these
groups by issuing annual reports, answering fi-
nancial questions, and satisfying the financial
community.
• Media publics- these are organizations that carry
news, features, and editorial opinion; specifically,
newspaper, magazines, and radio and televisions
stations. Every company must struggle to get bet-
ter media coverage.
• Government publics- management of different
institutions must take government developments
into account in formulating marketing plans.
• Companies marketers must consult the com-
pany’s lawyers about possible issues of service
legality, truth-in-advertising, clients and
agent’s rights. Firms must consider joining
with other bodies to lobby for better laws.
• Citizen action publics- a company’s marketing
decisions may be questioned by consumer or-
ganizations, environmental groups, minority
groups, and others.
• Local publics- most companies comes into con-
tact with local publics such as neighborhood resi-
dents and community organizations. Many com-
panies appoint a community/public relations offi-
cer to deal with the community, attend meetings,
answer questions, and make contributions to
worthwhile causes.
• General public- a company needs to be con-
cerned about the general public’s attitude toward
its services.
• Although the general public does not act in an
organized way toward the company, the pub-
lic’s image of the company affects its backing.
To build a strong “corporate citizen” image, a
company may lend its officers to community
fund drives, make substantial contributions to
charity, and set up systems for consumer
complaint handling.
• Internal publics- a company’s internal publics
include blue-collar workers, white-collars
workers, volunteers, managers, and the board
of directors. Some companies develop news-
letters and other forms of communication to
inform and motivate their internal publics.
When employees feel good about their com-
pany, this positive attitude spills over to exter-
nal publics. This is illustrated in figure 1.
Internal customers and external customers sat-
isfaction results into many benefits as summa-
rized in Figure 1 Figure 1: Benefits of
Internal service quality Internal customer
satisfaction
Employee satisfaction
Employee retention
External service quality
Customer satisfaction
Customer retention
Profit/Value
2.2 Marketing Environment-macro
Company’s macro-environment
•Companies and their suppliers, marketing in-
termediaries, customers, competitors, and
publics all operate in a macro environment of
forces and trends that shape opportunities and
pose threats. These forces represent “non con-
trollable,” which the company must monitor and
respond to. These forces are described in detail
in the following discussion.
i. Demographic Environment
• Demography is the study of human populations
in terms of size, density, location, age, gender,
race, occupation and other statistics. The demo-
graphic environment is of considerable interest to
marketers because it involves people, and people
make up markets. Here, we discuss the most im-
portant demographic characteristics and trends
in the largest world markets.
Population size and growth trends
• In any geographic market, population size and
growth trends can be used to gauge its broad
potential for a wide range of goods and ser-
vices. A growing population means growing
human needs to satisfy, offering marketers an
indication of demand for certain goods and
services.
• Depending on purchasing power, it may also
mean growing market opportunities.
• Population age mix- Marketers generally divide
the population into six age groups: preschool
children, school-age children, teens, young adults
age 20 to 40, middle-aged adults 40 to 65, and
older adults 65 and older. Some marketers di-
vides these age group into different generations
such as Silent Generation, Baby boomers (those
born between 1946 and 1964), Generation X
(those born between 1964 and 1984),
• Millennials (or Gen Y) Born between 1979 and
1994.
• These different age groups and generations,
presents different opportunities and threats to
marketers. The rising ageing population, for
example, will imply a growing demand for
healthcare products, pensions and services tai-
lored to the needs of this group of consumers.
• Educational Groups- The population in any
society falls into five educational groups: illit-
erates, high school dropouts, high school de-
grees, college degrees, and professional de-
grees. These pose different opportunities and
threats to marketers. The rising number of
educated people will increase the demand for
quality products, books, magazines, travel,
personal computers and Internet services.
The changing family
This relates with trends such as increased num-
ber of bachelors-one-person and non-family
households, single parents, lately married
couples, death of spouses, increased number
of working mothers, reduced number of chil-
dren and avoidance of extended families. All
these may pose different opportunities and
challenges to marketers.
• For example the increasing trend of working
mothers has spawned the child day-care busi-
ness, cleaning and catering services, increased
consumption of convenience foods, career-ori-
ented women’s clothing and many other business
opportunities. On the other side, people in the
SSWD (single, separated, widowed, divorced)
group need smaller apartments, inexpensive and
smaller appliances, furniture and furnishings, and
food that is packaged in smaller sizes.
• Ethnic and other markets- Ethnic and racial
diversity varies across countries. Race groups
such as blacks and Red Indians have distinct
culture styles and attitudes. Companies are
scrambling to refine their products and mar-
keting to reach this fastest-growing and most
influential consumer group.
ii. The Economic Environment
• The available purchasing power in an economy
depends on current income, prices, savings, debt,
and credit availability. Marketers should be aware
of major trends in real income, savings, and debt,
and of changing consumer expenditure patterns.
• Changes in real income-real income is hurt by
several forces such as inflation rates exceeding
the money income growth rate, unemployment
and an increase in the tax burden.
• These developments reduce disposable personal
income, which is the amount of money people
have left after taxes. Furthermore, many people
have experienced reduced discretionary income,
which is the amount they have left after paying
for food, clothing, shelter, and other necessities.
Reductions in discretionary incomes hurt differ-
ent number of marketers including financial insti-
tutions as a person cannot save money into his
bank account, take a loan as nowhere to pay from
and purchase for example a comprehensive in-
surance for his car.
• Savings, debt, and credit- Consumer expenditures are
affected by income levels, savings rates, debt practices,
and credit availability. When consumers have a high
debt-to-income ratio, it slows expenditures on various
goods and services such as savings, joining pension
funds and taking insurance for themselves and their
properties. This then have impact on marketing efforts
of financial institutions.
• Consumer psychology and spending pattern- the man-
ner under which consumer distributes their income to
different goods and services affect financial institutions
marketing activities.
• For example an American use part of his discre-
tionary income for insurance purpose, hold their
savings in the form of bank savings account,
bonds and stocks. This spending then favors fi-
nancial institutions. The situation may be quite
different for a Tanzanian who never thinks of hav-
ing insurance until he/she buys a car or pension
services until he is employed. This then pose a
very great challenge to financial institutions.
• Income distribution-. Marketers often distinguish
countries using five income-distribution patterns:
(1) very low incomes; (2) mostly low incomes; (3)
very low, very high incomes; (4) low, medium,
high incomes; and (5) mostly medium incomes.
Consider the market for the premium products
and insurance covers like Burglary, Loss Electronic
Equipment, Public Liability, Personal Accident,
and Travel policy. The market would be very small
in countries with type 1 or 2 income patterns but
very big in countries countries 3 to 5.
iii. Natural Environment- Marketers need to be
aware of the threats and opportunities associ-
ated with four trends in the natural environ-
ment: the shortage of raw materials, the in-
creased cost of energy, increased pollution
levels, and the changing role of governments.
• All these shapes the way we produce, use, we
pack and dispose our goods.
iv. Technological environment- The technological
environment represents the application to market-
ing of knowledge based on discoveries in science,
inventions, and innovations. Technology leads to
new goods and services for consumers; it also im-
proves existing products, offers better customer
service, and often reduces prices through new, cost-
efficient production and distribution methods.
Technology can quickly make products obsolete e-
mail, for example, quickly eroded both letter writing
and the market for fax machines-but it can just as
quickly open new marketing opportunities, in en-
tirely new industries. Previous generations did not
know personal computers, iPods, digital wristwatches,
video recorders, or fax machines. The advent of per-
sonal computers and fax machines has made it possible
for people to telecommute-that is, work at home in-
stead of traveling to offices that may need more min-
utes, days or months.
• Equally important is the fact that technology also
affects the way marketing is practised; e.g. in the
marketing research area questionnaires can be
designed and administered directly via computer
terminals. They can also be analysed in a second
via computer softwares. Such IT developments
have enabled the use of sophisticated forecasting
techniques.
• In retailing, electronic point of sale (EPOS) are of-
fering different services ranging from money
transfer to other transactions like paying different
services providers.
• Think also on the impact of internet’s social net-
works on promotion and communication of dif-
ferent messages.
v. The Political-Legal Environment- this consists
of laws, government agencies, and pressure
groups that influence various organizations
and individuals. Sometimes these laws create
new business opportunities. Different laws in a
country either hinder or provide opportunities
to different companies. Think of Social Secu-
rity laws, Work safety Laws, Employment and
labour relations laws, Environment Laws,
• Competition Laws, and electrification laws
how the bring different opportunities and
challenges to existing companies.
• Political stability also matters a lot.
• Political systems and philosophies may also af-
fect business activities.
• Think on the impact regional trading arrange-
ments how enlarge markets to participants.
TOPIC THREE:
MARKET SEGMENTATION,
TARGETING, AND POSI-
TIONING.
3.1 Market
3.1.1 Market -meaning
• Market refers to the set of actual and poten-
tial buyers of the products. It refers to institu-
tions with ability, willingness and authority to
buy goods and services. Previously market was
defined as a place where buyers and seller
meet. This place was a physical place where
buyers can interact face to face. Today we can
distinguish between a marketplace and a mar-
ketspace.
• The marketplace is physical, as when one goes shop-
ping in a store; market-space is digital, as when one
goes shopping on the Internet.
• The concept of market leads us to the concept of mar-
keting systems. In the system, now marketers view the
sellers as the industry and the buyers as the market
(see Figure 1-1). The sellers send goods and services
and communications (ads, direct mail, e-mail mes-
sages) to the market; in return they receive money and
information (attitudes, sales data). The inner loop in
the diagram in Figure 1-1 shows an exchange of money
for goods and services; the outer loop shows an ex-
change of information.
3.1.2 Market Types
There are two major types of markets. These are:-
i. Consumer markets
ii. Business Markets
 Consumer markets consists of buyers who buys
goods for personal use or consumption.
 Business markets consists of all of the organizations
that acquire goods and services used in the produc-
tion of other products or services that are sold,
rented, or supplied to other customers.
3.1.2 Market Types
• Business markets are of various types includ-
ing:-
i. Institutional buyers which consists of schools,
hospitals, nursing homes, prisons, and other
institutions that provide goods and services to
people in their care. Their need are goods
such as foods, towels, bed sheets, mattresses
and services such as elevator services, cleanli-
ness, internet services etc.
3.1.2 Market Types
ii. Government buyers which consists of gov-
ernment ministries and departments.
iii. Industrial markets/buyers- organizations
that buy goods and services for their production
process in order to make profits or achieve other
objectives. For example individuals who took
loans for expanding their capital level to expand
their business activities.
3.1.2 Market Types
iv. Reseller markets- organizations which buy goods
and services in order to resell them. For example
organizations who buy computer in large quantity
and supply to private secondary schools as their
target market.
v. International markets- customers who found abroad
including foreign consumers, producers, resellers and
governments.
Read characteristics of business and consumer mar-
kets.
3.1.2 Market Types
Characteristics of business
3.1.2 Market Types
3.1.2 Market Types
3.1.2 Market Types
3.2 MARKET SEG-
MENTATION, TARGETING,
AND POSITIONING.
3.2.1 Market Segmentation
3.2.1 Market segmentation-mean-
ing
• Market segmentation is a process of dividing a
market into well-defined slices. A market seg-
ment consists of a group of customers who
share a similar set of needs and wants or con-
sumers who respond in a similar way to a
given set of marketing stimuli (price, design,
ads etc). The marketer’s task is to identify the
appropriate number and nature of market
segments and decide which one(s) to target.
3.2.2 Market segmentation-Effective Seg-
mentation Criteria
• Not all segmentation schemes are useful. To
be useful, market segments must rate favor-
ably on five key criteria:
i. Measurable. The size, purchasing power, and
characteristics of the segments can be mea-
sured.
ii. Substantial. The segments are large and prof-
itable enough to serve. A segment should be
the largest possible homogeneous group
mentation Criteria
worth going after with a tailored marketing pro-
gram. It would not pay, for example, for an IT
expert to develop a programmes for people
sufferings from hand amputation.
iii. Accessible. The segments can be effectively
reached and served.
iv. Differentiable. The segments are conceptu-
ally distinguishable and respond differently to
different marketing-mix
mentation Criteria
elements and programs. If married and unmar-
ried women respond similarly to a sale on in-
ternet service package, they do not constitute
separate segments.
v. Actionable. Effective programs can be formu-
lated for attracting and serving the segments.
3.2.3 Basis for Market segmentation-Con-
sumer market
i. Geographic segmentation calls for dividing the
market into different geographical units such
as nations, states, regions, counties, cities, or
neighborhoods. The company can operate in
one or a few geographic areas or operate in all
but pay attention to local variations. Some
marketers even segment down to a specific zip
code.
sumer market
ii. Demographic Segmentation
• Demographic segmentation consists of dividing the
market into groups on the basis of demographic vari-
ables such as age, sex, family size, family life cycle, in-
come, occupation, education, religion, race, and na-
tionality. Demographic variables are the most popular
bases for distinguishing customer groups. One reason
this is the most popular consumer segmentation
method is that consumer wants, preferences, and us-
age rates are often associated with demographic
variables. Another reason is that demographic vari-
ables are easier to measure
sumer market
• Here is how certain demographic variables have been
used to segment consumer markets
• Age-Under 6, 6–11, 12–19, 20–34, 35–49, 50–64, 65
• For example PPF Pension Fund divides its customers
into two broad age groups. The first include people
aged 18-45 years. These are registered under Tradi-
tional Scheme where at the end they receive pension.
The other group aged 46 years and above are regis-
tered under Deposit Administration Scheme and mem-
bers include Tanzania nationals and expatriate. These
do not get pension rather they receive interest from
their contributions. This is segmentation.
sumer market
• Life-cycle stage
People go through the following life cycle stages that
affect pose different opportunities to marketers: Young
singles, childless married couples, full nest- married
couples with children, empty nest and single parents/
solitary survivor. Marketers should also consider critical
life events or transitions—marriage, childbirth, illness,
relocation, divorce, first job, career change, retirement,
death of a spouse—as giving rise to new needs. These
should alert service providers—banks, insurance com-
panies, pension funds, credit companies, and so on,
ways they can help and market their services.
3.2.3 Basis for Market segmentation-
Consumer market
• Family size -1, 1–2, 3–4, 5
• Gender and sex- women prefer products
which are different from those preferred by
men. Housewives also prefer products which
are different to those preferred by working
ones.
• Income- People living below one dollar and
people above one dollar per day.
Consumer market
• Occupation- Professional and technical; managers,
officials, and proprietors; clerical, sales; craftspeo-
ple; forepersons; operatives; farmers; retired; stu-
dents; homemakers; unemployed.
• Education- kindergarten, primary, secondary, post
secondary, graduates, post graduates.
• Religion -Catholic, Protestant, Jewish, Muslim,
Hindu, etc.
• Nationality-Tanzanian, Kenyan, North American,
South American, British, French, German, Italian,
Japanese.
Consumer market
• Race -White, Black, Asian, Hispanic
• Generation- Silent Generation, Baby boomers
(those born between 1946 and 1964), Genera-
tion X (those born between 1964 and 1984),
Millennials (or Gen Y) Born between 1979 and
1994-these consumers have been “wired” al-
most from birth-playing computer games, navi-
gating the Web, downloading music, connecting
with friends via instant messaging and mobile
phones.
sumer market
• Social Class. In societies there are various types of
social classes as explained in previous sessions
such as (1) lower lowers, (2) upper lowers, (3) work-
ing class, (4) middle class, (5) upper middles, (6)
lower uppers, and (7) upper uppers. Social class
members show distinct product and brand prefer-
ences in many areas, including the choice of a cars,
furnitures, bank, bank accounts and insurance
companies and services.
Different demographic segements have different
needs and wants.
sumer market
iii. Psychographic Segmentation
•Psychographics is the science of using psychology
and demographics to better understand consumers.
•In psychographic segmentation, buyers are divided
into different groups on the basis of psychological/
personality traits, lifestyle, or values. People within
the same demographic group can exhibit very dif-
ferent psychographic profiles.
sumer market
i. Lifestyle
• A lifestyle is the person’s pattern of living in the
world as expressed in activities (such as work,
hobbies, shopping, sports , and social events), ,
interests (including food, fashion, family recre-
ation), and opinions ( about themselves, social is-
sues)- (AIOS). Example of lifestyle groups are
such as innovators, thinkers, experiential, societal
conscious and integrated. Successful marketers
search for relationships between their products
and lifestyle groups.
sumer market
• Innovators- Successful, sophisticated, active, “take-
charge” people with high self-esteem. Purchases often
reflect cultivated tastes for relatively upscale, niche-
oriented products and services-.
• Thinkers- Mature, satisfied, and reflective people moti-
vated by ideals and who value order, knowledge, and
responsibility. They seek durability, functionality, and
value in products.
• Experiential- Young, enthusiastic, impulsive people
who seek variety and excitement they spend a com-
paratively high proportion of income on fashion, enter-
tainment, and socializing.
• Achievers- Successful, goal-oriented people who focus
on career and family. They favor premium products
that demonstrate success to their peers.
sumer market
ii. Personality
• Personality is usually described in terms of
such traits as self-confidence, dominance, au-
tonomy, deference, sociability, defensiveness,
and adaptability. Personality can be useful in
analyzing consumer behavior, provided that
personality types can be classified accurately
and that strong correlations exist between
certain personality types and product or brand
choices.
sumer market
iv. Behavioral Segmentation
• Behavioral occasions- Buyers can be distin-
guished according to the occasions on which
they develop a need, purchase a product, or
use a product. Regular occasion, special occa-
sion. For example which period of the year do
people spend mostly? Apply for loans?
• Benefits- Quality, service, economy, speed
• User status- Nonuser, ex-user, potential user,
first-time user, regular user.
sumer market
• Usage rate -Light user, medium user, heavy user
• Loyalty status- (1) hard-core loyals (who always
buy one brand), (2) split loyals (who are loyal to
two or three brands), (3) shifting loyals (who shift
from one brand to another, and (4) switchers
(who show no loyalty to any brand)
• Readiness stage- Unaware, aware, informed in-
terested, desirous, intending to buy
• Attitude toward product- Enthusiastic/excited,
positive, indifferent, negative, hostile.
Business Markets
• Business markets can be segmented with some
variables that are employed in consumer market
segmentation, such as geography, benefits sought,
and usage rate. Yet business marketers can also use
several other variables. These includes:-
i. Demographic
• Industry: Which industries should we serve?
• Company size: What size companies should we
serve?
• Location: What geographical areas should we
serve?
3.2.4 Basis for Market segmenta-
tion- Business Markets
ii. Operating Variables
• Technology: What customer technologies should
we focus on?-music, mobile phones, computer, se-
curity systems.
• User or nonuser status: Should we serve heavy
users, medium users, light users, or nonusers?
• Customer capabilities: Should we serve customers
needing many or fewer services?
Business Markets
iii. Purchasing Approaches
• Purchasing-function organization: Should we serve
companies with highly centralized or decentralized
purchasing organizations?
• Power structure: Should we serve companies that
are engineering dominated, financially dominated,
and so on?
• Nature of existing relationships: Should we serve
companies with which we have strong relationships
or simply go after the most desirable companies?
Business Markets
• General purchase policies: Should we serve com-
panies that prefer leasing? Service contracts? Sys-
tems purchases? Sealed bidding?
• Purchasing criteria: Should we serve companies
that are seeking quality? Service? Price?
vi. Situational Factors
• Urgency: Should we serve companies that need
quick and sudden delivery or service?
• Size of order: Should we focus on large or small or-
ders?
Business Markets
v. Personal Characteristics
• Buyer–seller similarity: Should we serve companies
whose people and values are similar to ours?
• Attitudes toward risk: Should we serve risk-taking
or risk-avoiding customers?
• Loyalty: Should we serve companies that show high
loyalty to their suppliers?
3.3: MARKET TARGET-
ING, AND POSITIONING
3.3 Market Targeting
• Target market is a set of buyers sharing common
needs or characteristics that the company decides
to serve.
• Market targeting is the process of evaluating each
market segment’s attractiveness and selecting one
or more segments to enter. There are various mar-
keting targeting approach. These includes:-
i. Full Market Coverage-with full market coverage, a
firm attempts to serve all customer groups with all
the products they might need. Only very large firms
such as Microsoft (software market
• General Motors (vehicle market), and Coca-Cola
(nonalcoholic beverage market) can undertake a full
market coverage strategy. Large firms can cover a
whole market in two broad ways: through differen-
tiated or undifferentiated marketing.
• In undifferentiated or mass marketing, the firm ig-
nores segment differences and goes after the whole
market with one offer. It designs a marketing pro-
gram for a product with a superior image that can
be sold to the broadest number of buyers via mass
distribution and mass communications. For example
a company sells computer to Tanzania customers.
Undifferentiated marketing is appropriate when all
consumers have roughly the same preferences and
the market shows no natural segments.
• In differentiated marketing, the firm sells different
products to all the different segments of the mar-
ket. For example a company selling different prod-
ucts such as computer, projectors, cameras, printers
to different market segments such as lecturers,
mc’s, studio owners, and students. Intel does this
with chips and programs for consumer, business,
small business, networking, digital imaging, and
video markets
ii. Multiple Segment Specialization- With selective
specialization, a firm selects a subset of all the pos-
sible segments, each objectively attractive and ap-
propriate. There may be little or no synergy among
the segments, but each promises to be a Money-
maker (For example selling computer to studio
owners, projectors to mc’s, cameras to student, and
printers to lecturers).
• With product specialization, the firm sells a certain
product to several different market segments with
market specialization, the firm concentrates on
serving many needs of a particular customer group,
such as by selling an assortment of products only to
university laboratories or selling computer, projec-
tors, cameras, printers to Mc’s.
iii. Single-Segment Concentration -With single-seg-
ment concentration, the firm with different prod-
ucts and different market segments sells to only
one particular segment. For example a company
selling different products such as computer, projec-
tors, cameras, printers and with different market
segments such as lecturers, mcs, studio owners,
students; decide to sell cameras only to studio
owners only.
The various marketing targeting approaches can be
seen in figure 1.
Figure 1. Market Targeting Approaches

3.4: MARKET POSITION-
ING
3.4 Market Positioning
• After market segmentation and targeting each
firm needs to develop a distinctive positioning
for its market offering.
• Positioning is the act of designing the com-
pany’s offering and image to occupy a distinc-
tive place in the target market’s mind. The end
result of positioning is the successful creation
of a market-focused value proposition, a sound
reason why the target market should buy the
product.
• But positioning is not what you do to a prod-
uct. Positioning is what you do to the mind of
the prospect. That is, you position the prod-
uct in the mind of the prospect.” Benz, for
example, holds the position of world’s quality
cars manufacturer, Range Lover and BMW,
Force 1-Expensive and Luxurious Cars, Mar-
copolo-Buses Manufacturers, Raha Leo-Tanga
Bus Services.
• Each brand should pick an attribute and claim it-
self to be "number one" on it. What are some of
the "number one" positions to promote? The ma-
jor ones are "best quality", "best service", "best
value", “most advanced technology” most
durable, Speedy etc. If a company hammers at
any one of these positioning points and delivers
it properly, it will probably be best known and re-
called for this strength.
• Once the company has developed a clear posi-
tioning strategy, it must communicate that posi-
tioning effectively through all facets of the mar-
keting mix and every point of contact with cus-
tomers. Suppose a service company chooses the
“best-in-quality” strategy. A good example is Ritz
Carlton hotels, which signals high quality by
training its employees to answer calls within
three rings, to answer with a genuine “smile” in
their voices, and to be extremely knowledgeable
about all hotel information.
• Quality is also communicated by choosing those
physical signs and cuts that people normally use
to judge quality such as existing environment
and facilities.
• A high price usually signals a premium-quality
product to buyers.
• The product's quality image is also affected by
the packaging, distribution, advertising and
promotion. The manufacturer’s reputation also
contributes to the perception of quality.
TOPIC FOUR: CONSUMER
BEHAVIOUR
4.1 Introduction
4.1 Introduction
• Market may be defined in various ways. One
definition looks at market as the set of actual
and potential buyers of the products. Another
definition looks at market as group of individ-
uals, organizations or both who have needs for
products in a given category and who have the
ability, willingness and authority to purchase
such products.
4.1 Introduction
• Markets could broadly be classified into con-
sumer and organizational markets.
• Consumer market consists of all the individu-
als and households who buy or acquire goods
and services for personal consumption/use.
4.1 Introduction
• Organizational/business markets consists of all
the organizations that acquire goods and ser-
vices used in the production of other products
or services that are sold, rented, or supplied
to others. The major industries making up the
business market are agriculture, forestry, and
fisheries; mining; manufacturing; construc-
tion; transportation; communication; public
utilities; banking, finance, and insurance; dis-
tribution; and services.
4.2 Model of Consumer buying behav-
ior
• Consumer behavior is the study of how individu-
als, groups, and organizations select, buy, use,
and dispose of goods, services, ideas, or experi-
ences to satisfy their needs and wants.
• The starting point for understanding consumer
buying behavior is the stimulus response model.
As this model shows, both marketing and envi-
ronmental stimuli enter the buyer’s conscious-
ness. In turn, the buyer’s characteristics and deci-
sion process lead to certain purchase decisions.
4.2 Model of Consumer buying behav-
ior
• The marketer’s task is to understand what
happens in the buyer’s consciousness be-
tween the arrival of outside stimuli and the
buyer’s purchase decisions. As this model indi-
cates, a consumer’s buying behavior is influ-
enced by cultural, social, personal, and psy-
chological factors.
4.2 Model of Consumer buying behavior
• From the model, manufacturer prepare a qual-

ity and modern product (technological) as per
demand (willingness and ability to buy-eco-
nomic) and per prevailing rules and regula-
tions (political) and make it known to the cus-
tomers (stimuli) –a youth (buyer characteris-
tics) –search for the information about the
product (buying decision)-and buy a product in
certain quantity at a particular period of time
(response)
4.2.2 Factors influencing consumer
behavior
• Consumers do not make decisions in a vac-
uum. Their purchases are strongly influenced
by cultural, social, personal, and psychological
factors. For the most part they are control-
lable by the marketer, but must be taken into
account.
behavior
2.2.2.1 Cultural Factors
•Culture, subculture, and social class are particu-
larly important influences on consumer buying
behavior.
i. Culture
•Culture is the learned values (conscious percep-
tions about what is good or bad, right or wrong),
perceptions, wants, and behavior form and so-
cial classes.
behavior
• Culture is the fundamental determinant of a
person’s wants and behavior.
• The child growing up in a society learns a ba-
sic set of values, perceptions and behaviors
through the process of socialization involving
the family.
• Children growing in different countries are ex-
posed to different cultural values.
behavior
• United States-achievement and success, activ-
ity, efficiency and practicality, progress, mate-
rial comfort, individualism, freedom, external
comfort, humanitarianism, and youthfulness.
• Chinese-work, independence.
• Tanzania-humanity, neighborhood
• All these affects purchase behavior
behavior
ii. Subcultures
• Each culture consists of smaller subcultures that
provide more specific identification and socializa-
tion for their members. Subcultures include na-
tionalities (such as the Tanzanian, Kenyans, Irish,
Polish, Italians, Chinese (reptiles meat), and
Puerto Ricans all exhibit distinct ethnic tastes) re-
ligions (Muslims (Halal meat), Catholics, Angli-
cans, Presbyterians (not necessarily Halal) and
Jews represent subcultures with specific prefer-
ences and taboos), racial groups
behavior
• (such as blacks and Red Indians have distinct
culture styles and attitudes) , and geographic
regions (e.g in Tanzania Southern people,
Coastal people or Lake zone people all are dis-
tinct subcultures with characteristic life style).
behavior
• Person’s interest in various goods will be influ-
enced by nationality, religion, race, and geo-
graphical background.
• These factors will influence person’s choice of
food, clothing choices, recreation, and career
aspirations.
behavior
iii. Social Class
• Virtually all human societies exhibit social
stratification, most often in the form of social
classes, relatively homogeneous and enduring
divisions in a society, hierarchically ordered
and with members who share similar values,
interests, and behavior.
behavior
• One classic depiction of social classes views
social classes divided into: (1) lower lowers,
(2) upper lowers, (3) working class, (4) middle
class, (5) upper middles, (6) lower uppers, and
(7) upper uppers.
• Social class members show distinct product
and brand preferences in many areas, includ-
ing clothing, home furnishings, leisure activi-
ties, and automobiles.
behavior
• They also differ in media preferences; upper-
class consumers often prefer magazines and
books, and lower-class consumers often prefer
television.
• Even within a category such as TV, upper-class
consumers may show greater preference for
news and drama, whereas lower-class con-
sumers may lean toward reality shows and
sports.
behavior
2.2.2.2 Social Factors
• In addition to cultural factors, social factors such
as reference groups, family, and social roles and
statuses affect our buying behavior.
(i) Reference Groups
• A person’s reference groups are all the groups
that have a direct (face to- face) or indirect influ-
ence on their attitudes or behavior.
• Belonging groups
 Groups having a direct influence are called mem-
bership groups.
behavior
 Some of these are primary groups with whom
the person interacts fairly continuously and in-
formally, such as family, friends, neighbors,
and coworkers.
 People also belong to secondary groups, such
as religious, professional, and trade-union
groups, which tend to be more formal and re-
quire less continuous interaction.
behavior
• Un belonging groups
 People are also influenced by groups to which
they do not belong, aspirational groups are
those a person wishes or aspires to belong, for
example, a teenage football player may hope
to play someday for Yanga or Simba Sports
clubs; dissociative groups are those whose
values or behavior an individual rejects.
behavior
• Where reference group influence is strong,
marketers must determine how to reach and
influence the group’s opinion leaders.
 An opinion leader is the person who offers in-
formal advice or information about a specific
product or product category, such as which of
several brands is best or how a particular
product may be used.
behavior
• Opinion leaders are often highly confident, so-
cially active, and frequent users of the cate-
gory. Marketers try to reach them by identify-
ing their demographic and psychographic
characteristics, identifying the media they
read, and directing messages to them.
behavior
• Reference groups influence members in at
least three ways.
They expose an individual to new behaviors
and lifestyles,
they influence attitudes and self-concept, and
 they create pressures for conformity that may
affect product and brand choices.
behavior
ii. Family
• The family is the most important consumer buy-
ing organization in society, and family members
constitute the most influential primary reference
group. There are two families in the buyer’s life.
• The family of orientation consists of parents and
siblings. From parents a person acquires an orien-
tation toward religion, politics, and economics
and a sense of personal ambition, self-worth, and
love.
behavior
• Even if the buyer no longer interacts very much
with his or her parents, parental influence on be-
havior can be significant.
• A more direct influence on everyday buying be-
havior is the family of procreation—namely, the
person’s spouse and children.
• Spouses can influence each other towards the
choice of different products.
• Children can also influence parents towards buy-
ing.
behavior
• Purchase roles also varies with the member of
family
• Wife has usually acted as the family’s main pur-
chasing agent, especially for food, sundries, and
staple clothing items (Wife-dominant role).
• Husbands-electronics products, life insurance
(husband-dominant role)
• Joint-services such as cars, vacations, or housing,
(Syncratic role)
• Personal purchase-personal care items (Auto-
nomic role)
behavior
• The marketer needs to determine which
member normally has the greater influence on
the purchase of a particular product or ser-
vice.
iii. Roles and Statuses
• A role consists of the activities a person is ex-
pected to perform. Each role in turn connotes
a status
behavior
• A senior vice president of marketing may be seen
as having more status than a sales manager, and
a sales manager may be seen as having more sta-
tus than an office clerk.
• People choose products that reflect and commu-
nicate their role and their actual or desired status
in society. Thus the company presidents will drive
Mercedes and Cadillac automobiles, wear expen-
sive. Marketers must be aware of the status-sym-
bol potential of products and brands.
behavior
2.2.2.3 Personal Factors
• These includes personal characteristics like
age and stage in the life cycle, occupation and
economic circumstances, personality and self-
concept, and lifestyle and values.
• Because many of these have a direct impact
on consumer behavior, it is important for mar-
keters to follow them closely.
behavior
i. Age and Stage in the Life Cycle
• People change goods and services they buy
over their lifetime.
• Tastes in food, clothes, furniture and recre-
ation are often age related.
• They eat baby food in early years, most foods
in the growing and mature years and special
diets in later years.
behavior
• Buying is also shaped by the stage of their life
cycle.
• People go through the following life cycle
stages that affect consumption behavior:
Young singles, childless married couples, full
nest-married couples with children, empty
nest and single parents/solitary survivor.
• Each stage may have different influence on
buying behavior.
behavior
 Marketers should also consider critical life
events or transitions—marriage (special suits
and gowns), childbirth (baby cribs, milk pump-
ing machine), illness (special diet, wheel
chairs), relocation (safe transport for proper-
ties), divorce (small house), first job
(wardrobes, accommodation), career change,
retirement (post work training), death of a
spouse (funeral services)—as giving rise to
new needs.
behavior
 These should alert service providers-banks,
lawyers, and marriage, employment, and be-
reavement (mourning-) counselors—to ways
they can help.
behavior
behavior
• For example, the wedding industry attracts
`marketers of a whole host of products and
services.
ii. Occupation and Economic Circumstances
• Occupation also influences a person’s con-
sumption pattern. Mechanics may buy special
uniforms for them, while a company president
will buy expensive suits and a country club
membership.
behavior
• For this reason, marketers should identify the
occupational groups that are more interested
in their products and services, and consider
specializing their products for certain occupa-
tions-lawyers-suits??.
• Software manufacturers, for example, have
developed special programs for accountants,
valuers, lawyers, physicians, and other occupa-
tional groups.
behavior
• In addition, product choice is greatly affected
by a consumer’s economic circumstances:
spendable income (level, stability, and time
pattern), savings and assets (including the per-
centage that is liquid), debts, borrowing
power, and attitude toward spending versus
saving.
behavior
• Thus, marketers of income-sensitive goods
must track trends in personal income, savings,
and interest rates. If a recession is likely, mar-
keters can redesign, reposition, and reprice
their products to offer more value to target
customers.
behavior
iii. Lifestyles
• People from the same subculture, social class, and
occupation may actually lead quite different life-
styles. A lifestyle is the person’s pattern of living in
the world as expressed in activities (such as work,
hobbies, shopping, sports , and social events), inter-
ests (including food, fashion, family recreation), and
opinions (about themselves, social issues)- (AIOS).
• Consumption of different products depends on con-
sumers’ lifestyle.
behavior
• Example of lifestyle groups are survivors, sus-
tainers (need driven consumers), belongers,
emulators, achievers (outer-directed), I-am-
mes, experiential, societal conscious (inner-di-
rected) and integrated (combined outer and
Inner directed)
• Successful marketers search for relationships
between their products and lifestyle groups.
behavior
iv. Personality and Self-Concept
• Personality-each person has a distinct personality
that influences buying behavior. Personality refers to
the distinguishing psychological/mental characteris-
tics that lead to relatively consistent and enduring re-
sponses to environment. Personality is usually de-
scribed in terms of such traits as self-confidence,
dominance, autonomy, deference, sociability, defen-
siveness, and adaptability.
• Products bought and consumed may depend on
those characteristics.
behavior
• For example, coffee makers have discovered
that heavy coffee drinkers tend to be high on
sociability. Thus Nescafé ads show people to-
gether over a cup of coffee.
• For example, a computer company might dis-
cover that many prospects show high self-con-
fidence, dominance, and autonomy, suggest-
ing that computer ads should appeal to these
traits.
behavior
• Self-concept (or self-image) is related to person-
ality and it also influence consumer behavior.
Marketers often try to develop brand images that
match the target market’s self-image. Yet it is
possible that a person’s actual self-concept (how
she views herself) differs from her ideal self-con-
cept (how she would like to view herself or image
to which the individual aspires-the major motive
for buying) and from her others-self-concept
(how she thinks others see her).
behavior
• Consumer behavior is highly influenced by con-
sumer self concept.
• Say a young woman views herself as bright, ambi-
tious, and headed for a successful career. She’ll
want to buy attractive clothes and jewelry to re-
flect that image of herself.
• Say an older man views himself as young for his
age; he may purchase a sports car and stylish
clothes, chatting terminologies to reflect his self-
concept.
behavior
• However it is no such easy to establish which
self will one try to satisfy in making a pur-
chase.
behavior
iv. Psychological Factors- Psychological factors
are the fourth major influence on consumer
buying behavior (in addition to cultural, social,
personal and personality factors). In general, a
person’s buying choices are influenced by the
psychological factors of motivation, percep-
tion, learning, beliefs, and attitudes.
behavior
Motivation- A person has many needs at any
given time. Some needs are biogenic; they
arise from physiological states of tension such
as hunger, thirst, discomfort. Other needs are
psychogenic; they arise from psychological
states of tension such as the need for recogni-
tion, esteem, or belonging.
behavior
• A motive is a need that is sufficiently pressing
to drive the person to act. Abraham Maslow
sought to explain why people are driven by
particular needs at particular times. His theory
is that human needs are arranged in a hierar-
chy, from the most to the least pressing. In or-
der of importance, these five categories are
physiological, safety, social, esteem, and self-
actualization needs.
behavior
• A consumer will try to satisfy the most impor-
tant need first; when that need is satisfied, the
person will try to satisfy the next-most-press-
ing need.
• Maslow’s theory helps marketers understand
how various products fit into the plans, goals,
and lives of consumers.
behavior
• The implication of this statement is that a per-
son can not think of buying a laptop for educa-
tion purpose while this person is not even in a
position to buy a daily lunch for him or when
is often faced with a threats from his landlord
for possible eviction due to failure to pay a six
months rents. Once he/she solve such press-
ing needs she/he starts thinking of the com-
puter.
behavior
Perception- Perception is the meaning that a
person attributes to incoming stimuli gathered
through the five senses—sight, hearing, touch,
taste, and smell. Certainly a buyer’s behavior
is influenced by his or her perceptions of a
good or service. Researchers now recognize
that people’s perceptions depend as much on
what they want to perceive as on the actual
stimuli.
behavior
• Through research, marketers have learned
that people are more likely to notice stimuli
that relate to a current need, which is why
computer shoppers notice computer ads but
not appliance ads. The end result is that mar-
keters have to work hard to attract consumers’
attention.
behavior
Attitude-Perception of incoming stimuli is
greatly affected by attitudes. In fact, a con-
sumer’s decision to purchase an item is
strongly based on his or her attitude about the
product, store, or salesperson.
• Attitudes are a person’s enduring favorable or
unfavorable evaluations, emotions, or action
tendencies toward some object or idea.
behavior
• As they form over time through individual experi-
ences and group contacts, attitudes become
highly resistant to change. Attitudes influence the
way we choose different products. People for ex-
ample have attitudes that Apple products are of
high class people. Such attitude may limit the
market for apple products. Because favorable at-
titudes likely affect brand preferences, marketers
are interested in determining consumer attitudes
toward their offerings.
4.3 Consumer Buying Process
i. Problem Recognition
•The buying process starts when the buyer recognizes a
problem or need triggered by internal or external stim-
uli. With an internal stimulus, one of the person’s nor-
mal needs-hunger, thirst, sex-rises to a threshold level
and becomes a drive. A need can also be aroused by an
external stimulus. A person may admire a friend’s new
car or see a television ad for a Zanzibar vacation, which
inspires thoughts about the possibility of making a pur-
chase.
ii. Information Search
•After having a need, consumer search information
about the goods or service. Major information
sources to which consumers will turn fall into four
groups: Personal. Family, friends, neighbors, ac-
quaintances; Commercial. Advertising, Web sites,
salespersons, dealers, packaging, displays; Public.
Mass media, consumer-rating organizations; Expe-
riential. Handling, examining, using the product.
• The relative amount and influence of these sources
vary with the product category and the buyer’s char-
acteristics.
• Generally speaking, although consumers receive the
greatest amount of information about a product
from commercial-that is, marketer-dominated-
sources, the most effective information often comes
from personal or experiential sources, or public
sources that are independent authorities.
Each source performs a different function in influencing
the buying decision.
Commercial sources normally perform an information
function.
Personal sources perform a legitimizing or evaluation
function. For example, bus owners often learn of new
types of tires from commercial sources but turn to
other mechanics for evaluations.
iii. Evaluation of Alternatives
•How does the consumer process competitive brand in-
formation and make a final value judgment? No single
process is used by all consumers, or by one consumer in
all buying situations.
•Some basic concepts will help us understand consumer
evaluation processes:
•First, the consumer is trying to satisfy a need.
•Second, the consumer is looking for certain benefits
from the product solution.
• Third, the consumer sees each product as a bundle of
attributes with varying abilities to deliver the bene-
fits. The attributes of interest to buyers vary by prod-
uct-for example:.
• Bus-comfort, speed, customer service, punctuality
• Hotels-Location, cleanliness, atmosphere, price
• Mouthwash-Color, effectiveness, germ-killing capac-
ity, taste/flavor, price
• Tires-Safety, tread life, ride quality, price
During evaluation, consumers will pay the most atten-
tion to attributes that deliver the sought-after bene-
fits.
iv. Purchase Decision
•In the evaluation stage, the consumer forms prefer-
ences among the brands in the choice set and may also
form an intention to buy the most preferred brand. In
executing a purchase intention, the consumer may
make up to five sub decisions: brand (Air Tanzania),
dealer (where tickets are available) (online booking/
designated office), quantity (go only or go and return?),
timing (end of the year? safari on duty ?any time?), and
payment method (cash/mobile payment/credit card).
v. Post-purchase Behavior
•After the purchase, the consumer might experience
dissonance from noticing certain disquieting features or
hearing favorable things about other brands and will be
alert to information that supports his or her decision.
Marketing communications (e.g advertising and sales
promotions) should supply beliefs and evaluations that
support the consumer’s choice and help him or her feel
good about the brand. The marketer’s job therefore
doesn’t end with the purchase. Marketers must moni-
tor post-purchase satisfaction, post-purchase actions,
and post-purchase product uses and disposal (read).
4.4 Buying Roles
People play five roles in a buying decision
Initiator. The person who first suggests or thinks of
the idea of buying a particular product or service. This
could be a parent or friend.
Influencer. A person whose view or advice influences
the buying decision, perhaps a friend or a salesperson.
Decider. The person who ultimately makes a buying
decision or any part of it – whether to buy, what to
buy, how to buy or where to buy.
4.4 Buying Roles
 Buyer. The person who makes an actual purchase.
Once the buying decision is made, someone else
could make the purchase for the decider.
 User. The person who consumes or uses a product or
service like family members.
4.4 Buying Roles
• For example, assume a child initiates a journey to par-
ticular national park. His father may then seek informa-
tion from many sources, including his best friend who
ever went in the previous holiday and is a key influ-
encer in what destination to go. After presenting the
alternative choices to his wife, she agree to go to a
particular destination(decider/buyer) which ends up
being used/enjoyed by the entire family. Different peo-
ple are playing different roles, but all are crucial in the
decision process and ultimate consumer satisfaction.
4.5 Buying Situations
• In Complex buying behavior buyers may not
know what attributes to consider in these
products, so they do research. Knowing this,
marketers can help educate buyers about
product attributes, differentiate and describe
the brand’s features, and motivate store per-
sonnel and others to influence the final brand
choice.
• In Dissonance-reducing buyer behavior as af-
ter buying, the consumer might experience
dissonance after noticing certain disquieting
features or hearing favorable things about
other brands. Marketers should therefore
supply beliefs and evaluations that help con-
sumers feel good about their brand choices.
• In Habitual buying behavior marketers of such prod-
ucts can use price and sales promotions to entice
new customers to try their products.
• In Variety-seeking buying behavior the market
leader will therefore try to encourage habitual buying
behavior by dominating the shelf space, keeping
shelves stocked, and running frequent reminder ads.
Challenger firms will encourage variety seeking by of-
fering lower prices, coupons, free samples, and ads
that offer reasons for trying something new.
TOPIC FIVE: MARKETING MIX ELE-
MENTS
5.1 Product
5.1 Introduction
• A product is anything that can be offered to a
market to satisfy a want or need, including
physical goods (coke), services (legal), experi-
ences (management skills, marketing),events
(fiesta), persons (A-Y/Celebrities), places (DSM
Zoo), properties (PPF Tower), organizations
(NIT), information (how to reduce body
weight), and ideas (new product).
5.2 Product Levels
• In planning its market offering, the marketer
needs to address five product levels. Each
level adds more customer value, and the five
constitute a customer-value hierarchy.
5.2 Product Levels
(i) The fundamental level is the core benefit:

the service or benefit the customer is really
buying. A hotel guest is buying rest and
sleep. The purchaser of a drill is buying
holes. Purchaser of VITs/Passo is buying
economy movement.
• Marketers must see themselves as benefit
providers.
5.2 Product Levels
(ii) At the second level, the marketer must turn

the core benefit into a basic product or the
marketer here do what is required to meet the
core benefit. Thus a hotel room includes a
bed, bathroom, towels, desk, dresser, and
closet/privacy.
How about VITs/Passo???????????
5.2 Product Levels
(iii) At the third level, the marketer prepares an

expected product, a set of attributes and con-
ditions buyers normally expect when they
purchase this product. Hotel guests minimally
expect a clean bed, fresh towels, working
lamps, and a relative degree of quiet.
5.2 Product Levels
(iv). At the fourth level, the marketer prepares
an augmented product that exceeds customer
expectations. In developed countries, brand
positioning and competition take place at this
level.
• In developing and emerging markets such as
India and Brazil, however, competition takes
place mostly at the expected product level.
• Offering of things like helicopter transport to
the hotel, reliable internet, dstv decoder per
room etc.
5.2 Product Levels
(v) At the fifth level stands the potential prod-
uct, which encompasses all the possible aug-
mentations and transformations the product
or offering might undergo in the future.
• Here is where companies search for new ways
to satisfy customers and distinguish their of-
fering-put laptops with fast internet in your
hotels, new clothes where customer can
choose??.
5.2 Product Levels
• Whether it is a basic, expected, or augmented
products it depends with customer awareness
and consciousness.
5.2 Product Levels
5.3 Introduction on new product
• Once a company has carefully segmented the
market, chosen its target customers, identified
their needs, and determined its market posi-
tioning, it is better able to develop new prod-
ucts.
• A new product is the one which is perceived
by customer as new.
5.3 Introduction on new product
• Marketers play a key role in the new-product
process, by identifying and evaluating new-
product ideas and working with R&D and oth-
ers in every stage of development.
5.4 Why new products
Every company must develop new products.

• New-product development shapes the com-
pany’s future.
• Replacement products must be created to
maintain or build sales.
• Customers want new products, and competi-
tors will do their best to supply them.
5.5 Sources of new products
A company can add new products through
acquisition or development.
The acquisition route can take three forms.
i.The company can buy other companies
(TBL buying of Chibuku),
ii.It can acquire patent (right to produce a
product) from other companies-very
common in pharmaceutical industry
iii. It can buy a license issues (allow/license to a
foreign company to use a manufacturing
process, trademark, patent, trade secret, or
other item of value for a fee or royalty. The
licensor gains entry at little risk; the licensee
gains production expertise or a well-known
product or brand name- Coca Cola Tz) or
franchise from another company.
(franchising, a more complete form of licensing.
The franchisor offers a complete brand con-
cept and operating system. In return, the
franchisee invests in and pays certain fees to
the franchisor. McDonald’s, Ramada, and
Avis have entered scores of countries by
franchising their retail concepts and making
their marketing culturally relevant.
The development route can take two forms.
i. The company can develop new products in its
own laboratories.
ii.Or it can contract with independent re-
searchers or new-product-development firms
to develop specific new products.
5.6 Categories of new products
Six categories of new products are often
identified:-
i.New-to-the-world products: New products
that create an entirely new market-iPod,
iPad, nutrients products,drones.
ii.New product lines: also known as New-to-
the-firm Products. New products that al-
low a company to enter an established
market for the first time, Bakhresa Milk or
Juices,TBL-maltiza.
iii. Additions to existing product lines: New
products that supplement a company’s es-
tablished product lines (package sizes, fla-
vors, and so on-Fanta pineapple,).
vi. Improvements and revisions of existing
products: New products that provide im-
proved performance or greater perceived
value and replace existing products (new
versions of sumsung phones).
v. Repositioning: Existing products that are tar-
geted to new markets or market segments-e.g.
Johnson & Johnson’s Baby Shampoo for adults
as well as youngsters.
vi. Cost reductions: New products that provide
similar performance at lower cost (200mls
drinks instead of 350mls). May be more of a
“new product” in terms of design or production
than marketing.
Read: Product Classification
4.7 Product Development Process
• New-product development is an act of innova-
tion which entails a process of identifying,
creating and delivering new-product values or
benefits that were not offered before in the
marketplace.
• The PDP is a step by step endeavor under
which a new product pass until its introduc-
tion in the marketplace. It include the follow-
ing activities.
1. Generating Ideas
• The new-product development process starts
with the search for ideas. This involve uncover-
ing the best possible set of unmet customer
needs or technological innovation.
New-product ideas can come from many
sources: customers, scientists, competitors,
employees, channel members, and top man-
agement. Other sources for new product ideas
include trade magazines, shows, and semi-
nars, government agencies, new product con-
sultants, advertising agencies, marketing re-
search firms, universities and commercial lab-
oratories, and inventors.
2. Idea Screening
• Any company can attract good ideas by orga-
nizing itself properly. The company should mo-
tivate its employees to submit their ideas to
an idea manager whose name and phone
number are widely circulated.
• Ideas should be written down and reviewed
each week by an idea committee, which sorts
them into three groups: promising ideas, mar-
ginal ideas, and rejects. Each promising idea is
researched by a committee member, who re-
ports back to the committee.
.
• The surviving promising ideas then move into
a full-scale screening process. The company
should reward employees submitting the best
ideas. In screening ideas, the company must
avoid two types of errors. A DROP-error occurs
when the company dismisses an otherwise
good idea as it is extremely easy to find fault
with other people’s ideas; and
• If a company makes too many DROP-errors, its
standards are too conservative.
• A GO-error occurs when the company permits
a poor idea to move into development and
commercialization. We can distinguish three
types of product failures.
i. An absolute product failure loses money; its
sales do not cover variable costs.
ii. A partial product failure loses money, but its
sales cover all its variable costs and some of
its fixed costs.
iii. A relative product failure yields a profit that
is less than the company’s target rate of re-
turn.
3. Concept Development and Testing
• Attractive ideas must be refined into testable
product concepts. A product idea is a possible
product the company might offer to the mar-
ket. A product concept is an elaborated ver-
sion of the idea expressed in meaningful con-
sumer terms.
• (i) Concept development-A product idea can
be turned into several concepts by asking a
number of questions. For example a company
want to introduce a fuel-cell-powered electric
car (idea).
 The first question for example is: Who will use
this product? The product can be aimed at
youth, first family car buyers, businesspeople,
workers, students, everybody, etc.
 Second, what primary benefit should this
product provide? comfort, convenience,
speed, economy, services, environment pro-
tection, space? youthfulness?
 Third, at when/where will this car be used?
around the town? Trans-country? Special oc-
casions?
• Concept 1. A moderately priced subcompact
designed as a second family car to be used
around town. The car is ideal for running er-
rands and visiting friends.
• Concept 2. A medium-cost sporty compact ap-
pealing to young people.
• Concept 3. An inexpensive subcompact ‘green’
car appealing to environmentally conscious
people who want practical transportation and
low pollution.
• Concept 5. A high-end sports utility vehicle
(SUV) appealing to those who love the space
SUVs provide but lament the poor petrol
mileage.
(ii) Concept Testing
• This calls for testing the concepts with an ap-
propriate group of target customers. The con-
cepts can be presented symbolically or physi-
cally. A word or a picture description can be
good.
For concept 3.
• In concept testing, consumers are presented
with an elaborated version of each concept.
Consumers are then asked to react to the con-
cept through number of questions such as
those provided in the next slide.
4. Marketing Strategy Development
• After testing, the new-product manager must
develop a preliminary marketing-strategy plan
for introducing the new product into the mar-
ket. The plan consists of three parts.
(i) The first part describes the target market’s
size, structure, and behavior; the planned
product positioning; and the sales, market
share, and profit goals sought in the first few
years.
(ii) The second part outlines the planned price,
distribution strategy (door to door or), and
marketing budget for the first year:
(iii) The third part of the marketing-strategy plan
describes the long-run sales and profit goals
and marketing-mix strategy over time.
5. Business Analysis
• After management develops the product con-
cept and marketing strategy, it can evaluate
the proposal’s business attractiveness. Busi-
ness analysis involves a review of the sales,
costs and profit projections for a new product
to find out whether they satisfy the company’s
objectives
• If they do, the product proceeds to the prod-
uct development stage. As new information
comes in, the business analysis will undergo
revision and expansion. To estimate sales, the
company looks at the sales history of similar
products and conducts surveys of market opin-
ion. It then estimates minimum and maximum
sales to assess the range of risk.
• After preparing the sales forecast, manage-
ment can estimate the expected costs and
profits for the product, including marketing,
R&D, manufacturing, accounting and finance
costs. The company then uses the sales and
costs figures to analyse the new product’s fi-
nancial attractiveness.
6. Product Development
• If the product concept passes the business
test, it moves to R&D or engineering to be de-
veloped into a physical product. Up to now it
has existed only as a word description, a draw-
ing, or a prototype. This step involves a large
jump in investment that dwarfs the costs in-
curred in the earlier stages.
• At this stage the company will determine
whether the product idea can be translated
into a technically and commercially feasible
product. If it cannot, the accumulated project
cost will be lost except for any useful informa-
tion gained in the process.
• The R&D department will develop one or
more physical versions of the product concept.
Its goal is to find a prototype that consumers
see as embodying the key attributes described
in the product-concept statement, that per-
forms safely under normal use and conditions,
and that can be produced within the budgeted
manufacturing costs.
• When the prototype are ready, they must be
tested. Functional tests are conducted under
laboratory and field conditions to make sure
that the product performs safely and effec-
tively. Consumer tests involve asking con-
sumers to test the product and rate its at-
tributes. If the product passes functional and
consumer testing, the next step is market test-
ing.
7. Market Testing
• After management is satisfied with functional
and psychological performance, the product is
ready to be dressed up with a brand name and
packaging, and put to a market test. Is the
stage where the product and marketing pro-
gram is introduced into more realistic market-
ing settings.
• The new product is introduced into an authen-
tic setting to learn how large the market is and
how consumers and dealers react to handling,
using, and repurchasing the product.
• The amount of test marketing needed varies
with each new product. Test marketing costs
can be enormous.
• It takes time that may allow competitors to
gain advantages. When the costs of develop-
ing and introducing the product are low or
when management is already confident that
the new product will succeed, the company
may do little or no test marketing. Companies
often do not test market simple line exten-
sions, minor modifications of current products
or copies of successful competitor products.
• However, when the new-product introduction
requires a big investment, or when manage-
ment is not sure of the product or marketing
programme, the company may do a lot of test
marketing.
• The idea of test marketing also applies to new
service products. For example, an airline com-
pany preparing to introduce a secure, cost-sav-
ing system of electronic ticketing may try out
the new service first on domestic routes be-
fore rolling out the service to international
• Or it might offer the ticketless system on its
busiest routes and restrict the test to its most
frequent travellers. The system’s effectiveness
and customers’ acceptance and reactions can
then be gauged prior to making the decision
to extend the service to cover all of its domes-
tic or global networks.
8. Commercialization
• Market testing gives management enough in-
formation to make a final decision about
whether to launch the new product. If the
company goes ahead with commercialization,
it will face its largest costs to date. The com-
pany will have to contract for manufacture or
build or rent a full-scale manufacturing facility.
• Plant size will be a critical decision. The company
can build a smaller plant than called for by the
sales forecast, to be on the safe side. In launching
a new product, the company must make four de-
cisions especially when (timing), where (geo-
graphical location), to whom (target market
prospects) and How (introductory marketing
strategy).
5.8 PRODUCT DECISIONS
5.8.1 Product Line

5.8.1 Product Line
A product line is group of products that are
closely related because they function in a simi-
lar manner, are sold to the same customer
groups, are marketed through the same types
of outlets or fall within given price ranges. For
example a company producing a product line of
cars such as trucks, buses, sedans.
5.8.1 Product Line
Product Line Strategies
•LINE STRETCHING-occurs when a company
lengthens its product line beyond its current
range, whether down-market, up-market, or
both ways. Down-Market Stretch A company
positioned in the middle market may want to
introduce a lower-priced line. Up-Market
Stretch Companies may wish to enter the high
end of the market to achieve more growth, real-
ize higher margins, or simply position them-
5.8.1 Product Line
• LINE FILLING-A firm can also lengthen its
product line by adding more items within the
present range, adding new sedan.
• LINE MODERNIZATION-Product lines need to
be modernized. Companies plan improve-
ments to encourage customer migration to
higher-valued, higher-priced items, introduc-
ing improved version of a brand.
• LINE PRUNING-eliminating the least profitable
products
5.8.2 Product Mix
Product mix is the list of all products offered for
sale by a company. A company’s product mix
has a certain width, length, depth, and consis-
tency.
•The width of a product mix refers to how many
different product lines the company carries. The
figure shows a product mix width of five lines.
•The length of a product mix refers to the total
number of items in the mix. In the figure the
length is 20.
5.8.2 Product Mix
• The depth of a product mix refers to how
many variants are offered of each product in
the line. Detergent have 8.
• The consistency of the product mix describes
how closely related the various product lines
are in end use, production requirements, dis-
tribution channels, or some other way.
5.8.2 Product Mix
5.8.2 Product Mix
• These four product mix dimensions permit the
company to expand its business in four ways.
It can add new product lines, thus widening its
product mix. It can lengthen each product line.
It can add more product variants to each
product and deepen its product mix.
5.8.2 Product Mix
• Finally, a company can pursue more product
line consistency. To make these product and
brand decisions, it is useful to conduct product
line analysis.
5.8.2 Product Mix
• Product Mix Strategies
Product Mix Extension-increasing the number
of the lines and/or the depth within a line.
Product Mix Contraction-thinning of the prod-
uct lines, either by eliminating an entire line or
by simplifying the assortment within a line.
NIT drop canteen services.
5.8.2 Product Mix
Alteration of existing products
This can be done by improving an established
product than totally developing new ones.
5.8.3 Packaging
• Packaging includes all the activities of design-
ing and producing the container for a product.
Packages might have up to three layers. Water
cologne comes in a bottle (primary package)
in a cardboard box (secondary package) in a
corrugated box (shipping package) containing
six dozen bottles in cardboard boxes.
5.8.3 Packaging
• Packaging must achieve a number of objec-
tives:
i. Identify the brand.
ii. Convey descriptive and persuasive informa-
tion.
iii.Facilitate product transportation and protec-
tion.
iv.Assist at-home storage.
v. Aid product consumption.
5.8.3 Packaging
Marketers must balance competing demands in
their packaging; Sun Chips’ environmentally
friendly packaging was cut back shortly after its
launch because many consumers complained
about how noisy the bags were.
5.8.3 Labelling
• The label can be a simple attached tag or an
elaborately designed graphic that is part of the
package. It might carry a great deal of infor-
mation, or only the brand name. Even if the
seller prefers a simple label, the law may re-
quire more. A label performs several func-
tions. First, it identifies the product or brand—
for instance, the name Masafi on masafi wa-
ter.
5.8.3 Labelling
• It might also grade the product; canned
peaches are grade-labeled A, B, and C.
• The label might describe the product: who
made it, where and when, what it contains,
how it is to be used, and how to use it safely.
• Finally, the label might promote the product
through attractive graphics.
5.8.3 Labelling
• Advanced technology allows 360-degree
shrink-wrapped labels to surround containers
with bright graphics and accommodate more
product information, replacing glued-on paper
labels.
5.8.4 Warranties
• Warranties are formal statements of expected
product performance by the manufacturer.
Products under warranty can be returned to
the manufacturer or designated repair center
for repair, replacement, or refund. Whether
expressed or implied, warranties are legally
enforceable.
5.8.4 Guarantees
• Guarantees reduce the buyer’s perceived risk.
They suggest that the product is of high qual-
ity and the company and its service perfor-
mance are dependable. They can be especially
helpful when the company or product is not
well known or when the product’s quality is
superior to that of competitors.
5.8.5 Brand
• The American Marketing Association defines a
brand as “a name, term, sign, symbol, or design,
or a combination of them, intended to identify
the goods or services of one seller or group of
sellers and to differentiate them from those of
competitors.” A brand is thus a product or service
whose dimensions differentiate it in some way
from other products or services designed to sat-
isfy the same need.
5.8.5 Brand
• These differences may be functional, rational,
or tangible-related to product performance of
the brand. They may also be more symbolic,
emotional, or intangible-related to what the
brand represents or means in a more abstract
sense.
5.8.5 Brand-Role of
• Brands identify the source or maker of a product
and allow consumers-either individuals or organi-
zations-to assign responsibility for its perfor-
mance to a particular manufacturer or distributor.
• Brands also perform valuable functions for firms.
First, they simplify product handling or tracing.
Brands help to organize inventory and accounting
records.
5.8.5 Brand-Role
• A brand also offers the firm legal protection
for unique features or aspects of the product.
• The brand name can be protected through
registered trademarks; manufacturing pro-
cesses can be protected through patents; and
packaging can be protected through copy-
rights and proprietary designs.
5.8.5 Brand-Role
• These intellectual property rights ensure that the
firm can safely invest in the brand and reap the
benefits of a valuable asset.
• A credible brand signals a certain level of quality
so that satisfied buyers can easily choose the
product again.Brand loyalty provides predictabil-
ity and security of demand for the firm, and it
creates barriers to entry that make it difficult for
other firms to enter the market.
This is a step by step endeavor under which a
new product pass until its introduction in the
market. It include the following activities:-
1. Generating Ideas
The new-product development process starts
with the search for ideas. This involve uncover-
ing the best possible set of unmet customer
needs or technological innovation.
New-product ideas can come from many
sources: customers, scientists, competitors,
employees, channel members, and top man-
agement. Other sources for new product ideas
include trade magazines, shows, and semi-
nars, government agencies, new product con-
sultants, advertising agencies, marketing re-
search firms, universities and commercial lab-
oratories, and inventors.
2. Idea Screening
• Any company can attract good ideas by orga-
nizing itself properly. The company should mo-
tivate its employees to submit their ideas to
an idea manager whose name and phone
number are widely circulated.
• Ideas should be written down and reviewed
each week by an idea committee, which sorts
them into three groups: promising ideas, mar-
ginal ideas, and rejects. Each promising idea is
researched by a committee member, who re-
ports back to the committee.
.
• The surviving promising ideas then move into
a full-scale screening process. The company
should reward employees submitting the best
ideas. In screening ideas, the company must
avoid two types of errors. A DROP-error occurs
when the company dismisses an otherwise
good idea as it is extremely easy to find fault
with other people’s ideas; and
If a company makes too many DROP-errors, its
standards are too conservative.
• A GO-error occurs when the company permits
a poor idea to move into development and
commercialization. We can distinguish three
types of product failures.
i. An absolute product failure loses money; its
sales do not cover variable costs.
ii. A partial product failure loses money, but its
sales cover all its variable costs and some of
its fixed costs.
iii. A relative product failure yields a profit that
is less than the company’s target rate of re-
turn.
3. Concept Development and Testing
• Attractive ideas must be refined into testable
product concepts. A product idea is a possible
product the company might offer to the mar-
ket. A product concept is an elaborated ver-
sion of the idea expressed in meaningful con-
sumer terms.
(i) Concept development-A product idea can be
turned into several concepts by asking a num-
ber of questions. For example A large food
processing company gets the idea of produc-
ing a powder to add to milk to increase its nu-
tritional value and taste.
 The first question for example is: Who will use
this product? The product can be aimed at in-
fants, children, teenagers, young or middle-
aged adults, or older adults.
 Second, what primary benefit should this
product provide? Taste, nutrition, refresh-
ment, energy?
 Third, when will people consume this drink?
Breakfast, midmorning, lunch, mid-afternoon,
dinner, late evening? By answering these
questions, a company can form several prod-
uct concepts:
 Concept 1: An instant breakfast drink for
adults who want a quick nutritious breakfast
without preparing a breakfast.
 Concept 2: A tasty snack drink for children to
drink as a midday refreshment.
 Concept 3: A health supplement for older
adults to drink in the late evening before they
go to bed.
(ii) Concept Testing
This calls for testing the concepts with an ap-
propriate group of target customers. The con-
cepts can be presented symbolically or physi-
cally. A word or a picture description can be
good.
In concept testing, consumers are presented
with an elaborated version of each concept.
Consumers are then asked to react to the con-
cept through number of questions such as, Is
the concept clear? What are the benefits of
the product over others? Will the product
meet their needs?
What is your view on price level of the product?
Answers to such questions or others can en-
able the company to collect useful information
about the product.
4. Marketing Strategy Development
After testing, the new-product manager must
develop a preliminary marketing-strategy plan
for introducing the new product into the mar-
ket. The plan consists of three parts.
(i) The first part describes the target market’s
size, structure, and behavior; the planned
product positioning; and the sales, market
share, and profit goals sought in the first few
years.
(ii) The second part outlines the planned price,
distribution strategy (door to door or), and
marketing budget for the first year:
(iii) The third part of the marketing-strategy plan
describes the long-run sales and profit goals
and marketing-mix strategy over time.
5. Business Analysis
• After management develops the product con-
cept and marketing strategy, it can evaluate
the proposal’s business attractiveness.
• Management needs to prepare sales, cost,
and profit projections to determine whether
they satisfy company objectives. If they do,
the product concept can move to the product-
development stage. As new information
comes in, the business analysis will undergo
revision and expansion.
6. Product Development
• If the product concept passes the business
test, it moves to R&D or engineering to be de-
veloped into a physical product. Up to now it
has existed only as a word description, a draw-
ing, or a prototype. This step involves a large
jump in investment that dwarfs the costs in-
curred in the earlier stages.
• At this stage the company will determine
whether the product idea can be translated
into a technically and commercially feasible
product. If it cannot, the accumulated project
cost will be lost except for any useful informa-
tion gained in the process.
• The R&D department will develop one or
more physical versions of the product concept.
Its goal is to find a prototype that consumers
see as embodying the key attributes described
in the product-concept statement, that per-
forms safely under normal use and conditions,
and that can be produced within the budgeted
manufacturing costs.
• When the prototype are ready, they must be
tested. Functional tests are conducted under
laboratory and field conditions to make sure
that the product performs safely and effec-
tively. Consumer tests involve asking con-
sumers to test the product and rate its at-
tributes. If the product passes functional and
consumer testing, the next step is market test-
ing.
7. Market Testing
• After management is satisfied with functional
and psychological performance, the product is
ready to be dressed up with a brand name and
packaging, and put to a market test. Is the
stage where the product and marketing pro-
gram is introduced into more realistic market-
ing settings.
• The new product is introduced into an authen-
tic setting to learn how large the market is and
how consumers and dealers react to handling,
using, and repurchasing the product.
• The amount of market testing is influenced by
the investment cost and risk on the one hand,
and the time pressure and research cost on
the other.
• High investment–high risk products, where
the chance of failure is high, must be market
tested; the cost of the market tests will be an
insignificant percentage of the total project
cost. High-risk products—those that create
new-product categories (first instant
• breakfast drink) or have novel features (first
fluoride toothpaste)—warrant more market
testing than modified products (another
toothpaste brand).
There are both consumer-goods market testing
and business-goods testing (READ).
• Example of consumer goods market testing is
Test Markets. The ultimate way to test a new
consumer product is to put it into full-blown
test markets.
• The company chooses a few representative
cities, and the sales force tries to sell the trade
on carrying the product and giving it good
shelf exposure. The company puts on a full
advertising and promotion campaign in these
markets similar to the one that it would use in
national marketing.
8. Commercialization
Market testing gives management enough in-
formation to make a final decision about
whether to launch the new product. If the
company goes ahead with commercialization,
it will face its largest costs to date. The com-
pany will have to contract for manufacture or
build or rent a full-scale manufacturing facility.
• Plant size will be a critical decision. The com-
pany can build a smaller plant than called for
by the sales forecast, to be on the safe side. In
launching a new product, the company must
make four decisions especially when (timing),
where (geographical location), to whom (tar-
get market prospects) and How (introductory
marketing strategy).
5.8 PRODUCT DECISIONS
5.8.1 Product Line

5.8.1 Product Line
example a bank producing a product line of fi-
nancial services or men’s wear (shirts, ties, un-
derwear, and trousers).
5.8.1 Product Line
example a bank producing a product line of fi-
nancial services or men’s wear (shirts, ties, un-
derwear, and trousers).
5.8.2 Product Mix
Product mix is the list of all products offered for
sale by a company. A company’s product mix
has a certain width, length, depth, and consis-
tency.
•The width of a product mix refers to how many
different product lines the company carries.
•The length of a product mix refers to the total
number of items in the mix.
5.8.2 Product Mix
• The depth of a product mix refers to how
many variants are offered of each product in
the line.
• The consistency of the product mix describes
how closely related the various product lines
are in end use, production requirements, dis-
tribution channels, or some other way.
5.8.2 Product Mix
5.8.2 Product Mix
• These four product mix dimensions permit the
company to expand its business in four ways.
It can add new product lines, thus widening its
product mix. It can lengthen each product line.
It can add more product variants to each
product and deepen its product mix.
5.8.2 Product Mix
• Finally, a company can pursue more product
line consistency. To make these product and
brand decisions, it is useful to conduct product
line analysis.
5.9 Product Life Cycle
5.9.1 Introduction
5.9.1 Introduction
• Through the development stages, the product will
enter into the market. In the market this product is
expected to pass through different stages which to-
gether are named as “Product Life Cycle” (PLC).
• To say a product has a life cycle is to assert four
things: Products have a limited life; Product sales
pass through distinct stages, each posing different
challenges, opportunities, and problems to the seller;
Profits rise and fall at different stages of the product
life cycle;
5.9.2 PLC Stages
• Products require different marketing, financial, man-
ufacturing, purchasing, and human resource strate-
gies in each life-cycle stage. The stages are:-
i. Introduction-A period of slow sales growth as the
product is introduced in the market. Profits are
nonexistent because of the heavy expenses of prod-
uct introduction.
ii. Growth-A period of rapid market acceptance and
substantial profit improvement.
iii.Maturity-A slowdown in sales growth because the
product has achieved acceptance by most potential
buyers.
5.9.2 PLC Stages
• Profits stabilize or decline because of increased com-
petition.
iv. Decline—Sales show a downward drift and profits
erode.
NB: Not all products exhibit a bell-shaped PLC (the
common shape can be seen in slide 367).
5.9.2 PLC Stages
Three common alternate patterns are shown in slide

368.
5.9.2 PLC Stages
5.9.2 PLC Stages
• Figure 11.5(a) shows a growth-slump-maturity pat-
tern, characteristic of small kitchen appliances, for
example, such as handheld mixers and bread makers.
Sales grow rapidly when the product is first intro-
duced and then fall to a “petrified” level sustained by
late adopters buying the product for the first time
and early adopters replacing it.
• The cycle-recycle pattern in Figure 11.5(b) often de-
scribes the sales of new drugs. The pharmaceutical
company aggressively promotes its new drug, pro-
ducing the first cycle.
5.9.2 PLC Stages
• Later, sales start declining, and another promotion
push produces a second cycle (usually of smaller
magnitude and duration).
• Another common pattern is the scalloped PLC in Fig-
ure 11.5(c). Here, sales pass through a succession of
life cycles based on the discovery of new-product
characteristics, uses, or users. Sales of nylon have
shown a scalloped pattern because of the many new
uses—parachutes, hosiery, shirts, carpeting, boat
sails, automobile tires—discovered over time
5.9.3 PLC Stages
• Read marketing mix strategies in each stage of
the life cycle.
5.10 Consumer Adoption
Process
5.10.1 Introduction
5.10.1 Introduction
• Adoption is an individual’s decision to become
a regular user of a product and is followed by
the consumer-loyalty process.
• New-product marketers typically aim at early
adopters and use the theory of innovation dif-
fusion and consumer adoption to identify
them.
5.10.2 Stages in the Adoption Process
• An innovation is any good, service, or idea
that someone perceives as new, no matter
how long its history. Everett Rogers defines the
innovation diffusion process as “the spread of
a new idea from its source of invention or cre-
ation to its ultimate users or adopters.” The
consumer-adoption process is the mental
steps through which an individual passes from
first hearing about an innovation to final.
The stages are:-
1.Awareness-The consumer becomes aware of the in-
novation but lacks information about it.
2.Interest-The consumer is stimulated to seek informa-
tion about the innovation.
3.Evaluation-The consumer considers whether to try
the innovation.
4.Trial-The consumer tries the innovation to improve
his or her estimate of its value.
5.Adoption—The consumer decides to make full and
regular use of the innovation.
• The new-product marketer should facilitate move-
ment through these stages. A water filtration system
manufacturer might discover that many consumers
are stuck in the interest stage; they do not buy be-
cause of their uncertainty and the large investment
cost.
• But these same consumers would be willing to use a
water filtration system at home on a trial basis for a
small monthly fee. The manufacturer should consider
offering a trial-use plan with option to buy.
5.10.3 Factors influencing Adoption Process
• Many factors influence the adoption process including
differences in individual readiness to try new products,
the effect of personal influence, differing rates of
adoption, and differences in organizations’ readiness
to try new products. One factors is discussed here,
readiness to try new products. The five adopter
groups are identified which are, innovators, early
adopters , early majority, late majority , and lag-
gards. Each group requires a different type of market-
ing if the firm wants to move its innovation through
the full product life cycle.
5.10.3 Factors influencing Adoption Process

Marketing Full Notes

Uploaded by

Copyright:

Available Formats

Marketing Full Notes

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Marketing Full Notes

Uploaded by

Copyright:

Available Formats

BPU 07210: MARKETING

SEMESTER II COURSE FOR HDPLM 1

1.1 Basic Marketing Concepts

External service quality

Figure 1. Market Targeting Approaches

• From the model, manufacturer prepare a qual-

(i) The fundamental level is the core benefit:

(ii) At the second level, the marketer must turn

(iii) At the third level, the marketer prepares an

Every company must develop new products.

5.8.1 Product Line

5.8.1 Product Line

Three common alternate patterns are shown in slide

You might also like