Market: any situation that brings buyers and sellers together for the

exchange of goods & services.

Marketing: the management process of identifying, anticipating and

satisfying consumers need in a profitable manner.

The features of marketing are:

It is a management process involving product, price, promotion and place
It aims at satisfying the customer while making a profit
It aims at satisfying wants & needs.

Marketing activities include:

Market research packaging advertising

Production pricing distribution

Branding sales promotion public relations

Target market a group of individuals the firm is aiming to satisfy (e.g. a

discos target market is teenagers and young adults)

Selling concept a firm produces a product and then tries to convince

consumers to buy it.

Marketing or customer-focused concept first, the firm finds out

(researches) what customers want and then try to meet this demand.

Market segment breaking down a market into sub groups with similar
characteristics. E.g. markets can be segmented based on age, gender,
income, religion, ethnicity, geography, personality etc

Page 1
This refers to the range of marketing activities a firm uses to
reach its target market. The activities involve the four Ps
product, price, place and promotion.
Having conducted the necessary market research, the firm needs to choose
the marketing mix that will reach its target market.

Product -
the good or
service

Promotion -
ways of
making the 4 Price - the
money value
a good is sold
consumer
aware of the
prodcut
Ps for -e.g $10

Place -
methods
used to get
product
/service to
customer

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Market research is defined as the systematic gathering, recording and analyzing
of data relating to a specific marketing activity.

Market research begins before production takes place.

It informs the business what to produce, in what sizes, shapes, colors,
weights, how often, who would buy the product.
Thus, it is concerned with getting information about a product and its
customers.

To find out what the public wants so firm produces goods that meet consumers tastes.
To assess the volume of demand this ensures goods wanted by customers are produced

in sufficient quantities to earn revenues.

To investigate what influences consumers when making purchases.
To reduce decision risk by providing management with relevant, timely and accurate

information.
To understand the environment in which the firm operates its competitors.

The various types of market research conducted are:

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CONSUMER RESEARCH
This investigates the buying behavior of consumers to determine
The level of customer satisfaction
Why they buy certain products
Suggestions for improvement of product
Contentment of quality and quantity of product

PRODUCT RESEARCH
The features of a product are investigated to determine whether the
taste, size, shape or smell is what the consumer prefers. It also
studies the consumers reaction to product changes

SALES RESEARCH
Is aimed at getting information about
the size of the target market
the age, gender, income & geographical location of target market
to forecast the sales revenue of a product

ADVERTISING RESEARCH
This study is used to determine the type of media
(radio/TV/newspaper etc) best suited to the promotion of a product.
Also it looks at the effectiveness of the advertising campaign, i.e.
whether sales volume increases after an advertisement.

ECONOMIC RESEARCH
This studies the changes in economic conditions, for example, the
effects of inflation, economic growth, unemployment, fiscal and
monetary policies on product sales & profitability.

DISTRIBUTION RESEARCH
Manufacturers seek information to determine the most effective
method of delivery of goods or distribution channels & the level of
after-sales service the firm is capable to give.

There are several factors that influence the behavior of consumers:

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 INCOME
The amount of money a person earns affects his/her ability to purchase. E.g. BMW car
can only be purchased by highly paid salaries earners.

TASTE
People differ in their tastes & preferences for goods.

PRICE
The value of an item in the eyes of the customer may differ from that of entrepreneur. If
people find the price is not worth the product they will not buy it.

BELIEF SYSTEM
Religious belief can influence choice of spending.

BRAND
Marketers often try to create loyalty for their products because is difficult to convince
satisfied customers of a brand to switch to another.

CHOICE
Consumers have a wide variety of products to choose from so features, design, packaging
etc may attract customers.

QUALITY
People may prefer to pay money for products that have high quality standards than
inferior goods that dont last.

Consumerism is defined as all activities relating to rights and

responsibilities of consumers.
Some of these activities include
a) Ensuring products are at an acceptable standard.
b) Products are safe.
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 c) Consumer gets redress for injustices.

CONSUMER RIGHTS
Consumers have the following rights

To be informed To redress
To choose To a healthy environment
To safety To consumer education
To investigate goods before buying
To ask questions without buying
To reject bad goods
To ask for a receipt upon purchases
To get refunds on unfit goods

RESPONSIBILITIES OF CONSUMERS

To seek information
To make informed & independent decisions
To inform the public about unfair business practices
To respect the environment

CONSUMER ORGANISATIONS COMMUNICATE:

Consumers needs to producers & government

Inform the public about unfair business practices like
Unfit pricing unsafe products
Misleading advertisements unhealthy practices

ORGANISATION ROLES AND FUNCTIONS

GOVERNMENT Make laws relating to the environment, road safety and health for
example, the Road Safety Act; the Environment protection Acts.
Also laws relating to the sale of goods, the Sale of Goods Act and
the Food and Drug Act.

Page 6
 BUREAU OF Setting minimum standards to which producers of goods must
STANDARDS abide. For example, proper labeling, description and safety
requirements.

Verification and testing of products to ensure that standards are

maintained.

Ensuring that measurement apparatus are properly calibrated

Educating the public about standards and any unsuitable items on

the market.

Issue warnings to producers who are not adhering to standards.

THE
OMBUDSMAN Investigates and adjudicates on complaints of loss/damages from
A government the public.
appointed
person who Make recommendations to correct wrong doing of state agencies
to members of the public.
investigates
malpractices,
maladministrati
on or injustices
suffered by
individuals in
their dealings
with public
officials,
government
agencies & govt
owned
companies.

THE MINISTRY
OF CONSUMER Ensures that laws to protect the consumer are followed.
AFFAIRS

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PRODUCT: this is the good or service that should be produced, for example, Cars,
cell phones & laptops. It involves decisions about the design & features of the
product.

This plays an important role in encouraging the consumer to buy a product.

PACKAGING is the manner in which a product is wrapped, displayed and presented

to a consumer.

Functions of packaging:

To attract the customer

To identify the product provide information about name, contents, weight, & safety
To protect the product during transit, storage & handling
To promote the product improve the companys image
Make it convenient and easy for customers to handle.

LABELLING: refers to a small tag attached to the product or a

complete design within the package. It provides information that
describes the product.
Identification the label identifies the product
Product description who made the good, ingredients, directions for use, office of the
manufacturer

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Branding: is a distinctive name, term, sign or symbol to easily identify the
product. It helps differentiate ones product from another competitor. E.g.
Colgate, coco cola, Nike or Addidas

REASONS FOR BRANDING

It helps in creating customer loyalty.

Easy to promote a product using brand name
Branding helps to increase sales since people buy brand names
Legal protection for ownership rights are given to companies.

DISTINCTIV
E
EASY TO
SUGGEST PRONOUN
PRODUCT CE
QUALITY /REMEMBE
R
BRANDS
- should
be

tide. spoken e.g. Sony, dell or

BRAND NAME which can be that part of a brand

Mercedes Benz car.

triangles inscribed in a circle for

BRAND MARK
distinctive lettering, e.g. the three
recognized by symbol, design or
That part of the brand which can be

right to use that brand.

TRADE MARK
protection. It protects the sellers sole
A brand the producer has received legal

musical or artistic.
some form of literary (written/ poetry)
COPYRIGHT publsih and sell the ideas expressed in
The (sole) legal right to reproduce,

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PRICE: the money value the consumer is willing to pay for a product and
the firm is willing to sell at to make a profit.

A product is worth only what someone else is willing to pay for it. When pricing a
product, firms must consider

The costs incurred in production

The price of competitors
The aim is to make a profit

MARKET CONDITIONS - prices for products can be determined by the market

forces of demand and supply. When demand and supply curves intersect we get
equilibrium price.

COST PLUS PRICING the total cost of producing a product involves fixed costs
and variable costs. To that cost, firms add an amount for profit known as MARK UP.

Thus, selling price (SP) = total cost (TC) + mark up

= FC + VC + mark up
Q
= Unit cost + mark up

PENETRATION PRICING - the initial price is set lower than competing products to
attract consumers. Eventually the price is gradually raised as product gains
popularity.

PREDATORY PRICING is a pricing strategy to get rid of unwanted competition.

The firm set a lower price than competitors causing them to lose sales. When
competitors can no longer handle a price war they are forced to leave the market.

PSYCHOLOGICAL PRICING the aim is to get consumers to think that good things
are not cheap while cheap things are not good. Also, firms keep prices below

Page 10
certain levels so that they appear cheaper to the customer e.g. 99 c instead of $
1.00.

Promotion refers to making the consumers aware of a product or service and

its qualities.
It is a strategy geared at informing, persuading and influencing potential

customers into making a decision to purchase a product.

The aims of promotional strategies are to

Inform potential customers

To increase sales

SALES
PROMOTIO
N

ADVERTISIN PUBLIC
G RELATIONS

PROMOTION
AL
STRATEGIES

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Advertising is the medium by which consumers are informed about
various products.
Advertising - is a means of communication
Used to make consumers aware of goods and services
Aims at keeping existing customers & attracting new ones

FUNCTIONS OF ADVERTISING
To announce new products
Highlight the unique features of a product
Build a firms public image
To increase market share by stimulating demand
To inform & remind consumers about a product

TYPES OF ADVERTISING

INFORMATIVE REMINDER
This gives factual To remind customers of a
information about a product &its availability.
product. It assist the Mainly used when a
buyer to make an product has reached
informed decision to maturity stage.
purchase a good. This
method is useful when
introducing a new
product.
PERSUASIVE COMPARATIVE
Emotional and Avertising that compares
psychological techniques one product to another.
to convince the The aim is to convince a
consumers to buy a good potential customer that
or service. For example, your product is better
appeal to sex - where than others.
females are used to
advertise sports cars etc.

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 FORMS OF ADVERTISING

There are a variety of ways an advertisement may reach the public.

TELEVISIO
N &
RADIO

NEWSPAPER
WORD OF S
MOUTH &
MAGAZINES

FORMS OF
ADVERTISIN
G

EXHIBITIO
CINEMAS
NS

POSTERS /
BILLBOARD
/
CALENDER
S / BUSES /
CLOTHING

ADVANTAGES OF ADVERTISING DISADVANTAGES OF ADVERTISING

Helps people make informed Some advertisements mislead the
decisions about goods and services public through exaggerated claims.
Increases sales for a product Advertising increases costs.
Consumers pay for this by higher
prices of products
Increases market share and revenue Encourages people to buy goods
for firm they do not need
Encourages healthy competition A waste of resources which could be
between suppliers put to better use
Profits from advertising can be used Some Ads are not in the public
for research and development of interest alcohol and tobacco.

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new products

Sales promotion is defined as short term incentives used to

encourage purchases of a good or service.

It normally coincides with special events, holidays like Christmas or carnival and Easter.
Seeks to move old stock or introduce a new product.
Used to earn quick cash for the firm.

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 Page 15
FREE
GET ONE
BUY ONE &
A refund given for prompt settlement of a
DISCOUNT
debt.
CASH
Reducing the price of a popular brand to
LEADERS
attract customers to the store so other
goods get exposure
LOSS
Events which enable firms to display
items to the public to examine its
EXHIBITIONS
quality and features. TRADE

Consumers are encouraged to enter

competitions for sums of money or
N
expensive prizes COMPETITIO

A reduction in the price of an item

DISCOUNTS
especially for Sales event e.g. Easter
sales
PRICE
cut out of newspapers or magazines in COUPONS
exchange for gifts or discounts.
mini replicas of a product given to
SAMPLES
customers.
FREE
Public relations refer to creating a favorable image of the firm in the
eyes of the public, community & government in order to increase
sales, attract investment & gain support for its objectives.

A PUBLIC RELATIONS OFFICER (PRO) is the person responsible for

promoting a good public image for a company.

MAIN FUNCTIONS OF A PR OFFICER

a) MEDIA RELATIONS: to provide information to the press and broadcast media via

press releases, conferences about a companys product. Celebrities can be hired or having

Christmas parties.
b) CUSTOMER RELATIONS: involves staying in touch with customers by offering free

company newsletters or magazines.

c) COMMUNITY RELATIONS: The firm is seen as fulfilling its social and corporate

responsibility by -
Sponsoring worthy causes and events flood victims or cricket or a marathon
Well-publicized donations to charities
Giving special awards to sports personality or schoolchildren
Environmental campaign clean up the community

Salesmen use a number of techniques to obtain a sale.

Type Description
It involves the sales person moving from village to village
PERSONAL selling his or her wares.
SELLING The sales person has direct contact with customers

Page 16
 Receives immediate feedback
Arranges credit to clients

Goods are sold directly from the producer to the

DIRECT SELLING consumer without any intermediaries (middlemen) e.g.
mail order or telesales.
Orders are made directly to the producer. Electronic
marketing is included since customers use the Internet to
make direct purchases e.g. online shopping.
Mail order houses: customers select the goods at home and
order them from the mail order company either by phone, post or
email
Telesales: courtesy calls made to clients offering them product
samples. Shopping channels on television e.g. E Z shopping.
Online shopping: this is shopping at a customers convenience
via the internet

DISPLAY OF Products are attractively displayed at shop window fronts

PRODUCT to entice customers

JINGLE, RHYME These tactics identify or introduces the firm so customers

can associate the promotion with that jingle & buy the
product

SAMPLE A sample is given to patrons to be tested at shops or

malls to encourage sales

DISCOUNT Sellers may offer discount to clients. Cash discounts mean

price is reduced so customers use the opportunity to buy.

LOW PRICING Firms may set low prices on products to encourage sales.
STRATEGY

Sales can be made in the following ways:

Page 17
 Page 18
A reduction in price which firms allow to their
customers .
CASH DISCOUNT: an allowance given to the buyer
of goods for prompt payment.
DISCOUNT
TRADE DISCOUNT: Is allowed to traders or
merchants who buy goods to resell them to their
own customers.
Short term credit used for the purchase of
household appliances or equipment. It allows the
buyer to use the goods immediately while paying
by monthly instalments until the total amount is
paid.
PURCHASE
some features of hire purchase are:
a contract must be signed between buyer & seller
HIRE
the buyer must receive a copy of the contract
the buyer is not allowed to sell the item while still
paying for it.
The payment for goods at a later
date. Sellers give credit to
customers because-
customers are poor, do not have CREDIT
cash
customers are trustworthy
sellers want sales & profits
The prompt payment for goods using
either bank notes, coins, cheques or
debit/credit cards. The buyer pays the
CASH
seller his money in full at the time of
sale.
PLACE: refers to the channel of distribution best suited to getting
the product to the consumer. It is concerned with how products are
distributed to consumers.

DISTRIBUTION: is the link between producer & consumer. It is the

process through which the firm reaches the targeted market.

A chain of distribution can be direct or indirect.

Direct if there is no intermediary (middlemen)
Indirect if there is an intermediary like wholesalers or retailers.

The function of a distribution chain is to move goods from producers to

consumers who use them.

PRODUCE CONSUME
R R
This is the shortest channel.
The producer deals directly with the consumer
Cheaper since it does not involve the use of middlemen
Direct contact with customers so receive feedback easily

WHOLESAL
PRODUCER ER CONSUMER

This chain involves one middleman the wholesaler.

The wholesaler buys bulk & repackages the goods.
The wholesaler assumes the function of the retailer.
He enjoys more profit.

WHOLESAL CONSUME
PRODUCER RETAILER
ER R

Page 19
 This chain involves the movement of goods from the producer to wholesaler to the
retailer and then the consumer.
The producer benefits from selling in large quantities & enjoys economies of scale.
The wholesaler operates large warehouses & breaks down larger quantities for
redistribution to retailers.
Retailers further break it down in smaller quantities for sale to consumers.

PRODUC CONSUM
ER RETAILER ER

The wholesaler is omitted from this chain.

The retailer is assumed to have large warehouses to perform the functions of wholesaler.
Retailer keeps profits from discount on bulk buying.

PRODUC CONSUM
ER AGENT ER

The producer may use an agent for distribution.

Agent is usually hired when goods are produced in another country.
Agent helps to overcome barriers like culture and language.

PARTY FUNCTIONS

PRODUCER To provide a good/service of high quality &

Person who converts raw affordable prices.
materials into finished

Page 20
products.

WHOLESALER
Risk bearing- buying large quantities & prices of
A middleman who sells goods may fluctuate
finished goods to retailers. Breaking bulk repackaging
He is the link between
Warehousing storage of goods
producer & retailer.
Granting credit to retailers

RETAILER Breaking bulk repackaging

A middleman who obtains Provides convenient outlet for customers
goods from producer or Provide credit to customers
wholesaler & sells to final Provide after sales service
consumer. Offers customer a wider variety of goods
Provides delivery to customers

AGENT Represent the owners of goods in a foreign country

A person who sells a Obtain the best price for goods since his/her
product/ service on behalf
commission depends on the volume of sales.
of the seller for a fee or
commission payable by the
buyer or seller.

TYPE OF PRODUCT
The size, shape, weight & fragility of the product must be considered. Products that need
short routes may include
o Items that are expensive & fragile (jewels or glassware) to avoid handling &
security problems.
o Bulky items to lower transportation costs
o Low priced goods go keep cost down.
Page 21
 CONSUMER
The target market the producer aims to reach influences the channel. If the market is
specialist then it is best to deal directly with client for feedback.

QUANTITY
It is cost effective to use a wholesaler or retailer for fewer items or small quantities.

SPEED
Perishable items require fast means of transport. For short distances, road transport is
best.

BUDGET
The cost incurred in using any channel must be considered to be cost effective and
efficient.

LOCATION
Distribution to remote areas is not feasible for the producer. Goods to be exported may
require an agent.

OUTLETS ADVANTAGES DISADVANTAGES

DOOR TO DOOR
SELLING-
Direct sales Time consuming

Trades people who Prompt payment (cash) Difficulties getting

travel Can allow credit to people to answer the
Around the door
customers
community from
Obtain feedback from
Baggage to carry
House to house. around
Customer immediately
Pedlars carry goods Weather can affect
from schedule
Door to door on foot
Hawkers use some

Page 22
method
Of transport e.g.
bicycle.

HYPERMARKETS Wide variety of goods Must have a

Large shopping area
selling
A range of goods
under one
Roof, e.g. Price smart
Cheaper prices membership card
Good parking facilities Not suitable for
Open long hours purchasing in small
Good customer service amounts.

SUPERMARKETS- Conveniently located Large premises are

A large self service for customers expensive to maintain
store with Parking facilities Pilferage levels are
More than three Variety of goods high
check out prepacked and priced Staff has little contact
Points, e.g. Hi Lo / on the shelves with customers
Tru value

TELEMARKETING / Makes shopping easier Service is only

INTERNET- Purchases are direct available to those with
Involves using the using internet a telephone
telephone to contact Cannot physically view
people to entice them items purchased
to purchase items.
A toll free number is
given to customers
for them to place
their orders.

VENDING MACHINES Offers 24 hours of Easy target for vandals

AUTOMATIC TELLER service Lack of security
MACHINES Conveniently located in Technical problems
A self service busy areas with machines- out of
machine that uses order
coins for e.g. snack
machine or soft drink,

Page 23
banking machine

TRANSPORT is the movement of goods and people from

one place to another.

Transport is very important for the following reasons:

It brings the goods from producers to final consumers

It carries raw materials from its site to the factory
It helps manufacturers to minimize inventory (stock) & keep costs down
It is vital to industrialization- workers need transport to get to work
It widens the market and demand for the product
It increases employment
It makes available a variety of goods to consumers

FORMS OF ADVANTAGES DISADVANTAGES

TRANSPORT
Fast for short distances Roads can become
LAND ROAD
It is direct & can reach congested
TRUCKS/ BUSES/ any destination within a Air pollution from
CARS/TRAMS nation
vehicles
Cheaper for bulky goods Weight limitations
Road accidents
Cheaper for consumers

Suited to bulky cargo, e.g. Slow form of transport

SEA
oil, lumber are better Use of containers add to

Page 24
OCEAN/ RIVERS carried by sea due to costs
weight.
LAKES
Cheaper than air transport

Containerization ease of
handling, security of
contents & less
damage/pilferage.

Quick form of transport Expensive, especially

AIR
Suitable for light & for bulky goods
AEROPLANES/
perishable items Weather conditions can
HELICOPTERS
Can reach destinations not cause delays
accessible by sea or roads. Technical difficulties of
planes
Still requires use of
other forms of transport

Problems are encountered in the distribution of goods such as-

Poor communication within the distribution network

Misdirection of goods because of improper labeling of goods
Inadequate facilities for temporary storage e.g. warehouses
Industrial unrest strike by port workers
Delayed shipment in ports perhaps due to bad weather
Inadequate & dysfunctional tools and equipment for the movement of goods, e.g.
cranes
Lack of understanding of custom authority regulations on importing & exporting
Poor infrastructure roads, bridges, ports, airports

Page 25
 a. Educate the public about laws governing the distribution of goods. Leaflets &
brochures outlining procedures & laws should be made available.
b. Inadequate facilities proper planning and budgeting to build more
warehouses.
c. Communication networks can make use of the internet, mobile phones, fax
etc
d. Implement good industrial practices to solve unrest of workers
e. Delayed shipment shippers can keep schedule

FACTORS GOVERNING CHOICE OF TRANSPORTATION

DISTANCE

NATURE
OF
COST OF
GOODS -
E.G. TRANSPORTAT
ION
PERISHAB
LE ITEMS
FACTORS
INFLUENCI
NG MODE
OF
TRANSPO
RT
URGENCY
FACTORS WAREHOUSI
- E.G. NG
RUSH FACILITIES
ORDERS
COST
OF
INSURAN
CE

Page 26