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Imén TIpSar

Marketing Principles

Chapter 1: Introduction to MarketingChapter 2: Marketing EnvironmentChapter 3: Managing Marketing SystemChapter 4: Target MarketChapter 5: The ProductChapter 6: The PriceChapter 7: The DistributionChapter 8: The Promotion

Chapter 1: INTRODUCTION TO MARKETING

What is marketing?

I. EVOLUTION OF MARKETING

Fishermen Hunter

Farmer Potter

Fishermen Hunter

Farmer Potter

Fishermen Hunter

Farmer Potter

Merchant

Self Sufficiency Decentralize Exchange Centralize Exchange

A-Self Sufficiency – Each sees to own needs. Therefore, each has to spend time doing other tasks.

B-Decentralize Exchange – Each person sees the other as potential “buyer” who makes up a market.

C-Centralize Exchange – A new person called a merchant appears and sets up a central area called a marketplace.

Market definition – is a group of people or organizations with common needs to satisfy or problems to solve, with the money to spend to satisfy needs or solve problems, and with the authority to make expenditure decisions.



Market Concept:

The concept of Market finally brings us to the concept of Marketing.

- Market mean human activity that takes place in relation to markets.

- Market mean working with markets to allow the exchange of goods or services with the purpose of satisfying our needs or wants.



Marketing Concept:

The following we have several concepts of marketing

- Marketing : The process of planning and executing the concept, pricing, promotion, distribution, of ideas goods and service to create exchanges that individual and organizational objectives.

- Marketing : The process of identifying needs and satisfying these needs and wants with suitable goods or services, through product design, distribution and promotion and either as a business or non-profit making organization.

Marketing definition:

Marketing mean human activity directed a satisfying needs and wants through exchange processes.



Needs:

- Basic needs for clothing, Warmth and safety, food, sex and so on.

- Social needs for love, belonging…

- Individual needs for knowledge and self expression.

These needs are not created by advertising agencies, but are a basic part of human nature.

Wants:

Wants are human needs which are determined by culture and individual personality.

Example: a hungry person in Cambodia might want rice and spinach, in Australia a meat pie and potato.



Demands:

People have almost unlimited wants but limited resources. Therefore, they usually choose products that produce the most satisfaction fore their money, so people wants become demands when they have the money to be able to afford it.

Products:

A product is anything that can be offered in a market that might satisfy a want or a need.

Example: Your wants and needs are to look better to be more attractive. What are the product groups that may meet these needs and wants?

- Clothing, Hairdressing services, Perfume, deodorant ect.



Services:

Services are activities, that are intangible, exchange directly from producer to customer, and consumed at the time of production.

e.g. Hotel, Air line, School,…etc.

Exchange:

Is the act of obtaining a desired object from someone by offering something in return. e.g. money, barter, This way people can concentrate on the things they can produce best and then trade them for other products that are produced by others.

Exchange is the most fundamental concept of marketing.



Transaction:

Transaction is the unit of measurement. Mr. A give money or goods to Mr. B and services goods in return.


II. IMPORTANCE OF MARKETING

Why is Marketing important?

Marketing is one of most powerful tools employed by organizations in their struggle for survival and growth.

Difference between Marketing and Selling

- Selling concept : Business makes product and then tries to sell it.

- Marketing concept: Business finds out what a customer wants and they develop a product to meet the customers need.

-Marketing is important to every consumer

-Marketing will be important to your job

-Marketing affects standard of living and economic growth.


III. THE MARKETING MANAGER

Who is Marketing Manager?

- Anyone responsible for making significant marketing decisions.

- In a small business there may be only one marketing manager.

e.g. selling petrol on roadside, one person responsible for deciding:

-What type of petrol?

-How much stock,

-How to sell it,

-How much to sell it,

-For where to where place the business,

-How to present the petrol,

-What level of service.


III. THE MARKETING MANAGER

- In a large business there may be many people involved in marketing. In a large business the marketing decision become more complex.

-Advertising,

-Competitor analysis,

-Customer analysis,

-Where to place people involved selling,

-How products are to be distribute,

-Preparation of marketing plans,

-Pricing -Promotion,

-Product and service development -Sales forecasting.

TYPICAL RESPONSIBILITIES OF MARKETING MANAGERS


IV. MARKETING MANAGEMENT EVOLUTION

Production

Orientation

Sales

Orientation

Marketing

Orientation

Social responsibility

& human Orientation

1- Production Orientation

Function of sales department is to sell the company’s output at a price set by production. Underlying assumption “Marketing effort is not needed to get people to buy a product that is well made and reasonably priced”.



2- Sales Orientation

A realization that simply to make a product was not enough. The problem was to try to sell the output.

- The product had to be sold

- The idea of first finding out what the customer wanted didn’t really enter the minds of the organization.

3- Marketing Orientation

Attention focused on marketing – what the customer really wanted. Marketing managers introduced at the beginning of the production cycle rater then at the end. Most businesses are now operating at this level.



4- Social responsibility & human Orientation

The need to work in a socially responsible manner due to external pressure,

e.g. Customer discontent, Environmental issues, Political/legal forces.

Chapter 2: THE MARKETING ENVIRONMENT

THE EXTERNAL ENVIRONMENT

Macro Environmental Forces

1-Demography

2-Economic Conditions

3-Social and Cultural Forces

4-Political and Legal Forces

5-Technology

6-Competitor

7-Natural

Micro Environmental Forces

Supplier Intermediaries Company’s Marketing

Organization

Intermediaries Market

Statistical Study of human population and its distribution.

- number, age, sex, nationality, density, occupation, income, education, etc.

e.g. Setting up a specially shop-demographic study to determine placement.


I. MACRO ENVIRONMENTAL FORCES

1- Demography

2- Economics condition

People a lone do not make up a market. They must have money to spend and be willing to spend it.

-Therefore economics environment is significant for almost all organizations.

-Other economics factors

+Interest rates.

+Money supply/credit availability.

+Price inflation.

+Unemployment.



3- Social and cultural forces

People and social and cultural customs are what shape the economics, political and legal system and technology.

e.g. Social Pressures against air and water pollution, led to legislation and government regulation. Which in turn stimulation new technology to reduce pollution. (noise pollution in Cambodia).



4- Political and Legal force

There are five broad categories:



A - General monetary and fiscal policies

B – Social legislation

C – Government relationship with individual industries

D – Marketing legislation

E – Provision of government

5- Technology

Tremendous impact on marketing. It can

- Start entirely new industries, ie. Computer industry.

- Radically change or destroy existing industres.



6- Competition

Competition is a vying among businesses for the same resource or customer. There are two types of competitor-direct and indirect competitor.

-Direct competitor-from direct competitors on cost, material and service (who are the direct competitors in selling petrol).

-Indirect competitor-from limited buying power and having to choose between products, e.g. Between food and clothing.



7- Naturals

Natural factor can appear in an eventually occasion, it does not controlled.

e.g. storm, volcano, earth quake, flood, etc.



1- The market:

The focal point in all marketing decisions in an organization.


II. MICRO ENVIRONMENTAL FORCES

2- Suppliers:

You cannot sell a product if you cannot first make it or buy it. Suppliers price and service have a significant impact on a company’s marketing system.

3- Marketing Intermediaries:

Independent business organizations which directly help the flow of products and services between marketing organizations and the markets.

+Two type: - Resellers – Wholesalers and retailers.

- Facilitators – Transport, warehousing, Financing.

Planning

Selecting goal

Strategies to

Achieve goals

Chapter 3: MANAGING MARKETING SYSTEM

Implementing

Putting plan

Into operation

Evaluating

Comparing

Performance with

Goals

Within the environment we have just discussed, a company must plan, implement and evaluate its marketing system.

So the managing a marketing system consists of:

Continual feedback to adopt future goals, fix faults, monitor External environment


1- Objectives and goals

- Something you aim to achieve.

- Should be stated clearly and precisely possible.

I. SOME BASIC MANAGEMENT TECHNOLOGY

2- Strategies

A broad basic plan of action by which an organization intends to reach is goal.

3- Tactics- Implementing the plan of action.

- Generally covers shorter term period.


4- Policy

A method or course of action adopted by management to guide future decision making in a given situation.

-Policies are present at all levels of the Organization.

-An automatic decision making mechanism.

I. SOME BASIC MANAGEMENT TECHNOLOGY

5- Strategic Planning

We are now ready to talk about the design of a marketing program within the environmental framework that we have discussed. So now we introduce the concept of strategic planning.

The strategic planning process consists of:

- Setting organizational goals

- Selecting strategies and tactics that will help the company reach its goals.


The strategic marketing plan consists of :

-Situation analysis-where are we now and where are we going reach its goals.

-Setting marketing goals.

-Selection and analyzing the target market.

-Developing a marketing mix.

-Preparing a marketing plan.

-Implementing and evaluation the plan.

II. STRATEGIC MARKETING PLANNING


The marketing mix is everything the company can do to influence the demand for its product.

The term marketing mix is used to describe the combination of the four inputs that constitute the core of the organizations marketing system.

-Products- Planning and developing, Changing and adding, Packaging and Branding.

-Price structure- Right base price, discounts, Freight payments.

-Promotional activities- advertising, personal selling, sales promotion, and publicity.

-Distribution system- trade channels, physical handing, transporting.

II. STRATEGIC MARKETING PLANNING

The marketing mix


MARKETING INFORMATION SYSTEM AND MARKET RESEARCH

To manage a business well is to manage its future and manage the future is manage information.

We have discussed previously how marketing manager must

- Anticipate change

- Forecast the intensity and direction of the changes, and

- Adjust their strategic marketing planning in line with these

changes.


WHAT IS A MARKETING INFORMATION SYSTEM

A structure of people, equipment and procedures, designed to provide information to help decision making in a company’s marketing program. (compare to an army’s intelligence gathering on is enemy).

A marketing information system is a systems approach to handling information to:

-Determine what information is needed.

-Collect this information.

-Process the information.

-Provide for storage and future retrieval.


WHAT IS A MARKETING INFORMATION SYSTEM

Advantages of a marketing information system

-Faster, less expensive and more complete information.

-Wider variety of information collected and used.

-Management can continually monitor the performance of

products.

-Less time available to executives for decision marketing.

-Marketing activity is becoming broader and more complex

in its scope.

-Increased emphasis on profits.

-Growing consumer discontent.

-Information explosion.

NEED FOR A MARKETING INFORMATION SYSTEM

THE MARKETING RESEARCH PROCESS


Defining the problem and

research goals

Developing the research plan for

collecting data

Implementing the plan-collecting and analyzing the data

Interpreting and reporting

findings

WHERE IS INFORMATION COLLECTED FROM FOR MARKET RESEARCH ?


A- Within the organization - information already available within the organization.

B- Outside the organization – information already gathered form some project.

- Libraries, - Government, - Private business firms

- Professional and business associations,

- Advertising agencies - Research organizations.

C- Information specifically collected for the project – including:

- Sampling,

- Telephone,

- Mail,

- Personal surveys (questionnaires)

I. SELECTING A TARGET MARKET

Chapter 4: TARGET MARKETS

An organization’s marketing planning begins with a decision on its marketing goals. Once these goals are set it is necessary to select and analyze the organization target market.

1. What is target market ?

Target market is a group of customers at whom the organization specifically aims its marketing effort.

Careful selection and accurate definition of the target market are essential to the development of an effective marketing mix.


2. Guidelines Regarding Market selection

1-The target market should fit in with organization goals

2-The organization must be able to market the product.

3-Seek markets that will provide sufficient profits for organization.

4-Seek a market where the number of competitors and their size are small.


3. Target Marketing strategy

There are tow general approaches in looking at a market:

Marketing aggregation or market segmentation.


1- Market aggregation

Advantages

- Cheaper to produce, distribute and promote.

- Inventory costs minimized (limited colour, size etc.)

- Warehousing and transport efforts more efficient.

- One promotional campaign.

- One price.




2- Market Segmentation – The total market is seen as being composed of many smaller components. The total market for most products is too varied.

The organization breaks down the total market into several groups and then selects one or more of these groups as its target market. Then a separate marketing mix is developed for each of these segments.

Market segmentation is customer oriented – it identifies the needs of customer.

Ex. Car manufacturer – separate marketing mix developed to reach people who needs cars but has a range of vehicles to reach different groups.




3- Conditions for effective segmentation

1- Each segment must be measurable and accessible though existing marketing institutions.

Ex. Channels of distribution, advertising, minimum of cost and waste.

2- Each segment should be large enough to be profitable.




4- Segmentation can take any form

- Age

- Sex

- Family life

- Urban/rural population

- Regional population

- Cultural groups

- Personality

- Attitudes of consumers

- Size of consumer, Ex. Clothes for particular size range.



A- Why are customers important ?

- Without customers a business cannot even begin.

- Customers are the driving forces that powers a market economy.

- When customer stop placing orders or stop buying, a business

starts to die.

- A valuable source of new product ideas (ask a customer what ha

wants)

II. CUSTOMER ANALYSIS


The most important thing in the success of any organization is a satisfied customer.

B- Key points to analyze customer

What we are going to look at now is 6 questions about customer and their motivation.



1-Who are my customers ?

It is important to identity that our customers are:

-Wholesalers, Retailers, End users.

There are two types of customer:

-Consumer customers: Everyone who purchases goods for their own or family members use.

-Business customer: Products sold to business, Wholesalers, retailers.




2-Where are my customers ?

Knowing where your customers are helps to identify where to put

your marketing and advertising effort.

When you have good idea where your customers are, you know areas to advertise in, and it helps in targeting areas where there are few customer.




3- When do customers buy ?

If there are periods when customers want to purchase, the marketing manager should strategies to meet these customer demands.

Ex. If people like to rent videos at night and on the weekend, stores should adjust their hours to suit their customers needs.




4- What do my customers want ?

-Monitor the habit buying, size style etc.

-Assess what is not selling.

-Check competitors products to see if they are selling better and why.

5- Why do customer buy ?

-Need to replace stocks that have been use.

-Breakdown of old products.

-In response to advertising.

-Wanting what their friends have.

-Needs for food, shelter, clothing.




6- How do you learn about Customers ?

Self Actualization Needs

Status Needs

Social Needs

Safety Needs

Physiological Needs

MASLOWS HIERARCHY OF NEEDS

C- Customer Checklist



1- Are we easy to do business with ?

-Easy to contact.

-Provide information to customer.

-Easy to order form.

2- Do we dip our promises ?

-On product performance.

-On delivery.

-On installation.

-On training.

-On service.

C- Customer Checklist



3- Do we meet the standard we set ?

-Specific.

-Do we even know the standard.

4- Are we responsive ?

-Do we listen.

-Do we follow up.

5- Do we work together ?

-Share information.

-Make decisions together.

Industrial organizations are business that buy products or service to use either :

1-In making other goods and services, or

2-To use in their own business.

III. THE INDUSTRIAL MARKET


The industrial market consists of organizations that buy goods and service to use in their business. It is a very big and important market.

Industries that make up this market include :

-Agriculture, forest and fishing - Mining

-Manufacturing - Electricity, water and gas

-Construction - Wholesale and retail trade

-Transport and storage - Communication

-Government and defense.

The general category “industrial products” is too broad to use in developing a marketing program so we have broken it down into five broad categories:

III. THE INDUSTRIAL MARKET


Classification of industrial products

1-Raw materials

2-Fabricating materials and parts

3-Installations

4-Accessory equipment

5-Operating supplies

I. PRODUCT PLANNING AND DEVELOPMENT

Chapter 5: PRODUCT

A. Product planning

Product planning includes all activities that enable an organization to decide what products will market.

These activities include:

1- What product to make and what to buy;

2- More or less products;

3- What row material uses for each products;

4- What brand and packaging should be used;

5- How should it be style and designed

6-In what quantities;

7- What price.


Chapter 5: PRODUCT

B. Product Development

1- The product life cycle

+0

- 0

0

Sales

Volume

Profit

Introduction Growth Maturity Decline


Chapter 5: PRODUCT


1- The product life cycle

The product life cycle presents the company with two major challenges.

1- To develop a process for finding new products to replace again ones.

2- The company must understand how products age, and adapt its market strategies for products as they pass through different life cycles.


Chapter 5: PRODUCT


2- Categories of new product development.

There are three categories.

a- Really innovative and truly unique.

b- Replacements for existing products that are significantly different,

Ex. New fashion cloths, new model cars.

c- Imitative products-not new to the market but new to the company (copying someone else’s product).


Chapter 5: PRODUCT


3- Important of new product development

Why is an important to continue develop new products

a- Existing products will eventually become obsolete as their sales volume and market share are reduced by competitive products.

b- As a product ages, its profits generally decline. Therefore if those products are not changed or replaced, the company’s sales and profits will reduce and eventually the company will fail.

c- The introduction of a new product at the proper time help to maintain the company’s profit.


Chapter 5: PRODUCT


4- Steps in the development of new product

1. Search for new product ideas

2. Primary evaluation

3. Income and cost analysis

4. Development and testing

5. Test market

6. Introduction

7. Evaluation


Chapter 5: PRODUCT


5- Reasons for some new products fail

- Poor marketing research – misjudging what the market wanted, overestimating goals, lack of knowledge of buying habits.

- Technical problem in design or production.

- Poor timing in product introduction.

6- Reasons for some new products success

- The product suits the customers needs.

- The product is better and cheaper than its competitions.

- The product is well supported by the company.

II. PRODUCT LINE AND PRODUCT MIX STRATEGIES

Chapter 5: PRODUCT

1- Product line

A product line is a group of products that are closely related, because they function is a similar manner, are sold to the same customer group, are marketed through the same types of outlets and cost about the same.

Product length decisions

- A product line is too small if the company can increase profit by adding items.

- A product line is too long if the company can increase profit by dropping items.

II. PRODUCT LINE AND PRODUCT MIX STRATEGIES

Chapter 5: PRODUCT

2- Product mix

A product mix is the set of all product lines items that a particular seller offers for sale to a buying.

3- Product Width

Cigarettes Cigars Soft Drinks Beers

555 Monopole Coca Cola ABC

Marlboro Old Port Fanta Tiger

Davidoff Statesman Mirinda Ancher

L&M Sprite Crown

Mild seven Sarsi

ARA

Product Width (Product breadth)

Pro

duct

lin

e le

ngt

h

III. PRODUCT BRANDING

Chapter 5: PRODUCT

A Brand is a name, symbol, special design or a combination of these that identify the goods of the seller a brand separates one sellers product from those of competitor.

A Brand name consists of words, letter or number that be vocalized

A Brand mark is the part of the brand that appears in the form of a symbol, design or distinctive colouring or lettering. It is recognized by sight.

A trademark is a brand that is given legal protection – it is a legal term. All trademark are brands and include works, letter and pictures.

Product branding is the way that product is presented to the customers. Why is it that people choose certain products and not others? The Buyers choice may be influenced by the guarantee offered or by an attractive package.


Chapter 5: PRODUCT

Importance of brands

-Makes it easier for customers to identify products.

-Assures customers that they are getting the same quality when they buy again.

-For sellers, brands are something that can be when advertised and that will be recognized by the customers displayed in shops.

Reasons for not branding

-Companies unable maintains a consistent output or unwilling to promotions the brand.

-Some things are difficult to brand, e.g. Fresh fruit and vegetables

-Products graded as poor quality – sold through different channels at reduced prices.

-No name brands are generally cheaper in quality and price.


Chapter 5: PRODUCT

Characteristics of a good brand.

-Brand says something about the product, e.g. Free and lovely shampoo, cool charm deodorant.

-Should be easy to pronounce, spell and remember, e.g. 555, ARA, Nokia.

-should be distinctive to capture attention, e.g. Poison the name of a very expensive perfume.

IV. PRODUCT PACKAGING

Chapter 5: PRODUCT

1-Reason for packaging

-Safety –in handling and storing

-Against wrong use. e.g. child proof bottles.

-Helps to identify the product – once two different brands are opened you cannot tell the difference.

-To attract customers though attractive packaging.

2-Packaging StrategiesChanging the package

Why do companies change packaging?

-To stop decrease in sales and attract a new group of customers

-To correct any fault in an existing package.

-To take advantage of new material.

IV. PRODUCT PACKAGING

Chapter 5: PRODUCT

2-Packaging StrategiesTypes of packaging

-reusable. e.g. Jars that can be used for other purpose after the contents are finished.

-Multiple packaging – more that one item in the same package, proved to increase sales.

-Disposable packaging – which covers most packaging. There are many criticisms of this type of packaging.

e.g. -Big problem with disposal.

-Depletes our natural resources.

-Health hazard. e.g. Aerosol cans, plastic packaging.

V. PRODUCT LABELING

Chapter 5: PRODUCT

The label is the part of package that carries information about product. A label may be part of the package or it may be a tag attached directly to the products.

Some products by law, must carry labels which gives the customer some information about the product.

e.g. -Weights and measures,

-Public health,

-Poisons,

-Pharmaceutical goods.

-Chemicals.

V. PRODUCT LABELING

Chapter 5: PRODUCT

So that covers the areas of branding, packaging and labelling. A well prepared program for product planning and development will also include the following features:

-Product design

-Product color

-Product quality

-Product warranty.

I. PRICING OBJECTIVES

Chapter 6: PRICE

The major pricing objectives are

1- To earn a return on investment or sales.

2- To maximize profits.

3- To increase sales.

4- To gain or hold a target share of the market.

5- To match competitions prices.

6- To increase buyer.

II. FACTORS INFLUENCING PRICE DETERMINATION

Chapter 6: PRICE

1-Estimated demand for the product

-The “expected” price – what customers think its worth. This provides a general guide to the price.

-Market it in a few test areas and check buyers reaction to prices.

-Estimating demand at different price levels.

2-Target share of the market

The market share targeted by a company is a major factor in determining the price.

A company trying to increase its market share may sell cheaper or offer discounts.


Chapter 6: PRICE

3-Competitive reactions

Present and potential competition must be considered.

Decision on whether to enter the market at a high price or low price.

High profit pricing may be suitable for new products because :

-In the early stages, little competition.

-”Insurance” against setting the wrong price. If the original price is too high and the market does not respond,

management can easily lower the price. If the original price is too low and does not cover cost, then it is difficult to increase the price.

-High initial price can keep demand within the company’s production capacity.


Chapter 6: PRICE

Low profit pricing is better where:

-The quantity sold is highly sensitive to the price.

-Substantial reduction in production and marketing cost can be achieved through large scale operations.

-The product is expected to face very strong competition.

The nature of the potential competition will influence managements choice between the two pricing strategies.

If competition can enter the market quickly and if the sales of the product are expected to be high management should adopt low profit pricing to:

-Discourage other businesses form entering the field because of low profits.

-Get a strong hold on its share of the market.

III. BASIC METHODS OF SETTING PRICE

Chapter 6: PRICE

There are three basic approaches to setting prices:

-Price based on total cost plus a desired profit (cost – plus pricing)

-Price based on a balance between estimated of market demand and supply. e.g. the cost of production and marketing (break even analysis).

-Prices based on competitive marketing conditions.


Chapter 6: PRICE

Terms to become familiar with

-Fixed cost : a cost that remain constant regardless of how many items are produced.

e.g. rent executive salaries.

-Variable cost : a cost that is directly related to production.

-Average variable cost : the total variable cost divided by the number of units produced.

-Total cost : the sum of the total fixed cost and the total variable cost.


Chapter 6: PRICE

1-Cost – plus pricing

In its simplest form, cost – plus pricing means setting the price of one unit of a product to the units total cost plus the desired profit on the unit.

Selling Price = Total Costs + Desired Profit

2-Break-even analysis

A break-even point is that quantity of units produced at which sales revenue equals the total cost, assuming a certain selling price.

Break-even point=Total Fixed Cost

Selling Price – Average Variable Cost

Chapter 6: PRICE

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(Q)

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(UVCxQ)

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(FC)

Total

Cost

(FC+VC)

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(TR-TC)

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Chapter 6: PRICE

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Chapter 6: PRICE

3-Prices based on competitive marketing conditions

A company is most likely to use this pricing method when the market is highly competitive and the company’s product is not significantly different to competing products.

The market – based method of pricing is also used where a traditional or customary price level exists. e.g. Sweets, soft drinks.

A variation to market – based pricing is to set the price below the competitive level. This is typically used by discount stores which offer few services and operate on the principles of low mark-up and high volume.

Pricing above market level usually works only where the product is distinctive or where the seller has gained prestige in its field.

IV. PRICING STRATEGIES AND POLICIES

Chapter 6: PRICE

After deciding on pricing goals and then setting the base price, the next task in pricing is to establish specific strategies in several areas of the pricing structure.

These strategies include the use of discounts and allowances. Discounts and allowances result in a deduction from the base price. The deduction may be in the form of the reduced price or some other concessions, such as free merchandise.

Quantity discounts – deduction from the price if purchased in bulk to encourage customers to buy in larger quantities.

Trade discounts – discount offered to buyers in payment for marketing functions that they will presumably perform.

Cash discount – a deduction granted to buyers for paying their bill on time.

IV. PRICING STRATEGIES AND POLICIES

Chapter 6: PRICE

Geographic pricing strategy – in its pricing, the seller must take into account freight cost involved in shipping the product to the buyer. Therefore, pricing policies need to take into account what charges will be made.

One Vs variable price

- One price policy is to charge the same price for the same product to every buyer.

- Variable price policy is to charge different prices for the same product to different buyers.

Psychological pricing – setting odd prices to increase sale.

Example: $ 20 ($ 19.99.99)

3.000 Riel (2,999.99 Riel)

I. INTERMEDIARIES (Middlemen)

Chapter 7: DISTRIBUTION

Intermediary is an independent business that operates as a like between producers and the ultimate consumer or industrial user.

The role of the middlemen is to buy and sell goods and services. The two major middlemen are wholesalers and retailers.

Their job involves:

a- Collecting the outputs of the producers

b- Dividing the outputs into the amounts desired by the customer and then putting the various items together in the assortment wanted.

c- Selling the assortment to consumers and industrial users.



Why are middlemen important ?

- Not practical for producers to with the ultimate consumer.

- Inconvenient for customers not to have them.

- Middlemen serve as purchasing agents for their customers and as sales specialists for their suppliers.

- Middlemen provide storage services, bulk – breaking activities.



1- Retailing

Retailing includes all activities directly related to the sale of good or services to the ultimate consumer for personal, non-business use.

A retailer or a retail store is a business enterprise that sells primarily to household consumers for non-business use.

Example of retail outlets:

- Large department stores

- Supermarkets

- Boutiques

- Discount stores

- Fruit and vegetable shops or stalls

- Specialty stores (tobacconist, baker, etc.)

- Chain stores

- Franchise stores



Franchising

Franchising is a system of distribution where independent business managers are given the right to sell products or services in exchange for a fee or agreement on buying and merchandising policies.

The basic agreement in franchising is and agreement (contract) between an organization and a set of independent dealers specifying how the two will do business together.

- A contractual arrangement between a franchiser (supplier) and franchisee (retailer).- Franchiser grants right to sell certain goods or services in a

certain area. - Franchiser usually provides equipment, the products for sale and managerial service. - Franchisee agrees to market the product in a manner established by the franchiser.



Franchising

Advantages to franchisee

- Bulk buying power

- National advertising

- Strong support from franchiser

- Proven products

- “Guaranteed” market

- Safer than going alone.

2- The wholesale market

Wholesaling includes, the sale of products or services to those who are buying for resale or business use.



2.1- Need for wholesalers

Most manufacturers are small and do not have the sales staff to contact the business who are their customers. So they sell to wholesalers are marketing specialist.

2.2- Structure of wholesaling

The structure of wholesaling middlemen can be divided into three groups:

- Merchant wholesalers

- Manufacturers sales branch

- Agents and brokers.

2.3- Channels of distribution

A channel of distribution for a product is the route; it takes as it moves from the producer to the final customer or industrial user.



2.3.1- Channels of consumer product

Five broad channels of distribution are generally used in the distribution of consumer goods.

Retailer Retailer Retailer Retailer

Agent Agent

Wholesaler Wholesaler

Producer

consumer

Dir

ect



2.3.2- Channels of industrial product

Industrial Wholesaler Agent

Producer

Business Customer/ Industrial User

Dir

ect Agent

Industrial Wholesaler

II. MANAGEMENT OF PHYSICAL DISTRIBUTION


Physical distribution consists of all activities concerned with moving the right amount of the right products to the right place at the right time.

A-Task of physical distribution

The task of physical distribution may be divided into five parts:

1-Inventory location and warehousing

2-Materials handing

3-Inventory control

4-Order processing

5-Transport

I. PROMOTIONAL MIX

Chapter 8: PROMOTION

The marketing promotion mix consists of four major tools:

1-Advertising Paid non – personal presentation and promotion of ideas, goods or services by seller.

2-Sale promotion – Short term incentives to encourage purchase or sale of a product.

3-Publicity – Non – personal unpaid promotion by the media.

4-Personal selling Personal presentation to one or more potential customers for the purpose of making sales.

I. PROMOTIONAL MIX


A- Determination of promotional mix

1- The amount of money available for promotion.

2- The nature of the market:

-Geographic shape

-Type of customer

-Concentration of the market.

3- The nature of the product:

-Consumer market (more advertising)

-Industrial market (more personal selling).

4- The stages of the products life cycle

I. PROMOTIONAL MIX


B- Guideline for determining a company’s promotional mix

Main element in promotional

mix is:

Advertising Personal Selling

When market is

Geographically dispersed

Many customers

Many industries

When product is

Standardized

Of low unit value

Non-technical

When market is

Geographically concentrated

Few customers

Few industries

When product is

Customer made

Of high unit value

Technical

I. PROMOTIONAL MIX


C- Method of determining how much to spend on promotion

1- As percentage of company income

2- deciding what the promotional program must achive and

then determining what it will cost.

3- Use of all available funds – build sales.

4- Follow the competition – not a very sound method because

different companies have different strategies and gosls.

I. PROMOTIONAL MIX


C- Method of determining how much to spend on promotion

The total promotional program for an organization should be built into a campaign around

- The advertising campaign

- Personal selling effort

- Sales promotion devices – displays, samples etc.

- Physical distribution management – to ensure adequate stock are available at the start of the campaign.

II. MANAGEMENT OF PERSONAL SELLING


Personal selling is the major method of increasing profitable sales.

A. Sales jobs are different to other jobs

-Sales people represent their company to the outside would.

-Sales people operate with little or not direct supervision.

-Sales people generally need more tact, diplomacy and social poise-need to mix socially with customers.

-Sales jobs frequently require a considerable amount of traveling and much time spent away from home.

-Sales people have quotas to meet.




B. Types of sales jobs

-Driver/Salesman – soft drinks, milk etc.

-Shop assistants – behind counter, not much selling effort.

-Salespersons that go to customers outside the shop – door to door, retail outlets etc.

-Jobs where the persons technical product knowledge is important, example sales engineer.

-Advertising services, consulting services.




C. Function of personal selling management

Management of the personal selling function is simple a matter of applying the three stage management process of planning, implementing and evaluating to a sales force and its activities.

Planning

-Forecasting sales.

-Preparing sales budget.

-Establishing sales territories

-Setting quotas for the sales people.




C. Function of personal selling management

Implementing

Organizing staffing and operating the sales force to carry out the plans to reach the goals.

Evaluating

Performance evaluation of individuals and the total sales performance.

III. MANAGEMENT OF ADVERTISING


A. Type of advertising

1- Product advertising – Advertising related to the product.

2- Institutional advertising – Designed to create a desired attitude to wards the seller and to build goodwill.

3- National and local advertising – National advertising is used by manufacturers or other producers using national media.

4- Manufacturers and retailers advertising – Manufacturer advertising focuses on the product – it does not care where customers buy its products as long as they buy its brand. Retailers advertising focus on the store. The retailer does not care what product you buy so long as you buy at his shop.



B. Objectives of advertising

1- Awareness: The consumer’s ability to recognize and remember the product or brand name.

2- Interest: An increase in the consumer’s desire to learn about brand some of the features of product or brand.

3- Evaluation: The consumer’ appraisal of the product or brand on important attributes.

4- Trial: The consumer’ actual first purchase and use of product or brand.

5- Adoption: Through a favorable experience on the first trial, the consumer’s repeat purchase and use of product or brand.



C. Selecting the media

Selecting the media to advertise in involves choosing between television, radio newspapers and magazines.

Newspapers

- Flexible with placing and withdrawing adds.

- Intensive coverage of the local market.

- Life of a newspaper ads is very short.

Magazines

- Excellent for high quality printing and color.

- Can reach the national marketing at relatively low cost.

- Can reach selected market through advertising in specific magazines.

- Inflexible and infrequent.



Radio

- Relatively low cost.

- Can reach a large number of people.

- Special interest programs can be targeted.

- Only aural presentation.

- Audience attention usually at low level.

Television

- Most versatile.

- Most expensive.

- Visual and aural.

IV. MANAGEMENT OF SALES PROMOTION


-Includes displays, trade shows, demonstrations, samples etc.

-Sales promotional devices at the point of purchase inform.

-Remind or stimulate the buyer.

-Used to coordinate and supplement the advertising and sales force programs.

Good Luck !!!

Chapter 1: Introduction to Marketing

Marketing Principle

After studying this chapter, students can be able to:

-Understand what is marketing.

-Understand the core of marketing concept.

-Understand the importance of marketing.

-Clarify who is the marketing manager.

-Understand the typical responsibilities of marketing managers.

-Understand the marketing management evolution.

Chapter 2: The Marketing Environment

Marketing Principle


-Understand what is the external environment of marketing.

-Know the influence of these environment.

Chapter 3: Management Marketing System

Marketing Principle


-Understand the marketing system and its management.

-Understand the some basic of management technology.

-Understand what the marketing mix.

-Know what is a marketing information system.

-Why company need for a marketing information system.

Chapter 4: Target Markets

Marketing Principle


-Understand what the target market.

-Understand the selection a target market.

-Know the guidelines regarding market selection.

-Understand the target market strategy.

-Know who are customers and why customers importance.

Chapter 5: Product

Marketing Principle


-Understand the product planning and development.

-Know the steps in the development of new products.

-Understand the reasons for some new-products success and failure.

-Understand the product line and product mix strategies.

-Know the product branding, labelling and packaging.

Chapter 6: Price

Marketing Principle


-Understand the major pricing objectives.

-Know the factors influencing price determination.

-Understand the basic methods of setting prices.

-Know the pricing strategies and policies.

Chapter 7: Distribution

Marketing Principle


-Understand the intermediaries.

-Understand the franchising and licensing.

-Know the channels of distribution.

-Understand the management of physical distribution.

Chapter 8: Promotion

Marketing Principle


-Understand what the promotion and promotional mix.

-Know the guideline for determining a company’s promotional mix.

-Understand the method of determining should be pended on promotion.

-Know the management of personal selling.

-Understand the management of advertising and sales promotion.

-Know how to selecting the media.

Documents

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