BUSINESS ADMINISTRATION SYLABUS

MODULE I: FUNDAMENTALS
Topic 1. Enterprises & businesspeople
Topic 2. Types of enterprises
Topic 3. Environment
Topic 4. Introduction to the management subsystem

MODULE II: FUNCTIONAL SUBSYSTEMS CHAPTER 6: Enterprises & marketing management

Topic 5. Introduction to the operations subsystem
Topic 6. Enterprises & marketing management
Topic 7. The financial functioning of enterprises
Topic 8. Human Resources INES HERRERO CHACÓN
UNIVERSIDAD PABLO DE OLAVIDE
MODULE III: BUSINESS DEVELOPMENT SEVILLA
Topic 9. Business Evolution over time.
Topic 10. Business cooperation.

Chapter 6: Marketing-mix decisions MARKETING definition according to Kotler

Specific reading:

“Marketing is a societal process where groups and

Class notes
individuals get what they need and wish through
Kotler, Philip (2000): Marketing Management. Prentice Hall creating, offering and free interchange of
Chapters 11,…,16
products and services valuable for the others”

1
 Marketing
NEEDS
Basic human requirements
 Innate MARKETING DO NOT CREATE NEEDS
 Limited …but influence wants and wishes
 Not influenced by marketing

WANTS&WISHES DEMAND
Needs become wants or wishes when they are  Demands are wants for specific products backed up by
directed to specific objects an ability to pay
 Non-limited
 In continuous evolution  Companies should estimate now many people are “willing
 Depend on culture and able” to buy their products
 Influenced by marketing

Exchanges and transactions

PRODUCT definition:
EXCHANGE TRANSACTION
A FIRST APPROACH: Negociation to When agreement is
“A product is........anything that can offered to a market to obtaining a desired reached, then
satisfy a want or a need.....” product from transaction takes place.
someone by offering Money does not have to
This include... physical goods, services, experiences, events, something in return be involved
places, properties, organizations, information and ideas.

GOING FURTHER…

“A product is a set of tangible and intangible

attributes, which include packaging, color, price,
quality, and brand, plus the services and reputation of The essence of marketing is an EXCHANGE of value for value
the seller”
Marketing involves stimulating and managing EXCHANGES

2
The market Marketing role in the economic system
Communication

Exchage process
(Supplier-Firm-Customer)
Market INDUSTRY MARKET
PRODUCTION Products CONSUMERS

Traditionally: Money

“Market was a physical place where buyers and

sellers gathered to exchange goods”
Information

 RELATIONSHIP MARKETING
 INTERNAL MARKETING
 SOCIETAL MARKETING

RELATIONSHIP & INTERNAL MARKETING SOCIETAL MARKETING definition:

Negociation => routine
… marketing network
Marketers: Consumers: “The SOCIETAL MARKETING CONCEPT holds that the
High-quality products&services Loyalty organization´s task is to determine the needs, wants and
Fair prices over time Offers feedback interest of target markets and to deliver the desired
satisfactions more effectively and efficiently than
“The RELATIONSHIP MARKETING has the aim of building competitors in a way that preserves or enhances the
long-term mutually satisfying relations with key parties – consumer´s and the society´s well being”
customers, suppliers, distributors – in order to earn and
retain their long-term preference and business”

...this cuts down transaction costs and time

The INTERNAL MARKETING holds that the organization

has to care their employees as its internal customers

3
 Companies Market Focus What is marketing-mix?

Production Focus O < D MARKETING-MIX:

Marketing tools that the firm uses to pursue its
marketing objectives in the target market
Product Focus
EVOLUTION

O = D
O > D
Sales Focus The four P’s of marketing mix:

Product
Marketing Focus
Price
O >> D
Place
Integrated marketing
Promotion

Marketing-mix evolution
Refinements of concepts: THE MARKET
Buyer’s view Consumer’s view

4 P’s 4 C’s …from the point of view of marketing…

Product
The market concept is defined
according to the need and want
Price
that a certain product satisfy to
a group of consumers
Place

Promotion

4
 Segmentation of the market Bases for segmenting consumer markets

Recognise the
Differents ways
heterogeneity & to satisfy the Geographic
of the market Region, city size,
market weather, density Demographics
Age, sex, family size,
family life cycle, race,
profession, income…

Need to “segment the market”

Psychological
Life style or personality

A market segment consist of a large identifiable group within

BEHAVIORAL
a market with similar wants, purchasing power, geographical Events, benefits, uses,
attitudes....
location, buying attitudes, or buying habits

Segmentation focuses for target-market Five forces determining attractiveness of a segment

Industrial competition Potential entrants

Mass Segment Individual
vs (segment rivalry) (mobility threat)
marketing marketing marketing

 One or several
Attractiveness
One product for each buyer
One product for all segments chosen as = Customized marketing
buyers target-market = One-to-one marketing Supplier power
“One size fits all” Buyer power
“Ability to prepare on a
Mass production, mass  Flexible market
mass basis individually
db & mass promotion offerings: designed products &
-Naked solution communicat. to meet each
Substitutes
Henry Ford
-Options customer´s requirements” (substitutes threat)

5
MARKETING steps What is marketing-mix?

SEGMENTATION
MARKETING-MIX:

TARGET Marketing tools that the firm uses to pursue its

marketing objectives in the target market
POSITIONING

MARKETING-MIX The four P’s of marketing mix:

Product
POSITIONING
POSITIONING Price
Place
Positioning is the act of designing a business offer and image Promotion
to ocupy a distinct place in the mind of the consumer

PRODUCT definition Product Component

1. A product is the result of a

production process
First approach Tangible attributes

2. A product is any offering

that can satisfy a need or Market-oriented
[Link] includes goods,
services, experiences, events, definition (Kotler) Basic Product Other services
persons, places, information… Guarantee, technical assistance…

3. A product is a set of
attributes that a consumer
think that a certain product Consumer’s oriented Intangible attributes
possess that satisfies his definition
needs and wants.

6
Product levels
BRAND DEFINITION

“A brand is a name/mark that differentiates the

product of one seller or group of sellers from
competing products”

Core Benefit
BRAND = Brand name + Brand mark
Basic Product

Expected product
consists of part of the brand
words/letters that appears in the
Augmented product
/numbers that form of a symbol,
can be design, distinctive
Potential product vocalized color or lettering

BRAND STRATEGIES
BRAND SPONSOR
USING DISTRIBUTOR BRANDS (“marcas blancas”):

Manufacturer Distributor Lisensed Producer marketing under middlemen’s brands

brand or brand or brand
 Advantages:
- produced at a low cost by manufacturers with
excess capacity and with lower marketing cost.
- Posibility of producing lower-quality products

 Disadvantage:
Producer marketing under middlemen’s brand - consumers loyalty is for the distributor, not for
(possibility of producing lower quality products) the producer

7
 What is marketing-mix?
PRICE

MARKETING-MIX:
“Price is the amount of money and/or other items with
Marketing tools that the firm uses to pursue its utility needed to acquire a product.”
marketing objectives in the target market

The four P’s of marketing mix:

PRICE INCOME
Product
Price PRODUCT
Place DISTRIBUTUION EXPENSES/COST
Promotion
COMMUNICATION

Importance of price Pricing

For the economy: COST methods Lower limit
 influences the price of other goods/services
 our free-enterprise system is based on price MINIMUM price (Pm)  variable cost per unit
TECHNICAL price (Pt)  total cost per unit
For the customer: OBJETIVE price (Po)  total cost per unit  desired profits
 price more important to some consumers
 perception of quality may be linked to price
DEMAND methods Lower/upper limit
For the firm:
 It is a factor of differentiation Demand function (normal/inverse demand function)
 Can influence firm’s image
 It determines firm’s income indirectly (demand)
 It determines firm’s income directly (= price x quantity) COMPETENCE methods Lower/upper limit

Firm’s flexibility to fix prices depends on the

differenciation degree of the product

8
PRICING OBJECTIVES: What is marketing-mix?

Profit-oriented Price skimming

MARKETING-MIX:
Setting prices so that total revenue is as large as possible Marketing tools that the firm uses to pursue its
relative to total costs.
High introductory prices when it’s a new or unique product marketing objectives in the target market

Sales-oriented Penetration pricing

The four P’s of marketing mix:
Setting a relatively low price for a product initially as a
way to reach the mass market. Product
Price
Status Quo Status Quo pricing
Place
Charging a price identical to or very close to the Promotion
competition’s price.

Distribution channels Distribution channels

DISTRIBUTION CHANNEL

A distribution channel consists of the path that goes from

DIRECTLY DISTRIBUTION MIDDLEMEN
producer to ultimate consumer or business user.
Often it includes the set of people and firms involved.

Every firm wants to have a distribution channel that meets

customer's needs and also provides a competitive advantage. Middlemen

“A middleman is a firm that renders services

related directly to the sale and/or purchase of a
product as it flows from producer to consumer”

9
 Middlemen Major distribution channel

Zero-level channel (nivel 0)

 distribution channel Buy to producers of other wholesalers Producer Consumer
Wholesalers
Sell to retailers or other wholesalers

One-level channel
Generally buy to wholesalers
Retailers Producer Retailer Consumer
Sell to final consumers

Do not buy products

Agents Two-level channel
Arrange the transfer
Producer Wholesaler Retailer Consumer

Three-level channel
Producer Agents Wholesaler Retailer Consumer

Distribution channel What is marketing-mix?

Producer
MARKETING-MIX:
Marketing tools that the firm uses to pursue its
Agent 1 Agent 2 Agent 3 marketing objectives in the target market

Wholesaler 1 Wholesaler 2 Wholesaler 3 Wholesaler 4 The four P’s of marketing mix:

Product
Retailer 1 Retailer 2 Retailer 3 Retailer 4 Retailer 5 Price
Place
Promotion
Final Consumer

10
COMMUNICATION Marketing communication mix

It is a variable of marketing mix with the objective of 1. ADVERTISING ( “Propaganda”)

informing about the products and services that the firm offers Massive communication process
to the market

2. PERSONAL SELLING
Personal presentations

Objetive: reach potential customers

3. SALES PROMOTION
Short-term incentives to increase sales

4. DIRECT MARKETING
Direct communications with individuals to
obtain immediate response

Marketing communication mix

5. PUBLIC RELATIONS & PUBLICITY.

Protect/promote image or product

6. SPONSORSHIP

Colaborate in the expenses of a special event

11