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Objective 1 Explain the concepts of market and marketing

What is a market?
The market is defined as any situation in which the buyer and the seller interact
to exchange various goods and services.

What is marketing?
Marketing is the management process responsible for identifying, anticipating
y. It focuses on satisfying
consumer demands.

New trends of marketing:

Social media marketing the use of social media platforms and websites to
promote a product or service.

Integrated marketing is a marketing strategy that stresses the importance of a

consistent, seamless, multi-dimensional brand experience for the consumer. This
means that each branding effort (through Television, radio, internet etc) is

Apple computer brand)

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Objective 2 Explain marketing activities

What are the marketing activities?
Marketing activities are things a business owner or business undertakes to boost
sales and to improve its brand.

Market activities:
a) Market research This is the systematic gathering, recording and analysing of data
about problems relating to a specific marketing situation.
The purpose of market research is to identify consumer tastes, consumer
behaviour and how the competition operates. By obtaining information the firm
can make better decisions about the product.

b) Pricing This is the process whereby the business sets the price at which it will sell
its products and services.
When the firm is a price taker, price is determined when supply = demand. This is
referred to as the equilibrium point. Price maker however sets its price.

c) Packing This is how a saleable product is wrapped, displayed and presented to

the customer. It includes the display, the description, safety precautions and
instructions on the use of the product.

d) Branding This is the name, sign, symbol or design that differentiates the product
of a company from its competitors. A brand name is permanent. A good example
of a brand name is Nike.

e) Sales promotion Defined as short term incentives designed to encourage the sale
and purchases of goods and services.

f) Advertising This can be informative, persuasive, comparative or a reminder of a

product on the market.

g) Distribution This is the process of making a product or service available for the
consumer or business user that needs it. It can be done directly or indirectly with
distributors.
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Objective 3 Describe the marketing mix

What is the marketing mix?
4 Ps of marketing
production, price, place and promotion.

The marketing mix:

1. Production This identifies the goods and services that should be produced and
the quantity to whom it should be made for and the design of the product.

2. Price The price is the monetary value of the goods and services.

There are multiple pricing strategies we should look at:

Penetration pricing setting a deliberately low price to enter the market

Cost-plus pricing the simplest method of setting a price. Price is calculated

by unit variable cost + fixed costs + markup

Market-oriented pricing setting competitive prices

Promotion pricing involves introductory price offers and offers

Market-skimming pricing involves charging a high price to secure a large

profit (e.g. luxury goods such as Gucci and Louis Vuitton)

Psychological pricing setting prices just below certain levels so they

appear cheaper to the average customer (e.g. setting a price at $0.99
instead of $1.00)

3. Place This is the pattern of distribution that the firm uses to get to the customer.
It involves storing and moving products to the customer often through
intermediaries such as wholesalers and retailers and also includes transportation.

4. Promotion These are the methods used to make consumers aware of the
product. (e.g. through advertising or sales promotion)
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Objective 4 Describe the factors that influence consumer behaviour

Factors that influence consumer behaviour:
Price Income
Price of substitute goods Spending patterns
Quality Brand loyalty
Taste
Traditions

Objective 5 Identify factors affecting packaging and presentation of goods

a) Presentation factors include: size, shape, design, labelling,
(a small tag attached to the product or a complete design within the package)

b) Use of brand names:

It helps in creating customer loyalty
Legal protection for ownership rights is given to companies
Firms can promote the product more easily through advertising
It helps to increase sales

Objective 6 Describe methods of promoting sales

a) Advertising Through functions, forms and social media.
Functions:
Highlight unique features of a product

Educate consumers about the product

Highlight special events such as sales and late opening

Forms:
Electronic radio, television, telephone, telemarketing
Printed media newspapers, magazines
Other media posters, billboards

Social Media: Also known as networking advertising, social media includes all
forms of online advertising.
demographic information and target their ads properly and appropriately.
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b) Public relations this is the creation of a favourable image of the business in the
eyes of the employees, the public and the government.

Image formation may take the form of:

Press releases to draw public attention to products
Offering special awards
Sponsorship of community, national or regional events
Business entertainment

c) Sales promotions methods

Coupons detachable tickets that entice the holder through the
probability of receiving something

Trading stamps small paper coupons given to customers which have a

minimum cash value

Loyalty points earning for every $1 you spend, encouraging customers

to continue to shop

Rebates an amount paid by way of reductions, return or refund on

what's already been paid for

Loss leaders this is an item with a huge discount used to attract

customers to the store

Bundling a marketing strategy that joins products or services together

to sell as a single unit

d) Personal selling this involves the salesperson moving from home to home selling
their products. The salesperson has direct contact with customers and receives
instant feedback.
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Objective 7 Identify the techniques of selling

Techniques of selling:
a) Salesmen Salespeople use many techniques and approaches to obtain sale

1. Direct selling goods are sold directly from the producers to the consumers.

Telesales goods are ordered directly from the company that advertises
on the sales channel
Online shopping shopping from the comfort of your home via the
internet

2. Product displays displaying products attractively. Persons trained to do this

are called merchandisers.

3. Samples given to patrons at shops and malls. Feedback is usually given and
used by a firm to enhance its products.

4. Good after-sales service reliable and efficient service given to clients.

b) Merchandising and adjusting of pricing policy

Merchandising The activity of promoting the sale of goods especially by their
presentation in retail outlets.

Pricing policy and discounts Sellers often adjust pricing policies to encourage
more sales through cash discounts and trade discounts.

c) Methods of retailing
1. Shops small retail outlets with a variety of goods
2. Department stores retail outlets that sell several product lines
3. Mail order use of mail to request purchases
4. E-commerce use of the internet to purchase items
5. Telemarketing use of the telephone to entice people to purchase items
usually via a toll-free number
6. Vending Machines a self-service machine that uses coins and notes
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Objective 8 Explain the various terms of sale

TERMS OF DEFINITION ADVANTAGES DISADVANTAGES
SALE
Cash Consists of banknotes - Instant payment - Unsafe to move
and coins. around in large
- Buyer able to obtain quantities
cash discount

Credit Payment for purchases is - For the seller, a - For the seller, no
made at a later date. method of moving immediate use of
stock cash

- Buyer enjoys the use - Buyer has to pay

of the goods and interest resulting in
services while still a higher cost
paying

Hire Purchase Short-term credit where - The purchaser has - Very expensive
the company hires the the use of the item form of credit
product to a purchaser
who pays an initial - Movement of stock - goods do not
payment followed by a for the seller become the
series of instalments. property of the
buyer until the last
payment is made

Layaway Purchasers agree to pay - Purchaser can pay - Goods remain with
for goods by instalments. for the goods in small the seller until all
The goods remain with increments payments are due
the seller until all the
payments are made.

Consignment Trading arrangement in - Movement of stock - Seller does not

which the seller sends for the seller have immediate use
goods to a buyer who of cash
pays the seller only as - Buyer only makes
and when the goods are payment after sales
sold.
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Cash & Trade A cash discount is an N/A N/A

discounts amount given to the
buyer for prompt
payment.

A trade discount is given

to merchants and
traders.

A trader can receive both

cash and trade discounts
but the consumer can
only receive a cash
discount
Fig 6.0 Table showing the various terms of sale

A trader or merchant is anyone who buys goods to resell. (e.g. a wholesaler who sells to
make a profit)
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Objective 9 List the functions of consumer organizations

What is consumerism?
Consumerism is defined as all activities relating to the rights and responsibilities of
consumers.

Most consumer organizations were formed to protect the rights of the consumer.
Functions of consumer organizations:
a) Private organizations (Not for profit)
Resisting unfair price increases
Voicing the concerns of the consumer
Resisting degradation of the environment

b) Government (Ministry of Consumer Affairs, Parliament, Judicial Arm)

Making laws relating to the environment, road safety and health of the
population.
Ensuring that laws to protect consumers are followed

c) Bureau of Standards (Quality control organizations)

Setting minimum standards for producers
Verification and testing of products
Educating the public about unsuitable items on the market

d) Ombudsman (A government-appointed person)

Investigates complaints of loss and damages from the public
Make recommendations to correct wrongdoing of state agencies

Responsibilities of consumer organizations:

1. To protect the rights of the customer.
2. Seek information about the goods and services that customers wish to purchase.
3. Inform the public about unfair business practices. These practices involve unfair
pricing, unsafe products, misleading advertisements and unhealthy business
practices.
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Objective 10 Outline the role of customer service

The role of customer service:
Ensuring conformity and compliance to customer requirements
Adherence to copyrights
Effective communication
Coordinating flow of goods, services and information

Objective 11 Describe forms of customer service

Forms of customer service:
1. Warranty promising to repair or place an item, if necessary, within a stipulated
time.

2. After-sales service all the help and information a company provides to its
customers after they have bought a particular product.

3. Feedback
of a task that is used as a basis for improvement.

4. Online chat having conversations with customer representatives concerning a

product(s) to gain knowledge about the product(s) or give feedback.
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Objective 12 Explain the concept of intellectual property rights

What is intellectual property?
Intellectual property covers any creation of the mind.

Examples of intellectual property are songs, books, designs and other

inventions.
The laws of different countries protect intellectual property through copyrights
and patents as well as trademarks (a distinctive word or image).

Let's look at some terminology:

1. Trademark is a recognizable sign, design or expression which identifies
products or services of a particular source from those of others.

2. Copyright this is an inclusive right to reproduce and sell musical, literacy and
artistic work. This is granted by the property rights agency and is valid for a
specified period.

3. Patent this is the right granted to the inventor of a process, the machine,
technique or formula. A business that wishes to use the invention must seek
permission from the inventor which is in the form of a special licence.

4. Industrial design production of design applied to products that are to be

manufactured through techniques of mass production.