SS1 MARKETING LESSON NOTES - SECOND TERM

Scheme of Work

SN WEEK TOPICS

1 WEEK 1 MARKETING MIX II

2 WEEK 2 WHAT MARKETS DO

3 WEEK 3 TYPES OF MARKETS

4 WEEK 4 TYPES OF MARKETS II

5 WEEK 5 CONSUMER BEHAVIOR AND ORGANIZATIONAL

BEHAVIOR

6 WEEK 6 CONSUMER BEHAVIOR AND ORGANIZATIONAL

BEHAVIOR II

7 WEEK 7 ORGANIZATIONAL BEHAVIOR

8 WEEK 8 ORGANIZATIONAL BUYING BEHAVIOR

9 WEEK 9 MARKET PLANNING PROCESS

10 WEEK 10 MARKETING RESEARCH

 WEEK 1 MARKETING MIX II

MARKETING ENVIRONMENT
The marketing environment is a term that is used to collectively identify all the elements that
have some impact on the actual performance of a market. This includes events and factors
that occur within the context of the market itself and also any elements that are based
outside the market.

The idea behind defining the market environment is to understand what forces are exerting
some amount of influence in the marketplace and understand why and how a market reacts
to those forces in certain ways.

The environments in which you will have to market your new product are a major factor in
determining your strategy. In a real-life marketing (plan you would spend a solid amount of
time researching these environments.

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The marketing environment is everything an organization must take into consideration when
developing and presenting a new product.

FACTORS AFFECTING MARKETING ENVIRONMENT

The marketing environment is made up of factors and forces that influence marketing.
These forces can be internal like departments (other than marketing such as the finance
department and human resource department) or external like competitors, suppliers, and
economic or political situations.

To understand them better, marketing personnel divide them into two categories:
macro-environment and macro-environment.

1. Micro-Environment: The micro-environment refers to the forces or factors that are close
to the company and affect its ability to serve its customers. These factors are:

i. Political factors: These are laws, procedures, practices and policies formulated by the
government to regulate and facilitate business activities. It also involves the stability or
instability of the government.

ii. Cultural factors: These are ways of life of the people such as language, aesthetics and
their perception. A marketer should learn to adjust to the culture of the people for him to
operate successfully.

iii. Technological factors: These are changes or advancements in process equipment and
devices that are used to accomplish the tasks of the marketing or an organization.

iv. Economic factors: These consist of inflation, national income and the economic system
of a country. It also includes changes in the business cycle. A marketer should be able to
adjust to such changes to operate successfully.

v. Social factors: These are values and norms of the society, interest groups, reference
groups and social class. These factors influence the buying decisions of consumers.

vi. Suppliers: The suppliers to a firm can also alter its competitive position and www
marketing capabilities. These are raw material suppliers, energy suppliers, and suppliers of
labour and capital. The bargaining power of the supplier gets maximized in the following
situations:

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a) The seller firm is a monopoly or an oligopoly firm.

b) The supplier is not obliged to contend with other substitute products for sale to the buyer
group.

c)The buyer is not an important customer.

d) The buyer is not an important customer

e) The supplier poses a real threat of forward integration.

vi. Market intermediaries: Every producer has to have several intermediaries for promoting,
selling and distributing the goods and serving ultimate consumers. These intermediaries
may be individual or business firms. These intermediaries are the middlemen (wholesalers,
retailers, agents, etc.), distributing agencies, market service agencies and financial
institutions.

vii. Customers: The customers may be classified as:

a. Ultimate customers: These customers may be individuals and householders.

b. Industrial customers: These customers are organizations which buy goods and services
for producing other goods and services to fulfil other objectives.

c. Resellers: They are the intermediaries who purchase goods to resell them at a profit. They
can be wholesalers, retailers, distributors, etc.

d. Government and other non-profit customers: These customers purchase goods and
services and make them available to those for whom they are produced, for their
consumption in most cases.

e. International customers: These customers are individuals and organizations of other

countries who buy goods and services either for consumption or for industrial use. Such
buyers may be consumers, producers, resellers and governments.

f. Competitors: Competitors are those who sell the goods and services of the same and
similar description in the same market. Apart from competition on price, there is likely to be
product differentiation. Therefore, it is necessary to build an efficient system of marketing.
This will bring confidence and better results.

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g. Public: The company must satisfy the people at large along with its competitors and the
consumers. It is necessary for future growth. The actions of the company do influence the
other groups forming the general public for the company. A public is defined as 'any group
that has an actual or potential interest in or impact on a company's ability to achieve its
objective. Public relations are certainly a broad marketing operation which must be fully
taken care of.

2. Macro-Environment: The macro marketing environment takes into account all factors that
can influence an organization, but are outside of their control. These are: political,
economic, socio-cultural and technological.

i. The political environment: These are laws, procedures, practices and policies formulated
by the government to regulate and facilitate business activities. It also involves the stability
or instability of the government.

These include all laws, government agencies and lobbying groups that influence or restrict
individuals or organizations. Marketers need to be aware of these restrictions as they can
be complex.

Some products are regulated by both state and federal laws. There are even restrictions for
some products as to who the target market may be. For example, cigarettes should not be
marketed to younger children. There are also many restrictions on subliminal messages and
monopolies. As laws and regulations change often, this is a very important aspect for a
marketer to monitor.

ii. The economic environment: These consist of inflation, national income and the economic
system of a country. It also includes changes in the business cycle. A marketer should be
able to adjust to such changes to operate successfully.

It consists of all factors such as salary levels, credit trends and pricing patterns that affect
consumers' spending habits and purchasing power. This refers to the purchasing power of
potential customers and how people spend their money. The four stages of the economic
cycle through prosperity, recession, depression and recovery.

Consumers spend more during the prosperity stage than in the depression stage, which is
when the lowest amount of consumer spending takes place. Your marketing campaign,

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product offerings and pricing must be taken into account for the current economic cycle to
be successful.

iii. The social environment: These are values and norms of the society, interest groups,
reference groups and social class. These factors influence the buying C decisions of
consumers, including institutions and other forces that affect the basic values, behaviours,
and preferences of society- all of which affect consumer marketing decisions.

iv. The technological environment: These are changes or advancements in processes,

equipment and devices that are used to accomplish the tasks of the marketer or an
organization. It is perhaps one of the fastest-changing factors in the macro environment.
This includes all developments from antibiotics and surgery to nuclear missiles and
chemical weapons to automobiles and credit cards.

As these markets develop it can create new markets and new uses for products. It also
requires a company to stay ahead of others and update its technology as it becomes
outdated. They must be informed of trends so they can be part of the upcoming events
rather than becoming outdated and suffering the consequences financially.

v. Cultural factors: These are ways of life of the people such as language, aesthetics and
their perception. A marketer should learn to adjust to the culture of the people for him or her
to operate successfully.

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 WEEK 2 WHAT MARKETS DO
Marketing activities also include behind-the-scenes tasks, like market research and
planning. These marketing activities include all the various ways that companies,
government entities, non-profit organizations and cities communicate the intended
message.

Marketing activities are the actions that ultimately sell every product and service, as well as
every organizational agenda.
The following are the actions taken by the organization before marketing:
1. Mobilization Of Workforce: Mobilization is "the process of forming crowds, groups,
associations, and organizations for the pursuit of collective goals". Organizations do not
"spontaneously emerge" but require the mobilization of the workforce.

For effective marketing activities, the workforce needs to be mobilized. Successful

companies can mobilize the right people to achieve the organization's goal.

2. Production of Quality Goods and Services: Production of quality goods and services is
another action taken by organizations before the marketing process.

Since customers are primarily interested in product quality and they know the quality and
feature differences of competing brands, the organization needs to produce goods and
services that will meet the needs of their customers. Customers make their choice from
many brands available based on getting the best quality for their money.

3. Managing Distribution Network: Sales and distribution is an integral part of any industry.
Distribution, also known as placement, is one of the classic "four Ps" of marketing (product,
promotion, price, distribution). Distribution channels play a key role in your entire marketing
strategy

As marketers realign their operations to adjust to a lower level of demand, they will face
several difficult choices. Decisions taken today will have a major impact on customers and
channel partners both in the near term and in the long term. Marketers must get these

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decisions right and can execute them cost-effectively while avoiding lapses in customer
service.

Maximizing the potential of distribution channels and marketing programs in today's

economic environment involves taking these actions:
i. Identify the best partners: The first step involves taking a hard look at the current channel
design. Companies need to understand their most profitable and highest potential customer
segments and how well those segments align with existing channels. This understanding
requires a clear perspective of how units, revenue and profitability flow across sales
channels, products and regions.

In evaluating channel partners, first, determine how well each partner aligns with the
company's value proposition and the most profitable customer segments. Secondly, given
the current environment, also pay particular attention to a potential partner's financial
strength and strategic position. All else equal, companies will want to place their bets with
channel partners that will be around for the long term.

ii. Get the most out of your marketing: The second step consists of a review of marketing
programs in the context of key target segments. Determine which specific demand
generation programs and promotions (e.g. direct mail, trade advertising, broadcast
advertising, incentives) have worked better than others at generating and converting
qualified customer leads.

Evaluate the performance of various marketing programmes in different regions, segments

and markets and how well sales results have correlated with those efforts. Based on a
careful review of what has worked best, opportunities will emerge to rationalize some of the
marketing programmes.

iii. Manage the transition: Once channel design and resource allocation have been
addressed, implementation needs to be carefully planned. In many cases, local market
variations will require significant adjustments to the overall direction. Some channel partners
are likely to require more support than others as they take on new customers with
potentially different service requirements.

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Throughout any transition, communicating closely with target partners is essential to
manage channel conflict and minimize negative customer impact.

iv. Advertisement and promotion: The four Ps of marketing are product, price, place and
promotion. All four of these elements combine to make a successful marketing strategy.
Promotion looks to communicate the company's message to the consumer.

One of the benefits of advertising is that it allows you to communicate a message to a large
audience at one time, reducing the cost per contact.

You may have the finest product and the most attractive prices, but if potential customers
don't know about your business, your chances of success are limited. Advertising and
promotion refer to activities undertaken to increase sales or enhance the image of a product
or business.

Advertising is used primarily to inform the potential customer of the following:

a) The availability of products or services;
b) When they are in season;
c) Where you are located and;
d) Anything special about your product.

Promotional activities are important for maintaining customers' traffic throughout the market
season used early in the season to draw customers to your business and during the season
to maintain customers' traffic levels during slow periods. Deciding on a marketing
communications strategy is one of the primary roles of the marketing manager and this
process involves some key decisions about who the customer is, how to contact them, and
what the message should be.

ASSIGNMENT
1. Explain the following actions before marketing:
i. Mobilization of workforce
ii. Production of quality goods and services
iii. Managing distribution networks.
2. List and explain the four elements of the marketing mix.
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 WEEKS 3 & 4 TYPES OF MARKETS
A market can be defined as a collection of current and future individuals or organizations
who buy or sell products. It is simply a combination of buyers and sellers. These two groups
can meet in a physical place (e.g. a shop) or can meet across miles, aided by
telecommunications (increasingly, the Internet).

They meet to buy and sell goods or services. The term "market" is a shorthand for "any
place or situation where two or e more people meet to exchange goods or services".

A set-up where two or more parties engage in exchange of goods, services and information
is called a market. The two parties involved in a transaction are called seller and buyer.

The seller sells goods and services to the buyer in exchange for money. There has to be
more than one buyer and seller for the market to be competitive. If you are in business
selling a good or a service, you need to know about the market you are selling in - is it a
busy one with lots of competitors, (other businesses trying to sell the same product), or are
there very few competitors?

The type of market you operate in will have a big influence on your product's success.

TYPES OF MARKETS
1. Consumer Market: An individual who buys products or services for personal use and not
for manufacture or resale is a consumer. A consumer is someone who can decide whether
or not to purchase an item at the store, and someone who can be influenced by marketing
and advertisements. Any time someone goes to a store and purchases a toy, shirt,
beverage, or anything else, he or she is making that decision as a consumer.

The consumer market represents individuals and families purchasing goods and services
for personal consumption.

2. Government Market: This market consists of local, state and federal governments that
purchase goods and services to support their internal operations and to provide essential
services for citizens.

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3. Reseller Market: This is a market that consists of distributions, dealers, wholesalers and
retailers who buy raw materials and finished goods to sell the product at a profit.

4. Industrial Market: This is a market that consists of individuals or organizations that buy
products for direct use in manufacturing other products for or for use in the daily operations
of the

Characteristics Of the Consumer Market

The consumer market is for buyers who purchase goods and services for consumption
rather than resale. However, not all consumers are alike in their tastes, preferences and
buying habits. Different characteristics can distinguish certain consumers from others.

These particular consumer characteristics include various demographic, psychographic,

and geographic traits. Marketers usually define these consumer characteristics through
market segmentation, the process of separating and identifying key customer groups.
These are:
i. Demographic characteristics: Characteristics of the consumer market: based on
demographics include differences in gender, age, ethnic background, income, occupation,
education, household size, religion generation, nationality and even social class. Most of
these demographic categories are further defined by a certain range. For example,
companies may identify the age of their consumers in the 18 to 24, 25 to 34, 35 to 54, 55 to
65, and 65 age groups.

Companies can then target their advertising towards these demographic groups. For
example, a new cell phone may be targeted towards 18 to 24-year-olds with incomes
between 325,000 and 350,000.

ii. Psychographic characteristics: Consumer markets can also be psychographic.

Psychographic characteristics of consumers include interests, activities, opinions, values
and attitudes. Many magazines are geared towards a consumer's interest.

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For example, prenatal magazines target expectant mothers who are interested in learning
more about caring for a baby. Additionally, consumer activities can include participation in
martial arts or bob basket weaving.

Opinions and attitudes can be both specific and general. A company may better understand
consumer opinions and attitudes after conducting a focus group and can use that
information to tailor advertising or marketing campaigns.

Consumer values can pertain to how a group of individuals feels about certain social issues,
which can be of interest to non-profit or charitable organizations.

iii. Behaviouristic characteristics: These include products according to -year usage rates,
brand loyalty, user status or how long they have been a customer, and even benefits that
consumers seek. Companies like to know how often their consumers visit their stores or use
their products.

Company marketing departments usually try to distinguish between heavy, medium and
light users, whom they can then target Vine with advertising. Marketers like to know which
customers are brand loyalists, i.e. those consumers usually only buy the company's brand.

iv. Geographic characteristics: Consumer markets also have different geographic

characteristics.

These geographic characteristics are often based on market size, region, population density
and even climate. A small retailer may find opportunities in a small market in which larger
competitors have no interest.

Companies that sell beachwear will likely sell more products in warmer climates. Consumers
in different regions of the country also have different tastes in food and style.

ORGANIZATIONAL MARKET
These are individuals and companies who purchase goods and services for some use other
than personal consumption.

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The organizational buying process is entirely different from the consumer buying process.
While buying decisions are made relatively easily and quickly by individual customers,
organizational buying involves thorough and deep analysis. Organizations purchase
products ranging from highly complex machinery to small components.

In an organization, the purchase decisions are influenced by several individuals and are not
made in isolation by an individual. Organizational buyers are more concerned about the
price and quality of the product along with the service being provided by the vendor. Price
plays a major role since the price of the raw materials is the investment from which profits
are generated. Thus, price is a major factor which affects the profitability of the firm.
Service also plays an important role, because no organization would like to buy goods from
a vendor who cannot provide timely and efficient service.

Organizations adopt certain methods for buying products such as checking a sample before
the actual purchase. Most organizational purchases involve the purchase of products in
large lots. So, it is not feasible to individually inspect every item in the lot. In such situations,
a sample is checked assuming that this sample represents the entire lot. Like the consumer
markets, organizational markets also possess certain demand characteristics. The
organizational demand for products or services may be inelastic, derived, joint or fluctuating
in nature. Organizational markets normally purchase the goods or services for producing
other goods and services, using these as raw materials. There are also resellers, who
purchase the products to sell directly to other customers without any modifications. Apart
from producers, and resellers, there are also government and institutional customers who
buy the goods The government buys goods for public utility for use in their departments or
for production purposes.

TYPES OF ORGANIZATIONAL MARKETS

i. Industrial Or Producer Market: This is a market that consists of individual organizations
that buy products for direct use in manufacturing other products for resale or use in the
daily business. These are businesses that make or create goods or services.
Producers buy raw materials and machinery, often from other producers but sometimes
from resellers. Marketing to producers requires technical expertise and a knowledge of the
producer's operations. Typical marketing strategies involve identifying problems in the
producer's industry or particular operations and proposing cost-effective solutions.
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Producers have a long-term view of markets since their needs change slowly. As a result,
marketing to producers is usually based on long-term relationships.

ii. Reseller: This is a market that consists of distributors, dealers, wholesalers and retailers
who buy raw materials and finished goods to sell the product at a profit. Resellers buy
finished goods and resell them to the next level in a given distribution channel.

Resellers do not normally transform the products that they sell. The product usually is
re-sold without any modifications to the next channel member. However, there may be some
value added by resellers. Occasionally, resellers will bundle products from multiple
manufacturers together. For example, a computer reseller may bundle together computer
hardware and software and then offer the total package at a discounted price to the
consumer.

The key factor for marketing to resellers is to be aware of their added-value proposition. If
the reseller is a wholesale company offering low prices for high volume, marketers must
develop proposals which address this characteristic. If the company buys specialized
equipment according to specifications and re-sells it to customers based on high quality
and reliability, the marketing will be different.

iii. Government Market: This market consists of local, state and federal governments that
purchase goods and services to support their internal operations and to provide essential
services for citizens. The government market consists of government units at the federal,
state and local levels. Agencies at all levels purchase goods and services used in
performing critical government functions. Governments are huge customers of all kinds of
products.
ASSIGNMENT
1. What is a market in marketing?
2. Explain the following: (i) government market (ii) reseller market (iii) industrial market
WASSCE June 2017.

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 WEEKS 5 - 7 CONSUMER AND ORGANIZATIONAL BEHAVIOR
MEANING OF CONSUMER BEHAVIOR
Consumer behaviour is the study of individuals, groups, or organizations and the processes
they use to select, secure, use and dispose of products, services, experiences or ideas to
satisfy needs and the impacts that these processes have on the consumer and society.

Customer behaviour study is based on consumer buying behaviour, with the customer
playing the three distinct roles of user, payer and buyer.

The study of consumers helps firms and organizations improve their marketing strategies by
understanding issues such as how:

1. The psychology of how consumers think, feel, reason and select between different
alternatives (e.g. brands, products and retailers);

2. The psychology of how the consumer is influenced by his or her environment (e.g.
culture, family, signs, media);

3. The behaviour of consumers while shopping or making other marketing decisions;

4. Limitations in consumer knowledge or information processing abilities influence decisions

and marketing outcomes;

5. How consumer motivation and decision strategies differ between products that differ in
their level of importance a interest that they entail for the consumer and

6. How marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.

Consumer behaviour holds great importance in the marketing field because it is said that in
the modern philosophy of marketing C, CUSTOMER is treated as the KING.

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FACTORS INFLUENCING CONSUMER BEHAVIOR

1. Cultural Factors: Culture is defined as the patterns of behaviour and social relations that
characterize a society and separate it from others. Culture conveys values, ideals and
attitudes that help individuals communicate with each other and evaluate situations. Cultural
factors comprise a set of values and ideologies of a particular community or group of
individuals.

It is the culture of an individual that decides the way he/she behaves. In simpler words,
culture is nothing but the values of an individual. What an individual learns from his/her
parents and relatives as a child becomes his/her culture.

2. Social Factors: A consumer's behaviour is also influenced by social factors such as (a)
Groups (b) Family (c) Roles and status.

(a) Groups: Two or more people who interact to accomplish individual or mutual goals. A
person's behaviour is influenced by many small groups. Groups that have a direct influence
and to which a person belongs are called membership groups.

Some of the primary groups are family, friends, neighbours and coworkers. Some of the
secondary groups, which are more formal and have less regular interaction, include
organizations like religious groups, professional associations and trade unions.

(b) Family: Family members can strongly influence buyer behaviour. The family is the most
important consumer buying organization in society and it has been researched extensively.
Marketers are interested in the roles and influence of the husband, wife and children on the
purchase of different products and services.

3. Personal Factors: Consumer behaviour deals with why and why not an individual
purchases particular products and quins services.

Personal factors play an important role in affecting consumers' buying behaviour.

4. Psychological Factors: Includes:

(a) Motivation: Motive (drive), a need that is sufficiently pressing to direct the person to
seek satisfaction of the need.

(b) Perception: The process by which people select, organize and interpret old information
to form.
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(c) Learning: Changes in an individual's behaviour arising from experience.

(d) Beliefs and Attitudes: Belief is a descriptive thought that a person holds faith about
something.

Attitude is a person's consistently favourable or unfavourable evaluations, feelings and

tendencies towards an object or idea.

STAGES OF THE CONSUMER BUYING PROCESS

There are six stages to the consumer buying decision process. Actual purchasing is only
one stage of the process. Not all decision processes lead to a purchase. All consumer
decisions do not always include all the stages, determined by the degree of complexity.
These stages are:

1. Problem Recognition: This is the stage at which a consumer identifies that he/she has a
need or want for a product. A purchase cannot take place without the recognition of a felt
need.

The need may have been necessitated by internal stimuli such as hunger, and thirst or
external stimuli such as advertising or word of mouth. This can also be called awareness of
need. Need is the most important factor which leads to the buying of products and services.

For example, an individual who buys a cold drink or a bottle of minerals identifies his/her
need as thirst. The marketer must recognise the needs of the consumer as well as how
these needs can be satisfied.

2. Information Search: This is the buyer's effort to search through the business environment
to identify and evaluate sources related to the central buying decision.

In this stage, the consumer searches for information about the product either from family,
friends, the neighbourhood, advertisements, wholesalers, retailers, dealers, or by examining
or using the product. A successful information search leaves a buyer with possible
alternatives.

3. Evaluation of Alternatives: At this stage, the consumer undertakes a comprehensive

assessment of available brands that satisfy his/her needs or wants.

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This is where consumers start cutting down the possible options by comparing them with
their criteria and what they want from the product/service. They evaluate the various
alternatives available in the market.

An individual, after gathering relevant information, tries to choose the best option available
as per his needs, taste and pocket.

4. Purchase Decision: At this stage, the buyer makes the actual purchase of the right
product that he/she feels would satisfy his/her needs. The purchase of a product or service
is the fourth step in the consumer buying process.

At this point, the consumer has considered all of the factors relating to the product and has
shopped around for the best deal or option. Customers have typically made up their minds
about what they want to spend and where to spend it.

5. Post-Purchasee Behaviour: After purchasing the product, the consumer by ors will
experience some level of satisfaction or dissatisfaction. This is a stage at which the
consumer determines whether or not a repeat purchase would take place at a future date or
not.

The last phase of the buying process is an evaluation process during which consumers
determine if their purchase was the right one. This may or may not be a conscious thought
process.

For many advertisers, the goal is to elicit positive results with a product or service, in the
hope that customers will review or talk positively to others about the product or service they
have used.

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 WEEK 8 ORGANIZATIONAL BUYING BEHAVIOR

Organization buying is the decision-making process by which formal organizations establish

the need for purchased products and services and identify, evaluate and choose among
alternative brands and suppliers.

Some of the characteristics of organizational buyers are:

1. The consumer market is a huge market of millions of consumers where organizational
buyers are limited in number for most of the products.

2. The purchases are in large quantities.

3. Close relationships and service are required.

4. Demand is derived from the production and sales of buyers.

5. Demand fluctuations are high as purchases from business buyers magnify fluctuation in
demand for their products.

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6. The organizational buyers are trained professionals in purchasing.

7. Several persons in organizations influence purchase.

8. A lot of buying occurs in direct dealing with the manufacturer.

FACTORS THAT INFLUENCE ORGANIZATIONAL BUYING BEHAVIOR

Organizational buying is much more complex than consumer buying and thus deserves to
be studied separately. The entwined interpersonal relationships and the multiple
communication processes between the organizational members involved in the buying
decision process are some of the major contributors to this complexity. The list of affecting
factors is not limited to these; there are many more important ones such as:
1. EXTERNAL ENVIRONMENTAL FACTOR As a major constraint under which a business
operates, the external environment impacts nearly every aspect of a business, including its
buying decisions. Here is a list of the external elements that affect organizational buying.
(a) Economic conditions: The fluctuations in the money markets and the interest rates have
a major impact on the buying strategies. The interest rates and organizational buying have
an inverse relation; in most cases, an increase in the interest rates may bring about a drop in
buying.

b) Regulatory changes: Any changes in the corporate laws, rules and regulations will also
influence how, when and what the organizations buy. There are also regulatory changes
that may affect only a particular industry and accordingly, the related organizations will
change their buying patterns to stay in line with the new regulations.

(c) Political environment: A change of the government or policy has a direct impact on the
economic scenario, and this ultimately translates into a shift in the organizational buying
patterns as well.

(d) Social environment: Societies and cultures are ever-evolving, and every business has to
change its practices and procedures to meet up with societal changes. For instance, with
the rise in the number of animal lovers, pure leather suppliers have seen a slump in their
business. The clothing and footwear manufacturers have shifted to artificial leather

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suppliers. This points out how the social environment can affect the buying patterns of
organizations.

(e) Competition: Today's business is all about beating competition and staying ahead. So,
when an organization's competitors move on to a newer product or service, or if they get to
enjoy a competitive edge because of their suppliers, it is very likely for the organization to
change its trend and thus, its buying pattern will change accordingly.

2. INTERNAL ORGANIZATIONAL FACTORS

More than the external factors, it is the internal organizational factors that influence the
Organizational buying. These internal factors are:
a) Organisation's goal and objectives: The goals and objectives of an organization are major
determinants of how and what the organization will purchase. An organization that wants to
capture a bigger chunk of the market by selling cheaper stuff is more likely to look for
suppliers who can supply larger quantities at a low price.

However, a company whose goal is to deliver quality products may have a very contrasting
buying pattern, and they will focus more on the quality issues than on the price advantage.

b) Organizational structure: Hierarchical and management structures vary from one

organization to another. While some organizations have a well-established purchase
department, others may assign this job to the HR or Administration department. There are
also organizations where the purchase decisions must be taken collectively by all
concerned departments.

Organizations also have well-defined guidelines as to which purchase decisions can be

made and by which management level. The internal set-up and how authority and
responsibility flow through it, play an important role in organizational purchasing.

c) Policies and procedures: How the purchase order is routed depends on the organization's
policies. How the buying procedure begins, who will participate and who has the ultimate
authority to decide on the purchase are all dependent on the policies and procedures of the
organization.

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Some organizations prefer to invite public bids, while others may contact only a few
suppliers on their list. There are also budgetary policies that have a say in the purchase
decisions. For instance, while some organizations may have a flexible policy to make
purchases as and when the need arises, others may have to wait till the allocation of the
annual or biennial budget.

d) Technological levels: Whenever new purchases are made, organizations take into
consideration their current technology. Some purchases are meant to replace the current
technology with a newer version, so their buying decision will be influenced by what level of
technology they currently own. Also, organizations try to ensure that all new purchases
being made are technologically compatible with their existing technology. So, one way or
the other, an organization's existing technology has a major influence on its future
purchases.

e) Manpower skills: Whether the organization has the skilled manpower to make proper and
optimum use of the new purchases being made, especially equipment and machinery, is
another issue that influences organizational buying.

INTERPERSONAL AND INDIVIDUAL FACTORS

Since organizational buying decisions are never a one-person affair, interpersonal
relationships with the decision-makers play a vital role in the type of buying.
a) Participation And Authority: In organizational buying situations, there are always
re-defined rules as to who can participate in the purchase decision and who is the ultimate
deciding authority.

b) Interpersonal Conflict: Interpersonal conflicts and conflicts of interest among the

decision-makers often result in delays and changes. Thus, the kind of thinking and the kind
of relationship the decision-makers share have a major role to play in corporate buying.

c) Education And Awareness: The educational background of the decision makers and their
level of awareness have a major bearing on what type of purchases they will make.

d) Risk-Taking Ability: If the buying committee constitutes high-risk takers, they will not be
averse to the idea of choosing the latest technology or new suppliers. On the other hand,
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decision-makers with low risk-taking tolerance are more likely to stick to proven and tested
technology or to well-known and well-established suppliers.

e) Individual Factors: Individual factors such as age, cultural background and social status
of the members of the buying team, also influence the buying decisions.

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 WEEK 9 MARKETING PLANNING PROCESS

A marketing plan outlines the specific actions you intend to carry out to impress potential
customers and clients of your products and/or services and persuade them to buy the
products and/or services you offer. A marketing plan may be developed as a stand-alone
document or as part of a business plan. Either way, the marketing plan is a blueprint for
communicating the value of your products and/or services to your customers.

An effective marketing plan defines how and why the company is in business, what markets
are good targets for its products, and how customers should be persuaded. With a
marketing plan in place, a company uses the plan to measure how effectively corporate
goals have been met.

It is important to carry out research before completing your marketing plan. By doing so, it
will help you to be organized, so that you will be able to achieve your goals. A thorough
marketing plan will provide details on what you want to accomplish with your marketing
strategy and it will assist you in achieving your goals.

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A marketing plan will achieve the following objectives:
1. It will enable companies to look internally to fully understand the impact and the results of
past marketing decisions.

2. It equips companies to look externally to fully understand their target markets and the
competition available in those markets.

3. Set future goals and provide direction for marketing initiatives. The goals should be
understood and supported by everyone within the company.

4. It focuses on issues related to the four Ps: product, price, promotion and place.

Addressing these issues and putting them into written form can be useful for business
owners, in that it forces them to analyze their business. It can be good for employees, as the
marketing plan can provide them with essential orientation and be a source of motivation.

Creating a solid marketing plan can be the difference between a successful marketing
campaign and a failed one. As most people have already experienced, marketing can be an
expensive and complicated endeavour. A marketing plan will help you determine your
marketing strategy by specifying your objectives, defining your goals, and targeting your
market in an effective, timely and cost-efficient manner.

In today's economy, it is crucial to get most of your money back after investment. A
marketing plan will define what works for you and what does not, who you should target and
who you should not, where you should allocate funds and resources, and where you should
not, etc. But before you develop your marketing plan, you should state your Marketing Plan
Objective.

Your Marketing Plan Objective is simply a statement defining the purpose of your marketing
campaign.

Quick Tip: Your Marketing Plan Objective should be realistic, measurable and time-specific.

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KEY ELEMENTS IN MARKETING PLANNING
1. Situation Analysis: This introductory section contains an overview of your situation as it
exists today and provides a useful benchmark to refine your plan in the coming months.
Begin with a short description of your current product or service offering, the marketing
advantages and challenges you face, and a look at the threats posed by your competitors.

Describe any outside forces that will affect your ness in the coming year. This can then be
anything from diminished traffic levels to a retailer, due to construction. If you have a
change in law that could affect a new product introduction if you are an inventor, for
example.

2. Target Audience: All that is needed here is a simple, bulleted description of your target
audience. If you are marketing to consumers, write a target-audience profile based on
demographics, including age, gender and any other important characteristics. Marketers
should list their target audience by category (such as lawyers, doctors, and shopping malls)
and include any qualifying criteria for each.

3. Goals: In one page or less, list your company's marketing goals. The key is to make your
goals realistic and measurable so that you can easily evaluate your performance. "Increase
sales of peripherals" is an example of an ineffective goal.

You should be in a better position to gauge your marketing sales of peripherals 10 per cent
in the first quarter, 15 per cent in the second quarter, 15 per cent in the third quarter and 10
per cent in the fourth quarter."

4. Strategies And Tactics: This section will make up the bulk of your plan, and you should
take as much space as you need to give an overview of your marketing strategies and list
each of the corresponding tactics you will employ to execute them.

Here is an example: A marketing client of mine markets videotape and equipment. One of
her goals is to increase sales to large ministries in three states by 20 per cent. Together we
have developed a strategy that includes making a special offer each month to this prospect
group, and one size or one of her tactics is to use monthly emails to market to an in-house
list.
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Your tactics section should include all the actionable steps you plan to take for advertising,
public relations, direct mail, trade shows and special promotions. You can use a paper
calendar to schedule your tactics or use a contact manager or spreadsheet program. What
matters most is that you stick to 5. b your schedule and follow through. A plan art on paper
is only useful if it is put into action.

5. Budget Breakdown: The final section of your plan includes a brief breakdown of the costs
associated with each of your tactics. So, if you plan to exhibit at three trade shows per year,
for example, you will include the costs to participate in the shows and prepare your booth
and marketing materials. If you find out that the tactics you have selected are too costly, you
can go back and make revisions before you arrive at a final budget.

STAGES IN MARKETING PLANNING

1. Develop Marketing Objectives: Under this stage, marketing objectives are stated as
specific, measurable, attainable, all realistic and with a clear time frame. It is then
communicated down the line.

2. Develop The Marketing Strategies: IMarketing strategies are broad actions to be taken to
achieve marketing objectives.

3. Develop The Marketing Tactics: Marketing tactics are specific actions to be taken by
specific persons at stipulated times.

4. Determine Budget: The budget is the financial implication of implementing the marketing
strategies.

5. Implementation: This involves the ac virtual execution of the marketing object additives
and strategies.

6. Evaluation And Control: This is concerned with comparing performance with standard
performance and determining deviations for control purposes.

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IMPORTANCE OF MARKETING PLANS
1. It provides direction for all your marketing efforts.
2. It helps define specific tasks.
3. It helps to identify prerequisites to planned activities.
4. If more than one person is involved, it helps you to define areas of responsibility.
5. It can give you insight into new markets that may have previously been overlooked.
6. It enables you to create clear guidelines for evaluating the effectiveness of different
marketing methods.
7. It can help raise finance for capital expenditure.
8. It prevents time wasting on ineffectual marketing activities.

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 WEEK 10 MARKETING RESEARCH

Managers need the information to introduce products and services that create value in the
minds of the customers. However the perception of value is a subjective one, and what
customers value this year may be quite different from what they will value next year. As
such, the attributes that create value cannot simply be deduced from common knowledge;
rather, data must be collected and analyzed. The goal of marketing research is to provide
the facts and direction that managers need to make their more important marketing
decisions.

Marketing research is therefore the systematic gathering, recording and analyzing of data
problems relating to the marketing of goods and services.

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RESEARCH VS. MARKET RESEARCH
These terms are often used interchangeably, but technically, there is a difference.

Market research deals specifically with gathering information about a market's size and
trends. Marketing research, on the other hand, covers a wider range of activities. While it
may involve market research, marketing research is a more general systematic process that
can be applied to a variety of marketing problems.

Marketing research comprises:

1. Market Research: Identification of a specific market and measurement of its size and
other characteristics.

2. Product Research: Identification of need or want and the characteristics of the good or
service that will satisfy it.

3. Consumer Research: Identification of the preferences, motivations, and buying behaviour

of the targeted customers. Information for marketing research is collected from direct
observation of the consumers (such as in retail stores), mail surveys, telephone or
face-to-face interviews, and published sources (such as demographics).

REASONS FOR MARKETING RESEARCH

There are so many reasons for carrying out marketing research. These are:
1. Introduction Of New Product Or Service: Any new business, or introduction of a new
product or service that the company is thinking of offering, needs marketing research.
Developing a good understanding of the product and developing a good business plan
based on marketing research helps provide a solid foundation for your offering.

2. Customer Development: Next to understanding the product or service you are offering,
understanding the customer who will be buying it is paramount. In a consumer-based
business, understanding the demographics and psychographics of a target market can be
determined by looking at previous purchase behaviour or through a needs analysis.

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In a business which sells to other businesses, understanding their needs can be a little more
difficult. However, this can be understood by doing surveys of focus groups.

3. Competition Analysis: You need to understand your competitors. For most small
businesses, getting a general idea of your competitors is usually sufficient. However, the
larger the companies, larger market potentials, or more costly the product, the more
detailed the analysis needs to be done.

4. Marketing/advertising Development: Doing "marketing" research to make sure that the

look and feel of marketing is in order. Messaging is also another good reason for doing
market research. By reviewing with your buyers how, for example, a product O package or a
logo looks, you can make sure the visual image of your offering is attractive and that your
customers are getting the right messaging.

5. Customer Satisfaction: After your customers have purchased your product or service,
following up with them to understand their satisfaction with that purchase is necessary.

Understanding why they liked or disliked your offering and the reasons the customers
purchased your product or service over that of your competitors can provide a basis for
what could be your competitive advantage.

USES OF FEEDBACK IN MARKETING RESEARCH

1. It can be used to change product features.
2. Packaging can be improved from the feedback obtained.
3. Price level can be reduced or increased.
4. Advertising can be intensified.
5. Sales promotion can be introduced.
6. The product can be repositioned.
7. Channels of distribution can be changed.
8. Some channel members can be dropped.
9. Salesmen can be motivated to perform more.
10. A company can extend its marketing activities to international markets.

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