basic Entrepreneurship Chapter 5 powerpoint.pdf

basic entrepreurship

1. 5/15/2024Department of Management, AAU
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CHAPTER FIVE
MARKETING

2. LEARNING OBJECTIVES
1.Define marketing
2.Identify Marketing mix and strategies
3.Analyze components of marketing information system
4.Explain competitive environment
5.Describe customer service and selling process

3. MARKET
•WhatisMarket?
The American marketing Association defines a market as “The
aggregate demand of the potential buyers for product or a
product or services “.
Philip Kotler defines “A market as an area of potential
exchanges”.
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4. MARKETING
•WhatisMarketing?
•Marketingisanorganizationalfunctionandasetofprocessesforcreating,
communicating,anddeliveringvaluetocustomersandformanaging
customerrelationshipsinwaysthatbenefittheorganizationandits
stakeholders.
•Marketingmanagementistheprocessofplanningandexecuting,the
conception,pricing,promotinganddistributingofideas,goodsand
servicestocreateanexchangethatsatisfyindividualorgroupobjectives
(AmericanmarketingAssociation,2015).
•Marketingisasocialandmanagerialprocessbywhichanindividualor
groupobtainwhattheyneedandwantthroughcreating,offeringand
exchangingofproductofvalueswithothers(PhilipKotler,2012).
•Marketingisthetotalbusinessactivitydesignedtoplan,price,promoteand
distributewantsatisfyingproductstotargetmarkettoachieve
organizationalgoal(WilliamJ.Stanton,1984).
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5. MARKETING ANSWERS THE FOLLOWING QUESTIONS:
1.Whoaremycustomers?
2.Whataremycustomer’sneedsandwants?
3.HowcanIsatisfymycustomers’?
4.HowdoImakeaprofitasIsatisfymycustomers?

6. WHO ARE YOUR CUSTOMERS?
1.Peoplewhoarebuyingfromyounow.
2.Peopleyouhopewillbuyfromyouinthefuture.
3.Peoplewhostoppedbuyingfromyoubutyouhopetogetthemback.

7. WHY MARKETING IS CRITICAL
•FourPsofmarketing:product,price,place(distribution),and
promotion(communication).
•Marketinginfluencetheprocessofcreatingtheoffer(design
theproductandsettheprice),taketheoffertothemarket
(throughdistribution),and,atthesametime,tellthemarket
abouttheoffer(communications).
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8. UNIQUE MARKETING CHALLENGES ENTREPRENEURS FACE
•Have limited resources financial as well as managerial.
•Rarelyhaveenoughmoneytosupportmarketingactivities,rarely
haveprovenmarketingexpertisewithinthecompany.Whereaslarger
corporationscanspendhundredsofthousandsorevenmillionson
conductingextensivemarketingresearch,testingtheirstrategies,and
carefullydesigningmarketingcampaigns,newventuresfindcreative
andlesscostlymeanstovalidatetheirideasandreachcustomers.
•Havelittleornomarketshareandaconfinedgeographicmarket
presence.Asaresult,theyenjoyfeweconomiesofscale;for
example,itisdifficultforsmallcompaniestosavemoneyon
‘‘mediabuys’’becausetheirrangeofadvertisingissolimited.
•Strugglewithlowbrandawarenessandcustomerloyalty,bothof
whichmustbecarefullycultivated.
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9. MARKETING INTELLIGENCE
•Marketingintelligenceiseverydayinformationabout
developmentsinthemarketingenvironmentthathelps
managersprepareandadjustmarketingplans.
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10. MARKETING INTELLIGENCE IS USED TO DETERMINE :
1.Current and future market needs,
2.Changes in the business environment that may affect the size and nature
of the market in the future.

11. THE IMPORTANCE OF MARKETING INTELLIGENCE
Marketing intelligence provides the following benefits:
a)Market and customer orientation –promote external focus.
b)Identification of new opportunities.
c)Smart segmentation.
d)Early warning of competitor moves.
e)Minimizing investment risks.
f)Quicker, more efficient and cost-effective information.

12. WAYS TO UNDERTAKE MARKETING INTELLIGENCE
1.Unfocused scanning: Any information that may be useful is gathered without
any specific purpose in mind.
2.Semi-focused scanning: no specific purpose. The manager is not in search of
particular pieces of information that he/she is actively searching.
3.Informal search: Limited and unstructured attempt to obtain information for a
specific purpose.
4.Formal search: This is a purposeful search for information in some systematic
way.

13. MARKETING RESEARCH
•Managerscannotalwayswaitforinformationtoarriveinbits
andpiecesfromthemarketingintelligencesystem.Theyoften
requireformalstudiesofspecificsituations.
•Marketingresearchersspecifytheinformationneededto
addressmarketingissues,designthemethodforcollecting
information,manageandimplementthedatacollection
process,analysestheresultsandcommunicatethefindingsand
theirimplications.
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14. THE MARKETING RESEARCH PROCESS
1.Defining the problem and research objectives
2.Developing the research plan
3.Implementing the research plan
4.Interpreting and reporting the findings
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15. CORE CONCEPTS OF MARKETING
1.Need:
2.Wants:
3.Demands:
4.Product:Productsbroadlyclassifyastangibilityandintangibilityfeatures.
5.Value:istheconsumer’sestimateoftheproductsoverallcapacitytosatisfyhisorherneeds.
6.Cost:
7.Exchange:
8.Transaction:isthetradeofvaluesbetweentwoparties.
9.Market:

16. THE KINDS OF UTILITY THAT MARKETING
PROVIDES
1.Form Utility
•The physical or chemical changes that make a product more valuable.
2. Place Utility
•When a product is readily accessible.
3. Time Utility
4. Information Utility:
•Informing prospective buyers that a product exists.
•Image utility is a special type of information utility. It is the emotional or psychological values that a person
attaches to a product or brand because of its reputation or social standing.
5. Possession Utility:
•When ownership is transferred to the buyer.

17. MARKETING PHILOSOPHIES
•Marketing philosophies represent the view or strategies businesses use to
guide the whole marketing activities of the business.
•The five marketing philosophies:
1.Productionconcept
2.Productconcept
3.Sellingconcept
4.Marketingconcept
5.Societal marketing concepts

18. ProductionPhilosophy Consumers favor products that are available and highly
affordable
Improve production and distribution
‘Availability and affordability is what the customer wants’
Product PhilosophyConsumers favor products that offer the most quality,
performance and innovative features
‘A good product will sell itself’
Sales Philosophy Consumers will buy products only if the company promotes/
sells these products
‘Creative advertising and selling will overcome consumers’
resistance and convince them to buy’
SUMMARY OF THE EVOLUTION OF MARKETING

19. MarketingPhilosophyFocuses on needs/ wants of target markets and
delivering satisfaction better than competitors
‘The consumer is king! Find a need and fill it’
Relationship marketing
Philosophy
Focuses on needs/ wants of target markets and
delivering superior value
‘Long-term relationships with customers and other
partners lead to success’
SUMMARY OF THE EVOLUTION OF MARKETING CONT…

20. COMPETITIVE ANALYSIS
•Competitiveanalysisreferstodeterminingthestrengthsand
weaknessesofcompetitorsanddesigningwaystotakeopportunitiesor
tacklethreatsposedbycompetitors.

21. USES OF COMPETITIVE ANALYSIS
1.Who are your competitors?
2.What customer needs and preferences are you competing to meet?
3.What are the similarities and differences between their products/services and
yours?
4.What are the strengths and weaknesses of each of their products and services?
5.How do their prices compared to yours? How are they doing overall?
6.How do you plan to compete? Offer better quality services? Lower prices?
More support? Easier access to services? How are you uniquely suited to
compete with them?

22. STEPS OF COMPETITIVE ANALYSIS
a)Identify your competitors
b)Gather information about competitors
c)Gathering Information on Competitions
d)Analysing the Competition
e)Develop a pricing

23. THE MARKETING MIX
•FourPsofproduct,price,place,andpromotionisasetoftools
yourcompanycanusetoachieveitsmarketinggoals.
•ProductorService
•Calledtheheartofthemarketingmix.Itmustbeflexibleand
capableofadoptiontothechangingneedsofthecustomer.
•Itisalwaysimportanttoknowwhycustomersbuyproducts
andwhatparticularfeaturesandbenefitstheyvaluemost.
•Productorserviceinclude:-designandtechnicalfeatures,
performance,quality,range(size,coloretc.),maintenanceand
runningcost,safety,beforeandaftersale,productavailability
andimage(fashion).
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24. PRICE
•Thepricechargedforaparticularproductorserviceoughtto
reflectthevalueofthe‘packageofbenefits,tothecustomer,
oftenthevaluetothecustomerforaproductorservicecanbe
differentindifferentcircumstances.
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25. PROMOTION
•Concerned with how well a firm communicates its sales message to
existing and potential customers.
•Direct promotion: When a company promotes its products and services
directly to potential customers it is called direct promotion. Often this is
undertaken through the sales force. It includes:-direct face-to-face selling,
telephone selling, direct mail, exhibitions and special demonstrations but
this method is expensive.
•Indirect promotion: On the other hand indirect presentation is concerned
with the mass techniques of communication. One of these techniques is
advertising, which seeks to inform, persuade and remained (reinforce)
messages to existing & potential customers. Most small firms start out
relying heavily on personal selling, but as they grow the real cost of this
activity become more apparent. However it is important that advertising
campaigns are properly costed and planned in advance.
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26. PLACE (DISTRIBUTION)
•Deals about getting the goods or services to the right place at the
right time for the right customer.
•For a shop that means location, frequently the most important
element of the mix for them.
•For other business it is about physical distribution (moving goods)
and distribution channels (which outlets to use).
•Physical distribution is concerned with transport and it addresses
the following questions.
•Should a small firm use vehicles or the train?
•Should it use its own vehicles or hire a carrier?
•How frequently should it deliver?
•Distribution channel is concerned with the outlets you use for selling to
customers. Ideally, you would seek to have channels that give you maximum
control at the most reasonable cost.
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27. WHAT IS MARKETING STRATEGY?
•Marketingstrategyisamethodoffocusinganorganization'senergiesandresources
onacourseofactionwhichcanleadtoincreasedsalesanddominanceofa
targetedmarket.

28. PRICING STRATEGY
Profit = TR –TC
Where, TR=Total Revenue, TC=Total Cost
1.Price Skimming
2.Penetration Pricing
3.Cost-plus pricing: Any amount that is above unit cost may be considered
4.Mark-up pricing: A certain percentage of the selling price is added to unit cost.
5.Competition Oriented Pricing
6.Odd-even pricing

29. PROMOTION STRATEGIES
1.Advertising
2.Personal selling
3.Public relations
4.Sales promotion
5.Direct Marketing

30. 3.DISTRIBUTION STRATEGIES
1.Direct channels: In this type of channel, producers and end users
directly interact.
2.Indirect channels
Factors should be considered to select the best channel:
Company Factors: financial, human and technological capabilities of a
company to do its business activities.

31. 3.DISTRIBUTION STRATEGIES(CONTINUED….)
Market Characteristics: Geography, market density, market size, target market
Product Attributes: perishability, value and sophistication of the product
Environmental Forces: those forces that affect the business like competition,
technology and culture.

32. THE CONCEPT OF CUSTOMER
1.Customers can be internal (e.g. Member of the organization) or
2.External (customers coming from outside).

33. STRATEGIC ACTIVITIES NEEDED FOR QUALITY CUSTOMER
SERVICE DELIVERY
1.Establishing a clear customer service strategy.
2.Ensuring that correct people are in place, with the correct skills to deliver
outstanding personal service.
3.Establishing clear material service delivery processes.

34. 5.8.3 STRATEGIC ACTIVITIES NEEDED FOR
QUALITY CUSTOMER SERVICE DELIVERY (CONTINUED…)
1.Improving in terms of process improvement, quality monitoring and
recovery continuously.
2.Participatory Management

35. 5.8.4 CUSTOMER HANDLING AND SATISFACTION
Considering Customers as an Invaluable Asset
Reducing Customer Complaints
Place Yourself in The Customer’s Shoes.