Principles of Marketing 1

PRINCIPLES OF
MARKETING
DR. JOSEPH G. YEBOAH

&
Kwasi Owusu-Antwi, ProM,MCIM
0244-488887
DR. JOSEPH G. YEBOAH & K. OWUSU-
ANTWI
What is Marketing?
• Many people think of marketing
only as selling or advertising, but it is
actually much more than that.
• Selling and advertising occur only
after a product is produced.
• In contrast, marketing starts long
before a company has a product.
• Selling and advertising are only part
of a set of marketing tools used by
the marketer.
DR. JOSEPH G. YEBOAH & K.
OWUSU-ANTWI
Defining Marketing.
• Kotler P. (2022) defines
Marketing as an
administrative and social
process through which
individuals and groups obtain
what they need and desire by
the generation, offering and
exchange of valuable products
with their equals.
DR. JOSEPH G. YEBOAH & K. OWUSU-ANTWI
Contd.
• Kotler and Armstrong (2010) define
MARKETING as “The process by
which companies create value for
customers and build strong customer
relationships in order to capture
value from customers in return.”
• Simply put, Marketing is the process
of identifying, anticipating and
satisfying customer needs profitably.

CUSTOMER NEEDS, WANTS AND
DEMANDS
• Human NEEDS are states of felt

deprivation (e.g. physical needs,
social needs, etc.)
• These needs are not created by
marketers, rather, they are a basic
part of the human make-up.
• WANTS are the form human needs
take as they are shaped by culture
and individual personality and by
society. DR. JOSEPH G. YEBOAH & K.
OWUSU-ANTWI
Contd.
• DEMANDS are wants that are
backed by buying power.
• Given their needs, wants and
resources, people demand products
with benefits that add up to the
most value and satisfaction.
• To be successful, marketers need to
learn and understand their
customers’ needs wants and
demands.
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Market Offerings: Products, Services
and Experiences.
• Consumers’ needs and wants are
satisfied through MARKET OFFERINGS.
 These include PHYSICAL PRODUCTS or
tangible offerings, often referred to as
GOODS
 SERVICES and EXPERIENCES which are
essentially intangible in nature.
• Many market offerings (PRODUCTS)
are combinations of tangible and
intangible offerings.
Simple Marketing System
Communication
Goods / services
Market
Industry (a collection
(a collection Money
of buyers)
of sellers)
Information

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The Scope of Marketing
 Places
 Properties
 Organizations
 Information
 Ideas
 Goods
 Services
 Events
 Persons

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Company Orientations Towards
the Marketplace
. Production Concept
Consumers prefer products that are widely
available and inexpensive
Customers favour products that offer the

Product Concept most quality, performance, or innovative
features
Consumers will buy products only if the

Selling Concept company aggressively promotes / sells
these products
Focuses on needs / wants of target markets

Marketing Concept & delivering value better than competitors

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The Selling and Marketing Concepts
Starting
Contrasted
Focus Means Ends
point
Factory Existing Selling and Profits through

products promotion sales volume
(a) The Selling Concept
Profits through
Market Customer Integrated customer
needs marketing satisfaction
(b) The Marketing Concept

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The Societal Marketing Concept
• The Societal Marketing Concept holds
that marketing strategy should
deliver value to customers in a way
that maintain or improves both the
consumer’s and society’s well being.
• It suggests that companies should
balance three considerations in
setting their marketing strategies:
Company Profits, Consumer Wants
and Society’s interests
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Holistic Marketing

& K. OWUSU-ANTWI
The Four Ps and the Four Cs
.
Marketing mix
Product
Place
Customer Convenience
solution Price Promotion
Customer Communication
cost

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The Marketing Mix

& K. OWUSU-ANTWI
SCANNING THE MARKETING
ENVIRONMENT
OBJECTIVES
• Tracking and Identifying Opportunities
in the Micro and Macro Environment
• Identify Forces within the Micro and
Macro Environment
• Analyze the Opportunities Available
• Showing more Concern with the
Uncontrollables

Marketing Environment
• These are actors and forces within
the company’s environment which
affect its ability to deliver value to
its customers.
• It is divided into Micro and Macro
• Developments within the
environment can create
opportunities or threats for the
company.
• Constant environmental scanning is
required. DR. JOSEPH G. YEBOAH & K.
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Micro Environment
Principal actors in the company’s
microenvironment that affect the company’s ability to
serve its markets.
Company
Marketing Customers
Suppliers
intermediaries
Competitors
Publics

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The Company’s Internal
Environment
.
R&D Purchasing
Finance Manufacturing
Top
management Accounting
Marketing

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Suppliers
• These are firms and individuals that
provide the resources needed by the
company and its competitors to
provide goods and services.
• Marketing managers must watch
 Supplier shortages or delays
 Labour strikes
 Prices of inputs
 Transportation, etc.
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Marketing Intermediaries
• These are firms that help the
company to promote, sell and
distribute its goods to final buyers.
• They include:-
 Resellers
o Wholesalers, retailers which buy and sell
 Physical distribution firms

o Warehousing, transportation, etc.
 Marketing-service agencies
o Advertisers, researchers, media, consulting, etc.
 Financial intermediaries
o Banks, credit companies, etc.
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Customers
TYPES OF CONSUMER MARKETS
Reseller Institutional
markets markets
Business Government
markets markets
Consumer
markets International
markets
Markets

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Competitors
• The marketing concept states that, to
be successful, a company must provide
greater customer value than its
competitors.
• Thus, marketers must do more than
adapt to the needs of target
consumers.
• They must gain competitive advantage
by positioning their offerings strongly
against competitors’ offerings in the
minds of consumers.
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Publics
• It is any group that has an actual or
potential interest in or impact on an
organization’s ability to achieve its
objectives.
Types of public
 Financial publics
 Media publics
 General public
 Internal publics

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THE COMPANY’S
MACROENVIRONMENT
. Influential Forces in the Company’s
Macro environment
Natural forces Technological

forces
Economic Political
forces forces
Demographic Cultural
forces forces
Company

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Demographic Environment
 Demography is the study of human
populations in terms of size, density,
location, age, sex, race, occupation
and other statistics such as:-
 Population size and growth trends
 Changing age structure of a
population
 The changing family
 Rising number of educated people
 Increasing diversity
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Economic Environment
 These are factors that affect
consumer buying power and
spending patterns.
 E.g.
 Income distribution and changes in
purchasing power
 Changing consumer spending
patterns

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Natural Environment
 These are natural resources that are
needed as inputs by marketers or
that are affected by marketing
activities. E.g.
 Shortages of raw materials
 Increased cost of energy
 Increased pollution
 Government intervention in natural
resource management

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Technological Environment
 These are forces that create new
technologies, creating new products
and market opportunities. E.g.
 Fast pace of technological change
 Unlimited opportunities for innovation
 High research and development (H&D)
costs
 Concentration on minor improvements
 Increased regulation

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Political Environment
 These are laws, government
agencies and pressure groups that
influence and limit various
organizations and individuals in a
given society. E.g.
 Legislation regulating business
 Growth of public interest groups
 Increased emphasis on ethics and
socially responsible action

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Social/Cultural Environment
 These are institutions and other
forces that affect society’s basic
values, perceptions, preferences,
and behaviours.
 The principal cultural values of a
society are expressed in people’s
views of themselves and others, as
well as their views of organizations,
society, nature and the universe.

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Responding to the Marketing
Environment
• Many companies view the
marketing environment as an
“uncontrollable” element to which
they must adapt.
• They analyze the environment and
design strategies that will help the
company avoid the threats and take
advantage of the opportunities the
environment provides.

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Market Segmentation, Targeting and
Positioning
Definition of Terms
 Market Segmentation: Dividing a market
into smaller groups with distinct needs, characteristics,
or behaviour that might require separate marketing
strategies or mixes.
 Market Targeting: The process of evaluating
each market segment’s potential and selecting one or
more segments to enter.

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Contd.
 Differentiation: Actually
distinguishing the market
offering to create superior
customer value.
 Positioning: Arranging for a
market offering to occupy a
clear, distinctive and desirable
place relative to competing
products in the minds of target
consumers.
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Bases for Segmenting Consumer
Markets
 Geographic : E.g. Nations, regions, cities,
districts, neighbourhoods, rural, etc.
 Demographic: E.g. Age and life cycle,
Gender, Family size, income, occupation,
education, race, generation, nationality, etc.
 Psychographic : Social class, lifestyle,
personality, etc.
 Behavioural: Occasions, benefits, user
status, user rates, loyalty status, readiness
stage, attitude towards product.

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Example of the toothpaste market
Four main segments:
• Sensory: Seeking flavor and product appearance
• Sociables: Seeking brightness of teeth
• Worriers: Seeking decay prevention
• Independent: Seeking low price
Requirements for Effective
Segmentation
. • Size, purchasing power, profiles of segments
Measurable can be measured.
• The market segments must be large or

Substantial profitable enough to serve.
• Segments can be effectively reached and

Accessible served.
• The market segments must respond differently

Differential to marketing mix elements and actions.
• Effective programs can be designed for

Actionable attracting and serving the segments.

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Importance of Market Segmentation
 Helps to identify different market

segments
 Helps to allocate marketing budget
 Ensures effective marketing
 Helps to reveal hidden marketing
opportunities.

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Segmenting Industrial markets: Bases
• Demographic classification by industry, by type and
size of company, by location.
• Operating variables by principal form of technology
which customers use, user status (high, medium low
user), customer capabilities (broad or narrow range)
• Purchasing approaches buying criteria (quality,
service or price), buying policies (purchase, lease,
lowest bid), current relationships (new or old
customers)
Segmenting Industrial markets: Bases –
cont’d
• Situational factors urgency (speed of delivery), size of order (larger
or small), application (General or specific)
• Personal characteristics loyalty, attitude to risk, organizational
culture, status of the buyer in the organization.
Market Targeting
• A market is the set of all actual and potential buyers who have
sufficient interest in, income for, and access to a product.
• Target Market
A set of buyer sharing common needs or characteristics that the
company decides to serve.
.Market Targeting Strategies
Micromarketing
Undifferentiated Differentiated Concentrated
(local or individual
(mass) marketing (segmented) (niche)
marketing)
marketing marketing
Targeting Targeting
broadly narrowly

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Contd.
• Target Market
 A set of buyer sharing common needs or characteristics that
the company decides to serve.
• Undifferentiated (Mass) Marketing
 The firm decides to ignore market segment differences and go
after the whole market with one offer.
• Differentiated (Segmented) Marketing
 The firm decides to target several market segments and
designs separate offers for each

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Contd.
• Concentrated (Niche) Marketing
 The firm goes after a large share of one or a few segments or
niches.
• Micromarketing is an example of Niche Marketing
• Micromarketing is the practice of tailoring products
and marketing programs to the needs and wants of
specific individuals and local customer groups

Brand Positioning
• Is at the heart of the marketing strategy
• “. . . the act of designing the company’s offer and image so that it

occupies a distinct and valued place in the target customer’s minds.”
Philip Kotler
It is the place a product occupies in consumers’ minds relative to
competing products
Determining a frame of reference
• What are the ideal points-of-parity and points-of-difference brand
associations vis-à-vis the competition?
• Marketers need to know:
Who the target consumer is
Who the main competitors are
How the brand is similar to these competitors
How the brand is different from them
Points-of-Parity
and Points-of-Difference
• Points-of-difference (PODs) are attributes or benefits that consumers
strongly associate with a brand, positively evaluate, and believe that
they could not find to the same extent with a competitive brand.
• Points-of-parity associations (POPs), on the other hand, are not
necessarily unique to the brand but may in fact be shared with other
brands.
Brand Positioning Guidelines
• Two key issues in arriving at the optimal competitive brand
positioning are:
Defining and communicating the competitive frame of reference
Choosing and establishing points-of-parity and points-of-difference
Defining and Communicating the
Competitive Frame of Reference
• Defining a competitive frame of reference for a brand positioning is to
determine category membership.
• The preferred approach to positioning is to inform consumers of a
brand’s membership before stating its point of difference in
relationship to other category members.
Choosing POP’s & POD’s
• Desirability criteria (consumer perspective)
• Personally relevant
• Distinctive and superior
• Believable and credible
• Deliverability criteria (firm perspective)
• Feasible
• Profitable
• Defensible and difficult to attack
Attribute and Benefit Trade-offs
• Price and quality
• Convenience and quality
• Taste and low calories
• Efficacy and mildness
• Power and safety
• Ubiquity and prestige
• Comprehensiveness (variety) and simplicity
• Strength and refinement
Positioning Mistakes /Problems
• Confused positioning, where buyers are unsure of what the organization
stands for
• Over-positioning, where consumers perceive the organization’s products as

being expensive and fail to recognize the full breadth and value of the range
• Under-positioning, where the message is simply too vague and consumers
have little real idea of what the organization stands for or how it differs from
the competition.
Repositioning strategies
• Gradual repositioning, which involves a planned and
continuous adaptation to the changing market
environment.
An example of this would be Skoda’s move from an
essentially utilitarian offer to one that is far more firmly
mid-market.
Repositioning strategies – cont’d
• Radical repositioning, where an increasing gap between
what the brand offers and what the market wants leads the
management team to think about a major strategic change.
As an example of this, Lucozade moved from a position
where its primary appeal was to the sick and the old to one
where its major appeal is as a lifestyle and health drink.
Repositioning strategies – cont’d
• Innovative repositioning, where the planner finds a new
strategic position that offers market opportunities that have
not so far been identified by competitors.
Häagen-Dazs recognized the potential of the premium-
quality, premium-priced adult ice-cream market, and
throughout the 1990s successfully developed this.
• Zero positioning, where the organization maintains an
unchanged face to the market over a long period of time
and/or it communicates very poorly with the target market,
with the result that potential customers have little idea of
what the organization stands for.
PRODUCTS
• OBJECTIVES
• Product Classifications
• Product Mix
• New Products
• Product Life Cycle
DR. JOSEPH G. YEBOAH & K. OWUSU-

ANTWI
What is a Product?
• A product is anything that can be

offered to the market for attention,
acquisition, use, or consumption that
might satisfy a want or need.
• Includes:
 Physical Objects
 Services, ideas, events, persons, places
 Organizations
 Ideas combinations of the above

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Product Decisions
• Developing a product or service involves

defining the benefits that it will offer.
• These benefits are communicated and
delivered by product attributes such as:-
 Quality
 Features
 Style
 Design

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Products
• Products can be classified under tangible
offerings and intangible offerings.
• i.e. goods and services
• Many products are made up of a mixture
tangible and intangible offerings.
• Intangible offerings can be added to wholly
tangible offerings to make them a lot more
appealing to customers.

Individual Product Decisions
NB: The focus of the product decisions
is to create core customer value
Product
Product
Branding Packaging Labelling support
attributes services
• Product Attributes: e.g. product quality, features,

style and design, benefits, etc.
• Branding: A name, term, sign, symbol, design or
a combination of these that identifies the
product or services of one seller or group of
sellers and differentiates them from those of
competitors.
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Contd.
• Packaging involves designing and
producing the container or wrapper
for a product.
• Labelling range from simple tags
attached to products to complex
graphics that are part of the
package.
• Labelling identifies the product and the brand, as well as the
manufacturer, where it was made, contents, how to use it
safely, etc.
• Product Support Services include customer service, after
sales services, home delivery, etc.

Levels of Product
. Augmented product
Installation
Packaging
Brand Core Features After-

Delivery & name sales
credit Benefit or
service
service
Quality Design
level
Warranty
Core Product
Actual Product DR. JOSEPH G. YEBOAH & K.
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Consumer Product Classifications
 A consumer product is a product bought by final
consumer for personal consumption.
Convenience Products Shopping Products
 Buy frequently and immediately  Buy less frequently

 Low priced  Higher price
 Mass advertising  Fewer purchase locations
 Many purchasing locations  Comparison shopping
e.g. Toothpaste, toilet rolls, milk, e.g. Clothing, cars, appliances
etc.
Specialty Products Unsought Products
 Special purchase efforts  New innovations

 High price  Consumers don’t want to think
 Unique characteristics about these products
 Brand identification  Require much advertising &
 Few purchase location personal selling
e.g. Rolex i.e. Life insurance, blood donation

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New Products
• A product that is essentially new
• Different from any existing product
• Different from competitors
• Minor improvements
• Basis for meeting customer changing
needs.

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Why New Products Fail
• Overestimated demand
• Poor design
• Poor marketing execution
• High development costs
• Strong competitive reaction

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New Product Development Process
. Marketing
Strategy
Development
Concept Business
Development Analysis
and Testing
Test
Idea Marketing
Screening
Idea
Commercialization
Generation
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1. Idea Generation
 Idea Generation is the Systematic
Search for new product ideas
obtained from:-
 Employees
 Competitors
 Distributors
 Suppliers

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2. Idea Screening
 This is aimed at spotting good ideas
dropping poor ones as soon as possible.
 Many companies have systems for
rating and screening ideas which
estimate:-
 Market Size
 Product Price
 Development Time and Costs
 Manufacturing Costs
 Rate of return
 The idea is then evaluated against a set of general company
criteria.
 E.g. REAL, WIN, WORTH IT?
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3. Concept Development and Testing
. Product concept is a detailed
version of the new product
1. Develop Product Ideas into Alternative idea stated in meaningful
Product Concepts consumer terms
2. Concept Testing: Test the Product

Concepts with groups of Target Customers
3. Choose the Best one.

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4. Develop Marketing Strategy
.
Part One Describes Overall:
Target Market
Planned Product Positioning
Sales and Profit Goals
Market Share
Part Two Describes First-Year:

Product’s Planned Price
Distribution
Marketing Budget
Part Three Describes Long-Term:

Sales and Profit Goals
Marketing Mix Strategy

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5. Business Analysis
. Business Analysis
Review of Product Sales, Costs,
and Profit Projections to see if
they Meet Company Objectives
If No, Eliminate
Product Concept
If Yes, Move to Product

Development

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6. Product Development
 Develop samples of the product

taking cognizance of the following
 Core product
 Physical product
 Augmented product

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7. Test Marketing
. Test Marketing is the stage where the Product and the Marketing
Program are introduced into more realistic Market Settings
Budget Levels Product
Positioning
Packaging
Elements that may be
Test Marketed
by a Company
Branding Promotion
Pricing Distribution

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7b. Consumer-Goods Test
Marketing
Simulated
. Test Market
Controlled Test
Test in a simulated Marketing
shopping environment
to a sample of Test in a few stores that
consumers-staged have agreed to carry
advertising and the products for a fee
purchase decisions new
products
Sales-Wave Standard Test

Research Market
Test offering trial to a Full marketing campaign

sample of consumers in in a small number of
successive periods representative

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8. Commercialization
 When (period)
 Whom (target market)
 Where (geographical location)
 Marketing mix strategies
Product
Price
Place
Promotion

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Product Life Cycle
• This is the stages of growth and
sales in the life of a product, or
• The various stages a product goes
through from the time of
introduction until its eventual
withdrawal from the market.
 Introduction
 Growth
 Maturity
 Decline

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Sales and Profit life Cycles
.
Sales and
profits
Maturity
Growth
Decline
Introduction
Product Sales
Development
Profit
Time
Losses and
investments
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Introduction Stage
Sales Low sales
Costs High cost per customer
Profits Negative profits (losses)
Customers Innovators
Competitors Few competitors
Marketing objectives Create product awareness and trial
Product strategies Offer a basic product
Pricing strategies Use cost-plus pricing
Distribution strategies Build selective distribution
Advertising strategies Build product awareness among early adopters and

dealers
Sales promotion strategies Use heavy promotion to entice trial

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Growth Stage
Sales Rapidly rising sales
Costs Average cost per customer
Profits Rising profits
Customers Early adopters
Competitors Growing number of competitors
Marketing objectives Maximize market share
Product strategies Offer product extensions, service, warranty
Pricing strategies Price to penetrate market
Distribution strategies Build intensive distribution
Advertising strategies Build awareness and interest in the mass market
Sales promotion strategies Reduce to take advantage of heavy consumer demand

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Maturity Stage
Sales Peak sales
Costs Low cost per customer
Profits High profits
Customers Middle majority
Competitors Stable number, beginning to decline
Marketing objectives Maximize profit while defending market share
Product strategies Diversify brand and models
Pricing strategies Price to match or beat competitors
Distribution strategies Build more intensive distribution
Advertising strategies Stress brand differences and benefits
Sales promotion strategies Increase to encourage brand switching

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Maturity Stage
 Modifying the Market
 The company tries to increase consumption of the current
product.
 Modifying the product
 This involves changing characteristics such as quality,
features or style to attract new users.
 Modifying the market mix
 The company tries to improve sales by changing one or
more marketing mix elements.

Decline Stage
Sales Declining sales
Costs Low cost per customer
Profits Declining profits
Customers Laggards majority
Competitors Declining number
Marketing objectives Reduce expenditure and milk the brand
Product strategies Phase out weak items
Pricing strategies Cut price
Distribution strategies Go selective: phase out unprofitable outlets
Advertising strategies Reduce to level needed to retain hard-core loyal customers
Sales promotion strategies Reduce to minimal level

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CHARACTERISTICS OF SERVICES
 Intangibility
 Variability or Heterogeneity
 Inseparability
 Perishability

INTANGIBILITY
 Services cannot be seen, felt or touched
 Services are experienced only when performed
 Difficult for clients to understand
 Difficult to display or communicate to clients
 Quality is hard to determine for clients
 Prices are difficult to set
 Services cannot be inventoried
 Services cannot be patented

Marketing Strategies for Intangibility
 Develop strong visual symbols for
firm to suggest quality service. E.g.
equipment should be state of the art
 present professional qualification of
staff in adverts
 Promise and deliver on promises

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Inseparability
 Services are produced and
consumed simultaneously
 Services cannot often be separated
from the provider
 Client is required to participate in
production
 Customers may affect the service
 Customers may affect each other

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Marketing Strategies for Inseparability
 Continual training about quality,
policies and production techniques
 Multiple locations, web page, and e-
mail with clients for convenience
 Train and empower frontline staff in
complaint resolution
 Hire competent employees who
know marketing

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Variability or Heterogeneity
 Services normally vary not only
from firm to form, but sometimes
within the firm, and even the same
employee.
 Customer satisfaction depends
largely on employee actions
 Service delivered might not match
what was planned or promised.

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Marketing Strategies for Variability
 Standardize with automation of
routine services to ensure quality.
 Monitor customer satisfaction
periodically
 Hire the right people, train and
motivate them effectively.

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Perishability
 Services cannot be inventoried,
returned or resold.
 Opportunity to sell services is
quickly lost
 Sluggish services during slow times
represent revenue lost forever
 It is very difficult to synchronize
supply with demand

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Marketing Strategies for Perishability
 Increase personal selling for new
clients during slow times
 Increase selling new services to
existing clients during slow times.
 Set higher fees at peak usage times
and lower fees at non-peak times
 Use reservation system to sell
services in advance.
 Cross-train personnel for surges in
demand.
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Expanded Mix for Services: the 7Ps
 Product
 Price
 Place
 Promotion
 People
 Process
 Physical Evidence

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People, Process, Physical Evidence
PEOPLE PHYSICAL PROCESS
EVIDENCE
Employees Facility Design Flow of activities

• Recruiting
• Training Equipment
• Motivation Number of
• Rewards Signage processes
• Teamwork
Employee Dress
Level of customer
Customers Other Tangibles involvement
• Education
• Training

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Marketing Communication Mix
• Marketers need to communicate
with their clients to build good
relationships.
• What is communicated must not be
left to chance.
• The marketer can communicate with
customers in various ways.

OWUSU-ANTWI
The Communication (Promotional) Mix
• This is the specific blend of
promotion tools that the company
uses to persuasively communicate
customer value and build customer
relationships.
• The promotion mix has five major
elements.
 Advertising
 Sales Promotion
 Personal Selling
 Public Relations
 Direct Marketing

OWUSU-ANTWI
Contd.
a. Advertising
 Any paid form of non-personal presentation and promotion
of ideas, goods or services by an identified sponsor.
b. Sales promotion
 Short term incentives to encourage the sales of a product or
service
c. Personal Selling
 Personal presentation by the firm’s sales force for the
purpose of making sales and building customer relationships
d. Public Relations
 Building good relations with the company’s various publics
by obtaining favourable publicity, building up a good
corporate image, and handling or heading off unfavourable
rumours, stories, and events.
e. Direct Marketing
 Direct connections with carefully targeted individual
consumers to obtain an immediate response and cultivate
lasting customerDR.relationships
JOSEPH G. YEBOAH & K. OWUSU-ANTWI
Shaping the Overall Promotional Mix
 Advertising
Advantages Disadvantages
• Wide reach • It can be very expensive to
• Large scale advertising implies undertake
big size, popularity, success • It is impersonal and cannot as
• Allows seller to repeat messages persuasive as e.g. personal
many times selling
• Advertised products seen as • It is mostly one way
more legitimate communication
• It is very expressive, allowing • Cluttering makes it a nuisance to
for artful use of visuals, print, some people
sound, colour
• Can be used to build long term
image
• Can trigger quick sales

OWUSU-ANTWI
Contd.
 Personal selling
• It is interactive and provides instant • It is very expensive per customer
feedback contacted.
• It is most effective in building up • It is not easy to call off compared
buyers’ preferences, convictions to advertising, etc.
and actions. • It is very expensive recruiting,
• It is possible to make quick training, motivating and managing
adjustments to suit the unique sales force.
needs of buyers and sellers. • It can be very frustrating venture
• It allows building up customer for sales force.
relationships
• The target audience might listen,
even if they do not buy

Contd.
 Sales Promotion
• Offer strong incentives to purchase • Effects are usually short-lived

• Invite and encourage quick • Not effective in building long-run
response brand preference
• Increases short term sales • If used too much, can dilute the
• Help build long-term market share value of the brand
• Entice consumers to try new • Can cause problems with marketing
products intermediaries on issues such as
• Lure consumers away from payment.
competitors’ products • Customers may stock up during
• Create excitement in stores promotions and not make repeat
purchases for a long time.
• Customers expect promotions all
the time.

OWUSU-ANTWI
Contd.
 Public Relations
• Very believable than • Marketers do not have direct

advertisements control over the message delivered
• Can reach many prospects who by the media.
avoid sales people • The message might be recrafted
• Very effective in building good by the media and the intended
public image message might be lost or distorted.
• Effective in handling and heading • The story might be “bumped” to
off unfavourable rumours. make way for presumably more
important news.

OWUSU-ANTWI
Contd.
 Direct Marketing
• It is non-public as the information is • The cost per contact is high (about
directed at a specific source 15 to 20 times more than newspaper
• It is immediate as messages can be and television.
prepared very quickly • It is difficult to acquire credible data
• It can be customized, so messages • There is the need to update database
can be tailored to appeal to specific frequently
customers • Some customers might consider it
• It is interactive and provides intrusive and become irritated
feedback • It has limited reach compared to
advertising

OWUSU-ANTWI
Promotion Mix Strategies
• Marketers can choose from two basic
promotion mix strategies.
 Push Promotion
 Pull Promotion
• A Push Strategy involves “pushing” the
products through marketing channels
to final consumers.
• Thus, the promotional efforts are directed towards channel
members.
• A Pull Strategy is aimed at “pulling”

the products from the marketer.
• Thus, promotional efforts are directed towards final consumers,
who demand the products from channel members who then
demand them from the producer.
OWUSU-ANTWI
Push Vrs. Pull Promotion Strategy
Push Strategy
Producer marketing
activities (personal
selling, trade
promotion, etc.) Retailers and
Producer Consumers
wholesalers
Pull Strategy
Demand Demand
Retailers and
Producer wholesalers Consumers
Producer marketing activities (consumers advertising, sales promotion, etc.)

OWUSU-ANTWI
Marketing Communication Mix
• Marketers need to communicate
with their clients to build good
relationships.
• What is communicated must not be
left to chance.
• The marketer can communicate with
customers in various ways.

OWUSU-ANTWI
Contd.
a. Advertising
 Any paid form of non-personal presentation and promotion
of ideas, goods or services by an identified sponsor.
b. Sales promotion
 Short term incentives to encourage the sales of a product or
service
c. Personal Selling
 Personal presentation by the firm’s sales force for the
purpose of making sales and building customer relationships
d. Public Relations
 Building good relations with the company’s various publics
by obtaining favourable publicity, building up a good
corporate image, and handling or heading off unfavourable
rumours, stories, and events.
e. Direct Marketing
 Direct connections with carefully targeted individual
consumers to obtain an immediate response and cultivate
lasting customerDR.relationships
JOSEPH G. YEBOAH & K. OWUSU-ANTWI
Shaping the Overall Promotional Mix
 Advertising
• Wide reach • It can be very expensive to
• Large scale advertising implies undertake
big size, popularity, success • It is impersonal and cannot as
• Allows seller to repeat messages persuasive as e.g. personal
many times selling
• Advertised products seen as • It is mostly one way
more legitimate communication
• It is very expressive, allowing • Cluttering makes it a nuisance to
for artful use of visuals, print, some people
sound, colour
• Can be used to build long term
image
• Can trigger quick sales

OWUSU-ANTWI
Contd.
 Personal selling
• It is interactive and provides instant • It is very expensive per customer
feedback contacted.
• It is most effective in building up • It is not easy to call off compared
buyers’ preferences, convictions to advertising, etc.
and actions. • It is very expensive recruiting,
• It is possible to make quick training, motivating and managing
adjustments to suit the unique sales force.
needs of buyers and sellers. • It can be very frustrating venture
• It allows building up customer for sales force.
relationships
• The target audience might listen,
even if they do not buy

Contd.
 Sales Promotion
• Offer strong incentives to purchase • Effects are usually short-lived

• Invite and encourage quick • Not effective in building long-run
response brand preference
• Increases short term sales • If used too much, can dilute the
• Help build long-term market share value of the brand
• Entice consumers to try new • Can cause problems with marketing
products intermediaries on issues such as
• Lure consumers away from payment.
competitors’ products • Customers may stock up during
• Create excitement in stores promotions and not make repeat
purchases for a long time.
• Customers expect promotions all
the time.

OWUSU-ANTWI
Contd.
 Public Relations
• Very believable than • Marketers do not have direct

advertisements control over the message delivered
• Can reach many prospects who by the media.
avoid sales people • The message might be recrafted
• Very effective in building good by the media and the intended
public image message might be lost or distorted.
• Effective in handling and heading • The story might be “bumped” to
off unfavourable rumours. make way for presumably more
important news.

OWUSU-ANTWI
Contd.
 Direct Marketing
• It is non-public as the information is • The cost per contact is high (about
directed at a specific source 15 to 20 times more than newspaper
• It is immediate as messages can be and television.
prepared very quickly • It is difficult to acquire credible data
• It can be customized, so messages • There is the need to update database
can be tailored to appeal to specific frequently
customers • Some customers might consider it
• It is interactive and provides intrusive and become irritated
feedback • It has limited reach compared to
advertising

OWUSU-ANTWI
Push Vrs. Pull Promotion Strategy
Push Strategy
Producer marketing
activities (personal
selling, trade
promotion, etc.) Retailers and
Producer Consumers
wholesalers
Pull Strategy
Demand Demand
Retailers and
Producer wholesalers Consumers
Producer marketing activities (consumers advertising, sales promotion, etc.)

OWUSU-ANTWI
PLACE
(DISTRIBUTION )
.

The Concept of Distribution
• The importance of good distribution decisions in designing a

marketing plan is simple: Customer won’t buy your goods or services
unless it readily available WHEN and WHERE they want to buy it.
• Product distribution (or place) is one of the four elements of the
marketing mix.
• The other three parts of the marketing mix are product, pricing, and
promotion.

Distribution (place) - defined
• Distribution is the process of making a product or service available
for use or consumption by a consumer or business user, using direct
means, or using indirect means with intermediaries.
• Distribution of products takes place by means of channels.
• Channels are sets of interdependent organizer (called intermediaries)
involved in making the product available for consumption to end-user.
• An effective Distribution channel makes the Right quantities of the
Right product available in the Right place at the Right time to satisfy
the target consumer.

Distribution (place) defined –Cont’d
• Distribution means to spread the product throughout the marketplace such
that a large number of people can buy it. Distribution involves doing the
following things:
• A good transport system to take the goods into different geographical areas.
• A good tracking system so that the right goods reach at the right time in the
right quantity.
• A good packaging, which takes the wear and tear of transport.
• Tracking the places where the product can be placed such that there is a
maximum opportunity to buy it.
• It also involves a system to take back goods from the trade

Distribution Strategies
A manufacturer can pursue three Basic Strategies of Retail Coverage
• Intensive distribution
• Exclusive distribution
• Selective distribution.

Intensive Distribution
• Involves selling the product through as many as types of distribution
outlets as possible in order to maximize market coverage.
• Such strategy uses the maximum possible number of retailers and is
most appropriate for low – involvements, frequently purchased
convenience goods such as Candy, Soft drinks, Deodorants, Razor
blade etc.
• This strategy maximizes product available, which generates greater
product recognition and more implies buying.
• However, firms that adopt intensive distribution often experience
implementation and cost problem.
Exclusive Distribution
• This strategy relies on only one retailer or dealer in a given
geographic territory.
• It is most appropriate when the product is a high – involvement
specialty or shopping good.
• Exclusive distribution is also useful when a firm wants to differentiate
its product on the Basis of high quality, prestige or excellent customer
service.
• It involves the use of a very limited number of intermediaries in order
to achieve a greater degree of control over how the product is sold
and the sort of sales support that is given.
Exclusive Distribution – cont’d
• Many exclusive distribution arrangement also go hard – in – hand
with an obligation upon the distribution not to sell competing
products
• an obvious example of organization which uses this approach are the
manufactures of luxury cars.
• The main advantages of exclusive distribution are that the
- manufacturer can choose retailers whose clientele match its target
market,
-and that there with close cooperation in implementation of the
products merchandising and customer service programme
• The major disadvantage of exclusive distribution is the risk involved in
relying on a single retailer in a given territory

Selective Distribution
• This is a compromise between the other two extremes since it use
more than one but fewer than all available retailers in a geographic
area.
• It is an appropriate for most shopping goods.
• Most brands of automobiles are distributed this way.
• Selective distribution involves a producer using a limited number of
outlets in a geographical area to sell products

Distribution Channel
• A Distribution Channel is a set of interdependent organizations

(intermediaries) involved in the process of making a product or service
available for use or consumption by the consumer or business user.
• Business-to-business (B2B) distribution occurs between a producer
and industrial users of raw materials needed for the manufacture of
finished products. For example, a logging company needs a distribution
system to connect it with the lumber manufacturer who makes wood
for buildings and furniture.
• Business-to-customer (B2C) distribution occurs between the producer
and the final user.

Direct vs. Indirect Distribution
Direct Distribution
• A distribution system is said to be direct when the product or service leaves the
producer and goes directly to the customer with no middlemen involved.
Indirect Distribution
• Indirect distribution occurs when there are middlemen or intermediaries within
the distribution channel.
Types of intermediaries
• Distributors
• Wholesalers
• Retailers
• Department stores
CHANNEL MANAGEMENT
• Channel Management Decision involves the developing of policies and procedures
to gain and maintain cooperation of , and often to form mutually beneficial long-
term relationship with the various institutions within the channel.
• Such Decisions Focus on:
-Selection :The Selecting and Recruiting the Individual Channel members (The
selecting of the appropriate channel members)
- Motivation – Motivating the channel members to perform specific marketing
function on behalf of the supplier’s product/service.
- Coordination their effort
-Assessing their performance
-Resolving Conflicts that Arise.
Selecting and Recruiting Channel
Members
In choosing between channel alternatives, there are several factors that typically
influence the decision, including:
• Product Characteristics: e.g. it perishable? It is of a particularly high value and does it
need specialist installation and after sales support.
• The Characteristics of the intermediaries that might be used. What particular skills
and levels of sales expertise do they have?
-Level of geographic coverage they are able to offer.
-Particular valuable sales contact that they have
-Importance of the product to them and level of effort they put into the sales Exercise.
-Profit margins they would expect on product and level of promotional support they
would need.

Members – cont’d
• Competitive Characteristics
-How are the organization’s direct competitors distributing their
product?
- Do we want or need to adopt the same approach so that potential
customers are always faced in a choice between the alternatives, or is
there scope for doing something completely different that would give
us a competitive advantage.
• Environmental Factors : (Legal Issues, Economic Issues& their
Implications)

Members – cont’d
• Company Characteristics
- Past achievement and the sort of Relationship that the firms have developed
with possible intermediaries.
-The organization’s long-term objectives and how these might
influence the choice of net work

Distribution Channel Functions
• Information Provider
Middlemen have a role in providing information about the market to
the manufacturer.
Since these middlemen are present in the market place and close to the
customer they can provide this information at no additional cost
• Price Stability:
Maintaining price stability in the market is another function a
middleman performs. Many a time the middlemen absorb an increase
in the price of the products and continue to charge the customer the
same old price.
• Promotion:
Many of channel members design their own sales incentive programmes,
aimed at building customers traffic at the other outlets.
• Financing:
Middlemen finance manufacturers’ operation by providing the necessary
working capital in the form of advance payments for goods and services
• Title:
Most middlemen take the title to the goods or services, and trade in their
own name. This helps in diffusing the risks between the manufacturer and
middlemen
• Help in Production Function
• Matching Demand and Supply
• Pricing
• Matching Buyers and Sellers
most sellers do not know where they can reach potential buyers and
similarly, buyers do not know where they can reach potential sellers.
From this perspective, the role of the marketing channel to match the
buyers’ and sellers’ needs becomes very vital

Summary
• Distribution is the process of making a product or service available for
use or consumption by a consumer or business user, using direct means,
or using indirect means with intermediaries
• Goods can be distributed using two main types of channels: direct
distribution channels and indirect distribution channels.
• A manufacturer can pursue three Basic Strategies of Retail Coverage -
Intensive, Exclusive, or Selective distribution.
• In choosing between channel alternatives, there are several factors that
typically influence the decision, including Product Characteristics,
Characteristics of the intermediaries, Competitive Characteristics,
Environmental Factors and Company Characteristics
PRICING

PRICING: FACTOR AFFECTING PRICING DECISIONS

PRICING POLICIES/STRATEGIES

Approaches to price setting
In some industries at least, organizations have little choice other than
to follow the prices set by the market leader leads to the hypothesis
that there are two types of firm:
1. Price-makers, which, largely as the result of their size and power
within the market, are able to determine the levels and patterns of
price that others then follow.

2. Price-takers, which, by virtue of their size and market position, lack
of product differentiation
or passive organizational culture, are either unable or unwilling to
adopt a proactive pricing stance. As a result, they follow the lead set by
one or more larger and more aggressive organizations within the
industry.

Setting a price: Factors to consider
In setting a price either for a new or modified product, or for an existing
product that is being introduced into a new sector of the market, the
strategist needs to give explicit consideration to a variety of factors
• The organization’s corporate objectives
• The nature and structure of competition
• The product life cycle
• Legal considerations
• Consumers and their response patterns
• Costs.
➡ Who are our direct and indirect
competitors?
Competition
➡ What pricing strategies does
each pursue?
➡ Is price competition an
important element of their
marketing mix?
➡ How are they likely to behave
when faced with price
competition?
➡ What financial resources do
they have available to cope with a
price war?
➡ Are competitors’ prices related
toG.particular
DR. JOSEPH market segments?
YEBOAH & K. OWUSU-ANTWI
• Are there any constraints upon pricing
and re-pricing decisions?
Legal
• Are there legal constraints upon
margins within the distribution
network?
• Is there freedom to engage in price
promotions?
• Do prices have to be printed on the
product and/or package?
• Does retail price maintenance exist?

➡ How do consumers perceive these
Customers types of product?
➡ How important is the product’s
country of origin?
➡ How is our organization
perceived?
➡ Do any social or cultural factors
exist that might influence the prices
that
consumers are willing to pay?
➡ What are the implications of the
Distribution patterns of distribution for costs
and subsequent prices?
➡ What margins typically exist
throughout the channel?
➡ How are price promotions and
special offers likely to be received?

➡ Is there a consumer group (e.g.
The Consumers’ Association) which
publishes comparative analyses of
Other products which might influence
consumers’ perceptions of prices?
➡ Will our price strategy be affected
by the behaviour of others in the
market in the past?
➡ How is the market as a whole likely
to respond to price changes?
➡ How is the market as a whole likely
to respond to price changes?

Deciding on the pricing objectives
• Survival
• Return on investment.
• Market stabilization.
• The maintenance and improvement of market
position.
• Meeting or following competition.
• Pricing to reflect product differentiation.
• Market skimming.
• Market penetration.
• Early cash recovery.
• Discouraging others from
DR. JOSEPH entering
G. YEBOAH the market.
& K. OWUSU-ANTWI
Deciding on the pricing objectives
1. Survival. This is arguably the most fundamental pricing objective
and comes into play when the conditions facing the organization are
proving to be extremely difficult. Thus, prices are reduced often to
levels far below cost simply to maintain a sufficient flow of cash for
working capital.

2. Return on investment. Here prices are set partly to
satisfy the needs of consumers, but more importantly
to achieve a predetermined level of return on the
capital investment involved.
3. Market stabilization. Here, having identified the leader
in each market sector, the firm determines its prices in
such a way that the likelihood of the leader retaliating
is minimized. In this way, the status quo is maintained
and market stability ensured.

4. The maintenance and improvement of market
position. Recognizing that price is often an effective way
of improving market share, the marketing strategist uses
price partly as a means of defending its current position,
and partly as a basis for gradually increasing its share in
those parts of the market where gains are most likely to
be made and least likely to result in competitive action.
There are, however, dangers of using price to pursue
market share, which include the following:

5. Meeting or following competition. Having entered a
market in which competitors are firmly entrenched, the
firm may decide quite simply to take its lead in pricing
from others until it has built up sufficient experience and
established a firm reputation on which it can subsequently
build.
6. Pricing to reflect product differentiation. For a firm with
a broad product range, differences between the products
can often be made most apparent by means of price
variations related to each market segment.

7 Market skimming. With a skimming objective the
marketer enters the market with a high price and only
gradually lowers it as he or she seeks a greater number of
market segments.
8 Market penetration. The firm may adopt a far more
aggressive approach in which prices are set at a
deliberately low level to ensure a high level of sales and to
keep competitors at a distance.

9. Early cash recovery. Faced with problems of liquidity
or a belief that the life of the product or market is likely
to be short, the firm may opt for a policy designed to
generate a high cash flow and lead to an early recovery
of cash.
10 Discouraging others from entering the market. This
is done by deliberately setting a low
price so that returns are low, whilst simultaneously
sending out signals about a willingness to engage in a
price war with any new entrants.

Pricing: Cost-oriented methods
• Cost-plus or Markup pricing
• Rate of return or Target return pricing
• Break-even analysis

Using price as a tactical weapon
• The bulk of our discussion so far has centered around the
strategic role played by price.
• In many cases, however, price is used very largely as a
tactical weapon, a role to which, because of its flexibility, it
is well suited.
• There are several ways in which this tactical role can be
performed, including:

Using price as a tactical weapon –cont’d
• Varying prices to reflect geographic differences
• Offering discounts for early payment, off-season buying,
and to encourage high volume purchases
• Trade-in allowances to boost sales when the economy
generally is sluggish
• Discriminatory pricing in order to capitalize upon the
ability or willingness of particular market segments to
pay a higher price
• Hitting at competitors who appear particularly
vulnerable.
Using price as a tactical weapon –cont’d
• Optional feature pricing, which allows the price of the basic product
such as a car to be kept low, but for substantial profits then to be
made by adding accessories such as a sunroof


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PRINCIPLES OF

DR. JOSEPH G. YEBOAH

DR. JOSEPH G. YEBOAH & K. OWUSU-ANTWI

• Human NEEDS are states of felt

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

Customers favour products that offer the

Consumers will buy products only if the

Focuses on needs / wants of target markets

DR. JOSEPH G. YEBOAH & K.

Factory Existing Selling and Profits through

(a) The Selling Concept

(b) The Marketing Concept

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH

DR. JOSEPH G. YEBOAH & K. OWUSU-ANTWI

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

 Physical distribution firms

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

Natural forces Technological

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

• The market segments must be large or

• Segments can be effectively reached and

• The market segments must respond differently

• Effective programs can be designed for

DR. JOSEPH G. YEBOAH & K.

 Helps to identify different market

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K. OWUSU-ANTWI

• “. . . the act of designing the company’s offer and image so that it

• Over-positioning, where consumers perceive the organization’s products as

DR. JOSEPH G. YEBOAH & K. OWUSU-

• A product is anything that can be

DR. JOSEPH G. YEBOAH & K.

• Developing a product or service involves

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K. OWUSU-ANTWI

• Product Attributes: e.g. product quality, features,

DR. JOSEPH G. YEBOAH & K. OWUSU-ANTWI

Brand Core Features After-

 Buy frequently and immediately  Buy less frequently

 Special purchase efforts  New innovations

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.

DR. JOSEPH G. YEBOAH & K.