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Lecture notes of 17 pages for the course MNB 1501-Business Management 1A at Unisa (ALL NEEDED)

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  • July 23, 2021
  • 17
  • 2020/2021
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MNB1601/001/4/2017


Learning Unit 5
The marketing process


INTRODUCTION AND AIM OF THE UNIT

43Read section 13.1

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The main objective of a business is to maximise profitability in the long term. It is generally
678




recognised that marketing is central to this objective because of its role in defining cus-
tomer needs and wants and directing the resources of the business to meet these needs.
The rapid change in the marketing environment over the past decade has heightened an
awareness of the importance of marketing because businesses have had to face increas-
ing competition, economic fluctuations, political changes and the need to become more
ecologically conscious. Successful marketers are those who can best satisfy consumer
needs in the context of the dynamic environment where threats must be countered and
all opportunities grasped in order to survive. One such business is Edgars, which is con-
tinually doing research to determine the clothing needs of the different market segments
that it targets. The company then adapts its marketing strategy according to these needs
by designing clothes for the different segments, charging prices which these segments
are prepared to pay, selling these clothes in stores which are easily accessible to its cus-
tomers and advertising these clothes in media that are purchased by these customers,
such as FAIRLADY and Edgars Magazine. This learning unit introduces you to the nature
and components of marketing, the evolution of marketing thought, the determinants of
consumer behaviour, the marketing research process, market segmentation and target
market selection.



44 STUDY CHAPTER 13 (section 13.1 – 13.9) IN ITBM

Contents of the learning unit

−− The nature of marketing and the marketing process
−− Evolution of marketing thought
−− Consumer behaviour
−− Marketing research
−− Market segmentation, target marketing and positioning
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45




71

, Learning objectives

After completing this topic, you should be able to

yy analyse the definition of marketing by referring to the keywords
yy demonstrate an understanding of the market offering by highlighting its four variables
yy describe the evolution of marketing thought by highlighting the origin and different
approaches
yy analyse the behaviour patterns of consumers by identifying the determinants of consumer
behaviour and the consumer decision-making process
yy demonstrate an understanding of marketing research by emphasising how it can be used
in scanning the environment
yy demonstrate an understanding of how the consumer market can be segmented by em-
phasising the components of market segmentation and target market selection
680




KEY TERMS


product marketing concept
distribution consumer orientation
marketing communication social responsibility
price profit orientation
individual factors organisational integration
group factors market aggregation
phases in decision making target market selection
survey method single segment approach
sales forecasting multi-segment approach



Refer to the end of chapter 13 in the prescribed book to familiarise yourself with the key
681




terms for this learning unit before continuing.


5.1 THE NATURE OF MARKETING AND THE MARKETING
PROCESS

Study section 13.4, section 13.5 and table 13.1 in ITBM


Marketing is everywhere. It is something we experience every day of our lives. You switch
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on the television and there is an advertisement for Omo washing powder on the screen,
you stroll down a supermarket aisle and you are handed a coupon for All Gold tomato
sauce, while at the end of the next aisle you try a sample of a new brand of fat-free po-
tato chips. At home, you answer a phone call asking you to participate in a survey about
radio listening habits and then complete an order form to subscribe to Garden and Home
magazine.


72

, MNB1601/001/4/2017

All these situations involve marketing. Many people mistakenly think of marketing only
683




as selling and advertising, and no wonder, because every day we are bombarded with
the above types of messages. Someone is always trying to sell us something. Therefore
many students are surprised to hear that selling is only the tip of the iceberg. It is but
one of several marketing functions. This does not mean that advertising and selling are
unimportant, but rather that they are part of a larger “marketing mix” – a set of tools
that work together to affect the marketing place. Today’s businesses face increasingly
stiff competition, and the rewards will go to those who can best read customer wants and
deliver the greatest value to their customers. The essence of marketing is the develop-
ment of exchanges in which businesses and customers voluntarily engage in transactions
that are designed to benefit both of them. For example, customers receive benefits from
purchasing Crosse & Blackwell’s mayonnaise and Ricoffy, and Nestlé, the company that
sells these products, receives benefits by getting money for it.

In order for Nestlé to receive these benefits, it has to be involved in various activities
684




which form part of the marketing process. For instance, Nestlé has to divide the market
into segments with more or less similar needs (market segmentation) and it then has to
choose those target markets that it wishes to sell its products to (i.e. the retail market
and the catering market). It then has to do market research into the specific needs and
wants of these markets in order to develop market offerings that will satisfy their needs.
The market offering consists of four variables: the product, the price, the distribution of
the products and the promotion messages to sell these products. For instance, when
designing its products, Nestlé caters for the retail market with its 100 g, 250 g, 500 g and
750 g tins of Ricoffy, while it satisfies the catering market with its 1,5 kg tin and 25 kg bag
of Ricoffy. It sets different prices for the different sizes of Ricoffy. While customers in the
retail market can buy the products from stores such as Shoprite and Spar countrywide,
Nestlé makes use of agents to deliver its products directly to hotels, hostels, universities
and guesthouses in the catering market. Nestlé uses sales representatives and brochures
to promote its products in the catering market, while the traditional promotional methods
are used to sell its products to the ordinary customer, namely advertising in newspapers
and magazines regarding discounts on Ricoffy, attaching coupons and samples of Ricoffy to
magazines and offering competitions in which customers can win a motorcar, for example.

By combining these four variables, Nestlé creates a market offering that will satisfy the
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needs of its many customers.


46 Did you KNOW?

McDonald's is one of the best-known brands worldwide. The secret of McDonald’s success is
its willingness to innovate, even while striving to achieve consistency in the operation of its
many outlets. The McDonald’s brand has differentiated itself from its competitors not just
through loyalty, but also through quality, consistency and standardisation. Read more about
McDonald's marketing in ITBM at the end of section 13.1.




73

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