MARKETING
DEFINITION:
Marketing is the manageme nt process/f uncti on that is responsible for the identifying (mark et
research), anticipati ng trends and satisf ying of custome rs’ (target market) needs and wants.
The marketing function is responsible for all the activities that enable the product/se rvice to get
from the produce r to the consume r. It is about the right product/service, at the right time,
place and price to optimize the business’ mark et position (compe titive advantage).
Without proper marketing, companies are not able to ge t close to its c ustomers, and unable to
understand them, their behavior, needs and w ants – and then matching or exceedi ng them with
sound delivery. How do you c ommunicate with your custome r? Today vs yeste rday? Social media?
Through marketing we want to i ncrease our market sh are and market position and c ompetiti ve
advantage.
Effective marketing – Retains custome rs, gai ns more customers, builds your brand, i ncreases
sales and profit.
THE 7P’S OF MARKETING:
PRODUCT:
The busi ness must provi de a product/service that the c ustomer is able and willing to buy. The
product must add value to the custome r (brand, warranty, quality, usef ulness, design,
technology). Tangi ble and i ntangi ble products – hamburger vs bank account. M arker rese arch and
environmental scanning is important to ge t to know your custome r. To customers the packaging is
part of the product and sometimes as desi rable as the product itself. Consumers recognize and
distinguish a product by its packaging. Influenced by tre nds e.g. Health conscious f ood items,
McDonalds faile d products e. g. Hotdog, etc.
Price charge d is i nfluenced by strategy:
• Market pe netration strategy – low price to attract new custome rs
• Leader pricing – draw customer into shop with discounted price on e.g. Hamburger patties,
hoping the y will also buy rolls, tomatoes, sauc e etc.
• Promotional pricing – discounts offered close to special events e.g. decrease in bubble
bath f or mother’s day, incre ase i n roses for Vale ntine ’s day
• Bulk discounts
• Prestige pricing (luxury products) – ex pectati on to pay more e.g. Engagement ri ng (R500
or R5000 ?)
Consume r/Essenti al goods – usually not ve ry brand loyal, e.g. B read/milk – speed and convenience
of purchase
Speciality goods – e.g. Cars – consume rs more caref ul and brand aware. Marketing more target
market f ocusse d.
Select/Luxury goods – customer will c onsider price, quality, brand names e.g. Clothing, jew ellery
P RI C E :
Products/services are only worth what customers are willi ng to pay for them (opportunity costs).
The price charge d by the business could also be their compe titive advantage (not only cheapest
price, but also best value for mone y). P RICE needs to provi de the business with PROFIT. It is the
SASHTI NOTES 1
, only element of the marketing mix that ge nerates revenue, all the other eleme nts are costs to
the business. Price helps positi on your busine ss in the market. The higher the price, the higher
the quality and value is expecte d by the customer. Price sensitivity – Existing custome rs are
usually less price sensitive as you have already gaine d their loyalty. New custome rs need to be
convince d of the v alue of your product bef ore paying a particular price. Essenti al goods are also
less price se nsitive. Targe t market/LSM affordability. Some c ustomers want to pay as little as
possi ble vs “snob v alue”, cheap = poor quality percepti on.
Psychological pricing – R1999 vs R2000
Supe rficial discounti ng – w as R10 000, now only R9000 (made up)
Price discrimination – Woman c ustomers get di scount
Time e.g. Summer sale
Area e.g. U pmarket = higher price
P L AC E :
This is where the custome r will buy the product – this include convenience and effective
distri buti on to this place. The product must be available in the right place, time, quality and
quantity while keeping storage, transport and other costs to a mi nimum. Choosing the c orre ct,
reliable supplier is c rucial to this process and a c ompetitive advantage. Franchising as a me ans of
distri buti on gives the custome r a se nse of quality and reassurance as a brand is known and
trusted. Place also includes the way your products are displaye d to your customer – shop
windows, web sites, promoti ons etc. Do you take your product/se rvice to the custome r O R do the
custome r c ome to you? Wimpy at petrol stati ons, FFI = c onve nience, Malls/Petrol stations -
where lots of pe ople go. Storage logistics = c osts. Close to supplie rs – raw material av ailability.
Franchising = popular me ans of di stri buti on in FFI.
Inte nsively distribute d – large variety and widely available e.g. B read and milk
Selectively distributed – only available at sele cted shops e.g. Jewellery, pe rfumes
Exclusively distri buted – Very ex pensive items e.g. Ferrari
P RO M O T I O N:
This is the way a busi ness c ommunicates with the customer about what it does and h as to offer
and includes: branding, advertisi ng, P R, c orporate i dentity, personal sales, special offers,
exhibitions etc. Includes communicati on with all stakeholde rs and must be appe aling, draw
attenti on, consiste nt, transpare nt. Getting th e correct level of attenti on from the target market
(LSM). Which medium is used? TV, Social medi a, Radi o etc .
PEOPLE:
All staff who c ome in contact with you c ustomer will h ave an effect on them – and on their view
and satisfacti on of the busi ness. The employe e is the face of the busi ness. Training and
motivati on is important as the brand and reputation of the business re sts i n the h ands of the
staff. Consumers do not se parate the produc t/service from the employee who provide d it. After
sales service adds additional value to the product and could become more important to the
custome r th an price. U niforms of staff creating/strengtheni ng a brand.
P RO C E SS:
The process of provi ding the product/se rvice is crucial to c ustomer satisf action – e.g. Waiting
time, informati on given, helpf ulness and that the systems are w orking. Consumer experie nce is
important and will add to the c ompetitive advantage.
P HY SI C AL E V I D E NC E :
The locati on and physical appearance of the business premises gives the c ustomer a sense of
quality. E.g. Banks look formal, re staurants look clean and inviti ng, i ntangi ble products bought
SASHTI NOTES 2
