introduction to business management
TRANSCRIPT
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MNB102-EMNB102-E
INTRODUCTION TO BUSINESS MANAGEMENTINTRODUCTION TO BUSINESS MANAGEMENT
Facilitator: Neels Bothma
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Welcome to the Marketing Section of today’s First
Years lectures.
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Structure of the class
1. Introduction to marketing2. Marketing research3. Customer behaviour4. Market segmentation5. The marketing mix6. The marketing strategy7. Public relations
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• Operation/Product orientation• Sales orientation• Marketing oriented• Consumer oriented• Strategic approach• Relationship marketing
The Evolution of Marketing as we know it
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FactoryExistingProducts
Sellingand
Promoting
ProfitsthroughVolume
MarketCustomer
NeedsIntegratedMarketing
Profitsthrough
Satisfaction
The Selling ConceptThe Selling Concept
The Marketing ConceptThe Marketing Concept
StartingPoint
Focus Means Ends
Marketing & Sales Concepts Contrasted
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What is Marketing?
Marketing consists of management tasks and decisions directed at successfully meeting opportunities and threats in a dynamic environment, by effectively developing and transferring a need-satisfying market offering to consumers in such a way that the objectives of the business, the consumer and society will be achieved.
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The Marketing Process (see Fig 13.1)
Simply: Marketing management creates an offering
(product, price marketing communication, distribution)
The target market sacrifices money The target market consumes the offering Marketing management gets feedback through
research This all happens in a marketing environment Everybody satisfies their objectives (maximise
profitability in the long term, total need satisfaction)
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Target Customers
IntendedPositioning
Price
Amount of moneythat consumers
have to pay to obtainthe product
Product
“Goods-and-service”combination that a company offers a
target market
Activities that persuade target
customers to buythe product
Promotion
Company activitiesthat make the
product available
Place
Marketing Mix- The Four P’s
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WhyInformation
IsNeeded
MarketingEnvironment
StrategicPlanning
Customer Needs
Competition
The Importance of Information
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Marketing ResearchWhy?Know the research processMarket forecasting
1. Define the problem to be investigated2. Formulate hypotheses3. Investigate hypotheses4. Compile a questionnaire5. Test the questionnaire6. Select sample7. Train fieldworkers and do fieldwork8. Analyse data9. Interpret the results10. Compile the report11. Management studies report12. Management implements findings
Sales forecastingProfit forecasting
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Consumer Buying Behavior
Consumer Buying Behavior refers to the buying behavior patterns of decision making units (individuals & households) directly involved in the purchase and use of products, including the decision-making processes preceding and determining these behaviour patterns.
Study consumer behavior to answer:
“How do consumers respond to marketing efforts the company might use, why do they behave the way they do?”
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Customer behaviour
Awareness of need Gathering information Evaluation Purchase action Post purchase evaluation
INDIVIDUAL FACTORS
MotivationAttitude
PerceptionLearning ability
PersonalityLifestyle
GROUP FACTORS
FamilyReference groupOpinion leadersCultural group
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Groups
• Membership
• Reference Group
Groups
• Membership
• Reference Group
Family• Husband, wife, kids• Influencer, buyer, user
Family• Husband, wife, kids• Influencer, buyer, user
Cultural groupCultural group
Group FactorsGroup Factors
Factors Affecting Consumer Behavior: Group
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Individual Factors
MotivationMotivation
PerceptionPerception
LearningLearning
Beliefs and Attitudes
Beliefs and Attitudes
PersonalityAnd
lifestyle
PersonalityAnd
lifestyle
Factors Affecting Consumer Behavior: Individual
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Esteem Needs(self-esteem, status)
Social Needs(sense of belonging, love)
Safety Needs(security, protection)
Physiological Needs(hunger, thirst)
Self Actualization
(Self-development)
Maslow’s Hierarchy of Needs
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Awareness of need or problemAwareness of need or problem
Information SearchInformation Search
Evaluation of AlternativesEvaluation of Alternatives
Purchase DecisionPurchase Decision
Post-purchase BehaviorPost-purchase Behavior
Consumer Decision Process
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Market segmentation
What is a market?Different types of markets:
• consumers• industrial• resellers• government
Approaches to the market – see fig 13.3
Requirements for successful segmentation:• Identifiable and measurable• Substantial• Accessible• Responsive
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CompanyCompany
ConsumerMarkets
InternationalMarkets
GovernmentMarkets
BusinessMarkets
ResellerMarkets
Customer Markets
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• Size, purchasing power, profiles of segments can be measured.
• Segments must be effectively reached and served.
• Segments must be large or profitable enough to serve.
Measurable Measurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
• Segments must respond differently to different marketing mix elements & actions.
• Must be able to attract and serve the segments.
Requirements for Effective Segmentation
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Bases for segmentation
Demographic – Who they areGeographic – Where they arePsychographic – What they think they areBehavioural – How do they behave
All of the above determine the consumer profile – draw a picture
Targeting and positioning
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Geographic
DemographicAge, gender, family size
and life cycle, or income
PsychographicSocial class, lifestyle, or personality
BehavioralOccasions, benefits, uses, or responses
Nations, states, regions or cities,
density
Bases for Segmenting Consumer Markets
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Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing Mix 1
CompanyMarketing Mix 1
CompanyMarketing Mix 2
CompanyMarketing Mix 2
CompanyMarketing Mix 3
CompanyMarketing Mix 3
MarketMarket
A. MARKET AGGREGATION
B. MULTI-SEGMENT APPROACH
C. SINGLE SEGMENT APPROACH
Market Coverage Strategies
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Positioning for Positioning for Competitive AdvantageCompetitive Advantage
Product’s Position - the place the product occupies in consumers’ minds relative to competing products; i.e. Castle used to position on “the great South African beer”.
Then: “the friendship brew”
Then: SA’s finest
Now? Satisfies a South African Thirst
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Marketers must:Marketers must:
Plan positions to give products the greatest advantage
Develop marketing mixes to create planned positions
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1. Identify Basesfor Segmenting the Market
2. Develop Profilesof Resulting Segments
3. Develop Measuresof Segment Attractiveness
4. Select TargetSegment(s)
5. Develop Positioningfor Each Target Segment
6. Develop MarketingMix for Each Target Segment Market
Positioning
MarketTargeting
Market Segmentation
Steps in Segmentation, Targeting, and Positioning
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Target Customers
IntendedPositioning
Price
Amount of moneythat consumers
have to pay to obtainthe product
Product
“Goods-and-service”combination that a company offers a
target market
Activities that persuade target
customers to buythe product
Promotion
Company activitiesthat make the
product available
Place
Marketing Mix- The Four P’s
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The marketing instruments (mix)
1. Product
― Product concept― Product classification― Brand decisions― Packaging decisions― Differentiation― Obsolescence― Multi- product decisions― New product decisions
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The marketing instruments – Product (cont.)
New Product Development Process Develop new ideas Screen ideas Eliminate non viable ideas Develop product Develop strategy Test marketing Commercialisation
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Shopping ProductsShopping Products
> Buy less frequently> Gather product information> Fewer purchase locations> Compare for:
• Suitability & Quality • Price & Style
Convenience ProductsConvenience Products
> Buy frequently & immediately> Low priced> Many purchase locations> Includes:
• Staple goods• Impulse goods• Emergency goods
Specialty ProductsSpecialty Products
> Special purchase efforts> Unique characteristics> Brand identification> Few purchase locations
Unsought ProductsUnsought Products
> New innovations> Products consumers don’t want to think about> Require much advertising & personal selling
Classification of ProductClassification of Product
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The marketing instruments (mix)
2. Price
Types of prices cost price market price target price final price
Price adaptations skimming penetration market price leader price odd price bait price
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The marketing instruments (mix)
3. Distribution
Type of channelChannel leadershipMarket coveragePhysical distribution
Refer to box on page 326
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Direct
Indirect
Direct
Indirect
MM WW WW RR CC
MM WW RR CC
MM RR CC
MM CC
Channel 1
Channel 2
Channel 3
Channel 4
Channel Level - A Layer of Intermediaries that Perform Some Work in Bringing the Product and it’s Ownership Closer to the Buyer.
Consumer Marketing Channels & Levels
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InventoryWhen to order
How much to orderJust-in-time
InventoryWhen to order
How much to orderJust-in-time
CostsMinimize Costs ofAttaining Logistics
Objectives
CostsMinimize Costs ofAttaining Logistics
Objectives
WarehousingStorage
Distribution
WarehousingStorage
Distribution
Order ProcessingSubmittedProcessedShipped
Order ProcessingSubmittedProcessedShipped
Physical distribution
FunctionsTransportation Water, Truck,
Rail, Pipeline & Air
Physical distribution
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to inform, persuade and remind advertising personal selling sales promotion publicity
The marketing instruments (mix)
4. Marketing communication
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AdvertisingAdvertising
Personal SellingPersonal Selling
Any Paid Form of Nonpersonal Presentation by an Identified Sponsor.
Any Paid Form of Nonpersonal Presentation by an Identified Sponsor.
Sales Promotion Short-term Incentives to Encourage Sales.
Public RelationsBuilding Good Relations with Various Publics by Obtaining Favorable Unpaid Publicity.
Direct MarketingDirect Communications With Individuals to Obtain an Immediate Response.
Personal Presentations by a Firm’s Sales Force.
The Marketing The Marketing Communications MixCommunications Mix
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The Integrated Marketing Strategy
The marketing concept: Profitability Consumer orientation Social responsibility Organisational integration
The marketing concept: Profitability Consumer orientation Social responsibility Organisational integration
Phases in the product life cycle: Introductory Growth Maturity Decline
Phases in the product life cycle: Introductory Growth Maturity Decline
Marketing warfare Attack Defense
Marketing warfare Attack Defense
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Time
ProductDevelop-
ment
Introduction
Profits
Sales
Growth Maturity Decline
Losses/Investments ($)
Sales andProfits ($)
Sales and Profits Over the Product’s Life From Introduction to Decline
Product Life Cycle
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Marketing Planning and Control
Planning
o Strategic planningo Functional planning
Control
o Set objectiveso Measure performanceo Evaluate performanceo Take corrective action
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Public Relations
A deliberate, planned and sustained process of communication between a
business and its internal and external publics. Its purpose is obtaining, maintaining and/or improving good relations and
understanding.
Developed from:ManipulationInformationMutual influence
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What is Public Relations?
•Building good relations with the company’s various publics by obtaining favorable publicity, building up a good “corporate image” and handling or heading off unfavorable rumors, stories and events.
•Major functions are:– Press Relations
– Product Publicity
– Public Affairs
– Lobbying
– Investor Relations
–Development
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SpecialEvents
SpecialEvents
Written MaterialsWritten
Materials
Corporate Identity Materials
Corporate Identity Materials SpeechesSpeeches
NewsNews
AudiovisualMaterials
AudiovisualMaterials
Public Service
Activities
Public Service
Activities
Web SiteWeb Site
Major Public Relations Tools
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Public Relations Management
1. Planningo Scanning the environmento Setting objectives
2. OrganisingoOrganisational structureoOutside consultants
3. LeadingoEstablish corporate culture
4. Evaluation and control
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Communication
• Communication can be verbal and non-verbal
• Communication process – see fig 16.6
Basically: Sender encodes message which is transmitted to receiver via a medium.
The receiver decodes the message and interprets it in some way. This all happens despite noise in the environment.
• Types of communication media:
The spoken wordThe printed mediaSight and soundSpecial eventsThe Internet
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Publicity
• Methods of obtaining publicity:
Unique special events Unique communication messages News releases Sponsorships
• Social responsibility and business ethics
• Areas of social responsibility:
Consumers Suppliers Competitors Employees Owners and shareholders The community
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The end!
We encourage you to study further in this exciting
field!