Operations Strategy

The core purpose of marketing is to satisfy consumers while making a profit for the organisation. The focus of marketing should result in a mutually satisfying exchange between all parties involved (Nel & De Beer 2022: 300).

The marketing landscape has changed dramatically with technological advances over the last few years. Print media have largely been replaced by the internet and social media. Marketers must understand the needs and wants, perceptions, and buying behaviour of their target markets.

Study the definition of Marketing as described in the prescribed textbook, Nel & De Beer 2022: 301-302.

2.2. Marketing Defined

Marketing consists of a variety of aspects two of which are sales and advertising. Study the definition of Marketing as described in the prescribed textbook, Nel & De Beer (2022:301)

2.3. Marketing Orientations

The role that marketing plays in any organisation is determined by the philosophy and orientation that is followed in the company. There are five approaches as an orientation that can be identified: production, product, sales, marketing, and the societal concept. (Kotler, et al:2016, pp. 9 – 11).

Study the marketing orientations as explained in the prescribed textbook, Nel & De Beer. (2022: 302)

The importance of the marketing concept can be summarised in four principles: (Nel and De Beer, 2022:302)

Long-term maximisation of profitability
Consumer orientation
Integration of all business activities focused on profitability and satisfying consumer needs demands and preferences.
Societal responsibility.

The disadvantage of the “pure” marketing approach is that it disregards environmental changes and problems and focuses on short-term consumer satisfaction rather than long-term well-being of the society.

2.4. The Need for Marketing

Marketing impacts on everyday life. Customers have needs and wants and the organisation or supplier provides the products. If the customers perceive value and believe that the product can satisfy their needs or wants, an exchange transaction takes place. Money is paid in exchange for the product received.

To successfully provide a customer with a product and a service, various gaps in the marketing process must be overcome. Study these gaps and make sure that you can provide a practical example for each one. (Nel and De Beer, 2022:302-303).

Refer to Activity 11.2 for an understanding of the gaps to overcome as part of the marketing process.

2.5. Marketing Activities

Study the three categories of activities in your textbook. (Nel and De Beer, 2022:304 - 305) You must be able to identify each type of activity in its category.

The categories in this instance refers to the types of activities involved to transfer goods and services between the producer (place of manufacture) and the place of consumption. The activities can be categorised as:

Primary activities: For example, actual transport to get the product to the end consumer..

Auxiliary activities: For example, ensuring that the standardization and grading of products are at the required levels, making it easier for the customer to buy the product, or the advertising and information transfer for customers to be aware of the product. (Can be perceived to be the value adding activities)

Exchange marketing activities: For example, refers to the transfer of ownership from one party to another. Selling is a very important task of marketing.

2.6. The Marketing Process

The marketing activities form part of the marketing process that is managed by the marketing department. The process needs inputs from the other functions and role players as part of the business to ensure the maximum advantage for the organisation.

Study the marketing process in Figure 10.1 of the textbook. (Nel and De Beer, 2022:305 - 306).

Marketing management takes decisions about the four variables known as the four Ps.

The product itself
The place where it is to be sold (distribution of the product)
The promotion, or marketing communication methods to be used to inform the consumer
The price of the product, which should reflect its value to the consumer

2.7. The Marketing Environment

It is strategically important for organisations to interact with their business environments. Interaction with both the internal and external environment is required to achieve the overall business strategy.

There are four strategic roles that marketing management must play in this regard (Nel and De Beer, 2022:307):

They are responsible for managing the product and market relationship in line with the overall mission and strategy of the organisation.
They must ensure that top management understands that successful marketing requires an understanding of the needs of the customers to satisfy those needs. The business cannot decide what the customer wants.
They act as a strategic interface between the business and its external market environment. Successful organisations are externally oriented, and they must focus on their consumers, competitors, and changes in the market.
They must highlight new ideas and marketing opportunities to corporate planners and assist to include the four Ps of marketing in the total strategy.

3. Consumer Behaviour and Marketing Research

In this lesson, you will learn about all the factors influencing the buying decision-making process of consumers. You will also learn about the steps of marketing research and the reasons for

3.1. Consumer Behaviour

Consumers are end users that buy a product for self-consumption. They buy products and services to satisfy a need or a want. Consumers can be individuals or groups and organisations.

For an overview of consumer behaviour, starting from the stimuli, showing marketing, environmental, individual and group factors that can influence behaviour before decision making takes place,

Study the following figure for a better understanding of the influences on consumer behaviour:

Source: [Online] Available at: [Accessed: 10 August 2023.

1. Individual factors influencing consumer buying decisions (Nel & De Beer, 2022: 308 - 310):

Motivation starts with needs and wants of individuals.
Perception refers to a process of receiving, organising, and assigning meaning to information detected by all five senses.
Learning ability refers to a combination of motivation, attention, experience, and repetition.
Attitude refers to a specific feeling that an individual experiences about an object
Personality refers to those psychological characteristics of people that determine and reflect their reaction to environmental influences
Lifestyle refers to individuals’ ways of living, it describes behaviour and purchasing patterns
Personality refers to motives and attitudes that influence lifestyle

2. Group factors influencing consumer buying decisions (Nel & De Beer, 2022: 310 - 311):

Figure 10.3 of Nel and De Beer, p. 310 provides an overview of group factors. They include:

Culture refers to a complex system of values, norms and symbols that have developed over a period that all its members share
Family refers to members live in close contact with one another – act as decision-making unit
Reference groups refer to two or more people who interact with each other to accomplish a goal, e.g. co-workers, hobby groups.
Opinion leaders refer to a person acting as the go-between a two-step flow of communication.
Person interprets and evaluates information, relay acceptance or rejection of the message to other consumers in the target market

3. The buying decision-making process (Nel & De Beer, 2022: 311 - 312):

For details about the steps in the process, refer to par. 10.3.3 in your textbook. It is important to understand the types of related decisions that form part of the purchasing decision. (Nel and De Beer, 2022:311 - 312).

3.2. Marketing Research

Marketing research is the process of gathering, analysing and interpreting information about a market, product, or a service. It helps marketers to make informed decisions about their product or offerings to satisfy customers’ needs in the market.

Market research helps marketers to not only identify opportunities in the market, but it also improves their understanding of the marketing process and they use the market information to calculate market potential and to do sales forecasting.(Nel & De Beer, 2022: 313)

The market potential is when they work out how big the market is. Forecasting of sales is done to calculate how big a slice of the market the organisation can obtain.

Study the steps in the marketing research process as set out in Figure 10.4 of your textbook (Nel & De Beer, 2022:315) and the role of marketing research in decision-making. (Nel & De Beer, 2022: 313 - 316)

4. Market Segmentation

In this lesson, you will learn about the reason for market segmentation, the pre-requisites for segmentation, the bases of segmentation, selecting a target market and then the approaches to market targeting.

Prescribed reading:
Nel and De Beer, 2022. Ch10, pp. 316 - 322.

4.1. Segmenting the Market

When organisations satisfy their customers’ needs it becomes easier to achieve their own goals. For organizations to achieve maximum customer satisfaction, it is important to divide the market into different groups of customers with similar, but distinct needs, characteristics, and behaviour. This process is referred to as market segmentation.

The organisation identifies various segments that consist of groups of people with their unique characteristics and own needs and wants with regard to the products and services that they require. The organisation must then choose a specific segment to pursue by providing the relevant products and services. This process of choosing the specific segment to pursue is referred to as market targeting.

Study the benefits of segmenting the market as well as the prerequisites for market segmentation that will help the organisation determine if the segments meet the criteria to be pursued. (Nel and De Beer, 2022:316 - 317).

Bases for segmenting consumer markets

There are different variables to apply when segmenting the market. These variables can be classified as geographic, demographic, behavioural and psychographic.

Examples of the different bases of segmentation are (Nel & De Beer, 2022: 317 - 319):

Geographic segmentation, e.g. Johannesburg, Winelands
Demographic segmentation, e.g. age, income, education level
Behavioural segmentation, e.g. purchase occasions, benefits sought, user status
Psychographic segmentation, e.g. social class, lifestyle, personality

It is important to be able to identify and explain each of the behaviours as described in behavioural segmentation.

The pre-requisites for market segmentation will help the organisation to determine if the segments meet the criteria to be pursued and these include the following: (Nel and De Beer, 2022:317)

The size, purchasing power and potential profit of the segment must be measurable
The market segment must be large enough to make it profitable.
It must be accessible which means that the marketer must be able to reach the market segment with their offerings and strategies.
It must be actionable which means that the marketer can develop separate market offerings for different market segments.
It must be differentiable which means that different segments must have heterogeneous needs.

Market targeting

The criteria for targeting a specific market is important (Nel and De Beer, 2022:319 - 322).

Criteria for selecting potential target markets include the following:

Segment size and growth possibilities
Attractiveness and potential profitability
The resources and skills of the organization
Compatibility with the organisation’s objectives
Cost of reaching the target market

Targeting market segments

Study (Nel & De Beer, 2022: 321) to understand the approaches to market targeting. There are three approaches:

Concentrated targeting is aimed at one market segment only.
Differentiated targeting focuses on two of more market segments. Develop a marketing strategy for each segment and try to satisfy the diverse needs of each segment,
Undifferentiated marketing focuses on the total market with one basic marketing offering. They ignore the differences that are found in the market.

4.2. Market Targeting