Chapter 11 Marketing Function Grade 11+12

Page 1: Marketing Function Overview

• Learning Objectives:

  • Define and elaborate on the 4 traditional Ps of Marketing (Product, Price, Place, Promotion).

  • Explain the purpose and implications of the Consumer Protection Act (CPA).

  • Evaluate the role of International Marketing (advantages and disadvantages).

  • Discuss the use of Technology in Marketing (E-Marketing, social networks).

  • Link marketing concepts with intellectual property.

  • Develop and evaluate marketing strategies for goods/services.

  • Examine the importance of ethical behavior and regulations in marketing.

Role of Marketing

• Strategic Role/Aim of Marketing: Essential for business success, influencing revenue and brand loyalty.

• Impact of CPA on Marketing: Ensures businesses operate fairly in the market.

Influences on Marketing

• Psychological factors (motivation, perception).

• Socio-cultural factors (social class, family influence).

• Economic factors (income levels, economic conditions).

• Branding: Importance of a strong brand, brand extension, brand stretching, and building brand value.

• Service Marketing: Focus on people, process, and physical evidence in service delivery.

• Ethical Marketing: Understanding ethical vs. unethical marketing practices and the impact on brand image.

• Franchising: Advantages and disadvantages for franchisors and franchisees.

Page 2: Table of Contents

• Terms and Definitions

• The Role of the Marketing Function

• Understanding Marketing

• Traditional Ps of Marketing

  • Product

  • Price

  • Place

  • Promotion

• Additional Ps: People, Process, Physical Evidence

• Advertising

• Unethical Marketing Practices

• Consumer Protection Act in South Africa

• International Marketing Definitions & Evaluations

• Factors Influencing Consumer Buying Decisions

• Franchising

• Bibliography

Page 3: Terms and Definitions

• Brand Name: Name given by a producer to a product.

• Target Market: Specific group of consumers targeted by marketing efforts.

• Pricing Policy: Strategy for setting product prices based on costs, demand, competition.

• Costs: Amount required to obtain a product.

• Mark-Up: Amount added to costs to cover overhead and profit.

• Substitutes: Alternative products serving the same need.

• Profit Margin: Portion of selling price contributing to gross profit.

• Bait: Tactic to attract customers with low price claims.

• Skimming: Setting high initial prices, gradually lowering them.

• Monopolistic Competition: Firms react to competitors’ pricing strategies.

Page 4: The Role of the Marketing Function

• Understanding Marketing: Activities promoting the sale of products and services. Key for market awareness, customer loyalty.

• Indicators of Successful Marketing: Market share increase, customer loyalty, ethical advertising.

Marketing Functions

1. Identify customer needs and values.

2. Share customer insights with production teams.

3. Promote products to potential consumers.

4. Gather feedback for improvement.

5. Enhance customer experience.

Page 5: Benefits of Effective Marketing for Businesses

• ZABA's Marketing Benefits:

  • Brand awareness through varied channels.

  • Targeting appropriate customers with relevant messages.

  • Excellent service leading to repeat business.

  • Leveraging digital marketing and competitive pricing.

Page 6: The 4 Traditional Ps of Marketing

Product

• Definition: Goods/services offered to satisfy consumer needs.

• Considerations:

  • Quality and features to meet expectations.

  • Branding for differentiation.

  • Attractive packaging and lifecycle management.

  • Product variations catering to market needs.

Example for ZABA: Diverse clothing lines for varied customer needs.

Page 7: Product Development Policy

• Importance: Essential for staying competitive and meeting customer demands.

• Types of Products:

  • Industrial Goods: Used in production.

  • Consumer Goods: E.g., convenience, shopping, specialty, unsought goods, and services.

Page 8: Types of Consumer Goods

Convenience Goods

• Characteristics: Low-priced, frequently purchased with minimal effort.

• Examples: Bread, soft drinks.

Shopping Goods

• Characteristics: Compare prices/qualities, more expensive.

• Examples: Clothing, electronics.

Specialty Goods

• Characteristics: Unique, specific brand name commitment.

• Examples: Branded clothing, jewelry.

Unsought Goods

• Characteristics: Not regularly purchased, immediate need.

• Examples: Funeral services.

Services

• Characteristics: Intangible, provided by service providers.

• Examples: Hairdressing, garden services.

Page 9: Importance of Product Development

• Key Benefits: Meeting needs, innovation, market expansion, profitability.

• Product Design Steps:

  1. Idea generation.

  2. Concept development.

  3. Design and prototyping.

  4. Testing and evaluation.

  5. Product launch.

Page 10: Product Life Cycle (PLC)

• Stages:

  1. Introduction: Launch phase with high costs, minimal competition.

  2. Growth: Rapid sales increase, profit margins improve.

  3. Maturity: Market saturation, profit stability.

  4. Decline: Sales decrease, decision on continuation or withdrawal.

Example for ZABA: Management strategies according to PLC stages for clothing lines.

Page 11: Stage Details of Product Life Cycle

Growth Stage

• Characteristics: Gaining market acceptance; brand loyalty starts.

• Strategies:

  • Product enhancement based on feedback.

  • Pricing maintenance to attract more customers.

Maturity Stage

• Characteristics: Competition increases, price wars.

• Strategies:

  • Product innovation for new market segments.

Decline Stage

• Characteristics: Sales and profits decline.

• Strategies:

  • Product discontinuation or rejuvenation through marketing.

Page 12: Pricing - Definition and Considerations

• Definition: Amount paid by customers reflecting product’s perceived value.

• Considerations:

  • Cost analysis, competition, perceived value, discount strategies.

Example for ZABA: Premium vs competitive pricing.

Page 13: Pricing Techniques

1. Cost-Based Pricing: Based on production costs plus profit margin.

2. Mark-Up Pricing: Percentage added to cost.

3. Customer-Based Pricing: Price based on what customers are willing to pay.

4. Competition-Based Pricing: Aligning prices with competitors.

5. Promotional Pricing: Temporary price reductions to stimulate demand.

Page 14: Importance of Pricing

• Reflects Value: Pricing informs customer value perception.

• Factors Influencing Pricing: Input costs, demand fluctuation, market structure.

Page 15: Distribution/Place - Definition and Considerations

• Definition: Channels through which products reach consumers.

• Considerations:

  • Selection of distribution channels, supply chain efficacy, retail environment impact.

Page 16: Distribution Policies and Channels

• Distribution Policies: Ensure products reach target consumers effectively.

• Direct vs. Indirect Channels: Control over marketing vs broader market access.

Page 17: Intermediaries in Distribution

Role of Intermediaries:

• Finding buyers, product promotion, expanding market reach, efficient logistics, lower costs.

Page 18: Promotion - Definition and Importance

• Definition: Communication strategies to promote products.

• Considerations:

  • Advertising, public relations, sales promotions, personal selling, and social media marketing.

Example for ZABA: Campaigns via social media and fashion shows.

Page 19: Marketing Communication Policy Components

1. Sales Promotion: Short-term strategies for immediate sales boosts.

2. Personal Selling: Direct interaction enhancing customer relationships.

3. Advertising: Paid non-personal communication across various media.

4. Publicity: Free promotion through media coverage.

Page 20: Additional Ps of Marketing

People

• Importance of employee interaction in service delivery and customer satisfaction.

Process

• Ensuring efficient service delivery through standardized procedures.

Physical Evidence

• Tangible aspects supporting service quality (store atmosphere, product packaging).

Page 21: Advertising Regulations

• ARB Role: Ensures advertising upholds ethical standards.

Ethical vs Unethical Marketing Practices

• Discusses the importance of maintaining integrity in marketing campaigns.

Page 22: Implications of the Consumer Protection Act (CPA)

• Protects consumers from unfair marketing practices, promotes competition, and empowers consumer rights.

Page 23: International Marketing: Definitions and Evaluation

• Advantages and Disadvantages of expanding into international markets, focusing on cultural adaptability, political/economic risks, and logistical challenges.

Page 24: Consumer Buying Decision Influences

1. Psychological Factors: Motivation, perception, learning, beliefs.

2. Socio-Cultural Factors: Impact of social class and family.

3. Economic Factors: Consumer purchasing power and economic conditions.

Page 25: Segmentation Methods (LSM)

• Living Standards Measure (LSM): Classifies based on living standards, offering insights into targeting strategies.

• Other segmentation methods include demographic, psychographic, geographic, behavioral.

Page 26: Branding

• Importance of branding, brand extension, brand stretching, and creating brand value.

Page 27: Franchising

• Advantages and Disadvantages: Explores benefits of rapid expansion vs quality control issues in franchising.

Page 28: Conclusion

• Encourages businesses to adopt various marketing strategies and frameworks to adapt to market changes and consumer expectations.