CHAPTER ONE

UNDERSTANDING MARKETING AND INFORMATION CONCEPTS

Customers buy for their reasons not yours
Orrel Ray Wilson.
The most important adage and the only adage is, the
customer comes first, whatever the business, the customer
comes first.
Kerry Stokes.

LEARNING OUTCOME
The learner should be able to explain what is marketing.
The learner should also be able to discuss the main concepts related to
information.

What is marketing?
Marketing is normally confused with selling, advertising and promotion which are
fundamentally subset of marketing. Marketing is the most critical thing in business
management and entrepreneurship. However, it is the least understood as indicated: many
people think it is selling, advertising and promotion. The actual meaning of marketing
can be easily subsumed by the peripheral meanings. Marketing is a very broad term.
According to Boone and Kertz (2006) marketing is the process of planning and
executing the business conception , pricing, promotion, and distribution of ideas, goods,

services, organizations and events to create and maintain relationships that will satisfy the
individual and organizational objectives.
From the above definition, the following can be noted:

Inclusion of ideas in marketing as they crystallize in the mind of the entrepreneur.

The product creation is part of marketing.

Setting of prices for the products and services goes together with marketing.

Products and services promotion is in essence marketing.

Distribution to retailers and wholesalers is marketing.

Follow-up and after-sale service are critical in marketing.

Marketing therefore, is the total of the above marketing and entrepreneurial activities.
This definition takes us to next question: who is a marketer?
Who is a marketer?
The definition above on marketing introduces several people in the marketing
industry. A marketer in essence is everyone in the organization in whatever capacity.
Even though there is a marketing and public relations department tasked to do the
marketing duties, marketing in the other hidden duty for all other employees such as
sweepers, cleaners, staff, management and the board. Their marketing antics
contribute to the success or failure of the organization.
When does marketing start?
If marketing is the duty of all the people in an organization, then marketing is a
life long process for the particular product or service. It starts before the actual
manufacturing of the product. Just like we say life begins at conception, we can say
that marketing starts at the time of the conception of the business idea hence the
slogans petrol station coming soon, supermarket at your doorstep soon, etc.
Once marketing has started, it continues throughout the products life. It enables
the entrepreneur to know and understand the customer needs. As such, the producer is

able to respond through packaging the goods according to customers needs,

purchasing power and market responses.
PUBLIC RELATIONS
What is public relations?
History
Edward Bernays, a nephew of Sigmund Freud is widely recognized as the father of
public relations. After graduation from college, he opened the first recognized publicrelations firm in 1919. They called it public relations as a way of protecting it from
the negative connotation of propaganda, an epithet of contempt, hate, ill-repute and
malice.
Definition
Public relations is the maintenance of good public image for the organization and
workers. It is the cultivation of the favorable working relations through the available
communication channels and tools. Due to the intense competition in the world today,
organizations need to have an edge that makes them stand out from the crowd by
making the organization and its products appealing and interesting to both the public
and the media. The role of public relations is quite broad and includes the following:

The building of awareness and favorable image for the company and its
clients.

Monitoring and evaluating the various comments about the organization from
outsiders and insiders so as to mend the wrong impressions created.

Management of crises threatening the company and its products.

Building goodwill among the organizations targets and partners.

Educating the public and the world on how the company works.

Showcasing the company at its best to the public.

Helping the company to achieve its full potential.

Building rapport with management, employees, customers, investors, voters

and general public.

From the public relations definition and its functions, we can gather that public relations
is a very broad topic. In organizations, public relations can come under the title of public
information or customer relations.

SUMMARY
Public relations are service providers to the organization. They give the public a
better view of the company or organization, its products and how they operate. To
a beginner, they may seem as if they are the same but the reality from our study is
that they are different and are set to fill the different gaps in the organization.

REVISION QUESTIONS
1. Discuss the concepts marketing and public relations.
2. What are main components of marketing?
3. What are the functions of public relations?
4. Explain the similarities and differences of marketing and public relations?
5. Explain the importance of marketing of library and information services.

CHAPTER TWO
MARKETING PRINCIPES
Just as people instinctively know the law of gravity, they are
aware of the fundamental principles of marketing. Unlike the
law of gravity which is hard to deny, many small business
owners often neglect to apply core marketing principles to
attract clients.
Charlie Cook.

LEARNING OUTCOMES

The learners should be able to discuss the prerequisites to effective

marketing.

Learners should be able to explain marketing principles and its

relation to library and information science.

INTRODUCTION
Every discipline has basic principles that govern its operations. This is the same way with
marketing. There are some basic principles which govern operations of entrepreneurs and
clients. These principles lay the foundation of strategic marketing.
Strategic marketing
This is marketing focused at achieving objectives. The objectives are usually measurable
and achievable.

The following strategic questions are important in establishing the place of marketing
principles in library and information science:
What are the information resources and services to be offered?
What are the vision, mission and value statements of the library?
Who are the targeted clients?
What are the marketing strategies for these services and products?
Who are the promoters of the products being offered?
How will the services be delivered to the clients?
What are the conditions for service and product delivery?
How will the services be sustained?
What are the ways of ensuring customer satisfaction and expectation?
The above questions will lay the basis for successful marketing. Many successful
businesses use different marketing techniques according to their clients, environments,
vision and mission statements.
Among the most popular marketing technique for information specialists is
attendance to forums and conferences for information providers. Such forums offer ideas
and recent marketing techniques. Research findings are discussed in such forums.
However, the forums should portray some semblance to the clients requirements.

MARKETING PRINCIPLES
The following marketing principles enhance information marketing and promotion:
1. Clients
Clients goals and concerns are the reasons the library is open. Clients in the library and
information centres buy or borrow the products and services to meet their needs.
To attract prospects and clients, the librarian and information manager should start
with solving clients problems as the catalyst for opening up the library. They require

prompt service, relevant and current information. The information should also be well
packaged to suit their needs.
2. Target your market
There is always a specific group of clients willing to buy products and services. The
promoter, as a principle, should always focus on people who are interested with his/ her
products. For instance, an undergraduate, post graduates, faculty members or researchers
in cases of libraries and information centres. Targeting other clients would be a waste of
time. However, a book seller can target all the clients from the youngest to the oldest
unlike an academic library; a public library can target a cross section of clients regardless
of their age and literacy levels.
The marketer should be able to picture his/her ideal buyer, the population of the
clients, concerns and motivation. Such information would become handy in identifying
marketing tactics that attract the clients.
3. Value demonstration
The marketer and the producer should be able to demonstrate value to their clients.
Clients become dependable clients only after the product manufacturer or service supplier
convinces them of the value of the product and service they are buying. Clients need to
feel confident that the products and services will satisfy their needs, for example, is
library service worth the time? Are the library materials and resources useful, relevant,
accurate and up-to-date?
Once these questions are answered, the clients will buy the products and services.
Selling of information and ideas is a difficult task unlike selling tangible goods and
products. For instance, a web designer needs to provide tutorials on how to plan a
website.
4. Develop your network
This refers to developing a network of dependable clients. Of course, becoming a
dependable client requires the customer to have developed trust out of the dependable
services and materials he has acquired over time.

If suitable strategies are adopted, the marketer can develop a network of several
clients. An example of a good strategy is to get network of prospective clients through
motivation. Selling information requires a lot of motivation to the clients, for example,
packaging information and sending it online to the users and publishing articles on newly
acquired materials for the users.
5. Build relationships
Customers and clients like buying from the sellers and suppliers they know and trust. In
fact, attracting clients is more difficult than selling to a repeat client. Building
relationships can be enhanced through regular newsletters, frequent training and
education, one need to frequently keep in touch and not being a disconnected supplier or
a mobile subscriber who cannot be reached when wanted.

CONCLUSION
Marketing brings organizational change through imparting values to the clients.
The application of marketing principles puts the library or organization in a
strategic place among the customers. They give additional value to the library. Key
among the principles are:
Clients recognition
Market target
Value demonstration
Network development
Building relationships

REVISION QUESTIONS
1. Critically analyze the importance of strategic marketing.
2. Discuss five principles of marketing products and services.

CHAPTER THREE
THE MARKETING MIX DECISIONS
Strategy and timing are the Himalayas of marketing.
Everything else is cat skills.
Al Ries.
Marketing is not an event but a process - it has beginning,
middle but never an end, for it is a process. You improve it,
perfect, change it, even pause. But you never stop it
completely.
Jay Conrad Levinson.

LEARNING OUTCOMES

The learner will be able to identify the components of marketing

mix.

Learners should be able to highlight benefits of branding.

The learner should be able to list the determinants of quality.

INTRODUCTION
Marketing mix is determined as a set of controllable variables. It basically refers to the
levels a firm uses to influence the target market. Marketing mix is determined by the
following:

1. Profit levels- they depend on the volume of the sale.

2. Customers- they are diversely distributed. However, this should not interfere
with their satisfaction levels because they all fill a niche in the market.
3. Competition- this is the characteristic of a vibrant market. The information
industry is very competitive.
4. Purchasing power- this is the customers ability to buy the products and services
in the market.
5. Integration- market mix is about integration. Each diverse segment supports the
other segment either directly or indirectly.
6. Perishability of goods and services. Information in one of the highly perishable
commodity.

MARKETING MIX
Marketing mix is hinged on the principle of 4Ps as outlined below:

Product

Place

Price

Promotion

1. Product. This refers to the goods or services being offered for sale to the clients in the
market at any time. They include consumable and consumable goods, services such as
transport, hospitality, medical care, library and information services. However, the
product is not sold just as it is. It requires certain levels of refinements such as polishing,
cleaning, painting, icing, salting and cooking. Library and information science products
require:
Publishing
Printing
Binding
Editing

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 Repackaging according to different users

Illustrating
Book-marking
Paging
Timeliness to avoid perishability.
Relevance and accuracy among many others.
Information products have to be strategically priced according to the quality
content and users level. Its price is manipulated according to the brand name, for
example, books and information materials from Oxford, Cambridge and other
multinational publishers are highly priced due to the high regard its clientele have for it
unlike books from small upcoming publishers.
2. Pricing. This represents the cost of the materials in reference to its quality and value.
The price is influenced by the customers purchasing power, the competitors potential
and the companys profit margin level. This is the sacrifice the customer has to pay for all
the package of benefits the producer puts into the product.
For example, all the packages and many more mentioned in No. 1 (product) for
provision of library and information services such as editing and printing. The cost of
production affects the profit margin. Other factors that affect pricing of products are:
Desire for customers for high quality goods against low prices.
Shrinking economies that affect customers purchasing power.
Competition from other sources
Discounted prices from multi-national companies
Global market and available markets.
3. Place/ Distribution. This is the locality where the products are found. It involves
logistics such as distribution channels, warehouses, supermarkets, wholesalers, retailers,
and hawkers, transport avenues such as land, air and water.

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The issue of the place and distribution also affects product and pricing. It affects
products because the nature of the product will determine its place and distribution
channels and price.
Library and information science products require well positioned distribution
channels. If the channels are in remote places, then the market divides. Literacy level
which is normally high in towns is a strong determinant of information and library
materials.
4. Promotion. Promotion refers to product exposure to the public and users. Its activities
include advertising, sales promotion, personal selling and public relations. Promotion has
become a highly strategic developmental tool in modern marketing. The following are
some modern forms of strategic promotion:
Use of the internet and the WorldWide Web (WWW). It is a very effective
strategy since it has the capacity to capture a wide market and to conquer the
geographical divide.
Lobbying especially product standardization, safety and security issues. This
eliminates quacks and other people offering sub-standard products. It also results
in less taxation by the government.
Personal visits and calls. It is common with hawkers, newspaper and book
vendors.
Loyalty maintenance through special offers.
Sponsorships, competitions, sports and cultural organizations.
Outreach programs especially to undiscovered and virgin markets.
Digital TV and its multi-channels have a place and language for any user.

QUALITY ASSURANCE IN MARKETING MIX

Quality assurance differentiates between good and bad service. The service industry is
very competitive and costly. Quality service in libraries and information centres is
characterized by three main dimensions:

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 Technical quality. This refers to the technical training of the staff, workmanship
on the available resources such as books and CDs, flexibility of the resources and
adaptability.
Functional quality. This relates to the psychological interaction between the
buyer and the seller, for example, user friendliness of the materials, adaptability to
the users situations and applicability. Are the resources easily adapted and
applied to the users situations? Are they tailor-made, oversize or undersize? Are
they friendly? Are they ripe for consumption?
Corporate image. This is the conception the consumers have about the
organization e.g. poor service, good service, etc.

What are the determinants of quality assurance?

Library and information services require quality service. It is one of the fastest
growing industries and therefore has a lot of competition. Secondly, the world is now in
the information age where the economy is being driven by how much information one
has at his disposal. However, there are several determinants of quality service of products
related to library and information. Examples of such determinants are:
Reliability- how dependable is the product as a source of information.
Responsiveness- how well and quickly does it respond to the requests and
inquiries.
Understandability and comprehensibility- this is dictated by the level of
content and language used. If the content is simplified and the language is simple
and clear, such as the one used by the newspaper editors, then comprehension is
easy and application becomes easier unlike when if it was highly technical and
scientific for the layman to understand.
Credibility. How honest and trustworthy is the source? Information users do not
want to depend on rumours and speculations. They want factual information.
Security and safety of information particularly confidential information. Users
prefer sources and facilities which can ensure the security of their private data.

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 Competence of the staff. This is their skills levels that enable them to manipulate
the information systems at their disposal. Their competence will determine how
fast and efficient they will produce quality service or poor service.
Courtesy and decorum. This is the general behaviour of the staff to the users, for
example, polite, approachable, respectful friendly, sociable and co-operative.
Again, this will determine how sufficient the service will be. It will determine
whether the users would want to relate with them or avoid the services and library
altogether because of the poor services.
Accessibility. This is the level of accessibility of the system at any place.
Accessibility in the modern time disregards geographical boundaries and barriers
due to the vast internet connectivity. If a system is still traditional and bound by
geographical barriers, then it is considered low service with no sense of quality.

BRANDING
Quality service today is associated with branding. Branding is associated with quality
service because the producer, marketer and promoter consistently promise to deliver
quality service. Their names, symbols and packaging give the aura of quality to the
customers in the users perception and mind.
Some multi-national and local companies have already branded themselves as
quality service givers. Examples of such companies in the information industry are:
Oxford publishers- associated with production of quality atlases and maps and
other reading materials.
Citizen radio and TV Citizen- branded as a service provider of local content
productions in both radio and TV presentations.
Nation and Standard newspapers- have both curved a niche for themselves in the
Kenya newspaper industry.
Jomo Kenyatta Foundation as a producer of school textbooks.
Kenya National Library Service as a public service provider of reading materials
and promotion of literacy and reading culture among all people.

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Benefits of branding
Customers are able to choose from among competing products and services.
The customers are able to identify themselves with image of their products.
Regular members are conferred with incremental points.
The producer aspires to retain the market through continuous improvement.
The price monotony is withheld and reduced.
Strong branded products ensure better and profitable sales even at very lean times.
Builds a strong and dependable market share in profits, volumes and control.

Reasons for product failure

Several reasons contribute to product failure in the market. Among the reasons are:
Misunderstanding of the market.
Poor market efforts or no efforts such as promotion.
Change phobia- fear of change.
Poor products and services.
High product cost against poor purchasing power.
Inability to repackage and package according to customers needs.
CONCLUSION
Poor planning and marketing strategies.
This
looked expertise.
at marketing mix. Marketing mix and segmentation has been
chapter
Lack ofhas
technical
clearly defined. Modern forms of dealing with strategic market mix have been
Adaptation problems.
identified as:
Use of internet
Lobbying
Personal visits
Loyalty maintenance
Outreach programs
The issue of quality assurance and improvement in a market mix has been discussed.
Characteristics of quality assurance in a market mix such as technical quality,
functional quality and the corporate image have been highlighted. This is in addition
to the determinants of quality service such as reliability, responsiveness, credibility,

15

competence and courtesy among others. Branding and its benefits are crucial factors in

REVISION QUESTIONS
1. Identify and explain the marketing mix variable.
2. What are the basic price influences?
3. Discuss the interrelatedness of the 4Ps.
4. What are the determinants of quality service?
5. Explain some of the benefits of branding of library and information
products.
6. Discuss the main causes of product failure in the market.

Developing Specific Competitive Advantage

Objective: understand how the organization can be develop competitive advantage
through market segmentation

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Introduction
The market can try to match the cost of producing particular benefits with the value to
customer. Ideally, the market should identify benefits of most value to the customer,
which cost least to produce.
Market segmentation should be done to help the organization enhance their
competitiveness through focus on dual, result oriented goals by.

Delivery of ever improving value to customers, resulting in marketplace success.

Improvement of overall organization performance and capabilities.

Market segmentation
Definition: subdivision of market into distinct and increasingly homogenous subgroups of
customers. Reasoning.

Better satisfaction of customers needs as one solution wont satisfy all the

customers.
Growth in profit as some customers will pay more for certain benefits.
Revenue growth a result of attracting more customers.
Customer retention as the company is able o deliver higher levels of satisfaction.
Targeted communication people in the target market share in their interest.
Innovation organization is able to better address the customers successfully.
Segment share firms able to implent a focus successfully.

Identifying the segments

This should be on the base that are appropriate to the market. Sometimes one or two
bases can be used.
1. Geographically which involves dividing the markets into regions and tailoring the
marketing , mix according e.g commercial radio stations education institutions
2. Demography sex gender, income, FLC occupation e.t.c
3. Psychographics segmentation /lifestyle.

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It is based on how people themselves an d their subjective feelings and attitudes

towards a particular product or services.

Taylor nelson identities 3 main groups:

a) Sustenance driven group.
- belongers seek undisturbed family life. They are conservative,
-

conventional, and rule followers.

survivors are strongly class .conscious, and community spirited, their

motivation is to get by
- Aimless these are young unemployed who are often anti authority.
b) Out directed group.
- The balance of belongers these are old whose motivation is the day to day
-

existence.
Conspicuous consumers are materialistic, pushy, .motivated by
acquisition, competition and getting ahead. They are pro-authority, obey

law and keep order.

c) Inner directed group
- Self explores are motivated by self expression and self realization.
- Social resistors caring group , concerned about fairness and social values.
- Experiments are ,highly individualistic, are motivated by fast moving en
joyment.
4. Behavioral i.e. toothpaste reduces the risk of tooth decay- perception of rusk is
often very subjective. Risk can affect the way the product is positioned e.g food
studies indicated that famine image of wine as a risk inhibiting the drinking of
wine in certain segment. Hence repositioning of Bulgaria
Occasion buyers segmented according to the occasion when they use a product.
Increasingly usage of coke by suggesting it can be taken over breakfast. Also
cornflakes can be eaten at anytime of the day.
User rate-segmentation according to types of users .
a) Heavy users
b) Medium users
c) Light users.
Segmenting an industrial market
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Bases for segmenting an industrial market.

a) By geographic location where related industries may be clustered in one place.
b) Type of business i.e nature of the customers business.
c) Use of the product i.e organizations may buy a car for use by its salesmen, for
delivery etc
d) Type of organizations e.g organizations in an industry may have certain needs in
common.
Segment validity, characteristics of a good market segments.
Cant it be measured, it is easy to conceive the market, is it easy to measure
the market.
Is it enough substantial to generate profit.
Cant it be reached is there a way of getting o the potential customers

through he organizations promotion and distribution systems.

Is it table if the organization is to commit its resources will the market

still be there or will it disappear next year.

Cant it respond differently
Can it be reached profitability i.e cost effectively?

Segmentation attractiveness:
A segment is attractive if besides being valid, it has high barriers to entry and
viable relationships can be, established between customers and firm. The most
attractive segments are those whose needs can be met. Some of the factors to
consider when valuating the attractiveness of a segment in clued:

Completive factors like intensity , quality of competition, threat of substitute ,

and degree of differentiation

Environment factors like exposure to economic situation, degree of
regulation, social acceptability,

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Market factors like sizes of the segment, segment growth rate, predictability,

bargain power of customers, seasonality of demand. E.t.c.

Economic and technology factors include barriers to entry and exit,
bargaining power of suppliers, level of technology, investments required,
margins available e.t.c

Trends; in segmentation

There is greater use of soft variables in segmentation (e.g lifestyles attitude).

The segmentation variables are use for different purposes.
Data mining pattern in statistical data speak for themselves.
There is greater use of primary and secondary segmentation variables
A closer connections between segmentation and new product development
Computer modeling to discern the optimal addition to product lines..
Consideration of the segments response to completion.

Target markets
A target is a market or segments selected for special attention by an organizations policy
options:

Undifferentiated marketing is where the company approaches the entire market

with the same marketing programme.

Concentrate marketing is where the company focuses on one segments of the

market./
Differentiated marketing is where a company approach the entire market with

the same marketing program

Customized marketing is where a company tailors its products and services to
the specific requirements of the customer.

Micro marketing or focus/niche marketing is a move from traditional mass

marketing to micro- marketing. As marketer explore ways of gaining competitive
advantage there are trends bringing about this:
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Ability to create large number of product variants without the need for a

corresponding.
Growth in minority lifestyles creating markets niche brands.
Fragmentation of media services mass media cannot guarantee market

dominance.
Advance IT enabling highly selective and personal communication.
Micro marketing is made possible by mass customization. This enables huge
economies of scale and tailoring of products to customers

Market positioning
Positioning is the act of designing the company s offer and image so that it offers
a distinct and valued place in the target customers mind.
According to Theodore Levit , writing in HBR (1965), No. bank can be the best
bank for all customers. A bank must choose, it must examine its opportunities and
take a position in a market. Positioning aims to help customers know the real
difference between competing banks so that they can match themselves to the
bank that can be of most value to them.
In segmentation, use of creative thinking is repute to big ideas to sign facts
growth opportunities. It involves thing out of the box thinking differently can
generate a new offering that are responsive to unmet needs.
Review questions
1. What is market segmentation?
2. Discuss the trends in segmentations?

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Strategy evaluation or appraisal

Learning outcomes

The students should be able to compare and contrast different strategic

options.
Be able to specify a clear rationale when choosing between alternatives.

The means and forms which strategy use are in face so simple, so we well known
by their constant repetition that it only appear ridicules to sound common sens
when it nears critics so frequently speaking of them with high blown emphasis.
Strategies are evaluated to assess whether they will help the organization achieve
its objectives. They can be examined according to a number of different criteria
which enables a choice to be made. Johnson and scholes narrow these to three b
road categories, suitability, feasibly and acceptability.
Clausewitz 1820
Suitability does- the strategy fit the situation of the firm? This depend on whether
it exploits company is distinctive competence; does it rectify companys
weakness?does it neutralize or deflect environmental threats ? Does it help firms
size opportunities? Does it satisfy the goals of organizations?
Feasibility can the strategy be implementing? Is their enough money? Can the
strategy deliver the goods and services specified in the strategy? Does the
company have access to technology? Materials and resources? Is there enough
time to implement the strategy? Is the strategy preferable to other, mutually
exclusive strategies?

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Strategies which do not make use of the existing competence, man power skills
to be acquired , might not be feasible.
Accepta
Bili ty- this depends on peoples expectations of it. It is here that stakeholders analysis can
be objctives brought in. stakeholders are able to exercise different degrees of power.

Financial consideration whether they help meet financial objectives for ROI,

profits, growth, EPS and cash flows.

Customers may object to the strategy if it means reducing customers services.
Environmental impact may cause key stakeholders to withhold consent.
Risk a strategy which change risk return profile, for whatever reasons, may not be
acceptable.

Marketing strategy is about the long term success of the organizations. It success or
failure must be measured by procedures that take account this long term view. A practical
evaluation system should note any short term setbacks in the plan but more importantly,
should be capable of setting these with long term content.
Financial versus non-financial measures.
Financial measure concentrate on profit, profitability, shareholders return, cash flow/
liquidity, share price , earning per share, return on sales.
Most of these traditions financial measure concentrate on profit it essential to the longterm survival of any business no matter what size or shape . however levitt said profit ia
requisite not a purpose of business. Profit is essentials to any business but it is the only
reasons why we are here.
Equally important is the shorter term, liquidity/ cash flow evaluation. Lack of long term
profitability is not a major reasons for the demise of business but cash flow problems

23

can even eliminate companies with a rising order book. Despite anything we have said
cash flow. Without this, there is no long term.
None. financial measures
Financial measures taken in isolation are unlikely to be sufficient to guarantee the long
term survival and development of the organizations. The organizations must develop if it
is to continue to adapt and remain in touch with its market place. Growth can be good and
a healthy influence but if pursued for own sake can lead to problems.
Sales maximizations and volume growth can often lead to serious declines in profitability
especially in highly competitive market places.
Directed and controlled growth bsed on qualified and detailed analysis of the market
place and pontential business oportuites can lead to a flouriching organizations.
However as Ed abbey has noted; growth for sake of growth is the ideology of the cancer
cell.
Multiple criteria
In every situation, the dependence upon a ingle criterion for evaluating and appraising
strategy is likely to be dangerous. This is because.

Organizations become inefficient from some point if single criteria is used.

Organizations fulfill multiple functions and have multiple goals, some of which
may be in conflict. It would be inappropriate to assess strategies purely on the
bias of any one criterion.
Organizations and strategies can best be regarded as living entities. If they follow
their markets will also need to be dynamic and evolving entities just to be able to
survive.
Let alone flourish, tie if no other factor, will always act you make certain
measure redundant and other measures important in new situations.

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Also conflict always arises in management of organization. these require that

different performance measure need to be traded off in different situations.
Te choice of the most appropriate measure for evaluation and appraisal will
depend entirely on the organizations situation and the marketing strategies ability
to balance internal needs.
Risk appraisal
Risk relates to the uncertainty about the future. Any forward-looking strategy is
risky because vents might not turn out as anticipated.
There are different types of risk.
Physical risk e.g fire, earthquakes, computer failure
Economic risk-relates the country may turn out different from what was

assumed.
Financial risk relates to the type of financial arrangement in the

decisions, and the quality of the cash lows.

Business risk includes the possibility that the strategy may fail because of
the new technology, competitors, customers reactions and potentials and

operational failure.
Political or country risk includes nationalizations, sanctions, civil war.

Political instability, if these have an impact on the business.

Information risk data may not be bearable

Strategy might be used on assumptions that the economy will be like this but this might
turn out to be wrong.
Risk appraisal strategy evaluation
Some strategies will be more than others. Data used for evaluating alternative strategies is
not very reliable because they are compiled. On estimates. The risk of an individual
strategy should also be considered in regards to the overall portfolio of investigates
strategies.

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Risk can be qualified in statistical terms where you calculated the expected value based
on probabilities. Sensitivity analysis can be done and thisd involves askig wjhat if
questions. Different values of variables can be changed to produce different scenarios for
the future. Prices can be increased by 5% , 71/2%, 10%, 121/2% 15% and the effect or
on profit and cash flow calculated.
Issues of responsibility and stakeholders response.
A strategy is perceived differently by different stakeholders. Stakeholders analysis
identifies the interest of different groups and their likely response. Each strategic option
poses risk to a particular interest of stakeholders. There is a risk that stakeholder. There is
a risk might responds in way to make strategy less attractive.
There is strategic gain from managing stakeholders relations there are heavy penalties
for failure to manage the relationship well. Studies indicates there is a correlations
between employees, customer and suppliers is important in enabling organizations to
respond to certain types of changes.
Issues of ethics need to be practices societal marketing concept a management
orientation tat holds key of the organization is to determine the needs and wants of target
and to adapt the organizations to delivering the desired satisfactions more effectively and
efficiently than competitors in a way that preserves and enhances the customer and
society well being.
Issues of ethics need to be considered.
There is need to evaluate each strategy on ethical ground. Ethic comes down to the
behavior of management and employees and acting ethically is good business. Ethical
issues touch ion the 4ps, of marketing.

26

Product,.-failure to inform customers risk association with product.

Pricing demanding and supply, there are problems odf cartels and chan ging

customers extra without disclosing.

Promoting dishonesty in aids
Place- concerns regarding relationship with intermediaries.

What is the best way?

Considering the area of evaluation and appraisal of marketing strategy the questions
always arise so what would one of the best marketing organizations be doing. A research
done by ICM and canfield school of management has identified the following factors as
those evidenced by the successful marketing company
1.
2.
3.
4.
5.
6.
7.
8.

Start at the top

Involve everyone in the organization in the marketing philosophies.
Be prepared for structural change.
Review marketing tactics (4ps). Do they work room the customers point of view.
Accept that a change is a way of life.
Focus on the customers, not competitions.
Keep the end user in sight: dont be distracted by the middleman.
Measure the success of the marketing approach and be able to demonstrate the
link between customers focus and profit.

Review questions
a) What is strategy evaluation?
b) Financial measure are an adequate strategy evaluation measure, discuss.

27

Strategy/Marketing Strategy
Learning outcomes:

Understanding the theoretical concept and meaning of the term strategy

Understanding the differ t levels of strategy

This it is war the victorious strategist only seeks battle after the victory has been won
whereas h e who is destined to defeat fights an d afterwards look for victory.
In warfare, first lay plans which will ensure victory, an d then lead your army to battle; if
you will no t begin with stratagem but rely on brute strength alone, victory will no longer
be assured!

Sun Tzu, 500 BC

Introduction
The word strategy has be come one of the most commonly misused commonly in
business writing. In its original form, the word strategy borrowed from Greek word
strategies meant the art of the general or commander-of-the armies.
Strategy in its strictest sense refers to means and not ends. Strategy is all about how the
organization will achieve its objectives the original meaning concentrated on how the key
decision ma king unit of the organization or the board was going to Marshall its resources
in order to achieve its stated objectives.

28

The use of the word strategy in the business literature arose when it become apparent
that, in sharp construct to economic models of perfect competition, companies engage in
the same activity and using the same technology often performed differently. Firms in the
same industry adopted different approaches to products, distribution an d organization al
structures. These differences within the same market environment came to be known as
strategies.
Since strategy I s about marshalling resources of an organization to match the needs of
the market place an d achieve the business objective, this cannot be a short-term activity.
Every organization is complex an d any change takes time to accomplish.
Strategic decisions like the general choosing his battleground will have long-term
implications. Strategic decisions such as which business area to enter, cannot b e reversed
at a moment notice. momentum has to be built over a planned period of time.
Strategy is not changed every Friday
Constant changes produce uncertainly, confusion, misdirection and wastage not results.
Tactics change al the time in response to changes in the market place caused by
customers needs. Tactical change causes no problem of uncertainty since the strategy (the
board overall direction of the organization) remain s constant.
Strategy is not a top management secret
Though it is a top management responsibility to define they should not keep it as a
closely guarded secret. Top management can be decide on the strategy alone but cannot
implement it alone. strategy is most effective when those to implement it only understand
it but also believe it an d can se their own role in carrying it out. Despite traditional

29

management reluctance, communication and active involvement will often key to

success.

Strategy is based on analysis, not straws in the mind

To build a sound strategy for future, we will need a deeper degree of analysis at least
beginning to understand why things are happening as well as just knowing what is
happening. An analysis of macro and macro environment is essential even for more
emergent strategic routes that the organization may favor.
Strategy is not a public relations Exercise
Strategy must be capable of implementation. It is about action not words. It is about
implementation not just planning.
Strategy is essential to an organizations survival.
If you do know where you are going any road will take you there. A well thought out
strategy and overall business objective is essential to ensure consistency an d continued
success.
Without clear guiding strategy, managers will spend a lot of time agonizing over decision
s that could b e made in a minute s if only they knew what their organizations was trying
to do.
A well communicated strategy brings the organization together and provides common
purpose. If people and department are not looking in the same direction, they cannot help
but be working against each other. In more competitive days ahead, it is less and less
reasonable to expect to pay for our inefficiency.

30

Marketing strategy
Those who want to b e sure succeeding in their battles and assaults, must seize the
favourable moments when they come an d not shrink on accession from heroic measures;
that is to say, they must resort to such me an s of attacks as fire, water an d the like, what
they must not do, an d what will prove fatal, is to sit still and simply hold onto the
advantages they have got.

Sun Tzu, 500 BC

DEFINITION OF MA RKETING STRATEGY
Marketing strategy is a process of strategically analyzing environmental, competitive and
business factors affecting business units and forecasting future trends in business areas of
interest to the enterprise participating in setting objectives and formulating corporate and
business unit strategy. Selecting target market strategies for; the products, markets in each
business unit, establishing marketing objectives, and developing, implementing and
managing program posing strategies for meeting target markets needs.
Marketing strategy reflects the companys best opinion as to how it can most profitably
apply its skills and resources to the market place. It is inevitably a broad scope. The plan,
which stem s from it will spell out action and timing and will contain the detailed
contribution expected from each department.
Marketing strategies are the means by which marketing objective s will be achieved and
are generally concerned with four major elements of the marketing mix as follows;
product, promotion price, place.

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Formulating marketing strategies is one of the most critical and difficult parts of entire
marketing process. It sets the limit of success. Communicated to al management level, it
indicates what strengths are to be developed, what weakness are to be remedied, and in
what manner. Marketing strategies enable operating decisions to bring the company into
the right relationship with the emerging pattern of market opportunities which previous
analysis has shown to offer the highest prospect of success.
(mc Donald)
Marketing strategy is the marketing logic b y the business unit expects achieve its
marketing objective. Marketing strategy consist of marketing decision s on business
marketing expenditures, marketing mix, and marketing allocations in relations to
expected environmental an d competitive conditions.
(Philip Kotler)
Marketing strategy is a series of integrated actions leading to a sustainable competitive
advantage.
(John Scully)
From the many definitions given by different experts, it is clear that a marketing strategy
me an s different things to different people. Having looked at the different definition s of
market strategies it is clear that this mean s different things to different people.
We can look at marketing strategy as a process by which the organization translates its
business objective and business strategy into market activity.
The marketing director or the person in charge of the marketing function in an
organization is simply incapable of developing a clear marketing objective and practical

32

marketing strategy without deep and throughout understanding of the organization

business objectives and its business strategy.
The success of the organization business objective and strategy will depend on the quality
of marketing input right at the top.
Review Questions
a.
b.
c.
d.

What do you understand by the term strategy?

Explain the various levels of strategy.
What do understand by th e term marketing strategy?
Why is a strategy so important?

External Environmental Analysis

Learning outcomes

The students should b e able to conduct and evaluate the environmental

influences.
Should be able to specify a clear rationale when choosing between strategic
alternative s.

We are watching the dinosaurs die, but we dont know what will take their place.
Lester Thurow, MIT economist
Introduction
This chapter focuses on the environment surrounding the market. The interest is in
environment which h as the potential to effect strategy either directly or indirectly.
The environment literally means the surrounding, external object, influences or
circumstances under which someone exists. The environment of any organization is
the aggregate of all conditions, events and influences that surround and affect it.

33

The company success probability depends on whether its business strength not only
matches key success requirements for operating in the target market but also exceed
those of the competitors.
Swots analysis
Businesses undertake SWOT analysis to understand their external and internal
environment. SWOT is the acronym for strengths, weakness, opportunities and
threats. Through such an analysis the strength and weaknesses existing within an
environment can be matched with the opportunities and threats operating in the
environment so that an effective strategy can be formulated. An effective
organizational strategy is the one that capitalizes on the opportunities through the use
of strength and neutralized the threats by minizing the impact of weaknesses.
The checklist performing strength/weakness include a review of marketing , financial,
manufacturing an d organization competences-each factor can be rated as a major
strength or minor strength.
The business doe s not have to correct all its weakness nor gloat about it s strength.
The question is whether the business should limit itself to those opportunities where it
has strength or whether it should consider other opportunities where it might have to
acquire or develop certain strength.
Environmental factors/sectors
The classification of the general environmental into sectors help an organization t
cope with its complexity, to comprehend the different influences operating in the
environment, and relate the environmental changes to it s strategic management
process. There include;

34

Marketing environmental
Political and legal environment
The economic environment
Cultural environment
Social environment
Technology environment

Market environment
This consists of factors related to the group and other organizations that compete with
and have an impact on an organization markets and business. This includes;
1. Customers factors like; needs preferences, perceptions, attitudes, values,
behavior, and satisfaction of customers etc.
2. Product factors like demand, images, features utility, lifecycle, price promotion
place, availability of substitutes etc.
3. Marketing intermediary factors, such as level and quality of costumer service,
middlemen, distribution n channels, logistics, costs, delivery systems and
financial intermediaries.
4. Competitor related factor s such as types of competitors relative strategic position
s of major competitors etc.
Political and legal environment
Marketing decisions and activities are restrained and controlled by multitude of laws
and regulation established by the political institutions. Laws have been enacted to
preserve acompetitve atmosphere or to protect the consumers. Extents of the impact
of these laws on marketing mix variables will depend on how marketers and the court
interpret such provisions. Other sources of regulation include the local authority.
Some industries are subject to heavy regulation e.g electricity, water, rail transport.
This give company in operating in this environment momonpoly and prices are

35

restricted. This is justified by he large sum f money that that need to be invested in
the industries.
Changes in the ;law can be anticipated from governing partys manifests to guide the
firms political priorities. Also the government publishes papers to consult on plan on
issues like green issues, employment, wages etc.
The concern is the stability of the political system, the government commitment to
rule of game, expectation of change in government and expected changes in the
business practices etc. Government policy in particular industry is important.
The economic environment
Economic forces affect the firms marketing decisions. Marketers require power as
well as people. The available purchasing power in the market depends on current
income, prices savings, depts. And credit availability.
Economic factors like GPD, inflation, interest rates (cost of borrowing) , tax levels
government spending, infrastructures national income, distribution of income, rate
and growth of GNP, per capita income, disposal income and business cycle need to be
considered. During periods of boom, premium pries can be charged, during recession,
demand for goods services are low and prices depressed. Referring to the European
community goods are more expensive in some countries than in others e.g. cars more
expensive in UK than German.
Culture environment.
The society in which people grow shapes their beliefs, values and norms. People
absorb almost unconsciously a world view that defines their relationship to
themselves, to others, to nature and to the universe.

36

People living in a particular society hold many core beliefs and values that tend to
persist e.g American believe in work. Getting married. In giving charity in being
honest etc. these core beliefs and values are passes on from parents to children and
are reinforced by major institutions like schools, churches, businesses and
government.
People secondary beliefs are more open to change i.e beliefs institution of marriage is
a core belief but believing that people ought to get married early is a secondary belief
family planning marketers could make headways by arguing that people should not
get married at all i.e marketers can change the secondary values but have little chance
of changing the core values.
Think about drinking and accidents. Those advocating no drinking have little chance
because people have culture freedom to drink. The idea of taking a taxi when drunk
can be a good strategy. Also they can lobby to rise age.
Cultural discipline and habits can make con summers boycott some products e.g
Muslim and pork. Knowledge of culture of value to business because marketers can
adapt their procedure accordingly and gain sizeable markets.
Shift of secondary cultural values through times.
Core values are fairly persistent but cultural swings take place. Advent of break
dance, hip-pop lingala e.tc and other cultural phenomena had a major impact on
young peoples lifestyle, clothing, sexual norms and life goals.
Today people are influenced by new heroes and fassa e.tc marketers need to spot
cultural shift that might bring marketing opportunities and threats. There is need to
forecast cultural trends.

37

Social environment
This involves the study of demographic factors i.e study of population and population
trends. The factor important includes growth of population age of population
geographical distribution, ethnicity, household and family structure, employment,
social structure and wealth.
Implication - changes in our lifestyle technology in areas like communication,
transport, computer, energy, fabrics, metal, and packaging has influenced the types of
products produced. It has also influenced advertising, personnel selling, market
research pricing, packaging, transport and use of credit. Technology has led to
invention of new products.
Technology contributes to overall economic growth. The total can in crease through
increase in productivity, reduced cost and new types of products.
Technology contributes to overall economic growth. The total output can increase
through increase inn productivity, reduced cost and new types of products.
Effects of technology
Types of products and services made and sold, the way products are made , services
provided, market indentified, firms managed and communication will external clients
via websites e-mail etc internet phones charged at the local rates undermines price
per distance. Social effects.
a) Home working will be possible and will become more important
b) Intellective skills relate to interpretation of data and information process. More
valued than physical skills.
c) Services manufactured productivity in crease more work human resources
released for services jobs.
d) Database marketing that enables easy tracking of customers

38

e) Using the internet this ensures availability of information about the firm and its
products.
Review questions
a)
b)
c)
d)

What are the main categories of external influences that affect the organization?
Why do planners need to monitor the political environment?
Hoe has the changing age structure affected business plans?
In what ways does technological change affect business?

External Situation Analysis

Learning outcomes

The students should be able to understand the forces that shape completion.
The student should be able to identify the elements that can be used to create

competitive advantage.
The student should be able to conduct detailed marketing audit externally.

Industry analysis:
This chapter deals with the industry analysis. The industry analysis is adopted form porter
competitive strategy. Michael porter indentified 5 forces that influence the state of
competition in the industry. These forces that influence the state of competition in
industry. These forces were presented as:
(a)
(b)
(c)
(d)
(e)
a)

Threat of new entrants

Threat of substitute products or services
The bargaining power of suppliers
The bargaining power of customers
Rivalry amongst current competitors

Threat of new entrants

39

This is the case of entry to a market that is showing attractive profit. A new entry
bring extra capacity and more and competitors e.g easy to open a new restaurant
but difficult to enter the aircraft industry.
Barriers is to entry include: high capital requirements, economies of scale patterns
and licensing requirements, raw materials access to distribution channels product
differentials, reputations requirements and switching cost of customers (time,
money and convenience.)The most attractive segments are one which entry
barriers are high and exist barriers are low.
b) Threat of substitute products /services.

A substitutes product is a product offered by another in dust that has potentials to

satisfy the sense customer need. Substitutes place a limit on prices and or profit
tat a firm/industry can earn. A company has to watch closely the price trends in
the substitutes products i.e transport of passengers from Mombasa to Nairobi
Air and bus. The three modes of transport need to think about each other.
c) Bargaining power of customers
Where customers have strong growing bargaining power, the segments are
unattractive. Customers want low price, better quality or service and will set
against one another at the expenses of the sellers profits, buyers bargaining
power grows when they become more organized, where more organized. Where
the production represent a fractions of buyers cost when products are
undifferentiated when the buyers switching cost are low are price sensitive of
low profit.
d) bargaining power suppliers

40

The suppliers tend to be powerful when they are concentrated and organized. They
can be able to advertise a better price, reduce quantity supplied suppliers are also
powerful where there are few substitutes, when the supplied product is important to
suppliers products, when the cost of switching a supplier are high and when supply
can downstream best defense are t build relationship with , and win suppliers etc.
e) The rivalry almagest current competitors in the industry
A segments is unattractive if, it contains many, strong or aggressive competitors and
if is in a declining industry. It is more unattractive if fixed costs are high existing
barriers are high. These, conditions wool lead to price wars, advertising battle new
product introduction and ill make it expensive to compete.
Competitors analysis
The relevant questions that need to be answered:
a)
b)
c)
d)
e)

Who are they?

What are their goals?
What strategies are they pursuing?
What are their strength and weaknesses?
How are they likely to respond?

Competitors represents a major determinant of corporate success and any failure to take
detailed account of their S/W may result to poor performance and greater exposure to
competitive moves- failure to monitor competitors may ,increase the like hood of the
company being taken by surprise and relegation of being a follower rather than a leader.
Identifying competitors who are they? Current competitors are not much of threat.
Their moves can easily be motivated and a marketing defense prepared,. The danger is
from emerging competitors and a new technologies e.g.

41

a) Coca cola company greatest threat not Pepsi cola but proposed tables that can be
taken to quench thirsty.
b) Eastern Kodak worried by Fuji (Japanese film maker) the greatest threat to
Kodak is the recent invention of a film less camera by Canon and Sony.
c) Uniliver greatest threat not other detergent manufactures but the ultrasonic
washing machine that would wash clothes in water with little or no detergent.
Current, it can wash certain kinds of fabrics.
Coca Cola Company sees tap water, tea, coffee, milk, uji etc as the greatest threat to
coke business.
B.) what are their goals?
This involves determining the competitions objectives. The question is what is each
competitor seeking in the market place? What drives each competitors believe? The
assumption: many competitors strive their profits. The difference is the weights
companies put on shot term versus long term profits. Alternatively we can assume
that competitors pursue a mix of objectives i.e profitability, market share growth to
know how a competitor weighs each objectives as this can help as figure out how
they are likely to react to different type of competitive attacjks e.g competitors
pursuing low cost leadership will react more strongly to a competitor who has
reduced cost significantly e.g US firms have short run profit max as their objective.
Japanese firms have market share max borrow from banks at low interests
C) What are their strategies?
This involves indentifying competitors strategies. Those competing in the same
target market with the same strategy. A strategy group is the same of firms following

42

the same with the sane strategy. Firms can differ in a number of dimensions, quality
cost structure, advertisements on services, price policy.etc.
Competitions are intense within a strategic group but rivalry between the groups
exists as well. A strategic group may appeal to overloading customer groups.
Companies need detailed information about its competitions business, marketing,
research and detailed information about its competition business, marketing, research
and development, financial, Hr strategic, pricing policy, distribution, advertising etc.
Competitors strategies must be monitored overtime.
Example: motor vehicle industry
Ford was the first winter because they produced vehicles at low cost. GM surpassed
ford was the first winner because they responded to the market need by offering
variety. Later Japanese companies took because they supplied vehicles with fuel
economy. Japanese moved to producing cars with high reliability when US auto
industry caught up in quality Japanese shifted to sensory quality e.g look, the fuel of
a climate control knob.
D) What are their strengths and weakness?
The success of competitors in carrying out their strategies and reach their goals
depends on their resources and capabilities. It is important to identify the competitors
strength and weakness by gathering information on each competitors strength
business i.e data on sale, market share, profit margin, return on investment utilizations
etc. the information can be gathered from secondary data sources, personal
experience, and hearsay or even by conducting primary research.

43

The information will help the country to decide on whom to attach and how to attack.
Mostly weak companies should be targeted and companies point of weakness.
Competitors can be analyzed on basis of 3 variables:
a) Share of market competitors share of the target market
b) Share of mind -% of customer who named the competitors as the first in their
mind in that industry.
c) Share of heat-% of customer who would prefer to buy the competitors product.
Companies that makes steady gains in mind share and will inevitably make gains
in the market share and profitably. Organizations can start by bench making
(article to be given) their most successful.
In searching for competitors weakness, we should identify assumptions they make
about their business i.e some companies believe they make the best quality they
do not. Others subscribes to the conventional wisdom like the same sale force is
the is the only important tool customer value service than price we can take the
advantage of companies.
E)

Competitors reactions and response.

This can be predicted from the company philosophy of doing business, the internal
culture, and the guiding beliefs. One needs a deep understanding of the competitors mind
set so as to anticipate their reaction. Some of the categories identified by Kotler include.
a) Layback competitor does not respond to rivals move. Reasons:
Belief their customers are loyal
They are milking their business
They are slow to notice the moves. etc.
b) Selective competitor respond to only respond to only certain types of attacks i.e
may responds to price cuts but not to in crease in promotion budget. This can help
predict the feasible line of attack.

44

c) Tiger competition- react to any attack swiftly and strongly. They are sen ding
signals to those indenting to attack that they will fight to the end e.g protector and
gamble defends to detergent markets Coca cola and the cola market.
d) Stochastic competitor these do not exhibit a predictable reaction pattern. You
cannot predict them on basis of history. Economic situations etc. e.g small
businesses compete when they can afford and hold back when competition is too
costly.
Review questions.
a)
b)
c)
d)
e)

Discuss the different forces that shape competitions in an industry.

What are the substitutes products.?
What does one need to know about competitors?
Identify types of competitor response.
What factors would you consider when analyzing the markets?

45