Smpe 201 Marketing Management PDF

NIM
NIGERIAN INSTITUTE
OF MANAGEMENT
(CHARTERED)
NIGERIAN INSTITUTE OF MANAGEMENT

(CHARTERED)
MARKETING MANAGEMENT
(SMPE 201)
NIM VISION: To be The Source and Symbol of Management Excellence

NIGERIAN INSTITUTE OF MANAGEMENT
(CHARTERED)
STUDY PACK
NIM / NYSC PROGRAMME
(SMPE 201)
STAGE II
For more information, please contact:

Management House
Plot 22, Idowu Taylor Street
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Lagos
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Website: www.managmentnigeria.org
E-mail: mgtedu@managementnigeria.org
MARKETING MANAGEMENT PAGE

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FOREWORD
This study pack covers all the topics and all the basic materials necessary for adequate grasp of the
subject for the Proficiency Certificate in Management Examination of Nigerian Institute of
Management (Chartered).
While expecting candidates, to read as widely as possible on their courses, the Institute's role in
preparing this study pack, is to treat in one publication all the topics covered by the syllabus for this
particular course.
This will enhance focused study on the part of candidate. This pack is written by an expert on the
subject. The writing is reader-friendly while the issues discussed are current with the general
treatment of topics having a contemporary feel.
The topics are treated in a way not only to provide general and theoretical knowledge but to
enhance practice.
Reviewed questions are provided at the end of each pack.
We wish to express our utmost appreciation to our faculty of experts for their invaluable
development and writing of these study pack series.
We also appreciate the support provided by the Directorate of Capacity Building.
MANAGEMENT

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TABLE OF CONTENTS
PAGE
FOREWORD 4
TABLE OF CONTENTS 5
CHAPTER 1 TASKS AND PHILOSOPHIES OF MARKETING

1.1 INTRODUCTION 7
1.2 OBJECTIVES 7
1.3 MARKETING PHILOSOPHIES AND TYPES 7
1.4 UNDERSTANDING THE ROLE OF MARKETING IN
TODAY'S BUSINESS ENVIRONMENT 10
1.5 CONCLUSION 12
1.6 TUTOR MARKED ASSIGNMENTS 12
CHAPTER 2 THE MARKETING PROCESS AND MARKETING

OPPORTUNITIES IN THE ENVIRONMENT
2.1 INTRODUCTION 13
2.2 OBJECTIVES 13
2.3 MARKETING PROCESSES 13
2.4 MARKETING ENVIRONMENTS AND OPPORTUNITIES 14
2.5 MARKETING ROLE IN THE SOCIETY 16
2.6 CONCLUSION 16
CHAPTER 3 MARKETING RESEARCH AND INFORMATION

SYSTEM
3.1 INTRODUCTION 18
3.2 OBJECTIVES 18
3.3 MARKETING RESEARCH AND METHODS OF CARRYING
OUT RESEARCH 18
3.4 USES OF MARKETING RESEARCH FOR INFORMATION
SYSTEMS 20
3.5 TYPES OF RESEARCH DESIGNS 23
3.6 CONCLUSION 24
CHAPTER 4 UNDERSTANDING THE MARKETING MIX

4.1 INTRODUCTION 25
4.2 OBJECTIVES 25
4.3 ASSEMBLING THE MARKETING MIX AND THE MEMBERS 25
4.4 EXAMINING EACH MEMBER OF THE MIX 25
4.5 TYPES OF PRODUCTS 27
4.6 CONCLUSION 41

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CHAPTER 5 MARKET SEGMENTATION
5.1 INTRODUCTION 42
5.2 OBJECTIVES 42
5.3 DEFINITION OF MARKET SEGMENTATION 42
5.4 CONDITIONS AND BENEFITS OF MARKET SEGMENTATION 43
5.5 PRODUCT/SERVICE POSITIONING 45
5.6 CONCLUSION 45
5.7 TUTOR MARKED ASSIGNMENT 45
CHAPTER 6 MARKETING ORGANIZATIONS

6.1 INTRODUCTION 46
6.2 OBJECTIVES 46
6.3 TYPES OF MARKETING ORGANIZATIONS 47
6.4 ADMINISTERING MARKETING PROGRAMMES 47
6.5 CONCLUSION 49
CHAPTER 7 MARKETING CONTROL

7.1 INTRODUCTION 50
7.2 OBJECTIVES 50
7.3 MARKETING CONTROL AND ROLES IN MARKETING
BUDGETS 50
7.4 METHODS OF CONTROL 51
7.5 CONCLUSION 52
CHAPTER 8 PROBLEMS AND PROSPECTS OF MARKETING

IN NIGERIA
8.1 INTRODUCTION 53
8.2 OBJECTIVES 53
8.3 UNDERSTANDING THE MARKETING DEVELOPMENT
AND ROLE IN CORPORATE MANAGEMENT IN NIGERIA 53
8.4 CONCLUSION 59
CHAPTER 9 CASES IN MARKETING MANAGEMENT

9.1 CASE 1 60
9.2 CASE 2 61
9.3 CONCLUSION 62
PRACTICE QUESTIONS 62
BIBLIOGRAPHY 64

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CHAPTER ONE
TASKS AND PHILOSOPHIES OF MARKETING
1.1 INTRODUCTION
1.2 OBJECTIVES
1.3 MARKETING PHILOSOPHIES AND TYPES
1.4 UNDERSTANDING THE ROLE OF MARKETING IN TODAY'S BUSINESS
ENVIRONMENT
1.5 CONCLUSION
1.6 TUTOR MARKED ASSIGNMENTS
1.1 INTRODUCTION
Marketing as a discipline is carried out for several reasons but every attempt at marketing
focuses at specific business objectives. Marketing is a very interesting subject applicable to
every discipline. Students are encouraged to make the best of the course.
Defining marketing enables practitioners to have a clear focus of what it involves. Activities
in marketing and some of the several conceptual approaches and philosophies to it are also
examined. Students are expected to have an understanding of these to prepare them for
more detailed study of concepts later in the chapter.
1.2 OBJECTIVES
By the end of the chapter we expect students to have achieved the following objectives:
Able to confidently define marketing (using any of the listed definitions or own
derived definition)
Outline the different items and issues that can be marketed
Understand that marketing can be applied to all aspects of life
Understand a few of the different concepts of marketing
1.3 MARKETING DEFINITIONS, PHILOSOPHIES AND TYPES
MARKETING DEFINITIONS
Marketing can be described as the totality of all processes involved in the development,
offering and getting paid for a product or service. A lot of organizations ignore the existence
of the marketing approach but crudely practice it. This half-hearted approach usually leads
to the emergence of difficult marketing problems in such organizations.
There are several definitions of marketing and each drives a marketing direction. Some of
these definitions are as follows
CHARTERED INSTITUTE OF MARKETING (BRITISH) DEFINITION the
management process responsible for identifying, anticipating and satisfying consumer
requirements profitably.
AMERICAN MARKETING ASSOCIATION DEFINITION - the process of planning and
executing the conception of ideas, goods, and services to create exchanges that satisfy
individual and organizational objectives

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WHAT DO WE MARKET?
The following are some of the key entities marketed and these are important to the study of marketing:
1. GOODS
2. SERVICES
3. EVENTS
4. EXPERIENCES
5. PERSONS
6. PLACES
7. PROPERTY
8. INFORMATION
9. IDEAS
10. ORGANIZATIONS
The tasks of marketing leads to the need for a specialised management field referred to as
marketing management. This involves a number of tasks and processes and the following have
been defined by Phillip Kotler as Marketing Management:
Marketing Management is the analysis, planning, implementation, and control of programs
designed to create, build and maintain mutually beneficial exchanges and relationships with target
markets for the purpose of achieving organizational objectives
The marketer from the above has to carry out a lot of activities to achieve the corporate goals.
Jerome McCarthy, (1960), distilled 12 elements developed by Prof Borden into the 4 p's of
Product, Price, Place, Promotions now commonly called the 4 Ps of Marketing.
McCarthy and some of his colleagues proposed that these tasks can be grouped under what he
described as the FOUR Ps OF MARKETING but because of the key research element, these have
now been proved to depend on the Research element so we can classify the totality of the
marketing elements as:
PRODUCT
PLACE
PRICE
PROMOTIONS
RESEARCH is a major factor assumed to drive all marketing elements and is discussed extensively
in a new chapter. The following are now accepted as the basic factors or elements in marketing:
RESEARCH
PRODUCT
PLACE
PRICE
PROMOTIONS
PEOPLE
PROCESSES
These confirm the 4 Ps as the key determinants of the nature of Marketing operations and they lead
to the major functions of marketing listed below:
1. Identifying marketing opportunities and its needs
2. Managing products
3. Choosing and motivating the channels of distribution such as retail outlets

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4. Advertising and promoting the products
5. Obtaining sales for the products
6. Setting prices and terms of supply and
7. Planning the marketing activity
SOME APPROACHES TO THE MARKETING CONCEPT

THE MARKETING CONCEPT CAN BE ADDRESSED FROM SEVERAL PERSPECTIVES:
PETER DRUCKER MANAGEMENT GURU IN THE PRACTICE OF
MARKETING -1954 recognized that customer satisfaction is the only valid definition of
business purpose. Marketing and innovations ensure the achievement of this objective.
THEODORE LEVITT MARKETING MYOPIA 1960 he posited that marketing
greatness derives from providing customer, creating value satisfactions. He
emphasized that selling gets these to the customer and there is clear difference between
marketing and selling
PHILLIP KOTLER in two separate papers in 1969 and 1972 stated that marketing
should be further seen as pervasive social activity. This extends the meaning of products
beyond physical and tangible items to services, persons, organizations, and ideas. He
further defined marketing in terms of transactions and suggested a state of marketing
consciousness existed.
MARKETING PHILOSOPHIES AND TASKS

Marketing Management is carried out in different organizations in different ways and these are
guided by circumstances of the organization.
These philosophies guide the marketing manager in each marketing task.
CONVERSIONAL MARKETING: This is a type of marketing used in situations of negative

demand. This suggests a situation of resistance to specific products, negative demand for the
product or even avoidance.
STIMULATIONAL MARKETING: This arises when there is an identified need for a product or
service but little or no consumer demand which is either due to lack of knowledge or education.
The consumers have to be educated and then stimulated into accepting the product or service. This
is a situation in which no demand has to be translated into a full demand.
DEVELOPMENTAL MARKETING: It is a marketing philosophy used when the level of demand for
an identified need is high without any associated product or service. The marketer has to develop,
introduce and market an acceptable product or service to meet this need.
REMARKETING: it is a philosophy used when a product or service has progressively been losing
sales and market share. The causes of the drop have to be identified and remedied with a
marketing plan to get the product back to the expected level of performance.
MAINTENANCE MARKETING:
Every product requires maintenance for it to have the desired full demand situation. The marketer
is to put in the necessary activities and programs to ensure the product performs maximally.
DE-MARKETING: When a product is over-demanded for several reasons or undersupplied due to

production and other constraints in the face of full demand, such a product has to be de-marketed
before consumers either look for alternatives or lose interest in the product. De-marketing is the

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process of deliberately reducing demand for a product and this can be achieved by price increases,
controlled accessibility, introduction of alternatives etc.
GREEN (OR NONPROFIT) MARKETING: Green marketing is non-profit marketing done for
social, health or developmental reasons. Products and services are marketed for these other
reasons and not for profit. Non-profit organizations practice Green marketing in which their
products are for indirect social benefits. The products are therefore marketed by activities that are
not for exchange of money or profit.
COUNTER MARKETING: This is a type of marketing activity carried out when there is
unwholesome competition from a lower quality substitute. When demand increases to the
detriment of higher quality, counter-marketing is used to deal with the situation. This is also used
for SOCIAL MARKETING like the Anti-Drugs campaign.
DIFFERENT MARKETING ORIENTATIONS

Students are encouraged to examine different organizations and identify the type of marketing
orientation being exhibited or applied
MARKET ORIENTATION the company focuses only on the market and the
trends of the market caring less for the customers. The stock market is with this
limitation
PRODUCTION ORIENTATION emphasizes the firm's production processes. This

is done in typically two ways:
Producing at low cost and/or quality
Producing with highly sophisticated technological methods/high cost/quality
Both assume that the customer would appreciate the product presentations and this
could be critical on the international market.
PRODUCT ORIENTATION the company here focuses on physical products. This

has the limitation of encouraging focus on only product quality without emphasizing
customer services. This is true of the services companies too.
SALES ORIENTATION focus here is on advertising and sales/selling processes and

the importance of customer values are not given emphasis. This focus should be in
addition to effective customer services. The long term cultivation of the customer by
paying attention to customer's values and retention is ignored.
SOCIETAL MARKETING it is believed that what is good for the society is also
good for business. There is need for the rationalization of profit with societal needs.
The production processes as well as the products have environmental impact which
are major societal issues.
1.4 UNDERSTANDING THE ROLE OF MARKETING IN TODAY'S BUSINESS

ENVIRONMENT
What marketing does in today's business can best be understood by looking at the functions
of marketing as listed by the Open University of Nigeria:
Functions of Marketing
The functions of marketing can be classified into three:
1. merchandising function,

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2. physical distribution
3. and auxiliary functions.
(A) Merchandising Function

1. Product Planning and Development: Product planning starts with idea
generation, idea screening and development of a prototype product. It also takes
into consideration the purchasing power of the consumers, taste and market
segmentation. Research and development is established for the analyses of ideas
generated.
2. Standardization and Grading: This is concerned with setting certain

standards/levels to accomplish the produced goods. This is carried out by the
production department and regulated by some government agencies, such as
Standards Organization of Nigeria. For example, Sprite is 30 cl, Coke is 35 cl, etc.
3. Buying and Assembling: Here, we are concerned with the marketing institutions
that purchase goods or services at cheaper prices in order to resell at minimum prices
to the end-users. These marketing institutions include the wholesalers, retailers and
agents.
4. Selling: This is concerned with selling of the finished goods to the end-users either
through the manufacturers or the marketing channels. In order to get the attention of
their target consumers, they embark on various promotional strategies, such as
discounts, promo tools, bundle sales, bonuses, etc.
(B) Physical Distribution

1. Storage: Storing of all types of goods to meet future demands and for time and other
utilities is a process referred to as Inventory management.
2. Transportation: This is the movement of goods from the manufacturer down to the
target consumers. This includes material handling, warehousing, etc commonly referred
to as Logistics.
(C) Auxiliary Functions

1. Marketing Finance: This involves offering credit to customers and as well as obtaining
credit from customers. Marketing offers trading credit to customers and they are offered
credit by banks, individuals and other financing institutions.
2. Risk-Bearing: Risk means 'uncertainty'. Entering into a business entails risks, such as
loss of items, road attack, weather risk, etc. Marketers stimulate business risk taking by
offering goods and services under terms to customers
3. Market Information: Gathering necessary information about the markets, and the
target consumers in terms of their purchasing power, taste, colour, choices, competition,
and their products needs.
The Role of Marketing

1. The first and foremost role is that it stimulates potential aggregate demand and thus
enlarge the size of the market. You might ask how does it help in the economic growth of a
country? The answer is that through stimulation of demand people are motivated to work
harder and earn additional money (income) to buy the various ideas, goods and services
being marketed. An additional advantage which accrues in the above context is that it
accelerates the process of monetizing the economy, which in turn facilitates the transfer of
investible resources.
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2. Another important role which marketing plays is that it helps in the discovery of
entrepreneurial talent.
3. It helps in sustaining and improving the existing levels of employment. When a country
advances economically, it takes more and more people to distribute goods and
proportionately a lesser number to make them. That is, from the employment point of view,
production becomes relatively less significant than marketing and the related services of
transportation, finance, communication, insurance, etc. which spring up around it.
1.5 CONCLUSION
From the above, we have been able to identify different ways of looking at the practice of
marketing and its application to everyday life. We have also examined the different
methods of marketing products and services.
We also learnt of the different marketing practices applicable to different product supply
situations.
A. MAKE A LIST OF WHAT YOU CONSIDER TO BE THE MAJOR

FUNCTIONS OF A MARKETING MANAGER OF A FARM SELLING
STARCH POWDER USED BY FACTORIES.
B. A MANUFACTURER DECIDES TO DEVELOP AND MARKET A

UNIQUE PRODUCT INTO THE LOCAL FRUITS SQUASH MARKET.
WHAT TYPE OF MARKETING PHILOSOPHY DO YOU BELIEVE
DRIVES THE COMPANY'S NEW PRODUCT EFFORT?
C. IN A FACTORY WHERE RUBBER SANDALS AND BUCKETS ARE

MADE, THE GENERAL MANAGER HAS INSISTED THAT HE DOES
NOT REQUIRE ANY FORM OF MARKETING TO GET CONSUMERS
TO ACCEPT AND BUY THE GOODS PRODUCED. EXPLAIN
GIVING REASONS, THE TYPE OF MARKETING ENGAGED IN THIS
FACTORY.

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CHAPTER TWO
THE MARKETING PROCESS AND MARKETING OPPORTUNITIES IN

THE ENVIRONMENT
2.1 INTRODUCTION
2.2 OBJECTIVES
2.3 THE MARKETING PROCESS
2.4 MARKETING ENVIRONMENTS AND OPPORTUNITIES
2.5 Marketing's Role in the Society
2.6 CONCLUSION
2.1 INTRODUCTION
Having understood what marketing tries to do in organizations, we are going to review some
of the basic steps that drive and make marketing possible in an organization.
The establishment of the marketing process however depends on the understanding of the
environments in which the marketing operations will take place.
Once these processes are established, the results have to be reviewed periodically in light
of the set goals and available growth opportunities identified and exploited. The growth
strategy depends on several factors and we are going to examine some of the possible
strategies that could be adopted.
2.2 OBJECTIVES
By the end of this chapter we expect the student to:
Understand what corporate goals are and how they are translated into objectives
Know the different environments in which marketing operates and how these help
determine how marketing is carried out
Understand why companies have to grow
Understand the different strategies available to a company for achieving marketing
growth
2.3 THE MARKETING PROCESS

This is the development of the marketing effort within a company. The marketing effort
depends on the Company Purpose or GOALS.
These are translated into the Corporate Objectives and goals. These objectives determine
the types of products and services to be offered as well as the types of customers.
The above implies that every company determines the market it intends to enter, the
products and services to be offered and the customers.
The Product Definition determines the Market Definition. This means that the market
definition of a company describes the true nature of the company because there are several
types of products in each market.
Product Definition versus Market definition
Cosmetics Company is a Beauty Company
TV manufacturer is an Electronics company

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Computer Company is an ICT company
2.4 THE MARKETING ENVIRONMENT

The Marketing Environment can be divided into the Micro Environment and the Macro
Environment for ease of review.
The Micro Environment refers to the classes of enterprise and their consumers.
Macro Environment refers to those environments that are beyond direct control of the
business
the technological environment
the economic environment
the social environment
the natural or physical environment
the institutional/political environment
THE MICRO ENVIRONMENT

This can be analyzed using the following approaches:
Internal Analysis
The internal analysis is a comprehensive evaluation of the internal environment's potential
strengths and weaknesses. The following are factors that should be evaluated across the
organization in areas such as:
Company culture
Company image
Organizational structure
Key staff
Access to natural resources
Position on the experience curve
Operational efficiency
Operational capacity
Brand awareness
Market share
Financial resources
Exclusive contracts
Patents and trade secrets
The internal environment dovetails into the Macro environment but the factors can only be
isolated and used by carrying out an external analysis for the company
External Analysis
Opportunities can arise when changes occur in the external environment.
Many of these changes can be perceived as threats to the market position of existing
products and may necessitate a change in product specifications or the development of new
products in order for the firm to remain competitive.
Changes in the external environment may be related to the following:
Customers competitors
Market trends
Suppliers
Partners
Social changes
New technology
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Economic environment
Political and regulatory environment
An understanding of the internal and external environments makes for ease of marketing of
goods and services. The environment is a key determinant of goods services and ideas to be
marketed. This understanding leads to MARKETING OPPORTUNITIES which can be
explored and exploited with research to achieve impressive marketing drive and results.
Companies have very clear GOALS for setting up and OBJECTIVES are set up on the short
and long term for achieving these goals. One of the methods of achieving their goals is
through business growth.
The available marketing opportunities are identified by research and used for developing
new business directions and growth.
MAJOR CLASSES OF GROWTH OPPORTUNITIES:

1. INTENSIVE GROWTH
2. INTEGRATIVE GROWTH
3. DIVERSIFICATION GROWTH
Intensive Growth refers to growth achieved through the use of existing products and services
and operations. These are deliberately developed, expanded and reengineered to stimulate
and ensure growth.
Methods used include
a. Market Penetration
b. Market Development
c. Product Development
Integrative Growth involves 'integrating' parts of the marketing system within and outside
the company. This could be expensive but is usually a good source of growth. Special
funding may be required for good results. Methods used include
a. Backward Integration this is a deliberate effort to control the sources of supply of
inputs and supply system by buying into or having clear financial interests in the
supply system.
b. Forward Integration this is another method in which the company buys into the
distribution system ensuring its ability to control the ways its goods and services are
distributed and get to the customer. It helps to control distribution costs and minimize
channel disruption.
c. Horizontal Integration this involves the deliberate shopping for and buying
companies competing or with similar products. It is a way of achieving 'economies of
scale' and lowering production and other costs. This should lead to greater
profitability and growth.
Diversification Growth this is the use of company's identified areas of intrinsic strengths
to develop new product interests or production facilities especially when existing
products or focal areas are having problems. Methods of achieving this include
a. Concentric Diversification this involves the use of existing facilities to achieve
development of new products and services, taking advantage of existing distribution
and new customers.

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b. Horizontal Diversification this is similar to the above but is focused on achieving
new but similar products for existing customers and using the same distribution
channel.
c. Conglomerate Diversification this is more complex and may involve entirely new
products from newly acquired companies and or technologies. These new products
may not be similar to the existing ones in any way.
2.5 MARKETING ROLE IN THE SOCIETY:

The environmental factors described above, do not completely capture the role
that marketing play in the society itself and the consequent effects and responsibilities of
marketing activities. Marketing activities within society in general and in connection with
various public issues invite constant scrutiny by the public. Marketing may typically seem to
mirror changes in the entire business environment. This is because, marketing determines
the final interface between a business enterprise and the society in which it operates,
marketers often carry much of the responsibility for dealing with various social
issues affecting the firms. Marketing operates in an environment external to the firm. It reacts
to that environment and, in turn, feels environmental influences. Relationships with
customers, employees, the government, vendors, and society as a whole form the basis of
the social issues that confront contemporary marketers. While these concerns often grow out
of the exchange process, they produce effects coincidental to the primary sales and
distribution functions of marketing. Marketing's relationship to its external environment has
a significant effect on the firm's success. Marketing must continually find ways to deal with
social issues facing the competitive system.
The competitive marketing system is a product of a general drive for materialism. However,
it is equally important to note also that materialism was developed from the priorities of the
society itself.
2.6 CONCLUSION
We should have now understood that beyond the basic concepts and definitions, students
should know that companies produce to achieve clear goals and take steps from time to time
to review these goals with a view to achieving and at the same time growing.
Some of the several options open to a company for sustainable growth were also explained.
Students should endeavor to use knowledge gained to identify the pattern and direction of
growth of Nigerian companies.
Members of every organization also need to think seriously about the environments in which
it operates and the roles that they play in the society. All firms must identify, analyze, and
monitor external forces and assess their potential impacts on the firms' goods and services.

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A) MAKE A LIST OF FIVE PROMINENT NIGERIAN COMPANIES

AND
1. TRY TO IDENTIFY THEIR AREAS OF GROWTH IN THE PAST
FIVE YEARS.
2. IDENTIFY THE TYPE OF GROWTH STRATEGY ADOPTED.
B) USING THE ABOVE LISTED COMPANIES, MAKE A TABLE TO

IDENTIFY THEIR PRODUCT DEFINITION AND THEIR MARKET
DEFINITION.
C) THE BEST METHOD FOR ENSURING CONTINUOUS

PROFITABILITY AND GROWTH OF A COMPANY IS BY
GETTING MONEY TO BUY INTO SOURCES OF RAW
MATERIALS AND ESSENTIAL INPUTS. WHAT TYPE OF
BUSINESS GROWTH OPPORTUNITY IS THIS? MAKE A LIST OF
ITS ADVANTAGES.

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CHAPTER THREE
MARKETING RESEARCH AND INFORMATION SYSTEM
INTRODUCTION
OBJECTIVES
MARKETING RESEARCH AND METHODS OF CARRYING OUT RESEARCH
USES OF MARKETING RESEARCH FOR INFORMATION SYSTEMS
UNDERSTANDING MARKETING MEASUREMENTS AND ITS USES
TYPES OF RESEARCH DESIGNS
CONCLUSION
TUTOR MARKED ASSIGNMENTS
3.1 INTRODUCTION
There is very little that can be achieved in marketing without consistent and reliable research.
These researches are done both in-house and through outsourcing to consultants. The
researches lead the way for critical decisions and form the pivot of most marketing effort. The
chapter goes through the several approaches to Marketing Research and should enable
students appreciate the need for research and how it is used.
3.2 OBJECTIVES
By the end of this chapter, students should be able to do the following:
A. Understand and define marketing research
B. Understand the different methods used for carrying out marketing research.
C. Know the advantages and disadvantages of using each of the research methods.
D. Know how to design and test research results
3.3 MARKETING RESEARCH AND METHODS OF CARRYING OUT RESEARCH

This is the collection of research activities which provides organization with basic
information required for making decisions on its business and its products.
There are TWO main METHODS of carrying out marketing research. These are
QUALITATIVE METHODS AND QUANTITATIVE METHODS
QUALITATIVE METHODS
These are methods that do not follow strict mathematical models for collection and analysis
of data. Examples are In-Depth Interviews and Focus Group researches
QUANTITATIVE METHODS
These involve the use of statistical models for collecting and analysing data.
Both methods lead to THREE types of marketing researches; namely
1 Consumer Researches
2 Exploratory Researches
3 Message Development Researches.
USES OF RESEARCH
Marketing research can be used for one or more of the following purposes
1 To identify any human needs and aspects of human life and behaviour

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2 To test products and services developed to meet a need
3 To find out responses to different aspects of the product
4 To develop a communication message for the product
5 To test the message and determine what to say, when, how and where to say it
6 To monitor progress of all aspects of the marketing effort and processes
7 To identify patterns of consumption and usage of products and services
8 To monitor the customers and their responses to the products and programs
MARKETING RESEARCH PROCEDURE

Generally, researches are expected to follow some basic procedures which are scientific and
universal with each research being conducted with its own peculiarities.
1. Problem Definition
2. Research Design
3. Field Work
4. Data Analysis
5. Report Presentation
6. Findings and Report Presentation
THE EXPLANATION OF EACH FOLLOWS:

1. Problem Definition
This is sometimes done with an Exploratory Research to reduce costs and accelerate the
speed of problem isolation and definition.
2. Research Design
This includes such steps as
a. Data collection methods with Primary data generated from scratch and Secondary
data collected from ready sources.
b. Handling the primary data - this involves observation or experimentation.
c. The Research Instrument determined by data collection method adopted such as
The Survey Method, The Group Interview Method, The Individual Respondent and
Interview Method
d. The Sampling Plan which involves choosing the sample size and units
e. The Sampling Method involving one or more of Telephone or Personal Interview,
Questionnaires, Direct Mail etc.
3. Field Work
This involves the use of the selected method and the logistics of achieving coverage of
sample audience.
4. Data Analysis
These are the steps taken to do a meaningful analysis of data collected during fieldwork.
Statistical methods are used but the choice would depend on the type of data being
analyzed.
5. Report Presentation
Every type of research is presented in a way or format that suits the objectives of carrying it
out. This is the report presentation
6. This is the formal presentation of findings from research carried out and the handing over of
the report to the commissioning authority.

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WHO CARRIES OUT MARKETING RESEARCH?
These are in three groups:
1. The full marketing research companies. These companies take briefs from the companies
and carry out research on their behalf. All findings belong to the company.
2. The specialized marketing research companies. These are research agencies that do only
marketing research and avoid all other types of research even where attempts are made to
commission them.
3. Information selling firms. These are independent desk research companies that depend on
research findings from several agencies. These findings are built into a database and the
subscribing companies pay for access to these databases as a service. Many of these are
available on the Internet.
3.4 USES OF MARKETING RESEARCH FOR INFORMATION SYSTEMS

The broad areas of application of marketing research are sales and market analysis, product
research, advertising, business economics and corporate
research, and corporate responsibility.
1) Sales and Market Analysis
i. Determination of Market Potential:
The market potential is the total amount of a product or product group which could be sold
to a market in a specified time period and under given conditions. Market potential is
applicable in case of a new product, a modified version of an existing product, or an existing
product to be introduced in a new geographical market.
ii. Determination of Market Share:
In case of an existing product, a company may be interested to know the percentage share
of the market which their brand commands.
iii. Sales Forecasting:
Sales forecasting is an attempt to predict the sales level at a given point in the future on the
basis of the existing information. Sales forecasting is applicable to both existing products as
well as new products. The sales may be calculated either in units or in value.
Basically, there are two types of forecasts short-term and long-term. The short-term
forecast has its basis more in the growth pattern of the industry to which the product belongs
and the business cycle operating in the industry.
iv. Design of Market Segmentation Studies:
A market is a group of potential customers who have something in common. The common
factor may be a geographical area, sex (after shave lotion is used only by men), age (toys for
children under 5, between 5 & 7, etc.), physical characteristic (weak eyesight,
overweight), income, lifestyle, etc. Children comprise the market for toys. But in this broad
category, the market can be viewed to be made up of many smaller markets or segments:
one market for pre-school children, another for school-going children, one market
comprised of educational toys, one for mechanical toys, one for electrical toys, one for
indoor games, etc. The choice before the marketing manager is whether to cater for the
broad market of toys or to only one or two of the specific market segments. MR can help
answer questions such as 'To what extent should the market segmentation be pursued?' and
'What should be the basis for segmentation?'
v. Test Market:
This is a controlled experiment to predict sales or profit consequence of the various
marketing strategies. It refers to trying out something in a particular market before

20
extending it on a larger scale. You may have noticed advertisements for soaps, or snack
foods which sometimes carry the message 'available only in Lagos' or 'available only in
Onitsha'.
Test marketing is used not only for new products, but also for researching into the impact on
sales of retail level promotional displays and promotional schemes such as coupons and
discounts.
vi. Distribution Channel Studies:

Market research can be used to determine the most effective and profitable distribution
channels for different types of products.
vii. Determination of Market Characteristics:

Research surveys can be conducted to collect information about the market characteristics
which would help a new entrant plan his entry or help an existing company focus its strategy
more sharply for increasing market share.
Information can be collected on the number of brands competing in the market, state of
technology prevailing in the market, geographical concentration and dispersal of
customers, nature of outlets selling the products, number of such retail outlets, etc.
viii. Determination of Competitive Information:

Research can provide information on the marketing strategies used by various competing
brands and the 'unique selling proposition' of each.
2) Product Research
This can be used for:
(a) Evaluation of new product ideas
(b) Testing for new product acceptance
(c) Evaluating the need for change in product formulation
(d) Testing package design in terms of aesthetic appeal, protection for the product, and
ability to withstand transportation and stocking ordeal
(e) Testing for product positioning. For example should a new brand of tea be positioned
on the basis of its fragrance and taste, or colour and strength, or price?
3) Business Economics and Corporate Research

(a) Studies of Business Trends:
These are to determine industries with growth potential and those facing a stagnant future.
(b) Pricing Studies:
These are to estimate the demand level at different prices. Such studies reveal the extent to
which customers are sensitive to price changes, and provide valuable clues to the market for
assessing the impact of price increase or decrease on sales.
(c) Diversifications Studies:

These provide information on the profitability of new opportunities of business growth
which a firm can consider for diversification. The diversification may be into totally new and
unknown areas or into allied areas.

21
(d) Product-mix Studies:
If a firm is considering diversifying into allied product areas, it may like to find out the
product-mix combinations which would optimise its existing resources and provide synergy
for growth. A company in the business of cooking oil would like to do research into one or
more of the following products for arriving at a 'synergistic' product-mix: butter,
spices, dehydrated foods, frozen foods, instant food mixes, custard powder, branded wheat
flour and rice.
(e) Plant and Warehouse Location Studies:

Research is also needed to determine the best possible location for setting up a new plant.
Before arriving at a decision, a firm would need to research into factors such as availability
of raw material and labour, proximity to market place, telecommunication and transport
infrastructure, financial, taxation and other incentives applicable to each location. In case of
warehouse location, you would research into movement patterns of goods to different
cities, high sale potential areas versus low sale potential areas, number of checks for quality
needed en route the destination to final customer, benefit of conducting these checks
against the cost of acquiring and maintaining a warehouse and convenient rail/road
connections.
4) Advertising Research
(a) Audience Measurement:
This is carried out on advertisement appearing in different media such as
newspapers, magazines, journals, radio, TV, outdoor hoardings, kiosks, bus side
panels, etc. The objective of this type of research is to estimate the audience size
of each media channel (e.g. print or electronic responses).
(b) Determining the Most Cost-Effective Media Plan:

Each media channel has its unique advantages and disadvantages, and each media
vehicle has its own cost structure. Research can be used to find out the best media
vehicle by matching your product characteristics with the audience profiles of
different media vehicles and the respective cost of advertising in these.
(c) Copy Testing: One approach for researching into the effectiveness of the copy
(the words or pictures of the advert) is to test the following elements:
Basic themes, ideas, appeals
Headlines baseline, pictures, jingle, story sequence
Pre-testing whole advertisements in rough or finished form
Pre-testing the effect of repetition to simulate a campaign (all the
above can be tested under simulated conditions)
After the advertisements have been released, post-testing them individually
in their normal media
The other approach for conducting research is to assess the copy or the entire
advertisement/campaign for the following:
- assessing for its attention value, interest value and arousal,
- testing for communication clarity,
- testing for their effect on consumer attitudes,
- testing for their effect on purchase behaviour.

22
(d) Determining Advertising Effectiveness:
After the advertisements have been released, it is important to monitor their
impact in terms of achieving the intended objective(s). To what extent has the
advertising achieved its objective of creating brand awareness, creating
corporate image, educating the customers about the product usage, and so on. The
effectiveness is always determined in relation to the cost incurred.
5) Consumer Behaviour Research

(a) To determine who the customers of the product (men, women,
children, working women, housewives, retired people) are and profile
them in terms of their socio-economic background, age, religion and occupation.
(b) To find out where the customers are located.
(c) To determine their motivations to purchase your brand of product.
(d) To determine their buying behaviour pattern in terms of identifying
sources of information and influence, and sequence of purchase decision.
(e) To find out the post-purchase satisfaction level of customers.
3.5 TYPES OF RESEARCH DESIGN
Exploratory Research Design:

This is most commonly unstructured, informal research that is undertaken to gain
background information about the general nature of the research problem. By
unstructured, we mean that exploratory research does not have a formalised set of
objectives, sample plan, or questionnaire. It is usually conducted when the researcher does
not know much about the problem. Often, exploratory research is conducted research
projects.
Uses of Exploratory Research:

1. Gain background Information
2. Define Terms
3. Clarify Problems and Hypotheses
4. Establish Research Priorities
Descriptive Research:
When we wish to know how many customers we have, what brands they buy and in what
quantities, which advertisements they recall, and what their attributes are toward our
company and our competitors, we turn to descriptive research.
Classification of Descriptive Research Studies:

Cross-sectional: One-time measurement, including a sample survey where the emphasis
is placed on a large, representative sample.
Longitudinal: Repeated measurements on the same sample, including a traditional panel
and an omnibus panel.
Causal Research:
This may be thought of as understanding a phenomenon in terms of conditional statements
of the form. E.g.If x, then y. These If then statements becomes our way of manipulating
variables of interest.

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3.6 CONCLUSION
The above has gone to great lengths to explain why research is important, the
methods of carrying out research and the areas of application of research findings. It should
be clear by now that marketing decisions are usually based on some form of research on any
scale. This is to always ensure that decisions taken are in line with the direction of the
marketing effort.
A. MAKE A LIST OF COMMON QUALITATIVE TYPES OF

RESEARCH. CHOOSE AND EXPLAIN THE BEST RESEARCH
METHOD FOR FINDING OUT HOW TO SET UP AND MARKET A
LAWYER'S CHAMBERS
B. FOR EACH TYPE OF QUALITATIVE RESEARCH LISTED ABOVE,

LIST THE ADVANTAGES
C. EXPLAIN WHY COST IS ALWAYS A MAJOR ISSUE IN FORMAL

RESEARCH GIVING FIVE REASONS WHY THIS IS SO.

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CHAPTER FOUR
UNDERSTANDING THE MARKETING MIX
4.1 INTRODUCTION
4.2 OBJECTIVES
4.3 ASSEMBLING THE MARKETING MIX ELEMENTS
i. The Marketing Mix
ii. The Product
iii. New Product Development
iv. Pricing
v. Promotion
vi. Place/Distribution
4.4 CONCLUSION
4.1 INTRODUCTION
The marketing mix is the most important part of the study of marketing. It treats the major
marketing factors and these are Product, Place, Promotion and Price. Each of these factors
deserve a chapter of their own but have been treated together for appreciation of the close-
knit nature and integration of these concepts.
The stages of creating a new marketing mix are also treated and students should note that
this is just an outline of the several stages.
4.2 OBJECTIVES
By the end of the chapter, participants are expected to
a. Understand the notion of the marketing mix as a dynamic strategic concept used for
achieving critical marketing operations mission
b. Understand the complex stages of product development
c. Know the meaning and use of Integrated Marketing Communications for effective
marketing campaigns
d. Use the Product Life Cycle concept to look at product and services and what may be needed
for their success at every stage.
4.3.1 The Marketing mix
This is defined as the set of controllable, tactical marketing variables that the firm blends
together to produce the response it wants in the target market. In other words, the marketing
mix consists of everything the firm can do to influence the demand for its product. It is also
described as the combination of the four inputs that constitute the core of a company's
marketing system: the product, the price, place and the promotion.
4.3.2 The Product

A product is one of the key marketing mix variables on which all the other marketing mix
variables revolve. It cannot be divested from other marketing mix variables because all of
them contribute to form the images of the product from the point of view of the buyers.
These images determine the values and satisfaction expected from a given product and how
much the buyers will offer for it.

25
It is therefore important for the manufacturers and marketers to understand what a product
means to consumers and their expectations from that product.
Definition:
Products can be described as goods, services, ideas, people, places, and even organisations
with acceptable value that are offered for exchange. A product can also be defined as the
bundle of benefits or satisfaction offered to a customer for mutual benefit.
A narrow definition of the word product focuses on the physical or functional characteristics
of a good or service. Marketing decision makers must acknowledge this broader conception
of product; they must realize that people buy want satisfaction rather than objects.
A broader view of product extends beyond physical or functional attributes. This total
product concept includes package design and labelling, symbols such as trademarks and
brand names, and customer service activities that add value for customers. Consequently, a
product is a bundle of physical, service, and symbolic attributes designed to enhance
consumer want satisfaction.
Components of a product
Any product consists of several parts
The product itself
The product name brand
The packaging
The brand properties colours, composition and Unique Selling Points.
The main product however has several levels but the key ones are as follows:
Product Levels
This can be illustrated with the aid of a diagram as shown below:
POTENTIAL PRODUCT
AUGMENTED PRODUCT
BASIC PRODUCT
CORE PRODUCT

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Levels of a Product
A. The CORE product
This is NOT the tangible, physical product.
This is the BENEFIT of the product that makes it valuable to you.
For example with a car, the benefit is convenience i.e. the ease at which you can go where
you like, when you want to and the speed since you can travel around relatively quickly.
B. The BASIC OR ACTUAL product

This is the tangible, physical product. You can get some use out of it.
Again with the car example, it is the vehicle that you test drive, buy and then collect it.
C. The AUGMENTED product

This is the non-physical part of the product. It usually consists of lots of added value, for
which you may or may not pay a premium. So when you buy a car, part of the augmented
product would be the warranty, the customer service support offered by the car
manufacturer, and any after-sales service.
D. The Potential Product or Formal.
This consists of all the possible augmentation and transformation the product might
undergo in the future, just as we have new products in our markets daily due to
modification and diversification undertaken by manufacturers. This was not shown above
as it is dependent on the choice of the marketer and is always defined by future designs.
Types of Products
Products have been classified in several ways but in marketing the focus is on a basic grouping of
products into 3 classes:
A. CONSUMER PRODUCTS These are goods meant for direct consumption by the buyer
or customer. These can be further reclassified as
Convenience Products
Shopping Goods
Specialty Goods
Unsought Goods
Let us briefly discuss each:

Convenience Products: Goods and services that consumers want to purchase frequently,
immediately, and with minimal efforts are called convenience products. Sales of
convenience products usually hinge on brand names and low prices. Three subcategories
further distinguish them from one another: staples, impulse and emergency items. Retailers
of convenience products usually carry several competing brands and devote little
promotional effort to any particular one.
Examples of convenience goods are as follows: Impulse Items- films, snack foods,
magazines; Staples: Gasoline, bread, milk. Emergency Items: candles, bandages, antiseptics
cream, minor plumbing supplies.
Shopping Goods: In contrast to their purchases of convenience product, consumers buy

shopping products only after comparing competing stores on such characteristics as price,
quality, style, and color. Shopping products typically cost more than convenience products.
The category includes clothing, furniture, appliances, jewelries, and shoes. Several
important features distinguish shopping products: physical attributes, service attributes,

27
(warranties and after sales service terms) prices, styling, and places of purchase. For
example, a store's name have considerable influence on consumer buying behavior. The
brand of a particular product often has less important effects, in spite of the large amount of
money that manufacturers spend promoting these offerings. Buyers and marketers treat
some shopping products such as refrigerators, and washing machines, as homogeneous
products. To the consumer, one brand seems largely the same as another. Marketers may try
to differentiate homogeneous products from competing products in several ways. Here,
they may emphasize price, and value, or they may attempt to educate consumers about less
obvious product features that contribute to a product's quality and appeal. Other shopping
products seem heterogeneous due to essential differences between them. Examples of
heterogeneous shopping products include furniture, clothing, and vacation destination.
Rather, obvious differences in features often separate competing heterogeneous shopping
products in the minds of the consumers. Characteristics such as color, style, and fit affect
consumer choice.
Specialty Products:
Specialty Products offer unique characteristics that cause buyers to prize those particular
brands. These products typically carry high prices, and many represent well-known brands.
Purchasers of specialty products know just what they want and they willingly make special
efforts to satisfy those wants. Buyers of such product, begin with complete information, and
they refuse to accept substitute. Because consumers are willing to exert considerable effort to
obtain specialty products, producers can promote them through relatively few retail outlet.
Distribution of specialty products is very limited.
Unsought Products:
A product that is unknown to the buyer or a known product that is not actively sought for is
an unknown product. Consumers do not seek out unsought products until they are made
aware of or need the products. Examples of unsought products include cemetery plot,
medical services, and insurances. Personal selling is often needed to market these products
successfully.
B. INDUSTRIAL GOODS These are goods meant for the production of other
goods either by repackaging or reprocessing. These can be further classified into the
following:
Installation items
Equipment, Tools and Accessories
Raw Materials
Semi-Processed Components and Parts
Consumables and Operating Supplies
Let us critically analyze the components of Industrial goods.
Installation Items:
The specialty products of the industrial markets are called Installations. This classification
includes major capital investments for new factories and heavy machinery,
telecommunications systems etc. Since installations last for relatively long periods of time
and their purchases involve large sums of money, they represent major decisions for
organizations. Here, negotiations often extend over several months and this involves
decision makers.

28
Accessory Equipment:
Only a few decision makers may participate in a purchase of accessory equipment-capital
items that typically costs less and last for shorter periods than installations. Although quality
services exert important influences on purchases of accessory equipment, price may well
significantly affect these decisions. Accessory equipment includes products such as hand
tools, portable drills, small lathes etc. Marketing these products requires continuous
representation, and it must cope with the widespread geographic dispersion of purchasers.
To cope with these market characteristics, a wholesaler often called an industrial distributor,
contact potential customers in its own geographical area.
Component Parts and Materials:

Whereas business buyers use installations and accessory equipment in the process of
producing their own final products, components parts and materials represent finished
business products of one producer that actually became part of the finished products of
another producer. Purchasers of components parts and materials need regular, continuous
supplies of uniform-quality products. They generally contract to purchase these products
for periods of one year or more. Again, marketers commonly emphasize direct sales, and
satisfy customers often become permanent buyers. Wholesalers sometimes supply fill-in
purchases and handle sales to smaller purchasers.
Raw Materials:
Farm products, such as beef, cotton, eggs, milk, poultry, and soya beans and natural
products such as coal, copper, iron ore, and lumber, constitute raw materials. These
products resemble component parts and materials in that, they actually become part of the
buyers' final products. Most raw materials carry grades determined according to set criteria,
assuring purchasers that they will receive standardized products of uniform quality. As with
component parts and materials, sellers commonly market raw materials directly to buying
organizations, typically according to contractual terms. Wholesalers are increasingly
involved in purchasing raw materials from their foreign suppliers.
Price is seldom a deciding factor in a raw materials purchase, since terms are often set at
central markets, determining virtually identical exchanges among competing sellers.
Purchasers buy raw materials from the firms they consider best able to deliver required
quantities and qualities.
Supplies:
Supplies constitute the regular expenses that a firm incurs in its daily operations. They do
not become part of the buyer's final products. Supplies are sometimes called MRO items,
because they fall into three categories: (1) maintenance items, such as brooms, filters, and
light bulbs. (2) repair items, such as nuts and bolts used in preparing equipment; and (3)
operating supplies, such as fax paper, post-it brand notes, and pencils. Since supply agents
are relatively standardized products, heavy price competition frequently keeps costs under
control.
Business Services:
The business services category includes the intangible products that firms buy to facilitate
their production and operating processes. Examples of business services are financial
services, leasing and renting services that supply equipment and vehicles, insurance,
security, legal advice, and consulting. Price often strongly influences purchase decisions for
business services. The buying firm must decide whether to purchase a service or provide it

29
through internal staff. For example, a firm may purchase the services of a public relations
agency rather than assume the costs of maintaining an in-house public relations
department. This decision may depend on how frequently the firm needs the services and
the specialized knowledge required to provide it. Purchase decision processes vary
considerably for different types of business services. By contrast, a purchase decision for
highly specialized environmental engineering services requires complex analysis and
perhaps lengthy negotiations similar to those for purchases of installations.
C SERVICES - these are intangible services offered to the customer and public. They
are usually 'tangibilized' with physical goods and items.
The Product Life Cycle

The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is
planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots
as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink
and die out (decline).
After a period of development, a NEW PRODUCT is introduced or launched into the

market; it gains more and more customers as it grows; eventually the market stabilizes and
the product becomes mature; then after a period of time the product is overtaken by
development and the introduction of superior competitors, it goes into decline and is
eventually withdrawn.
However, most products fail in the introduction phase for several reasons.
Others have very cyclical maturity phases where declines see the product deliberately
promoted to regain customers.
Strategies for the stages of the Product Life Cycle.

The PLC is a theoretical tool used for managing the life cycle of a product and all marketing
factors have different effects on each stage.
It is important to identify the roles of each factor in managing each stage. Each product type
tends to have different patterns of this same life cycle concept.
The PLC stages:
1. Introduction
This generally covers the stages of product development till the product is introduced
into the market. The initial stages are long but once the product picks up it tends to
grow quickly.
The need for immediate profit is not a pressure. The product is promoted to create
awareness. If the product has no or few competitors, a skimming price strategy is
employed. Limited numbers of the products are initially available in the channels of
distribution.
2. Growth.
At this stage, the product is getting known and it tends to grow rapidly.
Competitors are attracted into the market with very similar offerings. Products
become more profitable and companies form alliances, joint ventures and take each
other over. Advertising spend is high and focuses upon building brand. Market share
tends to stabilize and profitability only gradually develop.

30
3. Maturity
At this stage the product already has clearly discernible presence with loyal
customers and defined distribution channels. The careful marketer at this point takes
steps to consolidate the product by highlighting new uses, re-launching and running
promotions to sustain the brand. Competition tend to be keen and any careless
move may determine the future of the product.
Those products that survive the earlier stages tend to spend longest in this phase.
Sales grow at a decreasing rate and then stabilize. Producers attempt to differentiate
products and brands are key to this. Price wars and intense competition occur.
At this point the market reaches saturation. Producers begin to leave the market due
to poor margins. Promotion becomes more widespread and uses a greater variety of
media.
4. Decline
At this stage there is a downturn in the market. For example more innovative
products are introduced or consumer tastes have changed.
There is intense price-cutting and many more products are withdrawn from the
market. Profits can be improved by reducing marketing spending and cost cutting.
Graphic illustration of the Stages of the Product Life Cycle
Using the Product Life Cycle Concept

In reality, very few products follow such a prescriptive cycle as the Life Cycle Concept.
The length of each stage varies enormously. The decisions of marketers can change the stage, for
example from maturity to decline by price-cutting. Not all products go through each stage. Some go
from introduction to decline.
It is not easy to tell which stage the product is in but this is a valuable strategic tool for assessing one's
product against competition. Changing the strategies for each phase can make the product catch up
with or deal with competition.
4.3.3 NEW PRODUCT DEVELOPMENT

One of the strategies for coping with stages of PLC is new product development.
But are there new products? Very few products are really new.

31
Developing new products is one way to innovate but very few new products are
really new. New products can be any or all of the following:
New product lines which are related to main products because they do similar things
Additions to existing lines: these are product line extensions which are new to the
extent that
they meet consumer desire for variety
Capitalize on latent consumer demand
Utilize excess capacity
Match successful line extension strategy of competitor
Command more attention from intermediaries
The stages of new product development can be long depending on the objectives.
These are summarized in the diagram below:
THE STAGES ARE SELF EXPLANATORY BUT IT SHOULD BE NOTED THAT AT
EVERY STAGE THERE IS THE POSSIBILTY OF GOING BACK TO ANY OF THE
PREVIOUS STAGE TO GET A DESIRABLE RESULT.
STAGES OF NEW PRODUCT DEVELOPMENT
STAGES OF NEW PRODUCT DEVELOPMENT

As discussed above, product development is usually based on a number of factors and always a
major corporate objective.
It goes through a number of stages some of which are summarized below. It should be noted that
this summary has a built-in feedback system to ensure successful product development.

32
STAGES PROCESS PROCESS DETAILS
IDEAS GENERATION Develop a number of From imitation,
Ideas Research, Brainstorming
SCREENING Isolate a few ideas Ideas are rated and eliminated

to a few
BUSINESS ANALYSIS Do a Financial Analysis Estimate input costs. Rate
of Return, Capital Outlay and
all expenses
PRODUCT CONCEPT Identify Product Isolate market segments, do
carefully selecting one Positioning of product and
with an option. workout engineering details
PRODUCT Develop physical

DEVELOPMENT Dummy, Try Packaging Work out Production cost,
Alternatives Product message and Packaging
MARKET TESTING Identify Marketing Test Product Rough, Test
Mix, source funding message and packaging
PRODUCT REVIEW Review and redevelop Finalize Packaging, select
based on market Test Pricing options. Finalize
Results packaging and message
PRODUCT Carryout Product Review with the sales team,
INTRODUCTION launch in selected develop sales strategy, review
markets Pricing and carry out Advertising

Rollout.
4.3.4 PRICING
WHAT IS PRICE?
Price is a value, or sum of money at which a supplier of a product or service and a buyer
agrees to carry out an exchange transaction. Price relates to the generation of total revenue
and, hence, its importance in the marketing mix and to small business companies.
Economically, price assists in allocating products and matching them to market
opportunities from increases and decreases in demand.
Price takes various forms, namely:

1. Fees charged by a lawyer
2. Premium charged by an insurance company
3. Rent paid for the use of building or an equipment
4. Toll fees charged for the use of a bridge or road
5. Taxes paid for government services
6. Interest charged for or paid on loan or deposit respectively
7. Selling price of a product.

33
TYPES OF PRICES
There are two main types of prices:
The Fixed price this a price about which buyer cannot do anything. He either accepts or
steps away.
The Negotiable price this is a price on which the seller and the buyer negotiate to arrive at
an agreed price.
FACTORS THAT DETERMINE A PRICE:

The following are factors used setting up pricing strategies and for fixing the price of a
product.
Level of market demand
Nature and Pricing Levels of competition in the market
Market segment and Customer type
The Channels of Distribution
Consumer Perception (this can be stimulated)
Product Development costs
Production Costs
Cost of money and other financial indices
Pricing Objectives
The pricing objectives of a business, firm includes the following:
1. Profit-centred objectives
2. Volume-centred objectives
3. Status-quo objectives
4. Survival objectives
5. Return on investment
6. Cash flow objective
7. Product quality objective
8. Sales growth and expansion objectives
9. Product line promotion objective
PRICING METHODS
The simplest pricing method structure involves the addition of a mark-up to the total cost of
producing or obtaining a product.
The Price Structure can be simply explained in terms of costs and other elements put into the
production of a planned volume of an item; as follows:
PRICE= TOTAL COST + PERCENTAGE MARK-UP

PRICE= TOTAL COST + PROFIT MARGIN (usually an anticipated or planned %)
PRICE = TOTAL COST +(GROSS PROFIT MARGIN LESS DISCOUNTS)
The Methods used in calculating the Total Cost is important to pricing and is used for
describing the common pricing concepts. The price depends on how costs are defined and
formulated.
The two common methods are referred to as ABSORPTION AND CONTRIBUTION

METHODS respectively.

34
1. ABSORPTION COSTING
This method attempts to account for all production and overhead costs by absorbing
them directly into the units of output produced. It can be calculated simply as:
UNIT PRICE = STANDARD DIRECT MATERIALS COST + STANDARD
LABOUR COST + OVERHEAD ALLOCATIONS + PROFIT MARGIN (all
calculated for one unit).
The above has used a lot of assumptions in terms of fixed costs. These are costs
derived and fixed by the accounts department.
2. CONTRIBUTION COSTING
This can be defined as the price determined from the difference between net sales
revenue and total variable cost. This Approach uses identifiable elements of cost in a
unit of volume produced as output.
The following factors are relevant when using this method:
Direct materials used
Direct labour actually required to make the product
Other attributable costs such as power, packaging etc.
There two main categories of cost used to determine the variable costs:
1. Variable costs as listed above
2. Fixed costs such as property costs and rent, marketing costs, administrative and sales
costs, etc.
The general objective is to maximise contribution yield from the product or services
sold into the market.
Contribution is the difference between net sales revenue and total variable cost.
Contribution=Net Sales Revenue - Variable Cost (The Net Sales Revenue is Gross Sales
Revenue Less Fixed Costs Less Discounts)
The above implies that after calculating contribution it becomes easy to derive the price as
stated below:
Price = Variable Cost + Contribution

The point here is that contribution costing is more flexible and takes care of the
variable costs effects on the price allowing a more flexible pricing strategy.
PRICING STRATEGY
There are several strategies that can be based on pricing when related to other members of
the marketing mix. The pricing objective will lead to the appropriate strategy to be adopted
for a product.
The positioning of the product and a number of other product factors determine the pricing.
Some products are priced to yield HIGH Contribution thus supporting weaker products.
Some products are priced to yield no contribution but to act as BAIT to attract sales to other
products
The pricing of the product is therefore an important strategic tool.

35
PRICING STRATEGY MATRIX
QUALITY PRICE
HIGH PRICE MEDIUM PRICE LOW PRICE
HIGH QUALITY Premium Pricing Penetration Pricing Super value Pricing
MEDIUM QUALITY Over Pricing Average Pricing Value-for-money
LOW QUALITY Hit and Run Pricing Shoddy Goods Pricing Cheap Goods Pricing HEAP
The above matrix suggests the probable choice to be made when faced with different quality of
products from the low quality to the high. The suggested pricing levels is also related to the product
positioning.
4.3.5 PROMOTION
The promotional element consists of activities that create awareness, stimulates
interest and persuades customers to buy the product. It is a combination of marketing and
promotional communication methods to achieve the promotional objectives of the
marketing mix.
Promotional activities consist of various means of communicating persuasively with the

target audience. In each case a communication message is developed, and used for any or
all of the promotional activities designed for the marketing effort.
The important promotional methods are:
* Personal Selling.
* Sales Promotion.
* Public Relations (and publicity).
* Direct Marketing.
* Trade Fairs and Exhibitions.
* Advertising
* Packaging.
* Merchandising (and point-of-sale).
* E-Marketing (and Internet promotion).
Of the above the most important are the under listed. These drive all the other promotion
methods.
(a) Advertising this is when an identified sponsor pays selected media such as Radio,
Television, Press, Outdoor etc to transmit messages to target consumers. The
messages are passed through paid advert slots as part of a total campaign.
Functions of Advertising
1) To deliver a product message to a selected audience using an
advertising medium
2) To educate the customer about the features and functions of the
product
3) To inform the customer of any issues about a product
4) To convince the customer to try and or patronise the product by
using the best media.

36
(b) Personal selling sales representatives are employed by the firm engaged in
interpersonal communication with individual consumers and prospective customers
for the main purpose of encouraging patronage of a product or service.
Functions of selling
a. to make products and services available to all classes of customers
b. involves the offer of goods and services in exchange for payment.
c. ensures the changing of personal attitudes towards the product by personal
and other modes of contact
d. establishes conviction of the would-be buyer
e. moves the customer to the point of purchase
f. reassures the customer about the company and its products
(c) Sales promotion the marketer utilizes displays, demonstrations, premiums,
contests, or similar devices to supplement advertising and personal selling to
communicate a specific message or product intention.
Functions of Sales Promotion

1) to communicate a special message about the product
2) develop the image of the product
3) to complement other marketing elements (marketing mix)
4) to achieve consistency of sales to the trade with sales to the
consumer
5) to achieve corporate and marketing objectives
(d) Publicity and public relations product messages are sometimes communicated
through explanation and indirectly using both publicity and public relations to
stimulate supportive news items about the firm and its products that have greater
credibility with the public than advertising. These are not DIRECTLY paid for like in
advertising.
Functions of Publicity
1) To achieve some product message communication.
2) It provides broad communication messages
3) It always carries the indirect endorsement of the medium used as
it is not directly paid for
4) It is persuasive and tries to convince the customer to have a
positive feeling for the product
5) Highly influential if tied to favoured public activities
(e) Direct Marketing - Direct Marketing involves a direct promotional, sales, and
supply relationship between the enterprise and the customer or consumer. This is a
step away from the standard selling processes and includes all aspects of internet
marketing.
It involves the use of the following techniques:
1. Direct Mail
2. Internet On-Line Marketing or e-business
3. Mail Order
Each of the above is a complete subject of study and therefore play their own roles in
the Advertising campaign.

37
Reasons for Direct Marketing
1. To cut out the use of channel intermediaries
2. To stimulate direct customer relationships and feedback
3. To speed up marketing transactions
4. To make use of latest technological advances to achieve marketing objectives
4.3.6 Place/Distribution
Channels of distribution provide the link between the supply or production and the
consumption.
The marketer must have distribution objectives having achieved a good and well priced
product. These objectives have to be achieved on a consistent and continuous basis.
Distribution can be defined as the management process of ensuring that the company's
goods are where they are needed, at the right time, in the right condition, and are always
properly accounted for.
POSSIBLE DISTRIBUTION OBJECTIVES

The following are some of the objectives that can be set for the selected channels of
distribution to achieve;
appropriate and adequate distribution
access to the market and to target market customers
relative cost effectiveness in access and transaction value
competitive representation and reseller effort
reseller motivation
competitive representation
revenue returns from resellers
cost effectiveness in physical distribution
cost effectiveness of customer service and backup service
THE DIAGRAM BELOW ILLUSTRATES ALL KEY ELEMENTS INPLACE/ DISTRIBUTION

38
TYPES OF DISTRIBUTION CHANNELS
There are FOUR main common and conventional channel types:
1. Direct Supply
2. Merchant Supply
3. Short Channel
4. Long Channel
DIRECT SUPPLY
The supplier or manufacturer supplies the customer directly.
This is a common feature of Industrial products.
This has now evolved with the advent of Information Telecommunication into the Direct Marketing
Channel subject to some obvious disadvantages.
MANUFACTURER -------------->CUSTOMER
Advantages
1) It allows direct communication and contact with the customer. This assists product and sales
promotion and leads to effective customer feedback.
2) It eliminates the need for a middle man and eliminates a cost point to the advantage of both
producer and customer.
Disadvantages
1) It disturbs product display and merchandising at the retailers end. Customers have to rely on
catalogues and 'remote' viewing.
2) It is not a realistic option for fast moving mass market goods
MERCHANT SUPPLY
The manufacturer supplies a customer through a merchant. Although common with industrial
goods a good number of consumer goods use this channel.
Agents of goods and services who warehouse their supply and sell to resellers are merchant supply
channel members.
MANUFACTURER -----------> MERCHANT ------------> CUSTOMER

Advantages
1) Supply takes place in bulk. This is economic
2) The manufacturer does not have to deal with or distribute small orders.
3) There is reduced risk of non-payment or default.
Disadvantage
The manufacturer is solely dependent on the selling effort of the merchant.
SHORT CHANNEL
The manufacturer supplies the customer in a consumer goods market through a retailer who acts as
the intermediary. This has the disadvantage of increasing the administrative costs of the company
having to cope with so many retailers holding low level of stocks.
Advantages
Minimizes loss of contact with the customer and maximizes control over the retailers.
Disadvantages
It maximizes the number of administrative contacts of the company
This in turn increases exposure to sharp trade practices of some retailers.
39
It exposes the supplier to the clout of large retailers who may want larger trading discounts.
MANUFACTURER ----------> RETAILER -------------> CUSTOMER
LONG CHANNEL
There are two intermediaries and the disadvantage of the long channel is immediately obvious but
it has better reach and ensures better distribution and spreads the cost down the channel to
channel-members.
MANUFACTURER----->WHOLESALER-----> RETAILER-------------> CUSTOMER
Advantages
It is a cost effective means of getting the products to a larger number of retailers.
Bulk orders will be handled from the wholesalers minimizing the level of administrative work.
It simplifies the distribution problems as delivery is usually consistent leading to reliable sales.
Disadvantages
1. There are price problems created by the retailers once the products are well received by
consumers.
2. The possibility of damage or changes to packaging is high this may lead to lower quality
products.
3. There is possibility of very high Channel Noise. These are business related problems that
arises between channel members.
PHYSICAL DISTRIBUTION PRINCIPLES

The Place element or Physical distribution refers to those activities associated with the following
management issues:
1. The physical storage and distribution of goods or the process of making a service available
2. The holding of buffer, goods-in-transit, or work-in-progress stocks
3. Customer ordering procedures
4. Warehouse receipt and issuing systems
Distribution control systems

Distribution can be defined as the management process of ensuring that the company's goods are
where they are needed, at the right time, in the right condition, and are always properly accounted
for.
This definition covers all goods coming in or going out of the company.
Distribution objectives are always in the Company's distribution Policy documents and the
distribution strategy adopted are always a reflection of the objectives.
The customer service element is key to the policy as NO GOODS ARE SOLD UNTIL THEY
HAVE BEEN PAID FOR AND RECEIVED BY THE CUSTOMER.
Measures of distribution effectiveness:
1. percentage of customers satisfied over a particular period relative to total demand.
2. average waiting period or delivery delay before a customer's order is supplied
3. percentage of customer's orders serviced after a delivery period or interval
4. percentage of total demand that can be serviced within a given time limit or sales period.
It should be noted that these measures are also used for SERVICE WAREHOUSES which
are servicing the production line or other customers in the company.

40
INVENTORY MANAGEMENT
Stocks are held for any of these three reasons:
the achievement of customer service objectives
the protection of production processes from variations in demand
permitting the supply of stocks in economic quantities
The efficiency of the warehouse can only be acceptable if carefully handled and monitored. The
implication of stock movement and stock holding can be understood using the 'Pareto' analysis.
PARETO ANALYSIS
This is a principle that assumes that 20% of the stock items in a store account for 60% of the
turnover even though they might only account for 40% of the stock values.
This implies that stock in a warehouse can be divided into three groups: 'A' group which are 20% of
the physical stocks but account for 60% of the turnover; 'B' group which accounts for 60% of total
stocks but 20% of the turnover and 'C' group which accounts for 20% of the stocks but nil% of the
turnover.
Inventory management concentrates on the A group, which gives good return followed by the B
group which can be tolerated while looking for a way to get rid of the C group.
This 40/60 rule has been found to be applicable in most business situations and should be noted.
4.4 CONCLUSION
This is the key chapter in this manual and it has covered the 4 Ps of marketing starting with
The Product, Place, Price and Promotion. Each of the topics were treated to ensure that the
product's role in marketing is pivotal.
The importance of the integration of these processes was emphasized and each of these
concepts should be understood as a part of the total marketing effort.
A. WHAT IS THE MARKETING MIX? WHAT IS THE IMPORTANCE OF THE

MARKETING MIX CONCEPT IN MARKETING A PRODUCT OR
SERVICE?
B. THE CHANNEL OF DISTRIBUTION IS IMPORTANT TO MARKETING.

MAKE A LIST OF ALL POSSIBLE CHANNELS FOR MARKETING A
SERVICE OR PRODUCT.
CHOOSE TWO OF THEM AND MAKE A LIST OF THEIR
DISADVANTAGES.
C. DIFFERENTIATE BETWEEN THE PROMOTION CONCEPT AND SALES

PROMOTION. GIVE REASONS WHY INTEGRATED MARKETING
COMMUNICATION IS USED FOR FAST MOVING CONSUMER GOODS.

41
CHAPTER FIVE
MARKET SEGMENTATION
5.1 INTRODUCTION
5.2 OBJECTIVES
5.3 DEFINITION OF MARKET SEGMENTATION
5.4 CONDITIONS AND BENEFITS OF MARKET SEGMENTATION
5.5 PRODUCT/SERVICE POSITIONING
5.6 CONCLUSION
1.5 TUTOR MARKED ASSIGNMENT
5.1 INTRODUCTION
Every time we observe a service or a product, it is always interesting to try to find out why or
how it came about its specific benefits or why it is patronized by a particular group. The
processes of achieving these attributes are by segmentation and product positioning. These
are treated below.
5.2 OBJECTIVES
By the end of this chapter we expect the student to be able to:
a) explain the term market segmentation
b) discuss the bases for market segmentation
c) explain benefits derived from market segmentation
d) explain methods of segment selection
e) understand how benefits are positioned for a market segment .
5.3 DEFINITION OF MARKET SEGMENTATION

For a good understanding of market segmentation, we need to understand that the concept
assumes that markets exist.
A market is any environment in which exchange of products and services occur between
two separate bodies. It can also have several other meanings as listed below:
(a) A market is a place where people gather to transact business mainly to sell and buy
commodities and other physical goods.
(b) It can be used in respect of the network of institutions like wholesalers and brokers
dealing in a product.
(c) It can also be used to refer to the nature of demand for the product, as when we
speak of the market for soap.
(d) A market can be referred to as people with needs and wants, with enough
disposable income to spend on goods and services provided to satisfy their special
needs and wants and the willingness to expend their income on these goods and
services.
Market segments refer to the sub-classes of the market reflecting subclasses

of wants and the process of conceptually distinguishing segments is known as 'Market
Segmentation'.
A market segment consists of a large identifiable group within a market.

42
Stanton (1981) defines market segmentation as the process of dividing the total,
heterogeneous market for a product into several sub-markets or segments, each of which
tends to be homogeneous in all significant aspects.
5.4 CONDITIONS AND BENEFITS OF MARKET SEGMENTATION

Segment marketing offers several benefits, which include the following:
(a) The company can create a more fine-tuned product or service offer and price it
appropriately for the target audience.
(b) The choice of distribution channels and communication channels
becomes much easier.
(c) The company may face less competition if fewer competitors are focusing on this
market segment.
(d) Segmentation helps a company to exploit its market better by selecting
market niches (suitable segments) that are compatible with its resources.
(e) Segmentation helps in focusing strategies more sharply on target groups.
(f) Segmentation is more likely to result in instilling customers' loyalty since the firm's
offering is better matched with those in the segment.
CONDITIONS FOR SEGMENTING A MARKET

(1) Measurability: The size, purchasing power and profiles of the segments
should be measurable. However, certain segmentation variables are difficult to
measure. For example, Kotler (1997) reported that there were 24 million left-handed
people in the United States almost equalling the entire population of Canada. Yet
few products were targeted towards this segment. The major problem may be that
the segment is hard to identify and measure.
(2) Accessibility: The market segments should be easily reached and served.
(3) Substitutability: The market segments should be large or profitable enough to be
served. A segment should be the largest possible homogeneous group worth
pursuing with tailored marketing programmes
(4) Actionability: Effective programmes should be designed in order to be attractive and
to serve the segment(s) better. A case of this is an hotel.
METHODS OF SEGMENTING A MARKET

There are several methods and factors considered for segmenting a market and
developing a product to suit the market. Some of these are
1. Geographical Segmentation
Geographical segmentation calls for dividing the market into different geographical
units such as nations, states, regions, countries, cities or
neighbourhoods.
A company may decide to operate in one or a few geographical areas, or to operate
in all areas but pay attention to geographical differences in needs and wants.
2. Demographic Segmentation
This consists of dividing the market into groups based on variables such
as age, gender, family size, family life cycle, income, occupation, education, religion,
race and nationality.
Demographic factors are the most popular bases for segmenting customer groups.
One reason is that consumer needs, wants, and usage rates often vary closely with

43
demographic variables. Another is that demographic variables are easier to measure
than most other types of variables.
3. Age and Life Cycle Stage

Consumer needs and wants change with age. Some companies, for
example, use age and life cycle segmentation, offering different products
or using different marketing approaches for different age and life cycle
groups. Marketers must, however, be careful to guard against stereotypes when
using age and life cycle segmentation. For example, a seventy-year old man might be
in wheel chair, while another might be in the tennis court(s). Other elements are
gender, income, etc.
4. Psychographic Segmentation
This involves dividing buyers into different groups based on social class, life styles or
personality characteristics. People in the same demographic group can have very
different psychographic make-ups such as:
(a) Social Class Many companies design products or services for specific social
classes, building in features that appeal to these classes. Wristwatches,
clothing, etc. are good examples of this.
(b) Lifestyle People's interest in various goods is affected by their

lifestyles and the goods they buy express those lifestyles. Examples of this are
films, books, magazines, etc.
(c) Personality Marketers also use personality variables to segment markets,
giving their products personalities that correspond to consumer
personalities. Successful market segmentation strategies based on
personality have been used for products such as cosmetics, cigarettes,
insurance and liquor.
5. Behavioural Segmentation
This involves dividing buyers into groups based on their knowledge, attitudes, uses,
or responses to a product. Many marketers believe that behavioural variables are
the best starting point for building market segments.
a) Occasions Buyers can be grouped according to occasions when they get

the idea to buy, actually make their purchase, or use the purchased item.
Occasion segmentation can help firms build up product usage. An hotelier
can use this variable for his/her hotel rooms.
b) Benefits Sought A powerful form of segmentation is to group buyers

according to the different benefits that they seek from the product. Benefit
segmentation requires finding the major benefits people look for in the product class,
and the kinds of people who look for each benefit. Colgate Palmolive for example,
used benefit segmentation to reposition its Irish spring soap. Others are Close-up,
Maclean, Beauty soap, Dettol soap, Delta soap, etc. Others could be flower and
product appearance, brightness, etc.
c) User Status Markets can be segmented into groups of nonusers,

ex-users, potential users, first-time users, and regular users of a product. Note,

44
potential and regular users may require different kinds of marketing appeals.
d) Usage Rate Markets can also be segmented into light, medium, and heavy-user groups.
Industrial products are easily classified under this, such as: salt, starch, sugar, cement,
roofing sheets, etc.
e) Attitude Towards Product People in a market can be enthusiastic, positive, indifferent,
negative or hostile about a product. These are variables of behavioural segmentation.
5.5 POSITIONING
After the company has correctly targeted the market, the product developed for the market is
then carefully given features that match the peculiar needs of the segment.
DEFINITION
Positioning is the act of designing the company's offer and image so that the target
understands and appreciates what the company stands for in relation to its competition.
FACTORS USED FOR POSITIONING:

Any of the following could be used for positioning a product or a service
Positioning on an attribute
Positioning on benefits
Positioning on price/quality
Positioning on use or application
Positioning by the product user
Positioning against the competition
Positioning by what the product/service is NOT
METHODS OF POSITIONING
Identify your competition.
Determine the attributes consumers use to evaluate this type of product/service.
Determine your competitors' positions on these attributes and your product's
position on these attributes.
Determine the best position and implement activities to establish this position.
5.6 CONCLUSION
The above has shown the processes of segmentation and how it is used for positioning the
product. The student is expected to examine several local service and product and try to find
out how each is positioned and for which segment of the market this was done.

A. YOU HAVE JUST BEEN ADVANCED A LUMP SUM OF MONEY AS A
GRADUATE TO SET UP LEGAL PRACTICE IN AN UP-MARKET BUSINESS
AREA. LIST THE FACTORS TO BE CONSIDERED IN SETTING UP THE
PRACTICE FOR BUSINESSMEN.
B. LUXURY BUSES DO NOT DO WELL ON RURAL ROADS. USING THE

CONCEPT OF MARKET SEGMENTATION AND POSITIONING, GIVE
REASONS WHY THIS HAS BEEN SO.
A. LIST THE SEVERAL SEGMENTS OF THE NIGERIAN FINANCIAL MARKET

AND TO WHICH YOU A LIKELY TO BELONG AS A SHAREHOLDER OF
100,000 SHARES OF NIGERIAN BREWERIES PLC.
45
CHAPTER SIX
MARKETING ORGANIZATIONS
6.1 INTRODUCTION
6.2 OBJECTIVES
6.3 TYPES OF MARKETING ORGANIZATIONS
6.4 CONCLUSION
6.1 INTRODUCTION
It is important to study concepts on steps to be taken when setting out a marketing structure.
This depends on a number of factors such as
the type of product whether industrial, FMCG or services
the geographical location of market and seasons
quality of marketing training
quality and background of marketing staff
In this chapter we examine three basic types of marketing organizations but what is found in
organizations are various adaptations of any of these models.
Organization is the process of structuring both human and physical resources to accomplish
organizational objectives. Lawal (1993) defined organization as the process of grouping
activities and resources among people and systematically integrating the groups in a unified
system. Drawing from the above, marketing organization can simply be defined as the
process of structuring both human and physical marketing resources of an organization to
accomplish its marketing objectives efficiently.
6.2 OBJECTIVES
By the end of this chapter, students are expected to be able to
a. Understand the need for effective marketing organizations
b. Identify the possible types of marketing organizations
c. Understand the advantages of having the marketing organization
d. Be able to review a marketing effort and recommend an organization that works.
Evolution of Marketing Organization:

Kotler (2000) noted that marketing organization has evolved through six stages, companies are
found in each of the stages even today.
Stage 1. Simple sales Department: Here, company appoint sales manager, who manages the sales
force and also sell the company's products. Other marketing services of the company are
outsourced.
Stage 2. Sales Department with ancillary marketing services: The head of sales appoints marketing
manager who perform some marketing functions while other marketing functions are outsourced.

46
Stage 3. Separate Marketing Department: There are head sales and head of marketing that
separately report to the CEO. The first time in the evolution where sales and marketing are
separated.
Stage 4: Modern Marketing Department: There are sales and marketing directors. There are
also heads of sales and marketing department, but they are continually having conflicts. Sales want
to be more relevant in the marketing mix, while, marketing seeks bigger budgets in non-sales force
efforts. Marketing is responsible for opportunity identification and marketing programmes
development while sales is responsible for their implementation.
Stage 5. Effective Marketing Company: Ideally in an effective marketing company every

organizational member should be marketing conscious and their responsibilities should be
customer satisfaction efforts/responsibilities.
Stage 6. Process and Out-come based Company: Many firms are focusing their structure on
key organizational process rather than departments. Such process like new product development,
customer service, customer acquisition and retention and order fulfillment are now managed by the
team leaders having in the team cross disciplinary human elements. Marketing and sales personnel
are team members in these cross-disciplinary teams.
Each marketing and sales personnel in the teams are periodically evaluated and their performance
sent to the marketing and sales department. Under this arrangement, marketing personnel have
solid line responsibility to their teams while a dotted line responsibility to the marketing department.
6.3 TYPES OF MARKETING ORGANIZATION

There are several factors responsible for the way the marketing organization is structured.
Some of these are:
1. The priority of the marketing function in the order of the affairs of the business.
2. The size and structure of the organization
3. The relative importance of the sales force within the promotional and marketing
mix of the organization.
6.4 THE SALES ORIENTED MARKETING STRUCTURE

47
The above diagram shows a model commonly found in organizations that are focussed more on
selling the products than on responding to the dynamic needs of the products. Several marketing
functions are lumped into selling functions.
The use of this structure is partly in response to the products or services offered by the company.
The focus of this type of structure is on selling.
The Sales Administrative Manager handles Marketing Research and Product matters while the
Promotions Manager concentrates on the Advertising and Media issues only.
In place of the above functional marketing organization, the company has to make a choice
between a Product Oriented Marketing Organization or a combination of both Sales and Marketing
oriented organization.
Some of the advantages of the sales oriented type of marketing organization are:
1. The company is closer to the consumers
2. Response time to customer complaints are shorter leading to customer confidence in the
company
3. It is easier to manage prices and achieve better profitability
4. There are fewer marketing staff, thereby reducing costs
5. Management responds faster to the needs of the sales team due to closeness to customers
6. Higher sales are easier to achieve.
FUNCTIONAL PRODUCT- BASED MARKETING ORGANIZATION
The above shows THE PRODUCT BASED marketing organization with the introduction of a
marketing director's position on the board.
Reporting directly to the Marketing Director are a number of senior positions as shown below. Each
has responsibility for a specific part of the marketing mix.
It should be noted that hybrid structures come up in companies where both industrial products and
consumer products have to be marketed. This can place a strain on the structure leading to
conflicts. It is recommended that such marketing structure be split into functional units.
The advantages of this type of marketing organization are

1. Enables the handling of a large number of products
2. Allows the direct management of each element of the marketing mix for maximum results
and achievement of goals

48
3. Involvement of several professionals result in high quality marketing results
4. Makes it easy to research and develop new products
5. Quality of products are high and consistent
INTEGRATED MARKETING ORGANISATION
This is a typical modern marketing organization. The marketing function is broken into two
parts. The core marketing function is managed by the Marketing Director and the unit carries out
activities of the functional marketing organization. The second unit handles all aspects of
marketing communications, e-business and advertising. The organizational structure has a lot
of advantages but is very expensive to operate.
6.5 CONCLUSION
It is recommended that students should visit marketing organizations to see the practical
application of the above models. They will show several variations but this would make for
better understanding of the models listed above.
The type of marketing organization will always reflect the nature and requirements of the
product.
A. DESIGN A MARKETING ORGANIZATION STRUCTURE FOR A BAKERY THAT

SPECIALIZES IN THE SALE OF CAKES AND BREAD TO FAST FOOD JOINTS.
B. IN A HYBRID ORGANIZATION, LIST THE LIKELY FUNCTIONS OF AN

ADVERTISING MANAGER AND THE ON-LINE MANAGER.
C. DISCUSS THE IMPORTANCE OF THE EVOLUTION OF MARKETING IN THE

SOCIETY.

49
CHAPTER SEVEN
MARKETING CONTROL
7.1 INTRODUCTION
7.2 OBJECTIVES
7.3 MARKETING CONTROL AND ROLES IN MARKETING BUDGETS
7.4 METHODS OF CONTROL
7.5 CONCLUSION
7.1 INTRODUCTION
The need for control is a built-in assumption for all aspects of management. In marketing,
these control measures are critical because of the continuous flow of marketing and sales
data, some of which cover expenses as well as income that relates to the corporate
profitability. In this chapter, we have examined a few of those factors that we need to be
aware of in studying marketing controls.
7.2 OBJECTIVES
By the end of this chapter, the student will be expected to
a. Define marketing control
b. Identify the important marketing control factors built into marketing
c. Understand the implications of the absence of marketing controls
d. Understand the functions of each type of controls
7.3 MARKETING CONTROL AND ROLES IN MARKETING BUDGETS

Due to the volume of responsibilities of the marketing department, the budgetary allocations
are usually heavy. This results in the special requirement for marketing control.
The first step in marketing control is to endeavour to identify the areas of control. Some of
these are obvious while others though less obvious have profound effect on the results for a
given period.
Some of the responsibilities of the Marketing Controller are as follows:

a. monitor and maintain record of adherence to profit plans
b. maintain close control of media expenses
c. prepare budgets for all brands
d. measure the efficiency of promotions relative to budget and objectives
e. monitor media production costs
f. evaluate profitability across channels
g. prepare and monitor sales and other promotion budgets
h. maintain consistent market audit records and activity.
From the above, the information required by management means that a monitoring system
is built into the marketing department that ensures that the information required is passed on
to management in a timely manner.

50
7.4 METHODS OF CONTROL
Most organizations build management systems peculiar to their operations and in reality
very few organizations have the same structure except where they share a board or other
resources. The in-built checks and balances built into operations contain the mechanisms
for control. These determine the level of efficiency and smoothness of operation.
Marketing control systems are similar controls built into the marketing unit of the
organization and these depend on some tools developed to manage the huge marketing
funds and how they are used for operations.
The following are some of the marketing control tools that are built into the functions of
marketing and other personnel in the sales and marketing units as well as departments that
support these operations:
SALES ANALYSIS: This is an instrument that is developed from the sales targets of
respective sales managers. Each sales crew sends in its sales analysis which is compared to
the sales analysis from the Accounts Department to establish the true sales position. The
sales figures are then collated and summarized for comparison with targets, the budget and
the annual plan. The level of control is at the Sales Manager's or Marketing Manager's level
MARKET SHARE ANALYSIS

The position of the products on display can seldom confirm how the product is faring on the
market. The market share index is a powerful tool for monitoring the progress of the product
on the market. This is a powerful tool especially where there is competition.
Methods of finding market share:

Overall market share is determined by comparing the company sales figures with the
industry sale figures. The percentage contribution to the national figure is the market share
index. This can however be misleading for fast moving consumer goods (FMCG).
A simple method is also to do a market presence survey against competition in randomly

selected locations. The figures are gathered for own products and competition and when
this is done nationally, can provide a global picture to confirm the quantitative market share
calculated.
MARKETING EXPENSES-TO-SALES RATIO

The accounts department by function keeps the records of all expenses. However, it is
necessary for the marketing department to keep its own records of authorized marketing
expenditure. The manager compares how much was spent against goods sold and can
determine the cost of selling one item of a specific product. This can be used to moderate
sales expenditure and maximise product profitability.
Apart from acting as check on account's data, it allows an on the spot monitoring of the
marketing budget. These records are best kept on individual product basis.
FINANCIAL ANALYSIS
The marketing manager must ensure that a thorough financial analysis is done with the
accounts department. This helps to identify the factors responsible for the achieved rate of
returns. For example, the cost of keeping the distribution channels can be compared with

51
the expected profitability or budget for each product. Channels can also be compared with
each other.
CUSTOMER ATTITUDE TRACKING

It is important to set up structures for monitoring the customer and their attitudes. These
structures are in addition to the monthly and periodic reports coming in.
Channel noise (the level of conflict among customers) is an important index for managing
distribution channels and developments that may lead to problems if not monitored and
controlled.
PROFITABILITY CONTROL
This is the effort made to keep a tab on the profitability ratio through the accounting reports
forwarded by the Accounts Department. The contribution of each product to the corporate
profitability can be major determinant of the level of support or the pattern of growth for that
product. The profit and loss statement is the starting point because this is where cost heads
are detailed with the corresponding expenses and their effects on the net profit.
MARKETING CONTROL OPERATIONS

It is normal to have the control functions vested in other departments like the accounts and
the audit. It is however critical to good marketing management to consciously set up the
machinery for the above controls within the marketing department. Each of the control units
are encouraged to feed the marketing department with the indices on a periodic but steady
basis. It is not unusual in big organizations to give such functions to a marketing controller
who is usually a senior manager with enough authority to call for needed reports.
Most organizations use the audit unit to confirm the marketing controller's findings.
7.5 CONCLUSION
From the above, the critical function of marketing control has been identified and some of
the indices examined. It would be seen that the need for marketing control is a practical and
on-going function that must be studied and understood.
A. DESIGN A SIMPLE WEEKLY REPORT FOR A SALES MAN SELLING SIM

CARD AND RECHARGE CARDS FOR A TELECOMS COMPANY
B. AN ACCOUNTANT WAS INSTRUCTED TO VISIT A SALES LOCATION IN

MAIDUGURI.
MAKE A LIST OF HIS LIKELY OBJECTIVES GIVING TWO REASONS WHY
EACH OBJECTIVE IS NECESSARY AND THE TYPE OF CONTROL EACH
REPRESENTS.
C. WHAT DO YOU THINK A MARKET AUDIT REPORT OF THE FINANCIAL

DIRECTOR WILL CONTAIN WHEN HE CHOOSES TO VISIT THE
SUPERMARKETS IN YOUR AREA?

52
CHAPTER EIGHT
PROBLEMS AND PROSPECTS OF MARKETING IN NIGERIA
8.1 INTRODUCTION
8.2 OBJECTIVES
8.3 UNDERSTANDING THE MARKETING ENVIRONMENT AND ROLE IN
CORPORATE MANAGEMENT IN NIGERIA
8.4 CONCLUSION
8.1 INTRODUCTION
The Nigerian marketing environment is where all students are going to operate. This
chapter discusses the macro and micro environment to ensure some understanding of our
environment and what we are likely to meet.
8.2 OBJECTIVES
By the end of this chapter, students are expected to be able to
a. Identify the relevant factors in the Nigerian marketing environment
b. Understand the role of each of these factors in the marketing effort of any
organization
c. Appreciate the need for change in the marketing approach of organizations
8.3 UNDERSTANDING THE MARKETING ENVIRONMENT AND ROLE IN

CORPORATE MANAGEMENT IN NIGERIA
There are several theoretical tools for assessing and reviewing marketing environments in a
geographically delineated market. These have not been applied here.
The Nigerian marketing environment can be divided into the micro environment and the
macro environment for ease of review.
The micro environment refers to the classes of enterprises and their consumers.
Macro environment refers to those environments that are beyond direct control of the
business
The technological environment
The economic environment
The social environment
The natural or physical environment
The institutional/political environment
THE MICRO ENVIRONMENT OF THE COMPANY/ENTERPRISE

This can be analyzed using the following approaches:
Internal Analysis
The internal analysis is a comprehensive evaluation of the internal environment's potential
strengths and weaknesses.

53
Factors should be evaluated across the organization in areas such as:
Company culture
Company image
Organizational structure
Key staff
Access to natural resources
Position on the experience curve
Operational efficiency
Operational capacity
Brand awareness
Market share
Financial resources
Exclusive contracts
Patents and trade secrets
The internal environment dovetails into the Macro environment but the factors can only be
isolated and used by carrying out an external analysis for the company.
External Analysis
Opportunities can arise when changes occur in the external environment.
Many of these changes can be perceived as threats to the market position of existing
products and may necessitate a change in product specifications or the development of new
products in order for the firm to remain competitive.
Changes in the external environment may be related to the following:
Customers
Competitors
Market trends
Suppliers
Partners
Social changes
New technology
Economic environment
Political and regulatory environment
THE MACRO ENVIRONMENT

As discussed above, these consist of the following factors:
THE DEMOGRAPHIC ENVIRONMENT

This is the basis for the customers who are patronizing the Nigerian environment. The rate
of population growth is a major concern across the world. The profiles of our customers
depends on the population pattern. It was shown that the Nigeria population has a very
large segment made up of young unmarried individuals below 25 years of age. The
population age mix is very important in identifying their needs and the products and service
offerings.
THE TECHNOLOGICAL ENVIRONMENT

Industrial Engineering
This is as diverse as the several foreign countries investing in the different sectors of the
economy.

54
The Chinese, the Koreans, the Germans and other Europeans dominate different sectors of
the economy.
The implication of this for the marketing environment is that there is no Nigerian
technology, not even a hybrid! This has its consequences on the marketing environment.
It could be a source of strength but also a weakness to the marketing environment.
The following are areas of technology that affect the marketing environment:
Electricity:
In spite of the several promises of the Government and relevant agencies to provide
consistent, reliable and adequate power supply, they have failed to do so. This is a major
threat to the marketing environment.
It has however become an opportunity for investors in all areas of the power sector to invest
and be sure of adequate returns.
Information Communication Technology

This is a fast growing sector with opportunities for interested investors. It is a major support
requirement to the marketing environment. Its ability to deliver efficient services has
however been hampered by unreliable power supply.
THE ECONOMIC ENVIRONMENT

Monetary policies
The economic environment is managed through the fiscal policies of the Federal
Government. This affects purchasing power and spread of wealth across the country. The
private sector is a major contributor to the gross domestic product of the country but is also
to some extent bound by these policies.
Crude oil policies

The strong influence of the crude oil input into the economy and the supporting petro-
dollars has been variously reviewed as both a strength and a weakness.
Other Policies
Trade policies of the government have remained inconsistent making forward planning a
problem. The open market principles being partially adopted is also a major hindrance.
Any products not made in the country may be banned, unbanned and re-banned within the
life of government.
THE SOCIAL ENVIRONMENT

Nigeria is a large country both by land mass, by resources and by the sheer number of
cultures of the several societal groups.
This has given the country a robust social environment that can be divided for ease of study
as follows:
LANGUAGE BLOCKS
Each of these blocks is made up of similar habits, mode of consumption, taste or
organoleptic preferences, and cultural preferences. The variety is a potential source
of diverse products and services and a major untapped strength of the Nigerian
market.
55
This diversification is a major strength for the marketing environment.
It however can also be a source of weakness and consequently a threat for global
brands that have little respect for local choices but are already entrenched in the
market
l EDUCATION
The level of education in Nigeria is selectively high depending on which part of the
environment is being focused. This however has continued to deteriorate with
Government apologists talking of an improvement that no one except themselves
see. This is a major weakness and some of the consequences are some multi
nationals bringing in trained hands from other African countries.
The level of truly skilled labor needs to be developed to supply the marketing
environment with skilled personnel.
l PROFESSIONALISM
The National Institute of Marketing has managed to finally galvanize the splinter
marketing associations into one body. This is a very obvious strength for the
marketing environment as marketing professional now have a body to regulate
marketing practice.
The training of marketing professionals is still highly academic with minimum

exposure to applied marketing required for managing the market. The large human
capital available for development is an opportunity waiting to be tapped.
The Consumer Protection Council is a federal government agency which is
struggling to make its impact felt. The Advertising Practitioner's Council has been
around for some time but its impact is still minimal as quite a number of similar
institutions carry out similar functions.
Mass communication is still growing with successful incursion of foreigners especially
South Africans into the country's market. A large number of TV commercials and
radio jingles have foreign sources which is a threat to the growth of the local
production units.
The messages for local television commercials and radio jingles are still poorly
researched.
THE CONSUMER PROTECTION COUNCIL

The functions of the Council shall be to:
(a) Provide speedy redress to consumers' complaints through negotiations,
mediation and conciliation;
(b) Seek ways and means of removing or eliminating from the market hazardous
products and causing offenders to replace such products with safer and more
appropriate alternatives;
(c) Publish from time to time, list of products whose consumption and sale have been
banned, withdrawn, severally restricted or not approved by the Federal Government
or foreign governments;
(d) Cause an offending company, firm, trade, association or individual to protect,
compensate, provide relief and safeguards to injured consumers or communities
from adverse effects of technologies that are inherently harmful, injurious, violent
or highly hazardous;
(e) Organize and undertake campaigns and other forms of activities as will lead to

56
increased public consumer awareness;
(f) Encourage trade, industry and professional associations to develop and
enforce in their various fields quality standards designed to safeguard the interest of
consumers;
(g) Issue guidelines to manufacturers, importers, dealers and wholesalers in relation to
their obligation under this Decree;
(h) Encourage the formation of voluntary consumer groups or associations for
consumers' well being;
(i) Ensure that consumers' interests receive due consideration at appropriate forum
and to provide redress to obnoxious practices or the unscrupulous exploitation of
consumers by companies, firms, trade association or individual;
(j) Encourage the adoption of appropriate measures to ensure that products are safe for
either intended or normally safe use; and
(k) Perform such other functions as may be imposed on the Council pursuant to this
Decree.
ADVERTISING PRACTICE
The Act setting up the Advertising Practitioner's Council of Nigeria (APCON) gives the
council the powers to vet and approve all advertising including the following:
1. Television Commercials
Applicants are advised to forward scripts/storyboards (in color) for approval before
production.
Final production on VHS format PAL system of CD must be submitted for final
approval and the issuance of the Advertising Standards Panel's approval certificate
before being aired.
2. Radio Commercials
Applicants are to submit scripts or scripts/recording to the council.
Final recording must be approved before being aired.
3. Print/Outdoor Advertisements
Professionally produced copy/layout, in color only are required
All other Public Relations must be developed as adaptations from the approved
materials
MONITORING
APCON has a monitoring unit within the Secretariat, and uses the services of a media
monitoring agency. In addition, members of the Advertising Standards Panel and APCON
members provide back-up monitoring service to ensure that advertising agencies,
manufacturers and media organizations conform to the guidelines and other laws of Nigeria
as well as codes of standards and practice.
Members of the public are especially encouraged to report cases of unwholesome
advertisements.
THE NATURAL OR PHYSICAL ENVIRONMENT

The deterioration of the natural environment is a major area of concern throughout the
world. The level of pollution remains a major issue and the Nigerian marketing environment
is suffering from this. A lot of industrial inputs are being replaced with more expensive but
less polluting substitutes.

57
Shortage of raw materials especially naturally existing raw materials has led to high prices
due to over extraction and increasing energy costs.
Climate change is believed to be affecting world food prices due to unpredictable planting
seasons which directly affects the earnings of the majority of the Nigerian consumer
demand. This is both an opportunity and a threat to the marketing environment due to its
implications.
Natural disasters are gradually creeping onto the country as a consequence of global
warming and other local reckless exploitation of natural resources.
These have profound effect on the marketing environment. Examples are the several floods
in dry parts of the country, landslides and erosion consuming whole villages. These are
threats and can have very negative effect on the environment.
THE INSTITUTIONAL/POLITICAL ENVIRONMENT

The unstable and unpredictable political environment continues to be a threat to the
marketing environment as this affects planning. Marketing operations are also affected by
this.
Infrastructure
The provision of basic social services is being played down and this is a major weakness of
the environment that has now transformed to be a threat to the little progress made by
marketers in providing and meeting the needs of the customers. Warehousing and shipping
is a major part of the distribution effort. The infrastructural weakness can be overcome with
good planning and execution of development projects.
Lack of reliable transportation roads, rail, water, lack of medical attention in any good
form, lack of power, un-coordinated and multiple taxation are all threats to the market.
THE CONSUMERS
Consumers are a major part of the macroenvironment, but each individual is in a micro
environment as a consumer.
Customer needs and behavior have only feature in mass media surveys and have not been
fully studied to understand some of the changing needs of the typical customer and be able
to develop products and services unique enough to meet these needs.
Also, very limited studies of consumer behavior on existing markets have been conducted to
understand the ever changing tastes of the several groups of consumers across the country
and the general purchasing behavior of the local investor.
Each consumer group has several subgroups and these can open opportunities of
developing specific products for specific tastes and target markets.
Local tastes and preferences have not been fully tested nor exploited.
This is a major weakness of marketing in Nigeria.

58
8.4 CONCLUSION
It is very clear from the above that the Nigerian environment is robust and dynamic enough
for sustained marketing growth.
We have treated the micro and macro environments and how these align with and
determine the practice of marketing locally. The critical roles played by marketing
professionals are regulated through the several professional bodies set up by law to regulate
marketing practice and protect the consumer. Students are expected to master these to
ensure that they can take advantage of opportunities once they get on the market.
A. YOU HAVE BEEN GIVEN A NEW JOB OF QUALITY CONTROLLER IN

THE QUALITY CONTROL DEPARTMENT OF THE CONSUMER
PROTECTION COUNCIL. BASED ON YOUR READINGS ABOVE, MAKE A
LIST OF AT LEAST TEN KEY RESPONSIBILITIES LIKELY TO BE ASSIGNED
TO YOU.
B. MAKE A LIST OF FIVE IMPORTANT STEPS YOU HAVE TO TAKE TO ENSURE

YOU ARE ACCEPTED AND REGISTERED BY APCON AS AN ADVERTISING
PRACTITIONER.
C. THE NIGERIAN ENVIRONMENT IS QUITE DYNAMIC BUT IS LOADED

WITH A LOT OF INFRASTRUCTURAL LIMITATIONS. AS A YOUNG
ENERGETIC BUSINESSMAN YOU HAVE SET UP SHOP AS TELECOMS
RETAILER, MAKE A LIST OF TEN ENVIRONMENTAL ISSUES THAT YOU
WOULD ENCOUNTER AND HOW YOU WOULD DEAL WITH EACH TO
ENSURE THAT YOUR BUSINESS REMAINS PROFITABLE.

59
CHAPTER NINE
CASES IN MARKETING MANAGEMENT
9.1 CASE 1
THE NEW MARKETER

EXXY manufacturing has been producing processed upland rice in Nigeria and has
successfully transited from being a small company into a medium sized company. The
initiative to start packaging local rice was from a newly engaged salesman who was tired of
carrying 50 kilogram bags to customers and making poor sales. The Managing Director and
proprietor was so impressed with the change in cash flow and the consequent jump in sales
from the packaging effort that he decided to engage the services of a consultant to restructure
the company.
The Existing Structure
MANAGING
DIRECTOR
PERSONAL
ASSISTANT
SALES MAN ACCOUNTANT STOREKEEPER
CLERKS LOADERS
EXXY had an initial staff strength of 20 made up of the above and this structure was used to achieve
a turnover summarized below:
YEAR TURNOVER STAFF STRENGTH

N SENIOR JUNIOR
2005 5 million 4 16
2006 6.5 million 4 17
2007 15 million 6 40
2008 45 million 6 70
2009 60 million 7 80

60
The sales man was appointed in 2007 and his suggestion changed the fortunes of the
company and resulted in a turnover growth seen above. Note the heavy reliance on a large
number of junior staff; mostly factory labour leading to stress on the few senior staff and
resulting in taking on a second salesman in 2009 and an increase of the senior staff number
to 7.
The consultant calculated the expected output of the newly installed rice processing machine
and projected a sale of N 200million for 2010. This is a major challenge to the MD and his
friends who are now set up as a Board of Directors based on their contribution to the equity
of the company.
The consultant made the following recommendations to the MD:

i. The setting up of a marketing division
ii. The setting up of a sales department under the Marketing Manager
iii. The packaged rice must be properly branded now that a rice polishing and packing
machine had been installed and was producing
iv. The setting up of proper Production and Accounts divisions to cope with the expected
growth
QUESTIONS:
1. As the newly employed Marketing Manager, prepare a Marketing Plan OUTLINE for
the next three years 2010, 2011, 2012.
2. Describe how you will set about developing a special rice brand too maximize the
returns from this factory and exceed the N200 million projection.
3. What type of marketing structure would you recommend to your division? Give
reasons for you proposals.
4. Describe the type of advertising media to be used for launching the new product.
5. Recommend the appropriate pricing for the new product to be launched.
9.2 CASE 2
Company BASIL produces a set of branded soft drinks that became very popular as a lower-
end market drink, cheap and acceptable to the public but with problems of poor production
quality due to poor production processes.
The marketing manager was employed as a sales manager with a degree in business
administration and an MBA in marketing but promoted over time to become the Marketing
Manager due to the impressive growth of the product range over the past five years. A
Regional Sales Manager supervises the sales team made up only of supervisors reporting to
the Marketing Manager.
The soft drinks have low carbonation and packed in plastic bottles with a 90-day shelf life.
The range consisted of Orange, Lemon and Fruit Blend flavours, not specially branded,
although packaged in bright and relevant fruit colours.
Sales were made through major distributors, town shops and bicycle vendors. The company
employed the bicycle boys and appointed a Vendors Supervisor for every town covering 13
towns in the South West.

61
The distributors were paid a 5% commission on invoice with no direct supervision by a
company representative.
TABLE OF RESULTS FOR BASIL COMPANY LIMITED
YEAR ANNUAL TURNOVER

N
2006 15 MILLION
2007 12 MILLION
2008 45 MILLION
2009 60 MILLION
2010 to date 23 MILLION
NAFDAC officials took samples of each of the products, tested them and found that the contents
were very far from approved specification.
They decided to close down the factory and arrest the Production Manager and the Managing
Director. The matter was resolved and it has had a negative effect on the company's performance.
The Managing Director saw a major crisis in the development and the attendant loss of sales and
called a management meeting at which he directed that the following should be done:
A comprehensive review of the production processes
Re-branding and registration of all brand names
Reorganization of the distribution system
Restructuring of the marketing and sales departments
Consider the development of a new product such as Bottled Water using the same machines
QUESTIONS:
1. Describe the type of distribution channels used by the management of BASIL LTD.
2. Recommend a new and effective distribution system for this company
3. Make a list of all the factors to be considered in proper branding of the company products.
4. Describe the necessary steps for going into the manufacture of the new product bottled
water
5. Recommend a new and effective sales strategy to the Managing Director
9.3 CONCLUSION
The use of cases encourage students to have a general overview of marketing practice and it
is expected that these cases will serve as reality models both for studying and tackling
marketing issues that may come up in the examinations and on the job.
PRACTICE QUESTIONS
1. Using your own words, define marketing management based on your experience
locally in Nigeria. Full explanations should be given for any concepts used in the

62
definition.
2. What are the opportunities you see in the ROAD HAULAGE business in Nigeria? List and
explain five consequences the introduction of effective water transportation would have on
road haulage nationally.
3. Make a list of what you consider to be the weaknesses of our marketing education system.
Suggest ways in which these can be converted to strengths.
4. The processed fruits sector of the economy was described as an open marketing field for
marketers. Given that funds are being made available to industrialists to set up factories,
suggest some ways in which MANGO JUICE drinks can be marketed in Nigeria.
5. The National Institute of Marketing of Nigeria is now attracting interest from students and
professionals alike. Recommend ways in which the NIMN can further make its presence felt
and control marketing practice in the country.
6. Define the word Product. Explain the concept of product life cycle and how it can be
used to ensure product survival in a competitive market.
7. Define market competition What is market share? Explain the use of market share in
assessing the performance of a product.
8. What do you do when your market share is being attacked by competition? Make a list of
attack strategies a product manager can adopt for survival.
Give five reasons why a product is branded. Explain each of them.
9. List and explain five key factors for selecting customer service personnel. How do you
ensure that all your customers get adequate attention? List some of the steps to be taken to
ensure you get a customer, who keeps complaining about an issue, satisfied
10. Define Marketing Communications. List and discuss the advantages of using a particular
type of marketing communication.

63
BIBLIOGRAPHY
1. Akanbi, I.A. (2002), Fundamentals of Marketing, Ayokunle Printer Limited, Kaduna,

Nigeria.
2. Anon (1995b): The Accidental Superhighway. In: The Economist, 1995, Vol. 336:792, p. 5-
8
3. Bouras, C., Lampsas, P. and Spirakis, P. (1997): Superhighways for Open and Distance
Learning.
4. Bradley, S. P., Hausman, J. A., & Nolan, R. L., "Global Competition and Technology," in S. P.
Bradley, J. A. Hausman & R. L. Nolan, Globalization Technology and Competition: The
Fusion of Computers and Telecommunications in the 1990s, Harvard Business School
Press, Boston, MA, 1993, 3-31.
5. Bradley, S. P., Hausman, J. A., & Nolan, R. L., "Global Competition and Technology," in S. P.
Bradley, J. A. Hausman & R. L. Nolan, Globalization Technology and Competition: The
Fusion of Computers and Telecommunications in the 1990s, Harvard Business School
Press, Boston, MA, 1993, 3-31.
6. Doole, I. and Lowe, R. (2001), International Marketing Strategy - Analysis, Development
and Implementation, Thomson Learning, 3rd Ed.
7. Fill, C. (2002) Marketing Communications: Contexts, Strategies and Applications, 3rd
edition, Harlow, Financial Times Prentice Hall.
8. Guidelines for Advertising Messages Development, Professor Richard L. Johannesen of
Northern Illinois University, U.S.A.
9. Hall, E.T. and Hall, M.R. (1986) Hidden Differences: doing business with the Japanese,
Anchor Press.
http://www.apcon.gov.ng/
10. Code Of Ethics For Advertising And Advertising Practitioners
11. Johansson, J. K. (2000), Global Marketing - Foreign Entry, Local Marketing, and Global
Management, Johansson, International Edition.
TH
12. KOTLER, P. & KELLER, K.L. (12 EDITION - 2006), MARKETING MANAGEMENT
Lars Perner, Ph.D.
13. University of Southern California, Los Angeles, International Marketing. (2007)
14. Melton, J., O'Reilly, B. and Playle, C. (Eds): 1997 EDEN Conference. Open and Distance
Learning: a bridge from the 90s to the year 2000 and beyond: Achievements and
perspectives.
15. Schultz, D. and Kitchen, P. (2000) Communicating Globally: An Integrated Marketing
Approach London, Macmillan Business.
16. Stanton, W.J (1981): Fundamentals of Marketing, 5th Edition, New
York, McGraw-Hill, Inc.
17. Stanton, W.J. (1981), Fundamentals of Marketing, 6th Edition, Japan, Mc Graw Hill Book
Company
18. Terpstra, v. and Sarathy, R. (2000) International Marketing, 8th Edition, Dryden Press.
19. TSM 209, Principles of Marketing, Nigerian Open University Manual, p.51

64

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MARKETING MANAGEMENT PAGE

Reviewed questions are provided at the end of each pack.

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MARKETING MANAGEMENT PAGE

CHAPTER 1 TASKS AND PHILOSOPHIES OF MARKETING

CHAPTER 2 THE MARKETING PROCESS AND MARKETING

CHAPTER 3 MARKETING RESEARCH AND INFORMATION

CHAPTER 4 UNDERSTANDING THE MARKETING MIX

MARKETING MANAGEMENT PAGE

CHAPTER 6 MARKETING ORGANIZATIONS

CHAPTER 7 MARKETING CONTROL

7.6 TUTOR MARKED ASSIGNMENTS 52

CHAPTER 8 PROBLEMS AND PROSPECTS OF MARKETING

CHAPTER 9 CASES IN MARKETING MANAGEMENT

MARKETING MANAGEMENT PAGE

TASKS AND PHILOSOPHIES OF MARKETING

1.3 MARKETING DEFINITIONS, PHILOSOPHIES AND TYPES

MARKETING MANAGEMENT PAGE

MARKETING MANAGEMENT PAGE

SOME APPROACHES TO THE MARKETING CONCEPT

MARKETING PHILOSOPHIES AND TASKS

CONVERSIONAL MARKETING: This is a type of marketing used in situations of negative

DE-MARKETING: When a product is over-demanded for several reasons or undersupplied due to

MARKETING MANAGEMENT PAGE

DIFFERENT MARKETING ORIENTATIONS

PRODUCTION ORIENTATION emphasizes the firm's production processes. This

PRODUCT ORIENTATION the company here focuses on physical products. This

SALES ORIENTATION focus here is on advertising and sales/selling processes and

1.4 UNDERSTANDING THE ROLE OF MARKETING IN TODAY'S BUSINESS

MARKETING MANAGEMENT PAGE

(A) Merchandising Function

2. Standardization and Grading: This is concerned with setting certain

(B) Physical Distribution

(C) Auxiliary Functions

The Role of Marketing

1.6 TUTOR MARKED ASSIGNMENTS

A. MAKE A LIST OF WHAT YOU CONSIDER TO BE THE MAJOR

B. A MANUFACTURER DECIDES TO DEVELOP AND MARKET A

C. IN A FACTORY WHERE RUBBER SANDALS AND BUCKETS ARE

MARKETING MANAGEMENT PAGE

THE MARKETING PROCESS AND MARKETING OPPORTUNITIES IN

2.3 THE MARKETING PROCESS

MARKETING MANAGEMENT PAGE

2.4 THE MARKETING ENVIRONMENT

THE MICRO ENVIRONMENT

MAJOR CLASSES OF GROWTH OPPORTUNITIES:

MARKETING MANAGEMENT PAGE

2.5 MARKETING ROLE IN THE SOCIETY:

MARKETING MANAGEMENT PAGE

A) MAKE A LIST OF FIVE PROMINENT NIGERIAN COMPANIES

B) USING THE ABOVE LISTED COMPANIES, MAKE A TABLE TO

C) THE BEST METHOD FOR ENSURING CONTINUOUS

MARKETING MANAGEMENT PAGE

3.3 MARKETING RESEARCH AND METHODS OF CARRYING OUT RESEARCH

MARKETING MANAGEMENT PAGE

MARKETING RESEARCH PROCEDURE

THE EXPLANATION OF EACH FOLLOWS:

MARKETING MANAGEMENT PAGE