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MARKETING PRESENTATION FOR
PROFESSIONAL CERTIFICATE IN MARKETING
OVERVIEWING THE MARKETING PROCESS: MARKETING AS AN EXCHANGE PROCESS:
Consumer Costs and benefits Organization
Individua
Patient
Student
Volunteer
Voter
Reader
Source: Principles of marketing by Dr. Frances Brassington & Dr Stephen Pettitt; chp 1 pg 7
Slake thirstInsurance premiums
Medical treatment
FeesEducation
TimeSense of community service
VoteSense of economic/social progress
TaxesA good read
HPrivate hospital
University
Non-profit Youth group
Political party
Public library
Jude Asongwe
Created
by
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MARKETING PRESENTATION FOR PROFESSIONAL CERTIFICATE IN MARKETING
Consumer buying decision making process and its influencing factors:
Individual influences
•Personality•Perception•Motivation•Attitude.
Group influences
•Social class•Culture/
subculture•Reference
groups •family
Situational influences
•Sociocultural•Technological
•Economic/competitive
•Political/legal
Marketing mix•Product
•Price•Place
•promotion
Problem recognition
Information search
Information evaluation/evaluation of
alternatives
Purchase decision
Post-purchase evaluation
Decision-making process
Jude Asongwe
Created by
4
Summary: PROFESSIONAL CERTIFICATE IN MARKETING IS DIVIDED IN TO FOUR PARTS:
Part A: Marketing Fundamentals Part B: Marketing Environment Part C: Marketing in Practice Part D: Customer Communication.
Producer
Producer
RetailerProducer
Retailer
Consumer
Consumer
Wholesaler
Agent
Consumer
Producer Wholesaler Retailer Consumer
Producer Business Customer
Producer Business distributor Business Customer
Producer Sales branch Business customer
Producer Sales branch Business distributor Business customer
DISTRIBUTION CHANNEL IN ORGANISATIONAL MARKET
DISTRIBUTION CHANNEL IN CONSUMER MAREKT
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CONTENTS of PART A: Marketing Fundamentals
The development of marketing and marketing orientation
Marketing planning and budgeting
The marketing mix: Product
The marketing mix: new product development and portfolio managementThe marketing mix: price
The marketing mix: placeThe marketing mix: promotionThe marketing mix: People (service and customer care).Marketing in context
Marketing Fundamentals
Source: CIM course book
Jude Asongwe
Created by
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MARKETING FUNDAMENTALS: LEARNING OBJECTIVES
By the end of this module you should be able to: Understand the development of marketing and its changing
role within a variety of organizations Understand the various tools of the marketer and evaluate
their strengths and weaknesses Recognise the impact achievable through modifying the
marketing mix for (re)positioning the product and service offerings
Understand the importance of planning in the management of the marketing activity
Develop an awareness and understanding of the technological advances in marketing and the impact of information technology on the marketing mix decisions
Understand the importance of customers and their behaviour relating to marketing decisions
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Marketing Fundamentals-
The development of marketing and marketing orientation.
What is marketing?
The marketing concept: marketing orientation.
Factors contributing to the need to be marketing oriented
Marketing as a form of competition: creating customer value
Building a marketing culture
Difficulties in managing the introduction of a customer-oriented culture Market segmentation
The tools of marketing management: the marketing mix
Overviewing the marketing process: marketing as an exchange process. The changing role of marketingMarketing Fundamentals
Source: CIM course book
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Marketing Fundamentals
What is Marketing?
Marketing is ‘the management process which identifies, anticipates and satisfies customer requirements efficiently and profitably. (CIM definition)
Consists of individual and organizational activities that facilitate and expedite satisfying exchange relationships in a dynamic environment through the creation, distribution, promotion and pricing of goods, services and ideas ( by Dibb, 2000)
Marketing Fundamentals.
Source: CIM course book
Jude Asongwe
Created by
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Marketing Fundamentals
Marketing means working with markets to bring about exchanges for the purpose of satisfying human needs and wants. It is a process by which individuals and groups obtain what they need and want creating and exchanging products and value with others. (Kotler, 2000).
Marketing Fundamentals
Source: CIM course book
Jude Asongwe
Created by
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Marketing Fundamentals- THE MARKETING CONCEPT ( MARKETING ORIENTATION).1960s-today
The marketing concept focuses on customers. A company that adopts the marketing
concepts does the following1. Puts customers at the centre of all business
decision-making and planning2. Marketing research to better satisfy
customers.
Marketing Fundamentals
Source: CIM course book
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Marketing Fundamentals : Other forms of orientation. Production-orientation(1900-1930s) Product-orientation Sales-orientation(1930s-1960s)
Marketing Fundamentals
Source: CIM course book
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Marketing Fundamentals– The Production Orientation or concept
The production concept concentrates on production and distribution economies.
This is based on the notion that customers will choose lower priced products that are readily available.
Marketing Fundamentals
Source: CIM course book
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Marketing Fundamentals- Marketing Orientation- PRODUCT ORIENTATION
Marketing Fundamentals
Source: CIM course book
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Marketing Fundamentals: The sales (selling) concept or
orientation.
This is of course based on the notion that customers need to be persuaded to buy through aggressive selling and promotion.
Marketing FundamentalsSource: CIM course book
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MARKETING HISTORY AND BUSINESS ORIENTATIONS - SUMMARY
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Marketing fundamentals: Factors underpinning the need to be market oriented. Demand Average disposable income General level of education Mass media/ access to information Supply/industry capacity Competition Broad political, economic,
social,technological, ecological and legal factors (PESTEL) factors.
Marketing Fundamentals
Source: CIM course book
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Marketing Fundamentals- : Marketing as a form of competition: creating customer value
Marketers are recognizing that it is important to be competitor as well as customer oriented.
The achievement of organisational and marketing objectives rests on whether the company can beat the competition
Provision of value to customers is important Marketing research will help better satisfy customers Good customer service and customer care Market intelligence about competitors. Reliability of service, speedier delivery, low prices, high
quality; can create superior customer value. Superior customer value should reflect customers needs.
Source:
Marketing Fundamentals Source: CIM course book
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Marketing fundamentals-
Building a marketing culture
‘Thinking about customers’ through how we view and define the business is the first step in developing a marketing culture.
Thinking about customers must permeate all functions and levels of the organization and not just the marketing function or even senior management.
Communication among managers and employees from different function is important
Marketing Research and market intelligence. Co-ordination between functions based on customer
needs. Marketing planning Company-wide communication on customer needs. Right attitudes, practices throughout the company. Source: CIM course book
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Marketing Fundamentals- ASSESSING THE EXTENT OF THE MARKETING CULTURE:
An Assessment of the following issues are concerned in order to know the extend to which businesses have been successful or unsuccessful in marketing orientation
1. Management2. Employees3. Products4. Services5. Competitors6. Prices7. Distribution of products8. Market9. Strategies
Marketing Fundamentals
Source: CIM course book
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Marketing Fundamentals- DIFFICULTIES IN MANAGING THE INTRODUCTION OF A CUSTOMER-ORIENTED CULTURE:
Managers fail to realize or understand the true concept of market orientation.
Resistance to change Power struggle between departments. Separation of the responsibility for marketing strategy and
implementation. Lack of co-ordination Lack of technology/inability to use latest technology. Poor planning Influence of macro factors (PESTEL Analysis) Influence of micro factors: Employees, management,
suppliers, distributors, media and competitors. Inadequate finance No strategic direction
Marketing Fundamentals
Source: CIM course book
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Marketing fundamentals – MARKETING AS A MANAGEMENT FUNCTION:
Marketing is the function of management. Management has to control, co-ordinate, plan, motivate, analyze and
organize marketing activities: The marketing manager has to perform the following: 1. Marketing / market research2. Planning3. Environmental analysis4. Market segmentation, targeting and positioning.5. Marketing mix implementation Marketing is not only the function of the marketing manager. Marketing should be part and parcel of each and every department of
the company. The various departments such as Human Resource, Production,
Logistics, Finance, Stock and Technical departments have to corporate with the marketing department
Marketing FundamentalsSource: CIM course book
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Marketing fundamentals – MARKET SEGMENTATIONLearning objectives
1. To understand what is market segmentation2. To examine the reasons for segmenting the
market3. To examine the bases for segmenting the
market.4. To examine the importance of segmenting
the market.
Marketing Fundamentals
Source: CIM course book
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Marketing Fundamentals - MARKET SEGMENTATION
Definition
What is market segmentation?
Market segmentation is the process of identifying and
classifying customers according to their different needs and
wants.
Marketing FundamentalsSource: CIM course book
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Marketing Fundamentals- MARKET SEGMENTATION. Definition continues
It is the division of market in to groups of customers and using the marketing mix to target customers in these groups.
It is the splitting up of customers in to segments and using the marketing mix to target customers.
Marketing FundamentalsSource: CIM course book
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Marketing fundamentals- MARKET SEGMENTATION
REASONS FOR SEGMENTING THE MARKET Because of differences that exist among
customers with regards to the following:1. Age Psychology2. Sex Life cycle3. Marital status Life style.4. Behaviour Inadequate finance.
5. Location6. Income7. Culture8. Social statusMarketing Fundamentals
Source: CIM course book
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Marketing fundamentals- MARKET SEGMENTATION
THE CRITERIA FOR SEGMENTING THE MARKET
Identifiable Profitable Recognisable Accessible Actionable Stable (reliable) Substantial Measurable Affordable
Marketing Fundamentals
Source: CIM course book
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Marketing fundamentals- MARKET SEGMENTATION
BASES FOR SEGMENTING THE MARKET IN CONSUMER MARKET Demographic: age,gender,income,occupation, marital
status and Life cycle Geographic: regions, counties, nations, cities, town,
villages and continents. Geo-demographic: Segmentation according to geography
and demography. This is used by ACORN: The post office also uses this.
Psychographic: social class and perception of customers. Behaviour: User status, usage rate, usage occasion,
loyalty status and purchase rate.
Marketing Fundamentals
Source: CIM course book
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Targeting
Single segment target
Multi-segment target
M1 M2 M3
P1
P3
P2 Market Specialisation
M1 M2 M3P1
P2
P3
M1 M2 M3
P1
P2
P3
M=Market and P= Product
M1 M2 M3
P1
P2
P3
M1 M2 M3P1
P2
P3
Product specialisation
Full market coverage
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Targeting Strategy
MARKETING MIX
Segment 1
Segment 2
Segment 3
Segment 1
Segment 2
Segment 3
MARKETING MIX Whole market
MARKETING MIX 2
MARKETING MIX 1
MARKETING MIX 3
Concentrated strategy/marketing
Differentiated strategy/marketing
Undifferentiated strategy/marketing
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POSITIONING Positioning means designing a product to occupy a distinct and valued place in the minds of customers.
Companies can position the market in terms of price, product, quality, brands, promotion, and customer service.
The essence of positioning is to enable the company to have more competitive advantage over its competitors.
When positioning, the company should identity customers needs, produce the product targeted at customers.
The product packaging, labelling, styling, branding, designing, pricing, promotion and distribution should seriously be analysed.
A good marketing programme such as marketing research, Marketing mix, segmentation, targeting, new productdevelopment and market expansion will boost the company’scompetitive advantage.
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POSITIONING Companies need to find out what position they
arein, in relation to their competitors.Am I a market leader or a market follower? This is
a question that should be asked by organisations.
Marketing planning, and marketingstrategies should be implemented to enablethe company to have competitiveadvantage.
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POSITIONINGKEYS TO SUCCESSFUL POSITIONING
Source: Principles and practice of marketing- 2nd edition by David Jobber
Successful positioning
ClarityConsistency
Credibility Compet
itiveness
Jude Asongwe
Created by
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POSITIONINGPOSITIONING MAP OF SUPERMARKETS:
Source: Principles and practice of marketing- 2nd edition by David Jobber
High price
Wide product range
Low price
Narrow product range
.. . .
. . ..A PERCEPTUAL MAP OF SUPERMARKETS
D
CB
A
X
GF
E
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BUSINESS TO BUSINESS BUYING
BEHAVIOUR: Otherwise known as industrial or organisational buyer
behaviour: Business to business transaction is when one business transact business with another. Certain factors influence business to business buyer
behaviour.1. Marketing mix: price,product, place , promotion2. Environmental influences3. Organisational factors4. Group influences: reference groups e.g decision
making unit such as users, influencers, deciders, approvers, gate keepers and buyers.
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Business to Business Marketing/Business to business buyer
behaviour
Cotton producer
DistributorsTextile
Industry/manufacturer
Agents Wholesalers Retailers
Sugar/flourBanana p
Distributor Producer Agent Wholesaler Retailer
Hides and skinproducer
Leatherproducer
distributor Shoe manufacturer Wholesaler Retailer
Accessories producer
Aircraft producer e.g
BoeingWholesaler Consumer
Iron and steelTyre producers
Distributor Car producer Wholesaler Retailer Consumers
Flour producer Distributor Producer Agent Wholesaler Retailer
Example of a shoe manufacturer
Example of cloths manufacturer
Example of biscuit manufacturer
Example of bread manufacturer
Example of car manufacturer
Example of aircraft manufacturer
ConsumersAgent
Consumers
Consumers
Consumer
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STRATEGIC MANAGEMENT Strategic analysis
Strategic Choice
Strategy implementation
A basic model of strategic management processSource: Exploring Corporate Strategy by Gerry Johnson Kevan Scholes
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STRATEGIC MANAGEMENT
Strategic
analysis
Strategic choice
Strategy implemen
tation
The environ
ment
Culture and stakeholder expectation Resources
And strategic capabilities
IdentifyingStrategic options
Evaluating options
Selecting
strategy
Planning And
allocating resources
Organisation
structure and design
Managing Strategic change
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CORPORATE SOCIAL RESPONSIBILITYThis is the responsibility that corporate businesses have on the environment. They are
supposed
to produce goods and services under social and environmentally friendly conditions:
CORPORATE SOCIAL RESPONSIBILITY TOUCHES THE FOLLOWING AREAS:
1. Employees Suppliers Retailer Distributors
2. Customers Government Shareholders Competitors
3. Products Services Banks Media Green issues
4. Local community Environmental pollutionCORPORATE SOCIAL RESPONSIBILITY CAN BE VIEWED FROM TWO ANGLES:Internal Aspects: This focus on the company’s internal structureE.g Employees, Shareholders, Management, Products, Services, and Resources.External Aspects: This focus on the society : For example Pressure Groups, local community, government, media, suppliers, distributors and Retailers
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SWOT ANALYSIS
STRENGTHHigh profitSalesMarket shareHigh product qualityMany product linesHigh staff moraleHigh staff motivationNew technologyHigh managerial abilityTechnical expertiseMachineryEconomies of scaleGood mission statementGood customer serviceNew product development
WEAKNESSESLow profitSalesMarket shareLow product qualityLimited product linesLow staff moraleLow staff motivationLack of technological developmentNo technical expertiseInsufficient machinery for productionDiseconomies of scalePoor missionPoor customer service
OPPORTUNITIESMarket expansionReduction of taxesDeregulation or reduction of legislationNew market (emerging markets)Good economic conditionsGood social conditionsStable political, social, economic and ecological environment
THREATSHigh competitionInflationLegislationHigh taxesNatural disasters e.g Hurricanes, Tsunami, Flood, Landslide, Earthquakes and TornadoesPolitical instability: warsHigh unemploymentHigh interest rates
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Marketing fundamentals- THE TOOLS OF MARKETING MANAGEMENT: THE MARKETING MIX
What is the marketing mix The components of the marketing mix.
Marketing Fundamentals
Source: CIM course book
41
Marketing fundamentalsThe tools of the marketing management:
THE MARKETING MIX - definition
It is the strategic blending of product, price, place, promotion, people, physical evidence and processes in order to achieve marketing objectives
It is a combination of 7p’s which marketers use in order to satisfy the market.
Marketing FundamentalsSource: CIM course book
42
Marketing fundamentalsThe tools of the marketing management:
THE MARKETING MIX – definition Continues
Marketing mix is the tactical toolkit of the 7’ps ; namely product, price , place, promotion, people, physical evidence and processes.
Source: CIM course book
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THE MARKETING MIX - PRODUCTWe will examine the following issues under product:1. Product Definition 2. Product Classification3. Various levels of a product4. The Product Mix5. The Product Life cycle6. Product Packaging7. Product Labeling8. Product quality9. Product lines10. Branding 11. The product adoption process12. New Product Development Process13. The importance of New Product Development14. Portfolio Analysis15. Product Pricing16. Product Placing17. Promotion of product.
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THE MARKETING MIX - PRODUCT
PRODUCT CLASSIFICATION:
Consumer Products
1. Shopping goods: e.g. television, cloths, shoes, watch & cameras
2. Unsought goods: e.g life assurance, grave stones,grave yard,
3. Convenience goods
4. Speciality goods
Producer products1. Materials and parts
2. Machinery
3. Services
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THE MARKETING MIX - PRODUCT
THE VARIOUS LEVELS OF A PRODUCT:
Core product
Actual/Basic product
Expected product
Augmented product
Potential product
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Firm infrastructureTechnology development
Human resource managementProcurement
Inbound Operations Outbound ServiceLogistics Logistics
Marketing and sales
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McKinsey’s Seven Ss model
•The 7-S Framework of McKinsey is a management model that describes 7 factors to organize a company in an holistic and effective way.
•Together these factors determine the way in which a corporation operates.
•Managers should take into account all seven of these factors, to be sure of successful implementation of a strategy. Large or small.
•They're all interdependent, so if you fail to pay proper attention to one of them, this may effect all others as well. On top of that, the relative importance of each factor may vary over time.
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Origin of the 7-S Framework. History
The 7-S Framework was first mentioned in "The Art Of Japanese Management" byRichard Pascal and Anthony Athos in 1981. They had been investigating howJapanese industry had been so Successful.
At around the same time that Tom Peters and Robert Waterman were exploring what
made a company excellent. The Seven S model wasborn at a meeting of these four authors in 1978.
It appeared also in "In Search of Excellence" by Peters and Waterman,and was taken
up as a basic tool by the global management consultancy company McKinsey. Since
then it is known as their 7-Smodel.
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McKinsey’s Seven Ss model
Skills
Style
Staff
Strategy
Systems
Structure
Share values
Shared Values (also called Superordinate Goals). The interconnecting center of McKinsey's model is: Shared Values. What does the organization stands for and what it believes in. Central beliefs and attitudes. Compare: Strategic Intent
StrategyPlans for the allocation of a firms scarce resources, over time, to reach identified goals. Environment, competition, customers. StructureThe way in which the organization's units relate to each other: centralized, functional divisions (top-down); decentralized; a matrix, a network, a holding, etc.
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McKinsey’s Seven Ss model
SystemThe procedures, processes and routines that characterize how the work should
be done: financial systems; recruiting, promotion and performance appraisal systems;information systems.
StaffNumbers and types of personnel within the organization.
StyleCultural style of the organization and how key managers behave in achieving
theorganization's goals. Compare: Management Styles.
SkillDistinctive capabilities of personnel or of the organization as a whole. Compare: Core Competences.
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McKinsey’s Seven Ss model
Strengths of the 7-S Model. Benefits Diagnostic tool for understanding organizations that
are ineffective. Guides organizational change. Combines rational and hard elements with emotional
and soft elements. Managers must act on all Ss in parallel and all Ss are
interrelated.
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Barriers to Implementation
INTERNAL
Management culture
Leadership skills
Organisational structure
Resources
Attitude to planning
Measurement procedures
Communications
EXTERNAL
Political intervention
Competition
Distributors
Suppliers
Customers
Economic conditions
Change in technology
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Implementation Variables
Successful implementation will occur
Staff will struggle
Implementation will be impeded
Staff are likely to resist the plan. Implementation will be impeded
Plan resist in all ways
Implementation stage unlikely to succeed.
Senior management involvement
Sta
ff in
volv
emen
tGilligan and Fifield
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STAKEHOLDERS
competitors
Local community
Management
Shareholders
Distributors
Media
Suppliers
EmployeesPresent and prospective
The Firm’s Stakeholder
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STAKEHOLDER VALUES AND EXPECTATIONSSTAKEHOLDES
VALUE STAKEHOLDER EXPECTATION
EXPECTATION FROM ORGANISATION
Consumers Purchase goods and services thus raising revenue for organisations.
Fair pricesSafe and healthy productsEnvironmentally friendly productsHigh quality productsGood customer service and care.
Payment for goods and servicesGood behaviour from customersRespect purchasing policies.
Employees They help produce goods and services.
Good working conditionsFair wage for a days job/monthMotivation – bonuses, allowances, holidays, promotion, ego and self actualisation needs.Equal opportunity in employment, training and development.Training and developmentIndustrial democracyEmpowerment and delegationFreedom of speech/free flow communication
Commitment from staffNo strike actionNo absenteeismTotal participation Respect company’s policiesGood morale
Management They help plan, organise, direct, control, motivate and train staff.
Suppliers They supply logistics needed for production.
Distributors They distribute the products to the market.
Media Advertising products.
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STAKEHOLDERSSTAKEHOLDES
VALUE STAKEHOLDER EXPECTATION
EXPECTATION FROM ORGANISATION
Financial institutions
Provides financial products e.g loans, overdraft and advice.
Government Provides public and merit goods.Help investors morally and financially.
Local community Purchase organisational products.
Pressure group
Shareholders Provide shares (business finance)Put pressure on companies to produce products under social and environmentally friendly conditions.
Retailers/wholesalers/agents
Facilitate the distributionActs as an important link in business supply chain.
Competitors Compete with firms thus making companies to offer even better services and goods.
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STAKEHOLDERSStakeholders can be divided into three categories
1. Internal Stakeholders: Employees, Management, shareholders and BOD.
2. Market place stakeholders: Customers, banks, media, suppliers, distributors, agents, retailers and wholesalers and competitors.
3. External Stakeholders: Government, pressure groups and the local community
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The New Product Development Process
Idea generation
Idea screening
Concept development and testing
Outlining Marketing strategies
Business Analysis
Product development
Test marketing
Commercialisation
Monitoring
Controlling
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PRODUCT LIFE CYCLE CHARACTERISTICSCHARCTERISTICS INTRODUCTION GROWTH MATURITY DECLINE
Sales Low Increasing Slowing Declining
Profits Loss Peaking Declining Low to Zero
Cash flow Negative Moderate High Low
Customers Innovative Mass Market Mass Market Laggards
Strategic focus Expanding market Market penetration Defensive marketing
Productivity
Marketing expenditure
High High-declining Falling Low
Product plan Market to innovators, early adopters; high product failure rate; basic- developing
Expand for early and late majority; less product distinctiveness; improve models.
Widen product lines, rationalize brand; less competition; differentiate.
Niche marketing; reinforce brand loyalty; rationalize
Competitor reaction
No reaction Maximum new entrants - high
Marginal competitors exit
Competition declines
Pricing plan High skimming Differentiated for each segment
Lowest - competitive
Price cutting rises for niches
Distribution plan Unstable pattern – widen channels, seize shelf space.
Increasing pattern – competitor activity increasing.
Control passing to fewer firms
Segmented, fragmented and localized.
Promotional plan
Push for awareness
Create ‘pull’ Withdraw Cease
Source: Association of business executives
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COMPETITIONLAYERS OF COMPETITION
Immediate competitors – Technically similar
products
Source: Principles and practice of marketing by David Jobber
Secondary competitors
Tertiary competitors
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MICHAEL PORTER’S FIVE FORCE ANALYSIS OF THE COMPETITIVE STRUCTURE
Competitive Rivalry
Potential entrants
Suppliers Buyers
Substitutes
Bargaining
Power
Threat of entrants
Bargaining
Power
Threat of substitutes
Source: Exploring Corporate Strategy by Garry Johnson and Kevan ScholesAdapted from M. Porter, Competitive Strategy, Free Press,1980, p. 4.
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THE IMPORTANCE OF THE PRODUCT LIFECYCLE:
The product life cycle is important in planning and control
Strategic formulation, implementation and analysis
Advertising strategy Product management Targeting and positioning
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PORTFOLIO ANALYSISBusiness Portfolio: The collection of businesses and products
that make up the company.
Portfolio analysis: A tool by which managementidentifies and evaluates the various businesses thatmake up the company
Strategic business unit (SBU): A unit of the company that hasa separate mission and objectives and that can be plannedindependently from other company businesses. A SBU can bea company division, a product line within a division, orsometimes a single product or brand.
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PORTFOLIO ANALYSISBOSTON CONSULTING GROUP MATRIX
Framework of the BCG Matrix
Market share
Mar
ket g
row
th
Low
High
0.1x1x10x0
10
20
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PORTFOLIO ANALYSISStars
Cash cowsLow-growthHigh-share businesses or productsEstablished and successful units that generate cash that the company usesto pay its bills and support other business units that need investmentProfit and sales are high but later decline because of competition
Question marksLow-share business units in high-growth marketsLow profits and sales.DogsLow growthLow market shareLow profitLow sales
High –growth High market share (High-share businesses)Products often require heavy investment to finance their rapid growthHigh profit and high sales
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BCG MATRIX : BCG CLASSIFICATION OF PRODUCTS
Dogs
Market share
Mar
ket g
row
th
Low
High
0.1x1x10x0
10
20
StarsQuestion marks
Cash cows
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BCG MATRIX- CASH POSITION FOR PRODUCTS
Stars
Revenue + + +
Investment - - -
0
Question marks
Revenue + +
Investment - - -
-
Cash cows
Revenue + + +
Investment –
+ +
Dogs
Revenue +
Investment –
0
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PORTFOLIO STRATEGIES
Build
Hold
Harvest
Divest
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GENERAL ELECTRIC MATRIX
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THE GENERAL ELECTRIC MATRIX BY MCKINSEY
The GE matrix / McKinsey matrix is a model to perform a business portfolio analysis on the Strategic Business Units of a corporation.
A business portfolio is the collection of Strategic
Business Units that make up a corporation. The optimal business portfolio is one that fits perfectly to the company's strengths and helps to exploit the most attractive industries or markets. A Strategic Business Unit (SBU) can either be an entire mid-size company or a division of a large corporation, that formulates its own business level strategy and has separate objectives from the parent company.
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THE GENERAL ELECTRIC MATRIX BY MCKINSEY
The aim of a portfolio analysis is to: 1) Analyze its current business portfolio and decide
which SBU's should receive more or less investment, and2) Develop growth strategies for adding new products and businesses to the portfolio
3) Decide which businesses or products should no longer be retained.
The BCG Matrix (Boston Consulting Group Matrix) is the best-known portfolio planning framework. The GE / McKinsey Matrix is a later and more advanced form of the BCG Matrix.
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THE GENERAL ELECTRIC MATRIX BY MCKINSEY
Typical (external) factors that affect Market Attractiveness:- Market size- Market growth rate- Market profitability - Pricing trends - Competitive intensity / rivalry - Overall risk of returns in the industry- Entry barriers - Opportunity to differentiate products and services- Demand variability- Segmentation - Distribution structure- Technology development
Typical (internal) factors that affect Competitive Strength of a Strategic Business Unit:- Strength of assets and competencies- Relative brand strength (marketing)- Market share- Market share growth- Customer loyalty- Relative cost position (cost structure compared with competitors)- Relative profit margins (compared to competitors)- Distribution strength and production capacity- Record of technological or other innovation- Quality- Access to financial and other investment resources- Management strength
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A six-step approach to implementation of portfolio analysis (using the GE / McKinsey Matrix) could look like this:
1. Specify drivers of each dimension. The corporation must carefully determine those factors that are important to its overall strategy2. Weight drivers. The corporation must assign relative importance weights to the drivers 3. Score SBU's each driver4. Multiply weights times scores for each SBU5. View resulting graph and interpret it 6. Perform a review/sensitivity analysis using adjusted other weights (there may be no consensus) and scores.
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Some important limitations of the GE matrix / McKinsey Matrix are:
- Valuation of the realization of the various factors
- Aggregation of the indicators is difficult - Core competencies are not represented - Interactions between Strategic Business
Units are not considered
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CHANGES IN PRODUCT/STRATEGIC BUSINESS POSITION
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CONCLUSION
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GENERAL ELECTRIC BUSINESS SCREEN (GE)
78
PRODUCT LINE
Television Laptops Cars Mobile WatchesPanasonicSharpSonyLGTechnicsSamsung
HPPackard bellMicrosoftDellPC worldSony
NokiaMotorolaSamsungLGSiemensSargemSony E
RolexSeikoSeconda
ProductLine length
Product line width
JaguarMercedesRoverVauxhallCorollaNissanAudiFerrariOpelBMWHondaPajeroToyotaCamri
ProductLine Length
A B C D E
6 6
14
7
3
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NATONAL INCOME STATISTICS
80
GDP STATISTICS
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PRICEPRICING STRATEGIES:1. Cost-based pricing or cost-oriented pricing:
a) Full cost pricing
b) Direct cost pricing
2. Competitor-based pricing or competitor orientated pricing
a) Going-rate pricing
b) Competitive bidding
3. Market-oriented pricing
4. Product line pricing
5. Me too pricing
6. Product bundling pricing
7. Seasonal pricing
8. Psychological pricing
Source: Principles and practice of marketing 2nd Edition by David Jobber
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PRICE FACTORS THAT DETERMINE THE PRICE OF PRODUCTS:
MACRO FACTORS1. Political
2. Economic
3. Social
4. Technological
5. Ecological
6. Legal
MICRO FACTORS7. Customers (demand & market segment)
8. Competitors
9. Suppliers
10. Distributors
11. Media
12. Company: production costs, objective and mission.
83
RESEARCH STUDIES
84
WHAT IS RESEARCHResearch is the gathering, recording, analysing and reporting of all facts relating to the transfer and sale of goods and services from producers to consumers. It is usually based on statistical probability theory and always uses scientific methods.
Research is the
Gathering
Analysis
Storage
Retrieval
and
Dissemination of information to aid in decision making:
Source: Association of business executives
85
WHY RESEARCH1. To find out cost involved in advertising
2. To find out what customers want to buy
3. To determine which distribution methods are more efficient
4. To analyze what competitors are doing
5. To reduce risk
6. To help in planning and forecasting results
7. To aid ‘mix decisions’
8. To improve decision-making capabilities
86
INTERNATIONAL MARKETING RESEARCH AND ANALYSIS
MARKETING RESEARCHMARKETING RESEARCH
88Sunday, February 19, 2006Sunday, February 19, 2006 By J Asongwe By J Asongwe
MARKETING RESEARCHMARKETING RESEARCH
THE MARKETING RESEARCHTHE MARKETING RESEARCH PROCESSPROCESS::
Defining theresearch
QUESTIONAND
objectives
DevelopingThe research plan
For collecting information
Implementing the Research plan-Collecting and Analysing the
data
Interpreting and Reporting the
findings
FIGURE 2: The Marketing Research Process.
THE MARKETING RESEARCH PROCESS
Source: Principles of marketing by Philip Kotler
87
The research processThe process of research describes the steps takenin the research activity: Gathering
Analysis
Storage
Retrieval
Dissemination
Source: Association of business executives
88
INTERNATIONAL MARKETING RESEARCH AND ANALYSIS
THE MARKETING RESEARCH PLAN: (WH QUESTIONS)The research plan includes objectives, strategies and programmes and above all it
should be logical andstructured.1. What are the research problems? ( outline the research problems)2. What are the research objectives?( outline the research objectives)3. Determine the target to be researched : crucial to the research plan.4. Which research methodology are you using? Determine how the research is to be
carried out:5. Who will be responsible for carrying out the research? In-house or external
agency.6. How will data be collected?7. When will the research be carried out? Determine 8. How long will the research take. (set time frame or limit)? time scale is important.9. How much budget have you set aside for the research? Set or agree the budget: 10. Where will the research be carried out?11. Start carrying out the research : Implement the plan12. Gather and record the information13. Monitor and control 14. Reach conclusions: Report the information and take action. 15. Store the information to be retrieved in future.
89
RESEARCH PROPOSAL The research proposal defines what the marketing research promises to do for its
client, and how
much it will cost. Like the research brief, the proposal should be written to avoid misunderstandings.
A client should expect the following to be included.
1. A statement of objectives: to demonstrate an understanding of the client’s marketing and research problems
2. What will be done: an unambiguous description of the research design including the survey method, the type of sample, the sample size, and how the fieldwork will be controlled.
3. Timetable: if and when a report will be produced.
4. Costs: how much the research will cost and what specifically is/is not being included in those costs.
Source: Principles and practice of marketing 2nd Edition by David Jobber
90
INTERNATIONAL MARKETING RESEARCH AND ANALYSIS
TYPES OF RESEARCH1. Primary (field) research
2. Secondary (desk) research
3. Exploratory research
4. Conclusive research
5. Market research: This is focused on the size, composition, trends, structure of the market, competitors and the environmental factors affecting the market.
6. Marketing research: Research which is focused on the marketing mix elements: Product, price, place, promotion, people, physical evidence and process.
7. Experimental research:
8. Quantitative research:Quantitative comes from quantity – meaning numbers. Results can be in the form of numbers or percentages. This type of research is used to assess trends, potential and actual growth or decline of a market or product consumption.
9. Qualitative research: Its about ideas and opinions, likes and dislikes: Likert scale or semantic differential scale is normally used in qualitative research, which allows responses to be quantified.
10. Observational research:
11. Survey research:
12. Descriptive research : Survey research may be undertaken to describe customers’ beliefs, attitudes, preferences, behaviour, etc. For example, a survey into advertising effectiveness might measure awareness of the brand, recall of the advertisement, and knowledge about its content.
Source: Principles and practice of marketing 2nd Edition by David Jobber
91
RESEARCH METHODS
Interviews and discussions Observations Questionnaires Test marketing Sampling Survey/(Intelligence gathering)
PRIMARY RESEARCH METHOD
92
USING EXTERNAL RESEARCH AGENCIES
In-house or External Finding, selecting and recruiting an
agency Briefing Controlling
93
DATA COLLECTION
Source: Principles and practice of marketing 2nd Edition by David Jobber
Primary sourceSecondary sources
94
SAMPLINGTHE SAMPLING PROCESS:
1. Simple random sampling
2. Stratified random sampling
3. Quota sampling
4. Sample size
Source: Principles and practice of marketing 2nd Edition by David Jobber
95
SURVEY RESEARCHTHE SURVEY METHOD Face-to-face interviews Telephone interviews Mail surveys
Source: Principles and practice of marketing 2nd Edition by David Jobber
96
QUESTIONNAIRE DESIGNPLANNING STAGE
DESIGN STAGE
1. Ordering of topics : it should have a logical flow
2. Types of questions: Closed end questions and open end questions.
3. Wording and instructions
4. Layout
5. Scaling
6. Probes and prompts
7. Coding
Source: Principles and practice of marketing 2nd Edition by David Jobber
97
QUESTIONNAIREPILOT STAGE
Source: Principles and practice of marketing 2nd Edition by David Jobber
98
DATA ANALYSIS AND INTERPRETATION
Source: Principles and practice of marketing 2nd Edition by David Jobber
99
REPORT WRITING AND PRESENTATION
Source: Principles and practice of marketing 2nd Edition by David Jobber
100
SOURCES OF INFORMATION
There are four main sources of information
1. Internal Sources
2. Government publications
3. Other publications
4. Commercial data
INTERNATIONAL MARKETING RESEARCH AND ANALYSIS
101
INTERNATIONAL MARKETING RESEARCH AND ANALYSIS
PRIMARY DATA: Original data . Data from the
‘horses mouth’.
It takes time and it is expensive
SECONDARY DATA:Existing data
Takes less time
It is not expensive
There is a possibility of getting obsolete data
SOURCES OF INFORMATION
102
MARKETING INFORMATION SYSTEM:
55Tuesday, December 20, Tuesday, December 20, 20052005 By J Asongwe By J Asongwe
The Marketing Information SystemThe Marketing Information System
Internal recordMarketing
intelligence
Information analysis Marketing research
Assessing information
needs
Distributinginformation
Marketing environment
Target Markets
Marketing channels
Competitors
Publics
Microenvironment forces
Marketingmanagers
Planning
Execution
Control
FIGURE 1: The marketing Information System
Marketing Information System
Marketing decisions and communications
103
BUSINESS AND MARKETING STRATEGIES
BUSINESS STRATEGY
1. Ansoff Matrix
2. Porters generic strategy
104
MARKETING STRATEGIESPORTERS GENERIC STRATEGY MODEL
Stuck with no clear strategy
Differentiation
Cost leadership
Focus
105
STRATEGIESANSOFF MATRIX
MARKET PENETRATION
PRODUCT DEVELOPMENT
MARKET DEVELOPMENT
DIVERSIFICATION
Existing New
Existing
New
106
MARKETING Strategies
MARKETING MIX
Segment 1
Segment 2
Segment 3
Segment 1
Segment 2
Segment 3
MARKETING MIX Whole market
MARKETING MIX 2
MARKETING MIX 1
MARKETING MIX 3
Concentrated strategy/marketing
Differentiated strategy/marketing
Undifferentiated strategy/marketing
107
CORPORATE STRATEGIESATTACH STRATEGIES
1. Direct challenge – differential advantage
2. Direct attack – distinctive competence
3. Direct attack – market share
4. Flank attack
5. Encirclement
6. Bypass
7. Guerrilla
108
DEFENCE STRATEGIESMARKETING STRATEGY
1. Position defence2. Pre-emptive defence3. Counter-offensive4. Mobile defence5. Flanking defence6. Contraction defence7. By-pass
109
Marketing fundamentals – OVERVIEWING THE MARKETING PROCESS: MARKETING AS AN EXCHANGE PROCESS
Marketing Fundamentals
Source: CIM course book
110
Marketing fundamentals- THE CHANGING ROLE OF MARKETING
111
Marketing fundamentals - UNIT 2: MARKETING PLANNING AND BUDGETINGLEARNING OBJECTIVES:
To understand what is the marketing planning process. To understand the importance of the marketing planning process To examine the structure and components of the marketing plan. The marketing planning process. The concept of marketing audit The value of marketing research and information in developing marketing plans. To understand the importance and approaches to objective setting.
To understand the importance and process of segmentation, targeting and positioning
Appreciate the range of tools and techniques to satisfy customer requirements and compete
The process of setting marketing budgets
To understand the various management structures for implementing marketing plans and the importance of monitoring and control of marketing activities.
Appreciate the range of tools and techniques available to satisfy customer requirements and compete.
112
COMPONENTS OF A MARKETING PLAN1. EXECUTIVE SUMMARY
2. BUSINESS MISSION
3. MARKTING AUDITING
4. SWOT ANALYSIS
5. MARKETING OBJECTIVES
6. BUSINESS OBJECTIVES
7. MARKETING STRATEGIES
8. BUSINESS STRATEGIES
9. MARKETING MIX
10. IMPLEMENTATION
11. EXPECTED RESULT
12. MONITORING
13. CONTROLLING
113
Marketing fundamentals - UNIT 2: MARKETING PLANNING Definition
Marketing planning is deciding at present what to do in future.Marketing planning involves the various steps which marketers have to follow
before achieving their overall objectives
Marketing Fundamentals
Source: CIM course book
114
Marketing fundamentals - UNIT 2: MARKETING PLANNING AND BUDGETING
The marketing planning process1. Business Mission/corporate objectives
2. Marketing audit
3. SWOT analysis
4. Business Objectives
5. Marketing objectives
6. Marketing strategies
7. Marketing tactics / marketing mix decisions
8. Implementation
9. Monitoring and control
Marketing Fundamentals
Source: CIM course book
115
MARKETING PLANEnvironmental scanning
Business Mission
Objectives
Strategies
Marketing Mix
Monitoring
Control
Implementation
Price Place Promotion People Physical evidence
Product Processes
116
MARKETING PLANNINGSTRATEGY AND PLANNING Initial environmental and business analysis Develop the mission statement Detailed marketing audit
Corporate objectives and strategy formulation
Marketing objectives and strategy formulation
Estimate expected results
Identify alternative plans and mixes Implementation
Review
BUSINESS
FUNCTIONAL
CORPORATE
117
STRATEGY AND PLANNING Corporate or visionary planning that provides
a mission and structure for evaluating and allocating resources to business
Business planning which involves long-range planning for positioning the company and its products to best serve its target markets
Functional planning including marketing planning which is generally annual planning involving specific goals and plans over one year.
118
CORPORATE STRATEGYStrategies are formulated as a response to the
various
factors in the company’s environment- and these may
come from both external and internal sources:
a) External
b) Internal
119
Organizational Stance and Positioning
Leaders Followers Nichers
120
Marketing fundamentals - UNIT 2: MARKETING PLANNING AND BUDGETING
THE BUSINESS MISSIONLearning Objectives
What is a Mission Statement. What are the components of a mission statement. What is the importance of a mission
statemement. What are the characteristics of a Mission
Statement Examples of Mission Statements: M&S, Asda,
Tesco, Sainsbury, BT & Npower.
121
Marketing fundamentals - UNIT 2: MARKETING PLANNING AND BUDGETING
The Marketing AuditLearning Objective
What is the marketing audit What are its components What is the importance of the marketing audit.
122
Marketing fundamentals - UNIT 2: MARKETING PLANNING AND BUDGETING
THE SWOT ANALYSIS
Learning Objectives
What is the SWOT Analysis What is the importance of carrying out a
SWOT Analysis.
123
Marketing fundamentals
Marketing planning and budgeting.
124
Content OF PART B: Marketing Environment:
The nature of the organization and the impact of its environment
The micro-environment Analysis of the competitive environment The macro-environment The demographic, social and cultural environment The economic and international environment The political and legislative environment The technical/information environments Environmental information systems-coping with the
challenge of environmental change. Marketing Environment.
Source: CIM course book
125
Marketing Environment:
LEARNING OBJECTIVESBy the end of this module you should be able to: Understand the nature of the marketing environment
and its relevance for the organisation and marketing practice.
Examine the various types of organisation, their objectives and the interface between marketing, internal functions and external influences.
Recognise the importance of building relationships with relevant stakeholders.
Identify and interpret the marketing implications of significant changes in an organization's wider environment.
Understand the complex, dynamic and uncertain nature of the external environment and how it might be best managed in marketing terms.
126
Marketing Environment:
The importance of the marketing environment Business classifications The formal and informal economy The legal form of trading organizations Vision and the organization’s mission General organizational objectives How are goals established? What causes the goals to change? The organization as an open system The interface between marketing and other functions. Managing the marketing environment: a contingency approach.
Unit 1: The nature of the organization and the impact of its environment
Marketing Environment.
Source: CIM course book
127
Marketing Environment:Unit 1: The nature of the organization and the impact of its
environmentLEARNING OBJECTIVES1. To explain the classification of private, public and voluntary organizations, their
legal status and operational characteristics.2. Assess comparative strengths and weaknesses of small/medium and large/global
sized organizations.3. State the meaning and importance of an organization’s mission and explain the
nature and significance of the objectives pursued.4. Identify the internal and external influences on the formation of objectives and
specify the likely drivers for organizational change.5. Explain the nature of open systems responding to changing environmental
conditions.6. Represent the organization as an open system responding to changing
environmental conditions7. Distinguish between the types of organizations with the public, private and
voluntary sectors 8. Understand the diversity of organizational objectives and influences upon them9. Understand the nature of organizations as open systems and the environmental
influences that affect them.
Source: CIM course book
128
Marketing Environment:
The public sector The private sector.
Unit 1: The nature of the organization and the impact of its environment
The formal economy
The Informal economy
•Hidden•Voluntary•Household
Source: CIM course book
129
The formal economy
The public sector State industries Public/private partnership Quangos Municipal/local authority services
Marketing Environment:Unit 1: The nature of the organization and the impact of its environment
Source: CIM course book
130
Marketing Environment: Unit 1: The nature of the organization and the impact of its environment
The private sector. Sole traders Partnerships Private limited companies; e.g. small/medium
businesses. Cooperatives; e.g agricultural Franchises; e.g McDonald’s Public limited companies; e.g Unilever plc Multinationals: e.g BP, Coca-Cola Inc, Nestle,
Cadbury.
The formal economy
Source: CIM course book
131
Marketing Environment:Unit 1: The nature of the organization and the impact of its environment
The Legal form of trading organizations:
Sole Trader:
Characteristics Oldest type, simplest to form – self-employment Unincorporated – Ownership and control by a single person Individuals assume all rights/duties No separate legal existence: the business= the individual No disclosure of information bar to tax authorities No limit on employees: may employ >100 Farming/personal services/building/retail May originate in the hidden economy.
Source: CIM course book
132
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentSOLE TRADER:
MERITS DEMERITS Minimum formalities Unlimited liability for any debts
,unincorporated, no legal entity.
Complete control/no consultation Raising capital is difficult
Favorable tax treatment Specialized and risky
Highly motivated/single-minded Jack of all trades
Least costly to form May lack continuity
Close to customers/employees Self-exploitation
Flexible/attend to detail Competition from large/small
Niches where limit to market Lack management skills
Exemption from certain legislation No one to share burden
Personal satisfactions-status Source: CIM course book
133
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentPARTNERSHIP
CHARACTERISTICS
Unincorporated Two or more in common with a view to profit No more than a legally specified maximum number (e.g
20), bar certain professions. Form an agreement or bound by legislation Unlimited liability and jointly liable Share management/profits/losses No legal personality.
Source: CIM course book
134
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentPARTNERSHIP
MERITS DEMERITS
Able to raise more capital Unlimited liability unless ‘limited’- still must be at least one partner fully liable.
Pool expertise/mutual support funds Lack of legal identity-dissolves if death/disagreement
More chance to specialize Potential disagreements
No company tax on business Frozen investment
Unincorporated
No separate legal entity
Source: CIM course book
135
The marketing environment: Unit 1: The nature of the organization and the impact of its environment
REGISTERED COMPANY: PLC & Private LC
CHARACTERISTICS Incorporated, separate legal entity – enter contracts,
etc. Formed under relevant legislations, e.g 1985
Companies Act Confers various rights and duties Members contribute capital and own shares. Dominant form Liability limited to amount invested or guaranteed.
Source: CIM course book
136
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentFor example, in Britain:
Public Limited Company (PLC)
Private Limited Company (Ltd)
Two or more members Minimum two/100 authorized capital
50 000 and two directors One director plus a secretary
Offer shares to the public Offence to offer shares to public
Requires business certificate before trading/borrowing
Trade once incorporation certificate is received
Similar legislation elsewhere. Typical family business
Raising additional bank funds easier
Source: CIM course book
137
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentFor example, in Britain:
A registered company has a number of duties and must also submit to the Registrar of Companies:
Memorandum of Association: It contains the external rules and regulations
Articles of Association: It contains the internal rules and regulations.
Statutory declaration of compliance with the relevant Act Independently audited annual accounts and directors
report.
Source: CIM course book
138
The marketing environment: Unit 1: The nature of the organization and the impact of its environment
REGISTERED COMPANY: PLC & Private LC
MERIT DEMERIT
Separate legal entity Special and double taxation
Limited liability of owners Complex/costly to form
Greater financial capability Disclosure requirements
Easy transfer of ownership Government regulations
Able to fund innovation/new product development
Inflexibility of size
Customers feel reassured.Economies of scale:Internal and External.
Impersonality.
Source: CIM course book
139
The marketing environment: Unit 1: The nature of the organization and the impact of its environment
COOPERATIVE
CHARACTERISTICS Pioneered in mid-nineteenth century-most prevalent in agriculture and
retailing Governed by relevant legislation Worker ownership/control but falling numbers/mergers Limited liability but one member one vote Self-help not profit maximizing via management committee Equitable distribution of dividend if a surplus is made.
Source: CIM course book
140
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentFRANCHISINGCHARACTERISTICS
Franchisor sells the right to market a product under its name to a franchisee.
Separate entities but interdependence businesses. Rapid growth especially retailing McDonald’s the Body shop. Ready-made opportunity for an entrepreneur with capital wishing to
minimize risks of a new venture (90 per cent survive beyond three years).
Source: CIM course book
141
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentAGREEMENT BETWEEN THE FRANCHISOR AND THE FRANCHISEE:
Franchisor agrees to Pay an initial sum to franchisor
Provide business format/initial training
Pay a percentage of profit to franchisor
Supply product and quality control Buy supplies of product from franchisor
Extend promotional support (e.g.) advertising
Maintain standards laid down.
Source: CIM course book
142
The marketing environment: Unit 1: The nature of the organization and the impact of its environment
THE PUBLIC SECTORLocal Authorities: Services provided by local government Examples include, among others, fire and police,
road maintenance, consumer protection, recreation, environmental health, education and airports.
They are managed by elected councillors through full time professional officers.
Source: CIM course book
143
The marketing environment: Unit 1: The nature of the organization and the impact of its environment
THE PUBLIC SECTORSTATE INDUSTRIES
Source: CIM course book
144
The marketing environment: Unit 1: The nature of the organization and the impact of its environment
THE PUBLIC SECTOR
PUBLIC PRIVATE PARTNERSHIP
Source: CIM course book
145
The marketing environment: Unit 1: The nature of the organization and the impact of its environment
THE PUBLIC SECTORQUANGOS (State Agents)
Source: CIM course book
146
The marketing environment: Unit 1: The nature of the organization and the impact of its environment THE PUBLIC SECTOR AND THE PRIVATE SECTOR COMPARED:
PUBLIC SECTOR PRIVATE SECTOR
Source: CIM course book
147
The marketing environment: Unit 1: The nature of the organization and the impact of its environment
NATIONALISATION AND DENATIONALISATION OR PRIVATISATION COMPARED:
NATIONALISATION PRIVATISATIONManagement and control of state owned industries by the government
Transfer of ownership and control of state owned industries from government to individuals.
Source: CIM course book
148
The marketing environment: Unit 1: The nature of the organization and the impact of its environment
The regulated PLC: The bulk of nationalized industries were
privatized in the 1980s and 1990s. They were sold directly to the public:
management/employee buyouts or to other companies.
Examples of privatized industries in the UK includes : BT, Royal Mail, London Underground)
Source: CIM course book
149
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ARGUMENTS FOR PRIVATISATION:
POLITICAL ARGUMENTS ECONOMIC ARGUMENTSReduced role of the state Achieve efficiency improvementsDeregulation of the economy Increased competition and choiceEncourage shareholding democracy among customers
Pressure on management to become marketing oriented
Enable worker share-ownership Improve industrial relationsProvide freedom to manage Exploit new opportunitiesCut borrowing(PSBR)and taxes Supply side rises in productivity.Cut costs
Source: CIM course book
150
The marketing environment: Unit 1: The nature of the organization and the impact of its environment
VISION AND THE ORGANIZATION’S MISSION:
VISION Components of a vision statement Characteristics of vision statements The importance of a vision statement From Vision to Mission.
Source: CIM course book
151
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSION
Component of a Mission Statement Characteristics of a Mission Statement The importance of a Mission Statement
Source: CIM course book
152
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSION
Examples of Mission and Vision Statements THE MISSION STATEMENT OF ASDA Superstore.
153
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSION
THE MISSION STATEMENT OF TESCO
154
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSION
THE MISSION STATEMENT OF Marks & Spencer
Source: Strategic Marketing Management by R.M.S Wilson
155
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSION
The Mission Statement of NPOWER
156
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSION
The Mission Statement of British Gas
157
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSION
THE MISSION STATEMENT OF DEBENHAMS:
We will be the leading countrywide speciality store, the first choice for fashion on card which employees
Source: Strategic Marketing Management by R.M.S Wilson
158
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSIONThe Mission Statement of Sainsbury
1. To discharge the responsibility as leaders in our trade by acting with complete integrity, by carrying out our work to the highest standards, and by contributing to the public good and to the quality of life in the community.
2. To provide unrivalled value to our customers in the quality of the goods we sell, in the competitiveness of our prices and in the range of choice we offer.
3. In our stores, to achieve the highest standards of cleanliness and hygiene, efficiency of operation, convenience and customer service, and thereby create as attractive and friendly a shopping environment as possible.
4. To offer our staff outstanding opportunities in terms of personal career development and in remuneration relative to other companies in the same market, practising always a concern for the welfare of every individual.
5. To generate sufficient profit to finance continual improvement and growth of the business whilst providing out shareholders with an excellent return on their investment.Source: Strategic Marketing Management by R.M.S Wilson
159
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSION
THE MISSION STATEMENT OF BT: To provide world class telecommunications and information products
and services To develop and exploit our networks at home and overseas so that
we can 1. Meet the requirements of our customers2. Sustain growth in the earnings of the group on behalf of our
shareholders3. Make a fitting contribution to the community in which we conduct our
business.BT’S CORE VALUES We put our customers first We are professional We respect each other We work as one team We are committed to continuous improvement.
Source: Strategic Marketing Management by R.M.S Wilson
160
The marketing environment: Unit 1: The nature of the organization and the impact of its environmentTHE ORGANIZATON’S MISSION
The Mission Statement of Argos
161
Learning objectives – what you should know by the end of the lesson
The nature of the organization and the impact of its environment
The micro-environment Analysis of the competitive environment The macro-environment The demographic, social and cultural environment The economic and international environment The political and legislative environment The technical/information environments Environmental information systems-coping with
the challenge of environmental change.
162
THE MARKETING ENVIRONMENT
THE COMPANY AND ITS
ENVIRONMENT
MICRO ENVIRONMENT
MACRO ENVIRONMENT
CompanyManagement/BODShareholdersEmployees
Marketing IntermediariesSuppliersDistributors/transportersMediaRetailersWholesalersAgents/brokers
Financial IntermediariesBanksCredit InstitutionsBuilding SocietiesInsurance companies
Customers
Local communityPressure groups
Think-tank consultancy
Political
Economic Social DemographicSocial ClassReference groupsHealthEducationCommunicationCulture
Technological
Ecological
Legal
Unemployment, wages, Interest rates, Tax, deflation, trade cycle, exchange rates, Energy prices economic growth Per Capita Income, competitors
GDP,GNP,NI,Employment,
Inflation,
PolusionClimate changeScarcity of oil
Natural disasters
Recycling
Polusion law ,Alcohol law,consumer protection lawEmployment law, product safety law Human rights law, Business law
Internet, digital, ATM EPSS, mobile, SMS,
Government policies Rules and regulationsLaws, taxes, political stability/instability,regime in government
Law firm
163
THE BUSINESS ENVIRONMENT– PEST FACTORS
ENVIRONMENTAL FACTORS
Political
Economic
Social DemographicSocial ClassReference groupsHealthEducationCommunicationCulture
Technological
Ecological
Legal
Unemployment, wages, Interest rates, Tax, deflation, trade cycle, exchange rates, Energy prices economic growth Per Capita Income, competitors
GDP,GNP,NI,Employment,
Inflation,
PolusionClimate changeScarcity of oil
Natural disasters
Recycling
Polusion law ,Alcohol law,consumer protection lawEmployment law, product safety law Human rights law, Business law
Internet, digital, ATM APSS, mobile, SMS,
Government policies Rules and regulationsLaws, taxes, political stability/instability,regime in government
164
ANALYSIS OF THE MACRO ENVIRONMENTPESTEL FACTORS
POLITICAL
ECONOMIC
SOCIAL
TECHNOLOGICAL
ECOLOGICAL
LEGAL
165
ANALYSIS OF THE MACRO ENVIRONMENT
POLITICAL
The political environmentPolitical uncertainties/instabilityInternational political environment
166
ANALYSIS OF THE MACRO ENVIRONMENTECONOMIC
Employment/unemploymentInflation/deflationGovernment economic objectivesNI,GDP,&GNPThe Business CycleBOP & BOTTrade & exchange rate policyThe impact of international tradeInterest ratePricesCompetitionDemand
167
ANALYSIS OF THE MACRO ENVIRONMENTSOCIALDemographic: This is the study of the composition of a country’s population in terms of age, gender, sex, occupation.•Population•Age composition•Gender composition•Marital status and household structure•Income•Migration: Immigration & Emigration (Net migration)•Birth rate & Death rate•Fertility rate.•Trends in population•The dependency ratio•World population•Aggregate population•Population structure•Regional distribution of population•Ethnic groups•Occupational structure•The workforce in employment: some important trends•The changing role of women in work and society
168
Demographic studies and marketing
POPULATION:
WORLD POPULATION
Source: http://esa.un.org/unpp/
169
Age composition and distribution
Europe and the New Independent States
http://www.overpopulation.com/faq/basic_information/age_distribution/europe.html
Source
170
World population: 6000,000,000
The most highly populated countries in the world: Country: Population: Density1. CHINA 1,306,313,812 1362. INDIA 1,103,600,000 3283. UNITED STATES OF AMERICA 293,655,404 304. INDONESIA 241,973,879 1265. BRAZIL 186,112,794 216. PAKISTAN 162,419,946 2027. BANGLADESH 144,319,628 1,0028. RUSSIA 143,420,309 89. NIGERIA 128,771,988 13910. JAPAN 127,417,244 337
Source: http://en.wikipedia.org/wiki/World_population http://en.wikipedia.org/wiki/Population
171
Gender composition:
172
MARITAL STATUS AND HOUSEHOLD STRUCTURE
173
INCOME DISTRIBUTION
174
BIRTH RATE/ FERTILITY RATE
175
DEATH RATE
176
MIGRATION: Immigration/Emigration
177
TRENDS IN POPULATION
178
REGIONAL DISTRIBUTION OF POPULATION
179
OCCUPATIONAL STRUCTURE:
180
SOCIAL Social class Culture Reference groups The family Lifestyle Education Health Communication
181
ANALYSIS OF THE MACRO ENVIRONMENT
TECHNOLOGICAL
182
ANALYSIS OF THE MACRO ENVIRONMENT
ECOLOGICAL
183
ANALYSIS OF THE MACRO ENVIRONMENT
LEGAL Legislation imposed by governments The legal framework Role and objective of legislation Fair trading and the consumer Protecting the consumer Implications to the marketer.
184
INTERNATIONAL MARKETING:
1. What is international marketing
2. International marketing environment
3. International market entry strategy
4. International marketing mix
185
INTERNATIONAL MARKETING DIFFERENCES IN CULTURE
What is cultureCulture is sum total of belief, rituals, custom, tradition,
norms etc;that characterizes a particular group of people, society,
ororganization.
The sum total of learned beliefs, values and custom that serve to direct
customer behaviour
in a particular country market
Components of culture.
186
Differences in culture: There exist cultural differences in different
continents across the world with respect to the following:
1. Language
2. Aesthetics
3. Norms
4. Values
5. Rituals
6. Custom and tradition
187
CHAPTER 4: INTERNATIONAL TRADE THEORY
Demand and supply Tariffs Quotas BOP TOT IMPORTS & EXPORTS INTERNATIONAL CURRENCIES TRADE RESTRICTIONS BORDER CONTROL EXCHANGE RATE INTEREST RATE NATIONAL INCOME. BUDGET
188
ENVIRONMENTAL INFLUENCES ONINTERNATIONAL MARKETING
Socio/CulturalLanguageReligionAestheticsValues and attributesSocial organisationMaterial cultureHealthCommunication/transport.
PoliticalOperational restrictionsDiscriminatory restrictionsPhysical actions
EnvironmentalInfluences on InternationalMarketing
LegalLocal domestic lawsInternational lawHome domestic law
TechnologicalSatellite CommunicationsISDNInternetWWWThe Electronic Superhighway
EconomicDeveloped economiesEmerging economiesLess developed economiesCurrency movements
Ecological
189
INTERNATIONAL MARKET ENTRY STRATEGY
190
Content of PART C: Marketing in practice
An overview of the marketing system The context of marketing The integrated marketing mix: product The marketing mix: price The marketing mix: place The marketing mix: promotion The integrated marketing mix – service extension (people,
physical evidence and process) The management of marketing information Skills for the marketer Bringing it all together: the marketing plan
Source: CIM course book
191
THE LEARNING OBJECTIVES IN Marketing in practice
By the end of this module you should be able to: Collect relevant data from a variety of secondary information
sources Analyse and interpret written, visual and graphical data Devise appropriate visual and graphical means to present
marketing data Make recommendations based on information obtained from
multiple sources Evaluate and select media and promotional activities appropriate
to the organisation's objectives and status and to its marketing context
Calculate and justify budgets for marketing mix decisions Develop relationships inside and outside the organisation Apply planning techniques to a range of marketing tasks and
activities Undertake basic marketing activities and within an agreed plan
and monitor and report on progress Gather information for, and evaluate marketing results against,
financial and other criteria
192
Content of PART D Customer Communication
The importance of the Customer Buying behaviour The communication process The communication mix The role of information communication technology in
customer communications Effective communications Communicating in meetings, interviews and
negotiations Using statistical data and visual information Written communication formats.
Source: CIM course book
193
LEARNING OBJECTIVES OF Customer Communication
By the end of this module you should be able to: Recognise organisations as open systems and explain the
importance of relationships between the organisation and its suppliers, intermediaries, customers and other key stakeholders in a changing environment
Explain why it is important for marketers to understand consumer and industrial buying behaviour for marketing decisions
Explain the elements of the promotional mix and its fit with the marketing planning process
Explain the advantages and disadvantages of the range of communications tools available to an organisation
Develop internal and external communications using appropriate tools to suit a variety of target audiences and using an understanding of customer behaviour and customer information
Select appropriate verbal and non-verbal communications with people inside and outside the organisation
Demonstrate the importance of customers and customer service and apply customer care principles to create positive relationships with customers in a variety of contexts
194
Content of PART D Customer Communication
Unit 1: The importance of the CustomerWho are customers? Why are customers important?Why do people communicate in business?So who are your customers?Who are an organization’s customers?Internal CustomersInternal MarketingImproving customer communications.
Source: CIM course book
195
Content of PART D Customer Communication
Why do people communicate in Business: 1. To build relationships internally and externally with individuals and
groups 2. To give specific instructions to others on a range of business matters,
both procedural and strategic.3. To disseminate information on a range of corporate matters such as the
mission statement, policy issues or, in the case of the external market, on price changes or new promotional initiatives
4. To share ideas and values on work-related issues or procedural tasks5. To negotiate matters of policy as a joint venture or merger6. To discuss or negotiate on personal or professional matters such as
remuneration and other higher and lower level hygiene factors7. To motivate, interest and stimulate employees for commitment and
loyalty to the firm8. To create an awareness of the organization, its products or services
and persuade the external market, for example, to make a purchase decision or to request further information
9. To receive feedback in order to monitor whether the communication was understood and the reaction of the recipient to the message.
Source: CIM course book
196
Content of PART D Customer Communication
UNIT 2: BUYING BEHAVIOURThe purpose of communication
Communications and marketing
Relating customer behaviour to external communications
Communication objectives and buying process
How the buying process relates to communications
Understanding organizational buying behaviour
Bibliography.
Source: CIM course book
197
Content of PART D Customer Communication
UNIT 3: THE COMMUNICATION PROCESS:The purpose of communication
The communication chain
Barriers to successful communication
Avoiding barriers to communication
Effective communicators
Planning the business message
How the PASS framework can help in planning messages.
Source: CIM course book
198
Content of PART D Customer Communication
UNIT 4: THE COMMUNICATIONS MIX:The communications mix or promotions mixIntegrated Marketing CommunicationsAbove-the-line promotional activityBelow-the-line promotional activityCorporate imageBrand imageLogosPackagingPoint of sale display and Merchandising.Sales promotionExhibitionSponsorshipPublic relationsDirect MarketingEvaluating the effect pf advertisingThe role of the brief.
Source: CIM course book
199
Content of PART D Customer Communication
Above-the-line communication methods:
AdvertisementDefinition: This is any paid form of non-personal presentation and promotion of ideas, goods or
services byan identified sponsor
Advertisement can be done through the following means: Above-the-line advertisement. Radio
Television
Newspaper: Local, national and international newspapers; E.G The times, financial times, daily mirrow, express and star and the sun.
Internet
Magazine
Outdoor
CinemaSources: Philip Kotler(Principles of Marketing), CIM course book.
UNIT 4: THE COMMUNICATIONS MIX:
200
Content of PART D Customer Communication
ADVERTISMENT:This is any paid form of non-personal presentation and promotion of ideas, goods or
services by
an identified sponsor
UNIT 4: THE COMMUNICATIONS MIX:
Sources: Philip Kotler(Principles of Marketing-4th European Edition) and CIM course book.
201
ADVERTISMENT:
Main Advertising Decisions
Objectives setting
Communication
Objectives
Sales Objectives
Budget decisions
Advertising strategy
Campaignevaluation
Messagedecision
Media decision
Affordable approach
Percentage of sales
Competitive parity
Objective and task
Message strategy
Message execution
Reach, frequency,Impact
Main media types
Specific media vehicles
Media timing
CommunicationImpact
Sales impact
202
ADVERTISMENT:Important decisions in advertising:
Setting advertising objectives: The first step is to set advertising objectives. Advertising objective is a specific communication task to be accomplished
with a specific target audience during a specific period of time.
203
ADVERTISMENT:
Possible Advertising Objectives:
Informative advertisingTelling the market about a new product Describing available servicesSuggesting new uses for a product Correcting false impressionsInforming the market of a price change Reducing customers’ fearsExplaining how the product works Building a company image.
Persuasive advertisingBuilding brand preferenceEncouraging switching to your brandChanging customer perceptions of product attributesPersuading customers to purchase nowPersuading customer to receive a sales call
Reminder advertisingReminding customers that the product may be needed in the near futureReminding customers where to buy the productKeeping the product in customers’ minds during off-seasonsMaintaining top-of-mind product awareness.
204
ADVERTISMENT:Setting the advertising budget After determining its objectives, the company
next sets its advertising budget for each product.
Four methods for determining promotion budget
205
ADVERTISMENT:
Specific factors that should be considered when setting the advertising budget:
1. Stage in the product life-cycle:
2. Market share
3. Competition and Clutter
4. Advertising frequency
5. Product differentiation
206
ADVERTISMENT:
Developing Advertising Strategy:
Creating the advertising message:
No matter how big the budget, advertising can succeed
only if commercials gain attention and communicate
well.
207
ADVERTISMENT:
The changing message environment
208
ADVERTISMENT:
Message strategy:
209
ADVERTISMENT:
Message Execution
Any message can be presented in different execution styles such as the following:
Slice of life Lifestyle Fantasy Mood or image Musical Personality symbol Technical expertise Scientific evidence. Testimonial evidence or endorsement
210
ADVERTISMENT:
Selecting advertising media
Deciding on reach, frequency and impact
Choosing among chief media types
211
ADVERTISMENT:
Choosing among chief media typesMedium Advantages Limitations
Newspapers
Flexibility;timeliness; local market coverage;broad acceptance; high believability
Short life; poor reproduction quality; small pass-along audience.
Television Good mass-market coverage; low cost per exposure; combines sight, sound and motion; appealing to the senses.
High absolute cost; high clutter; fleeting exposure; less audience selectivity.
Radio Good local acceptance; high geographic and demographic selectivity; low cost.
Audio presentation only; low attention ( the ‘half-heard’ medium); fleeting exposure; fragmented audience
Magazines High geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life; good pass-along readership.
Long ad purchase lead time; high cost; some waste circulation; no guarantee of position.
Direct mail High audience selectivity; flexibility; no ad competition within the same medium; allows personalization.
Relatively high cost per exposure;
‘Junk mail’ image.
Outdoor Flexibility; high repeat exposure; low cost; low message competition; good positional selectivity.
No audience selectivity; creative limitations.
Internet High selectivity; low cost; immediacy; interactive capabilities.
Small, demographically skewed audience; relatively low impact; audience controls exposure.
212
ADVERTISMENT:
Selecting Specific Media Vehicles
Deciding on Media timing
213
ADVERTISMENT:
EVALUATING ADVERTISING:
214
ADVERTISMENT:
Repeat
Trial
Intention
Preference
Attitude
Aware
Unaware
215
ADVERTISMENT:
Other advertising considerations:
Organizing for advertising
216
ADVERTISMENT:
International advertising decisions
Standardisation or differentiation
Centralisation and decentralisation
217
ADVERTISMENT:Worldwide advertising media:
218
ADVERTISMENT:
Media planning, buying and costs
International advertising regulations
219
Below the line communication: UNIT 4: THE COMMUNICATIONS MIX
Corporate imageBrand image
Logos
Packaging
Point of sale display and Merchandising.
Sales promotion
Trade fairs and Exhibition
Sponsorship
Public relationsDirect MarketingDirect Mail
Evaluating the effect of advertisingSource: Priciples of Marketing by Philip Kotler and CIM course book.
220
UNIT 4: THE COMMUNICATIONS MIX
Below the line communication: SALES PROMOTION: It is a short-term incentive to encourage purchase or sales of a product or service. It consists of short-term incentives, in addition to the basic benefits offered by the
product or service, to encourage the purchase or sale of a product or service. Whereas advertising offers reasons to buy a product or service, sales promotion
offers reasons that would achieve immediate sales. Sales promotion seeks to motivate the customer to buy now. Sales promotion includes a wide variety of promotion tools designed to stimulate
earlier or stronger market response. These tools are used by many organizations-manufacturers, distributors, retailers,
trade associations and non-profit institutions-and may be targeted towards the consumer or final buyer, business customers, the trade or retailer and the company’s sales force.
Consumer promotion include money-off, coupons, premiums, contests and others. Trade promotion range from special discounts, free goods and loyalty bonuses to
training. Business promotion include many of the same tools used for consumer or trade
promotions such as conventions and trade shows, as well as sales contests. Sales force promotions include bonuses, commissions, free gifts and competitions.
221
SALES PROMOTION:
Consumer promotion Sales promotion designed to stimulate consumer purchasing, including
samples, coupons, rebates, price-offs, premiums, patronage rewards, displays, and contests and sweepstakes.
Trade (or retailer promotion) Sales promotion designed to gain reseller support and to improve reseller
selling efforts, including discounts, allowances, free goods, cooperative advertising, push money, and conventions and trade shows.
Business promotion Sales promotion designed to generate business leads, stimulate purchase,
reward business customers and motivate the salesforce.
Sales force promotion Sales promotion designed to motivate the sales force and make sales force
selling efforts more effective, including bonuses, contests and sales rallies.
222
SALES PROMOTIONMAJOR SALES PROMOTION TOOLS:CONSUMER PROMOTION TOOLS:1. Samples: Offers to consumers of a trial amount of a product2. Coupons: Certificates that give buyers a saving when they purchase a
product3. Cash refund offers (rebates): Offers to refund part of the purchase price of a
product to consumers who send a ‘proof of purchase’ to the manufacturer4. Price packs: Reduced prices that are marked by the producer directly on the
label or package5. Premiums: Goods offered either free or at low cost as an incentive to buy a
product.6. Advertising specialities: Useful articles imprinted with an advertiser’s name,
given as gifts to consumers.7. Patronage rewards: Cash or other awards for the regular use of a certain
company’s products or services.8. Point-of-purchase (POP) promotions: Displays and demonstrations that take
place at the point of purchase or sale.9. Competitions, sweepstakes, lotteries and games: promotions that offer
customers the chance to win something – cash, goods or trips – by luck or extra effort.
223
STAKEHOLDERS
Staff
Supplier
Distributors
Community
Competitors Management
Media
FinancialInstitutions
Pressure groups
Customers
Owners
Government
Stakeholders
224
MAJOR SALES PROMOTION TOOLS:TRADE PROMOTION TOOLS:
DISCOUNT: A straight reduction in price on purchases during a stated period of time
ALLOWANCE: (1)Reduction in price on damaged goods.
(2) Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer’s product in some way.
SALES PROMOTION
225
SALES PROMOTIONMAJOR SALES PROMOTION TOOLS:
BUSINESS PROMOTION TOOLS
1. Conventions and trade shows
2. Sales contests
226
SALES PROMOTIONRAPID GROWTH OF SALES PROMOTION
227
SALES PROMOTION
SETTING SALES PROMOTION OBJECTIVES
228
SALES PROMOTION-consumer marketMAJOR SALES PROMOTION TOOLS SamplesOffers to consumers of a trial amount a product CouponsCertificates that give a saving when they purchase a product Cash refund offers (rebates)Offers to refund part of the purchase price of the purchase price of a product to consumerswho send a ‘proof of purchase’ to the manufacturer Price packsReduced prices that are marked by the producer directly on the label or package Premiums Goods offered either free or at low cost as an incentive to buy a product Advertising specialtiesUseful articles imprinted with an advertiser’s name, given as gifts to consumers. Patronage rewardsCash or other awards for the regular use of a certain company’s products or services. Point-of-purchase (POP) promotionsDisplays and demonstrations that take place at the point of purchase or sale Competitions, Sweepstakes, lotteries and gamesPromotions that offer customers the chance to win something – cash, goods or trips – by luck or
extra effort.
229
Below the line communication:
PUBLIC RELATIONS1.This is a planned, sustained and deliberate effort by an
organization
to maintain a good relationship with the public.
2.Public relations means building good relations with the company’s
various publics by obtaining favorable Publicity, building up a good
‘corporate image’, handling or heading off unfavourable rumours,
Stories and events. Major PR tools include press relations, product
publicity, corporate communications, lobbying and counselling:
230
PUBLIC RELATIONSPublic relations is another mass-promotion technique. This concerns building good
relations with the
company’s various publics by obtaining favourable publicity, building up a good ‘corporate image' and
handling or heading off unfavourable rumours, stories and events. Public relations (PR) departments
Perform any or all of the following functions:
1. Press relations or press agency: Creating and placing newsworthy information in the news media to attract attention to a person, product or service.
2. Product publicity: Publicising specific products
3. Public affairs: Building and maintaining local, national and international relations.
4. Lobbying: Building and maintaining relations with legislators and government officials to influence legislation and regulation.
5. Investor relations: Maintaining relationships with shareholders and others in the financial community.
6. Development: Public relations with donors or members of non-profit organisations to gain financial or volunteer support.
231
PUBLIC RELATIONS Public relations is used to promote products, people, places, ideas,
activities,organisations and even nations.Trade associations have used public relations to rebuild interest in decliningcommodities. Nations use public relations to attract more tourists, foreign
investmentand international support. The government uses public relations to sensitize the public about the
consumptionof dangerous products such as cigarettes and alcohol.
The government also uses public relations to make the public to protect them selves
from diseases e.g. AIDS. Steal in this light, the government uses PR to educate the
public about precautionary measures to take in so far as Bird Flu Virus is concerned.
Pressure groups such as the Food Standards Agency also uses the PR to inform customers about those harmful products which can damage their health.
232
PUBLIC RELATIONSMAJOR PUBLIC RELATIONS TOOLS: PR professionals use several tools. One essential tool is news . PR professionals find or create favourable newsabout the company and its products or people. Sometimes news stories occur naturally. At other times, the PR person cansuggest events or activities that would create news. Speeches also create product and company publicity. Increasingly, company executives must field questions
from the media or give talks at trade associations or sales meetings. These events can either build or hurt the company’s image.
Another common PR tool is special news, ranging from news conferences, press tours, grand openings and firework displays to laser shows, hot-air balloon releases, multimedia presentations and star-studded spectaculars, or educational programmes designed to reach and interest target publics.
Public relations people also prepare written material to reach and influence their target markets. These materials include annual reports, brochures, articles and company newsletter and magazines.
Audiovisual materials such as films, slide-and-sound programmes and video and audio cassettes, are being used increasingly as communication tools.
Corporate-identity materials also help create a corporate identity that the public immediately recognises. Logos, stationery, brochures, signs, business forms, business cards, buildings, uniforms and even company cars and trucks make effective marketing tools when they are attractive, distinctive and memorable.
Finally, companies might improve goodwill by contributing money and time to public service activities: campaigns to raise funds for worthy causes- for example, to fight illiteracy, AIDS, Bird Flu, Tuberculosis, cancer; support the work of a charity, or assist the aged and handicapped- help to raise public recognition.
Sponsorship is any vehicle through which corporations gain public relations exposure. Corporate sponsorships have become an important promotional tool for companies looking to lift their brand image, or introduce new product lines or services. Worldwide spending on sponsorships totalled $24bn in 2002, an annual increase of 3.4 percent according to a Chicago based research company (IEG).
233
PUBLIC RELATIONSMAIN PUBLIC RELATIONS DECISIONS
234
PUBLIC RELATIONSSETTING PUBLIC RELATIONS OBJECTIVES
235
PUBLIC RELATIONSCHOOSING PUBLIC RELATIONS MESSAGES
AND VEHICLES
236
PUBLIC RELATIONSIMPLEMENTING THE PUBLIC RELATIONS
PLAN
237
PUBLIC RELATIONSEVALUATING PUBLIC RELATION RESULTS
238
Below the line communication:
DIRECT MARKETING
It is direct communications with carefully targeted
individual customers to obtain an immediate response.
239
DIRECT MARKETINGTHE BENEFITS OF DIRECT MARKETING TO THECONSUMERDirect marketing benefits buyers in many ways:1. First it is convenient: from the comfort of their homes or offices, customers can browse mailcatalogues or sellers’ websites at any time of the day or night. Buying is easy and private. Customer confront fewer buying hassles and do not have to face salespeople or open themselves up to persuasion andemotional pitches. Business Customers can learn about available products and services without waiting forand tying up time with sales people.2. Direct Marketing often gives shoppers greater product access and selection: For example, the world’s thelimit for web. Cyberstores such as Amazon, CDNow and others can offer an almost unlimited selectioncompared to the more meagre assortments of counterparts in the bricks- and –mortar world. Beyond abroader selection of sellers and products, online and Internet channels also give buyers access to a wealth ofcomparative information, information about companies, products and competitors, at home and around theglobe. Good websites often provide more information in more useful forms than even the most solicitoussalesclerk can. Amazon. COM and CDNow, for example, offer best-seller lists and reviews:3. Finally, direct marketing- especially online buying – is interactive and immediate. Customers can often interactwith the sellers by phone or on the seller’s website to create exactly the configuration of information, products orservices they desire, then order them on the spot. Furthermore, the internet and other forms of direct marketing
givecustomers a greater measure and sense of control. For example, a rising proportion of car buyers ‘shop online’,arming themselves with information about car models and dealer costs before showing up at a dealership.
240
DIRECT MARKETING
THE BENEFITS OF DIRECT MARKETING TO
THE SELLER: Direct marketing also yields many benefits to sellers:
1. Direct marketing is a powerful tool for customer relationship building:
2. Direct marketing gives sellers access to buyers that they could not reach through other channels. For example, the internet provides access to global markets that might otherwise be out of reach.
3. Finally, direct marketing can offer sellers a low-cost, fast and efficient alternative for reaching their markets. For example, direct marketing has grown rapidly in B2B marketing, partly in response to the ever-increasing costs of marketing through the sales force.
241
DIRECT MARKETINGFORMS OF DIERCT MARKETING
Telephone marketing
Direct-mail marketing
Catalogue marketing
Direct-response television marketing
Integrated direct marketing
242
Content of PART D Customer CommunicationUNIT 4: THE COMMUNICATIONS MIX: Sources: Philip Kotler(Priciples of Marketing
Below the line advert
Advantages Disadvantages
Corporate image
Brand image
Logos
Packaging
POSDM
Sales promotion
Exhibitions
Sponsorship
Public relations
Direct marketing
243
UNIT 4: THE COMMUNICATIONS MIX:
Above the line advert Advantages Disadvantages
Television: Terrestrial, satellite, cable and interactive: Local, national and International.
Can provide movement/colour/sound and emotion.It is an intrusive medium.Viewers can identify with situations in adverts.Mass, regional or specific coverage available.
Short time of adverts restricts information-passing.Can be repetitive which will result in boredom for viewer.Costly/time consuming to produce live advertsAdverts shown when many supply points are closed.Adverts not retained for review(consider home videos)Can be difficult for viewer to respond(consider tele-marketing)
Radio: Local, national and international.
Airtime is not very expensive.Offers sound effects and emotion.Versatile in location (Portable)It is intrusive.
Non-visualTransmit only non complex infoNeeds repetitive advert to ensure coverage.High risk of listener intolerance due to repetition.
Press Advertising: It covers all printed papers; Newspapers, Magazines and directories. It may be national, regional, specialist, trade or general publications.
High circulation with good opportunity to see(OTS).Audience can be easily identifiedInformation can be saved and retrievedAdvantages can include response coupons.Relatively low costs involved(both preparation and advert space)
No sound and MovementIf too many adverts, some will be missed.Magazines require long lead time.Printing only as good as the staff involved.
244
UNIT 4: THE COMMUNICATIONS MIX:
Above the line advert Advantages Disadvantages
Cinema
Internet
Outdoor
245
Content of PART D Customer Communication
UNIT 5: THE ROLE OF INFORMATION COMMUNICATION TECHNOLOGY IN CUSTOMER RELATIONSHIPS:
How communications with customers is changing
The evolution of e-business
Using ICT to improve customer communications.
The Internet
Websites
Electronic Mail
Intranet
Extranet
E-Commerce
E-Business
E-Marketing
Signposts for the future
Telecommunications
Digital technology Source: CIM course book
246
UNIT 6: EFFECTIVE COMMUNICATIONS
Communication skills in marketing.Verbal communicationNon-verbal communicationUsing and interpreting non-verbal communicationListening skillsUsing the telephonePlanning telephone callsGuidelines for making effective telephone callsGuidelines for receiving callsConference calls
Presentation skills.
Source: CIM course book
Content of PART D Customer Communication
247
Content of PART D Customer Communication
UNIT 7: COMMUNICATING IN MEETINGS, INTERVIEWS AND NEGOTIATIONS:
Meetings
Reasons for meeting
Types of meetings.
Managing meetings
Constituting a formal meeting
Terminology of meetings
Meeting documents
The role of interview and negotiations
Purpose of interview
Types of interview
Planning the interviews
The interview process
Types of questions
Negotiations
Source: CIM course book
248
Content of PART D Customer Communication
UNIT 8 : USING STATISTICAL DATA AND VISUAL INFORMATION:
Why is data relevant to marketing?
Interpreting, selecting and summarizing information
Why use visual information?
How to present visual information?
Problems with distorting information.
Source: CIM course book
249
Content of PART D Customer Communication
UNIT 9: WRITTEN COMMUNICATION FORMATS
Why study communication formats?
Written communications skills in marketing
When to use letters
The layout of a business letter
Types of letters
Memoranda
Notices
Reports
Articles.
Source: CIM course book
250
WRITTEN COMMUNICATION FORMAT(a) Blocked layout (b) Semi-blocked
layout
Letter head Letterhead---------------------- ------------------------
----------------------- -------------------------
--------------------- ----------------------------------------------- ----------------------------------------------- ---------------------------
------------------ ------------------------------------------------------------ -------------------------------------------------------------- ------------------------------------------------------------- -------------------------------------- ----------------
--------------- ------------------------------- --------------------------------- -----------------
Layouts for business letters: (a) blocked; (b) semi-blocked
251
WRITTEN COMMUNICATION FORMAT LETTERHEAD
Letter references
Date
Inside address of recipient
Attention letter
Salutation
Subject heading
Body
Complimentary Close
Signature
Name
Position
Enclosure reference.
A template for a business letter
252
WRITTEN COMMUNICATION FORMAT
Midshire Bank Plc High Street Assington Berkshire AS 1 6ELMr Joe Davies17 Goldthorpe WayAssburyBerkshire AS2 4WQ
12 April 200X
Dear Mr Davies
At Midshire Bank we try to provide banking facilities of the highest quality in order to accurately meet ourcustomer’s needs. To do this ti is essential that we listen to what our customers hafe to say. Wwe wouldlike you to help uus by giving us your opiinion of Midshrie Bank’s services.
We are asking an independent market research company. TMI Limited to interview a number of customersover the next few weeks. TMI Limited is a reputabnle company and your individual responses will becompletely confidential to them, according to the Market Research Society’s Code of conduct.
They will be co ducting the interviews by telephone and so an interviewer may telephone you at some pointover the next few weeks.
Because TMI Limited will choose who to overview, you might not be contacted in this instance. Ift yhour are,we wouold vallue your contribution and hope you wil be able to help use if asked.Yours SincerelySignatureCharles GowersBranch Manager.
A sample customer letter
253
WRITTEN COMMUNICATION FORMAT
MAKE-IT BUILDING SUPPLIERS Churchyard Grove Pickwick Lancashire LU1 5TF Tel: 0123 668791Our ref: HBJ/abcOctober 1st 20XX
The Timber Merchants LtdStation RoadRiponYorkshire YU8 TR3
For the attention of Deborah Jones
Dear Ms Jones,
Account Number: 5690 Special order under invoice 123 Further to our last order, would you supply the following additional items: 1 20 metres to extra hard-wearing timber for fencing. £5.95 per metre excl.VAT=£1192 5 litres of creosote liquid in natural colour. £2.75 per litres excl.VAT=£13.753 24 litres of indoor wood varnish in antique pine. £1.44 per litres excl VAT= £34.56 Balance £167.31 VAT on items £29.28 Total balance £196.59 The balance should be started on the above invoice and charged to our existing account. I would appreciate
delivery by November 15th, latest.Yours sincerely, SignHarold JenkinsPurchasing Manager.
An order letter.
254
WRITTEN COMMUNICATION FORMAT
ULTIMATE COMPUTER COMPANY Ltd 3 THE Gateway Hounslow Middlesex TW15 6TU Tel: 0181 967 6345TRJ/abcOctober 1st 20XX
Mr Andrew CollinsMarketing Communications Consultants‘The Nook’Twinkle LaneBeaconsfieldBUCKS DU18 74R
Dear Mr Collins
Ref: ‘Computers of the World’ Exhibition, London, 20XXI had the pleasure of using your professional services in helping us to prepare andpresent at the above last year.We are now in the process of planning to exhibit our new product range again this year and would like to know
whether you would offer us your services. I am pleased to enclose our latest catalogue.Please contact me at the end of next week to arrange for a meeting at our offices.I look forward to hearing from you.
Yours sincerely,
Timothy R. JonesMarketing Manager
Enc. Catalogue of product range X.
A letter of enquiry.
255
WRITTEN COMMUNICATION FORMAT
BEAUTY POTIONS LTD
2-6 Staines Road
Windsor
Berkshire BK7 9LE
Tel: 01753 576423
JK/abc
October 1st 20XX
Variety Fragrances
10 Harrow Road
Wembley
Middlesex 8TU 65R
For the attention of Mr Gardiner
Dear Mr Gardiner,
On September 5th 20XX, we received your order 1112, together with the invoice, 2224.
You will note that the first item on the invoice is listed as 50. Fragance ‘Irresistible’, but unfortunately we received 50. Fragrance ‘Uncontrollable’. A copy of the invoice is attached.
Please be kind enough to collect the wrong items and have them replaced by 50. Fragrance ‘Irresistible’ at the same time.
I look forward to receiving the correct order by November 1st 20XX.
Sincerely,
Joanna Kemp
Sales and Purchasing Manager
Enc. Copy of invoice 2224
A letter of complaint
256
WRITTEN COMMUNICATION FORMAT
CATERING WHOLESALERS LTD 35 Redruth Avenue Tunbridge Kent TN15 UCI T el: 01932 57311HB/abcOctober 1st 20XX
Mr R.AndersonThe Manager‘The Restaurant’76 Sevenoaks RoadSevenoaksKENT
Dear Mr Anderson,
Thank you very much for your recent application for credit. I am pleased to inform you that this has been approved.
Our terms and conditions are as follows: A credit limit of £2000 is available for your establishment. Invoices must be settled within 15days of the date of issue, after which an interest charge of 5%
will be levied on outstanding balances.
Yours sincerely,
Harry BainsCredit Manager.
A letter approving credit
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FINANCE and INSURANCE Co
The Causeway Newcastle upon Tyne NN4 65T Tel: 0191 35202SB/abcOctober 1st 20XX
The Membership SecretaryChartered Institute of MarketingMoor HallCookhamBerks
Dear Sir/Madam,Re: Caroline Taylor
I am pleased to support Ms Taylor’s application for membership of the Chartered Instituteof Marketing
Ms Taylor has been in our employment for 6 years working in the area of Direct Marketing.
I understand that she passed all her CIM examinations and will be pleased to receivefurther benefit as a member of the CIM
Yours faithfully,l
Sheila BrownMarketing Director.
A letter of recommendation
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MEMO
Medical Software Ltd
To: Carole Francis(Sales and Marketing Director)
From: Clare White (Marketing Manager)
Copy to: Hannah Craven (secretary)
Subject: Software 20XX Exhibition, Amsterdam, December 1st –3rd
Date: October 1st 20XX
We have 8 weeks before the exhibition takes place and need to finalize the details
of the follow-up campaign, particularly the role of our sales force.
Further to our meeting last week, we also need to discuss the sales promotion
initiatives to push our products following the exhibition.
Please confirm that a meeting on October 5th at 3pm in my office will be
convenient.
A memo
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An example of an email message.
2f07b5c3F00000002f07b5c3kasongwe
Message Composition
Send now Quote Attach Address Stop
Subject: Click here to enter the subject: exhibition material
Addressing Attachments
Mail To: asonjude@yahoo.co.ukCc: Click here to enter carbon copy recipientsJohn.brown@apt.co.uk
Dear Jane
Thanks for the opportunity to quote for the exhibition material job. I have produced some costings and draft timescale based on our requirements. Please see the attachment. Ring me if you have any queries. I amount of the office until Monday but I will ring you then to see if you want me to proceed with thework.
Regards
Alex Kelly
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A notice
SAFETY FIRST!
A Special First-AID Course designed to give You basic introduction will be available free To all employees on the following dates.
October 1st 5-6pm November 1st5-6pm December 1st 5-6pm
The number of places is limited to 20 per class so early booking is advisable.
Contact: Jane Slater, ext. 123
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An example of a formal report
REPORTTO: Denise Wood, Marketing ManagerFROM: Amy Mills, Marketing AssistantDATE: 6 December 2005GO EASY- THE CASE FOR A WEBSITE & ON-LINE BOOKING SERVICE
1.Introduction
2.Findings
3. Conclusions
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PRINTMAN PRINTING COMPANYReport on Office Telecommunications Facilities
To: Mark Scrivens, Managing DirectorFrom: Jo Goodwin, Sales and Marketing ManagerDate: 2 December 2005Introduction
FindingsArguments for1. Arguments against1.Conclusions.Recommendation
An example of an informal report