Instituto Superior de Contabilidade e Administração do Porto

Licenciatura em Marketing

Sebenta 2010/2011

Inglês de Negócios I

Docente:

Mestre Carina Cerqueira

Instituto Superior de Contabilidade e Administração do Porto

Curso: Licenciatura em Marketing

Regime: Diurno

1º Ano; 1º semestre

Ano Lectivo: 2010 - 2011

Docente: Mestre Carina Cerqueira (Gabinete 333)

Programa da Unidade Curricular

1. Marketing: concept analysis

2. Marketing Mix: 4P’s or 7P’s

3. Marketing Plan: SWOT analysis; Product.

o Marcas. Segmentos de Mercado. Produtos e mercados. Place: Locais de distribuição e venda;

Price: Preços – estratégias para a definição de preços. Relação preço/qualidade. Promotion:

Técnicas promocionais. Estudos de casos.

Introduction to Business Studies

1. MARKETING: CONCEPT ANALYSIS

MARKETING – What is it?

Marketing is a broad term that includes many activities and requires many skills. Marketing is the process of

planning, pricing, promoting, selling, and distributing ideas, goods, or services to create exchanges that satisfy

customers. Note that marketing is a process. This means it is ongoing and it changes. As a marketer, you need to

keep up with trends and consumer attitudes. The products, ideas, or services you develop and the way you

price, promote, and distribute them should reflect these trends and attitudes. All functions of marketing

support this effort. Current marketing practices focus on customers and maintaining a close relationship with

them.

Ideas, Goods, and Services

Marketing promotes ideas, goods, and services. Politicians, for example, use marketing techniques to promote

their platform, or ideas. Goods are tangible items that have monetary value and satisfy your needs and wants

such as cars, toys, furniture, televisions, clothing, and candy. Intangible items that have monetary value and

satisfy your needs and wants are services. Intangible means you cannot physically touch them. In most cases,

services involve a task, such as cooking a hamburger or cutting hair. Banks, dry cleaners, amusement parks,

movie theaters, and accounting offices all provide economic services. Every time someone sells or buys

something, an exchange takes place in the marketplace.

The marketplace is the commercial environment where such trades happen. It is the world of shops, Internet

stores, financial institutions, catalogs, and much more.

Foundations of Marketing

The practice of marketing depends on four key areas of knowledge.

1. Business, management, entrepreneurship

Understanding the basics of business, management, and entrepreneurial concepts that affect business

decision making

2. Communication and interpersonal skills

Understanding concepts, strategies, and systems needed to interact effectively with others

3. Economics

Understanding the economic principles and concepts that are basic to marketing

4. Professional development

Understanding concepts and strategies needed for career exploration, development, and growth

Seven Functions of Marketing

The seven functions include distribution, financing, marketing information management, pricing,

product/service management, promotion, and selling. These functions define all the aspects that are part of the

practice of marketing.

Distribution

Distribution is the process of deciding how to get goods in customers’ hands. Physically moving and storing

goods is part of distribution planning. The main methods of transportation are by truck, rail, ship, or air. Some

large retail chains store products in central warehouses for later distribution. Distribution also involves the

systems that track products so that they can be located at any time.

Financing

Financing is getting the money that is necessary to pay for setting up and running a business. Business owners

often obtain bank loans to start a new business. Some also form corporations and may sell shares (or stock) of

the business. Financing also involves decisions such as whether to offer credit to customers. Most retailers offer

customers payment options such as MasterCard or Visa, while other stores offer their own credit services.

Marketing Information Management

Good business and marketing decisions rely on good information about customers, trends, and competing

products. Gathering this information, storing it, and analyzing it are all part of marketing information

management. Collecting information is done on a continual basis and through special marketing research

studies. This is what marketers do to find out about customers, their habits and attitudes, where they live, and

trends in the marketplace. Have you ever been asked to complete a questionnaire about the service at a

restaurant or other type of business? If so, you have participated in marketing research. Companies conduct

research so they can be successful at marketing and selling their products.

Pricing

Pricing decisions dictate how much to charge for goods and services in order to make a profit. Pricing decisions

are based on costs and on what competitors charge for the same product or service. To determine a price,

marketers must also determine how much customers are willing to pay.

Product/Service Management

Product/service management is obtaining, developing, maintaining, and improving a product or a product mix

in response to market opportunities. Marketing research guides product/service management toward what the

consumer needs and wants.

Promotion

Promotion is the effort to inform, persuade, or remind potential customers about a business’s products or

services. Television and radio commercials are forms of promotion. This type of promotion is called

advertising. Promotion is also used to improve a company’s public image. A company can show that it is socially

responsible by recycling materials or cleaning up the environment. Promotion concepts and strategies are used

to achieve success in the marketplace.

Selling

Selling provides customers with the goods and services they want. This includes selling in the retail market to

you, the customer, and selling in the business-to-business market to wholesalers, retailers, or manufacturers.

Selling techniques and activities include determining client needs and wants and responding through planned,

personalized communication. The selling process influences purchasing decisions and enhances future

business opportunities.

The Marketing Concept

The marketing concept is the idea that a business should strive to satisfy customers’ needs and wants while

generating a profit for the firm. The focus is on the customer. For an organization to be successful, all seven

functions of marketing need to support this idea. The personnel responsible for those functions must

understand the marketing concept and reach for the same goal in order to send a consistent message to the

customer. The message is that the customer satisfaction is most important. Everyone in an organization needs

to recognize that repeat customers keep a company in business. For example, the switchboard operator in a

large corporation or the pizza delivery person must understand the marketing concept and be mindful of the

company’s goals. Everyone in an organization is an extension of that firm and must provide the best possible

service to its customers. Businesses that stress the marketing concept with all employees are successful.

Customer Relationship Management (CRM)

In today’s marketplace, customer relationship is most important. Customer Relationship Management (CRM) is

an aspect of marketing that combines customer information (through database and computer technology) with

customer service and marketing communications. Marketers who specialize in CRM try to create more

meaningful one-on-one communications with the customer by applying customer data (demographic, industry,

buying history, etc.) to every communication.

READING SKILLS

Where Has All The Good Marketing Gone?

What You Can Learn From Top Marketers

By Michael Fleischner

I don’t know about you, but I feel like there is a scarcity of good marketing today. What do I mean “good

marketing?” You know the kind of marketing that sticks with you and drives you to take action. The only

marketing that has really moved me in the last couple of years has been from Apple. How do I know? I own 3

iPods’.

You might be thinking to yourself that it’s more the product that drives behavior than the marketing, and when

it comes to the iPod I don’t necessarily disagree. However, I would argue that in some ways, the marketing has

to be even better than it does with your run of the mill product.

Apple has maintained a certain level of success with their marketing and now that marketing must not only tie

together with previous marketing campaigns, but convince current customers that their current products are

no longer sufficient.

It appears that this is done, not through sleight of hand, but by showing you what you can’t do with your

current device. By illustrating this in a manner that is contradictory to your current satisfaction, it does make

you feel like your iPod – which was fine until a moment ago has suddenly become inadequate. To me, that’s

really good marketing.

So what can be learned from the tens of millions that Apple spends on advertising every year? I think the

answer to that question is to work in lock step with your product development team to showcase developments

and tap the emotions of those using your products. When I use my iTouch, I feel empowered, cool, and

complete. I wouldn’t have reached that conclusion without the help of marketing to get me there.

The lesson that I’ve learned is that marketing, if done correctly, helps us to define how we feel about a product.

Once you have prospects and customers attaching emotions to your products, you develop loyal customers. The

next time that you’re thinking about a marketing campaign, consider how you want your customers to feel

about your product.

Manage the entire purchase decision process in order to consistently manage the experience to reinforce or

produce these desired feelings. Once you’ve been able to do that successfully, your creative, marketing

messages and promotions should be relatively easy to produce. Now that’s what I call good marketing.

EXERCISES

Exercise 1 - Marketing Definitions:

Fill each gap in the sentences below with the correct word from the box.

customers developing distribute needs place price Producing

product product profit promote service time want

Marketing is concerned with getting the right (1) ___________________ to the right (2) ___________________ at the right

(3) _____________________________.

Marketing is about meeting consumer (4) ____________________________ at a (5) _____________________________________.

Marketing makes it easier for (6) _________________________ to do business with you.

Marketing aims to find out what people (7) ____________________________________; then (8) _______________________________

and (9) ________________________ a (10) _________________________ or (11) ____________________________________ that will

satisfy those wants; and then determining the best way to (12) ___________________________________________ (13)

___________________________________ and (14) __________________________ the product or service.

Exercise 2 - Use the following words to complete the text below.

Product Goods Research Plan Demand Mix Customers Quality Marketing Services Distribution

Marketers and all levels of management realise the vital importance of (1) _______________________. This has

become the watchword of good business. (2) _________________________ and experience has shown that (3)

_______________ will pay more for (4) ________________________ and (5) _____________________________ of high quality, and

also that they expect every aspect of the (6) ____________________________, including (7) ________________________________,

to meet the highest standards. The job of marketers is to design a (8) _________________________ (9)

____________________ with a (10) _____________________________ of all the necessary components to satisfy consumer

(11) ___________________________.

Exercise 3. - Fill in the missing words in the table.

Verb Agent General Noun (1) Market Marketer (2) Distribute (3) Competition (4) Advertising

Advertisement (5) Supplier (6) Sponsor (7) Consume (8) Produce (9) Analyst (10) Researcher (11) Import

Exercise 4. - Complete the sentences below with words from the world table.

A. Marketers’ m_______________________ p__________________________ to customers.

B. Advertisers’ a_____________________ to c_____________________________.

C. Market analysts a _________________________ the performance of s_____________________________ and the

behaviour of c______________________.

D. The opposite of export is ______________________________.

E. The opposite of demand is ____________________________.

F. C___________________________ is good for consumers.

G. S___________________________ is a form of a ____________________.

Exercise 5. - For each definition choose the correct word or phrase.

A. Providing money to cultural or sporting activities in exchange for advertising rights.

B. A business which specializes in giving advice and support to companies about marketing and markets.

C. An economy which allows open and reasonably free exchange between private companies.

D. A market in which there are too many suppliers producing similar products.

E. A market in which there are few suppliers producing goods that a lot of people want to buy.

F. A company which sells more of a particular type of product than its competitors.

G. A person who uses their specialist knowledge of a specific market to try to explain what has happened

and predict what will happen.

H. A specific promotional activity over a limited period of time.

I. The activity of moving goods from the producer to the consumer.

J. The activity of selling goods to other countries.

K. The proportion of the total market which one company controls.

L. What a company or organization says it intends to do for its customers/clients and the community.

1. (a) promotion (b) grant aid (c) sponsorship

2. (a) marketing consultancy (b)counselling service (c) company analysts

3. (a) command economy (b) conservative economy (c) free market economy

4. (a) saturated market (b) buyers’ market (c) heavy market

5. (a) weak market (b) sellers’ market (c) light market

6. (a) trend setter (b) multinational (c) market leader

7. (a) market analyst (b) forecaster (c) market broker

8. (a) campaign (b) season (c) trend

9. (a) selling (b) distribution (c) orientation

10. (a) multinational (b) exporting (c) exchange distribution

11. (a) dominion (b) market place (c) market share

12. (a) corporate mission (b) strategic plan (c) corporate image

READING SKILLS

The Top 10 Marketing Tips of All Time

With more than a decade of experience in marketing, ranking from pay-per-click to direct mail, I’ve seen a lot of

failures and far more successes when it comes to marketing.

Today, the art of marketing is far more complex than it once was. However, many of the same basic principles

still apply. Too often, professional marketers and small business owners overlook the basic techniques that

have separated successful campaigns from those that never turn a profit. Here is my all time list of effective

marketing tips.

Know your audience. Successful campaigns get that way because marketers know their audience. They fully

understand their needs, how to help meet those needs and how to create demand. Knowing and understanding

your audience through proper market segmentation means a well targeted campaign that generates a

profitable return.

Focus on the offer. A marketing offer is the driving force of marketing promotions that drive results. In fact,

market testing has proven that the offer is the most significant criterion for conversion. Focus on your offer if

you want to be successful.

Split test. Never ever run a campaign without testing something. One of the most common is a split test which

allows you to simultaneously test two versions of something. It can be a web page, post card, or email. Split

testing is essential for improving performance.

Never work alone. The most creative ideas come from working with other creative people. Don’t feel like you

need to have all the answers or great ideas. You may start with an idea, but an open dialog with creative

individuals will make it better.

Don’t sell on price. I’ve seen so many marketers fail because they sell on price alone. This leads to a discounting

war, lower profitability, and often bankruptcy. Rather, focus on creating so much value that the perception of

price becomes insignificant.

Consistent messaging. Consider the entire user experience before you launch a campaign. From email to

website to offer, is the prospect having a consistent user experience? If they are, your campaigns stand above

98% of others.

Create value after the sale. As marketers, it’s our job to understand our market segment and build relationships,

not dump people off at the front door of our store and walk away. Focus as much of your energy on building

relationships with customers as you do prospects.

Test. Test. Test. In addition to split testing, you should consider multiple forms of testing in each marketing

discipline. For direct mail, test headlines, offers, copy, time of direct mail drop, etc. Consider testing a life long

mission.

Integrated Marketing Works Best. You can’t rely on one form of marketing to carry you to success. It’s okay to

generate most of your leads or sales through PPC marketing if you will but what happens when that dries out?

Use multiple media sources to meet your goals.

Nothing can replace experience. You can run out and hire all of the best consultants in the world, but you still

have to do the work. Nothing can replace actual experience. It will make you a stronger marketer and more

successful in the long term.

Apply these helpful marketing tips if you want to be truly successful. These techniques and tips are applied by

successful marketers on a daily basis. The result is an ever growing success rate of marketing success.

2. Marketing Mix: 4P’s or 7P’s

The four Ps and three more Ps

The traditional marketing mix was described in terms of four Ps:

o PRODUCT – the goods or services

o PRICE – the cost of the product

o PLACE – often called distribution

o PROMOTION - this aims to make people aware of the product.

In recent years other considerations have been added, giving a mix of normally seven Ps. The additional

three, sometimes referred to as service Ps are:

o PACKAGING – or everyone involved from producer to consumer

o PHYSICAL EVIDENCE – or anything that shows the existence of the company, e-g- its buildings,

vehicles, website, stationery, staff uniforms, badges.

o PROCESS – this is the interaction between everyone involved.

Market and Market Identification

Marketers know that their product or service cannot appeal to everyone. To do their job, they look for people

who might have an interest in or a need for their product. They also look at people who have the ability to pay

for their product. These people often share other similar needs and wants. All people who share similar needs

and wants and who have the ability to purchase a given product are called a market.

You could be part of the market for video games, but not be part of the market for an expensive car. Even

though you may want an expensive car, you may not have the means to buy one. If you liked video games and

had the resources to buy or rent them, you would be part of the video game market.

Consumer versus Industrial Markets

There are different types of markets. A market can be described as a consumer market or an industrial market.

The consumer market consists of consumers who purchase goods and services for personal use. Consumers’

needs and wants generally fall into a few categories that address their lifestyles. For the most part, consumers

are interested in products that will save them money, make their life easier, improve their appearance, create

status in the community, or provide satisfaction related to some other personal motivation.

The industrial market or business-to- business (B-to-B) market includes all businesses that buy products for

use in their operations. The goals and objectives of business firms are somewhat different from those in the

consumer market. Most relate to improving profits. Companies want to improve productivity, increase sales,

decrease expenses, or in some other way make their work more efficient. Companies that produce products for

sale in the consumer market consider the reseller of their products to be part of the industrial market.

Therefore, they require two distinct marketing plans to reach each market.

Market Share

A market is further described by the total sales in a product category. Examples of categories are video games,

fax machines, cameras, ice cream, or soft drinks. A company’s market share is its percentage of the total sales

volume generated by all companies that compete in a given market. Knowing one’s market share helps

marketers analyze their competition and their status in a given market. Market shares change all the time as

new competitors enter the market and as the size of the market increases or decreases in volume.

Target Market and Market Segmentation

Businesses know they cannot convince everybody to buy their product or service.

They look for ways to offer their product or service to the people who are most likely to be interested. This

involves segmenting, or breaking down the market into smaller groups that have similar needs. Market

segmentation is the process of classifying customers by needs and wants.

You already know that a market can be segmented into a consumer and an industrial market. Within those

markets, further segmentation is possible. The goal of market segmentation is to identify the group of people

most likely to become customers.

The group that is identified for a specific marketing program is the target market. Target markets are very

important because all marketing strategies are directed to them. When a business does not identify a target

market, its marketing plan has no focus. Identifying the target market correctly is a key to success.

Consumers versus Customers

A product may have more than one target market. For example, manufacturers of children’s cereal know that

they need to target children and parents differently. They have two target markets: one is the children

(consumers) who will be asking for the cereal and eating it. The other is the parents (customers) who need to

approve of it and will be buying it. To reach the children, marketers might advertise on Saturday morning

television programs specifically designed for children. The advertising message might be how much fun it is to

eat this cereal. To reach parents, print advertising in magazines such as Family Circle or Parenting might be

used, and the ad message might stress health benefits.

To develop a clear picture of their target market, businesses create a customer profile. A customer profile lists

information about the target market, such as age, income level, ethnic background, occupation, attitudes,

lifestyle, and geographic residence. Marketers spend a lot of money and time on research to collect data so that

they understand the characteristics of their target market’s customer profile.

This information helps them make intelligent marketing decisions. An easy and fun way to understand

customer profiles is to look at magazines. If you thumb through a magazine’s articles and advertisements, you

will know who reads the publication.

READING SKILLS

Media Advertising

Learn the basics of multiple types of ads - print, television, radio, and more.

The media is a powerful thing -- the average person spends an enormous amount of their life consuming it in

one form or another, and will spend a significant percentage of that time looking at, listening to or watching

advertisements. If you want to use the power of the media, though, you need to know what you're doing

otherwise your investment will be a financial disaster. Listed below are the most common forms of media

advertising. No doubt you can think of others as well.

Advertising in Newspapers and Magazines

There are two kinds of advertising you can get in newspapers and magazines: classified and display. Classifieds

are the small ads towards the back of the publication, while display ads can be almost any size, from a small

corner of a page to a massive double-page spread.

If there's a publication you're interested in advertising in, either go to its website (the rate card section) or call

its advertising department to find out the rates it charges. Now pick your jaw up off the floor. Yes, advertising in

the print media really is that expensive, and for most home businesses it probably just won't be that

economical.

There is, however, an exception: niche and trade magazines. If you've ever looked around in a newsagent, you

will have seen just how many magazines there are out there, filling every conceivable gap in the market. You

need to find the magazine that people who are interested in your services might read. For example, if you're a

wedding photographer, look for a magazine called 'Your Wedding', 'Bride', or something similar. Advertising in

these magazines will be far cheaper than placing an ad in a general-audience publication, and far more likely to

actually get some responses.

Advertising on the Radio

Wherever you are, the chances are that there's a local radio station. Once your home business grows to a decent

size, you might consider buying some time on it.

Really, though, the only kind of home business that can benefit enough from radio ads to justify the cost is one

that does anything to do with cars. Since radio is almost entirely limited to use as in-car entertainment now,

you know that almost everyone your ad reaches will be a car-owner, and so might be interested in what you're

offering. If you offer something that people need cheaply or even for free, you can get a big response.

Unfortunately, that response could be a little too big -- thanks to the time-sensitivity of radio, you'll get mobbed

the next day, and then everyone will forget you again. Radio advertising offers the listener no opportunity to

keep your ad and refer to it later, or to find it again in the future. You will find that any ads involving a phone

number are spectacularly useless.

Advertising on the Television

Unless your business is getting pretty big, this would be quite a bad idea. You'd have trouble producing and

airing an ad even on local cable channels for less than $10,000. Of course, if there's a market for your product

and you've got the budget for this, you could take a gamble and make a mint. The home businesses that tend to

do best out of TV ads are ones that have a 'unique and useful invention' product with easy-to-demonstrate

benefits -- think infomercial. Research shows that you can sell almost anything given a 60-second ad, a free

phone number and a price point of $19.95.

Advertising on Billboards

Here's one that gets overlooked pretty often, but can be very effective if you do it right. Billboard ads are

relatively expensive, but they do generally stay up for a long time, and they can be very specifically targeted to

an area -- the one where they're physically located. You'll have the best results with this if you can put one near

enough to your business that it could say 'turn left at the next junction', or something like that. Phone numbers

are, again, pretty useless, although you could have some luck putting a website address up there.

Advertising at the Movies

Finally, here's one that often gets overlooked. If you turn up to the cinema early, you might have seen that

before the big-budget ads, ads for local businesses are run. This can be a great place to advertise relatively

inexpensively in quite a high-profile way, and it works especially well for takeaway food businesses.

Market Research

Secondary Research

Internal Sources External Sources Company Accounts Government Statistics (ONS) Internal Reports and Analysis EU - Euro Stat Stock Analysis Trade publications Retail data - loyalty cards, till data, etc. Commercial Data - Gallup, Mintel, etc.

Household Expenditure Survey

Magazine surveys

Other firms’ research

Research documents – publications, journals, etc.

• Primary Research

– First hand information

– Expensive to collect, analyse and evaluate

– Can be highly focussed and relevant

– Care needs to be taken with the approach and methodology to ensure accuracy

– Types of question – closed – limited information gained; open – useful information but difficult

to analyse

• Quantitative and Qualitative Information:

– Quantitative – based on numbers – 56% of 18 year olds drink alcohol at least four times a week

- doesn’t tell you why, when, how

– Qualitative – more detail – tells you why, when and how!

Market Research

o Sampling Methods:

Random Samples – equal chance of anyone being picked

May select those not in the target group – indiscriminate

Sample sizes may need to be large to be representative

Can be very expensive

Stratified or Segment Random Sampling

Samples on the basis of a representative strata or segment

Still random but more focussed

May give more relevant information

May be more cost effective

Quota Sampling

Again – by segment

Not randomly selected

Specific number on each segment is interviewed, etc.

May not be fully representative

Cheaper method

Cluster Sampling

Primarily based on geographical areas or ‘clusters’ that can be seen as being

representative of the whole population

Multi-Stage Sampling

Sample selected from multi-stage sub-groups

Snowball Sampling

Samples developed from contacts of existing customers – ‘word of mouth’ type

approach!

Purpose

Advantages of Market Research Disadvantages of Market Research

Helps focus attention on objective Information only as good as the methodology used

Aids forecasting, planning and strategic development Can be inaccurate or unreliable

May help to reduce risk of new product development Results may not be what the business wants to hear!

Communicates image, vision, etc. May stifle initiative and ‘gut feeling’Always a problem

that we may never know enough to be sure!

Globalisation makes market information valuable

(HSBC adverts!!)

Marketing Mix

The marketing mix includes four basic marketing strategies called the four Ps: product, place, price, and

promotion. These are tools marketing professionals or businesses use and control in order to influence

potential customers. Marketers control decisions about each of the four Ps and base their decisions on the

people they want to win over and make into customers. Because of the importance of customers, some would

add a fifth P to the list: people. Marketers must first clearly define each target market before they can develop

marketing strategies.

The four elements of the marketing mix are interconnected. Actions in one area affect decisions in another.

Each strategy involves making decisions about the best way to reach, satisfy, and keep customers and the best

way to achieve the company’s goals. Let’s look at what each marketing mix component involves.

Product

Product decisions begin with choosing what products to make and sell. Much research goes into product

design. A product’s features, brand name, packaging, service, and warranty are all part of the development.

Companies also need to decide what to do with products they currently sell. In some cases, those products

require updating or improvements to be competitive. By developing new uses and identifying new target

markets, a company can extend the life of a product.

Place

The means of getting the product into the consumer’s hands is the place factor of the marketing mix. Knowing

where one’s customers shop helps marketers make the place decision. Place strategies determine how and

where a product will be distributed. For global companies, it may mean making decisions about which products

will be sold in which countries and which retail outlets or other means of selling the product will best reach the

customer. Can the product be sold directly to the consumer, or are intermediaries necessary? Other place

decisions include deciding which transportation methods and what stock levels are most effective.

Price

Price is what is exchanged for the product. Price strategies should reflect what customers are willing and able

to pay. To that end, marketers must consider the price they will charge their industrial customers, including

resellers. Pricing decisions also take into account prices the competition charges for comparable products.

Pricing Strategies

Price strategies therefore include arriving at the list price or manufacturer’s suggested retail price, as well as

discounts, allowances, credit terms, and payment period for industrial customers. On occasion, a company may

use special promotional pricing that would adjust the suggested retail price. A manufacturer may decide to use

a promotional price for a fixed period of time, for example. This technique is frequently used to launch new

products.

Promotion

Promotion refers to decisions about advertising, personal selling, sales promotion, and publicity.

Promotional Strategies

Promotional strategies deal with how potential customers will be told about a company’s products, including

the message, the media selected, special offers, and the timing of the promotional campaigns.

Define each of the following terms in writing.

1. Marketing

2. Goods and services

3. Marketing concept

4. Utility

5. Market

6. Consumer and industrial markets

7. Market share

8. Target market

9. Customer profile

10. Marketing mix

11. Define marketing.

12. Identify and explain the four foundations of marketing.

13. List the seven functions of marketing.

14. Explain the marketing concept.

15. What is meant by utility and what are the five economic utilities?

16. What is a market and in what ways can a market be identified?

17. What is market share?

18. Define a target market.

19. What are the four components of the marketing mix?

Exercises

Exercise 6 - The Marketing Mix

Peter Bowen of Citimetal Inc. is talking to Anna James, a marketing consultant. Complete Anna’s part of the

conversation. Choose from the following:

a. And then the fourth area is physical evidence.

b. It covers both goods and services offered by the company.

c. Exactly – and the desire to buy the product. And, finally, people, which means colleagues,

employees, agents and customers. The idea is to keep everyone happy, make personal contact.

d. Yes. This means any visual presence or signs suggesting the company.

e. The second area is place – also called distribution – meaning the movement of goods from the

producer to the consumer.

f. Well, we identified six areas where improvement is necessary.

g. After place, process. Process is the interaction between people and systems at all stages, from

market research, design, production, delivery and after-sales.

h. The first is product.

i. Promotion.

Peter: So, what have you got to report?

Anna:_________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

Peter: Really? What are they?

Anna:_________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________

Peter: And what exactly does that term cover?

Anna:_________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

Peter: I see. What else?

Anna:_________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________________

Peter: And after place, what’s next?

Anna:_________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

Peter: Yes, I understand – co-ordination of systems.

Anna:_________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

Peter: Physical evidence?

Anna:_________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________

Peter: Everything visual. Right, I follow you. And what’s the next area?

Anna:_________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

Peter: So, that’s creating consumer awareness and establishing the brand identity?

Anna:_________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________________

Exercise 7. – Product Marketing

Choose the best definition for each of the words or phrases:

1. Augmented product

a. a product now selling at a higher price

b. a product that is no longer made

c. a core product plus additional benefits such as brand name, quality styling and design features,

extended warranty, after-sales service, etc.

2. generic

a. not know by a special brand name

b. for general use

c. popular with all types of consumers

3. cannibalism

a. when a product eats into the competitor’s market share

b. when a product reduces sales of the other product made by the same manufacturer

c. when an employee leaves his/her company to join a competitor

4. sell-by date

a. the limit placed on sales representatives to meet targets

b. The date by which a food or drug must be sold

c. The date on which a product is sold

5. Launch

a. When a product is taken off the marker

b. When a product is tested before being sold

c. When a product is first released onto the market

6. Product life cycle

a. The normal pattern of sales for a product

b. The process of development of a new product

c. The different stages of improvement in an old product

7. Part

a. A product

b. A component

c. A phase in the development of a product

Exercise 8. – Branding

Complete each sentence with the correct word or phrase from the box.

Brand identity Own-brand Brand image Brand valuation Brand name Premium brand

Brand loyalty unbranded Intangible assets

1. Coca cola, Sony, and Mercedes Benz: each of these is a famous ____________________________________________.

2. Deciding a financial value for a brand name is called ______________________________________________________.

3. Consumers usually expect to pay less for products that ate _______________________________________________.

4. Products like Channel or Christian Dior have a ______________________________ which are more glamorous

than that of many less well-known competitors.

5. In the 1990s most supermarkets began to sell ____________________________________ products.

6. A brand name is valuable not only for the main products that are represented by the name, but also for

the range of _______________________________ that accompany that name.

7. A key concern for marketers is to establish ____________________________________ among their customers so

that they do not buy similar products made by other companies.

8. Consumers are often prepared to pay a high price for a _________________________________ which they believe

represents high quality.

9. A new product must create a _________________________________ so that it is easily recognized and associated

with specific qualities.

Exercise 9. – Product Management

Complete the sentences with terms from the box.

Appeal Consumers Decision-Making Development Extend Markets Penetration Portfolio Positioning Potential Quality Research Return

1. Managers have to understand the __________________________ of their products.

2. Most companies produce many different products and services. Together this is called the product

____________________________.

3. Companies market products at particular groups of consumers, so the product is matched to the

consumer. This is called product ___________________________________.

4. Product management is about getting the maximum _______________________________ from each product.

5. A key objective is to get the maximum market ______________________________________, which means reaching

the most _______________________________________.

6. Another important objective is to __________________________________ the life os the product. The typical life

cycle diagram then shows a wave effect.

7. This is possible if the product ___________________________________ is good. This means changing or improving

the product, to add to its __________________________________ and _________________________________.

8. Managers also try to find new ____________________________________ for their products.

9. In all cases, product management needs good ____________________________ to help __________________________.

Exercise 10. – After-Sales Assistance

The following text came with the user manual for a new telephone. Fill each gap with the correct word or

phrase from the box.

After-sales Customer Helpline Labour Launched Network On-site Parts Premium State-the-art Support Warranty

Since the TeleTalk was (1) _______________________________________________, it has been an outstanding success. Well

known for reliability, it does, however, come with a full two-year (2) __________________________________________ and

(3) ___________________________________ (4) __________________________________.

Utilizing the very latest technology, this (5) _______________________________ product is supported by our extensive

(6) ___________________________________ (7) __________________________________. Call our (8) _________________________________

(9) ____________________________________ for free advice on how to solve any problems you may have. For a small (10)

________________________________________we can also offer a full (11) ______________________________________________

technical (12) ____________________________ service for all your communications equipment.

Exercise 11. – Products, Services and Service

Change each word in bold type to a related word which fills the gap in the sentence correctly.

1. We sell a very large range of goods, including fast moving _________________________________ goods such as

canned foods, cleaning materials and cassettes.

CONSUME

2. Of course, we also sell ___________________________________ goods like milk, cheese and meat, which need to

be sold within a short time.

PERISH

3. It is not only food ____________________________________ which have a very short shelf life. Fashion items

quickly become out of date.

PRODUCE

4. For larger consumer __________________________________, like music systems and TV’s, we provide an after-

sale service.

DURATION

5. An important aspect of marketing goods like computers is possible ____________________________ value, such

as free software, internet access and technical support.

ADD

6. The business of a ________________________________________ is to sell products.

RETAIL

7. A ________________________________________ industry is one that offers specialist expertise or advice. Lawyers,

marketers, translators and financial consultants all do this.

SERVE

8. If you are not completely satisfied with any product _________________________________ in this store, you may

return it and receive a complete refund or exchange it for a different item.

PURCHASER

9. A ______________________________________ gives one person or company the right to make a particular product

for a period of time. The inventor may sell or lease it to a manufacturer.

PATENTED

10. A product which was expensive to develop, manufacture and launch, and which does not have the sales

that the manufacturer expected can be described as a __________________________________________.

FLOPPED

Exercise 12. – Success and Failure

Fill each gap in the sentences with the correct word from the box.

AWAY BACK BY INTO OFF ON ON TO

1. Perishable goods go ___________________________________ in a short time.

2. If dairy products are not sold __________________________________ the sell-by date, they cannot be offered for

sale.

3. Unsold perishable goods usually have to be thrown ________________________________.

4. If a safety fault is discovered in a product, the manufacturer may ask customers to bring

______________________ all examples of the product.

5. Thousand of new products are put _____________________________________ the market every day, but only a

few are successful.

6. Success or failure depends _______________________________ many factors, but the most important is the

quality of the marketing.

7. Customers with a strong sense of brand loyalty are rarely prepared to switch

________________________________ a competitor.

8. Powerful advertising may help a new product to eat ____________________ the market share of rival brands.

Exercise 13. – Pricing Strategy

Fill each gap in the sentences below with a phrase from the box.

Budget-priced Demand curve Going rate Price war

Retail margin Selling costs Unit costs

1. The amount of money necessary to produce one individual example of a product is the

______________________________.

2. The difference in price between what retailers pay for a product and what they sell the product at is

called the ____________________________.

3. The total amount of money spent on all aspects of selling, including advertising, commissions and

promotion, is known as the ___________________________________.

4. A period during which several competitors aggressively lower their prices in an effort to build up

market share is called a __________________________________.

5. Products at the lowest end of the price scale are sometimes referred to as ________________________ goods.

6. The price which the market will accept for a product or for services is the ________________________.

7. The line on a graph which shows the relationship between prices and consumer demand is called the

_____________________________________.

Exercise 14. – Pricing Strategy – Explaining vocabulary

Match the words (1-9) with the definitions (a-i)

1. Break-even point a. The price wholesalers and distributors pay to the producer for goods.

2. Discounting b. A pricing strategy based on low pricing and low unit profits.

3. Factory gate price c. An illegal and secret agreement between competitors to fix higher

prices to boost their profits.

4. Inelastic demand d. The day-to-day costs of running a business.

5. Overheads e. Sales of a product do not change much with variations in price.

6. Penetration strategy f. Reducing the price of goods in return for bulk sales or to a favoured

customer.

7. Price sensitive buyers g. A product sold at an especially low price, perhaps at a loss, in the

expectation that customers will spend money on other goods where

margins are high.

8. Loss leader h. The point in the development of a product when sales begin to

exceed the investment.

9. cartel g. Consumers who are very attentive to price changes and look for

lower-priced items.

Exercise 15. – Costs

Choose the best definitions for each of the words or phrases.

1. Cost of labour

a. Cost of all work involved in making a product or service ready for sale

b. Cost of manual workers employed buy a company

c. Cost of industrial action by employees

2. Cost of production

a. Selling price for a finished product

b. All expenses for raw materials, heating, lighting, electricity, etc.

c. All costs involved in making a product ready for distribution and sale.

3. Cost of sales

a. Total cost involved in making a product or service, distributing it and selling it

b. Cost of selling a product in salaries, commissions, etc

c. The price of a product when it is sold

4. Commission

a. A royalty paid to an inventor of a product

b. A percentage of the selling price which is paid to the seller, usually an agent or distributor

c. Instructions given to a sales representative or to the shop which is asked to sell a product

5. Selling costs

a. The total money raised selling a product or service

b. The costs involved in distributing, promoting and selling a product

c. The salaries and other expenses paid to the sales representatives

6. Direct costs

a. All costs relating to production of a product, including development costs and raw materials,

electricity and labour

b. All taxes paid to the government

c. The cost of labour involved in making a product

7. Direct labour costs

a. All costs relating to production of a product, including development costs and raw materials,

electricity and labour

b. All labour costs involved in actual production of a product

c. All labour costs involved in producing a product and, in addition, all support labour costs, such

as secretarial and administrative work

8. Fixed costs

a. Prices established by the government

b. Costs which are decided by the management of a manufacturing company, not by suppliers or

retailers

c. Costs which do not depend on quantity of production, e.g. heating, lighting, rent.

9. Variable costs

a. Costs which change according to the quantity of production, such as raw materials, components,

overtime pay, etc.

b. Costs which are difficult to estimate as they many suddenly change because of changes in the

market, such as competitors’ pricing

c. Costs which change according to the time of the year, e.g. warm clothes for winter, or summer

fashions.

10. Overheads

a. Regular costs associated with the day-to-day running of a company

b. Additional expenses because of a higher than expected demand for products

c. Extra costs above what was planned in the costs budget

11. Unit costs

a. The costs associated with all production of all products

b. The costs involved in making one single example of a product

c. The total costs for any one part of a factory producing one type of product

12. Labour input

a. The cost of labour in producing products for distribution and sale

b. Additional payments to workers during periods of high demand

c. The costs of all non-managerial wages and salaries

3. MARKETING PLAN: SWOT ANALYSIS; PRODUCT.

Good marketing relies on good plans. A company’s planning efforts begin with a critical look at itself and its

business environment, or the market in which it operates. This assessment lists and analyzes the company’s

strengths and its weaknesses. It also includes the opportunities and the threats that surround it. In other

words, this analysis lists everything that can foster the business’s success and what could make it fail. The

acronym for strengths, weaknesses, opportunities, threats is also the name of this process: SWOT analysis.

This internal and external awareness will help a business deal with weaknesses and prepare it to handle

threats such as competition or a changing marketplace. An accurate analysis also will help a company be more

competitive because it provides guidance and direction. The company will develop strategies around the SWOT

analysis.

Internal Strengths and Weaknesses

Strengths and weaknesses are internal factors that affect a business operation. The internal analysis centers

around three Cs: company, customers, and competition. It is important to review these factors objectively and

fairly. For this reason, some firms bring in outside consultants to conduct this phase of the analysis.

Company Analysis

Questions that are part of a company’s internal analysis are about what a company does well and what areas

are weak. This includes a review of the staff (both management and other personnel), the company’s financial

situation, its production capabilities, and each aspect of the marketing mix (product, promotion, place, and

pricing). Here are a few sample questions that could be used as part of a company analysis:

Staff-Related Questions

• What is the company’s mission statement? Does everyone know it? Is everyone on staff following it?

• How experienced are the company executives? What have they accomplished?

• Does the company have too much or not enough staff in each area to provide the quality of service it should?

Should staff be re-assigned?

• What is the quality of the staff? Are there formal training and assessment programs?

• How effective is its sales force?

Financial Questions

• Has the company been profitable? In which areas? And why?

• Are there enough financial resources to achieve the company’s goals?

• What is the company’s sales history? Are sales increasing or decreasing?

Production Capability Questions

• How are adjustments made in production due to an increase or decrease in sales orders?

• Has the research and development (R & D) department created successful new products?

• What percentage of sales come from products that are five years or older?

• What changes in technology are required to remain competitive?

Marketing Mix (Four Ps) Questions

Product

• What new products have been successful and why?

• Does the company own a patent on any of those products?

• Are any patents expiring in the future?

Price

• What are the present pricing strategies?

• Are the pricing strategies working?

Promotion

• How is the company positioned in the marketplace?

• What are the promotional strategies and have they been successful?

• What is the company’s reputation and image among consumers?

Place

• Do products easily reach customers?

• Who helps the company with distribution?

The answers to these questions might reveal such strengths (or core competencies) as talented and well-

trained employees, quality workmanship, and an excellent service record.

Customer Analysis

Customers are a great source of information. Studying their buying habits may reveal patterns that offer

insights into product offerings and pricing strategies. Here are a few questions that help in the analysis of

customers.

• Who are the customers?

• How do groups of customers differ from one another?

• What, when, where, and how much do they buy?

• How do customers rate the company on quality, service, and value?

• How satisfied is each customer segment?

• What customer segments are not having their needs met?

• Is your customer base increasing or decreasing? Why?

Catalog companies use database technology to see buying patterns, which allow them to produce interest-

specific catalogs. Companies with this technology and know-how have a major advantage over their

competitors because they can structure their product selection, pricing, and promotional messages to very

specific targeted audiences.

To monitor customer satisfaction, many firms ask customers to complete a questionnaire or some form of

survey after making a purchase. Data from this research helps companies pinpoint areas that need

improvement.

Monitoring customer satisfaction reveals both strengths and weaknesses. Take, for example, the case of an eye

doctor. Suppose that strength is the amount of personal attention the doctor gives each patient. Patients report

that the doctor spends a lot of time answering their questions. This strength also creates a weakness:

complaints about the time patients spend in the eye doctor’s waiting room. The solution seems simple:

schedule fewer patients in a given time period so there is less overlap. This poses another problem that may

generate complaints from patients wishing to make appointments. Under that new policy, patients might have

to wait two weeks or more before they can get an appointment. So, what appeared to be a quick and easy

solution is not so simple.

Competitive Position

A company may find that it has certain strengths and weaknesses when compared to its competitors. A

company’s market share may be greater than its competitors’, which would be a major strength. If a company

loses market share to its competitors, it would be a weakness. Questions that help a company analyze its

internal competitive position are:

• What market share does the company have?

• What advantages does the company have over its competitors?

• What core competencies does the company possess? Does it have a better reputation, own a patent, have

special resources, or better distribution capabilities?

• Are competitors taking business away from the company? How? New products? Better promotion?

External Opportunities and Threats

Companies must always look for opportunities to create competitive advantage due to external factors.

Competition

To stay competitive, companies need to know what their competitors are doing at all times. Changes in a

competitor’s financial situation and problems in the marketplace can provide opportunities. For example,

Smart & Final, a discount supermarket chain based in the western United States, enjoyed increased customer

traffic and increased sales when a labor strike crippled three competitors (Vons, Ralphs, and Albertsons) in

2004. The obvious weakness of Vons, Ralphs, and Albertsons (their inability to end the strike quickly) opened

the door for competitors to take business away from them. Companies that conduct a SWOT analysis on an

ongoing basis are in a better position to react and make adjustments to their marketing mix. To assist in this

process, companies must continually scan the external environment.

Environmental Scan

An environmental scan is an analysis of outside influences that may have an impact on an organization. This is

a methodical look at the world that typically includes four areas: political, economic, socio-cultural, and

technological (sometimes referred to with the acronym PEST). Understanding how each of these areas is

changing or is likely to change in the future can lead to a better appreciation of potential opportunities or

threats for the firm.

An alert business owner may use a change in one of these four aspects as an opportunity to be first to market

products customers want.

Political

Political issues center on government involvement in business operations. Companies must be alert to changes

in laws and regulations that affect their industries. Global companies need to understand the political structure

and regulations of each foreign country in which they conduct business. To assess potential political risks and

new opportunities, it is important to see what changes are likely in the laws governing your business operation,

as they will have an impact on marketing plans. Here are a few examples of issues and current regulations that

may affect certain industries in a positive way (opportunity) or in a negative way (threat):

• «Do Not Call Registry» the U.S. government pass this legislation in 2003. It gives people the ability to demand

that telemarketers not call their phone numbers. This regulation forced many businesses to rethink part of

their marketing strategies. Telemarketing companies had to adjust their data files to comply with the law.

• Downloading Music from the Internet The problem of illegal downloading of music created a whole industry

with online companies that now provide legal down loading of music for a fee. This new industry may hurt

music stores but has become an opportunity for companies like Apple’s iTunes, RealNetworks’ RealRhapsody,

and Roxio’s Napster.

Economic

The current state of the economy is of interest to all businesses: If the economy is robust, businesses are more

likely to invest in new products and markets. An economy that is in a recession or slowing down sends a

completely different message to the company’s decision makers. Upcoming marketing programs may be altered

or scrapped altogether in a weak economy. Factors, such as the unemployment rate, inflation, retail sales

figures, productivity, and consumer confidence, are tools to estimate the current status of the economy. The

value of the dollar in relation to foreign currencies affects imports and exports. Here are some economic factors

marketers would consider opportunities or threats:

• An economy in recession poses a threat to nearly all companies. Most companies slow or stop plans for new

facilities and often reduce research and development (R&D) efforts.

• If unemployment figures decrease and consumer confidence increases, companies may see an opportunity to

grow their business.

• Changes in foreign currency rates could be seen as a threat or an opportunity depending on whether this

makes the company’s products or services cheaper or more expensive in their foreign target market.

• Illegal dumping (selling imported products at a very low price) in a given market is a threat to all businesses

in that industry.

• Changes in trade restrictions, such as lowering or raising tariffs (taxes) on imported goods, could be

considered a threat or an opportunity, depending on where a company does business.

Socio-Cultural

A socio-cultural analysis is based on customers and potential customers. Changes in their attitudes, lifestyles,

and opinions provide a multitude of opportunities and threats. Socio-cultural analysis covers changes in all

demographic factors, such as age, income, occupation, education level, and marital status. Here are two

examples.

• The United States is becoming a more ethnically and racially diverse country. Marketing plans need to meet

this change. For example, in the area of home buying, minority consumers are expected to account for nearly

two-thirds of all new home purchases by 2010.

• Obesity is an issue in the United States, as it causes many health problems. Consumer advocates for healthier

eating habits have criticized fast-food chains.

Technological

Changing technology may be a threat for one industry or company, but an opportunity for others. A perfect

example is digital photography. To be competitive, traditional photo companies like Kodak are looking for ways

to adapt to this new technology. Camera companies are making more digital cameras. Other companies are

seizing the opportunity to capitalize on this new technology by developing products to support it. Printer

companies like Epson and Hewlett-Packard have developed products to make it easy for consumers to print

their own digital photographs. Companies that keep abreast of the newest technological breakthroughs can use

that knowledge to be more competitive. Here are a few examples:

• Computer Automation The home of the future may be completely automated. You may be able to call from

your cell phone to change your thermostat so your home is warm when you arrive.

• Satellite Technology Cars now offer satellite radio and navigation systems that direct you to your destinations,

as well as SOS systems such as OnStar that help you in an emergency.

Writing a Marketing Plan

Marketing is a complicated activity that relies on many different tasks. For this reason, marketers create a

marketing plan. A marketing plan is a formal, written document that directs a company’s activities for ma

specific period of time. It details analysis and research efforts and provides a roadmap for how a product will

enter the market, be advertised, and sold. A marketing plan also communicates the goals, objectives, and

strategies of a company to members of the management team. The specifics in the plan let managers know their

responsibilities, budget, and timelines for completion. A marketing plan helps a company monitor a company’s

performance. A small retail business may develop a simple marketing plan for a year, but a large manufacturer

with global sales would prepare a marketing plan that covers five years.

Elements of a Marketing Plan

Marketing plans may differ from company to company. However, there are some basic elements that will be

found in all marketing plans. Those elements include an executive summary, a situation analysis, marketing

goals/objectives, marketing strategies, and implementation, as well as a system for evaluation and control.

Executive Summary

An executive summary is a brief overview of the entire marketing plan. It briefly addresses each topic in the

plan and gives an explanation of the costs involved in implementing the plan. The executive summary may also

be used to provide information to people outside the organization, especially those who may be investing in the

company or organization.

Situation Analysis

Situation analysis is the study of the internal and external factors that affect marketing strategies. The

information from a company’s SWOT analysis and from the environmental scan becomes the basis for this

portion of the marketing plan.

Goals and Objectives

Objectives let everyone know what the marketing plan will accomplish. To be useful, an objective must be

single-minded (have only one topic for each objective), specific, realistic, measurable, and have a time frame.

For example, you cannot include increasing sales and increasing profits in the same objective. Each topic needs

to be a separate objective. Specific means that the objective provides enough detail that there can be no

misunderstanding. You cannot use, “to be better than a competitor” as an objective because what is “better” to

one person may not be to another. Measurable means that the objective includes a way to evaluate it. For

example, you cannot simply say you want to increase sales. You need to identify the percentage increase in

dollar or unit sales to make that objective measurable. Thus, you could use, “to increase dollar sales by 15

percent as compared to the same time last year.” Finally, you must include a time frame, such as in six months,

or as compared to last year’s sales. Without a time frame, you would not know if an objective was actually

reached. Marketing objectives must be in line with the organization’s goals and mission. If an organization’s

goal is to double its business in five years, marketing objectives must coincide with that goal and provide the

means to reach it. A company’s mission statement provides the focus for a firm’s goals with its explanation of

the company’s core competencies, values, expectations, and vision for the future.

Marketing Strategies

A marketing strategy identifies target markets and sets marketing mix choices that focus on those markets. All

strategies need to take the customer’s needs and wants into account, as well as the objectives of the marketing

plan.

A company’s or product’s position in the marketplace determines the appropriate marketing strategy. The

positioning of the product or service will drive decisions for each of the four Ps.

An effective marketing strategy should be focused on the key points of difference. The key point of difference is

the advantage a company, a product, or service has over its competition. The point of difference could be the

quality of the product, a superior distribution system, a more creative ad campaign, or a more competitive

pricing structure. This competitive advantage is what will make the company successful. The marketing mix

elements can help create points of difference with respect to competition. The results of the SWOT analysis

should provide enough information to identify the specific target market and suggest ideas to create the

necessary point(s) of difference to be competitive.

Implementation: Make the Plan, Work the Plan

Implementation is putting the marketing plan into action and managing it. This means obtaining the financial

resources, management, and staffing necessary to put the plan into action. A timetable shows when each part

goes into play. This part of the marketing plan outlines a schedule of activities, job assignments, sales forecasts

(the projection of probable, future sales in units or dollars), budgets, details of each activity, and who will be

responsible for each activity. This phase of the plan requires excellent communication among members of the

management team so that tasks are completed on a timely basis.

Evaluation and Control

In the evaluation section of the marketing plan, measures that will be used to evaluate the plan are discussed. It

is important to explain exactly how a specific objective will be measured and who will be responsible for

providing that evaluation.

Performance Standards and Evaluation

Performance standards are the measuring stick. A performance standard is an expectation for performance

that reflects the plan’s objectives. As part of the planning process, the control section suggests actions that

should be considered if objectives are not met. In the control phase, the company’s goal is to reduce the gap

between planned performance standards and actual performance. Let’s say sales did not reach the sales

forecast numbers. One reason for this discrepancy could be recent changes in economic conditions. In such a

situation, a company may revise its sales forecast to make it more realistic.

Appendix

The appendix is the section of the marketing plan that includes supplemental materials such as detailed

financial statements, sample ads, and other materials that support the plan.

Conclusion

The marketing process is ongoing. Think of it as a circular pattern that keeps going through the three phases of

the marketing process of planning, implementation, and control. The key question at the end of the process is

“Did we accomplish the objectives listed in the marketing plan within the boundaries of the plan?” A marketing

audit evaluates a company’s marketing objectives, strategies, budgets, organization, and performance. It

identifies problem areas in marketing operations. A marketing audit happens on a formal basis once a year and

informally on a continuous basis.

Exercises

Exercise 16. – Planning advertising

SPEAR, a mail order company, is planning a new advertising campaign. Below is an extract from an internal

report to senior marketers in the company. Fill each gap in the report with a word or phrase from the box.

Advertisements Advertising mix Campaign Catalogue Website

Commercials Competition Consumer awareness Direct mail

Hard sell Impulse buying Mailshot Online

ADVERTISING PLAN

Our plan is to sell products through a (1) ___________________________________ and mail order service. We will use a

high pressure, (2) ____________________________________ approach. We can attract customers to order the goods by

offering special (3) _________________________________ prizes. Once the catalogue arrives, consumers will order goods

which have an instant appeal. We will depend on ______________________________________.

Another approach is to run a long advertising (5) _______________________________________________________ to increase

(6) _______________________________________________ of our products. We plan a variety of advertising techniques: this

(7) __________________________________ will consist of television (8) __________________________________. We plan to do a

(11) ________________________________________ twice, to put extra pressure on those who do not answer the first time.

We also have a company (12) _______________________________________ where we advertise our products. Customers

can also order goods (13) ______________________________________.

Exercise 17. – Planning advertising – Strategies

Match each strategy (1-9) with the correct description (a-i).

1. Advertising on the Internet. a. Generic advertising

2. A promotion strategy based on getting the

consumer’s attention and interest, then desire

for the product, then action (buying the

product).

b. Below-the-line promotion

3. All forms of advertising except mass media

advertising.

c. AIDA

4. Mass media advertising. d. Customer-oriented selling

5. A selling style based on identifying and meeting

the customer’s needs.

e. Push strategy

6. Advertising for a whole sector, such as tourism f. Above-the-line promotion

or health promotion, rather than for a specific

product.

7. A sales-oriented selling style, using high

pressure and persuasion, discounts and free

services.

g. Hard sell approach

8. A method of sales promotion which uses

pressure on distributors or on retailers.

h. In-store promotion

9. Advertising at the point of sale. i. On-line promotion

Exercise 18. – Planning advertising – Strategies

Fill each gap in the sentences with a word or phrase from the box.

Consumers Emotional appeal Image Promotes

Publicity Rational appeal Targets USP (unique selling proposition)

1. A set of characteristics that make a product different from its competitors is its

_________________________________________.

2. Any activity which increases consumer awareness of a company or its products is ________________________.

3. Promotional techniques based on giving the consumer facts and technical information is concerned

with _____________________________________.

4. Promotional techniques aimed at people’s fears, ambitions, feelings, likes and dislikes are concerned

with ___________________________________.

5. Advertising ________________________________________ consumers and ___________________________ products.

6. Companies use websites and e-commerce strategies to appeal to new consumers and to promote a

state-of-the-art _______________________________________.

7. Mass media promotion aims to influence public perception, not only target _______________________________.

Exercise 19. – Types of promotion

Choose the correct alternative for each sentence. In one case, both/all of the alternatives are possible.

1. Sending product or service information by post to specific individuals or companies is called

_________________________________________.

Direct mailing Mail order Postal advertising

2. A selling technique based on making a personal call to an individual or company is called

____________________________________.

Personal selling Direct selling

3. A promotion based on advertising in the actual shop is __________________________________________.

An in-store promotion A special offer

4. A promotion method that involves the packaging of a product, such as including a free sample

or coupons, is called ____________________________________.

Point-of-sale advertising On-pack promotion

5. Advertising around the playing area at sports grounds is called ___________________________________________.

Sponsorship Perimeter advertising

6. A promotion method for fast moving consumer goods which involves buying one and getting one free is

called ___________________________________________.

Bargain selling BOGOF

7. Promoting your activities or your company and its products or services on the Internet is called

___________________________________.

Online advertising Advertising on the web Internet advertising

8. Telephoning direct to homes or business to try to interest people in your products or services is called

____________________________________________.

Cold calling Door-to-door selling

Exercise 20. – Promoting a message

Match the definitions (1-6) with the phrases (a-f).

1. The way the company is perceived by the public. a. Positioning

2. What a promotion says about its subject. b. Message structure

3. The attempt by marketers to give a product a unique strength, or special

characteristics, in the market.

c. Message format

4. The person who conveys the message in the advertisement. d. Corporate image

5. The way a message is presented in an advertisement, for example, through

symbols, through shock, through humour.

e. Message source

6. The design of an advertisement, in terms of presenting a problem, providing a

solution and justifying why that solution works.

f. Message content

Exercise 21. – Key words

Choose the correct alternative for each sentence.

Survey Data Poll Bias Market researcher

Subject Questionnaire Respondent Sample

1. A study of what people think or what they do. ___________________________________________

2. A person who finds out information from the public in order to discover what they want or can afford to

buy. _____________________________________________

3. A set of questions to find out people’s opinions on particular issues, often used in studies of political

opinion and preference. _____________________________________________

4. Something that is given away free to make the customer aware of the product, or to make them try the

product. _______________________________________________

5. A set of questions designed to find out what people think about a product or service.

____________________________________________________

6. Information collected from research. The researcher then analyses the information before making

conclusions. ______________________________________________

7. Subjectivity or personal opinion affecting the results of a survey. __________________________________________

8. The person who is asked questions or is studied in market research. ________________________________________

9. Another name for the person who answers questions in market research, often by returning a

completed questionnaire. _______________________________________________

Exercise 22. - Research terms

Match each word on the left with an appropriate word on the right to make a phrase common in market

research.

1. Closed a. Analysis

2. Random b. Population

3. Biased c. Trial

4. Computer d. Brief

5. Clinical e. Awareness

6. Consumer f. Sampling

7. Personal g. Interview

8. total h. Sample

9. Quota i. Question

10. research j. survey

Exercise 23. - Research terms

Now match each of the phrases you have made to one of the definitions below.

1. A test carried out on a new drug.

_______________________________________________________________________________________________________________________

2. A survey which is not objective and has been designed to give a particular result.

_______________________________________________________________________________________________________________________

3. A detailed description of the objectives of some marketing research.

_______________________________________________________________________________________________________________________

4. A sample in which all the people taking part have been selected by chance.

_______________________________________________________________________________________________________________________

5. A question with a yes/no answer.

_______________________________________________________________________________________________________________________

6. Use of ICT (Information Communications Technology) or computers to interpret results.

_______________________________________________________________________________________________________________________

7. What the public know about a company or product.

_______________________________________________________________________________________________________________________

8. Choosing a sample because of the particular characteristics of the individuals.

_______________________________________________________________________________________________________________________

9. All the people who could possibly be consumers for a particular product.

_______________________________________________________________________________________________________________________

10. A survey technique based on face to face (or possibly telephone) conversation.

_______________________________________________________________________________________________________________________

Exercise 24. - Research methods

Match the definitions (1-10) with the words and phrases (a-j).

1. Research which is designed to provide facts and statistical data. Results are

easy to analyse, often by computer.

a. Opinion poll

2. A sampling method based on using small groups that are representative of

much larger groups.

b. validity

3. Analysis of numerical information to test those results is accurate and reliable. c. Quantitative

research

4. A limited study carried out on a small number of people to test your research

methods.

d. Extrapolation

5. A survey designed to find out what people think, often on politics or

environmental issues.

e. Statistical

analysis

6. A set of questions in which the answers given affect what question(s) will be

asked next.

f. Pilot survey

7. An original study carried out among the population, not by finding out

information from published sources.

g. Fieldwork

8. An essential quality for research. Without it, the research is not reliable. h. Unstructured

survey

9. Using information gained from a small number of people to estimate how large

numbers of (similar) people would behave in similar circumstances.

i. Qualitative

research

10. Research which is open-ended and gives respondents the chance to express

opinions, feelings and attitudes.

j. Cluster

sampling

Exercise 25. – Consumer marketing and buyer behaviour

Match the term on the left with the definition on the right.

1. Marketing ethics a. An established liking for a particular producer’s products that means you

often buy the same product again, even over many years.

2. Niche marketing b. Large purchases of products that will be used for a long time, even for

years. Such purchases are often thought about a lot, with a high level of

customers’ involvement.

3. Brand loyalty c. A spontaneous decision to buy something – you see it – you buy it!

4. Routine purchasing d. Aiming a high price, high quality product at a narrow group of consumers,

with a lot of purchasing power (a lot of money!).

5. Impulse buying e. Repeat buying, with little involvement in the purchase.

6. Fast moving consumer

goods (FCMG)

f. Regularly used items that are bought frequently with little personal

involvement.

7. Consumer durables g. Concern for the environment, for society and for a moral code in

marketing.

Exercise 26. – Consumer marketing and buyer behaviour

Fill each gap in the sentences below with a preposition from the box. The prepositions may be used more than

once.

At In Into Of On To With For About

1. People who are concerned ____________________________________________ society are typically interested

__________________________________________ marketing ethics.

2. Niche marketing is frequently concerned ______________________________________ aiming particular products

___________________________________ specific socio-economic groups.

3. Brand loyalty is based _______________________________________ the development _________________________________

routine purchasing of low-involvement goods.

4. The success of shops attached ______________________________________________________ petrol stations depends

____________________________________ impulse purchasing. You can see motorists who suddenly decide to buy

a music cassette, confectionery or a magazine.

5. Research _______________________________ buyer behaviour shows that when consumers make routine

purchases _________________________________ regularly used consumer products; they are not personality

involved ____________________________________________ for products.

6. Routine purchasing contrasts ______________________________________ the purchase of consumer durables,

such as furniture, kitchen appliances or a car. Here there is a greater degree ________________________________

personal involvement.

7. Clients have increasingly high expectations __________________________________ the providers of professional

services in a range of fields, including health, education and the law.

8. Special government appointed committees are responsible _______________________ ensuring that

consumers get good service and adequate protection. Sometimes called consumer watchdogs, they

respond _______________________ reports of malpractice.

Exercise 27. – Economic factors and buyer behaviour

Fill each gap in the text below with a word or phrase from the box. The items in bold are headings.

Assets Credit availability Discounts

Economic growth Employment Discretionary income

Purchasing power Loss leader General economic situation

Price Outgoings

There are four major economic factors which affect consumer buying behaviour.

1. _________________________________________________________________________________

When the national economy is doing well, when people feel that there __________________________________ is

safe, they spend more. In times of a slowdown in _____________________________________________, if interest

rates or taxation rates increase, then buyer confidence goes down.

2. __________________________________________________________________________________

People spend according to what is left after meeting their regular costs on rent, mortgage, bills, tax,

borrowings and other _______________________________________________. What is left is called

_________________________________________________.

3. __________________________________________________________________________________

Banks and other lenders are sometimes particularly happy to lend, for example to anyone in work, or

with ____________________________________________________ such as property. Credit card spending goes up and

many people borrow money to buy goods.

4. __________________________________________________________________________________

This is perhaps obvious. High prices may limit spending, but not always. Sometimes high prices indicate

high quality and this increases the desirability of the product. Price may also be less important if the

need is great. But, in contrast, low prices may increase buying, especially where ___________________________

are no offer. Sometimes items are offered at a low price as a ___________________________________. This means

products are sold at below cost price. The shop thinks that consumers will buy these low priced goods,

but also other high profit items.

Exercise 28. – Consumers and lifestyle

Match the consumer type (1-8) to the lifestyle definitions (a-h).

1. Achiever a. This person has a traditional, conservative and conformist lifestyle. He or she

likes to feel comfortable but does not like change

2. Belonger b. This person has the original idea to do something.

3. Decision maker c. This person is young, ambitious, successful, hard-working and determined to

win in life.

4. Dependent d. This person is ambitious and competitive, and seeks to become richer and more

successful, but is content with life.

5. Emulator e. This person has worked hard and got what he or she wanted. He/She is rational

and reasonable.

6. Influencer f. This person announces that something is going to happen.

7. Initiator g. This person tells other people about an innovation they think is a good one, and

recommends buying.

8. Integrated h. This person is unable to survival well alone because of age, lack of money or a

physical or mental disability.

Exercise 29. – Market Segmentation

Mark Statements 1-8 T (True) or F (False). If a statement is false, correct it.

1. Social marketing targets particular consumers according to their socio-economic group.

a. TRUE

b. FALSE

2. Target marketing is concerned with advertising to particular groups of consumers.

a. TRUE

b. FALSE

3. Differentiated marketing aims to appeal to specifically identified groups of potential users of a product.

a. TRUE

b. FALSE

4. Undifferentiated marketing is all kinds of marketing techniques used at one.

a. TRUE

b. FALSE

5. Segmentation strategy is an attempt to divide the total market into specific types of consumers.

a. TRUE

b. FALSE

6. Product positioning is a way of promoting goods in stores.

a. TRUE

b. FALSE

7. Industrial marketing is the marketing of manufactured goods.

a. TRUE

b. FALSE

8. Consumer watchdogs have become more common especially in service industries and in public sector.

a. TRUE

b. FALSE

Exercise 30. – Industrial Marketing

Industrial marketing is marketing by companies where the target audience is another company, or

organization, not individual consumers or members of the public. Completely different marketing strategies are

involved.

Read the extract from a management training book below. Fill in the gaps with headings from the box.

Buyer factors Price and promotional factors Supplier factors

External factors Needs

Influences on industrial purchasing

Industrial marketers must understand what affects buying decisions in companies and organizations. Then

they can plan a marketing strategy. We can say that buying is affected by five factors.

1. _____________________________________________, for example discounts, special prices and terms, as well as the

influence of advertising, free samples, and trial offers.

2. _____________________________________________, or what people say about the company, exhibitions and trade

fairs, reviews and comments in trade journals, and also any relevant seasonal factors.

3. _____________________________________________. Examples are the buyer’s experience, and knowledge of the

product, and of the potential suppliers. The culture of the buying organization is also important, and an

understanding of the company purchasing policy. The size, complexity, level of technology, and financial

resources are all important. A final factor in this category is the structure of the organization, and the

role of senior executives in buying decisions.

4. _____________________________________________ including level of urgency, stock levels, and the perceived value

of the purchase to the buying organization.

5. _____________________________________________ include competitors and rival offers, the quality and availability

of the product offered, after-sales service, location and labour relations at the suppliers. Another

significant factor here is the relationship with existing suppliers, including personal relationships, and

the desire for continuity.

Exercise 31. – Industrial Marketing

Find words in the text above which go with these definitions. They are in the right order.

1. Special reduced prices

2. Conditions attached to payment, such as dates and credit.

3. Special industry events to show off products.

4. Specialist magazines.

5. Rules about buying goods and services.

6. Quantity of equipment held in storage.

7. Support provided by a seller to a buyer.

8. The relationship between a company and its employees.

Exercise 32. – Key Words

Match each word (1-6) with its opposite (a-f).

1. overseas a. Free market economy

2. strength b. Global

3. buyers c. Domestic

4. supply d. Weakness

5. Command economy e. Suppliers

6. local f. Demand

Exercise 33. – Key Words

Now fill each gap in the sentences with a word or phrase from the box above.

1. Nabisco has dominated the ____________________________________________ biscuit market in the USA for over 60

years.

2. The enormous _______________________________________ of the McDonald’s brand name has helped the

company to enter new markets all over the world.

3. A ______________________________________ of small retail businesses is their inability to compete with larger

competitors in fixing favourable terms with __________________________________________.

4. All major European manufacturers have to look to __________________________________ markets to increase

their turnover.

5. When commercial ____________________________________ purchase large quantities of goods, it is often possible

to achieve important cost savings.

6. Effective pricing policy depends on the ______________________________________ and ______________________________

relationship.

7. The WTO, NAFTA, Japan and the EU are committed to the values of the _____________________________________.

8. Globalization has caused many businesses to look to ____________________________________ markets and not

just ______________________________________ ones.

Exercise 34. – Marketing planning

Fill each gap in the sentences below with a word or phrase from the box.

Accountability Competition Economics of scale External audit Marketing audit

Economics of scope Marketing planning Marketing research Public sector Service

1. Increasing production by 25% does not increase costs by much, because we are able to take advantage

of ______________________________________________________.

2. A complete _________________________________________________ will demonstrate all aspects of our performance

in terms of meeting our marketing objectives.

3. ________________________________________________ is essential to prepare clear objectives and a strategy for

reaching our objectives.

4. The _______________________________________ examines factors which are not under the company’s control.

5. By having documentation which can be used in various markets we are able to take advantage of

_____________________________.

6. We are conducting _________________________________________ to try to improve all aspects of our company

performance.

7. We know that marketing planning has a long history in the private sector and in manufacturing.

Recently there has been a new emphasis on planning in the ________________________________________ and in

all kinds of ___________________________________________ industries.

8. Public sector marketing has had to respond to increased _____________________________________ and the need

for ______________________________________ in all areas of service provision.

Exercise 35. – The international trading environment

Choose the correct term for each of the definitions.

1. The market consisting of the country where a company is based and no other countries.

a. Servant market

b. Domestic market

c. Local market

2. Factors which I) may have a negative effect on company performance, but which II) are outside the

company’s control and III) are identified during an analysis of marketing performance and prospects.

a. Weakness

b. Threats

c. Quotas

3. A contract which allows another company to make your product and states the terms of payment.

a. Franchise

b. A patent

c. A licence agreement

4. The action of making illegal duplicates of copyright material.

a. Black market

b. Cloning

c. Copyright infringement

5. A large company with subsidiaries in many different countries.

a. A multinational

b. A holding company

c. A corporation

6. Factors which I) probably have a negative effect on company performance, II) are within the company’s

control, and III) are identified during an analysis of marketing performance and prospects.

a. Weakness

b. Threats

c. Failures

7. A body which negotiates and then monitors international trade agreements.

a. World Trade Organisations (WTO)

b. General Agreement on Tariffs and Trade (GATT)

c. World Bank

8. Companies which advertise and trade internationally using their own website on the Internet.

a. High tech companies

b. Dot.com companies

c. Internet Service Providers (ISPs)

9. Cash incentives provided by a government to encourage a company to do business overseas.

a. Export taxes

b. Export tariffs

c. Export subsidies

CASE STUDIES

Barclays - Discovering customer needs through research

Portakabin - How market research helps Portakabin to remain at the cutting edge

Portakabin - How the role of marketing drives business forwards

Portabakin – Promoting the Brand

Kellogg's - New products from market research

McCain – The marketing mix in the food industry

Zurich – Providing customer-centric service

Diesel – Live, breathe and wear passion