Introduction To Business Management


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  • Introduction To Business Management

    1. 1. MNB102-E INTRODUCTION TO BUSINESS MANAGEMENT Facilitator: Neels Bothma
    2. 2. Welcome to the Marketing Section of today’s First Years lectures.
    3. 3. Structure of the class <ul><li>Introduction to marketing </li></ul><ul><li>Marketing research </li></ul><ul><li>Customer behaviour </li></ul><ul><li>Market segmentation </li></ul><ul><li>The marketing mix </li></ul><ul><li>The marketing strategy </li></ul><ul><li>Public relations </li></ul>
    4. 4. <ul><li>Operation/Product orientation </li></ul><ul><li>Sales orientation </li></ul><ul><li>Marketing oriented </li></ul><ul><li>Consumer oriented </li></ul><ul><li>Strategic approach </li></ul><ul><li>Relationship marketing </li></ul>The Evolution of Marketing as we know it
    5. 5. The Selling Concept The Marketing Concept Starting Point Focus Means Ends Marketing & Sales Concepts Contrasted Factory Existing Products Selling and Promoting Profits through Volume Market Customer Needs Integrated Marketing Profits through Satisfaction
    6. 6. What is Marketing? Marketing consists of management tasks and decisions directed at successfully meeting opportunities and threats in a dynamic environment, by effectively developing and transferring a need-satisfying market offering to consumers in such a way that the objectives of the business, the consumer and society will be achieved.
    7. 7. The Marketing Process (see Fig 13.1) <ul><li>Simply: </li></ul><ul><li>Marketing management creates an offering (product, price marketing communication, distribution) </li></ul><ul><li>The target market sacrifices money </li></ul><ul><li>The target market consumes the offering </li></ul><ul><li>Marketing management gets feedback through research </li></ul><ul><li>This all happens in a marketing environment </li></ul><ul><li>Everybody satisfies their objectives (maximise profitability in the long term, total need satisfaction) </li></ul>
    8. 8. Target Customers Intended Positioning Price Amount of money that consumers have to pay to obtain the product Product “ Goods-and-service” combination that a company offers a target market Activities that persuade target customers to buy the product Promotion Company activities that make the product available Place Marketing Mix- The Four P’s
    9. 9. Why Information Is Needed Marketing Environment Strategic Planning Customer Needs Competition The Importance of Information
    10. 10. Marketing Research Why? Know the research process Market forecasting 1. Define the problem to be investigated 2. Formulate hypotheses 3. Investigate hypotheses 4. Compile a questionnaire 5. Test the questionnaire 6. Select sample 7. Train fieldworkers and do fieldwork 8. Analyse data 9. Interpret the results 10. Compile the report 11. Management studies report 12. Management implements findings Sales forecasting Profit forecasting
    11. 11. Consumer Buying Behavior <ul><li>Consumer Buying Behavior refers to the buying behavior patterns of decision making units (individuals & households) directly involved in the purchase and use of products, including the decision-making processes preceding and determining these behaviour patterns. </li></ul><ul><li>Study consumer behavior to answer: </li></ul><ul><li>“ How do consumers respond to marketing efforts the company might use, why do they behave the way they do?” </li></ul>
    12. 12. Customer behaviour <ul><li>Awareness of need </li></ul><ul><li>Gathering information </li></ul><ul><li>Evaluation </li></ul><ul><li>Purchase action </li></ul><ul><li>Post purchase evaluation </li></ul>INDIVIDUAL FACTORS Motivation Attitude Perception Learning ability Personality Lifestyle GROUP FACTORS Family Reference group Opinion leaders Cultural group
    13. 13. <ul><li>Groups </li></ul><ul><li>Membership </li></ul><ul><li>Reference Group </li></ul><ul><li>Family </li></ul><ul><li>Husband, wife, kids </li></ul><ul><li>Influencer, buyer, user </li></ul>Cultural group Group Factors Factors Affecting Consumer Behavior: Group
    14. 14. Individual Factors Motivation P erception Learning Beliefs and Attitudes Personality And lifestyle Factors Affecting Consumer Behavior: Individual
    15. 15. Esteem Needs ( self-esteem, status) Social Needs (sense of belonging, love) Safety Needs (security, protection) Physiological Needs (hunger, thirst) Self Actualization (Self-development ) Maslow’s Hierarchy of Needs
    16. 16. Awareness of need or problem Information Search Evaluation of Alternatives Purchase Decision Post-purchase Behavior Consumer Decision Process
    17. 17. Market segmentation <ul><li>What is a market? </li></ul><ul><li>Different types of markets: </li></ul><ul><ul><li>consumers </li></ul></ul><ul><ul><li>industrial </li></ul></ul><ul><ul><li>resellers </li></ul></ul><ul><ul><li>government </li></ul></ul>Approaches to the market – see fig 13.3 <ul><li>Requirements for successful segmentation: </li></ul><ul><ul><li>Identifiable and measurable </li></ul></ul><ul><ul><li>Substantial </li></ul></ul><ul><ul><li>Accessible </li></ul></ul><ul><ul><li>Responsive </li></ul></ul>
    18. 18. Company Consumer Markets International Markets Government Markets Business Markets Reseller Markets Customer Markets
    19. 19. <ul><li>Size, purchasing power, profiles </li></ul><ul><li>of segments can be measured. </li></ul><ul><li>Segments must be effectively </li></ul><ul><li>reached and served. </li></ul><ul><li>Segments must be large or profitable enough to serve. </li></ul>Measurable Accessible Substantial Differential Actionable <ul><li>Segments must respond differently to different marketing mix elements & actions. </li></ul><ul><li>Must be able to attract and serve the segments. </li></ul>Requirements for Effective Segmentation
    20. 20. Bases for segmentation Demographic – Who they are Geographic – Where they are Psychographic – What they think they are Behavioural – How do they behave All of the above determine the consumer profile – draw a picture Targeting and positioning
    21. 21. Geographic Demographic Age, gender, family size and life cycle, or income Psychographic Social class, lifestyle, or personality Behavioral Occasions, benefits, uses, or responses Nations, states, regions or cities, density Bases for Segmenting Consumer Markets
    22. 22. Segment 1 Segment 2 Segment 3 Segment 1 Segment 2 Segment 3 Company Marketing Mix Company Marketing Mix Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 Market A. MARKET AGGREGATION B. MULTI-SEGMENT APPROACH C. SINGLE SEGMENT APPROACH Market Coverage Strategies
    23. 23. Positioning for Competitive Advantage <ul><li>Product’s Position - the place the product occupies in consumers’ minds relative to competing products; i.e. Castle used to position on “the great South African beer”. </li></ul><ul><li>Then: “the friendship brew” </li></ul><ul><li>Then: SA’s finest </li></ul><ul><li>Now? Satisfies a South African Thirst </li></ul>
    24. 24. Marketers must: <ul><li>Plan positions to give products the greatest advantage </li></ul><ul><li>Develop marketing mixes to create planned positions </li></ul>
    25. 25. 1. Identify Bases for Segmenting the Market 2. Develop Profiles of Resulting Segments 3. Develop Measures of Segment Attractiveness 4. Select Target Segment(s) 5. Develop Positioning for Each Target Segment 6. Develop Marketing Mix for Each Target Segment Market Positioning Market Targeting Market Segmentation Steps in Segmentation, Targeting, and Positioning
    26. 26. Target Customers Intended Positioning Price Amount of money that consumers have to pay to obtain the product Product “ Goods-and-service” combination that a company offers a target market Activities that persuade target customers to buy the product Promotion Company activities that make the product available Place Marketing Mix- The Four P’s
    27. 27. The marketing instruments (mix) <ul><li>1. Product </li></ul><ul><li>Product concept </li></ul><ul><li>Product classification </li></ul><ul><li>Brand decisions </li></ul><ul><li>Packaging decisions </li></ul><ul><li>Differentiation </li></ul><ul><li>Obsolescence </li></ul><ul><li>Multi- product decisions </li></ul><ul><li>New product decisions </li></ul>
    28. 28. The marketing instruments – Product (cont.) <ul><li>New Product Development Process </li></ul><ul><li>Develop new ideas </li></ul><ul><li>Screen ideas </li></ul><ul><li>Eliminate non viable ideas </li></ul><ul><li>Develop product </li></ul><ul><li>Develop strategy </li></ul><ul><li>Test marketing </li></ul><ul><li>Commercialisation </li></ul>
    29. 29. Classification of Product <ul><li>Shopping Products </li></ul><ul><li>Buy less frequently </li></ul><ul><li>Gather product information </li></ul><ul><li>Fewer purchase locations </li></ul><ul><li>Compare for: </li></ul><ul><ul><li>Suitability & Quality </li></ul></ul><ul><ul><li>Price & Style </li></ul></ul><ul><li>Convenience Products </li></ul><ul><li>Buy frequently & immediately </li></ul><ul><li>Low priced </li></ul><ul><li>Many purchase locations </li></ul><ul><li>Includes: </li></ul><ul><ul><li>Staple goods </li></ul></ul><ul><ul><li>Impulse goods </li></ul></ul><ul><ul><li>Emergency goods </li></ul></ul><ul><li>Specialty Products </li></ul><ul><li>Special purchase efforts </li></ul><ul><li>Unique characteristics </li></ul><ul><li>Brand identification </li></ul><ul><li>Few purchase locations </li></ul><ul><li>Unsought Products </li></ul><ul><li>New innovations </li></ul><ul><li>Products consumers don’t </li></ul><ul><li>want to think about </li></ul><ul><li>Require much advertising & </li></ul><ul><li>personal selling </li></ul>
    30. 30. <ul><li>Types of prices </li></ul><ul><ul><li>cost price </li></ul></ul><ul><ul><li>market price </li></ul></ul><ul><ul><li>target price </li></ul></ul><ul><ul><li>final price </li></ul></ul><ul><li>Price adaptations </li></ul><ul><ul><li>skimming </li></ul></ul><ul><ul><li>penetration </li></ul></ul><ul><ul><li>market price </li></ul></ul><ul><ul><li>leader price </li></ul></ul><ul><ul><li>odd price </li></ul></ul><ul><ul><li>bait price </li></ul></ul>The marketing instruments (mix) 2. Price
    31. 31. The marketing instruments (mix) <ul><ul><li>Type of channel </li></ul></ul><ul><ul><li>Channel leadership </li></ul></ul><ul><ul><li>Market coverage </li></ul></ul><ul><ul><li>Physical distribution </li></ul></ul><ul><li>Refer to box on page 326 </li></ul>3. Distribution
    32. 32. Direct Indirect Channel 1 Channel 2 Channel 3 Channel 4 Channel Level - A Layer of Intermediaries that Perform Some Work in Bringing the Product and it’s Ownership Closer to the Buyer. Consumer Marketing Channels & Levels M W W R C     M W R C   M R C  M C
    33. 33. Inventory When to order How much to order Just-in-time Costs Minimize Costs of Attaining Logistics Objectives Warehousing Storage Distribution Order Processing Submitted Processed Shipped Physical distribution Functions Transportation Water, Truck, Rail, Pipeline & Air Physical distribution
    34. 34. The marketing instruments (mix) <ul><li>to inform, persuade and remind </li></ul><ul><ul><li>advertising </li></ul></ul><ul><ul><li>personal selling </li></ul></ul><ul><ul><li>sales promotion </li></ul></ul><ul><ul><li>publicity </li></ul></ul>4. Marketing communication
    35. 35. The Marketing Communications Mix Advertising Personal Selling Any Paid Form of Nonpersonal Presentation by an Identified Sponsor. Sales Promotion Short-term Incentives to Encourage Sales. Public Relations Building Good Relations with Various Publics by Obtaining Favorable Unpaid Publicity. Direct Marketing Direct Communications With Individuals to Obtain an Immediate Response. Personal Presentations by a Firm’s Sales Force.
    36. 36. The Integrated Marketing Strategy <ul><li>The marketing concept: </li></ul><ul><li>Profitability </li></ul><ul><li>Consumer orientation </li></ul><ul><li>Social responsibility </li></ul><ul><li>Organisational integration </li></ul><ul><li>Phases in the product life cycle: </li></ul><ul><li>Introductory </li></ul><ul><li>Growth </li></ul><ul><li>Maturity </li></ul><ul><li>Decline </li></ul><ul><li>Marketing warfare </li></ul><ul><ul><li>Attack </li></ul></ul><ul><ul><li>Defense </li></ul></ul>
    37. 37. Time Product Develop- ment Introduction Profits Sales Growth Maturity Decline Losses/ Investments ($) Sales and Profits ($) Sales and Profits Over the Product’s Life From Introduction to Decline Product Life Cycle
    38. 38. Marketing Planning and Control <ul><li>Planning </li></ul><ul><li>Strategic planning </li></ul><ul><li>Functional planning </li></ul><ul><li>Control </li></ul><ul><li>Set objectives </li></ul><ul><li>Measure performance </li></ul><ul><li>Evaluate performance </li></ul><ul><li>Take corrective action </li></ul>
    39. 39. Public Relations A deliberate, planned and sustained process of communication between a business and its internal and external publics. Its purpose is obtaining, maintaining and/or improving good relations and understanding. Developed from: Manipulation Information Mutual influence
    40. 40. What is Public Relations? <ul><li>Building good relations with the company’s various publics by obtaining favorable publicity, building up a good “corporate image” and handling or heading off unfavorable rumors, stories and events. </li></ul><ul><li>Major functions are: </li></ul><ul><ul><li>Press Relations </li></ul></ul><ul><ul><li>Product Publicity </li></ul></ul><ul><ul><li>Public Affairs </li></ul></ul><ul><ul><li>Lobbying </li></ul></ul><ul><ul><li>Investor Relations </li></ul></ul><ul><ul><li>Development </li></ul></ul>
    41. 41. Special Events Written Materials Corporate Identity Materials Speeches News Audiovisual Materials Public Service Activities Web Site Major Public Relations Tools
    42. 42. Public Relations Management <ul><li>1. Planning </li></ul><ul><ul><li>Scanning the environment </li></ul></ul><ul><ul><li>Setting objectives </li></ul></ul><ul><li>2. Organising </li></ul><ul><ul><li>Organisational structure </li></ul></ul><ul><ul><li>Outside consultants </li></ul></ul><ul><li>3. Leading </li></ul><ul><ul><li>Establish corporate culture </li></ul></ul><ul><li>4. Evaluation and control </li></ul>
    43. 43. Communication <ul><li>Communication can be verbal and non-verbal </li></ul><ul><li>Communication process – see fig 16.6 </li></ul><ul><li>Basically: Sender encodes message which is transmitted to receiver via a medium. The receiver decodes the message and interprets it in some way. This all happens despite noise in the environment. </li></ul><ul><li>Types of communication media: </li></ul><ul><li>The spoken word </li></ul><ul><li>The printed media </li></ul><ul><li>Sight and sound </li></ul><ul><li>Special events </li></ul><ul><li>The Internet </li></ul>
    44. 44. Publicity <ul><li>Methods of obtaining publicity: </li></ul><ul><ul><li>Unique special events </li></ul></ul><ul><ul><li>Unique communication messages </li></ul></ul><ul><ul><li>News releases </li></ul></ul><ul><ul><li>Sponsorships </li></ul></ul><ul><li>Social responsibility and business ethics </li></ul><ul><li>Areas of social responsibility: </li></ul><ul><ul><li>Consumers </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><ul><li>Competitors </li></ul></ul><ul><ul><li>Employees </li></ul></ul><ul><ul><li>Owners and shareholders </li></ul></ul><ul><ul><li>The community </li></ul></ul>
    45. 45. The end! We encourage you to study further in this exciting field!