2. Marketing Management
• Marketing Management employs various tools
from economics and competitive strategy to
analyze the industry context in which the firm
operates.
• These include Porter's five forces, analysis of
strategic groups of competitors, value chain
analysis and others.
3. Marketing Management
• In competitor analysis, marketers build
detailed profiles of each competitor in the
market, focusing especially on their relative
competitive strengths and weaknesses using
SWOT analysis
4. Marketing Management
• Marketing managers will examine each
competitor's cost structure, sources of profits,
resources and competencies, competitive
positioning and product differentiation,
degree of vertical combination, historical
responses to industry developments, and
other factors.
5. Marketing Management
• Marketing management often finds it
necessary to invest in research to collect the
data required to perform accurate marketing
analysis. As such, they often conduct market
research (alternately marketing research) to
obtain this information.
6. Marketing Management
• Marketers employ a variety of techniques to
conduct market research, but some of the more
common include:
• Qualitative marketing research, such as focus
groups and various types of interviews
• Quantitative marketing research, such as
statistical surveys
• Experimental techniques such as test markets
• Observational techniques such as (on-site)
observation
7. Qualitative marketing research
• is a set of research techniques, used in
marketing and the social sciences, in which
data is obtained from a relatively small group
of respondents and not analyzed with
inferential statistics.
8. Quantitative marketing research
• is the application of quantitative research
techniques to the field of marketing. It has
roots in both the positivist view of the world,
and the modern marketing viewpoint that
marketing is an interactive process in which
both the buyer and seller reach a satisfying
agreement on the "four Ps" of marketing:
Product, Price, Place (location) and
Promotion.
9. Quantitative marketing research
• As a social research method, it typically
involves the construction of questionnaires
and scales. People who respond (respondents)
are asked to complete the survey.
• Marketers use the information so obtained to
understand the needs of individuals in the
marketplace, and to create strategies and
marketing plans.
10. Experimental Techniques
• In general usage, design of experiments (DOE)
or experimental design is the design of any
information-gathering exercises where
variation is present, whether under the full
control of the experimenter or not. However,
in statistics, these terms are usually used for
controlled experiments. Formal planned
experimentation is often used in evaluating
physical objects, chemical formulations,
structures, components, and materials.
11. Observation Techniques
• In marketing and the social sciences,
observational research (or field research) is a
social research technique that involves the
direct observation of event in their natural
setting. This differentiates it from
experimental research in which a quasi-artificial
environment is created to control for
fake factors, and where at least one of the
variables is manipulated as part of the
experiment.
12. Observation Techniques
• Compared with quantitative research and
experimental research, observational research
tends to be less reliable but often more valid.
The main advantage of observational research
is flexibility. The researchers can change their
approach as needed. Also it measures
behavior directly, not reports of behavior or
intentions.
13. Market Environment
• The market environment is a marketing term
and refers to factors and forces that affect a
firm’s ability to build and maintain successful
relationships with customers.
14. Market Environment
• Two levels of the environment are:
Micro (internal) environment - small forces
within the company that affect its ability to
serve its customers.
15. Market Environment
Macro (national) environment - larger societal
forces that affect the microenvironment.
16. Micro - Environment
• The micro environment refers to the forces
that are close to the company and affect its
ability to serve its customers. It includes the
company itself, its suppliers, marketing
intermediaries, customer markets and
publics.
17. Micro - Environment
• The company aspect of microenvironment
refers to the internal environment of the
company.
18. Micro - Environment
• This includes all departments, such as
management, finance, research and
development, purchasing, operations and
accounting. Each of these departments has an
impact on marketing decisions.
19. Micro - Environment
• For example, research and development have
input as to the features a product can perform
and accounting approves the financial side of
marketing plans and budgets.
The suppliers of a company are also an
important aspect of the microenvironment
because even the slightest delay in receiving
supplies can result in customer dissatisfaction.
20. Micro - Environment
• Marketing managers must watch supply
availability and other trends dealing with
suppliers to ensure that product will be
delivered to customers in the time frame
required in order to maintain a strong
customer relationship.
21. Micro - Environment
• Marketing intermediaries refers to resellers,
physical distribution firms, marketing services
agencies, and financial intermediaries. These
are the people that help the company
promote, sell, and distribute its products to
final buyers.
22. Micro - Environment
• Resellers are those that hold and sell the
company’s product. They match the
distribution to the customers.
Physical distribution firms are places such as
warehouses that store and transport the
company’s product from its origin to its
destination
23. Micro - Environment
• Marketing services agencies are companies
that offer services such as conducting
marketing research, advertising, and
consulting.
• Financial intermediaries are institutions such
as banks, credit companies and insurance
companies.
24. Micro - Environment
• Another aspect of microenvironment is the
customers. There are different types of
customer markets including consumer
markets, business markets, government
markets, international markets, and reseller
markets.
25. Micro - Environment
• The consumer market is made up of
individuals who buy goods and services for
their own personal use or use in their
household.
• Business markets include those that buy
goods and services for use in producing their
own products to sell.
26. Micro - Environment
• This is different from the reseller market
which includes businesses that purchase
goods to resell as is for a profit.
• The government market consists of
government agencies that buy goods to
produce public services or transfer goods to
others who need them.
27. Micro - Environment
• International markets include buyers in other
countries and includes customers from the
previous categories.
• Competitors are also a factor in the
microenvironment and include companies
with similar offerings for goods and services.
28. Micro - Environment
• To remain competitive a company must
consider who their biggest competitors are
while considering its own size and position in
the industry.
The company should develop a strategic
advantage over their competitors.
29. Micro - Environment
• The final aspect of the microenvironment is
publics, which is any group that has an
interest in or impact on the organization’s
ability to meet its goals. For example, financial
publics can hinder a company’s ability to
obtain funds affecting the level of credit a
company has.
30. Micro - Environment
• Media publics include newspapers and
magazines that can publish articles of interest
regarding the company and editorials that
may influence customers’ opinions.
31. Macro-Environment
• The macro environment refers to all forces
that are part of the larger society and affect
the microenvironment. It includes concepts
such as demography, economy, natural forces,
technology, politics, and culture.
32. Macro-Environment
• Factors affecting organization in Macro
environment are known as PESTEL, that is:
Political, Economical, Social, Technological,
Environmental and Legal.
33. Macro-Environment
• Demography refers to studying human
populations in terms of size, density, location,
age, gender, race, and occupation. This is a
very important factor to study for marketers
and helps to divide the population into market
segments and target markets.
34. Macro-Environment
• An example of demography is classifying
groups of people according to the year they
were born. These classifications can be
referred to as baby boomers, who are born
between 1946 and 1964, generation X, who
are born between 1965 and 1976, and
generation Y, who are born between 1977 and
1994. Each classification has different
characteristics and causes they find important.
35. Macro-Environment
• This can be beneficial to a marketer as they
can decide who their product would benefit
most and tailor their marketing plan to attract
that division. Demography covers many
aspects that are important to marketers
including family self-motivated, geographic
shifts, work force changes, and levels of
variety in any given area.
36. Macro-Environment
• Another aspect of the macro environment is
the economic environment. This refers to the
purchasing power of potential customers and
the ways in which people spend their money.
37. Macro-Environment
• Within this area are two different economies,
subsistence and industrialized. Subsistence
economies are based more in agriculture and
consume their own industrial output.
Industrial economies have markets that are
diverse and carry many different types of
goods. Each is important to the marketer
because each has a highly different spending
pattern as well as different distribution of
wealth.
38. Macro-Environment
• The natural environment is another important
factor of the macro environment. This
includes the natural resources that a company
uses as inputs that affects their marketing
activities. The concern in this area is the
increased pollution, shortages of raw
materials and increased governmental
interference.
39. Macro-Environment
• As raw materials become increasingly scarcer,
the ability to create a company’s product gets
much harder. Also, pollution can go as far as
negatively affecting a company’s reputation if
they are known for damaging the
environment
40. Macro-Environment
• The last concern, government intervention
can make it increasingly harder for a company
to fulfill their goals as requirements get more
strict.
41. Macro-Environment
• The political environment includes all laws,
government agencies, and groups that
influence or limit other organizations and
individuals within a society. It is important for
marketers to be aware of these restrictions as
they can be complex.
42. Macro-Environment
• The aspect of the macro environment is the
cultural environment, which consists of
institutions and basic values and beliefs of a
group of people. The values can also be
further categorized into core beliefs, which
passed on from generation to generation and
very difficult to change, and secondary beliefs,
which tend to be easier to influence.
43. Macro-Environment
• As a marketer, it is important to know the
difference between the two and to focus your
marketing campaign to reflect the values of a
target audience.
44. Macro-Environment
• When dealing with the marketing
environment it is important for a company to
become proactive. By doing so, they can
create the kind of environment that they will
prosper in and can become more efficient by
marketing in areas with the greatest customer
potential.
45. Macro-Environment
• It is important to place equal emphasis on
both the macro and micro environment and to
react accordingly to changes within them.
46. Consumer markets
• A consumer is a person (or group) who pays
to consume the goods and/or services
produced by a seller (i.e., company,
organization).
• Consumer markets are the markets for
products and services bought by individuals
for their own or family use.
47. Characteristics of Consumer Markets
• The consumer market pertains to buyers who
purchase goods and services for consumption
rather than resale. However, not all consumers
are alike in their tastes, preferences and
buying habits due to different characteristics
that can distinguish certain consumers from
others.
48. Characteristics of Consumer Markets
• These particular consumer characteristics
include various demographic, psychographic,
behaviorialistic and geographic traits.
• Marketers usually define these consumer
characteristics through market segmentation,
the process of separating and identifying key
customer groups.
49. Demographic Characteristics
• Characteristics of consumer markets based on
demographics include differences in gender,
age, ethnic background, income, occupation,
education, household size, religion,
generation, nationality and even social class.
50. Demographic Characteristics
• Most of these demographic categories are
further defined by a certain range. For
example, companies may identify the age of
their consumers in the 18 to 24, 25 to 34, 35
to 54, 55 to 65, and 65+ age groups.
51. Demographic Characteristics
• For example, a new cell phone may be
targeted toward 18 to 24-year-olds with
incomes between Tshs 25,000 and Tshs
850,000.
52. Behavioralistic Characteristics
• Behavioralistic characteristics can also be
garnered through marketing research.
Behavioralistic characteristics of consumer
markets include product usage rates, brand
loyalty, user status or how long they have
been a customer, and even benefits that
consumers seek.
53. Behavioralistic Characteristics
• Companies like to know how often their
consumers visit their restaurants, stores or use
their products.
54. Behavioralistic Characteristics
• Company marketing departments usually try
to distinguish between heavy, medium and
light users, whom they can then target with
advertising. Marketers like to know which
customers are brand loyalists, as those
consumers usually only buy the company's
brand.
55. Geographic Characteristics
• Consumer markets also have different
geographic characteristics. These geographic
characteristics are often based on market size,
region, population density and even climate.
56. Consumer Market and Influence on
Demand and Supply
• supply and demand is an economic model of
price determination in a market. It concludes
that in a competitive market, the unit price for
a particular good will vary until it settles at a
point where the quantity demanded by
consumers (at current price) will equal the
quantity supplied by producers (at current
price), resulting in an economic equilibrium
for price and quantity.
57. The four basic laws of supply and
demand
• If demand increases and supply remains
unchanged, a shortage occurs, leading to a
higher equilibrium price.
• If demand decreases and supply remains
unchanged, a surplus occurs, leading to a
lower equilibrium price.
58. The four basic laws of supply and
demand
• If demand remains unchanged and supply
increases, a surplus occurs, leading to a lower
equilibrium price.
• If demand remains unchanged and supply
decreases, a shortage occurs, leading to a
higher equilibrium price
59. Supply schedule
• A supply schedule is a table that shows the
relationship between the price of a good and
the quantity supplied. A supply curve is a
graph that illustrates that relationship
between the price of a good and the quantity
supplied.
60. Supply schedule
• Under the assumption of perfect competition,
supply is determined by marginal cost. Firms
will produce additional output while the cost
of producing an extra unit of output is less
than the price they would receive
61. Supply schedule
• By its very nature, conceptualizing a supply
curve requires the firm to be a perfect
competitor, namely requires the firm to have
no influence over the market price. This is true
because each point on the supply curve is the
answer to the question "If this firm is faced
with this potential price, how much output
will it be able to and willing to sell?"
62. Supply schedule
• If a firm has market power, its decision of how
much output to provide to the market
influences the market price, then the firm is
not "faced with" any price, and the question is
meaningless
63. Supply schedule
• The determinants of supply are:
• Production costs: how much a good costs to
be produced. Production costs are the cost of
the inputs, primarily labor, capital, energy and
materials. Production costs depend on the
technology used in production, and/or
technological advances.
• Firms' expectations about future prices
• Number of suppliers
64. Demand schedule
• A demand schedule, depicted graphically as
the demand curve, represents the amount of
some good that buyers are willing and able to
purchase at various prices, assuming all
determinants of demand other than the price
of the good in question, such as income,
tastes and preferences, the price of substitute
goods, and the price of complementary goods,
remain the same
65. Demand Curve
• The demand curve is the graph describing the
relationship between the price of a certain
commodity and the amount of it that
consumers are willing and able to purchase at
that given price.
66. Demand Curve
• It is a graphic representation of a demand
schedule.
• The demand curve for all consumers together
follows from the demand curve of every
individual consumer: the individual demands
at each price are added together.
67. Demand Curve
• Demand curves are used to estimate
behaviors in competitive markets, and are
often combined with supply curves to
estimate the equilibrium price (the price at
which sellers together are willing to sell the
same amount as buyers together are willing to
buy,
68. Demand Curve
• also known as market clearing price) and the
equilibrium quantity (the amount of that good
or service that will be produced and bought
without surplus/excess supply or
shortage/excess demand) of that market.
69. Characteristics
• According to convention, the demand curve is
drawn with price on the vertical (y) axis and
quantity on the horizontal (x) axis.
• The demand curve usually slopes downwards
from left to right.
70. Characteristics
• The negative slope is often referred to as the
"law of demand", which means people will
buy more of a service, product, or resource as
its price falls.
71. Characteristics
• The demand curve is related to the marginal
utility curve, since the price one is willing to
pay depends on the utility.
72. Characteristics
• However, the demand directly depends on the
income of an individual while the utility does
not. Thus it may change indirectly due to
change in demand for other commodities.
73. Shift of Demand Curve
• The shift of a demand curve takes place when
there is a change in any non-price
determinant of demand, resulting in a new
demand curve.
74. Shift of Demand Curve
• Non-price determinants of demand are those
things that will cause demand to change even
if prices remain the same
• in other words, the things whose changes
might cause a consumer to buy more or less of
a good even if the good's own price remained
unchanged
75. Shift of Demand Curve
• Some of the more important factors are the
prices of related goods (both substitutes and
complements), income, population, and
expectations.
76. Shift of Demand Curve
• When income increases, the demand curve for
normal goods shifts outward as more will be
demanded at all prices, while the demand
curve for inferior goods shifts inward due to
the increased attainability of superior
substitutes.
77. Shift of Demand Curve
• With respect to related goods, when the price
of a good (e.g. a hamburger) rises, the
demand curve for substitute goods (e.g.
chicken) shifts out, while the demand curve
for complementary goods (e.g. tomato sauce)
shifts in
78. Demand Shifters
• Changes in disposable income
• Changes in tastes and preferences - tastes and
preferences are assumed to be fixed in the
short-run.
• Changes in expectations
79. Demand Shifters
• Changes in the prices of related goods
(substitutes and complements)
• Population size and composition
80. Changes that decreases demand
• Decrease in price of a substitute
• Increase in price of a complement
• Decrease in consumer income if the good is a
normal good
• Increase in consumer income if the good is an
inferior good
81. Factors affecting market demand
• Market or aggregate demand is the
summation of individual demand curves. In
addition to the factors which can affect
individual demand there are three factors that
can affect market demand (cause the market
demand curve to shift)
82. Factors affecting market demand
• A change in the number of consumers,
• A change in the distribution of tastes among
consumers,
• A change in the distribution of income among
consumers with different tastes.
83. Movement along demand curve
• There is movement Along a demand curve
when a change in price causes the quantity
demanded to change.
• It is important to distinguish between
movement along a demand curve, and a shift
in a demand curve
84. Movement along demand curve
• Movements along a demand curve happen
only when the price of the good changes
• When a non-price determinant of demand
changes the curve shifts
85. Equilibrium
• Equilibrium is defined to be the price-quantity
pair where the quantity demanded is equal to
the quantity supplied, represented by the
intersection of the demand and supply curves.
86. Market Equilibrium
• A situation in a market when the price is such
that the quantity that consumers demand is
correctly balanced by the quantity that firms
wish to supply.
