The document provides an overview of key marketing concepts including the role of marketing, why markets change, and different marketing strategies like mass marketing and niche marketing. It discusses how businesses can respond to changing customer spending patterns and increased competition through developing new products, improving efficiency, expanding into new markets, and increased promotion. It also covers topics like market segmentation, the use of market research, and different methods of presenting data from market research.

1. By the end of the topic, the learner shall
appreciate:
•The role of marketing
•Why markets change in terms of consumer
spending patterns & competition, and how
businesses respond to these changes
•The difference between mass marketing and
niche marketing
•Market segmentation
YEAR 11 NOTES 1

2. Marketing & Markets-Definitions
 Marketing is the identification , anticipation of
customer wants and developing products that will
satisfy those wants profitably.
 A market is made up of the total number of customers
and potential customers as well as sellers for a
particular product[good or service]
 Customer is a person, business or any organization
that buys a good or a service from a business.
YEAR 11 NOTES 2

3. The marketing Department
Sections of the marketing department:
1. Sales -responsible for sale of the product.
 Headed by the Sales Manager
2. Market Research -responsible for finding out
customer’s needs as well as anticipating customer
needs, market changes and the impact of competitor
actions
 Helps a business to develop products that meet
customer expectations
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4. The marketing Department cont’d
3. Promotion
 Deals with organizing advertising and sales promotion
campaigns/activities to increase sales volume.
 It also decides on the advertising media to be used
4. Distribution
 Ensures products[goods or services] are available,
conveniently, to customers
 Decides on the most appropriate distribution channels
to use to make products available to customers
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5. The Role of Marketing
1. Identifying customer needs –the products they
want, prices they are willing to pay, where and how
they want to buy the products
2. Satisfying customer needs-by providing the right
product[good quality products], at the right price
and at the right place[PPP]
3. Maintain customer loyalty-by building customer
relationships
4. Gain information about customers-through
market research-in order to meet their changing
needs
5. Anticipate changes in customer needs
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6. Objectives/aims of Marketing
1. Raise customer awareness of it’s products[through
advertising]
2. Increase sales revenue and profitability
3. Increase and maintain market share
Market share-is the percentage[%] of total market sales
held by one brand or a business.
4. Maintain and improve the image of it’s products and the
business.
5. Target a new market or market segment
6. Enter new markets at home or abroad
7. Develop new products or improve existing products
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7. Market changes
 Market can also be defined as all customers who are
interested and have the financial ability to purchase a
certain product.
 Target market;individuals or organisations identified
by a business as the customers or consumer of its
products.
 When market is described by the type of customer
who use the produts; there are 2 types of market
I. Consumer market- products sold to final consumer
II. Industrial market- market sold to other businesses
to be used in production e.g machinery.
YEAR 11 NOTES 7

8. WHAT CAUSES CHANGES IN
CUSTOMER SPENDING PATTERNS?
1. Changes in consumer tastes and fashions-
consumers may want different styles of clothes to
those they wore last year. With time some products
become popular and others, unpopular.
2. Price of the product- when the price of a product
increases the demand decreases, while when price
decreases quantity demanded increases.
3. Changes in technology-with new products being
developed e.g ipads, the sales of old versions of
phones have fallen-consumers now prefer phones
made from modern technology[touch screens e.t.c]
YEAR 11 NOTES 8

9. Cont’d
4. Changes in incomes-falling incomes lead to a fall in
demand[sales] for products; an increase in incomes leads to
an increase in demand[sales]
5. Changes in population size and structure- an increase
in a country’s population increase the size of the market, this
could increase sales. Countries with high young population
will have a large market for young people. Eg fancy clothing.
6. Spending on advertising and other promotional
activities- consumers are more likely to buy a product that
has been advertised and is well known. They are willing to
pay more because a brand name, even if there are similar
products in the market.
YEAR 11 NOTES 9

10. How can businesses respond to
changing spending patterns and
increased competition?
1. Develop new products to keep customers’ interest with
the help of market research, business will identify changes in
customer needs and wants. Thus develop new products that
will satisfy customers. This helps business to remain more
competitive.
2. Improve efficiency – this will help reduce waste, thus cut
average costs. If average costs are reduced, a business can be
able to reduce prices of its products and remain profitable.
differentiation can he helpful.
3. look for new markets – finding new markets with less
competition and where customers are more likely to buy the
product, will help keep businesses in the market.
4. Increased promotion – increasing advertising to persuade
customers to buy their product and not their competitors.
YEAR 11 NOTES 11

11. MASS MARKETING
 It is marketing a product[s] to a large number of
customers-e.g washing powder, a car brand, a banking
product etc
 A mass market is where there is a very large number of
sales of a product
YEAR 11 NOTES 12

12. Niche Marketing
 This is a specialised sector of the market desiring
specific products/services. Tends to be a very specific
target market such as the wealthy. Examples help, e.g.
luxury cars.
 It involves undertaking marketing activities in a small,
usually specialized segment of a larger market.
YEAR 11 NOTES 13

13. Benefits and limitation of mass
marketing
benefits limitations
 Large firms often benefit
from economies of scale,
reducing unit costs.
 A large market has the
potential of large sales and
profits
 Changes in consumer
spending have less effect on
firms selling in mass market.
 More competition in the
market, reducing firms profit
margin
 Not all markets are large to
support mass markets
 Consumers today demand
differentiated products and
not products produced for
mass market.
 High costs of advertising due
to high competition.
YEAR 11 NOTES 14

14. Advantages of niche markets]
 Small firms take advantage of niche markets to
increase sales and market share because larger firms
are not keen on them
 Niche marketers get focused on the needs of
consumers and aim to satisfy them-leading to
customer loyalty
YEAR 11 NOTES 15

15. disadvantages of niche markets]
 Niche markets are small –leading to low sales[if the
business wants to grow, it will need to identify new
markets for it’s products]
 Businesses in a niche market specialize in only one
product-this is risky because if the product is no
longer in demand, the business will fail
YEAR 11 NOTES 16

16. MARKET SEGMENTS
Key definition:
 A market segment is an identifiable sub-group of a
whole market in which consumers have similar
characteristics and preferences
 Market segmentation is when a market is broken down
into sub-groups which have similar characteristics, and
the right product is sold to the customers at the right
price, using an appropriate distribution channel
 Market segmentation recognizes that all potential
customers are not the same in terms of incomes, and
preferences, etc
YEAR 11 NOTES 17

17. METHODS OF MARKET
SEGMENTATION
1. By socio-economic group-income groups are
defined by people’s jobs, according to how much
they are paid and professions e.g managerial,
supervisory etc
 Products are priced differently to target certain
income groups e.g a luxury car i.e Ferrari is targeted
at high income consumers etc
 Some perfumes are sold at low prices whereas others
are very expensive.
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18. METHODS OF MARKET
SEGMENTATION Cont’d
2. By age-some products are targeted at different age
groups
 Young people buy different clothes to elderly people
 The toys bought for babies will vary from those bought
for older children
YEAR 11 NOTES 19

19. METHODS OF MARKET
SEGMENTATION Cont’d
3. By region /location-in different regions of a country,
people might buy different products
 E.g waterproof clothing would be sold in the rainy part
of the country, but not in the dry part
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20. METHODS OF MARKET
SEGMENTATION Cont’d
4. By gender- i.e some products are bought only by
women or only by men e.g a shaving razor would
normally be bought by men, whereas a perfume would
normally by women etc
YEAR 11 NOTES 21

21. METHODS OF MARKET
SEGMENTATION Cont’d
5. By use of the product-cars used by consumers for
domestic use or business use would be advertised and
promoted differently[even though they may be the
same models]
 Cars for business use may be advertised by sending out
brochures to businesses
 Cars for domestic use may be advertised on television
YEAR 11 NOTES 22

22. METHODS OF MARKET
SEGMENTATION Cont’d
6. By lifestyle-e.g a single person earning the same income
as a married person with three children will spend that
income differently , buying different products
 A single person would spend most of his/her income on
expensive clothing while a married person with three
children would want to save money for their education-a
school fees bank savings account or an education/ life
insurance policy would be a priority
CONCLUSION-Once the segments have been identified, this
will influence how the products are packaged and
advertised.
YEAR 11 NOTES 23

23. METHODS OF MARKET
SEGMENTATION Cont’d
 A business can segment a market in order to sell more
products to different market segments
 Different brands will be aimed at different market
segments e.g a business can produce various brands of
soap to satisfy most of the market segments
YEAR 11 NOTES 24

24. BENEFITS OF MARKET
SEGMENTATION[to a business]
1. Goods and services can be designed to meet specific
needs of consumers, thus likely to increase sales.
2. Small businesses can operate in one or two segments,
increasing chances of survival in market.
3. Marketing strategy can be targeted at each segment,
reducing waste of resources.
4. It is easy to use price discrimination for similar
products, enabling business to earn high profits.
5. Helps in identifying market gap, as segmentation
can identify consumers who have specialized needs.
YEAR 11 NOTES 25

25. Limitations of business using
market segmentation.
 Promotion costs may be high as different types of
promotions might be needed for different segments.
 Production and inventory management costs may be
higher than those for producing one type of product.
 Marketing economies of scale may not be possible.
 Additional cost of changes to production to meet the
needs of different segments.
YEAR 11 NOTES 26

26. MARKET RESEARCH-Unit 11
YEAR 11 NOTES 27

27. Definition:
 Market research is defined as process of collecting,
recording and analysis of data about customers,
competitors and the market/product/service
 Without market research, businesses could waste a
great deal of money developing products that not
many people will buy.
YEAR 11 NOTES 28

28. QUESTIONS WHICH MARKET
RESEARCH TRIES TO ANSWER
1. What features of the product do people like or
dislike?
2. Would they be willing to buy the product?
3. What price are they prepared to pay?
4. Where would they be most likely to buy the product?
5. What type of customers would buy the product?
6. What type of promotion would be most appropriate
for the type of customers being targeted?
7. Who are the competitors?
YEAR 11 NOTES 29

29. TYPES OF MARKET RESEARCH
INFORMATION
1. Quantitative information-it answers questions
about the quantity of something e.g. ‘How many
sports shoes were sold in the December 2015?’ or,
‘What percentage of children drink ‘coke’ soda?’. Etc
2. Qualitative information-it answers questions
where an opinion or judgment is necessary e.g ‘What
do customers like about a particular product?’.
YEAR 11 NOTES 30

30. Sampling
 A sample is the group of people who are selected from
a large population to respond to a market research
exercise.
 A random sample is when people are selected
without any specific criteria. Everyone has even chance
of being selected.
 Quota sample is when people are selected on the
basis of a certain characteristic e.g age, gender, use of
the product etc.
YEAR 11 NOTES 31

31. TYPES OF MARKET RESEARCH
1. Primary Research
 Also known as field research
 Collects first-hand information from potential or existing
customers
 The research is planned and carried out by people who want
to use the data
 It can be expensive to gather primary data-travelling
expenses etc
YEAR 11 NOTES 32

32. Methods of collecting primary
data
1. Questionnaire – a set up of questions put down to
be answered by writing down answers.
2. Online surveys – set of questions answer over the
internet.
3. Interviews – involves asking an individual a series of
questions face to face.
4. Observation – looking and taking notes of things as
they happen.
5. Focus groups – a group of people who are a
representative of a larger group.
Discus the advantages and disadvantages of each of the above
YEAR 11 NOTES 33

33. THE STAGES OF PRIMARY
RESEARCH
YEAR 11 NOTES 45

34. SECONDARY RESEARCH/DESK
RESEARCH
Definition: It is the use of information that has already been collected and is
available for use by others
Sources of secondary information
1. Internal sources-available from the firm’s own records
2. External sources-this is when information is obtained from outside the
firm/business i.e from:
 Government statistics-e.g population distribution and the age-sex structure
 Newspapers-about the general state of the economy e.g inflation, spending
patterns etc
 Trade associations-provides information for the businesses in that industry-
e.g an agricultural association which helps farmers who grow particular crops.
 Market research agencies-they sometimes publish reports of their research
into particular markets
 The internet-contains information on other businesses[available in their
websites], government statistics, newspapers etc
YEAR 11 NOTES 46

35. Limitations of secondary market
research.
 The information may be historical/out of date and
thus give a misleading picture.
 The general nature of the information may mean it is
not suitable for purpose; it was not collected for the
specific needs of a business.
 The data collection methods may be unknown and
may also lead to inaccurate information.
 There may be significant gaps in the information
leading to limitations on suitability.
YEAR 11 NOTES 49

36. CLASS ACTIVITY

ACTIVITY 11.3 AND
ACTIVITY 11.4
YEAR 11 NOTES 50

37. WHO CARRIES OUT MARKET
RESEARCH?
1. Businesses can carry out their own market research
 They use their own employees i.e. marketing
personnel
 The market research is funded from the marketing
budget
 It is cheap but can be time-consuming
2. Specialist market research agency
 They are contracted by a business to carry out market
research on their behalf
 The business pays the agency for the service
YEAR 11 NOTES 51

38. ACCURACY OF MARKET RESEARCH
It depends on several factors i.e:
1. How carefully the sample was drawn up-a small
sample size may lead to inaccurate findings
2. The way in which the questions in the questionnaire
were phrased-if they were vague, incorrect responses
will be provided
3. The sampling method used-if quota sampling is
used, rather than random sampling, more accurate
data will be obtained
YEAR 11 NOTES 52

39. ACCURACY OF MARKET RESEARCH
Cont’d
4. Whether the person/s who carried out the research
are qualified-unqualified researchers provide
inaccurate results
5. Age of the information-secondary data can quickly
become out dated, no longer relating to current trends
in consumers’ buying habits; hence the need to
supplement secondary data with primary data.
6. BIAS – some information in the newspaper may be
skewed to achieve a certain objectives.
YEAR 11 NOTES 53

40. CHAPTER REVIEW
 SUMMERY ON PAGE 150
 METHODS OF MARKET RESEARCH.
YEAR 11 NOTES 54

41. PRESENTATION OF DATA FROM
MARKET RESEARCH
1. Tally chart/Frequency tables
YEAR 11 NOTES 55

42. PRESENTATION OF DATA FROM
MARKET RESEARCH Cont’d
2. Bar graphs
YEAR 11 NOTES 56

43. PRESENTATION OF DATA FROM
MARKET RESEARCH Cont’d
3. Pie Chart
YEAR 11 NOTES 57

44. SAMPLING IN MARKET RESEARCH
Definition of sampling:
 Sampling is a statistical method of obtaining
representative data or observations from a group of
customers or potential customers
What is a sample?
A sample is the group of people who are selected to
respond to a market research exercise
YEAR 11 NOTES 58

45. SAMPLING TECHNIQUES
1. Random sampling/Random sample
 People/respondents are selected at random i.e without
biasness [often by a computer]
 Every member of the group or population has an equal
chance of being selected for the market research
 People are selected on the basis of certain characteristics e.g
age, gender, income e.t.c.
Example:
 Every 100th name in a telephone directory may be
selected.
BUT-not everyone who is selected may be a consumer of the
particular product being investigated
YEAR 11 NOTES 59

46. SAMPLING TECHNIQUES
2. Quota sampling/Quota sample
 This is when people are selected on the basis of certain
characteristics e.g age, gender or income
 Researchers , for example, will interview people with
certain characteristics e.g of a specific income group,
gender, age etc.
Example: Select 20 people from the age group 10-25
years; 30 people from age group 26-45 years etc to find
the views of these specific groups
YEAR 11 NOTES 60

47. PRODUCT-ORIENTED AND MARKET
–ORIENTED BUSINESSES
1. Product-oriented business
 It is a business whose main focus is on the product only in
terms of design, content, packaging, colour, smell etc. They
make products first and then get the views of the
customer later.
2. Market –oriented business
 It is a business which carries out market research first to
find out consumer wants before producing or developing a
product.
NOTE: Market –oriented businesses are more effective when
selling a new product or entering a new market.
YEAR 11 NOTES 61

48. THE END
YEAR 11 NOTES 62

49. CHAPTER 12
THE MARKETING MIX
Definition:
It refers to all the activities which go into marketing a
product[good or service].
These activities are often summarized as the 4-P’s-i.e
product, price, place and promotion
The 4 P’s are referred to as ‘Elements of the Marketing
Mix’
YEAR 11 NOTES 63

50. ELEMENTS OF MARKETING MIX
 Marketing mix; the four marketing decisions
needed for the effective marketing of a product.
 PRODUCT
 PRICE
 PLACE
 PROMOTION
 4ps; the right product at the right price with the
right promotion in the right place.
YEAR 11 NOTES 64

51. THE 4 P’s OF THE MARKETING MIX
1. Product:
 Refers to a good or service that a business offers to
the market
 Important aspects about a product include: design,
quality and packaging[compare with the
competitor’s product]
 A comparison should also be made with the price of
the competitor’s product
 The price charged should cover the costs of
production in the long run
YEAR 11 NOTES 65

52. Product Cont’d
Without a product, the other elements of the
marketing mix i.e price , promotion and place are
pointless
For business to survive and succeed they need to;
Develop new products
Change an existing product to meet changes of
customer needs
Change an existing products to enter a new market
YEAR 11 NOTES 66

53. COSTS OF DEVELOPING NEW
PRODUCTS
1. Market research to identify customer needs is
expensive
2. Development of new product often requires large
capital expenditure.
3. Failure of the new product, could threaten the
survival of the business, if the project was financed
through borrowing.
4. No quarantee that the new product will survive.
YEAR 11 NOTES 67

54. Benefits of new product
 Developing a new product before competitors can gain
the business competitive advantage. Thus able to
charge higher prices.
 Spreads risk; adding new product to existing products
spreadsrisk of a business
 Economies of scale; development of new products can
increase the size of a business thus able to gain
economies of scale.
 Increased sales, revenue and profits.
YEAR 11 NOTES 68

55. TYPES OF PRODUCT
1. Consumer goods
 They are consumed[used] by individuals
 Some consumer goods do not last long e.g.
detergents, food etc while others last a long time e.g
furniture, T.V set, computers, personal car etc
2. Consumer services
 They are targeted at individuals e.g vehicle repair,
hairdressing, education etc
YEAR 11 NOTES 69

56. TYPES OF PRODUCT Cont’d
3. Producer goods
They are targeted for other businesses to use
They help with the production of other goods/services
e.g. lorries, machinery, components etc
4. Producer services
They are targeted for other businesses to use e.g.
insurance, auditing, banking, advertising agencies etc
N.B. The promotional method/s for the above goods may
vary
YEAR 11 NOTES 70

57. IMPORTANT PRODUCT DECISIONS
Producing the right product, at the right price
The product needs to satisfy the consumer
wants[otherwise it will not sell]
The product should be of the right quality
The price charged should enable the business recover
the costs of production, and produce a reasonable
profit
The product should be well designed to appeal to
customers and to last a reasonable length of time in
order to support the brand image
YEAR 11 NOTES 71

58. PRODUCT DEVELOPMENT
Large businesses are always looking to develop new
products in order to increase their overall market share
Small businesses also try to stay competitive by also
developing new products
YEAR 11 NOTES 72

59. NEW PRODUCT DEVELOPMENT
YEAR 11 NOTES 73

60. STAGES IN NEW PRODUCT
DEVELOPMENT
Generation of
Ideas
Idea Screening
Will the Co.
afford to
produce?
Develop a
prototype
Test Market
Full launch
YEAR 11 NOTES 74

61. BENEFITS OF DEVELOPING NEW
PRODUCTS
1. The business will be the first in the market with a
new product[a Unique Selling Point-(USP)-a USP is
the special feature of a product that differentiates it
from the competitor’s product
2. Diversification hence giving the business q wide
range of products to sell.
3. Allows the business to expand into new markets
4. Allows the business to expand into existing markets
YEAR 11 NOTES 75

62. BRAND NAME, BRAND LOYALTY &
BRAND IMAGE
1. Brand Name
 It is the unique name of a product that distinguishes
it from other brands
 Advertising should inform consumers of the features
and benefits of the new brand and persuade them to
buy it
2. Brand Loyalty
 Is when consumers keep buying the same brand
again and again instead of choosing the competitor’s
brand
YEAR 11 NOTES 76

63. BRAND NAME, BRAND LOYALTY &
BRAND IMAGE Cont’d
3. Brand Image
It is the perception given to a product which gives it a
personality of its own and distinguishes it from it’s
competitors’ brands
e.g Coca-Cola brands are sold throughout the world
and the company has an image of producing superior
quality drinks which taste better than it’s rival drinks
i.e Pepsi, Schweppes etc
YEAR 11 NOTES 77

64. BRANDING
 The process involved in creating a unique name and
image for a product in the consumers' mind, mainly
through advertising campaigns.
 It may involve: unique packaging, assures quality,
encourages brand loyalty, creates a brand image, etc.
YEAR 11 NOTES 78

65. PACKAGING
What is a package and its importance…
 Definition: It is the physical container or wrapping for
a product
 Used to protect the product and allow it not to spoil
 It is used for promotion and selling appeal
 Brand image is reinforced by the packaging
Eg. An expensive product will have a luxurious package-often
gold in color- while a low-cost product will have a basic,
simple package with plain colors
 The labels on the package contain information about the
product i.e ingredients, how to use or store it etc
 Makes handling of the product easy.
YEAR 11 NOTES 79

66. The Product Life Cycle
 It describes the stages a product will pass through from introduction,
through its growth until it matures and then finally it declines. It shows
how sales behave as the products gets into the market.
 It shows the amount of sales at different stages of the product life cycle.
 A typical product goes through the following stages:
Development –this is making a prototype that will be tested and market
research is carried out before the product is launched in the market.
1. Introduction- this is launching the product in the market.
Sales will be low at first because customers are not aware.
It is a new product hence no competitor and price skimming can
be used.
No profits because costs have not been recovered.
YEAR 11 NOTES 80

67. 3. Growth- advertising is intense at this stage. More
customers are getting aware of the product hence sales
are increasing rapidly. Prices may reduce as other
competitors are coming into the market. Profits start to
be realized at this stage.
4. Maturity – sales are increasing slowly, competition is
intense and pricing strategy is promotional or
competitive. At this stage, advertising is intense. Profits
are at their highest.
Saturation – sales stabilise at the highest level, no more
increase in sales. Competition is high but no new
competitors. Profits may start to fall as sale are static.
6. Decline – the product loses customer appeal. New
products come to the market. The product is usually
withdrawn from the market when sales are too low.
YEAR 11 NOTES 81

68. Graphical representation of PLC

YEAR 11 NOTES 82

69. Product life cycle extension
 These are the ways used to promote/boost sales at the
maturity or saturation stages. Done to avoid decline of
sales.
 The following strategies may be used:
 Introduce a new variation of the old product.
 Open up to new markets e.g exports
 Make small changes in the products’ design, colour, size,
packaging etc
 Use new advertising strategies to appeal to new market
or remind customers.
 Introduce new, improved version of the old product.
YEAR 11 NOTES 83

70. ASSIGNMENT
 Define the term brand name
 b) Identify two stages of the product life cycle
 b) Identify and explain three costs and benefits when
developing a new product.
 Identify three roles of packaging
YEAR 11 NOTES 84

71.  THE END
YEAR 11 NOTES 85