The document provides an overview of key concepts from a lecture on principles of marketing. It defines marketing and describes the core marketing activities and key elements in a marketing system, including suppliers, companies, competitors, marketing intermediaries, and final consumers. It discusses designing customer-driven marketing strategies through market segmentation, choosing a value proposition, and different marketing management orientations. It also outlines constructing an integrated marketing program using the marketing mix, building profitable customer relationships, and capturing value from customers to create profits and customer equity.

1. NOTES ON PRINCIPLES OF MARKETING
Week: 1
LECTURE 1:
Lecture Synopsis: Definition of Marketing
 DEFINITION OF MARKETING
.
A modernmarketing system
Each party
inthe systemadds
value
Marketingbasicallytalksaboutmanagingmarkettobringaboutprofitable customerrelationships.Itishowevernoteasytocreate such
relationships.Sellersmustsearchforbuyers,identifytheirneeds,designgoodmarketofferings,setpricesforthem,promote them,andstore
and deliverthem. Suchactivitiesasconsumerresearch,productdevelopment,communication,distribution,pricingandservice are core
marketingactivities.
Suppliers
Company
Competitor
s
Marketing
intermediaries
Final
consumers

2. Marketinginnot justdone by sellersare mostpeopleare ledtobelieve,itcanalsobe done by buyers,this isdone throughtheirsearch
for products,interactwithcompaniestoobtaininformationandmake theirpurchases.
The figure above showsthe mainelementsinamarketingsystem.Marketingisnotalwaysasmoothride,butit alsoinvolvesservinga
marketof final customerseveninthe face of ‘aggressive’competitors.The companiesandcompetitors researchthe marketandinteractwith
consumerssotheycan be betterpositionedtounderstandtheirneeds.Thentheycanpackage andsendtheirmarketofferingsandmessagesto
consumers,eitherdirectlyorthroughmarketintermediaries.Itisgoodto note that each partyin the marketingstructure is affectedbymajor
environmental forces(demography,economic,natural,technological,political andsocial/cultural).
Each party alsoadds value forthe nextlevel.The arrowsrepresentrelationshipsthatmustbe developed,maintainedandmanaged.Asa
result,acompany’ssuccessat buildingprofitablerelationshipsdependsnotonlyonitsownactionsbutalso onhowwell the entire system
servesthe needsof final consumers.SierraLeone BottlingCompanyforexamplecanneverbe able toprovide cheapproductsif itssuppliersare
not able andwillingtosupplymerchandiseatlowcost.
 Designinga customer-drivenmarketingstrategy:
Afterfullyunderstandingthe marketplaceandthe targetcustomers,the marketingmanager’s nextjobwill be todesign aneffective customer-
drivenmarketingstrategy,alsoknownasmarketingmanagement;anart andscience of choosingtargetmarketsandbuildingprofitable
relationshipwiththem.The desire of everymarketeristofind,attract,keepandgrow targetcustomersby creating,delivering and
communicatingsuperiorcustomervalue.
To designanattractive and winningmarketingstrategy,the marketingmanagermustanswertwomajorquestions; whatcustomerswillwe serve
(targetmarket)?and howcanweserve thesecustomersbest?
(i) SelectingCustomerstoserve:Everycompanymustfirstdecide the setof people itwill serve,thisisachievedbydividingthe market
intosegments –marketsegmentationandthenselectingwhichsegmentof the markettogo after – target marketing.
(ii) ChoosingaValue Proposition:The companymustalsodecide howitwill serve targetcustomers –whichdifferentwillitcreate and
howwell isitreadyto positionitself inthe marketplace.
(iii) MarketingManagementOrientations:Marketingmanagementalwayswantstodesignstrategiesthatare benton buildingprofitable
relationshipswithtargetconsumers. Butwhatare the guidingprinciplesorphilosophiesof suchmarketingstrategies?Howfar
shouldtheygoin consideringthe interestof the customers,the organization,andthatof the society?Oftenatime,these interests
have conflicted.

3. There are basicallyfive alternative conceptsthroughwhichorganizationsdesignandcarryout theirmarketingstrategies,theyare asfollow;
 The ProductionConcept
 The Product Concept
 The SellingConcept
 The MarketingConceptand
 The Societal MarketingConcept
The ProductionConcept: thisconceptwhichisone of the oldestholdsthatconsumerswill alwaysfavourproductsthatare available andhighly
affordable,asaresult,managementshouldfocusonimprovingproductionanddistributionefficiencyinordertoattract and retainmore
customers.
The Product Concept:This conceptalsoholdsthatconsumerwill favourproductsthatofferthe mostin termsof quality,performance and
innovative features.Goingbythisconcept,producersshouldfocusandstayfocusedonimprovingthe qualityof theirproducts.
The SellingConcept:The sellingconceptisfollowedbymost companies;itstatesthatconsumerswill notbuymuchof a company’sproducts
unlessit’sfullyengagedin sellingandpromotioneffort.
The MarketingConcept: Thisconceptholdsthat organizational goalscanonlybe achievedif the companyhasvastknowledge onthe needsand
wantsof the targetmarketsand doingall itcould todeliverthose marketneedsandwantsbetterthantheircompetitors.
The Societal Marketing Concept:Thisconceptsholdsthat all marketingstrategiesshouldbe gearedtowardsthe deliveringof value tothe target
customersina way that improvesboththe consumer‘s andsociety’swelfare.Inthisdirection,mostbigbusinessesandmarketersare now
preachingthe conceptof sharedvalue,somethingthatrecognizessocietal needsandnotjusteconomicneedsdefine markets.
 Construct an integratedmarketingprogramme that deliverssuperiorvalue
The marketingstrategyof everycompanyshouldoutline whichcustomersitwill serveandhowitwill create value forthem.Nexttocreating
value forcustomers,the marketerwill thencome upwithanintegratedmarketingprogramme thatwill actuallydeliverthe intendedvalue to
the target customers.Suchmarketingprogramme shouldbe able toestablishorbuildagoodcustomerrelationshipbytransformingthe
marketingstrategyintoaction.The marketingprogramme consistsof the firm’smarketingmix;thisisaset of marketingtoolsthatfirmsuse to
implementtheirmarketingstrategies.

4. The MarketingMix
Simplyputthe MarketingMix is a tool usedby businessesandMarketerstohelpdetermine aproduct or brandsoffering.The 4P’shave been
associatedwiththe MarketingMix since theircreationby EdmundJerome McCarthy (February20, 1928 – December3,2015) in1960.
 Product - The Productshouldfitthe taskconsumerswantit for,it shouldworkandit shouldbe whatthe consumersare expectingto
get.
 Place – The productshouldbe available fromwhereyourtargetconsumerfindsiteasiesttoshop.Thismaybe HighStreet,Mail Orderor
the more current optionviae-commerce oranonline shop.
 Price – The Productshouldalwaysbe seenasrepresentinggoodvalue formoney.Thisdoesnotnecessarilymeanitshouldbe the
cheapestavailable;one of the maintenetsof the marketingconceptisthatcustomersare usuallyhappytopay a little more for
somethingthatworksreallywellforthem.
 Promotion – Advertising,PR,SalesPromotion,Personal Sellingand,inmore recenttimes,Social Mediaare all keycommunicationtools
for an organisation.These toolsshouldbe usedtoputacrossthe organisation’smessage tothe correctaudiences inthe mannerthey
wouldmostlike tohear,whetheritbe informativeorappealingtotheiremotions.
In the late 70’s it was widelyacknowledgedbyMarketersthatthe MarketingMix shouldbe updated.Thisledtothe creationof the Extended
MarketingMix in 1981 by Booms& Bitnerwhichadded3 newelementstothe 4 P’sPrinciple.ThisnowallowedtheextendedMarketingMix to
include productsthatare servicesandnot justphysical things.
Extended7 P’s:
 People – All companiesare reliantonthe people whorunthemfromfrontline Salesstaff tothe ManagingDirector.Havingthe right
people isessential because theyare asmucha part of your businessofferingasthe products/servicesyouare offering.
 Processes–The deliveryof yourservice isusuallydonewiththe customerpresentsohowthe service isdeliveredisonce againpartof
whatthe consumerispayingfor.
 Physical Evidence – Almostall servicesincludesome physical elementsevenif the bulkof whatthe consumerispayingforisintangible.
For example ahairsalonwouldprovide theirclientwithacompletedhairdoandaninsurance companywouldgive theircustomerssome

5. formof printedmaterial.Evenif the material isnotphysicallyprinted(inthe case of PDF’s) theyare still receivinga“physical product”by
thisdefinition.
Thoughin place since the 1980’s the 7 P’sare still widelytaughtdue totheirfundamentallogicbeingsoundinthe marketingenvironmentand
marketersabilitiestoadaptthe Marketing Mix to include changesincommunicationssuchassocial media,updatesinthe placeswhichyoucan
sell aproduct/service orcustomersexpectationsinaconstantlychangingcommercial environment.
Is there an 8th P?
In some spheresof thinking,there are 8 P’sinthe MarketingMix. The final Pis ProductivityandQuality.Thiscame fromthe oldServices
MarketingMix and is foldedintothe ExtendedMarketingMix bysome marketerssowhatdoesitmean?
The 8th P of the Marketing Mix:
 Productivity& Quality - ThisP asks“is whatyou’re offeringyourcustomeragooddeal?”Thisis lessaboutyouas a businessimproving
your ownproductivityforcostmanagement,andmore abouthowyourcompanypassesthisontoits customers.
Evenafter31 years (or54 in the case of the original P’s) the MarketingMix isstill verymuchapplicable toamarketer’sdayto daywork.A good
marketerwill learntoadaptthe theoryto fitwithnotonlymoderntimesbuttheirindividual businessmodel.
 Buildprofitable relationships and create customerdelight:
The firstthree stepsinthe marketingprocesscombined,leadstothe fourthandmost importantstepof all:buildingandmanagingprofitable
customerrelationships.
CustomerRelationshipManagement:Customerrelationshipmanagement(CRM) isprobablythe mostimportantconceptof modernmarketing.
It has to dowiththe effective managementof detailedinformationabout individual customersandcarefullymanagingcustomertouch-pointsin
orderto maximize customerloyalty.
Most marketershave howevercavedabroadermeaningforthe CRMconcept,to them;CustomerRelationshipManagementisthe overall
processof buildingandmaintainingprofitable customerrelationshipbydeliveringsuperiorcustomervalue andsatisfaction. Itdealswithall
aspectsof acquiring,keepingandgrowingcustomers.

6. The two mainrelationshipbuildingblocksare;
 CustomerValue
 CustomerSatisfaction
CustomerValue:The majorkeyto buildinglastingcustomerrelationshipistocreate superiorcustomervalue.Attractingandretaining
customersisneveraneasytask. Customersare oftenfacedwithwide range of productsandservicesfromwhich theyare tochoose. Customers
oftenbuy fromfirmsthat offerthe highestcustomer-perceivedvalue.
CustomerSatisfaction: Thistalksabout the product’sperceivedperformanceinrelationsto the buyer’sexpectationsof the product. If the
product’sperformance fallsshortof the expectations,the customerisdissatisfied.Butif itmatchesexpectations,the customerissatisfied.If
performance exceedsexpectations,the customerishighlysatisfiedordelighted.
 Capture value from customers to create profitsand customerequity:The firstfourstepsinthe marketingprocessemphasize building
customerrelationshipsbycreating anddeliveringsuperiorcustomervalue.The fifthandfinal stepinvolvescapturingvalue inreturnin
the form of sales,marketshare andprofits.Bybasicallycreatingsuperiorcustomervalue,the firmhassucceededincreatinghighly
satisfiedcustomerswhowithall thingsremainingthe same canstayloyal andbuy more and more of the firm’sproducts.Thiswill
meangreaterlong-runreturnsforthe firm.
Outcomesof Creating CustomerValue.
 CustomerLoyalty and Retention
 Share of Customers
 CustomerEquity
CustomerLoyalty and Retention:A goodcustomerrelationshipmanagementcreatescustomersatisfaction.Asaresult,asatisfiedcustomer
remainsloyal and talkswell toothersaboutthe companyand itsproducts.
 GrowingShare of Customer:Way beyondsimplyretaininggoodcustomerstocapture customerlifetimevalue, agoodcustomer
relationshipmanagementcanhelpmarketersincrease theirshare of customers – the share theygetof the customer’spurchasing in
theirproductcategories.
CustomerEquity: The ultimate goal of customerrelationshipmanagementistoproduce highcustomerequity.Thisisthe total
combinedcustomerlifetime value of all of the company’scurrentandpotential customers.

7. Week: 3
LECTURE 3:
 The changing MarketingLandscape
-the changingeconomicEnvironment,the digital Age
 THE CHANGING MARKETING LANDSCAPE.
There isa popularlyheldviewthatthe onlypermanentthinginlife is‘change’,toa verylarge extent,thissayingistrue.
As inmanyotherspheres of life,dramaticchangeskeep occurringona dailybasisinthe marketplace.AsRichardLove of HP putit ‘The
pace of change is sorapid that the abilitytochange has nowbecome acompetitive advantage.’Yogi Berra,the legendaryNew York
Yankeescatcherand manageralsosaid,‘The future ain’twhatit usedtobe.’As the marketplace keepschanging,somustthose who
operate init.
Under thistopic,we will examine five majordevelopmentsthathave changedandkeepchangingthe marketplace:
 the changing economicenvironment
 the digital age
 the growth of not-for-profitmarketing
 rapid globalizationand
 the call for more ethics and social responsibility

8. The changing economicenvironment:Asrecentas in2008, the UnitedStatesexperiencedaGreatRecession,a terribleeconomicmeltdown,
the firstof itskindsince the Great Depressioninthe 1930s. The stock marketcrushedand trillionsof dollarsof marketvalue simply
evaporated.The financial crisisleftconsumersshortof bothmoneyandconfidence inthe financial system.
The Recessioncausedmostconsumerstosettheirspendingprioritiesrightandcutdownon theirbuying.Afteryearsof overspending,
consumerswere tightenedtheirpursescutbackon theirspending.
The Digital Age:The explosivegrowthindigital technologyhasfundamentallychangedthe marketplace.Ithaschangedthe waywe live,
think,communicate, shop,share information,accessinformationetc.Thishashada major impacton the waycompaniesbringvaluesto
theircustomers.Be thatas itmay,technologyhasbecome anintegerandnecessarypartof us.
The growth of not-for-profitmarketing:inrecenttimes,the act of marketinghasbecome a majorpart of the strategiesof manynot-for-
profitorganizations,suchas colleges,Universities, hospitals,museums,zoosetc.These not-for-profitsface stiff competitionforsupportand
membership.A soundmarketingstrategycanhelpthemattract not only membershipbutfundsandsupport.
Rapid globalization:Asmarketersare redefiningtheircustomerrelationships,theyare alsotakingafreshlookat the waysinwhichthey
relate withthe broaderworldaroundthem.In the worldtoday,everycompany,large orsmall,istouchedinone wayor the otherby global
competition.
The call for more ethicsand social responsibility:Marketersare alsorapidlyrethinkingtheirrelationshipswithsocial valuesand
responsibilitiesandwiththe veryenvironmentinwhichtheyare operating. Today,marketersare calledupontodevelopsustainableand
environmentallyfriendlymarketingstrategies. Inmostcompanies,corporate ethicsandsocial responsibilityhave becomeahottopic for
discussion.Everycompany’sactioncanaffectcustomerrelationships.Mostcustomersaroundthe worldtodayexpectcompaniestodeliver
value ina sociallyandenvironmentallyresponsible way.

9. Week: 4
LECTURE 4: The Global Market place
Lecture Synopsis: Looking at the global marketing environment,
Deciding whether to go global,
Deciding of which market place to enter,
Deciding how to enter the market
 LOOKING AT THE GLOBAL MARKET ENVIRONMENT
Previously,mostcompaniespaidlittle ornoattentionatall tointernational trade.Managersdidnotneedtolearnotherlanguages,
deal withstrange changingcurrencies,face political aswell aslegaluncertainties,orevenadapttheirproductstodifferentcustomer
needs expectations. Today however with globalization taking its toll on human activities, the situation has changed dramatically.
Most organizations have now taken a global dimension and have gone global.
But before deciding to go global, a company must understand the international marketing environment. That environment have
over the years gone through a great deal of changes creating both new opportunities and problems.
 The International Trade System:
Firmsthatwantto global muststartbyunderstandingthe internationaltrade system.Whensellingtoanothercountry,afirmmay
be faced with series of restrictions. Governments may charge tariffs, taxes on certain imported products in their bid to raise
revenue orprotectdomesticfirms.Mostgovernmentsaroundthe worlduse tariff toforce favourable trade behaviousfromother
nations.

10. Countriesmayalsosetquotasor limitsonthe amountof foreignimportsthattheywill acceptincertainproductscategories.This
is often done to conserve the foreign exchange and protect local industries and employment. Firms may also be faced with
challengesfromexchange controls – thislimitsthe amount of foreignexchange andthe exchange rate againstother currencies.
There could also be some nontariff trade barriers,suchas biasesagainstits bids,restrictive productstandardsorexcessivehost-
country regulations or enforcements.
However, there are still established institutions around the world that can help facilitate easier trade between nations of the
world. Example, World Trade Organization (WTO) and various regional free trade agreements.
-The WorldTrade Organization: The General AgreementonTariffsand Trade (GATT),establishedin1947 and modifiedin 1994,
was designed to promote world trade by reducing tariffs and other international trade barriers. Thisbody was later replaced by
the WorldTrade Organization in1995 andnowcarries outthe functionsonce dedicatedtoGATT.Previously,GATTandnowWTO
members,currentlyconstitutingof 153 nations,have at leastroundsof negotiationstoreassesstrade barriersandestablishnew
rulesfor international trade.The WTOalso has powerto impose international trade sanctionandmediate global trade disputes.
The WTO has so far been very successful, in its first seven round negotiations, it succeeded in reducing the average worldwide
tariff on manufactured goods from 45% to just 5%.
-Regional Free Trade Zone: Certain countries have formed Free Trade Zones or Economic Communities.These are groups of
nations organized to work toward common goals in the regulation of international trade. Such as the Economic Community of
West African States (ECOWAS) - 1975, European Union (EU) – 1957. Both set out to create a single economic zone for their
individual regions byreducingbarriersto the free flowof products,services,finances,andlabouramong membercountriesand
developing policies on trade with member countries.
 The Economic Environment:
The international marketershave the dutyof studyingthe economyof eachcountry.Two basiceconomicfactorsmake a country
attractive as a market: its industrial structure and its income distribution.
INDUSTRIAL STRUCTURE
The country’s industrial structure shapes its product and service needs, income levels, and employment levels. There are four
main types of industrial structures:
 Subsistence economies: In a subsistence economy, the vast majority of the people engage in simple agriculture. They
consume most of their output and barter the rest for simple goods and services. This sort of economy offers very few
market opportunities. Many African countries fall into this category.

11.  Raw material exporting economy: These are rich economies in one or more natural resources but poor in other ways.
Much of their revenue comes from exporting these resources. These countries are also good markets for large
equipment, tools and supplies and trucks.
 Emergingeconomies(industrializingeconomies): Inthissortof economy,fastgrowthinthe manufacturingresultsinrapid
overall economicgrowth.Asmanufacturingincreasesinsuchcountries,thereisalsoanincreasingneedforimportedraw
materials.
 Industrialeconomies: Theyare majorexportersof manufacturedgoods,servicesandinvestmentfunds.Theytrade goods
among themselves and also export them to other types of economies for raw materials and semi-finished goods.
INCOME DISTRIBUTION
This is the second economic factor that attracts a state as a market to international firms.Industrialized nations may have
low,medium,andhigh-income households.Incontrast,countrieswithsubsistence economiesconsistmostlyof households
withverylow familyincomes.Butothercountriesmaystill have householdswitheitherverylowor very highincome.Even
poor or emerging economies may be attractive markets for all kinds of goods. These days, companies in a wide range of
industries are increasingly becoming interested in even low and middle income consumers in emerging economies.
 Political-Legal Environment:
Every country in the world has its own political-legal system,and largely differs from state to state. In considering therefore
whether to do business in a particular country, a company should consider factors such as the country’s attitudes toward
international buying, government bureaucracy, political stability and monetary regulations.
 Cultural Environment:
Each country has its own culture, tradition, norms and taboos. In strategizing for a global marketing venture, companies must
understand how culture affects consumer reactions in each of its world markets. In turn, they must also understand how their
strategies affect local cultures.
 DECIDING WHETHER TO GO GLOBAL
Notall companiesneedtoventureintointernationalmarketstosurvive.Forexample,mostlocal businessesneedtotrade wellonly
in theirlocal marketplaces.Most often,operating domesticallyiseasierandsafer.Operatingwithintheircountries,companiesdo
not need to learn another country’s language and laws. They also do not have to deal with unstable currencies, face political and
legal uncertainties, andredesign theirproductstosuitdifferentcustomerexpectations.However,companiesoperatinginthe global

12. industries,where their strategic positions inspecific markets are affectedstronglyby their overall global positions,must compete
on a regional or worldwide basis to succeed.
Before goingglobal,acompanymustweighseveral risksandanswermanyquestionsaboutitsabilitytooperate inthe global arena;
- Can the company learn to understand the preferences and buyer behavior of consumers in other countries?
- Can it offer competitively attractive products?
- Will it be able to adapt to other countries’ business cultures and deal effectively with foreign nationals?
- Do the company’s managers have the necessary international experience?
- Has management considered the impact of regulations and the political environments of other countries?
 DECIDING WHICH MARKET(S) TO ENTER
Before going abroad, the company should try to define its international marketing objectives and policies. It should decide what
volume of foreign sales it wants. Most companies start small when they go abroad. Some even decide to stay small, viewing
international salesasa small part of theirbusiness.Othercompanieshave biggerplans,however,seeinginternational businessas
equal to or even more important than their domestic business. In deciding which marketsto enter, the company must decide on
the following;
- The company needstodecide onhow manycountriesit wantsto market.Companiesmustbe verycareful not to spread
themselves too thin or expand beyond their capabilities by operating in too many countries too soon.
- The companyneedstodecide onthe typesof countriesto enter.Howattracta countryislargelydependsonthe product,
geographical factors, income and population, political climate, and other considerations.
- After listing possible international markets, the company must carefully evaluate each one.
Possible global marketsshouldbe rankedon several factors,includingmarketsize,marketgrowth,the costof doingbusiness,competitive
advantage, and risk level. This is to be able to determine the potential of each market.
 DECIDING HOW TO ENTER THE MARKET
As long as a company has to sell in a foreign country, it must determine the best mode of entry. Its choices are exporting, joint venturing, and direct
investment.
 Exporting:
The simplest way to enter a foreign market is through exporting. The company may passivelyexport its surpluses from time to
time,orit maymake an active commitmenttoexpandexportstoa particularmarket.Ineithercase,the companyproducesall its
goods in its home country. It may or may not modify them for its export market.
 Joint Venturing:

13. This is the second methodexposedtocompaniesforenteringthe foreignmarket;Joiningwithforeigncompaniestoproduce or
marketproductsor services. Jointventure is differentfromexportinginthat,ina jointventure,the companyjoinswithahostof
country partnersto sell ormarket abroad.It also differsfromdirectinvestmentinthatan associationisformedwithsomeonein
the foreigncountry.There are basicallyfourtypesof jointventures;Licensing,ContractManufacturing,ManagementContracting,
and Joint Ownership.
- Licensing: This is a simple way for a manufacturer to enter the international market. The company enters into an
agreement with a licensee in the foreign market. For a fee or royalty payments, the licensee buys the right to use the
company’s manufacturing process, trademark, patent, trade secret, or other items of value.
- Contract Manufacturing: Another option is contract manufacturing, this is a situation in which the company makes
agreementswithmanufacturers inthe foreignmarketto produce its productsor provide itsservices.The disadvantages
of this type of joint venture are decreased control over the manufacturing process and loss of potential profits on
manufacturing.The benefitshoweverare the chance tostartfaster,withlessrisk,andthe lateropportunityeithertoform
a partnership with or buy out the local manufacturer.
- ManagementContracting:Underthistype of venture,thedomesticfirmprovidesthemanagementknow-howtoaforeign
companythat suppliesthe capital. Orbetterstill,the domesticfirmexportsmanagement services rather than products.
- Joint Ownership: Here, one company joins forces with foreign investors to create a local business in which they share
possessionandcontrol.A companymaybuyaninterestinalocal firm,orthetwopartiesmayformanewbusinessventure.
Sometimes this sort of venture is needed economic and political reasons.
 Direct Investment:
Thisis the biggestformof investmentina foreignmarket.Thishasto do withthe companydevelopingaforeign-basedassembly
or manufacturingfacilities. Fordforexample hasmade several directinvestmentsinmostAsiancountriesoverthe pastdecades.

14. Week: 5
LECTURE 5: Product, Services and Brands
Lecture Synopsis: Definition of Product
Product and services decision
Services Marketing
 PRODUCTS, SERVICES AND BRANDS:
In orderfor marketerstosuccessfullyestablishandmaintainaverygoodcustomerrelationship,amongotherthings,theymustalso
developandmanage productsandbrandsthat connectwithcustomers.Butfirstly,we will take alookatsome keydefinitions;Products,
Servicesand Experiences
 Product: Product couldbe definedasanythingtangible orintangible thatcanbe offeredtoa marketfor attention,acquisition,use or
consumptionthathasthe abilitytosatisfyawantor need.
 Services:Broadlydefined,are aset of productsthat constitute activities,benefits,andevensatisfactionsofferedforsale thatare
essentiallyintangibleanddonot resultinthe ownershipof anything.
 Experiences:experienceshave alwaysbeenaveryimportantpartof marketingforthe most companiesaroundthe world.Today,itis
importantto note thatall mannerof firmsare recastingtheirtraditional goodsandservicestocreate experiences.Companiesthat
marketexperiences have realizedthatcustomersare reallybuyingwhatthose offerswill doforthem.A recentBMW ad puts itthis
way:‘We realizedalongtime agothat whatyou make people feel isjustasimportantaswhat youmake.’
 Levelsof Product and Services

15. Productplannersneedtothinkaboutproductsand servicesonthree levels.Eachlevel of productaddsmore customervalues.The mostbasic
level isthe core customervalue,anditaddressesthe question:What isthe buyerreallybuying?Anytimeamarketerwantstodesignaproduct,
theyshouldfirstdefinethe core,orproblem-solvingbenefitsorservicesthatthe productissetto renderinrelationtowhatthe target
consumersare seeking.
At the secondlevel,productplannersmustturnthe core benefitintoanactual product.Theyneedat thisstage to developproductandservice
features,adesign,aqualitylevel,abrandname and packaging.
Lastly,productplannersmustbuildanaugmentedproductaroundthe core benefitandactual productby offeringadditional customerservices
and benefits. Forexample,the iPadismore thanjusta digital device,itprovidescustomerswithacomplete connectivitysolutions.
In a nut shell,whendevelopingaproduct,marketersmustfirstidentifythe core customervalue thatconsumersseekfromthe product.Then
designthe actual product,and finallyfindwaystoaugmentittocreate thiscustomervalue andthe most satisfyingbrandexperience.
Product and Service Classification
Productsare broadlyclassifiedintotwomaincategories; ConsumerandIndustrial Products.
ConsumerProducts: Theyare those goodsand servicesthatare boughtby final consumersforpersonal use orconsumption.
Industrial Products: these are goodsand servicesboughtbyindividuals and/ororganizations forfurtherprocessingoruse inconductinga
business.
 PRODUCT AND SERVICE DECISIONS
Marketershave the responsibilityof makingdecisionswhenitcomestoproductand service inthe industryandsuchdecisions are made atthree
basiclevels;
 Individual product and service decision
 Product line decision
 Product mix decision
Individual Product and Service Decision:Thisis basicallywithimportantdecisionstakeninthe developmentandmarketingof individual
productsand services.Itrangesfromdecisionabout productattribute,branding, packaging, labelingrightthroughto product support services.

16. . Product and Service Attributes:Developingaproductlargelyinvolvestakingcrucial decisiononthe benefitsthatproductwill offerorthe
problemsitissetto solve.Suchbenefitsare communicatedbythe attributesof the product,suchas quality,features and style and design.
i. Product quality:Thisisone major tool inthe handsof the marketer.Qualityaffectsproductorservice performance,itistherefore
closelylinkedtocustomervalue andsatisfaction.Siemensdefinesqualityas ‘qualityiswhenourcustomerscome backandour
productsdon’t.’
ii. Product Features: A product can be offeredwithvaryingfeatures. Featuresare acompetitive tool of differentiatingthe company’s
productsfrom those of itscompetitors.A companycan be able to decide onwhatand whatfeaturestoadd on itsproductsby
conductinga regularsurveyamongitscustomersandsuch questionsas;howdoyou like the product?Whichspecificfeaturesdo
youlike moston the product?Whichfeaturescouldwe addto improve the product? Couldbe putto them,answerstosuch
questionscouldprovidethe companywithrichlistof productfeatures ideas.
iii. Product Style andDesign: Thisisanotherway bywhichmarketerscan addcustomervaluestotheirproductto distinguishthem
fromthose of theircompetitorsandattractcustomers.Style anddesignare howeverslightlydifferent,whereasstyle describesthe
appearance of a product.It can be eye catching;a sensational stylemaygrabattentionandproduce pleasingaesthetics,butdoes
not necessarilymake the productperformbetter.Designismore thanskin deep;itgoestothe veryheartof the product.A good
designaddsto the product’susefulnessaswell astoitslooks.
. Product Branding: One of the most outstandingskillsof professional marketingistheirabilitytodesignandmanage abrand.Brand isa name,
term,sign,symbol,ordesign,ora combinationof all these,thatidentifiesthe productsservicesof one company,sellerorgroupof sellersand
differentiatesthemfromthose of competitors.
. Product Packaging: Packagingsimplymeansdesigningthe containerorwrapperforthe product. The major ideabehindpackagingwastohold
and protectthe product.This has howeverchangedoverthe yearsaspackaginghas become animportantmarketingtool aswell.Asone
packagingexpertputit;‘Noteveryconsumerseesabrand’sadvertisingorisexposedtothe excitingsocial mediathatyour brandis doing.Butall
of the consumerswhobuyyourproductsdo interactwith yourhumble package.’
Companieshave largelybecome aware of the powerof goodpackagingtocreate immediate consumerrecognitionof abrand.
.Product Labeling:This range fromsimple tagsattachedto productsto complex graphicsthatare part of the packaging.Labelingperforms
several functionsonaproduct.At least,the label identifiesthe productorbrand.Labelsmightalsodescribe several thingsaboutthe product –
whomade it, itscontents,howitisto be usedandhow touse itsafe.

17. . Product Support Services:Thisalsoknownas customerservice isanotherelementof productstrategy.A company’sofferusuallyconstitutes
some supportservices,whichcanbe incorporatedasminoror major part of the total offering. Supportservicesmaysuchhelptocustomersas,
droppingordersat theirhomes,cleaninguptheircarsas theyshopin yourstore,helpthemcarry theirluggage aftershop, etc.
Product line decisions:Besidesdecidingwhattoproduce as a company,productstrategyalsocallsfor buildingaproductline.A ProductLine isa
range of similarorcloselyrelatedproductsproducedbythe same company,functioninasimilarmanner,soldtothe same customergroups,
theyare marketedthroughthe same typesoutletsorfall withinagivenprice ranges. Forexample,the SierraLeone BottlingCompanyproduces
wide range of softdrinks.
Product mix decisions:Anorganizationwithseveral productlinesissaidtohave a Product Mix.A ProductMix (ProductPortfolio) istherefore
made up of all the productline anditemsthata particularselleroffersforsale.
Exercise One:Please think of a company within Sierra Leone that has a Product Mix.
 SERVICES MARKETING
In recentyears,serviceshave undergone adramaticincrease andare nowresponsibleforawhopping65% of the US GDP forexample.Service
industriesvaryalot.Governmentsaroundthe worldforexample renderservicesthroughcourts,employment services,hospitals,military
services,policeandfire departments,etc.Private not-for-profitorganizationsofferservicesthroughcharities,Churches,Universities,Colleges,
Foundations,etc.BusinessOrganizationsdoitthroughairlines,hotels,insurance companies,etc.
The Nature and Characteristics ofa Service:
In designingamarketingprogramme companiesmustconsiderfourbasiccharacteristicsof service:intangibility,inseparability,variability,and
perishability.
 Service Intangibility:thissimplymeansthatservice cannotbe perceivedbyanyof the five senses,ie itcannotbe seen,tasted,heard,
felt,orsmelledbefore theyare bought.However,toreduce the levelof uncertainty,buyusuallylookforsignals of servicequality.They
oftendrawconclusionsaboutqualityfromthe place,people,price,equipmentandcommunicationthattheycansee.Asa result,the
service providerhasthe taskof makingthe service tangible inone ormore waysand sendsthe rightsignal aboutthe quality of the
service.
 Service Inseparability:Thismeansthatyou cannotseparate servicesfrom theirproviders,whetherthe service providersare people or
machines.

18.  Service Variability:Thismeansthat the qualityof a particularservice dependsonwhoprovidesit,when,where andhowitisprovided.
 Service Perishability:Thismeansthatservicescannotbe storedforlatersale or use.
Marketing Strategiesfor service Firms:
Like manufacturingcompanies,service firmsalsouse marketingstrategiestopositionthemselveswellinthe marketplace.Mostoften,theydoit
throughtraditional marketingmix activities.However,becauseservicesdifferfromtangible products,theyoftenrequire additional marketing
approaches.
 The Service ProfitChain:
In the service business,the front-line service employees andthe customerofteninteracttoco-create the service.However,sucheffective
interactionlargelydependsonthe skillsof the front-line service employeesandthe supportprocessesbackingthe employees.Therefore,
mostservice companiesfocustheir attentionsonboththeiremployee andtheircustomer.Theybasicallyunderstandthe service profitchain
whichservesasa linkbetweenthe service firmprofitsandwithemployeeandcustomersatisfaction.The service profitchainconsistsof five
linkswitheachpreviouslinkleadingtoa newone:
 Internal Service Quality: Superioremployee selectionandtraining,aconducive workenvironment,andstrongsupportforthose
dealingdirectlywithcustomers. Thisleadsto…
 Satisfiedand Productive Service Employees:more satisfied,loyal andhardworkingemployees.Thisresultsin….
 GreaterService Value:More effective andefficientcustomervalue creationandservicedelivery,whichresultsin…
 Satisfiedand Loyal customers: a satisfiedcustomermayremain loyal,make repeatedpurchasesandevenreferothercustomersto
the service,thiscanresultin…
 Healthy Service profitsand growth: superiorservice firmperformance.
Service marketingrequiresmuchmore thanjustthe traditional external marketingusingthe 4Ps,italsorequireswhatisknownas Internal
Marketing.Internal marketingrequiresthatservice firmsmustorientate andmotivate itscustomer-contactemployeesandsupportingservice
people toworkas a teamto provide customersatisfaction.Marketersmustgeteveryoneinthe firmtobe customercentered.
Interactive Marketing whichalsomeansthatservice qualitylargelydependsonthe quality of buyer-sellerinteractionduringthe service
encounterisalsoa veryimportantservice marketingtool tobe engaged.

19. In today’smarketplace,ascompetitionandcostsincrease,andasproductivityandqualitydecrease, thereisanincreasingneedforservice
marketingsophisticationisneeded.Service companies are facedwiththree majormarketingtasks:Theywantto increase their service
differentiation,service quality,andservice productivity.
(i) Managing Service Differentiation:Inthe currentprevailingmarketplacewith intense price competition,service marketersoften
complainaboutthe difficulttaskof differentiatingtheirservicesfromthose of competitors.Toan extentthatevencustomersfindit
difficulttodifferentiatebetweenservicesprovidedbydifferentservice provider,infactmostof themcare lessaboutthe provider
than theydothe price.The solutiontosuchprice competitionis todevelopadifferentiatedoffer,delivery,andimage.
(ii) Managing Service Quality: Ina tensedcompetitivemarketplace like ourstoday,aservice firmcandifferentiateitself bydelivering
consistentlyhigherqualitythanitscompetitors canoffer.
(iii) Managing Service Productivity:withtheirhighrisingcost,service firmsare underhighpressure toincrease serviceproductivity.And
thiscan be done inseveral ways.Constanttraininganddevelopment(T&D) of employeesorhire newones whowill workharderand
more skillfully.Orbetterstill improve the quantityof theirservice bygivingupsome quality.

20. WEEK: 6
LECTURE 6:
 PRICING:UNDERSTANDING AND CAPTURING CUSTOMER VALUE
-Definition of price, Major Price strategies, Factors affecting pricing decision
WHAT IS A PRICE?
Price isbasicallythe amountof moneychargedfora productor service.Ina broadersense however,we candefine price asthe sumtotal of all
the valuesa customerisable,willingandreadytogive upto gain the benefitsof havingorusingaproduct or service.Price hasalwaysbeenthe
majorfactor affectingthe buyerchoice.Butinthe recentpast,non-price factorshave gainedincreasing importance.
Of all the marketingmix,price isthe onlyone thatproducesrevenue andit’sthe mostflexible,all othersrepresentcosts. Atthe same time,
pricingisone of the majorproblemsfacedbymarketingexecutivesandsadto saythat many companiesdonothandle pricingwell.
 Major Pricing Strategies:Pricesof commoditiesandservicesare oftensetbetween twoextremes;eithertoolowto produce a profitor
too highto produce anydemand.Insettinga price ceilinghowever,customer’sperceptionof the product’svalue formsthe basis. Onthe
one hand,whencustomersperceivethatthe product’sprice isgreaterthan itsvalue,theymaywithdrawentirelyfrombuyingit.Onthe
otherhand,if the company’ssetprice isbelowitscost,the company’sprofitwill suffer.Therefore,insettingitsprice betweenthese two
extremes,the companymustconsiderthe followinginternal aswell asexternal factors;competitors’strategiesandprices,the overall
marketingstrategyandmix,andthe nature of the marketand demand.
As a resulttherefore,there are three majorpricingstrategies:customervalue-basedpricing,cost-basedpricingandcompetition-based
pricing.

21. (ii) CustomerValue-BasedPricing:The consumerisalwaysthe lastpersontodecide whetheraproduct’sprice isright.Thusin
makingdecisionaboutpricing,customervalue mustbe stronglyconsidered.Anytime,acustomerbuys a product,they
exchange somethingof value (price) togetsomethingof value (thebenefitsof havingorusingthe product).Effective
customer-orientationpricingtherefore involvesunderstandinghowmuchvalue consumersplace onthe benefitsthey
receive fromthe productandsettinga price that capturesthat value.
(iii) Cost-BasedPricing: Thisinvolvessettingpricesbasedonthe costof production,distributionanda fairrate of returnfor its
effortandrisks.For some companies,their costof productionisoftenanimportantelementinitspricingstrategy.
Companieswithlowercostof production,oftensetlowerpricesthatresultinsmallermarginsbutgreatersalesandprofits.
There are twomajor typesof cost; fixedandvariable cost.
- FixedCost: A company’sfixedcosts,alsoknownasoverheadcostsare the costs that donot change withchange in
productionorsaleslevel.Forinstant,regardlessof acompany’soutput,itmustpay bills,interestrate,salariesetc.
- Variable Cost: These sortsof costsvary directlywiththe levelof production.Theyare calledvariablesbecause the total
varieswiththe numberof unitsproduced.These twocombinedisknownasthe total cost at everylevel of production.
(iv) Competition-BasedPricing: Thisbasicallyinvolvessettingupaprice basedon competitor’sstrategies,costs,prices,and
marketofferings.Here,consumersbase theirjudgmentsof aproduct’svalue onthe pricesthat competitorscharge for
similarproducts.
In assessingacompetitor’spricingstrategies,the companyshouldaskseveral questions.Firstly,howdoesthe company’s
marketofferingcompare withcompetitors’offeringsintermsof customervalue?If consumersperceive thatthe company’s
productor service providesgreatervalue,the companycancharge a higherprice.If consumersperceive lessvaluerelative
to competitors’products,the companymusteithercharge alowerprice orchange customerperceptionstojustifyahigher
price.Secondly,howstrongare currentcompetitorsandwhatare theircurrentpricingstrategies?If the companyisfaced
witha host of smallercompetitorscharginghigherpricesrelative tothe value theydeliver,itmightcharge lowerpricesto
drive weakercompetitorsfromthe market.Inthe similarvein,if the marketisdominatedbylarger,lower-price competitors,
the companymay decide totargetunservedmarketnicheswithvalue addedproductsathigherprices.
FACTORS AFFECTING PRICE DECISIONS.

22. Factor affectingprice decisionscanbe broadly dividedintoInternal andExternal factors. Internal Factors affectingprice decisioninclude the
company’soverall marketingstrategy,objectives,andmarketingmix,aswellasotherorganizational considerations. External Factorsinclude the
nature of the marketand demandandotherenvironmental factors.
- Overall marketing strategy, objectives,andmarketing mix
Price isonlyone elementof the company’sbroadermarketingstrategy. Therefore,before settingupanyprice,the companymustdecide onits
overall marketingstrategyforthe productorservice.
There are timeswhenthe company’soverall marketingstrategyisestablishedaroundprice andvalue history.Forinstance,if acompanyselects
a particulartarget marketand positioningverycarefully, thenitsmarketingmix includingprice,willbe fairlystraightforward.Pricingcanplaykey
role inhelpingafirmaccomplishitsobjectivesatmanylevels.A firm forexample cansetpricestoretainexistingcustomersandattractnew
ones.Itcan evensetpriceslowtopreventcompetitorsfromenteringthe marketorsetit at competitors’ level tostabilize the market.Itcan set
price to keepthe loyaltyandsupportof resellersandtopreventoravoidgovernmentintervention.Firmscanalsoset price forcreate excitement
for newproductsand/orbrands.Or a particularproduct can be pricedto helpthe salesof otherproductsinthe company’sline.
Price decisiontherefore shouldbe properlycoordinatedwithproductdesign,distribution,andpromotiondecisiontoforma consistentand
effectiveintegratedmarketingmix programme.
-Organizational Considerations
At organizational level,managementshoulddecide whosetsprices.Companieshandle pricinginvariousways.Insmallerfirms,pricesare often
setat topmanagementlevelsinsteadof bythe marketingorsalesdepartments.Inlarge companies,pricinginhandledbydivisional orproduct
managers. Inthe industrial market,salespeoplemaybe allowedtonegotiate withcustomerwithincertainprice ranges,butevenso,top
managementsetsthe pricingobjectivesandpolicies,andoftenapprovesthe pricesproposedbylower-level managementorsalespeople.
-The Market and Demand
As statedearlier,goodpricingbeginswithaverygoodunderstandingof howcustomers’perceptionsof value affectthe pricestheyare willingto
pay.Both consumerandindustrial buyersbalance the price of aproductsor service againstthe benefitsof owningit.Therefore,beforesettinga
price,the marketermusthave a properunderstandingof the relationshipbetweenprice anddemandforcompany’sproduct.
Belowisan analysisof the price-demandrelationshipandhowitvariesfordifferenttypesof markets.

23. Pricingin Different Types ofMarkets
The level of freedom thatsellershave overpricingvariesaspermarket.Economistsrecognize fourtypesof marketswitheachpresentinga
differentapricingchallenge.(i) Underpure competition, (ii) Undermonopolisticcompetition(iii) Underoligopolisticcompetition(iv)Underpure
monopoly.
(i) Underpure competition:Thismarketconsistsof manybuyersand sellerswhotrade inauniformcommodity,suchassugar,
wheat,copper,orfinancial security.Inthissortof market,no single buyerorsellerhasmucheffectonthe goingmarket
price.Also,inthissortof market,marketingresearch,productdevelopment,pricing,advertising,andsalespromotionplay
little ornorole.Therefore,sellersdonotspend muchresource onmarketingstrategy.
(ii) UnderMonopolisticCompetition:The marketismade up of many buyersaswell assellerswhotrade overa range of prices
rather thana single marketprice.Differentpricesare oftensetupinthe marketbecause sellerscandifferentiate theiroffers
to buyers.Because there are series of competitors, eachfirminthe marketplace is lessaffectedbycompetitors’pricing
strategiesthantheywouldinanoligopolisticmarket. Sellerstryhardto developdifferentiatedoffersfordifferentcustomer
segmentsand,inadditiontoprice,freelyuse branding,advertisingandpersonal sellingtosettheiroffersapart.
(iii) UnderOligopolisticCompetition:Here the marketismade upof justa fewlarge sellers.Forinstant,onlytwocompanies
(Airtel andAfricel) control over80%of the SierraLeone mobile networkservice providermarket.Becausethere are veryfew
sellersinthismarket,eachsellerisalertandveryresponsivetocompetitors’pricingstrategiesandmarketingmoves.
(iv) Undera Pure Monopoly: Thismarketisbasicallydominatedbyasingle seller.Thissingle sellermaybe agovernment
monopoly(EDSA,SLPOST),aprivate regulatedmonopoly(supersport),ora private unregulatedmonopoly.Ineachof these
cases,pricingishandleddifferently.
An analysisofthe Price-DemandRelationship
Each time a companymakesany change in itsprices,itwill leadtoa differentlevel of demand.The relationshipbetweenthe price
changedand the resultingdemandlevel isshowninthe demandcurve below.

24. Price 𝑃2 𝑃12
𝑃1 𝑃11
𝑄2 𝑄1 𝑄12 𝑄11
Quantitydemandedperperiod Quantitydemandedper period
A. Inelasticdemand B. Elastic demand
The above demandcurve showsthe numberof unitsthe marketwill buyina givenperiodatdifferentpricesthatmightbe changed.Invery
normal situations,demandandprice are inverselyrelated,ie,the higherthe price,the lowerthe quantitydemanded.Therefore,the company
wouldsell lessif itraiseditsprice from 𝑃1to𝑃2. In short,consumerswithlimitedresource willprobablybuylessof somethingif itsprice istoo
high.
A goodunderstandingof abrand’sprice-demandcurve isverycrucial togoodpricingdecisions.
Price Elasticity of Demand
Lookingat the two demandcurvesabove,infigure A,aprice shift(increase) from𝑃1to𝑃2 leadstoa relativelysmalldropindemandfrom 𝑄1to
𝑄2. In figure B,however,the same price increase leadstoa large dropin demandfrom𝑄1to 𝑄2. If demand hardlychangeswithasmall change in
price, we say thatthe demandisinelastic.If onthe otherhand,the demandchangesgreatly,inthatcase the demandinelastic.The price
elasticityof demandisgiveninthe followingformula:
Price elasticityof demand=
%𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑑𝑒𝑚𝑎𝑛𝑑𝑒𝑑
%𝑐ℎ𝑎𝑛𝑔𝑒𝑖𝑛 𝑝𝑟𝑖𝑐𝑒
-The Economy
The economicconditionscanhave a verystrongimpact onthe firm’spricingstrategies.Economicfactorlike growthorrecession,inflation,and
interestratesaffectpricingdecisionsbecause theyaffectconsumerspending,consumerperceptionsof the product’sprice andvalue,andthe
company’scostsof producingandselling the product.
-OtherExternal Factors

25. Beyondthe marketandthe economy,the companymustconsiderseveralotherfactorsinitsenvironmentwhensettingprices. The firmmustbe
able to knowwhicheffectitspriceswillhave onotherpartiesinitsenvironment.Howwillresellersreacttovariousprices?Companiesshould
therefore setpricesthatgive resellersafairprofit,encourage theirsupport,andhelpthemtosell the producteffectively.