MNM1503 - INTRODUCTION TO MARKETING - 2016-S1
TOPIC 1: INTRODUCTION TO MARKETING TOPIC 5: THE MARKETING MIX
Study Unit 1: The Nature of Marketing Study Unit 6: Product Decisions
1.1. Definition of marketing 6.1 The Product Concept
1.2. Gaps between business and its customers 6.2 Classifying Products and Services
1.3. Marketing activities to bridge gaps 6.3 Product Mix and Product Line
1.4. The place of the marketing function on the 6.4 Branding, Packaging and Labelling
organisation 6.5 Developing New Products
1.5. Management tasks in marketing 6.6 The Product Life Cycle
1.6. Evolution of the marketing concept
1.7. The marketing Concept Study Unit 7: Marketing Communication Decisions
7.1 The Communication process
TOPIC 2: THE MARKETING ENVIRONMENT 7.2 Integrated Marketing Solutions
Study Unit 2: The Modern Marketing Environment of 7.3 Promotional Mix Elements
Business 7.4 Personal Selling
2.1. Components of the marketing environment 7.5 Sales Promotion
2.2. Variables in the microenvironment 7.6 Direct Marketing
2.3. Variables in the market environment
2.4. Variables in the macro environment Study Unit 8: Distribution Decisions
2.5. SWOT analysis 8.1 Distribution and its interaction with the
marketing instruments.
TOPIC 3: MARKETING INFORMATION AND MARKETING 8.2 The four basic distribution channels
RESEARCH 8.3 Franchising
Study Unit 3: Marketing Information 8.4 Factors determining the selection of a
3.1. The need for information distribution channel
3.2. Information management 8.5 Distribution management
Study Unit 4: Marketing Research Study Unit 9: Price Decisions
4.1. Marketing research 9.1 The Nature of Pricing
4.2. The marketing research process 9.2 Identifying pricing constraints
9.3 Identifying pricing objectives
TOPIC 4: MARKET SEGMENTATION 9.4 Estimating demand, supply and revenue
Study Unit 5: Segmenting the Consumer Market 9.5 Determining the cost, value and profit
5.1. Consumer behaviour relationship
5.2. Marketing segmentation, targeting and 9.6 Setting an approximate price level
positioning 9.7 Setting the listed or quoted price
5.3. Basis for segmenting consumer markets 9.8 Making special adjustments
5.4. Market for segmenting consumer markets
5.5. Criteria for the effective targeting of market
segments
5.6 Product Positioning
H.Crassas – 2016 – MNM1502 – Introduction to Marketing Page 1
,STUDY UNIT 1: THE NATURE OF MARKETING
1.1 DEFINITION OF MARKETING
Marketing can be defined as the process of planning and executing the conception, pricing, promotion and distribution of
ideas, goods and services to create exchanges that satisfy individual and organizational goals.
Marketing is therefore about:
• anticipating and satisfying consumer needs;
• creating a mutually beneficial exchange process; and
• Doing so profitably and more effectively than competitors by means of efficient managerial processes.
Exchange and Marketing
Exchange refers to all the activities that relate to people giving something up in order to receive something they would
rather have. It is the act of giving something up in order to gain something else. Exchange does not necessarily require
money.
In order for exchange to take place, the following five conditions should exist:
1. At least two parties must be part of the process.
2. Each party must have something of value that the other party wants.
3. Each party must be able to communicate and deliver the goods and services to the other party.
4. Each party must be free to accept or reject the other's offer.
5. There must be a willingness to deal with each other.
1.2 GAPS BETWEEN BUSINESS AND ITS CUSTOMERS
The gaps as indicated in the marketing process are in essence the interval between the needs of the consumer and the end
product to satisfy those needs. In the process of satisfying customer needs, other gaps also need to be filled. Gaps in the
marketing process are caused because the place where a product is produced is not necessarily the place where it is
consumed
There are seven types of gaps:
1. Space gap - There is a geographical space (distance) exists between the manufacturer and the consumer.
2. Time gap - Seasonal fruit that can only be grown and harvested in the summer months. To be available the whole
year, distributors have to keep large numbers in storage, or the fruit needs to be processed and canned.
3. Information gap - In order for consumers to be able to buy or use a product or service, they need to know about it.
4. Ownership gap - Once the consumer has paid for a new product, the ownership gap is bridged. For large purchases
the consumer may require finance from a bank in order to become the owner.
5. Value gap - The seller and buyer must agree about an acceptable exchange rate or price, this implies that the buyer
and seller do not attach the same value to the product.
6. Quantity Gap – Based on quantity available and demanded from suppliers to wholesalers to markets to public.
7. Assortment Gap – The variety of products available to consumers.
1.3 MARKETING ACTIVITIES TO BRIDGE GAPS
Marketing activities can be defined as those activities used to transfer the market offering to the buyer. The activities
intended to bridge the gap between buyer and seller usually involve intermediaries, of which there are three main kinds:
1. Middlemen - Are those businesses that bring the producer and user together in the marketing channel.
2. Sales intermediaries - Are agents who do not take title of products they sell. They provide services to facilitate the
sales process, for which they are paid.
3. Auxiliary enterprises - Are not directly involved in the transfer of title but provide support services to facilitate the
selling process.
H.Crassas – 2016 – MNM1502 – Introduction to Marketing Page 2
,Marketing activities can be grouped into three categories:
1. Primary activities - or most basic marketing activity is that of transport. The main aim or focus of transport is to
ensure that the product is delivered to the consumer in the quickest and safest way possible.
2. Auxiliary activities - refer to those additional activities that are required in the marketing process, and include the
following:
a. Sourcing and supplying information - The seller must know who and where potential buyers are. This
information can be obtained by conducting marketing research.
b. Standardization and grading - To close the gap between seller and buyer, manufactured products must be
designed to conform to specific norms or standards. The method of standardization and grading facilitates
in the buying process makes it easier for the buyer to distinguish between varieties of products available.
c. Storage - An activity that closes the time gap. The seasonal aspect of agricultural products necessitates
storage to ensure supply throughout the year.
d. Financing - Costs are incurred in the transfer of products and services from sellers to buyers. These costs
must be financed, usually by banks and other financial institutions.
e. Risk taking - The owner of the product is exposed to the risk of loss or damage, and can take out insurance
as a form of protection against risks such as arson or theft.
3. Exchange activities - are buying and selling. Ownership is transferred from one person to the other. Buying
activities are not regarded as a marketing task, but rather as the responsibility of the purchasing department.
Selling is an important task of the marketing department.
1.4 THE PLACE OF THE MARKETING FUNCTION ON THE ORGANISATION
General Manager
Operations Human Financial Purchasing Information Marketing Public
Management Resources Management Management Management Management Relations
The functions of these departments are as follows:
• The Operations Function - comprises the physical utilization of raw materials and their conversion into
manufactured materials and finished products, and is usually performed in a factory.
• The Human Resources (HR) Function - involves the acquisition, training, utilization and retention of competent
personnel.
• The Financial Function - includes the acquisition, utilization and control of the funds necessary for running the
business.
• The Purchasing Function - ensures that the materials necessary for production are bought at the right places, at
the right times, in the right quantities and at the right prices.
• The Public Relations Function - maintains and cultivates a favorable and objective image of the organisation
among those whose opinion is important to the achievement of the business objectives.
• The Information Function - makes available internal information for planning and control.
• The Marketing Function - generates income from sales, and is responsible for managing the marketing process.
• General Management - includes the activities of persons in managerial positions. These persons in top, middle and
lower management have to plan, organize, lead and control the organisation as a whole. The general manager is at
the head of the management team.
H.Crassas – 2016 – MNM1502 – Introduction to Marketing Page 3
, 1.5 MANAGEMENT TASKS IN MARKETING
The management task consists of a continuous process of planning, organizing, leading and controlling marketing activities.
Marketing management:
• Identifies opportunities and threats in the marketing environment;
• Identifies those opportunities which can be used in terms of internal strengths and weaknesses;
• Compiles marketing data;
• Chooses a specific target market;
• Decides on the products to be produced to satisfy consumer needs;
• Decides on the selling price of the product to attain the objective of profitability;
• Decides on specific distribution channels;
• Decides on marketing communication methods whereby consumers are informed, reminded and persuaded;
• Decides on the selection, training, remuneration and motivation of marketing personnel;
• Organizes and leads activities of the marketing department; and
• Controls the marketing process.
These responsibilities are part of the three management tasks which are summarized in the figure below.
Planning Implementation Control / Evaluation
• Do a SWOT analysis • Organize, control and • Set evaluation criteria
• Set objectives coordinate and standards
• Choose Marketing • Provide leadership
instrument
• Obtain resources
Planning
Planning by marketing management entails examining and choosing between various ways of using marketing
opportunities, countering marketing threats, and achieving marketing objectives.
• Adaptive planning - is a framework for organizing information, analysis, issues and opinions that form part of
strategic decision making. An assessment is done to identify the internal and external factors and then to
conceptualize creative and strategic solutions to address these factors. Marketing decisions thus begin with the
identification and evaluation of marketing opportunities and threats, and internal strengths and weaknesses.
• Contingency planning - Contingency planning is a plan devised for an outcome other than the expected plan.
Contingency planning therefore entails the development of plans to provide an alternative to the main plan in the
event that a dubious, but possible, external factor impacts on the original plan. The contingency plan deals not with
unforeseen events, but with events that were foreseen but considered unlikely to occur.
Organizing
Organizing and coordinating call for the creation of an organizational structure best suited to the implementation of the
marketing decisions to achieve marketing objectives. Marketing activities are grouped rationally, and individual divisions
and managers are tasked with carrying them out. The levels of authority, areas of responsibility, lines of communication
and methods of coordination between the divisions and individuals are determined.
H.Crassas – 2016 – MNM1502 – Introduction to Marketing Page 4
TOPIC 1: INTRODUCTION TO MARKETING TOPIC 5: THE MARKETING MIX
Study Unit 1: The Nature of Marketing Study Unit 6: Product Decisions
1.1. Definition of marketing 6.1 The Product Concept
1.2. Gaps between business and its customers 6.2 Classifying Products and Services
1.3. Marketing activities to bridge gaps 6.3 Product Mix and Product Line
1.4. The place of the marketing function on the 6.4 Branding, Packaging and Labelling
organisation 6.5 Developing New Products
1.5. Management tasks in marketing 6.6 The Product Life Cycle
1.6. Evolution of the marketing concept
1.7. The marketing Concept Study Unit 7: Marketing Communication Decisions
7.1 The Communication process
TOPIC 2: THE MARKETING ENVIRONMENT 7.2 Integrated Marketing Solutions
Study Unit 2: The Modern Marketing Environment of 7.3 Promotional Mix Elements
Business 7.4 Personal Selling
2.1. Components of the marketing environment 7.5 Sales Promotion
2.2. Variables in the microenvironment 7.6 Direct Marketing
2.3. Variables in the market environment
2.4. Variables in the macro environment Study Unit 8: Distribution Decisions
2.5. SWOT analysis 8.1 Distribution and its interaction with the
marketing instruments.
TOPIC 3: MARKETING INFORMATION AND MARKETING 8.2 The four basic distribution channels
RESEARCH 8.3 Franchising
Study Unit 3: Marketing Information 8.4 Factors determining the selection of a
3.1. The need for information distribution channel
3.2. Information management 8.5 Distribution management
Study Unit 4: Marketing Research Study Unit 9: Price Decisions
4.1. Marketing research 9.1 The Nature of Pricing
4.2. The marketing research process 9.2 Identifying pricing constraints
9.3 Identifying pricing objectives
TOPIC 4: MARKET SEGMENTATION 9.4 Estimating demand, supply and revenue
Study Unit 5: Segmenting the Consumer Market 9.5 Determining the cost, value and profit
5.1. Consumer behaviour relationship
5.2. Marketing segmentation, targeting and 9.6 Setting an approximate price level
positioning 9.7 Setting the listed or quoted price
5.3. Basis for segmenting consumer markets 9.8 Making special adjustments
5.4. Market for segmenting consumer markets
5.5. Criteria for the effective targeting of market
segments
5.6 Product Positioning
H.Crassas – 2016 – MNM1502 – Introduction to Marketing Page 1
,STUDY UNIT 1: THE NATURE OF MARKETING
1.1 DEFINITION OF MARKETING
Marketing can be defined as the process of planning and executing the conception, pricing, promotion and distribution of
ideas, goods and services to create exchanges that satisfy individual and organizational goals.
Marketing is therefore about:
• anticipating and satisfying consumer needs;
• creating a mutually beneficial exchange process; and
• Doing so profitably and more effectively than competitors by means of efficient managerial processes.
Exchange and Marketing
Exchange refers to all the activities that relate to people giving something up in order to receive something they would
rather have. It is the act of giving something up in order to gain something else. Exchange does not necessarily require
money.
In order for exchange to take place, the following five conditions should exist:
1. At least two parties must be part of the process.
2. Each party must have something of value that the other party wants.
3. Each party must be able to communicate and deliver the goods and services to the other party.
4. Each party must be free to accept or reject the other's offer.
5. There must be a willingness to deal with each other.
1.2 GAPS BETWEEN BUSINESS AND ITS CUSTOMERS
The gaps as indicated in the marketing process are in essence the interval between the needs of the consumer and the end
product to satisfy those needs. In the process of satisfying customer needs, other gaps also need to be filled. Gaps in the
marketing process are caused because the place where a product is produced is not necessarily the place where it is
consumed
There are seven types of gaps:
1. Space gap - There is a geographical space (distance) exists between the manufacturer and the consumer.
2. Time gap - Seasonal fruit that can only be grown and harvested in the summer months. To be available the whole
year, distributors have to keep large numbers in storage, or the fruit needs to be processed and canned.
3. Information gap - In order for consumers to be able to buy or use a product or service, they need to know about it.
4. Ownership gap - Once the consumer has paid for a new product, the ownership gap is bridged. For large purchases
the consumer may require finance from a bank in order to become the owner.
5. Value gap - The seller and buyer must agree about an acceptable exchange rate or price, this implies that the buyer
and seller do not attach the same value to the product.
6. Quantity Gap – Based on quantity available and demanded from suppliers to wholesalers to markets to public.
7. Assortment Gap – The variety of products available to consumers.
1.3 MARKETING ACTIVITIES TO BRIDGE GAPS
Marketing activities can be defined as those activities used to transfer the market offering to the buyer. The activities
intended to bridge the gap between buyer and seller usually involve intermediaries, of which there are three main kinds:
1. Middlemen - Are those businesses that bring the producer and user together in the marketing channel.
2. Sales intermediaries - Are agents who do not take title of products they sell. They provide services to facilitate the
sales process, for which they are paid.
3. Auxiliary enterprises - Are not directly involved in the transfer of title but provide support services to facilitate the
selling process.
H.Crassas – 2016 – MNM1502 – Introduction to Marketing Page 2
,Marketing activities can be grouped into three categories:
1. Primary activities - or most basic marketing activity is that of transport. The main aim or focus of transport is to
ensure that the product is delivered to the consumer in the quickest and safest way possible.
2. Auxiliary activities - refer to those additional activities that are required in the marketing process, and include the
following:
a. Sourcing and supplying information - The seller must know who and where potential buyers are. This
information can be obtained by conducting marketing research.
b. Standardization and grading - To close the gap between seller and buyer, manufactured products must be
designed to conform to specific norms or standards. The method of standardization and grading facilitates
in the buying process makes it easier for the buyer to distinguish between varieties of products available.
c. Storage - An activity that closes the time gap. The seasonal aspect of agricultural products necessitates
storage to ensure supply throughout the year.
d. Financing - Costs are incurred in the transfer of products and services from sellers to buyers. These costs
must be financed, usually by banks and other financial institutions.
e. Risk taking - The owner of the product is exposed to the risk of loss or damage, and can take out insurance
as a form of protection against risks such as arson or theft.
3. Exchange activities - are buying and selling. Ownership is transferred from one person to the other. Buying
activities are not regarded as a marketing task, but rather as the responsibility of the purchasing department.
Selling is an important task of the marketing department.
1.4 THE PLACE OF THE MARKETING FUNCTION ON THE ORGANISATION
General Manager
Operations Human Financial Purchasing Information Marketing Public
Management Resources Management Management Management Management Relations
The functions of these departments are as follows:
• The Operations Function - comprises the physical utilization of raw materials and their conversion into
manufactured materials and finished products, and is usually performed in a factory.
• The Human Resources (HR) Function - involves the acquisition, training, utilization and retention of competent
personnel.
• The Financial Function - includes the acquisition, utilization and control of the funds necessary for running the
business.
• The Purchasing Function - ensures that the materials necessary for production are bought at the right places, at
the right times, in the right quantities and at the right prices.
• The Public Relations Function - maintains and cultivates a favorable and objective image of the organisation
among those whose opinion is important to the achievement of the business objectives.
• The Information Function - makes available internal information for planning and control.
• The Marketing Function - generates income from sales, and is responsible for managing the marketing process.
• General Management - includes the activities of persons in managerial positions. These persons in top, middle and
lower management have to plan, organize, lead and control the organisation as a whole. The general manager is at
the head of the management team.
H.Crassas – 2016 – MNM1502 – Introduction to Marketing Page 3
, 1.5 MANAGEMENT TASKS IN MARKETING
The management task consists of a continuous process of planning, organizing, leading and controlling marketing activities.
Marketing management:
• Identifies opportunities and threats in the marketing environment;
• Identifies those opportunities which can be used in terms of internal strengths and weaknesses;
• Compiles marketing data;
• Chooses a specific target market;
• Decides on the products to be produced to satisfy consumer needs;
• Decides on the selling price of the product to attain the objective of profitability;
• Decides on specific distribution channels;
• Decides on marketing communication methods whereby consumers are informed, reminded and persuaded;
• Decides on the selection, training, remuneration and motivation of marketing personnel;
• Organizes and leads activities of the marketing department; and
• Controls the marketing process.
These responsibilities are part of the three management tasks which are summarized in the figure below.
Planning Implementation Control / Evaluation
• Do a SWOT analysis • Organize, control and • Set evaluation criteria
• Set objectives coordinate and standards
• Choose Marketing • Provide leadership
instrument
• Obtain resources
Planning
Planning by marketing management entails examining and choosing between various ways of using marketing
opportunities, countering marketing threats, and achieving marketing objectives.
• Adaptive planning - is a framework for organizing information, analysis, issues and opinions that form part of
strategic decision making. An assessment is done to identify the internal and external factors and then to
conceptualize creative and strategic solutions to address these factors. Marketing decisions thus begin with the
identification and evaluation of marketing opportunities and threats, and internal strengths and weaknesses.
• Contingency planning - Contingency planning is a plan devised for an outcome other than the expected plan.
Contingency planning therefore entails the development of plans to provide an alternative to the main plan in the
event that a dubious, but possible, external factor impacts on the original plan. The contingency plan deals not with
unforeseen events, but with events that were foreseen but considered unlikely to occur.
Organizing
Organizing and coordinating call for the creation of an organizational structure best suited to the implementation of the
marketing decisions to achieve marketing objectives. Marketing activities are grouped rationally, and individual divisions
and managers are tasked with carrying them out. The levels of authority, areas of responsibility, lines of communication
and methods of coordination between the divisions and individuals are determined.
H.Crassas – 2016 – MNM1502 – Introduction to Marketing Page 4
