MOUNT KENYA UNIVERSITY

NAME:
ADM.NO:
UNIT NAME: PRINCIPLES OF MARKETING.
UNIT CODE:
 1. Identify four typical marketing channels for consumer products(10 marks)

Definition.
Marketing channels are the ways that goods and services are made available for use by the

consumers. All goods go through channels of distribution, and your marketing will depend

on the way your goods are distributed. The following are some of Market channels for

consumer products.

Manufacturer to Customer

Manufacturer makes the goods and sells them to the consumer directly with no

intermediary, such as a wholesaler, agent or retailer. Goods come from the manufacturer to

the user without an intermediary. For example, a farmer may sell some produce directly to

customers. For example, a bakery may sell cakes and pies directly to customers.

Manufacturer to Retailer to Consumer

Purchases are made by the retailer from the manufacturer and then the retailer sells the

merchandise to the consumer. This channel is used by manufacturers that specialize in

producing shopping goods. For example, clothes, shoes, furniture and fine china. This

merchandise may not be needed immediately and the consumer may take her time and try

on the items before making a buying decision. Manufacturers that specialize in producing

shopping goods prefer this method of distribution.

Manufacturer to Wholesaler to Customer

Consumers can buy directly from the wholesaler. The wholesaler breaks down bulk

packages for resale to the consumer. The wholesaler reduces some of the cost to the

consumer such as service cost or sales force cost, which makes the purchase price cheaper

for the consumer. For example, shopping at some of the warehouse clubs, the customer

may have to buy a membership in order to buy directly from the wholesaler.

Manufacturer to Agent to Wholesaler to Retailer to Customer

Distribution that involves more than one intermediary involves an agent called in to be the

middleman and assist with the sale of the goods. An agent receives a commission from the

producer. Agents are useful when goods need to move quickly into the market soon after

the order is placed. For example, a fishery makes a large catch of seafood; since fish is

perishable it must be disposed of quickly. It is time consuming for the fishery to contact

many wholesalers all over the country so he contacts an agent. The agent distributes the

fish to the wholesalers. The wholesalers sell to retailers and then retailers sell to

consumers
1. Clearly identify what involved in the consumer buying decision process using a suitable
example(10 marks)

Problem Recognition

Put simply, before a purchase can ever take place, the customer must have a reason to believe

that what they want, where they want to be or how they perceive themselves or a situation is

different from where they actually are. The desire is different from the reality this presents a

problem for the customer.

However, for the marketer, this creates an opportunity. By taking the time to create a problem

for the customer, whether they recognize that it exists already or not, youre starting the buying

process. To do this, start with content marketing. Share facts and testimonials of what your

product or service can provide. Ask questions to pull the potential customer into the buying

process. Doing this helps a potential customer realize that they have a need that should be solved.

Information Search

Once a problem is recognized, the customer search process begins. They know there is an issue

and theyre looking for a solution. If its a new makeup foundation, they look for foundation; if

its a new refrigerator with all the newest technology thrown in, they start looking at refrigerators

its fairly straight forward.

As a marketer, the best way to market to this need is to establish your brand or the brand of your

clients as an industry leader or expert in a specific field. Methods to consider include becoming a
Google Trusted store or by advertising partnerships and sponsors prominently on all web

materials and collaterals.

Becoming a Google Trusted Store, like CJ Pony Parts a leading dealer of Ford Mustang parts

allows you to increase search rankings and to provide a sense of customer security by displaying

your status on your website.

Purchase Decision

Somewhat surprisingly, the purchase decision falls near the middle of the six stages of the

consumer buying process. At this point, the customer has explored multiple options, they

understand pricing and payment options and they are deciding whether to move forward with the

purchase or not. Thats right, at this point they could still decide to walk away.

This means its time to step up the game in the marketing process by providing a sense of

security while reminding customers of why they wanted to make the purchase in the first time.

At this stage, giving as much information relating to the need that was created in step one along

with why your brand, is the best provider to fulfill this need is essential.

If a customer walks away from the purchase, this is the time to bring them back. Retargeting or

simple email reminders that speak to the need for the product in question can enforce the

purchase decision, even if the opportunity seems lost. Step four is by far the most important one

in the consumer buying process. This is where profits are either made or lost.

Purchase

A need has been created, research has been completed and the customer has decided to make a

purchase. All the stages that lead to a conversion have been finished. However, this doesnt mean
its a sure thing. A consumer could still be lost. Marketing is just as important during this stage

as during the previous.

Marketing to this stage is straightforward: keep it simple. Test your brands purchase process

online. Is it complicated? Are there too many steps? Is the load time too slow? Can a purchase be

completed just as simply on a mobile device as on a desktop computer? Ask these critical

questions and make adjustments. If the purchase process is too difficult, customers, and therefore

revenue, can be easily lost.

Post-Purchase Evaluation

Just because a purchase has been made, the process has not ended. In fact, revenues and

customer loyalty can be easily lost. After a purchase is made, its inevitable that the customer

must decide whether they are satisfied with the decision that was made or not. They evaluate.

If a customer feels as though an incorrect decision was made, a return could take place. This can

be mitigated by identifying the source of dissonance, and offering an exchange that is simple and

straightforward. However, even if the customer is satisfied with his or her decision to make the

purchase, whether a future purchase is made from your brand is still in question. Because of this,

sending follow-up surveys and emails that thank the customer for making a purchase are critical.

2. Explain the actors and forces of macro- environment that affect marketing.(10 marks)

1. Demographic Forces in the Macro Environment

Demographic forces relate to people. The name refers to the term Demography. The latter refers

to the study of human populations. This includes size, density, age, gender, occupation and other
statistics. Why are people important? Because, on the whole, their needs is the reason for

businesses to exist. In other words, people are the driving force for the development of markets.

The large and diverse demographics both offer opportunities but also challenges for businesses.

Especially in times of rapid world population growth, and overall demographic changes, the

study of people is crucial for marketers. The reason is that changing demographics mean

changing markets. Further, changing markets mean a need for adjusted marketing strategies.

Therefore, marketers should keep a close eye on demographics. This may include all kinds of

characteristics of the population, such as size, growth, density, age- and gender structure, and so

on.

Some of the most important demographic trends that affect markets are:

World population growth

The world population is growing at an explosive rate. Already in 2011, it reached 7 million,

while being expected to reach 8 billion by the year 2030. By the end of the century, it is likely to

double. However, the strongest growth occurs where wealth and stability is mostly absent. More

than 70% of the expected world population growth in the next 40 years is expected to take place

outside of the 20 richest nations on earth. This changes requirements for effective marketing

strategies and should be kept in mind.

Changing age structure

The changing age structure of world population is another critical factor influencing marketing.

In the future, there will be countries with far more favourable age structures than others. For

example, India has one of the youngest populations on earth and is expected to keep that status.
By 2020, the median age in India will be 28 years. In contrast, the countries of the European

Union and the USA have to face an aging population already today. This may lead to harmful

reductions in dynamism and challenges regarding the supply of young workers who, at the same

time, have to support a growing population of elderly people.

Changing family structures

Also, families are changing which means that the marketing strategies aimed at them must

undergo an adjustment. For example, new household formats start emerging in many countries.

While in traditional western countries a typical household consisted of husband, wife and

children, nowadays there are more married couples without children, as well as single parent and

single households. Another factor comes from the growing number of women working full time,

particularly in European nations. Together with further forces, changing family structures require

the marketing strategy to be changed.

Geographic shifts in population

One and the most important element of geographic shifts is migration. By 2050, global

migration is expected to double. This has a major impact on both the location and the nature of

demand for products and services. The reason is that the place people can be reached has

changed, as have their needs because of the new situations. Other important factors are the ethnic

diversity that provides new opportunities, as well as urbanisation.

2. Economic forces in the Macro Environment

The Economic forces relate to factors that affect consumer purchasing power and spending

patterns. For instance, a company should never start exporting to a country before having

examined how much people will be able to spend. Important criteria are: GDP, GDP real growth

rate, GNI, Import Duty rate and sales tax/ VAT, Unemployment, Inflation, Disposable personal

income, and Spending patterns.

3. Socio-Cultural forces in the Macro Environment

The Socio-Cultural forces link to factors that affect societys basic values, preferences and

behavior. The basis for these factors is formed by the fact that people are part of a society and

cultural group that shape their beliefs and values. Many cultural blunders occur due to the failure

of businesses in understanding foreign cultures. For instance, symbols may carry a negative

meaning in another culture.

4. Technological forces in the Macro Environment

Technological forces form a crucial influence in the Macro Environment. They relate to factors

that create new technologies and thereby create new product and market opportunities.

A technological force everybody can think of nowadays is the development of wireless

communication techniques, smartphones, tablets and so further. This may mean the emerge of

opportunities for a business, but watch out: every new technology replaces an older one. Thus,

marketers must watch the technological environment closely and adapt in order to keep up.
Otherwise, the products will soon be outdated, and the company will miss new product and

market opportunities.

5. Ecological forces in the Macro Environment

Ecological, or natural forces in the Macro Environment are important since they are about the

natural resources which are needed as inputs by marketers or which are affected by their

marketing activities. Also, environmental concerns have grown strongly in recent years, which

makes the ecological force a crucial factor to consider. For instance, world, air and water

pollution are headlines every marketer should be aware of. In other words, you should keep track

of the trends in the ecological environment.

Important trends in the ecological environment are the growing shortage of raw materials and the

care for renewable resources. In addition, increased pollution, but also increased intervention of

government in natural resource management is an issue.

Because of all these concerns and the increased involvement of society in ecological issues,

companies more than ever before need to consider and implement environmental sustainability.

This means that they should contribute to supporting the environment, for instance by using

renewable energy sources. Thereby, businesses do not only support the maintenance of a green

planet, but also respond to consumer demands for environmentally friendly and responsible

products.

6. Political forces in the Macro Environment

Every business is limited by the political environment. This involves laws, government agencies

and pressure groups. These influence and restrict organisations and individuals in a society.
Therefore, marketing decisions are strongly influenced and affected by developments in the

political environment.

Before entering a new market in a foreign country, the company should know everything about

the legal and political environment. How will the legislation affect the business? What rules does

it need to obey? What laws may limit the companys ability to be successful? For example, laws

covering issues such as environmental protection, product safety regulations, competition,

pricing etc. might require the firm to adapt certain aspects and strategies to the new market.

Reference.

Philip Kotler et. al "Marketing Management-A South Asian Perspective" 13 Edition, Pearson
Publication.th

Neeru Kapoor "Marketing Management", PHI Learning Private Limited.s. Rajendra P.

Maheshwari "Principles of Marketing" International Book House Pvt. Ltd.

Philip Kotler, Gary Armstrong "Principles of Marketing" 12th Edition, Prentice Hall of India
Pvt. Ltd.

Michael J. Etzel "Marketing" Paperback Publications.

William J. Stanton "Fundamentals of Marketing" 10th Edition, McGraw Hill Publication.