Marketing and Sales
Marketing and Sales tests whether you can identify a target market and build a coherent marketing mix for it. Examiners reward students who distinguish marketing (identifying and satisfying customer needs profitably) from selling and advertising, which are only parts of it.
Core rules
- The marketing mix: product, price, place, promotion; for services add people, process and physical evidence.
- Market segmentation divides buyers by income, location, age, gender or lifestyle so the mix fits one group.
- Market research is primary (surveys, interviews, observation - costly but current) or secondary (reports, statistics - cheap but possibly outdated).
- Product life cycle: introduction, growth, maturity, decline. Strategy changes with each stage.
- Pricing methods: cost-plus, penetration (low launch price), skimming (high launch price), competitive, psychological.
- Promotion mix: advertising, sales promotion, personal selling, public relations, direct marketing.
Worked example
A firm launching bottled water in Mzuzu has variable cost K200 per unit and fixed cost of K50 per unit at planned output, giving total unit cost of K250. A 30% mark-up gives K325. Reasoning: cost-plus guarantees a margin, but it ignores what customers will pay and what rivals charge. If an established brand sells at K300, penetration pricing below that level may win shelf space at launch, with the price raised once distribution and brand recognition are established.
Traps that cost marks
- Reversing skimming (high early price) and penetration (low early price).
- Defining marketing as advertising or selling only.
- Designing a mix without naming a target segment.
- Forgetting place: rural customers may need tuckshops, kiosks, mobile-money payment and radio in local languages.