FORM SIX COMMERCE – MARKETING

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PHYSICAL DISTRIBUTION

Is the element that makes the product flow smoothly from where it is produced to where it is consumed in the market. Physical nglish-swahili/distribution” target=”_blank”>distribution will involve 2 important things

1. Storage
   
2. Transport
   

 

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AUXILIARY SERVICES

These are activities that help marketing process to be effective. It includes the following

1. Marketing finance
   
2. Marketing risk
   

 

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Marketing Finance

Marketing activities will involve the use of capital to meet financial requirements

The main source of finance in marketing will be bank credit and trade credit

marketing risk

Are the elements of uncertainty that may bring loss in marketing. It includes some unpredictable events in future that may create disturbance in marketing. These can be;

1. Fall in demand of products
   
2. Change in market condition
   
3. Human elements
   

 

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How to protect marketing from risk?

There are two measures on which can be applied to preserve or minimize risk inn marketing in a form of shifting or dividing the risk. It includes the following measures;

1. Through insurance
   
2. Through contract or purchase and sales
   
3. Through hedging
   
4. Through speculation
   

 

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MARKETING MIX (4Ps)

These are tools necessary to make and implement plans to decide what offer to the market, how much to offer and how to do so.

Also Marketing mix refers to description of combination of the four inputs which constitute the core of company’s marketing system, thus it is combination of the product, the nglish-swahili/distribution” target=”_blank”>distribution system (place), the price structure and the promotion activities.A brief description of the four elements of marketing mix (4Ps) is

1. Product; Anything that can be offered to a market for attention acquisition, use or consumption and that which might satisfy a wants or need. It includes physical goods and services.

2. Price; is the value of commodity in terms of money. It is the amount of money which is needed to acquire or exchange of a product and its accompanying services.

3.Place (nglish-swahili/distribution” target=”_blank”>distribution system);it is the movement of right quantity of goods to a right place at a right time .this is physical nglish-swahili/distribution” target=”_blank”>distribution of products from where it is produced to where it is consumed.

4Promotion;is the communicating information between sellers and potential buyers with the aim of influencing altitude and behavior .It is a task of informing customers that a particular product is available at a particular place at a particular price and stimulating them to buy.

COMPONENTS (elements, essential) OF PROMOTION OR PROMOTIONAL MIX OR TOOLS
1. Advertising; A paid form of non-personal presentation of ideas, goods or services by an identified sponsor.

Main features of advertising

a.A paid form of communication

b. Non-personal presentation i.e.  No face contact between advertiser and customers.

c.It must be issued by an identified sponsor

d.Purpose is to sell something being a product, service or idea.

2. Publicity; these is free advertising through the mass media used by a company to attract public attention. A firm use unpaid for features in the media to publicize their products.

  Advantages of publicity

  a.The company incurs no cost for the publicity.

  b. It builds the seller’s image and goodwill.

  c.It has wide coverage due to the use of mass media

  d.It is credible as it is reported independently.

 Disadvantages of Publicity

  a.The media may relate negative information about the business to the public.

  b.It is short lived and thus it may be missed by the target group.

  c.Only a portion of the information given by the seller may appear in the media or information may be twisted to suit the media’s objective.

3. Sales promotion; this refers to strategies or methods used to ennglish-swahili/courage” target=”_blank”>courage customers to buy a product. They are direct aimed at increasing the sales of a product.

The methods used includes/Forms of sales promotion

1. Trade fairs and exhibitions. Events at which different producers and supplier show and sell their products to the public. Goods are demonstrated and there is immediate feedback from customers.
2. Direct mail. This refer to the use of the letters,postcards,greeting cards, catalogues or any other printed matters to get in touch with customers. It is more effective if the right audiance is targeted.
3. Free Samples. These are representative products of what is actually being sold. They are given to customers to try out or use free of charge. The assumption is that the people who try out such products will actually purchase them in future.
4. Displays. is a systematic and attractive arrangement of products that are sold in a shop. This create ease when selecting what to buy. Most displays use color and designs to attract customers.
5. Credit facilities. Traders normally offer trusted customers credit facilities to ennglish-swahili/courage” target=”_blank”>courage them to buy more products. Credit facilities enable the seller to increase sales.
6. Discounts. Sellers reduce the prices of some products to ennglish-swahili/courage” target=”_blank”>courage customers to make large purchases.

 

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Advantages of sales promotion

a. The strategies used directly target customers.

b. It provides customers with an opportunity to see test the products before deciding to buy.

c. It results in increased sales.

d. It convinces more people to become users of product thus expanding the market.

Disadvantages of sale promotion

a.It can be expensive e.g. use of free sample and gifts.

b. Credit facilities may result in bad debts.

c.Some strategies such as trade fairs displays require a lot of time and some cases the services of specialist such as interior designers and technicians.Personal selling (salesmanship).

4.Personal selling (salesmanship) Is the process of assisting and persuading people to buy products in a face to face contact.it involves a direct and personal contact between the buyer and the seller or his representatives. Is an act of presenting a product or services so that the customers appreciate the need for it. This method promotes products using sales persons who approach potential customers and educate them about price, quality and use of a product.

PRODUCT LIFE CYCLE
Is a graphic depiction of a product sales history from its marketing inception to its withdrawal from the market.it recognizes different stages in the sales history of the product. Product life cycle is a product life in a particular market.it may be short for some products and long for some other products. Product life cycle is associated with opportunities and problems with respect to marketing strategies and profit potentials. Product life cycle is very useful in formulating better marketing plans.

A. Introduction stage; this stage starts when the new products is first made available for purchase.

Characteristics of introduction stage

1. Profit can be negative or low because of low sales and heavy nglish-swahili/distribution” target=”_blank”>distribution and promotion expenses.
2. High price to cover cost.
3. Few competitors since the market is not ready for product varieties.
4. Usually high income earners are focused.
5. Low output and technological problems.
6. Informative promotion.
7. Pricing strategies used are skimming pricing strategies and or penetration pricing strategy.

 

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B. Growth stage; this is the stage when sales and profits increases rapidly due to new users and move repeat buyers (people who have tried the product and being satisfied buy it again)

Characteristics of growth stage

1. More competitors are attracted by large profit.

2. Promotion emphasize on comparing the benefits of its product with competitors

3. Wide nglish-swahili/distribution” target=”_blank”>distribution as possible.

4. New product features are introduced by competitors.

5. Market expands.

6. Sales increase.

7. Increased numbers of nglish-swahili/distribution” target=”_blank”>distribution channels due to increased customers.

8. Prices may fall due to increased competition.

9. Promotional expenditures are maintained or increased.

10. Profit increases.

C. Maturity stage; this is a period of slow down and levelling in sales and profits. This stage often lasts longer than the previous ones and it presents plenty of challenges to marketing managers.

Characteristic of maturity stage

1. More competitors (very high competition).

2. Low sales and profits.

3. Price can be reduced.

4. Increasing advertising.

5. Products modification.

D. Declining stage; this is the last stage where sales of most products and brands eventually decline.it involves dropping a product from the product line i.e. a weak product identified and dropped 

Characteristics of declining stage

1. Low level of sales and profits as competitors take.
2. The market with newly introduced products.
3. Lowered price.
4. Reduced promotion.

 

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Advantages of product life cycle

1. It helps the marketing manager to know the expected profit at each stage.
2. It facilitates the formulation of marketing strategies at each stage.
3. It facilitate economical allocation of resources to different products in a firm.
4. It assists marketing managers to predict levels of sales.
5. Distinct stages of product life cycle (PLC) help marketing managers to recognize opportunities and challenges in the sales history of the product.

 

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