ENTREPRENEURSHIP STUDIES

GST 203 LECTURE 5

MARKETING STRATEGY
Introduction
Philip Kotler, defines marketing as human activity directed at satisfying needs and wants
through exchange processes.
Marketing is the performance of business activities that direct the flow of goods and
services from producer to consumer or user.
Another notable definition is that marketing is getting the right goods and services to the
right people at the right place at the right time at the right price with the right
communication and promotion.
Yet another definition is that marketing is a social process by which individuals and groups
obtain what they need and want through creating and exchanging products and values with
others. This definition of marketing rests on the following concepts:
i.
Needs, wants and demands;
ii.
Products;
iii.
Value and satisfaction;
iv.
Exchange
v.
Markets.
Basically, Marketing deals with identifying & meeting human & social needs or it can be
defined as meeting needs profitably.
According to the American Marketing Association, marketing is defined as an
organizational function & a set of processes for creating, communicating & delivering value
to the customers & for managing customers relations in ways that benefit the organization
& the stake holders
While it is necessary for an entrepreneur to be creative and innovative, it is also important
that he/she be able to sell the outcome of his/her creativity or innovation. The existence and
survival of an entrepreneurial firm depends, to a large extent, on the ability of the firm to get
its products across to the end users, i.e. the customers.
One of the greatest needs of business managers/entrepreneurs is to understand and develop
marketing programs for their products/services. Business success is based on the ability to
build a growing body of satisfied customers. Modern marketing programs are built around
the marketing concept and performance, which directs managers to focus their efforts on
identifying, satisfying and following up the customers needs: all at a profit.
From the aforementioned, marketing is thus aimed at maximizing customers satisfaction
through the management of exchange process and relationship. The success of this exchange
process determines the success of a business.

Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)

What do Entrepreneurs/Businesses Market?

Marketers market 10 main types of entities: Goods, Services, Events, Experiences, Persons,
Places, Properties, Organizations, Information, and Ideas.
Goods: Physical goods (tangible) constitute the bulk of most production and marketing
efforts. Each year, companies market billions of goods, such as fresh, canned, bagged, and
frozen food products and millions of cars, refrigerators, televisions, machines, phones,
clothes and other mainstays of a modern economy.
Services: Services (intangible products) include the work of airlines, hotels, car rental firms,
barbers and beauticians, maintenance and repair people, and accountants, bankers, lawyers,
engineers, doctors, software programmers, and management consultants.
Events: Marketers promote time-based events, such as major trade shows, artistic
performances, and company anniversaries. Global sporting events such as the Olympics and
the World Cup are promoted aggressively to both companies and fans.
Experiences: By orchestrating several services and goods, a firm can create, stage, and
market experiences. E.g. Quality and Experiences of Doctors, Drivers and Pilots of
Hospitals, Transport companies and Airlines (Years of Accident Free Services),
Persons: Artists, Musicians, Comedians, CEOs, Physicians, high-profile lawyers and
financiers, and other professionals all get help from celebrity marketers.
Places: Cities, states, regions, and whole nations compete to attract tourists, residents,
factories, and company headquarters.
Place marketers include economic development specialists, real estate agents,
commercial banks, local business associations, and advertising and public relations
agencies.
Properties: Properties are intangible rights of ownership to either real property (real estate)
or financial property (stocks and bonds). They are bought and sold, and these exchanges
require marketing.
Real estate agents work for property owners or sellers, or they buy and sell
residential or commercial real estate.
Investment companies and banks market securities to both institutional and
individual investors.
Organizations: Organizations work to build a strong, favorable, and unique image in the
minds of their target publics.
In Nigeria, most producers of fast moving consumable goods (FMCG), Basic &
Tertiary Institutions, Banks, Hotels, Hospitals among others
Information: The production, packaging, and distribution of information are major
industries.
Information is essentially what books, schools, and universities produce, market, and
distribute at a price to parents, students, and communities.
In the Medicals, the end product is really an electronic patient record: information on
lab tests, pathology, and drugs as well as voice dictation
Ideas: Every market offering includes a basic idea.
Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)

 Products and services are platforms for delivering some idea or benefit.
Social marketers are busy promoting such ideas as Friends Dont Let Friends Drive
Drunk and A Mind Is a Terrible Thing to Waste.
A challenge facing businesses today is how to identify and satisfy needs and wants of
consumers through exchange process. This particular challenges stress the need for
businesses to carefully draft marketing plans which will complement the business plan and
that prudent marketing plan worked out by focusing on expected market trends always get
good results.
-

Small businesses should start with a market plan that will target one year. This, after
some time, can be graduated to 2 4 years plan.
Marketing plans require a great amount of effort in terms of time, strategy and
credibility.
Devising marketing plans for a business involves collective efforts. It should be
planned so that it boosts the profitability of the business.

The focus of this lecture is on marketing and marketing strategies to be explored by an

entrepreneurial firm.
The Concept of Marketing
A Market is a forum where buyers and sellers meet for exchange of values.
According to Kotler (1991:63) a market consists of all the potential customers sharing a
particular need or want who might be willing and able to engage in exchange to satisfy that
need or want. Given a product or service, Kotler suggests the following procedure for
bringing the product/service to market:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.

Analyze long-run opportunities in the market.

Research and select target markets.
Identify segmentation variables and segment the market.
Develop profiles of resulting segments.
Evaluate the attractiveness of each segment.
Select the target segment(s).
Identify possible positioning concepts for each target segment.
Select, develop and communicate the chosen positioning concept.
Design marketing strategies.
Plan marketing programs.
Organize, implement, and control market effort.

The marketing concept rests on the importance of customers to a firm and states that:
1. ALL company policies and activities should be aimed at satisfying customer needs, and
2. PROFITABLE sales volume is a better company goal than maximum sales volume.
To use the marketing concept, a business should:
i.
Determine the needs of their customers (Market Research);
ii. Analyze their competitive advantages (Market Strategy);
iii. Select specific markets to serve (Target Marketing); and
iv. Determine how to satisfy those needs (Market Mix).
Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)

Market Research
In order to manage the marketing functions successfully, good information about the market
is necessary. Frequently, a small market research program, based on a questionnaire given to
present customers and/or prospective customers, can disclose problems and areas of
dissatisfaction that can be easily remedied, or new products or services that could be offered
successfully.
Market research should also encompass identifying trends that may affect sales and
profitability levels. Population shifts, legal developments, and the local economic situation
should be monitored to enable early identification of problems and opportunities.
Competitor activity also should be monitored. Competitors may be entering or leaving the
market, for example. It is also very useful to know what your competitors' strategies are
(i.e., how they compete).
The marketing concept means that an organization aims all its efforts at satisfying its
customers at a profit. The marketing concept is a simple but very important idea.
Fig. 1.1: The Marketing Concept
Customer
satisfaction

Total company
effort

The
marketin
g
concept
Profit (or another measure
of long-term success) as an
objective

Fig. 1 above describes the essence of the marketing concept. It shows that marketing
concept is about garnering efforts by the business to satisfy customers with a view to
achieving the objective of profit making.
Marketing Strategy
Kotler describes marketing strategy as a consistent, appropriate feasible set of principles
through which particular business hopes to achieve its long-run customer profit objectives in
a particular competitive environment.

Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)

Alfred Chandler (1992) states that strategy is the determination of the basic term goals and
objectives in an enterprise and the adoption of courses of action and the allocation of
resources necessary for carrying out these goals.
The survival of a business depends on the appropriate determination of strategy which
involves the examination of the general situation pertaining to the business as a whole and
decides upon necessary changes of fundamental nature.
- Ironically, managers of business are frequently unaware of the importance of such
strategic planning and thus, on several occasions resort to guess works.
- It is therefore important for a business to define from on set its type of business and
the market it wants to satisfy.
Target Market
A business may decide to go for either the mass or niche market strategy in selecting its
target market.
Mass target market strategy is a situation where all potential customers in a product-market
are assumed to be sufficiently similar in responsiveness to a marketing program positioning
strategy.
However, in Niche target market strategy, the firm assumes that people or organizations
within a product-market vary in terms of responsiveness to any marketing program
positioning strategy.
- A niche strategy can be implemented by going after a single niche or by designing a
separate marketing program for each of two or more niches.
-

The niche strategy can afford businesses with the opportunity to greatly increase
profitability and strength over competition through more effective use of the firms
capabilities and limited resources.

Marketing strategy encompasses identifying customer groups (Target Markets), which a

business can serve better than its target competitors, and tailoring its product offerings,
prices, distribution, promotional efforts and services towards that particular market segment
(Managing the Market Mix).
Ideally, the strategy should try to address customer needs which currently are not being met
in the market place and which represent adequate potential size and profitability. A good
strategy implies that a business cannot be all things to all people and must analyze its
market and its own capabilities so as to focus on a target market it can serve best.
Components of Marketing Strategy
A marketing strategy specifies a target market and a related marketing mix. It is a big
picture of what a firm will do in some market. Two interrelated parts are needed:
i.
A target market a fairly homogenous (similar) group of customers to whom a
company wishes to appeal.
ii.
A marketing mix the controllable variables the company puts together to
satisfy this target group.

Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)

Figure 1.2: Marketing Strategy

The
marketing mix
C

In figure 1.2 above, the customers is represented by the letter C which is at the centre of
the diagram. The customer is surrounded by the controllable variables that we call the
marketing mix. A typical marketing mix includes some products, offered at a price, with
some promotion to tell potential customers about the product, and a new to reach the
customers place.
It should be noted that a marketing strategy specifies some particular target customers. This
approach is called target marketing to distinguish it from mass marketing. Target
marketing says that a marketing mix is tailored to fit some specific target customers. In
contrast, mass marketing the typical production-oriented approach vaguely aims at
everyone with the same marketing mix. Mass marketing assumes that everyone is the same
and it considers everyone to be potential customer.
Target Marketing
Owners of businesses have limited resources to spend on marketing activities.
Concentrating their marketing efforts on one or a few key market segments is the basis of
target marketing. The major ways to segment a market are:
1. Geographical segmentation -- specializing in serving the needs of customers in a
particular geographical area (for example, a neighborhood convenience store may send
advertisements only to people living within one-half mile of the store).
2. Customer segmentation -- identifying and promoting to those groups of people most
likely to buy the product. In other words, selling to the heavy users before trying to
develop new users.
Market Segmentation
One of the key elements in strategic marketing for small businesses is deciding what market
to serve.
- Market segmentation can be seen as the act of evaluating, selecting and concentrating
on those market segments that a company can serve most effectively.
-

It can also be described as the sub-dividing into distinct subsets of customers, where
any conceivable customers be selected as a target market to be reached with a distinct
marketing mix.

Markets can be segmented based on groups of consumers with similar characteristics, such
as
- Geographic (location or regional spread),
- Demographic (age, sex, occupation, educational qualification, etc.),
- Psychographic (Lifestyle traits, personality styles, attitudes, activities, and values)
and behaviorist variables.

Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)

The most important attributes of a market segment are measurability, accessibility

and substantiality.
Advantages of Identifying Target Markets & Market Segmentation
Below are the advantages that small businesses can derive from identification of the target
customers or market segmentation:
i.
When you are able to identify your customers, you can customize your entire
marketing campaign to attract them with direct marketing strategies.
ii. Effective communication always earns positive results and helps to save on effort and
expenditures in non-productive areas.
iii. It facilitates accurate forecasts on the additional services customers will expect from
your company.
iv. It assists in maintaining the best pricing and quality levels required to capture and
retain customers.
v. It helps identify the concentration of customers in specific locations, to design direct
and cost-effective marketing.
vi. It assists to identify the competition in the market and the areas where you can
generate maximum customer loyalty and the best sales response.
vii. It serves as a resource to vital information about the overall market for your products.
It is important to stress that market segmentation does not indicate that sales should be
restricted only to your target customer base.
- Your target market is, in fact, the focal point at the beginning.
- The products should be made available to customers outside your target customer base.
- When you discover that customers outside your identified target segment fail to exhibit
a response favoring your products, your strategy should change. You should try to
involve the inclusion of prospects that have characteristics similar to those of your
present customers.
Managing the Market Mix
This is the blending of a company's strategies on product, distribution, price and promotion
with a view to achieving an integrated marketing programme. There are four key marketing
decision areas is a marketing program. The marketing mix is used to describe how ownermanagers combine these four areas into an overall marketing program.
It is useful to reduce all the variables in the marketing mix to four basic ones:
i.
Product
ii.
Place
iii.
Promotion
iv.
Price
Figure 1.3: Four Ps of a Marketing Mix and their common focus on the Customer C.

Product

Place

Price

C
Promotion

Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)

Product as shown in figure 3 is concerned with developing the right product for the target
market. It must meet customers taste and preferences. The customer must believe that the
product is the one that is suitable to them.
Place is concerned with all the decisions involved in getting the right product to the target
markets Place. A product isnt much good to a customer if it inst available when and where
its wanted. A product reaches customers through a channel of distribution. A channel of
distribution is any series of firms (or individuals) who participate in the flow of products
from producer to final consumer. Sometimes a channel system is quite short. It may run
directly from a producer to a final user or consumer. This is especially common in business
markets and in the marketing of service. The channel is direct when a producer uses an
online website to handle orders by target customers, whether the customer is a final
consumer or an organization. So, direct channels have become much more common since
the development of the internet.
On the other hand, often the channel system is much more complex involving many
different retailers and wholesalers (see figure 1.4). When a marketing manager has several
different target markets, several different channels of distributions may be needed.
Promotion has to do with getting the customer informed that the product is available. It is
the business of communicating with consumers. It involves providing customers with
information that will assist them in making a decision to purchase a product or pay for
services. Channel used here include the print media, electronic media, signboards, visual
display devices, etc. Promotion includes personal selling, mass selling, and sales promotion.
It is the marketers job to blend these methods of communication.
Personal selling involves direct spoken communication between sellers and potential
customers. Personal selling usually happens face-to-face, but sometimes the communication
occurs over the telephone. Personal selling lets the salesperson adapt the firms marketing
mix to each potential customer. But this individual attention comes at a price; personal
selling can be very expensive. Often this personal effort has to be blended with mass selling
and sales promotion.
Mass selling is communicating with large numbers of customers at the same time. The main
form of mass selling is advertising any paid form of publicity and unpaid form of nonpersonal presentation of ideas, goods, or services is another important form of mass
selling. Mass selling may involve a wide variety of media, ranging from newspaper and
billboards to the internet.
Sales promotion refers to those promotion activities other than advertising publicity, and
personal selling that stimulate interest, trial, or purchase by final customer or others in the
channel. This can involves use of coupons, point-of-purchase materials.
Price is the element that creates revenue. It is determined by the discovery of what
customers perceived is the value of the item on sale. This implies that researching into
customers opinion about pricing is important as it indicates how they value what they are
looking for as well as what they want. A business manager/entrepreneur must also try to

Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)

estimate customer reaction to possible prices. Besides this, knowledge of current practices
as to markups, discounts, and other terms of sale is required.
Customer is not a part of the Marketing Mix
The customer is shown surrounded by the four Ps in figure 1.3. Some students assume that
the customer is part of the marketing mix but this is not so. The customer should be the
target of all marketing efforts. The customer is placed in the center of the diagram to show
this. The C stands for some specific customers the target market.
All four Ps are needed in a marketing mix. In fact, they should all be tied together. But is
any one more important than the others? Generally speaking, the answer is no all
contribute to one whole. When a marketing mix is being developed, all (final) decision
about the Ps should be made at the same time. Thats why the four Ps are arranged around
the customers ( C ) in a circle to show that they all are equally important.
The Product area is concerned with developing the right product for the target market.
This offering may involve a physical goods.
We develop a Product to satisfy target customers. We find a way to reach our target
customers Place. We use Promotion to tell the target customers (and others in the channel)
about the product that has been designed for them. And we set a Price after estimating
expected customer reaction to the total offering and the cost of getting ot to them.

Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)