Marketing Concepts and Strategies

Standardisation and Grading

• Standardisation and grading simplify production, transportation, storage and selling.
• Standardisation sets uniform specs for products/services.
• Grading classifies products by size and quality, usually through sorting.

Risk-Taking in Marketing

• Despite good management and insurance, risk is inherent in marketing.
• Examples of losses include bad debts, obsolescence, theft, and product liability suits.

Gathering Market Information

• Market information is essential for all marketing decisions.

Utility: The Value Added by Marketing

• Utility describes the ability of a good or service to satisfy a human need.
• There are four types of utility:
  • Form utility: Converting production inputs into finished products (e.g., raw materials into a phone).
  • Place utility: Making a product available where customers want it (e.g., shoes shipped from a factory to a store).
  • Time utility: Making a product available when customers want it (e.g., Christmas decorations available in October).
  • Possession utility: Transferring product ownership to the buyer (e.g., a new car).

Consumer Product Classifications

• There are three categories of consumer products:
  • Convenience product: Inexpensive, frequently purchased items with minimal buyer effort (e.g., bread, petrol, newspapers).
  • Shopping product: Items requiring significant planning and effort for purchase (e.g., appliances, bicycles, mobile phones).
  • Specialty product: Items with unique characteristics, demanding significant purchasing effort (e.g., sports cars, original artwork).

Physical Distribution

• Physical distribution encompasses activities related to efficient product movement from producer to user.
• Key functions include:
  • Inventory Management
  • Order Processing
  • Warehousing
  • Materials Handling
  • Transportation

Inventory Management

• Inventory management aims to minimize inventory costs, including holding costs and stockout costs.
• Holding costs: Expenses incurred for storing products until purchase or shipment (e.g., invested money, storage space, insurance, taxes).
• Stockout costs: Lost sales due to out-of-stock items.

Order Processing

• Order processing involves receiving and fulfilling customer purchase orders.

Warehousing

• Activities involved in receiving, storing, and preparing goods for reshipment.
• Includes:
  • Receiving, identifying, sorting, and storing goods.
  • Picking, assembling, and dispatching shipments.

Materials Handling

• Physical handling of goods within warehouses and during transportation.
• Unit loading: Combining smaller cartons, barrels, or boxes into one standard-size load for efficient movement.

Transportation

• Shipment of products to customers.
• Carrier: A business offering transportation services.
• Common carrier: Services available to all shippers (e.g., railroads, airlines).
• Contract carrier: Limited by law in the number of businesses served, not for the general public.
• Private carrier: Owned and operated by the shipper.

Types of Advertising by Purpose

• Primary-demand advertising: Increasing demand for all brands within a specific industry (e.g., South African Sugar Association).
• Selective-demand (brand) advertising: Selling a particular brand of product, the most common type.
• Institutional advertising: Enhancing a business's image or reputation (e.g., Telkom sponsoring the South African Olympic Team).

Major Steps in Developing an Advertising Campaign

1. Identify and analyze the target audience.
2. Define advertising objectives.
3. Create the advertising platform (key selling points or features).
4. Determine the advertising appropriation (total budget).
5. Develop the media plan (timetable and media choices).
6. Create the advertising message.
7. Execute the campaign.
8. Evaluate advertising effectiveness.

Photos, Videos, and Podcasts in Social Media

• Media sharing sites: Platforms for uploading photos, videos, and podcasts.
• Photo sharing: Telling compelling stories about products or services through postings on websites or social media.
• Videos: Storytelling through video content (e.g., Mr Price Home DIY décor videos).
• Podcasts: Digital audio or video files for online listening or viewing on various devices.

Measuring and Adapting a Social Media Plan

• Quantitative social media measurement: Using numerical data, such as website visitors, fans, followers, leads, and new customers.
• Key Performance Indicators (KPIs): Measures that track progress towards objectives.
• Qualitative social media measurement: Assessing opinions and beliefs about a brand through sentiment analysis.
• Sentiment analysis: Technological detection of moods, attitudes, and emotions expressed in social media.

Careers in Finance

• Job titles include Chief Financial Officer, Financial Manager, Consumer Credit Officer, Financial Analyst, Financial Planner, Insurance Analyst, Investment Account Executive.
• Finance professionals need honesty, strong finance/accounting/math backgrounds, computer skills, and excellent written and oral communication.

Sources of Unsecured Short-Term Financing

• Trade Credit: Extended by a seller, often without interest, for delayed payment.
• Promissory Notes Issued to Suppliers:
  • A written promise to repay a sum with interest on a specified date.
  • Legally binding and negotiable.

Venture Capital, Angel Investors, and Private Placements

• Venture capital: Investment in small businesses with growth potential, typically in exchange for equity or ownership.
• Angel investor: Provides financial backing for startups, often focused on helping the business succeed rather than maximizing profits.
• Private placement: Direct sale of stock to institutions like insurance companies or pension funds.

Corporate Bonds

• A company's written pledge to repay a specific amount with interest.
• Interest rates vary based on the company's financial health.
• Registered bond: Registered in the owner's name by the issuing company.
• Maturity date: Repayment date for borrowed money.
• Types of bonds:
  • Debenture bond: Backed only by the company's reputation.
  • Mortgage bond: Secured by the company's assets.
  • Convertible bond: Can be exchanged for common stock at the owner's option.

This quiz covers key marketing concepts including standardisation, grading, risk-taking, and the importance of market information. Additionally, it explores the four types of utility that add value to goods and services in the marketplace. Test your knowledge and understanding of these essential marketing principles.