applied marketing management management [amama]

8/2/2019 Applied Marketing Management Management [Amama]

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MASTERS IN BUSINESS ADMINISTRATION(MBA):

BY DR ROBERT K. RUTAAGI

MODULES: [E]MBA & MSC (IMS); MSC(H&TM): [INTERNATIONAL] MARKETING

MANAGEMENT CURRICULUM [IMMC](GENERIC & EXPANDED VERSION: 01):

NOVEMBER, 2010.

DESIGNED BY DR ROBERT K. RUTAAGI

NOVEMBER, 2010


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[INTERNATIONAL] MARKETING MANAGEMENT CURRICULUM:

(GENERIC & EXPANDED VERSION 0I):

Learning objectives:

By the end of the course, students will be able to:

Appreciate marketing management skills, tools, techniques and their roles in

business organizations as well as other human institutions.

Efficiently and effectively apply marketing skills in their organizations.

Analyze and interpret correctly, global marketing environments.

Efficiently and effectively formulate and manage marketing programmes.

Use marketing and sales forces and be able to evaluate their performances.

Appreciate, internalize and apply marketing as an academic discipline,

managerial function and business and social practice.

Unit one (01): The Imperatives of Marketing:

This Unit will cover the following topics:

Session one: Why is marketing imperative in the economy?

Definition of Marketing.

Scope of Marketing.

Types of Marketing.

Functions of Marketing.

Marketing at a glance (Synopsis).

1.1 Session One: The imperatives of marketing:

1.1.1 The Definition of marketing.

Marketing is the selling and buying of goods and services to and from the

places of supply (Markets).

Marketing is the selling to or buying from a person, organization or

country.

Marketing, in a narrow sense, is the selling to and buying from another

nation. Two nations are involved. That is inter-nation(al) marketing.

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Multi-national marketing is the selling to and buying from more than two

nations hence the epithet multi.

Global marketing is the selling to and buying from the whole globe (world).

Many nations are involved not two (1.1.3) and not 3 or 4, 5, 6 10(1.1.4) but many more nations, if not the whole world.

Export marketing (exporting):

This entails the selling of goods and or services out of the country. Another

name for goods and or services in: Exports.

Importing entails buying of goods and services from outside country or

countries.

International Trade:

International Trade and marketing may be interchangeably used but there is a

distinction between the two. International Trade is status of exports and

imports between people, organizations and nations of the world. The policy

and practice of harmonizing the two is known as balance of payments (BOP)

for nations. This is a good measure of a countrys economic performance.

1.1.2 The scope of marketing

(i). Marketing is as ubiquitous as there are human activities. National,

regional, continental and global economies teem with economic and social

activities that produce goods and services that need to be sold or bought

in diverse markets.

(ii). The range of products and services:

The range and diversity is, simply, unfathomable. These are primary products,

secondary products and finished products and services. These are

agricultural, industrial and mineral products. Human and other services are

equally diverse.

(iii). Markets:

There are many types of markets depending on geography, levels of social

and human and economic development and industrialization.

The level of science and technology:

(iv). The scope of marketing is also greatly influenced by the level of science

and technology which effect, qualify, quantity, pricing distribution (logistics)

and promotion.

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(v). The scope of marketing also covers products (of all type) and services,

including but not limited social services such as health, education and

sports, military service, politics and governance, ideological orientations

and religious faiths meta marketing.

1.1.3 Types of marketing management:

The types of marketing, largely, depend on geography (where) and how the

marketing activity (how) is done.

(i) Domestic marketing

This type of marketing entails home marketing limiting the marketing

operations within the geographical and political borders of the country.

(ii) Regional marketing:

This type of marketing extends beyond domestic to, regional markets around

the home-market. Modern marketing parlance has code named this type

proximity marketing. Ugandas new booming markets in Southern Sudan and

Western Democratic Republic of Congo (DRC) are good examples.

(iii)Export marketing, international, multi-national and global marketing which

have already been defined (1.1.3 1.1.8) fall under this category.

(iv)The How-types of marketing:

These include but are not limited to:

Meta marketing.

Olympic marketing.

Papal marketing.

Pentecostal marketing.

Evangelical marketing.

E-marketing.

Personal marketing.

Black marketing.

Grey marketing.

Agricultural / industrial .. Marketing.

Experience marketing.

Quantum marketing.

Reality marketing.

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Service (kyeyoism) marketing.

Professional marketing.

Prosperity marketing.

Cross border marketing.

Import marketing.

1.1.4 Functions of marketing management:

The whole purpose, essence, mandate and function of marketing management, as a

managerial function and business practice is to enable a consumer of goods and or

services to access them, for consumption or utilization, right from the source of

supply to the point of consumption or utilization. A marketing or sales department, in

any organization is for all intents and purposes, the epitome and embodiment of thefunctions of marketing management.

(i) Designment of an appropriate marketing plan.

(ii) Designment of a suitable marketing department (division) organization

structure.

(iii) Recruiting or advising the human resource department (HRD) to recruit

qualified personnel.

(iv)Training, inducting, motivating and retaining the marketing / sales staff.(v) Conducting market research.

(vi)Executing the marketing / sales managerial functions. Implementing the

market plan.

(vii) Generally, managing the marketing mix (product, price, promotion place

[distribution]).

1.1.5 Marketing management at a glance (synopsis).

(i) Marketing is a well developed academic discipline.

(ii) Marketing is an important managerial function relevant in every human

endeavor it is ubiquitous.

(iii) There are many types of marketing determined by geography, product or

service and methodology used to carryout the marketing functions.

1.2.0 Session Two: Competition:

Definition of competition.

Definition of competitiveness.

Different levels of competition.

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Ugandas National, Regional and global competitiveness criteria for

competitiveness.

Review of international marketing institutions (IMIs) at national, regional and

global levels.1.2.1 Competition:

(i) Definition of competition:

Competition is the striving of market players to share and survive in the

market place.

(ii) Definition of competitiveness.

Competitiveness is the ability to efficiently and effectively sell to and from

domestic regional and global markets.

(iii)Competitiveness is the status and capacity (of a person, company or nation)

to provide an enabling environment for producers (of goods and services),

exports and buyers of those goods and services with international quality

standards and, therefore, are desirable enough to meet the needs of

consumers in the market (at all levels: domestic, regional and global

markets within the principles of the World Trade Organization (WTO).

1.2.2 Different levels of competition:

Competition takes place at different levels. There is competition between individual

players or persons in any human endeavor. There is competition between

companies / firms / organizations / groups / churches / political parties / academic

institutions etc. competition takes place between countries in a region. There is

global competition. There is now a popular parlance that the world has become a

global village market in which the forces of supply and demand are fondly or even

aggressively interplaying.

Figure 01

1.2.3 Domestic regional and global competitiveness:

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Individual

Companies

Nations

The World


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(i) Ugandas competitiveness is adversely affected by a plethora of specific and

generic multi-sectoral inefficiencies validated by empirical evidence

manifested by research (Dr. Robert K. Rutaagi, 2004) findings of this study

as discussed here under.

(ii) The positive factors affecting Ugandas competitiveness:

Superb climate (rains, temperatures, wind seasons).

Good fertile soils.

Flora and fauna.

A good variety of natural resources: water, forests, minerals, oil and gas.

Growing, energy etc and hospitable population.

A good and sophisticated educational system based on the Colonial BritishSystem.

The negative factors that affect Ugandas competitiveness.

Land lockedness.

High production costs.

Political instability.

Lack of adequate science and technology.

Lack of entrepreneurial and managerial skills.

Lack of efficient democratic institutions.

Poor policies.

Corruption.

(iii) World trade organizations (WTO) criterion for measuring competitiveness:

According to WTOs operational principles, for a product or service to be considered

competitive in the global (or nay other) market, that product or service must be able

to enjoy a stable market share of the global market of at least 3.25% for at least two

consecutive years. Based on this principle, Ugandas products and, therefore, are

not competitive. Not even coffee, Ugandas legendary export leader for several

decades. However, coffee, roses and cobalt met the test for a few years before

losing it. Other criteria include but may not be limited to: produce quality, packaging,

competitive prices, efficient distribution systems and promotional programmes.

Box 01: Ugandas top ten leading export products (1990)

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Product Market share Product Market share

1 Coffee 3.4% 6 Electricity 4.4%2 Fish 0.2% 7 Beans and Legumes 0%3 Tea


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International Bank for Reconstruction and Development (IBRAD) (World

Bank).

International Monetary Fund (IMF).

International Development Association (IDA). International Finance Corporation (IFC).

International Trade Centre (ITC) / World Trade Organization (WTO) /

General Trade on Agreement and Tariff (GATT) / Commonwealth

Secretariat (CWS).

United Nations and its Organs.

1.2.5 Africas versus global competitiveness

The World Economic Forum, based in Geneva has, since 1998, carried out studiesto determine African countries competitiveness compared to global competitive.

Results are quite revealing. Generally, African states are not competitive. However,

some countries such as Mauritius, Botswana, South Africa, Egypt and Rwanda are

showing a modicum of competitive growth compared to the world. World economic

forum, Africa competitiveness reports: 1998 / 1999 / 2000 / 2002 / 2004.

1.3.0 Evolutionary Process of International Marketing.

1.3.1 The evolution of marketing.

Stage one: Domestic marketing.

Stage two: Export marketing.

Stage three: International marketing.

Stage four: Multinational marketing.

Stage five: Global marketing.

1.3.2 Domestic marketing:

As the world domestic connotes, this is a stage (one) and form of marketing whereall the factors from conception to consumption are ethnocentric in nature and scope.

Ethnocentricism is defined here a predisposition of a firm to be predominantly

concerned with its viability world wide and legitimacy only in its home market

(Masaaki, Kotabe and Kristiaan Helsen, global marketing management 1998).

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1.3.3 Export marketing:

The home market is a natural predisposition for most manufacturers are marketers.

After they have gained enough experience, then, they use domestic success as a

spring board for international, multi national and global export marketing.

1.3.4 Why must a company export?

To use excess capacity utilization.

To enjoy (exploit) economies of scale.

To diversify and spread risks.

To prolong product life.

To take advantage of government.

Incentives and other economic opportunities.1.3.5 Why must a Nation Export?

To exploit the concept of comparative advantage.

To participate in international mutual exchange arising out of comparative

advantages.

To earn foreign exchange.

To expand home market to international, multinational and global markets.

To create employment for its nationals.

To acquire national identity and inter-cultural involvement.

1.3.6 International marketing

Inter-nation-al marketing, basically, entails marketing between two nations which,

then, becomes a spring board for beyond-home marketing. Although in common

marketing parlance internation-al marketing tends to mean worldwide marketing,

strictly speaking, that is a misnomer which is addressed in 1.3.7 and 1.3.8.

1.3.7 Multinational marketing.

MNM entails marketing in more than two markets but can be as few as three or five

nations or more, encompassing region by region.

1.3.8 Global marketing:

Global marketing, as the word global connotes, is marketing worldwide right from

conceptualization level to consumption level. The marketer employs proactive

willingness to adopt a global perspective instead country-by country or region-by-

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region perspective in developing a marketing strategy (Masaaki Kotabe and Kristiaan

Helsen, 1998).

1.3.9 Summary:

The marketer is analogous to a military Army commander who captures territory by

territory until he or she wins the battle. The marketer start with the domestic market,

moves to export, then international, multinational and, finally, global marketing.

Global marketing has supportive advantages of enjoyment of economies of scale

through standardization of the entire marketing mix chain, thereby attaining

competitive powerthat transcends all other marketers.

UNIT TWO: INTERNATIONAL MARKETING MANAGEMENT

ENVIRONMENT (IMME):

2.1.0 Global Economic environment:

2.1.1 Inevitability of interdependence:

Because of essentially, the concept of comparative and competitive advantage of

nations, different levels of social, political and economic development aggravated by

the equally comparative and competitive advances of science and technology, the

inevitability of social, political and economic interdependence has become a

sacrosanct law to which every nation must bow its knees. For examples Uganda

mainly produces raw materials: coffee, cotton, copper, cobalt, tea, tobacco, tourism,

fish, electricity, beans, flowers, maize, hide and skins, timber, minerals and exports

them to Europe, America, Asia hence she (Uganda) imports: industrial machinery,

general merchandise, pharmaceutical products, industrial inputs, motor vehicles and

petroleum products.

2.1.2 Economic environment in Uganda, East Africa and the World (synopsis):

(i). Economic environment in Uganda: Uganda is predominantly an

agricultural country whose majority population is rurally based. The

industry and service sector are still small and young. The private sector is

too small, young, unsophisticated and donor-driven. The economy, though

growing and macro-economically stable is uncompetitive at domestic,

regional and global level in terms of product quality, quantity, price,

distribution systems and promotional (marketing) initiatives (Dr. Robert K.

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Rutaagi, 2004, world economic forum, Africa competitive reports 1998,

2000, 2002, 2004).

(ii). Economic environment in E.A.C:

The E.A.C comprises of Uganda, Kenya, Tanzania, Rwanda and Burundi.

With a population of 90m people and an average of US$30B GDP, the E.A.C

market is expected to engender a new economic paradigm shift in terms

national, regional and global competitiveness. (Africa Peer Review Mission

2009).

(iii). Economic Environment in Africa.

Many years of tribal and religious wars, colonialism, post-independence

political wars, health epidemics and absence of adequate science and

technology kept the African continent in despicable social economic

conditions which were aggravated by natural disasters, neocolonialism and

poor political, economic and corporate governance. Through economic

integration and enlightened national, regional and global leaderships, Africa is

slowly but surely emerging out of its past socio-econo-political doldrums. The

invisible hand of God is in charge of the positive changes.

(iv). Economic environment in the world:

The dramatic advances of science and technology has made the great

and diverse geography a global village markets for long a popular topic

for speculation but now a reality.

Global leadership is emerging who, unlike, historical conquerors and

imperialists and colonialists are true democrats, peace lovers and

makers and integrationists.

Through economically integrated blocks such as: NAFTA, EU, ASEA,

EAC, ECOWAS etc globalization is being realized with all the benefits

(but also risks) that come with it.

One great risk that globalization engenders is inequitable distribution of

resources (globally) with a tendency to make the rich richer and the

poor poorer. Under globalization, production will (has already been)

surrendered to the developed countries and newly industrialized

countries (NICs) to produce, en mass (based economies of scale) as

much as they can market in the global village, using the best

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technology they have at the lowest cost possible and market them

(goods and services) as liberally and competitively as nobody else can

from the developing world which is totally disadvantaged. Paradoxically

and ironically, the developing world consumerhas the least purchasing

power, propensity to spend leave alone competitive power after its

comparative advantage has been eroded by the Developed Worlds

competitive advantage.

2.1.3 The roles of the World Trade Organization (WTO) and the general

agreement on tariffs and trade (GATT), United Nations conference on trade and

development (UNCTAD) international trade centre (ITC).

In 1948, after the two wards, the International Trade Organization (ITO) was initiated

but failed to take off.

The purpose of the ITO was to facilitate World Trade Damaged during the first and

second World Wars (1914 1944). When the ITO failed to take off an informal

organization called the General Agreement on Tariffs and Trade (GATT) was

established to handle trade matters especially tariffs on goods. In 1994, a more and

legal institution called World Trade Organization (WTO) with expanded mandate to

handle global trade, including the GATT issues which, henceforth, become part and

parcel of WTO.

2.1.4 Regional Economic Trading Blocks:

Refer to section 2.1.3 (IV)

2.1.5 The role of information communication technology (ICT) and the

changing nature of competition. The dramatic advances of modern science and

technology, in general, and ICT, in particular, have greatly revolutionalized domestic,

regional and global trade. Mass production, based on economies of scale, the

improved infrastructure including ICT, economic integrations and new marketing

techniques have all fallen in place to facilitate domestic, regional and global

marketing. The forces of supply and demand are now able to interplay in such a

competitive manner that challenges many theories and practices of marketing.

2.1.6 The role and examples of multinational corporations (MNCs):

A multinational corporation is one which operates in multiple nations. By 1998,

researchers at the United Nations reckon that these are now at least 36,000

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multinationals controlling some 180,000 affiliates (Masaaki Kotabe and Kristiaan

Helsen).

MNCs, from, especially, the developed world, find it imperative to operate multination

ally in order to exploit, in trade: economies of scale, reduced barriers of trade in trade

and investments, the advances of ICT and the need to be closer to the markets in

order to be more competitive. Examples of multinational corporations are: General

Motors, Toyota, Nissan, Microsoft, general Electric, MC Donald, Colgate, Sonny,

Gillette, MTN, Standard Chartered Bank, AIG (Chartis) etc.

2.2.0 Session Two: the Financial Environment:

2.2.1 The Historical role of the US Dollar:

The US Dollar was, and still is, the major and pioneer currency of the World. In the

1970s the US Dollar exhibited signs of weaknesses which almost ruined not only the

US but also the global economy. Soon after the World War II, the United States

agreed to exchange it at $35 per ounce of gold, the system of that era. That brought

about unprecedented financial stability which automatically accorded the US Dollar a

common denominator in World Trade until today. But because of the nature of gold

(scarcity), the wreckage caused by World War I and II (1914 1939 and 1939

1944), different levels of economic development, undeveloped in-fracture and poor

communications and different political ideologies, the initial dollar system continued

to show signs of instability in the 70s to the 80s. Later, in the mid 80s, as the US

economy stabilized, the value of the dollarsowered so high against other currencies.

That precipitated adverse balance of payments of nations as US export became

expensive against cheaper imports. This necessitated drastic interventions by US

and all industrialized countries. As a result, the value of the dollar was forced to fall

throughout the late 80s and the 90s.

2.2.2 The Gold Standard:

The gold standard era (1880 1914) was characterized by paper money of major

nations of the World (especially industrialized nations) being backed by physical

stock of gold held by theirCentral Banks. Each nation, under the gold standard, had

to declare a par value of its currency in terms of gold. The par value of the US Dollar

was $35 per ounce while that of the British pound was 7.3 per ounce of fine gold.

The three main features of the gold standard were as follows:

Exchange rates were fixed.

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Each nations money supply growth was limited by the very gold standard

because of the scarce nature of the metal.

Each nations balance of payments problems were automatically adjusted. In

case of a deficit, by the law of demand supply, gold would flow out of the

country, thereby decreasing economic activities to engender normalcy and

vice versa.

It should be understood that the gold supply grows quite slowly because of the

nature of the metal. Therefore, after the World War I, disharmony occurred between

gold supply and the needs of commerce. It is, generally, believed that attempt to

return back to the international gold stand (IGS) was a major contributing factor to

the great depression because of its incapacity to control inflation.

2.2.3 The interwar years: The Depression (1919 1939):

These years were characterized by wars: World War II, unstable currencies

(inflation), economic protectionism, and poor supply and demand depression. This

kind of situation called for new interventions.

2.2.4 The Development of the current International Monetary System: The

Bretton Woods Conference:

By the time the Second World War ended in 1945, the economies of all the

participating nations such as USA which were not directly involved though relatively

stronger and un-ruined by ravages of war, their opportunities to engage international,

multinational or global trade were minimal. Therefore, the need to repair promote,

develop and integrate World Trade was great. That was also the time the general

agreement on tariffs and trade was faltering and participating nations had withdrawn

to themselves with protectionist stances towards global trade. Inflation was rampant

and the depression of the 1930s had sent shockwaves to the world. The gold based

economic regime had proved disastrous.

In 1944 a World conference was convened at Bretton Woods Resort in Hampshire,

USA where important decisions were taken, negotiations to reform the International

Financial System operating under specific guidelines in the Bretton Woods

Agreements. Relevant institutions were established. These were the international

monetary fund (IMF), the international Bank for Reconstruction and Development

(IBRAD) [the World Bank]), the International Development Association (IDA) and the

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International Finance Corporation (IFC). These are the institutions that drive World

Economies up to today.

2.3.0 Session Three: Political and Legal Environment:

2.3.1 Individual Country Politics:

The World has many nations. Each nation has its own political and economic

systems which are beyond the scope of this study. However, suffice it to state, briefly

that each nation or country has its own politics, depending on its history, geography

and circumstances. Using Uganda as a microcosm of the Worlds Political System, it

has its own Political System. Uganda was created as a British colony in 1894. It

never evolved and integrated as a unified gradual process. It was, simply, created by

European imperial powers. Uganda was, originally, several little nations (tribal)

including and revolving around Buganda which was relatively more organized under

Kingdoms. The colonial master was Britain up to 1962 when she gained

independence. The first post-independence Uganda, under the Uganda Peoples

Congress (UPC) led by Dr. Apollo Milton Obote was overthrown by Idi Amin Dada in

1971 whose military was, in turn, overthrown by Tanzanian Peoples Defense Forces

(TPDF) and Ugandan Exile Forces. The Uganda National Liberation Front (UNLF)

led by Prof. Yusuf Lule, later, overthrown by Godfrey Binaisa, the military

commission by Paul Muwanga before returning to UPC II under Milton Obote who,

too, later was overthrown by Okello Lutwa and Okello Bazilio. The duos were

overthrown by the National Resistance Army/Movement led by Yoweri Kaguta

Museveni in 1986. The monolithic NRA/M has governed Uganda up to February

1996 when multiparty politics were introduced, still under National Resistance

Movement.

2.3.2 Individual country Laws:

The present Uganda is governed under the national constitution promulgated in

1995, which is based on the British common law because of the colonial history. The

Uganda parliament is the political law making body. Uganda has a judicial system

which is fairly independent by African and even international standards.

2.3.3 Multinational / Regional Laws:

These are laws that govern more than one nation or region. For example Uganda,

Kenya, Tanzania, Rwanda and Burundi have some agreements and laws which

govern common interests and institutions. Under the East African community (AEC)

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laws protocols and agreements have been put in place to manage various, social,

political, military and economic interests. Under such supra national laws and

politics, economic integration is slowly but surely being achieved for the god socio

economic development of individual and regional nations throughout the continent

and the World. Beyond EAC other economic blocks are being evolved e.g.

COMESA, SADC, ECOWAS, USA, NAFTA, NATO, EU, ASEAN etc.

2.3.4 International Laws:

These are laws, as the word international connotes are global in nature and

application. Laws: protocols, treaties, statutes, conventions, agreements are

designed and promulgated and enforced by relevant institutions to apply globally.

Such institutions include but not limited to the United Nations System (UNS) e.g.

United Nations (headquarters), UNDP, WTO, ITC, UNCTAD, WHO, UNICEF,

UNESCO, World Bank, IDA, IMF, IFC, ICC, International Court etc. Specific legal

(international) include but are not limited to international standards organization

(ISO), international intellectual property protection, Human Rights, Childrens Rights

etc.

Unit Three: Development of Competitive Strategy:

3.1.0 Marketing Research:

3.1.1 Research Problem Formulation:

Markets tend to be diverse and extremely dynamic. Therefore, for a marketer to be

to operate well and successfully in a market the need to understand the forces

interplaying in the market is imperative, hence the need to carry out research. Failure

to carry out market research is also costly but dividends are high immediately and,

especially, in the medium and long term. In order for market research to succeed,

the problem area to be researched on must be clearly and accurately defined. That

is called problem research formulation. The clich: A well-defined problem is a half

solved problem is self explanatory for market researchers.

3.1.2 Two Broader Types of Market Research:

Domestic Research.

International Market Research.

3.1.3 Six steps of conducting Market Research:

Define the research problem.

Develop research design.

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Determine information needs.

Collect the data (secondary and primary).

Analyze the data and interpret the results.

Report and present the funding of the study.3.1.4 Narrower types of Market Research:

Primary data.

Secondary date.

Desk research.

Field research.

3.1.5 Problems of Primary Research/data:

Costly value for money consideration.

Unreliability (cultural issues, geography, human weaknesses).

Political challenges.

Time management considerations.

Accuracy or inaccuracy of data.

Interpretation problems.

3.1.6 Secondary Research / Data Problems:

Lack of information or too much of it.

Inaccuracy of available information.

Reliability over time.

Comparability of data.

Inaccurate or exaggerated lumping of data.

3.1.7 Survey Methods:

Questionnaire design method.

Sampling methodology.

Contact methods.

3.1.8 Market size assessment:

In market research, market size is extremely important. A small sample of a market

may engender inaccuracies that will, inevitably, lead to wrong conclusions. On the

other had a huge market sample will not only be superfluous but also cost may be

exorbitant. The known methods of market size assessment are:

Analogy method.18


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Chain ratio method.

Cross sectional regression analysis (CSRA).

Trade Audit method.

3.1.9 New market information technologies:

Point of sale (POS) store scanner data.

Consumer panel data.

Single source data eg UEPB, UNCCI, Embassies etc..

Shift from mass to micro marketing.

Continuous monitoring of brand sales / market share movements.

Scanned data are used by manufacturers to support marketing decisions.

Scanned data are used to provide merchandising support to retailers.

3.2.0 Market Segmentation:

3.2.1 Purpose for Marketing Segmentation.

Purposes for market segmentation may be many depending on marketing mix (the

4Ps) but the major purpose is competition intensity and considerations of geography,

culture, economic conditions etc.

3.2.2 Reasons for Market Segmentation:

Measurability of the market.

Size of the market.

Accessibility of the market.

Action-ability about the marketing mix/product, price, places (distribution

channels) and promotion).

Competitive intensity.

Growth potential of the market regardless of the levels of competition and

other economic factors.

Country cream skimming prospects in the case of international market

segmentation.

Global market research indicators.

Entry decisions.

Positioning strategy.

Marketing mix policy, such as standardization or customization, uniform price

of differentiation etc.

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3.2.3 Market Segmentation Approaches:

Geographical approach (country, region.).

Economic e.g. RS capita GNP.

Political e.g. capitalist, industrial, same block. Cultural (sex, age etc).

Cosmopolitan, prosperity.

3.2.4 Basis for Market Segmentation:

Demographics:

Geriatric (elderly) care.

Travel services.

Leisure services.

Medical services.

Urbanization services.

Environmental services.

Socio-economic variables:

Luxury goods for the wealthy.

Cultural factors.

Religious factors.

Political factors/conditions.

Levels (stages) of economic development.

Culture.

3.2.5 Stages of economic development:

Traditional societies.

Pre-conditions for take off. That take-off.

The drive to maturity.

High mass consumption.

3.2.6 The Four (04) cultural dimensions:

Individualism versus collectivism.

Power distance.

Uncertainty avoidance.

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Masculinity femininity.

3.2.7 Segmentation tools:

Cluster analysis.

Regression analysis.

3.3.0 Market competitiveness analysis:

3.3.1 The concept of comparative advantage:

When an economy or country is endowed with natural resources, compared to

others, it is said to possess a comparative advantage over those that are not equally

naturally endowed. For example Uganda has a comparative advantage by being

possessed with rich and fertile soils, good climate, natural forests, fresh water bodies

and minerals.

3.3.2 The concept of competitive advantage:

On the other hand, if an economy or country lacks comparative advantage but if it

has other resources, especially, human resource and advantages to transform its

economy such as managerial, entrepreneurial, educational, political, cultural and

scientific knowledge such an economy is said to possess competitive advantage.

Examples are Japan, Singapore, Malaysia, South Korea etc.

3.3.3 Information Communication Technology (ICT)

ICT is a competitive advantages factor (CAF). With the advert of ICT,

competitiveness policies, strategies, tactics, programmes, procedures and activities

have been greatly enhanced in national, regional and global economies.

3.3.4 The marketing mix

The marketing mix, known as the 4Ps are important variables in the determination

and development of competitive strategy. It is covered else where in the course.

3.3.5 The Market Competitive Strategy (MSC):

In a nutshell, the MCS entails that efficient and effective management of the in

interplay among the marketing mix based on a firms countrys or economys

comparative and or competitive advantage. Basically, a firms economys or

countrys comparative advantage has been overthrown by the competitive advantage

endowed, largely, by human resources, science and technology including the

information communication technology (ICT). Therefore, competitive (not

comparative) is a function of:

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Managerial skills.

Entrepreneurial skills.

Science and technology.

Information communication technology.

Comparative advantage.

The quality of the marketing mix.

Environmental factors (enabling environment).

3.3.6 The competitive structure:

Competitive forces are dynamic and multifarious. They include but are not limited to:

Industry competitors.

Potential entrants.

The bargaining power of suppliers.

The bargaining power of buyers.

The threat of substitutes.

3.3.7 Hyper competition. The Schumpeterian Model of Competition:

Because of the dynamicity of the modern advances of science and technology,

including ICT, there is no known competitive strategy that can last. Schumpeterianist

strategy entails systematic and continuous disruption of the market no matter non

competitive through creative and dynamic innovations. This creates

hypercompetitive advantages in terms of price, quality, and time, know what and

know how. The Schumpeterianism is evident in four main areas:

Cost and quality.

Timing and know-how (and know what).

Strong holds (geographic and market segments).

Financial resources.

3.3.8 Market Interdependency:

The concept of competitive advantage, like the concept of comparative advantage is

interdependent in many ways. There is no firm that can be self sufficient in the long

run. The same applies to the nations of the globe. The developed nations are as

dependent, in many respect, on the developing nations as much the latter are

dependent on the firmer. Even if a firm is self sufficient in the short run, it will some

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emerge that it will be more effective to devote its limited expertise and resources to

what it has the competitive advantage and outsource the other needs (products and

services) to those how enjoy comparative advantage. This is in harmony with the

Schumpeterian strategy to unleash hypercompetitive advantages. The best

examples are computer, airlines and motor firms.

3.3.9 African competitiveness refer to 1.1.5

3.3.10 Ugandas competitiveness refers to 1.2.3 (i iv).

3.4.0 Marketing Entry Strategies:

3.4.1 Target market selection:

In many situations and circumstances, the marketer may use the simple rule of

thumb to determine ones market(s) for goods and services especially the domestic

market which coincides with the marketers residence. For example, when Mukwano

Industries Limited decided to manufacture Mukwano Soap Industry, his target was

Uganda market. Most probably, at that initial stage, he never anticipated that time

would come when his target would focus on other lucrative markets: Democratic

Republic of Congo (DRC), Southern Sudan, Rwanda, Northern Tanzania, Western

Kenya and even Malawi.

3.4.2 Choosing the mode of market entry:

In other circumstances and special situations a marketer may be faced with the

imperative need of analyzing before choosing a strategic mode of entry. Failure to do

that may mean imminent failure sooner than later. Criteria for choosing the mode of

market entry are:

Market and growth.

Risks involved.

Government regulations.

Competitive environment.

Local infrastructure.

Corporate objectives.

Need for control.

Internal resources (Assets and capabilities).

Flexibility.

3.4.3 Exporting:23


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There are many good reasons why a company and a country need to export. The

main ones are two: one, to expand home market and two expand capacity utilization

either base on technical or natural comparative advantages. Therefore, in such a

situation the mode of market becomes direct exporting. But even this mode of entry

can be achieved through other means, not necessarily by the company, itself or the

country.

3.4.4 Licensing:

Licensing takes place when the manufacturer/marketer licenses a person or another

organization to take on the role of doing the export function on commercial terms.

This has the advantage of releasing the manufacturer to concentrate on the core

function of manufacturing and passing on the marketing to another player. However,

it may have the disadvantaged of loosing control of the marketing if the marketer is

not aggressive enough.

3.4.5 Franchising:

Under the franchise arrangement, the manufacturer or powder of a product or

service manufactures or creates a product or services and packages it into a final

firm ready for consumption or application. Even the how may be package. And what

remains is also monitored and influenced by the manufacturer or service creator. In

this way, any adulteration is avoided. The only disadvantage is that it kills motivation

on the part of the marketer but, other things being equal (or favourable) it could also

be in favour of the marketer whose job is made simple.

3.4.5 Contract manufacturing:

Contract manufacturing is an arrangement where the manufacturing of a product or

its parts (components ) are outsourced from another company but not the marketing

function is retained by the original manufacture or another agent may be appointed

to handle the marketing function. This arrangement has some benefits:

It is cost saving especially in labour intensive cases.

It exploits any other available incentives especially in international markets

where more than two countries are involved, each with comparative

advantages (energy, raw materials etc).

Under contract manufacturing and marketing, there is always a risk of nurturing a

future competitor. The contractor is also exposed to any socio-econo political

problems that may affect the contract.

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3.4.6 Joint Ventures:

Joint venture companies (JVC) usually become necessary where investors wish to

expand their operations regionally or internationally and investments are huge. The

common forms of JVCs are:

Majority (>50% ownership).

Fifty: fifty (50%:50% equal ownership).

Minority (>50% ownership).

JVCs may be purely local or, usually, between foreign and local

ownerships.

3.4.7 Cross-border strategic alliances:

CBSA are a Coalition of two or more organizations to achieve strategically significantgoals that are mutually beneficial (Masaaki Kotabe & Kristiaan Helsen, 1998). These

CBSAS include:

Licensing.

Franchises.

Joint ventures.

R&D Partnerships.

Informal arrangements.

Inter-company personnel visit exchanges.

Inter-company meetings between managers.

Network of cross shareholdings.

In Japan, these strategic alliances are termed Keiretsi.

4.0 Unit Four: marketing management strategy development:

4.1.0 Product policy and development:

4.1.1 Product Development Strategies:

Definitions:

(i) A product is a physical, tangible thing that possesses ability to satiate human

needs. Examples include but are not limited to:

Clothes.

Foods.

Drinks.

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Shoes.

Cars.

Soak.

(ii) A product is some non physical, intangible thing but possesses ability to satiatehuman needs. Examples include but are not limited to:

Music.

News.

Beauty.

Treatment.

Education.

n intrinsic product that is non physical, intangible but with ability to satiate

human senses. Examples include but are not limited to:

Brand new products from a laboratory.

Already invented products but new to a company.

Already existing product but only modified for different market segments.

New brands for different markets.

Definition of brand: the marketing motion of brand is a name, term, sign,

symbol, slogan or combination of them identifying a product nationally,

regionally or globally.

4.1.3 Product standardization versus customization.

In marketing, a product can be standardized or customized depending on market

dynamics. A standardized product will have the same features in all market

segments. The main advantage for standardization is that costs are substantially

reduced, both in manufacturing, pricing, distribution and promotional initiatives. The

disadvantage, however, are those local needs, which may not have been anticipated

may adversely, affecting demand. The best example is the pinto model car

manufactured by Ford Company for marketing in Brazilian market. Little did Ford

marketer know that in Brazil, Pinto meant small male genitals. The sales turned out

to be dismal. After realizing this cultural blunder the pinto model was changed to

corcel (horse). The sales were remarkable!

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4.1.4 Push-pull strategies:

The push strategy (the old) entails designing products, using the best

technology and possible and >

Company.

Customers.

Competitors.

Collaborators (distribution channels, suppliers).

The New product development process

Market evaluation.

Opportunity identification.

Screening.

Concept evaluation.

Pre-test market.

Test market.

Roll out.

Cultural contrasts in NPD:

Three main contrasts in NPN have been observed by researchers between North

American, European and Japanese: The NPD is highly influenced by the cultural

dimension dominant in a particular market:

High versus low-context cultures.

Cultural homogeneity.

Hofstedes classification scheme.

4.2.0 Product versus service marketing:4.2.1 Branding strategies:

As stated in the previous section (4.1) products can be physical and tangible or non-

physical and intangible. The extended product can be part of the physical product or

can be totally intrinsic.

Types of brands:

Local brands aim: exploit local culture.

Global brands aim: exploit economies of scale.

Examples of brands:27


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Pharmaceuticals (e.g. Asporo).

Computers (e.g. Microsoft).

Chemicals (e.g. Hoest).

Automobiles.

Bicycles.

Pens.

Garments.

Aero planes.

4.2.7 Factors that affect branding:

History.

Competitive climate.

Market support.

Cultural receptivity to brands.

Product category penetration.

4.2.3 Managing diverse product lines:

A company (manufacturer or trader) may decide to specialize in one product or

service or may engage a wide range of same or different products and within a

limited range in terms of number of products or services. This is the width and length

concept of the product mix. The factors that influence the product mix policy are;

Competitive climate.

Organizational structure.

History of the company/product(s).

4.2.4 Product Piracy:

Piracy entails the who gambit of copying or imitating a product in an away that it

becomes, technically, difficult for an unsuspecting consumer to distinguish between

the original and the fake product. Experience has shown that pirated products are

poor quality but in terms of appearance they may even look better than the original

product. Product pirate can imitate the brand name, the logo, the design and the

packaging. Piracy must be forgotten by all stakeholders because they unfairly

interfere with normal economic activities. This fight can be achieved through:

Lobbying activities.

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Legal action.

Product policy options (use of holograms).

Communication options.

4.2.5 Country of origin (coo) stereotypes:(i). Definition of stereotypes:

A stereotype is a congenital or acquired bras in favour or against a product

because of its country of origin engendered by strongly held cultural beliefs

(stereotypes). Market research has revealed that European consumers view

Japanese-made products as technically advanced and reliable but short on

soul.

(ii). Generally, consumers, especially in developed world prefer domestic productsover imports. In Uganda, it is the reverse!

(iii). For a long time Africans in general and Ugandas, in particular adore a imports

from UK, USA and other parts of Europe and despised India and Japanese and

Chinese products today the situation has changed.

(iv). Strategies to cope with COOSs are:

Product mechanisms.

Pricing mechanisms.

Distribution policy and channels.

Communication policy and mechanisms.

4.3.0 Marketing of services:

4.3.1 Definition Services:

(i). Services are economic activities that provide time, place and form utility while

bringing about change in or for the recipient of the service. Services are

produced by (1) the producer acting for the recipient; (2) the recipient providing

part of the labour; and/or (3) the recipient and the producer creating the service

in interaction. Riddle, Dorothy I, service-led growth (1992) Praeger Publishers,

Green Wood press Inc. New York.

(ii). Services are consumer or producer goods which are mainly intangible and often

consumed at the same time as they are produced.. Service industries are

usually labour-intensive. (Bannock, Baxter and Reez 1972P.372).

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(iii). Service is all those intangible non-physical enjoyable provided by or for human

and other living things and their environment. Rutaagi, Robert, K. (2010).

4.3.2 Status of Services (Globally):

As countries develop, research ahs established their service sector becomes more

dominant past of the economy (GDP). Examples are: Hong Kong (more than 60%),

Singapore, Taiwan and Thailand. Globally, the service sector contributes more than

60% of output. In Uganda service exports (remittances from abroad) reached 88% of

total exports or 44% of total imports. Bank of Uganda, 2005.

4.3.3 Challenges of marketing services:

Protectionism between countries.

Immediate face to face contacts with service transactions.

Difficulties in measuring consumer satisfaction overseas.

4.3.4 The status of services sector in Uganda:

In the last decade, the service sector has been revolutionaries by:

Rapid growth of tourism.

Rapid growth of the food industry.

Rapid growth of the education sector.

Raid growth of information communication technology (ICT) especially thetelecommunication services.

The dramatic growth in the service exports (the Kyeyo industry).

4.3.5 Opportunities in service industries:

Deregulation of service industries:

World Trade organization (WTO) policies and programmes promote and

facilitate service industries globally.

Increasing demand for premium services:

With economic integrations and globalization as well as dramatic

advances of science and technology, consumers are free to access the

best services at competitive prices.

Increased value consciousness (IVC):

Global competitiveness, liberalization, globalization and availability of ICT,

dictate that consumers will want to maximize their benefits value for

money mentality. Through direct sourcing, consumers will make

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phenomenal savings as middle agents (men) become endangered

species.

4.3.6 Opportunities in service industries:

Deregulation of service industries. World Trade Organization (WTO) policies and programmes promote and

facilitate service industries globally.

Increasing demand for premium services:

With economic integrations and globalization as well as dramatic

advances of science and technology, consumers are free to access the

best services at competitive prices.

Increased value consciousness (IVC):

Global competitiveness, liberalization, globalization and availability of ICT,

dictate that consumers will want to maximize their benefits value for

money mentality. Though direct sourcing, consumers will make

phenomenal savings as middle agents(men) become endangered species.

4.3.7 Strategies for domestic and global marketing of services:

Capitalization of cultural forces in the host market. Customize the service

to be in harmony with cultural values and stereotypes. Examples: FordsPinto model in Brazil which was changed to (horse).

Standardization and customization.

Depending on cultural orientation, a standardized service product may suit

a foreign market. If not customize wisely.

Central role of information technology:

The best examples are computers and ICT (mobile phones) in the case of

Uganda. Add value by differentiation:

Differentiation possibilities in service industry, unlike the tangible product

services, are simply, enormous and hence should be exploited.

Psychological premium values can be introduced for customer with boated

egos or self esteem vanities e.g. elderly wealthy clients who abhor waiting

in queues allowed to pay by bank transfers.

4.3.8 Case study: Uganda Service Exporters Association (USEA).

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4.4.0 Pricing Policies and Mechanisms:

Price is the second P of the marketing mix structure. Price is the only component

of the marketing mix that brings in revenue (income) to the organization. And that is

where, precisely, it derives its importance. Compared to the other Ps (place and

promotion and product) which consume money.

4.4.1 Drivers of Pricing Policies:

Company (costs, goals etc).

Customers (price sensitivity, segments).

Competition (nature, intensity).

Channels (long, short, sophistication).

4.4.2 Company Goals and Costs:

Profit maximization policy.

Corporate image policy (low or high).

Rate of return investment (ROI).

Market share policy.

Pricing methodology (cost plus or marginal costing), geographical

differentials, dynamic incremental costing (DIC).

4.4.3 Market Demand:

Determinants of price include but are not limited to:

Customer tastes.

Customer buying power.

Customer habits.

Supply of substitutes.

4.4.4 Competition

Factors that affect competition:

Members of competitors.

Nature of competition (local or foreign, private or state-owned.

Existence of smugglers.

Existence of black/grey markets.

Existence of counterfeit products.

4.4.5 Distribution channels:

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Manufacturers / suppliers policy.

Member of agents.

Nature of agents.

Length of distribution channel.

Sophistication of agents.

Nature of the agreements.

Political environments.

4.4.6 Government Policies:

Possible factors include:

Tax rates (e.g. value addition).

Price control / interferences.

Health and policies.

4.4.7 Factors that influence pricing:

There are many domestic and international factors that influence prices:

Length and cost of distribution channels.

Cost of inputs (source, nature etc).

Costly product features (customer tailored).

Size of the product.

Location of manufacture local or foreign.

Tariff or tax avoidance by adaptation.

Currency fluctuation.

Modification of components, ingredients or packaging materials.

Government policies (taxes, incentives).

Nature and levels of demand and supply.

Company policies (pricing, profit, CSR etc).

4.4.8 Counter (Barter) Trade: Policies and Mechanisms:

Definition: Counter Trade or Barter Trade is the unconventional trade financing

transactions that involve some form of non-cash compensations. Counter Trade is

mainly practiced by former socialist countries and developing countries. But some

developed counties, including United States of America have been known to engage

in Counter Trade. By 1991, it was estimated that 10-15% forms of Counter Trade

was in form of Counter Trade Forms of Counter Trade include:

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Simple Barter:

This entails mutual exchange of physical goods. E.g. in 1988/90, Uganda

exported beans and maize to Cuba in exchange for sugar and other industrial

goods. Clearing agreements:

Trading Countries open accounts for each other. Each country exports and

imports a range of products. After an agreed period (usually a year), the

imbalances are settled in hard currency or specified products.

Buy-back (compensation).

A country imports a technology, turnkey or equipments under the understanding

that the supplier will buy products produced by the technology, turnkey orequipment and the proceeds will go towards paying for the technology, turnkey or

equipment until extinguished.

Counter purchase.

This is similar to buy-back but with a difference to products is unrelated. In the

late 1990s an Italian company (Famagusta) signed an agreement with the

Uganda government to be supplied (GOU) with Army helicopters in exchange for

beans and maize to be supplied by the defunct Foods and Beverages Ltd.

Offset:

This is a variation of counter purchase.

The seller agrees to offset the purchase price by sourcing from the importers

country or transferring technology, to the other parts of the country.

Switch Trading

This is similar to clearing agreement but involving a third party.

4.4.9 Uganda Experience of Counter Trader (1986 1992):

Immediately, after taking power in 1986, the NRM adopted Counter Trade policy as

away of solving foreign exchange problems. By 1990, it had become quite evident

that Counter Trade was, indeed, a primitive turn of trade which was too complicated

to manage by an unsophisticated country like Uganda. The policy was abandoned.

4.5.0 Communication in marketing.

4.5.1 Definition of Communication:

Communication is the sending and receiving of information and subsequent feed

back. The whole essence of communication in marketing is selling and buying

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(marketing) goods and services. Marketing strategies must avoid any misfiring

messages. The messages, by whatever method, must efficiently and effectively

promote and develop the marketing mix (product, price, place and promotion). There

are six (06) steps of developing a promotional plan:

Select target audience and positioning them.

Set specific campaign and objectives.

Define the promotional budget.

Decide a media strategy.

Monitor and assess campaign effectiveness.

Possible constraints of communication:

Language barriers.

Cultural barriers.

Local attitudes towards advertising.

Media infrastructure.

4.5.2 Advertising Budget:

Communication, generally and advertising, in particular, is expensive, yet so

important. It is also new given enough priority by management and all stakeholders

because its results are not easily measured or take long to manifest. Therefore, a

clear policy is important and management commitment is essential. A good budget

ensures success.

4.5.3 The Role of the Media:

In Uganda, there was a time when the media vehicles were limited to Uganda Radio

and Televisions are the Uganda Argus News Paper. Today there is a plethora of

media vehicles for marketers to choose from:

Numerous TV stations (local and international) Numerous Radio stations.

Daily Newspapers.

Weekly Newspapers.

Monthly journals and magazines.

Bill Boards (outdoor).

Cinemas.

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Direct mail (postal services or hand deliveries to homes, social places,

streets).

4.5.4 Advertising:

Advertising means bringing about awareness of a product or service about its: Existence.

Quality.

Utility (application / usage).

Environmental effects (promotion or degradation).

Price.

Source of purchase (availability) (supermarket, shop, pharmacy, bookshop,

mobile agents etc).4.5.5 Factors that influence advertising industry:

Quality of a copy (size, shape etc).

Expenditure considerations (negative, positive, low, high, medium).

Vehicles available (TV, Radio, Outdoor [Bill boards, Posters, Mass Transit ads

e.g. airports, sports, stadia, theatres]).

Newspapers, Magazines, Journals.

Websites.

Consistency: Daily, weekly, monthly, a periodically).

Sustainability: subject to budget and altitude of stakeholders.

4.5.6 Types of Consumer Promotions:

Coupons.

Sweepstakes.

Mail-in offers.

Free samples.

Promotional literature.

Price discounts (feature pricing versus shelf pricing).

NB: Shelf price (computer coded price) is the official price of the product

while feature price is the revised (current) (sale) price at discount.

4.5.7 Recent Developments in the International Media Landscape:

Growing commercialization and deregulation of amass media.

Shift from Radio and Print to TV and Internet advertising.

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Rise of global media (CNN, MTV, STV, LTV, etc).

Growing importance of multimedia advertising tools (the Internet).

Improving monitoring and regulations.

Improved TV-Viewership measurements.4.5.8 Other forms of Communication:

Sales Promotions:

These entails short term activities to boost sales e.g. sampling, price offs,

coupons, sweepstakes, bonus packs, and trade allowances.

Event sponsorships:

This is Olympic marketing where important events e.g. sports are taken

advantage of by advertisers (marketers) to promote, popularize, dynamise andentrepreneurialism demand of their products or service to create competitiveness

and increase sales as well as expanding market share by advertising during

popular sports such as World Cup in South Africa (June/July 2010).

Trade Shows:

Trade shows are very important especially for new products. Direct sales

are possible during a trade show. But also visitors become aware of the

existence of new products or even if they are older but may be new tovisitors who, after the show, may decide to buy.

Trade delegations.

Government agencies, private sectors, marketers, politicians do visit other

countries. While there, they come across new products or old products

and services they were not aware of. As a result, later they buy or seller.

5.0 UNIT FIVE: SALES MANAGEMENT:5.1.0 Sales management:

5.1.1 Sales management simply entails managing sales in such a prudent manner

that goods and or services are able to be moved from the source of supply to the

point of being bought for consumptions.

AManufacturer

(Supplier)

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Sales Management

BConsumer

(Buyer)

In many situations, the consumer never sees or interacts with the manufacturers

(suppliers) whom may be geographically or psychologically separated by a long

distance. The only relationship between consumer and the product is the product

(or service) and the sales man or agent/distributor. Therefore, the physical

presentation of the product and the sales force is very critical in marketing.

5.1.2 Market entry options and sales force strategy:

Direct export (to a consumer).

Sales to a local agent (distributor).

Foreign local subsidiary.

Foreign manufacturing facility.

5.1.3 Sales Force Strategy:

The six (06) steps:

Setting sales objectives.

Designing sales force strategy.

Recruiting and selecting sales people.

Training sales people.

Supervising sales people.

Evaluating sales people.

Sales Force strategy:

This entails, basically:

The structure.

The size.

The compensation.

5.1.4 The Role of Government:

It depends on government policy. Under liberation, privatization and decentralization

policy, the government may have very little role beyond policy formulation and

regulations.

5.1.5 Cultural Considerations and generalization:

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Personal selling, as the names connotes, is characterized by individual activities

which invokes personal human attributes. Hence, cultural values and influence

dominate and are dominated by cultural stereo types (generalizations).

The five (05) cultural dimensions (Geert H. Hofstede):

Power distance.

Individual versus collectivism.

Masculinity versus femininity.

Uncertainty avoidance.

Long term orientation.

Myers-Briers Type Indicator:

Extrovert versus introvert.

Sensing versus intuitive.

Thinking versus feeling.

Judging versus perceiving.

5.1.6 Sales Management dynamics and processes:

Basically, the tenets and precepts of sales management are the same in the

domestic as well as international market. However, because of personal trails

interesting with corporate, country and cultural values, appropriate tailoring of the

marketing mix to individual situations is fundamental. Marketing is a dynamic

managerial functions, academic discipline and economic practice which are

vulnerable to change the only constant in the business world.

5.2.0 Logistics and Distribution:

5.2.1 Definitions:

Logistics and distributions (LAD) means the design and management of a system

that directs and controls that flow of materials into, through and out of the firm acrossthe market to achieve its corporate objectives at a minimum total costs.

Global logistics is similar to the above general definition with a modification on the

market to encompass a cross boundaries of different markets. More complex and,

hence, costly.

Factors that influence logistics and distribution include but are not limited to:

Geographical distance.

Foreign exchange rate fluctuations.

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Foreign intermediaries (export agents, brokers, merchants etc).

5.2.2 Modes of Transport Includes:

Ocean shipping.

Airfreight. Intermodal transportation.

Warehousing and inventory management.

Order processing/delivery/customer service.

5.2.3 Channels of Distribution:

Channels of distribution entail that whole chain between a manufacturer, supplier to

the final consumer. The COD vary from product to product, organization to

organization and country to country. The chain is made even more complex byadding another variable mode of transport.

Examples of a pharmaceutical supplier from china.

(1) Chinese Manufacturer

(2) Domestic Private

Agency

(3) Chinese Government

Agency

(4)Chinese Exporting

Agency

(5)Regional (Africa)

Agency Nairobi Based

(6)Ugandan Manufacturer

Authorized Agent

(7)National Medical

Stores

5.2.4 Free Trade Zones (FTZ)

A FTZ is an area that is located within a nation (for example, Uganda) but is

considered outside of the customs of that nation (Uganda). In USA, such an area is

known as foreign Trade Zone (FTZ). A sub FTZ can be extended to a manufacturing

facility to serve the same purpose. A manufacturing which is accorded a FTZ has a

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status of an independent country. The benefits of a FTZ are enormous in terms of

cost savings to make, especially, exports competitive.

5.2.5 Masquerader operations

In Mexico FTZ are called maquiradora operations. The objectives and strategies are

the same as FTZ.

5.3.0 Session Three: Managing Imports:

5.3.1 Importing Involves the easier part of marketing where the importer (buyer)

(individual person, firm or government) identifies import, needs, locates where to buy

them and goes ahead into procedures of physically bringing them into the country for

various uses.

5.3.2 Why is it necessary for an individual person, firm or country to import?

To satisfy needs.

The goods or services not being available locally or not enough.

The goods or services being a cheaper price or better quality.

The supplier may be paying obligations to the importer in kind.

5.3.3 Mechanics of importing:

Banks are involved.

Establishing letter of credit.

Deciding on the modality of transport.

Verify compliance with national laws.

Examine evaluation foreign exchange status.

Establish liability for import of import duties etc.

5.3.4 Black (Grey) Markets:

Black (Grey markets) occur where these are geographical price differentials

especially markets within close proximity (common borders). Uncontrolled black(grey) market can seriously distort and even destroy markets if not prudently

managed.

5.3.5 Why Black or Grey markets develop:

Availability of similar products in other markets.

Trade barriers must be non existent or low enough to allow competitors to

operate in parallel with authorized agents.

Price differentials must be great to motivate black/grey marketers.

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5.3.6 Methods of combating black of grey marketing:

Strategic confrontation.

Price cutting.

Strategic pricing. Dealer development.

Marketing information systems.

Long term image reinforcements.

Establishing legal procedures.

Lobbying.

5.4.0 Session Four: Export management and Mechanics:

(i) Any export activity to be viable begins with research for the opportunities. There

are two main types of research:

Desk research.

Field research.

Criteria for determining export market segments:

Socio-economic characteristics (demogratic, economic.)

Political and legal characteristics.

Consumer variables (life style, tastes etc).

Financial conditions.

5.4.2 Direct channel of distribution:

Independent middlemen (agents, distributors). E.g. Sogo Shoshas in Japan (e.g.

Yamato or Marubeni). In US: Combination Export Manager (CEM), Export Merchant,

Export Broker, Export Commission House (ECH), Trading Company or Piggyback

Exporter.

5.4.3 Direct Export Marketing:

In DEM, the manufacturer or exporter exports directly to the importer. This has the

advantage of having full control over the whole chain from quality control through

pricing, distribution and promotion. However, it has the disadvantage of being

expensive.

5.4.4 Mechanics of Exporting:

The legality of exports.

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Export information needed by both parties.

Export procedures (manufacturer to importer).

Terms of shipment and sales (incoterms).

Terms of payment (settlement).5.4.5 The Role of Government:

Case study: Uganda Export Promotion Board (UEPB).

5.4.6 Services Exports:

Case study: Uganda Service Exporters Association (Dr Robert K. Rutaagi; USEA)

and Coalition of Service Industries (George Walusimbi, et all, CSI).

BIBLIOGRAPHY:

KEY READING MATERIALS:

1. Masaaki Kotabe & Kristiaan Nelson (1998);

Global International Marketing Management. John Wiley and Sons, Inc. USA.

2. Kotler Philip; International Marketing Management (2003, Prentice Hall, New

York, USA.

3. Gilligan Collin & Richard M.S. Wilson 2003. Strategic International Marketing

Planning. Butterworth & Heinemann, UK.4. Richard. R. Still, Edward. W. Cundiff & Norman A. P. Govon; Sales

Management: Decisions, Policies, and Cases., Third Edition. 1976, USA.

5. Porter Michael. E 1980; Competitive Strategy, Techniques for Analysis

Industries and Competitions. The Free Press, New York, USA.

6. Westwood John; The International Marketing Plan, a Practitioners Guide

(1990) Koran Page Ltd.

7. Allan West; Can you Market? Training, Publications. UK.

8. International Trade Centre/ITC/UNCTAD/GATT. Getting Started in Export

Trade, Geneva 1970.

9. ITC/UNCTAD/WTO & Common Wealth Secretariat. Business Guide to Uruguay

Round 1996.

10. Any other Books & Publications, including various websites (Free research &

reading).

11. Riddle, Dorothy J. Service-led growth (1992) Praegior Publications, Green

wood Press Inc. New York.

12. Moran, Theodore, H. Multinational Corporations. The Political Economy of

Foreign Direct Investment. D.C. Health and Company, 1985.

13. SAK on K. visit/John J. SHAW, International Marketing, Analysis and Strategy.

applied marketing management management [amama]

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