MARKETING

Introduction
We use a variety of goods and services in our daily life: for example, toothpaste, toothbrush,
soap, oil, clothes, food items, telephone and many more. How do these goods and services reach
our home? Obviously, the business people who produce the goods and services have to ensure
that goods and services are to be sold and therefore, they have to make the consumer/users aware
of their products and services and place them at points convenient to consumers. This involves a
number of activities, such as product planning, pricing, promotion, use of middlemen for sale,
warehousing, transportation and more. All these activities taken together are termed as
marketing.
The modern concept of marketing considers the consumer’s wants and needs as the guiding
spirit, and focuses on delivery of such goods and services that can satisfy those needs most
effectively.
All marketing activities like product planning, pricing, packaging, distribution and sales
promotion are combined into one as coordinated marketing efforts. The activities include;
a) Developing a product that can satisfy the needs of a consumer.
b) Taking promotional measures so that consumers come to know about the products, its
features, quality, availability and more.
c) Pricing the product, keeping in mind the target consumers, purchasing power and
willingness to pay.
d) Packing and grading the product to make it more attractive, as well as undertaking sales
promotion measure to motivate consumers to buy the product.
e) Taking various measures for example, after sales services, to satisfy consumer’s needs.
The main aim of all efforts is to earn profit through maximization of customer satisfaction.

Defining Marketing
Marketing is a process of finding consumer’s demand of a certain product or service and finding
means of satisfying the demand. It is a social process in which individuals and groups obtain
what they need, want and demand through creating and exchanging products and values with
others. In other words, marketing is putting the right product in the right place, right price and
right time.

Conditions for Marketing

a) Marketing involves two or more parties with unsatisfied wants.
b) Desire and ability to satisfy these wants or needs.
c) A way for these parties to communicate. That is; the buyer will not buy unless he or she
knows the existence of a product, and the seller will not sell unless he or she knows the
market.
d) Something in value to contribute in the exchange.

Relevant Terms in Marketing

Market: A place where goods are bought and sold. In the context of marketing: A market is a
group of buyers for certain or particular product or service, For example, the market for
accountancy textbooks consists of students in commerce, bookkeeping and specialized
accountancy programs. The market for ladies’ readymade garments consists of girls and women.
Marketer: A person who organizes various marketing activities, such as market research,
product planning, pricing, distribution and more.
Seller: A person who is directly involved in the process of exchanging goods and services for
money, for example, wholesalers, retailers and more.
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Buyer: A person or organization who is directly involved in the process of purchasing goods and
services.
Consumer: The one who actually uses the product or service, for example, you bought a shirt
and gifted it to your friend who uses it. Here your friend is the consumer and you are a buyer.
However, a consumer can also be a buyer.
Customer: A person who takes the buying decision. For example, in a family, the father decides
on the brand of the toothpaste to be used by his children. Here the children are the consumers
and the father is the customer.
Vital market: The interaction of people by using internet (online market).

Types of Marketing
There are three types of marketing, namely primary, secondary and service marketing. These are
described in the following:
Primary marketing: A type of marketing that deals with identification and anticipation of
consumer’s demand for primary products (raw materials), and finding a way to satisfy this
demand. Agricultural marketing boards are concerned with this type of marketing because they
deal with the distribution of primary products.
Secondary marketing: Secondary marketing is concerned with knowing the requirements of the
market. It aims at satisfying the demand of manufactured goods.
Service marketing: This deals with identifying and satisfying consumers demand for service.
The service include banking, insurance, transportation, warehousing, teaching, medication and
more.

Objectives of Marketing
Marketing provides satisfaction to customers: All marketing activities are directed towards
customer satisfaction.
Marketing increases demand of the product: Marketing aims at creating additional demand for
the product. Satisfied customers also help in creating new customers.
Marketing provides better quality product to customers: Businessmen always try to update and
upgrade their knowledge and technologies to continuously provide better products. If they do not
do so, they will be phased out through competition.
Marketing creates goodwill for the organization: This helps in maintaining loyalty to the
product and accepting new products of the same company.
Marketing generate profitable sales volume: Taking care of customer needs and wants by
providing the required goods and services at prices that they can afford and at place and timing
leads to increased sales and profits.

Importance of Marketing
a) Marketing helps business to keep pace with the changing taste, fashion and preferences of
customers.
b) Marketing contributes to providing better products and services to consumers and
improve their standard of living.
c) Marketing helps in making products available at all places and throughout the year, thus
marketing creates time and place utilities of the product.
d) Marketing generates employment for a large number of people, and accelerates growth of
business. People are employed in advertising, personal selling, packaging and
transportation.
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 e) Marketing helps the business in meeting competition.
f) Marketing increases sales volume and generates revenue to the government and
producers.
g) Marketing is a source of income and revenue to producers.
h) Marketing acts as a basis for making decisions.
i) Marketing acts as a source of new ideas.
j) Marketing is helpful in development of an economy. “nothing happens in the country
until somebody sells something”. Marketing is the kingpin that sets the economy
revolving. The marketing organization, more scientifically organized, makes the
economy strong and stable, the lesser the stress on the marketing function, the weaker
will be the economy.

Functions of Marketing
Distribution: This is about deciding how you will get goods or services you want to sell to
people who want to buy them. Having an idea for a product is great, but if you are not able to get
that product to the customers, you are not going to make money. Distribution can be as easy as
setting up shop in the part of a city where your target customers are, but in an increasingly
interconnected world, distribution more often than not now means that you will need to take your
products or services to the customers.
Financing: It takes money to make money. As a business owner, an important function of
marketing a product is finding money through investments, loans, or your personal capital to
finance the creation and advertising of your goods or services.
Market research: Market research is about gathering information concerning your target
customers. Who are people you want to sell to? Why should they buy from you as opposed to
rival business? Answering these questions requires that you do some on-the-ground observation
of the market trends and competing products.
Pricing: Setting correct price for your product or service can be a challenge. If you price too
high, you might lose customers, but if it’s too low you might be robbing yourself of profits. The
"right" price normally comes through trial and error, as well as doing some market research.
Product and service management: Once you have determined the target market and set the price
of your product or service, the goal becomes to effectively manage the product or service. This
involves listening to customers, responding to their wants and needs, and keeping your products
and services fresh and up to date.
Promotion: Most business owners are familiar with the idea of promotion. Advertising your
products and services is essential to attracting new customers and keeping existing customers
coming back. As the marketplace changes, you will want to respond appropriately by tailoring
your promotion messages to new media (such as Facebook or Twitter), by sticking with more
conventional outlets, or by using a mix of the old and new.
Selling: While we tend to think of selling and marketing as being closely linked, selling is the
last on the list of seven functions of marketing. This is because selling can happen only after you
have determined the wants and needs of your customer base, and are able to respond with the
right products at the right price point and time frame.

Functions Performed in Marketing

a) Marketing research
b) Product planning and development
c) Packaging
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 d) Standardization and grading
e) Branding
f) Pricing the product
g) Promotion of the product
h) Distribution of the product
i) Selling of the product
j) Storage and warehousing.

Marketing Mix (Marketing Tools)

Marketing mix refers to the set of actions or tactics that a company uses to promote its brand or
product in the market. It is a set of controllable variables that a firm can use to influence buyer’s
response. Marketing mix is a combination of four elements: price, product, promotion, and place
(Ps of marketing). These are explained as follows.

Product or service: This is the item or service actually being sold. The product or service must
deliver a maximum level of performance otherwise even the best work on the other elements of
the marketing mix will not do any good.
Price: This refers to the value that is put for a product.
Promotion: This are all activities undertaken to make the product or service known to the user
and trade.
Place or distribution: The activities that make the product available to consumers. Once you
have a well-defined marketing mix, try testing the overall offer from the customer’s perspective
by asking customers’ focused questions, such as:
a) Does it meet their needs? (Product)
b) Will they find it where they shop? (Place)
c) Will they consider that it’s priced favourably? (Price)
d) Will the marketing communication reach them? (Promotion)
PRICE
Price is the amount of money or consideration exchanged for the purchase of the product, idea or
service. It is the amount of money that a customer has to pay for a product. Price is different
from pricing in that pricing is a process of setting price for a specific commodity being offered
for sale in the market. Every business operates with a primary objective of earning profits, and
the same can be realized through the pricing methods adopted by the firm. While setting a price
of a product or service, the following points have to be kept in mind:
a) Nature of the product or service
b) The price of similar product or service in the market
c) Target audience, that is; for whom the product is manufactured (high, medium or low
class)
d) The cost of production, these are labour cost, raw material cost, machinery cost,
inventory cost, transit cost and more.
e) External factors, such as economy, government policies, legal issues and more.

Pricing Objectives
Once the objective is set, it gives a path to the business, that is; in which direction to go. The
following are the pricing objectives that clear the purpose for which business exists:

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Survival: The foremost pricing objective of any firm is to set the price that is optimum and help
the product or service survive in the market. A firm must set the price that covers fixed and
variable costs incurred.
Maximizing profits: Many firms try to maximize their profits by estimating demand and supply
of goods and services in the market. The higher the demand, the higher will be the price charged.
Capturing huge market share: Many firms charge low prices for their offerings to capture
greater market share. The reason for keeping the price low is to have an increased sales resulting
from the Economies of Scales. Higher volume leads to lower production cost and increased
profits in the long run.
Market skimming: Market skimming means charging a high price for the product and services
offered by the firms which are innovative, and uses modern technology.
Product quality leadership: Many firms keep the price of their goods and services in accordance
with the quality perceived by customers. Generally, luxury goods create their high quality, taste,
and status image in minds of customers for which they are willing to pay high price. The
following figure summarizes pricing objectives.

Methods of Setting Price

Generally, pricing strategies include the following five strategies:
Cost-plus pricing: This is simply calculating the costs incurred in producing a product and
adding a mark-up. It is one of the simplest pricing method wherein the manufacturer calculates
the cost of production incurred, and adds a certain percentage of mark-up to it to realize the
selling price. The mark-up is the percentage of profit calculated on total cost, that is fixed and
variable cost.
For instance, if the cost of production of product X is 500/= with a mark-up of 25% on total cost,
the selling price will be calculated as;
Selling Price= cost of production + Cost of Production x Mark-up Percentage/100
Selling Price=500+500 x 0.25= 625
Thus, a firm earns a profit of 125/= (Profit=Selling price- Cost price)
Target-return pricing: In this kind of pricing method, the firm sets the price to yield a required
Rate of Return on Investment (ROI) from the sale of goods and services. For example, if soap
manufacturer invested 1,000,000/= in the business and expects 20% ROI that is 200,000/=.
Given that, unit cost is 16 and unit sales is 5000, the target return price will be obtained as
follows:-
Target return price= Unit Cost + (Desired Return x capital invested)/ unit sales Target Return
Price=16 + (0.20 x 1,000,000)/5000. Target Return Price= 56/=.

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Perceived-value pricing: In this pricing method, the manufacturer decides the price on the basis
of customer’s perception of the goods and services taking into consideration all the elements
such as advertising, promotional tools, additional benefits, product quality, and the channel of
distribution, that influence the customer’s perception.
For example, if customer buys Azam products despite less price products available in the market,
this is because Azam company follows the perceived pricing policy wherein the customer is
willing to pay extra for better quality and durability of the product.
Going-rate pricing: In this pricing method, the firms consider the competitor’s price as a base in
determining the price of its own offerings. Generally, the prices are more or less the same as that
of the competitor, and the price war gets over among the firms.
For example, in Oligopolistic Industry, such as steel, paper, and fertilizer, the price charged is
same.
Auction type pricing: This is when the goods are sold in a public place and people compete to
buy the product by offering a higher price than the other in order to buy the product and the high
auction-goer gets the product. There are three types of auctions, namely English, Dutch and
Sealed-Bid auctions, as explained below.
English auctions: In this type of auction, there is one seller and many buyers. The seller puts the
item on sites such as television, and bidders raise the price until the top best price is reached.
Dutch auctions: There may be one seller and many buyers, or one buyer and many sellers. In the
first case, the top best price is announced and then slowly it comes down that suits the bidder,
whereas in the second case, buyer announces the product he wants to buy then potential sellers
competes by offering the lowest price.
Sealed-Bid Auctions: This kind of method is very common in the case of government or
industrial purchases, wherein tenders are floated in the market, and potential suppliers submit
their bids in a closed envelope, not disclosing the bid to anyone.
Differential Pricing: This pricing method is adopted when different prices have to be charged
from the different groups of customers. The prices can also vary with respect to time, area, and
product form. The best example of differential pricing is Mineral Water. The price of Mineral
Water varies in hotels, railway stations, retail stores. Thus, the companies can adopt either of
these pricing methods depending on the type of a product it is offering, and the ultimate
objective for which the pricing is being done.
Competitive pricing: Setting a price based on what the competitors charge.
Price skimming: Setting a high price and lowering it as a market grows.
Penetration pricing: Setting a low price to enter a competitive market and raising it later.
Psychological pricing: Psychological pricing is the business practices of setting prices lower
than a whole number. The idea behind psychological pricing is that customers will read the
slightly lowered price and treat it lower than the actual price. An example of psychological
pricing is an item that is priced 399/= but conveyed by the consumer as 300 shillings and not 400
shillings, treating 399/= as a lower price than 400/=
Demand-based pricing: This is the pricing method which depends on the market demand for the
product. When demand is high, price tends to be high as consumers are willing to purchase.
Also, when the demand for a commodity falls, price decreases as well.
Price determined by the government: This refers to pricing method whereby the government fix
the price for commodities. In Tanzania, prices for products such as gas, fare, water, electricity,
and oil are fixed by the government to avoid exploitation to both producers and customers.

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Price determined by treaties: This is the pricing method whereby buyers and sellers agree on
prices for which goods are to be exchanged in the market.

PLACE/DISTRIBUTION
Place or its more common name “distribution” is all about how a business gets its products to the
customers. Distribution matters for a business of any size. It is a crucial part of marketing mix.
The objective of distribution is to make products available at the right place at right time in the
right quantities. Distribution is achieved by using one or more distribution channels such as
Retailers, Distributors or Sales agents, Direct (e.g., via e-commerce), and Wholesalers.
Distribution channel
Distribution channels can be defined as “all organizations through which a product must pass
between its point of production and consumption”. A product might pass through several stages
before it finally reaches the consumer. The organizations involved in each stage of distribution
are commonly referred to as “intermediaries”.

Why does a business give the job of selling to intermediaries?

After all, using intermediaries means giving up some control over how products are sold and
who they are sold to. An intermediary will want to make profit by getting involved.
Intermediaries are specialist in selling. They have the contacts, experience and large scale of
operation which means that greater sales can be achieved than if the producing company runs
sales operation itself. The main function of an intermediary is to provide a link between
production and consumption.

Table 2: Functions of Intermediaries

Function Activities performed
Information Gathering and distributing, market research and intelligence – important for
marketing planning
Promotion Developing and spreading communications about offers
Contacts Finding and communicating with prospective buyers
Matching Adjusting the offer to fit a buyer’s needs, including grading, assembling and
packaging.
Negotiation Reaching agreement on price and other terms of the offer
Physical Transporting and storing goods
distribution
Financing Acquiring and using funds to cover costs of the distribution channel
Risk taking Assuming some commercial risks by operating the channel e.g., holding
stock.

PRODUCT/SERVICE
A product is anything that is offered in a market to satisfy human wants and needs. It includes
physical objects, persons, place, organizations and ideas. Products can be categorized into the
following categories; tangible products, intangible products, consumer products and services,
industrial products and services. These categories are explained as follows:

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Tangible products: These are physical items which are touchable and can be seen by the naked
eyes, for example, mobile phones, computer, soap, and fish.
Intangible products: These are untouchable and cannot be seen by our naked eyes. They are
non-physical items, but you can feel them. For example, a bank account and net website.
Consumer products: These are products which are bought by end users for personal
consumption. For example, diary items, shirts, and motorbike, as well as consumer services
including postal services, haircutting salon, hair dressing salon, and education institutions.
Industrial products and services: These are items which are bought for further processing or use
in business. For example, raw materials, machinery, and parts. The industrial services include
business advisory services.

Levels of product that create customer value and benefits

Core product: The core product is not the physical product, but it consists of all the benefits
associated with it which make the actual product more valuable. A good example is speed. Speed
can help you to get where you want to go quickly.
Actual product: Actual product is the physical product. In this level, additional benefits and
customer value is added which can differentiate the product which are product name, packaging,
styling, features, and product quality.
Augmented product: In simple words, augmented product means offering after sales benefits
and services. For example, a watch manufacturer may offer a warrant, customer support, and
transport.

Product decision
There are three types of product decisions: individual product decision, product line decision,
and product mix decisions.
Individual line decisions: These are decisions which are related to the development and
marketing of the individual products. The decisions involve: product attributes and branding.
Product attributes are tangible and include quality, design, features and style. Branding is a
process of designing a name, sign, symbol, mark or a combination of these, with an intention of
identifying a product seller and to differentiate them from those of competitors.
Branding
Terms used in branding
Brand: A brand is a name, mark, symbol, or sign given to a product with the aim of identifying
the product and differentiating it from the competitor’s products.
Brand name: A brand name is that part of a brand which can be pronounced when a buyer
orders for the product. For example, Pepsi, Fanta, Omo, and Uhai.
Qualities of a good brand name
 A brand name should be short and simple which can easily be read and remembered
without much efforts. For example, Zuku, Azam, and Movit.
 A good brand name should be different from other brand names.
 A good brand name should be easy to pronounce.
 A good brand name should convey product attributes and benefits.
Brand mark: A brand mark is a part of a brand which can be recognized by sight, but cannot be
pronounced. It takes a form of symbol, sign or mark.

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Trade mark: A trade mark is a legal protection of a product. It is made of a word, letter, number
plus pictorial design. Once a brand is registered, no other manufacturers are allowed to use it,
unless there is special arrangement with the owner. Such trade mark bears an “R” in circle which
always appears like ®.
Copyright: This is a legal protection right which protects the original work. It prohibits
reproducing the product of another person. It is denoted by ©.

Advantages of branding
To the manufacturer
 Reduce advertising costs
 Enables the manufacturer to control price of the product.
 Helps to eliminate a wholesaler in the chain of distribution.
 Helps to differentiate the manufacturer from other manufacturers.
 Branded goods are sold easily.
To wholesalers and retailers
 Less effort is required for sales promotion as products are well known by the customers.
 It helps in displaying programmes in retail stores.
 Helps in standardization of quality.
To consumer
 Branded goods are protected
 Shopping consumes lesser time as branded goods can be easily identified.
 The quality of branded goods is better.
 Prices of branded goods are fixed by companies themselves.

General advantages of branding

 Recognition and loyalty: Customers are more likely to remember your business. A strong
brand name and logo or image helps to keep the company image in the mind of the
potential customers.
 Image of size, quality, experience and reliability.
Disadvantages of branding
 Branded goods tend to be highly priced.
 Branded goods create monopoly of the product since the manufacturers who do not brand
their goods leave the market.
 Branded goods create a venue for production of fake goods, especially for the products
whose brand is popular.
PACKING AND PACKAGING
Packaging is an activity which involves designing a producer’s container in which goods are
packed. It can be a box, bottle, or paper.
Packing is a whole process of putting or arranging goods manufactured in a package.

Factors to consider when designing a package

Shape: The shape of a pack must be attractive to consumer’s view and easy to be stocked.
Size and weight of goods: Size and weight of goods must be considered since large and heavy
goods require a strong package.

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Cost: Cost of material used to make a package should not be expensive, since this will raise cost
of goods. It should be cheap and durable to protect the product and be attractive to the consumer.
Nature of goods to be packed: A product may be solid or liquid, durable or perishable.
Therefore, a package should be designed according to the nature of the product packed.
Attractiveness: An attractive package has an impact to consumer buying decision.

Reasons for packing and packaging

 To protect goods from damage.
 To prevent loss by evaporation in case of products like gas and petroleum.
 To make the handling of goods convenient.
 To facilitate branding and labelling
 To make the product look attractive.
 To protect goods against atmospheric conditions, such as bad weather.
 To reduce transportation costs and warehousing space occupied by the goods, since it will
be easier to transport and store packed goods in a warehouse.

Advantages of packaging and packing

 Goods are protected from damage, especially when being transported from manufacture’s
premises to the consumer.
 Packed goods are easily advertised.
 A package can be used for other purposes when the product in it has been consumed.
 It ensures hygiene for food products stored with other goods.
 Packed goods are easily handled.
Disadvantages of packaging and packing
 It increases the cost of production to the manufacturer.
 In the process of opening, consumers may not open the package properly thereby
damaging the product hence loss to the consumer.
 Packed goods are more expensive.
STANDARDIZING AND GRADING
Standardization: This means establishing a standard based on physical properties or quality of
any product. It is the whole process of setting specifications or standards to which all products
made must conform, such as size, colour, appearance, chemical contents, and ingredients.
Grading: This is the sorting of products into classes made up into units possessing similar
characteristics of size, quality, colour, shape, and any other specifications, which can be fixed or
varying. Fixed grading refers to a process whereby the same standards are used year after year,
whereas variable grading is the process in which specifications are changed in accordance with
the quality of goods produced from year to year. Fruits and vegetables are graded in this way.
Advantages of grading
 Reduces cost of advertising and marketing since goods are well known to the consumers.
 Have wider market: can easily be sold to distant parts of the market as buyers can order
goods according to grades.
 Make selection by consumer easy: consumers spend less time in selecting goods.
 Prestigious: consumers find it prestigious to use graded goods.
 Helps in future grading because buyers are assured of the quality of goods.

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  Easy realization of claim: in case a seller has insured his or her goods and has sustained a
loss, the insurance company will find it easier to assess and compensate the loss.
 Simple and cheaper financing: a seller of graded goods can easily obtain loan from
financial institutions as the value of goods can easily be accessed.
Product decision
This is a decision related to the product that engage in the same marketing efforts. Types of
outlets and price ranges also are sold to the same customer’s group. Product line decision
includes product line length decision and Product line expansion. on the one hand, product
line length decision involves a number of products in a product line. On the other hand, product
line expansion involves adding number of products in the existing line. There are two ways to
expand the product line: one is line filling, which means adding an item(s) to the existing range
of line. For example, when Coca Cola company adds Coca-Cola light and Coke zero to Coca-
Cola products, as the figure below illustrates.

Line filling
Line Stretching: this means lengthening the line beyond its existing range, i.e., introducing new
product to the existing line. For example, when Coca Cola company adds Sprite, Cock zero,
Stoney Tangawizi etc, to the Coca-Cola line, as demonstrated below.

Line stretching
Product development
Product development refers to creation of products with new or different characteristics that offer
new or additional benefits to the customer. There are two ways to get a new product:
modification of an existing product or its presentation (innovation) and formulation of new
product that satisfies a newly defined customer wants or market niche (creativity). Market niche
is a subset of the market on which a specific product is focused.
Steps involved in developing a new product
 Idea generation
 Idea screening
 Concept development and testing
 Marketing strategies
 Business analysis
 Product development

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  Test marketing
 Commercialization

Product life cycle

The term product life cycle refers to the length of time a product is introduced to consumers into
the market until it's removed from the shelves (market). When a new product develops and
launches, it goes through a sequence of four stages, namely introduction stage, growth stage,
maturity stage, and decline stage. These stages are described as follows:
Introduction stage: In this stage, a product is introduced to the market, product sales growth is
slow. A company struggles to build product awareness to the target market.
Growth stage: In this stage, the product is already known to customers, sales start to increase and
a company looks for reasonable market share and brand preference.
Maturity stage: In this stage, sales are stationary, neither increase nor decrease. The main
objective here is to maximize profit by sustaining the market share to the last level.
Decline stage: In this stage, the product sales start to decline. The product marketing mix
decision involves different strategies. The company can harvest the product in the hope of
increasing profit or liquidate it. The following figure illustrates product life cycle.

A product life cycle

Characteristics of a successful product

a) Provides a solution to the problems, needs and wants.
b) The product is easy to use.
c) Provides a better user experience.
d) It is durable and attractive.
e) Minimizes costs to better profits margin.
f) Pricing should be according to quality of the product.

PROMOTION
Promotion is a marketing communication process to remind, inform and persuade buyers to buy
the organization product. It is made up of possible promotional mix, which include advertising,
sales promotion, personal selling, publicity and public relations.
Promotional mix
Promotional mix is all forms of communication that an organization uses to establish meaning
for its product or service, as well as a way to influence the buying behaviour of targeted
customers. Promotional mix should be designed in a way that it informs the target market
audience about the value and benefits of the product or service offered. The promotional mix
components are shown in the figure below:

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Publicity
This means attracting public attention to a product or service. It involves gaining of public
visibility or awareness for a product or service of the company via media.
Objectives of publicity
There are several objectives of publicity. The common objectives of publicity have been
discussed in brief here under;
Building corporate image: Through publicity, a company can build or improve its corporate
image. People trust more on what press reporters, columnists, or newsreaders say via mass media
independently than what the company says. Publicity highlights the company’s name and
operations. It popularizes the name of the company.
Assisting middlemen and salesmen: Publicity can help middlemen and salesmen in performing
the sales-related activities successfully. Information conveyed through publicity speaks a lot of
things on behalf of sellers. Publicity makes selling tasks much easier.
Building trustworthiness: Sometimes, publicity is targeted to disseminate information more
reliably. Customers do not express doubts on what publicity appeals. Customers assign more
value to information supplied by mass media via publicity than by the advertisement.
Removing misunderstanding or bad image: Company can defend the product that has
encountered public problems. In many cases, publicity is aimed at removing misunderstanding or
bad impression. Whatever a publicity conveys is more likely to be believed.
Building interest on product categories: Publicity attracts attention of buyers. Due to more
trusted news, people build interest in various products and activities.
Public Relations (PR)
Public relation is a creation, promotion and maintenance of goodwill and favourable image of an
organization to the public. It is the strategic management function that helps an organization
communicate, establish and maintain communication with the public. This can be done without
the use of media.
Importance of Public Relations
When a company is involved in manufacturing or buying of products and selling it to make some
profit what is the need for public relations? Why do companies invest so much in public relations
practice? Why do they have a PR department? Why are the PR experts appointed?
The answers to the above questions are as follows:-
Increases awareness: The company and the PR department primarily focuses on spreading
awareness by making people understand the product specifications and brand values.

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Creates brand image and reputation: The company has a chance to improve its image and build
up a reputation among the public through public relations practice.
Develops loyalty: The customers generate a loyalty factor for the brand because of an intense
public relations practice. They tend to buy from the company repeatedly.
Promotes goodwill: In the long term, public relations practice paves the way for creating
substantial goodwill for the company.
Builds trust and credibility: The repetitive brand promotion done in a way to align the
company’s objectives to those of the society and the target audience, develops trust and
credibility among the public.
Types of Public Relations
Media relations: The PR department collects information from the press or media sources while
maintaining friendly relations with them. This data is used by the company to plan its marketing
strategies.
Investor relations: Investors are essential to the organization. Hence, the PR department keeps
them informed, manages their events, releases financial reports and manages queries and
complaints.
Government relations: Adherence to various government regulations, such as corporate social
responsibility, employee welfare, consumer protection, and fair trade practices. Builds an
organization’s relationship with the government.
Community relations: Society plays a crucial role in deciding the company’s as well as the
product’s future. An organization needs to create a positive image of the brand by supporting
social practices like say no to child labour, child education, equality, environmental protection,
and so on.
Internal relations: Communicating with the employees and counselling them on their
responsibilities, duties, and actions helps in their better performance and long-term existence in
the organization.
Customer relations: Interaction with the valued customers and potential consumers is necessary
to know their feedback, suggestions, interest, and priorities. This data is required to prepare
further business-related strategies.
Marketing communications: The company uses different marketing strategies like brand
awareness program, product launch, marketing campaigns, product positioning, etc
Functions of Public Relations
Product publicity: The company organizes brand and product promotion through sponsorships to
gather customer’s attention.
Press relations: The company uses the press or the media to provide information about the
product to the customers.
Lobbying: The PR experts communicate with the government officials and the legal department
to support the favourable regulations and defeat the unfavourable ones.
In-House journals: The brands launch their magazines and booklets to promote the products
among the customers. It also publicizes the annual reports, newsletters, websites, brochures, and
annual reports to capture the target market.
Corporate communication: The PR department is continuously engaged in providing
information about the product and the brand through internal and external communication.
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Special events: The PR experts organize events such as charity event, promotional events or
contests to capture the attention of the media.
Public service activities: The companies often stand for social causes. They invest their time and
money and ask their employees to support such causes. This indirectly enhances public relations
in the organization.
Counselling: At the time of product failure or poor performance, the PR department provides
suggestions and advice to the management.
Personal Selling (face to face selling)
This is the process of person-to-person communication, between a sales person and a prospective
customer in which the former learns about the customer’s needs by offering to customer the
opportunity to buy something of value, such as goods or services.

Importance of Person Selling

Increase personal contact with customers: personal selling allows salesmen to contact their
customers directly. This helps to establish a long term business relationship between the firm and
its customers.
Increases sales: sales of the company will increase as the customers are directly influenced by
salesmen to purchase the product.
Suitable for introducing new product: personal selling is an effective way of introducing new
products to the market. This is because salesmen can easily explain to their customers about the
uses and benefits of the products, also clear some doubts from the customers.
It gives immediate feedback: personal selling enables the seller to receive instant feedback from
the customers since they communicate face-to-face.

Challenges of Personal Selling

Covers small area: personal selling covers only areas which can be easily reached by the
salesman, unlike advertising which covers a very large area.
Time consuming: much time is wasted in explaining and convincing a person to buy a product.
It is expensive: the management has to incur a lot of training cost to train salespersons. This
increases prices of goods.
Contradicting information: different salespersons may provide different information to
customers.
Sales Promotion
Sales promotion is the process of persuading potential customers to buy the product. It is
designed to be used as a short-term tactic to boost sales. It includes several communication
activities that attempt to provide added value or incentives to consumers to stimulate immediate
sales.
Methods used in sales promotion
There are various tactics used in sales promotion. These include trade fair and exhibitions, free
samples, showroom sales, gifts, window displays, credit facilities, after sales services, guarantee,
discounts, psychological selling, and coupons.
After-sells services: these are free services offered after customers have purchased products. For
instance, a computer seller may offer free transport and installation.

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Coupons: Coupons such as 50% off, save 100 on purchase of 500, buy two get one free are
frequently used to attract customers towards the products of the brand.
Premiums: These are low-cost items given to customers at a discount or for free to build loyalty
and fascinate customers. Logo pens, key holders and coffee mugs are typical examples of
premiums.
Incentives: Incentives builds the customer’s excitement. Thus, marketers conduct contests, lucky
draws and provide rebates to their loyal customers to retain them with their product. This also
attracts the new customer group toward the product.
Product samples: Providing samples of the new product with other famous products of the
company also increases the sales of the products.
Sponsorship: This is when a company pays a fee to put its name and logo on a physical site.
Product placement: many realities shows a mug having a logo of a particular drink name kept in
front of celebrities. That is a product placement method of sales promotion. This method brings
recognition for the brand.
Loyalty programs: It is also known as buyer programs. In these programmes, companies award
their customers for the purchases.
Point- of- purchase displays: almost everywhere particularly corners are made displaying the
products of a specific brand. They are usually placed in high traffic areas and encourages
impulse buying.
Objectives of Sales Promotion
To announce new products: Encourage customers to buy a new product, complimentary
samples may be dispersed, or money and stock allowance can be awarded to business reserve
and sell the product.
To fascinate new consumers: New consumers can be fascinated by the allocation release of
complimentary samples bonus, contests and the same products.
To encourage existing consumers to purchase more: Existing consumers can be encouraged to
purchase more by knowing more about a commodity, it’s elements and uses.
To help the company stay competitive: Sales promotion can be initiated to meet competitions
amongst companies.
To raise sales in the off-season: Buyers can be inspired to use the goods created in the off-
season by displaying them the variations of uses of the products.
To raise the stock of the business buyer: Retailers can be encouraged to maintain a stock of
more units of products so that mere sales can be enacted.

Advantages of Sales Promotion

Produces immediate sales: Because of this kind of sales promotion measures, people get very
excited to buy more. It generates excitement, and customer again wants to purchase the product.
Prevents competitor entry or promotions: Any competitors who are trying to enter the market
and attain your market share cannot do so when you go ahead into sales promotion because if
they are already in an established darn, they are doing very well. On top of that, if you come up
with your offers in sales promotion measures, then the competitors cannot do anything in this
matter.

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Measurable results can be produced: Measurable results can be produced because it is a short-
term event. Thus, the sales volume generated during your sales promotion period can be easily
measured.
Helps to gain distribution channel support: A distribution channel is nothing but the people
involved in distributing your product. It could be a dealer, retailer, etc. Thus, you get to put your
product by using sales promotion tools as well. If you give discounts or deals to your dealers,
then they help you to sell your product, and this could benefit and increase your sales.
Easy to design and implement: In advertising, there are so many costs involved, so many
competitors are involved, so it becomes challenging to decide what kind of advertisement should
you come up with and how it should be. Out in the case of sales promotion, it is relatively easier
to design and implement your activities: you can calculate your costs and their effects on the
sales accordingly.

Disadvantages of Sales Promotion

 It is for the short-term.
 Excessive use of it can also harm the brand value.
 It may create confusion in the customer’s mind.
 It attracts only price switches.
 Sometimes it gets mistreated by both merchant and customers.
ADVERTISING
Advertising is a process of informing existing and potential customers about the existence of a
product or service in the market. It is a means of communication with the users of a product or
service. In other words, advertising is a profession of producing advertisements for commercial
products or services.
Advertisements: Advertisements are messages paid for by those who send them and are
intended to inform or influence people who receive them. Advertisement provides information
about the following:
 Quality of the product or service
 Name and contact of the product
 Where to obtain the product or service
 What does the product or service offer?
 Price of the product or service
Types of Advertisements
Informative advertisements: These types of advertisements aim at informing people that a
certain product or service is available.
Persuasive advertisements: These types of advertisements aim at influencing (persuading)
consumers for buying a particular product especially in the presence of several similar products
in the same category.
Competitive advertisements: These are aggressive forms of advertising that penetrates into a
rival’s market in an attempt to capture it and push the competitor out of the market if possible.
Product advertisement: This aims at promoting sales of a particular brand of a product. The
brand name of the product is persistently featured in the advertisement.
Reminder advertisement: Reminder advertisement reinforces previous promotional information.
The name of the product, testimonials of past customers, public response, and sales techniques

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are repeated in the hopes of reminding past customers and harvesting new ones. It is used to keep
the public interested in, and aware of a well-established product that is most likely at the end of
the product life cycle.
Generic advertisement: Generic advertisement is the advertisement designed to promote name
recognition for a firm and securities as investments, but does not recommend specific securities.
Generic advertising tends to use mass media as a way to promote the firm. TV, radio, billboard,
magazine, newspaper, and website ads are common forms of mass media. The ads highlight the
name of the firm, and perhaps the firm's contact information as well, and are designed to
generate public awareness of the firm. They will not, however, mention specific
recommendations that the firm is currently making or has made in the past.
Objectives of Advertisements
 To inform customers of newly introduced product in the market.
 To increase sales of an already existing product.
 To penetrate new geographical areas where the product was not being marketed before.
 To inform customers of changes in price, use and quality of an existing product.
 To build and maintain the company’s image and reputation.
 To make the customers recognize the brand name of the product.
 To supplement the salesman’s efforts in selling a product.
 To reach people who may not be accessible by salesmen.
 To know the opinions of customers about the product.
 To create employment opportunities for employees in the advertising agencies.

ADVERTISING MEDIA
Advertising media is the means through which the advertisement is transmitted to the public. The
term media in this context refers to the channels of communication used by the advertising
industries, such as newspapers, television, and radio. Some of the advertising media are as
explained in the following:
a) Newspapers
Newspaper advertising can promote your business to a wide range of customers. Display
advertisements are placed throughout the paper, while classified listings are under subject
headings in a specific section. Examples of newspapers are shown in the following.

Newspapers
Advantages of Newspaper Advertisement
Last for long time: an advertisement can stay in a newspaper for long time, and therefore, it
cannot be forgotten easily.
Easily circulated: newspapers can easily be circulated among people, a single person can buy a
newspaper, but the newspaper can be read by many people.

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Can reach specific region and target market: newspapers are capable of reaching specific
market and regions.
Gives detailed information about the product: newspapers advertisements enables the advertiser
to give more details about the product. Some details like price and where they are obtained can
be given.

Disadvantages of Newspaper Advertisement

The message reaches those who can read only: Illiterate people cannot understand newspaper
advertisements because they cannot read.
Lasts for short time: The life of a Newspaper is very short. If the advertisement is not seen on
the day: it appears in the newspaper, it goes waste.
Limitation in language: Newspapers are limited in language. Those who do not understand such
language cannot be reached by the advertisement placed on it.
Not flexible: Newspapers cannot easily be changed. Once the advertisement has been published,
it is difficult to change if there some errors. This may result in an increase in the advertisement
cost by publishing a new advertisement.
Newspapers are expensive: Newspapers are expensive to buy and therefore require people to
spend money to buy them. Few people can afford such costs.

b) Magazine
Advertising in a specialist magazine can reach the target market quickly and easily. Readers
(potential customers) tend to read magazines at their leisure and keep them for longer, giving the
advertisement multiple chances to draw attention. Examples of magazines are as shown the
following figure.

Magazines
Magazine advertising has long been considered one of the best ways to use print media to
promote a business, a product, or even just an exciting opportunity. As the world moves away
from the world of print to the world of digital, does this marketing investment still make sense?
Here are the pros and cons of magazine advertising to consider for the 21st century.

Advantages of Magazine Advertising

Magazine advertising can be targeted to specific people: If the magazine is for children, most
children will get the advertisement. Magazine reaches out to a customer base that is within a
targeted demography.
Magazines have a long life span: This is the true power of the magazine advertisement. The
advertisement which was advertised in magazine in 2000, it can be seen and read in 2030
provided that the magazine is in good condition.
There is the possibility of pass-on advertisement exposures: People read magazines when they
visit different offices as they wait for services. Friends will give magazines to each other to read.

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Magazines may be read at coffee shops, bookstores, or even at the beach. Some customers read
magazines while waiting in a checkout line at the grocery store. All of these examples are
instances where pass-on exposure can happen for a brand.
It’s an affordable print advertising option: According to information from Entrepreneur,
magazine advertising can start for as little as 1000 Tsh. That is cheaper than some newspaper
advertising, phone book advertising, and even radio or TV. This makes it an affordable
marketing option for a business of almost any size.
Magazine has multiple design options: Magazine advertising can be text only, or it can be a full
display advertisement. It can be placed on the inside front cover or hidden in the back pages. It
can be a small mini-article that looks like it was written for the magazine.

Disadvantages of Magazine Advertisement

Advertising space can be expensive: If the advertisement is in a very popular magazine, to
purchase the inside front cover for advertising space can be very expensive.
Sometimes magazine advertisement won’t be seen: Magazine advertisements can sometimes be
put in what is known as the “graveyard.” These are the pages at the back of the magazine. Many
traders skip over these pages since they do not contain any meaningful content.
It may give readers the wrong impression: There are many unintended ways someone can
interpret a magazine advertisement. If what is communicated to the reader is negative in any
way, even if unintended, then the result is going to damage the brand. That damage can spread if
the readers tell their friends, who tell their friends, and so forth.

c) Radio
Advertising on the radio is a great way to reach your target audience. If the target market listens
to a particular station, then regular advertising can attract new customers. However, sound has its
limitations. Listeners can find it difficult to remember what they have heard, and sometimes the
impact of radio advertising is lost. The best way to overcome this is to repeat the message
regularly, which increases the costs significantly.
Advantages of Advertising Using Radio
Radio is flexible: Among all the media, probably radio is the most flexible as it has a short
closing period. Radio commercials can usually be produced in a relatively short time, and if
required, the advertised message can be changed almost just before broadcast time. Same
message can be adjusted in different languages to suit market conditions.
Radio has broader coverage: radio advertisements covers large area, and is capable of reaching
a large number of people in a very short period of time.
Suitable for illiterate: Radio involves the use of sound which makes it easy for the people who
cannot use written media like magazine and newspapers.
It is cost effective: advertising through radio is cheap because of low production and
transmission cost of the media.
Easy to reach the target market: Radio can reach the targeted group effectively by creating
unique programs like sports and children program.

Disadvantages
Lack of a visual element: The most fundamental problem associated with radio is lack of a
visual element. The radio advertiser cannot show or demonstrate the product, or make use of any

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other visual appeal. As discussed earlier, in creating brand awareness, package identification
often is critical for many advertisers considering the increasing number of large retail stores in
cities with self-service. In rural markets where the literacy rates are quite low, package
identification plays a major role in brand selection.
Limited listener attention: It is difficult to attract and retain radio listeners attention to
commercials. Programme switching is frequent among listeners and they often miss all or some
of the commercials. Possibilities of distortion in radio broadcast are high, and this irritates the
listeners, as the result, commercials are missed.
Frequent repetition create boredom: too much repetition of the advertisement in radio may
create boredom to the listener and opt to turn off the radio or switch to another station.
Life span is very short: the life span of radio advertisement is very short compared to magazine
and newspaper where the advertisement can last for a long time.
Costly and time consuming in preparation: the advertisement takes time to be produced, and
requires special sound facilities which are expensive to obtain and produce.

d) Television
Television has an extensive reach and advertising this way is ideal if you cater for a large market
in a large area. Television advertisements have the advantage of sight, sound, movement, and
colour to persuade a customer to buy the company’s product. They are particularly useful if you
need to demonstrate how your product or service works.

Advantages of Television
The following are the advantages of using television as an advertising media:-
Has broader coverage: Advertising through television can reach a large number of audience at
the same time.
Combines sight and sounds: television provides a combination of sound and images which helps
the audience to interpret the advertisement.
A product demonstration can be made: through television, products can be shown and a
demonstration can be made and explained to the viewers.
It provides colour visibility: television provides colour visibility which makes an advertisement
more attractive to the viewers.
Disadvantages of Television
The following are disadvantages of using television as a media of advertising:
It is costly: advertising through television is expensive compared to other medium of
advertisement, such as radio and newspapers.
Not suitable where detailed information is required: where the product requires detailed
information, television is not suitable.
No audience selectivity: it is difficulty to select audience on television as one advertisement tend
to reach a large number of people. Therefore, the advertisement may not be effective.

e) Directories
Directories list businesses by name or category (e.g., Yellow Pages phone directories).
Customers who refer to directories have often already made up their mind to buy. They just need
to decide who to buy from.

f) Outdoor and transit

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There are many ways to advertise outside and on-the-go. Outdoor billboards can be signs by the
road or hoardings at sport stadiums. Transit advertising can be posters on buses, taxis and
bicycles. Large billboards can get your message across with a big impact. If the same customers
pass your billboard every day as they travel to work, you are likely to be the first business they
think of when they want to buy a product. Even the largest of billboards usually contain a limited
amount of information: otherwise, they can be difficult to read. Including your website address
makes it easy for customers to follow up and find out more about your business. Outdoor
advertising can be very expensive especially for prime locations and supersite billboards.
g) Direct mail
Direct mail means writing to customers directly. The more precise the mailing list or distribution
area, the more of the target market the business will reach. A direct mail approach is more
personal, as it can select the audience and plan the timing to suit the business. A cost-effective
form of direct mail is to send newsletters or flyers electronically to an email database.
h) Catalogues, brochures and leaflets
Catalogues, brochures and leaflets can also be distributed to the target market. Including a
brochure with direct mail is a great way to give an interested customer more information about
the products and services offered.
i) Online
Being on the internet can be a cost-effective way to attract new customers. Internet can reach a
global audience at a low cost. Many customers research businesses online before deciding whom
to buy from. A well-designed website can entice customers to buy the product. There are a
number of ways you can promote the business online via paid advertising or to improve the
search engine rankings.
Other ways to advertise business online include promoting the products or services on social
media sites, blogs, and search engines and other websites that target audience visits. Social
media such as WhatsApp, Face-book, Twitter, Instagram, and Telegram are mostly used
nowadays.
j) Outdoor advertising
Outdoor advertising means exhibitions of advertisements on street corners, railways stations, bus
stations, on moving vehicles and many more, intended to attract the ready attention of the
passers-by.
Benefits of Outdoor Advertising
 Customers will be immediately aware of the message
 Tourists and travellers depend on outdoor advertising
 Full colour eye catching design as big as the great outdoors
 Increased sales with just one glance
k) Advertising mail
Advertising mail, also known as direct mail (by its senders), junk mail (by its recipients), or ad
mail, is the delivery of advertising material to recipients of postal mail. The delivery of
advertising mail forms a large and growing service for many postal services, and direct-mail
marketing forms a significant portion of the direct marketing industry. Some organizations
attempt to help people opt out of receiving advertising mail, in many cases motivated by concern
over its negative environmental impact.
Factors to consider when choosing an advertising media

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If the medium is unsuited the whole amount of money spent on the advertising campaign shall
turn to be a waste. The advertiser, therefore, while selecting the media, should consider the
following factors:
Class of the audience: The advertiser must note the class of the audience to be influenced by the
medium. The audience can be classified into different groups according to their social status,
age, income, educational standard, religion, and cultural interests. They may also be divided
according to sex, men and women.
Nature of the competition: The nature of the competition exerts greater influence of the
selection of the media. If the competition is stiff utmost care is needed in the selection of
medium, and a larger advertising budget is also required.
Reputation of the medium: Newspapers and magazines can offer a beautiful illustration for the
reputation of the media. There are few Newspapers and magazines which have international
reputation with a high readership. Advertisements in such magazines and Newspapers are
generally recognized and believed as true. Such advertisements also add prestige to the product.
Time and location of buying decisions: The location of the audience and the time by which it
should reach them must also be considered. This enables the advertiser to keep his retail outlets
in the proximity of the customers.
Target group: Accessibility of the medium to the target group is important. Thus, choose the
media that targets the intended group.
Geographical coverage: The media which offers a wide geographical coverage will be suitable
for a company with a wide geographical market.
Duration: An advertisement that is intended to last for a long time can be put on a Newspaper,
while others can be done on radio, and television.
Speed or urgency of the advertisement: When an advertisement is urgent, then a quick medium
such as radio or television should be used.
Convenience: The media chosen should be easily accessed by both the company and the
customers.
Cost of the advertising media: A medium which is cost effective will be preferred.
Nature of the product: A product which is meant for general consumption will be advertised in a
medium that has a very wide coverage, such as a radio.
Quality of the advertisement: The quality of the advertisement produced by a medium
influences its choice by advertisers. They prefer the medium that produces quality
advertisements.
Physical characteristics of the medium: A medium with a combination of various characteristics
such as verbal, visual, colour, motion, and written word effect would be more appealing to wider
audience. For example, television.
Literacy level of the target group: Most literate people can be reached through written media
such as magazines and Newspapers. Others (illiterate) can be reached through the use of radio
and television.
Time: If television or radio is used, the time for advertisement should be convenient to the
audience. For example, the time between 19:30 pm to 21:00pm is suitable because most of the
audience are listening and watching News.
Advantages of Advertisements
To the consumer
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  They inform the consumer of what is available for the purchase in the market.
 They inform the customer of how the product is used.
 They inform the customer of where to buy the product.
 They tell more about the price, quality, size and other features of the product.
 Enable consumers to compare prices and other features of different commodities, thereby
enabling consumers to choose the most suitable product.
 Enjoy reduced prices due to the competitors from the manufacturer.
To the producer
 Improve the sales of the product, thus, leading to higher profits.
 Create awareness of their products to the potential buyers.
 Make a company’s product popular in the market, hence encouraging a more frequent use
of the product.
 Remind the customers about the products in the market, thus boosting the sales.
To others
 They are major source of income to the advertising media.
 They create jobs for the advertising agencies.
 They earn revenue for the government through tax.
Disadvantages of Advertisements
To consumers
 Cost of advertising is passed onto the consumer in terms of price.
 Some advertisements do not mention the side effects of commodities.
 Advertisements are not always appreciated by customers, especially when they interrupt
interesting programmes on television, radio or internet.
 Sometimes goods advertised might not carry adequate information on how to use them.
To the producer
 Some are wasteful, since they do not encourage productive competition.
 They lead to cut throat competition which might force some producers to close down
their business.
 It is an expensive activity of sales promotion.

MARKETING INSTITUTION IN TANZANIA

Marketing in Tanzania has been carried out by different institutions, both private and public.
These institutions include: marketing boards, co-operative societies, board of internal trade, and
board of external trade.
Marketing Boards
Some of the marketing boards in Tanzania are coffee marketing board, tea marketing board,
cotton marketing board, and cashew-nut marketing board.

Roles of Marketing Boards

Purchase produce: Marketing boards buy farmers’ produce and fix the produce price.
Collect and store the produce: Marketing boards collect farmers’ produce from the farm where
they grow and store the produce in their warehouses. Farmers are relieved of transport and
storage problem.
Provide financial services: Marketing boards offer financial assistance to the farmers because
they pay farmers on the spot. Also, they provide fertilizers and other agricultural products at

24
reduced prices. They give loan facilities to farmers. Furthermore, they help farmers to buy
agricultural equipment so as to improve their farming methods.
Provide research services: Marketing boards carry out research on agricultural and marketing
problems.
Control production: Marketing boards buy all produce from farmers and establish quotas to the
cooperative societies. Any produce bought in excess of the established quota is rejected.
Sell the produce: Marketing boards sell the produce collected from farmers to the local
companies or even to the foreign markets in other countries.

Cooperatives
A cooperative society is an association of people who join voluntarily, and have a common
economic and social interest with common goals and objectives. Cooperative marketing societies
play various roles concerning marketing services to the members.

Roles of Cooperative Societies

 Increasing the bargaining power of the members since they market the goods on behalf of
the members.
 Carrying out market research on behalf of members, hence advise the members on the
modern methods towards improvement of the quality of the goods produced.
 Looking for market for the produce of their members.
 Providing market for the produce of their members.
 Providing social services, for example hospitals and schools.
 Providing farming inputs to the members, hence improvement in the production process
of their members.

The Board of External Trade (BET)

The Board of External Trade is charged with the responsibility of promoting Tanzania’s products
across the borders. It also concentrates on the promotion of non-traditional products to the rest of
the world.
Functions of the Board
Among the main activities that the Board of External Trade undertakes are as follows:
Market development activities: under which the board is responsible for taking care of the
development of markets for Tanzania products. The board also organizes Tanzania participation
in overseas trade fairs, and in sending outgoing trade missions, and organize Tanzania
participation in multilateral and bilateral trade negotiations in order to ease market access for
Tanzania to all markets in Africa, Asia, the Americas and Europe.
Product development activity: The board looks at various products which have a comparative
advantage, proposing ways to improve the production and marketing ways for the products to
enable Tanzania to have a competitive advantage over the product. This includes things like
developing packages for Tanzania’s products, product adaptation in some markets, labelling
requirements, the pricing of the product, and so forth.
Market research: The board also undertakes various research in the world market to identify
what kinds of products needed so that it advises the business community on the opportunities
available. This is to say the board has the trade information centre which collects all the data for
foreign businesses.
Provision of trade information: The board is responsible for collecting, analysing, storing and
disseminating trade information to the business community.
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Formulate laws, policies, strategies, and plans: that promote external trade for economic
growth and development of the country.
Monitor and supervise the implementation of policies: laws and strategies for sustainable
external trade growth in the country.
Board of Internal Trade
The board was established by the act of parliament to replace the state trading company with the
following functions:
 Setting and revising internal trade policies.
 Carrying out marketing research.
 Supervising and coordinating of internal trade.
 Offering consultancy services to companies under its umbrella.
 Recruiting staff members.

MARKET
A market is an area or place where buyers and sellers meet, to exchange goods and services.
Examples of markets include: Kariakoo, Kilombelo, Gikombaka, Kiboriloni, and Miomboni. A
market involves an area, one commodity, buyers and sellers, free competition and one price.

Kariakoo Market

Elements of market
 An area
 One commodity
 Buyer and sellers
 Free competition
 One price
Conditions for the Existence of a Market
Existence of goods and services (commodities): For the market to exist, there must be
commodities to be exchanged.
Existence of buyers and sellers: There must be buyers to buy the goods and sellers to sell the
goods.
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An area where a market is located: There must be a place or specific area where trading
activities will take place.
Contact between buyers and sellers: Buyers and sellers must be in contact in order for exchange
to take place in a market. A contact can be physically or by means of communication such as
telephone.
One price for every commodity in a specific period of time: In a market, one price for every
commodity must prevail at a specific period of time as a result of interaction of market forces of
demand and supply.

Functions of Markets
Facilitate transactions: A market facilitates a process of buying and selling goods and services
by providing a place where buyers and sellers can meet on contact to exchange goods and
services.
Source of supply: The market is a source of supply of goods and inputs to consumers and
producers, respectively. It is only in the market where people obtain much of the goods and
services they need. Similarly, producers can easily obtain inputs such as raw materials, spare
parts, and fuel.
Contact between buyers and sellers: A market provides a ground for buyers and sellers to have
high contact with one another in the process of exchanging goods and services.
Stabilize price: Prices are determined in the market by the force of demand and supply. This
helps to stabilize price. For example, when the demand for the commodity rises, suppliers in the
market will be motivated to supply more to get more profit due to increase in demand. This will
bring back price toward the equilibrium.
Increase production: Market helps to increase demand for a commodity, a greater demand for a
commodity induces suppliers to supply more quantity of a commodity in the way the market
helps to increase production.
Classification of Markets
Markets are classified according to the type and service offered.
There are two main ways of classifying markets, namely according to the market type and
according to market structure.
According to the market type, markets are classified with reference to the type of goods and
services bought and sold in the market. The following are markets according to the market type.
Commodity market: This is a market which deals with buying and selling of final goods and
services. These are goods which are ready for consumption, such as clothes, food stuffs, and
others.
Factor (input) market: This involves selling goods which are used in the production of other
goods like machines and other raw materials.
Labour market: This type of market involves buying and selling of labour at a given wage rate.
Capital market: This involves the buying and selling of capital goods like machine.
Land market: It involves buying and selling of land at a given price or a given level of rent.
Financial market: This type of market deals with buying and selling of financial assets such as
securities and treasury bills. It includes security market: Which deals with buying and selling of
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government securities and share of different companies. A good example of this market is the
Dar es Salaam Stock Exchange market (DSE). Foreign exchange (Forex) is also a type of
financial market. It involves buying and selling of foreign currencies, such as Bureau De change.
Market structure
Market structure refers to the nature and degree of competition in the market for goods and
services. The structure of the market both for goods and service is determined by the nature of
competition prevailing in a particular market.
Determinants of Market Structure
The number and nature of sellers: The market structure is influenced by the number and nature
of sellers in the market. They range from large number of sellers in a perfect competition, single
seller in pure monopoly, two sellers in duopoly, few sellers in oligopoly, and too many sellers in
differentiated product.
Number and nature of buyers: If there is a single buyer in the market, this is buyer’s monopoly
and is called monopsony market. If there are two buyers in the market is called
Duopsony. If there are few organized buyers of a product, it is known as Oligopsony. Duopsony
and oligopsony markets are usually found for cash crops, such as sugarcane.
Nature of the product: If there is product differentiation, and products are close substitute the
market is characterized by monopolistic competition.
Types of Market Structure
Market structures are subdivided into the following;
 Perfect competition,
 Monopoly
 Monopolistic competition
 Oligopoly and
 Duopoly
Perfect competition
This is the situation where there are many firms, each producing only a small fraction of the total
output required in the market and none of the firms can influence the price in the market
Features of Perfect Competition
Many buyers and sellers: The market has many firms that sell similar commodity an d many
buyers looking for the commodity. The price of the commodity is the same to all sellers.
The commodity is identical (homogeneous): The commodity sold in the market by all sellers is
identical. The product cannot be differentiated by factors such as size, quality, colour and
texture.
Free entry and free exit into the industry: Sellers and buyers are free to enter or exit the market.
Perfect knowledge of the market: Both buyers and sellers are assumed to have adequate
knowledge about the market conditions.
No government interference: It is assumed that there is no external intervention with the
activities in the market. No price control and quantity control. The market is controlled by forces
of demand and supply.
No preferential treatment of buyers and sellers: Both buyers and sellers are not given
preferential treatment in terms of price, quantity or quality.

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No transport cost: Buyers and sellers are assumed to be located in the same place. There is no
cost of transport incurred by either sellers or buyers to and from the market.
Perfect mobility of factors of production: It is assumed that there is a perfect mobility of factors
of production, i.e., land, labour, capital and entrepreneurship.

Monopoly market structure

It is the situation of only one seller in the market with many buyers, for example TANESCO in
Tanzania. Is a market with only one supplier who sells a product that has no close substitute. A
market structure with only one buyer in the market is called Monopsony. The supplier or the
seller is only made up of one firm.

Pure monopolies exist when:

 There is one producer in the whole industry.
 There are no close substitutes for the product produced.
 There are strong reasons for the unlikely hood of competition.
Oligopoly: Is a market structure that is dominated by few firms that sell products which are close
substitute in the market with many buyers.
Duopoly: Is a market structure that is dominated by only two sellers in the market with many
buyers.
Monopolistic competition: Is the market structure that falls in between perfect competition and
monopoly competition. Monopolistic competition occurs when an industry has many firms
offering products that are similar but not identical. Unlike a monopoly, these firms have little
power to set curtail supply or raise prices to increase profits. Firms in monopolistic competition
typically try to differentiate their products in order to achieve above market returns. Heavy
advertising and marketing are common among firms in monopolistic competition and some
economists criticize this as wasteful.

MARKET RESEARCH
Market research is the systematic way of collecting and analysing information related to
marketing activities, or collecting and analysing data to help you understand which products and
services are in demand, and how to be competitive. Market research can also provide valuable
insight to help the company reduce business risks, spot current and upcoming problems in the
industry, and identify sales opportunities.
Market Research Activities
Market research activities include the following:
Advertising research: This aims at establishing whether advertisements portray the intended
product image, the medium used is appropriate, and whether the existing advertisements are
effective. Since advertisements are conveyed through different media, it is important to find out
which medium reaches most people, its availability and the cost involved in using it. This
information can be obtained through research.
Sales and marketing research: Finding out the market potential, product distribution channel,
market size and market characteristics.
Product research: This aims at establishing the strength and weakness of the product features.
Also, it tries to find out whether there are other similar products and what features appeal most to
consumers. The information obtained can be used to make necessary adjustments on the product
in order to help improve sales.

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Importance of Market Research
With economy being competitive with each passing day, it is important for businesses to know
and understand preferences of their consumers. Conducting research is one of the best ways of
achieving customer satisfaction, reduce customer shake and raise business. Here are the reasons
why market research is important and should not be ignored.
It provides information and opportunities about the value of existing and new products, thus,
helping businesses plan and strategize accordingly.
It helps in determining what customers need: Marketing is customer-centred: therefore,
knowing customers and their needs will help businesses design product or services that best suit
them.
It helps in forecasting production and sales: One of the most difficult aspects for a production
manager is to keep inventory loaded. What is the requirement and how much should be produced
to fulfil the needs of the customer? Therefore, market research helps in determining optimum
inventory stock.
Market research is a vital tool to carry out comparative studies: Businesses can plan business
strategies that can help them stay ahead of their competitors.
Benefits of an Effective Market Research
Make well-informed decisions: Market research helps to know market trends. Hence, it is better
to carry it frequently to know customers thoroughly. The growth of an organization is dependent
on the way decisions are made by the management. Using market research techniques, the
management can make business decisions on the basis of obtained results that back their
knowledge and experience.
Gain accurate information: Market research provides real and accurate information that
prepares the organization for any misfortunes that may happen in future. By properly
investigating the market, a business can undoubtedly take step forward, and therefore, take
advantage of its existing competitors.
Determine the market size: A researcher can evaluate the size of the market that must be
covered in case of selling a product or service in order to make profits.
Choose an appropriate sales system: Select a precise sales system according to what the market
is asking for, and according to this, the product or service can be positioned in the market.
Learn about customer preferences: It helps to know how the preferences and tastes of the
clients change so that the company can satisfy preferences, purchasing habits, and income level.
Researchers can determine the type of product that must be manufactured or sold based on the
specific needs of consumers.
Gather details about customer perception about the brand: In addition to generating
information, market research helps a researcher in understanding how customers perceive the
organization or brand.
Analyse customer communication methods: Market research serves as a guide for
communication with current and potential customers.
Productive business investment: Market research is a great investment for any business: because
it shows researchers a way to follow to take the right path and realise sales that are required.

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Market Research Process
Market research process is a series of activities that are to be followed when carrying out market
research. It consists of steps necessary to effectively carry out research. These steps are identified
and explained below sequentially.
Identification of the problem: The market research process begins with identification of a
problem faced by the company.
Defining the problem: Clear definition of the problem helps the researcher in all subsequent
research efforts including setting of proper research objectives, the determination of the
techniques to be used, and the extent of information to be collected.
Statement of research objectives: After identifying and defining the problem with or without
explanatory research, the researcher must take a formal statement of research objectives. Such
objectives may be stated in qualitative or quantitative terms, and expressed as research questions,
statement or hypothesis. An example of the research objective can be “To find out the extent to
which sales promotion schemes affected the sales volume”. This is a research objective
expressed as a statement.
Planning the research design: After defining the research problem and deciding the objectives,
the research design must be developed. A research design is a master plan specifying the
procedure for collecting and analysing the needed information. It represents a framework for the
research plan of action.
Planning the sample: Sampling involves procedures that use a small number of items or parts of
the ‘population’ (total items) to make conclusion regarding the ‘population’. Important questions
in this regard are who is to be sampled as a rightly representative? Which is the target
‘population’? What should be the sample size, how large or how small? How to select the
various units to make up the sample?
Data collection: The collection of data relates to gathering of facts to be used in solving the
problem. Hence, methods of market research are essentially methods of data collection. Data can
be secondary, i.e., collected from relevant reports, magazines and other periodicals, especially
written articles, government publications, company publications, books, etc. Data can be
primary, i.e., collected from the original base through empirical research by means of various
tools.
There are broadly two types of sources of data, namely internal sources (existing within the firm
itself, such as accounting data, salesmen’s reports, and so on.) and external sources (those
existing outside the firm).
Data processing and analysis: Once data have been collected, they have to be converted into a
format that will suggest answers to the initially identified and defined problem. Data processing
begins with the editing of data and its coding. Editing involves inspecting the data collected for
omission, legibility, and consistency in classification. Before tabulation, responses need to be
classified into meaningful categories.
Formulating conclusion, preparing and presenting the report: The final stage in the marketing
research process is that of interpreting the information and drawing conclusion for use in
managerial decision. The research report should clearly and effectively communicate the
research findings and need not include complicated statement about the technical aspect of the
study and research methods. Often, the management is not interested in details of research design
and statistical analysis, but instead, in the concrete findings of the research. If needed, the
researcher may bring out his or her appropriate recommendations or suggestions in the matter.
Researchers must make the presentation technically accurate, understandable and useful.
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Significance of Market Research
Market research is one of the most effective ways to gain insight into customer
base, competitors, and the overall market. The goal of conducting market research is to equip a
company with the information needed to make informed decisions. It is especially important
when small businesses are trying to determine whether a new business idea is viable, looking to
move into a new market, or are launching a new product or service. The following are the
reasons, why businesses need market research:
Competition: Conducting research helps businesses gain insight into competitor behaviour. By
learning about competitor’s strengths and weaknesses, a business can learn how to position its
product or offering.
Customers: By conducting research, businesses can create a profile of their average customer
and gain insight into their buying habits, how much they are willing to spend, and which features
resonate with them. Also, they can learn what makes someone use their product or service over a
competitor.
Opportunities: Potential opportunities, whether they are products or services can be identified by
conducting market research. By learning more about customers, a business can gather insights
into complementary products and services. Consumer needs change over time, influenced by
new technology and different conditions, and it may find new needs that are not being met,
which can create new opportunities for the business.
Forecast: By conducting research with consumers, businesses can get an idea of whether they
are optimistic or apprehensive about the direction of the economy, and make adjustments as
necessary. For example, a small business owner may decide to postpone a new product launch if
it appears the economic environment is turning negative.

Chapter review questions

Multiple choices
1. Which title is given to a process of finding consumer’s demand for a certain product or
service and the means of satisfying the demands?
a) Advertising b) Marketing c) Branding d) Pricing
2. A place where goods are sold and bought is called;
a) Market b) Kilombero c) Kariakoo d) Marketing
3. Which term is used to describe a group of buyers for a certain or particular product or
service?
a) Market b) Pricing c) Purchasers c) Buyers
4. What is a name given to the type of marketing that deals with identifying and satisfying
consumers demand for service?
a) Research marketing c) Service marketing
b) Primary marketing d) Secondary marketing
5. If you want to sell manufactured goods, which type of marketing are you going to deal
with?
a) Primary marketing c) Secondary marketing
b) Service marketing d) Tertiary marketing
6. What type of marketing does an agricultural marketing board deal with?
a) Primary marketing c) Secondary marketing
b) Service marketing d) Tertiary marketing
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 7. All marketing activities are directed towards:
a) Customer demands c) Customer royalties
b) Customer satisfaction d) Distributers satisfaction
8. The following are functions of marketing EXCEPT
a) Product and service management
b) Production
c) Distribution and Selling
d) Promotion and market research
9. A collective name given to a combination of four elements of marketing: price, product,
promotion and place (the 4Ps of marketing) is;
a) Marketing research c) Promotion mix
b) Advertising mix d) Marketing mix

10. How do we call the amount of money or consideration exchanged for purchase of a
product, idea or service?
a) Product b) Price c) Promotion d) Place
11. Which term is used to describe activities undertaken to make the product or service
known to users?
a) Product b) Price c) Promotion d) Place
12. A process of setting price for specific commodity being offered for sale in a market is
called;
a) Promoting b) Pricelization c) Pricing d) Selling
13. What is the name given to anything that is offered in the market for customer
satisfaction?
a) Product b) Price c) Promotion c) Place
14. A name, mark, symbol, or sign given to a product with the aim of identifying and
differentiating it from the competitor’s products is termed as;
a) Brand b) Branding c) Brand name d) Trade mark
15. ………….. is a part of a brand which can be pronounced when a buyer orders for the
product: for example, Pepsi, Fanta, Omo, and Uhai.
a) Brand b) Branding c) Brand name d) Trade mark

16. Which title is given to a process of designing a name, sign, symbol, or mark with an
intention of identifying a product seller and to differentiate it from those of competitors?
a) Brand b) Branding c) Brand mark d) Trade mark
17. Part of a brand which can be recognized by sight, but cannot be pronounced is called;
a) Brand b) Branding c) Brand mark d) Trade mark
18. Legal protection of a product that bears an “R” in a circle and appears as ® is called;
a) Brand b) Branding c) Brand mark d) Trade mark
19. A legal protection right which protects the original work and prohibits reproducing a
product of another person usually denoted by © is termed as;
a) Brand b) Copyright c) Brand mark d) Trade mark
20. …………… is an activity which involves designing a producer’s container in which
goods are packed.
a) Packing b) Packaging c) Grading d) Standardizing
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21. A process of putting or arranging manufactured goods in a container or package is called;
a) Packing b) Packaging c) Grading d) Standardizing
22. Which term is used to describe a process of setting specifications to products which must
conform to size, colour, appearance, chemical contents and ingredients?
a) Packing b) Packaging c) Grading d) Standardizing

23. Sorting of products into classes of similar characteristics of size, quality, colour, shape,
and any other specification is called;
a) Packing b) Packaging c) Grading d) Standardizing
24. Which term is used to describe a subset of the market on which a specific product is
focused?
a) Market Mix b) Market segmentation c) Market niche d) Market price
25. In which stage of a product life circle a company struggles to build product awareness to
the target market?
a) Introduction stage b) Maturity stage c) Decline stage d) Growth stage
26. ………………… is a marketing communication process that aims at reminding,
informing, and persuading buyers to buy the organization product.
a) Pricing b) Promotion c) Sales promotion d) Personal selling
27. Which of the following is not involved in the promotional mix?
a) Sales promotion b) Advertising c) Publicity d) Pricing

28. Suppose you are ABC Company Manager, you want to communicate, establish, and
maintain communications with public, which term of promotional mix are you going to
use?
a) Publicity b) Personal selling c) Public relation d) Sales promotion
29. Which term among the following should a marketing officer of ABC Company use to
inform existing and potential customers about existence of a product or service in the
market?
a) Publicity b) Public relation c) Advertisement d) Sales promotion
30. Advertisement provides information about the following EXCEPT:
a) Quality of product or service. c) Name and contact for a product.
b) Where to obtain a product or service. d) How to produce a product

31. An advertisement that aims at informing people about availability of a certain product in
the market is termed as;
a) Informative advertisement c) Persuasive advertisement
b) Reminder advertisement d) Competitive advertisement
32. An advertisement that aims at influencing consumers to buy a particular product is
termed as;
a) Informative advertisement c) Persuasive advertisement
b) Reminder advertisement d) Competitive advertisement
33. An aggressive form of advertising that penetrates into a rival’s market in attempt to
capture a product market and drive competitors out of the market is called;
a) Informative advertisement c) Persuasive advertisement
b) Reminder advertisement d) Competitive advertisement
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34. Which kind of advertisement should a sales manager use to reinforce previous
promotional information and a name of the product?
a) Informative advertisement c) Persuasive advertisement
b) Reminder advertisement d) Competitive advertisement
35. One of the following is not an advertising media:
a) Newspapers b) Radio c) Internet d) Letter

36. A market which deals with buying and selling of goods and services is termed as;
a) Commodity market b) Financial market c) Factor market d) Capital
market
37. The market which deals with buying and selling of capital goods like machines is called;
a) Commodity market c) Financial market
b) Factor market d) Capital market
38. A type of market which involves buying and selling of assets such as securities and
treasury bills is called;
a) Commodity market b) Financial market c) Factor market d) Capital market

39. Which term is used to describe nature and degree of competition in the market for goods
and services?
a) Market structure b) Market niche c) Market segment d) Market restructure
40. …………a process of partitioning potential customers into groups of differentiated sub-
markets.
a) Market structure b) Market niche c) Market segment d) Market restructure

41. A market structure with only one supplier who sells a product that has no close substitute
is termed as;
a) Perfect competition c) Monopoly market structure
b) Oligopoly market structure d) Duopoly market structure
42. ………. is a market tool that provides valuable insight to help a company, reduce
business risks, spot current and upcoming problems in the industry and also identifies
sales opportunities.
a) Market research c) Market segmentation
b) Market competitive d) Market structure
43. Advertising is concerned with increasing:
a) Productivity c) Quality of products
b) The market shares d) Production

44. The action through which a retailer discovers information about the needs of his or her
customers is known as;
a) Marketing survey c) Market study
b) Market survey d) Market discovery
45. Advertising is important because it:
a) Creates the demand for the goods and services
b) Creates employment for a large number of people
c) Reduces the price of goods and services
d) Induces customers to buy goods that have minor defects.
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Long answer questions
1. Mika and Kibadu own a paint manufacturing company in Dar es Salaam. They produce
high quality paints, but their sales are very low. Mika and Kibadu have approached for an
advice as to why sales of their products are low despite their quality.
a) Explain what Mika and Kibadu should considers in order to attract customers and
increase sales.
b) In six points, explain to them the purpose of considering the factor in (1a).
2. Marketing consists of a variety of activities: making a product known, finding customers,
setting price, managing the products and other related activities. What are the roles of
marketing in ensuring that a product reaches a final consumer? (7points)
3. Marketing mix is a set of controllable variables that a firm can use to influence buyer’s
response. Explain any four variables of marketing mix which are used to influence
buyer’s response.
4. Every business operates with a primary objective of making profit, and this can be
realized through pricing methods adopted by the firm. What things should be considered
when setting price of a product? (5 points)
5. ABC Company is facing a problem on methods of setting price of its products, as an
expert in marketing, explain how the company can best set different prices for their
products.
6. Marco and Luke sell locally manufactured soaps and cosmetics, but they do not have a
brand name for their products. This makes them use extra effort to market their products.
As an expert in marketing:
a) Explain to them what they should do in order to sell their products easily.
b) Explain three advantages and two disadvantages of what is proposed in (6a).
7. Packing and packaging are crucial activities in most of the businesses.
a) Explain the reasons for packing and packaging. (5 points)
b) Outline the merits and demerits of packaging (6 points)
8. Your mother is planning to sell children garments in December. Explain to her how she
can increase sales through persuading potential customers. (6 points)

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