Sunny Article 1

Essence of Marketing as a tool for economic development and growth in a developing country An article written by Sunday Peter Tinuoye (MBA ATBU, Bauchi, B.Sc. Business Administration ABU Zaria, ANIMN, Cert. Computer). Marketing activities do not occur in a vacuum; therefore, marketing, which is the mainstay of every business, cannot function in an empty space. It is a fact that marketing activities normally influence the society or community; and the society too influences business activities through people’s beliefs, wants, needs and cultural values. It should be borne in mind that the marketing of any product is conducted in a system that is surrounded by certain forces and entities, which affect the managerial decision making of that firm. These forces and entities together form the marketing environment. The word environment means the surrounding or influence, which have a check on the marketing of a product in a developing economy like Nigeria. Various scholars have defined marketing. Rosenberg (1975) defines marketing as a process based on goals and capabilities by which a producer provides a marketing mix (product, services, advertising, distribution, pricing, etc) that meets consumer’s needs within the limits of the society. American Marketing Association define marketing as the total system of all interacting business activities designed to plan, promote and distribute wants satisfying product (goods and services) to present and potential customers. The total system of all interacting business activities occurs within an environment and the relationship that exist between the society and business organization is what is been referred to as business environment. Environmental factors affecting business differs from company to company, economy to economy and these factors could either be a threats or opportunities. Nigeria as a developing country, given the government policy of mixed economy, offers some of the best economic environment for successful marketing. Nigeria has a rapid growing population estimated as over 140 million in March 2006 census figure with an annual growth rate of 3.2% Nigeria provides a viable market for several standards units of industrial product such as textiles, soaps and detergents, soft drinks, beverages, automobiles, electronics, etc. Despite these favourable conditions for marketing products there are environmental forces that do affect business operations. These factors are broadly classified as macro and micro environmental factors.

External factors (macro) cannot be controlled by the management which can serve as a threat to the organization in a developing economy while micro (internal) factors can be controlled to some extent which could serve as opportunities to the growth and development of an economy. In Nigeria, most companies or organizations have been experiencing a decrease in their sales volume. This has been attributed mostly to present state of the Nigeria economy. The problem of competition, strike actions, disputes, resources, revenue losses and failure to maximizes opportunities to build on success had seriously affect the sales of products in the industry. The macro environmental forces which also can be termed as uncontrollable element has posed a lot of threats to the growth of the industry in Nigeria, Ghana, Gambia, Guinea and the rest of the developing economy. Macro environmental factors such as technology, socio-cultural factor, political factor, legal factor etc are principal in the economy. Very little efforts can be done on these environmental factors and any organization operating within this environment must take into cognizance of these forces and proffer solution to combat it. Micro environmental forces which is been termed as controllable environmental factors such as 4 p’s are areas of opportunity for the organization operating within the premise of Nigeria economy if properly managed, but when it is not properly managed it results into threats.

THE CONCEPT OF MARKETING Since marketing can be regarded as the conscious effort to achieve desired exchange or outcomes with target market, the question now arises. What is the philosophy that guides these marketing efforts? What is the relative weight given to serving the interests of the organization, the customers and the society? It is pertinent to note here that these interests very often conflict. And to avoid these conflicts, it is desirable that marketing activities be carried out under a clear concept of responsive and responsible marketing. There are four concepts under which the enterprise and other organizations can conduct their marketing activity viz:(i) the product concept (ii) the selling concept or sales concept (iii) the marketing concept and (iv) the societal concept. These concepts can be briefly described as follows:-

The Product Concept:- Assumes that customers will favour those products that offer the most quality for the price, and therefore, the organizations should devote its energy to improving product quality. Emphasis here is on quality. The Selling (Sales) Concept:- Assumes that consumers will normally not buy enough of the company’s products unless they are reached with substantial selling and promotional effort. The Marketing Concept:- Holds that the main task of the organization is to determine the needs and wants of the target market and to adapt the organization to delivering the desired satisfaction more effectively and efficiently than its competitors. The Societal Marketing Concept:- Holds that the main task of organization is to generate customer satisfaction and long-run customer and public welfare as the key to satisfying organization’s goals and responsibilities THE MARKETING ENVIRONMENT Experience has shown that a careful understanding of an environmental factors help to examine an organization in terms of its resources, opportunities and technical know how it has. Studying your environment from time to time helps to identify opportunities and threats, due to continuous changes that occur in the environment. Short term planning is always advisable. An important influence on marketing theory is the continuous and rapid change in consumer interests and desires. Consumers today are more sophisticated than in the past. They attend school for much longer; they are exposed to newspapers, magazines, films, radio, television, and travel; and they have much greater interaction with other people. Their demands are more exacting, and their taste is more volatile. They are safeguarded against the blandishments of indiscriminate marketing by consumer protection schemes, and they are better informed, thanks to publications dedicated to evaluating the merits and faults of different products. Markets tend to be segmented as each group calls for products suited to its particular tastes. Positioning the product that is, determining the exact segment of the population that is likely to buy a product and then developing a marketing campaign to enhance the product’s image to fit that particular segment requires great care and planning. Competition has also sharply intensified, as the number of firms engaged in producing similar products has increased. Each firm tries to differentiate its products from those of its competitors. Profit margins, meaning the percentage of profit made by a business per unit of sales, are constantly being cut. While costs continue to rise, competition tends to keep prices

down. The result is a narrowing spread between costs and selling prices, and an increase in a business’s sales volume is necessary to maintain or increase profit. The consumer movement that is, the insistence on reputable products and services by consumer groups is a strong influence on marketing techniques. Both consumer groups and government agencies have intensified their scrutiny of products, challenging such diverse elements as product design, length and legitimacy of warranty, and promotional tactics. Warranty and guarantee practices, in particular, have been closely examined. New legislation has generally defined and extended the manufacturer’s responsibility for product performance. Ecological concerns have also affected product design and marketing, especially as the expense on product modification has increased the retail cost. Such forces, which have added to the friction between producer and consumer, must be understood by the marketer and integrated into a sound marketing programme. This is often accomplished by emphasizing the “ecological awareness” of a product, or incorporating ecological considerations into initial marketing decisions prior to manufacture. Even the way a firm handles itself in public life, that is, how it reacts to social and political issues, has become significant. No longer may a corporation cloak its internal decisions as private affairs. The public’s dissatisfaction with the actions and attitudes of a firm has sometimes led to a reduction in sales; conversely, consumer enthusiasm, generated by a firm’s intentional establishment of a good public image or public relations, has led to increased sales. Perhaps nothing is more conducive to the success of a firm than the image that it conveys of itself to the public. The marketing activities of a company, because they act directly on the consumer, do most to shape this image and thus must be developed with great care. As marketing has become increasingly complex, a need has arisen for executives trained in the social sciences that also possess statistical, mathematical, and computer backgrounds to stand on their feet for greater challenges in business. Recent research conducted has shown that marketing activities is greatly affected by the macro environmental factors. The research was carried out among a community in Bauchi State of Nigeria and the following were observed. Hypothesis One (H0): Environmental forces do not posed serious threats to the marketing of a product in Bauchi metropolis.

(H1): Environmental do posed serious threats to the marketing of the a product in Bauchi metropolis. The hypothesis to be tested is null hypothesis (Ho). Environmental forces do not posed serious threats to the marketing of a product in Bauchi Metropolis. Responses 0 E 0-E (0 – E)2 Yes 26 20 6 36 No 14 20 -6 36 Total Source: Field Work

40

40

0

72

Formular; X2 = ∑(0 – E)2 E

Where; (0 – E)2 = 72 E = 40 2 X = 72 = 1.8 40 2 X = 1.8 Degree of freedom V = (Rows – 1) (Column – 1) V = (R – 1) (C – 1) V = (2 – 1) (2 – 1) V=1 Critical value of X2 at 0.05 level of significance =3.841 (See Appendix) Interpretation for Hypothesis Test One Since the computed value of X2 (which is 1.8) is less than the theoretical value X2 0.05 (which is 3.841), therefore, we accept the null hypothesis (H0) and reject alternative hypothesis (H1). It implies that, environmental factors do not pose serious threats to the marketing of a product in Bauchi Metropolis. But environmental factors need to be thoroughly examined before any marketing decisions. Yates Correction When the Chi-square test is used on a 2 x 2 contingency table and when there is only 1 degree of freedom, serious errors can arise. Yates correction showed that the answer can be made less approximate if 0.5 is deducted

from the absolute value of (O – E) for each item. This is known as Yates correction and should be used whenever there is 2 x 2 Chi-square. Using Yates Correction on Hypothesis One Environmental forces do not posed serious threats to the marketing of the a product. Responses

0

E

0–E

[0 – E] – 0.5

Yes

26

20

6

5.5

No

14

20

-6

-6.5

([0 – E] – 0.5)2 ([0 – E] – 0.5)2 E 30.25 1.51 42.25

2.11

Total 3.62 Source: Field work Since the computed value X2 is still less than the theoretical value of X2 0.5 (i.e. 3.841) at 1 degree of freedom. I will accept the null hypothesis that is, environmental factors do not posed serious threats to the marketing of a products in Bauchi Metropolis and reject the alternative hypothesis. With these two statistical method used it can be deduced that environmental factors can not be neglected and need to be examined and great effort and research should be directed towards the environment forces to tap its opportunities. Hypothesis Two Ho: Opportunities can not come up if internal (controllable) factors are effectively managed. H1: Opportunities can come up if internal (controllable) factors are effectively managed. The hypothesis to be tested is null hypothesis (Ho). Opportunities can not come up if internal (controllable) factors are effectively managed. S/N Options No of Respondent 1 Yes 30 2 No 10 TOTAL 40 SOURCE: Field Work Analysis of the table using Chi-square

Percentage 75% 25% 100.00

Responses Yes No Total Source: Field Work Formular; X2 = ∑(0 – E)2

0 30 10 40

E 20 20 40

0–E 10 -10 0

(0 – E)2 100 100 200

E

Where; (0 – E) 2 = 200 E = 40 2 X = 200 = 5.0 40 2 X = 5.0 Degree of freedom V = (R – 1) (C – 1) V=2–1 V=1 Critical value of X2 at 0.05 level of significance = 3.841 Interpretation of Hypothesis Test Two Since the computed value, of X2 (which is 5.0) is greater than the theoretical value of X2 (3.841) it therefore means that the null hypothesis should be rejected while the alternate hypothesis should be accepted. Using Yates Correction on Hypothesis Two Responses 0 E 0 – E [0 – E] – 0.5 Yes

30

20

10

9.5

No

10

20

-10

-10.5

([0 – E] – 0.5)2 ([0 – E] – 0.5)2 E 90.25 4.5125 110.25

Total Source: Field work Using chi-square and Yates correction to ascertain the result at X2 0.05 (which is 3.841 level of significant, it implies that much percentage of the staff was of the opinion that opportunities can come up if internal (controllable) factors are effectively managed. This means that a lot effort needs to be geared towards internal factors to complement with external factors so as to be of benefit to the selected retail shops in Bauchi Metropolis.

5.5250 10.0475

REFERENCES Adler P. (1987) “The system Approach to Marketing” Prentice-Hall International 2nd ed. p. 6 Alabade (2005) “Marketing Strategy”. An Handout for MBA Progamme ATBU Bauchi, Nigeria pp.3 Baker J. (1990) “Macmillan Dictionary of Marketing and Advertising”. 2d ed.,. Macmillan. Invaluable handbook. Bennet (1985) “Marketing” The General Overview McGraw Hill pp.42 Bernard R. Winter (1967) “Competition in Law and Economics” An Anti Trust Bulletin, Vol. 12, pp.1099. Cundiff, et al. (1985) “Fundamentals of Modern Marketing” 4th ed., Prentice-Hall International. Standard textbook. Davidson P. (1989) “The Marketing Sourcebook for Small Business”.New York, Chichester: Wiley, Guidance for small business. Earls, et al. (1988) “Making Marketing Work: a Step by Step Guide for New Businesses”. London: Kogan Page, Business enterprise guide published in association with the Institute of Chartered Accountants in England and Wales. Forsyth, P. (1990) “Everything you Need to Know about Marketing”. Kogan Page, Concise and thorough. Heller, R. (1987) “The Supermarketers”. Sidgwick & Jackson, Offers marketing strategy combining aggression and intelligence; case studies. Jerome M. (1982) “Essentials of Marketing”, Revised Edition, Richard D. Irwin, Inc, Homewood, Illinois 60430 pp 83 – 97.