What you will learn in this module
What marketing is and its importance in running a business
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SESSION PLAN |
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Session 1 |
What is marketing? |
1 hour 30 min |
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Session 2 |
Elements of marketing |
3 hours |
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Session 3 |
Marketing visit |
3 hours |
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Session 4 |
Marketing channels |
1 hour 30 min |
Marketing is the most critical aspect determining business success.
Start by asking participants what they understand by marketing. Write key words in their replies on the board or on a flip chart. End by telling them the definition in the handout.
Divide the participants into groups of four or five people each. Ask each group to discuss the strengths and weaknesses of the marketing strategies in the three case studies in the handout, assigning one study to each group.
Hold a plenary of the groups to discuss and consolidate the lessons.
After the discussion on the case studies in the larger group of participants, ensure that the following points emerge:
What do you understand by marketing?
Some responses
The current situation
The women's groups make a traditional product for which there is a good market.
The groups also have links with traders with a demand for traditional woven products.
In the case studies on 'preparing for competition' and 'no contact with market', the market comes to the group, therefore women can sell from the village.
In the case study on 'taking charge of marketing', women have to travel to the market to sell their products.
In the case studies on 'preparing for competition' and 'no contact with market', the women have no direct link with the market and no idea of the sales price of their products.
As their costs increase, they have no understanding of how much of the increase in costs can be borne by the market.
They cannot vary product design or develop new ideas for different products (except when traders or the foundation demand changes) as they have no direct link to the market.
Adopting to a changing context
The women's groups may lose their businesses when they are exposed to greater competition brought in by the WTO (World Trade Organization) regime. They need to examine the technology they use and their productivity per person and by the amount of Baht invested. In the face of increased competition, high productivity, high quality and good marketing linkages will become essential for the survival of group businesses.
Handout 1: concept of marketing
Marketing is the most important element of a business. Unless a customer buys the product of the business, there is no business. The market for the product refers to the existence of customers who are willing to pay for it.
Every business depends on the market for its survival. Whether small or large, managed by women or men, run by an individual or a group, a business needs customers. Marketing, therefore, is a critical element of any business.
Marketing is becoming even more important with globalization opening up domestic markets to international competition. This means that, often, small producers have to face severe competition from a growing internal and international market.
Because marketing is a critical element of business and as marketing is getting more and more difficult, it is even more crucial that women in business learn about marketing. They need to know:
Marketing means understanding the needs and wants of consumers and providing goods and services to meet these profitably. A business activity results in the flow of goods and services from producer to customer or user.
Entrepreneurs must keep their eyes and mind open, and be alert to their customers' needs. Marketing is a dynamic and continuous process. It is needed not only at the time of starting up the business but also during its diversification. Marketing is not a one-time job. The entrepreneur or business person must be aware of the market's changing needs and respond accordingly.
Handout 2: case study on preparing for competition
The Kho Yor weaving group in Kho Yor Island produces traditional woven cloth using cotton, but sometimes a synthetic blend or silk cloth. The design is unique to Kho Yor, though few outsiders can distinguish the special features of the design. This is why the group feels it is important to continue to produce and keep alive the traditional designs of the area.
The group has developed thirty five traditional designs, which they maintain in a catalogue and produce on a regular basis. They used to buy dyed yarn, but when they found that the colours are not fast, they began to buy unbleached yarn and dye it themselves.
The group has received support from the government, the community development department as well as CPD. They were given 700 000 Baht which they used to purchase equipment and invest in a work shed.
Presently, the group markets its products through supermarkets, sending these by post to different supermarkets. The Thai Government ordered 100 to 200 pieces for Cabinet Ministers in the past few years. Being a traditional product, it is supported by the politicians. The market is mostly domestic and very little of the product is exported.
The group has a list of designs and prices to help customers in placing orders. They are also developing new designs and new products such as curtains and table cloth. They produce about 1 200 Lah (feet) of cloth per month, making a profit of about 40 Baht per month.
Group leader, Wichai Marasena is proud of the fact that the group is helping preserve a tradition, but does not know that they will face tough competition under the WTO rules. The group needs to move from a 'craft-based' and supply-oriented thinking to 'enterprise thinking' or demand-oriented business planning.
Handout 3: case study on contact with market
The women's group in Miang Pia in Ban Phai district makes traditional woven cloth. The members are mostly older women. Many of their designs have attracted the attention of the Queen Sirikit Foundation, which visits the group regularly and orders textiles from them for their exhibitions.
The group has got into the habit of receiving orders and producing only for this select market though other traders come to them as well. In other words, the market comes to the group. The members rarely go out to sell their products.
The women calculate the price on the basis of the material used, time taken and some notion of the intricacy of the design. They do not know at what price their product is sold by traders or the Foundation.
The cost of silk as well as tie and dye has increased over a period of time. This has forced the group to increase the prices of its products. So far, the increases have been accepted by the buyers of the group.
Exercise
Discuss the benefits and dangers of such a marketing strategy.
Handout 4: case study on taking charge of marketing
A women's group with 30 members makes and sells different kinds of handicrafts such as artificial flowers. The members have organized themselves in order to systematize their production and marketing.
The group is divided into smaller sub-groups of four to five people who are responsible for making particular kinds of handicrafts. Each group is paid on the basis of its daily production. The average production expected daily is decided on the type of handicraft they make. For instance, one of the groups produces 40 pieces of a particular type of handicraft each day.
The payment per piece is calculated to ensure a payment of about 100 to 110 Baht per day to each member.
The group has assigned five people for marketing the goods. These people were selected under the following criteria:
The five marketers are paid 100 Baht per day, the same as other members who are involved in the production of flowers. They are paid an out-of pocket allowance to cover their expenses while they are in the market. This motivates them to go out and market the products.
The group has assigned another member who is an accounts professional, as a full time accountant and pay her 3 000 Baht per month.
Exercise
Discuss the case study and analyse the reasons for the success of the group's business.
Read the information handout carefully before the session.
Use the diagram in the Elements of Marketing handout to explain the 6Ps involved in the activity.
Generate discussion on each P and ensure that the points raised in the handout are brought up in the discussion.
It is better to use an overhead sheet so you do not have to remember the points.
After the discussion, divide participants into groups of three persons each. Ensure that you have sufficient sets of games before starting the programme. The material needed for the game is provided with the kit.
Explain how the marketing game is played and give two hours to the groups to complete it. This helps in understanding the 6 Ps in a more efficient way.
An alternate method is to send groups on marketing visits. Divide the participants into pairs. Let each pair select a product that they will analyse. Let them go out to the market for two hours, see the product in the market place, talk with shopkeepers and analyse the marketing of that product using the 6 Ps.
Have a plenary session where pairs share some of their experiences using the 6 Ps chart.
Handout 1: elements of marketing
Marketing issues:
Production
Price
Find out about
Place/distribution
Promotion
People and participation
Handout 2: marketing game (Kindervatter and Range, 1992)
Purpose
'Marketing Mix' is a game that helps participants to understand the 6 Ps of marketing. An enjoyable learning exercise, it needs two to four players.
Material
Prepare enough sets depending upon the number of participants.
How to play
Spread the chart on a table or the floor.
Separate the cards according to the 6Ps and stack them face up.
Each player picks and puts a counter at the starting point on the chart.
The first player rolls the dice and moves her counter according to the number on the dice. If the counter is placed on Price, a group member takes a card from the Price stack and puts a question to the player who threw the dice.
The first player's answer is discussed till all players accept it.
Another player then rolls the dice. Used cards are stacked face down.
The play continues for one to one-and-a-half hours, depending upon the interest of the participants or till all the cards are used.
Tips
Each player throws the dice only once regardless of whether the group agrees or disagrees with the answers given by the player.
It is important to remember that there are no fixed answers for all questions related to the elements of marketing because these can change according to the situation, place or type and scale of business.
The purpose of a marketing visit is to gain exposure, understanding and practice in the working of marketing strategies on the basis of a first hand market survey and analysis.
It is important to plan the marketing visit well in order to derive the maximum benefits from the exercise.
Before the visit, there must be a session on marketing issues where marketing concepts are explained.
The marketing visit must be scheduled at an appropriate time in the training schedule, preferably soon after the session on marketing.
It is important to assign participants a task on what they need to observe during the visit (e.g. observing the 6 Ps of marketing with respect to a product and making a marketing strategy).
The place of the marketing visit must be selected according to what participants need to see. They must be able to see products of the type they make and other competing products. They should at least have some conversation with sellers as well as customers.
Hold a session after the marketing field visit where participants have to present their impressions and lessons learnt from the field visit.
In most cases, traders purchase products made by women's groups and sell these in local or urban markets.
Often, women's groups tend to depend on these traders and fail to establish a direct link with the market.
Supporters of women's groups tend to view the traders as middlemen and exploiters. It is important that women understand the choices of marketing channels available to them. They must understand the costs and benefits of all marketing channels.
Begin the session by asking participants about the market channels they use for taking their products to the final customers. Note the answers in the diagram included in the information handout.
Divide participants into groups and assign them the case studies: ask them to analyse the different marketing channels that have been used by the group to sell its products.
Handout 1: marketing chart
Products made by a rural women's cooperative business may pass through a number of hands as shown in the following chart. Each stage has its own costs and value addition. If a women's group sells only in the local market, its profit margin is higher, but they can sell only small volumes. If the group's product reaches city as well as national and international markets through the support of middlemen, then their percentage of margin is less, but they can sell larger volumes.
Handout 2: important factors in understanding marketing channels
Marketing a product means using various channels to bring it to the consumer. It is important therefore that the entrepreneur understands this concept clearly.
- Providing capital
- Ordering the products
- Adding value by processing or packaging
- Providing transport and storage facilities
- Providing billing and VAT charging services
- Using their time to make marketing linkages and orders
- Providing market information
- Keeping in touch with consumer profiles and preferences and informing the producers.
Handout 3: marketing channels
Women's groups can market their products at the local, country (national) or international level using different channels. Four ideas on potential channels are described below:
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Type of strategy |
Advantage |
Disadvantage |
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Market it yourself |
· No need to pay for an agent's
services. |
· Groups may not have experience
with and access to a broad market. |
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Intermediaries (middlemen, sales agents) |
· Can offer their acquired
experience and contacts to the producers. |
· They can charge high
commissions which automatically reduce group's profit. |
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Marketing cooperatives |
· Share costs, responsibilities
and skills among a number of groups. |
· May not have developed as broad a range of channels as commercial enterprises. |
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Alternative marketing organizations |
· Often have strong
social/educational goals. |
· May not have developed as
broad a range of channels as commercial enterprises. |
What you have learnt in this module
- Product
- Place
- Promotion
- Price
- People
- Participation
