Marketing
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Transcript of Marketing
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MarketingNational 4/5 Business Management2015-16
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What is Marketing? Marketing is more than just advertising
and selling. It involves identifying consumers’ needs and wants and meeting them in such a way that the producer makes a profit.
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The Role of Marketing Help a business achieve increased market
share – attract new customers.
Ensure that the product, price, promotion and place for sale are correct and meet the customers’ needs.
Increase sales and therefore maximise profits.
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Market Research In order to be successful, you need to
know what your customers want.
To find this out we use Market Research.
There are 2 types of Market Research:
Field ResearchDesk Research
CLIP
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Field Research This involves gathering primary information;
this is first-hand information.
We can find out this information through doing:
Surveys/Questionnaires Interviews Focus Groups Test Marketing Observations
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Surveys/Questionnaires These are questionnaires that are given to customers
through 4 different methods: Postal Telephone Online Face to Face
Surveys are relatively cheap to do and can be given to a large number of people
However response rates to them are very low
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Interview This is when a trained interviewer asks
someone (one on one) a set of questions.
Candidates can give detailed answers and follow up questions can be asked.
This is an expensive method (trained interviewer) and time consuming to conduct.
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Test Marketing This is when consumers are given products
to trial and feedback their opinions.
This allows effective feedback to be gathered and changes can be made to the product.
However there is no guarantee the product will be a success.
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Focus Group This is when a group of people get
together to discuss a product/service.
This allows for a wide variety of opinions to be gathered. People are often more honest.
However some members can dominate the group.
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Observation This is when a group of people are
observed in a certain situation. This can be done overtly or covertly.
It allows companies to gather information on people’s behaviours and attitudes.
Often people do not want to take part in being observed by others.
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Field ResearchAdvantages
it is specific to your needs
it is accurate it is up-to-date
Disadvantages
time consuming to collect
expensive to collect (training)
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Desk Research This involves gathering secondary
information, which is gathered from an external source.
Information can be gained through:
Newspapers the Internet eg competitors’ websites Government Statistics Market Research Agencies eg MORI
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Desk ResearchAdvantages
less time consuming
less expensive wide range of
sources
Disadvantages
information is not specific to your needs
cannot be sure about accuracy
information may be out of date
may not be objective
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Market Segmentation A market is made up of different types
of consumers each with their own needs and wants.
They are grouped into segments, so that companies can tailor products for each group.
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Why Target Marketing? Products can be made specific to the
customers’ needs.
The promotion, price and place can be tailored to the target market and increase their chances of sales.
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Market Segmentation Groups gender
religion
area
age
education level
social class
political persuasion
family structure
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The Marketing Mix (4P’s)• Product• Price• Promotion• Place
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Product – Product Development Idea – The idea has to be decided upon and worked through
to see if it is viable.
Analyse – Conduct Market Research to see if customers would be interested.
Prototype – Develop a first draft of the product.
Test – The product should go through significant testing in the company and with consumers.
Launch – Once changes have been made the product can be launched on to the market.
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Product Lifecycle Products pass through certain stages of
development during their existence.
This is called the Product Lifecycle.
The length of a product’s lifecycle can vary depending on the product.
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Product Lifecycle
INTRODUCTION
GROWTH
MATURITY
DECLINE
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Product Lifecycle - explained Introduction
product is launched onto the market; advertising and promotion begin; sales are increasing slowly.
Growth as product becomes well-known through word of mouth, sales increase
rapidly.
Maturity product is well-established, sales reach their peak and start to level off.
Decline sales fall as demand decreases. Product may be withdrawn from the
market.
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Extension Strategies A company can extend the lifecycle of a product by
injecting new life into it, using extension strategies.
This can be done through altering one or more of the 4P’s:
Product – altering packaging, new features Price – changing the price Promotion – new promotion, special offers Place – changing location sold e.g. Internet
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Extension Strategy
INTRODUCTION
GROWTH
MATURITY
EXTENSION
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Product - BrandingBranding is an expensive process but it brings many tangible rewards if a business gets it right.
It is a product that is seen in the eyes of the consumer as different from other similar products (unique).
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Product - BrandingBenefits
Can charge a premium price
High awareness
Perceived high quality
Easier to launch new products
Costs Huge initial financial
outlay
High marketing costs
Counterfeit goods
Own Brands
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Own Brands Established brands are under increasing pressure
from cheaper ‘own brands’.
Consumers are increasingly more aware of these brands.
Supermarkets have seen an increasing growth in own brand sales.
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Price Your price should appeal to consumers,
however, consumers look at pricing in 2 ways:
if it is too low, they think that the quality may be poor
if it is too high, they will think it is not worth the money
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What Price? The price for a product should be based on what the
customer is prepared to pay:
Competitors’ prices Position of product in the PLC Cost of manufacture Time of year Profit level expected Suppliers’ prices Point of sale State of the economy Government pressure
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Promotion There are 3 main types of promotion:
Advertising
Sales Promotion
Public Relations
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Promotion - AdvertisingAdvertising aims to be either:
Informative or Persuasive
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Promotion - AdvertisingTypes of Advertising include:
Print – Newspapers/magazines Broadcast – TV/Radio/Cinema Outdoor – Billboards
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Promotion – Sales PromotionsThese are methods employed for a limited time to increase consumer demand:
Buy one get one free (BOGOF) Discounts e.g. 10% off Competitions Free gifts Product trials Point of sale advertising eg posters displaying
special offers
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Promotion – Sales Promotions Direct Mail – This is in the form of mail
delivered to your address, promoting a product or service. Often referred to as ‘Junk Mail’.
Personal Selling – Involves salesmen coming to homes to sell a product. It may be something that requires demonstration or explanation
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Promotion - Technology Technology has seen a huge rise in the
different ways in which companies can promote: Website Email QR Codes Apps Text Messaging
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Promotions – othersOther types of promotion include:
Product placement – products appear on TV/Film Product endorsement – a celebrity promotes it Sponsorship – of a sport or TV programme
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Promotion – Ethical Marketing Companies must ensure that they promote
their products in an ethical way.
Promotions should be honest and not make false claims
Vulnerable groups should not be targeted with inappropriate promotions e.g. children
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Promotion – Public Relations (PR)The PR department will aim to enhance the organisation’s image.
They will deal with the: Press Government Public
Activities they take part in include:
Press statements/press conference Charitable donations Customer care
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Place This is where the product/service is
available for sale.
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Place – Factors affecting choice There are a number of factors which will determine how and
where a company sells its products:
Competition – where they are located and method of distribution used.
Resources – how close are resources needed to produce products
Cost of premises – in/out of town
Government incentives – they may give grants for locating in a certain area
Nature of the product - is it perishable; how quickly does it need to reach the customer?
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Distribution Methods - Road
Advantages Cheaper than
other methods
Customers receive products direct to their door
Disadvantages Can’t transport
many large products
Delays due to weather, traffic, roadworks
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Distribution Methods - RailAdvantages
Can transport many large products
Faster method of transport than others
Disadvantages Will need to be
transported from the train to the company
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Distribution Methods - AirAdvantages
Fastest method from one country to another
Large quantities of small products can be sent
Disadvantages Most expensive
method.
Products need to be transported from the airport
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Distribution Methods - SeaAdvantages
Huge quantities of large products can be transported
Can be transported across the world
Disadvantages Most time
consuming method.
Products need to be transported from the dock
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Marketing & ICT Marketing has been significantly
enhanced with the rapid rise in the use of ICT. It can be used to enhance marketing in a number of ways:
Loyalty Cards E-Commerce Social Media
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Marketing & ICT – Loyalty Cards Loyalty Cards have enabled companies to collect
a vast amount of information on customers.
They can gather information on what we buy, when we buy, and how much we spend.
It is an excellent market research tool.
Information will be stored on a computer database.
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Marketing & ICT – E-commerce The surge in online shopping has been huge.
A lot of businesses will either operate solely online or at least have an e-commerce facility for customers to purchase goods or services.
Advantages
Can buy products 24/7 from home Can compare, so possibly cheaper Cheaper for business to operate as less staff and space
needed.
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Marketing & ICT – Social Media One of the biggest technological rises
has been in Social Media.
Companies will ensure that they operate on various networking platforms to advertise to and keep in touch with consumers.