MARKETING

What is a market?

• A market is where buyers and sellers come together to exchange products for money; this

will not usually be a single location.

concepts

• PRODUCTION CONCEPT: This is based on economies of scale; companies try to reduce costs as far as possible, as they assume people will choose products based on price.

• SELLING CONCEPT: based on aggressive selling and promotion.

• MARKETING CONCEPT: Based on the idea that organisations can best meet their objects by concentrating on consumer needs and satisfying those needs better than competitors

Business Objectives vs. Marketing objects!

• Organisations in private and public sector have business aims and objects.

• Business objectives: (private sector) are objectives that concern the business or organisation as a whole.

• Marketing objects: describe ways in which focusing on consumer can help achieve the more general objectives.

• The objects of Marketing = To increase sales, profits and market shares and develop new products and new market segments.

What does the marketing department do?

• Sales• Research and Development• Promotion • Distribution

SWOT Analysis• Strengths • Weaknesses• Opportunities • Threats• Looks at external factors: The opportunities and threats presented by

external factors• Looks at the internal factors: The strengths and weaknesses internal to

the organisation.• Why companies use swot: To see how well or badly they are doing• What their competitors are doing• How they may be affected by external factors• What action they need to take based on information they’ve collected.

Market Segmentation

• Market segmentation is the process of defining and sub-dividing a large homogenous market into identifiable segments having similar wants, needs etc.

• Ways of segmenting a market:• Geographic: Urban, rural, region.• Demographic: Age, sex, income, religion.• Geodemographic: Mix of geo+demographic• Lifestyle/psychographic: lifestyle, social class, personality• Behavioural: buying habits, products usage, brand loyalty.• Income group: grouping peoples job according to how much

they get paid.

• Niche market: This is when your product will only appeal to a small sector of the population • Mass market: this is when your product will appeal to a large sector of the population e.g.

apple products.

Market research

Primary research• Research that is being

carried out for the first time e.g.. Surveys, questionnaires, observation, consumer panels.

Secondary research• Research already been

conducted by someone else e.g. census.

Types of Primary research

• Consumer panels: when a selected group of people who use the products, completes market research. These people are often paid for their time, makes quality research very good/reliable.

• Focus group: When a group of people discuss their opinions of a product or service by experienced researchers, on new products or advertising campaigns.

• Observations: Watch behaviour of customers.• Field trials/ piloting: When companies test new

products before launching it, very expensive.

Primary Research

Advantages• Up to date• Relevant – collected for

specific purposes • Confidential

Disadvantages• Costly• Time consuming• Doubts over accuracy and

validity

Secondary information

• Census: detailed information about people – income, housing, ethnicity, education.

• Internal data: companies hold info about their customers, they analyse this information on an on going basis.

• EPOS: use of barcodes to record no. of sales and level of sales.

Secondary information

Advantages• Often attainable very

cheaply• Identifies the nature of the

market• Quick to obtain

Disadvantages• Ay not be updated often• May not be suitable or

presented in an ineffective manner

• May not be available for new product.

Marketing Mix

• The marketing mix is all the key activities that are involved in marketing (selling) of a business products/service referred to as the four Ps.

• Product• Price• Place• Promotion.• Objectives of the marketing mix = to support brand

building and to satisfy the needs and aspirations of targeting group of customers.

PRODUCT MIX

• Many firms make and sell a variety of products. The range of products sold is known as the product mix.

• The term product includes: quality, appearance, brand, warrantee, after-sales service, product range and functionality including features.

Product Life DEVELOPMENT

INTRODUCTION

GROWTH

MATUROTY

DECLINE

PLACE MIX

• This refers to how the product gets to the consumer.

• Why is place important in marketing? 1. Producer > Consumer2. Producer > Retailer > Consumer3. Producer > Wholesaler > Retailer > Consumer4. Producer > Agent > Wholesaler > Retailer >

Consumer.

PRICE MIXPenetration Pricing Launch your product at a low price, gain

market share then raise price.Differential Pricing Different people are charged different

amounts for the same thing e.g. Train tickets.

Skimming Charge a very high price when the product is first launched so “rich early adopters” buy the project e.g. IPhone.

Psychological Pricing When companies charge for example $9.99 so they can say “less than $10.00”

Cost Plus Estimating how much will be produced, adding up costs of producing add a percentage and mark up for profit.

Competitive Pricing Setting your price in line with or just below your competitors

Destroyer Pricer Way below competitors price to get other stores customers.

• Elastic Demand: If a quantity demanded is very responsive to price changes, then a small change in price will lead to relatively large change in quantity demanded. Price increase demand decreases.

• Inelastic Demand: Where quantity demand is unresponsive to price change.

• Demand: defined as the quantity of a good or service that consumers are willing and able to buy at a given price in a given time period.

Demand and factors influencing demand

• Affordability• Competition and availability of substitutes• Level of income• Needs and aspirations of consumers• Fashion and taste changes• Advertising and promotion spending

Factors influencing supply

• Supply is defined as the quantity of a product that the producer is willing and able to supply onto the market at a given price in a given time period

• Availability of raw materials• Taxes imposed by government• Government support (subsidies)• Weather conditions and other natural factors• Advances in technology

Equilibrium: Position at which demand equals supply, so that produces and consumers are

happy/

Promotion

• Creating an awareness of your product/service to your target market.

• Steps of promotion Aida1. Capture attention: make target market interested2. Create interest: help your audience identify your

business3. Generate desire: why people need your product

or service4. Call to action : where to get product.