Chapter 3) Marketing

  • Created by: B-raa
  • Created on: 29-01-19 17:43
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  • Unit 3: Marketing
    • Setting Marketing Objectives
      • These are the targets set to be achieved by the marketing department in a specified time period
      • The marketing objectives will be influenced by internal and external factors
      • Marketing Objectives include:
        • Sales Volume: The quantity of goods sold
        • Sales Value: The financial value of sales e.g. revenue
        • Market size: The potential size of the market
        • Market and Sales Growth: the amount by which the volume of sales or size of the market expands over time. This is measured as percentage change.
          • Change in sales or market size/ original market size x 100
        • Market Share: one firm's sales as a percentage of the total market
          • Sales of one product, brand or business/ total sales in the market x 100
        • The Marketing Process
          • 1) Analyse marketing plan
          • 2) Make Marketing Decisions
          • 3) Implement Decisions
          • 4) Review
          • 5) Set Marketing Objectives
        • Brand Loyalty: When a customer consistently buys the same brand of a product
    • Understanding Markets and Customers
      • Market Research involves the systematic collection of data about the market and the customer in order to inform decision making
        • Primary: collected first hand by the business for a specific purpose such as a questionnaire
          • One form of primary market research is market mapping. This involves asking customers to categorise a range of competitors' goods alongside the business's goods based on two predetermined criteria.
        • Secondary: using data that already exists such as market intelligence reports
        • Qualitative data is about behaviours and opinions
        • Quantitative data is about numerical facts and figures
      • Marketing Data
        • The value of this is only apparent when the data is analysed to inform decision-making. One method used to interpret marketing data is to look for correlations or the relationship between two variables.
        • Correlation can be shown on a spectrum from -1 to +1
      • PED and YED
        • PED measures how sensitive quantity demanded is to changes in price.
          • For normal goods the relationship between price and demand is inverse. Therefore the PED is expressed as a negative value
            • For inferior goods the relationship between price and demand is proportional. Therefore the PED is expressed as a positive value.
              • Change in demand% / Change in price%
        • YED measures how sensitive quantity demanded is to changes in income.
          • A YED value below -1 or above +1 indicates that the demand is income elastic. If it is between -1 and +1 then demand is income inelastic
    • Making Marketing Decisions: Segmentation, targeting, positioning
      • The STP Process:
        • Step 1: Segmentation involves identifying groups of potential customers with similar characteristics
        • Step 2: Targeting involves deciding which segment to focus on
        • Step 3: positioning involves developing or adapting the market mix to appeal to that segment
      • Segmentation methods include:
        • Demographic: characteristicsof the population e.g. gender,race, age
        • Geographic: based on physical location e.g. country or area within a country
        • Income: amount of money earned; commonly known as socio- economic groups
        • Behavioural: the actions and habits of the consumer
      • Niche Marketing is when a business targets a smaller segment of a larger market where customers have specific needs and wants
        • Advantages
          • -Less competition
          • -Clear focus on particular customers
          • -Builds up specialist skill and knowledge
          • -Can often charge a higher price
          • -Profit margins often higher
          • -More loyal customers
      • Mass Marketing is where a business sells into the largest part of the market where there are many similar products on offer
        • Key Features
          • -Customers form the majority of the market
          • -Customers needs and wants are general and less specific
          • -Associated with higher production output and capacity
          • -Success usually associated with low-cost operation, heavy promotion, widespread distribution or market leading brands
    • Using The Marketing Mix
      • The marketing mix is a combination of the 7 p's
        • Process
        • People
        • Physical Environment
        • Price
          • Pricing strategies:
            • Skimming is when a business sets high prices at the beginning of the product's life cycle and then lowers it over time
            • Penetration is when a business sets low prices at the beginning of the product's life cycle and then increases it over time
            • Predatory pricing is when a business (usually a market leader) lowers their prices so that competitors are forced out of the market
            • Price makers set the price that competitors will copy. Price Takers are the businesses that copy that price
        • Product
        • Place
          • Place can include:
            • physical stores
            • market places
            • Virtual markets
            • mail order
        • Promotion
          • Promotional activities include:
            • advertising
            • merchandising
            • Sponsorship
            • Branding
      • Goods and services can be sold as B2C and B2B
        • Business to business and Business to Customer
      • Product decisions
        • The Boston Matrix is used to analyse the types of products a business has in their portfolio based on the level of market share and growth it holds
          • Stars have a high market share and growth
          • Dogs have a low market share and growth
          • Problem children have low market share and a high market growth
          • Cash cows have a high market share and a low market growth
        • A range of products is called a product portfolio
        • The product life cycle allows a business to track the individual progress that each product has made over time.
          • Research and development stage
          • Introduction stage
          • Growth stage
          • Maturity stage
          • Decline stage
          • Extension strategy

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