Marketing A2 Notes

Revision notes on marketing for A2 Business Studies

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  • Created on: 25-03-08 16:29
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Business ­ Marketing Emma Rudd BMA
Marketing ­ The Marketing Model
Marketing Decision Making
Marketing managers face numerous opportunities and threat in the business environment and must
therefore make decisions about the best course of action to take at any given moment. The resources of
the firm and its perceived strengths will influence their decisions. In some cases managers will take
decisions in a very scientific manner. They will gather data, analyse it thoroughly and select the best
strategy. They will then review the results and make any changes accordingly.
The `Scientific Marketing Decision Making' approach should reduce the risks of making the wrong
decision. However it can have some limitations and drawbacks:
It is only effective as the underlying data. If the information on which the analysis is based is
incorrect then inevitably the decision is unlikely to be the right one.
In some situations the data may not be easily available or may be too expensive to gather.
Making a decision on a hunch can be quicker than using a more scientific approach (although it is
riskier because it is not supported by quantifiable data).
The most appropriate decisionmaking method will depend on the situation and the nature of the
decision. In a stable market with plenty of information available and plenty of time to make a decision then
the scientific approach makes sense. If however a manager is eager to find a creative solution to a
problem or if the situation is so unusual that there is not much information to go on, a hunch may be the
Managers often use a combination of a hunch and a scientific approach rather than one or the other, e.g.
they may well gather and analyse data to narrow their options, but when it comes to actually making the
decision their own gut feelings are likely to play an important part as well. It is rare that any data gathered
will provide a clear solution the options have to be weighed up and interpreted and a hunch can have an
important role to play in this.
Marketing ­ Approaches to Marketing
Product led, Market led VS Asset led Marketing
It is important that all firms monitor their market conditions to ensure they are offering customers what
they want. If a firm identifies customer requirements and tries to produce these goods and services, they
are using a `marketled approach'. The decisions of the firm are determined by customer needs and
wants. By contrast a productled firm focuses on what it can do and hopes that once it is produced
customers will want the good they have made.
A product led approach is much riskier than a market led approach because it assumes customers needs
will coincide with what the firm itself wants to produce. Being product led will tend to work only if there is
little competition (so customers have no other choice) or if the firm is fortunate enough to produce
something customers want.
The Firm The Customer
A Market led strategy is much more likely to be successful because it puts customers first and this should
help ensure that a firm produces something that the market actually wants. However, even this approach
has potential problems: firms have to accept that they cannot always meet customer requirements a
market led firm may end up entering markets where it has limited experience and no particular
competitive advantage. This could stretch its resources, lead to poor customer service and damage the
overall brand name.
The Firm The Customer
It is better, therefore, for a firm to compare what the market wants with what it can actually deliver. This
is known as an `asset led approach'. Asset led marketing matches' firm's skills and strengths with market
opportunities this should maximise its chances of success.
The Firm The Customer

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Business ­ Marketing Emma Rudd BMA
Marketing ­ Correlation and Extrapolation
When analysing market trends firms will attempt to identify whether there is a correlation between
different variables and levels of sales. Correlation occurs when there appears to be a link between two
factors. For example a firm might discover a correlation between their sales and the level of income in its
market ­ with more income consumer sales might increase.…read more

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Business ­ Marketing Emma Rudd BMA
It is important therefore for firm to look ahead when undertaking market planning. This way a manager
can identify any particular segments of growth or decline, and act accordingly. Obviously if a firm can
plan ahead it is more likely to be successful than if it has to react to a change once it has occurred.
One method of predicting future trends is known as `extrapolation'.…read more

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Business ­ Marketing Emma Rudd BMA
When deciding on a marketing strategy there are many issues to consider, such as
Should the firm compete in a niche or try to compete head on with the major players in a mass
Should the firm try to match competitor's offerings but sell them more cheaply (a low cost
strategy), or should it aim to differentiate itself and charge more (a differentiation strategy).…read more

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Business ­ Marketing Emma Rudd BMA
Market Penetration: this strategy occurs when a firm tries to sell more of its existing products to
its existing customers. To achieve more sales the firm may adjust elements of its marketing mix. For
example it may increase it's spending on advertising or cut its price. This is a relatively low risk
strategy, which can be implemented, in the short term.
New Product Development: this strategy focuses on developing new products and offering
these to existing clients.…read more

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Business ­ Marketing Emma Rudd BMA
The marketing mix should be linked directly to the strategy. If the strategy is to position the product at the
upper end of the market this will influence the price being charged, where the product is distributed, how
the firm promotes the brand and the actual design of the product itself. A premium product for example
is likely to have some form of USP to be relatively highly priced and to be distributed through
wellselected distribution channels.…read more

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Business ­ Marketing Emma Rudd BMA
Does it fit with the firm's strengths?
The ultimate test of any plan is, of course, whether it actually works. To some extent this is in the hands
of the firm but it also depends on external factors. Even the most successful businessperson is willing to
accept that luck played some part in his / her success. Succeeding when market conditions are against
you is obviously more difficult than succeeding when the business climate is very favourable.…read more

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Business ­ Marketing Emma Rudd BMA
Setting the Marketing Budget
The marketing budget should be set in consultation with those who will be responsible for undertaking
the activities it involves. The amount of money to be spent on marketing overall for example should be
agreed with the marketing manager. Given that the marketing manager is the person who will be help
accountable if the budget is not hit he or she should obviously be involved in deciding what the figure
should be.…read more


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