business new unit

• Market share is the % of the total market that it controls

• Innovation, producing lots of new products or services

• Strengthening customer relationships

• Buying up competitors

• Advertising 

• Revenue is the income of the business

• Increasing number of customers

• Increasing the number of purchases per customer

• Raise/reduce price

• advertising

• A brand is a name, term, design, symbol or other feature that distinguishes a business or product from the competitors

• Being innovative

• Not copying established brands

• Being consistent when speaking to customers

• Offer more rather cutting prices when promoting

• Advertising

• Social media

• Like humans - products go through a lifecycle

• From research and development at the start to launch (birth) and through to decline (death)

• Some products take longer than others to go through the lifecycle

• This is the first stage of the product lifecycle where a product is designed and market research is analysed to produce a product which will satisfy customer needs

• Cash flow at this point is tight, this is a very expensive phase and at this point the product is not making any revenue and therefore no profit

• All capital at this point will just be an investment, there is always a risk of the product not being a success

• The introduction phase will involve high costs in research and development and the product may have been test marketed before launching, so profits may be negative

• Sales will be low as customers may not yet be aware of the products

• Advertising will be informative to let customers know that the product has been launched

• Growth phase products are enjoying rapid growth in sales and profits

• At this stage the customers are aware of the product and demand is high

• A business may advertise the product to take advantage of the high demand

• Maturity phase products face intense competition now all the producers have joined the market

• Market is starting to be saturated – everyone has bought the product who is likely to buy

• Sales are high but profits are starting to fall

• Products have to be discounted to keep sales high – so prices may be lowered or the product may be put on sale

• Decline phase products may be limited in production 

• At this stage profits and sales have fallen 

• The product may be withdrawn from sale

• The business may decide to heavily discount to get any last sales before the product becomes obsolete

• There are ways that a business can extend the lifecycle of the product, the most popular ways are:

  1. updating packaging

  2. adding more or different features

  3. changing target market

  4. advertising

  5. price reduction

• A product portfolio is the collection of all the products and services offered by a company

• This is just some of the products in the portfolio of Unilever

• The Boston matrix is a marketing planning tool which helps managers to plan for a balanced product portfolio 

• It looks at two dimensions: market share and market growth, in order to assess new and existing products in terms of their market potential

• It helps marketing managers work out how much to spend on each product

• Star products:

  • Have high market share

  • Are in a high growth market

• Star products need to maintain their current marketing spend to keep sales high

• Question mark products:

  • Have low market share

  • Are in a high growth market

• Question mark products have lots of potential to become a star if they are managed correctly

• Cash cow products: 

  • Have high market share

  • Are in a low growth market

• Cash cow products are good sellers and need little or no new investment

• Dog products:

  • Have a low market share

  • Are in a low growth market

• Dog products require no investment as they are in the decline phase of their lifecycle

• Product may have become obsolete or replaced

• Product should be discontinued

• The Boston matrix is a good starting point when reviewing an existing product line to decide future strategy and budgets

• The conclusions drawn from such an analysis are to transfer the surplus cash from cash cows to the stars and the question marks, and to close down or sell off the dogs 

• Products may not be low or high market share they could be medium

• High market share does not always lead to high profits, there are high costs also involved with high market share

• Set of plans to achieve specific marketing objective

• The right product in the right place at the right time

• This can be done through the 4Ps:

  • Product

  • Price

  • Place

  • Promotion

• The product element refers to the products or services the business sells.

• A business should conduct market research to find out the needs and wants of its target market.

• Goods are a tangible item that a customer can physically touch, for example a mobile phone or a chocolate bar. In contrast, a service is an intangible product that cannot be touched, such as a spa day experience or having a haircut.

• A business needs its products to stand out from the products of its competitors so that customers buy from it. To do this, a business creates a unique selling point (or USP). For example, a business might emphasise in its marketing that the bananas it sells are fair trade, and a web developer might be able to include artificial intelligence in a website.

Price is the amount a business charges its customers for its product or service.

Prices are set according to how much a customer is willing and able to pay. Customers want value for money and this may mean a business needs to set low prices to generate high levels of sales.

However, some products require higher prices, as they are perceived to be high-quality, luxury goods. Examples include sports cars and designer bags. The general rule is that high quality usually means a high price whereas low quality usually means a low price.

Companies use pricing strategies as a way of making sales. For example, a company might lower its prices to increase sales and demand, or increase its prices as a way of making customers view its products as being of higher quality.

• competition – a business may need to reduce its prices to compete with other businesses

• customer opinions – about the product and its worth

• brand image – some products can have a higher price because customers perceive the business' brand as desirable

• availability – if a product is in short supply, this can drive up the price as customers are more likely to pay more for something in limited supply (eg a concert ticket)

Place refers to where the customer is able to purchase the product or service. This can include:

• a retail store

• an online store or app

• directly from the manufacturer

Businesses that sell mass-market products may use many different options to make sure that their customers can easily purchase their products.

Promotion is the methods a business uses to create interest in its products and services among its customers and potential customers. The main aim of promotion is to either persuade customers to purchase, or inform about products.

This includes:

• TV adverts

• use of billboards

• social media activity

• influencers

• online video and banner adverts

• email advertisements

• sponsorship deals

• discounts and special offers
  

• A mass market is one that caters for (almost) everyone, mass marketing is the process of selling products to all consumers regardless of age, gender, etc in the same way

• Many products competing for customer attention.

• Close substitutes for each other.

• Most successful products will differentiate their product in some way - develop a USP

• Prices charged by businesses will be similar.

• Charge the ‘going rate’

• Fear of price war as this can reduce revenue for every competitor

• Price leadership = common

• Multiple channels to distribute goods eg supermarkets, wholesalers, independents etc

• Internet

Invest heavily in advertising and promotion - very important in mass markets

• function 

• aesthetics 

• cost/economic manufacture.

  Changes in the elements of the design mix to reflect social trends: 

• concern over resource depletion: designing for waste minimisation, re-use and recycling 

• ethical sourcing. 

• The way a product works.

• Does it do what it needs to do?

• Is the product reliable?

Designing and arranging things people use so that the people and things interact most efficiently and safely.

The study of how people interact with their environment and the equipment they use – often in the workplace. 

Some products are ergonomically designed, which means people can interact with them without expending any unnecessary effort.

• Products which allow people  to reduce unnecessary effort 

• More predictable and stable demand

• Longer product life cycles

• Lower promotional costs

• Build reputation for quality based on reliability

• Economic manufacture through economies of scale

• Products/services should stimulate people’s senses in addition to performing a function.

• Designers must consider size, appearance, shape, smell or taste, or the presentation of a service.

• Some companies choose designs that use expensive materials to add to the aesthetic appeal of a product.

• Eg. luxury cars use leather seats/wooden components.

Well designed products/services are more likely to be economically viable, meaning business should be able to produce and sell the product/service at a profit.

• Designing products for waste minimisation, re-use, recycling and general ethical sourcing to encourage sustainability

Promotion:

The use of marketing tools to bring a product or service to the attention of potential buyers.

• Tell consumers about a new product

• Remind them about an existing product

• Reach a target audience that is spread over a wide area

• Reassure customers about products

• Show consumers that their products are better than rivals

• improve/develop image of the business

advertising in the media

 increase customer awareness

put pressure on/convince customers to buy a product. Appeal to emotions

aimed at existing customers

promotion that does not involve advertising

• Sales promotions

• Public relations

• Merchandising and packaging

• Direct mailing    

• Direct selling or personal selling 

• Exhibitions and trade fairs

• Cost

• Market type

• Product type

• Stage in the product life cycle

• Competitors’ promotions

• Legal factors

A brand is a a characteristic name or symbol that distinguishes one product from another

A brand is a a characteristic name or symbol that distinguishes one product from another

A brand is a a characteristic name or symbol that distinguishes one product from another

• Manufacturer brands - Nestle’s KitKat

• Own-label brands - ASDA chocolate

• Generic brands - tin foil, carrots, aspirin

•  new name, term, symbol, design or combination is create for an established brand with the intention of developing a new, differentiated identity in the minds of consumers, investors, and/or competitors. 

• Aims to build communication and relationships

• Spreads the cost of marketing across al the individual brands

• Takes a long time to build a brand image 

• Any unfavourable incidents the wholembrand suffers 

• Awareness of company can be worldwide  

• PB strategy will aim to show the customer the features and benefits of a product which will differentiate it from other similar products in the market place 

• Own brand or own label products are made by a manufacturer on behalf of a super market 

• Sells inferior good

• newspaper advertising;

• TV advertising;

• radio advertising;

• leaflets and flyers;

• brochures;

• posters;

• direct mail;

• business cards;

The process of pricing is the choice of pricing strategy that a business makes when setting prices for their products or services

• e decided upon

• A strategy is the medium to long term plan of the business and the pricing will need to fit with the business objectives

• The pricing strategy will depend on many Factors; The product or service itself Competitors in the market e.g. Heinz ketchup The aims and objectives of the business

• A skimming price strategy is used when launching a new product

• The price is set high to start, this will create high profits and may be used to pay back high R&D costs

• Usually used in technological or very innovative products which have few competitors

• As competitors eventually enter the market the price is then reduced

• Some products or services are priced in line with competitors

• This means that customers will have to judge a product or service on “non-price” methods such as; quality of service or speed

• Strategy usually used where products in a market are all very similar

• This means setting prices really low on a new product to encourage sales and to persuade customers to try the product. Then when they like the product and have to keep buying it the business raises the price

• Low prices should gain the business more market share (market penetration)

• Mass market – repeat purchases e.g. tea bags, biscuits which are called Fast Moving Consumer Goods (FMCG).

• in oligopolies or monopolies existing businesses may hold off the threat of a new entrant by lowering their prices so that any competitor cannot make a profit.

• When aggressive price cutting is used to deter competitors or push them out of the market

• This means pricing a product at £1.99 rather than £2.00 to appear cheaper

• Some businesses consider pricing carefully as it is often an indicator of quality

• High value or status items like luxury cars avoid pricing just below but instead may price higher to match their customers’ expectations

• A USP is a unique selling point – it is the unique details or features of the product that differentiates it from its rivals

• For example: In a chocolate bar it may be the % of cocoa, or extra ingredients

• In a washing machine it may be how quiet it is, or the load capacity or its eco settings

Elastic demand Homogenous products which have lots of substitutes will have to price close to competitors Too high and consumers will switch to alternatives Too low and consumers may perceive the product as inferior to comparable Inelastic demand Unique products which have few alternatives will be able to command premium prices as consumers will be unable to switch and therefore willing to pay the price