Business studies - Business report memorisation

Strategic role of marketing

Profit maximisation - translates this goal into reality.
Choice - attract customers to purchase their products
Standard of living - appeal to the ‘want’ element of human behaviour
Improving brand awareness

Factors influencing consumer choice -Psychological

Within the individual, affects their buying behaviour. Consists of perception, motives, attitudes, personality and self image, and learning

Consumer laws

CCA 2010 - protects consumers from undesirable practices, and protects competition.
ACL - framework for fair trading and consumer protection.

Consumer laws - importance

Governing body ACCC will punish businesses caught with unconscionable conduct - incurs considerable fines and damages the business’ reputation

Consumer laws - deceptive and misleading advertising

Bait and switch - advertising products at low prices to attract customers, but has low stock, redirecting them to higher price products
Dishonest advertising - when advertisements create a false impression of a product by claiming a product has specific qualities and does not.

Why is price discrimination illegal?

The setting of different prices for different markets can reduce competition.

Implied conditions - aspects

Goods must be acceptable quality - fit for purpose, free from defects, safe and durable

Warranties

A promise from the business that they will remedy any defects in the goods and services they deliver.

Ethical - truth, accuracy and good taste in advertisements

Untruths due to concealed facts - misleading
Exaggerated claims

Marketing process - importance

Allows the implementation, development and review of the marketing plan - this gives purpose and direction to all business activities.

Situational analysis - importance

First step in the formation of a marketing plan and marketing strategies

SWOT analysis - importance

Helps to develop a more effective marketing plan, and more successful marketing strategies as their current situation is addressed - ultimately leading to improved financial performance

Product life cycle - importance

Different strategies apply to different stages of the life cycle, it is critical for businesses to apply relevant strategies which are beneficial to their current situation.

Market research - definition

The process of intentionally collecting, recording and analysing information concerning a specific marketing problem

Market research - importance

Helps in developing marketing strategies that meet the needs of the target market. Identifies marketing opportunities and problems, evaluates the implementation of the marketing plan.

Marketing objectives

Profitability
Increasing market share
Expanding product mix
Maximising customer service (meeting needs and wants)
Expanding into geographic markets
Improving brand awareness/recognition

Identifying target market - importance

Allows a business to better satisfy needs and wants for consumers. Makes marketing campaigns more cost and time efficient, allows the refinement of marketing strategies to influence customer choice.

Implementation, monitoring and controlling

Financial forecast - assists business in deciding resource allocation
Comparing results - measures success of marketing plan
Revising marketing strategy - helps in deciding which objectives are being fulfilled.

Product/service differentiation

Promotes a point of difference - influencing customer choice by making a product seem superior.

Positioning

Makes a product stand out from competitors - influences customer choice

Product strategies (branding) - benefits

Halo effect on other products
Helps introduce new products (expand product mix)
Repeat sales
Brand loyalty

Product strategies (packaging) - benefits

Reinforces brand image
Serves a functional and communicative purpose for consumers
Encourages first time customers - positive first impression

Price

The amount consumers are willing to pay in exchange for a business’ product

Pricing strategies - price skimming

Charging highest possible price for a product during the introduction phase. Attracts those willing to pay for a product’s novelty/feelings of prestige and status it gives.

Pricing strategies - price penetration

Charging lowest prices possible for a product during introduction phase. Aims to quickly achieve a large market share as customers are attracted and competition is dissuaded.

Pricing strategies - Loss leader

Selling a product at a loss to attract consumers to buy other products, hoping to recover the loss made on the low-price item.

Price strategies - price points

Selling products at predetermined prices - makes it easier for consumers to find the type of product they need and to ‘trade up’ to a more expensive model.

Promotion - definition

Refers to the methods a business uses to inform, persuade and remind a target market about their product/service

Promotion - importance

Mix of promotional strategies meets different needs of the target market
Attracts customers by raising awareness
Encourages new users to purchase more
Encourages new and existing customers to purchase new products

Elements of marketing mix - advertising

Provides businesses with the flexibility to reach an extremely large audience or focus on a smaller distinct target market. However is expensive and inpersonal

Elements of marketing mix - Personal selling

Message received by consumers can be tailored to their circumstances, can lead to repeat sales, awareness of after-sales service (customer service). However is high cost and is not uniform.

Relationship marketing - definition

The development of long term and cost-effective relationships with individual customers.

Elements of marketing mix - relationship marketing (adv+disadv)

Increases customer loyalty, data from loyalty programs enhances marketing strategies - market research. However setting up loyalty programs are high cost.

Elements of marketing mix - sales promotion

Use of activities or materials as direct inducements to consumers. Entices new customers, encourages trial purchase of a new product, increases sales to existing customers and repeat purchases.

Publicity

Free news story, timing is not controlled by the business.

Place

Activities that make the products available to customers when and where they want to purchase them.