4.1 Intro to Marketing

Marketing

The process of identifying and satisfying customer needs profitably

Market (place)

A place where buyers and sellers interact

Market (location)

A geographic area where products are sold

Market (product)

A category or type of product

Product orientation

Focus on developing high-quality products based on internal expertise rather than market research

Advantages of product orientation

Strong USP, patents, monopoly power, limited competition

Disadvantages of product orientation

High risk, high R&D costs, no guarantee of demand

Market orientation

Focus on meeting customer needs using extensive market research

Advantages of market orientation

Low risk, strong product–market fit, repeat customers

Disadvantages of market orientation

Weak USP, high competition, reliance on accurate research

Social enterprises and market orientation

Social enterprises must understand human needs before developing solutions

Metaverse

A virtual reality environment where users interact with digital spaces and other users

Ethical concerns of the metaverse

Privacy issues, data misuse, isolation, human rights risks

Market share

Percentage of total market sales controlled by a business

Market share formula (revenue)

Firm sales ÷ Total market sales × 100

Market share formula (volume)

Firm units sold ÷ Total units sold × 100

Why market share needs market and time

Ensures accurate comparison and analysis

Market growth

Percentage change in total market sales over time

Market growth formula

(Sales at T1 − Sales at T0) ÷ Sales at T0 × 100

Market growth opportunity

Easier to increase sales and revenue

Market growth threat

Attracts new competitors

Market leader

The business with the highest market share

Advantages of market leadership

Distribution access, brand recognition, economies of scale, price leadership

Disadvantages for the business

Diseconomies of scale, reduced innovation, new competitors

Disadvantages for society

Less competition, abuse of power, social and environmental harm

BCG matrix

A tool analysing products by market share and market growth

BCG matrix axes

Market share and market growth

Cash cow

High market share, low market growth, generates steady cash

Star

High market share, high market growth, requires heavy investment

Problem child (question mark)

Low market share, high market growth, high risk

Dog

Low market share, low market growth, often phased out

Limitation of the BCG matrix

Ignores external environment and product life cycle

Why BCG classifications can be subjective

Lack of clear market share and growth data

Common exam mistake

Confusing marketing with promotion

BCG exam requirement

Justify classification using data