DLH Marketing Topic 4

Market size

1. Volume of products bought in all firms in an industry in a given time period

2. Value of sales in all firms in an industry in a given time period

Market growth

The percentage change in sales (volume or value) over a selected period of time.

final - initial / initial x 100

What is market growth affcted by?

Economic growth

Change in taste

Nature of the product

Fashion

Market share equation

Percentage of sales held by one firm in ap particular industry

Total sales revenue of one firm

——————————————— x100

Total sales revenue of the market

Market Concentration

Total amount of market share of the top firms in the industry.

Market leader

Firm Who has the biggest market share in an industry

Marketing

Management role of predicting, identifying and meeting the needs and wants of customers in a profitable manner.

What can marketing be summed up as?

• Price

• Product

• Promotion

• Place

• People

• Physical Evidence

• Process

Market Orientation

An approach adopted by business that are outward looking. They focus on marketing products they can sell rather than selling products they can make comfortably.

Product Orientation

Marketing approach adopted by business that are inward looking. They focus on selling products that are easily/comfortable to make rather than making products they can sell.

Commercial Marketing

The use of marketing strategies to meet needs/wants of consumers in a profitable way.

Social Marketing

Planning and implementation of programs designed to bring about social change using concepts from commercial thinking - e.g.. smoking campagin etc.

What is the cycle of marketing planning process?

Marketing audit

Marketing objectives

Marketing strategies

Monitoring and Review

Evaluation

Market Segmentation

Division of the market into sub groups according to different factors.

Market segmentation - demographics

The division of the market into sub groups such as age, gender, ethnic origin, income e.t.c

Geographic Factors

Location , climate

Psychographic

Considers emotions and lifestyle of customers such as values, ethics, status, religion, culture

Market Segmentation Advantages

• Understanding of customers

• Higher sales

• Product differentiation

• Identification of opportunities

In the perception map what is high price and low quality?

Cowboy Brand

In the perception map what is high price and high quality?

Premium Brand

In the perception map what is low price and low quality?

Economy Brand

In the perception map what is low price and high quality?

Bargain Brand

Niche Marketing

Targeting of a specific and well definmed segment of the market.

Mass Marketing

A number of different market segments are in communication to at the same time

Unique Selling Point

Any aspect of a product that makes it stand out in a positive way

What are some examples of differentiation?

Quality

Branding

Colour

Payment/Delivery Options

Size

Features

Design

What is simple linear regression?

Statistical Business management tool used to study the nature of the relationships between 2 vairables.

Identify:

-strong positive

-weak positive

-no correlation

-weak negative

-strong negative

Extrapolation

Technique that enables managers to estimate data values beyond the original data set used as the basis to determinate the correlation.

Sales Forecasting

Quantitative management technique used to predict a firm’s level of sales over a given time period. They help predict problems/opportunities, but also may be inaccurate.

What are the 5 ways of understanding sales forecasting?

Market Research

Time Series Analysis

Seasonal Variations

Cyclical Variations

Random Variations

What is Market Research?

Identifying current and future buying haibts

Time Series Analysis

Predicting sales levels by looking at the underlying trend from a sequence of sales figures from the past

Seasonal Variations

Fluctuations depending on time of the year - eg. fireworks, easter, xmas

Cyclical Variations

These are fluctuations in sales revenue linked to economic cycle of booms and slumps

Random Variations

Unpredictable fluctuations caused by erratic/irregular factors that cannot be anticipated (COVID, war, disease)

What does the choice of forecasting method rely on?

Accuracy - greater degree of certainty the more accurate (sales from months instead of each year)

Time - Easier to predict close to the time

Cost - If there is widespread info - more accurate

If it‘s difficult to find info, and expensive then probably not accurate

Benefits of sale forecasting

-Improved capital and cash flow

-Improved stock control

-Improved product efficiency - see if more staff are needed in certain periods of the year

Limitations of sales forecasting

Limited info - based on predictions

Inaccuracy - guesswork

Ad Hoc

Specific Issues to be solved when necessary

Continuous Market Research

Regular and ongoing

Quantitative Data

numbers, measure information

Qualitative Data

non-numerical and opiniated data

Primary Research

Surveys/Questionnaires - online, self completed, postal

What should surveys have?

-Avoid bias or leading questions

-Avoid specialised language

-Use open ended and closed questions

Primary Market Research Interviews + and -

Discussion for investigation

+in depths analysis

+misunderstandings can be cleared

-non-quantifiable means analysis is difficult

-time consuming

-potential bias

Primary Market Research Focus Groups + and -

Team of consumers discuss thoughts about product

+engaging discussions

+products tried and tested

+in depth analysis of a number of people

-time consuming

-expensive

-participants may have similar personality traits (not getting a wide range of opinions)

Primary Market Research Observation + and -

Watching how people behave

+shows what people thinking

+what they do and don’t do

-expensive to employ psychologists

Secondary Research

Already been collected for a different purpose

Secondary Market Research - Analysis

Annual Report, Competitors, Sale stats

Secondary Market Research - Academic journals

Publications from unis

Secondary Market Research - Govt Publications

ONS - economic and social trends

Secondary Market Research - Media Articles

Books, Auto biography, TV, Newspaper

Pros of Secondary Market Research

-Cheaper

-Wider Range of Resources

-Large Sample size

Cons of Secondary Market Research

-Could be outdated

-Needs to be manipulated to suit needs of researcher

-Competitors have access too

What is a sample and what are some sampling methods?

Sample is a small minority of a target population

Random, Convenience, Quota - all types of sampling

Random Sampling

Equal chance of being chosen

Convenience Sampling

Using individuals who are easy to reach

Quota Sampling

Takes account of target market and then receives feedback from those people.

Ethical considerations: The 5 D’s

Damage - perception of people and the environment

Deceitful - presenting data openly, not in a misleading way

Deceptive - Letting people know their views are being recorded

Disclosure

Detachment - Interviewer must be free from bias

What are the 7 P’s of Marketing?

Product – What you are selling

Price – How much it costs

Place – Where it is sold

Promotion – How it is advertised

People – Staff and customer service

Process – How the service is delivered

Physical Evidence – Tangible proof of the service (e.g., packaging, store, branding)

What is a product?

Good or service provided by business

Fast Moving consumer goods

Every day convenience products, frequent purchases

Consumer Perishables

Products which do not last very long. eg. flowers

Consumer Durables

Products which last for a long time. Usually expensive so infrequent purchases eg. furniture

Speciality Products

Exclusive, highly expensive products - sports cars house

Product Portfolio

Range of products or brands provided by a business

What is the Boston Consulting Group Matrix?

What does star mean?

High Market Share, High Growth

-Increasing revenue but increasing competition

-High Promotion Costs

-Outflows may exceed inflows at first

What does Cash Cows mean?

High Market Share in a low growth market

-Less competition

-Stable Income

-Established Markets

-Low Promotion Costs

What does Question mark mean?

Low Market Share, High Growth Market

Potential to grow in a high growth market

Huge investment needed due to competitors

What does dog mean?

Low Market Share in a Low growth Market

Most likely to withdraw if business gets into financial difficulty

What are the stages of product life cycle?

Development → Introduction → Growth → Maturity → Saturation → Decline

What is Product design?

Deciding on a production method where product looks good, easy and cheap to produce

Process of developing G/S?

Generation of new ideas → analysis of ideas → product development → test marketing → launch

What are influences on development?

Entrepreneurial Skills - R&D, finding gap on market

Competitors Actions

Technology

Research - personal needs/culture

Brand - uniqueness

What is a brand?

Name that is identifiable with a product of a business

What does successful branding do?

Price advantages, Recognition and Loyalty

What is a trademark?

Legal Protection to the owner to have exclusive use of brand name.

What is brand awareness?

Measures extent to which people recognise a brand

What is Brand development?

Ongoing and long term marketing process of importing and enlarging the brand name to boost revenue

Brand Loyalty

Have preference for a brand

Brand Switching

Original brand lost appeal

Cost Plus Pricing

Adding a percentage to the cost per unit of output to determine the selling price

Penetration Pricing

Low price set to break into market or gain market share

Loss Leader

Settling the price below the cost of production with the intention of raising sales of other products in your portfolio

Predatory Pricing

Firm settling very low prices to drive other firms out of market then returning to normal price

Premium Pricing

Settling prices significantly higher because product is of higher quality or unique

Dynamic Pricing

Varying pricing to reflect changing demand

Competitive Pricing

Firms set prices equal or similar to competitors

Contribution Pricing

Takes into account direct cost of making the product

What is PED?

The responsiveness of a change in the quantity of a good or service demanded to a change in price

What are some factors influencing PED?

Necessity

Substitutes

Habitat

Branding

What is promotion?

The process of communicating with current and potential customers as well as other stakeholders.

Objectives of Promotion

A - Attention

I - Interest

D - Desire

A - Action

What is above the line promotion?

Advertising to a mass audience through media

What is below the line promotion?

A more targeted form of communication using other methods such as public relations

What are all the elements of the promotional mix?

Advertising - through media (social media, tv, radio)

Sales Promotions - incentive to buy

Merchandising - point of sale that is designed to make customers to buy (shelving, design, space)

Public Relations - Gaining publicity through media, could be unreliable as results could be negative

Trade Fair - Companies advertising to clients/business

Sponsorship - targeted, televised

Guerrilla Marketing - achieving conventional goals using conventional methods (kitkat bench, supercar covered in ads)
Packaging - carrier bags - logo to be seen

What are distribution of channels (7P’s of Marketing - Place)

The route a product takes to get from the manufacturer to the consumer

If the route is selling directly to consumers how many levels is it?

If the route is selling through retailers how many levels is it?

If the route is selling through wholesalers how many levels is it?

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