Business Studies OCR: Marketing

Main purposes of marketing

• Identifying and understanding customers

• Informing customers

• Increasing sales

What is marketing?

Finding out the needs of customers and demonstrating how a business fulfils those needs, so that its sales increases

What is market research?

The collection of data on customer habits to help decision-making in marketing

What are the 4p’s of marketing?

1. Price

2. Product

3. Place

4. Promotion

What information does market research aim to find?

• Age

• Economic status

• Culture

• Location

• Wants and needs

What information is needed from market research to avoid expensive mistakes?

• The product or service customers want

• The prices customers are willing to pay

• The design of the product that will be attractive to customers

• How many products customers will buy

• How to target customers

• Where and how to sell goods and services

Primary research methods

• Questionnaire

• Interview

• Trialing

• Focus group

What is primary research?

Data that is collected first hand

What is secondary research?

The collection data using research and information provided by others

Secondary research methods

Methods of secondary research	Description	Advantages	Disadvantages
UK census data	The national census data finds out about all UK households every 10 years Includes information about the numbers of people living in the household, their income and where they live	Information comes from a lot of people-almost the whole population of the country It is already collected ad analysed, reducing the cost to the business	Information has not been collected for the specific needs of the business Information will need careful interpretation
Data from newspapers and magazines	Articles in publications often describe peoples interests and current fashions	Such information is up to date, cheap and a good source of ideas	Information will be general and not specific to the business
Data from websites	Information about other companies can be found, including what they sell and the prices they charge	Cheap to collect and readily available. Such data can help a business decide what to produce and what to charge	Information will be general and not specific to the business
Internal data	This data is collected by the business for certain purposes	Cheap to collect and readily available and is specific to business	Data is historical-its looks at what has happened not what will happen

How to choose what research to conduct?

• How much the business can afford to spend

• What information is required

• Location of customers

• How quickly the information is needed

What is quantitive data?

Data collected that is based on facts or numbers, it is usually easier to analyse than qualitative data

What is qualitative data?

data based on the opinions of those being asked

What is market segmentation?

Splitting the market for a product or service into different parts or segments

Ways of segmenting a market

• Age

• Gender

• Income

• Lifestyle

• Location

Define decline

When sales are falling as the product or service is seen by customers to be old and they switch to new products and services

Define design

An important element in a number of products, especially where style and technology work together

Define growth

When sales are growing strongly as the new product or service becomes known

Define innovation

The improvement of an original idea, which will often involve using a new process

Define maturity

When sales are at their highest level

Define the product life cycle

The life cycle of a product, usually shown as a graph divided into four stages: introduction, growth, maturity, decline

Pricing methods of a product

• Skimming

• Cost-plus pricing

• Promotional pricing

• Competition pricing

• Penetration pricing

Define competition pricing

a price is set based on prices charged by competitors for a similar product

Define cost-plus pricing

a pricing method that adds a percentage for profit to the total costs of making the product. This gives the selling price

Define penetration pricing

A price is set lower than those of competitors.Often used by new businesses to break into the market. It is a short-term strategy only

Define promotional pricing:

Prices are reduced to give products a boost or to sell off old stock

Define skimming

Where a new product is more advanced than that of its competitors, a price is et high as consumers are willing to pay higher prices to own the newest technology

Point of sale promotions

• Price reductions

• Competitions

• Loss leaders

• Free samples

Ways of advertising

• Social media

• Websites

• Television

• Print media

• Radio

Physical distribution

the distribution of a good or service using physical presence

Digital distribution

the distribution of goods and services digitally by downloading from a website

Define market data

Information that can help marketing decisions

Define market share

The % of total sales of a product that a business has made