CHAPTER 17 - MARKETING

Definition of Marketing

Identifying, anticipating, and satisfying customer needs profitably through research, product design, pricing, promotion, distribution, and customer service.

Corporate Objectives

Overall business goals such as growth, profit maximization, and brand leadership.

Advantages of Marketing Objectives

Provide clear direction and focus, allow for performance measurement, and serve as a basis for strategic decisions.

Disadvantages of Marketing Objectives

Unrealistic targets can demotivate staff, external factors may render them unachievable, and they may conflict with other departments' objectives.

Demand

The quantity consumers are willing and able to buy at a given price, influenced by factors like disposable income and consumer tastes.

Supply

The quantity firms are willing and able to sell at a given price, influenced by factors such as production costs and technology.

Equilibrium

The price point where market demand precisely matches supply.

Advantages of Equilibrium

Provides a model to explain price changes and helps businesses set competitive pricing strategies.

Disadvantages of Equilibrium

Real markets may not be perfectly competitive and can be distorted by external shocks.

Consumer (B2C) Market

Market where products are sold directly to end-users.

Industrial (B2B) Market

Market where products are sold to other businesses.

Example of a Consumer Product

Convenience products like sweets or newspapers which are frequently bought.

Advantages of B2B marketing

Stable long-term contracts and larger order sizes.

Customer Orientation

Focuses on understanding and meeting customer needs, typically through research.

Advantages of Customer Orientation

Reduces risk of product failure and adapts effectively to market trends.

Disadvantages of Customer Orientation

Can be expensive due to research and offers no guarantee of success.

Market Share Formula

(Firm's sales / Total market sales) x 100.

Advantages of high market share

Typically leads to higher profits and stronger retailer support.

Disadvantages of low market share

May require higher discounts to compete and weaken brand image.

Market Segmentation

The process of splitting a market into distinct groups of consumers with common needs.

Geographic Market Segmentation

Segmentation based on location such as region or city.

Psychographic Market Segmentation

Segmentation based on lifestyle, personality, and values.

Customer Relationship Marketing (CRM)

Strategies focused on building long-term relationships with customers to increase loyalty.

Advantages of CRM

Boosts customer loyalty and repeat sales.