Marketing Unit 2 QUIZ

Marketing: Planning, Research, Product, Price, Place, Promotion, Other 3 P's, BCG Matrix,

Needs vs. Wants

Needs vs. Wants

Determining the difference between needs and wants of a customer: Needs are what humans need to survive; while Wants are desires, arguably humans have infinite wants beyond the ability to afford. The goal of marketing is to turn a customers wants into perceived needs.

What is Marketing?

• Marketing involves identifying the needs and wants of a customer

• Anticipating those needs and wants in the future

• Seeks to satisfy the customer

• About making a “Profit”

Impact on finance

Marketing costs money, joint effort between marketing and finance, need to work together closely to set appropriate budgets

Impact on human resources

Marketing requires staff and HR needs to be sure to hire appropriate staff who; for example, are innovative and competitive in marketing. People who are passionate, determined, a cultural fit, creative. This includes sales people

Impact on operations management (production)

• Marketing requires the development of products

• Operations need to be sure that products developed meet the specifications of marketing department to ultimately satisfy customers needs

What is a Market?

• Market size: total potential # of customers in a particular market

• Competitors: need to be aware of # and size of existing competition

• Barriers to entry: obstacles that determine how easy or hard it is to enter a market

Examples of barriers to entry

• economies of scale

• financial requirement- high start up costs, cost of advertising

• differentiation of products

• govt policies( access to raw materials, licensing)

• predatory pricing (other firms purposely lowering prices to drive other entrants out)

• switching costs: the one time cost incurred by a customer when trying to switch suppliers

• patent

Market oriented

Focused on making products that they can sell by determining what the customer wants

Product oriented

Focus on selling products that they make assuming there will always be a market for their goods

Pros- Market orientied

• Increased confidence that their products will sell

• Firms can respond more quickly to chang\e

Cons- Market oriented

• Conducting market research can be costly

• May find it difficult to meet frequently changing customers tastes

pros- Product oriented

• Associated with the production of high-quality goods

• It has a greater control over its activities

Cons- Product Oriented

• A lot of money is spent on R& D which may not yield results

• Ignoring the needs of the market can lead to failure

Marketing for Goods (vs. Services)

• Are tangibles

• Can be returned if there is a problem or customer changes their mind

• There is ownership, it can be stored and consumed later

• Goods can more easily be compared

Marketing for services

• Are intangible

• Cannot be returned

• No “ownership”of the product; it is consumed immediately

• Can be difficult to compare as experiences differ

• Also differ depending on the location while goods do not

Market Share

• Measures the value of a firm’s sales revenues as a percentage of the total sales revenue in the industry

• Calculated: Firm’s sales in a time period DIVIDED BY the total industry sales in a time period

Importance of being a market leader

• Being market leader can be used in promotional material

• Market leaders are in a strong bargaining position with both suppliers and retailers

• Recruitment of employees is easier

• Despite this, it puts pressure on the business to continue to do well in the future and competitors and media will be watching your actions closely

Objectives For- Profit

• Commercial Marketing: meeting the needs and wants of customers in a profitable way

• Increased sales revenue, higher market share, improved brand awareness, developing new products

Objectives Non- Profit

Social marketing: to encourage the public to support a cause or change behaviors

Build membership, generate awareness, create positive attention, demonstrate organization’s value to society

Changing marketing strategies impacts

• Changing consumer tastes

• Internet and mobile technologies ( consumers have far more choice than ever before)

• Competitive rivalry (prevalence of multinationals has increased competition)

• Globalization ( causing consumer tastes to become integrated)

Is Marketing and Advertising the same?

Advertising is the exercise of promoting a company and its products or services through paid channels such as social media, TV, internet, magazines

Marketing Mix

Product, price, promotion, place

Product

this is the good or service offered in the market

Price

This is the amount consumers are charged for a product

Promotion

this refers to the various ways in which consumers are informed about and persuaded to purchase a product

Market segmentation

Demographic, Geographic, Psychographic

Demographic

Age, gender, race, marital status, religion, and socio-economic status

Geographic

Location- cultures and attitudes; climate

Psychographic

Lifestyle choices including habits, hobbies, interests, and values

Examples of market segmentation

• Dink- Double income no kids

• Silk- Single income lots of kids

• Woof- well off older folks

• Oink & Oinky- one income no kids yet

Market segmentation definition

Splitting a market into individual sub-groups consisting of customers who share common characteristics

Market Segment

is a sub group of market made up of consumers with similar characteristics

• ex- clothing market

Target markets

are the segment of the market that the business is going to aim its products

• clearly identifiable group of customers that an organization focuses its marketing efforts on- from this markets can create a suitable marketing mix

• ex- segments of clothing market include: kids, men’s, women’s,

• Sub categories may include low-income vs. middle income

Order of market segment vs target market

1. Market segments first identified

2. Then business determines which segment they will target

Consumer profile

detailed description of your current customers- figuring out who is actually buying your product to tweak your marketing mix

Consumers profile helps…

A consumer profile helps businesses to get a clear picture of the consumers in the target market to allow for more successful marketing and sales

main character

Main characteristics of consumer profiels

• Income levels

• Age

• Gender

• Social class

• Region

Mcdonald’s takeaways

segmenting central to marketing

• Use market managers: director of young adult, moms, different cultures

• Brand presence: info about consumer behavior developed through market research

• Consumer insights- relevant to segments for marketing (consumer profiles)

Mcdonalds business strategies

• Consistency- similar experience in each store

• Market segmentation such as vegetarian options in India

• Risk taking

• Brand Presence- tag line, promotion

• Innovation-from response and feedback from its customers

Market types

niche vs mass markets

Niche

targets a specific and, well defined market segment

• single product/ single market

Mass

Large number of different market segments are targeted for maximum sales

• single product/ all markets

Advantages Niche market

• Small markets may be able to survive and thrives in markets dominated by larger firms

• Higher prices= higher profits

Advantages of mass market

• Larger economies of scale

• lower average cost of production

• run fewer risks than niche markets

• can sell at lower prices but to a much larger market

Product positioning

Once a market has been segmented and target markets identified, a business has to position its products

• Product position- analyzing how the new brand will relate to other brands in the market

Product positioning map

a graph that analyzes consumer perceptions of a group of competing products in respect 2 characteristics

Unique selling point

a factor that differentiates a product from its competitors such as

• lowest cost

• highest quality

• what do you have that competitors don’t

Marketing research purpose

• Identify needs and wants of customers

• id opinions of potential and existing customers

• give business up to date info abt their industry

• improve marketing strategies for their target market

Primary research

original data collected for a specific purpose

Advantages of primary research

• provides up-to-date and relevant information

• It is confidential

• Provides objective analysis

Disadvantages of primary research

can be time consuming and costly

validity may be questioned due to sample size

ex primary research

• interviews

• surveys

• questionnaires

• focus groups

Secondary research

data previously collected by researchers for other purposes

Secondary research advantages

• Cheaper and faster to analyze than primary

• provides insight into trends

• large range of sources

secondary research disadvantages

• may be out of date

• available to competitors

• non specific nature may be inappropriate format or only provide partial information

Surveys

directly asking consumers or potential consumers- usually by means of a questionnaire for their opinions and preferences

• can provide both qualitative and quantitative data

Interviews

• Conducted by an interviewer usually in the street or respondents home

• skilled interviewers avoid bias in the way they ask questions

• can be explained and follow up

secondary research ex

• market intelligence analysis reports such as key not reports

• academic journals

• govt publicatiopns

• local libraries and govt offices

• internal company records

• trade organizations

• media reports and specialist publications

• internet

• done before primary research

Quantitative

research that leads to numerical results that can be presented