Key Concepts in Marketing and Market Structures

Market

Where buyers and sellers meet at an agreed price, can be physical or virtual.

Niche Market

A market with special characteristics.

Market Segmentation

Segregating products by characteristics like price, age, gender, or income.

Advantages of a Mass Market

Products for a large audience, high sales revenue, lower production costs.

Disadvantages of a Niche Market

Less room for expansion, vulnerability to economic downturns.

Market Size Measurement

By the amount of revenue a business earns.

Tariff

A tax imposed by one country on imports to influence another.

Dynamic Market

A market that is constantly changing, adapting to market change or switching to online retailing.

Stable Market

A market where change is slow in terms of market change or share, constant price.

Factors Driving Change in the Market

Consumer preferences, new technology, government intervention.

Product Innovation

When a product is tweaked or completely changed to become better.

Process Innovation

Changing how products are made to lower costs, without dropping quality.

Contingency Planning

Planning for risks (not uncertainties) and follow-up actions (damage limitation).

Product-Oriented Company

Focuses on its products, skills, knowledge, and systems supporting the product.

Customer-Oriented Company

Focuses on satisfying and retaining customers.

Oligopoly

A market with few major firms in an industry.

Primary Research

Gathering information firsthand (e.g., questionnaires, focus groups).

Secondary Research

Surveys done by government agencies or other firms.

Qualitative Data

Data that attempts to discover consumers' genuine opinions (open questions).

Quantitative Data

Collection and analysis of numerical data.

Market Segmentation Indication

Different customer preferences (e.g., age, gender, income).

Product Differentiation

Marketing to highlight differences to achieve competitive advantage.

Market Mapping

Plotting brands/firms based on how they meet customer needs (e.g., quality vs. price).

Competitive Advantage

Advantage one product has over competitors (e.g., price, quality).

Adding Value

Increasing the worth customers place on a product.

USP

Unique Selling Proposition.

Unique Selling Point

An attractive benefit associated with one brand.

Law of Demand

Inverse relationship between price and quantity demanded.

Law of Supply

Positive relationship between price and quantity supplied.

PED

Price Elasticity of Demand, responsiveness of quantity demanded to price change.

Elastic PED

Quantity demanded is highly responsive to price changes.

Inelastic PED

Quantity demanded is not very responsive to price changes.

YED

Income Elasticity of Demand, responsiveness of demand to income change.

4 P's of the Marketing Mix

Price, Place, Promotion, Product.

3 Elements of the Design Mix

Function, Aesthetics, Economic Manufacture.

Functions of Promotion

To inform and persuade potential customers to buy.

Branding

Creating an image of a product in the consumer's mind.

Types of Branding

Product, multiple, umbrella, corporate, own label, personal.

Types of Pricing Strategies

Cost-plus, price skimming, penetration pricing.

Penetration Pricing

Entering markets with a low price to entice customers to switch.

Destroyer (Predatory) Pricing

Eliminating a competitor by setting prices lower than theirs.

Types of Distribution Channels

4-stage, 3-stage, 2-stage.

E-retailing

Online sales to customers.

Stages of the Product Life Cycle

Development, introduction, growth, maturity, decline.

Extension Strategies

Actions to lengthen the maturity stage of a product.

Boston Matrix

Analyzes market share and growth of items in a product portfolio.

Categories in the Boston Matrix

Stars, cash cows, question marks, dogs.

B2B Marketing

Business-to-business marketing.

B2C Marketing

Business-to-consumer marketing.

Outsourcing

Shifting production to a lower-cost supplier.

Multi-skilling

Teaching employees to do more than one task.

Redundancy

When an employee must leave due to their skill no longer being used.

Collective Bargaining

Employee representatives speaking on behalf of a group to management.

Tall Organizational Structure

Many levels of responsibility and small spans of control.

Delayering

Flattening an organizational structure by removing layers of management.