Marketing

What is the strategic role of marketing?

The strategic role of marketing is to develop and implement strategies that achieve long-term business success by satisfying customer needs.

What are the main aims of the marketing function?

To increase sales and build customer loyalty, in order to achieve the business's overarching goal of profit maximisation.

What are marketing approaches?

Marketing approaches are the different ways that businesses have looked at marketing as a path to achieving their goals.

What is the Production approach?

The Production approach emerged during the 1820s-1920s and focused on producing enough goods and services to meet customer demand, with marketing playing only a minor role.

What did businesses prioritise under the Production approach?

Efficient production, believing products would sell if they were readily available.

When did the Selling approach emerge?

After WWI, as improved production led to supply exceeding demand.

What did the Selling approach focus on?

Businesses became sales-oriented, using advertising and high-pressure selling techniques to increase sales and compete with rivals.

When did the Marketing approach emerge?

In response to the economic boom after WWII.

What did the Marketing approach focus on?

Creating products that customers actually desired and ensuring all business functions focused primarily on customer satisfaction and building customer loyalty.

What are the five types of markets?

Mass, Intermediate, Niche, Consumer, Industrial and Resource

What is a Mass market?

A market involving standardised products that have a large demand among a broad range of customers.

Why do mass markets require strong promotion?

Because they are highly competitive, so a large volume of sales requires convincing promotional campaigns.

What is an Intermediate market?

A market involving businesses that buy finished products from producers and sell them to consumers, such as retailers.

What is the role of intermediaries?

They allow producers to focus on manufacturing products while intermediaries market the product.

What is a Niche market?

A lower-volume, specialised market designed to meet the unique needs and preferences of specific customer groups.

Why can niche businesses charge higher prices?

They have a smaller customer base and need higher prices to remain profitable while closely matching specific customer needs and wants.

What is a Consumer market?

A market involving people who buy products to use or consume.

What type of audience can businesses target in a Consumer market?

A mass or niche audience.

What is an Industrial market?

A market involving businesses that purchase materials to produce their own products or for use in their daily operations.

What does secondary industry involve?

Turning materials into products.

What does tertiary industry involve?

Performing services for others.

What is a Resource market?

A market involving the supply and purchase of raw materials from the primary industry.

What are the four psychological factors influencing customer choice?

Perception, motives, attitudes, and personality/self-image.

What are psychological factors?

Personal characteristics of an individual that influence their buying behaviour.

What is perception?

The way individuals filter, organise and interpret information about products and businesses.

What are motives?

The reasons that influence customers to choose one product over another.

What are attitudes?

An individual's feelings and opinions towards a business, brand or product.

What is personality and self-image?

A person's characteristics and how they view themselves or want others to perceive them.

How can marketers use personality and self-image?

By creating products that allow customers to express their identity through their purchases.

How do economic conditions influence customer choice?

They affect input costs, sales volume and profitability, as well as consumers' willingness and ability to purchase goods and services.

How does an economic boom affect businesses and consumers?

Low unemployment and rising incomes allow businesses to increase production and promotion, while consumers feel financially secure and are more willing to spend.

How does an economic recession affect businesses and consumers?

High unemployment and falling incomes reduce business confidence and decrease consumer spending levels.

How do governments influence customer spending habits?

Through economic policies and legislation designed to control spending and stabilise the economy.

How can increasing tax rates affect consumer spending?

Increasing tax rates can reduce consumer spending during periods of excessive economic activity.

What can happen if a business fails to comply with regulations?

It can face financial penalties and reputational damage.

What does the Competition and Consumer Act 2010 require regarding marketing?

It requires businesses to use honest and truthful marketing to protect consumers.

How do alcohol age restrictions influence purchasing behaviour?

Customers must be 18 years or older to purchase alcohol.

What are sociocultural factors?

Influences from society and social groups that affect an individual's purchasing decisions.

What factors are included in sociocultural influences?

Culture, social class, age, gender and family influences.

How do sociocultural factors affect customers?

They shape customer preferences, values and buying behaviour.

How could a luxury business use social class in marketing?

It may target higher social classes by promoting status and high quality to appeal to customers who value social recognition.

What are ethical influences in marketing?

Business behaviours that exceed legal requirements by considering what is morally acceptable and socially responsible.

What is Truth and Accuracy in ethical marketing?

Ensuring businesses create advertisements that are honest and do not mislead consumers.

What must marketing managers do to ensure truth and accuracy?

Ensure promotional messages are clear, accurate and only make claims that can be supported.

What is Good Taste in advertising?

Creating advertisements that are socially acceptable and respectful of community values.

Why should marketers consider different beliefs and values?

Views on what is appropriate can vary, so advertisements should be sensitive to different beliefs and values.

What code can marketers follow for Good Taste in advertising?

The AANA Code of Ethics.

What is Engaging in Fair Competition?

An ethical standard involving honesty and not damaging rivals through misrepresentation.

How does the Competition and Consumer Act 2010 support fair competition?

It contains provisions that deter anti-competitive behaviours such as predatory pricing and cartel conduct.

What are products that may damage health?

Products such as gambling, alcohol and junk food that may negatively affect health.

What should businesses consider when marketing potentially harmful products?

Government regulations and societal outlooks related to advertising potentially harmful products.

How has childhood obesity influenced advertising regulation?

Growing childhood obesity has led the government to implement regulations banning advertisements for fast food during children's television programs.

What is SUGGING?

Selling Under the Guise of research; an unethical sales technique where businesses disguise market research as sales activities to collect customer information or generate leads.

Why is SUGGING unethical?

It deliberately misleads consumers by falsely representing the purpose of the interaction.

What is the purpose of consumer laws?

To protect consumers and ensure businesses operate fairly.

What is deceptive and misleading advertising?

Advertising that creates false or inaccurate impressions about a product, causing consumers to make uninformed decisions.

What law prohibits deceptive and misleading advertising?

The Competition and Consumer Act (CCA) 2010.

Does a business need to intend to mislead for deceptive advertising to be prohibited?

No. It is prohibited regardless of whether the business intended to mislead customers.

What is bait advertising?

Advertising products at low prices to attract customers but attempting to persuade them to purchase more expensive alternatives when they arrive.

What is price discrimination?

When a business charges different prices for the same product in different markets, providing unequal treatment to customers.

When is price discrimination illegal?

When it reduces competition or has no valid justification.

When may price discrimination be permitted?

When differences are due to factors such as higher transport or production costs in different markets, or when acting in good faith to match a competitor's price.

What law governs price discrimination?

The Australian Consumer Law (ACL) 2011.

What are implied conditions?

Terms of a contract that are automatically assumed to exist, even if they are not explicitly stated.

What replaced implied conditions?

The Australian Consumer Law (ACL) 2011 replaced implied conditions with consumer guarantees.

What are consumer guarantees?

A set of automatic rights that apply to all products and are illegal for a business to ignore.

What is the most important consumer guarantee?

Acceptable quality.

What does acceptable quality mean?

Products must be fit for purpose, safe, durable and free from defects.

What are warranties?

Promises made by a business to repair or replace defective goods or services.

What does the CCA 2010 say about warranties?

Making false or misleading statements about the existence, exclusion or conditions of a warranty is illegal.

What remedy must businesses provide for defective products or services?

A remedy such as a refund, repair or replacement where products are defective or services are not provided with due care and skill.

How can warranties be used as a marketing tool?

Businesses can offer longer or more comprehensive warranties to gain a competitive advantage.

What is situational analysis?

A process that allows a business to better understand its current position and where it aims to be.

What does SWOT analysis identify?

Positive and negative factors of a business to assess its position compared to competitors.

Why is SWOT analysis useful?

It helps marketers develop strategies to improve performance and work towards business objectives.

What does the S in SWOT stand for?

Strengths.

What does the W in SWOT stand for?

Weaknesses.

What does the O in SWOT stand for?

Opportunities.

What does the T in SWOT stand for?

Threats.

What is an internal assessment in SWOT?

An assessment of strengths and weaknesses within a business's internal environment, which can be directly controlled by management.

What are strengths?

Positive organisational attributes that help achieve objectives, such as effective communication.

What are weaknesses?

Internal limitations that hinder the achievement of objectives, such as inaccurate record keeping.

What is an external assessment in SWOT?

An assessment of opportunities and threats within the external environment, which businesses cannot directly control but can respond to.

What are opportunities?

External factors that can assist in achieving objectives, such as a growing customer base.

What are threats?

External factors that may negatively impact objectives, such as a competitor opening a shop nearby.

What is the Product Life Cycle?

The typical stages a product progresses through during its life.

What are the four stages of the Product Life Cycle?

Introduction, Growth, Maturity and Decline.

What is the Introduction stage?

When the product first hits the market and familiarising customers is the main goal.

What is the Growth stage?

When the product experiences increased popularity and a rapid increase in sales and profits.

What is the Maturity stage?

When total market potential is reached and demand, sales and profits peak before beginning to plateau.

What is the Decline stage?

When interest in the product decreases and business efforts focus on recovering any possible sales.

What is market research?

The process of gathering, recording and analysing data to solve a specific marketing problem.

What is the purpose of market research?

To estimate market demand, understand customer expectations and identify opportunities before competitors.

What are the three steps of market research?

1. Determining information needs; 2. Gathering primary and secondary data; 3. Data analysis and interpretation.

What is the first step of market research?

Determining information needs relevant to the business to develop strategies that meet customer needs and achieve marketing objectives.

What is primary data?

Original research collected by the business, such as surveys.

What is secondary data?

Existing information collected by others.

What is an example of internal secondary data?

Sales reports.

What is an example of external secondary data?

Australian Bureau of Statistics (ABS) reports.