Marketing Bx

Business flashcards

Strategic Role of Marketing

The process of creating a product then developing and implementing strategies that aim to promote, price and distribute the product to potential customers.

ID Operations

Marketing will conduct market research to determine the needs of the market and then design a suitable product, operations will manufacture a product that will incorporate product features that consumers will respond positively to, marketing will then develop strategies to market this product.

ID HR

Marketing will conduct market research to determine the skills required for employees to produce the desired product, HR will hire staff and ensure they are motivated and skilled to develop these products, also, HR must manage the public faces of the business to make sure they act ethically which influences a consumer’s decision to buy their product.

ID Finance

Marketing aims to positively market their products so the business will make sales and thus profits, which will assist finance in managing financial resources, finance will create budgets and forecasts that marketing must work within for promotional campaigns and sale

Production Approach

The production approach focuses on mass-producing affordable goods that they believe they can sell on the market.

• There is minimal customer involvement, relies on consumers wanting to buy the product, “if we make it, they will buy it”, design is based on demand.

Selling Approach

 The selling approach relies on aggressive promotion to push existing products.

• This is because because of increased competition, businesses increase their spending on advertising, high quality and mass produced products are a focus, marketing is relatively one way.

Marketing Approach

Marketing approach involves placing the customer at the centre of all marketing activities through increased customer involvement, conducting market research then satisfying the needs, high priority on customer retention and continual satisfaction.

Types of Markets (N RIICM)

• Resource Market: Members work in the primary sector (fishing, mining, etc.). This market mainly buys tools and sells primary resources and raw materials.

• Industrial Market: A business buys resources and converts them into other products. E.g Bakery turns flour + sugar + yeast -> bread.

• Intermediate Market: Wholesalers and retailers (e.g., Costco) who buy finished goods and then resell them. They act as a link between manufacturers and consumers.

• Consumer Market: Consumers who buy products to use them as they are. If someone buys products to resell for profit, it becomes an intermediate market not a consumer.

• Niche Market: A small, focused market targeting a specific group of people. E.g YSL/ Rolex targeting wealthy consumers.

• Mass Market: Includes all consumers. It is popular because it reduces production costs, E.g essential products such as electricity, water and toilet paper.

Pscyhological factors

The buyer’s perception, motive, attitudes, personality, self image, learning.

Economic factors

A business’s capacity to compete, and a customer’s willingness and ability to spend.

• Economic boom: high employment and rising income levels, consumers experience increased confidence and a greater ability to spend,

• Ecoomic recession:  rising unemployment and falling consumer confidence, individuals experience a significantly reduced ability and willingness to spend.

Government influences

Policies that directly or indirectly influence business activity and customer’s spending habits.

• This includes Laws and Regulations, Government Policies, Taxation and Subsidies.

Consumer Laws

Laws introduced to improve the protection and rights of consumers, and to clarify the rights and responsibilities of businesses.

Deceptive and misleading advertising (B&D)

 Ads that create a fake claim/ impression on product/service and is illegal.

• Bait advertising: advertising a few products at reduced prices to attract customers, and when these products run out, they are directed to higher priced items.

• Dishonest advertising: using deceptive words saying that a product has a quality that it does not.

Price discrimination

The practice of changing the price of the same product/service depending on the consumer without any cost-based justification.

Implied conditions

The unspoken and unwritten words of a contract eg. the product must be of acceptable quality, match the description, and care in delivering service

Warranties

A warranty is a promise made by a business that they will correct any defects in the goods they produce or services they deliver.

Truth, Accuracy and Good Taste in Advertising:

Strategies that exaggerate truth and accuracy.

Can be held morally responsible for misleading the public by using an untruth in an advertising.

Good taste is when provocative advertising can offend a large proportion of the wider community.

• businesses can use marketing strategies that create controversy, so publicity is created

Products that may damage health

Governments have sought to restrict the provision of goods and services that may act as a health detriment to the consumer, they do this through restricting their marketing practices  If a product may cause injury or illness, it must be recalled and the business must report it to the ACCC or if the products may cause long-term health issues, it is the business’s responsibility to be ethical about advertising them (don’t advertise junk food to children).

Engaging in fair competition

Businesses with large market share should not use price discrimination as a way to force smaller rivals out of the market.

• Price Fixing (2 businesses charging similiar prices to drive out smaller competiton)

• Long term loss leaders ( large competitors temporarily setting unrealistically low prices to drive out smaller competitors from market)

Sugging

 A sales technique whereby consumers are surveyed to extract information (market research). Considered unethical due to privacy and deception reasons.

Marketing Processes (SMEIDI)

• situational analysis – SWOT, product life cycle

• market research

• establishing market objectives

• identifying target markets

• developing marketing strategies

• implementation, monitoring and controlling – developing a financial forecast; comparing actual and planned results, revising the marketing strategy

Situational Analysis

Situational Analysis: Ensures that management has a precise understanding of the business current position and a clear picture of where it is heading.

SWOT

The identification and analysis of the internal strengths and weaknesses of the business and the opportunities and threats from the external environment. Allows a clear indication of business position compared with its competitors.

Product Life Cycle

Used to understand where a business’s product sits and what marketing steps are appropriate. Includes introduction, growth, maturity, post-maturity

Market Research

The process of systematically collecting, recording and analysing information concerning marketing problems.

• Provides information a business needs before making any decision. Establishes a clear understanding of the market environment and ensures all decisions are aligned with real market conditions rather than assumptions.

Importance of Establishing Market Objective

Marketing objective: Realistic measurable goals to be achieved through marketing plan.

• Provide the framework for the business to develop a series of marketing activities and operations with efficiency and effectiveness. This allows the business to track progress and evaluate the success of such marketing plans

Mass Market

 Refers to a large, unsegmented market of end-consumers with broad appeal. 

• seeking a large range of customers, developing a single marketing mix, one distribution channel to reach all customers

Segmentation Market

process of dividing a broad, diverse target market into smaller, more manageable subsets of consumers who share similar needs, characteristics, or behaviors.

• subdivided into groups (demographic, geographic, psychographic, behavioral)

Niche Market

A market niche is a narrowly defined, specialised segment of a larger market with distinct needs, preferences, or identities that are underserved by mainstream competitors.

Developing Marketing Strategies

The overall plan a business uses to achieve its marketing objective and reach its target market effectively.

Involves the 4P’s (Product, Place, Price, Promotion)

Implementation, Monitoring and Controlling

• Implementation: the process of organising the activities of the business to achieve goals

• Monitoring: checking and observing the actual progress of the marketing plan, the information collected during the monitoring stage will be used to control the plan.

• Controlling: the comparison of planned performance against actual performance and taking corrective action to make sure the objectives are attained.

Developing a financial forecast

refers to forecasting the costs and revenues for each strategy to determine the most appropriate course of action

Cost estimate and revenue estimate

Comparing actual and planned results: three key performance indicators used to measure the success of the marketing plan are sales analysis, market share analysis and marketing profitability analysis

Revising the marketing strategy

The business must adopt revised strategies when necessary to ensure its continued success, the extent to which the strategies are altered will depend on whether the business has achieved its objectives 

Market Segmentation

refers to when the total market is subdivided into groups of people who share one or more common characteristics. 

• The goal of market segmentation is to increase sales, market share and profits by better understanding and responding to the desires of the different target customers. 

• Demographic: refers to the group’s age, gender, income and family size

• Geographic: dividing the total market according to geographic locations. 

• Psychographic: groups based on lifestyle, personality, values and interest, why people behave the way they do .

• Behavioural: dividing the total market based on the customer’s relationship with product.

Product/Service Differentiation

The process of distinguishing products/service from competitors. Can be through quality of service, convenience, environmental concerns, value of money.

Positioning

Refers to how a brand/service is perceived in the mind of consumers.

• Brand names, such as Rolex, Ferrari, can immediately evoke an image of the product’s quality. 

Product G&S

States that all products are a combination of tangible and intangible attributes - a total product concept.

Branding

 A brand is a name, term, symbol, design or any combination that identifies a specific product and distinguishes it from its competition.

• It is a powerful marketing tool allowing it to help to identify specific products, evaluate product value, gain repeat sales, and encourage customer loyalty. 

Packaging

Involves the development of a container and the graphic design for a product.

• Preserves the product, protects the product, attracts consumers' attention.

• Communicating Product Value (Positioning), differentiation/ brand recognition.

Price

Refers to the amount of money a customer is prepared to pay in exchange for a product.

Cost based pricing

The business determines the total cost of production and then adds an amount for profit, the extra margin is called the mark-up.

Market based pricing

Set prices according to the level of supply and demand,  whatever the market is willing to pay.

Competition based pricing

Business can choose a price that is either below, equal to or above that of the competitor

Price Skimming

When a business charges the highest price possible for innovative products and lowered once sales start to slow or new competitors come into the market.

• used for new products to the market

Price penetration

When a business charges the lowest price possible to penetrate the market and encourage sales away from competitors. Temporary, long term strategy.

Loss leaders

Deliberately sell a product below its cost price to attract customers to their store.

• While the business makes a loss on this product, it hopes that customers will buy other products which will make profits.

Price Points

Selling products at predetermined prices.

• Makes it easier for the customer to find the type of product they want and to trade up to a more expensive model.

Price and quality interaction

If a business charges a low price for a product, customers may perceive the product as ‘cheap’, charge a high price and the product develops an aura of greater quality status.

Promotion (WARSPOP)

Methods used by business to inform, persuade and remind a target market about its products.

Elements of Promotion Mix (WARSPOP)

• Advertising: A paid, non-personal message communicated through a mass medium. Provides businesses with the flexibility to reach an extremely large audience or to focus on a small, distinct target market segment. 
  
  

• Personal selling: Involves the activities of a sales consultant directed to a customer to make a sale. Personalised/tailored service, build customer loyalty but costly/timely.
  
  

• Relationship Marketing: The development of long term, cost effective and strong relationships with individual customers. Builds customer loyalty, is cost-effective, and encourages repeat purchases however only targets existing customers only.
  
  

• Sales Promotion: when a business offers a direct incentive to sell more to customers, introduce a new product or get new customers. E.g. Limited time offers (discount code, coupons), gifts, Samples, contests and Giveaways (Maccas Monopoly). 

  
  

• Publicity: any free news story about a business or its products. The main aims are to enhance the image of the product and raise awareness, it can be good or bad.

• Public relations: Activities aimed at creating and maintaining favourable relations between a business and its customers.  This is done by supporting charities, sponsoring events and making speeches on special occasions.

The Commuincation Process

• Opinion leaders: effective message senders, people or organisations that have the ability to influence public opinion on a subject matter for which they are known. (endorsement)

• Word of mouth: person-to-person communication, can also be through technology, potential customers are 90% more likely to trust and buy a brand recommended by a friend rather than a paid media message.

Place/Distrubition

How the product is delivered to the customer.

• Businesses must decide where and how to sell the product. Effective distribution ensures the right products are in the right place at the right time.

Distribution channel

The route taken to get the product from the business to consumer. 

• Producer to customer (services such as car repair, tax accountant)

• Producer to retailer to customer (fruit, meat).

• Producer to wholesaler to retailer to consumer (most customer goods like electronics)

• Producer to agent to wholesaler to retailer to consumer (agents don’t own the product; they are another middleman for producers who have issues selling their stock).
  
  

• Non- store retailing: e commerce, m commerce, subscription service, automated retailing

Channel Choice

• Intensive: Your product is sold everywhere. Supermarkets, petrol stations, big stores, news agents (lollies, milk, newspapers).

• Selective: Your product is sold in a few different places, but customers still have to go to a specific store (electronics, home goods). 

• Exclusive: -Your product is sold in only one place to cover a large area. E.g. Expensive products such as luxury cars, handbags. Only 6 Louis Vuitton stores in Australia.

Physical Distribution

The movement of products to consumers. Ensures products are available all the time, improves customer satisfaction and efficiency.

• Transport: includes trucks, planes, ships, trains. Expands geographic reach, reliable but it is expensive, delays are more common due to weather, road conditions, etc. 
  
  

• Warehousing: stores stocks and protects stocks from theft and ensures accessibility. However, it is high cost, takes a lot of space, and risks overstocks (issue in long-term).
  
  

• Inventory: ensures products are available for sale when revenue is low. Can cause over/understocking, supply chain disruptions. Need to balance the cost of storage with keeping sufficient stock levels to meet consumer demand

People, Processes, and Physical Evidence

4Ps are more suited to tangible goods, while these are more suited to service sectors.

People:

Refers to the quality of interaction between the customer and those within the business who deliver the service. Creates a good impression for the business and better sales. 

• Focuses on customer service, eg, a barber
  
  

Processes:

Processes refer to the flow of activities that a business will follow in its delivery of a service. Must be highly efficient and smooth to achieve customer satisfaction. 

• eg, paying, cutting hair, booking flights

Physical Evidence:

Physical evidence is everything the customer sees when interacting with the business, i.e., the cleanliness of a restaurant, the decorations in a store. 

Also, the look and feel of a website. Allows an image of value and excellence to be created, eg, website reviews

E-Marketing

E-marketing is the strategy of marketing over the internet = creating new opportunities for businesses to target specific customer groups, collect data and build stronger relationships through personalised communication.

• Web Page: Conveys information in the form of a combination of text, graphics, animation and video.

• Podcast: The distribution of digital audio or video files over the internet

• SMS: Text messages sent directly on the phone to promote offers or updates

• Blogs: Online journal

• Web 2.0: Interactive online technologies, such as social media, blogs, and reviews

Global Marketing

Process of planning, creating and adapting marketing strategies to reach customers in multiple countries and cultures.

Global Branding

Worldwide use of a name, term, symbol or logo to identify sellers' products.

• Businesses use this because it provides a uniform worldwide image, can be cost-effective because one ad can be used in many locations, and global recognition

Standardisation

When a company uses a similar or identical marketing mix across all markets.

• E.g Product design, branding, packaging and promotional messages are consistent worldwide.

• Etc Coca-Cola maintains a uniform product formula, iconic red and white packaging, and global emotional messaging in all countries. 

Customisation (Adaptation/localisation)

Where business modifies its marketing mix to suit preferences, cultures and needs of each specific market.

• Includes changing product features, advertising messages, strategies to appeal to local consumers.

• E.g  McDonalds India replaced beef burgers with potato-based McAloo Tikki burgers to respect local religious dietary customs.

Global Pricing

How businesses coordinate their pricing policies across different countries.

• This is important when entering new markets to attract consumers and generate profit.

Types of Global Pricing (C,M,S,C)

• Customised pricing: occurs whenever consumers in different countries are charged different prices for the same product. A cost plus method is used to cover export and tariff/tax costs.
  
  

• Market-customised pricing: sets prices according to local market conditions. Global businesses will vary prices depending on demand and competition in the overseas market. Foreign exchange is an influence. 
  
  

• Standardised pricing: the practice of charging customers the same price. Foreign marketing costs must be kept low yet risks may be cheaper products and foreign exchange fluctuations. 
  
  

• Competitive Positioning: How a business will differentiate its product based on its country and compared to its competition. Businesses should strive to develop product leadership, positive customer relationships and operational excellence, must gain a deep understanding of their dynamic environment and form their strategies accordingly.