Unit 4 - Marketing

Marketing

Marketing

The management process of getting the right product to the right customer at the right prices to the right place at the right time.

Marketing of Goods

Entails:

• Product

• Price

• Place

• Promotion

Marketing of Services

Entails:

• Product

• Price

• Place

• Promotion

• Process

• People

• Physical Evidence

Market-Oriented Production

A business approach of first establishing consumer demand through market research before producing and selling a product.

Product-Oriented Production

A business approach that focuses on making the product first, before attempting to sell it.

Commercial Marketing

Another way to define a market-oriented approach → outward focused on carrying out market research before making products to sell.

Social Marketing

A marketing approach aimed at influencing a positive change in individual behaviour and improvements to societal well-being.

Social Media Marketing

The use of the internet through social media networking websites to market a business’s product or service.

Market Size by Volume

Measures the number of goods bought by customers. It is a quantitative measure of the units sold by businesses.

Eg. Bags of flour.

Market Size by Value

Measures the amount spent by customers on the total number of goods sold by businesses. It is the total revenue expressed in. monetary terms.

Market Growth

The percentage change in the total market size over a period of time, usually a year.

Formula: % market share = firm’s sales/total sales in the market x 100

Market Share

The percentage of the total revenue or sales in a market that a company's business makes up.

Eg. If there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those units would have a 10 percent share in that market.

Market Leader

A firm with the largest market share in a given market.

What are some benefits of being a market leader?

• More advantages in new markets

• Increased sales revenue = higher profits

• Ability to gain economies of scale

• Could also be the brand leader

• Favour over other firms in terms of innovative technologies and partnerships, etc.

Innovation

The creation, development, implementation, and commercialization of new products, managerial and manufacturing processes, and services with the objectives of improving efficiency, effectiveness, profitability, and competitive advantage.

Market Objectives

SMART goals set by the marketing department to support the overall objectives of the business.

What does SMART stand for?

• Specific

• Measurable

• Achievable

• Relevant or Realistic

• Time-sensitive

Key Strategic Plans

Steps that provide an overview of how the objectives will be achieved.

Eg. Plans on how to sell new products in existing markets.

Detailed Marketing Actions

Specific details on marketing activities that are going to be carried out.

Eg. Which pricing strategies will be used and how the products will be distributed?

Marketing Budget

Finance required to fund the overall marketing strategy.

Product

Any good or service that is offered to the market with the aim of satisfying consumer needs or wants.

Price

What consumers pay to acquire a product.

Promotion

Ways of convincing consumers why they need a product and why they should buy it.

Place

This concerns where the product will be sold and how it will be delivered to the market.

Physical Evidence

The tangible or visible touch points that are observable to customers in a business.

People

The human capital in terms of skills, attitudes and abilities necessary in the production of goods or the provision of services.

Process

The procedures and policies pertaining to how an organization’s product is provided and delivered.

Product Life Cycle

The course a product passes through from its development to its decline in the market → broken down into 6 stages:

• Research and Development

• Introduction

• Growth

• Maturity

• Saturation

• Decline

Extension Strategies

Plans by firms to stop sales from falling by lengthening the product’s life cycle.

Brand

A name, symbol, sign or design that differentiates a company’s product from another.

Targeting

The process of marketing to a specific market segment.

Target Market

A group of consumers with common needs or wants that a business decides to serve or sell to.

Market Segmentation

The process of dividing the market into distinct groups of consumers to meet their desired needs and wants.

Market Segment

A sub-group of consumers with similar characteristics in a given market.

Niche Market

A narrow, smaller, or more specific market segment.

Mass Market

A large or broad market that ignores specific market segments.

Consumer Profile

The characteristics of consumers of a particular product in different markets based on their gender, age, and income levels, among other characteristics.

USP

Unique selling proposition → a product’s feature that differentiates it from other competing products in the market.

Market Research

The process of collecting, analyzing, and reporting data related to a particular market.

Eg. Data on consumption of goods and services and on competitors’ behaviour.

Primary Research

Firsthand information from the market used to determine specific buying patterns consumers and to anticipate any changes in the spending behaviour over a given time.

Eg. Surveys, interviews, etc.

Secondary Research

The analysis of data that already exists in some form → it gives overall background information.

Eg. Academic journals, articles, etc.

Branding

The process of distinguishing one business product from another can create value for a product. this has a strong influence on how consumers see a product.

Brand Awareness

The ability of consumers to recognize the existence and availability of a business’ good or service.

Brand Loyalty

When consumers become committed to a business’ brand and are willing to make repeat purchases over time.

Brand Value

How much a brand is worth in terms of its reputation, potential income and market value.

Cost-Plus Pricing

Adding a specific amount (usually a percentage) to the average cost (cost per unit / total number produced) to produce the product.

Penetration Pricing

Setting a low price to attract consumers quickly and gain high market share.

Psychological Pricing

When a company considers how a price affects the consumer’s perception of the product.

Eg. High price for high value or $9.99 instead of $10.

Price Discrimination

Charging differing consumers different prices for the exact same product

Competitive Pricing

Prices are set relative to competitors’ pricing.

Above the Line Promotion

A paid form of communication that uses independent mass media to promote a firm’s products.

Below the Line Promotion

A form of communication that gives a business direct control over its promotional activities so that it is not reliant on the use of independent media.

Through the Line Promotion

A form of promotion that uses an integrated approach of combining both above-the-line and below-the-line promotion strategies.

Promotion Mix

The way in which the components of an individual promotional campaign are blended as part of an overall promotional strategy. It includes various elements such as direct promotion, sales promotion, public relations, sponsorship, personal selling, and advertising.

Viral Marketing

A promotional strategy that aims to spread information about a product or service from person to person by word of mouth or through social sharing. It seeks to inspire individuals to share a marketing message with others, creating exponential growth in its recipients.

Guerilla Marketing

An advertising strategy that uses unconventional and often surprising tactics to promote a product or service. It is designed to evoke surprise, wonder, or shock and is typically carried out in public spaces to attract the attention of a target audience.

0 Level Channel

Involves the direct sale of a product from a manufacturer to the consumer with no intermediaries.

1 Level Channel

Involves one intermediary between the producer and the consumer. An example is a producer selling to a retailer who then sells to the consumer.

2 Level Channel

Involves two intermediaries between the producer and the consumer. For instance, a producer sells to a wholesaler, who then sells to a retailer, and finally to the consumer.

3 Level Channel

Includes three intermediaries between the producer and the consumer. An example is a producer selling to an agent, who then sells to a wholesaler, followed by a retailer, and finally to the consumer.

E-Commerce

The buying and selling of goods and services over the internet. It encompasses a variety of online business activities, including online retailing, electronic payments, online auctions, and internet marketing.

B2B

Transactions that occur between two businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. These transactions involve the sale of products or services from one business to another.

B2C

Transactions in which businesses sell products or services directly to consumers. This is the type of transaction that most people are familiar with, such as when a consumer purchases a product from a retail store or an online retailer.

C2C

Transactions that occur when consumers sell products or services directly to other consumers. This often takes place through online platforms or marketplaces where individuals can buy and sell items to each other.