Unit 4 (Marketing)

market vs product oriented approach to marketing

* market
* making products they can sell
* product
* selling products they can make

commercial vs social marketing approach

* commercial
* meet needs and wants in profitable way
* social
* achieve benefits of social change

market concentration

degree of competition that exists within a market

market segment

distinct group of people with similar tastes and requirements

niche marketing

targets specific and well-defined market

mass marketing

undifferentiated marketing

pros of niche marketing (2)

* better marketing focus
* less competition

cons of niche marketing (2)

* smaller than mass market
* fewer opportunities to exploit economies of scale

pros of mass marketing (2)

* huge potential of economies of scale
* bigger customer base

cons of mass marketing (2)

* high entry barrier
* competition is fierce

product perception map

a graph that analyzes consumer perception of each of a group of competing products in respect of two product characteristics

unique selling point

**A factor that differentiates a product from its competitors such as the lowest cost, the highest quality or the first-ever product of its kind.**

pros of differentiation (3)

* price advantages (low/lowest price)
* brand loyalty
* better placement of product in retail (convinience)
* New product features
* Ethical stance

cons of differentiation (2)

* expensive
* additional marketing costs

market research

Process of collecting, recording, and analyzing data about customers, competitors and market.

continuous

* regular basis

ad hoc

* as and when necessary

primary market research (4)

The collection of first-hand data that are directly related to a firm's needs

* focus group
* discussion groups to gain insight
* survey
* interviews
* observation

secondary market research (4)

* market analysis
* academic journal
* government publications
* media articles

sampling methods (6)

* quota
* certain number of people from different market segments are selected
* random
* equal chance for population
* stratified
* subdividing market into segments that share characteristics
* cluster
* sampling within couple locations
* snowballing
* friends and family spread word to increase sampling size
* convenience
* easy to reach

Product Life Cycle

The pattern of sales recorded by a product from launch to withdraw


1. R&D: designing prototypes and test marketing
2. launch: careful marketing planning and often unprofitable. innovators will buy during this stage
3. growth: sale revenue starts to increase and brand awareness and early adopters occur
4. maturity: sales rise at slower rate
5. decline: cash flow is less favourable

extending PLC (3)

* price reduction
* redesigning
* product differentiation
* New markets
* Rebrand

BCG

marketing planning tool for balanced product portfolio

* stars: high share, high market growth
* cash cows: high share, low market growth
* question marks: low share, high growth
* dogs: low share, low growth

cost-plus pricing

adding percentage to cost per unit of output to determine selling price

penetration pricing

setting low price to establish product in industry

price skimming

high price set to recoup R&D costs

psychological pricing

Setting prices that take account of customers perception of value of the product

loss leader

selling product below cost value in hopes of attracting customers

price discrimination

same product is sold at different price to different customer

price leadership

Exists when a business (the Market leader) sets a price for its products and other firms in the market set similar ones

predatory pricing

Undercutting precis to force competitors out of the market

ATL promotion

paid-for promotion through mass media such as TV and cinema

BTL promotion

non-mass media promotion such as branding and slogans

guerrilla marketing

untraditional methods on promotion on low budget

channel of distribution

means used to get a product to consumer

distributors

specialist business that trade in the product of few manufacturers

opportunities of entry to international markets

* spread risks
* increased customer base
* expand PLC

threats of entry to international markets

* legal issues
* political issues
* pressure groups

B2B

e-commerce catered to needs of other businesses

B2C

e-commerce caters for end-user

C2C

enables customers to trade with one another

benefits of e-commerce

* flexibility
* choice and convenience
* lower overhead fees

cons of e-commerce

* set-up costs of website
* fraudulent trde
* unsuitable for some businesses