BM (Unit 4: Marketing)

Objectives of marketing department

Selling right products, sell at correct price, distribute correct channels (place), adequate promotion

Marketing

Management process of predicting, identifying and meeting needs and wants of consumers, in profitable ways

Market oriented

Focus on identifying and meeting customer’s needs and wants. Requires extensive market research and knowledge. Outward-looking.

Product oriented

Focus on marking innovative product. Requires extensive investment into research and development. Producing high quality products to sell higher price. Inward-looking.

Market share

An organisation’s portion of the total value of sales revenue within a specific industry. It acts as a key indicator of a company's competitiveness and relative size.

Market growth

An increase in size of a market. Helps firms identify opportunities (expansion) or threats (decline/saturation). High growth attracts new competitors, while low growth might trigger mergers.

Market concentration

Degree of competitiveness exists in a market by calculating the market share of the largest few firms (market leader) in the industry.

Marketing planning process

Systematic process of devising marketing objectives and appropriate marketing strategies (4P’s) to achieve these goals

Marketing Plan

A document outlining a firm’s marketing objectives and marketing strategies used to achieve the objectives

Marketing segmentation

Process of categorising consumer into distinct groups with similar characteristics, wants and needs

Target market

Specific group of people of shared characteristics that a firm wants to sell its product and services to, usually identified through market segmentation

Niche market

A small, specialised segment of a larger market that focuses on specific customer needs, preferences, or interests. Firms tailor their products or services to meet these unique demands to build customer loyalty. Limited competition.

Mass market

Targets a large, broad audience with standardised products or services designed to appeal to as many people as possible. Focuses on high sales volume and widespread distribution. Aim to achieve economies of scale. Intense competition

Positioning

A marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of customer

Unique selling point

Any aspect of a business, brand or product that enables differentiation from competitors in the mids of consumer

Differentiation

Distinguishing a product or business from competitors to make it more attractive, thereby creating a competitive advantage

Sales forecasting

Predict a firm’s level of sales over a given time period. To understand the latest and expected market trends in the industry.

Market research

Marketing activities designed to discover the opinions, beliefs and preferences of potential and existing customers.

Primary market research

Firsthand collection of new, original data directly from customers, competitors, or the market to solve specific purpose, rather than using existing data.

Focus groups

Small discussion groups sharing similar characteristics to gain insight into attitudes and behaviour of respondents. Provide in-depth, qualitative insights into consumer perceptions and emotions.

Secondary market research

Collection of second-hand data and information that already exists and previously gathered for other purpose

Sampling

Primary research that selects small group or proportion of the entire population from a particular market

Quota sampling

Certain number of people (Quota) from different market segment is selected. Sample is grouped according to shared characteristics

Random sampling

Giving everyone in the population an equal chance of being selected for the sample. Useful when population have same or similar characteristics

Convenience sampling

Uses subjects easy (convenient) to reach or availability. Least representative

Consumer products

Any physical or non-physical items (goods or service) purchase by private individuals for own personal use

Producer products

Any physical or non-physical items (goods or service) purchase by businesses for commercial use

Branding

Use of exclusive name, symbol or design to identify a specific product or organisation to differentiate from competitors, create corporate image, provide legal identity.

Brand awareness

Potential customers or general public recognise and remember a particular brans, measured by percentage. Lead to an increase in sales

Brand development

Communicate the value of the brand to customer, to differentiate against rivals

Brand loyalty

Loyalty that customers attach to a particular brand, become committed to a firm’s brand where customer buy the same brand time and time again, choosing one brand over another.

Brand value

What a brand is worth to business and its shareholders influenced by its earning potential, market share and corporate reputation

Cost-plus (mark-up)

Adding a percentage or predetermined amount of profit to the cost per unit of output to determine the selling price

Penetration pricing

Setting a relatively low price to gain brand recognition and market share, lower prices than its competitors to entice customers away from competitors. Raise prices once market share is secured and loyal customers are established

Loss leader

Selling below cost to encourage customer to purchase other higher profit margin products. Effective to get rid of old stock.

Predatory pricing

Deliberately setting low price to force rivals out of the industry. Mary lead to price war and unsustainable in long run.

Premium pricing

Significantly higher price than similar competing products, higher quality or unique enough. Customer see them as symbol of success, wealth, status or prestige.

Dynamic pricing

Varying price on changing market demand. Flexible and based on real-time data.

Competitive pricing

Set price based on what the competitors are charging. Suitable in highly competitive markets where products are homogeneous

Contribution pricing

Price higher than per unit variable costs of production to ensure positive contribution made towards fixed costs.

Channels of distribution

The means used to get a product to the consumer from the producer

Intermediary

Agent or businesses as a middle person in channel of distribution between manufacturer and consumers

Intermediation

Process of using intermediaries

Telemarketing

Use of telephone systems (audio and text) to sell product directly to potential customers

E-commerce

Buying and selling of goods and services through internet. Allows businesses to reach global markets, reduce operating costs, and operate 24/7.

Independent retailers

Small local vendors often owned by a sole proprietor.

Multiple retailers (chain stores)

Retailers with multiple outlets who has brand loyalty and recognition

Department stores

Retail outlets that sell a large range of products

Supermarkets

Mainly sell food and operate large scale

Hypermarkets (superstores)

Huge outlets that stock a broad range of products, foods and consumer durables, located where it is cheaper with large space available.

Distributors

Independent and specialist businesses that trade the products of only a few manufacturers

Agents

Negotiators who act on behalf of both buyers and sellers of a producer. Are experts and charge a commission

Wholesalers

Business that purchases large quantities of products from a manufacturer then break the bulk into smaller unit for resale, mainly to retailers

Above the line marketing

Promotional method through mass media to reach a wide audience. High cost and untargeted audience. Mass media sources have responsibility for and control of process

Below the line promotion

Use of non-mass media promotional activities, targeted at specific audience. Create incentives. Cheaper than ATL. Business has direct control on method

Sales promotion

Short term incentives designed to stimulate demand for a product, incentivise immediate purchase, boost sales, or attract new customers.Lower profit margin.

Loyalty programmes

Customer loyalty schemes reward those who make repeat purchases. Enable firms to gain access to customer data, use for direct marketing purpose. Can be expensive to operate

Point of sales

Marketing of goods in stores, being placed conveniently. Generate impulse purchases

Merchandising

Sale of branded products linked to business. Generate further brand awareness. Additional revenue stream

Word-of-mouth

Spread of information from one people to other. No direct cost. No control

Publicity

Obtaining media coverage without directly paying for it. Attract media attention.

Public relations

Planned business activities aimed at establishing and protecting the desired image of a firm to maintain mutual understanding and positive relationships between firm and its stakeholders. Firms invite media to report events in positive way.

Personal selling

Relying on sales representatives directly persuading customers to buy. May be tailored to individuals needs.

Direct marketing

Sell straight to customer rather than using an intermediary. Firms able to control content delivered. Costly

Trade shows

Enable exhibitors conduct live demonstrations to showcase and promote products. Exhibitions attract large audience of targeted customer.

Sponsorship

Provide financial funds and resources to support an event or another organisation in return for publicity and prime advertising space

Through the line promotion

Combination of ATL and BTL to allow customers to engage with a product or brand in multiple ways

Social media marketing

Gaining internet traffic through social media platforms. Create marketing content that attracts attention and encourage people to share content.