Marketing

Marketing

Identifying customer needs and wants and satisfying them profitably

Customer

A person, business or other organisation which buys goods and services from a business

Customer loyalty

When existing customers continually buy products from the same business

Customer relationships

Communicating with customers to encourage them to become loyal to the business and its products

Market share

The percentage of total market sales held by one brand or business

Mass market

Where there is a very large number of sales of a product

Niche market

A small , usually specialized segment of a much larger market

Market segment

An identifiable sub-group of a whole market in which consumers have similar characteristic or preferences

Market segmentation

When the business knows that different market segment of a market exists and it develops the market different to each segment

Role of marketing

-Identify

-Satisfy

-Maintain

-Build

-Anticipate

Marketing Director/Manager

Leads the whole marketing department and creates the marketing strategy

Market research manager

Finds out what customers want and investigate competitors

Advertising Manager

Plans adverts and decides how to promote the product

Sales/Promotion manager

Organises sales promotions and help increase sales

Market researchers

Collect and analyse advertising campaigns

Advertising team

Creates and manages advertising campaigns

Sales team

Sells products and communicates with customers

What are the four roles of marketing?

1) Identify customer needs

2) Satisfy customer needs

3) Maintain customer loyalty

4) Build customer relationships

Why does a business need to identify customer needs?

So the product matches what customers actually want

Higher sales, fewer unsold goods, less money wasted on the wrong product

Give 3 ways a business can maintain customer loyalty

Loyalty cards / reward points

Consistent quality and good after-sales service

Strong brand image with regular contact (social media, email)

Why is customer loyalty valuable?

Repeat purchases = steady revenue

Cheaper to keep a customer than win a new one

Loyal customers recommend the business and are less sensitive to price rises

Give 3 ways a business builds customer relationships.

Personalised service and customer databases

Fast response to complaints; social media engagement

After-sales support and warranties

Give 2 consequences of failing to satisfy customer needs

Falling sales and market share

Unsold stock

Damaged reputation

Customers switch to competitors

Give 4 reasons why consumer spending patterns change

Changes in income

Changes in taste or fashion

New technology

Ageing or changing population

Social trends (health, environment)

Recession or inflation

Why must a business respond to changing customer needs?

Products become outdated

Competitors take market share

Sales and profits fall

The business may fail

Give 4 reasons why markets have become more competitive

Globalisation – businesses can sell products in more countries.

Technology – businesses can easily reach customers online.

More businesses entering markets – increases competition.

E-commerce – customers can easily compare products and prices.

Give 4 ways a business can respond to increased competition

Improve quality or develop a USP

Competitive pricing

More or better promotion

Better customer service

Innovate

Cut costs

Move into a niche

Give 3 ways a business can respond to changing spending patterns

Do market research

Change or extend the product range

Adjust prices

Switch promotion to new channels

Target a different segment

A business segments by income — how would its marketing differ?

High income: premium quality, high price, exclusive outlets, luxury ads.

Low income: basic product, low price, discount stores, price-led promotion

Give 3 ways technology has changed markets

Online selling reaches a global market

Social media promotion is cheap and targeted

Customer data allows personalised marketing

What is the key difference between niche and mass marketing?

Niche market: Targets a small, specific group of customers.

Mass market: Targets a large number of customers across the whole market.

Give 3 benefits of niche marketing

Little or no competition

Can charge a higher price

Lower promotion costs because targeting is focused

Small firms can survive with limited resources

Give 3 limitations of niche marketing

Small market =

Limited sales and profit

High risk if tastes change

No economies of scale

Big firms may enter if it becomes profitable

Give 3 benefits of mass marketing

High sales volume and revenue

Economies of scale so lower unit costs

Risk spread across many customers

Strong brand recognition

Give 3 limitations of mass marketing

Very high competition

High cost of capacity and national promotion

Standard product does not meet specific needs

Slow and expensive to change

Give an example of a niche product and a mass-market product

Niche: organic or gluten-free food, luxury sports cars, left-handed products.

Mass: Coca-Cola, bottled water, basic smartphones

Which approach suits a new small business, and why?

Niche: Limited finance and capacity, cannot compete with large firms on price or scale

specialising allows a premium price and avoids direct competition

Give 5 ways a market can be segmented

Age

Gender

Income or socio-economic group

Location or region

Lifestyle

Interests

Why do businesses segment their market?

To target the right customers with the right mix

Less money wasted on the wrong audience

Higher sales and loyalty

Helps spot gaps in the market

Give 3 benefits of market segmentation

Marketing is targeted so more effective and less wasteful

Products match needs so customers stay loyal

Identifies new opportunities

Can charge a higher price

Give 3 limitations of market segmentation

Research costs time and money

The segment may be too small to be profitable

Other customers get ignored

Separate products and adverts raise costs

How does segmentation change the marketing mix?

Product design

Price level,

Promotion media

Place of sale are all adapted to the segment (teens: low price, social media, online shop)