Unit 4: Marketing

Market

Market

A place where buyers and sellers come together or interact, which can be physical or virtual, and also refers to the type of product or geographical location.

Marketing

All processes involved in identifying and satisfying customer needs, including planning the marketing mix for a successful strategy.

Marketing Mix (7Ps)

The combination of Product, Price, Promotion, Place, People, Processes, and Physical Evidence in a marketing strategy.

Product

The good or service offered to customers, aiming to match customer needs and expectations for satisfaction.

Price

The amount of money charged for a product, with psychological effects on customers, determined by business objectives, costs, and competition.

Promotion

Publicizing a product or organization to increase sales, targeting the right message at the right customers.

Place

How a product is distributed to consumers, involving direct sales or intermediaries to meet consumer needs.

People

All employees in a service business who interact with customers, crucial for customer satisfaction.

Processes

How a service is delivered to customers, including ordering, payment, delivery systems, and feedback.

Physical Evidence

Tangible aspects of a service that customers experience, influencing their perception and satisfaction levels.

BCG Matrix

A strategic tool used to analyze a company's product portfolio based on market growth rate and market share.

Question Mark

A product with low market share in a high-growth market, requiring heavy investment to increase market share or face becoming a "dog."

Cash Cow

A product with high market share in a low-growth market, generating significant cash flow for the company.

Marketing Plan

A document outlining the marketing process of a business, including objectives, budgets, segmentation, market research, and strategies.

Market Research

Gathering information about consumers' needs and preferences to make informed marketing decisions.

Segmentation

Dividing consumers into groups with similar characteristics and needs to tailor marketing strategies.

Target Market

The specific consumer segment at which a business aims its marketing efforts.

Marketing Mix

The combination of product, price, place, and promotion strategies used to meet the needs of the target market.

Control Tools

Methods to evaluate the success of marketing strategies, involving quantitative and qualitative data analysis.

Demographic Segmentation

Dividing consumers based on characteristics like age, gender, and occupation to target specific groups effectively.

Psychographic segmentation

Divides the population based on lifestyle and personal interests to tailor marketing campaigns.

Targeting

Selecting the most suitable segment for a marketing campaign to maximize effectiveness.

Product positioning

Differentiating a brand within a market to meet the needs of the target market and establish customer loyalty.

Niche markets

Targets a small segment of the population with specialized needs, leading to potentially high profit margins.

Mass markets

Targets a large segment of the population with undifferentiated products, leading to lower per unit costs but more competition.

Unique Selling Point (USP)

The feature that distinguishes a product or brand from its competitors, adding value and attracting customers.

Product Differentiation

Highlighting the differences between a product or service and its rivals to stand out in the market.

Market Segmentation

Dividing the market into distinct groups of buyers who have different needs, characteristics, or behaviors.

Above the line promotion

Marketing activities that are non-targeted and reach a broader audience through media such as TV, radio, and print.

Below the line promotion

Targeted marketing activities that reach a specific audience through channels like direct mail, email, and social media.

Positioning (quadrants)

A strategic marketing concept that categorizes products or brands based on their perceived quality and price, typically divided into four quadrants:Low quality, high price (L), High quality, high price (H), Low quality, low price (R), High quality, low price (T).

Marketing Planning

The process of setting marketing objectives, strategies, budget, and mix to achieve business goals, including market research, SMART objectives, and competitor analysis.

Segmentation, Targeting, Positioning (STP)

A marketing strategy involving dividing the market into segments, selecting specific segments as target markets, and positioning products to meet the needs of those segments.

Niche Market

Targeting a small, specialized segment of the market with unique products or services, often allowing for differentiation, customer loyalty, and higher prices.

Mass Market

Targeting the entire market with standardized products, focusing on economies of scale, but risking lower customer loyalty and price competition.

Unique Selling Point (USP)

A distinctive feature or benefit that sets a product or brand apart from competitors, providing value, differentiation, and memorability.

Market Research

The process of gathering, analyzing, and interpreting information about a market, customers, and competitors to make informed business decisions and develop effective marketing strategies.

Primary Market Research

Gathering new information directly from the source through surveys, interviews, observations, or focus groups to answer specific research questions.

Secondary Market Research

Using existing information from sources like market analyses, academic journals, or government publications to gain insights into the market, economy, or trends.

4Ps

The traditional marketing mix elements - Product, Price, Place, Promotion - used to create a comprehensive marketing strategy for a product or service.

Currency

Refers to whether the information is up to date.

Authority

Considers the credibility and reputation of the data source.

Accuracy

Focuses on whether the information is correct and reliable.

Purpose

Questions the motive behind publishing the information.

Market analysis

In-depth research on a specific market.

Government publications

Data released by governments on various topics.

Qualitative research

Involves collecting non-numerical data like opinions.

Quantitative research

Involves collecting numerical data that can be counted.

Sampling methods

Techniques used to select a sample for research.

Population

The group that researchers focus on in their studies.

Bias

Refers to the skewing of results due to sampling methods.

Quota sampling

Involves dividing the population into subgroups for sampling.

Convenience sampling

Method where participants are chosen based on ease of access.

Mean

The average of a set of numbers.

Mode

The most frequently occurring value in a set.

Median

The middle value in an ordered list of numbers.

Standard deviation

Measures the dispersion of data around the mean.

Product life cycle

A model that helps businesses make decisions about a product’s marketing mix by showing a product’s typical trend in sales over time, with stages including research and development, introduction, growth, maturity, and decline.

Research and Development (R&D)

The stage before a product is released to the market involving activities like market research, product development, and preparation of production.

Introduction

The stage when the product is released to the market, focusing on making consumers aware of the product's unique selling point, pricing strategies, and distribution channels.

Growth

A period of accelerating product sales where businesses may need to find new target markets and adapt their marketing mix.

Maturity

A stage of high and steady sales revenue where marketing objectives focus on building customer loyalty and profitability.

Decline

A period of falling sales and/or loss of market share where businesses may use extension strategies to lengthen the product's life cycle.

Branding

The use of a name, symbol, or design to identify a product or company, with concepts including brand awareness, development, loyalty, and value.

Packaging

The visual and informational presentation of a product that plays a crucial role in attracting customers and communicating the product's qualities and USP.

Price

The setting of the right price for a product, with pricing methods like cost-plus pricing that adds costs and mark-up to determine the sales price.

Penetration Pricing

Pricing method used by businesses to attract customers to a new product or service by initially setting a low price to encourage purchases, with the intention of increasing prices once loyalty is established.

Loss Leader Pricing

Strategy where a product is priced below its production cost to attract customers who can then be sold more expensive products, typically implemented by large businesses.

Predatory Pricing

Strategy where a company sells a product at an extremely low price to force competitors out of the market, leading to a monopoly position and higher prices for consumers.

Premium Pricing

Strategy of keeping the price of a product high to create a perception of higher value among customers, often used for products with longer lifespans or higher quality.

Promotion

Utilizing advertising, sponsorships, sales promotions, and personal selling to inform and persuade customers to buy a product, enhancing product and brand awareness.

Above the Line Promotion (ATL)

Various forms of promotion aimed at mass audiences, such as television and radio advertising, to reach a wide audience.

Direct Marketing

Targeted marketing messages sent via email, phone, or mail to potential customers, allowing for personalized communication and data collection.

Sales Promotion

Special offers like discounts, free samples, and competitions to attract price-sensitive consumers and boost short-term sales.

Loyalty Cards

Programs offering rewards to customers for continued shopping, fostering customer loyalty and providing valuable customer data.

After-sales Service

Providing services like free delivery, installations, warranties, and repairs after a purchase to increase customer satisfaction and loyalty.

Employee Training

Required for crisis management skills and maintaining positive community relations.

Merchandising

Refers to branded items produced by businesses to enhance brand awareness.

Advantages of Merchandising

Includes wider awareness and increased audience attention.

Disadvantages of Merchandising

Involves an increase in costs and no guaranteed additional sales.

Exhibitions and Trade Fairs

Places to view various business products, facilitating consumer investigation.

Advantages of Exhibitions and Trade Fairs

Customers can inspect items, compare products, and find many potential customers.

Disadvantages of Exhibitions and Trade Fairs

Presence of several competitors.

Through the Line Promotion (TTL)

Combines mass and direct advertising for brand exposure and sales.

Importance of TTL

Offers benefits of ATL and BTL promotions, customization, and increased brand exposure.

Digital Marketing

Example of TTL marketing using digital media campaigns for brand building and conversions.

360-Degree Marketing

Advertising approach combining ATL and BTL elements for holistic brand promotion and sales.

Social Media

Used by businesses to communicate with potential customers and promote products.

Advantages of Social Media

Includes low-cost differentiation, customer insights, improved service, and easy performance measurement.

Disadvantages of Social Media

Must be integrated into a broader promotional strategy, production costs, and potential harm to business.

Place

Concerns product delivery to customers, involving distribution channels and marketing mix decisions.

Intermediary

Acts as a 'go-between' in transactions to aid in the distribution process.

Wholesalers

Purchase large quantities from producers, store, and sell to retailers, reducing distribution costs.

Retailers

Purchase goods from wholesalers and producers, selling them to the final consumer through various formats.

Agents

Assist in transactions between producers and retailers, facilitating the distribution process.

Agent

A person who acts on behalf of another person or group, promoting products and charging a commission without owning the product.

Distribution channels

The path a product takes from producer to final consumer, influenced by factors like product type, distributor size, and business objectives.

Direct distribution

Selling products directly to customers without intermediaries, allowing for close customer contact and market research.

Indirect distribution

Involves intermediaries between producer and buyer, allowing producers to focus on core activities but potentially reducing control.

Producer to retailer to consumer

Involves large retailers like Walmart, iTunes, Amazon, enabling producers to reach a wide consumer base through central distribution hubs.