UNIT 4: Marketing

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Marketing

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29 Terms

1

Marketing

All of the processes involved in identifying and satisfying customer needs

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2

Product Orientation

when a business prioritizes research and development of high quality, specialized products, rather than prioritizing market research. Can lead companies to Unique Selling Point but is expensive to produce.

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3

Market Orientation

when the sole focus of a business is on the needs and wants of a market segment. Has a low risk, but no USP and needs to be done right to suceed.

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4

Market Share

The value of a single company's sales compared with the sales of all businesses in a market.

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5

Market Growth

The increase in sales revenues in an individual market over time.

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6

Market Leader

The product or brand with the highest market share. PROS - Can increase brand recognition, have economies of scale, and price leadership. CONS - can lead to diseconomies of scale and increase competition.

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7

Market Planning

a document that outlines a company’s entire marketing processes.

INCLUDES:

  • the marketing objective,

  • budget,

  • segmentation and the target market,

  • market research strategies (7 P’s) and control tools

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8

Market segmentation

The process of dividing a broad market group into various segments. Allows businesses to develop marketing strategies to meet the needs of diverse groups. Such as – geographic (dividing customer based on location), demographic (based on age, gender...) and psychographic segmentation (lifestyle and interests).

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9

Product Positioning

Distinguishing a brand from its competitors.

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10

Niche Markets

a small part of a large market

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11

Mass Markets

goods that are produced in very large quantities

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Unique Selling Point

A feature of the product that distinguishes it from its competitors.

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13

Tool: Porter's Generic Strategies

identifies cost and differentiation strategies for a business looking to gain a competitive advantage.

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14

The 7Ps of the Marketing Mix

Product, Price, Promotion, Place, People, Process, Physical Evidence

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15

Product

the good or service designed to satisfy a need or want in a market.

  • Product Life Cycle: Research and development (R&D), Introduction, Growth, Maturity, Decline

<p>the good or service designed to satisfy a need or want in a market.</p><ul><li><p>Product Life Cycle: Research and development (R&amp;D), Introduction, Growth, Maturity, Decline</p></li></ul>
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16

Branding

Part of Product.

  • Brand awareness: The degree to which consumers recognise a product by its name and special characteristics.

    See entire glossary

  • Brand Loyalty: When customers continue to buy a particular brand, even where alternatives exist.

  • Brand Value: How much a brand is worth as an intangible asset, a form of goodwill; recorded on the statement of financial position.

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Price

The amount of money that a business charges for its product or service.

Pricing Methods:

  • Cost-plus (markup): The price charged for the product reflects a markup added to the direct and indirect costs of production.

  • Penetration: the business sets a very low price on a new product or service to encourage customers to buy it; later the price is increased.

  • Loss Leader: A product that is sold at a loss to attract customers.

  • Predatory: a business sells a product or service at such a low price that other businesses cannot compete and are forced to leave the market

  • Premium: a business sets the price of its products higher to create the impression that the products are higher quality or value than their lower-cost equivalents.

  • Others: Dynamic, competitive and contribution pricing

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18

Promotion

the advertising, sponsorships, sales promotion, or other tactics to inform and persuade customers to buy a product. 3 different types of promotions:

  • Above the line: Promotion aimed at mass audiences, television and radio advertising, print advertising

  • Below the line: Promotion aimed at specific segments and do not rely on mass market techniques, merch, loyalty cards after-sales service, and exhibitions and trade fairs

  • Through the line: An integrated marketing approach that includes both above the line and below the line elements. 360 degree marketing: A marketing campaign that reaches customers at all possible points of contact.

Effective promotion will increase product and brand awareness, as well as image.

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Place

the physical distribution of products. ex: wholesalers, retailers, distributors.

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People

Those who are involved in offering a service; an element of the marketing mix.

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21

Process

the activities needed in the interaction between the customer and the business.

Processes include:

  • placing and paying for orders

  • delivery systems

  • customer feedback

  • after-sales service

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22

Physical Evidence

An element of the marketing mix related to all the sensory elements that the customer sees, smells, hears and touches when interacting with a business.

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23

Tool: BCG Matrix

A matrix that classifies the products of a business into high and low market share and market growth categories.

The market growth rate is the y-axis and The market share is the x-axis.

  • Stars: High market share. High market growth. Requires significant investment to sustain growth, but revenues grow strongly.

  • Cash Cows: High market share. Low market growth. Successful products in slower growing markets. Less money is needed for marketing.

  • Problem Childs: Low market share. High market growth. Likely to have a negative cash flow

  • Dogs: Low market share. Low market growth. These products may be at the end of their product life cycle, or they are niche products competing in mature low-growth markets.

<p>A matrix that classifies the products of a business into high and low market share and market growth categories.</p><p>The market growth rate is the y-axis and The market share is the x-axis.</p><ul><li><p><strong>Stars:</strong> High market share. High market growth. Requires significant investment to sustain growth, but revenues grow strongly.</p></li><li><p><strong>Cash Cows:</strong> High market share. Low market growth. Successful products in slower growing markets. Less money is needed for marketing.</p></li><li><p><strong>Problem Childs:</strong> Low market share. High market growth. Likely to have a negative cash flow</p></li><li><p><strong>Dogs:</strong> Low market share. Low market growth. These products may be at the end of their product life cycle, or they are niche products competing in mature low-growth markets.</p></li></ul>
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Sales Forecasting

The process of predicting the future sales of a firm

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Tool: Simple Linear Regression

  1. Creating scatter diagrams to plot data from two variables.

  2. Sketching a line of best fit.

  3. Extrapolating the data to make predictions.

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26

International Marketing

The marketing of goods and services across national boundaries

Methods: Direct Exporting Joint Ventures with Local Organizations Licensing Agreements Franchising Foreign Subsidiaries Online Marketing

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27

Primary market research

involves creating new information, gathered by the business through surveys, interviews, observations,  focus groups or other methods. Primary research aims to answer a specific research question.

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Secondary market research

uses information gathered by others. This means that it can be carried out rapidly and can give a quick overview of a market. A business can use secondary research to learn general information about its target market and the external environment (STEEPLE factors)

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Qualitative and quantitative research

Quantitative research: refers to collecting numerical data or information that can be counted

Qualitative research involves collecting non-numerical data, such as opinions.

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