Business Marketing

what is marketing

marketing involves trying to meet the needs and wants of customers

how is marketing achieved

by finding out what customers want and designing a product or service and selling this at a price which ensures maximised profit

benefits of marketing

become more aware of your company and what you do

more customers

increased market growth (increased profit, customers or popularity of service/product)

increase market share (increased number of customers)

becoming the market leader (most customers)

marketing is an important activity as it can

attract new customers by letting them know about the range of products a business has

allows the business to enter new markets, leading to growth

all of this activity leads to increase of sales and profit

market segmentation

dividing customers into certain groups and use these groups to target specific products or services

the specific segmentation a business chooses to target is known as their target market

the market can be separated into genres like age, gender, budget, location, lifestyle etc

why is market segmentation important

to ensure the product is suitable and specific to the needs of the customer group - this means customers will be interested in the product and will increase sales for the organisation

to ensure the product is sold properly in the most suitable place making it accessible for the target market allowing customers to purchase in a way thats convenient to them - increasing sales for the organisation

to allow a suitable price to be set that will reflect what that market segment can afford and are able to pay

to ensure all marketing activity such as promotion and advertising can be aimed to reach the intended audience

what is market research

when businesses have to find out what customers want and what competitors are doing

why is market research done

to ensure customers want the goods or services

to give them a competitive advantage

what are the two types of market research

desk research

field research

advantages and disadvantages of field research

advantages - more up to date gathered for a purpose and more relevant to the company trustworthy information

disadvantages - can be more costly takes longer to find info. need skilled staff

what is field research

involves gathering new first hand primary information.

can be done through surveys, interviews and questionnaires

advantages and disadvantages of desk research

advantages - inexpensive quick to find staff is not needed basically google searching

disadvantages - isnt only for your business could be unreliable

what is desk research

involves gathering usually old second hand secondary information for your organisation.

can be found using websites newspapers and sales figures

what are the four P’s

Product

Place

Price

Promotion

what is product

the firm must come up with a product that people want to buy

what is place

the product must be for sale in a place the customer will find convenient

what is price

The price must be one that the customer thinks is good value for money. Basically the amount customers pay for goods/services.

what is promotion

The product must be promoted so that potential customers know exists

product development

before a product is made available to customers in a market, it has to go through development

Stages of product development

market research is done to find out what the customer wants

ideas are then generated based on this research

a model of the product would be created - prototype

the business would carry out test marketing where they would gather customer opinions

changes may then be made to the prototype

final stage is deciding on the remaining elements of the marketing mix - (product) price place and promotion

problems associated with product development

customers might not want the product

money invested could be wasted putting the organisation into financial difficulty

the reputation of the business could be damaged if the product is developed doesnt have consumer demand or is poor quality

Product Lifecycle

introduction

growth

maturity

decline

introduction

the products first launched to the market - lots of advertisement - sales are low

growth

sales of the product are growing - more customers are aware of the product due to the introduction stage - advertisement is still high

maturity

most desirable stage - highest point of sales - advertisement can slow down - most profitable stage

decline

product begins to fall - usually new versions of the product are in the market

what is branding

giving your company its own unique identity. formed by your logo, name, design and product.

a brand is the idea or image people have in mind when thinking of the organisation

advantages of branding

differentiation

loyalty

perceived value

customer referalls

brand extensions

competitive advantages

reputation

disadvantages of branding

could be expensive

risk of damage (controversy)

brand dilution (overusing)

dependancy (relying on the brand alone)

competition

reputation

when asked

Explain the advantages of branding (popular question)

what do you say

brand customer loyalty WHICH MEANS you are guaranteed returning customers

brand recognition WHICH MEANS that less advertising will be required

gives an illusion/image of quality WHICH MEANS that higher prices can be charged

easier to launch new products within an established brand WHICH MEANS a cost saving on advertisement

what is parasitic packaging

when retailers take and change the packaging of a recognisable product to trick customers into accidentally buying the wrong item

pricing strategies SHORT TERM (quick deals)

promotional pricing - boosting sales by decreasing the price in the short term

destroyer pricing - setting a price below the competition with the intention of “destroying” them

market skimming - launching new and unique products to charge a higher price to “cream” the market (as competitors enter the market the price lowers)

penetration pricing

pricing strategies LONG TERM

competitive/market pricing - some businesses in the same market charge similar prices to avoid a price war

premium/high pricing - used when a firm regards its products as the best in the market; and as a result believes consumers will be prepared to pay for the high quality

loss leader - charging an extremely lower price when consumers has no brand loyalty

low pricing - a business charges lower than its conpetitors

PLACE - location

close to raw materials

close to customers

availability of skilled staff

land (availability, cost, car parking, ease of access, deliveries)

good infrastructure

close to competitors

using e commerce

methods of distribution

road

rail

sea

air

advantages and disadvantages of road

advantages - cheap quick 24/7 door to door

disadvantages - difficult not eco friendly roadworks

advantages and disadvantages of rail

advantages - move large quantities eco friendly

disadvantages - not local not door to door need road too

advantages and disadvantages of sea

advantages - moving bulky products worldwide

disadvantages - time consuming not door to door need road

advantages and disadvantages of air

advantages - worldwide moving large amounts

disadvantages - not door to door cant carry large items expensive need road

advantages of ethicality

brands that promote ethical values are more likely to be successful - consumers have greater trust in the business

individuals whos behaviour is ethical are likely to be attracted to jobs in ethical organisations

disadvantages of ethicality

usually more costly

takes more time

how to be ethical

not misleading

not indecent

not offensive

not discriminatory

packaging

how a business prepares its product to be transported distributed or stored

this is done to attract customers, preserve the product and protect the product

benefits if packaging

reduces production costs as they are suited to the product

reduces transport costs as good are smaller and lighter

used to promote the organisation

eco friendly packaging can improve brand image

costs of packaging

might not be eco friendly / bad for image

less attractive sometimes

costs extra than usual packaging