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What is marketing
Marketing is the management process involved in identifying, anticipating and satisfying consumer needs profitability.
2 distinct approaches to market products are
market orientation and product orientation
What is product orientated approach:
-inward looking approach (product first and then try sell it)
-product led and assumes supply creates its own demand.
advantages of product orientated approach:
Associated with production of high quality products
Can succeed when speed of change is slow and firm already has good reputation.
has control over activities
disadvantages of product orientated approach
takes risks which may lead to business failure or closure
Spend money on research and development without considering consumer needs.
Market orientated approach is
outward looking: focused on carrying market research first and then product.
Focuses on establishing consumer demand
disadvantages of market orientated approach
Due to consumers change in tastes, hard to meet everyones needs
The research is costly
advantages of market orientated approach
market research increases, and risk of failure decreases
can anticipate and respond quickly to change in market
Strong position compared to competition because of regular feedback
market share is:
The % of total shares that a business has within the industry
market growth is:
the increase in number of consumers who buy the goods/services. It’s the % change in market size over a given period of time.
market size represents:
TOTAL sales made by all businesses in a given market.
market share provides insight into
firm’s revenue, growth and profit margins
when calculating and interpreting market share (remeber that):
Can be measured by volume and value (dif results)
dif products included can influence calculation of market share
You are a market leader when you have
firm with largest market share within an industry
benefits of being a market leader:
increased sales rev (higher profit)
able to gain EOS
role of marketing planning:
process involving organisation deciding on market strategies that would be most effective in attaining overall strategic objectives.
what is a marketing plan
a doc about marketing strategies that are developed to achieve marking objectives.
what is included in marketing plan (main bits)
Marketing budget
Key strategic plans
Marketing objectives (SMART)
detailed marketing actions
advantages of marketing planning
identify specific problems and find solutions to them
Marketing budget ensures resources are not wasted
SMART objectives improves change of success for firm’s marketing strategy
disadvantages of marketing planning
may become outdated if not changed quickly
process may consume considerable resources (time, money for designing plan..)
marget segmentation is the ..
process of diving market into smaller or distinct groups of consumers to meet their desired wants and needs.
demographic segmentation
considers varying characteristics of human population in the market.
age
gender
religion
family characteristics
geographic segmentation
climate conditions (cold so warm jackets)
regions in countries where people live (eg agricultural)
Psychographic segmentation
based on lifestyle choices or personality:
social and economical status
values (moral beliefs eg animal testing)
advantages of segmentation
helps identify existing gaps and new opportunities in market
designing products for specific groups can boost sales (profit)
minimise waste of resources since customers for products are idenitified
(CAN BE EXPENSIVE)
Targeting is→
process of marketing to specific market segment
different targeting strategies
undifferentiated market/mass marketing (entire market)
Differentiated marketing/segmented marketing (targets several market segments like toyota with all prices)
Concentrated marketing (smaller and more specific market segment)
product positioning:
involves analysing how consumers define/percieve a product compared to other products within a market. (position map)
Importance of position map
helps establish close competitors
quick and simple way of presenting research
Niche market vs Mass Market
Niche market → focuses on small groups of people/consumers who have interests with product/service of specific organisation.
Mass market → Aimed at large market segment (aim to find highest number of customers)
What is a USP:
feature differentiating product from other competing products. Why consumers choose one product over the other.
Importance of having USP
helps firm establish competitive advantage
customer loyalty (something special abt product)
Leads to improved revenue
How firms differentiate them and their product (dif types)
price
service (delivery, installation etc)
product (eg durability or resistance)
relationship (product and customer, personnel choice, trust)
distribution (channels of distribution) - eg middlemen
Reputation (created through other forms of differentiation - like high quality)
sales forecasting is
process of predicting what a firm’s future sales will be
benefits of salesforecasting
better cash flow management
increased efficiency (stock how much to produce..)
better workforce planning (how much staff needed - HR)
Improved marketing planning (greater awareness of future trends)
limitations of salesforecasting
time consuming
ignores qualitative external factors (politics etc)
entry of competitors may be unseen
purpose of market research
wants and needs of customers are seen
reduce risk of market failure
helps business see what is likely to happen in future
methods of market research
primary and secondary research
primary research is
‘field research’, first hand info from market
direct from customers
secondary research is
analysing data that already exists ‘desk research’
quicker and cheaper
qualitative research
data of opinions, attitudes or beliefs
subjective
multiple realities
researcher part of process
(collecting, analysing and interpreting)
quantitative research
collection of numerical data
less open to interpretation
objective
researcher is separate
provides one reality
Counts and measures
sampling methods means
the process of selecting appropriate sample (small group of people to represent population of target market)
qouta sampling is
segmenting a given population into number of groups that share similar characteristics (eg age)
advantages of qouta sampling
quick and cost effective
usually more reliable that random sampling
disadvantages of qouta sampling
not always representation of population
interviews may be biased in selecting interviewees
random sampling
each member of population has equal chance of being picked
advantages of random sampling
reduces bias
relatively easy way of obtaining sample
disadvantages of random sampling
sample chosen may be too small
may not consist of target population
convenience sampling
research groups selected based on their easy access and proximity to researcher
advantages convenience sampling
fast, easy and cheap
disadvantages convenience sampling
may be biased and not represent population well