Marketing!

Establishing market objectives

Realistic and measurable goals to be achieved through the marketing plan and overall interdependence.

• Provide purpose and direction.

1: Increase market share

Greater brand recognition and customer loyalty, which can sustain increased sales and pricing power over competitors.

2: Expand product range

To adapt to changing consumer tastes, stay competitive by offering innovative or improved products before rivals do, reach new market segments and attract different demographics, and ultimately maintain interest in brand.

3: Maximise customer service

Means responding to a customer's needs, wants and concerns to improve reputation and customer satisfaction, building trust and loyalty, positive word of mouth.

• Provide training and workshops to improve communication.

• Monitor employee performance to ensure consistency and accountability.

• Gathering customer feedback to prioritise a customer-oriented culture which sustains growth by understanding needs and expectations.

4: Expand into new markets

Means increasing the geographic or demographic reach of a business's products or services to attract new customers and boost sales.

• Opening stores in new locations (locally, nationally, or internationally) to access untapped markets.

• E-commerce - allowing the business to reach customers beyond physical locations.

• Partnering with retailers or distributors in different regions to increase availability.

• Adapting marketing strategies and introducing tailored products to suit local cultures, preferences, and needs.

Identifying target markets

The purpose of segmenting the market is to divide a broad market into smaller, more manageable groups of consumers with similar needs and characteristics.

• Allow businesses to develop strategies and marketing mix that better satisfy needs and wants of customers, helping achieve objectives.

• Helping build a competitive advantage and increase marketing efficiency.

Primary target market

The market segment that marketing targets most of their resources towards in order to satisfy.

Secondary target market

A smaller and less important market segment that the business sells to.

Target market approaches

Mass marketing, market segmentation or niche market.

Developing marketing strategies

Involves putting together an effectively balanced marketing mix of the 4P's to satisfy customer needs and achieve objectives.

• Will vary depending on a range of variables such as the stage of the product life cycle.

• Consists of product, price, place and promotion - requires coordination to sustain a competitive advantage and long-term marketing success.

• Highly integrated so adjustments in one requires changes to the other - e.g. a premium-priced product usually requires premium packaging, exclusive distribution and sophisticated promotion.

Implementation, monitoring and controlling

It allows businesses to identify whether strategies are achieving the desired outcomes, whether resources are being used efficiently and whether adjustments are required.

• Because market conditions, consumer preferences and competitor actions are constantly changing, implementation and control should be viewed as an ongoing process.

Monitoring

Ongoing observation and measurement of progress of the marketing plan. Requires every employee to gather information and report any problems or opportunities that might emerge - enabling proactive responsiveness to changing market conditions.

Controlling

Comparing planned results against actual results and taking corrective action to ensure marketing objectives are achieved.

Implementation

Process of putting marketing strategies into operations and converting marketing plan into practical actions.

• Involves daily, weekly and monthly decisions to ensure the plan is effectively being put into place/executed.

• Requires communication and cooperation/interdependence between other 3 key business functions.

Pre-implementation - Financial Forecasting:

Considers the cost of implementing the strategies in the marketing plan such as introducing a new product and comparing it to the potential sales revenue that could be generated.

• It allows businesses to assess whether a proposed marketing strategy is financially viable and likely to achieve desired returns.

• Cost estimate: Product development and research, Advertising and promotional campaigns, Packaging and branding, Distribution and logistics, Employee training.

• Revenue estimate: forecast expected sales volumes and predicted market demand.

Key Performance Indicators (KPIs)

Specific, measurable objectives that are forecasts of expected performance. In order to monitor success of the marketing plan, comparisons need to be drawn between actual performance and KPIs benchmarks

• (e.g. Website traffic and online engagement).

• Facilitates early identification of performance gaps requiring corrective action.

After-implementation - Sales Analysis

Compares actual sales against budgeted/forecasted sales to measure the success of the marketing strategy, even specifically within regions or customer segments.

• Adv: figures are usually simple and inexpensive to collect and process.

• Disadv: figures don't reveal exact profit levels for a strategy as no costs are considered, limiting its effectiveness.

After-implementation - Market Share Analysis

Comparing the business's portion of total market sales to direct competitors within same industry.

• Provides insight into whether marketing strategies are outperforming or underperforming competitors.

• Can determine if fluctuations in sales are due to their marketing strategies or uncontrollable/unprecedented external market forces.

After-implementation - Market Profitability Analysis

Whether finance invested on marketing specific activities including advertising, production, distribution is generating a sufficient return.

• Limitation: Some marketing benefits, such as brand awareness and customer loyalty, may be difficult to quantify.

Controlling the marketing plan

Undertaking corrective action and adjusting strategies e.g. product development or product deletion.

Ethical influence - unpacked

• Marketing must undertake actions that align with the acceptable standard of behaviour consumers and society expect, which is different to complying with the law.

• Marketing should engage in ethical behaviour to strengthen relationships with key stakeholders including customers, employees and shareholders.

Truth and accuracy

Businesses can be held socially responsible for deceiving consumers.

Exaggerated claims (puffery)

Overstated or hyperbolic statements that could mislead a reasonable person.

Concealed facts

Key information purposefully omitted from an advertisement to make the product appear better, preventing informed consumer choice e.g. a marketer for fruit juices might emphasise its vitamins and minerals but not mention its high sugar content.

Vague statements

Ambiguous statements used to imply benefits without clear evidence such as "helps fight".

Breaching privacy

Collecting personal data or tracking behaviour without clear consent, eroding consumer trust.

Good taste (respectful and appropriate)

Because of its subjective nature, marketing should ensure advertising is sensitive to the beliefs and values of all people (e.g. use of stereotypes, or of sex to sell products, dangerous behaviour).

Controversial advertisements…

Can increase visibility and brand recognition, succeeding in the short term, however it risks damaging credibility, reputation and alienating consumers.

Products That May Damage Health

Businesses must be aware of government regulations and societal outlooks related to advertising potentially harmful products (e.g. marketing junk food especially to children is seen as controversial).

Engaging in fair competition

Prohibiting anti-competitive conduct, primarily misusing market share.

Predatory pricing

Setting extremely low prices to force weaker competitors out of the market.

Mergers and acquisitions

Allowed unless they substantially reduce market competition.

Cartel conduct

When competing businesses agree to act together. Includes price fixing.

Sugging

Marketing ploy whereby a salesperson disguises attempts to sell a product as market research e.g. completing a survey.

• Not illegal but can be seen as deceptive, unethical and an invasion of privacy as it misrepresents the purpose of an activity.

Situational analysis

Means examining the current internal and external conditions that can influence a business or marketing plan before deciding strategies.

SWOT analysis

Planning tool - assesses position in the market compared to competitors and helps management make realistic/informed strategic decisions and objectives by considering internal strengths/competitive advantages and weaknesses alongside external opportunities and threats.

• Allows the business to have a better understanding of its current position, where it is headed, what factors will assist it in achieving goals and if there are any roadblocks they need to overcome.

• Enables it to remain proactively competitive and responsive to a rapidly changing market rather than reactively.

• Forms the foundation of the entire marketing process, as all subsequent activities and strategies should be based on the findings of the situational analysis.

Product life cycle (PLC)

Entails the typical stages a product progresses through.

• Affects marketing mixes and strategies, meaning businesses should continuously adapt to maximise profits.

• Understanding PLC helps businesses maximise sales, profitability and product longevity.

• Helps determine appropriate pricing, promotional and distribution strategies.

PLC - Introduction stage

Research, developing and then launching the product. The goal is to increase consumer awareness/interest and build an initial market share to cover high establishment costs.

PLC - Growth stage

Where the product experiences increased demand, sales and profit at their fastest rate due to differentiation.

PLC - Maturity stage

Sales are near their highest but the rate of growth is plateauing as the market becomes saturated. Goal is to focus on retaining existing customers and to cut costs.

PLC - Decline stage

Final stage when sales begin to decline as customers move to alternative or superior products, unless product extension is implemented. Businesses must decide whether continued investment is worthwhile or whether resources should be redirected to newer products.

Market research

Systemic process of collecting, recording and analysing data to gain insights into a specific marketing problem or opportunity.

• Enables a business to understand consumer behaviour of the target market's needs and wants, emerging market trends/demand and competitor activity

• helping managers make evidence-based and strategic decisions

• assists in minimising risk and develop effective marketing mix and allocate resources efficiently

• while gain a competitive advantage via differentiation or innovation.

Primary sources

First-hand information collected directly by a business or outsourced activity to researchers on behalf

• time-consuming and expensive but specific to the business's objectives

Secondary sources

Information that has been already collected by some other person or organisation for another purpose.

Surveys

Collects quantitative data from a large number of customers, helping businesses identify preferences and evaluate customer satisfaction, identifying areas for improvement.

• This guides decisions on pricing, product features and promotional strategies.

• Can be conducted online, by phone, face-to-face, through social media or by mail.

Interviews

Involving direct one-on-one questioning of participants, provide detailed, qualitative insights into individual customer opinions, motivations and experiences. This helps marketing to refine products, personalise promotions and better understand target audiences.

• Can be structured, semi-structured or unstructured.

• Helps businesses uncover unmet customer needs and expectations.

Focus groups

Guided discussion involving a small group of consumers, revealing attitudes, perceptions and emotional responses to a product. This allows businesses to test new ideas, packaging or advertising before a full-scale launch, reducing risk and improving strategy effectiveness.

• Helps businesses identify potential problems before significant resources are invested.

Australian Bureau of Statistics (ABS)

Australia's official national statistical agency.

• Provides businesses with localised and reliable geographic and demographic data that acts as a feasibility measurement to validate marketing decisions before investing capital or without conducting expensive primary research.

• Helps businesses better understand market characteristics such as the size, identify emerging demand opportunities and reduce overall risk.

ABS - Demographic data

Age, income, gender, education, cultural ethnic diversity, family structures - helps identify and segment target markets more effectively while allowing marketing to tailor products, pricing, promotional strategies and distribution methods to specific consumer groups.

ABS - Geographic data

Highlights concentrations of potential customers, helping businesses decide store locations or where to focus advertising. Can reveal growth areas where increasing populations may create future demand.

ABS - Macroeconomic data

Spending habits, employment rates, inflation - helps businesses plan pricing and product ranges based on consumer confidence and sentiment, alongside anticipating changes in their purchasing power.

ABS - Limitations

Does not explain the reasons behind consumer behaviour, often needing to be combined with primary research to gain deeper insights.

Syllabus acronym - (TDFS)

Ethical - Truth, accuracy and good taste in advertising, products that may damage health, engaging in fair competition, sugging

Product Life Cycle - Products may experience a decline in sales due to…

• changing public perception or values such as eco-awareness

• new technologies being introduced reducing demand for older products

• fluctuations in economic activity affecting customer spending habits

• increased competition

Syllabus Acronym - SMEIDI

• Situational Analysis

• Market research

• Establishing marketing objectives

• Identifying target markets

• Developing marketing strategies

• Implementation, monitoring and controlling

Strategic role of marketing

Is to develop a coordinated plan to effectively position, price, promote and distribute goods and services to current and potential customers, based on extensive market research and available business resources. Its ultimate goal is to maximise profitability by satisfying customer needs, increasing brand awareness and market share, forming a sustainable competitive advantage.

Marketing plan

A realistic document listing customer-centric activities aimed at achieving specific marketing objectives over the short and long-term, providing purpose and direction.

• integrating with operations, human resources and finance

Production approach

An approach emerged during the Industrial Revolution ($1820s$) focusing on manufacturing enough goods efficiently to meet demand, based on the mentality "If we make it, they will buy it." Marketing involved taking orders and delivering the product

Sales approach

An approach adopted after WW1 ($1920s$) emphasizing sales targets and high-pressure tactics as production began to exceed demand and competition grew. Involved aggresively using televisions and radios to advertise and personal selling.

Marketing approach

A focus on creating products customers actually desire by using market research to learn and satisfy customer preferences.

• Due to changing economic and social conditions (post 1980s)

Corporate social responsibility (CSR)

Growing public concern regarding environmental and social issues, such as sustainability and fair trade, that motivates changes in business operations.

Relationship marketing

A strategy placing high priority on customer retention and fostering loyalty through rewards programs and customer service support.

Resource market

Involves businesses or individuals in the supply, production, and purchase of raw materials from primary industries like mining, farming, and fishing.

Industrial market

Businesses that purchase products and materials to use in making other goods or services within the secondary or tertiary industries. e.g. bakery buying flour to make bread

Intermediate market

Wholesalers or retailers (intermediaries) that buy finished products and resell them to consumers for a profit.

Mass market

A large market where one standard, undifferentiated product is sold to all customers, assuming they have similar needs. e.g. electricity, fruit, meat

Niche market

A small, specialised segment of the market focusing on a specific group with unique needs or lifestyles, often involving high-value and low volume products.

• Advantages: less competition, can charge higher prices and therefore increase profit margins, strong customer loyalty

• Disadvantages: vulnerable to market changes

Psychological influences

Internal, intrinsic characteristics and mental processes of an individual, such as beliefs and values, self-image, and lifestyle, that motivate and shape buying behaviour.

• These determine how consumers interpret marketing messages and perceive and evaluate products.

• position products to satisfy psychological needs such as belonging, esteem, security or self-expression

Economic influences

Both Micro-level socioeconomic status and external macroeconomic environments, like disposable income and cost of living, that impact purchasing power and spending behaviour

• Often reflected in pricing strategies and what features of products are highlighted in promotional strategies

Government influences

Laws, statutory regulations, and policies imposed by local, state of federal authorities that legally dictate how products are sold and advertised.

• directly impact the boundaries of a marketing plan, legally forcing businesses to alter their product design, pricing, and promotional channels

• e.g. age restrictions on advertising certain products - severe financial penalties and affecting business reputation

Sociocultural influences

External forces from social groups, religion, family, and peer groups that pressure individuals into conforming to certain purchasing decisions

• Marketing leverages these sociological insights to create highly segmented, culturally resonant campaigns, ensuring products are perceived as a means to achieve belonging, status and cultural acceptance within their respective communities

• ensuring product lines directly accommodate the dietary, religious, or ethical standards/values of targeted societal segments

Australian Consumer Law (ACL)

A single national law introduced in $2011$ to ensure consistency for marketing practices and consumer rights across Australia.

Competition and Consumer Act 2010 (Cth)

The federal legislation under which the ACL operates, designed to promote competition and protect consumers against unfair trade practices.

Greenwashing

Making unsubstantiated claims about a product’s environmental benefits, such as using the term "eco-friendly" or nature imagery on packaging.

Bait advertising

Promoting products at low prices that are unavailable or in limited supply to lure customers, then directing them to more expensive options.

Price discrimination

The practice of charging different prices for the same product to different markets or customers, which may be unlawful if it results in anti-competitive behaviour.

Implied conditions

A set of consumer guarantees under the ACL, such as products being fit for purpose, of acceptable quality, and matching their description.

Warranties

A business guarantee that a product will work as promised for a set period, promising to correct defects by repairing, replacing, or refunding.

Puffery

Exaggerated or hyperbolic statements used in advertising that overstate claims and could potentially mislead a reasonable person.

Sugging

A marketing ploy where a salesperson disguises an attempt to sell a product as legitimate market research.

SWOT analysis

A situational analysis tool that assesses a business's internal strengths and weaknesses alongside external opportunities and threats.

Product Life Cycle (PLC)

The stages a product progresses through: Introduction, Growth, Maturity, and Decline.

Primary market research

First-hand information collected directly by a business or outsourced to researchers, often involving surveys, interviews, and focus groups.

Secondary market research

Information that has already been collected by another person or organisation for a different purpose, such as data from the Australian Bureau of Statistics (ABS).

Financial forecasting

A pre-implementation process that considers the cost of marketing strategies and compares them to potential sales revenue.

Key Performance Indicators (KPIs)

Specific, measurable objectives that act as forecasts of expected performance to monitor the success of a marketing plan.

Market share analysis

An evaluation comparing a business's portion of total market sales against its direct competitors within the same industry.

Consumer market

individuals/households buying products for personal use or consumption

Factors influencing customer choice - unpacking and define

Refers to the reasons consumers decide to purchase, reject or remain loyal to a product or service. Understanding these influences allows businesses to predict consumer behaviour, identify emerging trends, segment markets effectively, and develop more profitable marketing mixes  and strategies that increase customer satisfaction by aligning with expectations

• Gain a competitive advantage by responding to and leveraging consumer behaviour more effectively than competitors

Psychological - Marketing can tap into the process of learning…

changes in an individual's behaviour caused by new information or experiences - by creating a positive association with a product, increases chance of customers repeating their purchase e.g. free product samples or loyalty rewards, trial periods

During economic growth….

consumers are generally more willing to spend on discretionary items, based on financial optimism - marketing shift focus towards luxury, premium quality and status

During recessions or periods of economic uncertainty…

consumers become more price-sensitive and prioritise necessities - marketers often emphasise affordability, discounts and value for money

Branding

creating a distinct identity image for a product or business in the minds of consumers. Involves: name, logo/symbol, reputation. Encourages repeat purchases (brand recognition). Easier to launch new products. Supports promotional activities.

Packaging

intentional use of a product's container + design as a promotional tool to communicate brand identity, boost visibility + influence consumer buying behaviour.

Cost-based pricing

derived from total cost of producing + purchasing product plus a mark-up to ensure profit. Disadv: ignores demand or market like what competitors charge or what consumers are willing to pay.

Market-based pricing

derived from interactions between supply/demand. Disadv: customer willingness to pay can shift quickly + have to predict accurately, leading to unstable pricing.

Competition-based pricing

setting price below, equal to or above competitors. Above comp: attract customers, gain market share, signal its similar position as higher quality, premium, or more desirable value.

Price skimming (Skimming pricing)

charging a very high price for a product in its Introduction stage, customers willing to pay for prestige + status. Adv: recover research + development costs quickly. Disadv: short-term as competitors will launch rival products, pressuring price to fall.

Penetration pricing

charge lowest possible initial price by encouraging to buy quickly, attract customers + gain market share, creates brand awareness. Disadv: low profit margins, low-quality perception. Disadv: customer dissatisfaction from price eventually rising.

Loss leader

selling products at or below cost. Encourages customers to visit store, becoming more likely to buy additional items (impulse buying). Attracts + increases traffic flow. Quickly sell obsolete or seasonal products. Build reputation as high value.