Marketing, competition and the customer

Marketing

Marketing is identifying customer wants and satisfying them profitably

The role of Marketing

Identify customer needs

Satisfy customer needs

Maintain customer loyalty

Gain information about customers

Anticipate changes in customer needs

Benefits of identifying customers needs by the Marketing department

Raise customer awareness of a product or service of the business

Increase revenue and profitability

Increase or maintain market share

Maintain or improve the image of products or a business

Target a new market or market segment

Enter new market at home or abroad

Develop new products or improve existing products

Why consumer spending patterns change

Consumer tastes and fashions change

Changes in technology

Changing incomes

Aging populations

Why some markets become more competitive

Globalization of markets

Improvement in transportation

E-commerce

How can a business respond to changing spending patterns and increased competition

Maintain good customer relationships

Keep improving its existing product

Bring out new products to keep customers interest

Keep cost low to maintain competitiveness

Market

A market is measured by the total number of sales or by the value of sales for that good or service by all suppliers of that particular good or service

Mass marketing

Mass market is where there is a large number of sales of a product

Advantages

Total sales are very high

Can benefit from economies of scale

Risks are spread across a variety of products

Opportunity for growth due to large potential sales

Disadvantages

High levels of competition between businesses selling similar products

High cost of advertising and promotion

Standardized, product or services are produced, and may not need specific needs of customers potential customers > lost sales

Niche marketing

Niche market is a small usually specialized segments of a much larger market

Advantages

Reduced competition

The need of customers can be more closely focused on, and therefore targeted leading to customer loyalty and good customer relations

Disadvantages

Limited sales potential

Higher risk due to specialization in one product

Market segments

Market segment is an identifiable subgroup of a home market in which consumers have similar characteristics or preferences

Advantages of market segmentation

Makes marketing expenditure cost effective by producing a product which closely meets the needs of these customers and targeting it’s marketing efforts only in the segment

Enjoy higher sales, revenue, and profits for a business because of cost-effective marketing

Ident Sigmund, which is not having its needs fully met and therefore offers opportunity to increase sales

Ways to segment a market

By social economic group

By age

By region/Location

By gender

By use of the product

By lifestyle

Methods of segmentation

Detailed analysis of a market and size of each potential segment in terms of consumers and likely sales

Company, image and brand image

Cost of entering each segment