Business studies 0264 Section 3

Marketing

the process of identifying and predict to satisfies customer needs 🎯 🛍️ 🛒

The roles of marketing are

1 Identifying customer needs 2 Satisfying customer needs 3 Maintaining customer royalty 4 Building customer relationship 5 Predicting changes in customer needs 🤝 👑 🔮

Reasons for spending changes

1 Change if the product price itself
2 Changes in the rice of other competitors
3 Changes in the customer income
4 Changes in the population size structure
5 Changes in tase and fashion Trend
6 Changes on cost of advertising and promotional campaigns 💸 📉 👗

Reasons for market competition

1 Government intervention
2 Regional free trade
3 Improvements in the infrastructure e g roas rails flights transportation
4 Development of ecommerce and social media networks 🌍 ✈️ 💻

Business response to market changes

Developing new products Take advantage of market research and higher quality manufacturing with USP increasing competitiveness Increasing efficiency result in decrease of price Increasing promotion Persuade customers to buy their products with USP Expanding to new markets Looking for new market with less competition or more needs for the specific products 📈 🏭 🚀

Market share

the value of 1 first sales as percentage to total market Sale of business divided by total sales revenue for whole market times 100 🥧 📊 💰

Niche market

Where customer have specific needs and wants 🎯 💎 🌟

Niche market Advantages

Increase royalty meet cus Spec needs Less competition charge higher price higher profit margins ✅ 👑 📈

Niche market Disadvantages

Could attract competitors into the market Unlikely to achieve EOS Over reliance on 1 product ❌ ⚠️ 📉

Mass Market

selling the same product to the whole market 🌍 🛒 📦

Mass Market Advantages

Could reach EOS Higher level of sales potential increase in revenue Higher rancid awareness increase in MA share ✅ 📢 🌍

Mass Market Disadvantage

Higher level of competition Products are standardised Require high levels of promotion ❌ ⚔️ 💸

Market segmentation 🍕 🎯 👥

Market segmentation

Dividing the market to different segments to tailor products that suits for that group of customers 🍕 🎯 👥

Demographic segmentation

Age income location gender lifestyle 🧑🤝🧑 🎂 📍

Market segmentation Advantages

Meet specific needs of consumers Increase sales Provide opportunity to develop brand loyalty Promotion can be targeted Avoid waste possible to charge higher prices ✅ 🎯 💰

Market segmentation Disadvantages

High promotional cost Risks is not spread too reliant on 1 market segments decrease in sales High cost of market research Product development cost ❌ 📉 💸

Market Research

collection and analysis of information about the market e g consumer needs competitor activity 📋 🕵️ 📊

Effective market research can bring many benefits

Reduce risk predict future needs and wants Understand consumer behaviour Set price Identify gaps in the market Identify competitors Help make good decision for marketing market mix 🌟 🔮 🧠

Primary Research

collect data first hand directly by the business 🕵️ 🏢 📝

1 Focus Groups

invite a specific group of customer for discussion deep insights and opinions follow up questions can be asked Time consuming to arrange Response be influenced by others 🗣️ 👥 ⏳

2 Observation

recording consumer behaviours Findings are accurate simple cannot ask directly required traning 👀 🎥 🧠

3 Questionnaires or surveys

Large percentage of the market Not in person simple to analyse Some time ignored bias questions could be misunderstood do not have follow up question 📝 📊 🤷

4 Interviews

In person explain follow up expensive to train bias 🎤 🗣️ 💸

Primary Research OVR eval Advantages

up to date inform decision better decision competitive advantage ✅ 🏆 📅

Primary Research OVR eval Disadvantages

costly time consuming risk of inaccuracy ❌ ⏳ 💸

Secondary Research

Competitor website market research report trade magazine government sources 💻 📰 🏢

Secondary Research OVR Eval Advantages

Cheaper quicker ✅ ⚡ 💰

Secondary Research OVR Eval Disadvantage

may be obsolete not reliable ❌ 🕰️ ⚠️

Sampling

conducting a small portion of a marking as a representative 🍰 📊 👥

Factors influencing the accuracy of market research data

Questions phrasing sample selection Skill Time and place 🎯 ⏱️ 📍

Marketing Mix

The 4 key decision needed for effective marketing 🧩 📊 🎯

Marketing Mix Product

The good or service a business sells to satisfy customer needs 📦 🛍️ 🛒

Marketing Mix Price

The amount of money a business charges for its product 💵 💰 🏷️

Marketing Mix Place

How the product is distributed to the consumer 🚚 🌍 🏪

Marketing Mix Promotion

How the business informs consumers about the product and persuades them to buy it 📢 📺 📱

Products

good service sold to satisfy customer needs wants 🛍️ 📦 ✨

Development of New products Advantages

Gain competitive advantage Creates USP Charge higher price Increase profit Increase customer base Spread risk Reduce average cost ✅ 🚀 💰

Development of New products Disadvantages

Research is expensive Success is not guarantee Advert cost is high ❌ 💸 ⚠️

Brand Image

name logo indentity of products that distinguish from competitors 🌟 ™️ 🎨

Brand Image Advantages

Increase brand awareness Higher selling price Increase customer loyalty ✅ 👑 📈

Role of packaging

Protect the product Provide information Help customer recognise the brand Develop brand loyalty 🎁 🛡️ ℹ️

Product life cycle 1 Introduction stage

Product newly launched Sales are low High Advertising cost Sales are low 🌱 🚀 📉

Product life cycle 2 Growth

Sales grows rapidly Earn profit 📈 💰 🌟

Product life cycle 3 Maturity

well known sales no longer growing ⚖️ 🏢 📊

Product life cycle 4 Decline stage

Sales are falling unprofitable withdrawn 📉 ❌ 🚪

Extension strategies

Actions taken by a business to keep a product in the maturity stage Maintain sales 🔄 🚀 📈

E g Extension Strategies

Finding New markets Finding New uses for the product Adapting product package Increase promotional activities 🌍 🎁 📢

Pricing

A way of charging the appropriate price for the product Helps you break into the new market Increase domination potentially increase profit Ensure there is no loss 🏷️ 💵 🎯

Cost Plus Pricing

Adding a set amount of money percentage to make a profit Easy to apply Guaranteed profit May be higher than competitor No incentives ➕ 💰 📊

Competitive pricing

Encourages people to buy Prevents losing market share Need to find ways to compete ⚔️ 🛡️ 🛒

Penetration Pricing

Attract more customers Help build market share Lower revenue Might not cover cost ⬇️ 🧲 📉

Skimming

Recover cost quicker Build high quality image Put off potential customer Competitors might come in the market ⬆️ 💎 🏃

Dynamic pricing

getting rid of inventory item Remain competitive Renew interest Lower revenue Competitors may adapt same strategies ⏳ 🔄 🏷️

Factors that affect pricing strategy

New or existing product Product unique or not Competition of product Business image Cost for manufacturing th product WHat are the marketing objective 🤔 🏭 🎯

Channel of Distribution

The pathway a product reach the consumer or targeted customer 🛤️ 🚚 🗺️

Producer

A business that make and supply goods and services 🏭 👷 📦

Wholesaler

A business that buys in bulk from producer and sells them either directly or distribute it out through the supply chain 🏢 📦 🚚

Retailer

A shop or outlet that specifically sells G S to the final customer 🏪 🛍️ 🛒

Consumer

The final destination in the channel of distribution 🧍 🛍️ 🏠

Channel of distribution Producer Customer

Higher profit margins Control pricing USP Keep full prof Keep full control of Marketing Mix Keep direct contact Increase consumer relationship High delivery cost Pay storage cost Pay their own advertisement cost 🏭 🧍 💰

Channel of distribution Producer Retailer Consumer

Saves time and effort Increase potential change Retailer are more accessible Better advertising Small profit margins Lose control 🏭 🏪 🧍

Channel of distribution Producer Wholesaler Retailer Consumer

Buys in bulk Saves time cost effort low profit margins expect discounts Less control 🏭 🏢 🏪 🧍

Channel of distribution Producer Agent Wholesaler Retailer

Specialist knowledge of market Saves time and effort searching for a distribution channel Takes some commission money 🏭 🤝 🏢 🏪

2 Way of choosing

1 Cost 2 Nature of the product 3 Location of the consumers 🤔 🗺️ 💵

Promotion

The activity of informing persuading potential customer of a business product 📢 🌟 🗣️

Benefits

Enhance brand image Persuading the customer to buy the new product Compete with rival companies Increase sales revenue Provide product info 📈 🏆 ℹ️

1 Methods of promotion 🛠️ 📢 🎯

1 Sales promotion

incentives and personal offers to increase sales repeat purchases 🎁 🎟️ 💰

Method of Sales promotion

1 Vouchers Customers are given a coupon or code offering money off a future purchase 2 Reward Schemes Customer earn points bonuses for rewards for regular purchases 3 Competitions Enter to win a prize often to advertise the product the business is selling 4 Special offers 🎟️ 🏆 🎁

2 Advertising Methods

Advertising the method of informing or persuading customers to buy their products 1 Social Media 2 Direct Targeted emails 3 leaflets 4 billboards 📱 📧 🪧

Marketing Budget

The amount of money made available by a business for marketing activities period of time 💰 📅 💵

2 E commerce 💻 🛒 🌐

E commerce

The marketing and the process of transaction through the internet Buying Selling 💻 🛒 🌐

For Businesses

Increased potential number of sales wider market Reduced cost for physical shops staffing renting and tangible costs Increased competition saturated environment Consumer may be more unwilling Because of less availability 🏢 📈 📉

For customers

Convenience Wider choice Lower prices Better information provided Risk of fraud Risk of hacking cyber security Lack of personal service Less customer protection conditions 🛒 💻 ⚠️

Marketing Strategy

A plan drawn out to achieve a certain business objective with a certain amount of resources 🗺️ 🎯 📈

Importance of different elements

Significant impact on consumer decision Business have to thoroughly consider element and cooperate the marketing mix to be suitable with Marketing strategy Marketing Mix change with PLC 🧩 🧠 📊

Deciding the marketing strategy through

Market budget stage in PLC Level of saturation characteristic of market geographical Market orientation 🤔 💰 🌍

2 Entering A New Market Advantages

Opportunity to increase sales revenue Brand recognition Diversification Spreading the risks ✅ 🌍 📈

2 Entering A New Market Disadvantages

More competition Resource availability Cultural differences Compete with local businesses Difference in legal controls Difference in resources cost Difference in Market Knowledge lack of it Difference in Logistics SC familiarity ❌ ⚔️ ⚠️

The purpose of legal controls

Protect customer force businesses to adopt ethical responsible marketing strategies Non compliance Penalties Each element have to respect current laws ⚖️ 🛡️ 👮

Effect of Legal controls False advertise of real content of products

Withdrawn of advert Advertise statements of apology to the public Fined Increase business cost 🚫 📰 💸

Effect of Legal controls Faulty goods

Need to meet minimum standards increase cost 🛠️ ⚠️ 📉

Effect of Legal controls Exploited at no competition market

Face legeal control anti trust competition laws Reduce brand image reduce sales 📉 ⚖️ 📉