Business Management Unit 4- Marketing

Define Marketing

Marketing is a management process involved in identifying anticipated needs and wants of customers.

Define Operations Management

The management of systems or processes that create goods and/or provide services

Define Finance

The function in a business that acquires funds for a firm and manages them within the firm.

Define Human Resources

The management of people inside and outside of the business.

Define intangibility

The inability of services to be touched, seen, tasted, heard, or felt in the same manner that goods can be sensed. Some examples of intangible assets include: patents, copyrights, brand recognition and good will.

Define inseparability

Services cannot be separated from their providers

Define Hetrogeneity

The variation of one service to another, or variation from day-to-day or from customer to customer. This makes it hard for the firm to standardize the quality of its service. e.g. A haircut

Define Perishability

The way in which service capacity cannot be stored for sale in the future

Define Product Strategy

The big picture context in terms of what the product will become. The design of the product, how it will look, the features

Define Price strategy

Pricing strategy when selling a product or service to maximise profit

Define Promotional strategy

Strategies used to gain exposure for a business

Define Place strategy

How or where a firm places it's product/service.

Define market orientation

Focus is on satisfying customer needs and wants while meeting objectives

Define product orientation

Focus on innovative products that customers may not want.

Advantages and drawbacks of being market orientated

Advantages: Greater flexibility, lower risk
Drawbacks: Can be expensive to find out what customers want, due to uncertainty of the future there is no guarantee that the product will succeed, and it is more competitive

Advantages and drawbacks of being product orientated

Advantages: Innovative, less competition, They may be willing to pay a higher price
Drawbacks: Needs of the market are ignored and can be more uncertain/risky

Define commercial marketing

The use of marketing strategies to meet the needs and wants of customers in a profitable way.

Define social marketing

The planning and implementation of programs designed to bring about social change using concepts from commercial marketing

Define market size

The physical number of Buyers and Sellers of a product or service that are in a particular market.

Define customer base

Is the group of customers who repeatedly purchase the goods or services of a business.

Define barriers to entry

conditions that prevent new companies from entering an industry

Define competition

The struggle among producers for the dollars of consumers

Define Market growth rate

The rate at which the demand increases. The best indicator of this is market sales

Equation for market share?

(Firm's sale revenue/Industry's sale revenue)x100

Define market concentration

Measures the degree of competition that exists with a market by calculating the market shares of the largest few firms in the industry.

State the marketing objectives of a for-profit organisation

Increased sale revenue
Higher market share
Increased market leadership
Improved product and brand awareness
Developing new products
Enhanced brand perception

State the marketing objectives of a non-profit organization

To build membership(support) and to connect with new donors
To generate awareness
To improve brand recognition
To create positive attention
To demonstrate the value of the NPO to the local community or society in general

State some variables that can cause a business to change their marketing strategies

Changing consumers taste(trends)
Shorter product life-cycles(Updating tech)
Internet and mobile technologies(innovation)
Competitive rivalry
Globalisation(homogenisation of culture)

Define Marketing planning

The systematic process of devising marketing objectives and appropriate marketing strategies to achieve these goals.

What does the typical marketing planning process involve?

Marketing audit: an examination of the current climate in which the business operates. Market research is integral to this investigation.
Marketing objectives: The marketing audit enables the firm to set marketing goals and targets
Marketing strategies: The plan and use of the marketing mix to achieve marketing objectives
Monitoring and review: A continual process of checking and monitoring that targets are being met. Hence, marketing strategies might need to be adjusted accordingly.
Evaluation: An examination of the extent to which the firm has succeeded in achieving it's marketing objectives. This aids the decision-making and subsequent rounds of marketing planning.

Define producer products

Are industrial products sold to other businesses to further the production process, such as raw materials, components and machinery.

Define consumer products

Are sold to the end user. These products can be further classified as convenience products.

Define Product

The physical good or intangible service.

Define Price

The amount customers pay for a particular good or service.

Define Place

The methods of distributing products to customers.

Define Promotion

The strategies used to attract customers to buy a firm's products.

What is the marketing mix?

Product, Price, Place, Promotion

Above the line promotion

Targeted towards a larger target market. Some examples can include: television, newspapers, radio, and other forms of media

Below the line promotion

Targeted to a more focused target market. Some examples include: Sales promotions, coupons, direct mail

Define market share

the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself

Define market leadership

the position of a company with the largest market share or highest profitability margin in a given market

Define product positioning

Product positioning is the process marketers use to determine how to best communicate their products' attributes to their target customers based on customer needs, competitive pressures, available communication channels and carefully crafted key messages.

Define market development

Involves selling existing products in new markets, such as through the use of international marketing or e-commerce

Define product development

Involves selling new products in existing markets. It is a common marketing strategy for businesses operating in high tech industries

Define diversification

Involves marketing new products in new markets. This high-risk strategy only tends to be used by financially stable businesses pursuing growth and evolution.

Define product innovation

refers to the objective of launching an original or new product onto the market. It can help a firm to gain a first-mover advantage in establishing itself in the market.

Define people( as an additional P)

The personnel used in the provision of service. For example managers, cleaners, concierge, porters, cashiers, security guards, chefs and waiters.

Define physical environment

The tangible aspects of a service. For example clean lobby, nice decor and good quality facilities.

Define process

The way in which a service is provided or delivered. For example payment methods, waiting(queuing) times and after-sales care.

Identify things which limit the effectiveness of marketing strategies

Finance, cost of production, the size and status of a firm, social issues, time lags, actions and reactions of competition, the political and legal environment

Define target markets

segments toward which a firm directs it's marketing efforts

Define market segment

a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

Reasons for segmenting a market

To better understand customers, higher sales, growth opportunities, support for product differentiation

Demographic segmentation

Age, Gender, Race, Marital status, Religion, Language, Income and socio-economic class

Geographic segmentation

the grouping of consumers on the basis of where they live

Psychographic segmentation

Hobbies, interests, values, religion, status, culture

What does DAMAS stand for?

An acronym for assessing successful market segmentation.
Differential- Segments must be unique and respond to different marketing mixes.
Actionable- Businesses must be able to provide suitable products for each market segment.
Measurable- The size and purchasing power of each market segment must be quantifiable
Accessible- The business and/or its products must reach customers in cost-effective way.
Substantial- Each market segment must be large enough to generate profits.

Niche marketing

Targets a specific and well-defined market segment.

Mass marketing

Undifferentiated marketing. This is a strategy that ignores targeting individual market segments

Advantages of niche marketing

Small section, less competition, possible to dominate the market, specific, can charge more

Disadvantages of niche marketing

Small target market, may cost more, can't mass produce, not everyone can afford, specialized workers needed

Advantages of mass marketing

Large target market, cost less, maximise sales volume, cost less for market research, standardized workers

Disadvantages of mass marketing

Competition, more start up capital needed, competitive pricing, less flexible, must be innovative, more advertising needed to stand out

Draw a product positioning map

Identify the purpose of a product positioning map

A visual tool that reveals customer perceptions of a product or brand in relation to others in the market.

Define unique selling point (USP)

Any aspect of a business, product or brand that makes it stand out from those offered by competitors. For example: Being the only firm in the local area to supply a certain good or service, being the first business to provide a certain product, Having a reputation for being the 'best' in the market, having a reputation for being the lowest cost provider, having a popular business slogan.

Define differentiation

The act of distinguishing a business or its product from rivals in the industry, to create the perception among customers that . the firm's product is unique or special, so adds value compared to substitute products from rival businesses.

Advantages of differentiation

Price advantages, brand recognition and loyalty, distribution advantages

Disadvantages of differentiation

Can be expensive, can not take advantage of economies of scale, excessive differentiation can drain a firm's resources

Define sales forecasting

A quantitative management technique used to predict a firm's level of sales over a given time period.

Define extrapolation

Identifies trends by using past data and extending to predict future sales

Define time series analysis

Attempts to predict sale levels by identifying the underlying trend from a sequence of actual sales figures recorded at regular intervals

Identify the 3 main elements of a time series analysis

Seasonal variations, Cyclical variations(recessions and booms), random variations(unexpected factors that will slow down or boost sales)

Identify the statistical techniques used in sales forecasting

Mean, Median, Mode, Range, Standard deviation

Define moving averages

A more accurate method of identifying trends than mean averages. To conduct a moving average the average of the three most recent revenue values must be taken.

Advantages of sales forecasting

Improved working capital and cashflow, help to ensure the correct level of stock, improved productive efficiency, secure external sources of finance, improved budgeting

Disadvantages of sales forecasting

Limited information, inaccurate predictions, garbage in garbage out(If data is outdated, irrelevant or biased predictions will not be good), does not account for external influences

Define primary research

Involves gathering new data first-hand for a specific person

Define a self-completed survey

Completed by a sample of people. The information can help to identify problems,trends and suggestions for improvements.

Define personal surveys

These are conducted face-to-face, rather like an interview. The interviewer can address any questions which may arise from the questionnaire.

Define telephone surveys

These are similar to telephone surveys however through the use of phones.

Define online surveys

Things such as google forms can be used to formulate a survey. This can then be sent via email to the target market.

Define postal surveys

These are sent to people's home or office to complete in their own time. However, people might treat the surveys as junk mail and just ignore them.

Advantages of primary research

produces relevant information, the information is up to date, confidential and unique

Disadvantages of primary research

can be time consuming, costly, faults din market research can make the results biased and therefore the validity could be questioned

Define interviews

This is a one-to-one discussion between an interviewer and interviewees.

Define focus groups

This involves forming small discussion groups in which and invigilator will prompt participants to discuss certain questions.

Define observations

This involves watching how people behave respond in different situations. It can be done under controlled conditions or as a real-life situations.

Define secondary research

Involves the collection of second-hand data and information that already exists.

Identify secondary research sources

Academic journals, government publications, the general media(newspapers, journals, documentaries, books, internet)

Advantages of secondary research

relatively inexpensive, rapid, source of comparative data, large sample size, reliable

Disadvantages of secondary research

rarely fits needs, dated, may only partially provide the information that is needed, widely available to competitors

Evaluate the ethical considerations of market research

Damage- Market researchers must protect the people in their samples by ensuring the information collected is never used in such a way to harm them.
Deceitful- market researchers need to be trustworthy when they obtain usable data for marketing purposes. Acting ethically in the research process is a key way to encourage trust.
Deceptive- Deceptive practices and misleading methods to access and gather data about customers is an ethical problem.
Disclosure- A major ethical issue involoved in market research is the potential invasion of privacy and the breach of confidentiality. Researcher have the ability to collect, store match and share (or sell) customer information that can infringe a customer's privacy rights.
Detachment- Market researchers need to be detached from personal biases and be objective in their work.

Define qualitative market research

This involves getting non-numerical answers and opinions from respondents.

Define quantitative market research

This relies on a much larger number of responses to get factual and measurable information rather than people's opinions.

Advantages of qualitative research

When exploring the driving and restraining forces it is better than quantitative research, the information can be very rich, can be inexpensive due to the smaller amount of respondents, with one-to-one interviews participants are not pressured to conform to a certain view or opinion

Disadvantages of qualitative Research

Due to small sample size the results can not be generalized to a whole population, it can be very time consuming, there may be a high cost associated with hiring skilled interviewers, Interviewer bias may be introduced as there is room for interpretation

Define sampling

Gathering a group of participants from the population

Define quota sampling

A certain number of people(known as a quota) from different market segments is selected. The sample is grouped according to shared characteristics such as age, gender or occupation.

Advantages of quota sampling

Relatively representative sample, can be obtained quickly, more reliable than simply asking anyone on a random sample basis