Fundamentals of Marketing and Market Strategies

Marketing

The management process involved in identifying, anticipating and satisfying consumer requirements profitably.

Market orientation

A firm that looks to the market to see what consumers need and want, being outward looking.

Product orientation

A firm that focuses on what they can make instead of making products that they can sell, being inward looking.

Advantage of market-oriented firms

Greater flexibility and lower risk due to tailoring products to meet consumer needs.

Disadvantages of market-oriented firms

Market research is needed, which can be expensive, and there is no guarantee that this approach will work.

Advantages of product-oriented firms

Quality can be assured and there is more control over operations.

Disadvantages of product-oriented firms

Needs of the market are generally ignored, leading to a high risk strategy with a high failure rate and high research and development costs.

Market share

The portion of a market controlled by a particular company or product.

Ways to increase market share

Brand promotion, product development, motivating and training the workforce, establishing intellectual property rights, and using more efficient channels of distribution.

Market growth rate

Calculated as (Current market size - Original market size) / Original market size x 100.

Example of market growth rate

Nursing homes market growth rate: City A: (175 - 50) / 50 x 100 = 250%; City B: (100 - 20) / 20 x 100 = 400%.

Marketing mix

Consists of Product, Price, Promotion, Place, People, Processes, and Physical evidence.

Product (in marketing mix)

What the business offers to customers, tailored to meet their needs and expectations.

Price (in marketing mix)

The amount charged for the product, determined by business objectives, production costs, and competition.

Promotion (in marketing mix)

Publicising the product, organization, or activity to boost sales or awareness, ensuring the message reaches the target market.

Place (in marketing mix)

How products are distributed from producers to consumers, considering direct sales or intermediaries.

People (in marketing mix)

Employees who interact with customers, their friendliness, helpfulness, and problem-solving abilities are crucial for customer satisfaction.

Processes (in marketing mix)

How services are delivered to customers, including ordering, payment, delivery, and feedback systems.

Physical evidence (in marketing mix)

Tangible aspects of the service experience, such as visuals and ambiance, impacting customer perception.

Quantitative research

Numeric and objective research.

Qualitative research

Research concerned with subjective phenomena.

Business plan

Sets out the goals and objectives and how they are to achieve its goals and objectives.

Revenue

The total income generated from sales, calculated as cost in break-even analysis.

Break-even analysis

A calculation to determine the sales volume at which total revenues equal total costs.

Marketing plans

A firm's marketing objectives and the marketing strategies used to achieve these objectives.

Marketing budget

The allocation of financial resources to various marketing activities.

Methods of marketing research

Techniques used to gather information about consumers' needs and preferences.

SMART marketing objectives

Specific, Measurable, Achievable, Relevant, and Time-bound goals for marketing efforts.

Market leadership

The position of the business having the largest market share in a given market.

Market segments

Distinct groups of customers with similar characteristics and similar wants and needs.

Segmentation

The process of categorising customers into distinct groups of people with similar characteristics and buying habits.

Demographic segmentation

Categorisation based on age, gender, family size, religion, ethnicity.

Geographic segmentation

Categorisation based on population density, location, and weather.

Psychographic segmentation

Categorisation based on lifestyle and values.

Socio-economic segmentation

Categorisation based on income and social class.

Targeting

The process of marketing to a specific target segment.

Target market

An identifiable group of customers that markets choose to focus their efforts on.

Niche market

A specialised market segment targeting specific needs or demographics.

Mass Market

A broad audience or consumer base, appealing to a wide range of people.

Position map

A graphical illustration of customer perception of a business, its products or brands in comparison to other firms.

Product Positioning

Shows how consumers perceive products relative to competitors.

Repositioning

Changing how a product or brand is perceived to adapt to consumer preferences or competitive pressures.

Premium brands

High-quality, high-priced products like iPhone, Bugatti, Rolex, and Hermes.

Cowboy brands

Low-quality, high-priced products, often seen as rip-offs.

Bargain brands

High-quality, low-priced products, used for short-term sales boosts.

Economy brands

Low-quality, low-priced brands, like Kmart products, budget airlines, and hostels.

Bargain products

Goods or services that are those perceived by customers to be of high quality but sold at a low price.

Consumer profiles

The demographic and psychographic characteristics of consumers in different market segments.

Cowboy products

Goods or services that are perceived by customers to be of low quality but high price.

Differentiation

The process of distinguishing an organization's products from those of other firms in the same industry.

Market

A market is the collective term for the buyers and sellers of a particular good or service.

Market segment

A distinct group of customers with similar characteristics, tastes, and preferences.

Market segmentation

The process of dividing a market for a product into smaller or distinct groups of customers in an effort to meet their specific desired needs and wants.

Marketing objectives

These are the goals or targets that help to give marketing teams (or marketing departments) a sense of purpose and direction.

Marketing plan

A document that shows the marketing objectives and marketing strategy of a particular business.

Marketing planning

The structured process of formulating marketing objectives and appropriate marketing strategies to achieve these goals.

Marketing strategies

The different long-term actions used by an organization to achieve its marketing goals.

Mass markets

A marketing approach that focuses on supplying to wide-ranging groups of customers in a market, without having split them into separate market segments, such as the markets for bottled water or breakfast cereal.

Niche markets

Marketing approach that focuses on supplying highly specialised products to cater for a small and select target market.

Objective

An objective is a target or goal a business organization strives to achieve.

Premium products

Goods or services that are perceived by customers to be of high quality and high price.

Product differentiation

Refers to the process by which firms attempt to make their goods and services different from those provided by other firms in the market in order to increase their own sales revenue.

Product position map

Also known as a perception map, this is a graphical illustration of customer perceptions of a business, its products, and/or brands in comparison to other firms in the industry.

Unique selling point (USP)

An exclusive feature or aspect of a business, its products or brands that makes it distinct from others in the same industry.

Stages of Product Life Cycle

Research and development, growth, maturity, decline

Ways to extend life cycle

1. New target market: Sales can increase if product is received well. 2. Redesign of Packaging: Can boost customer demand if done effectively. 3. Product Update: Can be developed quickly and at low cost. 4. Price Reduction: Attracts new consumers and can prevent current customers from switching. 5. New Promotional Strategies: Can boost sales with minimal investment.

Investment (capital expenditure)

Refers to buying fixed assets to support future profits but initially worsens cash flow.

Brand Awareness

The extent to which consumers are familiar with the distinctive qualities or image of a particular brand.

Brand Development

Example: Cadbury using its strong Dairy Milk brand to launch new varieties. Importance: Facilitates introduction of new products and boosts consumer trust.

Brand Loyalty

When customers repeatedly buy a brand despite alternatives. Example: Real Madrid fans purchasing merchandise.

Brand Value

The monetary worth of a brand's intellectual property and its ability to command premium pricing.

Roles of Packaging

1. Protection: Shields the product during transport. 2. Information: Provides product details. 3. Promotion: Highlights unique selling points. 4. Usability: Enhances user convenience.

Sustainability

Single-use plastics contribute to environmental waste; actions include rethinking materials and design to reduce waste.

International Mindedness

Rebranding Example: Facebook's name change to 'Meta' was misunderstood in some languages.

Brand

A brand is the registered name used to identify a product of a particular business organization.

Brand switching

This is the opposite of brand loyalty and occurs when consumers turn to alternative brands, mainly because the original brand has lost some of its former appeal.

Branding

This is the practice of using an exclusive name (brand), symbol, or design which identifies a specific product or business.

Consumer goods

These are products bought for personal consumption, rather than for business use, e.g., home appliances, furniture, food and drink, and house plants.

Customer loyalty schemes

These are marketing strategies used to attract customers to remain devoted to a brand or business by offering rewards and other incentives for repeat purchases.

Decline

This is the final phase in the product life cycle when sales revenue continually falls, leading to the eventual withdrawal of the product from the market.

Extension strategies

Marketing approaches used to prolong or lengthen a product's life cycle, e.g., price reductions or new promotional strategies.

First mover advantage

This term describes a business being first in the market to launch a successful product, thereby gaining market share and establishing a loyal customer base.

Genericized brands

These are brand names that become synonymous with the name of the product itself due to their popularity, e.g., AstroTurf, Band-Aid, Frisbee, Sellotape, and Yo-Yo.

Global brands

These are highly recognized brands in overseas markets. Firms use a unified approach to their global brand strategy to increase its brand recognition as well as to support its brand awareness and brand development in new markets.

Growth

This is a phase in the product life cycle when sales revenue increases as the product becomes established in the market and the business gains market share.

Innovators

The name given to the group of consumers who are the first to own a certain product, usually due to the prestige associated with being first and/or customer loyalty to a particular brand or product.

Launch

This is a phase in the product life cycle that involves a product being introduced in the market. Most customers are not aware of the new product, so advertising and promotion are needed to boost and sustain sales.

Logo

A form of branding that uses a visual symbol to represent a business, brand, or product.

Marketing myopia

When a business focuses on selling products instead of meeting customer needs.

Maturity

This is a phase in the product life cycle when sales revenue peaks or plateaus, as sales growth slows down and the business competes with its rivals in the market.

Multi-brand strategy

This marketing strategy involves a business developing more than one brand as part of its overall product strategy.

Producer goods

These are products purchased by a business for its commercial use, rather than for private consumption, e.g., machinery, equipment, tools, fixtures and fittings, and office stationery.

Product

This refers to both physical (goods) and non-physical (services) items sold by a business or purchased by a customer.

Product life cycle (PLC)

Marketing theory showing the different stages that most products go through from their research and development (R&D) stage to their final removal from the market.

Product portfolio

The range and mix of products sold by a business, including the various brands of all the products it owns.

Prototype

This is a trial product, used during the pre-launch stage of the product life cycle, to evaluate the potential commercial success of the product.

Research and development

This is the first phase in the product life cycle which involves investigating, designing, and developing a product before it is launched in the market.

Services

Intangible products or non-physical products offered by a business, e.g., education, entertainment, healthcare, as well as travel and tourism.

Slogans

These are corporate catchphrases used as a marketing strategy to signify or represent a brand, product, or business in a favourable and memorable way.

Test marketing

This is part of the pre-launch stage in a product's life cycle, when a business trials a new product with a small number of customers, usually in a specific geographical location prior to the official launch.