marketing

Market

Where buyers and sellers meet to exchange goods and services

Market classification - size

mass market

niche market

Market classification - goods and services sold

commercial market

consumer market

Market classification - location

international

national

local

Market classification - characteristics

age

product

geographical area

What does market-oriented mean?

A business that conducts market research to understand consumer needs before developing and producing a product.

Why is market research important for businesses?

To identify consumer wants and needs before creating a product.

Product Oriented

a business produces the product then tries to find a market for it.

reasons why businesses market their goods/services

increase market share

improve company image

keep consumers involved

increase sales

Why can a market change over time?

Political - i.e. ULEZ

Economic - i.e. cost of living crisis

Social - i.e. stereotypes/equality

Technological - i.e. new machinery

Legal - i.e. EU

Environmental - i.e. ULEZ

effects of market change on a business

change business costs

change profit levels

change company image

change in demands

Market Segmentation

the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

Market segments

age

gender

income

location

lifestyle

Mass Marketing + example

Devising products with mass appeal and promoting them to all types of customer i.e. Ford

What is niche marketing?

Tailoring a product to a particular type of customer in a small market

Example of niche marketing

Rolls Royce

Advantage of mass marketing: Large number of sales

This advantage allows a business to reach a wide audience and generate high sales volume.

Advantage of mass marketing: Economies of scale

This benefit refers to cost advantages that businesses can achieve by producing in large quantities.

Advantage of mass marketing: Spreading risks

By selling multiple products in the mass market, risks can be diversified and minimized across the product portfolio.

Advantage of mass marketing: Growth opportunities

Mass marketing provides businesses with the potential for significant growth by tapping into large market segments.

disadvantages of mass marketing

problems of product differentiation

need to develop more products

Advantage of niche marketing: Safe haven for small companies

Small companies can thrive in a specialized market segment, away from intense competition.

Advantage of niche marketing: Providing a market for niche product

Niche markets can be a valuable source of customers for products that are not mainstream.

Advantage of niche marketing: Assisting large firms in stagnant markets

Niche marketing can rejuvenate sales for large companies facing market saturation or decline.

disadvantages of niche marketing

-changes in demand

-market entry

-lower potential products

-hard to stop large firms from entering

What is a test market and why are they used?

An isolated geographic area used to introduce and test the effectiveness of a product, ad campaign, or promo campaign, prior to a national rollout.

Marketing

Finding the needs of consumers ad demonstrating how a business fulfils those needs in a way that increases sales

What type of information should a business collect in research?

Whether customers will buy the product/service

How often customers will buy the product

Price that consumers are willing to pay

Type of customers

When the product will be sold

Primary(field) research

original research conducted for a specific marketing need/s

Secondary (desk) research

using already existing data

Target Market

The group of customers to whom a business aims to sell its products. (It may be other businesses as well as consumers)

Questionnaire

A question sheet filled in by the consumer

Examples of primary research

-interviews

-surveys/questionnaires

-observation

-consumer panels

-focus groups

-trial marketing

examples of secondary research

Official statistics, media reports, blogs, forums, letters, e-mails, profile pages, research studies, diaries

Advantages of Primary Research

1. Specific to the immediate data needs

2.Up to date

disadvantages of primary research

expensive and time consuming and large returns needed for accuracy

Advantages of Secondary Research

quicker and cheaper to collect

What is one disadvantage of secondary research related to relevance?

May not be precisely relevant to company needs

What is one disadvantage of secondary research related to timeliness?

Information may not be in date

What is one issue with the sources in secondary research?

Sources may not be original, and therefore usefulness is an issue

What is a concern regarding the methodologies in secondary research?

Methodologies for collecting data may not be appropriate

What is a potential problem with the data sources in secondary research?

Data sources may be biased

Open questions

Questions with no fixed answer/response and respondents can answer in any way they wish.

Advantages of open questions

collects qualitative data, detailed, descriptive, accurate

Disadvantages of open questions

harder to compare and analyse

different degrees of detail in response

closed questions

when people are asked to choose one answer from a list of possible responses

Advantages of closed questions

collects quantitative data, easy to analyse / compare

easier to complete thus a higher response rate

disadvantages of closed questions

oversimplistic

some responses not possible/not included

Interview

A question sheet filled in by the person conducting the interview

Advantages of questionnaires

- most efficient

- easy to collect

disadvantages of questionnaires

Time and Expense

May have low response rates

Not adaptive

Usually not open

Trials

Used to test whether customers will buy a product

Advantages of interviews

Offer detailed information

More accurate answers to sensitive questions as qualitative

can target consumer profile

Disadvantages of interviews

- Interviews can be unreliable, low in validity, and biased against a number of different groups.

- They are costly.

- They are subjective.

- small sample

- resource using(time consuming)

Advantages of Focus Groups

Can generate fresh and in depth ideas

Allow clients to observe their participants

May be directed at understanding a wide variety of issues

Allow fairly easy access to special respondent groups

Disadvantages of Focus Groups

Misuse

Misjudge

Moderation

Messy

Misrepresentation

Money

Time

Small Sample

advantages of trials

consumer reaction to product can be monitored

may save money long term(limited number of purchases)

disadvantages of trials

expensive

not all products suitable

Focus groups

Selected small groups of customers who give their opinions on products

Advantages of internal data

Can be accessed more quickly and easily and reliable and is less expensive

Disadvantages of internal data

small sample doesn't help with new products

advantages of newspapers/magazines

inexpensive and large sample

disadvantages of newspapers/magazines

may be inaccurate and not tailored/relevant

advantages of census

Completely accurate result easy to obtain and inexpensive

disadvantages of census

not tailored/relevant

once every 10 years

Advantages of websites

inexpensive and a large source of data

Disadvantages of websites

not tailored/relevant

may be inaccurate

small businesses are likely to use which type of research?

secondary

large businesses are likely to use which type of research?

primary

marketing research possible errors and inaccuracy

sampling error

questions misunderstood

data not relevant

biased figures/data

Ways of displaying data

Percentages

Tables

Frequency tables

Summary tables

Graphs

photographs

diagrams

charts

How market research can be used to identify and understand customer needs

potential target market

changes that may need to be made to the product or service

potential promotion methods

possible pricing strategies

where to sell product

potential changes in demand for an existing product

Census data

data collected by the government every ten years, questioning the entire population on their income, occupations etc.

Internal data

data already within a business based on past performance.

Qualitative data

Data based on opinions of those being asked

Quantitative data

Data collected that is based on facts or numbers (usually easier to analyse than qualitative data)

Random Sample

Every potential respondent has an equal chance of being chosen

Quota sample

Sample is representative of the consumer profile/target market

SWOT analysis

strengths, weaknesses, opportunities, threats

Strengths

Positive factors compared to competitors

Weaknesses

Negative factors compared to competitors

Opportunities

Potential factors that can benefit the business

Threats

Potential factors that can cause problems for the business

Advantages of SWOT analysis

highlights market changes

compares business position to the market

analysis to base decisions

encourages businesses to develop and build upon existing strengths

helps develop a business strategy in relation to its aim and objectives

product differentiation

a positioning strategy that some firms use to distinguish their products from those of competitors

ways product differentiation can be achieved

desiUngn

invention

innovation

size

colour

style

quality

packaging

guarantees

logo

name

fairtrades

Unique selling point

the special feature of a product that sets it apart from competitors' products

Packaging Functions

containing and protecting products, promoting products, facilitating storage, use, and convenience, facilitating recycling and reducing environmental damage

Brand name functions

to establish brand loyalty

to be distinguishable

enables promotion to highlight the qualities of products to the consumers

trade mark

a symbol, word, or words legally registered or established by use as representing a company or product.

research and development

a set of activities intended to identify new ideas that have the potential to result in new goods and services

Customer service

Activities and benefits provided by a business to its customers to create goodwill and customer satisfaction

Product range

Similar products a business makes that compete with one another

4 Ps of the Marketing Mix

Product, Price, Place, Promotion

Competitor Pricing

Price is set based on prices charged by competitor businesses for a similar product

Cost-plus pricing

Adds a % of profit to the total costs of making a product - gives the selling price

Penetration pricing

Price is set lower than the competitors - allows new businesses to break into a market and is short-term

skimming pricing

High price is set in a market with little/no competition (allows high profit margin)

promotional pricing

Reducing prices to boost sales or to sell of old stock (e.g. sales, buy 1 get 1 free)

Loss leaders

Low prices encourage customers to buy fully-priced products