Business Management Marketing Unit P1 Test

U4.1, U4.2, U4.4"

Whats the role of marketing

Marketing is the management process of identifying, anticipating and satisfying customer needs and wants.

Define Market Share

• Market share is the percentage of total sales in a market that a business, product, or brand has.

• It shows how much of the market a firm controls in comparison to its competitors

• It can be measured as sales value and sales volume

Define Market Size

• Market size is the total number of potential customers in a market, or the total revenue those customers could generate.

• shows the overall opportunity available for a product or service in a given market

• measured by the total sales volume or total market value over a specific time period, usually one year

Define Market Growth

• the increase in the total size of a market over a period of time, usually shown as a percentage

• measured by changes in sales revenue, sales volume, or the number of customers

• shows whether a market is expanding, which can create more opportunities for businesses

Explain Market Leadership and why it matters

• Market leadership is when a business has the largest market share or is the most dominant company in its market.

• It matters because market leaders often have stronger brand recognition, customer loyalty, and the power to influence prices, trends, and industry standards.

• It can also bring cost advantages from economies of scale, which can increase profitability and make it harder for rivals to compete.

• being a market leader helps a firm grow, stay competitive, and shape the direction of the market over time

Define Market Orientation and describe it

• approach to marketing focusing on meeting specific demands (desires & needs) of customers

• focus on making products that they can sell rather than selling products they make

Define and Describe Product Orientation

• approach to marketing

• focus on making products a business knows how to make well, rather than primary concentration on the needs and desires

• Prioritises Research and development over market research

Calculate Market Share

Market Share = (Company Sales ÷ Total Market Sales) × 100

Define Market Research

Define the promotional mix

as the combination of advertising, sales promotion, public relations, direct marketing, and personal selling

explain the purpose of promotion: informing, persuading, and reminding customers about products

• Informing: Educates customers about product features, benefits, availability, price, and new offerings to create awareness and understanding.

• Persuading: Influences attitudes and buying decisions by highlighting superiority, value, or emotional appeal to drive preference over competitors.

• Reminding: Reinforces brand recall and loyalty, prompting repeat purchases and keeping the product top-of-mind in a crowded market.

describe advertising

Paid, non-personal communication to promote products/services via media.

Highlights benefits to influence buying decisions.

Increases brand recall and drives sales/actions.

describe sales promotion

Short-term incentives to boost immediate sales.

Define Marketing

• the art of determining which goods and services meet customer needs and wants in a sustainable way.

• Anticipating, identifying, and satisfying market demand.

• Aiming to generate profit through meeting these needs and wants.

Define Needs

• things people need in order to survive

  • necessities

Define Wants

• human desires

• marketing opportunity for businesses as humans have unlimited wants

Describe the role of marketing planning

• plan of action with consideration of all element of marketing mix

• identify the needs and wants of customers and devise approaches to meet these

• shows the marketing objectives and marketing strategy; increasing the firm’s overal marketing chance of success

Define Marketing Objectives

• goals that give marketing teams a sense of purpose and direction

• helps senior managers to hold department accountable for their contribution to the overall organisation

• However it depends on the type of business under consideration

  • For profit: achieve improved profitability

  • Non profit: promote a particular social cause

Define Marketing strategies

• different long-term actions used by organisation to achieve its marketing goals

• marketing plan is prerequisite to formulating marketing strategies to achieve its goals

Outline the main elements of a marketing plan

• executive summary outlining main points of mrkt. plan

• situational analysis oulining internal and external factors affecting org.

• market analysis outlining intensity of competition in market

• marketing objectives (SMART goals)

• market research

• identification of target markets and market segments

• marketing mix (4Ps) - price, place, product, promotion

• marketing strategies

• marketing budgets

• anticipated difficulties and potential solutions

needs to be flexible enough to adapt to change

Pros of Marketing plan

• helps managers to formulate more effective marketing strategies to meet the needs and wants of firm’s customers

• better sense of direction and purpose —> improve employee motivation + labour productivity

• helps marketers identify potential problems + plan appropriate solutions to them

  • inform and improve financial decision-making

Cons of Marketing plan

• time and money are used to ensure the marketing plans are prepared in a comprehensive way (Opportunity cost)

• might not be realistic for smaller firms to use due to limited marketing budgets

  • even the best plans are only a guide and can become outdated very quickly

Define Segmentation

• process of dividing potential customers into groups with similar characteristics

• enables targeted marketing - tailor to 7Ps to fit specific customer groups

• improves effectiveness of marketing

  • such as improved customer satisfaction, loyalty and profitability while reducing wasted marketing resources

Define targeting

• Targeting is the process of selecting relevant market segments after segmentation

• Businesses use targeting to focus their marketing on people most likely to buy their product or service.

• maximises the efficiency + ROI

Define Positioning

• process of presenting brand/product in a specific way in order to create the desired costumer perception

• communicating USP

• differentiating competitively, enabling niche targeting and gap identification in perceptual maps

Define Market segment

• distinct subgroup of customers

• similar characteristics and needs & wants

• this segment is often the group of customers which the business will want to put its marketing efforts on

Discuss how positioning can help a business gain a competitive advantage.

• Differentiation: Unique identity beats competitors

• Loyalty: Targets needs, builds repeat business

• Pricing Power: Justifies premiums, boosts margins

• Marketing Efficiency: Focused efforts raise ROI

Analyse why a business would choose a specific target market.

• Resource Focus: Targets spending on receptive customers only

• Tailored Messaging: Boosts relevance and conversions

• Competitive Edge: Builds loyalty via niche mastery

• Growth Alignment: Matches capabilities to high-potential segments

Whats commercial marketing?

creating, developing, and exchanging goods and services that customers need and want

Whats social marketing?

The use of commercial marketing concepts and tools in programs designed to influence individuals' behavior to improve their well-being and that of society.

What are different ways to segment a market?

• Demographic

• Geographic

• Psychographic

• Behavioral

Define target market

• group of customers a business will want to put all of tis marketing efforts

Purpose and outline of Customer profile

• outline of “perfect customer” by listing key characteristics

• Knowing consumer profile is important for a business to determine an appropriate marketing mix for the business

• helps business to know whether the product and promotion fits target market

Whats a position map?

• where business is relative to competitor in terms of price and quality

• always constructed from the perspective of customers

Define Niche market

• targets specific and well-defined market segment

• narrow, smaller than most markets

• small fraction of a larger market

• specialized processes to fill the niche

• more specific in terms of features + quality of features

Cons of Niche Marketing

• limited costumer base due to focus

• fewer opportunities to exploit economies of scale

• successful niche markets can attract new entrants into the industry, leading to more competition

Pros of Niche Marketing

• better marketing focus —> put all resources into niche market

• able to charge higher prices

• highly specialized in meeting needs and wants

  • build customer rapport & relationship / loyalty —> consistent stream of income

Define Mass Market

• targets multiple market segments to maximise sales

• products are standardized and produced in large volumes

Pros of Mass Market

• EOS

• able to use a single marketing campaign to address entire market

• large costumer base

Cons of Mass Marketing

• high entry barriers

• heavy competition

• lacks focus and may not satisfy individual wants or needs

Define USP

• the attribute or characteristic that makes a business special

• It differentiates a business from competition in the minds of costumers

• Allows a business to gain a competitive advantage and possibly allows them to charge premium prices

Cons of USP

• substantial money in R&D

• may not attract large market or specific target of USP

• successful USP may be copied, tweaked or enhanced

How organisations differentiate themselves

• process of distinguishing an organisation’s products from those of other firms in the same industry

• without effective product differentiation, costumers do not gain a perception that the organization’s product is different, distinctive / unique

Pros of differentiation

• charge higher prices

• creation of brand awareness and helps customer loyalty

• improve product placement as more distributors choose to sell their products

• brand recognition & brand loyalty

  • more stable stream of revenue for business

Cons of differentiation

• costly —> differentiation needs skilled workers and expertise

• EOS cannot be exploited

• cost of production is higher hence GP is lower

• unnecessary competition

• prevention of new entrants entering markets - limiting choice and price competitiveness for customers in markets

• confuse customers

Define Market research

• marketing activities designed to discover the opinions, beliefs and preferences of potential and existing customers

• identify the pain pints & gaps in the market

• develop products that are able to meet the customer’s needs and wants

• 2 Categories: Primary & Secondary

Define Primary Market Research

• Primary market research is the collection of new, first-hand data directly from consumers.

• It is done by the business itself using methods like surveys, interviews, and focus groups.

• It is useful because the data is specific to the business’s needs and target market.

State 4 methods of primary market research

• Surveys

• Interviews

• Focus Groups

• Observations

Define Secondary Market research

• collection of second-hand data and information that already exists

• also known as desk research - data done by a third party outside of the business

Define the term target market

• a specific group of potential customers a business aims to reach with its products or services

• This group may share common characteristics that make them more likely to be interested in and purchase from the business