Marketing

marketing

process of identifying and satisfying customer needs profitably

exchange

occurs when someone gives up something in return for something in return for something else

customer

someone who buys a product from a business

consumer

someone that uses goods and services produced by businesses

5 ways to identify needs and wants with adv and dis

* Interviews:A-no pressure,specific questions D-time consuming,smaller respondent
* Questionnaire:A-detailed feedback,easy to collect D-survey overload,time consuming
* Complaint procedure:A-easy to see improvements needed,identify problems D-only 1 person’s perceptions,not all unhappy customers complain
* Suggestion box:A-anonymous,good representation D-time consuming,not many respond
* Focus groups: A-select who speak to,find out more as open discussion D-not truthful(observer interference),small sample size

importance of identifying customers

* Increase sales
* selecting right marketing mix
* being competitive
* avoiding costly mistakes

what do people think about before launching new product

size and growth of market

market growth equation

change in market size/original market size x 100

market segmentation

classification of customers or potential customers into groups or sub-groups (market segments),each of which responds differently to different products or marketing approach

types of segmentation

age,gender,income,location,lifestyle,culture

benefits of market segmentation

develop products that meet needs of customer more closely,reach customer more precisely(better advertising),sets appropriate pricing levels,avoids waster-products are not made that people dont want

when will a business target segments

it can make high enough return,compete effectively,covers opportunity cost-no better alternatives

market research

process of gathering,analysing and processing data relevant to marketing decisions

before making decisions businesses would want to know what

demand,market share,competition,target market

market

place where buyers and sellers meet to exchange goods and services for money

size of market

how big it is in terms of volume or value

sales volume

units sold

sales value

refers to size of market in terms of currency

market growth

measures change in the size of a market between 2 points

market share

measures what % of the total market a business sales take up

2 types of market research

primary/field research-collect new information

secondary/desk research-business collect information that already exists

why conduct market research

identify gaps in market,understand customers and competition better,get information to make business decisions

quantitative data

data in form of numbers can be converted in graphs,tables etc

qualitative data

data to do with feelings or opinions

primary research adv and dis

a-up to date,different opinions,specific answers relevant to business,detailed information

d-small sample space,time consuming,people might lie,expensive

secondary research adv and dis

a-easier to find,quicker,cheaper

d-not specific/relevant to business,outdated,inaccurate

questionnaires

to find out lots of customers opinions so that charts can be drawn up and decisions

interviews

to find out specific information from customers by asking questions

focus groups

to find out lot’s of information about the way the customers may use a new product

newspapers

to read articles about recent product innovation in the industry by other products

magazines

to find out what print media advertising the competition are using

websistes

to find out what other businesses in the industry are doing with their e-commerce

product

item offered for sale.it can be good or service.every good is made at a cost and sold at price

benefits and risks of developing new products

B-give customers something clean and new,fill gap in market,take advantage of new technology,gain new customers,outsmart competitors,even out breaks and troughs un demand,develop business reputation as innovator

R-many new products fail,new products require investment,long time between development and return on investment

product design-image

images how customers view the product/how product presents to customer,up to date and positive image increases sales,businesses have to continue research and development to produce new products

product differentation

ways in which business makes their product/services stand out

1\.Branding-refers to way business is identified by customers

2\.USP-differentiates business from competition

3\.location-business locate on a busy spot,high street or beautiful location to attract customers

4\.unique design

5\.good customer service

6\.good quality-attracts customer and are willing to pay more

7\.wide product mix

product life cyclde

products will go through stages from development,introduction,growth,maturity and decline

some products last long and others decline in short life span

Research and development stage

product is designed and tested in market,research is done to ensure it meets customer needs,business is spending a lot of money and not earning revenue

introduction stage

product is introduced into the market,high advertising but low sales as product is new,advertising informs customers of the product

growth stage

revenue is increasing as more people are aware of product,business may continue advertising to maximise sales

maturity stage

sales slow down,intense competition,products might need to be discounted to maintain sales

decline stage

sales falling-product is old on market,product might be removed from market,heavy discounting to continue sales

extension strategies

ways in which a business prolongs life of a product-updating packaging,adding different features,change target market,advertising-reminds customer to buy product,price reduction-discounts encourage customers to buy

product portfolio

refers to all products/services sold by a business

boston matrix

marketing tool that helps managers/businesses to plan for a balanced product portfolio,has 2 dimensions:market share and market growth,businesses decide how much to spend advertising on which product

star products

have high market share and growth,in growth stage of product life cycle,need high advertising,should become cash cows in the future

question mark products

low market share and high market growth,introduction stage of product life cycle,need advertising as new to market,should become star in future

cash cow products

high market share but low market growth,maturity stage,good sellers that need little advertising,makes business high revenue,they need monitoring so they dont become dogs.Extension strategies will be needed if sales fall

dog products

low market share and growth,require no investment or advertising-in decline-not making money

uses of boston matrix

good starting point to review products and budgets,businesses decide whether they need to advertise more of other extension strategies or pull the product out

limitations of boston matrix

some products may be in between 2 sections,high market share might not always mean high revenue,too simple and does not consider other factors

pricing

process by which a business sets the selling price of its products or services a business will choose a specific pricing method as part of its identity

price

amount business sells goods/services to customer/consumer

costs

amount business pays to make products/service

price skimming

charges high prices at the introduction stage,have strong brand and USP,mostly in technology sector as businesses are trying to earn money back used on research and development,high demand justifies high price

price penetration

business set low prices as products are introduced into the market,usually there is already an established competitor in the market,business charge low price to gain customer and market share,used in food market to introduce new products/flavours

competitive pricing

businesses charge similar prices to the competition,customers choose businesses based on non-price factors-convenience,customer service,quality,extras

loss-leader pricing

businesses charge low prices for their main product and higher prices for additional products-cinema

cost-plus pricing

businesses calculate their costs and add a markup percentage of profit they want to earn

factors that influence pricing decisions

cost of making product/service-businesses aim to cover costs in order to break even,nature of market-growing markets charge higher price and declining markets charge lower price,level of competition-businesses in competitive markets charge lower prices compared to non-competitive markets

demand

how much of a prouct customers are willing and able to buy at given price when demand is high the business can charge high prices

promotion

process in marketing of reminding,informing or persuading customers to buy a product or serviceas

advertising

promoting through mass media

newspaper

printed media a-permenant and can be seen for long time,good to put coupons,wide reach,response can be measured d-not suitable for younger customers,decline in readers as more online,can be expensive

magazine

glossy print a-attractive to cutomers,kept for long time,used to target specifiv market d-selective reader so not wide reach,long gap between design and print so must remain relevant,more expensive than newspaper

television

a-wide reach,cost effective- low cost per person reached d-very expensive,customers fast forward and miss adverts

internet

advertising online a-widereach,cost efficient d-can easil be copied,ignored easily

billboard

a-harder to ignore,some commuters can see adverts several times and remember d-has to be short and precise,up for 3 months-must remain relevant

press release

ways in which businesses improve/promote goodwill with members of the public d-businesses have less control over message spread e.g.press release

sales promotion

promotion at point of sale or transaction e.g 241 a-sell more d-lose money

sponsorship

positive association between business and a celebrity,team or program a-wide reach,positive image d-business image can be damaged

social media

promotion on apps a-quick,easy,cheap,link to webiste,advertise new product d-time and money needs to be spent advertising product

promotional mix

different types of promotion a business uses advertising,PR,social media,sponsorship,sales promotion

factors affecting promotional mix

finance available,competitor actions,nature of product/service,nature of market,target market

reasons for promotion

infrorm cutomers of new products,remind customers to buy existing produtc,persuade customers to buy product,create/increase sales

place

refers to all the location customers can access business products can be physical or onlince

factors affecting choice of place

businesses aim for products to get as many customers as possible,must be cost-effective so businesses can make a profit,where customers can easily access the product

distribution channel

manafacturer-customer

manafacturer-wholeslaer-customer

manafacturer-retailer-customer

manafacturer-wholesaler-retailer-customer

manafacturer

business that makes the product

wholesaler

businesses that buy from manafacturer in bulk and sell to retailers/consumers in bulk also known as cash and carry

retailers

buy in bulk from manafacturers or wholesellers and sell to customer in units they will add a mark up to make a profit

independent retailers

retailers not part of a large chain,smaller businesses selling to a niche market,unique products and compete on non-price factors

adv and dis of being a retailer

a-shopping is enjoyable for customers-high sales,customers can easily access products and by,customer can try products increasing satisfaction

d-crowds,queus put off customers,fixed openeing hours restricts cutomers,charge higher prrices to cover costs

telesales

when businesses sell to customers over the phone,can also be used for promotions,stay in touch with customers and generate leads