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