marketing management (unit 3)✅

Marketing objective

Goals set by a business when promoting its products or services to potential customers that should be achieved within a given time frame

What should marketing objectives include

1. Market size

2. Market share

3. Sales and market growth

4. Sales volume and value

5. Brand loyalty

Value of marketing objectives

1. Provides focus and direction for the marketing activities and strategy of the business

2. Ensures that the resources are used effectively

3. Motivates and aligns the people working within marketing

Primary research

Data collected first hand for a specific research purpose

Secondary research

Data that already exists and has been collected for a different purpose by someone else

Quantitative data

Based on numbers, easy to analyse, however there is no in-depth information

Qualitative data

Based on opinions, more in depth but harder to analyse

Measures of marketing

1. Market size

2. Market growth

3. Market share

Market size

Number of potential customers that could buy from your business

Market growth

Increase in the sales volume of a product over time

Market share

The proportion of total sales in an industry controlled by a particular business

Sampling

Gathering data from a sample of respondents, the results of which should be representative

Methods of sampling

1. Random

2. Quota

3. Stratified

Correlation

Looks at the strength of a relationship between two variables, usually on a scatter diagram

3 types of correlation

1. Positive

2. Negative

3. No correlation

Confidence interval

Gives the percentage probability that an estimated range of possible values in fact includes the actual value being estimated

Extrapolation

Uses trends established from historical data to forecast the future

Price elasticity of demand

Measures the extent to which the quantity demanded is affected by a change in price

Income elasticity of demand

Measures the extent to which quantity demanded is affected by a change in income

2 types of goods in YED

1. Normal +

2. Inferior -

2 types of Normal + goods

1. Luxury (elastic)

2. Necessity (inelastic)

Value proposition

A statement that clearly identifies the benefits of a company’s products and services will deliver to its customers

Market segmentation

Dividing up a market into parts that reflect different customer wants and needs

Methods of market segmentation

1. Demographic

2. Geographic

3. Income

4. Behavioural

Target market

Set of customers sharing common wants and needs that a business decides to target

Mass marketing

Where a business sells into the largest part of the market, where there are similar products from competitors

Niche marketing

Where a business targets a small segment of a larger market where customers have specific wants and needs

Market Positioning map

Illustrates the range of ‘positions’ that a product can take in a market based on two dimensions that are important to customers

7P’s of marketing mix

1. Product

2. Price

3. Place

4. Promotion

5. People

6. Physical Environment

7. Process

2 types of products

1. Consumer products (convenience, shopping and speciality products)

2. Industrial products (material and parts, capital items, supplies and services

Product portfolio analysis

Assesses the position of each product or brand in a firms portfolio to help determine the right marketing strategy for each

2 dimensions in the Boston Matrix

1. Relative Market share

2. Rate of Market growth

4 categories of the Boston matrix

1. Question marks (low market share, high market growth)

2. Cash cows (high market share, low market growth)

3. Stars (high market share, high market growth)

4. Dogs (low market share, low market growth)

Boston matrix

A business tool for product portfolio analysis

Product life cycle

A theoretical model which describes the stages a product goes through over its life

Stages in the product life cycle

1. Development

2. Introduction

3. Growth

4. Maturity

5. Decline

Extension strategies

Methods used to lengthen the life cycle of a product, usually introduced at the maturity stage

Price

The money charged for a product or service, everything that a customer has to give up in order to acquire a product or service

Main factors influencing pricing

1. Costs

2. Product life cycle

3. Elasticity of demand

4. Market share

5. Competitions

6. Marketing objectives

Types of pricing

1. Penetration pricing

2. Prime skimming

3. Dynamic pricing

4. Cost-plus pricing

5. Competitive pricing

6. Psychological pricing

Aim of promotion

To ensure that customers are aware of the existence and positioning of products

Branding

The process of developing a product with a unique character that is consistent and well recognised

Brand extension

Using an existing brand name to introduce a new product or service

Brand stretching

Where the brand is used for a diverse range or products, not necessarily connected

Logo

Symbol or picture that represents the business, easy to recognise, establishes brand loyalty and can create a favourable image

Types of promotional methods

1. Advertising

2. Personal selling

3. Sales promotion

4. Public relations

5. Sponsorship

6. Direct marketing

Aim of distribution

To make products available in the right place, at the right time, in the right quantities

Distribution channels

The stages a product moves through from production to final consumption

Intermediary

A third-party entity that facilitates transactions between a seller and a buyer, typically acting as a middleman in the distribution chain

Parties in a distribution channel

1. Wholesalers

2. Retailers

3. Distributors

4. Agents

5. Direct channels

Indirect channels

Involves the use of intermediaries between the producer and consumer

Multi-channel distribution

Involves a business using more than one type of distribution channel

People

The employees of a business who interact with customers and potential customers

Process

The procedures involved in a transaction; how easy or difficult it is for a customer to make a purchase

Physical environment

Aesthetics of the place where the customer makes the purchase

Integrated marketing mix

Elements of the mix should work together to achieve the desired effect, there must be internal consistency

Digital marketing

Interacting with customers using digital communications

E-commerce

The buying and selling of goods and services using an electronic network like the internet