decision making - marketing performance

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