Unit 2 AOS 2
KK1: THE RELATIONSHIP BETWEEN MARKETING, ESTABLISHING A CUSTOMER BASE AND BUSINESS OBJECTIVE
Marketing is the process that links producers or providers of goods or services and the consumers of these. A business creates value when it offers products to its customers. It does this with the use of the four P's of product, price, promotion or place.
A customer base is the people who regularly purchase products or services from a business:
Relationship between customer base and business objectives:
If marketing is the process that provides the link between producers or providers of goods and services and the consumers of these then the use of marketing strategies such as the 7Ps marketing model (e.g product price or promotion) will achieve business goals such as to make a profit. For example, the use of a product brand that appeals to customer values can increase sales revenue to increase profit
KK2: INTERNAL AND EXTERNAL (MACRO AND OPERATING) ENVIRONMENT FACTORS AFFECTING THE ESTABLISHING OF A CUSTOMER BASE AND CREATION OF A BRAND IDENTITY
Brand identity: The features of a brand that make it recognisable and different from competitors.
Internal factors affect a business's customer base and brand identity:
Factor | Description |
|---|---|
Culture of the business | A positive culture that values customers helps build a good reputation and attract loyal customers |
Owners and managers | Need marketing skills to develop strategies that attract customers and create a strong brand. |
Employees | Friendly, polite and efficient customer service encourages customers to return and builds a positive brand identity. |
External macro factors affect a business's customer base and brand identity
Factor | Description |
|---|---|
Economic factors | Strong economic conditions can increase customer spending. During difficult times, businesses should focus on value for money. |
Technological developments | Technology allows businesses to customise products and use social media to reach customers. |
Legislation and registration | Businesses must follow consumer laws. Misleading customers can damage their reputation and brand identity. |
External operating factors affect a business's customer base and brand identity
Factor | Description |
|---|---|
Customers | Businesses must understand customer needs and preferences to attract and retain customers. |
Competitors | Businesses need to offer competitive prices and products to attract customers and stand out from competitors. |
KK3: MARKET RESEARCH PRACTICES
Market research: a systematic approach that assists a business to make decisions about consumers and the marketplace
Benefits of market research:
reduce the level of risk or uncertainty attached to introducing a new product or service
assess current products, advertisements and forms of packaging, and determine whether changes need to be made
predict future changes or trends in a product or service
Collection techniques (primary data):
Questionnaires, observation, focus groups and experiments.
Data Analysis:
Organising and examining raw data to identify patterns, trends and relationships.
Interpretation:
Explaining what the analysed data means and how it can help business decisions.