Marketing and Production Fundamentals

Evolution of Marketing Approaches

• Production Approach:

  • This strategy centers on the internal operational strengths of the business during the creation phase.

  • The primary objective is the manufacture of high-quality products based on the belief that if an item is sufficiently "good" and priced affordably enough ("cheap"), customers will naturally seek to purchase it.

• Selling Approach:

  • The core focus shifts from production to promotion.

  • Activities are geared toward generating sales volume through aggressive promotional efforts.

• Marketing Approach:

  • Concentrates on identifies and fulfilling the specific wants and needs of the consumer.

  • Determines customer requirements prior to production to ensure the outcome aligns with market demand.

Classifications of Markets

• Resource Market:

  • Involves industries dedicated to primary production.

  • Specific sectors identified include $Mining$, $Agriculture$, and $Forestry$.

• Industrial Market:

  • Comprises businesses that acquire raw materials specifically for use within their own production processes.

• Intermediate Market:

  • Consists of intermediaries, namely wholesalers and retailers.

  • These entities purchase finished products and resell them with the intent of generating a profit.

• Consumer Market:

  • Involves the sale of goods and services directly to individual consumers.

  • Mass Markets: Strategies where a business sells a single product to all potential buyers in the market simultaneously.

  • Niche Markets: Focused segments within the broader consumer market.

Factors Influencing Customer Choice

• Psychological Factors: Internal influences on the consumer's mindset.

• Sociocultural Factors: Influences stemming from society and cultural heritage.

• Economic Factors: The impact of the broader economic climate on purchasing power.

• Government Factors: Influence exerted via policy and legislation.

Consumer Laws and Legal Protections

• Deceptive and Misleading Advertising:

  • Defined as promotional activities that are untruthful or designed to provide a false impression of the product or service.

  • Under the Competition and Consumer Act, such practices are strictly illegal.

• Price Discrimination:

  • The practice of charging different prices for the same product based on the business's assessment of what a specific customer or segment is willing to pay.

• Implied Conditions:

  • Refers to the unwritten or assumed terms that are inherent to a contract.

  • Specific legal reference provided is the Fair Trade Act $1987$.

• Warranties:

  • A formal promise by a business to rectify any defects in the goods they have produced.

  • This obligation usually applies for a set duration after the purchase.

Ethical Influences in Marketing

• Truth and Accuracy in Advertising: Focuses on eliminating deceptive practices, including:

  • Concealed information: Hiding relevant facts from the consumer.

  • Exaggeration: Overstating the benefits or features of a product.

  • Vague statements: Using ambiguous language to mislead.

• Good Taste in Advertising: Considers the social impact of marketing and whether advertisements are likely to offend the public.

• Products that may Damage Health: Businesses must ensure they do not disguise the potential negative health impacts associated with their products.

• Engaging in Unfair Competition:

  • Cartel Contracts: An illegal practice where two or more businesses agree to act together (collusion) rather than competing.

• Sugging:

  • Acronym for "Selling Under the Guise of market research."

  • While technically not illegal, it is an unethical practice where a business pretends to conduct a survey to gather data, but the true goal is to sell a product to the participant.

Marketing Planning and Research Processes

• Situational Analysis:

  • Includes the use of a SWOT Analysis ($Strengths$, $Weaknesses$, $Opportunities$, $Threats$).

  • Analysis of the Product Life Cycle ($PLC$).

• Market Research Steps:

  • $1.$ Determining information needs: Identifying exactly what data the business requires to make decisions.

  • $2.$ Collecting data: Obtaining information from both primary sources (directly from the market) and secondary sources (existing data).

  • $3.$ Analysis and interpreting data: Evaluating the collected information to find meaningful patterns.

• Establishing Marketing Objectives:

  • $1.$ Increase total market share.

  • $2.$ Expand the existing product mix.

  • $3.$ Maximise the quality of customer service.

Target Market Strategy and Marketing Mix

• Identification of Target Markets: This process is critical because it:

  • Ensures promotions are highly relevant to the specific needs of customers.

  • Enables the business to use its marketing materials more efficiently.

  • Allows for the refinement of overall marketing strategies.

• Strategic Approaches to Markets:

  • $1.$ Mass marketing approach: Selling one type of product to the entire market.

  • $2.$ Market segmentation approach: Dividing the market into specific segments to target.

  • $3.$ Niche marketing approach: Targeting very specific, narrow subgroups.

• Developing Marketing Strategies (The $4$ Ps):

  • Product

  • Price

  • Promotion

  • Place

Implementation, Monitoring, and Controlling

• Implementation: The practical process of putting the established marketing strategies into operation.

• Monitoring: The ongoing process of measuring actual business performance against the predefined planned performance targets.

• Controlling: The act of comparing planned performance against the actual results and taking necessary corrective actions to fix discrepancies.

• Steps in Implementation and Control:

  • $1.$ Developing a comprehensive financial forecast.

  • $2.$ Performing a side-by-side comparison of planned versus actual performance results.

  • $3.$ Revising and adjusting marketing strategies based on the performance outcomes.