Marketing

MARKETING

STRATEGIC ROLE OF MARKETING

to maximise sales for an organisation through developing a group of strategies that plan, price, promote and distribute the company’s goods or services in an attempt to obtain or maintain a sustainable competitive advantage over their competitors

This introduction to marketing in the Year 11 course is a subset of the marketing process from the Year 12 Marketing Topic in the Business Studies Syllabus. Those processes of marketing in the year 12 course are a six step iterative (repeated) process,namely:

marketing process

  1. situational analysis – SWOT, product life cycle

  2. market research

  3. establishing market objectives

  4. identifying target markets

  5. developing marketing strategies

  6. implementation, monitoring and controlling – developing a financial forecast; comparing actual and planned results, revising the marketing strategy

The year 11 course has the following two elements (steps 4 and 5) of the marketing process:

  • identifying target markets (in the year 11 syllabus as identification of the target market)

  • developing marketing strategies (in the year 11 syllabus as marketing mix)

A BRIEF OVERVIEW OF THE SIX STEP MARKETING PROCESS

The six step iterative process in marketing commences with conducting situational analysis. The situational analysis has two components, a SWOT analysis and product life cycle analysis. A SWOT analysis considers internal influences (strengths and weaknesses) and external influences (opportunities and threats). In addition to identifying these, the SWOT analysis should also consider responses by the business to the strengths, weaknesses, opportunities and threats that have been identified in the analysis. In addition to the SWOT analysis, the situational analysis also considers where in the product life cycle (research > launch > growth > maturity > post maturity) the particular product is because it has implications for the marketing strategy in general, and the product and promotion elements of that strategy in particular.

The second step in the marketing process is market research into the market and products and services which the business sells. Here the marketing manager can conduct two different types of research, being primary research which is new research and analysis conducted for this purpose (ie commissioning new research into consumer preferences for soccer boots), or it can be secondary research which is where existing information that exists is reused for this purpose (ie sales reports already existing in the business or data from the ABS).

The third step in the marketing process is establishing market objectives. This is the big picture overall business objectives for the business. For example, a new cafe may set an overall market objective of achieving revenue of $100,000 for the first year. Note that the overall objective does not identify the types of people that will buy the coffee of the business (which is the next step), it just sets the overall parameters or overall objectives for the business.

The fourth step in the marketing process is identifying target markets which is explicit in the year 11 course as "identification of the target market" and is outlined below. This is about which types of people will be the purchasers of the business' products in order to achieve the overall market objective set in the third step.

The fifth step in the marketing process is developing marketing strategies, the result of which is called the marketing mix which is explicit in the year 11 course as "marketing mix" and is outlined below.

The sixth and final step in the marketing process is implementing, monitoring and controlling that is actually implementing the marketing strategy, establishing processes to record and track progress and results of the outcome from the marketing plan, and then taking steps to make changes to the marketing strategy in response to how the marketing strategy is performing. In other words, after having completed step 6 the marketing manager returns to step 1 to commence the planning process again.

IDENTIFICATION OF THE TARGET MARKET (YEAR 11)

Before considering the marketing mix (ie the 4Ps in step 5 below), the first question for marketing is to determine the target market - who will be the purchasers of the goods and services in order to achieve the overall market objective set in the prior step of the marketing process.

Key concepts include:

  • demographics - the target market can be divided based on demographic attributes including age, gender, location, income level, personality preferences etc

  • geographic the physical location where the customer is (ie by city or suburb)

  • mass market the business targets all consumers (ie kleenex)

  • niche market ie Rolex, targetting a small subset of the market identified based on attributes

Note that the segment selection then feeds into the marketing mix (4Ps), that is, the product, pricing, promotion and place strategies will very much depend on the market segments selected, and its demographics, attributes, media consumption and buying preferences.

Be careful marketing does not mean 4Ps..... Segmentation of the market, which is all about identifying the target market to be the purchasers of the business' products, must occur first.

MARKETING MIX (YEAR 11)

Step 5 of the marketing process, developing marketing strategies (ie developing the marketing mix) is the one thing in the entire Business Studies course which students find very easy to remember. That is because it is all about four words that all start with the letter P, and are therefore known as the 4Ps of marketing. This language, referring to the elements of the marketing mix as the 4Ps is universal in business throughout the world.

The thing all students remember about marketing, the 4Ps:

  • Product design of the product, branding and packaging. It is marketing, not operations, that designs the product and determines the branding and packaging strategy. Operations then have to produce the product.

  • Price price for the product: pricing strategies include

    • cost plus a margin (ie costs are $10, add a 10% margin means the selling price is $11),

    • competition based (ie price the bananas having regard to what Coles and Woolworths are selling them for)

    • penetration pricing (ie use a low price to enter a market and build market share for a new product like when ALDI first entered the Australian market)

    • loss leaders (ie sell one product at a loss in order to encourage the customer into the store where they may purchase other goods, where Woolworths may sell Coca-Cola at a 50% discount making a loss on that product).

  • Promotion how will consumers become aware of your product. Includes advertising, word of mouth, sponsorships, public relations etc. Students often wrongly assume that marketing = promotion. No, promotion is a part of the marketing mix, which is only a part of marketing

  • Place where will the consumers purchase the product. Note, this is not about the place where Coke is on the shelf at Woolworths, but the overall distribution strategy. For example, is distribution intensive (ie all over Sydney), or exclusive (only 1 store), or only online (Amazon). Distribution is another word for Place.