Chapter 3) Marketing
- Created by: B-raa
- Created on: 29-01-19 17:43
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- Unit 3: Marketing
- Setting Marketing Objectives
- These are the targets set to be achieved by the marketing department in a specified time period
- The marketing objectives will be influenced by internal and external factors
- Marketing Objectives include:
- Sales Volume: The quantity of goods sold
- Sales Value: The financial value of sales e.g. revenue
- Market size: The potential size of the market
- Market and Sales Growth: the amount by which the volume of sales or size of the market expands over time. This is measured as percentage change.
- Change in sales or market size/ original market size x 100
- Market Share: one firm's sales as a percentage of the total market
- Sales of one product, brand or business/ total sales in the market x 100
- The Marketing Process
- 1) Analyse marketing plan
- 2) Make Marketing Decisions
- 3) Implement Decisions
- 4) Review
- 5) Set Marketing Objectives
- Brand Loyalty: When a customer consistently buys the same brand of a product
- Understanding Markets and Customers
- Market Research involves the systematic collection of data about the market and the customer in order to inform decision making
- Primary: collected first hand by the business for a specific purpose such as a questionnaire
- One form of primary market research is market mapping. This involves asking customers to categorise a range of competitors' goods alongside the business's goods based on two predetermined criteria.
- Secondary: using data that already exists such as market intelligence reports
- Qualitative data is about behaviours and opinions
- Quantitative data is about numerical facts and figures
- Primary: collected first hand by the business for a specific purpose such as a questionnaire
- Marketing Data
- The value of this is only apparent when the data is analysed to inform decision-making. One method used to interpret marketing data is to look for correlations or the relationship between two variables.
- Correlation can be shown on a spectrum from -1 to +1
- PED and YED
- PED measures how sensitive quantity demanded is to changes in price.
- For normal goods the relationship between price and demand is inverse. Therefore the PED is expressed as a negative value
- For inferior goods the relationship between price and demand is proportional. Therefore the PED is expressed as a positive value.
- Change in demand% / Change in price%
- For inferior goods the relationship between price and demand is proportional. Therefore the PED is expressed as a positive value.
- For normal goods the relationship between price and demand is inverse. Therefore the PED is expressed as a negative value
- YED measures how sensitive quantity demanded is to changes in income.
- A YED value below -1 or above +1 indicates that the demand is income elastic. If it is between -1 and +1 then demand is income inelastic
- PED measures how sensitive quantity demanded is to changes in price.
- Market Research involves the systematic collection of data about the market and the customer in order to inform decision making
- Making Marketing Decisions: Segmentation, targeting, positioning
- The STP Process:
- Step 1: Segmentation involves identifying groups of potential customers with similar characteristics
- Step 2: Targeting involves deciding which segment to focus on
- Step 3: positioning involves developing or adapting the market mix to appeal to that segment
- Segmentation methods include:
- Demographic: characteristicsof the population e.g. gender,race, age
- Geographic: based on physical location e.g. country or area within a country
- Income: amount of money earned; commonly known as socio- economic groups
- Behavioural: the actions and habits of the consumer
- Niche Marketing is when a business targets a smaller segment of a larger market where customers have specific needs and wants
- Advantages
- -Less competition
- -Clear focus on particular customers
- -Builds up specialist skill and knowledge
- -Can often charge a higher price
- -Profit margins often higher
- -More loyal customers
- Advantages
- Mass Marketing is where a business sells into the largest part of the market where there are many similar products on offer
- Key Features
- -Customers form the majority of the market
- -Customers needs and wants are general and less specific
- -Associated with higher production output and capacity
- -Success usually associated with low-cost operation, heavy promotion, widespread distribution or market leading brands
- Key Features
- The STP Process:
- Using The Marketing Mix
- The marketing mix is a combination of the 7 p's
- Process
- People
- Physical Environment
- Price
- Pricing strategies:
- Skimming is when a business sets high prices at the beginning of the product's life cycle and then lowers it over time
- Penetration is when a business sets low prices at the beginning of the product's life cycle and then increases it over time
- Predatory pricing is when a business (usually a market leader) lowers their prices so that competitors are forced out of the market
- Price makers set the price that competitors will copy. Price Takers are the businesses that copy that price
- Pricing strategies:
- Product
- Place
- Place can include:
- physical stores
- market places
- Virtual markets
- mail order
- Place can include:
- Promotion
- Promotional activities include:
- advertising
- merchandising
- Sponsorship
- Branding
- Promotional activities include:
- Goods and services can be sold as B2C and B2B
- Business to business and Business to Customer
- Product decisions
- The Boston Matrix is used to analyse the types of products a business has in their portfolio based on the level of market share and growth it holds
- Stars have a high market share and growth
- Dogs have a low market share and growth
- Problem children have low market share and a high market growth
- Cash cows have a high market share and a low market growth
- A range of products is called a product portfolio
- The product life cycle allows a business to track the individual progress that each product has made over time.
- Research and development stage
- Introduction stage
- Growth stage
- Maturity stage
- Decline stage
- Extension strategy
- The Boston Matrix is used to analyse the types of products a business has in their portfolio based on the level of market share and growth it holds
- The marketing mix is a combination of the 7 p's
- Setting Marketing Objectives
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