Marketing

What is a Market?
A market exists where buyers and sellers are in contact with each other in order to buy or
sell consumer goods, industrial goods, and services.
Marketing refers to a sellers anticipation, identification, and satisfaction of their markets
buyers in a profitable and cost!effective manner" in order to maximise sales and revenue.
#he main marketing activities are$
y Market research
y Market segmentation and targeting
y %roduct development
y %ricing
y %lacement and distribution
y %romotion and advertising.
#he Marketing &nvironment
#he marketing environment i.e. market" is affected by the following factors which will
have to be accounted for if marketing is to be effective.
y Market competition
y &conomic forces
y Market growth
y Market share
y 'onsumer behaviour
y (overnment
y #echnology
y )ature of the good or service.
#he behaviour of consumers is affected by their$
y Age
y *ocation
y +ccupation
y Marital status
y #aste and fashion
y (ender
y ,ncome
y &ducation
y -ocial status
y %ersonality
y Motivation and lifestyle. .igher -till
)otes
.igher /usiness Management )otes 0nit 1 2 /usiness 3ecision Areas
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What is the Marketing Mix?
#he marketing mix is the specific combination of product, price, place and promotion,
which will satisfy the needs of an organisations market or market segment.
Why is this ,mportant?
y ,t provides the organisation with competitive advantages
y ,t improves organisational performance.
%roduct
#he product element of the marketing mix is concerned with the dynamic creation,
development and management of goods and services which can be sold to satisfy
consumer demands and generate profits.
#his element of the marketing mix is of vital individual importance as without a product
the organisation would fail, as it would have nothing to price, place, promote or use to
generate revenue.
%roduct ,ssues
y 3eveloping the product concept
y %roducing innovation
y /rand creation and management
y +wn brand creation and management
y %roduct mix management
! %roduct line based production
! 3iversified production.
y ,dentification of product life!cycle
! 3evelopment
! ,ntroduction
! (rowth
! Maturity
! -aturation
! 3ecline.
y &xtension of product life!cycles
! %roduct change to keep ahead of the competition
! %roduct change to appeal to new segments
! Altering packaging to appeal to new segments
! Altering the channels of distribution
! 'hanging prices
! Altering the methods of promotion and advertising. .igher -till
)otes
.igher /usiness Management )otes 0nit 1 2 /usiness 3ecision Areas
%age 6 www.hsn.uk.net
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Market -egmentation
/usinesses can choose to either target the ma7ority of consumers or specific groups of
consumer, depending upon the type of business and sector they operate in.
0ndifferentiated marketing is where a product is sold to the whole market, e.g. 8ellog9s
'orn :lakes.
3ifferentiated marketing is where different products are sold to the various target groups
within society 2 e.g. ;eady /rek for children, -pecial 8 for dieters, and so on.
Market segmentation is the process of classifying the consumers within the marketplace
into separate and identifiable groups based upon similar characteristics or needs.
#he basis for this breakdown can be any or a mixture of the following factors$
y Age
y (ender
y -ocio!economic group
y &ducation
y ;eligion
y ,ncome
y +ccupation
y :amily
y &thnic grouping
y *ocation
y *ifestyle.
Why is Market -egmentation ,mportant?
y ,t prevents undifferentiated marketing or mass!marketing" which targets all consumers
within the same market group.
y ,t allows differentiated marketing which will target different market segments with
different tailored marketing strategies. &xamples of differentiated marketing include
personal selling and niche marketing.
#he /enefits of 3ifferentiated Marketing
y ,mproved customer satisfaction
y ,mproved customer loyalty
y 3evelopment of sales opportunities
y ,mproved sales
y 3ecreased resource wastage
y ,mproved profits
y ,mproved market share
y ,mproved stability and security. .igher -till
)otes
.igher /usiness Management )otes 0nit 1 2 /usiness 3ecision Areas
%age < www.hsn.uk.net
.-)41155
%rice
#he price element of the marking mix is concerned with the dynamic setting and
management of the sales price of new and existing goods and services which the
organisation sells.
%rice is an important element of the marketing mix, as without effective price setting and
management an organisation will fail to attract customers, generate revenue, or maximise
opportunities for profits. #his is the case because price is used by consumers to assess and
compare the worth, value!for!money and affordability of different products, and, in turn,
make decisions about which products they will buy.
What Affects %rice?
+rganisational %ricing +b7ectives
y %rofit maximising ob7ectives
y 'ompetitive ob7ectives
y +ther ob7ectives.
%ricing -trategies to Achieve +b7ectives
.igh %rice -trategies
y 'ontribution pricing
y 3emand!oriented pricing
y -kimming pricing.
*ow %rice -trategies 'ompetitive"
y %enetration pricing
y %romotional pricing.
Market %rice -trategies -tability"
y 'ompetitive pricing
y 'ost!plus pricing.
#he Market the %roduct is to be -old ,n
y 0ncompetitive market monopoly supplier" 2 high prices
y 'ompetitive market 2 market prices
y .ighly!competitive market many suppliers" 2 low prices.
#he )ature of the %roduct ,tself
y )ew products with competition would use market prices
y )ew products without competition would use high or relevant market prices
y &xisting ordinary" products would use market or low prices
y &xisting =uality or brand" products would use high prices
y &xisting uni=ue products would use high prices. .igher -till
)otes
.igher /usiness Management )otes 0nit 1 2 /usiness 3ecision Areas
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%lace
#he place element of the marketing mix is concerned with ensuring that at any specific
point in time the best method of bringing a product to the right place at the right time to
satisfy customers needs is being employed.
#his element of the marketing mix is important as without it an organisation will lose
sales, profits and market share because their products, which consumers want to buy, will
not be bought as they are simply unavailable.
%lacement ,ssues
'hannels of 3istribution
y Wholesaler
y ;etailer
y 3irect!sales.
#he 'hoice Made will 3epend 0pon
y &xisting buying habits
y 'hanging buying habits
y %roduct nature
y Market coverage re=uired
y %roducer!power dema