BusinessStudiesOnline:Slide1

What is Marketing?
What is Marketing?
Thereareanumberofdifferentdefinitions:
Marketingisthemanagementprocessthatidentifies,
anticipatesandsatisfiescustomerrequirementsprofitably
TheCharteredInstituteofMarketing
Therightproduct,intherightplace,attherighttime,and
attherightprice
Adcocketal
Marketingisasocialandmanagerialprocessbywhich
individualsandgroupsobtainwhattheywantandneed
throughcreating,offeringandexchangingproductsof
valuewithothers
Kotler1991
BusinessStudiesOnline:Slide2
Effectivelythesedefinitionsallmeanthat:
TheConsumeris
KING(orQUEEN!)
Assuch,ifafirmwantstosurviveitmustprovidewhat
consumerswant
Marketingishowfirmsdothis!
What Do They Mean?
What Do They Mean?
BusinessStudiesOnline:Slide3
The Role of Marketing
The Role of Marketing
P1
Q1 Q2
D1 D2
Quantity(Q)
Price(P)
Themainpurposeof
marketingistoshiftthe
demandcurvetotheRIGHT
E.g.Anadvertmayincrease
awarenessandtherefore
sales
Thisincreasesquantityfrom
(Q1Q2)thusincreasing
sales
BusinessStudiesOnline:Slide4
Marketing Within An Organisation
Marketing Within An Organisation
Themarketingdepartmentdoesnotoperatein
isolation
Sotheobjectivesofthemarketingdepartmentmustfit
inwiththecorporateobjectivesthathavebeenset
Mostobjectivesrelateto:
Image
Profit
Sales
Soclearlythemarketingdepartmenthasabigroleto
play
BusinessStudiesOnline:Slide5
The Marketing Environment
The Marketing Environment
Marketingdecisionsmustconsiderotherfactorswithin
abusiness:
TheWork
Force
KnowHow
Plant&
Machinery
Finance
BusinessStudiesOnline:Slide6
The Internal Environment
The Internal Environment
Thefacilitiesavailablewithinafirmmayinfluence
whetheritisproductorientatedormarketorientated
ProductOrientation
Whereafirmconcentratesontheproductorproduction
processbecausetheyhavetheknowledge.
E.g.Dyson
MarketOrientation
Whereafirmcontinuallyreviewsandanalysesconsumer
wants,andmodifiestheirproductsaccordingly.
Veryfewfirmsarepurelymarketorientated
AssetLedMarketing
Amixtureofthetwoapproaches.Itrecognisesthat
marketingisconstrainedbyotherfunctionsofthebusiness
Mostfirmsfallintothiscategory
BusinessStudiesOnline:Slide7
Market Segmentation
Market Segmentation
Mostbusinesseswillnottreatamarketasasingle
entity
Insteadtheybreakthemarketintosmallpieces,or
segments,wheretheconsumersineachsegment
havesimilarcharacteristics
Forexample:
Themarketformusiccouldbesegmentedinvariousways,
including:
Ageieteenagerswillhavedifferenttastesto40yearolds
BehaviouriesomebuyCDswhileotherswilldownload
BusinessStudiesOnline:Slide8
Segmenting The Market
Segmenting The Market
Thereareanumberofwaysinwhichthiscanbedone:
GeographicSegmentation
basedongeographicpatterns
DemographicSegmentation
age,gender,incomeetc
PsychographicSegmentation
socialclass
BehaviouristicSegmentation
behaviourpatterns
BusinessStudiesOnline:Slide9
Positioning The Product
Positioning The Product
Firmswillwanttoidentifywhichsegmentwouldbemost
suitablefortheirproducts
Ideallyafirmwillwanttoenteramarketthatisgrowing
iegettingbigger,sincethismeansconsumersare
buyingmore
Firmswillalsoconsidertheircompetitorsandanalyse
whetherthereisanyroominthemarketforthem
Assuchafirmwillhavetoconsidermarketshareand
marketgrowthwhenpositioningaproduct
BusinessStudiesOnline:Slide10
Calculating Market Share
Calculating Market Share
Theshareofamarketwhichanyoneproducthascan
becalculatedasfollows:
100 x
Sales Market of Value
Sales Product of Value
(%) Share Market =
Forexample:
Attheendof2004409.6millionworthof
WalkersCrispshadbeensold,intheUKPotato
Crispmarketwheretotalsaleswere1.76billion
Assuch,theWalkersCrispsbrandhadamarket
shareof:
100 x
1.76bn
409.6m
=
23.27% =
BusinessStudiesOnline:Slide11
Calculating Market Growth
Calculating Market Growth
Marketgrowthreferstoanincreaseinthesizeof
themarketforaparticularproduct
Ifthemarketisshrinkingthenmarketgrowthwillbe
negative
E.g.thehealthclubmarkethasgrownsignificantly
since2000:
BusinessStudiesOnline:Slide12
Market Share Vs Market Growth
Market Share Vs Market Growth
Ideallyafirmwillwantabigshareofagrowing
market
However,thisisnotalwayspossible,e.g:
In2002Nestl Rowntreehadsalesof0.85billionin
theUKconfectionerymarketinwhichsalestotalled
4.69billion,givingthemamarketshareof18.12%
In2003Nestl Rowntreehadsalesof0.78billionin
theUKconfectionerymarketinwhichsalestotalled
4.88billion,givingthemamarketshareof15.98%
ThismeansthatNestl Rowntreesmarketshare
decreasedby2.14%inamarketthatgrewby4.01%