34.

The importance of Marketing

Markets and marketing
What is a market?
• Set of arrangements that allows buyers and sellers to communicate
and trade in goods and services.

• In the modern industrial system, however, the market is not a place.

• This is because it is possible to trade goods without buyers an sellers

actually meeting (telephone, internet)
Examples of markets

Commodity
market
Ex:Oil,
copper, wheat

Consumer Housing
goods market market
Ex:Food, Buy & sell
furniture property

Markets

Stock market Markets for

Buy & sell services
shares Ex:Banking,
cleaning
What is marketing?
Management process involved in identifying, anticipating and satisfying consumer
requirements profitably.

Marketing 7.Make
products
available in
convenient
1.Identify
locations
consumer needs
and wants
6.Persuade
2.Design products 3.Understand 4.Inform customers to
as per customer competitor customers 5.Charge the buy products
needs threats about right price
products
Satisfying customer needs
• It is important for a business to produce goods and offer services that
the customers are prepared to buy. (affordability, convenience,
reliability)

• Customer needs can be identified through market research.

• If possible businesses need to anticipate customer needs.

• Anticipating customer needs is about being proactive and trying to

predict what customers want in advance.
Innovation and anticipation during COVID-19
Building customer relationships

• Businesses try to establish a bond with customers through effective

communication.

• Businesses are more successful if communication is two-way.

• Social media is seen as an avenue for real-time communication and

feedback.
Keeping customer loyalty
• It is important to retain customer loyalty so that they continue to make
purchases in the future.

• Customers can be retained by:

 Continuing to satisfy customer needs by developing new products
 First class customer service
 Effective communication
 Delivering reliability and responding to changes in the market
 Developing a strong brand name
1.Reward cards
Customers are rewarded every time they make a purchase.
Example: Odel loyalty card, Cargills loyalty card

2.Free gifts
Loyal customers may receive free gifts from businesses.
3.Charitable donations
Businesses make donations to charity as a result of a customer purchase.

4.Partnership deals
Some businesses set up deals with other businesses to
share cost share cost and benefits of rewarding customer loyalty.
Product and market orientation
Product oriented
• Here the businesses are more concerned about the quality of their
products.
• Efforts are more concentrated on the design and manufacturing of the
product itself.
• Then they persuade people to buy it.
Example
1. Apple can be labelled as a product-oriented company. Apple focuses
on its quality and relies on innovation to enter new markets and
create demand.
2. Ford Motor Company, where Henry Ford had made only model of
car in black colour irrespective of the perspectives of the consumer.
Market oriented
Businesses are led by the market and their focus is on the customer.
They do not make their products until they know what people want.
They spend a lot of time & resources on identifying, reviewing and analyzing
the needs of customers.
Market research is given a prominent place.
Example:
Amazon is an example of a market-oriented company. As it has grown and
developed, it has consistently added processes and features that clearly
address concerns and desires expressed by consumers.
Example
1. For example, many consumers, especially city dwellers, worry about
getting packages delivered when they're not at home. The company
responded with Amazon Locker, a network of self-service pickup
boxes.
2. Coca-Cola performs extensive research to come up with new flavours
for its consumers. For users who are worried about sugar content, the
company launched the zero-calorie Diet Coke
 Market share and market analysis
• Businesses are often interested in their market share. This is the share of
the total market that a particular business or product enjoys.
• Businesses try to increase their market share.
• If a firm can dominate the market, it may be able to charge a higher
price.
𝑇𝑜𝑡𝑎𝑙 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑜𝑟 𝑏𝑢𝑠𝑖𝑛𝑒𝑠𝑠 𝑠𝑎𝑙𝑒𝑠
Market share= *100
𝑇𝑜𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑤ℎ𝑜𝑙𝑒 𝑚𝑎𝑟𝑘𝑒𝑡
Market analysis
• A market analysis is a quantitative and qualitative assessment of a
market.
• Involves in finding out the characteristics/features of the market.
Niche Marketing VS Mass Marketing
Mass Marketing
A marketing strategy that targets
whole market.
High competition because there are
several other competitors
Examples:
Breakfast cereals, crisps
Niche Marketing
A marketing strategy that targets a
specific market.
Competition is relatively low
Examples:Clothing company selling
clothes to people of larger size, ice-
cream shop selling products for
people with diabetes, restaurants
selling organic food
Responding to changes in the market

01.Changing customer needs

• Change in consumer income (increase in the demand for luxury
products)
• Consumers becoming more educated and more sophisticated
(smartphones)
• Changes in fashion
• Technology (Netflix)
02.Changing consumer spending patterns
• Businesses can gather information about spending patterns in markets.
Example
Recession, customers will spend less money and businesses may need to
reduce their prices or develop a budget range to encourage customers to
continue to purchase
03.Competition
• Lowering prices
• Making the product appear different to those of rivals
• Quality products
• Attractive advertising
• Customer services