py Marketing, competition and the cast stomer es ee Marketing is identifying, jn the market profitably, Marketing objectives: 4 raise customer awareness target a new market or market segment + New markets at home or abroad & Increase or maintain market share Maintain or improve the im; existing products ete Marketing is an ongoing process because: Mass market Definition Standardized products are designed to Satisfying cus tomers, o + Malang theit hoyalty and anticipating changes * Customer’ needs change over tine * the business enviromntent can change, for example, with new laws, changes in technology of the economic climate Competitors enter the market with their own offerings and so businesses must respond. +a firm's own strengths change and develop — Niche market rar to - Whole market and Specialized (customized) products, are only eae bard a promotions | sold to a very small number of customers tended to appeal to most who form ee form a very small segment ‘Advantages | « the sales are very large + Avoid competition + benefit from economies of scale + The needs of consumers can be focused + risks can be spread, + Opportunities for growth Disadvantages | - high levels of competition + limited number of sales + High costs of advertising + No opportunity for growth + Standardized products or services Se et ee) « High risk as they specialize in one product. Market Budget: is a financial plan or forecast of the marketing of a product for a special period of time. Market segments: Segmentation is when a market is broken down into subgroup which share similar characteristics or preferences. Importance of segmenting + Make marketing expenditure cost effective + Enjoy higher sales and profits for the business, because of cost-effective marketing Sell more products; by making different brands of a product Identify the gap in the m: arket, meet the customer needs and increase sales. Scanned with CamScanners segmented: oe eared 48 _ by lifestyle ocation by comme Some of thr sect commun wast of ancand increased competition; iy ercin.ccannie grep, by ae, BY FOP pending pate at customers fresourees will reduce the Cost per unit ang “et wind Yo changine Flom tneainenees resp needs and develop NeW prod, 1. Product devedapment: Finding oo © 7 hulp business to remsin compe Amprowe efficiency: the ficient ‘therefore reduce the prices © © ng 3. Increased promotion: increasing 4. Look for new markets: finding ing to persuade consumers to buy Products market with less competition f0 increase s,° Market research Mark Jy is the process of gathering, analyzing and interpreting information . jarket research 1s market. e : bo Product oriented business is one whose main focus of activity is on the product itself, act 0 Market-orientated business is one whic! hefore a product is developed and produced. +h carries out market research to find out Customer. Want Types of information Market research can find out: ‘Quantitative information Qualitative information Seeks to understand how and why People beha, involve the use of numerical and quantifiable in a certain way (opinions and Perceptions) data. Types of market research Primary research, or field research Secondary research, or desk research + Mtis th i igi ue ae ea em oi + Itis the use of information that has i +I . it can ers. bins 3 The information may be from either intemal Sources or external sources, Scanned with CamScanner. primary research methods: Advantages of questionnaire “Delailed qualitative information can be thered about the product or service, «Cheap as it can be carried out online «They can be linked to prize draws to encourage people to fill in. Advantages of interviews "$ The interviewer is able to explain any | questions to the interviewee | Detailed information about what the interviewees like and dislike about the product i a ‘Advantages of focus group T They can provide detailed information |___about consumers’ opinions Advantages of observation Itis quite inexpensive way of gathering data Sources of secondary research: Disadvantages of questionnaire +If questions are not well phrased, the answers to them will not be very accurate. Carrying out questionnaires can take a lot of time and money. “Collecting and analyzing the results is also time-consuming. Disadvantages of interviews ¥ inaccurate results due to interviewer bias Interviews are very time-consuming and | expensive way of gathering information ~~ Disadvantages of focus group | © time-consuming, expensive and biased Disadvantages of observation It gives only basic figures without providing reasons for consumer choice. External Source Internal Sources + Government statistics “4 Sales department sales records, pricing + Newspapers data, customer records, sales reports + trade association + opinions of distribution The internet » Finance department + Customer Service department Scanned with CamScanner a0 é f i4 u product, Price, Promotion, Placg mix: Marketing Prodect Preedocing the right prode er wants and needs. isfy consum illing to pay. Pp psrdepininm pre i Ge ie Produce a reason, ee iL a pri ey on ai product is obviously very important. Design of important part of the Marketp rice is an impo Ri, at the right p) vent Product = lop Ike Sc ew pac ail the time. Smaller businesses ate alsy Oy ae and therefore need to keep up with other com panies, e Benefits of dev eloping few products USP (unique selling point) means thel - business will be first into the market with the new product * diversification for the business, therefore giving ita broader Tange o} Costs for the business When developing Negative prod: ucts the costs of carrying out Market Tesearch and analysing the fj * the costs of, Producing tria} including the costs indings Products of wasted Materials Products to sel] * lack of saleg if the target market is * itallows the business to expand into Wrong ew markets * loss of, company image if the new : itmay, allow the business to Spand | product fails to meet Customer need; M10 existing markets lame is Si Brand loyatyj ia cnet Product that distinguishes it from other brands, ‘itor’ brand, POuying the some bang Again and again instead of choosing 88¢ iS an ima, € OF identity 9: disinguishe ifas ie i fie ae {0a product Which S, i Bives ita Personality of its own and sehPany and Product esnecs i Special} rent te Aids em Loy me com it through logos and j : images, + Helps the com totvation Mt py "oducts from rivals omy es Pa Sting High prices Scanned with CamScannerx oe role of packaging aging is the physical container op celing appeal ‘Wrappin, a Packaging has to give Protection to the ‘a Packaging is also used for Promoting the ier itto spoil, catches the customer's eye "et Teas to appeal to the consumer, It & Packaging also inform the Customer about the product Product life cycle; sales Profit competition Carried out and prototype No sales will be tested Price skimming hemesre Grow | No Nocoupaiea lvertising | doaty wae Prices are persuasive Grow | stato reduced advertising | rapidly re made Maturity competitive | A lotof increase | attheir | intense | or advertising _| only highest promotional | is used slowly Saturation | Competitive | A high and sale are start to fall | high but there} | pricing stable static are no new | level. of competitors \dvertisin i : : i bl | Decline | prices have Advertising | decline unprofitable been is reduced reduced and then stopped Extending the product-life cycle a Introduce new variations of the origi eee 4 Try to sell the product in different markets: design or packaging & Make small changes in the colour, + Start a new advertising campaign Scanned with CamScannerPrinting etrwhegiee: i ret: Troms determining the price of a pred: The type tf prodoct : ‘The conn of producing @ wnat & ‘The whility of customers to pay © Phe demand for a product & Competitors pricing ‘sdopts a certain pricing strategy for several Teasons; A business © ty to break into a new market 4 Salanaboccts 4 ty to increase its profits Heph ing: oe : K mane ences many of the product/service will be Produced, then letting ing this idding a ercentage mark-up for Profit, lee Cost of | Producing this Output and finally a ig a p Disadvantages * May lead to loss in if the Selling Drice > higher than Competitor's Price, Sak Competitive Pricing This when the Product is prices in line With or just below Competitors’ prices tonyts ae ‘More of the market, Advan tages Disadvantages — ¢ high as the Itis cog ensures thar sales are Consumers? Disadvantages te Made by reintorey * Little sales revenue ig lost by eg eeteeptions of the rOduct-thi. Uti ice just below the | nd be its brand Image when the price is set mee " re i ‘ . The Competitors mav do the sn? r Scanned with CamScanne!Sold at @ low price and ‘ales revenue may be low! pce shining : j ucuservice is usually a new invent qe ian be sold on the market at a high pe _ development of an old product, and ofthe novelty factor. People will pay this high price because Advantages help to establish th Disadvantages Itcanhelp ish the product/service] It - as being of good quality, May put off some potential Customers because of the high price. Promotional pricing jis when a product is sold at a very low Price for a short Period of time. Advantages « Itisuseful for getting rid of unwanted stock that will not sell. « Itcan help to renew interest in a business if sales are falling. ‘ Disadvantages The sales Tevenue will be lower because the price of each item will be low Dynamic Pricing: Dynamic pricing happens when customers are split into two or more groups and they are charged different prices for basically the same product or service because they have different demand levels Firms do this because the price sensitivity of these two groups is different. eg Advantages ____ Disadvantages . Increased sales revenue « High cost of constantly changing prices for + Increased profit business , : * Ensuring all seats are filled e.g. on + High cost for customers in terms of time spent airlines, football games trying to find the best price. Scanned with CamScannera mrstielty a demand AES ee set be esponsivees of demand 6 change in prc Pete ei sn meusure of he rege ed - Whe percentage chan in quantity demanded is greatey than the Price-elmatiec Armend = ree Poe, corte in quantity demanded is ‘ Gemand - the percentage change in quantity SIS than the bg Price inelastic - e i shanee ib price hy Price elasticity of demand and pricing decisions inelastic demand Increase Tevenue Decrease pricePrice inelastic demand Decrease Tevenue Increase price Price elastic of demand Decrease Tevenue Decrease pricePrice elastic of demand a Inetease revenue Promotion Advertising: Advertising canbe either informative or Persuasive or Informative advertising: isto ive full information about the Product, ‘Advertising media the business can use: Television, radio, newspapers, magazines, i radio, , Posters/billboards, leaflets, ci i Target audience refers tg People who are potential buyers ofa product on ed interne, Uct OF service, Gits Sometimes sma ai themschaae Scanned with CamScanner2 avaages of promotion hic promote sales at tj chases). imes in the year when Nes a glrencourages new customers tg 4} ltencourages consumers to iw, an existing 4 Itencourages existing usittees Product 4 Irencourages customers to buy your buy a product pr oduct instead re oem OF i tead of a i greater quantitie competing brand 7 tEseason, ors determining the ty, fact Pe of promotion fora Product: The state of the product life cycle that k athe nature ofthe productitselz, eet athe. public relations/sponsorships public relations can take many fo) blicity stunts where Gailivess rms, from sponsoring events such % », OF OWners of the compar ich as football matches, to a good cause, or to raise awareness, ipany, take part in a sponsored activity for Another example is where companies donate some of their Products to chari i there has been a natural disaster, or food for victims of a famine. rity - for relief when Place distribution channel is the means by which a i 4 product is passed ‘ the customer or retailer. passed from the place of production to Channel of distribution 1 Disadvantages ~ impractical for most products ~ Not be suitable for products which cannot easily be sent by post. ‘Advantages _ : Very simple. tis suitable agricultural products There is a lower price Products can be sold by mail order catalogue Channel of distribution 2 Disadvantages Advantages + Producer sells large quantities t + More convenient to customers 0 retailers. ‘No direct contact with customers. Scanned with CamScannerChapel nf distrsboation 3 ——"Vaamnges ‘eaves stare sac t TWhhntestke prodac 1 Nun estates enn pores anemntities from wholesaler |. May yive credit to customers 15 AMhasaler may deliver to dhe small retailer | ag saving oo transport costs. [+ Wholesaler can give advice to small retailers Disadvantages — + May be more expensive for the Sa + May not have the full range Of prog sell. ~ Takes longer for fresh products + may be a long way from the smal} ah » Mets, Channel of distribution 4 i Advantages Disadvantages “Manufacturer may not know the best way to sell the product in other markets. ~ Less control over the way the : + Aware of local conditions sold to customers, E-commerce the buying and selling of goods an d services on the internet Opportunities of e-commerce to business ‘Websites can be used to promote the company and its products worldwide much more cheaply Orders can be taken over the computer and sent directly to company warehouse for dispatch ‘Consumers might be encouraged to purchase more products than they intended by attractive and easy to follow websites supplies and materials from other businesses (B2B) Opportunities of €-commerce to customers No need to leave the house ( ogo shoppi i convenience isa major fcr, Pe am hs tor, Businesses can also easily make online Purchases of | Threats of e-commerce to business Competition between businesses is Very high, Website design must be very clear, attatieany easy to operate. Website designs can be expense Transport costs per product sold are likely to be higher than selling through traditional shops, There is no face-to-face contact with consumer Aa Returns of the product can add to business cous a large warehouse and efficient stock control system will be essential to meet consumers' ordes accurately &-commerce is not suitable for businesses that sl Personal services such as hairdressing Threats of e-commerce to customers Its still the case that in many countries intern access, is verv nane Scanned with CamScanneru jeeween prices and products Gr Se te? systems fh g sie” . — caret eee 5 ry east i or debit card is Pecos teed cereumers wha { ern Very eaty ‘tad take whe en i | aear erates . now easily access products and Been or tried on fend | inesses located abroad- this would | ij Soften inconvenient expensive without e-commerce contac —_ | some products for prices much ote information | id be without the competition am - Of credit cards if they buy goods | annem ng strateBy ting strategy is a plan to combine the ri i h st choihiral AT ing mix for & product or service to achieve sparen of the four elements of the cting objective(s). ner LOWS! the government protects the customer against: inst: ash Weights and Measures é Misleading pricing _ Trade Descriptions. _ The Distance Selling Regulations . Sale of Goods. Supply of | Goods and Services Act. Key terms: tive market: A greater number of businesses producing products aimed atthe same market segment, a number of similar companies, a market with a large number of businesses selling similar products J aimed at the same group of consumers. OR many other businesses/intense rivalry in the same segment of the market. OR Similar services are being offered and that probably prices are keen. e.g. lots of rival businesses. Increasingly competi ers and sellers to communicate and trade in Market: a set of arrangements which allows buy goods and services ict. Products are designed to and promotions are intended to appeal to Mass market: very large number of sales and standardized produ appeal to the whole market and therefore advertising ost customers. Scanned with CamScanner