4.

1 Introduction to Marketing
Tags Unit 4 Marketing

Date of Lesson @November 28, 2022 → November 30, 2022

Marketing
Marketing: the management process of identifying, anticipating and meeting
the needs of customers profitably – it does this by getting the right product at
the right price to the right place at the right time

Marketing is the art of determining the goods and services required to meet
the needs and wants of customers in a sustainable way.

Marketing Function

In an organisation, the marketing department strives to provide the market

with:

The right product that appeal to customers

At the right prices in order to attract customers

Effective promotion to entice customers

Convenient and efficient distribution for ease of purchase (place)

Size of Market

Can be defined in the following ways:

Total number of customers

Sales volume (Quantity sold)

4.1 Introduction to Marketing 1

 Total value of sales revenue in a certain market

Number of potential buyers in the market

Number of competitors in the market. This can give an indication of

intensity if competition

Marketing Orientation Vs Product

Orientation
Market Orientation
Market orientation is an approach to marketing that focuses on meeting the
specific demands (desires and needs) of customers and potential customers.
It is an outward looking process where they focus on the products that they
can sell rather than selling products that they can make.

Advantages & Disadvantages of Market Orientation

Advantages

Greater flexibility-firms can respond quickly to changes in the

market which could increase the profit

Lower risks-with proper market research and analysis.

Constant feedback from consumers which makes the companies

be adapted to changing tastes

Disadvantages

Market research, R&D costs can be very expensive.

No Guarantee that the approach will success.

Respond to every passing consumer trend or fashion will

overstretch the resources and end up doing anything particularly
well

Product Orientation
An approach that focusses on making products a business knows how to
make well (inward looking).

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 They focus on selling products that they make, rather than making
products that they can sell.

Businesses prioritise research and development (R&D) over market

research. Product orientation tends to be used by highly innovative and
teach-savvy manufacturers.

Examples:

Apple

Boeing

Gilette

Google

Tesla

Advantages & Disadvantages of Product Orientation

Advantages

Products’ quality can be assured

The firm can control overs its operation including the producing
efficiency

Disadvantages

High failure rate-the needs of the market are ignored

High risks-as the frequent changes in fashion and tastes

💡 Whether an organisation chooses to be product or market orientated

largely depends on the nature of the product.
- Market orientation is suitable for mass-market products (sports shoes,
stationaries, breakfast cereal)
- Product orientation is more suitable for innovative and high-end
quality products or unique products. (designer clothing, specialised
equipment)

Market Share

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 Market Share refers to the sales revenue that an organisation accounts for
within a given market or industry.

A percentage figure to show the firm’s sales as a proportion of the total sales
in the market

Common business objective as it is an indication that their marketing

strategies have been successful against competitors.

Firms with the largest market share in the industry is known as market leader

Market Size
Market Size: Total number of individual customers or the total value of sales
revenue in a market OR the number of potential buyers in the market.

Businesses are interested in knowing the market size of a good or services

before launching a new product in the market.

E.g. The market for smartphones is significantly larger than market for
lawnmowers.

Common Methods of Measuring size of a market

Potential number of customers in a market

Sales volume (quantity products sold to customers)

Sales Value or Sales Revenue (Amount spent by customers on the

product sold by the firms)

Number of competitors in the market. The greater the barriers of entry

into the market, the fewer the number of rivals will exist in the market.

4.1 Introduction to Marketing 4

 Market Growth
Market Growth refers to an increase in the size of a market. Usually
measured by the rise in total sales revenue of the market or industry.

Another common business objective for businesses.

Growth is beneficial for a business as it gains from an increase in sales

revenue and profits. Although growth benefits the business, it also attracts
new competitors in the market.

E.g. Smartphone market is dominated by Samsung and Apple, it has

attracted more manufacturers such as Xiaomi, Oppo, Vivo, etc.

Example:
Calculate the market growth in the market for candidates studying IB Diploma
Business Management based on the following figures:

((30861-3622)/3622)*100 = 752.04307013%

💡 If the market growth is positive, Market size is growing

If the market growth is negative, market size has shrunk

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