Marketing - Business Study Notes

The focus of this topic is the main elements involved in the development and implementation of
successful marketing strategies.

Role of Marketing
Marketing is the process of developing a product and implementing a series of strategies aimed
at correctly promoting, pricing and distributing the product to a core group of customers.

strategic role marketing goods and services

Strategic role of marketing refers to the ability of the business to develop goods and services
that develop a long-term relationship with a specific customer base and, in doing so, generate
sales, revenue and profit.
- These activities impact all four key business functions.
- Aims to achieve long term goals, including profit maximisation.
- Profit maximisation is the ability of a business to achieve maximum profit with low
operating expenses.

interdependence with other key business functions

Interdependence refers to the mutual dependence that the key business functions have on one
another. This means what happens in one KBF affects the others.
- Eg, marketing concept which states that all functions of a business are involved in
satisfying customer’s needs and wants while achieving the business goals.

Marketing and Marketing relies on finance to allocate/ manage funds appropriately which
Finance marketing requires to operate → avoid liquidity/ solvency

Finance relies on marketing to promote, price and distribute goods/ services

appropriately → generate/ maximise profits

Marketing and Marketing relies on human resources to hire, train and develop employees who
Human Resources sell the good/ service and conduct market research → able to direct marketing
strategies more effectively, hence maximise profits

Human resources relies on marketing to promote, price and distribute

good/service well, hence generate profit → staff can be paid (worker satisfaction +
legal)

Marketing and Marketing relies on operations to create the desired and designed good/ service →
Operations meet customer expectations, thus maintain positive reputation and generate sales

Operations relies on marketing to promote, price and distribute good/ service

effectively → maximise customer awareness + sales/ profit

production, selling, marketing approaches

Marketing has evolved drastically over time...
Production approach (1820s - 1920s): focused on the production of goods
and services.
Case study: Model T Ford
- first mass produced car
- reinforced the belief during the production approach era - “if we build
it, they will buy it”
- demand exceeded supply

Sales approach (1920s - 1960s) : emphasised selling because of increased competition.

- “Anything will sell if promoted heavily enough”
- Ignored the wants and needs of consumers

Marketing approach (1960s - present): focuses on finding out what customers want, through
market research, and then satisfying that need.
- Customer orientation
- Customers are paramount (King or Queen)
- Huge increase in variety of goods/ services

types of markets – resource, industrial, intermediate, consumer, mass, niche (NIIRMC)

A market is a group of individuals, organisations or both that:
- Need or want products (goods or services)
- Have the money (purchasing power) to purchase the
product
- Are willing to spend their money to obtain the product
- Are socially and legally authorised to purchase the
product
Market Definition Example

Industrial Includes industries and businesses that purchase materials - Bakers Delight (buys flour
to use in the production of other products or in their daily to make bread)
operations. - Sony (buys plastics and
metals to produce
televisions)

Intermediate Consists of wholesalers and retailers who purchase finished

products and resell them to make a profit.
-
-
Woolworths
Toy Stores 🧸

🌾⛏
Resource Consists of those individuals or groups that are engaged in - Rio Tinto (mining
all forms of primary production, including mining, agriculture, corporation)
forestry and fishing. - Farmers

Consumer Consists of individuals and households who intend to use or

consume the products that they buy. Consumer markets can
-
-
Entertainment (cinema)
Food (supermarkets)
🍿
be divided into two categories:

Mass - Petrol
Exists where there is a large demand for a standard product. - Ford Model T (production
The business does not tend to target specific groups of approach)
buyers as it is assumed everyone already wants the product. - Electricity
- Water

Niche
A narrowly selected market with specific needs or demands
-
-
Surf shop 🏄
Musical instrument shop 🎷
(also known as a concentrated or micro market) - Rolls Royce cars

Influences on marketing
factors influencing customer choice – psychological, sociocultural, economic, government
(PEGS)
Customer choice (buying behaviour) refers to the decisions and actions of customers when they
search for, evaluate, select and purchase goods and services.

Psychological factors are the personal characteristics of individuals that influence their
behaviour. (Internal)
→ often the most effective and common form of marketing a product
Customers are influenced by:
- Motives: individuals reason for doing something.
- Attitudes: individual’s overall feeling about an object or activity.
- Personality: the collection of all the behaviours and characteristics that make up an
individual.
- Self-image: how an individual views themselves.
- Learning: changes in an individual's behaviour caused by information and experiences.

Sociocultural factors are those that relate to cultural background,

socioeconomic status, and people and groups that affect an
individual's buying behaviour. (External)
There are four main sociocultural factors:
- Social class/ socioeconomic status: individuals relative rank in
society based on their education, income or occupation.
- Culture
- Family
- Peer groups: people with whom a person closely identifies,
adopting their attitudes, values and beliefs.

Economic factors: influence of general economic conditions (unemployment levels, interest

rates, boom or recession) along with socioeconomic status of the individual (their income).
Case study: McDonalds
- Covid 19 restrictions → less disposable income, high unemployment → global recession
affecting all restaurants around the world
- Covid 19 resulted in an overall fall of 2% in revenue

Government factors set the economic climate which will directly or indirectly influence business
activity and consumer spending.
Can influence customer spending in many ways…
- Legislation (eg, age restrictions placed on alcohol, tobacco)
- Fiscal policy (government spending and taxes)
- Monetary policy (interest rates)
- Government assistance (family payments)
consumer laws
Australian Competition and Consumer Commission (ACCC)
promotes competition and fair trading and regulates national
infrastructure to make markets work for everyone.
ACCC can:
- Take the business to court
- Fine manufacturers up to $6600 directly
- Issue public warning notices

The Australian Consumer Law (ACL) is:

- Set out in the Competition and Consumer Act 2010 (Cwth) (CCA)
- Enforced and administered by the ACCC, state and territory consumer agencies (eg,
Fair Trading NSW), and the Australian Securities and Investment Commision (ASIC)

- deceptive and misleading advertising

Creates an inaccurate impression about some characteristics of a
product, often in a deliberate effort to convince consumers to make
the purchase.

Eg, fine print that is difficult to read, unsubstantiated data of the

benefits of products

Bait and switch advertising involves advertising a few products at

reduced and, therefore, enticing prices to attract customers. When the
advertised products quickly run out, customers are directed to higher priced items.

Case study: Coles “baked today, sold today”

- fined $2.5m in 2015 by ACCC for misleading
advertising as loaves were preheated and frozen
off site

Case Study: Nurofen

- misleading “specific pain range”, claimed to be targeted for
different pains, when in actuality all the products contained the
same active ingredient
- fined $6 million

- price discrimination
The setting of different prices for effectively the same
product in separate markets.

Case study: Gender segmented products

- male VS female razors, pink VS blue toys for
girls and boys
- sold for various prices (gender discrimination)
 - business sell and charge more

- implied conditions
Unwritten and unspoken terms of contract.
Under CCA, goods purchased by consumers must be:
- Acceptable quality (up to standard for its price & free of defects)
- Fit for purpose
- Match description or sample

- warranties
Guarantees by a business to repair or replace a product if it malfunctions, usually valid for a
limited period of time.
- All products have implied warranty → by law a business must refund the client’s money
or exchange goods if they are recognised to have been faulty when it left the store.

Case study: Bunnings Warehouse

- return policy - “All our plants (except seedlings) are guaranteed for 12 months. If you're
not 100 percent happy, return your plant (with receipt or tax invoice) and we'll refund it,”
- satisfy customer service + competitive advantage as their warranties may be better than
those of other plant shops

ethical – truth, accuracy and good taste in advertising, products that may damage health,
engaging in fair competition, sugging
Ethical standards are the ‘moral’ factors that affect marketing decisions beyond legal
requirements. Actions can sometimes be legal, however unethical to take.
→ unethical actions could harm the business reputation and hence sales and profit

Truth, accuracy and good taste in advertising relates to the loopholes and areas that business
could exploit.
- Advertising is a paid, non-personal message communicated through a mass medium.
- Product placement is the inclusion of advertising in entertainment.

Case study: Dyson corrale hair straightener

- may be interpreted to imply that ethnic, curly hair should be
straightened, rather than embraced
- Good taste in advertising is highly subjective - some might
find the advert offensive and others may not.

Products that may damage health refers to marketing campaigns related to promoting
dangerous or unhealthy products.
→ there are often laws in how these goods are marketed (eg, cigarettes can not be advertised
in Aus)
Case study: Coca-Cola advertisement withdrawn
- according to the advertisement, Coke does not rot your teeth, is not highly caffeinated,
and does not make you fat. The message that was aimed to be conveyed was that there
can be a place for Coca-Cola in a balanced lifestyle.
- ACCC found it to be misleading

Engaging in fair competition refers to not exploiting grey areas or loopholes to gain an
advantage over competitors.
- Large chain stores, such as woolworths, set unrealistically low prices to drive smaller
competitors, such as corner grocers, out of the market
- We do not want a monopoly → prices would increase for consumers + less variety

Sugging is when a business disguises attempts to sell a product as market research →

unethical as it aims to deceive
- The word “sug” stands for Selling Under the Guise (of research)
- Eg, may contact a consumer pretending to conduct a survey, but actually try to sell
something.

Marketing Process
(SMEIDI)
The marketing process refers to the construction of a marketing plan. The steps include…
 situational analysis - SWOT, product life cycle
Situational analysis: enables management to gain an understanding of the businesses current
position and where it is headed.
- uses tools such as SWOT analysis and an assessment of the product’s position on the
product life cycle.
- Most crucial step of the marketing plan

A SWOT analysis involves the identification and analysis of the internal strengths and
weaknesses of the business, and the opportunities and threats from the external environment.
- strengths & weaknesses = internal forces (within business control)
- opportunities & threats = external forces (outside business control)

SWOT analysis - Starbucks

Strengths Opportunities
- Strong brand recognition - Easy access to new countries
- Clients love the atmosphere (free wifi) - Agreements w/ movie producers
 - Present all over the world
- Superb supply chain management

Weaknesses Threats
- Product is not customised to local tastes - Saturation of the US market
- Not easily affordable in all countries - Healthier lifestyle trends
- High employee turnover

The product life cycle consists of the stages a product passes through: introduction, growth,
maturity and decline.
- different marketing strategies required at each stage

- small market size and minimal growth

Introduction
- substantial research and development costs have been incurred
- marketing costs might be higher, e.g. launch promotion
- unlikely companies will make a profit

- rapid growth in sales and profits

Growth
- profits arise due to economies of scale
- companies can invest in increasing their market share

- competition is intense as companies fight to maintain their market share

Maturity
- marketing spend is monitored
- spending on research and development is restricted to product modification and
improvement

- market is shrinking, reducing the overall amount of profit that can be shared amongst
Decline
competitors
- transfer production to a cheaper facility
- sell the product into cheaper markets

Case study: Coca-Cola

 - Constantly changing their marketing plan to respond to external environment (changing
social trends)
- Released low sugar products and smaller serving sizes (Coke “mini”)
- “New Sprite recipe delivers great taste but with 40% less
sugar”
- Coca-Cola soft drink and water brands are now produced in
100% recycled plastic. This includes Sprite, Mount Franklin etc
- McDonalds Australia has launched 38 new Frozen Coke
flavours → greater variety

market research
Market research is the process of systematically collecting, recording and
analysing information concerning a specific marketing problem. There are 3
steps:
1. Determining information needs
2. Collecting data from primary and secondary sources
3. Analysing and interpreting data

Primary data: Secondary data:

facts and figures collected from original sources for facts and figures already collected by some other
the purpose of the specific research problem. person or organisation for another purpose.

3 main methods used to gather: 2 types of secondary data:

1. Survey method, eg, interviews, focus
groups, questionnaires
2. Observation method: observing the
behaviour of customers. Could be in store
or via cameras or machines (eg, cash
register or loyalty card collecting data on
purchase patterns)
3. Experiment method: altering factors to
determine how it changes behaviour (eg,
placement of items in store)
1. Internal data refers to information that has
already been collected from inside the
business, eg, customer feedback, sales,
management reports
2. External data is collected from sources
outside the business such as government
including the Australian Bureau of Statistics,
internet sources, industry associations etc

Statistical interpretation analysis is the process of focussing on the data that represents
average, typical or deviations from typical patterns.

Case study: Shapes

- received more than 2000 direct requests for the original Pizza flavour
to be returned
- After receiving backlash in early 2016 for its new range of “new and
improved” Shapes flavours, Arnott’s has taken customer feedback
(internal data) on board and returned the much loved original Shapes
to the shelves
 - invested heavily in extensive market research → satisfy customer desires

establishing market objectives

Market (marketing) objectives are the realistic and measurable goals to be achieved through the
marketing plan. They must be SMART.

The 3 most common marketing objectives include:

Marketing Explanation Example
objective

Increasing Market share refers to the Case study: Coles and Woolworths
market share business’s share of the total - discounted bread heavily to try to retain their
industry sales for a particular market share in the retail food industry following
product. intense pressure from competitors such as ALDI.

The greater a businesses market

share, the greater their sales and
profitability.
- Small market gains often
translate into large profits

Expanding the Product mix is the total range of Case study: Coca-Cola company
product mix products offered by a business. - Large range of beverages satisfying various
consumer needs/wants
Providing a wide range of
products to allow the business to
target more customers → greater
profit

Maximising Customer service refers to how Case study: Coles

customer well a business meets and
service exceeds the expectations of
customers in all aspects of its
operations.
Good service = improved
customer satisfaction, establishes
loyal customer base, increase
possibility of repeated purchases,
positive reputation → increased
profits
- “Coles ditches plastic collectible toys in bid to
reduce waste”
- Changed marketing strategy in order to
maximise customer service
- The decision to stop the ‘Little Shop Collection’
promotion in 2021 was based on market
research (primary research) that found reducing
waste and plastic packaging was a key concern
among shoppers.
 identifying target markets
A target market is a group of present and potential customers to which a business intends to sell
its product.
Businesses may segment their target markets by the following factors:

Target markets can be divided into:

- Primary target market: market segment at which most of the marketing resources are
directed
- Secondary target market: smaller and less important market segments

Why is it important for a business to identify and select a target market?

- More efficient use of marketing resources
- More relevant promotional materials
- better understanding of consumer buying behaviour
- More effective collection of data

3 approaches to identifying & selecting a consumer target market

mass-marketing approach: the seller mass-produces, mass-distributes and mass-promotes one product
to all buyers. Eg, petrol

market segmentation approach: the total market is subdivided into groups of people who share one or
more common characteristics. Eg, kids toothpaste
niche market approach: a narrowly selected target market segment. Eg, moisturiser advertised for acne
prone skin

Case study: McDonalds

- Workers breakfast on the go, children happy meals, or free wifi work space → segment
market to cater for wider variety of customers

Case study: Sportsgirl

- Market research undertaken by fashion retailer Sportsgirl revealed a primary target
market of 18-25 year old females.

developing marketing strategies

Marketing strategies are actions undertaken to achieve the business’s marketing objectives
through the marketing mix (4 P's - product, price, promotion, place of distribution)

Element Definition Case study: McDonalds

Product Refers to the g/s a business provides
to their target audience.
Must consider the quality, branding,
logo, product positioning against
competitors e.g. luxury vs. budget
- “Angus Chicken Deluxe” = more
expensive
- packaging does not just protect the
burgers but reinforces the purchase
decision and promotes a consistent
brand design.
- colour and symbol (branding) of the
“golden arches”

Price Refers to how much a business's g/s - Loose change menu uses the loss
cost. leader strategy which undercuts
competitors and attracts customers to
Must consider cost to produce, desired buy a loose change item as well as a
profit margin, competitors price and more expensive item.
price customers are willing to pay.
- Low price may encourage sales
but may also make the product
look poor quality and cheap.
Promotion Methods used by a business to create
and maintain consumer awareness
towards a particular product.
Businesses aim to reach their t/m at
the right place and right time, in order
to reveal to consumers why they
“need” their g/s → maximise sales and
profit.
Place refers to where and how people buy a
business product.
Includes intermediaries (eg,
wholesaler, retailer), channel choice
(creates image) and physical
distribution (trucks, trains,
warehousing, etc)
implementation, monitoring and controlling - developing a financial forecast; comparing actual
and planned results, revising the marketing strategy
Implementation involves deciding which marketing strategies will be put into action.
- uses TV, billboards, radio, social media
and sports sponsorship to advertise.
- In Australia, Mcdondalds uses 30% of its
advertising budget on digital media such
as Facebook and Instagram.
- With over 39,000 restaurants worldwide,
Mcdonalds uses a selective distribution
channel (selling products at select
outlets in specific locations).
- In 2019, they introduced delivery
services which experienced an increase
during Covid19.
Monitoring involves checking and observing progress of the marketing plan. This will require
gathering information and reporting important changes.

Controlling involves comparing actual performance against planned performance (KPI’s) and
taking corrective action if needed (eg, revising the marketing strategy).

A financial forecast is a budget of expected revenues and costs over a period of time.
Requires 2 steps:
1. Cost estimate: how much will the plan cost? It is divided into market research, product
development, promotion and distribution.
2. Revenue estimate: how much revenue is the plan expected to generate?

Comparing actual and planned results can be determined by three key factors:
1. Sales analysis
- Comparing actual sales with forecast sales to determine the effectiveness of the
marketing strategy
- Inexpensive to collect and process, but does not reveal profit level
2. Market share analysis
- Comparing market share of the business with competitors
- If sales revenue declined, but market share remained the same… overall industry
sales may have fallen (eg, due to a downturn in the economy)
- A decline in both market share and sales revenue would however be a cause for
concern and marketing strategies would need to be reviewed.
3. Market profitability analysis
- business breaks down the total marketing costs into specific marketing activities
(eg, advertising, transportation, administration) → better assess effectiveness
and allocate resources

Revising the marketing strategy

Changes include:
- Price modifications: to correspond to changes in the external environment, eg, reduce
prices during economic recession
- Production modifications: upgrade products to ensure competitive advantage, eg, new
products
- Promotion modifications: depending on the stage of the product life cycle, eg, increase
promotion in establishment phase
- Place modifications: distribution channels to expand to cater for demand, opportunities in
overseas markets as old markets may decrease

Case study: McDonalds Create Your Taste menu

- McDonalds developed a financial forecast to help them implement the Create Your Taste
menu with greater ease. They estimated that each franchisees would need to invest
roughly $125,000 to install technology such as the “Create Your Taste” kiosks.
 - However, through monitoring, Mcdonalds discovered that
customers were complaining that their “personalised” burgers
were too expensive and took too long to cook. Some
franchisees also complained about the cost of the program,
and said it slowed down kitchen operations and targeted an
upscale customer that McDonald’s shouldn’t be going after.
- McDonalds took corrective action (controlling) and morphed
CYT into the ‘Gourmet Creations’ range where the most
popular options chosen by customers were placed on the
menu.

Marketing Strategies
extended marketing mix: includes the original 4Ps (product, price, place and promotion), as well
as people, processes and physical evidence (3Ps) which are increasingly relevant due to the
growth of service-based businesses within the economy.

market segmentation, product/service differentiation and positioning

Market segmentation occurs when the total market is subdivided into groups of people who
share one or more common characteristics.
- Aim = increase sales, market share profits by better understanding and responding to
desires of the different target customers.

Case study: Nike

- recently began targeting the Middle East female fitness market with the introduction of a
performace hiijab for Muslim women.

Product/service differentiation refers to the process of developing and promoting differences

between a business’s products or services and those of competitors.

Differentiation Summary/ examples

Customer - Customers desire personalised, caring and high quality service

service - Failing to provide excellent customer service → lost sales and damage to a
business’ competitive position.
- Can also include presentation of the premises, atmosphere, or range of products.
Environment - Is this business conducting environmentally friendly practices?
- Increasing environmentally conscious market
Case study: IKEA
- Praised for aiming to be ‘climate positive’ by 2020.

Convenience - ease of obtaining and using product/ service

Social/ ethical - whether a business is involved in exploiting or misleading behaviours

- Eg, Fair Trade movement for coffee, chocolate and tea

Product/ service positioning refers to the technique in which marketers try to

create an image or identity for a product that sets it apart from the image of
competing products.
Eg, Rolex = expensive and luxurious

products – goods and/or services

Products are goods or services that can be offered in exchange for the purpose of satisfying a
need or a want.
Most products are combinations of tangible and intangible components:
- Tangible benefits = physical attributes such as design, color and features.
- Intangible benefits = such as prestige, image associated with product, after sales service
(eg, warranty)

- Branding
A brand is a name, term, symbol (logo), design or any combination of these that identifies a
specific product and distinguishes it from its competition.

Branding strategy Definition/ features Example

Manufacturer’s brand owned by the manufacturer, well-known, offer reliability and Sunbeam, Kraft
or national brand constant quality

Private or house owned by retailer or wholesaler, allowing them to buy products at Myer owns Miss
brand lower cost Shop

Generic brands no brand name, aimed at low budget buyers, widely available in Woolworths
supermarkets select

- packaging
Packaging involves the development of a container and the graphic design for a product.
Why is packaging important?
- Attracts customers’ attention
- Preserves/ protects the product
 - Makes transportation easier
- Communicates a message (eg, environmentally friendly)

Labelling is the presentation of information on a product or its package (eg,

ingredients, shelf life, package size, country of origin)
- The Australian Consumer Law (Competition and Consumer Act 2010) is associated with
labelling

Case study: Tropicana

- Tropicana’s 2009 redesign of its packaging led to a 20% drop in
sales (lack of product recognition by existing customers)

Case study: Coca-Cola

- “Share a Coke” campaign released in summer attracted
consumers with new and personalised packaging →
increased consumption of Coca-Cola over the summer period
+ got people talking about Coke again
- Young adult consumption increased by 7% during the
campaign, making 2011 the most successful summer ever.
- Traffic on the Coke Facebook site increased by 870% and
the Facebook page grew 39%.

price including pricing methods – cost, market, competition-based

Price refers to the amount of money a customer is prepared to offer in exchange for a product.
- Of all the marketing mix elements, price = most flexible

Influences on business pricing decisions include:

- cost of production
- marketing objectives
- competition in the marketplace
- location of the product on its life cycle
- levels of economic activity

Pricing method + definition When is it usually used?

Cost-based pricing: method derived from the cost of producing or purchasing a Mainly used by wholesalers
product and then adding a mark-up (predetermined % to reflect overheads such and retailers (eg, clothing)
as rent, as well as desired profit margin)

Market-based pricing: method of setting prices according to Eg, auctions, seasonal

levels of supply and demand (i.e. whatever the market is pricing on accommodation
prepared to pay).
- high demand forces prices up
- low demand keeps prices low
Competition-based pricing: price covers costs (cost of raw materials and the cost usually used when there is a
of operating the business) and is comparable to the competitor’s price. high degree of competition
from businesses producing
similar products.
eg, Coles vs Woolworths
homebrand bread

- A price leader is a major business in an industry whose pricing decisions

heavily influence the pricing decisions of its competitors.

- pricing strategies – skimming, penetration, loss leaders, price points

After a pricing method is chosen, various pricing strategies can be used to fine-tune the price.
- common for a business to use several strategies at once, even for the same product

Pricing strategy + definition How/why the strategy would Example

be used

Skimming: occurs when a business Works for products with Samsung

charges the highest possible price for
the product during the introduction
stage of its life cycle.
novelty features/ status (eg, Galaxy Fold
innovative technology). released in
April 2019 for
Allows business to recover US$2000
costs of research and
development (+ maximise
profits, attract attention)

Penetration: business charges the Discourages competitors “Netflix Australia launches tomorrow
lowest price possible for a new product from entering the market + from $8.99 a month” (2021)
or service so as to achieve a large achieve large market share - competition such as Stan have
market share. prices starting from $10 (2021)

Loss leader: product is sold at or below
cost price.
Note: large scale use of predatory
pricing, aggressive pricing is deemed
uncompetitive (illegal) by the ACCC
and can result in prosecution and
sanctions.
Used for special promotions,
especially retail stores, as a
tactic to attract extra
customers to the store. The
business assumes customers
will then buy other items
when in-store also.
Coles/ Woolworths $1 milk per litre is
sold below cost price. Milk is at the
back of the store and customers need
to pass other products and likely buy
these on their way.

Price points: selling products only at attracts customers to the $2.99 at Daiso regardless of their
certain predetermined prices store (eg, perception the wholesale price.
 products are good value) and
builds customer loyalty as
customers have an
expectation of a set price.

- price and quality interaction

Lower quality products are often sold at lower prices. A higher price may indicate to customers
that a product is of superior quality.
- By using lower quality inputs, businesses will have lower costs and can therefore sell
their products for a lower price or sell their products for the same price but make a
greater profit.

Prestige or premium pricing is a pricing strategy where a high price is charged to give the
product an aura of quality and status. Eg, Gucci → average price for a bag = $2,377

promotion
Promotion describes the methods used by a business to inform, persuade and remind a target
market about its products.
Promotion attempts to: (some examples)
- attract new customers by heightening awareness of a particular product
- encourage new and existing customers to purchase products
- increase brand loyalty by reinforcing the image of the product


- elements of the promotion mix – advertising, personal selling and relationship marketing,
sales promotions, publicity and public relations
The promotion mix is the various promotion methods a business uses in its promotional
campaign. Methods include: advertising, personal selling and relationship marketing, sales
promotion, publicity and public relations.

Advertising adds value to the product by altering consumer perceptions. Its purpose is to inform,
persuade and remind.
6 main advertising media in Australia:
- mass marketing - television, radio, newspapers and magazines
- direct marketing catalogues - catalogues mailed to individual households
 - telemarketing - the use of the telephone to personally contact a customer
- e-marketing - the use of the internet to deliver advertising messages
- social media advertising - online advertising using social media platforms such as
Facebook and Twitter
- billboards - large signs placed at strategic locations

Personal selling is when sales representatives deal with customers directly to

promote products in an attempt to make a sale.
- Common for businesses selling expensive, complex, or highly
individual products
- needs competent sales representatives otherwise sales and revenue
may decrease

Relationship marketing is the development of long-term, cost- effective and strong relationships
with individual customers eg, through loyalty programs

Case study: Woolworths

- Rewards was introduced in 2007

Sales promotion is the use of activities or materials as direct inducements to

customers.
- includes activities and materials such as coupons, samples and
point-of-purchase displays.

Publicity is any free news story about a business’s products.

- differs from advertising in that it is free and its timing is not
controlled by the business.

Case study: OceanSpray Cranberry Juice

- TikTok video of man skating while drinking OceanSpray
Cranberry Juice went viral with more than 25 million views →
enhance the image/ raise awareness of the product

Public relations are those activities aimed at creating and maintaining favourable relations
between a business and its customers.

Case study: McDonalds

- annual McHappy Day → fundraiser for Ronald McDonald House
Charities ($2 from every Big Mac sold on McHappy Day going directly to
RMHC)

- the communication process – opinion leaders, word of mouth

 Marketing managers use a number of channels to communicate their message.
- Aim = communicate clearly, efficiently and succinctly to their target market.

Often customers are willing to purchase a product if the business’s message is

communicated via opinion leaders and through word-of-mouth.

Opinion leaders are influential leaders, usually celebrities, with high power
among society to influence people.
- eg, celebrity endorsements
Case study: Puma
- Pop star Rihanna and TV personality Kylie Jenner, featured in a
marketing campaign, increased Puma's sales by an impressive 11% in
2016

Word-of-mouth communication occurs when people influence each other through conversation
(eg, face-to-face or online such as review websites)

place/distribution
Place or distribution are activities that make the products available to customers when and
where they want to purchase them.

- distribution channels
Distribution (marketing) channels refer to the routes taken to get the product from the factory to
the customer.

Distribution channel Examples

Producer to customer: simplest channel with no intermediaries tax advice, car repairs
- Common for services
Producer to retailer to customer: a retailer is an intermediary who buys from bulky or perishable products
producers and resells to customers such as furniture or fruit
Producer to wholesaler to retailer to customer: a wholesaler is an intermediary Common for most consumer
who buys in bulk, from the producer, then resells in smaller quantities to retailers goods
Producer to agent to wholesaler to retailer to customer: Agents are paid a when the producer does not
commission by the producer to sell to the wholesaler have a sales representative

- channel choice – intensive, selective, exclusive

The distribution channel depends largely on the location of the business’s market or market
coverage.
- Market coverage refers to the number of outlets a firm chooses for its product.

Intensive: business wishes to saturate the market with its product → product available for sale in
every possible outlet eg, many convenience goods (milk, Pepsi, newspapers)

Selective: using only a moderate proportion of all possible outlets eg, clothing, furniture and
electrical appliances are often distributed this way.
- customer prepared to seek out a specific outlet that stocks a certain brand.

Case study: Sukin Skincare

- utilises a selective channel choice, with the product available in Priceline, Coles and a
few other stores to demonstrate accessibility to eco-friendly products, but still ensure a
level of niche.

Exclusive: use of only one retail outlet for a product in a large geographical area. Often
used for exclusive, expensive products eg, Tesla

- physical distribution issues – transport, warehousing, inventory

Physical distribution is all those activities concerned with the efficient movement of the products
from the producer to the customer.

Transport How the product is moved from one place to another, either by road, air, rail or water.
Concerns include:
- type of product
- speed of delivery
- cost and distance to be covered

Warehousing set of activities involved in receiving, storing and dispatching goods. The storage of products
before distribution.
- acts as a central organising point for the efficient delivery of products

Inventory Inventory = any item of property held in stock by a business

Inventory control is a system that maintains appropriate quantities and varieties of products for
the target market.
- how the stock levels are managed
- Having the most economic quantity of stock (a+d of holding too much or too little stock)
 people, processes and physical evidence
This approach applies especially to services (eg, tourism, entertainment and hospitality)
Definition
People refers to the quality of interaction between the
customer and those within the business who will
deliver the service.
- It is essential that the business use
appropriately recruited, qualified and
trained employees → able to deliver
excellent service and thus leave a good
impression
- People are the most important element in
any service or experience.
Processes refers to the flow of activities that a business will
follow in its delivery of a service.
- Businesses need to ensure that their
processes are customer friendly and that
they satisfy customer needs.
- Must be highly efficient to achieve
customer satisfaction
Physical refers to the environment in which the service will
evidence be delivered.
- It also includes the location of the service
and the materials needed to carry out the
service (eg, signage, brochures, cutlery,
websites and seating)
- Business should provide high-quality
physical evidence to create an image of
value and excellence → gain trust of
potential customers to generate sales +
profit
Case study/ example
Qantas cabin crew
- Polite and
highly
trained
cabin crew
→ satisfied
customers
Online Dominos order and delivery
service
- new technology to allow them to
implement an efficient process →
meet customer wants (fast
service/ short lead time) → $$
McDonalds
- Each restaurant has a dedicated
team of trained customer care
staff who ensure the dining areas,
including any children's play
equipment, are kept exceptionally
clean at all times. All McDonald's
employees receive
comprehensive training on
cleaning procedures, and each
restaurant has a schedule of daily,
weekly and monthly cleaning
tasks. → customer satisfaction
e-marketing
E-marketing (electronic marketing) is the practice of using the internet to perform marketing
activities. It includes web pages, podcasts, SMS, blogs, and Social Media Advertising (SMA).

Case study: McDonalds

- uses a range of platforms, including websites, Facebook
and Instagram, to reach their target market more effectively
→ reinforces and reminds consumers of their brand →
consumers are more likely to purchase from McDonalds
over competitors, hence McDonald's market share is
increased
- customers can make a mymaccas account → encourages
consumer loyalty as loyal customers receive benefits and
discounts + increases competitive advantage as consumers
may find it convenient how they can pre order on the way

global marketing
Global marketing is the process of marketing a product that is sold around the world.
- Conditions are different in different markets around the world, so marketers must
reassess the marketing strategy that is used and adapt their marketing mix accordingly.

- global branding
Global branding is the worldwide use of a name, term, symbol or logo to
identify a business's products.
Eg, McDonalds’ golden arches

Why businesses may use a global branding strategy:

- It can be cost effective because one advertisement can be used in
a number of locations.
- It provides a uniform worldwide image.
- The successful brand name can be linked to new products being
introduced into the market.
- May add prestige to the product + reassure customers about its
quality → boost the business’ reputation and sales/ profits.
 However, marketing managers should be aware of cultural or linguistic differences and ensure
that their brand name is appropriate in certain countries.

- standardisation
- customisation

Definition Advantages + Examples

Disadvantages

Customised assumes the way the product
is used and the needs it
satisfies are different between
countries.
The marketing mix is tailored
to local needs.
More expensive but Weet-bix to change name in China
can lead to higher sales - rebranded as Nutri-Brex, to
as the business meets appeal to the demand for
the needs of local “clean and green” Australian
consumers. vitamins
- also prompted by potential
trademark issues as it seeks
to differentiate Weet-bix from
a close competitor,
Weet-a-bix

Standardised assumes the way the product Cost effective but may Apple’s iPhone is available in over
is used and the needs it not meet customer 100 countries and is the same
satisfies are the same the needs in specific design regardless of region.
world over. markets. - same features and looks

The marketing mix remains

(virtually) the same.

Case study: McDonalds

- uses a combination of a standardised and customised
global marketing strategy → able to cater to local tastes
and trends, whilst still being able to have a globally
recognisable brand
- Teriyaki McBurger in Japan → satisfy customers more
effectively and thus achieve a competitive advantage
and increased sales/ profit
- offering variations of their base menu of burgers, fries,
salads, hot beverages etc
- golden arches (standard across countries) helps
establish strong brand recognition
 - global pricing
Global pricing is how businesses coordinate their pricing policy across different countries.

Global pricing method Summary

Customised pricing occurs whenever consumers in different countries are charged different prices for the same
product.
- Allows a business to cover the added costs of exporting the goods, such as
transportation, taxes and warehousing.
- However, may result in customers becoming confused or annoyed

Market-customised sets prices according to local market conditions.

pricing - Allows marketers to vary the price depending on the level of demand and
competition within the overseas market, currency exchange rates and purchasing
power of local consumers.
- More flexible than customized

Standard worldwide practice of charging customers the same price for a product anywhere in the world.
pricing - Benefit of simplicity + consistent global brand image
- However, may not be maximising profits/ sales

- competitive positioning
Competitive positioning relates to how a business will differentiate its products.
- To establish a place in the market + competitive advantage in changing conditions

To differentiate successfully in a global market, the business should strive to develop product
leadership, positive customer relationships and operational excellence.

Case study: McDonalds (see above)