4.1 Final Marketting

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4.1 The role of marketing
Section 4 Marketing
© Licensed to Dubai International Academy

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Unit content
Assessment
Unit objective
Marketing and its relationship with other business functions AO1
The differences between marketing of goods and marketing of servic AO2
es
Market orientation versus product orientation AO2
The difference between commercial marketing and social marketing AO2
Characteristics of the market in which an organization operates AO1
Market share, the importance of market share and market leadershi AO3 and AO4
p
The marketing objectives for for-profit and non-profit organizations AO3
How marketing strategies evolve as a response to changes in custo AO3
mer preferences
The role of marketing and the CUEGIS concepts
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• What is the ultimate goal of marketing?

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Needs and wants

• People have difference needs and wants.
• Marketing exists to address people’s needs and wants.
• Ultimately, the goal is to make customers want to buy a
firm’s products.
Needs
• These are essential necessities that all humans must
have to survive.
• e.g. Food, shelter, water and warmth.
Wants
• These are human desires (i.e. things that people would
like to have.
• Humans have infinite wants
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What is marketing? It involves:

According to the • Identifying the needs and
Chartered Institute of wants of customers.
Marketing, the definition • Anticipating and predicting
of marketing is: what customers want in
“Marketing is the the future.
management process • Considering the price,
involved in identifying, product, place and
anticipating and promotion
satisfying consumer • Earning a profit
requirements profitably.”

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Generic Marketing Objectives

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Marketing and its relationship with other

business functions

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Marketing’s relationship with other

business functions
Operations management
• Work together to research, develop and launch

products to meet needs and wants of customers
Finance
• Work together to set appropriate budgets
Human resource management
• Ensure the firm has the right quantity and quality of

workers to meet the needs and wants of customers
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The differences between marketing of goods

and marketing of services

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Goods versus Services

• What is the difference between goods and services?
• Discuss with a partner and let the rest of your class
know your thoughts.

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Marketing goods versus services

• Goods are tangible items 1. Intangibility
whereas services are 2. Inseparability
intangible.
• i.e. Goods have a physical 3. Heterogeneity
presence and can be 4. Perishability
touched unlike services.
• Goods and services are sold
with purpose to provide utility
to the user.
• The marketing of goods and
services will have four key
differences:
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Differences in marketing goods & services

Intangibility Inseparability Heterogeneity Perishability
Marketer must focus Services cannot be Services cannot be Services cannot be
on marketing the made ahead of time mass produced as stored. Thus, if they
key benefits to the as they are each service do not get used
consumer in lieu of consumed as they experience is unique when available, the
physical qualities of are being produced. to the individual. service will not be
the product. consumed.
Sports cars can be Services such as a Reviews on platforms Empty hotel rooms or
marketed on their hair cut, or a train ride such as TripAdvisor airplane seats will
appearance unlike can only be produced or app stores show cause a loss of
car insurance when they are how each consumer potential revenue to a
services. consumed. experience is unique. business.

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Theory of Knowledge
Is it more difficult to market a good or service?

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Market orientation versus product

orientation

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Market oriented firms

• A firm that is market Watch this video about
oriented will look to the McDonald’s new McPlant burger.
market to see what • Why have they decided to
consumers need and introduce this plant-based
want. burger?
• i.e. they are outward
looking
• A firm will produce
products to fulfill those
needs and wants.

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Advantages & disadvantages of market

oriented firms
Advantages Disadvantages
• Greater flexibility • Market research is
• Able to respond quickly to needed
the changes in the market • This is to find out what
because of its use of consumers want. This
market information can be very expensive.
• Lower risk
• No guarantee this
• Firms can be confident
their products will sell as
approach will work
they are tailored to meet • This is due to the
the needs and wants of dynamic nature of the
consumers. external environment.

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Product oriented firms

• The Bugatti Veyron, one of the • A firm that is product
fastest production cars in the oriented will look at what
world, retails for almost they can make instead of
USD$2 million. making products that they
• It is estimated to make a loss can sell.
of about $6.25 million per car • i.e. they are inward looking.
due to R&D costs. • These firms focus on
• Does Bugatti consider the making a product that they
market’s needs and wants? hope will be demanded by
the market.
The Bugatti Veyron can reach

a top speed of 431.072 kph.
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Advantages and disadvantages of product

oriented firms
Advantages
• Quality can be assured
• More control over operations
Disadvantages
• Needs of the market are
generally ignored
• High risk strategy with high Google Glass, wearable smart
failure rate glasses, is an example of how
product oriented firms can face
• High research and development significant disadvantages.
costs
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Over to you
• Hoang textbook
• Question 4.1.1
Sony
• Page 355
• Answer all parts

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The difference between commercial

marketing and social marketing

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Commercial marketing
• Commercial marketing In the below advertisement:
uses marketing strategies 1. Identify the wants of the target
to meet the needs and consumer.
wants of customers in a
profitable way. 2. What benefit does this product
bring to the consumer?
• They focus on benefits to
3. What are the ethical issues
customers and the
ignored by the firm behind the
business.
product?
• Ethics play a lesser role
as firms aim to reap
private benefits such as
sales and profits.

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Social marketing Watch the advertisement

• Social marketing aims to use below:
commercial marketing methods to
bring changes that benefit society. 1. Identify the purpose of
• Examples include: the advertisement.
• Anti-smoking campaigns 2. What behaviour is the
• Anti-drink-driving campaigns advertisement trying to
• Unwanted teen pregnancies
• Health awareness
encourage?
• The challenge of social marketing
is getting people to change their
behaviour.
• Government bodies and non-profit
organizations are typically the
ones using social marketing
campaigns to change societal
behaviour.
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Differences between commercial

and social marketing
Commercial Social
To change behaviour in
Purpose To earn profit.
society.
Benefits Individuals Society
The public sector and

Main For-profit firms in the
non-profit firms in the
users private sector.
private sector.

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Over to you
• Hoang textbook
• Question 4.1.2
Singapore littering
policy
• Page 357

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Characteristics of the market in which an

organization operates

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What is a market?
• A market is a place or Consumer
process whereby markets cater
customers and suppliers for private
individuals and
trade. the general
• There are two types of public.
markets:
1. Consumer markets
2. Producer markets Producer
markets cater
for businesses
and
governments.

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Characteristics of a market
• Managers are interested in the characteristics of the
market in which their business operates.
• These characteristics include:
• Market size: to calculate the amount of profit they may make from a new business, product, or
service
• Customer base: the people who may buy your product or service in a specific market
• Barriers to entry: high start-up costs or other obstacles that prevent new competitors from easily
entering an industry or area of business.
• Competition: Competition stimulates firms to lower their own costs and run their businesses as
efficiently as possible.
• Geographic characteristics: suggests to businesses the places where products, goods, and services
are likely to succeed.
• Demographic characteristics: Demographic data is used by businesses to help them understand the
characteristics of the people who buy their products and services.
• Market growth rate: It often spurs innovation, helping you to differentiate in the market and stave off
competition.
• Seasonal and cyclical characteristics: Seasonality can be used to help analyze stocks and economic
trends

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Characteristics of consumers in China

• Use your digital device to scan this
QR code to access the article
Chinese Consumer Behaviour: 7
Key Features for Brands To Know.
• Find one example from the article
per market characteristic of the
Chinese market.

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Market share, the importance of market

share and market leadership

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Calculating market share

• Market share refers to an organization's share of the
total value of sales within a specific industry.
• Market share is calculated using this formula:

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Market leadership
• Firms with high
market share are
known as market
leaders.
• Facebook,
YouTube and
WhatsApp are
the market
leaders for
social
networks
worldwide (as
of July 2020).

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Calculating market concentration

• Market concentration refers to the degree of
competition within a market.
• Market concentration is calculated by adding the market
shares of the largest few firms in a market.
• The sum of those market shares is known as the
concentration ratio

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The importance of market share

• Market leaders benefit from
their status, price setting
abilities and are less
threatened by competition.
• More market power
• Price setting
• Economies of scale
• Correlation between profit and
sales
• Brand recognition > Brand
loyalty
• Increased R&D, product
development, innovation
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• A common objective of established

businesses is to increase their
market share. This can be done
by:
• Brand promotion
• Product development
• Motivating and training their
workforce

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Over to you
• Hoang textbook
• Question 4.1.3
Samsung
• Page 360

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The marketing objectives of for-

profit and non-profit organizations

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Marketing objectives of for-profit and non-

profit organizations
For-profit firms Non-profit firms
• Marketing objectives • Marketing objectives may
may include: include:
• Increase sales • Increase membership
revenue • Generate awareness for
• Increase market the firm’s cause
share • Create positive attention to
• Improve product and the firm’s operation
brand awareness • Improve brand recognition
of the firm
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Over to you
• Hoang textbook
• Question 4.1.4
FC Barcelona
• Page 362

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How marketing strategies evolve as a

response to changes in customer
preferences

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Adapting marketing strategies to changing

customer preferences
• Marketing has been around
since the days of cave
people. However, marketing
strategies have had to
evolve over time due to:
• Changing consumer tastes
• Shorter product life cycles
• Internet and mobile
technologies
• Competitive rivalry
• Globalization

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The role of marketing and the CUEGIS

concepts

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The role of marketing and CUEGIS

• Marketers need to be mindful of cultural differences, ethical
considerations and innovation.
• An example of this can be seen from the earlier article about
Chinese Consumer Behaviour
: 7 Key Features for Brands To Know.
Innovation Ethics Culture
95% of Chinese The rise of scam sites Marketers need to be

consumers prefer that have duped an mindful of how Chinese
omnichannel shopping estimated 1/3 of all consumers feel they are
(powered by innovative regular Chinese online viewed by others (i.e.
technologies to help shoppers has created a “face”) as well as their
consumers shop from a need for assurance via strong sense of national
mobile device, laptop or detailed product pride.
bricks-and-mortar store). communication.

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Omnichannel shopping - innovative retail

marketing

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Cultural differences when marketing in

China
• Use your digital device to
• According to Dragon
scan the QR code to read
Social, a social media more about the Top 5 Big
marketing company based Mistakes Foreigners Make
in China, foreign When Marketing in China.
companies often fall prey to
five common marketing
mishaps due to lack of
cultural understanding of
the market.

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Over to you
• Hoang textbook
• Question 4.1.5
Banning pester power
• Page 366
• Question 4.1.6
Nestlé’s offensive
advertising: a strategy?
• Page 366

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Theory of Knowledge
Given the diverse nature of international cultures

and etiquette, can marketers ever know what is
ethically right and what is ethically wrong?

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Review tasks
• Hoang workbook
• Topic 4.1
• Pages 162 to 167
• Answer all questions

4.1 Final Marketting

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BUSINESS MANAGEMENT

4.1 The role of marketing

© Licensed to Dubai International Academy

• What is the ultimate goal of marketing?

© Licensed to Dubai International Academy

Needs and wants

What is marketing? It involves:

© Licensed to Dubai International Academy

Generic Marketing Objectives

© Licensed to Dubai International Academy

Marketing and its relationship with other

© Licensed to Dubai International Academy

Marketing’s relationship with other

• Work together to research, develop and launch

• Work together to set appropriate budgets

Human resource management

• Ensure the firm has the right quantity and quality of

The differences between marketing of goods

© Licensed to Dubai International Academy

Goods versus Services

© Licensed to Dubai International Academy

Marketing goods versus services

Differences in marketing goods & services

© Licensed to Dubai International Academy

Is it more difficult to market a good or service?

© Licensed to Dubai International Academy

Market orientation versus product

© Licensed to Dubai International Academy

Market oriented firms

© Licensed to Dubai International Academy

Advantages & disadvantages of market

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

Product oriented firms

The Bugatti Veyron can reach

Advantages and disadvantages of product

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

The difference between commercial

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

Social marketing Watch the advertisement

Differences between commercial

Benefits Individuals Society

The public sector and

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

Characteristics of the market in which an

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

Characteristics of consumers in China

© Licensed to Dubai International Academy

Market share, the importance of market

© Licensed to Dubai International Academy

Calculating market share

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy

© Licensed to Dubai International Academy