Unit 3 Investigating Marketing

Introduction to marketing

• If you want investment from the ‘Dragons’ what would you have to do • Now you are going to do the same!

Choose a product from the bag
• You have 10 minutes to plan a sales pitch to the class for investment into your company selling the product • What sort of things will you need to consider?


Product Where to buy description

How much to pay

What makes it different/better/wh y would customers need it





Objective • To understand what business objectives are set when carrying out marketing activities (how do you get customers to buy your products) • To understand what market segmentation is (how can you put them in groups) .

What are these pictures telling you? What does/would encourage Apple to develop the Ipods further? .

Are there any external factors that will affect how the product is advertised/sold/developed? . Where will this be sold? Why? 3. How and where will this product be advertised? 4. How will the price differ for these 3 brands or types? 5.• Think about Shampoo 1. Write down 3 different brands or types of the product that meet different customers needs 2.

What do you want/expect from Shampoo? – write 10 things .

can you find any reviews on the product? •Place – where can you buy it? •Statistics . how does this compare to other brands •Customer Expectations – what do you/customers expect from the shampoo. product reviews. how do you know? •Price – how much do they charge. design changes •Target Market – who are they aiming at. new products.Top Trump •History •Product – range.

g. shampoo. . • Learners must choose a product with a range of users. yoghurt or chocolate come in a range of qualities and prices and have a range of image and brand identifiers.• You are required to produce an appropriate marketing mix for a new or existing product or service. across market segments e.

Identification of the objectives and segmentation • • A business will use different marketing activities depending on the objectives it is aiming to achieve. These objectives are: • Understanding customer wants and needs • Developing new products • Improving market share (market penetration) • Diversification • Re-launch of product (market development) • Improving profitability • Increasing brand awareness .A.

How to do it well • Explain what is meant in detail by each of these objectives • Discuss why each objective may be appropriate for a company to set themselves • Apply the objective to YOUR chosen shampoo brand or explain how it would use it. Feel free to email the company. use their website and show this evidence in your portfolio (that’s what appendices are for) • Use pictures/print screens to explain what you mean • For Mark Band 3 you need to provide a comprehensive explanation relating to all the bullet points for a – this means lots of detail that makes sense and are your own words!! . You will need to conduct research.

Complete the table • Complete the table in the shared area/on the sheet that shows the key terms you need to be aware of and use for part A of this task • Use your text book or the internet to help you .

Ansoff Matrix • Objective: • By the end of this lesson you will understand what the categories are of the Ansoff Matrix • You will be able to group company products into the relevant categories .

New design GHD straighteners Herbal Essence launched hair dye L’Oreal Elvive extended their range to Anti Dandruff for men – because they’re worth it? Shampoo – developed by GHD to compliment the straighteners Dove recently began targeting ‘older ladies’ with their shampoo .

Ansoff Matrix – helps form marketing objectives Have you developed a new product Are you trying to remind your customers that your product is still available? that you think will impress your existing customers? (developing and improving products) Are you trying to sell your same product to a different group of customers (age. geographically. gender?) Are you taking the plunge and selling a new product to a lot of new customers? (risk taking. moving away from the market?) .

Money more likely to be spent on developing product improvements 4)Decline – The market is beginning to shrink so businesses spent costs. Business have the power to lower prices and invest in promoting the product 3)Maturity – Most common stage for companies.g BOGOF) 2) Growth – if businesses begin to grow this leads to higher sales and profits.Product Life cycle – helps set objectives depending on where the product is 1) Introduction – little growth. high competition as companies want to maintain market share. High costs on research. low sales. development and marketing to test the market (e. If the product isn’t profitable the company may end it Which stage is your product at? Which objectives will this link into? . Competitors may copy significant moves.

Only need to be re-launched to bring new life to the product not a lot of cash needed to survive Products at the decline stage of the product life cycle .Boston Matrix – helps with product relaunch in assessing where product is Reached the growth stage of the product life cycle – good potential and will require high cash support to keep succeeding Products that have just been launched – will/wont they be successful? At the maturity stage – high market share in market that is not growing rapidly.

Questions to ask yourself when looking at Boston Matrix • Is the amount of people going to buy the product get any bigger? Eg is the amount of people who buy shampoo in the UK going to expand rapidly in the future? • Do a lot of people currently buy your product? Eg is your shampoo one of the more popular brands? .

Quote of the day……. • Don’t just throw pies and hope they hit your target……because you will waste a lot of pies Instead look at who you want to hit and do everything you can to make sure you get them so there are some left over for you If you design and advert or marketing campaign without thinking about who you want to target it may not hit the people you need. Look at them instead and find a way to get there attention before you hit them .

http://www.com/watch?v=00hbgaE AZAM&feature=related 4. http://www.youtube. http://www.Watch the clip and write a note to describe what you see in each one 1.com/watch?v=biAFjjQp GSo 2.com/watch?v=77MH42 xsqVs .youtube. http://www.youtube.com/watch?v=nTKibzQ qZoI&feature=related 3.youtube.

Market Segmentation • Marketing and its related activities should be designed to suit the customer. • In the past organisations created adverts for the mass market but now recognise different groups of people have different wants and needs • Market segmentation is a process of separating a total market into parts so that different strategies can be used for different customers .

What do the following mean/or give an example • • • • • • Geographic Demographic Segmentation by age Other – ethnicity Geodemographic – Psychographic/behavioural – .

Market Segmentation 1. Read the article in the shared area ‘UK Hair care market stagnant’ 2. Summarise in 5 sentences what this article is telling you .

attitudes. life style or personality eg sports shampoos. It helps them select a target market and design products to fit the profile of those customers • Geographic – people in different regions may have different incomes.com • Psychographic/behavioural – divide up by social class. identify trends in age. aiming a head and shoulders at business market . shampoo for kids • Other – ethnicity • Geodemographic – combines geo and demo principles (remember when you used upmystreet.Companies build a profile of customers based on data available to them. language • Demographic – family size/singles for different size products. gender in particular areas • Segmentation by age – widely applied – shampoo now offering products aimed at older generations. buying habits.

Colombia. Venezuela. Peru. driven by greater earnings and longer life expectancy.Quick quiz – what type of segmentations are represented here – you must be able to point it out Five countries – China. and France – climbed three or more in best countries to live from the previous year. .

Structural advice • For your assignment (marked important on the task sheet) – Discuss the different ways in which markets are segmented and why segmentation is necessary – Apply this to your shampoo (how does your shampoo do this – how have they tweaked their marketing mix to cater for the different segments) – Does your company use Niche or Mass marketing techniques or is it a combination of both? .

Mass Marketing • Selling a product to a general market and not differentiating between groups • Works for generic products eg washing machines • SO… what is ‘Niche Marketing?’ .

Pros: • the first company to identify a niche market can often secure a solid market position as consumers see the original product as superior • consumers are willing to pay a price premium for a more exclusive product • Cons: • • lack of economies of scale may make costs too high to achieve satisfactory profit margins • • the firm’s production system must be flexible enough to cope with relatively small quantities of several products . rather than one brand selling 250 000 in the mass market. It can also be a strategy pursued by a large firm that prefers to have five brands selling 50 000 units in each of five niches.• • • • • Niche Marketing A corporate strategy based on identifying and filling relatively small market segments. This can enable small firms to operate profitably in markets dominated by large corporations.

questionnaires.• You need to understand the purpose of market research • You need to be able to carry out appropriate market research using • primary research . focus groups • Secondary research – internal business data in terms of customer information and financial records • External sources commercial research reports. trade journals. test marketing. media sources Market research – part C • The difference between qualitative and quantitative data • How useful is the data? How is it interpreted and how is it used to make valid choices on how to and to whom to market these products. observations. government statistics. .

.... 2. . 3.Write down 3 reasons why a business conducts market research 1. . .

Purpose of market research • • • • Define the market Understand customer requirements Who is our target market What strategies are used by our competitors – A way to move ahead in front of competitors (proactive) – A way to keep up with competitors (reactive) .

focus groups • Questionnaire • Observation • Test marketing – Proctor and Gamble give out samples to employees to test and to friends to gain initial feedback (from former employee) • Focus groups • Write a brief description of what you think each one is .• You need to be able to carry out appropriate market research using • primary research . test marketing.questionnaires. observations.

statistics eg – incomes. preferred choices • Quantitative – data. population in an area. ages .In a very short sentence research will normally take one of the following • Qualitative – peoples opinions. behaviours.

In your groups – write a question to include on a questionnaire then pass to the next person – you CANNOT repeat the question that has been asked previously try to think about the purpose of market research discussed earlier .

You should have included
• • • • • • • • • • • Age Gender Residential area Factors that affect buying habits Price Who buys in household Memorable advertisement Where bought Where notice adverts What promotions Do they buy your product
Where would you put each of these within the marketing mix? Remember you alter the marketing mix to find the perfect combination for your product

Primary research
• Construct your questionnaire – this must be completed as part of your coursework. • You will not be able to carry out a formal observation, focus group, test marketing but explain how your shampoo company may/has used them but in your coursework you can discuss what it is and how your company would use it

What have you learnt?
• http://tutor2u.net/business/quizzes/as/marke ting_research/quizmaker.htm

Recap primary research
• Focus group Employees of Proctor and Gamble are given shampoo to share with their friends and family to gather feedback before trialling in a larger area ahead of launching nationally A group of people representative of their target market will come in and will test the product they will give feedback on this Buyers in supermarkets and shops will be watched as to how they buy the product and what they do eg do they smell before they put it In their basket, do they check the price etc A sample is asked a series of questions relating to the product. The questions will relate specifically to what they need to know

Test marketing



do as needed Advantages Disadvantages . time to do. done for specific purpose.Primary research • Cost.

Secondary Research – what is it? • Information gathered by other sources not by yourself • Includes• Media • Government statistics • Trade Journals .

Time. Reliability. Advantages Disadvantages . Not conducted for that purpose.Secondary research • Cost.

with the under-13s using products to give them confidence and make them appear older than their years. Today’s teens and tweens have grown up in a multimedia society where products are not only sold in-store. Toiletries and cosmetics compete with a wide range of other items on which tweens/teenagers are expected to spend their pocket money/allowance.mintel. The influence of parents on their children’s purchasing/usage of cosmetics and toiletries. Teens and tweens are less affected by the economic slowdown than other demographic groups and this presents strong opportunities for growth.• • • • • • • • • • Teens' and Tweens' Beauty and Personal Care . Growth in teen-targeted skincare brands.UK . Evaluate successful distribution strategies to target this demographic. http://oxygen. Tween/teenage brands are strong in some sectors (eg cosmetics) but lacking in toiletries categories.June 2009 Interest in cosmetics and toiletries starts from a young age. although they have considerable purchasing power with many using a wide repertoire of products. Few beauty and grooming brands specifically target tweens/teenagers.com/sinatra/oxygen/display/id=394187/display/id=465530&list=wh_ite ms/display/id=394187/display/id=394229 – accessed 2/02/2010 • . The tween/teenage demographic could be just the right target for beauty brands looking for growth during these recessionary times. Key themes Tweens/teenagers are part of the digital revolution and are at ease with modern technology. This impacts the way in which they are influenced to try to buy new products.

price/value Also research the mintel report on the shared area as evidence of a publication not a news story • • .in-cosmetics.ethnic hair care market http://tutor2u.Secondary research • • • • • http://news.cfm/link=303 http://www.html .asp – market share http://www.independent.uk/life-style/health-and-wellbeing/health-news/claims-byupmarket-shampoos-dont-wash-599646.segmentation of shampoo market http://www.stm .co.uk/1/hi/business/4417725.bbc.co.com/Products-Markets/UK-Hair-care-market-stagnantbut-niches-thrive .com/page.net/business/marketing/casestudy_%20products_haircare.cosmeticsdesign-europe.

Read the article and answer the following: 1. Why would this affect your shampoo company 3. What part of the marketing mix would the shampoo company tweak with this information? . What information / key statistics are relevant to you 4. What is it telling you? 2.

the mix chosen for the launch of a new product of a small business will be different to the launch of a product by a large business. . • • • • • • • • • • • • The choice of marketing mix aims to target products towards a group of potential customers. designed to meet/influence the needs/wants of customers to generate sales. The marketing mix will vary according to the objectives you are trying to achieve and the results of your market research.• • • • 3. For example. You need to develop an understanding of the factors that go towards determining: • price • product • place. You will need to use elements of your research to support your mix. (including web-based) • promotion.3 Choosing an appropriate marketing mix The marketing mix refers to the combination of elements within a business’s marketing strategy.

or sell more but with lower unit profits. and whether/how you should change your product to meet customer needs. Place . PR. you might use advertising. . For example. direct mail and personal selling. or charge a premium price for a quality product and service. Pricing .for example. 3.how and where you sell. This may include using different distribution channels. 4. For example. Remember that some customers may seek a low price to meet their budgets. 2.Part C – Create a marketing mix for your product 1. Product . Promotion . You might have to choose either to make relatively few high margin sales. you might aim simply to match the competition.how you reach your customers and potential customers. while others may view a low price as an indication of quality levels.what your product offers that your customers value. you might sell over the internet or sell through retailers.

Pricing – by the end of this lesson • What affects the decisions on the price? • What price will you charge? • Why? .

Look at these items – how would you group these? Essentials. luxury items .

What affects price of goods • • • • • • • • • • Quality Where sold Exchange rate Competition If bought in bulk Demand Fashion Brand How new the product is Avaliability .

Price • Price is the only part of the marketing mix that generates an income – all others cost money • For high fashion items eg – Superdry coat/iPhone price is less relevant because they are one-off purchases than items that are bought en-mass eg paint where there is lots of competition • Some things are essential (eg water. shampoo!) and will need to be bought regardless of the price but consumers may go to competitors if they offer a better deal .

Price It also illustrates that consumers may buy less from that particular company if there is a lot of choice eg a competitive market It can also illustrate how consumers may buy more of a product if the price fell This is known as elasticity of demand – ie the amount required/bought/wanted alters with the price • • Quantity demanded (bought from that company) .Elasticity of demand • • The graph shows that the higher the price the less likely people will want to buy something.

What type of pricing are these? • The PS3 was selling for over £300 when it was first launched it can now be purchased for less than £200 • When Bounty re-launched as Plenty it was on sale for £1 – cheaper than usual • Petrol prices at supermarkets are usually very similar. If one drops so does another .

Beginning with a low price to attract the customers – effective in a market where demand is elastic.Deliberately lowering prices to get a competitor out of the market eg a price war B .Penetration pricing 2 – Skimming 3 .Types of pricing-which is which 1 . Helps to penetrate the market and gain market share D .Destroyer pricing A .Matching price very closely to that of competitors – common in a market where products are almost identical E .Adding a specific amount to the unit price eg 20% .Competition based pricing 5 .Cost plus pricing 4 .Because of low competition eg a new product/market leader is able to charge an initially high price such as iPhone/PS3 once the initial customers are reached the price will be lowered to attract the next level C .

What type of pricing is most likely to apply to shampoo? • Questions to consider/answer – Is it a generic product? – Is there lots of competition? – What is the elasticity of demand – will the price affect how many people want it? – Where is the product made and where is it sold? Will this have an impact (consider exchange rates) .

£ against $ How might this affect shampoo prices if being exported/imported to UK? .

Product – what makes a product a product? .

Quality of shampoo Colour and texture Packaging Hair type Smell Frequency of wash .

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.Used to have Vidal Sassoon on the bottle but was taken off after the company realised that wash and go didn’t fit the image that they were which was a high quality one.


Volume & body Shampoo Pantene Volume & body Shampoo helps your hair live large and stand tall. glamorous hair that's full of volume. It's the first step to gorgeous. . body and movement. The formula works by effectively removing the dirt and residue that can weigh hair down.


Promotion .lesson • View the innocent advertisement – how do they want to be perceived • Look at the pictures around the room • Write on there what evidence there is that they want to be perceived in this way • With your partner and your ‘props’ stick the picture into the middle and identify key AIDA points • What media would be used to convey these messages • Which method will get this across better? Did any of .


Promotion • To be able to identify different types of promotional media used by companies • To be able to analyse a piece of promotional media and say who the target audience is. what the message is. how good it is based on what you have learnt so far .Lesson objectives .

Watch the advert • • • • • • Describe the ‘story’ in each one What phrases/descriptive words do they use What do they want us to think Who do you think it is aimed at Which do you prefer How do the approaches differ for each .

com/watch?v=XQcVllWp wGs • http://www.com/watch?v=4ZRgX2xt wLg .• http://www.youtube.youtube.

• Promotion is based around the need to effectively communicate with customers .

Promotiona l tool Company Message Target audience How would you measure success Good/bad points Improvemen t TV advert How else do companies let us know about their products? .

Which is the odd one out? • • • • Leaflet Local newspaper Company website Where the product is sold .

Other ways to promote products? .

B. D. What makes this product different What makes it better than a competitors The price of the product Where you can buy it . C.The message in an advertisement should be A.

D. Reaches target audience Clearly describes the product Has the price on it Is on television to reach a wide audience .An promotional material has to ensure it A. C. B.

• For MB3 you will suggest and justify improvements .How will you use this? • Write down 5 things you will look for/assess in your shampoo advertisement • You need to search for an advertisement of your chosen companies shampoo and assess it like you have today.

• In pairs look at the piece of promotional media in front of you discuss it and complete the table Promotional tool Company Message Target audience How would Good/bad you measure points success Improvement .


• Language • Colours • People featured in the advertisement During the design of promotional material – the style is most represented by .

Distribution (Place) – why is this information on the website? .

Place • Think back to the Chinese Head and Shoulders advert – what was the difference between that and an advertisement for the same product being shown in England? • What other changes might there be? .

Distribution – is how the product gets to • Manufacturer – wholesaler – retailer – consumer • Manufacturer – retailer – consumer • Manufacturer – consumer • Which one would you prefer as a consumer? As a manufacturer? • What is most appropriate for shampoo? .

E.P.S. exchange rates and consumer confidence • Social factors such as changing attitudes and lifestyles.T – How will these affect your company and the marketing mix? • Political and legal changes such as new regulations • Economic factors such as interest rates. and the ageing population • Technological factors such as new materials and growing use of the internet .

Political and legal factors Britain to Burn Trash for Energy June 11.Correct labelling of products and doing what they say! Health and safety issues . 2008 – Government policy to help companies avoid landfill tax by turning waste into electricity! Consumer Protection Act – products must be safe Sale of Goods Act .

0% 8 January 2009: 1.0% 5 March 2009: 0.5% 6 November 2008: 3.5% 5 February 2009: 1.Economic factors FALLING RATES 8 October 2008: 4.0% 4 December 2008: 2.5% .

. The number of pensioners is expected to exceed the under-16s by 400.Social Factors BBC News . The number of under-16s in Britain is projected to rise from 11.1 million by 2016 and nearly 13 million by 2031.000 in 2016 and by over 2 million in 2031.6 years by 2031.6 years in 2016 and to 42. 23rd October 2007 The average age of Britons is expected to rise to from 39.Population to hit 65m by 2016.5 million in 2006 to 12.6 years in 2006 to 40.

Technological factors .

Environmental Government Waste Strategy . 2008 – reduce landfill and turn waste .Businesses are being asked to take greater responsibility for the environmental impact of their products and operations Britain to Burn Trash for Energy June 11.

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