Marketing

1. Marketing

2. To introduce marketing and its significance in modern business practices. • You should be able to: • Describe what marketing means to you • Describe consumer and industrial markets • Describe and understand identifying, anticipating and satisfying consumer requirements BM Unit 2 - LO2

3. Marketing – What it means to me? BM Unit 2 - LO2

4. What is a market? • Any place where buyers and sellers meet.

5. Consumer markets Consumer markets - are made up of individuals who purchase goods/services for personal or domestic use. • Consumable goods, eg food, cosmetics, magazines • Durable goods, eg cars, televisions, clothes

6. Identifying Consumers’ Requirements • What do they want? Consumers must buy products and continue to do so • Fierce competition and consumers’ expectations mean that products must be constantly updated and altered to suit • Other factors - price, quality, prompt delivery, attractive packaging and after-sales service • Advertising and promotion play a big part BM Unit 2 - LO2

7. Industrial markets Industrial markets - organisations that purchase goods and services to use in the production of other goods and services. • Consumable goods, eg raw materials • Durable goods, eg machinery and equipment

8. What is marketing? • ‘Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitably.’

9. Anticipating Consumers’ Requirements • What do they want today? • What do they want in the future? • Trends must be considered to anticipate future needs • Volatile markets - fashion, toys, technology (mobile phones, computers, etc) BM Unit 2 - LO2

10. Satisfying Consumers’ Requirements “The customer is king!” • Businesses must be customer-focused • No customers no business • Must offer - good service, quality products, value for money, prompt delivery, good after-sales service (eg returns), well presented and packaged goods, at the right price and available at the right place BM Unit 2 - LO2

11. Marketing objectives • To target a new market or market segment. • To achieve or maintain market share. • To develop a new range of products. • To improve the image of the product.

12. Marketing activities • Market research • New product development • Selling • Pricing • Promotion and advertising • Preparing publicity information

13. Assessment (looking) of the Market • Where are the consumers of the product? • How many consumers are there? • What are their attitudes and preferences? • How effective are the distribution methods? • What are the strengths and weaknesses of competitors? BM Unit 2 - LO2

14. Factors leading to the importance of marketing • Economic growth and booms – with more disposable income, marketing is needed to gain market share. • Fashion – marketing attempts to anticipate trends and/or changes in tastes, lifestyle. • Technology – new product innovation is essential for firms to keep up with competitors. • Competition – rivals may come from overseas. Firms have to be aware of the market environment both at home and abroad.

15. To introduce marketing casualties and success stories. • You should be able to: • Identify and describe marketing casualties in both the UK and World-wide markets • Identify and describe marketing success stories in both the UK and World-wide markets • To describe product and market orientation BM Unit 2 - LO2

16. The casualties of not adapting to the market • The American car industry • The British motor cycle industry • In pairs have a discussion to see if you can think of any others. BM Unit 2 - LO2

17. Product/Marketing failures • Ford Edsel • New Coke • Sony Betamax VCR • McDonald’s Arch Deluxe • Sinclair C5 • DeLorean motor car • http://www.bbc.co.uk/news/magazine-11517129

18. Marketing Successes • Swatch • Starbucks • Easyjet and Ryanair • In pairs have a discussion to see if you can think of any others. BM Unit 2 - LO2

19. Product orientation Manufactureproduct Production capabilities Aggressive sales effort Customers Production orientation is when a business focuses on the production process and seeks to make goods that are viewed as superior.

20. Product-led - Product Orientated and Production Orientated • Putting a product on the market without prior market research • Assumption of best available and no real competition • Often new inventions like Dyson vacuum cleaners or Playstation 2 • A risky approach which can fail - British motor bikes • Making as many products as possible at the lowest price BM Unit 2 - LO2

21. Market orientation Marketing product and services Potential market opportunities Customer needs Customers Market orientation starts with the consumer and looks at consumer needs. It is customer orientated.

22. Market-led - Customer Orientated and Sales Orientated • Considering what the customers want before putting a product on to the market • Competition has led to companies focusing on the needs of the customer • Also looks at the influences on purchasing decisions • Pressure to sell to the public BM Unit 2 - LO2

23. Advantages of market-orientated approach • Can respond more quickly to changes in market due to market research. • Increased chance of new product success. • Stronger position to combat new competitors/entrants. • Can anticipate market changes.

24. Review of learning • What are the 2 types of orientation a product uses in the market. • What are the features of each type. • Give examples.

25. To introduce marketing environment and how it links to PESTEC • You should be able to: • Describe how the market adapts to PESTEC (external factors – that we have previously covered) BM Unit 2 - LO2 25

26. The marketing environment The market

27. The marketing environment Social - Consumer trends and behaviour Competition Political The market The economy Technology

28. To introduce market share • You should be able to: • Identify and describe market share giving examples of UK supermarkets and business organisations • Describe the benefits of a high market share BM Unit 2 - LO2 28

29. Market share and market growth Market share is the percentage of customers who buy/use a company’s goods/services. Market growth is the volume of new sales or customers within a market.

30. Power to buy raw materials in bulk Special components – can make them themselves Research and development – profits reinvested Economies of scale Having a High Market Share

31. Supermarket market share Learning and Teaching Scotland

32. Soft drink market share Learning and Teaching Scotland

33. Coca cola world wide share Learning and Teaching Scotland

34. Online book retailers Learning and Teaching Scotland

35. Success Criteria: Learning Intentions: To introduce MARKET RESEARCH and MARKET SEGMENTATION. • To enable pupils to: • To introduce pupils to market research and techniques, linking to marketing mix from previous lessons. • To introduce ICT and how it links to Market research • How linking MKT RES and Market segmentation creates a common goal – to aim product or service at particular group. • To be able to summarise marketing topic. BM Unit 2 - LO2

36. Target markets Undifferentiated or mass marketing • When a product is sold to the entire market. Differentiated marketing • When a product is offered to a group or groups within the total market. • This is done by market segmentation. Click for clip

37. Market Segmentation Advantages • Seller can meet buyers’ requirements • Advertising can be focused - less wasteful • Expertise developed for a specific market • Higher sales • Increased profits “Breaking down of markets into sub-groups that can be targeted with a specific marketing mix.” BM Unit 2 - LO2

38. Methods of Segmentation • Age • Gender • Socio-economic grouping • Education level • Income • Religion • Residential area • Lifestyle preferences - hobbies, politics BM Unit 2 - LO2

39. Undifferentiated Marketing Involves aiming products and services at the population as a whole without producing different products for different market segments eg Heinz Beans 39

40. Undifferentiated marketing Firm Market Marketing mix

41. Differentiated Marketing Involves providing different products and services for particular segments 41

42. Differentiated marketing Segment 1 Marketing mix 1 Segment 2 Firm Marketing mix 2 Segment 3 Marketing mix 3

43. Concentrated marketing Segment 1 Segment 2 Firm Marketing mix Segment 3

44. BM Unit 2 - LO2

45. Socio-economic group A Higher managerial, administrative or professional B Intermediate, clerical, administrative or professional C1 Supervisory, clerical, junior administrative or professional C2 Skilled manual D Semiskilled and unskilled E State pensioners, widows, casual and lowest paid

46. Psychographic segmentation Segments people according to lifestyle. Lifestyle is a person’s individual pattern of behaviour, including attitudes, beliefs, interests, hobbies, habits, religion.

47. Answer a question • Describe six methods that an organisation could use to segment their market. (6 marks) 2009 • 12 minutes

48. Solution • Age – segments the market by different age groupings, such as young or old, under 12, 13–19, 20–35, over 35. • Occupation – segments the market by different types of occupation. • Education – segments the market by the level of education attained. • Socio-economic – segments the market by grouping customers into different economic classifications. • Geographical – segments the market by the area they live in. • Cultural/religious background – segments the market by religion or ethnicity. • Family lifestyle – segments the market by customers being either married or single.

49. To introduce You should be able to: BM Unit 2 - LO2 49

50. Niche marketing • A niche market is when a firm concentrates on selling to a specific market segment. • Niche markets are normally very small, but can be highly profitable. • Niche markets normally know their customers’ needs very well. Click for clip