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Marketing. Learning objectives. What is marketing? Why do businesses conduct market research and what methods do they use ?. Marketing. Marketing is the management process responsible for identifying , anticipating and satisfying consumers’ requirements profitably.
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Learning objectives • What is marketing? • Why do businesses conduct market research and what methods do they use?
Marketing Marketing is the management process responsible for identifying, anticipating and satisfying consumers’ requirements profitably. Copy this fantastic definition!
Market research Market research is used by businesses to identify what customers need and want. This is done by examining the opinions and buying behaviour of different market segments. Primary researchinvolves collecting and analysingoriginal information found specifically for a purpose. The opinions of customers are gained directly, e.g. by surveys in person, by post, on the phone and through observation. What is market research? What are primary and secondary research? List as many secondary sources as you can. Secondary researchinvolves analysing information from existing material, e.g. websites, databases, newspapers, magazines, Internet sales and loyalty cards.
Primary and secondary research Good this isn’t it!
Qualitative and QuantitativePrimaryResearch • Pages 268 to 270 • Whatis and whatisthepurpose of Qualitative and QuantitativeResearch? (look tothedefinitions). • Quick notes on: Focusgroup, observation and recording, test marketing and consumersurveys?
Go back to our definition of marketing. Some marketing companies start with qualitative primary research before commencing quantitative research. Why? Why might firms choose to undertake both primary and secondary market research before entering a new market? S2002 (10)
Marketing Lesson 2 • Objectives: • Whatismarketsegmentation? • Whysegmentthemarket? • Mass and Niche marketing. • Whatissampling? • Whysample? • What are thedifferenttechniques of sampling?
Market segmentation A marketmaybe made up of lots of consumerswithverydifferentcharacteristics – for example, the holidaymarketis made up of people looking for a variety of holidayexperiences. • Segmentationanalysisattempts to divide the marketintodifferent groups or segments of customerswithsimilarcharacteristicsthatmay influence the kind of productstheybuy. • How many segments of the holidaymarketcanyouthink of? The aim of market segmentation is to producegoods and services thatmeet the needs of thesecustomer groups more effectively. – Notes please.
Ways of segmenting a market There are a number of ways that a market can be broken up into segments: • gender – men or women • age – e.g. toddlers, teenagers, elderly • social class – e.g. middle class • location – local, national, global • culture or religion – often relevant to food products. Characteristics are only relevant for segmentation if they have an effect on customer needs. Notes!
Why do companiesattempttosegmentthemarket? • Whatismarketsegmentation? • Whatis marketing?
Mass vs Niche Marketing • Niche marketing – identifying, anticipating and satisfyingtherequirements of a verysmallsegment of themarket. Eg. Versace, Ferrari, armoured cars, stairlifts. • Mass marketing – sellingtotheentiremarket. Eg. Coca-Cola, Microsoft. • What are theadvanatages and disadvantages of sellingto a niche and massmarket.
PrimaryResearch – Theproblems • Hands up if:- • Youlike Mozart? • Youthinkfootball in the 1960s wasbetterthantoday? • Justin Bieberisawesome. • Frenchis more importantthanSpanish. • Are thequantitativeresultsthatwejustgotrepresentative of theentireschool?
Sampling • In ordertoget a ‘sample’ thatwillreasonablyrepresentourchosenmarketsegmentweneedtochoosethepeoplethatweaskcarefully. Thisiscalled ‘sampling’. • Pg 270-272 • Whatissampling? Whyissamplingneeded? • Make notes on: Random, Stratified and Quotasampling.
Explain why a business might use quota sampling in market research. [3]
Discuss how a clothes retailer might segment the market for its goods. [12]
The Marketing Mix Alsoknown as themostimportant concept in businessstudies!
Marketing mix What will happen if a business chooses the wrong marketing mix?
Basic Marketing Mix • Whatisthe marketing mix? • Whatisitspurpose? HowmanyPs and whatdo they mean? • Pick a companyorproduct and analysethe marketing mix. In pairs, produce a briefpresentationonyourchosencompanyorproducttopresenttotheclass.
PRODUCT ProductDifferentiation and USP ProductLifeCycle Branding Productpositioning
http://www.argos.co.uk/static/Search/ID72/14418661/c_1/1%7Ccategory_root%7CKitchen+and+laundry%7C14418476/c_2/2%7Ccat_14418476%7CIrons%7C14418661/pp/20/q/IRON/s/Price%3A+Low+-+High.htmhttp://www.argos.co.uk/static/Search/ID72/14418661/c_1/1%7Ccategory_root%7CKitchen+and+laundry%7C14418476/c_2/2%7Ccat_14418476%7CIrons%7C14418661/pp/20/q/IRON/s/Price%3A+Low+-+High.htm
Marketing mix: product Product: This refers to the good or service that a firmsells and itsfeatures, such as design, functions, colour, size etc. Makingproducts stand out fromrivalshelpsfirmscompete – thisisknown as productdifferentiation. USPs – Unique Selling Point. Yourproduce has somethingthat none others do! A good productisat the heart of a successful marketing mix – withoutit, sales willeventuallyfall.
Differentiation and USPs • Whatis a USP? • Giveexamples of USPs. • Whatisdifferentiation? • Giveexamples of products and explainhowthey are differentiated. • Isdifferentiation a uniquely ‘product’ concept?
TheProductLifeCycle - Implications • Revenuewillvary. • Cash flowwillvary. • Productionrequirementswillvary. • Demandsonstaffwillvary. • Differentpricesshouldbeused at differentstages of productlifecycle.
Branding Brandingattempts to create a clearidentity or personality for a firm and/or itsproducts in order to makeit stand out fromothers in the market. This canbedone by using a recognizable brand name, logo, colour, etc. Advertisingcanalsobeused to create a brand image thatcustomerswillremember. Increasing brand loyaltyis an important objective for manyfirms as itmeansexistingcustomerscanberetainedeven if pricesrise. Strong brand loyaltyisalso important if a firmwants to maintain or improveitsshare of a competitivemarket. Whatisbranding? How canit help business? p321
ProductPositioning • Consumerperception of a productorservicecomparedtocompetitor
ProductPositioning • Productpositioning • Usefultoidentifynearestcompetitors. • Can identify gaps in market. • Note: • Can use differentcriteria.
ProductPositioning • Draw a product position graphfor • thesoftdrinksindustryusingthecriteria, price and healthy/standardimage. • Privateschools in Lima. Whatevercriteriayoudesire.
PRICE Supply and demandgraphs Price Elasticity of Demand PricingStrategies
Marketing mix: price Price: This needs to reflect the image of the product – whetheritis a luxury or a budget product – but alsooffer the customervalue for money.
Pricingstrategies 2 • Price discrimination. • For each of the 6 pricing strategies describe an example.
Supply and DemandGraphsThisisEconomics (notentirelysurewhythisishere).
Marketing mix: price, place, promotion Price: This needs to reflect the image of the product – whether it is a luxury or a budget product – but also offer the customer value for money. Place: This involves getting the product to the right customers when they need it via the correct distribution channels. Promotion: Its role is to inform customers about the product and its features, in a way that persuades them to buy it, using techniques such as advertising, sales promotions, public relations and merchandising. What is meant by an ‘integrated marketing mix’?
Distribution channels A business needs to make decisions about where its products will be sold and how they will get to consumers. Many manufacturers sell goods to customers via wholesalers and/or retailers. This can increase market coverage, but long distribution channels increase the price paid by the end consumer. Some service providers, such as restaurants and hairdressers, need direct contact with customers, making the choice of location important. However, the Internet has made location less important for some businesses. First Direct was the first UK bank to sell to customers by phone. State one benefit for the company of doing this.
Promotion Promotion is the term used to describe how a business communicates to customers: what it sells, how it will benefit them and why they should buy it from that specific business. There are four main types of promotion. Do you know what they are? • advertising • publicity • sales promotions • personal selling (part of sales).
Advertising A business promotes itself by advertising. This involves placing adverts in the media, including: • TV, radio and cinema • Internet • magazines and newspapers • billboards • posters. Adverts are useful for targeting specific market segments. Cadbury, for example, advertises during prime time television in order to promote its products to millions. What factors would the Marketing department need to consider when creating an advert?
Publicity Publicity involves creating an image or an impression by attracting the attention of the media. Unlike adverts, publicity is not paid for directly, so it can be unpredictable how effective it will be at targeting customers. Popular ways in which businesses generate publicity include: • press releases • sponsorship • award ceremonies • arranging speeches. Puma sponsor the English Schools Football Association. Why do you think they do this?
Sales promotions Sales promotions are ways in which a business tries to make its goods or services attractive to customers. Common sales promotions include: • discounts • money-off coupons • competitions • free gifts • special offers • loyalty rewards. When are sales promotions commonly used?
Case study: Iceland This is a sales promotion which Iceland used in its stores to promote the Merlin Entertainment Group’s attractions. Design your own sales promotion leaflet for Thorpe Park.
Types of promotion Would large and small businesses use the same forms of promotion?
AIDA Businesses often promote their products to customers by using the AIDA principle: • Attention • Interest • Desire • Action. Describe how AIDA is used in this chocolate advert. Then design your own advert using AIDA.
