Marketing

1. Marketing Marketing is the management process of (i)finding out what customers want and (ii)then making a product that satisfy their needs and (iii)persuading them to buy that product. Ms. Marshall 6th Year Business

2. Marketing in your exam • Marketing is frequently a full question in both Ordinary and Higher Level papers. It is at least 50% of a question every year. • As you can see it always comes up in Part 2 of the Long Questions. Ms. Marshall 6th Year Business

3. Overview of Chapter 16 1. Market Research 5. Marketing Mix, Product & Price 2. Market Segmentation Marketing 4. Marketing Strategy 3. Marketing Concept Ms. Marshall 6th Year Business

4. Overview of Chapter 17 Promotion Marketing 2 Place Ms. Marshall 6th Year Business

5. 1.Market Research • For this topic you must be able to define the term, explain the two types with examples and give up to four benefits/ reasons for market research. • Market research involves collecting, analysing and reporting information about marketing issues to enable (help) managers to make effective marketing decisions. Ms. Marshall 6th Year Business

6. Market Research • The two main types of market research are field research and desk research. The choice of research depends on: • What information is required • The amount of detail and accuracy needed • The costs involved in collecting it. • The time and money available for the research. Ms. Marshall 6th Year Business

7. Field Research • This involves the firm going out into the marketplace to gather new information directly from consumers. • Field research is also known as primary research. • Advantage: More accurate and detailed information, more relevant to your product. • Disadvantage: Time-consuming and costly. Ms. Marshall 6th Year Business

8. Field Research Techniques • Observation: involves watching and recording the behaviour and reactions of consumers. While this may show us what they buy, it does not tell us why. E.g. Supermarkets may have people observing customers as they choose between brands. • Consumer Panel/Focus Group: groups of consumers who are regularly monitored to find out about their purchases and reactions to products. This may be face-to-face or written. E.g. Superquinn holds weekly consumer panels to listen to consumer opinion. Ms. Marshall 6th Year Business

9. Field Research techniques • 3. Survey/Questionnaire: involves interviewing the consumer directly. Consumers can be contacted by phone (e.g. Vodafone Customer Service), mail, the internet (e.g. after a hotel stay) or in person (e.g. when you are stopped on Grafton St…) • Surveys use the qualitative and quantitative data of a representative sample to determine what people think of their product or idea. Ms. Marshall 6th Year Business

10. Desk Research • Desk Research involves research which is based on information already available (gathered by others) within or outside the firm. • It is also known as Secondary research. • Advantage: Large quantities of useful information are available quickly and at low cost. • Disadvantage: The data may be too general or out of date. Ms. Marshall 6th Year Business

11. Desk Research • 1. Internal Reports: a business can obtain information from its own sales reports and financial records. Also schemes such as Loyalty Cards often record what consumers are buying. • 2. Government Publications: Reports and statistics published by Governments agencies such as the CSO and Enterprise Ireland often have valuable information, e.g. CSO -Census, Inflation, Unemployment rate. Enterprise Ireland- Export trade info, e.g. market statistics on a foreign market. Ms. Marshall 6th Year Business

12. Desk Research • 3. The Internet: For researchers the internet has two keys sources of information: • Websites: that organisations (e.g. your competitor) and individuals have created to promote their products and views. • Discussion groups of people with a particular interest. Ms. Marshall 6th Year Business

13. New Coke • In 1985 Coca-Cola conducted market research in the form of blind taste tests to see if consumers preferred their original taste to a sweeter formula more like Pepsi. The research showed that consumers preferred the sweeter taste. So Coke decided to replace its own recipe with “New Coke”, a sweeter version of the drink. • The original formula for Coke had to be reintroduced after only 77 days after a massive public backlash, particularly from Southern States of the USA, who saw Coke as part of their culture. Some say Coke lost millions in wasted marketing and sales because they didn’t take into account brand loyalty and the associations people have with a brand. However, the reintroduction revived a brand that had been losing market share – so many believe Coke planned the whole thing as a marketing stunt. Ms. Marshall 6th Year Business

14. Q. Explain the importance of Market Research? Note: the question is “Explain” therefore use the format of Statement, Explain and back up with an Example. • 1. Market Research can save the company money in the long run. For instance, by stopping the development of a new product if it is not likely to be viable in the marketplace. E.g. there is little demand for a low fat version of Guinness. • 2. It reduces the risk of failure for the product and the business. This is achieved by anticipating trends and changes in the market. E.g. Nivea diversified into products for men when research showed there would be a demand. Ms. Marshall 6th Year Business

15. Importance of Market Research • 3. It helps a business to improve its advertising. It can emphasise how the USP meets the consumers needs, thereby indicating they provide a better product/service than their competitors. E.g. Volvo’s USP is that it’s the safest car, which would be particularly important to drivers with kids. • 4. It helps managers decide the best price, packaging and design to use. Information gained on your target market will decide these e.g. a luxury good is usually high priced compared to competitors, with expensive packaging and a unique brand or logo. Ms. Marshall 6th Year Business

16. 2. Market Segmentation • Involves splitting the market into separate and distinct groups that exist within it. • The main way to segment the market: • 1. Geographic Segmentation • 2. Demographic Segmentation • 3. Psychological Segmentation Ms. Marshall 6th Year Business

17. Market Segmentation • Geographic: the market is divided into different geographic areas. A business makes money satisfying local needs. E.g. The Irish Radio market is divided into counties or regions. E.g. 98fm for Dublin, Shannonside for the Mid & West Counties. • Demographic: the market is divided on the basis of different characteristics of the population, e.g. gender, age, income, social class. E.g. Nivea for Men and Women. • Psychological: analyses consumers on the basis of their attitudes and tastes, e.g. conservative, impulsive. Ms. Marshall 6th Year Business

18. Volkswagen • Audi, Seat, Volkswagen and Skoda cars are all built by the Volkswagen company. They use psychological segmentation to analyse the car buyer market and identified four basic distinct groups: prestige, adventurous, conservative and economy. Using careful design and promotion, each of these car brands is then positioned to target consumers in each of these market segments. • Audi – prestige, Skoda – economy, SEAT- adventurous, Volkswagen – conservative. Ms. Marshall 6th Year Business

19. Advantages of Market Segmentation • 1. It helps a business to establish a presence in a market: It can be easier to launch yourself in one segment, then expand when you succeed. E.g. NewsTalk started in Dublin, then went national. • 2. It helps to increase sales: by highlighting a neglected market e.g. Nivea for Men hugely increased overall sales. • 3. It helps lower marketing costs: Less money will be wasted as you know who your campaign should appeal to. E.g. The Economist Magazine is targeted at business people, they would not advertise it during a children’s show. Ms. Marshall 6th Year Business

20. Market Segmentation: Pepsi Max and Diet Pepsi • Pepsi conducted field and desk research to find out who bought their cola drinks. Analysis showed that both male and females likes the taste of Diet Pepsi and were concerned about their sugar intake. • However, the market research also showed that males were unlikely to buy Diet Pepsi because of the perception that it is a feminine drink. • Pepsi divided the market into male and female segments. The female market was targeted with Diet Pepsi. The male market was targeted with Pepsi Max, which while having a low sugar content, always has adventurous, high energy advertising campaigns. • https://www.youtube.com/watch?v=V4-ieWqegwY Ms. Marshall 6th Year Business

21. Target Market • This is the group of people (or segment of the market)that the business chooses to aim its product at. • E.g. Energy drinks for athletes. Niche Market • This is a narrowly defined group of potential customers within a market for a product or service. • E.g. Organic Food Market, Bridal Wear. • People are generally willing to pay more for a product in a niche market. Ms. Marshall 6th Year Business

22. Niche Market: The New York Dog • Irishman John Ryan produced a number of magazines here at home. When he moved to New York he noticed how they treated their dogs like children. He saw a gap in the market and produced a glossy magazine ‘The New York Dog’. It dealt with issues such as where to bury your pet, plastic surgery for pets and obituaries for dogs. • Unfortunately, the magazine has ceased publication. Ms. Marshall 6th Year Business

23. 3. Marketing Concept • 1. Find out what the customer wants. • 2. Provide the product or service that satisfies the consumer need or want. • https://www.youtube.com/watch?v=HRCNDBfVhJ0 • Advantages: • 1. Increased satisfaction = increased sales and profits. • 2. Better reputation, word of mouth. • 3. Fewer returns and repairs. • E.g. SuperQuinn – provide free playhouse, carry out service, delivery etc…. They are branded as a higher quality supermarket with an emphasis on customer service. Ms. Marshall 6th Year Business

24. Marketing Strategy • The Marketing Strategy is a written plan that sets out the business’s marketing objectives and the means by which it will achieve these. • Step One: Investigate the market to develop business opportunities: conduct a SWOT analysis of the market and of your own company. E.g. Meteor conducted desk research when identifying the potential growth in the mobile phones market. • Step Two: Select a Target Market: identify the segment of the market you are aiming your product at. This will involve research to determine which groups needs you can satisfy. E.g. Meteor – low cost, youth market. • Step Three: Develop a Marketing Mix: use your research to develop strategies for Product, Price, Promotion and Place. E.g. uses humour in its ads, sponsors the Ireland Music Awards. Ms. Marshall 6th Year Business

25. Benefits of a Marketing Plan • 1. It sets out the steps needed to attract customers and increase sales and profits. • 2. Identifies the strategies that are working. The business can measure actual progress to goals expected. • 3. Shows potential investors that the business has good marketing strategies. This will be useful if expanding the business. Ms. Marshall 6th Year Business

26. Summary Ms. Marshall 6th Year Business

27. Recent Exam Questions • 2013 • Read the information supplied and answer the questions which follow. • An Irish company, 'All-Weather Wellies Ltd' identified a niche market for colourful wellington boots of all sizes. The wellington boots are sold mainly on-line to people who enjoy the 'great outdoors' and festival-goers. The company wishes to expand and add accessories, such as, umbrellas, scarves and hats to the product range. • (A) Outline the market research techniques available to 'All-Weather Wellies Ltd' for developing its product range. (20 marks) • (B) (i) Explain the term ‘market segmentation’ with reference to ‘All-Weather Wellies Ltd’. • (ii) Discuss the reasons why the marketing department of ‘All-Weather Wellies Ltd’ might engage in market segmentation. (20 marks) Ms. Marshall 6th Year Business

28. Recent Exam Questions • 2010 • (A) Discuss the reasons why businesses carry out market research. • (15 marks) • 2009 • Question 7 • Olympian Ltd is a company that produces a range of high quality branded sportswear. Following a lengthy market research process, the firm is now expanding its business to include a new range of HoodieTracksuits, aimed at the teenage market. • (i) Explain the term ‘market segmentation’, illustrating your answer with reference to Olympian Ltd. • (ii) Outline two benefits to Olympian Ltd of segmenting the market. • (20 marks) Ms. Marshall 6th Year Business

29. Recent Exam Question – Extract from 2007 ABQ • Responding to published official forecasts and trade publications, Jason recruited sales people and qualified technicians to serve the client base and expand the product range of the firm. He encouraged the staff to engage with customers and to note their reactions to new ideas and products. McGComputers is now well established with twelve full-time employees and five service vehicles on the road. It regularly hosts product presentations and demonstrations on its premises for representative sections of its customer base. Siobhán, Jason’s daughter, a recent business graduate has joined the firm. Siobhán would like to add other services such as website design and maintenance, training and consultancy, and has held focused discussions with groups of customers. • Describe the methods of market research currently used in the business. Ms. Marshall 6th Year Business

30. 2004 • Question 7 • The main objective of marketing is to ensure that the business enterprise obtains the revenues it needs to achieve its profit targets. • (A) Define Market Research. • Explain the reasons why a business enterprise would conduct it. (25 marks) • (B) Analyse two Market Research techniques for a product or service of your choice. • (20 marks) • (C) Explain the advantage for a business enterprise of adopting the marketing concept. • (15 marks) • (60 marks) Ms. Marshall 6th Year Business