ROLE OF MARKETING

1. ROLE OF MARKETING IB BUSINESS & MANAGEMENT A COURSE COMPANION P179-185

2. What is Marketing? • Marketing is the process of getting customers interested in a product through research of consumer needs, promotion, selling and distribution of products (goods & services) • Businesses need to ensure that their products will sell in order to be successful. • The management of the operations, the HR management, accounting and finance are all secondary if the business cannot produce and market a product consumers will buy. • Marketing is a real life evolving topic that is all around us in our daily lives.

3. Market Size • Market size represents all the sales of companies in a market. • It is important to think about the size of the market as it can tell you whether the market is growing or shrinking (how fast) as well as the basis for calculating market share. • There are two ways to measure this by volume and by value. Market size by VOLUME • Market size by volume measures the amount of goods sold by quantity. Eg: litres of milk. Market Size by VALUE • Market size by value measures the amount spent by consumers on the total volume of goods sold and will be expressed in terms of US dollars, EUROs etc.

4. Market Growth • Market growth measures how fast a given market is expanding. • High growth rates mean that new products have a better chance of success. • In contrast, in a shrinking market, existing brands will compete fiercely for customers, making it extremely hard for new businesses or products to enter the market.

5. Market Growth • Businesses can exercise a small influence over the market size with advertising. • However, most of the growth or decline in a market’s size is down to external factors like: The State of the Economy • Markets for luxury products, such as performance cars will do well in a booming economy, but may suffer when a recession arrives.

6. Market Growth Technology • New inventions and products can dramatically reduce the size of existing markets. • Eg: The huge growth in iPods and MP3 players has caused a large drop in demand for music on CD. Demographic & Social Change • Eg: More woman in the workforce means that the market for pre-prepared meals has increased in size over recent years.

7. Market Share • Market share measures what proportion of the total market’s sales is held by one organization. • As for market share, this can be measured by volume but it is usually measured by value. • This is much more under the control of businesses; while they might not be able to control how much the overall market grows, they can gain market share at the expense of competitors, through a successful advertising campaign.

8. Market & Product Orientation There are two main ways in which organizations can approach their business: • Market Orientation • Product Orientation

9. Market Orientation • Organizations that show `market orientation` will be very keen to analyze the market to find out what customers want. • Once this is done, they can put strategies in place to meet those needs and offer products that will appeal to a wide range of consumers. • As result they will often tend to change and update their products regularly. Eg: with special editions. • They will offer a wide range of different styles in order to meet the expectations and needs of as many customers as possible. • Given the changing nature of their product lines, market oriented businesses will use a lot of advertising and promotion to ensure that customers are aware of the numerous versions of their product on offer.

10. Product Orientation • A product-oriented business will be more worried about the concerns and convenience of their internal production rather than their potential customers. • In a fast changing market, companies like this will quickly lose market share as customers abandon their products in favor of rival offerings more tailored to customer needs. • However, product orientation can be successful in industries where change is very slow and the organization has a strong reputation.

11. Key Questions • Distinguish between product-oriented marketing and market oriented marketing. • Give an example of an industry where product orientation may be successful and explain why this is the case. • What are the advantages of being a market-oriented organization?

12. Differences between the marketing of Goods & Services • Goods can be taken back if you don’t like what you have bought, but you cannot return a haircut if it goes wrong! • Services must be used immediately and cannot be stored – you can’t save your lawyer’s time and use it later – you must listen to the advice when its given. • It is harder to compare the different offerings – one car can be compared to another, but different restaurants can’t be compared in the same way. • Services are intangible (they can’t be handled)

13. The Importance of Services in Modern Developed Economies • The service sector in the developed world has been steadily increasing in importance as production of goods is outsourced to low wage economies. • A TV can be manufactured anywhere and shipped to where is it needed, but service offerings generally need to be close to the customer. • Organizations offerings services must focus on the image and quality of their reputation in order to attract customers

14. Marketing in Non Profit Organizations • Non profit organizations and charities are increasingly using sophisticated marketing techniques to increase the donations they receive.

15. A MARKETING PLANMarketing Planning & Marketing Objectives • The marketing plan is a document that puts the company’s strategic marketing aims into practice. It is likely to include: • Key marketing objectives • Strategic plans – an overview of how the objectives are to be achieved • Specific marketing actions – details of the timings and types of marketing activity to be carried out. • Marketing Budget – detailed costings of the marketing activity.

16. A MARKETING PLANWhat are marketing objectives? • Marketing objectives are goals and targets that must be met by the marketing department in order to meet the needs of the overall corporate objectives. • Eg: Consider this mission statement for airline: “To offer the best service possible in the Sky” • Marketing strategies and objectives based a on low price, high-volume approach are clearly not compatible with the company. • The marketing department will need to push for high prices, backed up by a campaign which emphasizes the quality of the service on offer. • For marketing objectives to be useful, they need to follow the SMART process.