Marketing

1. Marketing Higher/Int 2 Business Management 2013-2014

2. Meeting place for buyers and sellers • Consumer Markets - individuals purchasing goods/services for their personal use • Industrial Markets - organisations purchasing goods/services to use in the production of other goods/services What is a market?

3. “The process involved in identifying, anticipating and satisfying consumer requirements profitably.” The Chartered Institute of Marketing Definition of Marketing

4. Encouraging repeat purchases Ensuring that a product/service continues to meet consumers’ needs Identifying price and quality demanded Considering prompt delivery, packaging and after-sales service Identifying Consumers’ Requirements

5. What will be wanted in the future? Especially important when fashions/trends change eg clothes/toys Also important in the case of technology Must develop products to stay ahead of competition Anticipate Consumers’ Requirements

6. Businesses are often said to be consumer focused - without consumers the business would fail Good quality and value for money are essential Prompt delivery, after-sales care and price are crucial Satisfy Consumers’ Requirements

7. Raise awareness of product/service Raise awareness of the organisation Target new and Retain existing customers Find out what customers want Monitor changing tastes/trends/fashions Allow an organisation to meet strategic objectives (long-term aims) Role and Importance of Marketing

8. American manufacturers tended to ignore trends taking place in the rest of the world where small, economical vehicles with lower engine capacities were capturing an ever-increasing share of the market. American vs Japanese beliefs over the market in America 1970s - fuel, labour and raw material costs made American cars expensive to buy and run. American Car Industry

9. 1980s - well executed marketing plan An inexpensive, good-quality quartz analog watch could rival the saturated digital market Watches were to be a fashion accessory first and a watch second Repeat purchasing was encouraged Point of Sale was chosen carefully - not to flood the market Swatch

10. Feeling of no need for change or product development – no real competition May be a new invention Might be strong advertising eg Henry Ford: “customers can have any colour they want as long as it is black” Product-Orientated Organisations

11. Modification of products or services in response to changes in the market Profits/success depend on meeting customer needs 1980s and 1990s – customers became more knowledgeable as to what was available on the market and the level of competition increased. Consider the customer before production commences Customer-Orientated Organisations

12. What factors might have influenced Apple to launch its iPod range? BS p142 Q1 Apple iPod

13. Developments in technology Changing tastes and fashions eg downloading Competition Economic growth – disposable income Apple iPod

14. Consumer Trends and Behaviour The Economy Competition THE MARKET Technology Government The Marketing Environment

15. Why buy one product rather than another? Age Gender Disposable Income Household status Social Class The Consumer

16. Persuasive power of advertising and promotion A life-style is a behaviour pattern adopted by a particular community Health and nutrition awareness Environmental issues Tastes, Fashion, Lifestyle

17. Legislation and economic policy Consumer protection laws – including our statutory rights Minimum standards in manufacture Deregulation of financial services The Government

18. The creation of new markets and the decline of others Technology

19. Low interest rates have fuelled the housing market and consumer demand for goods and services Recently this has been affected by “the recession” Economic Forces

20. “the breaking down of markets into increasingly homogeneous sub-groups that can be targeted with a specific marketing mix” Kotler Market Segmentation

21. Meet buyer requirements more closely Advertising and promotion more focused Specialise in particular segments Achieve higher sales Increase profits Why Segment?

22. Age Gender Socio-economic group Education level Income Religion Ethnic grouping Family structure Residential area Lifestyle preferences (hobbies, political, values & opinions) Methods of Segmentation

23. Even the smallest segment may have thousands of potential customers A standardised marketing package cannot hope to have equal appeal to every single individual. Personal Selling

24. Aiming a product at a small market segment Examples: The Whisky Shop Saga Aston Martin Allows: Expertise to be built in product or customer Avoids competition Risk of failure – reliance on a small group of customers Niche Marketing

25. Vinyl Records Niche Marketing Working Lunch – Lunch Lessons

26. 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

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

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

29. The systematic gathering, recording and analysing of data about an organisation’s products and/or services and its target market Market Research

30. To anticipate changes in customer tastes Keep ahead of competition Meeting customer needs Correct pricing and promotion Correct distribution chain Attract new market segments Why Market Research?

31. Size and nature of target market Age, sex, income and preferences of customers Effectiveness of selling/advertising methods Customer opinions How a test product could be improved What Information is Provided?

32. Databases compiled by organisations • EPOS information can be collected • Loyalty cards Can all be used to identify consumer trends and buying habits. Making it easier to direct specific products at consumers. ICT and Market Research

33. Field Research Primary Information Desk Research Secondary Information Market Research Methods

34. Advantages 2-way communication Encourage answers Misunderstandings resolved Disadvantages Expensive (time and training) Home interviews are unpopular Personal Interview

35. Advantages Qualitative information gained Disadvantages Difficult to analyse Focus Groups

36. Advantages Relatively inexpensive Immediate response Large number can be surveyed quickly Disadvantages Hostility can be encountered Telephone Survey

37. Advantages Inexpensive – no trained interviewer Disadvantages Questions must be simple to answer Response rate is low Often need prize-draws etc to encourage response Postal Survey

38. Advantages Qualitative information gained Disadvantages Difficult to analyse Results can be flawed – complimentary comments Qualitative information gained Hall Test

39. Advantages Accurate customer profiles Offer promotions linked to customer needs Monitors brand loyalty Disadvantages Expensive to set up EPOS (inc Loyalty Cards)

40. Advantages Qualitative information gained Disadvantages Can’t ask questions that explain actions – no direct contact with customer Observation

41. Advantages Highlights aspects of product which are disliked Saves expensive national launch Disadvantages Regional tastes may not be representative Test Marketing

42. This is a group of people who are consulted on their reactions to a product over a period of time. eg a number of households throughout the country have the TV programmes they watch monitored electronically Consumer Panel

43. When conducting market research it is often not feasible to question every potential respondent. A sample has to be selected … but how? Sampling

44. Individuals preselected from a list Each person has an equal chance of being chosen No bias involved in selection – however may be unrepresentative of population Must interview people selected – expense! Random Sampling

45. Makes a random group more representative Sample is divided into segments with a representative sample then chosen from each group More administration and effort than simple random sampling Stratified Random Sampling

46. Interviewers are given targets for the number of people out of each segment (eg age, sex, marital status) they must interview More targeted method of sampling the population interested in particular goods/services Quota Sampling

47. Cluster Sampling Multi-Stage Sampling Snowballing Other Sampling Methods

48. Decision Making Reducing Risk Link with the Outside World Size of Markets Public Relations Benefits of Market Research

49. No Guarantees eg New Coke – returned to original recipe eg Levi’s failed to enter men’s suit market Sampling Bias Human Behaviour Interviewer Bias Size of Sample Expense of gathering information Problems with Market Research

50. Promotion Product Place Price The Marketing Mix