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AS Economics and Business The purpose of marketing in changing markets Unit 2B

AS Economics and Business The purpose of marketing in changing markets Unit 2B. By Mrs Hilton for revisionstation. Spec. Lesson Objectives. To be able to define marketing To be able to discuss the purpose of marketing To be able to answer a past paper question on the topic. Starter.

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AS Economics and Business The purpose of marketing in changing markets Unit 2B

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  1. AS Economics and Business The purpose of marketing in changing marketsUnit 2B By Mrs Hilton for revisionstation

  2. Spec

  3. Lesson Objectives • To be able to define marketing • To be able to discuss the purpose of marketing • To be able to answer a past paper question on the topic

  4. Starter • What do you want to buy right now? Do you have your eye on any products?

  5. Definition of marketing • “The process of identifying, anticipating (predicting) and satisfying customer needs profitably”

  6. Definition deconstructed • Identifying – finding out by using marketing research about current products, the possibility of new products, and current markets and new marketsAnticipating (predicting) – analysing the data collected and using the managers skills to judge what might happen in these markets and how the products might be suited or changed, adapted or updatedSatisfying customer needs – making sure the person, business or government are happy with what they are buying, will not complain and will be happy to buy again if appropriateProfitably – adding value to the product so when sold, the price of the product is greater than cost of the inputs. • All of these marketing activities take place in a market.

  7. Definition of Market share • Percentage of total sales volume in a market held by a brand, product or firm • or formula: • Sales of a business x 100 • Total sales in a market

  8. Purpose of marketing • To defend or gain market share... • In business we would use the marketing mix to gain market share • Price • Product • Promotion • Place • These strategies can be used to increase demand for a product and therefore raise market share

  9. Using the marketing mix • In business, you need to persuade a customer to part with their income in exchange for a good or a service.  • You have decide on what the product is going to be like (e.g. shape, colour, size, features); • at what price are you going to sell it; • How much are these shoes?

  10. Using the marketing mix continued • You must decide the place where you are going to sell it (e.g. in a shop, over the Internet, by mail order) • Also decide how to promote the product so that the customer can find out about the product (e.g. advertise in the local newspaper or on the radio).  • Marketing is all of these things.  Its hard work – but it is a vital part of running a successful business.

  11. Marketing ethics

  12. Definition of ethics • An action is morally right or wrong depending on the consequences of that action

  13. Unethical marketing behaviour leading to: • unsafe products http://www.youtube.com/watch?v=_mcsgGGwfy0 - price fixing (oligopolistic industries) • deceptive advertising http://www.youtube.com/watch?v=AV_Y_bvYmws • dubious warranty • planned obsolescence of product http://www.youtube.com/watch?v=N2KLyYKJGk0 • manipulation or coercion of vulnerable customers (children and elderly) http://www.youtube.com/watch?v=5ahMQwxN9Js • Invasion of privacy (obtaining data without permission) • Stereotyping in marketing conclusions – drawing unfair conclusions – track suit wearer poor or PE teacher?

  14. Ethical advertising problems • Advertising and promotion • Issues over truth and honesty • Issues with violence, sex and profanity • Taste and controversy • Negative advertising • Advertising in the UK is regulated by the Advertising Standards Authority, which regulates advertising across all media, including TV, internet, sales promotions and direct marketing. The ASA’s role is to ensure ads are legal, decent, honest and truthful by applying the Advertising Codes. • Banned adverts http://www.youtube.com/watch?v=bqbcYbq13Ow

  15. Sample question 1 • Recommend two ways a European ski firm could try to increase its sales. • [8]

  16. Answer question 1

  17. Sample question 2

  18. Answer question 2 Level 2 e.g. Fox Brothers could increase sales revenue by advertising more to High Street tailors e.g. Fox Brothers could make cheaper cloth and sell it in a mass market Level 1 e.g. profit is the difference between revenues and costs e.g. pricing, advertising, cutting costs, marketing, use of JIT, delayering Level 4 e.g. Cutting costs through redundancies is a quick way to reduce costs but may cause motivational problems for remaining Fox Brother’s skilled employees e.g. Advertising may increase demand and awareness of Fox Brothers to more Savile Row tailors or clothing businesses but has an opportunity cost associated with it such as not being able to pay increased wages to skilled/specialist cloth making employees e.g. TQM can improve productivity/quality of the cloth but may lead to retraining and reorganisation of the business Level 3 e.g. If Fox Brothers tried to cut cost then they may reduce the skilled workforce/ become more productive by introducing TQM/lean production techniques e.g. If Fox Brothers tried to increase sales revenue to Savile Row tailors then they may decide to use the Marketing Mix such as pricing strategies and marketing strategies to increase demand

  19. Sample question 3 • What is meant by the term ‘market share’ [2]

  20. Answer question 3 • Knowledge 2 • Knowledge/understanding: up to 2 marks are available for defining or describing what is meant by market share • Percentage of total sales volume in a market held by a brand, product or firm or formula: • Sales of a business x 100 • Total sales in a market

  21. Sample question 4 • Briefly explain one way in which JLR could increase its market share. [4]

  22. Answer question 4 • Knowledge: up to 2 marks are available for defining market share e.g. Percentage of total sales volume in a market held by a brand, product or firm (1 mark) or one way JLR could increase its market share e.g. pricing, advertising, merging etc • Application: up to 1 mark is available for contextualising how JLR can increase market share e.g. pricing strategies (1 mark), marketing strategies (1 mark), new product development. (1 mark), innovation (1 mark), competitive advantage (1 mark), merging/take over another car firm (1 mark) • Analysis: up to 1 mark is available for further developing the above and how JLR can realistically achieve an increase in market share within a very competitive market and the implications of the above strategies in relation to the effectiveness of increasing market share from rival car companies. • 4 marks total

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