3.3

•  Marketing Objectives: set out what a business wants to achieve from its marketing activities.​

   -They need to be consistent with overall aims and objectives of the business. ​

  -They also provide an important focus for the marketing team. set out what a business wants to achieve from its marketing activities.​

  -They need to be consistent with overall aims and objectives of the business. They also provide an important focus for the marketing team.​
• Secondary Market Research; data that already exists – collected for a different purpose ​

  Examples: Market Reports & Industry Associations, sales transactions, big data ​

  -Often free and easy to obtain as already complete​

  -Good source of market insights ​

  -Quick to access and use ​

  -Can quickly become out of date ​

  -Not always tailored to specific research needs ​

  -Can be quite expensive for specialsied reports ​
• Primary Market Research: data that is collected first hand/freshly for a specific research purpose - Examples: Focus groups, Interviews, Surveys and questionnaires, mystery shoppers and product testing​

  -Fit for purpose – directly focussed on objectives​

  -More up to date and relevant data ​

  -More detailed insights – customers personal views​

  -Time consuming and often costly to gather ​

  -Risk of bias – samples may not be representative​
• Internal Influences on Marketing Objectives: ​

  -Corporate objectives – most important and should not be conflicted ​

  -Finances – how finances affect budgets etc ​

  -Human Resources – Quality and capacity ​

  -Operations – Managing capacity effectively ​

  -Business Culture – how important and customers needs compared to sticking to a budget ​
• External Influences on Marketing Objectives: ​

  -Economical Environment – key factor in determining demand ​

  -Competitor Actions – how can competitors respond/counteract​

  -Market Dynamics – Market growth, share and segmentation​

  -Technological Change – rapid tech advances – more innovation​

  -Social Change – changes to attitudes of society ​

  -Political Change – changes in laws and legislation​
• Quantitative Research: based on data ​

  -Questions are how often, who, when and where​

  -Based on large samples ​

  -Gathered through surveys online or face to face​

  -Data is easy to analyse ​

  -Provides insights into relevant trends/fashions​

  -Can be compared with other data (competitors)​

  -Focus on data > why things actually happen ​

  -Does not explain numerical trends ​

  -May lack validity unless sample size is large ​
• Qualitative Research: data based on opinions ​

  -Questions are why, would and how related ​

  -Aims to understand why customers follow certain trends and their responsive behaviours ​

  -Gathered through focus groups and interviews ​

  -Enables product development and successful product launches ​

  -Focus on customer needs, wants and expectations​

  -Highlights issues and tests the marketing mix ​

  -Expensive to collect and analyse ​

  -Requires specialist research skills ​

  -Based on personal opinions – risk that opinions will not be representative of the whole market ​
• Sampling: gathering data from a sample of the market – the results should be representative of the population as a whole (target market)​

  -Small sample sizes can be useful if representative of the whole market ​

  -Helps to reduce risks and costs associated with decision making ​

  -Flexible and quick to gather ​

  -Risk of bias in research questions and responses ​

  -Sample may be unrepresentative of whole market - incorrect conclusions​

  -Not useful in market segments where customer tastes are forever changing​
• Market Share: the share of a total market owned by a product, brand or business ​

  Market Share = Sale of one product/brand/business / total sales in the market x 100 ​

  Market Growth; the % growth in a market over a period of time ​

  Market Growth = Change in the size of the market in a given period / original size of the market x 100 ​

  Market Size: the total volume of a certain market ​
• Positive and Negative Correlation; ​

  -Correlation is the strength of a relationship between two variables ​

  -Independent Variable – the factor that causes the dependent variable to change ​

  -Dependant Variable – influenced by the independent variable ​

  Positive Correlation – when both the dependent and independent variable increases in value ​

  Negative Correlation – when the independent variable increases and the dependent decreases ​

  No Correlation – no relationship between either value ​
• Confidence Intervals – gives the % probability that an estimated range of possible values in fact includes the actual value being calculated ​

  -Businesses benefit from the use of statistics in estimating and predicting future events ​

  -Helps a business evaluate the reliability of a particular estimate ​

  -No estimates are 100% correct – businesses need to know how confident they should be in their estimates and how to act on them​

  
• Extrapolation: Use of past data to establish a trend which is then projected into the future.​

  -Based on data already gathered – free to reuse ​

  -Helps set targets ​

  -Allows businesses to carry out scientific (data based) decision making ​

  -Based on previous circumstances and may not consider changes external changes ​

  -Relies on previously collected data being highly accurate ​

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• Market Mapping ​

  -A useful framework for analysing market positioning is a “market (positioning) map”. ​

  -A market (or positioning) map illustrates the range of “positions” that a product can take in a market based on two dimensions that are important to customers.​
• Advantages of positioning maps​

  Help spot gaps in the market​

  Useful for analysing competitors – aids strategy and future product developments to remain competative ​

  Encourages use of market research​

  Disadvantages of positioning maps​

  Just because there is a “gap” doesn’t mean there is demand for the product​

  Not a guarantee of success​

  Market research that maps the position of existing products may not always be reliable ​
• Price Elasticity of Demand (PED) is the responsiveness of demand to a change in price.
• PED measures the extent to which the quantity of a product demanded changes to a change in price.
• PED = % Change in Quantity Demanded / % Change in Price.
• A PED of >1 indicates Price Elasticity, meaning a change in price causes a large change in demand, leading to an increase in revenue when the price goes down.
• Products with strong brand loyalty are often inelastic.
• Necessary products are often inelastic to price.
• Products used often as a habit are often inelastic.
• Products with a range of substitutes are price elastic.
• Price change is often only a short term impact.
• Elastic Products include Chocolate, Bread and Newspapers.
• Inelastic Products are Football Tickets, Train Tickets, Cigarettes, Sky TV and Luxury Handbags.
• Income Elasticity of Demand (YED)​

  -The responsiveness of demand to a change in income ​

  -Measures the extent to which the quantity of a product demanded is affected by a change in income.​

  YED = % Change in Quantity Demanded / Quantity Change in Income​

  Most Products: ​

  • A rise in consumer income will result in a rise in demand​
  • A fall in consumer income will result in a fall in demand​

  Inferior Products: as income rises demand actually falls. ​

  -Consumers switch to better alternatives​

  -Substitute products become affordable​

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• Technology and Data in Marketing Decision Making: ​

  -Data Analytics - systematically applying statistical and/or logical techniques to evaluate data ​

  Dynamic Pricing -  revenue management pricing strategy in which businesses set flexible prices for products or services based on current market demands ​

  Audience Reach – The number of customers who have seen or interacted with the business from within the target market​

  Customer Relationship Management - manage interactions with customers and potential customers​
• Digital Marketing -  the promotion of brands to connect with potential customers using the internet and other forms of digital communication.​
•  E-Commerce - the activity of electronically buying or selling products on online services or over the Internet.​
• Market Segmentation: splits up a market into different types (segments) to enable a business to better target its products to the relevant customers.​

  -Dividing an existing market into parts that reflect customer needs and wants ​

  -Demographic, Geographic, Income and Behavioural segments ​

  -Focusses resources to parts of the business that drive success​

  -Aids product development and grows market share ​

  -Makes a businesses marketing mix more effective ​

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• Disadvantages of Market Segmentation - -Data is not always reliable, up  to date or available ​

  -Customers aren't always reachable in some segments ​

  -Markets are dynamic therefor fast changing
• Niche Market: a smaller segment of a large market where customers have more specific needs and wants ​

  -Less Competition, Clear Focus, High Prices,  high Brand Loyalty​

  -Lack of EoS, Market change likely, competitors may be attracted 
• Mass Market: largest part of a market where there are many similar products offered by competitors and customers are less specific about their needs and wants ​

  -Customers form a large part of the market ​

  -Needs and wants are more general and less specific ​

  -Businesses succeed at low cost highly efficient operations​

  -Widest potential customer base and low unit costs - EoS
• The Boston Matrix

  
• Product Life Cycle

  
• Consumer Goods – Products bought for consumption by the average consumer – food, clothing, vehicles and appliances ​

  Industrial Goods – Products used by businesses during the production of other goods - raw materials and industrial machinery​
• Penetration Pricing: offers a product at a very low introductory price ​

  -Aims to gain market share, build brand loyalty and build sales steadily over time​

  -Increase in market share and sales should generate low unit costs ​

  -Demand in the market must be highly price sensitive (price elastic)​

  -Customers may not like a price hike ​

  -May attract customers looking for low cost products rather than loyal ones ​

  -Retaliation from competitors ​
• Price Skimming: setting a high price in order to gain high profits when a product is first launched – product sold to different market segments at different times​

  -Top Segment is skimmed first with the highest price ​

  -Works well for products where there is excitement – new iPhone and game consoles ​

  -Most successful when used in the introduction or early growth stage of a product ​

  -Products have to have high quality and good brand image to have high prices​

  -Must be enough consumers willing to pay a high initial price ​
• Branding - the promotion of a particular product or company by means of advertising and the use of the marketing mix ​
• Promotional Decisions -  the way in a business makes its products known to the customers, both current and potential.​

  -Above the line promotion – paid for communication in the independent media e.g. advertising on TV or in the newspapers. Though it can be targeted, it could be seen by anyone outside the target audience.​

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