Unit 5 - Marketing

• The Boston matrix is a tool that allows a business to analyse the value / prospects of each product in their portfolio.
• Competitive pricing is setting a price to be in line with a competitors’ price for the same or similar products
• Cost-plus pricing is adding a percentage to the cost of producing a product so that a profit is made
• Penetration pricing is setting a low price in order to establish a new product in a market, or to quickly gain market share
• Price skimming is setting a higher than usual price when a product is first released to capitalise on early

  adopters being willing to pay more.
• Market Research is the process of a business collecting information that will help it to better compete with its opposition. It enables them to gain a better insight into their customers, and their wants and needs, and their competitors.
• Traditional – via a shop / office
• Telesales – sales made by phone direct to the customer
• Modern retail – using technology to improve the process (i.e. self-scan/checkout)
• E-commerce / M-Commerce – sales via a website or app
• Benefits of accurate segmentation

  • Businesses design better products, advertising, and prices, and promotions, which lead to more sales.
  • Understanding our customer better, we can predict what they may want in the future.
• Drawbacks of segmenting / risks of doing it badly

  • Detailed research will be required – this can be expensive
  • It can be very difficult to accurately predict what a customer will like or dislike
  • All of our competitors will be trying to do the same thing
• Segmentation allows businesses to focus on individual groups, such as men/women, age groups, geographic location, levels of income.
• Direct marketing is when manufacturers speak to customers without intermediaries. Often with leaflets or door-to-door salespeople.
• Intermediary is a businesses in the middle of the distribution channel between manufacturer and

  the customer.
• Loss Leader is a product sold for less than it costs in order to encourage more customers. For example, fuel at supermarkets.
• Promotion is the name given to all of the business activities that encourage the customer to buy a product.
• Why we promote:

  • Inform/remind customers about the product
  • Create or increase sales
  • Create or change the image of the product
  • Persuade customers to buy or try the product
• Advertising are the types of adverts you would be

  familiar with on TV, Radio, in newspapers, on the internet and on billboards
• Public Relations events and activities are the ones that change how we think about a business. For example, some give to charity.
• Sales Promotions are Special offers and displays. 2 for 1 and BOGOF, free gifts, coupons, samples, competitions.
• Sponsorships are when businesses fund people to promote their products, e.g. businesses often sponsor football teams or sporting events.
• Social Media helps to interact with customers via social media, which is increasingly important to modern business. It involves the customer in the brand.
• Product lifecycle are the stages a product goes through from initial idea to removal. Research and

  Development > Introduction > Growth > Maturity > Decline (> Rejuvenation / Extension).