3.1 (Marketing, competition and the customer)

• The marketing funnel is a model that shows the stages of the customer journey from awareness to purchase.

  
• Marketing is a set of activities related to creating, communicating and selling goods/ services that have value. They aim to bring value to:

  • identify
  • satisfy
  • retain

  customers.
• The role of marketing:

  • Identify customers, their needs and how much they value addressing them
  • to inform the product/ service design to ensure it meets customer needs and with value proportion to its cost
  • Communicating with customers, explaining who offers them and why they are desirable
  • Listen to customers and communicate how well they satisfy customer needs and improve opportunities
  • Location and terms of the transaction to customers after the product/ service is delivered
• Factors influencing consumer decisions:

  • Situational factors -> buying task, market offerings
  • Personal factors -> Demographics, life stage, lifestyle and personality
  • Psychological factors -> Motivation, learning, attitude and beliefs
  • Social factors -> Culture/ subculture, Social class, family and reference groups
• Factors influencing consumer spending patterns:

  • price of a product
  • price of competition products
  • change in consumer income
  • change in population size and structure
  • change in taste and fashion
  • spending on advertisements and promotions
• Why do markets become more competitive?

  • Government intervention in markets
  • Growth of free trade
  • Development of e-commerce and social media networks
• Business response to changing spending patterns and increased competition:

  • Product development
  • Improve efficiency
  • Increased promotion
  • Look for new markets
• Niche marketing: Identifying and exploiting a small segment of a larger market by developing products to suit it
• Pros and Cons of Niche marketing:

  Pros:

  • Less competition
  • Brand Loyalty
  • Best for giving market insights
  • Saving on your marketing cost

  Cons:

  • Profitability
  • High production cost
  • Limited growth
  • High risk
• Mass Marketing: Selling the same product to the whole market without attempting to target groups
• Pros and Cons of Mass Marketing

  Pros:

  • massive earnings potential
  • Economy of scape, cheaper production costs
  • Simple product R&D
  • Long lasting success

  Cons:

  • Tough competition
  • Hard to get chosen by traditional retailers
  • Limited brand loyalty
  • Can only differentiate through advertising
• Market Segmentation: Aggregating prospective buyers into groups or segments with common needs and who respond similarly to a marketing action
• The 4 types of Market segmentation

  
• Benefits of Market segmentation:

  • Higher rate of success
  • Increases profitability
  • Increases competitiveness
  • Know your customer better
  • Retention of customer
  • Provides Market Opportunities
  • Effective Market Campaigning
  • Wise and Efficient use of resources
  • Higher customer satisfaction
  • Cost- Efficient