Unit 3 - marketing

• Marketing is "the process of identifying, anticipating (predicting) and satisfying customer needs profitably"
• Marketing objectives need to be consistent with the purpose of marketing and support the overall corporate (business) objectives
• Corporate objectives

  • Marketing objectives
  • Marketing strategy
  • Marketing mix
• Corporate objectives

  • Grow revenues by 15% p.a. in each of the next five years
• Marketing objectives

  • Increase UK market share to 17%
  • Grow average customer spend by 5%
• Marketing strategies

  • Refocus product range on high margin items
  • Introduce customer relationship management systems into industrial division
• Marketing mix

  • Improve agreements with key suppliers
  • Launch new distribution channel
  • Attend exhibitions in new territories
• Examples of Marketing Objectives Supporting Corporate Objectives

  • Achieve revenue growth of 20% per year for the next four years
  • Increase our market share in the UK by 5% by 2017
  • Add 1,000 new customer accounts generating at least £100,000 per account within four years
  • Launch at least 25 new products into the industrial channel in 2016 and 2017
  • Grow average first-year sales of new editions by 25% in the Higher Education sector
  • Achieve at least an 95% excellent customer service rating each month
  • Increase the proportion of sales bookings from repeat business to 75%
• Marketing Objectives

  • Achieve revenue growth of 20% per year for the next four years
  • Increase our market share in the UK by 5% by 2017
  • Add 1,000 new customer accounts generating at least £100,000 per account within four years
  • Launch at least 25 new products into the industrial channel in 2016 and 2017
  • Grow average first-year sales of new editions by 25% in the Higher Education sector
  • Achieve at least an 95% excellent customer service rating each month
  • Increase the proportion of sales bookings from repeat business to 45% for the summer season
  • Supply a minimum of 50,000 trial downloads per month
  • Increase the number of customer enquiries from the EU by 10,000 per month
  • Recruit five distribution agents in the four target countries within 12 months
  • Reduce average distribution costs to less than 5% of gross revenue
  • Reduce the order lead time by 15%
  • Improve brand recognition amongst the 25-34 age group
• The marketing objectives set will inevitably have an impact on the other functional areas of the business
• Potential problems with setting marketing objectives

  • Fast-changing external environment
  • Potential conflict between marketing objectives
  • Easy to be too ambitious with marketing objectives
• Gaining an advantage over competitors

  • Reduce average distribution costs to less than 5% of gross revenue
  • Reduce the order lead time by 15%
  • Improve brand recognition amongst the 25-34 age group
• Internal influences on marketing objectives

  • Corporate objectives
  • Finance
  • Human resources
  • Operational issues
  • Business culture
• Operations

  • Key role in enabling the business to compete on cost (efficiency / productivity) and quality
  • Effective capacity management plays a part in determining whether a business can achieve its revenue objectives
• Business culture

  E.g. a marketing-orientated business is constantly looking for ways to meet customer needs. A production-orientated culture may result in management setting unrealistic or irrelevant marketing objectives.
• Marketing research

  Involves the gathering and analysis of research to help support the implementation of marketing strategy

  
• Purpose of marketing research

  • Provide insights that aid marketing strategy and decision-making
  • Dimensions of the market (size, structure, growth, trends etc.)
  • Competitor strategies (market share, positioning, USPs)
  • Needs, wants and expectations of customers (& how these are changing)
  • Market segments – existing and potential opportunities for new segments

  
• Types of marketing research

  • Primary research
  • Secondary research
• Secondary research

  Often free and easy to obtain, quick to access and use, can quickly become out of date, not tailored to business needs, sampling may not be representative
• Formats of primary research

  • Focus groups
  • Observation
  • Surveys
  • Telephone interviews
  • Test marketing
  • Experiments
• Observation

  Watching how consumers behave provides many insights, but can leave questions unanswered. Works well in retail markets.
• Telephone interviews

  Allows quicker feedback than a postal survey, but potential customers are often wary and may be reluctant to give anything other than short answers
• Face-to-face surveys

  Personal interviews conducted face-to-face, a costly but good way to get detailed insights from an individual
• Online surveys

  Increasingly popular and relatively low cost, online surveys are widely used by small businesses as a way of capturing the views of existing and potential customers
• Face-to-face surveys

  Personal interviews conducted face-to-face. A costly, but good way to get detailed insights from an individual
• Focus groups

  Groups of potential customers are brought together to discuss their feelings about a product or market. Focus groups are a good way of getting detailed information about customer tastes and preferences
• Test marketing

  This involves selling a new product in a small section of the market in order to assess customer reaction. For example, a start-up could start by selling to a limited local area in order to iron-out product issues. Software firms often test-market their products by offering "beta" versions for testing by a small group of potential customers. Test marketing can be a good predictor of how a new product or service will be received by the larger market (provided that it can be kept secret from competitors!)
• Quantitative research

  Concerned with and based on data, addresses research questions such as "how many?" "how often", "who?", "when?" and "where?", based on larger samples and is, therefore, more statistically valid, main methods of obtaining quantitative data are the various forms of survey – i.e. telephone, postal, face-to-face and online
• Qualitative research

  Based on opinions, attitudes, beliefs and intentions, answers research questions such as "Why"? "Would? or "How?", aims to understand why customers behave in a certain way or how they may respond to a new product or service, focus groups and interviews are common methods used to collect qualitative data
• Drawbacks of qualitative research

  • Expensive to collect and analyse – requires specialist research skills
  • Based around opinions – always a risk that sample is not representative
• Benefits of quantitative research

  • Data relatively easy to analyse
  • Numerical data provides insights into relevant trends
  • Can be compared with data from other sources (e.g. competitors, history)
• Drawbacks of quantitative research

  • Focuses on data rather than explaining why things happen
  • Doesn't explain the reasons behind numerical trends
  • May lack reliability if sample size and method is not valid
• Sampling

  Involves the gathering of data from a sample of respondents, the results of which should be representative of the population (e.g. target market) as a whole
• Benefits of sampling

  • Even a relatively small sample size (if representative) can provide useful research insights
  • Using sampling before making marketing decisions can reduce risk and costs
  • Sampling is flexible and relatively quick
• Primary data

  Research data collected first-hand for a specific purpose
• Secondary data

  Existing research data that has been collected and analysed for a different purpose
• Quantitative research

  Research based on numerical data
• Qualitative research

  Research based on views and opinions
• Making marketing decisions

  Can reduce risk and costs
• Risk of bias in research questions