comp2 may include whats in comp 1

• Content areas


  • Marketing
  • Finance
  • People in organisations (human resources)
  • Operations management
• Marketing process


  1. Researching the market

  2. Analysing the market

  3. Setting the marketing goals

  4. Developing a marketing strategy
• Market orientation/market led


  When a business bases its marketing mix on its perception of what the market wants
• Features of market orientated approach

  • Consumers are central to a business's decision making – strong understanding of their needs
  • Can respond quickly to changes in the market
  • In a strong position to meet the challenges of new competitors entering the market
  • More able to anticipate market changes
  • More confident that the launch of new product will be a success
• Benefits of market orientation


  • Customers get greater satisfaction
  • Customer focus means the business will continue to improve and upgrade products/respond to changes
  • Satisfaction leads to repeat purchases and brand loyalty
  • Loyal customers buy more frequently and in greater volume
  • Loyal customers are less susceptible to competition and are more willing to pay higher prices
  • Long term profitability means that a business will remain viable and successful
  • Familiarity with the market allows a business to build emotional impact into their advertisements, i.e. to market more effectively objectives of the business – increase growth
• Drawbacks of market orientation

  • High-cost market research to understand the market
  • Constant internal change as the needs of the market are met
  • Unpredictability of the future, especially from the point of view of staff
  • Abandonment of earlier product investment
• Product orientation


  When a business bases its marketing mix on what the business sees as its internal strengths
• Features of product orientated approach


  • Emphasis on developing, producing and selling a technically sound product
  • Contact with the consumer largely at the final stage
  • An approach that is more likely to succeed when there is little or no competition
  • Fashion and tastes are not accounted for in product mix
• Benefits of product orientation

  • Increase economies of scale
  • Focus on product development
  • Easier to apply production management methods
  • Focus on quality
• Drawbacks of product orientation

  • Changes in market structure will not be responded to
  • Fashion and taste are not accounted for in the product mix
• Asset led marketing


  A marketing strategy based on a business's strengths, not solely on the customers' needs
• Taking an asset-led marketing approach means that a business can build on

  • Its tangible strengths, which might include its product, production techniques and distribution network
  • Its intangible strengths, such as goodwill, branding, experience and image
• The World's most valuable brand

  • McDonald's
  • Coca-Cola
  • Pepsi
  • iPhone
• Advantages of Asset-led marketing

  • Strengths linked to market needs. This could be a reputable brand extending their product range, e.g. the makers of Marmite have produced marmite flavoured rice cakes.
  • The business will be aware of its weaknesses and will not produce products that it does not believe it can do well just because the market has requested them.
  • The cost of market research may be less.
  • Likelihood of success likely to be greater
• The marketing mix


  The combination of product, price, place and promotion for any business venture
• Product portfolio


  The mix of products the business produces and sells
• Benefits of having a product portfolio

  • Spreads fixed costs
  • Allows for greater economies of scale
  • Allows the targeting of wider markets
  • Reduces risk
  • Smooths out overall sales
  • Creates opportunities for growth
• Product differentiation


  Making your products different from the competition is important. This separates your brand from competitor brands. Products might be very similar in the way that they are made or how they are used but may be perceived quite differently by consumers
• Ways to differentiate products from the competition

  • Methods of promotion – creating a personality for the product
  • Packaging – eco-packaging
  • Form – making your products look different from the competition
  • The provision of add-ons – Kia cars have a seven-year warranty
  • Quality and reliability – these are features which can be emphasised (for example, BMW and Rolls-Royce cars)
• The product life cycle

  1. Development

  2. Introduction

  3. Growth

  4. Maturity and Saturation

  5. Decline
• Reasons for a change in the product life cycle

  • Fall in demand for products – people are buying alternatives.
  • Same quantity of goods sold – at lower price so value fallen.
  • Goods available from alternative suppliers – supermarkets etc. – internet.
  • Recession – loss of jobs – fall in purchasing power – all goods fallen in demand.
  • Technological change – e.g. downloading.
  • Products already owned – don't need any more.
  • Products last longer – don't need to buy them as so often
• The Boston matrix


  Shows the market share of each of business' products and the rate of growth of the markets in which they operate
• Features of the Boston matrix

  • Cash Cows – high market share in a relatively slow growing or declining market
  • Problem Child (also known as a Question Mark) – low market share in a high growth market
  • Star – high market share in a high growth market
  • Dogs – low market share in a low growth market
• Extension strategies


  • New feature
  • Develop a wider product range
  • Aims at a specific target market
  • Change brand name /packaging /appearance
  • Product different quality
  • Market in different places
  • New promotions
  • Adopt new pricing strategies
• Objectives of Promotion


  • To increase sales
  • To raise awareness
  • To target specific groups
  • To try and beat the competitors
  • To develop/improve the image of the company
• Types of promotion


  • Above the line
  • Below the line
• Above-the-line promotion


  Through independent, mass media, which is indirect and allows a business to reach a wide/large audience such as through television, newspapers, radio, magazines, cinema, website/internet
• Below-the-line promotion


  Offers a wide range of alternative promotional strategies. These are often used to support above-the-line promotion. Below the-line promotion targets consumers directly.
• Below-the-line promotion methods


  • Direct mailing
  • Point of sale merchandising/shop window
  • Exhibitions and trade fairs
  • Flyers
  • Personal selling
  • Packaging
  • Public relations
  • Sales promotion
• Factors impacting on the promotional strategy

  • Product differentiation
  • The marketing budget available
  • The stage in the product life cycle
  • Cultural sensitivity
  • The target market
  • Competitor actions
• Price takers


  Businesses will have to accept the price set by the market through the interaction of supply and demand, will set the price of products and also determine the quantity supplied
• Price makers


  When a business is not a price taker, which is the case in the majority of markets, then it has the opportunity of using pricing strategies
• Different types of pricing strategies

  • Penetration pricing
  • Price skimming
  • Going rate pricing
  • Destroyer/predatory pricing
  • Loss leader pricing
  • Contribution pricing
  • Cost plus pricing
  • Psychological pricing
• Penetration pricing


  The objective is to gain market share. It involves pricing a product at a low level so that retailers and consumers are encouraged to purchase the product in large quantities
• Advantages of penetration pricing

  • This pricing strategy can help establish brand loyalty – when the price of the product does rise from the initially low level, customers will continue to purchase it
• Disadvantages of penetration pricing

  • If the price is set too low, customers may think that the product is low quality and therefore they will not purchase it in the first place
• Price skimming


  Market skimming involves charging a high price for a product that has a unique selling point (USP) for a limited period. This involves selling a product to the most profitable segment of the market before it is sold to a wider market at a lower price
• Advantages of price skimming

  • To take advantage of the newness of the product and gain as much revenue/profit as possible
  • To generate revenue in a short period of time
• Going rate pricing


  They must sell their goods or services at a price broadly in line with the price charged by their competitors
• Loss leader pricing


  Involves the selling of products at a loss, with the expectation that this will generate further sales of some form elsewhere in the business