Unit 3 - Marketing

• Marketing


  • Identifies customer Needs and Wants
  • Finds out what customers need and want
  • Tries to anticipate what they'll want in the future so that the business can be one step ahead of the market
• Marketing


  • Tries to ensure that the business supplies goods and services that customers want in order to make a profit
  • It's mutually beneficial - the customer gets something they want, the business makes a profit
• Marketing covers


  • Research
  • Analysis
  • Planning
  • The "marketing mix"
• Marketing mix

  All the decisions a business makes about promoting and selling a product
• Most larger businesses have a specialised marketing department - but marketing affects all departments
• Once a company has a customer base, marketing helps make sure that customers stay loyal to that brand
• Marketing objectives


  • Targets that a company's marketing department sets itself
  • Valuable in helping the company to achieve its overall objectives
  • Should be SMART
• Marketing objectives often focus on

  • Sales volume
  • Sales value
  • Sales growth
• Sales volume

  Number of units sold over a certain period of time
• Sales value

  Total amount of money coming in from sales
• Sales growth


  Increase in sales volume or sales value over a period of time
• Market share

  Percentage of sales in a market made by one firm or brand
• Market size

  Total number of sales (or total value of sales revenue) in the market over a period of time
• Market growth


  When the market size increases from one period of time to another
• Marketing objectives are usually quantitative, with specific figures to aim for
• Marketing objectives can also be qualitative (non-numeric), such as improving product quality, making sure a particular product survives when a rival product enters the market, and creating and maintaining brand loyalty
• Brand loyalty


  Holding on to existing customers, rather than just attracting new ones
• Government regulations have a direct impact on the objectives of the marketing department
• Examples of government regulations affecting marketing

  • Predatory pricing
  • Trade Descriptions Act
  • Advertising restrictions on prescription medicines, tobacco, and alcoholic drinks
• Market


  The area of economic activity in which buyers and sellers interact, and in which the forces of supply and demand affect prices
• Understanding the market

  1. Identify the market (local, national, international, online, physical)

  2. Identify the target audience
• Ways to classify a market

  • Geography (local, national, international)
  • Development level (new, growing, saturated)
  • Nature of the product (e.g. agricultural, technological)
  • Product destination (trade, private consumers)
  • Seasonality (seasonal or year-round)
• Market analysis

  1. Look at sales growth

  2. Look at market growth

  3. Look at market share

  4. Conduct market mapping
• Market growth

  The percentage increase in the size of a market over a given period
• If market growth is negative, the market is shrinking
• In a growing market

  Several firms can grow easily
• In a shrinking market

  Competition can be heavy as there are fewer customers to go around
• Market share

  The percentage of sales in a market that is made by one firm, or by one brand
• Letting your market share go down is not good as it means competitors are gaining an advantage over you
• Sales growth

  The percentage increase in a company's sales over a given period
• Sales growth doesn't have to be yearly - it can be measured over any time period
• If sales growth is positive then the company is gaining sales, if sales growth is negative then the company is losing sales
• Market mapping

  A technique that compares two features of products or brands, e.g. low price vs. high price, low quality vs. high quality
• Market mapping can help a business spot a gap in the market and try to fill it with a new product or brand
• Market mapping can show a business who its closest competitors are so they can plan the best marketing strategy
• Market mapping can show how customers view a product and help a company reposition it
• Market mapping can show the features provided by the most popular brands, indicating the benefits considered most desirable by the target market
• Market mapping can show how much customers expect to pay, helping a company with its pricing strategy
• Market mapping can oversimplify things as the positions of products and brands is usually a matter of opinion and may be biased
• Three Main Reasons for Market Research

  • Helps businesses spot opportunities
  • Helps them see if their plans are working
  • Market research can be expensive and bad market research can lead to disastrous business decisions