Marketing

• Market


  Any situation made up of a group of individuals, organisations/institutions who interact in the process of buying and selling goods and services. It may also be a place where buyers and sellers meet.
• Marketing


  The management process which consists of all the activities of identifying and anticipating the needs of the consumer with the aim of satisfying those requirements.
• Marketing Activities


  • Market Research
  • Pricing
  • Packaging
  • Branding
  • Sales Promotion
  • Advertising
  • Distribution
  • Selling
  • After Sales Services
• Marketing Mix


  A collective term used to describe the major activities of marketing. It consists of the four Ps: Product, Price, Place, Promotion.
• Product


  The good or service to be produced.
• Packaging


  • Presents the product
  • Must be durable
  • Protects the product
  • Preserves the life of the product
  • Provides information
  • Sets it apart for other similar products
• Branding


  Usually accomplished by a symbol, name or design e.g. MacDonald Arches, Cocoa Cola, NIKE
• The product must meet the requirements of the consumers if it to at least have a chance of succeeding.
• Price


  The dollar value given to the service or product.
• Pricing Objectives


  • Survival
  • Profit maximisation
  • Market share Leadership
  • Product quality Leadership
• Break-even Analysis


  The price is set to cover expenses, making no profit or loss. Unit cost price equals selling price.
• Penetration Pricing


  The initial price is set lower than competitors which should encourage new consumers to buy and existing consumers to switch to their product. Eventually the price is raised with the hope that not all consumers will switch to the competitors' products.
• Psychological Pricing


  Some products are deliberately priced high to achieve the "snob effect". It makes the consumer think that good things are not cheap.
• Limit Pricing


  The price is set low enough to discourage entry into the market by competitors.
• Predatory Pricing


  Prices are lowered by a company which can afford temporary losses. When the desired effect as been achieved the prices are increased again.
• Cost-based Pricing/ Cost-Plus Pricing

  The price is set with the following in mind: Total Cost (Fixed Cost + Variable cost) + Mark-up
• Place/Distribution


  Where and how the product reaches the market. The link between the producer and the consumer.
• Distribution Chain


  • Manufacturer
  • Wholesaler
  • Retailer
  • Consumer
• Methods of Retailing


  • Shops
  • Department stores
  • Mail order
  • Auction
  • Internet
  • Door to door sales persons
  • Vending machines
• Types/forms of transportation


  • List the three types/forms of transportation
• Promotion


  The act of attracting attention and interest to the product or service.
• Methods of promotion


  • Advertising
  • Sales Promotions
  • Public Relations
  • Personal Selling
• Advertising


  • Its function is to introduce new products and remind consumers of old ones, to increase demand for goods, and to create customer loyalty
  • Advantages are increased market share, increased profits to fund research and development, provides information to prospective buyers, promotes competition among firms
  • Disadvantages are it may be very costly and can increase production cost, billboards can spoil the natural landscape, some ads are not in the public interest
• Sales Promotions


  • Short term methods or incentives used along with ads to encourage purchases
  • Advantages are trial of products before purchase, reduced cost of products to customers
• Public Relations


  • Aim is to create goodwill or a pleasant image of the business and its products through the media
• Personal Selling


  • Advantages are consumers do not have to leave their homes, personal contact allows producers to gather valuable info on use of product, its quality, pricing etc.
• Types/forms of advertising


  • Informative Advertising
  • Persuasive Advertising
  • Competitive Advertising
  • Defensive Advertising
  • Reminder Advertising
• For a market situation to have occurred there must be: a transaction, a commodity/service provided, the commodity must have value, a buyer and a seller
• Merchandising


  A promotional tool used to present products in a way that will attract and draw customers to buy. It involves packaging, branding of goods, physical layout of goods, decorating the business or a particular section to attract attention, offering goods in different sizes for convenience, having transparent packaging to allow customers to closely look at products.
• Forms of Merchandising


  • Contests
  • Coupons
  • Multi-buys
  • Loss leaders
  • Trade fairs, exhibitions
  • Free samples
• Factors Influencing Consumer Behaviour: Price of product, Price of substitutes, Quality, Taste, Tradition, Income, Brand loyalty
• Market Structures


  Perfect Competition, Monopolistic Competition, Oligopoly, Monopoly
• Perfect Competition


  • There are numerous sellers, all products are identical, everyone has perfect knowledge of the market, there are many buyers, no one seller (or buyer) can influence the price, there are no barriers to entry or exit
• Monopolistic Competition


  • Several sellers, the product is similar but not identical, there are many buyers, no barriers to entry or exit, a lot of non-price competition
• Oligopoly


  • There are only a few firms which dominate the market, the product is basically the same or somewhat different, there is virtually no price competition, there may be some barriers to entry
• Monopoly


  • There is only one producer of the product, there are many buyers, the price is set by the supplier to maximise profits, there are barriers to entry, there is no substitute for the product, the firm can also fix the amount of the good/service to be supplied
• Supply


  The amount of any commodity which a producer is willing to supply at a given price
• Demand


  The amount of any commodity which a consumer is willing to purchase at a particular price at a given time period
• Cost Price


  The price at which the cost of production would be covered
• Monopoly market


  • One producer of the product
  • The firm and the industry are one and the same
  • Many buyers
  • Price is set by the supplier to maximise profits
  • Barriers to entry
  • No substitute for the product
  • Firm can fix the amount of the good/service to be supplied