Marketing and Operations

• Product-orientated


  A business which chooses to concentrate on the product itself rather than trying to establish what the consumer wants
• Customer-oriented


  A business which identifies what the consumer wants (through carrying out extensive market research) and tries to provide it
• GlaxoSmithKline (Pharmaceutical company)


  • Product-orientated
• Maybelline (Make-up manufacturer)


  • Customer-oriented
• Primark (Clothing manufacturer)


  • Customer-oriented
• Apple (Technology company)


  • Product-orientated
• McDonalds (Fast food)


  • Customer-oriented
• Ferrari (Prestige cars)


  • Product-orientated
• Product-oriented


  Organisation focuses on developing and improving products rather than responding to customer needs
• Customer-oriented


  Organisation focuses on understanding and meeting customer needs
• Customer-oriented organisations


  • Apple (Technology company)
  • McDonalds (Fast food)
• Nabaztag


  Wifi plastic rabbit which connects to broadband to read messages, provide news/weather, move ears, light up tummy
• A decision has to be made as to whether the Nabaztag is a toy or a gadget
• Novel computer gadgets are likely to command a relatively high price. There is as yet no market competition so high prices can be charged
• If consumers use all the functions then the Nabaztag is likely to appeal to computer users
• Retailers such as PC World and John Lewis would be appropriate places to sell the Nabaztag
• Online selling would be appropriate (perhaps direct from manufacturer to consumer) for the Nabaztag
• Consumer behaviour


  The study of individuals, groups, or organizations and the processes they use to select, secure and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society
• Types of buying behaviour

  • Habitual (routine) purchases
  • Limited decision making purchases
  • Extensive decision making purchases
  • Impulse purchases
• Habitual (routine) purchases


  Require little involvement by the buyer, are bought frequently and generally fulfil a basic want
• Limited decision making purchases


  Require some consideration by the buyer, are still relatively regular purchases, but require greater participation in the buying process
• Extensive decision making purchases


  Usually expensive, one-off long term purchases, which will involve detailed consideration by the buyer
• Impulse purchases


  Items bought without prior thought
• Core product


  Satisfies the basic needs of the consumer
• Augmented product


  Additional features added to make the product more competitive and attractive
• Shampoo


  • Tesco Everyday Value shampoo
  • Designer brand shampoos with additional benefits
• Today's customer looks for more in a product than the basic function it fulfils
• Product life cycle stages

  • Development
  • Introduction
  • Growth
  • Maturity
  • Decline
• Development stage


  Product is researched, designed and a prototype will be made
• A large percentage of products will never progress beyond the development stage
• Consumers don't know about products that are at the development stage - it's impossible to buy something you don't know exists
• Introduction stage


  The launch stage of a new product
• Introduction stage


  • Initially low sales as few consumers know about the product
  • Some products will have little or no competition so high prices can be charged
• Introduction stage


  • Zero profit due to high advertising costs and development costs that need to be recouped
• Growth stage


  Consumers are becoming more aware of the product and competitors may start to enter the market
• Growth stage


  • Sales begin to increase due to increased consumer awareness
  • Low profit as outstanding development costs will be reducing but there will still be high advertising costs
• The length of the product life cycle depends on the product itself - it can last from weeks to many years
• At Higher level, it is necessary to be aware of additional stages in the life of a product and how the life of a product can be extended, sometimes indefinitely
• Product development


  1. Product is researched

  2. Product is designed

  3. Prototype is made

  4. Large percentage of products never progress beyond this stage
• Consumers don't know about products at the development stage - it's impossible to buy something you don't know exists