Business Unit 3

• marketing objectives 


  the process of identifying, anticipating, and satisfying customer needs profitably
• ensuring the objectives are relevant and acheivable, there are some benefits:

  • Ensures functional activities = consistent with all corporate objectives
  • provide a focus for marketing and decision making efforts
• types of marketing objectives :

  sales volume

  sales value [revenue]

  market growth [%]

  market share [%]

  brand loyalty/awareness
• External influences on marketing objectives and decisions

  • Economic environment
  • Competitor actions
  • Market dynamics
  • Technological change
  • Social and political change
• Economic environment


  Key factor in determining demand
• Recession


  Many marketing objectives have been thwarted as a result
• Competitor actions


  Marketing objectives have to take account of possible competitor response
• Market dynamics


  Market size, growth, & segmentation
• Technological change


  Consumer and other markets affected by rapid changes in technology, shortening product lifecycles and opportunities that have been created for innovation
• Social and political change

  Changes to legislation may create or prevent marketing opportunities. Change in the structure and attitudes of society also have major implications for many markets
• Internal influences on marketing objectives and decisions

  • Corporate objectives
  • Finance
  • HR
  • Operational issues
  • Business culture
• Corporate objectives


  Most important internal influence on marketing objectives, marketing objectives should not conflict with corporate objectives
• Finance


  The financial position of the business (e.g. profitability, cash flow, liquidity) directly affects the scope and scale of marketing activities
• HR


  For a services business in particular, the quality and capacity of the workforce is a key factor in affecting marketing objectives - a motivated and well trained workforce can deliver market leading customer service and productivity to create a competitive marketing advantage
• Operational issues


  Operations has a key role to play in enabling the business to compete on cost and quality. Effective capacity management also plays a part in determining whether a business can achieve its revenue objective
• Business culture


  A marketing orientated business is constantly looking for ways to meet customer needs, whereas a production orientated culture may result in management setting unrealistic or irrelevant marketing objectives
• Market Research


  the systematic and objective collation, analysis, and evaluation of info that is intended to assist in the marketing process
• market mapping


  a framework for analysing market positioning is a 'market map'. A market map illustrates the range of positions that a product can take in a market based on two dimensions that are important to customers
• advantages of positioning maps

  • helps spot gaps in the market
  • useful for analysing competitors - where are their products positioned?
  • Encourages use of market research
• disadvantages of positioning maps

  • a gap in the market doesnt necessarily mean there's demand for that product
  • success not guaranteed
  • is the market research reliable?
• sample = gathering data from respondents whose views or behaviours are respresentative of the target market as a whole


  random: memeber of target population has an equal chance of being choisen

  Statified: based on obtaining a sample that reflects the types of consumers from whom the business wished to gain info [e.g. age/gender]
• advantages of sampling

  • provides good indication
  • help avoid expensive errors
  • can be used flexibly
  • reliable info
  • helps firms learn abt the market quickly
• disadvantages of sampling

  • may be unrepresentative
  • bias
  • difficult to locate suitable correspondants
  • may not have an accurate profile of customers
  • can be out of date due to time taken to collate
• confidence intervals

  • they measure the probability that a population parameter will fall between two set values. The confidence interval can take any number of probabilities - most common = 95% or 99% 


  plus or minus numbers are used to show the accuracy of statistical results arising from sampling data.

  used to assess the reliiability of sampled data when forecasting figures [e.g. sales levels]
• factors influencing confidence levels:

  * sampling size - the larger the sample the better the reflection of opinion of the whole population, so confidence levels fall

  * population size - the target market for the product has minor effect on confidence intervals

  *% of sampling choosing a particular answer - if high or low % of sample expresses the same opinion, then confidence intervals are likely to be low
• extrapolation = educated guess/hypothesis


  when you make an extrapolation, you take facts and observations about a present/known situation and use them to make a prediction about what might eventually happen
• disadvantages of extrapolation


  * less reliable if fluctuations occur [e.g. weather is unpredictable]

  * assumes past chawill continue

  * ignores qualitative factors [e.g.. changes in tastes and fashion]

  * ignores the product life cycle
• correlations = method of sales forecasting that looks at the strength of a relationship between two variables


  +tive: two variables are connected in some way, as x increases y increases

  -tive: two variables are related, but as x increases, y decreases
• BIG DATA: the process of collecting and analysing large data sets from traditional and digital sources to identify trends and patterns that can be used in decision-making


  [large data sets are both structures (e.g. sales transactions from an online store) and unstructured (e.g. posts on social media)
• How big data is generated

  • retail e-commerce databases
  • user-interactions with websites and mobile apps
  • usage of logistics, transportation systems, financial and health care
  • social media data
  • location data (e.g. GPS generated)
  • new forms of scientific data (e.g. human genome analysis)
• Analytics and customer insights


  • Helps businesses track how users/customers use online products and services
• Dynamic pricing


  Tech behind dynamic pricing enables business to adopt a pricing strategy where prices are set flexibly for products or services based on current market demands
• Audience reach and segmentation


  • Widespread use of social media marketing is an example of how tech is enabling businesses to more effectively reach their target audience and communicate with them
• Customer relations management (CRM)


  Tech used to manage interactions with customers/potential customers. CRM system helps build customer relationships and streamline processes so they can increase sales, improve customer service & increase profitability
• PRICE ELASTICITY OF DEMAND: Measures the responsiveness of quantity demanded for a product to change in price


  % CHANGE IN QUANTITY DEMANDED / % CHANGE IN PRICE
• PED is used to predict...

  _ the effect of change in price in total revenue

  _ can be used as a part of a policy of price discrimination ['yield management'] - this is where a business decided to charge different prices for the same product to different segments of the market [e.g. peak and off peak rail travel]

  _ the effect of a change in an indirect tax [e.g. VAT, fuel] on price and quantity demanded and also whether a business is able to pass on some or all the tax onto the consumer
• if PED = 0 demand is perfectly inelastic - demand doesn't change at all when the price changes
• if PED is between 0 and 1 [the % change is demand is smaller than % in price] demand is inelastic
• if PED = 1 [% change in demand = % change in price] demand is unit elastic.

  A 15% rise in price would lead to a 15% contraction in demand leaving total spending by the same at each price level
• if PED > 1 then demand responds more than proportionately to a change in price i.e. demand is elastic. for example a 20% increase in the price of a good might lead to a 30% drop in demand. the ped for this price change is -1