Theme 1

• Marketing


  The management process responsible for identifying, anticipating and satisfying customer requirements profitably
• Niche marketing


  Where a business targets a smaller segment of a larger market , where the customers have specific needs and wants
• Mass marketing


  Where a business sells into the largest part of the market, where there are many similar products offered by competitors
• Benefits of niche marketing


  •It's less competitive

  •clear customer focus

  •Your customers are more loyal

  •businesses can often charge a higher price, therefore profit margins are higher
• Drawbacks of niche marketing


  - can attract competition

  - vulnerable to market changes
• Benefits of mass markets


  -Widest potential customer base

  -lower risk of resources

  -low unit costs from economic of scales

  -market research are relatively lower
• Drawbacks of mass markets


  - need a strong brand to be successful
• Market size


  1. Indicates the potential sales for a firm

  2. Usually measured in terms of both volume (units) and value (sales)

  3. Size of individual segments within the overall market can also be measured
• Formula for market share

  Market share % = company sales/total market sales x 100
• Market growth


  A key objective for many businesses is to grow their market share. A business will use the calculation to see if their market share will increase year on year.
• Purpose of market share


  - explains how the overall market is split between the existing competitors

  -tends to be calculated based on the market value but volume can also be used

  -good indicator of competitive advantage

  - look for significant +/- changes
• Dynamic market


  All markets are dynamic - they all change! But the pace and nature of change varies considerably by market
• Key sources of change in dynamic markets


  -customer tastes and preferences

  -technology = what and how customers buy

  - new market entrants
• Benefits of online retailing


  -save money on not paying rent and staff

  -easier to gather personal information,target products

  -online advertisements are cheaper than physical posters and leaflets

  -can reach more customers

  -access to website 24/7
• Size of markets


  Some markets remain stable over time and some may decline while some grow
• New Markets


  Some markets will completely disappear while new markets will be developed these can be international markets
• Growth


  Markets can grow through the process of innovation with new emerging products and services. Markets can change due to legislation
• Demographic changes


  Changes to the size and structure of the population (for example an increase in the number of people over the age of 65, or a rise in children of school age).
• Adapting to change


  - become more flexible

  -invest in new products and market research

  -continuing to improve to remain competitive
• Risk


  The possibility that things will go wrong
• How is risk managed?

  Through contingency planning
• uncertainty


  The unpredictable and uncontrollable events that affects business
• Brand name


  A name, term, sign, symbol, design or any other feature that allows consumers to identify the goods and services of a business and to differentiate them from those of competitors
• Product orientation


  An approach to business which places the emphasis on the production process and the product itself.
• Market orientation


  An approach to business which places the customers at the centre of the decision- making process
• Factors that affect how a products is made


  -amount of competition

  -strength of brand

  -the nature and size of the market

  -the nature of product
• What is primary research?


  Data collected first hand for a specific research purpose
• Examples of primary research


  -interviews

  -surveys/questionnaires

  -observation

  -postal survey

  -focus groups

  -experiments
• Observation


  Where Market researches watch the behaviour of customers, this approach may be used in retail outlets. However,there is no direct feedback using this method so all the questions may not be answered
• Benefits of primary research


  1. Focus to research objectives

  2.specific to that business and not publicly available

  3.gives more of a detailed insight into customer views
• Drawbacks of primary research


  1.time consuming

  2.expensive

  3.risk of survey bias

  4.any sampling may not be representative
• Secondary research


  Data that already exists and which has been collected for different purpose.
• Benefits of secondary research


  1.often free and easy to obtain

  2.good source of market insights

  3.quick to access and use
• Drawbacks of secondary research


  1.can quickly become out of date

  2.not tailored to business needs

  3.specialist reports are often quite expensive
• Sources of secondary research


  -google

  -government departments

  -trade associations

  -trade press and magazines

  -market research reports

  -competitor websites and marketing materials
• Quantitative data


  Concerned with data, statistically valid
• Qualitative data


  Based on opinions,attitudes,beliefs and intentions
• Benefits of Qualitative Research


  -essential for important new product development and launches

  -focused on understanding customer needs and expectations = very insightful

  -highlight issues

  -effective way of testing elements of the marketing mix
• Drawbacks of qualitative research


  1.Expensive to collect and analyse- requires specialist research skills

  2.Based around opinions -always a risk that sample is not representative
• Benefits of quantitative research

  Data is easy to analyse as a result you can prepare trends and comparison of other sources can be made