10. Marketing, competition and the customer

• • Marketing: Identifying and satisfying customer needs and satisfying them profitably.
• • Customer: a person, business or other organisation which buys goods or services from a business.
• • The different marketing department sections:
  • Sales Team: responsible for the sales of products.
  • Market Research: responsible for discovering customers’ needs, market changes, and the impact of competitors’ actions. This report will be used in decision-making, research, developing new products, price levels, etc.
  • Promotion Section: deals with organizing the advertising for products. Arrange for advertisements and have a market budget.
  • Distribution: transports the products to the market.
• • The Role of Marketing:
  • Identify customer needs.
  • Satisfy Customer Needs
  • Maintaining customer loyalty
  • Customer Loyalty
  • Building customer relationships to gain information about customers
  • Customer Relationships: communicating with customers to encourage them to become loyal to the business
  • Anticipate changes in customer needs –
  • Identify new trends in customer demands
• • When the marketing department succeeds in identifying customer requirements and future needs, it will enable the business to:
  • Raise customer awareness
  • Increase in revenue and profitability
  • Increase or maintain market share
  • Maintain or improve the image
  • Target a new market or market segment
  • Enter a new market at home or abroad.
  • Develop new products or improve existing products.
• • Markets change because consumer spending patterns change; this might be due to the following:
  • Trends and Fashions Change
  • Advancement in Technology
  • Unemployment/Wages: high unemployment rates/low wages will decrease sales of expensive products
  • Ageing Population: different ages are interested in other products
• • Businesses must keep up with customers' changing needs to stay relevant and maintain customer loyalty.
• Some markets have become more competitive because:

  • Globalisation: products are sold all over the world
  • Transportation: it is cheaper, quicker, and easier to send products around the world now
  • Internet/e-commerce: customers can now search for products or services and buy from somewhere else around the world
• • The ways businesses respond to changing spending patterns and increased competition:
  • Keep improving its existing products
  • Bring out new products to keep customer’s interest
  • Keep costs low
  • maintain good customer relationships
• Mass Market: where there is a vast number of sales of a product type.

  • Pros:
  • Total sales are very high
  • There are many variations of products, so the risk is spread.
  • Opportunities for growth
  • Cons:
  • Abundant competition
  • High costs of advertisement and promotionmay not meet the specific needs of all customers
• • Niche Market: a small, specialized segment (part) of a mass market.
  • Pros:
  • Avoid competition with big businesses
  • specific needs are focused
  • Cons:
  • Small – limited sale
  • they specialize in just one product; if the product has low demand, it will fail.
• • Market Segmentation: an identifiable subgroup of a whole market where consumers have similar characteristics or preferences.
• • A market can be segmented by:
  • Age
  • Socio-Economic people according to how much money they make
  • Region/Location – where people live (ex, people who live in wet areas will buy more waterproof clothing than those who live in dry areas)
  • Gender – men's and women's products differ
  • Lifestyle – ex: how many children a person has, religion, habits, etc.
  • Use of the product - products may be used for different uses (ex, cars for business use and domestic use, each the same product but can be marketed differently)
• • Benefits of Market Segmentation:
  • You can use it to sell more products, creating different variations for different groups.
  • as the characteristics of consumers are known, resulting in an increase in sales.
• which method of segmentation should be used?

  • Detailed analysis of the market and the ‘size’ of each potential segment in terms of consumers and likely sales.
  • company image and brand
  • cost of entering each segment