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IB Business Management > 4.1: The role of Marketing > Flashcards

4.1: The role of Marketing Flashcards

Learning objectives: - define marketing and the different concepts related to it - relationship of marketing and other departments - market vs product orientation - goods vs services in marketing - commercial marketing, social marketing, social media marketing

1
Q

What is generally the first question to ask in marketing?

A

‘What need are we trying to fulfill’

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2
Q

Define need

A

Things necessary to live
- basic human requirements

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3
Q

‘sense of felt deprivation’

A

lack of fulfilment of need

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4
Q

Maslow’s Hierarchy of Needs

A
  • first need is physiological need—what we seek first
    • 2nd level Safety needs - to make sure of belongings
    • 3rd level Love and Belonging - look for friendship, intimacy, connection, family
    • 4th level Esteem - respect, self-esteem, status, strength, freedom
      • e.g. to be called Atty Rimonte
    • 5th level Self actualization

All products that are developed will fulfill 1-4 needs (?)

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5
Q

What is the difference between a want and a need?

A
  • Wants are also needs
    • But tempered by other factors like culture, values, personality. etc.
    • Even though it’s a need, people buy based on what they want. Influences purchases/actions
      • e.g. People buy phones because of communication (3rd and 2nd Lvl) but ppl want other things like wide screens, Netflix, aesthetics, Brands etc.
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6
Q

What sways buyers

A

Wants

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7
Q

Why is product change inevitable in going to different markets?

A
  • each market would have their own needs and wants
    • The audience is different from the producer—have to cater to the audience
  • Look at product—change either the product or the market.
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8
Q

Demands

A
  • The** total amount of good and services that cosumers are willing and able to purchase at a given price in a given time period**
    -* A stronger want/need.*
  • The audience willing to pay for it.
    • i.e. you really have to have it or else
  • e.g. vaccines, face masks
  • The key to marketing — find the BIG DEMAND
    • Big demand → MORE SALES → MORE PROFIT
    • Many people wanting to find the product.
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9
Q

Demand analysis

A
  • Is there a big demand for a product?
  • Done first in marketing
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10
Q

Product

A
  • Anything that is offered to satisfy a want or need
  • Can be tangible or intangible
    • Tangible - good
      • Physical, can touch
    • Intangible - service
      • You can only see the effect of the product e.g. medecine (the feeling = the effect), hair parlor,
      • When the business do something for the customers
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11
Q

Utility

A
  • The value or benefit from the acquisition or use of a product
  • Products can have 1-2 utilities
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12
Q

5 types of utility

A
  • Place Utility
    • allows one to go somewhere
    • You don’t have to go very fair (e.g. ATMs in place of banks)
  • Form utility
    • Something that can be held and feel good (e.g. clothes, plushies)
  • Time utility
    • Doesn’t take long e.g. fast food (quick food)
  • Possession utility
    • Can use product without possessing
    • e.g. rentals
  • Information utility
    • e.g. computers
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13
Q

Value

A
  • usefulness, worth and importance of products — perception of worth
    • Used to compare the price — “like ohh this product is not that good quality compared to the price)
  • Price = how much a product is sold
    • ^ Valuable = ^ price
      • But there are some things that are different
  • Value is not just about the monetary value. It can be sentimental value also
    • Can even be aesthetic, there is quality
  • **Different perspectives **on value/worth of a product
    • depends on the buyers
  • Must make sure that the product is aligned with the value.
    • Must make sure to make the product value higher than the price
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14
Q

Satisfaction

A
  • level of fulfillment customers derive from the use of a product
    • quality - the flavor, the well-made, craftmanship, etc.
    • integrity - you feel more esteemed
    • customer focus -
    • respect - e.g. having a LV bag
    • innovation -
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15
Q

Exchange and transaction

A
  • Exchange - process of acquiring something by giving something
  • Transaction - when money is included, similar to exchange
    • uses currency/a legal tender.
    • buyer and seller
  • THE OBJECTIVE OF MARKETING - TO ELICIT THESE TWO PROCESSES/CHANGE
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16
Q

Market

A
  • The most important part in marketing — how to approach your product based on the need of the market.
  • a group of people with similar wants and needs
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17
Q

What is market segmentation?

A
  • can divide into segments as not all ppl in a market are the same
    • e.g. everyone wants food but they have diff preferences.
    • aka. segmentation
    • can focus on a particular segment
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18
Q

Procedures in marketing

A
  • First define a market
    • Define by gender or sex
    • Age
    • Economic class (e.g. A-B, C, D, E)
    • Educational attainment
    • geography
  • Then cater to the market — connect to the audience
    • e.g. masculine macho → man.
    • But how they cater can change when they change markets
      • E.g. Aston Martin Corp.
        • Popular by the first James Bond movie but when the 200s came in, there’s the female driver market. They shifted the move from purely male market to include women.
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19
Q

Market size must be viable

A
  • the physical no of buyers and sellers
  • ^ demand, ^ size, ^ growth
  • measured by:
    • Volume (amt produced)
    • Value (currency)
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20
Q

Market Share

A
  • The portion of the market being served by a product/service of a particular company
  • aka the control of a company over the market
  • e.g. Company A has 86% market share
  • Formula: (Company sales / total sales in the company) x 100
21
Q

Market leader

A
  • the company with the highest total sales/the biggest share.
    • Everyone wants to be her!
22
Q

Market challenger

A

the one w the 2nd most sales

23
Q

Market follower

A

the new kid on the block, a new company into an industry
- follows the market leaders rather than challenge them

24
Q

Market nicher

A
  • serves segments to small to be of interest to the general shares of the public
  • e.g. Tesla caters to the uber rich
25
Q

What is marketing?

A

getting the right product at the right price at the right place at the right time.

26
Q

Ps of marketing

A

All developed to hit your target market

  • Product
    • How to develop the product?
  • Price
    • Suitable for the market
      • e.g. Piece by piece sold in the Philippines
  • Place
    • Where to sell (e.g. groceries, online)
  • Promotion
    • Advertising
27
Q

The “hemming you in” strategy

A

Make it hard to move on to the next brand
- e.g. Apple makes it hard for its users to move to windows.

28
Q

Explain in your own words of “getting the right product to the right customers at the right price at the right time”

A
  • Right product - customers have a demand for it, - right customers targeting the right market and segment (e.g. Chanel is not for the middle class or smth), right price - the perceived value of a product must be higher than its price, also have to take into account the financial situation of the different markets. Right time - making sure that the product is in “season” such as ice cream being sold in summer rather than winter

Btw, the right prodyct and right customers thing go hand in hand

29
Q

Another way of defining marketing

A

identifying anticipating and satisfying consumer needs.

30
Q

Define market-oriented marketing

A
  • Look first at the consumer needs via marketing needs before producing and selling a product.
  • Market comes first.
31
Q

Product-oriented marketing

A
  • Starts with the product.
  • Develop the market to fit the product. / Get the market attracted to the product
  • Supply creates its own demand (Say’s law)
    • Tempt customers to buy products
32
Q

The advantages of market-orientation

A
  • Understand what your customers want
    • Increased confidence in the product
  • Bc of this, “safer approach”?
  • Can anticipate and respond any change in the market
    • Due to the research
    • e.g. studies in AI, anticipate the needs the market would have
      • E.g. AI dectectors, safety smart car regulations#
    • Able to have a competitive edge over the market
33
Q

The disadvantages of market-oriented marketing

A
  • Costly and lotsa time to do a market research
  • The consumers will change—needs and wants
  • Hard to lock down what the customer WANTS.
  • Future negative influence (e.g. covid)
  • BUT RESEARCH IS STILL important
34
Q

The advantages of product-oriented marketing

A
  • Production of high quality products
  • In high speed of change in industry is slows and firm has a good reputation
    • Brand association to being good “Wow this is from Starbucks this must be gud 👅”
  • Confident that in name alone would make the ppl buy ur product
35
Q

Disadvantages of product-orientation

A
  • More risky — no market research
    • Does the market need your product?
    • e.g. Starbucks, leading coffee brand, fall flat on their face in Australia.
  • Can be costly in the long run
36
Q

Which is better? Market or product orientation?

A

It depends. Nowadays, AI is actually product-oriented—made cool convenient for the market.

37
Q

Market share

A
  • measure of how well a particular company is able to serve its market
    • Who serves the market the most? — Market Leadership
  • Ppl compete to get the most market share.
  • Formula: (firm’s sales/total sales in the market) x 100
  • By volume: on the number of goods bought by customers → how many did they buy?
  • By value: amount spent by customers (money) can be expressed in money (e.g. USD)
38
Q

Market Growth

A
  • Increase in the number of people who buy or use your product
    • Is the Market growing or is it diminishing?
  • Market size represents the total sales by all businesses in a given market
    • Can be in value or in volume
    • How “big the market is”/can be indicative of demand (e.g. niche smaller markets → lesser sales
  • Market growth:
    • [(Market size in 2nd year - market size of first year) / market size of 1st year)] x 100
  • If in the negative, this means the market decline (??)
    • The market size in 1st year > in 2nd yr market size.
39
Q

Importance of Market Share and Market Leadership

A

Market share determines your competitive position in a market so you can plan your marketing accordingly.

40
Q

Benefits of being market leader

A
  • first mover advantage—if people recognize company’s quality.
    • Can go into any country market etc. and establish yourself because you have a big name.
      • But remember to
  • Enjoy increased sales
    • if its Oreo’s there it’s good.
  • Gain economies of scale
    • Economies of scale happens when a company becomes so specialized in product development to be able to produce their product at a lower price
      • e.g. Companies used to baking, the ppl dont make mistakes anymore and are efficient, lower costs in production.
  • If market leader is the brand leader then good promotion
    • No need to commercial, brand tells the story already
  • Ppl will always go to you to do partnerships and different proposal to outperform their competition
    • Popular kidddd
41
Q

when catering to a lower-class market

A

companies sell in quantity but not quality.

generally? acc to our business teacher as additional info

42
Q

The relationship of operations management and marketing

A

Sales forecasts are necessary in order to prepare production schedules.
* Research, launching and development new products to meet the changing customer
needs.
* Maybeconflict between the groups as production likes to test and develop, whereas
marketers hope to launch quickly to maximise sales revenue

43
Q

Finance and marketing

A
  • Budgets.
  • Using credit facilities to entice customers (e.g., Afterpay)
44
Q

Human resources
and marketing

A

Marketing helps HR to identify staffing needs such as recruitment, training, or firing
to fit with the markets needs

45
Q

The differences between marketing goods and services

A

Intangibility: you cannot touch a service like you can a product.
* Inseparability: Services are consumed at the time of purchase so you cannot separate
production and consumption of services.
* Heterogeneity: not all services will provide the same experience for each customer.
* Perishability: services cannot be stored.
* Product strategy: services tend to need added value to be competitive (e.g., free wi-fi).
* Price strategy: services’ prices tend to be based on effort levels or time.
* Promotional strategy: Services cannot be displayed like products can be, so you need
to help the customer envision it.
* Place strategy: location needs to be important for services especially because it entices
customers

46
Q

Characteristics of a market

A

Market Size: niche vs. mass, local vs. international.
* Customer base.
* Barriers to entry: obstacles that determine the number of suppliers in the market.
* Competition: degree of rivalry within the business (market saturation).
* Geographic characteristics.
* Demographic characteristics.
* Market growth rate.
* Seasonal and cyclical characteristics

47
Q

Marketing objectives for for-profit organisations

A

Increased sales revenue.
* Higher market share.
* Increased market leadership.
* Improved product and brand awareness.
* Developing new products.
* Enhanced brand perception

48
Q

Marketing objectives for not-for-profit organisations

A
  • Tobuild membership and to connect with new donors.
  • Togenerate awareness of the NPO’s cause.
  • Toimprove brand recognition.
  • Tocreate positive attention towards the NPO’s operations.
  • Todemonstrate the value of the NPO to the local community or society in general.
49
Q

First mover advantage

A

competitive edge gained by the initial occupant of a market segment
- establish a strong brand recognition, customer loyalty and early access to resources before competitors arrive.
-* shape market trend *and define the competitive landscape

IB Business Management (18 decks)

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