5.2 - Marketing

Question 1

Marketing

Answer 1

It is the process of finding who your customers are and then you will target them so that you can increase your sales and net profit. To market efficiently you need to know:
- Where do they live?
- What do they want?
- What is their age?
- What is their income?
- What is their address?

Once you have detailed information about your clients you can establish the best way to direct your advertising to them.

Question 2

Customer Base
- Benefits / Costs

Answer 2

This is the information on existing customers and what they buy. I can contact them directly and know what to offer them.

Benefits
- Increases my sales so the business can give higher return back to its owners.
- You direct advertising to known customers that can reduce costs and increase the return to the owners.
- If you increase sales at the expense of your competitors, it will reduce the chance of your business being taken over.

Costs
- It will take time that the business will lose the opportunity of using elsewhere in the business.
- It will cost to collect the data which will reduce the return to the business owners.

Question 3

Objectives
Strategies

Answer 3

An objective is what the business wants to achieve (aim)

A strategy is an action that is undertaken to achieve an objective.

Question 4

Review Process

Answer 4

1. Determine your Objective: In the case of marketing it could be to increase sales
2. Strategy: This is the action taken to increase sales which could be to increase advertising to have a sale.
3. Evaluate Performance: Has the increased advertising or sale led to an increase in sales or not? What could be the cause?
4. Corrective Action: Determine corrective action and you apply it so there is a greater chance that the original objective will be met.

Question 5

KPI

Answer 5

KPI’s are a measurable figure that the business can compare its actual performance against to evaluate performance.

1. Sales Amount
   This is the monetary amount of sales, this could be compared to past performance or a target set by the business.
2. Numbered Customer Complaints
   This is important as it tells me if the customers like my product or service.
3. Net Profit
   This is the amount that is returned to the owners once costs and expenses have been deducted from sales revenue. The aim would be to increase the return to the owners.
4. Percentage of Market Share
   The aim is for the business to gain greater control of its market compared to its competitors.