Chapter 50- Marketing within a business environment Flashcards
Explain marketing objectives?
Marketing objectives are the specific goals a business sets to achieve through it’s marketing activities
They are essential as they guide a firm’s marketing strategy to help measure success
Examples of marketing objectives
- Increase sales and market share
- Target a new market segment
- Increase brand awareness and loyalty
In a business what is important to take into account?
- The situation within the market
- The needs of the consumer
- The action of competitors
What does setting objectives involve?
- Asking and answering a series of questions about the present and the future of the business
What are one of the main uses of setting objectives?
- To help employees identify the marketing strategy for the business
- This will help to explain necessary actions, set a budget and identify goals that are to be met
What 3 key aspects will the marketing plan look at?
- Where are we now?
- Where do we want to be?
- How will we get there?
Where are we now?
- Also called a marketing audit
- Business will have to look at internal and external factors that affect it
- Involves carrying out a SWOT analysis
- Strengths and weaknesses (internal factors)
- Opportunities and threats (external factors)
- There are economic, social, political and technological factors as well as the actions of competitors
- Businesses current product portfolio must be looked at
- Their product range must match consumer needs
Where do we want to be?
- Requires setting objectives for the future
- Might be setting a strategic objective for the whole business e.g. (growth) or setting marketing objectives e.g. (increasing market share)
How will we get there?
- To answer this a strategy for the future of the business needs to be developed
E.g. to become market leader, this means using the marketing mix to set a strategy to achieve this
Advantages of setting objectives
- Helps the business see what it wants to achieve
- Helps motivate employees
- Use their money where it will be most effective
- Business can measure performance against expectations
Disadvantages of setting objectives
- Can look at all aspects of marketing but the consumer
- Usually doesn’t consider all the departments of the business
- Usually include too many goals which are hard to achieve
- Market and economy are constantly changing so businesses need to adapt to these changes
Assessing success
- Once the marketing plan is in place the business must measure its success
- The business must see if they have met the goals set
- Checking it goals have been met should be continuous not just at the end of the campaign
- Measuring progress allows the business to make changes to the marketing mix or time if goal is not going to be achieved
Assessing success (sales)
- Easiest way to assess success of marketing plan
- Most commonly used
- Must look at the wider context of the market, is it rising or falling
-Is company name being recognised/ increased sales
Definition of market share
- Proportion or percentage of total sales within the market in question that is controlled by the business
Assessing success (number of enquiries/ hits)
- internet and mail order companies will look at how many visits to site are there after a campaign
Assessing success (satisfaction surveys)
- Sample a selection of customers to see how satisfied they are
To create a successful marketing strategy, what must the business know?
- It’s market
- Competition
- Consumers
What must the business do to create a successful marketing strategy?
- Must carry out a SWOT analysis
- Look at the budget that is available and the productive capacity
- Must involve other departments
- Strategy must be appropriate for the size of the business
What must be considered when forming a marketing strategy?
- Business objectives: e.g. increase market share- it will need to look clearly at the needs of the consumer and actions of competitors
- Size of the business: Small businesses have less money to compete with big rivals with more money in their marketing budgets
Nature of the market: Do the products change frequently, competitors threats, rapid changes in technology
Management changes: New managers are likely to take more risks
What was the main reason for the huge increase in the level of competition faced by businesses ?
- Globalisation of world trade
Competitive strategies
- Globalisation of trade has increased competition
- Important when developing a marketing strategy to take into account competitors
- Must know who the competitors are
- Doesn’t have to be in the same segment to you e.g. football clubs may have competition from rugby clubs
- Once competition has been identified, must look at all aspects of the way such a business is operating
E.g. - Who are it’s customers
- Strengths and weaknesses
- Objectives for future
- How well is it placed to succeed compared with us
- How does it market itself
Definition of globalisation
- The integration of the countries of the world through trade, ideas and culture
Market leader strategies
- Each market will have one dominant business that has control over the largest share of the market (Leader)
- They use a range of strategies to retain that position and improve it in the long run
- May use aggressive marketing when trying to improve their market share
E.g. Tesco: ensured that it has at least one retail outlet in every postcode area of the UK to give it as wide a market coverage as possible
Market-challenger strategies
- A business with a smaller market share may try attack the market leader
- To do this they must have a very large budget
-May use promotion to try and take market share - May attack an area where the leader is weak
Market follower strategies
- Market leaders will normally respond to ‘market challenger’ strategies with some form of retaliatory action
- If one drops the price the market leader will aggressively do this to win the price wars e.g. petrol (no win situation)
- Profit for all competitors is reduced
- Usually followers follow what the market leader does
Niche market strategies
- This means specialising in a specific area of a large market
- Market is small and customers have specific needs
E.g. Aston martin
Differentiation
- Companies will try to differentiate their product from that of their competitors to try to attract a business
E.g. EE offers access to event tickets
Low cost strategies
- Big businesses try to maintain their dominance in the market through their ability to buy in bulk from suppliers as low cost per unit
- This reduces their production costs
- Savings are passed onto the consumer in terms of lower prices
- Small businesses can’t match this
E.g. aldi/lidl use this strategy
Market growth policies
If the firm wants to use its objectives and a marketing strategy to achieve growth in it’s markets there are 4 options open to it
1. Market penetration
2. Product development
3. Market development
4. Diversification
- Involves using Ansoff’s matrix
- Market must be monitored constantly as they are constantly changing
- This means strategies must be changed to match the changing environment
What resources are needed to market a product/service?
- Marketing budget
- Marketing department
- Knowledge of the market (obtained through market research)
- Set of objectives to be achieved through marketing
What is one of the most important requirements when setting out a marketing strategy?
- The business should be realistic
(Particularly with the amount of money it spends)
Small firms- only be able to market through the use of local advertising
Large businesses- They can afford to run large marketing departments
Small firms have less pricing flexibility than larger businesses
What is SWOT analysis?
- It involves looking at strengths, weaknesses, opportunities and threats for a business
SWOT analysis
- This is an audit that’s carried out looking at the business both internally and externally
- It can help the business to look objectively at it’s competitive situation and to decide on the best strategy for the future
Uses of SWOT analysis
- Can be used as a forward looking tool
- The managers can consider how effective the business is in respect of the environment in which it operates and adjust their strategies and tactics as appropriate
- It will be a useful beginning to discussion and planning and will help the business to identify the best way to proceed for future successs
- It will need to be used in conjunction with other methods of forecasting and formulating strategies
