Decision Making to Improve Marketing Performance Flashcards
What is marketing?
The process of identifying, anticipating and satisfying customer needs profitably.
What does the marketing function in a business do?
- Determines what the market wants
- Develops the strategy to achieve the marketing and business objectives
- Delivers the marketing actions to achieve the objectives
What are the 2 marketing orientations?
- Production orientation
- Marketing orientation
What is production orientation?
Business develops products based on what it is good at
What is marketing orientation?
Business responds to customers needs and wants - designs products accordingly
Why do businesses segment the market?
- Better matching of customer needs
- Customer needs differ
- Enhanced profits for the business
- Customers have different disposable incomes and vary in how sensitive they are to price
- Better opportunties for growth
- Can increase sales
- Retain more customers
- By marketing products that appeal to customers at different stages of the product lifecyle, a business can retain customers who may have gone to competition
- Target marketing communications
- Businesses need to deliver their marketing message to a relevant customer audience. By segmenting markets, the target customer can be reached more often and at lower
- Gain market share of the segment
- Through careful segmentation and targeting, businesses can often achieve competitive production and marketing costs and become the preferred choice of customers and distributors
What are the 4 main basis’ of market segmentation?
- Demographic
- Geographic
- Behavioural
- Psychographic
What is niche marketing?
Where a business targets a smaller segment of a larger market, where customers have specific needs and wants
What is mass marketing?
Where a business sells into the largest part of the market, where there are many similar products on offer
What are the advantages of niche marketing?
- Less competition
- Clear focus - target particular customers
- Builds up specialist skills and knowledge
- Can often charge a higher price
- Profit margins are often higher
- Customers tend to be more loyal
What are the disadvanatges of niche marketing?
- Lack of economies of scale
- Risk of over dependence on a single product or market
- Likely to attract competition if successful
- Vulnerable to market changes
What are the key features of mass marketing?
- Customers form the majority of the market
- Customer needs and wants are more general and less specific
- Associated with higher production output and capacity
- Success usually associated with loss-cost operation or market leading brands
Describe a B2B market
- Based on relationships with business buyers
- Often small & focused market
- More complex and longer buying process
- More sophisticated buyers
- Aims to turn prospects into buying customers
- Educational element to promotion
Describe a B2C market
- Products more important than relationships
- Usually larger markets
- Single step buying process; often short e.g. impulse purchase
- Less sophisticated buyers
- Emotional considerations affect buying behaviour
- Brands very important
What is competitvness?
The ability of a business to deliver better value than its competitors
