MARKETING: Processes

Question 1

Define marketing process

Answer 1

Marketing processes involves a step by step creation of a marketing plan.

Question 2

What are the 6 steps involved in marketing processes?

Answer 2

1. Situational analysis
2. Market research
3. Establishing marketing objectives
4. Identifying target markets
5. Developing marketing strategies
6. Implementation, monitoring and controling

Question 3

Outline what is meant by situational analysis? What does it involve?

Answer 3

Situational analysis assists with understanding the current position of the business and where it is heading. This involves identifying and analysing internal (strengths and weaknesses) factors and external factors (opportunities and threats).

Question 4

Outline the stages of the product life cycle

Answer 4

Introduction: new product has just been launched, the business aims to increase customer’s awareness

Growth: product recognition, sales are rising

Maturity: sales plateau, the product has achieved widespread adoption and most potential customers have already purchased it. As a result, sales growth slows down because there are fewer new customers to target.

Decline: sales begin to decline, the product might get discontinued

Question 5

What is the relationship between the stages of the product lifecycle and the 4P’s of the marketing mix?

Answer 5

INTRODUCTION:
- product: no brand loyalty
- price: usually lower than the competitors to attract more customers
- promotion: excessive to increase awareness
- place: selective distribution to gradually build up the presence

GROWTH:
- product: quality is maintained and improved
- price: price is maintained
- promotion: seeks a wider audience
- place: increase with popularity

MATURITY:
- product: tries to stand out from competitors, brand loyalty present
- price: may need to be reduced to undercut the market
- promotion: continuining convincing that the product is the best
- place: maximised

DECLINE:
- product: maintained with some improvements or sold to other business, discontinued
- price: reduced to sell the remaining stock
- promotion: discontinued
- place: reduced

Question 6

Define market research

Answer 6

Market research is the process of collecting, recording and analysing data regarding a specific marketing problem.

Question 7

What is the the three approach to obtaining accurate information about the needs and wants of a consumer?

Answer 7

Determining information needs: The problem is clearly and accurately stated to determine what needs to be measured and the issues involved. (Identifying consumer needs and wants)

Collecting data from primary and secondary sources: Plans must be made to gather missing data, as the researchers already know the facts needed. (This type of information may be collected by mail, telephone and personal surveys, as well as by personal observation or from private data sources.)

Analysing and interpreting data: Drawing conclusions (analysis and interpretation). This information can be displayed in table format to allow comparisons to be made between individual categories. The information is represented in the form of graphs and tables in order to deduce the meaning behind the information.

Question 8

Recall the case study of MARKET RESEARCH, marketing

Answer 8

IKEA found that surveying people is not an effective data collection strategy as many people do not respond authentically, rather in a way that they are “supposed to” answer.

As a result, IKEA decided to collect data through setting up cameras at people’s homes and filming them with their permission. This allowed IKEA to observed the natural human behaviour and interactions.

IKEA studied over 8000 people across eight cities to observe their morning routines and noted that process of picking an outfit in the morning is the most stressful. IKEA repsponded to such observation with an invention of a freestanding mirror called the Knapper that has a rack on the back to hang clothes and jewellery. This mirror is meant to help customers assemble an outfit the night before to reduce morning anxiety.

Question 9

Identify what is primary data

Answer 9

Facts and figures collected from original sources by the organisation firsthand

Question 10

Identify what is secondary data

Answer 10

Information that has already been gathered by a person or organisation.

Question 11

Describe the three types of primary data collection methods

Answer 11

The survey method: gathering data by asking people questions. This could involve face to face intervies, online survyes or questionnaires

The observation method: recording the behaviour of customers. This usually involves the statistics that is gathered from loyalty cards, checkout registers that record data on sales and purchase patterns

The experiment method: involves investigating how the change in one variable will affect customer behaviour in the controlled conditions. Think of the business that wants to test how the particular promotional strategy will affect the sales over a certain period of time.

Question 12

Describe the two types of the secondary data

Answer 12

Internal data: already collected info from internal sources from within the business. E.g customer feedback, sales and management reports, and research reports.

External data: published data from sources outside the business.
E.g data found on the internet, magazines, newsletters, Australian Bureau of Statistics (ABS)

Question 13

Define marketing objectives?

Answer 13

Marketing objectives are goals that are customer-oriented, realistic and measurable that are achieved through a marketing plan.

Question 14

Identify the marketing objectives

Answer 14

• Increasing market share
• Expanding the product mix
• Maximising customer service

Question 15

Explain the importance of achieving market share

Answer 15

Market share is the business’s total share of sales for a particular product compared to its competitors. Businesses develop an extensive product range, using many different brands, in order to gain an extra few percentage points of market share. Businesses aim to achieve a high market share because they will dominate in the market.

Question 16

Explain the importance of expanding the product mix

Answer 16

Product mix is the total range of products offered by a business. Businesses are keen to expand their product mix, as it allows for increasing profits in the long term. For instance, a flower shop may sell not just flowers but complimentary products such as aroma candles, teddy bears, party balloons to generate more sales for the business.

Question 17

What is meant by maximising customer service? Provide an example

Answer 17

Customer service involves responding to and solving customer needs, which leads to satisfaction, repeat sales, and brand loyalty. Key strategies include asking customers what they want, training employees, monitoring competitors, and focusing on customer needs over sales.

Question 18

What is a target market?

Answer 18

A group of present and potential customers to which a business intends to sell its products. The customers within a target market share similar characteristics such as age, income, lifestyle, location, and spending patterns.

Question 19

Distinguish between primary and secodary target market

Answer 19

Primary target market is the group of customers at which the most marketing resources are directed at. They generare the most sales for the business. Secondary is smaller and less important.

Question 20

What are the benefits of identifying target markets for a business?

Answer 20

Identifying target markets makes promotion more relevant to customers’ needs, helps better understand customers’ purchasing behavior, and uses marketing campaigns more effectively, saving time and money.

Question 21

What marketing approaches are used to identify and select the target market?

Answer 21

Mass marketing approach
Market segmentation approach
Niche marketing approach

Question 22

What is the market segmentation approach?

Answer 22

The market segmentation approach divides the total market into segments with common characteristics. Then the business selects one of the segments to become a target market.
E.g coffee shop that targets coffee lovers

Question 23

What is the mass marketing approach?

Answer 23

The mass marketing approach involves a large demand for a standard product. The seller mass produces and mass distributes a product that is uniform in quality, assuming that customers have similar needs.
E.g veggies and fruits

Question 24

What is the niche marketing approach?

Answer 24

The niche marketing approach focuses on a segment within a segment, catering to a very narrow customer base with specific characteristics and needs.
E.g an exclusive fashion boutique.

Question 25

What are marketing strategies?

Answer 25

Marketing strategies are actions undertaken to achieve a business’s MARKETING OBJECTIVES (there are 3) through the marketing mix.

Question 26

Describe what the marketing mix is.

Answer 26

The marketing mix consists of the 4Ps—Product, Price, Promotion, and Place that businesses determine to maximise the ability to achieve marketing objectives.

Question 27

Outline each of the 4Ps

Answer 27

Product: refers to the finished output but also encompasses features like packaging, advertising, quality, labels, brand name that influence the customer perception.

Price: what directly influences the sales of the business and customer demand. To choose an appropriate price the business must consider prices of competitiors, costs of production and level of demand.

Place: the method of distribution of the product to the customers. It is based on the type of the product the business has to offer. E.g gucci has selective distribution channels and only available in limited locations to reinforce the luxurious image

Promotion: the methods used to inform and persuade customers to purchase a product.

Question 28

Distinguish between the implementation, monitoring and controlling for marketing

Answer 28

Implementation is the process of putting the marketing strategies into action. Monitoring involves checking and observing the actual progress of the
marketing plan. Controlling is comparing the planned performance against the actual one to develop a corrective action plan if needed.

Question 29

Implementing involve…

Answer 29

Developing a financial forecast

Question 30

Monitoring involves…

Answer 30

Comparing actual and planned results

Question 31

Controlling involves…

Answer 31

Revising the marking strategy

Question 32

Explain the importance of developing a financial forecast for marking

Answer 32

Financial forecast is the business’s prediction about the future. It approximates sales potential and relevant costs in order to develop relevant marketing strategies. There are two steps involved including cost and revenue estimate. As the name suggests, the business estimates the approximate expenditure in a form of market research, product design and profit made. The importance is observed when the actual revenue is compared to forecast revenue data to deduce the effectiveness of a marketing strategy.

Question 33

Outline the 3 KPIs involved in comparing the actual vs planned performance?

Answer 33

3 KPIs are used to measured the success of the marketing plan:
- Sales analysis: involves comparing the actual sales made to the expected ones.
- Market share analysis: involves the analysis of the business’s market share compared to their competitors
- Marketing profitability analysis: analysis of the costs associated with each marketing strategy so see cost to benefit of each

—> all of the 3 KPIs are designed to test the effectiveness of the particular marketing strategy

Question 34

Explain the importance of revising marketing strategy

Answer 34

Once the actual performance of the business is compared to the planned one, a corrective action is designed to strengthen the business’s competitive position. This could involve making changes to the marketing mix to increase the effectiveness.
Product: needs to be continuously upgraded to maintain a competitive advantage
Price: need to be revised and modified according to the environment
Promotion: intense or limited will depend on the stage of the product life cycle
Place: distribution channels might increase due to expansion of the business
By applying the modificaiton to the marking mix, the business is able to stay PROACTIVE rather than reactive which will ensure the success of the business in achieveing marketing objectives.