Module 3. Industry And Markets Flashcards
Definition of marketing (by The Chartered Institute of Marketing)
The management process responsible for identifying, anticipating and satisfying customer requirements profitably
What are the factors in the marketing mix? (The 7 Ps)
Product (or service) - the item consumers demand
Price - how much a consumer is prepared to pay for a product / service
Place - consumers access to a product / service (how our customers get it from us)
Promotion - marketing communication (making people aware of the product)
Physical evidence - the physical location of where the customer received the good / service
People - the people who interact with the customers
Process - refers to the end-to-end process that customers go through from first contact to sales, delivery, customer support and after-sales service
Order of the Life Cycle
Start up
Growth
Shakeout
Maturity
Decline
What is the start up stage of the Life Cycle
Where the industry is new
It’s products and services will be innovative
High unit costs
High overhead costs
Low sales volume, confined to few marker segments
Few businesses - low competition
Low price sensitivity among customers, with more focus on uniqueness as a basis for competition
High prices
Low profit (or making losses)
Characteristics of the growth stage in The Life Cycle:
Decreasing costs due to economies of scale
Significant increases in sales volume due to products gaining in popularity
Increasing levels of competition
Competition often still based around differentiation with leading brands emerging
Falling prices
Growing profit
What happens in the shakeout stage
This is where established market leaders cement their position and other businesses with weaker branding etc lose out
Characteristics of the Maturity Stage:
Costs low due to economies of scale and relatively low development costs
Maximum sales volume and so product variation or discounts / rebates may be required to encourage sales
Customers primary focus is cost and so cost-cutting measures are sought
High profits for market leaders with dominant brands
Continuing consolidation through mergers and acquisitions
Characteristics of the Decline stage:
Decreasing costs (e.g., less advertising costs)
Decreasing sales volume
Market saturation
Intense pressure on prices due to market saturation and perception of product / service as inferior
Falling profits
Continuing market exit due to falling profits
7 P’s of the marketing mix
Product
Price
Place
Promotion
Physical evidence
People
Process
Barriers to entry? (For businesses)
Capital
Differentiation
Advertising
Switching costs
Distribution channels
Supply channels
Intellectual property
Taxes
Laws and regulations
Retaliation
Compliance with laws and regulations can be a challenging barrier.
What are the costs related to this barrier?
Administrative costs
Legal and professional fees
Fines and penalties (due to non-compliance)
Potential loss of business licenses (due to non-compliance)
What are some of the key legal considerations for a small start-up business?
Employment
Company formation
Taxes
Trading laws (trading standards)
Advertising laws
With market segmentation
Start up businesses will often target:
A narrower range of segments, reflecting their limited resource
Segments under-served by existing market participants
Bases of segmentation:
When segmenting consumers how can we put them into different groups?
Demographic
Socio-economic
Geographic
Personality and lifestyle
Circumstances of purchase
Customer priorities
Purchasing style
Launch costs that may arise for a small business:
Equipment
Property
Raw materials
Company formation
Employment
Promotions
