role of marketing

Question 1

Marketing

Answer 1

A set of interrelated activities to plan, price, promote and distribute products to both current and potential customers

Question 2

Outcomes of marketing

Answer 2

• Satisfies needs and wants of customers
• Benefits businesses

Question 3

Features of marketing

Answer 3

• Involves a wide range of activities
• Wide range of goods and services
• Transaction should benefit the customer and the business
• Not limited to business

Question 4

Aims of marketing

Answer 4

Purpose of marketing will depend on whether a business exists to generate profit or operate as a non-profit organisation

For profit generating business:

The goal is to generate sales by satisfying the needs and wants of customers to achieve profit maximisation

For non-profit organisation:

The goal is to inform not to sell. Objectives are social, rather than financial, such as increasing awareness and raising money.

Question 5

Purposes of marketing (for businesses)

Answer 5

Each purpose contributes to the overall goal of profit maximisation

Achieve competitive advantage:

• What sets a business apart and provides it with an edge
• Can be achieved through marketing activities (such as lower prices)

Increasing market share:

• The business’ share of total industry sales for a product
• Marketing tactics (such as maintaining strong customer relationships) can be used to increase market share

Improving brand awareness:

• How familiar customers are with a company’s brand or how well they can recognise a brand
• Consumer knowledge can be improved through marketing

Question 6

The Marketing concept

Answer 6

Many businesses see marketing as a philosophy that requires business to prioritise customer satisfaction

The ‘Marketing concept’ emphasises that all plans, policies and operations should be aimed towards satisfying customers’ needs and wants

All employees must embrace this concept to run a successful business

Question 7

The Marketing concept

Answer 7

Many businesses see marketing as a philosophy that requires business to prioritise customer satisfaction

The ‘Marketing concept’ emphasises that all plans, policies and operations should be aimed towards satisfying customers’ needs and wants

All employees must embrace this concept to run a successful business

Question 8

The Marketing concept

Answer 8

Many businesses see marketing as a philosophy that requires business to prioritise customer satisfaction

The ‘Marketing concept’ emphasises that all plans, policies and operations should be aimed towards satisfying customers’ needs and wants

All employees must embrace this concept to run a successful business

Question 9

Interdependence of marketing: operations

Answer 9

Marketing involves the design of products and their sale, while operations is responsible for their production

It is important that operations and marketing communicate to ensure standards and customer satisfaction, eg. if a product is intended to be sold at a certain date, operations must make them possible

Question 10

Interdependence of marketing: finance

Answer 10

Finance provides funds for marketing activities

Financial budgets are crucial in determining marketing strategies

Profitability: Marketing helps achieve profitability by selecting:

• most profitable pricing strategies
• promotional strategies

Question 11

Interdependence of marketing: human resources

Answer 11

Human resources supplies the marketing function with skilled and qualified employees

This will ensure the creation of desirable goods, services and experiences

Question 12

The marketing plan

Answer 12

The marketing plan is a document that lists the activities aimed at achieving specific marketing objectives

• It plays a key role in overall business success, providing a sense of purpose and direction to marketing activities.
• It should be integrated with operations, finance and human resources.

Question 13

Characteristics of the marketing plan

Answer 13

• The marketing plan must be:
  
  • Realistic when considering the situational analysis.
  • Achievable in terms of the business’s resources.

Question 14

Key steps in developing a marketing plan

Answer 14

• The key steps in developing a marketing plan are:
  
  1. Situational Analysis
  2. Market Research
  3. Establishing Market Objectives
  4. Identifying Target Markets
  5. Developing Marketing Strategies
  6. Implementation, Monitoring and Controlling

Question 15

How is profit maximisation achieved

Answer 15

• To achieve profit maximisation, short-term and long-term planning are key.
  
  • In the short-term, this means bringing together buyers and sellers and placing customer satisfaction at the heart of the marketing plan.
  • To create long-term profit maximisation, the plan should also be based on extensive research and design.

Question 16

Marketing approaches

Answer 16

These refer to the different ways that businesses have looked at marketing as a path to achieving their overall goals

There are three marketing approaches:

• Production (during 1820’s, maximising production)
• Selling (during 1920’s, selling as much as possible to beat competitors)
• Marketing (during 1960’s, marketing emphasises needs and wants of consumers)

Question 17

Marketing approaches: production (1820’s)

Answer 17

Manufacturing enough goods and services to meet demand. Emerged during the industrial revolution.

Marketing involved taking orders and delivering the product

Marketing was simply an extension to production

Businesses aimed their efforts at producing products quickly and cheaply

Question 18

Marketing approaches: selling (1920’s)

Answer 18

As production became more efficient, supply began to exceed demand. Adopted after WWI.

Marketing involved using televisions and radio to advertise and hiring convincing sales staff

Businesses became sales oriented, emphasising sales targets and high pressure tactics

Question 19

Marketing approaches: marketing (1960’s)

Answer 19

Satisfying customer preferences by ensuring all business functions places customers at heart of their decisions. Emerged economic boom after WWII.

The ‘Marketing Concept’ is:

• Customer oriented
• Designed to satisfy customers
• Supported by integrated marketing strategies
• Integrated into the business plan

Question 20

Changes in marketing approaches

Answer 20

Certain economic and social factors have motivated change in the ways business operates

Includes:

• Corporate social responsibility
• Customer orientation
• Relationship marketing

Customer satisfaction is top priority for high profitability

Question 21

Changes in marketing approach: corporate social responsibility

Answer 21

There is growing public concern about the environment and social issues

This had to a shift in marketing plans that focus on social topics

This includes:

• Sustainability
• Fair trade

Question 22

Changes in marketing approach: customer orientation

Answer 22

Modern business strive for customer satisfaction

Now: Businesses are making marketing decisions based on adapting to changing needs

This requires:

• Constantly collecting information about customers

Question 23

Changes in marketing approach: relationship marketing

Answer 23

Relationship marketing places a high priority on customer retention

More expensive to find new customers than keep existing ones

Businesses work to achieve ongoing satisfaction

This is achieved through:

• rewards programs
• after sales support

Question 24

Market

Answer 24

A market is a group of individuals or organisations who need or want a product, are willing and able to buy it, and are permitted by law and other regulations to acquire it

There are two parties

• Consumer (who will be buying the product)
• Producer/seller (not part of the market, but is important in defining the type of market)

Question 25

Types of markets

Answer 25

Depending on the business’ intended market, marketing strategies will vary. It is crucial for marketing managers to understand the features of each market.

• Producer markets:
• Resource
• Industrial

Intermediaries:

• Intermediate

Consumer:

• Consumer (mass and niche)

Question 26

Types of market: resource

Answer 26

The resource market involves the individuals and groups engaged in the supply and purchase of raw materials from the primary industry

Producers of these materials aim to provide customers with products of high quality at lows prices

Marketing for these products is usually undertaken by the industry as a whole to the end user

Question 27

Types of markets: industrial

Answer 27

The industrial market involves businesses that purchase materials to produce their own goods and services or for use in their daily operations

Quality and reliability of suppliers ensures a large and ongoing supply of inputs

It is within the secondary and tertiary industry

Question 28

Types of markets: Intermediate

Answer 28

The intermediate market involves businesses who buy finished products from producers and sell them to consumers

These businesses are known as intermediaries eg. retailers and wholesalers

Benefit: allows producers to focus on manufacturing products, while intermediaries market the product

Question 29

Types of market: consumer

Answer 29

The consumer market involves those who buy products to use or consume

Within this market, business can target either a mass or niche audience

Question 30

Types of market: consumer (mass)

Answer 30

The mass market deals with standard products with a large demand

As most competing products in the mass market are essentially the same, customers make decisions based on price

Low cost requires high levels of automations in operations while large sales volume require convincing promotional campaigns

Question 31

Types of market: consumer (niche)

Answer 31

The niche market involves lower-volume, higher quality products for customers who have unique needs or lifestyle

Due to less consumers, businesses will need to charge high prices to be profitable, and their products need to match customer needs closely and be of high quality

Less customers → high price → high quality