role of marketing Flashcards
Marketing
A set of interrelated activities to plan, price, promote and distribute products to both current and potential customers
Outcomes of marketing
- Satisfies needs and wants of customers
- Benefits businesses
Features of marketing
- Involves a wide range of activities
- Wide range of goods and services
- Transaction should benefit the customer and the business
- Not limited to business
Aims of marketing
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.
Purposes of marketing (for businesses)
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
The Marketing concept
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
The Marketing concept
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
The Marketing concept
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
Interdependence of marketing: operations
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
Interdependence of marketing: finance
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
Interdependence of marketing: human resources
Human resources supplies the marketing function with skilled and qualified employees
This will ensure the creation of desirable goods, services and experiences
The marketing plan
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.
Characteristics of the marketing plan
- The marketing plan must be:
- Realistic when considering the situational analysis.
- Achievable in terms of the business’s resources.
Key steps in developing a marketing plan
- The key steps in developing a marketing plan are:
- Situational Analysis
- Market Research
- Establishing Market Objectives
- Identifying Target Markets
- Developing Marketing Strategies
- Implementation, Monitoring and Controlling
How is profit maximisation achieved
- 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.
Marketing approaches
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)
Marketing approaches: production (1820’s)
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
Marketing approaches: selling (1920’s)
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
Marketing approaches: marketing (1960’s)
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
Changes in marketing approaches
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
Changes in marketing approach: corporate social responsibility
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
Changes in marketing approach: customer orientation
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
Changes in marketing approach: relationship marketing
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
Market
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)
Types of markets
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)
Types of market: resource
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
Types of markets: industrial
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
Types of markets: Intermediate
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
Types of market: consumer
The consumer market involves those who buy products to use or consume
Within this market, business can target either a mass or niche audience
Types of market: consumer (mass)
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
Types of market: consumer (niche)
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
