The Nature of Marketing Flashcards
Marketing
Is the manage meant task of identifying customer needs and satisfying them profitably
Marketing objectives
The goals set for marketing department to help business achieve its overall objectives
Why are marketing objectives important
-They provide a sense of focused direction
-Business success can be measured against the set by objectives
-Marketing objectives can be broken down to sales targets
-Marketing objectives form the basis of marketing strategy
Marketing strategy
Plan of action as to how a business would meet its marketing objectives and create competitive advantage
Market segment
A subgroup of a whole market which bring together consumers w similar interests
Industrial market
The selling of products by businesses to other businesses, AKA B2B
Consumer market
The selling of products by business to final end users,
AKA B2C
Customer orientated
An outward approach that bases the product decisions on consumer demand
Product orientated
An inward approach that focuses on making products that can be made or have been made for a long time.
Benefits of customer oriented
-Chances of products failing is reduced
-Products based on customer needs will have longer life span
Market size
The total value of sales all producers within a market in a given time period
Importance of market size
-It allows managers to asses whether a market is worth entering
-It allows a business to calc its own share of the market
-The growth or decline of the market over time can be defined
Market growth
The percentage change in total size of the market over a period of time
Brand leader
The brand with the highest market share
Implications of increase and decease market growth
Increased
-Sales will increase
-Maybe an increase in prices and profit per unit
-More business might be attracted to the market, increasing level of competition
Reduced
-Sales will increase slowly if market share remains the same
-Competitors might reduce prices to increase sales in a slow growing market
-Lower prices might result in lower profit
Mass marketing
Selling standardised products or ranges of products in the same way to the whole market
Benefits and limitation of mass marketing
Benefits
-High sales may lead to lower average costs
-Cost advantages lead to lower price for consumers
-Mass marketing results in extensive publicity for the business, which leads to clear brand identity
Limitations
-Lack of differentiated products
-The focus on low prices establish premium brand image
-Changes could lead to fall in demand for the standardised product
Benefits and Limitations of Niche marketing
Benefits
-Small businesses can survive and thrive in markets
-An unexploited niche has no competitors, so prices can be high
-Niche and exclusive marketing can be used by larger firms to create status and image
Limitations
-Does not allow economies of scale
-Limited scope for business growth
-If selling in a niche market is profitable, attracts more competitors
Market segmentation
The identification of different groups of customers with common needs within a market and the marketing of different products services for those groups
Consumer profile
A quantified picture of a businesses consumers, showing data about their age groups, income levels, gender etc
Benefits and limitations of market segments
Benefits
-Businesses can define their target market precisely
-Enables identification of gaps in the market which can be exploited
-Small firms are able to specialise in one or two markets
-Price discrimination between consumer groups can increase revenue and profits
Limitations
-RnD and production cost maybe high
-Promotional costs maybe be high
-Inventory costs would be higher than selling on undifferentiated product
-Extensive market research is required
Customer relationship marketing
(CRM)
Using marketing activités to build and establish good customer relationships so customer loyalty remains
Long term customer relationships can be achieved by
-Targeted marketing
-Customer service and support
-Communicate regularly w customers
-Using social media
Benefits and limitations of CRM
Benefits
-CRM is cost effective
-It is a sustainable strategy creating long term customers
-Loyal customers recommend to others so there is free additional marketing
-Costs less than attracting new customers
Limitations
-IT systems and softwares are needed
-Effective CRM campaigns may use expensive external consultancies
-CRM requires an existing customer base
-It may be costly to respond to customers feedback
