The role of Marketing - 3.1 Flashcards
Marketing
The management task that links the business to the customer by identifying and meeting the needs of customers profitably - it does this by getting the right product at the right price to the right place at the right time
What management function does marketing include?
Market research
Product design
Pricing
Advertising
Distribution
Customer service
Packaging
Marketing relationship with Finance
Needs to fund the increased promotion budget.
Marketing relationship with Human resources
Additional employees are likely to be required.
Marketing relationship with Operation
Market research data will be used by operations to determine the preferences of consumers for the future product mix.
How can market be differentiated?
Market size
Market growth
Competitors and ease of entry
Differentiated or homogeneous products
Segmentation
Market size
The total level of sales of all producers within a market
Why is market size important?
A marketing manager can assess whether a market is worth entering or not
Businesses can calculate their own market share
Growth or decline of the market can be identified
How to measure market growth
By volume
By value
Market growth
The percentage change in the total size of a market over a period of time
Ease of entry
The lack of barriers for the establishment of new competitors in a market
What factors affect market growth?
Economic growth
Changes in consumer incomes
Development of new markets
Changes in consumer tastes
Technological change
Saturation of market
What makes it easier to join a market?
If there is more competitors
Issue with homogeneous products
Cannot be distinguished and therefore difficult for a business to charge higher prices
Homogeneous products
Goods that are physically identical or viewed as identical by consumers
Segmentation
Dividing a market into distinct groups of consumers who share common tastes and requirements
Target marketing
Focusing marketing activity on particular segments of the market
Mass marketing
Selling to the whole market using a standardised product and the same marketing activities
What differences do managers responsible for selling services need to recognise between goods and services?
Consumed immediately - cannot be stored
Services cannot be repaired - services need to be good quality the first time
Consumers find it more difficult to compared services. Promotion has to be informative and detailed
People are very important to the successful marketing of services
Important things to remember when selling services
Building trust
Time for delivering the service
Deliverability
Relationships
Services need a perceived value - emotional connection
Market orientation
An outward looking approach basing product decisions on consumer demand, as established by market research
Product orientation
An inward looking approach that focuses on making products that can be made - or have been made for a long time - and then trying to sell them
Benefit of market orientation
Chances of new products failing is less likely
More likely to survive
Constant feedback from consumers
Why is product orientation still being kept in some businesses?
Invent products in the belief that they will find consumers to purchase them.
Innovation
Concentrate their efforts on efficiently producing high quality goods
Issue with market orientation
If a business tries to respond to every passing consumer trend then they will overstretch
Social marketing
This approach considers not only the demands of consumers but also the effects on all members of the public involved in some way when firms meet these demands
Example of social marketing
Body shop, which promises not to support animal testing of its products and purchases its supplies from sustainable sources produced in non environmentally damaging ways
What implications does social marketing have?
It tries to to balance company profits, consumer wants and society’s interests
Social considers long term welfare (protecting the environment and paying workers reasonable wages
Give a competitive advantage, consumers prefer to purchase products from businesses that are seen t one socially responsible
Being able to charge higher prices
Market share
The percentage of sales in the total market sold by one business
Equation of market share
Firm’s sales in time period/total market sales in time period x 100
Benefits of being the market leader
Sales are higher - higher profits
Retailers want to stock the best selling brands
Can be shown off in advertising
Strong bargaining position with suppliers and retailers
Easier to recruit him class employees
Finance can be easier with banks and investors
Marketing objectives
The goals set for the marketing department to help the business achieve its overall objectives
Examples of for profit organisation objectives
Market share - gain market leadership
Total sales (value or volume)
Average number of items purchased per customer visit
Frequency that a loyal customer shops
Percentage of customers who are returning customers
Number of new customers
Customer satisfaction
Brand identity
What will a business with short term profits target?
Maximising sales at the highest price possible
What will a business with long term profits target?
May include both profitability and achieving goals of social responsibility.
To be effective, what should marketing objective be?
Fit in with the overall aims and mission of the business
Be determined by senior management
Be realistic, motivating, achievable, measurable and clearly communicated to all departments in the organisation
Why are marketing objectives important?
They provide a sense of direction
Progress can be monitored against the targets
They can be broken down into regional and product sales targets to allow for management by objectives
They form the basis of marketing strategy.
How does a not for profit organisation differ from a profit organisation?
Do not have external shareholders
Do not distribute dividends
Objectives include social or environment dimension
What are the main marketing activities in a not for profit organisation?
Market research
Identifying the best ways to communicate effectively with donors
The need to assess the effectiveness of different promotions and companions to increase value for money in the future
Difference in marketing for non profit making organisations compared t profit organisations?
Maintaining high ethical standards
Constant feedback on the success of charity campaigns
Free publicity
Not for profit organisation marketing objectives
Maximise revenue from trading activities
Increase recognition of the organisation by society
Promote the work and aims of the organisation to a wide audience
What 3 considerations can influence marketing practices and strategies?
Innovation
Ethics
Cultural differences
