Topic 2 Marketing Flashcards
Aim of marketing
(4)
The aim of marketing is:
- to find out what customers want and need (market research),
- make products or services that satisfy them,
- attract customers
- to increase **sales and profitability. **
Marketing vs. Sales
**MARKETING **
* Focus on need of client
*Offers right product at right price
*Satisfy needs
*Deals with numbers, research, statistics and
*How, when, what and why consumers buy.
**SALES **
* Focus on sellling of product
* Part of marketing process
* Salesperson convinces buyer
Why do we need
Marketing strategies
Helps to develop long term plan for competitive
advantage.
*Influences whole organisation, thus:
- Type of products made and sold
- Sales prices
- How to inform the consumer, and
- Where it will be sold.
MASS MARKETING
Mass marketing is a strategy where a business
1) tries to reach large, general audience
2) with everyday products
- Example - chocolates, washing powder
- Identify who will buy the product
- What are the needs of this group of consumers?
AIM TARGET MARKETING
Aim: Identify target market
TARGET MARKET?
Specific group of people which have a need or
want for a specific product or service.
Target Marketing
MARKET RESEARCH
- Determine specific target market who needs the product.
- Divide into different segments.
- Adapt to serve more than one segment.
- Marketing strategy:
- Analyse target market and different segments
- Marketing mix (discussed later on*)
MARKET
SEGMENTATION
Group of consumers divided into smaller groups with
the **same needs and wants ** for products and services.
**Aim: **To understand the specific needs of a group of
consumers.
Find specific groups who’s needs can be satisfied.
5 Types of market segmentation
1. Geographical segmentation
* Where does consumer live
* How many people live in this area?
* Approximate amount of products that need to be
bought.
* Climate and weather
*Enough clients?
2. Demographycal segmentation
* Actual consumer E.g. age, sex, income, culture, beliefs.
3. Psychographic segmentation
* How people think and act
* Lifestyle, social class, interests and status.
* Advertisements more efficient
E.g.: Someone concerned about status, might be
influences by exotic and luxury advertising.
4. Behaviour segmentation
* How often is it used?
* Loyalty regarding product
* Price sensitivity
* Will consumer buy product?
5. Benefit segmentation
* Needs and wants of potential consumers.
* E.g.: health conscious, keeps an eye on weight,
active, social butterfly, etc.
Marketing Mix
- Mix according to consumer’s needs
- Composed of 5 P’s = 5 Elements working together to sell the:
- Right product
- To the right person
- At the right price
- In the right place
- With the right promotion.
5 P’s = 5 Elements of Marketing Mix
What is the aim of the Product policy
- Determine core business: product or service focussed
upon. - Can make / sell a variety of products
Examples: Unilevers, Tigerbrands
5 P’s = 5 Elements of Marketing Mix
Two Important factors in product policy
1. Suitability
* Suitable for purpose
* Satisfies needs
* Suitable name, size, colour and cost
2. Quality
* Quality suitable for purpose
* Long term/short term quality
* Brand name
5 P’s = 5 Elements of Marketing Mix
4 Ways in which Product Quality can be determined
Determined by:
1. SABS mark ofapproval (South African Bureau of Standards)
Tests products and gives approval if adhering to standards.
2. Labels
Sell-by-date, ingredients and fibre content of textiles
3. Specifications
What can product do?
4. Product samples
Gives idea of quality / usefulness
E.g. Washing powder sample in magazines
5 P’s = 5 Elements of Marketing Mix
Place
What does the distribution policy refer to?
- Refers to distribution policy of business.
- Flow of products from manufacturer or farmer to the
consumer.
5 P’s = 5 Elements of Marketing Mix
- Important factors in Distribution Policy
How are you distributing to your conumer
1. Shops (formal sector)
* Manufacturers
* Whole salers
* Smaller retailers
2. Mail orders (formal sector)
* Advertising
* Includes order form and contact details
* Product delivered after payment is received
3. Electronic marketing (formal sector)
* Television & internet marketing
* See products
* Very competitive
* Some supermarkets offer internet shopping
4. Informal sector
* Small, unregistered businesses
*Examples: *
- Shebeens
- Hawkers
- Market stalls
- Home industry like sewing
5 P’s = 5 Elements of Marketing Mix
Price policy
Calucting price depends on 4 factors.
Calculating price depends on:
- Quality
- Amount that target market can afford
- Competitor’s prices
- Discount
5 P’s = 5 Elements of Marketing Mix
2 Important factors in
Price Policy
1. Retail price
* Covers cost of product
* Covers overhead costs (e.g. rent, salaries and insurance)
* Makes a profit
* Competitive price
* Some prices are fixed, such as bread
2. Discount
* Offers product at lower price
4 Types of discount:
Quantity discount
When buying large amounts.
Seasonal discount
Left-over stock at end of season.
Trade discount
Special customers – good relationship.
Cash discount
To encourage earlier payment of accounts.
5 P’s = 5 Elements of Marketing Mix
What is a Promotion policy
Refers to communication with customers
5 P’s = 5 Elements of Marketing Mix
3 Types of promotions
1. Advertisements
* Involves many people
* Cost determined by chosen medium
2. Personal sales
* Sales personnel or sales representatives
* Very convincing
* Examples
- Staff member introducing new product at entrance of shop
- Sales representative announcing promotion regarding
product or service over intercom.
3. Sales promotions
* Short term incentives encouraging people to buy product or service.
* Examples
- Samples
- Displays
- Demonstrations
- Competitions
- Discount coupons
5 P’s = 5 Elements of Marketing Mix
People policy
- Handle target group correctly
- Happy clients spread the word – good marketing
- Always be concious of image portrayed
- Poor client service leads to poor publicity
- Handling complaints effectively & solving them:
- staff
- suppliers
- clients
4 things that make advertisements effective.
- Advertisements have a positive or negative influence on consumers
- Carries a message
- Important that message is interpreted correctly
- AIDA-principle
AIDA - model
Attention
Interest
Desire
Action
AIDA
AIDA - Attention
**A = Attention
**
- Catches the eye
- Draws attention
- Use colour, illustrations, catch-phrases, music, humor, text to draw attention
AIDA
AIDA - Interest
I = Interest
- Interest created – draws in consumer
- E.g. stressing advantages or new qualities of product
AIDA
AIDA - Desire
D = Desire
- Desiring product
- Convince consumer the product will satisfy need or want
- E.g. using images or text to emphasise status
AIDA
AIDA - Action
A = Action
- Consumer acts – buys product or service
- Use action words like: “Buy NOW” or “Do not wait” .
- Advertisement must inform consumer where product / service can be bought.
