Marketing

Marketing - What is it? Marketing is more than just selling or advertising - it is the art of making it as easy as possible to get potential customers to buy your product. There are Four Ps in Marketing. They are known as the MARKETING MIX - these are the things that a business must get right 1. The price must be one that the customer thinks is good value for money. 2. The firm must come up with a product that people will want to buy 3. The product must be for sale in a place the customer will find convenient 4. The product must be promoted so that potential customers know it exists The 4 Ps of Marketing PRICE PRODUCT PLACE PROMOTION

PRICE

PRODUCT

PLACE

PROMOTION

Markets are segmented into different groups of people. The main ways of doing this are: Age : eg the teenage market or the over 55’s Social class : class A (professional to class E (unemployed) Gender : men and women eg both use bikes but they have a different design Location : Haggis is more popular in Scotland than in London Culture or religion : different groups have their own unique products eg bagels, lassi etc. We’re all different ages - we want different things

Market Research FIELD research is finding the information out yourself. This is also known as PRIMARY research. It’s useful for finding out new information. You can use questionnaires , telephone surveys , product testing etc. the information will be up-to-date , relevant and specific . It’s expensive to collect, it’s time consuming and needs a large sample size to be accurate. Since Marketing is about giving the customer what they want, it makes sense to try to find out what that is. Would you mind answering a few questions for us?

It’s useful for finding out new information.

You can use questionnaires , telephone surveys , product testing etc.

the information will be up-to-date , relevant and specific .

It’s expensive to collect, it’s time consuming and needs a large sample size to be accurate.

DESK research is finding out by using someone else’s work. This is also known as SECONDARY research. It’s useful for looking at the whole market and analysing past trends to predict the future. It involves looking at market research reports , newspaper articles , government publications etc. the information will be cheaper than field research and it should be instantly available . It’s not always relevant to your needs and can often be out-of-date .

It’s useful for looking at the whole market and analysing past trends to predict the future.

It involves looking at market research reports , newspaper articles , government publications etc.

the information will be cheaper than field research and it should be instantly available .

It’s not always relevant to your needs and can often be out-of-date .

We use a questionnaire to obtain meaningful answers from a large and varied group. Then, from these responses modify the product/service to appeal to the market. To design a questionnaire you should: keep it short make it simple and easy to understand state clearly the purpose of the questionnaire not rely heavily on the respondent’s memory begin with a few factual , easy response questions include some closed Yes or No response questions follow up closed questions with an open question close with a filter question designed to place the respondent in a market segment

keep it short

make it simple and easy to understand

state clearly the purpose of the questionnaire

not rely heavily on the respondent’s memory

begin with a few factual , easy response questions

include some closed Yes or No response questions

follow up closed questions with an open question

close with a filter question designed to place the respondent in a market segment

Product Be market-led , not product-led : find out what your customers want by using market research and then make it, rather than making a product and then trying to sell it Get the detail of the product right: the design must be fit for the purpose; the product name must be catchy; there must be a broad product range to give all your potential customers options. Know your product’s Life Cycle : Introduction, growth, maturity, decline Make your product different from the competition: this is what all firms are after – product differentiation .

Be market-led , not product-led : find out what your customers want by using market research and then make it, rather than making a product and then trying to sell it

Get the detail of the product right: the design must be fit for the purpose; the product name must be catchy; there must be a broad product range to give all your potential customers options.

Know your product’s Life Cycle : Introduction, growth, maturity, decline

Make your product different from the competition: this is what all firms are after – product differentiation .

Brands A brand is a product which in the eyes of customers is seen as different from other similar products. Branding helps differentiate one product from another. Strong branding means that the firm can charge a premium price because the product is perceived as high quality , it has high visibility due to the amount of advertising and brand loyalty . Brands are facing challenges – customers are more price conscious and there has been an increase in the number of quality “ own brands ”

Strong branding means that the firm can charge a premium price because the product is perceived as high quality , it has high visibility due to the amount of advertising and brand loyalty .

Brands are facing challenges – customers are more price conscious and there has been an increase in the number of quality “ own brands ”

Price Charging the right price is very important. You will want to make sure you cover your costs and make a profit . Pricing Techniques Penetration Pricing – the firm charges a low price when the product is new to create interest. Once the product has become established the firm will increase the price. Skimming – Firms charge a high price to begin with to help make it desirable to people with large incomes. When the product is established the firm will lower the price. Hour-Based Pricing – used to price services when a price is quoted per hour of labour eg gardener. Cost-Based Pricing – working out how much the product cost to make and then adding a percentage extra . Destroyer Pricing – the firm charges a low price that they know is unprofitable for their competitors and once they have driven the competition out of the market they will raise prices . This is illegal .

Penetration Pricing – the firm charges a low price when the product is new to create interest. Once the product has become established the firm will increase the price.

Skimming – Firms charge a high price to begin with to help make it desirable to people with large incomes. When the product is established the firm will lower the price.

Hour-Based Pricing – used to price services when a price is quoted per hour of labour eg gardener.

Cost-Based Pricing – working out how much the product cost to make and then adding a percentage extra .

Destroyer Pricing – the firm charges a low price that they know is unprofitable for their competitors and once they have driven the competition out of the market they will raise prices . This is illegal .

Place MANUFACTURERS A D C B CONSUMERS Company warehouse Wholesalers Company outlets Retailers Retailers

Promotion - Advertising Firms advertise for 4 reasons: To make consumers aware of new products To remind consumers about existing products To persuade consumers to switch from rival products To improve the image of the business Where they advertise depends on: The target audience The size of your market The size of your advertising budget Advertising can be either informative (where the product is described and only facts are given) or persuasive (where they try to convince the consumer they need the product by using celebrities etc)

Firms advertise for 4 reasons:

To make consumers aware of new products

To remind consumers about existing products

To persuade consumers to switch from rival products

To improve the image of the business

Where they advertise depends on:

The target audience

The size of your market

The size of your advertising budget

Advertising Media Television: Ads can reach millions and you can target people who watch particular programmes but it is very expensive . Radio: Ads are usually cheaper and you can still target listeners of particular programmes but it’s sound only and audiences are usually smaller . Newspapers and Magazines: They know a lot about their readership so it’s easy to target effectively. They’ll often be read more than once . Posters and Billboards: Ads have a high visual impact and stay in place for a long time . Can be seen by lots of people but usually only for a short time so they can’t contain much information . Leaflets and Junk Mail: They are cheap to produce and distribute but they’re easy to ignore . Internet Sites: Ads can have a high visual impact , be interactive and link directly to buying the product. Cinema: Ads have a high visual and sound impact and you can target particular films. You have a captive audience but they are expensive

Buy One Get One Free (BOGOF): 0r buy one get something else free. Boots 3 for 2 offers is a version of this. Promotion – Other Methods There are 6 main methods of sales promotion Discounts : a good way to get people to notice the product. Free gifts : this will entice people to buy the product and is often used by fast-food restaurants. Competitions : buy their product and get entered into the prize draw or is your chocolate bar wrapper a winning wrapper? Loyalty cards : many supermarkets and retail outlets use loyalty cards – each time they use the store their purchases gain points or rewards. These can be exchanged for discounts or products eg Boots Advantage card Point of sale advertising : put your product in a special display case at the front of the store to make it more noticeable to customers