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  • 1. Marketing
  • TheMarket
    Product orientatin
    What is marketing?
    Market orientation
    Market segmentation
    The market
    SWOT analysis
    Land availability
    Labour supply
    Analysingthemarket
  • 13. TheMarket
    Analysing the Market
     
    Analysing the market involves:
    Breaking down the market for particular goods or services into parts
    Review the supply of a product using a SWOT analysis
     
    Analysing the market allows the firm to:
    Target its advertising and promotion
    Make the products more attractive to each type of customer
    Maximise sales and cut costs through targeting
    Plan future business strategies
     
    Market segments
    This means dividing demand for a good or service
    into segments with specific characteristics. The firm can then target its product and marketing at that particular segment
     
    Segments can be divided by
    Age, Gender, ,Race and religion, Lifestyle
    Geography,Socio-economic groups
     
  • 14. TheMarket
    Niche markets
    These are very small, specialised markets for particular goods
     
    Target Market
    This is the section of the market that the firms want to aim their product at
     
    SWOT Analysis
    This is used by a firm to analyse its present market position and plan future strategies. Firms look at their strengths, weaknesses, opportunities and threats.
     
    Strengths and Weaknesses are internal factors over which they have some control e.g. customer care
     
    Opportunities and Threats are external factors over which the firm has no control e.g. government policies
     
  • 15. MarketResearch
    Primaryorfieldresearch
    What is market research?
    Desk or secondary research
    Market Research
    Types of questions
    Sampling
  • MarketResearch
    Researching the Market
     
    What is market research?
    Market research is information collected by a
    firm about existing and potential markets.
     
    Desk research
    This will use secondary data (data which has already been collected). Sources include
    Past sales records
    Published accounts
    General market reports
    Official government data e.g. the census
    Advantages and disadvantages
    There is no way of knowing how reliable some
    of the data is
    The data maybe inexpensive to collect, but may be out of date
    It could be difficult to obtain the exact
    information needed
     
     
  • 26. MarketResearch
    Sampling
    It is impossible for a firm to interview everyone so a firm must decide on who to ask
    Random sample – people are chosen at random to participate
    Quota sample – involves segmenting the market and then picking a certain number of people from each segment
    Targeted sample – a particular group is targeted
     
    Types of questions
    Open – where no preset choices are given. Used for opinions
    Closed – where choices are given normally yes or n. Easy to analyse
    Multiple-choice – a number of choices are given
    Preference – where preferences are shown, by numbering the options
    Scale – where you place your answer on a scale
  • 27. MarketResearch
    Field research
    This is where research is conducted by the firm itself and takes several forms
    Face to face - questionnaires are conducted on the street
    Postal surveys – detailed questionnaires which can be targeted at particular types of consumers but has low response rate
    Telephone surveys – cheap and convenient to contact large numbers, but responses are normally limited
    One-to-one interviews are used for in-depth responses but takes time
    Panel or group interviews – are used to generate discussion about new products or advertisements
    Observation – involves watching shoppers as they walk around a supermarket
    Testing – test peoples reactions to products
  • 28. Marketing Mix
    Place
    Product
    Marketing Mix
    Price
    Promotion
  • 29. Price
    Right price
    Pricing startegies
    Cover costs
    Level of revenue
    Price
    Level of profit
  • 38. Price
    Price
     Setting the right price is important because it determines
    How much the firm will sell
    The level of revenue
    The amount of profit
     
    When firms set their prices they need to answer the following questions
    Will we cover our costs?
    What price do our competitors charge?
    Do we offer a special ‘extra’ service?
    How sensitive are customers to changes in price?
     
    Pricing strategies
    Cost-plus pricing – the price is set by calculating costs and adding a mark-up for profit
     
     
  • 39. Price
    Contribution pricing – where the price covers the variable cost of producing one unit and makes a contribution towards the fixed costs. Often used where there is a lot of competition or for a limited time
     
    Penetration pricing – where a firm sets a low price in order to gain market share often used when at product launches
     
    Creaming/skimming – when firms set a high price at a products launch and then reduce it later on, by doing this they maximise revenue. Used by firms who have a product that is perceived as new or different. These firms are price makers e.g. games console manufacturers
  • 40. Price
    Discounting – this may be used to encourage bulk buying or to get rid of excess stock by sales
     
    Parallel/competition pricing – where there is a lot of competition firms set their prices at the same level as rivals i.e. they are price takers (they set their price at the going rate)
     
    Loss leaders – products are sold at a loss to attract customers into a store
     
    Psychological pricing – used to make prices seem lower e.g. 0.99p
     
    Price discrimination – charging different prices to different market segments e.g. OAP and student discounts
     
     
     
  • 41. Product
    Productdecisions
    Product mix
    ProductLifecycle
    Development
    Launch
    Growth
    Maturity
    Saturation
    Decline
    Productdifferentiation
    Size,colour,shape
    Taste, ingredients
    BrandingPackaging
    Extra features
    Product
    Branding
    Productextension
  • 42. Product
    Product decisions
    Businesses have to decide what product, or range of products, they are going to produce and sell. They have to decide on the name, how it’s to be packaged and whether to ‘brand’ the product
     
    The Product mix is the combination of products that a firm sells e.g. Mars ice cream and chocolate bars
     
    Product differentiation
    A firm needs to make products appear from those of its rivals in order to gain sales. This can be achieved by changing the
    Size, colour, name, shape
    Taste, ingredients
    Branding, packaging, design
    Extra features, services offered
      
     
  • 43. Product
    Product extension
    When sales of a product slow down firms may look to extend the use of the product or service to bring in more revenue e.g. hotels expanding into conference hosting
     
    Branding
    A brand is a product that, in the eyes of customers is seen to be different from other similar products. Customers are able to recognise it from its name, logo, features, packaging or taste. Firms want customers to easily identify the product and so much of its advertising will be aimed at creating an image for the product, based on its name or particular characteristics.
  • 44. ProductLifecycle
    Product Life Cycle
     
    Products have lifecycles in the same way as humans do. Launch is similar to birth and they die in a similar way. Their life spans vary
     
    Development –Product is designed and launched. It involves start-up costs such as equipment and market research
     
    Introduction – Product is released Advertising costs are large and sales are small to start with. Firms choose on which pricing strategy to adopt.
    Growth - Sales normally increase sharply, advertising expenditure is normally reduced as the product becomes popular. Prices are often altered either to encourage sales or boost profits
  • 45.  
    Maturity – Sales peak and profits are greatest. Firms will often try to use extension strategies at this point such as special features or encouraging brand loyalty
     
    Saturation–The market has become very competitive and there are lots of similar versions of the product. The product may be out of date and there is no room for further sales growth
     
    Decline – Sales fall rapidly as product becomes unpopular. Firms attempt to re-launch the product or introduce new products
    ProductLifecycle
  • 46. Place
    Channel of distribution/distribution chain
    Choosing the right channel
    Retailers
    E-Business
    Place
    Wholesalers
    Direct selling
  • 47. Bully’s Biz
    Place
    Channel of distribution- this is the path products take from the producer to the consumer sometimes known as a
    distribution chainor channel
    Direct to retailers
    Large supermarkets are able to buy in bulk from the manufacturers and will arrange distribution to stores
     
    Direct to customers
    Where products are sold straight to customers by factory shops, via phone, post or inter-net. This industry has grown with new technology e.g. e-commerce
     
    Through wholesalers
    Wholesalers buy in bulk from manufacturers and then break down the bulk to sell on to local stores e.g. cash and carry warehouses
     
    Through agents
    Agents act as intermediaries between producers and customers. They are often used when selling abroad
     
    Choosing the right channel depends on several factors
    The nature of the product - e.g. if perishable it needs to be delivered quickly
    The nature of the market – if the market is large many wholesalers and retailers may be needed
    Size - small companies often distribute their own products whereas large companies often choose the channel according to the market they work in
     
  • 48. Bully’s Biz
    Promotion
    Advertising
    Advertising agencies
    Direct mail
    Choosing the right promotion depends on
    Promotion
    Personal selling
    Packaging
    Sales techniques
    Special offers
  • 52. Bully’s Biz
    Promotion
    When businesses decide how to promote their products they have to weigh up the relative sot
    of each form of promotion against how best to
    target potential customers.
    Firms use promotion to make sure
    customers are aware that
    The product is for sale
    They know what the product is
    They know how the product will satisfy their needs
    They are persuaded to buy the product
    Types of Promotion
     
    Advertising is the most well known form of promotion and includes the following media types- T.V., radio, posters, packaging, and newspapers.
    Firms use advertising to
    Introduce new products
    Increase sales
    Compete with others
    Improve the company image
     
  • 53. Bully’s Biz
    Promotion
    When choosing the right media firms have to consider
    The nature of the product
    The advertising budget
    The target customers and market size
    The position of the product in it’s lifecycle
     
    Firms often use advertising agencies to produce their promotions as they have greater knowledge and techniques in areas such as market research
    Firms use informative adverts to tell the customers details about the product and persuasive adverts to encourage purchases often using glamour, pets and personalities
  • 54. Bully’s Biz
    Promotion
    Direct mail
    This is where advertising leaflets are sent out via post or within free newspapers
    Public relations
    This is where companies deal with communications from the public and gets news of products into the media
    Personal selling
    This is where products are sold ‘door to door’ or over the phone
    Packaging
    Firms use the colour and design of their packaging to reflect the image of the product and the company
    Sales techniques
    Free samples – used to get the public to try new or altered products
    Money off coupons – to encourage customers to make repeat purchases
    Free gifts – giving something extra to encourage customers
     
  • 55. Bully’s Biz
    Promotion
    Competitions – to encourage purchases by collecting to win
    Special offers – to encourage sales during quiet times, get rid off excess stock, and beat off competition
    Consumer behaviour
     
    Everyday people make economic decisions i.e. when a person decides to do one thing they are deciding not to do something else.
     
    Economic decisions – Decisions that affect resources
    Basic economic problem – There are limited resources and unlimited wants
    Scarcity and choice – Because of the basic economic problem there are not enough resources so people have to choose between them
     
    The allocation of resources by the market is determined by the interaction of demand and supply
  • 56. Bully’s Biz
    Promotion
    Demand – This is where consumers wants are made effective i.e. backed up by some form of currency
    Supply – What producers are willing to supply at a certain price
    In general as the price of a product falls more of the product is demanded by consumers and as the price increases less of the product is demanded
    As the price of a product rises suppliers are more willing to supply more of the product
     
    Factors affecting demand
    Price – see above
    Income – as income rises demand for products tends increases
    Taste – as consumer’s tastes change so will the demand for particular goods
    Prices of other goods – if the price of competitors products change so this will affect demand. These products are known as substitutes
  • 57. Bully’s Biz
    Promotion
    Complimentary goods are bought to go with other goods. The price of compliment goods can affect demand. For example if PS2’ s are made cheaper the demand for PS2 games will increase
    Population – an increase in population can increase demand or a change in the structure of population i.e. more young people can increase demand for certain types of goods
    Seasons – some products demand will be affect by the season e.g. more ice cream is sold in summer
     
    Factors affecting supply
    Costs – If costs such as wages rise, production may become too expensive and firms stop producing the goods
    Availability – Certain products may be affected by availability for example oil is a finite i.e. there is only so much available
    Technology – technological improvements may increase productivity reducing costs and allowing suppliers to sell at a lower price than before
  • 58. Bully’s Biz
    Niche V Mass
    Strategies
    Size of target market
    Competition
    Niche v Mass
    Economies of scale
    Specialization