AS level business unit marketing

1. Marketing
Revision busss

2. Wtf is marketing
Marketing: identify and satisfy customer needs profitably.
Marketing: market research, product design, pricing, ads, customer service and packaging design
Marketing objectives:
- Share of market
- Average num of item purchase per visit
- Frequency of shopping by loyal customers
- Percentage of customers who return
Marketing strategy: plan of action giving details of how a business intends to achieve its marketing
objectives

3. Customer orientation
Customer orientation: outward looking approach that produce product based on customer demand.
Usually standardized and many competitors
Pros:
- Reduce risk of producing new products: effective market research help this
- Longer lifespan and more profitable
- Market research never ends. Continuous research allows product and method of marketing adapt
and change tastes before competitor
Cons:
- Expensive market research
- Waste resource if follow every trend
- Expensive to offer sufficient choices and meet every demand

4. Product orientation
Customer orientation: inward looking approach that focus on making product then try to sell them.
Usually niche and labs and pharmaceutical
Pros:
- Pure research into technical innovations: Dyson
- If business make product good enough quality, then goods will be purchased
- Quality valued over market fashion.
- Truly innovative product -> high sales and profit

5. Market size: total value of sales
- Allow managers to access whether should enter or not
- Allow business to calculate market share
- Growth and decline of market can be identified

6. Market growth
- Sales inc/dec
- Price and profit inc/dec
- Economies of scale inc/dec
- Competition

7. Market share
- More market share = more sales than competitor = more profit
- Retailer want to stock and promote bigger market share brand
- Retailer give best position in the shop
- Ability to give less discount for retailers
- Consumer likely to buy most popular brand

8. Mass marketing (selling standardized product in the same way
to the whole market)
Pros:
- High sales -> high material needed -> econ of scale
- Lower price -> gain position in market -> market share
- Extensive publicity -> clear brand identity
Cons:
- Lack differentiated product
- Low price establish cheap brand image not premium
- Tech changes -> fall demand for standardized product
- Overdependence on standardized product

9. Niche marketing (exploit small segment of larger market by
develop differentiated product to sell for those segments)
Pros:
- Small business can survive and thrive
- Has little competitor if market is newly discovered -> chance of high prices and high profit margin
- Premium product & exclusive marketing create status and image -> consumer pay more for
exclusive product
Cons:
- No economies of scale
- Limited scope for growth if the market has less customers
- Vulnerable to market changes if only focus in one niche market
- If product is profitable -> competitor enter market -> lower profit

10. USP unique selling point
Brand image and identity -> increase price -> adding value -> profitability

11. Market segmentation
- Geographic difference
- Demographic difference: age, gender, family size, ethic, income, social class
- Psychographic difference: lifestyles, personality, values, attitudes

12. Market segmentation
Pros:
- Define target market precisely -> product aim to these market -> right customers right demands ->
increase sales -> market share
- Identification of gaps in the market (niche shit) -> develop product aim for those -> sales -> econ of
scales
- Differentiated marketing strategies -> no wasting money on other market -> more profitable
- Small firm can survive by specialization -> economy of scale -> cost and price benefits
- Price discrimination between groups -> use elasticity to increase sales -> increase revenue -> retained
profit
Cons:
- Market research to identify segments and needs
- Research / production / promotional / inventory cost for making different variation of product rather
than one undifferentiated product
- Customer changing purchasing habit

13. CRM (customer relationship marketing: establish good
customer relationship so customer maintain loyal)
Pros:
- With existing customer base, CRM is cost effective as word of mouth -> low marketing cost
- Long term customers instead of short term customer from price promotions
- Reduce amount of customer of competitors
- Repeat purchase
- If increase price, still purchase
Cons:
- Software systems needed and employee have to be trained to use and respond to customer
- Effective CRM requires external marketing consultancy at high cost
- Need existing customer base to be effective, if newly established no customer to be loyal [E]
- Expensive to respond to every feedback, especially there are special requests

14. Market research (process of gathering, recording, analyzing
data about customers, competitors and market)
- Identify main features of a market
- Reduce risk of failure of a newly launched product
- Identify customer characteristics (wants and needs)
- Explain patterns in sales of products and market trends (use to reverse sales trend)
- Identify most popular designs, styles, packaging

15. Primary market research (collection of first-hand data that is
directly related to the business)
Pros:
- Directly relevant to bus
- Up-to-date
- Competitor don’t have access
- Focus on market reaction to changes of our own business
- Collect qualitative (customer opinion and expression) and quantitative data
Cons:
- Time consuming and expensive
- Small sample reduce accuracy, create misleading and bias
- New business has no customer or finance to conduct

16. Secondary market research (use of existing data that was
collected for other purpose)
Pros:
- Relatively cheap
- Identifies nature of market (population, trends, economy)
- Obtain data quickly
- Can compare with difference sources
- Large sample which has higher accuracy
Cons:
- Might not suitable and relevant to the business
- Out of date
- Not available for everyone / expensive
- Difficult to analyze big data -> hire specialist -> expensive asf
- Identify potential but need primary research for product reference anyways

17. Sampling (taking a group of people then do market research
survey represent as overla target market)
Pros:
- Relatively cheap than whole shit
- Relatively fast than whole shit
Cons:
- Sample too small -> less accurate (consider relative time and cost)
- Risk of bias from sample
- Researchers may not use appropriate methods of sampling (selecting sample)

18. USP (unique selling point)
Pros:
- Promotion that focus on differentiating feature of the product or service
- Opportunity to charge higher prices due to exclusive and unique feature -> higher profit margin
- Free publicity from media reporting USP of the product
- Higher sales compared to undifferentiated product
- Customers being more willing to be identified with brand because it is different

19. Definitions
- Product positioning: consumer’s view of product or service compared to competitors
- Tangible: measurable features that can be used in comparison
- Intangible: subjective opinions, can’t be measured easily
Effective branding -> meeting intangible expectations of customers
- Product positioning: consumers’ view of product compared to competitors -> business can analyze
how their brand is related to others.

20. Product life cycle: pattern of sales for a product from launch to
withdraw from the market
- Introduction: sales low and increase slowly
- Growth: sales grow if effectively promoted
- Maturity or saturation: sales fail to grow but not decline significantly (consumer durables: TV,
washing machine); extension strategies will be used.
- Decline: sales decline steadily, newer product from competitors may be the cause.

22. Boston matrix
Star
Cash cow
?
Dog

23. Boston matrix
• Cash cow: Well-established product in matured market. Profitable and cost are low because
customer already aware. High sales because of awareness
• Star: successful product performing well in expanding market. Promotion cost high to
differentiate product and reinforce brand image. Likely to generate high income
• Question mark: consumes resource but little return. Need heavy promotion to be established.
Should make decision quick. Have potential as selling in market sector that is growing fast
• Dog: market not growing, offer little future prospect. Can withdraw.

24. Boston matrix
Pros:
- Analyze performance & position -> full analysis of portfolio -> focus on which product need
marketing support or need corrective action.
- Planning action
- Planning introduction of a new product
Cons:
- No technique guarantee success, depend on analysis of managers because Boston matrix only tell
current situation not predicting the future.
- Detailed & continuous market research will help tell what will happen next
- Assume high market share = high profit -> not true when sales being gained by reducing price and
profit margin

25. Pricing decision
- Cost of production
- Competitive condition
- Competitive price
- Business & marketing objective
- PED
- New or existing product

26. Pricing methods: cost based pricing
Mark up: unit cost + percentage mark up
Cost-plus: total unit cost + fixed mark up
- easy to calculate for retailer bc they know how much they bought (manufacturer hard to
know)
- used when there are no doubts about fixed
Contribution cost: variable cost per unit + contribution + profit
Loss leaders: setting low price (even below variable cost) to attract people and hoping them to buy
other products that have positive contribution

27. Pricing methods: competition-based
- Competitive pricing: because of one dominant business in the market (price leader); or because
many same size businesses selling same price for same product, avoid price war
- Price discrimination: different groups different price to maximize profit (may utilize PED)
- Dynamic pricing: constantly changing price to different customer (e-commerce amazon shit)

29. Pricing methods: new products
- Penetration pricing: set low price and do mass marketing to gain market share, then slowly
increase price
- Price skimming: maximize short-run profit. Help establish exclusive image. Price decrease when
competition arise.
- Psychological pricing: setting price level which matches customer view about value of product
($999 instead of $1001)

30. Promotion: use of ads, sales promotion, personal selling
to inform and pursuade customer to buy shit
- Direct promotion: promotional activities aimed directly at target customers
- Sales promotion: discounts, deals directed at customers to achieve short-term sales increase and
repeat purchase.
Informative advertising: informative, for newly launched product that customers are unaware
Persuasive advertising: create image, brand identity, differentiate from competitors.

31. - Print ads
- direct, hard copy;
- hard to gain national coverage, less effective for young dipshit
- Broadcast ads
- visual, brand image thru actors, national/international, memory if visual gud;
- expensive to make and present, no permanent hard copy
- Outdoor ads
- low cost, prime positions, seen more than 1;
- best location expensive, weather damaged, many not notice
- Product placement ads
- target customer, brand image, consumer assume product is gud;
- show less popular, expensive
- Guerrilla ads
- Low cost but need permission, creative and attract young shit, word of mouth, staged event gain free media publicity
- Message misunderstood, negative, irresponsible;
- Sponsorship
- Good publicity, global, success of the team -> gud brand
- Expensive, team fail

32. EVALUATION
Evaluation:
- Cost
- Consumer profile (target audience)
- Message or image wanted to convey
- Other aspects of marketing mix (expensive product cheap place)
- Legal constraints

33. Sales promotion methods
- Price offers
- Loyalty reward programs
- Money-off coupon
- Point-of-sales display
- Buy1get1 free
- Games and competitions

35. Digital promotion
Pros:
- Global
- Relatively low cost
- Easy to track and measure results
- Personalization
- Social media CRM
- Content marketing: viral shit
- Website convenience
Cons:
- Time-consuming if no agency: expensive shit
- Skills and training
- Global competition
- Complaints and feedback visible

36. Direct promotion methods: direct mail
Direct mail is sent out by post.
• This is low cost and well-defined areas/regions can be targeted.
• It is easy to evaluate the success of a campaign by checking response rates (e.g. tear-off slips).
Cons:
• Many potential consumers now prefer digital communication.
• The mailing may be viewed as junk mail and quickly thrown away.

37. Direct promotion methods: telemarketing
• Can be outsourced to an agency. They may charge for the cost of the script to be used and then on
an hourly basis, or might charge for each cold call that leads to an interested potential customer
being contacted again.
• This is lower cost than personal selling.
• It is easy to monitor the response/rejection rate.
Cons:
• Many consumers object to cold-calling.
• It is very easy for consumers to reject a telemarketing message.

38. Direct promotion methods: personal selling
With this method, a salesperson is employed to sell to each individual customer.
• Sales success rates are often high with skilled direct-sales employees.
• It is often used for expensive industrial products. This is often one of the key differences between
consumer marketing and business marketing.
• It is effective with expensive and complex products that require specialist knowledge.
Cons:
• Customers may complain about being pressured into buying, especially if the sales employees are
paid a high bonus for each sale made.
• Sales employees need to be well trained. They should avoid selling to a reluctant consumer who
later regrets the decision.
• This is a high-cost method of promotion and selling.

39. Packaging
Pros:
- Protect and contain product
- Give information
- Brand image
- Make product attractive and help recognition

40. Branding
Pros:
- Consumer recognition
- Differentiate
- Identity for customers to relate
- Reduce PED
- Customer loyalty

41. PLACE
DISTRIBUTION CHANNELS

42. Direct selling – no intermediaries
 Sell products directly from the
manufacturer to the customer.
 No mark-up or profit taken by
intermediaries
 Most control over the marketing mix for
the producer.
 Quicker than the other methods – great
foods that need to be fresh
 Contact with customer can be useful for
market research.
 All storage and inventory costs have to be
paid by the producer.
 There are no retail outlets so consumers
cannot see and try before they buy.
 It may not be convenient for consumers.
 No after-sales service is offered by shops.
 It is expensive to deliver each item to
consumers.

43. One-intermediary channel
 Good for consumer goods
 Retailers incur the cost of holding
inventories.
 Retailers display the products and offer
after-sales service.
 Retailers should be in locations that are
convenient to consumers.
 Producers focus on production, not on
selling the products to consumers.
• The intermediary takes a profit mark-up,
making the product more expensive to
consumers.
• Producers lose control over the marketing
mix.
• The outlet is not exclusive as retailers sell
competitors’ products too.
• Producers pass on delivery costs to
retailers.

44. two-intermediary channels
• This method of distribution uses a wholesaler.
• A wholesaler buys products in bulk from the
producer and then sells them to different
retailers in the area.
 Wholesalers hold the goods and buy in bulk
from producers.
 It reduces producers’ inventory costs.
 Wholesalers pay for the costs of transport to
retailers.
 Wholesalers buy in large quantities and sell in
small quantities.
LO4: Analyse the importance of place in marketing mix and evaluate the main distribution channels.
• Another intermediary takes a profit mark-
up, making the product more expensive to
consumers.
• Producers lose further control over the
marketing mix.
• It slows down the distribution chain.

45. E-commerce
LO4: Analyse the importance of place in marketing mix and evaluate the main distribution channels.
• It is relatively inexpensive
• Companies can reach a worldwide audience
• Consumers interact with the websites and make purchases
and leave important data
• The internet is convenient for consumers to use
• Businesses can keep accurate records on the number of
clicks or visitors, and quickly measure the success rate of
different web promotions.
• Computer and smartphone ownership is increasing in all
countries of the world.
• Selling products on the internet involves lower fixed costs
than traditional retail stores.
• Dynamic pricing – charging different prices to different
consumers – is easier.
• Some countries have poor internet
• Consumers cannot touch, smell, feel or try
on tangible goods before buying
• Product returns may increase if consumers
are dissatisfied with their purchases once
they have been received.
• The cost and unreliability of postal services
Websites must be kept up-to-date
• Worries about internet security.

46. Benefits and limitations of internet marketing
and E-COMMERCE
• Cheaper
• Worldwide audience
• Convenient
• Lower fixed costs
• Dynamic pricing
• Accurate consumer records
However
• Slow speed or no computers in poor countries, tangible goods can’t be
touched or felt, unreliable and costly postal service in some countries and
internet security fears.
LO5: Evaluate the importance of internet marketing and e-commerce for businesses.

47. Evaluation
• Should the product be sold directly to customers or through retailers? Many industrial products,
which are sold in small numbers and are very complex, are sold directly.
• How long should the channel be (i.e. how many intermediaries should there be)? If the market is very
widely dispersed geographically, having more than one intermediary can be an advantage.
• In which locations should the product be made available? Market research will be needed before
this decision can be made.
• Should the internet (online selling) be the main channel?
• How much will it cost to keep the product inventory on store shelves and in warehouses? If
inventory costs are high, then single or two might be the preferred option.
• How much control does the business want to have over the marketing mix? Direct selling gives
much more control over pricing, for example.
• How will the distribution channel integrate with other marketing-mix components? The
overall marketing image needs to be supported by the channel of distribution used
LO4: Analyse the importance of place in marketing mix and evaluate the main distribution channels.