Transcript edexcel - Dynamic Learning

EDEXCEL BUSINESS for GCSE
Unit 3 Building a business
Section 1 Marketing
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
What is marketing?
The term marketing covers all the
activities carried out by a business to try
to ensure that customers get what they
want, when and where they want it.
Try and identify what these activities
could include.
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
Market research
• Market research is a key marketing activity.
• It involves a business collecting and
analysing information about the market in
which it operates.
• A business might want to know the following:
o How many customers are there in the market?
o How often do they buy products?
o How much are they willing to pay?
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
Types of market research
• Primary research uses new data that is up to
date, but collecting it can be expensive and
time-consuming.
• Secondary research uses existing data
which is quicker to access but may not be
relevant.
• Quantitative research deals with large
amounts of data – what is happening?
• Qualitative research is more in-depth – why
is it happening?
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
Product trial
• Getting people to try a new product for the
first time can be difficult.
• This may be because they:
o are loyal to other brands
o have recently paid a lot for a rival
o have not heard enough about the product or
business to risk their money.
• Resistance may be overcome by advertising
heavily or gradually building up a reputation
by word of mouth.
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
Repeat purchase
• New products are unlikely to be profitable
unless customers buy them repeatedly.
• A high level of customer (or brand) loyalty
must be established.
• This is only likely if:
o the product matches customer expectations
o brand image = customer’s self-image
o the product offers value for money.
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
The product life cycle
• Claims that all products pass through the
same stages before they are withdrawn from
the market.
• These stages are:
– Introduction
– Growth
– Maturity
– Decline.
What do you think happens to cash flow as a
product passes through these stages?
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
The product life cycle
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
Extension strategies
• A firm might try to postpone or reverse the
decline stage of the product life cycle by
using an extension strategy.
• This might include any of the following:
o
o
o
o
o
o
Reduce the price.
Find new uses.
Widen the product range.
Change appearance or packaging.
Encourage greater use.
Make it better.
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
Product portfolio analysis
• Most businesses have a range of
products on sale (known as a product
portfolio).
• Their performance needs to be
examined regularly.
• This helps managers to decide where to
concentrate resources.
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
The Boston Matrix
• Categorises a firm’s products in terms of their market
share and growth of their market:
o Rising stars – high market share/high market
growth.
o Cash cows – high market share/low market
growth.
o Problem children – low market share/high market
growth.
o Dogs – low market share/low market growth
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
The Boston Matrix
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
Branding and differentiation
• Branding gives products a clear identity,
making them stand out from rivals (product
differentiation).
• Types of branding include family branding,
line branding and own label brands.
• Some products are so successful they
become global brands.
What are the key benefits and drawbacks of
creating a well-known brand?
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
Why do some products fail?
Some of the most common reasons
include:
o insufficient demand
o inadequate or ineffective market research
o failing to deliver product promises
o inappropriate pricing, promotion or
distribution
o targeting the wrong customers
o bad timing.
© 2009 Ian Marcousé and Naomi Birchall
EDEXCEL BUSINESS for GCSE
Now make sure you
understand…
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Boston Matrix
Branding
Differentiation
Extension strategy
Marketing
Marketing mix
Market research
Place
Primary research
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Product trial
Product life cycle
Promotion
Public image
Qualitative research
Quantitative research
Repeat purchase
Secondary research
Unique selling point
© 2009 Ian Marcousé and Naomi Birchall