Transcript AnIntroductiontoMarketing[1]

An Introduction to Marketing
Module 4
A2 Business Studies
According to Peter Drucker…
“Marketing is not a function, it is the business
seen from the customer’s pointer of view.”
Objectives
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Definitions & Assumptions
An overview of Marketing
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The need for marketing
Market knowledge
Where do you start?
Segmentation Analysis
Choosing your market strategy
Integrated marketing
Definitions & Assumptions
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Marketing is defined as:
The process of learning about your customers
& competitors, so that you can provide the right
products at the right price in the in the right
place, promoted in the right way to achieve
your business objectives
An overview (1)
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What does a business need to understand about its
customers?
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Needs
Wants
Habits
Attitudes
In a small business, the owner may have direct contact
with his or her customers, and fully understand the
above
A larger company may not have this closeness, and
need to follow a different approach to marketing.
An overview (2)
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For a large firm, market knowledge consists of
five main elements:
Distribution
Product
image
Market
knowledge
Customer
habits
Size of
market
Competitors
An overview (3)
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The size of the market:
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Competitors
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The value of purchases made by all the customers
Market share, brand image, strengths & weaknesses
Customer habits
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Understanding the existing customers’ habits, likes, & dislikes.
Their image of your product compared with rivals
How loyal they are
An overview (4)
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Product image
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Understanding the image and attitudes buyers of
rival products have towards yours
Why are they not buying your product?
Distribution
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Knowing the key distribution methods and outlets
Where do you start?
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Facts and figures can be gained easily enough,
however this an expensive and time
consuming activity
Gaining a genuine psychological
understanding of the consumer is particularly
difficult, requiring a much less black or white
approach
Segmentation Analysis
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A method of analysing the market place after having
acquired a strong market knowledge.
Involves identifying the key characteristics within the
market
Often reveals important sub-sectors in the market
May highlight the different needs of consumers within a
sub-group, which could then lead to a new product
being identified.
Segmentation Analysis (2)
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Demographically - according to the age structure of
the population
Geographically - by country or region or area
Behaviouristically - according to the nature of the
purchase, the use the product is put to, the loyalty to
the brand and so on
Benefit - according to the use and satisfaction gained
by the consumer
Socio-economically - according to social class and
income levels
Case Study: ICI Fertilisers
How to decide what to do –
Choosing your strategy…
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Important to have clear objectives
The objectives must be optimistic, but
realistically achievable
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E.g. If the firm’s objective is to increase market
growth from 15% to 25%, it is likely some serious
investment in equipment and property is required. If
the increase in demand never comes, the
company’s security would be jeopardised.
How to decide what to do –
Choosing your strategy…
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After appropriate objectives are set, the
organisation must identify the right strategy
Often identify two or three alternative
approaches, and then use market research to
help make the choice
Potential strategies…
Marketing Objective
Possible Marketing Strategies
Increase
the market share
from 15% to 25% in 3 years
Reposition
To
increase the proportion
of sales coming from new
products to 30%
Increase
Reduce
Relaunch
the proportion of
over 60s among our market
from 40% to 25% over the
next 2 years
Brand X into the mass market
sector by cutting its price
Launch new,upmarket high-price brands in
each of next three years
new product development budget
by 50% and the market research budget by
30%
the our product with livelier,
younger packaging ad advertising
Use direct mail to offer free samples to tose
who have jut qualified to vote
Keys to successful marketing
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Jump before you’re pushed
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Exploit your assets
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Successful marketing is about anticipating change
not just reacting to it
Asset-led marketing has the greatest level of long
term success
Keep aware of consumer psychology
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Offering price cuts and discounts may be
detrimental to the brand’s image
Integrated marketing
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When a marketing decision is made, three
questions must be asked:
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Can we afford it?
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Can we produce it?
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Do the costs outweigh the benefits?
Is the firm able to cope with an increase in demand?
What knock-on effects may it have?
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Could the brand/reputation suffer?
An evaluation
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Marketing lies at the heart of every organisation,
because firms have to be focussed on their customers
if they want to succeed.
Cynicism exists…
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Marketers essentially persuade people to buy things that they
do not need
This extends to companies such as Coca-Cola and Nestlé
persuading people in developing countries to part with their
small income on Western brands
Conversely…
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The range of goods in a supermarket is a tribute to successful
marketing, it could be argued to have enriched people’s lives.