Transcript 4.1 The Role of Marketing

4.1 The Role of Marketing
Chapter 24
What is Marketing?
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The management task that links the
business to the customer by
identifying and meeting the needs
of customers profitably.
Get the right product at the right
price to the right place at the
right time.
What is Market Size?
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Total level of sales of all producers
within a market.
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Can be measured by volume of sales
(units sold)
Can be measured by value of sales
(total revenue generated)
What is Market Growth?
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The percentage change in the total size of
a market (in volume-units or valuerevenue) over a period of time.
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Growing markets may have many competitors
so profits may not be as high as expected.
The pace of growth
 may depend upon external factors
 may be affected by technology innovations
 may be slow because of a saturated market
What is Market Share?
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The percentage of sales in the total
market sold by one business.
Market share% =
firm’s sales for time period
total market sales for time period
Brand Leader is the company with the
highest market share.
X 100
Benefits of being Brand Leaders
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Sales are higher then competitors
Retailers want to stock your product
Discounts are less likely to be given
increasing profits
Brand leaders can take of advantage of
marketing opportunities as the “leader”
Name brand leaders:
Computers? Cell phones? Soda?
Shoes? Fast Food? Potato Chips?
Sports Clothing? Cars?
Marketing Strategies
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Different strategies are used for
different markets
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Consumer markets: markets for goods
and services bought by the final user of
the item
Industrial markets: markets
for goods and services bought by
businesses to be used in the
production process of other
products
Marketing to Business
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Will promote at industrial
exhibitions, trade shows, direct
selling
Meet the needs of each customer by
customizing products
Promote product as cost-saving or
investment
Technical promotions and literature
targeted to a knowledgeable buyer
Marketing to Consumers
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Marketing goods is different than
marketing services.
Marketing Services:
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Services are consumed immediately; off-peak
times need to be dealt with
Service quality must be right the first time as it
cannot be done over
More difficult to compare services between
companies, so promotion must be detailed and
informative
People (staff) must be trained well in providing
service
Marketing Approaches
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Market Orientation
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An outward-looking approach basing product
decisions on consumer demand, as established
by market research.
Product Orientation
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An inward-looking approach that focuses on
making products that can be made or have
been made for a long time – and then trying to
sell them
Market Oriented
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Requires market research to
determine what customer want to
buy
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Benefits:
New products less likely to fail
Product life span is likely to be longer
Continuing feedback from consumers
to keep product fresh
Product Oriented
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Businesses invent products they
believe will be useful and
consumers will want.
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Pharmaceutical and electronics
Produce high-quality goods that
consumers will value
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Safety equipment or gourmet foods
HL
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Asset-Led Marketing
Marketing strategy is based on the firm’s
existing strengths and assets instead of
what the customer wants.
No attempt to satisfy all customers in all
markets.
A corporation reviews their strengths
(including people, brands, image) and
only makes products that take advantage
of those strengths.
Levi Straus – only makes clothing
BMW – restricts its vehicles to the luxury
market and does not sell commercial
vehicles.
HL
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Social Marketing
Considers the consumer needs as well as
the society’s (public, stakeholders,
government, community, and natural
environment)
Cosmetic company does not support
testing on animals
Natural Sea brand of tuna is dolphin safe
Agriculture producers farm using organic
methods
HL
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Balance 3 things:
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Social Marketing
Company profits
Consumer wants
Society’s interests
Considers long-term welfare of the
community, not short-term profits
These products are not the cheapest
Business can have a competitive edge
when seen as socially responsible
Being socially responsible can be seen as
a unique selling point
Marketing Management Functions
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Market research
Product design
Pricing
Advertising
Distribution
Customer Service
Packaging
Marketing Plan
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detailed report on an
organization’s marketing strategy
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SMART objectives
(increase sales by 10% next quarter)
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Strategic plans
(steps needed to be taken to achieve objectives)
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Specific marketing actions
(which markets, by when, which methods of promotion)
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Budget
(how will the costs of the strategy be paid)