Marketing

1. Marketing National 4/5 Business Management 2015-16

2. What is Marketing? • Marketing is more than just advertising and selling. It involves identifying consumers’ needs and wants and meeting them in such a way that the producer makes a profit.

3. The Role of Marketing • Help a business achieve increased market share – attract new customers. • Ensure that the product, price, promotion and place for sale are correct and meet the customers’ needs. • Increase sales and therefore maximise profits.

4. Market Research • In order to be successful, you need to know what your customers want. • To find this out we use Market Research. • There are 2types of Market Research: • Field Research • Desk Research CLIP

5. Field Research • This involves gathering primary information; this is first-hand information. • We can find out this information through doing: • Surveys/Questionnaires • Interviews • Focus Groups • Test Marketing • Observations

6. Surveys/Questionnaires • These are questionnaires that are given to customers through 4 different methods: • Postal • Telephone • Online • Face to Face • Surveys are relatively cheap to do and can be given to a large number of people • However response rates to them are very low

7. Interview • This is when a trained interviewer asks someone (one on one) a set of questions. • Candidates can give detailed answers and follow up questions can be asked. • This is an expensive method (trained interviewer) and time consuming to conduct.

8. Test Marketing • This is when consumers are given products to trial and feedback their opinions. • This allows effective feedback to be gathered and changes can be made to the product. • However there is no guarantee the product will be a success.

9. Focus Group • This is when a group of people get together to discuss a product/service. • This allows for a wide variety of opinions to be gathered. People are often more honest. • However some members can dominate the group.

10. Observation • This is when a group of people are observed in a certain situation. This can be done overtly or covertly. • It allows companies to gather information on people’s behaviours and attitudes. • Often people do not want to take part in being observed by others.

11. Field Research Advantages • it is specific to your needs • it is accurate • it is up-to-date Disadvantages • time consuming to collect • expensive to collect (training)

12. Desk Research • This involves gathering secondary information, which is gathered from an external source. • Information can be gained through: • Newspapers • the Internet eg competitors’ websites • Government Statistics • Market Research Agencies eg MORI

13. Desk Research Advantages • less time consuming • less expensive • wide range of sources Disadvantages • information is not specific to your needs • cannot be sure about accuracy • information may be out of date • may not be objective

14. Market Segmentation • A market is made up of different types of consumers each with their own needs and wants. • They are grouped into segments, so that companies can tailor products for each group.

15. Why Target Marketing? • Products can be made specific to the customers’ needs. • The promotion, price and place can be tailored to the target market and increase their chances of sales.

16. Market Segmentation Groups • gender • religion • area • age • education level • social class • political persuasion • family structure

17. The Marketing Mix (4P’s) Product Price Promotion Place

18. Product – Product Development • Idea – The idea has to be decided upon and worked through to see if it is viable. • Analyse – Conduct Market Research to see if customers would be interested. • Prototype – Develop a first draft of the product. • Test – The product should go through significant testing in the company and with consumers. • Launch – Once changes have been made the product can be launched on to the market.

19. Product Lifecycle • Products pass through certain stages of development during their existence. • This is called the Product Lifecycle. • The length of a product’s lifecycle can vary depending on the product.

20. Product Lifecycle Maturity Decline Growth Introduction

21. Product Lifecycle - explained • Introduction • product is launched onto the market; advertising and promotion begin; sales are increasing slowly. • Growth • as product becomes well-known through word of mouth, sales increase rapidly. • Maturity • product is well-established, sales reach their peak and start to level off. • Decline • sales fall as demand decreases. Product may be withdrawn from the market.

22. Extension Strategies • A company can extend the lifecycle of a product by injecting new life into it, using extension strategies. • This can be done through altering one or more of the 4P’s: • Product – altering packaging, new features • Price – changing the price • Promotion – new promotion, special offers • Place – changing location sold e.g. Internet

23. Extension Strategy Extension Maturity Growth Introduction

24. Product - Branding Branding is an expensive process but it brings many tangible rewards if a business gets it right. It is a product that is seen in the eyes of the consumer as different from other similar products (unique).

25. Product - Branding Benefits Costs Huge initial financial outlay High marketing costs Counterfeit goods Own Brands • Can charge a premium price • High awareness • Perceived high quality • Easier to launch new products

26. Own Brands • Established brands are under increasing pressure from cheaper ‘own brands’. • Consumers are increasingly more aware of these brands. • Supermarkets have seen an increasing growth in own brand sales.

27. Price • Your price should appeal to consumers, however, consumers look at pricing in 2 ways: • if it is too low, they think that the quality may be poor • if it is too high, they will think it is not worth the money

28. What Price? • The price for a product should be based on what the customer is prepared to pay: • Competitors’ prices • Position of product in the PLC • Cost of manufacture • Time of year • Profit level expected • Suppliers’ prices • Point of sale • State of the economy • Governmentpressure

29. Promotion • There are 3 main types of promotion: • Advertising • Sales Promotion • Public Relations

30. Promotion - Advertising Advertising aims to be either: • Informative or • Persuasive

31. Promotion - Advertising Types of Advertising include: • Print – Newspapers/magazines • Broadcast – TV/Radio/Cinema • Outdoor – Billboards

32. Promotion – Sales Promotions These are methods employed for a limited time to increase consumer demand: • Buy one get one free (BOGOF) • Discounts e.g. 10% off • Competitions • Free gifts • Product trials • Point of sale advertising egposters displaying special offers

33. Promotion – Sales Promotions • Direct Mail – This is in the form of mail delivered to your address, promoting a product or service. Often referred to as ‘Junk Mail’. • Personal Selling – Involves salesmen coming to homes to sell a product. It may be something that requires demonstration or explanation

34. Promotion - Technology • Technology has seen a huge rise in the different ways in which companies can promote: • Website • Email • QR Codes • Apps • Text Messaging

35. Promotions – others Other types of promotion include: • Product placement – products appear on TV/Film • Product endorsement – a celebrity promotes it • Sponsorship – of a sport or TV programme

36. Promotion – Ethical Marketing • Companies must ensure that they promote their products in an ethical way. • Promotions should be honest and not make false claims • Vulnerable groups should not be targeted with inappropriate promotions e.g. children

37. Promotion – Public Relations (PR) The PR department will aim to enhance the organisation’s image. They will deal with the: • Press • Government • Public Activities they take part in include: • Press statements/press conference • Charitable donations • Customer care

38. Place • This is where the product/service is available for sale.

39. Place – Factors affecting choice • There are a number of factors which will determine how and where a company sells its products: • Competition – where they are located and method of distribution used. • Resources – how close are resources needed to produce products • Cost of premises – in/out of town • Government incentives – they may give grants for locating in a certain area • Nature of the product - is it perishable; how quickly does it need to reach the customer?

40. Distribution Methods - Road Advantages Disadvantages Can’t transport many large products Delays due to weather, traffic, roadworks • Cheaper than other methods • Customers receive products direct to their door

41. Distribution Methods - Rail Advantages Disadvantages Will need to be transported from the train to the company • Can transport many large products • Faster method of transport than others

42. Distribution Methods - Air Advantages Disadvantages Most expensive method. Products need to be transported from the airport • Fastest method from one country to another • Large quantities of small products can be sent

43. Distribution Methods - Sea Advantages Disadvantages Most time consuming method. Products need to be transported from the dock • Huge quantities of large products can be transported • Can be transported across the world

44. Marketing & ICT • Marketing has been significantly enhanced with the rapid rise in the use of ICT. It can be used to enhance marketing in a number of ways: • Loyalty Cards • E-Commerce • Social Media

45. Marketing & ICT – Loyalty Cards • Loyalty Cards have enabled companies to collect a vast amount of information on customers. • They can gather information on what we buy, when we buy, and how much we spend. • It is an excellent market research tool. • Information will be stored on a computer database.

46. Marketing & ICT – E-commerce • The surge in online shopping has been huge. • A lot of businesses will either operate solely online or at least have an e-commerce facility for customers to purchase goods or services. • Advantages • Can buy products 24/7 from home • Can compare, so possibly cheaper • Cheaper for business to operate as less staff and space needed.

47. Marketing & ICT – Social Media • One of the biggest technological rises has been in Social Media. • Companies will ensure that they operate on various networking platforms to advertise to and keep in touch with consumers.