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3.1 Marketing, Competition and the Customer (1. The Role of Marketing (…
3.1 Marketing, Competition and the Customer
1. The Role of Marketing
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:red_cross: Maintain Customer Loyalty by building customer relationships. Cheaper to keep existing customers than gaining new ones.
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Results of Successful Marketing
- Raise customer awareness of business
- Increase sales (revenue)
- Increase/maintain Market Share
- Improve/maintain product's image
- Target new market segments
- Enter new markets e.g. abroad
- Develop new products
2. Market Changes
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:star: As customer needs change, businesses will have to research and respond to the different needs. Failure to do so can end in the business failing.
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3. Niche+Mass Marketing
Mass Marketing
Advantages
- Possibility of large sales
- Business can benefit from economies of scale
- Spread risk, other products could still sell well if one fails.
- Opportunity of growth as there's large sales
Disadvantages
- High levels of competition
- High advertising costs
- May not meet specific customer needs, leading to loss in sales
Niche Marketing
Advantages
- Avoid competition from larger businesses
- Products are more specifically targeted towards customers
Disadvantages
- Limited # of sales, only small businesses can operate
- Only specialise in one product, business may fail if product fails (no spread risk)
4. Market Segments
Ways to Segment a Market
- Socio-economic group
- Age
- Region/location (rainy areas vs dry areas)
- Gender
- Use of product (e.g. cars for domestic or business use
- Lifestyle (e.g. married/single)
Benefits of Segmenting the Market
- More cost effective marketing, targets markets more specifically
- Higher sales+profits due to cost effective marketing
- Identifies segments who's needs aren't fully met (gaps in the market) and meet those needs to increase sales
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:star: It's important for a business to keep up with the changes as inability to respond to customer needs could result in failure
:pencil2: Where there is a very large number of sales of a product. e.g. soap, washing powder.
:pencil2: A small, usually specialised segment of a much larger market. e.g. Rolex watches, designer clothes.
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