3.1 Marketing, Competition and the Customer

1. The Role of Marketing

❌ Identify Customer Needs by finding out what products/services + prices customers want

❌ Satisfy Customer Needs in order to achieve sales.

❌ Maintain Customer Loyalty by building customer relationships. Cheaper to keep existing customers than gaining new ones.

❌ Gain Info. about Customers to meet their changing needs + keep good relationships.

❌ Anticipate Customer Needs by identifying new trends in demand or gaps in the market.

2. Market Changes

Why Consumer Spending Patterns Change

Market
✏ When buyers + sellers meet to exchange goods and services.

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

❌ Consumer tastes + Fashions change

❌ Changes in Technology

❌ Change in Incomes

❌ Ageing Populations

⭐ It's important for a business to keep up with the changes as inability to respond to customer needs could result in failure

⭐ 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.

Why some Markets become Competitive

❌ Globalisation - Products are increasingly sold around the world

❌ Transportation improvements - Easier to export products

❌ Internet - Consumers can buy from overseas markets

How to respond to Changes + Competition

❌ Maintain good customer relationships - Important in continuing to meet their needs.

❌ Constant Improvement of Products - Makes it different from competitors.

❌ Introduce new Products - This keeps the consumer's interest rather than competitors

❌ Keep Costs Low - Keeps prices low

3. Niche+Mass Marketing

Mass Marketing

Niche Marketing

✏ Where there is a very large number of sales of a product. e.g. soap, washing powder.

✏ A small, usually specialised segment of a much larger market. e.g. Rolex watches, designer clothes.

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

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)

Disadvantages


  • High levels of competition
  • High advertising costs
  • May not meet specific customer needs, leading to loss in sales

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)

✏ A sub-group of a whole market where consumers have similar characteristics/preferences

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