Chapter 11: Marketing
Marketing can be described as all activities that have an impact on the image of the business and the customer's decision either to buy or not to buy the product or service based on different experiences relating to the business.
Definition: making the right product available in the right place at the right time and at the right price.
Important concepts relating to marketing
The Market
Product-orientated approach to marketing:
Market-orientated approach to Marketing:
Emphasis is on on-going market research to timeously identify changes in consumer needs and wants. These businesses invest large amounts of time and money trying to understand the behaviour of consumers and how best they would be able to meet the needs/wants of these consumers. A product/service is then developed to satisfy these needs/wants
Any place(physical or electronically) where goods/services are bought and sold by the target market(portion of the population that feels product will satisfy a need)
Business concentrates on skills, knowledge and systems needed to produce a specific product. This type of business will develop a product and then look for a market for the product.
The aims of the marketing function:
Creating and maintaining a competitive advantage for the business which will help to increase the market share
Developing new products/services or improving the current offering may help to broaden the target market
Identifying new markets for the business(locally and/or globally) will ensure the business has the opportunity to grow and improve profitability
The Marketing process
Marketing involves all activities that are aimed at developing and maintaining a competitive advantage through understanding the current needs of the target market and predicting future trends in the market place in order to engage in the ongoing development of products and services to satisfy future needs of the target market
Market research and development
Starts with doing market research to understand behaviour patterns of consumer and their expectations
Could involve testing product/service in the market, collecting feedback from customer to improve product/service or further develop product/service
Research process helps to understand expectations of consumers
The product/service and the demands in terms of the packaging
The price people are prepared to pay
Where the target market wants to access the product/service(place) and preferential channels of communications to receive information about the product/service offering.
Promotion: Informing the target market about the product/service or brand that is offered by the business
Logistics/distribution: The movement of product/service to ensure that the product/service reaches the desired market on time
Sales: Refer to the process of transferring ownership of the product from the business to the customer
Understanding Market Segmentation
Dividing the overall market into different groups in order to focus the business's marketing resources on customers who have similar characteristics and therefore similar wants and needs
To identify and understand the chosen segment, market research needs to be carried out.
A market can be segmented based on variety of criteria such as:
Income groups
similar ages
Geograpical regions
gender
lifestyle
product use
cultural
The idea is to create a market that is big enough to achieve sufficient returns on investments by combining some of these characteristics. for example Debonairs:
Will focus it's marketing resources on getting the message to people in an income bracket who can afford to eat takeaways
They will look at people with a lifestyle who would find takeaways attractive and enjoyable
They will frequently remind these consumers of the convenience of the product, because it is delivered to their doorstep
If a particular Debonairs is located in a geographical area where there is a large number of people of a certain cultural grouping(e.g. Jewish, community), they will make sure their advertisements emphasize that all pizzas are Kosher
Market segmentation could also lead to identifying possible gaps in the market which are not yet fulfilled, leading to potential product/service development which could improve the business's success