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4.1 The Role of Marketing (Market Characteristics (Market size can be…
4.1 The Role of Marketing
Introduction
Marketing
- the management task that links the business to the customer by identifying and meeting the needs of customers profitably - it does this by getting the right product at the right prices to the right place at the right time
Marketing does involve a number of related management functions
market research
product design
pricing
advertising
distribution
customer service
packaging
Marketing & its relationship with other business functions
1. Finance
- This department needs to fund the increased promotion budget.
2. Human resources
- additional employees are likely to be required if the additional marketing & promotion activity is successful. These eployees will be required in operations, administration and finance
3. Operatiions
- the links between marketing & operation are vital.
Market Characteristics
Market size
can be measured in two ways;
volume of sales (units sold)
or
value of goods sold (revenue)
The market size is important for 3 reasons:
A marketing manager can assess whether a market is worth entering or not.
Business can calculate their own market share.
Growth or decline of the market can be identified.
Market growth
- the % change in the toal size of a market (volume or value) over period of a time
Competitors & ease of entry
- the lack of barriers for the establishment of new competitors in a market
Greater number of competitors & easier for new ones to join a market, the ore price competition there will be.
Differentiated or homogenous products
- goods that are physically identical or viewed as identical by consumers
cannot be distinguished between even though they may come from different suppliers.
Segmentation
- dividing a market into distinct groups of consumers who share common tastes and requirements
Target marketing
recognises the diversity of customers & does not try to satisfy them all with the same good & service. The definition for
target marketings
is focusing marketing activity on particular segments of the market
Mass marketing
(opposite of target marketing) - selling to the whole market using a standardised product & the same marketing activities.
Marketing Approaches
Market orientation
- an
outward
-looking approach basing product decisions on consumer demand, as established by market research
benefits
The chances of newly developed products failing in the market decreased
If consumer needs are being met with appropriate products, then they are likely to survive longer & make higher profits comapred to product-led approach.
Constant feedback from customers
Product orientation
- an
inward
-looking approach that focuses on making products that can be made or have been made for a long time - & then trying to sell them
product-led marketing still exists and these following instances help to explain why:
1.Product-oriented business invent & develop products in the belief that they will find consumers to purchase them.
Product-oriented business concentrate their efforts on efficiently producing high-quality goods.
Social marketing
- this approach considers not only the demands of consumers but also the effects on all members of the public (society) involved in some way when firms meets these demands
implications
It is an attempt to balance three concerns: company profits, consumer wants, society's interests.
May be a difference between short-term consumer wants ( low prices) and long-term consumer & society welfare. Social marketing consider long-term welfare.
Businesses should still aim to identify consumer needs & wants & to satisfy these more efficiently than competitors do
Using this concept could give a business a significant competitive advantage.
A ocial marketing strategy, if successful, could lead to the firm being able to charge higher prices for its prodcts as benefiting society becomes a unique selling point.
Difference between commercial marketing & social marketing
commercial marketing
- satisfying customers' need for profit.
Social marketing
- aims to satisfy custimer needs