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4.1 THE ROLE OF MARKETING (Market Characteristics (Market size (Why…
4.1 THE ROLE OF MARKETING
Introduction
the management task that links the business to the customer by identifying and meting the needs of customers profitably
Contemporary Marketing Wired
by
Boone and Kurtz
; Marketing is the process of planning and undertaking the conception, pricing, promotion and distribution of goods and services to create and maintain relationships that will satisfy individual and organisational objectives
related management functions
market research
product design
pricing
advertising
distribution
customer service
packaging
Relationship with other business functions
Finance
this department need to fund increased promotion budget
Human Resource
additional support stuff would be required with appropriate skills
Operations
market research data would be used to determine preferences of consumers
additional output, inventories, supplies and despatches need to be organised by the operation function
Market Characteristics
Market size
Why important
a marketing manager can assess whether a market is worth entering or not
businesses can calculate their own share
growth or decline of the market can be identified
Measure
value of goods sold (revenue)
volume of sales (units sold)
the total level of sales of all producers within a market
Market growth
the % change in the total size of market over a period of time
Factors
economic growth
changes in consumer incomes
development of new markets
changes in consumer tastes
technological change
Competitors & Ease of Entry
ease of entry ; the lack of barriers for the establishment of new competitors in the market
high number of competitors / easier for new business to join market = more competition
Differentiated or Homogeneous Products
homo products ; goods that are physically identical or viewed as identical by consumers
Effect
less able to stand out from others
difficult to charge prices
Segmentation
dividing a market into distinct groups of consumers who share common tastes requirements
enables companies to target different groups of consumers
Marketing Approaches
market orientation
an outward-looking approach basing product decisions on consumer demand
requires market research and market analysis
benefits
effective market research would result in the reduction of failed new products
if consumer needs are being met, the products are much more likely to survive longer and make higher profits
constant feedback from customers allows the adaptation of the product
product orientation
an inward-looking approach that focuses on making products that can be made/have been made for a long time and trying to sell them
concentrate their efforts on efficiently producing high-quality goods
social marketing
considers demands of customers and the effects of the public society involved
implications
an attempt to balance three concerns
company profits
consumer wants
society's interest
may be difference in short-term wants and long-term society welfare
aim to identify consumer needs to satisfy them more efficiently compared to the competitors.
increase significant competitive advantage
benefiting society could charge higher prices from successful marketing strategy
Market Share & Leadership
market share
: the percentage of sales in the total market sold by one business
market leadership
: when a business has the highest market share of all firms that operate in that market
benefits of being a market leader
sales higher = higher profits
given most prominent position
given lower discount rate by stockers
most popular brands = attract consumers
importance
use popularity in advertising
market leaders have strong bargaining position with both suppliers and retailers
easier to employ high-class employees
banks and investors convinced = financing easier
Marketing Objectives
for-profit organisations
increase in market share
increase in total sales
increase in average number of items purchased per customer visit
increase frequency of loyal customer shops
increase in number of new customers
brand identity
increase in customer satisfaction
non-profit organisations
maximise revenue from trading services
increase recognition of the organisation by society
promote work and aims for organisation to a wide audience
Marketing Strategies
innovation
ethical considerations
cultural diffreneces
health