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4.1 THE ROLE OF MARKETING (MARKET CHARACTERISTICS (MARKET SIZE (Important…
4.1 THE ROLE OF MARKETING
Coordination with other business functions
HUMAN RESOURCES
Additional employees are likely to be required
OPERATIONS
The links between marketing and operations are vital
FINANCE
Fund the increased promotion budget
MARKET CHARACTERISTICS
COMPETITORS AND EASE OF ENTRY
The lack of barriers for the establishment of new competitors in a market
DIFFERENTIATED OR HOMOGENEOUS PRODUCTS
Goods that are physically identical or viewed as identical by customers
MARKET GROWTH
The percentage change in the total size of a market (volume or value) over a period of time
SEGMENTATION
Dividing a market into distinct groups of consumers who share common tastes and requirements
MARKET SIZE
Important for
Businesses can calculate their own market share
Growth or decline can be identified
Marketing manager can assess whether a market is worth entering or not
The total level of sales of all producers within a market
DIFFERENCES BETWEEN MARKETING GOODS AND SERVICES
Time for delivering the service
Deliverability
Building trust
Relationships
MARKETING APPROACHES
PRODUCT ORIENTATION
An inward-looking approach that focuses on making products that can be made
Benefits
Product-oriented business invent and 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
Considers not only the demands of consumers but also the effects on all members of the public
Implications
Considers long-term welfare
A significant competitive advantage
An attempt to balance three concerns: company profits, consumer wants, society's interests
Able to charge higher prices for its products
MARKET ORIENTATION
Benefits
The chances of newly developed products failing in the markets are much reduced
Consumer needs are more likely to survive longer and make higher profits
Constant feedback from consumers
An outward-looking approach basing product decisions on consumer demand, as established by market research
MARKET SHARE & MARKET LEADERSHIP
MARKET SHARE
The percentage of sales in the total market sold by one business
market share (%) = (firm's sales in time period / total market sales in time period) x 100
MARKET LEADERSHIP
When a business has the highest market share of all firms that operate in that market
Benefits
Retailers will be keen to stock and promote the best-selling brands
It might be sold to them with a lower discount rate
Sales are higher, higher profits
Importance
Market leaders are in a strong bargaining position with both suppliers and retailers
Recruitment of high-class employees is easier
Can be used in advertising and promotional material
Financing might become easier
MARKETING OBJECTIVES
The goals set by the marketing department to help the business achieve its overall objectives
Non-profit organisations
For-profit organisations
How marketing strategies evolve in response to changes in consumer preferences
healthy food
and less fried food
tablet computers
and fewer PCs
fuel-efficient cars
and fewer 'gas guzzlers'
informal business clothing
and fewer 'business suits