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Chapter 10 (The Role of Marketing (Identify Costumer Needs, Satisfying…
Chapter 10
The Role of Marketing
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- Raise customer awareness of a product/service of the business
- Increase sales revenue and profitability
- Increase or maintain market share
- Maintain or improve the image of products or a business
- Target a new market or market segment
- Enter new markets at home or abroad
- Develop new products or improve existing products
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Mass marketing
Advantages are:
- The sales to these markets are very large.
- The firm can benefit from economies of scale.
- Risks can be spread, as often the business will sell several different variations of products to the mass market, and if one variety of the products may still sell well.
- Opportunities for growth of the business due to large potential sales.
Disadvantages are:
- High levels of competition between firms.
- High costs of advertising.
- Standardised products/services are produced and so may not meet the specific needs of all customers /potential customers, therefore leading to lost sales.
Niche Marketing
- Small firms are able to sell to niche markets as large firms may not have identified them but concentrated on the mass markets instead,this may avoid competition from the larger businesess.
- The needs of consumers can be focused on and therefore targeted by the firms who aim to meet the needs of the mass market rather than the needs of the4se specific customers.
However:
- Niche markets are small and therefore have a limited number of sales.
- Often business in a niche market will specialise in just one product. This means if the product is no longer in demand the business will fail.
Market Segments
Segmenting a market can help a business to:
- Make marketing expenditure cost effective by producing a product which closely meets the needs of these customers and only targeting its marketing efforts on this segment.
- Enjoy higher sales and profits for the business.
- Identify a market segment which is not having its needs fully met, and therefore offer opportunities to increase sales.
Ways of segmenting a market:
- By socio-economic group
- By age
- By region/location
- By gender
- By use of the product
- By lifestyle
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