marketing, competition and the customer
the marketing department
sales department
responsible for the sales of the product
will usually have separate sections for each region to which the product is distributed
market research department
responsible for finding out customers' needs, market changes and the impact of competitors' actions
will report to the marketing director to make important decisions about development of new products, pricing levels, sales strategies and promotion strategies
promotion department
deals with organising the advertising for products
it arranges for advertisements to be produced
decides what type of promotion that will be included in campaigns
decides which type of advertising media will be most effective to use because there will only be a certain amount of money to be spent
distribution department
transports product to the market
the role of marketing
identify customer needs
satisfy customer needs
maintain customer loyalty
gain information about customers
anticipate changes in customer needs
finding out what products or services customers want
find out prices they are willing to pay
where and how they want to buy these goods
what after-sale service they might want
so they can achieve sales of their goods or services
failure to satisfy the customers will lead to failure of business
building customer relationships
keeping close links and finding out if products or services are continuing to meet their needs
to meet their changing needs and to establish a long-term relationship with them
by identifying new trends in customer demand or gaps in the market so that the business can produce goods or services which are not currently available
understanding market changes
why consumer spending patterns change
consumer tastes and fashion change
changes in technology
changes in income
ageing populations
fashions may change for clothes and so consumers may want different styles of clothes to those they wore last year
with new products being developed, such as iPads or notebooks, sales of standalone computers have fallen in many countries
new products means that old products do not have high sales anymore
if an economy has high unemployment then many consumers will buy cheaper products
if the economy then grows and unemployment falls the sales of more expensive products will increase
the age structure of the population in may countries is changing to a greater percentage of older people
why have some markets become more competitive
globalisation of markets has meant that products are increasingly sold all over the world
transportation improvements have meant that it is easier to get products from one part of the world to another part of the world
internet/e-commerce has meant that consumers can search for products and buy from overseas markers
how can businesses respond to changing spending patterns and increased competition
maintain good customer relationships
to meet customer needs and it also provides market research information about customers
keep improving its existing product
bring out new products to keep customers' interest
keep cost low to maintain competitiveness
by making goods it sells very different from those produced by competitors the business will become well known for differentiated products
this will help maintain or even increase their market share
as this should help keep low prices
what is meant by a market?
mass marketing
where there is a very large number of sales of a product
Advantages
the sales to these markets are very large
the firm can benefit from economies of scale
risk can be spread, as often as the business will sell several different variations of products to the mass market, if one variety of the product fails, then the other products may still sell well
opportunities for growth of the business due to large potential sales
Disadvantages
high levels of competition between firms
high cost advertising
standardised products or services are produced and so may not meet the specific needs of all (potential) customers, therefore leading to lost sales
niche marketing
a small, usually specialised, segment of a much larger market
Advantages
small firms are able to sell to niche market as large firms may not have identified them but concentrated on the mass markets instead. This may avoid competition from larger businesses
needs of the customers can be focused on and therefore targeted by the firm in a niche market
Disadvantages
niche markets are small and therefore have a limited number of sales, which means only small business can operate in these markets
often businesses in a niche market will specialise in just one product. this means that if the product is no longer in demand the business will fail as the business does not have spread risks
market segment
when the market is broken down into sub-groups which share similar characteristics
can help a business to
make a 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, because of cost-effective marketing
identify a market segment which is not having its needs fully met, and therefore offer opportunities to increase sales
ways it can be segmented
socio-economic group
income groups can be defined by growing people's jobs according to how much they are paid
age
products in different age groups will not be the same
religion/location
in different regions of a country, people might buy different products
gender
some products bought only for women or by only men
use of product
for example, cars can be used by consumers for domestic or business use. the advertising media and promotions methods used will differ
lifestyle
for example, a single person earning the same income as a married person with three children will spend that income differently, buying different products