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Unit 3 Marketing Part A, Chapter 16: What is marketing?, : - Coggle Diagram

- - - - 1) Management problem identification:
        
        What size is the potential market for this business?
        
        Why are our sales falling?
        
        How can we break into the market in another country?
        
        How can we most effectively meet the challenge of new competitors?
        
        What customer groups buy our products and what groups tend not to buy them?
      - 2) Research objectives
        
        How many people are likely to buy our products in country X?
        
        If the price of good Y is reduced, how much will this increase sales volume?
        
        If we advertise this product on television, what will be the likely impact on sales volume and market share?
        
        Which new product idea, A or B, is likely to generate more sales?
        
        What would be the impact of new packaging on sales of our products?
        
        Why are consumer complaints about our products increasing?
      - 3) Sources of data - primary and secondary research
        
        Primary research (field research)
        
        Quantitative Research
        
        Test marketing
        
        Consumer surveys
        
        Observation and recording
        
        Qualitative Research
        
        Focus groups
        
        Advantages & DIsadvantages of primary research:
        
        Advantages:
        
        Directly relevant to the business
        
        Competitors do not have access to the findings.
        
        up-to-date data is obtained
        
        Disadvantages:
        
        Often expensive
        
        Results may be misleading is the sample size is too small
        
        Time-consuming
        
        Secondary research (desk research)
        
        Sources of secondary data:
        
        Local libraries and local government offices
        
        Trade organisations
        
        Governement publications
        
        Market Intelligence reports
        
        Newspaper reports and specialist publications
        
        Internal company records
        
        Internet
        
        Pros and Cons of Secondary research:
        
        Pros:
        
        Identifies the nature of the market.
        
        Obtainable quickly.
        
        Often obtained very cheaply.
        
        Allows comparison of data from different sources.
        
        Cons:
        
        Might be out-of-date.
        
        Might not be entirely suitable.
        
        Might not be accurate.
        
        Might not be available for completely new product developments.
    - - Probability sampling
        
        Systematic sampling
        
        Stratified sampling
        
        Simple random sampling
        
        Quota Sampling
        
        Cluster sampling
      - Non-probability sampling
        
        Snowball sampling
        
        Judgemental sampling
        
        Convenience sampling
        
        Ad hoc quotas
    - - 2) To predict future demand changes
      - 3) To explain patterns in sales of existing products and market trends
      - 1) To reduce the risks associated with new product launches
      - 4) To assess the most favoured designs, flavors, styles, promotions and packages for a product.
    - - What to ask?
        
        Closed questions
        
        Open questions
    - - Sampling bias
      - Other forms of bias
      - Questionnaire bias
    - - Questionnaires can be sent out, answered and returned over the internet.
      - Firms can also access the vast quantity of information that electronic data retrieval methods offer them.
      - Increasingly, businesses are turning to electronic means to gather their data their marketing strategies require.
    - - Even gathering secondary research data cost time and money.
      - Primary research can be more expensive than secondary.
      - Market research is not free.
    - - Line graphs
      - Bar charts
      - Pie graphs
      - Histograms
      - Tables
    - - Median
      - Frequency data
      - Mode
      - Grouped frequency data
      - Arithmetic mean
    - - The range
      - Inter-quartile range
- - - - Place or mechanism where buyers and sellers meet to engage in exchange
      - Group of consumers that are interested in the product, has the resources to buy the product and is permitted by the law to purchase it
    - - Wants: Goods or services that fulfil the needs of individual consumers
      - Needs: Basic requirement that an individual wishes to satisfy. Include: Desires for knowledge, recognition, affection, self-esteem and self-expression
    - - Value is not same as cheapness
      - Product is of good value when it provides satisfaction at what is thought at what is thought as a reasonable price
  - - - Marketing objectives: the goals set for the marketing departments to help the business achieve its overall objectives
      - Marketing strategy: Long-term plan established for achieving marketing ovjectives
        
        Examples
        
        Penetrating existing markets more fully- selling more to existing and new customers
        
        Entering new markets e.g in other countries
        
        Developing new or updating existing products
      - Examples
        
        Market share - perhaps to gain market leadership
        
        Total sales ( value or volume - or both)
        
        Average number of items purchased per customer visit
        
        Frequency that a loyal customer shops
        
        Percentage of customers who are returning customers
        
        Numbers of new customers
        
        Customer satisfaction
        
        Brand identity
      - It should
        
        Fit in with overall aims and missions of the business ( reflect aims of whole organisation and aid to achieve the aims of organisation)
        
        Be determined by senior management
        
        Be realistic, motivating, achievable, measurable and clearly communicated to all departments in the organisation
      - Important because
        
        Provide a sense of direction for marketing department
        
        Progress can be monitored against the targets
        
        Can be broken down into regional and product sales targets to allow for management by objectives
        
        Form the basis of marketing strategy. Marketing objectives will have crucial impact on marketing strategies adopted, as without a clear vision of what the business hopes to achieve for its products, it will be pointless discussing how it should market them
  - - - Finance will use sales forecasts of marketing to construct cash-flow forecast and operational budgets
      - Finance ensure that necessary capital is available to pay for agreed marketing budget for example for promotion
    - - HR use sale forecasts to devise workforce plan for all departments that might be affected by new marketing strategies
      - HR ensure that there are enough qualified and experienced staff to produce and sell the increase in sales planned for marketing department
    - - Market research data is a key role in new product development
      - Operations use sales forecasts to plan for capacity needed, purchase of machines and stocks of raw materials required for new output level
  - - - Most businesses today are market orientation or market led
      - Market orientation: An outward-looking approach basing product decisions on consumer demand, as established by market research
      - Requires market research and market analysis to indicate present and future consumer demand
      - Consumer is put first
      - Produce what customer wants
      - Benefits
        
        Chances of newly developed products failing in the market are much reduced (not eliminated)
        
        Likely to survive longer and make higher profits than those that follow a product-led orientation (because consumer needs are being met with appropriate products
        
        Constant feedback from consumers (allow the product and how it's marketed to be adapted to changing tastes before it's too late or competitors "get their first"
      - Limitations
        
        Trying to offer choice and range so that every consumer need is met can be expensive
    - - Product orientation: An inward-looking approach that focuses on making products that can be made - or have been made for a long time - and then trying to sell them
      - Product-oriented businesses invent and develop products in belief that they will find consumers to purchase them
      - If businesses produce an innovative product of a good-enough quality, then it will be purchased
      - Concentrate efforts on efficiently producing high-quality goods
    - - Asset-led marketing: An approach to marketing that bases on the firm's existing strengths and assets instead of purely on what the customer wants
        
        Also based on market research
        
        Doesn't attempt to satisfy all consumers in all markets
        
        Consider it own strengths in terms of people, assets and brand image
        
        Make only products that use and take advantage of those strengths
        
        Examples
        
        Levi Strauss restricts it product to clothing and accessories-but it does offer a wider range of clothing than ever before with the addition of its Dockers brand
        
        BMW does jot enter the commercial-vehicle or motor-caravan markets- but it does use it brand strength to market sports and luxurious 4X4 SUVs
  - - - Company profits
      - Customer wants
      - Society interests
  - - - Varies with price
      - Quantity bought increase with price fall and decrease with price increase
      - Level of demand can varies
        
        Change in consumer's incomes
        
        Changes in the price of substitute goods and complementary goods
        
        Change in population size and structure
        
        Fashion and tastes change
        
        Change in advertising and promotion spending
      - All of the changes can lead to new demand curve
        
        Example: Demand for holidays will increase to D1 after an increase in consumer's incomes
    - - Varies with price
      - Firms will be more willing to supply a product if the price rises and will supply less with price falls
      - Level of supply product can vary
        
        Costs of production e.g change in labour and raw materials costs
        
        Taxes imposed on suppliers which raise their costs
        
        Subsidies paid by government to suppliers which reduce their costs
        
        Weather conditions and other natural factors
        
        Advance in technology to make cost of production lower
      - Changes lead to new supply curve, e.g supply of rice will be reduced after very poor weather in major growing areas
  - - - Local markets (Lowest sale potentials)
      - Regional markets
      - National markets
      - International markets (Highest sales potentials)
    - - Volume of sales (units sold)
      - Values of goods sold (revenue)
      - Market size: Total level of sales of all producers within a market
      - Important because
        
        Marketing manager can access whether the market is worth entering or not
        
        Firms can calculate own market share
        
        Growth or declined of the market can be identified
    - - Base on many factors
        
        General economic growth
        
        Change in consumer incomes
        
        Development of new markets and products ( take sales away from existing one)
        
        Change in customers tastes
        
        Technological changes
        
        Market is saturated or not
      - Market growth: Percentage change in the total size of the market (volume or value) over a period of time
    - - Product with highest market share --> brand leader
      - Market share: Percentage of sales in total market sold by one business
      - Formula: (Firm's sales in a period of time/ Total market sales in a period of time) * 100
      - Benefits of high market shares (especially brand leader)
        
        Sales are higher than those of any competing business --> could lead to higher profit
        
        Retailers keen to stock and promote best selling brands, get the best position in shops
        
        Smaller brand have to lower the price to have sales like 10-15% discount
        
        "Brand leader" can be use in advertising and promotion. Consumers are keen to buy "the most popular" brand