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Unit 3 -- Marketing - Coggle Diagram

- - - - This is data that is collected by the business.
      - Examples
        
        Surveys
        
        Questions
        
        Focus groups
      - Benefits and negertives
        
        Benefits
        
        Focused
        
        Private
        
        Deatailed
        
        Negertives
        
        Time consuming and costly.
        
        Risk of survey bias.
        
        Sampling may not be represenative.
    - - This is data that is collected by a seccond party such as a market research business or non-businesses such as the ONS.
      - Examples
        
        ONS
        
        Minttel (a market research business).
        
        International groups such as the ILO (International Labour Organisation).
      - Benefits and negertives
        
        Benefits
        
        Oftern free and easy to access.
        
        Good source of market insight.
        
        Quick and easy
        
        Negertives
        
        Can become out of date.
        
        Not tailored to business needs.
        
        Useful ones can be very expensive.
  - - - Random -- this is where a business selects people from the general pulic with no attempts to control who is in the sample. This means that everyone has an equal chance of being selected.
      - Quota -- this is where the population is divided into subgroups before a judgement is made in selectng represenatives of that sub-group.
      - Stratified -- the population is diveded into sub groups and respondents are randomly selected from these sub groups.
    - - Business can't get the opions of the entire population so this enabes them to estimate people's views.
      - The value of sampling is dependent on:
        
        Size of sample
        
        What sort of sample was done
        
        Sample technique
  - - - When one variable geos up, the other variable also increases.
    - - When one variable geos up, the other variable geos down.
    - - This is where there is no apperant link between the two variables.
  - - - A simple method of forecasting
      - Not much data required
      - Quick and cheap
        
        Particullary good for small businesses
    - - Unreliable if historic data changes too much
      - Assumes past trends will contuine into the future
      - Ignores qualative factors such as changes in taste and fashion
  - - - Size of sample
      - Sampling technique
      - Reasearch method
      - Expertise of people doing the sampling
  - - - PED -- this measures the levels in which a change in a products price will impact its demand.
      - Formula
        
        % change in quantity demanded / % change in price
      - Interpreting PED
        
        If the value of PED is more then 1 then a product is price elastic meaning changes in price will affect changes in demand.
        
        If the value of PED is less then 1 then a product is price inelastic and is unlikely to see a change in demand when prices change.
        
        If the value of PED is execatly 1 then a product is unitary price elasticity, which means that the change in price = change in demand.
      - Impacts on PED
        
        Brand stength
        
        Strong brand immage and loyal customer base will make the product less price elastic.
        
        Necessicity
        
        If people need a product then it will be less price elastic (despite food prices increasing this year and last demand has remained the same).
        
        Availability
        
        More competition makes a product more price elastic as consumers can just move to a competitor.
        
        Time
        
        Price elasticity is lower durring the short term then it is durring the long term.
    - - YED -- this measures the levels in which a change in a consumers incoem will impact a products demand.
      - Formula
        
        %change in quanity demanded / %change in income
      - Three types of goods
        
        Luxary
        
        Income elasticity is more than 1.
        
        As peoples incomes grow they will spend more money on luxary goods, because they can afford to.
        
        Necessity
        
        Income elasticity of less than 1, but more than 0.
        
        As peoples incomes grow they spend a lower propertion of their income on necessities.
        
        Infirior goods
        
        As consumers incomes increase then demand will deacrease as consumers move to better products.
- - - - i.e what is the customer buying?
      - Types of products
        
        Consumer products -- these are products that are brought by everyday people, this means that they have the possibility of having a large consumer base and marketing must reach large numbers of people.
        
        Types of consumer products
        
        Convenience items
        
        These are products that are widely distributed and customers will not travel far to buy them, if they can't get a brand near them they will likely just switch brands.
        
        To be successful the business should ensure products are widely accessible.
        
        Shopping goods
        
        These are products that customers may spend some time comparing different options before they make a purchase.
        
        To be successful these products need to show that they are better then rival products.
        
        Speciality products
        
        These are products that customers consider luxuary (sports cars and Rolexs) and this means customers will cosnider buying them for months/years.
        
        Customers are willing to travel for these products and the physical enviroment is a key part of their decision (although the product and brand are also very important).
        
        Industrial products -- these are products that are sold to other businesses which then use them in their own processes. This means there is a small consumer base that is less swayed by flashy marketing.
      - Product portfolio analysis
        
        Product portfolio analysis -- this is the process of assessing each product or brand within a busines so as to help determine the right marketing strategy for it.
        
        Boston matrix
        
        Question marks (low market share, high market growth)
        
        Stars (high market share, high market growth).
        
        Cash cows (high market share, low market growth)
        
        Dogs (low market share, low market growth).
        
        Businesses aim for products within all 4 catagories, but businesses aim to have only a few dogs.
      - Product life cycle
        
        Product life cycle -- this is a model that shows the stages a product geos through durring its life.
        
        Stages
        
        Product development
        
        Expensive with a high failure rate.
        
        Product release
        
        Lots of marketing to show people the new product.
        
        Growth
        
        Advertsing to promote brand awarness.
        
        Fast growing sales, imporving cash flow, increasing profits.
        
        Maturity
        
        Less need for marketing as the brand becomes established.
        
        Sales growth slows, profits peak, increased competion.
        
        Extension strategies to increase life may be used, these could include:
        
        Lower prices.
        
        Change product slightly.
        
        Change promotion.
        
        Decline
        
        Fall in sales, fall in profits, high market saturation.
        
        Critisism of the model:
        
        The shape and duration of the model varies for different products.
        
        It is hard to place a product on the model.
        
        Decline isn't invetaible.
    - - i.e how is the product distributed to the customer?
      - Factors infleuncing the decision of where to operate
        
        Convience.
        
        Proximity to customers.
        
        Population of the area (how many potential customers are there).
        
        Cost of the area.
        
        Where competitors are.
        
        Speed of delivery/quality of infaustructure.
      - Distribution
        
        Distribution -- this is the process of moving products around so that they are in the right place at the right time.
        
        Distribution channel -- this is how a product moves through the stages from production to the customer having it.
        
        Multichannel distribution
        
        Multichannel distribution -- this is where a business uses more than one channel of distribution.
        
        Benefits
        
        Enables the reaching of more markets.
        
        This is increasingly what customers expect.
        
        Enables higher revenue as it reduces the chances customers just can't buy the product.
        
        Negertive
        
        There is a potential for channel conflict and canibalistion of market share.
        
        Can be complex to manage.
        
        There is a chance that the pricing strategy becomes confused and different distributers are charging different prices for the same product.
        
        Distribution routes
        
        Producer :arrow_right: Wholesaler :arrow_right: Retailer :arrow_right: Consumer
        
        Producer :arrow_right: Distributor/agents :arrow_right: Customer
        
        Producer :arrow_right: Consumer
        
        Roles within the channels
        
        Retailer
        
        Retailer -- this is a business that interacts directly with consumers and is the final step in a distribution channel
        
        Benefits
        
        Convient for customers (they will oiekly already visit retailers).
        
        Enables customer access across the UK.
        
        Retailer handles financial transactions.
        
        Retailer holds stock.
        
        Wholesalers
        
        Wholesalers -- these are businesses that buy in bulk from producers and then sell this bulk (at a markup) to smaller businesses.
        
        Benefits
        
        Reduces the producers transport costs because they only have to ship to a few wholesalers.
        
        Retailers can order in smaller amounts from wholesalers.
        
        Distributors
        
        Distributors -- these are businesses that sell products and act as a local sales point. These businesses are usaully specialists in one industry (such as building supplys).
        
        Diifer from agents as distributors hold stock.
        
        Agents
        
        Agents -- these are specialist forms of distributors that do not hold stock and who are paid on commission. They usaually operate in the tertiary sector in areas such as travel and insurence.
        
        Factors infleuncing distribution channel used
        
        Nature of the product.
        
        The market.
        
        The size and type of business.
        
        Types of distribution
        
        Direct
        
        Direct -- this is where the producer and consumer deal directly with eachother without the involvement of an intermedary.
        
        This is an increasingly popular method of distribution, espically since businesses may use e-commerce to sell their products globally.
        
        Indirect
        
        Indirect -- this is where the producer and consumer interact with eachother through intermedaries.
        
        This is done because:
        
        Geography
        
        It may be hard for a business to reach its customers.
        
        Other businesses may be more effiencent at delivering products.
        
        Businesses/founders may lack retail expereince.
        
        Different segements of a market may be better reached by different distribution methods.
    - - i.e how much is the customer paying?
      - Stages of setting pricing
        
        Develop pricing strategy.
        
        Asses wealth/income of target market.
        
        Determine demand for a product.
        
        Anylse demand, cost, profit relationship.
        
        Evaluate competitors pricing.
        
        Select pricing strategy and tactics.
        
        Decide of price.
      - The impact competitors have on a business' pricing depends on the markets situation and what role they place in the pricing heirarchy.
        
        Price takers -- these businesses must follow whatever the market price is.
        
        Price makers -- these businesses are able to set the price to whatever they like.
        
        Price leaders -- market leaders who's price changes are followed by price changes by rivals.
        
        Price followers -- these businesses follow the changes in pricing that the price leader deos.
      - Pricing strategies
        
        Cost based/Markup pricing
        
        Prices must be greater than costs for the business to survive in the long term. One of the most popular ways of ensuring this is using markup pricing.
        
        Markup pricing -- this is where the business takes the cost of a product then adds a percentage increase onto those costs to get the price. This ensures that each sale will cover its unit costs.
        
        Benefits
        
        Easy to calculate.
        
        Prices will go up when costs go up.
        
        Gaurnteed profit.
        
        Negertives
        
        Ignores PED.
        
        May not take into account the pricing strategies of competition.
        
        Profit is lost if the price is set below what the customer is willing to pay.
        
        Sales are lost if the markup is to high and the price is greater then what the customer is willing to pay.
        
        Business has less incentive to control costs.
        
        Price skimming
        
        This is where prices are set delibaartely high with the aim to maximise early profits with customers willing to pay a high price for the product.
        
        Common in the tech industry where 'early adapoters' are eager to have the best products early on.
    - - Promotion -- this is the component of the marketing mix that aims to inform and persuade customers so that they buy a product.
      - Promotion should be:
        
        Performative
        
        Persuasive
        
        Reasuring
      - Forms of promotion
        
        Advertising
        
        Direct sale
        
        Direct marketing
        
        Point of sale advertising
        
        Incentives
        
        PR
      - Infleunces on promotion
        
        Segement, target and postitioning.
        
        Internal contrainst.
        
        External constraints
        
        Laws
        
        What is ethical
        
        Actions of competition
        
        Actions of the Advertisng Stanards Authority and the Committee of Advertising Stanards.
      - Branding -- this is a method that creates an indenty for a business that distinquishes that business from the others.
      - AIDA formula
        
        Attention -- a business needs the attention of a customer or they can't inform the customer.
        
        Interest -- once the customers attention has been drawn it must maintian the customers interest.
        
        Desire - advertising must generate some desire within the customer for a product.
        
        Action -- if the advertising has been successful the customer will take action (i.e buy the product).
    - - i.e how is making contact with the customer and deleviering the product?
      - Customer service is of growing importance (espcially in the service industry) and staff need to be well trained, motivated and good comunicators.
      - The role of people in the marketing mix includes:
        
        Providing infomation
        
        Supporting customers in decision making
        
        Resolving problems
        
        Completing transactions.
    - - Physical enviroment -- this is the look and feel of the are where a customer actually buys the product. This can infleunce a customers shopping expeirence and impact if they come again.
      - Physical enviroment includes:
        
        Cleanliness.
        
        Design/ease of movement.
        
        Facilities.
        
        Ambience.
      - Good physical enviroment can motivate employees as well as make customers happy.
    - - Process -- these are the steps a customer must go through to complete a transaction. Easier transaction = happy customers.
      - Process includes
        
        Ease in which the product can be paid for.
        
        The effort involved in buying products.
        
        Length of queues.
        
        Number of people you have to interact with.
  - - - Helps give a clear message to target market.
      - Helps position the product effectivly.
      - Protect and promote the brand.
      - Helps achieve marketing objectives.
    - - Product life cycle
        
        New products recive more marketing then older ones (unless extension strategies are used).
      - Boston matrix
        
        Rising stars need more focus then dogs.
      - Product type
        
        Infleunces the type and location of marketing.
      - Marketing objectives
      - Target market
      - Competion
        
        E.g what price are their products.
  - - - Search engine optimisation (paying for our website to appear first).
      - Posting on social media.
      - Viral marketing (e.g John Lewis Christmass ad).
    - - 24/7
      - Global
      - Can provide large amounts of data on customers/website interaction.
      - Can help two way communication.
- - - - Demographics (e.g age, sex, gender)
      - Geographic
      - Income
      - Behavioural
    - - By segmenting the market managers can ensure that products will be aimed at the correct segment of the population instead of just treating the market as a whole.
      - Should enable more effective marketing.
  - - - Mission/objectives
      - Level of demand within segement
      - Degree of competition
    - - Mass market
        
        Mass market -- this is where a product is aimed at a large proportion of the market, rather than a particular segement.
        
        This enables the business to achieve higher sales, but may be more costly as marketing must be focused at more people.
      - Niche marketing
        
        Niche marketing -- this is where a product is aimed at a small subection or unexploited gap within the maket.
        
        This can enable a business to gain a first mover advantage on its competitors and thus help brand loyalty.
  - - - Internal contraints such as finance.
      - Internal strengths such as an innovative product design department.
      - Market conditions.
      - External enviroment such as if the economy is going into recession you may not want to launch an expensive product.