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LO4 - How marketing information informs business decisions - Coggle Diagram
LO4 - How marketing information informs business decisions
4.1 - How to use market research information
Text: qualitative, non-numerical data, enables in depth analysis, can come in the form of reports and articles, from academic, commercial and governmental sources.
Data: numerical data, analyzed statistically
Tables: data displayed in rows and columns, show mix of non and numerical types, info clearly displayed and analyzed using statistical methods.
graphs and charts: diagrams showing relationships between variables, bars and lines used, or scatter.
line graphs: show two sets of continuous data, show the relationship between them, easy to read and interpret, show trends and allow estimations
Pie charts: circle graph, represents a while population, divided into sectors to show proportions.
Scatter graphs: show correlation, inferences can be drawn, show variables relations, useful for finding out correlation ie between sales and amount being spent.
Time series analysis: used to analyze and interpret trends that exist in historic data, and predict future data based on trends (takes fluctuations into account) used to draw graphs showing trend
4.2 - How to use marketing decision-making tools
Porters five forces model: used to analyze competitive power of the business in the market, the more competitive the more profitable it is
1st Threat of new entrants to the market: how easy it it for a competitor to operate the same way? is there high set up costs? does business need specialist knowledge? do you have protection for your product ie patent and copyright?
2nd threat of substitutes: are there other products in the market that can easily replace yours?
3rd Bargaining power of buyers: how easily buyers can get discounts from you
4th Bargaining power of suppliers: does your business have a choice of suppliers? how easy is it to switch suppliers?
5th degree of rivalry: number of competitors in market and level of competition
pros and cons of marketing decision making tools
Boston Matrix
Pros: simple, visual of market position of each product, gives overall picture of business product portfolio, products placed in categories so makes decisions about future strategies easier
Cons: too simplistic for strategic decision making, factors other than market share and growth not considered, high market share doesn't mean high profitability,
Porters five forces
Pros: shows profitability of a market, prewarns risk takers of the risks, used to compare impacts of competitive forces, helps develop strategies to compete
Cons: Its qualitative so has to combine with quantities methods to gain full information, provides only snapshot of business current position, not for long term, for simple markets.
Porters generic competitive strategies
Pros: simple for business to become more competitive, suggests business should choose cost or differentiation focus to avoid being stuck in the middle.
Cons: can be risky to focus on cost reduction as cheap prices don't always sell products, have to have good customer service, differentiation doesn't always lead to high market share.
4.3 - Considerations when making marketing decisions
Have to identify the key focus of the business ie if satisfying customer requirements, needs of the target market are most important, through research a market mic must be formed ie:
Mobile phones targeting teenagers
product: high resolution screen, good cameras, smart technology, good speakers and good storage.
Price: price skimming if newly launched, price not as important as features
Promotion: on TV, billboards, on search engines, social media
Place sold: phone shop, online
Mobile phones targeting older people
Product: durable, easy to use, big buttons or screen practical
Price: low to medium, price is as important as features
Promotion: newspapers, magazines, classical radio channels
Place sold: shops, supermarkets
Corporate image: a business must decide what there image is to be, ie if its high end it cant sell cheap quality or priced products as this contradicts its set out image.
4.4 - How considerations on marketing impact business decisions
external constraints:
legal: ie trade descriptions act; its against the law to make false claims or describe product inaccurately, this is marketing teams job.
Ethical: business must keep customers wellbeing and environment in mind ie cant promote smoking and drinking. electronic spam and telemarketing seen as unethical.
Social: changing customers attitudes and lifestyle must be heeded, must not be discriminatory. globalization means different cultural values to be considered.
Internal constraints:
Financial: how much promotion the business can afford, TV and billboards expensive, social media newspaper and radio cheaper
Time available: to conduct research and design and organize campaigns impact method and quality, large scale market research takes months to organize and save up for.
Corporate policy: guidelines for product design, price and honesty and accuracy of marketing messages, focus on sustainability.