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SECTION 3: DECISIONS TO IMPROVE MARKETING PERFORMANCE - Coggle Diagram
SECTION 3: DECISIONS TO IMPROVE MARKETING PERFORMANCE
MARKETING OBJECTIVES
sales volume and value
sales volume = number of units sold
sales value = how much the sales are worth
sales growth
targeting an increase in overall sales in order to either maintain market share or improve it
brand loyalty
for customers to keep coming back
market share
the proportion of a particular market that is controlled by an individual business
increasing brings benefits of brand loyalty and greater revenue
market size
knowledge of market size gives an indication of the potential market
enables realistic targets to be set for sales, growth and share
external influences on marketing objectives
market and competition
economic factors
soical factors
ethocs
technology
internal influences on marketing objectives
finance
production capacity
human resources
nature of product
MARKETING DECISIONS
STP
market segmentation
dividing the market into identifiable sub markets each with its own customer characteristics
market targeting
deciding which market segment a business wants to operate in
market positioning
where a particular brand stands in relation to other brands in the market
benefits
marketing is more effective
resources will be used more effectively
sales and market share may increase
drawbacks
may overlook a potentially profitable segment
any changes in taste or fashion may be overlooked
mass or niche marketing
niche marketing
when businesses identify and satisfy the demands of smaller segments of a larger market
advantages
benefit from price skimming
can be highly profitable
customer loyalty
disadvantages
if profitable can attract competition
may be difficult to generate acceptable profit
mass marketing
when businesses aim their products at most of the available market
product decisions
technology
basis of development of new products that meet the needs of consumers more fully e.g. battery tech has helped to develop electronic cars
competitiors actions
can spur on a rival to create a better product e.g. hotels now offer different types of pillows to enhance the stay
the entrepreneurial skills of managers and owners
creativity the skill of being able to think up new ideas for goods and services that fit with customer needs leads to the development of many new products
USP
can base advertising around the differences of their product and rivals
encourages brand loyalty
allows firms to charge a premium price
pricing decisions
price skimming
when a new product is launeched they set the price high at first and then decrease it when competitors enter the market
penetration pricing
price is set deliberately low to gain a foothold in the market
price leadership
established products with strong brand images and dominates the market
price taking
setting the price equal to the going rate
loss leader
setting proces very low to entice customers
special offer pricing
reduced prices for a limited period of time
promotional decisions
bringing consumers attention to a product or business
promotional mix
advertising
sales promotion
personal selling
merchandinsing
public relations
branding
packaging
exhibitions and trade fairs
influences on the choice of promotional mix
the products position in its life cycle
the type of product
the finance available to the business
where consumers make purchasing decisions
competitiors actions
distribution decisions
the range of activities necessary to make the product available to customers
choosing appropriate outlets and distributors
location
credit terms
willingness to display products in prominent positions
types of distribution channels
traditional
producer-wholesaler-retailer-consumer
modern
producer-retailer-consumer
direct
producer-consumer
influenced by
the type of product
the nature of the market
the technical complexity of the product
multi channel distribution
where firms use more than one type of distribution channel
e-commerce
businesses can gather more detailed information and build relationships with consumers
greater contact between consumer and business
social media can be used as a cost-effective way of boosting sales
can be used anywhere in the world
MARKETING THEORIES
market mapping
enables a business to identify the position of its products in the market relative to others
such an approach enables a business to see where competition is most concentrated and may reveal potential gaps in the market
price elasticity of demand
percentage change in demand/ percentage change in price
if the answer is greater than 1 then demand is elastic
if the answer is less than one than the demand is inelastic
income elasticity of demand
percentage change in demand/ percentage change in price
if the answer is greater than one than demand is elastic
if the answer is less than one than demand is inelastic
product life cycle
all products follow a similar pattern throughout their life but take varying times to pass through these stages
extension strategies
finding new markets for existing products
changing the appearance of packaging
product mix
a well organised business will plan its product range so that it has products in each of the major stages of the life cycle
boston matrix
allows businesses to undertake product portfolio analysis based on the products market growth rate and market share
categories
star products have a dominant share in the market and good prospects for growth
cash cows are products with a dominant share of the market but low prospect for growth
dogs have a low share of the market and no prospects for growth
problem children are products that all have a small share of the growing market
firms should avoidng having too many products in one section
products in the top half of the cycle are in the early stages but the cost of developing and promoting will not have been recovered :
7Ps
price
strategies, skimming, penetration, psychological, cost plus, loss leader
place
retail, wholesale, mail order, internet, direct sales, peer to peer, multi channel
product
design, technology, usefulness, convenience, value, quality, packaging, branding, accessories, warranties
physical environment
smart, run down, interface, comfort, facilities
process
especially relevant to service industries, how are services consumed
people
employees, management, culture, customer service
promotion
special offers, advertising, endorsements, user trials, direct mailing, leaflets, free gifts, competitions, joint ventures
marketing mix
technology
the product itself and methods of distribution
market research
a key influence on all elements of the marketing mix
nature of the product
determines that certain elements of the mix may be more critical
finance
profit levels and cash flow
sampling
the selection of a representative group of consumers from a larger population
random
each member of the population has an equal opportunity of being picked
stratified random
seperates the population into segments and the =n selects at random
quota
splits the population into a number of groups each sharing common characteristics and then filling a certain number from those groups
confidence intervals
the plus or minus figure used to show the accuracy of results arising from sampling
confidence levels
the probability that research findings are correct
extrapolation
analyses the past performance of a variabke such as sales and extends the trend into the future
trend
an underlying pattern of growth or decline in a series of data
MARKETING CALCULATIONS
market share
sales of firm/ total market sales x 100
market size
sales/ market share x 100
market growth
difference in total market sales/ earliest year x 100
sales growth
difference in sales/ earliest year x 100
