Marketing

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• Marketing

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What is marketing?

• It is the management process responsible
  identifying, anticipating, and satisfying for the
  needs of customers profitability.

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What are the benefits of marketing?

• Anticipate customers needs wants.
• Produces goods that customers want.
• See respond to changes in the market
  environment.
• Less waste reduced costs.

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What is the marketing concept?

• Thinking of customers needs first.
• Understanding the needs of customers.
• Satisfying customers needs more effectively than
  competitors.

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Benefits of the marketing concept

• Business will be able to compete.
• Good reputation public image.
• Business will be able to produce what consumers
  want.
• Will not have to try and convince customers to
  buy what they have made.

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Marketing strategy/plan

• Outlines the product, price, promotion and place.
• In order to achieve the firms overall objectives.
• A swot analysis is carried out before drawing up
  the plan.

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How does the marketing strategy plan aids
business?

• Sets targets to be achieved.
• Sets priorities for management.
• Provides a framework for mment.
• Assigns responsibilities to depts.
• Anticipates problems.
• Forms part of business plan.

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Evaluate the marketing strategy of a business
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1. SWOT analysis

• Strengths
• Market domination for over 30s.
• Weaknesses
• Under 30s not interested
• Opportunities
• Market for new drink for 28 to 30s
• Threats
• Smoking ban, alcopops.

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2. Objectives

• To increase the market share.
• To highlight unique selling point (usp).
• Target 18 to 30 year olds.

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3. Product

• Add new product features.
• Eg. Draught Guinness now can be bought in cans.

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4. Price

• Cost plus 20 mark-up

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5. Promotion

• Increase the promotion budget to enable
  sponsorship of the GAA.

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6. Place

• Sell in supermarkets off-licences.

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7. Evaluation

• I think that this plan has been extremely
  successful because of the GAA championship,
• Guinness have increased their mkt. share.
• The drink is now more popular with 18 to 30 yr
  olds.

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Market Segmentation

• Dividing a market into groups of consumers
  according to some characteristic that affects
  their willingness to buy.
• Eg Age, gender, income, religion.

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Why are markets divided into segments?

• Know where to advertise sell.
• Reduces costs.
• Fill a niche eg. Nivea for men.
• Helps business to establish itself
• Eg. Nintendo childen (santa)

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Target market

• Is the segment of the market that the product
  will be aimed at.
• Eg. HB Icepops children
• Magnum adults

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Niche market

• Is a specialist market which is especially
  suitable for the marketing of a particular type
  of product or service .
• Eg. The sock shop novelty gifts

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Marketing mix/tacticsThe 4 ps of marketing

• Is the combination of the 4 components which help
  sell a firms products.
• 1. Product
• 2. Price
• 3. Promotion
• 4. Place

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1. Product

• Functions
• To satisfy customer needs.
• To make a profit taking into account
• (a) Design, (b) packaging,
• (c) Branding, (d) Product Life Cycle.

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(a) Design

• Must
• Look good
• Do what it says
• Be easy to use
• Be easy to transport store

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(b) Packaging

• Must
• Attract customers
• Keep the product safe
• Preserve the quality
• Provide information
• Bring products to new markets (cans)

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(c) Branding

• Can be a name, symbol, logo or design.
• Makes product easily recognisable.
• Increases customer loyalty.
• Enables co. to charge a higher price.
• Increases sales and profits.

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(d) Product Life Cycle

• The level of unit sales of products change over
  time.
• A firm makes decisions based on where each
  product is on the stages of the product life
  cycle.
• Computers 3 month life cycle
• Cars ???

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5 Stages in the Product Life Cycle

• Development
• Introduction
• Growth
• Maturity
• Saturation
• Decline

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Saturation
Development
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1. Development

• Research and development costs are high.
• Focus is on the product.
• Communication is vital.
• More cash outflows than inflows.

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2. Introduction

• Launch of new product.
• Price place and promotion are important.
• Advertising costs re high.
• Initially sales are low so still outflows are
  more than inflows.

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3. Growth

• Sales start to rise.
• Production is increased.
• Competitors come on stream.
• Competitive advertising intensifies.
• Price may have to be lowered.
• However there should be more inflows than
  outflows.

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4. Maturity

• Sales peak.
• Attracting new customers is difficult.
• New features may be added.
• Aggressive advertising.
• A lot of cash inflows.

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5. Saturation

• Everybody has the product.
• Sales start to slow down.
• Less cash inflows.

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6. Decline

• Sales start to fall.
• Short term gimmicks used to try to boost sales.
• Less cash inflows.

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Product Harvesting

• Look up yourself!

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How can the Product Life Cycle be extended?

• Reduce prices to increase sales.
• Target a new market segment.
• Introduce a new sales promotion scheme.
• Launch a new advertising campaign.
• Find a new use for the product.

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2. Price

• Functions
• To raise revenue for the business.
• To influence demand.
• Note
• There are many methods of pricing a product.

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Pricing Policies

• Cost Plus Pricing
• The cost o making the product is calculated and a
  profit is added.
• 2. Tactical/Discount Pricing
• Discounts given for
• bulk buying, cash payment.
• move slow stock, attract customers

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• 3. Loss Leader
• Charge a price at below cost on a popular
  product.
• Customers while in the shop may purchase other
  expensive items.
• Eg. Bread, milk.

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• 4. Competitive Pricing
• Charging a little less than rivals.
• 5. Destroyer pricing
• Charging a lot less than competitors to put them
  out of business.

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• 6. Price Skimming
• Charge a lot when the product is new and popular.
• Eg. Pringles were 1.80 now they re only 1.30.

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• 8. Break Even
• Charge a price at which you neither make a profit
  nor a loss.

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Factors that influence price

• Costs
• The higher cost such a wages, raw materials, the
  higher the price.
• 2. Competitors Prices
• Firms have to keep an eye on what competitors are
  charging.

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• 3. State of the Economy
• On a boom demand is higher and prices may be
  higher.
• During a recession demand is lower and prices may
  be lower to attract customers.

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• 4. Tax
• Different tax rates cause prices to be different,
• Eg. childrens shoes have no VAT therefore they
  are cheaper.

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• 5. Type of consumer
• Older consumers may be willing to pay more for
  products as they may be in a better financial
  position.

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3. Promotion Mix

• Includes all the ways used by a firm to
  communicate with the public about their product
  in order to increase sales.
• They are
• (a) Advertising, (b) Sales Promotion
• (c) Public Relations, (d) Personal Selling

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The type of promotion depends on

• Type of Product
• Low cost item eg. Crisps advertising
• Expensive item eg. Tractor personal selling

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2. Stage in the Product Life Cycle

• Start Sales Promotion
• End Advertising
• 3. Target Market
• Consumers Advertising.
• Industry Personal Selling

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4. Budget

• Small Advertise with flyers
• Large Advertise on TV

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(a) Advertising

• Is indirect and long term.
• It is the communication of information about a
  product or service in order to initiate, maintain
  or increase sales.

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Functions/importance of advertising

• Sell products
• Appeal to segments or target market
• Inform consumers
• Remind consumers
• Distinguishes products from competitors

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The type of advertising depends on

• Stage in the product lifecycle
• At the start informative
• At the end reminder
• 2. Types of product
• Luxury persuasive
• Necessity informative

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• 3. Type of industry
• Lots of suppliers competitive
• Few suppliers persuasive/informative
• 4. Budget
• Small informative leaflets
• Large persuasive/competitive campaigns

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Types of Advertising

• Informative
• Is factual.
• It supplies information.
• Eg. Drink driving

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2. Persuasive

• Used to sell non essential/luxury items.
• Eg. Hair products.

After
Before
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3. Competitive Advertising

• Used when there is a large number of similar
  products on the market.
• Eg. Fairy last twice as long as
• the next leading brand!

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4. Generic Advertising

• Promotes the product rather than the brand.
• Eg. Drink milk it is good for you!

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5. Reminder Advertising

• Keeps the public aware of the product.

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Methods of AdvertisingAdvertising Media

• TV
• Has sound, colour, large audience.
• Expensive
• 2. Radio
• Has sound and large audience.
• Inexpensive.
• Lacks visual impact.
• Continue with the rest from your test book page

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The choice of advertising media depends on

• Cost
• Budget
• Product
• Duration of the campaign
• The proportion of the target market that can be
  reached by the medium

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(b) Sales Promotion

• Is direct and short term.
• It is all forms of promoting a product other than
  advertising or personal selling.
• AKA under the line advertising.

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Examples

• Free samples/gifts
• Money off coupons/vouchers
• Competitions
• Loyalty cards
• B1G1F
• Merchandising (shop window displays)

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(c) Public Relations

• Involves presenting a public image.
• It helps build up good relations and
• Goodwill.
• All about obtaining publicity and a good
  reputation.

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Functions of a Public Relations Officer (PRO)

• Look up text book page

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Techniques used in PR

• Exhibitions/Special events
• Press releases
• News conferences
• Public service activity eg. Tesco computers for
  schools
• Sponsorship eg. Guinness GAA

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Personal Selling

• Use of personal contact to persuade customers.
• Used mainly for specialised or very expensive
  goods.
• Eg. School books.
• Specialised machinery.

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4. Place

• Is how the goods will be distributed to customers
  and where the goods will be sold.
• AKA The Channels of Distribution.
• It will depend on the type of product.
• Eg. Ice-cream refrigerated trucks.
• It will depend on the type of target market.
• Eg. Alcohol Pubs, off-licences

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Channels of Distribution
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Wholesaler

• Buys in bulk from the manufacturer.
• Sells in large quantities to retailers.
• Gives retailers advice.
• Provides a delivery service.
• Provides a variety of goods.
• Eg. Mangans Cash Carry

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Retailer

• Buys in large quantities form wholesalers.
• Sells in smaller quantities to consumers.
• Provides variety in some cases a delivery
  service.
• Eg. Tescos

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However

• Not all goods go through all the channels of
  distribution.
• If they dont then the goods are cheaper as not
  as many people have to make a profit at each
  stage.
• Also some goods need to be sold quickly eg.
  bread, newspapers so they are sold directly to
  retailers then on to customers.

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Franchising

• Is a business arrangement whereby the franchiser
  sells the right to use his/her name
  idea/product.
• The franchisee pays a fee and a percentage of
  profits.
• They must obey rules conditions set down by the
  franchiser.

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Voluntary Retail Group

• Eg. Centra
• A group of grocery shop owners come together to
  buy in bulk from a wholesaler.
• Goods will be cheaper so they can compete with
  large supermarkets.

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Distinguish between

• Wholesaler
• Retailer
• Look up yourself!