BUSINESS – Marketing ( Marketing, Market Research, Marketing Mix – Product, price, promotion and place )

The 4Cs
The modern approach to marketing looking at marketing from the perspective of the consumer rather than the firm.
The 4Cs
Convenience ( Place ) , Communication ( Promotion ) , Consumer solution ( Product ) , Cost ( Price )
CRM – Consumer/Customer relationship marketing
Building relationship and loyalty between customers and the business, establishing strong customer relationships, so customer loyalty can be built up.

eg. membership card

Marketing Mix
The four key decisions that must be taken in the effective marketing of a product. The 4ps – Product, Price, Place, Promotion
Product
quality, packaging, unique selling point, product itself
Price
Pricing strategy, must be on the right level, if too low it leads to lack of quality, if too high leads to customers not purchasing
Place
where/ how the product is sold
Promotion
Above the line, below the line, branding, advertising, convincing customers that they need the product
4PS – PRODUCT
what does it include?
market map, product life cycle

why would the business want to extend the growth/ maturity stage of a product?

-keep their market
-grow sale
-high sale, kick them off for more higher sales
-to earn more money
-it si cheaper to extend than introducing a new product

How to reach situation and then earn more?

– redesign
– rebrand
– add new features
– joint ventures
– focus on different market segment, sell to different audience, different target market
– repackage
– enter foreign market

Market map: analyse the market and find out competitions, product portfolio and product positioning.

4PS – PRICE
What effects a business’ pricing strategies?

1. market conditions – boom? shrink?
2. competition – high competition?
3. demand
4. business objectives
5. your cost – product cost/ expenses
(always need to cover your cost)

Adjust the price depending on…

– is the product new/old to the market?
– price maker or price taker?
– price elasticity of demand of the product

4PS – PROMOTION
How could businesses decide how much to spend on promotion?

1. percentages of sales
2. objective based budgeting
3. competition based budget
4. what the business can afford
(how large or successful the business is increasing over time)
5. incremental budgeting
( “add say 3% on last years promotion budget)

How would you know if your promotion is successful?

1. Sales performance before and after the promotion
2. Consumer awareness data
3. Consumer panels
4. Response rates to advertisement
5. Views, hits, shares
6. Market research/ focus groups
7. Awareness survey

Promotion mix – the combination of promotional techniques that a firm uses to sell a product
The mix of promotional methods used by businesses
It will usually contain mixture of ATL and BTL

Above the line
: a form of promotion that is undertaken by a business by paying for communication with consumers

E.g

– billboards
– Tv Advert
– Social media Ads/ Web pages/ Web banners/ Internet/News papers/- Radio Announcement/magazine

Below the line
: promotion that is not a directly paid-for means of communication, but based on short-term incentives to purchase

E.g
– Posters
– Emails (not spam)
– Printed Advert, promotions (cards, discounts etc)
– Telemarketing, Door to door, Face to face, personal selling
– Sponsorships,Sample, Trials, merchandising

4PS – PLACE
Where and how products are sold

Manufacturer to consumer
M to Retailer to C
M to whole sales to C
M to W to R to C

Market Research
Market Research : Collecting and analyzing data about customers, competitors and the market conditions.

what to find out?

1. current market share percentage
2. needs of the target customer
3. competitors market share, number of competitor
4. projected demand
5. trends / fashion
6. demographic (population)
7. income, pricing and expectations
8. value of the market
9. do they like the product? pricing?

Why market research?

1. reduce risk of failure/ reduce risks
2. predict future demand changes
3. predicting demand can lead to making sales forecasts and targets
4. to examine the market and competitons for threats
5. to find out what customers really want and make changes

Primary Research
First hand, new information generated for a purpose

– focus groups
– questionnaires
– survey
– interview
– telephone calls
– experiments / human observations
– online surveys, social media

Advantages of Primary research

1. more up to date, more relevant to your own product and specific
2. confidential, private
3. tailor your own questions

Disadvantages of Primary research

1. Expensive
2. Time consuming
3. Inaccurate Feed-backs
4. requires more resources

Secondary Research
Collection of second hand data, finding or buying second hand information

– The internet
– Government publication documents
– Libraries
– news papers
– trade organizations
– internal company records
– other company records
– other company documents
(financial statement, sales reports and etc)

Advantages of secondary research

1. cheap
2. time effective
3. helpful
4. compare different sources

Disadvantages of secondary research

1. inaccuracy of data
2. may not be specific
3. incomplete information
4. maybe irrelevant/ outdated
5. unreliable

SAMPLE
Sample – groups of people that represents the population/market

Why are they used?

because company can’t interview every one
its very expensive and time consuming to do so

what is the risk of using a sample in market research?

1. inaccuracy
2. bias
3. unreliable (from using a poor sample)

SIMPLE RANDOM SAMPLING – equal chance of anyone in the population being picked

1. number of population
2. generate random numbers
3. seek out the chosen few

Problems:

1.may select those not in the target group – could be anyone
2.sample sizes may need to be large to be representative
3.can be very expensive to seek everyone out

Stratified sampling
Quota sampling

P.E.D
Demand : the amount consumers are willing and able to buy of a good or service at a given price

Surplus – as the price goes down, more people are purchasing it

Inverse – as price goes up, demand goes down

Demand is usually downward sloping because the cheaper the price, the more people will buy

Law of supply – price goes up, the amount of company who is going to supply goes up.

Supply is always upward slopping
higher the price the more supply aka more money

Supply : the amount of goods and services business are willing and able to supply at a given price level

Equilibrium : when demand meets supply
the crossover line – market equilibrium

Equilibrium means no surplus no shortage

Price equilibrium – Demand equals Supply

Market Segmentation
Groups of consumers with similar needs from their goods and services

Main basis of segmentation
1. geographic
2. demographic
3. psychographic

MASS
Selling the same unchanged product to the majority of the market

why choose mass?
– larger potential cusomters
– one unified strategy

NICHE
Target one specific market segment, changing product

why choose niche?
– less competitors
– loyal customers

Product Life Cycle
strategies of sales products go through over time

Stages
:

Development
> non-existence

Introduction
> non-existence, making loss, heavy promotion cost, product isn’t well known yet

Growth
> Product is starting to be known, customer base is increasing, advertisement cost

Saturation
>

Maturity
> Highest peak of sales, can start to promote less, well known

Decline
> Decreasing, sales are falling, still making sales but more outflow

Obsolete
>Out of date, irrelevant

time scale : however long the product lasts

Use of product life cycle?

1. balanced product portfolio to know when to release products.
2. Help to inform marketing mix
3. Know how revenue will change over time
4. different products at different stages to keep the business moving

Working Capital
Day-to-day cash that comes in and out of business
Spread products
Some products in maturity, some in introduction, high profit making product will pay for the new ones so overall everything is safe
Branding
Creating a competitive advantage by having a recognizable image and high consumer expectations of the business
Makes the business have a lower PED