Chapter 22
Marketing: the management task that links the business to the customer by identifying and
meeting the needs of customers profitably.
- Market research
- Product design
- Advertising
- Pricing
- Distribution
Market size: the total number of sales of all producers within a market
It is important because:
- A marketing manager can assess whether a market is worth entering or not
- Business can calculate their market share
- Growth or decline of the market can be identified
Market share
Main reasons for a business to be able to increase its market share are:
- Lower prices than those of competitors
- Better customer service leads to high levels of customer satisfaction
- Innovations in products that have not yet been matched by competitors
- Selling through new channels to reach more consumers
- Increasing customer loyalty and increasing customers to buy more
Market leadership: when a business has the highest market share of all firms in the market
Benefits Disadvantages
Being market leader can be used in advertising and promotional Cna put pressure on a business and
materials employees
Market leaders are in a strong bargaining position with both suppliers It could take focus from profitability
and retailers
Retailers will be keen to stock the market-leading product as consumers Governments impose regulations on
would be disappointed not to find it in their stores market leaders
Recruitment of high-class employees is often easier for market leaders Relatively small businesses might have
no plans to be market leaders
Financing might become easier → banks and investors trust
them more
Market growth: the percentage change in the total size of a market over some time
Main reasons why a market grows:
- Technologically advanced products that appeal to a wider market
- Increasing customer incomes in most of the countries where products are sold
- Increasing size of countries’ populations which leads to increasing numbers of potential
customers
, - International trade agreements → lower barriers to trade
Chapter 23
Mains elements of a marketing plan are:
- Details of company’s marketing objectives
- Sales forecasts to allow the progress of the plan to be monitored
- Marketing budgets
- Marketing strategies to be adopted to achieve the marketing objectives
- Detailed action plans showing the marketing tactics to be used to implement the
strategies
Roles Disadvantages
Marketing plans focus on the work of marketing department Not revised marketing plans will become
outdated
Effective marketing planning will ensure that marketing strategies are Marketing planning must be constant →
linked to smart objectives time-wasting
Marketing budget will be planned with finance department Need to be based on an up-to-date
assessment of the market preferences
Marketing planning helps achieve the integration of different business
functions
Planning marketing helps to ensure an appropriate marketing mix
Market segmentation: identifying different sections within a market and targeting different
products or services to them
Advantages Disadvantages
Businesses can define their target market R&D costs might be high as a result of several product variations
precisely leading to increased sales
It helps to identify gaps in the market to be Promotional costs might be high as different ads will be needed
successfully exploited
Differentiated marketing strategies can be Production costs might be higher than producing one product
focused on target market groups
Small firms unable to compete in the whole By focusing on limited market segments there is a danger that
market can specialize in market segments excessive specialization could lead to problems if customers change
preferences too fast
Production positioning: the process of designing the company’s products and image to
occupy a distinctive place in the perceptions of customers in the target market
Product position map: a diagram that analyzes consumer perceptions of competing brands
with respect to two product characteristics
- Identifies potential gaps in the market
- Having identified the sector with the grates niche potential
, - When is used to monitor position of existing brands, managers can see if repositioning is
required
Consumer profile: a quantified picture of consumers of a firm’s products, showing proportions
of age groups, income levels, location, gender, and social class
- Geographic differences
- Demographic differences
- Psychographic factors
Niche marketing: identifying and exploiting a small segment of a larger market by developing
products to suit it
Niche markets: a small and specific part of a larger market
Mass marketing: selling the same products to the whole market with no target groups
Mass market: market for products that are usually standardized and sold in large quantities
Advantages niche market Advantages mass marketing
Small firms may be able to survive in markets Small-market niches do not allow economies
dominated by larger firms of scale to be achieved
Filling a niche can offer the chance to sell at Mass-market strategies run fewer risks than
higher prices niche strategies
Niche market products can be used by large
firms to create status and image
Unique selling point/proposition: best form of product differentiation. Can be based on
product, price, place, and promotion
Benefits:
- Effective promotion which focuses on the product
- Opportunities to charge higher prices due to exclusive design
- Free publicity from business media reporting on the USP
- Higher sales than undifferentiated products
- Customers’ willingness to be identified with the brand
Differentiation from competitors
Form of Benefits Limitations
differentiation
Low prices Consumers have limited spending power - Will profit margin be reduced
- Do low prices integrate with marketing mix
- Consumers think that it is bad quality
- Globalization is increasing number of low-cost products
Trust - Customers are careful to spend - Trust is difficult for a newly formed business to establish
their limited incomes wisely → safe -Trust can be damaged by issues such as scandals
decisions
- High business loyalty
Marketing: the management task that links the business to the customer by identifying and
meeting the needs of customers profitably.
- Market research
- Product design
- Advertising
- Pricing
- Distribution
Market size: the total number of sales of all producers within a market
It is important because:
- A marketing manager can assess whether a market is worth entering or not
- Business can calculate their market share
- Growth or decline of the market can be identified
Market share
Main reasons for a business to be able to increase its market share are:
- Lower prices than those of competitors
- Better customer service leads to high levels of customer satisfaction
- Innovations in products that have not yet been matched by competitors
- Selling through new channels to reach more consumers
- Increasing customer loyalty and increasing customers to buy more
Market leadership: when a business has the highest market share of all firms in the market
Benefits Disadvantages
Being market leader can be used in advertising and promotional Cna put pressure on a business and
materials employees
Market leaders are in a strong bargaining position with both suppliers It could take focus from profitability
and retailers
Retailers will be keen to stock the market-leading product as consumers Governments impose regulations on
would be disappointed not to find it in their stores market leaders
Recruitment of high-class employees is often easier for market leaders Relatively small businesses might have
no plans to be market leaders
Financing might become easier → banks and investors trust
them more
Market growth: the percentage change in the total size of a market over some time
Main reasons why a market grows:
- Technologically advanced products that appeal to a wider market
- Increasing customer incomes in most of the countries where products are sold
- Increasing size of countries’ populations which leads to increasing numbers of potential
customers
, - International trade agreements → lower barriers to trade
Chapter 23
Mains elements of a marketing plan are:
- Details of company’s marketing objectives
- Sales forecasts to allow the progress of the plan to be monitored
- Marketing budgets
- Marketing strategies to be adopted to achieve the marketing objectives
- Detailed action plans showing the marketing tactics to be used to implement the
strategies
Roles Disadvantages
Marketing plans focus on the work of marketing department Not revised marketing plans will become
outdated
Effective marketing planning will ensure that marketing strategies are Marketing planning must be constant →
linked to smart objectives time-wasting
Marketing budget will be planned with finance department Need to be based on an up-to-date
assessment of the market preferences
Marketing planning helps achieve the integration of different business
functions
Planning marketing helps to ensure an appropriate marketing mix
Market segmentation: identifying different sections within a market and targeting different
products or services to them
Advantages Disadvantages
Businesses can define their target market R&D costs might be high as a result of several product variations
precisely leading to increased sales
It helps to identify gaps in the market to be Promotional costs might be high as different ads will be needed
successfully exploited
Differentiated marketing strategies can be Production costs might be higher than producing one product
focused on target market groups
Small firms unable to compete in the whole By focusing on limited market segments there is a danger that
market can specialize in market segments excessive specialization could lead to problems if customers change
preferences too fast
Production positioning: the process of designing the company’s products and image to
occupy a distinctive place in the perceptions of customers in the target market
Product position map: a diagram that analyzes consumer perceptions of competing brands
with respect to two product characteristics
- Identifies potential gaps in the market
- Having identified the sector with the grates niche potential
, - When is used to monitor position of existing brands, managers can see if repositioning is
required
Consumer profile: a quantified picture of consumers of a firm’s products, showing proportions
of age groups, income levels, location, gender, and social class
- Geographic differences
- Demographic differences
- Psychographic factors
Niche marketing: identifying and exploiting a small segment of a larger market by developing
products to suit it
Niche markets: a small and specific part of a larger market
Mass marketing: selling the same products to the whole market with no target groups
Mass market: market for products that are usually standardized and sold in large quantities
Advantages niche market Advantages mass marketing
Small firms may be able to survive in markets Small-market niches do not allow economies
dominated by larger firms of scale to be achieved
Filling a niche can offer the chance to sell at Mass-market strategies run fewer risks than
higher prices niche strategies
Niche market products can be used by large
firms to create status and image
Unique selling point/proposition: best form of product differentiation. Can be based on
product, price, place, and promotion
Benefits:
- Effective promotion which focuses on the product
- Opportunities to charge higher prices due to exclusive design
- Free publicity from business media reporting on the USP
- Higher sales than undifferentiated products
- Customers’ willingness to be identified with the brand
Differentiation from competitors
Form of Benefits Limitations
differentiation
Low prices Consumers have limited spending power - Will profit margin be reduced
- Do low prices integrate with marketing mix
- Consumers think that it is bad quality
- Globalization is increasing number of low-cost products
Trust - Customers are careful to spend - Trust is difficult for a newly formed business to establish
their limited incomes wisely → safe -Trust can be damaged by issues such as scandals
decisions
- High business loyalty
