Business 3
Marketing
Market Objectives
—> Setting Marketing Objectives
. Give direction
. Allow measurement and learning
. Help win budget and support
Eg.
– Sales volume: number of units sold
– Sales value: money earned
– Sales growth: % rise in sales volume or value over time
– Market growth: increase in size of market
– Market share: position of market controlled by particular company, brand, product
– Brand loyalty: customers who rebuy and recommend
Sales value = selling price x number of units sold
Sales growth = (new sales - old sales) / old sales x 100
Why brand loyalty matters
– Reliable repeat sales: loyal customer come back giving steady stream of income
– Lower marketing costs: when people already trust a brand, ma spend less on advertising,
free word of mouth recommendations
– Ability to charge premium prices: customers become less price sensitive, business can
achieve high profit margins
– Protection against tough competition
Understanding markets and consumers
—> Marketing research
– The process of finding out info about market by collecting, presenting, analysing info about
3 customers, competitors, market trends
2
Businesses
1 carry out market research:
– Check the firms current market position
– Set suitable marketing objectives
– Choose the right strategies and tactics
– Measure success of marketing objectives
Can help understand:
– What customers want
– How much will they pay
, – How does promotional activity affect them
– Where will they buy product
– When will they want product
– Why do they choose those products
– What influences their decisions
● Good marketing respect helps business spot customer needs before its rivals and target its
products and adverts exactly where they will work best.
Quantitative data - based on numbers
-> may be out of date
-> data analysis and interpretation is complex skill
-> looking at small amount of data and extrapolating results can provide wrong assumptions
-> does not provide reasons for outcomes
Qualitative data - descriptions and explanations
-> bias can cause different interpretations
-> respondents may lack aware or language skills to answer accurately
-> respondents in groups may be influenced by others
-> difficult to present in graphs and charts
—> Primary Market research
– Gather info directly from consumers
– Surveys
-> large amount of data gathered quickly
-> easy to complete
-> poorly designed can result in poor results
-> poor response rates
– Observation
-> capture human behaviour
-> large numbers can be observed in short period of time
-> needs to be combined with other primary research methods to understand causes of behaviour
– Interviews
-> detailed opinions and perceptions
-> high response rates
-> time on consuming
-> interviewer bias
– Test marketing
-> free samples given
, -> opinions gathered before full product launch
-> attract early attention
-> expensive
-> competitors may become aware before launch
–
Focus groups
-> detailed info gathered
-> small group
-> easy and inexpensive
-> reluctant to share true opinions
-> rewards for participants make it more expensive than other methods
Primary market research
-> focused on needs of business and not available to rivals
-> can get in depth info
-> more up to date and can be used to ask specific questions
-> sample size may be too small
-> bias may mean respondents answer in particular way
-> may need to hire specialist marketing agency to help, expensive and time consuming
– Technology increases speed of communication
– Technology can decrease costs of gathering data
– Social media can help businesses generate interactive relationships with customers
– Customers can quickly provide feedback
Sampling
– Getting opinions from selected groups of people
–
Random sampling
-> every member of population has equal chance of selections
-> simple
-> bias should be avoided
-> anyone selected, may not be representative of market as a whole
-> researchers need complete and accurate population
–
Stratified Sampling
-> random selection of people from subgroups
Marketing
Market Objectives
—> Setting Marketing Objectives
. Give direction
. Allow measurement and learning
. Help win budget and support
Eg.
– Sales volume: number of units sold
– Sales value: money earned
– Sales growth: % rise in sales volume or value over time
– Market growth: increase in size of market
– Market share: position of market controlled by particular company, brand, product
– Brand loyalty: customers who rebuy and recommend
Sales value = selling price x number of units sold
Sales growth = (new sales - old sales) / old sales x 100
Why brand loyalty matters
– Reliable repeat sales: loyal customer come back giving steady stream of income
– Lower marketing costs: when people already trust a brand, ma spend less on advertising,
free word of mouth recommendations
– Ability to charge premium prices: customers become less price sensitive, business can
achieve high profit margins
– Protection against tough competition
Understanding markets and consumers
—> Marketing research
– The process of finding out info about market by collecting, presenting, analysing info about
3 customers, competitors, market trends
2
Businesses
1 carry out market research:
– Check the firms current market position
– Set suitable marketing objectives
– Choose the right strategies and tactics
– Measure success of marketing objectives
Can help understand:
– What customers want
– How much will they pay
, – How does promotional activity affect them
– Where will they buy product
– When will they want product
– Why do they choose those products
– What influences their decisions
● Good marketing respect helps business spot customer needs before its rivals and target its
products and adverts exactly where they will work best.
Quantitative data - based on numbers
-> may be out of date
-> data analysis and interpretation is complex skill
-> looking at small amount of data and extrapolating results can provide wrong assumptions
-> does not provide reasons for outcomes
Qualitative data - descriptions and explanations
-> bias can cause different interpretations
-> respondents may lack aware or language skills to answer accurately
-> respondents in groups may be influenced by others
-> difficult to present in graphs and charts
—> Primary Market research
– Gather info directly from consumers
– Surveys
-> large amount of data gathered quickly
-> easy to complete
-> poorly designed can result in poor results
-> poor response rates
– Observation
-> capture human behaviour
-> large numbers can be observed in short period of time
-> needs to be combined with other primary research methods to understand causes of behaviour
– Interviews
-> detailed opinions and perceptions
-> high response rates
-> time on consuming
-> interviewer bias
– Test marketing
-> free samples given
, -> opinions gathered before full product launch
-> attract early attention
-> expensive
-> competitors may become aware before launch
–
Focus groups
-> detailed info gathered
-> small group
-> easy and inexpensive
-> reluctant to share true opinions
-> rewards for participants make it more expensive than other methods
Primary market research
-> focused on needs of business and not available to rivals
-> can get in depth info
-> more up to date and can be used to ask specific questions
-> sample size may be too small
-> bias may mean respondents answer in particular way
-> may need to hire specialist marketing agency to help, expensive and time consuming
– Technology increases speed of communication
– Technology can decrease costs of gathering data
– Social media can help businesses generate interactive relationships with customers
– Customers can quickly provide feedback
Sampling
– Getting opinions from selected groups of people
–
Random sampling
-> every member of population has equal chance of selections
-> simple
-> bias should be avoided
-> anyone selected, may not be representative of market as a whole
-> researchers need complete and accurate population
–
Stratified Sampling
-> random selection of people from subgroups
