Chapter 6: marketing
Marketing
Marketing is the process of developing a product and implementing
a series of strategies aimed at correctly promoting, pricing and
distributing the product to a core group of customers.
The purpose of this is to determine what the business should be
producing.
Marketing is used primarily by a business as a method of enhancing
its revenue streams and increasing the market’s awareness of its
products
The strategic role of marketing
The strategic role of marketing extends also to society which includes:
Choice - Businesses differentiate themselves from their competitors
through price, product quality and features and service. All these
provide consumers with greater choice when purchasing a product.
Standard of living - Businesses will often develop and market
products that improve and enhance standard of living. To provide
consumers with better products.
Employment - To provide a product to consumers, businesses must
employ labour to assist in transforming input resources into finished
products. Labour is also required to sell these goods and services.
Brand awareness - Brand awareness refers to the extent that
customers are aware of a product/ brand and its features. It is
achieved through strong and effective marketing campaigns. All of
this is done to increase the market share. Market share refers to the
percentage of total sales a business has compared with its
competitors in a particular market. It increases the business’s sales
and profitability.
Interdependence with other key functions
Each key business function must work effectively with other
functions to ensure the goals of the business are achieved.
Operation relates with marketing as it needs the data from
marketing to know what to produce
Human resources relates with marketing as staff must be
motivated and skilled to develop products. It is through the
marketing process that a business is able to determine the skills
needed.
Accounting and finance relates with marketing as the business
needs to see how much money it can put into marketing.
Approaches to marketing
Marketing is aimed at increasing product awareness and sales. There are
three core approaches to marketing:
Production approach (1920-1930s)-Relies on the view that
consumers base their purchasing decisions on the quality of the
product.
Selling approach-Based on the belief that a business will be
, successful in selling a product if it is able to promote the benefits of
the product to its target market. It does not listen to the target
market.
Marketing approach-The basis of which is that the customer is at
the core of all business activities. It involves adopting a customer
orientation with the belief that all actions in the business should be
aimed at satisfying the needs of the customer
Type of markets
The production and sale of goods and services is not restricted or
targeted solely to customers.
Some organisations simply buy a finished good from a manufacturer
to sell to consumers.
There is a diverse range of markets that demand goods and
services. The type of markets that don’t sell to customer are:
o Resource markets - those markets where the production and
sale of raw materials occurs. Examples are BHP Billiton and
Rio Tinto.
o Industrial markets - where goods that are used as supplies
in the production process are traded. E.g. construction,
agriculture, mining, manufacturing.
o Intermediate markets - commonly referred to as
wholesalers. They sell products to retail businesses that have
been produced by other organizations. E.g. Armstrong
Electrical Wholesalers.
Consumer markets
Consumer markets consist of the following markets:
Mass markets: apply to goods and services that appeal to all types
of consumers. Electricity, water and postal services are examples.
Market segments: where a business chooses to focus on only one
area of particular market. E.g. Women aged 20 – 50 years old.
Niche markets: a smaller section of a market segment. E.g. luxury
cars
Chapter 7: influences on marketing
Factors influencing consumer choice
There are four main factors that influence consumer and organisational
purchasing decisions.
Psychological Influences - Psychological factors are personal
characteristics of an individual that affect his or her buying behavior. They
include:
o Perception - is the process through which people select,
, organise and interpret information to create meaning.
Individuals act on perceptions of reality rather than reality
itself thus marketing managers must create a positive
perception in the mind of the customer through certain
images such as trendy and classy.
o Attitudes - An attitude is a person’s overall feeling about an
object or activity. It generally influences the success or failure
of a business’s marketing strategy.
o Lifestyle - Different lifestyles attract different types of
products and services.
o Personality and self-concept - The way we view ourselves and
the way we respond to other people’s perception of us. People
that do not care about luxury, will not buy Rolex watches.
Sociocultural Influences - are forces exerted by other people and
groups that affect an individual’s buying behaviour.
Family and Roles - Everyone occupies different roles in within the
family and groups within the wider community. For example: men
are more likely to be seen purchasing tools and cars whereas
women purchase health care and laundry products. However, roles
are changing and marketers are beginning to understand that as
well.
Reference (Peer) Groups - A reference or peer group is a group of
people with whom a person closely identifies, adopting their
attitudes, values and beliefs. E.g. if a friend tells you that they had a
bad experienceat a certain store, you will most probably alter your
buying behaviour.
Economic Influences - have an enormous impact on the buying
behaviour
of businesses and customers. The level of
economic activity fluctuates and its four distinct phases influences the
marketing environment.
o Boom - is a period of low unemployment and high economic
growth which lead to higher incomes. This is the phase where
businesses and consumers are optimistic about the future.
Customers are willing to spend and businesses attempt to
increase their market share by promoting heavily. The
potential marketing during this phase is usually large with
more sales.
o Contraction - is a period of high unemployment, slow
economic growth and stabilising incomes. Customers and
businesses become pessimistic and reduce their spending and
investment. Marketing plans during this phase stress the value
and usability of the product.
o Recession - sees unemployment reach high levels and
incomes fall dramatically. There is a lack of confidence in the
economy and a very small level of spending. Marketing during
this time should concentrate on maintaining existing market
Marketing
Marketing is the process of developing a product and implementing
a series of strategies aimed at correctly promoting, pricing and
distributing the product to a core group of customers.
The purpose of this is to determine what the business should be
producing.
Marketing is used primarily by a business as a method of enhancing
its revenue streams and increasing the market’s awareness of its
products
The strategic role of marketing
The strategic role of marketing extends also to society which includes:
Choice - Businesses differentiate themselves from their competitors
through price, product quality and features and service. All these
provide consumers with greater choice when purchasing a product.
Standard of living - Businesses will often develop and market
products that improve and enhance standard of living. To provide
consumers with better products.
Employment - To provide a product to consumers, businesses must
employ labour to assist in transforming input resources into finished
products. Labour is also required to sell these goods and services.
Brand awareness - Brand awareness refers to the extent that
customers are aware of a product/ brand and its features. It is
achieved through strong and effective marketing campaigns. All of
this is done to increase the market share. Market share refers to the
percentage of total sales a business has compared with its
competitors in a particular market. It increases the business’s sales
and profitability.
Interdependence with other key functions
Each key business function must work effectively with other
functions to ensure the goals of the business are achieved.
Operation relates with marketing as it needs the data from
marketing to know what to produce
Human resources relates with marketing as staff must be
motivated and skilled to develop products. It is through the
marketing process that a business is able to determine the skills
needed.
Accounting and finance relates with marketing as the business
needs to see how much money it can put into marketing.
Approaches to marketing
Marketing is aimed at increasing product awareness and sales. There are
three core approaches to marketing:
Production approach (1920-1930s)-Relies on the view that
consumers base their purchasing decisions on the quality of the
product.
Selling approach-Based on the belief that a business will be
, successful in selling a product if it is able to promote the benefits of
the product to its target market. It does not listen to the target
market.
Marketing approach-The basis of which is that the customer is at
the core of all business activities. It involves adopting a customer
orientation with the belief that all actions in the business should be
aimed at satisfying the needs of the customer
Type of markets
The production and sale of goods and services is not restricted or
targeted solely to customers.
Some organisations simply buy a finished good from a manufacturer
to sell to consumers.
There is a diverse range of markets that demand goods and
services. The type of markets that don’t sell to customer are:
o Resource markets - those markets where the production and
sale of raw materials occurs. Examples are BHP Billiton and
Rio Tinto.
o Industrial markets - where goods that are used as supplies
in the production process are traded. E.g. construction,
agriculture, mining, manufacturing.
o Intermediate markets - commonly referred to as
wholesalers. They sell products to retail businesses that have
been produced by other organizations. E.g. Armstrong
Electrical Wholesalers.
Consumer markets
Consumer markets consist of the following markets:
Mass markets: apply to goods and services that appeal to all types
of consumers. Electricity, water and postal services are examples.
Market segments: where a business chooses to focus on only one
area of particular market. E.g. Women aged 20 – 50 years old.
Niche markets: a smaller section of a market segment. E.g. luxury
cars
Chapter 7: influences on marketing
Factors influencing consumer choice
There are four main factors that influence consumer and organisational
purchasing decisions.
Psychological Influences - Psychological factors are personal
characteristics of an individual that affect his or her buying behavior. They
include:
o Perception - is the process through which people select,
, organise and interpret information to create meaning.
Individuals act on perceptions of reality rather than reality
itself thus marketing managers must create a positive
perception in the mind of the customer through certain
images such as trendy and classy.
o Attitudes - An attitude is a person’s overall feeling about an
object or activity. It generally influences the success or failure
of a business’s marketing strategy.
o Lifestyle - Different lifestyles attract different types of
products and services.
o Personality and self-concept - The way we view ourselves and
the way we respond to other people’s perception of us. People
that do not care about luxury, will not buy Rolex watches.
Sociocultural Influences - are forces exerted by other people and
groups that affect an individual’s buying behaviour.
Family and Roles - Everyone occupies different roles in within the
family and groups within the wider community. For example: men
are more likely to be seen purchasing tools and cars whereas
women purchase health care and laundry products. However, roles
are changing and marketers are beginning to understand that as
well.
Reference (Peer) Groups - A reference or peer group is a group of
people with whom a person closely identifies, adopting their
attitudes, values and beliefs. E.g. if a friend tells you that they had a
bad experienceat a certain store, you will most probably alter your
buying behaviour.
Economic Influences - have an enormous impact on the buying
behaviour
of businesses and customers. The level of
economic activity fluctuates and its four distinct phases influences the
marketing environment.
o Boom - is a period of low unemployment and high economic
growth which lead to higher incomes. This is the phase where
businesses and consumers are optimistic about the future.
Customers are willing to spend and businesses attempt to
increase their market share by promoting heavily. The
potential marketing during this phase is usually large with
more sales.
o Contraction - is a period of high unemployment, slow
economic growth and stabilising incomes. Customers and
businesses become pessimistic and reduce their spending and
investment. Marketing plans during this phase stress the value
and usability of the product.
o Recession - sees unemployment reach high levels and
incomes fall dramatically. There is a lack of confidence in the
economy and a very small level of spending. Marketing during
this time should concentrate on maintaining existing market
