Chapter 16

• A market is where buyers and sellers come together to exchange products for money; this will not usually be a single location
• Marketing is the management process which identifies customer wants, anticipates their future wants and then goes about satisfying them profitably
• A product oriented business is one which focuses mainly on the product itself. These usually produce basic necessities such as fresh foods. The manufacturer and retailer are mainly concerned with the price and quality.
• A market oriented business is one which carries out market research to find out what a consumer wants before a product is developed and produced. They are better able to survive and be successful because they are usually more prepared for changes in customer taste.
• Reasons why the importance of market orientation is growing:
  Greater competition
  Shorter life-cycles
  Consumers are more demanding
  Markets are more fragmented
  Competitors have a clearer idea of customer needs
  Customers are more informed
  Markets are more open

• A marketing budget is a financial plan for the marketing of a product or product range for a specific period of time so that the marketing department knows how much they are allowed to spend.

Marketing Department

Objectives of Marketing

• Increase sales revenue and profitability
• Increase or maintain market share
• Maintain or improve image
• Target new market or market segment- may be in a new country
• Develop new products or improve existing ones
• Differentiation/ Diversification of product/business
• Constant improvement to extend lifeline of product
• Beat competition

SWOT Analysis

• Technique used to help the marketing department to assess a product through its strengths, weaknesses, opportunities and threats

Market Segmentation

• When a market is broken down into sub-groups which share similar characteristics
• This helps them identify their customer and satisfy their needs and wants better
• A segment whose needs are not being met is known as a gap in the market
• Market size is the value of sales in the market measured by number of units sold or value of sales
• Market share is a firm’s percentage of sales in the market
• Mass market is the market for goods that are produced in large quantities
• Niche market is a specialized, small segment of a much larger market
• Dangers of a niche market:
  Firm may be too reliant on one product
  No economies of scale
  Large producers may enter the market

• Ways of segmenting a product:
  Income group
  Age
  Region
  Gender
  Use of product
  Lifestyle
  Family size
  Usage rates
  Benefit
  Psychographic

Marketing Mix

• Describes all the activities which go into marketing a product

• Some classify packaging as being the fifth “P” but it can be included as part of product and promotion both
• These four Ps create the brand image

Boston Box (Boston Consulting Group’s matrix)

• It divides the products into four categories according to their market share and nature of market

Investment, promotion strategies and advertisements can help them all become cash cows