Business Studies- AS Level

Marketing - ::. 1 .::

Definitions for Marketing

• American Marketing Association

“Marketing is an organizational function and a set of processes for creating,

communicating and delivering value to customers and for managing customer
relationships in ways that benefits the organizations and stakeholders.

• Social definition for Marketing

” Marketing is a societal process by which individuals and groups obtain what

they need and want through creating, offering and freely exchanging products and
services value with others. Some think marketing as an “art of selling”, but if just
a part of marketing. Understanding customers and developing products are always
better.

• Philip Kotler
“Marketing s the social process by which individuals and groups obtain what
through creating and exchanging products and value with others.

• Chartered Institute of Marketing

Marketing is the management process that identifies anticipates and satisfies
customer requirements profitably.

Difference between selling and marketing

Selling
• Emphasis is on the product.
• Company first makes the product and
then figures out how to sell it.
• Management is sales volume oriented.
• Planning is short run oriented, in terms
of today’s products and markets.
• Needs of sellers are stressed.
What is marketing?
Marketing
• Emphasis is on customers’ wants.
• Company first determines customers’
wants and then figures out how to make
and delivers a product to satisfy those
wants.
• Management is profit oriented
• Planning is long run oriented, in terms of
new products, tomorrow’s market, and
•
future growth.
Wants of buyers are stressed.

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Marketing people are involved in marketing 10 types of entities: goods, services, experiences,
events, persons, places, properties, organizations, information, and ideas.

Goods - Physical goods constitute the bulk of most countries’ production and
marketing effort.
Services - Focusing on the production of services.
Eg—Airlines, Banks, Lawyers, Hotels
Experiences - By orchestrating several services and goods, one can create, stage,
and market experiences.
Eg- Walt Disney World’s Magic Kingdom is an experience, Millennium
park in Sri Lanka
Events- Promoting time based events
Eg—such as the Olympics, trade shows, sports events, and artistic
performances.
Persons - Celebrity marketing has become a major business.
Eg—Artists, musicians
Places - Cities, states, regions, and nations compete to attract tourists, factories,
company head quarters, and new residents.
Properties - Properties are intangible rights of ownership of either real property
(real estate) or financial property (stocks and bonds). Eg-
Organizations - Organizations actively work to build a strong, favourable image
in the mind of their publics.
Eg - Philips, the Dutch electronics company, advertises with the tag line, “Let’s
Make Things Better.” The Body Shop and Ben & Jerry’s also gain attention by
promoting social causes.
Information - The production, packaging, and distribution of information is one
of society’s major industries.
Eg- publishers of encyclopaedias, nonfictions books, and specialized magazines;
makers of CDs; and Internet Web sites.
Ideas - Every market offering has a basic idea at its core. In essence, products and
services are platforms for delivering some idea or benefit to satisfy a core need.

Market and product orientation

A marketing orientated approach means a business reacts to what customers want. The
decisions taken are based around information about customers’ needs and wants, rather than
what the business thinks is right for the customer. Most successful businesses take a market-
orientated approach.
A product orientated approach means the business develops products based on what it is good
at making or doing, rather than what a customer wants. This approach is usually criticised
because it often leads to unsuccessful products - particularly in well-established markets.

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Most markets are moving towards a more market-orientated approach because customers
have become more knowledgeable and require more variety and better quality. To compete,
businesses need to be more sensitive to their customers needs otherwise they will lose sales to
their rivals.

Marketing Objectives
Defined as: marketing ‘goals’ that the business must achieve in order to meet its wider business
objectives
Main ones for most businesses tend to be:
1. Growth in market share
2. Clearer product differentiation
3. Long term brand value to customers
4. Creating and launching new products / services – ‘Innovation
Examples of marketing objectives follow:
• Increase product awareness among the target audience by 30 percent in one year.
• Inform target audience about features and benefits of our product and its competitive
advantage, leading to a 10 percent increase in sales in one year.
• Decrease or remove potential customers' resistance to buying our product, leading to a 20
percent increase in sales that are closed in six months or less.

Niche market Vs Mass Marketing

A niche market is the subset of the market on which a specific product is focusing on; Therefore
the market niche defines the specific product features aimed at satisfying specific market needs,
as well as the price range, production quality and the demographics that is intended to impact

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Mass Marketing is a market coverage strategy in which a firm decides to ignore market
segment differences and go after the whole market with one offer. It is type of marketing (or
attempting to sell through persuasion) of a product to a wide audience.

Domestic marketing
A marketing restricted to the political boundaries of a country, is called "Domestic Marketing".
A company marketing only within its national boundaries only has to consider domestic
competition. Even if that competition includes companies from foreign markets, it still only has
to focus on the competition that exists in its home market.
International marketing
At its simplest level, international marketing involves the firm in making one or more marketing
mix decisions across national boundaries. At its most complex level, it involves the firm in
establishing manufacturing facilities overseas and coordinating marketing strategies across the
globe.

Global marketing
When a company becomes a global marketer, it views the world as one market and creates
products that will only require weeks to fit into any regional marketplace. Marketing decisions
are made by consulting with marketers in all the countries that will be affected. The goal is to
sell the same thing the same way everywhere
Advantages
• Economies of scale in production and distribution
• Lower marketing costs
• Power and scope
• Consistency in brand image
• Ability to leverage good ideas quickly and efficiently
• Uniformity of marketing practices
• Helps to establish relationships outside of the "political arena"
Disadvantages
• Differences in consumer needs, wants, and usage patterns for products
• Differences in consumer response to marketing mix elements
• Differences in brand and product development and the competitive environment
• Differences in the legal environment, some of which may conflict with those of the
home market
• Differences in the institutions available, some of which may call for the creation of
entirely new ones (e.g. infrastructure)
• Differences in administrative procedures

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 • Differences in product placement.
Market share Vs Market growth
Market share, in marketing is the percentage or proportion of the total available market or
market segment that is being serviced by a company. It can be expressed as a company's sales
revenue (from that market) divided by the total sales revenue available in that market.

Market growth

Identifying Market Segments

Segmenting Consumer Markets
People are different and seek different ways to satisfy their needs, nearly all organizations,
whether for-profits or not-for-profits, industrial or consumer, domestic or international, must use
a Market Segmentation to target marketing .A company cannot serve everyone in broad markets
such as soft drinks (for consumers) and computers (for businesses), because the customers are
too numerous and diverse in their buying requirements. This is why successful marketers look
for specific market segments that they can serve more effectively.
To successfully target markets using a segmentation approach, organizations should
engage in the following three-step process.

· Identify segments within the overall market

· Choose the segment(s) that fits best with the organization’s objectives and goals
· Develop a marketing strategy that appeals to the selected target market(s)

Segmentation Definition - Dividing market into smaller groups of buyers distinct needs,
characteristics, or behaviour that might require separate products or marketing mixes.

Geographic Segmentation

Geographic segmentation calls for dividing the market into different geographical units such as
nations, states, regions, cities, or neighbourhoods. The company can operate in one or a few
geographic areas or operate in all but pay attention to local variations.

Demographic Segmentation

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In demographic segmentation, the market is divided into groups on the basis of age and the other
variables. This is the most popular consumer segmentation method because that consumer wants,
preferences, and usage rates are often associated with demographic variables also these are easier
to measure

Age and life-cycle stage- (Dividing a market into different age groups and life-cycle
Groups). Consumer wants and abilities change with age. However, age and life cycle can
be tricky variables.

○ Procter and Gamble tooth brush for different age groups.

○ Anchor Milk powder for various age groups
○ HNB Senior Citizens Scheme
○ NSB sthree account (female over 16)

Gender – Dividing a market into different groups based on gender. Gender segmentation
has long been applied in clothing, hairstyling, cosmetics, and magazines. Occasionally
other marketers notice an opportunity for gender segmentation.

Income- Income segmentation is a long-standing practice in such categories as

Automobiles, boats, clothing, cosmetics, and travel.

Eg- General Motors – Highly engineered German imports in the luxry market Korean
models in the economic class.

Social class - Social class strongly influences preference in cars, clothing, home
furnishings, leisure activities, reading habits, and retailers, which is why many firms
design products for specific social classes.
Behavioural Segmentation
In behavioural segmentation, buyers are divided into groups on the basis of their Knowledge of,
attitude toward, use of, or response to a product. Many marketers believe that

Behavioural variables—occasions, benefits, user status, usage rate, loyalty status,

buyer-readiness stage, and attitude—are the best starting points for constructing market
segments.

Occasions - Buyers can be differentiated according to the occasions on which they

develop a need, purchase a product, or use a product. For example, air travel is triggered
by occasions related to business, vacation, or family, so an airline can specialize in one of
these occasions.

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Benefits- Buyers can be classified according to the benefits they seek. One study of
travelers uncovered three benefit segments: those who travel to be with family, those who
travel for adventure or education, and those who enjoy the “gambling” and “fun” aspects
of travel.

User status- Markets can be segmented into nonusers, ex-users, potential users, first time
users, and regular users of a product. The company’s market position also influences its
focus.

Usage rate- Markets can be segmented into light, medium, and heavy product
users.Heavy users are often a small percentage of the market but account for a high
percentage of total consumption. Marketers usually prefer to attract one heavy user rather
than several light users, and they vary their promotional efforts accordingly.

Loyalty status- Buyers can be divided into four groups according to brand loyalty status:
(1) hard-core loyals (who always buy one brand)
(2) split loyals (who are loyal to two or three brands)
(3) shifting loyals (who shift from one brand to another
(4) switchers (who show no loyalty to any brand).

Buyer-readiness stage- A market consists of people in different stages of readiness to

buy a product: Some are unaware of the product, some are aware, some are informed,
some are interested, some desire the product, and some intend to buy. The relative
numbers make a big difference in designing the marketing program.

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Completed by
P.Suthaharan BBA (Marketing Sp) (Col)
E-mail –haran5555@gmail.com

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