Marketing Notes

Unit 11 The nature of marketing

Market: Any set of arrangements that allows buyers/sellers to exchange goods and services.

Marketing: The management process involved in identifying, anticipating, and satisfying

consumer requirements profitably.

Mass marketing: The marketing of product to all possible consumers in the same way.

Niche marketing: The marketing of products to a particular, small segment of the market.

Market orientation: An approach to business which places the requirements of consumers at

the centre of the decision making process.

• Respond more quickly to changes in the market because of its use of market
information.
• Stronger position against new entries into the market.
• More able to anticipate market changes.
• More confident that launch of a new product will be more successful.

Product Orientation: An approach to business which places the main focus of attention upon
the production process and the product itself.

Whether a business places greater emphasis on the product or on the market will
depend on a number of factors:

1. The nature of the product.

2. Policy decisions.
3. The views of those in control.
4. The nature and size of the market.
5. the degree of competition

The purpose of marketing:

• To satisfy customers.
• To identifying consumer requirements.
• To anticipate consumer requirements.
• To compete effectively.
• To make a profit.

Asset led or asset based marketing: where a business combines its knowledge of the market
with an understanding of its strengths and weaknesses to decide what products to bring to
market.
Perceptual maps, positioning maps, or market maps: typically a two dimensional diagram
which shows two of the attributes or characteristics of a brand and those of rival brands in the
market.
• Used for consumers and not businesses.
• Used to find out where the product is believed to be by consumers.
• May be used to help choose other products to launch.
• Could reveal the price that customers are willing to pay.
• To suggest what promotional support will be needed.

Unit 12 Market Research

Market research: Collection, collation, and analysis of data relating to the marketing and
consumption of goods and services. Data gathered might include:

• If people want the product or not.

• What type of promotion will be affective.
• The functions or facilities it should have.
• What style, shape, colour or form it should take.
• The price people would be willing to pay for it.
• Where people would wish to purchase it.
• Information and consumers themselves- their ages, their likes, attitudes,
interests, and lifestyles.

Use of market research:

• Descriptive reasons: may wish to know what is going on in the market.

• Predictive reasons: may wish to predict what may happen in the future.
• Explanatory reasons: may want to explain a variety of matters relating to its
marketing.
• Exploratory reasons: investigating new possibilities in a market.

The scope of market research:

• The market:
1. Indentifying market trends.
2. Discovering the potential size of the market.
3. Indentifying market segments.
4. Building up a profile of potential/actual consumers.
5. Forecasting sales levels.

• Competition:
1. Analysing the strengths and weaknesses of competitors.
2. Identifying relative market shares.
3. Identifying trends in competitor’s sales.
4. Finding information on competitor’s prices.

• Promotion:
1. Analysing the effectiveness of promotional materials.
2. Deciding upon choice of media for promotions.

• The product:
 1. Testing different product alternatives.
2. Identifying consumer wants.
3. Developing new product ideas.
4. Assessing consumer reaction to a newly launched product.

• Distributing the product:

1. Identifying suitable retail outlets.
2. Exploring attitudes of distributors towards products.

• Pricing the product:

1. Discovering the value consumers place on the product.
2. Identifying the sensitivity of the demand for the product to changes in
its price.

Secondary research: Secondary or desk research involves the collection of secondary data.
This is information which already exists in some form. It can be internal data from records
within the business or external data, from sources outside the business.

• Internal Data:
1. Existing market research reports.
2. Sales figures.
3. Reports from members of the sales force resulting from direct contact
with customers.
4. Annual report and accounts publish by businesses.
5. Businesses increasingly make use of company intranets to provide up to
date information.
6. Stock movements.

• External Data:
1. Information from competitors.
2. Government publications.
3. Data from customer services on complaints which have been received
about a product.
4. The European Union.
5. International publications.
6. Commercial publications.
7. Retail audits.
8. General publications.
9. Internet website pages.

• Advantages:
1. Easy, quick and cheap to collect.
2. Several sources may be used.
3. Historical data may be used which can show a trend over time.
4. Used before carrying out secondary research, which helps to establish
the most useful questions to be asked in questionnaires.

• Disadvantages:
1. Not always in a form that a particular business would want because it
has been collected for another purpose.
2. Out of date and not relevant, especially in fast changing markets.
 3. Aware of bias.
4. There may have been problems with the research.

Primary Research: primary or field research involves collecting primary data. This
information which did not exist before the research began.
• Questionnaires:
1. The balance between closed and open questions.
2. The clarity of questions.
3. The use of leading questions.
4. The questionnaire can provide quantifiable information.
5. Whether it is to be completed by the person carrying out the survey or
completed by he respondent.

• Personal interviews:
1. These involve an interviewer obtaining information from one person
face to face.
2. Interviewer fills out responses.
3. Contains mainly open questions.
4. long and difficult questions can be explained by the interviewer

• IT based research:
1. Businesses are increasingly making use of internet and email surveys,
where customers can provide data on a business website.
2. Retail audits consist of information collected by retailers about
consumers, usually at the point at which a purchase is made.
3. In the UK many shopping centres have devices installed which record
where customers shop.
4. Interactive methods can also be used to gather information.
5. Spending patterns may be analysed from the use of credit cards and
store loyalty cards.

• Telephone interviews:
1. This method allows the interview to be held over the telephone.
2. It has the advantage of being cheaper than personal interviewing and
allows a wide geographical area to be covered.
3. However it is often distrusted by the public and it is only possible to
ask short questions.

• Postal surveys:
1. These involve the use of questionnaires sent to consumers through post.
2. It is relatively cheap.
3. No interviewer bias.
4. Response rate is poor.

• Observation:
1. Often used by retail firms watching consumer in their stores.
2. Observers look out for the amount of time consumers spend making
decisions and how readily they notice a particular display.
3. May leave many questions unanswered.

• Focus groups:
 1. These involve a group of customers being brought together on one or a
number of occasions.
2. Asked to answer questions and to discuss questions.
3. Cheap.
4. Small amount of peoples views may not reflect all of the others peoples
views on the questions discussed.

• Advantages:
1. Data can be collected that directly applies to the issue being researched.
2. The business which initially collects the data will be the only
organization with access to it. Secondary data may be unavailable in a
certain area.

• Disadvantages:
1. It can be expensive to collect and may take longer than desk research.
2. The sample taken may not represent the views of all the population.
3. If the research method is flawed, the findings will also be flawed.

Benefits of market research:

• An aid to decision making.

• Reducing risk.
• Providing a link with the outside world.
• Estimating the size of markets.
• Public relations.

Problems with market research:

• Human behaviour.
• Sampling Bias.

Qualitative research: the collection of data about attitudes, beliefs and intentions.

Quantitative research: the collection of data that can be quantified.

Unit 13 Sampling

Cluster sampling: where respondents are chosen for interview in a few locations, to reduce
the cost of research, rather than being spread evenly across the population.

Size of sample: the sample size will influence how representative the sample is of the
population. Larger samples tend to be more representative. Larger samples are more likely to
be accurate.

Type of Sampling:
• Random sampling:
1. Gives each member an equal chance of being chosen.
2. Selected at random.
3. Bias is not found in random sampling.
 4. Assumes whole group is the same.
5. Very costly and time consuming.

• Systematic sampling:
1. One method sometimes used to reduce time taking to locate a random
sample.
2. It is however less random.

• Stratified random sampling:

1. This method of sampling is also random.
2. Sample is divided into segments or strata based on previous knowledge
about how the population is divided up.
3. Preferred because it makes a sample more representative.

• Quota sampling:
1. Involves the population being segmented into a number of groups
which share specific characteristics.
2. These may be based on age and sex of the population.
3. Interviewers are then given targets for the number of people out of each
segment who they must interview.
4. Are not statistically representative.

• Snowballing:
1. Highly specialised method of sampling.
2. It involves starting the process of sampling with one individual or
group and then using these contacts to develop more, hence the
snowball effect.
3. Only used when other sampling methods are not possible.

• Cluster sampling:
1. Involves separating the population into clusters.
2. Random sample is then taking.
3. Used when results need to be found quickly.

• Multi stage sampling:

1. This involves selecting one sample from another sample.

Factors affecting the sampling method of a sample:

• Finance available.
• The nature of the product.
• The risk involved.
• The target market.

Standard deviation: a measure of the average difference of each result from the mean.

Sampling Bias: where the sample chosen is not representative of the population studied.

Questionnaire: a list of questions, given to a number of respondents to answer, which

provide data.
Unit 21 Promotion

Objectives of promotion:

• Increase awareness of product

• Reach a target audience
• Remind consumers about the product
• To show that its better than the competing products
• Develop or improve the image of a business
• Reassure consumers after the product has been purchased
• To support an existing product

Above the line promotion/advertising: advertising is often placed into different

categories

Informative advertising:
Design to increase consumer awareness of a product.

Persuasive advertising:
Tries to convince consumers to purchase a product, by stressing that it is more
desirable than others.

Reassuring advertising:
Aimed at existing customers to reassure there decision of choosing there
business and they made the correct decision and continue doing it.

Different mediums that can be used to deliver advertisement:

Cost: if they cant afford television adverts, cost can be measured against
effectiveness.

Media reach: which media is the most suited to advertise and show to the
audience.

Deliver of the chosen message: what media would best persuade customers to
change there brand.

Marketing mix: an advertising campaign may be part of a wider campaign using other
elements of the marketing mix such as:

Below the line advertising:

Public relations
 Press conferences
 Press releases
 Donations
 Sponsorships
 Company visits
 Exhibitions and trade fairs (also found in merchandising)
 Merchandising
• Display material
• Lay out of products at the point of sale
• Stocks
• Appropriate like and the creation of desirable smells

Sales promotions

Direct selling

Pricing

Law: legal restrictions on the use of different media advertising certain products

Types of advertising media:

• Television
• Newspapers and magazines
• Cinema
• Radio
• Posters or billboards
• Internet

Promotional mix:

Type of product:
Some products are better suited for some promotional methods than others

Type of market:
Includes size, geography, social economic characteristics. Whether its
consumer market or business to business market

Cost:
Some advertising might just cost them to much. Minimise expenditure on
advertising

Promotional mix of competitors:

If everyone else is spending a whole bunch on advertising then your going to
be left behind. Or find alternatives

Stage of a product in its life cycle:

At the beginning it needs a lot of advertising to penetrate the market but as it
dies it needs reincarnation for the late adopters

Legal and social constraints:

law, trade descriptions, pressure groups.