MARKETING

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MARKETING

• Introduction

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What is a market?

• A MARKET - meeting place that allows buyers and
  sellers to exchange goods and services.
• Example of markets are - shops, internet,
  newspapers, mail order, telephone, car boot sale
• There are 2 main classifications of a market
• consumer market
• industrial market

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Consumer Markets

• Consumer markets - are made up of individuals who
  purchase goods/services for personal or domestic
  use.
• Consumable goods (convenience) (non-durable) -
  eg, food, cosmetics, magazines
• Durable goods - eg, cars, televisions, clothes
• Speciality goods cosmetics, fashion items,
  luxury goods

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Industrial Markets

• Industrial markets - organisations which
  purchase goods and services to use in the
  production of other goods and services.
• Consumable goods - eg, raw materials
• Durable goods - eg, machinery and equipment

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Role and Importance of Marketing

• It is the way the company communicates with the
  customer
• However different organisations have different
  needs
• Small business
• Multi-nationals
• Charities
• Local councils
• Government

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Marketing for the public sector

• A local council will use market research to find
  out what community needs
• Advertise their services through newspapers and
  their own publications to inform the community of
  whats available
• Develop new services based on what market
  research tells them the community want

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Marketing in the private sector

• Small businesses may not worry too much about
  marketing as they have close contact with
  customers anyway
• Big businesses may lack close customer contact
  so need to do more marketing
• Producers of industrial goods may only have a few
  customers and it is easy to stay in touch with
  them

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Marketing in the voluntary sector

• Competition for donations is highly competitive
• Have to appeal to our emotions
• Aggressive tactics
• Charities spend large sums of money on marketing
  to raise awareness

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The role and importance of marketing in
organisations Marketing has 3 Main Aims

• To Identify consumers requirements
• Businesses must identify what exactly consumers
  want from a product or service. Failure to do
  this will result in poor/no sales.
• 2. To anticipate consumers requirements
• Consumer trends must be considered in order to
  anticipate future needs and wants. (changing
  fashions)
• 3. To satisfy consumers requirements
• The consumers is king. Organisations must offer
  consumers the right product at the right price,
  available in the right quantities at the right
  place.

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Marketing
Marketing is the management process responsible
for identifying, anticipating and satisfying
customer requirements profitably.
conduct market research develop and design
product determine right quantities and right
quality decide best price to sell at promotion
and advertising decide best place to sell ensure
continued customer satisfaction
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The marketing conceptMarketing as a strategic
activity

• E.g. increasing market share can only be achieved
  through improving marketing
• Increase sales revenue and profitability
• Increase market share
• Maintain or improve the image of the business
• To target a new market
• To develop new and improved products

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PRODUCT ORIENTATION
Business are said to be product-oriented (led)
when they focus on the product and the production
process rather than the wants of the consumer.

• This approach works where
• there is a lack of competition
• customers expectations are not sophisticated
• customers knowledge of products is limited
• low disposable income
• media pressure is less

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MARKET / CUSTOMER ORIENTATION

• A market/customer-oriented business in one which
  continually identifies, reviews and analyses
  consumers needs.
• A market-led business has several advantages over
  one which is product-led. They are more able to
• anticipate changes in market
• respond to changes in market
• meet the challenge of competition
• be confident about success of new product launch

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What about services?
Services are distinguished from goods in the
following ways

• they are intangible
• they are often sold and consumed at the same time
• their quality may be variable

Therefore the marketing of services often
concentrates on the quality of the service
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The Marketing Environment
Organisations operate in an environment that is
constantly changing. It is vitally important that
marketing decisions take account of the forces
that shape that environment in order to compete
more effectively.

• The marketing environment is made up of
• The Government
• Competition
• Technology
• The Economy
• Consumer trends and behaviour

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The Government

• Marketing is subject to legislation and this has
  to be taken into consideration when making
  marketing decisions.
• The Trade Descriptions Act goods or services
  must do what they claim they can do.
• Consumer Protection Laws there to ensure the
  products that be buy are safe.
• Minimum standards are set for products such as
  cars and electrical goods.
• The business is liable for any damage which its
  defective goods may cause to a consumer.

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The Government

• The Monopolies and Mergers Commission
• set up to monitor firms which might act against
  the publics interest.
• They investigate cases where large dominant firms
  act to exploit their positions
• Fair Trading and Competition Acts
• these Acts try to ensure that no businesses work
  to prevent competition in their market.

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The Government

• Code of Advertising Practice adverts must be
  legal, truthful and not cause offence
• The Advertising Standards Authority this is a
  voluntary organisation set up by advertisers and
  marketing companies to monitor advertising in the
  UK

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Competition

• All markets are subject to some competition
  either directly or indirectly from close
  substitutes
• Customers can substitute one good or service for
  another.
• Consider the different ways of travelling from
  Glasgow to London.

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Technology

• Advances in technology create new markets and
  cause decline in others
• Class Discussion
• Can you think of examples of markets that have
  changed through advances in technology?

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The Economy

• The economy has a major influence on consumer
  behaviour and on organisational behaviour.
• During economic growth (boom period) consumer
  spending will increase
• Inflation prices will increase therefore people
  will have less disposable income e.g. petrol,
  food prices. Organsiations will pay more for raw
  materials meaning increase may be passed on to
  customers or absorbed by the firm.
• During recession consumers spend less and
  organisations tend to concentrate on reducing
  production costs and prices.

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The Economy

• When interest rates are high, borrowing becomes
  more expensive, so consumer spending is reduced
• Exchange rates will affect imports and exports,
  when the value of the pound is high foreign goods
  become cheaper for consumers in Scotland
• Scottish manufacturers will find their goods
  difficult to export because the products will
  now be more expensive for consumers abroad.

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Consumer trends and behaviour

• Age distribution and population (demographics)
• Geographic location
• Gender
• Disposable income
• Household size
• Social class
• Taste fashion and lifestyle

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The rise in importance of marketing over the past
50 years is the result of

• The availability of mass media for advertising
• economic growth and the increase in real
  disposable incomes
• continuous changes in fashion, taste and
  lifestyle
• rapid increase in technologies leading to new
  products/services
• increased competition between products and
  services at home and from abroad

Businesses which failed to recognise the
importance of marketing and respond to the above
changes were left behind.