Marketing Unit 4

a subgroup of individuals with similar characteristics

dividing a market into subgroups based on certain factors;

• demographic

• psychographic

• geographic

segmentation according to interests and lifestyles

because if the price is too low, the organization may not profit, if the price is too high customers may buy from competitors.

• high and steady revenues

• market may be oversaturated

• business will attempt to gain customer loyalty

• marketing budgets are cut

because the company is no longer trying to increase sales from new customers.

• increase in sales

• company is trying to gain the attention of new target markets

adapting aspects of the marketing mix:

promotion strategies; catering to a different demographic

pricing strategy; offering discounts

• smartphones

• soft drinks

• household products

a large and diverse group of customers who share specific needs and wants for a particular product or service.

• less expensive

• standardized

• appeal to wide range of customers

intense competition, as is more difficult to differentiate products,

high costs; to reach a large number of customers the business has to use more expensive above the line promotion

higher cost per unit; businesses experience less sales and therefore may not experience economies of scale

little growth potential; the market is specialized, therefore the company will have trouble attracting new customers and expanding into new markets.

less competition; focusing on a specialized niche allows business to differentiate itself from competitors and increase prices, leading to higher profit margins

suitable for small businesses; as they may not have the resources to operate in a mass market.

marketing costs are saved through the focus on one aspect of the marketing mix and economies of scale

potentially high revenues due to a large target market

a characteristic of a business’ goods/services that differentiates it from its competitors.

The process of highlighting the differences between a product and its rivals.

A way of dividing potential customers based on their geographic location.

A document that outlines a company's entire marketing process.

• objectives

• strategies

• marketing budget

• segmentation and target market

• market research

• control tools

provide direction for marketing business function

the amount of money that has been allocated to a task.

Is set by the finance team

Selecting the most appropriate market segment for a marketing campaign.

The elements that play a role in making marketing decisions in a business, regarding its product, price, promotion, place, people, processes and physical evidence.

all goods and services that a business offers

• low market share + low market growth

• is likely in the declining stage of its product life cycle

• high market share + high market growth

• requires significant investment in operations and expansion to sustain growth; therefore cashflow may be negative.

• marketing focuses on sustaining growth; attracting new customers

• high market share + low market growth

• customer loyalty is high

• less money needed for marketing

• low market share + high market growth

• recently launched products in competitive market

• high investment required for market growth

Those who are involved in offering a service; an element of the marketing mix.

relates to the distribution of the product

a business or person that acts as a link between distribution channels

• buy large quantities of stock from producers and sell to retailers at a discounted price

• reduces distribution costs

• purchase goods from wholesalers and producers

• products are sold for direct consumption of the individual.

• producers often select retailers to distribute their goods that are closest to the target market

promote and sell products on behalf of a producer

A type of distribution channel in which the producer deals directly with the customers.

• do not have to pay commission to agents or fees to wholesalers

• close contact with customers

the use of one or more intermediaries between producer and buyer

• Indirect distribution helps producers to focus on their core activities because they do not have to worry about distribution.

• reduced storage costs

• gives producer possibility of entering new markets

• wholesalers will advertise to retailer (reduced costs)

• easy distribution of the product- producer can distribute its product to many more places.

• customers can try the product- producers can increase their sales.

Agents have specific knowledge of the legal aspects of each country, which is needed in order to introduce new products successfully.

• eliminates intermediary expenses; all profit is earned by producer

• increases direct contact with customers; opportunity for market research

• provides direct control over marketing mix of product.

extra costs; commission, fees, reduction in profit

loss of control over products/ marketing mix

by selecting good staff and making sure they receive induction training

The degree to which consumers recognise a product by its name and special characteristics.

Building brand awareness by cultivating the business's values and consumer perceptions of the product.

• protect the product

• communicate information

• promote the product and communicate its USP

The maintenance, help and information a business provides to the customer after they purchase a product.

A matrix that classifies the products of a business into high and low market share and market growth categories.

Part of the marketing mix related to advertising, sponsorships, sales promotion, or other tactics to inform and persuade customers to buy a product.

Promotion aimed at mass audiences, generally not targeted.

Promotion aimed at specific segments and do not rely on mass market techniques.

An integrated marketing approach that includes both above the line and below the line elements.

psychographic

• color and imagery can be effective

• durability

• reach through online versions

isn’t as effective as television advertising. static images

• High visual impact

• national global reach

expensive

consumers choose other media

local, allows for geographic segmentation for small local businesses

• low visual impact

• less effective; distractions

• segmentation is possible

• more information can be included

• reach through online option

allows business to reach target audience in a holistic way

• It allows businesses to reach as broad or defined an audience as they want.

• It allows businesses to customise the message according to the profile of their target market.

• It makes it possible to increase brand exposure and, at the same time, generate sales.

• focus groups

• interviews

• surveys

The production of large amounts of standardised products on an assembly line.