4.1 The Role of Marketing

Chapter 24

What is Marketing?

The management task that links the business to the customer by identifying and meeting the needs of customers profitably.

Get the right product at the right price to the right place at the right time.

Marketing Management Functions

Market research Product design Pricing Advertising Distribution Customer Service Packaging

What is Market Size?

Total level of sales of all producers within a market. Can be measured by volume of sales

(units sold) Can be measured by value of sales

(total revenue generated)

What is Market Growth?

The percentage change in the total size of a market (in volume-units or value-revenue) over a period of time. Growing markets may have many competitors

so profits may not be as high as expected. The pace of growth

may depend upon external factors may be affected by technology innovations may be slow because of a saturated market

What is Market Share?

The percentage of sales in the total market sold by one business.

Market share% = firm’s sales for time period total market sales for time period

Brand Leader is the company with the highest market share.

X 100

Benefits of being Brand Leaders

Sales are higher then competitors Retailers want to stock your product Discounts are less likely to be given

increasing profits Brand leaders can take of advantage of

marketing opportunities as the “leader”

Name brand leaders: Computers? Cell phones? Soda?Shoes? Fast Food? Potato Chips?Sports Clothing? Cars?

Marketing Strategies

Different strategies are used for different markets

Consumer markets: markets for goods and services bought by the final user of the item

Industrial markets: markets for goods and services bought by businesses to be used in the production process of other products

Marketing to Business

Will promote at industrial exhibitions, trade shows, direct selling

Meet the needs of each customer by customizing products

Promote product as cost-saving or investment

Technical promotions and literature targeted to a knowledgeable buyer

Marketing to Consumers

Marketing goods is different than marketing services.

Marketing Services: Services are consumed immediately; off-peak

times need to be dealt with Service quality must be right the first time as it

cannot be done over More difficult to compare services between

companies, so promotion must be detailed and informative

People (staff) must be trained well in providing service

Marketing Approaches

Market Orientation An outward-looking approach basing product

decisions on consumer demand, as established by market research.

Product Orientation An inward-looking approach that focuses on

making products that can be made or have been made for a long time – and then trying to sell them

Market Oriented

Requires market research to determine what customer want to buy Benefits:

New products less likely to failProduct life span is likely to be longerContinuing feedback from consumers

to keep product fresh

Product Oriented

Businesses invent products they believe will be useful and consumers will want. Pharmaceutical and electronics

Produce high-quality goods that consumers will value Safety equipment or gourmet foods

HL Asset-Led Marketing

Marketing strategy is based on the firm’s existing strengths and assets instead of what the customer wants.

No attempt to satisfy all customers in all markets.

A corporation reviews their strengths (including people, brands, image) and only makes products that take advantage of those strengths.

Levi Straus – only makes clothing BMW – restricts its vehicles to the luxury

market and does not sell commercial vehicles.

HL Social Marketing

Considers the consumer needs as well as the society’s (public, stakeholders, government, community, and natural environment)

Cosmetic company does not support testing on animals

Natural Sea brand of tuna is dolphin safe Agriculture producers farm using organic

methods

HL Social Marketing

Balance 3 things: Company profits Consumer wants Society’s interests

Considers long-term welfare of the community not short-term profits

These products are not the cheapest Business can have a competitive edge

when seen as socially responsible Being socially responsible can be seen as

a unique selling point

Marketing Plan

A detailed report on an organization’s marketing strategy

SMART objectives (increase sales by 10% next quarter)

Strategic plans (steps needed to be taken to achieve objectives)

Specific marketing actions (which markets, by when, which methods of promotion)

Budget (how will the costs of the strategy be paid)