Marketing English

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The Nature of Marketing

market = any set of arrangements that allows buyers and sellers to exchange goods and services

before selling products, businesses try to find out customer preferences by using market research

marketing = marketing is the management process involved in identifying, anticipating and satisfying consumer requirements profitably.

Purposes of marketing

satisfy customers

identifying consumer requirements

anticipate consumers requirements (understand what consumers want in advance, anticipate and respond to changes in taste, etc.)

compete effectively

make a profit

product orientated businesses -> focus lies on production process and product itself

market orientated businesses -> a business which continually identifies, reviews and analysees consumers' needs, it is led by the market

mass marketing = business offers almost the same products to all consumers and promots them in almost the same way (large number of products sold, global marketing, business gains economies of calse, expensive, competition)

niche marketing = business targeting a product at a particular, small segment of a market (specialization -> focus on consumers needs, if successful -competition is attracted)

Market Research

market research = the collection, collation and analysis of data relating to the market and consumption of goods and services

Reasons for market research

descriptive reasons (identify what is happening in the market)

predictive reasons (predict future developments in the market)

explanatory reasons (explain a variety of matters related to the business' marketing)

exploratory reasons (investigating in new possibilities in a market)

Secondary Research or Desk Research

collection of secondary (already existing) data, can be internal data (existing market resear reports, sales figures, reports, stock movements) or external data (information from competitiors, government publications,...)

Advantages -> easy, quick, cheap, several sources may be used, historical data can show a trend over time

Disadvantages -> adapting data might be expensive and take time, data may be out of date/not relevant

Primary Research or Field Research

collection of data which did not exist before

Methods:

questionnaires

personal interviews

IT-based research

telephone interviews

postal surveys

observation

focus groups

consumer panels

test marketing

qualitative research = data about attitudes, beliefs, intentions, perceptions, habits (surveys) -> open to a high degree of interpretation

quantitative research = data that can be measured (sales figures, market share, ...)

sample = selection part of the population, which must be representative of the population to be effective -> open to less interpretation

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Market segmentation

= breaking down a market into sub-groups with similar characteristics

Geographic Segmentation

considering the region of a country where consumers live and the nature of the region (rural, suburban, urban,...)

useful in highly culturally divserse markets

drawback: cinsumers tastes are becoming more uniform across geographic boundaries

Demographic Segmentation

demography = study of population, this segmentation divides people into groups according to characteristics such as

age

gender (because of e.g. different spending patterns)

social class (employment status and conditions)

income

religion

ethnicity

Psychographic Segmentation

dividing people into groups based on their attitudes, opinions, lifestyles (sports interested people, ...)

Behavioral Segmentation

based on how consumers relate to a product, methods:

usage rate (quantity and frequency of purchase)

loyalty (product loyalty)

time & date of consumption

may fail to adequately capture a target market of a business -> use a variety of segmentation methods

Planning a marketing strategy

Market segmentation (identifying the market, developing consumer profiles -> analysis of characteristics of customers in the market)

Market targeting (evaluating market segments -> which segments are worth targeting, selecting market segments to target -> chose target market)

Market positioning (positioning for each market segment -> decisions about positioning, consider competition and how to differentiate product, developing a marketing mix for each target segment -> respond to needs of the market and its customers, market orientated)

Market Size, Share and Growth

Size

Value = total amount spent by customers buying products

Volume = physicl quantity of products produced and sold

Growth

influences:

economic changes (increase in income e.g.)

social changes

technological changes

demographic changes (e.g. age structure of population)

changes in legislation

Share

sales of a business / total sales in market x 100

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Marketing Mix

= the elements of a firm's marketing strategy - product, price, placement, promotion

Product

products must meet needs of their consumers

pay attention to:

how consumers will use the product

appearance of the product (e.g. colour)

financial factors (high production costs mean high selling costs -> if consumers are not conviced that the product is value for money, it is unlikely that they will purchase it)

product life cycle

USP

market position

Product life cycle

pre-stage: development (product is bbeing researched and designed, ideas beeing investigated, developed and tested, many products fail at this stage, costs are likely to be high during this stage, no sales)

Introduction -> sales rise (launch of the product, sales are often slow, costs occur -> promotion, no profit, prices might be high to cover costs, may also be low to break into the market)

Growth -> sales rise (product is established, people are aware of it, sales grow rapidly, costs may fall as production increases, product becomes profitable, consider prices and promotion e.g. increse promotion to encourage brand loyalty)

Maturity -> sales at highest point (growth levels off, stable market share, use extension strategies to extend life of the product)

decline -> sales decrease (due to changing customer tastes, new technologies or new products, loses appeal to customeres, withdraw from sortiment, profit can still be made if it's possible to charge a high price and spent little on promotion or other costs)

Expansion strategies:

finding nw markets for existing products, developing wider product range, change appearance/format/packaging, change ingredients or components, update design

Price

pricing policy is often a reflection of the market, production costs and other costs also influence the pricing

Promotion

above the line

below the line

Place

centralized or decenrtalized