Friday, August 10, 2012

Chapter 16: The market and marketing


What is marketing?


A market is where buyers and sellers come together and exchange their products for money. It can be in the streets, on the internet, in shops around the world, etc… Customers and sellers exchange both goods and services for money.


Product-orientated and market-orientated businesses


A product orientated business focuses on the quality and price of the product before finding a market for it to sell in. These type of businesses usually produce basic needs. New technology could be developed this way, and customer wants are created by advertising.




Other big companies cannot afford to produce a product that will not sell, so they have to do market research first to find consumer wants before developing a product. They are called market-orientated businesses. They will need to set up a marketing budget for this, which is a financial plan for marketing of a product, which contains the amount of money the Marketing department may spend on marketing.


What is marketing


Marketing is the management process which identifies consumer wants, predict future wants, create wants and find ways to use these wants to the fullest (most profitably). In other words, businesses try to satisfy wants in the most profitable way possible. Marketing covers a wide range of activities such as: advertising, packaging, promotion, etc…


The Marketing department


Most businesses will have a Marketing department, which will have a Marketing Director. He will be in charge of things such as R&D, distribution and pricing. Here is an organisational chart showing what departments the marketing director controls:

  • Sales department: Responsible for sale and distribution of products for each region. There may also be an export department.
  • Research and Development department: Responsible for finding out consumer wants and developing new products. They also need to find ways to improve an existing product.
  • Promotion department: In charge of advertising and promotion. It will need a marketing budget which limits the amount of money it can spend.
  • Distribution department: It transports products to their markets.

The objectives of marketing


A successful Marketing department should be able to achieve these objectives for the business:

  • To increase sales revenue and profitability.
  • To increase market share (percentage of sales a product has in a market).
  • To maintain or improve image of a product or company.
  • To target a new market or market segment.
  • To develop new products or improve existing ones.

SWOT analysis


This is a method to evaluate the statistics of a product of business. It assess these things:

  • Strengths (internal)
  • Weaknesses (internal)
  • Opportunities (external)
  • Threats (external)
Strengths and weaknesses of a product are its internal factors, while opportunities and threats are external factors.


Market segments


Market segments are parts of a market which contains people which have similar preferences for their products. The Marketing department should know which segment their product fits the most, so that they can advertise and sell their products to it.


There are two ways to segment markets. By the type of product or the attributes of the customers buying it. Here are two types of markets which are segmented based on the product:

  • Mass market: Where there is a large number of sales of a product. (e.g. Pepsi can be bought anywhere)
  • Niche market: A small market for specialised products. (e.g. Ferrari cars)

Here is how a market can be segmented regarding people buying the product:

  • Income
  • Age
  • Region
  • Gender
  • Use of product
  • Lifestyle

It is very important to target the right market segment since it can increase
sales by a lot. If a business can analyse all of these market segments, they may find a market segment whose needs are not being met. This is when the business finds a gap in the market, and it could produce goods to take advantage of this gap and again increase
sales.


The marketing mix


The marketing mix is a term that describes how products are marketed. You must remember that before marketing can be achieved, market research is needed. The rest is summarized into the four P's. Let's look at them briefly first, since they will be covered in other chapters:

  • Product: Design and quality, competitiveness, packaging, etc…
  • Price: There are different pricing strategies. Businesses need to use them so that they increase sales.
  • Promotion: Advertising and promotion. Discounts, TV adverts, sales, packaging,
    etc…
  • Place: The location of the point of sale (the shop). Channels of distribution. Type of shop (wholesaler or retailer?)
A successful product require effective use of the four P's. However, businesses must be careful to not let each of these factors counteract each other (e.g. expensive but low quality goods), else the product will fail. 

Thankee all for reading.

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43 comments:

  1. Very useful information but not in detail. Could have been more useful if the internal and external sources of information were more neatly and clearly explained. This kind of explanation is not enough. But overall it is great !

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    Replies
    1. Enternal and external is not on chapter 16, but on chapter 17.

      Delete
  2. Thank you so much for these notesss =)

    ReplyDelete
  3. i agree with the person above me the information is not in detail.. :/

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  4. Sorry mate this is meant to be a summary of the book therefore its supposed to be simple :)

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  5. you are awesome!!! i read the book but it was a lot and i didn't have time to read the whole book and i have a test in 4 hours ...this helps a lot!thxx! :)

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  6. haahahhahhaha this is funny ,

    ReplyDelete
    Replies
    1. What, is funny? Your just stupid!!
      Now that's funny:)))hahahahaha

      Delete
  7. For a test, the teacher can ask you anything and this is NOT enough at all to study for the test.
    You have to study the text book or you won't get very far with these very basic notes!!!!
    A good job anyways, perfect for revision, not studying!!:)

    ReplyDelete
    Replies
    1. girl..., i SO agree!!!
      stop posting incorrect stuff!!!

      Delete
    2. Excuse yourself, this is merely for revision hence why its summarised. Nothing here is incorrect. The only incorrect thing here is the fact that you're here posting your opinion. Go ahead and read the textbook.

      Delete
  8. Thanks mate, you're Awesome !! :-D

    ReplyDelete
  9. Hey mr. Spitfire:))
    I love you for these notes, I would kiss you if I could!!!

    ReplyDelete
  10. Thanks for your notes. I have a business test tomorrow and I don't have my book. Cheers man you saved my life :)

    ReplyDelete
  11. Bandits ten o'clock high!

    ReplyDelete
  12. Fire when you get a lock on em!

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  13. Thanks man, I have my business mock exam tomorrow and I haven't even started my revision. Thanks for the notes which save my life. :) Finger crossed that I could do well for the exam tomorrow.

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  14. It is helpful. Thanks for these notes.

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  15. can you give some examples of each one of the SWOT analysis??

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  16. very nicely done!! This helps my exams and makes everything much more simpler rather than reading the book itself!

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  17. Bogeys approaching from your 3 o'clock!

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  18. Fire only when fired upon.

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  19. Dear readers,
    As a student i want let the rest of ya'll know that these are not study notes notes but revision notes for quick revision. The best way to study and understand is by reading the textbook.Read these notes only after you have properly studied the chapter.
    For example, you already studied chapter 16 for a minor test a couple of months ago; now it is being tested again for a major exam so you use these notes by Mr.Spitfire to recollect what you learnt earlier.
    You cannot do well by just reading these notes alone.

    I also want to thank Mr.Spitfire for these excellent notes( I wouldn't spend time writing down all these notes even for myself!)

    Your Sincerely,
    Strider.

    ReplyDelete
  20. Bro, it's y'all, not ya'll. :)

    ReplyDelete
    Replies
    1. oh yeah...
      cuz you+all=y'all and not ya'll.

      Delete
    2. Yes, that's exactly why, jackass.

      Delete
  21. the first heading should be 'what is a market' and not 'what is marketing' because that comes later. your title is what is marketing but you've explained what a market is.

    ReplyDelete
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  23. Bandits ten o'clock high!

    ReplyDelete
  24. Very helpful, thank you a lot!

    ReplyDelete
  25. am an igcse student and i like it ,, really useful

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  26. very helpful :D

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  27. y dont create links between pages?
    that would be really helpful!

    ReplyDelete
    Replies
    1. Why don't you shut up?
      That would be really helpful!

      Delete