Chapter 15 – MANAGING THE MARKETING FUNCTION Activity 15.1 (class answers) Q 1. Identify 2 advertisements you don’t like Q 2. Describe the elements of the ads that cause your reaction Q 3. Pick one of these ads and describe what changes you would make VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION What is Marketing? The process that provides the link between producers or providers of goods or services and consumers Marketing extends to: GoodsPlaces ServicesOrganisations ExperiencesInfo & Knowledge EventsIdeas Personalities VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION Marketing Practices Marketing is very important to the success of an organisation Marketing practices have evolved through the following 4 stages: 1. Production orientation (1930s) Based on the belief that consumers would prefer products that were widely available and inexpensive, often resulting in mass production 2. Sales Orientation (1930s s) Focused on persuading existing and potential customers to purchase the good and services currently produced by the organisation 3. Marketing Department Orientation (1970s s) Occurs when all marketing activities are bought under the control of one department to achieve the short term plans and goals of the business 4. Marketing Orientation approach (1990s – present) Occur when all of the org’s efforts are aimed in a coordinated and integrated manner towards satisfying its customers and achieving its own corporate goals VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION Marketing Practices Why use the Market Oriented Approach? -it recognises the importance of all functional areas -It lowers the risk of new G&S failing due to effective market research -it is customer oriented as the product is viewed from a customers perspective -Ongoing consumer research and feedback is sought to ensure of a product and when time is right to extend, remove or update a product VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION The Marketing Concept The business focuses on satisfying the needs of the customer rather than on selling a product or service. “Customer comes first” approach This approach is based on 4 factors: 1.Customer satisfaction 2.A total or integrated effort is required by the organisation 3.Objectives are set 4.KPIs that indicate whether objectives have been achieved Refer Page 272 Figure 15.5 VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION How does Marketing relate to business objectives? (Really important topic) Marketing as a functional area (department) within a business needs to establish its objectives to fit in with the overall aims and missions of the business Small businesses also need to establish their business objectives. It is recommended that all business should prepare a business plan. This business plan invloves not only the setting of overall business objectives but also the objectives and plans to be executed by the functional areas of marketing, finance and operations. VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION What does the Marketing Process Involve? Is a continuous study of the market by a business to ensure it is always meeting the needs of its customers Market research Identify potential customers better assist the needs of existing customer Marketing Strategy identify how the business will ‘make its mark’ on the market Marketing Mix what tools will be most effective in marketing a product what products are best marketed for the business Evaluation Is carried out to find out how success the first three steps of the process were done VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION Marketing Strategies: These are seen as the means to an end and involve the long term plans that are needed to reach the targets When deciding on a marketing strategy the following needs to be considered: -The overall strength of the business – what is the core activity and what is it good at? -Resources available – does the business have significant money, people and facilities? -Competition – what are the competitors doing? -Objectives – what does the business want to achieve from this? -If a business has decided to increase its market share, it indicates that the business already has a product or services in that market and wants to increase the percentage it holds, reducing the percentage being held by its competitors. VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION What is a Market? and What are its attributes? A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offing various need satisfying goods or services. Four basic types of market are: -Consumers – involves businesses selling mass consumer goods. Eg. Food -Businesses – Where purchasers are other businesses well informed employees purchasing on behalf of the business -Global – Businesses that decide to export their product -Not for Profit and Government markets – Organisations that are formed to provide assistance to or infrastructure for society VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION Market Segmentation: It is rare to be able to satisfy the needs and wants of everyone, market segmentation is carried out in an effort to improve a business’s precision marketing Market segmentation is midway between mass marketing and individual marketing Forms of segmentation include: (see table 15.1 Page 275) -Geographical – where a customer lives -Demographic – where a market is divided (age, gender, occupation, income, education etc) -Psychographic – where market is divided (Social class, personality, lifestyle) -Behavioural – where market is divided (Needs, benefits sought, loyalty status, kind of shopping, purchase frequency) VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION Developing a customer profile A range of variables that can be identified when defining a market to best suit a particular customer The Pareto Principle Is referred to as the 80/20 rule Study has found that: Approx. 80% of business is actually generated Approx. 20% of business is customer base (repeat customers) COMPLETE: ACTIVITY 15.4 ACTIVITY , 2, 3 & 5 VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION Determining your Target Market Niche Marketing Is a narrow segment that aims to provide products to buyers with specific desires and preferences -Customers have a distinct set of needs -Customers will often pay a premium price for the company for satisfy these needs -The company usually has no competitors -Usually sees a degree of specialisation in products or services -Will usually generate profit and market growth VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION Positioning Strategy involves a business differentiating it product or service from that of its competitors within the market segment. A business should chose its position within the market towards its strengths to get an advantage over others in the market. Factors that influence consumer behaviour: Businesses must know about their customers behaviour when trying to establish the relationship between their marketing and how the customer will respond. If customers are individuals or household members, it is recognised that the following five factors will influence their behaviour: -Cultural Factors -Social Factors -Personal Factors -Psychological Factors -Situational Factors (when, where & how) VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION Consumer Behaviour Complete Activity 15.7 Activity 15.8 VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION Consumer Trends Keeping up with the current trends is important to the financial success of a business. Some of the examples of these trends include the following: -One stop shopping has increased I popularity -Consumer have embraced e-commerce -Consumers have now become 24/7 in their purchasing -Many customers are now looking to be treated as individuals in the purchasing decisions -Consumers are now more health conscious, nutritionally informed, environmentally aware and socially concerned -The nostalgia factor is evident in consumers of different ages -The emergence of the new consumer group know as ‘tweens’ VCE Business Management Year 11

Chapter 15 – MANAGING THE MARKETING FUNCTION Activity Chapter Summary Question Additional Activity Extension Question (page 283) VCE Business Management Year 11