1. Higher Business Management
7/1/2018
Higher Business Management
Unit 2
Learning Outcome 2
Marketing
BM Unit 2 - LO2
Unit 2 - LO2

2. Marketing
“The process involved in identifying, anticipating and satisfying consumer requirements profitably”.
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3. Identifying Consumers’ Requirements
What do they want? Consumers must buy products and continue to do so
Fierce competition and consumers’ expectations mean that products must be constantly updated and altered to suit
Other factors - price, quality, prompt delivery, attractive packaging and after-sales service
Advertising and promotion play a big part
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4. Anticipating Consumers’ Requirements
What do they want today?
What do they want in the future?
Trends must be considered to anticipate future needs
Volatile markets - fashion, toys, technology (mobile phones, computers, etc)
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5. Satisfying Consumers’ Requirements
“The customer is king!”
Businesses must be customer-focused
No customers no business
Must offer - good service, quality products, value for money, prompt delivery, good after-sales service (eg returns), well presented and packaged goods, at the right price and available at the right place
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6. The casualties of not adapting to the market
The American car industry
The British motor cycle industry
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7. Marketing Successes
Swatch
Easyjet and Ryanair
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8. Marketing - a Strategic Activity
Inception/design
Price
Distribution
Selling and promotion
After-sales services
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9. Assessment of the Market
Where are the consumers of the product?
How many consumers are there?
What are their attitudes and preferences?
How effective are the distribution methods?
What are the strengths and weaknesses of competitors?
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10. Product-led - Product Orientated
Putting a product on the market without prior market research
Assumption of best available and no real competition
Often new inventions like Dyson vacuum cleaners or Playstation 2
A risky approach which can fail - British motor bikes
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11. Market-led - Customer Orientated
Considering what the customers want before putting a product on to the market
Competition has led to companies focusing on the needs of the customer
Also looks at the influences on purchasing decisions
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12. Marketing Products and Services
Consumer goods
Industrial goods (capital goods)
Services (intangible)
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13. The Marketing Environment
Consumer trends and behaviour
Competition
Government
THE MARKET
The economy
Technology
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14. Branding Branding distinguishes a product from its competitors
Instantly recognisable by consumers
Often linked to quality and reliability
Can command a premium price
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15. Unique Selling Point (USP)
Try to identify the USP of each of the products listed opposite
Think of how they are presented to you in the advertising you see daily on TV, in newspapers and magazines
Coca Cola
Nike
Kit Kat
Sunny D
Skoda Cars
Mercedes Cars
Baxter’s Soups
Fairy Liquid
Finish
(dishwasher tablets)
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16. Own Brands Products branded with the name of the store selling them
Most of the big supermarkets (Tesco) and chain stores (Boots) have their own brands
Often cheaper alternatives to branded goods
Make a list of as many “own brands” you can think of. Indicate which branded product they are designed to rival
Eg “Wheat Bisks” by Safeway to rival “Weetabix”
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17. The Marketing Mix
Product
Price
Promotion
Place
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18. Product/Service Core Actual Augmented
The basic product - eg toothpaste cleans teeth
The way the product is presented - design, brand name, packaging, etc (Colgate toothpaste - red packaging)
Additional features - protection against decay, fresh breath, attracting the opposite sex, etc
Core
Actual
Augmented
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19. The Product Life Cycle £000 Costs/Sales New Product Maturity
(Saturation)
Idea
Launch
Youth
Growth
Decline
Death
Time
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20. The Product Mix Very few companies have only one product
Some companies have a range of related products eg Proctor & Gamble
Some companies have totally unrelated products in their product portfolios eg Imperial Group
It is important that you have new products being launched to replace products going into decline in your “Product Mix”
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21. Product Innovation Generating an idea Analysing the idea
Producing a prototype
Test market
Adapt product to solve problems
Launch the product
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22. Pricing Strategies Low-price strategy Market-price strategy
in a market with strong competition
Market-price strategy
petrol – matching competitors
High-price strategy
up-market, exclusive image
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23. The Price of a Product?
The price of a product is one of the main factors in buying that product. Too low a price could give the impression of poor quality and too high a price may not give the feeling of value for money
Price is influenced by:- the product being new, what competitors are charging, the product’s stage in its life-cycle, the selling location, the market segment and many other factors
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24. Short-term Pricing Tactics
Skimming – high initial price for max profit
Penetration – low initial price for new product
Destroyer – eliminating the competition (‘Go’ and ‘EasyJet’/’Ryanair’)
Promotional – lowering prices for a period to ‘promote’ more sales
Demand-oriented – charging different prices according to the level of demand eg cross-channel ferry fares in summer
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25. Lesson Aims: Lesson Objectives:
To introduce the PLACE. Place being one of the factors from the MARKETING MIX. In addition it is one of the 7 p’s.
Lesson Objectives:
To enable pupils to:
identify places where products/services are sold
describe these places and give examples
The above objectives are CRUCIAL in your knowledge and understanding of BUSINESS MANAGEMENT in general.
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26. Place - Distribution Channels
Producer 1
Producer 2
Producer 3
Consumer
Retailer
Wholesaler
Consumer
Retailer
Consumer
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27. The Wholesaler Function
Buys in bulk from producers (low transport costs) and sells to retailers in smaller quantities
Bears stock-holding risk
Offers a wide variety of goods in small quantities
Packages and labels goods
Offers advice to both producers and retailers as to which goods are selling well
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28. The Retailer Function
Breaks down bulk to quantities consumers wish to buy and store at home
Provides information to consumers through advertising, displays and trained staff
Stores a variety of goods, displays them and marks on prices
Offers range of related services - credit, HP, after-sales service and delivery
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29. Types of Retailer Independent - convenience stores, corner shops
Multiple Chains - M&S, Curry’s, Comet, Boots
Supermarkets/Hypermarkets - Tesco, Asda, Sainsbury’s Morrisons, etc
Co-operatives
Department Stores - Debenhams, Harrods, Selfridges
Discount Stores – ALDI, LIDL, Pound Shops
Franchises - Starbucks, Costa Coffee, Body Shop, McDonald’s
Others - mail-order, internet, direct-response advertising, telephone and TV shopping channel
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30. Lesson Aims: Lesson Objectives:
To introduce the PROMOTION. Promotion being one of the factors from the MARKETING MIX. In addition it is one of the 7 p’s.
Lesson Objectives:
To enable pupils to:
identify places where products/services are promoted and the methods that are use
describe types of promotional techniques and give examples
The above objectives are CRUCIAL in your knowledge and understanding of BUSINESS MANAGEMENT in general.
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31. Advertising Decisions
The effect on Sales?
The target market?
Why do the consumers NOT buy the product?
Which is the best medium to use?
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32. Two Main Types of Promotion
Above The Line
TV and newspapers to reach mass audience
A lot of waste
Below The Line
Directly controlled by the business
Sales promotion, direct mail, trade fairs - targeted consumers who may be interested
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33. Promotional Strategies
Three main aims:
Persuading - to purchase the products
Informing - telling consumers about the product
Reminding - that the product still exists
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34. Types of Advertising Media
Print - newspapers and magazines
Broadcast - TV, radio and cinema
Outdoor - billboards, posters, etc
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35. Two Main Types of Sales Promotion
Into the pipeline
Enhancing sales to trade outlets
Helping retailers to sell to their customers eg displays, posters, videos, etc
Out of the pipeline
Helping to persuade customers to buy from retailers
Providing free samples, a percentage extra free, 2 for 1 offers, money-off coupons, etc
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36. Public Relations (PR)
Improving the image of the product and organisation
Supporting and promoting a charity
Sponsoring sporting or cultural events
Product endorsement by celebrities
Press conferences and press releases in times of difficulty or when good publicity can be obtained
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37. Market Research - Definitions
Higher Business Management
7/1/2018
Market Research - Definitions
“Market research is the systematic gathering, recording and analysing of data about problems relating to the marketing of goods and services.”
“Market research is the means by which those who provide goods and services keep themselves in touch with the needs and wants of those who buy these goods and services.”
BM Unit 2 - LO2
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38. The Need for Market Research
Higher Business Management
7/1/2018
The Need for Market Research
Predict changes required in its product/service
Identify what is selling
Identify who is buying the product/service
Explain what is happening in the market
Investigate possible courses of action
Identify the size of the market
Discover what consumers think of the product
Discover what consumers are willing to pay
Discover if a promotion is appropriate
Discover if the packaging is appropriate
Identify what competition exists - now and in the future
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39. Methods of Research - Primary
Higher Business Management
7/1/2018
Methods of Research - Primary
Primary data is gathered by field research
By observation or asking people questions
Up-to-date
Collected for the exact purpose of the organisation
Not easily available to competitors
Time-consuming
Expensive
BM Unit 2 - LO2
Unit 2 - LO2

40. Market Research - Secondary
Higher Business Management
7/1/2018
Market Research - Secondary
Internal Sources
External Sources
Sales figures
Stock figures
Accounting records
Customer comments
Sales reps reports
Market research data gathered previously
Government publications - social and economic trends, annual statistics, population census
Competitors’ data - annual reports, promotions, price lists, web sites
Newspapers, trade magazines, Mintel (research org), etc
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41. ICT and Market Research
Databases compiled by research agencies
Electronic point of sale information (EPOS)
Supermarket loyalty cards
Stock control software gives sales breakdown
Web sites - customers can comments back to the company
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42. Problems with Market Research
Sampling Bias - small sample can give a wrong impression
Human Behaviour - opinions change rapidly
Interviewer Bias - leading questions may be asked
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43. The Marketing Topic
This is probably the most important topic in Higher Business Management. Do as much reading on it as you can and arm yourself with as many up-to-date examples of marketing as you can!
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