1. National 4/5 Business Management 2015-16
Marketing
National 4/5 Business Management

2. What is Marketing?
Marketing is more than just advertising and selling. It involves identifying consumers’ needs and wants and meeting them in such a way that the producer makes a profit.

3. The Role of Marketing
Help a business achieve increased market share – attract new customers.
Ensure that the product, price, promotion and place for sale are correct and meet the customers’ needs.
Increase sales and therefore maximise profits.

4. Market Research Field Research Desk Research CLIP
In order to be successful, you need to know what your customers want.
To find this out we use Market Research.
There are 2 types of Market Research:
Field Research
Desk Research
CLIP

5. Field Research
This involves gathering primary information; this is first-hand information.
We can find out this information through doing:
Surveys/Questionnaires
Interviews
Focus Groups
Test Marketing
Observations

6. Surveys/Questionnaires
These are questionnaires that are given to customers through 4 different methods:
Postal
Telephone
Online
Face to Face
Surveys are relatively cheap to do and can be given to a large number of people
However response rates to them are very low

7. Interview
This is when a trained interviewer asks someone (one on one) a set of questions.
Candidates can give detailed answers and follow up questions can be asked.
This is an expensive method (trained interviewer) and time consuming to conduct.

8. Test Marketing
This is when consumers are given products to trial and feedback their opinions.
This allows effective feedback to be gathered and changes can be made to the product.
However there is no guarantee the product will be a success.

9. Focus Group
This is when a group of people get together to discuss a product/service.
This allows for a wide variety of opinions to be gathered. People are often more honest.
However some members can dominate the group.

10. Observation
This is when a group of people are observed in a certain situation. This can be done overtly or covertly.
It allows companies to gather information on people’s behaviours and attitudes.
Often people do not want to take part in being observed by others.

11. Field Research Advantages it is specific to your needs it is accurate
it is up-to-date
Disadvantages
time consuming to collect
expensive to collect (training)

12. Desk Research
This involves gathering secondary information, which is gathered from an external source.
Information can be gained through:
Newspapers
the Internet eg competitors’ websites
Government Statistics
Market Research Agencies eg MORI

13. Desk Research Advantages less time consuming less expensive
wide range of sources
Disadvantages
information is not specific to your needs
cannot be sure about accuracy
information may be out of date
may not be objective

14. Market Segmentation
A market is made up of different types of consumers each with their own needs and wants.
They are grouped into segments, so that companies can tailor products for each group.

15. Why Target Marketing?
Products can be made specific to the customers’ needs.
The promotion, price and place can be tailored to the target market and increase their chances of sales.

16. Market Segmentation Groups
gender
religion
area
age
education level
social class
political persuasion
family structure

17. The Marketing Mix (4P’s)
Product
Price
Promotion
Place

18. Product – Product Development
Idea – The idea has to be decided upon and worked through to see if it is viable.
Analyse – Conduct Market Research to see if customers would be interested.
Prototype – Develop a first draft of the product.
Test – The product should go through significant testing in the company and with consumers.
Launch – Once changes have been made the product can be launched on to the market.

19. Product Lifecycle
Products pass through certain stages of development during their existence.
This is called the Product Lifecycle.
The length of a product’s lifecycle can vary depending on the product.

20. Product Lifecycle
Maturity
Decline
Growth
Introduction

21. Product Lifecycle - explained
Introduction
product is launched onto the market; advertising and promotion begin; sales are increasing slowly.
Growth
as product becomes well-known through word of mouth, sales increase rapidly.
Maturity
product is well-established, sales reach their peak and start to level off.
Decline
sales fall as demand decreases. Product may be withdrawn from the market.

22. Extension Strategies
A company can extend the lifecycle of a product by injecting new life into it, using extension strategies.
This can be done through altering one or more of the 4P’s:
Product – altering packaging, new features
Price – changing the price
Promotion – new promotion, special offers
Place – changing location sold e.g. Internet

23. Extension Strategy
Extension
Maturity
Growth
Introduction

24. Product - Branding
Branding is an expensive process but it brings many tangible rewards if a business gets it right. It is a product that is seen in the eyes of the consumer as different from other similar products (unique).

25. Product - Branding Benefits Costs Can charge a premium price
High awareness
Perceived high quality
Easier to launch new products
Huge initial financial outlay
High marketing costs
Counterfeit goods
Own Brands

26. Own Brands
Established brands are under increasing pressure from cheaper ‘own brands’.
Consumers are increasingly more aware of these brands.
Supermarkets have seen an increasing growth in own brand sales.

27. Price
Your price should appeal to consumers, however, consumers look at pricing in 2 ways:
if it is too low, they think that the quality may be poor
if it is too high, they will think it is not worth the money

28. What Price?
The price for a product should be based on what the customer is prepared to pay:
Competitors’ prices
Position of product in the PLC
Cost of manufacture
Time of year
Profit level expected
Suppliers’ prices
Point of sale
State of the economy
Government pressure

29. Promotion There are 3 main types of promotion: Advertising
Sales Promotion
Public Relations

30. Promotion - Advertising
Advertising aims to be either:
Informative or
Persuasive

31. Promotion - Advertising
Types of Advertising include:
Print – Newspapers/magazines
Broadcast – TV/Radio/Cinema
Outdoor – Billboards

32. Promotion – Sales Promotions
These are methods employed for a limited time to increase consumer demand:
Buy one get one free (BOGOF)
Discounts e.g. 10% off
Competitions
Free gifts
Product trials
Point of sale advertising eg posters displaying special offers

33. Promotion – Sales Promotions
Direct Mail – This is in the form of mail delivered to your address, promoting a product or service. Often referred to as ‘Junk Mail’.
Personal Selling – Involves salesmen coming to homes to sell a product. It may be something that requires demonstration or explanation

34. Promotion - Technology
Technology has seen a huge rise in the different ways in which companies can promote:
Website
QR Codes
Apps
Text Messaging

35. Promotions – others Other types of promotion include:
Product placement – products appear on TV/Film
Product endorsement – a celebrity promotes it
Sponsorship – of a sport or TV programme

36. Promotion – Ethical Marketing
Companies must ensure that they promote their products in an ethical way.
Promotions should be honest and not make false claims
Vulnerable groups should not be targeted with inappropriate promotions e.g. children

37. Promotion – Public Relations (PR)
The PR department will aim to enhance the organisation’s image.
They will deal with the:
Press
Government
Public
Activities they take part in include:
Press statements/press conference
Charitable donations
Customer care

38. Place
This is where the product/service is available for sale.

39. Place – Factors affecting choice
There are a number of factors which will determine how and where a company sells its products:
Competition – where they are located and method of distribution used.
Resources – how close are resources needed to produce products
Cost of premises – in/out of town
Government incentives – they may give grants for locating in a certain area
Nature of the product - is it perishable; how quickly does it need to reach the customer?

40. Distribution Methods - Road
Advantages
Disadvantages
Cheaper than other methods
Customers receive products direct to their door
Can’t transport many large products
Delays due to weather, traffic, roadworks

41. Distribution Methods - Rail
Advantages
Disadvantages
Can transport many large products
Faster method of transport than others
Will need to be transported from the train to the company

42. Distribution Methods - Air
Advantages
Disadvantages
Fastest method from one country to another
Large quantities of small products can be sent
Most expensive method.
Products need to be transported from the airport

43. Distribution Methods - Sea
Advantages
Disadvantages
Huge quantities of large products can be transported
Can be transported across the world
Most time consuming method.
Products need to be transported from the dock

44. Marketing & ICT
Marketing has been significantly enhanced with the rapid rise in the use of ICT. It can be used to enhance marketing in a number of ways:
Loyalty Cards
E-Commerce
Social Media

45. Marketing & ICT – Loyalty Cards
Loyalty Cards have enabled companies to collect a vast amount of information on customers.
They can gather information on what we buy, when we buy, and how much we spend.
It is an excellent market research tool.
Information will be stored on a computer database.

46. Marketing & ICT – E-commerce
The surge in online shopping has been huge.
A lot of businesses will either operate solely online or at least have an e-commerce facility for customers to purchase goods or services.
Advantages
Can buy products 24/7 from home
Can compare, so possibly cheaper
Cheaper for business to operate as less staff and space needed.

47. Marketing & ICT – Social Media
One of the biggest technological rises has been in Social Media.
Companies will ensure that they operate on various networking platforms to advertise to and keep in touch with consumers.