1. tutor2u ™ GCSE Business Studies Revision Presentations 2004 What is Marketing?

2. tutor2u ™ GCSE Business Studies Marketing is About… Understanding the needs of customers Meeting the needs of customers Delighting customers so they…  Buy from you again  Recommend you to their friends and family  Become loyal to your products and brands Marketing is all About Customers

3. tutor2u ™ GCSE Business Studies Formal Definition of Marketing “The process of identifying, anticipating (predicting) and satisfying customer needs profitably” That’s a bit of a mouthful. What does it mean? Identifying – finding out by using marketing research about current products, the possibility of new products, and current markets and new markets Anticipating (predicting) – analysing the data collected to judge what might happen in these markets and how the products might be suited or changed, adapted or updated Satisfying customer needs – making sure the person, business or government are happy with what they are buying, will not complain and will be happy to buy again Profitably – adding value to the product so when sold, the price of a product is greater than cost of making it

4. tutor2u ™ GCSE Business Studies Four Main Kinds of Market Industrial markets  The market for manufactured products aimed at businesses, i.e. capital goods e.g. engineering, construction Consumer markets  The market for goods and services that are sold to households e.g. clothing, shampoo, holidays (see next slide for ways in which consumer markets can be categorised in more detail) Commodity markets  The market for primary products or raw materials e.g. steel, coal, coffee Financial markets  The market for services that dealing with money e.g. banking, insurance, accounting

5. tutor2u ™ GCSE Business Studies Consumer Markets Most of the markets you will study are consumer markets. They can be sub-divided into even more categories! Fast-moving consumer goods (“FMCGs”)  These are high volume, low unit value, fast repurchase  Examples include: Ready meals; Baked Beans; Newspapers Consumer durables  These have low volume but high unit value. Consumer durables are often further divided into “white goods” (e.g. fridge-freezers; cookers; dishwashers; microwaves) and “brown/black goods” (e.g. DVD players; games consoles; personal computers) Soft goods  Soft goods are similar to consumer durables, except that they wear out more quickly and therefore have a shorter replacement cycle. Examples include clothes, shoes Services  E.g. hairdressing, dentists, childcare

6. tutor2u ™ GCSE Business Studies Marketing Orientation Businesses can develop new products based on either a marketing orientated approach or a product orientated approach. A marketing orientated approach means a business reacts to what customers want. Most successful businesses take a market-orientated approach. A product orientated approach means the business develops products based on what it is good at making or doing, rather than what a customer wants Most markets are moving towards a more market- orientated approach because customers have become more knowledgeable and require more variety and better quality To compete, businesses need to be more sensitive to their customers needs otherwise they will lose sales to their rivals.

7. tutor2u ™ GCSE Business Studies Measuring the Market Not all markets are the same  Some are very large, some small  Some markets are focused on a particular location; others operate around the world We need a measure of a market – most often we talk about “market size” Market size means the number of customers in the market (either current or potential buyers) and the amount (value or volume) that they buy. One business rarely sells to all the customers in the market. They will have a share of the market with the rest shared out amongst one or more competitors.  Market share by value: using sales in a specific period (usually one year)  Market share by volume: using units sold or bought as a measure of size Market share is an important idea. There is lots of evidence to show that businesses that enjoy a large share of a market achieve higher profits than smaller competitors.

8. tutor2u ™ GCSE Business Studies Role of Marketing in a Business Marketing is perhaps the most important activity in a business because it has a direct effect on profitability and sales. Larger businesses will dedicate specific staff and departments for the purpose of marketing. It is important to realise that marketing cannot be carried in isolation from the rest of the business. For example:  The marketing section of a business needs to work closely with operations, research and development, finance and human resources to check their plans are possible.  Operations will need to use sales forecasts produced by the marketing department to plan their production schedules.  Sales forecasts will also be an important part of the budgets produced by the finance department, as well as the deployment of labour for the human resources department.  A research and development department will need to work very closely with the marketing department to understand the needs of the customers and to test outputs of the R&D section.