What is marketing?

What are the limitations of market share?

Different results can be obtained if two methods are used which makes it difficult to interpret the results Markets can change rapidly especially in services or technology-based industries, making it difficult to track changes over time Data on sales or profits can be hard to obtain

What factors affect market growth?

Economic growth: The rate at which GDP of a country is growing will also affect the rate of market growth. Incomes of consumers: increases in income increases the consumers' willingness and ability to pay for the product. Changes in consumer tastes and preferences: Consumer tastes can change in favour or against the product. Technological Advancement: inventions and innovations like on-line buying and selling can lead to growth in the market

What is the importance of market size?

Firms can be able to calculate its own market share The firm can easily see if the market is growing or declining Marketing manager can assess whether a market is worth entering or not

What are the benefits of calculating growth?

It enables the business to plan ahead by looking at the market growth trend Growing market indicates opportunities

What are some illustrated examples of businesses which have a high market share?

1. Apple Inc.: Apple is an excellent real-life example of a business that commands a large absolute market share and dominates the industry within which it operates. In the smartphone industry, it is one of the market leaders, fighting very strong competitors such as Samsung and Huawei. In the majority of the markets in which Apple operates, the US-based company enjoys, on average, a market share of 70%. 2. Colgate: Colgate is another excellent example of a company that commands a large absolute market share. In the toothpaste industry, Colgate accounts for over 80% of all toothpaste sales.

How does a business increase its market share?

1. Innovation Innovation is an excellent method of increasing market share. Innovation can be in the form of product innovation, production method innovation, or simply introducing new technology to the market that competitors are yet to offer. With innovation, a company can gain an edge over its competitors and dominate the industry. Innovation is one method by which a company may increase market share. When a firm brings to market a new technology its competitors have yet to offer, consumers wishing to own the technology buy it from that company, even if they previously did business with a competitor. Many of those consumers become loyal customers, which adds to the company's market share and decreases market share for the company from which they switched. 2. Lowering prices A company can also expand its market share by lowering its prices. Lowering prices will attract more customers and help widen the customer base and increase sales, hence increasing the market share of the company. 3. Strengthening customer relationships By strengthening their existing customer relationships, companies protect their existing market and ensure no loss of the existing customer base owing to high competition. This also increases customer satisfaction, which in turn helps increase customer base through word-of-mouth. By strengthening customer relationships, companies protect their existing market share by preventing current customers from jumping ship when a competitor rolls out a hot new offer. Better still, companies can grow market share using the same simple tactic, as satisfied customers frequently speak of their positive experience to friends and relatives who then become new customers. Gaining market share via word of mouth increases a company's revenues without concomitant increases in marketing expenses. 4. Advertising Advertising is an expensive yet effective way to increase market share. With heavy, cutthroat competition in the market, advertising is an excellent way of gaining an upper hand over competitors. 5. Increased quality Customers are getting increasingly conscious about the quality of a product in addition to its price. By ensuring higher quality standards, a company can increase its market share. 6. Acquisition Acquiring a competitor is a sure method of establishing dominance over an industry. By acquiring a competitor, a company not only gains access to a new customer base, but it also reduces competition and helps establish dominance over an industry and increase market share.

What is a direct competitor?

A businesses that provide the same or very similar goods or services.

What are some examples of companies which use market segmentation?

Numerous types of businesses use market segmentation to optimize their ability to sell to a wide variety of consumers, including: Skincare, haircare, and beauty product manufacturers Car companies Clothing and apparel suppliers Banks and other financial institutions Television networks and media outlets A simple example of B2C demographic segmentation could be a vehicle manufacturer that sells a luxury car brand (ex. Maserati, ferrari, mercedes). This company would likely target an audience that has a higher income. Then there other manufacturers of vehicles such as ford, peugeot and more which provide options for those on lower incomes.

What is market orientation?

This an inward approach to marketing whereby product decisions are based on consumer demand and established by market research.

What is a brand leader?

This is the product with the highest market share.

What is Demand?

This is the quantity of a good or service that consumers are willing and able to purchase at a given price at a given time.

What is supply?

This is the quantity of a good or service that suppliers are willing and able to supply at given prices.

What is an industrial market?

a market for which customers are other businesses and they buy products as inputs to their own processes. It is also known as a business market. It consists of individuals or groups who purchase a specific kind of product for any of the following purposes: Resale Direct use in producing other products General use in daily operation for example lighting in schools, stationery for organizations' offices

What is a consumer market?

a market whose customers are final users of the product such as members of the public. They are ultimate/ final consumers who consume either by themselves or for family use. They do not buy a product to make another product for resale.

What is a market segment?

a sub-group of a whole market in which consumers have similar characteristics.

What are the different features of a market?

a).Location: Firms should know who their customers are and where they are located. A firm may operate locally, Nationally, regionally or internationally. Customers in all these geographical areas may have different needs and wants depending on cultural, economic or historical factors b) Market Size:is the measurement of all the sales of businesses that are supplying to the market. Size of market can be estimated or calculated by the local market sales of all businesses in the market. There are two methods that can be used to determine market size Value of goods sold:- the total amount spend by customers buying products for all sellers in the market (total revenue/ total sales) Volume of sales: refers to the total physical quantity of products which were sold by all firms in the market i.e total number of units sold by all firms c).Market Growth d).Market Share e).Competitors

What are the different types of markets?

a)Consumer Market b)Industrial Market

What is asset-led marketing?

an approach to marketing that bases strategy on the firm's existing strengths and assets instead of purely on what the customer wants.

What is product orientation?

an inward-looking approach that focuses on making products that can be made - or have been made for a long time - and then trying to sell them.

psychographic segmentation

dividing a market into different segments based on social class, lifestyle, or personality characteristics

Whata are marketing objectives?

he goals set for the marketing department to help the business achieve its overall objectives.

What is niche marketing?

identifying and exploiting a small segment of a larger market by developing products to suit it.

What is market segmentation?

identifying diff erent segments within a market and targeting different products or services to them.

What is a marketing strategy?

long-term plan established for achieving marketing objectives.

What is product differentiation?

making a product distinctive so that it stands out from competitors' products in consumers' perception

Demographic segmentation?

segmenting markets by age, gender, income, ethnic background, and family life cycle

geographic segmentation

segmenting markets by region of a country or the world, market size, market density, or climate

What is mass marketing?

selling the same products to the whole market with no attempt to target groups within it.

What is marketing?

the management task that links the business to the customer by identifying and meeting the needs of customers profitably - it does this by getting the right product at the right price to the right place at the right time

What is market growth?

the percentage change in the total size of a market (volume or value) over a period of time.

What is market share?

the percentage of sales in the total market sold by one business. This is calculated by the following formula: firm's sales in time period total market sales in time period × 100

What is a USP?

the special feature of a product that diff erentiates it from competitors' products.

What is societal marketing?

this approach considers not only the demands of consumers but also the eff ects on all members of the public (society) involved in some way when firms meet these demands.

What are the advantages of market segmentation?

■ Businesses can define their target market precisely and design and produce goods that are specifically aimed at these groups, leading to increased sales. ■ It enables identification of gaps in the market - groups of consumers that are not currently being targeted - and these might then be successfully exploited. ■ Diff erentiated marketing strategies can be focused on target market groups. This avoids wasting money on trying to sell products to the whole market - some consumer groups will have no intention of buying the product. ■ Small firms unable to compete in the whole market are able to specialise in one or two market segments. ■ Price discrimination can be used to increase revenue and profits - see Chapter 18.

What are the advantages of societal marketing?

■ It is an attempt to balance three concerns: company profits, customer wants and society's interests. ■ There may be a diff erence between short-term consumer wants (low prices) and long-term consumer and social welfare (protecting the environment or paying workers reasonable wages). Societal marketing considers long-term welfare. ■ Businesses should still aim to identify consumer needs and wants and to satisfy these more eff iciently than competitors do - but in a way that enhances consumers' and society's welfare. ■ Using this concept could give a business a significant competitive advantage. Many consumers prefer to purchase products from businesses that are seen to be socially responsible. ■ A societal-marketing strategy, if successful, could lead to the firm being able to charge higher prices for its products as benefiting society becomes a 'unique selling point'.

What are the limitations of market segmentation?

■ Research and development and production costs might be high as a result of marketing several diff erent product variations. ■ Promotional costs might be high as diff erent advertisements and promotions might be needed for diff erent segments - marketing economies of scale may not be fully exploited. ■ Production and stock-holding costs might be higher than for the option of just producing and stocking one undiff erentiated product. ■ By focusing on one or two limited market segments there is a danger that excessive specialisation could lead to problems if consumers in those segments change their purchasing habits significantly. ■ Extensive market research is needed.

What are the benefits of a high market share?

■ Sales are higher than those of any competing business in the same market and this could lead to higher profits too. ■ Retailers will be keen to stock and promote the best-selling brands. They may be given the most prominent position in shops. ■ As shops are keen to stock the product, it might be sold to them with a lower discount rate - say 10% instead of 15%, which has to be off ered by the smaller, competing brands. The combination of this factor and the higher sales level should lead to higher profitability for the producer of the leading brand. ■ The fact that an item or brand is the 'market leader' can be used in advertising and other promotional material. Consumers are oft en keen to buy 'the most popular' brands

What are the Advantages of niche marketing?

■ Small firms may be able to survive and thrive in markets that are dominated by larger firms. ■ If the market is currently unexploited by competitors, then filling a niche can off er the chance to sell at high prices and high profit margins - until the competitors react by entering too. Consumers will oft en pay more for an exclusive product. ■ Niche market products can also be used by large firms to create status and image - their mass-market products may lack these qualities.

What are the advantages of mass Marketing?

■ Small market niches do not allow economies of scale to be achieved. Therefore, mass-market businesses are likely to enjoy substantially lower average costs of production. ■ Mass-market strategies run fewer risks than niche strategies. As niche markets contain relatively small numbers of consumers, any change in consumer buying habits could lead to a rapid decline in sales. This is a particular problem for small firms operating in only one niche market with one product.

What are the benefits of market orientation?

■ The chances of newly developed products failing in the market are much reduced - but not eliminated - if eff ective market research has been undertaken first. With the huge cost of developing new products, such as cars or computers, this is a convincing argument for most businesses to use the market-oriented approach. ■ If consumer needs are being met with appropriate products, then they are likely to survive longer and make higher profits than those that are being sold following a product-led approach. ■ Constant feedback from consumers - market research never actually ends - will allow the product and how it is marketed to be adapted to changing tastes before it is too late and before competitors 'get there first'. Compare the market-orientation concept with that of product orientation (or product-led businesses).

Why are marketing objectives important?

■ They provide a sense of direction for the marketing department. ■ Progress can be monitored against these targets. ■ They can be broken down into regional and product sales targets to allow for management by objectives.They form the basis of marketing strategy. These marketing objectives will have a crucial impact on the marketing strategies adopted, as without a clear vision of what the business hopes to achieve for its products, it will be pointless discussing how it should market them.

What makes marketing objectives effective?

■ fit in with the overall aims and mission of the business − the marketing objectives should reflect the aims of the whole organisation and they should attempt to aid the achievement of these ■ be determined by senior management − the key marketing objectives will determine the markets and products a business trades in for years to come and these issues must be dealt with by managers at a very senior level in the company ■ be realistic, motivating, achievable, measurable and clearly communicated to all departments in the organisation