Principles and Purposes of Marketing: A High School Introduction, Slides of Business

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PRINCIPLES AND

PURPOSES OF

MARKETING

A 1

T H E R O L E

O F

M A R K E T I N

G

What are the

similarities and

differences between

these 2 markets?

PRINCIPLES AND

PURPOSES OF

MARKETING

 In this topic you will learn about

 (^) Principles and purposes of marketing:  (^) Anticipating demand  (^) Recognising demand  (^) Stimulating demand  (^) Satisfying demand  (^) Marketing aims and objectives:  (^) Understanding customer wants and needs  (^) Developing new products  (^) Improving profitability  (^) Increasing market share  (^) Diversification  (^) Increased brand awareness and loyalty  (^) Types of markets  (^) Mass market  (^) Niche market  (^) Market segmentation  (^) Branding, brand personality, brand image, unique selling point (USP), implications of business size of marketing activity, budgetary constraints, availability of specialist staff

PRINCIPLES AND PURPOSES OF MARKETING  (^) The principles and purposes of marketing i.e. why do businesses carry out marketing, include:  (^) Anticipating demand  (^) Forecasting sales  (^) Identifying trends  (^) Primary and secondary market research  (^) Recognising demand  (^) Identifying a gap in the market  (^) Forecasting market trends  (^) Understanding customers’ wants and needs  (^) Primary and secondary market research Demand is the amount of a good or service society is willing and able to buy at a set price at a given point in time. B Using information to develop the rationale for a marketing campaign will look at this in more detail.

PRINCIPLES AND PURPOSES OF MARKETING  (^) The principles and purposes of marketing, include:  (^) Stimulating demand

 Informing existing and potential customers about the

products

 Generating interest

 Developing brand recognition

 (^) Satisfying demand

 Meeting customer needs

 Developing new products

 Changes to the marketing mix

C Planning and developing a marketing campaign will look at this in more detail.

MARKETING OBJECTIVES  (^) Understanding customer wants and needs

 With a view to satisfying them

 Anticipating changing tastes and preferences

 Gaining a competitive advantage

 (^) Developing new products

 Innovative products

 Extensions to existing products

 Responding to technological advancements

 (^) Improving profitability

 Increasing revenue whilst maintaining costs e.g. more

repeat purchases

 Charge higher prices as a result of brand loyalty

MARKETING OBJECTIVES  (^) Increasing market share  (^) Market share is the proportion of total market sales that a firm has  (^) Market share can be calculated as:  (^) Business A sales/market sales x 100  (^) Wider brand recognition  (^) Diversification  (^) Bringing out new products for new markets  (^) Spreading risk  (^) Building brand strength

IN PAIRS  (^) Prepare a short presentation about the confectionery market  (^) Show your understanding of all the terminology covered under marketing objectives

Mondelez

wins with share bags but Mars suffers after do

wnsizing

TYPES OF MARKETS  (^) Mass markets  (^) A product is targeted at a wide range of people  (^) The market is not segmented i.e. the characteristics of types of customers are not an important factor  (^) Products appeal to a wide range of customers  (^) Products are widely available through a range of markets  (^) Mass media is used to advertise the products How many of Nestlé's brands are in a mass market?

Draw a spider diagram of products that are sold in a mass

market.

MASS MARKETS AND NICHE MARKETS  (^) Market size – this is the total value or volume of sales in the market. It can be measured in money terms e.g. £20 million or by the amount sold e.g. 1 million cars  (^) Calculated as: Number of units sold x price  (^) Market share – this is the proportion of total market sales that a firm has  (^) Calculated as: Sales of one firm/Total market sales x 100 Use the terms market size and market share to explain the difference between a mass and a niche market.

M A R K E T S E G M E N TAT I O N  (^) Market segmentation occurs when the market is split into subgroups of consumers with similar characteristics  (^) This helps to identify different types of consumer and different wants and needs  (^) Segmentation methods include:

 Demographic

 Geographic

 Income

 Behavioural

G E O G RA P H I C S E G M E N TAT I O N  (^) Geographic segmentation defines market categories based on where people live e.g. regions, cities or neighbourhoods  (^) People in different geographical areas display different characteristics and needs e.g.

 The South East of England is generally warmer than Scotland

 Tastes and traditions vary between countries

 Infrastructure in rural areas will differ from that of cities

How has McDonald’s had to reposition its products to meet the needs of the Indian market?

I N C O M E

S E G M E N TAT I O N

 (^) Identifying subgroups of the market based on their levels of income and profession  (^) A common method uses socio-economic groupings  (^) A – Higher managerial such as chief executives and directors  (^) B – Intermediate managerial such as solicitors, accountants and doctors  (^) C1 – Supervisory, clerical or junior professional such as teachers and junior managers  (^) C2 – Skilled manual such as plumbers, electricians and carpenters  (^) D – Semi and unskilled workers such as refuse collectors and window cleaners  (^) E - Pensioners, casual workers, students and unemployed Visit the Ford website

• select 3 models of cars and explain which socio economic group each car would suit.

IMPACT OF MARKET SEGMENTATION

 There are a number of benefits for businesses and customers of

market segmentation:

 Advertising can be targeted at specific market segments so that

advertising spend is more effective

 The most profitable and least profitable customers can be

identified

 Least profitable markets can be avoided

 It becomes easier to identify and launch new products

 It helps the firm improve existing products and customer service

 Businesses are better able to meet the specific needs of groups

of customers

 Greater variety of goods and services available in the market

IN PAIRS  (^) Select one industry e.g. watches, jewellery, mobile phones, hotels  (^) Identify how the market is segmented  (^) Produce a poster to illustrate the use of market segmentation in your chosen industry