IB Business Management Unit 4/Section 4.1 The Role of Marketing

4.1 the role of marketing On completing this chapter you should be able to Define marketing and understand its relationship with other business functions. Explain the difference between the marketing of goods and the marketing of services. Distinguish between market orientation and product orientation. Explain the difference between commercial marketing, social marketing and social media marketing. Describe the elements that characterize the market in which an organization operates. Calculate market share. Examine how the concepts of innovation, ethics and culture influence marketing practices and strategies.

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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.

Marketing Management Functions Market research Product design Pricing Advertising Distribution Customer Service Packaging

MARKETING OF GOODS AND SERVICES Marketing of goods is based on the four P’s of the marketing mix: Product Price Promotion Place Marketing of services includes three additional aspects of: People Process Physical evidence

Marketing Approaches Market Orientation Product Orientation The focus is to identify the needs of the customers first by market research and then develop the product that will satisfy them. The aim is outward looking and to make products that customers will buy rather to sell products that the firm can manufacture. E.g. Ford, Samsung. Product Orientation A product-oriented firm focuses on producing a quality product with attractive features and hope that the product will sell by itself. The firm will focus on the technical qualities of the products. Such an approach is inward looking. E.g. Apple and Mercedes, have been able to operate successfully by focusing on the quality of their products. However, many companies, e.g. Kodak and Nokia have lost their customers base by ignoring new trends.

Marketing Approaches Commercial marketing Social marketing Involves the use of marketing strategies by profit-making organizations to achieve profit maximization. Most marketing activities are about commercial marketing, and determine consumer needs and wants before using appropriate strategies. Social marketing Social marketing is any activity to influence social behavior using concepts from commercial marketing. E.g. Aids awareness and anti-smoking campaigns. Today, many non-profit organizations and government agencies will undertake market research before launching any activity to bring social change. The marketing objectives of not-for-profit organizations is not primarily profit related and include promoting a cause, maximize donations, creating a positive image of the organization, etc. Social media marketing The use of the Internet through social networking websites to market a firm’s product or service.

Market characteristics 1. MARKET SIZE: Total level of sales of all producers within a market. Can be measured by volume of sales (units sold) Can be measured by value of sales (total revenue generated) 2. MARKET GROWTH: The percentage change in the total size of a market (in volume- units or value-revenue) over a period of time. Market growth% = (the difference/the original ) x 100 3. MARKET SHARE: The percentage of sales in the total market sold by one business. Market share% = (firm’s sales for time period / total market sales for time period) X 100 Market Leader is the company with the highest market share.

Student workpoint 4.3 table 4.1.3 BMW CASE STUDY Pg. 256 oxford Student workpoint 4.3 table 4.1.3 Pg. 254 oxford