4.1 The Role of Marketing Chapter 24

What is Marketing?  The management task that links the business to the customer by identifying and meeting the needs of customers profitably.  Get 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

What is 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)

What is Market Growth?  The percentage change in the total size of a market (in volume-units or value- revenue) over a period of time. Growing markets may have many competitors so profits may not be as high as expected. The pace of growth  may depend upon external factors  may be affected by technology innovations  may be slow because of a saturated market

What is 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 Brand Leader is the company with the highest market share. X 100

Benefits of being Brand Leaders Sales are higher then competitors Retailers want to stock your product Discounts are less likely to be given increasing profits Brand leaders can take of advantage of marketing opportunities as the “leader” Name brand leaders:Computers? Cell phones? Soda? Shoes? Fast Food? Potato Chips? Sports Clothing? Cars?

Marketing Strategies  Different strategies are used for different markets Consumer markets: markets for goods and services bought by the final user of the item Industrial markets: markets for goods and services bought by businesses to be used in the production process of other products

Marketing to Business  Will promote at industrial exhibitions, trade shows, direct selling  Meet the needs of each customer by customizing products  Promote product as cost-saving or investment  Technical promotions and literature targeted to a knowledgeable buyer

Marketing to Consumers  Marketing goods is different than marketing services.  Marketing Services: Services are consumed immediately; off-peak times need to be dealt with Service quality must be right the first time as it cannot be done over More difficult to compare services between companies, so promotion must be detailed and informative People (staff) must be trained well in providing service

Marketing Approaches  Market Orientation An outward-looking approach basing product decisions on consumer demand, as established by market research.  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

Market Oriented  Requires market research to determine what customer want to buy Benefits: New products less likely to fail Product life span is likely to be longer Continuing feedback from consumers to keep product fresh

Product Oriented  Businesses invent products they believe will be useful and consumers will want. Pharmaceutical and electronics  Produce high-quality goods that consumers will value Safety equipment or gourmet foods

HL Asset-Led Marketing  Marketing strategy is based on the firm’s existing strengths and assets instead of what the customer wants.  No attempt to satisfy all customers in all markets.  A corporation reviews their strengths (including people, brands, image) and only makes products that take advantage of those strengths.  Levi Straus – only makes clothing  BMW – restricts its vehicles to the luxury market and does not sell commercial vehicles.

HLSocial Marketing  Considers the consumer needs as well as the society’s (public, stakeholders, government, community, and natural environment)  Cosmetic company does not support testing on animals  Natural Sea brand of tuna is dolphin safe  Agriculture producers farm using organic methods

HLSocial Marketing  Balance 3 things: Company profits Consumer wants Society’s interests  Considers long-term welfare of the community not short-term profits  These products are not the cheapest  Business can have a competitive edge when seen as socially responsible  Being socially responsible can be seen as a unique selling point

Marketing Plan  A detailed report on an organization’s marketing strategy SMART objectives (increase sales by 10% next quarter) Strategic plans (steps needed to be taken to achieve objectives) Specific marketing actions (which markets, by when, which methods of promotion) Budget (how will the costs of the strategy be paid)