Business Studies

4. Marketing.

4.1 The market.

Market: where buyers and sellers meet to exchange goods and services

Market research: process designed to discover the needs and wants of costumers so that goods and services produced satisfy those needs and wants.

Market orientation: occurs when a business designs and makes a product which take into account the needs and wants of costumers.

Product orientation: business designs and makes a product which it hopes will be attractive to consumers.

Marketing: process of researching the market to identify customer needs and wants, designing and producing a product to satisfy desires, to finally selling a product or service to a customer. It involves:

– Market research → identify needs and wants of customers

– Designing + producing a product

– Correct price

– Correct method of promotion

– Appropriate place to distribute + sell the product.

Market segments: occurs when a business divides the total market for a product into different parts or segments by grouping together individuals, organisations or families with similar characteristics, eg:

– Age

– Gender

– Lifestyle → music lover, sports lover, etc.

Market share: the percentage of sales of the total market owned by an individual business

                Market share = Total sales of a business divided by total sales in the market x 100%

4. Marketing.

4.2 The marketing mix.

Price: refers to the amount paid by customer to purchase a good or service.

– Market forces of supply and demand → determine prices through auction(enchères) in markets(ebay). If demand is high but supply low then price is high and vice versa.

– Cost-plus pricing → cost of production of the good and add a percentage that you want to earn to it, that way you know exactly what you are earning, ex: cost of production of  bag is £30, I want to earn 50% from that product therefore I will sell it for £45.

– Penetration pricing → the pricing technique of setting a relatively low initial entry price, usually lower than the intended established price, to attract new customers. The strategy aims to encourage customers to switch to the new product because of the lower price → increase market share.

– Competition pricing → business prices the product according to what competitors are charging for their product(different newspapers) → allows to compete on factors other than the price.

– Skimming pricing → pricing strategy in which a business sets a relatively high price for a product or service at first, then lowers the price over time.

– Promotional pricing → business reduces prices to attract extra customers.

Promotion: refers to the strategies a business can use to inform consumers about its products or services and persuade them to make a purchase.

– Above-the-line promotion → any promotion that is placed in the media and paid for by the business, eg: sponsoring a tv show/sport stars, product placement.

– Below-the-line promotion → any other type of promotion than that of paid-for media, eg: competitions, emails, free gifts/samples, loyalty cards, etc.

– Persuasive advertising → encourage customers of your rival business to switch to your brand and to give your existing customers a reason to stay loyal to your brand. Sounds and imagery are used to appral to a person’s emotions, aspirations and fear, ex: L’oreal with the slogan “because you’re worth it”.

– Informative advertising → tends to highlight the key aspects of a product rather than try to use advertising techniques that seek to persuade, ex: football team advertises details of the time, date and ticket prices for a match.

– Advertising media → crucial for a business, they have to choose between a variety of media → TV, radio, cinema, newspapers and magazines, billboards(affiches sur la route) and internet. The choice depends on different factors:   – Marketing objectives

                                – Target market

                                – Coverage required

                                – Type of product

                                – Budget

– Public relations → process of projecting a positive image of the business to the outside world.

Place: refers to the method or methods a business use to get its product to the customer.

– Channel of distribution → refers to the number of intermediates that a product goes through after production until it reaches the final customer, ex: Producer → Wholesaler → Retailer → Customer.

– Methods of distribution£(to the customer):

         → Department stores: sells products of a wide variety of businesses in their store

         → Chain stores: established by business, platform to sell their goods without intermediary

         → Discount stores: large quantities of branded goods sold at a discount price

         → Superstores: large stores, customers can buy from computers to kitchen utensils

         → Supermarkets: sell groceries

         → Direct sales: producer selling directly to the customer                

         → Mail order

         → E-business

Product: the aspect of marketing mix that refers to developing and providing a product that consumers want to bus.

– Goods → tangible items that the customer buys.

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