Effective Marketing and competitive Environment
Marketing is the action or business of promoting and selling products or services, including market research and advertising.
A Niche market is a smaller segment of a larger market, which is more specialized in things.
A Mass Market is a large market that targets a huge audience. The services or products it offers are designed in a special manner that targets every customer.
B2B is when a business sells its products or services to other businesses, such as telecommunication and other services or products. E.g Intel is an example of a B2B.
B2C is when a business sells its goods or products directly to its customers e.g Amazon sells its goods directly to consumers.
+ Less competition
+ Clear focus- targets particular customers
+ Builds up specialist skill and knowledge
+ Can often charge a higher price
+ Profit Margins often higher
- Lack of economies of sale
- Likely to attract competition if succesful
- Risk of over dependence
+ High profit
+ Lower costs per unit through factors such as bulk buying.
+ Mass marketing increases brand awareness.
- High fixed capital costs
- A fall in demand will lead to unused spare capacity, increasing unit cost.
What are the main elements of the Marketing Mix?
Product: New Products can bring in new customers, they give a competitive advantage. They also allow companies to maintain a balanced product portfolio.
Price: The main benefit of using cost-based methods of pricing is that companies can be sure of covering their production cost.
Place: The right place to sell the products is very important.
Promotion: Promotion is designed either to inform customers about a product or service, or to persuade them to buy it.
Product: What does Man United sell?
Man United sells fashion, toys, footwear, T-Shirts, footballs, luggage, jewellery and more.
Manchester United books, shirts, programmes, keyrings and many other items are sold and promoted through its website.
The product also relates to television rights, and Manchester United's own television channel.
First of all the product includes providing an excellent football team that plays and wins in an exciting way.
Their main selling point are the tickets they sell. They also sell their products globally.
They have contracts with sky and also have their own so they can stream their games on Sky. Man United also have their own TV Channel. The product also relates to television rights, and Manchester United's own television channel.
Promotion: They are being promoted by sponsor websites such as Nike.
Manchester United markets itself as a global brand. The club also engages in a range of joint promotional activities, for example with the mobile phone company Vodafone. Manchester United also promotes on their Website and they are also being promoted by news-channels and channels like sky sports.
They promote through the use of websites, sponsors and tv advertisements.
Their brand reputation is also a main factor of their promotion.
And, of course its products are sold across the globe, through the club's website and a range of other sales media.
Price: Tickets for an Adult cost £53 and 16-17 cost £32.
The club has positioned itself at the upmarket premier end of the market and, as a result, it tends to charge premium prices as evidenced by the high cost of a season ticket to watch home league games.
What is Product development + why is it important?
Product development : changing aspects of goods and services to meet the changing needs of existing customers of target a different market.
It is very important because new products or product ideas brings in new customers and also gives the business a competitive advantage. They also allow a company to maintain a balanced product portfolio.
Product development Process
A feature of a product that makes it unique from any other market.
Factors that influence product development
Product Life Cycle
1) The research and development (R&D) department develop the product.
2) The marketing department does market research
3) The costs are high, and there aren't any sales yet to cover the costs.
1) The product is launched, either in one market or in several markets. It's sometimes launched with complementary products - e.g. the Playstation© was launched with games.
1) Sales grow fast. There are new customers and repeat customers.
2) Economics of scale mean the price of manufacturing a unit goes down the more you make, so profits rise.
1 Sales reach a peak and profitability increases because fixed costs of development have been paid for.
The product doesn't appeal to customers any more. Sales fall rapidly and profits decreased.
The Boston Matrix is a model of Portfolio Analysis
All new products are question marks (sometimes called problem children or wildcats) and they have small market share and high market growth. They aren't profitable and yet could succeed or fail. They need heavy marketing to give them a chance. A business can do various things with question marks - brand building, harvesting ( maximising sales or profit in the short term) or divestment ( selling off the products).
Stars have high market growth and high market share. They're in their profitable growth phase and have the most potential. They're future cash cows.
Cash cows have high market share but low market growth. They're in their maturity phase. They've already been promoted and they're produced in high volumes, so costs are low. Cash cows bring in plenty of money. Coca Cola is a good example of a Cash Cow as you can always generate money from it and have high and stable earnings.
Dogs have low market share and low market growth. They're usually pretty much a lost cause. If they're still profitable, e.g. a chocolate bar that is still popular, but no longer growing, the business will harvest profit in the short term. If the product is no longer making a profit it can be sold off.
Marketing Mix: Promotion
Product promotions are designed to increase sales of a product or service. Promotional tactics run the gamut - from coupons to "two-fer" sales (buy one, get a second one free) to straight pound markdowns or percentage discounts and simple advertising blitzes.
Public relations (PR) is the practice of managing the spread of information between an individual or an organization and the public.
Methods of PR: product launches, conferences, product placement and other special events.
The roles of a publicity officer involve liaising with the media, writing press releases and answering enqiries from the press.
Homogenous (generic) products are the same no matter which business sells them. Brands are unique.
Brands are important because customer spay a premium price for them, and customers are loyal to them. Brands have specific brand image - a good brand has a lot of intangible benefits for customers.
Brands can be individual products - like Sprite© or KitKat. "Family Brands" like Heinz include a range of products.