Marketing and the Competitive Environment
Market: A place in which goods and or services are sold within.
Marketing: The action of promoting and selling products and or services, including market research and advertising.
Niche Market: Operating within a market to satisfy the needs of a specific segment of consumers within said market using a unique selling point.
Mass Market: Operating within a large market to cater for the majority or all of the consumers within said market.
Business2Business: Firms which provide products and services only to other businesses. An example of a B2B firm is Ca-Pita.
Business2Consumers: Firms who ultimately sell products and or services to consumers. An example of a B2C firm is Samsung.
Product Differentiation: When mass marketing firms sell specifically tailored goods for wholesalers and Business2Business firms. An example of a wholesaler which uses product differentiation is CostCo.
Effective Marketing Mix For MUFC
- Tv Rights
- Personalised Goods
- Charity Work
- Community Service
- Tv Adverts
- Indirect Promotion; News and Tv channels
- Old Trafford
- Away games
Using the Marketing Mix: Product
Product Development: Changing aspects of goods or services to meet changing needs of existing customers or to target a different market.
Full Product Launch: When a new product is released for public consumption.
Managing the Product Cycle: This is monitoring the sales and stages of a product after it has been released into the market.
Unique Selling Point: A feature or an element that makes the product different from its competitors within the same market. This is important because USP's attract the customer as the feature sets it out compared to its competitors.
Question Mark: A product which has a high market growth, however it only has a low market share. Apples Question Marks would be the MacBook.
Stars: A product which is an upcoming success for a company. It will have a high market growth and a high market share. Apples Star would be the iPad.
Dogs: A products which sucks the money from a company without creating revenue. It will have a low market growth and low market share. Apples Dog would be the AppleTv.
Cash Cows: A product which continuously sells and generates good revenue for a company. It will have a high market share and a low market growth. Apples Cash Cows will be the iPhone and iPods.
Promotion: In the context of marketing, the process of communicating with customers or potential customers. (Promotion can also describe communication with other interested groups, e.g. shareholders and suppliers)
- Informative promotion: Is intended to increase consumer awareness of the product and its features.
- Persuasive promotion: Is intended to encourage consumers to purchase the product, usually through messages that emphasise its desirability.
Aims of Promotion (AIDA): Promotion has a range of different purposes. AIDA describes the process of a successful promotional campaign.
- Attention: The first step in a promotional strategy is to get the attention of the consumer.
- Interest: Having gained the attention of the consumer, promotions will then try to make people interested in the product.
- Desire: Promotions will then try to give consumers reasons for purchasing the product —desire for it.
- Action: The final step is converting desire into the action of purchasing the product.
The Promotional Mix: The coordination of the various methods of promotion in order to achieve overall marketing targets. These include:
- Public Relations (PR): PR involves gaining favourable publicity through the media. An article in a newspaper that praises a product can raise awareness in a very cost-effective way. It is not paid for, so it is more authentic and trusted by consumers. It may be unreliable, as it depends on the media’s use of the story. It is extremely cost-effective when it does work.
- Branding: Branding is the process of differentiating a product or service from its competitors through the name, sign, symbol, design or slogan linked to that product. Brands can add value to a product and a firm, as consumers are more likely to buy well-known names. If one product within a brand gains a good (or bad) reputation, it can affect customers’ loyalty to all of the products using that brand identity.
- Merchandising: Merchandising describes methods of persuading consumers to take action at the ‘point of sale’ (PoS). Persuading retailers to offer more shelf space to a supplier and Providing attractive displays to persuade consumers to buy at the point of sale are examples of merchandising. Merchandising is well-suited to ‘impulse buys’.
- Sales Promotions: These are short-term incentives used to persuade consumers to purchase. Popular methods include: –Competitions
–‘Three for the price of two’ or BOGOF (Buy one get one free) offers
–Product Placement (Featuring a product in a film)
- Direct Selling: This takes four main forms: –Direct mail
- Advertising: The process of communicating with customers or potential customers through specific media (e.g. television and newspapers). The main advertising media are: –Television
–Internet and other electronic media
- Sponsorship: Giving financial assistance to an individual, event or organisation. Common examples include companies sponsoring: –Sports teams (e.g. Football clubs)
–Venues, such as the O2Arena
–Good causes (e.g. Charity events) A company can create goodwill and closer links by inviting customers to events. However, sponsorship can be unpredictable. An unexpectedly good cup run for a rugby team, or a scandal involving the person sponsored can affect the results.
- Trade Fairs and Exhibitions: Most exhibitions and trade fairs are used for business-to-business marketing. They can be used to: –‘Network’ (Get to know people in other businesses)
–Demonstrate products to potential customers
–Provide detailed information and brochures
–Allow customers to test out and order products
Marketing Mix: Price
- Cost Plus Pricing; Percentage above the cost.
- Price Skimming; New products can be up put up at high prices at launch to maximize profits.
- Penetration Pricing; New products can be put very low to grow market share at launch.
- Price Leaders: Have the largest market share for an existing product, allowing them to dictate the price. Eg. Asda
- Price Takers: Companies that work within a competitive, that have a small market share, who have no control over the pricing of their products. Eg. News agents
- Pricing Tactics: Short term pricing plans designed to achieve a particular short term objective.
- Pricing Strategies: Long term pricing plans which take into account the objectives of the business and the value associated with the product.
- Loss Leaders: Products sold at less than the cost to attract customers to as a product range.
- Psychological Pricing: The use of prices that make the produce sound cheaper. Eg. £99 instead of £100, or 99p instead of £1.