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Business studies: market & marketing AS-level
Transcript of Business studies: market & marketing AS-level
Market research is used to find out the answers to these questions:
What features of my product do people like/dislike?
What type of promotion would be effective with these type of customer?
Would they be willing to buy my product?
What price would they be prepared to pay?
What type of customer would buy my product?
What is the competition like?
What is market research?
Types of information
Market research can find out:
Quantitative information(used to find about quantity of something)
Qualitative information(Where an opinion/judgment is needed)
Both information can be gathered as a result of :
There are various ways of collecting data for primary research:
Process of primary research
What is the purpose of the market research?
Which is the most suitable method?
Which size of the sample will be needed?
Who is the target?
Carry out the research
Collate the data and analyze the results
Produce a report of the findings
Internal sources of information
External sources of information
trade and employer association
Government reports and statistics
Market research agencies'reports
Role of marketing
So what is a market???
The term is vital to achieve an understanding of marketing. It has two rather different meanings. Perhaps the most obvious meaning is 'The place or mechanism where buyers and sellers meet to engage in exchange'. But market also refers to the group of consumers that is interested in a product, has the resources to purchase it, and is permitted by the law to do so. It is also known as potential market.
Marketing objectives and
The long-term objectives of the company will have a significant impact on both the marketing objectives and marketing strategy adopted. A business with clear short-term profit targets will focus on maximizing sales at the highest price possible. In contrast, a business with longer-term objectives, which may include both profitably as well as the achievement of goals of social responsibility, may adopt a "societal marketing" approach. Marketing objectives are goals set for the marketing department to help the business achieve its overall objectives. Marketing strategy is a long-term plan established for achieving marketing objectives.
Examples of marketing objectives
Increase market share -perhaps to gain market leadership
rebranding a product to give it fresh appeal
Increasing total sales levels
market development -selling existing products in new markets
Why are marketing objectives so important?
They provide a sense of direction for the marketing department.
Progress can be monitored against these targets
They can be broken down into regional and product sales target to allow for management by objectives.
They form the basis of marketing strategies. These objectives will have a crucial impact on the marketing strategy adopted, as without a clear vision of
the business hopes to achieve for its products, it will be pointless discussing
it should market them.
Market orientation and product orientation
An outward-looking approach basing product decisions on consumer demand, as established by market research
Chances of product failing in the market are greatly reduced.
likely to survive longer and make higher profits
Constant feedback from customer allow beneficial flexibility in the product
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
An approach to marketing that bases strategies on the firm's existing strength and assets instead of purely on what the customer wants.
An approach to marketing that considers not only the demand of consumers, but also the effects of all members of the public ("society") involved in some way when firms meet these demands
Market: Size, Location, growth & share
Market size: The total level of sales of all producers within a market. This can be measured in two ways: Revenue or units sold.
The size of a market is important for three reasons:
The marketing manager can assess whether a market is worth entering or not.
Firms can calculate their own market share*
Growth or decline of the market can be identified
Some business just operate locally -they sell products to customers where the business is located. Firms that usually just sell in these local markets include laundries, florist shops, hairdressers and bicycle repair shops.
Market growth: The percentage change in the total size of a market (volume or value) over a period of time.
Some markets are obviously growing faster than others; some, such as non-flat TV screens, are declining very rapidly
Market share: The percentage of sales in the total market sold by a business.
Market share =
Firm's sales in a time period
Total market sales in time period
Sources of secondary research:
Local libraries and government offices
Market intelligence report
Newspaper reports and specialist publications
Internal company record
annual abstract of statistics
family expenditure survey
Important Marketing Concepts
Literally, adding value means the difference between selling price and the cost of the material and components bought in to make it. For example, a tub of luxury ice creams sells for $4. The cost of the milk, sugar, cream and flavoring is $1. Therefore the value added is
But be careful: Value added
is not the same as profit!
If the business is able to increase this added value, then the potential for greater profits is clear. Effective marketing makes this possible. Here are some examples:
Create an exclusive and luxurious retail environment to make the customer feel that they are being treated as important. This will make them feel prepared to pay higher prices and may have psychological effect of convincing them that the product is of high quality too. This approach is used, for example, with Mercedes Benz
Use high quality packaging to differentiate the product from other brands - again, widely used in cosmetics and confectionery (luxury boxes of chocolate)
Promote and brand the product so that it becomes a "must-have" brand name which consumer will pay a premium price for, even if they may realize that the actual ingredients are a little different than those used for other brands. Levis jeans and Coca-Cola are examples
Create a unique selling point (USP) that clearly differenciates the product from that of other manufacturers. Product differenciation can lend to sales success. Apple's Iphone is a good example
USP: The special feature of a product that differentiates it from competitors' products
Product differentiation: Making a product distinctive so that it stands out from competitors' products in consumer's perception
Identifying and exploiting a small segment of a larger market by developing product to suit it. This market segment in niche marketing can be a very small section of the whole market and may be one that has not yet been identified and filled by competitors. Examples of firms employing Niche marketing include Versace designs and Clinique perfumes
Mass marketing is the exact opposite. "One product for the whole market" is now becoming quite an unusual concept for firms to adopt - yet is still seen in, for example, toothpaste and fizzy drinks markets.
Market segment: A sub-group of a whole market in which consumers have similar characteristics.
Market segmentation: Identifying different segments within a market and targeting different products or services to them.
Identifying different consumer groups
Consumer profile: A quantified picture of consumer of a firm's product, showing proportion of age groups, income levels, location, gender and social class.
Total markets can be segmented in a number of different ways. The three commonly used bases for segmentation are:
The need of Market research:
To reduce the risks associated with new product launches.
To predict future demand changes.
To explain patterns in sales of existing products and market trends.
To assess the most favored designs, flavors, styles, promotions and packages for a product.
Sales department's sales records, pricing data customer records, sales report, opinions of distribution and public relations personnel, finance department and customer service department
Market research is the process of collecting, recording, and analyzing data about the customers, competitors and the market.
Most people think marketing is all about advertising and selling the product. However, this is a very limited view - marketing embraces much more than just telling people about a product and selling it to them. Marketing is the management process responsible for identifying, anticipating, and satisfying consumers' requirements profitably.
The market research process
Management problem identification
Sources of data - primary/secondary research
Focus group is the name given to a group of people who are asked about their attitude towards a product, service, advertisement, or new style of packaging.
In these discussion group, questions are asked and participants are encouraged to discuss their responses - all members of the group are free to talk with other group members. These discussions are often filmed and this is then used by the market research department as a source of data.
Quantitative research techniques
1) Observations and recordings
2) Test marketing
3) Consumer surveys
Consumer surveys usually have four important issues
Who to ask?
What to ask?
How to ask?
How accurate is it?
There are several different ways of selecting an appropriate sample:
This involves the selection of a sample from a population based on the principle of random chance. It is more complex, more time consuming and usually more costly than non-probability sampling. However, because the sample is selected randomly and the probability of each unit's inclusion in the sample can be calculated, very reliable estimates can be made about both the whole target market and the chances of error occurring.
Example of probability sampling:
Simple random sampling
Each member of the target population has an equal chance of being included in the sample. To select a random sample, the followings are needed:
A list of the people in the target population
Sequential numbers given to each member of this population
A list of random numbers generated by computers
In this method, the sample is selected by taking every
th item from the target population until the desired size is reached. Example, every tenth customer will be surveyed until 30 customers have been surveyed.
549) Samyak Shah
Select the 4th ones
This method recognizes that the target population may be made up of different groups with different opinions. These groups are called strata or layers of the population and for a sample to be accurate, it should contain members of all strata
Select one from each color
This method is similar to stratified sampling. By this method, interviewees are selected according to the different proportion that certain consumer groups make up of the whole target population. For instance, if it is already known that out of all consumer of Denim Jeans:
65% are male
35% are female
over 41 10%
Then, the sample selected would conform to the same proportions. Therefore, if there were a sample of 200 people, 130 would be male, 70 female, 70 between 14-20 years and so on...
Using one or a number of specific group to draw samples from and not selecting from the whole population, eg: using one town or region.
Select those from Pune
This approach to sampling cannot be used to calculate the probability of any particular sample being selected. Non-probability sample results cannot be used to make inferences or judgments about the total population. Any general statement that are made as a result of this method of sampling must be analyzed very carefully and filtered by the researcher knowledge of the topic being researched.
Examples of non-probability sampling
Members of the population are chosen on the basis of their relative ease of access. Sampling friends, fellow workers or shoppers in just one location are all examples of convenience sampling
The first respondent refers a friend who then refers another friend and so on... This is a cheap method of sampling and is often used by companies in the financial service sector, such as health- and motor insurance companies. It is likely to lead to a biased sample, as each respondent's friend is likely to have a similar lifestyle and opinions.
The researcher chooses a sample based on who they think is appropriate to study. This could be used in an experienced researcher who may be short of time as he/she has been asked to produce a report quickly.
Ad hoc Quotas
A quota is established (say 50% women) and researchers are told to choose any respondent they wish up to the pre-set quota
Sorry everyone, but i had to include presentation of data in this Prezi... hope you find it useful.
$m of sales
Bar charts (simple)
Bar charts (percentage)
qty of petrol (L)
nb. of customer
* Histograms are frequently confused with bar charts, but there is one very important distinction. It is not the height of the bar which represents relative values, but the area of each bar. If you are still not very familiar with histograms, try this http://bit.ly/RyRvf2
qty of petrol (L)
nb. of customer
nb. of sales ($m)
And then comes the pie chart. To find the number of degrees needed for each section of the chart, remember this formula, you must.
value of one section
total value of all section
An average is a typical or representative measure of a set of data. Averages tell us something about the "central tendency" of data. There are several different types of averages that can be calculated from any sets of data. The three most frequent ones are:
Mean (also known as arithmetic mean)
Mean is calculated by totaling all the results and dividing them by the number of results.
Eg: in this case, mean=0+1+2+3+4+4+5+6+6.5 etc
last year's mean
Try finding out mean for this year. You'll find the answer in the next slide.
To find the median number:
Put all the numbers in numerical order.
If there is an odd number of results, the median is the middle number.
If there is an even number of results, the median will be the mean of the two central numbers.
since there are 20 records in each case, we need to take the average of 7.5 & 10
The mode is simply the number which appears most often.
10 in the case of last year.