Marketing

What is a market?

 Any place
where buyers
and sellers
meet
 Consumer Markets

 Consumer markets - are made up of

individuals who purchase goods/services
for personal or domestic use.

 Consumable goods - eg, food, cosmetics,

magazines

 Durable goods - eg, cars, televisions,

clothes
 Industrial Markets

 Industrial markets - organisations which

purchase goods and services to use in the
production of other goods and services.

 Consumable goods - eg, raw materials

 Durable goods - eg, machinery and equipment

 What is Marketing

 “Marketing is the management

process responsible for
identifying, anticipating &
satisfying consumer
requirements profitably”
 About Marketing

 Marketing finds out consumers needs and what

products meet them “Customer is king”
 Marketing is a business philosophy and an on-
going process
 Marketing affects ALL aspects of business
 Marketing is NOT just selling
 Marketing and advertising are NOT the same
 What is the Role of
Marketing
 To identify, anticipate and satisfy
customers needs
 Providing customers with desired
goods/services = profits
 To ensure customer awareness or
goods/services
 Marketing Objectives

 Target a new market or market segment

 Achieve or maintain market share

 Develop new range of products

 Improve image of product

 Marketing Activities

 Market Research
 New Product Development
 Selling
 Pricing
 Promotion and Advertising
 Preparing Publicity Information
 Factors leading to
Importance of Marketing
 Economic Growth – booms = more disposable
income. Marketing is needed to gain market share
 Fashion – Marketing attempts to anticipate trends
and/or changes in tastes, lifestyle
 Technology – New product innovation is essential
for firms to keep up with competitors
 Competition – rivals may come from overseas.
Firms have to be aware of the market
environment both at home and abroad
 Product Orientation

Production Manufacture Aggressive Customers

Capabilities Product Sales
Effort

Production Orientation is when a business

focuses on the production process and seeks
to make goods which are viewed as superior
British Motorcycle Industry

 Britain ruled the world of

bikes in 30s and 40s.
 BSA, Norton & Triumph
neglected consumer tastes
as sleeker models arrived
 Suzuki, Kawasaki and
Honda catered for this.
Look at what happened!
 Market Orientation

Customer Potential Marketing Customers

Market Products
Needs
Opportunities
&
Services

Market Orientation starts with the

consumer and looks at consumer needs. It is
customer orientated.
Sony Walkman

 Designed due to
people’s needs for a
small tape recorder
 Workers used
headphones to listen
to music and the
Walkman was born
 Henry Ford and Model T

 The World’s First

Assembly Line churned
out the Model T Ford.
 Henry Ford ‘boasted’
that “it was available in
any colour… as long as
it’s black!”

Ford was customer orientated because the savings made

by the assembly line were passed down to the customer
by offering cheap automobiles
 Advantages of Market
Orientated approach
 Respond quicker to changes in market
due to market research
 Stronger position to meet new
competitors
 Can anticipate market changes
 More chance of new product success
 The Marketing Environment

Consumer trends and behaviour

Competition Political

THE MARKET

The Economy Technology

Social
 “It is useless to tell a river to stop
running; the best thing is to learn how to
swim in the direction it is flowing.”

 Anonymous
 Market Share
USFast Food Sales

McDonald's
31%
36% Burger King
Wendy's
7% KFC
Others
7% 19%

Market Share is the percentage of customers who

buy/use a company’s goods/services
 Market Growth

 Increasing market share means a

business increases sales at the expense
of competitors.
 However, firms can also increase sales if
the whole market grows.
 Market growth occurs when the number
of people buying/using the good/service
increases
 Marketing Mix

The 4Ps
 Product
 Price
 Place
 Promotion
 Product/Service
Product
The good or service which the business is trying
to sell. Most important element a it determines
what the price will be (Price), how it is
promoted(Promotion) and where it is sold
(Place).
Core Product provides a basic need
Augmented Product is made more attractive
to the customer by having additional features.
Fast Moving Consumer
Goods
 Some goods sell more
quickly than others and in
greater quantities. These
types of goods have
different marketing mixes
compared to say a
premium brand. They are
called FMCGs.
 Coffee, cereals, chocolate,
hair care and detergents
are examples of FMCGs.
 Tangible and Intangible
 Products are tangible, in that we can touch and
feel them.
 Services are intangible, for you cannot touch or
feel the act of being transported. It is
performed for you. Therefore we cannot
compare the physical characteristics of the
service.
 What we do is we compare the process, people
and physical environment of the service.
 Marketing of
Services
 Think of two rival cinemas. They usually offer the
same films, but which one do you prefer?
 Process – how does the customer go through the
experience? Queues? Long periods of waiting?

 People – what are the staff like? Friendly?

Helpful?

 Physical Environment – are the surroundings eye

catching? Beautiful?
Product Line

 Many businesses produce

a range of products with
similar uses and similar
characteristics.

 For example, the iPod

and the iPod mini are
both variations of the
same product solution.
 Product Mix
 The product mix is the product range or
different types of product a business
manufactures and sells.

So Apple, as well as having the iPod, the also have

Applebooks and the Apple Mac computer.
Product Life Cycle
 Product Life Cycle

Products have a natural ‘lifespan’.

Some are very short others are around
for decades.
The life of a product can be prolonged
by using extension strategies. However
all products go through a number of
distinct phases.
 Stages in Cycle
Development Stage – many products will never
progress past this stage. Development of new
products is essential but can be very costly. Before
launching it may be test-marketed. Modifications can
then be made based on feedback.
Introduction Stage – heavy advertising at this stage to
make consumers aware of the product. Sales are slow
and costs are high.
Growth Stage – consumers more aware of the product
and sales start to grow rapidly. It is during this stage
that the product begins to become profitable.
 Stages in Cycle

Maturity Stage – sales reach their peak. Advertising

costs are lower and development costs should have
been repaid. The product is at its most profitable.
The business will work to keep the product in this
stage for as long as possible. This can be done by
using extension strategies.
Decline Stage – Sales and profits start to fall. Mobile
phone sales are beginning to decline if firms wish to
stay in business they will have to create new phones
or new demand for phones.
 Extension Strategies

Reducing Price Therefore Promoting More

Frequent Use of Product – reduce cost of
texting to mobile phones.
Developing New Markets for Existing Product
– Computers were originally manufactured for the
business market, moved into home market.
Finding New Uses for Existing Products – fire
lighters now used for barbeques.
 Extension Strategies

Develop a Wider Range of Products – new

versions of same product can produce new
interest from consumers. Irn Bru – range of can
and bottle sizes, fruit chews, ‘alco-pop’ market.
Developing Styling Changes – introducing
slightly different product – football strips.
Effects of Extension
Strategies
 Boston Box (Product
Portfolio)
Market Share
High Low

High

Market
Growth
Low
 Boston Box - Strategies
Stars Problem Children
Build sales/market share Build selectively
Invest to turn into cash Harvest or divest rest
cow
Cash Cows Dogs
Hold sales/market share Harvest or
Use excess cash to Divest
invest in stars, problem
children
 What is a New Product?

 New to the world

 New product lines
 Additions to existing product lines
 Improvements and Revisions to existing
products
 Repositioned products

5 out of every 6 new products fail!

Adoption of Innovation
 Stages of New Product
Development
 Generate Ideas
 Analysis and Further Research
 Are the Products Marketable?
 Prototype
 Test Marketing
 Full Launch
 Product Failures

 Investigate one of the following…

 New Coke
 Sony Betamax VCR
 McDonald’s Arch Deluxe
 Maxwell House Ready-to-drink coffee
 Sinclair C5
Sinclair C5
 Reasons for Failure

Poor Market Research

Intense Competition
Weak or No USP
Product Cannibalisation
 Product Cannibalisation
 When launching a new product companies
must be aware of the potential for the
product to eat into the sales of one of their
existing products.
 When Kit Kat released Kit Kat Chunky, sales
were good, but overall sales for the Kit Kat
family of brands were down.
 Why do firms spend vast sums of
money on product innovation?
 To achieve high profits
 To enhance public image
 Wider share of market – can become market
leader
 To compete with rivals
 To spread risk – some existing products may be
entering decline stage
 Obtain customer loyalty – encourage more
demand for their products
 Successful NPD

 Unique, superior product

 Well defined customer target market
 Close links between R&D and Marketing
 Well executed stages of NPD
 Market attractiveness
 Japanese Approach

 In Japan they use the trial and error approach.

 They do not worry about market research.
 Japanese firms release hundreds of products in
hope of getting one or two hits.
 They aim to get new products to market quickly
and at low R&D costs.
 Failures can be modified and released again.
 This approach is called Expeditionary
Marketing.
 Branding

Branding is used to create USP’s (unique

selling propositions) and ESP’s (emotional
selling propositions)
The business chooses a word or symbol, or
both, then registers them so that they can
only be used on its products. Baxter’s, Oxo,
Cadbury’s and Heinz are all well-known
brand names.
 Brands

 Brands are the personality attributed to

products and/or services.

 Without the brand, Coca-Cola is little

more than sugared water; Domestos is
just another detergent, and Chiquita is a
banana just like another.
World’s 10 Most Valuable Brands
 Characteristics of Good
Brands
• legally protectable
• easy to pronounce, remember and recognise
• attract attention
• suggest product benefits (eg.:Easy off) or
suggest usage
• suggest the company or product image
• distinguish the product's positioning relative to
the competition
 Brand Equity…
is the value built-up in a brand. It can be positive or negative.
Positive brand equity is created by a history of effective
promotion and consistently meeting or exceeding customer
expectations. Negative brand equity is usually the result of
bad management.
The value of a company's brand equity can be calculated by
comparing the expected future revenue from the branded
product with the expected future revenue from an
equivalent non-branded product. This calculation is at best
an approximation.
Positive brand equity can allow family branding, which makes
new product introductions less risky and less expensive.
 Corporate Branding…
refers to the practice of using your company's name as a
product brand name. Disney, for example, includes the
word 'Disney' in the name of many of its products. So
do IBM, Pepsi, and Coca-Cola.
One advertising campaign can be used for several
products. It also helps new products being introduced
because customers are already familiar with the name.
A corporate branding strategy should only be used if
the company is already well known by the target
market and also has a very positive image in their
minds.
 Corporate Branding (Contd.)

If corporate branding is done well, the corporate

name can become synonymous with a product
category (e.g.: Kleenex). Even purchasers of
Charmin will refer to the product as Kleenex.
The main disadvantage with corporate branding
is the products are not treated as individuals;
hence there is not adequate focus on the
products' unique characteristics.
 Benefits of Branding
Instant recognition of the product by the
customer.
Brand loyalty – repeat purchases
Higher prices can be charged
Quality is associated with it
Easier to launch new products
Good after sales service
May lead to purchases of other products with
same brand name
 Drawbacks of Branding

Time is taken to establish a brand

Promotion costs will be high
Bad publicity for one product can affect the
whole range of same-brand products
Fake products may appear. These imitators are
very difficult to stop. (Burberry, Rolex and Calvin
Klein who can charge premium prices for their
products suffer most at the ands of the forgers.)
 Own Brands

Most of the supermarket chains, and large

retailers such as Boots, offer a wide range of
products under their own brand names.
These can be produced by the supermarket or
by a manufacturer who is contracted to
produce goods for the supermarket.
 Advantages of Own Brands
Own brands will attract more customers and
more sales within the store.
Producer will have guaranteed sales
Products are cheaper

Disadvantages of Own Brands

Some customers believe ‘own brands’ are of lower
value than established brand names (although this is
not necessarily true).
 Price
Consumers will only pay what they can afford and
what they think is a reasonable price for the
product.
Consumers use price as a measure of quality.
When setting a price for a product you need to
consider:
Costs of production
Profit mark-up
Competitor prices
 Long Term Pricing Strategies
Low Price - Charge lower than competitors. Only appropriate
where there is a little brand loyalty and competition in the
market is high.
Market Price - Setting price at a similar price to competitors.
Homogeneous product means that price competition is not of
benefit. They compete in other areas – service etc.
High Price - High quality products, premium goods and
services where image is important, such as perfumes.
 Short Term Pricing
Strategies
Skimming -using a high price initially for a new
product where there is little competition.
Penetration Pricing - used to introduce a
product to an established market. Allows the
business to achieve sales and gain market share
very quickly. Usually set a low price to attract
customers. Once product is established price can
increase.
 Short Term Pricing Strategies
Destroyer Pricing - Setting a very low price to destroy the
competition. Product probably being sold at a loss,
however once competition is destroyed the price will return
to market price.
Promotional Pricing - Used to boost sales and create
interest in a product by lowering the price. Supermarkets
use this for some of their sales lines, as loss leaders.
Demand-orientated Pricing - Price varies with the
demand, ie crops, trains, phones etc.
 Place

Producers

Producer to Wholesaler

Producer to Retailer
Wholesalers
Two or more intermediaries
Direct Selling
Retailers

Consumers
Wholesalers…

 they buy large quantities

of product from suppliers
and sell them on in
smaller volumes to
retailers or business
users. The wholesaler
provides a link between
the producer and the
retailer, saving the
producer time and money
in delivering direct to the
retailer.
 Retailers…

the shop which sells goods to the general public.

Retailers offer a variety of goods and services
from a variety of producers.
Goods are stored on their premises and are
prepared for sale and display them for sale.
 Types of Retailers
 Independent retailers – most
common type and can be best
illustrated as your local corner shop.
 Multiple chain stores – a number of
outlets across the country with a well-
known name. E.g. Marks and Spencers
 Supermarkets – offer a wide range of
groceries, clothing and electrical goods.
E.g. Tesco, Sainsbury’s
 Department Stores – offer a range of
goods within different departments.
Normally specialise in premium brands.
E.g. House of Fraser, Debenhams
 Franchises – offer a new
business a chance to trade
using a successful formula,
e.g. McDonald’s.
 Mail Order – rather than
having expensive shops to
run they issue catalogues to
consumers who can select
products in the comfort of
their own home. Successful
due to the credit facilities
offerd. E.g. Freeman’s
 Door-to-door – companies
like Avon take orders from
people’s doorstep.
 Agents…

 an independent person or company appointed to handle

sales and distribution within a specified area. Agent’s income
comes from commission they make on each sale.
  Agents carry out promotional activities to attract customers
and sell them the product. Car manufacturer’s use agents to
sell to local markets because they should have better
knowledge of the market.
 One drawback is that if an agent sells many different
products, yours might not be given the attention needed.
Importer/Exporters…

play a similar role to the

agent but on an
international scale. They
will have superior
knowledge of the world
markets, and can create
sales through their own
promotional campaigns.
Sometimes act as retailers
too.
 Choice of Distribution
Channel
The Product – perishable, unique
The Market – size – Mars Bars
Legal Requirements – alcohol, drugs
Buying Habits – expectations of customers
The Business – own distribution network
 Choice of Distribution
Channel
 The Product – Perishable products which have a limited shelf-life
should select a direct channel. However, some perishables like fish,
fruit and vegetables sometimes go through specialist wholesalers
who buy from small producers in order to make up the bulk needed
fro retailers. Premium brands are selective where they are sold, and
both Calvin Klein and Levi’s have prevented Tesco selling them in
their stores. 
 The Market – if the market is nationwide, then to save in
distribution costs, then using wholesalers and retailers are more
efficient. If the market is small and local, direct selling is more apt.
 Legal requirements – some goods can only be sold through
licensed premises such as chemists, pubs and off-licenses.
 Choice of Distribution
Channel
 Buying habits – consumers influence where products
are distributed. The emergence of out-of town retail parks
have seen identikit sites open up nationwide. Each one
contains supermarkets, carpet stores, furniture stores,
DIY stores, Garden centres etc. People now expect these
type of stores to be located in such places.

 The business – some firms have their own distribution

process with their own wholesalers and retailers. Once
common among large organisations, most of these
functions have been outsourced.
 Types of Promotion

Advertising
Sales Promotion

Direct
Merchandising Promotion Mail

Exhibitions and Personal Selling

Public Relations
Trade Fairs
 What is Promotion

Method used to pass on

information to consumers
an essential way of keeping
existing customers and
getting new ones
 Above and Below the line

 Above the line promotion: advertising

through consumer media such as TV,
magazines, newspapers and radio.

 Below the line promotion:

promotions used other than main media
such as point of sale, sales promotions
etc.
 Methods of Promotion

1. Advertising
2. Sales promotion
3. Public relations
4. Merchandising
5. Packaging
6. Exhibitions and trade fairs
7. Direct mail
8. Personal selling
 Types of Advertising
Informative: Health Education Board for Scotland
– smoking, drugs, alcohol etc
Persuasive: used in very competitive markets,
use powerful images and language – ‘Probably the
world’s favourite lager.’
Corporate: promoting the whole company not a
single product – BP adverts focus on their ‘green
image’ not on the product (petrol)
Generic: the whole industry come together to
promote the whole industry – Scottish Beef,
Scottish Tourism
 Advertising
is a 'paid for' communication. It is
used to develop attitudes, create
awareness, and transmit
information in order to gain a
response from the target market.
There are many advertising 'media'
such as newspapers (local, national,
free, trade), magazines and
journals, television (local, national,
terrestrial, satellite) cinema,
outdoors advertising (such as
posters, bus sides).
 Informative Advertising
used to pass on information
about new or improved
products, or to give
information about a
technical product. The
government uses
informative advertising in
the media. E.g. HEBS
regularly run ads to
change Scottish unhealthy
lifestyles and eating
habits.
 Persuasive Advertising
…a hard sell by manufacturers to
get us to buy their products.
Often used in competitive
markets where there are few
USPs between products. They
use powerful images and
language to try and get us
emotionally involved.

E.g. Levi use distinctive adverts to

persuade us they are cool to
wear.
 Corporate Advertising…

like corporate
branding, where the
whole company is
promoted not just
individual products.
Generic Advertising

When rivals come together

and sell not their individual
products, but their market
or industry as a whole.
A recent example would be
during the BSE crisis,
British Beef advertised in
unison to try and allay
consumer’s fears.
The Milk Board is another
such example.
 Choice of Advertising Media

How and where an organisation carries out

its advertising will depend on how it can
best reach its existing and potential
customers.

–Young audience: teen magazines, Hollyoaks

–Older people: Sunday newspapers, daytime
TV
–Whole market: Coronation Street
 Types of Advertising Media
Print: newspapers and magazines
Broadcast: TV, radio, Internet
Outdoor: billboards, buses, round football grounds etc
Which one is chosen depends on:
•Cost: TV expensive but memorable
•Target audience: choice of programme, newspaper
•Competitors’ Advertising: usual to match competitors
•Impact required: new product  wide variety of methods
•The Law: tobacco and alcohol
 Sales Promotion…
tends to be thought of as being all
promotions apart from
advertising, personal selling, and
public relations. For example the
BOGOF promotion, or Buy One
Get One Free. Others include
couponing, money-off
promotions, competitions, free
accessories (such as free blades
with a new razor), introductory
offers (such as buy digital TV
and get free installation), and so
on. Each sales promotion should
be carefully costed and
compared with the next best
alternative.
 Sales Promotion – Into the
Pipeline

•Dealer Loaders: 6 boxes for the price of 5

•Point-of-sale displays, posters, videos etc
•Dealer competitions
•Staff training for the shops
•Sale or return
•Extended credit
 Sales Promotion – Out of the
Pipeline

•Free samples
•Bonus packs: 50% free
•Price reduction: 50p off offer
•Premium offers: one product is free when
you buy another
•In-store demonstrations and tasting
•Merchandising: in-store displays
Public Relations…
is defined as 'the deliberate, planned
and sustained effort to establish
and maintain mutual understanding
between an organization and its
publics' (Institute of Public
Relations). It is relatively cheap,
but certainly not easy. Successful
strategies tend to be long-term and
plan for all eventualities. All airlines
exploit PR; just watch what
happens when there is a
disaster.The pre-planned PR
machine clicks in very quickly with
a very effective rehearsed plan.
 Public Relations

•The way an organisation communicates at a

corporate level with: the public, the press, the
government and shareholders
•Will involve: press statements, making charitable
donations, sponsoring events, arranging product
endorsement
•Publicity: internal through press releases or external
through news reports or consumer programmes. Not
usually paid for, can become advertising if it is good
publicity.
Merchandising
is an attempt to create an atmosphere
or mood to attract customers into
stores via elaborate displays, posters
etc. Layout of stores are designed
for customers to follow routes
whereby to get to the popular selling
products they have to pass less
popular ones, in the hope of making
a sale.

Similar products are stacked together

for customer ease. Prices for shelf
space vary, the most expensive for
producers to get is at eye-level.
Products at eye-level out perform
other, similar products.
 Merchandising
•An attempt to encourage the customer to buy at the point-of-
sale by using window displays, posters,etc

•Layout of products: popular items at the back of the store to

make customers walk passed less popular items.

•Related items together ie soap powder

•Products at eye level are the best position to achieve sales

•Well stocked shelves, the right atmosphere ie bright lighting

can create a feeling of cleanliness near fresh food. The smell
of coffee or baking can make customers hungrier.
 Packaging
Good packaging can increase sales of a product. Factors
that
should be considered:
Shape and weigh: can affect distribution costs
•Protection: product must not be damaged in transit or be
affected by heat, light or dust
•Convenience: easy for the customer to handle
•Design: eye-catching to distinguish from competitors
•Information: legal requirements (food labelling), technical
requirements (wattage on bulbs)
•Environmental factors: public concern about recyclable
materials and excess packaging
 Personal Selling…
is an effective way to manage personal
customer relationships. The sales
person acts on behalf of the
organization. They tend to be well
trained in the approaches and
techniques of personal selling.
However sales people are very
expensive and should only be used
where there is a genuine return on
investment.
For example salesmen are often used
to sell cars or home improvements
where the margin is high.
 Direct mail
is very highly focused upon targeting
consumers based upon a database. As
with all marketing, the potential
consumer is 'defined' based upon a
series of attributes and similarities.

Creative agencies work with marketers to

design a highly focussed communication
in the form of a mailing. The mail is sent
out to the potential consumers and
responses are carefully monitored.

For example, if you were marketing

medical textbooks, you would use a
database of doctors' surgeries as the
basis of your mail shot.
 Trade Fairs and Exhibitions
Such approaches are very good for
making new contacts and renewing
old ones. Companies will seldom sell
much at such events. The purpose is
to increase awareness and to
encourage trial. They offer the
opportunity for companies to meet
with both the trade and the
consumer.

Expo has recently finish in Germany

with the next one planned for Japan
in 2005, despite a recent decline in
interest in such events.
Sponsorship…

is where an organization
pays to be associated
with a particular event,
cause or image.
Companies will sponsor
sports events such as
the Olympics or Formula
One. The attributes of
the event are then
associated with the
sponsoring organization.
 Target Markets

 Undifferentiated or Mass Marketing

 When a product is sold to the entire market

 Differentiated Marketing
 When a product is offered to a group or
groups within the total market
 This is done by Market Segmentation
 Undifferentiated marketing

Firm Market

Marketing mix
 Differentiated marketing

Segment 1
Marketing mix 1
Firm Segment 2

Marketing mix 2
Segment 3

Marketing mix 3
 Concentrated marketing

Segment 1

Firm Segment 2

Marketing mix Segment 3

 Methods of Market
Segmentation
• Age • Size of family
• Race • Income
• Gender • Work
• Lifestyle • Location
 Socio-Economic Group

A. Higher managerial, administrative or

professional
B. Intermediate, clerical, administrative or
professional
C1. Supervisory, clerical, junior administrative or
professional
C2. Skilled manual
D. Semiskilled and unskilled
E. State pensioners, widows, casual and lowest
paid
CONSUMER RESEARCH
Copy this table into your jotter and complete it to show the most likely
purchasers (and target market)of the various products

Detail Age Sex Socio-

group economic
group
Pint of beer in pub 18-30 M C
The Financial Times
Cardigan from Next
Tommy Hilfiger Sweater
Jeans from Gap
Porshe sports car
Can of Irn Bru
New talking Action man
New style roller blades
Month’s holiday in
Portugal in January
 Psychographic Segmentation

• Segments people according to lifestyle.

• Lifestyle is a person’s individual pattern

of behaviour.
• Includes;
• attitudes, beliefs, interests, hobbies,
habits, religion
 Stages in Life
1 Bachelor stage: young, single, not living at home
2 Newly Weds: young, no children
3 Full nest 1 Youngest child under 6
4 Full nest 2 Youngest child 6 or over
5 Full nest 3 Older couples with dependent kids
6 Empty nest 1 Older married couples, no kids living
with them, head of house in employment
7 Empty nest 2 Older married, no children living at home,
head of house retired
8 Solitary survivor in employment
9 Solitary survivor retired
What form of marketing is this?
What form of marketing is this?
What form of marketing is this?
 Answers…

 A – Differentiated marketing

 B – Undifferentiated marketing

 C – Niche marketing
 Niche Marketing

 Niche Marketing is when a business

targets a product at a small segment of a
market

 Tie Rack is an example of a Niche Market

 Golf Tourism in Scotland is another.

 Niche Marketing

 Advantages  Disadvantages
 Niche market may be  If successful, larger
overlooked competitors may
enter market
 Gain competitive
 Niche markets are
advantage smaller and may
suffer more frequent
swings in consumer
spending
 Positioning

 Products are then ‘positioned’ by firms to fit a

particular segment. This means how customers
feel about a product. Their perceptions about a
product.
 The two most common values judged are price
and quality.

 Here is an example of a positioning grid

(sometimes called a Perceptual Map)
 Position these cars by Price
and Economy (Fast/Slow)
 Ferrari
 Cougar
 BMW
 Hyundai
 Proton
 Cougar
 Daewoo
 Market Research

What is Market Research?

“The collection, collation, and
analysis of data, relating to the
marketing and consumption of
goods and services”
 Market Research Provides
Information About
 Size and nature of market
 Age, sex, income & preferences of
market
 Effectiveness of selling methods
 What customers think and feel about
product
 Effectiveness of advertising & promotion
 What can businesses use
market research for?
1. Descriptive reasons:
What is happening in a market?
2. Predictive reasons:
What will happen in the future?
3. Explanatory reasons:
Why is something happening? E.g. Why is our
product only popular in one region?
4. Exploratory reasons:
E.g.Could this new product work?
 Primary (Field) Research

1. Questionnaires 5. Observations
2. Personal 6. Technology e.g.
interviews loyalty cards
3. Telephone 7. Focus Groups
interviews 8. Customer panels
4. Postal surveys
Used to collect Primary data
 Sampling
 Sampling is a way to find the views of the
population without asking everyone!

 There are 2 main types:

 Random Sampling
 Quota Sampling
 Random and Quota Sampling
 Random Sampling – a randomly generated list
of individuals free of bias, but not targeted at any
market segment. Names can be taken from
telephone directory or electoral register.

 Quota Sampling – a group selected to reflect a

proportion or characteristics (age, sex, marital
status etc.) of the whole population. Cheaper than
random sampling but can be less representative
than the random method
 Primary Research +/-

+ -
 Only firm that  Expensive to collect
collects it has access  Lengthy time
 Can be involved, info could
controlled/verified be out of date
 Secondary (Desk) Research

Used to collect secondary data.

Examples:
 Sales figures
 Annual Reports and data
 Internet data (other businesses websites
for example)
 Secondary (Desk) Research

 Government publications:
e.g. ‘Social Trends’
 European Union – publications by
‘EUROSTAT’
 Commercial publications:
e.g. ‘Keynote’, ‘Verdict’ etc.
 Secondary (Desk) Research
+/-
+ -
 Saves time  Not specifically
related to
 Relatively
project
inexpensive undertaken
 Cannot be
verified
 Problems with Market
Research

• Human behaviour is
unpredictable
• Sampling and bias
• Other forms of bias e.g. leading
questions