Unit 3 Investigating Marketing

Introduction to marketing

If you want investment from the Dragons what would you have to do Now you are going to do the same!

Choose a product from the bag

You have 10 minutes to plan a sales pitch to the class for investment into your company selling the product What sort of things will you need to consider?

Team

Product Where to buy description

How much to pay

What makes it different/better/wh y would customers need it

Creativity

A B

C
D E F G

Objective
To understand what business objectives are set when carrying out marketing activities (how do you get customers to buy your products) To understand what market segmentation is (how can you put them in groups)

What are these pictures telling you?

What does/would encourage Apple to develop the Ipods further?

 Think about Shampoo

1. Write down 3 different brands or types of the product that meet different customers needs 2. Where will this be sold? Why? 3. How and where will this product be advertised? 4. How will the price differ for these 3 brands or types? 5. Are there any external factors that will affect how the product is advertised/sold/developed?

What do you want/expect from Shampoo? write 10 things

Top Trump
History Product range, new products, product reviews, design changes Target Market who are they aiming at, how do you know? Price how much do they charge, how does this compare to other brands Customer Expectations what do you/customers expect from the shampoo, can you find any reviews on the product? Place where can you buy it? Statistics

 You are required to produce an appropriate marketing mix for a new or existing product or service. Learners must choose a product with a range of users, across market segments e.g. shampoo, yoghurt or chocolate come in a range of qualities and prices and have a range of image and brand identifiers.

A. Identification of the objectives and segmentation A business will use different marketing activities depending on the objectives it is aiming to achieve. These objectives are: Understanding customer wants and needs Developing new products Improving market share (market penetration) Diversification Re-launch of product (market development) Improving profitability Increasing brand awareness

How to do it well
Explain what is meant in detail by each of these objectives Discuss why each objective may be appropriate for a company to set themselves Apply the objective to YOUR chosen shampoo brand or explain how it would use it. You will need to conduct research. Feel free to email the company, use their website and show this evidence in your portfolio (thats what appendices are for) Use pictures/print screens to explain what you mean For Mark Band 3 you need to provide a comprehensive explanation relating to all the bullet points for a this means lots of detail that makes sense and are your own words!!

Complete the table

Complete the table in the shared area/on the sheet that shows the key terms you need to be aware of and use for part A of this task Use your text book or the internet to help you

Ansoff Matrix
Objective: By the end of this lesson you will understand what the categories are of the Ansoff Matrix You will be able to group company products into the relevant categories

New design GHD straighteners Herbal Essence launched hair dye LOreal Elvive extended their range to Anti Dandruff for men because theyre worth it?

Shampoo developed by GHD to compliment the straighteners

Dove recently began targeting older ladies with their shampoo

Ansoff Matrix helps form marketing objectives Have you developed a new product
Are you trying to remind your customers that your product is still available?

that you think will impress your existing customers? (developing and improving products)

Are you trying to sell your same product to a different group of customers (age, geographically, gender?)

Are you taking the plunge and selling a new product to a lot of new customers? (risk taking, moving away from the market?)

Product Life cycle helps set objectives depending on where the product is
1) Introduction little growth, low sales. High costs on research, development and marketing to test the market (e.g BOGOF) 2) Growth if businesses begin to grow this leads to higher sales and profits. Business have the power to lower prices and invest in promoting the product 3)Maturity Most common stage for companies, high competition as companies want to maintain market share. Competitors may copy significant moves. Money more likely to be spent on developing product improvements 4)Decline The market is beginning to shrink so businesses spent costs. If the product isnt profitable the company may end it

Which stage is your product at? Which objectives will this link into?

Boston Matrix helps with product relaunch in assessing where product is

Reached the growth stage of the product life cycle good potential and will require high cash support to keep succeeding Products that have just been launched will/wont they be successful?

At the maturity stage high market share in market that is not growing rapidly. Only need to be re-launched to bring new life to the product not a lot of cash needed to survive

Products at the decline stage of the product life cycle

Questions to ask yourself when looking at Boston Matrix

Is the amount of people going to buy the product get any bigger? Eg is the amount of people who buy shampoo in the UK going to expand rapidly in the future? Do a lot of people currently buy your product? Eg is your shampoo one of the more popular brands?

Quote of the day.

Dont just throw pies and hope they hit your targetbecause you will waste a lot of pies

Instead look at who you want to hit and do everything you can to make sure you get them so there are some left over for you If you design and advert or marketing campaign without thinking about who you want to target it may not hit the people you need. Look at them instead and find a way to get there attention before you hit them

Watch the clip and write a note to describe what you see in each one
1. http://www.youtube.com/watch?v=biAFjjQp GSo 2. http://www.youtube.com/watch?v=nTKibzQ qZoI&feature=related 3. http://www.youtube.com/watch?v=00hbgaE AZAM&feature=related 4. http://www.youtube.com/watch?v=77MH42 xsqVs

Market Segmentation
Marketing and its related activities should be designed to suit the customer. In the past organisations created adverts for the mass market but now recognise different groups of people have different wants and needs Market segmentation is a process of separating a total market into parts so that different strategies can be used for different customers

What do the following mean/or give an example

Geographic Demographic Segmentation by age Other ethnicity Geodemographic Psychographic/behavioural

Market Segmentation
1. Read the article in the shared area UK Hair care market stagnant 2. Summarise in 5 sentences what this article is telling you

Companies build a profile of customers based on data available to them. It helps them select a target market and design products to fit the profile of those customers
Geographic people in different regions may have different incomes, attitudes, buying habits, language Demographic family size/singles for different size products, identify trends in age, gender in particular areas Segmentation by age widely applied shampoo now offering products aimed at older generations, shampoo for kids Other ethnicity Geodemographic combines geo and demo principles (remember when you used upmystreet.com Psychographic/behavioural divide up by social class, life style or personality eg sports shampoos, aiming a head and shoulders at business market

Quick quiz what type of segmentations are represented here you must be able to point it out
Five countries China, Venezuela, Peru, Colombia, and France climbed three or more in best countries to live from the previous year, driven by greater earnings and longer life expectancy.

Structural advice
For your assignment (marked important on the task sheet)
Discuss the different ways in which markets are segmented and why segmentation is necessary Apply this to your shampoo (how does your shampoo do this how have they tweaked their marketing mix to cater for the different segments) Does your company use Niche or Mass marketing techniques or is it a combination of both?

Mass Marketing
Selling a product to a general market and not differentiating between groups Works for generic products eg washing machines

SO what is Niche Marketing?

Niche Marketing A corporate strategy based on identifying and filling relatively small market segments. This can enable small firms to operate profitably in markets dominated by large corporations. It can also be a strategy pursued by a large firm that prefers to have five brands selling 50 000 units in each of five niches, rather than one brand selling 250 000 in the mass market. Pros: the first company to identify a niche market can often secure a solid market position as consumers see the original product as superior consumers are willing to pay a price premium for a more exclusive product

Cons: lack of economies of scale may make costs too high to achieve satisfactory profit margins the firms production system must be flexible enough to cope with relatively small quantities of several products

 You need to understand the purpose of market research You need to be able to carry out appropriate market research using
primary research - questionnaires, observations, test marketing, focus groups Secondary research internal business data in terms of customer information and financial records External sources commercial research reports, government statistics, trade journals, media sources

Market research part C

The difference between qualitative and quantitative data How useful is the data? How is it interpreted and how is it used to make valid choices on how to and to whom to market these products.

Write down 3 reasons why a business conducts market research

1. ..

2. ..

3. ..

Purpose of market research

Define the market Understand customer requirements Who is our target market What strategies are used by our competitors
A way to move ahead in front of competitors (proactive) A way to keep up with competitors (reactive)

 You need to be able to carry out appropriate market research using

primary research - questionnaires, observations, test marketing, focus groups

Questionnaire Observation Test marketing Proctor and Gamble give out samples to employees to
test and to friends to gain initial feedback (from former employee)

Focus groups Write a brief description of what you think each one is

In a very short sentence research will normally take one of the following
Qualitative peoples opinions, behaviours, preferred choices

Quantitative data, statistics eg incomes, population in an area, ages

In your groups write a question to include on a questionnaire then pass to the next person you CANNOT repeat the question that has been asked previously

try to think about the purpose of market research discussed earlier

You should have included

Age Gender Residential area Factors that affect buying habits Price Who buys in household Memorable advertisement Where bought Where notice adverts What promotions Do they buy your product
Where would you put each of these within the marketing mix? Remember you alter the marketing mix to find the perfect combination for your product

Primary research
Construct your questionnaire this must be completed as part of your coursework. You will not be able to carry out a formal observation, focus group, test marketing but explain how your shampoo company may/has used them but in your coursework you can discuss what it is and how your company would use it

What have you learnt?

http://tutor2u.net/business/quizzes/as/marke ting_research/quizmaker.htm

Recap primary research

Focus group Employees of Proctor and Gamble are given shampoo to share with their friends and family to gather feedback before trialling in a larger area ahead of launching nationally A group of people representative of their target market will come in and will test the product they will give feedback on this Buyers in supermarkets and shops will be watched as to how they buy the product and what they do eg do they smell before they put it In their basket, do they check the price etc A sample is asked a series of questions relating to the product. The questions will relate specifically to what they need to know

Test marketing

Questionnaire

Observation

Primary research
Cost, time to do, done for specific purpose, do as needed
Advantages Disadvantages

Secondary Research what is it?

Information gathered by other sources not by yourself Includes Media Government statistics Trade Journals

Secondary research
Cost, Reliability, Time, Not conducted for that purpose, Advantages Disadvantages

Teens' and Tweens' Beauty and Personal Care - UK - June 2009 Interest in cosmetics and toiletries starts from a young age, with the under-13s using products to give them confidence and make them appear older than their years. Few beauty and grooming brands specifically target tweens/teenagers, although they have considerable purchasing power with many using a wide repertoire of products. The tween/teenage demographic could be just the right target for beauty brands looking for growth during these recessionary times. Key themes Tweens/teenagers are part of the digital revolution and are at ease with modern technology. This impacts the way in which they are influenced to try to buy new products. The influence of parents on their childrens purchasing/usage of cosmetics and toiletries. Toiletries and cosmetics compete with a wide range of other items on which tweens/teenagers are expected to spend their pocket money/allowance. Growth in teen-targeted skincare brands. Tween/teenage brands are strong in some sectors (eg cosmetics) but lacking in toiletries categories. Teens and tweens are less affected by the economic slowdown than other demographic groups and this presents strong opportunities for growth. Todays teens and tweens have grown up in a multimedia society where products are not only sold in-store. Evaluate successful distribution strategies to target this demographic. http://oxygen.mintel.com/sinatra/oxygen/display/id=394187/display/id=465530&list=wh_ite ms/display/id=394187/display/id=394229 accessed 2/02/2010

Secondary research

http://news.bbc.co.uk/1/hi/business/4417725.stm - ethnic hair care market http://tutor2u.net/business/marketing/casestudy_%20products_haircare.asp market share http://www.in-cosmetics.com/page.cfm/link=303 http://www.cosmeticsdesign-europe.com/Products-Markets/UK-Hair-care-market-stagnantbut-niches-thrive - segmentation of shampoo market http://www.independent.co.uk/life-style/health-and-wellbeing/health-news/claims-byupmarket-shampoos-dont-wash-599646.html - price/value Also research the mintel report on the shared area as evidence of a publication not a news story

Read the article and answer the following:

1. What is it telling you? 2. Why would this affect your shampoo company 3. What information / key statistics are relevant to you 4. What part of the marketing mix would the shampoo company tweak with this information?

3.3 Choosing an appropriate marketing mix The marketing mix refers to the combination of elements within a businesss marketing strategy, designed to meet/influence the needs/wants of customers to generate sales. You will need to use elements of your research to support your mix.

The choice of marketing mix aims to target products towards a group of potential customers. The marketing mix will vary according to the objectives you are trying to achieve and the results of your market research. For example, the mix chosen for the launch of a new product of a small business will be different to the launch of a product by a large business. You need to develop an understanding of the factors that go towards determining: price product place, (including web-based) promotion.

Part C Create a marketing mix for your product

1. 2.

3. 4.

Product - what your product offers that your customers value, and whether/how you should change your product to meet customer needs. Pricing - for example, you might aim simply to match the competition, or charge a premium price for a quality product and service. You might have to choose either to make relatively few high margin sales, or sell more but with lower unit profits. Remember that some customers may seek a low price to meet their budgets, while others may view a low price as an indication of quality levels. Place - how and where you sell. This may include using different distribution channels. For example, you might sell over the internet or sell through retailers. Promotion - how you reach your customers and potential customers. For example, you might use advertising, PR, direct mail and personal selling.

Pricing by the end of this lesson

What affects the decisions on the price? What price will you charge? Why?

Look at these items how would you group these?

Essentials, luxury items

What affects price of goods

Quality Where sold Exchange rate Competition If bought in bulk Demand Fashion Brand How new the product is Avaliability

Price
Price is the only part of the marketing mix that generates an income all others cost money For high fashion items eg Superdry coat/iPhone price is less relevant because they are one-off purchases than items that are bought en-mass eg paint where there is lots of competition Some things are essential (eg water, shampoo!) and will need to be bought regardless of the price but consumers may go to competitors if they offer a better deal

Elasticity of demand
The graph shows that the higher the price the less likely people will want to buy something. Price It also illustrates that consumers may buy less from that particular company if there is a lot of choice eg a competitive market It can also illustrate how consumers may buy more of a product if the price fell This is known as elasticity of demand ie the amount required/bought/wanted alters with the price

Quantity demanded (bought from that company)

What type of pricing are these?

The PS3 was selling for over 300 when it was first launched it can now be purchased for less than 200 When Bounty re-launched as Plenty it was on sale for 1 cheaper than usual Petrol prices at supermarkets are usually very similar. If one drops so does another

Types of pricing-which is which

1 - Penetration pricing 2 Skimming 3 - Cost plus pricing 4 - Competition based pricing 5 - Destroyer pricing A - Deliberately lowering prices to get a competitor out of the market eg a price war B - Because of low competition eg a new product/market leader is able to charge an initially high price such as iPhone/PS3 once the initial customers are reached the price will be lowered to attract the next level C - Beginning with a low price to attract the customers effective in a market where demand is elastic. Helps to penetrate the market and gain market share D - Matching price very closely to that of competitors common in a market where products are almost identical E - Adding a specific amount to the unit price eg 20%

What type of pricing is most likely to apply to shampoo?

Questions to consider/answer
Is it a generic product? Is there lots of competition? What is the elasticity of demand will the price affect how many people want it? Where is the product made and where is it sold? Will this have an impact (consider exchange rates)

 against $

How might this affect shampoo prices if being exported/imported to UK?

Product what makes a product a product?

Quality of shampoo

Colour and texture

Packaging

Hair type Smell Frequency of wash

Hello Hydration Moisture & Shine shampoo Get drenched, quenched and revive that shine! Luscious shine starts with deep hydration, so take a deep dive into high shine. Replenish your pretty parched head with my rich formula with orchid and coconut extracts. Want an even more blinding blast of shine? Splash out on my Conditioner and treat yourself to my high-gloss Intensive Mask. use me: Lather up. Rinse and repeat. Your hair'll lap it up and you'll be good to glow

Used to have Vidal Sassoon on the bottle but was taken off after the company realised that wash and go didnt fit the image that they were which was a high quality one.

Volume & body Shampoo Pantene Volume & body Shampoo helps your hair live large and stand tall. It's the first step to gorgeous, glamorous hair that's full of volume, body and movement. The formula works by effectively removing the dirt and residue that can weigh hair down.

Promotion - lesson
View the innocent advertisement how do they want to be perceived Look at the pictures around the room Write on there what evidence there is that they want to be perceived in this way With your partner and your props stick the picture into the middle and identify key AIDA points What media would be used to convey these messages Which method will get this across better? Did any of

Lesson objectives - Promotion

To be able to identify different types of promotional media used by companies To be able to analyse a piece of promotional media and say who the target audience is, what the message is, how good it is based on what you have learnt so far

Watch the advert

Describe the story in each one What phrases/descriptive words do they use What do they want us to think Who do you think it is aimed at Which do you prefer How do the approaches differ for each

 http://www.youtube.com/watch?v=XQcVllWp wGs http://www.youtube.com/watch?v=4ZRgX2xt wLg

 Promotion is based around the need to effectively communicate with customers

Promotiona l tool

Company

Message

Target audience

How would you measure success

Good/bad points

Improvemen t

TV advert

How else do companies let us know about their products?

Which is the odd one out?

Leaflet Local newspaper Company website Where the product is sold

Other ways to promote products?

The message in an advertisement should be

A. B. C. D. What makes this product different What makes it better than a competitors The price of the product Where you can buy it

An promotional material has to ensure it

A. B. C. D. Reaches target audience Clearly describes the product Has the price on it Is on television to reach a wide audience

How will you use this?

Write down 5 things you will look for/assess in your shampoo advertisement

You need to search for an advertisement of your chosen companies shampoo and assess it like you have today. For MB3 you will suggest and justify improvements

 In pairs look at the piece of promotional media in front of you discuss it and complete the table
Promotional tool Company Message Target audience How would Good/bad you measure points success Improvement

 Language Colours People featured in the advertisement

During the design of promotional material the style is most represented by

Distribution (Place) why is this information on the website?

Place
Think back to the Chinese Head and Shoulders advert what was the difference between that and an advertisement for the same product being shown in England? What other changes might there be?

Distribution is how the product gets to

Manufacturer wholesaler retailer consumer Manufacturer retailer consumer Manufacturer consumer Which one would you prefer as a consumer? As a manufacturer? What is most appropriate for shampoo?

P.E.S.T How will these affect your company and the marketing mix?
Political and legal changes such as new regulations Economic factors such as interest rates, exchange rates and consumer confidence Social factors such as changing attitudes and lifestyles, and the ageing population Technological factors such as new materials and growing use of the internet

Political and legal factors

Britain to Burn Trash for Energy June 11, 2008 Government policy to help companies avoid landfill tax by turning waste into electricity!

Consumer Protection Act products must be safe Sale of Goods Act - Correct labelling of products and doing what they say! Health and safety issues

Economic factors

FALLING RATES 8 October 2008: 4.5% 6 November 2008: 3.0% 4 December 2008: 2.0% 8 January 2009: 1.5% 5 February 2009: 1.0% 5 March 2009: 0.5%

Social Factors
BBC News - Population to hit 65m by 2016, 23rd October 2007

The average age of Britons is expected to rise to from 39.6 years in 2006 to 40.6 years in 2016 and to 42.6 years by 2031. The number of under-16s in Britain is projected to rise from 11.5 million in 2006 to 12.1 million by 2016 and nearly 13 million by 2031. The number of pensioners is expected to exceed the under-16s by 400,000 in 2016 and by over 2 million in 2031.

Technological factors

Environmental
Government Waste Strategy - Businesses are being asked to take greater responsibility for the environmental impact of their products and operations

Britain to Burn Trash for Energy June 11, 2008 reduce landfill and turn waste