9.

What is Marketing
 The role of marke ng and its rela onship with other business ac vi es
The management task that links the business to the customer by identifying and
meeting the needs of customers pro tably – it does this by getting the right product at
the right price to the right place at the right time.

Marketing Objectives:

• Sales Growth: Increasing the volume of products or services sold.

• Market Share: Capturing a larger portion of the target market.
• Brand Awareness: Enhancing visibility and recognition in the market.
• Customer Loyalty: Building and maintaining a loyal customer base.
• Product Launch: Successfully introducing new products or services.
• Customer Satisfaction: Ensuring high levels of satisfaction with products or
services.
• Pro tability: Achieving a targeted level of pro tability.
• Market Expansion: Entering new markets or expanding geographical reach.

Link between Marketing Objectives and Corporate Objectives:

• Alignment: Marketing objectives should align with overall corporate goals.

• Revenue Contribution: Marketing e orts contribute to corporate revenue and
pro tability.
• Brand Image: Marketing builds and reinforces the desired corporate brand image.
• Customer Focus: Both marketing and corporate objectives should prioritize
customer needs.
• Strategic Support: Marketing strategies support the broader strategic direction of
the company.
• Long-Term Growth: Marketing objectives contribute to sustained corporate growth.
• Adaptation: Marketing adapts to changes in the business environment to support
corporate resilience.

The role of demand and supply

Demand
Demand refers to the quantity of a good or service that consumers are willing and able
to buy at di erent price levels during a speci c period. It is in uenced by factors such
as price, consumer preferences, income levels, and market conditions. The law of
demand states that, all else being equal, as the price of a good or service decreases,
the quantity demanded increases, and vice versa.
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 Factors In uencing Demand for Products:

• Price: Higher prices generally lead to lower demand, and vice versa.
• Income Levels: Higher incomes often result in increased demand for certain
products.
• Consumer Preferences: Changing consumer preferences can a ect demand
trends.
• Seasonal Trends: Demand may vary based on seasons and occasions.
• Complementary Goods: The demand for one product may in uence the
demand for related products.
• Substitute Goods: Availability of alternatives can impact demand.
• Demographics: Population characteristics such as age, gender, and location
in uence demand.

Supply

Supply represents the quantity of a good or service that producers are willing to o er to
the market at di erent price levels during a speci c period. Factors in uencing supply
include production costs, technological advancements, government regulations, and
resource availability. The law of supply states that, all else being equal, as the price of a
good or service increases, the quantity supplied also increases, and vice versa.
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 Factors In uencing Supply of Products

• Production Costs: Higher production costs can reduce the supply of goods.
• Technological Advances: Improved technology can enhance production
e ciency.
• Government Regulations: Regulatory policies can a ect the ease of production.
• Resource Availability: Access to raw materials and resources in uences supply.
• Market Conditions: Anticipation of future market conditions can impact supply
decisions.
• Competition: The competitive landscape can in uence a business's supply
decisions.
• Economic Conditions: Economic factors such as in ation and recession a ect
supply.

Market Equilibrium

Market equilibrium is achieved when the quantity demanded equals the quantity
supplied, determining the market price. This balance is a key concept in understanding
the dynamics of how prices are determined in a competitive market. Changes in
demand or supply can lead to shifts in equilibrium, resulting in price adjustments.
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Role of Price Mechanism:
The price mechanism acts as a signaling system in a market economy. Prices
communicate information about consumer preferences and resource scarcity.
Producers respond to price signals, allocating resources e ciently. Elasticity, or the
responsiveness of quantity demanded and supplied to price changes, plays a crucial
role in understanding market dynamics.

Markets
Consumer Markets vs Industrial Markets

Consumer Markets (B2C)

• Nature of Buyers: Consumer markets involve individual consumers who

purchase goods and services for personal use.
• Purchase Volume: Transactions in consumer markets often involve smaller
quantities and lower purchase volumes.
• Decision-Making: Purchase decisions are typically made by individuals or
families based on personal preferences and needs.
• Marketing Approach: Marketing strategies focus on building brand awareness,
emotional connections, and addressing individual consumer preferences.

Industrial Markets (B2B)

• Nature of Buyers: Industrial markets involve businesses and organizations

buying goods and services for operational use or for incorporation into other
products.
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 • Purchase Volume: Transactions in industrial markets often involve larger
quantities and higher purchase volumes.
• Decision-Making: Purchase decisions are usually made by a buying committee
or professionals, considering factors like e ciency, cost-e ectiveness, and
functionality.
• Marketing Approach: Marketing strategies in industrial markets emphasize
technical speci cations, cost e ciency, and building long-term B2B
relationships.

Di erence between Local and International Markets

Local Markets

• Geographical Scope: Local markets operate within a

speci c geographic area, such as a town, city, or region.
• Customer Base: Businesses in local markets cater to the
needs of the immediate community and nearby residents.
• Competition: Competition is often limited to businesses
within the local area.National Markets:
• Geographical Scope: National markets cover an entire
country, involving transactions that span regional boundaries.
• Customer Base: Businesses in national markets target consumers across the
country, adapting strategies to national trends and preferences.
• Competition: Competition is broader, with companies from di erent regions
vying for market share.

International Markets

• Geographical Scope: International markets involve

transactions between businesses and consumers from
di erent countries.

• Customer Base: Businesses in international markets cater

to diverse consumer preferences, cultural nuances, and
global trends.

• Competition: Competition is global, with businesses facing

challenges from companies around the world.
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 The di erence between product orientation and customer orientation
Product Orientation: Product orientation is a business approach that places the
primary focus on the development and perfection of products or services. In this model,
companies believe that success is achieved by creating superior o erings, relying on
internal capabilities and technological expertise.
Advantages
• Quality Products: Emphasis on product excellence often leads to the creation of
high-quality goods or services.
• Innovation: Internal focus promotes innovation driven by technological
advancements and expertise.
• Technical Expertise: Companies develop and showcase their technical
capabilities, establishing authority in the industry.
• Clear Identity: Product-oriented businesses often have a clear identity based on
their specialized o erings.

Disadvantages
• Market Disconnect: Limited external focus may result in a disconnect from
evolving market trends and customer preferences.
• Resistance to Change: Resistance to changes that deviate from established
product lines or internal expertise.
• Customer Neglect: Less emphasis on understanding and addressing customer
needs, potentially leading to reduced customer satisfaction.
• Competitive Challenges: In dynamic markets, a sole focus on products may
make it challenging to compete against customer-centric competitors.

Customer (Market) Orientation: Customer orientation revolves around understanding

and ful lling the needs and preferences of the target market. This approach recognizes
that long-term success comes from aligning products or services with customer
demands, preferences, and problem-solving.
Advantages
• Customer Satisfaction: Prioritizing customer needs enhances satisfaction,
fostering loyalty and repeat business.
• Adaptability: Responsive to market changes, customer feedback, and emerging
trends.
• Market Relevance: Staying attuned to customer preferences ensures continued
relevance in the market.
• Relationship Building: Focus on customer relationships and experiences leads
to stronger brand loyalty.
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 Disadvantages
• Balancing Act: Balancing customer demands with internal capabilities and
pro tability can be challenging.
• Continuous Feedback: Actively seeking and incorporating customer feedback
throughout the product life cycle can be resource-intensive.
• Potential Cost Increase: Customizing products or services to meet diverse
customer needs may increase production costs.
• Short-Term Challenges: Immediate pro tability may be impacted as resources
are allocated to long-term customer satisfaction strategies.

The features of a market

Changes in market growth and share and its e ects on a business

• Businesses usually prefer markets growing at fast rates as it means greater sales.
• A larger share in a smaller market does not mean the business is generating a
large amount of sales.
• In a growing market, increasing market share will mean the sales of the business
are increasing. However, if the market is shrinking it could mean sales of the
individual business are falling even if the market share percentage is increasing.
• Well established larger markets will have slower growth rates, but even owning a
small share of a large market means the business is generating a high amount of
sales.
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 Bene ts of a high market share
• Access to high quality suppliers.
• Customers are usually more willing to purchase from a larger and well-known
business.
• Greater sales mean greater revenue and therefore more profit.
• Retailers will be eager to stock products of the market-leader, leading to
increased customer access.

Consumer and Industrial Marketing

Consumer Products (B2C) Marketing:

Advantages

• High Volume Potential: B2C products often have a larger consumer base,
allowing for high-volume sales and revenue.
• Emotional Appeal: Marketing can leverage emotional connections, creating
brand loyalty and repeat purchases.
• Diverse Distribution Channels: Consumer products can utilize a wide range of
distribution channels, including retail, e-commerce, and direct sales.
• Quick Decision-Making: Consumers typically have shorter decision-making
cycles, enabling faster sales cycles.

Disadvantages

• Intense Competition: Consumer markets are highly competitive, requiring

constant innovation and di erentiation.
• Price Sensitivity: Consumers are often price-sensitive, demanding competitive
pricing strategies.
• Individual Preferences: Meeting diverse individual preferences can be
challenging, requiring varied product o erings.
• Shorter Lifespan: Consumer trends and preferences change quickly,
necessitating frequent adjustments in marketing strategies.
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 Industrial Products (B2B) Marketing:

Advantages

• Long-Term Relationships: B2B transactions often lead to long-term business

relationships and repeat contracts.
• Fewer Decision Makers: In B2B, fewer decision-makers are typically involved,
streamlining the decision-making process.
• Customization Opportunities: Industrial products often allow for customization
to meet speci c business needs.
• Value-Based Selling: B2B marketing focuses on delivering value, emphasizing
e ciency, cost savings, and long-term bene ts.

Disadvantages

• Extended Sales Cycles: B2B sales cycles are often longer due to complex
decision-making processes and negotiations.
• Limited Distribution Channels: Industrial products may have more limited
distribution channels, requiring targeted outreach.
• Expertise Required: Marketing to businesses often necessitates in-depth
industry knowledge and expertise.
• Higher Stakes: B2B transactions typically involve higher nancial stakes,
requiring more comprehensive negotiations and relationship management.
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 Mass Marketing and Niche marketing

Mass Market
Features

• Large Audience: Mass markets cater to a broad and diverse consumer base.
• Standardized Products: Products are often standardized to appeal to a wide
range of consumers.
• Economies of Scale: Mass production leads to cost e ciencies, resulting in
lower per-unit costs.
• Broad Marketing Strategies: Advertising and promotions focus on universal
appeal.

Advantages
• Economies of Scale: Mass production reduces per-unit costs, enhancing
pro tability.
• Brand Recognition: Widespread visibility contributes to strong brand
recognition.
• Lower Marketing Costs: Broad marketing strategies may reduce per-customer
acquisition costs.
• Market Leadership: Opportunities to dominate the market and become a market
leader.

Disadvantages

• Limited Personalization: Products may lack personalization to speci c

consumer needs.
• Intense Competition: High competition may lead to reduced pro t margins.
• Generic Brand Image: Brands may be perceived as generic, lacking uniqueness.
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 Niche Market

Features

• Specialized Audience: Niche markets target a speci c, well-de ned consumer

segment.
• Customized Products: Products are tailored to meet the unique needs of the
niche.
• Highly Focused Marketing: Marketing strategies are precisely targeted to the
niche audience.
• Limited Distribution: Products may be available through selective and
specialized channels.
• Unique Selling Proposition: Emphasis on unique features and bene ts for the
niche market.

Advantages

• High Pro t Margins: Niche markets often tolerate higher prices, leading to
increased pro tability.
• Brand Loyalty: Establishing strong relationships and loyalty within the niche.
• Lower Competition: Reduced competition allows for a more dominant market
presence.
• Specialization: Expertise in catering to speci c needs enhances brand
reputation.

Disadvantages

• Limited Growth: The niche market may have limited growth potential.
• Dependency: Heavily reliant on the niche segment, making it vulnerable to shifts.
• Higher Per-Unit Costs: Customization may lead to higher production costs.
• Market Size Concerns: Potential vulnerability if the niche market is too small.

Choosing between mass and niche marketing depends on the product, market
dynamics, and business objectives. Successful strategies often involve nding the right
balance or exploring hybrid approaches.
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 Market Segmentation
Geographic Segmentation: Dividing the market based on
geographical factors such as location, climate, or
population density.Example: Regions, countries, cities,
climate zones.

Demographic Segmentation: Dividing the market based

on demographic variables like age, gender, income,
education, or family size. Example: Age groups, gender,
income brackets, educational level.

Psychographic Segmentation: Dividing the market based on psychological and

lifestyle factors, including values, interests, and attitudes. Example: Personality traits,
hobbies, values, social class.

Advantages of Market Segmentation

• Targeted Marketing: Segmentation allows businesses to tailor their marketing

e orts to speci c groups, increasing relevance.
• Resource E ciency: Resources are allocated more e ciently as marketing is
focused on segments with higher potential.
• Improved Communication: Better understanding of customer needs enables
more e ective communication and messaging.
• Product Customization: Businesses can develop products or services that
better match the preferences of speci c segments.
• Competitive Advantage: By catering to speci c segments, a business can gain
a competitive edge in niche markets.

Disadvantages of Market Segmentation

• Complexity: Managing multiple segments can be complex and may require

diverse marketing strategies.
• Costs: Developing and implementing separate strategies for each segment can
be resource-intensive.
• Overlooked Similarities: Over-segmentation may lead to overlooking similarities
or common needs among segments.
• Data Requirements: E ective segmentation requires accurate and detailed data,
which may not always be available.
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 Customer Relationship Management (CRM)
Aims of CRM

• Customer Retention: Build and strengthen relationships to retain existing

customers.
• Customer Loyalty: Foster loyalty and increase customer lifetime value.
• Personalization: Provide personalized experiences and targeted communication.
• Customer Satisfaction: Enhance customer satisfaction by meeting and
exceeding expectations.
• Data Utilization: Leverage customer data for informed decision-making and
targeted marketing.
• Cross-selling and Upselling: Identify opportunities to cross-sell or upsell
products/services.
• E cient Communication: Streamline communication channels for more
e ective interactions.
• Improved Service: Enhance the overall quality of customer service and support.

Costs and Bene ts of CRM

Bene ts
• Increased Revenue: E ective CRM can lead to higher sales through improved
customer relationships.
• Enhanced Customer Loyalty: Satis ed and engaged customers are more likely
to remain loyal.
• Operational E ciency: Streamlined processes and better data management
result in operational e ciency.
• Customer Insights: CRM systems provide valuable insights into customer
behaviors and preferences.
• Personalized Marketing: Targeted and personalized marketing e orts lead to
higher response rates.
• Competitive Advantage: A well-implemented CRM strategy can provide a
competitive edge.
• Improved Decision-Making: Access to real-time data supports data-driven
decision-making.
• Customer Retention: Lower customer churn rates and increased retention.
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 Costs

• Implementation Costs: Initial setup and customization of CRM systems can be

expensive.
• Training Expenses: Training employees to use CRM tools e ectively requires
time and resources.
• Integration Challenges: Integrating CRM systems with existing technologies can
be complex.
• Data Security: Safeguarding customer data requires investments in security
measures.
• Maintenance Costs: Ongoing maintenance and updates contribute to the total
cost of ownership.
• Potential Resistance: Employees may resist adopting new CRM processes,
a ecting productivity.
• Time Consumption: Implementing CRM strategies takes time, impacting
immediate results.
• Customization Costs: Tailoring CRM solutions to speci c business needs may
incur additional costs
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