CHAP 16 Marketing 1

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					CHAP 16: Marketing
Chapter topics

1.   What is a marketing strategy?
2.   How can a business identify its target market?
3.   What is the marketing mix?
4.   In the marketing mix, what is meant by product?
5.   How should a product be designed?
6.   What is meant by branding?
7.   What pricing strategies should a firm follow?
8.   What is a break even analysis?
1. What is a marketing strategy?

A marketing strategy
“Is a plan of setting out how a business
  achieves its marketing objectives”
This can be done through a combination of
  identifying its target market, developing its
  product and the actual tactic of selling.
2. How can a business identify its
target market?
They can identify a target market through
  detailed market research into customers
  available to the business.

Market segmentation can now be used to
 divide these potential customers into groups.
 Groups are picked according to age, race,
 sex, job, income, interests etc.
The most common way of identifying a market
    would be through
    categorises age, income, sex, status.
    (Lucozade Sport geared towards sports
    identifies potential customers on the basis
    tastes, attitude.
   (Baileys Crème Liquor drinks is focused on
    sophisticated females)
What is a market niche?

A market niche is a specific gap in the market for a
  particular product or service?

What is a target market?
This is a particular customer group that
  product/service is aimed at.
(ADIDAS - Predator boot geared towards football

        3 .MARKETING   Price

4. In the marketing mix, what is
meant by product?
A product is a good/service that is developed to
  satisfy customer needs.

The following is a diagram of a product life
  cycle. This shows the various stages a
  product goes through.
Product life cycle- the stages


 What is product portfolio?
This is where a business has a range of
  products that are available to be sold. If a
  business is to reliant on one particular product
  it will reach the decline stage and then come
  into difficulties.

BULMERS CIDER- Bulmer's Pear Cider
PEPSI – Diet Pepsi- Pepsi Max
ADIDAS- 6 stud football boot
      - multi stud boot
      - predator boot
      - blades

          - Pass at
          - Golf
          - Bora
5. How should a product be designed?
The design of the product should address
1. After sales service – this recognises that
   customer may need knowledge on the particular
   good/service after the time of sale.
Example – Toyota offer a 3 year guarantee on every
   new car sold.

2. Packaging – The product purchased must protect
    the goods from any handling damage, tampering
    damage etc. It should be designed for easy
    storage and display and where appropriate with
    bar code for ease of scanning.
3. Aesthetics – this deals with how the product
  looks, smells, tastes, sounds. The product
  should appeal to the customer needs. This
  will greatly affect the influence of a sale. Eye
  catching designs live long in the memory of
4. Social Responsibility – This deals with the impacts
   of the product on the various stakeholders. Green
   products TRY to minimise their impact on the natural
   environment. Over the past 10 years in this country
   there has been a improved awareness amongst
   stakeholders to be eco – friendly. Certain eco-friendly
   businesses are gaining a loyal customer base on the
   basis of their greener attitude towards product
   development, packaging, transport, disposal etc.

= use of biodegradable bags instead of plastic
= recycling of paper, bottles
6. What is meant by branding?

Branding means
“creating an identity for a product that clearly
  distinguishes it from the competition”
EXAMPLES – Pepsi, Nike, Levi's, Mercedes.

A brand leader is the brand with the biggest share of
  a particular market.
Lyons tea – largest in Irish tea market
Goodfella’s pizza – leader in Irish pizza market
What are own label brands?

“Own label” brands are sold by the larger
  retailers with the retailers own name/own
  brand on them. They are goods that are
  usually sold at a lower price than leading
Example –
Homestead, Euro shopper, St Bernard
What does GI (guaranteed Irish) symbol on
packaging mean?

This GI symbol is used to make goods that are
   manufactured in Ireland easily identifiable to
   Irish consumers.
Its main purpose is to encourage Irish
   customers to buy Irish products
     7.What pricing strategies should
     a firm follow?
There are a number of pricing strategies used
  by businesses.
MARK UP: this means adding a standard
  percentage to the direct cost of the product.
  The mark up helps to pay for the overheads
  of running the business with a profit to also
  be added.
Example: Buy at £10, Sell at £14 – 40% mark up
High price strategies

   Price leadership – Firms can deliberately
    charge a higher price to create an impression
    of superiority.
   Price skimming – this is done in the launch
    stage. Company will increase the price of a
    product to cover development costs.
   Profit maximising pricing – setting a high
    price to deliberately make as much profit as
    soon as possible.
Psychological Pricing – This means setting
 a price based on customer expectations.
 Low price strategies
Penetration Pricing – a business sets a low price
  to push other companies out of the market. They
  are looking for largest market share from an early
Discriminatory Pricing – different prices are
  charged to different groupings for the same
  product. This is to do with age, status etc.
Example – Bus Eireann charge students less than
  the full time employees.
Predatory pricing- This is where a company
  will greatly reduce prices in order to push
  competitors out.
Example – Aer Lingus adopted this approach
  with Ryanair on the cheaper flights route

Price War – this is where competing firms
  continously cut prices to retaliate against rival
  firms. Customer benefits greatly if this
  situation continues for a long period of time
Loss Leader – This is a where a business that
 sets a particularly low price on products can
 greatly benefit from the bond developed. This
 improves the chances of future repeat
 purchases and the business will profit as a
8. What is Break Even Analysis