3.5 Marketing

Students should understand the interdependent nature of business operations, human resources, marketing and finance. Students should be able to give examples of how business objectives would be split into functional plans with clear links throughout.

The purpose of marketing, its role within business and how it influences business activity.

3.5.1 Identifying and understanding customers

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The importance of identifying and satisfying customer needs

Students should understand the importance of identifying and satisfying customer needs, in order to:
  • provide a product or service that customers will buy
  • increase sales
  • select the correct marketing mix
  • avoid costly mistakes
  • be competitive.

3.5.2 Segmentation

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Types of segmentation

Students should understand how and why different businesses use segmentation to target customers, including:

  • gender
  • age
  • location
  • income.

3.5.3 The purpose and methods of market research

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Purpose of market research

Collect information about:

  • demand
  • competition
  • target market.

Students should understand why businesses conduct market research, such as to identify market opportunities and to get a better insight into their customers and competitors.

Methods of market research to include primary and secondary:

  • questionnaires
  • surveys
  • interviews
  • focus groups
  • internet research
  • printed press eg newspapers.

Students should understand the difference between qualitative and quantitative market research.

Students should identify the benefits and drawbacks for various market research techniques and select the best method for a given business.

Use of market research: information that may help decision making

Students should be able to interpret and use qualitative and quantitative market research findings to help make appropriate decisions for different types of business.

Students should be expected to manipulate and interpret data from tables and charts.

Students should be able to identify market size and market share.

3.5.4 The elements of the marketing mix: price, product, promotion and place (4Ps)

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Pricing methods, including:

  • price skimming
  • price penetration
  • competitive pricing
  • loss leader
  • cost-plus.

Students should have an understanding of the main features of pricing methods and the impact they will have on a business.

The factors that influence pricing decisions, including:

  • costs
  • nature of the market
  • degree of competition
  • product life cycle.

Students should be able to recognise the factors, internal and external, which might influence the pricing decision, particularly as businesses grow and expand. They should be able to evaluate the factors and use them to assess the suitability of pricing methods for a given business.

Students should have an understanding of the basic relationship between price and demand ie as prices rise demand is likely to fall.

Product

Students should understand the benefits and risks of developing new products.

Students should understand the importance of product design, image and the needs of the target market when designing new products.

Product differentiation:

  • unique selling point (USP)
  • brand image.

Students should appreciate the significance of having a USP in a competitive market and the importance of a good brand image.

The product life cycle:

  • research and development
  • introduction
  • growth
  • maturity
  • decline
  • extension strategies:
    • updating packaging
    • adding more or different features
    • changing target market
    • advertising
    • price reduction.

Students should have an understanding of the product life cycle and demonstrate how demand for a product or service might change over time.

Students should be able to evaluate the effectiveness of extension strategies and when they would be suitable.

Product portfolio

Students should understand how and why businesses might broaden and balance their product portfolio using the Boston Matrix.

Students should be able to identify and explain the four categories of the Boston Box.

Promotional methods:

  • advertising, including:
    • newspapers
    • magazines
    • television
    • internet
    • billboards.
  • PR
  • sales promotion
    • point of sales displays
    • 2 for 1 offers
    • free gifts
    • samples
    • coupons
    • competitions.
  • sponsorship
  • social media.

Factors influencing the selection of the promotional mix:

  • finance available
  • competitor actions
  • the nature of the product or service
  • the nature of the market
  • target market.
Reasons for promotion:
  • inform/remind customers about the product
  • create or increase sales
  • create or change the image of the product
  • persuade customers to buy the product.

Students should be familiar with the promotional methods which are likely to be used by a given business.

Students should appreciate the benefits and drawbacks of promotional methods used by businesses.

Students should be able to analyse factors influencing the selection of the promotion mix to assess their suitability for a given business.

Place (the different channels of distribution used by businesses):

  • retailers
  • wholesalers
  • telesales.

Students should be familiar with the different channels of distribution used by businesses to gain access to potential customers.

Students should be able to analyse the appropriateness of each distribution method for a given scenario.

E-commerce and m-commerce

Students should be able to analyse the growing importance of e-commerce and m-commerce and how it can extend the reach of businesses to include international markets.

Students should be able to identify the benefits and drawbacks of a business using e-commerce and m-commerce.

  • Integrated nature of the marketing mix
  • Using the marketing mix to inform and implement business decisions

Students should be aware of the importance of the four elements and how they work together.

Students should be able to recommend appropriate marketing activities for a given business.

Students should be able to recognise how the marketing mix evolves over time and evaluate how businesses may react to this.