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Marketing, Competition and the Customer
The Marketing Department
WordBank
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Market Share – Perventage of total market sales held by one brand or business
Mass Market – this is where there is a very large number of sales of a product
Niche Market – is a small, usually specialized, segment of a much larger market
Market Segment – is an identifiable sub-group of a whole market in which consumers have
similar characteristics or preferences.
An example graph:
Sales
Regional Sales
Manager
Market Research
Regional Sales
Manager
Marketing
Director
Promotion
Adverising
Distribution
Promotion
A bigger company means more people are employed in the marketing department. Creates these
sections:
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The Sales Dep. – Responsible of sales of the product. Separate sections for each diff. region.
Might also have an export department.
Market Research Dep. – Finds out customer needs, market changes, and impact of competitors’
actions. Reports to the Marketing Director and the info will be used to make decisions about
research and development of new products, pricing levels, sales strategies, and promotion
strategies.
Promotion Dep. – Organizes advertising for products. Arranges the advertisements, type, and
uses a budget for the most effective way to advertise.
Distribution dep. – Transports the product to the public.
Role of Marketing
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Identify customer needs – Finding out what they want, how much they can pay, and where the
want the goods or services.
Satisfy cutomer needs - customers want the right product at the right place at the right time at
the right price.
Maintain customer loyalty – builds relationships. Helps to gather more information by keeping
them close and talking trustworthily.
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Gain information about the customers – get this from doing ^. Helps to meet their changing
needs and wants, find out why they buy the things they do, and improve marketing overall from
knowing this.
Anticipate changes in customer needs – by identifying new trends in demand or gaps businesses
can produce goods or services aren’t already available.
Success in the above means one of these may have happened:
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Raised customer awareness of a product or service of the business
Increased sales revenue and profitability
Increased or maintained market share
Maintained or improved the image of products or a business
Targeted a new market or market segment
Entered new markets at home or abroad
Developed new products or improved existing products
Understanding Market Changes
Things don’t stay the same. Some markets change faster than others.
Why customer / consumer spending patterns change
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Consumer tastes and fashion change
Changes in technology – new products means old ones/alternatives will not sell as much
anymore
Change in incomes – if an exonomy has high unemployment than many consumers will buy
cheaper products. If it then grows then many consumers will buy more expensive products.
Ageing populations – age structure is changing to a greater percentage of old people. Changes
the products which are in demand.
The power and importance of changing customer needs
Businesses that are successful efficiently respond to customers changing wants and needs.
Why have some markets become more competitive?
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Globalization of markets means that products are being sold all over the world
Transportation improvements mean that it is easier to get products from one part of the world
to another
Internet/e-commerce means consumers can search for products and buy from overseas
markets.
How can businesses respond to changing spending patterns and increased
competition?
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Maintain good customer relationships
Keep improving its existing product
Bring out new products to keep customers’ interest
Keep costs low to maintain competitiveness
What is meant by market?
A market for aparticular good or service is made up of the total number of customers and potential
customers as well as sellers for that particular good or service.
It can be measured by the total number of sales & value of sales for that good or service by all suppliers
to that particular good or service. These markets can be either mass markets or niche markets.
Mass Marketing
 Selling of products/services to a large market with similar preferences/needs/wants.
Advantages :
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Sales are very large
Firm can benefit from economies of scale
Risks can be spread, since there can be many variations in this type of market for your product
or service, and if one fails others can still sell well.
Opportunities for the growth of the business due to large potential sales
Disadvantages
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High levels of competition between firms
High costs for advertising
Standardizes products or services are produced and so may not meet the specific needs of all
customers or potential customers, therefore leading to lost sales.
Niche Marketing
Advantages:
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Small firms can sell to niche markets as large firms might not have identified them; This helps
avoid competition from larger businesses
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Needs of consumers can be focused on and targeted by the firs. Gives an advantage over large
firms because they aim for the mass market, while these aim for the specific needs of the
consumers.
Disadvantages
Niche markets are small and therefore have a limited number of sales, which means only small
businesses, can operate in these markets. If growth is needed they must look out from their tiny
markets to new waters.
Often they only specialize in one product. If that product is no longer wanted, then they will not
earn. They should have more than one type of product to lessen this risk.
Market Segments
Can help a business to
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make marketing expenditure cost effective by producing aproduct which closely meets the
needs of these customers and only targeting its marketing efforts on this segment
enjoy higher sales and profits for the business, because of the cost-effective marketing
identify a market segment which is not having its needs fully met, and therefore their
opportunities are increased
Ways of segmenting a market
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Socio-economic group – can be determined by how much people are paid.
By age – products bought by separate age groups are different.
By region/location – people in diff. regions buy diff. products. If a product is exported the
packaging and appeal of it might have to be changed.
By gender
By use of the product – ex. : cars bought for domestic or business uses are different from each
other.
By lifestyle – think, same salary: one is married and has three kids = spends differently from a
single person earning the same.
Decide the most effective efficient method of advertising
A marketing manager has to take all of the factors into account when deciding which segments might
buy new products or improved products.
Potential benefits of segmentation to a business
Market segmentation can be used to sell more products. Different brands of a product are made and
then aimed at different market segments.
A business can identify a segment whose needs are not being met by finding out about the different
segments in a market in general.
Summary:
>Markets can be segments by<
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Gender
Age
Region
Location
Use of Product
Lifestyle
Income/social group