Download File - Ms Marshall`s Notes

Marketing is the management process of
(i)finding out what customers want and
(ii)then making a product that satisfy their
needs and (iii)persuading them to buy that
product.
Ms. Marshall 6th Year Business
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Marketing in your exam
 Marketing is frequently a full question in both
Ordinary and Higher Level papers. It is at least
50% of a question every year.
 As you can see it always comes up in Part 2 of the
Long Questions.
Ordinary Level
Higher Level
2011
Q6
Q7 (50 marks)
2010
Q7
Q7
2009
Q7 (1/2)
Q7
2008
Q8 + 2 SQ’s
Q7 (1/2)
2007
Q7 (1/2)
Q7
Ms. Marshall 6th Year Business
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Overview of Chapter 16
1. Market Research
5. Marketing Mix,
Product & Price
Marketin
g
4. Marketing
Strategy
2. Market
Segmentation
3. Marketing Concept
Ms. Marshall 6th Year Business
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Overview of Chapter 17
Promotion
Marketing 2
Place
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1.Market Research
 For this topic you must be able to define the term,
explain the two types with examples and give up to
four benefits/ reasons for market research.
 Market research involves collecting, analysing and
reporting information about marketing issues to
enable (help) managers to make effective marketing
decisions.
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Market Research
 The two main types of market research are field
research and desk research. The choice of
research depends on:
1. What information is required
2. The amount of detail and accuracy needed
3. The costs involved in collecting it.
4. The time and money available for the research.
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Field Research
 This involves the firm going out into the marketplace to
gather new information directly from consumers.
 Field research is also known as primary research.
 Advantage: More accurate and detailed information,
more relevant to your product.
 Disadvantage: Time-consuming and costly.
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Field Research Techniques
1. Observation: involves watching and recording the
behaviour and reactions of consumers. While this
may show us what they buy, it does not tell us why.
E.g. Supermarkets may have people observing
customers as they choose between brands.
2. Consumer Panel/Focus Group: groups of
consumers who are regularly monitored to find out
about their purchases and reactions to products.
This may be face-to-face or written. E.g.
Superquinn holds weekly consumer panels to listen
to consumer opinion.
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Field Research techniques
 3. Survey/Questionnaire: involves interviewing the
consumer directly. Consumers can be contacted by
phone (e.g. Vodafone Customer Service), mail, the
internet (e.g. after a hotel stay) or in person (e.g. when
you are stopped on Grafton St…)
 Surveys use the qualitative and quantitative data of a
representative sample to determine what people think
of their product or idea.
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Desk Research
 Desk Research involves research which is based on
information already available (gathered by others)
within or outside the firm.
 It is also known as Secondary research.
 Advantage: Large quantities of useful information are
available quickly and at low cost.
 Disadvantage: The data may be too general or out of
date.
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Desk Research
 1. Internal Reports: a business can obtain
information from its own sales reports and financial
records. Also schemes such as Loyalty Cards often
record what consumers are buying.
 2. Government Publications: Reports and statistics
published by Governments agencies such as the CSO
and Enterprise Ireland often have valuable
information, e.g. CSO -Census, Inflation,
Unemployment rate. Enterprise Ireland- Export trade
info, e.g. market statistics on a foreign market.
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Desk Research
 3. The Internet: For researchers the internet has two
keys sources of information:
 Websites: that organisations (e.g. your competitor)
and individuals have created to promote their
products and views.
 Discussion groups of people with a particular interest.
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New Coke
 In 1985 Coca-Cola conducted market research in the form of
blind taste tests to see if consumers preferred their original taste
to a sweeter formula more like Pepsi. The research showed that
consumers preferred the sweeter taste. So Coke decided to
replace its own recipe with “New Coke”, a sweeter version of the
drink.
 The original formula for Coke had to be reintroduced after only
77 days after a massive public backlash, particularly from
Southern States of the USA, who saw Coke as part of their
culture. Some say Coke lost millions in wasted marketing and
sales because they didn’t take into account brand loyalty and the
associations people have with a brand. However, the
reintroduction revived a brand that had been losing market
share – so many believe Coke planned the whole thing as a
marketing stunt.
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Q. Explain the importance of
Market Research?
Note: the question is “Explain” therefore use the format
of Statement, Explain and back up with an Example.
 1. Market Research can save the company money in the
long run. For instance, by stopping the development of a
new product if it is not likely to be viable in the
marketplace. E.g. there is little demand for a low fat version
of Guinness.
 2. It reduces the risk of failure for the product and the
business. This is achieved by anticipating trends and
changes in the market. E.g. Nivea diversified into products
for men when research showed there would be a demand.
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Importance of Market Research
 3. It helps a business to improve its advertising. It
can emphasise how the USP meets the consumers
needs, thereby indicating they provide a better
product/service than their competitors. E.g. Volvo’s
USP is that it’s the safest car, which would be
particularly important to drivers with kids.
 4. It helps managers decide the best price,
packaging and design to use. Information gained on
your target market will decide these e.g. a luxury good
is usually high priced compared to competitors, with
expensive packaging and a unique brand or logo.
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2. Market Segmentation
 Involves splitting the market into separate and distinct
groups that exist within it.
 The main way to segment the market:
 1. Geographic Segmentation
 2. Demographic Segmentation
 3. Psychological Segmentation
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Market Segmentation
 Geographic: the market is divided into different
geographic areas. A business makes money satisfying
local needs. E.g. The Irish Radio market is divided into
counties or regions. E.g. 98fm for Dublin, Shannonside
for the Mid & West Counties.
 Demographic: the market is divided on the basis of
different characteristics of the population, e.g. gender,
age, income, social class. E.g. Nivea for Men and
Women.
 Psychological: analyses consumers on the basis of
their attitudes and tastes, e.g. conservative, impulsive.
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Volkswagen
 Audi, Seat, Volkswagen and Skoda cars are all built by
the Volkswagen company. They use psychological
segmentation to analyse the car buyer market and
identified four basic distinct groups: prestige,
adventurous, conservative and economy. Using
careful design and promotion, each of these car brands
is then positioned to target consumers in each of these
market segments.
 Audi – prestige, Skoda – economy, SEAT- adventurous,
Volkswagen – conservative.
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Advantages of Market
Segmentation
 1. It helps a business to
establish a presence in a
market: It can be easier to
launch yourself in one
segment, then expand
when you succeed. E.g.
NewsTalk started in
Dublin, then went national.
 2. It helps to increase
sales: by highlighting a
neglected market e.g.
Nivea for Men hugely
increased overall sales.
Ms. Marshall 6th Year Business
 3. It helps lower
marketing costs: Less
money will be wasted as
you know who your
campaign should appeal
to. E.g. The Economist
Magazine is targeted at
business people, they would
not advertise it during a
children’s show.
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Market Segmentation: Pepsi Max
and Diet Pepsi
 Pepsi conducted field and desk research
to find out who bought their cola drinks.
Analysis showed that both male and
females likes the taste of Diet Pepsi and
were concerned about their sugar intake.
 However, the market research also
showed that males were unlikely to buy
Diet Pepsi because of the perception that
it is a feminine drink.
 Pepsi divided the market into male and
female segments. The female market
was targeted with Diet Pepsi. The male
market was targeted with Pepsi Max,
which while having a low sugar content,
always has adventurous, high energy
advertising campaigns.
 https://www.youtube.com/watch?v=V4ieWqegwY
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Target Market
 This is the group of people (or segment of the
market)that the business chooses to aim its product at.
 E.g. Energy drinks for athletes.
Niche Market
 This is a narrowly defined group of potential customers
within a market for a product or service.
 E.g. Organic Food Market, Bridal Wear.
 People are generally willing to pay more for a product
in a niche market.
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Niche Market: The New York Dog
 Irishman John Ryan produced a number of
magazines here at home. When he moved to New
York he noticed how they treated their dogs like
children. He saw a gap in the market and
produced a glossy magazine ‘The New York Dog’. It
dealt with issues such as where to bury your pet,
plastic surgery for pets and obituaries for dogs.
 Unfortunately, the magazine has ceased
publication.
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3. Marketing Concept
 1. Find out what the customer wants.
 2. Provide the product or service that satisfies the
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consumer need or want.
https://www.youtube.com/watch?v=HRCNDBfVhJ0
Advantages:
1. Increased satisfaction = increased sales and profits.
2. Better reputation, word of mouth.
3. Fewer returns and repairs.
E.g. SuperQuinn – provide free playhouse, carry out
service, delivery etc…. They are branded as a higher quality
supermarket with an emphasis on customer service.
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Marketing Strategy
 The Marketing Strategy is a written plan that sets out the
business’s marketing objectives and the means by which it will
achieve these.
 Step One: Investigate the market to develop business
opportunities: conduct a SWOT analysis of the market and of
your own company. E.g. Meteor conducted desk research when
identifying the potential growth in the mobile phones market.
 Step Two: Select a Target Market: identify the segment of the
market you are aiming your product at. This will involve research
to determine which groups needs you can satisfy. E.g. Meteor –
low cost, youth market.
 Step Three: Develop a Marketing Mix: use your research to
develop strategies for Product, Price, Promotion and Place. E.g.
Year Business
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uses humour inMs.
itsMarshall
ads, 6th
sponsors
the Ireland Music Awards.
Benefits of a Marketing Plan
 1. It sets out the steps needed to attract customers and
increase sales and profits.
 2. Identifies the strategies that are working. The
business can measure actual progress to goals
expected.
 3. Shows potential investors that the business has good
marketing strategies. This will be useful if expanding
the business.
Ms. Marshall 6th Year Business
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Term
Definition
Marketing
Marketing is the management process of
(i)finding out what customers want and
(ii)then making a product that satisfy their
needs and (iii)persuading them to buy that
product.
Summary
Expansion/Exa
mple 1
Expansion/Ex
ample 2
Market
Research
Market research involves collecting,
analysing and reporting information
about marketing issues to enable (help)
managers to make effective marketing
decisions.
1. Field Research e.g.
Observation, Focus Groups,
Questionnaires
2. Desk Research e.g. Govt.
reports, Internet, Internal
company reports
Market
Segmentation
Involves splitting the market into separate
and distinct groups that exist within it.
Geographic, Demographic,
Psychological
Target Market, Niche
Market
Marketing
Concept
1. Find out what the customer wants.
2. Provide the product or service that
satisfies the consumer need or want.
Increased satisfaction =
higher sales, better
reputation and fewer
returns.
Marketing
Strategy
The Marketing Strategy is a written plan
that sets out the business’s marketing
objectives and the means by which it will
achieve these.
3 Steps
Ms. Marshall 6th Year Business
3 Benefits
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Recent Exam Questions
 2013
 Read the information supplied and answer the questions which follow.
 An Irish company, 'All-Weather Wellies Ltd' identified a niche market
for colourful wellington boots of all sizes. The wellington boots are sold
mainly on-line to people who enjoy the 'great outdoors' and festivalgoers. The company wishes to expand and add accessories, such as,
umbrellas, scarves and hats to the product range.
 (A) Outline the market research techniques available to 'All-Weather
Wellies Ltd' for developing its product range. (20 marks)
 (B) (i) Explain the term ‘market segmentation’ with reference to ‘AllWeather Wellies Ltd’.
 (ii) Discuss the reasons why the marketing department of ‘All-Weather
Wellies Ltd’ might engage in market segmentation. (20 marks)
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Recent Exam Questions
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2010
(A) Discuss the reasons why businesses carry out market research.
(15 marks)
2009
Question 7
Olympian Ltd is a company that produces a range of high quality
branded sportswear. Following a lengthy market research process, the
firm is now expanding its business to include a new range of Hoodie
Tracksuits, aimed at the teenage market.
 (i) Explain the term ‘market segmentation’, illustrating your answer
with reference to Olympian Ltd.
 (ii) Outline two benefits to Olympian Ltd of segmenting the market.
 (20 marks)
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Recent Exam Question – Extract
from 2007 ABQ
 Responding to published official forecasts and trade publications,
Jason recruited sales people and qualified technicians to serve the
client base and expand the product range of the firm. He encouraged
the staff to engage with customers and to note their reactions to new
ideas and products. McGComputers is now well established with twelve
full-time employees and five service vehicles on the road. It regularly
hosts product presentations and demonstrations on its premises for
representative sections of its customer base. Siobhán, Jason’s daughter,
a recent business graduate has joined the firm. Siobhán would like to
add other services such as website design and maintenance, training
and consultancy, and has held focused discussions with groups of
customers.
 Describe the methods of market research currently used in the
business.
Ms. Marshall 6th Year Business
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2004
 Question 7
 The main objective of marketing is to ensure that the business
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enterprise obtains the revenues it needs to achieve its profit
targets.
(A) Define Market Research.
Explain the reasons why a business enterprise would conduct it.
(25 marks)
(B) Analyse two Market Research techniques for a product or
service of your choice.
(20 marks)
(C) Explain the advantage for a business enterprise of adopting
the marketing concept.
(15 marks)
(60 marks)
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