Download Module 1 Topic 1.4 Making the start

Module 1 Topic 1.4 Making the start-up effective – Lesson 1: Customer focus and the marketing mix Page 1
Customer Focus and the Marketing Mix
1.
Introduction
A business can only survive if it has customers. So focussing on what the customer wants is
vital.
It is important to identify needs, anticipate needs and meet customer needs: in order to remain
competitive.
2.
Customer Focus
a)
Identifying needs: One way to identify customer needs is through market research.
This process starts before the business launches, but should continue indefinitely.
The reason for this is that: customer’s tastes and preferences change
http://www.youtube.com/watch?v=5kaRnWPawHw
Healthfocus Europe say that consumers are now looking to
converge the:
health trend with the environmental trend
An example of this is: buying bottle water that is local to avoid
impacting on the carbon footprint.
So consumer’s tastes and preferences are: changing
Firms that do not adapt will be left behind and may struggle
to: survive
b)
Anticipating needs: watching for trends in the market is vital. Firms that anticipate
where the market is going can: gain a competitive advantage by being the first to go there (first
mover in the market)
c)
Meeting customer needs: Many firms have failed to capitalise on being the first mover
in a market because the product they have offered has had: poor quality or poor functionality.
This even happens to large, well established firms, such as General Motors, who recently filed
for bankruptcy in late 2009.
http://www.youtube.com/watch?v=xjhYS0tSOyQ
They did not change quickly enough and their: PRODUCT failed to meet customer needs.
SJV Resources 2009-2010
Module 1 Topic 1.4 Making the start-up effective – Lesson 1: Customer focus and the marketing mix Page 2
3.
The Marketing Mix
The marketing mix is: the combination of factors which help the business to sell a product –
usually summarised as the 4 P’s, which are price, place, promotion and product
a)
Price: the amount of money customers pay to acquire a product
b)
Product: a good or service produced by a firm and made available to customers
c)
Promotion: is the communication between the firm and the customer which makes the
customer aware of the product and persuades them to buy it.
d)
Place: is the way in which the product is distributed to the customer. This may happen: in
a physical store or on a Saturday at a market
Example: MotorMouse
http://www.motor-mouse.net/ (watch video on homepage)
Motor mouse is a high quality computer wireless mouse aimed at
the business user market.
The target market is likely to be professional men with: high disposable income.
Let’s consider their marketing mix:
Price: Each mouse retails for £29.99.
Normal wireless mice retail for between £9.99 - £15. So the price they are charging is much
higher and is called a: premium price.
The reasons they can charge a premium price include:
1. The quality of the mouse is very high, so the production costs will also be higher. The
firm needs to charge a higher price to: cover their costs and make a profit.
2. The product is unique and does not have: any significant competition.
3. The target market is affluent business people with high disposable income.
Product: This is a unique product and according to the website the
following helps MotorMouse to: differentiate itself from its competitors
http://www.motor-mouse.net/Products.html
SJV Resources 2009-2010
Module 1 Topic 1.4 Making the start-up effective – Lesson 1: Customer focus and the marketing mix Page 3
Design
 Superbly crafted classic sports car with
exquisite detail
 Slim design with superior comfort
 High quality paint finish with chrome
alloy wheels
Unique features
 Worlds’ smallest 2.4 GHz USB receiver
 Opening trunk to store batteries and
receiver
 Real rubber tyres!
 Ultra-wide ‘spare tyre’ scroll wheel
Promotion: This includes a wide range of factors such as the: packaging, the advertising, the
brand image.
Being on Dragons Den was one of the best forms of promotion possible as it: quickly helped to
raise awareness of the product
A special gift box set is another form of promotion: Special gift box includes
 Soft carrying pouch, with spare battery section inside
 Super-glide mouse mat
 Batteries
Place: The MotorMouse is distributed to customers through the website www.motor-mouse.net
It is also available at: Amazon, Micro Ankiva, Auto Regalia and many other online distributors
They are also advertising on their website for more distributors as they want to: expand their
distribution network
4.
Differences in the marketing mix:
The marketing mix is different for each business and for each industry. For example, firms with
a lot more finance can afford to spend a lot more on promotion.
The nature of the product:
also determines where it is distributed, for example people
prefer to buy cakes from a bakery where they can see and smell them, than from an online
store.
The size of the firm:
also has a significant impact on the marketing mix. A bigger firm
usually has more money to spend on product design, packaging and promotion than a smaller
firm.
The amount of competition
will also influence the marketing mix. If there is little
competition for the product, consumers will be willing to pay a higher price, however, if there
was more competition the reverse would be true
SJV Resources 2009-2010
Module 1 Topic 1.4 Making the start-up effective – Lesson 1: Customer focus and the marketing mix Page 4
4.
Conclusion
In some industries, tastes and fashion change very slowly, in other industries (such as fashion
or consumer electronics), change happens very quickly.
A firm constantly needs to evaluate its marketing mix in order to determine if they are
developing or maintaining a competitive advantage.
Syllabus Check:
Students need to:
 Understand that a business must anticipate, identify and meet customer needs if it is to
be successful
 Understand that a business will have to consider price, product, promotion and place as
important elements to meet the business opportunity
 Understand that different businesses will place different emphasis on the elements of
the mix and that the mix can be amended to meet changing consumer needs
Further Reading:
Edexcel Introduction to Small Business Student Book p92-95
SJV Resources 2009-2010
Module 1 Topic 1.4 Making the start-up effective – Lesson 1: Customer focus and the marketing mix Page 5
Customer Focus and the Marketing Mix
1.
Introduction
A business can only survive if it has customers. So focussing on what the customer wants is
vital.
It is important to identify needs, anticipate needs and meet customer needs: in order to remain
competitive.
2.
Customer Focus
a)
Identifying needs: One way to identify customer needs is through market research.
This process starts before the business launches, but should continue indefinitely.
The reason for this is that: customer’s tastes and preferences change
http://www.youtube.com/watch?v=5kaRnWPawHw
Healthfocus Europe say that consumers are now looking to
converge the:
health trend with the environmental trend
An example of this is: buying bottle water that is local to
avoid impacting on the carbon footprint.
So consumer’s tastes and preferences are: changing
Firms that do not adapt will be left behind and may struggle
to: survive
b)
Anticipating needs: watching for trends in the market is vital. Firms that anticipate
where the market is going can: gain a competitive advantage by being the first to go there
(first mover in the market)
c)
Meeting customer needs: Many firms have failed to capitalise on being the first mover
in a market because the product they have offered has had: poor quality or poor
functionality.
This even happens to large, well established firms, such as General Motors, who recently filed
for bankruptcy in late 2009.
http://www.youtube.com/watch?v=xjhYS0tSOyQ
They did not change quickly enough and their: PRODUCT failed to meet customer needs.
SJV Resources 2009-2010
Module 1 Topic 1.4 Making the start-up effective – Lesson 1: Customer focus and the marketing mix Page 6
3.
The Marketing Mix
The marketing mix is: the combination of factors which help the business to sell a product –
usually summarised as the 4 P’s, which are price, place, promotion and product
a)
Price: the amount of money customers pay to acquire a product
b)
Product: a good or service produced by a firm and made available to customers
c)
Promotion: is the communication between the firm and the customer which makes
the customer aware of the product and persuades them to buy it.
d)
Place: is the way in which the product is distributed to the customer. This may happen: in
a physical store or on a Saturday at a market
Example: MotorMouse
http://www.motor-mouse.net/ (watch video on homepage)
Motor mouse is a high quality computer wireless mouse aimed at
the business user market.
The target market is likely to be professional men with: high disposable income.
Let’s consider their marketing mix:
Price: Each mouse retails for £29.99.
Normal wireless mice retail for between £9.99 - £15. So the price they are charging is much
higher and is called a: premium price.
The reasons they can charge a premium price include:
1.
The quality of the mouse is very high, so the production costs will also be higher. The
firm needs to charge a higher price to: cover their costs and make a profit.
2.
The product is unique and does not have: any significant competition.
3.
The target market is affluent business people with high disposable income.
Product: This is a unique product and according to the website the
following helps MotorMouse to:
differentiate itself from its
competitors
http://www.motor-mouse.net/Products.html
SJV Resources 2009-2010
Module 1 Topic 1.4 Making the start-up effective – Lesson 1: Customer focus and the marketing mix Page 7
Design
 Superbly crafted classic sports car with
exquisite detail
 Slim design with superior comfort
 High quality paint finish with chrome
alloy wheels
Unique features
 Worlds’ smallest 2.4 GHz USB receiver
 Opening trunk to store batteries and
receiver
 Real rubber tyres!
 Ultra-wide ‘spare tyre’ scroll wheel
Promotion: This includes a wide range of factors such as the: packaging, the advertising,
the brand image.
Being on Dragons Den was one of the best forms of promotion possible as it: quickly helped
to raise awareness of the product
A special gift box set is another form of promotion: Special gift box includes
 Soft carrying pouch, with spare battery section inside
 Super-glide mouse mat
 Batteries
Place: The MotorMouse is distributed to customers through the website www.motor-mouse.net
It is also available at:
distributors
Amazon, Micro Ankiva, Auto Regalia and many other online
They are also advertising on their website for more distributors as they want to: expand their
distribution network
4.
Differences in the marketing mix:
The marketing mix is different for each business and for each industry. For example, firms with
a lot more finance can afford to spend a lot more on promotion.
The nature of the product:
also determines where it is distributed, for example people
prefer to buy cakes from a bakery where they can see and smell them, than from an online
store.
The size of the firm:
also has a significant impact on the marketing mix. A bigger firm
usually has more money to spend on product design, packaging and promotion than a smaller
firm.
The amount of competition
will also influence the marketing mix. If there is little
competition for the product, consumers will be willing to pay a higher price, however, if there
was more competition the reverse would be true
SJV Resources 2009-2010
Module 1 Topic 1.4 Making the start-up effective – Lesson 1: Customer focus and the marketing mix Page 8
4.
Conclusion
In some industries, tastes and fashion change very slowly, in other industries (such as fashion
or consumer electronics), change happens very quickly.
A firm constantly needs to evaluate its marketing mix in order to determine if they are
developing or maintaining a competitive advantage.
Syllabus Check:
Students need to:
 Understand that a business must anticipate, identify and meet customer needs if it is to
be successful
 Understand that a business will have to consider price, product, promotion and place as
important elements to meet the business opportunity
 Understand that different businesses will place different emphasis on the elements of
the mix and that the mix can be amended to meet changing consumer needs
Further Reading:
Edexcel Introduction to Small Business Student Book p92-95
SJV Resources 2009-2010