What is Marketing?

Lesson objectives

Describe what marketing is

Explain the different markets that businesses operate within

Analyse the importance of marketing to business

Mantle of the Expert....

Everyone likes to show off.....this is your golden opportunity to show what you know....

Write down anything you know about marketing...

Who is going to be the mantle of the expert???

Marketing is About…

Understanding the needs of customers

Meeting the needs of customers

Delighting customers so they…

Buy from you again

Recommend you to their friends and family

Become loyal to your products and brands

MARKETING IS ALL ABOUT THE CUSTOMERS!

Formal Definition of Marketing

“The process of identifying, anticipating (predicting) and satisfying customer needs profitably”

What does it mean?

Marketing

Identifying – finding out by using marketing research about current products, the possibility of new products, and current markets and new markets

Anticipating (predicting) – analysing the data collected to judge what might happen in these markets and how the products might be suited or changed, adapted or updated

Satisfying customer needs – making sure the person, business or government are happy with what they are buying, will not complain and will be happy to buy again

Profitably – adding value to the product so when sold, the price of a product is greater than cost of making it

Four Main Kinds of Market

Industrial markets

The market for manufactured products aimed at businesses, i.e. capital goods e.g. engineering, construction

Consumer markets

The market for goods and services that are sold to households e.g. clothing, shampoo, holidays (see next slide for ways in which consumer markets can be categorised in more detail)

Commodity markets

The market for primary products or raw materials e.g. steel, coal, coffee

Financial markets

The market for services that dealing with money e.g. banking, insurance, accounting

Consumer Markets

Most of the markets you will study are consumer markets. They can be sub-divided into even more categories!

Fast-moving consumer goods (“FMCGs”)

These are high volume, low unit value, fast repurchase

Examples include: Ready meals; Baked Beans; Newspapers

Consumer durables

These have low volume but high unit value. Consumer durables are often further divided into “white goods” (e.g. fridge-freezers; cookers; dishwashers; microwaves) and “brown/black goods” (e.g. DVD players; games consoles; personal computers)

Soft goods

Soft goods are similar to consumer durables, except that they wear out more quickly and therefore have a shorter replacement cycle. Examples include clothes, shoes

Services

E.g. hairdressing, dentists, childcare

Measuring the Market

Not all markets are the same Some are very large, some small Some markets are focused on a particular location; others operate

around the world

We need a measure of a market – most often we talk about “market size”

Market size means the number of customers in the market (either current or potential buyers) and the amount (value or volume) that they buy.

One business rarely sells to all the customers in the market. They will have a share of the market with the rest shared out amongst one or more competitors. Market share by value: using sales in a specific period (usually one

year) Market share by volume: using units sold or bought as a measure of

size

Market share is an important idea. There is lots of evidence to show that businesses that enjoy a large share of a market achieve higher profits than smaller competitors.