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Marketing. National 4/5 Business Management 2012-13. What is Marketing?. Marketing is more than just advertising and selling. It involves identifying consumer's needs and wants and meeting them in such a way that the producer makes a profit. Product Led v Market Led.

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National 4/5 Business Management


what is marketing
What is Marketing?
  • Marketing is more than just advertising and selling. It involves identifying consumer's needs and wants and meeting them in such a way that the producer makes a profit.
product led v market led
Product Led v Market Led

Can you think of more examples?

product led
Product Led
  • This is when a firm invents a product without finding out if it is what consumers want.
  • Successful products usually come from new inventions and technologies
  • Some product led companies struggle to do well.
market led
Market Led
  • This is when firms use market research to find out what consumers want, then they make it.
  • This product is usually useful and successful as they have listened to what their customers want.
market research
Market Research
  • In order to be successful, you need to know what your customers want.
  • To find this out we use Market Research
  • There are 2types of Market Research:
      • Field Research
      • Desk Research


field research
Field Research
  • This involves gathering primary information; this is first-hand information.
  • We can find out this information through doing:
    • Surveys
    • Observations
    • Consumer Panels
    • Focus Groups
    • Test Marketing
    • Interviews
field research1
Field Research


  • it is specific to your needs
  • it is accurate
  • it is up-to-date


  • time consuming to collect
  • expensive to collect (training)
desk research
Desk Research
  • This involves gathering secondary information, which is gathered from an external source
  • Information can be gained through:
    • Newspapers
    • the Internet eg competitors’ websites
    • Government Statistics
    • Market Research Agencies eg MORI
desk research1
Desk Research


  • less time consuming
  • less expensive
  • Wide range of sources


  • information is not specific to your needs
  • cannot be sure about accuracy
  • information may be out of date
  • may not be objective
market segmentation
Market Segmentation
  • A market is made up of different types of consumers each with their own needs and wants.
  • They are grouped into segments, so that companies can tailor products for each group.
why target marketing
Why Target Marketing?
  • Products can be made specific to the customers’ needs.
  • The promotion, price and place can be tailored to the target market and increase their chances of sales.
market segmentation groups
Market Segmentation Groups
  • gender
  • religion
  • area
  • age
  • education level
  • social class
  • political persuasion
  • family structure
the marketing mix 4p s
The Marketing Mix (4P’s)





product product development
Product – Product Development

There are various areas designers need to be aware of when designing a product:


Should it be functional, or eye catching?


Is the product to be unique or part of a range?

After Sales

Will there be customer service, offers, guarantees?

  • Function
    • What is the purpose of the product?
  • Design
    • What should it look like, any added features?
  • Quality
    • What level of quality will the product be?
product branding
Product - Branding

Branding is an expensive process but it brings many tangible rewards if a business gets it right.

It is a product that is seen in the eyes of the consumer as different from other similar products (unique).

product branding1
Product - Branding



Huge initial financial outlay

High marketing costs

Counterfeit goods

Own Brands

  • Can charge a premium price
  • High awareness
  • Perceived high quality
  • Easier to launch new products
own brands
Own Brands
  • Established brands are under increasing pressure from cheaper ‘own brands’.
  • Consumers are increasingly more aware of these brands.
  • Supermarkets have seen an increasing growth in own brand sales.
product lifecycle
Product Lifecycle
  • Products pass through certain stages of development during their existence.
  • This is called the Product Lifecycle.
  • The length of a product’s lifecycle can vary depending on the product.
product lifecycle1
Product Lifecycle





product lifecycle explained
Product Lifecycle - explained
  • Introduction
    • product is launched onto the market; advertising and promotion begin; sales are increasing slowly.
  • Growth
    • as product becomes well-known through word of mouth, sales increase rapidly.
  • Maturity
    • sales reach their peak and start to level off.
  • Decline
    • sales fall as demand decreases.
extension strategies
Extension Strategies
  • A company can extend the lifecycle of a product by injecting new life into it, using extension strategies.
  • This can be done through the 4P’s:
    • Product – altering packaging, new features
    • Price – changing the price
    • Promotion – new promotion, special offers
    • Place – changing location sold e.g. Internet
extension strategy
Extension Strategy





  • Your price should appeal to consumers, however, consumers look at pricing in 2 ways:
    • if it is too low, they think that the quality may be poor
    • if it is too high, they will think it is not worth the money
price strategies
Price - strategies

Long Term

  • High (Premium) price
    • Price set above competition to give an impression of high quality
  • Market Price
    • Price set at the same as competition and they compete on other factors
  • Low Price
    • Price set below competition to offer customers value for money
price strategies1
Price - strategies

Short Term

  • Penetration
    • Price set below competition initially. Once customer base has been established price is then raised.
  • Skimming
    • Price set high initially while no competition exists. Price gradually dropped as competition enter the market.
  • Destroyer
    • Large companies set price artificially low (loss leader) to eliminate competition and gain more market share. Once competition is gone the price can be raised.
  • Cost Plus
    • This is simply calculated by working out the cost per item and then adding on a percentage for profit.
  • There are 3 main types of Promotion:
    • Advertising
    • Sales Promotion
    • Public Relations
promotion advertising
Promotion - Advertising
  • Advertising aims to be either:
    • Informative


    • Persuasive
promotion advertising1
Promotion - Advertising

Types of Advertising include:

  • Print – Newspapers/magazines
  • Broadcast – TV/Radio/Cinema
  • Outdoor – Billboards
promotion sales promotions
Promotion – Sales Promotions

These are methods employed for a limited time to increase consumer demand:

  • Buy one get one free (BOGOF)
  • Discounts e.g. 10% off
  • Competitions
  • Free gifts
  • Product trials
  • Point of sale advertising egposters displaying special offers
promotion sales promotions1
Promotion – Sales Promotions
  • Direct Mail – This is in the form of mail delivered to your address, promoting a product or service. Often referred to as ‘Junk Mail’.
  • Personal Selling – Involves salesmen coming to homes to sell a product. It may be something that requires demonstration or explanation
promotions others
Promotions – others

Other types of promotion include:

  • Product placement – products appear on TV/Film
  • Product endorsement – a celebrity promotes it
  • Sponsorship – of a sport or TV programme
promotion public relations pr
Promotion – Public Relations (PR)

The PR department will aim to enhance the organisations image.

They will deal with the:

  • Press
  • Government
  • Public

Activities they take part in include:

  • Press statements
  • Charitable donations
  • Customer care
  • This is where the product service is available for sale.
place channels of distribution
Place – channels of distribution













Wholesaler will buy in bulk; will finish off packaging; customer discounts

Closer relationship with customer; price can be reduced

Price highest for customer; benefits from wholesaler and retailer

Retailer has close customer relationship; advertise products; accurate feedback

place factors affecting choice
Place – Factors affecting choice
  • There are a number of factors which will determine how and where a company sells its products:
    • Competition – where they are located and method of distribution used.
    • Resources – how close are resources needed to produce products
    • Cost of premises – in/out of town
    • Government incentives – they may give grants for locating in a certain area
    • Nature of the product - is it perishable how quickly does it need to reach the customer
marketing ict
Marketing & ICT
  • Marketing has been significantly enhanced with the rapid rise in the use of ICT. It can be used to enhance marketing in a number of ways:
    • Loyalty Cards
    • E-Commerce
    • Social Media
marketing ict loyalty cards
Marketing & ICT – Loyalty Cards
  • Loyalty Cards have enabled companies to collect a vast amount of information on customers.
  • They can gather information on what we buy, when we buy, and how much we spend.
  • It is an excellent market research tool.
  • Information will be stored on a computer database.
marketing ict e commerce
Marketing & ICT – E-commerce
  • The surge in online shopping has been huge.
  • A lot of businesses will either operate solely online or at least have an e-commerce facility for customers to purchase goods or services.
  • Advantages
    • Can buy products 24/7 from home
    • Can compare, so possibly cheaper
    • Cheaper for business to operate as less staff and space needed.
marketing ict social media
Marketing & ICT – Social Media
  • One of the biggest technological rises has been in Social Media.
  • Companies will ensure that they operate on various networking platforms to advertise to and keep in touch with consumers.