Marketing Strategies and Market Research

Marketing Strategies

• Marketing aims to identify, anticipate, and satisfy consumer needs profitably.
• Mass markets target broad market segments with large-scale production and low prices, leading to lower profit margins. Examples include Primark.
• Niche markets, like Louis Vuitton, focus on specialized products for smaller consumer groups, leading to higher production costs, higher prices but higher profit margins.
• Market size and share are measured by sales volume or value. Market share is the percentage of total sales.
• Branding differentiates products, adding value, increasing pricing power, and influencing a business's market position through perceived quality and legal protection.

Market Research

• Market research involves gathering and analyzing data to reduce risks, understand customers, and identify opportunities.
• Research can be qualitative (non-numerical insights) or quantitative (measurable data).
• Primary research gathers new, tailored data, but it's costly. Secondary research uses existing data, which is cheaper but may be outdated.
• Methods like questionnaires, focus groups, and product trials gather insights. Focus groups provide in-depth opinions, while product trials help refine products before launch.

Operations Management

• Operations management focuses on designing, managing, and improving the processes that transform inputs into outputs (goods and services).
• Key targets include maximizing efficiency, minimizing unit costs, and maximizing quality.
• Unit costs are calculated as total costs divided by the number of units produced and are influenced by production volume, supply costs, and labor productivity.
• Capacity utilization measures current output as a percentage of maximum potential output. High capacity utilization reduces fixed costs per unit; low utilization increases them.

Price Elasticity of Demand (PED)

• PED measures how demand changes in response to price changes.
• Inelastic products (PED < 1) have less responsive demand, due to high differentiation, few substitutes, and strong brand loyalty
• Elastic products (PED > 1) have more responsive demand.

Income Elasticity of Demand (YED)

• YED measures how demand changes with income.
• Normal necessary products have a low but positive YED (e.g., milk). Demand rises slightly as income increases.
• Inferior goods have a negative YED, where demand decreases as income rises.
• YED is important for firms to predict sales during economic changes and to diversify product ranges to mitigate risks.

Opportunity Cost & Business Objectives

• Risk refers to the chance of loss or damage (business failure, investment loss, debt).
• The opportunity cost is the next best alternative forgone when making a choice.
• Business objectives include survival, profit maximization, market share, cost efficiency, employee welfare, and customer satisfaction.

Distribution

• Distribution involves making products or services available to customers when and where they need them.
• Methods include retailing (physical shops), e-tailing (online), wholesalers (purchase from producers).
• Factors influencing distribution include product type, speed requirements, distance.
• Social trends are impacting how goods transition into online services.

Survival & Profit Maximisation

• Survival involves breaking even during tough times, by reducing costs or prices.
• Profit maximisation focuses on increasing sales and reducing costs.

Product Life Cycle & Portfolio Analysis

• Product portfolio analysis examines each product or brand to improve market performance.
• The product life cycle helps businesses plan their marketing mix and allocate resources effectively, although limitations exist.
• Extension strategies can prolong a product's lifecycle, such as introducing new versions, offering limited editions, or updating packaging.
• The Boston Matrix categories products based on market share and market growth.

Explore the essential concepts of marketing strategies and market research. This quiz covers mass and niche markets, branding, market size, and the importance of qualitative and quantitative research methods. Test your knowledge on how these elements influence consumer behavior and business success.