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 Secondary research uses existing data, which is cheaper but may be outdated.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.