Marketing Strategies Overview

Responding to Changing Spending and Increased Competition

• Maintaining good customer relationships is crucial for business success.
• Improving existing products is vital for staying competitive.
• Keeping prices low can attract customers, especially in competitive markets.

Niche Marketing

• Niche marketing focuses on a specific, smaller segment of a larger market.
• Advantages: Small firms can succeed where large ones haven't, and lack of competition allows for higher profit margins.
• Disadvantages: Reduced economies of scale, and successful niche markets can attract competition.

Mass Marketing

• Mass marketing targets the entire market without specific segments.

Market Segmentation

• Market segmentation divides the market into groups based on characteristics.
• Advantages: Cost-effective marketing targeting specific needs, leading to higher sales and profitability.

Product and Market Orientation

• Product-oriented businesses create products first and find markets later.
• Market-oriented businesses conduct market research to identify consumer needs and customise goods/services.

Market Research

• Market research involves gathering, analyzing, and interpreting information about a product.
• Importance: To ensure products meet market needs and generate profit.

Primary Market Research (Field Research)

• Primary market research collects original data directly from customers.
• Sample: A subset of the target population representing the whole group.
• Sampling: Selecting a sample.
• Random sampling: Selecting people randomly for research.
• Quota sampling: Selecting people based on specific characteristics.

Primary Research Methods:

Questionnaires

• Advantages: Gather detailed information, understand customer opinions.
• Disadvantages: Inaccurate answers if questions are unclear; time-consuming.

Interviews

• Advantages: Clarify questions, gather detailed responses, understand body language.
• Disadvantages: Potential for interviewer bias, time-consuming.

Focus Groups

• Advantages: Detailed consumer opinions.
• Disadvantages: Time-consuming, expensive.

External Sources of Information

• External sources include government statistics, newspapers, trade associations, and market research agencies.

Successful Product Attributes

• Satisfies customer needs/wants.
• Stimulates new wants in consumers.

New Product Development Process

1. Generate ideas
2. Select best ideas for further research
3. Assess potential sales and product viability
4. Develop prototype
5. Test launch
6. Full launch

Brand Image and Loyalty

• Brand image differentiates a product from competitors.
• Brand loyalty results in repeat purchases instead of switching brands.

Product Life Cycle

• Extension strategies: Market techniques to support the maturity phase of a product, keeping it in the market.

Pricing Strategies

• Market skimming: High initial pricing for unique products.
• Penetration pricing: Low initial pricing to attract customers.
• Competitive pricing: Prices similar to competitors' existing products.
• Cost-plus pricing: Adding a markup to the cost of production.
• Promotional pricing: Setting a few products below cost to attract customers.
• Price elasticity: Lower prices for elastic demand products, higher for inelastic.

Distribution Channels

• Manufacturer to customer: Direct sales, high delivery costs.
• Manufacturer to retailer to customer: Retailers hold inventory, retailers take profit.
• Manufacturer to wholesaler to retailer to customer: Wholesalers handle transportation and storage, more intermediaries, reduced producer profit.
• Manufacturer to agent to wholesaler to retailer to customer: Agent specialist market knowledge, yet another intermediary.

Promotion

• Promotion: Marketing activities to inform and persuade customers to buy products.
• Marketing strategy: Plan combining the marketing mix elements to meet objectives.

Productivity

• Productivity: Measure of efficiency in inputs over time.
• Productivity = output/input

Increasing Productivity

• Improving employee skills (training).
• Automation.
• Improved employee motivation.

Lean Production

• Lean production: Techniques to reduce waste and increase efficiency.
• Benefits: Reduced raw material and finished goods inventory, faster production.

Kaizen

• Kaizen: Japanese term for continuous improvement through waste elimination.
• Benefits: Increased productivity, less work-in-progress.

Just-in-Time Production

• Just-in-time (JIT): Minimises inventory of raw materials and finished goods.

Production Methods

• Job production: Single-item production, high cost, high customer customization.
• Batch production: Quantity of one product made, flexible but requires machine resetting and warehousing.
• Flow production: Large quantities of standardised products, low cost per item but repetitive for workers.

Factors Affecting Production Method Choice

• Product nature, market size, demand nature, business size.

Costs

• Fixed costs: Constant regardless of production volume.
• Variable costs: Vary directly with production volume.

Economies and Diseconomies of Scale

• Economies of scale: Reduced average costs with increased size.
• Diseconomies of scale: Increased average costs with excessive size.

Break-Even Point

• Break-even level of output: Quantity produced/sold to equal total revenue with total costs.

Quality

• Quality: Meeting customer expectations in products and services.
• Quality control: Checking quality at the end of the process. Disadvantages include potentially costly product replacement/rework, and not identifying the root cause of defects.
• Quality assurance: Checking quality throughout the production process. Advantages include better customer satisfaction due to early defect identification and easier fault resolution. Disadvantages include often higher cost.
• Total Quality Management (TQM): Continuous quality improvement integrated into every stage of production. Advantages include quality built into every part of the process. Disadvantage is higher training and implementation costs.