LEARNING OBJECTIVES
What you will be able to do
- explain the role of marketing, competition and segmentation
- evaluate primary and secondary market research
- apply product, price, promotion and place decisions
- develop strategies for domestic and international markets
AT A GLANCE
INTRODUCTION · THE BIG IDEA
Use customer knowledge, research and the marketing mix to build a coherent strategy.
Marketing begins with identifying and anticipating customer needs, not with advertising. Research reduces uncertainty, segmentation selects a target, and the four elements of the marketing mix must support one another.
A premium product sold through exclusive outlets needs a different price and promotion strategy from a mass-market convenience product.
SECTION 01
Markets, competition and segmentation
Marketing aims to identify and satisfy customer needs, maintain loyalty and build relationships. Consumer income, taste, technology, demographics and competition change spending patterns, so businesses must adapt.
Mass markets offer large sales potential and economies of scale but intense competition. Niche markets can charge specialised prices and build loyalty but are smaller and vulnerable to change. Segmentation may use age, income, location, lifestyle or other relevant characteristics.
Calculating market share
- A business sells products worth $3.6 million.
- Total market sales are $24 million.
- Market share = 3.6 ÷ 24 × 100%.
Answer: Market share = 15%.
SECTION 02
Market research
Primary research collects new data for the business through questionnaires, interviews, focus groups, observation or trials. It is specific and current but can be costly and biased. Secondary research uses existing internal or external information and is quicker but may be outdated or unsuitable.
A representative sample reduces bias. Questions should be neutral, clear and non-overlapping; pilot testing finds faults. Quantitative data is numerical, while qualitative data explains attitudes and reasons.
SECTION 03
Product and price
Product decisions include design, quality, features, branding, packaging and after-sales service. The product life cycle moves through development, introduction, growth, maturity and decline; extension strategies may alter product, promotion, market or use.
Price strategies include cost-plus, competitive, penetration, skimming and promotional pricing. Price elasticity affects whether a price change raises revenue, but the business must also consider cost, brand position, competitors and objectives.
| Strategy | Useful when | Risk |
|---|---|---|
| Penetration | entering a competitive mass market | low margin; difficult later increase |
| Skimming | innovative product with early demand | invites competitors |
| Competitive | similar products are easy to compare | may ignore own costs |
SECTION 04
Promotion, place and strategy
Promotion informs or persuades through advertising, sales promotion, personal selling, direct marketing and public relations. Choice depends on target audience, message, budget, product and ability to measure response.
Place covers channels from producer directly to consumer or through wholesalers and retailers. Intermediaries add reach and services but take margin and reduce control. E-commerce increases reach and convenience while creating delivery, security and competition challenges.
International marketing may require adapting language, culture, income level, law, distribution and competition. A standardised strategy saves cost but local adaptation may improve relevance.
QUICK CHAPTER SUMMARY
The ideas to carry forward
- Marketing identifies and satisfies changing customer needs.
- Good research reduces uncertainty but never removes it.
- The four Ps must target the same customer and position.
- International strategies balance consistency with local adaptation.
QUICK REVISION CHECKLIST
Can you do each of these without your notes?
- explain the role of marketing, competition and segmentation
- evaluate primary and secondary market research
- apply product, price, promotion and place decisions
- develop strategies for domestic and international markets