Marketing, competition and the customer Unit 10 The role of marketing Identifiying and satisfying customer needs 1 Maintaining customer loyalty 2 Building customer relationships 3 Key Terms 01 02 Customer base Market The group of customers a business sells it’s products to. All customers and consumers who are interested in buying a product and have the financial resources to do so. 03 04 Target Market Customer Individuals or organisations identfied by a business as the customers or consumers of their products. An individual or business that buys goods and services from a business. Key Terms 05 06 Consumer Consumer Markets The final user of a product. Markets for goods and services bought by the final consumer. 07 Industrial Markets Markets for goods and services bought by other businesses to use in their production process. 08 Business environment The combination of internal and external factors that influence the operations of a business. Why consumer patterns change The price of the product The price of competitor’s prooduct Changes in consumer income Changes in the population size and structure Changes in taste and fashion Spending on advertising and other promotional activities. Key Terms 09 10 Free Trade Niche Marketing No barriers exist that might prevent trade between countries Developing products for a small segment of the market 11 Mass Marketing Selling the same product to the whole market 12 Market Segment A part of the whole market in which consumers have specific characteristics 13 Key Terms 14 Market Segmentation Geographic segmentation Dividing the whole market into segments by consumer characteristics and then targeting different products to each segment Dividing consumers in the market by geographic area 15 Demographic segmentation Dividing consumers in the market by factor such as age, gender, income, ethnic background and social class. Why some markets become more competitive Government Intervention 1 Growth of free trade between countries 2 Development of e-commerce and social networks 3 Government Intervention ● ● ● ● Legal controls that prevent individual firms from dominating the market. Selling off public sector organisations to the private. This is known as privatsation. Deregulation – the removal of government controls from an industry. Providing financial and other assistance to new and small to medium sized businesses. How businesses respond to changing spending patterns and increased competition Increased promotion Product development 01 02 Improve efficiency 03 04 Look for new markets How martkets can be segmented Geographic Segmentation Demographic Segmentation Geographic Segmentation 2 Different regions of the world 1 Different regions within the same country 3 Different countries in the world Demographic Segmentation The main factors that may be used to segment a market using population characteristics: ● ● ● ● ● ● Age Family size Gender Ethnic background Social class Income Benefits of segmentation to business Goods and services can be designed to meet specifc need of consumers in each segment. Small firms which may not be able to compete in the whole market are able to operate in one or two segments. Segmentation of the whole market sometimes identifies a segment of consumers who have specialised needs that are not currently being satisfied. Marketing strategies can be better targeted at each segment. This reduces waste of scare resources.
