BUSINESS NOTES: MARKETING
The process of developing a product and implementing a series of strategies aimed at correctly promoting, pricing and distributing the product to a core group of customers.
Role of marketing
- Choice: business differentiate themselves from their competitors through price, product quality and features, and service. All of these provide consumers with greater choice when purchasing.
- Standard of living: businesses will often develop and market products that improve and enhance standard of living
- Employment: to provide a product to consumers, businesses must employ labour to assist in transformed input resources into finished products. Labour is also required to sell these goods and services.
- Brand awareness: refers to the extent that customers are aware of a product (brand and its features)
- Market share: businesses will attempt to develop, promote and price products to a standard that will give the organization more customers than its competitors.
Approaches to marketing
- Production approach: relies on the view that consumers base their purchasing decisions on the quality of the product
- Selling approach: based on the belief that a business will be successful in selling a product if it is able to promote the benefits of the product to its target market
- Marketing approach: the basis of which is that the consumer is at the core of all business activities. It involves adopting a customer orientation with the belief that all actions in the business should be aimed at satisfying the needs of the customers.
- Mass market: apply to goods and services that appeal to all types of consumers
- Market segments: where a business chooses to focus on only one area of particular market
- Niche markets: a smaller section of a market segment
Types of markets
- Industrial markets: markets in which goods that are used as supplies in the production process are traded
- Resource markets: markets in which the production and sale of raw materials occur
- Intermediate markets: markets in which retail businesses purchase products that have been produced by other organisations (wholesalers).
Role of marketing
Factors influencing customer choice
- Psychological factors: are the personal characteristics of individuals that influence their behavior. These factors relate to the way people think and develop attitudes to certain products. It includes a consumer’s understanding of a product and what motivates the consumer to purchase particular products.
- Economic factors: relate to an individual’s level of income and ability to access credit.
- Sociocultural factors: that influence a customer’s choices are those that come from the customer’s society and culture, such as where they live and their religious beliefs.
- Government factors: have an important role in influencing the goods and services that consumers purchase.
Fiscal policy:government actions (the use of taxation and expenditure) that are intended to influence the level of economic activity in Australia.
Monetary policy:is used by the Reserve Bank of Australia to influence the level of interest rates in the Australian economy.
Microeconomic reform:policies developed by the government to promote greater competition within a particular industry
- Competition and Consumer Act 2010 (Cth):
- Businesses are prohibited from engaging in deceptive or misleading conduct
- This extends to conduct in the area of marketing, such as advertising, sales promotions and discounts
- Price discrimination refers to the process of a business giving preference to some retail stores by providing them with stock at lower prices than is paid by the retailers’ competitors.
- Implied conditions and warranties ensure that a product is sold in full working condition and is consistent with the description given.
- Resale price maintenance ensures a manufacturer cannot refuse to sell goods to a retailer who decides not to sell the good at the price that is suggested by the manufacturer.
- Marketers are expected to engage in fair and honest behavior when developing a marketing campaign. It is expected that when promotional material is distributed, this material represents information that is truthful and accurate.
Maslow hierarchy of needs
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