THE MARKETING FUNCTION
1. Role of marketing as part of the overall business strategy
1.1 Strategic role of marketing
The strategic role of marketing is creating and supporting a strong, positive brand identity through a well-
planned and well-implemented marketing strategy.
1.2 Formulating the Marketing strategy:
The business may use any of the following approaches:
➢ A full focus on marketing the overall brand of the business and little focus on marketing products.
➢ A full focus on marketing products and little focus on marketing the business.
➢ An emphasis on marketing both the business and product.
The 5-step process to formulate a marketing strategy:
1. Perform and environmental scan.
2. Define target market and USP (Unique Selling Proposition).
3. Determine marketing budget.
4. Implement marketing mix to achieve aims of the marketing strategy.
5. Evaluate the effectiveness of the process and take corrective action where necessary.
Step 1 – The Environmental Scan
External Analysis
An environmental scan will include an internal and external analysis.
Industry Analysis – This is assessing the market the business operates in and the purpose is to identify
opportunities and threats using PESTLE elements.
Competitor Analysis – The business should evaluate competitor strengths and weaknesses and the impact
these may have on the business using Porter’s Six Forces like level of rivalry, threat of new entrants, and
substitute products.
Market mapping is a visual representation of market trends. The position of different competitors hold is
plotted on a map to help the business identify their own position in the market relative to those of competitors.
An example of a marketing map with two variables (price and quality):
High Quality
PnP Woolworths
Low Price
High Price
Some
products
from “China
mall”
Low Quality
, Customer Analysis – Analysing the customer base will help the business to identify potential market
segmentations (LSM-groupings). The LSM (Living Standards Measure) tool segments the public based on
variables. These variables include whether they own items such as a swimming pool, computer, etc.
The purpose of LSM groupings (LSM 1 – LSM 10) is to:
• Gain an understanding of the different market segments.
• Assess how groups spend their money.
• To group consumers with similar spending patterns.
SEM (Socio-Economic Measurement) – focuses on the type of structure the person lives in to segment the
market (i.e., bigger houses means they have more disposable income to spend).
The higher the LSM the more disposable income the person has.
Internal Analysis
The business should determine their unique selling proposition (USP). This can be factors such as price, quality,
brand identity, etc.
The Marketing Mix (7Ps)
Product
The type of product may be:
Convenience goods – products that want to be bought as easily as possible such as milk, bread, etc.
Customers are not very brand loyal towards these products.
Select goods – only purchased once the consumer has considered factors such as price, quality, brand
name. These are things such as clothes, shoes, and jewellery.
Specialty goods – The buyer will spend a lot of time before a decision to purchase the product is made.
These are goods such as cars, household appliances, and tech products.
Service – it can be an individual service such as a doctor, or hairdresser or it could form part of the
overall product such as a pizza delivery driver.
The life cycle of the product has an impact on how the product is marketed by the business.
Sales
Withdrawal
Development
Introduction
Decline/
Maturity
Growth
1. Role of marketing as part of the overall business strategy
1.1 Strategic role of marketing
The strategic role of marketing is creating and supporting a strong, positive brand identity through a well-
planned and well-implemented marketing strategy.
1.2 Formulating the Marketing strategy:
The business may use any of the following approaches:
➢ A full focus on marketing the overall brand of the business and little focus on marketing products.
➢ A full focus on marketing products and little focus on marketing the business.
➢ An emphasis on marketing both the business and product.
The 5-step process to formulate a marketing strategy:
1. Perform and environmental scan.
2. Define target market and USP (Unique Selling Proposition).
3. Determine marketing budget.
4. Implement marketing mix to achieve aims of the marketing strategy.
5. Evaluate the effectiveness of the process and take corrective action where necessary.
Step 1 – The Environmental Scan
External Analysis
An environmental scan will include an internal and external analysis.
Industry Analysis – This is assessing the market the business operates in and the purpose is to identify
opportunities and threats using PESTLE elements.
Competitor Analysis – The business should evaluate competitor strengths and weaknesses and the impact
these may have on the business using Porter’s Six Forces like level of rivalry, threat of new entrants, and
substitute products.
Market mapping is a visual representation of market trends. The position of different competitors hold is
plotted on a map to help the business identify their own position in the market relative to those of competitors.
An example of a marketing map with two variables (price and quality):
High Quality
PnP Woolworths
Low Price
High Price
Some
products
from “China
mall”
Low Quality
, Customer Analysis – Analysing the customer base will help the business to identify potential market
segmentations (LSM-groupings). The LSM (Living Standards Measure) tool segments the public based on
variables. These variables include whether they own items such as a swimming pool, computer, etc.
The purpose of LSM groupings (LSM 1 – LSM 10) is to:
• Gain an understanding of the different market segments.
• Assess how groups spend their money.
• To group consumers with similar spending patterns.
SEM (Socio-Economic Measurement) – focuses on the type of structure the person lives in to segment the
market (i.e., bigger houses means they have more disposable income to spend).
The higher the LSM the more disposable income the person has.
Internal Analysis
The business should determine their unique selling proposition (USP). This can be factors such as price, quality,
brand identity, etc.
The Marketing Mix (7Ps)
Product
The type of product may be:
Convenience goods – products that want to be bought as easily as possible such as milk, bread, etc.
Customers are not very brand loyal towards these products.
Select goods – only purchased once the consumer has considered factors such as price, quality, brand
name. These are things such as clothes, shoes, and jewellery.
Specialty goods – The buyer will spend a lot of time before a decision to purchase the product is made.
These are goods such as cars, household appliances, and tech products.
Service – it can be an individual service such as a doctor, or hairdresser or it could form part of the
overall product such as a pizza delivery driver.
The life cycle of the product has an impact on how the product is marketed by the business.
Sales
Withdrawal
Development
Introduction
Decline/
Maturity
Growth
