Decision making to improve marketing performance
Marketing
Provides the link between customers and business. Therefore marketing
managers need to understand the nature of their market and feed back
this info to the other functions eg operations.
Marketing involves a mutually beneficial exchange process. The business
gains profit, customer gains satisfaction. Ideally a win-win situation and
therefore want to trade again.
Marketing aims to satisfy customers so they return. Building relationships
with customers so they are loyal, return and willing.
Over time, banks want you to buy:
– Savings account
– Borrowing
– Insuring
– Buying shares
– Changing currency
Relationship marketing seeks to build long term relationships with
customers by providing consistent satisfaction. It focuses on customer
retention.
Philip Kotler defines marketing as ‘an art and science.
– A science as it is data driven;
– An art as it has a creative element
What is a market?
A market occurs when there are buyers and sellers e.g. the housing market.
The nature of these markets varies e.g. by scale. Some sell via
intermediaries e.g. newspapers in shops whereas others sell direct to
customers e.g. restaurants. Many products are sold online but you cannot
buy a haircut online. It is important for managers to understand the nature
of their market. Examining the particular characteristics of the market is
known as ‘market analysis’.
Decision making to improve performance in marketing
– Setting objectives
– Understanding customers
– Understanding market conditions
– Understanding strengths
– Understanding how best to deliver the benefits
, – Implementing decisions
– Reviewing
This process is iterative e.g. market analysis may change their objectives.
Marketing decisions are driven by data. If managers ask for funds to invest
senior managers will want data to justify. However, sometimes hunch
influences decisions.
Marketing decisions will help improve performance by meeting customer
needs + wants. Marketing helps identify the opportunities and ensures the
benefits are communicated.
Ethics and marketing
– Should they promote products at children to pester their parents?
– Should they promote harmful products e.g. cigarettes?
– Should a new drug charge high prices or make it widely available?
– Should they distribute chocolate near schools, despite obesity?
Marketing objectives
3 (free) sales in the brand new market
Sales value
How much is spent on a product eg sales of £30,000
Sales volume
The number of units sold, eg sales of 200,000kg or 5 million cans.
Sales growth
The rate of growth depends on factors e.g. the growth of the market. The
growth rate depends on sales. At first it can be relatively easy to grow
quickly as the number involved are so small.
Market share
Measures the amount a product sells as a % of the total sales of the
market. Equation:
(Sales of this product/total market sales) x100
Market share is often a target rather than a must as it reflects what is
happening in the market overall. Eg increasing sales by 5% when the sales
for the market increase by 30%.
High market share suggests:
– High sales therefore profit
– High outputs - can negotiate economies of scale with suppliers
, – High prominence in the market - strengthens the brand
Brand loyalty
Retaining customers is an important as keeping customers is easier +
cheaper than attracting new ones. Brands are also valuable and may be
sold later.
The value of setting marketing objectives
It helps to coordinate activities within the business. If the objectives are
clear it helps to clarify what the priorities are (where time and money
should be spent). Marketing objectives also determine other functional
decisions e.g. staffing levels, capacity + investment.
Influences on marketing objectives
Internal influences:
The overall strategy
E.g. focus on growth - high sales target.
The ambitions of managers
Optimistic managers may set demanding objectives to grow
The existing position
Limits the scale of how realistic objectives can be.
Capacity
Can’t be too high unless it outsources some production.
Finance
Limits the amount of promotional activity.
The employees
Their skills affect the quality + service.
External influences
The political and legal environment
Determines what is allowed by law e.g. restrictions on cigarettes. Political
decisions e.g. trade + migrants open up new markets. This can affect
marketing targets that relate to what is sold where.
Economic change
Changes affect customers affordability to pay for items. Incomes fell in
, 2008; many switched to Aldi + Lidl. Globalisation and growth of emerging
economies create new markets to target.
Social change
Affects customers’ view of what is acceptable + what they expect.
Especially for ethical trading practices. Population growth, urbanisation
and ageing populations change demand patterns.
Technological change
Affects communication with customers + track their behaviour. As
technology has spread, with more online buyers, therefore higher sales
targets.
The competitive environment
Affects the range of options open to customers and what to offer to match
its rivals. E.g. comparison sites may force down prices. Travel + insurance
has been transformed by online competition. Going online reduces costs +
reaches a wider audience globally.
External factors on the property market
Political/ legal:
– Laws on contracts
– Selling regulations
– Planning permission
Economic:
– Cost of borrowing for a mortgage
– Incomes + employment rates affect demand
Social patterns:
– Family or retirement homes
– Urbanisation + migration affects the demand in different areas.
Technological:
– Easier to promote + find houses online
Competitive:
– More pressure to offer better value housing
Chapter 8
Understanding markets and customers
Market research
Essential for realistic objectives + how best to achieve them. It will reduce
the risk of decision making.
Uses
Marketing
Provides the link between customers and business. Therefore marketing
managers need to understand the nature of their market and feed back
this info to the other functions eg operations.
Marketing involves a mutually beneficial exchange process. The business
gains profit, customer gains satisfaction. Ideally a win-win situation and
therefore want to trade again.
Marketing aims to satisfy customers so they return. Building relationships
with customers so they are loyal, return and willing.
Over time, banks want you to buy:
– Savings account
– Borrowing
– Insuring
– Buying shares
– Changing currency
Relationship marketing seeks to build long term relationships with
customers by providing consistent satisfaction. It focuses on customer
retention.
Philip Kotler defines marketing as ‘an art and science.
– A science as it is data driven;
– An art as it has a creative element
What is a market?
A market occurs when there are buyers and sellers e.g. the housing market.
The nature of these markets varies e.g. by scale. Some sell via
intermediaries e.g. newspapers in shops whereas others sell direct to
customers e.g. restaurants. Many products are sold online but you cannot
buy a haircut online. It is important for managers to understand the nature
of their market. Examining the particular characteristics of the market is
known as ‘market analysis’.
Decision making to improve performance in marketing
– Setting objectives
– Understanding customers
– Understanding market conditions
– Understanding strengths
– Understanding how best to deliver the benefits
, – Implementing decisions
– Reviewing
This process is iterative e.g. market analysis may change their objectives.
Marketing decisions are driven by data. If managers ask for funds to invest
senior managers will want data to justify. However, sometimes hunch
influences decisions.
Marketing decisions will help improve performance by meeting customer
needs + wants. Marketing helps identify the opportunities and ensures the
benefits are communicated.
Ethics and marketing
– Should they promote products at children to pester their parents?
– Should they promote harmful products e.g. cigarettes?
– Should a new drug charge high prices or make it widely available?
– Should they distribute chocolate near schools, despite obesity?
Marketing objectives
3 (free) sales in the brand new market
Sales value
How much is spent on a product eg sales of £30,000
Sales volume
The number of units sold, eg sales of 200,000kg or 5 million cans.
Sales growth
The rate of growth depends on factors e.g. the growth of the market. The
growth rate depends on sales. At first it can be relatively easy to grow
quickly as the number involved are so small.
Market share
Measures the amount a product sells as a % of the total sales of the
market. Equation:
(Sales of this product/total market sales) x100
Market share is often a target rather than a must as it reflects what is
happening in the market overall. Eg increasing sales by 5% when the sales
for the market increase by 30%.
High market share suggests:
– High sales therefore profit
– High outputs - can negotiate economies of scale with suppliers
, – High prominence in the market - strengthens the brand
Brand loyalty
Retaining customers is an important as keeping customers is easier +
cheaper than attracting new ones. Brands are also valuable and may be
sold later.
The value of setting marketing objectives
It helps to coordinate activities within the business. If the objectives are
clear it helps to clarify what the priorities are (where time and money
should be spent). Marketing objectives also determine other functional
decisions e.g. staffing levels, capacity + investment.
Influences on marketing objectives
Internal influences:
The overall strategy
E.g. focus on growth - high sales target.
The ambitions of managers
Optimistic managers may set demanding objectives to grow
The existing position
Limits the scale of how realistic objectives can be.
Capacity
Can’t be too high unless it outsources some production.
Finance
Limits the amount of promotional activity.
The employees
Their skills affect the quality + service.
External influences
The political and legal environment
Determines what is allowed by law e.g. restrictions on cigarettes. Political
decisions e.g. trade + migrants open up new markets. This can affect
marketing targets that relate to what is sold where.
Economic change
Changes affect customers affordability to pay for items. Incomes fell in
, 2008; many switched to Aldi + Lidl. Globalisation and growth of emerging
economies create new markets to target.
Social change
Affects customers’ view of what is acceptable + what they expect.
Especially for ethical trading practices. Population growth, urbanisation
and ageing populations change demand patterns.
Technological change
Affects communication with customers + track their behaviour. As
technology has spread, with more online buyers, therefore higher sales
targets.
The competitive environment
Affects the range of options open to customers and what to offer to match
its rivals. E.g. comparison sites may force down prices. Travel + insurance
has been transformed by online competition. Going online reduces costs +
reaches a wider audience globally.
External factors on the property market
Political/ legal:
– Laws on contracts
– Selling regulations
– Planning permission
Economic:
– Cost of borrowing for a mortgage
– Incomes + employment rates affect demand
Social patterns:
– Family or retirement homes
– Urbanisation + migration affects the demand in different areas.
Technological:
– Easier to promote + find houses online
Competitive:
– More pressure to offer better value housing
Chapter 8
Understanding markets and customers
Market research
Essential for realistic objectives + how best to achieve them. It will reduce
the risk of decision making.
Uses
