2. Market research

3. Marketing mix

4. Price

5. Product

6. Place

7. Promotion

9. Gender

10. Location

11. Lifestyle

12. Socio economicThe market SWOT analysis Land availability Labour supply Analysingthemarket

13. TheMarket Analysing the Market Analysing the market involves: Breaking down the market for particular goods or services into parts Review the supply of a product using a SWOT analysis Analysing the market allows the firm to: Target its advertising and promotion Make the products more attractive to each type of customer Maximise sales and cut costs through targeting Plan future business strategies Market segments This means dividing demand for a good or service into segments with specific characteristics. The firm can then target its product and marketing at that particular segment Segments can be divided by Age, Gender, ,Race and religion, Lifestyle Geography,Socio-economic groups

14. TheMarket Niche markets These are very small, specialised markets for particular goods Target Market This is the section of the market that the firms want to aim their product at SWOT Analysis This is used by a firm to analyse its present market position and plan future strategies. Firms look at their strengths, weaknesses, opportunities and threats. Strengths and Weaknesses are internal factors over which they have some control e.g. customer care Opportunities and Threats are external factors over which the firm has no control e.g. government policies

16. Questionnaires

17. Panel Groups

18. Observation

20. Open

21. Multiple choice

22. Prefernce

24. Quota

26. MarketResearch Sampling It is impossible for a firm to interview everyone so a firm must decide on who to ask Random sample – people are chosen at random to participate Quota sample – involves segmenting the market and then picking a certain number of people from each segment Targeted sample – a particular group is targeted Types of questions Open – where no preset choices are given. Used for opinions Closed – where choices are given normally yes or n. Easy to analyse Multiple-choice – a number of choices are given Preference – where preferences are shown, by numbering the options Scale – where you place your answer on a scale

27. MarketResearch Field research This is where research is conducted by the firm itself and takes several forms Face to face - questionnaires are conducted on the street Postal surveys – detailed questionnaires which can be targeted at particular types of consumers but has low response rate Telephone surveys – cheap and convenient to contact large numbers, but responses are normally limited One-to-one interviews are used for in-depth responses but takes time Panel or group interviews – are used to generate discussion about new products or advertisements Observation – involves watching shoppers as they walk around a supermarket Testing – test peoples reactions to products

28. Marketing Mix Place Product Marketing Mix Price Promotion

30. Contribution

31. Penetration

32. Skimming

33. Discounting

34. Parallel pricing

35. Loss leaders

36. Pscholoigical

37. Price disciminationCover costs Level of revenue Price Level of profit

38. Price Price Setting the right price is important because it determines How much the firm will sell The level of revenue The amount of profit When firms set their prices they need to answer the following questions Will we cover our costs? What price do our competitors charge? Do we offer a special ‘extra’ service? How sensitive are customers to changes in price? Pricing strategies Cost-plus pricing – the price is set by calculating costs and adding a mark-up for profit

39. Price Contribution pricing – where the price covers the variable cost of producing one unit and makes a contribution towards the fixed costs. Often used where there is a lot of competition or for a limited time Penetration pricing – where a firm sets a low price in order to gain market share often used when at product launches Creaming/skimming – when firms set a high price at a products launch and then reduce it later on, by doing this they maximise revenue. Used by firms who have a product that is perceived as new or different. These firms are price makers e.g. games console manufacturers

40. Price Discounting – this may be used to encourage bulk buying or to get rid of excess stock by sales Parallel/competition pricing – where there is a lot of competition firms set their prices at the same level as rivals i.e. they are price takers (they set their price at the going rate) Loss leaders – products are sold at a loss to attract customers into a store Psychological pricing – used to make prices seem lower e.g. 0.99p Price discrimination – charging different prices to different market segments e.g. OAP and student discounts

41. Product Productdecisions Product mix ProductLifecycle Development Launch Growth Maturity Saturation Decline Productdifferentiation Size,colour,shape Taste, ingredients BrandingPackaging Extra features Product Branding Productextension

42. Product Product decisions Businesses have to decide what product, or range of products, they are going to produce and sell. They have to decide on the name, how it’s to be packaged and whether to ‘brand’ the product The Product mix is the combination of products that a firm sells e.g. Mars ice cream and chocolate bars Product differentiation A firm needs to make products appear from those of its rivals in order to gain sales. This can be achieved by changing the Size, colour, name, shape Taste, ingredients Branding, packaging, design Extra features, services offered

43. Product Product extension When sales of a product slow down firms may look to extend the use of the product or service to bring in more revenue e.g. hotels expanding into conference hosting Branding A brand is a product that, in the eyes of customers is seen to be different from other similar products. Customers are able to recognise it from its name, logo, features, packaging or taste. Firms want customers to easily identify the product and so much of its advertising will be aimed at creating an image for the product, based on its name or particular characteristics.

44. ProductLifecycle Product Life Cycle Products have lifecycles in the same way as humans do. Launch is similar to birth and they die in a similar way. Their life spans vary Development –Product is designed and launched. It involves start-up costs such as equipment and market research Introduction – Product is released Advertising costs are large and sales are small to start with. Firms choose on which pricing strategy to adopt. Growth - Sales normally increase sharply, advertising expenditure is normally reduced as the product becomes popular. Prices are often altered either to encourage sales or boost profits

45. Maturity – Sales peak and profits are greatest. Firms will often try to use extension strategies at this point such as special features or encouraging brand loyalty Saturation–The market has become very competitive and there are lots of similar versions of the product. The product may be out of date and there is no room for further sales growth Decline – Sales fall rapidly as product becomes unpopular. Firms attempt to re-launch the product or introduce new products ProductLifecycle

46. Place Channel of distribution/distribution chain Choosing the right channel Retailers E-Business Place Wholesalers Direct selling

47. Bully’s Biz Place Channel of distribution- this is the path products take from the producer to the consumer sometimes known as a distribution chainor channel Direct to retailers Large supermarkets are able to buy in bulk from the manufacturers and will arrange distribution to stores Direct to customers Where products are sold straight to customers by factory shops, via phone, post or inter-net. This industry has grown with new technology e.g. e-commerce Through wholesalers Wholesalers buy in bulk from manufacturers and then break down the bulk to sell on to local stores e.g. cash and carry warehouses Through agents Agents act as intermediaries between producers and customers. They are often used when selling abroad Choosing the right channel depends on several factors The nature of the product - e.g. if perishable it needs to be delivered quickly The nature of the market – if the market is large many wholesalers and retailers may be needed Size - small companies often distribute their own products whereas large companies often choose the channel according to the market they work in

49. Budget

50. Target customers

51. Product lifecyclePromotion Personal selling Packaging Sales techniques Special offers

52. Bully’s Biz Promotion When businesses decide how to promote their products they have to weigh up the relative sot of each form of promotion against how best to target potential customers. Firms use promotion to make sure customers are aware that The product is for sale They know what the product is They know how the product will satisfy their needs They are persuaded to buy the product Types of Promotion Advertising is the most well known form of promotion and includes the following media types- T.V., radio, posters, packaging, and newspapers. Firms use advertising to Introduce new products Increase sales Compete with others Improve the company image

53. Bully’s Biz Promotion When choosing the right media firms have to consider The nature of the product The advertising budget The target customers and market size The position of the product in it’s lifecycle Firms often use advertising agencies to produce their promotions as they have greater knowledge and techniques in areas such as market research Firms use informative adverts to tell the customers details about the product and persuasive adverts to encourage purchases often using glamour, pets and personalities

54. Bully’s Biz Promotion Direct mail This is where advertising leaflets are sent out via post or within free newspapers Public relations This is where companies deal with communications from the public and gets news of products into the media Personal selling This is where products are sold ‘door to door’ or over the phone Packaging Firms use the colour and design of their packaging to reflect the image of the product and the company Sales techniques Free samples – used to get the public to try new or altered products Money off coupons – to encourage customers to make repeat purchases Free gifts – giving something extra to encourage customers

55. Bully’s Biz Promotion Competitions – to encourage purchases by collecting to win Special offers – to encourage sales during quiet times, get rid off excess stock, and beat off competition Consumer behaviour Everyday people make economic decisions i.e. when a person decides to do one thing they are deciding not to do something else. Economic decisions – Decisions that affect resources Basic economic problem – There are limited resources and unlimited wants Scarcity and choice – Because of the basic economic problem there are not enough resources so people have to choose between them The allocation of resources by the market is determined by the interaction of demand and supply

56. Bully’s Biz Promotion Demand – This is where consumers wants are made effective i.e. backed up by some form of currency Supply – What producers are willing to supply at a certain price In general as the price of a product falls more of the product is demanded by consumers and as the price increases less of the product is demanded As the price of a product rises suppliers are more willing to supply more of the product Factors affecting demand Price – see above Income – as income rises demand for products tends increases Taste – as consumer’s tastes change so will the demand for particular goods Prices of other goods – if the price of competitors products change so this will affect demand. These products are known as substitutes

57. Bully’s Biz Promotion Complimentary goods are bought to go with other goods. The price of compliment goods can affect demand. For example if PS2’ s are made cheaper the demand for PS2 games will increase Population – an increase in population can increase demand or a change in the structure of population i.e. more young people can increase demand for certain types of goods Seasons – some products demand will be affect by the season e.g. more ice cream is sold in summer Factors affecting supply Costs – If costs such as wages rise, production may become too expensive and firms stop producing the goods Availability – Certain products may be affected by availability for example oil is a finite i.e. there is only so much available Technology – technological improvements may increase productivity reducing costs and allowing suppliers to sell at a lower price than before

58. Bully’s Biz Niche V Mass Strategies Size of target market Competition Niche v Mass Economies of scale Specialization