Chapter 50- Marketing within a business environment

Question 1

Explain marketing objectives?

Answer 1

Marketing objectives are the specific goals a business sets to achieve through it’s marketing activities
They are essential as they guide a firm’s marketing strategy to help measure success

Question 2

Examples of marketing objectives

Answer 2

• Increase sales and market share
• Target a new market segment
• Increase brand awareness and loyalty

Question 3

In a business what is important to take into account?

Answer 3

• The situation within the market
• The needs of the consumer
• The action of competitors

Question 4

What does setting objectives involve?

Answer 4

• Asking and answering a series of questions about the present and the future of the business

Question 5

What are one of the main uses of setting objectives?

Answer 5

• To help employees identify the marketing strategy for the business
• This will help to explain necessary actions, set a budget and identify goals that are to be met

Question 6

What 3 key aspects will the marketing plan look at?

Answer 6

1. Where are we now?
2. Where do we want to be?
3. How will we get there?

Question 7

Where are we now?

Answer 7

• Also called a marketing audit
• Business will have to look at internal and external factors that affect it
• Involves carrying out a SWOT analysis
• Strengths and weaknesses (internal factors)
• Opportunities and threats (external factors)
• There are economic, social, political and technological factors as well as the actions of competitors
• Businesses current product portfolio must be looked at
• Their product range must match consumer needs

Question 8

Where do we want to be?

Answer 8

• Requires setting objectives for the future
• Might be setting a strategic objective for the whole business e.g. (growth) or setting marketing objectives e.g. (increasing market share)

Question 9

How will we get there?

Answer 9

• To answer this a strategy for the future of the business needs to be developed
  E.g. to become market leader, this means using the marketing mix to set a strategy to achieve this

Question 10

Advantages of setting objectives

Answer 10

• Helps the business see what it wants to achieve
• Helps motivate employees
• Use their money where it will be most effective
• Business can measure performance against expectations

Question 11

Disadvantages of setting objectives

Answer 11

• Can look at all aspects of marketing but the consumer
• Usually doesn’t consider all the departments of the business
• Usually include too many goals which are hard to achieve
• Market and economy are constantly changing so businesses need to adapt to these changes

Question 12

Assessing success

Answer 12

• Once the marketing plan is in place the business must measure its success
• The business must see if they have met the goals set
• Checking it goals have been met should be continuous not just at the end of the campaign
• Measuring progress allows the business to make changes to the marketing mix or time if goal is not going to be achieved

Question 13

Assessing success (sales)

Answer 13

• Easiest way to assess success of marketing plan
• Most commonly used
• Must look at the wider context of the market, is it rising or falling
  -Is company name being recognised/ increased sales

Question 14

Definition of market share

Answer 14

• Proportion or percentage of total sales within the market in question that is controlled by the business

Question 15

Assessing success (number of enquiries/ hits)

Answer 15

• internet and mail order companies will look at how many visits to site are there after a campaign

Question 16

Assessing success (satisfaction surveys)

Answer 16

• Sample a selection of customers to see how satisfied they are

Question 17

To create a successful marketing strategy, what must the business know?

Answer 17

• It’s market
• Competition
• Consumers

Question 18

What must the business do to create a successful marketing strategy?

Answer 18

• Must carry out a SWOT analysis
• Look at the budget that is available and the productive capacity
• Must involve other departments
• Strategy must be appropriate for the size of the business

Question 19

What must be considered when forming a marketing strategy?

Answer 19

• Business objectives: e.g. increase market share- it will need to look clearly at the needs of the consumer and actions of competitors
• Size of the business: Small businesses have less money to compete with big rivals with more money in their marketing budgets
  Nature of the market: Do the products change frequently, competitors threats, rapid changes in technology
  Management changes: New managers are likely to take more risks

Question 20

What was the main reason for the huge increase in the level of competition faced by businesses ?

Answer 20

• Globalisation of world trade

Question 21

Competitive strategies

Answer 21

• Globalisation of trade has increased competition
• Important when developing a marketing strategy to take into account competitors
• Must know who the competitors are
• Doesn’t have to be in the same segment to you e.g. football clubs may have competition from rugby clubs
• Once competition has been identified, must look at all aspects of the way such a business is operating
  E.g.
• Who are it’s customers
• Strengths and weaknesses
• Objectives for future
• How well is it placed to succeed compared with us
• How does it market itself

Question 22

Definition of globalisation

Answer 22

• The integration of the countries of the world through trade, ideas and culture

Question 23

Market leader strategies

Answer 23

• Each market will have one dominant business that has control over the largest share of the market (Leader)
• They use a range of strategies to retain that position and improve it in the long run
• May use aggressive marketing when trying to improve their market share
  E.g. Tesco: ensured that it has at least one retail outlet in every postcode area of the UK to give it as wide a market coverage as possible

Question 24

Market-challenger strategies

Answer 24

• A business with a smaller market share may try attack the market leader
• To do this they must have a very large budget
  -May use promotion to try and take market share
• May attack an area where the leader is weak

Question 25

Market follower strategies

Answer 25

- Market leaders will normally respond to ‘market challenger’ strategies with some form of retaliatory action - If one drops the price the market leader will aggressively do this to win the price wars e.g. petrol (no win situation) - Profit for all competitors is reduced - Usually followers follow what the market leader does

Question 26

Niche market strategies

Answer 26

- This means specialising in a specific area of a large market - Market is small and customers have specific needs E.g. Aston martin

Question 27

Differentiation

Answer 27

- Companies will try to differentiate their product from that of their competitors to try to attract a business E.g. EE offers access to event tickets

Question 28

Low cost strategies

Answer 28

- Big businesses try to maintain their dominance in the market through their ability to buy in bulk from suppliers as low cost per unit - This reduces their production costs - Savings are passed onto the consumer in terms of lower prices - Small businesses can’t match this E.g. aldi/lidl use this strategy

Question 29

Market growth policies

Answer 29

If the firm wants to use its objectives and a marketing strategy to achieve growth in it’s markets there are 4 options open to it 1. Market penetration 2. Product development 3. Market development 4. Diversification - Involves using Ansoff’s matrix - Market must be monitored constantly as they are constantly changing - This means strategies must be changed to match the changing environment

Question 30

What resources are needed to market a product/service?

Answer 30

- Marketing budget - Marketing department - Knowledge of the market (obtained through market research) - Set of objectives to be achieved through marketing

Question 31

What is one of the most important requirements when setting out a marketing strategy?

Answer 31

- The business should be realistic (Particularly with the amount of money it spends) Small firms- only be able to market through the use of local advertising Large businesses- They can afford to run large marketing departments Small firms have less pricing flexibility than larger businesses

Question 32

What is SWOT analysis?

Answer 32

- It involves looking at strengths, weaknesses, opportunities and threats for a business

Question 33

SWOT analysis

Answer 33

- This is an audit that’s carried out looking at the business both internally and externally - It can help the business to look objectively at it’s competitive situation and to decide on the best strategy for the future

Question 34

Uses of SWOT analysis

Answer 34

- Can be used as a forward looking tool - The managers can consider how effective the business is in respect of the environment in which it operates and adjust their strategies and tactics as appropriate - It will be a useful beginning to discussion and planning and will help the business to identify the best way to proceed for future successs - It will need to be used in conjunction with other methods of forecasting and formulating strategies