CHAPTER-10

MARKETING, COMPETITION AND THE CUSTOMER

THE MARKETING DEPARTMENT

 Marketing is identifying customer wants and satisfying them profitably.

 A customer is a person, business or other organisation which buys goods or services
from a business.

In a large public limited company, the Marketing Director will have people responsible for
market research of new products, promotion (including promotions and advertising),
distribution, pricing and sales.

The structure of a typical Marketing department:

 The Sales team is responsible for the sales of the product. It will usually have separate
sections for each region to which the product is distributed.
 The Market Research section is responsible for finding out customers’ needs, market
changes and the impact of competitors’ actions.
 The Promotion section deals with organising the advertising for products. It arranges
for advertisements to be produced.
 Distribution transports the products to the market.

THE ROLE OF MARKETING

Marketing is not just about advertising and selling a good or service, as can be seen by the
different marketing activities found in a Marketing department. The central role of marketing
undertakes the following:

 Identify customer needs

 Satisfy customer needs
 Maintain customer loyalty
 Build customer relationships to gain information about customers
 Anticipate changes in customer needs

If the Marketing department is successful in identifying customer requirements and

predicting future customer needs, it should enable the business to:

 raise customer awareness of a product or service of the business

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  increase revenue and profitability
 increase or maintain market share » maintain or improve the image of products or a
business
 target a new market or market segment
 enter new markets at home or abroad
 develop new products or improve existing products.

UNDERSTANDING MARKET CHANGES

The world of markets and marketing is constantly changing. It is very unusual if a business
does not have to change its goods and services over time to respond to important market
changes.

WHY CUSTOMER/CONSUMER SPENDING PATTERNS CHANGE

 Consumer tastes and fashions change – fashions may change for clothes and so
consumers may want different styles of clothes to those they wore last year.
 Changes in technology – with new products being developed, such as iPads, tablets
and smartwatches, sales of desk computer/standalone computers have fallen in many
countries. New products mean old versions/alternatives do not have high sales
anymore.
 Change in incomes – if an economy has high unemployment then many consumers
will buy cheaper products. If the economy then grows and unemployment falls, the
sales of more expensive products will increase.
 Ageing populations – the age structure of the population in many countries is
changing to a greater percentage of older people. This has changed the type of
products which are increasing in demand, such as anti-ageing face creams for women.

THE POWER AND IMPORTANCE OF CHANGING CUSTOMER NEEDS

If they don't produce and sell what customers want, they will buy competitors' products and
the firm will fail to survive.

WHY HAVE SOME MARKETS BECOME MORE COMPETITIVE?

 Globalisation
 Transportation improvements
 Internet/e-commerce

HOW CAN BUSINESSES RESPOND TO CHANGING SPENDING PATTERNS AND

INCREASED COMPETITION?
A business will have to take action to maintain its level of sales and market share whenever
there are changes to spending patterns or increasing competition. In order to remain
successful, a business may need to do the following:

 Maintain good customer relationships

 Keep improving its existing product

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  Bring out new products to keep customers’ interest
 Keep costs low to maintain competitiveness

WHAT IS MEANT BY A MARKET?

A market is defined as the sum total of all the buyers and sellers in the area or region under
consideration. The area may be the earth, or countries, regions, states, or cities. The value,
cost and price of items traded are as per forces of supply and demand in a market.

MASS MARKETING
Mass market is where there is a very large number of sales of a product. Products are
designed to appeal to the whole market and therefore advertising and promotions are intended
to appeal to most customers. This strategy often focuses on high sales and low prices,
providing products and services that appeal to a broad market. However, standardised
products or services are produced and so may not meet the specific needs of all customers or
potential customers, therefore leading to lost sales.

NICHE MARKETING
Some products are sold only to a very small number of customers who form a small segment
of a much larger market. This is referred to as a niche market. These products are quite often
specialised and sold by small businesses that would find it difficult to compete in a mass
market. A niche is a target segment of the market perfect for retailers that serve a specialist or
a specific audience. Niche businesses are highly profitable as they cater to a specific
audience. However, they gain minimal exposure, as well.

MARKET SEGMENTS
Market segmentation is a marketing strategy in which select groups of consumers are
identified so that certain products or product lines can be presented to them in a way that
appeals to their interests. Market segmentation is when a market is broken down into sub-
groups which share similar characteristics. Segmenting a market can help a business to:

 make marketing expenditure cost effective by producing a product which closely

meets the needs of these customers and targeting its marketing efforts only on this
segment
 enjoy higher sales and profits for the business, because of cost-effective marketing
 identify a market segment which is not having its needs fully met, and therefore offers
opportunities to increase sales.

POTENTIAL BENEFITS OF SEGMENTATION TO BUSINESS

Market segmentation enables a business to target different groups of customers by adapting
their services and marketing collateral to suit each targeted segment best, resulting in much-
wanted brand advocacy and long-term growth. The potential to reach new customers through
social media has never been greater. A marketing manager would take all these factors into
account when deciding which segments might buy new products or improved products.
Therefore, once the segments have been identified, this will influence how the products are

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packaged and advertised. It will also affect the choice of shops the products are sold in, in
order to get maximum sales.

WHICH METHOD OF SEGMENTATION SHOULD BE USED?

There are many ways to segment markets to find the right target audience. Five ways to
segment markets include

 Demographic
 Psychographic
 Behavioral
 Geographic and
 Firmographic segmentation.

COURSE INSTRUCTOR: ABU NAYEEM MOHAMMED SUYEEB

CONTACT: 01752408560
EMAIL: suyeebnayeem@[Link] Page 4