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This document defines key marketing terminology such as marketing, target market, customer, consumer, and market segmentation. It also outlines different marketing strategies such as the marketing mix, product life cycle, pricing strategies, channels of distribution, and promotional methods. Finally, it discusses legal controls on marketing and factors to consider when choosing distribution methods.

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sibel nuriyeva
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70 views6 pages

Notes

This document defines key marketing terminology such as marketing, target market, customer, consumer, and market segmentation. It also outlines different marketing strategies such as the marketing mix, product life cycle, pricing strategies, channels of distribution, and promotional methods. Finally, it discusses legal controls on marketing and factors to consider when choosing distribution methods.

Uploaded by

sibel nuriyeva
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Vocabulary:

Marketing: the management process responsible for identifying, anticipating and satisfying
consumers' requirements profitably.
Customer base: the group of customers a business sells its products to
Market: all customers and consumers who are interred in buying a product and have the
financial resources to do so
Market - a market is a place where buyers and sellers come together to buy and sell goods and
services
Target market - individuals or organisations identified by a business as the costumer or
consumer of its products
Customer - an individual or business that buys goods and services from a business
Consumer - the final user of a product
Consumer markets - markets for goods and services bought by the final consumer
Industrial markets - markets for goods and services bought by other business to use their
production process
Business environment - the combination of internal and external factors that influence the
operations of a business
Free trade- no barriers exist that might prevent trade between different countries
Niche marketing- developing products for a small segment of the market
Mass marketing - selling the same product to the whole market
Market segment - a part of the whole market in which consumers have specific characteristics
market segmentation - dividing the whole market into segments by consumer characteristic and
then targeting different products to each segment
geographic segmentation - dividing consumers in the market by geographical area
Demographic segmentation - dividing consumers in the market by factors such as age, gender,
income, ethnic backgoriund and social class
Psychographic segmentation - dividing consumers in the market by lifestyle, personalities and
attitudes
Market research - the process of collecting, recording and analysing data about the sotumers,
competitors and market for a product
Market oriented - products are developed based on consumer demand is identified by market
research
Product oriented - the firm decides what to produce and then tries to find buyers for the product
Primary research - the collection of first hand data for the specific needs of the firm
secondary research - the collection of data from second-hand sources
Quantitative research - the collection of numerical data that can be analysed using statistical
techniques
Qualitative research - the collection of info about consumers’ buying behaviour and their
opinions about products
Sample - a representative sample of the target market selected to take part in market research
Marketing mix - four marketing decisions needed for the effective marketing of a product
Four Ps- the right product at the right price with the right promotion in the right place
Brand image - the general impression of a product held by consumers
Product life cycle - the pattern of sales of a product from introduction to its withdrawal for the
market
Extension strategies - marketing activities to extend the maturity stage of a product
Market skimming - setting a high price for a new product that is unique or very different from any
other product on the market
Penetration pricing - setting a low prie to attract customers to buy a new product
Competitive pricing - setting a price similar to that of competitors’ products which are already
established in the market
Price leadership - smaller firms set their price based on the price set by the dominant in the
industry
Loss- leader pricing - setting a price of a small number of products at below cost to attract
customers into the outlet in the hoep that theu will buy other products priced to earn profit
Cost-plus pricing - setting price by adding a fixed amount to the cost of making or buying the
product
Price elasticity of demand - measures by how much demand for a product changes when there
is a change in its price
Price inelastic demand - the percentage change in demand is less than the percentage change
in price
Price elastic demand - the percentage change in demand is greater than the percentage change
in price
Channels of distribution - how a product gets from the producer to the final consumer
Wholesaler - a busines that buys products in bulk from producers and then sells them to
retailers
Retailer - shops and other outlets that sell goods and services to the final consumer
Middlemen - these are the intermediaries in the channels of distribution
Direct selling - the products is sold by the producer directly to the final consumer
Promotion - marketing activities used to communicare with customers and potential customers
to inform and persuade them to buy a business product
Advertising - paid for communication with consumers which uses printed and visual media.
Informative advertising - information about the product communicated to create product
awareness and attract their interest
Persuasive advertising - communication with consumers aimed at getting them to buy a firm's
product
Below the line promotion - promotion that is not paid for communication bus uses incentives to
encourage consumers to buy
Sales promotion - incentives used to encourage short temr increases in sales or repeat
purchases
Personal selling - sales staff communicate directly with the consumer to achieve a sale and form
and long term relationship between firm and consumer
Direct mail - printed materials which are sent directly to addresses of customers ]
Sponsorship - payment by a business to have its name or products associarws with a particular
event
E-commerce- use of internet and other technologies by businesses to market and sell goods
and services to customers
Marketing strategy - a plan to achieve the marketing objective using a given level of resources
Legal controls - laws that control the activity of businesses
Barriers to trade - usually taxes, quotes or bans that one country places on the goods of other
countries to prevent or increase the cost of them entering that country
Domestic market - the market for goods and services in the business own country
First channel of distribution - producer sells to final consumer
Second channel - producer sells to retailer, etailers to final consumers
Third channel - two middlemen are used retailer and wholesaler. Producer sell big amount to
wholesaler, wholesaler sells small amount to retailer, retailer to final consumer
Final channel - uses agent when business enters foreign market.

Things to consider when choosing methods of distribution


- Cost
- Nature of product
- The market
Aims of promotion
- Attract attention of consumers
- Persuading
- Explaining
- Encouraging

Methods of promotion:
- Advertising:
- Sales promotion; coupons, point of sale display, Loyalty reward schemes, Competition
and games
- Personal selling: for expensive products and for direct contact with customer like car
selling
- Direct mail: leaflets, printed material delivered to mailboxes
- Sponsorships

Legal controls:
- Protect consumers from faulty and dangerous goods
- Prevent business from using advertising to mislead consumers
- Protect consumers from being exploited in industries where there is little or no
competition
-

Common questions

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The product life cycle concept influences marketing strategies by defining different approaches for the introduction, growth, maturity, and decline stages of a product. During introduction, strategies may focus on awareness and trial; growth may involve emphasizing differentiation; maturity might require defending market share; and decline could lead to discontinuation or repositioning. Extension strategies, such as product updates, rebranding, or targeting new markets, aim to prolong the maturity stage and maintain sales .

Market research helps a market-oriented business strategy by collecting, recording, and analyzing data about customers, competitors, and products to understand consumer demands. This approach enables businesses to develop products based on identified consumer needs, leading to more effective marketing efforts and increased customer satisfaction. In contrast, a product-oriented approach focuses on producing goods first and then finding buyers, which might not align with market demand. This could lead to excess inventory or failed products due to lack of consumer interest .

Legal controls protect consumer rights by ensuring that products are safe, advertising is not misleading, and consumers are not exploited in low-competition industries. These regulations uphold fair trade practices and consumer trust. However, businesses might face challenges in maintaining compliance due to differing regulations across regions, the complexity of legal frameworks, and the potential cost implications of adhering to stringent standards .

Psychographic segmentation divides consumers by lifestyle, personality, and attitudes, allowing marketers to craft advertising messages that resonate with specific consumer values and identities. This tailored messaging can create stronger emotional connections, thereby enhancing brand perception and loyalty, as consumers feel understood and valued. It enables more meaningful communication that goes beyond demographics alone, leading to a more personalized marketing approach .

E-commerce can disrupt traditional channels of distribution by allowing producers to sell directly to consumers, reducing the need for intermediaries like wholesalers and retailers. This shift can lead to cost savings and increased efficiency for businesses while offering consumers more choice and convenience. To adapt, businesses might integrate e-commerce with existing channels, enhance digital marketing efforts, and optimize supply chain logistics to remain competitive and meet evolving consumer expectations .

Niche marketing targets a small, specific segment with unique products tailored to specific needs, while mass marketing aims at the entire market with a uniform product. Niche marketing can build stronger customer relationships through personalized offerings and deeper engagement, creating loyalty and word-of-mouth promotion. Mass marketing, on the other hand, may yield high volume sales but can risk weaker customer connections due to less personalized interaction .

Geographic segmentation divides consumers by location, which can impact product distribution and regional marketing efforts, while demographic segmentation categorizes by age, gender, income, and other quantifiable traits. Together, these methods provide a nuanced understanding of market characteristics, enabling businesses to tailor marketing strategies and product offerings to meet specific regional and population needs effectively. This synergy allows for targeted campaigns that efficiently address diverse market segments, improving overall market penetration and consumer engagement .

Price elasticity of demand indicates how demand for a product responds to price changes. In competitive markets, understanding elasticity helps businesses set prices that maximize revenue without losing customers. High elasticity suggests that consumers are price-sensitive and might switch to competitors if prices rise, necessitating competitive pricing or differentiation strategies. Inelastic demand allows for higher pricing as consumers are less likely to reduce purchases, offering higher profit margins .

Sponsorship involves a business paying to associate its name or products with a particular event, which can enhance brand visibility and credibility by reaching target audiences in related contexts. It may strengthen brand equity by aligning the brand with positive attributes of the sponsored entity, potentially improving public perception and increasing consumer trust. However, its success depends on the congruence between the sponsor and the sponsored activity, and mishandled associations can negatively affect brand image .

Penetration pricing involves setting a low price for a new product to attract customers and gain market share quickly. Its advantage lies in its ability to rapidly build a customer base and discourage competitors from entering the market due to slim profit margins. However, the limitation is that it may not build brand loyalty, as customers might switch to competitors if prices increase. Additionally, low pricing can be perceived as an indicator of lower quality, which could damage the brand image .

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