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Transcript of Bs unit 3 section 5 of 6
EDEXCEL
AS Business StudiesREVIS ION
by Apsara Sumanasiri
Scholar Virtual AcademyAddress : No 03, Daisy Villa Avenue,
Bambalapitiya, Colombo 04Tel : (94 11) 2553466 / 2593571Email : [email protected] : www.international-scholar.com
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
AS Business Studies
Unit 2
Section 1
Marketing Plan
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Marketing objectives
& Strategy
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
What is marketing?
Marketing is the management process
that is responsible for identifying,
anticipating and satisfying customer
requirements profitably
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
What is marketing?
Customer is KING!
If firms want to survive, they must satisfy
consumer wants.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
The role of marketing
The main purpose of marketing is to
increase customer demand, i.e. to shift
the demand curve outwards.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
The role of marketing
The marketing department does not
work in isolation.
The objectives of the marketing
department must fit in with the
objectives of the business.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Marketing objectives
Possible marketing objectives could be:
• To increase sales
• To create brand loyalty
• To develop the product range
• To survive in the market
• To change the market position
• To increase Market Share
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
What determines marketing
objectivesExternal factors:
• Customer behaviour
• Competitor
behaviour
• The economy
• Technology
• Government
• Changes in the law
• Suppliers
Internal factors:
• Market Research Findings
• Forecasted Sales
• Forecasted Profits
• Availability of
Finance
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Forming a marketing strategy
A marketing strategy is designed to
achieve the marketing objectives.
The marketing strategy should consider:
• The target market
• The marketing mix
• The strategy of the business
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Mass Vs. Niche Marketing
A niche market:
• Targets a very small
segment of a
market
• Sales will be lower,
but prices will be
higher
A mass market:
• Appeals to the
whole market
• Requires high sales
volume and low
prices
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
The marketing mix
The marketing mix
in said to consist of
the 4 key elements
needed for
successful
marketing, often
referred to as the
4 Ps.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Marketing Mix
* Product *
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
The marketing Mix - Product
Developing new products is time
consuming and businesses will want to
protect their new products and ideas
(intellectual property). This can be done
through:
• Patents
• Copyrights
• Trademarks
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Product Life Cycle
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Product Life Cycle
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Product Life Cycle
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Managing a product portfolio
A product portfolio refers to a range of products produced by a
company or brand.
A portfolio can be managed using a product life cycle approach
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
How useful is the product life
cycle?The product lifecycle is important to find the approach on the other factors of the marketing mix, however:
• It’s impossible to tell how long a product is going to last and therefore identify where on the PLC the product is.
• It’s of little use to tertiary sector businesses
• Less effective for firms with a large product portfolio (eg. NOKIA)
• It only considers sales and profits
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group
Matrix
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group
Matrix
A portfolio of products or simply put, agroup of products can be analysed usingthe Boston Matrix. This matrix categorisesthe range of products that the business hasinto one of four different types, Stars,Problem child or question mark, Cash cowand question mark.
This classification is done based on twocriteria ie. Market share and marketgrowth.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group
Matrix
• Market share – refers to the proportion
of the total industry sales that a
particular product hold and thus looks
at whther the product being sold has a
low or high market share?
• Market growth – looks at whether the
numbers of potential customers in the
market growing or not?
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group
Matrix
Stars are high growth products
competing in markets where they are
strong compared with the competition.
Often Stars need heavy investment in
order to sustain the market share during
growth. Eventually growth will slow and,
assuming they keep their market share,
Stars will become Cash Cows
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group
Matrix
Question marks are products with lowmarket share operating in high growthmarkets. These are typically new productsin the market. Therefore, would have lowmkt share togetherwith a high potential forgrowth.. This suggests that they may needsubstantial investment to grow marketshare at the expense of larger competitors.Management have to think hard about“Question Marks” - which ones should theyinvest in to help grow? Which ones shouldthey allow to fail or shrink?
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group
Matrix
Cash cows are low-growth products with a high market share. These are mature, successful products, thus have a high mktsh together with less growth potential due to the products maturity in the mkt and thus low potential to grow any futher.. these products need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs. Thus, re-investment is very important.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group
Matrix
Unsurprisingly, the term “dogs” refers to
products that have a low market share
in unattractive, low-growth markets.
Dogs may generate enough cash to
break-even, but they are rarely, if ever,
worth investing in. Dogs are usually sold
or closed.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Marketing Mix
* Price *
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Influences on price
• Demand and supply
• Market conditions
• Production costs
• Market structure
• Taxes and subsidies
• Business Objectives
• Marketing mix
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Pricing strategies
Short-term pricing strategies
These are often used for promotional reasons
• Penetration pricing
• Market skimming
• Discounts/Sales
• Loss leader
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Pricing strategies
Long-term pricing strategies
• Demand-based
• Cost-based
• Competitor-based
• Psychological
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Price Elasticity of Demand
PED shows the responsiveness of
quantity demanded to a change in
price. It can be calculated as:
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Price Elasticity of Demand
PED is always negative, due to the inverse relationship between price and quantity demanded. Once the negative sign is
ignored there are three possible outcomes:
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
PED and total revenue
Price increase Price decrease
Demand elastic Revenue falls Revenue rises
Unit elasticRevenue remains
constant
Revenue remains
constant
Demand inelastic Revenue rises Revenue falls
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Marketing Mix
* Place *
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Good Luck
Hope you’re doing some effective revision…
Happy Revising!
Apsara
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Scholar Virtual AcademyAddress : No 03, Daisy Villa Avenue, Bambalapitiya, Colombo 04Tel : (94 11) 2553466 / 2593571Email : [email protected] : www.international-scholar.com
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
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