Marketing

Unit 5
Marketing
• Marketing is the process of identifying and anticipating consumer needs and
producing products or service that satisfy these needs, while making a profit.

Marketing involves:
• market research
• Design
• Manufacturing
• Advertising
• Sales
• Distribution
• After sales service
Market orientation/concept
• Market orientation/concept ensures businesses are
more customer focused than they used to be.

• If businesses meet customers’ needs they’re more

likely to be successful.

• If businesses produce something no one wants/needs,

they won’t be successful.
 Marketing strategy and marketing plan
Businesses must develop these to raise consumer awareness of their
goods and services and persuade consumers to buy them

Marketing Strategy Marketing Plan

• The strategy examines • The marketing plan is

the overall business e.g. launch a used to implement e.g.
objectives and new product the firm’s marketing develop a
develops marketing strategy. marketing
activities to help the plan for
business to achieve the new
these goals. product
 Conduct a SWOT →Identify its internal strengths
Analysis and weaknesses and examine
Marketing plan its external threats and
opportunities.
An effective
Market →Decide on a market at which it
marketing
Segmentation will target its product.
plan should
involve.. Research the →Find out the needs and wants
Target Market of consumers in this market.
Develop a →This will ensure that it uses
Marketing Mix the most appropriate product,
price, place and promotion to
persuade consumers to buy
the product.
Role of a marketing plan in a business
• The marketing plan helps the business to focus on
Business Goals achieving its goals. This can result in achieving
these goals more effectively and efficiently.

• The marketing plan shows potential investors that

Finance the business has conducted an in-depth analysis of
the market.

• The business can use the marketing plan to

Benchmarking benchmark (compare) planned performance
against actual results.
Market segmentation (divisions)
This helps the business to target it’s products/services
effectively at different consumers

Geographic Demographic Psychographic

• The market is • The market is • The market is
divided into divided based on divided based on
different certain common beliefs, attitudes,
geographic characteristics. social status and
zones/areas. E.g. age/income lifestyle.
Market segmentation
Benefits of market segmentation
• Increases sales – producing a product
that meets the needs/wants of the
target market
• Enables business growth – allows the
business to focus on a small market and
grow
• Reduces costs – not wasting time and
money advertising to the wrong market
Target market and niche market
Target market: a specific group of customers with common needs and
wants that the business aims their products/services at.
e.g. Brown Thomas – high income earners, Electric Picnic – (young)
music lovers, Jeep – agricultural/rough terrain drivers

Niche market: a small group of consumers in a larger group with

different needs/wants than the majority of others.
e.g. gluten free food – celiacs, private jet rental - celebrities
Who are the target markets of these products?
Niche market: advantages
Less Competition
There is less competition as other businesses focus on the larger general
target market.
Consumer Loyalty
Consumers are loyal to the goods and services that satisfy their specific
needs in a niche market. This can help to increase business sales and profits.
New Products
A business selling in a niche market may be able to launch new products into
the market more easily. Consumers trust the brand and are willing to try
new products from the firm.
Niche market: disadvantages
Economies of Scale
The business might not benefit from economies of scale as it produces
goods in smaller quantities
Competition
Larger competitors enter the market and the smaller business may be
unable to compete on price. It may lose market share to the larger
firm.
Growth
As niche markets tend to be small, the business may find it difficult to
grow. Profit margins are also lower in smaller markets
Product positioning
Def: creating a positive image of the brand in the consumers
mind e.g. saves them money, makes them more fashionable
etc.

FASTER CHEAPER ENERGY EFFICIENT

https://www.youtube.com/watch?v=tKOITmV0NfU
The marketing mix
A toolkit used by businesses
to persuade consumers to
buy it’s product/service.

Often known as the ‘4 Ps’

https://youtu.be/zFENz_nnrq8
The marketing mix: product
Def: a good or service provided by a business to satisfy consumer
needs and wants

All products should have a USP (unique selling point) that makes them
different from competitors.

Some companies sell one product e.g. Michelin sell tyres

Some companies sell many products, known as a product portfolio e.g.
Unilever sells Magnums, Persil, Lyons and Hellman’s mayonnaise
The marketing mix: product
‘Product’ in the marketing mix covers the following areas:
A. Product B. Brand D. Product life
C. Packaging
design name cycle

A. Product design: When designing a product you should consider..

• The product’s function
• The materials needed to make it
• How are where it can be made
• The appearance of the product
• The cost of manufacturing and distributing it
The marketing mix: product
A. Product design:
Well designed products should:
• Increase sales by being visually attractive and easy to use
• Lower costs due to fewer faulty products, complaints, repairs, recalls
and less waste of raw materials

If a product is a brand new invention, the owner may patent it for 20

years. They then have exclusive rights of the product or process and it
cannot be used by others without permission.
The marketing mix: product
B. Brand name:
• A distinctive name given to a business and the goods and services it
develops.
• Many firms also develop a brand logo: images, words or shapes used
to identify a brand and its goods and services.
• Slogans help increase brand recognition also

Can you think of any more examples?

The marketing mix: product
B. Brand name:

To legally protect brand names, slogans and logos companies can use
trademarks ™.

They can register words, numbers, letters and numbers that distinguish
it’s identity from other competitors

https://www.youtube.com/watch?v=LJumEZHdS1g
 The marketing mix: product
B. Brand Advantages for Advantages for
name: Business Consumers

Recognition Consumer image

Benefits of the
New products
product

Reduces
Higher Price
disappointment

Consumer High-quality
loyalty products
The marketing mix: product
Own brand products: products that are sold by retailers under the
retailer’s name and logo. They are often referred to as ‘ private labels’.
 The marketing mix: product
B. Own brand Advantages for Disadvantages for
products Retailers Retailers
Product Increased
Specification Advertising

Business
Profits
Reputation

Consumer
Cost
Loyalty
Different
Economic
Target
Conditions
Markets
The marketing mix: product
Protection: during transport and from light etc. e.g.
eggs
C. Packaging:
Packing is the Image: colour, text, shape should be correct for the
first thing a image they want to portray
consumer sees
often. It should Convenience: should be convenient for use e.g.
resealable cheese, kids size bags of sweets
be attractive
and functional
in the following Info: should provide nutritional info, instructions for
use, storage instructions etc.
ways:
Recognition: attractive packaging increases
consumer recognition e.g. Toblerone, Terry’s
Chocolate Orange
The marketing mix: product
D. The Product Life Cycle:
This describes the stages that a product goes through from
introduction to decline charting 5 key stages:
• Introduction
• Growth
• Maturity You must be able
to draw this chart
• Saturation for a product and
• Decline explain it
The Product Life Cycle of Apple iPods
The Product Life Cycle of Apple iPods
The Product Life Cycle of Apple iPods
The Product Life Cycle of Apple iPods
The Product Life Cycle of Apple iPods
The Product Life Cycle of Apple iPods
The Product Life Cycle of Apple iPods
Product Extension
The Product Life Cycle of Apple iPods
Introduction

• Sales: Low
• Costs: Very high – a lot of spending on promotion
• Profit: Usually none
• Advertising: High volumes
• Marketing objective: Create product awareness in
early adopters/retailers
• Marketing strategy: Penetration/predatory pricing
The Product Life Cycle of Apple iPods
Growth

• Sales: Increasing
• Costs: High – spend on production. Per unit: begin
to fall due to Economies of Scale
• Profit: Usually none
• Advertising: High volumes
• Marketing objective: create product awareness in
mass market
• Marketing strategy: Improve quality/enter new
markets
 The Product Life Cycle of Apple iPods

Maturity

• Sales: have peaked

• Costs: Steady - Low cost per customer
• Profit: High
• Advertising: Need to increase again
• Marketing objective: stress brand differences and benefits
• Marketing strategy: Convert non-users, product
differentiation
 The Product Life Cycle of Apple iPods
Saturation

• Sales: Begin to slow

• Costs: Increasing – spending on advertising and
promotion
• Profit: Reducing
• Advertising: Need to increase again
• Marketing objective: Reminder/nostalgia
advertising
• Marketing strategy: Competitive
promotion/pricing & add-on/extension products
 Will we
The Product Life Cycle of Apple iPods continue to
sell this
product or
retire it?
Decline

• Sales: Decline
• Costs: High in comparison to sales
• Profit: Negative cash flow
• Advertising: Minimal/very select mediums
• Marketing objective: Only advertise to retain hard
core supporters
• Marketing strategy: Drop unprofitable add-ons/target
markets
 The Product Life Cycle of Apple iPods
Product Extension

Product Extension

• A way of maintaining or increasing sales

• To extend the life cycle some parts of the marketing
mix must be changed e.g.
• Product: new features, rebranding
• Place: new market location , physically or online
• Price: new pricing strategy to reach new target market
• Promotion: new advertising campaign/sales
promotions
Product Extension Examples
• Marathon rebranding to
Snickers

• Apple creating Airpod Pro

• Heineken creating Heineken

00

• Uncle Bens Rice launching

boil in the bag rice

• Kinder Bueno launching

their Ice-cream line

• Cocoa Brown creating ‘Fresh

Start’ remover
The Product Life Cycle: Examples of Products at Each Stage
E.g. Smart
E.g. driverless E.g. chewing
home products: E.g. Fitbit, E.g. iPods, CDs,
cars, robots in gums breakfast
Amazon Alexa, smartphones video tapes
the home cereals
Google Home
The marketing mix: price
Def: the amount of money consumers pay for the product offered by a
business

There’s a few pricing strategies businesses can use when deciding what
price to charge consumer for their products/services.

Remember: price will influence consumers’ thoughts on the product as

well as sales!
 The marketing mix: price (low price strategies)

Penetration • The business sets a price lower than that

of its competitors’ products in order to
pricing gain a greater share of the market quickly.

• A business sets a price lower than that of

Predatory pricing its competitors’ products to push them
out of the market.

• The business sells a product below cost

Loss leader price in the hope that customers will buy
other products while visiting their shop.
The marketing mix: price (high price strategies)

Premium pricing
This gives consumers the impression that the product is of a
superior quality.

Price skimming
A price is charged when the product is launched so that the
business can recover R&D costs quickly before competitors
enter the market.
The marketing mix: price (other pricing strategies)

• Based on the theory that certain prices

Psychological have a bigger psychological impact on
pricing consumers. Gets consumers to buy based
on emotions rather than common sense.

Mark-up • The business adds a profit percentage

pricing to the cost price of the item, e.g. 10%

• Consumers choose the price level that

Tiered pricing fits their budget e.g. cars
 The marketing mix: price (other pricing strategies)

• Different segments of the

Price market are charged
discrimination different prices for the
same product.

• The business sells multiple

items together for a lower
Bundle pricing
price than they would cost
separately.
The marketing mix: price
Factors that influence price of products/services:
• Cost: need to cover firms costs & make a profit
• Competitors’ prices: will you charge same, higher or lower?
• Stage of the product life cycle: e.g. price skimming at intro stage
• Product image: e.g. premium pricing = luxury product
• Consumer demand: e.g. flights more expensive during school breaks
The marketing mix: place
Def: where consumers can buy goods and services sold by the business

To reach the most people you need an appropriate channel of

distribution (how you get the goods to them)

Sometimes, agents or wholesalers are involved:

Agents: sell good in a particular area/region
Wholesaler: e.g. Musgraves (buy in bulk and sell on)
The marketing mix: place
Most common channels of distribution
The marketing mix: place
1. Producer -> wholesaler -> retailer -> consumer
e.g. Coca Cola -> Musgraves -> SuperValu -> You

Advantages Disadvantages
Large target market can be reached Costs increase as there’s a mark-up at
each stage
Consumers can get the product from Producer may not get feedback at each
many retailers, not just one stage
Product can be simply distributed by the Product must give some profits to
wholesaler wholesaler, reducing their profit
The marketing mix: place
1. Producer -> retailer -> consumer
e.g. Cadbury’s -> SuperValu -> You

Advantages Disadvantages
Large retailers buy direct from producer, Retailers can put pressure for discounts
increasing their target market from producers, reducing profits
Lower prices for consumers as there’s Producers must transport the goods,
less stages in the process increasing costs
Large retailers may advertise nationwide Retailer may see product success and
increasing consumer awareness & sales make an own brand
The marketing mix: place
1. Producer -> agent -> consumer
e.g. Dubliner Cheese -> agent -> You
Agent may get your product into supermarkets in a different region
Advantages
Agent will know the target market and
potential buyers
Company doesn’t have to actually set up
in the foreign country – saves costs
Agent can watch the market and adapt
product to any changes
Disadvantages
Producer may lose some control –
advertising, brand image etc.
Agents might work for lots of brands –
hard to know if they’re loyal
Producer covers marketing, transport
etc. costs – can be expensive
The marketing mix: place
1. Producer -> consumer
e.g. Eggs from someone’s farm -> You
Can be in store, at fairs/markets, online
Advantages
Producer gets to keep all the profit
Producer can get direct consumer
feedback
Producers can promote their products
online, reaching customers globally
Disadvantages
Producer pays for all costs, transport,
marketing etc.
Producer mightn’t have all the skills to
run the business on their own
Can be very time consuming and
demanding
The marketing mix: place
Factors affecting the channel of distribution
Factor Reason
Cost Producer should choose the cheapest but most effective channel
of distribution, increasing their profits

Nature of If the product is perishable or has a short shelf life, it is

the Product important to use a channel of distribution that gets the product
to the consumer as quickly as possible.
Target The business should choose a channel that reaches the largest
Market possible target market.
Business To maintain a brand image, a producer may need to choose a
Image particular channel of distribution.
Market Size Wholesalers may store the producer’s products and transport them
to retailers. This may be the most financially viable option for a
producer to distribute their products to a wide range of consumers.
The marketing mix: promotion
Def: a method of increasing consumer awareness of the brand, goods
and services it sells. It uses techniques to persuade the customer to
buy the company’s products over competitors.

The Promotional Mix:

1. 2. Sales 3. Public 4. Personal

Advertising promotion relations selling
The marketing mix: promotion
1. Advertising
• Communicates information about a firm’s goods and services to
consumers.
• Aims: Remind, Inform and Persuade people about a brand and its
products.

Types of advertising include:

1. Informative 4. Generic
2. Reminder 5. Comparative
3. Persuasive
The marketing mix: promotion
Informative advertising: gives factual info about the
product. Shows/explains the product to them
e.g.cleaning products

Reminder advertising: often used when a product is in the decline

stage e.g. Corn Flakes https://www.youtube.com/watch?v=sTWmpDJt5Zg

Persuasive advertising: persuades consumers they need the

product. Used in the launch stage
The marketing mix: promotion
Generic advertising: advertises a specific good/service rather than a
brand/company

Comparative advertising: brand/product advertised as better than a

competitor in price, quality, choice etc.
The marketing mix: promotion
Advertising mediums:
Medium: Advantages: Disadvantages:

TV • Can reach large audience • Expensive

• Can show detailed info – images,
sound etc.
Radio • Cheaper than TV advertising
• Can reach target market e.g. using
local station
Newspapers • Cheaper than TV and radio
• Can reach target market e.g. Northside
people
Social media • Can reach a large target market
• Can interact directly with customers
• People can skip ads
• Decline in TV viewers with Netflix etc.
• Can only use sound
• Decline in radio listeners with Spotify etc.
• Decline in newspaper sales with apps.
• Very short shelf life – daily/weekly
• Trolls can post untrue comments/complaints
• Limited to only people on the used platforms

Business • Business can control the website • Can be hacked and may cost (NHS hack)
website content • Needs to be updated regularly
• Relatively cheap
The marketing mix: promotion
• Businesses should use their advertising
Cost budget wisely to make the greatest impact
and ensure they get value for money.

Type of • The method chosen should reflect the

product/service image of the product.

• The business should use a method that

Target market reaches the largest possible target
market.

Stage of the • Intense advertising may be needed in

the launch stage of the product life
product life cycle cycle
The marketing mix: promotion
2. Sales Promotion
Def: short time gimmicks used by businesses to attract
customers to buy goods/services
• Loyalty cards e.g. Tesco/Lidl etc.
• Special offers e.g. 3 for 2
• Free samples e.g. beauty, perfume etc.
• Discount codes e.g. ASOS/influencers
• Merchandising e.g. posters, window displays, stands
The marketing mix: promotion
3. Public Relations
Def: a marketing technique used to create a positive public image
for a business, the products and the products/service it sells.
• Sponsorship e.g. on jerseys, at events, buildings etc.
• Endorsements e.g. Tiger Woods & Nike
• Press communication e.g. Boohoo statements re. factories
• Charities e.g. KPMG & Larkin Community College
• Publicity stunt e.g. Richard Branson weddings launch
https://www.youtube.com/watch?v=yMao2Sy1VbY
The marketing mix: promotion
4. Personal Selling
Def: Sales staff using knowledge, information and
persuasion to convince customers to buy a product/service
• Power City buying a TV
• Vodafone buying a phone
• Makeup counters
• Dyson stands
• Tasters at markets
Protecting consumers
Consumers can complain about misleading
advertising (chp 2) to:

• Competition and Consumer Protection

Commission (CCPC)
• Advertising Standards Authority of Ireland
(ASAI)
Evaluation of the marketing mix
Lindt Chocolate:
Product:
The good or service sold by the
company. The firm should ensure it
meets consumer needs and quality
expectations. It may be
recognisable through branding
E.G Lindt produces high quality
chocolate with distinctive
packaging e.g. their gold reindeers
Price:
The pricing strategy chosen
should match the stage in the life
cycle and target market of the
product.
E.G Lindt use premium pricing.
The high price reflects the
quality of their product.
Evaluation of the marketing mix
Lindt Chocolate:
Place:
This is where the good can be
purchased and the channel of
distribution available. This will vary
depending on the type of product.
E.G Lindt sells through
supermarkets and smaller shops in
Ireland. This allows them to reach a
large target market.
Promotion:
The aim of promotion is to
increase consumer awareness of
the product. This can be done
through various methods e.g. TV,
sales promotions etc.
E.G Lindt use TV advertising as
well as free samples in shops.
They also used a celebrity
endorsement with Roger Federer
Key terms
• marketing • niche market • patent
• marketing concept • product • brand name
• marketing strategy positioning • brand logo
• marketing mix • brand slogan
• marketing plan
• product • trademark
• market segmentation • product portfolio • own-brand
• geographic segmentation • penetration products
• demographic pricing • packaging
segmentation • predatory pricing • product life cycle
• psychographic • loss leader • price
segmentation • premium pricing • pricing strategies
• target market
Key terms
• price skimming
• psychological pricing
• tiered pricing
• price discrimination
• bundle pricing
• place
• channel of distribution
• wholesaler
• retailer
• agent • sales promotion
• promotion • merchandising
• promotional mix • public relations
• advertising • sponsorship
• informative • endorsements
advertising • personal selling
• reminder advertising • Advertising
• persuasive advertising Standards
• generic advertising Authority for
• comparative Ireland (ASAI)
advertising
 Past exam question examples
Ordinary level:
2019

2018

2017
2015
 Past exam question examples
Higher level:
2019

2018

2017

2016