Marketing: the action or business of promoting and selling products or services, including market research and advertising.
The purpose of marketing:
What makes someone buy a product? Or more importantly, what makes them buy the product you are trying to sell? More here. The purpose of marketing:
Niche and mass marketing:
Mass marketing is attempting to sell a product or service to the 'average' customer, the whole market.
Advantages: Cost effective because of economies of scale, proven to work, can build a very powerful brand.
Colgate has 45% share of the world market for toothpaste.
Disadvantages: not personal, assumes everyones values, beliefs and needs are the same, lower profit margins.
Niche marketing: this involves targeting a product at a small, perhaps tiny segment of the market.
The A380 is the largest passenger plane in the world.
Imagine that you could afford to buy one.
How would you design the interior?
Advantages of niche marketing:
Initially there is not that much competition.
It’s unlikely that large companies are going to focus their efforts on exploring such a small segment, so a small company can have real chances in becoming successful.
Being among the first in a specific area gives you a competitive advantage.
You can create highly personalised promotion that target your exact audience.
Disadvantages:
If the market is poorly targeted then potential clients will not know about the product or service.
If there are only a few potential customers the product or service may not be viable.
If the niche proves to be profitable then larger firms may move into the market.
Market size:
A measurement of the total sales of a product by value (£'s) or volume (units)
The total market size could be represented by this:
The percentage sales of one brand within the market.
This could be represented by a slice of the pie chart above.
Wrigley have a 92% share of the UK chewing gum market.
Market growth/decline = Increase/decrease in the size of the market x 100
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Original Market value
Original Market value
Customer numbers and spending at nightclubs, 2007-09
2007
|
2008
|
2009
| |
Sales volume (no. Of customers)
|
2600
|
2200
|
3000
|
Sales value (revenue rec’d)
|
£52000
|
£48400
|
£63000
|
Calculate the percentage decline in both volume and value between 2007 and 2008 (to 1 decimal place).
Calculate the percentage growth in both volume and value between 2008 and 2009 (to 1 decimal place).
1) Market share = Sales of one product/brand/company
----------------------------- x 100
Total sales in the market
----------------------------- x 100
Total sales in the market
Nightclub attendances, 2009
Nightclub
|
No. of customers per week
|
Market share %
|
Ali’s
|
450
| |
Guy and Toni’s
|
750
| |
St. Elmo’s Fire
|
1200
|
40
|
Stephen Fry experience
|
600
|
20
|
All nightclubs
|
Calculate the market share for the other 2 nightclubs. All 4 clubs should equal 100%.
Introduction to the Marketing Mix. Great lyrics, suspect singing. Play the video: