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Business Studies

Products and services do not just sell themselves. Several steps are involved in the process, from finding the right customers to distributing the products and services to them. Companies invest heavily in this process, and it is defined as marketing. Let's learn all about it.

Marketing involves the set of various activities that are used to promote and sell products or services to customers and influence their buying behaviour.

Price

The prices function is referred to as a pricing strategy that should be implemented based on market research regarding the target consumers and competitors. Price will also depend on the marketing objectives that the business aims to achieve.

Product and service management

Sales

The selling function involves reaching target customers and influencing their buying behavior, as well as building sales leads.

What are the key marketing objectives?

Marketing objectives are the set of goals that the company aims to achieve. Objectives can either be short-term or long-term, depending on their scale and timeline of when they are aimed to be achieved. The most commonly used objectives in marketing are:

Key performance indicators

Key performance indicators (KPIs) are metrics that are implemented to track marketing performance and ensure that the set objectives are on track to be met.

Commonly used metrics in marketing are:

  • Marketing return on investment, for example with regards to marketing campaigns

  • Reach and engagement rates, for example on social media channels

  • The number of website visitors

  • Conversion rates, depending on the marketing campaign's set objectives

  • Market share of a product or service

Why is marketing important?

Marketing is an essential function of any type of business. Marketing assists businesses in selling their products or services and making revenue. Without marketing, businesses might struggle to exist as it would be hard to reach target customers and sell goods.

The Always 'Like a Girl Campaign' aimed to change people's perspective of the 'like a girl' term and empower women, as well as increase brand image and awareness for the company. This campaign was successful, even without discussing the Always brand in the campaign– the Always image, awareness and sales have increased significantly. This is due to the emotional impact on the audiences as consumers saw the brand as responsible and focused on social issues.

To effectively maximize a marketing campaign's performance, marketers use a method called performance marketing. This method involves marketers paying advertisement agencies or platforms to advertise their promotional campaigns and the marketing fee is only paid when the desired action is achieved, such as a view, click, sale, etc.

Marketing management

  • setting marketing objectives,

  • Making a marketing plan

  • Arranging marketing functions to work on the plan,

  • implementing the marketing plan,

  • Controlling and monitoring marketing campaigns or activities,

  • Evaluating the marketing campaign's performance - the extent to which set objectives were achieved.

Marketing managers

Marketing managers are usually the ones who are responsible for all the activities included in the marketing management process. The other key activities of marketing managers include setting marketing budgets, setting strategies, negotiating with advertising agencies and commercial partners for the partnership deals and managing employees in the marketing department, among others.

What are the main marketing concepts?

For any business, the improvement of marketing performance is key to the organization's success. Therefore, marketers should use marketing tools, strategies and follow key marketing concepts in order to make effective marketing decisions.

Setting marketing objectives

First, before making any marketing decisions, managers need to set marketing objectives they will be aiming to achieve. Marketing objectives are goals and targets that the business will be working towards, for example, it can be increasing the market share of a specific product or service.

Understanding markets and customers

Understanding customers and markets can assist businesses in improving their marketing performance. Businesses may want to collect data on their customers and competitors to gain a deeper understanding of them. The ways businesses can do this is by undertaking primary and secondary research which can be collected using quantitative or qualitative data collection methods. Moreover, to understand competitors, businesses can use the market mapping method.

Quantitative data is represented in numerical measures and is collected using methods such as multiple-choice questionnaires. The data collected can help businesses understand how long customers spend on their business websites, for instance.

Qualitative data is not numerical and rather presented in the form of opinions. This data is usually collected using methods such as open-ended surveys, one-to-one interviews, focus groups, and direct observations. For example, qualitative data can help businesses understand their customers' opinions regarding their brand.

Market mapping is a form of a graph that is used to identify and understand a business's competitors and find gaps in the market. The graph allows a researcher to position competitors in the market based on different factors such as quality and price. This graph can help businesses spot a gap in the market and take the opportunity to develop a new product. For example, if there are not many competitors producing high quality and low to mid-price chocolate, businesses can use this opportunity to create a new product line (see Figure 2).

Marketing decisions are not effective using estimates or guesses. The most effective marketing decisions are data-driven. Collected data helps marketers understand customers and markets, plan effectively and make marketing decisions.

This section will cover the segmentation, targeting, and positioning (STP) marketing model in great detail. This model helps marketers make effective decisions regarding target customers which assists in improving marketing performance.

Segmentation

  • Demographic segmentation

  • Geographic segmentation

  • Behavioral segmentation

  • Psychographic segmentation

Targeting

Targeting is used to assist the company in selecting segments to focus on when promoting specific products or services. There are usually two generic ways in which a company can target customers:

  • Mass marketing means that the company will aim to reach as many segments as possible.

  • Niche marketing means that the company will target a specific segment.

Marketers use a variety of methods to make marketing decisions. The marketing mix consisting of 7Ps is one of the most widely used methods to analyse marketing performance and make marketing decisions. The 7Ps of the marketing mix are as follows:

Product

Product is the good or service that a company is producing. Marketers need to make product decisions before making and distributing them. First, the company should analyze the value of the product portfolio using a Boston Matrix. This model assists in identifying the level of the product's market share and growth in the market (see Figure 3). Moreover, to make appropriate marketing decisions at the right time, businesses can use the product life cycle model (see Figure 4).

Marketing, Making marketing decisions using the marketing mix, Product, The Boston Matrix, StudySmarterFigure 3. The Boston Matrix, StudySmarter

Marketing, Making marketing decisions using the marketing mix, Product, The Product Life Cycle Model, StudySmarterFigure 4. The Product Life Cycle Model, StudySmarter

Price

Decisions made regarding pricing strategies are important for the business and its marketing performance. There are two main pricing strategies which are:

  • Price skimming: this means that price is set high at the product's introduction stage and eventually declines as the product moves through its lifecycle. This pricing strategy is set to first attract the most motivated customers and eventually gain more customers as the product matures through its lifecycle.

  • Price penetration: the price is set low to attract as many customers as possible to purchase a company's product over competitors' products.

  • Advertising – this promotional strategy includes any paid advertising distributed by the company itself or paid to another company or an influencer.

  • Personal selling – this promotional method involves face-to-face selling that happens between the company's representatives (sellers) and the customer.

  • Sales promotions – these are short-term special deals involving discounts and season sales.

  • Public relations – this promotional method is used by companies to build positive relations with populations that have direct or indirect interaction with the company. This can be done by showing support for public issues and featuring this on social media or press releases.

  • Direct marketing – this is when the company reaches customers directly without intermediaries' assistance. This can be done through email or text message for example.

Place

Place means the channels by which the products are distributed. Companies should aim to use multiple channels to sell their products so that it is easily accessible for target consumers. Examples of distribution channels are retail stores and online shops.

People

The employees that are working for the company are important, especially the ones that have direct interactions with customers as these employees are reflecting the company's image. Therefore, businesses must invest in employees by offering training and development schemes and appropriate salaries and working conditions.

Process

Marketing - key takeaways

  • Marketing is a set of various activities that are used to promote and sell a product or service to the customer and influence their buying behavior.
  • The key functions of marketing functions are distribution, financing, market research, pricing, product and service management, promotion, and selling.
  • Key marketing methods include: 1) Social media marketing, 2) Email marketing, 3) Search Engine Optimization (SEO), 4) Search Engine Marketing (SEM), 5) Affiliate marketing.
  • The key marketing objectives include 1) Sales volume and sales value, 2) Market size, 3) Market and sales growth, 4) Market share, 5) Brand loyalty.
  • The marketing management process involves 1) Setting marketing objectives, 2) Making a marketing plan, 3) Arranging marketing functions to work in the plan, 4) Implementing marketing plan, 5) Controlling and monitoring marketing campaign or activities, 6) evaluating the marketing campaign's performance and the extent to which set of objectives were achieved.
  • The set of tools and methods that can be used to make effective marketing decisions and improve marketing performance are 1) setting marketing objectives, 2) understanding customers and markets, 3) segmenting, targeting, and positioning of target consumers, 4) using the marketing mix to make decisions, 5) Consider the growth of technology in the market.
  • The 7Ps of the marketing mix includes Product, Price, Promotion, Place, People, Process, Physical evidence.

SOURCE:

1. Bhardawaj, A. What is Marketing Management?

What are the functions of marketing?

There are seven main functions of marketing. These functions are an essential part of marketing strategies and activities as they assist businesses in selling products and services effectively. These functions are:

Distribution

The distribution function is also referred to as a distribution strategy. This function describes what channels will be used to reach and sell products and services to consumers.

Funding

Every marketing activity requires financing, meaning that businesses must set a budget in regards to how much money the company forecasts to spend on different marketing activities and campaigns to reach set goals and not go over the set budget.

Market research

Market research function is crucial as it helps businesses gain an in-depth understanding of their target audience's behaviors, which assist in building an effective marketing strategy.

This function signifies that businesses should keep up to date with consumers' behavior and feedback regarding their products and services. Based on this, actions and improvements should be made accordingly.

Promotion

This function marketing function refers to all promotional activities that are aimed to reach target customers and influence their buying decisions.

Recently, marketing has been influenced by current developments in technology. This has led to digitalization in marketing and a new era of marketing appeared - digital marketing. Commonly used digital marketing methods include:

  • Social media marketing – involves the usage of social media channels such as Instagram, Facebook, Tiktok etc to communicate with existing customers, reach new ones, promote products and allow customers to directly engage with the brand.

  • Email marketing – the action of sending promotional messages to a group of customers via email to increase brand relationships and encourage buying behavior.

  • Search Engine Optimization (SEO) – involves organically optimizing a website's visibility by using specific keywords to encourage content relevance and make it easily findable by users on the search engine.

  • Search Engine Marketing (SEM) – a form of paid marketing activity used to optimize a website's visibility on search engines.

  • Affiliate marketing – involves businesses paying commission to third parties, called affiliates, to promote and sell businesses' products and services.

  • Sales volume and sales value

  • Market size

  • Market and sales growth

  • Market share

  • Brand loyalty

KPIs are effective measurement methods used in marketing to understand whether the implemented marketing activities are effective in achieving marketing objectives or whether further improvements are required.

Marketing is important because successful marketing strategies and activities can boost businesses' sales and profit significantly. Let's have a look at the example below of how an effective marketing campaign brought success to a business.

Marketing management is identified as the:

planning, organizing, controlling and implementing of marketing programs, policies, strategies and tactics designed to create and satisfy the demand for the firms' product offerings or services as a means of generating an acceptable profit." ¹

This definition reflects that marketing management is about planning and creating marketing strategies that will assist firms in selling products and services and generating profit from them.

The exact sequence of the marketing management process is:

Marketing, Marketing management, Marketing management process, StudySmarterFigure 1. The Marketing Management Process, StudySmarter

The types of marketing managers may include:

Primary research happens when the data is collected directly by the business or researchers.

Secondary research includes collecting already existing data. This data can be collected from trusted sources such as research and business reports.

Marketing, market mapping, StudySmarterFigure 2. Market Mapping, StudySmarter

Marketing data used in decision making and planning

Making decisions: segmentation, targeting, and positioning

Segmentation is the process of dividing the target market into smaller groups, also called segments. This helps marketers tailor their marketing efforts towards specific segment groups, to make marketing more effective. The segmentation techniques include:

Positioning

Positioning means the place where the product or service stands among similar goods in the marketplace. Market mapping can be used by businesses to find their position in the market, for example, Ferrero Roche chocolate positions itself as a high-quality and high-priced chocolate (see Figure 2).

Making marketing decisions: using the marketing mix

Promotion

Marketers usually use a promotional mix in regards to making the product's promotional decisions. The promotional mix includes:

Companies need to make sure that the service or product delivery process runs smoothly so that customers are satisfied.

Physical evidence

The environment where the product or service is sold is crucial, therefore the company must ensure that, for instance, the website that the products are sold at is easy to navigate and that the physical shop looks presentable and tidy.

Frequently Asked Questions about Marketing

Digital marketing is the way of promoting products and services and communicating with consumers using digital technology. Currently, the most popular digital marketing methods are:

  • Social media marketing, 
  • Email marketing,
  • Search Engine Optimization (SEO),
  • Search Engine Marketing (SEM), 
  • Affiliate marketing.

Performance marketing is a cost-efficient marketing method. It involves paying advertisement agencies or platforms to promote a business's campaign, whereby the marketing fee is only paid when the desired action is achieved, such as view, click, sale etc.

Marketing involves the set of various activities that are used to promote and sell products or services to customers and influence their buying behaviour.

Affiliate marketing involves businesses paying commissions to third parties called affiliates to promote and sell their businesses' products and services.

The five marketing concepts include: 1) Production concept, 2) Product concept 3) Selling concept, 4) Marketing concept, 5) Societal concept.

Final Marketing Quiz

Question

What is the definition of marketing? 

Show answer

Answer

Marketing involves the set of various activities that are used to promote and sell products or services to customers and influence their buying behaviour.

Show question

Question

What are the main functions of marketing?

Show answer

Answer

There are seven main functions in marketing, these involve:

  • Distribution
  • Funding
  • Market research
  • Prices
  • Product and services management 
  • Promotion
  • Sales

Show question

Question

What is meant by the sales function?

Show answer

Answer

The selling function involves reaching target customers and influencing their buying behaviour, as well as building sales leads.

Show question

Question

What is meant by the function of the price?

Show answer

Answer

The price function is referred to as a pricing strategy that should be implemented based on market research regarding the target consumers and competitors. Price will also depend on the marketing objectives that the business aims to achieve.

Show question

Question

Can you name the key methods used in digital marketing?

Show answer

Answer

The key marketing methods are:

  • Social media marketing
  • Email marketing
  • Search Engine Optimisation (SEO)
  • Search Engine Marketing (SEM)
  • Affiliate marketing

Show question

Question

What is meant by affiliate marketing?

Show answer

Answer

Affiliate marketing involves businesses paying commission to third parties, called affiliates, to promote and sell businesses' products and services.

Show question

Question

What is meant by email marketing?

Show answer

Answer

Email marketing is the action of sending promotional messages to a group of customers via email to increase brand relationships and encourage buying behaviour.

Show question

Question

What is meant by the marketing objectives? 

Show answer

Answer

Marketing objectives are the set of goals that the company aims to achieve. 

Show question

Question

Can you name the key marketing objectives?

Show answer

Answer

The key marketing objectives involve:

  • Sales volume and sales value
  • Market size
  • Market and sales growth
  • Market share
  • Brand loyalty

Show question

Question

What is meant by the key performance indicators (KPIs)?

Show answer

Answer

Key performance indicators (KPIs) are metrics that are implemented to track marketing performance and ensure that the set objectives are on track to be met.

Show question

Question

What are the commonly used metrics in marketing? 

Show answer

Answer

The commonly used metrics in marketing are:

  • Marketing return on investment, for example with regards to marketing campaigns
  • Reach and engagement rates, for example on social media channels
  • The number of website visitors
  • Conversion rates, depending on the marketing campaign's set objectives
  • Market share of a product or service

Show question

Question

Why is marketing important for a business?

Show answer

Answer

Marketing is important because successful marketing strategies and activities can boost businesses' sales and profit significantly. Without marketing, businesses might struggle to exist as it would be hard to reach target customers and sell goods.

Show question

Question

What is meant by performance marketing?

Show answer

Answer

performance marketing is a marketing method that involves marketers paying advertisement agencies or platforms to advertise their promotional campaigns and the marketing fee is only paid when the desired action is achieved, such as a view, click, sale etc.

Show question

Question

What is meant by marketing management?

Show answer

Answer

Marketing management is identified as the planning, organizing, controlling and implementing of marketing programs, policies, strategies and tactics designed to create and satisfy the demand for the firms' product offerings or services as a means of generating an acceptable profit.

Show question

Question

What are some different types of marketing managers?

Show answer

Answer

The types of managers may include:

  • Product managers
  • Digital Marketing managers
  • Social Media managers
  • Events managers
  • Marketing content manager

Show question

Question

What are the main marketing concepts?

Show answer

Answer

 The main marketing concepts involve:

  • Setting marketing objectives
  • Understanding markets and customers
  • Use data in decision making and planning
  • Making decisions: segmentation, targeting and positioning.
  • Making marketing decisions: using marketing mix

Show question

Question

What are the key elements of the marketing mix? 

Show answer

Answer

The key elements of a marketing mix are:

  • Product 
  • Price
  • Promotion
  • Place
  • People
  • Process
  • Physical evidence

Show question

Question

What does the graphic present?


Show answer

Answer

The Boston Matrix

Show question

Question

What does the graphic present?

Show answer

Answer

Product Life Cycle

Show question

Question

The graphic below presents a certain process. What is it?


Show answer

Answer

The Marketing Management Process

Show question

Question

What does the graphic present?

Show answer

Answer

Market Mapping

Show question

Question

___ are metrics that are implemented to track marketing performance and ensure that the set objectives are on track to be met.


Show answer

Answer

Key performance indicators (KPIs) 

Show question

Question

To effectively maximize a marketing campaign's performance, marketers use a method called...

Show answer

Answer

performance marketing. 

Show question

Question

It happens when the data is collected directly by the business or researchers. What is it?


Show answer

Answer

Primary research

Show question

Question

It includes collecting already existing data. What is it?

Show answer

Answer

Secondary research

Show question

Question

It is represented in numerical measures and is collected using methods such as multiple-choice questionnaires. What is it?

Show answer

Answer

Quantitative data 

Show question

Question

It is not numerical and rather presented in the form of opinions. What is it?


Show answer

Answer

Qualitative data

Show question

Question

___ is a form of a graph that is used to identify and understand a business's competitors and find gaps in the market. 


Show answer

Answer

Market mapping 

Show question

Question

STP stands for...

Show answer

Answer

segmentation, targeting, and positioning.

Show question

Question

___ is the process of dividing the target market into smaller groups, also called segments.


Show answer

Answer

Segmentation 

Show question

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