Ian's A/S Business Blog: 1.1.1 The Market

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.

Mass marketing

Attempting to sell an identical product or service to the 'average' customer or 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 everyone's values, beliefs and needs are the same, lower profit margins.

Customers wanting something more distinctive.

Click on the picture:

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 targets your exact audience.

If you were selling Winter ski breaks, what demographic group would you be aiming for?

Click on the picture:

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:

Market share:

The percentage sales of one brand within the market.

This could be represented by a slice of the pie chart above.

Click on the headline:

Market share / market growth calculations:

Market growth/decline = Increase/decrease in the size of the market x 100

--------------------------------------------
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

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:

Branding:

The process involved in creating a unique name and image for a product in the consumers' mind, mainly through advertising campaigns with a consistent theme.

Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers.

Dynamic markets:

A dynamic market is one that is fast moving and characterised by constant change, activity, or progress.

Some examples of dynamic markets:

1. Online retailing

How has the growth of 'clicks' and the decline of high street 'bricks' impacted businesses and consumers?

The growth of smartphones.