Benefits of Target Marketing

Target marketing offers several advantages for businesses:

1. Increased Sales: When a product meets the specific needs of a customer, sales are likely to increase.
2. Optimized Pricing: Pricing can be set to reflect what the target audience is willing to pay, maximizing profits.
3. Effective Placement: Selling products in the most appropriate place reaches the target audience, potentially maximizing sales.
4. Tailored Marketing: Promotion techniques can be customized to entice the company's target market, preventing wasted resources on ineffective marketing.

Highlight: Effective target marketing can lead to increased product satisfaction and overall customer satisfaction.

Example: A luxury skincare brand might use high-end magazines and social media influencers to reach their target demographic of affluent, beauty-conscious consumers.

Market Research Methods

Market research is crucial for understanding customer needs and preferences. There are two main types:

1. Field Market Research

Advantages:

• Information obtained first-hand
• Specific to business needs
• Up-to-date
• Provides information about customer feedback, promotional methods, and sales data

Disadvantages:

• Time-consuming to gather
• Information may not always be truthful or accurate

2. Desk Market Research

Advantages:

• Cheaper and quicker to access
• Uses information that has already been collected

Disadvantages:

• May not be up-to-date
• Available to competitors

Vocabulary: Field market research involves collecting new data specifically for the research project, while desk market research uses existing data from various sources.

Highlight: Understanding the advantages and disadvantages of market research methods in business is crucial for making informed decisions about which methods to use.

Specific Market Research Methods

Various methods can be used to conduct market research:

1. Telephone Survey: Can reach a large geographical area Low response rate as calls may be seen as nuisance
2. Hall Test: Consumers try out products before release Respondents may feel obliged to give favorable opinions
3. EPOS $Electronic Point of Sale$: Loyalty cards hold valuable information about shopping habits
4. Observation: Shopping habits observed using cameras Real-life behaviors captured in action Samples may be random and not representative of all customers
5. Postal Survey: Inexpensive and requires no training Low response rate due to effort required to send response back
6. Online Survey: Large sample sizes possible Inexpensive Limited to people with internet access
7. Face-to-face Interview: Allows two-way communication with consumers Home interviews are unpopular

Example: A supermarket might use EPOS data from loyalty cards to analyze purchasing patterns and tailor promotions to specific customer segments.

Highlight: Each method of market research has its own strengths and limitations. Businesses often use a combination of methods to gather comprehensive data.

Product Life Cycle and Extension Strategies

The product life cycle consists of several stages:

1. Introduction: Product is launched Costs are high Business may lose money Few competitors
2. Growth: People become aware of the product Sales increase Competition increases
3. Maturity: Product is well-known Price may fall Fierce competition
4. Decline: Customer tastes change Sales fall Market share decreases

Definition: The product life cycle is a marketing theory that describes the stages a product goes through from when it's first introduced into the market until it's removed.

Extension strategies to prolong the product life cycle include:

• Changing packaging
• Improving the product
• Altering price
• Adjusting the marketing mix

Example: A smartphone manufacturer might introduce new features or redesign the product to extend its life cycle and maintain market interest.

Branding in Marketing

Branding is a crucial aspect of the marketing mix, specifically related to the product element.

Advantages for the brand:

• Creates a strong identity, making the product more recognizable
• Represents quality and reliability
• Encourages brand loyalty
• Allows easier introduction of new products under the same brand

Disadvantages for the brand:

• Time-consuming and expensive to establish
• One product's bad reputation could damage the whole brand

Advantages for customers:

• Provides a sense of security when buying
• Can satisfy esteem needs through high-status brands

Disadvantages for customers:

• Often pay a higher price for branded products

Quote: "A brand represents quality and reliability, so customers tend to feel more secure when buying a branded product."

Highlight: Strong branding can lead to increased customer satisfaction and loyalty, but it requires significant investment from businesses.

Pricing Strategies in Marketing

When setting a price, businesses need to consider:

• Cost of materials
• Demand
• Competitors' prices
• Customers' disposable income

Different pricing strategies include:

1. Cost Plus: A percentage is added to the cost to make a profit Ensures profit is made
2. Low Price: Set to undercut competition Customers save money May be associated with poor quality
3. High Price: Set to cost more than average High profit margins May result in fewer sales
4. Price Skimming: High price at launch, then lowering Extra profit can be made initially Only effective while there's no competition
5. Price Discrimination: Charging more when customers can't buy elsewhere Often used in situations with no competition, like airports

Vocabulary: Price skimming is a pricing strategy where a high price is set for a new product and lowered over time.

Example: A new technology product might use price skimming to maximize profits from early adopters before lowering the price to attract more price-sensitive consumers.

Distribution Methods in Marketing

Distribution is a key element of the marketing mix, specifically related to place. Methods include:

1. Sea: Many products transported Time-consuming and expensive
2. Air: Used for breakable or perishable products Expensive but fast
3. Road: Cheaper and quicker Door-to-door service Not environmentally friendly Traffic can cause delays
4. Rail: Used for large products May require road transport if no nearby station
5. Online: Can reach a global market Customer information easily collected More expensive due to postage costs

Factors considered when choosing a distribution method:

• Location of customers
• Parking availability
• Competition
• Target market
• Staffing requirements
• Infrastructure
• Government incentives

Highlight: The choice of distribution method can significantly impact customer satisfaction and the overall success of a product in the market.

Example: A fresh produce company might use a combination of air and road transport to ensure their products reach customers quickly and in good condition.

Location Considerations in Marketing

When deciding on a business location, several factors need to be considered:

1. Customer Accessibility: The location should be easily accessible to the target market.
2. Parking: Adequate parking facilities can attract more customers.
3. Competition: The presence of competitors in the area can influence the decision.
4. Target Market: The location should align with the preferences and habits of the target audience.
5. Staffing: Availability of suitable staff in the area is crucial.
6. Infrastructure: Good transportation links and utilities are important.
7. Government Incentives: Some areas may offer incentives for businesses to locate there.

Example: A high-end boutique might choose a location in a popular shopping district to attract its target market of fashion-conscious consumers.

Highlight: The right location can significantly contribute to customer satisfaction and the overall success of a business.

Products Tailored to Customer Needs

Businesses tailor products to meet specific customer needs based on various factors:

Definition: Market segmentation is the process of grouping potential customers together by common characteristics.

Tailoring products can be based on:

1. Occupation: For example, steel toe cap boots for builders.
2. Religion: Different religions have specific needs, such as halal foods for Muslims.
3. Lifestyle: A couple without children will have different requirements than a family with young children.
4. Location: Products can be tailored to different geographical locations due to varying weather conditions.

Example: A business might create waterproof clothing for regions with high rainfall.

Market segmentation also considers:

• Gender: Males and females often have differing requirements for products like toiletries and clothing.
• Age: Different age groups have varying wants and needs, such as teenagers' fashion preferences differing from those of pensioners.

Highlight: Customer satisfaction is crucial in business, as tailoring products to specific needs can lead to increased sales and brand loyalty.