Overview
This lecture covers all core concepts in IB Business Management Unit 4: Marketing, including strategies, market planning, market research, the marketing mix, and exam tips.
Market Orientation and Product Orientation
- Market orientation focuses on meeting customer needs; relies on promotion and adapting to market trends.
- Product orientation centers on business strengths and unique products; risks missing market opportunities.
- Market share measures a firm's sales as a percentage of total market sales.
- Market leader is the firm with the highest market share, benefiting from economies of scale and partnerships.
- Market growth is calculated by the increase in sales revenue or customer base over time.
Marketing Planning and Market Segmentation
- Marketing planning analyzes potential markets and strategizes how to target them.
- Market segmentation divides customers by characteristics: demographic, psychographic, socioeconomic, geographic.
- Target market is the specific segment a business focuses its marketing on.
- Product positioning maps show how customers perceive brands based on factors like price and quality.
- Mass marketing targets the whole market, while niche marketing targets specific segments.
- Unique selling points (USPs) differentiate a brand and build loyalty.
Market Research and Sampling
- Market research gathers data about customers, competitors, and markets.
- Primary research is collected firsthand (surveys, interviews); secondary research uses existing sources.
- Quantitative data is numerical; qualitative data is open-ended.
- Sampling methods: random (equal chance), quota (by characteristics), convenience (easiest to reach).
- Sampling errors stem from sample design; non-sampling errors are unrelated to design.
Product Life Cycle and Branding
- Product life cycle: R&D, introduction, growth, maturity, decline.
- Extension strategies (e.g., feature changes, new markets) delay decline.
- Branding builds awareness, differentiation, and loyalty; strong brands have high value.
Pricing Strategies
- Cost-plus pricing adds a set margin to costs.
- Penetration pricing sets low prices to gain market share quickly.
- Loss leader pricing sells below cost to attract customers.
- Predatory pricing undercuts competitors (often illegal).
- Premium pricing sets high prices to suggest quality.
- Advanced: dynamic pricing (based on demand), competitive pricing, contribution pricing, price elasticity of demand.
Promotion Methods
- Above the line (ATL): uses third-party media (TV, newspapers).
- Below the line (BTL): direct efforts (emails, trade shows).
- Through the line (TTL): combines ATL and BTL.
- Social media marketing uses digital platforms to connect with customers.
Distribution Channels
- Channels distribute products via wholesalers and retailers.
- Short channels offer control and lower costs but limited reach; long channels broaden reach but reduce control.
- Product type and customer behavior determine channel choice.
The Marketing Mix: The 7 Ps
- Product, price, promotion, place (distribution), people (service staff), processes (service systems), physical evidence (tangible business aspects).
International Marketing and Budgeting
- International strategies: joint ventures, franchising, direct investment, exporting.
- International marketing offers growth but adds risks and new costs.
- Budgets and variances help set targets and measure performance.
Key Terms & Definitions
- Market Orientation — business approach focused on fulfilling customer needs.
- Product Orientation — business approach focused on leveraging company strengths.
- Market Share — firm's sales divided by total market sales.
- Market Segment — group of customers with shared characteristics.
- Sampling Error — error from sample selection method.
- Brand Loyalty — repeated customer preference for a brand.
- Product Life Cycle — stages from product introduction to withdrawal.
- Unique Selling Point (USP) — trait that differentiates a product from competitors.
- Price Elasticity of Demand — sensitivity of demand to price changes.
Action Items / Next Steps
- Review Unit 4.2 (Marketing Planning), Unit 4.4 (Market Research), and Unit 4.5 (7 Ps) for exam focus.
- Practice market share and market growth calculations.
- Use case studies and mock exams for applied practice.
- Visit diplomy.org for detailed videos and revision materials.