Key Definitions
This term refers to the process of planning, pricing, promoting and distributing goods and services.
👉 What is marketing?
Marketing is the process of planning, pricing, promoting and distributing goods and services to satisfy customer needs and achieve business objectives.
One objective of marketing is to increase this to improve business dominance.
👉 What is market share?
Market share is the proportion of total sales in an industry that a business controls.
Marketing identifies customer needs. This function produces the goods/services.
👉 What is operations?
Operations is the business function responsible for producing goods or delivering services.
This approach focuses on mass production and low cost.
👉 What is the production approach?
The production approach focuses on mass-producing goods at low cost, assuming consumers prefer affordable and widely available products.
This market involves individuals purchasing for personal use.
👉 What is a consumer market?
A consumer market consists of individuals who purchase goods and services for personal use.
This is the percentage of total industry sales controlled by a business.
👉 What is market share?
Market share is the percentage of total industry sales that a business controls.
Marketing contributes to this by increasing revenue and reducing costs.
👉 What is profit maximisation?
Profit maximisation is the objective of increasing the difference between total revenue and total costs.
Finance and marketing are interdependent because finance provides this.
👉 What is funding/budget?
Finance provides the funding or budget required for marketing campaigns and promotional activities.
This approach focuses on aggressive promotion and persuasion.
👉 What is the selling approach?
The selling approach focuses on aggressive promotion and persuasive selling to increase sales.
This market involves businesses purchasing raw materials.
👉 What is a resource market?
A resource market involves businesses purchasing raw materials and inputs for production.
This term describes the long-term contribution of marketing to achieving business objectives.
👉 What is the strategic role of marketing?
The strategic role of marketing refers to the long-term contribution marketing makes to achieving business objectives such as profit maximisation, growth and competitive advantage.
Name TWO ways marketing can build competitive advantage.
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Two ways marketing builds competitive advantage:
Creating strong brand awareness and customer loyalty
Differentiating products through quality, packaging or innovation
Effective promotion to increase visibility
Targeting specific market segments
If marketing overestimates demand, this may happen in operations.
👉 What is overproduction / excess inventory?
If marketing overestimates demand, operations may produce too much, resulting in excess inventory and increased storage costs.
This approach begins with identifying and satisfying customer needs.
👉 What is the marketing approach?
The marketing approach focuses on identifying and satisfying customer needs before production begins.
This market focuses on a narrowly defined segment.
👉 What is a niche market?
A niche market is a narrowly defined segment of consumers with specific needs or characteristics.
This occurs when business functions rely on each other to operate effectively.
👉 What is interdependence?
Interdependence is the mutual reliance between key business functions, where each function depends on the others to operate effectively.
Explain ONE way marketing can increase profitability.
Marketing can increase profitability by identifying customer needs and developing products that meet those needs, which increases sales revenue. Higher sales volumes can lead to economies of scale, reducing average costs and increasing profit margins.
Explain how marketing and HR are interdependent.
Marketing relies on human resources to recruit and train employees who deliver customer service and represent the brand. HR must ensure staff are skilled and motivated to support marketing campaigns, which improves customer satisfaction and brand reputation.
This approach considers profit, customer satisfaction and social responsibility.
👉 What is the societal marketing approach?
The societal marketing approach considers customer satisfaction, business profit and broader social and environmental responsibilities.
Explain one advantage of operating in a niche market.
Operating in a niche market allows a business to specialise and face less competition, which can lead to stronger brand loyalty and the ability to charge premium prices.
This refers to a feature that allows a business to outperform competitors.
👉 What is competitive advantage?
Competitive advantage is a feature or strategy that allows a business to outperform competitors and gain greater market share or profitability.
Analyse how marketing contributes to long-term business growth.
Marketing contributes to long-term growth by building brand awareness and customer loyalty, which leads to repeat purchases and stable revenue streams. By increasing market share and maintaining competitive advantage, marketing ensures sustained sales growth and improved profitability over time.
Analyse how poor communication between marketing and operations could impact profitability.
If marketing inaccurately forecasts demand and fails to communicate effectively with operations, the business may overproduce or underproduce. Overproduction increases storage and wastage costs, while underproduction leads to stock shortages and lost sales. Both outcomes reduce profitability and damage customer satisfaction.
Explain why the marketing approach is more effective in competitive markets.
The marketing approach is more effective in competitive markets because it begins by identifying customer needs and tailoring products accordingly. This increases customer satisfaction and loyalty, helping the business differentiate itself from competitors and maintain market share.
Analyse the advantages and disadvantages of targeting a mass market.
Targeting a mass market allows a business to achieve high sales volumes and economies of scale, reducing costs per unit. However, it increases competition and makes it difficult to differentiate products, which may reduce profit margins.