IBDP - Study Guide for Business Management HL & SL - Topic 4
Institution
International Baccalaureate Diploma Program
Book
Business Management for the IB Diploma Coursebook
A complete study guide and revision notes for the IB Diploma Business Management program.
I achieved a 43 predicted in the IB program and scored a 7 overall for my HL final business management grade by using these notes to study.
These notes include all aspects listed in the IB syllabus as well...
Case BAM Business Management for the IB Diploma Coursebook
IB business management, 2.4 Motivation
Summaries for Business Management for the IB Diploma Coursebook SL/HL
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IBDP - Study Guide for Business Management HL & SL - Topic 4
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The Role of Marketing - 4.1
Marketing = the management process responsible for identifying, participating and satisfying customer
requirements profitably
- Aims to find out customer needs & satisfy those needs
- Sells products, creates desire, undergoes research, communications, etc
Relationships with other Business Functions
Human Resources - Whether the business has the right quantity & quality of staff to
meet its marketing objectives based on sales forecast
- Declining sales = redundancy
- Example: marketing department forecasts product growth then
HR needs to recruit staff = costly & time consuming
Finance & Accounts - Marketing is constrained with budgets
- Types of marketing research determines funding needed
- Marketing objectives and new strategies = costly
Operations Management - Market research indicates determines R&D focus
- Sales forecasts determine future manufacturing capacity
- New innovations need promotion
The Market = a place or process which allows buyers and sellers to meet and exchange goods, services
and information
- Facilitates trade & is motivated to satisfy needs and wants of consumers
- Place where buyers & sellers come together (a supermarket, online stores, shopping mall)
- A location (market is broken up by location; continent, country, etc)
- A type of product (mobile phone or soft drink market)
B2B = trade between businesses - larger in value than sales to private individuals
Marketing = management process responsible for identifying, anticipating and satisfying customer
requirements profitably
,Marketing mix - can be adapted to meet customer needs & wants
4 P’s for goods = product, price, promotion and place
7 P’s for services = product, price, promotion, place, people, process and physical evidence
Product Orientation
➔ When companies prioritize R&D over market research & focus on their products
➔ Product-oriented companies can be thought of as primarily inward facing
◆ Example: Toyata invested millions into hybrid engines & now offers fuel efficiency and
low running costs = market leader
Advantages Disadvantages
Innovative products & can apply for patents No guarantee product will be sold to market
(won’t be copied)
It will be a USP for a business Expensive to conduct R&D
Product has better quality May be other missed opportunities
May be economies of scale Branding is narrow
Little threat from competition Risk of obsolescence in product
Market Orientation
➔ When companies adopt a market-oriented approach, the needs of the customer are put above
everything else & it is outward looking
➔ Extensive & ongoing market research will be at the centre of all decision making
◆ Example: Coca-cola invests large time & effort to sell over 500 different beans that meet
consumer needs in 200 countries
Advantages Disadvantages
, Products are likely to conform to customers needs Products less unique
& get sold
More focused production + strategy More competition
Marketing activities quality is improved as market Important to get market research right
needs are understood
Long-term profitability from repeat customers Challenging to quickly respond to market changes
Risk of underestimating the customer or market
Social Marketing
➔ Aims for marketing activities to influence behaviour in a way that benefits society as a whole
◆ Example: Dumb Ways to Die video reduced accidents in the city’s transport systen
➔ Government spends revenue from taxation on social advertising campaigns
➔ Budgets set by governments and NGOs
Social Marketing vs Commercial Marketing
➢ Social marketing - wants to change behaviour
➢ Commercial marketing - wants to meet customers’ needs
Marketing Objectives
Social Marketing Commercial Marketing
Protecting the environment Increased market share
Promoting public health (smoke, alcohol and drug Brand recognition
misuse)
Raising awareness about an individual issue Creating customer loyalty
Control Tools
- Refers to ways that their success is evaluated
- For social marketing - difficult to find exact reason for a change in behaviour as the campaign
may not always be the cause
Social Marketing Commercial Marketing
Public health: assessed by measuring drop in Sales figures
people with a disease, less cigarette sales, etc
Less traffic accidents Customer surveys
, Market Size
➢ Total sales of all businesses in a given market
➢ Measured by:
■ Value = amount spent by customers on total goods sold/revenue = $
■ Volume = number of goods bought by customers = number of units
Market Share
- The proportion of a particular market that is held by a business, a product, a brand or a number of
businesses/products
- Can be measured in value or volume (units sold), always as a %
Equations:
Market share (measured in value) = firms sales or revenue / total sales in market x 100
Market share (measured in volume) = number of units sold by firm / total units sold in market x 100
Market Leadership
- Market leader = the product or brand with the highest market share (has the highest %)
- The leader can gain recognition as the market knows them & what they represent
Advantages of Market Leadership
Ease of access to channels of - Retailers stock brands customers demands and that
distribution customers are aware = strong sales and maintains market
share
Brand recognition - High brand recognition = improved sales
Economies of scale - Market leader is able to sell a large number of products
and have lower costs than rivals (buying in bulk for
stock, managers have more experience)
- Firms can afford to lower prices = more market share
- Can leave/set their prices the same = profit margin
increase
Price leadership - Have control over selling price of products in their
category
- Competitors may want to have similar products as market
leader but struggle with market price = major advantage
Marketing Objectives
➔ Provide direction & accountability to marketing to guide future decisions + actions
➔ Objectives depend on management style & personality of objective setter
➔ Use SMART objectives
◆ S = specific
◆ M = measurable
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