This document contains summaries from " Consumo business studies textbook" which summarizes the marketing function with in-depth explanations of factors that formulate the marketing strategy of a business.
o Marketing can be defined as the on-going activities of the business to
reach the target market and the methods the business utilizes to
connect and engage with its target market.
➢ Strategic role of marketing:
- It is important to recognize that strategic planning drives the overall
performance of the business and it involves …
- Identify the overall market scope.
Marketing strategy:
- Determine the USP.
brand image - Determine the marketing budget.
Implementing
- Marketing of the product/service offering.
marketing strategy - Evaluate the effectiveness of both the strategy and
its implementation.
• Formulating the marketing strategy:
➢ When planning the marketing strategy, three basic approaches emerge =
✓ Marketing the overall brand of the business.
✓ Marketing the product/service offering.
✓ Emphasis on both the business and individual product/service offerings.
• Five step process to formulate marketing strategy:
1. Perform environmental scan.
2. Define the target market and unique selling proposition [USP].
3. Determine the marketing budget.
4. Implement the marketing mix to achieve the aims of the
marketing strategy.
5. Evaluate the effectiveness of the process and take corrective
measures where necessary.
, - STEP 1: OVERALL MARKET SCOPE IS INVESTIGATED BY PERFORMING AN
ENVIROMENTAL SCAN:
- External analysis focuses on the relevant external elements that may affect the
overall performance of the business/brand.
- It is important businesses identifies possible opportunities and threats as part
of the marketing plan in order to assess the possible impact that these
elements may have on the business.
➢ Industry analysis =
- This is the assessment or scanning of the sector that the business
operates in, the purpose is to identify opportunities and threats.
➢ Competitor analysis =
- Gives the business an overall picture of all the competitors in the
market.
- Business must evaluate competitors’ strengths and weaknesses in
order to determine the effect these could have on the performance
of the business and then adapt the marketing efforts.
➢ Market mapping =
- a visual representation of market condition/trends.
- The position that the different competitors hold are plotted on a
map to help the business to identify its own position within the
market place.
➢ Customer analysis =
- Business must look at both potential and current customers to see
where their needs are not satisfied.
- Analyzing customer base will help the business to identify the
potential market segmentations.
, • The LSM tool:
➢ Most widely used marketing research methods in south Africa.
➢ Allows for segmentation of the general public.
➢ Each variable is multiplied with a weighting attached to it and a score is calculated,
which then determines the LSM groupings.
➢ Purpose of LSM groupings:
▪ To gain understanding of the different market segments.
▪ To assess how these groups spend their money to satisfy their wants and
needs.
▪ To group the consumers with similar spending patterns.
➢ LSM grouping helps the marketing department to have a clearer understanding of
the particular target market and the specific needs and wants of this market segment.
➢ Consumers in the lower LSM group have a lower level of disposable income and a
lower standard of living.
SEM (Socio – Economic Measurement) – is often suggested instead of LSM, although
SEM is focuses more on the type of structure where the person lives rather than the
technology available to him/her, it also not necessary an indication of the type of brand
that will be purchased.
- The second aspect of the environmental scan is: The internal analysis.
• The internal analysis applies to those elements which are internal to the
business.
• The business is able to control these factors, which comprise the eight business
functions.
• The following tools could be used to help the business understand the internal
marketing environment:
o SWOT analysis.
o Value chain.
o Resource – based analysis.
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