Marketing and the competitive environment
Marketing and the competitive environment
Effective marketing
Marketing: identifying and meeting customer needs.
Market: anyone willing and with the financial ability to buy a product or service.
There are 2 main strands to successful marketing:
Identifying customer needs.
Meeting customer needs.
Niche marketing: meeting the needs of a relatively small number of potential customers.
Advantages
Disadvantages
Ability to focus on the needs of individual customers and respond quickly to changes in their needs
Degree of specialisation makes niche marketing vulnerable to changes in the market conditions
Thr return on marketing expenditure is often high because it can be so well targeted.
May attract the interest of large, multi-national companies- small companies may find it difficult to compete.
Little competition which makes it easier to gain market gain market share
Sales levels may be relatively low which could cause problems if cost rise unexpectedly, and profit margins are squeezed.
May be possible to charge premium prices because of the lack of direct competition.
Mass marketing: meeting the needs of a very large of potential customers.
Advantages
Disadvantages
High sales, at low prices, mean cost are spread over a greater number of units.
High profits will attract a lot of competitor’s until the market which can drive down process and reduce profit margins.
As products are aimed at a large range of potential customers, it is likely that revenue will be regular, and cash flow problems are less likely.
May be difficult to spot changes in customer needs because market is large, which could lead to loss in market share.
Very difficult for small or medium sized businesses to compete with small number of very large businesses.
Which is best?
This decision will depend upon the business. However, there is a growing body of evidence to suggest that due to the growth of e-commerce, it is now possible for niche-businesses to operate in
Effective marketing
Marketing: identifying and meeting customer needs.
Market: anyone willing and with the financial ability to buy a product or service.
There are 2 main strands to successful marketing:
Identifying customer needs.
Meeting customer needs.
Niche marketing: meeting the needs of a relatively small number of potential customers.
Advantages
Disadvantages
Ability to focus on the needs of individual customers and respond quickly to changes in their needs
Degree of specialisation makes niche marketing vulnerable to changes in the market conditions
Thr return on marketing expenditure is often high because it can be so well targeted.
May attract the interest of large, multi-national companies- small companies may find it difficult to compete.
Little competition which makes it easier to gain market gain market share
Sales levels may be relatively low which could cause problems if cost rise unexpectedly, and profit margins are squeezed.
May be possible to charge premium prices because of the lack of direct competition.
Mass marketing: meeting the needs of a very large of potential customers.
Advantages
Disadvantages
High sales, at low prices, mean cost are spread over a greater number of units.
High profits will attract a lot of competitor’s until the market which can drive down process and reduce profit margins.
As products are aimed at a large range of potential customers, it is likely that revenue will be regular, and cash flow problems are less likely.
May be difficult to spot changes in customer needs because market is large, which could lead to loss in market share.
Very difficult for small or medium sized businesses to compete with small number of very large businesses.
Which is best?
This decision will depend upon the business. However, there is a growing body of evidence to suggest that due to the growth of e-commerce, it is now possible for niche-businesses to operate in