MARKETING:

• Marketing is the management process responsible for identifying, anticipating and satisfying consumers’ requirements profitably
• Marketing is responsible for:

1. Identifying customer needs
2. Satisfying customer needs
3. Maintaining customer loyalty
4. Building customer relationships

MARKET CHANGES:

WHY CUSTOMER SPENDING PATTERNS CAN CHANGE?

1. Change in income: when a person gets a higher pay, they are more likely to spend their money in the tertiary sector such as traveling or going to a spa. It also has to do with the amount of money a product costs; if a person gets paid higher, they will spend their money on luxurious items

2. Change in their tastes/preferences: if an item was a trend, for example like the fidget spinner, and the trend ended, sales would fall because customers no longer want to invest in it

3. Change in technology: when newer technology comes out, sales of the “outdated” product would fall. An example would be the flip phone and an iPhone. 

4. Ageing population: in some areas, the amount of elderly is a lot more than young adults so elderly products will be in higher demand. Examples include anti-ageing creams, hair growth serums, etc.

THE IMPORTANCE OF CHANGING CUSTOMER NEEDS:

• What makes a business profitable is its ability to make products that both meet and exceed customer expectations. Therefore, the business’ research and development team (R&D) has to study the market and the customers in order for them to maintain loyal customers and attract new customers

WHY SOME MARKETS HAVE BECOME MORE COMPETITIVE: 

1. The internet/e-commerce: if a business sells its products online, it makes it available for customers everywhere (sells internationally) so there are more competitors in the market

2. Globalization: goods are being sold internationally so there is more competition

3. Improvement in transportation infrastructures: when the transportation methods improve, this makes selling products around the world easier and cheaper 

HOW CAN A BUSINESS RESPOND TO CHANGING SPENDING PATTERNS AND INCREASING COMPETITION?

1. Introduce new products in order to attract new/more customers 
2. Improve existing products to keep up the sales
3. Keep costs low to increase profitability
4. Maintain good customer relationships so they don’t choose competitors instead

NICHE AND MASS MARKETING:

NICHE MARKET:

• Products in a niche market are sold only to a very small number of customers who form a small segment of a much larger market
• Examples: Rolex watches and Saint Laurent perfumes (they target high-income consumer groups)
• Advantages:

1. If the market lacks competitors, the business can charge its products at a very high price and can still make profit
2. Small businesses can sell their products profitably and victoriously where large businesses have not yet been established
3. Since the products in a niche market are sold to a very small number of customers, the needs will be more concentrated and focused on leading to higher customer satisfaction

• Disadvantages:

1. Over-dependance on one product (if this product doesn’t sell, the business may risk closing down)
2. Lacks economies of scale (is unable to benefit from lower costs associated with a larger operation/market – further discussed throughout the syllabus)
3. Very likely to attract competition if its profitable

MASS MARKET:

• Selling the same products to the entire market with no target audience specified
• Examples: Dawn Dish Soap and Dove Shampoo 

• Advantages:

1. Risks are spread because the business’ success isn’t dependent on a single product
2. Business can benefit from economies of scale
3. Large sales volume in comparison to a niche market
4. More opportunities for business growth

• Disadvantages:

1. Can’t charge higher prices because consumers will purchase an alternative or invest in competitors’ products
2. Higher competition

MARKET SEGMENTATION:

• Dividing a big market into smaller groups where each group shares similar characteristics 
• Can be divided based on: 

1. Age
2. Gender
3. Lifestyle
4. Socio-economic groups (income)
5. Use of the product (home/business)
6. Location

• Advantages:

1. Saves money when conducting market research since the target audience is specified
2. Leads to higher success and profit
3. Number of potential sales increase