Role of Marketing

Context

The role of marketing is to generate sales to satisfy customers' needs and wants. It is defined as the process, planning and executing the production, pricing, promotion and distribution of ideas, goods and service to create exchanges that satisfy individual and organisational objectives. In today's marketing strong emphasis is on marketing to customers and understanding their point of view of the business.

Strategic Role of Marketing Goods & Services

The strategic role of marketing is to

Maximise profit
Gain market share .

The strategic role also extends to society which includes:

o Choice- Businesses differentiate themselves from their competitors through price, product quality and features and service. All these provide consumers with greater choice when purchasing a product.

o Standard of living- Businesses will often develop and market products that improve and enhance standard of living. To provide consumers with better products.

o Employment- To provide a product to consumers, businesses must employ labour to assist in transforming input resources into finished products. Labour is also required to sell these goods and services.

o Brand awareness- Brand awareness refers to the extent that customers are aware of a product/ brand and its features. It is achieved through strong and effective marketing campaigns.

All of this is done to increase the market share.

Market share refers to the % of total sales a business has compared with its competitors in a particular market. It increases the business’s sales and profitability.

Interdependence with other key business functions

Interdependence = rely on each other vs independence (self reliant )

Each key business function must work effectively with other functions to ensure the goals of the business are achieved.

Operations relates with marketing as it needs the data from marketing to know what to produce
Human resources relates with marketing as staff must be motivated and skilled to develop products. It is through the marketing process that a business is able to determine the skills needed.
Finance relates with marketing as the business needs to see how much money it can put into marketing.

Question - List a number of other ways these 4 functions could be interdependent in real world. Find a real life example of where they need to rely on each other e.g. Apple

3 approaches to Marketing - Production, selling, marketing approaches

Approaches to marketing

Marketing is aimed at increasing product awareness and sales.

There are 3 core approaches to marketing:

1. Production approach (1820-1920s)- Relies on the view that consumers base their purchasing decisions on the quality of the product.

Best described as "If we make it, they will buy it"

2. Selling approach- Based on the belief that a business will be successful in selling a product if it is able to promote the benefits of the product to its target market. It does not listen to the target market.

e.g. If there was an ad for the Samsung 10

Samsung Galaxy S10 specs

- - - Weight: 157g.
    - Dimensions: 149.9 x 70.4 x 7.8mm.
    - OS: Android 9.
    - Screen size: 6.1-inch.
    - Resolution: QHD+
    - CPU: Octa-core chipset.
    - RAM: 8GB.
    - Storage: 128/512GB.

3. Marketing approach- The basis of which is that the customer is at the core of all business activities. It involves adopting a customer orientation with the belief that all actions in the business should be aimed at satisfying the needs of the customer. E.g. Nike pg. 133

Types of markets – Resource, Industrial, Intermediate, Consumer, Mass, Niche

Type of markets

The production and sale of goods and services is not restricted or targeted solely to customers. Some organisations simply buy a finished good from a manufacturer to sell to consumers. There is a diverse range of markets that demand goods and services.

The type of markets are:

1. Resource markets- those markets where the production and sale of raw materials occurs. E.g. are BHP Billiton and Rio Tinto.

2. Industrial markets- where goods that are used as supplies in the production process are traded. E.g. construction ,agriculture, mining, manufacturing.

3. Intermediate markets- commonly referred to as wholesalers and retailers. They sell products to retail businesses that have been produced by other organisations. E.g. Woolworths or Armstrong Electrical Wholesalers . For information on wholesalers click here

Consumer markets

4. Consumer markets consist of the following markets and are defined as individuals who plan to use or consume the product

e.g. clothing, housing or food.

5. Mass markets: apply to goods and services that appeal to all types of consumers. Electricity, water and postal services are examples.

• Market segments: where a business chooses to focus on only one area of particular market. E.g. Women aged 20–50 years old.

6. Niche markets: a smaller section of a market segment. E.g. luxury cars. Further examples https://thrivehive.com/examples-of-niche-markets/

HSC Questions

2012

Q6 A business develops a shirt made from fabric which never stains or looks crushed. It then runs an advertising campaign to inform people about this product.

What type of approach is this?

(A) Industrial

(B) Marketing

(D) Selling

2013

Q2 An overseas factory sells 200 000 teddy bears a year to toy stores across Australia. What type of market is the overseas factory targeting?

(A) Consumer

(B) Intermediate

(D) Resource

Q15 Company XYZ allocates most of its marketing budget to advertising. What approach has XYZ adopted?

(A) Selling approach

(B) Market approach

(D) Production approach

Q25

Robin and Pat are planning to establish a sporting goods business. They have decided to adopt a niche market approach to maximise profits.

(b) Evaluate their decision to adopt a niche market approach. 6 marks

2015

Q1 In what type of market do wheat farmers sell their products?

(A) Industrial

(B) Intermediate

(D) Resource

2016

Q15 A confectionery company used to sell its chocolate bars direct to the public. Now its products will only be available in supermarkets. How has the market for the product changed?

(A) From a resource market to an industrial market

(B) From a consumer market to an industrial market

(D) From an intermediate market to a consumer market

2017

Q14 In which type of market would a large scale manufacturer of pasta purchase flour for its products?

A. Consumer

B. Industrial

C. Mass

D. Resource

2018

10 Which approach is being used when a business creates a focus group to evaluate a product?

A. Marketing

B. Production

C. Selling

D. Standardisation

2019

A business sells luxury cars. The cars are stylish, high performance and include advanced safety features integrating leading edge technology.

(b) Explain the interdependence between marketing and finance for this business. 4 marks

2022

17 A florist purchases flowers to create flower arrangements. What type of market does the florist operate in?

A. Consumer

B. Industrial

C. Mass

D. Resource

Question 24 (9 marks) A business wishes to introduce new products into the market.

c) Why should this business adopt a marketing approach instead of a selling approach 4 marks

2024

Question 23 (10 marks) A piano teaching business which guarantees highly qualified and experienced teachers is rapidly expanding across all states of Australia.

(a) Outline how marketing of this business relies on an effective human resources department. 2 marks

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