What marketing is — and what it is for

Marketing is the management process of identifying, anticipating and satisfying customer requirements profitably. It is far wider than advertising.

• Market orientation (outward-looking) — start with customer research, then design the product. Lower risk of failure; needs constant, costly research.
• Product orientation (inward-looking) — start with the product or technology and find buyers later. Can create breakthrough products (pharmaceuticals, Dyson) but risks making something nobody wants.

Marketing objectives must support corporate objectives and be SMART. Typical ones: increase sales volume/value, grow market share, improve brand awareness or brand loyalty, enter a new segment or market, improve customer retention.

Exam edge: a marketing objective such as "grow market share by 3 percentage points within 18 months" is measurable and time-bound. "Be the best brand" is not an objective.

Market size, market share and market growth

Watch the units: market share by volume (units) and by value (£) can differ sharply. A premium brand can have a small volume share but a large value share.

Your turn — market size

Your turn — market share

Primary and secondary research

Primary (field) research — new data collected first-hand for this purpose: questionnaires, interviews, focus groups, observation, test marketing, EPOS/loyalty-card data.

• + up to date, specific to the problem, confidential to the firm. − expensive, slow, risk of bias in question wording.

Secondary (desk) research — data that already exists: government statistics (ONS), market intelligence reports (Mintel), trade press, competitor accounts, internal sales records.

• + cheap, quick, good for market size and trends. − may be out of date, not specific to the firm, and available to rivals too.

Quantitative data answers how many and can be analysed statistically; qualitative data answers why — motivations, attitudes — and gives depth, but is subjective and hard to generalise.

Sampling methods and reliability

A sample is the group actually surveyed; the population is everyone the business wants to draw conclusions about.

• Random sampling — everyone has an equal chance of selection. Free from bias, but can miss key groups and needs a full list of the population.
• Stratified sampling — the population is split into strata (e.g. age bands) and sampled in proportion to their share of the population. Representative but complex.
• Quota sampling — interviewers fill set quotas of each group. Cheap and fast, but selection within the quota is not random, so bias creeps in.
• Cluster sampling — sample whole groups (e.g. three towns). Cheap; risk that the cluster is unrepresentative.
• Convenience sampling — whoever is available. Cheapest; least reliable.

Key judgement: a larger, more representative sample gives more reliable results and a smaller margin of error — but costs more and takes longer. The right sample size depends on the value of the decision being taken.

Quick check

Sort the research

Tap a source of data, then tap the correct category.

Segmentation, targeting and positioning

Segmentation splits a market into groups of buyers with similar needs:

• Demographic — age, gender, income, family size, social class.
• Geographic — region, urban/rural, climate.
• Psychographic — lifestyle, values, personality.
• Behavioural — usage rate, loyalty, benefits sought, occasion.

Targeting chooses which segment(s) to serve: mass marketing (undifferentiated — high volume, low margin, big economies of scale) or niche marketing (small segment — higher margins, strong loyalty, but vulnerable if a big rival enters or demand shifts).

Positioning is the place the brand occupies in the customer's mind relative to rivals — often mapped on a perceptual map (e.g. price vs quality). A clear USP (unique selling point) gives a defensible position and supports a price premium.

Quick check

Your turn — market growth

Interpreting research — and its limits

• Correlation is not causation. Ice-cream sales and sunburn rise together; neither causes the other.
• Sampling bias: online surveys under-represent older and poorer consumers.
• Response bias: people say they will pay more for ethical products than they actually do at the till.
• Data ages fast in dynamic markets such as fashion and technology.
• Big data and digital analytics now give continuous, cheap behavioural data — but raise GDPR and privacy issues.

Evaluation line worth learning: market research reduces risk; it does not remove it. The value of the research depends on the sample, the method, how current the data is, and the cost relative to the size of the decision.

Match the term to its definition

Tap a card on the left, then its partner on the right.

Quick check

Market mapping and competitor analysis

A market map (perceptual map) plots rival brands on two variables customers care about — price and quality, traditional and modern, luxury and basic.

• Gaps on the map may signal an unmet need — or a segment nobody wants. A gap is only an opportunity if there is demand and the firm has the competence to fill it.
• Competitor analysis examines rivals' pricing, product range, promotion and market share to anticipate their response.

The ethics and law of market research

• GDPR governs how personal data is collected, stored and used: consent must be informed, data must be secure and used only for the stated purpose.
• Loaded questions ("Don't you agree our service is excellent?") produce biased data that is worse than useless — it misleads the decision.
• Big data from loyalty cards and browsing behaviour is enormously powerful but raises privacy concerns and reputational risk if customers feel surveilled.

Your turn — stratified sampling

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