Cambridge International Diploma in Business
at Advanced Level
Marketing
Advanced Version
Select Knowledge wishes to thank Nigel Proctor
who compiled this module from Select Knowledge learning materials
Copy Editor: Jane Read Proof Reader: Jane Read Typesetter: Mark Tamblyn
Production Project Manager: Mark Tamblyn
This module has been created in partnership with
The University of Cambridge International Examinations and endorsed by University of Cambridge International Examinations for use with the
Cambridge International Diplomas in Business.
Select Knowledge website: www.selectknowledge.com
The University of Cambridge International Examinations website: www.cie.org.uk
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Contents
Introduction
v
1
A marketing orientation
3
Organisation of the marketing sub-functions 5
Negotiating with external agencies and suppliers 12
Summary 13
Customer-led organisations 14
The marketing mix – an overview 20
Who are the customers and why do they buy? 23
Customers 24
Managing the customer 29
2
Researching the market
43
Where do you start? 46
Desk research 47 Field research 47 Market size 53 Summary 53 Sources of data 54 Profiling 55 Budgetry controls 58 Sources of suppliers 60 Summary 64 Planning research 65 Summary 70
3
Customer behaviour
73
Dividing markets up into customer groups 81
Customers, consumers and end-users 85
What influences buying behaviour? 89
A spotlight on customers 91
Different customer groups seek different benefits 92
The future of marketing 93
Strategic challenges 100
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Page iv Contents
4
Planning and organising marketing activities
105
How to approach planning 106
Preparing a marketing plan 108
The planning cycle 114
Factors influencing the successful outcome of a plan 116
Implementing and monitoring the plan 120
Summary 122
Markets and market segmentation 123
Branding 126
Branding strategy 133
Ansoff’s matrix 135
Porter’s five forces model 137
5
The marketing mix
143
Simplicity or complexity? 144
Blending the ingredients 147
Focusing on the total offer 148
The extended marketing mix 149
Product (or service) 150
Differencies between product and service benefits 156
Product portfolio decisions 160
The new product development (NPD) process 164
Price 169 Pricing strategy 170 Pricing structures 175 Promotion 176 Promotion strategy 178 Advertising strategy 185 Direct marketing 191 Place 195 Distribution strategy 196
Supply chain management 198
International distribution channels 199
Strategy in services markets 200
Summary 203
The product life cycle (PLC) 204
The product life cycle (PLC) and new product development (NPD) 208
Introduction
The aim of this workbook is to take the student step by step through the assessment objectives and competence criteria for this particular module.
The sections correspond to each of the objectives wherever possible; however, in some situations a number of competence criteria are dealt with in a logical manner linking topics together to provide a broader understanding. The result of this is that some criteria are not in the strict order provided by the syllabus. This may create the impression that some of the competence criteria have been neglected. This is not the case and working through the entire workbook will ensure that the entire range of competence criteria is covered. Students should work through the workbook in the order laid out attempting all of the tasks provided to test their understanding and knowledge.
This workbook, whilst covering the competence criteria, should not be seen as the only source of study for this module or the perfect text for this work. It provides a good source of information which provides the opportunity to develop the skills and knowledge of the individual in order to better attempt the assessment that follows at the end of the course.
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A marketing orientation
The marketing concept implies that all the activities of the company should be customer-led. In other words, each department within an organisation should be aware of customer needs, and should base its activities around meeting those needs at a profit. In practice, though, many organisations carry out the marketing function through a distinct department. This relegates marketing to a tactical function only, rather than defining it as the engine which drives the company strategy.
The organisation's mission and value statement defines what business the company is in and the overall direction it aims to take. From this statement the corporate aims
and objectives are set and the business plan developed. The organisation has set out
where it wants to go and how it will get there. In a truly customer-orientated company, the business will be defined in terms of the benefits customers obtain: for example, a bus company would define itself as being in the transportation business rather than in the bus business, since transportation is what the customers are buying.
Marketing's tactical aims and objectives are developed from the corporate aims and objectives, as are those of the other functions within the organisation. Each is setting off in the same direction. Each will scan the internal and external environment, gathering information from within the organisation and outside. At this point the sharing of information is essential in order that all internal plans are aligned and coordinated.
However, it is not as easy in practice to coordinate the activities of all functions because they may have different priorities – cost versus volume, for example. Production departments will prefer the economies of scale they can get when producing standardised products in high volume, whereas the salespeople may prefer a wide range of products, each produced in small batches, so that specific customer needs can be met. Research and Development may not be developing products fast enough or feel able to produce them when Marketing believes the time is right for the launch.
The table below outlines some of the broad areas that may cause conflict between marketing and other functions within the organisation. The conflicts will be resolved through discussion and referral back to the overall corporate aims and objectives.
Page 4 Marketing © Select Knowledge
Examples of lack of coordination between
the major organisational functions
Marketing priority Function Function priority
Individual customer Finance/Accounts Standard terms and
discounts and pricing conditions to reduce
administration costs
Customer satisfaction/ Sales Making sales – may be
building loyalty looking short-term rather
than long-term
Customised orders to Production Standardisation and long runs
satisfy specific needs to minimise changeover time
and maintenance
Broad product portfolio, Finance/Purchasing Standardisation
non-standard products and parts
Flexibility in pricing, Finance/Accounts Fixed pricing – cost
ability to offer discounts plus to ensure margins
and budgets – can move are maintained
money from advertising to promotions if campaign is not working
Have you experienced such lack of coordination in your organisation?
Make brief notes below that outline the problem, and give your opinion of what caused this lack of coordination.
Discuss this with your colleagues to get more information if you feel you do not know enough about it.
