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IB Business and Management Marketing 4.1 The Role of Marketing

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© IB Business and Management .com IB Business and Management T he IB Diploma Business and Management course delivered IN STYLE , ONLINE .

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z © marketing Topic 4

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z © The role of marketing 4.1

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z © The management process through which goods & services move from concept to customer . As a practice, it consists in coordination of four elements : Determination of its price Selection of a distribution channel to reach the customer’s place Development & implementation of a promotion al strategy What is marketing ? Identification, selection, & development of a product

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z © The market A place or a process where customers & suppliers trade for a good or service The market for smartphones includes all of the customers looking to purchase a smartphone & all the suppliers wishing to sell their smartphone product 2010: 1.6 billion cell phone units sold ↑ 32% from 2009 27% were smartphones ↑ 74% from 2009 Estimated value of smart phone market in 2014: us$150 billion

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z © Market: size , growth & share The total level of sale s of all producers within a market measured in two ways: Volume of sales (units sold) Value of goods sold (revenue) assess whether market is worth entering Firms can calculate their own market share Growth or decline in market can be identified Why Important?

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z Market: size , growth & share The percentage change in the total size of a market (sales or value) over a period of time © example: Q2/2010 = 63million Q2/2011 = 110 million An increase of 47 million units Increase (decrease) original X 100 47 million 63 million X 100 = ↑ 74.6% Pace of growth (or decline) will depend on: Economic growth Changes in consumer incomes Development of new markets Changes in consumer tastes Technological change (product innovation) Market saturation

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z © Competition for market share

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z © Market: size , growth & share The firms sales (volume or value) as a percentage of total sales in a market Firm’s sales Total market sales X 100 31 million 120 million X 100 = 25.8% 31 million example: Samsung sales = 31 million Total market sales = 120 million Often the best way to measure the effectiveness of a firm’s marketing strategy against that of its competitors. If market share has been increasing, then the marketing of its product has been more successful than most of its competitors.

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z © Thinking 1. Explain the difference between ‘market size’ & ‘market growth’. 2. Explain why it is important to a car manufacturer selling to china that the car market is growing rapidly. 3. Explain two advantages gm might enjoy having a larger market share in china than its rivals such as vw .

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z © Market: size , growth & share Defining markets can be problematic Market for: Cell phones? Smartphones? android ™ phones? Defining market share can be problematic Great market share by volume Low price & very high unit sales Great market share by value Premium price & high value of sales Very important to understand that a firm’s market share can fall even though its sales are rising Explain how!!

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