satisfying customer needs

3.1 The Role of Marketing

Definition (Cambridge)

Marketing is the process of identifying, anticipating and satisfying the needs and wants of customers profitably. It creates value for both the customer and the business.

Why Satisfying Customer Needs Is Crucial

• Builds customer loyalty and long‑term relationships → repeat purchases.
• Generates positive word‑of‑mouth and strengthens brand reputation.
• Allows a business to charge a premium when value is perceived.
• Provides a competitive advantage in the marketplace.
• Supports long‑term profitability and growth.
• Requires compliance with legal and ethical standards (e.g., truthful advertising, consumer‑protection laws).

Market Changes and Business Responses

Markets are never static. The main drivers of change are:

1. Changing consumer preferences – e.g., rise of health‑conscious shoppers → reformulate products to lower sugar or add “free‑from” labels.
2. New competitors or substitutes – e.g., a start‑up offering a cheaper streaming service forces existing providers to improve value or lower prices.
3. Technological advances – e.g., mobile‑payment apps create new distribution channels and enable personalised digital promotion.

Businesses respond by adapting the marketing mix, re‑segmenting the market, or innovating new products/services.

Niche vs. Mass Marketing

Example: A boutique sneaker brand that sells limited‑edition, eco‑friendly shoes (niche) vs. a global soft‑drink company that sells the same product worldwide (mass).

Market Segmentation

Segmentation helps a business identify the most attractive target market(s) and tailor the marketing mix.

Justify a segmentation choice (checklist)

• Is the segment large enough to be profitable?
• Is it reachable through existing distribution and communication channels?
• Does the segment have distinct needs that differ from other groups?
• Can the business serve the segment better than competitors?

3.2 Market Research

Purpose

To collect reliable information that guides decisions on product development, pricing, place and promotion.

Types of Research

• Primary research – data collected first‑hand for the specific problem.
  • Questionnaires (online or paper)
  • Interviews (face‑to‑face or telephone)
  • Focus groups
  • Observations (in‑store, online tracking)
• Secondary research – existing data not collected by the business.
  • Company records, sales data
  • Industry reports, market‑trend publications
  • Government statistics, trade association data
  • Online databases (e.g., Statista)

Sampling Considerations

• Sample size – larger samples usually increase reliability but cost more.
• Representativeness – the sample must reflect the characteristics of the target market (age, gender, location, etc.).
• Sampling method – random, stratified, convenience; each has strengths and weaknesses.

Strengths & Limitations of Common Methods

Mini‑Case: “FreshFit” Sports Drink

FreshFit wants to launch a low‑calorie electrolyte drink for university students.

1. Primary research: A focus group of 12 students discusses flavour preferences and price expectations.
2. Secondary research: The company purchases an industry report showing a 15 % annual growth in low‑calorie beverages.
3. Sampling note: The focus group is purposive (selected for relevance) while the secondary data covers the whole market, providing both depth and breadth.

Findings: students prefer citrus flavours and would pay up to £1.20 for a 500 ml bottle. FreshFit uses this information to shape the product, set the price and choose campus vending machines as the main distribution channel.

3.3 The Marketing Mix – The 4 Ps

Product

• Features, quality, branding, packaging, labelling.
• Product life‑cycle (PLC) stages: Introduction, Growth, Maturity, Decline.
• Extension strategies:
  • Product‑line extension – adding new flavours or sizes.
  • Product‑mix extension – introducing a related product (e.g., a sports‑drink powder).
  • Re‑branding – changing the name/logo to refresh the image.

Price

• Pricing objectives: profit‑maximising, sales‑maximising, market‑share, status‑quo.
• Factors influencing price:
  • Costs (fixed & variable)
  • Customer perceived value
  • Competitor prices
  • Market conditions (elastic vs. inelastic demand)
• Pricing strategies:
  • Cost‑plus pricing – add a markup to total cost.
  • Penetration pricing – low initial price to gain market share.
  • Skimming – high initial price for early adopters.
  • Psychological pricing – e.g., £0.99 instead of £1.00.
  • Discounts & promotional offers – coupons, bulk‑buy discounts.
• Price elasticity: if demand is elastic, a small price change causes a large change in quantity demanded; if inelastic, quantity is less sensitive.

Place (Distribution)

• Channels: direct (online store, own shop) vs. indirect (wholesalers, retailers).
• Distribution intensity:
  • Intensive – many outlets (e.g., soft drinks).
  • Selectively intensive – chosen retailers (e.g., premium cosmetics).
  • Exclusive – single retailer or franchise (e.g., luxury watches).
• Logistics considerations: warehousing, transport, inventory management.

Promotion

• Traditional tools: advertising, sales promotion, personal selling, public relations.
• Digital/e‑commerce tools: social media, email marketing, influencer partnerships, SEO, online advertising, mobile apps.
• Legal & ethical issues:
  • Advertising must be truthful, not misleading.
  • Respect for privacy – obtain consent before using personal data.
  • Compliance with consumer‑protection legislation (e.g., price‑labelling, distance‑selling rules).

How the Functions Inter‑relate – Expanded Example

Scenario: “EcoBite” wants to launch a low‑sugar, gluten‑free granola bar for secondary‑school students.

1. Market research: Survey of 300 pupils shows 65 % want a snack ≤ £0.80, 40 % prefer eco‑friendly packaging.
2. Product development: Granola bar with 30 % less sugar, biodegradable wrapper – positioned in the “Health‑conscious” segment (psychographic).
3. Pricing: Cost‑plus calculation gives £0.75; price‑skimming not suitable, so a penetration price of £0.79 is set.
4. Place: Distributed through school canteens (exclusive channel) and a local health‑food shop (selective).
5. Promotion: Posters in school corridors, a short TikTok video by a student influencer, and a launch‑day discount voucher.
6. Feedback loop: After‑sales questionnaire and sales data are used to tweak flavour and consider a larger pack size (product‑line extension).

Suggested Diagram

Quick Revision Checklist

• State the Cambridge definition of marketing in your own words.
• List and briefly explain the five core functions of marketing.
• Identify three drivers of market change and give a real‑world example for each.
• Compare niche and mass marketing – give one advantage and one limitation for each.
• Complete the market‑segmentation table and justify why a chosen segment is appropriate for a product.
• Distinguish primary from secondary research; name two methods of each and a sampling issue.
• Describe the four stages of the product life‑cycle and suggest an appropriate extension strategy for the maturity stage.
• Explain price elasticity and give an example of a product with elastic demand.
• Identify two digital promotion tools and discuss one legal/ethical consideration for each.
• Summarise how feedback after purchase can lead to changes in any of the 4 Ps.