3.5 Marketing

• Primary research is collected first-hand, such as surveys and focus groups. Secondary research already exists, such as government data and trade reports.
• Qualitative data is opinions and reasons. Quantitative data is numbers.
• Market segmentation splits customers into groups with shared characteristics. A niche market is a small, specialised segment.
• A market map shows how competing products are positioned on two characteristics, such as price and quality.
• The marketing mix is product, price, promotion and place. The four parts should fit together.
• The product life cycle runs introduction, growth, maturity, decline.
• Pricing methods include penetration, price skimming, cost-plus, competitive and loss leader.
• Promotion is how a business tells customers about a product, such as advertising, special offers and social media. Place is how products reach customers, such as shops, a website or a retailer.

Primary research

New information a business collects itself, such as a customer survey.

Secondary research

Existing information collected by someone else, such as a government report.

Market segmentation

Dividing customers into groups with shared characteristics.

USP

Unique selling point: what makes a product different from rivals.

Penetration pricing

A low price at launch to win customers quickly.

Price skimming

A high price at launch, then lowered over time.

Loss leader

A product sold below cost to attract customers into the store.

Product life cycle

The stages a product goes through: introduction, growth, maturity, decline.

• Mixing up penetration pricing (low start) and price skimming (high start).
• Treating the four Ps as separate. A premium product sold cheaply through a discount store does not fit.
• Saying a market map forecasts sales. It shows how products are positioned.

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