Marketing and Operations
What you must understand
Marketing begins with market research - primary (surveys, interviews, observation) versus secondary (existing data), and qualitative versus quantitative. Segmentation follows (demographic, geographic, psychographic, behavioural), then targeting and positioning. The marketing mix is the classic 4Ps - Product, Price, Place, Promotion - extended to 7Ps with People, Process and Physical evidence for services. Know pricing strategies: cost-plus, penetration, skimming, competitive, psychological. Understand the product life cycle (development, introduction, growth, maturity, decline) and the Boston Matrix (stars, cash cows, question marks, dogs).
Operations covers production methods (job, batch, mass/flow), lean production (just-in-time, kaizen, cell production), quality (quality control versus quality assurance), capacity utilisation, stock control and supply chain management. Understand trade-offs: holding less stock reduces storage cost but raises stockout risk.
Traps examiners set
- Confusing market share (percentage of total market sales) with market growth (change in market size).
- Calling a cash cow a failure - it funds the rest of the portfolio.
- Mixing quality control (inspecting output) with quality assurance (building quality into the process).
- Recommending penetration pricing for a luxury brand.
- Ignoring that JIT depends on reliable suppliers.
Worked example / rule of thumb
A firm has sales of £400,000 in a market worth £2,000,000. Market share = 400,000 ÷ 2,000,000 × 100 = 20%. Rule of thumb: share is a fraction of the market, growth is a change over time - check which the question asks.
Key terms to use precisely
Segmentation, targeting, positioning, USP, marketing mix, product life cycle, Boston Matrix, lean production, kaizen, capacity utilisation.