Marketing and commercial function
Marketing questions test whether you can move from market analysis to a concrete marketing plan. Typical tasks: segment a market, choose a positioning, set a price with a stated method, and justify a distribution and communication mix for a small Catalan firm.
Analysis and segmentation
- A market is the set of actual and potential buyers; demand is measured in volume and value; market share = firm sales / total market sales.
- Segmentation criteria: demographic, geographic, psychographic, behavioural. Good segments are measurable, accessible, substantial and differentiable.
- Positioning is the place a brand occupies in the consumer's mind relative to competitors, expressed on attributes the target values.
- Product life cycle: introduction, growth, maturity, decline. The mix changes with the stage - skimming at introduction, promotion-heavy growth, differentiation in maturity.
The marketing mix
- Product: attributes, brand, packaging, line breadth and depth; differentiation versus standardisation.
- Price: cost-plus (cost × (1 + mark-up)), target return, penetration (low launch price), skimming (high launch price), psychological pricing, competitive parity, price discrimination.
- Place: direct channel (producer to consumer) versus indirect (agents, wholesalers, retailers); channel length = number of intermediaries.
- Promotion: advertising, sales promotion, personal selling, public relations, digital and inbound marketing.
Worked example
Price falls from €10 to €9 and quantity rises from 1,000 to 1,200 units. Elasticity = (%ΔQ)/(%ΔP) = (+20%)/(−10%) = −2, so demand is elastic (|E| > 1). Revenue moves from €10,000 to €10,800, so the price cut raises revenue. That answers the "should we lower the price?" question with evidence; writing only "elastic" without the revenue consequence loses the applied mark.
Traps
- Mark-up on cost confused with margin on price: a 25% mark-up on €80 gives €100, but a 25% margin on €100 implies a €75 cost - the bases differ.
- Reporting elasticity as 2 and calling demand inelastic.
- Counting the producer as a channel level.
- Treating promotion as synonymous with advertising.
- Recommending a mix without linking each element to the chosen segment.