Marketing
Marketing tests how a business identifies customer needs, chooses a target segment and coordinates the marketing mix. SL case questions reward justified decisions, not lists of the 4Ps.
Core rules and concepts
- Market research: primary research collects new data; secondary research uses existing data. Qualitative research explores reasons; quantitative research measures. Samples must be large enough and representative to reduce bias.
- Segmentation divides a market by demographic, geographic, psychographic or behavioural factors. Targeting selects a segment; positioning creates a distinct place in customers' minds.
- Marketing mix: product, price, place and promotion, extended to people, process and physical evidence for services.
- Product portfolio: the product life cycle shows development, introduction, growth, maturity and decline. The Boston matrix classifies products by market growth and market share.
- Pricing: cost-plus, penetration, skimming, psychological, predatory and dynamic pricing. Each has different effects on contribution and brand image.
- Promotion and distribution must fit the target segment; e-commerce can widen reach but changes cost structures.
Worked example
A gym's membership is falling. Primary questionnaires show that students are price-sensitive, while existing professional members value class quality and convenience. Rather than cutting all prices, the gym could segment the market: offer an off-peak student rate to fill spare capacity, while keeping standard prices for professionals. Promotion through campus social media targets students; improved class scheduling addresses the professional segment. The decision should be judged by membership, retention and contribution, not just the number of new sign-ups.
Traps that cost marks
Market research reduces uncertainty but cannot guarantee success. A biased sample undermines conclusions. Do not confuse penetration pricing (low initial price to build share) with skimming (high initial price to recover development costs). The product life cycle is a model, not a forecast. The 4Ps must be consistent with each other and with the chosen segment.