HSC BUSINESS STUDIES

Summary notes: HSC Business Studies

HSC Topic 2: Marketing

Unit 2.1 – Role of Marketing

Strategic role of operations management

 The strategic role of marketing is to implement a marketing plan which sets out a series of
actions or strategies the business follows to attain higher sales.
 Additionally, marketing focuses in making the customer the central focus in its marketing
plan, adjusting and developing it based on their wants and needs. This creates and maintains
a consumer base for the business.

Interdependence with other key business functions

 Interdependence refers to the mutual dependence of a business’ key functions in order to
achieve their long term goals.
 Operations manufacture the product, transforming the product from raw materials and
resources into finished goods or products.
 Marketing aims to meet the needs and wants of a consumer, looking at all aspects and
buying and selling, then developing marketing strategies to maximise their sales. Therefore
through market research the business can gather the needs and wants of their target market
and alter their product or service to suit them.
 Finance records and summarises financial transactions through reports such as balance
sheets and budgets, and generally manage the financial side of businesses. The finance
function is in charge with designating funds to certain business activities.

 Human resources ensure that the right people are employed by the business, as well as
ensuring that the employees are adequately trained to fit for purpose. HR plays an
important role as the efficiency and productivity which the business performs its activities is
significantly based on staff.

Production, selling and marketing approaches

 The production approach lasted from the 1820s to 1920s and this was the approach where
businesses primarily focussed on the production of goods and services. By using this
approach the business does not take any consideration to marketing, due to demand being
higher than supply. Businesses therefore focused on strategies that would maximise mass
production.
 As supply started to catch up with demand, the sales approach was developed from the
1920s to 1960s. The sales approach emphasised on the selling of the product due to this
increased competition. This involved a greater use of marketing in terms of promotion and
packaging in order to convince customers to purchase their products, though the needs of
customers were still neglected.
 Businesses started focussing on the needs of customers after 1960s, and this phase is known
as the marketing approach. From this, developed a marketing concept that was based on
four principles, being customer oriented, supported by integrating marketing strategies,
aimed at satisfying customers and integrating a business plan to achieve business goals.
Therefore during this stage there was more of a focus on satisfying customer needs in
marketing.
 As time passed, there has been growing concern for:
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o Corporate Social Responsibility - Taking in consideration how the business’ actions

may affect society and the environment.
o Customer orientation - Collecting information from customers and basing marketing
decisions and practices on customer wants and interests.
o Relationship marketing –The development of long-term and cost-effective
relationships with individual customers.
 All these factors can influence customer satisfaction and retention, which can result in an
increase in sales and thus, profit.

Types of markets
 A market is a group of individuals who seek to purchase a product.
 Resource markets are the group that engage in all forms of primary production. This includes
factors of production such as agriculture and mining.
 Industrial markets include industries and businesses which purchase products to use in their
production for their daily operations.
 Intermediate markets are the wholesalers and retailers who purchased the finished good in
hope to resell them to make a profit.
 Consumer markets are members of the household who plan to consume their product they
purchase, instead of trying to make profit off them.
 The businesses that target consumer markets can be divided into mass markets (where the
business markets a single product indiscriminately) and niche markets (marketing a product
to a narrowly selected target market segment).

Unit 2.2 – Influence of Marketing

Factors influencing customer choice

 There are many factors that influence customer choice, though these factors are designated
into four groups, psychological, sociocultural, and economic and government influences.
 Psychological factors are influences within an individual that affect their buying behaviour.
By understanding psychological factors businesses can adjust their product’s features to
reflect more favourably to the customer:
o Perception – How customers interpret information given from a product to create
meaning.
o Motives – The reason for customers to purchase a product. Some motives may be
entertainment and cleanliness.
o Attitudes – A customer’s overall feeling to a product.
o Personality –The behaviours and characteristics that the customer possesses.
 Sociocultural influences are the external forces exerted by the people surrounding the
consumer, and include:
o Social class – A person’s rank in society based on their education, income and
occupation.
o Culture – The learned values, beliefs, behaviours and traditions held by certain
groups in society.
o Peer groups – A group of people a customer associates themselves with, adopting
their attitudes, values and beliefs.
 Economic influences have an impact on the business as they influence a business’ capacity to
compete and a consumer’s willingness to spend. This consists of:
o Boom – A period of low unemployment and increase income, which results in the
increased willingness to spend.
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o Recession – Where unemployment is in high levels and income falls, which results in
a decreased willingness to spend.
 Government factors influence business as they implement policies and regulations to
regulate economic activity, which may affect the business in terms on the way they conduct
themselves. Additionally, governments may enact regulations and regulatory bodies to
monitor certain marketing activities to ensure that businesses engage in fair competition.

Consumer law
 Consumer laws are the laws which protect consumers in terms of their purchasing decisions.
 There are two main consumer laws in Australia:
o The Australian Consumer Law 2011 (Cwth), which combined 17 existing consumer
laws.
o Competition and Consumer Act 2010 (Cwth) which is an act that has the purpose to
protect customers from undesirable practices and to regulate certain trade practices
that can restrict competition, replacing the Trades Practices Act 1974.
 Regulatory bodies such as the Australian Competition and Consumer Commission (ACCC) has
the role of monitoring marketing activities to ensure that businesses follow the relevant laws
that govern them.
 Deceptive and misleading advertising is the influencing of consumers through advertising
while giving a false impression of a product. This is used by a business in an attempt to
increase sales, though if caught can receive fines. There are two main techniques associated
with deceptive and misleading advertising, including:
o Bait and switch advertising – Advertising a product of low stock at a reduced level, in
order to attract customers into the store. The motive of businesses that use this is to
direct customers to items of higher prices.
o Dishonest advertising – The use of advertisements that may claim a product does
something which it doesn’t in an attempt to create a false impression of the quality
and nature of it.
 Price discrimination is setting different prices for a product in separate markets. This is
restricted due to its nature to give one business an unfair advantage over its competitors.
 Implied conditions are the unspoken and unwritten terms of the contract, and ensure that
products must be of acceptable quality. Therefore the product must fit the purpose that it is
supposed to serve, and suggesting that a product has a specific characteristic that it does not
have is a breach of law.
 Warranties are the obligations of a business to refund or replace a product if it is faulty, do
not match the description, or fail to do what they are supposed to do. They play an
important role in influences customers due to providing the assurance that the product will
perform satisfactorily for its designated timeframe.

Ethical Influences
 Ethics are the values which consumers consider right and wrong in terms on how the
business conducts its practices.
 Advertising is a paid message communicated through a mass medium.
 The truth and accuracy of advertising can be altered by a business by concealing facts,
exaggerating claims, making vague statements and invading privacy. Marketers may try
exploiting this to give a false impression and therefore gain more sales. Marketers may
attempt this in order to try allowing customers to interpret the product in a different
meaning to what it is.
 Due to different values of consumers some may be offended at certain advertisements while
others find it fine. Marketers need to ensure that they do not cross the line of good taste or
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they may be shunned by the public. The business needs to develop a good taste in
advertising if they want to portray a brand image of luxury or of high quality.
 In terms of products that damage health, because of their effects, there are certain limits to
the amount of marketing a business can achieve with that product.
 The government has implemented legislation to restrict the level of marketing a business
can achieve if they were to produce these kinds of products, such as the recent plan
packaging on cigarette packages.
 Due to increased competition there may be a temptation for businesses to engage in unfair
practices, exploiting customers. This is both unlawful and unethical, and once caught; the
business will receive fines and will lose consumer confidence. By engaging in fair
competition customers receive the benefit of having a greater choice of products at a lower
price, as well as creating an environment where every business operates in the same set of
defined standards and rules.
 Sugging is selling under the guise of a survey is an unethical marketing practice attempting to
make a consumer purchase a product. Although this strategy is not illegal, it raises issues on
privacy and deception, and a business’ image may be damaged if caught.

Unit 2.3 – Processes of Marketing

Situational Analysis
 The situational analysis shows the business’ present state in its industry and gives a clear
picture on where the business is heading. The two main features of a situational analysis are
a SWOT analysis and the product life cycle.
 A SWOT Analysis identifies the internal strengths and weaknesses of the business, as well as
their external threats and opportunities. This tool evaluates the business’ performance
against their competitors, as well as aspects of the business they can improve upon.
 The product life cycle is a graphical interpretation that shows the four stages a business goes
through, introduction, growth, maturity and decline. Depending on the stage, the business
will adopt different marketing strategies.
o During the introduction stage, sales grow quite slowly and there are negative profits
due to heavy promotion. In terms of product, the business establishes their brand
and reliability, pricing tends to be lower than competitor pricing in order to gain
market foothold, heavy promotion is used to communicate and educate potential
buyers, and distribution tends to be selective, allowing consumers to gradually form
an acceptance of the product.
o During the growth stage heavy promotion
prior has allowed for customer acceptance,
leading to an increase of sales, market share,
and profits. Quality is maintained and
improvements and support services can be
made, price can be slightly increased or
maintained due to increase demand and
market share, the business can promote its product to a wider audience, and
distribution channels are increased due to increased popularity.
o During the maturity stage sales level off and the market becomes saturated. Due to
this, the business will attempt to differentiate product features and packaging from
their competitors, price may need to be adjusted downwards to maintain market
share, occasional promotion is needed to retain customers, and distribution
incentives may be implemented.
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o During the decline stage sales are falling and the business needs to consider product
deletion. The business can attempt to implement some improvements, or sell the
product to another business. In this case, the price is heavily discounted to sell
remaining stock, promotion is discontinued and distribution channels are heavily
reduced and only offered to the loyal segment of the market.

Market research
 Market research is the process of systematically collecting, recording and analysing
information that is needed for decision making in terms of marketing. By doing this the
business aims to minimise the risk of market failure through the analysis of the needs and
wants of consumers.
 Firstly, the business needs to determine information needs. The marketing department
needs to work out what information is needed to make a decision, and ensure that the
information is relevant. This involves finding out what customers value in products of the
business’ nature and the reasoning for their preferences. This information can be used to
make decisions on the strategies the business implements which assist in the achieving of
their marketing objectives.
 There are two types of data that the business can collect.
 Primary data are the facts and figures collected by the business prior or recently. Primary
data has the advantage of being tailored to solving their issue, though can be time
consuming and expensive. Primary data can be obtained through:
o Surveying – Gathering data through interviewing people. This can be achieved
through focus groups and questionnaires. Surveying shows firsthand information
providing details of customer opinions.
o Observation – Where the behaviours of the customers are systematically monitored.
This method is used to identify the spending habits of the customer and their
preference for one product over another.
o Experimenting – Gathering data by altering factors under tightly controlled
conditions. This allows the business to evaluate whether changing a factor would
affect the behaviour of what is being studied.
 Secondary data are the facts and figures that have already been collected by other sources
for other purposes. There are two types of secondary data, including:
o Internal data – Information already collected by the business, such as customer
feedback and research reports, which was collected for general statistics or for
another purpose.
o External data – Data published outside the business, including magazines, internet
sources and ABS.
 The business then has to analyse and interpret the data. After acquiring data the business
can make conclusions about the trends and patterns in customer spending. The business can
achieve this through tabulating data allowing for comparisons to be made between various
factors. The business then uses this judgement to assist them in making important marketing
decisions which can significantly impact on the business’ success.

Establishing marketing objectives

 Marketing objectives are the realistic goals a business aims to achieve through the
implementation of their marketing plan, therefore giving the business direction on what
they want to achieve.
 The most common marketing objectives revolve around the increasing of sales and market
share. Generally, by increasing their market share the business increases its dominance in
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the market. Market share reflects upon the effectiveness of the business’ marketing
strategies and aiming to increase market share is a common objective.
 The business may also want to attempt to increase sales and their brand through expanding
the product mix. By doing so the business increases their potential to improve their profits in
the long term. Due to marketing being customer based, businesses will want to maximise
their customer service. Customer service assists in the retention of customers, giving
reasons for them to keep on purchasing the business’ products. Thus, by maximising this
aspect of marketing, the business can increase their sales.
Identifying target market
 A target market is a group of customers that the business intends to sell its product to. The
business need to find the appropriate target market to ensure that they can maximise
profitability by being able to better satisfy the needs and wants of that segment.
 Businesses can choose from 3 approaches when finding a target market:
o Mass Marketing – Seeking a large range of customers. The business develops a single
set of marketing strategies for the whole market.
o Market segmentation – The division of the total market into groups of people where
each group share one or more common characteristics. This allows the business to
design a marketing plan satisfying the wants and needs of a relatively uniform group.
o Niche Marketing – Marketing the business’ products to a narrowly selected target
market segment. Examples include Ferraris.

Developing marketing strategies

 Marketing strategies are actions undertaken by the business to achieve the business’
marketing objectives. These marketing strategies are called the marketing mix, and consist
of 4 types of market strategies, product, price, promotion and place/distribution.
 In terms of the product element, the business needs to determine the features of the
business’ product such as branding, packaging and product quality. The business uses a
combination of these features to satisfy the needs and wants of the consumer. The business
must develop strategies for the physical product as well as the additional features it brings
to attracts customers and improves customer retention.
 The price is the amount of money a customer is willing to offer in exchange for a product.
The business has the ability to choose a range of pricing methods and strategies to
implement for their product, and aim to select the correct price to keep competitive while
maintaining a steady profit of margin.
 The business promotes its product to inform, persuade and remind customers about its
products, and this is achieved through the promotion mix. Although promotion is known to
significantly increase sales, it can be very expensive. Businesses need to develop promotion
strategies where the potential benefit exceeds the costs.
 The Place/distribution element deals with how the business will get its product to the
customer, usually involving a number of intermediaries. The business also has the ability to
determine how widely the product will cover the market. Additionally, the business also
needs to confront distribution issues concerning transport, warehousing and inventory.

Implementation, monitoring and controlling

 Implementation is the process of putting the marketing strategies into operation.
 After implementation, the business must carefully monitor and control the progression of
the marketing plan in terms of its success.
 Monitoring is the checking and observing of the actual progress of the marketing plan.
Monitoring allows the business watch how its product performs against planned
performance.Controlling is the comparison of the planned performance against the actual
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performance of the business, taking corrective action if needed to ensure the business’
marketing objectives are achieved. There are various processes a business can take to
monitor and control a marketing plan, including developing a financial forecast, comparing
actual and planned results and then taking corrective action by revising marketing strategies.
 A financial forecast is an estimate of future financial position based upon anticipated
revenues and expenses generated by planned business activity. By developing a financial
forecast the business is in the best position to make judgements on how to allocate its
marketing resources, allowing them to determine the most appropriate course of action.
 To compare actual and planned results, the business uses three performance indictors to
measure the success of the marketing plan, and these include:
o Sales analysis – A sales analysis is used by the business to compare actual sales with
forecast sales to determine the effectiveness of the marketing strategy.
o Market share analysis – From undertaking a market share analysis, the business can
compare their market share and therefore evaluate their marketing strategies,
showing whether sales have increased, decreased or plateaued, and compare them
with their competitors.
o Marketing profitability analysis – A method where the business breaks down the
total marketing costs into specific marketing activities, allowing the marketing
manager to assess the effectiveness of each activity. Marketing profitability analyses
assist in the deciding how to best allocate marketing resources in the future.
 Once the business has calculated the performance indicators, they are now in the position to
assess which objectives are being met and which are not, and based on the information, the
business may choose to take corrective action and modify the marketing plan.
 The business needs to make changes in the marketing mix often due to operating in a
dynamic environment, and improvements can be made through improving the product and
its features, readjusting the price, changing the level of promotion depending on which
stage the product is in and deciding to expand distribution channels as the product success
increases.
 The business must continually introduce products if it wants to achieve long-term growth. As
products pass through the stages in the business life cycle, the business must ensure that
they continually develop products in order to stay competitive within the market.
 If a product gets to the point where it becomes out-dated and may produce negativity
towards the business’ brand, the business must consider product deletion in order to
maximise profitability.

Unit 2.4 – Marketing Strategies

Market Segmentation, product/service differentiation and positioning

 Market segmentation involved the dividing of the total market into segments, with the
manage choosing one of these segments to become the target market.
 There are different variables in which the business can segment the market into, including:
o Demographic – Dividing the total market according to particular features of the
population, such as age, gender, etc.
o Geographic – Dividing the total market according to its geographic locations.
o Psychographic – Dividing the total market according to personality characteristics
and lifestyles.
o Behavioural – Dividing the total market according to the customers’ knowledge and
attitude towards the benefits the product provides. An example is low fat milk,
catering for people who are trying to lose weight.
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 Product/service differentiation is the process of developing and promoting differences

between the business’ products and its competitors. Often in order to compete across the
market the business will need to differentiate its products from their competitors, and
better suit the needs of a particular segment or the market as a whole. By doing this, the
business has gains more control over the market, having the potential to achieve high sales,
market share and profit.
 The business can differentiate its product in many ways, including:
o Simple changes in packaging and labelling.
o Giving better value for money.
o Offering a high level of customer service.
o Taking concern to social, environmental and ethical issues
 Product/service positioning refers to the technique in which marketers try to create an
image or identity for a product compared with the image of competing products. The
business will aim to create an image that differentiates its product from others, trying to
develop images of prestige or extravagance.

Products – goods and/or services

 Products are goods or services that can be offered in exchange for the purpose of satisfying
a need or want.
 When a customer purchases a product, they purchase both the tangible and intangible
benefits the business provides, and this is referred to as total product concept.
 A brand is a name, term, symbol, design, or any combination of these which identifies a
specific product and distinguishes it from their competitors.
 Branding supports positioning, and provides many benefits includingallowingfor repeat dales
if the customer is satisfied with the product due to the business being recognisable,
promoting customer loyalty, as well as being able to launch a new product under a specific
brand name and customers being already familiar to it due to the brand.
 By developing a strong brand over competitors, the business acquires a large dominance
over market share and long-term brand loyalty, as seen from Coca Cola and Apple products.
 Packaging involves the development of a container to hold the product.
 This assists in the sale of products as it gets a customer’s attention, distinguishes its product
from others, and supports positioning efforts,creating images of how the business wants to
be perceived. All which can make a product more competitive.
 Labelling is the presentation of information on a product or its package, and businesses can
use labelling to their advantage if it shows positive traits, such as the “Product of Australia”
or “Heart Foundation Tick” label, which can attract customers.

Pricing including pricing methods

 Price is the amount of money a customer is willing to spend to purchase a product.
 Pricing methods give a business a basic indication on what they should be charging for their
products, and the three main pricing methods are:
o Cost-based: A pricing method where the cost of producing the product is calculated
then a margin of profit is added to allow for an adequate profit margin.
o Market-based: A pricing method where the business sets its prices according to the
level of supply and demand, whatever the market is prepared to pay.
o Competition-based: A pricing method where the price covers the cost of operating,
and then is compared to competitor prices. The business can then make their price,
below, equal, or above their competitors.
 After the business has implemented its preferred pricing method, the business then
introduced pricing strategies.Businesses are able to use multiple pricing strategies at once.
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Which pricing strategies the business uses depends on the business’ objectives, the external
environment and the nature of the products. Strategies include:
o Price skimming – Where the business charges the highest possible price for the
product during its introduction stage of the life cycle. Used to either give prestige or
status to the product, or to recoup losses from market research and development.
o Pricing penetration – Where the business charges the lowest price possible for a
product or service. This is done to achieve a large market share during its
introduction stage and discourage competitors from entering the market, though
the main disadvantage is that it may be difficult to raise prices after and retain
demand.
o Loss leader – Where the product is sold below or at cost price. This is used for
special promotions, though the business does this deliberately to get customers into
the store, so that they could buy other products as well.
o Price points – Selling products at certain, predetermined prices. This strategy makes
it easier for the customer to find the type of product they need, and encourages
them to trade up to a more expensive model.
 Price and quality interaction is initiated in terms on how the business sets its price. In
accordance to the price, customers may perceive products to be of a certain quality. For
example, if a product is of a low price the customer may view that product as being of low
quality, whereas if a business participates in premium pricing, charging a high price, the
business gives the perception of being prestigious and high quality.
 Because of this, some businesses may deliberately charge their prices higher, even if the
quality isn’t as good as its competitors, due to the assumptions they make. Additionally, if a
business were to dramatically reduce their prices from premium pricing, they may damage
their position in the market and reputation due to being inconsistent with their perceived
images.

Promotion
 Promotion describes the methods which the business uses to inform, persuade, and remind
a target market about its products, aiming to attract new customers and increase brand
loyalty, all leading increases in sales and market shares, and hence, profit.
 The promotion mix is the various methods a business uses in their promotional campaign,
and includes:
o Advertising – A paid, non-personal message communicated through a mass medium
such as television or newspapers. The advantage of advertising is that it provides the
business with the flexibility to reach an extremely large audience or focus on a small,
distinct segment, both varying in costs. However, advertising tends to be expensive.
o Personal selling and relationship marketing – The activities of a sales representative
directed to a customer in an attempt to make a sale. There are advantages to this,
including modifying the message to suit the customer’s circumstance, individualised
assistance to a customer, and the offering of after-sales customer service. The
business can also target the specific market segment it prominently sells its products
to.
o Relationship marketing – The development of long-term, cost-effective and strong
relationships with customers. This is achieved through creating incentives to
encourage repeat sales, and these benefits include reward schemes such as loyalty
cards.
o Sales promotions – The use of activities or materials as direct inducements to
customers. This is used to entice new customers, encourage trial purchases, and
increase sales to existing customers. Sales promotions are used to supplement and
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increase the effectiveness of other promotional activities, and include coupons,

samples and premiums.
o Publicity and Public relations – Publicity is any free news story about a business’
products. If the publicity is positive, then the product’s image is enhanced, its
features are highlighted, and reduces any negative image that may have been
created. Public relations are planned activities aimed at creating and maintaining
favourable relations between customers and the business.This can be achieved
through working with the media, making speeches on special occasions, or through
donating. By having a positive image in the media the business supports its overall
brand image.
 Customers are now more willing to purchase products if the message was communicated via
a respected and trusted channel.
 Opinion leaders are people who influence others; this can include celebrities and
sportspeople.
 Word of Mouth communication occurs when people influence others during conversations.
This has been further accelerated due to the significantly increased use of social media.

Place/distribution
 Place or distribution is the activities that the business initiates to ensure that the product
reaches the customer.
 Distribution channels are the routes taken by the business to get the product to the
customer, and there are various methods including directly from the producer to the
customer, to rather long processes such as the producer to wholesaler to retailer then the
consumer.
 Due to advancements in technology, businesses have started to expand their distribution
methods into telemarketing and internet marketing.
 The business also has to decide on the level of market coverage it wants to achieve. They
have a channel choice of:
o Intensive distribution – Saturating the market with their product.
o Selective distribution – Using a moderate proportion of all possible outlets.
o Exclusive distribution – Only using one retail outlet in a large geographic area.
 Physical distribution is the process of the efficient movement of the product from the
producer to the customer, and this can create some issues.
 The business will have to choose the most efficient and cost effective method of transport
depending on the type of product and the degree of service the business wishes to provide.
 Warehousing is the receiving, storing and dispatching of goods, acting as a general
organisation point for the efficient delivery of products.
 Depending on their situation, the business will implement different inventory controls. If the
business carries too much stock there is potentially high expense losses while carrying too
little stock may result in lost sales.

People, Processes, and Physical Evidence

 Due to the increase in service based businesses, there has been an extension to the current
marketing mix.
 The people element refers to the quality of interaction between the customers and those
within the business who will deliver the service. Being the face of the business, it is
important that they make a good impression on the customer.
 It is crucial for a business that has a high service component to implement good people
strategies in order to maximise customer service. This involved developing strong Human
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Resources strategies for the acquisition and training of employees to ensure that they are
considerate and possess the level of knowledge and skills needed to perform the job.
 Processes refer to the flow of activities a business will follow in its delivery of a service. It is
vital that a business has a fast and reliable process system to satisfy customer expectations,
and issues with their processes can lead to unfavourable consequences such as the potential
loss of customers.
 Physical evidence refers to the environment in which the service will be delivered, and it’s
important that the business provides a good environment to ensure customer satisfaction.
By developing an ambient environment the business can gain a competitive advantage, as
well as making a judgement about the business.
 If physical evidence does not meet customer expectations, they are less inclined to
continually purchase the product or service, as well as creating a general negative image for
the business.

E-marketing
 E-marketing is the practice of using the internet to perform marketing activities, and is being
adopted by businesses due to advancements in technology, providing a faster, efficient, and
effective way of attracting new customers.
 There are many varieties of technology presently available for e-marketing including:
o Web pages – Displays information through the web browser. Used to show basic
information about the business, its location, available products and online ordering
facilities.
o Podcasting – Distribution of digital audio to video files over the internet, and is used
for marketing and advertising purposes.
o SMS – Text messages sent by the business to inform regular customers about special
deals or notify them of the arrival of goods shipment.
o Blogs – An online journal that is made public, allowing business owners and
employees to establish a reputation for expertise, and alerting customers about
special offers.
o Web 2.0 – Using the World Wide Web for interactive purposes of information
sharing, including through social networks. This allows businesses to enhance their
relationship with stakeholders.
 Social media advertising is a form of online advertising using social media platforms to
deliver targeted commercial messages to potential customers. Being inexpensive, easy to
monitor, and effective to gain exposure, SMA could be effective for a business.

Global Marketing
 Due to the global market being different to the domestic market, the business’ marketing
plan must be modified and adapted to suit overseas markets.
 Global branding is the worldwide use of a name, term, symbol or logo to identify the seller’s
products. Global branding is used worldwide so it can produce a uniform image
internationally and can be cost effective as one advertisement can be used in a number of
locations. The business will try market its brand globally to gain recognition and try
expanding into markets that are familiar with their products, irrespective to the language
barrier.
 Transnational corporations (Businesses that have two or more production facilities in
different countries and operate on a worldwide scale), have the choice of either taking a
o Standardised approach – A global marketing strategy that assumes the way the
product is used and the needs it satisfies are the same over the world. This strategy
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reduces overall operational costs through economies of scale and research and
development, and promotion strategies are standardised.
o Customised approach – A strategy that assumes the way the product is used and the
needs it satisfies are different between countries. Although this is more expensive,
the business caters for the economic, political and sociocultural characteristics of
the target country, being able to suit the needs and wants of their customers better.
 The businesses need to face the challenge of global pricing, how businesses coordinate their
pricing policy across different countries, and have the options of:
o Customised pricing – Where consumers in different countries are charged different
prices on the same product. This can be used to cover the costs associated with
exporting.
o Market-customised pricing – Setting the prices according to local market conditions.
Used to avoid competition from a domestic business, as it allows marketers to vary
the price depending on the level of demand within the overseas market. Also takes
into consideration fluctuations in the exchange rate.
o Standardised pricing – Charging customers the same price for products anywhere in
the world. Only succeeds if costs remain low enough not to affect overall costs.
 Competitive positioning relates to how the business will differentiate its products from its
competitors worldwide, gaining recognition in the environment. The aim of the business is
to show how superior the product is over its competitors’ products, making it easier to
encourage potential customers to purchase a business’ products.