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The focus of this topic is the main elements involved in the development and implementation of
successful marketing strategies.


The student:
H1 critically analyses the role of business in Australia and globally
H2 evaluates management strategies in response to changes in internal and external influences
H3 discusses the social and ethical responsibilities of management
H4 analyses business functions and processes in large and global businesses
H5 explains management strategies and their impact on businesses
H6 evaluates the effectiveness of management in the performance of businesses
H7 plans and conducts investigations into contemporary business issues
H8 organises and evaluates information for actual and hypothetical business situations
H9 communicates business information, issues and concepts in appropriate formats
Students learn to:
examine contemporary business issues
investigate aspects of business using hypothetical situations and actual business
case studies

Students learn about:

role of marketing
influences on marketing
marketing process
marketing strategies

Marketing is the most recognised of all business operations. It is through the process of
marketing that a business is able to develop a product and then implement a series of
promotional and pricing strategies aimed at encouraging a particular group of customers to buy
the product. These activities must be implemented within a legal framework seeking to protect
the interests of stakeholders within the marketing process.
Marketing allows a business to communicate with its customer base. This process involves
determining the features of a product, the types of promotional strategies to use and where
customers will be able to purchase the product.
A successful business is often one that is able to develop a long-term and valued
relationship with its customers. Businesses recognise that not all customers are the same.
People seek different products and services at different prices. It is important, then, that a
business understands who its customers are. It should examine why particular groups buy
the companys products and whether its marketing strategies are effective in developing
customer awareness and sales. It is through the process of marketing that all such activities
are achieved.

At the end of this topic you should be able to:

Explain why goods and/or services are central to both marketing and operations
Examine why ethical behaviour and government regulation are important in marketing
Assess why a mix of promotional strategies is important in the marketing of goods and services.

Role of marketing
Marketing is the process of developing Marketing
a product and implementing a series of
Strategic role The process of
of marketing developing a product and
strategies aimed at correctly promoting,
pricing and distributing the product to implementing a series
of strategies aimed at
a core group of customers. More than Choice
correctly promoting,
any other business function, it is the role pricing and distributing
of marketing to develop and implement the product to a core
strategies that generate revenue and group of customers.
Standard of living
sales for the business. While other
Standard of living
functions may make the product, it is
An individuals quality of
the responsibility of marketing to sell
life. It is partly based on
it. Marketing involves researching the Employment what goods and services
changing nature of consumers tastes and the individual can afford
preferences: what they like and what they to buy.
dont. The purpose of this is to determine
Brand awareness Strategic role of
what the business should be producing. marketing
It also involves the development of
Refers to the long-
products to provide consumers with an term role that the key
improved standard of living and greater business function of
choice within the marketplace. Marketing Market share marketing has within a
is also concerned with determining a business.
price that is consistent with consumers
Figure 6.1 The strategic role of marketing.
expectations and reflects the desired
image of the product or business. Choice
Marketing should consider the impact that An important feature of any business
price will have on the perceived quality environment is competition. Businesses
of the product and the ability of that compete to attract customers to purchase
price to sustain market share against its their products. To do this they must
competitors. differentiate their products from similar
products in the marketplace, otherwise
The strategic role of consumers would perceive the products
to be the same. In doing this, the business
marketing goods and must consider how to make its product

services or service different. This could relate

to product features, pricing strategies
Marketing is used primarily by a business as or promotional activities. This concept
a method of enhancing its revenue streams is known as a competitive advantage.
and increasing the markets awareness of its Competitive advantage refers to those
products. The strategic role of marketing features of a product or business that
also extends beyond the business itself, and provide it with an advantage over its
its influence is shown clearly through its competitors. It could include price,
impact on society. product quality and reputation or





consumer loyalty. It is what enables

a business to attract consumers to the
business or its products in preference
to a competitor. Marketing provides In 2010 Samsung released the 3D
consumers with choice. What may act as television to the Australian market. Its
a competitive advantage for one business release was to coincide with the first 3D
and its customers may be different for telecast of a sporting event on Australian
another. For example, Samsung televisions television using 3D technologies. The 3D
are highly regarded within the home viewing glasses cost approximately $200
entertainment marketplace due to their each and can only be used on the Samsung
leading 3D viewing technologies. The 3D television. Consumers now have the
reputation of these products is outstanding choice of standard televisions or being
and, as a result, those customers who able to watch various specific programs on
place emphasis on innovative consumer a 3D television, providing the viewer with
technologies when deciding what to
a more entertaining and visual experience.
purchase will consider the Samsung
range of products. Other businesses gain
a competitive advantage in the area of Standard of living
price. Brands such as AWA and Sanyo are To ensure that businesses are providing
priced at the lower end of the market and consumers with goods that appeal to
would have greater appeal to more price- the want element of human behaviour,
conscious customers. organisations will develop and market
products that are aimed at enhancing our
lifestyles. To provide consumers with better
products and, more importantly, allow
businesses to develop their income streams,
businesses are constantly improving the
features of their products. In the early 1980s
consumers would not have imagined that
telephones would be pocket-sized, mobile
and have communication access, computers
would be hand-held and people would
talk to one another using a computer rather
than a fixed-line telephone.
Through the variety of products and
services provided by business, the quality
of life for all Australians has improved.
Research and development have also played
an important role in improving quality of
life. Businesses spend millions of dollars
Figure 6.2 Marketing provides consumers with goods that improve our each year developing products that will help
standard of living. This is reflected by the wide selection of breads available consumers to adopt and maintain a healthy
to cater to a diverse range of health interests. lifestyle. Bakeries have now developed



BITE Brand awareness

a range of bread types catering to the
diverse dietary and nutritional requirements
Ethical Issue Refers to the extent to
of a varied and changing society. Basic which consumers are
If businesses are attempting to improve the
necessities such as milk and bread are now aware of the existence
BUSINESS standard of living of communities, why are of a particular product,
available to cater for the broad range of consumers forced to pay high prices for its features, price and
health concerns that consumers may have. goods that are often considered to be needs? possible places of

Brand awareness
The federal and state governments have
A fundamental goal of any marketing
sought assistance from investors to develop
campaign is to increase a brands visibility
products that will improve consumers
within the commercial environment. Strong
quality of life. Many of the express
brand awareness allows a product to
motorways in New South Wales are privately
remain in the mind of consumers. This, in
owned; some hospitals are owned and turn, is likely to influence the consumers
operated by private companies. While there purchasing decision. Successful businesses
are generally higher fees attached to such are often those who have high brand
services, they have significantly improved the awareness from consumers.
quality of life of consumers. Examples of such Brand awareness is often achieved
services include the Mater Private Hospital, through strong and effective marketing
Crows Nest and Sydneys Cross City Tunnel. campaigns. Businesses make use of electronic
and print media to publicise their products.

Often when the term marketing is
discussed, people associate it with publicity,
pricing and advertising gimmicks. It is
important to remember that marketing
would not exist without a product or service
to sell. To provide a product to consumers,
a business must employ labour to assist
in the transformation process of changing
input resources into finished goods. It must
use the skills of this labour to research
innovative methods of improving and
enhancing the product. Some people are
required to sell the product. Marketing,
therefore, provides a source of income and
employment for millions of Australians each Figure 6.3 Australias two leading department
year. It is with this income that they are stores have sought to increase the awareness of
able to purchase the goods and services that their brands through the use of well-known and
satisfy their needs and wants. highly-publicised models.


Market share
The percentage of
Increasing market share Interdependence
total sales a business
Market share refers to the percentage of
total sales a business has compared with
with other key
has compared with its
competitors within a its competitors in a particular market. The business functions
particular market. purpose of attempting to increase the
A successful business incorporates many
market share of a business is to increase
Operations function features. This would include strong
the businesss sales and profitability.
The physical production profitability, good brand awareness and
Achieving this objective allows the
of a good or the provision high employee satisfaction. Given this, a
of a service, such as a business to become stronger and more
successful business is also one where the
dental visit. consumer aware in the marketplace. In
internal components of the organisation
2009, Coles Supermarkets signed as one
work together to achieve the goals of
of the major sponsors of the Network
the business. Each key business function
Ten program, MasterChef Australia, with
must work effectively with other functions
the slogan: If you want to cook like a
to ensure the goals of the business are
masterchef cooks, then shop where a
achieved. The business becomes a team
masterchef shops. The objective of this
where the four key players must work
promotion would have been for Coles
together to win the game. Each function
Supermarkets to attract more customers
works independently and with the other to
in the grocery market. Coles association
ensure the success of the business.
with MasterChef has since proved to be
The operations function refers to
most successful, limiting the ability of
the physical production of a good or
competitor Woolworths to capitalise on
the provision of a service. In the case of
the extraordinary success of the television
manufacturing, inputs are combined to
process or transform them into a finished
Activity 6.1 Comprehension product. These inputs may be raw materials
or partly processed products. For example,
1 Marketing provides consumers with a caf will require bread, an assortment
choice. Identify two methods used by of meats and vegetables and beverages to
business to do this. present to the customer a finished product.
2 Describe the importance of market
share to a business operating in a highly Human
competitive environment. resources

The key

and finance

Figure 6.4 The key business functions.


How is the operations through market research. In many Human resource
instances, staff are the public face of the function
function related to
business. Their actions towards consumers Deals with the
marketing? relationship between the
will influence the decision of a consumer to
The operations function is concerned owners of a business and
purchase a product, return to the business
with the process of manufacturing a the people who work for
and recommend it to others. the business.
particular good. They work closely with
The marketing function involves
the marketing department to incorporate Employment relations
finding out what consumers need and want,
product features that consumers will function
and linking these research findings to the
respond positively to. It is the responsibility Deals with the
business product. This research may result
of the marketing function to develop relationship between the
in changes to the features of a product or
strategies that would sell the product. owners of a business and
the development of a new promotional the people who work for
The human resource function deals
campaign. The financial resources that are the business.
with the relationship between the owners
available to a business influence its ability
of a business and the people who work Marketing function
to grow and develop.
for the business. It is a support function The accounting and finance
Involves finding out what
that aims to find, attract, develop and consumers want and
function is responsible for providing the
motivate the people who can provide the need and attempting
financial information needed for sound to link the results of
services that the business requires. These and viable decision making. A business this research to the
human resources should have skills and must determine the total cost of producing businesss product.
abilities that are specific to the nature of a product in order to set an appropriate
their job. The business tries to acquire the Accounting and
price or to assess the businesss ability finance function
right person for each job and to keep them to acquire additional finance when and Responsible for providing
on board, as well as improve the quality if it is needed. All these functions are the financial information
of their skills. Therefore, this business interdependent. There is heavy reliance needed for sound and
function involves acquiring, developing on the functions working together as a viable decision making.
and maintaining staff and, if necessary, team, resulting in the business as a whole
separating them from the business. operating efficiently and profitably.

How is the human resource How is the accounting and

management function finance function related to
related to marketing? marketing?
The employment relations function is
One of the key goals of marketing is to
focused on the role of employees within an
sell the goods and services that a business
organisation. Staff must be motivated and
produces. This in turn benefits the
skilled to develop products within the
profitability of the business. The organisation
business that cater to the needs and wants
must also consider whether the needs
of potential customers. It is through the
of its potential customers are financially
marketing process that a business is able to
viable for the business to pursue. Budgets
determine the skills required for employees
and forecasts must also be established for
to produce the desired product. The
promotional campaigns and sales.
features of the product would come


Marketing mix
Activity 6.2 Diagram Selling approach
The process of
While product quality was seen as an
developing a product
1 Create a diagram that outlines the role important feature of the marketing process,
that meets the needs
of consumers and of each key business function businesses began to believe that some
implementing a series of 2 In each section, identify how the key consumers needed to be convinced of the
promotional, pricing and business function is interdependent need to buy a particular product. This saw
distribution strategies with marketing. the development of the selling approach,
that will encourage
which involves a business placing
consumers to purchase
the product.
emphasis on strategies aimed at convincing
consumers of the need to buy a product.
Selling approach Production, selling, A good cannot be sold based solely on
Involves a business
placing emphasis on
marketing approaches its quality. People need to believe that
the good will be of benefit to them.
strategies aimed at Businesses will often use a combination While promotion played some role here,
convincing consumers of strategies, all aimed at increasing
of the need to buy a the aim was to take the product and its
product awareness and generating sales benefits to the consumer through the all-
of their products to satisfy the needs of important salesperson. These people were
consumers. Marketing has not always been hired to communicate the virtues of their
carried out in this way. Over the years, employers products. Promotion assisted
businesses have focused their efforts on businesses in differentiating themselves
single elements of the marketing mix, from their competitors.
rather than a combination of strategies.
This section will examine these different Ethical Issue
approaches to marketing.
Examine the extent of honesty in the
selling orientation. Should the desire to
Production approach
achieve sales override the need for the
During the 1920s30s, many businesses business to be honest with its customers?
assumed that the high quality of a
product would ensure its success within
the marketplace. There was a view that
consumers would seek goods based
Marketing approach
on the level of quality. The high price Businesses have now recognised the
was merely a representation of the high importance of developing an integrated
quality. As a result, businesses placed approach to selling. A product that is
considerable emphasis on ensuring marketed successfully must incorporate
production methods were consistent with a strategy to make the consumer desire
the high standards of quality expected. the product and think it is catered to
The business would focus on how the their needs. It should be promoted
good was produced, as it believed that appropriately and priced strategically to
customers would be drawn to the quality ensure consumers are willing to buy the
of the product. good without concerns about its quality.
It makes little sense for a business to
spend thousands of dollars researching


and developing a product without materials (such as gold, aluminium, sugar, Resource markets
providing avenues for the product to wheat) to produce the goods and services Where the production
be appropriately promoted to increase that they then sell to other businesses. and sale of raw materials
its awareness among a core group of These raw materials are traded in the occurs.

customers. The pricing strategy used by resource market. Examples of businesses Industrial markets
the business must be able to generate that operate in the resource market are Where goods that are
a return on the funds invested by the BHP Billiton and Rio Tinto. Given that used as supplies in the
owners of the business to develop the labour is a key factor of production, it production process are
product. It must also be competitive and can be argued that labour is traded in traded.
affordable for those to whom the product the resource market. While much of
is targeted. the Australian labour force is regulated
through government legislation and
Activity 6.3 Comprehension tribunals, some employees are able to
negotiate higher wages based on their
1 Explain why businesses may benefit
ability, skill and reputation.
from using the production approach.
2 Outline the importance of promotion
to the selling approach.
Industrial markets
Industrial markets are where goods that
are used as supplies in the production
process are traded. It is unusual for a
Types of markets business to develop all the resources it
requires to produce finished goods. Toyota
The production and sale of goods and
Australia each year spends hundreds of
services is not restricted or targeted solely
millions of dollars for Australian companies
to consumers. Businesses purchase their
to supply Australian-made components for
supplies from other businesses to produce
Toyota vehicles manufactured in Australia:
goods and services that are then sold to
consumers. These goods and services Toyota Australias investment in
are known as inputs. Some organisations local suppliers forms an integral
simply buy a finished good from a component as part of the supplier
manufacturer to sell to consumers. Certain development overall strategy. This
businesses will choose to concentrate on initiative saw Toyota specialists
one section of the market, meaning they coordinate with selected suppliers to
specialise their products to a select group assess their processes and facilitate
of consumers. As can be seen, there is improvement activities. The
a diverse range of markets that demand consequent enhancements to supplier
goods and services. function allowed Toyota Australia
to continue their local partnerships
without the need to source from the
Resource markets
overseas market.
Resource markets are those markets
where the production and sale of raw Source: Toyota Motor Corporation Australia
materials occurs. Some businesses require website.





Intermediate markets manufacture the goods itself, it supplies

Where retail businesses its customers with finished goods, such as
purchase products that Pirelli cables, Clipsal switches and Siemens
have been produced by Futuris Automotive supplies seats and communications systems.
other organisations. Also
interior trims to Holden and Ford cars
known as wholesalers.
produced in Australia. Based in Adelaide, Consumer markets
South Australia, the business is responsible
Consumer markets are the most recognised
for the manufacturing of seats and interior market in the business environment. They
features used in Holden and Ford motor are where businesses sell their products
vehicles.The company employs a large directly to consumers. Often the business
number of employees, which contributes would have purchased the products from
greatly to the South Australian economy. other businesses that produce the item
rather than deal directly with consumers.
For example, Panasonic manufactures
Intermediate markets many consumer electrical goods
Intermediate markets are commonly (including digital cameras, televisions,
referred to as wholesalers. They sell video cameras and DVD recorders) but
products to retail businesses that have does not sell its products directly to
been produced by other organisations. consumers. Instead, the products are sold
Wholesalers generally do not sell products to stores such as Harvey Norman, Myer
to consumers. Armstrong Electrical and David Jones and these stores act as
Wholesalers is a Perth-based business that the market where consumers can access
supplies mining, industrial, and oil and Panasonic branded products.
gas equipment to businesses around the Consumer markets can be broken down
world. While this wholesaler does not into three categories.


Mass market Market segment Niche market

Figure 6.5 Types of consumer markets.





Mass market Mass market

The market where the
The mass market is the market where
products are aimed at all
the products are aimed at all consumers consumers.
Honeymoon Boutique is a travel
irrespective of their age, gender, residential
agent located in Sydneys inner west.
location or income. The business does not
target its products to a particular buyer It specialises in providing honeymoon
group. Products sold in the mass market packages for new married couples.
have appeal to all consumers. Petrol,
electricity, water and postal services are The increasing cultural diversity
examples. of Australias population has been
accompanied by the growth of speciality
Market segments food stores that cater to these groups.
These businesses specialise in only one
A market segment is one area of a
small sector of the market. If you were
particular market. Businesses may choose
to travel to the main shopping centre of
to focus on a single market segment.
Campsie, a suburb located in Sydneys
Radio stations often target one market
south-west, you would find many speciality
segment of the overall radio-listening
food stores catering to the needs of the
market. The owners and management
dominant Asian and Indian cultures within
team of radio station Mix 106.5FM, for
that region.
example, have decided to aim their
product at women aged 2050 year.
To appeal to this market segment, they Activity 6.4 Classification
play a broad selection of female-friendly
Identify the types of markets in which the
music, place an emphasis on comedy and
following business transactions occur:
encourage their listeners to call in and
a A mining company has discovered iron
share with the audiences aspects of the
ore deposits in Queensland.
life experiences.
b A motor vehicle production company
uses tyres produced by Kuma Runer
Niche markets Automotive.
A niche market is a smaller section of a c A bread manufacturer has released a
larger market segment. While a business type of bread that appeals to a variety
targeting a niche market would still focus of consumers.
on a select group of customers, a niche
d An electronic store sells a range of
market differs from a market segment in
television brands, including Panasonic,
that its customer base is narrower. Owing Samsung and LG.
to the small client base, sales are not as
e A jeweller specialising in bridal jewellery.
frequent, although the goods sold in this
type of market are usually higher-priced f A TV station believes its niche market
to be males aged 40 years and over
than those in broader markets.
interested in sport.


Chapter summary
s Marketing is the process of developing a product and implementing a series of strategies aimed at
correctly promoting, pricing and distributing the product to a core group of customers.
s The strategic role of marketing refers to the long-term role that the key business function of
marketing has within a business.
s The strategic role of marketing involves five key areas:
Choice: businesses differentiate themselves from their competitors through price, product
quality and features and service. All these provide consumers with greater choice when
purchasing a product.
Standard of living: businesses will often develop and market products that improve and
enhance standard of living.
Employment: to provide a product to consumers, businesses must employ labour to assist in
transforming input resources into finished products. Labour is also required to sell these goods
and services.
Brand awareness: brand awareness refers to the extent that customers are aware of a product/
brand and its features.
Market share: businesses will attempt to develop, promote and price products to a standard
that will give the organisation more customers than its competitors.
s Marketing is one of four key business functions. The other business functions are operations,
human resource management and finance. Each of these functions works closely with the other to
achieve the goals of the business.
s There are three core approaches to marketing:
Production approach: relies on the view that consumers base their purchasing decisions on the
quality of the product.
Selling approach: based on the belief that a business will be successful in selling a product if it
is able to promote the benefits of the product to its target market.
Marketing approach: the basis of which is that the customer is at the core of all business
activities. It involves adopting a customer orientation with the belief that all actions in the
business should be aimed at satisfying the needs of the customer.
s The four markets in the marketing process are resource markets, industrial markets, intermediate
markets and consumer markets.
s Consumer markets consist of the following markets:
Mass markets: apply to goods and services that appeal to all types of consumers.
Market segments: where a business chooses to focus on only one area of particular market.
Niche markets: a smaller section of a market segment.


Chapter revision task
Rewrite the following passage, using the words listed in the box below to fill in the blanks.

employment percentage product living

finished aware income differentiate
community improving competitors convenient
consumers competitors increase input
health price mind particular
marketing labour research

There are five key strategic roles of in the firm and society:
1 Choice: Marketing provides with choice. Businesses will often attempt to
themselves from their . They can do this through quality,
, service, packaging and loyalty programs.
2 Standard of living: Many of the products that businesses develop and market are aimed at
our quality of life and standard of . They do this by providing
goods that improve our and wellbeing, developing goods and services aimed at
making our lifestyles more and working with governments to distribute essential
3 Employment: To provide consumers with a product to sell, a business must employ
to assist in transforming resources into a product. It also uses the
skills of this labour to and develop methods of improving this product. In this way,
marketing provides a valuable source of and to millions of Australians.
4 Market share refers to the of total sales a business has compared with its
in a particular market. The purpose of attempting to the market share
of a business is to increase the businesss sales and profitability.
5 Brand awareness refers to the extent to which consumers are of the existence of a
product, its features, price and possible stores of purchase. Strong brand awareness
allows a product to remain in the of consumers.


Multiple-choice questions
1 How may marketing best be defined?
(A) The process of developing promotional and pricing strategies to sell a product
(B) The process by which a business attempts to raise awareness of the goods and/or services
it sells in the marketplace
(C) All forms of promotion, such as advertising, publicity and public relations
(D) The process of developing a product and implementing a series of strategies aimed at
promoting, pricing and distributing the product to a core group of customers
2 Mobile Buzz has developed a new marketing plan that seeks to attract the interest of young adult
mobile phone users. Which strategic role of marketing is this concerned?
(A) Choice
(B) Market share
(C) Standard of living
(D) Brand awareness
3 Which of the following strategies could a business use to increase its market share?
(A) Market research
(B) Discount pricing
(C) Product testing
(D) Quality control procedures
4 Which of the following is a product that is sold in the mass market?
(A) A product that has appeal to a limited number of individuals
(B) A product that is characterised by a high price and low sales
(C) A product that has appeal to a number of different groups
(D) A product with features and attributes that are very similar to those of competitors products
5 Rheanna and Hayley have developed a new range of female swimwear aimed at women aged
between 1835. What is this new products market commonly referred to as?
(A) Resource market
(B) Mass market
(C) Market segment
(D) Select market
6 With information obtained from market research, Therese hopes to establish a product that is
more suited to consumers needs, using relevant pricing and promotional strategies. Which form
of approach would Therese be using?
(A) Production
(B) Selling
(C) Marketing
(D) Societal
7 Turn on tomorrow and im lovin it are the slogans that Samsung and McDonalds use to
promote the quality of their products. Which form of orientation do these slogans emphasise?
(A) Selling
(B) Marketing
(C) Societal
(D) Production


8 Which of the following statements best describes the relationship between the marketing and
operations functions of a business?
(A) The operations department work closely with the marketing department to incorporate
product features that consumers will respond positively to
(B) The operations department produces goods and services within a budget developed by the
marketing department
(C) The operations department is responsible for the recruitment of staff, who then produce
goods and services favourable to the needs and wants of consumers
(D) The operations department develops goods and services from which the marketing function
becomes responsible for promoting
9 Hilltop Mining are one of Australias largest iron ore exporters. Which type of market does this
business operate within?
(A) Resource
(B) Industrial
(C) Intermediate
(D) Consumer
10 Quicksmart Supermarkets have developed a marketing strategy that incorporates an emphasis on
production quality, discount pricing and a wide distribution of its stores. Which of the following
approaches is the business using?
(A) Production
(B) Selling
(C) Marketing
(D) Relationship

Short-answer questions
1 (a) Explain how a consumer market differs from the other types of markets in the business
(b) Describe and give examples of the three types of consumer markets.
2 Andreanna has decided to establish a homeware store. She believes that the quality of her
products, for which she has been recognised, will ensure the success of the business. Vanessa
is also opening a similar store but has conducted market research to develop a more thorough
understanding of her local area and their needs. Outline how the approach that Andreanna is
using differs from that used by Vanessa.

Extended-response question
Marketing is essentially aimed at selling the goods and/or services of a business. Describe what
is meant by the term marketing and explain, with reference to the different types of markets the
different types approaches to marketing businesses may use to market their products.