Section 3
Marketing
Covers how businesses identify and reach their customers — from understanding the market and conducting research, to applying the 4Ps of the marketing mix and developing a marketing strategy.
Select a topic from the sidebar. Each topic includes key definitions, core concepts, and examiner tips. Work through them in order or jump to the topic you need. Pair with the topical past papers for best results.
Section 3 Topics
8 topicsWhat is Marketing?
Identifying customer needs and satisfying them profitably. It links the business to its customers through research, product development and promotion.
Market vs Product Orientation
Market-oriented businesses start with customer needs. Product-oriented businesses develop products first and then try to sell them.
Market Size & Share
Market size = total sales in a market. Market share = a business’s sales as a percentage of total market sales.
Competitive Environment
Businesses compete on price, quality, location, branding and customer service. Understanding rivals helps position a product effectively.
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Primary Research
First-hand data collected specifically for the purpose — surveys, interviews, observation, focus groups. Up-to-date but expensive.
Secondary Research
Existing data already collected by others — government statistics, trade journals, internet. Cheap and quick but may be outdated.
Quantitative vs Qualitative
Quantitative data is numerical (e.g. 60% prefer brand X). Qualitative data explores opinions and feelings (e.g. why customers prefer it).
Sampling
Testing a representative group rather than the whole market. Methods include random, quota and stratified sampling.
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The Product Life Cycle
Five stages: development, introduction, growth, maturity, decline. Sales and profit levels vary at each stage.
Extension Strategies
Used to extend the maturity stage — e.g. new markets, new packaging, product updates, advertising campaigns.
USP
Unique Selling Point — the feature that makes a product different from and better than competitors. Key to effective marketing.
Branding
A brand creates identity, builds customer loyalty and allows premium pricing. Strong brands reduce price sensitivity.
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Cost-Plus Pricing
Add a fixed percentage mark-up to the cost of production. Simple but ignores competitor prices and customer perceptions.
Competitive Pricing
Setting prices in line with or just below competitors. Common in markets with similar products and price-sensitive customers.
Penetration & Skimming
Penetration: low launch price to gain market share. Price skimming: high launch price to maximise profit from early adopters.
Psychological Pricing
Pricing to create a perception of value, e.g. $9.99 instead of $10. Influences buying decisions based on how the price feels.
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Distribution Channels
The route a product takes from producer to consumer. Can be direct (producer → consumer) or indirect (via wholesalers and retailers).
Wholesalers
Buy in bulk from producers and sell smaller quantities to retailers. Reduce costs and logistical burden for smaller businesses.
Retailers
Sell directly to consumers. Can be physical stores, supermarkets or online retailers. The final link in most distribution chains.
Choosing a Channel
Depends on product type, cost, target market, required control over selling, and whether the business sells B2B or B2C.
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Above the Line
Mass media advertising — TV, radio, newspapers, billboards. Reaches a wide audience but is costly and hard to target precisely.
Below the Line
Targeted, direct promotion — social media, loyalty cards, free samples, sponsorship. More focused but narrower reach.
Sales Promotion
Short-term incentives to boost sales — BOGOF, discounts, competitions, coupons. Effective for launching or clearing stock.
Choosing Promotion Methods
Depends on budget, target market, product type and the stage of the product life cycle the product is in.
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E-Commerce
Buying and selling goods online. Lowers costs for the business, extends reach globally, and allows 24/7 trading.
Social Media Marketing
Using platforms like Instagram, TikTok and Facebook to promote products, engage customers and build brand awareness at low cost.
Impact on the 4Ps
Technology changes how products are sold (Place), how prices are compared, how products are promoted, and even what products are offered.
Advantages & Risks
Lower costs and wider reach vs cybersecurity risks, customer data concerns, and the need for technical investment.
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Market Segmentation
Dividing a market into groups of customers with similar characteristics — by age, income, location or lifestyle.
Target Marketing
Choosing which segment(s) to focus on. Allows the business to tailor the marketing mix to specific customer needs.
Niche vs Mass Marketing
Niche: targeting a small specialist segment. Mass: targeting the whole market with one product. Each has cost and risk trade-offs.
Positioning
How a product is perceived in the minds of customers relative to competitors. Communicated through price, branding and promotion.
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