Unit 3.1 — Nature and purpose of marketing
Learning outcomes (from the 9587 syllabus). This note is complete when every bullet below is covered.
Learning outcomes
- Types of market: consumer; business; government
- Types of marketing indices: market size; market growth; market share (and measuring them)
- Marketing perspectives: marketing concept; product concept; production concept (distinction, appropriateness and examples)
- Marketing objectives: importance; types (market leadership, market share, profitability); supporting objectives (brand awareness, attitude change)
Running example used throughout Unit 3: Tropicool, a Singapore brand selling bottled fruit juices and smoothies.
Big picture
In plain English: marketing is finding out what customers want and giving it to them at a profit. It is not just advertising — it starts with understanding the customer.
Analogy: marketing is like matchmaking. You do not build a product and hope someone buys it; you first learn what the customer wants, then match your product to that desire.
Core content
1. Types of market
| Market | Who buys | Example |
|---|---|---|
| Consumer market | Individuals for their own use (B2C) | Shoppers buying Tropicool juice at FairPrice |
| Business (industrial) market | Businesses buying to use or resell (B2B) | A café buying Tropicool juice in bulk to sell |
| Government market | Government agencies buying goods/services | A hospital buying Tropicool drinks for patients |
2. Marketing indices (measuring a market)
| Index | Meaning | How to measure |
|---|---|---|
| Market size | Total value or volume of sales in a market | Total units sold Ă— price, or total revenue of all firms |
| Market growth | How fast the market is expanding | % change in market size over a period |
| Market share | A firm’s slice of the market | Firm’s sales ÷ total market sales × 100 |
If Singapore’s total juice market is worth $100m a year (market size), grows to $110m (10% market growth), and Tropicool sells $20m of it, then Tropicool’s market share is 20/100 × 100 = 20%.
3. Marketing perspectives
A business’s marketing perspective is its attitude toward customers:
| Perspective | Focus | Assumption | Risk |
|---|---|---|---|
| Production concept | Produce efficiently and cheaply | Customers want affordable, widely available products | Ignores quality and changing tastes |
| Product concept | Make the best-quality product | Customers want the best features/quality | “Best” may not be what customers actually want |
| Marketing concept | Find out customer needs first, then make/sell to satisfy them | Customers want their needs met | Requires costly research; slower to launch |
A production-concept juice firm mass-produces cheap juice and competes on price. A product-concept firm obsesses over a premium recipe with exotic ingredients. A marketing-concept firm (Tropicool) first surveys customers and finds they want less sugar and convenient bottles, then designs its juice to match — so it sells better.
4. Marketing objectives
Marketing objectives are the marketing function’s targets. They matter because they guide marketing decisions and must support the business’s overall (corporate) objectives.
| Type | Meaning |
|---|---|
| Market leadership | Being the biggest player (largest market share) in the market |
| Market share | Increasing the % of the market the firm controls |
| Profitability | Earning a target profit from marketing activities |
Supporting objectives (they help achieve the above): brand awareness (customers know the brand) and attitude change (customers feel more positively about the brand).
Tropicool’s marketing objective for the year: increase market share from 20% to 25%, and become market leader in the “no-added-sugar juice” category. Its supporting objectives are to raise brand awareness through social media and change attitudes so customers see Tropicool as the healthy choice.
Analysis & evaluation points (AO3/AO4)
- The marketing concept is now best practice, but it is expensive (research) and can slow a business down — a trade-off.
- Production and product concepts can still work in some markets (basic commodities, luxury goods), but they risk ignoring the customer.
- Market share is not the same as profit — a firm can gain share by cutting prices but lose profit.
- Objectives must be realistic and measurable — “increase brand awareness” only works if you can measure it (e.g. surveys).
- Marketing objectives must fit corporate objectives — otherwise marketing works against the business.
Language bank: however · on balance · it depends on · trade-off ·
Worked examples (PEEL)
PEEL = Point → Explain → Example → Link. Use this structure for every written answer.
Worked example 1 — “Explain” (6 marks)
Question: Explain the difference between the product concept and the marketing concept.
- P (Point): The product concept focuses on the product, while the marketing concept focuses on the customer.
- E (Explain): A product-concept firm makes the best product it can and assumes customers will buy it; a marketing-concept firm first researches customer needs and then designs the product to satisfy them.
- E (Example): A product-concept juice firm adds exotic ingredients to make a “superior” juice, while Tropicool (marketing concept) first discovers customers want less sugar and designs for that need.
- L (Link): Therefore, the marketing concept is more likely to produce a product that sells, because it starts from actual demand.
Worked example 2 — “Evaluate” (10 marks)
Question: Evaluate whether increasing market share should be a business’s main marketing objective.
- P (Point): Increasing market share can build long-term strength.
- E (Explain): A larger share brings economies of scale, brand power, and bargaining power with retailers, which lower costs and raise profits.
- E (Example): If Tropicool becomes market leader, it can negotiate better shelf space in FairPrice and buy bottles in bulk.
- L (Link): This supports long-term profitability.
- Evaluate (AO4): However, chasing share by cutting prices can destroy profit in the short run, and a high share is no guarantee of profit if costs are high. On balance, market share is a good objective when it is gained profitably, but profitability should remain the underlying goal.
Application bank (Singapore quick reference)
| Idea | Singapore example |
|---|---|
| Consumer market | F&B, retail, groceries (FairPrice, Cold Storage) |
| Business market | Component suppliers to electronics firms; café supply chains |
| Government market | Public tenders via GeBIZ (e.g. supplying schools/hospitals) |
| Marketing concept | Grab researching commuter needs before launching new services |
| Market share battle | Supermarkets (FairPrice vs Sheng Siong) competing for share |
Exam technique
- How it appears: data-response questions may give market data and ask you to calculate or interpret market size/growth/share.
- Model skeleton for “calculate market share”: formula → substitute numbers → answer with units → interpret what it means.
- Common pitfalls: confusing market size with market share; describing perspectives without examples; stating objectives without linking to corporate objectives.
Self-test checklist
Essay practice: “Evaluate the view that businesses should always adopt the marketing concept.” (25 marks)