unit 3 - the marketing mix Flashcards
Internal factors influencing marketing objectives (COFH)
Corporative objectives
Operational Issues
Finances
Human Resources
External factors influencing marketing objectives (CEMT)
Competitor actions
Economic environment
Market dynamics
Technological change
Primary market research
Pros and cons?
involves collecting data that hasn’t been collected before eg. questionnaires and surveys
Provides detailed information that is relevant and up to date.
Time consuming and difficult to collect.
Secondary market research
Pros and cons?
Involves gathering existing data from a secondary source eg websites and government reports.
Provides detailed information that is quick and easy to gather.
May not be specific to that business and can be inaccurate or biased
The three sampling types
Random sampling - Individuals chosen by chance
Quota - population segmented into subgroups with respondent representative of that subgroup
Stratified - Population segmented into subgroup with respondent chosen by chance
What is extrapolation?
Pros and cons?
Trends used from historical data to forecast the future.
Pros:
Simple method of forecasting
Minimal data required
Cons:
Assumes past trend will continue in the future
Unreliable if fluctuations in the past.
Correlation
What to take into consideration with correlations?
Measures the strength of relationships between two variables.
Strong or weak correlation?
Positive / negative / no correlation ?
Influences on PED
Substitute available
Proportion of income
Luxury
Addictive
Time
Switching Costs
Problems with forecasting PED
Changing interests and fashion
Price elasticity changes across different price ranges
Competitors inventing and improving products
Categories of consumer products
Convenience products
Shopping products
Speciality products
Categories of industrial products
Materials and parts
Capital items
Supplies and services
What is Cost plus pricing?
2 Benefits and drawbacks?
Adding a markup % on top of costs to ensure a profit.
+ Managers can be confident their product makes profit
+ Price increase can be justified as costs rise
- Ignores price elasticity of demand
- Ignores competitive pricing.
Price skimming
Setting a high initial price at introduction and reducing it over time.
Price penetration
Setting a low initial price at introduction and increasing it when market share reached.
Dynamic pricing
Flexible pricing to meet market demand.
