Unit 3 - Decision making to improve marketing performance

Question 1

Why is it beneficial to set objectives?

Answer 1

• Motivation
• Target setting (for focus and direction)
• Evaluation of performance (possible bc obj. are “SMART”)

Question 2

Calculation for Market share?

Answer 2

= market share = sales of firm/ market sales, X 100.

Question 3

Calculation for Sales growth?

Answer 3

= difference in sales/ sales in original, X 100.

Question 4

Calculation for Market growth?

Answer 4

= difference in total market sales/ earliest year, X 100.

Question 5

Calculation for market size?

Answer 5

= sales/ market share, X 100

Question 6

What is the meaning of random sampling, and what is it used for ?

Answer 6

• When members of a population have the same equal chance of being selected.
• Appropriately used when firms are researching a product that would be aimed at a large target market.

Question 7

What is the point of sampling?

Answer 7

To collect information in relation to a product in a way that would’ve otherwise been extremely expensive and costly to do so.

Question 8

Meaning of Stratified sampling?

Answer 8

• Segmenting the target population into a sample that accurately represents the entire population.

Question 9

What is extrapolation?

Answer 9

• Analysing the past performance of a variable, such as sales, and then extending the trend into the future.

Question 10

Calculation for price elasticity of demand?

Answer 10

= percentage changes in demand/ percentage change in price

Question 11

Calculation for income elasticity of demand?

Answer 11

= percentage change in demand / percentage change in income.

Question 12

The value of technology in gathering and analysing data for marketing decision-making?

Answer 12

• Enables targeted sales messages
• Makes sales forecasting easier

Question 13

The process of segmentation?

Answer 13

Segmentation ———-) Targeting ———-) Positioning.

Question 14

Advantages of segmentation?

Answer 14

Marketing will be more effective as it can be directed specifically at the target group meaning that:

• resources will be used more effectively (reducing costs)
• sales and market share may increase

Question 15

Drawbacks of segmentation?

Answer 15

• By targeting specific segments of a market, a business may overlook other potentially profitable segments.
• Possible that any changes in fashion/ tastes, could be overlooked.

Question 16

What is niche marketing?

Answer 16

• When a business identifies and satisfies the demands of a small segment within a larger market.

Question 17

What are the advantages of niche marketing?

Answer 17

• may benefit from price skimming (enabled by low comp.)
• increased customer loyalty
• charge a premium price

Question 18

Disadvantages of niche marketing?

Answer 18

• hard to scale business if customer base is small
• harder to generate sufficient sales