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A-Level Business > Unit 3 (Marketing) > Flashcards

Unit 3 (Marketing) Flashcards

1
Q

What are marketing objectives?

A

Goals and targets set by the marketing department.

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2
Q

What is the difference between sales volume and sales value?

A

Volume is the NUMBER of products or service sold (whole numbers) and value is a monetary amount earned from selling products or services.

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3
Q

What is market size?

A

Total sales revenue made from selling all the products or services that a business has to offer over a year.

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3
Q

What is market growth and sales growth formula?

A

New - Old / Old x 100

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4
Q

What is the formula for market share?

A

Sales of business/Total Market Sales x 100

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5
Q

What is a brand ?

A

A brand is an identifying symbol, mark, logo or name that businesses use to distinguish one company from another.

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6
Q

What is the role of marketing?

A

The process of identifying, anticipating and satisfying customer needs profitably.

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7
Q

What is a value of marketing objectives?

A
  • Ensures functional activities consistent with corporate objectives
  • Provides a focus for marketing decision making and effort
  • Establishes priorities for marketing resources and effort
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8
Q

Problems with setting Marketing objectives?

A
  • fast changing external environment (legislation changes, new competitors)
  • Potential conflict between marketing objectives (eg, increasing market share by cutting costs damages objectives for brand perception)
  • Easy to be too ambitious
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9
Q

Internal influences of marketing objectives?

A
  • Corporate objectives
  • Finance
  • Human resources
  • Operational issues
  • Business culture
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10
Q

External influences on marketing objectives?

A
  • Competitor actions
  • Market dynamics (market size/growth)
  • Economic environment
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11
Q

What is primary research?

A

New or original data gathered by the researchers (information does not yet exist)

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12
Q

What is secondary research?

A

Using a source that has already got the data

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13
Q

What is qualitative data?

A

Non-numeric data eg. opinions, feelings, ideas, etc.

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14
Q

What is quantitative data?

A

Numerical data (closed questions)

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15
Q

Methods of primary research.

A

Surveys
Customer interviews
test marketing
Focus groups
Observation

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16
Q

Methods of secondary market research?

A

Government sources
Trade publications (Trade journals eg, The Grocer, Retail Weekly)
Internet
Media

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17
Q

What is sampling?

A

Happens when researchers question a portion of a larger group and use the results to make conclusions about the whole group.

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18
Q

What is random sampling?

A

Every person has equal chance of being selected.

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19
Q

What is stratified sampling?

A

Population divided into smaller subgroups.

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20
Q

What is quota sampling?

A

Population divided into strata and then required number of respondents taken from each strata.

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21
Q

What does correlation mean?

A

A relationship between two variables

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22
Q

What is extrapolation?

A

When a trend line has been extended (can be used to predict future sales)

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23
Q

What is a moving average?

A

Takes a data series and smoothes the fluctuations in data to show an average. Aim is to take out the extremes of data from period to period.

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24
Q

What are the factors to consider when extrapolating?

A
  • Product life cycle
  • Pace of technological innovations
  • Growth of the global economy
  • Rise of middle classes in emerging economies
  • Market saturation for smartphones
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25
Q

Benefits of using extrapolation?

A

Simple method of forecasting sales
Not much data required
Quick and cheap

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26
Q

Drawbacks of using extrapolation?

A

Unreliable if there are significant fluctuations in previous data
Assumes past trend will continue into the future (unlikely in many competitive business environments)
Ignores qualitative factors

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27
Q

What does a confidence interval give?

A

A percentage profitability that an estimated range of possible values in fact include that the actual value being estimated

28
Q

Examples of when you’d use confidence intervals:

A

Quality Management - Reliability of machinery
Market research - Statistical estimates for sales forecasting

29
Q

What does Price Elasticity of Demand mean? (PED)

A

Measures the extent to which the quantity of a product demanded is affected by a change in price

30
Q

What does Income Elasticity of Demand mean? (YED)

A

Measures the extent to which the quantity of a product demanded is affected by a change in consumer income

31
Q

What is the formula for PED?

A

% change in quantity demanded divided by % change in price ( will always be negative)

32
Q

Why does PED matter?

A

If price is elastic, by charging less overall revenue would increase
If price increases revenue would fall

33
Q

Factors influencing PED?

A

Brand strength
Necessity
Habit
Availability of substitutes
Time

34
Q

What are the limitations of calculating and using elasticities?

A

Difficult to get reliable data
Consumer tastes
Many markets subject to rapid technological change

35
Q

What is market segmentation?

A

Dividing a market into parts that reflect different customer needs and wants

36
Q

What are the categories of market segments?

A

Demographic, Geographic, Income, Behavioral

37
Q

What is glocalisation?

A

Altering your product slightly for the location you’re in

38
Q

What is market positioning?

A

The place that a brand occupies in the minds of the customers and how it is distinguished from the products of the competitors.

39
Q

What are the types of consumer goods?

A

Convenience, Shopping and Specialty

40
Q

What are consumer goods?

A

Those bought by consumers rather than companies to manufacture other goods.

41
Q

What are values of the Boston Matrix?

A

Good starting point when reviewing existing products for strategy
Conclusions drawn to transfer cash from stars/cows to close down or sell off dogs

42
Q

What is predatory pricing?

A

Involves decreasing the price of a product substantially with the intention of undercutting the competition creating a barrier to entry.

43
Q

What are the limitations of the Boston Matix?

A

Products may be in between
High market share does not always lead to high profits and high costs also involved

44
Q

What is cost plus pricing?

A

The total cost of the products are worked out and then a fixed percentage of a profit is added on top

45
Q

What is price skimming?

A

Used when launching a new product
Price is set high to start and then decreased over time or with a new product launch

46
Q

What is competitive pricing?

A

Priced in line with competition
Customers will have to judge a product on non price related methods (quality etc)

47
Q

What is price penetration?

A

Setting prices really LOW on a new product launches to persuade customers to try the product and as market share grows, price increases

48
Q

What is direct distribution?

A

Sold directly from distributor to consumer

49
Q

What is above the line advertising (ATL)?

A

Obvious or well aware business is trying to sell you something
eg TV, Online, Cinema ads

50
Q

What is below the line advertising?

A

More subtle form of advertising to niche markets eg. Flyers, website banners and popups

51
Q

What are methods of sales promotion?

A

BOGOFF
Price discounts
Coupons
Samples/giveaways
Special events
Points of sales

52
Q

Benefits of BOGOFF

A

Popular with shoppers
Good way to encourage people to switch brands
Boosts sales, therefore revenue increases

53
Q

Drawbacks of BOGOFF

A

Loss of profit due to increase in costs
Only useful in short term

54
Q

Benefits and drawbacks of price discounts

A

Great way to clear old or cut off date stocks
Customers may regard business as cheap option

55
Q

Benefits of money off coupons

A

Can help customer feel they are getting better value for money

56
Q

Drawbacks of money off coupons

A

Reduced profits from the costs of running the promotion
Same customers will wait for coupons before purchase
Customs may be wanting to make a purchase anyway

57
Q

What is points of sales promotion?

A

Usually a cardboard display stand located close to till within a shop to draw customer attention and trigger an impulse purchase

58
Q

What are the elements of the promotional mix?

A

Advertising, Sales promotion, Exhibitions and trade fairs, Packaging, Branding, Personal Selling, Public Relations and Merchandising

59
Q

What is public relations?

A

PR is promoting the company’s image to establish a favorable attitude towards to company. It aims t improve the image of the business and aims to increase sales.

60
Q

What is branding?

A

Establishing an identity for a product that distinguishes it from competition.

61
Q

What is a benefit of good branding?

A

Allows you to charge a higher price which will extend the product life cycle by creating customer loyalty.

62
Q

What is the difference between informative advertising and persuasive advertising?

A

Informative aims to increase consumer awareness by providing consumers with factual information eg adverts being centered on the prices and features of a product. But persuasive advertising aims to get consumers to purchase a particular product by for example, claiming the product is better than competition.

63
Q

What influences businesses choice on promotional mix?

A

Products position in product life cycle
The type of product
Finance available
Competitors actions

64
Q

What is the promotional mix?

A

The combination of methods to communicate with customers to inform them of their product and persuade them to buy them.

65
Q

What is some benefits of price penetration?

A

Win over competitors
Encourages new customers to try your product
Increases market share
Can deter other competitors from entering market so limits competition

66
Q

Drawbacks of price penetration?

A

Can be high risk due to high upfront investment and high profits in long term
Can encourage influx in customers who will not be loyal to the brand - may only buy from you again if your prices remain low
Low profit margins due to lower costs

67
Q
A

A-Level Business (8 decks)

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