3. Decision making to improve marketing performance Flashcards
(42 cards)
Advantages and disadvantages of niche marketing 4 + 3
Advantages:
- May benefit from price skimming
- enables differentiation and specialisation
- often less competition
- Customer loyalty
Disadvantages:
- If profitable, could attract competition
- May be difficult to generate acceptable profit
- Higher costs due to small scale
What is market segmentation?
Dividing the market into identifiable sub-markets, each with its own customer characteristics
What is market targeting?
Deciding which market segment a business wants to operate in
What is market positioning?
Where a particular brand stands in relation to other brands in the market
The effect of changes in price - elastic and inelastic
elastic demand:
price rise - revenue falls
price fall - revenue rises
inelastic demand:
price rise - revenue rises
price fall - revenue falls
What is elasticity?
The measure of the responsiveness of demand to a change in a variable, e.g. price or income
What is a confidence interval or margin of error?
The plus or minus figure used to show the accuracy of results arising from sampling
What is a confidence level?
the probability that research findings are correct
What is extrapolation?
Analyses the past performance of a variable, such as sales, and extends the trend into the future.
What is correlation?
used to establish the extent of a relationship between two variables
What is sampling?
The selection of a representative group of consumers from a larger population
What is random sampling?
when each member of the population has an equal chance of being included
What is stratified random sampling?
Seperates the population into segments or strata
What is quota sampling?
Splits the population into a number of groups, each sharing common characteristics
What are the five external factors influencing marketing objectives and decisions?
market and competition: objectives will vary according to the state of the market and the actions of competitors.
economic factors: factors such as an economic cycle and interest rates affect consumer spending
social factors: consumer tastes and fashion change over time
ethics: consumers have become more aware of environmental issues, e.g. the amount of packaging
technology: this affects the way businesses both produce and sell goods, e.g. mass customization and online sales
What are four internal factors influencing marketing objectives and decisions?
finance: The marketing function needs to operate within the budget allocated
production capacity: It must be physically possible to achieve growth targets
human resources: market growth may be dependent on the skills of the workforce and the availability of labour
nature of product: innovative products have more scope for growth than staples such as bread and fuel
3 key marketing objectives (4 sub)
- Sales growth% (sales volume, sales value, launching new products, entering new markets)
- market share increase
- brand loyalty increase
what is primary data
data collected first-hand for business
what is secondary data
data that already exists and which has been collected for a different purpose
4 methods of primary research
surveys/questionnaires
observations
focus groups
test marketing
5 secondary research methods
pulished reports by industry publications newspapers internet government market research reports
2 strengths of primary research + 3 weaknesses
s:
- specific to the business/product
- up to date
w:
- expensive, time consuming
- sample size may be too small
- poor validity of research
3 strengths 3 weaknesses of secondary research
s:
- can be cheaper
- immediately available
- looks at the whole market
w:
- not specific to the business/product
- can be out of date
- accessible to competitors
4 criteria to segment market
demographic (age, gender etc)
geographic (location, urban or rural)
income (disposable income, level of earnings)
behaviour (specific needs, frequency, interests, hobbies etc)
