3.1 - Marketing

Question 1

What is marketing?

Answer 1

Identifying and understanding customer needs and wants.

Question 2

What are the 3 main stages in marketing?

Answer 2

1. Market research to identify and understand customers.
2. Developing and testing products and services
3. Communicating products and services to customers

Question 3

What are 4 reasons as to why businesses need to think about marketing?

Answer 3

1. To reduce risk of product failure
2. Understand their customers
3. Communicate products effectively to encourage customers to buy them
4. Keep up to date with market trends so products can continue to meet customer needs.

Question 4

What is a market segment?

Answer 4

A group of customers in a market that have similar characteristics and needs.

Question 5

What are 3 benefits of market segmentation?

Answer 5

1. Carries out market research
2. Tailors products to customer needs
3. Target promotions at specific groups

Question 6

What is market research?

Answer 6

Gathering information about customers, competitors and market trends by collecting PRIMARY and SECONDARY data.

Question 7

What is the 1st stage of market research?

Answer 7

PLANNING and DESIGNING the research

Question 8

What are 3 potential questions a business may ask in the 1st stage of market research?

Answer 8

1. What are the aims of the research?
2. What research techniques could you use?
3. Should you use primary or secondary, qualitative or quantitative data?

Question 9

What is the 2nd stage of market research?

Answer 9

DOING the research

Question 10

What are 2 potential questions a business may ask in the 2nd stage of market research?

Answer 10

1. What are the time limits for the research?

2. What is the sample size?

Question 11

What is the 3rd stage of market research?

Answer 11

ANALYSING the information

Question 12

What are 2 potential questions a business may ask in the 3rd stage of market research?

Answer 12

1. Did people make the same or different comments?

2. Could you identify any trends in the data?

Question 13

After analysing the information from market research, what 4 questions might a business ask?

Answer 13

1. Is the marketing mix appropriate?
2. Does a product or service need to be changed to make it more appropriate for customer’s needs?
3. Should a product or service be left unchanged?
4. Is it time to withdraw or replace a product or service?

Question 14

When reading about market research in a case study, what 4 questions could you ask yourself?

Answer 14

1. Was the right type of research used?
2. How accurate is the research likely to be?
3. Is the research representative of the target market?
4. Is there any important information that the market research does not tell us?

Question 15

What is a PRODUCT TRIAL?

Answer 15

When customers buy a product for the first time to assess whether or not they want to buy it again.

Question 16

What is REPEAT PURCHASE (links with customer loyalty)?

Answer 16

Where customers buy a product more than once and keep coming back.

Question 17

What are 5 methods of Product Trial?

Answer 17

1. Low trial prices
2. Advertising
3. Free samples
4. Viral marketing, e.g Facebook

Question 18

What are 4 methods that could encourage repeat purchase and customer loyalty?

Answer 18

1. Special promotions
2. Reminder adverts
3. Product innovations
4. Customer loyalty schemes (loyalty cards)

Question 19

What are the 4 phases of the Product Life Cycle (PLC) ?

Answer 19

1. Introduction
2. Growth
3. Maturity
4. Decline

Question 20

What happens in the Introduction stage of a PLC? What potential question might a business ask in this situation?

Answer 20

The product is launched/released onto the market.

What promotion methods will encourage customers to trial a product?

Question 21

What happens in the Growth stage of a PLC?

What potential question might a business ask in this situation?

Answer 21

If the launch is successful, sales increase sharply and the product may make a profit for the first time.

How can we meet demand and maintain customer service?

Question 22

What happens in the Maturity stage of a PLC? What potential question might a business ask in this situation?

Answer 22

Sales growth slows down, but repeat customers continue to buy and customers become loyal. The market becomes saturated as rivals bring out competing products.

How can we encourage repeat purchase and build customer loyalty?

Question 23

What happens in the Decline stage of a PLC? What potential question might a business ask in this situation?

Answer 23

Eventually the product is outdated and there is a big fall in sales, leading to withdrawal.

How can we innovate products to compete with competitors? Should we use extension strategies?

Question 24

How can businesses increase the life of a product? What does this involve?

Answer 24

EXTENSION STRATEGIES - these involve slightly changing the product so that it has a fresh appeal to the target market or appeals to a new market segment.

Question 25

What is the PRODUCT MIX / PRODUCT PORTFOLIO?

Answer 25

Where businesses sell a range of products.

Question 26

What 4 things can a product portfolio analysis help a business to make decisions about?

Answer 26

1. What products to launch and when 2. When to withdraw a product 3. What products are doing well or badly now and in future 4. How to increase sales

Question 27

What is the Net Cash Flow like in the INTRODUCTION PHASE?

Answer 27

Net cash flow is NEGATIVE due to increased funding on the product.

Question 28

What is the Net Cash Flow like in the GROWTH phase?

Answer 28

Net cash flow is POSITIVE but small

Question 29

What is the Net Cash flow like in the MATURITY stage?

Answer 29

Cash flow is likely to be positive

Question 30

What is the Net Cash flow like in the DECLINE stage?

Answer 30

Businesses will start to experience cash-flow issues.

Question 31

What is The Boston Matrix?

Answer 31

A product portfolio analysis tool used to plan the development of products.

Question 32

What is plotted on the x-axis on the Boston Matrix? | What is plotted on the y-axis on the Boston Matrix?

Answer 32

x-axis: Market Share | y-axis: Market Growth

Question 33

What does the 'Dog' represent in The Boston Matrix?

Answer 33

Few prospects, low market share and low market growth. It is often 'killed'. Should the business continue to sell it if it is profitable and it funds other products?

Question 34

What does the Cash Cow represent in The Boston Matrix?

Answer 34

High market share but low market growth. | An established and profitable product that can support others.

Question 35

What does a Star represent in The Boston Matrix?

Answer 35

Very successful product - high market share, high market growth. But growth has to be funded to keep up with demand and cash flow may be a problem.

Question 36

What does a Question / Problem Child represent in The Boston Matrix?

Answer 36

Presents a problem - should the business invest to increase sales?

Question 37

Why do business prefer to invest Stars into becoming Cash Cows?

Answer 37

To prevent cash flow problems and excessive funding.

Question 38

What are two decisions a business can make with a Problem Child?

Answer 38

Either PRIORITISE or DIVEST.

Question 39

What is a BRAND?

Answer 39

A named product which consumers see as being different from other products and which they can associate and identify with.

Question 40

What are 6 reasons as to why Branded products are beneficial?

Answer 40

1. Consumers are more willing to TRIAL PRODUCTS in the brand range. 2. Brands encourage CUSTOMER LOYALTY. 3. Consumers trust brands, leading to REPEAT PURCHASE. 4. Brands can often charge PREMIUM PRICES. 5. Consumers have GREATER AWARENESS of brands. 6. Brands can lead to INCREASED SALES and MARKET SHARE.

Question 41

What is one disadvantage of generic/non-branded products?

Answer 41

Very little difference between the product of one business compared to another. There is nothing to differentiate the product by.

Question 42

What can a MARKET MAP show?

Answer 42

The difference between strongly branded products. This map shows the positions of cars in relation to their performance and practicality.

Question 43

What is PRODUCT DIFFERENTIATION?

Answer 43

Making a product different from others in some way.

Question 44

What are 2 reasons as to why product differentiation can help businesses?

Answer 44

1. To position their products and target different market segments. 2. To gain an advantage over rivals when faced with competition.

Question 45

What can product differentiation allow consumers to do?

Answer 45

To see clearly that their needs are being met more effectively by one product than by another.

Question 46

What are 6 examples of differentiating a product?

Answer 46

1. Unique and catchy product name 2. Quality 3. Design, formulation or function 4. Packaging 5. Customer service 6. Differentiation across the value chain.

Question 47

What is the MARKETING MIX?

Answer 47

A combination of factors which help a business to take into account customer needs when selling a product.

Question 48

What are the 4 Ps in the Marketing Mix?

Answer 48

PRICE, PLACE, PRODUCT, PROMOTION

Question 49

What is important that a business must do when implementing the Marketing Mix into their products?

Answer 49

That all aspects of the Marketing Mix complement each other and work together well.

Question 50

Why is the PRODUCT aspect of the Marketing Mix meet?

Answer 50

The needs of the customer.

Question 51

What 6 questions could a business consider when DIFFERENTIATING their product from others?

Answer 51

1. Who is our product targeted at? 2. What will be our product range (variety) ? 3. What will be our Unique Selling Point (USP) ? 4. What will our brand be about / brand name be? 5. What will be our formula (ingredients/materials) ? 6. What will our packaging be?

Question 52

What are 3 reasons as to why PRICE is important?

Answer 52

1. The price of a product gives customers an indication of quality. 2. In competitive markets, changes in price can have a significant influence on demand. 3. Branded products generally have a higher price than non-branded products because they are more expensive to produce and promote.

Question 53

When might a low price be used (2) ?

Answer 53

1. For GENERIC / NON-BRANDED PRODUCTS | 2. To encourage PRODUCT TRIAL when a product is first launched.

Question 54

What is PROMOTION?

Answer 54

The way in which a business makes consumers aware that a product is for sale.

Question 55

What are 4 reasons as to why promotion of a business or product is used?

Answer 55

1. Creates awareness 2. Communicating product benefits and features to customers. 3. Building a strong brand image. 4. Boosting sales

Question 56

What is PLACE about?

Answer 56

Having a product available to customers when they want it and where they want it.

Question 57

What are 3 ways in which a business can deliver its PLACE aspect of the Marketing Mix?

Answer 57

1. DIRECT (e.g. internet, or a sales force to sell directly to customers) 2. RETAIL (distributing products through retailers which helps sell the product by improving the buying experience of customers and improving customer service) 3. WHOLESALE - (breaks down bulk supply of a product and distributes it to retailers)