3.3 - MARKETING PERFORMANCE Flashcards
(64 cards)
1
Q
Marketing objectives
A
- tend to focus on sales
- increase sales volume an value
- increase sales growth
- increase market share
- increase market size and growth
- increase brand loyalty
2
Q
Internal influences on marketing objectives
A
- CORPORATE OBJECTIVES: have to make sure objectives are aligned with overall goals of company
- FINANCE: will allocate marketing budget, effecting what they can do
- HUMAN RESOURCES: HR planning identifies how much staff a company needs, changing the staff levels means that the marketing objectives will need to be adjusted
3
Q
External influence on marketing objectives
A
- MARKET: the state of the economy has a big impact on marketing objectives
- TECHNOLOGY: where technology changes rapidly, marketing objectives tend to be focused on sales and price
- COMPETITORS: highly competitive markets will effect a company
- ETHICS AND ENVRONMENT: increasing awareness can effect brand image
4
Q
law affecting marketing objectives
A
- predatory pricing (cutting prices to kick a competitor out) is illegal in the EU and US
- trade descriptions act regulates promotion as it means businesses cant lie about products
- restrictions on advertising - things like prescription medicine, tobacco and alcohol
5
Q
market research - quantitative data
A
- numerical statistics
- often uses multiple choice questionnaires
- fixed, predetermined answers
6
Q
market research - qualitative data
A
- feelings and motivations of consumers
- often uses focus groups that have in-depth discussions
- normally open questions
7
Q
market research - primary research
A
- gathard with things such as questionaries, interviews, surveys and focus groups
- test marketing (launching a product in one area to see the customer response)
- specific for purpose its needed for - great for niche markets
- very expensive and slow
8
Q
market research - secondary research
A
- internal sources - loyalty card info, feedback from company salesman and analysis of company sales reports, financial accounts
- external sources - government publications, pressure groups, trade magazines
- secondary data is much easier, faster and cheaper
- may contain errors and be out of date
9
Q
market research - sampling
A
- survey samples of people rather than whole market
- keeps costs down
- sample should try to represent the market
- three main types; simple random sample (random names from list), stratified sample (population into groups the randomly selected from each group), quota (people are picked who fit into a category)
10
Q
extrapolation
A
- used to predict future sales
- trends from previous sales can be continued into the future to forecast sales
- useful in stable environments
- sudden unexpected event are the biggest downfall of extrapolation
11
Q
confidence intervals
A
- a margin of error for sample results
- good chance the population won’t all be accurately represented
- a confidence interval is a range of values that the company is fairly sure that the value for the population
12
Q
price elasticity of demand
A
- how much the price affects the demand
- greater than 1 = elastic, meaning the % change in demand is greater than the % change in price
- less than 1= price inelastic, meaning the % change in demand is less than the % change in price
13
Q
price elasticity
A
- necessary products like milk are price inelastic as changing the price won’t have too much effect on demand
- products such as iphones and cars happen to be price elastic because increasing/decreasing the price will have an effect on demand
14
Q
income elasticity of demand
A
- normal good (fruit + veg) have a positive income elasticity demand (less than 1) meaning that as income rises so does demand
- luxury goods have a positive income elasticity of demand also
- a cheaper supermarket brand of baked beans is an ‘inferior good’ meaning if has a negative income elasticity of demand (as income rises, demand falls and demand rises when income falls)
15
Q
elasticity helps business to make decisions
A
- helps decide whether suppliers should raise or lower their the prices of products
- income elasticity helps a manufacturer to see what will happen to sales if the economy grows or shrinks
16
Q
different ways to segment a market
A
- demographic; age, gender, class, family size
- geographic; market can be divided according to neighbourhood, city, county, world region
- income; luxury products will be aimed at those will high incomes
- behaviour; amount of use, lifestyle
- segmenting is used for identifying new customers, markets and products
17
Q
there are three approaches to segmenting
A
- concentrated - one or two segments
- differentiated marketing - several segments are targeted
- undifferentiated - segments are ignored and the company tries to reach the entire market
18
Q
influences on positioning (creating an image)
A
- state of market; if in a recession companies more likely to position brand/product to make customers think its best value for money
- current products; if other products are seen as reliable and cheap they are likely to try and position any new products in a similar place
- attributes of company; companies need to position products to match strengths and weaknesses
19
Q
the traditional marketing mix
A
- product
- price
- place
- promotion
20
Q
the 3 extra P’s
A
- people; most important part. people are more likely to buy if people providing are well-trained, knowledgeable, reliable, friendly and efficient
- Physical environment; needs to be clean, stylish eg
- process; waiting times, ordering and payment systems, after-sales service
21
Q
different factors influencing the marketing mix
A
- competition
- target market segment
- where a company wants to position a product
- the location of business
- the type of product
- whether your selling goods or a service
22
Q
resources of a business that affect the marketing mix
A
- marketing and corporate objectives
- finances
- if they have the right software
- brand image
- knowledge and skills of employees
23
Q
the three types of consumer products
A
- convenience products
- shopping products
- speciality products
24
Q
consumer products - convenience products
A
- inexpensive - regularly bought a lot, sometimes out of habit
- eg, a coffee on the way to work
- not much thought went into buying
25
consumer products - shopping products
- clothes, computer, washing machines
- more expensive
- sold in fewer places
- people may may more for a particular brand
26
consumer products - speciality products
- they are unique
- travel to find exact brand
- more of a perceived image and quality
27
boston matrix - what does it show?
- compares market growth and market share
- stars
- question marks
- cash cow
- dogs
28
boston matrix - question marks
- all new products are question marks
- small market share + high market growth
- need heavy marketing to succeed
29
boston matrix - cash cow
- high market share, low market growth
- maturity phase
30
boston matrix - stars
- high market growth, high market share
- growth phase, future cash cows
- lots of promoting as competitors may try taking advantage the growth market to
31
unique selling points - tangible benefits and intangible benefits
- tangible benefits can be measured (low cal pizza, emery-efficient fridges)
- intangible benefits can't be measured (eg makeup making you feel good about yourself)
- service businesses need USP's as well (eg butlins claiming extra money won't be spent)
32
product life cycle - stages
- development
- introduction
- growth
- maturity
- decline
33
product life cycle - Development
- R&D stage
- marketing department does marketing research
- high costs
- high failure rate as often not enough demand
34
product life cycle - introduction
- product is launched
- heavily promoted
- initial cost may be high to cover promotional cost or could start low to boost sales
- competition may be limited if its an innovative product
35
product life cycle - growth
- sales grow fast, there are new customers and repeat customers
- competitors may be attracted to market as promotion will show the differences in products
- product is often improved or developed
36
product life cycle - maturity
- sales reach peak and profitability increases because of fixed costs of development have been paid for
- at saturation sales may begin to drop especially if long-lasting and doesn't often need replacing
- price often reduced to stimulate demand, which may reduce profit
37
product life cycle - decline
- doesn't appeal to customers anymore
- if sales carry on falling the product is withdrawn or sold to another business
38
extension strategies
- product development (improve/redesign products)
- market development (new markets/new uses of existing products)
- changing the way products are distributed
- changing the way its prices/produced
39
factors influencing pricing decisions
- price must be accepted by customers
- price elasticity of demand
- stage of product life cycle
- price has to be in line with companies' objectives
- price of competitor products
40
Price skimming
- when new products are set at a high price
- people will pay more because the high price boosts the image
- after the porcut is on the market for a while the price is usually dropped as competitors will have entered with lower prices
- things like technological products are often priced this way
41
penetration pricing
- launching a product at a low price to attract customers and gain market share
- benefits companies who can benefit from lower costs when manufacturing large quantities of products
- problem is that customers expect the lower price to continue so its difficult to raise price without losing customers
- can also be used as extension strategy
42
predatory pricing
- when a business deliberately lowers price to force another out of the market
43
competitive pricing
- when companies monitor their competitors prices to make sure that their own are set at an equal price or lower to gain customers
44
psychological pricing
- bases price of customers expectations
- high price = high quality?
- insignificant price change can have a psychological impact on customer (£99.99 semmes much better than £100)
45
loss leader pricing
- normally sold at lower price
- idea is consumers will by lots of other products as well
46
price discrimination
- when a company sells its products at different prices to different group - eg zoo rickets to different age groups
47
dynamic pricing
- aims to increase revenue by changing prices depending on competitor prices and demand
- eg hotels change as the travel dates get nearer
- if demand is high so will price
48
marketing mix - promotion
- designed to inform customers/ persuade them to buy
- promotional objectives include increasing sales, profits and awareness of the products
49
promotion - advertising
- promote goods and public image of business
- TV ads are very expensive, but the costs must be worth it in terms of extra sales
- products are heavily advertised at launch
- can be used as an extension stagey to remind people of the product
50
digital advertising
- cheaper
- can target online adverts to consumers who show an interest
- advertising on mobile phones is becoming more important
51
branding
- differentiates products
- can charge higher prices with good branding
- good branding can deter competitors
- some have an ethical + environmentally friendly brand image
52
other forms of promoting
- merchandising
- direct mail
- personal/direct selling
- event sponsorship
53
promotion - public relations (PR)
- liaising with media (press releases)
- PR departments write brochures, newsletters and leaflets giving information
- product launches, conferences and special events
54
what are wholesalers?
- buy good from manufacturer in bulk and sell them in smaller quantities to retailer
- make distribution simpler - act as the retailers storage cupboard
55
the different channels of distribution
- direct selling (0 - level channel)
- indirect selling (1-level channel)
- direct selling through an agent (1-level channel)
- indirect selling (2-level channel)
56
direct selling (0-level channel)
- manufacturer -> consumer
- internet has made it easier for producers of shopping any speciality goods to sell directly to consumer
- done through door-to-door sales, TV shopping channels, telephone sales and websites
- eg - accountants, electricians, hairdressers
57
indirect selling (1-level channel)
- manufacturer -> retailer -> consumer
- large supermarkets buy convenience and shopping goods in bulk direct from manufacturer and have them delivered straight from manufacturer
58
Direct selling through an agent (1-level channel)
- manufacturer -> agent -> consumer
- agent is like a sales representative
- not employed by company, they get commission instead of being paid salary
59
indirect selling (2-level channel)
- manufacturer -> wholesaler -> retailer -> consumer
- traditional distribution channel used for convenience goods
60
multi-channel distribution
- more than one method of selling
- flexibility, wide market coverage
- eg online and instore
61
short-distribution channels
- industrial products
- few customers
- expensive goods
- infrequent sales
- custom-made products
- services
62
long distribution channels
- consumer products
- many customers
- inexpensive
- frequent sales
- standard products
- small products
- goods
63
process elements a business needs to consider
- how convenient
- what is advertised
- how easy are payment methods
- how user-friendly is the website
- how quick is the business to respond
64
what does the physical environment include?
- decor and cleanliness
- appearance of the website
- appearance of staff
- layout
- practicality and safety
