4.1 & 4.2

Question 1

Marketing

Answer 1

The anticipation and identification of consumer wants and needs. Must satisfy these wants and needs in order to make a profit.

Question 2

Market Characteristics

Answer 2

Market Size
Market Growth
Competitors and ease of entry
Differentiated Homogeneous products
Segmentation

Question 3

Market Size

Answer 3

Total level of sales of all producers within a market. Important as manager can assess wether its worth entering.
Can be measured by:
- Volume (units sold)
- Value of goods sold (revenue)

Question 4

Market Growth

Answer 4

Percentage change in the total size of a market (volume or value) over a period of time. The rate of growth can depend on wether the market is saturated or not.

Question 5

Competitors and ease of entry

Answer 5

Ease of entry is the lack of barriers to entry for the establishment of new competitors in a market. Normally, the greater the number of competitors, the easier it is for new ones to join.

Question 6

Differentiated Homogeneous Products

Answer 6

Homogeneous products are goods that are physically identical or viewed as identical by consumers (milk, petrol)
It will be difficult to stand out and charge higher prices.

Question 7

Segmentation

Answer 7

Dividing the market into distinct groups of consumers who share common tastes or requirements.

Question 8

Target Marketing

Answer 8

Focusing marketing activity on particular segments and a specific group/type of people.

Question 9

Mass Marketing

Answer 9

Selling to the whole market using a standardised product and the same marketing activities.

Question 10

Marketing requirements

Answer 10

• Building trust: promises made need to be delivered
• Time for delivering
• Relationships: long term relationships have to be built in order to achieve customer loyalty

Question 11

Consumer Services

Answer 11

The formulation, deformulation, technical, consulting and testing of most consumer products.

Question 12

Product-led Strategies

Answer 12

Businesses are said to be product-oriented when they focus on the product and its production process rather than the wants of the consumer. This works when:
- Lack of competition
- Product is a technological innovation
- Product is of high quality
- Organisation has the confidence and ability to do it (high reputation and high market presence)

Question 13

Market-led Strategies

Answer 13

A market/customer-oriented business which continually identifies, reviews and analyses consumers’ needs. They are able to:
- Anticipate changes in the market
- Respond to changes in the market
- Meet the challenge of competition

Question 14

Social (societal) Marketing

Answer 14

This approach considers not only the demands of consumers but also the effects on all members of society involved in some way:
- Can provide a significant competitive advantage
- Can lead to higher prices being charged

Question 15

Market Share

Answer 15

Percentage of sales in a particular market held by a product/business. Indicates which business is the market leader. Helps evaluate the success or failure of a business.
Market share = (Firms sales in time period / Total market sales in time period) x 100

Question 16

Marketing Objectives for Profit Organisations

Answer 16

• Increase market share
• Increase total sales
• Build customer loyalty
• Attract new customers

Question 17

Marketing Objectives for Non-Profit Organisations

Answer 17

• Maximise revenue from trading activities
• Promote the aims and work of the organisation
• Increase recognition by society

Question 18

Market Planning

Answer 18

The process of formulating appropiate strategies and preparing marketing activities to meet marketing objectives. A formal written document based on clear awareness of merketing trends, competitor’s actions and consumer wants.

Question 19

Marketing Planning Main Elements

Answer 19

• Details of the company’s SMART marketing objectives
• Sales forecast to allow progress of the plan to be monitored
• Marketing budget
• Marketing strategies to be adopted (target market, 4P’s, product positioning map, boston matrix, product life cycle analysis)

Question 20

Marketing Planning Benefits

Answer 20

• Outline stages needed to be completed by marketing department
• Ensures the marketing mix is appropriate and fully integrated (right product, right price, in the right place)
• Helps achieve integration of business functions as all departments
• Ensures appropiate budget is set

Question 21

Marketing Planning Limitations

Answer 21

• Plans that are not revised to meet changing internal and external conditions will become outdated
• Plans are insufficient in their own, they need to be reviewed constantly
• Must be up-to-date, constantly changing

Question 22

The Marketing Mix

Answer 22

The key decisions that must be taken in the effective marketing of a product.
The 4P’s:
Product
Price
Place
Promotion

Question 23

Consumer Profile

Answer 23

A quantified picture of consumers of a firm’s products, showing proportions of age groups, income levels, location, gender and social class.

Question 24

Bases for Segmentation

Answer 24

Geographic
Demographic
Psychographic

Question 25

Segmentation: Geographic

Answer 25

Consumer tastes may vary in different geographical areas. Appropiate to offer different products and market them in “location-specific” ways. E.g clothes in Antarctica and Africa

Question 26

Segmentation: Demographics

Answer 26

Market can be segmented by age, ethnic background, sex, family size, social class. E.g. sports car vs mini van

Question 27

Segmentation: Psychographics

Answer 27

Market can be segmented by lifestyle, personalities, values and attitudes. E.g increase in health conscience increases sales of organic foods

Question 28

Segmentation Benefits

Answer 28

- Ensures appropiate prices are set - Helps develop products that are appropriate to customers and highlights gaps in the market

Question 29

Limitations of Segmentation

Answer 29

- Research and development and production costs may be high as a result of marketing several different products variation - By focusing on one or two limited market segments there is a danger that specialisation could lead to problems if consumers change their purchasing habits

Question 30

Niche Market

Answer 30

A small and specific part of a larger market. Involves identifying and exploiting a small segment of a larger market by developing products to suit it.

Question 31

Niche Market Advantages

Answer 31

This are disadvantages of mass marketing. - Can charge higher prices due to speciality of products - Can avoid competition in the early stages - Can focus on the needs of the consumer in these segments

Question 32

Niche Market Disadvantages

Answer 32

This are advantages of mass marketing. - Larger companies may enter the market and take sales away from the original producer - Can be more variations in customer spendings

Question 33

Product Positioning Map

Answer 33

A graph that analyses consumer perceptions of each of a group of competing products in respect of two product characteristics: Exclusivity Price

Question 34

PPM Uses

Answer 34

- Identifies potential gaps in the market - Helps identify key features of the product that should be promoted heavily - Can be used to monitor the position of existing brands

Question 35

Unique Selling Point (USP)

Answer 35

A factor that differentiates a product from its competitors, such as the lowest cost, the highest quality, or the first ever product of its kind.

Question 36

Benefits of an effective USP

Answer 36

- Effective promotion differentiating product from competitors - Opportunity to charge higher prices - Free publicity due to media reporting on the USP - Higher sales than undifferentiated products

Question 37

How to differentiate from competitors

Answer 37

- Lowest prices - Trust: customer loyalty and repeated customers, higher prices can be charged - Ethical stance: company’s values - Convenience: can attract customers who have busy schedules - Product features