Cap Prep 1 Flashcards
(162 cards)
1
Q
Mass market
A
market for goods produced on a large scale for a significant number of end consumers
2
Q
market for goods produced on a large scale for a significant number of end consumers
A
Mass market
3
Q
the process of appealing to an entire market rather than one targeted group
A
Mass marketing
4
Q
Mass marketing
A
the process of appealing to an entire market rather than one targeted group
5
Q
a segment of a larger market that can be defined by its own unique needs, preferences, or identity that makes it different from the market at large.
A
Niche market
6
Q
Niche market
A
a segment of a larger market that can be defined by its own unique needs, preferences, or identity that makes it different from the market at large.
7
Q
channeling all marketing efforts towards one well-defined segment of the population
A
Niche marketing
8
Q
A market that is in a rapidly changing business environment
A
Dynamic market
9
Q
Dynamic market
A
A market that is in a rapidly changing business environment
10
Q
PESTLE
A
Political, Economic, Social, Technological, Legal and Environmental factors
11
Q
Uncertainty
A
situations in which businesses face risks that can’t be foreseen or measured.
12
Q
situations in which businesses face risks that can’t be foreseen or measured.
A
Uncertainty
13
Q
Anything that threatens a company’s ability to achieve its financial goals
A
Risk
14
Q
Risk
A
Anything that threatens a company’s ability to achieve its financial goals
15
Q
an organized effort to gather information about target markets and customers
A
Market research
16
Q
Market research
A
an organized effort to gather information about target markets and customers
17
Q
A business focused on the quality of the product rather than the needs and wants of the target market
A
Product orientation
eg. Apple
18
Q
Product orientation
A
A business focused on the quality of the product rather than the needs and wants of the target market
Eg. Apple
19
Q
Market orientation
A
The focus on identifying consumer needs and desires in order to define new products to be developed
Eg. Coca Cola
20
Q
The focus on identifying consumer needs and desires in order to define new products to be developed
A
Market orientated
Eg. Coca Cola
21
Q
What is a market
A
Where buyers and sellers meet to exchange goods and services
22
Q
Where buyers and sellers meet to exchange goods and services
A
A market
23
Q
Market segment
A
A subsection of a larger market in which consumers share similar needs and wants
24
Q
A subsection of a larger market in which consumers share similar needs and wants
A
Market segment
25
3 Benefits of mass marketing
- huge potential number of customers
- higher production levels allow low production costs
- can use mass media advertising
26
Economy of sale
Saving in costs by an increased level of production
27
Saving in costs by an increased level of production
Economy of sale
28
3 benefits of niche marketing
-meeting customer needs more precisely allows for higher prices
-higher profit margins
-less competition > higher market share
29
Political change example
Brexit > importing and exporting changes
30
Economic change example
Recession 2008 > price conscious shoppers switched to Aldi and Lidl
31
Social change example
Increase desire for convenience > increase in online retail
32
Technological change example
Apps > turning old markets on their heads such as taxis to Uber
33
Legal change example
Growth in the market for vapes has been met with legislation as to who can buy them and how they’re advertised
34
Environmental change example
Car industry is facing major changes to minimise environmental damage
35
Market segmentation
Splitting up the market to target specific groups of customers who share similar wants and needs
36
the ability to influence consumer perception regarding a brand or product relative to competitors
Market positioning
37
Market positioning
the ability to influence consumer perception regarding a brand or product relative to competitors
38
2 main ways to gain a competitive advantage
- Be lowest cost producer
- find a sustainable point of differentiation
39
Competitive advantage
factors that allow a company to produce goods or services better or more cheaply than its rivals
40
factors that allow a company to produce goods or services better or more cheaply than its rivals
Competitive advantage
41
Product differentiation
Standing out from rivals can be achieved through actual, tangible differences between products or through manipulating consumer perceptions of your product
42
Standing out from rivals through actual, tangible differences between products or through manipulating consumer perceptions of your product
Product differentiation
43
4 Actual product differentiation examples
- design
- functions
- taste
- performance
44
Perceived product differentiation examples
- branding
- advertising
- sponsorship
- celebrity endorsement
45
Adding value
The difference between the cost of bought in goods and the selling price of the product
46
The difference between the cost of bought in goods and the selling price of the product
Adding value
47
2 ways of adding value
- producing in a cheaper way
- using promotional methods to alter consumers perceptions
48
Demand
The level of interest customers have in a product
49
The level of interest customers have in a product
Demand
50
Effective demand
When the interest is backed by the ability for consumers to buy it
Eg. Suitable pricing
51
When the interest is backed by the ability for consumers to buy it
Eg. Suitable pricing
Effective demand
52
Substitute
A similar, rival product that consumers may choose instead
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A similar, rival product that consumers may choose instead
Substitute
54
Complement prouduct
A product whose use accompanied another product
Eg. Petrol to cars
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A product whose use accompanied another product
Eg. Petrol to cars
Complement product
56
Inferior goods
those goods whose demand decreases with an increase in income
Eg. Store branded products
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those goods whose demand decreases with an increase in income
Inferior groups
Eg. Store branded products
58
FAIDES
Fashion - Advetisting - Incomes - Demographics - External shock - Seqsonality
59
Supply
How much of a product a firm/business is willing to produce
60
How much of a product a firm/business is willing to produce
Supply
61
Changes in costs of production
If the cost of making a product changes the supply will change accordingly.
For example if the costs increase the supply will decrease and vice Verser
62
Indirect taxes
Taxes the government put on goods and services, for example VAT
63
Taxes the government put on goods and services, for example VAT
Indirect taxes
64
Government subsidies
When the government encourages the supply of a product (for example wind-powered energy) by giving money to the product we
65
External shocks
Unexpected events such as economic crises or natural disasters
Leads to less supply as there are higher costs for firms
66
Unexpected events such as economic crises or natural disasters
External shock
67
Commodity markets
Markets for undifferentiated products, Generally raw materials such as gold or oil
68
Markets for undifferentiated products, Generally raw materials such as gold or oil
Commodity markets
69
Equilibrium
Describes a situation in a market where supply and demand are balanced
70
Describes a situation in a market where supply and demand are balanced
Equilibrium
71
Prices elasticity of demand (def)
Measures the responsiveness of demand for a product to a change in its price
72
Measures the responsiveness of demand for a product to a change in its price
Price elasticity of demand
73
Price elasticity of demand (formula)
% change in demand
——————————
% change in price
74
% change in demand
——————————
% change in price
Price elasticity of demand
75
Price elastic product =
Negative number greater than 1
Changes in price have large effect on demand/ sales
76
Price inelastic product =
Price elasticity is between 0 and -1
Changes in price have a small effect on demand/sales
77
Price elasticity is between 0 and -1
Changes in price have a small effect on demand/sales
Price inelastic product
78
Negative number greater than 1
Changes in price have large effect on demand/ sales
Price elastic product
79
3 Factors influencing price elasticity
- degree of product differentiation
- availability of direct substitutes
- branding and brand loyalty
80
Direct substitutes
If an item can be easily replaced by another one
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If an item can be easily replaced by another one
Direct substitutes
82
Indirect competitors
when two or more businesses offer different products or services but compete in the same market
Eg. Dominos and McDonald’s
83
when two or more businesses offer different products or services but compete in the same market
Indirect competitors
84
Why is price elasticity important?
Help in forecasting sales by considering likely impact of planned future price changes
Help decide on the best pricing strategy
85
Income elasticity Of demand
Measures the responsiveness of demand for a product to a change in real income
86
Measures the responsiveness of demand for a product to a change in real income
Income elasticity of demand
87
Real income
Amount by which average incomes have adjusted for inflation
88
Amount by which average incomes have adjusted for inflation
Real income
89
Income elasticity of demand (formula)
% change in demand
——————————
% change in real incomes
90
% change in demand
——————————
% change in real incomes
Income elasticity of demand
91
Inferior goods YED
Negative income elasticity
92
Negative income elasticity
Inferior goods
93
Normal goods
Positive income elasticity between 0 and 1
94
Positive income elasticity between 0 and 1
Normal goods
95
Luxury goods
Positive income elasticity over 1
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Positive income elasticity over 1
Luxury goods
97
Indulgences
Things we can easily live without but love to treat ourselves with when we can afford to
Eg. Takeaways
98
Things we can easily live without but love to treat ourselves with when we can afford to
Indulgences
99
Necessities
Basic items that we would expect to buy even when times are tight.
Eg. Pasta or milk
100
Basic items that we would expect to buy even when times are tight.
Necessities
101
Sales forecasting
a projection of future sales revenue and a prediction of which deals will move through the sales cycle
102
a projection of future sales revenue and a prediction of which deals will move through the sales cycle
Sales forecasting
103
Design mix
Aesthetics - function - cost
104
Aesthetics - function - cost
Design mix
105
4 Benefits of good design
-Can add value
-Provide point of differentiation
-improve brand image
-May boost brand loyalty
106
Sustainability
making something using materials that will still be available in the future
107
making something using materials that will still be available in the future
Sustainability
108
Promotion
Describes methods used by a business to communicate information and persuade customers to purchase a product
109
Describes methods used by a business to communicate information and persuade customers to purchase a product
Promotion
110
3 benefits of branding
-Added value
-ability to charge premium price
-reduced PED
111
3 Types of branding
-individual brand
-brand family
-corporate brand
112
Brand
A recognisable name or symbol that helps differentiate a product or business
113
A recognisable name or symbol that helps differentiate a product or business
Brand
114
Individual brand
Single product brands such as marmite
115
Single product brands such as marmite
Individual brand
116
Brand family
A brand name that’s used across a range of related products for example Cadbury.
Benefit of this is using the umbrella name to encourage sales of other products through association
117
A brand name that’s used across a range of related products for example Cadbury.
Brand family
118
Corporate brand
Using the company name as a brand like Nestlé does. It can convince customers that all products across the entire range share benefits.
119
Using the company name as a brand like Nestlé does. I
Corporate brand
120
4 ways to build a brand
-advertising
-sponsorship
-digital media
-USP
121
Unique Selling Point (USP)
A particular feature of a product or service that no rival provides
122
A particular feature of a product or service that no rival provides
Unique selling point (USP)
123
2 pricing strategies for new products
-Price skimming
-Penetration
124
Penetration
Involves launching a new product at a very low price to entice customers to buy it
125
Involves launching a new product at a very low price to entice customers to buy it
Penetration
126
Price skimming
Involved launching a brand new product at a high price while the product is unique
127
Involved launching a brand new product at a high price while the product is unique
Price skimming
128
4 pricing strategies for existing product
-cost plus
-predatory
-competitive
-psychological
129
Cost plus
Involves deciding price by adding a desired percentage into total costs per unit
130
Involves deciding price by adding a desired percentage into total costs per unit
Cost plus
131
Predatory
Sets prices low enough to force a competitor out of business
132
Sets prices low enough to force a competitor out of business
Predatory
133
Competitive
Charging a price at the market average or at a discount to the average price on the market
134
Charging a price at the market average or at a discount to the average price on the market
Competitive
135
Psychological
Prices set just below major psychological levels such as £9.99 instead of £10 to make the product seem cheaper
136
Prices set just below major psychological levels such as £9.99 instead of £10 to make the product seem cheaper
Psychological
137
6 Factors affecting pricing strategy
- Level of product differentiation
-PED
-Level of competition
- Strength of brand
- stage in product life cycle
- costs and need to make a profit
138
Distribution channels
The route a product takes from producer to consumer is called the distribution channel
139
The route a product takes from producer to consumer
Distribution channel
140
Intermediaries
Businesses between the producer and the consumer in a channel. Such as a retailer
141
Businesses between the producer and the consumer in a channel. Such as a retailer
Intermediaries
142
Product life cycle (def)
The product life cycle is a pattern of sales over time that most products tend to follow
143
a pattern of sales over time that most products tend to follow
Product life cycle
144
Product life cycle phases
(R&D)
Introduction
Growth
Maturity
Decline
145
Extension strategies
A medium to long term plan for extending the life cycle of a product
146
A medium to long term plan for extending the life cycle of a product
Extension strategy
147
3 product extension strategies
-Adding extra functions
-changing ingredients/materials
-launching slightly different variations
148
3 promotional extension strategies
- targeting a different market segment
- finding new uses for product
-Increasing use of the product among existing customers
149
Product portfolio
The range of products a business has on offer.
150
The range of products a business has on offer.
Product portfolio
151
Building
Trying to boost sales of a ?
152
Trying to boost sales of a ?
Building
153
Holding
Spending money to maintain market share of ⭐️
154
Spending money to maintain market share of ⭐️
Holding
155
Milking
Taking profits generated by a product without spending heavily 🐄
156
Taking profits generated by a product without spending heavily 🐄
Milking
157
Divesting
Getting rid of products (usually 🐕)
158
Getting rid of products (usually 🐕)
Divesting
159
B2B
where one business makes a commercial transaction with another
160
where one business makes a commercial transaction with another.
B2B
161
B2C
business model of selling products directly to customers and thereby bypassing any third-party retailers, wholesalers, or any other middlemen
162
business model of selling products directly to customers and thereby bypassing any third-party retailers, wholesalers, or any other middlemen
B2C
