Management Of Marketing Flashcards
(50 cards)
1
Q
Describe market segmentation.
A
The breaking down of markets into sub-groups that can be targeted with a specific marketing mix.
2
Q
Identify the 4 P’s?
A
Product, price, place and promotion.
3
Q
Discuss the advantages of market segmentation.
A
- Product: tailor product to target market needs
- Price: offer affordable products/services to your target market
- Place: use appropriate distribution channel (eg: Heinz can use retailer function for max customer reach)
- Promotion: Avoid wasting money on untargeted advertising
- Identifies market gaps
4
Q
Describe market research.
A
The systematic gathering, recording and analysing of data about an organisation’s products and/or services and its target market.
5
Q
Describe why organisations need to use market research.
A
- Anticipate changes in the market.
- Identify changes in customer tastes
- Identify who is buying the product
- Identify new opportunities or products
- Keep ahead of competitors
- Ensure product/services are meeting consumer requirements.
- Identify if the promotion is appropriate
- Ensure products are at the correct price
- Ensure products are being sold in the right place.
6
Q
Identify types of market research.
A
Primary and secondary research.
7
Q
Identify the sources of information.
A
Primary, secondary, internal and external.
8
Q
Describe ethical marketing.
A
This is where firms conduct their marketing practices, such as market research, product development and and advertising in a morally responsible manner
9
Q
Describe examples of poor marketing practice (unethical marketing).
A
- Obtaining market research information without the consumer agreeing to it. Eg: CCTVs in changing rooms
- Selling private information about customers. Eg: from a bank or health records to insurance companies
- Companies agreeing to set an artificially high price for a product. eg: airlines charging insanely high flight prices
- Making false claims in an advert.
10
Q
Describe desk research.
A
- Carried out by a researcher using secondary information in the form of published sources (e.g. government reports, trade journals, financial papers, profit and loss accounts)
- Originally produced by someone else other than the researcher.
11
Q
Discuss the advantages and disadvantages of desk research.
A
Advantages
- There is a wide range of sources to access, so decisions should be more informed
- The information is often cost effective to collect
- Competitors’ information is available to access so the firm has a fuller understanding of the whole market
- Saves the firm alot of time carrying out the research if the information has already been collected, which frees up time for analysis of the data
Disadvantages
- As competitors get access the information is not unique
- The information can be out-of-date
- It can be difficult to test the accuracy of the information
- The information may contain bias such as an one-sided political opinion and so is misleading.
12
Q
Describe field research.
A
- This is carried out by a researcher ‘in the field’ to obtain first-hand, specific information for an organisation to use.
- The researcher goes out into the market and obtains the information her/himself.
13
Q
Describe the different methods of primary research.
A
- Focus group: led by a chairperson to encourage open discussion with selected participants.
- Telephone survey: involving a market researcher phoning people at home and asking questions
- EPOS: information about customers’ buying habits recorded by computerised system at till
- Test Marketing: launching a new product in a regional area. If successful, it is launched nationally.
14
Q
Describe the Product element of the marketing mix.
A
The product element of the marketing mix involves;
• Product Development
• Packaging
• Branding
• Product Life Cycle
Product can also mean service offered.
15
Q
Describe the three main aims of promotion.
A
- Persuading: so a consumer purchases the product
- Informing: telling consumers about the product
- Reminding: that the product still exists
16
Q
Identify the main types of promotion.
A
Above the line
Below the line
17
Q
Describe three stages of product development.
A
-
Generation of ideas
- Brainstorming and market research, identify target market
-
Test product
- Making sure products are functional, safe, reliable and fit for purpose
- Apply for patent/trademark
-To ensure competitors do not copy the product.
18
Q
Describe how can above the line promotion be used.
A
Informative Adverts: used to increase awareness of the product/service and to inform the customer about the product/service
Persuasive Adverts: used to persuade customers to buy a product, emphasising it’s desirability.
Product Placement: when a firm pays for it’s product to be used in films or T.V. programmes
Product Endorsement: when celebrities are paid to wear and use a companies products
19
Q
Discuss the advantages and disadvantages to product endorsement.
A
Advantages
- People want to buy products associated with the celebrity
- As the celebrity succeeds then so can the product
Disadvantages
- Can be a very expensive method of promotion
- Celebrity chosen has to match the image of the product
- Negative publicity from the celebrity can damage the reputation and sales of your product.
20
Q
Describe the development stage of a product.
A
- R&D of the product, e.g. market research and developing a prototype
- No sales, high costs,no profit
21
Q
Describe the introduction stage of a product.
A
- Product is launched onto the market. Heavy advertising and sales will begin to rise
- Sales are low and costs are high. Revenue used to pay high costs of R&D, so no profit
22
Q
Describe the growth stage of a product.
A
- Product has gained consumer awareness
- Rapid sales growth and profits begin to grow at a faster rate
23
Q
Describe the maturity stage of a product.
A
- Sales move toward a peak, rate of sales growth slows
- High sales and high profits
24
Q
Describe the saturation stage of a product.
A
- Sales growth levels out, neither increase or decrease
- Profits and sales at their highest point
25
Describe the decline stage of a product.
- Still making **sales** but the begin to **decrease**, eventually leading to **withdrawal** from market
- **Profit falls with sales**, before **losses** are incurred.
26
Discuss the advantages and disadvantages to advertising through TV media.
**Advantages**
- Can **target advert** to **reach viewers** of a show
- Reaches a **global audience**
- **High impact** with the **visuals**
- easier to **remember**
**Disadvantages**
- **Expensive** to make and show
- **Target audience** may **NOT** be **watching**
- Message is **short-lived**
- Viewers channel surf
27
Outline how companies extend the maturity stage of the product life cycle.
- **Improve the product** - Manufacturers will often produce, what they claim to be, **new and improved versions** of their products
- **Change the packaging** - To appeal to a different **market segment**
- Change the **channel of distribution** - e.g. the introduction of internet shopping
- Change **product prices**
- Change the **promotional activities**
- Change the **use** the customers have for the product
- **Rebrand** the **name** of the product
- Produce **line extensions**
28
Discuss the advantages and disadvantages to advertising through radio.
**Advantages**
- **Cheaper** to **advertise** than TV
- Can **target** advert to **reach listeners** of a show
**Disadvantages**
- Seen as “**audio wallpaper**” and so listeners **don’t change** the **channel** as much
Can’t **show** a new **product** and so have to rely on a listeners **imagination**.
29
Describe the definition of a product portfolio.
The **range of products** a firm produces
30
Discuss the advantages of a varied product portfolio.
- It can appeal to **different market segments**
- It can have a more **well known** profile
- It can increase potential **sales revenue**
- It may **dominate** the market
- Helps an business **cope** with products that are **only demanded during certain seasons** e.g. Creme Eggs
- Risk of **business failure** is **spread**
31
Discuss the advantages and disadvantages to advertising on social media.
**Advantages**
- Can reach a **global** audience
- **24/7** advertising possible
- Customers can **express their response** to the ad eg “like” on Facebook
**Disadvantages**
- Message can be **short-lived**
- Customers can “**skip ad**”
- Ad can be **ignored** as the customer is reading something else
32
Discuss the advantages and disadvantages to advertising on billboards.
**Advantages**
- **Captures** audiences whilst at traffic lights
- Has **high impact** as the **image** is of a **large size**
**Disadvantages**
- Billboards can **deteriorate** with **weather** and so image suffers
- Can be **vandalised** and so image is, again, reduced
- Only **writing** and **minimal movement** and so impact is reduced
33
Discuss the disadvantages to a varied product portfolio.
- Costs of **promoting and advertising** lots of different products, therefore could **impact profits**
- If **one** product receives a **bad reputation** or image this might impact on **all** the products being sold in the business
- Maintaining a varied product portfolio will involve a **cost of R&D**
- Costs of **purchasing machinery** and maintain it for different types of products
- Staff require **training** on various features of products can be **time-consuming** and **expensive**
34
Describe the definition of branding.
A brand is a **name, symbol, design or combination** of these given to a product(s) which is intended to **identify** the goods produced.
35
Discuss the advantages of branding.
- Easier to launch **new** products with the same brand name.
- **Higher prices** can be charged.
- Customers may become **brand loyal**
- Brand manufacturers can **save money** on marketing.
36
Discuss the disadvantages of branding.
- Can be susceptible to **copies** or **fakes**
- One **poor brand** could affect the **whole range** of products produced by the company.
- Advertising, R&D costs can be **high** to maintain a **high profile** public image.
37
Define an own label/brand.
An own label/own brand refers to a retailer’s **own product** which may be the retailer’s own name.
- Tend to require **little advertising**.
- Tend to be **less expensive** (good during an economic downturn).
- May be seen to be of **inferior quality** to the branded product.
38
Identify the factors that influence price.
- **Competitors’** prices
- Cost of **production**
- **Profit** expected
- **Market segment** the product is aimed at
- The **place** the product is sold
- The state of the **economy**
39
Describe cost-plus pricing.
- Where a business makes a **profit** by **marking up** a product
- **Covers cost of production** and **ensures a profit** on each unit sold.
40
Define Public Relations (PR).
**Managing** the **communication** between an **organisation** and its **stakeholders**.
41
Describe competitive pricing.
- The price charged is **lower** than the price of your **competitors**
- Encourages customers to **buy from you** rather than competitor’s
42
Describe examples of PR.
Improving the image of the product and organisation
**Supporting** and promoting a **charity**
**Sponsoring** sporting or cultural **events**
**Product endorsement** by celebrities
**Press conferences** and press **releases** in times of difficulty or when good publicity can be obtained
**Company visits** – arrange and host members of the public around the business
**TV/radio**:appearance
**Sponsorship** (e.g. local football team)
Provide **company merchandise** (pens, mugs etc.).
43
Outline different pricing strategies a business uses.
**Loss leader pricing**: Firm will **lower** certain prices of products so they make a **loss** on them, to **entice customers** into **buying products** that make **profit**.
**Penetration pricing**: a low price is charged for a new product. Once that product gains traction and loyalty, the company will increase price.
**Promotional pricing**: company **lowers** product **price** for **limited time**. After gaining **popularity** and **customer loyalty**, prices will **increase** again.
**Skimming pricing**: **high price** charged for **unique product**. Once **competitors enter** market, **prices** are decreased to **match** them. Allows for **max profit**at the start.
44
Describe why packaging is important for a product
• **protecting** products from being damaged during transportation;
• helping to keep products **fresh**
• providing **legally required** information, e.g. nutrition.
• packaging will be designed to reflect **product branding**, e.g. choice of colours and fonts;
• packaging will be designed to appeal to the **target market**, e.g. choice of images and materials.
45
Discuss advantages and disadvantages of using road to distribute goods.
**Advantages**
• The only method which allows for **direct** door-to-door delivery
• A relatively **quick and cheap** method for delivering across **short** distances
**Disadvantages**
• Traffic jams and bad weather can cause **delays**
• Only transports a relatively **small quantity** of goods
46
State the definition of e-commerce.
E-commerce is the **buying** and **selling** of products and services **via the internet**.
47
Discuss the advantages and disadvantages of using rail to distribute goods.
**Advantages**
• **Large quantities** of goods can be transported
• Relatively **environmentally friendly**
**Disadvantages**
• Distribution is **limited** by where there are stations to stop at
• Goods still have to be transported to the customer **from the train station**
48
Discuss the advantages and disadvantages of using sea to distribute goods.
**Advantages**
• A much **larger quantity** of goods can be transported around the world than a **plane**
• **Cheaper** than air travel
**Disadvantages**
• **Very slow** compared to air travel
• Goods still have to be transported to the customer **from the port**
49
Discuss the advantages and disadvantages of using air to distribute goods.
**Advantages**
• The **quickest** method for transporting goods **globally**
• Planes can reach **some parts** of the world that other methods **cannot**
**Disadvantages**
• Very **expensive**
• A **very high** carbon footprint
• Goods still have to be transported to the customer **from the airport**
50
Discuss the advantages and disadvantages of e-commerce.
**Advantages**
- Consumers **across the world** can **buy** from the business, which results in **increased customers**.
- Customers can **buy** at **whatever time** is **most convenient** to them, which will **increase sales**.
- Businesses **do not pay rent** or buy fixtures and fittings for **physical premises**, which **reduces costs**.
- Websites can **display** an **unlimited number of products**, which **improves customer choice + satisfaction**.
**Disadvantages**
- Customers **cannot see or handle** products **before buying** them, which result in businesses spending a lot of **time processing returns** and **refunds**.
- There are **high initial costs** in creating a **high-quality** website
- **Increased competition** as businesses now have to complete with **online competitors** across the world, which could result in a **loss of customers**.
- Ongoing **maintenance** and **updates** of **websites** and **associated technology** can be **expensive**.
