Management of Marketing Flashcards
(179 cards)
1
Q
What is a market-led business?
A
A business that develops products based on customer wants and conducts high levels of market research.
2
Q
What characterizes a product-led business?
A
A business that produces products it believes customers will want and tries to convince them to buy it, often with little market research.
3
Q
What is consumer behavior?
A
The thoughts and actions of consumers when purchasing products.
4
Q
Why do consumers buy products?
A
Due to need/want, social status, or as a gift for someone else.
5
Q
What are the types of consumer purchases?
A
- Routine/habitual buying
- Impulse buying
- Informed purchases
6
Q
How do consumers typically purchase products?
A
They may pay with cash, credit card, or store credit.
7
Q
Where do consumers purchase products?
A
Retail outlets, e-commerce, and catalogues.
8
Q
What is market research?
A
Essential for anticipating and identifying customer needs and wants, especially for market-led businesses.
9
Q
What are the two main types of market research?
A
- Field research
- Desk research
10
Q
What is desk research?
A
Researching and analyzing information that has already been gathered.
11
Q
What are some advantages of desk research?
A
- Timely
- Cost effective
- Available
12
Q
What are some disadvantages of desk research?
A
- Not objective
- Not appropriate
- Not concise
13
Q
What is field research?
A
Gathering brand new information suitable for the business’s exact needs.
14
Q
What are some advantages of field research?
A
- Complete
- Timely
- Appropriate
- Accurate
15
Q
What is random sampling?
A
A method where the sample is picked randomly from a population.
16
Q
What are some advantages of random sampling?
A
- No bias is shown
- Saves time in selection
17
Q
What are some disadvantages of random sampling?
A
- May not reflect target market
- Can be expensive
18
Q
What is quota sampling?
A
The researcher chooses from a group of people with certain characteristics.
19
Q
What are some advantages of quota sampling?
A
- Quick and easy method
- Can select customers reflecting the target market
20
Q
What are some disadvantages of quota sampling?
A
Exact sample from each group is not randomized, leading to potential researcher bias.
21
Q
What is a telephone survey?
A
A market researcher calls customers to ask questions.
22
Q
What are some advantages of telephone surveys?
A
- Easy to target specific customers
- Information obtained immediately
23
Q
What are some disadvantages of telephone surveys?
A
- Customers may find them intrusive
- Only short surveys can be conducted
24
Q
What is a postal survey?
A
A survey sent to customers through the mail for completion.
25
What are some advantages of postal surveys?
* Easy to target specific customers
* Customers can complete at their convenience
26
What are some disadvantages of postal surveys?
* Questions must be simple
* Customers may ignore them as junk mail
27
What is an online survey?
A survey conducted via a website or email.
28
What are some advantages of online surveys?
* Can survey a large geographical area
* Easy to collate and analyze results
29
What are some disadvantages of online surveys?
* Responses may be too brief
* Requires internet access
30
What is a personal interview?
Conducted as a street survey or by visiting customers at their homes.
31
What are some advantages of personal interviews?
* Allows two-way communication
* Can respond to body language and tone
32
What are some disadvantages of personal interviews?
* Time-consuming
* Customers may find them annoying
33
What are hall tests?
A product is given to customers to try, and feedback is collected.
34
What are some advantages of hall tests?
* Good-quality feedback
* Inexpensive and easy to do
35
What are some disadvantages of hall tests?
* Difficult to analyze opinions
* Customers may feel pressured to give positive feedback
36
What are focus groups?
A group of customers discusses questions posed by a market researcher.
37
What are some advantages of focus groups?
* In-depth feedback
* Participants are more likely to provide considered responses
38
What are some disadvantages of focus groups?
* Participants may be paid, increasing costs
* Strong personalities can dominate discussions
39
What is a consumer audit?
A method used to monitor customer habits and influences over time.
40
What are some advantages of a consumer audit?
* Identifies customer trends
* More detailed feedback can shape future changes
41
What is test marketing?
Launching a new product in a regional area to monitor reactions.
42
What are some advantages of test marketing?
* Changes can be made before wider launch
* Saves money if unsuccessful
43
What are some disadvantages of test marketing?
Customer tastes in one area may not represent the wider market.
44
What is electronic point of sale?
Information on customer preferences is gathered through loyalty cards.
45
What are some advantages of electronic point of sale?
* Gathers vital information on consumer behavior
* Allows for tailored promotions
46
What are some disadvantages of electronic point of sale?
* Expensive to set up
* May lead to incomplete information
47
What is the marketing mix?
The combination of product, price, place, promotion, people, process, and physical evidence.
48
What is the product life cycle?
The stages a product goes through from development to decline.
49
What happens during the research and development stage?
The product is still being researched, and prototypes are tested.
50
What is the impact on sales during the introduction stage?
Sales are slow as customers are unsure of the product.
51
What is the impact on profits during the growth stage?
Profits start to be made as sales rise rapidly.
52
What happens during the maturity stage of the product life cycle?
Sales growth peaks, and competition enters the market.
53
What is the impact on sales during the saturation stage?
Sales begin to fall as consumers switch to competitor products.
54
What is the impact on profits during the decline stage?
Profits continue to fall, and products may be sold at cost.
55
What are extension strategies?
Methods to inject new life into a product as sales decline.
56
What is a product portfolio?
A business's range of products for sale.
57
What are product line portfolios?
Having a variety of similar products on sale.
58
What are diversified product portfolios?
Having products across completely different market segments.
59
What are some advantages of product portfolios?
* Spread risk over different markets
* Meet needs of different market segments
* Increase brand awareness
60
What are some disadvantages of product portfolios?
* High research and development costs
* High marketing costs
* Bad publicity can affect the whole portfolio
61
What is the Boston Matrix?
A tool used to analyze a product portfolio based on market share and market growth.
62
What are stars in the Boston Matrix?
Products with high market share in a high-growth market.
63
What are cash cows in the Boston Matrix?
Products with high market share in a low-growth market.
64
What are question marks in the Boston Matrix?
Products with low market share in a high-growth market.
65
What are dogs in the Boston Matrix?
Products with low market share in a low-growth market.
66
What is the cost-plus pricing strategy?
Calculating the unit cost of a product and adding a percentage mark-up for profit.
67
What is competitive pricing?
Setting a product's price similar to competitors.
68
What is skimming pricing?
Setting a high initial price that lowers over time.
69
What is penetration pricing?
Setting a low initial price that increases over time.
70
What must elements of the marketing mix be better than to ensure sales?
Competitors
71
What is skimming in pricing strategy?
The price is set high to begin with and lowers over time
72
What is one advantage of the skimming pricing strategy?
* Sufficient hype around a new product enables high prices to be charged
* Lack of competition allows maximum prices to be charged
73
What is a disadvantage of the skimming pricing strategy?
* High initial prices can put off some customers
* Technique results in low initial sales numbers
74
What is penetration pricing?
The price is set low to begin with and increases over time
75
What is an advantage of penetration pricing?
* Encourages customers to try a new product
* Hopes to gain repeat custom once the price rises
76
What is a disadvantage of penetration pricing?
* Very little profit can be generated during the initial low-price period
* Could result in a price war if competitors set lower prices too
77
Define price discrimination.
Prices are altered depending on discriminating factors (age, time of day etc)
78
What is one advantage of price discrimination?
* Ensures products appeal to different market segments
* Allows for high profit margins on some price brackets
79
What is a disadvantage of price discrimination?
* Harder to budget for sales revenue in advance
* Loss in potential revenue from selling at a cheaper price
80
What is destroyer or predatory pricing?
The price is deliberately set extremely low for a period of time to force out competitors
81
What is one advantage of destroyer pricing?
* Competitors are forced out of the market, then prices can increase again
* Increases market share
82
What is a disadvantage of destroyer pricing?
* Can only be used by larger companies that can afford to make losses whilst prices are low
* This illegal practice could breach the CMA’s anti-competition legislation
83
What are loss leaders?
A promotional price of one or more products is set unprofitably low to entice customers to buy other products
84
What is one advantage of using loss leaders?
* Creates greater footfall
* Encourages customers to repeat purchases
85
What is a disadvantage of loss leaders?
There is a risk that some customers will only buy the loss leaders, impacting on profits
86
What is psychological pricing?
The price is set just below the next rounded number (£49.99)
87
What is one advantage of psychological pricing?
* Makes the customer think the product is much cheaper than it actually is
* Products fit price bands that customers have set in mind
88
What is a disadvantage of psychological pricing?
* Calculating total money owed or giving change can be more difficult
* Some customers may ignore the attempt at making the product seem cheaper
89
What factors affect pricing strategies?
* Target market for the product
* Demand for the product
* Objectives of the business
* External factors
* Cost of the product
90
What is the definition of channels of distribution?
The possible routes taken by a product to reach the consumer from the manufacturer
91
What are some factors affecting the channel of distribution?
* Finance available
* Desired image for the product
* Shelf life of the product
* Legal restrictions
* Stage of the product life cycle
* Technical qualities of the product
92
What is direct selling?
Selling direct to the consumer from the manufacturer
93
What is one advantage of e-commerce?
* Customers in the global market can be reached 24/7
* An entire range can be shown online
94
What is a disadvantage of e-commerce?
* It can take a lot of time and expense to design attractive, high-quality websites
* Customers might be wary of providing their personal details online
95
What is mail order?
A business sells its products using a catalogue, which is usually sent directly to the customer
96
What is one advantage of mail order?
* Credit facilities are often offered to customers
* Customers can browse for products and place orders from home
97
What is a disadvantage of mail order?
Mail order only companies save money on staffing and store costs
98
What is direct mail?
A business posts letters, leaflets and brochures directly to the customer
99
What is one advantage of direct mail?
* Specific market segments can be targeted
* A wide geographical area can be targeted
100
What is a disadvantage of direct mail?
* Customers can perceive this as junk mail and simply throw it away
* Customer mailing lists can quickly become out of date
101
What is personal selling?
A salesperson sells products directly to the customer, often by going to door or over the phone
102
What is one advantage of personal selling?
* Allows a demonstration or explanation of the product to be given
* Feedback on the products can be gathered from the customers
103
What is a disadvantage of personal selling?
Customers can find this type of selling a nuisance
104
What are shopping channels?
A business sells products on the TV using dedicated shopping channels
105
What is one advantage of shopping channels?
* Customers can see products being modeled and demonstrated
* Customers can be encouraged to buy on impulse
106
What is a disadvantage of shopping channels?
* Customers need to switch on to the channel before they can be targeted
* Customers need to wait for products to arrive
107
What is one advantage of retailers?
* Retailers are located close to customers
* Retailers often promote the product for the manufacturer
108
What is a disadvantage of retailers?
* Retailers take a cut of the profits
* Retailers may alter the price of the product
109
What are hypermarkets and superstores?
Massive supermarkets that sell many goods and services under one roof
110
What is an advantage of hypermarkets?
* Most hypermarkets are open 24/7
* A huge range of products is offered to customers
111
What is a disadvantage of hypermarkets?
Lack of competition from high street stores can lead to poorer quality products
112
What are convenience supermarkets?
Smaller supermarkets appearing in convenient locations due to changing work patterns
113
What is one advantage of convenience supermarkets?
* Cater for the changing needs of customers
* Prices can be slightly higher due to the convenience factor
114
What is a disadvantage of convenience supermarkets?
Limited choice of products due to smaller store sizes
115
What are out of town retail parks?
Found on the outskirts of major towns with good infrastructure
116
What is one advantage of out of town retail parks?
* Infrastructure attracts customers
* Larger store sizes mean a good product range for low prices
117
What is a disadvantage of out of town retail parks?
Limited choice of stores compared to high street shopping
118
What are online retailers?
Retailers that sell products through the internet
119
What is one advantage of online retailers?
* Products can be sold worldwide
* Products can be sold 24/7
120
What is a disadvantage of online retailers?
Customers can't try or touch the product before buying
121
What are discount stores?
Stores that sell products for rock-bottom prices
122
What is one advantage of discount stores?
Products are sold for rock-bottom prices, attracting value-seeking customers
123
What is a disadvantage of discount stores?
Limited product range compared to other retailers
124
What are department stores?
Stores that sell a huge variety of items from clothing to home furnishings
125
What is one advantage of department stores?
* Many target markets can be catered for
* Central locations attract customers
126
What is a disadvantage of department stores?
More department stores are closing due to high rents
127
What are wholesalers?
Businesses that sell goods to smaller retailers or direct to customers
128
What is one advantage of wholesalers for manufacturers?
* Packaging and displaying of goods is carried out by the wholesaler
* Wholesalers buy in bulk, saving on delivery costs
129
What is a disadvantage of wholesalers for manufacturers?
Manufacturers make less profit as a cut is taken by wholesalers
130
What is one advantage of wholesalers for retailers?
* Retailers can save on storage facilities by buying smaller quantities
* Retailers can benefit from promotion offered by wholesalers
131
What is a disadvantage of wholesalers for retailers?
It is more expensive than going directly to manufacturers
132
What are into the pipeline promotions?
Sales promotions offered by the manufacturer to encourage retailers to purchase products
133
What is one method of into the pipeline promotions?
* Trade Credit
* Point of Sale materials
* Sale or return
* Dealer loaders
* Staff training
134
What is trade credit?
Manufacturers offer retailers credit to pay for goods at a later date
135
What is one advantage of trade credit?
No cash is required to stock products
136
What is a disadvantage of trade credit?
This could lead to bad debt if retailers are unable to sell the goods
137
What are out of the pipeline promotions?
Sales promotions offered by the retailer to encourage customers to purchase products
138
What is one method of out of the pipeline promotions?
* Special offers
* Free Gifts
* Vouchers/coupons
* Loyalty Schemes
* Interest free credit
* Free trials/sample packs
* Competitions
* Trade shows and events
139
What are special offers?
Short term promotions on selected items
140
What is one advantage of special offers?
Encourages customers to try new products
141
What is a disadvantage of special offers?
Customers may feel pressured into buying more than they need
142
What is public relations?
The act of controlling the image of a business that is perceived by the public
143
What is one advantage of press conferences?
Businesses can send a message or update to a wide audience while keeping control
144
What is a disadvantage of press conferences?
Could have to face difficult questions and be put on the spot
145
What is a press release?
Media are provided with a written account of a business’s noteworthy activities or events
146
What is one advantage of a press release?
Can be used to counteract bad publicity
147
What is a disadvantage of a press release?
Businesses can send out messages or updates without being subject to further questions
148
What is a press release?
A written account of a business’s noteworthy activities or events, which may include updated mission statements.
## Footnote
Press releases can counteract bad publicity and allow businesses to communicate without further questioning.
149
What is an advantage of press releases?
Can be used to counteract bad publicity.
## Footnote
Businesses can send out messages or updates without being subject to further questioning.
150
What is a disadvantage of press releases?
Can take a long time to ensure wording is perfect if under pressure due to a mistake.
## Footnote
The timing of the release is crucial in crisis situations.
151
What are the advantages of donating to charity?
* Promotes CSR aims of the business
* Can make the business seem ethical
* Helps achieve a positive image
## Footnote
Donations can be anonymous or used for PR events.
152
What is a disadvantage of donating to charity?
Some shareholders may prefer money invested in growing the business.
153
What is sponsorship?
Paying to sponsor an event, team, or venue, popular in the sporting industry.
## Footnote
Sponsorship can enhance brand visibility and customer popularity.
154
What are the advantages of sponsorship?
* Benefit from the successes of those sponsored
* Become popular with customers supporting the event
## Footnote
Sponsorship can create a positive association with successful events.
155
What is a disadvantage of sponsorship?
It can be costly to sponsor big events.
## Footnote
Negative associations can arise if the sponsored entity has bad PR.
156
What are company visits?
Opening factories to the public for a limited time.
## Footnote
This allows customers to see how the business operates.
157
What is an advantage of company visits?
Customers get a sense of what the business is like and how it is run.
158
What is a disadvantage of company visits?
A dedicated staff member or team will have to show visitors around, affecting productivity.
159
What is promotional merchandise?
Giving out free items like stationery, key rings, or golf balls with company branding.
## Footnote
This is a method to increase brand awareness.
160
What are the advantages of promotional merchandise?
* Customers are reminded of the company
* Free gifts enhance customer loyalty
* Can lead to repeat exposure through shared items
## Footnote
Items like pens can be passed on to others.
161
What is a disadvantage of promotional merchandise?
Merchandise can be expensive to provide and has no immediate return.
162
What does product endorsement involve?
Using celebrities to promote products.
## Footnote
This strategy leverages celebrity influence to boost sales.
163
What are the advantages of product endorsement?
* Increases likelihood of purchase among fans
* Free advertising when celebrities use products
* Positive media coverage enhances product visibility
* Higher prices can be charged
* Brand loyalty can be created
## Footnote
Celebrity endorsements can create exclusivity.
164
What are the disadvantages of product endorsement?
* Negative publicity can harm the product's image
* Can be expensive to secure endorsements
* Poor celebrity performance can lower sales
## Footnote
Endorsements can backfire if the celebrity's reputation falters.
165
What is product placement?
Paying for products to appear in films, TV shows, or video games.
## Footnote
This method generates awareness through entertainment.
166
What are the advantages of product placement?
* Generates worldwide awareness
* Subliminal advertising allows for unobtrusive promotion
* Characters can create positive associations with products
* Can lead to merchandise spin-offs
## Footnote
Successful placements can significantly boost product sales.
167
What are the disadvantages of product placement?
* Exposure time can be very short
* Can be costly due to bidding wars
* Negative associations can deter customers
## Footnote
Poorly timed placements may not resonate with audiences.
168
What factors affect methods of promotion?
* Target market
* Finance available
* Marketing mix
* Ethical practices
## Footnote
Each factor plays a critical role in determining promotional strategies.
169
What does the 'People' element of the extended marketing mix refer to?
Who is representing a business or brand, particularly customer-facing staff.
170
What are methods to ensure the 'People' element is successful?
* Train staff well
* Regularly update staff on developments
* Ensure rigorous selection methods
* Monitor staff performance
* Provide effective after-sales service
## Footnote
Training and monitoring are key to maintaining a positive customer experience.
171
What does the 'Process' element of the extended marketing mix refer to?
How a customer receives a service, such as booking or purchasing.
172
What are methods to ensure the 'Process' element is successful?
* Well-staffed outlets and call centers
* Live chat or FAQs on websites
* Empower customer-facing staff
* Regularly assess processes
* Introduce latest technologies
## Footnote
Streamlining processes enhances customer satisfaction.
173
What does 'Physical evidence' refer to in the extended marketing mix?
What customers see that gives them clues about a business's image.
174
What are methods to ensure the 'Physical evidence' element is successful?
* Modern and clean premises
* Ambiance matching product/service
* Promote customer feedback and testimonials
* Careful website design
## Footnote
Physical evidence can greatly influence customer perceptions.
175
How is technology used in marketing?
* Market information from surveys
* Online advertising
* E-commerce for sales
* Social media for interaction
* Databases for customer information
* Apps for engagement
* SMS for promotions
* Digital displays for ads
* 3D in advertisements
## Footnote
Technology enhances outreach and customer engagement.
176
What are the advantages of using social media for businesses?
* Direct contact with the target market
* Immediate updates on promotions/products
* Targeted marketing based on user data
* Consumer feedback for product improvement
* Free to use
## Footnote
Social media allows for dynamic communication with customers.
177
What are the disadvantages of using social media for businesses?
* Difficult to engage new customers
* Time-consuming to manage effectively
* Negative feedback can deter potential customers
## Footnote
Managing a social media presence requires dedicated resources.
178
What are the advantages of using apps for businesses?
* Targeted promotions based on user behavior
* Users can share experiences on social media
* Integrated services enhance usability
* E-commerce capabilities increase sales potential
* Quick updates on products and offers
* Engaging content like games and videos
## Footnote
Apps can create an interactive experience for users.
179
What are the disadvantages of using apps for businesses?
* Requires mobile signal for use
* Limited information due to screen size
* Development costs can be high
* Short shelf life for many apps
* Security concerns regarding purchases
## Footnote
App usage can be limited by technical and financial barriers.
