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market segmentation Flashcards

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1
Q

market segmentation definition

A

dividing market into groups of buyers

consumers in each segment share one characteristic e.g age, income

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2
Q

names of different segments

A

demographic segments-age, gender

geographic segments-neighbourhood, city, country

income segments-lower income vs higher income customers

behavioural characteritsics-lifestyle, hobbies and interests e.g into gym so want high protein content

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3
Q

makret mapping

A

measuring two extremes

adv-can reveal gaps in market
adv-can see how much consumers are willing to pay
adv-can see who closest competitors are

dis-subjective, what one person sees as high quality another may not
dis-simply things too much,e.g not mentioning locations within map

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4
Q

competitive advanatge

A

condition which allows firm to be more profibatble than its rivals

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5
Q

ways in whcih businesses can gain competitive advantage

A

USP/product differentiation
good customer services
innovation
advertising and branding
after sales services
lowerr costs

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6
Q

added value

A

increasing the differene between how much the product is sold for ahe price customers pay

added value=price porduct sold for-cost of making product

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7
Q

supply

A

quantity of a product that suppliers are willing and able to supply to a market

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8
Q

demand

A

quantitiy of a product that consumers want and are able to buy in given price at given time

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9
Q

factors affecting demand

A

substitutes-porducts that replace another product e.g increase in price ofo margarine, increase in demand for butter
advertising and branding-allows consumers to be loyal and make repeated purchases to stop demand falling
demographics-changes in population e.g increase in healthcare means increase in demadn as people living till older
fashio tastes and advnaces in technology
a
consumer income-lower income will increase demand for cheaper goods, high income will increase income for expensive products
external shocks-risk of flooding increases demand for sandbags

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10
Q

factors affecting supply

A

cost of prodcution-if cost of production rises to make product becomes more expensive to manufacturer prodcut, business will want to make less, reduce supply

indirect taxes-tax is placed on good, makes it more expensive to produce, reducing supply
subsidies-if subsidies given, increase demand as have more money
new technology-more efficient so cheaper, increase supply
external shocks-e.g war, spend more on efforts of war so reduction in supply
d

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11
Q

price elastic products

A

when price elaticity of demand is greater then 1

changes in price have big effect on demand e.g luxury products

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12
Q

price inelastic products

A

when price elastcity of demand is less than 1

changes in price have little effect on demand e.g neccessity

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13
Q

how do you calculate sales revenue

A

selling price x sales volume

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14
Q

income elasticy of demand calculation

A

percenatge chnage in quanity demanded divided by percenatge change in income

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15
Q

what type of income easlticy of demand do neccesity have

A

have postive income elasicy of demand which is less than 1

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16
Q

design mix

A

function-whether its fit for purpose
aestethics-does it look good
costs-is it costly to produce

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17
Q

promotion

A

part of marketing mix

used to help persuade consumers to buy products

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18
Q

what is viral makreting

A

when businesses get users to pass on adverts to their freinds e.g through social networking platforms e.g email

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19
Q

what are sales promotion

A

using free gifts, special offers, buy 1 get 1 free

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20
Q

direct marketing

A

marketing sold through post to consumers

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21
Q

what are the 3 types of branding

A

cooperate branding-how a business presents itself to customers
adv-trust will assume products are of a high quality

product branding-inidividual prodcts that the cooperate brand makes
adv-people willing to pay for a trusted well known brand
dis-expensive to pporcue and people may not be willing to pay high price its charged at

own branding-bradning from in house
adv-reduces costs, cheaper to produce as no distinctive logo
adv–cheaper alternative for consumers
dis-people may associate low price as being low quality, losing sales
dont get same sense of wellbeing as they do when getting own brand product

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22
Q

what is rebranding

A

changing design, promotion and pricing of existing brand

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23
Q

adv of creating strong brand

A

adds value to product allowing business to charge highe prices
makes product less price elastic
people become more loyal to brand
assume its higher quality

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24
Q

what are ways to build a brand

A

have a USP e.g prodcut differentiation advertsing

sponsorships

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25
emotional branding
where business matches bradning of product with values, inspiratiosn of tagret audience to trigger an emotional response
26
what are the 6 methods of pricing stregties
price skimming penetration pricing cost plus pricing predatory pricing competive pricing psychological pricing
27
price skimming
first use high initial price then slowly reduce price after year or so adv-can quickly recover makreting and development costs adv-people may associate the high price as being higher quality so are willing to pay price adv-feel of being the first one, see it has having lots of value, boosting products image dis-poeple may not be willing to pay high price dis-those that payed initial high price may be furstarted that peole are now getting iit for cheaper price less liely to purchase agin sales are lost
28
penetration pricing
when products are sold at low price when reach makret, then sloly increased adv-low prices attract lots of consumers and gain market share dis-hard to keep consumers in long term as may not be willing to pay the higher price now charged/may lsoe customerrs dis-may damage how the brand image is perceived
29
cost plus pricing
when firm adds a percenage mark up to costs of making or buying a single product unit cost plus unit cost divied by 1-- timees mark up
30
predatory pricing
where firm delibertly lowers there cots to push another firm out and then increases the prices back up again illegal in EU laws
31
compeitive pricing
firm monitors prices of competitiors tand their reduces their pirces to below or eual to comeptiors to gain comeptive advanatge
32
psychological pricing
using 1.99 as seen as lot cheaoer then 2 porund chrage higher prices as people associate as being higher quality
33
changes in social trends affecting pricing strategies of firms
businesses may need to make themselves more price competitve sas easier for customers to comapre prices and pick cheaper price
34
distribution
route a product takes from maufactuer to consumer
35
two stage channel-direct selling
direct selling or ecommerence manufacturer-consumer
36
indirect selling-3 stage channel
manufactruer-retailer-consumer conveint stores
37
indirect selling-4 stage channel
manufacturer-wholesaler-retailer-consumer
38
what does wholesaler do
buy goods from manufactruer in large bulk then sells it to retailers in smaller quantities
39
adv of wholesalers
used as storage cupboard make distribution quicker adn SIMPLIER for retailer-as dont haev to make individual trips, cuts down number of journeys and paperwork manufacturers are paid straigth away rather then having to wait for retailers to sell the product can store more goods then retailers can-storage cupboard
40
dis of wholesalers
need trusted relationship with wholesaler to assure will get goods in time
41
multi stage channel of distribution
where business uses several channels of distribution at once e.g direct selling e.g ecommernace and selling in reatil shops advnatge-gives flecxibility
42
online distribution
where goods and services are streamed and downloaded rather then a physical good brought
43
adv of online retailing
enviroment-no travelling no package costs consumer gets service rigth away, immediate distribution any issues, much easier to update acroynm- custard pie customers get cheaper price then normal p immediate distrubution/gets it striagth away e
44
dis of onlien retailing
high in IT skills, may need extensive training which can be expensive
45
product life cycle
devlopment stage introduction stage growth stage maturity stage decline stage
46
development stage
research and development stage high costs and sales not yet being made to cover costs high failure rate as oftne not enough demand
47
introduction stage
stage where product is lauched high costs being made on promotion and advertsing product to make sales sales go up, but sales reveue had to pay for fixed costs of development costs before prodcut can make profit competition is limited
48
growth stage
sales grow fast 'increase in new customers and repeated customers competition is attrcted to makret
49
maturity stage
sales reach peak enough sales been made to cover fixed costs of development lots of compeittion at saturation, where market is full andd reached full growth, sales may begin to drop
50
decline stage
where product sales decline, product does not appeal to customers anymore
51
what are extension stragies
way to increase products life cycle for longer e.g product development, reforming or redesigning a product changing design of packaging,making it more up to date etc
52
boston matrix
compares makret growht and makret share question marks-all new products. have high market growth but low makret share are not yet profitbale and need heavy marketing to give them a chance cash cows-high market share but low makret growth. at maturity phase of porduct life cycle already been promoted so sold in higvolues bring in lots of money stars-high market share and high makret growth. at growth stage dogs-low makret share and growth, lost cause
53
mass marketing strategies
needs to appeal to whole market instead of individual makret segments product needs to have mass appeal expesnive advertising campiagns sponsorphips prodcut endorsemtn deals
54
niche marketing strategies
more emphasises on making a product whcihc is difefrentiated or unqiue compared to what is avaliable in mass market may need more effective makret research to find out what customers want
55
B2B marketing
business sells product to another business e.g surgical gloves are sold to doctors
56
B2C marketing
business selles to consumer e.g ready meals to consumers in shops
57
customer loyaly
having good before and after sales is key after sales service is important to custpmers, able to get any help with any porbelms with their product after buying it
58
saver schemes
collect points based on amount they spend e.g tesco clubcard
58
loyalty cards
help tie customer to partcilaur service e.g getting stamp ach time vist after serval visstics, get free drink good as makes repeated customers
59
how are employees an asset to a business
bring in skills nad knowledge into a business
60
how are employees costs of a business
paid wages or salarys which costs money to business
61
what is a wage
paid to worker based on amount of work they do
62
what is a salary
fixed amount that is paid monthly
63
what is dissimisal
contract of employmeent ends-choice of employer not employee
64
redundancy
persons job is no longer needed in other words, fired could then cost money to business for reducnacy payments to employees who been in business for over 2 years
65
zero hour contracts
no guanterred hours adv-more flexible so can commit to other things dis-little finanical security dis-no obligation to work so may be hard for business to find people in busy times
66
outsourcing
where one business outsources business acivit/task to another busines
67
recuritment
finding best person for job
68
selection process
interviews-one to ine wither face to face or online assessment days-they have to do actvities such as group exercises in tray exercises-given scenroi to member of staff be given list of tasks to complete candidate has to put tasks in order in terms of importance and say what action should be taken place for each task
69
internal recuritment
recuriting someone from within the business
70
external recuritment
recurting someone from outside the business
71
adv of internal recurimten
cheap and quick know person gets along with members in business makes people more motiavted to gte promotion
72
dis of internal recurtiment
may cause resentment between workers if dont get chosen leave one vacancy that then needs to be filled
73
adv of external recuritment
brings new ideas into business may have business knowledge from other buisnesses more choice of candiates
74
dis of external recuritment
expensive long process make take longer as have to have introduction phas/ longer induction process
75
recurmtent has costs
epensive due to cost for vacancys etc
76
induction training
introdcuing person to wrokfocre and their new role if bad introduction training, may not know what they are doing not enjoy new jobe more likely to leave
77
on the job training
traning inside the business
78
off the job training
traini g outside of business
79
adv of on teh job training
job specific lower costs
80
dis of on the job training
may slow down production as not fully prodctuve durng trainers not expertise no new ideas brought into business
80
adv of off the job training
brings in new ieads people are experitise
81
dis of off the job training
not job specific no actual benefit to business expensive
82
what is chain of command
path of communcation and authoirty up and down the heriarchy
83
tall structures
have lots of levels in their heirarachy long chains of command-meaning can negatively impact communcation and efficiency getting communcating too and from can be very time consuming narrow span of control
84
adv of tall strcutures
lots of layers of management so lots of chances for promotion, can be motivating for employees
85
flat organisations
few levels in heiarchy poeple are given more freedom and responsbility wide span of control
86
centralisaed organisations
where senior manager makes all decisions (at top of business)
87
adv of centralised organisations
have high level of experinece means decisions are made qucikly as dont have to consult anyone good if workers are not skilled
88
dis of centralised organisations
may be demotiavting for employees as dont have say dont spend much time on shop floor so slow to notice consumer trendds
89
decrentralised organsiations
authorty is shared out to more junior employees
90
adv of decentraisedd organisations
may have more knowledge on their department/sector can be motivating for staff as get a say/may feel more valued day to day decisions can be made quickly without having to ask senior managers
91
dis of decentraised organsiations
may not have enouvgh experince at making decisions may not be able to see overall situation and needs of organisation
92
taylors scientific managemtn
belived people motivated by money believed people do minimum amount of work when left to own devices favoured division of labour-breaking work down into small repeative tasks paid workers according to quanitty they produced adv-fewer workers needed due to increased productivity dis-reduce quality, may become boring, demotivating
93
herzbgers two factor theory
two motivating factors hygeine factors motivating factors
94
mayo human relations theory
one group working conditions stayed same other gorup workign conitions consistently changed e.g number of rest breaks foudn that group with working conditions consistemyl changing were the most productive hwoever, not because of chanhe of working conditions its due to changed in management and teams
95
non finanical motivation
job enlargemnt-give employee greater range of work to do at same level job enrichement-giving workers more challenging work job rotation-moving tasks from one to another r
96
what is peiceowrk
workers are paid per unit produced
97
commisiom
money paid to worker for compelting task
98
what are the 4 types of leadership styles
autocratic-where leader makes decisions on their own adv-good if workers are unskilled adv-decisions are made qucikly/have lots of experince dis-staff dont have say so can be demotivating patternalistic-softer from of autocratic style where consult workers about decisions being made and help peraude them that decsions are in their interest democratic-leader encourages workers to partcipate in decision making process they discuss issues with workers and delegate responsiabilty adv-motiavting dis-time consuming lasissez faire-hand off form of leadership. leader might offer employees little cupply but barely interfer with running of the business adv-motivating dis-haev little experince so may make wrong decsisions putting running of business at risk transformational leadership-wher a business needs to dramtically change has ideas of changes and needs to inspire staff to make these changes
99
entrepreneur
one or two people who set up a business
100
roles of entrerenurs
creating and setting ,up a business running and developing business brining innovation to business world
101
barriers to entrepreneuship
may lack money often occurs when business idea has large start up costs e.g initial investment of large machinery way to overcome barrier-raising capital e.g getting a loan lack in confidence can overocme this by strongly believing they can do it
102
characteristics of entrepreneurships
hard wroking-may need to work over hours day and night self confident-needs to beleive in tehri own abailities and judgment for business idea risk taker-needs to willing to try things that culd potentaially gace a negative outcome
103
what specific skills do entrepreneurs need
communicator with many different people good team working skills solving problems
104
what are the financial motives of setting up a business
profit maximisation-means making as much profit as possible profit satisfying-means making enough profit, not pushing to maximise it may make enough to haev happy liestyle and no more means shareholders are satisfied but no more
105
non finanical motives of being an entrepreneur
work from home-flexible hours your own boss, have freedom to pursure own ideas can be motivating
106
what does an entrepreurn have to prepare for when movig from a entreprenur to a leader
delegate responsibility-develop trust that these people can carry out task as well as them may find it easier if hire peole with similar beliefs, prinicples and visions develop emoitonal intelligence-be able to recognise emoitons of others and respond to them appropriately important to keep them motivated become less reactive-need to make decisions slower and consider and consult other staff would have made decisions much quicker when alone
107
private limited companies
business owned by shareholders, each protected by limited liability
108
adv of private limited companies
limited liability (can only lose out on what they invest in) own personal growth is protected making it attractive to potential investors easier to raise capital take on new shareholders and number of people, gives them chance to bring in new shareholders therefore, brining in money reputation-trust worthy and reliable and larger in scale help attract customers
109
dis of private limited companies
shared profits-have multiple shareholders, profits will be split either ways
110
public limited companies
business owed by shareholders shares are traded publicly shares are sold publicly during a process as a stock market flotation
111
adv of public limited company
large amount of capital raised (flotations) benefit from greater media exposure and may be seen as more prestigious and reputable
112
dis of public limited company
stability of a PLC is vulnerable to changes in sahre price directors are accountable to thousands of shareholders
113
exam hint question: should a private limited company consider becoming a public limited company

business paper 1 (54 decks)

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