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Business Theme 1 > Marketing > Flashcards

Marketing Flashcards

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1
Q

What is a dynamic market?

A

Markets that are subject to rapid/ continuous change

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2
Q

What is market size?

A

The total value/ volume of sales in the market

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3
Q

What is market share?

A

The proportion of total sales in a particular market for which one or more firms are responsible, expressed as a percentage

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4
Q

Formula for market size

A

Total unit sales in a market x avg price

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5
Q

Formula for market share

A

Sales of a business/ total sales in the market X 100

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6
Q

Formula for market growth

A

Change in the size of the market/ original size of the market X 100

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7
Q

Two benefits of online retailers (consumer and to retailers)

A

Consumer: Cheaper products
Retailers: Increased customer base

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8
Q

Benefits of strong branding

A

Firms can differentiate from rivals, create customer loyalty, help product recognition and charge higher prices

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9
Q

3 ways competition affects the market

A

More pressure on pricing, more innovation as firms seek a competitive advantage, more consumer choice

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10
Q

3 Ways businesses adapt to change

A

Invest in new tech, products or processes etc
Adapt marketing mix
Market research to keep in touch with trends

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11
Q

What is meant by product orientation?

A

Approach to business which places the emphasis on the production process & the product itself

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12
Q

What is meant by market orientation?

A

Approach to business which places needs of consumers at the centre of the decision making process

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13
Q

What is primary research?

A

The collection of first-hand data, which did not exist before for a specific purpose so is original data

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14
Q

What is secondary research?

A

Research that has already been undertaken by another organisation for a different purpose so already exists

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15
Q

What is quantitative data?

A

Statistical data that informs a company about people’s behaviour but does not identify the reasons

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16
Q

What is qualitative data?

A

Non-statistical information that gives a company in depth insight into the reasons for human behaviour

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17
Q

Two benefits of primary research

A
  1. More specific to the needs of the business & its research objectives.
  2. More detailed insights into behaviour, attitudes & wants of target customers
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18
Q

Two drawbacks of primary research

A
  1. Expensive & time-consuming

2. Risk of survey bias

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19
Q

Two benefits of secondary market research

A
  1. Often free & easy to access

2. Good source of market insights as data collected by experts

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20
Q

Two drawbacks of secondary market research

A
  1. Can quickly become out-of-date

2. Not tailored to specific research objectives

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21
Q

What is meant by sample size?

A

The size/ proportion of the whole population chosen as representatives of the market for market research purposes

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22
Q

3 ways ICT could be used to support market research

A
  1. Company websites
  2. Social networking and use of social media
  3. Databases
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23
Q

3 ways of segmenting a market

A

Demographic

Geographic

Behavioural

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24
Q

What is market mapping?

A

The process of positioning competition within a market by plotting the key variables that differentiate products within the market against each other

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25
How can a business gain a competitive advantage?
price, adding value, innovation, reliability, quality, reputation, branding and promotion, customer service and convenience.
26
How can a business differentiate its products?
Flexible pricing, wider product ranges, better value, better quality etc.
27
How can a business add value? (6)
providing additional features such as bundling, after-sales services, quicker response time to orders, loyalty offers, customization, investing in branding to strengthen reputation and image
28
Factors leading to a change in demand
Changes in tastes & preferences Changes in income Population changes
29
Factors leading to a change in supply
Cost of production External shocks Govt action: taxation and subsidies
30
PED
A measure of the responsiveness of demand to a change in price i.e. what will happen to the demand for the product if its price changes
31
YED
A measure of the responsiveness of demand to changes in income i.e. what will happen to the demand for a product if consumers’ incomes change
32
PED FORMULA
Percentage change in quantity demanded/ Percentage change in price
33
YED FORMULA
Percentage change in quantity demanded/ Percentage change in income
34
Identify three factors which influence: | PRICE ELASTICITY OF DEMAND (PED)
Availability of substitutes Time- how much time has elapsed since the time the price changed Frequency of purchase If good is luxury/ necessity
35
Identify three factors which influence: | INCOME ELASTICITY OF DEMAND (YED)
Price of product relative to incomes (this is PED) If good is inferior/ normal/ luxury Economic climate& impact on incomes e.g. recession that rate at which the desire for the good is satisfied as consumption increases
36
Explain the significance of price elasticity of demand to businesses in terms of implications for pricing
If the PED is elastic, any increase in price should lead to a decrease in revenue and a decrease in price should lead to higher revenues. PED is inelastic, an increase in price should increase revenues, whereas a reduction in price should reduce total revenue.
37
Explain the significance of income of elasticity of demand to businesses:
Important to know the YED of products to determine revenue growth in specific stages of the economic cycle, e.g. products with negative YED will do well in a recession when incomes are generally lower; this may influence businesses to diversify product portfolios to maximize sales in different markets
38
Elements of the design mix
Function Cost Aesthetics
39
3 Ways in which the design mix may change to reflect social trends:
Re-use and recycling of inputs Designing for waste minimisation Ethical sourcing
40
ETHICAL SOURCING
Morality in decision making, inferring doing what is ‘right’, when dealing with and choosing suppliers; using materials, components and services from suppliers that act ethically in the way they respect the environment, treat their workforce well and trade with integrity
41
BRANDING
A promotional method that involves the creation of an identity for the business that distinguishes the firm and its products from other firms
42
PROMOTION
An attempt to obtain and retain customers by drawing their attention to a firm or its products
43
3 Types of promotion
``` Types of promotion: 1 Advertising 2 Public relations 3 Sales promotion ```
44
3 types of branding
``` Types of branding: 1 Corporate branding 2 Product branding 3 Own-label branding ```
45
3 benefits of strong branding
``` Benefits of strong branding: 1 Added value 2 Ability to charge premium prices 3 Reduced price elasticity of demand ```
46
3 ways to build a brand
``` Ways to build a brand: 1 Unique selling points (USP)/differentiation 2 Sponsorship 3 Use of social media ```
47
What’s the difference between: | PRICE SKIMMING AND PENETRATION PRICING
Price skimming is setting a high initial price for a new product in order to recoup high research and development costs, whereas penetration pricing is setting a low initial price for a new product in order to get a foothold in the market and gain market share
48
COST-PLUS PRICING
Adding a percentage (the mark-up) to the costs of producing a product to get a price
49
PREDATORY PRICING
Setting a low-price forcing rivals out of business
50
COMPETITIVE PRICING
Setting prices based on the prices charged by rivals
51
PSYCHOLOGICAL PRICING
Setting prices to a make the consumer think that a product is cheaper than it actually is hence enticing the customer into making a purchase
52
Describe two factors that affect the pricing strategy for a business:
1 PED value: prices set will be determined by the PED value of the products so that revenues are maximised 2 Stage in the product life cycle: depending on what stage the product is will determine what strategy is used, e.g. using discounts in the maturity stage
53
3 Types of distribution channel:
Online Retail Wholesale
54
3 Influences on the choice of distribution channel:
1 Nature of the product 2 Cost 3 Size of the market
55
What has LM LMG in boston matrix
Dogs
56
What has LMS HMG in Boston Matrix?
Problem child ?
57
High ms high mg?
Stars
58
High market share low market growth
Cash cows
59
PRODUCT LIFE CYCLE EXTENSION STRATEGIES definition
Methods used to prolong the life of a product.
60
Marketing strategy in a mass market
Mass markets tend to be more competitive, therefore there will many products available that are similar and therefore differentiation is critical, pricing is also similar with price leadership very common, promotion is significant with large investment in mass media advertising and distribution is more widespread/multi-channel in order to access the wider audience.
61
Marketing strategy in a niche market
less competitive as needs are specific and the target audience is smaller. Products tend to be more differentiated, pricing can be more premium as customers are more willing to buy to satisfy needs and wants, promotion is more targeted via more selective media channels and tactics, and distribution is more focused based on the buying habits of the target market.
62
How businesses can develop customer loyalty:
Focusing on developing the following: - customer service, - effective communication, - incentives, - customization/personalization.
63
Ways in which the elements of the design mix may change to reflect social trends:
Re-use and recycling Ethical sourcing Waste minimisation
64
3 Ways in which branding and promotion may change to reflect social trends:
Viral marketing Emotional branding Social media
65
3 Ways in which pricing may change to reflect social trends:
Online sales Dynamic pricing Price comparison sites
66
3 Ways in which distribution may change to reflect social trends:
Online retailing/distribution Changing from a product to service Collection services

Business Theme 1 (4 decks)

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