Marketing Flashcards

Question

Describe Informed but Limited decision making purchases

Answer 1

This requires some consideration by the consumer - asking your friend for their opinion or advice on the purchase "will this dress be nice for Saturday night?! (not thorough investigation) e.g. clothes and shoes

Answer 2

This is spending a lot of time researching and thinking about buying the product. "Is this car the right choice for me? Can I afford it?! Is it too big? Will I go for black or grey?" (high priced items) e.g. car and house

Answer 3

This is when the consumer has made an informed purchase because what they are most concerned about is the brand/image.

Answer 4

This is when the consumer cares most about the price and/ or quality.

Answer 5

The methods used by businesses to find out what customers need or want. It involves gathering, recording and analysing information about a market

Answer 6

Businesses have the choice of using two types of Market research: Desk research Field research

Answer 7

This is new and first-hand information gathered by the business itself for a specific purpose (not already published). The information gathered is called Primary Information.

Answer 8

Information is gathered for a specific purpose to the business needs Research has gathered new information and is therefore up-to-date

Answer 9

It is expensive to carry out, which means money can’t be spent elsewhere People need to be trained to collect information which is also expensive Time consuming to gather the information The information must be analyzed and interpreted once collected

Answer 10

Postal Surveys Observations EPOS Loyalty Cards Social Media

Answer 11

This is a method of market research conducted via the mail in the form of a questionnaire This is where questionnaires are sent out to people to complete and return. There is often an incentive like a prize draw to encourage return of the survey.

Answer 12

Relatively cheap way of surveying a large volume of potential respondents. People in a large geographical area can be questioned or alternatively respondents can be targeted by postcode.

Answer 13

Response rate for this method of research is very low, even with incentives offered. This is a relatively slow way of conducting research as it takes time to post out and receive back the questionnaires, which then have to be analysed.

Answer 14

An observation involves watching something and recording what happens. The observer might have to count how many times something happens, or someone does something, or what someone's reaction is to a situation.

Answer 15

Facts and figures (quantitative information) are gathered, which are easier to analyse than qualitative information People being observed might not be aware so should act naturally

Answer 16

Those being observed are not usually asked for their opinion or to give an explanation as to why they did or did not do something There are privacy and ethical issues to consider when observing people

Answer 17

This is the system used by the vast majority of retailers to keep track of their sales information. Every time an item is scanned at a till, the information is recorded. Detailed reports about consumer buying habits can be produced - for example, information about the impact of sales promotions can be analysed. Many retailers link loyalty cards to their EPoS systems to gather even more specific information about their customers.

Answer 18

Large quantities of information can be gathered The information gathered is factual and not just opinions

Answer 19

It can be expensive to purchase an EPOS system - especially for a small business No opportunity to gain the opinion of the customer

Answer 20

Loyalty card systems allow customers to present this business/organisations card when purchasing goods and services and receive a reward in return e.g. Tesco Clubcard.

Answer 21

Up to date information on consumer buying habits is obtained Can encourage customer loyalty as there is an incentive to make repeat purchases

Answer 22

Expensive to set up and run Need to provide discounts or other incentives to encourage customers to keep using them.

Answer 23

Social media platforms such as Facebook and Twitter can be used to gain feedback from people on goods and services. Many businesses use these sites to interact with their customers and to find out their reactions and opinions on different issues.

Answer 24

Can give a true picture of service Can give immediate feedback Can be used to gain information on competitors.

Answer 25

Can be expensive if third party employed as a mystery shopper.

Answer 26

This is information that already exists and was collected for a specific purpose by someone else. The information gathered is called Secondary Information.

Answer 27

Information is usually cheap as it is already available and does not involve as much labour/wages Information is easily accessible and readily available Less time consuming as the information already exists

Answer 28

May not be totally relevant to the businesses needs Information is available to competitors May not be up-to-date Information might be bias

Answer 29

Internal External

Answer 30

Examining customer records Analysing customer complaints Studying past trends in sales figures Analysing the final accounts

Answer 31

Newspapers and Magazines Radio and TV reports Books, Reports and Journals Internet Competitors websites

Answer 32

Allow groups of customers to test out products and give feedback to ensure new products meet the needs and wants of customers Asks customers their opinions and use the information to make alterations to existing products Identifies how much the customer is willing to pay Ask questions to identify target market, therefore the most appropriate methods of advertising is used. Gain a competitive advantage Reduces the chance of failure

Answer 33

The information is up to date - means decisions made may be more accurate Information is free from a bias point of view Information is relevant to the organisation's needs

Answer 34

It is costly and time-consuming to interview all consumers. Therefore a sample of the population must be interviewed. There are three decisions to be taken when planning a sample to research. 1. Who is to be surveyed? 2. How many people/companies should be surveyed? 3. How will people be selected for the survey?

Answer 35

Random Sampling Quota Sampling

Answer 36

These are pre-selected from a list and then a random number of candidates are chosen to take part. E.g From a telephone directory or the electoral role All must be interviewed

Answer 37

Reduces risk of bias being introduced when selecting individuals for the sample It is simple to draw up the sample - so saves time

Answer 38

Sample may not reflect the target market of the business Can over represent a certain segment e.g majority males chosen a random It can be expensive to carry out

Answer 39

This is when a number of people who meet specific characteristics are chosen, for example, according to age, gender, income group. The researcher must find people to interview who fit these categories e.g. 50 males that are aged 18-25 Once the quota has been reached, no more are surveyed

Answer 40

Quick and easy method as group lists are pre-made Less expensive to carry out as it needs fewer resources

Answer 41

Results can be less representative than using random sampling It is easier to introduce bias which may affect results

Answer 42

The Marketing Mixis the combination of the 7Ps. Business must develop a strategy based on the Ps in order to sell and market its products. Product Price Place Promotion Physical evidence Process People

Answer 43

This is the actually for being sold to customers by businesses and organisations A business can adjust the features, appearance and packaging of a product to create competitive advantage It must meet the needs and want of customers or else they won’t buy

Answer 44

This is the cost of the products and how much customers will have to pay in order to purchase the product/good Production costs, competition and demand can all affect a business's pricing strategy

Answer 45

This is where the product or good and sold and where the customers will purchase it from A business needs to decide where best to distribute a product

Answer 46

This is how the product or good is advertised to customers and how they become aware of it and encouraged to purchase it Businesses use promotion methods to make customers aware of their products and services

Answer 47

This is the physical environment experienced by the customer including the physical design and layout of the premises the layout of the company website It is important that physical evidence is appealing to customers. It should also reflect how the business wants to be seen by its customers

Answer 48

This refers to the systems and procedures that are put in place to deliver a product or service to the customer. Process involves looking at the experience the customer has when purchasing a product.

Answer 49

These are any members of staff who are in contact with the customers of a business Customers are important to a business. They are the people who buy the goods or services it provides. Customer satisfaction relies on good customer service. This is provided by the people who work for the organisation.

Answer 50

Before products are made available to customers they must go through Product Development. Below is the key stages of the Research and Development of a product. There are many stages a product must go through before it is launched: Market Research Phenotype Test Marketing Changes Made Method of Production Decided Price Decided Place Decided Promotion Decided

Answer 51

Every product has a life-span with different stages. • Changes in the market are always occurring (PESTEC) • Some have a long life-span, e.g. Snickers. • Some are shorter, e.g. fashion items.

Answer 52

•MR carried out to see what customers want and ideas are generated •Work closely with MR and prototype has been produced. •Test Marketing-changes can be made •Think about Price, Place and Promotion •High costs, zero sales, zero profits

Answer 53

Product is launched onto the market Sales are LOW The business will be at a loss (no profit will be made) Products will be expensive Lots of advertising and promotion to encourage sales

Answer 54

Customers are now fully aware of the product Sales increase and grow rapidly Business has made a profit at this stage Competition have launched similar products

Answer 55

Sales reach their peak Growth slows Product is at its most profitable Product is well known The price will fall Competition may be fierce

Answer 56

The end of maturity. People are no longer demanding the product. High profits but sales starting to decrease. Need to keep product at this stage for as long as possible by using extension strategies (eg price of product might fall)

Answer 57

Sales and Profits fall Market share decreases Product outlives its usefulness/value eg changes in fashion, technology Competition is too strong Product is withdrawn

Answer 58

Businesses want to keep their products at the maturity stage as long as possible (highest profit!) They don't want a product entering the decline stage To do this they must INJECT NEW LIFE into their products to encourage customers to keep buying them These are called extension strategies

Answer 59

Change/modify the product - variety of colours, size, shape, version, capabilities Produce product line extensions - different variations of the original product Change the packaging - changes the image and may make the product appeal to other people Change the price - makes it more appealing to non-buyers Change the place - sell in different location Change the promotional activities - offer discounts, advertising campaigns, celebrity endorsement Rebrand the product - can generate publicity and new appeal Extend products into other markets - appeals to different market segments, brand loyalty

Answer 60

A Brand is a product or service which is identified by a specific name, logo, slogan and colour.

Answer 61

Packaging is the materials used to protect and promote goods. Packaging is desianed to capture a customer's attention and it can directly effect whether they bu the product or not. Packaging has to fulfil a number of important functions, including • communicating the brand and its benefits • protecting the product from damage preventing leakage of the contents • presenting government-required warning and information labels. It is almost as important as the product itself and it has to represent the brand and the product!

Answer 62

Makes them recognisable and identifies the product from their competitors Attracts consumers and persuades them to try a product Protects the product and keeps it from going bad Makes the product easy and convenient to use Can be updated to attract new customers e.g. Coca-Cola name bottles and Santa bottles Can make the product look like its of a higher quality

Answer 63

Can be costly for the business to make packaging if it wants to give off a high quality image Needs to be updated to stay in line with Government legislation Product packaging can be misleading which can give the business a bad reputation If packaging is not easy to use then it can put customers off from buying the product Packaging can be copied easily

Answer 64

This refers to the different products an organisation may choose to sell This is when businesses sell more than one product. This will be a range of different products that the business usually sells under the same brand name. However, the business could also decide to move into very different product ranges.

Answer 65

Product Line Portfolio Diversified Product Portfolio

Answer 66

This is when a business has a variety of similar products on sale. A product line is a group of products that are closely related and sold to the same customer group. E.g. Heinz sells a range of finned soups which form one product line. A Product Line Portfolio is the sum of all the product lines an organisation produces. E.g. Heinz also sells beans, pasta, sauces and baby foods.

Answer 67

This is where a business sells a mix of unrelated products. E.g. virgin

Answer 68

To spread the risk of failure - if sales of one product decline, another's could be growing e.g., failure of Virgin Cola and rise in Virgin plane The chances of success with a new product are enhanced because loyal customers will be happy to try it e.g., Estee Lauder new foundation Appealing to more than one customer segment should increase customer sales e.g. Heinz soups - meat eaters, vegetarians (V and vegans (Plant Proteinz Soup) To cope with products which have seasonal demand, e.g., Heinz soup decrease in summer. A range of products improves brand awareness Growth should create financial stability making it easier to raise finance

Answer 69

Cost of promoting and advertising lots of different products to different segments. If one product receives a bad reputation, this can impact on the rest of the portfolio. Cost of purchasing and maintaining different types of machinery. Staff may require training on the different products which is time-consuming and expensive. Requires heavy expenditure to research and develop products that are so different from each other

Answer 70

A Boston Matrix is often used to plot the range of products a business has, to identify what products need changed or introduced. This is used to analyse a company's product portfolio The Boston Matrix categorises products into four different areas, based on: • Market share • Market growth Companies should identify which products are in each category then plan their marketing accordingly.

Answer 71

High Market Growth High Market Share Needs constant and huge investment to keep ahead of competition Generates a lot of income Can become market leader Stars will eventually become to cash cows For example - iPhones

Answer 72

Low Market Growth High Market Share Very good cash flows Maturity stage Require little marketing Funds from cash cows bring in a steady income and can help to further strengthen stars For example - Mars Bars

Answer 73

High Market Growth Low Market Share Called Question Mark/Problem Child because you don't know what to do with them, but they belong to you Low cash flows Can be invested in due to their position in a promising market For example - Juicers

Answer 74

Low Market Growth Low Market Share Decline stage No longer worth investing in Can adversely affect profits For example - CDs

Answer 75

How much it'll cost to make the product. Must cover costs. The Target Market/Market Segmentation The price customers must be willing to pay. The price charged by competitors. Quality of the product. Image you wish to present to customers. External Factors (PESTEC) Government Restrictions The Stage of the Product Life Cycle

Answer 76

A business will set their prices low compared to their competitors e.g. Primark, Tesco products etc. It is used for value for money products This should attract customers. Low prices should result in higher sales. However, some customers are put off as they believe the low price indicates low quality

Answer 77

Can easily attract customers Lower prices result in higher sales

Answer 78

Some customers may be out off as they believe that the low price indicates low quality Lower prices means that the business will make less profit on each product

Answer 79

Business will set their prices higher than their competitors Gives the image of exclusiveness and high quality Some customers are attracted to the prestige of high prices Believe the product is the best quality Can't target all market segments

Answer 80

Some customers are attracted to the prestige of high prices They believe that the product is the best quality

Answer 81

They can’t target all market segments

Answer 82

This is when companies in the same market charge similar prices to avoid a price war. The businesses deliberately agree not to compete on price. E.g.: petrol stations often charge similar prices for petrol diesel Other elements to the marketing mix must be better than competition to ensure sales

Answer 83

Higher success rates Prevents market loss

Answer 84

Incentives must be offered for customers to choose your business over competitors

Answer 85

The price charged for a product/service is lower than the normal price for a short period of time Used to quickly sell inventory and aid cash flow

Answer 86

Encourages customers to buy the product Creates demand from consumers looking for a bargain Improves cash flow in the short term Old stick is sold to make space for newer stock

Answer 87

Profit from each item sold is reduced as the price was also reduced Can damage the image of the brand or product by lowering the price

Answer 88

The cost of the product is calculated first then the business will add a mark-up onto the cost of making a product. This is mainly used in supermarkets and doesn’t consider any external factors like competitors pricing and the economic climate

Answer 89

A quick and easy way of setting the selling price Ensure that the total costs are covered and a profit is generated

Answer 90

Does not cover indirect costs e.g. other expenses such as rent Does take external factors into account e.g. increasing prices during boom periods to maximise profits

Answer 91

The price charged makes customers think the product is cheaper than it actually is. Prices are set just below the next rounded number.

Answer 92

Makes the customers think the product is cheaper than it actually is Fits products into a lower price band e.g. a car priced at £9,999.99 instead of rounding up to £10,000, means it will fit the customers requirement of "a car costing less than £10,000"

Answer 93

Some customers will not be persuaded by this strategy Business must have change for £49.99 customer if they pay by cash

Answer 94

Used for new products and has a high price to begin with when no competition exists - new and unique products "must have" products Price lowers once competition enters the market High profits to begin with Once the sales start to slow, the business will begin to lower the price so that more customers can afford their product Once lowered, can attract people on lower income to purchase the product

Answer 95

Sufficient 'hype around a new product enables higher prices to be charged which can increase profits Initial profit recoups some of the research and development costs Lack of competition also allows maximum prices to be charged

Answer 96

High initial prices can put off some customers Technique results in low initial sales numbers

Answer 97

Is used to eliminate competition. It involves a business setting a very low price in order to attract customers away from competitors, who will struggle to match the low price and may go bust. The business deliberately sets low prices to force their competition to do the same

Answer 98

Competitors are forced out of the market, then prices can increase again Increases market share

Answer 99

Can only be used by larger companies that can afford to make losses while prices are low Could breach anti-competition legislation

Answer 100

The price charged is lower than the cost of making the product It is likely when customers are in the store they will buy other products at full price Might buy items in bulk Profit is therefore made on the total amount of purchases. For example - supermarkets will use Loss Leader pricing strategies

Answer 101

Creates greater footfall, that is brings in customers to the business Hopefully customers will buy normal priced products while buying loss leaders Encourages repeat purchases

Answer 102

There is a risk that some customers will buy the loss leaders, impacting negatively on profit

Answer 103

Used for new products. The price will be initially lower than competition to tempt customers to buy and switch brands. When the product is popular the price is raised in line with the competitors. Encourages customers to switch brands and try new product. However, very little profit is made during the initial low price period.

Answer 104

Encourages customers to try a new product The business hopes to gain repeat custom once the price rises

Answer 105

Very little profit can be generated during the initial low-price period Could result in a price war is competitors set lower prices too

Answer 106

Price Discrimination occurs when identical goods or services are sold at different prices from the same provider. Prices are altered depending on a discriminating factor, e.g. age, gender, place or even time of year.

Answer 107

Ensures products appeal to different market segments Allows for high profit margins on some price brackets

Answer 108

Harder to budget for sales revenue in advance Loss in potential revenue from selling at a lower price e.g. a child taking a seat which could be sold to an adult instead

Answer 109

Price must be set at a level that customers are willing to pay. If it is too low then the business will lose out on money as costs are not covered Customers might think that it is low quality If it is too high then the business might not target all customers

Answer 110

Rail Road Sea Air

Answer 111

Cheaper than other methods such as planes because… Delivery can be quicker than other methods because… Customer receives product right to their door Refrigerated vehicles can be used to transport perishable goods Can depart at any time/24 hours

Answer 112

It is not suitable for all products – large items Not as environmentally friendly as other methods – carbon emissions Traffic congestion can cause delays Restrictions to the number of hours a lorry driver can work Petrol prices increases makes this more expensive

Answer 113

Large products can be transported easily be freight No traffic to get stuck in It is often faster than by road It is more environmentally friendly than road and air

Answer 114

There may not be a train station nearby so deliveries can be restricted Rail services can be disrupted – technical difficulties or rail track issues It is not suitable in rural areas with no rail network Specialist rail-freight terminals are required

Answer 115

Large items can be transported worldwide Less expensive than air for large loads Good for items that have a long shelf life

Answer 116

Slower method than others meaning longer delivery times The dock is not the final destination so could incur road haulage costs

Answer 117

Products can be transported across the world quickly Ideal for long distance and more remote locations

Answer 118

Very costly in comparison to other methods Large items cannot be transported easily The airport is not the final destination so often still requires road transport for the final delivery

Answer 119

The channel of distribution is the way in which the product gets from the manufacturer to the consumer.

Answer 120

There are different routes relating to the channel of distribution. These include: Manufacturer -----------DIRECTLY---------> Customers Manufacturer -----------> Retailer ----------> Customers Manufacturer -----------> Wholesaler ----------> Customers Manufacturer ------> Wholesaler ------> Retailer ------> Customers

Answer 121

This is the business which produce the products.

Answer 122

This is the business that sell the product to the customer on behalf of the manufacturer. They decide on the price to be charged and how to display the products to be sold.

Answer 123

This is the business that buys in bulk and sells to retailers or direct to customers.

Answer 124

Direct selling means selling direct to the consumer from the manufacturer. This is the shortest channel of distribution and means there are less ‘middle men’ taking a cut of the profits.

Answer 125

E-Commerce Catalogues/Mail Order Direct Mail Teleshopping Personal Selling

Answer 126

This is when a business sell its products using the internet e.g. ASOS, Shein, BooHoo

Answer 127

Can target customers worldwide Can gain customer info easily for market research Can sell more items online Can sell 24/7 Don’t need to pay for a retail premise

Answer 128

Website can be costly if it wants to be high quality Lots of competition as you are competing with businesses all over the world Websites can crash – no sales Customers might not want to wait for the product being delivered Customers might be put off - Security and fraud - Not being able to see the products

Answer 129

This is when a business sells its products using a catalogue, which is sent directly to the consumer e.g. M and M Direct, Avon and Scentsy

Answer 130

Might attract customers as they can order from home Saves costs as they don’t need to pay rent for retail stores Credit facilities are offered to customers

Answer 131

Expensive to produce good quality catalogues Customers might be put off waiting for the product to arrive/pay delivery Not environmentally friendly due paper use

Answer 132

This is when a business posts letters, leaflets and brochures to customers

Answer 133

Specific market segments can be targeted A wide geographical area can be targeted

Answer 134

Customers can view this as junk mail and throw it away Mailing lists can become out of date quickly Cost of producing leaflets and postage costs

Answer 135

This is when a business sells products via the TV using dedicated shopping channels e.g. QVC

Answer 136

Customers can see products modelled and demonstrated

Answer 137

Cant target all customers as not everyone has the shopping channels Customers skipping the channel

Answer 138

This is when a salesperson sells products directly to the customer (face-to-face) door-to-door, over the phone or at counters e.g. SKY sales men in the Overgate

Answer 139

Customers can see products modelled and demonstrated Feedback can be gathered

Answer 140

Customers not keen on being disturbed at home/while shopping Often use commission so staff costs can be high

Answer 141

Manufacturer does not need to share profits with wholesalers or retailers Cost saving – premises may not be needed in some cases and not as many employees needed for retail shops, e.g. internet selling. Manufacturer has more control over how product is priced and promoted. Convenient for customer – can purchase by telephone, or internet web-site. Good where product needs to be made to specific customer needs, e.g. dress-maker, windows sales

Answer 142

Manufacturer will have to do all their own administration, packaging and advertising – costly as may have to pay an extra member of staff. In some cases, customers may have to pay for postage and packaging – making the product more expensive and less attractive.

Answer 143

Supermarkets/Hypermarkets Convenience Supermarkets Department Stores Discount Stores Specialist Stores E-tailer (Online Retailers) Independent Retailer Out of Town Retailers

Answer 144

Supermarkets are a key feature of consumer shopping as they offer a very wide range of food and other products at low prices, operating on the principle of low mark-up and rapid turnover. Supermarkets tend to only sell groceries whereas hypermarkets will sell groceries as well as things like clothes and decor etc. Hypermarkets are a mix of supermarkets and department stores

Answer 145

Sell a huge range of product Target all different types of customers Cope with seasonal demand Most hypermarkets are open 24/7

Answer 146

Lots of competition Cost a lot in rent/staffing costs because they are so big

Answer 147

These are smaller supermarkets, situated in convenient locations e.g. city centres, petrol stations and train stations. Examples include Tesco Metro, M&S Simply Food. This type of retailer meet changing consumer needs e.g. shopping for fewer items more regularly rather than one large weekly shop.

Answer 148

Cater to the changing needs of customers Prices are slightly higher than larger supermarkets due to convenience factor

Answer 149

Limited choices due to of smaller store sizes Customers might be put off because of high prices charged

Answer 150

These are located on the outskirts of towns and cities and have good infrastructure such as road and transport links and free car parking. Increasing car ownership makes travelling to these retail parks convenient.

Answer 151

Rather than setting up their own e-commerce sites manufacturers may use online retailers such as Amazon to sell their products. Retailers like Amazon are know as e-tailers.

Answer 152

Department stores such as Debenhams and John Lewis have a large number of different departments offering a range of goods all under one roof. They tend to have an upmarket image and charge higher prices. This type of retailer has declined in recent years.

Answer 153

In response to the recession discount stores such as Home Bargains, B&M and Poundland have become very popular as well as discount supermarkets such as Lidl and Aldi. They tend to sell large quantities of a limited range of products at discounted prices. The expenditure on displays is kept to a minimum to minimise costs and keep prices low. The recession has resulted in a significant growth in this type of retailer.

Answer 154

Attracts customers because of low prices

Answer 155

Customers might think the products are bad quality Limited product range compared to other stores

Answer 156

Convenience as retailers are located close to customers Retailers often promote the product for the manufacturer Retailer employs sales assistants to help sell the product Large retailers buy in bulk Retailers can offer credit facilities and after sales services

Answer 157

Retailers take a cut of the profit Retailers may alter the price of the product and so have an effect on the image of the product Products are sold and promoted by retailer, therefore wholesaler looses control The product will face competition from other products stocked by the retailer These are often displayed next to one another

Answer 158

Wholesaler buys in bulk, saving manufacturer from making lots of smaller deliveries. Wholesaler carries the risk of stock not selling e.g. clothes going out of fashion. Wholesaler also label and package products – saves time- manufacturer and retailers. Retailers can save on storage by buying smaller quantities from wholesalers than they would get from manufacturers.

Answer 159

Wholesaler will charge for their service which decreases profit of manufacturer. The manufacturer loses control over how product is promoted and displayed to customer. Wholesalers offer the same products to retailers’ competition. It is more expensive than going directly to manufacturers for the retailer as wholesalers add on a margin of profit

Answer 160

The product being sold e.g. - Perishable items need to get to customers as quickly as possible and require suitable transportation The cost involved – it’s cheaper for Cadbury’s to use wholesalers and retailers than sell directly to customers Reliability of companies in the chain (wholesalers/retailers) Legal requirements/restrictions – petrol, alcohol and medicine can only be sold in licensed outlets The image the manufacturer wants the product to have – premium products will only be sold in selected retailers e.g. Canada Goose Manufacturer’s distribution capability – Apple retailers will have the experience and skills to show customers how it is used & answer questions effectively, retailers advertise products according to guidelines from manufacturer Finance available – a manufacturer may not have the money to open a shop or have a website Age of business – new business may only be able to sell direct to customers Where the product is in the life cycle – new products will want to be widely available Target market – should be accessible for customers

Answer 161

The process of: Raising awareness of products Persuading customers to buy a business’ products instead of competitors Reminding customers about products

Answer 162

There are two different types of sales promotions that businesses can use to promote their products. Into the Pipeline Out of the Pipeline

Answer 163

Promotions aimed at those involved in distributing a product e.g. promotions that the manufacturer offers to wholesaler or retailer.

Answer 164

Promotions aimed at end users (customers), usually to encourage them to make a purchase.

Answer 165

Allowing Trade Credit Merchandising materials – point of sale displays Sale or return Bulk-buying discount Dealer loaders e.g five boxes for the price of 4 Staff training for wholesaler/retailer employees Promotional gifts

Answer 166

Trade Credit Where the wholesaler or retailer receives stock and has time to sell it before having to pay the manufacturer. This improves cash flow.

Answer 167

Point of Sale materials Posters, racks to hold leaflets, window display materials or in-store displays are provided by the manufacturer free of charge. These materials can draw customers eye and encourage them to purchase the products.

Answer 168

Dealer Loaders The retailer is offered an inducement to attract more orders e.g. ten boxes for the price of nine

Answer 169

Any unsold stock can be returned to the manufacturer. This can encourage retailers to stock new products as it removes the risk of having unsold stock

Answer 170

If products or services require technical explanations or demonstrations the manufacturer will offer staff training e.g. car manufacturers will train staff on technical specifications, how to promote new cars and customer service

Answer 171

Buy one get one free Free samples Free gifts 50% extra Price reductions (£1 off etc) Vouchers 3 for 2 Loyalty schemes/cards Competitions

Answer 172

Used for a limited time frame to encourage customers to purchase selected products. Can be used to sell excess stock.

Answer 173

For example, a fashion magazine offering a free lipstick with every purchase or a free bowl with the purchase of cereal

Answer 174

These offer money off future purchases and e.g. coupon in newspapers, bus tickets and direct mailing. Often used to encourage loyalty e.g. £40 and receive £5 off your next shop.

Answer 175

Customers can purchase a product now and pay for it at a later date. This encourages customers who could not afford to pay upfront for a product

Answer 176

Samples of a product are offered to a customer e.g. perfume samples or food tasting or a free trial e.g. Amazon Prime

Answer 177

At the point of sale, the retailer will offer to demonstrate the product to encourage sales e.g. test drive a car

Answer 178

Customers have to buy the product to allow them to enter competitions or prize draws. This is promoted on the packaging e.g. McDonalds’s Monopoly

Answer 179

More of the product is offered for the same as the original price e.g. 20% extra free

Answer 180

This is when a business tries to communicate with customers, shareholders, employees and the government – all of whom form the business’s ‘public’. The aim of the public relations is to improve the public image of its products and the image of the business itself.

Answer 181

Press conferences Press releases Charitable donations Event sponsorship Open door events Promotional merchandise Celebrity endorsement Product placement

Answer 182

This is when the media are invited to a business presentation, where they are given information or news. Can be used when launching a new or updated product.

Answer 183

Communicate with wide audience Business is in control of the content being reported Gets the media ‘on side’ and they can ask questions

Answer 184

Could face difficult questions and be put on the spot If the business is underprepared, it can damage their image

Answer 185

This is when the media are provided with a written account of activities or events.

Answer 186

Can be used to counteract bad publicity Factual content Not subject to questioning by media

Answer 187

Must make sure the wording is appropriate, especially if it is to counteract bad publicity

Answer 188

The business can make regular donations or a one-off donation in response to changing circumstances

Answer 189

Promotes the CSR objectives Improves business image

Answer 190

Some shareholders would prefer this money was reinvested in the business

Answer 191

This is when a business is sponsoring an event, team or venue. Very common in the sporting industry, both locally and nationally.

Answer 192

Customers who support the team etc may be attracted to the business If team etc is successful, this will increase the sponsors exposure

Answer 193

The cost of sponsorship can be very high e.g. Standard Chartered paid Liverpool £160M in 2018 in a 4-year shirt sponsorship deal

Answer 194

This is when the premises may be opened to the public for short periods or arranged visits e.g. Amazon warehouse tours.

Answer 195

Customers can see first-hand how the business is run

Answer 196

Staff conducting tours could be used more productively elsewhere in the business

Answer 197

This is when businesses are giving out free stationery, key rings and other items with the company logo and contact information on them

Answer 198

Customers are reminded of the company when they use the product Customers feel rewarded and are more likely to return Merchandise can be passed on to other people giving more exposure for the business

Answer 199

Cost of purchasing the merchandise Cheap looking goods could damage the reputation of the business

Answer 200

This is when a business uses celebrities to promote a product e.g. Adidas pay Lionel Messi to wear their football boots and appear in adverts.

Answer 201

Consumers who like the celebrity are more likely to purchase the product The product will be advertised for free every time the celebrity is seen wearing or using it in public Positive media coverage for the celebrity will give positive exposure of the product they endorse Higher prices can be charged Consumers are more likely to be brand loyal

Answer 202

Some consumers may be put off product if they do not like the celebrity If the celebrity gets bad publicity it will tarnish the image of the products It is expensive to pay celebrities

Answer 203

This is when the business pay for product to appear in films, TV shows or video games e.g. fizzy drinks, alcohol and cars.

Answer 204

Awareness of products is generated often worldwide It is subliminal advertising; the audience don’t know they are watching a promotion while watching a film If the character using the product is popular there will be an increase in sales

Answer 205

Exposure time can be short Can be bidding wars between similar brands making it an expensive method of promotion If products are shown as part of a negative storyline it can put customers off

Answer 206

Market Research Promotions – Advertising and Promotion activities Sales

Answer 207

electronic point of sale (EPOS) for market research online survey internet advertising e-commerce e-mail databases social media desktop publishing (DTP) text alerts apps quick response (QR) codes

Answer 208

Provides highly detailed research and is designed to work alongside retailer loyalty cards like the Tesco Clubcard The till records the details of every transaction, providing detailed information about exactly which product was bought in combination with others. This information can then be combined with the personal details of the shopper (age, gender, postcode, etc.) to develop a fuller picture of the buying habits of customers. Makes it easy to offer promotions linked to customer needs. It allows the business to identify what is being purchased in different parts of the country and in different stores.

Answer 209

This is the buying and selling of goods online. The marketing department can use e-commerce to reach the global market who will be able to shop 24-hours-a-day 7-days-a-week.

Answer 210

Can sell worldwide means the business will be better known Increased sales, leading to increased profit Savings on expensive showrooms/stores Business is open 24/7 Can sell a larger variety of stock

Answer 211

Business is in competition with lots of others Designing and keeping the website up-to-date is expensive and requires specialists Not all the businesses target customers have access to the internet. If the website crashes then customers wont be able to buy any goods.

Answer 212

Customers have a wider range of goods to choose from They can ‘shop around’ and get the best deal Internet prices are often lower than in shops Customers can shop from the comfort of their own home ‘24/7’ Arrange when you want your items delivered and where

Answer 213

Customers need to own or have access to a computer and be on-line and know how to use the Internet. It is not easy to assess the quality and suitability of many products on the screen. Can’t try goods on and don’t get your item there and then Delivery problems Inconvenience of returning unwanted goods. Time it takes for refund to be put back into your account Difficulty in communicating with business Security risks of buying on-line

Answer 214

Market research conducted over the internet in the form of a questionnaire. A quick online survey on the company website. Surveys can be sent via e-mail. Generated through Survey Money

Answer 215

Inexpensive method Large sample sizes and can target customers Less hassle than a hand written questionnaire However, high number of customers don’t respond

Answer 216

Are sent to consumers who have bought from them before – customer lists can be generated Can be sent special offers, new products and other promotions Survey’s can sent to customers Can keep consumers up to date with orders

Answer 217

Very quick and cost effective method of marketing Can email specific target markets

Answer 218

Easier access to products/services for customers Notifications: directly to phone when promotional deals are on when products are back in stock When item has been dispatched

Answer 219

Businesses use customers browsing history to target specific market segments Direct interaction with advert YouTube, 4OD, Sky App

Answer 220

Consumers follow businesses they like to see products on sale Quick interactions with customer Sharing/ “like”ing of information Updates on stock Competitions Celebrities tagging businesses in post

Answer 221

Can be used to inform customers of new products, special offers or promotions. Can tell customers when item is on its way/be delivered

Answer 222

Desktop Publishing can be us to create posters, leaflets, brochures, business cards, booklets Eye catching marketing materials to persuade customers to buy products

Answer 223

When a customer scans a QR code it will take them directly to a company website. They are often shown on promotional advertising billboards and magazines. It enables the customer to access the goods quickly and easily.

Marketing Flashcards

(247 cards)