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Component 1 Functions. > Marketing. > Flashcards

Marketing. Flashcards

1
Q

What is marketing?

A

The Identification, Satisfaction and revisit of Customer Needs

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2
Q

What is the purpose of marketing?

A

To bridge the gap between the conflicting needs of producers and consumers by completing the production process.
-Keep customers repurchasing.

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3
Q

What is market-orientated marketing?

A

A business develops its marketing mix based on what the market wants, no matter what the strengths of the business are.
-Considers customers its biggest assets.
-Respond quickly to market changes.
-Have more confidence in a product.

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4
Q

Advantages of market orientated marketing?

A

-Flexible to market changes.
-Business continue to innovate and adapt products.
-Greater customer satisfaction.
-Loyal customers are less susceptible to competition.

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5
Q

Disadvantages of market orientated marketing?

A

-High cost of market research.
-Unpredictability of future.
-Constant change may irritate employees.

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6
Q

What is product orientated marketing?

A

A business develops products that it is good at making.
-Focus on creating a technically sound product and selling it.
-Customers are contacted at the final stage.
-Fashions and tastes are not accounted for.

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7
Q

Advantages of product orientated marketing?

A

-Increases economies of scale.
-Product development still listens to customers.
-Focuses on quality.
-Employees are specialised and focused.

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8
Q

Disadvantages of product orientated marketing?

A

-Won’t respond to changes in market so could lose out to rivals.
-Leads to stubborn managers who refuse to change.

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9
Q

What is asset led marketing?

A

When marketing decisions are based on the needs of the consumer and the strengths of the business.

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10
Q

Advantages of asset led marketing?

A

-Good quality AND a wanted product.
-Cost of market research is lower
-Makes assets worthwhile.

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11
Q

What is database marketing?

A

tracking consumers’ buying habits very closely, and then crafting products and messages tailored precisely to people’s wants and needs based on this information

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12
Q

What is the marketing mix?

A

4 ps, process, people and physical.

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13
Q

What is global marketing?

A

Successfully placing a product in a worldwide market.

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14
Q

What is involved in global marketing?

A

Planning, changing product to match country’s needs, finding out preferred distribution channels, how price sensitive, culturally appropriate promotion.

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15
Q

What is glocalisation?

A

Expanding globally by meeting local needs.

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16
Q

What are global brands?

A

Products that are recognised worldwide.
-Little change in the marketing mix.
-Access more economies of scale.

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17
Q

Why is global marketing difficult?

A

-Political and social differences.
-Legal differences- labelling, environment, safety.
-Economic differences- taxation, import barriers.

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18
Q

Marketing mix for small local markets?

A

-competitive pricing.
-specific target market.
-local distribution and local promotion.

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19
Q

Marketing mix for large national markets?

A

-Consistent marketing to establish brand identity.
-Diverse product portfolio.
-National TV and newspaper.
-Placed where most customers are.

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20
Q

Marketing mix for global markets?

A

-Glocalised or global brand.
-Prices varies upon incomes.
-O,line and producer-consumer distribution.
-National advertising in each region.

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21
Q

Marketing mix for goods?

A

-focuses on differentiation and design.

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22
Q

Marketing mix for services?

A

-Emphasises quality and accessibility.
-High brand loyalty because the customers experience it.
-Need to be close to target market because intangible so has to be producer-consumer.

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23
Q

Marketing mix for niche products?

A

-Need to do detailed market research.
-Product is specialised and has USP.
-Higher prices.

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24
Q

Marketing mix for mass markets?

A

-emphasises cost, efficiency, and USP.
-very competitive.
-Multi channel distribution.

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25
Q

Marketing mix for market structures?

A

-Oligopolies have strong branding.
-Monopolies don’t need to advertise.

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26
Q

How can a business use digital media?

A

-Text graphics, audio and video can be transferred across a computer network.
-Pop up adverts on websites and search engines.
-These adverts can be tailored to the viewing habits.
-Can also to market research with short multiple choice questions that pop up.

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27
Q

How can a business use social media?

A

-Have multiple social media pages to try and build a personal connection with consumers.
-Businesses can promote products by sponsoring popular pages to showcase their products.

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28
Q

How can a business use e-commerce?

A

-When customers can buy the product directly from the internet.
-Websites can be created for less than £500.
-There are more competitors.

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29
Q

How can a business use m-commerce?

A

-Buying and selling through wireless devices.
-Customers now have 24/7 access anywhere with internet access.
-Large businesses may create apps for mobile phones.

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30
Q

Benefits of new technology?

A

-More convenient for customers.
-Less costs for physical shops.
-Can make sales 24/7.
-Social media can target different markets.
-Digital natives (under 35s) can easily use the technology, so it is useful if a business targets these people.

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31
Q

What is the argument for traditional shops?

A

-Over 35s prefer in person and this is still a significant portion of the population.
-Not all market segments have internet access.
-Many countries do not have broadband capabilities so a problem for multinational companies.
-Shops are less affected by technical problems.
-Less problems with delivery.
-Certain services have to be physical.

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32
Q

What is promotion?

A

Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response

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33
Q

What is the purpose of promotion?

A

Increase sales, raise awareness, beat competitors, encourage brand loyalty, enhance reputation.

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34
Q

What is above the line promotion?

A

Uses media where there is no direct contact with the customer and the business has no control of the media involved.

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35
Q

Advantages of above the line promotion?

A
  • Advertisement design is outsourced to advertising agencies meaning high quality adverts are produced
  • Adverts can reach very wide audiences across many market segments
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36
Q

Methods of above the line promotion?

A

TV, radio, newspapers, magazines, cinema, billboards.

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37
Q

Disadvantages of above the line promotion?

A
  • No direct control over which consumers their products are advertised to
  • Very expensive due to advertisement design and costs of using mass mediaW
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38
Q

What is below the line promotion?

A

The business has direct contact with the customer and controls the media that it uses.

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39
Q

Methods of below the line promotion?

A

Personal selling, packaging, offers, direct mailing, public relations (sponsorship).

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40
Q

Advantages of below the line promotion?

A
  • Businesses have more control over the customers that the adverts are aimed at
  • More affordable than above the line promotion
  • Suitable for smaller businesses
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41
Q

Disadvantages of below the line promotion?

A
  • Impact often only lasts for a limited period of time (e.g. if a business posts on its social media page)
  • Some methods of BTL promotion are seen as intrusive by customers (e.g. direct mailing)
  • Can’t reach a wide audience.
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42
Q

How does product differentiation affect promotion?

A

-Promotion has to provide a USP and differentiation in competitive markets.

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43
Q

How does the product life cycle affect promotion?

A

Different stages need different types or amount.

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44
Q

How does marketing budget affect promotion?

A

TV and radio adverts are expensive.

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45
Q

How does cultural sensitivity affect promotion?

A

Different regions may need different adverts as they could be offended.

46
Q

How does target market affect promotion?

A

Different ages, lifestyles.

47
Q

How does competitor action affect promotion?

A

May need to react to protect market share.

48
Q

What is the impact of promotion on stakeholders?

A

-If increased sales, more dividends for shareholders.
-Staff want to work in the company with a good image.
-May get more investment from shareholders.
-Needs a lot of time and planning (share a coke).

49
Q

What is place?

A

The way in which a product is distributed

50
Q

Why is place important?

A

-It is how customers access the product.
-It can create a certain image.

51
Q

What is a distribution channel?

A

the route a product takes from the place it is made to the customer who is the end user

52
Q

Examples of manufacturer-consumer?

A

Mcdonalds, KFC, Bakeries, farm shops.

53
Q

Advantages of manufacturer-consumer?

A

-Full profits.
-Full control.
-Simple and faster.

54
Q

Disadvantages of manufacturer-consumer?

A

-No opportunity to sell in bulk.
-Misses out on reputation of the large retailers.
-Harder to stand out from competition.

55
Q

Examples of manufacturer-retailer-consumer?

A

-Bread manufacturers, Sony TVs

56
Q

Advantages of m-r-c?

A

-Reputation of retailers means less advertising costs.
-Can bulk sell.D

57
Q

Disadvantages of m-r-c?

A

-Bad reputation of the retailer will affect your product.
-Less profit.
-More steps and stages.

58
Q

Examples of manufacturer-wholesaler-retailer-consumer?

A

-Corner shops buying from Costco.

59
Q

Advantages of m-w-r-c?

A

-Sell in bulk.
-More retailers have access to the product.

60
Q

Disadvantages of m-w-r-c?

A

-More chance of a bad image.
-Less profit.
-More stages to go through.

61
Q

What is multi channel distribution?

A

Multi-channel distribution involves a business using more than one type of distribution channel. Apple, Nike.

62
Q

What is digital distribution?

A

The distribution of goods and services digitally by downloading from a website

63
Q

Advantages of digital distribution?

A

-24/7 availability.
-Saves costs on shops/transport.

64
Q

Disadvantages of digital distribution?

A

-Large set up costs for the technology.
-Not all customer have internet access.
-Downloading has increases illegal sharing.
-Some customers prefer to try the product first.

65
Q

Why is getting the right distribution channel right?

A

-Customers choose convenient products.
-Image that a business wants to create.
-Social trends can change buying habits.
-Growth of e commerce.
-Changes from products to services (CDs to streaming).

66
Q

What happens if price is too high?

A

Demand will be low.

67
Q

What happens if price is too low?

A

Customers assume that the quality is low and it might not cover costs.

68
Q

What are price takers?

A

businesses that don’t have control over their prices

69
Q

What are price makers?

A

sellers that set the price of a good

70
Q

What are market orientated strategies?

A

Pricing strategies based on the market.

71
Q

Marketing skimming:

A

Setting a high initial price then lowering as demand falls.
-USP allows high price.
-Lots of revenue.

72
Q

Penetration pricing:

A

setting a low initial price on a new product to appeal immediately to the mass market.
-Price is then raised.
-Customers might assume low quality.
-If life cycle is too short then there won’t be time to recover.

73
Q

Loss leader pricing:

A

the pricing policy of setting prices very low or even below cost to attract customers into a store, in the hopes other goods will make up the costs.

74
Q

Destroyer pricing:

A

Setting a low price to force rivals, often smaller firms, out of the market. Illegal and anti-competitve

75
Q

Competitive pricing:

A

when a price is set based on prices charged by competitor businesses for a similar product.
-May not cover costs.
-Forces to compete on quality.

76
Q

Psychological pricing:

A

pricing goods and services at price points that make the product appear less expensive than it is. Left digit effect

77
Q

Premium pricing:

A

High prices for luxury products and the high price can make it more desirable.

78
Q

What is a cost based strategy?

A

Concentrates on costs and how to bring them down.

79
Q

Contribution pricing:

A

A method of pricing where the price charged is based on the variable costs of production.

80
Q

Cost plus pricing:

A

a method of setting prices in which the seller totals all the costs for the product and then adds a profit margin to arrive at the selling price

81
Q

Full cost pricing

A

Pricing method that uses all relevant variable costs in setting a product’s price and allocates those fixed costs not directly attributed to the production of the priced item.

82
Q

What factors do businesses consider when choosing a pricing stategy?

A

USP, elasticity, level of competition, strength of brand, stage in life cycle, costs, comparison websites.

83
Q

Why are pricing strategies important?

A

-Can increase sales/revenue and profits.
-Price is important to a customer when deciding to buy a product.
However, advertising the strategy is expensive, competitors may use the same and will have no effect, not all segments have the same ideal price.

84
Q

What is product?

A

the good/service offered to the customer.
-Often the product isn’t just the item, there is personality, style, status.

85
Q

Why is product important?

A

It has to meet the needs of customers and have the correct attributes and features that a customer wants to get them to buy it. A successful business will want to differentiate its products from their competitor’s products.
-A product is how the customers view the brand it is its identity.

86
Q

What is a product portfolio?

A

The range of products or brands provided by a business

87
Q

What is product portfolio breadth?

A

The number of product lines.

88
Q

What is product portfolio depth?

A

The varieties of product within the product lines.

89
Q

Benefits of a wide product portfolio?

A

-Spreads fixed costs.
-Can target a wider market.
-Reduces risk of failures.
-Opportunities for growth.

90
Q

Drawbacks of a wide product portfolio?

A

-More advertising.
-One bad product can wipe out a whole line.

91
Q

What is branding?

A

a name, term, symbol, design, or combination that identifies a seller’s products and differentiates them from competitors’ products

92
Q

Why is branding important?

A

-If it has a separate identity in a consumer’s mind, they are more likely to reach for it.
-Represents the business’ values and personality.
-Long term profitability.

93
Q

Advantages of branding?

A

-Creates customer loyalty and brand image.
-Stands out form competitors.
-Becomes more inelastic.
-Increases value and recognition of the business.

94
Q

Disadvantages of branding?

A

-High costs for advertising.
-Loss of value for one product will affect similarly branded products.
-Invites competition from copycat manufacturers.
-High r+d costs.

95
Q

What is a unique selling point?

A

the aspect or features of the product that differentiates it from its rivals.

96
Q

How to create a unique selling point?

A

Promotion, packaging, form, add ons, quality and reliability.

97
Q

What is the purpose of packaging?

A

Design, protection, information, convenience, costs, environmental factors.

98
Q

What is the product life cycle?

A

a concept that provides a way to trace the stages of a product’s acceptance, from its introduction (birth) to its decline (death)

99
Q

What are the stages of the product life cycle?

A

Introduction- new to the market, few people know of the product. Profit is low as development costs need to be paid off.

Growth- Product is more widely known and consumer. Profit starts to be earned.

Maturity- sales are approaching their peak. the product range may expanded and profits are high.

Saturation- Sales are highest, the market for the product is saturated and full. Profits may fall.

Decline- sales and profits fall. Extension strategies may be adopted.

100
Q

What are extension strategies?

A

Methods used to prolong the life of a product:
-Advertising, new packaging, new features, adding value, explore new markets and price reduction.

101
Q

What does the impact of extension strategies depend upon?

A

-Competitors, customer loyalty, age of the product.

102
Q

Relation between product life cycle and cash flow?

A

-Development- cash flow negative.
-Introduction- revenue is earned and cash flow still may be negative.
-Growth- enters positive cash flow.
-Maturity- positive.
-Decline- negative.

103
Q

Product life cycle for different businesses?

A

Manufacturing- long development process and introduction.
Retail- short development because products are ready to sell. Short life span.

104
Q

Advantages and disadvantages of product life cycle?

A

-Helps to plan and picking strategies.

-Difficult to tell if a fall in sales is decline or temporary.
-Change in trends, competitors, economic situation.
-Poor market research could lead to mistakes.

105
Q

What is the boston matrix?

A

a product portfolio analysis tool used to plan the development of products.

106
Q

What are stars?

A

high growth, high market share.
-Competition is fierce and are fighting for high profits.
-Advertsing costs are high.

107
Q

What are cash cows?

A

low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share.
-Distinctive brand image.

108
Q

What are question marks?

A

low share, high growth.
-In a fast growing market but they aren’t growing. They might have potential but needs to be revived.

109
Q

What are dogs?

A

low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash. Have to consider if they are worth pursuing.

110
Q

Advantages of boston matrix?

A
  • helps analyze product portfolio
  • it a snapshot of current position
  • allocate resources to the right area.
111
Q

Disadvantages of boston matrix?

A

-Too simplistic.
-No predictions.
-Can be misleading.

Component 1 Functions. (4 decks)

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