Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business > Marketing > Flashcards

Marketing Flashcards

1
Q

What is promotion?

A

The collection of techniques used to inform and persuade customers to buy a product or service.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is marketing?

A

Marketing is about meeting the needs and wants of customers so that marketing’s primary aim of increasing sales can be met.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

The marketing mix

A
  • Product - the product or service the customer obtains.
  • Price - how much the customer pays for the product.
  • Place - how the product is distributed to the customer.
  • Promotion - how the customer is found and persuaded to buy the product.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Above the line promotion

A

Promotion which uses media where there is no direct contact with the potential customer.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Below the line promotion

A

Promotion where the business can directly contact the potential customer.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Examples of above the line promotion

A
  • TV
  • Radio
  • Magazines
  • Cinema
  • Newspaper
  • Sponsorship
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Advantages of using TV as an advertising medium

A
  • Reaches a mass audience, exposing more people to the product.
  • The visual / sound aspects are easy to remember.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Disadvantage of using TV as an advertising medium

A

It is very expensive compared to other mediums.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a trade fair?

A

An exhibition held so that companies in a specific industry can showcase and demonstrate their products and services, meet with industry partners and customers, study activities of competitors and examine recent market trends and opportunities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Advantages of trade fairs

A
  • Create lasting impressions if done right.
  • An in-person presentation and opportunity can help you close a deal quickly when compared with other forms of marketing.
  • Major shows have a high number of visitors in attendance.
  • Trade fairs level the marketing field - everybody has access to the same attendees.
  • Cost-effective networking and advertising opportunities.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Disadvantage of trade fairs

A

There is a lot of planning, designing, coordination and organising that needs to go into attending a trade fair.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Examples of below the line promotion

A
  • Direct mail campaigns
  • Social media marketing
  • Trade fairs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Advantages of below the line promotion

A
  • It targets a specific audience or market, allowing marketers to create personalised campaigns that resonate with the audience.
  • The advertising campaigns are typically easier to track and measure.
  • Can build brand loyalty by creating an interactive and personalised experience for the target audience.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Disadvantages of below the line promotion

A
  • It can be challenging to scale up or maintain as a brand grows.
  • Personalised interactions can be more time-consuming and expensive to create.
  • Its reach can be limited because it is often focused on a specific geographic location or target audience.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is merchandising or branding?

A

Merchandising or branding is any action that encourages the consumer to purchase goods; it includes presentation, packaging, the range of goods available, pricing and discounting.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is drip marketing?

A

A strategy employed by businesses where the information is sent in bit by bit to the consumer using a particular medium.
This medium is usually by email, because this can be done at a low cost to the business.
It is also possible to use drip marketing using post or social media. Social media is becoming increasingly popular particularly amongst young people.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is viral marketing?

A

Viral marketing is sometimes referred to as marketing buzz.
It is the use of social networking sites to increase brand awareness, and the advert will spread through the site like a computer virus in the form of video clips, pop-ups, flash games or images.
Its use is particularly popular in markets where the customer base is young.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is advertising elasticity of demand (AED)?

A

The extent to which spending on advertising affects sales.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

AED formula

A

Percentage change in demand ÷ percentage change in advertising spend

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Interpreting AED

A
  • Over 1 = elastic relation to advertising spending (i.e responsive).
  • Under 1 = inelastic relation to advertising spending (i.e not responsive).
  • 1 = response equals advertising spend.
  • 0 = no change in sales.

The figure should not be below 0, because this would mean that as you spend more on advertising, your sales actually decrease.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is a disadvantage of AED?

A

A lot of advertising may not be used to directly boost demand, but to help with building a brand image or brand loyalty.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is price?

A

The amount of money that a customer needs to give up in order to obtain a product or service.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Cost plus pricing

A

This is a pricing method that adds a percentage to the cost of making a product to give the selling price.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Competitor pricing

A

This is when a price is set based on prices charged by competitor businesses for a similar or identical product.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Price skimming

A

This is where the product is more advanced than that of competitors and/or customers want to associate with a particular brand, and therefore a price is set high because customers are willing to pay higher prices to own that product.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Penetration pricing

A

When a business is new to a market, a price is set lower than competitor businesses.
This is a short-term strategy to help break customer loyalties from trusted brands.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Marginal pricing

A

Based on the assumption that since fixed and variable costs are covered by the current output level, the cost of producing an extra unit (marginal output) will comprise only of variable costs.
Hence, any amount by which the selling price exceeds the variable costs incurred by the marginal output will be the profit.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What is psychological pricing?

A

This involves setting a price that sounds less than it actually is.
Charging 99 pence sounds substantially cheaper than £1.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What are loss leaders?

A

This pricing strategy is often used to entice consumers into a particular retail outlet.
It is heavily used by supermarkets, which usually reduce the price of essential products such as sugar, milk, soups, beans and bread to below cost.
Careful consideration is given to the placement within the shop of the loss leader so that once consumers are enticed into the shop, they will have to pass a range of products that it is hoped they will purchase, often on impulse. These sales will compensate for the losses made on the loss leaders.

30
Q

What is price elasticity of demand (PED)?

A

A measure of the change in demand of a product in relation to a change in its price.

31
Q

PED formula

A

Percentage change in demand ÷ percentage change in price

32
Q

Factors that change price elasticity of demand

A
  • Whether it is a necessity or a luxury.
  • The level of price change.
  • Whether it is subject to habitual consumption.
  • The number of substitutes.
  • Whether the purchase can be postponed.
33
Q

Interpreting PED

A
  • Over 1 = elastic in relation to price.
  • 1 = demand is unit elastic (% change in demand = % change in price).
  • Between 0 and 1 = inelastic in relation to price.
  • 0 = demand is perfectly inelastic (i.e demand does not change at all when price changes).
34
Q

What is income elasticity of demand (IED)?

A

Measures the extent to which the quantity demanded of a product is affected by a change in income.

35
Q

IED formula

A

Percentage change in demand ÷ percentage change in income

36
Q

Income elasticity - luxuries

A
  • Income elasticity more than 1.
  • As income grows, proportionally more is spent on luxuries.
  • Examples: consumer goods, expensive holidays, branded goods.
37
Q

Income elasticity - necessities

A
  • Income elasticity less than 1, but more than 0.
  • As income grows, proportionally less is spent on necessities.
  • Examples: staple groceries (e.g milk), own-label goods.
38
Q

Interpreting IED

A

Most normal products:
- A rise in consumer income will result in an increase in demand.
- A fall in consumer income will result in a fall in demand.

The extent of the change (elasticity) will vary depending on the type of product (e.g luxury or necessity).

39
Q

Inferior goods (negative income elasticity)

A
  • For inferior goods, as income rises demand falls.
  • IED is negative (less than 0).

Demand falls because:
- Consumers switch to better alternatives.
- Substitute products become affordable.

40
Q

What is cross price elasticity of demand (XED)?

A

This measures the responsiveness of demand for good X following a change in the price of a related good Y.

41
Q

XED formula

A

Percentage change in demand for good X ÷ percentage change in price for good Y

42
Q

Determinants of XED

A
  1. Whether the goods are substitutes or complements:
    - Substitutes have positive XED (a fall in price of one product will lead to a fall in demand for a substitute).
    - Complements have negative XED (an increase in the price of one product will lead to a fall in demand for a complementary product).
  2. The strength of brand loyalty for a product.
    - Weak brand loyalty —> highly positive XED.
43
Q

What is the product life cycle?

A

A theoretical model which describes the stages that a product goes through over time.

44
Q

What are the stages of the product life cycle?

A
  1. Introduction
  2. Growth
  3. Maturity
  4. Decline
    (& extension strategies)
45
Q

What is the introduction stage of the product life cycle?

A

Researching, developing and then launching the product.

46
Q

What is the growth stage of the product life cycle?

A

When sales are increasing at their fastest rate.

47
Q

What is the maturity stage of the product life cycle?

A

Sales are near their highest, but the rate of growth is slowing down (e.g new competitors in the market or saturation).
Most profitable as costs have been recovered.

48
Q

What is the decline stage of the product life cycle?

A

Final stage of the cycle, when sales begin to fall.

49
Q

What is an extension strategy?

A

At some point, sales begin to decline and the business has to decide whether to use an extension strategy to bolster sales.

50
Q

Examples of extension strategies

A
  • Advertising - try to gain a new audience or remind the current audience.
  • Price reduction - more attractive to customers.
  • Adding value - add new features.
  • Explore new markets - sell to new geographical areas or create a version targeted at different segments.
  • New packaging - brighten up old packaging or make subtle changes.
51
Q

What is a product portfolio?

A

The complete collection of products or services that a business sells.

52
Q

Pros of the product life cycle

A
  • Helps with planning (can make appropriate changes to marketing strategies).
  • Helps managers to avoid the pitfalls of the different stages (they can sport trends before they occur by comparing their products to similar products at similar stages in their life cycles).
53
Q

Cons of the product life cycle

A
  • Too clean a picture (sometimes a product’s sales may not rise beyond the introduction stage, or sales may decline and then rise - managers can be too rigid in their strategies).
  • Product life cycles can be self-fulfilling.
54
Q

What is the Boston Matrix?

A

A tool that businesses can use when deciding what products to produce.
It is a way of categorising the products within the portfolio of the business.
This matrix considers products in terms of their market share and potential for market growth.

55
Q

What are the 4 categories of products in the Boston Matrix?

A
  1. Star (high market growth, high market share).
  2. Cash cow (low market growth, high market share).
  3. Problem child / question marks (high market growth, low market share).
  4. Dog (low market growth, low market share).
56
Q

Boston Matrix - stars

A
  • High growth products competing in markets where they are strong compared with the competition.
  • Often stars need heavy investment to sustain growth.
  • Eventually growth will slow and, assuming they keep their market share, stars will become cash cows.
57
Q

Boston Matrix - cash cows

A
  • Low growth products with a high market share.
  • These are mature, successful products with relatively little need for investment.
  • They need to be managed for continued profit so that they can continue to generate the strong cash flows that the company needs for its stars.
58
Q

Boston Matrix - question marks / problem children

A
  • Products with low market share operating in high growth markets.
  • This suggests that they have potential, but may need more substantial investment to grow market share at the expense of larger competitors.
  • Management have to think hard about ‘question marks’ - which ones should they invest in? Which ones should they allow to fail or shrink?
59
Q

Boston Matrix - dogs

A
  • Products that have low market share in unattractive, low-growth markets.
  • Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in.
  • Dogs are usually sold or closed.
60
Q

What is place?

A

This refers to how the product is distributed (not the location of the business).

61
Q

What are channels of distribution?

A

A distribution channel provides a link between production and consumption.
It can be very simple with just 2 layers (producer and consumer).
However, it can be more complicated with several levels of intermediaries.

62
Q

Different channels of distribution

A
  1. Producer —> wholesaler —> retailer —> consumer
  2. Producer —> retailer —> consumer
  3. Producer —> consumer
  4. Producer —> wholesaler —> consumer.
  5. Producer —> agent —> consumer
63
Q

What is a producer?

A

Manufacturer of the product.

64
Q

What are the different intermediaries?

A
  • Retailers
  • Agents
  • Wholesalers
65
Q

What are retailers?

A

Responsible for selling the final product to the consumer.

66
Q

What are the different kinds of retailers?

A
  • Multiples (chains of shops)
  • Department stores
  • Convenience stores
  • Independents (a shop run by its owner)
  • Franchises
67
Q

What is a wholesaler?

A

A business that buys products in bulk from the producer, who then sells smaller quantities to retailers and/or consumers.

Wholesalers may be important to producers because they are too big to deal directly with every shop that sells its products.

Wholesalers help small shops because it means they do not need to store large quantities of goods.

68
Q

What is an agent?

A

The agent is a third party between the producer (seller) and the buyer.
They typically operate in the third sector, and build their revenue on a commission basis.

69
Q

What is online distribution?

A

A tangible product being purchased online and then delivered to the customer by means of physical distribution.

70
Q

What is digital distribution?

A

Electronic methods being used to deliver a good to the customer.

Business (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions