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AA IB Business HL > Marketing 4.1-4.3 > Flashcards

Marketing 4.1-4.3 Flashcards

(66 cards)

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1
Q

What is the overarching function of the marketing department?

A

takes care of anything related to the relationship between the company and the customer

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2
Q

What is a market orientation approach?

A

a business approach that prioritizes identifying the needs and desires of consumers and creating products/services that satisfy them

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3
Q

What is a product orientation approach?

A

a business approach where companies focus on their products, then focus on selling them

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4
Q

Why is a patent a good motivator?

A

a business can earn large revenues as the only seller of the good, leading to USP

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5
Q

Pros of product orientation

A
  • monopoly power and patents
  • higher product quality and USP
  • lack of competition
  • continuous innovation, as you would be the 1st in the new industry
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6
Q

Cons of product orientation

A
  • risky to overlook customer’s needs and may lead to product failure
  • costly - research and development, investment
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7
Q

Pros of market orientation

A
  • low risk, as it is more likely that customers will buy
  • customer satisfaction and loyalty
  • social enterprises to solve human, real problems
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8
Q

Cons of market orientation

A
  • no USP, greater competition
  • market research must be right
  • agility and ability to respond to changes in the market
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9
Q

Difference in resource allocation for product/market oriented companies

A

product oriented - R&D
market oriented - market research and testing

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10
Q

Difference in key departments involved for product/market oriented companies

A

product oriented - R&D, production, quality control
market oriented - market research, sales, advertising

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11
Q

Difference in synergy for product/market oriented companies

A

product orientation requires a stronger synergy between operations and marketing

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12
Q

Difference in core areas of business for product/market oriented companies

A

strong operations dpt. required for PO
strong marketing dpt. required for MO

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13
Q

What is market share?

A

the value of a single company’s sales/revenues compared with the sales of all businesses in a market

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14
Q

What are the two calculations for market share?

A

market share = product sales/total market sales x 100

market share = number of units sold by the company/total number of units sold in market x 100

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15
Q

What is market growth?

A

the increase in sales revenues or sales volume in an individual market over time

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16
Q

Market growth formula

A

market growth = (total market sales T2 - total market sales T1)/total market sales T1

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17
Q

Why is market growth desirable for a business?

A

it is easier to sell many products and earn revenue
however may attract more competitors

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18
Q

What are the advantages of being a market leader?

A
  • more revenue
  • more brand awareness/recognition, increasing revenue
  • more flexibility and control in changing prices and determining the market, price leadership
  • easier to distribute due to better brand image, which can create a positive feedback loop
  • economies of scale
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19
Q

What are network effects and their pros/cons?

A
  • product becomes more valuable the more people use it
  • large business may continue to dominate and abuse power in networks
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20
Q

Why is price control for market leaders good/bad for customers?

A
  • business may be able to lower price for customers
  • business could take higher profits and “scam” customers
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21
Q

Why is innovation control for market leaders good/bad for customers?

A
  • large businesses have enough profit for investment and R&D
  • there could be little incentive to innovate due to dominance
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22
Q

What are some disadvantages of market leadership for the business, the economy, the society and the environment?

A
  • less incentive to innovate
  • lobbying of political leaders to weaken environment, labor, antitrust laws etc
  • lobbying for support of MnA
  • resisting trade unions
  • tax loopholes
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23
Q

What are market growth prime numbers?

A

HIGH - more than 10%
MID 5-10%
LOW less than 5%

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24
Q

What is a marketing plan?

A

a document that outlines the entire marketing process of a business

  1. marketing objective
  2. marketing budget
  3. segmentation and target market
  4. market research
  5. marketing strategies
  6. control tools
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25
What is segmentation?
splitting prospective buyers into groups of people with similar needs/characteristics who respond similarly to marketing actions
26
What does segmentation involve?
splitting a population into groups of people with similar needs/characteristics
27
What is a target market?
the consumer segment at which a business aims it marketing messages
28
What is the relationship between STP and competition?
S and T - not dependent on competitors P - dependent on competiros
29
Main methods of segmentation used by businesses:
geographic demographic psychographic behavioral
30
What is demographic segmentation? How can it be obtained?
based on observable, people-based differences eg age, gender, income, nationality... obtained by asking your own customers or 2nd party data
31
What is psychographic segmentation?
divides according to lifestyle, emotional, personal aspects - more mental
32
What is geographic segmentation?
based on a customer's location
33
What is behavioral segmentation?
what you do - behaviour of consumers, knowledge/attitude/response to a promotion
34
How can one implement market segmentation?
1. define market 2. segment market 3. define which segment you will target
35
What is a niche market? What is a mass market?
niche - a small segment of a larger market, oversegmented markets mass - little segmentation, targets larger segments of the markets, goods produced in volume
36
How are niche market customers?
they have specialised needs/wants different from the larger market
37
Advantages of niche markets
- although sales volume is low, lack of competition means customer loyalty - can charge higher prices - focused business efforts - easier brand loyalty - easier marketing efforts - small businesses
38
What is USP?
unique selling point - what is special about your marketing/price/product/promotion/place...?
39
Which promotional technique are niche/mass companies most likely to use?
niche: below the line eg direct marketing mass: above the line eg television, sponsoring global sporting events
40
Why are goods sold in mass markets less expensive than in niche markets?
economies of scale
41
How is the marketing mix in mass markets?
same marketing mix to target all customers
42
Advantage of mass markets
- if successful, can lead to incredibly high quantities of sales/revenues - economies of scale, mass production and one marketing mix
43
Disadvantages of mass markets
- attractiveness and size of market means intense competition - competition may lead to price competition and low profit margins - high cost, above the line promotion
44
Disadvantages of niche markets
- high per unit cost - less reach, smaller profits due to less goods - little growth potential
45
Why is USP important?
gives the customer reason to select a company's brand over a competitor's
46
What is differentation?
differences between a product/service and its rivals
47
What comprises a good USP?
add value to the consumer difficult to copy may come from any part of its marketing mix
48
What is "attribute ownership"?
a way that businesses try to differentiate their products by a trait eg volvo is safe, silk from china is high quality...
49
What are methods to differentiate your product?
- good for product oriented - first mover advantage - first in a new market - patents - attribute ownership - designing/updating a product to appear relevant
50
What is differentiation by price USPs?
- companies with lowest operating costs - significant economies of scale - most difficult USP to maintain due to competition - could be premium pricing to signal quality/exclusivity
51
What is differentiation by promotion USPs?
- good promotion can lead to customer loyalty - long term positive brand image
52
What is differentiation by place USPs?
- store in convenient locations or offering global distribution network - placing a product in convenient/correct distribution channels
53
What is differentiation by people USPs?
- good employees and customer service - result of high employee motivation
54
What is differentiation by physical evidence USPs?
- physical environment of the business - eg sephora's layout of makeup to allow easy comparison
55
What is differentiation by process USPs?
- efficient process like excellent customer service/speed of service - good refund process, short shipping times, easily accessible customer service
56
What is sales forecasting?
a quantitative technique used by businesses to predict the levels of sales that they may expect in future years
57
How can sales forecast be measured?
quantity of products or in total revenue earned
58
Benefits of a correct sales forecasting
- effective future planning - based on past data, validity - better ability to decide - if sales are set to grow, business can ensure extra demand is met - if they feel they cannot meet demand, they can increase prices - may choose to reduce production - may choose to increase marketing budgets to fight off decline - evaluate staff performance and set employee goals
59
Limitations of sales forecasting
- cannot always predict the future accurately - is only quantitative, not qualitative analysis - lack of information to make forecasts - rapidly changing markets
60
three types of sales forecasting methods
- causal models - time series analysis - qualitative techniques
61
causal models
the relationship between a variable (external or internal) and sales, then a line of best fit to understand their relationship, then extrapolation
62
time series analysis and moving averages
identifying trends in historical data, such as sales revenue in previous years, to forecast the future when there are significant variations, data needs to be smoothed out by plotting moving averages, then given a line of best fit
63
3 main types of variation in data
seasonal, cyclical and random seasonal - higher sales at certain times of the year cyclical - sales affected by economic cycle random - unpredictable events
64
qualitative analysis and market research in sales forecasting
forecasting buying preference and consumer behaviour can use market research before sales forecast
65
What are product positioning maps?
visual representations of how various competitors might attempt to position their brands in the eyes of the consumer usually displays two attributes
66
Uses of product positioning maps
- identifying market segments whose needs and wants are not fulfilled - establishing gaps and opportunities in the market for launching new products - helping a business understand their closest competitors/threats are, and to use this information to target the market appropriately

AA IB Business HL (7 decks)

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