Marketing (blackwell)✔️ Flashcards
(109 cards)
1
Q
What is marketing
A
Marketing is about meeting the needs and wants of customers so that marketing’s primary aims of increasing sales can be met
2
Q
What is 4 p’s in marketing mix
A
-product: the product/ service that a customer buys
-price: how much the customer pays for the product/ service
-place: how the product is distributed to the customer
-promotion: how the customer is found and persuaded to buy the products
3
Q
What is promotion
A
The collection of techniques used to inform and persuade customers to buy product/service
4
Q
What is above and below the line promotion
A
ATL: Promotion which uses media where there is no direct contact to the customer
BTL: advertising strategy where products are promoted in media other than mainstream radio or television. Indirect contact. 3rd party
5
Q
What does above the line promotion include
A
Promotion where the business makes indirect contact to the customer
6
Q
What is included in above the line promotion
A
Tv
Magazines
Radio
Cinema
Billboards
Newspaper
7
Q
What is channels of distribution
A
A distribution Chanel provides a link between production and consumption, and can have several levels
1. Producer - consumer
2. Producer - retail - consumer
3. Producer - wholesaler - retail - consumer
4. Producer - agent - consumer
8
Q
What is included in below the line promotion
A
Email
Leaflet distribution
Personal selling
Product sampling
Trade fairs
9
Q
What is a wholesaler
A
The role of the wholesaler is to act as a 3rd part and to break bulk. Buy small bulk from the wholesaler
-wholesalers can move goods around the country using their own logistics, reducing costs and valuable time for businesses
-the manufacturer and retail can focus their efforts on their specialist areas
10
Q
What is an agent
A
-3rd part who negotiates between the producer and the buyer
-tend to operate in the tertiary sector
-agents sell the products and services of producers in return for a commission fee
-do not hold stock themselves
11
Q
Why would their be a change in channels of distribution
A
-economy
-size of market share for dominating business, results in strong bargaining power with producers
-congestion of city/ towns
12
Q
What is online distribution
A
Refers to a tangible product being purchased online and then delivered to consumer by means of physical distribution (Zara Amazon)
13
Q
What is digital distribution
A
Refers to electronic methods being used to deliver a good to the customer
14
Q
Advantages and disadvantages of online distribution for business
A
+geographical reach to customers increased, overheads lower, can be open at all times
-shipping and returns can be complicated and costly, initial capital investment high, customers may not like to buy products without physically touching them
15
Q
Advantages and disadvantages of digital distribution
A
+customers can buy and consume products 24 hours a day, costs saving to either the business/customer we there is no delivery cost involved, storage costs decrease, immediate
-not suitable for all products, relays on customers having access to the internet, high initial cost, ongoing costs of system/website maintenance as well costs to maintain security
16
Q
What is physical distribution
A
Physical method of distribution which business uses. Using road, boat and airplane transport to ship products from producer to customer
17
Q
Why would the means for physical distribution change
A
-the need for freshness for perishable items
-the price which the consumer is prepared to pay for fresh rather then dozen products
-the need to make regular deliveries
-the price of the product (low value products need cheaper distribution systems)
18
Q
What is price elasticity of demand and equation
A
Whenever the price of a product/service is changed, the level of demand will change as well
%change in demand/% change in price
-over 1 elastic in relation to price change
-below 0 inelasticity to price change (necessary)
19
Q
Income elasticity of demand equation
A
Income elasticity of demand measures the extent to which the quantity of a product demanded is affected by a change in income
-% change in quantity demand / % change in income
20
Q
What is cross price elasticity
A
This measures the responsiveness of demand for good X following a change in the price of related goods Y
-% change in demand for good X/ % change in price of good Y
21
Q
Advantages and disadvantages of cross price elasticity
A
+useful as it can help markets decide whether/how much to increase/decrease price by
-it assumes you know what will happen to demand as a result of a change in variable, info may not always be available, difficult to predict with new products as previous data will be limited
22
Q
Marketing mix: price
A
-the amount of money that a customer needs to give up in order to obtain a product/service
23
Q
What are the 8 different types of pricing
A
-cost +: pricing adds a % of the cost of making a product to give the selling price
-competition based pricing: when a price is set based on prices charged by competition to businesses for a similar or identical product (usually lower)
-price skimming: setting a high price to maximise profits during the initial stages of the product life cycle
-penetration pricing: when entering a market, set price lower then competition to break customer loyalty
-marginal pricing: the practice of setting the price of a product to equal the extra cost of producing an extra unit of output
-contribution pricing: setting a price based on a variable cost of producing a product as well as the fixed cost
-psychological pricing: designed to appeal to customers who use emotional rather then rational responses to pricing messages £9.99
24
Q
What is advertising elasticity of demand
A
-the extent to which spending on advertising will affect sales
-% change in demand / % change in advertising spend
-if over 1 advertising is good
25
Marketing mix: product
-product life cycle: a theoretical model which describes the stages that a product goes through overtime
1.introduction: researching developing and launching the product
2. Growth:When sales are increasing at their fastest
3. Maturity: sales are near their highest but the rate of growth is slowing down
4. Final stage of teh cycle when sales begin to fall
26
What will marketing look like at each stage of product life cycle
1. Intro: sales will be low, promotion needs to be high, skimming, cost plus and penetration pricing, costs will be high with low return
2.growth: sales will increase, improve cash flow, large expenditure, less advertising but more persuasive, larger distribution
3. Maturity: sales level off, little advertising, breaking into profit
4: decline: lower price, distribution may be limited and less advertising
27
Strategies to extend life cycle
-advertising
-price reduction
-adding value
-explore new markets
-new packaging
28
What is market mapping
-once the entrepreneur has identified an appropriate segment of the market to target, they must position the product so that it meets the needs and wants of the target customers.
-includes 4 positions in a + chart
•high quality
•high price
•low quality
•low price
29
What is product positing chart
-plotting a grid for here each product sits on scales based on 2 important features of a market
-product positioning is is a strategic marketing exercise that challenges teams to decide how they want their product to fit in the market place. The goal is to find out who your audience is, what they need and how the product can help
-it helps identify a gap in the market and must make sure that it is a worthwhile gap.
30
What is product portfolio
When businesses produce a range of products eg/ cars ford
31
What is Boston matrix and the 4
A businesses with a range of products has a portfolio of products. It must decide how to allocate investment across the portfolio. This categorises the products into 4 different areas based on market share and market growth
•question mark (top left)
•dogs (bottom left)
•cash cows (bottom right)
-stars (top right)
32
Boston matrix: stars
-stars are 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
33
Boston matrix: cash cows
Cash cows are low growth products with 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 continue to generate the strong cash flows that the company needs for its stars
34
Boston matrix: question marks
QM are products with low market share operating in high growth markets. This suggests that they have potential but may need substantial investment to grow market share at the expense of larger competitors.
35
Boston matrix: dogs
-refer to products that have a 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 withdrawn from sale
36
Evaluate the usefulness and limitations the Boston matrix is to a business
Useful:
-can identify stars to invest in
-can identify cash cows to reduce investment in
-identify which QM to invest in and which to dump
Limitations:
-doesn’t look at other factors that drive profitability
-doesn’t say when to reduce investment
-cash cows may need advertising to maintain market share
37
Value analysis triangle
-function
-cost of product
-aesthetics
Value added= output -input
38
What is promotion
Collection of techniques used to inform and persuade consumers to buy a product/service
39
What is ansoff matrix
A marketing planning model that determines its product and market strategy
40
How does ansoff matrix work
-ansoff matrix suggests that a business growth strategy depends on whether it markets new or existing products in new or existing markets
41
What are the 4 sections in ansoff matrix
-product development
-market development
-diversification
-market penetration
42
What is below the line promotion and what 6 techniques are they
Business can directly contact potential customers
-personal selling
-product sampling
-email
-leaflet distribution
-trade fairs
43
What is BLP personal selling and it’s adv and dis
Personal selling occurs when a sales representative meets with a potential client for the purpose of transacting a sale.
Adv:
-likely to be more persuasive due to physical interaction
-easy to reach target audience
-able to build relationship with customer
-can be more convenient for customer
Dis:
-training costs
-time consuming
-reach limited audience
44
What is BLP product sampling and adv and dis
Business spreads word about new product and reach prospective buyers with a free product
Adv:
-helps to build customer loyalty
-customer gets a feel for the product
-gets people thinking about the products
Dis:
-losing money
-no guarantee the customer will buy in the future
-difficulties selecting truly representative sample
45
What is BLP email and adv and dis
Emailing a customer about products and the business
Adv:
-very cheap
-quick
-keep record of message
-can contain lots of info and links
Dis:
-may end up in junk
-removes personal aspect
46
What is BLP telesales (phone sales)
and adv and dis
-selling goods and services over the phone
Adv:
-low overheads costs
-extent business research
-ability to work from home
-develop conversations
Dis:
-resentment from customers
-quality staff cost more
-phon calls aren’t always answered
-can be misleading
47
What is BLP leaflet distribution and adv and dis
handing out leaflets on the street to distributing leaflets to the home also known as a door drop
Adv:
-can fit lots of info
-easy to target geographical areas on big and small scale
-visual
Dis:
-high rejection rate, waste of money
-better for mass marketing as it’s difficult to reach specific audience
48
What is BLP trade fairs and adv and dis
Exhibition where businesses within an industry promote their production
Adv:
-generate brand awareness
-create customer relationship
-ideal for introducing new products
-target market
Dis:
-high cost in travel
-close proximity to competitors
-turn out may be low
49
What is above the line promotion
Uses media where there is no direct contact with potential customer. Uses a 3rd party
-television
-billboards
-social media
-brand
-viral marketing
-drip marketing
-service marking
50
What is ALP television and its adv and dis
Advertising on tv
Adv:
-reach mass audience
-exposed to more people
-visual/sound aspects easy to remember
Dis:
-expensive
-people may skip it
51
What is ALP billboards and its adv and dis
Advertising on bill boards
Adv:
-busy roads and traffic lights are good places
-more cost effective then the
-more exposure in one day
Dis:
-static nature means less exposure then tv
52
What is ALP social media and its adv and dis
Posting on social media apps like Instagram, snap chat, Facebook ect. About the bsuiness or products.
Adv:
-more effective then other mediums eg/ tv
-customer interaction can be more personal
-social media presence can boost traffic to the business website
-success can be easy to measure through evaluation of sales of particular products
-target audience can be reached through choice of platform
Dis:
-resources have to be dedicated to creating content aswell as responding to feedback
-damaged brand reputation from inappropriate posts
-affected by influencers control
53
What is ALP brand and its adv and dis
Name, sign, symbol or design linked to a particular product in order to differentiate form competition
Adv:
-people want to be associated with some brands, helps persuade them to buy certain products over others
Dis:
-brand can face big issues if a target audience no longer what it be associated with it
54
What is viral marketing
Involves the use of social media sites to increase brand awareness and is so called because the advert will be shared likes computer virus
-can supply it’s audience with something of value for free or contain amusing/unique content.
55
What is drip marketing
-drop campaigns are automated processes that send a set of messages to customers once they ahve subscribed to a business emails. (usually emails to move them through the scales cycle) eg clothing retailers sending ‘new season’ and complete your shopping emails
56
What is service marketing
How a business meets the customer wants/needs of an activity that a business does for you (service)
57
What are the 3p’s if service marketing mix
-people: the people who make contact with customers in delivering the product(customer service experience, after sales support, booking agent)
-process: the systems and processes that deliver a product to a customer (layout of website, mobile friendly version of website, support procedure, transaction process)
-physical: the element of the physical environment the customer experiences (reception area, cleanliness, staff uniforms)
58
What is business to business marketing
Business selling to another business. They follow their marketing on;
-personal selling
-trade fairs
-trade magazines
59
What is business to customer
A business selling to a customer
-use all of the marketing mix
-focus on above and below line promotion
60
Marketing models: AIDA
AIDA is a promotional model applied specifically to advertising
-attention
-interest
-desire
-action
It represents the stress which the consumer of the material must travel through the marketing department is to convince them to buy their products
How does it work:
-It is used to plan advertisements as it considers the impact of each element of AIDA on the person being exposed to the material
-the theory is that if the cycle is broken at any point the advertisement will not result in a purchase
61
Advantages and Limitations of AIDA
Adv:
-allows marketers to learn more about consumers, meet their needs, and enhance their interaction with clients.
Dis:
-amusing and interesting promotional activities may stimulate interest in the advertisement but not the product itself
-customer may be unable to act on the desire. Therefor the business may need to carefully segment the market when choosing who to aim the advert at
62
What is DAGMAR
-defining advertising goals for measured advertising results
-it’s purpose is to formulate a strategy for a promotional campaign
Steps:
-the business firstly needs to decide what the goals of the campaign are
-the business ensures that the promotional campaign is planned with these goals in mind, so that the customer gains the required understanding
-the business measures the success against previously set criteria.
63
DAGMAR advantages and disadvantages
Dis:
-less useable then AIDA as AIDA tells you how to plan you advert
Adv:
-focuses on the message of advert to inform and pursuance so is useful in getting sales
64
What is ATR
Awareness:
-point when customers are informed by a product
-above or below the line advertising
-awareness may come from no advertising
Trial:
-searching for info
-buying and using it
-not a limited period of time, still trialing it’s even after a while
Repurchase:
-re buying the trail product again
65
Advantages of ATR
-‘ore straightforward then AIDA and DAGMAR
-east to understand
-business needs all 3 to be successful in revenue
66
Why might a customer not trail a product
-not accessible
-out of stock
-can’t afford it
-no locations near by eg/ abroad country or only in the capital city
67
What is market research
The collection of data to establish the needs and wants of customers, market demand and the strength of rivals.
68
Reasons market research it done
•describe the market – this means that the business can understand/identify their target customer so that they can align marketing appropriately. Are able to identify key trends within the market and identify their position in terms of market share.
•To explain the market – this means a business will be able to identify why other businesses/ their own business has succeeded or failed in particular aspects of marketing, and can also understand customer preferences for certain products
•To predict the market – predicting the market will allow a business to identify any trends that may become popular in their market and therefore adjust their product/service or marketing to fit this trend.
•To investigate the reaction of consumers in the market – undertaking market research encourages business to be proactive in developing products and services which will meet the needs and wants of their customers on a long term basis. Therefore, they will put forward suggestions to test the customer reaction, and then make a decision whether to take that idea further or not.
69
What is primary research
Conducting research yourself using your own work and findings
70
What is secondary research
Data that already exists and is used by someone who didn’t collect it
71
How does and interview work
They are usually a one-to-one discussion, conducted face-to-face, with a researcher or interviewer asking the participants (usually a potential customer/representative of the target market) previously decided questions. Answers are usually recorded.
72
Advantage and disadvantages of using interview for market research
Adv:
-can ask their own questions and give the interviewer time to explain their opinions and develop their answers. This means the business is provided with extensive information to make marketing decisions with.
Dis:
-Interviews are very time-consuming and expensive as interviewers must be trained to avoid bias, and the interviewee will also normally need to be paid. This limits the amount of other research the business is able to collect meaning that less overall data may be obtained.
73
Advantage and disadvantages of using surveys as market research
Adv:
-can be sent out immediately to multiple people. This means that data can be acted upon more quickly, potentially leading to a competitive advantage.
-cheap
Dis:
-they often lack detail as they don’t want to put off potential respondents.
-if only a few replied it is reliant or accurate
-Completion may be rushed leading to unreliable results.
-Responses are not usually detailed.
-Questions may not always be understood.
74
How does a focus group work
These are groups that consist of around 8-10 people who are given various stimuli, with their responses being recorded.
75
Advantage and disadvantage of using focus groups for market research
-Focus groups allow the business to easily measure customer reactions as they can see how they interact with the product (if a test product is given), therefore allowing the business to gain insight into the potential success of their product or service and obtain suggestions for improvements based on this interaction.
Dis:
-Focus groups can be expensive as although some consumers may offer time for free, many will want some sort of compensation (usually a bank transfer or voucher) for their time, therefore limiting the amount of other market research that the business is able to afford.
76
What is meant by trial marketing
Trial marketing is where a business will ‘test the waters’ in the market with their new product or service at a place where it is likely to be sold, e.g. crisps at a supermarket, or with a group of target customers, e.g. Children’s drinks at a school.
77
Advantage and disadvantage of using trail marketing in market research
Adv:
-the business can get real reactions from customers and therefore avoid wasting any money if it is unlikely to be successful
Dis:
-it could be very time-consuming and expensive as businesses will incur financial and time costs through the trial. If the trial is unsuccessful that this money from the marketing budget has been wasted.
78
How can sales data be used to help market research
-business can be able to see what products sell well and can look into developing these products
-Focusing on bestselling products reduces the risk incurred when developing new products.
79
How can loyalty card data be used by the marketing team
As this data would identify what products the customers are buying the most of, marketing teams can personalise emails or offers specifically for these products. This therefore encourages customers to order or go in to store to purchase the products and perhaps other products whilst there.
80
advantage and disadvantage of using market research reports as a method of collecting market research
Adv:
-that the work has already been done which saves the business time.
-cheap
Dis:
-the data might not be the information that the business was looking for.
-may not go into enough detail
-may be old data
81
Explain how newspapers and magazines could be used to collect market research.
Some newspapers and magazines may contain reviews of particular products i.e. make-up or cars. This means that the marketing department can save time establishing the pros and cons of the product as the review has already been conducted by somebody else.
82
What is census data
Data that is collected by the government every 10 years. For example, qualifications held and usual method of transport to work.
83
How van census data be useful for a business
-census data when predicting future demand. Census data indicates whether the size of the population is growing/shrinking, and so decisions can be made on thsi
-can see the demographics of areas (gender, language, age, culture ect)
84
Why so primary research more effective then secondary research
Primary market research is thought of as more reliable than secondary market research because it is collected by the business itself so they know exactly where the information is coming from and the actual results from any trials or interviews they conduct. Secondary market research h may not be completely true or accurate as outside researchers o information sources, especially competitors, may lie about their findings.
85
why primary market research is generally more costly than secondary market research.
Primary market research is usually more costly as the business may have to provide training or hire specialists to ensure the research to undertaken correctly. Furthermore, especially with interviews and focus groups, consumers/participants may expect compensation for their time. On the other hand, many secondary market research sources are more cost effective i.e. the internet. With sources such as this, the main cost that will be incurred is the cost of the person’s time undertaking the research.
86
why secondary market research is generally quicker to collect than primary market research.
Secondary market research is usually quicker because the research has already been conducted and is easily accessible online or in an article. This means that questions do not have to identified, the research does not have to be conducted and the results do not need to be collated/presented.
87
why secondary market research might result in research information which is not be exactly what a business wants.
Secondary research data already exists which means that it will not be tailored exactly to the requirements of the specific business. This might mean that specific questions cannot be asked or a different customer group has been targeted. As a result there might be gaps in the information that the business obtains.
88
Distinguish between quantitative and qualitative research
Quantitative research is the objective collection of data i.e. facts/statistics/numerical data, whereas qualitative research is collecting subjective data such as opinions.
89
Explain why a business should consider quantitative information obtained as a result of carrying out market research.
can provide the business with important statistics, for example the % of people interested in a new business idea. It is generally easier to obtain a large amount of quantitative data (compared to qualitative data), and therefore the business has a substantial amount of evidence to base a decision upon i.e. to set up a new business or abandon the idea.
90
Explain why a business should consider qualitative information obtained as a result of carrying out market research.
Qualitative data provides the business with a greater understanding about why customers like or don’t like their product or service. This helps them to establish reasons behind the statistics, allowing them to identify any changes or improvements they could make to their product/service/business to encourage customer interest.
91
What is a niche market and it’s advantages and disadvantages
Where a business targets a smaller segment of a larger market where customers have specific needs and wants (eg/ chilli chocolate)
Adv:
-can charge higher prices
-less competitive as it is a specific market
Dis:
-lack of economies of scale
-likely to attract competition if successful
92
What is a mass market and it’s advantages and disadvantages
Where a business sells into the largest part of the market, where there are many similar products on offer
-features: customers needs/ wants are less specific. High output
Eg: dairy milk
Adv:
-access to Economies of scale
-large market share
Dis:
-can’t charge high prices
-large competition
93
What is market segmentation and the types
The process where the market is split into different groups with different characteristics
Types:
-age
-occupation
-location
-gender
-income
-interests/ taste
-religion/ethnic groups
94
Why is it important for businesses to segment the market that they are operating in (advantages of segmentation)
-can take advantage of new opportunities for growth
-target advertising in a cost effective way
-customer differ (amount they will pay, benefits they require, media they are exposed to, where they buy them and quantities they buy) and therefor the knowledge of these differences means products/services can be developed to be better match these needs
-can maximise profits in some cases by matching pricing strategies to different types of customers
95
Disadvantages of market segmentation
-lack of information: some markets are poorly researched with little information about different customer needs and wants
-over segmentation: not meeting many peoples needs and so sales drop
-difficulty in measuring and predicting consumer behaviour: the way they may behave may change over time
-hard to reach customer segments once identified: there needs to be an effective way of reaching the segmented market once identified (promotion)
-excluding customers
96
Anticipating customer needs: what is impulses and planned purchase
Consumer buying behaviour= impulse buying
-Impulse: sudden/ immediate purchase of a product without pre shopping -Intention. Emotional purchase
Planned: going to a shop specifically to purchase something that is needed
97
How do increase impulse purchasing
-in store signs
-window displays
-products at tills
-product samples
-offer returns
-offer products to go along side your product
-aesthetic
-reduce section
98
What is customer orientation and product orientation
Customer: means a business reacts to what customers wants. The decision taken are based around the information about customers needs/wants
Product: means a business develops product based on what it is good at making/doing rather then what the customer wants
99
Advantage and disadvantages of customer orientation
Adv:
-well matched to needs/wants so therefor more likely to be successful
-loyal customers
-good reputation
Dis:
-market research is needed which will cost money
-may have too many needs/wants to meet
100
Advantage and disadvantages of product orientation
Adv:
-leads to innovation as identifys needs customers we’re not aware of
-more knowledge
Dis:
-business will need to find a customer to seek to and they may not exist
-customers may not like that a business doesn’t give to customer needs/wants
101
Standard deviation equation and steps
Step1: find the mean (add together/divide by number)
Step2: measure the spread from the mean for each number
Step3: square the number and add up at the bottom
Step4: E(x-x)*2/n (square root this)
102
Why is it useful to use standard deviation
-see what is more consistent in cash flow/revenue from sales
-when price moves, SD is high meaning investment will be risk
-can see if sales are consistent month to month or if there is a drop or rise in sales
-suggests that advertising is working
103
What is normal distribution
-68% of data is between 1SD from the mean
-95% of data between 2 SD from the mean
-99.7% data lies between 3 SD of the mean
104
What is marketing analysis
Is a quantitive and qualitative assessment of a market. It looks at factors such as size of the market, the various customers segments, the buying patterns of customers and the competition
105
What are market objectives and examples
-set out what a business wants to achieve from its marketing objectives activities. They need to be consistent with overall aims and objectives of the business
Eg/
•increase market share
•launch new products
•increase sales in a certain age group
•increase brand awareness in certain locations
•increase number of customers who rate service as excellent
106
How does budget affect marketing
-if there is a large budget they can market on a larger scale, multiple marketing schemes ect. The same the other way round
107
How does knowledge affect marketing
Need to know how to market successful and identify who they are marketing to. More knowledge and experience on how to create a good marketing advert. Gives better reputation and can make the business/product look better and have better quality
Reaches more people
108
What is SWOT analysis
A framework for a business to access its current position in order to make the best decisions for its future strategy
-strengths
-weakness
-opportunities
-threats
109
Usefulness of SWOT analysis
Adv:
-Can Be Applied to Any Company and Situation
-improve planning, communication and decision making
-low cost
-simple
Dis:
-bias
-doesn’t tell managers how to implement change
