Marketing strategies

Question 1

What is market segmentation?

Answer 1

MARKET SEGMENTATION is the process of dividing a whole market into groups of people who share one or more common characteristics. Once segmented the business chooses a target market.

Question 2

what is the aim of market segmentation

Answer 2

The ultimate aim is to increase sales, market share and profits by better understanding and effectively responding to the desire of the different target customers – customer centricity.

Question 3

what are the 4 segmentation variables

Answer 3

Demographic (age, gender, income, education)
Geographic (region, climate, urban/rural)
Psychographic (personality, motives)
Behavioural (purchase occasion, price sensitivity)

Question 4

What is product/service differentiation?

Answer 4

when products that are similar are made to appear different from and/or better than those of their competitors – creation of products/features that distinguish a businesses good and services from competitors.

Question 5

what are the 4 points of differentiation?

Answer 5

SEC C
Social and ethical issues
environmental concern
customer service
convenience

Question 6

What is product/service positioning

Answer 6

the technique marketers use to try to create an image or identity for a product compared with the image of competing products – how the target market perceives the business and its products!!!

Question 7

What is branding?

Answer 7

A brand is a name, term, symbol, design or any combination of these things that identifies a specific product and distinguishes it from its competition.

Question 8

Customer benfits of branding

Answer 8

• Helps identify products they like and evaluate the quality of products
• Helps reduce level of perceived risk – a respected brand would provide reassurance
• Gain psychological reward from buying from a brand that symbolises prestige

Question 9

Business benefits of branding

Answer 9

• Helps to gain repeat sales as consumers are familiar with products and the brand
• Helps encourage consumer loyalty
• Helps differentiate business from competitors

Question 10

What is packaging? and its functions

Answer 10

Packaging is the development of a container and the graphic design for a product. The functions of packaging include:
o Preserves the product
o Protects the product from damage or tampering
o Attracts consumers attention – assists sales
o Divides the product in convenient units
o Assists with the display of the product
o Makes transportation and storage easier

Question 11

What are the 3 pricing methods

Answer 11

The first step in pricing is setting a base price.

1. cost-based pricing = business determines the cost of production and then adds a markup
2. market based pricing = prices are set following the levels of supply/demand in the market
3. competition based = prices are set to cover production and operating costs and are comparable with competitors

Question 12

What are pricing strategies

Answer 12

Once the base price has been set, pricing strategies are used to adjust the base price and refine more depending on marketing objectives, life cycle of product and economic conditions.
- price skimming
- loss leaders
- price penetration
- price points

Question 13

what is price skimming?

Answer 13

Business charges highest prices possible during introduction stage in order to cover research and development costs. (e.g. APPLE)

Question 14

What is price penetration?

Answer 14

Business charges lowest possible price for a product to quickly achieve a large market share for a product
- Can be difficult to raise prices

Question 15

what is price points?

Answer 15

Selling product at only certain predetermined prices to allow customers to find the type of product they need and encourage customers to ‘trade up’ to a more expensive model.

Question 16

What is loss leaders?

Answer 16

A product sold at or below cost price to attract consumers or sell of unwanted stock.

Question 17

What is price and quality interaction?

Answer 17

Products that are higher in quality are normally sold for higher prices and vice versa as higher-quality products usually require higher costs.

THIS RELATIONSHIP HELPS FORM THE PRODUCTS IMAGE

Question 18

What is promotion

Answer 18

the methods used by a business to inform, persuade and remind a target market about its products.

Question 19

What is the promotion mix and what are the elements of the promotion mix?

Answer 19

The promotional mix is the various promotion methods a business uses in its promotional campaign.

APPS R
ADVERTISING
PUBLICITY AND PUBLIC RELATIONS
PERSONAL SELLING
SALES PROMOTIONS
RELATIONSHIP MARKETING

Question 20

what is advertising?

Answer 20

A paid, non-personal message communicated to a mass audience through a mass medium. Designed to inform, persuade and remind.

Question 21

What is personal selling

Answer 21

Involves the activities of a sales consultant directed towards customers in attempt to make a sale (the human aspect of promotion).
o Require sales staff to familiarise customers with the product

Question 22

what is relationship marketing

Answer 22

The development of long-term and cost-effective with individual customers.
o Aims to create customer loyalty by meeting needs on an individual basis and creating reasons to keep customers coming back.
E.g. loyalty programs – Flybuys

Question 23

what are sales promotions

Answer 23

The use of activities and materials as direct inducements to customers (e.g. coupons, premiums/free gifts with purchase, free samples, limited time offers, contests and giveaways)

Question 24

What is publicity and Public relations?

Answer 24

PUBLICITY – Any free news coverage about a business or its products
PUBLIC RELATIONS – Activities aimed at creating and maintaining favourable relations between a business and its customers.

Question 25

The communication process

Answer 25

Marketing managers must be able to communicate clearly/efficiently to their target market. To avoid miscommunication and increase willingness to purchase a product, businesses can use reliable/respected channels such as opinion leaders (a person with the ability to influence others) and word of mouth (when people infleunce each other through conversations).

Question 26

What are distribution/marketing channels

Answer 26

DISTRIBUTION/MARKETING CHANNELS – The routes taken to get the product from the business to the customer. This process usually involves a number of intermediaries (E.g. wholesalers).

Question 27

What are the channel choices for distribution

Answer 27

1. Intensive distribution – A business saturates the market with a product (HIGH COVERAGE) 2. Selective distribution – Products are available at a limited number of outlets (MODERATE COVERAGE) 3. Exclusive coverage – Products are available using only one outlet in a specific geographic area (LOW COVERAGE)

Question 28

What are physical distribution issues

Answer 28

TRANSPORT – The mode of transportation a business uses will largely depend on the type of product and the degree of service the business wishes to provide. o The 4 most common methods of transportation are rail, road, sea, and air. WAREHOUSING – A set of activities involved in receiving, storing and dispatching goods. o Warehouse are the facilities used to store and move goods. INVENTORY – Marketers need to ensure they maintain the right balance of inventory to avoid losing sales and market share. o Businesses may implement an inventory control system that maintains quantities and varieties of products appropriate for the target market.

Question 29

what is the people element

Answer 29

The nature/quality of interaction between the customer and the those within the business delivering the service.

Question 30

What is the processes element

Answer 30

Refers to the set of activities the business will follow in its delivery of a service. - It is important that the processes are carried out efficiently - They should also be customer-friendly, meaning they’re simple and easy to follow

Question 31

What is the physical evidence element

Answer 31

Refers to everything a customer sees wen interacting with the business. - It should create a image of value and quality that inspires consumer confidence in the service experience. - It can assist a business with positioning an branding and attract its target market

Question 32

What is E-marketing?

Answer 32

The process of using the internet to perform marketing activities. It provides a faster, more efficient way of doing business and attracting customers.

Question 33

What is global branding?

Answer 33

The universal use of a name, symbol, or logo to identify a business or its products. o Provides a consistent image to all customers, which leads to global brand recognition that crosses language barriers (e.g. McDonald's)

Question 34

What are the 2 global marketing approaches

Answer 34

STANDARDISATION – Global businesses assume that a product is used in the same way and satisfies the same needs and wants internationally. (E.g. Apple) o Each element of the marketing mix is the same worldwide. CUSTOMISATION – Global businesses assume that there are differences between the way a product is used and the needs it satisfies between countries. (E.g. McDonalds)

Question 35

What is global pricing?

Answer 35

how businesses coordinate pricing policy across different countries.

Question 36

What are the global pricing strategies

Answer 36

CUSTOMISED PRICING Customers in different countries are charged different prices for the same product. - Many businesses use the cost-plus method to cover exporting costs overseas. MARKET-CUSTOMISED PRICING Prices are set according to the local market conditions – level of demand/competition. STANDARDISED PRICING Customers are charged the same priced for a product regardless of their location. - It will only be successful if overseas marketing costs remain low.

Question 37

What is competitive positioning

Answer 37

COMPETITIVE POSITIONING – how a business differentiates its products. o How a business will stand out and carve out a place in the competitive business environment.

Question 38

What is competitive positioning

Answer 38

COMPETITIVE POSITIONING – how a business differentiates its products. o How a business will stand out and carve out a place in the competitive business environment.