Strategic Choice - General Questions Flashcards
DEFINE MARKET SEGMENTATION
The division of the market into homogeneous groups of potential customers who may be treated similarly for marketing purposes.
WHAT IS FIELD RESEARCH?
WHAT IS THE FOCUS OF IT, TECHNIQUES USED AND WHAT ARE THE PROS/ CONS OF IT?
FOUCUS
(i) Opinion research - determine people’s opinions
(ii) Motivation research - determines why people do what they do
(iii) Measurement research - quantifies factors
TECHNIQUES
- questionnaires
- internet surveys
- interviews
- observation
- test marketing
- experimentation
- trial testing
PROS/ CONS
- cost
- historic vs. future
- reliability of responses
- adaptability to new products
DEFINE UNDIFFERENTIATED MARKETING
a.k.a Mass marketing
Treats all customers and potential customers as identical, the whole market is a target for the firm, served with a single variety of products served in a single way (e.g Coca Cola)
DEFINE CONCENTRATED MARKET
Business specialises in targeting single segments of the market, and do not attempt to market in others (e.g. Career fair at a university)
DEFINE MICRO MARKETING
Manufacturing goods/ services to customer specification (e.g. Dell computers/ Build a Bear)
WHAT ARE THE 5 CATEGORIES OF CONSUMER SEGMENTATION?
BUSINESS TO CONSUMER (B2C)
GEOGRAPHIC
Markets split into regions for sales/ distribution
DEMOGRAPHIC
Customers defined in terms of age, sex, socio-economic class, country of region, family life cycle or family status.
PSYCHOLOGICAL
Consumers split into groups sharing common psychological characteristics (e.g. Security orientated, ego-centred or consideration of life cycle position)
PURCHASING CHARACTERISTICS
Customers segmented by the volume they buy.
BENEFIT
Customers may have different expectations of a product (e.g. Consumers who seek whiteness from their laundry detergent may opt for Daz whilst consumers who seek stain removal may buy Ariel).
WHAT ARE THE 6 CATEGORIES OF INDUSTRIAL SEGMENTATION?
BUSINESS TO BUSINESS (B2B)
GEOGRAPHIC
The basis for sales-force organisation.
PURCHASING CHARACTERISTICS
Classification of customer companies by their average order size.
BENEFIT
Different benefit expectations from customers.
COMPANY TYPE
Type of business.
COMPANY SIZE
INTERNET
Are people willing to but online, this could give the industry a new segment.
WHAT ARE THE ELEMENTS OF PROMOTION (AIDA)
Awareness
Interest
Desire
Action
WHAT IS PUSH PROMOTION?
Ensuring the the products or services are available for purchase where and when the ultimate customer requires them.
E.g available at a supermarket.
WHAT IS PULL PROMOTION?
Marketing variable set to persuade ultimate customers to purchase.
E.g advert on TV, trade journal, BOGOF
WHAT ARE THE 4 MAIN FORMS OF PROMOTION?
1) ADVERTISING - decide the types of media, published or visual
2) SALES PROMOTION - point of sale promotion, e.g money off coupons, free trail pack, buying shelf space in a shop
3) PUBLIC RELATIONS - PR departments, press releases, sponsoring local events
4) PERSONAL SELLING - v. important in industrial selling as well as consumer marketing, e.g sales reps, call centre staff, after sales care
WHAT ARE THE 3 COST BASED METHODS OF PRICING?
1) full cost plus = long term total absorption cost of making a unit plus a mark up
2) target return base = price based on amount required to generate a % return on the assets invested in the project
3) marginal cost plus = contribution mark up on variable/ relevant costs
WHAT ARE THE ADVANTAGES OF COST-BASED MEASURES FOR PRICING?
- allows pricing decision to be delegates/ calculated
easily - price stability of costs kept under control
- communicate how’s much margin is lost of goods are
discounted
WHAT ARE THE DISADVANTAGES OF COST-BASED MEASURES FOR PRICING?
- may ignore what customers are willing to pay
- ignores effect of prices on volume
- may ignore what competitors are charging
- difficulty in assessing cost/ unit
HOW DO YOU CALCULATE THE PRICE ELASTICITY OF DEMAND?
% change in quantity demanded
PED = _________________________
% change in sales price
If PED > 1 then demand is price elastic
i.e price rises should lead to revenue increases for inelastic products and price reductions should lead to revenue increases for price elastic products.
GIVE EXAMPLES OF CUSTOMER FOCUSED PRICING METHODS
PRICE ELASTICITY OF DEMAND
PRICE DISCRIMINATION
Different prices charged for same product to different customer groups
PERCEIVED QUALITY
Price reflects value placed by customer
GOING RATE
Match competition to meet market conditions
PRICE SKIMMING
High prices initially to skim off customers willing to get product sooner
PENETRATION
Low price initially to increase market share
WHAT IS THE ENTREPRENEURIAL STRUCTURE?
Structure is built around the owner manager.
It is totally centralised with all key decisions being made by the strategic leader.
Manager
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Subordinates
WHAT ARE THE ADVANTAGES OF THE ENTREPRENEURIAL STRUCTURE?
- fast decision making
- more responsive to markets
- good control
- close bond to workforce
WHAT ARE THE DISADVANTAGES OF THE ENTREPRENEURIAL STRUCTURE?
- lack of career structure
- may be too centralised
- cannot cope with diversification/ growth
WHAT IS THE FUNCTIONAL STRUCTURE?
Common in companies which have outgrown the entrepreneurial structure, organises the business on a functional basis.
Most appropriate to smaller companies with fewer products.
Director
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Marketing Production Finance
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Production manager
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| | | Machine Finishing Polishing supervisor supervisor supervisor
