Strategies Flashcards
(35 cards)
1
Q
Market segmentation
A
- when total market is subdivided into groups of people who share one or more common characteristics + targeting a product specific to this market
- aim = increase sales, market share + profits by better understanding + responding to desires of customers
- allows (b) to focus efforts + resources on a section of the market - able to identify specific needs + tailor marketing plan accordingly –> reduce waste + costs
- fill ‘gaps’ or opportunities in market = long-term success
- once segmented, a (b) can select one or more segments to target - allows (b) to tailor its marketing strategies to suit characteristics of that market
- demographic e.g. adult/child, geographic, psychographic, behavioural e.g. experience (beginner)
2
Q
Product/service differentiation
A
- process of developing + promoting differences b/w (b)’s products or services + those of competitors
1. Customer service = personalised, tailored to needs + wants, high quality, efficient, courteous, pre + after sale
2. Environmental concerns = people more concerned with QOL issues + physical env., ‘green’ philosophy = increase sales + reputation e.g. biodegradable packaging, pollution = lose e.g. plastic
3. Convenience = ‘time poor’ e.g. meal prep (Marley Spoon), sliced apples
4. Social + ethical issues = more ethically minded = purchase products/brands that don’t exploit staff, env. + animals (ethical consumerism) e.g. cage free eggs
3
Q
Product/service positioning
A
- buyer perception
- technique: marketers try to create an image or identity for a product compared with image of competitors
- use wants + needs (market research) + tries to place product within buyers perceptions e.g. high quality
- achieved through name, price, packaging, styling, promotion, channels of distribution
- important in highly competitive markets (looks or feels superior to their competitors), augment to add value
e. g. Tiffany & Co. = trademarked colour, security guard, spacious, pricing
4
Q
Products - goods and/or services
A
- offer total product concept = both tangible + intangible benefits e.g. restaurant - tangible = food, intangible = CS
- Tangible = physical attribute e.g design, colours, features
- Intangible = prestige, image associated with products, enjoyment/fulfillment, after sales service (warranties)
5
Q
Products - goods and/or services
- Branding
A
- name, term, symbol or design that identifies a specific product + differentiates it from competitors - trademarking
- refers to reputation (b) or product has developed over time → quality, value, prestige - visual communication
Benefits: - helps consumers: identify product liked, reduces level of perceived risk of purchase, psychological reward from purchasing status goods
- helps (b): gain repeat sales = recognised brand, easier to introduce new products with success due to familiarity, encourage customer loyalty
Branding strategies: - Manufacturer’s brand or national brands = owned by the manufacturer, recognised globally e.g. Sunbeam
- Private or house brand = owned by a retailer or wholesaler e.g. Myer sells own label including Reserve
- Generic brands = no brand at all e.g. Black and Gold
6
Q
Products - goods and/or services
- Packaging
A
- involves development of a container + graphic design for a product
- well designed = positive impression of product + encourage first time customers
- form of communication = customers draw conclusions e.g. colour psychology = gain sustained comp adv.
- Benefits: protect + maintain quality of product (from damage), attract customer attention
- service = attitudes + product knowledge of salesperson + willingness to assist with customers concerns + inquiries
Labelling - presentation of info on a product or its packaging
- use labels to promote other products or to encourage proper use of products = increase customer satisfaction
- info can include: ingredients, country of origin, shelf life, winner’s awards, safety standard sticker e.g. AMAG = protects consumers from misleading/deceptive claims
7
Q
Price including price methods
A
- price refers to the amount of money consumer is willing to offer in exchange for a product
- reflect position + branding of (b) within marketplace
- methods provide ‘basic’ price whereas strategies ‘adjust basic price’ depending on objectives + conditions
8
Q
Price including price methods - cost based
A
- derived from cost of purchasing/producing a product + adding a markup e.g. Messina
- Two DISADV:
1. Difficulty accurately determining appropriate markup % - too high = no one buys, too low = lose profit
2. Product priced after production + failed to take into account other costs incurred in marketing mix
9
Q
Price including price methods - market-based
A
- method of setting prices according to interaction b/w levels of supply + demand - what market is willing to pay
- if demand = greater than supply = shortage in market (limited supply) - increased price (false scarcity e.g. Zara) e.g. housing, art, accomodation
- if supply = greater than demand a surplus will exist in market - decreased price e.g. fruit/veg
- price changes in relation to fluctuations
10
Q
Price including price methods - competition-based
A
- price covers costs of production + is comparable to its competitor’s price (when product is similar) e.g. coffee
- often used when high degree of comp. in market
- once base price is established, (b)’s can choose price based on:
1. Below competitors = undercut comp to establish themselves in market
2. Equal competitors = follows price established by price leader - saves money on market research on how much consumers would pay, avoids risk of price war
3. Above competitors = increases perception of quality of product, superiority e.g. Red Rock Deli chips
11
Q
- Pricing strategies - skimming
A
- occurs when (b) charges highest possible price for a product during intro stage of life cycle e.g. Apple
- objective = cover costs of ASAP before competitors enter market/doesn’t go well
- to increase sales = assist in recouping production costs (R+D) + ensuring quick turnover + profit maximisation
- pay for prestige/status it gives = appeals to status conscious + early adopters
12
Q
- Pricing strategies - penetration
A
- when (b) charges lowest possible price for a product
- aim = achieve large market share in short-term e.g. Rex
- objective = sell large no. duing early stage of life cycle to discourage comps from entering market
- DISADVS = more difficult to raise prices than lower them, may reduce cash flow + profitability e.g. Costco, Amazon
13
Q
- Pricing strategies - loss leaders
A
- product sold at or below cost price
- aim = attract customers to shop so that once in store they will buy extra products or spend more than what attracted them
- although (b) makes a loss on this product = hopes the extra customers will purchase other products
- can recover loss or low-priced times from sale of other items e.g ALDI, IKEA
- successful when overstocked but done incorrectly = lose money
14
Q
- Pricing strategies - price points
A
- selling products only at certain predetermined prices
- makes it easier for customer to find type of product they need or fits their budget
- makes it easier for (b) to encourage customers to ‘trade up’ to more expensive models
- most are inclined to avoid lowest price point e.g. Tiffany’s, cars, airlines
- price points for selected product lines e.g. jeweller offers line of watches at $55, $75 + $95 regardless of cost at wholesales
15
Q
- price + quality interaction
A
- perceive price-quality r/s helps determine image customers have for products (cheap = low, expensive = high quality
- price determines consumers perception of quality of product e.g. more expensive goods perceived higher quality
- prestige/premium pricing = pricing strategy where high price charged to give product an aura of quality + status e.g. jewellery, cars
- higher priced + infrequently bought items imply strong price-quality r/s
- however some believe high prices just reflect expensive packaging = reduced sales e.g. food
16
Q
Promotion
A
- methods used by a (b) to inform, persuade + remind a target market about its products
- attempts to:
→ Attract new customers by heightening awareness
→ Increase brand loyalty by reinforcing image of product
→ Encourage existing customers to purchase more
→ Provide info so customers can make informed decisions
17
Q
- elements of promotion mix - advertising
A
- form of paid, non-personal communication intended to persuade a (large) audience to purchase a product
- can reach extremely large audience or focus on a small, distinct target market
- increase sales, profits + market share
- able to reinforce positive attitude about (b)
- Different types include:
1. Mass - TV, radio, papers
2. Telemarketing - phone
3. E-marketing - internet
4. Social media - FB, Insta
5. Billboards - large signs placed at strategic locations
6. Direct marketing catalogues
18
Q
- elements of promotion mix - personal selling
A
- involves activities of a sales representative directed to a consumer in attempt to make a sale e.g. car salesman
- create loyalty by automatically meeting individual customer needs, establishing customer base to increase sales
- modify market message to meet individual needs = consumer-centric experience = create long-term r/s + repeat sales due to high-quality before + after sales service
- expensive method
19
Q
- elements of promotion mix - r/s marketing
A
- development of long-term, cost-effective + strong r/s’s with individual customers
- creates high levels of customer satisfaction, value + service = customers return
- more likely to refer (b) to family + friends, due to being offered special packages + discounts
- introduce loyalty program = encourage feedback, experience + innovation to gain sustainable comp. adv.
- loyalty cards = identify consumer patterns = individualised discounts + promo offers
→ emphasises loyalty by offering repeat rewards, identifying trends to maintain customer retention, increase sales + achieve profit maximisation
20
Q
- elements of promotion mix - sales promotion
A
- use of activities or materials as direct inducements to customers
- provide short-term incentives that motivate customers to purchase products - increase immediate customer purchases
- aims to entice new customers, encourage trial purchases, increase sales by existing customers = profit maximisation
- examples: samples, coupons, premiums, refunds, discounts
21
Q
- elements of promotion mix - publicity + PR
A
- Publicity
- any free news story about a (b)’s product
- differs to advertising as free + timing not controlled
- enhance image of g/s while raising awareness + broadening customer reach
- able to highlight favourable features = assists in reducing any negative connotations surrounding the (b)
- however can be bad
Public Relations - activities aimed at creating + maintaining favourable relations b/w (b) + its customers
- exposes a (b) or idea to an audience by using unpaid third parties as outlets
- enables (b) to work with media = cost-effective strategy that attracts interest e.g. speeches on special occasions, donations
- Benefits of PR:
→ Promote a positive image - reinforces favourable attitude towards (b)
→ Effective communication of messages
→ Issues monitoring - early warning of public trends = protecting sales
→ Crisis management - protect (b)’s reputation due to negative rumours/publicity - left unchecked = loss of sales
22
Q
- the communication process - opinion leaders, word of mouth
A
- must communicate clearly, efficiently + succinctly - if distorted message = distorted
- noise = any interference that affects promo communication process e.g. faulty printing, jargon
- more willing to purchase products if communication comes via:
→ Opinion leaders = people who influence others e.g. actors, athletes etc; used as info outlets for new products e.g. Chris Brown + dog food
→ Word of mouth = when people influence others during conversation; receiver places trust in someone they know as opposed to (b) advertising; increasingly using social media this e.g. FB
23
Q
Place/distribution
- Distribution channels
A
- activities that make products available to customers when + where they want to purchase them
Distribution channels - routes taken to get product from factory to market
- traditional distribution:
→ Producer to consumer - involves no. intermediaries, g/s produced + passed directly to consumer, used by most services e.g. doctor
→ Producer to retailer to consumer - often used for bulky perishable items e.g. furniture or fruit
→ Producer to wholesaler to retailer to consumer - wholesaler = intermediary who buys bulk from producer + then sells in smaller quantities to retailers = most common - Innovative distribution
→ Telemarketing (M-commerce) - marketing of g/s by calls, apps, devices
→ Internet marketing (E-commerce) - buying + selling online; now moving away from calls to internet for product communication e.g. Amazon
24
Q
- Channel choice - intensive, selective, exclusive
A
- refers to no. of outlets firm chooses for its products
- Intensive = wish to saturate market, g/s readily available in various/wide no. of stores + locations e.g. milk, choc
- Selective = using only a moderate proportion of all possible outlets, customer prepared to travel to specific retail outlets e.g. furniture
→ why: doesn’t have resources to produce large quantities more intensively, maintain higher quality + exclusivity than intensive, more customers/sales than exclusive = higher profits - Exclusive = uses only one retail outlets for a product in a large geographic area, commonly used for exclusive + expensive products
25
- physical distribution issues - transport, warehousing, inventory
- efficient movement of products from producer to consumer
Transport
- using a network to deliver goods to customers e.g. rail, air, road, sea
- depends on type of product e.g. perishable or frozen, speed required + distance that needs to be covered
- tech + developments in packaging + transport = reduced transit times
- insurance required = extra costs
Warehousing
- activities involved with receiving, storing + dispatching goods
- acts as a central organising point for efficient delivery
- convenient locations = adequately service pop.
- how many + what size needs to be decided so customers get orders ASAP, - more warehouses = higher cost
Inventory
- system that maintains quantities + varieties of products
- too much stock = high storage costs + waste, too little stock = loss of sales or 'stock out costs'
- ensures products available when needed + not lost = minimises lost sales + waste
26
People
- refers to quality of interaction b/w customer + those who will deliver service
- important (b)’s recruit + select right workers + train them appropriately on how to perform service + leave good impression
→ consumers base perception + make judgements about a (b) based on employees + treatment
- requires detailed product knowledge, attending to cost concerns, professionalism in order to deliver high quality CS = customer satisfaction
- (b) should develop + put into practice a consumer-centric organisational culture
27
Processes
- refers to flow of activities that a (b) will follow in the delivery of its service e.g. RTA
- must ensure processes + procedures = customer friendly + satisfy needs
- insufficient/inefficient processes = lose customers + damage reputation
- consumer’s total experience of buying a product (from searching for info experiencing benefits of purchase)
- without tangible product, processes must be highly efficient to achieve customer satisfaction e.g. RTA
28
Physical evidence
- refers to envt in which service will be delivered
- includes location of where service is being provided + materials needed to carry out service such as signage, brochures, (b) cards
- customers make judgements based on PE
- (B)’s who provide high-quality PE create an image of value + excellence
29
E-marketing
- use of internet to perform marketing activities
- internet allows (b) to interact with customers in a more efficient + cost-effective manner while still delivering a personalised service
- assists (b) in gaining brand awareness + sales growth
- fastest growing sales medium in Aus
- enables (b)’s to expand market + reach at a global scale - increasing market share + allowing 24/7 operation
- consumers = time poor therefore likely to research so they don’t waste time + money
E-marketing Tech:
→ Web pages (location, trading hrs) = accessible, cheap, easy to operate
→ Podcasts = informative
→ SMS (mass communication, instant e.g. Dominos)
→ Blogs - build a r/s with audience, online services
Social media advertising:
- form of online advertising using social media platforms to deliver target commercial messages to potential customers e.g. FB, YT
-ADV: cost-effecitve, increase brand exposure, easy to use, attract new customers, encourage existing customer to purchase more = increase sales + market share
- DISADV: don't have control over what consumers say - potential to criticise or ridicule product freely
30
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Global marketing
(how globalisation has affected marketing management)
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- must be modified + adapted to suit overseas markets
- each foreign market = different envt + target market
Globalisation
- Many TNCs adopt a global marketing approach = involves developing marketing strategies as if entire globe were one large market = standardised approach
- some (b)’s believe marketing mix should be customised to take into account differences in culture, religion + taste
- degree of uncertainty + risk in developing global marketing strategies
- before entering global markets, (b)’s should know:
→ Info to make specific marketing decisions such as price to charge, type of packaging necessary etc.
→ Info about country’s economic, political, social + cultural features
31
- global branding
- worldwide use of a name, term, symbol or logo to identify seller’s products
- equates to global recognition, irrespective of language barrier (symbols)
- (b) must account for brand's capabilities, strategies of competing brands + oulooks of consumers in the comp global market
- Why use:
→ creates worldwide uniformity
→ allows (b) to take advantage of efficiencies such as EOS = lower cost
→ Cost-effective as ad can be used in a no. of locations
→ Successful brand name = linked to new products being introduced into market
32
- standardisation
- assumes way product is used + needs it satisfies are the same all over the world
- globalisation = standardisation in developments in international trade + removal of trade barriers
- ‘one marketing plan fits all’ approach allowed (b)'s to adopt identical marketing mixes in domestic + global markets
- Benefits include:
→ consistent global image + product features
→ cost savings as worldwide = doesn't need to be customised for needs of individual markets
→ Decreased R+D costs
→ achieve EOS = reduced costs while delivering high quality products
E.g. electrical equipment, mobile phones, soft drinks
33
- customisation
- assumes way product is used + needs it satisfies are different b/w countries
- (b)'s customise marketing plan to economic, political + socio-cultural characteristics of target country
- tailor products to needs of individual or a group = increased customer retention while achieving profit maximisation
- modifications made to products so marketing mix suits various global markets
E.g. McDonald’s India = no beef products due to Hindu pop.
34
- global pricing
- how (b)’s coordinate their pricing policy across different countries
- as price = only area of marketing mix that generates revenue it's important to select an appropriate strategy
- 3 strategies:
1. Customised Pricing:
→ consumers in different countries are charged different prices for same product
→ many use cost-based method to price their goods in order to added costs of transportation (exporting, tariff, warehousing)
2. Standard Worldwide Pricing:
→ charge customers same price for a product anywhere in the world
→ succeed only if foreign marketing costs remain low enough not to affect overall costs
→ 2 major risks: a domestic (b) may undercut standardised price, fluctuations in exchange rate may negatively impact the imported/exported price
3. Market-Customised Pricing:
→ sets prices according to local market conditions (supply + demand)
→ allows more flexibility as can vary price according to level of demand
→ Fluctuations in exchange rate can change prices charged across countries = major risk for global (b)’s
35
- competitive positioning
- relates to how a (b) will differentiate its product - how it enters a new marketplace
- ensure high quality in comparison to competitors = garner larger market share, broaden customer reach + gain sustainable comp. adv.
- without successful strategy = additional time, money + effort
- to successfully differentiate = conduct R+D + implement leading-edge tech, strive to develop product leadership, positive customer r/s's + operational excellence
- usually based on price → will determine consumers perception of the product
- (b) must gain deep understanding of dynamic envts in which they operate + form strategies according to evolving conditions
