Theme 4 - Marketing Flashcards
(110 cards)
1
Q
What is market research? What are the 2 types of market research?
A
Market research is when customers give feedback to businesses which can be then incorporated into their products and services. Market research can either be either primary or secondary.
2
Q
What is primary research? what type of businesses would do this?
A
Primary research is the process of gathering information directly from consumers in the target market. This information is new and is conducted to match the business’ aims. This type of research is usually collected by larger businesses that have the means to do so.
3
Q
What are some examples of primary research methods?
A
Examples include:
- questionnaires
- interviews
- observations
- test marketing
- focus groups
4
Q
what is a questionnaire?
A
A set of written questions with a choice of answers devised for the purposes of a survey or statistical study
5
Q
what is an observation?
A
An observation involves hiring someone to stand in an appropriate location and study consumer behaviour in a store or to perhaps judge the potential consumer traffic at a particular location
6
Q
what is a focus group?
A
Focus groups are discussions led by a marketing specialist with the aim of collecting detailed feedback on all aspects of the marketing mix (Price, Place, Promotion, Product) from the target market.
7
Q
what is test marketing?
A
Test Marketing is when free samples are provided for a limited period of time to the target market in order to gauge their response to the product
8
Q
what is the purpose of market research?
A
The purpose of market research is to understand the market fully, where a business would want to:
- identify and understand customer wants and needs
- to identify gaps in the market that they can fill
- to reduce risk
- to inform business decisions
9
Q
what is secondary market research?
A
Secondary market research is the practice of collecting and analysis of data that has already been conducted in a separate investigation. This data is usually collected by smaller businesses
10
Q
what are some examples of secondary research methods?
A
Examples include:
- the internet
- market reports
- government reports (census)
11
Q
how can the internet be used for secondary market research?
A
Businesses can use pre-published data and information about a business’ target market via the internet
12
Q
what is a market report?
A
A market report is detailed information about certain markets, where there is lots of information out there about other companies (so the business’ competitors)
13
Q
what is a government report?
A
A government report is any report that is given by the government, like a census report. These reports can include information about consumer behaviors, market trends, the economy and demographics
14
Q
what is a census report?
A
a census report is a report issued by the government that details the demographic of the target market e.g. their age, race or family size
15
Q
what are the advantages of primary market research?
A
- The data that is collected is focused on the needs of the business and will not be available to its rivals, thus giving that business an advantage
- Some primary research methods allow in-depth information to be gathered from the participants such as reasons for certain behaviour or choices - this allows that business to make more informed choices
- Primary market research is up-to-date, so will be more relevant to business decisions
16
Q
what are the disadvantages of primary market research?
A
- The sample size (no. of participants) may be too small and can be unrepresentative of target customers leading to unreliable results
- Participants tend to rush or be untruthful in their answers, which can lead to the business collecting inaccurate results - the business could make inappropriate decisions as a result
- A business may need to hire a specialist market research agency to help - making the process expensive and time-consuming, especially for small businesses
17
Q
what are the advantages of secondary market research?
A
- Information is already available and may be quicker to collect than primary research - making it less time consuming
- Information is often free, making it cheaper to collect, leading to lower costs compared to primary research
- This makes it more suitable for a small business that lacks a large marketing budget and/or expertise
18
Q
what are the disadvantages of secondary market research?
A
- The collected information was created for a different purpose or business, which could make the data irrelevant, hard to analyse and might not be factually correct
- The information may be out-of-date, especially in changing and growing markets
19
Q
What are the 2 types of data?
A
- Quantitative data
- Qualitative data
20
Q
what is quantitative data? Would it be classed as subjective or objective data?
A
Data that can be counted and is in the form of numbers, graphs and tallies and can be obtained through reports, questionnaires or tallies (secondary). This data is gathered so it can be analysed for the use of the business. This type of data is objective as there are a limited amount of ways the data can be interpreted.
21
Q
what are the disadvantages of quantitative data?
A
- Numerical data may be out-of-date, especially in dynamic markets
- Numerical data does not provide reasons for outcomes
22
Q
what is qualitative data? Would it be classed as subjective or objective data?
A
Gathering written beliefs, values and opinions in the form of words, descriptions and pictures and can be obtained through interviews, observations and small focus groups. This data is subjective - it can be hard to draw a conclusion from the data and can be interpreted in many different ways
23
Q
what are the disadvantages of qualitative data?
A
- Bias may mean that analysts can interpret responses in a particular way
- Qualitative data is difficult to present in graphs and charts so may not be easily understood
24
Q
why is it important for the data obtained by a business during market research to be reliable?
A
It is important for a business to build up a reliable understanding of the market because the data that is collected will be used to influence business decisions.
If the data is unreliable, it can lead to the business making inappropriate decisions, leading to the risk of failure or lack of sales.
25
what is product orientation?
Product orientation is when a business focusses on the quality of its products rather than adapting to its market, where these businesses believe that their products will generate sales regardless of the changing market.
26
what are some advantages of product orientation?
- businesses that focus on product orientation tend to focus on selling high quality products and services - this will lead to higher customer satisfaction
- these products are more likely to be more innovative - leading to better brand awareness
- product-orientative businesses conduct extensive product research, which will reduce the risk of the product not selling
27
what are some disadvantages of product orientation?
- businesses that focus soley on the product tend to move further away from the market's wants and needs, thus increasing the risk of business failure
- these businesses don't tend to adapt to the changing needs of the market, which will lead consumers to shop at rival businesses
28
what is market orientation? What would be the result of market orientation?
Market orientation focuses on the needs of consumers and uses this information to design products that the target market would wish to consume. The result of market orientation is that the firm will benefit from increased demand, increased profits, and a valued brand image as its products become more desirable
29
what are some advantages of market orientation?
- producing products according to the market's needs leads to the increase of customer satisfaction and loyalty
- less likely for failure because the business would need to conduct lots of market research - so they would understand the market better
30
what are some disadvantages of market orientation?
- An excessive focus on addressing the needs and desires of consumers reduces the amount of innovation in the production of the products
- focussing on the needs of the market can be unsustainable and unrealistic, especially in a constantly changing market (e.g. fast fashion brands)
31
what is market size?
The market size is how big a company is
32
what is market growth?
Market growth is the rate in which the overall size, value or volume of a market increases over a period of time, expressed as a percentage
33
what is market share?
Market share is the percentage of sales one company has in proportion of the market, which shows the business' dominance is the market
34
How can market size be calculated?
Market size can be calculated by finding out the total **volume** or **value** of an entire market (all businesses in that market combined)
35
define volume in a business
Volume is the amount of products or **units** sold in that market
36
define value in a business
Value is the number of sales in the market that it generates
37
how is market share calculated?
total sales of **a business**
____________________________ X 100
total sales in **market**
38
what is the aim of marketing?
The aim of marketing is to help identify, anticipate and satisfy consumer needs and wants so that a business can gain a profit
39
explain identifying & understanding customer needs as a reason for marketing?
Marketing helps a business identify and understand the needs and wants of its customers, where they can identify the variety, quality, convenience and prices that customers are willing to pay
40
why is it good for businesses to identify and understand customer needs?
Businesses that successfully identify and then satisfy customer needs tend to:
- compete more effectively than rival businesses
- keep up to date with changing trends + preferences
- attract positive word-of-mouth recommendations and build the brand
- increase customer satisfaction and loyalty as these businesses are able to offer products and services that are appealing to the market
41
explain keeping customer loyalty as a reason for marketing? What does this lead to?
Customer loyalty is when existing customers buy products from the same business over and over again.
Customer loyalty leads to repeat purchases and a rise in market share.
42
explain building customer relationships as a reason for marketing. How do businesses do this?
Building customer relationships involves communicating with customers to encourage them to become loyal to the business and its products. Businesses do this by:
- Developing close ties with customers and finding out if products/services are continuing to meet their needs
- Using technology to gather important information about customers
43
why would businesses want to keep customer loyalty?
It is much cheaper for a business to try to keep existing customers (for example, with loyalty cards) than trying to gain new customers, as this can involve expensive advertising campaigns
44
why would businesses want to keep customer relationships?
Having strong relationships with customers means a business can respond appropriately when expectations of what they want from a good or service change, allowing them to offer products and services that would be desired by the market
45
what are mass markets?
Mass markets are very large markets where **generic products are targeted to a majority of customers**. There is usually nothing massive that separates themselves from their competitors - can be easily replaced with another brand.
46
what are niche markets?
Niche markets are markets that targets a smaller group of customers with more specific needs. This allows for these markets to differentiate themselves from competitors.
47
what are some benefits of being in a niche market?
- Businesses with niche products or services work with less competition
- Establish awareness and customer satisfaction in that area since people would recognize you as being a business targeted on a specific product.
- Customers are more likely to be loyal because the market is so specific and small
48
what are some drawbacks of being in a niche market?
- High prices make products less affordable, meaning that less customers are likely to purchase your products
- Likely to attract competition if it is a successful market, which can lead to larger businesses copying smaller businesses and can move away these customers from their business
- It is risky as not everyone might want to purchase the business' products or services, higher likelihood of failure
49
what are some benefits of being in a mass market?
- The production of products is cheaper. It becomes less expensive since these brands buy raw materials in bulk
- Easily accessible
- Larger market since it can be essential products
50
what are some drawbacks of being in a mass market?
- It is less unique, so customers are less likely to be loyal since they can easily replace that business with another business
- There would be lots of competition because it is a larger market
- Decreased profit margins, the products are cheap to make and sell so they can't increase the price of the product by lots of money in order to make a profit.
51
certain products be segmented according to?
- Age - there are some products dedicated to children like sugary, colorful, toy filled products
- Health/lifestyle - some products are healthy and so can be marketed to a specific market
- Dietary requirements - some gluten free, nut free or vegan products can be catered
- Price range - affordable vs more expensive products
- Deals + amounts with family size - people with large families will order some products in bulk, while those who live alone would get a regular size
52
what is profit margin?
Profit margin is the percentage made on the sale of the product or service, relative to the cost of the production
53
what is market segmentation?
Market segmentation is when the **market is split up** into different groups of customers based on **smaller characteristics, features or needs** e.g. age, gender, income
54
what are the segmentation methods?
- location
- demographics
- lifestyle
- income
55
Why do businesses segment the market?
Businesses want to attract people with **specific needs so that those customers will then buy the products**. If the business is continuing to meet these customer's needs they are more likely to keep on buying and they become a loyal customer
56
explain location market segmentation
This is when businesses targets customers that work, live or shop in a certain location. For example, a business that is located near a school can offer a student discount.
This can also be how some businesses that operate in different areas in the world or country change their products to match that culture, making it seem more exclusive
57
explain demographic market segmentation
This is when businesses create effective marketing campaigns based on their customer or desired audience's characteristics such as age, gender, income or family size
58
explain lifestyle market segmentation
Businesses can separate the market by focusing on those who have special lifestyle choices diets, such as being vegan, Gluten Free, or the increase of health and fitness trends
59
Describe income market segmentation
Businesses who target customers based on their income and job occupation, people like lawyers, doctors, accountants earn more than those who are factory workers or in construction. Certain products will be advertised to people with certain amounts of money e.g. designer brands
60
what is the USP?
USP stands for Unique Selling Point. A USP of a product would be a quality that sets a product apart from its other competitors
61
what are the benefits of bringing out products that have a USP?
- more people would purchase the products because it is different, which is attractive and appealing to customers
- identifies gaps in the market, which means that they would have more leniency to charge higher prices
- leads to variety in the market - increases market share and the products can stand out from its competitors
- promotes innovation, which can promote a business' brand image
- higher customer retention/loyalty
62
What makes up the marketing mix? What does each factor mean?
- Product - refers to the products the business sells
- Price - the amount a business charges its customers for its product or service
- Place - where a customer is able to purchase a business' product or service so how easy it is to access
- Promotion - the methods used to advertise a product or service
63
What does the Product Life Cycle show?
The product life cycle shows the stages that a single product will go through from its production and introduction into the market to its decline. This is represented with a line through the graph that shows the sales that the product makes
64
What are the 5 stages of the product life cycle?
- Research & Development
- Introduction
- Growth
- Maturity ----> Extension strategies
- Decline
65
Describe the Research and Development stage
- In this stage, the primary focus is on designing and developing the product
- The business has to endure **high costs** for research such as market research and product testing, as well as the actual development of the product
- Due to the product not being released into the market yet, they will have **no sales**.
66
What can a business do with a product in the research & development stage?
Businesses at this time would aim to create awareness and create interest in the product
67
Describe the introduction stage
- This stage begins when the product is being launched into the market
- At this stage, there is usually a **slow sales growth**, as well as **high costs** to advertise the product as the product is still new and unknown to most consumers
- Businesses wouldn't be making much profit due to spending money on advertising, production and research
68
What can a business do with a product in the introduction stage?
Businesses at this time are focussed on **creating awareness and generating interest in the product**, which tends to be expensive, especially if many marketing techniques are used
69
Describe a product in the Growth stage
- The product enters this stage when sales begin to **increase rapidly**, but is not yet at its peak amount of sales
- The business would shift its focus to building its **market share** (dominance in the market) and to **increase production efficiency** to meet the growing demand
- In this stage a business would have to navigate lots of **competition**
70
What can a business do with a product in the growth stage?
Businesses would now start to differentiate the product by identifying its USP, as well as building customer loyalty
71
Describe a product in the Maturity stage
- Products at this stage would have high sales but the growth of the product's sales would be **slowing down**, where they have now reached a plateau
- However, the sales of a product in this stage would be at its peak.
- **Market saturation** is likely
72
What can a business do with a product in the maturity stage?
- A business with a product in this stage would use marketing techniques to maintain **market share** and increase **profitability** by finding new markets
- Additionally, in order to prevent this product to enter the decline stage, **extension strategies** can be used.
73
what does market saturation mean?
Market saturation is when most customers in the market who want to buy that product has already done so, thus being boring and less interesting for consumers
74
what does profitability mean?
Profitability is how sales can be converted into **profit**
75
describe a product in the decline stage
- A product in this stage begins when sales start to decline as the product becomes **obsolete (is no longer used and is out of date)** or is replaced by another products
- the business with a product in this stage would now focus on managing the product's decline and reduce costs
76
What can a business do with a product in the decline stage?
- The business would now discontinue the product, reducing costs to clear stock and to invest into another product
77
what are extension strategies?
This is when businesses change or adapt the same product by changing the **packaging** of a product without changing the product itself
78
why are extension strategies used?
- Extension strategies is what is used by a business to keep and prolong the product's life cycle, where businesses would hope that they find this new version of the same product interesting, thus boosting the sales of this product.
- this is done towards the end of the maturity stage to prevent the product's sales going into decline
79
What is the Boston Matrix?
The Boston Matrix is a tool used by businesses to analyse their **product portfolio** by classifying their products into 4 categories based on their **market share and the market growth rate**
80
what is a product portfolio?
A product portfolio is a collection of all the products that are offered by a business
e.g. for Apple, it would be ipads, iphones, airpods, apple pens
81
what are the 4 categories in the Boston Matrix?
- Stars
- Question marks
- Cash Cows
- Dogs
82
describe question mark products. (Boston Matrix)
- question mark products have a **low market share** in a **high-growth market**, where they are usually new products
- these products have the potential to be stars if the company invests into its development
- there is often a **negative cash flow** as these products are still being introduced into the market and the business is still investing into its development
83
What can a business do with a question mark product? (Boston Matrix)
They should invest into improving the quality of the product as well as its development. Also, businesses should invest into the marketing of that product to increase awareness of the product
84
what stage in the product life cycle would a question mark product be in? (Boston Matrix)
Usually new products will need lots of investments, thus having low market share as most consumers don't know about this product, so they are in the **introduction stage**
85
describe star products. (Boston Matrix)
- star products have a **high market share** in a **high-growth** market
- these products generate **lots of cash flow** and has the potential to grow the business
- they usually have lots of competition with other products, thus not being in the optimum stage
86
What can a business do with a star product? (Boston Matrix)
- A company with a product in this stage would typically invest in them to **maintain** or **increase** their market share.
- Marketing is heavily invested on in this stage, where the brand awareness and market share is built on to ensure that the product stays relevant
- This will also help to beat competition
87
what stage in the product life cycle would a star product be in? (Boston Matrix)
A star product would be in the growth stage, as the sales, market growth and market share of that specific product would be on the rise.
88
describe cash cow products. (Boston Matrix)
- cash cows are products with a **high market share** in a **low market growth rate**, so is in a mature market as it is no longer growing
- However, they are basically at their peak as this is the best category for a product to be in
- these products encounter less competition as they are dominant in a slow growing market
- examples include necessities like bread or milk products
89
What should a business do with a cash cow product? (Boston Matrix)
These products are seen as stable sources of income, so they should focus on maintaining their market share and popularity. They can also use product extensions, where they can change the packaging but keep the product the same, which increases interest in the product, preventing that product of getting into the decline stage
90
what stage in the product life cycle would a cash cow product be in? (Boston Matrix)
Due to these products being in a mature market, they would be in the maturity stage of the product life cycle, as well as these products reaching their peak sales without much competition
91
describe dog products (Boston Matrix)
- Dog products have a **low market share** in a **low growth market**.
- they generate very little revenue for the company, meaning that it has low growth potential
92
What should a business do with a dog product? (Boston Matrix)
Businesses often move away from these products to focus on more profitable products, where they tend to discontinue or remove the products off the market to reduce costs. These businesses don't really focus on any marketing techniques for these products
93
what stage in the product life cycle would a dog product be in? (Boston Matrix)
Dog products are in the decline stage as sales, market share and the growth of the market is all decreasing
94
Show the way that one product move from one category of the Boston Matrix to another?
question mark ---> star ---> cash cow ---> dogs
95
what are the benefits of using the Boston Matrix?
- Businesses can make effective decisions about the product based on its position on the Boston Matrix
- It is quick and easy to use
- Allows businesses to categorise products
96
what are the drawbacks of using the Boston Matrix?
- It is subjective so it can be interpreted and analysed in many different ways, making it difficult to make effective business decisions
- It doesn’t take into account other factors that measures success - the success of a product doesn’t just depend on market share or growth
97
explain what is referred to in the Marketing Mix as 'Place'
Place in the marketing mix refers to where customers purchase and how accessible a business is for customers. Place is also HOW the products gets from the business to the customers, so how it goes through the channels of distribution
98
what is a channel of distribution?
A distribution channel is the process of how products get transferred from the business to the final customer
99
Define retailers
A retailer is a business that sells products that they have received to customers, where they either obtained those goods from wholesalers or directly from the manufacture - depending on their connections.
100
Define wholesalers
Wholesaler are businesses that buys a product in bulk (high quantities), where they **break bulk** (splitting the product that is in bulk into smaller quantities) and then sell it to retailers as the smaller quantities are more accessible to most customers
101
what are the examples of some channels of distribution?
1) Business/manufacturer --> wholesalers --> retailers --> customer
2) Business/manufacturer --> retailer --> customer
3) Business/manufacturer --> customer
102
what is an intermediary in a channel of distribution?
Intermediaries are the middle men that help to transport goods effectively from the manufacturers to the customer. Examples of intermediaries in this process would be retailers or wholesalers.
103
Look at this example of a channel of distribution. Describe it and what type of business would use this channel of distribution. Identify who would be the intermediary in this.
**Business/manufacturer --> wholesalers --> retailers --> customer**
**TWO-CHANNEL NETWORK**
1. The manufacturers would sell the product to the wholesalers in **bulk**
2. the wholesalers would be able to break bulk and split up the products into smaller quantities to sell to retailers.
3. The retailer would then sell that product to customers.
- In this case, the intermediary would be the wholesaler.
- This channel of distribution would be for smaller businesses because they require a wholesaler in the middle of the process due to their lack of connections.
104
Look at this example of a channel of distribution. Describe it and what type of business would use this channel of distribution. Identify who would be the intermediary in this.
**Business/manufacturer --> retailer --> customer**
**ONE-CHANNEL NETWORK**
1. The manufacturer is able to sell a product in bulk to the retailer directly
2. The retailer would then be able to sell the products to the customer
- In this case, the intermediary would be the retailer as it is the stage in between the manufacturer and the customer.
- this channel of distribution doesn't require a wholesaler because this would be suited for larger retailers (e.g. Carrefour) already have enough connections and access to manufacturers
105
Look at this example of a channel of distribution. Describe it and what type of business would use this channel of distribution. Identify who would be the intermediary in this.
**Business/manufacturer --> customer**
**ZERO-CHANNEL NETWORK**
1. the manufacturer is able to sell its products directly to the customer
- This would be suited for customers who need to buy these products in bulk.
As a result, there is no intermediaries
106
what do retailers do? Why are retailers used?
Retailers add value by providing convenience and services such as delivery, packing and after-sales service. Retail businesses can be located almost anywhere.
By using retailers, it allows for a greater access of wider markets and also increases the accessibility of a given business' products and services
107
what is an e-tailer?
An e-tailer is the trader of goods and services over the internet like Amazon or Ebay
108
what are the benefits of being/purchasing products from an e- tailer?
- can lead to the expansion of the business' operations
- Allows businesses to grow because the market is much wider online
- 24/7 service - malls and shops tend to close early so this is very accessible and convenient at any time, increasing demand and sales
109
what are the drawbacks of being/purchasing products from an e- tailer?
- If your shopping online, you can’t see the product physically
- Consumers need access to WiFi and internet access - is a barrier to sales and customers purchasing products online
- There can be issues with delivery, where the size, quality or the day of delivery could be wrong, reducing customer satisfaction with the business
110
what is meant by multi-channel distribution?
This is a strategy where a business can offer more than one channel of distribution - it makes it more accessible to a wider market so this increases sales
