Flashcards in Topic 2- Marketing Deck (63):
What is the point of marketing?
- Generate profits
- Promoting their brand to the public
- Making awareness of their product
What is marketing?
A management process of identifying, anticipating and satisfying customers wants profitably.
Why do market research?
- get advice from public, eg. How much they’d pay
- satisfy customers (meet demand)
- make comparisons
- to get more awareness
What are the two different ways of doing market research?
Primary and secondary research
What is primary research?
Gathering information yourself by using surveys and questionnaires
What is secondary research?
Using existing information, eg. Online or from competitors
What is quantitative market research?
It’s numerical, the data collected is easy to analyse and put into a graph, eg. 90% of people prefer milk chocolate
What’s qualitative market research?
Non numerical research. It is about people’s OPINIONS, eg. I prefer dark and white chocolate in the same bar.
List 2 Advantages of primary research
- Up to date, so it is reliable
List 2 Disadvantages of primary research
- Takes time
- Hard to do, lack of expertise (may do it incorrectly)
List 2 Advantages of secondary research
- Very quick to access
- Free of charge
List 2 Disadvantages of secondary research
- May not be accurate (outdated)
- May not be specific to you
Why do businesses often do experiments before launching their product?
Because launching a new product is often costly they do experiments to check that they are likely to succeed.
What are the 4 p's of marketing?
What is product differentiation?
A marketing process that gives a business an advantage by making their product unique and stand out from other competitors.
List 4 methods to differentiate?
- Quality ( offer a higher quality to others)
- Price ( offer a cheaper price than competitors)
- Technology ( a phone with more advanced technology to other brands)
- Experience (yo sushi)
How does dyson differentiate?
Through innovation. This leads to a larger target market which will lead to higher sales figures. This allows them to explore into different markets (e.g. hairdryers) because of the incomes capital.
What is the plc?
The product life cycle
What are the 6 stages of the plc?
Research and development, Introduction, growth, maturity, decline, decontinued
On the plc what is the stage where it is starting to go down hill and what happens there?
Extension strategy, this is where it is trying to stay alive.
What is happening in the research and development phase of the plc?
No sales, negative profit, product is innovative and being designed
What is happening in the Introduction phase of the plc?
Low sales, high promotion, neutral profit, high price
What is happening in the Growth phase of the plc?
Sales increasing, thinking of innovation, medium promotion and price, positive profit
What is happening in the Maturity phase of the plc?
Peak sales, innovation, low promotion, high distribution, positive profit
What is happening in the Decline phase of the plc?
Low sales, limited promotion, low price, negative profit
List 4 ways of growing
- Explore new countries
- Explore new markets (lucozade, medicine to energy drinks)
Why are prices important to a start up?
- it is what they rely on
- impacts popularity
- way of competing
What is the boston matrix?
A way of categorising different brands into their status/how developed they are
What is market share?
the portion of a market controlled by a particular company or product
List 3 things that the boston matrix show
- Market share can be gained by investment in marketing
- Cash surpluses are generated when the product is in the maturity stage of the life cycle
- The best way to build a dominant market position is during the growth phase
What are the 4 categories of the boston matrix?
Cash cows, stars, dogs and question marks
What are stars? (BM)
Star products have a high market share in a fast growing market. eg. new iPhone
What are cash cows? (BM)
Cash Cows have a high market share in a slow growing market. These are successful products with little need for investment. e.g. walkers crisps
What are question marks? (BM)
Question marks or problem children products have a low market share in fast growing markets. This suggests they have some potential but may need some investment. e.g. airpots, apple watch
What are dogs? (BM)
Dogs are products with a low market share in slow growing markets. They have enough money to break-even but very rarely worth investing in. They are normally sold or closed. e.g. iPods
What does a business ideally want on the BM?
Have a balanced portfolio with very little dogs.
What is competitive pricing?
when a firm decides its own price based on the price charged by rivals eg. tesco
What is cost plus pricing?
when a business chooses a price that ensures a profit. One drawback is that it may bot be very competitive.
What is loss leader pricing?
When businesses are willing to set prices below unit cost. They do this to gain sales and market share. e.g. costco
What is penetration pricing?
Setting a relatively low price when first launched to boost sales. e.g. walmart
What is price skimming pricing?
Setting a relatively high price taboos profits. This is often used by well-known businesses. eg. new technology
What is psychological pricing?
selecting a price to which consumers will have an emotional reaction e.g. a car priced at $15,995 instead of $16,000
What is destroyer pricing?
An illegal practise where firms lower their prices to such a damaging level that they run at a loss. They do this to put their competitors out of the market eg. putlocker
What is prestige pricing?
When firms set prices of luxury products to the expectations of a niche class of customers who associate higher prices with superior quality e.g. Chanel
Who is suffering from destroyer pricing?
Small corner shops are suffering due to destroyer pricing. Places like pound land are putting prices much lower so the corner shops lose customers.
What is discrimination pricing?
When companies charge customers different prices for the same product or service, e.g. airplane fares for different ages
List at least 4 promotional methods
- Bus stops
- TV adverts
- celebrity endorsement
What are 4 promotional methods small businesses would use?
Leaflets, local newspapers, sampling
What are 4 promotional methods big businesses would use?
Underground, billboards, celebrity endorsement
List 4 factors that help determine the promotional method selected
- Target audience
- Attract new or existing customers?
- 'footfall' (how many people will see it)
What is branding?
How the business and product is distinguished from competitors
How can you 'build your brand'?
- having a distinguishable colour (cadbury)
- create an identity that is superior to others
- Celebrity endorsement
List 4 benefits of branding
- Customer recognition
- Add value to your product
What are the advantages of segmenting your market?
It allows them to focus on a particular target audience meaning they will gain interest from that market from personalising it to them. This will secure certain customers and result in a higher amount of sales. You will also become a recognised specialist.
What is the channel of distribution?
The route by which a product goes from the manufacturer or device provider to the customer.
What are the 4 possible channels of distribution?
1) producer to wholesaler to retailer to customer
2) producer to retailer to customer
3) producer to customer
4) producer to e-commerce (online)
What is a wholesaler?
Where they buy products straight from the producer in bulk
What is a retailer?
Any store selling directly to the customer
What is m-commerce?
Buying on the go on your mobile
How can a business segment their product?
List 4 factors that affect price
- Production price
- Target audience
2 Advantages of the plc
- See at what stage you’re at
- Make sure you’ve got products in every stage