Topic 2- Marketing Flashcards Preview

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Flashcards in Topic 2- Marketing Deck (80):
1

Marketing

Concerned with the needs of customers and then meeting those needs profitably

2

What are the 4 Ps? (the marketing mix)

Price
Product
Promotion
Place

3

What are the 3 ways of marketing?

1) identify and understand
2) informing customers
3) increasing sales

4

Market research

About how businesses collect information on whether or not their products or services will be bought

5

Primary market research

Any type of research that is new information being collected for the first time (eg questionnaires, interviews, focus groups and trials)

6

Questionnaire

A series of questions asked to people to find out information about a certain topic. It can be done online, on the phone or face-to-face

7

Advantages of questionnaires

Can get helpful information
Different opinion
Can be asked in many ways
Straight forward to create
Gain customers
Target particular people

8

Negatives of questionnaires

Waste of people’s time
People reject them
False information
Expensive
Some may not understand the questions

9

Closed question

A question asked in a questionnaire which is multiple choice and gives a specific answer which is easily analysed

10

Open question

The person has their own answer, usually more detailed

11

Interview

Longer and more detailed way of gaining information

12

Advantages of interviews

Customers or businesses are personally asked questions
Questions can be explained
Gain detailed responses

13

Disadvantages of interviews

Expensive to do
Long time to complete

14

Focus group

A group of consumers who are selected to represent the target market brought together to discuss their feelings on a product/market

15

Advantages of focus groups

Because focus groups are chosen to represent the target market for a business, the data from them is usually very accurate
The ability to ask further questions (compared to questionnaires) means that more in depth responses are gained

16

Disadvantages of focus groups

Focus groups are usually small is size which limits the quantity of responses
The selection of people to take part is time consuming and so costly

17

Trials

In a trial, a product or service is sold for a short amount of time as a test to see whether or not consumes like the product

18

Advantages of trials

A business may save money in the long term if they realise that customers don’t want what’s being offered
It should help the business find out if they like it/want to buy it
Find out how to improve the product

19

Disadvantages of trials

Costly to set up
The area chosen may not fully reflect the target market

20

Secondary research

(sometimes called desk research) It is research that another organisation has already completed. (eg websites, internal data, census data, newspapers and magazines)

21

Websites

Most companies now put information about themselves and their products on the internet, all of which can be used by other competitor businesses as secondary data

22

Advantages of websites

Lots of information about the product and business
Easy to access
Easy to analyse
Accessed by many people (huge target market)

23

Disadvantages of websites

If internet is down the website is inaccessible
Won’t include bad points (dishonest information) as it’s made by the business
Could help other business to improve

24

Census data

Data collected by the government very 10 years, questioning the entire population on their occupation etc. The last census was in April 2011, the next will be in 2021

25

Internal data

Refers to past sales figures, profits and comments from customers. This can be used for future decision making

26

Newspapers and magazines

Information can be identified from reading newspapers and magazines. For example, ideas to develop new products and the products/services that competitors are offering

27

Market segmentation

Splitting the market for a product into different parts or segments

28

How can a market be segmented?

Age, gender, income, occupation, location, lifestyle (eg hobbies and interests)

29

What are the problems with marketing a product at everyone?

Different needs
More competition
Expensive
Time consuming
Harder to advertise

30

Why should businesses segment their market?

(All over more effective)
Less competition
Narrow down target market
Focus money on specific needs
More cost effective
Allows a greater understanding of the market

31

How does segmenting the market help to save money?

Easier ways to advertise
Can improve products for the needs of the customers
Concentrate in certain areas
Don’t spend money on other products
Greater knowledge of market
Less competition

32

Cost-plus pricing (pricing method)

Adds a percentage to the cost of making s product to give the selling price

33

Competitor pricing (pricing method)

When a price is set based on prices charged by a competitor businesses for a similar or identical product

34

Promotional pricing (pricing method)

Reduction in price to attract customers to an existing product or to sell of old products (may include ‘BOGOF’ and ‘3 for 2’)

35

Price skimming (pricing method)

Where a product is more advanced than that of competitors and therefore a price is set high because customers are willing to pay higher prices to own the latest technology (eg apple can sell their latest products at such high prices because people want to be up to date, have the latest things and one up other people)

36

Promotion

Concerned with how a business informs its customers about a product or service and then persuade them to buy

37

Main aims of promotion

To inform customers about a product
To keep a business ahead of competitors
To create or change the image of a business
To maintain or increase sales

38

7 promotional methods:

Free samples
Penetration pricing / promotional pricing
Social media posts
Adverts in newspapers / magazines
TV adverts
Billboards
Signage in shops

39

Why is TV advertising suitable for larger businesses?

Expensive
Helps to reach a large audience

40

What makes social media a good method of promotion?

Allows the business to collect market research (eg numbers and competitors)
Cheap to operate (not free as there will be some costs eg staff)
More likely to take notice as they have shown an interest by deliberately following the account
Detailed info as it’s set up by the business itself
Vast numbers of people use social media

41

Why do most businesses have their own websites?

Videos can be used to impress the potential buyers
Easy to access
Contains lots of info directly from the business
Allows the customer to order the product/service
Setting up and maintaining a website can be expensive :(
Businesses should consider whether their target audience will make use of the website before deciding whether to use it as advertising media

42

What makes printed media a good method of promotion?

Local newspapers are ideal for low-cost advertising reaching target audience in local area
National newspaper advertising is expensive
Useful to businesses that are of interest to people across the country
Magazines are an ideal way to target a business’s market
Leaflets are cost effective and can be targeted at the correct market

43

What makes radio a better promotion method than TV?

Cheaper
Portable- reach customers anywhere, anytime
Repeated a lot
Tunes help people remember
Can’t avoid them (bad if annoying)
Concentrate more
Informative
Product cannot be seen :(
Have to time it right for it to be effective (rush hours)
Can’t pause or rewind :(

44

4 types of point of sale promotion

Price reductions
Competitions
Free samples
Loss leaders

45

Loss leader

A product priced below cost-price in order to attract consumers into a shop or online store. It encourages customers to make further purchases of profitable goods while they’re in the store

46

Price reductions (benefit to business)

Customers want to pay for cheap prices

47

Competitions (benefit to business)

Customers want the deals/prizes

48

Free samples (benefit to business)

Customers can try the samples to see if they like them, leading to potentially buying the full size or telling the business how to improve it

49

Loss leaders (benefit to business)

Customers won’t buy just 1 product so the business will make more sales

50

Product

A business will have to consider a range of factors in relation to the product that it offers customers. Some of these are design, image and branding

51

Product life cycle

An important concept in marketing. It describes the stages a product goes through from when it was first thought of until it is removed from the market

52

Introduction (product life cycle)

Researching, developing and then launching the product. Low sales so mass marketing (advertising, making people aware)

53

Growth (product life cycle)

When sales are increasing at their fastest rate. Still extensive marketing

54

Maturity (product life cycle)

Sales are near their highest, but the rate of growth is slowing down, eg new competitors in market or saturated

55

Decline (product life cycle)

Final stage of the cycle, when sales begin to fall. The business might lower prices

56

Invention

The introduction of a new idea

57

Innovation

The improvement of an original idea

58

Research and development

Used to help introduce new and improved products

59

Extension strategies

Extend the life of the product before it goes into decline

60

How can a business extend the life cycle of its product?

Adding new features
Advertising more widely
Reducing the price
Changing the packaging
Target new markets

61

E-commerce

The bringing together of buying and selling electronically (online shopping)

62

Place

Refers to where the product is sold AND how the business gets the product to the consumer. This is known as the distribution channel

63

Physical distribution

This refers to movements of goods that we can see

64

Physical distribution channel 1

Producer —> consumer

65

Physical distribution channel 2

Producer —> retailer —> consumer

66

Physical distribution channel 3

Producer —> wholesaler —> retailer —> consumer

67

Example of physical distribution channel 1

Lower Cloptom farm shop

68

Example of physical distribution channel 2

Sony

69

Example of physical distribution channel 3

Tesco’s

70

How do wholesalers help small shops?

It means they don’t need to store large quantities of goods

71

Regional distribution centres (RDCs)

Owned by the retailer and are used to store products they will later sell in their stores

72

Why do retailers invest in RDCs?

Reduces costs
More efficient
Suits the business well
Greater control
Can be located near motor ways so products can reach shops quickly
Products can be bought in bulk and distributed once best performing sites have been identified
Means shops don’t have to increase storage space which would decrease selling space

73

Digital distribution

Refers to the distribution of goods digitally by downloading from a website (eg music and films)

74

Specific advantages of digital distribution to the customer

Can buy 24 hours a day
Goods are downloaded so available quickly
No delivery cost involved
Less risk of product getting damaged
Don’t have to leave homes

75

Specific advantages of digital distribution to the producer

Don’t have to spend money on making products
Larger target audience - possibly larger sales

76

Overall advantages of digital distribution

Can sell worldwide, more potential customers
Improve its image with skilful use of websites
Can promote products easier, increase sales
Can sell to new markets, increase profits
Open all hours throughout year
Less staff, cut costs

77

Overall disadvantages of digital distribution

Not suitable for all products
Not everyone has access to internet
Made it easier to illegally download content for free
Costly to set up
More competition
May need to recruit or retain workers, increased costs
Can be easily copied and illegally shared for free
Build and maintain website, increased costs

78

Market data

Info that will help a business make marketing decisions

79

If sales drop, how can the business respond?

Price may be too high - price could be permanently lowered or introduce special offer
Product may be entering decline stage or competitor product may be superior - bundle packages with latest products offered

80

Market share

Percentage of total sales that a business has in overall market. (Company sales / whole sales) x100