TOPIC 4 MARKETING Flashcards
(114 cards)
1
Q
What are the three different meanings of the term market?
A
- Place where buyers and sellers interact
- Any place, virtual or physical, buyers come together to exchange goods
- A type of product
The simplest use of the term market refers to its function in facilitating trade.
2
Q
Define market orientation.
A
A business approach that focuses on identifying and meeting the needs and wants of customers.
Opposite of product orientation, which focuses on the product itself.
3
Q
What is market share?
A
The portion of a market controlled by a particular company or product.
Important for assessing the competitiveness of a business.
4
Q
Why is market share important?
A
- Indicates market leadership
- Reflects business competitiveness
- Affects pricing strategies
- Influences customer perception
Higher market share can lead to economies of scale.
5
Q
What is the BCG matrix?
A
A tool used to analyze a company’s product portfolio based on market growth and market share.
It categorizes products into four quadrants: Stars, Question Marks, Cash Cows, and Dogs.
6
Q
What does marketing planning involve?
A
A document that outlines a company’s entire marketing process, including objectives, budget, strategies, and control tools.
Essential for guiding marketing efforts and ensuring alignment with business goals.
7
Q
List the three ways a business can estimate its marketing budget.
A
- Objective based
- Sales based
- Incremental based
Each method has its advantages and considerations.
8
Q
Define segmentation in marketing.
A
The process of dividing consumers into groups with similar characteristics and needs.
Helps companies target specific segments effectively.
9
Q
What are the three main types of market segmentation?
A
- Geographic segmentation
- Demographic segmentation
- Psychographic segmentation
Each type provides a different lens for understanding consumer behavior.
10
Q
What is the advantage of market segmentation?
A
- Identify market gaps
- Design suitable products
- Reduce resource waste
- Diversify risks
Tailoring offerings to specific groups can lead to increased sales and profits.
11
Q
What is targeting in marketing?
A
Selecting the most appropriate market segment for a marketing campaign.
Often involves focusing on niche markets for specialized needs.
12
Q
What distinguishes niche markets from mass markets?
A
- Specific group of consumers within a larger market that have characteristics and preferences.
- Large group of consumers with similar needs and wants. Aims to appeal to the entire market.
Each approach has its own set of advantages and disadvantages.
13
Q
What is product differentiation?
A
The process of highlighting the differences between a product and its rivals.
A key strategy for gaining competitive advantage.
14
Q
Define unique selling point (USP).
A
A feature of the product that distinguishes it from its competitors.
Effective USPs add value and are difficult to replicate.
15
Q
What are Porter’s Generic Strategies?
A
- Cost leadership
- Differentiation
- Cost focus
- Differentiation focus
These strategies help businesses gain competitive advantages.
16
Q
Define sales forecasting.
A
A quantitative technique used by businesses to predict future sales levels.
Important for planning and resource allocation.
17
Q
What are the benefits of sales forecasting?
A
- Anticipate demand
- Set performance targets
- Optimize production
- Inform marketing strategies
Helps businesses react to market changes effectively.
18
Q
List the three types of sales forecasting methods.
A
- Causal models
- Time series analysis
- Qualitative techniques
Each method utilizes different data inputs and approaches.
19
Q
What is primary market research?
A
Research that involves creating new information gathered through various methods like surveys and interviews.
Aimed at answering specific research questions.
20
Q
What is secondary market research?
A
Research that involves using existing information gathered by others to understand a market.
Useful for gaining general insights about market dynamics.
21
Q
What are the seven Ps of the marketing mix?
A
- Product
- Price
- Promotion
- Place
- People
- Processes
- Physical evidence
Each element plays a crucial role in formulating marketing strategies.
22
Q
What are the advantages of using surveys in market research?
A
- Collect data from large groups
- Quick data collection
- Quantitative data generation
Surveys can be conducted via various formats such as online or face-to-face.
23
Q
What is a focus group?
A
An interview conducted with a small group of people with similar characteristics to gather qualitative data.
Encourages open discussion and feedback on products.
24
Q
What does STEEPLE stand for?
A
Social, Technological, Economic, Environmental, Political, Legal, Ethical
STEEPLE is a framework used to analyze external factors affecting a business.
25
What are the primary market research methods?
* Surveys
* Interviews
* Focus groups
* Observations
## Footnote
Primary research methods are used to collect firsthand data directly from participants.
26
What is the advantage of surveys in market research?
Collect data from a large number of people in a short period of time
## Footnote
Surveys can be conducted in various forms, including online, face-to-face, and telephone.
27
What type of data is primarily collected through interviews?
Qualitative data
## Footnote
Interviews provide in-depth insights but take longer to conduct.
28
What is a focus group?
An interview conducted with small groups of people that have similar characteristics
## Footnote
Focus groups often yield candid feedback about products.
29
What are secondary market research methods?
* Market analysis
* Academic journals
* Government publications
* Media articles
* Other online content
## Footnote
Secondary research involves analyzing existing data rather than collecting new data.
30
What is the main disadvantage of secondary research?
Existing info may not fit what the business wants
## Footnote
Secondary research relies on data collected by others, which may not be tailored to specific needs.
31
What is the difference between qualitative and quantitative research?
* Qualitative: Collection of non-numerical data (opinions, why?)
* Quantitative: Collection of numerical data and information that can be counted
## Footnote
Blending both types can provide a comprehensive view.
32
What is a sample in market research?
A subset of individuals from a given population used to estimate or predict characteristics of the whole population
## Footnote
Sample size and choice are crucial for accurate representation.
33
What is random sampling?
A sampling method where everyone in the population has the same chance of being selected
## Footnote
Random sampling is considered the most accurate method.
34
What is the advantage of quota sampling?
Faster, cheaper, and easier to administer
## Footnote
Quota sampling involves dividing the population into strata and taking proportional samples.
35
What does the mean represent in descriptive statistics?
The average number found by adding all numbers in a set and dividing by the total
## Footnote
The mean can be affected by extreme values.
36
What is the mode in descriptive statistics?
The most frequently occurring value in a set of values
## Footnote
Mode is useful for identifying the most common occurrence.
37
What are the five stages of a product's life cycle?
* Research and Development (R&D)
* Introduction
* Growth
* Maturity
* Decline
## Footnote
Each stage has distinct marketing strategies and goals.
38
What is the purpose of extension strategies in product life cycle?
To lengthen the maturity stage
## Footnote
Extension strategies can include finding new markets or redesigning packaging.
39
What is branding?
A name, symbol, or design used to identify a product or company
## Footnote
Effective branding can lead to customer loyalty and recognition.
40
What is cost-plus pricing?
Direct cost plus some indirect costs
## Footnote
This method is straightforward but does not consider competition.
41
What is penetration pricing?
Setting low prices to attract customers, then gradually increasing them
## Footnote
This strategy aims to build market share quickly.
42
What is dynamic pricing?
Changes according to different factors, such as customer group or time
## Footnote
Dynamic pricing can maximize profits but may affect customer satisfaction.
43
What is price elasticity of demand (PED)?
A measure of how sensitive consumer demand is to changes in price
## Footnote
PED can indicate whether demand is elastic or inelastic.
44
What are above the line (ATL) promotions?
Promotion aimed at mass audiences, generally not targeted
## Footnote
Examples include television and newspaper advertisements.
45
What is below the line (BTL) promotion?
Promotion aimed at specific segments without relying on mass market techniques
## Footnote
Examples include direct marketing and sales promotions.
46
What are the types of distribution channels?
* Direct Distribution
* Indirect Distribution (Producer to Retailer to Consumer)
* Indirect Distribution (Producer to Wholesaler to Retailer to Consumer)
## Footnote
Each channel has its advantages and disadvantages.
47
What is a wholesaler?
A business selling goods in large quantities to retailers at low prices
## Footnote
Wholesalers play a key role in the distribution process.
48
What is a retailer?
A business that sells products to the public in small quantities for use or consumption
## Footnote
Retailers are the final link in the supply chain.
49
What is indirect distribution?
Distribution through intermediaries such as retailers or wholesalers.
## Footnote
This method includes two main types: producer to retailer to consumer and producer to wholesaler to retailer to consumer.
50
What are the advantages of indirect distribution?
* Easy distribution of the product
* Consumers can try the product
## Footnote
This applies to both types of indirect distribution.
51
What are the disadvantages of indirect distribution?
* Intermediaries keep some of the profits
* Loss of control over the products
## Footnote
This is relevant for both types of indirect distribution.
52
What is the role of people in service provision?
Provide services and address cultural differences in customer service.
## Footnote
Staff must be prepared to deal with unique customer needs influenced by values and cultural traditions.
53
What are the key components of processes in service delivery?
* Placing and paying for orders
* Delivery systems
* Customer feedback
* After-sales service
## Footnote
Processes involve procedures and policies that enhance product or service offerings.
54
What is physical evidence in marketing?
All sensory elements that the customer experiences when interacting with a business.
## Footnote
Positive physical evidence can influence customer perception and employee motivation.
55
What factors influence the appropriate marketing mix?
* Quality of service
* Type of business and resources
* Market characteristics
* Target market characteristics
* Legal and cultural aspects
## Footnote
These factors determine how a business tailors its marketing strategies.
56
What are the stages of the product life cycle?
* Research and Development
* Introduction
* Growth
* Maturity
* Decline
## Footnote
Each stage requires specific strategies for product, price, promotion, place, people, processes, and physical evidence.
57
What is exporting in international market entry strategies?
The process of selling goods or services to a foreign country.
## Footnote
It is considered the lowest risk strategy.
58
What is franchising in the context of international marketing?
A method where a franchisee buys rights to use a franchisor's name and business model.
## Footnote
This strategy offers a quick and cost-efficient entry into foreign markets.
59
What are the opportunities in international markets?
* Larger customer base
* Lower production costs
* Risk diversification
* Improved brand reputation
## Footnote
These factors can contribute positively to a business's growth and sustainability.
60
What are STEEPLE factors?
Sociocultural, Technological, Economic, Environmental, Political, and Legal factors that affect business operations.
## Footnote
Businesses must adapt strategies based on these external conditions.
61
What is capital expenditure?
Spending on non-current (fixed) assets of a business.
## Footnote
Examples include factories, delivery trucks, and production equipment.
62
What is revenue expenditure?
Spending on a company's general operational costs.
## Footnote
This includes day-to-day running costs necessary for generating revenue.
63
What are personal funds in the context of internal finance?
Money invested by the owners of the business.
## Footnote
This source carries the risk of loss if the business fails.
64
What is retained profit?
The money left at the end of the trading year after all costs and expenses have been paid.
## Footnote
It serves as a form of internal finance that does not need to be repaid.
65
What is the difference between short-term, medium-term, and long-term finance?
* Short-term: Repaid in less than 1 year
* Medium-term: Lasts longer than 1 year but less than 5
* Long-term: Used for longer than 5 years
## Footnote
These classifications help businesses choose appropriate financing options based on their needs.
66
What is debt finance?
Money borrowed from banks or financial institutions with interest.
## Footnote
Forms include loans, mortgages, and overdrafts.
67
What is crowdfunding?
A method of finance where many people invest small amounts to fund a business or project.
## Footnote
Types include peer-to-peer lending, equity crowdfunding, rewards-based crowdfunding, and donation-based crowdfunding.
68
What are the two types of costs in business?
* Fixed costs
* Variable costs
## Footnote
Variable costs change with the level of output, while fixed costs remain constant regardless of production levels.
69
What happens to loan costs when interest rates change?
Loan becomes more expensive for the business
70
What is an advantage of financing for business owners?
They do not lose ownership and control of the business
71
What are the two types of costs in business?
* Fixed costs
* Variable costs
72
Define variable costs
Costs that vary with output
73
Give examples of variable costs
* Materials
* Packaging
* Delivery
* Piece-rate wages
* Sales commission
* Cleaning services
74
What are fixed costs?
Costs that stay the same at different levels of output
75
Provide examples of fixed costs
* Salaries and wages of staff
* Rent and mortgage payments
* Machines and capital equipment
* Fixtures and fittings
* Insurance
76
What are semi-variable costs?
Costs that are both variable and fixed
77
Give an example of semi-variable costs
* Electricity bills with a fixed fee plus usage charges
78
Define direct costs
Costs that are precisely traceable to a specific cost object
79
Provide examples of direct costs
* Staffing costs of specific employees
* Utility costs of a branch
* Material costs for a product line
80
Define indirect costs
Costs that are used in multiple areas of the business and not traceable to a specific cost object
81
Provide examples of indirect costs
* Nationwide advertising campaigns
* Accountancy fees
* Salaries of board members
* HR department expenses
82
What is the formula for total revenue?
Total revenue = price x quantity
83
What are revenue streams?
Income generated from a particular activity
84
True or False: More revenue streams lead to a stronger business.
True
85
What is the purpose of final accounts for internal stakeholders?
To assess business performance and develop strategies
86
List the internal stakeholders in a business
* Management
* Owners
* Employees
87
What do external stakeholders assess from final accounts?
Business health, tax assessments, and repayment abilities
88
What does the statement of profit or loss record?
Sales revenues and costs to determine net profit
89
What is the formula for calculating gross profit?
Gross profit = sales revenue – cost of sales
90
What does net profit represent?
Profit after subtracting expenses from gross profit
91
What is a unique characteristic of a non-profit enterprise's statement of profit or loss?
They record profits as surpluses and pay no taxes
92
Define interest rate
The cost of borrowing money, expressed as a percentage
93
What is a mortgage?
A long-term loan used to purchase land or buildings
94
What is market orientation?
A business approach focused on meeting customer needs
95
What is product orientation?
A business approach focused on product quality rather than market needs
96
Define market share
The percentage of an industry or market's total sales that is earned by a particular company
97
What is the BCG Matrix?
A tool for analyzing a company's product portfolio based on market growth and market share
98
What are the 4Ps of marketing?
* Price
* Place
* Promotion
* Product
99
What are the 7Ps of services marketing?
* People
* Process
* Physical evidence
100
Define segmentation in marketing
The process of dividing a market into distinct groups of buyers
101
What is a niche market?
A specific segment of the market focused on a particular product or service
102
What is a unique selling point (USP)?
A feature that makes a product or service stand out from competitors
103
Define market penetration strategy
Selling more of the same products to the same customers
104
What is diversification in business strategy?
Selling new products in new markets
105
What are economies of scale?
Reduction in per-unit costs as a business grows
106
Define diseconomies of scale
Increase in per-unit costs as a business grows
107
What is a merger?
Two businesses combine to form a new business
108
What is an acquisition?
One company purchases another company
109
What is a joint venture?
Two businesses create and operate a third organization together
110
Define franchising
A business model where a franchisee buys rights from a franchisor
111
What is a multinational company (MNC)?
A company that operates in at least two countries
112
What is the difference between related and unrelated diversification?
* Related: New industry has similarities with existing industry
* Unrelated: New industry has no similarities with existing industry
113
What does corporate social responsibility (CSR) entail?
Business seeking ways to improve society and environment
114
Define value extraction
Capturing value from stakeholders inside or outside the business
