Unit 1- Marketing and People Flashcards

Question

What is competitive advantage?

Answer 1

- The ability of a business to add more value for its customers than its rivals and attain a position of relative advantage - A situation where a business has an advantage over its competitors by being able to offer better value, quality and/or service

Answer 2

Something that is planned for- probabilities of outcome are known or at least understood and considered. e.g. business investments

Answer 3

The unpredictable and uncontrollable events that affect a business e.g. Sale success for a new product launch

Answer 4

Market research involves the gathering and analysis of research to help support the implementation of marketing strategies

Answer 5

- Dimensions of the market (size, structure, growth, trends, etc.) - Competitor strategies (market share, positioning, USPs) - Needs, wants, and expectations of customers (& how they are changing) - Market segment; existing and potential opportunities for new segments

Answer 6

When a business prioritises a products design quality or performance rather than meeting customer preferences to guide production and marketing decisions e.g iPhone

Answer 7

Allows the business to focus on product quality and innovation and to invest in this

Answer 8

By focusing on the product and putting customer preferences in second place the product, the product is admired but doesn't necessarily sell

Answer 9

Where a business chooses to design a product or service to meet the requirements of customer preference/desires. Market research is critical to the success of a market-orientated business as it allows the business to find out about customer tastes and priorities.

Answer 10

- Close for with customer expectations | - Greater responsiveness to customer needs

Answer 11

- Regular changed in the appearance and function of a product - May leave customers confused about what the brand really stands for

Answer 12

- Markets are much more dynamic - Customers are becoming much more demanding - Barriers to market entry getting lower

Answer 13

Data collected first-hand for a specific research purpose e.g. Focus group Surveys

Answer 14

Data that is already exists and which has been collected for a different purpose. e.g. Internet/ trade organizations Government data

Answer 15

- directly focused to research objectives - kept private (not publicly available) - more detailed insights (particularly into customer views)

Answer 16

- often free and easy to obtain - good source of market insights - quick to access and use

Answer 17

- time consuming and costly to obtain - risk of survey bias - sampling may not be representative

Answer 18

- can quickly become out of date - not tailored to business needs - specialist reports often quite expensive

Answer 19

``` focus groups observation surveys telephone interviews test marketing experiments ```

Answer 20

``` published market research reports internal transactional data google official statistics (ONS) trade associations media reports competitor materials ```

Answer 21

- research that is based on views and opinions, beliefs and intentions - answers research questions such as "why? "would?" or "how?" - aims to understand why customers behave in a certain way or how they may respond to a new product/service - focus groups and interviews are common methods used to collect qualitative data.

Answer 22

- numerical data and can be analysed statistically - addresses research questions such as "how many?" "how often?" "who?" "when?" and "where?" - based on larger samples and is more statistically valid - main methods of obtaining quantitative data are the various form of a survey

Answer 23

- essential for important new product development and launches - focused on understanding customer needs, wants, expectations= very useful insights for a business - can highlight issues that need addressing - effective way of testing elements of the marketing mix

Answer 24

- expensive to collect and analyse; requires specialist research skills - based around opinions; always a risk that sample is not representative

Answer 25

- data relatively easy to analyse - numerical data provides insights into relevant trends - can be compared with data from other sources

Answer 26

- focuses on data rather than explaining why things happen - doesnt explain the reasons behind numerical trends - may lack reliability if sample size and method is not valid

Answer 27

sampling involves the gathering of data from a sample of respondents, the results of which should be representative of the population as a whole

Answer 28

- even a relatively small sample size (if representative) can provide useful research insights - using sampling before making marketing decisions can reduce risk and costs - sampling is relatively flexible and relatively quick

Answer 29

- biggest risk= sample is unrepresentative of population; leading to incorrect conclusions - risk of bias in research questions - less useful in market segments where customer tastes and preferences are changing frequently

Answer 30

- reduce risk - understand consumer behaviour - quantify potential consumer demand - understand how much consumers and how they operate - the key features of the business environment (SLEPT= economic, social, political, legal conditions, technology)

Answer 31

- if the sample size is too small , this means that there is more chance that the respondents who don't reflect the overall views of the market are over-represented in the sample - sample bias: the way the respondents are selected may over represent certain types of people whose views may skew the overall findings away from the views of the total population being researched - other bias e.g. interview bias, question bias and respondent bias

Answer 32

- relatively easy to learn about consumer preferences and buying habitats by mining massive sets of quantitative data - complex algorithms can uncover patterns and correlations that enable more effective marketing

Answer 33

- company websites can gather data on vistors to the website which can provide some information about online shoppers/browsers interests - social media can offer information on consumer attitudes to a product/service, and even allow for an element of relationship building between the business and consumers - databases allow vast quantities of data relating to the consumers to be trawled into in order to identify patterns that can help to explain how consumers how consumers actually behave, with much of this data being generated by loyalty cards. Despite their name a major purpose of loyalty schemes is to gather data on customers' buying habits

Answer 34

involves dividing a market into groups that reflect different customer needs and wants

Answer 35

customer needs and wants how customers buy location of customers knowledge and experience of customers

Answer 36

- products and services can be designed to suit specific needs - meeting customer's needs precisely allows a higher price to be charged - promotional activity is easier to target

Answer 37

``` age gender income hobbies/interests location ethnic origin/culture lifestyle ```

Answer 38

market positioning is the deciding exactly what image you are trying to create for your product relative to its rivals. decision 1: choose which customers to serve (segmentation and targeting) decision 2: choose how to serve those customers (product differentiation and market positioning)

Answer 39

``` low price/ high price basic quality/ high quality low volume/ high volume necessity/ luxury light/ heavy simple/ complex unhealthy/ healthy low-tech/ high-tech ```

Answer 40

- the process of creating a diagram that identifies all the products in the market using two key features. - it refers to evaluating business ideas and products/services by setting out the features of a market or product on a diagram. - it can be used to identify a gap in the market or to reposition a product.

Answer 41

- helps spot gaps in the market - useful for analysing competitors - encourages use of market research

Answer 42

- just because there is a "gap" doesnt mean there is a demand - not a guarantee of success - how reliable is the market research?

Answer 43

using differentiation/ USP to have an edge over the competition products without a competitive advantage tend not to have a long term future

Answer 44

compete effectively protect and build a brand = strengthen customer loyalty add more value create a USP

Answer 45

product differentiation arises when customers percieve a distinct difference your product and the alternatives provided by competitors

Answer 46

``` price adding value innovation reliability quality reputation/image advertising/marketing branding convenience and customer service ```

Answer 47

- capable of delievering what is important to customers - distinctive: compared with the competition - communicated and visible to customers - not easily copied by competitors - affordable by the target customers - profitable

Answer 48

the difference between the price that is charged and the total cost of the inputs required to create the product/service. It might be achieved through improving the product/service itself or improving the way consumers perceive the product/service.

Answer 49

- build a brand - deliever excellent customer service add product features and benefits that customers want - operate efficiently

Answer 50

a business is an organisation that exists to provide goods and services on a commercial basis to customers

Answer 51

goods: physical products services: intangible (non-physical) products

Answer 52

businesses need society and society needs businesses and they both benefit due to: - creation of employment and development of human capital - drive innovation through research and development and new products - pay taxes on profits earned and collect taxes for government - create wealth by providing returns on investment

Answer 53

a person who sets up a business or businesses, taking on financial risks in the hope of profit.

Answer 54

- support and finance - lack of viable business idea - gender: women still under-represented as entrepreneurs

Answer 55

- business experience (of the entrepreneur) - personal experience (as a customer) - observations and research

Answer 56

- solves a problem - offer a better, cheaper alternative than existing products - are ideally simple and practical - can be delivered quickly - have a clear focus - anticipate trends and exploit growing markets - can be implemented profitably

Answer 57

involves people within a business creating or discovering new business opportunities, which leads to the creation of new parts of the business or even new businesses

Answer 58

- help drive innovation within a business | - help provide solutions to problems

Answer 59

- give employees ownership of projects - make risk-taking and failure acceptable - train employees in innovation - give employees time outside the confines of their job description - encourage networking and collaborating - reward entrepreneurial thinking and activity

Answer 60

- the probability that things will not go as well as planned - the chance that money invested in the business will be lost - the possibility that the entrepreneur will be personally liable for the debts a business incurs - risk of not getting another job or having to face the stigma of "failure"

Answer 61

- profits - capital gain - self esteem - personal develpment - sense of control - satisfaction from building something

Answer 62

"the skills and abilities to take risks and create profits" "the creation of a business to meet the needs and wants of customers"

Answer 63

- passionate and visionary - energetic, driven, and resilient - self starting and decisive - calculated risk taker - focused - results orientated

Answer 64

profit maximisation - desire to earn substantial rewards - long-term profit maximisation consistent with building valuable business - initially, entrepreneur may need to accept losses as business is established profit satisficing - a sufficient profit to enable satisfactory standard of living - the entrepreneur will take fewer risks - the trade-off is lower returns - ssociated with "lifestyle" businesses

Answer 65

- more control over working life - need for flexible working - frustration with unfulfilled potential - escape an uninteresting job/career - pursue an interest or hobby - want to be the boss - satisfaction from building something - want rewards from effort - dislike establishment of hierarchy - change in personal circumstances e.g. redundancy

Answer 66

- occasional loneliness and isolation - higher responsiblity: can't blame others when things go wrong - financial pressure - hard work - strain on family and social life - higher stress levels - needs to multitask - difficult to take a "sickie" - rollercoater of emotions

Answer 67

the most common form of "not-for-profit" enterprises "businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business/community, rather than being driven by the need to maximise profit for shareholders and owners" an organisation that exists with a clear goal to help the community but runs the organisation like a business. All profits are reinvested back into the organisation.

Answer 68

- make a clear statement of what needs to be achieved - provide a focus for all business activity - aid and inform management decision-making - help set targets for individual and group achievement - provide a means of measuring performance

Answer 69

- the specific intended outcomes of business strategy - the anticipated end results of a programme of activities - targets that the business adopts in order to achieve its primary aims

Answer 70

SPECIFIC-state exactly what is to be achieved MEASURABLE- is it possible to determine whether (or how far) it has been achieved ACHIEVABLE-realistic circumstances in which it is set and the resources available to the business RELEVANT- how relevant is it to the people responsible for achieving them? TIME BOUND- set within a time frame

Answer 71

an action-based statement that declares the purpose of an organization and how they serve their customers. is the overriding goal of the business and the reason for its existence

Answer 72

corporate objectives are what a business as a whole wants to achieve functional objectives are set for the individual functions of a business and are designed to support (and be consistent with) corporate objectives

Answer 73

- spot business opportunities - take (calculated) risks in order to gain possible future returns - act a catalyst for the creation and growth of a business enterprises

Answer 74

- differentiates the business from its competitors - defines the markets/business in which the business wants to operate - is relevant to all major stakeholders; not just shareholders and managers - excites, inspires, motivates, and guides- particularly important for employees

Answer 75

- not always supported by actions of the business - often too vague and general or merely statements of the obvious - viewed as a public relations exercise - sometimes regarded cynically by employees - not supported wholeheartedly by senior management

Answer 76

- profit (value, margin) - return on investment - growth (revenues, profit) - market share - cash flow - business value (market capitalisation) - corporate image and reputation

Answer 77

``` survival revenue (growth, sales maximisation, market share) cost-efficiency or cost minimisation profits and profitability employee welfare customer satisfaction social ```

Answer 78

- owner is the business - owner has unlimited liability for business actions (including debts) - most unincorporated businesses operate as sole traders

Answer 79

- there is a legal difference between the business and the owners - the company has a separate legal identity - owners have limited liability - most incorporated businesses operate as sole traders

Answer 80

the business owner or owners are personally responsible for all of the debts of the business, no matter what the value

Answer 81

the business owner or owners are only responsible for business debts up to the value of their financial investment in the business.

Answer 82

- quick and easy to set up - simple to run - minimal paper work - easy to close/shut down - your own boss - small capital investment means reduced start-up costs - freedom to make decisions

Answer 83

- unlimited liability - harder to raise finance - the business is the owner - can pay a higher tax rate than a company - long hours

Answer 84

- quite simple - minimal paperwork once partnership agreement is set up - more expertise and effort - partners can provide specialist skills - greater potential to raise finance - Workload is shared

Answer 85

- unlimited liability - Partners may not always agree on decisions for the business - Profit is shared between the partners - partners are bound to honour the decisions of others - complicated to sell/close

Answer 86

- separate legal entities - a minimum of 2 and a maximum of 20 partners - owned by their shareholders and run by directors - shareholders own shares of the company, not the assets - the company owns the assets and pay the debts - shareholders are not liable for any debts owed - LTD; the shares are not traded publicly on the stock exchange - PLC; tends to have larger share capital invested and its shares may be publicly traded

Answer 87

- limited liability - easier to raise finance - stable form of structure - profits are only shared between shareholders (dividends)

Answer 88

- must be registered with the Registrar of Companies - high set-up costs - harder to motivate and control workers - public disclosure of company information

Answer 89

- a more specialist type of limited company - shares may be quoted and traded on a public stock market - public companies have substantially more shareholders - are subject to significantly greater regulation in terms of public disclosure of financial and other information

Answer 90

A social enterprise is an organisation that exists with a clear goal to help the community but runs the organisation like a business. All profits are reinvested back into the organisation. - community development trusts - housing associations - sports club

Answer 91

A franchise is a business that gives the right to another person or business to sell goods or services using its name. It does this by providing the person or other business with a licence.

Answer 92

- still your own business - tested and developed format and brand - advice, support, training - easier to raise finance - no industry expertise required - buying power of franchisor - lower risk method of market entry and lower failure rate

Answer 93

- not cheap; initial fees and royalties and commission - restrictions on actions - problems selling business on - long-term rewards for hard work come with doing it alone - what happens if franchisor fails?

Answer 94

the cost of a choice made in terms of the next best alternative foregone or sacrificed

Answer 95

a sacrifice that must be made to get a certain product or experience "a decision between 2 choices arising from scarcity of resource, where having more or 1 thing potentially results in having less of another"

Answer 96

- can accelerate the growth of a proven service business format - enables rapid geographical growth for a minimum investment - still have an option to open solus branches - can cream-off "above normal" profits

Answer 97

demand for a good or service is the quantity that customers are willing and able to buy at a given price in a given period of time

Answer 98

- price (fall in price= increase in demand) - demographics - incomes (as income rises so should demand) - fashion, tastes and preferences - advertising and branding - seasonal factors

Answer 99

- a fall in price increases the purchasing power of customers - this allows customers to buy more with a given budget - for normal goods, demand rises with an increase in incomes

Answer 100

- a fall in price of good A makes it relatively cheaper compared to substitutes - some customers will switch to good A leading to higher demand - much depends on whether products are close substitutes

Answer 101

When the price of a good that complements a good decreases, then the quantity demanded of one increases and the demand for the other increases.

Answer 102

When the price of a substitute good decreases, the quantity demanded for that good increases, but the demand for the good that it is being substituted for decreases.

Answer 103

if income rises, customers will buy more of the product/service, shifting the demand curve to the right

Answer 104

supply is the quantity of a good that a producer is willing and able to supply onto the market at a given in a given time period

Answer 105

- costs of production - external shocks - new technology - taxation and government subsidies

Answer 106

lower unit costs mean that a business can supply more at each price

Answer 107

significant and often unexpected changes in the external business environment usually impact on market supply

Answer 108

technological change encourages new entrants to a market and can also enable existing suppliers to become more efficient, thereby increasing their potential to supply

Answer 109

indirect taxes - taxes on goods and services such as VAT - tax on clothes, components, electric cars, gas - if indirect tax goes down, businesses will want to supply more of the product; supply curve moves to the right

Answer 110

any form of government support offered to producers and (occasionally) consumers.

Answer 111

The situation where supply and demand are balanced, making the price stable.

Answer 112

shift of the demand curve to the RIGHT- which leaves a shortage at current price, so that price will rise and the equilibrium quantity will increase

Answer 113

shift of the demand curve to the LEFT- which leaves a surplus at current price, so that price will fall and the equilibrium quantity will decrease

Answer 114

shift of the supply curve to the RIGHT- which leaves a surplus at current price, so that price will fall and the equilibrium quantity will increase

Answer 115

shift of the supply curve to the LEFT- which leaves a shortage at current price, so that price will rise and the equilibrium quantity will decrease

Answer 116

PED measures the extent to which the quantity of a product demanded is affected by a change in price.

Answer 117

the responsiveness of demand to a change in a relevant variable

Answer 118

change in demand is more than the change in price

Answer 119

change in demand is less than the change in price

Answer 120

change in demand = change in price

Answer 121

if PED >1 then the change in price will cause a LARGER change in demand - overall revenues would increase with a price cut - overall revenues would fall with a price increase

Answer 122

if PED <1 then the change in price will cause a SMALLER change in demand - overall revenues would fall with a price cut - overall revenues would increase with a price increase

Answer 123

- brand strength; strong brand loyalty= INELASTIC - necessity; the more necessary a product= INELASTIC - habit; products that are demanded and consumed s a matter of habit= INELASTIC - availability of substitutes; demand for products that have lots of alternatives=ELASTIC - time; price changes tend to have less impact on demand in the short run - luxury goods; INELASTIC

Answer 124

income elasticity of demand measures the extent to which the quantity of a product demanded is affected by a change in income.

Answer 125

- a rise in in consumer income will result in a rise in demand - a fall in consumer income will result in a fall in demand

Answer 126

- income elasticity more than 1 and positive - as income grows, proportionally more is spent on luxuries eg expensive holidays branded goods

Answer 127

- income elasticity is less than 1, but more than 0 and positive - as income grows, proportionally less is spent on necessities eg own-label goods staple groceries

Answer 128

- consumers switch to better alternatives | - substitute products become affordable

Answer 129

- forecasting sales; by considering the likely impact of planned future price changes - deciding the best pricing strategy for increasing revenue

Answer 130

- it can be difficult to get reliable data on how demand changes in relation to price (although this is getting easier with the emergence of big data) - other factors affect demand (eg consumer tastes) - many markets subject to rapid technological change- make previous data less reliable - competitors will react; pricing decisions can't be taken in isolation

Answer 131

- is it a luxury? necessity? inferior good? - expectations of changes in income, such as loss of job, promotion, recession or economic growth - the degree of attractiveness to the consumer - how large a proportion of household income is spent on the item

Answer 132

- sales forecasting - financial planning eg budgets and financial plans - product portfolio management eg some business will make sure their portfolios contain products with a range of income elasticities

Answer 133

a combination of elements used by a business to enable it to meet the needs and expectations of customers ``` 4ps price place promotion product ```

Answer 134

function aesthetics cost

Answer 135

- the way the product works - does it do what it needs to do? - is the product reliable?

Answer 136

- does the design allow the product to be made and sold profitably? - how much value is added during the production process?

Answer 137

- how the product appeals to the customer in terms of how it looks, feels, etc. - based on the subjective judgement of customers - a popular way to differentiate a product

Answer 138

- more predictable and stable demand - longer product life cycles - lower promotional costs - build reputation for quality based on reliability - economic manufacture through economies of scale

Answer 139

- high added value - demand fuelled by customer aspiration - potentially shorter product life cycle - attracts imitation= need for design protection - need for greater promotional support

Answer 140

- Sustainability - concern over resource depletion - ethical supply chains/ethical sourcing - designing for waste minimisation

Answer 141

A product that is easily distinguished from other products so that it can be easily communicated and effectively marketed

Answer 142

Product design is the means by which customer demand for new and varied products can be met. A good design contributes to a product's usefulness as well as its look(s).

Answer 143

The process involved in creating a unique name and image for a product in the customer's mind, mainly through advertising campaigns with a consistent theme.

Answer 144

A name, term, sign, symbol, design, or any part other feature that allows consumers to identify the goods/ services of a business and to differentiate them from competitors

Answer 145

1. It adds significant value 2. Able to charge higher prices and demand is more price INELASTIC 3. Builds customer loyalty and desire 4. Reduce elasticity of demand

Answer 146

- use of raw materials, water, and other resources - energy use and its impact on climate change - waste and pollution produced by the business - the impact the business has on employees and the local, wider, and international community

Answer 147

1. Product brand - brands associated with certain products - FMCG (FAST MOVING CONSUMER BRANDS) - e.g. Persil, PotNoodle 2. Service brand - either delivered online/ via app or face-to-face - e.g. Netflix, Uber 3. Umbrella (FAMILY) brand - brands that are assigned to more than one product - makes different product lines identifiable by consumer grouping them under one brand name - e.g. Dove, Cadbury 4. Corporate/ manufacturer and own-label brands - e.g. Nestle, Unilever, BBC 5. Own-label brands - where retail outlets assign their corporate branding to a range of goods and services - e.g. Tesco Finest 6. Global brands - easily recognised and operating worldwide - based on familiarity, stability, and availability - e.g. Ikea, McDonald's

Answer 148

is a marketing strategy in which a new name, term, symbol, design, or combination is created for an established brand with the intention of developing a new, differentiated identity in the minds of consumers, investors, and/or competitors.

Answer 149

- different methods of promotion/advertising - create a USP - sponsorship - use of social media to build a relationship between the business and consume

Answer 150

Viral marketing: - uses social media and online platforms to try to produce increases in brand awareness or to achieve other marketing objectives. - DEFINITION: any strategy that encourages people to pass on messages to others about a product or a business electronically Social media: - just like traditional media, are seen by many businesses as another place where they can display their promotional messages, through Instagram or other online pages. Emotional branding: - is the practice of building brands that appeal directly to a consumer's emotional state, needs, and aspirations e.g. clothing, confectionary and toiletries

Answer 151

Techniques used to make products known to consumers. Promotion in marketing has 2 key tasks: to inform and persuade. The main aim of promotion is to ensure that customers are aware of the existence and positioning of products.

Answer 152

Describes the promotional methods that a business uses to pursue its marketing objectives

Answer 153

- Advertising - Sales promotion and merchandising - Personal Selling - Public Relations/ publicity/sponsorship - Direct marketing

Answer 154

Stage in the product's life cycle *position in the life cycle will require different promotional methods Nature of the product *what information do customers need before they buy? Competition * what are rivals doing? * what promotional methods are traditionally effective in the market? Marketing objectives and budget * what does promotion need to achieve? * how much will it cost? Target market *appropriate ways to reach the target market segmentation

Answer 155

+ wide coverage + control of message + repetition means that the message can be effective + effective for building brand awareness and loyalty - often expensive - can be impersonal - one way communication - lacks flexibility - limited ability to close a sale

Answer 156

``` +high customer attention +message is customised +persuasive impact +potential for development of relationship +adaptable +opportunity to close the sale ``` - high cost - labour intensive - expensive - can only reach a limited number of customers

Answer 157

+effective at achieving a quick boost sales +encourages customers to trial a product or switch brands - sales effect may only be short term - customers may come to expect or anticipate further promotions - may damage brand image

Answer 158

PR includes: press releases, sponsorships, donations to charities/local communities +audiences are more likely to trust messages coming from an objective source rather than paid-for advertising messages +can be an economical way to reach a large audience in comparison to paid for advertising media placement +can help raise your company's authority, build relationships with key audiences, and ultimately take your business to the next level - no direct control you can't exactly control how your business is portrayed by the media, when your message will appear, and where it will be placed - never guarantee your story will be published

Answer 159

+Build relationships. + sponsoring events, charities or projects is that it builds awareness of your brand, exposing your business to a wider audience and giving them a positive association with your brand - the actions of any person/brand/event you sponsor will immediately be linked to you - there is no guaranteed return on investment

Answer 160

+focused limited resources on targeted promotion +can personalise the message +relatively easy to measure response and success - response rates vary - a negative image of junk mail and email spam - databases expensive to maintain and keep accurate

Answer 161

+encourages customer loyalty +attracts customers +increase brand recognition - can be expensive - once is not enough

Answer 162

- the money charged for a product or service - usually expressed in terms of £ - the only element of the marketing mix that impacts directly on the value of sales

Answer 163

- maximise profit - achieve a target level of profit - maximise sales revenue - improve cash flow

Answer 164

- maintain/improve market share - beat/prevent competition - increase sales - build a brand

Answer 165

the methods used to calculate the actual price set Competitive Pricing Cost-plus Pricing Markup Pricing Demand Pricing

Answer 166

- adopted in the short run to suit particular circumstances | - limited impact beyond the product itself

Answer 167

- adopted over the medium to long-term to achieve marketing objectives - have a significant impact on marketing strategy

Answer 168

- costs - elasticity of demand - product life cycle - market share - marketing objectives - positioning - competitors

Answer 169

* basing your prices on costs * popular method of cost-based pricing is mark up - widely used in retailing the method ensures some profit is made : PRICE CHARGED=UNIT COST+ (% MARK-UP)

Answer 170

* this involves setting a high price to maximise profit * aims to maximise profits per unit to achieve quick recovery of development costs * best used in the introduction or early growth stage

Answer 171

* involves offering a product at a low introductory price * aims to build sales of higher-priced related items (hook and bait) * price can be increased once target market share is reached

Answer 172

* Setting prices lower than a whole number- makes it seem cheaper than what it is * e.g £9.99

Answer 173

* where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services * encourages customers to buy other full price products from the business with the loss leader product

Answer 174

*when a businesses set flexible prices for products or services based on current market demands

Answer 175

*when a business bases its prices on what competitors are doing

Answer 176

*price cutting or offer of "free gifts/products" to force rivals out of business or prevent new competition

Answer 177

- amount of differentiation/ number of USPs - price elasticity of demand - the level of competition in the business environment - strength of the brand - stage in the product life cycle - costs and the need to make a profit

Answer 178

Online sales - may be more sensitive online than on the high street because consumers find it easier to compare prices than those walking around different stores - pricing levels may be lower as running an online business generates lower fixed costs than bricks and mortar stores with prime locations - company's with both online and in-store presence may have be a little more price competitive with their online business Price comparison websites - sites such as comparethemarket.com appear to be encouraging firms to be price competitive so their products and services show up as best value on the website - some are simply sales outlets for producers and consumers should be assuming they are being told the best deals

Answer 179

distribution is the one of the four elements of the marketing mix. It involves the ways in which a product reaches the end consumers. the ultimate aim of effective distribution is to make products available in the right place at the right time in the right quantities.

Answer 180

- how can they ensure that their products reach existing and potential customers? - how and where do customers prefer to buy the product? - how important are factors such as as stock availablity, price and speed of delievery?

Answer 181

it involves the movement of a product through stages from production to consumer

Answer 182

- to provide a link between production and consumption - help gather market information - communicate promotional offers - find and communicate with prospective buyers - physical distribution- transporting and storing - financing- other parties finance the inventory - share risk-taking- other parties take some risk by handling inventories

Answer 183

Producers -organisations that take raw materials/components and process them into finished/ semi-finished goods Wholesalers - buy large quantities of supplies from producers and sell them in smaller quantities to retailers - they are between producers, retailers, and customers Retailers - an organisation that sells goods and services to the public - they are the end of the distribution channel

Answer 184

it is when a firm chooses a combination of distribution channels e.g. a combination of direct and traditional +allows more target market segments to be reached +enables higher revenues - can be complex to manage - the danger that pricing strategies become confused (for customers)

Answer 185

producer --> wholesaler --> retailer ---> consumer +reduces producer's transport costs +covers a larger geographic area +good knowledge of the market- right producers supplied - reduces direct contact between retailer and manufacturer - the profit mark up applied by the "middleman" adds to the final retail price e.g. groceries and confectionary

Answer 186

producer--> retailer --> consumer +good distribution links of large retailers +large deliveries +easier for producers to distribute their products - buying power of big retailers to influence price - poor customer service could limit sales - causes higher prices for the end consumer, as the intermediary must make a profit e.g. electrical goods and cars

Answer 187

producer --> consumer Where a producer and consumer deal directly with each other without the involvement of an intermediary +cuts out the middleman and reduces costs +direct customer contact +encourages other purchases - expensive to set up - need to build relationships - there are limited distribution channels (mainly through e-commerce or shops) e.g. factory outlets and holiday companies that dont use travel agents

Answer 188

Involves the use of intermediaries between the producer and consumer

Answer 189

- channel length: direct or indirect? - choice of intermediary - use just one or several channels? - how to move the goods through the channel? - control over the channel: who decides price, promotion, packaging?

Answer 190

- direct distribution - websites offer a wide and varied range of products, with the chance to update the product - online distribution offers small firms the chance to reach a global audience in a way other channels simply could not offer

Answer 191

Anything that is capable of satisfying customer needs and wants

Answer 192

A theoretical model that describes the stages a product goes through over its life. This well-known method can be used to: * forecast future sales trends * help with market targeting and positioning * help analyse and manage the product portfolio

Answer 193

* research and development * introduction * growth * maturity * decline

Answer 194

* often complex and time-consuming * cost of development often rises as product approaches launch * may not be successful- high failure rate * test launch may reduce the risk of product failure * can be a long lead time before sales are achieved

Answer 195

* new product launched on the market * likely to be a low levelof sales- penetration pricing may help build customer demand * low capacity utilisation and high unit costs * usually negative cash flow * distributors may be reluctant to take an unproven product * heavy promotion to make consumers aware of the product

Answer 196

* fast growing sales, helped by wider distribution * rise in capacity utilisation- should lower unit costs * product gains market acceptance * cash flow may become positive * the market grows, profits rise but attracts the entry of new competitors

Answer 197

* slower sales growth as rivals enter the market = intense competition * high level of capacity utilisation * high profits for those with a high market share * cash flow should be strongly positive * weaker competitors start to leave the market * prices and profits fall

Answer 198

* falling sales * market saturation and/or competition * decline in profits and weaker cash flows * more competitors leave the market * decline in capacity utilisation- switch capacity to alternative products

Answer 199

to prevent a decline in the product's sales in the medium-to-long term. the two main variables for basing anew extension strategy are the product itself and promotion.

Answer 200

* lowering the price * changing promotion (e.g. new promotional message) * changing the product- rebrand or product improvement * looking for alternative distribution channels * developing a new market segment * find new uses for the product * repositioning the product

Answer 201

* it is a THEORETICAL model * the shape and duration of the cycle varies from product to product * it is difficult to recognise exactly where a product is in its life cycle * length cannnot be reliably predicted * decline is not unavoidable

Answer 202

Product portfolio analysis assesses the position of each product or brand in a firm's portfolio to help determine the right marketing strategy for each.

Answer 203

It categorises the products into one of four different areas based on: - market share= does the product being sold have a high or low market share? - market growth= are the numbers of potential customers in the market growing or not

Answer 204

* stars (high growth, high market share) * cash cows (low growth, high market share) * question mark/problem child (high growth, low market share) * dogs (low growth, low market share)

Answer 205

* it is a useful tool for analysing product portfolio decisions * but is only a snapshot of the current position * it has little or no predictive value * focus on market share and market growth ignores issues such as developing a sustainable competitive advantage

Answer 206

excellent products with high growth and high market share but need constant advertising

Answer 207

big investment to develop and advertise to start with but it has big sales potential for the future high market growth and low market share

Answer 208

profits from cash cows help fund new products. sales made with little investment low market growth and high market share

Answer 209

sales are falling and it may be taking profit to keep the dog alive low market growth and low market share

Answer 210

* building- investing in promotion and distribution to boost sales, often used with problem child (question mark) * holding- market spending to maintain sales, used with star products * milking- taking whatever profits you can without much more new investment, often used with cash cows * divesting- involves setting off the products, common with dogs

Answer 211

a term used to describe the general approach to marketing used by a business. strategy is about the future and relies on predicting the market and ensuring that the plan devised for marketing the business's products suits the market conditions that will develop during the life of the strategy.

Answer 212

niche marketing aims to market a product at a small group in a larger market. Using a niche marketing strategy makes a product easily differentiated in the market, so in the short term, it can avoid competition. However, as the market is comparatively small there is little room for competition, so any other business entering the market may reduce competition. PRODUCT- likely to have significant differences from its rivals, the product will be designed to meet very specific needs of the customer group PRICE- may be high PROMOTION- more targeted PLACE- distribution channels more selective

Answer 213

this aims to market a product to a larger market. This means the product may not b differentiated as significantly as a niche market product in terms of features. Products are available to a wide audience, so this spreads the risk to the business. However, there will be a greater number of competitors offering products that are very similar, so the risk is that a business may be forced to compete more on price, thus reducing profits. PRODUCT- many products, maybe many substitutes, the business will be aiming to create a usp PRICE- often similar, usually there is a price leader and the other businesses follow PROMOTION- often lots of heavy investment in this area PLACE- often use multiple channels of distributi

Answer 214

with business-to-consumer marketing, getting and keeping the right image for the product/service is vital. Of course, all aspects of the marketing mix contribute to creating the image, so continually revisiting the marketing mix to ensure that consumers are getting the overall product they want is vital. The goal of any business to consumer marketing strategy must be developing customer loyalty among an ever-growing base of customers

Answer 215

any marketing strategy or content that is geared towards a business or organization.

Answer 216

Soft HRM - treats employees as the most important resource in the business and a source of competitive advantage - employees are treated as individuals and their needs are planned accordingly

Answer 217

Hard HRM - treats employees as a resource of the business - strong link with corporate business planning- what resources do we need, how do we get them and how much will they cost?

Answer 218

concentrate on the needs of employees- their roles, rewards, motivation etc

Answer 219

-identify workforce needs of the business and recruit and manage accordingly (hire, move and fire)

Answer 220

- strategic focus on longer term workforce planning -strong and regular two-way communication competitive pay structure, with suitable performance-related rewards -employees are empowered and encouraged to seek delegation and take responsibility -appraisal systems focused on identifying and addressing training and other employee development needs -flatter organisational structure -suits democratic leadership style

Answer 221

- short term changes in employee numbers (recruitment, redundancy) - minimal communication, from the top down - pay- enough to recruit and retain enough staff (e.g. minimum wage) - little empowerment or delegation - appraisal systems focused on making judgements about staff - taller organisational structures - suits autocratic leadership style

Answer 222

Soft - seen as an approach that rewards employee performance and motivates staff more effectively - however, be too "soft" and when all the employee benefits are added up, the cost of the workforce may leave a business at a competitive disadvantage Hard - might result in a more cost-effective workforce where decision making is quicker and focused on senior managers - but a genuinely "hard" approach might expect to suffer from absenteeism and staff turnover and less successful recruitment

Answer 223

a fixed payment to employees based on hours worked. - paid by the hour with a pay packet normally received at the end of each week - often paid to lower-skilled workers or to temporary staff - any additional hour worked normally paid a higher rate on an overtime basis

Answer 224

a fixed annual sum paid monthly to employees - often set on an annual basis but payment is made at end of each month - normally paid to managers or those higher up in a company - a set number of hours is not normally agreed but employment contract requires enough hours worked to get job done

Answer 225

working arrangements where there are a variety of options offered to employees in terms of working time, location, and pattern of working

Answer 226

``` multi-skilling part-time temporary flexible hours home working outsourcing ```

Answer 227

where staff are allowed to carry out a variety of tasks rather than specialise multi-skilling enables greater use of job rotation common in service industries e.g. retail, hotels puts a greater requirement on training

Answer 228

A part-time worker will work less than 35 hours per week. part time hours allow people to fit work in alongside other commitments. This can help bring people into the workplace who may offer excellentskills and experience but are unable to commit to full time work. temporary are employed on short-term contracts, meaning that if the employer no longer needs them, the contract is not renewed.

Answer 229

is where staff vary the hours they work to meet both the needs of the business and to some extent their own needs. The business can match staff working hours to periods of demand from customers. This is the staffing basis of companies such as the taxi firm Uber.

Answer 230

involves the employee carrying out all or part of their job at home without the need to attend the business' premises. The business can reduce the cost of providing space for employees to work. however, staff may be less productive as the business is not able to supervise the work effectively

Answer 231

involves delegating one or more business processes to an external provider, who then owns, manages and administers the selected processes to an agreed standard. it has become increasingly common for more complex businesses that want to focus on their core activities. It is also common to find smaller businesses outsourcing administrative functions until they have reached a size that justifies having specialist skills on the payroll.

Answer 232

where the business does not guarantee any work to the employee until they can see that the demand is there to need them. The business can match demand from customers with the employees to meet that demand very precisely. However, employees become demotivated as they may feel under valued, particularly if they do not get regular hours.

Answer 233

- savings on costs- can make substantial savings on overheads if it doesnt have to provide office and other accommodation for fo many employees or if staff can work from home - helps with recruitment and staff retention- flexible working results in better satisfaction and higher staff morale - reflects the changing profile of the UK workforce- more women in the labour market and an ageing population= a result in increasingly common for staff to have caring responsibilities outside work - takes advantage of developments in technology- simple and cost effective for employees to be able to access their employers online and other networked systems, and to communicate digitally with colleagues - an increasing need for businesses to offer extended opening hours - increasingly, the law allows certain groups of employees the legal right to request flexible working

Answer 234

- additional ministrative work and "red tape" involved in setting up and running flexible working - potential loss of customers if key employees reduce their working hours - lower employee productivity (potentially) - inability to substitute for certain skills if certain employees are absent - managers finding it difficult to manage or adminster the flexibility

Answer 235

dismissal (aka. firing or sacking)= is the termination of employment by an employer against the will of the employee redundancy= employees are made redundant when a business needs to reduce the size of itsworkforce or even close. Redundancy can be voluntary

Answer 236

- break of contract or other unacceptable behaviour or performance

Answer 237

employee loses job because job is no longer required by the business

Answer 238

- when a single worker negotiates their working conditions and pay with management. issues can include: - pay - holidays - bonuses - any introduction of new working practises and other changes in the workplace it can reduce conflicts between the two parties as they discuss the issue directly and understand each other's position on the employment contract. However, the business is often in the dominant postion to dictate the terms of the negotiations

Answer 239

- employees and workforce representatives; for example, this could be through a trade union e.g. UNISON. Trade unions act to protect and improve the economic and working conditions for their members - occurs when an employer deals with one or a few worker representatives for the whole workforce when discussing problems, or negotiating pay rises or changes to working conditions

Answer 240

It arises when employees are part of a formal structure for involving them in the decision-making process of a business.

Answer 241

- proposed redundancy programmes - when employees are transferred from one employer to another - changes to pension arrangements - proposed changes to working time arrangement

Answer 242

- make employees' views known to management - strengthen both management's and employee's understanding of workplace issues and other matters affecting the business - create an atmosphere of mutal trust between employees and management and therefore improve workplace retentions

Answer 243

+ increased empowerment and motivation of the workforce + employees become more committed to the objectives and strategy of the business + better decision- making because employee experience and insights taken into account + lower risk of industrial disputes - time-consuming - conflicts between employer and employee interests may be a block to essential charge - managers may feel their authority is being undermined

Answer 244

- better productivity - better quality - lower levels of absenteeism - lower levels of staff turnover - lower training and recruitment costs - reliable and loyal staff

Answer 245

- protect and improve the real incomes of their members - provide or improve job security - protect workers against unfair dismissal and other issues relating to employment legislation - lobby for better work conditions - offer a range of other work-related services including support for people claiming compensation for injuries sustained in a job

Answer 246

the process of finding and hiring the best qualified candidate for a job opening, in a timely and cost-effective manner

Answer 247

application interview asssessment days in-tray activities

Answer 248

business expansion due to... - increasing sales of existing products - developing new products - entering new markets existing employees leaving... - to work with competitors or other local employers - retirement,sick leave, maternity leave - business need new skills - business is relocating- and not at all of existing workforce want to move to new location

Answer 249

- lost output from replacing an employee | - logistical cost of running a recruitment and selection process

Answer 250

a detailed explanation of roles and responsibilities of post advertised most applicants will ask for this before applying for a job refers to post available rather than person

Answer 251

drawn up by the business sets out qualifications, skills, experience and personal attributes a successful candidate should possess vital tool in assessing suitability of job applicants refers to person rather than post

Answer 252

INTERVIEWS - common method - face to face or telephone - offer a chance to hold a conversation, allowing follow-up questions TESTING AND PROFILING - attempting to bring objectivity to the selection process, aptitude tests can uncover skill levels in certain tasks - profiling helps identify the personality type of candidates ASSESSMENT CENTRES - invited to attend an assessment centre where a range of selection methods can be combined to better assess abilities and performance - role plays, group tasks, and interviews

Answer 253

``` job title reporting responsibilities subordinates main purpose main tasks employment conditions ```

Answer 254

internal recruitment -promotion, reorganisation external recruitment - job centres - advertisements - recruiting agencies - headhunting - personal recommendation

Answer 255

- better productivity - higher quality - more flexibility through better skills - less supervision required - improved motivation - better recruitment and employee retention - easier to implement change in the business

Answer 256

- training uses up valuable resources; opportunity cost - means employees are unavailable to the business at that time - once trained employees often leave for better jobs - some managers avoid training because it lessens their control - benefits may not be noticed for quite a while

Answer 257

asssuming training is effective... - employees feel more loyal to firm - shows that business is taking an interest in its workers - provide employees with greater promotional opportunities - enables employees to achieve more at work

Answer 258

- cheaper and quicker - people already familiar with business and how it operates - provides opportunities for promotion

Answer 259

-business already knows strengths and weaknesses -limits number of potential candidates -no new ideas may cause resentment amongst candidates not appointed -creates another vacancy which needs to be filled

Answer 260

- outside people bring new ideas - larger pool of workers from which to find best candidate - people have a wider range of experience

Answer 261

- longer process - more expensive due to advertisements and interviews - selection may not be effective enough to reveal best candidate

Answer 262

where an employee learns/develops skills whilst doing the job

Answer 263

- demonstration/instruction; showing trainee how to do the job - coaching - job rotation; trainee given several jobs in succession, to gain experience of a wide range of activities - projects; employees join a project team; gives exposure to other parts of the business

Answer 264

- generally most cost effective - employees are actually productive - opportunity to learn whilst doing training alongside real employees

Answer 265

- quality depends on ability of trainer and tie available - bad habits might be passed on - learning environment may not be useful - potential disruption to production

Answer 266

- wider range of skills/qualifications can be obtained - can learn from outside specialists/experts - employees can be more confident when starting job

Answer 267

- more expensive - lost working time and potential output from employee - new employees may still need some induction training - employees now have new skills/qualifications and may leave for better jobs

Answer 268

training that takes place away from the workplace. - day or part-time attendance at college - professional development courses or conferences - online training/distance learning

Answer 269

introducing employees to job, their new colleagues, premises and to values, and aims of the business.

Answer 270

- learning about new new duties of job - meeting new colleagues - seeing layout of premises - learning values and aims of business - learning about internal workings and policies of the business

Answer 271

- familiarise new recruits with the layout, health and safety, and security systems within a firm - make staff as fully productive as soon as possible

Answer 272

-This is a system in a business where employees are ranked due to their status and authority -Traditionally those at the top of the hierarchy are more important than those at the bottom -Employees during their career will seek to move up the hierarchy to improve their salary and working conditions

Answer 273

- authority and responsibility; who is responsible for who? - individual job roles and titles - the people to whom others are accountable - the formal routes through which communication flows in the business

Answer 274

-it’s the number of people that a manager is responsible for. -where there are narrow spans of control there will be a tall hierarchy and jobs will be very specialised. -a wide span of control will mean a flat hierarchy and employees will be given more responsibility and larger roles.

Answer 275

-In a hierarchy this is the flow of tasks, information and delegation down from manager to subordinates. -Those at the top have more power and authority -They can delegate tasks to those subordinate to them in the hierarchy (below them) -Complaints and status reports flow up the chain, orders flow down the chain. Both need to be handled at the lowest level possible.

Answer 276

- Allows for closer supervision of employees - Managers workload will be more manageable - Helps more effective communication

Answer 277

- Demotivated workers if they feel ‘micromanaged’ - Demotivated workers since unlikely to be given any decision making power - More layers in the hierarchy may be required

Answer 278

- More opportunities for promotion | - Better horizontal communication due to narrow span of control

Answer 279

- Takes longer for communication to pass through the layers | - Less delegation may reduce motivation

Answer 280

Delegation is the transfer of authority down the chain of command. Managers use their authority and power to assign tasks to subordinates lower down the chain of command.

Answer 281

- Eases workload of managers - Managers freed up to think more strategically - Motivating to workers who get to make decisions - Workers may make better decisions as they are closer to customers

Answer 282

- Managers may lose control over decisions and the business may lose direction - Some workers may not want the ability to make -decisions - Some workers may lack the skills, knowledge or experience to make effective decisions

Answer 283

Authority is the power of an employee to instruct subordinates, make decisions and control the use of resources

Answer 284

Centralisation is when the responsibility for decision making is maintained, by a limited number of senior managers, at the top of the hierarchy.

Answer 285

- Quicker decision making - Easier to remain focused on pursuing objectives - Manager maintain control

Answer 286

- More bureaucratic - Local or junior managers are likely to much closer to customer needs - Lack of authority down the hierarchy may reduce manager motivation - Customer service misses flexibility and speed of local decision-making

Answer 287

Decentralisation is when the responsibility for decision making is delegated to a number of middle managers throughout the hierarchy

Answer 288

Improved worker motivation which could reduce labour turnover Allows senior managers to think more strategically Develops skills of junior employees Junior employees understand customer needs more

Answer 289

- Maybe a loss of focus/direction if junior employees make decisions - Loss of control by senior managers

Answer 290

- Attitudes and priorities of leaders and their preferred leadership styles - Organisational design - The skills and attitudes of the workforce - The nature of the decisions to be made - Legal form - Business objectives - Response to changes in technology - Degree of confidence and stability in the economic environment

Answer 291

- Vertical communication is improved | - Staff given greater responsibility due to more delegation

Answer 292

- Horizontal communication less effective due to wide span of control - Fewer opportunities for promotion

Answer 293

A matrix structure is one where teams are put together from different functional areas to work on specific projects Advantages - Communication across functional areas - Range of view points considered - Functions support and understand each other - Motivational Disadvantages - Potential loss of control - Dependent upon effective delegation - Teams may take time to work together effectively - Can cause conflict – which line manager takes priority (the functional or project one)?

Answer 294

- More opportunities for promotion | - Better horizontal communication due to narrow span of control

Answer 295

- Takes longer for communication to pass through the layers | - Less delegation may reduce motivation

Answer 296

- Pace of the market - Level of competition in the market - Changing needs of customers - Pace of external (PESTLE) change - Cost saving (i.e. job losses) - growth of business - employee motivation needs boosting - customer service or/and quality improvements

Answer 297

- manager and employee resistance - disruption and de-motivation-costs - negative impact on customer service/quality

Answer 298

removing layers of management from the hierarchy of the organisation

Answer 299

- lower management costs - faster decision making - shorter communication paths - stimulating employee innovation

Answer 300

- wider span of control; too wide? | - potential loss of management expertise

Answer 301

He believed in a “fair day’s pay for a fair day’s work” - He also believed that employee would do the minimum amount of work if not supervised - He carried out time and motion studies The implications of Taylor's theory for managing behaviour at work were: -The main form of motivation is high wages, higher wages equalled higher output -A manager's job is to tell employees what to do -A worker's job is to do what they are told and get paid accordingly

Answer 302

He changed the working conditions such as break times and duration of the ladies who worked in the relay assembly room at the factory -Found that just by being studied; the employee’s levels of motivation increased -Working in teams was more important than money -Non-financial motivators were the most important -Boring and repetitive work can be a demotivator

Answer 303

- better communication between managers and workers - greater management involvement in employees working lives - working in groups or teams

Answer 304

-there are five levels of human needs which employees need to have fulfilled at work (in order from bottom to top) - physiological needs; food, water, shelter - safety needs; secure job, safe working conditions - social needs; facilities like staff rooms, canteens and social areas, teamwork - esteem needs; responsibility and promotion,positive feedback - self actualisation; giving staff opportunity to develop and have a say

Answer 305

- better productivity - better quality - lower level of absenteesim - lower levels of labour turnover (employees leaving) - lower training and recruitment costs - reliable and loyal staff

Answer 306

- salaries and wages - piece rate - commission - performance related pay - profit sharing - share ownership

Answer 307

- delegation - consultation - empowerment - team working - flexible working - job enrichment - job rotation - job enlargement

Unit 1- Marketing and People Flashcards

(331 cards)