UNIT 2 [abigail] Flashcards
(173 cards)
1
Q
What is marketing?
A
Marketing is the process responsible for identifying, anticipating and satisfying customer requirements profitably.
2
Q
What is the purpose of market research?
A
To understand consumers’ opinions on the likes of pricing and packaging and ensures the business is providing the products which the consumers are most likely to buy.
3
Q
What is secondary research? Give examples.
A
Secondary research, also known as desk research, is done using information which had been collected by external sources previously. Examples include the business’ internal financial and sales records, newspapers and government publications.
4
Q
What are some advantages of secondary research?
A
-Information is cheap to obtain
-Available immediately [less time consuming]
-If it is from a reliable source then it will be accurate & well researched.
-Data available covers a wide range of sources.
5
Q
What are some disadvantages of secondary research?
A
-May not reach the firm’s requirements exactly as it is unlikely to have been collected for the exact same reason.
-Information could be outdated.
-Information is available to all competition.
6
Q
What is primary research? Give examples.
A
Primary research, also known as field research, is the collection of original information by the business and is carried out by making direct contacts with the consumers. Examples include questionnaires/interviews/surveys, consumer panels, testing, observation.
7
Q
What are some advantages of primary research as a whole?
A
-The business can design the research in the best way to discover the particular information it needs.
-Information gathered is up to date.
-Can be analysed easily.
8
Q
What are some disadvantages of primary research as a whole?
A
-Designing the research, gathering the information and analysing it can be slow and time consuming.
-It is specialised work so businesses often employ specialist researchers which can be expensive.
9
Q
What are the advantages of questionnaires/surveys/interviews?
A
-Designed to find out exactly what the business requires.
-Taken directly from the business’ consumers and potential consumers.
-When face-to-face, the questioner can help the member of the public understand the question.
10
Q
What are the disadvantages of questionnaires/surveys/interviews?
A
-Some resent being stopped and questioned on the street or telephoned at home.
-Questions may be misunderstood which gives misleading answers and therefore less accurate results.
-Slow method which can be expensive, not entirely suitable for smaller businesses.
-Postal questionnaires have a low return rate.
11
Q
What are questionnaires/surveys/interviews?
A
Probably the most common method of primary/ field research. Includes stopping members of the public on the street, phoning them or even can be submitted postally.
12
Q
What are the advantages of observation?
A
-Not costly
-Consumers may not even be aware that it is happening.
13
Q
What are the disadvantages of observation?
A
-Less accurate and open to interpretation
-Not suitable for all products
14
Q
What is observation?
A
A form of primary/field research which involves watching or observing people’s reactions to products, e.g., people may be observed of their selection of goods in a supermarket.
15
Q
What are the advantages of consumer panels?
A
-Very detailed information can be gathered.
-Panel members are skilled & impartial (unbiased).
16
Q
What are the disadvantages of consumer panels?
A
-Expensive so only suitable for large companies
17
Q
What are consumer panels?
A
This form of primary/ field research involves taking responses from people sitting on a panel who give their opinions on given products or other information. Panel members are paid and selected for their expertise or knowledge in the area.
18
Q
What are the advantages of testing?
A
-Straightforward to organise
-Firsthand opinions are given
19
Q
What are the disadvantages of testing?
A
-May not test a cross-section of the public.
-Not suitable for all products.
20
Q
What is testing?
A
This type of primary/field research involves members of the public being given samples of the product and being asked for their opinions on it. Frequently used in supermarkets for the likes of a launch for a new cheese.
21
Q
What is qualitative data?
A
Words and opinions, i.e. giving quality answers.
22
Q
What is quantitative data?
A
Data in the form of numbers and figures, e.g. percentages.
23
Q
What is random sampling?
A
Random sampling is where people are randomly selected to be asked for their opinions on a product.
24
Q
Give some advantages of random sampling:
A
-Personal opinions are given by those surveyed.
-Everyone has a chance to be chosen.
-Random surveys are easily organised and cheap.
25
Give some disadvantages of random sampling:
-Results may not be very accurate without a large sample.
-This method is unsuitable for some products.
-May not reach the most appropriate people.
26
What is quota sampling?
Quota sampling is where interviews are held with a set number of people who fall into pre-determined categories & reflect the type of product.
27
Give some advantages of quota sampling:
-Results are more accurate than in random sampling.
-It is more likely to reach the more appropriate people.
-Personal opinions are given by those surveyed.
-Everyone in the particular category has a chance of being chosen.
28
Give some disadvantages of quota sampling:
-The composition of the area’s populations must be known in order for the correct proportions to be interviewed.
-this method is unsuitable for some products.
29
What is market segmentation?
Splitting the market up into groups of people who have the same characteristics as it makes it much easier for a business to target specific groups and to design the appropriate marketing mix.
30
What is a market segment?
A group of customers that have a similar characteristic and want a similar product/ service.
31
Give examples of ways the market can be segmented:
Age, Gender, Income/ Socio-Economic Class, Geography/ Area, Ethnic/Cultural/Religion
32
Why can the market be segmented by age?
Product demand can be significantly altered through age as trends and styles are preferred by different age groups, e.g. an elderly person will not want to wear the same clothes that a teenager would. This is why many products are designed to fit with this segment such as fashion, movies, magazines, etc.
33
Why can the market be segmented by gender?
In some situations, choice of product is influenced by gender.Research has shown that, in terms of cars, females are more drawn to shape and appearance whilst men prefer features. Also, women typically spend more on cosmetics & jewellery than men.
34
Why can the market be segmented by income/ socio-economic class?
This can decide on the types of goods and services an individual invests in. E.g. a single woman on the same income as a man with 3 kids will spend her money in a completely different way. The amount of disposable income and individual has will greatly influence their choices on how their money is spent.
35
Why can the market be segmented in terms of geography/ area?
Consumers living in different areas of a country, even different countries, have different hobbies, preferences and needs. This affects how they spend their money. E.g. people living in urban areas will have no need for wellington boots while those in the countryside may.
36
Why can the market be segmented in terms of ethnic/ cultural/ religion?
Each race or ethnic group has its own taste in food, music and clothes. Many religions also have different teachings & requirements which the individual will want to observe. E.g. Jewish people only eat Kosher foods.
37
Define Marketing Mix:
The term marketing mix describes all the key activities used in marketing a business’ products. This is frequently referred to as the 4Ps- price, promotion,place and product. [if worth more marks then briefly describe each of the 4Ps.]
38
How does price impact the marketing mix?
The price must be right. This means that it must be high enough to be profitable but low enough to remain affordable for consumers.
39
How does promotion impact the marketing mix?
Methods of promotion must be tailored to fit with the product & its market. E.g. clothes for teens online or expensive rings in a well-known, glossy magazine. The promotion must appeal to the target market so that they are aware of its existence.
40
How does place impact the marketing mix?
The goods must be sold in the right place.This means that the goods/ services are available when and where the consumers want to purchase them.
41
How does product impact the marketing mix?
The product must be designed to suit its target market as well as be good quality, functional well and have effective packaging.
42
Name 3 types of pricing:
Skimming Pricing, Penetration Pricing and Competitor-Based Pricing.
43
Describe Skimming Pricing:
-Initially setting a higher price because some people would be willing to pay this as the product is new and unique.
-Most often used and is only suitable for new products where there is little competition in the market.
-High initial costs give the impression of high quality.
-Danger is that some people will be deterred by the high price and wait for it to fall.
44
Give the benefits of skimming pricing:
-Profit margins are high.
-Can give the impression of high quality.
45
Give the drawbacks of skimming pricing:
-Consumers may be deterred by the high price and wait for it to fall.
-New competitors may introduce similar products at a lower price which can put pressure on the original business to lower prices too.
-Can only be used for new products with little competition in the market.
-High prices may limit demand.
46
Describe Competitor-Based Pricing:
-Where the business simply accepts and mirrors the prices which its competitors are charging per product.
-Means charging equally or slightly less [to gain some advantage over competitors].
-Would operate in a market in which there is strong competition and involves close monitoring if prices are amended.
-Used in highly competitive markets like the chocolate or bread markets.
47
Give some benefits of competitor-based pricing:
-Essential to remain competitive in the market.
-Improve sales as prices are attractive to consumer.
-Learn from larger brands.\-Ensures business is keeping up with its competitors.
48
Give some drawbacks of competitors-based pricing:
-Products don’t stand out.
-Profits can be lower.
-Costs money to pay specialist staff to closely monitor competitors’ prices and it takes up time.
-Price changes are hard to keep up with.
-Lost opportunities of skimming higher profit lines.
-Could lead to price wars.
49
Describe Penetration Pricing:
-When a low price is set at the beginning in order for a new business to gain entry into an existing market.
-After a place in the market has been secured, the price is increased to make further & larger profits.
-In order to attract consumers to the new business (and steer them away from competitors), they attract them with low prices. The idea is that customers will remain loyal and then prices can be raised.
-This ensures sales however it can only be used in the short term as low prices could lead to minimal profits and potential struggle to survive.
50
Name the factors which affect price:
Demand, Quantity of Inventory, Cost of Production, Seasonality, Need to Make a Profit, Competition In The Market , Price Which The Market Can Bear.
51
How does demand affect price?
If demand is higher then the firm can charge a greater price. If it is lower then a low price could make the product more appealing.
52
How does quantity of inventory affect price?
Storing inventory in a warehouse costs the business money so a sale is held to clear it.
53
How does cost of production affect price?
To make a profit, charges like raw materials and factory overheads must be covered.
54
How does seasonality affect price?
Demand is greater while the product is in season so then the price is higher but when demand drops as the product is no longer in season so does the price. Seen with costumes at Halloween and toys at Christmas.
55
How does competition in the market affect price?
Prices should be set at a level which drives customers away from competitors. Without competition, a firm can price their products higher as there are not yet any alternatives on the market.
56
How does price which the market can bear affect price?
Luxury clients with a high socio-economic class can afford higher prices but a market with less disposable income cannot.
57
How does need to make a profit affect price?
The overall aim of any private sector business is likely to be high profits. A higher price makes more profit but may not be the most profitable as customers could be deterred by the prices.
58
Describe the relationship of price and demand:
When price increases, demand decreases. However, when price decreases, demand increases. They have an inverse relationship.
59
Give examples of ways to change demand:
1. Price being charged.
2. Consumers’ tastes and fashion.
3. Level of income.
4. Price of other goods.
5.Advertising.
6. Credit rates.
60
Describe how price being charged can alter demand:
If the price is higher, then the demand is typically lower.
61
Describe how consumers’ taste and fashion can alter demand:
If a product becomes trendy or popular, demand will increase. However, if it is seen as outdated and not in trend then demand will be lower.
62
Describe how level of income can alter demand:
As an individual’s income increased they can afford more. However, consumers would be more likely to buy better quality goods over a larger quantity.
63
Describe how price of other goods can alter demand:
Some foods are substitutes for others such as if the price of rice increased then people would eat pasta. Additionally, complementary foods such as when fish is cheaper people will also buy potatoes because fish and chips go together.
64
Describe how advertising can alter demand:
If successful, promotion can cause an increase in demand as it makes more people aware of the product.
65
Describe how credit rates can alter demand:
When the lending rate is low, people will be able to borrow more from banks and building societies therefore demand for goods will increase as more is bought.
66
What are the 5 stages of the product life cycle (in order)?
-Research and Development
-Introduction
-Growth
-Maturity and Saturation
-Decline
67
Describe the Research and Development stage of the product life cycle:
This is the stage before the product is released. Market research & product testing takes place during this time. It can be very costly,e.g. developing a new car. No income is being made and the business is currently incurring a loss.
68
Describe the Introduction stage of the product life cycle:
Marketing & Promotion are extensively used during this stage in order to make the public aware of the product/service. Sales would be slow for all products at this stage other than low priced goods with successful marketing (e.g. fast fashion) or high fashion goods (iPhone). However, sales for expensive items like cars would be slow. The product would still not be in a profit making position as it would still be trying to cover costs from R&D.
69
Describe the Growth stage of the product life cycle:
The sales of the product rapidly grow at this stage as more people will become aware of the product and have tried it, customer loyalty may also start to form. Sometimes during this stage profits will be lowered as other competitors have entered the market. Increased sales will raise the product to a profit making position.
70
Describe the Maturity/ Saturation stage of the product life cycle:
Levels are maintained & the product has an established place in the market. Competition becomes very intense during this time and it is difficult to increase sales’ volume- more advertising could be used potentially. The length of this stage may vary but profits are highest and r&D for another product should begin.
Highest point for the product. Although competition is intense, new competitors are unlikely. New customers cannot be found but some may be attracted to the new advertising and lower prices. The weakest products start to drop out which prolongs this stage for others. Profits are good but not growing.
71
Describe the Decline stage of the product life cycle:
This is the final stage in the life of a product. Sales have fallen to such an extent that they are not covering the manufacturing costs and the product is therefore unprofitable. Further advertising or price reductions would not be successful. Though some products could remain at this stage for a long tine (e.g. Horlick) but others (e.g. last year’s fashion) could be sold for any price and their decline is fast.
72
Give some extension strategies for the Product lifecycle:
-Expansion
-New varieties
-Updated editions
-Modifications
-Altering Packaging
-Price reductions
-Rebranding
-Exporting
73
Describe expansion as an extension strategy for the product lifecycle:
Expanding to introduce a new range of products e.g. cleaning products expanding from just kitchen to kitchen and bathroom.
74
Describe new varieties as an extension strategy for the product lifecycle:
Seen with Coca Cola introducing healthier varieties including Diet Coke and Coke Zero.
75
Describe updated editions as an extension strategy for the product lifecycle:
Including signed books or film editions with deleted scenes.
76
Describe modifications as an extension strategy for the product lifecycle:
New attractive features seen with new cars or newest iPhone.
77
Describe altering packaging as an extension strategy for the product lifecycle:
Modern packaging is attractive to a new range of consumers (e.g. Horlicks).
78
Describe price reductions as an extension strategy for the product lifecycle:
Reducing prices allows the business to deter customers from competitors and become allow their products to be more affordable to consumers.
79
Describe rebranding as an extension strategy for the product lifecycle:
Rebranding (e.g. Musicl.ly to Tiktok) allows for the modernisation of the brand as a whole to drive for more attention and renovating the entire brand allows for opportunities to profit on both old and new customers.
80
Describe exporting as an extension strategy for the product lifecycle:
Available to a new range of consumers who have never had access to the good/service before which bring new attention and a new customer loyalty base.
81
Describe the Consumer Protection Act:
-Published in 1987
-Goods supplied must be safe; any product unsafe is deemed to be defective.
-A supplier who supplies goods which are defective & result in a personal injury can be sued for damages, even if the goods were imported.
-Consumers must use the product supplied in accordance with the instructions provided and observe the warnings associated with the product.
-Local authorities can seize unsafe goods & confiscate them.
-Suppliers may not mislead consumers in relation to product prices.
82
Describe the Consumer Rights Act:
-Published in 2015
-Goods supplied must be of ‘satisfactory’ quality- that is produced properly and safely, free from any defects.
-Goods supplied must be ‘fit for purpose’ for which they were supplied.
-Goods must match the description applied to them.
-Services supplied must be provided with ‘reasonable care & skill’ at a reasonable price and within a reasonable time scale. Where service delivery is unsatisfactory, a provider must re-supply the service at no additional cost.
83
Define promotion:
Promotion is the process by which businesses inform customers about their products & encourage them to buy those products.
84
What are the 4 methods of promotion?
Advertising, Sponsorship, Sales Promotion, Public Relations
85
Describe advertising:
-Introduce a new product to the public and encourage sales.
-Target a new segment of the market thereby increasing their market share.
-Remind the public about an existing product and boost sales.
-Provide information about products and events.
-3 types: generic, informative and persuasive.
86
What is generic advertising?
-Unspecific and targets all.
-Eg health adverts to persuade the public to drink milk.
87
What is informative advertising
-Purely factual and its intentions is to provide information.
-Eg date and time of an event.
88
What is persuasive advertising?
-Inends to persuade individuals to purchase the product.
-Eg a new fashion good.
89
Give one advantage and one disadvantage of newspapers as a method of advertising:
-A: Can reach a large market.
-D: Expensive.
90
Give one advantage and one disadvantage of shop window displays as a method fo advertising:
-A: Immediately impactful due to visuals.
-D: Limited to local markets.
91
Give one advantage and one disadvantage of the internet as a method fo advertising:
-A: Fast-growing.
-D: Cannot be accessed by all.
92
Give one advantage and one disadvantage of demonstrations as a method fo advertising:
-A: Expert gives good impression.
-D: Can be expensive to hire an expert.
93
Give one advantage and one disadvantage of trade journals/magazines as a method fo advertising:
-A: Easy to target audience (eg ad for a new car in a car magazine)
-D: Not as common.
94
Give one advantage and one disadvantage of ehicles as a method fo advertising:
-A: Can be widely viewed.
-D: On the side of a bus so message is limited.
95
Give one advantage and one disadvantage of television as a method fo advertising:
-A: Glamorous and entertaining.
-D: Costly- approx. 1 000 pounds per viewing second.
96
Give one advantage and one disadvantage of carrier bags as a method fo advertising:
-A: Cheap
-D: Less popular due to growing focus on sustainability.
97
Give one advantage and one disadvantage of cinema as a method fo advertising:
-A: Suitable for local shops.
-D: More restricted than TV & Radio.
98
Give one advantage and one disadvantage of hoardings & posters as a method fo advertising:
-A: Immediately visual impact.
-D: Limited to short messages.
99
Give one advantage and one disadvantage of exhibitions & trade fairs as a method fo advertising:
-A: Aimed at a specific market.
-D: Can be costly to rent staff.
100
Give one advantage and one disadvantage of mail as a method fo advertising:
-A: Visual Impact
-D: Seen as ‘junk’ and thrown out without reading.
101
Give one advantage and one disadvantage of radio as a method fo advertising:
-A: Cheaper than TV.
-D: Not as popular with youth.
102
Define sales promotion:
An overall term covering all methods which are used to persuade the customer to purchase the product.
103
Describe discounts:
-Commonly used sales promotion
-Eg 20% off
-Customer attracted by low price.
104
Describe special offers:
-Commonly used sales promotion.
-Customers attracted by deal so sales increase.
-Eg BOGOF
105
Describe loss-leaders:
-Sales promotion
-Price of one or two items is drastically reduced (maybe to the point of no profit).
-This attracts customers in band hopefully they are encouraged to buy other, full priced goods.
-Commonly bread.
106
Describe price reductions:
-Sales promotion.
-Price of product is temporarily reduced.
-Improves sales.
107
Describe money-off coupons:
-Sales promotion
-EG sent in the post or in newspapers.
-Have to buy again to take advantage of offer.
-In this way, the company’s sales are doubled.
108
Describe competitions:
-Sales promotion
-Encourage customers to buy product by printing entry forms for a competition in the packaging eg cereal
-Prize is appealing eg a car or luxury holiday
109
Describe customer loyalty cards:
-Sales promotion
-Swiped at checkout and points are added digitally.
-Points can be exchanged for goods in store.
-Encourage repeat custom.
-Eg Boots advantage card or M&S Sparks Card.
110
Describe free samples:
-Sales promotion
-Sometimes customers are asked to sample goods in store.
-Eg cheese.
-Designed to introduce a customer to the product so they buy it.
111
Describe free gifts:
-Sales promotion
-Encourage customers to buy one product from a special display.
-Area allocated and special display stands used to draw attention to the product.
112
Describe point-of-sale displays:
-Sales promotion
-Encourage customers to buy one product from a special display.
-Area allocated and special display stands used to draw attention to the product.
-Display may include a demonstration displaying benefits.
-Eg kitchen collection
113
Describe price guarantees:
-Sales promotion
-In the likes of Tesco promise if a good is cheaper elsewhere then they will refund the difference.
114
Describe after sales service:
-Sales promotion
-Encouraging for expensive items
-Eg computer.
-Confidence at assistance is available if required.
115
Describe sponsorships.
It is common for businesses to sponsor sports, charity and school events.
This portrays the business to be invested in its local immunity and public spirited.
The business donates the funds necessary to run the avert and, in return, the players wear kit displaying the logo. The company name is usually emblazoned around the sports field. Provides wide publicity, especially if the event is televised.
116
Describe PR:
Any activity under the heading of Public Relations is one where the public’s awareness of the company is raised and the company is displayed in a positive light. This good impression creates loyalty with the public,increasing their likelihood of purchasing from the business.EG sizeable sums donated to charity or a contribution towards famine relief.
117
Describe the Trade Descriptions Act 1968:
-Prohibits manufacturers, retailers and service providers from giving false or misleading descriptions for the supplying of goods or services. It covers information about: their quantity or size, their method of manufacture or testing, the place and date of their manufacture and the people who manufactured them.
-Includes both goods and services.
-Ensures prices are genuine; if products are described as ‘reduced’ in a sale then they must’ve been on sale at a higher price for at least 28 consecutive days in the last 6 months.
-Otherwise, sales bargains may only be described as ‘special purchases’.
-The TDA also states that the country of origin must appear on the packaging of all imported goods.
-Descriptions may be either written, pictorial or oral.
-Any breaches of the TDA may incur fines or imprisonment.
118
Describe the Advertising Standards Authority:
-An independent body set up to monitor all advertisements which are not broadcast.
-Regulates all advertising in magazines, internet and much more.
-The ASA’s basic principles are to make sure all advertisements are: legal,decent, honest and truthful; prepared with a sense of responsibility to consumers and society; in ine with the principles of fair competition.
-Its basic function is to ensure that nobody is misled or offended by advertisements.
-To fulfill this, the ASA carries out regular spot checks on approx. 10 000 advertisements each week & will ask a company to either withdraw or amend and advertisement which doesn’t comply with its principles.
-The ASA does not have legal power to make a company withdraw or amend its advertisement. Its main sanction is to ask publishers to refuse more space for an advertisement until its terms have been upheld.
-Despite this, many firms seek the ASA’s approval before publication to save them from potential expense or a damaged reputation.
-In the case of continued offences, the ASA will refer an advertiser to the OFT who can legally prevent similar advertisements from being published in the future.
-They also deal with approximately 12 000 complaints per year.
119
What does OFT stand for?
Office of Fair Trading
120
Describe OfCom:
-The Office of Communications is an independent organisation which regulates the communication industries in the UK.
-Its duty is to protect consumers from harmful or offensive material on TV, radio and the airwaves over which wireless devices operate.
-Its basic principles are to make sure that all communication: adheres to rules on taste and decency; is impartial; doesn’t give offence or cause harm; supports market growth and competition; sets high technical standards.
121
Give two advantages of social media as promotion:
-It is free (suitable for all business sizes)
-Gives the business information on business opportunities and trends
122
Give two disadvantages of social media as promotion:
-Dissatisfied customers can protest strongly and possible damage the image of the business.
-As social media is conversational, there must be someone online at all times in the business to interact with its online audience.
123
What is place?
How a product is distributed to the consumer at a convenient location and at the appropriate time.
124
Name five factors which can affect distribution:
-Type/value of goods (expensive, fragile,etc)
-Speed (goods may be perishable)
-Costs involved.
-Geographical coverage of the distribution channel
-Reliability of the distribution channel.
125
Name four parties involved in distribution:
Manufacturer/Producer, Wholesaler, Retailer, Consumer
126
In terms of distribution, who is the manufacturer/producer?
The manufacturer or creator of goods in vast quantities.
127
In terms of distribution, who is the wholesaler?
The link between the producer and retailer. The wholesaler buys products from the manufacturer in bulk and sells them to retailers in smaller quantities.
128
In terms of distribution, who is the retailer?
The retailer makes goods available for the customer at a convenient place and further reduces the size of products available.
129
In terms of distribution, who is the consumer?
The final user of the product. The consumer would buy small, usable amount of the product and regularly replace them.
130
Describe the direct channel of distribution:
-Manufacturer to consumer.
-Only suitable for some goods.
-Eg fresh produce at a farmers’ market or luxurious one of a kind items such as art.
-Also includes services like hairdressing.
131
Describe the modern channel of distribution:
-Manufacturer to retailer to consumer.
-Used by large retailers like Tesco.
-They are able to bulk buy from the manufacturer and can store large quantities of inventory.
-Not suitable for smaller business without warehouse space.
132
Describe the traditional channel of distribution:
-Manufacturer to wholesaler to retailer to consumer.
-2 intermediaries before the product reaches the consumer. (Costly and dependent)
-Used by small retailers who do not have huge storage facilities or the finance to bulk buy.
133
Give some ways to provide customer service:
-Make a customer feel valued- aware fo their needs and tried to meet them.
-Listens to customer views seriously and tries to act on them.
-Rectify situations where complaints have been made and exchange faulty goods where necessary.
-Provide high quality, reliable and safe goods.
-Disabled facilities are available conveniently.
-Available assistance for disabled customers.
-The business environment is clean and welcoming with clear signage.
-Employees are well-trained, skilled and helpful.
-Provide after-sales service such as im details delivery or installation.
134
Give some strategies used to manage competition:
-Pricing: businesses will use effective pricing strategies such as competitive pricing.
-Product: they will expand their range of goods to ensure that their product’s quality is at least as good as that of their competitors. They will ensure they have effective inventory control.
-Customer Service: they will try to beat their competitors by providing a better service.
-Promotion: they will advertise widely. They will use promotional offers like discounts.
135
Describe competition’s impact on the marketing mix;
-Product: quality will be high to appeal to consumers. Range of goods has to be greater than competitors’.
-Price: competitive pricing strategies will be used. Special offers may be introduced. Price must be policed in accordance to the social area.
-Promotion: constant advertising is required to attract and retain customers. Promotional offers like discounts are used, Good customer service and attractive packaging are also very important.
-Place: products must be available in store when required (good inventory control) Have to be in a convenient place and in an appropriate cultural/ social area.
136
What are the advantages of international trade?
-Increased Market & Profits: Through IT, a business can sel goods in increased quantities which leads to greater profits.
-More employment: Increased sales lead to higher levels of production which create a need for more employees.
-Economies of Scale: Increased production creates opportunities or EoS.
-Greater variety: More options for consumers which generally creates a better standard of living in the country.
-Political Reasons: IT establishes and develops good relations with other countries.
137
What are the disadvantages of International Trade?
-Competition: Market is now global.
-Production: If production reaches full capacity, the firm will have to ensure that increased investment would be economic and viable. Needed for more warehouses, stand, etc.
-Distribution: Distribution channels are more complex so secure packaging and efficient transport systems should be in place.
-Promotional Activity:May have to be odiferous to suit language or cultural preferences.
-Documentation: Businesses sing IT should be familiar with documentation required for sending goods abroad. Especially outside of the EU.
138
How does international trade impact product?
-May have to amend product to suit the country’s legal, traditional and cultural requirements.
-Country’s religious culture must be respected.
-Must suit the country;s technical set up.
-Units of measurement may differ.
139
How does international trade impact price?
-Must reflect what the local area can bear.
-Must cover taxes and duties.
-Has to cover transportation costs.
-Should consider exchange rate.
-Must be quoted in the appropriate currency.
140
How does international trade impact promotion?
-Must be global.
-Text (eg instructions) must be translated appropriately.
-Should consider cultural differences (eg make sure illustrations are not offensive)
-Must be a suitable style for the foreign market.
141
How does international trade impact place?
-Must be available where it is accessible for he target market.
-Suitable transport for overseas.
-High insurance costs o cover risks of loss or damage.
-Climatic conditions result in variation of trading hours.
142
Why may promotion need to be amended in international trade?
-Suit language.
-Must not be offensive
-Take note of religious differences.
-Respect cultural norms
-Be appealing
143
How do transport methods impact place?
-Products must be deleted safely, affordably and punctually to international markets.
-Lightweight items can be sent via surface or air mail so distribution is more flexible.
-However heavier items require shipping or air transport which can be expensive and complex
144
How does e-business impact place?
-Means that business can operate n multiple locations simultaneously without needing physical stores.
-Internet enables direct consumers bypassing traditional distribution channels.
145
Describe the ‘need for cultivation of a wide vision’ as an implication of the global market on the economy:
-Report by the Economic Development strategy Review Group ‘Strategy 2010’ recommends students should have skills in a variety of languages.
-Also mentions other inward investment projects and lines.
146
Describe the ‘need for training and practical experience ’ as an implication of the global market on the economy:
-Crucial in order to avail of marketing opportunities abroad
147
Describe the ‘need to competently use available technology’ as an implication of the global market on the economy:
-Local businesses need to be using modern technology to an equivalent level of any other European region.
-Requires capital investments the technology and training for staff.
148
Describe the ‘stiffer competition for local businesses’ as an implication of the global market on the economy:
-Could result in the closure of some businesses and redundancy of employees.
-Though could be fought with the use of advanced tech and skills, even resulting in increased trade and employment
-The outcome of globalisation is largely determined by how globalisation is regarded and to which degree it is welcome.
-To beat this competition, the business should have a unique product of high quality.
-The product should be priced below competitors with special inducements and a good personal service.
149
Describe the ‘the opportunity for NI to trade equally with all other countries’ as an implication of the global market on the economy:
-Using modern the communication is equally say throughout the world.
-Trading opportunities are equally available everywhere.
150
Name 5 implications of the global market on the economy:
-Need for cultivation of a wide vision
-Need for training and practical experience
-Need to competently use available technology
-The opportunity for NI to trade equally with all other countries.
-Stiffer competition for NI businesses
151
152
Give ways to provide customer service:
-Make a customer feel valued (aware of their needs and tries to meet them)
-Listens seriously to customers’ views and acts on them.
-Rectify situations where complaints have been made and exchange faulty goods.
-Provide high quality, reliable and safe goods.
-Provide information and advice regarding the products so that consumers can make informed decisions.
-Disabled facilities are available conveniently.
-Available assistance for disabled customers.
-The business environment is clean and welcoming with clear signage.
-Employees are well-trances, skilled and helpful.
-provide after-sales service such as immediate delivery or installation.
153
Define E-business:
Electronic business is the online transaction of goods and services and the transfer of funds through digital communications. It involves carrying out business over the internet and operates by linking computer systems between buyer and seller.
154
Describe the advantages of E-business for the business:
● Business can be conducted 24/7
● The business can buy and use products from all over the world
● Increased sales from a worldwide market
● It can increase profits and sales turnover
155
Describe the role of the EU:
Role of the EU
• An economic and political union of 27 member states (as of April 2023)
• Aims to promote social & economic progress among its member states
• All member states represented in the EU Parliament from where Directives are issued
• Membership provides better trading opportunities for businesses in member states and guarantees free movement of goods, workers, and capital
• It is easier to trade across the EU largely due to free introduction of the single market
Set up the following 4 freedoms:
1. Freedom of movement of people and labour
• Citizens of any member state can live and work in any other part
• Professional qualifications should be recognised in any area of the EU
• Social security benefits would be transportable
2. Freedom of movement of goods
• Goods can move freely between member states in the EU without any barriers or payments
• No custom tariffs
• Custom duty is not charged when moving between EU countries
• Increased competition should make goods cheaper for customers
• But may mean competition may lead to inefficient companies would close leading to job losses
3. Freedom of movement of capital
• Currency and capital can flow freely between any area of the EU
• EU citizens can use financial services in any EU country
4. Freedom of movement of services
• Professional services like banking, insurance or advertising can be offered in any EU country
156
Describe the disadvantages of E-business for the business:
● Competition is increased;
● Properly designed websites are essential and expensive;
● E-commerce is not suitable for all goods (fresh fruit and veg)
● The business has to deal with differences in cultures and languages of buyers
157
Describe the advantages of E-business for the consumer:
● It is possible to buy at any time of the day
● Can access websites across the world
● Gives greater chance to shop around
● Lots of information is available on the products
158
Describe the disadvantages of E-business for the consumer:
● Lack of trust over payment systems
● Security issues and hackers stealing personal information
● Shipping and postage costs
● No Guarantee of product quality
● Difficulties with returning items.
159
Describe how e-business supports international trade:
● Allows businesses in NI to purchase raw materials from abroad;
● Opens an international market for home businesses
● Gives businesses a competitive advantage
● Provides excellent promotional opportunities worldwide.
160
Define M-business:
Mobile business refers to new business services and business models using mobile technologies such as smartphones to engage and communication with customers.
161
Give 8 uses of M-Business:
-Mobile commerce
-Mobile payments
-Mobile banking.
-Mobile Marketing & Communications
-Transport and delivery services.
-Games
-Apps
-Mobile ticketing
162
Describe mobile commerce as a use of m-business:
-Businesses can sell directly to their customers online nd through mobile apps o the customer’s phone.
-This makes their products/services easily available to mobile customers which creates new opportunities for the business.
-Some stores provide their staff with mobile devices to handle sales pr customer feedback.
-A retailer may use their mobile devices to check, update and manage inventory levels.
163
Describe mobile payments as a use of m-business:
-Many businesses now accept payment via mobile devices in their physical sores through their point-of-sale systems
-Some businesses are experimenting with technologies that allow customers to make purchases by scanning the product’s barcode.
164
Describe mobile marketing and communications as a use of m-business:
-Allows businesses to communicate with their customers easily eg by sending notifications to their phones.
-Customers can communicate with businesses eg immediate feedback or customer service engaging
165
Describe mobile banking as a use of m-business:
-Simple and convenient.
-Less need for bank branches, saving banks money.
166
Describe transport and payment systems as a use of m-business:
-New transport services are combining mobile payments with location-based technology.
-You can book and pay or a taxi or order a takeaway meal using smartphone apps & have it delivered to your exact location.
167
Describe games as a use of m-business:
-Mobile games now earn more money than any other type of mobile app
-They are more convenient for users than a console and can be played anywhere.
-A new generation of mobile games blends digital images with real world locations.
168
Describe apps as a use of m-business:
-Millions of apps available for smartphone users.
-Many of these use their unique features f smartphones and provide services which could not exist in any their way eg fitness tracker or messaging apps.
169
Describe mobile ticketing as a use of m-business:
-Useful and convenient for concerts, travel, etc
-Easier than remembering physical tickets.
-Eliminates the cost f printing tickets for the business.
170
Give the advantages of m-business for the business:
● Can communicate with customer immediately wherever they are;
● Can accept new forms of payment, giving customers more options;
● Businesses can develop new services that are more convenient, helping them attract more customers;
● Businesses can reduce the costs of doing business, e.g. by reducing the number of staff they have because customers can pay on mobile device rather than over the telephone.
171
Give the disadvantages of m-business for the business:
● Businesses may have to invest in new hardware and software;
● New competition in the market from other mobile firms
● Businesses have to adapt frequently to new innovations – such as payment methods etc;
● Businesses have to design new advertising and marketing to suit mobile devices;
● There may be additional costs associated with training staff etc;
● There are new security needs.
172
Give the advantages of m-business for the consumers:
● Mobile services can be more convenient;
● Customers can access information about products and reviews etc on their device;
● Mobile technologies offer new services that did not exist before – mobile banking
● Mobile communications can make it easier and quicker to communicate with businesses.
173
Give the disadvantages of m-business for the consumers:
● Mobile data use can be expensive
● There can be an increased security risk when using mobile devices
● Constant communication from businesses can be unwelcome.
