Flashcards in Unit 2: Developing a Marketing Campaign Deck (131):
What are the principles and purposes of marketing?
1) Anticipate Demand
2) Stimulate Demand
3) Recognise Demand
4) Satisfy Demand
What is anticipate demand?
Marketing aims to work out what customers might want in the future. Market research is used to ask customers questions about products and services. This helps to predict customers' needs and wants.
What is stimulate demand?
Businesses often use advertising and social media to persuade customers that they really want or need a product or service.
What is recognise demand?
Market research can help identify customer needs and wants that are not being met at the moment, and the sort of product or service that might fulfil these needs and wants.
What is satisfy demand?
Businesses carry out market research to find out what customers think of their products and services so that they can adapt and improve them. They also use marketing to make sure customers know where they can buy a product or service.
Give an example of how a cosmetic company might stimulate demand with new products.
Through product trials where samples of new products are often given away with magazines or in-store.
What are the different marketing aims and objectives?
1) Understand customer needs and wants
2) Develop new products
3) Improve profitability
4) Increase market share
6) Increased brand awareness and loyalty
What is an objective?
A simple, short-term goal
What is an aim?
A more complicated, longer-term goal.
Why is it essential to understand customer wants and needs?
Understanding customer behaviour enables a business to operate and develop to serve its customers.
How do supermarkets understand customers wants and needs?
Offer online shopping with home delivery and customer collection.
Often have 24-hour opening
How is developing new products done?
When customers needs and demands are identified the business may find that a new product or service is required. Being the first to offer a product or service can mean massive sales and profit.
What is improve profitability?
More sales can mean more profit.
How is improving profitability done?
Greater profits can be made by setting the selling price much higher than the cost of making the products or delivering the service.
How is marketing done to improve profit?
Marketing can help to convince customers that a higher price means a better quality product.
What is market share?
All businesses have competitors and must fight for their share of the sales.
Why is diversification done?
A business does not want to rely on sales of one product in one market. Demand could fall; competitors might take their market share.
What is diversification? And why is it good?
Offering different products and services in different markets is a good way to make sure that the business survives and continues to grow.
What is a brand?
A brand is a product or service which has a recognisable name and packaging.
What is brand loyalty?
Brand loyalty is a measure of how likely a customer is to buy a brand compared to competing brands.
High loyalty means...
continued and regular sales
How to supermarkets increase brand loyalty?
Have customer loyalty cards. They reward customers for their brand loyalty by offering deals and discounts.
What is a mass market?
A mass market is a large group of consumers with a wide range of different characteristics. Many products and services are aimed at mass markets.
Give an example of some products which are targeted to a mass market
What is a niche market?
Niche markets are smaller segments of the market. Consumers want something different from the mainstream and are not attracted to mass market products.
True or False
You would expect to pay more money for a product in a niche market.
Name the different market segments (Consumer characteristis)
4) Ethnic, Cultural and Religious Background
5) Buying habits
6) Socio-Economic Groups
Describe market segments (Consumer characteristics) age.
Different age groups have different needs and spending patterns. Goods and services may be targeted at specific age group
Describe market segments (Consumer characteristics) gender.
Men and women have different tastes and needs, and have different spending patterns.
Describe market segments (Consumer characteristics) income.
This is a measure of how much a consumer has available to spend. Those with higher income have different spending patterns from those on lower incomes.
Describe market segments (Consumer characteristics) ethnic, culture and religious background.
These influence the choice of food, fashion, preferences and other factors that affect spending behaviour.
Describe market segments (Consumer characteristics) buying habits.
This is a measure of customer loyalty and the frequency of purchasing. Some consumers are very loyal to a brand and will buy it regardless of the price. Others will shop around for the lowest price, or make their decision based on quality or on convenience.
Describe market segments (Consumer characteristics) Socio-economic groups
This method categorises consumers according to the occupation of the 'head of the household', usually the highest-earning person in the home. Occupation on its own is no longer considered to be a good method of segmenting consumers.
What are the different aspects of branding?
1) Brand personality and image
2) Business size
3) Unique Selling Point (USP)
5) Specialist staff
What is branding?
Involves giving a product or service a recognisable identity. A brand will have is own colours, packaging and style.
What is a brand personality and image?
The brand personality and image needs to be attractive to the target market. It must be relevant to them and reflects their own preferences, needs and wants.
How does the business size effect branding?
Smaller businesses often lack the time and expertise to focus on marketing activity. Instead of branding and USPs, they may offer personal service or customer care. Larger businesses create and market brands with USPs to make them stand out from the competition is mass markets.
What is a Unique Selling Point (USP)?
There should be something special about the product or service that sets it apart from the competition. This should give it the edge when consumers are thinking about making a purchase.
How do budgets effect branding?
Many businesses have limited marketing budgets and cannot afford to advertise on television or in glossy magazines. They require the highest impact for their money and market products and services using flyers, social media, email and radio.
How do specialist staff effect branding?
Large businesses will have specialist marketing staff. Smaller businesses may instead buy in expertise from external agencies and consultants, although specialists can be expensive.
If a business is launching a new product the key objective is what?
How would you work out the true cost of an advert?
By using the cost per thousand (CPT), which works out how much it would cost to be seen by 1000 people.
A website charges £800 to feature an advertisement for a week during which time it will be seen 500,000 times. Work out the CPU.
500,000/1000 = 500
£800/500 = £1.60
What are the internal influences on marketing?
1) Cost of the campaign
2) Available finance
3) Staff expertise
4) Size and culture of business
What are the external influences on marketing?
5) Political and legal
What are the factors of Social (external influences on marketing)
3) Age groups
What are the factors of Technological (external influences on marketing)
1) Manufacturing techniques
2) Communication methods
3) Use of internet and social media
What are the factors of Economic (external influences on marketing)
2) Interest rates
3) Health of the economy
4) Employment levels
What are the factors of Environmental (external influences on marketing)
1) Effects on climate and weather
What are the factors of Political and Legal (external influences on marketing)
1) Type of government
2) Stability of the government
3) Business laws
4) Regulations on competition and trading
What are the factors of Ethical (external influences on marketing)
1) Consumers' ethical demands
2) Acceptable business behaviour
3) Low wages and poor working conditions
What does market research involve?
Gathering information about target markets, competitors and market trends, so that the business can make the right decisions.
What does target markets include:
3) Ethnic, cultural and religious background
4) Consumer behaviour
Why is identifying market trends important?
Identifying market trends and how they are going to change over time is an important aspect of marketing strategy which enables business to plan for the future.
Market structure considers....
... the organisation and characteristics of a market. These affect the amount of competition and the potential pricing options.
What does market size refer to?
Refers to the value of the market in terms of sales and the number of competitors active in that market.
What is primary research?
Primary research is research collected by a business or market research.
What are the different methods of primary research?
5) Focus Groups
Explain the primary research method Surveys
People are asked a series of questions by post, phone or online. Often the surveys are quite long. People completing them may be rewarded with a gift or money-off voucher. Businesses can collect in-depth customer data for analysis.
Explain the primary research method Interviews
These are face-to-face conversations with people who are selected to match agreed characteristics. They are asked a series of questions by the interviewer. Interviews enable businesses to collect in-depth opinions and ideas.
Explain the primary research method Observation
This involves watching people's behaviour. A supermarket has lots of security cameras and these can be used to watch store flow and how people shop. Observation is used to look at customer behaviour and habits.
Explain the primary research method Trials
Often a business will often a cut price or free version of a new product to encourage people to try it. The business asks for feedback to see what people think about the product. Trials are used to get an early indication whether customers like the products.
Explain the primary research method Focus Groups
People selected by the business form a group and are encouraged to discuss products or services. A moderator directs the group. The group's discussions are often recorded and analysed in detail to identify attitudes and reactions and enable the business to develop products and services that meet customer needs.
What do focus groups provide a business?
Plenty of in-depth options and views
What different types of internal secondary research are there?
1) Customer data and financial records
2) Sales records
3) Loyalty cards
How is customer data used as internal secondary research?
Businesses can use names and addresses to send out offers by post or by email.
How are loyalty cards used as internal secondary research?
Businesses can collect detailed data on buying habits and reward customers with personalised offers and target promotions more effectively.
How are sales records used as internal secondary research?
Using sales figures, a business can work out the busiest times of the day or month, the busiest stores and the best locations to place products. Historical sales data can also help businesses to identify market trends so they can forecast sales.
What are the different types of external secondary research?
1) Commercially published reports
2) Government statistics
3) Trade journals
4) Competitors' annual reports and websites
5) Media sources
How are commercially published reports used as external secondary research?
Some businesses research specialised or mass markets and then sell their findings to other businesses. The information is used to help businesses identify trends
How are government statistics used as external secondary research?
The Office for National Statistics produces a wide range of official government statistics free of charge. These provide businesses with information about social, economic and business trends.
How are trade journals used as external secondary research?
A trade journal is a publication covering a specific industry (such as road haulage). It contains articles, research and news about the industry. It may also offer valuable insights into business opportunities, industry trends and competitor activity.
How are competitors' annual reports and websites used as external secondary research?
Public companies such as Merlin Entertainment, which run several theme parks including Alton Towers, must publish reports, updates and financial information. These appear on the company's website together with press releases and news reports. Competitors will regular check these sources of data to collect information.
How are media sources used as external secondary research?
Newspapers and magazines, television and radio programmes and news websites provide up-to-date information about business, markets and trends. The subjects are usually well researched and provide valuable information.
What is validity?
Validity is whether the research measures what it claims to be measuring.
What is reliability?
Reliability is whether the research can be applied to the whole market or all customers
What is appropriateness?
Appropriateness means choosing the right way or do the market research.
What is currency?
Currency refers to the age and relevance of the data.
What is qualitative data?
Qualitative research aims to revel why customers behave in certain ways and what could change their buying habits. It involves researching what customers think, feel or do.
What is quantitative data?
Quantitative research uses statistical analysis to measure how people think, behave or feel.
What does quantitative data provide?
Provides statistical results, but often the findings are hard to interpret. Will tell you what the answer was to a question such as 'yes' or 'no', but not why the person gave the answer.
What does qualitative data not provide and why?
Qualitative data do not provide statistical data. This type of data is based on people's opinions and it might be that no two answers are the same.
Define Quantitative Data
Are data in numerical form which can be used to produce graphs or tables.
Define Qualitative data
Are descriptive data which are obtained from interviews and focus groups.
What are the different sources of data for qualitative data?
1) Focus Groups
2) Individual Interviews
What are the different sources of data for quantitative data?
2) Telephone interviews
3) Website monitoring
4) Online Polls
Describe how Coca-Cola uses a range of market research
1) Secondary research to understand market opportunities
2) Focus groups, surveys and interviews to decide on new products, changes to existing products or packaging
3) Product trials and tests to assess the concept and get early feedback
4) Tracking performance and sales with research data from stockists
5) Social media for ongoing opinions and views of the product.
What are the factors affecting sample size?
1) How accurate does the research need to be?
2) How confident is the business that it will obtain the results it needs?
3) The size of the budget allocated to the research
How is evaluating validity done?
Needs to know how it was carried out. If there are any concerns about the validity of the research, teethe data might not be trustworthy.
How research data inform marketing decisions?
1) How much customers are prepared to spend.
2) The type of marketing and advertising that will be effective.
3) Whether the products or services are rising or falling in popularity.
4) What competitors are doing.
5) What customers demand from the product and/or service the business is offering.
Product life cycle describes...
... the normal stages a product or service passes through - from its development to when it is removed from the market.
What are the different stages of Product Life Cycle?
1) Development and Launch
Explain the development and launch stage of the product life cycle.
Products cost a lot to develop, so this cuts into profits. Only after a successful launch does the business begin to see sales and profits grow.
Explain the growth stage of the product life cycle.
This is the time when the business hopes the product will attract loyal repeat customers. The business will hope to see a big increase in sales and better profits
Explain the maturity stage of the product life cycle.
Strong growth in sales slows down. The business will try to keep sales as high as possible and try and stop competitors taking the market share.
Explain the decline stage of the product life cycle.
This is the stage when product sales are falling. The business will need to decide when to stop offering the products to customers. It will probably have already replaced it with a new version and launched it.
Give an example of some financial objectives
1) Breaking Even (Covering costs with revenue)
2) Making A Profit (Revenue greater than costs)
3) Growth (Increase number of transactions)
What does SMART objectives mean?
S - Smart
M - Measurable
A - Achievable
R - Relevant
T - Time Frame
Explain the S in Smart objective
Say what you want to achieve, e.g. to increase product sales compared to last year
Explain the M in Smart objective
How you will show the objective has been partly or fully achieved, e.g. sales figures are up 10 per cent on last year
Explain the A in Smart objective
The objective is challenging, but it can be met, e.g. employees will be able to see progress towards the objective
Explain the R in Smart objective
The goals are clearly linked to the main objectives of the organisation, e.g. to grow the business by increasing sales and profits
Explain the T in Smart objective
Set the target dates to achieve the objective, e.g. in March next year, product sales will be 10 per cent higher than this year.
What does a SWOT analysis identify?
Identifies the internal and external factors that may prevent threats or opportunities to the business.
What are the disadvantages of a SWOT analysis?
1) It can oversimplify situations as it requires forcing factors into one of four categories which may not always fit.
2) The analysis can be subjective. Some strength factors may not be very significant. Some factors can be either opportunities or threats; it might depend on how the business handles the situation.
What are the different situational analysis?
PESTLE analysis looks at...
... opportunities and threats of SWOT in more detail.
What does PESTLE mean?
Explain the P in Pestle
Taxation policy, employment laws, environmental regulations, trade restrictions, stability
Explain the E in Pestle
Growth, interest rates, currency exchange rates, inflation rate
Explain the S in Pestle
Health, population growth, age distribution
Explain the T in Pestle
Rate of technology change, research and development, automation
Explain the L in Pestle
Consumer, employment and industry legislation
Explain the E in Pestle
Use of natural resources, recycling, waste disposal.
Why is identifying your target market important?
1) Understand the problem that you are solving.
2) Understand who has this problem, and who does not have this problem.
3) Create a picture of the customer.
4) Think about the market - types of people, geographical locations, particular/niche sectors.
5) Do you have any areas of expertise? For example, do you have knowledge/contacts in a particular sector?
How is an analysis of your competitors done?
1) Identify who your competitors are.
2) What products or services for they offer?
3) How do your competitors' customers rate them?
4) Are your competitors a major threat to your business?
5) Carry out SWOT and PESTLE analyses on your competitors to sport their strengths and weaknesses.
What are the 7p's?
6) Physical Environment
What is form and function of a product? (7p's - Product)
Coming up with ideas for new products or services is just the first part of a complex process. If the product gets past some of the early stages a prototype needs to be developed to test whether the product meets form, fit and functionality requirements.
What is branding and why is it important factor of the 7p's
Branding is all about giving a name and identity to the product. It needs to be recognisable and appeal to consumers. A poor name or unclear identity can ruin the chances of a product's success. Branding means making use of marketing, public relations and promotion to create the right image.
What are the purposes of packaging? (7p's - Product)
1) Protects product during transportation and on retailer's shelf.
2) Protects users from hazardous ingredients or sharp edges.
3) Needs to be recognisable and carry brand name and logo.
4) Instructions, contact details and contents printed on packaging.
What are the different pricing strategies?
1) Penetrating Pricing
2) Price Skimming
3) Competitor-based Pricing
4) Cost-plus Pricing
Explain penetrating pricing (pricing strategies).
This is aggressive pricing. The business sets its prices as low as possible to attract customers aiming to grab market share very quickly. At that point it will increase pricing and hope that the customers remain loyal.
Explain price skimming (pricing strategies).
This takes advantage of loyal customers. The business charges high prices for its products or services knowing that customers will still buy them. This usually means that the business has a superior product to sell compared to its competitors.
Explain competitor-based pricing (pricing strategies).
This aims to match prices charged by the competition. The business will monitor prices and change them straightaway to make sure that they are not more expensive than the competition.
Explain cost-plus pricing (pricing strategies).
This simple pricing policy involves adding a certain percentage to the costs of a product or service to come up with the price. It takes no account of the competition or what customers might be prepared to pay.
What is Loss leaders?
Sometimes a business will offer a small range of products or services at cost price or even less in order to attract customers to its store or website.
What is the aim of loss leaders?
The aim is to encourage customers to buy other products or services.
What are the different ways to promote a product?
2) Social Media
3) Guerrilla Marketing
4) Personal Selling
5) Product Placement
6) Digital Marketing
7) Corporate image
What is advertising?
Is a message paid for by a business aiming to influence customers.
What does public relations focus on?
Focuses on a business reputation. It tries to influence options and behaviour by proving information.