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unit 3 Flashcards

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1
Q

marketing mix

A

all the activities that go into marketing a product or service

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2
Q

developing new products (benefits)

A

-will give business a USP
-allows business to expands into new markets

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3
Q

developing new products (drawbacks)

A

-market research= high costs
-brand image could be damaged if product doesn’t meet customer needs
-trial products are expensive

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4
Q

brand image

A

identity given to a business which give it a personality of its own and distinguishes it from competitors

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5
Q

benefits of brand image

A

-strong brand image=USP
-customer loyalty=increase sales
-may allow the business to charge premium price

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6
Q

role of packaging

A
  1. has to be suitable for the product to be stored
  2. used for promoting the product, provides information
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7
Q

extension strategies

A
  1. sell to new markets
  2. modify the packaging
  3. use a new advertising campaign
  4. introduce a new or improved version of old products
  5. sell through additional retail outlets
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8
Q

development

A

-market research
-prototype is tested
-0 sales

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9
Q

introduction

A

-sales are low
-capital spent on advertising
-no profit

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10
Q

growth

A

-sales grow rapidly
-prices are still high
-profits are made

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11
Q

maturity

A

-increase competition
-advertising to maintain sales

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12
Q

saturation

A

-sales reach their highest point
-prices have to be reduced because of competition

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13
Q

e-commerce

A

buying products and services online

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14
Q

benefits of e-commerce

A

-convenient for customer
- website to promote product is much cheaper than other forms of advertisement
-larger geographical target market
-can buy raw materials online

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15
Q

drawbacks of e-commerce

A

-many more competitors
-lack of customer service (no face -to face)
-website design and updates are expensive to maintain
-customers worried about online fraud
-increased variable costs (shipping)

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16
Q

internet promotion (benefits)

A

-target focus groups
-ads and information on social media can be updated regularly
-cheap to use as can advertise on their own page

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17
Q

internet promotion (drawbacks)

A

-customers may find ads annoying=impacting brand image
-potential customers may not use social media
-negative comments=negative brand image

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18
Q

place

A

businesses have to decide where to sell their products and have to decide on the best distribution channel

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19
Q

distribution channel

A

mean by which a product is passed from producer to consumer

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20
Q

distribution channel 1

A

-producer consumer
-lower price for customer
-suitable for fresh produce
-high delivery fees
- impractical for many products as consumers may live far away
-not suitable for products that cant be easily sent by post

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21
Q

distribution channel 2

A
  • producer retailer consumer
  • reduced delivery fees
  • producer has no direct contact with consumer ( lack of personal service)
  • costs higher than DC 1, need to cover costs of retailer
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22
Q

distribution channel 3

A

-producer wholesaler retailer consumer
-reduces storage costs+save storage space for small retailers
-wholesaler could give trade credit to retailer = increases retailer cash flow
-takes longer fro fresh produce to reach retail store=bad quality
-consumer price is higher (cover costs + make profit)

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23
Q

distribution channel 4

A

-producer agent wholesaler retailer consumer
-producer may not know the best way to sell in another country (cultural and language barrier)
-agents will be aware of local conditions and will be in best position to select best places to sell
-agent takes portion of revenue (less profit)
-producer has less control over how product is sold

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24
Q

using an agent

A

if the product is exported to another country, the producer will sometimes use an agent to sell their products on behalf of them

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25
aims of promotion
1. to increase brand awareness + increase sales 2. to introduce new products to the market 3. compete with competitors product 4.improve company image (brand image)
26
TV
-targets large audience, target specific segments -increase fixed costs (expensive), customers may prefer to watch netflix as it is more convenient
27
radio
-often uses memorable song/tunes = increases brand awareness -cannot put across a visual image, spotify
28
newspapers
-adverts are permanent, relatively cheap in local papers - many young people do not purchase newspapers, not very attention grabbing
29
magazines
- niche business can advertise their business specifically to their target market -not often published, less opportunities to advertise, more expensive than newspapers
30
posters/ billboards
-cheap, can be seen by everyone who passes by -people may ignore (phones) not a lot of detail can be added-limited persuasion for customer
31
ads in cinema
-effective to target specific target market -expensive, people stream at home, seen by limited people
32
leaflets
-cheap, can be delivered door-to-door -may be ignored and dumped (junk mail)
33
internet
-can be viewed by existing customers, direct link to buying product, emails can be sent to existing customers -may ignore emails (junk mail), some may not use the internet
34
below the line promotion
-free gifts -BOGOF -price reductions (sales) -free samples -point of sale display
35
marketing budget
specifies how much money is available to promote or advertise a product low marketing budget limits the ways of advertising for a business
36
price elastic
consumers are sensitive to a change in price if prices increase sales will decrease significantly
37
price inelastic
consumers are not sensitive to a change in price, if price increase demand may not decrease significantly
38
competitive pricing
-setting prices in line with your competitors or just below them -if product is not overpriced compared to competitors=sales are likely to be higher -if costs of production of the business are higher than competitor=potential loss (profit) -high quality product needs to be sold at a high price to give it. higher quality image
39
penetration pricing
-when the price is set lower than the competitors (to be able to enter a new market) -useful for new products -will lead to an increase in sales and market share -low price=lower profit per unit -not ideal for branded product with good quality reputation -customer dissatisfaction business wants to increase prices
40
price skimming
- a high price set for a new product on a market - help product to be perceived of high quality - research and development costs can be payed due tot he profit made from high prices -high price discourage people from buying the product -business high profit may encourage competitors to enter market= decrease sales
41
cost plus pricing
-estimating how many products will be sold calculating total cost of making these products and then adding a percentage mark up profit -each product earns a profit -easy method to apply -business could loose sales if price is too high compared to competitors -costs are passed to customers= high selling prices
42
promotional pricing
-product is sold at a low price for a short time -rid of stock that will not sell -help renew interest of the product -revenue will be lower -pice war with competitors, they might reduce too
43
benefits of developing new products
-will give business a USP -allows business to expand into new and existing markets
44
drawbacks of developing new products
-the business will have to carry market research (expensive) -the brand image could be damaged if the company fails to meet customer needs with new product -cost of producing trial products is expensive
45
role of packaging
-it has to be suitable for the product to be stored in - packaging is also used to promote the productq
46
why have some market become more competitive
- globalisation of markets - transportation improvements - internet/e-commerce
47
how can a business respond to changing spending patterns and increase competition
- maintain good customer relationships - keep improving its existing products - bring out new products to keep customers interest - keep cost low to maintain competitiveness
48
mass market advantages
- total sale in these market can be very high - the business can benefit from economies of scale - risks can be spread, as often will sell several variations of the products to the mass market, if on fails others are likely to succeed - opportunities of growth for the business due to the high sales
49
mass market disadvantages
- high levels of competition - high costs of advertising and promotion - standardised products or services are produced so may not meet the specific needs of all customers potential customers, therefore leading to a cost of sales
50
niche market advantages
- small businesses may be able to sell successfully in niche markets as larger businesses may have not identified them - the needs of customers can be more focused and targeted
51
niche markets disadvantages
- small businesses which can have limited sales potential
52
market segment
an identifiable sub-group of a whole market in which consumers have similar characteristics or preferences
53
benefits of market segmentation
- to identify suitable products to suit that market segmentation in the market - to ensure that pricing , packaging and place are ideal for the market segment chosen-effective customer reach
54
market research
the process of gathering, analysing and interpreting information about a market
55
why do businesses use market research
- give the business a better understanding of its target market - develop products to meet the customers needs and wants - can increase sales and prevent any wasted time and resources - helps the business develop an appropriate marketing strategy - help it gain more market share
56
primary research
the collection and collation of original data via direct contact with potential or existing customers
57
methods of primary research
- interviews - questionnaires - online surveys - focus groups
58
benefits of primary research
- detailed information can be obtained (price customers are willing to pay) - opinions can be obtained on open ended questions
59
drawbacks of primary research
- gathering and collating these results is time consuming - bias could occur if they do not question a fair sample
60
methods of sampling
- random sampling - quota sampling (people are picked on the basis of characteristics age,gender...)
61
methods of secondary research
- government statistics - newspapers - market research agencies - looking at customer sales, record and history
62
secondary research advantages
- cheaper - easy and quick to maintain
63
secondary research disadvantages
- more likely to be out of date - not collected for the business itself therefore not specific - rival firms have access to the same sources
64
main stage of product life cycle
development, introduction, growth, maturity, saturation
65
benefits and drawbacks of online surveys
+ can find out what the customer wants + quick respond time as it is filled out online - absence of interviewer may cause customer to answer to briefly - consumers may rush survey - not suitable for a business who's target market doesn't use the internet
66
benefits and drawbacks of interviews
+ detailed information can be gathered based on what customers like or dislike + the interviewer can explain the questions carefully so consumers answer them carefully - very time consuming to carry out - could lead to bias if interviewer prompt the customer to what they wanna hear
67
benefits and drawbacks of postal questionnaires
+ detailed information can be obtained + opinions can be obtained on open-ended questions - gathering and collating results is time-consuming - bias can occur if they do not question a fair sample
68
benefits and drawbacks of focus groups
+ provide detailed information about customers' taste and preferences + quicker and cheaper than individual interviews - feedback could be biased if people on the feedback council be influenced by others - if conducted by a specialist market research company can become very expensive and time consuming.
69

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