unit 3 Flashcards
1
Q
5what is marketing
A
the process of identifying, predicting and staying customers needs profitably
2
Q
4 functions of business
A
marketing
HR
finance
opperations
3
Q
what are objectives
A
statement of specific outcomes to be achieved
4
Q
what are corporate objectives
A
things that relate to the business as a whole
5
Q
examples of functional change
A
raising finance
training programme for staff
6
Q
problems with setting marketing objectives
A
fast changing external environment
potential conflict between marketing objectives
be too ambitious
7
Q
sales growth
A
percentage change in sales over period of time for certain brand
8
Q
market growth
A
percentage change in sales over period of time for whole market
9
Q
internal influences on marketing objectives
A
corporate objectives
finance
human resources
opperations
10
Q
external influences on marketing objectives
A
economic environment
competitor actions
market dynamics
technological
social
political
11
Q
market size
A
sales volume + sales value
12
Q
sales volume
A
measures number of items sold or produced
13
Q
sales value
A
measures financial worth of item sold
14
Q
market share
A
overall market is split between the existing competitors
15
Q
what is market research
A
analysing of research to help support the implementation of marketing strategy
16
Q
types of market research
A
dimensions of market
competitor strategies
needs, wants, expectation
market segments
17
Q
what is meant by market dimensions
A
size, structure, growth, trends
18
Q
what is meant by competitor strategies
A
market share, positioning, USPs
19
Q
what is meant by market segments
A
existing and potential opportunities for new segments
20
Q
two main types of market research
A
primary and secondary
21
Q
primary research
A
getting data that hasn’t been collected before
22
Q
secondary research
A
researching that uses data that was collected by someone else
23
Q
quantitive research
A
the process of collecting and analyzing numerical data
24
Q
qualitative research
A
collecting and analyzing non-numerical data (e.g., text, video, or audio) to understand concepts, opinions, or experiences
25
what is sampling in a research market
involves the gathering of data from a sample of respondents
26
what should the sampling research be representative as
the population (e.e. target market) as a whole.
27
benefits of sampling market research
- can provide useful research insights
- can reduce risk and costs of done.
before making market decisions
- flexible and quick
28
drawbacks of sampling market research
sampling audience can be to small and to similar
bias opinions
customers taste buds changing frequently
29
what is random sampling
- simple method
-not completely unplanned (chose the
right place)
- data collection can take time and may
be expensive
- ICT used to help chose randoms
- can be difficult for keeping it random
30
what is quota sampling
- where the population id divided into
what you need (50/50 men + women)
- easy done quick
- may be biased as its selected
population
31
what is stratified sampling
- group of people randomly selected
before survey carried out
- in specific groups (age, gender)
- mail, email, phone surveys
- popular as its less biased
32
factors influencing the choice of sampling methods
- time to complete research and
decisions
- costs involved and fanatical situation
of firm
- new or existing product
- market position (niche or mass)
- target audience
- is the target markets wants specific
- firms existing knowledge of market
33
what is marketing mapping
using a graph to plot your competitors and their products to understand their behaviour band spot a gap in the market
34
dimensions affecting a marketing positioning map
low price - high price
basic quality - high quality
low volume - high volume
light - heavy
unhealthy - healthy
simple - complex
necessary - luxury
low tech - hi tech
35
what is primary research
getting data that has not bee collected before
36
what is secondary research
researching that uses data that was collected by someone else
37
primary research benefits
- guarantees that the information is up to
date and relevant
- no one else has access to it
38
secondary research benefits
- time efficient and easy to obtain
- saves time and money
39
primary research drawbacks
- expensive
- time consuming
- might not be feasible
40
secondary research drawbacks
- already been collected
- not good quality
- not what you need
- not up date
41
qualitative research benefits
-
42
43
44
45
46
aspects of the market that firms need to amylase
- size of market
- growth in the market
- market structure
- segmentation of the market
- social trends
47
size of market
- is it big enough
- is it feasible for the firm to operate in
48
growth in the market
- does the market have enough future
potential
49
market structure
- what level of competition is there
- how intense will the competition be
50
segmentation of the market
- who will the company be targeting
- what are their needs (wants and taste)
51
social trends
- changing lifestyles
- demographics
- fashions
52
reasons for analysing the market
- firm can then devise new plans and
- strategies
- identify future trends
- is the product viable
- identify opportunities and threats
53
what is correlation
statistical technique that looks at the strength of the relationship between two variable and how they relate.
(relationship between advertising expenditure and sales increase)
54
different between correlation and causation
- correlation - doesn't automatically
mean that the change in one variable
is the cause of the change in the
values of the other variable
- causation - indicates that one event is
the result of the occurrence of the
other event
55
correlation independent variable
- variable that causes change in the
other
- (increasing the investment in
promotion)
56
correlation dependent variable
- variable that is impacted by the
change in the independent variable
- (the resulting rise in demand)
57
positive correlation
- direct relationship between two
variables.
- as independent variable increases the
dependant variable increases
58
negative correlation
- inverse relationship between two
variables
- as the dependent variable falls the
independent variable rises and vice
versa
59
what is confidence intervals
how confident you are in your estimates
60
what is extrapolation
method of forecasting sales is took at what has been happening in the past and to continue the trend into the future
61
what can extrapolation be used
- measure performance
- workforce planning
- marketing department planning to hit forecast
- plan production levels and schedules
- produce realistic and motivating targets
62
advantages for test marketing
- actual sales results can be used to
inform decisions
- reduce risk as firms not waste money
- generate feedback to modify product
63
negatives for test marketing
- can be costly
- time consuming
- give competitors time
64
how do firms gather data from model technology
- internet data, social media
- CCTV
- store cards (club cards)
- EPOS
- online surveys
65
advantages of technology in gathering data for market decisions
- processed and analysed quickly
- go into greater depth with IT
- emails asking what customers prefer and want to hear
66
disadvantages of technology in gathering data for market decisions
- too much information is hard to
analyse and can slow decisions down
- trends can be misunderstood as data
is gathered to quickly
- trends can be mistaken as data is
gathered to quickly
- costly to acquire the required
technology to be able to gather data
(Tesco club card £500mil)
67
what is elasticity
- measures the responsiveness of
demand to a change in a relevant
variable
- (price or income0
68
what is price elasticity of demand
measures the extend to which the quantity of a product demanded is affected by a change in price
69
price elasticity of demand formula (PED)
%change in quantity demand
------------------------------------------
%change in price
70
do you ignore +- sign in PED calculation
yeppers
71
what does it mean if the elasticity number is greater then 1
elastic goods
72
what does it mean if the elasticity number is less then 1
inelastic goods
73
what does it mean if the elasticity number is 1
unitary elasticity
74
how too calculate percentage change
original figure - new figure
------------------------------------- X100
orignal figure
75
factors influencing PED
- grand strength
- necessity
- habit
- availability of substitutes
- time
76
income elasticity of demand formula
% change in quantity demanded
-----------------------------------------------
% change in consumer income
77
what is income elasticity of demand usually positive for
- fine wines and spirits
- chocolates
- holidays
- data
- sports an leisure
78
what is income elasticity of demand usually lower for
- staple food (bread, vegetables)
- mass transport (bus)
- beer takeaways
79
what is inferior goods and why does it happen
- income rises demand actually falls
- consumers witch to better alternatives
80
elements of effective marketing
- identify customer needs
- meeting the customer needs
81
niche marketing
meeting needs on a small number of customers
82
examples of niche marketing
- AnythingLeftHanded
- hearing direct
83
advantages of niche marketing
- firm can respond quickly to the needs of the customer
- effective marketing expenditure
- less likely to be major competition
84
disadvantages of niche marketing
- vulnerable to market changes
- successful niche may attract
competition
- lower level of sales = risks of cost
increases
85
what is mass marketing
meeting needs of a very large number of people
86
advantages of mass marketing
- profit margin on each unit may be
small, very high sales means high
profits
- less likely to be. significant change I'm
the market therefore more stable
revenue
- economies of scale therefore lower
cost per unit
87
disadvantages of mass marketing
- likely to attract competition which
may reduce profit margins
- less responsive to change sin
customers needs
88
what is meant by socio-economic groups
- a persons position in society
- measured by A,B,C1,C2....
89
advantages of niche market
- lower levels of competition = higher market share
- possible to build intense customer loyalty
90
disadvantages of niche market
- lower profits may be made as firms operate on
smaller scales and can't reduce their unit costs
through economies of scale
- new rivals entering the market will have a
considerable impact particularly as the barriers to
entry are relatively small
- larger rivals may enter the market if it becomes
very profitable
91
why segment the market
- match customer needs
- enhanced profits for business
- opportunities for growth
- retain more consumers
- target marketing communications
- gain share of the market segment
92
process of segmentation
- income (Rolex etc)
- geographical region (rural + inner city)
- ACORN (a classification of residential
neighbourhoods)
- behavioural (lifestyle/tastes)
- level of brand loyalty
- benefits sought by consumers
- purchase occasion (when and why)
- frequency of usage
93
difficulties with market segmentation
- firms find it difficult to identify the most
important segments for a product
- constant research is needed to keep up to dare
with consumer tastes
- products may become to specific to one market
segment
- company may ignore potentially lucrative
segments
94
example of company changing market segment to make more sales
- lego
- released girls lego
- revenue increase
95
what is market targeting
- deciding which segments of the market they want
to target
96
what is concentrated marketing
product aimed at a very well defined and specific market segment (niche)
helps avoid mass production
97
what is differentiated marketing mean
targeting several different market segments with different products
98
what is undifferentiated marketing
targeting the whole mass market with one product
99
what is product proliferation
when a firm sell a range of products aimed at different markets (Volkswagen)
100
what is market positioning
- when a firms product are in a market in relation
to rivals
- do this based on factors like (price, value, quality)
- create a USP
101
what is USP
unique selling point
102
what are economy brands
- low quality
- low price
103
what cowboy brands
- low quality
- high price
104
what are bargain brands
- high quality
- low price
105
what are premium brands
- high quality
- high price
106
what are the 7 Ps
- product
- price
- place
- promotion
- people
- process
- physical environment
107
product (7ps)
product or service that the customer buys
108
price (7ps)
how much customer pays for product
109
place (7ps)
how the product is distributed to the customer
110
promotion (7ps)
how the customer is found & persuaded to buy
111
people (7ps)
people who make contact with customers delivering the product
112
process (7ps)
systems and processes that deliver a product to a customer
113
physical environment (7ps)
elements of the physical environment the customer experiences
114
what is marketing mix
elements of a firms approach to marketing that satisfies and delight its customers
115
why are the 7ps used
- maximise sals + profit
- create brand
- customer loyalty
- create USP
116
key implications of an extended marketing mix
- each of business functions need to
work closer (customer service, HR)
- technology becomes increasingly
important (IT, customer
communication)
- intangible elements like branding play
an enhanced role
117
why is it called mix market
each element of the marketing mix is related to the others
elements if the mix should work together to achieve the desired effect
118
importance of the marketing mix
- firms need to use all elements of the
7Ps when launching a product
(price too high, won't buy)
119
key influences on the marketing mix
- business resources
- technology
- importance of customer relationship
120
order of marketing strategy
research ----> segmentation -----> targeting
product differentiation -----> marketing position
121
what is a product
anything that is capable of satisfying customer needs
122
layers of a product
- core value
- actual product (quality)
- augmented product (warranty)
123
what are consumer products
- bought by final consumers for personal
consumption
- differ o the ay consumers by them
124
industrial products
- bought. for further processing or for use in
conduction a business
- bought by other businesses, not consumers
125
what are the 3main kinds of industrial products
- material & parts
- capital items
- supplies & services
126
what are the key features of marketing industrial products
- specialist buyers seller
- buyer-seller relationship
- transaction value
- quality + price
- support
127
what is the product life cycle
a theoretical model which describes the stages a product goes through over its life
128
key uses of the product cycle model
- forecast future sales trends
- help with market targeting and
positioning
- help analyse + mange the product
portfolio
129
stages in the product life cycle
- development
- introduction
- growth
- maturity
- decline/end
130
what happens in the development section (life cycle)
- market research carried out
- expensive period
- no sales due to not being available
131
what happens in the introduction section (life cycle)
- sales begin
- slow start
- a lot of promotion
- convince people to stock product
132
what happens in the growth section (life cycle)
- sales start accelerating
- becoming successful
- in more shops
- start to break even
133
what happens in the maturity section (life cycle)
- sales slow down
- new competitors
- consumer have new needs
- start to come up with new products
134
what happens in the decline section (life cycle)
- sales fall
- less popular
- firm will make decisions
- spend on marketing or withdraw from
market
135
when should companies start to develop a new product (life cycle)
end of growth section as they have enough money and want to keep consumers happy
136
why do new products get scrapped before launched
- inadequate demand
- action of competitors
- high costs
- production problem
- change in external environment
- life cycle expected too be too short
137
what are the strategies in the introduction stage
- aim
- high promotional spending
- limited, focusing on distribution
- skimming or penetration pricing
138
strategies in growth stage
- advertising to promote brand awareness
- increase distribution outlet
- go for market penetration + marker leadership
- target early majority of potential buyers
- continue high promotion spending
- improve the product
139
strategies for the decline stage
- maintain market share
- harvest by spending little on
marketing the product
- price cutting to maintain
competitiveness
- promotion to retain loyal customers
- distribution narrowed
140
what options do firms have when product is on decline
- withdraw product
- let it decline in sales until no profit
- improve sales by extension strategy
141
how would you extend the product life cycle
- lower price
- change promotion
- change product
- find new uses for product
- develop new market segment
- look for alternative distribution
channels
142
weaknesses of the product life cycle model
- shape + duration of the cycle varies
from product to product
- strategic decisions can change the life
cycle
- difficult to recognise exactly where a
product is in its life cycle
- length can't be reliably predicted
- decline is not inevitable
143
conglomerate meaning
business owned by me company which operates I different sectors
144
what is product portfolio analysis
asses the position of each product or brand in a firms portfolio to help determine the right marketing strategy for each
145
whats the Boston matrix
a product portfolio amylases tool used to plan the development of products
146
categories of Boston matrix
- stars
- cash cows
- question marks
- dogs
147
what would dog link between in the product life cycle
decline
148
what would question mark link between in the product life cycle
introduction
149
what would star link between in the product life cycle
growth
150
what would cash cow link between in the product life cycle
maturity
151
difference between profit life cycle and Boston matrix
life cycle - individual products
- sales over time
matrix - firms portfolio of products
- cash flow from products
152
axes of Boston matrix
- relative market share x
- market growth y
153
what are question mark products
- low share of a rapidly growing market
- cash flow is negative
- potential but future uncertain
- could become either a star or a dog
154
strategy for question mark products
- invest to increase market share
- substantial investment ti achieve
growth at the expense of powerful
competitors
- invest promotion and other aspects
- build selectively
155
what are star products
- high share of rapidly growing market
- position of leadership in a high growth
market
- product is strong
- high marketing spending
- net cash flow is neutral
156
strategy for stars
- investment to sustain growth
- build sales/market share
- spend to keep competitors at bay
- investment to maintain or increase
leadership position
- repel challenges from competitors
-
157
what are cash cow products
- high share of a slowly growing market
- mature stage in life cycle
- mature, successful product
- dominant share
- little potential for growth
- large positive cash inflow
158
strategy for cash cows
- defend market share
- aim for short term profits
- little need for investment
- little potential for further growth
- reduce investment in order to
maximise short term cash flow +
product
159
what are dog products
- failed products
- declining products life cycle
- low share of a slowly growing market
- not going anywhere/ no potential
160
strategy for dogs
- phase out or sell off
- not worth investing
- any profit made needs to be
reinvested to maintain market share
- uses up more management time and
resources than can be justified
- divest or focus on defendable niche
161
how valuable is the Boston matrix model
- useful for analysing product
portfolio decisions
- only has a snapshot of current
position
- has little or no predictable
- focuses on market share + market
growth
162
value of life cycle and Boston metric to firms
- setting objectives
- identify successful + failing products
- make decisions on products need tp
be modified
163
what is price
- money charged for a product or services
- everything that a customer has to give up in order
to acquire a product or service
- usually expressed in terms of £
164
stages of price setting
- develop pricing objectives
- assess of targets markets ability to purchase
- determine demand for product
- analyse demand, cost and profit relationship
- evaluate competitors prices
- select pricing strategy & tactics
- decide on price
165
possible business objectives that influence pricing (financial)
- maximise profit
- achieve a target level of profits
- achieve a target rate or return
- maximise sales revenue
- improve cash flow
166
possible business objectives that influence pricing (marketing)
- maintain/improve market share
- beat/prevent competition
- increases sales
- build a brand
167
what's pricing methods
the method used to calculate the actual price set
168
what is meant by pricing strategies
- adopted over the medium to long term to achieve
marketing objectives
- have a significant impact on marketing strategy
169
what is meant by pricing tactics
- adopted in the short run to suit particular situations
- limited impact beyond the product itself
170
main factors that influence pricing
- costs
- elasticity demand
- product life cycle
- market share
- marketing objectives
- positioning
- competitors
171
what influences how pricing is set
competitors
172
what are price takers
have no option but to charge the ruling market price
173
what are price makers
able to fix their own price
174
what are price leaders
market leaders whose price changes are followed by rivals
175
what are price followers
follow the price-changing lead of the market leader
176
factors that businesses need to consider in setting price
- competitors products and prices
- cost of production, promotion, etc
- market conditions (demand levels, market share)
- the state of the economy and its impact on consumers
disposable income
- location of business
- brand image, reputation, customer loyalty
- product quality and packaging
- price elasticity of demand
177
producer
178
wholesaler
179
retailer
180
agent
181
what are channels of distribution
goes through several distribution channels before reaching customer
182
what are organisations in each stage of distribution called
intermediaries
183
what are intermediaries
a person who acts as a link between people in order to try and bring about an agreement
184
why use intermediaries
- efficiency of distribution costs
- specialists in selling
- have contacts, experience, scale of
operation
185
methods of distribution
- websites
- catalogues + mail order
- representatives and sales teams
- vending machines
- telesales (phone)
186
what is the main function of a distribution channel
to provide a link between production and consumption
187
what key functions do organisations that form distribution channels create
- information
- promotion
- contact
- negotiation
- physical distribution
- financing
- risk taking
188
what will influence the types of distribution method a business may use
- nature of the product
- the market
- the business (where it is)
- legal issues
189
what does it mean by nature of product
- perishable/fragile
- technical/complex (specialist sellers)
- customised (direct distribution best)
- desired image (suitable + relevant)
190
what does it mean by the market
- is it geographically spread
- does it sell over sea
- competition (channels and
intermediaries do they use)
191
what does it mean by the business
- size and scope (afford sales force)
- marketing objectives (rev+prof)
- established distribution network or
extend them
- how much control does it want over
distribution (longer the channel - less
control)
192
what does it mean by legal issues
- are there limitations on sales
- sell to under age customer
193
factors influencing the choice of distribution (profit margins)
more intermediaries in the
distribution channel lower the the
profit margin
- convince for customer and type of
product (
194
factors influencing the choice of distribution (distribution costs)
retailers help firms to ensure their products are available in all destinations without having to pay their own distribution costs
195
factors influencing the choice of distribution (control required over display and brand image)
Tesco and Levis battle, doesn't want their company portrayed in Tesco as its cheap and not high end
196
factors influencing the choice of distribution (proximity)
how close does the firm need to be to its customers
197
factors influencing the choice of distribution (convince for customers and type of product)
convince goods must be easier for consumers to access as they often rely on impulse chargers
198
what is multi-channel distribution
a business using more than one type of distribution channel (online, stores, click&collect)
199
benefits of multi-channel distribution
- allows more target market segments
to be reached
- customers increasingly expect
products to be available via more than
one channel
- enables higher revenue
200
drawbacks of multi-channel distribution
- potential for channel conflict
- can be complex to manage
- danger that pricing strategy becomes
confused
201
what are main aims of promotion
- make customers aware of the
existence and positioning of products
- persuade customers that the product
is better then others
- remind customers about why they
may want to buy
202
what does AIDA stand for
- awareness
- intrest
- desire
- action
203
what are. the main uses of promotion
- increase sales
- attract new customers
- encourage customer loyalty
- encourage trail
- create awareness
- inform
- remind potential customers
- reassure new customers
- change attitudes
- create an image
- launch a new product
204
what's promotional mix
specific mix of promotional methods that a business uses to pursue its marketing
205
key factors influencing promotional decisions & strategy
- stages in product life cycle
- nature of the product
- competition
- marketing objectives + budget
- target market
206
advantages of advertising
- wide coverage
- control of message
- repetition-communicated effectively
- building brand and loyalty
207
disadvantages of advertising
- expensive
- impersonal
- one way communication
- lacks flexibility
- limited ability to close a sale
208
what's e-commerce
buying and selling goods and services through the internet
209
what's m-commerce
purchasing goods through mobile devices
210
advantages of digital marketing
- global reach
- 24/7 availability
- faster buying process
- cheaper to advertise
- multiple ways to pay
- use it on the go
211
disadvantages of digital marketing
- small screen, all the information
- security risk
- not able to try product
- cost of setting it up
- increased competition
212
what is social media marketing
use of social media websites and platforms to promote products and services and connect with audiences
213
how can social media marketing help
- build company brands
- driving websites traffic
- increasing sales
214
reasons to utilise social media
- improve your brand
- engage the audience
- promote customer service
- impact sales + conversion rates
- become a thought leader
- study the competition
- improve search engine result page
- boost website traffic
- attract top-of-funnel leads
- earn greater ROI
- retarget missed customers
- learn about your audience
- build partnership
- keep up with industry trends
- acquire talent
215
whais viral marketing
- spreads information about a product
between people by word of mouth or
through internet-based
communication at an increasing rate
216
advantages of viral marketing
- allows companies to reach consumers
that wouldn't be targeted by
traditional marketing campaigns
- expanded reach allows the company
to enter new markets and expanded
customer base
- free
- shared quickly and easily
217
disadvantages of viral marketing
- consumers tend to share negative
news more than positive
- hard to measure as can't determine if
a lead or sale resulted from it
- if consumers think viral campaign will
comprise their privacy and security
they will not share
218
examples of sales promotion
- coupons
- money off
- competition
- demonstrations
- free samples
- loyalty points
- free gifts
- points of display
- BOGOF
- merchandising
- trade in offers
219
advantages of sales promotion
- effective at achieving a quick boost to
sales
- encourages customers to trial a
product or switch brands
220
disadvantages of sales promotion
- sales effect may only be short-term
- customers expect more promotions
- may damage brand image
221
what is personal selling
- promotion on person to person basis
- two way communication
- meeting with potential customers to
close a sale
- telephone, meetings, retail outlets,
knocking on doors
- highly priced, low volume + highly
technical products rely heavily on
perosnal selling
222
advantages of personal selling
- high customer attention
- message is customised
- interactivity
- persuasive impact
- potential for development of
relationships
- adaptable
- opportunity to close the sale
223
disadvantages of personal selling
- high cost
- labour intensive
- expensive
- can only reach a limited number of
customers
224
what is public relations (PR)
those that create goodwill toward an individual, business, cause or product
225
main aims of PR
- achieve favourable publicity
- build the image and reputation
- communicate effectively with
customers + stakeholders
226
typical PR activities
- promoting new products
- enhancing public awareness
- projecting a business image
- promote social responsibility
- projecting business as a good
employer
- obtain favourable product
reviews/recommendation
227
how do PR & sponsorship link
- specialist form of public relations
- common in the worlds of arts and
sport
- sponsorship should benefit both sides
228
what is direct marketing
promotional material directed through mail, email, social media, or phone to individuals or businesses
229
why use direct marketing
- allows a business to generate a
specific response from targeted
groups of customers
- allows a business to focus on several
marketing objectives
- increasing sales
- build loyalty
- generate new business
