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Unit 3 Flashcards

1
Q

What are marketing objectives?

A

The specific goals of the marketing department, must be in line with the firms overall corporate objectives.

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2
Q

Examples of marketing objectives.

A

Sales volume and sales value.
Market size.
Market and sales growth.
Market share.
Brand loyalty.
Launch new product.

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3
Q

What is sales growth?

A

% Change in sales over a period of time.

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4
Q

What is the equation for sales/market growth?

A

(New size - og size)/og size.

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5
Q

What is the equation for market share?

A

Sales of one brand/total market sales.

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6
Q

Evaluate primary marketing research.

A

+ Relevant to purpose.
+ Up to date.
+ Kept private.
+ More detailed insights.
- Time consuming.
- More expensive.
- Sample may not be representative.
- Risk of survey bias.

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7
Q

Evaluate secondary market research.

A

+ Quick and easy.
+ Cheap.
+ Good source of market insights.
- Less relevant to purpose.
- Could be incorrect.
- May be old/out of date.
- Specialist reports can be costly to access.

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8
Q

What is quantitative data?

A

Data expressed in numbers.

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9
Q

What is qualitative data?

A

Data expressed in words e.g. opinions, attitudes.
Understands why customers feel that way.

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10
Q

Evaluate qualitative data.

A

+ Focus on understanding customer.
+ Essential for important new product development.
- Based on opinion not fact.

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11
Q

Evaluate quantitative data.

A

+ Easy to analyse.
+ Provides insight into trends.
+ Easy to/can be compared.
- Doesn’t have a why or opinion.
- May lack reliability if sample size and method is not valid.

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12
Q

Describe random sampling.

A

All people have an equal chance of being selected.

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13
Q

Evaluate random sampling.

A

+ Simple method, made easier with technology.
- Finding an ‘accurate’ list usually includes some sort of bias.

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14
Q

Describe quota sampling.

A

Sample chosen that aims to represent whole population.
Divided by key characteristics.
People asked which they fit into and once quota is filled no more are asked.

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15
Q

Internal influences on marketing objectives.

A

Overall strategy of the business.
Ambitions.
Existing position.
Amount the business can produce.
Finance.
Employees.

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16
Q

External influences on marketing objectives.

A

Economic changes.
Globalisation - developing international influence.
Social changes.
Technological changes.
(PESTLE)

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17
Q

What insights does marketing research give you.

A

Dimensions of the market.
Competitors strategies.
Needs, wants and expectations of customers.
Market segments - existing and new.

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18
Q

Define price elasticity of demand.

A

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

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19
Q

How to calculate PED.

A

%change in quantity demanded/%change in price.

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20
Q

What does a PED value of >1 mean?

A

Price elastic.
Price changes greatly affect the demand of a product or service.

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21
Q

What does a PED value of <1 mean?

A

Price inelastic.
If price changes, customer buying habits stay relatively the same.

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22
Q

What does a PED value of exactly 1 mean?

A

Unitary price elasticity.
A given % change in price leads to an equal % change in quantity demanded or supplied.

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23
Q

Factors which often mean a good or service is price inelastic.

A

Brand strength.
Necessity.
Habit.

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24
Q

How does availability of substitutes affect price elasticity.

A

If lots of alternatives are available price is more likely to be elastic.

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25
How does time affect price elasticity.
Short term - price changes tend to have less impact (less elastic).
26
Define income elasticity of demand.
Measurement of the extent to which the quantity of a product demanded is affected by a change in income.
27
Calculation for income elasticity of demand.
%change in quantity demanded/%change in income.
28
How does YED affect normal products.
Rise/fall in income results in rise/fall of demand.
29
How does YED affect luxury products.
YED >1. Income grows,proportionally more is spent on luxuries. E.g. holidays.
30
How does YED affect necessities?
YED <1. As income grows proportionally less is spent. For inferior goods (store brands) demand falls as better alternatives are bought.
31
Name the 4 ways to segment a market.
Demographic - age, gender, religion etc. Geographic. Income. Behavioural - benefits customers seek from products/ways they use them.
32
What is the first stage of market segmentation?
Choose which customers to serve.
33
What is the second stage of market segmentation.
Decide how to serve those customers e.g. USP, market positioning.
34
Define market segmentation.
Dividing a market into parts that reflect different customer needs and wants.
35
What are the benefits of market segmentation?
Focus resources on parts of a market where the business can succeed. Allow business to grow market share. Helps new product development. Makes marketing mix more effective e.g. better targeting of promotion.
36
Drawbacks of market segmentation.
Data may not always be available or reliable. Just because you can identify a segment, doesn’t mean you can reach the customers. Markets are increasing dynamic.
37
Define mass marketing.
Selling to the largest part of the market.
38
Define product.
The product or service that the customer buys.
39
Define Place.
How the product is distributed to the customers.
40
Define price.
How much the customer pays.
41
Define promotion.
How the customer is found and persuaded to buy.
42
Define people.
Who makes contact with customers in delivering the product.
43
Define process.
The systems and processes that deliver a product to a customer.
44
What is physical environment?
The elements that the customer experiences.
45
What are consumer products?
Bought by final consumer for personal consumption.
46
What are industrial products?
Bought to be used in further processing or for use in conducting a business.
47
What is a convenience product?
Bought frequently with little planning and no effort.
48
What is a shopping product?
Bought less frequently. Customer is more careful on sustainability, quality, price etc. E.g. hoodie.
49
What is a speciality product?
Unique characteristic of brand. Buyers make a special effort.
50
Define the product life cycle.
A theoretical model which describes the stages a product goes through over its life.
51
What are the 5 stages of the product life cycle?
Development. Introduction. Growth. Maturity. Decline.
52
Describe the growth stage of the product life cycle.
Expanding market but arrival of competitors. Fast growing sales. Cash flow increases. Unit costs fall with economy of scale.
53
Describe the maturity stage of the product life cycle.
Sales growth slows as rivals enter market. Cash flow could be strongly positive. Weaker competitors leave market. High profit if high market share.
54
How can a business extend the product lifestyle?
Lower price. Change promotion. Restyle/improve product.Develop new market segment. Reposition the product.
55
What are the 4 stages of the Boston matrix?
?. Stars. Dogs. Cash cows.
56
What is market growth.
% rate of growth in sales in the market.
57
What is relative market share.
Not expressed as a %. Share in relation to other firms share. Measure of strength in the market.
58
What are ? products?
Low share of rapidly growing market. Cash flow negative. Have potential but future is uncertain. Could become a star or dog.
59
Describe star products.
High share of a rapidly growing market. Position of leadership in a high growth market. Net cash flow is neutral or positive.
60
Describe cash cow products.
High share of slowly growing market. Ature stage in product lifestyle. Little potential for growth. Large positive cash inflow.
61
What are dog products?
Failed or declining products. Low share of slowly growing market. No real potential.
62
Describe cost-plus pricing.
Cost is an important influence. Make up price from costs.
63
What are the benefits of cost plus pricing?
Easy to calculate. Price increase justified if costs increase.
64
What are the drawbacks of cost-plus pricing.
Ignores PED. May not consider competition. Profit is lost if set below what customer is willing to pay. Sales lost if too high.
65
What is price skimming?
Set high price to maximise profit. Product sold to different market segments at different times. Top segment skimmed off first with highest price.
66
Describe penetration pricing.
Offer product at a low introductory price. Price increased once target market share reached.
67
What are the aims of penetration pricing?
Gain market share quickly. Build customer loyalty. Build sales of higher priced related items e.g. razor blades.
68
What is the promotional mix?
Advertising. Sales promotion and merchandising. Personal selling. Publicity. Direct marketing.
69
What is advertisement?
Paid for communication.
70
Influences on promotion.
Promotional budget. The message. Technology available. Target audience.
71
What is the importance of branding?
A brand represents a promise by a business to provide a specific set of benefits. Customers recognise a brand by name/logo and distinguish it from the competition.
72
What is sales promotion?
Incentives designed to stimulate purchases. Short term to increase sales.
73
What is a distribution channel?
Moves a product through production to final consumption.
74
What is multi channel distribution?
Using more than one distribution channel. E.g. apple has online stores, retail stores and retail partners.
75
What is direct distribution?
Channel where a producer and consumer deal directly with each other. No involvement of an intermediary.
76
What is indirect distribution.
Involves use of intermediaries.
77
Why would a business use indirect distribution?
Customers live too far. Better use of resources would be somewhere else. Lack of retailing expertise.
78
What are the benefits of multi channel distribution?
Allow more target market segments to be reached. Higher revenues. Customers increasingly expect products to be available via more than one channel.
79
What are the drawbacks of a multi channel distribution?
Potential for channel conflict - competing with retailers by also selling direct. Can be complex to manage. Danger that pricing strategy gets confused.
80
How does people affect business?
Contact will have a major impact on customer service and therefore brand image.
81
What is extrapolation?
Using the trends established from historical data to forecast the future.
82
What are confidence intervals?
Gives a the percentage probability that an estimated range of possible values includes the actual value. Evaluates the reliability of a particular estimate.
83
What is a focus group?
A group is asked about their opinions, beliefs and attitudes towards a product, service, concept, advert etc.
84
What is sampling in market research.
Involves gathering of data from a sample of respondents. The results should be representative of the population.
85
What are the benefits of sampling.
Even a small sample (if representative) can provide useful research insights. If used before marketing decisions can reduce risks and costs. Sampling is flexible and relatively quick.
86
What are the drawbacks of sampling.
If unrepresentative can lead to incorrect conclusions. Risk of bias in research questions. Less useful in market segments where tastes and preferences are changing frequently.
87
Define primary research.
Data collected first hand for specific research purposes.
88
Define secondary research.
Data that already exists and has been collected for a different purpose.
89
What is test marketing?
Replicating all elements of a product launch to a specific planned smaller geographic region or demographic group to judge the viability of the product before launch.
90
What is an advantage of technology?
Data can be analysed fast and in greater depth. Customer data can be constructed.
91
What are the drawbacks of technology in analysing data?
Too much data can be hard to analyse. Tends to be misunderstood. Can be costly to acquire required technology.
92
Evaluate quota sampling.
+ Quick and cheap. - Not random as not an equal chance of being selected. - May develop bias - if individual is not in right place at right time there is no chance of being surveyed. - Cannot accurately predict population of a whole population.
93
What is stratified sampling?
Participants are selected in proportion to specific sub groups that represent the target market.
94
Evaluate stratified sampling.
+ More suitable for mail, phone surveys etc. + Should be less biased and accurately reflect the target population. + Tech often used to randomly select. - Can take lots of time and effort. - Costly.

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