Unit 3 Flashcards
(20 cards)
List marketing objectives
/4
-Sales volume
-Sales growth targets
-Market share
-Brand Loyalty
What is the formula for market share?
(Company sales value / Total market sales value) X 100 = ___%
What are Primary and Secondary data?
Primary - Data derived from first time research - Good as tailored for and controlled by the business + Not available to the public and competitors
Secondary - Data derived from existing research results
What is sampling?
+ Give an example of a specific type
Choosing a smaller group, a ‘sample’, of a large target population to represent it for research
Stratified sampling - where the population is divided into distinct groups, or strata, based on a shared characteristic
What is extrapolation?
Look at past-to-current data and continue following the trends that it shows - can be a valid way of forecasting e.g. sales if conditions do not change significantly
Distinguish Price elasticity and inelasticity of demand
Price elasticity is where customers are sensitive to price changes - the % change in demand exceeds the change in price
Price inelasticity is where demand is not sensitive to price changes and the % change in price is larger than the change in demand
What is the formula for price elasticity of demand?
% change in quantity demanded / % change in price
What is the formula for % change calculation?
(new value - old value / old value) x 100
Explain income elasticity of demand?
The relation between income and demand
If a product’s income elasticity of demand is positive then demand increases with consumer incomes and the other way around - the reality for ‘normal’ products
A negative income elasticity of demand means as incomes rise demand falls - the reality for ‘inferior’ products - if income falls customers switch back to these products
What is the formula for income elasticity of demand?
% change in quantity demanded / % change in consumer income
What is segmentation and its 4 types?
Identifying different groups of people who have similar needs in a market
Demographic: Needs and wants differ between age groups and genders
Geographic: Needs and wants differ in different areas, regions, countries etc
Income segmentation: Different income earners have different wants and needs
Behavioural segmentation: When do people buy? How much? Are they brand loyal?
Distinguish mass and niche markets and provide examples
Mass markets target a huge customer range by meeting needs that most people have e.g. bottled water, newspaper
Niche markets target smaller segments with more specific needs e.g. flavoured water, toothpaste for babies aged 0-2
What is positioning?
Where a business stands in a market - how its products are perceived relative to competitors
What is the marketing mix and what are its 7p’s?
The combination of marketing decisions a business makes that influence a customers decision to buy
1.Price
2.Product (the product itself)
3.Place (that they buy it)
4. Promotion (how is it marketed)
5. People (those involved in the transaction)
6. Process (How it is bought)
7.Physical environment (where is it bought)
Explain the boston matrix and its 4 quadrants
A tool for businesses to manage their product portfolio and decide what to do next with products
Question marks: High market growth/Low market share - growing quickly but not yet established - hard to tell how well they will do
Cash cows: Low market growth/High market share - established mature products that don’t need promotion
Stars: High market growth/High market share - Keep investment going so they will remain stars and remain very profitable
Dogs: Low market growth/Low market share - Must be invested in or they will decline further
What are the 5 stages of the product life cycle?
Development - Investment into research, testing the product; Cashflow will have to be negative
Introduction - The product is introduced into the market - sales will be slow - investment into marketing to increase awareness vital
Growth - When sales begin increasing quickly as customers are now aware of the product; Investment still necessary
Maturity - Sales growth rate begins to slow, maybe due to new competitors; sales are still probably high
Decline - When sales are falling - introduce extension strategies or take it off the market
What is penetration pricing?
When a business initially sets a low price for a product to gain significant market share quickly
What is price skimming?
When a business sets a high price initially and gradually decreases it over time
List and describe the 3 types of consumer products
Convenience - Widely distributed, customers will not travel far or think twice to buy different brands if their preference is not there, e.g. milk, newspapers - businesses should ensure their wide distribution
Shopping goods - Products where customers compare features and price to get their preferred option - they may even visit several stores - important for businesses to show relative benefits for these
Specialty products - Customers may have been thinking about buying for months or years and will travel far - physical environment important e.g. rolex, sports car
A product consists of:
Its core benefit, its tangibility, and other things such as brand name, delivery time, guarantees etc
