Unit 3- Decision-making to improve marketing performance (3.4-7ps) Flashcards
(285 cards)
1
Q
What is the marketing mix?
A
The elements of a firm’s approach to marketing that enable it to satisfy and delight its customers.
2
Q
What is the marketing mix also commonly described as?
A
The 7Ps
3
Q
What are the 7Ps manipulated by the firm to do?
A
Maximise sales and profit
Create a brand
Develop customer loyalty
Create a USP (unique selling point/proposition)
4
Q
What is a USP?
A
A key feature of a product that differentiates it from its rivals.
5
Q
List the 7Ps.
A
- Product
- Promotion
- Place
- People
- Process
- Physical environment
- Price
6
Q
List the first 4 factors which could influence the design of a firm’s marketing mix.
A
- Financial situation of the firm
- Target market and the firm’s knowledge of the market through market research
- Stage in life cycle
- Market forces
7
Q
List the last 4 factors which could influence the design of a firm’s marketing mix.
A
- Consumer tastes and fashions
- The price elasticity of demand
- Existing reputation and brand image of the firm
- The impact of technology
8
Q
How does the financial situation of the firm influence the design of a firm’s marketing mix?
A
Things like cash flow and levels of profit will influence budget firms are able to set for promotion and the type of promotion they use.
May impact prices they set, the level of training they offer staff and its impact on customer service.
9
Q
How does target market and the firm’s knowledge of the market through market research influence the marketing mix?
A
What market segment does the business aim at?
What level of income do they have?
What are their interests, tastes and fashions?
How price sensitive are they?
What do they look for in a product?
10
Q
How does the stage in life cycle influence marketing mix?
A
Is it a start-up firm or one which has been operating for a long time?
11
Q
How do market forces influence marketing mix?
A
How much competition does the firm face?
Does the firm operate in a mass or niche market?
Does it sell to consumers or other businesses?
Who holds the power, buyers or suppliers? (Porter’s Five Forces)
12
Q
How does the impact of technology influence the marketing mix?
A
E-commerce and social media usage-does it sell its good/services online?
Does it use social media?
Does its target market prefer these methods?
What is the rate of technological change in the market in marketing methods, production methods, components and types of products sold?
13
Q
What will the marketing mix be most strongly influenced by?
A
The type of market the firm operates in.
14
Q
Between what 2 things will firms decide is their target market?
A
Consumers
Other businesses
15
Q
Firms may decide to make their target market other business. What is this market called?
A
Industrial (business to business) markets.
16
Q
Firms may choose to make their target market consumers. What is this market called?
A
Consumer market
17
Q
What are the key issues which firms must deal with when they operate in industrial markets which differ from selling directly to consumers?
(List the first 4.)
A
- Promotion
- Larger quantities
- Specialist purchasing staff
- Greater emphasis on quality (and other factors)
18
Q
What are the key issues which firms must deal with when they operate in industrial markets which differ from selling directly to consumers?
(List the last 5)
A
- Price and mark-up (profit margin)
- Credit
- Building relationships and customer service
- Time
- delivery conditions
19
Q
Why is promotion important when it comes to operating in industrial markets?
A
Focuses on facts and being informative rather than being persuasive.
20
Q
Why are large quantities important in industrial marketing?
A
More needs to be purchased
21
Q
Why are specialist purchasing staff key in industrial marketing?
A
They are much more knowledgeable.
Harder to negotiate with and influence by marketing methods
22
Q
Apart from quality, name one other factor a firm needs to give greater emphasis on in a industrial market?
A
After-sales service and maintenance, particularly if selling machinery, vehicles, etc.
23
Q
Why is credit a key issue which a firm operating in an industrial market needs to deal with?
A
It is often expected which can impact cash flow and liquidity.
24
Q
Why is building relationships and customer serviced vital in an industrial market?
A
Vital for repeat sales and long-lasting loyalty.
25
Why is time an important issue in industrial markets?
Often negotiation plays and important part and can take time.
26
Why are delivery conditions important for a firm operating in an industrial market?
Firms often expect more specialist delivery unlike consumers who may seek out the retailers.
27
Why are consumer products purchased?
To satisfy a range of different consumer needs and wants.
28
When firms compete in consumer markets, based on what will they compete in different markets?
What type of consumer product they sell.
29
What are the 3 main categories of consumer products?
1. Convenience products
2. Shopping products
3. Specialty products
30
What are convenience products?
Low-priced products which are frequently purchased by most market segments with minimum thought or planning, often out of impulse or habit.
31
What are shopping products?
Products which consumers value and give some thought and planning to so do not buy as often as convenience goods.
The value of the brand name is often important so there is high added-value and therefore higher prices charged.
32
What are specialty products?
Products with high price tags which consumers are very selective about and will generally research in some detail.
33
Give some examples of convenience products.
Food
Cleaning products
34
Give examples of shopping products.
Clothing
Electrical goods
35
Give some examples of specialty products.
Luxury cars
Cruises
Expensive wines and champagne
Jewellery
36
What are the 2 other categories of consumer products?
1. Emergency products
2. Unsought products
37
What are emergency products?
Products brought due to sudden events to solve a problem e.g., fuel.
38
What are unsought products?
Unplanned impulse purchase because of a firm's marketing efforts and a customer's exposure to them, e.g., persuasive sales staff or product discounts.
39
Define product.
The good/service provided by a business.
40
What should a product possess?
Key features that ensure it appeals to the needs of its target market.
41
List the first 5 key features a product should possess which ensure it appeals to the needs of its target market.
1. Functionality
2. Reliability
3. Durability
4. Appearance and aesthetic qualities
5. Value in relation to price charged
42
List the last 4 key features a product should possess which ensure it appeals to the needs of its target market.
6. Safe and abiding by legislation.
7. Convenient to use and ergonomic (safe to use)
8. Suitable packaging
9. Fashionable and in keeping with social trends
43
Name some types of legislation a product might need to abide by.
Health and safety legislation
Emissions control
Trade descriptions
Environmental laws etc
44
List some extra factors (apart from the 9) which influence developing products.
1. Market research
2. Own personal experience
3. Solving your own personal needs and problem solving
4. Innovation and new ideas
5. Environmental awareness
6. Ideas from other countries
45
How does market research influence developing products?
Spotting new trends in the market, potential gaps or better understanding of consumers’ tastes to identify potential new products.
Firms that launch new products purely based on consumers’ tastes found from research are known as ‘market-led’.
46
Give an example of how own personal experience influence developing products.
James Dyson's struggles with his bagged vacuum cleaner.
47
How does environmental awareness influence developing products?
New products can be developed to help solve environmental problems.
47
How does environmental awareness influence developing products?
New products can be developed to help solve environmental problems.
48
What are the 6 stages of the product life cycle?
1. Development
2. Introduction
3. Growth
4. Maturity
5. Saturation
6. Decline
49
What happens at the research and development stage in the product life cycle?
Market research is carried out, the idea for the product is developed and prototypes produced.
50
What is the major disadvantage for the business at the research and development stage of the product life cycle?
It is an expensive period for the company as no sales are made because the product is not yet available.
51
What happens at the introduction (launch) stage of the product life cycle?
Sales begin and start slowly as consumers are getting to know the product
52
What will the introduction stage of the product life cycle involve a lot of?
Expenditure on promotion and publicity.
Firm will need to convince their distributors to stock the new product.
53
Give an example of an product in the introduction stage of the product life cycle which needed to convince distributors to stock their product.
PlayStation 4 in 2013
54
What happens at the growth stage of the product life cycle?
At this stage sales are accelerating (if it is well advertised).
People are beginning to buy more of it, and it is becoming successful.
55
What does a firm need to do for a product at the growth stage of the product life cycle?
Find more outlets for the product.
Start to break even on costs.
Begin making a profit
e.g., NFL in the UK
56
What happens at the maturity stage of the product life cycle?
At this stage, the sales rate begins to slow down.
57
Why might sales rates begin to slow at the maturity stage in the product life cycle?
Perhaps a competitor has launched something similar that is impacting sales.
Customers may want something new.
58
At the maturity stage of the product life cycle, what should a firm consider?
Introducing some different versions of the product to keep sales up.
59
Give some example of firms introducing different versions of their products at the maturity stage of the product life cycle.
Cadbury Dairy Milk introducing ice-cream
Heinz Ketchup
60
What happens at the decline stage of the product life cycle?
Sales begin to fall as the product becomes less popular.
61
What does a firm need to decide at the decline stage of the product life cycle? (2 questions)
Should sales be boosted again by spending more on marketing?
OR
Should their product be withdrawn from the market?
62
Give an example of a product at the decline stage.
CD sales.
63
Give the 3 options a firm has at the decline stage of the product life cycle.
1. Withdraw the product
2. Let it decline in sales until it no longer generates profit or contributes towards paying fixed costs and breaking even.
3. Improve the product sales using an extension strategy.
64
What is an extension strategy?
Strategies taken to extend the life cycle of the product.
65
List the first 5 examples of extension strategies.
1. Reposition the brand into a niche market
2. Targeting new market segments with the same product (market development)
3. Updated design of the product and/or packaging
4. Modifying ingredients
5. Change of sizes of products
66
Give an example of a business who targeted new market segments with the same product (market development).
Johnson's Baby Shampoo targeting adult users.
67
List the last 5 examples of extension strategies.
6. Increase usage of the product.
7. New advertising campaigns
8. Move into foreign markets (market development)
9. Create a new brand image
10. Improve customers service or after-sales service.
68
Give an example of a business who increased usage of a product.
Kellogg's 'twice a day' cereal diet.
69
Give an example of a business moving into foreign markets (market development).
Xbox have been able to do this with opening up of the Chinese market.
Numerous car brands have also been able to do this in emerging markets such as India.
70
What are the 4 sections of The Boston Matrix?
Star
Cash cow
Dog
Question mark/Problem child
71
What is market share?
How much of the market you consist of
72
Which axis of the Boston Matrix diagram is market share on?
X-axis
73
Which axis of the Boston Matrix diagram is market growth on?
Y-axis
74
What are the 2 labelled axis of the Boston Matrix graph?
Market growth
Market share
75
Does the market share on the Boston Matrix go from high to low or low to high(from left to high)?
High to low
High=left Low=Right
76
Does the market growth on the Boston Matrix go from low to high or high to low (from bottom to top)?
Low to high
Low = bottom High=top
77
Which part of the Boston Matrix is low market growth and high market share?
Cash cow
78
Which part of the Boston Matrix has high market growth and high market share?
Star
79
Which part of the Boston Matrix has high market growth and low market share?
Question mark/problem child
80
What part of the Boston Matrix has low market growth and low market share?
Dog
81
Based on what, can you analyse the products in a firm's product portfolio?
Look at:
Market share and market growth in the market they operate in.
82
What is a product portfolio?
The range of products a business may sell.
83
Give an example of a product portfolio.
Proctor & Gamble own brand, such as:
Ariel
Duracell
Wash & Go
Fairy
Gillette
Pampers
84
What does the Boston Matrix allow firms to do?
Analyse where their products are in relation to their market.
Make decisions about what needs to be done.
85
What can each stage of the Boston Matrix be related to?
A stage in the product life cycle.
86
What does the dog stage in the Boston Matrix link to in the product life cycle?
Decline
87
What does the cash cow stage in the Boston Matrix link to in the product life cycle?
Maturity
88
What part of the product life cycle does the star in the Boston Matrix relate to?
Growth
89
What part of the product life cycle does the question mark/problem child in the Boston Matrix relate to?
Introduction (market entry)
90
What can income from cash cows be used to promote?
Star and question mark products in the portfolio.
Whilst also being used to pay for research and development for the next new product.
91
What market share does a question mark/problem child have in what type of market?
Small market share in a fast-growing market
92
Will products be a success or failure at the question mark/problem child stage?
May be successful
May fail
93
What type of income will question mark/problem child products generate?
Little
94
What type of future does a question mark/problem child product have?
Uncertain
95
In order to create awareness for a question mark/problem child product what does there need to be?
Large investment in marketing
96
What type of products are question mark/problem child?
Mostly new into the market.
97
Give an example of a question mark/problem child product.
Microsoft Xbox when it was launched in 2001
98
In a fast-growing market, how much share do star products have?
Large
99
What kind of income will highly successful star products generate?
High income
100
What is the difficulty with marketing and promoting star products?
Usually expensive
101
Why does money need to be spent on a star product?
Ensure it retains its position in the market
To stay ahead of competition
102
What is the main aim with star products?
To develop them into a cash cow
103
Give an example of a star product.
Apple iPad
104
What type of market share to cash cows have, in what type of market?
High market share in a slow growing market
105
What type of products are cash cows?
Often mature products with well established producers.
106
How much income do cash cows generate for a business?
More than is invested
107
How much room in the market is there for growth for a cash cow?
Little
108
How is promotion for cash cows?
Much of its already done.
109
How is product awareness like in the market for cash cows?
Good
110
If cash cows are not managed well, what may they become?
Dogs
111
What is money generated from cash cows used to do?
Fund a company's other star and problem child products to help them succeed (milking).
112
What is milking in business?
A short-term revenue generating strategy.
This is a marketing tactic, which is deployed to snatch the largest possible revenue and profit from a particular product or service in the quickest period of time, regardless of the item's future possibilities for generating revenue.
113
Give examples of cash cow products.
Heinz Baked Beans
Nescafe Original
114
What type of market share do dogs have in what type of market?
Low market share in low growth markets
115
Dogs may not no longer generate profit but they do contribute to what and still take up what?
Fixed costs
Resources taken up that could be used for other products
116
What may firms want to do with dogs?
Withdraw them from the market
Let them decline until they no longer make a positive contribution to the firm.
117
How could you turn around dogs?
Using extension strategies
118
Why might businesses decide to hold dogs and keep them?
Strategic reason, for example, to maintain market share.
119
Give examples of dogs.
Video recorders
Personal MP3 players
120
What is product development?
When a firm creates a new or improved good or service.
121
What are the 5 stages of product development?
1. Generate ideas
2. Analyse potential product ideas
3. Develop product
4. Test market
5. Launch product
122
During product development, what happens when the business generate ideas?
Research and development will be completed, often at great costs.
Ideas will be discussed and market research will be completed to identify gaps in the market and consumer tastes.
123
During product development, what will be done at the analysing potential product ideas stage?
Firms will analyse how feasible the ideas is and decide if it will fit in its product portfolio.
124
During product development, what happens at the develop product stage?
The product will be made, tested with prototypes and/or simulation using CAD/CAM.
125
What does CAD/CAM stand for?
Computer-aided design and manufacturing
126
During product development, what will happen at the test market stage?
Some firms will complete this stage, where the product is released in particular areas to test customer reaction.
127
During product development, what will happen at the launch product stage?
Once the firm feels the product is ready it will be released and the firm will finally begin to receive revenue to cover the costs already incurred.
128
What are the 7 things which influence new product development?
1. Market research gathered
2. Skills and expertise of staff and managers
3. Management experience and knowledge
4. Technology advancement
5. Competitors' actions and product launches
6. Scientific development and innovation
7. Social trends
129
How do skills and expertise of staff and managers influence new product development?
What can the firm do?
Can they spot new opportunities and gaps in the market to gain first mover advantage?
130
How does market research gathered influence new product development?
Needs to spot a gap in the market
Look at rivals' actions
Look at consumer tastes
131
Why does technology advancement influence new product development?
Needed in:
Products
Components
Marketing methods
Production methods
132
Give an example of why scientific developments and innovation important when it comes to new product development.
Dyson and Apple develop new ideas without necessarily researching what customer want.
133
Why are social trends influential when it comes to new product development?
Need to look at:
Fashion changes
Consumer needs and wants
New environmental products and green technology
Healthy living etc.
134
List the first 5 factors which impact price being charged for a product.
1. Competitors' products and prices
2. Cost of production promotion etc,
3. market conditions
4. The state of the economy and its impact on consumers' disposable income
5. Location of the business
135
What market conditions which affect price charged for products?
Demand levels
Accepted prices
Market share
136
List the last 5 factors which impacts the price being charged for a product.
6. The bargaining power of customers in the target market
7. Do the business sell to consumers or businesses?
8. Brand image, reputation and customer loyalty
9. Product quality and packaging
10. Price elasticity of demand-elastic or inelastic?
137
What are the 2 pricing strategies that can be used by firms when they are first launched into the market?
1. Penetration pricing
2. Price skimming
138
What is penetration pricing?
When low prices are charged to help attract customers.
Used to gain a foothold in the market and establish market share.
139
What types of products is penetration pricing used for, usually, and give an example?
New food products
E.g., Terry's Chocolate Orange
140
What is price skimming?
When high prices are charged to gain a high profit margin from early adopters.
141
When is price skimming commonly used?
When the business has already established a strong brand image and has a loyal customer base.
142
Give an example of a business that might use price skimming.
Apple.
143
Define early adopters.
People who are willing to pay high prices to purchase products when they are first launched.
144
In what market are early adopters very common?
Technology markets e.g., games consoles and phones.
145
How does price change with demand/time using a price skimming strategy?
Higher demand/time= higher price
146
How does price change with demand/time using the penetration pricing strategy?
Lower demand/time= lower price
147
List the first 4 other pricing strategies and methods apart from price skimming and penetration pricing.
1. Price leadership and price taking
2. Predator (or destroyer) pricing
3. Premium pricing
4. Seasonal pricing
148
List the last 5 other pricing strategies and methods apart from price skimming and penetration pricing.
5. Loss leaders
6. Psychological pricing
7. Price discrimination
8. Cost-plus pricing
9. Mark up
149
What are large market-leading firms known as?
Price leaders
150
What are smaller rivals in a market called?
Price takers
151
Define price takers.
A business that has no option but to charge the ruling market price.
152
What is a market leader?
The business with highest market share in a particular market.
153
What are the 4 categories of position a business can find itself in which influence the control it has over pricing?
1. Price taker
2. Price maker
3. Price leader
4. Price follower
154
What is a price marker?
For a price maker, the business has a strong enough competitive position to be able to fix its own price – either higher or lower than the competition.
155
What is a price leader?
Often a market leader whose market share is so strong that its price changes are closely followed (and often copied) by rivals
156
What is a price follower?
A business that just follows the price-changing lead of the market leader (ignoring the rest of the competition)
157
What is price leadership and price taking?
Large market-leading firms, known as price leaders, can set the price in a market as they have the market power.
Smaller rivals, known as price takers, which do not have as much market power, take the accepted price and follow.
158
Why are price leaders able to set the price in the market cause they have the market power?
This may be because they have a strong USP, brand image or customer loyalty.
159
What is predator (or destroyer) pricing?
Firm sets very low prices to drive other firms out of the market.
Nn illegal pricing strategy that relies on undercutting the competition long enough to force them out of the market.
160
How is predatory pricing successful?
By setting prices below costs, other businesses are unable to compete and may have no choice but to exit the market.
161
What is premium pricing?
Charging high prices for high quality goods, for example, luxury cars, holidays, clothes or jewellery.
162
What is seasonal pricing?
Different prices are charged depending on the level of demand.
In peak seasons higher prices can be charged and vice versa.
163
What are loss leaders?
A short-term tactic where firms set lower prices than usual to attract customers who they hope will buy other full-priced products
164
Where are loss leaders pricing methods very common?
Supermarkets
Mobile phone contracts where handset is free
Mobile games where the game is free, but then you have in-app purchases.
165
What is psychological pricing?
Prices are set to appear lower to the consumer, for example, products sold for £9.99, or not including add-on fee.
166
Give an example of psychological pricing.
Advertising the entrance fee for paintballing but not the cost of paintballs needed to play.
167
What is price discrimination?
Higher prices are charged to some customers for the same product/service, for example, taxis, train fares.
168
What is cost-plus pricing?
The average cost of producing a product plus a sum to ensure profit is made.
169
What is mark up?
The percentage added to a product to ensure a profit is made.
170
Why do many firms not like to compete on price?
It may trigger a price war.
171
Why is price one of the most important part of the marketing mix?
It is a key part of the consumer buying decision.
172
What is promotion?
The process of communicating with customers or potential customers to increase sales through various methods, not just advertising.
173
A business may have developed an excellent product but without promotion what will happen to the firm?
They will fail to generate sufficient sales revenue.
174
What are the 2 main forms of promotion?
1. Informative promotion
2. Persuasive promotion
175
What does informative promotion have the aim of?
Giving consumers information about the product to increase consumer awareness of the product and its features
176
What does persuasive promotion have the intention of doing?
Encouraging consumers to purchase the product emphasising the product’s brand and benefits to the consumer.
177
What are the 2 TYPES (not forms) of promotions?
1. Above-the-line promotions
2. Below-the-line promotions
178
What is above-the-line promotion?
All types of advertising through various different media including newspapers, magazines, television, radio, the cinema, online and billboards/posters.
179
What is below-the-line promotion?
All other types of promotions used by a firm, such as sponsorship, sales promotions, public relations (PR), merchandising, direct marketing and personal selling.
180
What 5 things is promotion trying to achieve?
1. Inform the customer (about prices, location, product features)
2. Create awareness
3. Build a brand image
4. Create customer loyalty
5. Persuade the customer (to purchase the product for 1st time or more regularly).
181
What is branding?
Process of building an image that helps to differentiate a product from its competitors through a recognisable name, sign, symbol, design or slogan linked to that product.
182
Firms can spend many years building their brand at great expense.
What are the main benefits of branding?
1. Higher demands and sales
2. Helps maintain market share and helps product to stand out from competition
3. Ability to charge higher prices and maximise profit margins
4. Brands create customer loyalty and make products more price inelastic
5. Brands give value to the business
183
List the first 4 promotion methods available to businesses.
1. Advertising
2. Sponsorship
3. Sales promotions
4. Public relations
184
List the last 5 promotion methods that are available to businesses.
5. Direct marketing
6. Personal selling
7. Merchandising
8. Websites, banners and pop-ups
9. Social media
185
What is advertising?
Paying for a message to be shown through various media, such as television, radio, magazines, newspapers, etc. It can be expensive.
186
What is a sponsorship?
Providing financial assistance to an individual, event or organisation in return for exposure and advertising.
187
What are sales promotions?
Short-term sales initiatives to boost sales.
188
Give some examples of sales promotions.
Various offers such as:
'buy one, get one free' (BOGOF).
Competitions
Collect the tokens
Loyalty cards
Credit terms
Coupons
189
What are public relations (PR)?
Creating a favourable image of the company without paying for advertising
190
Give examples of public relations (PR).
Launch events
Favourable reviews and news stories
Celebrity endorsements
Product placement on TV and films
Trade fairs and exhibitions
191
What is direct marketing?
Sending messages directly to a known consumer; often used alongside a database of customer details through methods such as letters, emails and telephone
192
What is personal selling?
Using specialist sales staff to speak directly to consumers
193
What is merchandising?
Point-of-sale displays and products with the brand image on
194
What social media can be used for promotion?
Any, some include:
Facebook pages
Twitter
Instagram
Youtube etc.
195
Give some advantages of advertising.
Wide coverage
Control of message
Repetition of message
196
Disadvantages of advertising.
Often expensive
Impersonal
One-way communication
197
Where is sponsorship common?
In the world of arts and sports
198
Who should sponshorships benefit?
Both sides
199
Advantages of sponsorship.
Builds awareness
Consolidate expertise in sponsor jobs
Excellent targeting tool
200
Disadvantages of sponsorship.
Potential controversies
No guaranteed returns
201
Advantages of sales promotions.
Effective at achieving quick boost in sales
Encourages customers to trial a product or switch brands
202
Disadvantages of sales promotions.
Sales effect may only be short-term
Customers may come to expect or anticipate further promotions
Hidden costs for short-term incentive
203
What is the main aim of public relations (PR)?
To achieve favourable publicity about the business
Build image and reputation of business and its products.
Communicate effectively with customers and other stakeholders.
204
Advantages of PR.
Influences audience
Reach outlets
Cost-effective to reach large audience compared to 1 ad.
205
Disadvantages of PR.
No direct control over message portrayed by media
No guaranteed results
Difficult to evaluate effectiveness of activities
206
Advantages of direct marketing.
Can personalise marketing message
Cost-effective if customer database is well managed
Focus limited resources on targeted promotion
207
Disadvantages of direct marketing.
Response rates vary enormously
Negative image of junk mail and email spam
Database expensive to maintain and keep accurate
208
Give examples of how personal selling takes place.
By telephone
At meetings
In retail outlets
Knocking on doors
209
What type of products rely heavily on personal selling?
Highly priced, low volume and highly technical products
E.g., Cars
Office equipment (photocopiers)
Many products that are sold by businesses to other industrial customers.
210
Advantages of personal selling.
High customer attention
Message is customised
Opportunity to close sale
Potential development of relationship
211
Disadvantage of personal selling.
High cost/expensive
Labour intensive
Can only reach a limited number of customers.
212
When does merchandising usually operate?
At the "point-of-sale".
213
Advantages of merchandising.
Brings customers in
Increased sales
Attractive sales
214
Disadvantages of merchandising.
Demand on staff
Expenses for installing new things and creating new products to advertise the business
Once is not enough so is expensive
215
What is a website?
A site with your products displaying online to make it easier to access from home-could be used to create and online shop
216
What are banners?
Spread on random websites to increase the number of people who are aware of your business
217
What is a pop-up?
Make your ad visible in a small snippet, encouraging people to purchase your products.
218
Advantages of websites, banners and pop-ups.
Can generate impulse purchases
Seen by lots of people (visibility)
Cheap
219
Disadvantages of websites, banners and pop-ups.
Pop ups and banners are annoying so maybe people may not want to buy because they are annoyed at it coming up on website
People can block pop ups and banners
220
What is social media?
Online websites and applications that enable users to create and share content or to participate in social networking.
221
Advantages of social media.
Generate business leads
Social media is affordable, more so free
Increases brand awareness (international)
Can interact w/customers w/a personalised message
222
Disadvantages of social media.
Can ruin reputation
Demands constant attention
Risks customer's or company's privacy
Trends can be difficult to keep up with.
223
List the first 4 things things which influence promotion methods used.
1. What is the business trying to achieve, for example, be informative or persuasive? Boost sales or build brand loyalty?
2. The promotion budget available and the cost of methods
3. Target audience and the best way to reach them
4. Customer expectations, tastes and fashions
224
List the last 4 things which influence promotion methods used.
5. Brand image of the company
6. Methods used by competition
7. Methods complementing one another
8. Legislation, for example, cigarette companies and companies making unhealthy foods face restrictions in the UK on where and when they can advertise
225
All good promotion methods should fulfil all of the criteria of which model to be effective?
AIDA
226
What does AIDA acronym stand for?
A-Attention
I-Interest
D-Desire
A-Action
227
What does attention in the AIDA mean?
Attract the attention of the customer with exciting and interesting messages
228
What does interest in the AIDA model mean?
Raise customer interest by demonstrating the benefits of the product to the consumer
229
What does desire mean in the AIDA model?
Convince customers that they desire the product and that it will satisfy their needs
230
What does action mean in the AIDA model?
Lead customers towards taking action and/or purchasing the product
231
What does promotion help a company do in the market?
Establish its position in the market
232
What does promotion allow a firm to do?
Build a brand, which will differentiate them from rivals
Build customer loyalty
Create price inelasticity.
233
What did prolific (creative) investor Warren Buffet say/imply about promotion?
‘It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.’
234
Who are people in a business?
The staff a company has who come into contact with customers
235
How do the people in a business have a major impact on the firm?
Will have a major impact on firm's quality of customer service and therefore brand image and customer loyalty.
236
What are the people in a business impacted by?
Firm's human resource policies, such as:
-Recruitment
-Training
-Motivation
-Remuneration methods
237
What does process mean in a business?
How the company deals with its customers and delivers the product or service.
238
What areas does process cover?
Communication
How the customer is dealt with
How quickly and effectively they have their needs satisfied
After-sales services etc.
239
What is physical environment/evidence?
Tangible features of the service that can enhance the customer's experience.
240
Give some examples physical environment/evidence in a business.
Building company operates in
Store layout and displays
Staff appearance and uniform
USP
Packaging
241
What do the 5 main influences on a marketing mix include?
1. The position in the product life cycle and the Boston Matrix
2. Type of product
3. Marketing objectives
4. The target market
5. Competition and positioning
242
What is digital marketing?
Marketing using various technology such as the internet, social media, search engine advertising, etc.
243
What is E-commmerce?
Buying and selling goods and services through the internet.
244
List the first 5 advantages of e-commerce.
1. Improved cash flow and liquidity
2. Able to compete internationally
3. Cheaper to target consumers
4. Able to target wide range of consumers quickly
5. Less stock needs to be held.
245
List the last 5 advantages of e-commerce.
6. Reduced costs through lower overheads e.g., rent
7. Ability to build databases of consumer details more easily
8. Easier and cheaper to use direct marketing
9. Use of emails, videos and social media creates large scale international exposure
10. Viral marketing possible-cost for marketing cheaper online
246
List the 7 disadvantages of e-commerce.
1. Increased and international competition
2. Security of personal details and data
3. Costs of set-up
4. Staff skills and training required
5. Difficulty reaching some market segments
6. Impact on customer service due to lack of direct contact with the consumer
7. Consumers are unable to try or touch products
247
What is M-commerce?
Mobile commerce
The buying and selling of goods and services through wireless handheld devices such as smartphones and tablets.
Enables users to access online shopping platforms without the use of a desktop computer.
248
List the 7 advantages of m-commerce.
1. More accessible for consumer and producer
2. International audience
3. Easier to adjust to market demands
4. Easier to go ahead of competition
5. Lower start-up costs
6. Consumer data
7. Quicker to earn money as you can accept multiple orders at once
249
List the 4 disadvantages of m-commerce.
1. More international competition
2. Fraud uncertainties and security concerns
3. Demands technology access for consumers
4. Less customer interaction
250
What are the 3 main reasons place is important?
1. Business needs to ensure that its products can reach existing and potential customers.
2. Consider how and where customers prefer to buy the product.
3. Looking at stock availability, the price for shipping and the speed at which it may be shipped.
251
List the 5 factors influencing the choice of distribution method.
1. Profit margins
2. Distribution costs
3. Control required over display and brand image
4. Proximity
5. Convenience for customers and type of product
252
Define profit margins.
The amount by which revenue from sales exceeds costs in a business.
253
What are distribution costs?
Cost incurred by a producer incident to activities connected with placing a finished product in the hands of a customer.
254
Give an example of how control is required over display and brand image.
Tesco and Levi's court battle and high-end fashion brands wanting to only be available in suitable retailers and their own stores.
255
What is proximity?
Nearness in space, time or relationship.
256
Give an example of how convenience for customers and type of product is an important factor influencing choice of distribution method.
Convenience goods must be easier for customers to access as they often rely on impulse purchases.
257
Apart from the factors which affect choices of distribution methods, what other 6 things will influence the type of distribution method a business may use?
1. Finance
2. Image
3. Legal restrictions
4. Product
5. Stage of the product life cycle
6. Size of the business
258
What are methods of distribution?
Methods a firm could use to get their goods to the consumer.
259
Give some methods of distribution.
Direct to the consumer through various methods such as:
1. E-commerce
2. Using retailers
3. Selling to retailers through wholesalers
4. Using agents
260
What is a chain of analysis?
Takes knowledge
Puts it into context (into application)
Allows us to analyse the impact of a factor on the business
261
Why are analysis chains important?
Examiners continually refer to chains of analysis or chains of reasoning when showing top mark answers.
262
What is the 1st channel of distribution?
Manufacturer to Retailer to Consumer
263
What is the 2nd channel of distribution?
Manufacturer to Wholesaler to Retailer to Consumer
264
What is the 3rd channel of distribution?
Manufacturer to Consumer
265
What is the 4th channel of distribution?
Manufacturer to Agent to Consumer
266
What is an agent used more likely for?
Properties
267
What is a manufacturer?
Someone who supplies the product or service.
268
Give an example of a manufacturer.
Cadbury produces chocolate
Direct line provides insurance
269
What does a manufacturer selling directly to consumers help do?
Maximise profit margins as profit is not lost in an intermediary's (go-between) mark ups.
270
What is the downside of a manufacturer selling directly to consumers?
It is often difficult to achieve for many types of products.
271
What do wholesalers do in the channels of distribution?
These firms purchase products in large quantities (bulk) and supply them in smaller quantities to retailer (break bulk)
272
Why do producers prefer to sell to bigger wholesales rather than to lots of smaller retailers?
It reduces their distributon costs and time taken to negotiate.
273
What is it called when a wholesales supplies bulk into smaller quantities to retailers?
Break bulk
274
Give examples of wholesalers.
Costco
Latifs
Makro
275
How do wholesalers make money?
Buying at lower price from producers/manufacturers and adding a profit margin onto the price paid by the retailer.
276
What is a retailer?
Shops that sell goods/services to the final customers
277
Give examples of different type of retailers.
Supermarkets such as Asda
Retail chain stores such as Topshop
Franchises such as McDonalds
Small independent shops
278
What do retailers help producers/manufacturers do?
Near end of the chain of distribution.
Help producers get their products to their consumers on a wider scale
278
What do retailers help producers/manufacturers do?
Near end of the chain of distribution.
Help producers get their products to their consumers on a wider scale
279
What is an agent?
A firm that never actually owns the good but will facilitate buyers and sellers coming together to make a deal happen.
280
Give examples of agents.
Estate agents (property)
Travel agents (holidays -finding good hotel deals and flights).
They help bring all the different holiday firms together making it easier for the consumer and producer/manufacturer.
281
Do agents hold stocks?
No
282
How do agents earn money?
Earn commission based on sales achieved.
283
In what sector do agents tend to operate in and give examples?
Tertiary sector (services)
E.g., travel, insurance, publishing
