Unit 3 - marketing

Question 1

what is it important to do when making marketing decisions

Answer 1

• your marketing objectives link to coperate objectives
• gather data to ensure the decisions you make are appropiate
• use your data to form a hypothesis
• test the options - check your resaerch is valid
• once launched should review and potentially start over again with new objectives if unsuccessful

Question 2

benefits of advertising via social media

Answer 2

• free and cheap
• advertise towards particular customers
• spread information worldwide quickly
• gain more customers
• no agencies needed

Question 3

6 ways that marketing use new technology

Answer 3

• analytics - a free service which identify patterns of how cutomers engage with the business and online
• dynamic pricing - enables a business to adjust its prices based on current market market demands
• audience reach - business more able to communicate and target audience based on decisions consumers make online
• CRM - managers interactions with customers and potential customers, help build relations
• Campaign testing - allow business to set up one or more marketing campaigns to test what is the most effective
• competitor analysis - software which enables business to track competitors

Question 4

define greenwashing

Answer 4

behaviour or activities that make people believe that a company is doing more to protect the environment that it really is

Question 5

define monopoly

Answer 5

when one business dominates the whole market - it has 100% concentration

Question 6

what are the 5 ways to regulate monopolistic power

Answer 6

1. price capping - limiting price increases
2. regulation of mergers
3. breaking up monopolies
4. investigations into cartels and unfair practise
5. nationalisation - government ownership

Question 7

define commidity

Answer 7

a substance or product that can be traded, bought or sold

Question 8

what marketing decisions can help improve its competitiveness

Answer 8

• Design - Some firms are highly competitive due to their products that are differentiated by their design. UK manufacturers have high wage rates so can’t compete on price alone, production costs are too high compared with rivals in countries where the wages are lower so must use a design as USP
• brand image - markets brand image is crucial. Many consumers can’t tell the difference between tesco own labelled and premium priced brand,
• marketing mix - marketing strategy businesses look at the marketing mix. Ensuring the business gets the right price for the correctly designed product, promoted correctly and distributed to the right places to reach the target audience

Question 9

what does a marketing process allow a business to do

Answer 9

• understand the market in which it operates in
• understand what customers want
• understand its relative strengths and weaknesses compared to its competitors
• build a strong brand
• build relationships with customers
• understand the nature of pricing its products

Question 10

what are the 6 marketing objectives

Answer 10

1. sales volume and value
2. market size
3. market sales and growth
4. market share
5. brand loyalty
6. enhance or reposition a brands image

Question 11

internal influences on marketing objectives

Answer 11

• pressure to increase market share and sales growth
• new corporate objectives set
• development on an innovative product
• new financial objectives

Question 12

external influences on marketing objectives

Answer 12

• changes in fashion or taste
• changing competitors actions
• changing economics pressures
• changing natural environment

Question 13

what are the 4 different types of markets

Answer 13

• local market - small local companies care very little about size or value of national market
• national market - other firms are more likely to be concerned with the national market, access to large supermarkets enables access to national market
• physical market - buy face to face, all markets used to be physical
• electronic/virtual market - increase number of virtual markets, london stock exchange is now on computers

Question 14

what are the factors affecting demand

Answer 14

• price - can affect demand in 3 ways. Higher the price the more people who cant afford it, higher the price the less good value the item will seem, price tag you put on gives message about its value
• income levels - individuals income goes up, their ability to purchase goods and services increases so demand increases
• consumer taste and preference - changing taste and preference can have a significant effect on demand for different products
• companys marketing activities - Persuasive advertising is designed to cause a change in tastes and preferences and increase demand
• competition - competitors always look to take bigger share of the market, cut their prices or introduce better or new version of product
• seasonal factors - firms expierences significant variations in sales throughout the year

Question 15

what are the 3 different type of goods

Answer 15

1. inferior - products people turn to when they are struggling but turn away when they are better off
2. luxury - products people buy much more when they can afford it
3. Normal - products or services whose sales change broadly in line with the economy. income rises these goods price rises

Question 16

what are the 2 types of market research

Answer 16

primary and secondary

Question 17

what is primary research and its pros/cons

Answer 17

• data that has been collected first-hand for a specific research purpose
• examples: focus group, interviews, survey and questionnaires

pros: aim questions directly at research objectives, lastest information
cons: expensive, risk of bias

Question 18

what is secondary research and its pros/cons

Answer 18

using existing data that was collected for a different purpose

pros: good overview of market, no/low cost
cons: data may not be regualrly updated, not tailored to own needs

Question 19

what is secondary internal research and its pros and cons

Answer 19

• records within the organization itself and can be found in various departments
  For example:
• Marketing: past advertising campaigns can be compared with sales data to assess effectiveness
• Sales: historical sales help identify trends and predict furutre performance

pros: fast, cost-effective, exclusive to the organisation
cons: outdated, incomplete or unavailable for new projects

Question 20

what is secondary external research and its pros and cons

Answer 20

• type of data is collected outside organizations

for example:
* commercial market research
* government data
* competitors

pros: quick, free

cons: out of date, available to everyone and not tailored to your business

Question 21

what are the 2 ways market research is measured

Answer 21

quantitative and qualitative

Question 22

what is quantitative research and its pros and cons

Answer 22

• based on data (numerical)
• larger samples
• obtained from forms of survey

pros: easy to analyse, numerical data provide insight to relevant trends, compared with other data

cons: focus on data rather than explaining, does not explain reasons, lack reliability if sample size and method is not vaild

Question 23

what is qualitative research and its pros and cons

Answer 23

• based on beliefs, opinions, attitudes and intentions
• focus group and interviews
• understand why consumer acts certain way

pros: essential for new product development and launches, focus on customer needs, understanding and wants, highlight issues

cons: expensive to collect and analyse, based around opinions

Question 24

what is a sample design

Answer 24

the method a researcher uses to select a representative group from a larger population to conduct research.

Question 25

name the different types of sampling

Answer 25

* cluster * convenience * judgement * quota * simply random * systematic

Question 26

what is cluster sampling and its pros and cons

Answer 26

units in the population can often be found in certain geogrpahical groups ## Footnote **pros:** * quick and easy, doesn not need complete population information, good for face-to-face **cons**: * expensive if cluster is large, greater risk of error

Question 27

what is convenience sampling and its pros and cons

Answer 27

uses those who are willing to volunteer and easiest to involve in the study. ## Footnote **pros**: - subjects are ready available, large amounts of information gathered **cons**: - prone to bias, sample is not representative for enitre population

Question 28

what is judgement sampling and its pros and cons

Answer 28

a deliberate choice of a sample ## Footnote **pros**: * good for providing illustrative examples **cons**: * very prone to bias, sample often small, cannot extrapolate sample

Question 29

what is quota sampling

Answer 29

obtain a sample that is representative for the overall population ## Footnote **pros**: * quick and easy **cons**: * not random, some risk of bias, need to understand population to identify the bias of stratification

Question 30

what is simply random sampling and its pros and cons

Answer 30

make sure that every member of the population has an equal chance of selection ## Footnote **pros**: * simple to design and interpret, calculate both estimate of population and sampling error **cons**: * need to complete and accurate population listing, not be practical if sample requires lots of small visits over the country

Question 31

what is systemic sampling and its pros and cons

Answer 31

after randomly selecting a starting point from the population between 1 and n, every nth unit is selected ## Footnote **pros**: * eaiser to extract the sample than via simple random, ensures sample is spread across the population **cons**: * costly and time consuming if the sample is not conviently

Question 32

what is STP

Answer 32

Segmentation, Targeting, Positioning

Question 33

define market segmentation

Answer 33

identifying the different part of the markets of customers needs and wants

Question 34

what is a niche market

Answer 34

subset of the market on which a product is appealed to a small group of customers

Question 35

what are the main catergories of market segmentation

Answer 35

* demographic * geographic * income * behavioural

Question 36

benefits of market segmentation

Answer 36

* focus resources on parts of a market so business can succeed * allow business to grow share in markets * helps with new product development * help make marketing mix more effective

Question 37

drawbacks of market segmentation

Answer 37

* segmentation is imprecise * dont mean to reach cutomers when identified * segments are fast changing

Question 38

name 3 main stratergies for targeting a market

Answer 38

* **Mass marketing** - target the whole market, dont break market into segments and meet all needs and wants * **Segmented (differentiated)** - target several market segments in the whole market * **Concentrated (niche)** - focus on small narrow market, achieve strong market position

Question 39

what is market positioning

Answer 39

* choose which segments to target known as value proposition * market position or map illustrates the range of positions that a product can take in a market based on two dimensions that are important to customers

Question 40

4 possible positioning stratergies

Answer 40

* offer more for less * offer more for more * offer more for same * offer less for much less

Question 41

advantages of targeting a niche segment of a product or service

Answer 41

* less competition * clear focus - target particular cutomers * builds up specialist skill and knowledge * often charger high price * profit margin often higher * customers tend to be more loyal

Question 42

disadvantages of marketing in a niche segment

Answer 42

* lack of economies of scale (lower unit costs that arise from operating at high production volume) * risk of over independence on a single product or market * likely to attract competition if successful * vunerable to market changes

Question 43

define mass market and identify its key features

Answer 43

where a business sells into the largest part of the market, where there are many similar products on offer ## Footnote **key feautres:** * customers form majority of the market * customers needs and wants are more genral * associated with higher production output and capacity * success usually associated with low-cost operation, heavy promotion, widespread distribution or market leading brands

Question 44

what is the marketing mix | 7p's

Answer 44

* **product** - everything the customer buys * **place** - using right chaneels to get product to customer * **price** - match expectations of cutomers and features * **promotion** - communicating the product offer, creating awareness and desire to buy * **people** - adding to the product by using the right people * **physical environment** - where the transaction takes place to the product and brand * **process** - make transaction convenient, effecient and effective for the customer | 7 Ps

Question 45

what are the 3 levels to any product

Answer 45

* **Core benefit** - what the product really does and how well it does it function * **Actual product** - all the feautres, details and benefits that add value (might include improve quality, convenience, effeciency, style or relatibility) * **Augmented product** - everything the business builds around the product (service, advice, after sales care, and any features that help build brand loyalty)

Question 46

what are the stages of the product life cycle

Answer 46

1. **Development** - companies do market research to find right product that meet customer needs 2. **introduction** - product is first launched, sales usually low and may be slow as product is not known 3. **Growth** - product proves popular and customers start to repeat purchase and new customers 4. **Maturity** - sales start to stabilise and promotion focuses on differentation 5. **Decline** - sales start to slow, possibly due to newer products from rivals or customers taste changes

Question 47

what is an extension stratergy

Answer 47

extend the life of the prodict before it goes into decline

Question 48

example of extension stratergies

Answer 48

* target a different market segment * develop new use for products * increase usuage of product via a different promotional method * reduce the price

Question 49

what is a product portfolio

Answer 49

helps a business undertsand what their product or service is valued as

Question 50

what are the 4 parts of the product portfolio / boston matrix

Answer 50

* **Question marks** - high market growth and high market share * **Stars** - high market rate and low market share * **cash cows** - low market growth and high market share * **dogs** - low market growth and low market share

Question 51

what is the difference between at B2C market and a B2B market

Answer 51

* B2C market - consumer expects the product or service to conform the image and deliver good value for money * B2B market - the business is selling to other businesses so it has no direct contact with the consumer

Question 52

what 3 categories are consumer goods separated into

Answer 52

* **Convenience goods** - goods that are bought out of habit within a regular process of shooping, frequent and goods are often inexpensive and widely available * **Shopping goods** - goods that require more careful consideration, probably becuase they are more expensive and bough less frequent * **Speciality goods** - one off purchase the require serious effort

Question 53

factors influencing price in the marketing mix

Answer 53

* quality of product * how much consumer wants it * consumer income * level of competition * availability of product * branding

Question 54

what are the 3 main pricing stratergies

Answer 54

* **Cost based pricing** - price is determined by adding a profit element on top of the cost of making the product * **Customer based pricing** - prices are determind by what a firm belives cutomers will be prepared to pay * **Competitor based pricing** - where compeitior prices are the main infleucne on the price set

Question 55

# Cost-based pricing define cost-plus pricing

Answer 55

* selling price of the product or service is determind by adding a markup to the total cost of production

Question 56

# Customer-based pricing what is penetration pricing

Answer 56

* **Setting a relatively low intial entry price and then increase it** * aim to encourahe customers to switch to the new product as cheaper * attract customers * increase market share

Question 57

# Customer-based pricing what is price skimming

Answer 57

* **setting a high price before other competitiors come into the market then lower it** * used for launch of new product with no competition * bought by early adopters

Question 58

# Customer-based pricing what is loss leaders pricing

Answer 58

* product priced below the cost price in order to attract customers to the further encourage them to make further purchases of profitable goods

Question 59

# Customer-based pricing what is predatory pricing

Answer 59

* prices a deliberately set very low by a dominant competitor in the market in order to restrict or prevent competition | can be illegal

Question 60

# Customer-based pricing what is psychological pricing

Answer 60

* make customers believe the product is cheaper than it really is to attract cutomers who are lloking for value (£4.99)

Question 61

# Competitor-based pricing what is competitor pricing

Answer 61

* business set prices based on the price of its compeititors to charge similar prices for goods and services

Question 62

what are the pros and cons of price skimming

Answer 62

**Pros**: * high prices help establish product * early adopters willing to pay high prices * cover the investment cost **Cons**: * expensive * image may suffer whne prices are cut * customers who bough early may be annoyed

Question 63

what are the pros and cons of price penetration

Answer 63

**Pros**: * low price may attract high sales * high sales volume help cut production costs * high sales ensure high distribution levels **Cons**: * affect brand image as seen as cheap * hard to gain distribution in more upmarket retail outlets * customers be very price sensitive

Question 64

what are the channels of distribution

Answer 64

manafactuer -> wholesaler -> retailer -> consumer

Question 65

what is multi-channel distribution and its pros and cons

Answer 65

multi-channel distribution involves a busines using more than one type of distribution channel ## Footnote **Pros**: * allows more target market segments to be reached * customers increasingly ecpects product to be vaailable via mre than one channel * enables higher revenue **Cons**: * potential for channel conflict * can be complex to manage * danger that pricing stratergy becomes confused

Question 66

what are the different methods of promotion

Answer 66

* advertising * personal selling * sales promotion * public relations (PR) * sponsorhship * direct marketing

Question 67

what is advertising and its pros and cons

Answer 67

* paid for communication * hard to get through to customers * TV, newspaper, magazines, online and billboards ## Footnote **Pros**: * wide coverage * control the message * used to build loyalty * repittion means message communictaed effectively **Cons**: * expensive * impersonal * one way communication * lacks flexibility

Question 68

what is personal selling and its pros and cons

Answer 68

* person to person basis * two way communication * meeting with potential close sales * highly priced, low volume and highly technical products rely heavily on this * Telephone, meetings, retail outlets ## Footnote **Pros**: * high customer attention * message is customised * interacitivty * persauisve impact **Cons**: * high cost * labour intensive * expensive

Question 69

what is sales promotion and its pros and cons

Answer 69

* tactical point of sale material or other incentives designed to sitmulate purchases * short term incentives to increase sales * some promotions aimed at consumers * Coupons, money off, free gifts and BOGOF ## Footnote **Pros**: * effective at achieving a quick boost in sales * encourage customers to trial a product or switch brands **Cons**: * sales effect may only be short-term * cutomers may come to expect further promotion * may damage brand image

Question 70

what is public relations

Answer 70

* activities that create goodwill toward an individual, business, cause or product * achieve favourable publicity about the business * build image and reputation of business * communicate effectively with stakeholders * promote new products, enchance public awareness, promote social responsibility

Question 71

what is sponsorship

Answer 71

* when a payment for an event, person or organisation is given in return some consideration of benefit * specialised form of public relations * common in the worlds of arts and sports * sponsorship should benefit both sides

Question 72

what is direct marketing and its pros and cons

Answer 72

* promotional material directed through mail, email or telephone to individuals households or businesses * allow business to generate a specific response from targeted groups of customers * allow business to focus on several marketing objectives ## Footnote **pros**: * focus limited resources on targted promotion * can personalise marketing message * relatively easy to measure response and success **Cons**: * response rates vary enormously * negative image of junk mal and email spam * databases epxensive to maintain and keep accurate

Question 73

what are the factors influencing promotion

Answer 73

* **target audience** - choose right method and channel to reach right people * **competition** - business may use similar channels to challenge competitiors message * **technology** - help business narrow down promotion so that it only reaches the right people * **promotion budget** - determine the methods are available and the geogrpahcial reach of the campaign

Question 74

what are product brand

Answer 74

brands associated with specific products, fast moving consumer goods brands (FMCG) are some of the best examples

Question 75

what are service brands

Answer 75

brands that add percieved value to services, either delivered face-to-face or via online

Question 76

what are umbrella (family) brands

Answer 76

brands that are assigned to more than one product, makes different product lines easily identifiable by the consumer by grouping them under one brand name

Question 77

what are corporate / own label brands

Answer 77

* refers to the practice of promoting the brand name of a corporate entity, as opposed to specific products or servcies * own label - example of corporate branding where retail outlet assigns their corproate branding to a range of goods and services

Question 78

what are global brands

Answer 78

* the ultimate brands - easily recognized and operating worldwide. They epitomize household names * these brands have familiarity, availability and stability - even if they are amended to meet local cutomers needs

Question 79

what factors influence the intergrated marketing mix

Answer 79

* position in the plc * boston matrix * type of product * companies marketing objectives * target market * compeititors * marketing positioning * budgets * staffing * external factors