Unit 4 - Marketing Flashcards
(60 cards)
1
Q
Market Research
A
- The collection, presentation and analysis of information relating to the marketing and consumption of goods and services
2
Q
Purpose of Market Research
A
- Identify & understand customer needs - can supply products that meet customer needs or can anticipate needs
- Identify gaps in the market - can gain competitive edge & more revenue
- Reduce Risk - reduce risk of failure
- Inform business decisions - can provide information to improve decision making
3
Q
Primary/field research
A
- Gathering of new information that doesn’t exist
4
Q
Methods of primary research
A
- Questionnaires - list of written questions, can be done via post, telephone & in person
- Focus groups or customer panels - number of customers attend a discussion led by market researchers - generalizing can be done but is cost-effective
- Observation - market researchers watch behavior of customers
- Test Marketing - selling a new product in a restricted geographical area to test sales levels & receive feedback
5
Q
Secondary/desk research
A
- Collection of data that already exists
6
Q
Methods of secondary data
A
- Business websites - business history, price lists, product info
- Competitors - annual reports, price lists, product catalogues
- Internal data - sales, stock data, budgets, previous research
- Government publications - population & economic data
- Commercial publications - Data gathered by market researches then sold to businesses
- Media - Newspapers, magazines, directories & TV
7
Q
Qualitative data
A
- Information about attitudes, beliefs and intentions, usually written in words
8
Q
Quantitative data
A
- Information that can be quantified/that is expressed in numbers
9
Q
Role of social media in market research
A
- Playing an increasing role
- Businesses can gather information in a cheap way
- Most social medias have features to analyze trends and conduct market research
10
Q
Importance of reliability of market research data
A
- Often depends on number of people questioned and whether they represent the views of everyone
- Businesses use a sample of people to represent the market or the data will be biased and unreliable
- Answers might also be changed in interviews to make interviewers hear what they want to hear
11
Q
Market
A
Set of arrangements that allows buyers and sellers to communicate and trade in goods and services
12
Q
Marketing
A
Identifying customer needs and satisfying them profitably
13
Q
Importances of marketing
A
- Satisfying customer needs
- Building customer relationships
- Keeping customer loyalty
- Product and market orientation
- Market share and market analysis
- Niche marketing and mass marketing
- Responding to changes in the market
14
Q
Importance of marketing; Satisfying customer needs
A
- Businesses have to satisfy customers’ needs and wants
- Have to produce goods and offer services that customers are prepared to buy
- Identify wants and needs via market research
15
Q
Importance of marketing; building customer relationships
A
- Establish bonds with customers via effective communication
- Businesses can; personalize communication, say thank you, know their customer, connect regularly, build trust & take complaints very seriously
16
Q
Importance of marketing; keeping customer loyalty
A
- is important to retain customers for future purchases
- Reward cards - receive rewards with purchases
- Free gifts - loyal customers can be given free gifts
- Charitable donations - make donations to charity as a result of a customer’s purchase
- Partnership deals - Set up deals with other businesses to share cost or give benefits to customer loyalty
17
Q
Product orientated
A
- Where a business focuses on the design and manufacture of the product itself rather than the needs of customers
18
Q
Market orientated
A
- Where a business focuses on the needs of consumers when developing products
19
Q
Importance of marketing; market share and market analysis
A
- Businesses interested in their market share
- Market analysis to find out features of characteristics of a market - should be ongoing ideally due to the dynamic nature of markets and business
20
Q
Market share equation
A
- Market share = Total product or business sales ÷ Total sales in the Whole Market (x100 for %)
21
Q
Mass markets
A
- Very large markets in which products with mass appeal are marketed
22
Q
Niche markets
A
- Smaller market usually within a large market or industry
23
Q
Importance of marketing; responding to changes in the market
A
- Businesses need to monitor markets to identify changes and adapt
- Changing customer needs - consumers’ income changes or become better educated & sophisticated, can be influenced by social habits, fashions changing over time, new technologies create different demands
- Changing customer/consumer spending patterns - businesses can gather their own data on spending patterns
- Increased competition - behavior of competitors needs to be monitored carefully
- Competition putting businesses under pressure - businesses can lower prices, make products appear different to rivals, offer better quality products, use more powerful/appealing advertising & offer better quality services to get customers to go to them as opposed to rivals to not lose market share
24
Q
Market segments
A
- Part of a whole market where a particular customer group has similar characteristics
25
Market Segmentation
- The processing of dividing a broad target market into specific sub-groups (segments) based on shared characteristics e.g. age, gender, income
26
Location (geographical) segmentation
- Different customers are likely to have different needs depending on where they live e.g. hot climates vs. cooler climates, cuisine & more
27
Demographic segmentation
- Dividing markets on:
- Age
- Gender
- Income
- Social class
- Ethnic origin
- Religion
28
Lifestyle (psychographic) segmentation
- Grouping customers through lifestyles when geographic & demographic meet limitations e.g. television broadcasters target sports channels & lovers
29
Benefits of market segmentation
- Can increase revenue - can charge higher to specific groups
- Customers may be more loyal - will be more loyal if product is designed for them
- Business may avoid wasting promotional resources - cuts down resources used when only targeting people who are interested
- Can market a wider range of goods to different customer groups
30
Marketing mix
- Elements of a firm's marketing that are designed to meet the needs of customers
31
4 elements of the marketing mix
- Product
- Price
- Place
- Promotion
32
Product development process
- Generating ideas
- Analysis - based on whether ideas are marketable, possible, legal and a fit with the current portfolio
- Development - possible modifications in design alongside building & testing
- Test marketing - testing the product in a small section of the market that represents the whole market
- Commercialization and launch - final touches on product
33
Packaging
- Important because it can be linked with quality
- Factors to consider:
- Environment - materials minimized & should be recyclable
- Cost-effective - weight and shape should not be bulky to keep costs down
- Information - labels need to comply with law and give information
- Design - should be appealing and reflect quality of product + identify the brand
- Convenience - should be easy to handle, open & use
- Protection - strong packaging for fragile or perishable goods
34
Product life cycle
- Development - sales at 0 and costs are high, can damage cash flow
- Introduction - costs still high & pricing charged at start may vary
- Growth - sales will start to grow if successful, can start to recover from development costs + costs are likely to fall & profit can be made, sales can grow less quickly towards end
- Maturity and saturation - sales start to level off, development costs recovered, profit is being made & cash flow improving, price likely to fall and business may be forced out of market
- Decline - sales of product decline and eventually taken off market
35
Extension strategies
- Methods to lengthening the life of a product before it begins to decline:
- Finding new markets
- Finding new uses for a product
- Modifying the product
- Develop the product range
- Change the appearance or packaging
- Encourage more frequent use of product
36
Product portfolio
- Range of products a business is currently marketing
37
Boston matrix 4 categories
- Stars - valuable to business w/ high market share and high market growth hence potential to grow - likely to profit
- Cash cows - mature, high market share but low market growth - steady income flow for business
- Question marks - low market share but high market growth - have potential and can do well if right action is taken
- Dogs - end of life cycle - low market share and low market growth - likely to replaced with new products
38
Cost-plus pricing
- Involves adding a mark-up to total costs
- Common with retailers
- Ignores market conditions
39
Penetration pricing
- Business introduces a new product & charges a low price for a limited period - gets product established in the market
- Price is eventually raised
- Helps to gain customers and large retailers & bulk buyers w/lower costs
- Industries with mass markets favor such
- Profit margins squeezed & risk of negative responses when prices rise
40
Competition-based pricing
- Businesses take a close look at competitor prices when pricing
- Used by businesses in competitive markets
- Can charge the same as competitors to be safe & avoid price wars
- Market leader can set a price for others to follow - price leadership - likely to be most dominant firm & lowest-cost producer
- Businesses can engage in non-price competitions e.g. promotions
- Business can lower price to drive out competition - predatory pricing
41
Skimming
- Businesses can launch a product into a market at a high price for a limited period
- Generates high levels of revenue w/new product - takes advantage of people prepared to pay higher prices to be the first
- Used by tech & pharmaceutical companies
- Prices eventually fall
42
Promotional pricing
- Lowering the price of a product for a short period of time to draw in customers
- Can be to cut stock, generate cash quickly, generate renewed interest, attempt to win a larger share of the market
- Can be done in the form of discounts & sales - temporary discount, psychological pricing - 49 vs 50, loss leaders - draw customers in to buy other products
43
Distribution channels
- The route taken by a product from the producer to the customer
- Goods can be sold directly, involve intermediaries or retailers & wholesalers
44
Retailing
- Businesses buy goods from manufacturers or suppliers & sell straight to consumers
- Retailers use bulk breaking - bulk buying & selling small quantities
- Sell in locations convenient to customers
- Add value to products by providing other services e.g. packing, delivery, repair
45
Types of retailers
- Independents - usually small outlets, can be general stores & usually owned by sole traders found in malls or towns
- Supermarkets - stores selling 20,000 product lines & usually cheaper than independents selling same sorts of products because they can buy in bulk, located on outskirts of towns& cities
- Department stores - larger stores split into distinct departments, aim for good quality products, often in city centers
- Multiples or chain stores - one owner opens multiple stores selling same range of goods, much is standardized, bulk buy from manufacturers
- Superstores or hypermarkets - very large stores located on outskirts selling wide range of goods, generally cheaper than supermarkets w/wider product range
- Kiosks & street vendors - very small outlets selling limited range of goods, can be in streets or airports, operate w/low set-up cost & minimal overheads
- Market traders - small time businesses selling goods from market stalls - ow overheads & cheap
- Online retailers - e.g. Amazon - buy goods from manufacturer & sell online to customers
46
E-tailing/E-commerce
- Use of electronic systems to sell goods & services
- Can be business to consumers
- Can be business to business
47
Benefits of online distribution to consumers
- Cheaper because online retailers often lower costs
- Consumers can shop 24/7
- Generally huge amount of choice
- People can shop from anywhere w/Internet
48
Benefits of online distribution to businesses
- E-tailers might not have to meet costs of operating stores
- Lower start-up costs
- Lower costs to process transactions - automated systems
- Less paper needed for documents
- Payments made & received online
- Can offer goods to a wider market
- Can serve customers 24/7
- Have more choice when locating their operations
49
Disadvantages of online distribution
- Business faces increasing competition since selling online is cheap & can be done from anywhere
- Lack of human contact & dependence on delivery services where e-tailers lack control
- Can be technical problems online
- Security rick as computer hackers gain access to sensitive information
- Consumers can't touch or look at goods before purchase & problem of receiving deliveries
- Customers can experience poor after sales service
- Customers w/o internet are excluded
- Fake traders may be more difficult to identify online
50
Other distribution methods
- Direct selling - market products directly to consumers e.g. direct mail, internet, telephone selling, door-to-door selling, shopping parties, mail order catalogues, direct response adverts
- Wholesaling - producers use wholesalers to distribute goods - buy from manufacturers & sell to retailers
- Agents or brokers - links buyers to sellers
51
Choosing appropriate distribution channels
- Nature of product - services sold directly to customers, fast-moving consumer goods can't be sold directly by manufacturers / need wholesalers & retailers, high-quality products choose outlets carefully due to image, some products need demonstration
- Businesses usually choose cheapest distribution channel & prefer direct channels
- Intermediaries usually used for mass markets & smaller markets sell directly
- Some want control over distribution
52
Above-the-line promotion
- Advertising using the media e.g. newspapers & magazines & radio
53
Below-the-line promotion
- Other forms of promotion not using the media e.g. merchandizing, compounds, direct mailing
54
Advantages of above-the-line promotion
- Huge audiences can be reached
- Use of products demonstrated
- Opportunity to target groups
- Reader can refer back to- Adverts can be linked to articles & features
- Opportunity to target specialist magazines
- Relatively cheap
- Sound & movement can be used
- Can be updated regularly
- Measuring hit & response
55
Disadvantages of above-the-line promotion
- Very expensive
- Message may be short lived
- Some viewers avoid TV adverts
- Delay between adverts & shopping
- Rivals can advertise as well
- Message can be limited
- Poster can be damaged
- Can be ignored
56
Methods of below-the-line promotion
- Sales promotions - incentives to buy products e.g. free gifts, coupons, loyalty cards, competitions, BOGOF offers, money off deals
- Merchandising & packaging - Product layout, display material, stock
- Direct mailing
- Direct / personal selling
- Exhibitions & trade fairs
57
Public relations
- Businesses can communicate w/stake holders using PR
- Press release - some information presented to the media e.g. to write an article
- Press conference - Representatives face media & present information verbally
- Sponsorship - Companies attract publicity by linking w/sporting events - brand is projected globally
- Donations - donations made to improve image
- PR is a cheap method of promotion
58
Use of technology in promotion
- Online targeted advertising - adverts given to people who are likely interested based off browsing habits & data collected
- Viral advertising - people pass on messages electronically for exponential growth
- Social media - many active users & brands - gather info & target adverts, is relatively cheap, huge reach, can draw traffic, instant communication
- E-newsletters - documents sent to interested parties w/range of content
59
Branding
- Giving a product a name, term, sign, symbol, design or feature for it to be instantly recognized & differentiated from competitors
60
Use of promotion strategies in different market segments
- Advertising - used in most market segments but differs on market
- Sponsorship - markets of product positioning e.g. Rolex & golf
- Product trials - people try at a reduced rate - usually done w/ subscriptions
- Special offers - price discounts - often in fast moving consumer goods
- Branding - all market segments
