Unit 5- Marketing Flashcards
(30 cards)
What are the two stages of customer needs?
- Identify them: Through market research
- Satisfy them: Adapting the marketing mix (product, price, promotion)
Why is it important to identify and satisfy customer needs?
- Be competitive compared to rivals
- Avoid costly research and development mistakes
- Increase sales
What is segmentation?
- Process of dividing the market into smaller groups of consumers w/ similar needs and wants
Main types of segmentation?
- Location
- Income
- Demographics (age and gender)
What is the point of market research?
- Workout the likely demand
- See if there’s competion
- See what target market looks like ( supports particular type of segmentation )
Types of market research?
- Questionnaires
- Surveys: +ve: quantitive, easier to analyse
-ve: doesn’t give you depth - Interviews: +ve: Get more depth
-ve: Take a long time to do - Focus group: +ve: deeper opinions, qualitative info.
-ve: Are ppl representative of your target market - Internet Research, secondary
- Newspapers, secondary
Def Market size?
- Potential number of customers you could sell you product to
Def Market share?
- % of the market that a business already has
Marketing mix, Price, Law of demand?
If prices go up, demand goes down
e.g: Prices go up by 10%, demand falls by only 1% = more revenue ☺️
Def of Price skimming
Price skimming: Start w/ high price and reduce over time, prob bc you have brand awareness
+ve & -ve of price skimming?
+ve: Recoup R & D costs
- ve: Alienates customers, not willing to pay high costs therefore they may wait until you’ve skimmed price
Def of price penetration
Start w/ low price and increase it over time
+ve & -ve of price penetration
+ve:
•Allows to grow awareness
• May get consumers to repeat buying from you and increase brand loyalty over time
-ve:
• If product quality isn’t good may struggle on maintaining demand level, when you then increase the price
Def of competitive pricing
When you set prices around same level as rivals
+ve & -ve of competing pricing
+ve:
• Allows you to maintain market share
-ve:
• Need to have a USP or differentiate your product, therefore meaning more R&D, meaning more cost
Def Loss leader pricing
When you reduce prices to cost price of even below that
Encourage customers into your store w/ hope that they buy other products w/ higher margins on them
+ve & -ve of Loss leader pricing
+ve:
• Gets web traffic or foot full
-ve;
• If customer only buys one loss leader good then it’s useless to you
Def of Cost plus pricing
When add a market up based on cost to achieve the price
+ve & -ve of cost plus pricing
+ve:
• If sale is made guaranteed profit
-ve:
•Could less to competitor price, may lead to a price that is v. high bc you had such a high markup and could ruin your demand
What do pricing strategies depend?
Product life cycle - Where you are?
e.g:
•Introduction stage, no awareness, use price penetration
•Maturity stage, may use competitive pricing
•Decline stage, may use loss leader if you have a range of products
- Level of competition
e.g:
• Many rivals, use competitive pricing
• No rivals, use price skimming - R&D costs
e.g:
• If you have rlly high R&D costs, may use price skimming to recoup R&D costs otherwise may have a cash flow issue
+ve of product development?
• Increased customer satisfaction
• Increased sales
• Increased market share
•Improved brand image
-ve of product development?
• Costs, high R&D costs
• Some customers may not like the new development
+ve of product differentiation?
• Improves brand image:awareness
• Improved costumer loyalty
• Increased sales
• Reduced marketing costs, improved net profits
Stages of product life cycle?
R&D:
• High market research
• Product development costs
• No sales
Introduction:
• Low sales, depends on initial awareness
Growth:
• See sales growing
• More advertising needed
Maturity:
•Peak of sales
Decline:
• Avoid by having extension strategies
•When sales are reducing
