03 | MARKETING ASPECTS OF NEW VENTURE Flashcards
What is a market research?
crucial to understanding the potential success of a new product or service.
What are the two types of market research (David, 2022)?
Primary and secondary research
what is a primary research?
direct interaction with consumers or third-party entities to conduct pertinent studies and gather valuable data
Primary research can be conducted in what ways?
Qualitative and Quantitative research
systematic research approach that focuses on analyzing numerical data. It uses statistical methods, enables researchers to make objective, data-driven decisions, and provides insights into cause-and-effect relationships.
Quantitative Research
Conducting surveys through various channels such as in-person, smartphones, online forms, polls, and survey software can provide valuable insights.
(quantitative research methods)
Customer Surveys
comprises carefully constructed questions created to gather valuable information from participants.
(quantitative research methods)
Binary or Rating Scale Questionnaires
affects the reliability and validity of research results by helping researchers conclude the larger population based on the sample’s characteristics
(quantitative research methods)
Sampling
aims to provide insight into the underlying reasons or motivations behind a particular phenomenon, correlation, or behavior.
Qualitative Research
gathering a small group of individuals who respond to online surveys sent to them
(qualitative research methods)
Focus Group Discussion
researcher interacts personally with the respondent by asking a series of questions to collect data
(qualitative research methods)
Individual Interviews
conducting thorough research in the actual environments where the respondents are situated. This approach entails observing consumers in their own homes.
(qualitative research methods)
Ethnographic Research
This approach helps explain, describe, or explore a specific issue, event, or phenomenon in detail within its everyday real-life context.
(qualitative research methods)
Case Study Research
cannot be answered with a yes or no response. Instead, questions are phrased as a statement that requires a more extended response.
(qualitative research methods)
Open-ended questionnaire
What is a secondary research?
uses data and insights from other sources rather than collected directly.
Most convenient and cost-effective approach to collecting a vast amount of valuable information. These include government departments and public libraries, providing the researcher free information.
(numerous sources available for obtaining secondary research data)
Public Sources
Newspapers, magazines, television media, and journals are excellent commercial information sources for secondary research.
(numerous sources available for obtaining secondary research data)
Commercial Sources
Numerous companies make their business data and information accessible through their websites or share this valuable information with dedicated business platforms. The information is readily available for anyone to access and use for research.
(numerous sources available for obtaining secondary research data)
Company Websites
There are numerous alternative sources available to gather information for research. These are published market studies, analyst reports, customer emails, customer feedback, recorded meetings, public interviews, and published blogs.
(numerous sources available for obtaining secondary research data)
Other Sources
(Market Research Development)
Market research can be carried out by following this process (McCreanor, 2023):
Step 1: Define the Problem
Step 2: Define Buyer Persona
Step 3: Prepare Questions and Conduct Research
Step 4: List Major Competitors
Step 5: Analyze the Results
Step 6: Develop a Research Report
Step 7: Make Decisions
(Product and Service Development)
According to Guillebeau (2023), there are two (2) types of customer requirements:
Service Requirement (Service) and Output Requirements (Output/Goods)
(Two types of customer requirements)
An intangible thing or product cannot be physically touched but still provides a sense of fulfillment to the customer.
Service Requirement (Service)
(Two types of customer requirements)
Physical objects or visible entities. Consumers expect products to have specific characteristics like features, performance, quality, reliability, and durability.
Output Requirements (Output/Goods)
It involves a holistic approach that includes research, design, testing, and improving the product and the service.
Product and Service Development (PSD) Process
Phases of Product and Service Development (PSD)
Step 1: Trend analysis and real-world observations.
Step 2: Consumer and market research.
Step 3: Actionable insights.
Step 4: Concept development and refinement
Step 5: Implementation and launch
Step 6: Result Assessment
(Phases of Product and Service Development (PSD))
What are steps under Step 4: Concept development and refinement?
Ideation - Evaluate the ideas with the most promising potential for success in the market.
Prototyping - Once an idea has been selected, the company must prototype its proposed product or service.
Testing - Determine if the product functions as intended or if the desired service offering appeals to the target audience.
Refinement - Once the prototype has been enriched with the analysis feedback, the final product or service can be crafted and delivered to the market.
All the money spent to manufacture a product or provide a service. (Tuovila, 2023).
Cost
process of allocating costs to various aspects of a business. It includes allocating variable costs, which change according to a particular activity, like sales or the number of employees.
Costing
cost associated with making a product to be sold
Product Costing
(Three main components of product costs)
raw materials or components used directly in the production process of the final product. include wood, metal, plastic, fabric, and chemicals.
Direct Materials
(Three main components of product costs)
cost of labor involved in producing a product. It includes wages, salaries, and benefits of employees.
Direct Labor
(Three main components of product costs)
expenses related to the production of a product. these costs include the cost of machinery and the cost of operating the machinery.
Overhead Costs
Manufacturing overhead costs include indirect costs like:
supplies and materials used in the production process but are not a visible part of the final product. Examples are items like glue, oil, tape, and cleaning supplies.
Indirect Materials
Manufacturing overhead costs include indirect costs like:
work performed by individuals not directly engaged in producing goods, such as security guards, drivers, and legal advisers.
Indirect Labor
Manufacturing overhead costs include indirect costs like:
additional factory overhead costs that do not fit the abovementioned categories
Other Overheads
What is the formula for calculating the Product Cost?
Product Cost = Direct Materials + Direct Labor + Overhead Costs
What are the Steps in Calculating the Product Cost?
- Organize the production expenses according to the particular product.
- Calculate the total cost of the direct materials used in the production.
- Calculate the total cost of direct labor.
- Calculate the total overhead costs.
- Add all the costs together to determine the total product cost.
- Calculate the cost per unit by dividing the total product cost by the total number of units.
method used to determine the cost of providing a specific service. It involves identifying all the costs related to the resources used in delivering the service.
Serving Costing or Operating Costing
Computing the service cost involves the determining the following expenses:
A. Fixed Costs - expenses that do not change regardless of how much activity the business is doing.
B. Semi-variable costs - consist of both fixed costs and variable costs.
C. Variable Costs - subject to change depending on the number of units produced.
D. Unit of Measurement - standard method used to measure the quantity or volume of a particular service provided.
What is the formula for calculating total service cost?
Total Service Cost = Total Fixed Cost + Total Semi-Variable Cost + Total Variable Cost
What is the formula for calculating total service unit? (Number of variables may vary)
Total Service Unit = (Variables 1) x (Variable 2) x (Variable 3) x (Variable 4)
What is the formula for calculat cost per service unit?
Service Cost per Unit = Total Costs for the Period / Total Service Unit
What are the steps in calculating the service cost?
- Identify the total service unit by multiplying all the variables.
- Calculate the total fixed cost related to the service.
- Calculate the total variable cost related to the service.
- Calculate the total semi-variable cost related to the service.
- Calculate the total service cost by adding all the costs together.
- Divide the total service cost by the total service unit to determine the cost per service unit.
(Objectives of Pricing)
The level of competition within the industry determines the pricing strategy.
Competition-Based Objective
(Objectives of Pricing)
The price of a product or service is determined by considering the total cost involved in its production.
Cost-Based Objective
(Objectives of Pricing)
The value determines the price of a product or service or its benefits to customers.
Customer-Value Objective
(Objectives of Pricing)
The pricing strategy is centered around two primary goals: expanding the market share and cultivating strong customer awareness and loyalty.
Market Share Objective
(Objectives of Pricing)
The price is strategically designed to boost sales volume and maximize profits within a specific timeframe.
Sales Orientation Objective
(Objectives of Pricing)
The price is established depending on how much the customer is willing to pay.
Customer-Driven Objective
This method involves calculating all the costs associated with manufacturing a product or delivering a service and then incorporating a predetermined markup to determine the appropriate selling price.
Cost-Plus Pricing (Markup)
What is the formula for Cost-Plus Pricing (Markup)?
Selling Price = Cost per unit x (1 + Predetermined markup percentage)
Percentage added to a product or service’s cost to determine its selling price.
Predetermined Markup Percentage
Profit level that a business aims to achieve over time. It is typically an assumption or estimated amount based on factors such as cost of production, market competition, and inflation.
Desired Profit
(Most Common Pricing Strategies)
The price of a product or service is set to a high price point to create a perception of higher quality.
Premium Pricing
(Most Common Pricing Strategies)
The price of a product or service is relatively low and affordable, targeting customers who want to save as much money as possible on whatever good or service they purchase.
Economy Pricing
(Most Common Pricing Strategies)
The initial price of the product or service is deliberately set high to generate maximum consumer interest.
Price Skimming
(Most Common Pricing Strategies)
The initial price of the product or service is intentionally set at a low level to swiftly enter a competitive market, gain a loyal customer base, and generate rapid sales, with the plan of increasing the price later.
Penetration Pricing
(Most Common Pricing Strategies)
The price of a product or service aims to influence consumer perception and behavior by using specific price points.
Psychological Pricing
(Most Common Pricing Strategies)
This pricing strategy is where multiple products or services are offered together at a discounted price.
Bundle Pricing
(Most Common Pricing Strategies)
The price of a product or service adjusts in response to changing market conditions.
Dynamic Pricing
What coordinates people, places, and processes to care for a business’s structures, buildings, equipment, and other physical needs to improve productivity?
Facilities Management
These are the valuable properties owned by a business that can be utilized to bolster the production of goods and services.
Assets
Facilities management is segregated into two (2) categories:
- Hard services - physical modifications and adaptations to a building or its structure.
- Soft services - enhance the overall environment of the workplace, making it more enjoyable for all.
According to Wisdom IT Services (2018), what are the things to consider when deciding where to set up the business?
Controllable Factors and Non-controllable Factors
(Controllable factors for Business Location)
For a business to thrive, it must ensure that its goods and services are delivered to customers promptly and efficiently
Proximity to the market
(Controllable factors for Business Location)
To maintain a continuous production process, it is advantageous for the enterprise to procure raw materials of the correct quality, quantity, and timely manner
Supply of materials
(Controllable factors for Business Location)
Efficient transportation services guarantee the prompt delivery of raw materials to the company and finished products to the customers.
Transportation facilities
(Controllable factors for Business Location)
For businesses that heavily rely on energy, it is essential to be located near power stations to ensure a seamless and consistent power supply.
Infrastructure available
(Controllable factors for Business Location)
It is imperative for any enterprise to prioritize the awareness of both its workers’ rights and the tax laws applicable in its operational jurisdiction.
Labor wages and the laws that govern it
(Non-controllable factors for Business Location)
Government and local bodies have policies regarding labor laws, building codes, safety, taxes, social security, data privacy, and other vital factors.
Government policies
(Non-controllable factors for Business Location)
It is vital for businesses to have a profound understanding of the geology, climate, and environmental conditions prevailing at their specific location.
Climate and environmental conditions
(Non-controllable factors for Business Location)
Maintaining a strong and mutually beneficial partnership with suppliers is paramount for businesses.
Supporting industries
What helps clarify roles and responsibilities and promotes efficient communication and collaboration?
Workplace Structure
Start-up entrepreneurs widely utilize virtual workspaces due to their ability to enhance efficiency, reduce commuting costs, and provide increased flexibility. V
Virtual Office
Office layouts have changed from cubicles to open, spacious areas that promote collaboration and increase employee visibility.
Physical Office
What are the 4 types of Physical Office workplace structure?
- Open Office Design - minimal walls or barriers between employees.
- Cellular Office Design - private, individual workspaces known as
“cells” or offices. - Co-Working Space Design - open work areas with shared desks.
- Combination Office Design - tailored to the organization’s specific needs and preferences.
Its production layouts depends on the total size of the equipment, products, and employees they have to work with.
Manufacturing/Plant
What are the 3 types of Manufacturing/Plant workplace structure?
- Process or functional layout - helpful if there is a low production need.
- Fixed Position Layout - products are built in a fixed location, with all the necessary materials and equipment brought to that place.
- Combination type of layout - utilizes a combination or a mix of other layouts.
What are the Primary Goals of Marketing?
- Differentiate products from competitors by focusing on customer desires and requirements.
- Integrating all activities in the business to meet customer needs and desires.
- Satisfy customer wants and needs to achieve long-term goals.
It refers to the specific group of consumers or organizations a business wants to sell to. It is a clearly defined part of the larger market based on demographics, psychographics, behaviors, and needs.
Target Market
