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Business Strateeg > 11: Strategies for products and markets > Flashcards

11: Strategies for products and markets Flashcards

1
Q

Define marketing

A

The management process that identifies, anticipates and supplies customer requirements efficiently and profitably

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2
Q

How do we compete in the market?

A

Generic strategy (Differentiation/cost)

Product/market (New markets/product/refinements)

Orientation (Product, production, market, sales)

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3
Q

What is it needed to be done for marketing?

A

Market research, positioning, targeting, segmentation

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4
Q

Customer vs consumer

A

Customer - purchases and pays for goods, may be part of longer customer chain

Consumer - ultimate user of g&s

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5
Q

Explain four orientation approaches to marketing

A

Product orientation - business makes products they want for themselves and know will sell in market

Production orientation - products provided to an audience where its highly likely to sell regardless of marketing e.g. beans

Market orientation - Company conducts exhaustive research so it has ready made customers upon launch

Sales orientation - marketed aggressively, somet customers wouldn’t naturally seek to buy

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6
Q

What is market segmentation? How can it be done?

A

Division of the market into separately identifiable sub-units to help target the marketing effort. Can be split by:

-Mass/undifferentiated - no separate customer segments identified e.g. sugar

-Niche/concentrated - concentrate on one or market segments only

-Micro - products and services tailored to individual needs e.g. moonpig

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7
Q

What is the benefits of segmentation?

A
  • Org can identify new marketing opportunites
  • Specialists can be used for each of org’s major segments
  • Marketing budget can be allocated proportionally to each segment, optimising ROI
  • Org can try dominate particular segments through competitive advantage from a strategy
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8
Q

What are the bases for segmentation?

A
  • Type of customer e.g. consumer/ business
  • Location of customer
  • Demographic factors e.g. age/gender
  • Lifestyle of customer e.g. socially aware
  • Behavioural needs-based e.g. tech savvy
  • Contextual life changing event e.g. baby
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9
Q

Explain targeting and what it depends on

A

Selecting market segments with the most potential for a return. Attractiveness depends on it being:

  • Measurable: ability to forecast sales/mareket potential
  • Accessible: ability to make and distribute a product to a market
  • Stable: likelihood that the segment will persist for sufficient time to enable a ROI of developing a marketing mix on it
  • Substantial: profits available will give an adequate return on capital employed
  • Defensible: barriers to entry to allow firm some dominance
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10
Q

Explain positioning

A

The overall location of a produt in a buyer’s mind in relation to other competing products/services/brands.
Position based on factors such as cost/value/quality

Can be used to represent the market and spot opportunities

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11
Q

Explain market research

A

the systematic gathering, recording and analysing of info about problems relating to the marketing of goods and services. Used to form the marketing mix

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12
Q

What are the areas for market research?

A
  • Market itself: wants, needs, size
  • Products: features, safety, durability
  • Pricing: competitor prices, acceptable/target prices
  • Promotion: methods, targeting data
  • Distribution: onwards customer chain, determining margins against recommended retail prices
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13
Q

What are the stages involved in market research?

A
  • Defining problems, setting objectives
  • Developing hypotheses
  • Research (Desk/field)
  • Data collection
  • Analysis and interpretation
  • Conclusions and recommendations
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14
Q

What is desk research vs field research

A

Desk - gathering and analysing existing (secondary) data from internal and external sourecs

Field - collection of new (primary) information direct from respondents. E.G. Individual and group interviews, trial testing/focus groups, observation of processes, questionnaires.

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15
Q

What are three essential features of branding

A

Name - should be legally protected and memorable

Livery - design, trademark,symbols, visual/identifable features

Associations of personality - helps a brand distinguish their product from competing products in the eyes of the user.

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16
Q

What are brand policies an organisation can adopt?

A

Single company name - simple and builds on existing brand e.g. virgin

Different brand for each product e.g. unilever

Own branding - supermarkets own to create loyalty to store

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17
Q

Explain brand positioning

A

Quadrant map with a trade off between price and quality, refer to book p121

High p low q: Cowboy High p high q: premium
Low p low q: Economy Low P high q: Bargain

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18
Q

What is brand equity

A

An intangible asset that adds value to a business through positive associations made by consumer between brand and the benefits they enjoy

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19
Q

What is the marketing mix?

A

the set of controllable marketing variables that a firm blend to produce the response it wants in the target market .
7ps:
Product, place, promotion and price for products and services

People, processes and physical evidence for services marketing

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20
Q

Explain product

A

Good or service that customer buys and experiences. Made up of 3 elements:

  • Basic product: e.g. car - the core of the product
  • Actual product: e.g. BMW 5 Series - features/specific
  • Augmented product: .g. BMW M5 with optional extras, GAP insurance, finance lease etc. Therefore G&S+ Extras
21
Q

What is the product development strategy

A

Develop or create:
- Entire new products
- New product features through adapting existing features
- Different quality versions/models/sizes

22
Q

What are the product classifications for global marketing?

A

Local products - only suitable in home market

International products - seen as having extension potential into other geographical markets

Multinational products - products adapted to the unique characteristics of national markets

Global products - worldwide without differentiation e.g. big mac same everywhere

23
Q

Explain Place

A

Orgs must decide the best way to get their products to the customer through distribution strategy

24
Q

Explain distribution channels

A

Direct distribution - directly from producer to consumer without use of intermediary e.g. online shopping, personal selling

Indirect distribution - systems of distribution which use an intermediary - can buy in bulk make most of EOS and better access to target market

25
Q

What are the types of intermediary

A

Retailers - sell directly to consumers
Wholesalers - stock a range of products from competing manufacturers to sell to retailers
Distributers - contract to buy a manufacturers goods and sell them to customers
Agents - dont purchase the manufacturers goods but make commission on sales they make
Franchisees - independent orgs that are allowed to trade under name of another org for an inital fee and share of sales revenue

26
Q

How can businesses sell and distribute in overseas markets?

A
  • Can sell to a distributor who sells their products locally
  • Sales agent who sells product on their behalf on a commission basis
  • Joint venture with a local business
  • Set up own local office
27
Q

What is the promotion mix?

A

Consists of four elements
- Advertising
- Sales promotion
- Public relations
- Personal selling
Described in terms of push and pull effects

28
Q

Explain push and pull effects

A

Pull effect is when consumers ask for brand by name

Push effect is targeted on getting the company’s goods into the distribution netowrk

29
Q

What is above and below line promotional activities

A

Above line - promotional activity that customer sees e.g. advertising

Below line - non-media promotional e.g. displays, shows, exhibitions, incentive to intermediaries to stock up their product

30
Q

Explain advertising and its objectives

A

Designed to influence customers favourably regarding a G/S

  • Communicate info about a product
  • Create awareness of new products
  • Hihglight unique selling proposition
  • Increase sales/profits

Advertising classed under 3 headings

31
Q

How is advertising classed

A

Informative advertising - conveying information and raising consumer awareness of the product. Usually for introduction of product

Persuasive advertising - creating a desire for product and stimulating actual purchase. Growth/maturity stage for well-established products

Reminding advertising - reinforcing knowledge held by potential consumers, reminding existing consumers of the benefits of their product

32
Q

Explains sales promotion

A

Stimulate consumer purchasing and dealer effectiveness

33
Q

Explain public relations

A

Creation of positive attitudes regarding products/services/companies.

34
Q

Explain personal selling

A

Sales force makes contact with potential customers on a one-to-one basis. also includes delivery, repair staff and call centre staff who have regular contact with the customer

35
Q

What are the principles of pricing?

A

the pricing decision is presented as a balance between the Three c’s

  • Costs: products need to recover their costs to make a profit
  • Customers: the price that customers will bear to buy the product or service
  • Competitors: a benchmark against which a product is judged

4th C = corporate objective - max profits, obtain ROI, target revenue/MS

36
Q

PED

A

Responsiveness of QD to a change in price

%Change in QD / % Change in Price

37
Q

Price discrimination

A

The setting of prices for a similar product in different parts of the market

38
Q

What are the different methods of differential pricing?

A

Market segment: Priced to appeal to different market segments

Product version: Price changes depending on model/added extras

Place: price impacted by location or convenience

Time: Price impacted by time of day or season

Dynamic: Price varies according to levels of demand

39
Q

List pricing decisions

A

Market skimming
Predatory pricing/dumping
Value pricing
Penetration pricing
Promotional pricing

40
Q

Advantages of a cost-plus approach

A
  • Simplicity of price setting
  • Control of sales discounting
  • Ease of budgeting
  • Easy to state rates of mark-ups in contracts with the government so profits are deemed fair and not excessive
41
Q

Disadvantages of a cost-plus approach

A
  • Ignores the effect of volumes on cost
  • Useless for very high fixed cost industries
  • May not suit positioning of the product ( could be undersold or overpriced)
  • Ignores competitive conditions
42
Q

Explain people as one of 7ps

A

People are particularly important in the service industry as the service cannot be separated from the staff who deliver it.

43
Q

Explain processes

A

It is more difficult to control the processes that will be employed in delivering the service. Processes need to be consistent to assure high quality of service to customers

44
Q

Explain physical evidence

A

Evidence of the service so the customer has something to pay for

45
Q

What is transaction marketing?

A

A marketing mix that gets customers to buy a product or service that satisfies their needs, perhaps in a single sale, without any sort of LT relationship with them.

46
Q

What is relationship marketing

A

Management processes that seek to attract, maintain and enhance customer relationships by focusing on the whole satisfaction experiences by the customer. Creating a long-lasting relationship with customers.
Key characteristics:
- Customers are individuals
- Existing customers preferred over new ones
- Based on interactions and dialogues

47
Q

How can relationship marketing be developed?

A
  • Loyalty schemes: supermarket cards, company clubs etc
  • Personalisation programmes: amazon recommending prodcuts to suit returning customers
  • Structural ties: providing customers with computer equipment to managers orders e.g. just eat terminals to takeaways
48
Q

Why has relationship marketing grown?

A
  • Increasing cost of attracting new customers
  • Marketing strategies based on product development: importance of selling more to existing customers
  • Increased capabilities of information technology
49
Q

Give some ethical concerns of marketing

A
  • If people do not need the products marketed to them, their production wastes resources
  • Companies may use pricing to be selective to whom they sell their products to
  • Percieved benefits may be unrealistic or dishonest

Business Strateeg (14 decks)

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