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Business A Level > 1.3.3 > Flashcards

1.3.3 Flashcards

1
Q

Marketing

A

Involves a range of activities that help a business sell its products

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2
Q

Mass Markets

A

When a business sells the same products to all consumers and markets them in the same way.

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3
Q

Niche Markets

A

A small market segment - a segment which has gone ‘untouched’ by larger businesses

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4
Q

Market Size

A

Can be estimated by either Value (total amount spent by customers buying products) or Volume (the physical quantity of products that are produced and sold)

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5
Q

Market Share

A

The portion of a particular market that is held by a business, product, brand, or number of businesses products. It is shown as a percentage and is calculated like: (sales of a business/total sales in the market) x 100%

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6
Q

Dynamic Market

A

Markets which change often (e.g. grow, shrink, fragment, emerge, or disappear)

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7
Q

Marketing Objectives (MarObj)

A

Goals that a business is trying to achieve through its marketing.

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8
Q

(MarObj) Increasing market share

A

Businesses often want to gain a larger share in the market - gives competitive edge - business has to produce more output - results in ability to exploit economies of scale, helps lower costs.

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9
Q

(MarObj) Increasing revenue

A

Businesses introduce specific marketing activities in order to boost their revenues - revenue higher = profits higher.

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10
Q

(MarObj) Build a brand

A

Many businesses want to establish the name of their company or products - can do this by giving brand names - strong brands generate huge returns - helpful for those in highly competitive markets - business may exploit a USP.

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11
Q

Product life cycle

A

Development - Introduction - Growth - Maturity & Saturation - Decline

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12
Q

Extension strategies (ExtStr)

A

Way to prolong the life of a product before it starts to decline

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13
Q

(ExtStr) Product Adjustment

A

Prolong life by improving on the product, updating the product, repackaging product, or extending range.

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14
Q

(ExtStr) Promotion

A

Give boost to failing products via promotion campaigns (such as finding new uses of the product, finding new markets, or encourage more use of the product)

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15
Q

Product Portfolio/Product mix

A

This is made up of product lines which are a group of products which are similar.

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16
Q

Boston Matrix

A

A table on the axes: Market growth (how fast is the market for the product growing?) and Relative market share (how strong the product is within its market?)

  • Star (HMG & HMS): Stars are valuable to the business - profitable - a lot of investment is needed.
  • Cash Cow (LMG & HMS): Well positioned, likely to be profitable - little chance of increasing sales and profit in the future - little need for investment
  • ? (HMG & LMS): Can be a problem for the business - unclear what to do with product - unlikely to be profitable - potential to turn into a star - investment needed to cope with expanding sales in a fast growing market
  • Dogs (LMG & LMS) - Poor prospects for sales and profits - need little investment but may earn some profit.
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17
Q

Marketing mix

A

This refers to a firms marketing strategy’s elements that are designed to meet the needs of its customers.

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18
Q

(4Ps) Product

A

Products must meet customer needs and needs these features: how to use the product, to appearance, financial factors, product life cycle, and USP.

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19
Q

(4Ps) Price

A

Pricing may not always be set at a level which will maximise sale or short term profits.

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20
Q

(4Ps) Promotion

A

Customers must be given info about products and encourage to buy them - this has a variety of methods.

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21
Q

(4Ps) Place

A

Products must be available at convenient locations at times when customers want to buy them.

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22
Q

Marketing Strategies

A

Set of plans that aim to achieve a specific marketing objective. (E.g. improve quality of customer service)

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23
Q

Strats for Mass Markets

A

Product - Developing a USP will help product stand out.

Price - Usually charge the “going rate” - follow the dominant company

Promotion - Invest heavily in this

Place - use multiple channels

24
Q

Strats for niche markets

A

Product - Must have quite significant differences from its rivals.

Price - More flexibility in pricing - Higher prices can be charged

Promotion - More targeted.

Place - more selective when choosing distribution channels - use exclusive distributors

25
Q

Outbound Marketing Strats

A

Involves directing marketing material at potential customers whether they are expecting it or not. However people ignore or are annoyed by adverts. That can ruin the the brands reputation.

26
Q

Inbound marketing Strats

A

Involves attracting customers to websites when they are looking for suppliers or solutions to problems. Recruitment of experienced inbound marketers can be difficult and it can be tricky to keep the strategy up to date with rapidly emerging trends.

27
Q

Hybrid Strats

A

This involves a combination of both outbound and inbound Strats. Inbound take about 6 months to generate results while outbound are more short term. Using them effectively will help reduce costs and create sustainable growth in market share

28
Q

(Customer loyalty) Communication

A

A business must keep customers informed.

29
Q

(Customer loyalty) Customer Service

A

Customers will return if service is high quality.

30
Q

(Customer loyalty) Customer incentives

A

Many businesses reward their customers if they keep returning.

31
Q

(Customer loyalty) Personalisation

A

Some businesses try to deal with customers on a personal level.

32
Q

(Customer loyalty) Preferential treatment

A

People like the idea of receiving preferential treatment from a business.

33
Q

Design Mix

A

When designing any product or service a number of key features have to be considered, aka the design mix.

34
Q

(Design Mix) Function

A

A product must be fit for a purpose - product design is also important for services - useful to have a USP.

35
Q

(Design Mix) Aesthetics

A

Products and services should stimulate peoples senses in addition to performing a function - this is the aesthetic appeal - this is to be a focus later on when costs come down.

36
Q

(Design Mix) Cost/economic manufacture

A

A well designed product or service is more likely to be economically viable - a business should be able to produce and sell the product or service at a profit - if the costs are high, products or services may be dropped altogether.

37
Q

Design mix and social trends

A

Product designers need to be aware of changes in social trends.

38
Q

(DesMix & trends) Design for waste minimisation

A

Firms are under increasing pressure to design products that minimise waste.

39
Q

(DesMix & trends) Design for re-use

A

Resources can be saved if products are designed so they can be re-used.

40
Q

(DesMix & trends) Design for recycling

A

Businesses are making increasing use of recycled materials in their designs.

41
Q

(DesMix & trends) Ethical sourcing

A

In order to reflect social trends, some businesses use ethically sourced resources in their designs.

42
Q

Promotion

A

This involves drawing attention to their products, services, or companies.

43
Q

Above the line promotion

A

Involves advertising in the media.

Advertising may be placed into different categories:

  • Informative advertising: Adverts designed to increase consumer awareness of products.
  • Persuasive advertising: Some advertising is designed to put pressure on consumers to buy a product.
  • Reassuring advertising: This is aimed at existing customers. Designed to be comforting and suggest to consumers that they were right to buy the product.
44
Q

Below the line promotion

A

Refers to any form of promotion that does not involve advertising.

  • sales promotion: Incentives used to encourage to buy products are called sales promotions.
  • Public relations: Some businesses communicate with stakeholders using PR. The purpose of PR is to improve the image of the business and attract publicity.
  • Merchandising and packaging: Some businesses may arrange the point of sale so that it is interesting and eye-catching, and likely to encourage sales.
  • Direct mailing: this is where businesses mail out leaflets or letters to households.
  • direct selling or personal selling: This might involve a sales rep calling at households or businesses hoping to sell products.
  • Exhibitions and trade fairs: Some businesses attend trade fairs or exhibitions to promote their products.
45
Q

Branding/types of Branding

A

The aim of many businesses is to build a powerful brand which involves giving a product a name, sign, symbol or logo, design or any feature that allows consumers to instantly recognise the product and differentiate it from those of competitors. They come in many forms such as:

  • Manufacturer brands: brands which are created by the producers of goods and services.
  • Own-label brands: Products which are manufactured for wholesalers or retailers by other businesses.
  • Generic brands: Products that only contain the name of the actual product category rather than the company or product name.
46
Q

Benefits of strong branding

A
  • Added value: Strong brand adds value in the eyes of the customers.
  • Ability to charge premium prices: Products with strong brands can be priced higher than those of competitors.
  • Reduced price elasticity of demand: The strength of a brand may be reflected in the price elasticity of demand for a product.
47
Q

Ways to build a brand

A
  • Exploiting a USP: If a product has a USP it s much easier to differentiate the brand and make it stand out.
  • Advertising: A business may use advertising to introduce a new brand, advertising then may continue to remind consumers of the existence of the product.
  • Sponsorship: Some companies favour the use of sponsorship to build their brand - it is argued that it is cheaper than promotion.
  • Use of social media: Social media can be used in many wa— JUST USE COMMON SENSE.
48
Q

Changes in branding and promotion to reflect social trends

A
  • Viral marketing: This involves any strategy that encourages people to pass on messages to others about a product or a business electronically - creates potential for rapid growth.
  • Social Media: Using social media to build a brand is important as many businesses go further.
  • Emotional branding: this refers to the practice of using the emotions of a consumer to build a brand.
49
Q

Pricing strategies

A

This is a set of plans about pricing, which help a business to achieve its marketing and corporate objectives.

50
Q

Cost plus pricing

A

This involves adding a mark up to unit costs - this is common with retailers - this however ignores market conditions - might result in low sales - may be difficult to identify all the costs.

51
Q

Price skimming

A

When a business launches a product into a market with a high price for a limited time period - aim is to generate high levels of revenue with a new product before competitors arrive - maximises revenue - higher initial revenues help a business to recover the cost of research and development - can make product look prestigious - skimming can only be used if demand is price inelastic - attracts competitors.

52
Q

Penetration pricing

A

A business will introduce a new product and charge a low price for a limited period - aim is to develop secure initial position in the market from which further progress can be made.

53
Q

Competitive pricing

A

Businesses look at what their rivals are charging when setting their prices - one way is to charge the same as competitors - price war is to be avoided this way - Taking price leadership is another way - have to be the dominant firm

54
Q

Psychological pricing

A

Setting the price slightly below a round figure.

55
Q

Factors determining pricing strategies

A
  • Differentiation and USP
  • Price elasticity of demand: if the demand for a firms products is price inelastic, there will be a scope for price increases. but if a firms product is elastic, it may benefit from price cuts.
  • amount of competition
  • Strength of the brand
  • Stage in the product life cycle
  • Costs and the need to make a profit
56
Q

Changes in pricing to reflect social trends

A
  • Online sale: businesses are having to adapt to selling goods online.
  • Dynamic pricing
  • Auction sites: These allow sellers to get the best possible price for goods.
  • personalised pricing: involves the use of data relating to a specific online shopper.
  • Subscription pricing: usually involves charging customers a regular monthly fee for the use of a service
  • Price comparison sites: many online shoppers make use of comparison websites.

Business A Level (1 decks)

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