2 market segmentation Flashcards
what is segmentation
spliting a market into parts for a product eg clothes male female childrens teen
why segment
helps businesses to identify target market more effectively
what is marketing mix
it is made up of price product place promotion
why must businesses take care when pricing
may have many competitors slling similar
customers take note of price to high wont buy to low no profit
what factors effect price
what competitors charge
new business aware that public are not familiar with the product and will be reluctant to buy unless cheap
must be aware of intended profit
what pricing methods might they use (5)
competitor pricing cost plus pricing penetration pricing skimming promotional pricing
what is competitor pricing
looks at price charged by competitor to give them an indication what to charge
what is cost plus pricing
add desired profit to cost of production
what is penetration pricing
reduce a price to entice a customer to buy a new name
what is skimming
selling a product at a higher price to reflect its desireability
promotional pricing
reduce to attract new and existing customers
why is product important
busineses must ensure they make products customers want to buy
what will a business have to consider about a product (5)
image/design invention/innovation branding product life cycle marketing
what are the 4 stages of a product life cycle
introduction- launch of product
growth - sales most rapid
maturity - sales at highest rate growth slower
decline - sales falling
what are the methods used to extend a products life (3)
advertising more widely
reduce price
develop new products
what is place
where goods are distributed and how they get there
2 main methods of place
physical
digital
how is place changing
where products are sold there are more out of town centres and digital distribution
what is physical distribution
movement of goods we can see eg food household products
how are good physically transported
by air and road
what are the channels
producer - customer - small businesses
producer - retailer - customer- electrical
producer - regional centre -retailer - customer - usually food as shops cant store large quantities
what is the role of wholesalers
store goods in buld, give credit to retailer, deliver to retailer
what is RDC
regional distribution centre - owned by retailer to store products
how has digital distribution increased
growth of internet
how does digital distribution work
there is no physical product, goods are downloaded digitally eg books music insurance
what are the advantages of digital distribution (3)
access products 24 hr a day
goods available quickly
cost saving for business
what are the disadvantages of digital distribution (4)
not all goods are suitable for it
businesses are forced into it to match competitors
not all customers have internet
makes illegal copying easy - business looses sales
what implications are there for a business having digital distribution
have to make sure their technology is up todate and always developing
what is promotion
businesses informing customers about good price
new place
offer BOGOFF
what is the aim of a promotion (4)
inform about a new product
keep ahead of competitors
create change of image
increase sales
2 types of promotion
point of sale
advertising
what are point of sale promotions
price reductions - usually when product not selling welleg
loss leaders- to entice people in to buy othr things
competitions
free samples - to target people who are reluctant to buy incase they dont like it
advertising
marketing campaign or single add
are all parts of the mix equally important
no certain times some more important than others eg for a new product advertising is more important
what are the 4 ps
price product place promotion
what is market data
change in demand - how product is selling
target market - is it changing
market share - business share or total market
product change - how business performs after new product
effect of promotion - if spending lots is paying off
