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A-level Business > 3 - Decision making to improve marketing performance 💫 > Flashcards

3 - Decision making to improve marketing performance 💫 Flashcards

1
Q

Define marketing

A

The process of identifying, anticipating and satisfying customer needs profitably

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2
Q

Define marketing objective

A

provides a focus for marketing management set usually be a marketing team

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3
Q

Formula for market growth %

A

New market - old market / old market X100

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4
Q

If market growth is negative, what does this mean for the market?

A

It is shrinking

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5
Q

Formula for market share %

A

sales / total market size X100

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6
Q

What does it mean if a business’ market share decreases?

A

Competitors are gaining an advantage

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7
Q

Formula for sales growth %

A

sales this year - sales last year / sales last year X100

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8
Q

What would be some effective marketing objectives?

A
  • all have same vision
  • provide a focus
  • provide an incentive
  • establish priorities
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9
Q

The marketing function in a business has what 3 basic objectives?

A
  • Determine what the market wants
  • Develop the strategy to achieve the objectives
  • Deliver the marketing actions to achieve these
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10
Q

Define market size

A

The number of sales, by value or volume, in a market as a whole

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11
Q

Define market share

A

The proportion of total sales that a particular firm controls

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12
Q

Define market growth

A

The % increase in the size of the total market in terms of either value or volume

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13
Q

Define sales growth

A

The % increase in the size of the sales of a firm in terms of either value or volume

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14
Q

Define brand loyalty

A

Customers have a strong preference towards the identity of a particular product or company

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15
Q

Internal Influences on Marketing Objectives

How does corporate objectives effect this?

A

marketing objectives must be aligned with the company’s overall goals

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16
Q

Internal Influences on Marketing Objectives

How does finance effect this?

A

the marketing department will be given a budget by the finance department, so they must work within this

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17
Q

Internal Influences on Marketing Objectives

How does HR effect this?

A

if HR decides to cut/increase staff, the marketing department must adjust its objectives to make sure they are achievable

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18
Q

External Influences on Marketing Objectives

How does the market effect this?

A

an economic boom will mean the company could focus on sales volume increases, but a recession would focus on maintaining market share

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19
Q

External Influences on Marketing Objectives

How does technology effect this?

A

changes mean objectives must stay dynamic as new tech can cause prices to change fast

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20
Q

External Influences on Marketing Objectives

How do competitors effect this?

A

actions of competitors will mean objectives will need to change to stay competitive

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21
Q

External Influences on Marketing Objectives

How does ethics and environmental factors effect this?

A

awareness for these issues are increasing, so behaving in a harmful way will damage a business’ reputation

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22
Q

External Influences on Marketing Objectives

How does government effect this?

A
  • predatory pricing
  • the law
    -Trade Description Act
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23
Q

What do businesses need to know when analysing market data?

A
  • is the business market local/national/international?
  • selling online or physical?
  • who is the target?
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24
Q

How can a market be classified?

A
  • geographically
  • nature of the product
  • seasonality
  • development level (new/growing/saturated)
  • product destination (trade/private)
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25
Q

Advantages of market mapping

A
  • spot gaps in the market
  • can be used to see customer views
  • support with pricing strategy
  • shows closest competition
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26
Q

Disadvantages of market mapping

A
  • other research still needed
  • can simplify things too much
  • lack of data
  • opinion-based = biased
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27
Q

Define market research

A

The process of gathering info about the market

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28
Q

Why is market research carried out?

A
  • help to decide future plans
  • spot opportunities
  • supports seeing if plans work
  • reduce risks
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29
Q

Cons of market research

A
  • can be expensive
  • needs planning
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30
Q

Define quantitative research

A
  • concerned with data (fixed answers)
  • statistically valid
  • main methods are survey
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31
Q

Define qualitative research

A
  • based in opinions, attitudes, beliefs
  • aims to understand behaviours
  • main method is focus groups
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32
Q

Pros to quantitative research

A

Easier to compare
More statistical

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33
Q

Cons to quantitative research

A

No expansion nor detail in answers
No understanding what customer wants

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34
Q

Pros to qualitative research

A

Opinion based
Detailed
Develops answers

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35
Q

Cons to qualitative research

A

Harder to compare
Subjective
Expensive

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36
Q

Examples of primary research

A

Focus groups, questionnaires, interviews, surveys, test marketing, sampling

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37
Q

Pros to primary research

A
  • specific so good for niche markets
  • exclusive so competitors can’t benefit
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38
Q

Cons to primary research

A
  • labour-intensive
  • expensive
  • time-consuming
  • may not want to annoy customers
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39
Q

Examples of internal sources of secondary research

A

Loyalty cards data, feedback from salesmen, analysis of company reports, financial accounts and stock records

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40
Q

Examples of external sources of secondary research

A

Govt publications, marketing agency reports, pressure groups, trade magazines

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41
Q

Pros to secondary research

A
  • easier
  • faster
  • cheaper
  • efficient
  • done for you
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42
Q

Cons of secondary research

A
  • not tailored to business
  • outdated
  • unsuitable
  • contains error
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43
Q

What is a sample?

A

A group of subjects that have been chosen from a larger group, the population, for investigation

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44
Q

What will a bigger sample give you?

A
  • better chance of being accurate
  • not always totally representative
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45
Q

What will impact the value of sampling?

A
  • the sample technique used
  • how the sample was carried out
  • the size of the sample
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46
Q

What will impact the size of the sample?

A
  • the budget available
  • the importance of accuracy
  • degree of confidence in results
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47
Q

What is random sampling?

A

Names picked randomly from a list

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48
Q

Pros to random sampling

A
  • wide range of opinions
  • good for certain industries (supermarkets)
  • cheaper
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49
Q

Cons to random sampling

A
  • time-consuming
  • wasted info/resources
  • difficult to find out specifically for target
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50
Q

What is quota sampling?

A

People are picked who fit the category (eg. Mums aged 30-40)

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51
Q

Pros to quota sampling

A
  • specific target market = accurate
  • more reliable
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52
Q

Cons to quota sampling

A
  • time-consuming
  • have to target lots of people to get enough data
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53
Q

What is stratified sampling?

A

The population is first segmented into subgroups, before respondents are randomly selected from within that subgroup

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54
Q

Pros to stratified sampling

A
  • more accurate
  • specific for target market
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55
Q

Cons to stratified sampling

A
  • have to get the right subgroup
  • time-consuming
  • expensive
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56
Q

What can market research not be?

A

Bias

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57
Q

Define correlation

A

The relationship between such data and the business sales levels

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58
Q

What method is correlation?

A

A method of sales forecasting

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59
Q

Strong correlation means what?

A

Means little room between data points

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60
Q

Weak correlation means what?

A

Means data points are spread apart

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61
Q

How can correlation be described?

A
  • strong
  • positive
  • weak
  • negative
  • random
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62
Q

What is time series analysis?

A

A method of interpreting market data by looking at data over time, revealing underlaying patterns by recording and plotting data over time

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63
Q

What is a trend?

A

The long-term movement of a variable

eg. upwards/downwards/constant/seasonal/random

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64
Q

What is time series analysis used for?

A
  • analyse market research effectiveness
  • forecasting future decisions
  • tracks trends
  • efficient and clear
  • shareholders could be encouraged
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65
Q

What is extrapolation?

A

Using data in the past to extend an identified trend into the future when the market is stable

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66
Q

Cons to extrapolation

A
  • past isn’t always good indication of future
  • conditions and trends can soon change
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67
Q

What is the value of technology?

A
  • less human error
  • enables two way communication
  • encourages consumer feedback through social media
  • collect consumer opinions
  • track and interpret habits
  • gathers large amounts of data fast
68
Q

How can technology be used to gather market research?

A
  • loyalty cards
  • search engines
  • social networking sites
  • WI-FI signals
69
Q

Advantages of technology

A
  • cheaper
  • more efficient
  • more relevant
  • faster and immediate
70
Q

Disadvantages of technology

A
  • seen as unethical (WIFI)
  • initial costs are high
  • can lower profit margins (discounts)
  • narrows target marketing (may miss out on potential customers)
71
Q

Confidence intervals do what?

A

Are used to assess the reliability of sampled data when trying to forecast figures such as sales levels

72
Q

What does a confidence level of + - 4 mean if the survey shows a high chance that 36% of the population will buy the product?

A

That 32% to 40% will buy the product

73
Q

What can a confidence interval be compare to?

A

The range of the population that is predicted to buy the product

74
Q

What is a confidence level?

A

The degree to which statistics are a reliable predictor of actual events

75
Q

What does a 95% confidence level mean on a 36% + - 4 condense interval?

A

That 95% of the time the number of buyers will fall between 32% and 40%

76
Q

What factors affect the confidence interval?

A
  • sample size
  • population size
  • % of sample choosing a particular answer
77
Q

What is price elasticity of demand?

A

A measure of how responsive demand is to a change in price (inverse relationship)

78
Q

What factors affect whether a product is elastic or inelastic?

A
  • time
  • availability of substitutes
  • price of competitors
  • branding
  • income
  • nature of the good
  • choice
79
Q

What does price ELASTIC demand mean?

A

Demand is more sensitive to price changes

80
Q

What does price INELASTIC demand mean?

A

Demand is not very responsive to price change

81
Q

How do you calculate PED?

A

% change in quantity demanded / % change in price

82
Q

What does a PED between 0 and -1 mean?

A

Demand is inelastic as it doesn’t change very much

Eg. Insulin, petrol

83
Q

What does a PED less than -1 mean?

A

That demand is elastic

Eg. Car sales

84
Q

Price ELASTIC demand

A

Raise selling price = revenue decreases
Lower selling price = revenue increases

85
Q

Price INELASTIC demand

A

Raise selling price = revenue increases
Lower selling price = revenue decreases

86
Q

Problems of PED forecasting

A
  • changes over time
  • competitors keep changing
  • difficulty finding accurate info
  • tastes change over time
87
Q

What is the formula for income elasticity of demand (YED)?

A

% change in demand / % change in income

88
Q

What is YED for normal goods?

A

Always positive

89
Q

If a product is a luxury, what is YED?

A

Above 1 = positive elastic

Fast rate/high impact

As income grows, more is spent on luxuries

90
Q

If a product is a necessity, what happens to YED?

A

Below 1 = positive inelastic

Slow rate/low impact

As income grows, less is spent on necessitates

91
Q

What are inferior goods YED?

A

Inferior goods = cheaper value products

Eg. 35p beans

Negative elasticity of demand

Demand falls when income increases

92
Q

How does PED and YED help a business make marketing decisions?

A
  • helps predict the economy
  • increase or decrease price accordingly
  • release new ranges
  • change packaging = more luxurious
  • change advertising campaign
  • rearrange stores to showcase cheap/expensive goods depending on YED
93
Q

What is market segmentation?

A

Involves dividing a market into parts that reflect different customer needs and wants

94
Q

How can a market be segmented?

A
  • demographic
  • income
  • geographical
  • behavioural
95
Q

What is targeting?

A

The process of deciding which segment to focus on

96
Q

What is targeting influenced by?

A
  • mission and objectives
  • perceived level of demand
  • competition
97
Q

What is mass marketing?

A

Business targets the whole market, ignoring segments, undifferentiated

98
Q

What is segmented marketing?

A

Business targets several debarments within the same market, differentiayed

99
Q

What is a niche market?

A

Business focuses on smaller segments in an aim to achieve strong market position

100
Q

What does demographic segmentation include?

A

Age, gender, occupation, socio-economic group

101
Q

What does geographical segmentation include?

A

Classification of residences

102
Q

What does behavioural segmentation include?

A

Lifestyle, brand loyalty, frequency of purchases

103
Q

What is it called when you have to choose who to target?

A

Value propositions

104
Q

What are the 7 P’s?

A
  • place
  • product
  • price
  • promotion
  • physical evidence/environment
  • process
  • people
105
Q

What factors could influence the marketing mix?

A
  • PESTLE
  • competition
  • PED and YED
  • availability of resources
  • seasonality
  • imports/exports
106
Q

How can businesses stay competitive?

A
  • improve quality
  • reconsider distribution channels
  • advance tech
  • develop processes
  • develop skills of staff
107
Q

Boston Matrix

What is on the axis?

A

x axis = market share
y axis = market growth

108
Q

Boston Matrix

What are cash cows?

A

Customers know brand and is very profitable

Eg Cadbury’s

109
Q

Boston Matrix

Where are cash cows?

A

High market share
Low market growth

110
Q

Boston Matrix

What are stars?

A

Immature market with new customers being attracted, so competition and costs are high but will hopefully turn into cash cows

Eg apple watch

111
Q

Boston Matrix

Where are stars?

A

High market share
High market growth

112
Q

Boston Matrix

What are question marks?

A

Worst situation as products aren’t selling and competitors are winning

113
Q

Boston Matrix

Where are Question Marks?

A

Low market share
High market growth

114
Q

Boston Matrix

How can a question mark be saved and turned into a cash cow?

A

A relaunch or redesign

115
Q

Boston Matrix

What is a dog?

A

Still can be marginally profitable, but take up time and are not worth redeveloping

Eg hand carpet cleaners provide profits for niche businesses, but can’t compete with Dysons

116
Q

Boston Matrix

Where is a dog?

A

Low market share
Low market growth

117
Q

Boston Matrix

Why use the Boston Matrix?

A
  • to judge how to manage products
  • recognise profitable products
  • to see potential
118
Q

What are the 6 stages of the product life cycle?

A
  • R&D
  • Introduction
  • Growth
  • Maturity
  • Decline
  • Extension Strategies
119
Q

What are the cons of the product life cycle?

A
  • shape and duration varies with product
  • decline not inevitable
  • hard to know which stage it’s in exactly
  • length can’t be reliably predicyed
120
Q

Why might a product enter the decline stage?

A
  • technological advancement
  • change in trends
  • increased competition
  • failure to innovate
121
Q

Price

What factors affect price?

A
  • PESTLE
  • branding
  • market growth and share
  • convenience
  • demand
  • location of business
  • PED & YED
122
Q

Price

What is price skimming?

A

Setting a high initial price for a new product in order to recoup costs and lowering it once the “early adopters” have gone

123
Q

Price

How do firms get away with price skimming?

A

By creating a “must-have” mentality

124
Q

Price

What is penetration pricing?

A

Involves setting a low initial price for a new product in order to get a foothold in the market and gain market share

125
Q

Price

What market is penetration pricing suitable for?

A

Mass markets

126
Q

Price

When would price be raised in penetration pricing?

A

Once a loyal customer base has been established

127
Q

Price

Pros to price skimming

A
  • High profits
  • Prolong sales
  • Competitive advantage
128
Q

Price

Pros to Penetration pricing

A
  • establishes loyal customer base
  • quick to gain market share
  • benefit from economies of scale
129
Q

Price

What is dynamic pricing?

A

Changes prices

Eg. Demand is high so prices rise
Closer it is to departure date, high
prices

130
Q

Price

What is competitive pricing?

A

Making sure the monitor competitors pricing to determine their own prixea

131
Q

Price

What is psychological pricing?

A

Basing the product in customer expectations

Eg high price for high value

132
Q

Price

What is price discrimination?

A

Prices different depending on customers

Eg. Children or OAP

133
Q

Price

What is loss leaders?

A

Sold at below cosy prices to entice people in, in hope they’ll buy more products

Eg. Boohoo’s £5 dress

134
Q

Price

What is predatory pricing?

A

When a business deliberately lowers prices to force another business out of the market (illegal)

135
Q

Promotion

Pros of advertising

A
  • attracts customers
  • wide coverage
  • control of message
  • brand loyalty
136
Q

Promotion

Cons of advertising

A
  • often expensive
  • impersonal
  • one way communication
  • lacks flexibility
  • limited ability to close a sale
137
Q

Promotion

Pros to personal selling

A
  • 2 way communication
  • interactive
  • customised
  • opportunity to close a sale
  • persuasive impact
  • potential development of relationship
138
Q

Promotion

Cons to personal selling

A
  • high cost
  • labour intensive
  • only reaches a small audience
139
Q

Promotion

Pros of sales promotion

A
  • effective at achieving quick boost of sales
  • encourages customers to trial product and switch brand
140
Q

Promotion

Cons of sales promotion

A
  • short term effect
  • May damage brand image
  • customers may expect further deals
141
Q

Promotion

What are sales promotions?

A

Tactical points of sale material or other incentives designed to stimulate purchases

142
Q

Promotion

What is merchandising?

A

Displaying products to maximise sales

143
Q

Promotion

Give examples of public relation strategies

A
  • enhancing public awareness
  • promote social responsibility
  • projecting good employee relations
  • favourable reviews
144
Q

Promotion

What is sponsorship?

A

Takes place when a payment for an event is given in return for consideration

145
Q

Promotion

What is direct marketing?

A

Promotional material directed through mail, phone or to individuals household

146
Q

Promotion

Pros to direct marketing

A
  • focuses limited resources
  • can personalise promotion
  • easy to measure response
  • cost effecguce
147
Q

Promotion

Cons to direct marketing

A
  • response rates vary hugely
  • negative image of junk mail
  • database expensive to maintain and keep accurate
148
Q

Place

Define place

A
  • how the product is sold
  • where the product is sold
  • distribution channels
149
Q

Place

List some distribution channels

A
  • e-commerce
  • retailers
  • B2C
  • wholesales
  • m-commerce
150
Q

Place

What is each part of a distribution channel called?

A

An intermediary

151
Q

Place

List the longest distribution channel and give examples

A

Producer - wholesaler - retailer - customer

Eg. Cadbury’s, Heinz

152
Q

Place

Pros and cons to using producer-wholesaler-retailer-customer

A

👍 reach more customers
👍 convenience
👎 lower profit margins
👎 worse customer service

153
Q

Place

What distribution channel uses 3 intermediaries?

Give examples

A

Producer - distributors/agents - customer

Eg. Travel agents, Avon, Amazon

154
Q

Place

Pros and cons to using producer - distributor - customer

A

👍 wider audience
👍 good marketing = persuasive with sales
👎 lower profit margins
👎 more costs of agents + commission
👎 old fashioned

155
Q

Place

What is the shortest distribution channel?

Give examples

A

Producer - customer

Eg. Clive’s Fruit Farm, Nike, Butchers

156
Q

Place

Pros and cons of producer-customer

A

👍 higher profit margins
👍 better customer service
👎 less demand
👎 only sells to local

157
Q

Place

What is multichannel distribution?

A

A business using more than 1 channel to reach a large audience with different demographixs

158
Q

Place

Why use intermediaries when they lower profit margins?

A
  • geography
  • lack of retail experience
  • convenient
  • trends
  • brand size
159
Q

Place

Why is it important that products are placed in the right location in stores?

A
  • easy to find = convenient
  • stand out from competitors
  • ensure with similar products = rep
160
Q

People

Why are people important?

A
  • provide customer service = rep and reviews
  • special expertise
  • promote the business
  • provide idea on ethics of business
161
Q

People

Why are people important in B2B trade?

A

Needs interpersonal skills, respect, honesty and explanations

162
Q

Process

Examples of processes are:

A
  • how easy it is to get an appointment
  • how long you wait for food to arrive at a restaurant
  • payment systems
  • user friendliness
163
Q

Process

Why is process so important?

A

Businesses must maximize profits while keeping customers happy

164
Q

Physical environment

What does this include?

A

Customer surroundings and evidence of purchases

165
Q

Physical environment

Examples of this to attract customers

A
  • lighting
  • decorations
  • uniform
  • store layout / website appearance
  • aesthetics and colours
166
Q

Why must the marketing mix be integrated?

A

Each one of the 7 P’s contributes consistently and positively to the success of the marketing effort to attract the target market

167
Q

Factors affecting the integrated marketing mix:

A
  • PESTLE
  • mission statement
  • competitors
  • budget
  • position in the product life cycle
  • target market

A-level Business (10 decks)

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