3: MARKETING Flashcards
define marketing
The process of identifying, predicting and satisfying customer needs profitably.
What type of objective is a marketing one?
A functional ( more specific than corporate )
Why set marketing objectives?
- Focus for decision making
- track progress
- measure success to motivate
- functional consistent with corporate objectives
Problems with marketing objectives
contrast to financial objectives
affected my external environment (PESTLE) so may be ambitious
may conflict eg cost vs new product
Internal influences on marketing objectives
HR (employees), finance, corporate objectives, leadership culture, operational objectives and capacity,product portfolio, market share, brand strength
External influences on marketing objectives
Economy, competitors, social needs, dynamic PESTLE, technology
What is market size?
Potential sales of a firm that’s measured by units and value
What is market growth?
Percentage change in the volume or value of sales of all the brandish the product category.
What is market share?
The split among competitors that a business has. high provides competitive advantage
Market share formula
sales / entire sales of market X100
What are the 7 P’s of the marketing mix?
Product
Price
Place
Promotion
People
process
physical environment
Why is it called a marketing mix?
Each element is related to eachother and they work together to meet desired objectives
Define marketing mix
Elements of a firms approach to marketing that enables satisfaction of customers
What is the role of the marketing mix
Delivering the marketing strategy
satisfy customers by choosing the audience and figuring how to serve them
What are the 4 main marketing mix P’s?
Place, product, promotion and price.
define market research
Gathering and analysing research to support a marketing strategy
what is primary research?
The data that you collect yourself
what is secondary research?
The data that already exists from other sources (blogs, websites, books, reports)
Benefits of primary research
Specific to needs, reliable, unique, customisable, up to date
Drawbacks of primary research
Takes time, costly, may not represent whole market
Benefits of secondary research
Accessible, low cost, efficient, info gathered quickly
Drawbacks of secondary research
may not be specific, old, can’t control quality of responses and unreliable, can’t analyse the findings as well
What’s quantitative data and the benefits of it?
Data based on statistics which is easy to compare and run with a larger sample size
Quantitative data drawbacks
limited responses, less deep opinions, no extra questions asked
What’s qualitative data and the benefits of it?
Opinion based, answering why, what questions
insightful, In depth responses, open questions = analysis
qualitative data drawbacks
reduces privacy for customers, challenging to collate responses, vary = hard to meet conclusions, not quick, opinions
Name 3 types of primary data
Focus groups, surveys, telephone interviews, observations, test marking and experiments
Name 3 types of secondary data
Publishes reports, websites, google stats, media reports, competitor material, international transactional data.
what is test marketing?
Primary research method that enables a business to target a demographic to do a small launch of product before big launch
Test marketing benefits
don’t waste recourses, less risk, understand audience, help to develop
Test marketing drawbacks
expensive, time consuming, gives time for competitors to come to market = miss gap, small market reach, can tarnish reputation if test fails
What is sampling
gathering data from a respondent sample which should be representative of the population
benefits of sampling for market research
provides useful insights with lower time, flexible, quick, helps reduce cost and risk of decisions
drawbacks of sampling for market research
risky if sample isn’t representative, bias of questions asked, less useful in dynamic opinion markets
What are the 3 types of market sampling?
Random, quota and stratified
what is random sampling?
Names being picked randomly so the population all have equal chance of being selected = low bias
What is quota sampling?
People in a particular demographic so the category is highly specific. Not as random because people don’t have equal chance of being selected
What is stratified sampling?
Random customers split into quotas (sub-catagories) then selected randomly within it proportionally to the amount of the market that are in that category
eg. 80% target market = female = 80% People asked are female
what is market mapping?
A model that helps to analyse key distinguishing factors between businesses or products
influences on sampling types
Budget, time, product type, focus of target market, lifecycle stage of product
Define price
What a customer has to give up for a product or service
What are steps a business might take to determine the price of a good?
- develop pricing objectives and strategies
- Assess target market demand
- Analyse cost, demand, revenue relationship.
- Evaluate competitors
- select a pricing strategy
What are some financial objectives that may influence pricing?
- The will to maximise profit or reach a level of sales
- To improve cash flow
- Maximise sales revenue
What are some marketing objectives that may influence pricing?
- To improve or maintain market share
- Increase sales
- build a brand
- to beat competitors
What is the difference between a pricing method and strategy?
A method is how the actual price is set but a strategy is adopted overtime to meet marketing objectives
What are pricing tactics?
A short-term approach to pricing designed to deal with a short term threat or opportunity
What are pricing strategies?
Long-term goal regarding pricing
What is a pricing method?
The calculations done by a firm to decide the price of a good or service.
What are factors that influence pricing?
Competitors, market share, stage of life cycle, elasticity of demand, costs.
What’s the difference between a price taker and a price maker?
Takers have to charge the ruling market price but makers are able to fix their own price as a result of competitive advantages, first mover etc
what’s the difference between a price leader and a price follower?
Leaders change their price, then competitors follow this
Followers follow the leaders price changing lead
Factors that impact the price charged
Competitors, state of economy, costs, economies of scale, market conditions, brand image, location of business ( eg regent street charge more, houses in city centre charge more) , price elasticity of demand
What is penetration pricing?
When a product is launched at a low price to gain market share and customers. prices may later be raised.
What is price skimming?
A new/innovative good is sold at a high price when it first enters the market and is reduced over time
When is price skimming adopted?
A market with high volume of early adopters
An exclusive brand that wants a luxury reputation.
What is price leadership?
the business is first to the market so it sets the price so that small firms follow.
how can a larger firm operate at lower overhead costs?
Economies of scale = lower cost per unit
What is predator pricing?
A strategy that deliberately lowers prices to an unprofitable level to force out small corporation competitors. Immoral.
What is premium pricing?
When goods prices are set higher than competitors to indicate a high quality brand image
What is seasonal pricing?
Raising prices in peak seasons for example ice cream up in summer due to positive price elasticity of demand
What is physcological pricing?
Making the customer believe that goods are cheaper than it is. Eg £9.99
What is loss leaders pricing strategy?
Where products are sold unprofitably below cost price to entice customers into the store and buy full price items
What is price discrimination?
Where products or services are sold at different prices depending on the customer for example: children tickets on the bus are cheaper
What is dynamic pricing?
It changes with the time eg: underground more expensive at peak times
What is cost-plus /mark up pricing?
Costs and adding a percentage on top to figure how much profit you want to make from it
Define Boston matrix
A method of analysing brands in a firms product portfolio I terms of market share and market growth. Brenda are classified as stars, problem children/question marks, dogs, cash cows.
Define confidence levels
The probability that the research findings are correct. This is expressed as a percentage of confidence that are findings are accurate.
Define correlation
A statistical technique used to establish the strength of a relationship between two sets of values.
What is a distribution channel?
ways of getting the products to where the customer can buy them.
What is an extension strategy?
Attempts to raise sales when products are reaching the end of their life cycle and have been declining. eg. repackaging, changing use.
What is extrapolation?
Using previous patterns of numerical data to estimate future values
What is market segmentation?
Dividing up market into groups of potential customers, each with different characteristics.
what is niche marketing?
Targeting a small specialised part of an overall market
What are the 6 stages of the product life cycle?
Research and development
introduction
growth
maturity
Saturation
Decline
