3 Marketing Flashcards
1
Q
What is marketing?
A
identifying customer wants and satisfying them profitably.
2
Q
What is a customer?
A
a person/ business or other organisation which buys goods/ services from a business.
3
Q
What is customer loyalty?
A
when existing customers continuously buy products from the same business.
4
Q
What is market share?
A
the percentage of total market sales held by one brand/ business.
4
Q
What are customer relationships?
A
communicating with customers to encourage them to become loyal to the business and its products.
- gain information about customers
- anticipate changes in customer needs
5
Q
What is a consumer?
A
a person who buys goods/ services for personal use, not to re-sell.
6
Q
Why do customer/consumer spending patterns change?
A
- consumer taste and fashion changes
- better in technology
- change in income
- ageing population
7
Q
Why have some markets become more competitive?
A
- globalisation
- transportation improvement
- internet/ e-commerce
8
Q
How can businesses respond to changing spending patterns and increased competition?
A
- maintain good customer relationships
- keep improving existing products
- bring new products to keep customers interested
- keep cost low to stay competitive
9
Q
What is a market?
A
the total number of customers and potential customers and sellers for that particular good/ service.
10
Q
What is a mass market?
A
where there is a very large number of sales of a product.
11
Q
What is a niche market?
A
a small, usually specialised, segment of a larger market.
12
Q
What is a market segment?
A
an identifiable sub-group of a whole market in which consumers have similar characteristics/ preferences.
13
Q
How can you segment a market?
A
- socio-economic group
- age
- region/ location
- gender
- use of product
- lifestyle
14
Q
What is market research?
A
the process of gathering, analysing and interpreting information about a market.
15
Q
What is a product-oriented business?
A
one whose main focus of activity is on the product itself?
16
Q
What is a market-oriented business?
A
one which carries out market research to find out consumer wants before a product is developed and produced.
17
Q
What is a market budget?
A
a financial plan for the marketing of a product/ product range for some specified period of time.
it specifies how much money is available to the market product/ range so that the marketing department knows how much it may spend.
18
Q
What is primary research?
A
the collection and collation of original data via direct contact with potential/ existing consumers.
19
Q
What is secondary research?
A
uses information that has already been collected and is available for use by others.
19
Q
What are some types of primary research?
A
- questionnaires
- online surveys
- interviews
- focus groups
19
Q
What is a questionaire?
A
a set of questions to be answered as a means of collecting data for market research.
20
Q
What is a sample?
A
the group of people who are selected to respond to a market research exercise.
20
Q
What is an online survey?
A
requires the target sample to answer a series of questions over the internet.
20
What is an interview?
involves asking individuals a series of questions (often face-to-face or over the phone)
20
What is a focus group?
a group of people who are representative of the target market.
20
What is a random sample?
when people are selected at random as a source of information for market research.
21
What is a quota sample?
when people are selected on the basis of certain characteristics as a source of information for market research.
21
What are internal sources of secondary data?
information that is readily and cheaply available from the business's own records.
22
What are some examples of internal secondary data?
- sales department records, pricing data, customer records, sales reports
- opinions of distribution and public relations personnel
- finance department
- customer service department
23
What are external sources of secondary data?
when information is obtained from outside the business.
24
What are examples of external secondary data?
- government statistics
- newspapers
- trade association
- market research agencies
- online sources
25
What is a marketing mix?
all the activities which go into marketing a product/ service.
26
What are the four P's of the marketing mix?
- Promotion: how the product will be advertised/ promoted.
- Product: the good/ service itself.
- Price: the price at which the product is sold to consumers.
- Place: the channels of distribution that are selected.
27
What are the types of products?
- consumer goods: goods bought by customers for their own use.
- consumer services: services bought by customers for their own use.
- producer goods: goods bought by producers for their business's use.
- producer services: produced to help other businesses.
28
What makes a product sucsessful?
- satisfies wants/ needs of consumers
- well designed
- capable of stimulating new customer wants
- not too expensive to produce
- first business to produce before competition
- unique selling point
29
What is a unique selling point (UPS)?
the special feature of a product that differentiates it from the products of competitors.
30
What is a brand name?
the unique name of a product that distinguishes it from other brands.
31
What is brand image?
an image/ identity given to a product which gives it a personality of its own and distinguishes it from its competitor's brands.
32
What is brand loyalty?
when consumers keep buying from the same brand again instead of choosing from a competitor's brand.
33
What is packaging?
the physical container/ wrapping for a product that is used for promotion and selling appeal.
33
What is the product life cycle?
the stages a product will pass through.
34
What is the product life cycle?
1. Development: the prototype is tested and market research is carried out before product launch.
- No sales
2. Introduction: the product is launched into the market. - slow sales
- informative advertising
- (maybe) price skimming if there are no competitors
- no profit
3. Growth
- persuasive advertising
- price reduction
- profits being made
- competitors appear
4. Maturity
- slow sale increase
- intense competition
- competitive/ promotional pricing
- advertising
- high profits
5. Saturation
- high competition, no new competitors
- competitive pricing
- high and stable advertising
- profits fall
- price reduction
6. Decline: the product has lost its appeal.
- withdrawn from the market
- slow sales
- very reduced prices
- unprofitable
34
What is cost plus pricing?
the cost of manufacturing the product plus a profit markup.
34
What is an extension strategy?
a way of keeping a product at the maturity stage of the life cycle and extending the cycle.
35
How might businesses extend their product's life cycle?
- introduce new variations
- sell into new markets
- small changes to the product
- new advertising campaign
- new, improved product
- sell through additional/ different retail outlets
36
The total cost of making 2000 chocolate bars is $2000. The business wants to make 50% profit on each bar. Calculate the selling price per bar.
( 2000/2000 ) + 50% = $1.50
36
What are the benefits and limitations to cost-plus pricing?
Benefits:
- easy to apply
- different markups can be used in different markets
- each product earns profit
Limitations:
- lose sales if product is higher than competitors
- total profit will only be made when enough units sell
- no incentive to reduce cost
37
What is competitive pricing?
setting the product price in line with/ just below the competitor's prices.
38
What is penetration pricing?
setting the price lower than competitor's prices in order to enter a new market.
39
What is price skimming?
setting a higher price for a new product on the market.
40
What is promotional pricing?
selling a product at a very low price for a short period of time.
41
What is a distribution channel?
the means by which a product is passed form the place of production to the customer.
41
What is dynamic pricing?
when businesses change product prices, usually when selling online, depending on the level of demand.
41
What is price inelastic demand?
where consumers are not sensitive to changes in price.
41
What is price elastic demand?
where consumers are very sensitive to changes in price.
42
What are the distribution channels?
1. Distribution Channel 1: Producer → Consumer
2. Distribution Channel 2: Producer → Retailer → Consumer
3. Distribution Channel 3: Producer → Wholesaler → Retailer → Consumer
4. Distribution Channel 4: Producer → Agent → Wholesaler → Retailer → Consumer
43
What is an agent?
an independent person/ business that is appointed to deal with the sales and distribution of a product/ range of products.
44
What is promotion?
where marketing activities aim to raise customer awareness of a product/ brand, generating sales and helping create brand loyalty.
44
How do you chose which distribution channel to use?
- What type of product is it
- Is the product technical?
- How often is the product purchased?
- How expensive is the product?
- How perishable is the product?
- Where are the customers located?
- Where do competitors sell their products?
45
What is advertising?
paid for communication with potential customers about a product to encourage them to buy it.
46
What is informative advertising?
where the emphasis of advertising/ sales promotion is to give full information about the product.
47
What is persuasive advertising?
advertising/ promotion which is trying to persuade the customer that they really need the product and should buy it.
48
What is the target audience?
people who are potential buyers of a product/ service.
49
What are some examples of advertising media?
- TV
- Radio
- Newspaper
- Magazines
- Posters/ billboards
- Cinema, DVD
- Leaflets
- Internet
- Other forms of publicity
50
What is sales promotion?
incentives such as special offers/ deals aimed at consumers to achieve short term increase in sales.
51
What are some types of sales promotion that can be used by businesses?
- After-sales service
- Gifts
- BOGOF
- Price reductions
- Competitions
- Point-of-sale displays and demonstrations
- Free samples
- Product placement
52
What is a marketing budget?
a financial plan for the marketing of a product/ product range for a specified period of time.
53
What is social media marketing?
a form of internet marketing that involves sharing and creating content on social media networks in order to achieve marketing and branding goals.
54
What is viral marketing?
when consumers are encouraged to share information online about the products of a business.
55
What is e-commerce?
the online buying and selling of goods and services using computer systems linked to the internet.
56
What are the opportunities of e-commerce to businesses?
- promotion of company and products worldwide (cheaper)
- orders can be taken over the internet and sent to warehouse for dispatch
- customers are encouraged to purchase more products
- easily make online purchases of supplies and materials from other businesses
- dynamic pricing
57
What are the opportunities of e-commerce to consumers?
- no need to leave the house
- easy to compare prices
- debit/ credit card is easy to use
- easy access to products/ services abroad
- lower prices
- buy directly from manufacturer
- cheaper to buy from abroad
58
What are the threats of e-commerce to a businesses?
- increased competition
- website costs is expensive
- transport costs per product
- no face-to-face contact with consumers, no market research feedback
- returns can be added to business cost
- larger inventory is needed
- not suitable for businesses that sell personal services
59
What are the threats of e-commerce to consumers?
- needs access to internet
- weak internet can result in frustration
- products can't be seen/ touched/ tried on before purchase
- sending products back is inconvenient
- hard to find more information about goods/ services
- identity theft and fraudulent card use (weak security)
60
What is a marketing strategy?
a plan to combine the four elements of the marketing mix for a product/ service to achieve a particular market objective(s).
61
What are some examples of marketing objectives?
- increase sales by selling to new market/ more to existing market
- increasing sales by improving it
- achieve target market share with newly launched product
- increase market share
- maintain market share
- increase sales in niche market
62
What are some examples of consumer protection laws?
- Consumer Protection Act 2005
- Consumer Protection Act 2011
- Supply of Goods and Services Act
- The Consumer Contracts Regulations
63
What are some problems of entering foreign markets?
- lack of knowledge
- cultural differences
- exchange rates
- import restrictions
- increased risk of non-payment
- increased transport costs
64
How do you overcome the problems of entering new markets abroad?
- joint ventures
- licensing
- international franchising
- localising existing brands
