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Business studies > 3.14 What is Marketing? > Flashcards

3.14 What is Marketing? Flashcards

1
Q

Define Marketing

A

The management task that links the business to the customer by identifying and meeting the needs of customers profitably

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2
Q

Consumer markets

A

Markets for goods and services bought by the final user of them

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3
Q

Industrial markets

A

Markets for goods and services bought by businesses to be used in the production process of other products

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4
Q

Marketing objectives

A

The goals set for the marketing department to help the business achieve its overall objectives

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5
Q

Marketing strategy

A

Long-term plan established for achieving marketing objectives

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6
Q

Market orientation

A

An outward-looking approach basing product decisions on consumer demand, as established by market research

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7
Q

Product orientation

A

An inward-looking approach that focuses on making products that can be made- or have been made for a long time- and then trying to sell them

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8
Q

Asset-led marketing

A

An approach to marketing that bases strategy on the firm’s existing strengths and assets instead of purely on what the customer wants

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9
Q

Societal marketing

A

An approach that considers both the demands of consumers and the effects on all members of the public involved in some way when firms meet these demands

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10
Q

Demand

A

The quantity of a product that consumers are willing and able to buy at a given price in a time period

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11
Q

Supply

A

The quantity of a product that firms are prepared to supply at a given price in a time period

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12
Q

Equilibrium price

A

The market price that equates supply and demand for a product

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13
Q

Market size

A

The total level of sales of all producers within a market

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14
Q

Market growth

A

The percentage change in the total size of a market ( volume or value) over a period of time

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15
Q

Market share

A

% of sales in the total market sold by one business

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16
Q

Product differentiation

A

Making a product distinctive so that it stands out from competitors’ products in consumers perception

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17
Q

USP (Unique selling point)

A

The special feature of a product that differentiates it from competitors products

18
Q

Niche marketing

A

Identifying and exploiting a small segment of a larger market by dev. products to suit it

19
Q

Mass marketing

A

Selling the same products to the whole market with no attempt to target groups within it

20
Q

Demand features

A
  1. Varies with price
    • Changes in consumers’ income
      - Changes in the prices of substitute goods and complementary goods
      - Changes in population size and structure
      - Fashion and taste changes
      - Advertising and promotion spending
21
Q

Supply features

A
  1. Varies with price - will be more willing to supply a product if the price rises and will supple less as the price falls
  2. Change in an of these determinants:
    - Cost of production
    - Tax by government
    - Subsidies to suppliers -> reduce cost
    - Weather conditions
    - Advance in technology
22
Q

Ads of niche marketing

A

+ Small firms may be able to survive and thrive in markets that are dominated by larger firms
+ Market is currently unexploited by competitors –> filing a niche can offer the chance to selll at high prices and high profit margins
+ Customers pay more for exclusive products
+ Niche market products can be also be used by large firm to create status and image (their mass-market products may lack these qualities)

23
Q

Features of mass marketing

A

selling into the largest part of a market where there are many similar products and
services and where the majority of customer needs are similar and general
– associated with higher production and capacity levels
– economies of scale are achievable
– focus on low costs of production to achieve success/competitiveness
– likely heavy brand promotion/high volume sales/low profit margins/lots of
competition/little differentiation between products/services

24
Q

Features of niche marketing

A

the targeting of a small segment of a large market where customers are seen to have
special needs and wants.
– attractive to small businesses where there may be less competition and allows a clear
focus on specific customers.
– specialist skills/knowledge/market expertise is developed
– may be able to charge a premium price and earn higher profit margins
– develop loyal customers
– economies of scale not achieved and risk of overdependence on limited product
portfolio-vulnerable to market changes and increased competition.

25
Q

Ads of mass marketing

A
  • Achieve economies of scale -> enjoy substantially lower average costs of production
  • Mass-market strategies run fewer risks than niche’s. For e.g: Niche contain relatively small no. of costumers –> change in consumer buying habits -> rapid decline in sales.
26
Q

Market segment - consumer groups

A
  1. Geographic differences: - Cultural
    - Climate, weather
  2. Demographic: Study of population data and trends, age, sex, family size and ethnic background
    - Income and social class
    A - upper middle class (higher managerial, administrative and professional) - directors or lawyers
    B - middle class - managerial staff - teachers
    C1 - lower middle class - supervisory - clerical or junior managerial
    C2- Skilled manual workers
    D- working class - semi and unskilled manual workers
    E - casual, part-time workers and unemployed
  3. Psychological factors: - lifestyles
    -personalities
    -values and attitudes
27
Q

Ads market segmentation

A

+ Can define their target market precisely therefore can design and produce goods that are specifically aimed at target groups -> increase sales
+ Enables identification of gaps in the market to further exploited groups that previously have not been targeted
+ Differentiated marketing strategies can be focused on target market groups -> avoid wasting money trying to sell product to the whole market
+ Small firms can specialise in one or two market segments -> more chance to compete
+ Price discrimination can be used to increase revenue and profits

28
Q

Disads of market segmentation

A
  • R&;D and production costs might be high bc of having to market several different product variations
  • Promotional costs might be high as different advertisements and promotions might be needed for different segments -> marketing economies of scale not fully exploited
  • Production and stock-holding costs might be higher than for the option of just producing and stocking one undifferentiated product
  • Extensive market research needed
  • Excessive specialisation -> problematic if consumers in the segments change their purchasing habits significantly
29
Q

Market segmentation

A

Identifying different segments within a market and targeting different products or services at them – a customer-focused strategy – identifying sub-groups in a market in which consumers have similar characteristics.

30
Q

Disads of niche market

A
  • no economies of scale
  • more risk bc fewer customer
  • fewer customers -> limit total profit
  • niche becomes more attractive -> affect original entrants
31
Q

To be effective, marketing objectives should

A
  • Fit in with the overall aims and mission of the business
  • Be determined by senior management
  • Realistic, motivating, achievable, measurable and clearly communicated in all departments
32
Q

Marketing objective is important because

A
  • Sense of direction for marketing department
  • Progress can be monitored
  • Can be broken down into regional and product sales targets to allow management by objectives
  • Form the basis of marketing strategy
33
Q

How marketing department coordinates with finance

A
  • Finance use sales forecasts to help construct cashflow forecasts and operational budget
  • Ensure necessary capital is available to pay for market budget
34
Q

How marketing coordinates with human resources

A
  • Sales forecasts help devise a workforce plan for all departments e.g New staffs needed in sales and production
  • Ensure recruitment is qualified to increase in sales planned by marketing dpt
35
Q

How marketing coordinates with operations

A
  • Market research play a huge role in product developement

- Sales forecasts will be used to plan for the capacity needed e.g: Number of machines, inputs …

36
Q

Benefits of market orientation

A
  • Chances of new products failing are reduced (if market research is good)
  • Consumer needs met -> survive longer and make higher profit
  • Constant feedback from consumers - adaptation of product
37
Q

Benefits of product orientation

A
  • Invent and develop products in the belief that they will find consumers to purchase
  • Concentrate their efforts on producing high-quality goods. Quality > market fashion
38
Q

Measure market size

A
  • Volume of sales (units sold)

- Value of goods sold (revenue)

39
Q

Benefits of high market share

A
  • Sales are higher than any competing business -> could have higher profit
  • Retailers are keen to promote best-selling brands
  • As shops are interested in the brand -> able sell products to them at lower discount rate - 10% instead of 15%
  • The image of “market leader” can be used in advertising bc consumers love popular brands
40
Q

Problems with measuring market share and growth

A

A firm might sell less products but at a higher price –> by value increases but by volume decreases or stay the same. -> ambiguous
e,g: Cosmetic company specialises in low volumes of expensive products -> higher market share in terms of value then in volume

41
Q

Portfolio analysis

A
  • Considers the range of products a business produces in the light of the markets it operates in
  • Considers market growth, market share and segmentation.
  • Ensures:
    + always another product to replace one that is losing sales or market share
    + flexibility in a changing market situation
    + revenue to cover loss from a failing product

Business studies (23 decks)

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