3.3 improving marketing performance

Question 1

what is market segmentation

Answer 1

dividing a market into parts that reflect diff customer needs and wants

Question 2

market segmentation
Pros x Cons

Answer 2

pos
- helps to better understand companys target market
- allows business to better design their marketing mix to increase sales x market share
- helps them plan suitable new products to meet their chosen market segments
- helps build strong brand identity + establish loyalty

neg
- difficult to identify most important segments for a product
- constant research needed to stay up to date w changing consumer tastes + anticipate these changes
- firms may find it difficult to reach their market segment e.g. younger audiences - may need to avoid traditional advertising
- products may become too specific to a market not catering to others therefore reducing sales

Question 3

demographic segmentation

Answer 3

Defining a market in terms of characteristics e.g. age, gender, income, location,

Question 4

behavioural segmentation

Answer 4

• lifestyle = interests, hobbies etc
• level of brand loyalty
• benefit of buying these products
• purchase occasions
• frequency of usage

Question 5

marketing

Answer 5

the management process of understanding customers and finding ways to provide products or services which customers demand.

Question 6

purposes of marketing

Answer 6

• market research to find out what customers want and what would make them buy products
  -design marketing strategy and develop a company brand to satisfy customer wants
• meeting the needs of the business e.g. making sure it achieves its aims + objectives of survival, profitability etc

Question 7

market positioning

Answer 7

how customers perceive the product and where it is positioned in the market

Question 8

product differentiation

Answer 8

creating a USP and making brand stand out from competitors

Question 9

sales growth

Answer 9

% change in sales volume/ value over period of time for a specific brand
(new sales - old sales) / old sales x 100

Question 10

market growth

Answer 10

% change in sales vol/value over period of time for whole market

(new size - old size) / old size x 100

Question 11

factors influencing market growth

Answer 11

• economic growth - better sales, benefits luxury brands e.g. holidays
  low economic growth - benefits businesses that focus on low prices e.g. primark
• type of product
  -social changes
• demographic changes
• changes in tastes x fashion
• brand
• brand loyalty

Question 12

external influences

Answer 12

• political x legal factors
• economic factors
• social factors
• technological change
• ethical x environmental factors
• state of the market factors
• competitors actions
• customers and suppliers

Question 13

internal influences on marketing objectives

Answer 13

• business objectives
• finance
• HR
• operational issues
• type of product

Question 14

confidence intervals

Answer 14

help business understand how reliable an estimate is + how confident they can be to act on the data when making decisions

Question 15

extrapolation

Answer 15

involves using past data to predict future levels of sales for products/services

Question 16

test marketing

Answer 16

small scale launch of a product - like a pilot study

Question 17

price elasticity of demand

Answer 17

% change in quantity demanded / % change in price
“for every 1% change in price demand falls by ___”
elastic goods = greater than 1
inelastic = less than 1
unitary elasticity = 1

Question 18

product life cycle

Answer 18

research + dev > intro > growth > maturity > saturation > decline

Question 19

decline stage

Answer 19

• let product decline in sales until it no longer sells
• withdraw product
• extension strategies : promotion, product differentiation