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a level business > 3.3 marketing > Flashcards

3.3 marketing Flashcards

1
Q

what is marketing

A

the function within a business concerned with communicating with customers
its a two way process whereby the business learns about its customers in order to provide goods and services that meet their needs
it is then concerned with ensuring customers are aware, understand and desire the product

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2
Q

importance of marketing, what does the process of marketing allow a business to do

A

understand the market it is operating in
understand what customers want
understand the relative strengths and weaknesses in comparison to competitors
build a strong brand
build relationships with customers
understand the nature of pricing for its products

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3
Q

what is a market

A

where buyers meet sellers
a market exists wherever there are potential customers who want to buy a product and where there is a business able to produce and sell that product
all markets have unique charachteristics, can grow or shrink and can be distinguished on a local, regional national or global scale
eg the uk housing market or the global market for oil

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4
Q

what do mrketing departments set objectives around

A

market and sales growth
market share
brand loyalty
brand image

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5
Q

market and sales growth

A

measured in volume (units) or value (pounds)
marketing can increase the awarenes, desire and ability of customers to buy the product- leads to increased revenue

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6
Q

market share

A

the amount a business sells as a percentage of the whole market
increasing market share gives a business more influence and power in the market and means it has increased its number of customers

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7
Q

brand loyalty

A

businesses need regular custom in order to succeed
brand loyalty involves building a relationship with customers in order to encourage repeat purchasing

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8
Q

brand image

A

building brand charachteristics
if a business develops a good reputation(eg high quality)
it can attrat and reassure customers and allow them to charge a premium price

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9
Q

externa influences on marketing objectives

A

political
economic
social
competitors

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10
Q

internal influences on marketing objectives

A

finance
operations
human resources

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11
Q

what is the first stage of the marketing process

A

marketing research
it involves gathering and analysing qualitative and quantitative market data

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12
Q

what is market research a key indicator of

A

customer needs which drives decision making across all business functions, not just marketing

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13
Q

what is the market research process

A

define problem/question
develop market research plan
collect data
analyse data
interpret and report findings

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14
Q

what questions will market research attempt to answer

A

who are out potential customers?
what do our customers want?
how big is the market-is it growing?
who are our competitors?
what are customers willing to pay?
is there a gap/opportunity in the market?

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15
Q

advaantages of primary market research

A

specific to the needs of the business
more up to date and reliable
gives more opportunity for two-way communication and follow up questions
often better if you want to collet qualitative data
sampling provides an insight into the market but saves money as the whole population is not needed
a sample must be representative, unbaised and large enough to represent the whole market

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16
Q

disadvantages of primary market research

A

can be more time consuming and therefore costly
difficult to conduct a large sample size

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17
Q

examples of primary market research

A

questionaires
consumer panels
interviews
focus groups
customer observations

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18
Q

what is primary market research

A

research collected first hand

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19
Q

what is secondary market research

A

research that already exists conducted by another organisation

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20
Q

advantages of secondary market research

A

easily accessible and a good starting point
fast and less time consuming
often better if you want to collect quantitative data

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21
Q

disadvnatages of secondary market research

A

some data can be free but detailed reports can be expensive to purchase
not always up to date or specifically tailored to the business’ needs

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22
Q

examples of secondary market research

A

market research reports
competititors
webstes
government statistics
newspaper articles

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23
Q

what is market mapping

A

a technique used to understand how products/businesses are viewed relative to competitors based on two relevenat charachteristics

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24
Q

market mapping

A

helps businesses decide whether to set up in a market-is there a gap/opportunity
a useful process for comparing similarities and differences between businesses- market positioning
helps a business gain a better understanding of its competition
useful as a market research tool to gain an understanding of customer perceptions

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25
Q

limitation of a market map

A

only considers twomain variables- markets and customer perceptions are often very complex

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26
Q

what does correlation help businesses understand

A

the relationship between two factors
if a business can understand the key factors in determining demand for its products then it can manipulate them to achieve greater sales

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27
Q

what is correlation given as a value between

A

-1 and +1

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28
Q

what does sampling involve

A

selecting a representative group of people from the target population

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29
Q

advantages of sampling

A

it is quicker and easier than trying to collect research from everyone- this is often impossible
the bigger the sample size the more representative it will be

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30
Q

what determines the accuracy and reliabikity of the research

A

the sample size and method of conducting the research
anything less than the whole population cant be 100% accurate

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31
Q

confidence level

A

an indication of how accurate the research findings are eg 80%=80% confidence the results are accurate

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32
Q

confidence interval

A

the possible range of outcomes for a given confidence
as the interval narrows the confidence level will fall

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33
Q

extrapolation

A

means predicting future trends eg sales trends based on past results
extrapolation is reliable when conditions remain the same
the further into the futire we extrapolate the less confidence we have in the certaaintly of the prediction

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34
Q

what is price elasticity

A

the effect of a change in price on the quantity demand

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35
Q

what is income elasticity

A

the effect of a change in consumer income on the quantity demanded

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36
Q

what factors influenve elastcity

A

number of substitutes/competitors
relative effort/costs of switching to another product
extent to which the product is considered a necessity
percieved value of the brand

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37
Q

what happens if there is a price increase and the product is price/income elastic

A

leads to a bigger percentage decrease in demand
revenues fall

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38
Q

what happens if prices increase on a price/income elastic product

A

leads to a smaller percentage decrease in demand
revenues rise

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39
Q

what happens if prices decrease on a price/income elastic product

A

leads to a bigger percentage increase in demand
revenues rise

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40
Q

what happens if price decreases on a price/income inelastic product

A

leads to a smaller percentage increase in demand
revenues fall

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41
Q

how is market size expressed

A

in terms of units sold or value

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42
Q

market share formula

A

total company sales divided by total market sales x100

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43
Q

market and sales growth formula

A

increase in market size/sales (the difference) divided by original size/sales x 100

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44
Q

uses of market research

A

product development
budgeting
production forecast
sales forecasting
developing marketing activities such as promotional campaigns
workforce forecast
cash flow forecasting

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45
Q

technology and market research

A

technology can make the collection of market research data much faster and more specific to individual customers
this data can also be processed more effectively so that trends, patterns and correlations can be uncovered and used to help make marketing decisions
eg store and loyalty cards are an extremely effective way for businesses to collect data on their customers

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46
Q

what is segnemtation, positioning and targeting (STP)

A

the process a business will use to ensure it is able to succeed in a market without necessarily competing directly with other companies

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47
Q

what does market segmentation allow business to do

A

specialise in order to better meet the needs of customers

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48
Q

what does market segmentation allow businesses to do

A

differentiate itself from competitors
develop and build its brand
identify and satisfy the needs of a specific group of customers
reach its customers with relevant marketing activities such as advertising
focus the business activities
build loyalty towards its brand and products

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49
Q

methods of market segmentation

A

behavioural
income
demographic
geographic

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50
Q

behavioural

A

considering factors such as when people buy, why people buy, loyalty towards a brand

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51
Q

income

A

how much people earn

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52
Q

demographic

A

based on charachteristics such as age, gender, occupation

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53
Q

geographic

A

based on where people live

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54
Q

positioning

A

businesses might use a market map to help them position their business within the market
positioning involves a business considering the combination of benefits and price relative to competitors

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55
Q

what is niche marketing

A

where businesses tend to focus on a specific segment of the market with particular needs

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56
Q

what happens if a business targets a mass market

A

will produce a generic product that meets the needs of most people
whether a business is niche or mass market determines how a business markets its products and positions itself in the market

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57
Q

what is the scale of segmentation in a market

A

mass market
market segment
niche market
individual

58
Q

mass market

A

targetting a large population of the market with a generic product
requires production on a large scale and investment in capacity
potential for high sales revenue
may compete with many other businesses in the market
promotion will involve mass market techniques such as TV and newspapers
busimess will have to be competitive on price in order to succeed

59
Q

niche market

A

targetting a small population of the market with a specialised product
production on a small scale (possibly bespoke)
low volumes but high profit margins
few competitors but limited number of potential customers
promotion through specialist mediums
direct marketing
businesses will have to compete on quality and customisation to succeed

60
Q

individual

A

in some industries technology has allowed businesses to profile individuals and customise their products so they can target customers as individuals such as online bespoke greeting cards

61
Q

the STP process

A

segmentation
targeting
positioning

62
Q

segmentation

A

identify target market based on bsuiness strengths, potential for sales, profitability of segment and presence of competition

63
Q

segmentation

A

identify target market based on business strengths, potential for sales, profitability of segment and presence of competition

64
Q

targeting

A

use of methods for categorising customers based on their charachteristics and needs

65
Q

positioning

A

position business relative to competitors in order to meet customer needs currently not satisfied (gap in the market) or alongside a business where they can do it better

66
Q

what is the marketing mix

A

7p’s
collection of factors a business must consider when marketing its products to meet the needs of its customers
to be successful these seven factors must complement each other

67
Q

what are the 7ps

A

price
place
process
physical environment
people
promotion
product

68
Q

price

A

set to match the expectations of customers and the features of the product

69
Q

place

A

using the right channels to get the product to the customer

70
Q

process

A

making the transaction convenient efficient and effectove for the customer

71
Q

physical environment

A

matching the physical environment in which the transaction takes place to the product and brand

72
Q

people

A

adding to the product by using the right people in the transaction

73
Q

promotion

A

communicating the product offer, creatng an awareness and desire to buy

74
Q

product

A

everytging that the customer buys- brand, features and benefits of a good or service

75
Q

why do different products require different forms of marketing

A

customers go through a different process when buying different types of products

76
Q

types of consumer products

A

convenience items
shopping goods
speciality products

77
Q

conveience items

A

bought on impulse
not brand loyal
consumers are sensitive to price changes
products must be widely available

78
Q

shopping goods

A

consumers will ‘shop around’
consumers take their time and will compare product features
brand and price become more important in the purchasing decision
consumers are susceptible to promotion techniques

79
Q

speciality products

A

there are high levels of engagement
consumers take a long time to process information and make a decision
people involved in the transaction are very important
physical environment is very important
consumers are willing to travel far

80
Q

what is it important to consider when analysing the product

A

‘whole product’
three levels
the core benefits
the actual product
the augmented product

81
Q

the core benefits

A

this is what the product actually does and how well it does
how well does the product do its function

82
Q

the actual product

A

this includes all of the product features
the details and benefits that add value
this might include deatures to improve quality convenience efficiency style and reliability

83
Q

the augmented product

A

this includes everything the business builds around the product
service advice after-sales care and features to build loyalty and a long term relationship with the brand

84
Q

influences on and development of new product development

A

when developing products a business must consider the ‘whole product’ along with design function and cost
all products must have a balance of design function and cost
influencing any one of these features can have a detrimental mpact on the other two
eg improving the design could reduce the functionability of the product or improving the functionality coukd increase costs

85
Q

product portfolio analysis (PPA)

A

can be used to analyse and track the development of multiple products over time taking into account a number of factors such as growth, sales and market

86
Q

5 stages of the product life cycle

A

introduction
growth
maturity
saturation
decline

87
Q

introduction

A

price may be low to initial sales
heavy promotion to create awareness
low number of product variations launched

88
Q

growth

A

price may increase with popularity
new varieties and distribution methods introduced
business must keep up with demand growth

89
Q

maturity

A

consider cutting price to maintain demand, promotion slows as customers are aware of product
introduction of new customers slows down- focus instead on retention and repeat purchase

90
Q

saturation

A

the market is ‘full’- all potential customers have the product and there are other better/cheaper alternatives
price may be cut to maintain competativeness

91
Q

decline

A

further price cuts to maintain demand
variety of products streamlined to the most popular
business may consider discontinuing product if replacement can be introduced
an extension strategy may be used to re-launch the product to boost new growth
eg slight modifications may be made to the design and packaging of a product to make it appear new or ‘fresh’

92
Q

life cycle curve

A

not all products have the same life-cycle curve
fad products may grow and decline very quickly whereas some products will maintain maturity for a long time

93
Q

advantages of PPA

A

useful analysis tool for a business with a wide product range
useful for making decisions about where funds should be allocated
can be used to predict future sales and therefore plan production/distribution

94
Q

disadvantages of PPA

A

products and markets are complicated and do not necessarily follow a pattern
does not provide clear solutions for businesses
as with all models, PPA simplifies what can be a complex issue

95
Q

what is on the x and y axis of the boston matrix

A

x= relative market share (cash generation)
y= market growth rate (cash usage)

96
Q

where is cash cow on the boston matrix

A

low market growth rate
high relative market share
bottom left

97
Q

where is stars on a boston matrix

A

high market growth rate
high relative market share
top left

98
Q

where are question marks on the boston matrix

A

high market growth rate
low relative market share
top right

99
Q

where are dogs on the boston matrix

A

low market growth rate
low relative market share
bottom right

100
Q

cash cow

A

successful products in mature markets
cash cows generate high revemue for a business that can be invested in other areas
relatively little promotion is required

101
Q

stars

A

possibly a leading brand in the market
distribution must be effectove to ensure product availability

102
Q

question marks

A

fast growing market but not yet an established product
normally requires heavy investment to develop and ensure success
usually lots of competititon from rival brands

103
Q

dogs

A

invest to revitalise or discontinue the product

104
Q

price

A

a key factor in any product decision
price will not only determine the demand for a product it will also determine the contribution of a product and the overall profit margin for the business

105
Q

what factors influence price

A

costs
the price elasticity of demand
competition
product life cycle
branding
other elements of the marketing mixc

106
Q

how does costs influence price

A

what profit margin is the business hoping to achieve

107
Q

how does price elasticity of demand influence price

A

the potential for a business to change the priceh

108
Q

how does competition influence price

A

the level of competition and the price set by the market

109
Q

how does the product life-cycle influence price

A

the stage of the life-cycle product is in

110
Q

how does branding influence price

A

the perceptions customers have of the brand and how much value they place on it

111
Q

how do other elements of the marketing mix influence price

A

the 7Ps must complement one another

112
Q

pricing strategies

A

dynamic pricing
penetration pricing
price skimming

113
Q

dynamic pricing

A

applied to products where price can fluctuate with the level of demand such as hotel rooms

114
Q

penetration pricing

A

applied to a new product attempting to enter the market
initial price is low in order to penetrate the market by undercutting competitors
over time price may increase as demand grows and reputation/popularity builds

115
Q

price skimming

A

used to capitalise on ‘first movers’ (people willing to pay a premium to be the first to own a product)
initial price is high so the profit in the market can be ‘skimmed’
suitable for established brands where anticiptaion for a new product is high
particularly effective in technology markets

116
Q

promotion

A

the key method a business will use to communicate with its customers and potential customers
succesfull promotion will create awareness, understanding and a desire for the product

116
Q

what influences promotion

A

the target audience
promotion budget
the message
technology
competition

117
Q

how does the target audience influence promotion

A

choosing the right method and channel to reach the right people
eg placing an advert in a magazine for a product that matches the demographic of the readership such as a new face cream in a fashion magazine aimedd at older women

118
Q

how does promotion budget influence promotion

A

the pomotion budget will determine which methods are available and the geographical reach of the campaign

119
Q

how does the message influence promotion

A

a public apology might be posted on a companys website but a sneak peak at a new product line might be shared via twitter
sponsoring a sporting event might encourage an association with healthy living

120
Q

how does technology influence promotion

A

can help a business narrow down its promotion so that it only reaches the right people
subsciption services also allow a business to target customers with personal messages and relevant information

121
Q

how does competition influence promotion

A

a business may use similar channels to its competitors in order to challenge their message or use strategies that allow it to stand out and be unique

122
Q

appropriateness of advertising

A

factors such as focus and reach are important when choosing the right medium for advertising
wide reach/narrow reach
unfocused/focused

123
Q

promotion methods

A

advertising
direct marketing
sales promotions
sponsorship
social media
public relations

124
Q

advertising

A

above the line (mass media) and below the line (small and focused promotion) techniques

125
Q

direct marketing

A

direct communication with the customer, often personal

126
Q

sales promotions

A

special offers to encourage saless

127
Q

sponsorship

A

paid association with a business or product

128
Q

social media

A

promotion through networks such as facebook and twitter

129
Q

public relations

A

media attention generated through a third party such as review from a blogger

130
Q

importance of branding- strong brands

A

adds value to the product
allows a premium price to be charged
builds trust
makes a product recognisable
product might become the natural choice for the novice customer
helps a business to position itself in the market relative to other competatitors
brands can be traded

131
Q

distribution

A

refers to how the product gets to the customer
many products use multi channel methods to reach the customer
the key is to make distribution easy and conveniant for the customer in order to maximise sales

132
Q

influences on distribution

A

control over promotion and pricing
expectations of customers
nature of the product
scope/scale

133
Q

how does control over promotion and pricing influence distribution

A

a business may opt to use its own website or retail chain if controlling these factors is important

134
Q

how does expectations of customers influence distribution

A

will customers expect to access the product via multi-channels or will one suffice

135
Q

how does the nature of the product influence on distribution

A

some products are not suitable for certain channels
eg it can be difficult and costly to ship plants, flowers and other delicate objects

136
Q

how does scope/scale influence distribution

A

a product sold internationally may require distribution through an extensive network of wholesalers agents and distribution companies
by contrast a local business may simply require one retail oytlet

137
Q

channels of distribution

A

scope/scale, control over promotion and pricing, expectations of customers, nature of the product will determine the mix of channels used to get the product from the business to the customer
many modern products use multiple channels such as direct, click and collect and instore purchasing
each stage in the distribution network adds to the cost snd/or adds value therefore increasing the price of the product

138
Q

the value of digital marketing and e-commerce

A

allows a small business to target a global market
builds relationships through a more personal service by tracking buying habits
targeting specific segments is much easier- even on an individual basis
opportunities for personalisation and involving customers in the design of products
allows businesses to gather customer information easily

139
Q
A

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