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A-level Business > 3.3 Marketing Performance > Flashcards

3.3 Marketing Performance Flashcards

1
Q

Why are marketing objectives important?

A

They need to support the overall objectives of the business

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2
Q

What 3 internal factors influence a marketing objective?

A

Corporate objectives
- in-line with company’s overall goals

Finance
- they allocate the budget

HR
- identify how many staff are needed

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3
Q

What are the 4 external factors which could influence a business marketing objective?

A

Market
- state of the economy

Technology
- tech changes + new tech

Competitions
- what are competitors doing? E.g. low prices

Ethics and environmental factors
- issues with animal testing and packaging can damage reputations

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4
Q

How can government regulations impact marketing objectives?

A
  • predatory pricing
  • trade description
  • what can abs can’t be advertised (including certain times of day)
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5
Q

What 5 sectors can a market be classified as?

A
  • geography
  • nature of the product
  • seasonality
  • development level
  • product destination
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6
Q

What do company’s carry out analysis on when researching?

A
  • sales growth
  • market growth
  • market share
  • market mapping
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7
Q

How do you calculate market growth?

A

Market growth = new market size - old market size / old market size X100

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8
Q

What is market mapping?

Give an example of what there could be a gap for

A

Identifies gaps in the market

High price, low quality
High price, high quality
Low price, high quality
Low priced low quality

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9
Q

Why do companies conduct market research?

A
  • spots opportunities
  • helps decide what to do next
  • supports if current plans are working
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10
Q

What are 2 disadvantages to bad market research

A
  • is expensive, so don’t want to waste money

- can lead to disastrous business decisions

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11
Q

What does a business look to gain from market research?

A
  • more detailed understanding of customer needs
  • reduce the risk of product/business failure
  • forecast future trends
  • see what the market / competition is doing
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12
Q

What is quantitative research?

A
  • concerned with data
  • based on larger samples and are therefore more statistically valid
  • main methods include surveys, this could be via telephone, postal, face to face
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13
Q

What is qualitative research?

A

Based on opinions, attitudes and beliefs

- aims to understand why customers want/need/behave in a certain way

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14
Q

What is primary data?

A

When a business gathers new data (or employs someone new to do it)

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15
Q

Give a positive and a negative for primary data

A

+ the business control what type of data they want, business specific

  • time consuming, can be expensive if someone is hired to conduct it
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16
Q

What is secondary data?

A

Analysing data that has already been collected

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17
Q

Give a positive and a negative for secondary data

A

+ already available, cheaper

  • can be outdated, not always business specific
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18
Q

What is sampling?

A

A sample is a group of people that have been chosen from a larger group, the population, for investigation

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19
Q

Give a positive and a negative for sampling

A

+ Better chance of being accurate

  • Not always 100% representative, always a margin for error
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20
Q

Why do businesses use sampling?

A

Allows a business to gain insight into the wants and needs of the customer in a cost-effective manner

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21
Q

What is ‘the quality of sampling’?

A
  • how many people you ask (sample size)
  • how the sample has been carried out
  • the sample technique used
  • the importance of accuracy
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22
Q

What influences the size of the sample?

A
  • the budget available

- degree of confidence in results

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23
Q

What are the three types of sampling?

A
  • Random
  • Quota
  • Stratified
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24
Q

What is random sampling?

A

Names picked randomly from a list

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25
Q

What is quota sampling?

A

People are picked who fit the category

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26
Q

What is stratified sampling?

A

The population is the first segmented into subgroups before respondents are randomly selected from within that subgroup

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27
Q

What are the advantages and dis for random sampling?

A

Advantages:

  • wider range of people
  • quick way to survey
  • may possibly get more responses

Disadvantages:

  • could result in a poor outcome
  • might not be in a specific age range for product/service
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28
Q

Give an advantage and disadvantages for quota sampling

A

Advantage:
- these people fit directly into the category

Disadvantages:

  • have more ‘valid’ opinions
  • smaller amount of people to survey
  • may not respond
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29
Q

Give some advantages and disadvantages for stratified sampling

A

Advantages:

  • detailed
  • more reliable

Disadvantages:

  • gives an average
  • gives a smaller amount of respondents
  • more planning is needed
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30
Q

What are the 3 aspects of ‘non bias’ research?

A
  • no leading questions
  • more confidence with sample by baling a larger representative
  • no intimidating tactics during interviews or focus groups
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31
Q

What is market research?

A

Research on the market AS A WHOLE

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32
Q

Give some examples of what is included in market research

A
  • how big is the market?
  • how fast is the market growing?
  • key factors (PEST) driving market change
  • competition / market share info
  • how the market is segment
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33
Q

What are the 4P’s when looking into mistimed preferences for market research?

A
  • when abs where they will but the product
  • what prices they pay/are willing to pay
  • ow they react to promotions / advertising
  • new channels they might like
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34
Q

Define correlation

A

Looks at the strength of a relationship between two variables

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35
Q

Why and how would a business use sales forecasting?

A
  • useful to be able to see if something is working

E.g advertising compared to the number of customers

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36
Q

What is the independent variable?

CHIMED

On what axis?

A

The change

X axis

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37
Q

What is the dependant variable?

CHIMED

On what axis?

A

The thing that stays the same

Y axis

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38
Q

Describe a positive correlation?

A

When the line of best fit is going from the bottom left to the top right as well as the scattered points

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39
Q

Describe negative correlation

A

When the line of best fit is going from the top left to the bottom right as well as the scattered points

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40
Q

Describe no correlation

A

No discernible relationship between the independent and dependent variable

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41
Q

What is ‘strong correlation?’

A

Mean that there is a little room between the data points and the line

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42
Q

What is weak correlation?

A

Mean that the data points are spread quite wide and far away from the line of best fit

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43
Q

Define time series analysis

A

A method of interpreting marketing data - looks at data over time

It reveals underlying patterns over the year

44
Q

What is an upward trend?

A

Variable (sales) changing upwards

45
Q

What is a downward trend?

A

Variable (sales) changing downward

46
Q

What is a constant trend?

A

Variable (sales) constant

47
Q

What are seasonal fluctuations?

A

Change depending on the time of year

E.g. ice creams go up in summer

48
Q

What are seasonal fluctuations with an upward trend?

A

Go up and down but mainly remains positive

49
Q

What is random fluctuations?

A

Variable (sales) constantly changing

50
Q

What is time series analysis used for?

A
  • analyse information over a period of time
  • predictions for the future
  • links between sales and marketing activities
  • see if marketing has been affected
51
Q

What is extrapolation?

A
  • using past data to extend an identified trend into the future
  • a general slow upward trend has been identified
52
Q

What is the value of technology?

A
  • gather and analyse large volumes of data quickly and accurately
  • track and interpret consumer spending habits
  • collect customer opinions
  • encourage consumer feedback through social media and review sites
  • enable two way communication
53
Q

What are confidence intervals?

A

A range of values that you are fairly sure the value of the population will lie within

Reflect the degree of certainty with which a business believes a stated outcome will happen

54
Q

Give 4 different ways technology can be used to gather information about customers

A
  • loyalty cards
  • social networking sites
  • search engines
  • wifi signals
55
Q

What are some advantages for a business using technology?

A
  • quicker more efficient
  • can hold more data
  • can organise the data
  • more reliable
  • once staff have been trained, can improve productivity
56
Q

Give some disadvantages for the use of technology in a business

A
  • fixed higher cost to begin with
  • need to train staff
  • updating software can take time
  • not all computers can cope with the software
57
Q

What is price elasticity of demand?

A

A measure of how responsiveness demand is to a change in price

As price goes up, demand goes down
As demand goes up, price goes down

58
Q

Whether a product is elastic or inelastic will depend on what?

A
  • type of product
  • availability
  • substitute products
  • choice
59
Q

What is price elastic demand?

A

Change in price will lead to a more than proportional chance in demand

Sensitive to price changes

60
Q

What is price inelastic demand?

A

Means that a change in price will lead to less than proportional change in demand

Demand is not so sensitive to change in price

61
Q

What is the price elasticity of demand formula?

A 
%change in quantity demanded 
 •
—
 •
%change in price
62
Q

A business always assumes their price elasticity of demand is …

A

Negative

63
Q

If price elasticity of demand is between 0 and -1 then demand is…

A

Elastic

64
Q

If price elasticity of demand is lesser than -1 then demand is…

A

Price elastic

65
Q

What is income elasticity of demand? (YED)

A

Measures the extent to which the quantity of a product demanded is affected by the change in income

66
Q

What is the formula for income elasticity of demand?

A 
%change in quantity demand 
 •
—
 •
%change in income

But at a slow rate

67
Q

What is ‘luxury’ when looking at income elasticity?

A
  • income elasticity is more than 1

- as income grows, proportionally more is spent on luxuries

68
Q

What is a ‘necessity’ when looking at income elasticity?

A
  • income elasticity less than 1 but more than 0

- as income grows, proportionally less is spent on necessities

69
Q

What are inferior goods?

A

Cheaper value products (own brand)

Have a negative elasticity of demand

70
Q

What is segmentation of a market?

A

Divides a market into a group of buyers

71
Q

Name 4 methods use to segment the market

A
  • demographic (age, gender, family size)
  • geographic (location)
  • income (income of customers)
  • behaviour (lifestyle, amount of use)
72
Q

Why do businesses segment the market?

A
  • identify new products
  • can identify new customers
  • can clearly advertise a product/service to someone in a specific group
  • don’t waste resources
73
Q

Why do some businesses ignore the needs of POTENTIAL customers?

A

It can be difficult to break the market into obvious segments and find ways to market to specific demographics

74
Q

What is concentrated marketing?

A
  • involves targeting one or two segments
  • segment must be big enough for a decent return, have growth potential
  • should have a need that the business can meet that hasn’t been met by competitors
75
Q

What is differentiated marketing?

A

Where several segments are targeted and the product and marketing mid is adapted to appeal to each segment

Only really feasible for large companies with large budgets

76
Q

What is undifferentiated marketing?

A
  • segments are ignored and the company tried to reach the entire market with a single product and marketing mix
  • makes sense for widely used products (e.g. toothpaste)
  • advantages of potentially high sales volumes and relatively low marketing costs
77
Q

What is mass targeting?

A
  • products focused at large numbers
  • usually big companies
  • congested markets
78
Q

What is niche targeting?

A
  • focuses on small markets
  • allows a business to still make a profit, could be limited
  • a small manufacturer can meet the demand of a niche business but not necessarily a mass business
79
Q

What is positioning?

A
  • creating an image of the brand in mind of the target customer, allows them to develop an opinion
  • customers mental map, products positioned next to competitors
80
Q

Give three influences on positioning

A
  • state of the market
  • company’s current products
  • attributes of the company
81
Q

Describe a ‘product’ in the marketing mix

A
  • should fit the needs and wants of customers
  • consumers should get what they expect
  • service also fits in this
82
Q

Describe ‘price’ in the marketing mix

A
  • refers to how much the product / service costs
  • the product must represent good value
  • the price needs to be worth the product
83
Q

Describe ‘promotion’ in the marketing mix

A
  • how the product is communicated to consumers
  • methods include: advertising, PR, social media, personal selling, promotion and more
  • must target the correct audience, appeal to them, pull on their emotions
84
Q

Describe ‘place’ in the marketing mix

A
  • where the product is available
  • needs to be accessible
  • could be E-commerce, high street, social media
85
Q

Describe ‘people’ in the marketing mix

A
  • having the right people working and creating / delivering your product and services
  • staff must be trained correctly
  • includes all job roles
86
Q

Describe process in the marketing mix

A
  • the systems processes that deliver a product to a customer
  • this can cause a customer to buy or not from a business
  • includes: pay systems, distribution systems, ordering process
87
Q

Describe ‘physical evidence’ in the marketing mix

A
  • the elements of the physical environment the customer experiences
  • the space, the decoration, the environment is included
  • the service provided should also have physical evidence e.g. receipts
88
Q

Give 5 factors which could influence that integrated marketing mix?

A
  • competitors
  • when a company wants to position a product in the mines or consumers
  • target market (wealthy customers are less price sensitive)
  • product life cycle
  • type of product (promotion and physical environment)
89
Q

What is the Boston matrix?

A
  • One technique used to analyse a business’ product portfolio is the Boston Matrix
  • Considers each product within the portfolio in relation to its market share and the rate of market growth
90
Q

What are the 4 quadrants?

A
  • high market share + low market growth
  • high market share + high market growth
  • low market share + low market growth
  • low market share + high market growth
91
Q

What are the four segments in the Boston matrix?

A

Rising star Question mark

Cash Cow Dog

92
Q

What are cash cow?

A

High market share in a low market growth

  • these are established products
  • profits made from these can help finance other products
  • firms want as many as possible
  • low market growth - less likely for more competition - spend less on advertising
93
Q

What are rising stars?

A

High market share in a high growth market

  • increasing sales revenue
  • because the market is growing, other firms are entering the market with similar products
  • there will be competition
  • heavy promotional spending
  • cash flow can be negative at first
  • hoped that a star can become a cash cow
94
Q

What is a question mark?

A

Low market share in a high market growth

  • with growth in the market it can be successful if demand is high
  • some are unsuccessful so need to decide if it should be discontinued
  • requires lots of attention, mainly marketing
  • costs money to achieve potential
95
Q

What are dogs?

A

Low market share in a low market growth

  • unlikely to be kept on by a company
  • little growth in the market and little market share the company might settle for for future profits
  • not very concentrated on
96
Q

What is the product life cycle?

A

Plots the sales of a product through five stages of its life

97
Q

What are the 5 stages in the product life cycle?

A 
Development
Introduction 
Growth
Maturity
Decline
98
Q

Describe the first stage of the product life cycle

A

Development - developing product ready for release

99
Q

Describe the second stage of the product life cycle

A

Introduction - product is launched / released onto the market. Sales are low

100
Q

Describe the third stage of the product life cycle

A

Growth - sales (hopefully) increase sharply and the product moves towards profit

101
Q

Describe the fourth stage of the product life cycle

A

Maturity - sales grow less quickly but (hopefully) the product develops customer loyalty and repeat customers / profits should be high at this stage but may have competition

102
Q

Describe the fifth stage of the product life cycle

A

Decline - sales start to fall and the product may be going out of fashion. Evening it may be withdrawn

103
Q

Name fifth reasons why a products life can be extended

A
  • advertising
  • price reduction
  • adding value
  • explore new markets
  • new packaging
104
Q

Why can’t businesses always stop the decline in products?

A
  • products / services become obsolete
  • changing in consumer tastes or buying behaviour
  • poor marketing
105
Q

What are the strategies for stage one of the PLC

A
  • market mapping ( look for gaps )
  • market research
  • use retained profits
  • often complex
  • absorbs significant resources
  • no sales to cover high costs
  • high rate of failure
106
Q

Give three reasons as to why a product doesn’t always launch

A
  • inadequate demand
  • action of competitors
  • change in external environment
  • production problems
  • high cost
107
Q

What are the strategies for phase 2 of the PLC?

A
  • evaluation
  • market research
  • potentially limited competition
  • promotion (high spending)
  • pricing strategies
  • encourage customer adaption
  • low level of sales
  • low capacity utilisation
  • high unit costs
  • usually negative cash flow
  • heavy production

A-level Business (4 decks)

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