3.5 - Marketing Flashcards
What is marketing?
Marketing is a specific process that focuses on meeting the needs and wants of the customer profitably
What are the four ways that marketing can be split into?
Research
Segmentation
Development of a product
Marketing mix
What must someone do to become successful?
- Understand the needs and wants of the customer
- Identify gaps in the market
- Do this before or better than competitors
What is segmentation?
It groups customers into subsections of the market with similar characteristics
Methods of segmentation
Age
Gender
Income
Location
What is market research?
The gathering, analysing and processing data to find out the needs and wants of potential customers
Benefits of market research
- Enables the business to understand the market and know who to target
- Reduces risk of failure
- Reduces waste of resources
What are the two types of market research?
Primary
Secondary
What is primary research?
This is when the business collects original, first hand information
What is secondary research?
This is where the business collects information that already exists e.g through the internet
What is the product life cycle?
A model showing the lifespan of a product’s sales from launch to being taken off the market
What are the steps of a product life cycle?
1) R&D
2) Launch/introduction
3) Growth
4) Maturity/saturation
5) Decline
6) Maybe extension strategy
What is the R&D stage?
Research and development is the stage before a product has actually been made
What is the introduction/launch stage?
The introduction is the stage where a business introduces or launches the new product (or service) to the market
What is the growth stage?
Successful products often undergo a period of growth as more and more customers discover and buy the product
What is the maturity stage?
At this stage, the number of new customers buying the product has slowed down and the market for the product can be considered mature
What is the saturation stage?
At this stage, the sales of the product have reached its peak and no longer increase but remain steady
What is the decline stage?
Changes in fashion, consumer tastes, technological advances and new competition offering similar products can all mean that the demand for a product begins to fall
What is an extension strategy?
Ways in which a business modifies a product to appeal to more customers and maintain sales in maturity
What are four extension strategies?
- Changing the target market
- Advertising
- Update packaging or rebranding
- Adding more features
What is a product portfolio?
A product portfolio is the range of products that a business sells
In the Boston Matrix, what does a rising star represent?
Stars are products (or services) in a portfolio that have a high market share in a fast growing market
In the Boston Matrix, what does the problem child represent?
Problem children are products (or services) with a low market share in a fast growing market
In the Boston Matrix, what does the cash cow represent?
Cash Cows are products (or services) with a high market share in a slow growing market
In the Boston Matrix, what does the dog represent?
Dogs are products (or services) with a low market share in a slow growing market
What is price?
The amount charged to a customer for a good or service
What is meant by channel of distribution?
How the ownership of a product passes from the producer to the final customer
What is the traditional method of distribution?
Producer —> Wholesaler —> Retailer —> Customer
What is the modern method of distribution?
Producer —> Retailer —> Customer
What is the direct method of distribution?
Producer —> Customer
What is promotion?
The different ways in which a business tries to communicate with its customers
Promotional methods
- Social media
- Sales promotion
- Product placement
- Sponsorship
- Advertising
- Public Relations
What is sales promotion?
Activity to increase sales of a product or service
Methods of sales promotion
- Samples
- Discounts
- BOGOF
- Free gift
- Coupons
What are the different types of advertising?
- Newspaper
- Magazines
- Television
- Internet
- Billboards
What is public relations?
Public relations (PR) is all about a business’ reputation. PR involves maintaining a good public image
What is sponsorships?
Sponsorship involves paying athletes, celebrities or other organisations for them to advertise for a business
Why do firms use social media?
Firms can use social media for paid advertisements as well as for creating their own pages through which to share content. This is beneficial because it is an easy and relatively cheap way for businesses to promote their products
What is product placement?
Products can be clearly featured (shown) in commercial TV programmes
Reasons for promotion
- Persuade customers
- Create or increase sales
- Remind customer of product
- Raise awareness
Importance of quality
- Uphold reputation
- Reinforce brand image
- Retain customer loyalty
- Premium pricing
