3.5 Marketing Flashcards
1 What is an exchange process
When someone gives up something in return for something else
1 how do you identify a business opportunity
sell products means offering something that customers value and are willing to pay for
identify opportunities that exist and develop products according to people’s needs and wants
think about customer as well as consumer
1 how to satisfy customer needs
increase sales
select correct marketing mix
avoid costly mistakes
be competitive
1 what is the marketing mix
product
place
price
promotion
1 what is a customer
someone who buys a product or service
1 what is a consumer
someone who uses a product or service
1 what is a need
something needed to survive
1 what is a want
something to satisfy a need
2 what is market segmentation
occurs when a business divides a market into different groups of needs and wants
2 why do you segment a market
meets needs more efficiently
avoids waste
target the correct market for max sales
2 how do you segment a market
age
gender
income
ethnic, culture, religion
socio-economic
geographical area
2 what is the market growth equation
change in market size
——————————– x100
original market size
3 what is market research
the process of gathering and analysing and processing data relevant to marketing decisions
3 what is the role of market research
get info about the market that the business operates in
product - price and packaging
promotion - best advertising media
3 what are the uses of market research
assess the effectiveness of actions being taken
identify opportunities in markets
weigh up different possible actions
3 what are some methods of market research
printed press
magazines
info
surveys
questionnaires
customer feedback
telephone interviews
internet research
3 what is primary market research
examples?
first hand collected data, that does not previously exist
surveys
internet research
observations of customers
3 what is secondary market research
uses data that already exists
in form of government surveys or other information accessible online say
3 advantages of secondary market research
gathered cheaply and quickly
provide information on large sections of the population
3 disadvantages of secondary market research
existing data may not be exactly what the business wants
existing data may be out of date
3 what is test marketing
launching a product to a small amount of people in the target market to see how well it does
3 what is a consumer panel
a representative of people selected by a business to provide input for consumer research
3 what is qualitative data
data provided in descriptive form
peoples emotions and thoughts
why things happen
gathered through open questioning
not easily measurable or accurate
3 what is quantitative data
data in numerical form
gathered through surveys
easy to analyse and compare
not able to explain anomalies or changes
3 what is market mapping
considers the position of a business to other businesses using any two criteria
a diagram used to identify target customers and potential gaps in the market
shows possible positions for two key features
eg low to high price and quality
3 equation for value of sales
value no. of price
of = units x per
sales sold unit
3 what is market size
measured by value or volume of sales
volume = no of units sold
3 what is market growth equation
change in market size
——————————– x100
original market size
3 what is market share equation
sales of product
————————— x 100
total market sales
3 pros and cons of surveys?
pro;
convenient
see genuine reactions
con;
cants see body language
might not answer phones or doors
3 pros and cons of internet research
pro;
cheap and quick
achieved whenever
con;
may not target correct customers
may be out of date
4 what is the marketing mix
to meet customers needs a business must develop products to satisfy them, charge the right price, get the goods to the right place, and make the product know through promotion
it is a combination of product, price, place and promotion
4 what is a product
what is price
the features and appearances of goods and services
how much customers pay for a product
4 what is place
what is promotion
the point where products are made available to customers
how customers are made aware about products
4 how do you choose the best marketing mix
what factors does it depend on
all four aspects must work together effectively
the product
competitors products
target customers
business approach
4 what are the benefits for an entrepreneur
what are the risks for an entrepreneur
a unique product will make many sales and increase profit
people may not be interested so any invested money is lost
4 what are the factors when designing a product
reliability
quality
value for money
design
image
technology
packaging
status
4 what is e commerce
having a website that business can sell goods on
4 what is m commerce
using smartphones and mobile devices to sell goods
4 what is multi-channel
providing physical and online options to buy goods
4 benefits of e & m commerce
reduced costs as no need for expensive premises
larger number of customers
products are sold direct to customers
convenience for customer as can shop anytime anywhere
4 drawbacks of e & m commerce
small screen size can limit amount of info shared
initial costs of operating online can be high
greater competition at the same level online
comms and transport problems
customer accounts can be hacked and fraudulent
5 different factors about price
credit card instalments
cash
discounts with large quantities
price comparisons
value for money items
business costs
reduced pricing
5 price and demand
if a business has a strong brand and usp, fall in sales may be small if price increases
differentiation between products to make people less sensitive to press change
higher revenue with higher pricing
demand is proportional to price
5 price skimming
when a high price is set for when the product first enters the market
used with high demand
people are willing to pay high prices
business obtain money needed to pay development costs
price is lowered to attract new groups of people
works best if product is unique
5 price skimming drawback
product has to be unique if people are going to pay more
5 price penetration
launching a product with a low price to achieve high sales quickly
establish a product as market leader and earn market share
good if customers are price sensitive
budget airlines
producing on a large scale allows business to become known and benefit from lower supplier costs
5 price oenetration drawback
only works best if customers are very sensitive to price
5 competitive pricing
price match other businesses with the same products
used by supermarkets, insurance companies
big firms compete directly against each other
if products are similar price becomes a big factor
5 competitive pricing drawback
only useful when products are similar
when price becomes a factor that will influence the buyers decision
5 loss leader
sell a product at a loss so the customer will buy more products and create a profit
charge loss for a printer but alot for ink cartridges
advertisement in shop windows
5 loss leader drawback
can lead to losses for the business if higher priced items are not purchased alongside loss leader
5 cost plus pricing
ensures business cover their costs and make a profit
calculate the cost of providing the product and adding a percentage on to create a price
common for retailers
simple to apply
5 cost plus pricing drawback
doesn’t account for supply or demand in market or customer satisfaction
or what people are willing to pay for
5 what factors influence price
costs
demand
competitors pricing
stage in product life cycle
strength of brand
nature of market
5 what is cost
to make a profit the price needs to cover the costs
fixed costs
variable costs
5 what is demand
what people are willing to pay
high demand means higher prices
5 what is the nature of the market
prices will be competitive if there are many similar products in a market
offering a very different product allows more to change
5 what is business aims and objectives in pricing
may use price penetration to become known in a market
high price to promote high quality
5 what is position in product life cycle
price can be altered around the life cycle
in growth phase have high pricing
in decline stage have reduced pricing
5 what about price vs the rest of the marketing mix
high quality fashion will be sold expensively
low quality mass production will be sold more cheaply
5 what about competitors pricing
always try to stay within competitors range to not lose sales or market share
low priced competitors = low prices
high priced competitors = high prices
5 what stages are in a product life cycle
development
introduction
growth
maturity
decline
6 what is product
all factors relating to the design, the specifications and the features
Toyota known for reliability
Duracell known for long life batteries
businesses may alter products to appeal to customers
6 what is THE product
what customers actually buy
important in marketing mix
if wrong, it’s hard to imagine the market will be successful
customers interested in overall nature
6 what is the main features of a product
reliability
quality
value for money
design
image
technology
packaging
status
6 what is product development
the design
the price
the expected sales
cost of development and production
6 what is product differentiation
having a unique selling point
stand out form competition
build a brand image
6 benefits of product differentiation
attract more sales
charge a higher price
6 what are the stages of new product development
generate a new idea
check the idea
develop product
trial product
launch it
6 why might product development stop
it’s too expensive
too difficult
the risk is too high
6 how do you brand a product
different to competitors
easily recognised
higher prices
own brand
6 what is a product life cycle
shows the stages that products go through from development to withdrawal
6 whats on each axis
y= sales
x= time
6 what is the 6 stages
development
introduction
growth
maturity
decline
extension
6 what is development
product being developed and tested
money is spent
no sales
6 what is introduction
product is launched
sales are low
heavy advertising
expenditure on promotion and publicity
business tries to convince companies to sell products
6 what is growth
sales increase rapidly as demand grows
business may need to find more outlets for the product
6 what kind of variation is seen in a PLC
length of time from development to launch can change drastically
decline phase can be entered as soon as a few weeks later
some brands go through ups and downs with extensions
6 what changes in the PLC about the marketing mix
introduction - promotion is heavy
promotion then switches to product
high prices but go lower when decline
6 how do you extend a PLC
cut price
advertising
update packaging
add more features
new customers
6 what is a product portfolio
the products that company produce collectively
starter is only one or two products
develop more as a business grows
6 what is the boston matrix
a model looking at products in terms of their market share and growth
analysing a product portfolio
measures based on market growth and market share
6 high M growth high M share-1
high M growth low M share -2
low M growth high M share -3
low M growth low M share -4
- star
- problem child
- cash cow
- dog
6 what is a star
high growth and high market share
high revenue growth
keep improving and promoting stars
aim to turn into cash cows
6 what is a cash cow
high market share low growth
low costs
high revenue
heinz tomato ketchup
no advertising needed
6 what is a dog
low growth low market share
negative cash flow
large costs to keep going
not used to business
either get rid or improve
6 what is a problem child
low market share high growth
money to develop
negative cash flow
has potential
spend money promoting
6 why should you have a balanced portfolio
appropriate mix of different products
cash cows provide ongoing finance
high no of problem childs is a risk
6 what use is the boston matrix
analyse product portfolio visually
show what action to take
too many problem child = take action
too many cash cows/ no stars = invest in problem child with cash cow money
6 what drawback in the boston matrix
snapshot of current position
no environmental factors
flaws from assumptions
inadequate measurements
only show market share and growth
product life cycle varies
6 risk of developing a new product
cost of investment
inaccurate market research
too expensive
may never be launched = time and money wasted
6 benefits of developing new products
replace products coming to the end of their life
grow a larger product portfolio
sales increase for all products
reputation for launching new exciting products
7 what is promotion
communicating something about the product
highlighting a special offer, or USP
advertising in a newspaper
sponsorships (RedBull)
Cars advertise on radiostation
7 why do you promote
to inform
to persuade
to remind
7 why would you promote something
inform customers or remind them
increase sales
create a change in product image
show benefits of the product
7 what are some methods of promotion
advertising
sales promotion
public relation
sponsorships
social medias
personal selling
7 what is advertising
TV and cinema
vehicles
radio
online
printed
newspapers, billboards, magasines
7 what is sales promotion
short-term incentives to encourage customers to buy
buy one get one free
free samples
free gifts
discounts
competitions or coupons
7 what is other promotional methods
personal selling
sponsorships
public relations
social media
7 what is public relations
actions used by a business to arrange free media coverage of its activities
cannot control what’s being said by the media
7 what is personal selling
using a sales force to promote the products of a business
7 what is sponsorship
when a business uses its own money to support an event
commonly sports persons or sports events, arenas
7what is social media
when a business uses social media platforms like facebook, instagram, tiktok, snapchat, etc to promote and make the public aware of its business, products or services
7 what factors influence the promotional mix
target audience
finance
competitors actions
nature of the marketing mix
7 why does cost and finance affect the promotional mix
some forms of promotion cost more than others
advertising on TV is more expensive than in a newspaper
different businesses will chose different promotional methods based on the finance available
7 why does target market affect promotional mix
good form of communication if trying to talk to everyone
local radio is better for local businesses
7 why does competitors actions affect the promotion mix
pressure on businesses to respond to other actions
if they see a competitor has a successful campaign they may adopt similar actions
7 why is the nature of the market going to affect the promotion mix
size or market
market share
different promotional needs for different varieties of markets
7 why does the nature of the product affect the promotion mix
brand image and style may affect what you choose to use
two for one price offer works well with fast food
7 how do you select promotional styles
TV- sound, words, pictures
Poster- Words and Images
Printed advert- read several times
Radio Advert- only heard once, but played multiple times
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