4 - Marketing Flashcards
Marketing
The management process of identifying, anticipating and satisfying customer requirements
Market
A place where buyers and sellers come together
Market size
The total number of potential buyers of a product or service within a given market and the total revenue these sales may generate
Market growth
The increase or decrease in the size of the market of a product or service over time
Product orientation
Advantages and disadvantages
When companies prioritize research and development over market research. ( sole traders do this)
Advantages
- products are innovative and can apply for patents
- it’s a USP
- better quality product
- economies of scale
- investment in technology
Disadvantages
- branding is narrow
- expensive
- opportunities misses you
- little threat for competition
Market orientation
Companies adopt a market orientated approach and the needs of customers are put above everything else
Advantages
- repeat custom is likely
Disadvantages
- products are less unique
- more competition
Types of marketing
- Commercial marketing - seek to influence purchasing decisions
- Social marketing - seeks to influence behavior for the good of the community ( dumb ways to die reduced railways in Australia)
Market share
Calculation
The % of total sales revenue that a business had in a specific market
Formula:
Items sold / Items in market x 100
Product sales / maker share x 100
Market leader
A company with the largest market share in an industry
Advantages:
- brand and product recognition
- price leadership
- economies of scale
- easy access to channels of distribution
Marketing objectives
Is a goal that is set for part or the whole business, they should be SMART
Specific Measurable Agreed Realistic Time focused
Marketing objective for a profit organization
- custom loyalty
- growth targets
- market share
- sale targets
- brand recognition
- customer satisfaction
- product development
Objectives of nonprofit organizations
- political action
- fund raising
- improve awareness
- reduction in harmful products
The evolution of marketing
- innovation
- ethical considerations . Selling green products . Treating workers fairly . Ethical treatment of suppliers . Sourcing from ethical suppliers
- cultural differences
Marketing plan
A plan of action that details a company’s marketing strategies
- allows companies to develop a focused marketing strategy
Elements of a marketing plan
- market objective
- marketing budget
- segmentation of the target market
- market research
- market strategies
- control tools
Marketing cycle
An ongoing process by which plans are continuous IMG set and met in a marketing plan
The 4 P’s of the marketing mix
1) place
2) product
3) price
4) promotion
Segmentation
Invokes splitting population groups with similar needs / characteristics
Types of segmentation
- Geographical segmentation - diving customers based on their location
- Demographic segmentation - involves diving consumers according to characteristics (age, family)
- Psychographic segmentation - divides to population according to lifestyle and personal j treats
Target markets
Strategy where you segment the market and then chose the appropriate segments which the products will be offered to
Customer profile
A description of a consumer based on things they have in common
Technology adoption life cycles
- innovators
- early adopters
- early majority
- late majority
- laggards
Types of promotions
- Below the line promotion
- smaller, highly targeted campaigns
- personal selling
- direct mail
- sales promotion
- discount
- coupons
- Above the line promotion - larger, teachers large markets
- television
- radio
- internet
Niche marketing
A specific subsection of the market focused on providing a specific and specialized product or service
Mass marketing
Mass market products are undifferentiated. High quality of sales and have larger markets. Large competition can lead to price competition.
- Coca Cola
- dove soap
- toothpaste
Product positioning map / perception map
A visual representation of how the various competitors attempt to position their brands in the eyes of the consumer
Strategic group
Companies that are very similar and have the same customers
Unique selling point (USP)
Is a feature of a product that makes the products stand out from its competitors
Ways to differentiate a product so it has a USP
- Differentiation by product
- Differentiation by price
- Differentiation by promotion
- Differentiation by place
Time series
Statistics recorded over time
Trend
A pattern that’s happening over time
Calculating a 3 year moving average
“Calculate the tree year moving average for 2008”
Take the sales for 2008, the pervious one 2007 and the one next year 2009 and calculate the mean
Variation calculation
Variation = sales - 3 part moving average
3 types of variations:
1) seasonal variation - products that experience higher sales volume at certain parts of the year (Christmas toys)
2) Cyclical variation - sales affected by the economic cycle, such as the product life cycle.
3) random variation - these may occur at any time for any reason (natural disasters, sporting events)
Quarterly report
Report over a three month period
Calculate the 4 year moving average
If u want to find it for 2014, you take 2014 sales and the three previous years. Since it’s the total you just add them
Market research
Allows companies to get up to date information and relevant information on customers, competitors and other external stakeholders
Primary / field research
Examples
Leads to the creation of new information, focusing on a specific research question
- surveys
- interviews
- Focus groups
- observations
Focus groups
An interview conducted with a group on individuals, usually with similar characteristics
Secondary research
Examples
Uses information that is already available, also known as desk research
Examples
- market analysis
- academic journals
- Government publications
- media articles
Ethical considerations of market research
- leading questions - don’t influence sometimes answer
- Voluntary involvement - respondents don’t have to do it
- Venerable groups - extra careful
- Purpose of use - only used for what it’s said to be used for
- Reporting results - reported accurately
Quantitative
- details with numbers and statistics
- small amount of info from a lot of respondents
- multiple choice
Qualitative
- deals with words and meanings
- key question is why
- lengthy answers
Sampling
A sub group of the population that can be used to conduct research on rather than researching the entire population
Sampling methods
- Convenience sampling - using people that are easiest to obtain
- Random sampling - anyone had a chance of being selected
- Cluster sampling - population is broken into clusters
- Quota sampling - population is broken down then convenience sampling is used
- Stratified sampling - population broken into smaller groups then is selected randomly
- Snowballing - research involves interviewing people with specialized knowledge and skills
Results of data collection
- bar graph
- histogram
- line graph
- pictogram
- pie chart
- table
- scatter plot
Product life cycle
A model designed to help managers make strategic decisions concerning products marketing mix
1- research and development (flat)
2- introduction (slight rise)
3- growth (most rise)
4- maturity (curves off)
5- decline
Fad
Is a product tat is sold in high volumes for short period of time then quickly loses popularity
- angry birds
Extension strategies
Examples
A cost effective way of ensuring long term sales for a company
- new product
- product update
- new market
The Boston consulting group
A tool to help companies with multiple product decide their marketing strategies. The table is based on market share and market growth being low or high
- stars
- cash cows
- problem child
- dogs
Stars
- high market share, high market growth
Market leaders in a rapidly growing market l. Requires investment to maintain growth, focuses on attracting new customers.
Cash cow
- high market share, low market growth
Successful products in mature markets, high sales and established customer bases. High customer loyalty and less money needed for marketing
Problem child
- low market share and high market growth
- products launched in response to rapidly growing competitors
Dog
- low market share and low market growth
Product at the end of its life cycle
Brand
A name, symbol or design that is used to identify a product or company
Aspects of branding
- awareness
- development
- loyalty
- value
Packaging importance
- protect the product
- communicate information
- make product easy to use
- promote the product
Pricing strategies
1) skimming - initially high price than gradually lowers it
2) Penetration - offering a low price to attract new customers
3) cost plus (mark up) - selling price is determined by adding a specific mark up cost to it
4) Psychological - setting prices just lower than the whole number
5) Loss leader - a product sold at low prices so it’s at a loss to attract new customers
6) Price discrimination - When businesses change the price for different consumers for the same product
7) a dominant company sets prices which is followed by others
8) predatory pricing - low prices at set that competitors cannot compete and are force to leave the market
Promotional mix
A combination of different kinds of promotional tools used by a firm to advertise and sell its products
Guerrilla marketing
Unconventional methods used in order to boost sales or attract new customers for the brand
- sushi tire over on a suchi delivery van
The impact of technology on promotional strategies
- loyalty cards
- advertising online
- direct marketing
- virtual marketing
- social media marketing
- social networking
Virtual marketing
Occurs when a advertising message is self replicated like a virus
Distribution
How products travel from producers to consumers
Wholesalers
A company who have large stock of producer goods, storing it in large quantities and sell them to resalers at low prices
Retailers
Purchase good from wholesalers and producers and sells them to final consumers
Distribution channels
The oath the product takes when it travels from product to final customer
Forms of distributions
1) Direct distribution ( producer to consumer)
- no intermediates
- no commission
- control their prices
- Indirect distribution ( producer - retailer - consumer)
- Indirect distributions ( producer - retailer - retailer - consumer)
- Agents are added after producer
Agents
May be used to aid any distribution channels above. Agent promotes product but doe not own it
Broker
Similar to agents and usually use their expertise to find suitable customers for various products
The extended marketing mix
- people
- process
- physical evidence
- place
- promotion
- product
- price
Methods of entry into international markets
- exporting
- agents
- franchising
- strategic alliances
- joint ventures
- direct investment
-> in order of easy to hard
Advantages and disadvantages of international markets
Advantages:
- larger target market
- economies of scale
- access to global markets
- spreading risk
- brand reputation increases
- rapid growth
Disadvantages
- economic differences
- social and cultural differences
International marketing strategies
- Pan global strategy - a single brand image is represented like luxury brands. Products are not tailored to meet customers
- Global localization - goods and services are used to need local demands (fast food)
E commerce
Is the buying and selling goods online
The difference between the following types of e-commerce
1) Business to Business
2) Business to consumer
3) Consumer to Consumer
