5. Marketing Flashcards
Consumer
Someone who uses goods and services produced by businesses
Sales volume
Measures the number of items sold
Sales value
Measures the revenue generated
Segmentation
Occurs when a market is divided into different groups of needs and wants
Benefits of segmentation
- develop its products to fit customer needs more closely
- target its customers more precisely
- set the price appropriately
Ways of segmenting a market
By gender, by age, by location, by income, by the stage someone has reached in their life cycle
Market research
The process of gathering, analysing and processing data relevant to marketing decisions
Market segment
A group of buyers with similar needs within the overall market
Types of data used in market research
Quantitative data and Qualitative data
Quantitative data
This involves the use of numbers such as the size of the market, the growth of the market or the number of customers a business has
Qualitative data
This involves views and opinions, but does not provide statistically reliable information. For example, by talking to a small group of customers you may get an insight into how they view the brand or how the product is viewed in relation to competitors
Market size
Can be measured by the value or the volume of sales. The volume of sales is the number of units sold.
Primary market research
Uses data gathered for the first time
Second market research
Uses data that has baeen gathered already
Marketing mix
Refers to all the activities influencing wether or not a customer buys a product. The elements of the mix can be analysed using the four Ps: price, place, product and promotion
The choice of marketing mix will depend on factors such as
The product, competitors’ products, the target customers and business approach
The elements of marketing mixing (4P’s)
Product, Promotion, Price, Place
Factors of a Product
The service, the performance of the product, the price, product development, product differentation
Product differentation
When a business wants to make their products stand out as different from the competition
Stages of new product development
Generate an idea, check the idea, develop the product, trial the product, launch it
Boston Matrix
A way of analysing a product’s share and growth in their market
Dog
Product has a low market share in a low-growth market
Four categories of products in the Boston Matrix
Dogs, cash cows, question markets, stars
Cash cow
Product has a high market share in a low-growth market
Question mark
Product has a low market share in a fast-growth market
Star
Product has a high market share in a fast-growth market
Product life cycle
Shows how the sales of a product may change over time
Stages of a product
Development, introduction, growth, maturity, decline
Extension strategies
Attemps to maintain the sales of a product and prevent it from entering the decline stage of the product life cycle
Price skimming
Setting a high price for a product when it first enters the market
Penetration pricing
Launching a new product at a low price to achieve fast sales
Competitive pricing
Matching the prices that competitors charge
Loss leader pricing
A product sold at a loss in the hope that the customer will buy other items from the business where they make a profit
Cost plus pricing
Where products are priced by covering the cost of it to the retailer and adding a percentage on top
Factors influencing the price of a product
Costs, demand, competitors’ pricing, stage in the product life cycle, strength of the brand, nature of the market and rest of the marketing mix, the business’s objectives and approach to pricing
Promotional activities
The different ways in which a firm tries to communicate with its customers
Types of promotional activity
Advertising, newspaper, online, on the radio, on television and in cinemas, on vehicles, sales promotions, discoungs, buy one get one, coupons
Sales promotion
Short-term incentives to encourage customers to buy
Advertising
Involves paid for communications
Promotional mix
The combination of promotional methods used by a business to communicate with its customers
Factors that influence how the promotional mix is used
Costs and finance, target market, competitors' actions, nature of the market, nature of the product
Reasons for promotion
To inform, to remind, to persuade
Distribution channel
Describes how the ownership of a product passes from the producer to the final customer
Wholesalers
break bulk; they buy in large quantities from a producer and sell to retailers
Retailers
The shops that sell direct to the customer
Direct marketing
When there is a direct link from the producer to the customer with no intermediaries
Intermediary
A link in the distribution chain between the producer and the customer
Physcological pricing
Seeting prices slightly lower than a whole number
Price discrimination
When a company charges different prices to different customers for the same goods or services
Premium pricing
A strategy where businesses price a product higher than the market average to strengthen quality and establish a luxury brand image
