AOS2: Marketing a Business Flashcards
Marketing
The process that provides the link between the producers and the consumers
Marketing Concept
Where the business focuses on satisfying the needs of the consumer rather than just selling a product
Market-oriented Approach
Where the business simultaneously achieves its business objectives and satisfying customers
Pareto Principle
Idea that approximately 80 per cent a business’ revenue is generated by approximately 20 per cent of their customer base.
Internal environmental factors that affect the establishment of a customer base
Culture of business, owners and managers, Employees
Macro environmental factors that affect the establishment of a customer base
Economic factors, technological developments, legislation and regulation,
Operating environmental factors that affect the establishment of a customer base
Customers (Loyalty, respect to customers) Competitors
Market Research
Systematic procedure used to develop and analyze new and existing information.
What does market research assist a business to do?
Reduce the risk or uncertainty attached to introducing a new product, assess current products, and determine whether changes need to be made, predict future changes or trends
Exploratory Research
type of research design that involves collecting information in an unstructured and informal manner, such as reading an article.
Descriptive research
Type of research design that incorporates such things as consumers’ attitudes, intentions and behaviour.
Causal Research
Aims to find the cause and effect of certain actions.
Primary Data
Refers to information gathered by the business owners themselves
Secondary Data
Refers to information previously collected
Examples of primary data sources
Surveys/Questionnaires, Interviews, Direct Observation, Focus Groups
Examples of secondary data sources
Company records, financial statements, annual reports, libraries, newspapers, magazines
Best method to gather quantitative research
Questionnaire
Best Method to gather qualitative research
Focus Groups
Market
Comprises customers and potential customers with similar needs and desires who may purchase a product or service through the exchange of money
Mass Marketing
When a business markets its product or service to an entire market
Niche Market
Subset of a larger market with its own needs and preferences
Market Segment
Relatively similar group of customers who are likely to respond in similar ways
Market Positioning
Where a product is placed within a market with regards to its image, price and age of the target market
Market Segmentation
Defines and subdivides a large generic market into distinct subsections of potential customers who have similar specific needs and wants
Marketing Mix
Seven variables that are used when undertaking marketing strategies: product, price, place, promotion, people, physical evidence and process
Forms of segmentation and their variables
Geographic- region, size of city, suburban or rural
Demographic- age, gender, income level, education
Psychographic- Social class, personality, lifestyle
Behavioral- Needs, kind of shopping
Target Market
Group of customers the business actually wants to sell its products to
Generic Market
Broadly similar needs of customers are met by sellers offering a variety and often diverse range of products; e.g. the entire drinks market
Product market
When a consumer is looking for a particular item; e.g. a particular type of drink
Examples of trends and behaviors due to COVID-19
Increased online transactions and usage of technology, shift to the suburbs, change in purchases
Factors influencing consumer behavior
Cultural, social, personal, psychological, situational
Product
Anything that can be offered to a market to satisfy a need or want
Consumer profile
Statistical picture of the typical consumer of a product based on demographic data
Stages of Product Development
Idea Development, Idea Screening, Idea Evaluation, Developing the product, Commercialization of the product
Product Mix
Full set of all products being sold by a business
Product Line
Broad group of products intended for basically similar uses and have reasonability similar characteristics
Brand
Distinguishing name, symbol or design used to identify one manufacturer’s product and differentiate it from another product.
Price
Amount of money paid by customers for a product
Penetration pricing
where the price is set lower than that of competitors, to get customers to try the product and then remain with the company.
Skimming pricing
Used for products that are of high quality and have an ‘image’ attached to them
Loss Leader
Price on a product is set low in order to attract customers to buy other products in the range that are more expensive
Psychological pricing
Strategy where the price is set in accordance with the value consumers place on the product
Complementary Pricing
Where the price is set low on one item and high on another item that would normally go together
Place
involves making decisions to ensure that the right quantity of a product is in the right location, at the right time.
Direct distribution channel
Where the manufacturer sells their product directly to the customer
Indirect Distribution Channel
Involves the use of a retail outlet, where products are stored and displayed.
Advantages of direct distribution
Cuts out retail profit margin, pricing are under control of producer
Disadvantages of direct distribution
Producer needs to warehouse the stock, not on display
Advantages of indirect distribution
Cost of holding stock passed on
Disadvantages of indirect distribution
Profit is shared with retailer, out of control of the manufacturer.
Promotion
Involves the business communicating with its actual or potential customers by informing them about the business’s products or services
People
Staff must be appropriately trained and motivated, have the right attitude and be suited to their role
Examples of physical evidence
Evidence showing a service was performed, the physical environment it was performed and the signs and symbols of the business
Product life cycle: Introduction
Lauch of the product, sales at this stage are low, profits are non-existent and competition is scarce.
Product Life Cycle- Growth
Sales will be growing fast, with profits rising then flattening out.
Product Life Cycle: Maturity
Level of sales has stabilized. Demand has been satisfied and the product doesn’t yet need to be replaced.
Product Life Cycle: Decline
The product should be withdrawn from the market, or exported.
Customer Relationship Marketing
Uses marketing strategies to develop relationships with clients, gain customer loyalty and bring value to the brand
Examples of Customer Relations Strategies
Providing quality customer service and establishing customer loyalty programs
Examples of technological developments in marketing
Social media, Email marketing, Search engine optimization, AI, Data analytics, management of data
Public relations
Practice of promoting goodwill among the public to present a favorable image
Planned public relations strategy
Strategies established ahead of time, setting out a series of steps to be undertaken
What should a well-planned public relations campaign achieve?
Increased customer base, increased demand for products, gain a competitive edge, enhancing credibility, creating goodwill within the community
Examples of strategies used for planned public relations
Free publicity, develop relationships with the community, public information, media releases, social media, sponsors
Crisis public relations
When a crisis has arisen that a business has to respond to and manage their brand
Green marketing
Marketing of products that are presumed to be environmentally preferable to others
How can businesses gain green marketing opportunities?
Using recycled products, using green energy, decreasing level of waste
