AS2 TP2 and TP3 Flashcards
what is market research?
involves gathering info about customer attitudes, behaviours and wants in relation to products
what is the purpose of market research?
describe the market - explore trends
explain the market - why market has fallen
predict change - how customers will respond to rise in price
what is qualitative data
non-numerical data finds out opinions and why people are interested gathered from open ended questions can be difficult to measure results
what is quantitative data
numerical data, presents factual info questions are structured
what is primary research?
finding out info brand new first hand info for firms own specific needs
advantages of primary research
original info collected, up to date completely relevant to business
disadvantages of primary research
bias may occur costly (hire analysts) time consuming to create questionnaires
what is secondary research
involves using data that has already been collected by another organisation for a different purpose (existing info)
advantages of secondary research
easy to access and check accuracy, relatively low cost quicker to complete
disadvantages of secondary research
not directly relevant to firm data can be outdated aswell as biased
advantages of questionnaires
quick and convent easy to interpret
disadvantages of questionnaires
in depth opinions not given, response may not be accurate
what is a consumer panel?
group of experts chosen to answer a series of questions about a product
advantages of a consumer panel
low costs
high response rate
current up to date
disadvantages of consumer panel
bias
distorted results
may not be representative
advantages of interviews
face 2 face so learn more about person
can see attitudes and communication skills
disadvantages of interviews
time consuming and costly
not easy to analyse
what are focus groups
structured discussion of pps and comments are recorded by researcher given product for a trial period to see how it goes over time
advantages of focus groups
allows for discussion detailed answers qualitative data
disadvantages of focus groups
small scale so not representative
could be very biased
advantages of face to face surveys
questions can be explained, low refusal rate
disadvantages of face to face surveys
expensive to generate questions
can be made bias
advantages of store loyalty cards
easy to run, firm can build up customer profile
disadvantages of store loyalty cards
expensive to set up and run, concerns about how info is used and who can access it
what is sampling
choosing a percentage of target market to carry out research on
advantages of sampling
provides insight into behaviour of target market
can prevent errors being made
can be used flexibly - adopted to suit different needs
disadvantages of sampling
may be unrepresentative
may be bias in questions
opinions gathered may be outdated
what is random sampling
every member of population has equal chance of being interviewed
advantages of random sampling
simple to design and interpret
allows firms to accurately estimate size of a potential sampling error
act used to help with the selection
disadvantages of random sampling
may be slow
collecting data is time consuming and costly
firm may spend too much time on deciding what list to pick sample from
what is stratified sampling
used when a selection is required from a number of sub groups selected randomly from a list but within sub groups like age, gender
advantages of stratified sampling
should be less biased and more accurate
disadvantages of stratified sampling
time consuming and costly
what is a cluster sample?
selection of sub-groups made within an unknown population used when difficult to gather info of entire population
advantages of cluster sampling
cheaper and faster
info gained from range of different areas
larger sample size
disadvantage of cluster sampling
each cluster may be different size affecting reliability of results
sometimes results can’t be generalised to other sub groups
what is a quota sampling
population is segmented into a number of groups which share specific characteristics
advantages quota sampling
results are more suited to firms needs as those chosen are specific
sample should be representative
easier and cheaper to conduct
disadvantages of quota sampling
bias - not based on laws of probability
samples may be tempted to cut corners to speed up process
can be expensive as may have to employ specialists to carry out sample
MARKETING MIX ONWARDS
what is marketing?
process which identifies anticipates and satisfies customers requirements of profits
what are the 7 p’s in the marketing mix
profit, place, price promotion, people, process psychical environment
what is the product
refers to the object that the business provides to consumers, it must be right for target audience and have features customers expect
what is product branding.
the unique name, logo designed to the business’ product
aim is to differentiate from competitors products through use of a USP
what factors need to be considered in the product design
functionality - extent product is effective in its use
aesthetically pleasing - attributes that differentiate their product from competitors regarding looks
cost - costs of designing and producing the product
ethical - emphasise the business acts in a ethical manner throughout production
what factors affect the pricing strategy decision
production costs
brand reputation
competition pricing
what is price skimming
business adopts when dropping new product, the price is set high initially then reduces in price in order to cover cost of production quickly
advantages of price skimming
helps firm recover quicker from R&D
high profit margins available
strategy works efficiently if target audience is quality conscious over price conscious
disadvantage of price skimming
can backfire if competitors release similar product at lower price
if company has history of price skimming consumers may wait fro price to drop
what is value based strategy
practise of setting price of product as its perceived value to customer
advantages of value based strategy
increases profit - method results in highest possible price being charged
customer loyalty - despite the high prices charged if the product provided justifies the high price
disadvantages of value based strategy
niche market - method only acceptable to small no. customers
competition - allows a great deal of room for competitors to offer lower prices and take away business’ market share
labour costs - assuming service is provided likely offering such a high end skill set that the employees needed will be expensive to train
what is penetration pricing
initially sets low price for its products and then gradually increases the price once good customer base is developed
advantages of penetration pricing
creates customer base quickly
helps a firm capture market share from its competitors as this strategy sets low initial price
improves overall efficiency as workers are aware the price will be low so they work to keep production costs down
disadvantages of penetration pricing
firm is sacrificing the point in initial phase when its new and excitement
not ideal for products technologically driven as new tech comes out too often
penetration may not create loyal customer base and only attract customers looking for a profitable deal
what is cost plus strategy
refers to that pricing strategy under which the company adds all costs which have gone into a product like raw materials
advantages of cost plus strategy
company knows exact amount of expenditure that occurred during production so can add profit margin accordingly
simplest method to decide the price because one has just to add up all the costs and then add he profit margin
disadvantage of cost plus strategy
doesn’t take into account future demand for product
doesn’t account for competitor actions and its affect on pricing
can result in company overestimating the price of a product as there could be some bias in deciding profit margin
what factors should be considered when adapting a pricing strategy
price elasticity of demand, price change may change demand
product life cycle skimming strategy may be effective in early stage
brand strength - if business is well established product they can charge higher
what is promotion
refers to activities a business undertakes to ensure both potential and current customers are aware of products
what are the 3 methods of promotion
advertising, special offers and joint ventures
what is advertising
paid form of non personal media intended to persuade and inform
advantages of advertising using television
wide audience, can adapt to suit audience e.g time shown
disadvantage of advertising using television
very expensive, too many channels
advantages of advertising using internet
worldwide potential, can contain a lot of info
disadvantage of advertising using internet
pop ups are irritating
explain how products are advertised using special offers
product or service is offered at reduced price e.g. buy one get one free
can be used to clear stock
advantages of using special offers as advertising
can generate sales and increase profits
can be effective for first time entry onto market
can help add to brand awareness and attract new customers
disadvantages of using special offers as advertising
only a short term boost to sales and profits
can make it difficult to sell a product at full margin
can change expectations of your customers, if done regularly it can be expected
what is meant by place (4th p’s)
distribution, transporting goods to the distributor or direct to customer
what are the five channels of distribution
distribution, transporting goods to the distributor or direct to customer
what is retail distribution
retailer buys product direct from manufacturer and distributes to customers e.g high street shop
advantages of retail distribution
gives personal service to customers
disadvantage of retail distribution
expensive to operate a retail store
what is wholesale distribution
wholesaler buys goods direct from manufacturer, stores them and redistributes them to individual retailers
advantages of wholesale distribution
wholesaler provides storage reducing cost for retailer
disadvantages of wholesale distribution
efficient supply chain required which isn’t always possible so sales may decline
what is internet distribution
use of internet technology to undertake e-com activities
advantages of internet distribution
easy and handy for customers
disadvantages of internet distribution
security issues and reliability of internet tech may impede sales
what is meant by people in the marking mix
employees - highly skilled staff allow business to be efficient
management - ensure resources are provided to enable staff development
customer service
what is meant by process in marking mix
dealing with complaints and issues
refers to the system employed by the firm to ensure their services are successfully delivered to customers
what is the psychical environment in the marketing mix
what it looks like, psychical environment allows customers to perceive the quality of business and its service
