bob Flashcards
primary research
research that the business go out and do themselves for example asking members of the public to answer a questionnaire they have created
secondary research
research that a business doesn’t complete themselves an example of this could be looking on Google for data to base a product of off
market research
gathering data about customers, competitors and market trends
quantitative data
numeric
qualitative data
opinion based
geographic segmentation
when a company segment there target market by location, region, rural/urban
psychographic segmentation
when a company segment there target market by hobbies, class, life style
behavioural segmentation
when a company segment there target market by usage, loyalty, benefits
demographic segmentation
when a company segment there target market by age, sex, occupation, income
examples of competitive advantage (7)
product design, product quality, promotional offers, customer service, delivery times, ethical stance, product attributes
examples of adding value (8)
usp, inputs, celebrities, packaging, transformation, craftsmanship, quality, outputs
factors affecting demand (8)
competitors actions, changes in price, income levels, seasons, external shocks, demographics, advertising and branding, trends
what’s the PED formula?
% change in quantity demanded over % change in price
when is a product elastic?
when the PED is over 1 or below minus 1
when is a product inelastic?
when the PED is less than 1 or higher than minus 1
what’s the YED formula?
% change in quantity demanded over % change in income
how do you work out the % change?
(difference over original) x 100
what is penetration pricing in pricing strategies?
a business prices its products very cheap e.g. Pound land
what is competitive pricing in pricing strategies?
this is when a business bases its prices on its competitors e.g. McDonald’s does not charge £6 for a burger as everyone would got to burger king
what is psychological pricing in pricing strategies?
this is when a business charges for example £19.99 as the consumer then believes that product is cheaper as it does not say £20
what is price skimming in pricing strategies?
a business starts at a high price and slowly begins to reduce the price over time
what is cost-plus pricing in pricing strategies?
adding value- when a business chargers more than the product costs to manufacture to gain profits
whats an advantage of psychological pricing?
this should increase sales as more people believe that the they are paying less which makes a profit
whats an advantage of competitive pricing?
the business knows the market is there and the people will buy those products for that price or within a range
whats an advantage of penetration pricing?
everyone can afford the product so they business can definitely sell products and also they have a wide target market
whats an advantage of cost-plus pricing?
guaranteed profit if products or service is sold
whats an advantage of price skimming?
the business can continue to sell products in different seasons to which the products are usually sold as the consumers get the product are able to buy for a cheaper price
whats a disadvantage of psychological pricing?
the business is losing a few p per unit which all adds up and will decrease profits made
whats a disadvantage of competitive pricing?
they are unable to sell there products for higher premium prices so they make less profit per product as they have less added value
whats a disadvantage of penetration pricing?
less price per unit
whats a disadvantage of cost-plus pricing?
competitors may add less value so consumers decide to go there instead
whats a disadvantage of price skimming?
slowly the business earns less and less per unit and the brand image of the product maybe be taken as less premium
why do businesses use pricing strategies? (6)
to increase sales, to enter new markets, to cover costs and make sure profit is made, to make a higher profit, to affect consumers perception of products, to maximize market share
6 types of pricing strategies
competitive, predatory, price skimming, psychological, penetrative, competitive
6 types of digital promotion
social media, viral strategies, advergaming, online adverts, consumer generated content, mobile communication
6 types of sales promotion
BOGOF, special events, point of sale, price discounts, money off coupons, sample give away
6 types of normal promotion
above the line advertising, below the line advertising, sponsorship’s, public relations, personal selling, direct marketing
direct marketing
highly focused targeted mail based on what customers have already brought
below the line marketing
usually for a niche market to create awareness, communicate information
above the line marketing
used in mass markets for example tv adverts and online
what is a sponsorship?
paid promotions with well known people to attract consumers to buy as a celebrity has been seen using it
public relations
unpaid promotions with well known people
personal selling
in a niche market
social media in promotion
adverts through Facebook and Instagram etc
mobile communications
extends online research and allows the customer to communicate while in the move
viral strategies
a business using a marketing technique which they hope will be shared to increase awareness of there product e.g coca cola putting names on bottles
advergaming
advergaming is when ads pop up on games possibly through apps or online games
consumer generated content
content which has been make available to other consumers online e.g. cookies
BOGOF
buy one get one free
special events
an advent the business holds to encourage the consumer to buy products from them
point of sale
usually a cardboard display close to the tills which is branded
money off coupons
can be used to capture new customers- to add incentive
samples/ giveaways
letting the customer try a free sample of your product to interest them and encourage them to buy your product
