Booklet 4 - Marketing Flashcards
Market segmentation, market research, price, promotion, product, place, product life cycle
Why and how may a business segment the market?
Why:
- to target the right products at the right people
-to satisfy customer needs
-to increase sales and profits
-to divide mass markets
How:
Age, Gender, Area, Lifestyle, Ethnicity, Income and social class.
What is market research?
What is quantitative data?
What is qualitative data?
Market research is concerned with finding out information about the market in which a business operates. It involves collecting, presenting and analysing information about customers, competitors and market trends.
Quantitative data answers questions about the quantity of something numerically.
Qualitative data answers questions where an opinion or judgement is needed.
What is primary (field) research and give examples.
Primary (field) research involves collecting new data that has not been collected before a certain/specific purpose of a business.
Examples - Questionnaires, interviews, consumer panels, observations and experiments.
What is secondary (desk) research and give examples.
Secondary (desk) research involves gathering existing data that has already been produced.
Examples -
Internal sources: finance records, customer records, sales records, pricing data
External sources: research reports, specialised trade journals, government consensus and market research agencies
Explain what happens in each stage of the product lifecycle
- Development - product is researched and developed, high cost, no profit.
- Launch - new to the market, low customers, high cost, low to no profit.
- Growth - product becomes more popular, lower costs, profit rises.
- Maturity - product is well known, competition introduced, advertising and sales and profits are high.
- Saturation - competition increases and their sales are higher.
- Decline - start to reduce prices, sales decrease, concentrate on only profitable products.
Extension strategies:
- sell into new markets (place)
-make changes to design or new variations (product)
-new advertising campaigns (promotion)
-improved version of the old product (product)
-sell through additional retailers (place)
What makes a successful product?
satisfy existing needs and wants of customers
stimulate new wants from customers
distinctive, has something to make it unique
price isn’t too high or low, suitable
first to introduce/ change a product
Branding and packaging
Branding: creates a unique brand image and name with unique packaging. It increases brand/ customer loyalty and means they can increase prices as it is higher quality than un-branded items.
Packaging:
- protects the product
-provides the product with customer information
-makes the product more appealing
-easier transport
easier to open
promotes brand image
Discrimination, penetration and psychological pricing - advantages and disadvantages
Discrimination: charging different prices to different market segments
ADV: lower prices attracts customer
DISA: may choose competitors, some customers excluded.
Penetration: setting a low price when first entering the product in the market.
ADV: attracts customers, customer loyalty
DISA: question quality, when prices ride, not willing to purchase.
Psychological: ‘only 5.99’ ‘just 99.99’
ADV: nudge customer to purchase, customer believes their getting a good deal.
DISA: some may not be convinced, choose competitors.
Skimming, cost plus and competitive pricing - advantages and disadvantages.
Skimming: product at a high price when entering the market.
ADV: attract early adopters, high profits
DISA: customers unable to pay, may wait or not buy
Cost plus: adding a sum onto the total cost
ADV: ensuring your earning a profit
DISA: may not work in a competitive market
Competitive: offering goods at a price lower than their competitors
ADV: firm is price competitive
DISA: customers may still buy from competitors or switch.
What are the aims of promotion?
- introduce a new product
-increase sales
-improve company image
-compete with competitors
-create brand image
What are types of promotion?
-discounts
-money off coupons
-free gifts
-after sale services
-free samples
-point of sales demonstrations
-point of sales displays
-competition
