Business: Marketing Flashcards
Chapter 10-17
1
Q
marketing
A
identifying customer wants and satisfying them profitably
2
Q
customer
A
a person, business or other organisation which buys goods or services from a business
3
Q
what is the role of marketing
A
-identity customer needs
-satisfy customer needs
-maintain customer loyalty
-build customer relationships
-anticipate changes in customer needs
4
Q
customer loyalty
A
when existing customers continually buy products from the same business
5
Q
customer relationships
A
communicating with customers to encourage them to become loyal to the business and its products
6
Q
market share
A
the percentage of total market sales held by one brand or business
7
Q
if marketing is successful, what is the outcome
A
-raise customer awareness
-increase revenue and profitability
-increase or maintain market share
-maintain or improve image of products or business
-target a new market
-enter new markets locally or abroad
-develop new products
-improve existing products
8
Q
consumer
A
buys goods or services for personal use-not to re-sell
9
Q
why customers/consumers spending pattern changes
A
-consumer tastes and fashion changes
-changes in technology
-change in incomes
-ageing populations
-price of product and competitors products
10
Q
why have some markets become more competitive
A
-globalisation
-transportation improvements
-internet/e-commerce
11
Q
how can businesses respond to changing spending patterns and increased competition
A
-maintain good customer relationships
-keep improving its existing products
-bring out new products to keep customers’ interest
-keep costs low to maintain competitiveness
12
Q
market
A
the total number of customers and potential customers, as well as sellers, for the particular good or service
13
Q
mass market
A
where there is a very large number of sales of a product
14
Q
advantages of mass market
A
-total sales in these markets are very high
-the business can benefit from economies of scale
-risks can be spread
-opportunities for growth of the business due to large potential sales
15
Q
disadvantages of mass market
A
-high levels of competition
-high costs of advertising and promotion
-standardised products or services are produced, may not meet all needs of consumer
16
Q
niche market
A
a small, usually specialised, segment of a much larger market
17
Q
advantages of niche market
A
-reduced competition (mass market don’t have specific products)
-needs of customers closely focused on (high levels of customer loyalty and relationships)
-low costs of marketing
18
Q
disadvantages of niche market
A
-limited sales potential (businesses need to be small for profit)
-specialised in one product (if product is no longer ind demand, business may fail)
-unable to expand (small market)
19
Q
market segment
A
an identifiable sub-group of a whole market in which consumers have similar characteristics or preferences
20
Q
why do businesses segment
A
-ensure that strategies implemented are more cost effective by producing a product which closely meets the needs of these customers and targeting its market efforts only in this segment
-higher sales and profits (cost-effective marketing)
-identify a market segment/gap which is not having its needs fully met, and therefore offers opportunities to increase sales
21
Q
ways to segment a market
A
-socio-economic group
-age
-gender
-region/location
-use of product
-lifestyle
22
Q
factors when choosing a way to segment a market
A
-detailed analysis of market and size of each potential segment in terms of consumers and likely sales
-company image and brand image (high-tech business with an excellent reputation for innovation will not want to produce low-priced goods for low income consumers)
-cost of entering each segment (specially designed product and advertising campaign)
23
Q
market research
A
the process of gathering, analysing and interpreting information about a market
24
Q
why is market research important
A
helps businesses to find out how many people would want to buy the product it is planning to offer for sale
25
product-orientated businesses
businesses whose main focus of activity is on the product itself
26
market-orientated businesses
businesses which carries out market research to find out consumer wants before a product is developed and produced
27
marketing budget
a financial plan for the marketing of a product or product range for some specified period of time
28
what can market research find out
-quantitative information
-qualitative information
29
primary research
the collection and collation of original data via direct contact with potential or existing customers (field research)
30
secondary research
uses information that has already been collected and is available for use by others
31
process of primary research
-purpose of market research
-decide on the most suitable method
-decide on the size of sample and who will be asked
-carry out the research
-collect the data and analyse the result
-produce a report of the findings
32
advantages of primary research
-up to date and relevant
-first hand
-most effective
-not available to other businesses
33
disadvantages of primary research
-expensive
-not available immediately
34
methods of primary research
-questionnaire
-interviews
-focus groups
-observation
35
what are questionnaires
-basic form of primary research
-conducted face-to-face/online
-questions need to be specific to get answers
36
advantages of questionnaires
-detailed qualitative information
-customer opinions obtained
-carried out online
-encourage people to do it
37
disadvantages of questionnaires
-answers may not be accurate
-misleading
-takes time and money
-collecting and analysing is time consuming
38
what are interviews
prepared questions that will be asked to the interviewee
39
advantages of interviews
-interviewer able to ask questions
-detailed information can be gathered about what consumers like/dislike
40
disadvantages of interviews
-interviewer could lead interviewee in a. way
-time-consuming
-expensive way to gather information
41
what are focus groups
groups of people who agree to provide information through discussion/researcher
42
advantages of focus groups
-provide detailed information
-interaction between consumer scan help businesses understand reason for people's opinions
-quicker and cheaper than interviews
43
disadvantages of focus groups
-time consuming and expensive
-may be biased
-may be dominated by a few people
44
what are observations
watching and recording behaviours of consumers in a natural/controlled environment
45
advantages of observations
-unbiased
-real-time
-non-intrusive
-useful for analysing behaviour
46
disadvantages of observations
-time-consuming
-limited insights
-ethical concerns
-expensive
47
internal sources of secondary data
-sales department records, pricing data, customer records, sales reports
-opinions of distribution and public relations personnel
-finance department
-customer service department
48
advantages of secondary data
-cheaper way of getting information
-help assess the total size of the market
-quicker way to obtain info
49
external sources of secondary research
-newspapers
-online sources
-textbooks
-government statistics
-market research agencies
50
disadvantages of secondary data
-out of date
-available for all businesses (competitors)
-may not be completely relevant
51
factors influencing the accuracy of market research data
-how carefully the sample was drawn up
-the way questions are phrased
-sample selection
-potential for bias
-who carried out the research
-age of the information
52
marketing mix
describe all the activities which go into marketing a product/service (4 Ps: product, price, place, promotion)
53
what is product
the good/service itself
54
what is price
price at which the product is sold to the customer
55
what is place
the channels of distribution that are selected
56
what is promotion
how the product is advertised and promoted
57
what do the 4P's need to. communicate
the same message
58
what makes a product successful
-satisfies customer wants & needs
-made of the right quality so customers are willing to pay for it
-not difficult to make/sustainable= costs not higher than the price charged for it
-design of product is attractive, durable & meets the standard expected of customers
59
what is the role of product in the marketing mix
-without a product, the other "P's" won't exist
-most companies are market-orientated
60
market-orientated
does the research first before creating the product
61
product-orientated
creates the product before doing the research
62
what are the types of product
-consumer goods & services
-producer goods & services
63
consumer goods & services
bought by consumers for their own use
64
producer goods & services
produced for other businesses to use and help other services
65
why do businesses develop new products
-expensive but essential
-competitive advantage (ability to stay one step ahead off ahead of the competition by offering a better product)
-research & development (spending money on new products)
66
process of new product development (NPD)
1. Generate ideas
2. Select the best ideas for further research
3. Decide if the company will be able to sell enough for the product to be a success
3. Develop a prototype
4. Launch the product in one area to test the market
6. Go to a full launch of the product to the whole market
67
advantages of developing new products
-unique selling point (USP), competitive advantage
-diversification for the business
-allow the business the expand into existing markets
-allow the business to meet the needs of existing customers/ attract new market
-reduce the risks of existing products failing
68
disadvantages of developing new products
-expensive research &development
-no guarantee of success
-other firms may copy their ideas after it is launched
-time-consuming
-loss of company image if new product fails to meet customer needs
69
brand name
the unique name of a product that distinguishes it from other brands
70
brand loyalty
when consumers keep buying the same brand again and again instead of choosing a competitors brand
71
brand image
the personality given to a product through marketing activities
72
branding
refers to the name, symbol or design to identify a particular product and to help maintain or increase its sales
73
what is branding used for
-create & maintain brand loyalty
-expand product ranges
-differentiate products
-aid recognition
-gain price flexibility
74
packaging
the physical container/wrapping for a product
75
what is packaging used for
promotion and selling appeal
76
role of packaging
-protect product from damage
-promote the product
-differentiate the product
-communicate information
-make product convenient to use
-make product easy to display
77
product life cycle
the stages a product will pass through from its introduction, through its growth until it is matured and then finally its decline
78
extension strategy
a way of keeping a product at the maturity stage of the life cycle and extending the cycle
79
introduction stage
-launching product cost will be high
-sales will be low
-product unlikely to make profit
-customers will be early innovators
-marketing, focus on brand awareness
80
growth stage
-sales begin to grow
-competition enters the market
-covered development costs, product becomes profitable
-marketing, focus on brand preference
-new features may be added
81
maturity/saturation stage
-sales grow at a decreasing rate/stabilise (market saturates)
-marketing focus on brand loyalty
-production attempts to gain market share by differentiating products
-peak competition
-price is an important factor
82
decline stage
-sales fall
-new/innovative products introduced
-consumer tastes changes
-marketing expenditure reduced
-product simplified, cut costs
-often withdrawn from sales
83
Introduction: product
basic
84
Introduction: price
skimming/ penetration pricing
85
Introduction: promotion
brand awareness
86
Introduction: place
build selective distribution
87
Growth: product
offers product extensions, services & warranty
88
Growth: price
price cut/ increase depending on introduction strategy
89
Growth: promotion
establish strong brand image by promotional activities
90
Growth: place
built intensive distribution
91
Maturity/Saturation: product
diversify brands/models
92
Maturity/Saturation: price
lower price, remains competition to extend stage for longer
93
Maturity/Saturation: promotion
retain brand loyalty
94
Maturity/Saturation: place
build MORE intensive distribution
95
Decline: product
phase out weak items
96
Decline: price
lower price, attract customers from competitors newer products
97
Decline: promotion
relaunch product, extension strategy
98
Decline: place
falling number of outlets
99
why do businesses adopt new pricing strategies
-break into a new market
-increase its market share
-increase its profits
-make sure all its costs are covered and a target profit is earned
100
promotional pricing
when a product is sold at a very low price for a short period of time
101
advantages of promotional pricing
-useful for removing unwanted inventory that will not sell
-help renew interest in a product if sales are falling (economic recession)
102
disadvantages of promotional pricing
-lower revenue: each item's price will be reduced to increase sales
-lead to price competition, businesses may have to reduce price again
103
what is cost plus pricing
cost of manufacturing a product plus mark-up (profit)
104
advantages of cost plus pricing
-easy to apply
-different profit mark-ups, able to use in different markets
-each product earns a profit
105
disadvantages of cost plus pricing
-businesses may lose sales if selling price is higher than competitors
-total profit will only be made if sufficient units of products are sold
-no incentive to reduce costs, any increase in costs will increase customer's price
106
what is competitive pricing
product priced in line with/just below competitors price, to capture more market
107
advantages of competitive pricing
-sales are likely to be high, price is at realistic level, product not over/under priced
-avoids price competition, reduce profits for all businesses in the industry
-used when difficulty for consumers to tell the difference between he products of different businesses
108
disadvantages of competitive pricing
-costs of production are higher than competitors (product higher quality), a competitive pricing strategy would have losses
-higher quality might need to be sold above competitor's price, higher quality image
-detailed research needed into what prices competitors are charging, research cost time and money
109
what is penetration pricing
price sit lower than competitors pricing to enter a new market successfully
110
advantages of penetration pricing
-used for newly launched products, create an impact with customers
-ensure sales are made & new product enters market successfully
-quick build-up of market share
111
disadvantages of penetration pricing
-product low price, profit per unit may be low
-customers may get used to low price & reject increase in price
-might not be appropriate for branded products- reputation for quality
112
what is price skimming
high price is set for a new product
113
advantages of price skimming
-ensure/establish the product's quality
-high research & development costs are recouped, profit made from high price
-product is unique, high price leads to profits before competitor's product is launched, price will be reduced
114
disadvantages of price skimming
-high price may discourage some potential customers buying it
-high price & profitability may encourage more competitors to enter the market
115
price elastic demand
where consumers are very sensitive to changes in price, normally luxuries or non-essentials
116
price inelastic demand
where consumers are not sensitive to changes in price, normally necessities, utilities & goods with no substitutes
117
proportion of incomee spent
price elastic= low
price inelastic= high
118
concept of price elasticity of demand
if the demand for the product of a business is price elastic then it isn't a good idea to raise prices, unless there has been rising costs.
if the price elasticity of demand is inelastic, then businesses can increase revenue by increasing prices
119
dynamic pricing
when businesses change product prices, usually when selling online, depending on the level of demand
120
distribution channel
the means by which a product is passed from the place of production to the customer
121
Distribution Channel 1: direct to consumers
producer to consumers
122
Distribution Channel 2: using a retailer as the only intermediary
producer to retailer to consumers
123
Distribution Channel 3: using a wholesaler and retailer as intermediaries
producer to wholesaler to retailer to consumers
124
Distribution Channel 4: using an additional intermediary such as an agent
producer to agent to wholesaler to retailer to consumers
125
what is direct to consumer
common for selling directly from one manufacturer to another
126
advantages of direct to consumer
-very simple
-suitable for products and straight from the farm
-lower price, sold direct to customers
-sold by mail/internet
127
disadvantages of direct to consumer
-impractical for most products (consumers don't live near)
-not suitable for products that can't be sent by posts
-expensive, may not be cost effective
128
what is using a retailer as the only intermediary
producer sells directly to retail outlets and then sell to the consumers
129
advantages of using a retailer as the only intermediary
-producer sells large quantities to retailers
-reduced distribution costs
130
disadvantages of using a retailer as the only intermediary
-no direct contact with consumers
-price is higher, retailer has to cover costs to make profit
131
what is using a whole salter and retailer as intermediaries
involves using a wholesaler, who performs the function of breaking bulk (large quantities divided into much smaller quantities for retailers to buy
132
advantages of using a wholesaler and retailer as intermediaries
-wholesaler saves storage space for small retailer and reduces storage costs
-small retailers can purchase fresh products from wholesaler because they have a short shelf-life before they deteriorate
-wholesaler may give credit to retail customers, take goods straight away to pay later
-wholesaler may deliver to small retailers, save transport costs
-wholesaler can give small advice to retailers & manufacturers about what sells well
133
disadvantages of using a wholesaler and retailer as intermediaries
-more expensive
-wholesaler may not have full range products
-linger for fresh produce to reach shops
-wholesaler, long way from small shops
-consume price higher than direct selling, both wholesaler and retailer have to cover costs to make profit
134
what is using an additional intermediary such as an agent
agent sells product on behalf of manufacturer, manufacturer have control, agent have additional price, agent may act as an wholesaler
135
advantages of using an additional intermediary such as an agent
-manufacturer may not know the best way to sell products in other markets
-agents aware of local conditions best position to select the most effective places to sell
136
disadvantages of using an additional intermediary such as an agent
-producer has less control over the way product is sold to consumers
137
how to select the distribution channel to use
-what type of product is it
-is the product very technical
-how often is the product purchased
-how expensive is the product
-how perishable is the product
-where are the customers located
-where do the competitors sell their products
138
the role of promotion in the marketing mix
promotion is where marketing activities aim to raise customers awareness of a product/brand, generating sales, es and helping to create brand loyalty
139
what do promotion include
-advertising
-sales promotion
140
types of advertising
-informative
-persuasive
141
aims of promotion
-introduce new products on the market
-compete with competitor's product
-improve the company's image
-increase sales
-create a brand image
-inform people about particular issues
142
promotion
where marketing activities aim to raise customer awareness of a product/brand, generating sales and helping to create brand loyalty
143
advertising
paid for communication with potential customers about a product to encourage them to buy it
144
informative advertising
where the emphasis of advertising/sakes promotion is to give full information about the product
145
persuasive advertising
advertising/promotion which is trying to persuade the consumer that they really need the product and should buy it
146
what is the advertising process
1. set objectives
2. decide the advertising budget
3. create an advertising campaign
4. select the media to use
5. evaluate the effectiveness
147
agent
an independent person/business that is appointed to deal with the sales and distribution of a product or range of products
148
target audience
the people who are potential buyers of a product/service
149
advantages of television
-millions of people watch television
-product shown in a favourable way (attractive)
-biggest number of consumers & reach a target audience
149
disadvantages of television
-expensive
-young consumers may not watch television programmes
149
advantages of radio
-cheaper than television
-large audience
-memorable song/tune
150
disadvantages of radio
-no visual image
-expensive
-audience cannot play/look back
-not as wide audience as TV
151
advantages of newspapers
-can be used for selected audience
-large audience
-cost-effective
-permanent
-many information can be provided
152
disadvantages of newspapers
-black & white, not eye-catching
-many young people don't read the newspaper
153
advantages of magazines
-effective to reach target audience
-colourful (attractive)
153
disadvantages of magazines
-published once-a-month/week
-more expensive than newspapers
153
advantages of posters/billboards
-permanent
-cheap
-potentially seen by everyone
154
disadvantages of posters/billboards
-easily missed
-no detailed info
154
advantages of cinemas/DVDs/BlueRays
-visual image in a positive way
-low cost
-effective if target audience sees it
155
disadvantages of cinemas/DVDs/BlueRays
-limited people watch cinemas/DVDs/BlueRays
156
advantages of leaflets
-cheap
-wide-range of people
-direct mail
-contain discounts
-permanent
156
disadvantages of leaflets
-may not be read
-direct mail can be annoying
157
advantages of internet
-large amount of info
-orders made instantly
-cheap
158
disadvantages of internet
-website may be missed
-some countries internet are restricted/limited
-competition high
-security issues discourage purchase
159
advantages of other forms of publicity
-cheap form of advertising
159
disadvantages of other forms of publicity
-may not be seen by customers int he target market
160
differences between advertising and sales promotion
advertising: above the line promotion
sales promotion: below the line promotion
incentives, short-term increase in sales
sort periods of time, reinforce above-the-line promotions
161
examples of sales promotion
-price reduction
-gifts
-competitors
-point of sale displays & demo
-after-sales services
-free samples
-buy one get one free
162
sales promotion
incentives aimed at consumers to achieve short-term increases in sales
163
advantages of sales promotion
-promote sales
-encourages customers to try new products
-encourages customers to try existing products
-encourages customers to buy products more frequently on larger quantities
-encourages customers to buy your product rather than competitors
164
what affects the promotional efforts of firms
-too small, may not match competitors spending
-too big, cost of promotion may exceed revenue gained from sales
165
how important is promotion
-degree of competition
-size of market segment
-marketing emphasis
-stage in the product life cycle
-extent of supply
166
factors which affect what type of promotion should be used
-stage of product life cycle
-nature of product itself
-cultural issues involved with international marketing
166
marketing budget
a financial plan for the marketing of a product or product range for a specified period of time
167
social media marketing
a form of internet marketing that involves creating and sharing content on social media networks in order to achieve marketing and branding goals
it includes activities that achieves audience engagement
168
viral marketing
when consumers are encouraged to share information online about the products of a business
169
e-commerce
the online buying and selling of goods and services using computer systems linked to the internet and apps on phones
170
benefits of businesses advertising on social media
-targets specific demographic groups
-target customers will see the advert
-speed inn response to market changes
-cheap to use
-reaches groups that are difficult to reach any other way
171
disadvantages of businesses advertising on social media
-alienate customers if they find the advert annoying
-expensive to pay for pop-up advertising
-potential customers may not use social media
-lack of control of advertising if used by others
-messages may be altered or used in a bad way, leading to bad publicity
172
advantages of advertising on own website
-no extra costs is website is already set up
-control
-change/update adverts quickly
-interactive adverts can be more attractive
-can provide more information
-attract funds/payments
173
disadvantages of advertising on own website
-potential customers may not see the website
-relies on customers to find the website
-design costs of website may be high
174
types of e-commerce
business to business
business to consumers
175
business to business
exchange of products, services or information between businesses
176
business to consumers
transactions conducted directly between a company and consumers whoa re the end-users of its products/services
177
what makes a good website
-good looking, user-friendly
-updated regularly
-attractive
-informative
-accessible
178
opportunities of business to business
-large target market
-lower costs
-in-depth information
-multiple devices to sell products
179
threats of business to business
-increased competition
-website costs large amounts to design & setup
-website may be temporarily close when needs updating
-customers expect fast & efficient process
180
opportunities of business to consumers
-search for prices
-competitive marketplace
-access reviews & feedback
-buy products from all over the world
181
threats of business to consumers
-may be scammed
-cannot feel the product
-take time for delivery
-difficult process if products aren't what consumers wanted (returns)
182
marketing strategy
plan to combine the right combination of the four elements of the marketing mix for a product or service to achieve a particular marketing objective
183
types of marketing objectives
-increasing sales of existing product/service by selling to new market for selling more to the existing market
-increasing sales of a product/service by improving it (extension strategy)
-achieving a target market share with a newly launched product
-increasing market share
-maintaining market share if competition is increasing
-increasing sales in a niche market
184
importance of the marketing mix in influencing consumer decisions
the 4 elements of the marketing mix are important in influencing consumers decisions when developing a marketing strategy aimed at a specific target market
if the marketing strategy dies not combine the elements of the marketing mix correctly then the marketing objectives will not be achieved
185
factors when recommending and justifying a marketing strategy in given circumstances
-marketing objective
-marketing budget
-target market
-balancing marketing mix
186
advantages of selling products in many countries
-markets in other countries might have much greater growth potential than existing markets
-home markets may be saturated, new markets may have higher sales
-wider choice of location to produce products, leading to selling as well
-lowered trade barriers
187
problems of entering foreign markets
-lack of knowledge
-cultural differences
-exchange rate changes
-import restrictions
-increased risk of non-payment
-increased transportation costs
188
methods to overcome the problems of entering new markets abroad
-joint ventures (management conflict, profit shared)
-licensing (quality problems, product information shared)
-international franchising (quality problems/poor service may damage brand image, training and support need to be provided)
-localising existing brands (less successful than product made in the country itself, expensive to keep changing the 4P's based on market)
