Business Unit 2 ( Marketing ) Flashcards
2.1 Role of marketing
What factors will a business need to consider when marketing a product?
1. Finance - how much finance is available to spend on research & devlopment.
2. Who the market is aimed at - young people may be more likely to respond to ads on social media.
3. Location of potential customers - which country or region do they live in.
2.1 Role of marketing
Identify 3 different purposes of marketing.
1. Identifying and understanding customers - Who are they, what do they want, where do they live?
- Can be found through market research
2. Increasing sales - Sales can be increased by reducing price, introducing new products or selling in different places.
3. Informing customers - Advertise on TV, in papers, billboards etc.
2.2 Market research
What are the 4P’s of Marketing?
1. Price
2. Product
3. Place
4. Promotion
2.2 Market research
Identify the different Market research aims of a business.
- Their age
- Their conomic status
- Their culture
- Where they are
- What they want in a product or service
2.2 Market research
Describe how good market research helps a business to be successfull.
It lets the business find out;
- The product or service customers want
- The price its customers are willing ot pay
- The design of the product that will be attractive to customers.
- How many products customers will buy and so how many it should make.
- How to target customers.
- Where and how to sell its goods and services.
2.2 Market research
A) What is Primary Research
B) Describe & Provide Advs & Disadvs for;
B1) Questionnaires
B2) Interviews
A) Data that is collected first hand by the business.
B1) Questionnaire - A set of questions sent out to selected people in the post/online
Advantages:
- Cheap to carry out.
- Easy to target customers
Disadvantages:
- People may not understand the questions.
- People may nto be interested in the product, so may answer dishonestly or not at all.
B2) Interview - A person asks an individual or a group of people questions & records their answers.
Advantages:
- The questions can be explained.
- It is easy to target certian types of consumers.
Disadvantages:
- It is an expensive method.
- Not everybody likes being interviewed.
2.2 Market research
Describe & Provide Advs & Disadvs for;
A1) Trailling
A2) Focus Groups
A1) A product is sold for a short period, usually in one region of a country, if it sells well the business will go into full production.
Advantages:
- A good way to see if the product is wanted.
- Reduces the risk invovled in produing large quantities.
Disadvantage:
- The people or area tested must be repesentative of the total market; else, the findings won’t help the business.
- If it fails the business would’ve still lost out on the costs that went into production
A2) A small group of people are asked to use the product/give their opinion on one. The feedback helps the business re-design.
Advantages:
- The people chosen will be representative of potential customers.
Disadvantages:
- It will only be a small group.
- It is usually costly to carry out.
2.2 Market research
A) What is Secondary Research
B) Describe & Provide Advs & Disadvs for;
B1) UK Census data
B2) Newspapers & Magazines
A) The collection of data using research and information provided by others.
B1) Information collected by the Gov.t every 10 years, ( Number of people in the house, income, location etc )
Advantage:
- Information comes from alot of people - almost the whole country.
- It is already collected and analysed, reducing businesses costs.
Disadvantages:
- Information has not been collected to meet specific business needs.
- The information will need careful interpretation.
- Information may be outdated since it’s only collected very 10 years.
B2) Articles often describe people’s interests and current fashions.
Advantages:
- Such information is up to date, making it relevant to current business activities
- It is also cheap & is a good source of ideas.
Disadvantages:
- Information will be general and not specific to the busines
2.2 Market research
Describe & Provide Advs & Disadvs for;
A1) Data from websites
A2) Internal data
A1) Information about other companies can be found ( what they sell, prices etc )
Advantages:
- Cheap to collect and readily available
- Such data can help a business what to produce as well as pricing.
Disadvantages:
- The information will need to be carefully interepreted
- Might not be relevant to the business.
A2) This is data collected by the business about, for example, its past sales.
Advantages:
- Cheap to collect and readily available.
- Is specific to the business.
Disadvantages:
- Data is historical - it looks at what has happened, not what will happen.
2.2 Market research
What factors will a business need to consider when choosing what type of research to conduct?
1. How much the business can afford to spend - some organisations can only afford secondary, others can do primary.
2. What information is required - first hand information can be good to gain opinions on new products.
3. Location of customers - a questionnaire or telephone interview may be a good way of getting information from far customers.
4. How quickly information is needed - Secondary information is quicker to obtain.
2.2 Market research
A) What is Qualitative Data?
B1) Advantage of Qualitative data
B2) Disadvantages of Qualitative data
A) This is data based on the opinions of those being asked.
A1)
- Provides Depth & Detail: – Offers insights into opinions, motivations, and emotions that numbers alone can’t explain.
- More Flexible & Exploratory: – Allows for open-ended responses, helping businesses understand customer behavior and trends better.
A2)
- Difficult to Analyze & Compare: Since it’s non-numerical, summarizing and spotting trends can be time-consuming and subjective.
- Time-Consuming & Expensive: Collecting and interpreting interviews or focus groups takes more effort than simple numerical data.
2.2 Market research
A) What is Quantitative Data?
B1) Advantage of Quantitative data
B2) Disadvantages of Quantitative data
A) Data collected that is based on facts or numbers.
A1)
- Easier to Analyze & Compare: Since it’s numbers-based, businesses can quickly identify trends and make data-driven decisions.
- More Reliable & Objective: It’s less open to interpretation bias, making it more consistent and repeatable for research.
A2)
- Lacks Depth & Explanation – While it shows what is happening, it doesn’t explain why people behave a certain way.
- Can Be Misleading – Data might not reflect real opinions if the survey is too rigid or poorly designed (e.g., biased questions).
2.3 Market segmentation
What will a business need to consider when targeting different segments in the market?
1. Whether to produce different products for different markets - male/female versions etc
2. What price to charge - high or low
3. How to promote the products - the type of media to use.
4. Where to lcate shops - town centre, shopping mall, holiday resort.
2.3 Market segmentation
Describe the different ways a business can segment a market.
- Age
- Gender
- Location
- Lifestyle
- Income
2.4 The marketing mix
Describe the different processes involved in devlopment of a produce/service.
1. Design - When a business plans what a product will do and what it will look like.
2. Invention - When a business comes up with a new product or service.
3. Innovation - When a business improves a product which already exists.
2.4 The marketing mix
Describe the different stages of the product life cycle.
0.5 R&D ( Research & Development ) - This takes place before a product is introduced.
1. Introduction - When a product or service is first on sale.
2. Growth - When sales are growing strongly as the new product or service becomes known.
3. Maturity - When sales are at their highest level.
4. Decline - When sales are falling as the product or service is seen by customers to e old and they move on.
2.4 The marketing mix
What will a business need to consider when deciding the price for a product?
- How new the product is
- The quality of the product
- The number and nature of the competitors
- How well customers know the product already
- What stage of the product life cycle the product is at.
- The costs of producing the product.
2.4 The marketing mix
Describe some different pricing methods a business could use.
( Provide benefits )
1. Price Skimming - where a new product is given a high price is charged for it but the price decreases over time.
- High profit margins early on help recover development costs quickly
- Creates a perception of high quality or exclusivity, attracting early adopters
2. Cost-plus pricing - Adds a percentage for profit to the total costs of making a product, giving a selling price
- Ensures a profit is made on every product sold.
- Simple to calculate, making it easy for businesses to use.
3. Penetration pricing - A price is set that is lower than those of competitors. Often used by new business to break into the market.
- Helps stay competitive in the market and attract price-conscious customers.
- Reduces the risk of losing customers to rivals with lower prices
4. Promotional pricing - Prices are reduced to give products a boost of to sell of old stock
- Increases short-term sales volume, useful for clearing stock
- Attracts new customers who may return even after prices go back up
5. Competitor pricing - A price is set based on prices charged by competitors for a similar product.
- Attracts customers quickly, building market share.
- Discourages competitors from entering the market due to low profit margins
2.4 The marketing mix
Describe the different kinds of ‘Point of Sale’ Promotions.
1. Price reductions- Done to sell of old stock, a disadvantage is that the business will make less profit.
- Encourages quick purchases, especially from price-sensitive customers.
- Helps clear old or excess stock, making room for new products.
2. Competitions - A person who buys a product is entered into a competition
- Increases customer engagement and excitement, boosting brand loyalty
- Encourages repeat purchases, especially if entry requires multiple buys
3. Loss leaders- Some goods are sold at a loss to encourage customers to come to the shop so they do all their shopping their
- Draws in more customers, increasing footfall or website traffic.
- Boosts sales of other higher-margin items, as customers may buy more while they’re there.
4. Free samples- These are given to tempt people to buy the product.
- Lets customers try before they buy, increasing the chance of a full purchase.
- Raises awareness of a new or existing product by creating a positive first impression.
Point of sale promotion - a benefit the customer will receive when they buy the product.
2.4 The marketing mix
Describe the different kinds of Advertising a business could use.
1. Social media
- A cheap way of communicting with large numbers of people as well as targeting customers
- However, not everyone used social media & it is not free.
2. Websites
- A lot of info can be provided, including diagrams and videos.
- It does cost money to keep a website up to date.
3. Television
- This is often expensive, but TV advertising can reach a wide audience.
- Advertisers will know what channels & programmes potential customers watch.
4. Print media
- Includes; newspapers, magazines and leafets. Business can target their market.
- However, many people do not read newspapers and leafets are often ignored.
5. Radio
- This is cheaper than TV & usually suitable for local advertising
- However products cannot be seen.
2.4 The marketing mix
Outline the different Physical distribution channels while providing advantage of each.
1. Producer -> Consumer E.g. Goods sold by a farmer from a farm shop
- By missing out wholesalers and retailers, the producer make more profit.
2. Producer -> Retailer -> Consumer E.g. Goods sold by an electronics company to a big retail chain like currys
- Selling directly to the reailer means the producer can benefit from some extra profit, while still being confident retailer will be able to market the goods.
3. Producer -> Wholesaler -> Retailer -> Consumer
- A wholesaler can break up bulk stock and offer retailers the goods in quantities they can afford, & which they can sell, so more trailers are willing to sell the goods.
2.4 The marketing mix
Describe the Advantages & Disadvantages of digital distribution.
1. Advantages include;
- The consumer can buy the product 24/7
- It is a method of selling, without the costs of physical shops or transport.
2. Disadvantages include;
- Physical goods cannot be distributed digitally
- It is a very competitive market as consumers can easily compare prices etc
- Customers who do not own a computer cannot buy online
- Some customers do not like sharing bank/credit details online.
2.4 The marketing mix
What are some factors businesses musst consider when making decisions about the marketing mix.
- The type of product they are selling
- The cost of the product
- The stage of the produt life cycle of the product
- The target market
- The funds available for marketing.
2.4 The marketing mix
Describe how the Marketing Mix ‘Product’ would be involved in the Product life cycle.
( Mobile phone for E.g. )
1. Introduction
- Introduce a new, high-tech phone.
2. Growth
- The phone does not change
- Begin the process of innovating and designing a model to replace the phone.
3. Maturity
- Add new styles of the phone to attract a wider range of customers.
- Continue the design and development process
4. Decline
- Introduce new features to attract sales
- Be ready to introduce a new model once sales of current phone can no longer be extended.
