Business - Unit 3: Marketing Flashcards
Primary Market Research
Collecting information which did not exist before the research began
Primary Market Research - Advantages
It’s up to date
Relevant and specific for the business
Only business with access to the info
Primary Market Research - Disadvantages
Expensive
Could have bias
Take long time
Not representative of the entire population
Secondary Market Research
Information which already exists in some form
It can be internal or external
Secondary Market Research - Advantages
Easier
Cheaper
Quicker to collect
Qualitative Data
Higher degree of info
Disagreement within business about the significant and importance of qualitative data
Quantitative Data
Produces data that can be tested
Can be compared
Hard to collate
Only numbers
Secondary Market Research - Disadvantages
Could be out of date
Not reliable
Extrapolation
Involves the use of trends established by historical data to make predictions about future values
Correlation
Another method of sales forecasting
Looks at the strength of a relationship between two variables
Positive Correlation
As one variable increases/decreases the other one increases/decreases
Negative Correlation
A relationship between two variables that move in opposite direction
No Correlation
A situation in which there is no connection between 2 or more facts
Price Elastic
Change in demand is more than the change in price
Price Inelastic
Change in demand is less than the change in price
Unitary price elasticity
Change in demand = change in price
Income elasticity of demand
Measures the extent to which the quantity of a product demanded is affected by a change in income
Luxuries
Income elasticity more than 1
As income grows, proportionally more is spent on luxuries
Necessities
Income elasticity less than 1 but more than 0
As income grows, proportionally less is spent on necessities
Geographic Segmentation
Customer location
Rural/urban region
Behavioural Segmentation
Personality
Lifestyle
Attitudes
Class
Demographic Segmentation
Age
Gender
Occupation
Socio-economic background
Income Segmentation
Disposable income
Substitutes
Segmentation Advantages
Focuses resources on parts of a market where business can succeed
Allows a business to grow share in markets
Helps with new product development
Helps make the marketing mix more effective
Segmentation Disadvantages
Segmentation is an imprecise science
The segments might not reach the target market
Markets are increasingly dynamic
Niche Marketing
A specialised market segment where you cater for the demand for products/services that are not currently being supplied by the main suppliers
Mass Marketing
Occurs when a business offers almost the same products to all consumers and promotes them in almost the same way
Market Positioning - Advantages
Helps spot the gaps in market
Useful for analysing competitors
Encourages use of market research
Market Positioning - Disadvantages
Just because there is a ‘gap’ doesn’t mean there is demand
Not a guarantee of success
Market research might not be reliable
Boston Matrix Axis
X Axis- Relative Market Share
Y Axis- Market Growth Rate
Boston Matrix - Star
High market share of a fast growing market
Features of a Star
Competition is high
Products have high levels of revenue
Products have high levels of costs such as advertising
Brands have to be established
There is hope they will become the cash cows of the future
Boston Matrix- Cash Cows
High market share in a slow growth market
Features of a Cash Cow
Very profitable
Well- positioned
Expenditure on advertising is very low
Customers know and understand the product
Brand value has been established
Development costs have already been recouped
Little need for Investment
Boston Matrix- Question Marks/Problem Children
Low market share in a fast growth market
Features of a Question Mark/Problem Child
Market is fast growing but it is not selling
Currently failing but worth doing something about it
Could be solved by a product relaunch or an alteration of design
Expensive to deal with and unclear what is best
Boston Matrix- Dogs
Low market share of a low growth/shrinking market
Features of Dogs
May still be marginally profitable
Not generally worth spending large amounts of money
Can be worth holding onto them especially if they provide synergies
Product Life Cycle
Development
Introduction
Growth
Maturity
Decline
Pricing strategies - Cost-plus
Price is set by applying a percentage margin based on the unit costs of production or supply
Pricing strategies - Dynamic
Setting flexible prices for products or services based on current market demands
Pricing strategies - Price Skimming
Charging a premium price when a product is first launched in order to maximise revenue per unit
Pricing strategies - Penetration pricing
Offering a significantly lower price than normal in an attempt to maximise volume sold and to build an installed base of product users
Promotion - Above the line
Mass targeting people
Promotion - Below the line
Target specific people
Distribution
Involves the ways in which a product reaches the end consumer
Aim of Distribution
To make products available in the right place at the right time in the right quantities
4 Stage Distribution
Producer
I
Wholesales
I
Retailers
I
Consumers
3 Stage Distribution
Producers
I
Retailer
I
Consumers
2 Stage Distribution
Producers
I
Consumer
Extended Marketing Mix - People
The employees and the people who produce the product
Extended Marketing Mix - Process
Process of buying something
Extended Marketing Mix - Physical Environment
The intangible
How the store feels when the consumer enters
Digital Marketing
The promotion of brands to connect with potential customers using the internet and other forms of digital communication
E-commerce
The trading of goods and services on the internet
E-tailer
A person or company that sells products on the internet
