ch1 grid qs Flashcards
What does marketing involve?
Informing customers about products and identifying their preferences in order to make profit.
What is the difference between a product-oriented business and a market-oriented business?
A product-oriented firm develops a product without prior research of customers’ needs, and then finds a market to sell it. A market-oriented firm studies the markets’ needs and then supplies the product according to consumers’ needs. By doing so, it guarantees sales.
What are the roles of marketing?
Marketing is used to help a business:
- Identify changes in consumers’ tastes and purchases.
- Identify the level of competitiveness within markets and the reasons why markets become more competitive.
- Identify ways to overcome competition by rivals and develop better products to meet consumers’ demand.
- Identify consumer needs and satisfy them profitably.
- Develop and maintain consumer loyalty.
What are the elements of the marketing mix?
Product, price, place, promotion
What are the common marketing strategies and why are they used?
They assist in achieving marketing objectives and include:
- entering new markets to expand sales
- increasing sales to achieve a higher market share
- maintain the same level of sales and market share
- improving existing products to sell more
How do the elements of the marketing mix affect the marketing strategy?
In order to develop the appropriate marketing strategy, the business should consider different issues related to the elements of the marketing mix.
- When considering the product, the business should determine whether to produce one or more products, its/their features, the production method, the importance of quality, the availability of aftersales services, and the package.
- When considering the price the business should identify whether the market is competitive, whether the product is new or old, whether to use promotion to attract customers, whether the good is a luxury or a basic item, and whether the demand is highly elastic.
- When considering the place, the business should decide whether to sell directly to customers or use intermediaries, determine whether the product needs to be widely available, identify methods and channels of distribution, consider costs and barriers if the product is exported, and identify how the product type affects its distribution.
- When considering promotion, the business should determine the promotion budget, the competition level in the market, the frequency of advertising, where and how to
advertise, and the target customers.
Which factors cause changes to the consumption patterns of consumers?
Changes in price, incomes, population, income tax, fashion or tastes result in a change the consumption patterns.
Which factors promote competition?
Limiting control over businesses, providing financial assistance in the form of subsidies, using information technology and the internet to sell more, eliminating trade
restrictions on international trade
A business faces high competition and a decrease in sales. How can it overcome this?
- Develop new products or add features to existing ones
- Offer sales discounts or vouchers
- Enter new markets
- Reduce costs to be able to make more profit
What are the benefits and risks of niche markets?
Benefits: higher chance for survival and profit generation, resources are not over consumed due to low competition, firms can charge premium prices, firms can build consumer loyalty
Drawbacks: cannot produce in bulk and achieve economies of scale
How does a business benefit from mass market production?
Achieve economies of scale, supply to a larger market and even internationally, ability to lower costs of production, ability to survive even if consumers change their tastes by supplying alternatives.
How does a business benefit from segmenting the market?
- Allows to increase sales and revenues
- Allows to know what consumers want and increase their satisfaction
- Allows to identify gaps in the market and benefit from first mover advantage
- Allows to set more successful marketing strategies
- Allows to provide a variety of products to meet different segments’ needs and hence increase profit
How do businesses react to increased competition?
Develop and maintain good customer relationships, develop new products or improve existing ones, control costs.
How is market share calculated?
Market share = sales of the company/total market sales × 100%
