Chapter 10 - Managing the marketing function

Question 1

What is marketing?

Answer 1

Marketing is a total system of interacting activities designed to plan, price, promote and distribute products to present and potential customers.

Question 2

What is the marketing concept?

Answer 2

The marketing concept is a philosophy that all sections of the business are involved in satisfying a customer’s needs and wants while achieving the business’s objectives.

Question 3

What are the 4 p’s? (marketing mix)

Answer 3

Product
Place
Price
Promotion

Question 4

What is market research?

Answer 4

Market research attempts to identify and outline both marketing opportunities and problems, as well as evaluating the implementation of the marketing plan.

Question 5

What are the 3 steps of market research?

Answer 5

1. Determining information needs
2. Collecting data from primary and secondary sources
3. Analysing and interpreting sources

Question 6

What is marketing data?

Answer 6

Marketing data comprise the information — usually facts and figures — relevant to the defined marketing problem. Normally, market researchers use a combination of two types of data: primary and secondary data.

Question 7

Definition of primary data?

Answer 7

Primary data refers to the information collected from original sources for the purpose of the specific research problem.

Question 8

What are the 3 main methods used to collect primary data?

Answer 8

1. survey
2. observation
3. experimentation

Question 9

Definition of secondary data

Answer 9

Secondary data: refers to information that some other person or organisation has already collected.

Question 10

What are the 2 types of secondary data?

Answer 10

The two types of secondary data are:

• internal data, which is information that internal sources (that is, from inside the business) have already collected. Such data include financial statistics, annual management reports, research reports, customer feedback and sales reports.
• external data, which is published data from sources outside the business. Probably the best known are the numerous reports produced by the Australian Bureau of Statistics (ABS).

Question 11

What is statistical interpretation analysis?

Answer 11

Statistical interpretation analysis: is the process of focusing on the data that represent average, typical or deviations from typical patterns.

Question 12

Definition of market segmentation

Answer 12

Market segmentation: occurs when the total market is subdivided into groups who share one or more common characteristic.

Question 13

4 categories of Market Segmentation

Answer 13

Demographic — age, gender, occupation, education, religion, family size, ethnicity

Geographic — urban, suburban, rural, regional, climate, landform

Psychographic — lifestyle, socioeconomic group, motives, personality, consumer opinions and interests

Behavioural — regular user, first-time user, brand loyalty, benefits sought, usage rate.

Question 14

What is a target market?

Answer 14

A target market: is a group of customers with similar characteristics who currently purchase the product or may do so in the future.

Question 15

What is a niche market?

Answer 15

A niche market: is a narrowly selected target market segment.

Question 16

What is a primary target market?

Answer 16

The primary target market: is the market segment at which most of the marketing resources are directed.

Question 17

What is a secondary target market?

Answer 17

A secondary target market: is usually a smaller and less important market segment.

Question 18

What are the factors affecting consumer behaviour?

Answer 18

Four main factors influence consumer purchasing decisions: psychological influences, sociocultural influences, economic influences and government influences.

Question 19

Four main psychological factors influence customer choice:

Answer 19

1. Perception
2. Motive
3. Attitude
4. Personality

Question 20

Four main sociocultural influences that affect customer choice:

Answer 20

1. Family and Roles
2. Peer Groups
3. Social Class
4. Culture and subculture

Question 21

What is a market description?

Answer 21

The market description section of the marketing plan provides a description of the current state of the market in which the business operates. The main purpose of preparing a market description is that it determines a clear direction for the marketing efforts.

Question 22

What is the product mix?

Answer 22

Product mix: is the total range of products offered by a business.

Question 23

Definition of Market Share?

Answer 23

Market share: refers to the business’s share of the total industry sales for a particular market.

Question 24

Definition of Product Positioning

Answer 24

Product positioning: is the development of a product image compared with the image of competing products.

Question 25

What is market coverage?

Answer 25

Market coverage: refers to the number of outlets a business chooses for its product. Three market coverage choices:

1. Intensive Distribution
2. Selective Distribution
3. Exclusive Distribution

Question 26

Product Life Cycle Definition

Answer 26

A product’s life cycle: consists of the stages a product passes through: innovation, introduction, growth, maturity and decline.

Question 27

Two types of expansion

Answer 27

Product Diversification
Geographic Diversification (exports)