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Business Studies: Grade 11 > Chapter 11: Marketing Function > Flashcards

Chapter 11: Marketing Function Flashcards

1
Q

1.

Product-orientated approach

A
  • The focus is on the skills, knowledge, and systems needed to produce the product
  • When research is done it is focused on the product and its characteristics
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2
Q

Market-orientated approach

A
  • The focus is on satisfying the needs or wants of customers and understanding customer behaviour
  • Market research is done on an ongoing basis to make sure that consumer needs/wants are timeously identified
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3
Q

Combining product/market-orientated approach

A
  • Product will be developed in accordance with the customers needs/wants
  • Business that adapt to customer’s needs/wants through top quality are more sustainable and successful
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4
Q

Market research and development

A

Helps the business know the customers expectations in terms of:
* the product/service and its packaging
* How much they are willing to pay for it
* Preferred channel of communication
* Where they want access to the product

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5
Q

Promotion

A
  • Informing the target market about the product/service/brand that is offered
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6
Q

Logistics/Dsitribution

A
  • The movementof the product/service to make sure it reaches the desired market on time
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7
Q

Sales

A
  • Transferring ownership of the product from the business to the customer
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8
Q

Aim of marketing function

A
  • Creating competitive advantage to increase market share
  • Creating a new product/service or improving current one to broaden target market market
  • Discovering new markets so the business has the opportunity to grow and make more profit
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9
Q

Market segmentation

A
  • Dividing the market into different groups to focus the business’s resources on customers with similar characteristics and therefore similar needs
  • Conduct market research to find appropriate segment
  • The segment must be able to generate a sufficient ROI
  • Segments can be based on geographical area, lifestyle, income bracket, gender, culture\
  • Market segmentation could lead to the discovery of gaps in the market that arent being fulfilled
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10
Q

Marketing mix

A
  • Ensures all elements that are combined to make sure the business’s product/service is communicated effectively
  • Product, price, place, promotion
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11
Q

Price, product, place, promotion

A
  • Price- the price customers are willing to pay while still considering covering production costs, consider what competitors are charging
  • Place- The different channels available to make sure the product reaches the market segment
  • Product- Characteristics of product, packaging and logo
  • Promotion- Informing the target audience about the product through different advertisement media and offering special offers
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12
Q

Product in marketing mix

A
  • Main focus in marketing mix because without it there is no business
  • Different types of products
  • Branding
  • What makes a product successful
  • Developing a product
  • Product life cycle
  • Importance of packaging
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13
Q

Different types of products

A
  • Consumer goods- products the customer buys like food, clothes, etc
  • Consumer services- Services the customer purchases for personal use like hairdresser, education,etc
  • Producer goods- Business sells goods to another business for day-to-day operation like machinery, oil, etc
  • Producer services- services the business buys to assist in their daily operations like banking, insurance,etc
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14
Q

Branding

A
  • Combination of the unique features of the product and the image of the business (brand)
  • Marketing message will use the brand as the central theme to covince the buyer to associate with the image of the business and the product
  • Brand is the logo, slogan, etc
  • Helps distinguish individual products and helps buyer recognise it
  • Brand creates customer loyalty by creating a certain status associated with the brand
  • Abranded product provide a guarentee that the product is of a certain standard or quality, giving the customer a sense of confidence
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15
Q

What makes a product successful

A
  • Satifying needs/wants- product must satify needs/wants but must do so consistently by monitoring market incase customer habits change, especially within market segments
  • Design- The appearance, quality, consistency, performance and brand in order to captivate a desire within the customer
  • Competitive advantage- Product must be differentiated among competitors so they are identifiable to customers. Uniqueness creates advantage
  • Cost - Customers are willing to pay more fot certain products and less for others. Cost must cover production costs

Opportunity cost- has to sacrifice another purchase for your product

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16
Q

Developing a product

A
  • 1: Generate ideas- get input from multiple sources
  • 2: Research- research resources needed to create product. Any ideas that don’t align with brand are removed
  • 3: Feasibility n Viability- Are the ideas feasible(practically implemented) and viable(can generate sustaible income). Business must assess market share and break even points
  • 4: Prototype- Business will create the product and test it to identify any faults or defects. If possible will use computer simulations to deal with defects
  • 5: Market testing- Business will introduce the product to a small group of market segment and use feedback to introduce product or scrap it completely if not received well
  • 6: Once all steps are done and product is approved the final product will be released to market at a large scale
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17
Q

Product life cycle

A

Phase 1: Development phase
Phase 2: Introduction phase- Few buyers but as promotion strategies are implemented sales increase, little to no profit because development cosst are still being covered
Phase 3: Aggressive promo strategies increase sales, generate loyalty through frequent interactions, keep track of how customer reacts to product inorder to adapt strategies
Phase 4: Maturity- Sale volumes either maintain the same or decrease n business has to be creative to maintain loyalty
Phase 5: Decline- New tech means new products entering market meaning more pressure of existing products, new products may result in a loss of interest in “out-dated” products. Businesses will put older products on sale to clear the stock n make room for new products

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18
Q

Extending product lifespan

A
  • Variation-Offer the product in different sizes, colours, etc to increase sales
  • New market- Creating a new demand for the product by offering it a different location that it wasnt available in previously or appealing to a different market segment
  • Development- Improving the product’s functionality or making it more modern to attract customer’s whose needs may have changed
  • Promotion- the business could use different promotional strategies like “buy-one-get-one-free” to create more sales
  • Price- The business could offer more discounts to generate a greater demand
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19
Q

Packaging

A
  • Refers to the way the product is presented to the customer
  • Protects/prevents damage or breakage
  • May make it easier to use the product
  • Makes it easier to handle
  • Assists with transportation or storage of the product
  • Can be used as apart of the advertising to promote product to appeal to the customers
  • Reinforce the business’s brand
  • Provide important information like allergents and warnings
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20
Q

Pricing as apart of the marketing mix

A
  • Factors to consider with price determination
  • Pricing objectives
  • Pricing strategies
21
Q

Factors to consider when determining price

A
  • Price must cover developmental costs while still be enough to create profit
  • Consider what amount the buyer will be willing to spend, also the opportunity cost
  • Low price implies low quality, high price implies high quality
  • Consider competitor’s prices, if business has monopoly(sole provider of a certain product) they can charge higher, if there are many providers then they should use competitive pricing
  • If business has a strong brand, they should charge higher
22
Q

Pricing objectives

A
  • Break-even
  • Enter new markets
  • Increase business market share
  • Increase profit
  • Attract customers away from competitors
23
Q

Pricing strategies

A
  • Cost plus
  • Price skimming
  • Penetration pricing
  • Competitive pricing
  • Promotional pricing
  • Psychological pricing
24
Q

Cost-plus pricing

A
  • Business will look at the cost of delivering a service or manufacturing the product and add markup percentage
25
Q

Price skimming

A
  • Usually used when a new product is introduced
  • Business is trying to make as much profit as possible so they charge at a high price and justify it by the uniqueness
  • Could an attempt to cover the large investment in development and research
  • Business must lower the price when the new competitors enter, sales drop, or when development costs have been covered
26
Q

Penetration pricing

A
  • New entrance will offer service/product than competitors to attract customers
  • Aim to attract and create customer loyalty with low prices, so that when the prices increase the customers will continue to use the product nonetheless
27
Q

Competitive pricing

A
  • Looking at what competitors are charging for their products and charging similarly
28
Q

Promotional Pricing

A
  • When the business sells their products at a lower price or two products for the price of one in order to get rid of stock due to the end of a season or get rid of unwanted stock
29
Q

Psychological pricing

A
  • Business could charge at a very high price to give the impression of high status
  • Using odd pricing to give the impression of better pricing(R199,99 instead of R200)
  • Bundle pricing when products are packaged together as one unit
30
Q

Place as apart of the marketing mix

A
  • Deciding on the correct distribution channel will ensure the business delivers the product to the customer at the right time and place
  • The more intermediaries involved the more expensive the product will be for the customer
  • Type of product
  • Location of customer
  • Purchase timing
  • Competitors
31
Q

Place as part of marKeting mix

Type of product

A
  • Businesses should look at the quickest way to get the product to the customer if goods are perishable
  • Product may have a technical element to it which may require a sales person to demonstrate the use of the product
32
Q

Distribution channel
Location of customers

A
  • If customer base is spred over a large geopgraphical area then business will select a distribution channel where intermediaries are spred over the same area to make sure product is accessible to all customers
33
Q

Purchase timing

A

Business will look at how often and when the product is purchased and see which channel will ensure the customer can access the good when they need it

34
Q

Competitors

A
  • See how the competitors are selling their goods and find a more effective way to reach the customer than the competitor
35
Q

Promotion as part of the marketing mix

A
  • Giving the customer info about new and existing products
  • Message will focus on the advantages of the product, price and where it will be sold
  • Aim is to convince customer that they cannot go without product and that its good value for money, if successful will create higher sales
36
Q

Promotion/marketing communication mix

A
  • Marketing
  • Sales promotion
  • Personal sales
  • Publicity
37
Q

Advertising

A
  • Used to reach the audience in order to inform/persuade to buy product using the appropriate medium
  • Step1: Deciding on the objective- what’s the point of the ad and what are they trying to achieve(new market, improve market share, product awareness)
  • Step 2: Ad budget- decide of the money that’ll be set aside for the ad
  • Step3: Designing ad campaign- Good campaign will have the objective and target audience in mind(Also decide on duration of campaign)
  • Step4: Media selection- Select the appropriate medium to get the best value for money
  • Step5: Evaluating success- analyse if campaign was successful and if it was cost effective then use this feedback to improve next campaign

mediums: tv, billboards, radio, newspaper, magazine, vehicle, mail

38
Q

Sale promotion strategies

A

Sales promotion strategies:
* Price - pricing strategies and discount coupons for the next purchase
* Free samples- encourage customer to try new product and hopefully buy it. Sometimes placed in magazines and traffic lights
* Competitions- Encourage the purchase of product through
* Point-of-sales displays

39
Q

Personal sales

A
  • Often when there are variations of the product being sold to the customer
  • Speaking to a sales assisstant will help h\the customer discuss their needs before buying the product
  • Aftersale services: its easier to retain current customers than to gain new ones, so the business has to engage in follow up on customer satisfaction
  • Following up helps the business fix mistakes and maek the customer feel their concerns have been addressed
  • Aftersales usually adds additional value to product
  • Other Personal Sales services: delivery, advice, exchanging goods, arranging credit facilities
40
Q

Use of technology in marketing

A
  • E-marketing is cheaper than traditional marketing
  • Internet- Customers have direct access to product in order to get information, some businesses have apps then push new info on products on a regualr basis, websites or apps help business get quicker feedback
  • Social media- Inexpensive ways the business can interact with customer, can create blog for customer to voice themselves or compliment business, can create short promotional content
41
Q

International Marketing

A
  • Advantage: access to better quality, cheaper labour, bigger market
  • Disadvantage: More competition
  • Government regulations : Trade Agreements, Import duties, Export subsidies, import quotas, Tarrifs
42
Q

Trade Agreements

A
  • Agreement between countries allowing them to gain access to resources they dont locally produce, this increases their market as businesses can now sell globally
43
Q

Import duties

A
  • A type of tax paid to SARS when goods are imported
  • Can be calculated Ad Volarem - duty is a % based on the value of the goods, or Specific - levied based on the weight of the imported product
  • This is to make imported goods more expensive to encourage the support of locally produced goods
44
Q

Export subsidies

A
  • A form of government support to sectors that export goods
  • Helps keep the prices of the exported goods low to compete on international markets
  • Exporting is encouraged as it brings more foreign currency
  • Can be in the form of tax rebates or government paying back part of the import tax on raw materials used to make the exported goods
45
Q

Import quotas

A
  • Used to restrict volume of imported goods from other countries to protect the sustainability and growth of the economy
46
Q

The Consumer Protection Act

CPA

A
  • Protecting consumers from unethical marketing practices
  • Protect previously disadvantaged individuals in accordance with their rights to be treated fairly
  • Align SA with international practices of protecting consumer rights
  • Right to privacy
  • Right to choose
  • Right to disclosure of information
  • Right to fair and honest dealings
47
Q

Intellectual property and marketing

A
  • IP refers to the protection of someone’s work
  • Protections through things like patents, copywrites, trademarks, etc
  • IP law protects the person with the IP rights and insures they receive financial benefits and recognition
  • In SA IP is registered at CIPC
  • Protect logos, brand, and slogans because the business uses them to be indetifiable
48
Q

Different types of IP

A
  • Trademark: Any symbol or wording that is legally registered to be used by the business, serves as the fac of the business, helps business gain competitive advantage
  • Collective marks: Sign that helps distinguish product by materials used, geographical area, or way of manufacturing, usually businesses join an association that offer this of they meet certain standard(SABS)
  • Industrial design: If industrial design becomes apart of trademark, its colours, pattern, shapes, etc are protected
  • Patent: Serve the right to a product or manufacturing process for a period of time, usually when theres a new way of doing something, business must use to advantage n gain competitive advantage

Collective: Environmentally friendly, Proudly South African, Fair trade

Business Studies: Grade 11 (12 decks)

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