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
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
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
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
5
Q
Promotion
A
- Informing the target market about the product/service/brand that is offered
6
Q
Logistics/Dsitribution
A
- The movementof the product/service to make sure it reaches the desired market on time
7
Q
Sales
A
- Transferring ownership of the product from the business to the customer
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
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
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
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
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
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
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
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
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
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
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
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
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
Price skimming
* 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
Penetration pricing
* 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
Competitive pricing
* Looking at what competitors are charging for their products and charging similarly
28
Promotional Pricing
* 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
Psychological pricing
* 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
Place as apart of the marketing mix
* 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
# Place as part of marKeting mix
Type of product
* 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
Distribution channel
Location of customers
* 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
Purchase timing
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
Competitors
* See how the competitors are selling their goods and find a more effective way to reach the customer than the competitor
35
Promotion as part of the marketing mix
* 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
Promotion/marketing communication mix
* Marketing
* Sales promotion
* Personal sales
* Publicity
37
Advertising
* 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
Sale promotion strategies
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
Personal sales
* 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
Use of technology in marketing
* 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
International Marketing
* Advantage: access to better quality, cheaper labour, bigger market
* Disadvantage: More competition
* Government regulations : Trade Agreements, Import duties, Export subsidies, import quotas, Tarrifs
42
Trade Agreements
* 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
Import duties
* 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
Export subsidies
* 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
Import quotas
* Used to restrict volume of imported goods from other countries to protect the sustainability and growth of the economy
46
The Consumer Protection Act
| CPA
* 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
Intellectual property and marketing
* 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
Different types of IP
* 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
