Chapter 3- Marketing Flashcards
What is marketing (ias)
The management process which identifies, anticipates and satisfies customer requirements profitably
What is market reasearch
The gathering and analysis of data based on a company or a customer, which leads to more market knowledge and therefore better informed decision making
What is primary research Give examples (5)
Gathering new information by direct contact with the costumers
Observation
Questionnaire eg. Face to face, postal, phone
Consumer panel
Testing
Interview
What are the advantages of primary research (4)
Specific
New data
Taken directly from costumers
Detailed information obtained
What are the disadvantages of primary research (2)
Not accurate as costumers may lie
Expensive after setting it up and analysing the data
What is secondary reach
Based on data that has already been collected Data record reports Newspapers Past recorded data Specialist magazines Pub.ic libraries
What are three advantages and disadvantages of secondary research
Cheaper
Available immediately
Reasonably accurate if it came from a reliable source
Unlikely to be made for exact same purpose
Other companies have same data
May be out of date
What is sampling
Part of primary research
It samples a number of people to represent the whole population
What is random sampling
When everyone has an equal chance of getting picked to express personal opinions
What are the advantages and disadvantages of random sampling
Everyone has an equal chance
Personal opinion
Expensive
Might not sample people who really matter
Doesn’t work for some products e.g. specialised products
Not accurate if it is a small sample
What is quota sampling
When you survey particular people so they represent the makeup of that particular market
What are the advantages and disadvantages of quote sampling
More accurate than random sampling
Personal opinion
Directed at appropriate audience
Need to know composition of market to have accurate proportions
Unsuitable for some products
What is market segmentation
Give five examples
The division of a market into segments based on people’s required tastes
Gender Age Ethnicity Social economic class Geography
What is product range and give an example
Refers to similar products produced by the same business
Cadbury chocolate bars
What is product mix
Give an example
The combination of products that a business produces
Apple technology
What is product differentiation
How can a business fulfil this
How a business makes its products different from the rest Design Formulations Name Packaging
What is a brand
Businesses/ products consumers see as being different from others
Eg coco cola
What is generic brand and own branding
Products made by a number of businesses, where the customer doesn’t see any difference between one product and the branded product eg milk, potatoes
Made by retailers eg Lidl cereal vs branded cereal
What are the stages of product lifestyle
Development Introductions Growth Saturation/ maturity Decline
What are some extension strategies (5)
Modify product eg. New range Change packaging More promotions Different market eg. foreign Reduce price
Names four legislations relating to products and what do they do
Sale and supply of goods and services- make sure safety regulations have been passed, fit for purpose, as described, quality
Consumer protection act- sue for damages by faulty product
Food safety (NI)- make sure staff handling food has training, permises registered by local authority, food is consumable
Weight and measures (NI)- makes sure nothing is sold under the weight it is supposed to be
What is price
The money a firm requires to produce a good or a service
Give examples of pricing strategies
Based on competition, price people are willing to pay, price it takes to produce, type of product
Market- led, price is based on competitors price
Cost- based, how much it costs to produce product as well as making a profit
Destroying- to destroy other competitors and take them out of the industry
Skimming/ creaming- when you start at low price when introduced then increase price
Penetrating- start high end low
Psychological pricing- 99p or premium to make you think about quality
Price wars - to undercut rivals
Give six factors that effect price
Season Amount of product Costs of production How much the Market is willing to pay Competition Need to make a profit
What are the four parts of promotion
Advertising
Sales promotion
Personal selling
Sponsorship
Why might people promote (4)
To co operate with other companies To increase sales To advertise new product To compete with other firms Improve image of company
What is advertising known as
What are the three types of advertising
Above-the-line
promotion
Generic advertising- when an advert advertises the whole industry eg. Milk marketing board advertises milk
Informative advertising- aims to give information eg. on upcoming events and product recall
Persuasive advertising- aims to persuade a consumer to purchase the advertised product
What are some methods of advertising (5)
Radio Magazines Newspaper Billboards Internet Vehicles Cinema TV
What does below-the-line promotion include (3)
Sales promotion
Sponsorship
Personal selling
What is sale promotion
Refers to all the methods that influence the consumer to perchase the product
What are methods of sale promotion (5)
Loyalty cards Coupons Vouchers Sales Special offers, bogof Discounts Price reductions Loss leaders Free samples
What is sponsorship promotion
The promotional method which a company covers the cost of the event or service eg. Charity event
What is public relations
When the public have an interest in the business therefore the business comes across as generous and public spirited
What are the two legal constraints on promotion
Trades description act- as described, genuine prices, country of origin displayed on packaging,
Consumer protection act- if product is dangerous it has to be labelled that it is dangerous, reasonable price, gives first aid instructions
What are the other three legal constraints against promotion
ASA- advertising standards authority, honest, truthful, reasonably price, decent
CMA- competition and market authority, aims to promote competition by investigating murges or takeover, if the murger is against public interests then this will not be allowed to happen
OFCOM- office of communication, when communication takes place to make sure decency, taste and nothing is hurt/ no offence
What is place
Refers to the channel of distribution, i.e. How a business will be able to transport goods to consumers
The most appropriate
Sales outlet
Transport
Channel to use
What are the four parties involved in distribution
What is the process related to them
Manufacture- created of goods in large batches
Wholesaler- buys from manufacture in large batches and sells to retailer in smaller batches
Retailer- buys from wholesaler or manufacture and last seller before it reaches consumer, situated in a convenient place
Consumer- buys from retailer in smaller usable amounts which is replaced daily
Breaking bulk
What are the three level channels of distribution
Manufacturer
- consumer, zero level channel, direct selling, eg. farm shops
Manufacturer- retailer- consumer, one level channel, most common eg. tesco
Manufacturer- wholesaler- retailer- consumer, two level channel, helps smaller business to buy products in smaller batch, common in consumer markets
What are the factors effecting the choice of distribution channel (4)
Type of good Price of good Life span of good, perishable Costs involved Demand Competition
What are the four key trends of distribution channel
Growth of... Call centres E commerce Retail parks Retail parks Digital television shopping Diversification of products and services offered by retailers
What are the implications of e commerce
To deliver goods and service on time
Needs a fleet of vehicles to make deliveries
Because of delivering over seas then this means import and export regulations and shipping laws have to be observed
WTA is transport distribution give examples (5)
The distribution was involved the transporting of goods to their final destination Eg. Road Rail Seas Pipeline Air
What is competition
When two or more business want to secure business with costumers by providing the best product on agreeable terms
What are two factors that effect competition
Number of firms in the industry
How similar the products produced by the different firms are
What is high competitive and highly concentrated competition mean
Large number of small firms in the same industry, similar products
Small number of large firm in the same industry
What is a monopoly
When one industry is denominated by only one firm
What are four indicators of the level of competition
Measures of market share
Measures of concentration
Measuring the entry and exit of firms
Measuring the customer switching behaviour
Explain two ways you can mange competition
Reduce competition- takeover of firms that are rivals, joining with firms
Become more competitive Reduce price, increases sales, but may start price wars Improve quality- premium price Advertising Product differentiation
What is customer service
What a business does to fulfil customer needs and create customer satisfaction
Why is customer service important to a business
Cheaper to retain existing customers than attracting new ones
More likely to keep costumers
What is customer service and what does it do
Gretchen added service on to what the business does on top of providing a product/ service
The responsibility of everyone in a business
Encourages customer loyalty
What are some characteristics of customer service
Note* every business should have a customer service policy
Timeliness eg. answering calls within 20 seconds
Accuracy eg. getting customer order right 100% of the time
Appropriateness eg. if a customer has two issues then each issue should be dealt with
By dealing with complaints how does this have a positive impact on a business
If a complaint is dealt with appropriately then the customer will tell their friends and family
If not, 80% of people would tell other people
