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GCSE Business > Chapter 5 > Flashcards

Chapter 5 Flashcards

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1
Q

What are the 4 ps of marketing?

A
  • product
  • price
  • promotion
  • place
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2
Q

What does product mean as an element of marketing?

A

Firm must identify customers needed(or wants). Then they need to discover a product which will fulfil their needs.

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3
Q

How is price an element of marketing?

A

Price must be one that the customers think is good value for money. This isn’t the same as being cheap.

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4
Q

How is promotion an element of marketing?

A

The product must be promoted so that potential customers are aware that is exists. Doesn’t matter how good a product is , if no one knows about it , no one will buy it

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5
Q

How is place an element of marketing?

A

It must be sold in a place customers will find convenient . That is why there are buckets and spades at the beach, or petrol on the roadside, it is the place most convenient for them to buy it. Place also refers to the channel of distribution . Whether or not it is sold through retailers , wholesalers or straight to a customer .

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6
Q

How is the marketing mix different for different products?

A

Depending on situation it can depend:

  • Example: if customer wants product , its in a really convenient place , they are prepared to pay higher prices
  • alternatively some people may be prepared to go to a less convenient place, where the prices are lower.
  • customers needs and wants change over time, businesses need to adapt their marketing mix to meet these changes
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7
Q

What can the structure help a business determine?

A

Their share in that market.

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8
Q

What is the market size?

A

Number of individuals (including companies)within the market which are potential buyers or sellers of the products. It can also mean the total value of products in the market

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9
Q

What is market share?

A

Proportion of total sales within the market that is controlled by a business

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10
Q

What is segmentation?

A

When people within a market are divided into groups

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11
Q

How cam segmentation of a market help a business?

A

Knowing the different market segments allows the business to identify their target market . They can create a marketing strategy aimed at their target market , to make sure marketing is effective as possible.

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12
Q

What is the target market?

A

Group of people that a product is aimed at

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13
Q

Examples of segmented market?

A 
Age
Income
Location
Gender
Religion
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14
Q

How does market research help a business?

A

Helps business understand its customers and competitors. Should help their marketing mix. Market research means the business will better identify their customers needs and therefore be more likely to provide products that satisfy those needs and customers will buy.

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15
Q

What will the business be able to do if they identify and satisfy customer needs?

A
  • increase sales - demand for the product or service is how much people will be willing to buy at a given price, knowing the demand will help businesses adjust prices.
  • stay competitive - gathering information on the products can help show how they are different.
  • created targeted market- produce promotional material effectively and products that the target market will buy
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16
Q

What is a market opportunity?

A

When a group of customers has a need that hasn’t been met. A business will want to develop a way to meet the customers needs before its competitors do.

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17
Q

What does discovering a market opportunity help a business do?

A

Might develop a new product, or it might mean selling an existing product in a new place or at a new price , or maybe just promoting the product in a new way to convince customers they need it

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18
Q

How can you find a market opportunity?

A

Market research. See how big it is , how much money it can afford to spend, how quickly it needs the data and how much data it neeeds

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19
Q

What are the two different types pf market research?

A

Primary and secondary

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20
Q

What is primary market research?

A

Involves things like questionnaires, phone surveys, interviews and focus groups. It is useful for finding out new information and getting the customers views on your product. Usually ask a sample, large samples are more accurate but also kore expensive.

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21
Q

Positives of primary research?

A

Provides data that is up to date , relevant and specific to needs of your business. The research can also be specific to the target market.

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22
Q

Downsides of primary market research?

A

Its expensive and time consuming

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23
Q

What is secondary research?

A

Gives businesses a wide range of data , not just the views of their sample group. It is useful for looking at the whole market , and analysing past trends to predict the future.

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24
Q

What does secondary research involve?

A

Looking at market research reports, government publications , articles in the newspaper and magazines or on the internet. Often used by smaller businesses as its cheaper than primary research, and data is easily found and instantly available. Disadvantages are its not always relevant to your needs, its not specifically about your product , and is often out of date.

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25
Q

What is quantitive data?

A

Anything you can measure or reduce to a number.

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26
Q

What is qualitative data?

A

Information that is all about peoples feelings and opinions. Tricky to analyse as it is hard to compare other peoples opinion.

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27
Q

5 stages of the life cycle?

A
  • research and development
  • introduction
  • growth
  • maturity
  • decline
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28
Q

What is the research and development stage of the life cycle?

A

Is the first stage , it is used develop an idea and turn it into a marketable product.

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29
Q

What is the introduction in the products life cycle?

A

Product is launched and put on sale . This is usually backed up with lots of advertising and sales promotion

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30
Q

What is the growth stage of the life cycle?

A

During this phase the demand increases, until the product becomes established.

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31
Q

What is the maturity phase in the life cycle?

A

Demand reaches its peak . Promotion is less important. As products popularity grows , businesses will try to make products more widely available. Towards the end phase the market becomes saturated and there is no rook for expansion

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32
Q

What is the decline stage in the life cycle?

A

Eventually demand falls as rival products take over.

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33
Q

Sales and profit during the first two stages of the product life cycle?

A

Firm spends money on research and promotion , but sales of the product are usually low . The business will expects to make a loss during these stages

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34
Q

Sales and profit during the third and fourth stages of the life cycle?

A

Business will hope to earn enough money to pay back their initial investments and make a profit

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35
Q

What happens to sales and profit in the decline phase of the life cycle?

A

Firm will probably spend less money supporting the product. And as sales fall, it will begin to make a loss, unless it stops making the product

36
Q

What is an extension strategy?

A

Used in decline phase to boost sales. If it works the product will make a profit for longer, however it means spending more money on the product. Firms needs to strike a balance between investing money in supporting old products and in designing new ones.

37
Q

Examples of extension strategies?

A
  • adding more or different features
  • using new packaging
  • targeting a new market
  • changing advertisement
  • lowering prices
38
Q

What helps businesses decide their extension strategies

A

Certain ones may be more beneficial, but their costs will be higher. They could use combinations of them

39
Q

What is a product portfolio?

A

A range of products that a business sells. Businesses aim to habe a balances product portfolio. This means they ideally want to be selling a variety of products , all at different stages of the product life cycle. So if one product fails , they should still be able to depend on others

40
Q

What is the boston matrix?

A

Is a way a firm analyses its product portfolio. The market share is on one side and on the other is market growth

41
Q

What is a question mark on the boston matrix?

A

All new products are question marks . They have small market share and high market growth. They aren’t profitable yet and need heavy marketing to give them a chance of success.

42
Q

What are dogs in the boston matrix?

A

Dogs have low market share and low market growth, they’re are a lost cause. Business will either get profit it can before discontinuing them , or selling them off.

43
Q

What are cash cows in the boston matrix?

A

Bring in plenty of money. They have high market share and low market growth, they’re in the maturity phase. Costs are low, since they’ve already been promoted and are produced in high volumes

44
Q

What are stars in the boston matrix?

A

Have high market share and high market growth. They are future cash cows.

45
Q

What does the boston matrix help do?

A

Analyse a product portfolio. See whether it is balanced or not. A balanced portfolio means business can use money from its cash cows to invest in its question marks so they can become stars

46
Q

Why would firms broaden their product portfolios?

A

To increase sales , target a different segment of the markets or compete with other companies

47
Q

How could businesses broaden their product portfolio?

A
  • adding products to an existing range by developing new products based on their current ones
  • increasing range of products by developing products that are different from their current ones.
48
Q

What is diversification?

A

Designing and producing more products. It reduces the risk that a decline in sales of one product will harm the business

49
Q

Benefits of developing new products?

A
  • increase overall sales, and may extend life cycle of existing products
  • appeal to new market segments, new business opportunities
  • can charge higher prices before new competitors bring similar products to market
  • good for firms reputation
50
Q

Risks with a firm developing new products?

A
  • very costly and time consuming
  • end up wasting resources
  • might not be able to produce product on large scale at a low cost
  • may risk reputation if poor product.
51
Q

What will market driven firms do?

A

Will use market research to find out what the target market wants then make it.

52
Q

What do product driven firms do?

A

Design or invent a new product and then try to sell it

53
Q

How to build a good brand image?

A
  • easily recognised
  • built over years
  • brand has to be constantly managed using the marketing mix
  • will help increase sales
  • reputation of high quality product
54
Q

What is product differentiation?

A

Making product distinctive in the market. These differences should make customers want to buy the product instead of others.

55
Q

How to differentiate your product?

A

Give the product a unique selling point.

56
Q

What is the design mix?

A
  • function : must be fit for purpose
  • cost: good design will lead to low manufacturing costs
  • appearance- good product should look attractive and distinct.
57
Q

What do firms need to think about when deciding the price of a product?

A

How demand will be effected

58
Q

Internal factors that influence pricing decisions?

A
  • businesses aims and objectives
  • businesses internal costs may change , which effects prices
  • where a products life cycle will effect its price
  • other elements of the marketing mix
59
Q

External factors that influence pricing decisions?

A
  • nature of the market
  • what competitors are charging
  • if business’ costs are high
60
Q

What are the 5 pricing strategies?

A
  • price penetration
  • loss leader pricing
  • price skimming
  • competitive pricing
  • cost plus pricing
61
Q

What is price penetration?

A

Where a firm charges a very low price when a product is new to get lots of people to try it. Good way to establish market share for product in competitive market

62
Q

What is loss leader pricing?

A

When price of the product is set below costs. Firm doesnt make any profit on it, but the idea is customers will buy other products aswell.

63
Q

What is price skimming?

A

Where firms charge high prices to begin with

64
Q

What is competitive pricing?

A

Where firm has to charge similar prices to other firms

65
Q

What is cost plus pricing?

A

Firms may use it if not in price competition with other producers. Firms work out the total costs of making the product , and then add on certain amount depending on how much profit they want to make while still having reasonable demand .

66
Q

How to use a mark up?

A

Work out how much the product costs then add a percentage mark up.

67
Q

How to use a profit margin?

A

Work out how much the product costs and increase it to get a profit margin you want.

68
Q

Reasons promotion is important for a business?

A
  • inform customers about the product
  • persuade customers to buy the product
  • create or change the image of a product
  • create or increase sales
69
Q

What is advertising?

A

Any message a firm pays for which promoted the firm or its products

70
Q

Ways a firm can advertise?

A
  • newspapers
  • magazines
  • posters
  • leaflets
  • television
  • internet
71
Q

What is a sponsorship?

A

When firms give money to an organisation and in return their name is displayed by the organisation or at the event

72
Q

What is PR?

A

Communication with the media.

73
Q

Positives and negatives of pr?

A
  • cheap and easy way to get spoken by the media

- little control over what the public sees

74
Q

What are tje six sales promotion methods firms use?

A
  • competitors
  • 2 for one offers
  • free samples
  • coupons
  • point of sale displays
  • free gifts
75
Q

Advantage of sale promotion?

A

Should encourage new customers to try product. Boost sales

76
Q

Disadvantage of sales promotion?

A

Customers get used to seeing products on promotion and may be reluctant to buy them at other times . Make a product also feel less luxurious

77
Q

Why firms use social media to promote their brand?

A
  • quick , easy and cheap
  • can advertise products , offer sales promotions , share news stores and build up excitement
  • customers can quickly interact with firm
  • any mistakes and your reputation could be ruined
78
Q

What is promotional mix?

A

Firms must choose the best way to promote their products

79
Q

What factors influence a firms promotional mix?

A
  • finance available
  • nature of the product or service
  • what competitors are doing
  • nature of the market
  • target market
80
Q

What are channels of distribution?

A
  • whole salers (buy products in bulk and store them in a warehouse)
  • retailers(sell products to consumers
  • telesales(selling product to consumers via phone)
81
Q

What happens when products are sold to whole salers?

A

-manufacturers sell products to whole salers , consumers or retailers buy the product from the whole saler. Good for manufacturers as dont waste time communicating with consumers

82
Q

What happens when products are sold directly to retailers?

A

Manufacturer can provide retailer with product knowledge , for better customer service. Can be hard for new firms to persuade many retailers to stock products

83
Q

What happens when products are directly sold to consumers?

A

-can be done via telesales. Often cheapest channel for the consumer. Can be time consuming for firms . Expensive as will, have to deal with deliveries

84
Q

What is m commerce?

A

Mobile commerce. Goods and services bought using a wireless mobile device.

85
Q

How the internet helps businesses?

A

People in more places can buy businesses products

GCSE Business (6 decks)

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