Decision Making to Improve Marketing Performance Flashcards
Marketing
The process responsible for identifying, anticipating and satisfying customer needs profitably.
-Meeting needs and wants of customers
-Business-wide function
-Understanding customers
-Build long-term relationships with customers to retain them in future
Correlation
-Looks to see if there is a link between two factors
-If marketing managers can identify key factors affecting demand they can focus research around these factors
-Correlation analysis only identifies links but does not explain them
Why Analyse Markets?
-Know where business is and direction you plan to go -> useful to set objectives
-Reduce risks
-Activities such as marketing focused/relevant
-Limits wastage
-Helps manage funds
-Can use various methods to analyse trends in market
A Gap in the Market
If no other business is providing for the needs of customers for a particular product, it is said that there is a gap in the market.
If businesses can identify a gap in the market and fill it, they are more likely to succeed as there is no competition.
Market Mapping
Businesses have to be aware of the market they are operating in, where their product fits and where other products in the same market fit. They do this by market mapping.
This is done by looking at two key features of a product e.g. price and quality and plotting where certain brands fit in.
External Influences on Marketing Objectives
PEST-C
-Political/legal
-Economic
-Social
-Technological
-Competition
PEST-C changes may limit sales opportunities, but may also create new ones.
Internal Influences on Marketing Objectives
-Operations (capacity, quality, flexibility)
-Human resources (skills, attitude, motivation)
-Finance (budget limitations)
-Must be derived by corporate objectives
-Must be realistic (capacity, fund, staff available?)
-Culture of business (ambitious, conservative, innovative?)
Brand Loyalty
-Important to retain customers as easier and cheaper than trying to gain new ones.
-Managers will want to measure how many customers return to use the business again.
Market Share
Proportions or percentage of total market sales accounted for by an individual firm.
Can be measured by sales value or volume
Sales of this product/total market sales x100
Factors Affecting Market Growth
-Nature of product (depends on stage of product life)
-Changes in taste and fashion
-Standard of living
-Social and demographic changes
Market Growth
Increase in sales in total market
-Often beyond control of individual firms, however, must be able to react or pre-empt to changes
Change in sales over period/sales amount at start of period x100
Sales Volume and Value
-Measurement of all sales made by firm in marketplace
-Can be measured in 2 ways: (value (£), volume (kg, tonnes, litres, etc)
-Important as forms basis for working out market share
Price Elasticity of Demand Influences
-How easy to switch to an alternative product
-How unique a product is (brand image, patent, trademark)
-Time period customers search for alternatives
-How expensive product is
-Who is paying for the product e.g. company
Confidence Levels and Intervals
Confidence levels provide an indication of how certain they are with their market research findings
-95% confidence levels = 95% confident results are reliable and represent population
Degree of confidence depends on:
-Size of sample
-How sample was constructed
Extrapolation
-Look back at trends that have already occurred to try and predict future forecasts - major problem is trends don’t always continue
-Not suitable for industries with dynamic and changeable products - technology etc
-Also affected by economic conditions
